VIRGINIA BEACH, Va.– The defense department’s budget and acquisition reform efforts represent a dramatic, and needed, departure from the past, so that the U.S. military can stay strong and be flexible in challenging times, Deputy Defense Secretary William J. Lynn III said here today. “The United States of America has the best-trained, the best-equipped, the best-led military that the world has ever seen, and we intend to keep it that way,” Lynn told attendees at the annual Joint Warfighting Conference that ended here today.

Lynn served as the Defense Department’s comptroller from 1997 until 2001. Four years prior to that, he was the director of Program Analysis and Evaluation in the Office of the Secretary of Defense.

President Barack Obama’s proposed fiscal 2010 defense budget announced earlier this week increases defense spending by 4 percent, Lynn said, for a total expenditure of $534 billion.

“We need to uphold our solemn commitment to take care of our all-volunteer force, to ensure that they can prevail in the wars that they are in now,” Lynn said. To this end, he said, Army and Marine Corp troop plus-ups have been achieved two years early, while previously planned cuts in Air Force and Navy personnel have been halted.

The more than $13 billion increase in the 2010 defense budget’s personnel account, Lynn said, will be used to fund military and civilian pay raises, to provide new troop barracks, family housing and child care centers, and to fully fund military health care, including programs for wounded warriors.

The defense department also is ending the practice of funding the wars in Iraq and Afghanistan through a budget supplemental process separate from the annual budget, Lynn said.

Lynn also said that the fiscal 2010 defense budget strengthens computer-system security by providing funds to triple the number of defense cyber experts. And, President Obama’s 60-day review of the nation’s cyber policy has been completed, he said, noting the report likely will be released in the coming days.

Meanwhile, recent tough budget- and acquisition-related decisions that scaled back or jettisoned unnecessary or too-costly defense programs reflect the intent of the Obama administration and the Pentagon to embark on “a new direction in defense,” Lynn said.

“President Obama has made it clear that it is time to break out of the conventional thinking that has failed to keep pace with unconventional threats,” Lynn said.

Obama and Defense Secretary Robert M. Gates are consequently making hard decisions and bold changes as they propose far-reaching reforms during the first defense budget the president is presiding over, Lynn said.

“This budget is one of the most-dramatic set of reforms I’ve seen,” Lynn said, “from the forces and systems we field, to how we develop them.”

For example, he said, U.S. and allies’ concerns about missile defense needs are growing. Unfortunately, billions of dollars have been spent on missile defense programs facing major technological challenges or questionable operational roles, Lynn said.

As a result, Lynn said, the Pentagon has decided to restructure its missile defense program to focus on the theater missile threat from rogue states.

“We decided not to invest in the second airborne laser prototype aircraft and we’re terminating the multiple-kill vehicle program,” Lynn said of those costly, high-tech programs. Instead, he said, the U.S. will focus investment on its capable Theater High Altitude Area Defense (THAAD) and sea-based SM-3 missile defense systems. Also, he added, the Pentagon proposes to convert six more Aegis-class ships to provide additional theater missile-defense coverage.

“In fact, across a whole range of programs, we’ve made a decision to halt or delay production of systems that relied on promising, but unproven technology,” Lynn said, “while continuing to produce, and if necessary, upgrade, systems that are best in class and we know will work.”

That’s why the new Presidential Helicopter Program was cancelled after its cost had doubled to more than $13 billion, Lynn said. The $19 billion Transformational Satellite Program also was axed due to its rising costs, he added.

“We’ll instead buy two proven and more affordable satellites to fill the gap,” Lynn said.

The 2010 fiscal defense budget, Lynn said, also funds military leaders’ requirements to field joint forces that possess the right capabilities needed to confront both current and perceived future threats, Lynn said. Current threats, he noted, include today’s terrorists and extremists who wage irregular warfare against U.S. forces in Iraq and Afghanistan.

Future potential threats, Lynn continued, include the possibility that a failed or weaker state could employ hybrid war — a mix of irregular and conventional forces –- against U.S. forces, or that there may one day be a peer-to-peer conflict mostly waged with conventional forces.

Consequently, Lynn said, the decision was made to train, equip and field joint, balanced and flexible U.S. forces that can fight enemies practicing irregular, hybrid or conventional war.

The message, Lynn said, is that “from now on, irregular warfare is a regular part of America’s military planning.”

Senior Pentagon leaders are committed to the joint-force concept, Lynn said, which involves not only “the way we fight, but in the way we buy” equipment. For example, he said, production of the Air Force-centric F-22 fighter jet was ended at 187 aircraft, while more Joint Strike Fighter aircraft will be purchased.

It is imperative “to have an acquisition system that is as flexible and effective as the force it serves,” Lynn said. “A modern, effective acquisition system should deliver savings and speed – savings to the taxpayer and speed for the warfighters that provides them the tools and technologies they need within the time they need them.”

However, Lynn said, today’s defense acquisition system fails to meet those criteria. That’s why, he said, reform of the system is vital.

Therefore, he said, the defense department is launching five acquisition-reform initiatives. They are:

– Dramatically increase the acquisition workforce by 20,000 total positions.

– Bring more discipline to projects’ requirements development, to better balance performance needs with respect to cost and schedule limitations.

– Improve cost estimating and reduce the risk of cost overruns by relying more heavily on independent, outside cost estimates.

– Strengthen the project-execution phase by making more use of fixed-price contract agreements, where appropriate, and by employing more steering boards to limit requirements “creep.”

– Cancel poorly performing systems whenever they fail to meet desired requirements.

It’s true, Lynn said, that numerous commissions and studies over the years have called for reform of the defense acquisition system without effect. However, Lynn said he is bullish that new efforts to reform the acquisition system will succeed, citing President Obama’s, Capitol Hill’s and the Pentagon’s strong interest to do so.

“I’m optimistic that we will achieve real acquisition reform that will deliver real savings and increase speed of delivery to the warfighter,” Lynn said.

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