A Lesson in Defense Contracting

Suppose you're an executive for a defense contractor. Your pet project was slashed by the Pentagon for current fiscal year; it took Congressional intervention to re-instate the funds, and your budgetary prospects for 2008 look rather bleak. How do you restore that essential funding flow?

Well, you might try the approach of Lockheed-Martin executive David Kier, who was on Capitol Hill Monday, providing a briefing for key Congressional aides. Mr. Kier, a former Deputy Director of the National Reconnaissance Office (NRO) is lobbying for a system that could protect portions of the east coast from sea-based, cruise missile attacks.

The Lockheed-Martin program uses high-altitude airships as sensor platforms, to detect cruise missiles that might be launched from cargo ships approaching the eastern seaboard. Once identified, the inbound missiles would be destroyed by other assets, such as Air Force fighters with AMRAAM missiles, or Standard SAMs from Navy surface Total value of the system, which could also protect against short-range ballistic missiles, is estimated at $10 billion.

In his briefing, Mr. Kier said the technology for such a system already exists, "It just requires a will to do it." According to Reuters, Kier told the Congressional aides that the system could be deployed in 14 months, at a cost of "several" billion dollars.

Kier's concerns were echoed by Jeff Kueter, President of the George C. Marshall Institute in Washington. In a separate briefing, Mr. Kueter noted the wide availability of cruise missiles; 20 countries can produce them, and thousands are available on the global arms market. He said that cruise missiles are becoming the "weapon of choice" for potential state competitors and terrorist groups. Small enough to fit inside a shipping container, a cruise missile could be launched with minimal warning, and reach coastal targets--including major cities--within 10 minutes.

The tag-team efforts of Messrs Kier and Kueter represent the classic "problem and solution" approach typically found during Congressional testimony, or in policy formulation sessions inside the Beltway. Have an "expert" define the threat, then let a contractor or consultant ride to the rescue, by offering the technology answer--available now, and at an affordable price!

But there's just one catch in this scenario. One of the chief opponents to the cruise missile defense plan is the Pentagon's own Missile Defense Agency, which (presumably) knows a little about the subject. The MDA slashed funding for cruise missile defense program in 2007 (until the money was restored by Congress), and the agency has requested no money for the project next year.

As we've noted recently, missile defense programs are under full-scale attack from Congressional Democrats, leaving the agency scrambling to fund more pressing programs. In that environment, the Pentagon apparently decided that it couldn't afford the cruise missile defense effort, given the (relatively) low threat currently posed by those systems. The briefings by Kier and Kueter were clearly aimed at rallying support for the cruise missile defense effort on Capitol Hill, enticing legislators (through their aides) to reinstate funding for the Lockheed-Martin program.

Will it work? Probably. Lockheed-Martin knows how the game works, and they've divided the project's airship element among three states, enlisting some powerful Congressional allies. The program is based in New Jersey, so we can assume that Democratic Senators Frank Lautenberg and Robert Menendez are onboard. High-tech materials for the airship will be produced at a factory in New Hampshire, and that means jobs in the home state of Republicans John Sununu and Judd Gregg. Members of the Ohio Congressional delegation are also lining up behind the airship, which will be built in Akron. And perhaps most importantly, the giant blimp has become a pet project of Pennsylvania Congressman John Murtha, who runs the House Defense Appropriations Subcommittee. Murtha visited the Akron facility last fall, and pledged to fully fund the airship program "over the next four or five years."

The airship is an amazing piece of technology, and it may have some commercial applications, perhaps as an aerial cell phone tower. But is it necessary as part of a cruise missile defense program which, according to the Pentagon, has marginal value in today's threat environment? Some of us have worked cruise missile threats since the days of the Soviet Union, when we worried about TU-95 Bear bombers firing AS-15's (their primary, air-launched cruise missile) into North America, or Russian attack subs launching similar attacks from the North Atlantic or the Pacific Ocean. By that benchmark, the cruise missile threat to the United States has certainly eroded.

That's why we think the Missile Defense Agency made the right call in slashing funding for cruise missile defense program. The threat from peer competitors may re-emerge, given China's efforts to build a submarine fleet and develop high-tech weaponry. But that particular challenge is probably a decade away, giving us sufficient time to explore the full range of defensive options. In the interim, we already have existing sensors (AWACS) and weapons (fighter jets, AEGIS-equipped Navy ships) to deal with the problem, given sufficient cueing from intelligence.

While the terrorist threat cannot be completely dismissed, we don't see groups like Al Qaida exactly scrambling to acquire cruise missiles. Fact is, such weapons require extensive logistics, intelligence and maintenance support. The U.S. Air Force reportedly has an entire intelligence squadron--more than 100 people--who do nothing but targeting support for our cruise missiles, developing flight routes and geodetic data required by those weapons.

Obviously, Al Qaida's "cruise missile command" wouldn't the same number of personnel, but developing that option would require a serious investment of resources, an investment that hasn't materialized (so far). Cruise missile attacks by a state-sponsored terrorist organization (say, Hizballah) are more likely, but that group still faces the challenge of finding the right weapon, training its personnel, getting it on a ship, transporting it 8,000 miles across the sea, and making it work. Could it happen? Possibly, but the chances seem remote over the near-term.

In budgetary terms, the airship program is almost a blip, and the large cruise missile defense effort is relatively small as well. But there's also the matter of principles and priorities. There are clearly more important projects in missile defense, and that's where the money should be spent. Congressional support for the airship program--at a time when priority MDA efforts are being gutted--strikes us as short-sighted and hypocritical. The proposed missile defense system for eastern Europe may never get off the ground, but that giant airship could make its first flight, as scheduled, in 2009.

Sadly, that's how defense contracting really operates, and another reminder of how the defense appropriations game is played, inside the Beltway.