Pentagon Must Improve ‘Not Acceptable’ Procurement, Carter Says

The U.S. Defense Department’s weapons buying system is “not acceptable” and steps will be taken to rein in costs, said President Barack Obama’s nominee to become deputy secretary of defense.

Although improved under a 2009 reform law, Pentagon procurement “is still not acceptable and I believe there are some additional actions we are going to need to take to get better value,” Ashton Carter said at his confirmation hearing.

This year’s deficit reduction law that seeks to cut $1.5 trillion in federal spending over 10 years is forcing the Pentagon to rein in weapons spending that grew by “habit of mind” when budgets were flush, according to Carter.

The Budget Control Act, signed Aug. 2 by President Barack Obama, calls for trimming $330 billion over 10 years from Pentagon spending plans. That means the department must “redouble its efforts” to control costs in weapons and research and reexamine all areas for affordability, Carter said in written answers to questions from the Senate Armed Services Committee before today’s hearing.

The Pentagon was operating under a “habit of mind born from an unrealistic belief that the defense budget would keep growing” as it did for most of the past decade, he said. There has been “unacceptable growth in far too many individual programs,” he said.

Source: Lockheed Martin

The Pentagon has estimated that it may cost as much as $1 trillion to operate the military’s fleet of F-35s for several decades. Close

The Pentagon has estimated that it may cost as much as $1 trillion to operate the... Read More

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Source: Lockheed Martin

The Pentagon has estimated that it may cost as much as $1 trillion to operate the military’s fleet of F-35s for several decades.

F-35 ‘Mainstay’

The Pentagon’s biggest program, Lockheed Martin Corp. (LMT)’s F-35 Joint Strike Fighter, is needed to fend off surface-to-air missiles and advanced fighter aircraft worldwide, Carter said in response to another question. He promised at the hearing further efforts to contain F-35 costs.

The $382 billion F-35 over the next decade will make up one-third of the Defense Department’s tactical air assets and will become the “mainstay of the force” by 2031, said Carter, who now serves as the Pentagon’s acquisition chief.

A preliminary Pentagon estimate says it may cost as much as $1 trillion to operate the fleet of F-35s for several decades. Lockheed Martin is developing different versions of the F-35 for the Air Force, Navy and Marine Corps.

“The department is taking a very detailed look at all aspects of JSF operations, support and sustainment to identify best value solutions to control the lifetime operating and support costs for the JSF fleet,” Carter said.

More Cuts Ahead

The Pentagon may face more cuts than in the deficit control law. A House-Senate supercommittee’s failure to come up with further savings would trigger an automatic cut of an additional $500 billion in defense spending over a decade, not including interest.

Earlier this year, Obama called for $400 billion in reductions to national security spending over a 10-year period starting in 2013. Carter told the Senate panel that a review to identify savings is still under way and will be completed as part of the Defense Department’s fiscal years 2013 to 2017 budget request.

As part of his answers to the Senate panel, Carter said that the Defense Department has a “special responsibility to monitor China’s military and to deter conflict.”

“The United States has been and should remain the pivotal military power in the Asia-Pacific region,” Carter said.

China is strengthening its nuclear deterrent and enhancing its strategic strike capabilities by modernizing its nuclear forces, and improving space and counter-space operations and computer network operations, according to Carter.

In response to China’s modernization, the U.S. should maintain its “global presence” and modernize anti-access and area denial technologies, he said.

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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