Government Executive - Authors - Dan Taylor

Changing Pace

Dan Taylor — Thu, 01 Nov 2012 01:00:00 -0400

With the threat of automatic budget cuts hanging over the Pentagon—picture tens of thousands of civilian layoffs, unpaid furloughs and multibillion-dollar programs thrown into turmoil—Defense Department Comptroller Robert Hale could offer little reassurance to a nervous defense community at a public appearance in late September.

“There isn’t a plan,” he said at a Government Executive event in Arlington, Va. “I know this frustrates people, but we haven’t done detailed planning. We still are hopeful we can avert this.”

On Jan. 2, 2013, now just weeks away, sequestration—a measure initially intended only as a threat to force lawmakers to settle on a reduced spending plan—is set to take effect and cut Defense across the board by 10 percent. The Pentagon already is trying to figure out how to live within a more constrained budget in the midst of an operational shift to the Asia-Pacific region, all while continuing to invest in programs that are as flexible and agile as the post-Afghanistan military envisioned by top leaders.

Without question, the next administration will have its hands full before the glow of inauguration has even had a chance to fade.

By far the biggest issue is sequestration, the dark storm cloud looming over the military services and anyone even remotely tied to the world of defense. At congressional hearings, news briefings and just about any public engagement, Hale and other Pentagon officials continually deal with the question.

“I definitely hope sequestration won’t happen, and I still believe there is a reasonable chance that it will not,” he said at the forum. “But it is the law. We can’t ignore it.”

Sequestration was never supposed to happen. The $1.2 trillion across-the-board cuts to defense and domestic programs during the next decade was meant as a sort of punishment to spur a congressional super committee to strike a deal on more targeted reductions. But after the super committee failed to reach an agreement in 2011, the clock has continued to tick toward Jan. 2.

Trend 1: Spending Cuts

The Pentagon already is scaling back planned expenditures. The 2011 Budget Control Act mandates a reduction of $500 billion in defense spending during the next 10 years. But the term “reduction” can be misleading. The Pentagon budget would continue to grow—just half a trillion dollars slower—and officials get to choose which programs to cut.

Sequestration, on the other hand, would lead to all sorts of unpleasantness, Hale warned. Right off the bat, it would eliminate an extra $52 billion from the budget in fiscal 2013 and those cuts would extend through 2021. Defense officials have “limited flexibility in how we can accommodate that cut,” he said. The department can exempt military personnel from the budget ax, but that only means cuts everywhere else would have to be larger, he added. Civilian employees in particular would be “severely affected,” Hale said, adding Pentagon planners would have to consider unpaid furloughs.

“I don’t want to do it, none of us do, but we can’t rule it out,” he said.

Procurement programs also would experience “a lot of disruption,” Hale cautioned, although they may not feel much of the pain right away.

“We will not cancel contracts for money that is appropriated,” he said. “The money that’s already obligated will almost always be exempt . . . There won’t be, on Jan. 2, a lot of contract cancellations.” Instead, the short-term effects likely would be that a program wouldn’t pick up a contract option, or officials would have to make some changes.

Operationally, sequestration will require scaling back spending on training and maintenance, ultimately leading to a military force that is less ready to respond to crises around the globe, Hale said.

Dealing with spending rollbacks under the Budget Control Act was a challenge itself for officials, but the Defense Department was allowed to develop a strategy and craft a budget that fit that strategy. Sequestration would necessitate going back to the drawing board, Hale noted. “If a decision is made that there will have to be further cuts, we’re going to have to revisit the strategy,” he said. “And then we would try to redraw the budget.”

Not everyone is couching sequestration in as dire terms as the Pentagon and the defense industry. Michael O’Hanlon, director of research for the Foreign Policy program at the Brookings Institution, says he is “strongly against” what he describes as a “really messy” way to make policy, but notes the effects might be overstated.

“It’s not clear that it’s the end of the world,” he says, adding the actual reduction in outlays for defense contractors may be more in the realm of 6 percent, rather than the 20 percent range as some have been claiming.

But O’Hanlon agrees sequestration is still something that should be avoided. Whether it will happen depends on the climate in Washington once the elections are over and that’s anyone’s guess, he says. “We’re all at the mercy of congressional and White House leadership,” he adds. “It becomes a question of: Do we believe elections will resolve anything?”

