The Costs of the Iron Dome

The Iron Dome missile-defense system is not only a technological and military achievement, but also a victory over Israeli bureaucracy and red tape, writes Asaf Amsterdamsky.

al-monitor Israeli soldiers watch as an Iron Dome launcher fires an interceptor rocket near the southern city of Beersheba, Nov. 15, 2012. Photo by REUTERS/Baz Ratner.

Topics covered

missile shield, military, israel, gaza, defense

Nov 22, 2012

The Iron Dome battery was installed in the Gush Dan region [Tel Aviv metropolitan area] almost during injury time — pun intended. It is a fact that the battery averted human injury in Gush Dan only a short time after it was deployed. How was it possible to deploy the Iron Dome battery before the planned date of January 2013? Mainly, it seems, due to the cutting of bureaucratic corners.

A source in the defense industry tells us that more than 200 people worked around the clock, with a great deal of coffee and very little sleep. The workers included the following: engineers and production workers of Rafael Advanced Defense Systems, the major producer of the Iron Dome; radar-system workers of Elta; and employees of Rafael's sub-contractors — about 15-20 such people. Even Maf'at (Administration for the Development of Weapons and Technological Infrastructure) was involved in the effort; for example, they obtained special authorization from TAMAT (Ministry of Industry, Trade and Labor) so that the companies could hire employees to work on Shabbat without violating the usual work laws.

At the end of the day, the deployment of the fifth battery was facilitated by the knowledge that previous Iron Dome batteries had operated successfully in the past. Thus, the military forces conducted the calibrations and transmitted the instructions in operational real-time, not in a practice run. That is the way it is in the state of Israel: Reality becomes the setting for effective experimentation.

Anyone who thinks that Rafael’s assistant chief financial officer is overjoyed every time an Iron Dome intercepts a rocket, may be surprised to learn that the project is not yet profitable. A source from the industrial world told Calcalist daily yesterday [Nov. 18] that the army would have to intercept many times the number of rockets it has intercepted so far, in order to justify the investment in the Iron Dome; the enterprise will only be profitable if it can be exported. The problem is, says that same source, it is not an easy task to find countries with defense-needs that are answered by the Iron Dome system.

The unfamiliar face behind the Iron Dome

Of course, the successful operation of the Iron Dome is a technological and engineering feat — but it is more than that. Israel being Israel, it is also a bureaucratic and budgetary achievement. There are a number of people who deserve credit for this, including former Defense Minister Amir Peretz who decided in favor of the Iron Dome over other defense system presented as alternatives; present Defense Minister Ehud Barak also tipped the scales in favor of the system’s production budget and supply, over the objections of the military echelons. Barak also brought supplementary cash from the Americans.

In August 2004, the Defense Ministry first called for technological proposals for defense against the rocket threat. Twenty-four proposals were received, and a much earlier version of the Iron Dome was one of the alternatives that reached the last stage. A short-listed prototype was the Nautilus laser defense system (later changed to Skyguard), the product of Israeli-American cooperation; 600 million dollars had already been invested in it. At this point another key personality entered the story: Brig. Gen. (res.) Danny Gold, anonymous to most of the public, served at the time as head of research and development at Maf'at. It was up to Gold and a few others to make the final decision. Gold felt that the solution proposed by the Americans would not meet the operational demands, would be much more expensive than the alternatives, and would not be completed in time.

“I disqualified it immediately,” Gold said to Calcalist yesterday [Nov. 18]. “Anyone who was in the know, knew that it wouldn’t work. The Americans gave us a technological demonstration, but clearly it was very far from what we needed. Not that we are against use of the laser, we are in favor of it. There are six industries in Israel that are involved in laser-based defense, but it will be mature only in a few more years. Even then, it will only be the baby brother of the Iron Dome.”

How the Iron Dome deal was done

Gold describes the “opposition from within and without” that held up the project for two years, as is also recorded in the State Comptroller's report. But Gold, in swashbuckling, under-handed Arik Sharon style, decided that “a revolutionary project requires revolutionary procedures.”

What kind of opposition are you talking about?

“I will not mention names, but apart from resistance stemming from mercenary interests (reference to the company that developed the laser — S.A.), there were opponents in the IDF and the defense system. I have led many projects in my life, but I admit that I had never encountered the intense levels of resistance and opposition that I dealt with here. Some [opponents] simply thought that the project was not important or less important than other priorities. A significant proportion of the people thought that it would never work, that it was too technologically challenging and would require much time and money without attaining up-to-par performance. Some opposed it due to pre-conceived notions based on unsuccessful past attempts. To tell you the truth? You could write an entire book about why people oppose high-risk but trail-blazing projects.”

Another source who served in a high-level defense-system position said yesterday that the army’s main opponent was then-Chief of Staff Gabi Ashkenazi. The Comptroller's report shows that it took Maf’at two years (from August 2005 to February 2007) to convince the political echelons to prefer the Iron Dome over laser technology. Even back then in April 2007, after Rafael and the Defense Ministry had signed the agreement to develop and equip the Iron Dome — Ashkenazi refused to authorize the project so long as it had no budgetary backing. Only in July of that year did Defense Minister Barak confirm that the budget for the project would come from the army’s multi-year program. Afterwards, it was also authorized by the ministerial committee for army equipment.

Actually, Gold had decided to choose the Iron Dome in 2005, quite some time before the official authorizations. Gold explains that he and his team decided on the project’s characteristics, its time-schedule, price-tag, and what company would produce each part. Finally, after many hardships, Gold began to direct funds to R&D while recruiting Rafael to match his funds.

Why did you pick Rafael and not another government company such as the Aeronautical Industry (AI)?

“We analyzed the entire industry and learned that Rafael had an advantage regarding rocket technology over AI. But at the same time we also picked all their sub-contractors for them, and led them to provide matching funds in order to start to work until we could convince all the systems to join us.”

Why isn’t the defense industry able to become more efficient?

The almost clandestine fashion in which the Iron Dome system was developed, arouses questions regarding the efficiency of the Israeli defense industries. The state owns three defense companies — Rafael, AI and Israel Military Industries (IMI). The first two are profitable while the third has long suffered financially. In effect, the financial hole of IMI — that mainly produces bombs — is so deep that Israel’s Finance Committee authorized the injection of the tremendous, cumulative sum of 2.94 billion shekel into the company, meant to keep IMI on life support.

Intentions to privatize IMI or merge it with Rafael are as old as the plans to reform the Israel Electric Corporation. Former Defense Ministry Director-General Amos Yaron explained to Calcalist, “The reason it’s not done, is because there is pressure from sources who have [vested] interests in allowing IMI to remain a [separate] company — for example, the employees and the Histadrut [union]. Even with regards to interests of national security, certain political echelons have great difficulty in wrestling with employees.”

Meanwhile, opinions are divided on the question: Would it be more efficient to merge the governmental defense industries into one monster-size company? Some claim that the process would make the system more efficient and avert a situation in which several industries simultaneously invest public funds to develop similar systems. Opponents argue that a merger would diminish the bargaining power of the IDF and the defense system vis-à-vis the defense industry, something that could cause the latter to raise the prices they demand for their products. Second, a merger would discourage the growth of small and medium-sized defense-oriented companies; even now, these companies are discriminated against in defense-system tenders. These are forced to serve only as sub-contractors for the big companies.

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