Reports based on Michigan State research about massive defense spending fraud would be terrible … but they’re not true

Stop the hysteria.

A number of articles have been written lately about the Pentagon’s inability to account for $21 trillion dollars.  I found that shocking on both accounts – the inability to account and the total dollars.

So shocking, in fact, I went back and added up the total Department of Defense budget for the period in question, 1998-2015.  Then I was even more shocked.  The total budget for those 17 years was roughly $9.6 trillion. So somehow the Pentagon managed to spend more than twice what it was budgeted, nobody noticed until now and we can’t account for any of it?

C’mon man.

I left active duty at the end of 2009.  I can probably find all my old pay stubs and we can account for at least my little sliver of the missing trillions. So, we can scratch that off the list.  I also had key leadership positions during all 17 of those years and I can verify that we closed our budgets within a few thousand dollars for every unit for which I had responsibility.  That’s probably a few billion more we can scratch off.

Turns out, much of the hysteria was created from an economist at Michigan State University, who conducted this vital research.  MSU trumpets his accomplishments on their website.  They speak to the “gargantuan nature” of this discovery, warning this “should be a great concern to all taxpayers.”

Of greater concern should be whether MSU has a math department.

Of even greater concern should be whether MSU has a math department.  Or an accounting department.

Turns out the real story here is the Department of Defense (and Housing and Urban Development, also implicated in the research) doesn’t have IT systems that talk to each other and the issue is more a technical one of unsupported accounting documentation.  Which Defense acknowledges needs to be fixed. But unsupported journal voucher entries aren’t very sexy stuff for today’s news cycle.

Does the Pentagon have waste?  Absolutely.  Do they have missing funds and programs that overrun their budgets?  Undoubtedly.  Can they do better?  Of course.

In my view, the Pentagon spends way too much money through outdated acquisition and contracting processes.  This is how you get outrageous $10,000 toilet covers and $24 million refrigerator upgrades.

Since World War II there have been more than 130 studies on Pentagon acquisition forms.

Since World War II there have been more than 130 studies on Pentagon acquisition reform.  The Federal Acquisition Regulations, including Department of Defense Acquisition Regulations are thousands of pages long and frequently contradict each other.  The system is unwieldy at best.  Our government tends to add more rules, not fewer, when it comes to “reform.”   House Armed Services Ccommittee Chairman Mac Thornberry’s most recent attempt for acquisition reform was met with stiff opposition from House Democrats, who suddenly have seen the light regarding excessive bureaucracy and auditing.

Oh, don’t forget that acquisition reform would have a major impact on key American institutions.  That’s right, the defense industry.

In the early 90s I was the Air Force’s chief of requirements for the F-16 program.  I spoke for the “user” and articulated the requirements for the software and technologies we needed to keep our fighters dominant in the wars to come.  I worked closely with our defense contractors to develop and integrate the technologies we needed to sustain our combat edge.  That part was easy – I defined a requirement and the engineers figured out how to make it a reality.  It was simple.

Then the lawyers and contractors stepped in. Program costs typically tripled or quadrupled and time horizons stretched out well into the future.

Then the lawyers and contractors stepped in.  Program costs typically tripled or quadrupled and time horizons stretched out well into the future.

I learned the hard way that a “perfect” acquisition program took seven years from concept to product.  Our brand-new front-line fighter comes off the factory floor today with late 1990s technology, for example.  Are you still using your cell phone from 1999?

Why is there no appetite for defense acquisition reform?  There always is, just not in my congressional district.

Is there fraud and waste happening throughout Defense every day?  Of course there is.  Should we do something about it?  Absolutely.  Did we misplace $11 trillion dollars?  Um, I don’t think so.

And don’t even get me started on the cost of fighting forever wars … I’ll tackle that in the future.