Acquisition cost data over the past 60 years show that the U.S. defense community is on a path to bankruptcy. Growth rates for unit costs of major systems are greater than those for total defense procurement, total defense spending, and the gross domestic product (GDP). If these historic trends are not addressed, the U.S. military will cease being a significant influence in world events because of shrinking force structure. Past acquisition reforms have been unable to change the trend because they focused on the problem's symptoms (e.g., schedule slippages and cost growth), not its causes.
In 1982 then-Martin Marietta Aerospace executive Norman R. Augustine showed that unit costs of military equipment had grown at exponential rates and had increased much more rapidly than defense budgets.1 Growth rates over the last 30 years for defense system unit costs, the U.S. GDP, the DOD budget, and the department's procurement accounts are remarkably similar to those used by Augustine.