Congress is likely to alleviate the drubbing that platform procurement, particularly aircraft programs, took in the Defense Department’s fiscal 2017 budget request, according to a review of the spending plan by Avascent Analytics Managing Director Doug Berenson.
Pentagon budgeters cut most major procurement and modernization portfolios in the budget pitched Feb. 9 to pay for near-term war fighting capabilities. But Congress has established a routine of adding significant funding to aviation, shipbuilding and ground vehicle programs, in its final appropriation, Berenson said Feb. 12 during a webinar on the budget proposal.
“Unfortunately, DoD has had to make a number of cuts in acquisition programs to the tune of about $11.2 billion relative to prior plans,” Berenson said. “These cuts were mainly in procurement accounts and hit aviation programs more than anything else…Procurement ended up as the primary bill payer for the effort to get the topline within the revised budget caps.”
The Pentagon cut aviation programs deeply compared with 2015’s plan for fiscal 2017. The F-35 Joint Strike Fighter program and efforts to upgrade the Boeing [BA] F-15 Eagle “took it on the chin,” but they still have relatively long-term outlooks.” Rotorcraft including the Boeing AH-64 Apache, Sikorsky [LMT] H-60 Black Hawk and Bell Helicopter Textron [TXT]-Boeing V-22 Osprey all were cut, as well.
There are individual program success stories within the larger tragedy of procurement cuts. The FYDP for 2017 also has DoD’s procurement budget increasing annually by about 3 percent through 2021.
The Boeing KC-46 aerial refueling tanker, the Northrop Grumman [NOC] E-2D Hawkeye and Long-Range Strike Bomber (LRSB) and the Sikorsky CH-53K heavy lift helicopter and modifications for the Lockheed Martin F-22 Raptor all received more funding in the 2017 request than was planned in earlier future years defense plans (FYDP). The Navy also funded extension of the Boeing F/A-18E/F Super Hornet in 2017 and beyond.
“While the Navy has quietly wanted this outcome for a long time, making this a formal part of the plan is a significant difference from prior years aircraft procurement plans,” Berenson said.
Accounts to purchase combat aircraft are slated to grow in later years, driven primarily by ramp up in production of the F-35 and initial production of the LRSB. Training aircraft also will see an eventual funding increase because of the Air Force’s T-X program, Berenson said.
“Congress will obviously have a lot to say about this,” Berenson said. “Aviation is one of the capabilities on which the Congress has shown the most favor in the annual appropriations process. In FY ’16, Congress added substantial funds to a number of aircraft programs.”
Those included almost all the platforms that seem to have lost in the fiscal 2017 request: F/A-18 and EA-18, F-35, F-15 modifications, Black Hawk.
“We would expect that dynamic to play out again this year such that many of the program reductions that DoD is proposing here will be at least partially added back,” Berenson said.
Congress is likewise fond of shipbuilding accounts and likely will protect them, though the Navy’s ship procurement programs are generally flat in fiscal 2017 compared with the enacted funding levels in the current fiscal year.
“As we saw in the aviation programs, the Congress is a major supporter of ship programs,” Berenson said. The 2016 enacted appropriation for shipbuilding included an extra $1.1 billion for shipbuilding programs over what the Pentagon requested. Platforms that benefitted include the DDG-51 destroyer, built by General Dynamics [GD] and Huntington Ingalls Industries [HII], afloat forward staging bases and amphibious warships.
Ground vehicle programs also generally are shown love by lawmakers during the appropriations process, Berenson said. Over the FYDP, spending on research, development and procurement of ground systems is projected to remain flat. General Dynamics Stryker wheeled vehicle and BAE Systems M-88 recovery vehicle procurement in particular are markedly down in the Army’s fiscal 2017 request.
In 2015, Congress raised the DoD ground system procurement request by 11 percent in its fiscal 2016 appropriation.
The Army launched two new-start programs in its fiscal 2017 request, the Ground Mobility Vehicle and the Mobile Protected Firepower vehicle. As nascent efforts, neither represents a major outlay by the Army.
“Ground systems is another area in which the Congress has leaned forward,” he said. “Congress may or may not be quite as generous this year, but some of the programs that saw cuts in the FY ’17 request like Stryker and M-88 are likely to see their budgets added.”