Procurement Hurdles and Lack of Urgency

N P R. This is the indicator from Plan of Money, I'm Arian Ma. and I'm Pattyy Hirch. Over the course of history, key advances in technology have made fundamental changes in the way human beings wage war, the longbow, gunpowder, the airplane, the tank, the nuke. And now The drone drones that can fly in swarms over hundreds of miles, sea drones that can attack targets underwater or on the surface and land drones that can move across terrain and hold positions for days, as long as they have ammunition. Now drones were around before the wars in Ukraine and Iran Butose conflicts have driven the proliferation of drone technology and made a fundamental change in the way we fight. Drones are now embedded in warfare We've reported earlier this year that combating small cheap drones used by Iran has drained the US military arsenal of expensive high tech weapons systems So you'd think the US, being the world's biggest arms maker and exporter, would be right on top of this, right? Yeah, you would. You'd think our defense businesses would be dominating the development and production of drones and the weapons we need to fight them. But They're not. And there are a lot of reasons for this. In today's show, we're going to focus on just three. That's coming up after the break. When it comes to making and selling weapons, the United States is the undisputed heavyweight champion of the world. It accounts for roughly forty two percent of global arms exports, and that includes drones, by the way Stacey Petty John is director of the Defense program. the Center for a New American Security. She says the U. S was well ahead of the curve when it came to getting into the drone business. The U.S. is the leader in advanced expensive drones, and that's what the U. S. military acquired a lot of for the gllobal war on terrorism The worars in Iraq and Afghanistan, but these are thirty million or like veryery expensive drones compared to what we're talking about that Iran, Russia, or Ukraine is building and using And this is how the American military rolls, or has rolled at least since the nineteen eighties the Department of Defense war, if you prefer, has expensive tastes. The US military tends to prefer things that are quite high end, reusable, not like something that Maybe you use it a couple times, maybe you only get one use out of it. Even our missiles that are single use are expensive in the high end. And this is the first reason it's become difficult for the American military and the defense industry Tivot to this new paradigm of warfare There is what Stacey calls an institutional bias against cheap stuff And it's why we had four million dollars cruise missiles shooting down four thousand dollars drones off the coast of Iran. The U.S.' military edge has been built on this qualitative superiority that you have the better technology, not the cheaper thing Now, the military isn't stupid, It's wise to the asymmetry that drones, whether on land or sea or in the air, bring to a conflict And the topop brass is working to acquire better, cheaper weapons to combat these systems difficulty lies with integrating that cheap stuff with the expensive gear that we already have. Figuring out how to integrate them when you have this much more sophisticated military that includes large battleships, you know carrier strike groups, submarines, tactical aircraft, stealthy bombers, where does it a tiny commercially derived drone fit in? and how do you make these different pieces work together The second big reason the US defense industry is struggling to keep up with the cheap and nasty drone revolution is the procurement process That is the way the government orders its weapons. Our acquisition processes and our budgeting processes have been built and are tailored for these exquisite reusable systems. Budgeting takes years, Stacey says. The Government Accountability Office find that it can take more than a decade for big weapons programs to actually start operating on the ground Companies with defense contracts call this the Valley of Death Because they have to hang a bike waiting for years without pay by the way, for the Pentagon to complete its reviews Now, once again, the military powers that be are aware that this is a problem Last year, the DOD announced an overhaul of its procurement process, designed to speed things up. putting a lot of money out and trying to quickly issue contracts and have competition among small drone companies and field them. Um and That is intended to provide a more stable and a longer term demand signal so that U. S. companies can start to break into the market. The U. S. defense industry regards this as a welcome policy of the Trump administration could help U.S companies develop and build the new cheaper weapons the military needs to fight this new kind of war Unfortunately, however, there's another administration mandate that's getting in the way of changing the procurement process. You could call this reason two partart B. The U.S. military only wants to use systems that do not incorporate Chinese components or a Chinese buildilt. And that's a real problem because Chinese companies dominate the commercial drone market And Stacy's not just talking about finished drones here She's talking about a lot of stuff that goes into drones. There are materials thingsings like rare earth that China dominates the market D differenterent subc compponents that are really important to drones like brushless motors, batteries, some of the sensors. You can get these parts from other countries, but they tend to be more expensive. and they're just not as good. So you end up buying More expensive inputs and you then end up undermining one of the main propositions of Jones, which is that they're cheap because they're no longer cheap. You're buying a thirty thousand dollars quadcopter that doesn't perform as well as a DGI Mavic three, which is you know a couple thousand buckars. would be some sort of communication between these different parts of the Pentagon. This is government as usual, Adrian. But you know, all jesting aside, you might be thinking to yourself, well, where is the government's sense of urgency when it comes to this issue? I mean, after all, weve spent as much as one hundred thirteen billion dollars striking Iran and fending off its drones. We've seriously depleted our stocks of interceptors and strike missiles. It's clear to everyone that drones have changed the nature of warfare and yet. While the Ukrainians are frantically innovating and adapting and churning out as many as a thousand drones a day The US is still lagging behind And this is the third big reason we're not seeing this immediate pivot by the US defense industry to making smaller, cheaper weapons like drones The U S. is not in a shooting war And there just isn't the same pressing need in Washington as there is in Kyiv. The urgency for the situation in Ukraine is driving them to be very innovative, to take a lot of risk and to do pretty amazing things. It's not to diminish what they're doing at all, but we don't have any of that here The Pentagon is in a difficult position, Stacy says. It wants to keep pace with developments. technology is changing too fast to keep up. No matter what, the peacetime demand just from the US military is going to be much smaller than what you see in terms of Russia Ukraine at war, needing four million drones a year. You don't want to buy four million of these drones that are obsolete within a year. and that's being really generous since adaptation cycles on the front lines are much more up much faster than that. That mismatch in pace and demand makes it nearly impossible to place orders with small defense contractors that are developing these weapon systems And it's just as hard for those contractors to bid Who knows what the defense landscape will look like in a year? Yeah. And meanwhile, Stacy says the big defense companies like Lockheed, Martin and Northrop Grumman They're still focused on where the real money is. while there's a lot of money right now in drones If you're talking about a fraction of one hundred fifty million dollars, you know You have airplanes that cost more than one hundred fifty million dollars for one. We just talk about fast jets like the F sixteen that can cost one hundred fifty million do and the F thirty five that's about a hundred million a pop Can you guess how many fast yets Lockheed Martin delivered last year moreore than two hundred. Okay, well, I guess We know where the money is. Yes, we do This episode is produced by Cooper Kats McKim and Angel Cartas. It was engineered by Travis Hagen. It was fact checked by Sierra Juz, Kateen Cannon is our editor and the indicators of production of NPR