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February 3, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

The Pentagon is racing against inflation for military might

By: Aaron Mehta

WASHINGTON — In 2017, the top two officials at the Pentagon — then-Defense Secretary Jim Mattis and then-Chairman of the Joint Chiefs of Staff Gen. Joe Dunford — testified to Congress that the defense budget needs to have 3-5 percent annual growth over inflation each year through 2023 to ensure America's military success.

Dunford, speaking to the Senate Armed Services Committee in June 2017, went as far as to say: “We know now that continued growth in the base budget of at least 3 percent above inflation is the floor necessary to preserve just the competitive advantage we have today, and we can't assume our adversaries will remain still."

Three years later, as the Trump administration prepares to unveil its fiscal 2021 budget request on Feb. 10, such growth appears impossible. The budget is expected to be largely flat, as a two-year budget deal reached last summer calls for $740 billion in defense spending in the next fiscal year, up just $2 billion from the enacted FY20 amount.

“The 3-5 percent goal was reasonable enough and absolutely needed,” said Mackenzie Eaglen, a budget analyst with the American Enterprise Institute. “But it is not happening. The defense top line for 2021 is negative real growth, aka declining.”

Susanna Blume, a defense analyst with the Center for a New American Security, said that certain parts of the defense budget, particularly maintenance and personnel costs, grow faster than the rate of inflation. “That's what's behind these comments about requiring a certain amount of real budget growth in order to sustain the joint force as it is today,” she said.

But there is a wild card, according to Ellen Lord, the Defense Department's top acquisition official: a series of reform efforts led by now-Defense Secretary Mark Esper, which so far have accounted for $5 billion in savings.

“We're getting more and more efficient. That is obviously what Secretary Esper is focused on with his defensewide review, that we are cutting out administrative tasks and a variety of portions of programs to make sure we return those savings to our critical modernization efforts such as [artificial intelligence], hypersonics and so forth,” Lord said during a Jan. 31 news conference at the Pentagon. “We are always having to look very carefully at our budgets and make sure we triage them to focus on the critical few. So we're always concerned, but we're always going to work it.”

How much of that expected growth gap can be filled by Esper's efficiency drive is difficult to pin down. Blume said its “certainly possible that efficiencies could make up some of that gap,” but whether the work that has been done now and is planned in the near term will be enough “are questions we don't have answers to today.”

Added Eaglen: “Efficiencies alone will not get the Pentagon its 3-5 percent growth in actual dollars to reinvest. The defensewide review only yielded $5 billion, and the way it works with these drills is that the money doesn't necessarily move from pot A to pot B as a result."

“But that doesn't mean it is not worth doing. Any money amount is helpful. And the exercise is also about getting the bureaucracy to shift its time, tasks and attention to great power competition as much as it's about shifting funds into higher priorities that support the strategy,” Eaglen said.

If one of the Pentagon's big bets work out, that could be a real game-changer, Blume said. Those bets include efforts to replace a Defense Logistics Agency warehouse using a 3D printer as well as attempts by the Air Force to rapidly develop, prototype and produce fleets of planes. If one of them goes well, Blume said, “you can potentially start to bend some of those cost curves.”

https://www.defensenews.com/pentagon/2020/01/31/the-pentagon-is-racing-against-inflation-for-military-might/

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  • Is the US Navy winning the war on maintenance delays?

    September 22, 2020 | International, Naval

    Is the US Navy winning the war on maintenance delays?

