“My job is to take punches to the face every day for the failure of the U.S. defense industrial system to deliver.”
That was the startling self-introduction delivered by a senior military officer responsible for defense cooperation assigned to a major U.S. embassy during an event I attended last year. Unfortunately, he was only half joking.
Cost overruns and schedule delays in U.S. defense programs cost taxpayers billions and deprive U.S. servicemembers of the capabilities they need. Likewise, when the U.S. defense industrial base fails to deliver capability to allies and partners, there are serious consequences for U.S. national security.
Delays weaken trust in the U.S. as a reliable security partner. They leave allies and partners without urgently needed capabilities and make them less likely to purchase U.S. weapons in the future. Meanwhile, U.S. adversaries become more emboldened as the balance of power tips in their favor.
For example, more than $20 billion in backlogged U.S. arms for Taiwan represent a trifecta for Chinese malign influence, undermining the Taiwanese people’s confidence in their government, their military and the U.S.
Failure to deliver U.S. arms on time and on budget also undermines the Trump administration’s burden-sharing goals.
Purchasing U.S. weapons is one of the only viable near-term options for allies and partners to significantly increase their defense spending. However, allies and partners may balk if they face ever-increasing costs and a high risk of delivery delays.
Fortunately, policymakers are taking note. Last month, the Trump administration published an executive order aimed at making foreign defense sales more rapid and transparent. The State Department, Defense Department and Congress have also convened task forces and tiger teams focused on reform.
Most recommendations to date focus on the role of the U.S. government. However, future reforms must also hold the defense industry accountable for holding up its end of the bargain.
To be clear, the U.S. government bears significant responsibility for the sorry state of foreign defense sales. Opaque and labyrinthine bureaucratic processes are a major source of delays. It regularly takes 18 months or more just to award a contract for a foreign defense sale.
Policymakers have incentivized bureaucrats to care more about adhering to standard procedure than advancing strategic needs, more about scrutinizing costs than accelerating deliveries. Restrictive regulations make it difficult to share technology with even the closest of U.S. allies, imposing another time-consuming compliance burden.
Moreover, policymakers have offered little to no incentive for companies to make proactive investments to support the needs of allies and partners. Indeed, they’ve done the opposite by routinely failing to provide sufficient, timely and predictable funding that encourages long-term investment in increased production capacity and resilient supply chains.
That said, delivering timely foreign defense sales requires industry to do its part.
Defense contractors have a responsibility to honestly and accurately represent production capacity and delivery timelines, especially amid surging and competing demand. They must be capable of delivering modern software on time and high-quality hardware without factory defects.
And they must invest in the facilities, workforce and supply chains to produce and deliver, not just sell, capabilities. Companies paying out billions in stock buybacks can afford these necessary investments.
Put simply, the U.S. government should not be facilitating defense sales to allies and partners that defense contractors are unable to produce and deliver on time. That’s why policymakers need to focus on greater accountability and increased competition.
Contracts for foreign defense sales should have specific, explicit and transparent conditions related to schedule and performance. As Ambassador Rahm Emanuel recommended when departing his post in Tokyo last year, companies that fail to meet these conditions due to factors within their control should face penalties, including potential suspension or debarment.
These penalties could be imposed using existing authorities in the Federal Acquisition Regulation. Congress could tailor and bolster these authorities for cases involving foreign defense sales.
For example, the secretaries of State and Defense could be authorized to suspend a delinquent defense contractor from selling a specific capability abroad, selling capabilities to a specific country or participating in the foreign military sales process altogether.
The threat of these consequences will be even more credible when robust competition minimizes U.S. government reliance on specific companies or capabilities.
That requires making it easier for smaller and nontraditional defense contractors to participate in foreign defense sales. And it means offering a wider range of capabilities to allies and partners, including so-called “non-program of record” capabilities that are not specifically part of the Pentagon’s five-year budget plan.
The U.S. is safer and war is less likely when our allies and partners are fully capable of defending themselves and fighting alongside us. But unless the arsenal of democracy consistently delivers on time, we may soon learn the awful truth that deterrence deferred is deterrence denied.
Dustin Walker is a nonresident fellow at the American Enterprise Institute.
