By Marina Malenic
Pentagon spending on research, development and production of new weapons will likely see a gradual drawdown rather than a steep drop in the coming years, a top official said yesterday.
“We’re going to see possibly some gradual drawdown in the investment accounts,” said Frank Kendall, principal deputy undersecretary of defense for acquisition, technology and logistics. “For the near term, I do not see a dramatic change.”
The Defense Department is working hard to reduce waste to live within its now slowly growing budget, Kendall said during a conference in Arlington, Va., hosted by Swiss bank Credit Suisse and defense consultant Jim McAleese.
Defense Secretary Robert Gates canceled eight major programs–including the DDG-1000 destroyer, the Air Force’s Transformational Satellite and the vehicle portion of the Army’s Future Combat Systems modernization effort–as part of the department’s Fiscal 2010 budget request. Kendall explained that, when officials looked at their portfolio of expensive development programs prior to those terminations, there was “just too much stuff in the pipeline” that the Pentagon could not afford to keep on the books in the long run. In the future, Kendall said, the department will need stricter criteria and clearer requirements for programs before investing substantially in their development.
Pentagon officials said last week that they intend to recommend termination of still more “lower-priority” programs in an effort to divert more than $100 billion to current forces and modernization priorities for the next five years (Defense Daily, June 7). The department’s leadership is asking the military services to find $2 billion each in non-essential costs in FY ’12. The savings will be transferred to higher priorities within the services’ own budgets. The armed services, Pentagon agencies and combatant commands are expected to submit cut proposals by July 31.
Kendall said the Pentagon is also exercising improved oversight for programs that could potentially breach the Nunn-McCurdy cost-growth cap. For example, he said, Pentagon officials are already conducting an investigation into a troubled program before it formally runs afoul of the law. He declined to specify the program in question.
Last week, six programs with unexpected cost growth were certified to Congress, among them the Lockheed Martin [LMT] F-35 Joint Strike Fighter (Defense Daily, June 3).
Kendall also said he favors using more fixed-price contracts. He added, however, that the department must have clearly defined requirements for a particular system before a fixed-price contract is worth considering.