The Winds of Reform

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COVER STORY

Runaway weapons costs prompt a new look at military planning

ITEM: The Army decided to build a light antitank bazooka at a cost of about $75 each. But once all the designers and program directors had finished tinkering, the weapon ended up costing $787. Even so, it would be hard pressed to knock out a modern Soviet tank. Reason: its shell cannot pierce the tank's forward armor. Congress tried to kill the project, but there is still money for it buried in the Pentagon budget.

ITEM: Allowing for inflation, the Army is spending the same amount of money ($2 billion in 1983 dollars) on new tanks as it did 30 years ago, toward the end of the Korean War. But the number of tanks produced has declined by 90%, from 6,735 to 701. In 1951, 6,300 fighter planes were funded by the military at a cost in 1983 dollars of $7 billion. The U.S. is now spending $11 billion to build only 322 planes, 95% fewer than in 1951.

ITEM: The Navy is budgeting for six new ships this year. To afford them, it is mothballing 22 older ships, many of which were recently overhauled, because it must cut operating and maintenance costs. For the same reason, it is reducing the sailing time of its ships by 10% from 1982 to 1984. With its net loss of 16 ships, the Navy would appear to be sailing full speed astern in its effort to build a 600-ship fleet.

He came blinking into the brilliant glare of the television lights, an obscure Pentagon bureaucrat suddenly brought before the eyes of two powerful committee chairmen, a dozen Senators, eight television cameras and scores of lobbyists from companies with contracts to build new weapons systems. Even though it was Friday afternoon, a time when most members have either headed home or gone out to campaign for President, the special hearing called by the Senate Armed Services Committee last week was packed. The object of interest: a young bureaucrat who had finally been freed from his drab office on the second floor of the C-ring of the Pentagon in order to present his maverick assessment of the underlying problems of defense planning and weapons procurement.

Franklin ("Chuck") Spinney, 37, a quiet but dogged Pentagon analyst, thus became the unlikely hero of an intensifying reform movement that is challenging the way the defense Establishment does business. At issue is an entire philosophy of military spending that has governed Pentagon practices for a quarter-century. At stake may be the nation's ability to defend itself for the next quarter-century.

In a flat, earnest voice, aiming his pointer at charts and graphs projected on a small screen, Spinney explained how the costs of high-technology weapons inexorably race out of control. "There is a systematic tendency to underestimate future costs," he said. "Deepseated structural problems need to be addressed." Within the building where he has worked for ten years, Spinney noted, "everybody is fighting to save their programs." His words often lapsed into Pentagon jargon, but his point was clear: "Planners become desensitized to cost growth over time."

His two-hour presentation of case studies meticulously demonstrated that a basic cost assumption made by the Pentagon—that the price of each new weapon will significantly decrease as soon as it is being produced at an efficient rate—is fundamentally

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