Solutions to Skyrocketing Missile-Defense Costs May be Ahead

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Another legislative debate over the National Defense Authorization Act (NDAA) is drawing to a close, and with it several spectacles that will endure in taxpayers’ minds. Lowlights from his year’s legislative process included attempts to force the Pentagon to buy U.S.-made spoons and saucers as well as discard one of the last spending-limit enforcement mechanisms left from the Budget Control Act of 2011. As the focus now shifts to the second part of the Pentagon spending process – appropriations – National Taxpayers Union is already keeping a watchful eye on dozens of threats as well as opportunities for taxpayers.

The annual dance over defense appropriations has been part of our mission since our founding nearly 50 years ago. Not only is the profligacy greater at the Pentagon than most agencies, it has proven more difficult to restrain. From personnel to infrastructure to individual programs, we have made numerous recommendations to protect taxpayers as well as honor our commitment to service people.

Defeating airborne threats has become a particularly expensive proposition that taxpayers know all too well. The perennially challenged MEADS system, the less-than-effective Ground-Based Midcourse Defense (GMD) scheme, the technologically immature Standard Missile Block II-B, and the long-over-budget SBIRS missile warning satellite are just four cases NTU has followed over the years. Virtually all of them have in common one aim, whatever their fiscal details: to serve as the so-called “Golden BB” that can finally shoot down aircraft and missiles using high-performance technologies. None have lived up to the hype.

It is with this interest in mind that NTU was recently encouraged to learn that an evolving air and missile defense program under the Army just might, with proper management, be able to break this cycle. Known as the Army’s Integrated Air and Missile Defense (AIAMD), this initiative is not about designing a new “Golden BB.” It’s about giving the BBs we’re already fielding a better chance at being “golden” by giving everyone in the battle space a clear sight picture, integrating their aim, getting the shooters to talk to each other, and using shots more wisely.

The concept of “combined arms” has, in various forms, existed since the beginning of warfare itself. Ensuring that diverse weapons and the people trained to operate them is a true force multiplier that allows a cooperative whole to function far more effectively than the sum of its parts. In modern times, hardware such as sensors and data processors must also be integrated into that whole. Unglamorous programs such as AWACs and JSTARs, operating ancient aircraft stuffed with ultra-modern electronics, have given the United States a massive edge in this vital task of battlefield command and control. AIAMD, a massive leap beyond these systems, could fuel the next evolution of combined arms.

The military is adept at serving up an alphabet soup of acronyms, but as the Army tries to explain it AIAMD’s recipe consists of three basic parts:

The IAMD Battle Command System (IBCS) that provides the common mission command capability; the Integrated Fire Control (IFC) Network capability to provide fire control connectivity and enabling distributed operations; and the Common Plug and Fight (P&F) Interface Kits that will network-enable multiple sensor and weapon components.

These components are designed to provide a “combined arms” network for missiles, guns, radars, sensors, and other elements to coordinate air defense over the long-term, while allowing new, not-yet-designed weapons speaking different languages to be understood by others in the network.

We at NTU are no experts at military doctrine or missile-defense technology, but we have seen our share of failed Pentagon programs and the flawed thinking that went behind them. Some common elements (also evident at agencies like the IRS) are poor oversight of the contractors, unrealistic expectations, lack of competition, ambiguous and/or changing program requirements, an inability to differentiate between prudent contract procedures and red tape, compartmentalized programs that can’t integrate, and an unwillingness to quickly correct course when a program is failing.

After decades of falling behind the curve with troubled projects that are over-budget and behind schedule, the Pentagon is showing signs here and there of a shift in attitude that will better serve the twin national security priorities of effective defense and fiscal responsibility. One example NTU recently highlighted is the Joint Enterprise Defense Infrastructure (JEDI) Project, which utilizes a new, flexible contracting approach to housing the Pentagon’s data in the cloud that stresses streamlined development without long-term risks to taxpayers.

Making “here and there” more commonplace is an aim that many taxpayer advocates share, and a July 25 open letter to Congress from six organizations “concerned about rising spending and debt” is an appropriate sign of support for this shift. In the letter, the signatories – Coalition to Reduce Spending, Center for Freedom and Prosperity, FreedomWorks, NTU, Taxpayers for Common Sense, and Taxpayers Protection Alliance – called on lawmakers to support three principles during the FY 19 DoD Appropriations process. In each of these three, AIAMD could very well prove instructive for other procurement initiatives.

  • Support Adaptable Programs – “Taxpayers deserve the best possible value from Defense Department IT contracts, which should stress to the greatest degree possible open competition, architecture flexibility and reprogramming ability, and capacity for future innovation.” Adaptability is AIAMD’s basic trait, because it is designed as an open-architecture system. That means future upgrades can avoid lengthy, tortuous attempts to reintegrate propriety systems from multiple sources. The Common Plug and Fight Interface kits are designed to handle virtually any combination of air or missile defense systems on the drawing board.


