emerging themes from 2013 sequester, 2014 budget , and ... · emerging themes from 2013 sequester,...

Emerging Themes from 2013 Sequester, 2014 Budget Request, and “SCMR”; Plus “Winners & Losers” from just-

released “2014 DoD Greenbook”

James McAleese McAleese & Associates, P.C.

21515 Ridgetop Circle, Suite 100 Sterling, Virginia 20166

Telephone: 703-421-0104; Facsimile: 703-421-0108 www.mcaleese.com

Table of Contents

1. Emerging Themes from 2013 Sequester, 2014 Budget Request, and “SCMR” (p. 2)

2. 2014 “Winners & Losers” (p. 3)

3. 2014-2018 Army “Winners & Losers” (“2014 DoD Greenbook” just released late Thursday, May 9th). (p. 4)

4. 2014-2018 Navy “Winners & Losers” (“2014 DoD Greenbook” just released late Thursday, May 9th). (p. 5)

5. 2014-2018 USAF “Winners & Losers” (“2014 DoD Greenbook” just released late Thursday, May 9th). (p. 6)

6. Draft 2013 Reprogramming Request “Winners & Losers” (p. 7)

7. 2013 Sequester Implementation: [Now falling to $37B 2013 total]

Army will receive ~$5B under draft 2013 Reprogramming; but Army still has ~$12B-$13B Sequester/OCO Shortfall. (Training/Depot Maintenance/BOS/FSRM). (p. 8)

Navy’s 2013 Sequester is ~$11B, ($4.4B O&M, and larger $6.3B to RDT&E/Procurement). Navy will be forced to favor Shipbuilding/SCN, and Ship Operations/Ship Depot O&M; over Aircraft/APN and Air Operations/Depot O&M. (p. 9)

USAF has $12.4B Sequester shortfall, with primary-hit to Combat Air Forces O&M (-203K Flying-Hours; plus -18% cut to Weapons System Sustainment). USAF will likely “Reprogram” to protect F-35 SDD & CTOL, KC-46A Schedule, and LRS-B. (p. 10).

8. “2014 O&M Base” Back-up Charts: (p. 11-14)

• OSD Leadership is committed to “Rebalance-to-Pacific”.

• 2013 Sequester is now reality. Immediate-fight is avoiding 2014 Sequester.

• “SCMR” will target 2014-2015 “Overhead” in both OSD/“Fourth Estate”, plus Services’ “Field Agencies.”

• “AA/AD” challenges of Counter-Space, EW, Anti-Jamming, and Classified, remain funded-priorities.

• Harsh 2013 Sequester, and “SCMR” (potential 2014-2015 Sequester), are dramatically-reducing DoD’s ability to intervene, to protect traditional Defense “Industrial Base”. Market Forces, and outcome from “bet-the-company” Program-competitions, will dictate ultimate “Winners & Losers.” (Dr. Carter: National Press Club, May 7th; NDIA Eisenhower Award, May 3rd).

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Emerging Themes from 2013 Sequester, 2014 Budget Request, and “SCMR”

“SCMR” Themes

• “Capacity v. Capability”

• “Warfighting Approaches”

• “Capacity v. Readiness”

• “DOD’s Force Mix”

• “Innovation, New Operational Concepts, New Technology”

• “Acquisition Efficiencies”

• “Partnering with Industry”

• “Streamlining DOD”

• “Headquarters Consolidation”

• “IT-Consolidation”

• “Intelligence Issues”

• “Defense Health”

• “Working Capital Fund”

• “Civ/Mil Compensation”

Source: Inside Defense (May 8, 2013)

USAF is maintaining Force Structure, under $4B Top-line upside in 2014.

• Sequester heavily-impacts Combat Air Forces (ACC), but less to Mobility Air Forces (AMC) under protected OEF “Air Bridge”.

• Sequester equally-impacts both O&M and Investment Accounts. Expect USAF to request Reprogramming from lowest-priority programs, to protect highest-priorities of F-35 SDD and CTOL; KC-46A SDD; and LRS-B Development.

• 2014 Congressional-reaction on F-35 and Tanker were favorable; (limited to constituent-driven Global Hawk, ECSS termination, and Sexual Assault).

