Issue Brief
Despite being the land of plenty – even excess – in recent years the United States has experienced an epidemic of eating disorders. One of these, Bulimia, a condition reported to have afflicted the late Princess of Wales, is characterized by alternating cycles of binging on food followed by purging. In addition to the obvious psychological effects, Bulimia can inflict tremendous damage on the sufferer’s body and metabolism.
Defense acquisition has historically suffered from a similar problem. Despite the availability of tremendous resources, acquisition programs go through repeated boom-and-bust cycles very similar in character and effect to Bulimia’s binge and purge process. Even when defense budgets are rising and resources are plentiful, the fear of the next inevitable downturn in defense spending can lead some programs to spend every dollar they get, often inefficiently.
When defense spending is cut, even well managed programs can find themselves short of funds, often resulting in reductions to planned buys, lengthened acquisition timelines and, ironically, higher overall costs. Congress’s habit in recent years of failing to pass defense budgets in a timely manner has further exacerbated the problem by forcing the Department of Defense (DoD) to take money from some programs, often very successful ones, in order to pay higher priority bills.
Curing this condition, either in its personal or bureaucratic forms, requires the creation and enforcement of regularized and predictable patterns of behavior. For defense acquisition, this means funding stability. If acquisition planners had a reasonable idea of the resources they had from year-to-year, they could create long-range acquisition plans thereby reducing inefficiency and waste and lower the costs of procurement.
One way of providing funding stability is by placing a floor under defense spending. A number of recent studies have suggested that the equivalent of approximately four percent of the Nation’s gross domestic product (GDP) would be a reasonable and sustainable base with which to ensure the maintenance of our current military capabilities.
Another way of providing stability and predictability is through multi-year procurement contracts. Such contracts commit DoD to acquire a certain number of platforms or systems over a number of years. Defense contractors can use this predictable funding base to buy materials and components at more economical rates, thereby reducing the cost to the Government.
The next Administration needs to break with the historic, dysfunctional “binge and purge” cycle in defense spending. In light of all the other financial crises that are sure to confront the new president, he would be wise to take the issue of future defense budgets off the table by establishing a stable basis for funding.
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