Pentagon Sees $25-Billion Increase in Weapons Costs

The Pentagon’s 84 biggest weapons programs will cost $25 billion more over their expected lifetimes than had been estimated a year ago, the Defense Department said Tuesday in an annual report on its major weapons systems.

The report said the figure represents an increase of 3.4% over last year’s estimate, primarily because of larger weapons orders. The orders show increases of 284 airplanes, 364 tanks and tracked vehicles, 19 ships and five satellites.

Other price-raising factors cited by the study include changes in weapons performance requirements and the common practice of stretching out purchases over several years more than originally planned.

The report, reflecting estimates as of Dec. 31, 1984, also showed that the advanced tactical fighter, which the Air Force intends to use as its next-generation fighter plane, will cost about $15.2 billion in research and development alone.

The airplane is not expected to join the Air Force inventory until the late 1990s. According to the report, 12 research and development models will be built. Because the cost estimate for the aircraft has just crossed the “major” weapons threshold, it was included in the annual report for the first time.

The report reflects the total costs--$750.7 billion--of weapons that the Pentagon considers “major” under congressional guidelines. That designation is given to weapons with expected total purchase prices of at least $1 billion or research and development costs of at least $200 million.

The study did not deal with smaller weapons or such Pentagon operations costs as fuel, salaries and personnel benefits. It also did not include the costs of nuclear warheads and other nuclear hardware that is covered in the separate Energy Department budget.

The report, delivered to Congress over the weekend, was made public by the Pentagon on Tuesday.

The increase of 3.4% shows a jump in the rate of growth, which was estimated a year ago to have gone up 1.9%. In December, 1982, the report showed a drop of 3.3% in the expected lifetime of the weapons.

However, the figures measuring the same growth in December, 1981, at the end of the first year of President Reagan’s defense buildup, showed an overall increase of 33.6% in the prices of the major weapons. In 1981, the cost of the major weapons increased $114.5 billion from the previous year’s estimate of $340.3 billion.

A Congressional Budget Office account, which deletes the impact of inflation and the cost increases stemming from growth in the order of an individual weapon, indicates that the Pentagon will spend 0.8% more for the weapons than it had expected a year ago.

Pentagon officials said that relatively low congressional figure is a better measure of the efficiency of Pentagon and defense contractor work, adding that it is evidence that the Defense Department has been able to stem cost overruns.

The survey represents the lifetime costs of such weapons as the MX missile, the B-1B bomber, the Trident 2 submarine, and the F-15 and F-16 fighters. According to the Pentagon, the MX--if 243 are built--will cost $21.6 billion. Reagan wants to deploy 100, using the rest for testing and spares, but Congress has cut sharply into his requests for MX funding, and proposals to limit deployment to about 50 missiles have gained support.

The 100 B-1s would cost $28 billion, the Trident 2 $16 billion, the F-15 $39 billion and the F-16 $56 billion.

Overall, $18 billion of the $25-billion increase in the last year was attributed to larger orders, the Pentagon said. In addition, design changes ordered by the Pentagon cost an additional $11 billion.