AFSPC Develops Plans To Absorb $508 Million Hit To FY ’13 O&M Budget

Air Force Space Command (AFSPC) has developed plans to absorb $508 million in reductions to its fiscal year 2013 operations and maintenance (O&M) budget due to sequestration-related budget cuts and having to operating under a continuing resolution (CR) for the remainder of FY ’13, according to the service’s space chief.

AFSPC chief Gen. William Shelton said via a spokesman recently the $508 million in O&M reductions will include $145 million from weapons system sustainment; $56 million from civilian pay; $70 million from overseas contingency operations (OCO), also known as wartime funding, and $237 million from baseline programs.

Shelton said reductions in weapon system sustainment would be key to countering the O&M budget cuts.

“We believe we can source the reductions within these programs through deferring work in weapon system sustainment,” Shelton said. “We are fairly positive we will get relief for our OCO shortfall later this fiscal year. This leaves our primary focus on the baseline cut of $237 million.”

AFSPC is assessing potential reductions across several mission areas, with ground radar, space situational awareness (SSA) and defense communications systems being key areas that could be impacted, Shelton said. AFSPC is also looking at various means of operational changes to include reduced hours, utility savings and limited sustainment.

Space Fence, the Air Force’s next generation space debris-tracking S-band radar, is a program that could potentially be impacted. Space Fence, which the Air Force values at more than $3.5 billion, is to replace the Air Force Space Surveillance System (AFSSS), or VHF Fence, which has been in service since 1961.  Raytheon [RTN] and Lockheed Martin [LMT] are gunning for the Space Fence contract.

AFSPC will also cut funding for all command development and procurement programs. Shelton said AFSPC won’t know what flexibility it has to move money between programs until Congress provides CR or appropriation legislation. Congress recently passed a CR, which contained a defense appropriations bill. The CR keeps the controversial sequestration budget cuts that started March 1 and could tap $46 billion in defense spending through Sept. 30, and $500 billion over a decade. The bill includes $604.9 billion for a combined base defense budget and OCO war funding, compared to the FY ’12 level of $633.2 billion.

Space Command is also reducing participation in operational training exercises around the world; cancelling all staff assistance visits and deferring undergraduate space training for scientists, engineers and acquisition professionals for the remainder of FY ’13. Shelton said AFSPC will also postpone five non-essential inspections, saving approximately $400,000. AFSPC is also reviewing, and where practical, cutting headquarters contracts by 50 percent for the remainder of FY ’13. Examples of these contracts include base maintenance contracts, advisory and assistance services contracts and custodial contracts. Shelton said AFSPC will reduce FY ’13 headquarters contract support by $27 million.

Shelton said planned information technology (IT) purchases will be eliminated or deferred and that IT requirements will be re-validated and expenditures will be limited to only “mission critical” purchases.

Shelton said these actions are in addition to the previously directed Air Force-wide spending reduction measures that include: Freezing civilian hiring, eliminating temporary employees and not renewing “term-hire” employees except for mission-critical activities; severely reducing temporary duty travel to only mission-critical travel and eliminating all travel to conferences; curtailing or eliminating non-Congressionally-directed or mission-critical studies, limiting purchases to essential FY ’13 consumption and deferring non-emergency facility, sustainment, restoration and modernization projects.