The Dire Need And A Formula For Long Term Strategic Vision

Although by far the most powerful country in the world, the U.S. is suffering from a lack of long term vision. The individual citizen is as much at fault for this condition as the politician or the military industrial complex.

From our relationships with each other and with other countries, from corporate board rooms to Wall Street stock run ups, we must use long term strategic vision in lieu of pursuing short term gains.

Polarization, ignoring environmental and  geopolitical realities, engaging in costly war intrusions, neglecting education/infrastructure and accumulating a $34 Trillion National Debt, heavily mortgaging future generations, are all symptoms of our lack of long term strategic vision.

Geopolitical Realities and the US Role

George Friedman accurately addressed the historical geopolitical state in a recent article:

“To put it simply, a vast swath of the Eurasian landmass (understood to be Europe and Asia together) is in political, military and economic disarray.

Drawing on the recollection of Desert Storm  it was assumed that American power could reshape the Islamic world at will after the US was attacked September 11th, 2001. All power has limits, but the limits of American power were not visible until later in the 2000’s.

At that point two other events intervened.

The first was the re-emergence of Russia as at least a regional power when it invaded Georgia in 2008. [The invasion tactic continued with the Ukraine War]

The other was, of course, the financial crisis. Both combined to define the current situation. [COVID continued the strain on the world economy]

The United States is, by far, the worlds most powerful nation, That does not mean that the United States can — or has an interest to — solve the problems of the world, contain the forces that are at work or stand in front of those forces and compel them to stop. Even the toughest guy in the bar can’t take on the entire bar and win.”

China the Peace Maker 

David Grammig enlightens us in an article in “Geopolitical Monitor “to an alternative to war and debt laden international finance being practiced by the Chinese:

“Geopolitical calculations are as much a reason for this 2-trillion-dollar project as economic ones.

The OBOR project represents one of China’s new overarching foreign policy goals, and it demonstrates a willingness and ability to challenge old power structures, especially in Central Asia and the Middle East.

The Silk Road, or OBOR project, aims at creating an enormous economic bloc and fostering trade, cultural exchange, political collaboration, and military cooperation among its members – under Chinese domination. [ The recent military competition against U.S. interests and associated weapons buildup by China with threats to Taiwan serve as a diversion from China’s overarching foreign policy goals through the Silk Road Project]

An obvious competitor against Russia’s Eurasian Union and India’s Act East and Connect Central Asia initiatives, the OBOR project has many Central Asian and Middle Eastern states justifiably worried of being caught up in a race for dominance in the region, producing somewhat cautious reactions to China’s big plans. Yet, some countries in the region – even those torn by sectarian conflict – may still be inclined to step into a new age due to China’s vast investments and its associated desire to protect its economic engagements.

The United States and its military interventions on the other hand, which aimed at securing political influence and protecting economic interests, bore no sustainable fruits and have led to growing instability in the region. Furthermore, US policy in the Middle East yielded anti-American resentment in the public and political spheres.

China’s approach, however, will most likely not lead to demonstrations, burning flags, and attacks against its embassies, because it will not be seen as a war-mongering imperialistic force, giving itself a chance to establish itself as a partner whose outstretched hand is worth taking.”

The US Market Mirage 

Rana Foroohar demonstrates in Time Magazine how the folly of short term thinking often drives poor investment in the stock market when assessing the value of companies:

“One of the hardest-dying ideas in economics is that stock price accurately reflects the fundamental value of a given firm. It’s easy to understand why this misunderstanding persists: price equals value is a simple idea in a complex world. But the truth is that the value of firms in the market and their value within the real economy are, as often as not, disconnected. In fact, the Street regularly punishes firms hardest when they are making the decisions that most enhance their real economic value, causing their stock price to sink.

There are thousands of examples I could cite, but here’s a particularly striking one: the price of Apple stock fell roughly 25% the year it introduced the iPod. The technology that would kick-start the greatest corporate turnaround in the history of capitalism initially disappointed, selling only 400,000 units in its debut year, and the company’s stock reflected that. Thankfully, Steve Jobs didn’t give a fig. He stuck with the idea, and today nine Apple iDevices are sold somewhere in the world every second.CEOs, who are paid mostly in stock and live in fear of being punished by the markets, race to hit the numbers rather than simply making the best decisions for their businesses long term. One National Bureau of Economic Research study found that 80% of executives would forgo innovation-generating spending if it meant missing their quarterly earnings figures.

Nobody–not Economists, not CEOs and not policymakers–thinks that’s good for real economic growth. Yet the markets stay up because of the dysfunctional feedback loops. Eventually, of course, interest rates will rise, money won’t be cheap anymore, and markets will go back down. None of it will reflect the reality on the ground, for companies or consumers, any more than it did during the boom times.”

