Pentagon needs to save $21.7 billion

07:20 GMT, March 12, 2009 The Pentagon is considering cutting or delaying several major defence programmes including the replacement of the Air Force's aging fleet of aerial refueling tankers. The Pentagon is weighing a report received January 29 by the White House Office of Management and Budget (OMB) which includes recommendations for possible cuts and delays of 22 major procurement programmes in order to save $21.7 billion.

According to the report, the OMB asked for a five-year delay on the tanker programme, one of the most expensive programmes in the U.S. which could be worth up to $100 billion over the next two decades. Beside this, the report calls for canceling or delaying projects such as the airborne anti-missile laser built by Boeing or the Army's Future Combat System (FCS) programme in which Boeing also has the lead. The Marines' expeditionary fighting vehicle, built by General Dynamics, is also in consideration for being canceled.

Beyond that, the most advanced version of Lockheed Martin’s VH-71 presidential helicopter programme, which is running two years behind schedule, is on the cancellation list.

The OMB also proposes to cancel the “next generation” long-range bomber as well as additional purchases of the Javelin close combat/anti-armor weapon system built jointly by Raytheon and Lockheed Martin.

According to the OMB, delaying additional purchases of the Stryker vehicle built by General Dynamics would save $1.31 billion in 2010, while delaying the Northrop Grumman built CVN-79 aircraft carrier would save $810 million next year.

The budget office pointed out that the administration is now weighing a number of options. However, no final budget decisions have been made, Pentagon Deputy Comptroller Kevin Scheid said. "We take all of OMB's recommendations seriously, but it was a recommendation," he told reporters after speaking to the conference on Wednesday.

Pentagon spokesman Geoff Morrell added that all decisions will be based on the best interests of national security.

The report comes as the Obama administration is considering which programmes to include in its 2010 defence spending request to be presented to Congress next month. The new administration is facing about $300 billion in cost overruns on 95 major weapons systems compared with initial estimates, the Washington Post reported.

If a delay is announced on the tanker programme, Obama will be confronted by strong opposition from industry officials who see their incomes in danger, as well as from members of Congress whose districts have tens of thousands of jobs related to the program and, of course, from Air Force officials who have repeatedly declared that the old fleet of tanker aircraft is urgently in need of being replaced. The U.S. Air Force tanker programme is far behind schedule and already suffers from a huge lack of air-refueling capabilities for the Air Force since the average age of the KC-135 tanker is 48 years while the average age of all tankers in the fleet is over 44 years — nearly four times the age of the U.S. commercial fleet.

In a statement, U.S. Air Mobility Command chief, General Arthur J. Lichte, pointed out the urgent need for the next-generation tanker. “Air refueling operations continue to be amazing aerial feats, especially for people who witness the process for the first time”, he said.

“Today's tanker fleet continues to play the vital role of sustaining operations. Tankers underwrite our nation's ability to project power. Aircraft extend our reach to deliver the clenched fist of U.S. power to our adversaries or the open hand of assistance to people in need,” he continued.

“Without tankers, our combat aircraft cannot reach their targets. Without tankers, our resupply aircraft and humanitarian relief materials cannot always reach their destinations. Without tankers, we cannot move our wounded warriors non-stop from the battlefield to the U.S. for the medical care they need.”

In September, 2008 the U.S. Department of Defense terminated the current tanker competition. Two competitors are bidding for this lucrative and highly prestigious programme: Boeing Co. and the team of Northrop Grumman and European Aeronautic Defence & Space Co. (EADS), the parent company of Airbus.

According to the OMB report, the tanker delay would save $2.37 billion in fiscal year 2010 and $13.3 billion through 2014.