Navy's $35 Billion 'Efficiencies' Goal Depends on EFV Cancellation, Says Senior Official

1/26/2011
By Grace Jean
SAN DIEGO — The Marine Corps' Expeditionary Fighting Vehicle must be terminated for the Navy to be able to achieve its goal of $35 billion worth of "efficiencies" over the next five years, said Navy Undersecretary Robert O. Work.
Of the nearly $100 billion worth of efficienciesunveiled earlier this month by Defense Secretary Robert Gates, the Navy and Marine Corps are responsible for $35 billion. Those funds are being generated by shutting down several programs and facilities, and will be reallocated to other efforts, Work said Jan. 26 at West 2011, a defense industry conference sponsored by AFCEA and the U.S. Naval Institute.
“Everyone calls this a cut drill. It is not a cut drill—it was never a cut drill,” said Work. One of the larger chunks of savings is set to come from the cancellation of the Expeditionary Fighting Vehicle, an amphibious landing craft that the Marine Corps has been developing for nearly 15 years. The department poured $3.3 billion into the program, and was expected to spend $12 billion to acquire 573 vehicles.
Several members of Congress and EFV prime contractor General Dynamics are makinglast-ditch attempts to reverse the Pentagon's decision to end the program.
If the EFV were kept alive, between 2018 and 2025, it would consume most of the Marine Corps' ground combat vehicle budget, Work pointed out. It would eat up half of all Marine Corps procurement dollars and 90 percent of the annual maintenance budget for ground combat vehicles.
“It would not make a difference if that vehicle could do everything that we said it could do. We simply cannot afford it. The opportunity costs on the Marine Corps are too high,” said Work. The $2.8 billion that had been budgeted for EFV during the next five years will be reallocated to other Marine Corps’ ground tactical vehicles programs, he said. Of the $2.8 billion, $500 million is going toward a new amphibious vehicle program; $1 billion will help fund the service life extension program for the current amphibious assault vehicle; $400 million to accelerate by three years the development of the marine personnel carrier; $200 million to recapitalize the Humvee fleet; and $700 million to recapitalize the light armored vehicle fleet, Abrams tanks and the armored vehicle launch bridge.
Also part of the efficiencies package is the dismantling of Norfolk, Va.-based Second Fleet. Parts of the organization will be merged with U.S.Fleet Forces Command. Officials also decided to disestablish Carrier Strike Group Seven in San Diego, Carrier Air Wing 14 in Naval Air Station Lemoore, Calif., and Destroyer Squadron 24 in Mayport, Fla., and are dropping several submarine squadrons, including Squadron Two based in Groton, Conn., Squadron Three based in Pearl Harbor, Hawaii; and Squadron Eight based in Norfolk, Va.
“We were not forced to do this,” Work stressed. "These were deliberate consolidations.”
The Navy must be smart about reinvesting the savings, Work said.
One initiative is to increase the use of multi-year procurements for several programs, including the mission avionics and common cockpit for MH-60R and MH-60S helicopters, the F/A-18E/F Super Hornet fighter, the E-2D Advanced Hawkeye aircraft, and the DDG-51 Arleigh Burke destroyers' advanced missile defense radar configuration.
 
“These are all proposals to Congress; these are not done deals,” cautioned Work.
Next month, “When the president’s budget comes out, we will buy exactly what we said we would buy last year, for $8.5 billion less,” Work said.  “That’s through a combination of multi-year procurement contracts, of more efficient buying and the results of competition.”
But the Navy could face some resistance on Capitol Hill. “This year there will be a great debate between the deficit hawks and the defense hawks,” Work said.  That debate will be a very interesting one to watch, he later told reporters. “The Blue Dog Democrats got annihilated in the last election. Those would be the natural allies of the defense hawks. They just aren’t there,” he said. “I wouldn’t say that a smaller defense budget is a certainty, but I think the deficit hawks probably have a little bit of an edge.”
Work said he is worried about future budget cuts. “We are in the ebb tide. So the only question is, how far the tide will go out, and how fast it will recede. That keeps me up at night and it should keep you all up at night, too,” he told an audience of industry contractors and military service personnel. “I do wake up crying like a baby sometimes,” he quipped. “But I can assure you that regardless of what happens, we’re going to be able to weather this storm.”

Topics: Expeditionary Warfare, Procurement

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