Achieving Strategic Vision

From the above analysis by experts, it is apparent that the US is in dire need of strategic vision.  To achieve it we must:

Face  environmental, geopolitical and economic realities, stop war interventions and invest in relationships within and without our country by offering mutual collaboration.

Cease dwelling on threat and build long term infrastructure, education and international development.  The threats will melt away.

Invest for the long term at the stock holder, company and  national levels based on a strategy dealing with present day and long term challenges in education, communication and society value transitions.

Elect a Congress and an Administration that knows how to strike a balance between long and short term actions. We must then let them know what we think regularly by communicating with them.

Know that most cultures and societies in upheaval today are watching our national model and choosing whether or not to support it, ignore it or attack it.

A Fiscal Crisis: The West is on the Wrong Side of Cost Curve

“REAL CLEAR DEFENSE” By Matthew Van Wagenen & Arnel P. David

“An axis of aggressors has embarked on a new strategy to defeat the West: relentless attacks with inexpensive weapons, produced at scale, to provoke a global response.

Western militaries, which cling to outdated and excessively expensive weapon systems and platforms (that take too long to develop and replenish, and regularly exceed their budgets), are being systematically bled dry”

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“In simple financial terms, the West is on the wrong side of the cost curve. Imagine the defense industry as a normal business. In economics, a cost curve illustrates the relationship between production costs and quantity. Successful businesses achieve economies of scale, reducing costs through efficiency. But the West’s defense enterprise is operating on the wrong side of this curve. Production costs are high, and output is low, pushing Western nations into diseconomies of scale.

The recent aerial attack on Israel and the war in Ukraine expose this vulnerability. Iran’s 300 plus airborne weapons that targeted Israel amounted to less than $200 million dollars whereas the Western response exceeds billions of dollars. In Ukraine, multi-million dollar weapons platforms are destroyed by uncrewed aircraft systems (UAS) that range from hundreds to thousands of dollars, and Russia’s prized Black Sea Fleet has been devastated by inexpensive maritime drones. Defense analysts estimate the cost ratio is easily 100:1.

A Call to Action

A new revolution in military spending is underway. It is a radical change in the way nations procure and integrate military capabilities.  The innovation and changes in Ukraine has been described by General Mark Milley as “the most significant fundamental change in the character of war ever recorded in history.” Consequently, this is not a military issue alone; it is a societal one. In democracies like the United States, we the people are responsible for our common defense. We cannot afford to ignore this unsustainable cost mismatch. Every defense dollar matters when there are competing demands for resources to address aging populations, health care, migration challenges, and myriad other social services.

Traditional procurement models in the West, to include the U.S. and NATO, are no longer fit for purpose. They are failing. Decades-long development cycles are obsolete in a world of rapidly evolving threats and disruptive technological change. Let’s say an adversarial nation has a four year cycle to produce a capability and, in the West, it takes ten years. In this scenario, in twenty years’ time the adversary-to-West ratio for innovation and capability development is 5:2. This all but guarantees that our adversaries will field a greater range of innovative capabilities, potentially leading to overmatch.

Rapid technological advancements are outpacing the military’s long-term development programs, rendering them obsolete as cheaper, more effective alternatives emerge. Program managers, those with the responsibility, authority, and personnel to deliver programs (e.g., ships, planes, software), lack both the incentive and the means to adapt to this fast-changing landscape. The ingrained culture of preserving existing programs stifles innovation and adaptability. It is unlikely a program manager will kill their program for the greater good.

Likewise, the political representatives of states where these programs sit will lobby heavily to keep these programs (i.e., jobs) alive irrespective of any negative strategic impact.

To overcome this, the military and the broader defense enterprise must urgently rethink their approach. Early and aggressive testing, integration, and prototyping of innovative warfare concepts are essential to gain an edge in modern conflicts. SpaceX’s rapid trial and error prototyping to develop rockets and OpenAI’s early release and testing of ChatGPT are examples of this approach to develop capability faster.  Waiting for “perfect” solutions, or clinging to lengthy development cycles, leads to unpreparedness on the ever-evolving battlefield. Keeping this approach is akin to relying on horse cavalry in the era of mechanized warfare.

A Glimmer of Hope

There is movement in the right direction. Nations like Estonia, Latvia, Lithuania, Poland, Norway, and Finland are leading the way. Their “drone wall“ initiative leverages affordable, networked sensors to safeguard their sovereignty. They will do this by keeping costs down to achieve economies of scale.