• USAF is clearly targeting lower-priority and single-purpose platforms, to support aggressive F-35 CTOL and KC-46 Procurement in 2015-2017. (e.g. “Other Aircraft” Procurement, and Aircraft “Mods”). 4

2014 “Winner & Losers”

Army will be hit-hardest.

• Army is suffering from ≈$7.5B “Facts-of-life” OCO-spike. Plus $12B Sequester.

• Unique-impact from Sequester, and OCO Cost-growth, is forcing Army to prioritize O&M Training/Readiness/All- Volunteer Force, over Modernization.

Navy will be biggest “Winner” overall, due to big 2013-2014 Shipbuilding victories, (CVN-79; CVN-72 RCOH; 2013 DDG-51 plus-up; 2013 NSSN AP plus-up; etc.); plus clear-relevance to “Rebalancing-to-Pacific”, and contested “AA/AD” environment.

• Sequester has bigger-impact on Navy Investment Accounts than O&M.

• Primary 2014 challenge is Congressional reaction, to -20 Ship-retirement in 2015. (McCain/Forbes/Mabus/Greenert).

• 2014 Navy Shipbuilding Plan will be acceptable to Congress. (Formally sent to Congress May 10th).

• Navy is clearly deferring select 2014-2018 Aircraft/APN Programs (e.g. BAMS; MQ-8; E-2D; P-8), to protect Shipbuilding/SCN. (But still expect 2014 Congressional Super Hornet production-extension).

Winners Losers

• Tracked Combat Vehicles (AMPV and GCV, but tough now for Abrams and Bradley).

• Other Procurement, Army/OPA (“Network” of WIN-T/JTRS-HMS; and JLTV).

• Ammunition Procurement (Was not targeted as“Billpayer”).

• Aircraft Procurement (LUH; AH-64 “New Build”; CH-47; UH-60; but Kiowa Mods Up).

• RDT&E (Adequate “Sustaining Engineering” for legacy platforms; but IT/ERP appears excessive).

• Missile Procurement (MSE Missile Production; Patriot Mods).

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2012 Actuals 2013 Actuals 2014 Request New 2015 Plan New 2016 Plan New 2017 Plan New 2018 Plan

OPA

RDT&E

Aircraft

W&TCV

Ammo

Missile

Source: 2014 DoD Green Book (released May 9th); 2014 Army “P-1/P-2” and “R-1/R-2” Budget Roll-ups; Final 2013 Defense Appropriations Act.

2011-2013 include Base/OCO. 2014-2017 are Base only. 2014 OCO expected in May.

• 2014-2018 Army “Winners”: Tracked Combat Vehicles; Wheeled Tactical Vehicles; Network; and Ammo.

• 2014-2018 Army “Losers”: Aircraft Procurement; RDT&E; and Missile Procurement. [“2014 Greenbook”, just released]

RDT&E: $8B Base

OPA: $6.5B Base

Tactical & Suppt. Vehicles: $455M Comm & Elect: $4.3B Other Suppt. Equip.: $1.7B Spare & Repair Parts: $60M

Aircraft: $5B Base

Aircraft: $3.6B Mod. of Aircraft: $1B Support Equip. & Facil.: $382M

Other Missiles: $981M Mod. of Missiles: $331M Support Equip. & Facil.: $11M Missiles: $1.3B Base Ammo: $1.5B Base

Tracked Combat Vehicles: $1.2B Weapons & Other Combat Vehicles: $363M

W&TCV: $1.6B Base

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Aircraft

RDT&E

SCN

OPN

Weapons

USMC Procurement

Ammo (Navy & USMC)

2011-2013 include Base/OCO. 2014-2017 are Base only. 2014 OCO expected in May.

