U.S. Military Defense Contractors Ripping Off Helpless Pentagon

A six-month investigation by 60 Minutes of CBS News found that military contractors had been fleecing the Pentagon and overpricing their missiles, artillery, warplanes, and warships to the detriment of the US weapons stockpile, Bill Whitaker reported.

Photo Insert: The troubled F-35 Joint Strike Fighter program, which was seven years behind schedule and cost more than $90 billion over the original estimate, could end up costing taxpayers $1.3 trillion.

No one understands the problem better than Shay Assad, now retired after four decades of negotiating weapons deals.

In the 1990s, he was executive vice president and chief contract negotiator for defense giant Raytheon but then switched sides, serving the administrations of Presidents George W. Bush, Barack Obama, and Donald Trump.

Assad became Pentagon’s most senior contract negotiator and he confirmed that the Pentagon overpays for almost everything. He said an oil pressure switch with cables that NASA buys costs $328 but Pentagon pays $10,000 for its oil switch.

In one case, Assad’s team found that the Pentagon was being asked to fork over $119 million for parts that cost only $28 million.

The roots of the problem can be traced to 1993, when the Pentagon, looking to cut costs, urged defense companies to merge. Fifty-one major contractors consolidated to five giants, said Assad and the Pentagon cut 130,000 employees whose jobs were to negotiate and oversee defense contracts.

The Pentagon granted companies unprecedented leeway to monitor themselves.

Thus, the prices of almost everything rose. In 1991, a shoulder-fired Stinger missile cost $25,000. With Raytheon now the sole supplier, it costs more than $400,000 apiece.

Retired US Air Force Gen. Chris Bogdan said that he was tapped to take the reins of the troubled F-35 Joint Strike Fighter program, which was seven years behind schedule and cost more than $90 billion over the original estimate but expenses soared and could end up costing taxpayers $1.3 trillion.

Worse, defense contractors are now monopolies and the US government no longer controls the information behind military weapons systems.

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