O’Hanlon says it’s possible that whoever loses the election will accept defeat and agree to terms favored by the winners, and the winners could decide that they’d best compromise because now that they’re the incumbents sequestration is on their shoulders in the next election. But no one can predict how cooperative the two sides will be, he notes.

Trend 2: Asia-Pacific Shift

As Congress, Defense and industry wrangle over budgets, the top brass is continuing its aggressive shift to the Asia-Pacific region after spending more than a decade in protracted land wars in Iraq and Afghanistan.

The shift has long been planned. The Pentagon for years has been investing in assets suited for the region, such as the Littoral Combat Ship, which can operate in near-shore environments better than a destroyer or a cruiser. The military services have been buying stealthier platforms, standoff weapons and other systems meant to counter an “anti-access/area-denial” type of environment where a hostile entity attempts to deny entry into an important region. Iran’s threats to mine the Strait of Hormuz is one example.

Daniel Chiu, deputy assistant secretary of Defense for strategy, says the Asia-Pacific region is of interest to more than just the Pentagon—it’s important to all sectors of the U.S. government and the nation. “You [have to] understand the key national security priority we place on the Asia-Pacific region and that’s what this rebalance is really intended to reflect,” he says. “It came from the White House. It’s really a whole-of-government effort.”

The U.S. military hopes to deepen ties with countries there and foster stability. “This really is about building relationships—making them deeper, making them stronger,” Chiu says.

But just because the Pentagon is looking at that particular region doesn’t mean it won’t be keeping one eye on just about every other part of the globe. The Defense Department plans to keep a major presence in Latin America, Africa, Europe and even the Middle East.

In fact, the department has launched a major effort to provide ballistic missile defense to Europe by positioning Aegis Ballistic Missile Defense System-equipped destroyers and cruisers in the region until land-based sites are established, which will take about a decade.

“Globalization has really had a big impact on the way the world works,” Chiu says. “It’s really, really difficult to kind of disentangle ourselves, from an interests perspective, from any particular region. There’s no one region that doesn’t have interconnectivity with another region.”

The elephant in the room is China, a rising superpower. Many outside observers are quick to suggest the rebalancing of focus is to counter China, but Chiu says Pentagon planners aren’t focusing on that nation any more than others in the region. “China is obviously a main consideration for us,” he says. “However, we try to make it extremely clear, and we’ve been extremely honest about this: China is not the primary purpose of this rebalance. Our interests in the region are as a Pacific power.”

Chiu acknowledges, however, that China is a big player in the region. “It is in our interest and it has been our policy for quite some time to work hard to develop productive, constructive relationships with China,” he says.

Sequestration could pose some risk to the rebalancing of U.S. forces, although it wouldn’t cause the Pentagon to change course, according to O’Hanlon. Because the Defense Department is unlikely to cut back on health care or base operation costs, sequestration’s primary effect on the U.S. military in the Asia-Pacific region is likely to be reduced readiness.

“What you’re going to do is cut back on exercises and deployments, and that is going to scale back your perceived presence and perceived dependability,” he says. “It’s not good. If it just lasts for a few weeks, it’s not the end of the world, but . . . it is going to take a lot of the money that is used to sort of establish and reinforce our visibility [in the region].”

The Air Force and the Navy figure prominently in the shift to the Asia-Pacific, but the need for Army resources won’t diminish much, according to O’Hanlon. “We’re still in Afghanistan,” he says. “They’re going to be there in substantial numbers for a couple of more years. We still have all this unrest in the Middle East.”

Trend 3: Weapons Modernization

The Pentagon’s operations now and in the future depend on a force that is agile and flexible enough to respond to modern threats around the globe. With technology evolving at a rapid pace, Defense is trying to get away from its old habit of replacing large amounts of hardware every time an update is needed to a weapons platform, whether it is the Air Force F-16, Navy DDG-51 destroyer or Army M1A1 Abrams tank.

Instead, during the past few years, a departmentwide push for open architecture has focused on developing modern systems, such as a multifunction display in an aircraft cockpit with software that can be upgraded whenever new technology becomes available. Officials even are releasing what is normally proprietary data so more companies can bid for work on programs.