Aircraft: $17.9B Base

Combat Aircraft: $13.1B Trainer Aircraft: $249M Other Aircraft: $295M Mod. of Aircraft: $2.6B Spares & Repair Parts: $1.1B Support Equip & Fac.: $534M

Weapons: $3.1B Base

Ballistic Missiles: $1.1B Other Missiles: $1.5B Torpedoes: $267M Other Weapons: $174M

Ammo: $589M Base

Other Warships: $12.2B Amphibious Ships: $527M Aux., Craft, Prior-Year Costs: $1.3B

SCN: $14.1B Base

Ships Support Equipment: $1.7B Communications & Electronics: $2.3B Aviation Support Equipment: $503M Ordnance Support Equipment: $787M Personnel/Command Sup. Equip.: $601M

USMC: $1.3B Base (Expect OCO “bump”)

Wpns & Cmbt Vehicle: $112M Guided Missiles & Equip.: $87M Comm. & Elect.: $710M Sup. Vehicles: $106M Eng. & Other Equip.: $314M

RDT&E: $16B Base

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Source: 2014 DoD Green Book (released May 9th); 2014 Navy “P-1/P-2” and “R-1/R-2” Budget Roll-ups; Final 2013 Defense Appropriations Act.

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Winners Losers

• Shipbuilding (CVN-79; CVN-72 RCOH; NSSN; DDG-51; LCS)

• Aircraft/APN (Growlers; expect Congressional SH plus-up; F-35 STOVL/CV; but many Programs deferred/stretched (BAMS/E-2D/P-8A/Firescout), to fund SCN).

• Other Procurement, Navy/OPN (“Communications and Electronics”, and Ship Support Equipment. “SSE” is partial 2013 Sequester “relief-valve”).

• Navy Weapons Procurement (Trident II Mods; Standard Missile)

• Ammunition Procurement (Flat-lined)

• USMC Procurement (Planned growth to $2.2B 2018, but “Communications and Electronics” is threatening to crowd-out “Weapons and Combat Vehicles” (ACV/MPC) and “Support Vehicles” (JLTV).

• RDT&E (“Billpayer” in 2017-2018 for SCN. But good 2014-2016 funding for NGJ; AMDR; VXX; CH-53K; SSBN(X); UCLASS. Visible “AA/AD” S&T Funding).

OPN: $6.3B Base

• 2014-2018 Navy “Winners”: Shipbuilding; Aircraft/APN; Other Procurement; Weapons Procurement. [“2014 Greenbook”, just released]

• 2014-2018 Navy “Losers”: Ammo; USMC Procurement; RDT&E overall.

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RDT&E

OPAF

Aircraft

Missile

Ammo

2011-2013 include Base/OCO. 2014-2017 are Base only. Expect OCO in May. RDT&E: $25.7B Base

Aircraft: $11.4B Base Combat Aircraft: $3.4B Airlift Aircraft: $1.4B Other Aircraft: $1.1B Mod. of Inservice Aircraft: $3.3B Aircraft Spares & Repair Parts: $463M Aircraft Supt Equip & Fac.: $1.6B

Ballistic Missiles: $39M Other Missiles: $843M Mod. of In-service Missiles: $34M Other Support: $4.3B

Missiles: $5.3B Base

Ammo: $759M

OPAF: $16.8B Base (Expect OCO “bump”)

Vehicular Equipment: $85M Elect. & Telecomm.: $1.3B Other Base Maint. & Sup. Equip.: $15.3B [Classified]

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Source: 2014 DoD Green Book (released May 9th); 2014 USAF “P-1/P-2” and “R-1/R-2” Budget Roll-ups; Final 2013 Defense Appropriations Act.

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Winners Losers

• Aircraft Procurement (F-35 CTOL; KC-46A 2015 Procurement; C-130J Recap; F-15 AESA; F-16 CAPES; but fall-off in MQ-9; C-5 RERP; and specialty–aircraft mods).

• Missile/Space Procurement (AMRAAM & AIM-9X immediately. But large-growth in 2016-2018 for AEHF; SBIRS-High; GPS-III; EELV).

• Other Procurement Air Force ($15B Classified remains priority. Expect 2014 OCO “bump”).

• Ammunition Procurement (Flat-lined)

• RDT&E (Large $12B Classified Component (~46%). LRS-B grows from $380M 2014, to $2.8B 2018. But magnitude of overall USAF “new-starts” appears to drop off. (Appearance of being Over-programmed. Potential “Billpayer” under worst-case 2014-2015 Sequester).

• 2014-2018 USAF “Winners”: Aircraft Procurement; Missile/Space Procurement.

