Framed against the backdrop of sequestration, the drawdown in Iraq and Afghanistan, and the realistic implications of the military’s proposed pivot toward Asia, one might assume that the Army’s new budget might look rather different from last year: leaner, more focused, and acutely aware of the fiscal pressures the country faces. Sadly, it does not appear this is the case. Though there are some actual cuts, the majority of the bigger projects have simply been pushed down the line. As a general trend, small, token decreases in the immediate FY14-16 timeframe are offset by increases (sometimes disproportionately large) in FY17 and FY18.
The biggest driver for future army spending has undoubtedly been the Ground Combat Vehicle (GCV), which is still in the R&D phase (Manned Ground Vehicle – PE: 0605625A). Though the program has been wracked with uncertainty and there has been speculation that it would be cancelled, GCV escaped relatively unscathed. Low Rate Initial Production (LRIP) has been pushed back one year from first quarter 2018 to first quarter 2019 and while funding has indeed been reduced over the next few years, it’s not as big of a cut as it may seem at first glance. The FY13 proposed GCV LRIP was, in our opinion, overly optimistic. Those funding levels reflected that optimism, and so the revised numbers from the new budget are less of a *true* cut to the program and more a reflection of appropriate funding for a more realistic timeline.
The Stryker family of vehicles actually secured huge gains in the new budget. For the vehicle itself (PE: G85100), the increases were in multiples throughout the program. FY14 now receives approximately 3.7 times its 2013 request, FY15 is an astonishing 6.7 times its previous levels, and there are now new purchases in FY16. As with the GCV program, these increases are likely cushioning for the inevitable political back-and-forth over the next couple of years’ budgets. Stryker mods (PE GE0100) also grew, albeit only in the out-years. 2014 funding was cut to approximately 32%, returning to 95% of 2015 levels, 85% of 2016 levels, but then jumps to nearly 500% of 2017 funding levels ($383.8 million vs. $77.4 million). Funding is extended through 2018 at 125% of the 2017 levels, and the total program value has more than doubled from $950 million to $2.1 billion.
Other platform modifications have been revised to more realistic spending patterns. The M1 Abrams Mod line (PE: GA0700) has taken cuts approaching 50% through 2017, but 2018 seems to pick back up to normal levels and the total program cost remains unchanged in the long run. The Paladin Integrated Management Mod in Service (PE: GZ0410) remains entirely the same as the previous year’s budget and continues to be funded through 2018. With no real replacement in the works for a perfectly functional vehicle, the M88A2 Hercules (PE: GA0570) received another round of orders in 2014. Program funding was originally slated to end this year. This purchase was slightly offset by some cuts to the M88 FOV Mods line (PE: G80571) though the program still continues without any set point of completion. FIST Vehicles Mods (PE: GZ2300) took the largest and most consistent hits, as funding level sinks to approximately a third of its prior funding levels in 2014 before being all but entirely cut thereafter.
Realistically, most of the increases in the out-years are likely opening positions for later bargaining – shoot high, but prepare for down to whatever you can get. It’s leeway, but it sure would be nice to see some realistic predictions for the future.
Oh well, here’s to fiscal responsibility.