The Bunker: Fiscal Negligence

The Bunker, delivered to our subscribers Wednesdays at 7 a.m., is a newsletter from the desk of National Security Analyst Mark Thompson. Sign up here to receive it first thing, or check back Wednesday afternoon for the online version.

This week in The Bunker: The Defense Department has rules to vet the financial health of its contractors, but they’re too often ignored; Navy acknowledges its key ship-building programs are behind schedule; one reason the military’s sexual harassment numbers look as low as they do; and more.

FINANCIAL IRRESPONSIBILITY

Pentagon contracting officers are striking out

The Defense Department has brigades of regulations, and it seems everyone is always clamoring for more. Yet poking around the Pentagon yields repeated instances where the government is ignoring existing regs. Enforcing these would be far more important than adding new ones.

Take, for example, the requirement that Defense Department contracting officers conduct financial-responsibility reviews of contractors before awarding them contracts. “To minimize the risk of contract failure, DoD contracting officers are responsible for ensuring they award contracts to responsible contractors,” a March 29 report from the Defense Department Inspector General points out (PDF).

The rules require that contractors have enough money to do the job, meet the delivery schedule, possess “a satisfactory performance record,” and have “a satisfactory record of integrity and business ethics.” But, according to that IG report, four out of every five Pentagon contracts reviewed did not have adequate documentation to declare those contractors financially responsible. “For 47 (80 percent) of 59 contracts we reviewed, DoD contracting officers did not obtain sufficient documentation to support their positive determination of financial responsibility,” the IG found (PDF). The contracts totaled $7.8 billion; if the 35 contracts still open climb to their ceilings, the amount rises to $78.9 billion. “The risk of the DoD experiencing substandard deliverables, product substitution, defaults, or delays still exists on the 35 contracts,” the IG warned (PDF). All told, in 2022 the Pentagon issued 291,895 contracts (PDF), valued at $116 billion.

There has to be a reason the Defense Department formally requires that its contracting staff determine that suppliers are financially responsible. Unfortunately, it informally ignores that requirement. It’s simply the latest example of Pentagon procurement plowing ahead on auto-pilot.

FULL DREAM AHEAD

Navy flounders near water

For years, The Bunker has groused about Navy warships delivered late and/or over budget. There’s the service’s beleaguered Littoral Combat Ships, new billion-dollar frigates, and the notorious Zumwalt-class destroyers. But are these the exceptions — were we plucking the low-hanging hulls? Or is there something seriously wrong with the way the Navy buys and builds its vessels?

Turns out, every major U.S. warship program is running late, according to the Navy’s uncommon public airing of its dirty naval ensigns issued April 2. They include the initial boat in the Columbia-class of nuclear-missile-firing submarines (12-16 months late; being built jointly by General Dynamics Electric Boat and HII as the summary pointedly noted); Virginia-class attack subs (24-36 months late; being built by the same two yards); the third Ford-class carrier (18-26 months late; being built by HII); and the new Constellation-class frigate (36 months late; being built by Fincantieri Marinette Marine). The Navy’s apparently so flustered by the report that it isn’t holding its usual briefings on the service’s major programs at its largest annual trade show this week.

This is a terse summary, so don’t go looking for any deep dives (sorry) into the problem. Navy officials blame design delays, supply-chain woes, and a shortage of workers. But just how the Navy plans to fix things remains foggy. “We don’t have all those things completely nailed down yet,” Nickolas Guertin, the Navy’s top civilian weapons buyer, conceded. “We don’t have detailed plans of action, milestones, initiatives — we are identifying and deeply looking into where we are now in a ‘get real, get better’ approach.”

That’s a pretty striking statement, seeing as the Government Accountability Office warned of such woes six years ago. “Navy ships have routinely cost more and taken longer to build than expected,” the GAO reported in 2018. “Poor outcomes persist despite reform efforts because shortcomings in the implementation of policies and procedures enable the Navy to buy, build, and deliver ships without key knowledge about the resources required for the effort.”

Plainly, the Navy prefers “steady as she goes” instead of forcing changes that would make the service shipshape.

SEXUAL HARASSMENT

Where often is heard an encouraging word

Sexual harassment is a pervasive problem in the U.S. military. Pentagon leaders have repeatedly encouraged troops who feel they have been so abused to come forward with their complaints. Take the Navy and Marine Corps, whose members’ responses to a survey indicate they are sexually harassed more (PDF) than members in the other services (34% of women (PDF) and 9% of men in the Navy; 40% of women and 5% of men in the Marines).

Both branches have pledged to fight the scourge. Specially trained Navy personnel “remain fully available to Sailors world-wide to address victim physical, mental, and emotional well-being, strengthening resilience, encourage reporting, and support victim recovery,” the service says (PDF). “Marine Corps leaders at every level uphold the standards of integrity and moral character that promote respect, encourage reporting, and require response,” the corps adds (PDF).

Note the phrase “encourage reporting.”

But that’s not the only kind of sexual harassment encouragement sailors and Marines are getting. “An estimated 47% of women and 43% of men in the Navy (PDF), and an estimated 42% of women and 50% of men in the Marine Corps (PDF) who ‘experienced sexual harassment in the past 12 months and made a complaint’ were ‘encouraged to drop the issue,’” an April 2 report (PDF) from the Pentagon Inspector General said. Those striking facts cited by the IG are buried in charts deep inside a 580-page 2022 Pentagon report (PDF) into sexual harassment. The inquiry “does not provide details on who encouraged Service members to drop the issue,” the IG said (PDF). Nor do the services track (PDF) such dropped complaints to determine (PDF) if “retaliatory actions influenced complainants’ decisions to withdraw complaints.” Fact is, 34% of female sailors (PDF) and 40% of female Marines said they were sexually harassed in 2021. But amazingly, only 0.30% of Navy women and 1.61% of Marine women “submitted formal or anonymous complaints” that year.

The military says it plans to eventually track the reasons behind such dropped complaints. But until then, it’s best to take official Pentagon numbers on sexual harassment with a grain of salt.

WHAT WE’RE READING

Here’s what has caught The Bunker’s eye recently

→ Predictably Inevitable News 1.0

The Defense Department is delaying fixes needed by its F-35 fighter because the fixes need fixing, Michael Marrow reported April 4 at Breaking Defense.

→ Predictably Inevitable News 2.0

The Pentagon is renovating a Navy base in Papua New Guinea “in an effort to push back China’s influence and expand its presence in Oceania,” Zach Abdi reported April 6 at the U.S. Naval Institute website (this is the fourth such cite by The Bunker so far this year).

→ Predictably Inevitable News 3.0

Delays in production of two of the three legs of the nation’s nuclear triad could force the Pentagon to extend the lives of existing subs and ICBMs, Valerie Insinna reported April 5 at Breaking Defense.

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