In March, Navy Secretary Ray Mabus told the House Appropriations Subcommittee on Defense that the service is trying to avoid having to start over whenever the next best thing hits the market. “We can simply pull out whatever we’ve got there and replace it,” he said. “One of the things that we’re trying to do not only with the LCS, but also with all the ships that we build, is to make them modular so that as things change, as technology improves, that we can keep up with the latest technology and that we don’t have to replace the whole platform to do that.”

A successful departmentwide effort would produce defense systems that are better able to adapt to changing needs and, perhaps more important, save the Pentagon some cash during a time when it is sorely needed.

Isaac Porche, a senior engineer at RAND Corp., says although open architecture has been around for years, in many ways the concept is in its infancy as the Defense Department tries to figure out how to transport the idea from PowerPoint slides to real-world systems. A prime example, he says, is the Navy’s Consolidated Afloat Networks and Enterprise Services program, or CANES, which uses open architecture to combine the many computer networks on a ship into one. But, Porche adds, “there remains some skepticism in DoD whether it can achieve what it sets out to do.”

Industry leaders like Google have been developing cloud computing concepts and big data analytics in recent years, which helps set the standard for how open architecture should work at the Defense Department.

Still, for the most part, Defense officials have a ways to go to figure out which open-system standards work for their programs and which don’t. For example, weapon system networks need more security than other systems.

If programs can find their way in the relatively unknown realm of open architecture, it could be a boon to program managers looking to increase flexibility while driving down costs, according to Porche. “The big benefit is the ability to have development platforms that allow smaller companies—or even uniformed personnel themselves—to create capabilities more quickly,” he says.

Dan Taylor is managing editor of Inside the Navy

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Course Correction

Dan Taylor — Wed, 15 Aug 2012 00:00:00 -0400

Vice Adm. David Venlet was just about to hang up his Navy blues as chief of Naval Air Systems Command in the summer of 2010, ready to decompress from the hectic world of Defense Department acquisition by engaging in his favorite hobby: fishing.

Then Defense Secretary Robert Gates came calling.

The F-35 Joint Strike Fighter program, the largest defense program in Pentagon history, was without a leader. The Government Accountability Office has pegged the program at nearly $400 billion in acquisition and development costs for 2,443 Air Force, Navy and Marine Corps jets. On Feb. 1, 2010, Gates had announced at a Pentagon press briefing that he was dismissing the JSF’s program manager and replacing him with a three-star officer at some point. After a few months, the Pentagon announced Venlet would be that officer, and the soft-spoken Pennsylvania native and former F-14 Tomcat pilot decided he’d better put his retirement plans on hold.

“I looked in the mirror and I saw there was still a uniform there,” he says with a wry smile at JSF’s headquarters, a few blocks from the Pentagon. “There was really little to no hesitation.”

Venlet has deep roots in military aviation, but he soon may get his wish to do more fishing. On Aug. 2, the Pentagon announced President Obama had nominated Air Force Maj. Gen. Christopher Bogdan, Venlet’s deputy, to succeed him as head of the F-35 program.

Getting the Joint Strike Fighter effort back on track certainly has been a challenge for Venlet.

The F-35 has had a troubled 15-plus year history since Lockheed Martin Corp.’s X-35 bested Boeing’s X-32 in a high-stakes, head-to-head competition to build the United States’ future strike fighter fleet. The Defense Department wanted three variants of the aircraft: the F-35A conventional takeoff Air Force jet; the F-35B short-takeoff, vertical-landing Marine Corps jet; and the F-35C carrier-based Navy variant.

Back then, Pentagon officials believed they could buy the jets at a cost of about $233 billion. But they soon encountered a major problem: concurrency. Essentially, to achieve the schedule goals Defense had set, they’d have to build aircraft before flight testing even started, meaning that any glitches encountered during testing would cause major production problems. That in turn would lead to schedule delays and cost growth. Earlier this year, the Pentagon’s chief of acquisition, Frank Kendall, called the concurrency approach an example of “acquisition malpractice.”

The result was plenty of outrage from lawmakers. Sen. John McCain, R-Ariz., one of the F-35’s most vocal critics, has repeatedly lambasted Pentagon officials in Senate Armed Services Committee hearings over the years, which often focused heavily on the F-35, even when all defense programs were under consideration. In March 2010, when a Pentagon official argued the truncated Air Force F-22 fighter program came through its troubles, offering hope for the F-35, McCain pounced.

