DoD shields basic research, but other R&D will take serious budget hit

Thursday - 1/16/2014, 4:56am EST

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The Pentagon's top acquisition official says the final spending bill House and Senate negotiators unveiled this week will temporarily take some pressure off areas of DoD's budget. But, he says, he's still worried about cutbacks to what he believes are necessary levels of research and development spending for the department's future.

Frank Kendall, the undersecretary of Defense for acquisition, technology and logistics, said while the budget agreement adds money back to DoD's overall spending capacity in 2014 and 2015, the deal still doesn't plug holes in the Pentagon's research funding. Kendall estimated R&D funding will drop by as much as 20 percent compared to the department's initial requests.

Courtesy of DoD

Speaking at a conference organized by the American Institute of Aeronautics and Astronautics, he declined to offer explicit details on DoD's forthcoming 2015 budget proposal, but he strongly suggested that while the department's fundamental science and technology research will be shielded from cuts, applied research directed at producing specific capabilities will not.

"We're protecting our basic technology investments reasonably well. There's a lot of interest from a policy perspective out of the White House to do that, but that's only about $10 billion out of the $60 billion we spend on R&D," he said. "If you look at the accounts that are doing our new product development, whether it's the technology maturation phase or the engineering, manufacturing and development phase, those are coming down significantly. They came down last year and, I think, you'll see more of the same as we look at lower budget numbers going into the future."

Few products just beginning

Kendall said that's worrisome given the state of many of DoD's current projects. Since much of the acquisition enterprise has been focused on the immediate fights in the Middle East over the past decade, the military already has paid less attention to building future capability than it might have otherwise. He said cutting R&D budgets for the relative handful of future capabilities that have been approved to move forward but still are awaiting more technology maturation could seriously crimp the Defense Department's pipeline for new military hardware.

"When I talk to all our program executive officers, it's pretty much the same story. There are a number of programs that are fielded right now, there are a few products that are at the very beginning of the process where you don't have to spend much money, but there aren't very many things in that middle phase where you're doing the serious and expensive development work to actually get a product into the hands of the warfighters," Kendall said. "Given our long lead times, having a hole there is not a good thing."

Pentagon leaders have been warning since long before sequestration took effect that the sudden cuts would lead to a "hollow force" — one which looks properly shaped and sized on paper, but is not properly trained or equipped. Kendall says the missed opportunities for R&D in that middle phase will have much longer-lasting implications on the military than the many missed training exercises sequestration required.

"You can recover readiness relatively quickly. You can buy the parts, you can train the people," he said. "You can recover the modernization and production side of the house with whatever the lead time is for the item you're producing. But if you give up R&D, if you don't do the technology work, you don't get that time back. That's something that's really gone."

Kendall said the Pentagon has begun to take some modest internal steps to reallocate funding from the procurement of weapons systems to R&D for future systems, but he says the budget constraints on all of DoD's modernization accounts make it difficult to do much of that. To hedge against the risk of losing the defense industrial base's engineering capabilities, he said the department needs to take additional measures.

Return to the Perry approach?

Bill Perry, who went on to serve as Secretary of Defense under President Bill Clinton, was undersecretary of Defense research and engineering while the U.S. was cutting the Defense budget after the Vietnam War.

"He consciously invested in R&D for a number of programs that he knew the department would not be able to afford to put into production in any quantities," Kendall said. "A lot of our force today rests on those investments because in the 1980s we had a big defense buildup, and the things we built were the things Bill kept in R&D — the Abrams tank, the Apache helicopter, the F-15, the F-16, the F-18, the Aegis destroyer."

Kendall said it might be time to return to that kind of approach — directing R&D money in order to build at least a few prototypes of systems the Pentagon knows it can't afford to buy in big quantities in order to tee up programs for brighter budget days, and to prevent the overall research and development enterprise from atrophy.

"It moves us forward technically. It keeps our industrial base healthy from a design perspective and it keeps our design teams together," he said. "I believe firmly that you need continuity there. An awful lot of the information engineers bring to their practice every day is in their heads, and they get that from experience and trying things and having done them. There's also a need for a significant critical mass of effort where you're actually building things, so you can give people the confidence and the knowledge that they can build things that have never been built before. Doing prototyping is a way to preserve that aspect of the industrial base, which I think is central."

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