FROM: U.S. DEFENSE DEPARTMENT
Acquisitions Chiefs Describe Effects of Budget Uncertainty By Claudette Roulo
American Forces Press Service
WASHINGTON, Oct. 24, 2013 - With assessments ranging from "sobering" to "painful," acquisitions chiefs from each of the military services yesterday described the devastation being wreaked upon their branches by sequestration and the continuing resolution.
Citing halted development programs, hiring freezes, and narrowing technological advantages, the acquisitions chiefs warned members of the House Armed Services Committee that the ongoing budget uncertainty is putting the nation at risk.
"Maintaining current readiness and forward presence to the extent possible under sequestration comes at expense to our investment in future readiness. In fiscal year 2014 alone, absent congressional action or mitigating circumstances, the continuing resolution and sequestration would cause cancelled procurements of up to three major warships and 25 aircraft," said Sean J. Stackley, the assistant secretary of the Navy for research, development and acquisition.
Heidi Shyu, the assistant secretary of the Army for acquisition, logistics and technology, pointed to stability's central role in guaranteeing successful acquisitions programs.
"Our capacity to maintain expertise in science and technology, engineering, contracting, cost estimation [and] logistics are all at risk because one of the most attractive benefits to the government employee -- the stability -- has been undermined," she said.
"Every major development suffers delay, or reduction, or cancellation in this budget environment where uncertainty seemingly guides every decision," Stackley said.
The acquisitions chiefs said sequestration will end up costing the Defense Department more than it saves. Cuts to development programs will drive up unit costs and are already delaying testing, said William A. LaPlante, the Air Force's principal deputy assistant secretary for acquisition.
More than 192 Army programs could be affected if sequestration continues to occur, Shyu said, noting that some of the most significant repercussions would be felt in the AH-64E Apache and CH-47 Chinook helicopter programs. The Army will be in danger of losing the production contracts entirely, she said, exposing the government to $77 million in termination liabilities and a $1.4-billion increase in costs.
Under the continuing resolution, the services are not permitted to change how funds are appropriated from one year to the next, leaving some accounts with excess cash while others are underfunded. In fiscal year 2013, Congress authorized the transfer of some funds between accounts, but that flexibility has not been renewed for fiscal year 2014.
The inflexible funding means the Air Force is likely to have to cut the number of aircraft it buys this year, LaPlante said, singling out the F-35 Lightning II joint strike fighter program as an example.
"We'll lose somewhere between four and five airplanes in '14. And I could go through some other programs," he added.
Besides the impacts on procurement, sequestration's effects on the civilian workforce will continue to be felt nationwide, Stackley said.
"As many as 100,000 professional jobs are at risk as a result to the potential cuts to Navy and Marine Corps operations and programs," he noted.
And while DOD leaders have vowed to make every effort to protect civilians from further furloughs, the ongoing disruptions in training and productivity are translating to reduced readiness and decreased morale across the military and civilian workforce, the acquisitions chiefs said.
Ultimately, the ability to be good stewards of public funds depends upon a stable, predictable and adequate funding environment, Shyu said. Absent such an environment, the lives of service members and the safety and security of the nation are placed at risk, she added.
