Analysis: Busting Defense Budgets

By John Grady

March 30, 2012

As the Senate Armed Services Airland Subcommittee deliberated the Army’s modernization budget priorities at a hearing earlier this week, Sen. Joe Lieberman, I-Conn., chairman of the panel, could not help reflecting on how the Pentagon’s challenges are similar to those it faced in early in his Senate career.

As Lieberman pointed out, massive cuts and declining Defense Department budgets leave scant room for modernization -- those were the facts in 1993, and those are the facts now. The Cold War was over then, and it was time to harvest the peace dividend.

The big question is whether the Army’s top brass has learned any lessons from the past.

Lawmakers wanted to know whether a smarter acquisition process has taught the Army not to pour billions of dollars into programs that ultimately are canceled, pointing to the Future Combat System. A recent review of the Army’s acquisition programs noted $3.3 billion to $3.8 billion of the service’s research and development funding has been lost to canceled programs, including FCS, since 2004. The study was led by Gilbert Decker, a former assistant secretary of the Army, and retired Gen. Louis Wagner Jr., former commander of the Army Materiel Command.

“We often do get the strategy wrong. That’s why we’re pursuing an incremental approach” to modernization spending, said Lt. Gen. Robert Lennox, deputy chief of the Army G-8, at the hearing. “I think we’re in better shape.” He assured lawmakers that Army officials know what the fiscal 2013 modernization budget request of $22.9 billion can do for all components, and they understand the risks to the defense industry if programs don’t go as planned.

The Army’s senior acquisition generals made their case for an integrated network and the Ground Combat Systems, saying they would rely heavily on commercial off-the-shelf technology, which holds down costs and allows for necessary changes.

Lennox attributed that approach to the portfolio review process started under Gen. Peter Chiarelli, who recently retired as vice chief of staff. A look at the development program for the Ground Combat Vehicle, for example, took into account the weaknesses of the Bradley Fighting Vehicle. “The Bradley has a number of shortfalls,” Lennox told lawmakers, adding that it’s underpowered and can’t carry a full squad of nine soldiers. And Lt. Gen. Keith Walker, director of the Capabilities Integration Center at the Training Doctrine Command, added, “The Bradley does not have the maneuverability or the protection for our rifle squads.”

Requirements for the vehicle have been refined and projected costs have dropped to $9 billion to $10.5 billion per copy, according to Lt. Gen. William Phillips, principal military assistant to the assistant secretary for acquisition, logistics and technology. A similar approach was used for the Joint Light Tactical Vehicle, a joint acquisition with the Marine Corps, lowering the cost per copy from $450,000 to $225,000.

“We don’t want to paint ourselves into a corner,” Walker told lawmakers. Phillips agreed, saying that in a change from past Army practice “we are listening to industry so we build our requirements appropriately.”

Still, Lieberman wasn’t walking down memory lane when he said the budget situation is presenting “unacceptable levels of strategic risk.” The 2011 Budget Control Act slashed the Army’s active component by 80,000 soldiers, cut back tactical vehicle procurements and shut down M1A1 tank production in Lima, Ohio, putting the jobs of engineers and skilled ballistic armor welders on the line, he noted at the hearing.

So it seems the Pentagon’s choices aren’t any easier now than they were during its last budget crunch.

John Grady, retired director of communications for the Association of the United States Army, writes about defense and national security for various organizations and publications.


By John Grady

March 30, 2012

http://www.govexec.com/contracting/2012/03/analysis-busting-defense-budgets/41641/