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3-star warns senators of budget cuts' future implications

Apr. 26, 2013 - 01:28PM   |  
Lt. Gen. Charles R. Davis testified before Senate committees earlier this week on the affect of upcoming budget cuts.
Lt. Gen. Charles R. Davis testified before Senate committees earlier this week on the affect of upcoming budget cuts. (Air Force)
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The Air Force’s top military acquisition official has warned Congress that the impacts of sequestration and budget cuts will continue to reverberate over the next decade.

“Cuts to the Air Force modernization programs will, over time, cost the taxpayer more money,” Lt. Gen. Charles R. Davis testified before the Senate Armed Services Airland subcommittee. “Sequestration will not save the Air Force money.”

Program inefficiencies and lost quantities will continue to have an impact going forward, especially given budget uncertainty.

“There is still considerable uncertainty in the fiscal year 2014 Air Force topline level,” Davis said. “The 2014 budget will not reverse the damage done by the fiscal year 2013 sequestration.”

While there are a number of modernization projects in the budget, Davis warned that those types of upgrades simply equip older platforms, such as the F-15 or F-16, with technology that has been active for years, rather than investing in new technologies to help prepare for the future.

“More troubling to me, half of our so-called modernization budget really goes just to maintain current capability in the light of decreasing performance in these systems and adds really no new capability,” Davis told the senators.

However, acquisition officials have managed to plan well enough to keep three key programs — the KC-46 tanker modernization program, the F-35 Joint Strike Fighter and the new long-range bomber — moving in the right direction.

Speaking earlier in front of the House Armed Services seapower and projection forces subcommittee, Davis said those three programs comprise about 27 percent of the acquisition budget. There was enough flexibility built into the budget that the programs could survive without taking a significant hit in development time.

In the run-up to sequestration, there was speculation that budget cuts could force delays, or potentially a renegotiation, of the tanker program contract with Boeing. That contract, which caps the government’s liability at $4.9 billion and requires Boeing to cover any overruns, is widely considered to be government-friendly.

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Rather than face delays, the KC-46 remains on track to complete its critical design review this summer, according to Davis.

“I don’t have the exact date but it will be somewhere around the 3rd or 4th quarter of this year,” he told reporters after his testimony, adding that there is “no reason why” there should be delays.

The new combat rescue helicopter program is still going through source selection, Davis said, with DoD evaluating the proposed design.

“We don’t have a timetable for that yet,” Davis said. “It would probably be on the verge of late this fiscal year or early next fiscal year.”

Davis was less willing to put a timetable on the long-range bomber design. However, he said the program is slowly ramping up.

“Every year we bring a little bit more, the activity gradually rises throughout the process,” Davis said. “So while we’re just in the early phases of it this year, we continue to move up into harder things… we do more demanding things, we put more stress on the acquisition process, we start getting closer to decisions. So every year it just ramps up in the program significantly, especially when you’re in the early phases of looking at technology and technology demonstrations.”

Regarding the F-35, Davis repeated the estimate that the Air Force will lose three to five JSF models this year due to the budget. How many F-35s will be pushed down the line depends on what unit cost comes out of the Lot 6 negotiations that are expected to be finalized this year. If per-unit costs are high, the number cut will be closer to five; if the costs are low, the cuts will be less severe.

“Now it’s up to the folks that will go back and do the negotiations with Lockheed, on Lot 6, and they’ll probably do Lot 7 very close on the heels of that. And so, if our budget stays as it is, we’ll see what happens.”

Those negotiations will occur in roughly the same time frame with both prime contractor Lockheed Martin and engine manufacturer Pratt & Whitney, Davis said.

“They’re going to do both together. They usually do the airframe and then the engine, but I mean it’s all with the same years’ money, or the same two years’ money. I don’t know exactly whether they’ll do [airframe Lot] 6 and then engine 6 or 7 and engine 7. I think they’ll probably do 6 and 7 on the airframe together and probably then get started with 6 on the engine,” Davis said.

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On the opposite end of the acquisition scale, Davis said the service is still mulling over what to do with its fleet of C-27s once the USAF officially shutters the program.

“We’re still working with Congress to reach agreement on what we can do with the fleet,” Davis said. “A lot of people are interested, though, so those airplanes will go to a good cause, whether we keep them or they end up with somebody else. Hopefully, by the end of the year we can work that one out as well.”

However, Davis doubts the planes will end up being sold to foreign partners, instead expecting them to end up with domestic agencies.

“The list of people that have interest in them is either our AFSOC special forces, the Agriculture for Forestry, the Coast Guard, so there’s a lot of customers within the US, and they’ll go to good use,” he said.

Davis also touched on how his job will change following Tuesday’s announcement that MITRE executive Bill LaPlante has been selected to fill the role of principal deputy assistant secretary for acquisition and management.

LaPlante is replacing David Van Buren, who retired in March 2012. The role of assistant secretary of the Air Force (acquisition) remains vacant. Sue Payton, who retired in the spring of 2009, was the last person to be confirmed for that role; Van Buren served in a dual capacity for both jobs until his retirement.

“Mr. LaPlante will serve as a non-career member of the Senior Executive Service,” Ed Gulick, USAF spokesman, told Defense News. “This is not a permanent position, and he will not require presidential appointment or Senate confirmation to serve in this capacity, as is required for the assistant secretary for acquisition.”

LaPlante will “exercise a broad range of responsibilities regarding Air Force acquisitions, including many of the duties of the position of assistant secretary for acquisition until such time as a new assistant secretary arrives,” Gulick said. “The details of those duties will be worked out with senior Air Force leadership upon Mr. LaPlante’s arrival.”

Davis is hopeful the extra manpower will allow him to focus on long-term acquisition strategy.

“It’s very important to have the principal deputy there to kind of represent the civilian side of the Air Force . . . so he will pick up many of the duties I’ve had, and then I’ll start picking up things that we should have been doing for the last year that we haven’t been able to because we just didn’t have the people,” Davis said.”

“It might be a little bit more focus on strategy of the overall acquisition corps, of the personnel processes, of managing people, looking at succession plans for our leadership, for trying to track program root causes of performance, good or bad,” Davis said, “kind of the routine stuff you do to be able to be ready for a year or five years from now as opposed to what’s on the calendar at 2 o’clock today.”

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