DOD modernization yields to war demands

The Defense Department issued three budget requests last week totaling $716.5 billion to run the department and fight ongoing wars through 2008. Meanwhile, funds for some information technology programs have become so tight that DOD is paying contractors in two-month increments rather than annually.

DOD requested $481.4 billion for its fiscal 2008 base budget, an 11 percent increase compared with its 2007 budget request. The Bush administration pegged the cost of war operations in 2008 at $141.7 billion. It requested an additional $93.7 billion in emergency supplemental funding for the rest of fiscal 2007.

Those budget requests, if honored, would bring DOD spending to its highest level since World War II, but transformation and future programs could still be at risk, experts say. 

“It is doubtful whether, even with these large increases, DOD will be able to fully implement its very costly long-term modernization and force structure plans,” said Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments.

With few exceptions, DOD’s IT funding priorities are for near-term, deployable systems rather than long-term modernization programs. For example, DOD would increase spending on the Joint Network Node-Network (JNN-N), the system of stationary satellite uplink vehicles that have been deployed throughout Iraq and Afghanistan to provide bandwidth and connectivity on the battlefield.

DOD eventually plans to use the Warfighter Information Network-Tactical system, which will facilitate mobile connectivity. WIN-T is an integral part of the Future Combat Systems (FCS) infrastructure, but it won’t be ready for deployment for several more years.

There is a healthy debate about JNN-N, which has been deployed in the near term and has a static configuration, and WIN-T, which is the mobile network capability of the future, said Nelson Ford, Army assistant secretary for financial management and comptroller. The Army is searching for the right time to stop buying for JNN-N and start procuring for WIN-T, he added.

Spending on the Army’s FCS will be pared back $3.3 billion from $30 billion in the next five years. FCS will claim $3.6 billion of the Army’s research and development budget in 2008 and drop to $3.2 billion in 2009 as the program shifts toward the procurement phase, Army budget officials said.

Programs that support the war effort are getting funded, but future modernization programs are being pushed back, said Kevin Carroll, who leads the Army’s Program Executive Office for Enterprise Information Systems. Some large PEO-EIS activities, including the Single Army Logistics Enterprise (SALE) program, had their funding cut in the base budget but raised in the war budgets.
Technology programs are now divided between those that serve Southwest Asia and others that are concentrated in the continental United States, Carroll said. Money shifted to war operations is never returned, he said, which means delays for longer-term modernization programs.

When programs are realigned, acquisitions are broken into smaller pieces, and that creates inefficiencies, Carroll said. PEO-EIS had to realign SALE and push back the schedules for several IT initiatives, including the Installation Information Infrastructure Modernization Program, the Global Combat Support System-Army and the General Fund Enterprise Business System.

“That’s all being driven not because it’s a smart thing technically but because of funding,” Carroll said. Funding constraints have forced PEO-EIS to pay contractors in two-month increments rather than annually, he added.

Few defenders
DOD is split over whether to invest in rapidly deployable solutions or longer-term programs, said Pierre Chao, director of the Defense Industrial Initiatives program at the Center for Strategic and International Studies.
Each spending approach has its advantages, he said.

Although procurement budgets are rising, many development programs are reaching the procurement stage, so the budget pressures will increase, Chao said.

“They’re finding out that they’re trying to fit 20 pounds of programs into a 10-pound bag,” he said.

IT and network-centric warfare programs tend to fall through the cracks because they don’t have constituencies inside the military services to fight for them, Chao said.

Everybody agrees that spending for those programs is important, he added, “but it’s hard to find strong institutional actors to defend that.”

A few windfalls
Satellite and space programs were exceptions to the general clampdown on funding long-term system development programs.

The Transformational Communications Satellite  System, Space-Based Infrared System-High, and the next-generation Navigation Satellite Timing And Ranging Global Positioning System system all received windfalls, raising proposed space program spending $1.2 billion to $6 billion in fiscal 2008.