• 2014-2018 USAF “Losers”: Ammo; RDT&E. [“2014 Greenbook”, just released]

Army:

• Army clearly driven by $7.5B OCO/OEF Cost-growth.

• OEF Equipment Retrograde [“Second Destination Transportation” O&M], and LOGCAP O&M, were the two primary Winners, with combined +$5B increase.

• Army targeted specific Programs that were curtailed in 2014 Budget Request [e.g., AH-64 “New Build”; Stryker; FMTV; HMMWV Recap; with WIN-T targeted for Contract Award delay; and targeting of both Soldier OEF Equipping and JIEDDO].

• Majority of 2013 fully-funded MRAP “Mods” were specifically-postponed for “12 months”. Expect 2014 OCO “bump”. 2012 ANSF was also specifically-targeted, to fund Navy & USAF “Fuel-Costs”.

Navy/USMC:

• USMC primarily-driven by Sequester, (portion of USMC Flying Hours cut restored).

• Navy primarily-driven by Sequester, (portion of “Ship Surface Maintenance” O&M restored).

• Navy took small hits to $3B Weapons Procurement Account (Trident II, AMRAAM, AARGM).

USAF:

• USAF increased 2013 O&M by ≈$1.9B, to support: 1) $1.1B 2013 Operating Forces OCO; 2) $473M 2013 OCO BOS and Flying Hours; and 3) $200M 2013 OCO Mobilization O&M reimbursement of TRANSCOM Working Capital Accounts during Sequester.

• Cuts to USAF Aircraft Procurement Account were extremely-modest, focused on Aircraft “Mods” (MQ-9; MC-130; C-130; U-2; EC-130 Compass Call; LAIRCM; etc.).

• Space/Missile Procurement was a significant “Billpayer”, because of SBIRS-High schedule-slippage; GPS-OCX schedule; and Space Fence

contract award delays.

Defense Agencies/“DoD-Wide”:

• “DoD-Wide” primarily-focused on MDA Cost-growth (shift of Aegis BMD Procurement, to Aegis BMD RDT&E); and DLA for $1.4B “Fuel-bill”, for Navy & USAF. (OSD targeted 2013 DoD-wide Working Capital Accounts, plus 2012-2013 OCO ANSF, to fund $1.4B “Fuel Bill”; relieving pressure on both Navy and USAF).

~$9B imminent 2013 DoD Reprogramming Request allows Army to address most of $7.5B OCO cost-growth; USMC to restore "Flying Hours"; Navy to restore "Ship Depot"

O&M; large USAF O&M "spike" to CENTCOM; with "Fuel-bill" allocated to OSD.

Source: Draft May 2013 DoD Reprogramming Request [Draft, 62-page Reprogramming, has full-structure, suggesting “near-final” within OSD Decision-making chain.]

Source: Army CR/Sequester Charts to Congress

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Army will receive ~$5B under 2013 Reprogramming; but Army still has ~$12B-$13B Sequester/OCO Shortfall. (Training/Depot Maintenance/BOS/FSRM). • Army ASALT Shyu: “…$12B reduction to the Army’s budget…incorporates a $6B reduction in Army’s

operation and maintenance accounts…a reduction of about $3B in Army Procurement accounts…and almost a $1B reduction in RDT&E…” (HASC-TALF, Feb. 28, 2013).

Source: Navy CR/Sequester Charts to Congress 10

Potential Navy Actions Fleet-Wide: Sequestration ($4B O&M; $7.76B Investment Accounts)

Navy’s 2013 Sequester is ~$11B, ($4.4B O&M, and larger $6.3B to RDT&E/Procurement). Navy will be forced to favor Shipbuilding/SCN, and Ship

Operations/Ship Depot O&M; over Aircraft/APN and Air Operations/Depot O&M. • ASNRDA Stackley:“[S]equestration…would result in a loss of more than $1.0 billion in aircraft production…F-35 Joint Strike Fighter…

P-8 Poseidon…E-2D Hawkeye...” (HASC-TALF, Feb. 28, 2013).

• “Early [RDT&E]…will be impacted by sequestration…more than $1.6 billion dollars: Delays in Joint Strike Fighter… A two-year delay in the MQ-4/Triton Unmanned Air System [BAMS]; Delays in CH-53K development...” (HASC-TALF, Feb. 28, 2013).

