The Pentagon is “quite serious” about applying so-called reversibility to budget decisions that impact the defense industry, a senior official said yesterday.

Undersecretary of Defense for Policy Michele Flournoy said reversibility, the noting of budgeting in a manner so that the military can quickly respond to unforeseen future threats, “means a couple things” for industry. Her comments came, during her final speech before leaving office this Friday, as pundits questioned just what the reversibility means.

“Some have seized on this word, (reversibility), as a sign that our principles are not firmly fixed, or that our decisions on key programs are subject to rapid change,” she said at the Reserve Officers Association’s Annual National Security Symposium in Washington. “In fact, reversibility means something completely different. It refers to our ability to make course corrections in response to strategic, economic or technological change.”

Flournoy said Pentagon officials are trying to prevent situations where “if you lost a particular part of the industrial base it would take you years and years and years to recapture it, if ever.”

“That fact has been factored into some of our program and budget decisions,” she said. “So even though a particular program may have been weak or something we thought about doing away with, if in doing away with that we would completely lose a capability or the ability to have that capability in the future on a timely or responsive basis, we’ve got input of what to do in that case.”

She acknowledged such decision-making is tied to a “complex calculus.”

“But we are quite serious about this notion of reversibility,” she said, “because...it’s very hard to predict the future in this current environment. But it’s too important to keep this institution’s ability to be responsive to the unforeseen.”

The guiding principle of reversibility also has spurred Pentagon officials to try to maintain investments in science and technology as well as research and development, she said.

“That is the seed corn of our future,” she said.

Reversibility has been applied more broadly to the Pentagon’s fiscal year 2013 budget proposal as well.

For example, the budget seeks to start reducing ground forces while maintaining a high proportion of mid-grade officers who “would be at a particular premium if we needed to build up those forces quickly,” Flournoy said yesterday.

In this context, she told the Reserve Officers Association, “the Guard and the Reserve will play an extremely important role,” because they give the military “built-in adaptability and resourcefulness.”

“We expect the reserve components to continue to provide both an operational and a strategic reserve in the future,” she said. “They will continue to be a source of innovative approaches to building the capacity and critical partners around the world.”

Defense-budget observers have questioned the meaning of reversibility, which Deputy Defense Secretary Ashton Carter discussed Dec. 5 during a press briefing on the Pentagon’s forthcoming FY ’13 budget request, which it plans to send Congress on Feb. 13 (Defense Daily, Dec. 6).

Todd Harrison, the senior fellow for defense budget studies at the Center for Strategic and Budgetary Assessments, said reversibility “could mean a lot of things” and could come at a cost.

“You can cut programs and then make some investments that mitigate the downside to the industrial base,” he said last Friday at a Center for Strategic and International Studies (CSIS) event on the defense budget. “But often what will happen is your unit costs (for weapon systems) will go up and you’ll be paying money in some cases to support overhead and infrastructure capacity in the industrial base, and skills in the industrial base, that you’re not actively using.”

“There are good reasons to do that," Harrison said, "but it gets hard to defend that in front of Congress year after year.” Thus, he said, “there are definitely risks involved.”

Clark Murdock, a CSIS senior adviser and director of its Defense and National Security Group, for his part said he “wouldn’t pay too much attention to the word (reversibility) itself as promising a new concept.” He noted past Pentagon talking about hedging, asking what-if questions, and synchronizing --terms he maintained connoted more content than they really did.