Army points to system modernization focus for 2020

The Army is focused on divesting its legacy systems for fiscal 2020.

"There's just so far you can take a 40-year-old system," Army Under Secretary Ryan McCarthy said during a Center for a New American Security event March 4 that previewed the force's impending 2020 budget expected next week. "There are some hard choices in this budget, and there will be more in the future."

The Army's much-anticipated 2020 budget will be the product of a zero-based approach where every dollar spent or requested had to be justified in a month's long process to find existing money that could be repurposed.

The result: Army said it has slashed more than $30 billion in programs over five years, including $8 billion in cost avoidance and $22 billion in cuts and terminations of existing programs.

McCarthy said nothing was spared, and even weapons systems beyond sustainment were on the chopping block.

"A lot of the cuts you'll see are in the backend of the budget because that's where we'll need the financing the most, because that's when [prototypes] are going through the operational test and start the fielding" across the force.

McCarthy tried to dissuade industry concerns over the cuts, saying there were still plenty of opportunities to work with the Army.

"Some of these companies have a sense of what's coming, others do not. We'll communicate very robustly with them for the explanations as to why, but [we'll] show the immense opportunity that exists in that space where many of them compete and the path we're trying to go," McCarthy said. There are, he said, "a lot of conversations to be had here in March and April."

Despite the new budget approach, the Army is still cautiously optimistic and enthusiastic about other transaction authorities. McCarthy told reporters the service has been "pretty aggressive with OTAs," using them for eight programs out of the approximately 800 overall.

"We watch it very closely, very judiciously because this is obviously a new authority that's been granted to us by Congress and ... we've got to be successful, we got to get some wins," he said.

McCarthy said the secretariat was watching all of those OTA programs closely, in particular those with small businesses. "You've got to be very careful with the authority," he said, and not be "stacking billion-dollar contracts on it."