Slicing the Transformation Pie

he bellwether for the Bush administration's campaign to transform the military into a more high-tech, more mobile and more agile force is the Pentagon's research and development budget. Money spent researching new solutions to age-old military problems is the seed corn that produces cutting-edge technologies such as the unmanned combat aircraft that recently distinguished themselves in Afghanistan.

Just last May, for example, project managers at the Defense Advanced Research Projects Agency and Boeing announced the first flight of the X-45A, the first of a new family of unmanned aerial vehicles designed to fly at 40,000 feet and drop 2,000 pounds of precision-guided bombs. The X-45 is scheduled to join the Air Force and Navy inventories between 2006 and 2008. Other transformational programs deemed ripe for exploitation include satellite surveillance systems, global positioning satellite targeting, stealth aircraft, tactical unmanned aerial vehicles and especially advanced information systems and sensors to provide command-and-control, communications and intelligence capabilities.

The administration has largely lived up to its promise to spend significantly more than before on military research and development to support "leap-ahead" technologies. President Bush's fiscal 2003 budget request includes a $5.4 billion increase in R&D funding. Combined with last year's $6.8 billion increase, that amounts to a 25 percent jump from fiscal 2001 levels. Today's R&D spending levels are 75 percent higher than the Cold War average.

The Bush administration has also given priority to research and development of a ballistic missile defense system. R&D funding for missile defense was increased by $2.5 billion in fiscal 2002 to $7 billion for fiscal 2003, and the amount requested for missile defense R&D for 2003 is 54 percent higher than when Bush entered office in 2001.

The Pentagon's R&D budget is broken down into six categories that represent the different phases of the research-and-development process. Programs in the three earliest phases are contained in the science and technology budget, and it is here where many experts believe money can best be leveraged for truly revolutionary advances in military capability. Under the administration's plan, science and technology funding would grow to $9.7 billion in fiscal 2003, a $744 million, or 5 percent, increase over 2001 levels.

Transformation advocates worry, however, that the Pentagon's decision to proceed with a large number of more traditional programs-including development of three expensive tactical fighter programs-will eat up a disproportionate slice of the R&D pie. By far the biggest increase in the R&D budget, for instance, is for engineering and manufacturing development, the final phase of R&D before a program moves into production. Between fiscal 2001 and 2003, funding for this area will grow about $5.1 billion, or 55 percent, totaling $13.6 billion in the fiscal 2003 request. Meanwhile, the fiscal 2003 budget request includes $4.5 billion for continued development of the military services' three fighter programs.

"No one believes that the U.S. military can or should be transformed overnight, but the magnitude of the tilt in this budget toward traditional systems may be inconsistent with an effective transformation strategy," Steven Kosiak, senior budget analyst for the Center for Strategic and Budgetary Assessments, concluded in a recent report. "The level of funding absorbed by traditional weapon systems entering engineering and manufacturing development today will also grow significantly over the next five years or more, as they move further toward production-potentially crowding out promising, emerging transformation programs."