Sunday, March 18, 2012

The endless cost overruns

congress

If Congress focused on cost overruns more instead of trying to strip us of our rights, they might be more popular. That's especially true of Republicans who seem to think the whole world is awaiting their social counseling. Last week's finest moment in Congress was probably the Senate Armed Services Committee hearing Thursday when Ranking Member John McCain made clear to Secretary of the Navy Raymond Mabus and General James Amos that



Senator John McCain: As you know, Mr. Secretary, the reason why Senator [Jim] Webb, Senator [Carl] Levin, I and others have been concerned about the issues of Guam is because the costs have escalated dramatically. At least in one area, from six billion to sixteen billion dollars. There has been slow progress with the Japanese. So we decided after Senator Levin, Senator Webb and other of us, that we needed some outside view. An independent view of this situation. We passed the Defense Authorization Bill in December. It's now been two-and-a-half months. How long does it take to let a contract -- to get an independent assessment, Mr. Secretary?

Secretary Raymond Mabus: Senator, since this contract is not under my purview, since I don't let this contract --

Senator John McCain: I see, it's somebody else's responsibility. Well I want to tell you for sure that until we get that independent assessment there should be no concrete plans made by the Secretary of Defense or the Defense Department until we have a chance to examine the assessment and then go through the authorization process or any expenditure of funds that need to be made in order to get this redeployment issue into some kind of sanity. Believe me, we acted -- as is our responsibility -- because of our intense frustration about the lack of progress on this issue. And now, two-and-a-half months go by they haven't even let a contract to get an independent assessment by the way. And we wanted it to be completed by the first of April, the end of March, which obviously cannot happen. I'm not going to let you continue to slow walk us on this issue. Just to put things in perspective, on the F35, again, we started the program in 2001, cost estimates for a couple of thousand aircraft, 2456 aircraft were going to be $238 billion. We've now had additional costs of $150 billion. A hundred fifty additional billion dollars in cost. Block IV, as I understand it, please correct me if I'm wrong, General Amos, Block IV, 32 aircraft which are approximately fifty-percent complete are not $500 million over original estimated costs. Are those figures wrong?


General James Amos: Senator, I can't say whether the figures are wrong or not. Uhm --

Senator John McCain: Do you know what the original costs were supposed to be, General?

General James Amos: Oh, I do. I was the --

Senator John McCain: Alright, was [cross-talk] Is that fact, is that fact wrong?

General James Amos: That fact is pretty close, sir.

Senator John McCain: And there's been an additional $150 million cost overrun. Is that fact true?

General James Amos: I'm -- I'm not -- I can't comment on that. I-I don't know.

Senator John McCain: You don't even know what the cost overrun has been?

General James Amos: Well, I-I, sir, this is not a single point in time. I've noticed the program grow, I've witnessed the technical baseline review last year --

Senator John McCain: Let me interrupt you again. Do you argue the fact that there's been a $150 billion additional costs of the aircraft since the original estimate of $238 billion?

General James Amos: Sir, I can't comment on that. I cen't tell you whether it's a hundred fifty billion dollars. I know it's significant.

Senator John McCain: So, for the record, you don't know how much the cost overrun has been for the F35?

General James Amos: Not precisely.

Senator John McCain: Roughtly? [silence] Do you know roughtly what the cost overrun has been? Sir, I'm assuming since --

General James Amos: No, I don't!

Senator John McCain: That's remarkable.