The Defense Department is either going to have to change the way it does business or change the type of business it conducts, if it is going to survive the looming budget cuts, according to Center for Strategic and Budgetary Assessments analysts. The 2011 Budget Control Act may have clarified the Fiscal 2012 budget—DOD will get nearly $30 billion less than requested—but the forecast for Fiscal 2013 is anything but clear, write CSBA senior fellow Todd Harrison and research fellow Evan Braden Montgomery in Changing the Business of Defense, a backgrounder released Tuesday. Analysts predict the Fiscal 2013 defense budget could range anywhere from $472 billion to $524 billion, depending on the type of cuts enacted, they state. However, “the precise level of funding for Fiscal 2013 may not be known until after the November 2012 election and well into the next fiscal year,” they note. That’s why DOD needs to come up with a range of solutions, with reforming the compensation systems for its personnel and heavier reliance on unmanned systems topping that list, they write. “Such cuts can reduce costs without reducing military capabilities, although they may require politically difficult decisions,” they state.
The Air Force and Boeing agreed to a nearly $2.4 billion contract for a new lot of KC-46 aerial tankers on Nov. 21. The deal, announced by the Pentagon, is for 15 new aircraft in Lot 11 at a cost of $2.389 billion—some $159 million per tail.