In a book published in 1983, Norman Augustine, a luminary of the US aerospace industry, drafted a series of light-hearted “laws”, 52 in alli. Law XVI reads: “In the year 2054, the entire defence budget will purchase just one aircraft. This aircraft will have to be shared by the Air Force and Navy 3-1/2 days each per week except for leap year, when it will be made available to the Marines for the extra day.”
Augustine last August told The Economistii that as far as this “law” was concerned “we are right on target. Unfortunately nothing has changed.” The truism in law 16 is that while defence budgets grow, the cost of equipment escalate too; meaning, quite literally that more and more by ever less and less. Augustine and The Economist report that the fifth-generation Boeing F22 Raptor (pictured) sells for US$160 million apiece (US$350m including the cost of developing the jet), compared with US$50-60 million for the Lockheed Martin F-16 designed in the 1970s. “In the long run, high unit costs must limit numbers. Since 1970 America’s fleets of combat aircraft and major warships have shrunk, even as defence spending rose,” The Economist reported. For reasons of cost (and perhaps lack of threat), US defence minister Robert Gates last year ordered an end to the Raptor production run, capping the fleet at 187 – substantially short of the 750 contemplated in the 1990s.
Cost and a paucity of budget seems to be the reason the South African Infantry will receive just 264 Badger new generation infantry combat vehicles under a R8.4 billion (minimum) contract announced in May 2007. The 8×8 Patria AMV-derived Badger is meant to replace the 6×6 Ratel, developed from 1973. Some 88 are needed for a mechanised infantry battalion, meaning the 264 is sufficient for three battalions. Yet, the mechanised infantry musters two regular battalions and four reserve, creating a requirement for 528. The infantry is also not the sole user of the Ratel, of which some 1200 were built. Other users include the Armour (base for ZT-3 tank destroyer), the Army’s brigade tactical headquarters, the Signal Corps (communications centre vehicles) and the Artillery (command vehicles, forward observation post vehicles, etc). For now, someone will have to soldier on with the Ratel, leaving the mechanised infantry with two vehicle systems to administer.
Jon Connell, in his 1986 book, The new Maginot lineiii, laments this is largely the fault of government and the military, in the form of “specification creep”. It all starts innocently enough. Describing the European Tornado fighter project, Connell records the intent was that Britain, Germany and Italy would work together to save money: “production lines could be longer and thus the unit costs of each plane would be smaller. In an alliance full of unnecessary duplication in weapons procurement, the Tornado, it was hoped, would demonstrate the benefits of collaboration. Like so many American systems, however, the Tornado was plagued by spiralling cost and inefficiency. The problems once again arose from competing and complicated specifications…” Thus, in 1970, the German Luftwaffe expected to pay some DM15 million for each. Ten years later it was DM35.2 million.
“The constant sacrifice of quantity for quality leads to a vicious circle: fewer and fewer weapons are expected to do more and more, which in turn puts a premium on even greater sophistication.” Add to this Augustine’s Law XV: “The last 10 percent of performance generates one-third of the cost and two-thirds of the problems.” Yet, as Soviet dictator Lenin reminded, “quantity has a quality all its own.” Dissimilar combat between the McDonnell Douglas (now Boeing) F15 Eagle and the older McDonnell Douglas F4 Phantom II as well as Northrop F5E Tiger II fighters over the Nellis air force test ranges in 1977-8 found that there was, in the words of US Air Force Lieutenant Colonel George Dvorchak, no “way to out-technology the other guy. If he has some good basic capabilities, numbers are the basic driver. The reason that incremental weapons improvements wash out in the log run is that people learn to adjust to them.” In the tests, the F15 “invariably” came off best in one-to-one dogfights. “But when the combat became more confused, the F15’s advantages faded… when four F15s met four F5s the results were usually fairly even”, the F15s expensive hi-tech “simply did not appear to help it”iv.