Source: USAF CR/Sequester Charts to Congress

USAF has $12.4B Sequester shortfall, with primary-hit to Combat Air Forces O&M (-203K Flying-Hours; plus -18% cut to Weapons System Sustainment). USAF will likely

“Reprogram” to protect F-35 SDD & CTOL, KC-46A Schedule, and LRS-B.

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• USAF-AQ, LTG Davis: “[O]ur top three priority programs -- the tanker, the bomber, the F-35 -- are about 15 percent of [investment accounts] budget ... those have to be modernized. So that means that other programs of lower priority, if we're given the flexibility, will have to pay that 10 percent that we'll drop from those programs. (HASC-TALF, Feb. 28, 2013).

• “Sequestration … F-35A …would see reductions of up to five aircraft…[from] 19 in FY13.” (HASC-TALF, Feb. 28, 2013).

“2014 O&M Base” Back-up Charts [Expect 2014 OCO Request late May 2013. McAleese currently-expects ~$65B-$75B 2014 OCO Request].

• Army’s $35B 2014 Base O&M Request

• Navy’s $40B 2014 Base O&M Request

• USAF’s $37B 2014 Base O&M Request

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FY2012 Actuals FY2013 Actuals FY2014 Request

Operating Forces Base Operating Forces Base + OCO

Admin & Servicewide Activities Base Admin & Servicewide Activities Base + OCO

Training & Recruiting Base Mobilization Base

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“Training & Recruiting”, and “Mobilization” Accounts, did not Request any OCO Funding in 2012 or 2013.

Operating Forces: $21.1B Base (Expect OCO “bump”)

Training & Recruiting: $4.8B Base

Mobilization: $559M Base

Land Forces: $4.5B Base

Land Forces Readiness: $5.5B Base

Land Forces Readiness Support: $11.1B Base

Logistics Ops: $2.6B Base (Expect OCO “bump”)

Servicewide Support: $4.5B Base

Classified [MIP]: $1B Base (Expect OCO “bump”)

Army’s $35B 2014 Base O&M Request: Dominant O&M Base Accounts are “Force Readiness Operations Support” (Readiness/Training), Base Operations Support, and “FSRM”. Expect major 2014 OCO “bump”, (to avoid repetition of $7.5B 2013 OCO Overrun). “Operating Forces”

O&M Accounts are falling; suggesting that Army is “self-protecting” against 2014 Sequester, by refusing to lower OCO O&M at same-speed as 2014 OEF Troop Draw-down.

• “Maneuver Units”; “Echelons-Above-Brigade”; “Theater-level-Assets”; and “Land Forces Operations Support”, were all cut sharply. Expect 2014 OCO “bump” in Theater-level-Assets, and Land Forces Operations Support. Depot Maintenance also took significant 2014 Base cut, but expect 2014 OCO “bump” in separate “Reset” O&M Account.

[2014 Budget Request includes Base Budget only. 2014 OCO Request is expected in May 2013]

Winners (Base only) Flat-lined (Base only) Losers (Base only)

• Servicewide Trans: $690B

• Theater Level Assets: $602M

• Land Forces Ops Support (CTCs): $1B

• Aviation Assets: $1.3B

• Force Readiness Ops Support: $3.6B

• Base Ops Support: $7.3B [Flat at original 2013 Base Request. Congress plussed-up 2013 to $7.8B.]

• Servicewide Communications: $1.6B

• Land Forces Depot Maintenance: $1.5B [$1.8B final combined 2013 Base/OCO funding.]

• Maneuver Units: $888M

• FSRM: $2.8B [Congress plussed-up to $3.2B, Base, from $3B Request. Expect 2014 Congressional plus-up.]

