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The Sick System Of Awarding Government Contracts


Lobbies have gotten too big and those countries who don’t officially have lobbyists still have tremendous pressure being put on them by huge corporations to have them purchase weapons and other technology from them. Take the case of Australia. Australia’s Defense Minister is Christopher Pyne. Minister Pyne has been subjected to a barrage of complaints, not only from companies but also from the public. The reason for this is the fact he has awarded a very lucrative defense contract to Raytheon without what is known as a full competitive evaluation process. We are talking about a contract worth about two billion dollars. The contract is for a surface to air defense system known as the National Advanced Surface to Air Missile System or NASAMS. One would think with something this important and expensive a government would welcome a competition which would lead to the best technology being chosen. This is not to say Raytheon would not have won, I am saying there might have been better technology from one of the other companies and maybe even something cheaper, but they will never know, because there was no realistic competition.

We have seen a lot of successful rocket launches and landings by SpaceX. As a matter of fact they are the only company to have landed rockets vertically and then reused them, making them one of the cheapest to use for launches. United Launch Alliance is another company which builds and launches rockets. It is a venture between Lockheed Martin Corporation and The Boeing Company. Lockheed Martin is famous for building and selling the F-35 fighter, the plane with many problems and the system is called the most expensive weapon’s system in history. SpaceX entered competition for the contract for launches for the United States Air Force. They knew they were not going to win, because their heavy lift rocket had not been approved in time. The bottom line is there was no real competition between the two companies even though news articles call it that. By the way SpaceX has the lowest launch prices.

Sometimes contracts which were awarded without competition are investigated, but it certainly doesn’t seem enough times to me, but even when they are the results are not what we would like to see. Take the case of the investigation by the Inspector General of the United States Department of Defense. There were Naval Surface Warfare Center Crane Contracts awarded without competition. The Inspector General sent out a report which confirmed the navy didn’t need competition for these contracts to be awarded. According to the Inspector General the contracts were worth about $107 million dollars. How could competition have hurt?

An article appeared online at the website The Center for Public Integrity. The site claims to be the winner of the 2014 and 2017 Pulitzer Prize and they cite the fact no bid contracts have tripled in the last ten years of war. They quote one expert as saying “The lack of competition is a scandal.” What does this mean to us? If we examine the quality of what we are buying and the prices, we see a dramatic rise in prices and a reduction in quality. The two or either one may not always be the result of lack of competition, but many times it is. The military sometimes states they don’t have time in wartime to have competition, but is that really the case? Competition doesn’t always have to take long periods of time. Sometimes companies are given contracts and their product just doesn’t work out well and there have been cases where commanders have cancelled further orders for such a device or system.

One of the greatest aircraft engineers is Burt Rutan. His full name is Elbert Leander “Burt” Rutan. He is an acknowledged leader in the field. He designed the Voyager, the first plane to fly around the world without refueling or stopping. He founded the company Scaled Composites LLC. He was inducted into the National Aviation Hall of Fame and was Time Magazine’s “100 Most Influential People in the World”. He designed SpaceShipOne and SpaceShipTwo, two planes which are to be used in sub-orbital flights. I am telling you all this to point out what a genius this man is, because he was turned down for a contract to replace the A-10 Warthog ground support plane which is getting very old. He proposed a plane which carried a cannon which could shoot 4,200 rounds per minute, along with missiles. It was known as the ARES Mudfighter and would have been a very low cost plane to produce, so low cost it must have scared the traditional competition. Scaled Composites just didn’t have the lobbying juice to get this plane approved.  The plane had met every design promise.

In 2008 the director of the Straus Military Reform Project at the Center for Defense Information said, "In the military services, there's a sentiment that “we can do whatever we want because no one serious is looking over our shoulder." I don’t think things have changed much since then. I was always amazed at how it just so happened Donald Rumsfeld announced the military couldn’t account for trillions of dollars it spent and the next day the Pentagon was hit on 9/11 and the computers which held all the accounting for the military were destroyed.

Military systems are getting so expensive they have bankrupted this country and are one of the major contributors to our huge debt. One has to wonder how much money we are losing due to no competition contracts being awarded and contracts being awarded due to huge lobbying efforts by companies. There is also another factor and it is powerful members of congress forcing contract to be awarded to companies in their states, not because the devices are better, but because they want to look like heroes at election time.