At the risk of belabouring the point, there is the example of the United Defence (now BAE Systems) M2/M3 Bradley infantry/cavalry fighting vehicle. Set to cost US$108 000 each in 1968 (US363 000 in 1985 dollars), it in the later year cost US$1 459 000, “four times more expensive (allowing for inflation) than originally anticipated. Not only that: you could have bought at least eight improved versions of the [predecessor] M113 [armoured personnel carrier] for one Bradley, and each of those eight would have been able to transport 11 instead of six soldiers to the battlefield.” Culprits behind this cost escalation included changes in specification, notably the addition of the Hughes BGM-71 TOW antitank missile. This, says Connell, “had a drastic effect on the design of the new vehicle. It required a large turret to accommodate it, and this in turn meant that the number of soldiers who could be squeezed aboard the new vehicle would have to drop from 12 to nine. And three, instead of one … would have to remain aboard the vehicle at all times. In effect, the vehicle would be able to carry half as many men as had originally been anticipated.v“
Illustrating the interpersonal and institutional politics that always accompanies acquisitions, General Don Starry, one of the leading thinkers in the US Army in the 1970s, noted in Army magazine in 1987 that “We in TRADOC [the Army’s training and doctrine command] …decided to put the TOW on the [Bradley] because we realised that if we did not put the TOW on the [Bradley], we would probably never have a [Bradley].” In May 2000, the US Federation of American Scientists, a think tank on defence matters, put Bradley’s average unit cost at US$3.166 million.
A selection of other Augustine’s Laws
Another bugbear that raises its head here is that of “outsourcing” as a way to save costs. Why have chefs, shipyards or mechanics if these can be contracted at commercial prices? There are two ways of “outsourcing”: centralising services within an organisation or contracting an outside vendor. Both have advantages – and both have snags.
Ralph Peters detests vendor outsourcing: “Those in government who’ve elevated outsourcing to a state religion pretend it helps our war effort – with the whopper that outsourcing military functions saves taxpayer dollars,” he wrote in the New York Post in October 2007vi. “Exactly how does that one work? You get stuck with the training and security-clearance costs; the soldier lured to the private sector gets his salary doubled or tripled – then the contractor adds in a markup for his multiple layers of overhead costs and a generous profit margin, and bills the taxpayers. How is that cheaper than having soldiers do the job?
“The scam-artists tell us that using contractors saves money in the long run, since their employees don’t get military health care and retirement benefitsvii. But the numbers just don’t add up. Contractors are looting our military – while wrapping themselves in the flag. … The disgraceful cycle works like this: Contractors hire away military talent. The military finds itself short of skilled workers, so contractors get more contracts. With more money, they hire away more uniformed talent.”
Others have agreed: Speaking to the Canadian Press agency in October 2004, Martin Shadwick, then a defence analyst at York University’s Centre for International and Security Studies in Toronto, noted privatisation often provided “meagre savings and can leave the military without vital skills”viii. A counterpoint, of sorts, was provided in June 2005 by Paul Cerjan, at the time vice president of worldwide military affairs at Halliburton/KBR, then a major contractor in Iraq. Asked why outsourcing was cheaper, he told the US PBS television network: “… when you look at the cost of that soldier and a life-cycle environment, the dollars just show up. It’s more cost-effective to outsource some of those activities, those functions, outside of the military. I didn’t do the numbers, but I’m telling you, it’s cheaper.ix …
“Well, I can’t stand here and give you that analysis. I didn’t do it. That’s a DOD analysis, and they came up with the conclusion it’s cheaper to outsource. So they outsource to KBR. And we got the contract. We do what they ask us to do. So if you’re asking me to do the business case and give you the puts and takes on it, I can’t do that. I can just tell you its overall context. Having been in the military and seeing the military downsize and know what we were doing putting contractors on the battlefield, it’s cheaper.”
Paul Singer, author of Corporate Warriors: The Rise of the Privatised Military Industry, in the same interview, disagreed: “The reality of this, and the irony of it, is that we often talk about it in terms of economic cost savings, but there are no proven economic cost savings. There is simply no comprehensive study that we can look at and say that it has proven to save us money. …”
The other type of “outsourcing” involves sharing people, the “shared services” model. The argument is all the military Services have bands, human resources departments, catering staff, truck mechanics and the like, who do very much the same work regardless of their station. A personnel clerk is a personnel clerk, whether in the Army, Air Force or Navy.
