Seapower - April 2009

program has been plagued since the beginning by rising costs, design changes and disagreements over performance requirements between the contractor, the Navy and the White House Military Office.

The program “is a good example of what happens when you have unrestrained requirements,” said Robert Work, a Navy analyst at the Center for Strategic and Budgetary Assessments.

Work predicated that, at a minimum, the Obama administration will force a “good scrub of the requirements” to get the price down. He added that he wasn’t surprised the cost increases were worse than initially projected.

“The problem always gets worse than you think,” he said. “Once a program is in trouble, it’s really difficult to get it righted.”

At a time when the economy continues to falter and fiscal austerity and budgetary belt-tightening quickly become the marks of responsible governance, program officials at Lockheed Martin and within the Navy should brace for big changes.

“This program is not going to survive … not in the current form,” a congressional aide tracking the program predicted recently. “There will have to be some kind of restructuring.”

The presidential helicopter is not alone in its problems. Indeed, the Government Accountability Office, the investigative arm of Congress, reported last year that cost overruns on the Defense Department’s 95 largest programs totaled nearly $300 billion.

Obama and key lawmakers are making it a priority to prevent similar cost hikes in the future.

McCain has introduced a bill with Senate Armed Services Chairman Carl Levin, D-Mich., aimed at reforming the Pentagon’s weapons-buying process. And the House Armed Services Committee has created a seven-member bipar-

INTERCEPTS

“The United States cannot expect to eliminate national security risks through higher defense budgets, to do everything and buy everything. The Department of Defense must set priorities and consider inescapable tradeoffs and opportunity costs.”

Robert M. Gates

Secretary of Defense

From his article “A Balanced Strategy: Reprogramming the Pentagon for a New Age.” Foreign Affairs

“When a program is that late, that much overbudget, it’s our job to look into what’s going on. If we can find a better value for the nation then we need to do so.”

U.S. Rep. Gene Taylor, D-Miss.

Chairman of the House Armed Services seapower and expeditionary forces subcommittee

On the VH-71 presidential helicopter replacement program. Defense Daily

tisan panel to explore the issue and suggest reforms.

While the current stabs at acquisition reform may be too late for the VH-71 and other ongoing programs that are plagued with problems, it is clear there is little appetite on both ends of Pennsylvania Avenue for what is perceived as unrestrained spending.

Obama Wants $663.7B
For Defense, Wars in 2010

The Obama administration has requested $663.7 billion to cover both the Pentagon’s day-to-day operations and war costs in fiscal 2010.

While the details of what’s in the budget are not expected until later this month, administration officials already have made it clear they intend to do away with emergency appropriations that have become a mainstay for the Defense Department after seven years of war.

The total for defense spending includes $130 billion to pay for operations in Iraq and Afghanistan, a figure the administration does not

want tagged “emergency” spending. Such a move would make war spending subject to the annual defense authorization process in addition to appropriations.

Meanwhile, the budget includes $533.7 billion for the Defense Department’s base budget, marking a $20 billion increase over this year’s spending. However, that figure includes funding for some programs that previously have been tagged as war spending.

The administration also has requested $75.5 billion to pay for the wars for the remainder of this fiscal year. Congress already has approved $66 billion for war costs this year.