Transparency Leads to Defunding of MEADS | Citizens Against Government Waste

Transparency Leads to Defunding of MEADS

The WasteWatcher

A little transparency certainly goes a long way.

For several years, officials at the Department of Defense (DOD) have stated that cancelling the Medium Extended Air Defense System (MEADS) was prohibitive without agreement from the U.S.’ partners Germany and Italy because of high unilateral termination costs. Although MEADS, which was meant to replace the Patriot missile system, was experiencing cost overruns and extensive delays, it was necessary to continue the program because of the cost of cancellation.

However, a confidential DOD report to Congress obtained this year by Citizens Against Government Waste concludes that the U.S. can withdraw from the contract without committing additional money or paying termination fees. The report cites language in the 2005 Memorandum of Understanding among the three countries stating that activities related to MEADS were subject to “the availability of funds appropriated for such purposes.” The DOD now interprets this to mean that if Congress fails to appropriate funding for MEADS, the U.S. can extricate itself from the program without penalty. Under this scenario, the amount appropriated for MEADS in fiscal year (FY) 2012, $390 million, would be the final amount contributed by the United States. Germany and Italy will likely object to this interpretation, and contend that those countries had agreed to continue funding for MEADS, at least through FY 2013.

This new information likely encouraged the House Defense Appropriations Subcommittee to strip funding for MEADS from the FY 2013 DOD appropriations bill. Although there was no provision for MEADS in the FY 2013 National Defense Authorization Act, there was some conjecture MEADS might end up receiving funding in the appropriations bill because the Obama Administration requested $400.9 million for the program. The Senate has yet to pass its version of the DOD appropriations bill. Several senators, including Armed Services Committee Ranking Member John McCain (R-Ariz.), have been highly critical of the program.

The President has previously advocated cancelling MEADS after the completion of the so-called “Proof of Concept” that was to run for two years ending in FY 2013. This period was meant to allow the U.S. and its partners to recoup as much as possible from MEADS in order to upgrade existing missile defense systems such as the Patriot. However, the appropriations bill would cut off funds for that second year.

MEADS’ troubles have been well-documented. The program has been plagued with cost overruns of nearly $2 billion and is 10 years behind schedule. A March 9, 2010 Washington Postreport quoted an internal U.S. Army memo asserting that the program “will not meet U.S. requirements or address the current and emerging threat without extensive and costly modifications.” The article also noted that former Undersecretary of Defense for Acquisition, Technology and Logistics John Young, Jr. believes that MEADS poses a dilemma for the Pentagon, which is attempting to preserve a weapons program that is not fully funded, has large reported termination costs, and is no longer wanted by the Army.

In addition, a March 2011 Congressional Budget Office (CBO) report recommended terminating MEADS in favor of continuing production of the Patriot. CBO cited an internal Army memo that urged “harvesting MEADS technologies and improving the Patriot program it was designed to replace.” The Government Accountability Office’s annual report on DOD weapons programs in March 2011 noted problems with MEADS, including that it “is at risk of not meeting several technical performance measures….”

Costly defense acquisition programs are rarely cancelled, despite the most glaring deficiencies. Members of the House of Representatives should be applauded for ridding taxpayers of this wasteful program and the Senate should immediately follow suit.

In the case of MEADS, increased transparency has brought the program to death’s door. One wonders what other “vital” DOD acquisition programs might lose their luster with similar scrutiny.

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