Condom failure rate?

I've been researching the effectiveness of condoms, and as most individuals know, they have a failure rate of about 1-2% even with perfect use and no breaks or slips. My question is: what is contributing to the failure even if it is used perfectly? A defect during manufacturing? Condoms are water tight, so if water molecules cannot p through, and viral particles cannot either, how could sperm cells possibly slip through as well? I'm beginning to think that the failure rate is merely a result of a sporadic case of improper use, not a defect during manufacturing or the fictional "small holes" present within condoms.