Posted by: arbeam | April 15, 2013

Navy Creating Sequester Contingency Plans but No Cuts in FY-14 Budget

FY-14 Request Totals $155.5B

Both the Virginia-class and Ohio-class replacement submarine program managers recently submitted a plan to the Navy’s top acquisition official for managing the effects of sequestration through fiscal year 2013 and possibly beyond, according to Capt. William Brougham, Ohio-class replacement program manager.

The tasking Brougham received from Sean Stackley, assistant secretary of the Navy for research, development and acquisition, was to detail what the program is doing to combat sequestration, Brougham told reporters after an April 9 presentation at the Navy League’s annual SeaAirSpace conference in National Harbor, MD.”I’m not a victim of it; [I am] impacted by it, but we’re not just going to wait and see what happens,” he said. “We’ve got to keep going, I’ve got a tight time line I’ve got to make.”

A portion of the Ohio-class replacement submarine program, the Common Missile Compartment, is a joint effort between the United States and the United Kingdom. During the fiscal year 2013 budget cycle, the lead ship was pushed to the right by two years, complicating the schedule between the American and British programs.

When Brougham prepared his report for Stackley, he took a look at how sequestration impacts FY-13, FY-14 and FY-15, he said.

The Navy started planning for sequestration with a “worst case” approach, planning on a 9-percent reduction. However, the across-the-board impact is closer to between 7.5 percent and 8 percent, Stackley told Inside the Navy April 10 at the conference.

“Risk has gone up in terms of holding the schedule . . . we have to ensure this program stays on track,” he stated.

Much like the submarine program offices, the rest of the Navy, Marine Corps and Defense Department are planning for a variety of scenarios that could play out with sequestration. Defense Secretary Chuck Hagel set up a Strategic Choices Management Group in March to analyze some bigger-picture budget issues. The report, due May 31, will “help frame [Program Objective Memorandum 2015]; when it frames POM-15, that’s going to be our guidance as we look into the future,” Vice Adm. Allen Myers, deputy chief of naval operations for integration of capabilities and resources, said April 10 at a budget panel during the SeaAirSpace conference. “I want to assure you there’s a significant level of effort that’s not just going to be looking into the future, but it’s also going to be the foundation of the Quadrennial Defense Review,” which will shape planning and investments for years to come.

Among the issues that SCMG will look at is the various forms that sequestration could come in over the next nine fiscal years, Assistant Commandant of the Marine Corps Gen. John Paxton said at the panel with Myers. A House-passed plan involves about $120 billion in cuts for DOD, a Senate plan would cut about $250 billion, and full sequestration would entail about $450 billion in cuts over 10 years, which includes the current fiscal year, Paxton explained.

Myers made clear in his speech that the FY-14 budget submission was based on full funding and did not account for sequestration even though it is currently the law of the land.

But, Paxton said, “it would be foolish to think that we weren’t planning for sequester. The guidance was do not plan on sequestration . .. but we would be poor stewards of the dollar, poor leaders, if we didn’t anticipate what could happen and what would be the triggers.”

He said that instead of planning on sequester — meaning, assuming it would happen and cutting money out of the department’s own budget request — officials are planning for sequester, as in understanding what range of things could take place and developing contingency plans for each scenario.

“The spirit of the guidance was, do not self-sequester,” Paxton said. “There’s a big difference there. So we did not do anything that would impose sequestration on ourselves, give ourselves internal false constraints.”

DOD’s best-case scenario is that Congress repeals the law that imposes sequestration and instead goes along with the deficit-reducing measures included in the president’s budget submission for the whole federal government — which Myers said actually provides for more deficit-reduction than did the Budget Control Act, of which sequestration is one component.

The president “broaches that he meets the intent of the law and he’s urging Congress to enact a balanced package to reduce the deficit and replace it, repeal the sequestration,” Myers said. “That’s the approach.”

Myers added that the Navy’s budget request supports continued overseas presence in the Middle East and the Asia-Pacific, as well as investments needed for the type of activities in each region — advanced mine countermeasures and surface warfare capabilities for the Middle East, and undersea dominance and ballistic missile defense in the Pacific.