Stewart Baillie, director, defence shared services, for the New Zealand Defence Force says “a shared services organisation allows the Defence Force to consolidate and improve supplier relationships and reduce compliance costs. The aim is to standardise, simplify, and where applicable, automate processes; reduce duplication; undertake reviews, assessments and analysis on behalf of NZDF stakeholders and ensure that the development of any shared service opportunities are undertaken in collaboration with the Services. This will allow [it] to deliver solutions, with the support of our trading partners, focused on our customers’ needs.” There seems to be little information and less study how well shared services are benefitting militaries. The SANDF has long experience with the shared services approach, some of it quite successful and long-running in the form of the SA Military Health Service, a shared medical service for the Army, Air Force and Navy; and the Chaplain’s Service, which provides the services religious support.
Other attempts at shared services have been, apparently, more mixed. Consultants Deloitte & Touche suggested a number of reforms as part of a R49.59 million “efficiency study” in 1996-7x. Pierre Tredoux, then head of Deloitte & Touche Consulting’s public sector division, told the Business Times newspaper the restructuring “will result in sustainable cost savings of 22%, without diluting the operational effectiveness of the [SANDF].” The study also indicated “clear opportunities for major additional savings”xi.
The study informed a series of reorganisations between 1997 and 2000 that saw the SANDF and its constituent Services convert their headquarters into “head offices” and abandon a structure based on staff divisions, derived from the successful Prussian model, in use generally, with the world’s militaries, since the 19th Century. The restructuring included a change of mandate for the Services and the creation of the Joint Operations Division (J Ops) on August 1, 1997. Prior to its establishment, each Service had a staff responsible for conducting operations for that service as directed by the Service chief and the CSANDF. The latter had his own operations staff, but this acted more as a coordinating body. Where forces from more than one Service operated together for either extended periods or came together for a vital operation, a joint force commander would be appointed, usually the officer in charge of the larger continent.
The development followed similar changes carried out in the US Armed Forces under the Goldwater-Nicholls Reorganisation Act of 1986. Author Tom Clancyxii put it this way: “Goldwater-Nichols revolutionised the way the United States military services operate. Each of the military services has its own culture and traditions, its own sources of pride and ways of doing things, but these differences, in addition to the inevitable competition for resources and status, can easily get in the way of cooperation. Meanwhile, the speed – the tempo – of warfare grows ever faster; and war becomes more lethal. The US military must be able to project massive, shattering force quickly from many different directions – land, sea, air and space – which means, among other things, that service parochialism is an expensive and dated luxury. The new military mantra is ‘jointness’ – all the services must be able to work together as well as comfortably as with members of their own organisations. Goldwater-Nichols aimed to implement ‘jointness’ by breaking the hold of individual services on their combat forces. All operational control was taken away and given to regional [combatant commanders]. This meant that the services became responsible only for organising, training and equipping military forces. Once the forces were operationally ready, they were assigned to one of the Unified Commanders.”
A similar distinction came to be made in South Africa. The Services are now tasked with providing properly trained and equipped forces and J Ops is the sole agency for deploying forces for operations and force preparation exercises. Forces are assigned per- and for the duration of the mission and afterwards revert back to the service. The exception is the Special Forces Brigade, which is permanently under command.
Stripped out of the Army under the mantra of centralisisation was its signals, military police, personnel and logistics (supply and workshops) capability. Also dissolved at the time was the remnants of the Army’s numbered field divisions (7, 8 and 9 SA Divisions) and brigades (6 SA Brigade and 44 Parachute Brigade). Rather than leaving the Army’s forces organised the way they would fight – as balanced forces consisting of combat, combat support (CS) and combat service support (CSS) units and sub-units, it was thought better to “stovepipe” the infantry, armour, artillery, etcetera, into separate silos. Should a field formation be required, the idea was J Ops would bring into its orbit one of the Army’s operational command-and-control capabilities – either 43 or 46 SA Brigade headquarters – and “task organise” a force from the various Services and “Divisions” suitable for the mission. This is, of course, an old South African vice, dating back to at least WW1 when a number of ad hoc units were formed that could afterwards not pass on hard-won battle honours. Writing about a more recent example, during Operation Moduler, author Helmoed-Römer Heitman said of the creation of the temporary 20 SA Brigade “the creation of such ad hoc formations being one of the South African Army’s less admirable habits.xiii” Scratch formations created during the Border War tended to lack balance and depth. They especially lacked the force levels to generate an adequate reserve and nearly always had improvised headquarters as well as deficient artillery (CS) and logistics (CSS) support. The composition of the Operation Boleas force that intervened in Lesotho in September 1998 showed many of these weaknesses.
