The Washington Post can be credited for bringing this ridiculous management fiasco to my attention: $6 Billion Lockheed Deal For Spy Plane in Jeopardy. Reading the story reveals that it’s an even more amazing situation: “The Army ordered Lockheed Martin Corp. to stop work on a $6 billion manned spy plane program yesterday after determining that the company’s proposal would not meet the project’s requirements.”
What I’m still trying to figure out is how did the contract ever get awarded and Lockheed start working on the project if their proposal didn’t meet the project requirements in the first place?
Let’s try to clarify the situation by drawing a simple parallel: you’ve asked a carpet company to bid on installing new carpet throughout your office, they’ve submitted a bid that doesn’t actually match your specifications, but to which you, for no obvious reason, say “Looks good! Why don’t you get started?” A few days later your partner says “Hey! We wanted blue carpet and they’re installing green! Didn’t you actually check the darn bid before giving them the go-ahead?”
Seems unlikely, doesn’t it? But for this $6 billion spy plane project it’s not unlikely at all, in fact, it’s criminal idiocy, it’s hundreds of millions of of our tax dollars being grossly mismanaged in exactly this fashion.
Didn’t anyone at the Army actually check the proposal against the project specifications to ensure that it matched before telling Lockheed to get started? Or has it come down to a situation where Lockheed and similar aerospace companies are so confident in their bids that they just green light the project simultaneous to submitting the bid?
To find out more, I decided to spend some time digging into this story. The Post reports that the project is called the “Aerial Common Sensor”, so I Googled the phrase. Seconds later I was reading about the Aerial Common Sensor [ACS] on the Federation of American Scientists Web site. My question: Was the contract actually ever approved by the Army, or was Lockheed working on the project without formal approval?
A bit more digging and I found that Morningstar quoted Dow Jones News Service on an article entitled Lockheed Hasn’t Been Paid $7 Million on Troubled Spy-Plane Work, wherein the article states: “Lockheed Martin won an $879 million contract last year to develop the Aerial Common Sensor, a new spy plane sought by the Army and the Navy. The program is now at risk of cancelation after encountering weight, cooling and other aircraft problems.”
So this is clearly an evolving fiasco, where the contract was awarded to Lockheed, but that in addition to the issue of aircraft size (as reported by the Post) there are also problems with weight and cooling. More importantly, given the latest Post reporting, it’s baffling – and, yes, maddening – to learn that the initial Lockheed proposal was approved by the Army even though it didn’t meet the requirements of the project.
As a taxpayer I’m not pleased to read “If the Pentagon ends the program for reasons other than poor performance, Lockheed could receive a hefty termination fee” and to realize that if the Army incorrectly gave a green light to Lockheed, that it probably isn’t considered “poor performance” on the part of the contractor and Lockheed could get an estimated $50 million termination fee, according to sources. Is this the military’s version of a golden parachute?
I’m just aghast at this story because as a working professional, I never tell someone to go ahead until we agree that what they’ll deliver meets my specs and requirements, and I’d never proceed with client work until I have a contract in hand and am confident that my deliverables are an exact match for their requirements. I bet you’re the same.
How can Lockheed and the Army get away with this sort of dismal mismanagement? We’re not just talking about a few million dollars, either, we’re talking about a $6 billion dollar project, $6 billion that could, for example, go a long way to restoring the damage from Hurricane Katrina. Heck, the $50 million cancellation fee – if that actually happens – could by itself be a big help!
With stories like this happening under our noses, it’s very hard not to become completely cynical about government incompetence and military mismanagement of billion dollar budgets, to say the least.