Why the US Military Costs so Much

Iceland sent a small contingent to Afghanistan with NATO. We had a culture day and they served fermented shark meat. A very powerful deterrent.

Fun fact: cost overruns below 150% are considered a great economic success among militaries all over the world.

I am one of the designers who worked on the Comanche at Boeing. The Government kept changing the specifications so often it required several complete redesigns of the air-frame. We spent lab time developing new ways of making composite structures had large shops to make mock ups and I wound up flying across the country on a biweekly basis. There was so much paralysis from the Pentagon on decision making that we often had to stop work of hundreds of skilled craftsman engineers, technicians, and other scientists and wait for a decision to be made. If we could have been given a specification and turned out a prototype, even if that prototype failed it would have been cheaper to do three or four iterations than the two prototypes built.

As someone who worked in acquisition while in the military, I can say I've seen multimillion dollar items sit in storage until they were completely obsolete and deemed trash without ever being used.

I used to be a manager at Disney World, if I wanted a sign that said stroller parking, I would have to contact Walt Disney Imagineering and make sure it goes through the process it would cost $15,000. If I called the Orlando sign shop, sent them the picture, and have them come install it (which is what Imagineering would do anyway) it would be like $250. Disney operates just like the military, massive amounts of wasted money.

Without doubt, this industry in the US needs MAJOR overhaul. The level of incentivized waste is staggering.

The F-35 programme was a total success, albeit a very expensive and over budget one. The NGAD project is costing much less than estimated because of knowledge gained and infrastructure in place from the F35 development.

As someone who’s worked for one of the largest defense contractors in the world, I was happy with you bringing to light some of the biggest, most insidious, and most common problems with defense contracting practices; but I was also happy to hear you say that this was only scratching the surface of the insidiousness of these practices. It’s one of the big reasons why I had to leave the industry. Some of our bidding practices were just plain morally terrible that I could no longer let myself be a part of it.

I took a tour of an Independence class LCS once and the concept is a great idea when you see what it looks like in person, but the issues are pretty obvious as well. Aluminium is not as fire resistant as it's melting point is half of steel's melting point, so every inch of the interior of the hull has fire proofing blankets on it. As mentioned in the video it's also more brittle than steel, aluminium will not flex if impacted by a shell, just shatter and penetrate like paper. But one of the most embarassing parts I learned was the ability to change its armaments. There is the physical ability to carry cruise missiles in a vertial launch container, except the exhaust from the rockets will MELT THE ALUMINIUM AROUND IT. Such goofy design.

I think there's a good argument to be made that the f35 is actually relatively successful now that the problems with it have been worked out. The unit price isn't bad at all and there's a ton of international buyers lining up for it. Combat capability wise, it also looks like a great platform.

The F-35 isnt a good example, yes it went way over in development but has since dropped in per unit price to about 80 mil for the A unit which is cheaper than the new f-15 ex at 115 mil. Plus alot the new tech is being incorporated into new equipment.

Keep in mind back in 2014 (roughly, going from memory) France had to call in US support for logistical help to support less than 20 troops in Mali.

The US military faces 3 issues from my perspective: scope creep, lack of tier 1 contractor competition, and requirements based on unproven technologies.

There's a mistake in your video here, you said that Canada has a well funded military.

Cost-plus contracts are often written with a Guaranteed Maximum Price (GMP) with split savings. It incentivizes accurate budgeting and scheduling. It's wild that defense contracts don't have a GMP.

the LCS was spectacularly successful at delivering profit to those with stakes in defense companies, just like those missiles that cost $40k to build but are bought by the pentagon for $600k each. back in the day the military used to say what they needed and companies used to compete to meet them, doing their own R&D. now we cover their R&D costs so not only are they not incentivized not to mess up, they're incentivized to mess up because it produces more profit.

The huge issue the US military has is that it has to be ready for. . . . . .everything. Most nations construct their armed forces around a limited set of scenarios based on their local conditions. America can, and not infrequently does, get involved anywhere in the world in almost any kind of conflict against almost any kind of enemy. That increases costs exponentially.

3:00 "Take for example the USS Freedom" while showing multiple shots of the Independence class LCS instead of the Freedom Class

The first ship of the FFG-7 class was built and tested before the contract was let for the rest of the class. People begged the Navy to replace them with ships of similar capabilities - a jack of all trades, capable of detached operations. The LCS program was daring, but a failure before the first ships came off the slipways. Now they are going back to a tested hull for the new Constellation class.

Having worked at a company that deal mostly with military contractor this is really funny to me as they were always pushing on us to get thing on time or requiring a sooner deadline, of course they paid some hefty money for their urgency.