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Dissecting a $231 Million High-Tech Boondoggle
The L.A. Times takes to task the U.S. Congress, the Obama administration, and various military agencies for their combined role in supporting the expenditure of vast amount of money on a system called the Precision Tracking Space System. All told, according to the paper, the PTSS program -- which was to have provided early warning of missile launches, and precision tracking of the missiles themselves -- ended up blowing through more than $230 million before being cancelled. After talking to defense experts and reviewing hundreds of documents, the Times comes to what probably sounds like an easy conclusion for any big-budget military program that never reaches operation: it shouldn't have even left the drawing board.
Hell, the general US public just spent that much money in four days to go watch a movie.
While there may be some argument that perhaps that money could have been spent elsewhere, complaining over this one small amount of cash is a bit silly. Now, if we talk about a systemic problem - for instance, what percentage of projects like this get cancelled? - that is going to be much more productive.
$230M is something like, what, the salary of 1500 well-paid engineers and managers? Split across 5 years, that's only 300 people, which is a mid-size engineering company. Even if you figure that 10% of that went to line someone's pockets, the rest to actual employees of companies, I'd tend to agree with this - $230M is chump change, and probably actually kept some people employed. And it's not even like it was a lot of people (you might be able to change the number by a factor of 2 or 3 if you are paying median or low-end salaries). So it's not like there is much direct money spent on "political influence" here.
"There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)
I blame Bill Clinton for repealing the Glass-Seagall Act, which turned boring old banks into high octane casinos. But Wall Street is ultimately responsible for pushing the repeal and gaming the system.
Yeah, that wasn't one of Slick Willy's brightest moves. Prob is, he signed off on it to get other shit done and didn't think about the repercussions.
Understanding the scope of the problem is the first step on the path to true panic.
Actually the program was created in 2008/2009, while the Democrats controlled everything- the House, Senate, and White House. Additional funding was added later by the Democrat-controlled Senate while Republicans argued against it.
http://graphics.latimes.com/mi...
Blame all you want, but how putting it where it belongs..... the *Republican* majority in both the House AND Senate that introduced the Financial Services Modernization Act of 1999 (aka the Gramm-Leach-Bliley Act (GLBA)).. those names, btw, in case your memory is as fuzzy as it appears to be, belong to:
o Senator Phil Gramm, Republican (Texas)
o Representative Jim Leach, Republican (Iowa)
o Representative Thomas J Bliley Jr, Republican (Virginia) - Chair of the House Commerce Committee
This legislation, btw, was bought and paid for by the likes of Citibank and Travelers Insurance (who needed it in order to keep its merger into CitiGroup intact), Wells Fargo, American Express, and other large financial services companies with big vertical reach and/or designs on mergers of their own.
The negotiated compromise bill produced by a House-Senate joint committee had as much as Democrats could get out of the Republican majority. Clinton only signed it because the lawmakers were in the pockets of the big business interests that wanted -- that needed -- the bill to pass and it was veto-proof.
TL;DR: it wasn't Clinton's fault, moron.
And used. New wrenches can be much for expensive, particularly if they are made in America.
Also let me illustrate government contracting, yes all the RFQs are posted online. But it isn't like you can bid on it, they typically require so much paperwork that companies that don't normally deal with government contracts either balk at it, or screw something up and their bid is not considered.
More often than not government contracting goes through a handful of distributors who not only know all the paperwork, but are often owned by people that can check off the right boxes on the minority statements.
So even though the government gets a quantity discount, often with all the overhead and additional testing the government requires (like getting a certification from an independent lab or doing NDI on every item delivered) even with a quantity discount it might still be more expensive then buying it at retail.
A good example of this is GE engines, they make the F108 that is used on the KC-135, other than a different name plate it is almost identical to the CFM56s they deliver to civilian customers. The F108s typically cost almost 10% more than the CFM56, and doesn't include the warranty that they give to civilian customers. That is because the USAF slows the line down for inspections and testing, and paperwork lots and lots of paperwork. Thus it costs the USAF 10% more than if they just bought them COTS.
Another good example of the paperwork is that the Lockheed is required to keep all the paperwork from the F-16 program, there is so much paperwork from that program that it has it's own warehouse. Some of that paperwork is almost 50 years old, and Lockheed will probably have to keep it safely stored until the very last F-16 is retired.
Government in it's attempt to control fraud, and waste has ironically caused wasteful increases in costs to prevent the waste and fraud.