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Budgets | Industry & Trends | Issues - Political | Lobbying | People | Policy - Procurement | USA

NDIA on Preparing for the Coming US Defense Budget Crunch

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DID has covered remarks from National Defense Industrial Association President Lawrence P. Farrell Jr. re: acquisition issues and procurement reform, and the need to improve defense manufacturing. Now, he discusses the current US debt and deficit, the October 2005 “England memo,” the commitments inherent to the Global War on Terror, and the maintenance and repair overhang. Cuts are almost certainly coming, he says, but they way in which cuts are made matters a great deal… “Procurement accounts, in the near term, could become bill-payers. While no major programs are expected to be eliminated wholesale, there will be all-around trimming in procurement, research, development and engineering programs. This tactic, known informally as “salami-slicing,” is frequently how the Defense Department gets around making tough choices. They cut a little piece off everything, and by doing so, they push every program’s schedule to the right. By all estimates, it is not a good technique for solving budget problems. From a political standpoint, it is always tough to cut a major military program that provides thousands of jobs around the country. From a financial and management perspective, however, it makes more sense to cut some programs, especially those still in early stages of development […]

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