In '15 budget, red flags for contractors.

• Author: Erwin, Sandra I.
• Position: Defense Watch

If defense industry CEOs can draw any conclusion from the Pentagon's 2015 budget proposal it is that, except for the too-big-to-fail joint strike fighter, most of the military's modernization plan is on shaky ground.

The most illustrative example is the Army's fruitless quest to modernize its combat vehicles. The budget terminates the Army's ground combat vehicle, which was conceived as a replacement for another failed program, the future combat systems. The budget also kills the Army's tortuous modernization plan for its Vietnam-era scout helicopters.

A similar story unfolded in the Marine Corps, which has long sought to replace its aging armored vehicles that swim from ship to shore and serve in land combat roles. In both cases, Army and Marine leaders fought for their vehicle programs and named them "top modernization" priorities, but ultimately had to cut their losses. The conventional wisdom at the Pentagon now is that the safer course is to fix, rather than buy new. The services will have to try again when the budget climate improves.

Navy shipbuilders, meanwhile, are trying to discern the consequences of the Pentagon's decision to truncate the littoral combat ship program to nearly half the number originally planned. Navy leaders spent the past decade championing the LCS as the linchpin of the future fleet, and gave shipyards assurances that they would be building vessels for decades. It turned out the LCS cannot survive a missile strike and is ill-equipped to go into hostile waters, so the Pentagon told the Navy to go back to the drawing board.

Doubts about future weapons also abound in the Air Force, which is gambling the bulk of its modernization dollars on the F-35 and a new refueling tanker, but is still unsure where it will find the money for everything else. Like the Army, the Air Force expects to five with what it has and wait for the fiscal storm to clear. When it comes to "new starts, whether for helicopters or airplanes, we're in an environment now where we are having to be very careful about starting anything new, and we're looking very carefully at what the tradeoffs are between something new versus extending what we have," said William LaPlante, assistant secretary of the Air Force for acquisition.

The latest round of military acquisition flameouts caps a decade of procurement misfires that has left the Pentagon billions of dollars poorer, but without the modem equipment to show for it.

"The substantive increases of the...