Making Money the Old Fashioned Way

Rather depressing report in the Washington Post on how the Pentagon is managing yours and my money. If this were in the private sector there would be a major purge of project management and executive sponsors. Project management and project cost control is not easy but it is not impossible either. This is absolutely absurd.

The Government Accountability Office found that 95 major systems have exceeded their original budgets by a total of $295 billion, bringing their total cost to $1.6 trillion, and are delivered almost two years late on average. In addition, none of the systems that the GAO looked at had met all of the standards for best management practices during their development stages.

If you dig a bit you can see some of the details behind this horrid excuse for management.

GAO found that 63 percent of the programs had changed requirements once system development began, and also experienced significant program cost increases....[R]oughly half the programs that provided GAO data experienced more than a 25 percent increase in the expected lines of software code since starting their respective system development programs.

In spite of the insanity it is not getting any better...

The Pentagon has doubled the amount it has committed to new systems, from $790 billion in 2000 to $1.6 trillion last year, according to the 205-page GAO report. Total acquisition costs in 2007 for major defense programs increased 26 percent from first estimates. In 2000, 75 programs had cost increases totaling 6 percent. Development costs in 2007 for the systems rose 40 percent from initial projections, compared with 27 percent in 2000. Current programs are delivered 21 months late on average, five months later than in 2000.

Here is an example of the mess they are making...

The report details such projects as the Navy's $5.2 billion Littoral Combat Ship, which has had such extensive troubles that the service expects the cost of its first two ships to exceed their combined budget of $472 million by more than 100 percent. The Navy canceled construction of the planned third and fourth ships by Lockheed Martin and General Dynamics, the prime contractors on the project.

A 25% increase in the amount of code required seems a bit over the top to me but I don't develop weapons systems. The thing about delivering so far behind schedule is that by the time you are rolling to production the technology is 2 years or more ahead of you.

Then again the Boeings, Lockheed Martins, and General Dynamics people must be pretty happy with the way things are going.

I strongly advise you forget you read this post if you haven't done your taxes yet.