• Maneuver Units: $888M 2014 Base; (-$167M/-16% from 2013 Base Actuals. $1.1B 2013 Actuals; comprised of $1.1B Base, $0 OCO.) [BCT Training/Readiness]

• Theater Level Assets: $602M 2014 Base; (-$1M/-.2% from 2013 Base Actuals. $3.4B 2013 Actuals; comprised of $603M Base, $2.8B OCO.) [ISR CLS; Information Operations]

• Land Forces Ops Support: $1B 2014 Base; (-$55M/-5% from 2013 Base Actuals. $2.1B 2013 Actuals’ comprised of $1.1B Base, and $991M OCO.) [Combat Training Centers]

• Aviation Assets: $1.3B 2014 Base; (-$10M/-1% from 2013 Actuals. $1.3B 2013 Actuals; comprised of $1.3B Base, and $40M OCO.) [Aircraft Readiness]

• Force Readiness Ops Support: $3.6B 2014 Base; (+$113M/+3% from 2013 Base Actuals. $5.2B 2013 Actuals; comprised of $3.4B Base, $1.7B OCO.) [Training Ranges/Support, Intel Systems; Battle Command systems]

• Land Forces Depot Maintenance: $1.5B 2014 Base; ($1.8B final combined 2013 Base/OCO funding.) (See Reset/OCO below)

• Base Ops Support: $7.3B 2014 Base; (Flat at original 2013 Base Request. Congress plussed-up 2013 to $7.8B.) [Facility Management; IT Sppt; Energy]

• Facilities Sustainment, Restoration & Modernization: $2.8B 2014 Base; (Congress plussed-up to $3.2B, Base, from $3B Request. Expect 2014 Congressional plus-up.)

[No 2014 funding visible for “Additional Activities”, or “Reset”, as both are soley-funded in the OCO. 2013 “Additional Activities” actual funding was $12.5B; and “Reset” Actual funding was $3.7B. Expect 2014 OCO “bump”.]

• Servicewide Transportation: $690M 2014 Base; (+$89M/+15% from 2013 Base Actuals. $3.8B 2013 Actuals, comprised of $601M Base, $3.2B OCO.) [Movement of supplies]

• Servicewide Communications: $1.6B 2014 Base; (+$72M/+5% from 2013 Actuals. $1.5B 2013 Actuals; comprised of $1.5B Base, $22M OCO.) [Info. Security; Communication Support]

Admin & Servicewide: $8.6B Base

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50




Training & Recruiting Base Training & Recruiting Base + OCO

Mobilization Base Mobilization Base + OCO

Operating Forces: $33B Base

Admin & Servicewide: $4.9B Base


Mobilization: $660M Base

Air Operations: $8.6B Base

Ship Operations: $11.2B Base

Combat Ops/Support: $3.1B Base

Weapons Support: $2.2B Base

Base Support: $7.5B Base

Servicewide Support: $2B Base

Logistics Ops: $1.8B Base

Investigations: $543M Base

Classified: $546M Base

Source: FY2014 O&M “O-1/O-2” Budget Justification Exhibits; Final 2013 Defense Appropriations Act.

Navy’s $40B 2014 Base O&M Request: Appears to show aggressive-growth of at least +4%; with “Operating Forces” shrinking, Mobilization (Ship Inactivations) shrinking; but growth in “Administrative & Service-wide Activities”. “Ship Operations”, plus “Base Operations Support”,

show biggest 2014 Base contraction. Expect combination of 2014 OCO “bump”, plus Congressional plus-ups, to fully-fund 2014 Ship Operations. “Aircraft Depot Maintenance” is flat-lined, to support “Ship Depot Maintenance”.

[2014 Budget Request includes Base Budget only. 2014 OCO Request is expected in May 2013] Winners (Base only) Flat-lined (Base only) Losers (Base only)

• Combat Communications: $701M

• Missions & Other Flight Ops: $5B

• Fleet Air Training: $1.8B

• Aircraft Depot Maintenance: $916M

• Ship Depot Maintenance: $5.2B

• FSRM: $2B [Flat at original 2013 Base Request. Congress plussed-up 2013 to $2.2B.]

