The Pentagon Keeps Losing Equipment and Buying Stuff It Doesn’t Need

Keeping track of inventory is hard for any large organization. Workers misplace items, administrators fill out the wrong paperwork, and things just go missing. But losing $85 million in inventory? That’s a job for the U.S. military.

In 2023, the Government Accountability Office revealed that a government contractor had lost 2 million spare parts for the F-35 fighter jet, together worth tens of millions of dollars, since 2018. The Department of Defense followed up on only 20,000 of those parts. Military officials don’t know how many F-35 spare parts exist in total, paid for by American taxpayers but spread out at contractor warehouses around the world.

The F-35 spare parts debacle is just one part of a budget-busting pattern of inventory failures. In 2018, the U.S. Navy found a warehouse in Jacksonville, Florida, full of parts for the F-14 Tomcat, the now-obsolete fighter jet made famous in Top Gun, and for the P-8 Poseidon and P-3 Orion, two submarine-hunting aircraft. The parts were worth $126 million. Had Navy auditors not found them, taxpayers might have ended up paying twice for the same part.

“Not only did we not know that the parts existed, we didn’t even know the warehouse existed,” then–Secretary of the Navy Thomas Modly told reporters the following year. “When they brought those parts into the inventory system, within a couple of weeks there were like $20 million in requisitions on those parts for aircraft that were down because we didn’t know we had the parts of the inventory.”

The 1985 aircraft carrier scandal continued this pattern of failure to keep track of valuable materiel. After a group of smugglers was caught stealing F-14 parts to sell to Iran, the Pentagon ran an audit on the spare parts stored on aircraft carriers. Auditors found the Navy had lost track of $394 million in parts between 1984 and 1985. Not to worry! It turns out only about $7 million in parts had been stolen by the gunrunners, and the remaining $387 million were misidentified or misplaced.

Some of these losses are simple bureaucratic inefficiency. “It’s a good example of the right hand not knowing what the left hand is doing,” says Scott Amey, a lawyer for the nonprofit Project on Government Oversight. In other cases, the government and contractors don’t seem to even want to keep good track of their inventory. “Sometimes it’s easier to just buy something, especially near the end of the fiscal year in August or September, to drive the budget up than to use something that you already have,” Amey adds.

Military Spending as a Stand-Alone Strategy

In addition to losing or misplacing expensive parts, the Army has been letting them go bad, according to a March 2024 report by the Pentagon’s Office of Inspector General. When inspectors visited warehouses for tanks and other armored vehicles in 2022 and 2023, they found $1.31 billion of equipment in “critical” condition. Tank treads were strewn about on the grass. Transmissions were sitting outside in the humid air. A group of engines was visibly rusted, and a manager was “unsure whether any of the engines were in a condition that they could still be repaired.”

“This world in arms is not spending money alone,” then–President Dwight D. Eisenhower famously said in 1953. “It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.” Some of that sweat doesn’t even turn into usable guns, warships, and rockets. Much of it flows into the pockets of military contractors, who overcharge and underdeliver. Or it disappears into thin air, left to rot in a warehouse until it is unceremoniously disposed of. Sometimes Congress even forces the armed services to keep maintaining gear they don’t want.

Between dysfunctional bureaucracy and bad incentives, a lot of military spending is simply wasted.

“We have a defense budget that is disconnected from a coherent grand strategy,” says Dan Caldwell, a public policy adviser at Defense Priorities, a nonprofit that advocates a more restrained military policy. “A lot of policymakers and a lot of individuals in the national security think tank community think that a topline spending number—whether it’s a total spending number or a percentage of GDP—they think that in and of itself is a strategy.”

Whether or not the United States needs more military power, you can’t count on getting that power just by throwing more money into the Pentagon. Manufacturers are facing bottlenecks in the production of key munitions, which are being burned up in Ukraine and the Middle East faster than they can be replaced. These bottlenecks are related to shortages of labor and physical resources that money can’t solve.

Pouring more cash into the military budget may be like pumping water into a clogged pipe. Instead of getting through, the fluid leaks out of places it shouldn’t. While the U.S. military runs short of weapons it would actually need to win a war, the Pentagon has found itself buying things it doesn’t need.

The Defense Department has infamously failed every single audit Congress has ever mandated for it. Nobody even knows where all of the money is going. All the while, officials continue to insist they’re making progress. “We keep getting better and better at it,” deputy Pentagon press secretary Sabrina Singh said at a 2023 news conference, after the sixth failed audit.

The Afghanistan Spending Quagmire

Perhaps the most infamous cases of waste occurred in Afghanistan, where the United States spent 20 years trying to prop up a friendly Afghan government only to have Taliban rebels sweep the capital in a lightning-quick August 2021 offensive. Although the U.S. military extracted all of its own gear, it left $7.12 billion of American-provided equipment with the doomed Afghan army; it soon fell into the Taliban’s hands. Images of Taliban fighters riding around with captured vehicles became a symbol of American failure.

