Defense Department acquisition chief Frank Kendall spoke at the American Institute of Aeronautics and Astronautics’ SciTech 2014 conference Wednesday about maintaining the military’s technical superiority in a time of constrained budgets, noting that research and development — chiefly, retaining concepts and talent through R&D accounts when the services cannot afford to push a program into procurement yet — was a smart way to ensure a healthy future military.
The undersecretary of defense for acquisition, technology and logistics noted that Congress just this week released its spending plan for this fiscal year, which is expected to be passed later in the week. Kendall said that, though the Pentagon is still analyzing the bill, he views it as a sequester modification that still disproportionately hurts research and development accounts.
“This year we did not start spending as if we were going to get our request, we were spending with an eye on an expectation that sequestration might continue, so we’re in much better shape than we were last year,” he said. However, he noted that fiscal year 2015 only has a $10 billion sequester relief, so the department still faces a $40 billion cut compared to what it might otherwise request to spend.
Cuts that steep will almost inevitably hurt R&D more than other accounts, he said, and even in this year’s much smaller sequester R&D and procurement were disproportionately affected. The cuts this year amounted to essentially a five percent sequester cut compared to the budget request, but R&D and procurement were cut about 10 percent each because personnel was not cut, either in troop pay and benefits or in force structure.
Kendall said one of his biggest concerns with the budget is that R&D accounts represent the health of the future force and therefore should be either maintained or grown, not cut. He noted that in the 1970s the military had to cut back its spending after Vietnam, and while procurement accounts shrank, the military tried to hang on to key skills and concepts for future platforms by putting them into R&D accounts. There, the services could continue to advance the designs of platforms such as the M1 Abrams tank, AH-64 Apache helicopter, Aegis cruisers and destroyers and more, and even build prototypes where practical to keep programs in good shape until procurement money became available.
Kendall said the Pentagon ought to consider that approach today.
“Maybe not to the same scale, but in selected areas where we can do prototyping, that does several things for us,” he said, including reducing the time it would take to field equipment once procurement dollars become available, keeping industrial base skills sharp by continuously designing and prototyping, and making sure there are always lower-tier suppliers in the market to contribute to a project.
Once a program actually reaches the procurement phase, Kendall said the Pentagon was working hard with its Better Buying Power (BBP) initiative to ensure programs were affordable and successful. After about three and a half years, Kendall said cost consideration has clearly permeated the department, becoming a design constraint rather than just a consideration for the budgeters.
“We’re having to do tradeoffs to keep those costs under control,” he said. “The point of an affordability cap is to force tradeoffs–you can’t have everything you want, this is all you can afford, so what’s most important to you?”
Another aspect of BBP, the should-cost estimates, has proven a bit trickier. Kendall said the idea of calculating an “aspirational” goal of what the program ought to cost is a good idea, but the military needs to find a way to pursue the should-cost mentality throughout all its acquisition programs without military budgeters or Congress limiting funding to what ultimately is a “goal” and not necessarily realistic.