According to Strategy Page the defense department's contract with Lockheed Martin to build the F-22 fighter has a disturbing clause. If the military stops buying F-22s, we the taxpayers have to pay Lockheed Martin $147 million. Why would the government enter into such a contract in the first place? Apparently Congress wanted to "encourage building more F-22s." So they decided to penalize the country if we changed our minds later about how many we needed.
Like most on the right, I favor a strong military and support spending on advanced weapon systems. But that doesn't mean we need to be stupid and wasteful about it, as is all too often the case.
This is a multi-billion dollar program. $147M is chickenfeed, less than the cost of a single A/C.
ReplyDeleteThe article can't be right, unless it meant to say $147M per aircraft and even then I doubt it.
What is very strange about this claim is that a flat figure is contrary to standard termination for convenience defense contract clauses, where termination costs are put into a proposal to the contracting officer and then negotiated. I've never heard of a DoD contract that had a termination for convenience cost established in advance. It's contrary to basic federal procurement rules and practices. See this discussion.