Changing the way we price weapons could cut billions, but will the entrenched Department of Defense bureaucracy allow it? "Forget about what it does cost or what it will cost, we're talking about what it should cost," said Shay Assad.
With that bold quote, Department of Defense (DoD) Director of Defense Pricing Shay Assad, claimed in an interview last week to truly change the DoD's traditional way of pricing weapons - historical costs that have allowed weapons to be grossly priced for years.
Last week, I wrote a column about a change in the pricing of weapon systems in the DoD from using historical costs (what it did cost) to determine prices, to using industrial engineering standards to find out what weapons "should cost," without all the fraud and fat from past weapons. To refresh on what I was talking about, here are the main issues from last week's column:
For decades, the DoD has decided what each new weapon will cost by looking at what historically similar weapons "did cost" in the past. So, if you decide to buy a new fighter plane, you look at what the previous plane cost as the baseline, and then add on more for all the new advances and gadgets you plan to put on the new plane.