A final financial consideration is false economy. Examples are diverse and can involve “mothballing” some equipment in peacetime as an economy. In wartime, a South African artillery battery musters eight guns and crews. To save money this can be reduced to six. But the guns and their crews are part of a larger whole, both at the battery and regimental (artillery battalion) level. Unless the rest of the structure is similarly pruned, any economy will be difficult to achieve. A similar false economy can be achieved through the ad hoc approach described above. The South African Artillery is designed and organised to engage the enemy at the regimental level, ironically, one is told, as a wartime economy: it is thought deploying a smaller force is not economical as the regiment is the lowest level at which all the command-and-control and logistics is present to fight the guns and keep them going. Yet, during the Border War, guns were often deployed singly or as troops and batteries – with the inevitable result that command-and-control, logistics and maintenance had to be improvised and that the results were consequently sub-optimum.
There are other “economies” as well that should be discouraged. It has been reported that a number of studies since the 1950s have found the minimum number of frigate-sized vessels required for the SAN in wartime is six. Heitman has often said the same. Yet, in the face of financial constraint, the SAN has consistently settled for less – both in the past decade and in the 1950s. Back then the return of the sovereignty of the Simon’s Town naval base, ceded by an Act of the Cape Parliament in 1885, was a “hot-button” ideological issue for the then-ruling National Party. Part of the payment was the acquisition of six frigates – three state-of-the-then-art Type 12’s and three Type 15’s – converted W-class destroyers re-classified as frigates – as well as 10 Ton-class coastal minesweepers and four Ford-class seaward defence boats. Additional purchases included 17 Westland Wasp maritime helicopters (in two batches), 16 Hawker Siddeley Buccaneer S Mk5 maritime attack aircraft and seven Avro Shackleton MR Mk3 maritime patrol aircraftxiv. The ships would cost “some” 18 million pounds Sterling over eight yearsxv.
Rear Admiral Chris Bennett wryly noted this grew to “some” 24 million pounds Sterling by the time the last Type 12 had been delivered in 1964 – despite South Africa cancelling two of the Type 15’sxvi. The Rand value of this was R24.48 million for the Type 12s – some two-thirds of the price quoted for all 20 ships in 1954/5 “and did not include items such as the first outfit of stores and ammunition” – another woeful false economy.
Equally unhelpful – and another baleful example of false economy – was the small project team dispatched to Britain, to save costs. Bennett notes: “This tendency to try to handle highly complex projects with a minimum of staff seems to be a failing of either the SA Navy or the South African psyche. Whether we believe that the tasks we take on are simpler than everyone else seems to find, or whether we simply believe we are that much better than other navies at handling projects is a matter for debate. Nonetheless we always seem to try and run our projects on a shoestring, especially as far as specialist personnel is concerned.” Other morale-sapping economies included measures to reduce the number of foreign training opportunities and the length of overseas courses to “save” on foreign allowances and above all, to restrict the number of families and family members entitled to accompany them.
Scrimping on stores and ammunition is not only a South African shortcoming. Author Jon Connell notes NATO did the same: “Like America, the Europeans have also tended to concentrate on ‘big ticket’ items (planes, ships, tanks) rather than on ‘readiness’. … They would then find, when the bills fell due, that they had wildly underestimated how large these woul be. So they would have to ‘squeeze’. How do the services ‘squeeze’? They cut down on vital things like flying and sailing hours. Training, spare parts and ammunition, all essential if you wish to be ready for war.” As a result there are drastic shortages: at the height of the Cold War, in 1986, 155mm ammunition would run out, in “some sectors … after a week or ten days. So, in about the same amount of time would nti-tank missiles and even much [of the] mortar and rifle ammunition. Air-to-air missiles are also in short supply.” NATO was also “very short of transport, especially of five-ton trucks to take ammunition and supplies to the front line during a warxvii. As a result, the Supreme Allied Commander Europe, General Bernard Rogers, believed “the Alliance would be hard pressed to last more than two weeks.”
