The cost of key US weapons like artillery shells for Ukraine is soaring

• The US Army estimated the costs to maintain the guided Excalibur shell nearly doubled in a decade.
• Excalibur was one of many crucial weapons that saw big jumps in the costs to operate.
• The cost to maintain a weapon is more than twice the cost to build it, a GAO official said.

Maintenance costs have risen for many US weapons, including some crucial systems by Ukraine or likely to be deployed in a conflict with China.

In particular, operating and support costs for the M982 Excalibur — a GPS-guided 155-mm artillery shell supplied to Ukraine — nearly doubled between 2011 and 2022 to roughly $100,000 per shell, according to a Government Accountability Office report.

Such problems are baked into the military procurement system. The sticker price of a weapon, such as a jet fighter, only reflects a fraction of what it will cost to maintain that weapon over its lifetime. "Operating and support (O&S) costs historically account for approximately 70 percent of a weapon system's total life-cycle cost, which is the cost to operate and sustain the system from initial operations through the end of its life," GAO explained. "Included in the costs are repair parts, depot and field maintenance, contract services, engineering support, and personnel, among other things."

"On average, DOD spends more than twice as much to operate and support a weapon system than it spends to develop and build it," Diana Maurer, director of GAO's defense capability and management team, told Business Insider.

Even to accurately assess these costs can be a problem. The Department of Defense was required to report on 25 Army, Navy and Air Force programs. However, GAO only received adequate data for 16 of them. Of those, seven had critical O&S increases. This meant a weapon either experienced a 25% increase in operating and support costs over cost estimates in prior years, or at least a 50% increase since the weapon was originally fielded.

The Army estimated that O&S costs for the Excalibur — first deployed in 2007 — had soared 183% since a baseline estimate in 2011. The Army blamed the increase on two factors: buying more shells than originally anticipated — which in turn raised maintenance costs — and hardware and software upgrades such as "advanced positioning and navigation technologies." The cost for Excalibur has been estimated at around $100,000 per round, compared to about $3,000 for an unguided 155-mm shell.

Interestingly, GAO declined to specify the number of Excalibur shells acquired because "DOD deemed the information sensitive." The US began supplying Ukraine with Excalibur rounds in fall of 2022, and Ukrainian gunners were quite pleased with the precision-guided shells that could hit vital Russian targets — such as headquarters and supply dumps — from 25 miles away. Massive Russian GPS jamming may now have reduced the accuracy of GPS-guided weapons such as Excalibur and HIMARS rockets, but these munitions did prove quite useful in disrupting Russian logistics, and command and control.

In addition to Excalibur, other weapons that experienced sharp rises in maintenance costs were the Navy's EA-18G Growler electronic warfare aircraft (up 219% since 2003), F/A-18 E/F Super Hornet fighter (179% since 2012) and the Navy Multiband Terminal satellite communications system (647% since 2012.) For the Army, the Common Remotely Operated Weapon Station registered a 335% increase since 2017, the Tactical Mission Command-Maneuver Control System up 464% since 2008, and the Warfighter Information Network-Tactical Increment 1, up 32% since 2007.

As any automobile owner knows, maintenance costs for a vehicle rise over time as aging components need to be replaced, and the price of those parts grows with inflation. And calculating what is a reasonable increase is tricky for military equipment. Sustainment reviews are a fairly new practice for the Department of Defense, and for older equipment — the F-22 first flew in 1997 — it can be hard to say that maintenance costs are higher than originally estimated decades ago.

"Frequency and intensity of use can become a factor over time, especially for aviation and naval platforms," Maurer noted.

Still, all this does raise the question of whether higher maintenance costs for US military equipment at least partially result from problems with design and manufacturing. "We don't know the specific extent of O&S cost growth due to design problems or poor sustainment management," Maurer said. "In some respects, those problems could lower O&S costs because systems cannot fly, operate, or sail as often as planned. Of course that also means a bad return on investment for the taxpayer. We definitely want to see good designs and good sustainment strategies."   

But going forward, these maintenance reports should provide clues as to whether a weapon is costing more to maintain than it should. "Over time, as DOD continues to issue these reviews, Congress and the public will have greater ability to hold the Pentagon accountable for the costs to operate weapon systems," Maurer said.

Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds an MA in political science from Rutgers Univ. Follow him on Twitter and LinkedIn.

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