“I’m astonished you would use that as some kind of success story, because they overcame technical problems,” he said. “But the unit costs almost doubled, or more.”

At that same February 2010 briefing, Gates announced another bombshell: He would place the F-35B variant, which was particularly tricky due to the complexity of a vertical-lift fixed-wing aircraft, on probation and recommend killing it if problems weren’t resolved within two years. By any measure, Venlet had his hands full when he finally took the job that summer.

When Gates met with him, he made it clear that time was running out to steady the program.

“The thing I recall from that conversation was the description—he used his finger like on a clock, and he said, ‘Dave, we’ve made small corrections and adjustments to the program over recent years, and those small adjustments have continued to disappoint,’ ” Venlet says. “He said, ‘If you assess a large adjustment is needed to the program, please bring that forward and tell me, and we’ll make it so it doesn’t disappoint again.’ ”

The Real Thing

Two years after Venlet’s appointment, the F-35 program is showing some signs of stability, at least in initial testing. The program was about 15 percent ahead of its planned test schedule by the end of 2011, and is ahead by an even larger margin so far this year. In January, Defense Secretary Leon Panetta announced that the F-35B had been removed from probation, because officials had identified fixes for issues on the aircraft.

But Venlet knows that with production numbers still low and much testing to be done, it’s too early to trumpet the aircraft’s successes. In fact, the services won’t even announce new projected fielding dates for the F-35 until later this year. The dates were supposed to be 2012 for the Marines and 2016 for the Navy and Air Force before delays pushed those projections at least two years into the future.

Years of struggle and the debacle of concurrency have prompted many of the F-35’s fiercest critics to cite it as an example of gross mismanagement. Venlet argues a program of this size with such revolutionary technology is destined to have struggles along the way and maintains his predecessors laid the groundwork for the recent testing successes. He said when Defense came up with a new baseline for the program in 2010, it set the aircraft on a realistic path in an achievable time frame.

Still, Venlet knows it’s time to put up or shut up.

“There’s no tolerance for more money or more time,” he says. “I think [a new baseline in 2010] was the last adjustment that the program was going to get, so now we have to manage the program with the resources we’ve got knowing there is no more to come. And as we face challenges along the way, we will have to solve anything we discover within the boundaries of our current resources and time.”

Tom Burbage, Lockheed Martin’s executive vice president and general manager of F-35 program integration, says the reason the program has been ahead on flight tests is the new timeline is fairly conservative, providing opportunities to get ahead of schedule and thus offer some cushion in case of a major problem, such as a temporary grounding of the fleet to address an urgent issue.

“I read every flight report every night, and we’re between five and eight flights per day,” he says. “I think we haven’t required all the re-fly rates we projected.”

The program finally has begun seeing some of the fruits of its labor. The long-awaited sea trials for the F-35B Marine Corps vertical-lift variant took place last year aboard the amphibious ship USS Wasp. “There was some uncertainty how that was going to come off,” Venlet says. “And that sea trial, to see that operate so successfully . . . you can’t fake that. That wasn’t done in a TV studio. That was the real thing.”

The Ambassador

Although the United States will be by far the largest buyer of the F-35, other nations will be flying the jet once it becomes battle-ready. Eight partner nations have participated in funding the research and development of the aircraft: the United Kingdom, Italy, the Netherlands, Turkey, Canada, Australia,

Denmark and Norway. Beyond those partners, Japan and Israel have signed on to buy some of the jets, and South Korea will consider the F-35A in its own competition going on right now.

One of the reasons Defense and its international partners have stuck with the program despite its problems and price tag is the aircraft’s much-touted “fifth-generation” capabilities. Fifth-generation jets are designed to be stealthier than current fourth-generation aircraft, such as the Navy’s carrier-based F/A-18E/F Super Hornet. Unlike the Super Hornet, an F-35 can carry its weapons stores internally, reducing its detectability on radar. The aircraft is more automated, reducing the workload on the pilot.

“The computing power on the airplane is so high now, the airplane systems can monitor their own health,” Burbage says.