It should be a truism that time and money spent on maintenance is never wasted. As the cost of the Border War escalated, the SAN and especially the frigates, were increasingly seen as surplus to requirement. Budgets were cut and the naval allocation in the defence budget dropped from 18% in 1977 to under 10% two years later and to 6% at its nadir. “Savings” started with spares and logistics back up, which were run down. Next, the replacing of defective equipment was deferred and necessary through-life upgrades postponed. The Navy was increasingly “forced to fall back on its holdings of emergency stores and war stocks in order to maintain some semblance of operational capability,” Bennett later wrote. This, combined with British sanctions against Apartheid, meant that for the President-class frigates a slide into a state of lower operational readiness “began as early as the 1970s whilst they were still comparatively new ships.”
The end result: “Ships of the size and cost of the Type 12 frigate should have provided a Navy such as ours with at least 30 years of good operational service, as well as a further ten years or more in a downgraded role, i.e. at least 40 years in total. Regretably this was not the case and only one managed to make it more than half this time. Their service from completion date until final decommissioning was between 17 years for President Steyn and just over 21 years for President Pretorius, whilst at the time of her loss President Kruger had been in the SA Navy for nearly 19½ years.”
Serviceability was not the only issue affecting their readiness. Parsimony and a reluctance to confront Treasury meant that the SAN had a dysfunctional personnel system during this period, leaving the sea service unable to attract, train or retain adequate crews. “Throughout the life of the … ships, the SA Navy struggled with critical shortages of trained and experienced manpower, especially in the engineering fields. … The shortfall in numbers was exacerbated … by … ‘trickle drafting’. This meant that not only did the ships continually have to cope with changing ships’ companies, it also made it extremely difficult for the men … to qualify themselves for the required watchkeeping and charge certificates. The other invidious aspect of this system was that when a man was required to attend a course he was often drafted from the ship ‘temporarily’ without replacement. When this happened the ship either accepted a downgraded capability or lobbied to prevent the move, in which case the career and morale of the individual concerned was adversely affected.”
As a consequence, it “seems incredible that we [in November 1975] sent a ship off to enter what was in reality a war zone, instructing it to be prepared to provide Naval Gunfire Support to the Army, with a guns crew who had never fired the guns at sea and a helicopter crew who appeared to be inexperienced in gunnery spotting.” Incredible is an understatement. The way to hell is paved with good intentions, the saying goes. Politicians and officials always promise they will give the military what it needs. They seldom do – and soldiers, sailors and airmen are left to carry the can.
The destruction of the Atlantic Conveyor during the 1982 Falklands War is an example of this. On May 25, Argentinian Dassault Super Etendards “spotted a large target and launched their Exocet missiles. The target was HMS Invincible. The attack was detected by the radar of its escorting ships, and, after the fleet was alerted, every naval vessel nearby fired off Corvus chaff rockets… the missiles were successfully decoyed, but then they locked on to the nearby Atlantic Conveyor [which did not carry chaff] and sank itxviii.” Twelve sailors diedxix.
i Norman Augustine, Augustine’s Laws, American Institute of Aeronautics and Astronautics, Washington DC, 1983. 6th Edition available online at Google Books at http://books.google.co.za/books?id=tbruBVgf1jIC&printsec=frontcover&dq=Norman+Augustine+laws&source=bl&ots=TBpKANC1S9&sig=hjWdylBRsom90tFE3fJCt0LkpzI&hl=en&ei=BnVzTeCPI4SHhQe_9fhA&sa=X&oi=book_result&ct=result&resnum=10&ved=0CGEQ6AEwCQ#v=onepage&q&f=false. Augustine later became CE and then chairman of Martin Marietta and later became the first CE and chairman of Lockheed Martin when it was formed in 1995.
ii Anonymous, Defence spending in a time of austerity, The chronic problem of exorbitantly expensive weapons is becoming acute, The Economist, London, August 26, 2010, online at http://www.economist.com/node/16886851; accessed March 6, 2011.
iii Jon Connell, The new Maginot line, Coronet Books, London, 1986, p74.
