The US Navy – Screwing The Taxpayers, And Defense Innovators

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Self-made millionaire Gregory Sancoff has spent a decade and $19 million building a highly unusual stealth boat. Called Ghost, it’s designed to be faster, more stable, and more fuel-efficient than anything currently in the U.S. Navy’s fleet, he says. “It’s such a smooth ride, you can sit there and drink your coffee going through six-foot swells,” he proudly told Bloomberg Businessweek in 2014.

But there’s a problem: The Pentagon doesn’t want Sancoff’s boat—and also won’t let him sell it abroad.

Source:  The Feds Won’t Buy this $19 Million Stealth Boat – Or Let It Be Sold Abroad  |  Bloomberg

A little background is necessary here – Gregory Sancoff is a self-made millionaire who spent some of his own fortune building a stealth boat for the U.S. Navy.  The Navy has chosen not to purchase Sancoff’s “Ghost” boat.  That is fine… except, the Navy has deemed the technology too classified to allow him to sell it anywhere else.  How does this make any sense, if he developed the boat all on his own, without any government funding or assistance?

Apparently, this all happened because he patented his invention, and tried to sell it to the Navy.  The Navy was initially interested, but also served him with secrecy orders, and later placed his firm under watch of International Traffic in Arms Regulations (ITAR).  Though you would think he would have some legal recourse here, such action is made extremely difficult, as he is not a large-scale defense firm such as Lockheed, and does not have the same legal resources at his disposal.

The outlook for Juliet isn’t great. Last year, the U.S. patent office issued 95 secrecy orders—one for every 6,628 applications, as Joshua Brustein wrote in June. Most of those inventions were developed by large companies, specifically for the military or other government agencies. But as Brustein points out, the orders “are a different sort of ordeal for private inventors, about a dozen of whom file patent applications that are made secret by government mandate each year.” Inventors who break gag orders can lose their patent rights, or face fines or incarceration. And while some secrecy orders are reversed each year, others date back as far as the 1940s.

If Sancoff’s boat contains such sensitive technology that it cannot be sold abroad, why doesn’t the US Navy just buy his prototype from him?  They won’t need to contract his firm to build a fleet, but they can purchase the technology for use in other DARPA projects. $19 million is but a drop in the bucket of the Navy’s ~$380 billion dollar budget, after all.

Apparently, $19 million is too much to spare for a stealth boat, when you’ve already wasted $23 billion building three stealth destroyers, that have been watered down from their own original plans, and don’t even have close-in air defenses.

160421-N-YE579-005 ATLANTIC OCEAN (April 21, 2016) The future guided-missile destroyer USS Zumwalt (DDG 1000) transits the Atlantic Ocean during acceptance trials April 21, 2016 with the Navy's Board of Inspection and Survey (INSURV). The U.S. Navy accepted delivery of DDG 1000, the future guided-missile destroyer USS Zumwalt (DDG 1000) May 20, 2016. Following a crew certification period and October commissioning ceremony in Baltimore, Zumwalt will transit to its homeport in San Diego for a Post Delivery Availability and Mission Systems Activation. DDG 1000 is the lead ship of the Zumwalt-class destroyers, next-generation, multi-mission surface combatants, tailored for land attack and littoral dominance. (U.S. Navy/Released)

The Zumwalt class stealth destroyer was originally contracted in the 1990’s to eventually replace the Navy’s aging Arleigh Burke class destroyers.  Similar to so many monstrous defense projects, the Zumwalt was plagued with delays, cost overruns, and subsequent cost cutting measures that led to a far less capable destroyer than was originally planned, and the buy was correspondingly cut from 32 copies to just three.  With questionable self-defense capabilities, this destroyer cannot be deployed to any hotspot without external support, as a ship with similar defenses was recently destroyed by very unsophisticated weapons.  Originally expect to run at ~$300 million a copy, the smaller buy and higher costs pushed the cost of the remaining three to about $8 billion apiece.

So, just to clarify – the US Navy can afford to waste $23 billion on a stealth destroyer of questionable efficacy, but can’t afford to spend less than 0.001% of that cost on a stealth boat prototype, even if solely for the sake of using the technology in future designs.  Is it any wonder why even our unpopular Congressional leaders are telling the military to stop buying equipment it doesn’t need?  Perhaps the DoD should be more supportive of innovators who spend their own dime to develop new technologies, instead of screwing them over every step of the way, and instead choosing to continue wasting taxpayer dollars on flawed designs?

The defense procurement process is beyond flawed; it is in need of a complete overhaul.  The Pentagon needs to focus on building out more prototypes, and testing them in the field before committing to buying large numbers of untested designs.  Smaller defense projects with room for expansion will leave the DoD more nimble, and more able to quickly adapt to new challenges posed by differing adversaries with increasingly differing tactics.  And, one of the best ways to do that is to encourage innovators like Sancoff, who are willing to invest their own resources to build prototypes, not discourage them. 

But look on the bright side – the DoD won’t spend $19 million on a stealth boat prototype, instead choosing to waste $23 billion on three neutered stealth destroyers… but at least its not a $1.5 TRILLION dollar project that is “too big to fail”, so it must proceed in its screwing of the taxpayer.