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Defective Parts Hobble 21 "Major" NASA, DoD Aerospace Programs

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CONTRACTORS IN SPACE
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The Pentagon's "missile defense, satellite programs and top NASA projects have 'struggled' with the 'widespread' introduction of bad parts, mostly in electronics, at various stages of development," according to a Government Accountability Office assessment released yesterday.

The report cites 21 "major aerospace programs" involving contractors Lockheed Martin Corp., Boeing Co., Northrop Grumman Corp., Raytheon Co., and Alliant Techsystems Inc. as having been delayed and/or over budget due to widespread "parts quality problems."

As Bloomberg points out, the single most expensive program has been Lockheed Martin's Advanced Extremely High Frequency communications satellite, the launch of which has been delayed for roughly two years and is at least $250 million over budget due to defective electronics.

Lockheed Martin agreed last month to pay $19 million to correct the flaws, and company spokesman Stephen Tatum acknowledged the quality issue in an e-mail to Bloomberg, calling it "a problem that's become pervasive across the space industry."

But, as Air Force Chief of Staff Gen. Norton Schwartz told a room filled with defense executives back in February, "Don’t blow smoke up my ass. There’s no time for it. There’s no patience for it. OK?”

"If industry makes a commitment, you will have to deliver," Schwartz continued. "There will be less tolerance … for not delivering.”

Beyond "not delivering," defense contractors were taken to task in April by the GAO for introducing counterfeit components into the DoD's supply chain.

Here are just a few examples of what the GAO found:

ARMY: Seatbelt clasps: Seatbelt parts were made from a grade of aluminum that was inferior to that specified in DOD's requirements. The parts were found to be deficient when the seatbelts were accidentally dropped and they broke.

NAVY: Routers: The Navy, as well as other DOD and government agencies, purchased counterfeit network components -- including routers -- that had high failure rates and the potential to shut down entire networks. A 2-year FBI criminal investigation led to 10 convictions and $1.7 million in restitution.

AIR FORCE: Microprocessor: The Air Force needed microprocessors that were no longer produced by the original manufacturer for its F-15 flight-control computer. These microprocessors were procured from a broker and F-15 technicians noticed additional markings on the microprocessor and character spacing inconsistent with the original part. A total of four counterfeit microprocessors were found and as a result were not installed on the F-15's operational flight control computers.

Global Positioning System: Oscillators used for navigation on over 4,000 Air Force and Navy systems experienced a high failure rate and failed a retest. These oscillators were provided by a supplier that Global Positioning System engineers had previously disapproved as a supply source. Air Force officials stated that while the failure would not cause a safety-of-flight issue, it could prevent some unmanned systems from returning from their missions.

In 2009, Chris Edwards of the Cato Institute wrote that defense contractors "exploit [the] parochial self-interest of legislators, and they skillfully spread out research and production work across many states and districts to maximize congressional support."

Edwards pointed to the "$70 billion F/A-22 fighter program" as an example.

"The Washington Post noted in 2005 that the F/A-22 'is an economic engine, with 1,000 suppliers -- and many jobs -- in 42 states guaranteeing solid support in Congress," said Edwards. "In 2009, Defense Secretary Robert Gates wanted to cancel further orders of the aircraft, but hundreds of lawmakers and state governors lobbied President Obama to keep the production lines going to preserve the 95,000 related jobs."

It appears that fixing the system will require a joint effort between the Pentagon and the defense contractors on which America's military (and space program) rely.

As Norton Schwartz
told The Hill, "I’m ensuring the Air Force is doing its part. Industry has to do better.”
POSITION:  No positions in stocks mentioned.

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