The U.S. Department of Defense is also taking steps in the right direction with its Replicator initiative. Thousands of drones have been delivered, demonstrating a shift toward rapid, warfighter-centric innovation. This could be the necessary spark to ignite essential change.

Other promising initiatives in NATO are the Defence Innovation Accelerator for the North Atlantic (DIANA) and the NATO Innovation Fund (NIF). Both complementary initiatives provide access to deep tech start-up communities, but the challenge for these programs will be transition. How do they transition capability into warfighters’ hands to be relevant going forward? As expressed above, it cannot take decades.

The Path Forward

To survive, the West must revolutionize its military procurement and production processes. We need a laser focus on swift prototyping and deployment of cutting-edge technologies. These systems must be affordable, easily updated, interoperable, and adaptable to new threats. The era of billion-dollar projects that risk obsolescence must end. A more diverse approach is not just needed, it is compulsory if we want to win wars and preserve peace.

The conflict in Ukraine serves as a stark warning. Clinging to expensive, slow-moving defense systems will leave the West vulnerable. We must out-innovate, not outspend, our adversaries. Our Alliance, made up of free and democratic nations, must unleash the creative capital present within our societies to find cost wise off-sets that can be immediately integrated into our collective defense system.

The future of warfare demands a fusion of accessible technology, rapid innovation, and scalable production. The West must adapt or face the consequences of falling behind an axis of aggressors who are united in their pursuit of strategic advantage and wish to see the West decline.”

 Real Clear Defense – Fiscal Crisis

Matthew Van Wagenen is a major general in the U.S. Army currently serving as the Deputy Chief of Staff for Operations (DCOS OPS) in the NATO Supreme Headquarters Allied Powers Europe (SHAPE).

Arnel P. David is a colonel in the U.S. Army currently serving as the director of the Strategic Initiatives Group (SIG) in the NATO Supreme Headquarters Allied Powers Europe (SHAPE).

The views and opinions expressed are those of the authors and do not reflect any entity or organization of the U.S. Government or NATO.

Navy Admiral’s Bribery Charges Expose Greater Rot In Government Procurement System

“RESPONSIBLE STATECRAFT” By WILLIAM HARTUNG AND BEN FREEMAN

“The indictment of four-star Navy Admiral Robert Burke on bribery charges late last month raised eyebrows about the extent of corruption in the Navy and beyond. 

But this is just part of a pernicious system of corrupt dealings and profiteering in Pentagon procurement practices, and much of it is completely legal.”

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“The indictment of four-star Navy Admiral Robert Burke on bribery charges late last month raised eyebrows about the extent of corruption in the Navy and beyond. The scheme was simple. Burke allegedly steered a $355,000 Pentagon contract to a small workforce training firm — described unhelpfully in the Justice Department’s description as “Company A.” Less than a year later he took a job at Company A in exchange for a $500,000 annual salary and 100,000 stock options.

The Burke indictment comes on the heels of Washington Post writer Craig Whitlock’s illuminating book on the Fat Leonard Scandal, the biggest, most embarrassing corruption scheme in the history of the U.S. Navy. In the words of his publisher, Simon Schuster, Whitlock’s book reveals “how a charismatic Malaysian defense contractor bribed scores of high-ranking military officers, defrauded the US Navy of tens of millions of dollars, and jeopardized our nation’s security.”

Obviously, the Navy needs to clean up its act, and, if found guilty, Burke should face consequences for his participation in a blatant case of old school corruption.

But this is just part of a pernicious system of corrupt dealings and profiteering in Pentagon procurement practices, and much of it is completely legal. It involves campaign contributions from major weapons contractors to key members of Congress with the most power to determine the size and shape of the Pentagon budget, and job blackmail, in which companies place facilities in as many congressional districts as possible and then stand ready to accuse members of cutting local jobs if they vote against a weapons program, no matter how misguided or dysfunctional it may be.

It also involves the revolving door, in which arms industry executives often do stints in top national security posts, even serving as secretary of defense, or, on the other side of the revolving door, when high ranking Pentagon and military officials go to work for weapons makers when they leave government service.In fact, this is, by far, the most common path for retired senior military officers. As a Quincy Institute analysis found, over 80% of four-star generals and admirals that have retired in the last five years (26 of 32) went on to work in the arms sector. In short, most retiring four-stars, like Burke, go on to lucrative positions in the arms industry. Unlike Burke, they follow the rules, so this is all perfectly legal corruption.

The revolving door from the Pentagon is also spinning feverishly to foreign governments. A Washington Post investigation found that more than 500 former Pentagon personnel, including many high ranking generals and admirals, have gone on to work for foreign governments known for political repression and human rights abuses, like Saudi Arabia and the United Arab Emirates.

