One of the reasons defense spending in the US is so high and why programs like the F-35 have gone $183 billion over original cost estimates, is because of the S

One of the reasons defense spending in the US is so high and why programs like the F-35 have gone $183 billion over original cost estimates, is because of the Shirky Principle. I’m convinced that earned value management (EV), which is a requirement of contractors to follow under the Federal Acquisition Regulations (FAR), is a very subtle form of regulatory capture that serves the needs of the managerial professional class over that of the warfighter, workers, and tax payers. EV, at its surface, appears to be a tool for the government to ensure contractors provide honest work and control costs. Because it’s essentially waterfall, it incentives raw task execution and disincentives managing risk, fixing bugs, and satisfying non-functional requirements. We have acquisition programs that follow the systems engineering process, with discrete execution steps of design, development, integration, etc. with people’s careers focused on fulfilling those stages of development. The later in this process an issue is discovered, the more expensive it is to fix [1]. The kicker is that a good manager, under EV, will work to exceed performance, get a task done ahead of schedule, and under budget. This manger has every reason to not solve bugs and to pass them on later in the process. There is no reason for anyone in this process to change it, because careers depend on it continuing to exist, and contractors, as institutions, really benefit from it. In the bad old days of defense contracting, contractors would seriously underbid contracts. As soon as they got the award, because they underbid everyone, the contractor would immediately send a series of change requests to increase the budget. The government has ways to eliminate this risk, such as hiring two contractors to do the same job, then drop a competitor who attempts the change request ramp. Though this is expensive. With EV, contractors get a ramp up and further contracts, without having to directly engage in shenanigans. EV incentivizes the development of brittle and incomplete solutions, like aircraft that give their pilots hypoxia and melt holes in the decks of carriers. The genius of EV is that contractors effectively get change requests and follow-on contracts, and everyone in the system can act honest and honestly say they are acting honest. What I would do instead is change these perverse incentives by amending the FAR by adding alternative oversight mechanisms, such as a knowledge point framework to develop risk modeling or use economic modeling such as cost-of-delay. The problem is that everyone benefits from the current system and you would need strong leadership by many in congress on an obscure issue. [1] https://deepsource.com/blog/exponential-cost-of-fixing-bugs https://deepsource.com/blog/exponential-cost-of-fixing-bugs