But even before the Taliban takeover, the U.S. Special Inspector General for Afghanistan Reconstruction (SIGAR), a watchdog created in 2008, had spent years documenting the incompetence and disorganization of the war effort. In February 2021, as U.S. forces were working on pulling out of the country, SIGAR released a damning summary of its findings.

Out of the $7.8 billion in U.S.-funded “capital assets” that SIGAR reviewed, $2.4 billion were either abandoned, misused, or falling apart. The majority of these projects had been funded by the Defense Department, with smaller contributions from the U.S. Agency for International Development, the State Department, and the Overseas Private Investment Corporation, a government agency that encourages American investment in developing countries.

In other words, even if the United States had won the war, a huge portion of the money spent on the war would not have made any difference for victory.

For example, the military spent $25 million for a new headquarters in Helmand, Afghanistan—and kept construction going even after U.S. troops were leaving the province.

In 2009, then-President Barack Obama announced a surge of troops across Afghanistan, including 11,000 Marines sent to Helmand. Although the surge was supposed to be a temporary measure, with the Marines scheduled to leave Helmand in July 2011, “the military quietly assumed troop strengths would be maintained for five years and had master plans for 10,” ProPublica later reported.

Pentagon planners designed a state-of-the-art headquarters for U.S. forces in Helmand, nicknamed “64k” because it was 64,000 square feet. The completion date was set for January 2012, after the Marines were supposed to leave.

Commanders on the ground realized what a waste 64k would be. Two Army generals and a Marine general all requested permission to stop construction, arguing the current plywood headquarters in Helmand was just fine. They were rebuffed by Maj. Gen. Peter Vangjel, then the deputy commander of Army forces in the Middle East and Central Asia. He wasn’t thinking of military needs—just the military budget. Congress had budgeted money for 64k, and getting permission to do something else with the cash would require congressional approval, so “reprogramming it for a later year is not prudent,” Vangjel wrote in a memo, later published in a SIGAR report.

The military broke ground for 64k in May 2011, only a few months before the troops were scheduled to leave. Construction continued, over budget and behind schedule, as the Marine base emptied out. In April 2013, the building was completed—and the Marines decided not to use it. When SIGAR inspectors visited a few months later, they found a fancy, empty building. The furniture still had plastic wrap all over it.

“They did end up building a great building. It just wasn’t the right size and scope,” says a federal oversight official familiar with the project, who spoke to Reason on condition of anonymity.

The 64k building became a symbol of the war’s economic wastefulness. “A number of generals came up to me the last time I was in Afghanistan and said ‘Please, look at this,'” said SIGAR head John F. Sopko in a 2013 interview with C-SPAN. “This is indicative of the problem of military construction. Once it starts, it never stops.”

The worst return on investment came from aircraft. The Defense Department purchased 20 used Italian transport planes for the Afghan army in 2008, at a cost of $549 million. Soon after, Afghan air crews discovered severe issues with the aircrafts’ maintenance and performance. The U.S. military flew four of the planes back to Europe and sold the remaining 16 for scrap in Afghanistan, earning back just $40,257.

The problems with this deal should have been obvious from the beginning. Alenia, the company that sold the used planes, claimed to have warehouses full of spare parts, but no one was able to verify the contents, an official told SIGAR. The planes themselves had nasty-looking corrosion—or “exfoliation,” as the Air Force put it—on their wings.

An official from the State Department told the military to “run as far away from Alenia as you possibly can,” according to a SIGAR follow-up report. The military went ahead with the contract anyway. The problem, again, was the use-it-or-lose-it nature of the military budget. The fiscal year was ending in September 2008, and any funds for the planes that weren’t spent would expire. “Due to the compressed time schedule to get the contract awarded, a lot of details were ‘taken on faith'” from Alenia, an official later told SIGAR.

One of the Air Force officials involved in the debacle later went on to work for Alenia, which SIGAR called a “clear conflict of interest.” (The FBI worked with SIGAR and other agencies to investigate Alenia and the Air Force official. The Justice Department declined to prosecute the case.) The Defense Department denied SIGAR’s conclusions, claiming the planes were rushed to meet “an urgent operational requirement” for the Afghan army.

Another problem with military spending in Afghanistan was a tendency to ignore local needs. “A lot of times, it was not taking the local context into account,” the federal oversight official says. “You hear what you want to hear, not necessarily what was said.”

The Little Crappy Ship

Like foreign military advisers foisting equipment on Afghan troops the Afghans neither needed nor could use, Congress has pushed the U.S. military to take on more equipment than it asks for. For the past several years, the Navy has asked for funds for a certain number of ships—and Congress has budgeted an even larger number. In March 2024, the Senate Appropriations Committee bragged that it gave the Navy $732 million more in shipbuilding money than it requested.