iv Jon Connell, The new Maginot line, Coronet Books, London, 1986, pp66-8.
vJon Connell, The new Maginot line, Coronet Books, London, 1986, pp57-8.
vi Ralph Peters, Bribing troops to quit: Blackwater vs. nat’l defense, New York Post, October 6, 2007, http://www.nypost.com/p/news/opinion/opedcolumnists/item_CN5GlJ1gVgZWPBoUw3W2sO#ixzz1GO2LtaIw, accessed March 12, 2011. Also see: Does privatisation save money?, Public Broadcasting System, June 21, 2005, http://www.pbs.org/wgbh/pages/frontline/shows/warriors/contractors/ceff.html, accessed March 12, 2011.
viiAny way one measures this, it is a shoddy way of dealing with people.
viii YFile, York in the media, Whose fault is rising cost of servicing new helicopters?, October 14, 2004, http://www.yorku.ca/yfile/archive/index.asp?Article=3445, accessed March 12, 2011.
ixDoes privatisation save money?, Public Broadcasting System, June 21, 2005, http://www.pbs.org/wgbh/pages/frontline/shows/warriors/contractors/ceff.html, accessed March 12, 2011.
x Mungo Soggott, R50-million SANDF contract questioned, Mal & Guardian, August 23, 1996, http://www.mg.co.za/article/1996-08-23-r50-million-sandf-contract-questioned, accessed March 13, 2011. Peter Honey, The battle’s just begun, Financial Mail, June 7, 2002, http://secure.financialmail.co.za/02/0607/currents/acurrent.htm, accessed March 13, 2011. Ciaran Ryan, Business touch could save taxpayer billions, Sunday Times Business Times, November 24, 1996, http://www.btimes.co.za/96/1124/trends/trends.htm, accessed March 13, 2011.
xiIvan Gryffenberg, Jean Lausberg, William Smit, Stephanus Uys (Operations Division, Defence Headquarters), Sally Botha, Rauten Hofmeyr, Ruppert Nicolay, Willie van der Merwe, Gysbert Wessels (Deloitte & Touche Consulting Group), Guns or butter: decision support for determining the size and shape of the South African National Defense Force,Institute for Operations Research and the Management Sciences, 1997, http://www.cs.york.ac.uk/ftpdir/pub/at/230_cases/14.pdf, accessed March 13, 2011.
xii Tom Clancy with General Chuck Horner (USAF) Retd., Every Man a Tiger, The Gulf War Air Campaign, , Berkley Trade, 2000, pp3-4.
xiii Helmoed-Römer Heitman, War in Angola, The final South African phase, Ashanti Publishing Limited, Gibraltar, 1990, p43.
xivAnthony Robinson (Ed), Air Power, The World’s Air Forces, Orbis, Lodon, 1980, pp274-5.
xv Rear Admiral Chris Bennett (Ret), Three Frigates – The South African Navy comes of age, 2nd Edition, Just Done Productions, Durban, 2009.
xvi Rear Admiral Chris Bennett (Ret), Three Frigates – The South African Navy comes of age, 2nd Edition, Just Done Productions, Durban, 2009.
xviiJon Connell, The new Maginot line, Coronet Books, London, 1986, pp 26, 124, 135.
xviiiKey Weapons: Electronic Warfare: The Sea War in War in Peace, Volume 9, Orbis, London, 1984, p1868.
xix “Due to the short timescales, the decision that the ship was not “a high-value unit” and a controversy over whether arming auxiliaries was legal, Atlantic Conveyor was not fitted with either an active, or passive defence system… It is often suggested that cost savings prevented the fitting of chaff rockets to Atlantic Conveyor and that this could have saved the ship. However, the size of the ship’s radar cross section (RCS) was too great to allow chaff decoys to be effective and their employment would have been unlikely to have affected the outcome.” Wikipedia, SS Atlantic, Conveyor, http://en.wikipedia.org/wiki/SS_Atlantic_Conveyor, accessed March 21, 2011. Michael Evans, Legal fears left Atlantic Conveyor defenceless, The Times, December 11, 2007, http://www.timesonline.co.uk/tol/news/uk/article3031542.ece, accessed March 21, 2011.