Why is the world’s global military procurement system in such a mess?
Probably the largest investment that any person will ever make in their lifetime will be a house. This may be a first-time buy or the need to upgrade to a bigger house due to children, aspiration or job relocation.
Let’s presume that this house will cost $750,000. For the average person that amount of money is significant, so a process to buy the house must be in place, along with a funding stream, before the torturous business of viewing the good, the bad and downright ugly can begin.
Before embarking on such a domestic procurement, most individuals, frequently in conjunction with their partners, will draw up a list of requirements that can be achieved within their budget. Some are essential and some are ‘nice to have’. Houses are then judged against these criteria – number of bedrooms, convenience of public transport and outside space being examples – prices are then compared and the deal is done. Simple.
This buying or procurement process is not particularly intellectually trying or difficult to comprehend; it’s common sense and that is why the military procurement authorities adopt exactly the same methodology when procuring military platforms, training equipment or services.
Firstly, they recognise the need to move house (let’s say procure a new aircraft to replace an older one); they then obtain a funding stream from their treasury (get their mortgage); they draw up a list of requirements that the new aircraft must possess (not number of bedrooms but you get the drift) and; finally, look at the good, the bad and the ugly.
The advantage that those who procure for the military have over the average house buyer however, is that they have a staff of hundreds or perhaps thousands to look in detail at how the aircraft meets the list of requirements (technical specification).
One then has to ask, if it’s that simple, why is the world’s global military procurement system in such a mess?
According to Business Insider, during the 2000s, the DoD spent $51.2 billion on procurement programmes that were eventually cancelled. They’re too numerous to list in full, but programmes like RAH-66 Comanche, VH-71 Presidential Helicopter, Expeditionary Fighting Vehicle and CSAR-X will be recognised by many.
In Australia, the current Hobart Class Air Warfare Destroyer is currently three years late and an estimated A$1.2 billion ($870 million) over budget.
In the US, when programmes are awarded, it has become the norm for them to be automatically contested by a losing competitor. A case in point is the US Army’s fixed-wing pilot training programme that was awarded last year, but is now dormant while the DoD addresses the protest.
According to some senior executives in the US training and simulation industry, the DoD’s adoption of its lowest price, technically acceptable policy is leading to a stifling of innovation and is still failing to prevent the filing of protests after contract award.
Another factor that specifically affects training surrounds platform data. When a country buys an aircraft for example, the manufacturer has a data package for that aircraft that is central to the design of the simulator.
If the procurement authority doesn’t ensure that the data package is included with the aircraft, it must be procured separately at high cost. It’s a bit like buying a house and wanting to take your first shower, and realising that there’s no connection to the water mains.
Despite many initiatives over the years, governments seem incapable of efficiently procuring military equipment. Delays, cost-overruns and failure to address the details seem to be the norm.
Collectively, this leads to delaying in-service dates, the creation of capability gaps and accepting equipment or training services that don’t meet the requirement. In other words, we’re now living in a shack!