It started in 1994, as a $70 million contract to build a small hybrid submarine for delivering Navy SEALS to target destinations [aka, Advanced SEAL Delivery System (ASDS)]. By May 2007, it has cost us taxpayers $885 million for a submarine that doesn't work.
According to a GAO report, responsibility for this expensive blunder rests with U.S. Navy officials, who failed to "effectively oversee the contracts" and "failed to hold the prime contractor [Northrop Grumman] accountable for results."
As Northrop Grumman kept missing deadlines and going over budget, Navy officials kept handing more money to the contractor. The big question: Why didn't the Navy sue the failing contractor and hire a new one?
I don't know, but events basically unfolded like this . . . . .
According to the GAO report, Northrop Grumman assumed responsibility for the ASDS contract in 1996. The program called for delivery of the first (presumably functioning) sub in July 1997.
Northrop Grumman failed to meet the deadline.
In August 2001, the Navy accepted the flawed submarine on condition that the contractor complete repairs and such within one year.
Northrop Grumman failed to fix the submarine.
In July 2003, the Navy accepted the sub "as is," relieving Northrop Grumman of responsibility for repairs. By then, we taxpayers had spent $340 million on the ASDS.
In October 2003, despite the contractor's failures, the Navy signed another contract with Northrop Grumman. Nearly 4 years and $900 million later, we taxpayers still don't have a fully functioning ASDS submarine.
This is not the first time Northrop Grumman performed poorly while under government contract:
"In 2003, Northrup Grumman settled for $80 million government fraud suits alleging the following: 1) that a Northrop subsidiary had overcharged the government for research and design work, and 2) that Northrop knowingly sold the Navy unmanned aerial vehicles that had defective parts."
The big question: Why does the Defense Department routinely reward bad performance?
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