  • Pursue Clear Strategy on the Front End – “Too often, programs fall behind schedule and experience cost overruns based on ambiguous, vaguely stated and changing requirements during the development phase.” The Air Force’s ordeal over the Twin Huey helicopter replacement, beset by lack of competition and shifting design requirements, is but one example where NTU encountered such problems. AIAMD nearly fell victim to this unfortunate tendency of the traditional procurement process, but came out the other end stronger. The Army itself decided to expand the capacity of the IBCS component to more types of defensive weapons, such as the new Indirect Fire Protection Capability launcher, right before a development “milestone” decision to proceed with production was about to be made. The result, predictably, was a projected four-year pushback of initial operational capability of IBCS. Yet, one silver lining for the Army (and for taxpayers) is that IBCS can integrate the most recent, upgraded version of the Patriot ground-to-air missile system upfront. Other technologies not thought to be adaptable to AIAMD, such as the Sentinel early warning radar, are proving to be capable of doing so.


  • Prioritize Long-Term Costs and Savings – “All new acquisitions [should] account both for immediate and sustainment costs as well as emerging costs as systems age out and need to be replaced.” This is the inspiration behind AIAMD and its subsystems, which allow new weapons and sensors to be swapped out for old ones on various schedules and according to various needs, while assuring that the whole network can still communicate and fight effectively. Sustainment costs and the often-overlooked expense of training both become cheaper because the hardware and software governing this network is all common. Perhaps most important, future cost-containment is much more feasible with AIAMD’s open architecture, which allows systems to work together without expensive workarounds from legacy contractors.

Putting a given program into a comparative perspective with others is never easy - the type of system, projected operational lifespan, changing requirements from the government, and differences over how to categorize certain costs are just a few reasons why taxpayers seeking bottom-line answers to the price tags for weapons systems are often frustrated. An annual analysis of programs from the Center for Strategic and Budgetary Assessments (CSBA) has a high-end estimate for AIAMD's research, development, testing, and procurement at about $7.5 billion from program inception (2006) to final unit buys (2030) in then-year dollars. Other published cost projections are lower, and could prove more accurate considering that foreign buyers (see below) may pay for a bigger part of the budgetary pie. The same CSBA report put a roughly comparable cost for the Ballistic Missile Defense System (which includes many but not all of the layers involved in missile defense) at about $165 billion. Using different methodologies, other sources have tallied up price tags for programs in various phases such as GMD (at least $40 billion), SBIRS ($19.2 billion), and MEADS (with over $2 billion wasted before the U.S. withdrew as a participant). All these caveats aside, if AIAMD's cost course holds, and it will take disciplined management to do so, the program could deliver a far better return on investment of tax dollars than many other schemes involving air and missile defense.

AIAMD has certainly not been problem-free. In 2016, Pentagon evaluators found that the IBCS was so unstable that it crashed every six to eight hours of operation – not exactly reassuring to the soldiers whose lives would depend on a dependably-functioning network.

It is also true that high-tech programs like AIAMD increasingly demand a new, more nimble paradigm for testing and evaluation. To borrow an analogy from the retro-gaming world, testing a new, conventional weapons system such as a rocket motor works somewhat like a game of Mousetrap. The parts are gradually put together in a specified order, and at the final roll of the dice, the whole structure is set into motion and the players await the results. But testing a system of systems like AIAMD more closely resembles the process of solving a Rubik’s cube. Numerous combinations, punctuated by back-and-forth adjustments from the player, are required before a perfectly-matched puzzle is assembled.

To an outside observer, Mousetrap might appear methodical, while Rubik’s Cube would seem chaotic. Yet, both approaches can lead to desirable outcomes if the object is properly understood and the appropriate process is followed. As Baker Spring, who formerly analyzed defense issues for the Heritage Foundation, neatly summarized: “Current acquisition rules do not fit well with a program like AIAMD at two levels. At the first level, the rules force the adoption of a management plan that is poorly suited to the program’s purposes and goals. At the second level, those rules can, and often do, lead to misleading negative assessments about a program being mismanaged.”

Thus, AIAMD needed a commitment to stewardship on the Army’s part in order to sufficiently prove the concept, and a turnaround looks to be underway. Intercepts involving two types of U.S. missiles using two different radars on two targets have been completed successfully, and rigorous checkouts under realistic field conditions have shown major reliability improvements. Poland is already buying the IBCS component for integrating its own weapons into a friendly, open architecture, at the same time helping to cover some of the development costs of AIAMD. This is the kind of commitment from U.S. allies that President Trump, an ardent (to say the least) proponent of burden sharing, would laud.  

Despite some artificial barriers to progress that often occur with transformational projects that disrupt legacy contracting methods, AIAMD is demonstrating some considerable gains (see above).

All of this is cause for optimism, provided Congress and the Army stay the course. Indeed, parts of AIAMD could be fielded now, providing especially important capabilities in the Pacific region. In May, Army Secretary Mark Esper told a gathering of defense-policy wonks that “If you can bring technology to the field, to the force a lot quicker, you save money. If you… put much more emphasis on prototyping and leveraging current technologies and not developing blue sky, white chart types of things, you save money.” JEDI, AIAMD, and other programs NTU will soon analyze, may be key to putting this theory into practice. And if it works, taxpayers will be the first to celebrate.