Here’s a quote from Henry Durham, a former production manager at Marietta George for Lockheed. He reported:
When planes arrive at the flight line of the assembly line they’re supposed to be virtually complete except for a few engineering changes and normal radar and electronic equipment installation, but I noticed these serious deficiencies. These weren’t just minor deficiencies; these aircraft were missing thousands and thousands of parts when the Lockheed records showed the aircraft to be virtually complete.
At first I thought it was an error in the papers. Then I initiated an audit. I found it was true. I was amazed. But I still thought there was some kind of mistake going on. Later I figured out what was happening was the company was consciously indicating through the inspection records that they had done the work so that they could receive credit payment from the Air Force when actually they weren’t on schedule and hadn’t done the work.
That was from Seymour Melman’s excellent 1974 book, “The Permanent War Economy.”
Always be careful of the negative unintended consequences of policies. I think something very similar continues to happen in defense acquisition. For example, deliveries of the KC-46 were halted because there was loose tools and foreign object debris, not to mention electrical system problems and deficiencies in the boom.
The Navy is also notorious for accepting delivery of unfinished ships:
The Pentagon’s complex acquisition system sometimes may even encourage shoddy work, critics say.
Some contracts require shipyards only to do their best to deliver a quality product on schedule — but not to actually do it.
In many cases, shipyards first get paid to build ships and then often get paid again to fix things on the ships that should not have been broken, analysts say.
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