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 this could be much more difficult to do than to say, given the organization of the defense industry across the Atlantic.
In an interview given to CBS News , the former chief negotiator of the Pentagon's weapons programs and former vice-president of Raytheon, Shay Assad, draws up a vitriolic observation of the invoicing practices applied by the giants of the manufacturing industry. American defense.
According to him, following the industrial reorganization of 1993 which made it possible to merge the fifty major companies of the American Defense Industrial and Technological Base or BITD, into five large groups which today turn out to be the five largest global companies in this field (in 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 accounting for inflation and technological advancements between missile versions, the price has increased 7 times.
Another example cited by the man who now describes himself as "the worst enemy of the US defense industry", an oil distributor, recently purchased by NASA at $378 per unit, is sold to the Pentagon for $10,000 by its manufacturer.
As for the Patriot missile in the headlines, its price has increased to such an extent that according to Shay Assad, the US Army should have received the equivalent of a year's worth of missile production to simply compensate for the differences. of unjustified prices charged by Raytheon.
The reasons for these derivatives are numerous, notably the pressure linked to controlling the stock price leading companies to aim for results and spectacular redistribution. Thus, according to M Assad, the margins contractually negotiated between the state and defense manufacturers are between 10 and 12% of the budget envelope, but frequently reach, in practice, 40% of this envelope.
Another reason is none other than the strong position of industrialists conferred by the monopolies created by the 1993 reorganization, 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 over 30 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 to make immense profits by increasing prices.
If Shay Assad does not have, one suspects, particularly good press at the Pentagon, especially since the US defense industry has become over the years the outlet of choice for general officers at the end of their careers, precisely those who walk the corridors of the American General Staff, his observation is no less, it could not be more relevant and argued.
And the latest statement from Franck Kendall, the American Secretary of the Air Force, tends to prove him right. For the minister, in fact, it is out of the question to reproduce in the NGAD program which aims to design the replacement for the F-22 by 2030, the same errors as those which today handicap the F-35 program , referring to the extraordinary position of strength given to Lockheed-Martin by contractual means around this program.
Indeed, when awarding the Joint Strike Fighter program to Lockheed-Martin, the Pentagon agreed to give the manufacturer full and exclusive rights to all the data produced by the device, to United States as for export, as well as on the device over its entire lifespan.
It is therefore impossible for the US Air Force to entrust data from the F-35 to another manufacturer to, for example, develop new equipment, or even a new device, without first going through Lockheed-Martin which, well, obviously, will do everything possible to obtain said contract.
As Franck Kendall recognizes, the contractual framework of the F-35 program obliges the US Air Force, but also the US Navy and the US Marines Corps, as well as all the air forces using the aircraft, to pass it. by the industrialist for everything concerning the device and its operation, constitutes a serious handicap for the US armed forces and their industrial negotiation capacities.
If the US Air Force remains convinced, within the framework of the NGAD, that it is necessary to rely on a single manufacturer for the design and manufacture of the 200 aircraft which will be ordered, Franck Kendall clarified that in no way case, this time, the data generated by the device and the entire system of systems will not belong to the manufacturer.
On the other hand, within the framework of the collaborative combat aircraft (CCA) program which must design and build the drones which will accompany the NGAD and the F-35A in the years to come, Frank Kendall indicates that several manufacturers could be solicited jointly, suggesting that this would reorganize healthier competition and therefore better commercial practices for the Pentagon and the US Air Force.
It is interesting to note that these abuses did not emerge recently. While he held the position of Assistant Secretary for Acquisitions and Technological Developments of the US Air Force, Doctor Will Roper had already highlighted the constraints imposed on the US Air Force budget by the industrial organization applied in particular to the F-35 program, going so far as to declare, in July 2020, that major programs like the F-35 were today a long-term threat to the future of the American military aeronautical industry , but also to the military power of the United States on the international stage.
For the project management specialist that he is, it was essential to return to a decentralized and competitive Defense Industry, and the best way to achieve this was to abandon large standardized programs to develop programs in small series of devices specialized combat units, so as to fundamentally reorganize the Defense Industry and its practices.
The comparison of the equipment and maintenance expenditure of the US armies with the Western armies which can rely on a national Defense Industry, shows that there is on average a factor of two applying to the US armies, and by transitivity, to numerous Western armies equipping themselves in Washington.
For example, a Virginia class submarine is purchased for twice the price of a British Astute, and more than 2.5 times more than the French Suffren, without its performance justifying such a price difference. .
If we compare it to a Russian Iassen, the price ratio is greater than 3.5, as is the case between a Su-35 acquired by the Russian Air Force and an F-15EX acquired by the US Air Force, while an Abrams costs no less than 6 times the price of a T-90M, and a Constellation frigate will cost twice the price of a Chinese Type 052D destroyer.
Neither the differences in labor costs nor the differences in performance justify such differences which also apply to the costs of maintenance and development of equipment, this clearly severely handicapping the American effort to modernize its armies. faced with the return of strategic competition with Russia and China.
In any case, it is unlikely that the United States will be able to effectively address the Chinese/Russian challenge without going through a major reorganization of its defense industry and commercial practices.
Because unlike the previous three decades, the United States must now face efficient adversaries in this area, and more particularly China which has been able to effectively organize and structure its own industrial and technological defense capabilities, precisely to mass produce and with controlled costs and efficient equipment.
While the Chinese economy will gradually come to tangent with the American economy, and Beijing will very probably extend its network of alliances around the world, the practices of the US Defense Industry constitute today, in many respects , the biggest weak point of a Western camp accustomed to being fed by Washington in this area.[armelse]
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