Air Force tells program managers: Don't expect reprieve from sequestration

Thursday - 12/12/2013, 8:35am EST

Jared Serbu reports.

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The federal spending accord House and Senate negotiators announced this week would ease up on sequestration cuts to the Defense Department during 2014.

But agreement or no, the Air Force is telling its program managers they shouldn't expect to see one nickel's worth of relief to their acquisition programs.

Amid ongoing budget uncertainty, the service has instructed its acquisition offices that they should plan to execute their programs at the same level they were funded during fiscal 2013's sequestered budget.

Officials don't yet know the impact of the budget deal on DoD with precision, said Lt. Gen. Charles Davis, the military deputy to the Air Force's assistant secretary for acquisition.

For now, they're only expecting it to reduce the Air Force's sequestration bill by a few billion dollars. And any relief that comes will be directed to restoring some of the military readiness that was degraded during the first year of the cuts as the military was forced to halt training exercises and reduce flying hours.

"As we have to make further trades across whatever numbers we're given, it really is going to come from our investment program," Davis said Thursday at the annual Air Force IT day hosted by AFCEA's Northern Virginia chapter. "And even within those investment programs, a large chunk of that money is already decided and already blocked off from being able to use for other activities. And believe it or not, there's a lot of folks out there who think they know how the Air Force should spend its budget a lot better than the Air Force does. That creates a unique challenge."

Davis said the limited decision space within the overall budget means that acquisition in the Air Force is now a zero sum game.

"Nobody brings a new idea or a new program to the table without it coming from an existing program," he said. "Nobody gets to go to Congress and say, 'I really wish you'd tell the Air Force they have to keep this' without something else being taken off the table. That just can't happen anymore. Everything we bring back in or add, something has to go. That's how we're building our budgets right now. For that reason, any redundant or excess capabilities are something we just can't afford by any stretch of the imagination."

At the same time, the Air Force says it can't afford to take a holiday on new procurement right now. After more than a decade of high tempo operations, the service says it desperately needs to recapitalize an aging fleet and tackle other high-priority areas like science and technology.

Davis said that means the Air Force's only choice is to reduce the cost drivers in its procurement programs.

"So we've asked all our program managers to tell us what that flat line means and how they're going to execute that. That means we have to curb our requirements, we have to manage what we want for technology, we have to be very judicious about the capabilities we ask for," he said. "And we need to make sure industry tells us what the costs of these requirements truly are going to be based on how they work that program. And if we can make some change to that requirement because there's a very steep knee in the curve somewhere, we need to hear that from you. You need to tell us 'no' more often, and we need to listen. That's something we're not very good at."

Davis said there are a "vast number" of ways in which the Air Force can get lower prices for products and services without cutting into industry profits or reducing the amount of capability it ultimately gets.

For starters, he said the Air Force needs to pay more attention to designing procurements that reduce the cost of the solicitation process on both the government and industry side.

"One thing we're seeing, whether it's a product program or a services program, the proposal process to get us to the point where we actually obligate money is too long, it's too expensive, it's too cumbersome, it's too painful," he said. "The Air Force traditionally loses somewhere around $600 million a year from our budgets every year, because the money expires before we can obligate it. That's for a lot of reasons. The program maybe slips or gets canceled or has a schedule that stretches out. But a lot of that money gets lost because we take way too long to get it on contract. That hurts the industry, that hurts the military, and it's something we just have to pay attention to."