A little transparency certainly goes a long way. For several years, officials at the U.S. Defense Department have stated that canceling the Medium Extended Air Defense System (MEADS) was prohibitive without agreement from 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 2012, $390 million, would be the final amount contributed by the U.S. Germany and Italy will likely object to this interpretation and contend that those countries had agreed to continue funding for MEADS, at least through fiscal 2013.
This new information likely encouraged the U.S. House’s defense appropriations subcommittee to strip funding for MEADS from the fiscal 2013 DoD appropriations bill. Although there was no provision for MEADS in the 2013 authorization bill, there was some conjecture that MEADS might end up receiving funding in the appropriations bill because the Obama administration requested $400.9 million for the program.
President Barack Obama has previously advocated canceling MEADS after the completion of the so-called “proof of concept” that was to run for two years ending in fiscal 2013. This period was meant to allow the U.S. and its partners to recoup as much as possible from MEADS 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, story in the Washington Post 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 John Young, former undersecretary of defense for acquisition, technology and logistics, believed that MEADS poses a dilemma for the Pentagon, which is attempting to preserve a weapon 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. The 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 canceled, 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.
Sean Kennedy is research manager at Citizens Against Government Waste, a private, nonpartisan organization based in Washington.