Forum Post: Why are defense contractors allowed to get away with incompetence?

The F-35 program is in the doldrums. Operational capabilities are not expected to be fully realized until late in the decade (if that). Partner nations are scaling back orders and even those deliveries will be delayed.

Latest tests on the F-35 revealed more 'small' problems which will need to be corrected retroactively on the LRIP models and will necessitate fixes for the future final production model.

This is a multi branch program with variants for the Airforce, Navy and the Marines. Prime contractor Lockheed Martin is being allowed to get away with raising the program cost by over 50% of envisioned budget (this number is only set to increase). Despite this, the current generation test aircraft does not meet all of its set performance objectives.

The Navys Littoral Combat ship program has gone much the same way as the F-35, albeit with less publicity. Again, the LCS was designed with the objective of replacing several existing classes of warships by means of modular design of a single hull. Swapping out modules would allow the same hull design to be capable of different missions and would allow for significant multi-role capabilities.

Problems were found with its combat system, stability. Crew training time and maintenance estimates were found to have been unrealistically low. Cost overruns led to the Navy actually cancelling the first tender (not before spending billions of dollars) and having a second round of bidding.

That said, the LCS is progressing rather more smoothly, but that is because a ship is much easier to work with than an aircraft. Its not about to sink at the drop of a hat or because its pilot does not get oxygen.

But the key is that the program (like the F-35) is behind schedule, over budget and has not delivered on its promises. Not something we as a capitalist nation should appreciate.

Aviationweek also reports that defense contractors margins on their products have risen to the 12-16% range at a time when budgets are being squeezed. For some perspective, they used to be around about 8%. Now that might not sound like much but when its a percentage of billions, it gets to be really big really fast.

I am not saying these programs are not vital to national security, they ARE... and this is why contractors are able to hold us hostage... because they know that we cant do without these programs... and once these programs are initiated, switching contractors is nigh impossible...

But my question to the govt is simple. Why do we reward these contractors for their incompetence? Why dont we force them to pay for the cost overruns themselves? Why dont we penalize them for program delays? Did you know that Lockeed had the nerve to ask the US govt to compensate them for the data they lost to a hack attack?

In some ways it is worse than the Wall Street bankers. I mean... the bosses of these companies are responsible for developing and delivering products which protect our fighting men and women, and as a consequence, protect us. Quite literally, there are lives at stake.