Transcript Slide 1
Can the DoD Afford Its Future? Thought • Much is said about the differences between Building a Program and Executing a Budget – Many in this room do both • What should budget formulators and executors understand about how a Program is built and the multiple challenges we face annually? The Army of the Future ORM DEFENSE REF INITIATIVE REPORT William S. Cohen Secretary of Defense November 199 7 Observations of the Past Agenda • • • • • Strategic Context QDR Forces vs Infrastructure ARFORGEN Supply and Demand Challenges • Forces View • Resources View • Requirements View • Capital vs Operations • Balance • Summary 2 Strategic Context Some Perspective Pre-2001 POM 12-16 Conflict Episodic Persistent Providing Forces Demand Based Supply Based Readiness Tiered Cyclic Reserve Component Strategic Reserve Operational Force Strategic Inflection Point—”…occurs when the old strategic model dissolves and gives way to the new….a point in time…when fundamentals are about to change.” Grove, 1996 Structure AOE Modular Force Operating Concept AirLand Battle Full Spectrum Operations Equipping Unit Unit and Pooling Manning Individual Unit Management HQDA-Centric Enterprise POM 12-16 transformational? Yes or No Are we at a strategic inflection point? Yes or No Answers to these questions impact the Army narrative for POM 12-16 Some Opportunities: Opportunity to institutionalize the Army three major initiatives since 2001—Modularity, ARFORGEN, and the RC as an operational force Opportunity to continue to gain acceptance of the Army’s supply-based ARFORGEN model Opportunity to adopt an enterprise approach and reform requirements and resource processes Opportunity to restore operational and strategic depth Opportunity to meet combatant commander and service-specific requirements while achieving sustainable levels of OPTEMPO and PERSTEMPO across all components 3 ’93 Bottom-Up Review Moderate Perceived Capability Emphasis Low Lesser Contingencies High q 2 MTWs q State-on-State q Cross Border Conflict n n nn Major Theater War Strategic Capability ’01 QDR Citadel CitadelI I&&IIII q 1-4-2-1 q Future Peer q Ungoverned Areas q Asymmetric Threats Low Lesser Contingencies Major Theater War Strategic Capability Future Near Peer ’97 QDR High nn Moderate q 2 MTWs q State-on-State q Cross Border Conflict q Smaller Scale Contingencies Low Lesser Contingencies Future Near Peer nn Moderate Desert DesertStorm Storm Soviet SovietCollapse Collapse Perceived Capability Emphasis High Perceived Capability Emphasis Perceived Capability Emphasis Two Decades of Strategic Evolution High Somalia, Somalia, Bosnia, Bosnia, Rwanda, Rwanda, Haiti Haiti q Industrial Age Near Peer Major Theater War Future Near Peer Strategic Capability ’05 Defense Strategy n n nn nn q GWoT / Ungoverned Areas q Irregular Warfare q 1-4-2-1 (State-on-State War) q Low-End Asymmetric Low Lesser Contingencies Major Theater War Strategic Capability 11 11Sept Sept/ /GWoT GWoT OEF OEF/ /OIF OIF 44Challenges Challenges q Disruptive Technologies q Superiority in the Commons (Space, Cyber, Seas, Air) Future Near Peer 4 QDR 2010 • Near Term QDR – Wartime QDR – Priority on current conflicts – Broad focus / Broad portfolio What would the QDR 2010 chart portray? • Supports rotational readiness • Consolidates resources to create a 12th AC CAB, procures a 13th AC CAB, and converts an HBCT to an SBCT • Consolidates USCYBERCOM and creates Service component commands for cyber operations “Our judgment with regard to the overall capacity of the force reflects in part the heavy demands being placed on portions of the force by ongoing operations. As those demands evolve, so too might the appropriate size and mix of forces.” 5 Forces vs Infrastructure QDR, NDP 1997 BottomUp Review 1993 Program Reviews Budget Reviews BRAC 1991 Defense Management Report 1989 QDR 2006 Commission on Roles/Missions 1995 Berlin Wall BRAC 1988 QDR 2001 BRAC 1993 BRAC 1995 9/11 GWOT BRAC 2005 Defense Reform Initiative 1997 Business Initiative Council 2001 Seeking Effectiveness and Efficiencies 6 Forces View 30 25 OIF 1/2 & OEF IV/V OIF / OEF 04-06 OIF / OEF 05-07 OIF / OEF 06-08OIF / OEF 07-09 OIF / OEF 08 OIF / OEF 09 20 15 10 5 Sep-09 Apr-09 Nov-08 Jun-08 Jan-08 Aug-07 Mar-07 Oct-06 May-06 Dec-05 Jul-05 Feb-05 Sep-04 Apr-04 Nov-03 Jun-03 Jan-03 Aug-02 Mar-02 Oct-01 0 Demand Exceeded Supply Expectations 8 Requirements View Over Time Expect ~$11B per year in emerging requirements Demand Exceeds Supply 9 POM 12-17 Emerging Requirements Senior Leaders face significant challenges to Refine the 21st Century Army Estimated FY12-17 TOA More Flexibility Requirements 41 Strategic Issues from POM 12-17 Strategic Choices & CY10 Objectives Fueled $21B to $65B in additional emerging requirements across POM 12-17 Less Flexibility Institutional Adaption Modernization Strategy Manning Strategy Operationalize the RC FY12-17 Strategic Choices CY10 Objectives ARGFORGEN Tng Mgmt Force Mix POM 12-17 Installations/Quality of Life 10 Resources View Supply Projections Missed Demand 11 Capital vs. Operations Shifting Capital to Operating Capital ~ 25% Shifting Operating to Capital Efficiencies difficult to find Capital more fungible Small to leverage – – Shifts one way – Reduces capability LSS projects MIL --> Civ conversions … which turned into Mil --> Nil conversions Operations ~ 75% – Reductions of DA Civilians and Contractors in the work force BIC Iniatives Hollowing can result Reduces capacity 12 Balancing Need = ƒ (Manning, Training, Sustaining, Base Support, Equipping, Military Construction) Operations and Support 25% Capital Capital 75% Operations Title X Function Manning Training Sustaining Equipping Stationing Organizing ? ? Operations Investment Current ratio sustained through the application of supplemental funding Even if the total Army budget shrinks, there will be pressure to maintain the current level of Operations and Support expenditures Primary Driver(s) Based on these cost Based on End Strength drivers, can the Army (or Based on Robustness of Training any Service) Based on Operations Tempo proportionally scale Shortages, Recap/Upgrade, Modernization back its expenditures? Housing, Family Programs, Facilities, Construction Operating/ Generating Forces; Reserve Components 13 Balancing? What kind of Army does the Nation need? How capable should that Army be? Topline Driven? Need Driven? Balanced? Need = Capability + Capacity • Capability Approach (Adjust Investment Strategy – Mortgage current force) – Define and procure future force; Maintain current capabilities at reduced need and support levels – Reduce Manpower and associated support costs • Capacity Approach: – Maintain size of force with associated support costs – Mortgage future – maintain current investments 14 Annual Cycle – Another View Fueling Requirement Growth Realignment Strategy Updated Strategy IPM wheel ... Intervention Planning/ Programming Planning Decentralized Activities Centralized Activities Program Analysis Budget Formulation External Reporting Operational & Management Reporting Budget Execution Immediate Needs of the Nation 15 Putting It Together • Discussions ongoing as to future of the Army • Department will face tough choices in the future – Continued reliance on OCO not a viable option – Operations and Support needs may force a migration from capital investment – Future Force investment may force a migration from Operations and Support – Doing both may not be in the best interest of the Nation 16