Littoral combat ships have been a particular fiasco. In the early 2000s, the Navy promised to create small, fast-moving warships that could easily be retrofitted for different kinds of missions in coastal waters. Admiral Vernon Clark, the spiritual father of the project, compared his vision to a space fighter from Star Wars “that’s got R2-D2 in it.” Instead, the final results were nicknamed the “Little Crappy Ship.”

Originally estimated to cost $220 million each, the ships ended up costing half a billion dollars apiece—and couldn’t even sail right. The gears on the engine transmission were flawed, causing ships to stall in the water. (One of them, the USS Milwaukee, broke down on its way out of the shipyard in 2015.) Lockheed Martin, the ship’s manufacturer, spent years haggling over the cost of overhauling the transmission.

Nor was the littoral combat ship very good at fighting. Putting it more delicately, a Pentagon report said the ships would be “challenged in a contested environment.”

The Navy spent 15 years and $700 million trying to build a minisubmarine that could be towed behind the littoral combat ship to find naval mines, then abandoned the project. Similarly, the littoral combat ship was supposed to have a towed sonar probe to find submarines, but the ship’s engines were so loud it drowned out the sonar signals. That technology, too, was shelved.

Instead of a ship that could have its weapons swapped out like Lego bricks at a moment’s notice, as the admirals had imagined, the Navy ended up with a ship that wasn’t very good at anything. It decided to cut its losses. In 2017, the Pentagon requested funding for just one more littoral combat ship, after which the shipyards would be closed down. The Navy would begin developing a new frigate, the Constellation class, instead.

But there was too much contractor money—and too many contractor jobs—tied up in the Little Crappy Ship. Sen. Tammy Baldwin (D–Wis.) wrote a letter to President Donald Trump protesting that 1,850 shipyard workers in Wisconsin risked being laid off. She emphasized her and Trump’s “shared goals” to “revitalize American manufacturing, strengthen the defense industrial base, and preserve American jobs, especially in the Midwest.”

Those concerns swayed the Trump administration, which edited the Navy budget to add a second $500 million ship. “Maintaining the industrial base was really the sole consideration,” a source told Defense News. It didn’t matter whether the money was buying usable equipment. What mattered was the factories kept running.

“That’s like saying you need to keep eating junk food so maybe one day you can eat vegetables. It’s an absurd argument,” argues Caldwell of Defense Priorities. “The people that work in shipyards, and the capacity, the tools, the equipment—there is high demand for all that stuff. If they weren’t building the LCS, there would still be work for them to do.”

In 2020, the Navy signed a contract with Fincantieri Marinette Marine, the manufacturer of the littoral combat ship, for a new Constellation-class frigate. Then the military brass started trying to retire the littoral combat ship, a decade ahead of schedule. Keeping the ships would have made the whole project even more wasteful. The Navy estimated in 2022 it would cost $4.3 billion to bring littoral combat ships up to speed, not counting the cost of a new antisubmarine system.

Admiral John Gumbleton asked reporters to think about the opportunity cost, since the resources for maintaining littoral combat ships could have gone into the new frigates. “We need a capable lethal-ready Navy more than we need a larger Navy that’s less capable, less lethal, and less ready,” then–Chief of Naval Operations Michael Gilday told a congressional committee.

Again, members of Congress from shipbuilding states wouldn’t have that. Rep. John Rutherford (R–Fla.) took calls from military contractors and meetings with Florida officials, then introduced an amendment forbidding the Navy from retiring any littoral combat ships early. After a bit of haggling, Congress reluctantly allowed the Navy to decommission four littoral combat ships out of the nine that were originally chosen for early retirement.

The USS Milwaukee was retired in September 2023, fewer than 10 years after its failed maiden voyage. It had deployed twice to patrol the Caribbean Sea. The Navy held a small ceremony to celebrate the Milwaukee‘s achievements over its life span: Seizing $30 million of “suspected cocaine” and arresting three suspected smugglers. That same month, the USS Little Rock was decommissioned after less than six years of service. That ship had seized $127 million of cocaine.

“Every problem with our defense budget ultimately flows from the fact that we are trying to pursue an American grand strategy of primacy in a world where we are facing increasing constraints,” says Caldwell. “That ultimately leads us to try and build weapon systems like the [littoral combat ship] that try to either do too much or too little and are not suited to the real threats that we face.”

He adds that the military contractors are the primary “political constituency in parts of the country,” leading to a “self-licking ice cream cone.”

In other words, one reason the United States government won’t give up trying to dominate the entire world is because cutting military contractor jobs is just bad politics. American politicians use preparations for war as a jobs program. Those goals have forced the military to act as jack of all trades, master of none. Those bad political incentives are hurting genuine military readiness.

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