BUDGET

Carter Optimistic About Beating Nuclear Modernization Cost Estimates

9/15/2016
By Jon Harper
Secretary of Defense Ashton Carter speaks to National Defense reporter Jon Harper during a Sept. 14 interview on board Carter's plane en route to Andrews Air Force Base, Maryland.

ON BOARD A U.S. MILITARY AIRCRAFT — As the Defense Department faces massive nuclear modernization bills, Secretary of Defense Ashton Carter sees opportunities to beat current cost estimates.

The Navy’s Ohio-class replacement ballistic missile submarine program — the service’s top acquisition priority — is projected to cost about $100 billion. The Air Force’s B-21 bomber fleet — which is being designed to conduct nuclear as well as conventional missions — is expected to cost at least $80 billion, possibly much more, while the long-range standoff cruise missile arsenal is estimated to come in at $20 billion to $30 billion.

The Air Force estimated that the ground-based strategic deterrent intercontinental ballistic missile program would cost about $62 billion, while the Pentagon’s cost assessment and program evaluation office put the potential price tag at $85 billion or more in the coming decades.

“If you look at the design carefully and how things are manufactured carefully, you can reduce costs in [the nuclear programs] and all of our other programs,” Carter told National Defense and online media outlet Breaking Defense in a Sept. 14 interview on board his plane en route to Andrews Air Force Base, Maryland.

“As a former acquisition executive I never accepted the cost estimates, and I always believe we should be better than that if we can,” he added. Carter previously served as the undersecretary of defense for acquisition, technology and logistics, the Pentagon’s top procurement officer.

“We always try to do the best, accurate estimates,” he said. “But they are just estimates, and we should try to exceed that in terms of the performance of the acquisition system.”

The Pentagon chief said recent history shows that reducing program costs is achievable. “We’ve been able to do that with ‘Better Buying Power’ [practices] over the last several years,” he said. “The statistics show that we are capable of undershooting … our own cost estimates.”

Carter isn’t the only high-ranking defense official to suggest that existing cost estimates for nuclear modernization programs might be overshooting. During a recent media roundtable at the Pentagon, Secretary of the Air Force Deborah Lee James questioned the Defense Department’s methodology for assessing the price tag of the ground-based strategic deterrent.

“We have not collectively done a cost estimate of this type for probably more than 40 years,” she said. “The data that everybody is using to try to build up these cost estimates is somewhat dated simply because we haven’t done it in so long.”

James expects the projections to change as the program advances.

“As we go forward, as we get the proposals back from industry, this will inform what I believe will be refinements in that cost estimate over time as we learn more,” she said. “The point is, if you haven’t done it in 40 years you need to refine it as you go along.”
 
Analysts are warning that the Pentagon is facing a modernization “bow wave” in the 2020s when it plans to invest heavily in a range of expensive nuclear and conventional programs. Carter expects the U.S. government to pay the bills required for comprehensive nuclear modernization even if defense officials aren’t able to beat current cost estimates.
 
“We will work to reduce the cost of those programs as we always do but we are committed to a safe, secure [and] reliable triad,” he said.
 
“Each part of that … is going to undergo a modernization,” he added. “I’m confident that we will spend the money because it is a bedrock capability. Fortunately it’s not one that we need to use, but it’s fundamental to our security.”

Topics: Budget, Strategic Weapons

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