But many question whether such advancements are worth the price tag that comes with the F-35, particularly when most countries are cutting back. Defense’s fiscal 2013 budget item justification sheets, which accompany the president’s annual budget request, list the average unit cost from fiscal 2014 to the end of the program as $116 million per aircraft for the F-35A, $169 million for the F-35B and $150 million for the F-35C. By comparison, the unit cost for a possible alternative to the F-35C, the Super Hornet, is $86 million per aircraft.

Michael E. O’Hanlon, director of research and a senior fellow at the Brookings Institution, says while he doesn’t advocate doing away with the program altogether, the United States doesn’t need as many fighters as it is buying and would save a lot of money by making steep cuts in the program. “I’d size it to be able to populate most of our major bases in East Asia for the possibility of a Taiwan contingency,” he says.

The United States won’t need the fighter for much else, O’Hanlon argues. He recommends cutting the program in half and possibly canceling the Navy variant altogether, opting to go back to buying Super Hornets for now.

The program’s international partners have been skittish in recent years. Australia joined the United States in delaying orders, while Italy and the Netherlands have cut back on their planned purchases. Venlet has taken on the responsibility of not only keeping other nations from jumping ship, but also reassuring U.S. lawmakers and even Pentagon top brass that the program is worth it. He acknowledges “it’s undeniable” that he spends a lot of time acting as an ambassador for the F-35. “The program needed a restoration of trust . . . That includes Congress, partner countries and Pentagon leadership.”

Venlet says he has endeavored to be completely transparent and that partner nations have personnel embedded in the program so no one is left out of the loop. So far, that list of partner nations hasn’t shrunk. “None of them are making any noises or signals of leaving the program,” he says. “I certainly respect the debates that go on in each of the countries, and as time passes, they need to answer tough questions being asked, and we are completely supportive of them.”

There’s also the task of maintaining a healthy relationship with manufacturer Lockheed Martin. The company has been hammered by critics over the years for its role in the rising costs and schedule delays. “I believe we’ve got a common view of the task ahead of us now,” he says.

Burbage has known Venlet for decades. They are both graduates of the U.S. Naval Academy and served on the same ship, albeit at different times. He says he and Venlet meet on a regular basis and have an understanding going forward on what the program needs to do to get back on track over the coming years. Venlet’s persona is just what the program needed, he adds.

“He’s an even-mannered and even-tempered guy, so he’s pretty hard to rattle, to get excited,” Burbage says.

Test of Time

As for the future, the program must keep hitting test points and quietly build up successes, Venlet says. The main obstacles include software development. Most of the software is written, but the effort is facing its most challenging phase: integration with the aircraft. Program managers are looking ahead to taking the F-35C out to an aircraft carrier in the next year or two and demonstrating greater and greater flying capabilities in tests of all three variants.

Sustainability costs remain an issue. The program expects to spend $1.5 trillion over the life of the aircraft to sustain the jets until they leave service. Burbage says the number may seem big, but is comparable to legacy aircraft. Venlet acknowledges, however, the program has to find ways to drive costs down.

“There are clearly things that we are able to do, levers we’re able to pull, on how we go about sustaining [the F-35]—where we put them, how many bases we put them at,” he says. “We’re trying to optimize all the aspects of sustainment for the United States and 10 other countries.”

The Pentagon should take lessons from the history of the JSF and apply them to future or ongoing programs, Venlet says, because the program demonstrates the importance of having a solid foundation from the start rather than working out significant design issues while building the aircraft.

“The reform that’s needed, from my experience, is a commitment to sound fundamentals that stand the test of time,” he says. “It’s like building a house: If the foundation is square and level, you can build walls that will last a long time. The surprises, then, are contained in the normal test stuff.”

The program has a long way to go, and it will take a lot of work to fully restore trust and field a battle-ready aircraft. But he believes if the program is able to “quietly perform” and build up success after success, then perhaps even the biggest skeptics will climb aboard the F-35 bandwagon. “We don’t have to beat the drum and flash the lights every time we complete a test point,” he says. “Let’s just keep doing it and they accumulate over time.

“Someday, we’ll turn around and say, ‘Hey, there’s a lot of these F-35s around, and they’re working pretty good.’ ”

Dan Taylor is managing editor of Inside the Navy.

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