May 16, 2008

Gift Horses

“Don’t look a gift horse in the mouth,” say the English, meaning that if someone makes you a present of a horse, you don’t show ingratitude by inspecting its teeth to see how old it is. It’s a free horse – you accept it with thanks.

“Don’t look a gift horse in the mouth,” say the English, meaning that if someone makes you a present of a horse, you don’t show ingratitude by inspecting its teeth to see how old it is. It’s a free horse – you accept it with thanks.

Although cavalry still survive in today’s armed forces, horses themselves tend only to be used for ceremonial purposes and Ministries of Defence are rarely offered real animals. But in the period following the end of the Cold War, there have been many occasions when nations building and modernising their militaries have been offered, and have accepted, used military equipment at little or no cost.

The usual human response to free stuff is to grab it. There are websites pointing you towards the many things you can get for free and few of us could deny that we get a buzz from acquiring something for an unexpectedly low price. This is harmless enough when it comes to cosmetics samples – you can always throw them away if they bring you out in a rash – but when bargain defence equipment is on offer, a little more care is needed. There are at least three questions that need to be thought about.
The first is how much will this cost? Donor nations are often willing to give away surplus military equipment at little or no cost, but this does not necessarily mean a cheap deal. The initial purchase price of military equipment is only part of the story. A far more meaningful way to measure and compare the costs of weapon systems is to use their whole life cost , which tries to measure, as the name suggests, the total cost that can be attributed to a system over its entire period of service. Whole life costs include factors like the costs of maintenance, running costs such as those of fuel and other consumables, the cost of system upgrades and the costs of training and retaining the personnel necessary to operate the equipment. Car owners will know that the price they pay in the showroom is only a fraction of the cost of owning the vehicle – fuel, servicing, taxation, insurance, driving lessons for the kids and so on all make the whole life cost a great deal higher. For some equipment types, older models – those more likely to be donated or offered cheaply – tend to be less reliable. This means both lower readiness and a higher maintenance and repair bill. The data is far from comprehensive, but studies by Rand have shown, for example, that the costs of operating and maintaining military aircraft increase by about 1-3%, once inflation has been accounted for, with each additional year of age.
The second question is can we support it? Because defence systems are so expensive, they will remain in service for many years. To take an extreme example, The US B-52 aircraft first entered service in 1955 and its current generation of airframe is still expected to be capable beyond 2040. For older, second hand equipment, consideration needs to be given as to whether the manufacturer will continue to support it. There is a wide range of issues here, such as whether the manufacturer will sustain a capability to carry out deep maintenance, whether spare parts and spare units to compensate for attrition losses will continue to be available, whether there will continue to be a secure source of supply for consumables such as ammunition, and whether system upgrades will be available. On this last point, for platform-based defence systems – aircraft, ships, armoured vehicles – the basic platform will often remain in service for many years, but be upgraded to remain relevant to current circumstances, perhaps with new command and control systems, new weapon fits or new propulsion systems: the B-52 in service today is thus an evolutionary development of the 1955 version. If a manufacturer is no longer prepared to support the upgrade of a weapon system – perhaps because the primary customer no longer uses it – it will soon begin to look obsolete .
The third question is do we need it? Most of us will have been dazzled by sales bargains only to bring home things we don’t really need or want. Offers of free or cheap defence equipment may be tempting at first sight but, because their whole life costs will divert money from elsewhere in the defence programme, defence planners need to justify these acquisitions in the context of the overall defence plan. A fundamental issue is whether they are cost effective solutions to existing and agreed requirements, or whether requirements need to be created in order to fit these apparently irresistible offers. If a requirement does exist, there is then a need for an objective analysis to judge how the performance of the system on offer compares with the details of our requirement.
None of this means that Ministries of Defence should not accept donated or cheap equipment. Defence resources are always limited and second-hand equipment may offer immediate and cost-effective solutions to capability requirements. But these options are not always as attractive as they may seem and decisions need to be taken with eyes wide open. Gift horses should not only be looked in the mouth, but given a full vetting .

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