The US Government Accountability Office (GAO) released a report today (December 15) that noted that government contractors were reaping huge amounts – as in billions of dollars worth – of Department of Defense (DoD) incentive fee awards while completion times ran up to nearly three years behind schedule and in once instance 99.5 percent over contract cost!
The only bright side of the report noted that the Missile Defense Agency (MDA) tried to link its awards to performance (as in “you’ll get the incentive money if the damn thing can knock something down.”), but it seems like they were about the only ones.
For example: the Comanche helicopter program showed a $3.7 billion (41.2 percent) increase over its “baseline,” the Raptor F/A-22, a $10.2 (47.3 percent) billion overage, the Joint Strike Fighter (JSF) had a $10.1 billion (30.1 percent) increase, etc.
The Comanche was 33 months late, the Raptor 27 months, and the JSF "only" 11 months.
Boeing-Sikorsky got $202.5 million (or 85 percent) of the possible incentives on the Comanche (through 2004); Boeing took another $848.7 million in incentives on the Raptor, or about 91 percent of the available cash; while Lockheed Martin got all its incentive money ($494 million) for the JSF.
These are INCENTIVE payments. Not payments for the work/product/whatever.
Now, I believe in capitalism, but how about doing it MDA style: when you’re on time, and the thing works completely, you get your incentive bonus.
That’s an awful lot of cash doled out … that shouldn’t have been because it was INCENTIVE money. What was the DoD incentive? To be late and more expensive than contracted? Talk about a Merry Christmas!
It’s shit like this gives the military industrial complex a bad name. There's a lot more in the report, and I'm sure you'll see/hear all about it in the coming week. Of course, it'll be President Bush's fault some how, but ...
Remember: you read it first in LRRP’s World.
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