Later On

A blog written for those whose interests more or less match mine.

U.S. Procurement Won the Civil War, Today It Would Lose A War to China

leave a comment »

Matt Stoller writes at BIG:

Today’s issue is written by two government procurement experts (and readers of BIG). One is an anonymous currently practicing government contracting officer who has been doing acquisitions for ten years. The other is Lane Becker, who was formerly with the Technology Transformation Services at GSA, where he started and ran the 10x investment program ( Before that Lane started a couple of companies in Silicon Valley. These folks are really smart, you are in for a treat.

Their piece is on innovation and war in the 19th century and today, which as it turns out, are conceptually the same. What do the Confederacy, Union procurement, and Chinese development of their air force have in common? More than you think…

But first, my book is out today! Goliath: The Hundred Year War Between Monopoly Power and Democracy. Buy it, read it, and tell me what you think. The first excerpt is out in the American Prospect on one of the great villains of American history, Andrew Mellon. . .

U.S. Procurement Won the Civil War, It Would Lose A War to China

If it were not for a single unorthodox approach to contracting by the U.S. Navy in early 1861, the Confederate States of America would very likely have won the Civil War.

The story of how the Union kept Washington from falling into the hands of the Confederates by buying smarter is illuminating — as is the reason that such a purchase would be almost impossible to make in the United States today, given the level of dysfunction in our present-day defense contracting system.

At the beginning of the Civil War, the Union was able to successfully establish a naval blockade because the Southern states had few ships of their own. A blockade was critical to prevent cotton from flowing to Europe, allowing the South to strengthen its financial, military, and foreign policy position. But the Union’s blockade was tenuous. The U.S. Navy at the time was, according to the assessment of U.S. naval secretary Gideon Welles, “feeble, and in no condition for belligerent operations. Most of the vessels in commission were on foreign service; only three or four, and they were of inferior class, were available for active duty.”

The Confederacy’s naval secretary, Stephen Mallory, sought to take advantage of the Union’s naval weakness, and crafted a superior fighting ship to defeat the Union on the water. When the South took the Gosport Navy Yard in Portsmouth, Virginia, in April of 1861, the confederates salvaged the hull of the U.S.S. Merrimack, and Mallory ordered his men to rebuild the top half of the scuttled wooden ship with iron — a first for its time. As one historian noted, “Mallory understood that innovation and creativity would be his primary hope in the face of an overwhelming conventional force he could not match.”

Union spies inside the Confederacy sent a steady stream of information about the building of the “ironclad” northward. Union leaders realized that to maintain the blockade, they needed better ships. The Navy issued open advertisements and gave respondents 25 days to submit plans, but, “still hanging on to what they knew best,” the request was laden with requirements that severely limited the range of what could be offered in response while also ensuring the build cost would remain high (a situation that will sound strikingly familiar to anyone involved in government acquisitions today.)

The selection board received proposals for 16 designs and settled on two, but, worried that neither would actually float, asked the finalists to provide mathematical evidence of their ships’ viability. This request stumped the submitter of a design for the U.S.S. Galena, Cornelius Bushnell, until a chance encounter at The Willard Hotel in Washington D.C. with the owner of a major ironworks plant led him to a Swedish born engineer named John Ericsson. Ericsson did the calculations in a night, and then, offhandedly, proceeded to show Bushnell an entirely new design for an ironclad ship he had designed 10 years earlier.

Bushnell later said listening to Ericsson talk about building his ironclad “awoke [him] to the fact that salvation was in store for our Government and country.” Ericsson’s design had no masts, rigging, or sails whatsoever,  and was much smaller than similar fighting ships, more like a modern day submarine. Most importantly, it was made entirely of iron, not wood with iron plating, which meant it would be able to withstand a significantly greater attack.

Bushnell took the model directly to Secretary Welles. Impressed, Welles and Bushnell attempted to convince the more conservative naval officers on the selection board to approve this new design despite its deviations from their list of required features, ultimately enlisting President Lincoln to join them for their presentation.

Even with Lincoln’s endorsement, the design was rejected by the board as too radical. Undeterred, Bushnell convinced Ericsson to come to Washington to present to the board himself. After much debate, the board relented and allowed Ericsson to proceed, convinced by the fact that his $275,000 submission was by far the cheapest, and that he could build his ship in 100 days — the only proposal that would be finished by the time the Merrimack’s conversion into the C.S.S. Virginia would be completed.

On March 8th, 1862, the Confederate ironclad left port, headed to the northern side of Hampton Roads, Virginia, where the James River meets the Chesapeake Bay, and where the U.S. Army was stationed at Fortress Monroe with several wooden ships enforcing Lincoln’s blockade.

Panic set in. Should the blockade fall, as Secretary of War Edwin Stanton said to Lincoln, “it was not unlikely we shall have a shell or cannon-ball from one of her guns in the White House before we leave this room.” Fortunately, Ericsson had finished his ship, the U.S.S. Monitor, two weeks earlier. The crew of the Monitor sailed 51 hours straight to get to Hampton Roads, arriving six hours after the fighting had begun and several Union ships had already been lost.

The two ships were evenly matched and battled for several hours, but in the end, the Monitor prevailed, entirely because of Ericsson’s design. The classically ironclad design of the Virginia — the top half of the old Merrimack now covered in iron plating but the bottom still exposed wood — meant that, as the battle wore on, the Virginia used up so much ammunition that the ship began to lighten, eventually rising high enough in the water that it was about to expose its wooden underbelly to the all-iron Monitor. The Virginia steamed off before that could happen. The Union had won.

War without Competition

It is as true today as it was during the Civil War that bringing new ideas into old institutions is a daunting task. But whereas in 1861 it was difficult for someone like John Ericsson to get his idea for a new kind of ship into the hands of the U.S. Navy — requiring a combination of talent, connections, persistence, and sheer luck, all very American traits  — today it would be impossible.

That’s not to say that similar threats desperately in need of inventive responses don’t exist. They’re everywhere, whether it’s the Government Accountability Office (GAO) noting that every major weapons system is riddled with cybersecurity vulnerabilities that could neutralize them entirely, warnings from top level commanders that the military needs to adapt, or experts outright declaring that as things currently stand America will likely lose a war against “near-peer” rivals Russia or China. But we’ve professionalized and obfuscated the practice of government contracting to such a degree that it’s become nearly impossible to penetrate by normal industry, let alone dogged patriots like Ericsson. Eisenhower’s warnings about the military industrial complex 50 years ago have truly come to fruition.

Healthy competition encouraging new entrants and smaller players are critical to the successful development of any new technology. This is especially true for military technology, where historically it has been outsiders who bring the biggest changes, like Patrick Blackett essentially creating modern day operations research during World War II. The ironclad board in 1861 got 16 bids and awarded to three different companies, but that level of competition is unheard of for today’s major weapons systems, where 67% of major government defense contracts are now awarded to companies without any form of competition. . .

Continue reading.

Written by LeisureGuy

17 October 2019 at 10:59 am

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.