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Satnews Daily
January 20th, 2014

Department of Defense—R&D Being Eroded By Budget Cuts (Analysis | Reports)

[SatNews] The decline in research and development brought on by budget cuts is contributing to the erosion of the U.S. military's technological superiority at an alarming rate, the undersecretary of defense for acquisition, technology and logistics said.

"Technological superiority is not assured," Frank Kendall told a conference yesterday sponsored by the Center for a New American Society. "The United States came out of the Cold War, and demonstrated in the first Persian Gulf War, a very significant superiority in military technology and the application of those technologies. And we've sort of had an assumption [during] the last 20-plus years that that {American] technological superiority would be a fact of life in the world."

The Defense Department has "a big part of sustaining the levels of [research and development] investment that I think we need," Kendall added. Despite the relief provided by a trillion dollar plus spending bill approved by Congress for 2014, Kendall said the department still faces heavy budget cuts. "We're still taking substantial cuts, and [2015] is much worse than '14 is," he said. "And then we don't know what will happen to us after that. So with budgets heading in that direction, and all the uncertainty we're dealing with, the Department of Defense has a very difficult planning problem."

Part of that planning problem, according to Kendall, is the uncertainty of how much force structure DoD will be able to retain. "There's always a tendency to hang onto force structure in order to do to the things we need to do in the world," he said. "But if we do hang onto that force structure, the consequence of that is R&D has to be cut," in order to pay salaries and readiness. And that's what you're seeing even with the appropriations bill the Senate just passed," Kendall said. "And it gets much worse as we go further out." Eventually, "if we know where the [budget] is going, we can get our force structure down to where we can get in balance between those different accounts that I mentioned," he said.

The undersecretary laid out three points supporting his concern for the erosion of U.S. technological superiority. "[Research and development] is not a variable cost. There's a tendency in the Defense Department, when we cut budgets, to kind of cut everything. But what drives R&D is the rate of modernization that we desire. [It] is really not dependent on the size of the force structure."

Kendall's second point is time is not a recoverable asset. R&D really buys that time in something of a race for technological superiority, he said. "I can buy back readiness, I can increase force structure, but I don't have any way to buy back the time it takes me to get a new product," Kendall said.

That timeline in the acquisitions business is relatively long, Kendall said, noting how often he gets remarks about the length of an acquisitions process which hasn't changed much over the years. Essentially, Kendall said, it takes about two years before the department can get a budget to spend serious money on an idea. "Then we have two or three years to four years of risk reduction where we develop the technology to where we're confident we can put it into a product," he said. "Then we have five or six years of development of making the product ready for production." Combine that with the "few years of buying enough numbers to make a difference militarily," Kendall said, and the timeline easily becomes 10 or 15 years.

"So for that reason as well, I'm concerned," he said. "I'm trying to do a lot of things now to hedge against these [challenges] and make people aware of these things and do more about them."

Kendall reiterated how important he believes research and development is to maintaining DoD's edge in technological superiority.

"It's critical to the department, it's critical to our future," he said. "It is not 'the wolf closest to the sled' right now, necessarily. But I think it is absolutely paramount that we keep our R&D budgets funded."