I almost tittled this article “The dumbest auction I’ve ever heard of”, but I want to be careful, just in case I fundamentally don’t understand the auction the US army is creating for it’s warrant officers.

Under the new program, called the Warrant Officer Retention Bonus Auction, eligible warrant officers will submit confidential bids for how much money it would take to keep them on active duty for an additional six years, the Army announced last week….Eligible officers can submit a minimum bid of $100 per month, increasing at $100 intervals, the release said, and once the market closes, the Army will use those bids to define a “single, market-clearing bonus rate,” to pay as many officers as the service’s budget allows.

Officers who submit bids at the chosen rate — or lower — will be awarded those bonuses. The catch? Those whose bid above the rate will get no bonus.

Did I just read that right? The they want their officers to 1) estimate their reservation bonus for remaining in the employ of the US Army, and then 2) bid that within a closed bid auction. There is a pool of bonus funds, such that a maximum bid will be established, paying out exclusively to those officers who bid below the maximum. All officers who estimated their reservation bonus (effectively, their reservation wage) above that threshold will receive nothing, almost guaranteeing their exit from the Army.

Are. You. Kidding. Me.

Allow me to rephrase it another way. You want to award retention bonuses to the officers with the weakest outside options and, in turn, have the lowest reservation wages while, at the same time, awarding nothing to your best and brightest officers, those with the greatest outside options? I doubt you could more cleverly design a policy to maximally purge talent from the armed forces. Military bodies have enough problems as is retaining talent, particularly as the promotion pyramid gets narrow in the upper ranks that continue to be filled by older officers uninterested in retiring. We’re going to have to invent entire new swaths of Murphy’s Laws to internalize these leadership shenanigans.

There are, in my outsider estimation, two broad categories of officers with the strongest outside options: 1) young officers with strong technical skills and a demonstrated ability to engage critical thinking skills under pressure, and 2) top tier officers whose personal networks are invaluable to military contractors looking to secure big ticket military contracts. This auction structure will create a mass exodus of the former and an accelerated pathway to the latter. Both are bad, but the loss of young talent could be absolutely devastating as warfare shifts to an ever more technical landscape.

Please tell me I am missing something in the comments and that this isn’t the dumbest labor market policy in the history of moderm US military operations