Taking that approach to crafting the FY-14 budget without including sequestration cuts and prioritizing key overseas needs, the Navy is requesting $155.5 billion in its baseline FY-14 budget, including $43.5 billion in procurement, $16 billion in research and development and $45.8 in operations and maintenance. A slight reduction in the R&D account is a result of programs transitioning out of that phase, Rear Adm. Joseph Mulloy, the Navy’s deputy assistant secretary for the budget, said during the April 10 Pentagon briefing.

The Marine Corps budget fully funds the Joint Light Tactical Vehicle, Ground/Air Task Order Radar and the development plan for the Amphibious Combat Vehicle. However, in putting the FY-14 budget together, risk was assumed in the remainder of the service’s ground combat tactical vehicle portfolio, according to documents released by the Navy on April 10. Specific risks include smaller funding increases for humvee modification, delayed upgrades to Light Armored Vehicles and smaller funding levels for the Marine Personnel Carrier.

For weapons procurement, the Navy will buy a fewer number of Standard Missile-6s. The service will buy 81 missiles instead of 115 because not all of the ships in the Navy’s inventory are equipped with Aegis Capability Build 12 or Build 16, which are needed to operate the SM-6, Mulloy said.

The number of AIM-9X missiles the service wants to buy in FY-14 dramatically increased from 150 in FY-13 missiles to 225 missiles. Mulloy said the increase was due to the F/A-18 attack aircraft force needing more missiles.

The Navy’s shipbuilding budget looks very similar to what it had projected for FY-14 in last year’s budget submission. The Navy is requesting funding for eight ships — four Littoral Combat Ships, two Virginia-class attack submarines, an Arleigh Burke-class destroyer and a Mobile Landing Platform – Afloat Forward Staging Base.

The shipbuilding plan accounts for one additional sub and destroyer to allow both programs to award 10-ship multiyear contracts, which will lower the cost per vessel for the Navy.

The Navy made no changes from its projection in the last budget cycle to both variants of the F-35 Joint Strike Fighter aircraft quantities, expressing some confidence in the embattled program moving forward.

“Both services are looking to the delivery of these airplanes, and we did not change or affect our buy in any way,” Mulloy said.

Nor did the Navy make any changes from its previous proposal for 2014 buys of several other programs, including the E-2D aircraft, the Marine Corps’ KC-130J, the C-40A, the CH-53K, the MV-22B, and the MH-60 Romeo and Sierra aircraft.

But the Navy did make a few cuts to aircraft buys for 2014. While the budget request does not include any purchases of the F/A-18E/F Super Hornet fighter jets, the Navy hopes to fund 21 EA-18G Growlers as part of an effort to “grow the electronic jamming force,” Mulloy explained. The Navy’s previous budget request included 12 EA-18G aircraft in fiscal year 2013, but none in the following years. The buy for the P-8A Poseidon maritime surveillance aircraft is “readjusted slightly” from the Navy’s projection in the last budget cycle — for a request of 16 aircraft (as opposed to a proposal of 17 last cycle). The Navy made another slight adjustment to its proposal in the last cycle for purchase of the UH-1Y/AH-1Z helicopter, lowering its request from 27 to 26 in the FY-14 budget.

The Navy made some reductions in its budget request for unmanned aerial vehicles, including the Triton maritime surveillance UAV, delaying its buy of three vehicles for another year due to “two technical issues on the airplane that caused a delay in testing,” Mulloy said. The Navy also truncated its participation in the Small Tactical UAS (STUAS) program with the Marine Corps in FY-14; the Marine Corps will move forward with buying 25 vehicles per year, and the Navy will “balance off between the Navy and Marine Corps using the equipment,” Mulloy said. The Navy also opted to cut six MQ-8B Fire Scouts from its original proposal for FY-14,Mulloy said, noting that the Navy will take “a bit of a pause” until at least next year to assess the path forward for the Fire Scout.

 Inside Defense

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