Pentagon arms buyer predicts more big-ticket cuts

Reuters News
Posted: Apr 20, 2011 1:54 PM

By Jim Wolf

WASHINGTON (Reuters) - The Pentagon's top arms buyer on Wednesday predicted more scrapping of big-ticket arms programs starting as soon as the 2013 fiscal year amid tightening U.S. defense budgets.

"There undoubtedly will be more cancellations of that kind," Ashton Carter, undersecretary of defense for acquisition, told an audience at the Heritage Foundation, a conservative research group in Washington.

Carter made the comment after referring to a Pentagon decision announced in February to kill a roughly $13 billion Expeditionary Fighting Vehicle, a hybrid landing craft and battle truck being developed by General Dynamics Corp, as well as other big programs that have been cut, curtailed or capped in the last couple of years.

"Yes, for sure, as we prepare the fiscal year 2013 budget," he said when asked if the projected cancellations that he did not specify might occur that soon. The Pentagon is already working on its spending request for fiscal 2013, which starts October 1, 2012.

President Barack Obama last week called for shaving $400 billion from U.S. security-related spending, starting in fiscal 2013 through the 2023 fiscal year, as part of a push to trim the deficit $4 trillion by then.

The Pentagon's biggest arms suppliers include Lockheed Martin Corp, Boeing Co, Northrop Grumman Corp, General Dynamics, BAE Systems Plc and Raytheon Co.

Carter, in his remarks, said the Defense Department would seek greater buying power for all items -- not just arms purchases -- in its roughly $530 billion core budget.

He singled out space programs as one of the areas where costs would be reviewed aggressively, saying "we're paying too much."

He referred to the Air Force's Advanced Extremely High Frequency (AEHF) satellite program; Space-based Infrared System Program (SBIRS); and Evolved Expendable Launch Vehicle (EELV).

Boeing and Lockheed are the prime contractors for EELV, which is designed to provide affordable launch services for the Department of Defense and other U.S. government payloads.

The program is "performing very well but costing too much," Carter said.

Defense Secretary Robert Gates has scrapped or scaled down what the Pentagon calls more than 20 troubled or "excess" arms programs since April 2009. The Pentagon calculates this has saved more than $300 billion in long-term costs.

The Defense Department is undertaking a review of its roles and missions to help identify areas where savings may be achieved to meet Obama's deficit reduction goal.

(Reporting by Jim Wolf; Editing by Lisa Von Ahn and Gunna Dickson)