Last, but certainly not least, there are the lobbyists. Last year alone, Pentagon contractors spent nearly $138 million on lobbying and had 905 lobbyists working on their behalf, according to OpenSecrets. That’s almost two lobbyists for every member of Congress, and more than 600 of them had gone through the revolving door —previously working at the Pentagon, Congress, or the Executive branch.

All of the above is about money and jobs, not crafting an effective defense strategy or buying weapons systems that are appropriate for carrying out that strategy. A case in point was a hearing last October to review a report on America’s strategic (meaning nuclear) posture from a Congressional commission, almost all the members of which have financial ties to the arms industry.

First off, the commission co-chair who testified at the hearing was former Arizona Senator Jon Kyl, a lifelong opponent of nuclear arms control who also did a stint as a lobbyist for Northrop Grumman, which makes nuclear bombers and land-based nuclear missiles. Surprise, surprise, Kyl recommended that Congress pony up more for nuclear weapons on top of the Pentagon’s current $2 trillion, three decades long nuclear weapons “modernization” program.

But surely the gathered members of the Senate Armed Services Committee would ask some tough questions before accepting the commission’s proposals for an accelerated nuclear buildup. Think again. The bulk of the questioners essentially touted nuclear-related missiles or facilities in their states and asked a variation on the penetrating question, “shouldn’t we spend more on this wonderful weapon [or facility] in my state?”

What wasn’t mentioned at the hearing was the fact that defense contractors — including Northrop Grumman, which makes the nuclear weapons in question — are some of the top campaign contributors to members of the Committee, according to OpenSecrets.

It fell to Sen. Elizabeth Warren (D-Mass.) to bring the discussion down to earth by asking how much the commission’s ambitious plan would cost. With a straight face, Kyl said that the commission hadn’t calculated a cost, since the investments proposed were so urgently needed. This seems highly unlikely given that the United States already deploys over 1,700 nuclear warheads that can hit targets thousands of miles away, with thousands more in reserve.

But Kyl’s statement went largely unchallenged in the rush by members to flak for their local weapons of choice.

If skipping a serious conversation on the future nuclear policy of the United States to engage in pork barrel politics isn’t a case of blatant corruption and dereliction of duty, what is? If even a conversation that touches on the future of the planet can’t rouse money-conscious Senators to engage in an actual debate, what will? And isn’t this dereliction of duty ultimately more dangerous than trading cash or a cushy job for doing the bidding of a weapons contractor?

It’s great that our legal system is seeking to hold participants in illegal schemes to account. But when will members of Congress who place shilling for special interests above crafting an effective defense policy face the music? If not soon, we can expect much of the tens or hundreds of billions of new money likely to be thrown at the Pentagon in the next few years to go to waste. If that’s not a scandal of the highest order, we don’t know what is.”

William Hartung

William D. Hartung is a senior research fellow at the Quincy Institute for Responsible Statecraft. His work focuses on the arms industry and U.S. military budget.

Ben Freeman

Ben Freeman is Director of the Democratizing Foreign Policy program at the Quincy Institute. He investigates money in politics, defense spending, and foreign influence in America. He is the author of The Foreign Policy Auction, which was the first book to systematically analyze the foreign influence industry in the United States.

 

‘Connecting The Dots’ In the Military And Veterans Health Care Systems Maze

By Ken Larson

I am a Vietnam Veteran and former federal contracts manager, who has been in the VA Health Care System for 17 years. History and experience must be connected to yield some tough solutions to a project that has spanned decades without yielding results

The expense and poor performance in the VA Healthcare records system upgrade, recently highlighted in the Congress and the Press, reveal a dire necessity for simplification, communication and efficiency in processes and systems.

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However, the real root causes lie in the massive volume of war veterans returning from our wars in the Middle East over the last two decades, coupled with the historically poor process and systems work conducted between the Department of Defense and the VA utilizing poorly managed contractors taking home millions on systems specifications that change like the wind blows.

The news media, the auditors and the average American are pointing the finger at the President and the Head of the VA.  One cannot ignore the accountability aspects of these individuals.  

 HISTORY: After returning from two combat tours in Vietnam, I worked in the government contracting environment for 36 years then went through the VA system as a Veteran getting treatment at retirement in 2006. I am in the system today.

In 2006 I found the VA had a magnificent system capable of handling medical records and treatment anywhere in the world once a veteran was in the system; a key point.  Why have we had such deterioration?

ANSWER:   We have not experienced deterioration in services within the VA itself, except  from pressures due to millions returning from war coupled with COVID factors and human beings who look for excuses when systems fail.

