“Nobody spends somebody else’s money as carefully as he spends his own.” - Milton Friedman
The U.S. put $533 million into a General Dynamics artillery-shell operation for Ukraine. So far, it has delivered zero usable shells.
THE SIGNAL
On May 29, 2024, General Dynamics opened its new plant in Mesquite, TX. It was the General Dynamics Ordnance and Tactical Systems consisting of the Universal Artillery Projectile Lines (UAPL).
But 2 years later the Pentagon’s Inspector General released a report that the site had produced zero usable 155mm shell parts.
THE FAILURE POINT
With zero parts being produced, money keep flowing in. General Dynamics committed $200 million of its own money to get things moving. Then there was a work stoppage for 8 months.
The Mesquite Tx site opened with a celebration, then 2 years of no production, but more contracts and more money poured in
The failure point is money going to a site with no output and a system that failed to stop this. I watch a lot of air disaster investigations and rarely is a plane crash one issue. This is no different, Congress dropped no-bid contracts, and the Army award contracts without proof the equipment could produce a single shell.
The warning signs were there.
SIGNAL WITHIN THE SIGNAL
The lesson is a breakdown of pass/fail gates, starting with a failed first article test (April 2024), missed second-line deadline (April 2025). Then in December of 2025, the Army paid $26.3 million in “progress payments,” to a company that failed to produce any parts.
Worth checking where your own team sits on that same gap before assuming it's someone else's problem.
Score your gap →
BEHAVIOR UNDER PRESSURE
How did people behave when things got difficult? I call it Signal Compression, the truth gets diluted as it travels up the leadership chain.
General Dynamics CEO, Phebe Novakovic, in April 2024 claimed, “rapidly increasing ammunition production.” Then again in July another statement, “the line was running and producing as planned.”
But 6 former workers disputed this. They told ProPublica, the line was producing nothing.
By September, the Army’s acquisition chief called the delays only weeks, not months behind.
This is a pressure induced narrowing perception of reality.
SYSTEM DRIVER - MOS
As a consultant, money is tied to deliverables. When we begin an engagement, you track performance and establish milestones.
But here, General Dynamics was allowed to begin work without finalized contracts. There was no verification the three lines could produce the shells. Where were the milestones to show periodic performance?
In my business, money is always tied to the deliverable. So, this was a structural problem, a Management Operating System issue, paying for activity but not output. The system is rewarding the wrong output.
LEADER DRIVER - INTERNAL OPERATING SYSTEM (IOS) - REGULATE
It’s common to not want to hear bad news. But in manufacturing it’s constantly bad news, problems can develop daily, at any time. But a good leader deals calmly with this. Where was the escalation trigger? One that should have started an immediate audit or an investigation as to what was going on.
Ive seen this before, organizations make acting more dangerous for your career than waiting. If you escalate you own it. Even though right in front of them was the failure.
IF YOU DO ONE THING TODAY
Look into every active capital project that is delayed or struggling with first pass yield. Identify, the named person who is accountable to sign-off before the next dollar is paid. Not someone inside the program, an outside that can say no.
FINAL SIGNAL
Inaction is a decision. We see this when the personal risk of acting is greater than the personal risk of waiting.
CTA
Find out where your gap is before it costs you. Score your own gap here, takes about three minutes.
mosei.org/gap-diagnostic.html
SOURCES
ProPublica, “Fiasco in the Factory: Taxpayers Funded a $533 Million Artillery Plant That Made Nothing,” Jesse Coburn, August 12, 2026
DOD Office of Inspector General report DOWIG-2026-095, July 2026