Defense affordability: can we buy only what we need?

• Author: Captain, Tom
• Position: VIEWPOINT

Military acquisition budgets globally are flattening out and declining. Large scale multi-billion dollar programs are running over budget and being delayed. Weapon systems requirements are getting more sophisticated and changing all the time. What can we do to afford and develop the innovative defense and security technologies needed to defeat the next generation adversary?

Calls for controlling the costs for military healthcare, operations and maintenance as well as increasing spending on weapon procurement and research and development are all noteworthy, but in the meantime, there are more immediate actions that should be considered, such as addressing program complexity problems, generating more cost efficiencies, and engendering an innovation environment in industry with a renewed talent base.

The Defense Department's 2011 budget represents growth of 1.8 percent above inflation, but underneath those numbers there is an expected decline for research and development as well as procurement for new weapons. The Congressional Budget Office estimated that real defense costs will, on average, exceed planned baseline projections by about $59 billion of shortfall annually for the next 20 years.

This shortfall is caused by increases in pay and benefits for military and civilian personnel, the projected rise in operations and maintenance costs for aging equipment, plans to develop advanced weapon systems to replace many now nearing the end of their service lives and the growing investment in new capabilities such as advanced intelligence, surveillance and reconnaissance systems to meet emerging security threats.

These requirements will likely result in an increasingly smaller slice of the pie dedicated to weapons research and development as well as acquisition. If there is no real growth in the defense budget, acquisition accounts could slide from 35 percent of the budget in 2010 to 24 percent by 2020, according to the Congressional Research Service. If this were to occur, likely outcomes could be underutilization of the industrial base, cost cuts and rationalization to preserve profitability, and most importantly, reduced investment.

In addition, the weapons acquisition process is yet again going through major reforms. As the Government Accountability Office reported recently, major defense programs are collectively almost $300 billion over their planned costs and only 30 percent of those programs are on schedule.

According to a recent Deloitte...