• Acquisition & Program Management: $1.1B

• Ship Depot Ops Support: $1.4B

• Combat Support Forces: $946M

• Fleet Ballistic Missile: $1.2B

• Missions & Other Ship Ops: $3.9B

• Base Operating Support: $4.5B

• Ship Activations/Inactivations: $223M (Expected, due to Enterprise inactivation “surge” in 2013)

• Missions & Other Flight Ops: $5B 2014 Base (+$35M/+1% from 2013 Base Actuals. $5.9B 2013 Actuals; comprised of $5B Base, $937M OCO.) [Flying Hours for TACAIR, ASW, Fleet Air Support]

• Fleet Air Training: $1.8B 2014 Base (-$19M/-1% from 2013 Base Actuals. $1.8B 2013 Actuals, comprised of $1.8B 2014 Base, $0 OCO.) [Fleet Replacement Squadrons; Naval Test Pilot School]

• Aircraft Depot Maintenance: $916M 2014 Base (-$45M/-5% from 2013 Base Actuals. $1.2B 2013 Actuals, comprised of $961M Base, $202M OCO.)

• Missions & Other Ship Ops: $3.9B 2014 Base (-$802M/-17% from 2013 Base Actuals. $5.2B 2013 Actuals; comprised of $4.7B Base, $464M OCO.) [Fleet training; command & control; pier side support]

• Ship Depot Maintenance: $5.2B 2014 Base (-$47M/-1% from 2013 Base Actuals. $6.5B 2013 Actuals, comprised of $5.2B Base, $1.3B 2013 OCO] [Ship overhauls; Restricted Technical Availabilities; Non-Depot/Intermediate Maintenance]

• Ship Depot Ops Support: $1.4B 2014 Base; (+$47M/+4% from 2013 Base Actuals. $1.3B 2013 Actuals; comprised of $1.3B Base, $0 OCO.) [Life cycle maintenance; fleet modernization]

• Combat Communications: $701M 2014 Base; (+$81M/+13% from 2013 Base Actuals. $663M 2013 Actuals; comprised of $620M Base, $43M OCO.) [Space Programs; C4I Systems]

• Combat Support Forces: $946M 2014 Base (+$36M/+4% from 2013 Actuals. $2.8B 2013 Actuals; comprised of $910M Base, $1.9B OCO.) [Special Combat Support Forces; US Fleet Cyber Command; Amphibious Craft Units]

• Fleet Ballistic Missile: $1.2B 2014 Base; (+$12M/+1% from 2013 Base Actuals. $1.2B 2013 Actuals; comprised of $1.2B Base, $0 OCO. ) [SSBN weapons systems support]

• FSRM: $2B 2014 Base; (Flat at original 2013 Base Request. Congress plussed-up 2013 to $2.2B.)

• Base Operating Support: $4.5B 2014 Base; (-$367M/-8% from 2013 Base Actuals. $4.9B 2013 Actuals; comprised of $4.8B Base, $143M in OCO.) [Port and airfield operations; base administration; environmental management]

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• Ship Activations/Inactivations: $223M Base; (-$761M/-77% from 2013 Actuals. $984M 2013 Actuals; comprised of $984M Base, $0 OCO.) [Decrease expected due to Enterprise inactivation in 2013]

• Acquisition & Program Management: $1.1B 2014 Base; (+$48M/+4% from 2013 Base Actuals. $1.1B 2013 Actuals; comprised of $1.1B Base, $2M OCO) [Program management/Logistics support]

• Primary Combat Forces: $3.3B 2014 Base (+$333M/+11% from 2013 Base Actuals. $4.4B 2013 Actuals; comprised of $3B Base, $1.4B OCO.) [Fixed wing combat aircraft; Helicopters; Nuclear assets; Missiles]

• Combat Enhancement Forces: $1.9B 2014 Base (+$264M/+16% from 2013 Base Actuals. $2.4B 2013 Actuals; comprised of $1.6B Base, $810M OCO.) [EW; Special Ops; Rescue and Recovery; C4ISR; UAVs]

• Depot Maintenance (Air Ops): $6B 2014 Base (+$419M/+8% from 2013 Base Actuals. $6.9B 2013 Actuals; comprised of $5.5B Base, $1.4B OCO.)

• FSRM (Air Ops): $1.8B 2014 Base; (+$446M/+32% from 2013 Actuals. $1.5B 2013 Actuals; comprised of $1.4B Base, $106M OCO.)

