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The FY12 Defense Budget Reveal

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For those unable to attend or watch the feed from today’s FY12 Defense Budget request roll-out at the Pentagon, here’s what you missed from the briefings of Secretary Robert Gates, DoD Comptroller Robert Hale, and various senior Service officials: 

(1)         Topline: The DoD budget request came in at $671 billion, inclusive of $553 billion for the base budget and $117.8 billion in supplemental war (OCO) budget.  By contrast, last year’s base budget request was for $548 billion and the current CR – which Secretary Gates says is too little at present -- is $526 billion.  (Dr. Gates insists that at DoD needs not less than $540 billion.) 

(2)         Accounts: The budget proposal includes $113 billion for procurement (up nearly 10% from FY10 provided funding); $75.3 billion for RDT&E (down about 7%); $204.4 billion for operations and maintenance (up 10%), $13.1 billion for military construction (down one-third), $142.8 billion for personnel (up 5%); $1.7 billion for family housing (down 25%); and $2.7 billion (down 10%) in revolving management funds. 

(3)         FY11 Continuing Resolution: Dr. Gates, who appeared to be battling through a cold, was nevertheless hot about having to operate the Department of Defense under a Continuing Resolution (CR) nearly five months into FY11 and devoted a good part of his five-minute presentation to describing the imperative for Congress to pass a bill as soon as possible.  Dr. Gates and DoD Comptroller Hale characterized the dysfunction that the CR continues to cause for DoD planners, acquisition officials, and industry, to include the inability to launch new programs, to fund multi-year procurements, to hire new personnel, and to execute contracts.  (Secretary Hale said that, as neither program represents a new start, we could expect a USAF KC-X source selection announcement within a month, and could be assured that an Army Ground Combat Vehicle (GCV) source selection would come this year, CR or not.) 

(4)         Extra Engine: Secretary Gates also expressed his unhappiness with continued Congressional insistence on funding the “extra” (not “second” or “alternate”) JSF engine, a program that he characterized as an "unnecessary and extravagant expense, particularly during this period of fiscal contraction."  The Secretary said that he “will look at all available legal options to close down” what would be a $3 billion program and appealed to the newly-arrived, reform-minded Tea Party members of the House to end this funding by bringing it a near-term vote. 

(5)         ISR: While there’s lots of concern within industry about the declining size of DoD procurement outlays, Comptroller Robert Hale notes that DoD’s “almost insatiable demand” for Intelligence, Surveillance, and Reconnaissance (ISR) assets remains a key focus of the budget request.  The FY12 request includes three Global Hawks for $1.7 billion; 48 REAPER UAS for $1.4 billion; 36 Army GREY EAGLES for $1 billion; and 12 Liberty MC-12 ISR aircraft for $300 million.  DoD Buzz’s Colin Clark has a good write-up on ISR investments here.   

(6)         New Bomber: The USAF intends to build between 80 and 100 of its new, optionally-manned bomber.  Despite the fact that the bomber is to be based on existing/proven technology, it will nonetheless take until the mid-2020s to come into the force structure.  

(7)         New Amphibious Vehicle: Not to be outdone in deliberate development, the Marine Corps indicated that it intends to take until 2024 to see initial operational capability (IOC) for the NAV, the vehicle identified to replace the scuttled Expeditionary Fighting Vehicle (EFV). 

(8)         Shipbuilding: The request includes $24.6 billion for shipbuilding, including. $19.9 billion for procurement and $4.7 billion for RDT&E. This request supports procurement of 11 ships – one DDG 51 destroyer, two Virginia class submarines, four littoral combat ships (LCS), two joint high speed Vessels (JHSVs) (one Army and one Navy), one Mobile Landing Platform (MLP), and one LPD-17 amphibious transport dock ship. The requested amount will also support procurement of an oceanographic ship and fund advance procurement for a new aircraft carrier (CVN 79), additional Virginia Class submarines, and the FY13 DDG 51 class destroyer.

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