Military Contractors

I watched the “60 Minutes” segment on Sunday night. Nothing surprising. Even the “better contractors,” not just the bottom-feeder, eat from an overflowing trough.
 
The amount of waste baked into all aspects of our government and democratic process is mind boggling. Where do you start??
 
As with many things, it becomes far more complex when you look beneath the surface and its the things that are way below the surface that don't get looked at which should be the real headlines. I don't know the details on the issues with the Patriot missile buy or for that matter with the current F-35 mention but for things like these, there are generally a very different side to the story which is left untold in articles like this. As a oft-competitor and sometimes teammate, it was often my job to look for this sort of dirt as part of our due-diligence and in general, folks like Lockheed Martin, Raytheon, GD, Boeing, and Grumman just about always have pretty solid legal reasons for doing what they're doing. When there are significant price increases, there are usually major design and/or other significant changes that are conveniently omitted from the media's stories but are tremendously expensive and not optional to the contractor.

I won't got into it now but if asked I could give a pretty detailed look at a big reason why the F35 costs grew so much and it is not due to the contractor(s) or to the DoD but instead due to Congress.

Now, there are third tier contractors like Transdigm and one that I was with for a couple of years that are much different and really deserve the criticism. Transdigm specializes in buying small companies whose widgets are flight qualified on specific airframes. A company that i interviewed with at one point that became part of Transdigm is the only company making some specific actuators for a very common DoD airframe. This aircraft was built and fully tested with this particular actuator and changing to a different item would cost a ton of money and require years of testing. Thus, they end up with a sort of monopoly and they DO use it to be very profitable. A similar situation exists with bathroom equipment for the 737 (seriously). That otherwise mundane stuff has to be flight certified on THAT airframe and having a sole source position on it can be (and is) very lucrative.
 
OldRetSWO said:
As with many things, it becomes far more complex when you look beneath the surface and its the things that are way below the surface that don't get looked at which should be the real headlines. I don't know the details on the issues with the Patriot missile buy or for that matter with the current F-35 mention but for things like these, there are generally a very different side to the story which is left untold in articles like this. As a oft-competitor and sometimes teammate, it was often my job to look for this sort of dirt as part of our due-diligence and in general, folks like Lockheed Martin, Raytheon, GD, Boeing, and Grumman just about always have pretty solid legal reasons for doing what they're doing. When there are significant price increases, there are usually major design and/or other significant changes that are conveniently omitted from the media's stories but are tremendously expensive and not optional to the contractor.

I won't got into it now but if asked I could give a pretty detailed look at a big reason why the F35 costs grew so much and it is not due to the contractor(s) or to the DoD but instead due to Congress.

Now, there are third tier contractors like Transdigm and one that I was with for a couple of years that are much different and really deserve the criticism. Transdigm specializes in buying small companies whose widgets are flight qualified on specific airframes. A company that i interviewed with at one point that became part of Transdigm is the only company making some specific actuators for a very common DoD airframe. This aircraft was built and fully tested with this particular actuator and changing to a different item would cost a ton of money and require years of testing. Thus, they end up with a sort of monopoly and they DO use it to be very profitable. A similar situation exists with bathroom equipment for the 737 (seriously). That otherwise mundane stuff has to be flight certified on THAT airframe and having a sole source position on it can be (and is) very lucrative.
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All excellent points. The acquisitions and contracting process is complex and massive. One tiny change requested by the govt in the contract, after execution starts, and the cost ratchets up. Sometimes companies lose heavily on these deals as well.
 
I remember an example of military “requirements” resulting in an inferior product at a higher cost.
When the UH-60 Doppler navigation was upgraded to GPS the Army wanted it to have 100 (I think that was the number), user programmable waypoints. The GPS unit as was actually had more than that- I think 500. But the Army wanted 100. The manufacturer told the Army it would cost more to reduce the number of waypoints. No matter- the specs called for 100, so that’s what the Army wanted and that’s what they got. At a higher cost.
Flash forward several years and the Army realized they needed more user waypoints in the GPS. So… wait for it… they paid more money for the manufacturer to modify the GPS units back to the original configuration.
Also, in spite of GPS units on the civilian side moving towards IFR (instrument flight rules) navigation capability the Army got VFR (visual flight rules). Later they paid more to upgrade them to IFR.
This whole thing was probably chump change but it adds up.
 
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