• Base Support (Air Ops): $2.8B 2014 Base; (+$245M/+10% from 2013 Base Actuals. $2.9B 2013 Actuals; comprised of $2.5B Base, $342M OCO.) [Airfield ops; IT; supply logistics; facilities ops; transportation logistics]

• Space Control Systems: $434M 2014 Base; (-$55M/-11% from 2013 Base Actuals. $494M 2013 Actuals; comprised of $489M Base, $5M OCO.) [Satellites; Space Situational Awareness]

• Global C3I and Early Warning: $914M 2014 Base; (-$69M/-7% from 2013 Base Actuals. $998M 2013 Actuals; comprised of $983M Base, $15M OCO.) [Offensive and Defensive C3I; USAF communications; SATCOM terminals]

0

5

10

15

20

25

30




Mobilization Base Mobilization Base + OCO

Training & Recruiting Base Training & Recruiting Base + OCO

Source: FY2014 O&M “O-1/O-2” Budget Justification Exhibits; Final 2013 Defense Appropriations Act.

Operating Forces: $22B Base

Admin. & Servicewide: $7.1B Base


Mobilization: $4.6B Base

Air Operations: $17.3B Base

Combat Related Operations: $2.6B Base

Space Operations: $739M Base

COCOM: $1.4B Base

Logistics Ops: $3.6B Base

Servicewide Activities: $2.2B Base

Classified Programs: $1.2B Base

• Servicewide Communications: $575M 2014 Base; (-$93M/-14% from 2013 Base Actuals. $750M 2013 Actuals, comprised of $668M Base, $82M OCO.) [Information Assurance; Information Systems Security Program; Defense Information Systems Network]

Winners (Base only) Flat-lined (Base only) Losers (Base only)

• Primary Combat Forces: $3.3B

• Combat Enhancement Forces: $1.9B

• Depot Maintenance (Air Ops): $6B

• FSRM (Air Ops): $1.8B

• Base Support (Air Ops): $2.8B

• Logistics Operations: $1.1B

• Depot Maintenance (Mobilization): $1.6B

• Airlift Operations: $2B

• Base Support (Admin & Servicewide): $1.2B

• Servicewide Communications: $575M

• Space Control Systems: $434M

• Global C3I/Early Warning: $914M

USAF’s $37B 2014 Base O&M Request: Appears to show +6% 2014 Base O&M surge. General Welsh is flat-lining lower-priority O&M Accounts, including Mobilization/Mobility Air Forces, with major-growth in Operating Forces/Combat Air Forces. There is major-growth in “Primary

Combat Forces”; “Combat Enhancement Forces”; Training; Air Ops. Depot Maintenance; and Air Ops. FSRM.

• USAF is front-loading CAF/ACC funds into 2014, to offset Readiness-damage from 2013 Sequester; and to self-insure against potential 2014 Sequester. Sequester-damage to MAF/Mobilization still occurs, but is reduced because of “protected” OEF “Air Bridge” status, plus access to TRANSCOM reimbursements. Expect major 2014 Mobilization/MAF OCO “bump”, to support OEF Redeployment.

[2014 Budget Request includes Base Budget only. 2014 OCO Request is expected in May 2013]

• Airlift Operations: $2B 2014 Base (+$31M/+2% from 2013 Base Actuals. $5.2B 2013 Actuals; comprised of $2B Base, $3.2B OCO.) [Mission activities for: C-17, C-5, C-130, KC-10, KC-135; training for: C-130; C-5; C-17]

• Depot Maintenance (Mobilization): $1.6B 2014 Base (+$79M/+5% from 2013 Base Actuals. $2.2B 2013 Actuals; comprised of $2.2B Base, $755M OCO.)

• Logistics Operations: $1.1B 2014 Base; (+$74M/+7% from 2013 Base Actuals. $1.1B 2013 Actuals; comprised of $1B Base, $100M OCO.) [Readiness for USAF Materiel Command; Logistics Information Systems]

• Base Support (Admin. & Servicewide): $1.2B 2014 Base; (-$64M/-5% from 2013 Base Actuals. $1.3B 2013 Actuals; comprised of $1.3B Base, $7M OCO.) [Airfield Operations; IT Services Management; Facility Operations]

emerging themes from 2013 sequester, 2014 budget , and ... · emerging themes from 2013 sequester,...

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