The US Air Force does not want to reproduce the mistakes of the F-35 program with the NGAD program

NGAD next gen air dominance USAF e1619537002509

According to US Air Force Secretary Frank Kendall, it is essential to avoid, with the NGAD program, the same mistakes that handicapped the F-35 program. But that could be much more difficult to say than to say, with regard to the organization of the defense industry across the Atlantic.

In an interview given to CBS news, the former chief negotiator of the Pentagon's armaments programs and former vice-president of Raytheon, Shay Assad, draws up a vitriolic observation of the invoicing practices applied by the giants of the American defense industry.

According to him, following the industrial reorganization of 1993 which made it possible to merge the fifty major companies of the American Industrial and Technological Base of Defense or BITD, into five large groups which today prove to be the five largest global companies in this field (in the order Lockheed-Martin, Raytheon, Boeing, Northrop Grumman and General Dynamics), the Pentagon has created a monopoly situation for each of the equipment produced, leading to an explosion in the prices charged by these companies.

Thus, according to Shay Assad, in 1990, a Stinger missile cost the US Army $25.000, while Raytheon now charges $400.000 per missile. Even taking into account inflation and technological advancements between missile versions, the price increased 7 times.

Another example cited by the man who now calls himself "the worst enemy of the US defense industry", an oil distributor, bought until recently by NASA at $ 378 per unit, is sold to the Pentagon for $10.000 by its manufacturer.

As for the Patriot missile in the news, it saw its price increase to such an extent that according to Shay Assad, the US Army should have received the equivalent of a year of missile production to simply compensate for the discrepancies unjustified prices charged by Raytheon.

stinger ukraine
The Stinger missiles sent by the US Army to Ukraine had cost it $25k in 1990. They have been replaced by missiles of the same type which are now billed at $400k per unit

The reasons for these derivatives are numerous, in particular the pressure linked to the management of the stock market leading companies to aim for results and a spectacular redistribution. Thus, according to Mr. Assad, the margins contractually negotiated between the state and the defense industry are between 10 and 12% of the budgetary envelope, but frequently reach, in fact, 40% of this envelope.

Another reason is none other than the strong position of manufacturers conferred by the monopolies created by the reorganization of 1993, but also by a certain abandonment of the supervision of contracts and their negotiations, the Pentagon having halved the number of personnel dedicated to this in 2 years. In fact, some manufacturers have even made a specialty of detecting companies holding a monopoly on certain equipment, including spare parts, to buy them back and make huge profits by increasing prices.

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