We have had 2 decades of Middle East incursions, a sudden discharge of veterans and poor management from the DOD to the VA, from the systems contractors to the state veterans homes.  Veterans fall through the cracks as a result. We have a cost plus contracting scenario in the form of veterans care systems mismanagement and it will cost billions to fix. 

THAT IS THE COST OF WAR. We must have effective and timely veterans health care or our volunteer army will disappear. Low recruiting numbers in the present day are demonstrating that fact.

THE TOTAL SPECTRUM MUST BE VIEWED TO MANAGE THE ISSUES. 

BACKGROUND

A 3 part special in Time Magazine in 2013 addressed the serious gaps developing between treatment,  benefits and services processes and systems between the military  services and the Veterans Administration:

https://nation.time.com/2013/04/22/what-the-hell-is-going-on-with-va/#ixzz2RnspoSM4

“While awaiting  processing, “the veteran’s claim sits stagnant for up to 175 days as VA  awaits transfer of complete (service treatment records) from DoD,”:

After years of work to move toward integrated electronic records that would eliminate this sort of delay, Defense Secretary Chuck Hagel conceded in that the Defense Department was not holding up its end of the bargain to improve the disability process.

“I didn’t think, we knew what the hell we were doing.”:

DoD chooses interoperability over integration for new e-health record system

HISTORICAL SIMILARITIES

The above scenario is not unlike the Walter Reed Army Hospital care fiasco a few years ago, before the facility was shut down and consolidated with the Bethesda Naval facility.

https://www.wbur.org/npr/139641856/in-2007-walter-reed-was-the-armys-wakeup-call

OTHER SYMPTOMS

The VA decided to have those who would  actually use the system (claims processors) work with software  developers. This process would take longer, they estimated, but would create a system more  likely to meet the needs of those who actually use it. VA also worked closely with major Congressional-chartered veterans’ service  organizations.

2013 was the year in which regional offices were to be transitioned to the resulting electronic system.  It obviously did not occur as planned.

In recent years a switch to the commercial software approach through a single company contract award without competition by the VA has been a $16 Billion debacle. The non-compete contract was justified because the awarded contractor already had the in-process contract for DOD records system modernization.

https://rosecoveredglasses.wordpress.com/2022/07/29/veterans-administration-16-billion-medical-records-overhaul-could-triple-in-cost/

ROOT CAUSE

Both DOD and the Veterans  Administration use service contractors to perform this type of systems development.  Government Computer News (GCN)  carried a story on the  difficulties experienced with, “Performance-Based Contracting”, which  has been made part of the Federal Acquisition Regulation (FAR) in an  attempt to pre-establish at contract award those discrete outcomes that determine if and when a contractor will be paid.

https://www.route-fifty.com/digital-government/2006/12/performance-based-contracting-still-baffles-agencies/301132/

Interestingly enough, the article splits the blame for the difficulties right down the middle, stating the government typically has problems  defining what it wants as an end product or outcome and looks to  contractors to define it for them. More than willing to do so, the contractors detail specific end products or outcomes, set schedule  milestones and submit competitive proposals.

The winner is selected based on what the government thinks it needs at  the time to fulfill its requirement and a contract is negotiated. Once underway, the government decides it wants something else (usually a  management-by-government committee phenomena with a contractor growing  his product or service by offering lots of options).

The resulting  change of contract scope invalidates the original price and schedule, so  a whole new round of proposals and negotiations must occur with the  winner while the losers watch something totally different evolve than  that for which they competed. The clock keeps ticking and the winner  keeps getting his monthly bill paid based on incurred cost or progress  payments.

CONCLUSION

The present state of the economy and the needs of our servicemen will not allow the aforementioned to  continue. Government agencies are now hard pressed to insure the most  “Bang for the Buck”. It is in the long term interests of the politician, the DOD, the VA and astute contractors to assist in that endeavor. 

(1)The only way to achieve such an objective is through sound technical, cost and schedule contract definition via an iterative process of baseline management and control.

https://www.smalltofeds.com/2009/08/contract-baseline-management-in-small.html

(2)  Government civil servants must be trained to report systemic poor service up the line in lieu of hiding bad news from superiors or developing workarounds.  This must be an expectation built into their job description and they must be rewarded and promoted for meeting that requirement just as they are for the other requirements of their jobs. 

The first whistle to be blown must be to the boss when the service issue occurs, not to the press a year from the occurrence. 

Government service contracting improvement in DOD and the Veterans Administration as well as better management of federal government contractors are mandatory. There are solutions, but they involve accountability, discipline and change.

Our returning soldiers and those who have served before deserve better.