    David B. Larter WASHINGTON — The U.S. Navy, beset by maintenance delays, is making progress on getting its ships out of the shipyards on time, fleet officials say. Over the past three years, the Navy is on track to more than double the percentage of ships getting out of maintenance on time, key to the service's efforts to make deployments more sustainable for its ships and sailors, Capt. Dave Wroe, U.S. Fleet Forces Command's deputy fleet readiness officer told Defense News in an email. “On-time ship maintenance availability completion rates in private shipyards improved from 24% in FY18 to 37% in FY19,” Wroe said. “Current performance trends in FY20 are projected to be 65%.” The improvement is a sign that the Navy may be turning the corner on a fight to restore readiness from its nadir in the early part of the last decade, when the Navy was running ragged filling unsustainable requirements for forces around the globe. Getting ships through their maintenance cycles on time is the linchpin of what the Navy calls its “optimized fleet response plan,” which is the system through which the Navy generates deployable ships that are maintained, manned and trained. Late last year and again in January, Chief of Naval Operations Adm. Michael Gilday told audiences that repeated delays in the shipyards was undermining the Navy's Optimized Fleet Response Plan, and turning that around was vital. “We are getting 35 to 40 percent of our ships out of maintenance on time: that's unacceptable,” Gilday said at the USNI Defense Forum in December. “I can't sustain the fleet I have with that kind of track record.” A recent Government Accountability Office report found that between 2015 and 2019, only 25 percent of the Navy's maintenance periods for ships and submarines. Improvements Getting out of that hole has been difficult for a number of reasons: High operational demand for Navy forces makes planning maintenance difficult, and inevitably when the ships go into maintenance after years of hard use, workers discover more work that needs to be done, creating delays. And those delays make executing OFRP difficult, Wroe said. “OFRP provides the construct to best assess and optimize readiness production — down to a unit level — taking into account all the various competing factors to produced Navy readiness,” Wroe said. “Bottom line: OFRP helps mitigate fundamental points of friction, such as shipyard capacity and manning gaps at sea — but in itself doesn't solve key degraders like depot level maintenance delays and extensions.” But some key factors in the delays have been identified and the Navy is working to mitigate them, Fleet Forces Commander Adm. Chris Grady said this week at this week's Fleet Maintenance and Modernization Symposium. One area that has a tendency to drive delays is when workers discover things that need to be fixed, the fix may not cost much but the adjustment must go through an approval process that slows everything down. Those kinds of changes add up to about 70 percent of the so-called “growth work.” Part of it is anticipating and building in ways to deal with growth work into every maintenance period, and the other part is making it easier to address small changes to the scope of the work, Grady said. “When we began this initiative, cycle time for the small value changes averaged about 30 days,” he said “We're now at six and aim to bring it down further to only two days.” Other things that have helped the problem has been bundling maintenance periods for ships, meaning that contractors bid on multiple ships to fix, and can plan hiring further out, Grady said. Additionally, improving base access for contractors has helped, as well. “Last year, we averaged 110 days delayed per ship in private avails,” Grady said, using the short-hand term for “maintenance availability.” “Things much better this year — even with COVID-19,” he continued. “We go from about one-third avails finishing on-time to two-thirds. That is great. But, again, each delay has real impact on our readiness, and we need to keep working together to do better.” What happened? Because the U.S. Navy is set up to meet standing presence requirements and missions around the world, it must cycle its ships through a system of tiered readiness. That means ships go on deployment fully manned, trained and equipped. Then the ships come home, and after a period of sustained readiness where the ship can be redeployed, it goes into a reduced readiness status while undergoing maintenance. Following maintenance, the ship and crew goes into a training cycle for another deployment as an individual unit, then as a group, then returns to deployment. The whole cycle takes 36 months: Rinse and repeat. OFRP was designed in the 2013-2014 time-frame when the Navy was deploying well beyond its means, with carrier strike groups and amphibious ready groups going out for nine-to-10 months at a time. The excess use wore hard on the ships and sailors who manned them and put more wear on the hulls than they were designed to sustain. That meant that when ships went in for maintenance they were more broken than they were supposed to be, and funding to fix them was hampered by spending cuts. For nuclear ships — submarines and aircraft carriers — the funding cuts were a double whammy of work stoppages and furloughs that contributed to a wave of retirements in the yards, meaning the public yards were understaffed and had to hire and train new workers. Work took longer, throwing a wrench into an already complicated system of generating readiness. All that added up to significant delays in getting ships through their maintenance cycles and contributed to astonishing delays in attack submarine maintenance especially. What OFRP was meant to do was create a system whereby the Navy could meet combatant commander demands but not break the system. That meant that the Navy would generate as much readiness as it possibly could but that the demand would have to be limited to what the Navy could reasonably maintain, man, train and equip. But getting to that system has been immensely difficult because of the deep hole the Navy dug meeting requirements that well outstripped funding and supply. For example, there was a two year period when the service was forced to supply two carrier strike groups to the Arabian Gulf at all times, a requirement only canceled when automatic across-the-board spending cuts in 2013 made it impossible for the Navy to fund the two-carrier requirement. Adding to the difficulty: some of OFRP's founding requirements were nigh impossible to pull off. One was that the all the ships in group would go into and come out of their maintenance availabilities on time and together. Another was that a group would go into the first phase of their training, the so-called basic phase right after coming out of maintenance, fully manned. Both have been immensely difficult to pull off. But Fleet Forces, headed then by OFRP architect Adm. Phil Davidson, was given ample warning that those assumptions would be difficult to achieve. Then-NAVSEA head Vice Adm. William Hilarides told USNI News in January 2015 that getting ships to come out of the yards simultaneously would be hard. “The challenge to me is, let's say you want four destroyers in a battle group, all to come out at the same time in one port? That's a real challenge,” Hilarides told USNI News. The current head of NAVSEA, who at the time was in charge of the Regional Maintenance Center enterprise, backed up his boss to USNI News, saying it would be particularly challenging in places with less infrastructure. “Your big rub there is, the challenge of OFRP is ... all those ships [in a carrier strike group], they go through maintenance together, they go through training together and they deploy together,” said then-Rear Adm. William Galinis. "So, what our challenge is, is to be able to take all that work from all those ships and try to schedule it for roughly about the same time, and to get all that work done on time. So that's our challenge. “Now, in a port like Norfolk or San Diego, we have big shipyards, a lot of people, a lot of ships. You can kind of absorb that type of workload. When you go to Mayport, they've got like 10 ships down there [and typically cannot work on more than one or two destroyers at a time.],” he told USNI. Galinis said that Fleet Forces would have to be responsive to the shipyards because at least that way they could plan for delays. “They know if they give us all this work at one time, it's going to go long anyway,” he told USNI. “So they'd rather be able to plan that and at least know when they're getting the ship back, as opposed to, ‘nope, we're not going to talk to you, you've got to go do it,' and then the ships go long because we don't have enough people to do the work.” Fleet Forces Command has been reviewing its assumptions this year and is preparing to release a revised OFRP instruction, but the core is likely to remain the same. In any case, Wroe said in the email, it was always going to take a long time to dig out of the hole the Navy found itself in when OFRP was implemented fully in 2015. “It was clear at the inception of OFRP, and remains clear today, that it will take the entire 2015-2025 period to recover readiness and establish stable readiness production,” Wroe said. “That makes sense when readiness production is planned over 9-years and large blocks of time have already been scheduled for depot maintenance periods.” Ultimately, if the process of OFRP is funded correctly and ships can get out of maintenance on time, it's a sound way of moving forward, Fleet Forces Commander Grady told the audience this week. “My bottom line here is that, as a process, OFRP works,” he said. “If we are looking where to improve upon it, each of these studies came to the same conclusion: the biggest inhibitor to fleet readiness is maintenance and modernization performance in the shipyards. We simply must get better, and I know you share my concern.” https://www.defensenews.com/naval/2020/09/19/is-the-us-navy-winning-the-war-on-maintenance/

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