A draft program budget decision prepared by the Pentagon comptroller's office also calls for a notable funding change to the Marine Corps' Expeditionary Fighting Vehicle program, a major modernization effort that has encountered significant development challenges.

Program budget decision No. 702, which covers Navy issues, calls for shifting $500 million from the EFV's procurement accounts to pay for research and development between fiscal years 2008 and 2013 -- a bid to iron out problems that prompted Pentagon testers to label the EFV "unsuitable" for combat operations, according to the document.

The 14-page decision, marked "for official use only," details adjustments the comptroller's office wants to see to the Navy's previously undisclosed $132.9 billion spending request for fiscal year 2008. It is subject to change until Pentagon Comptroller Tina Jonas signs it.

Navy budget accounts may also see additional adjustments in the coming weeks as other decisions aimed at addressing the needs of combatant commanders or issues of concern to Pentagon leaders could trigger more shifts of resources between accounts.

Program decision memoranda issued by the deputy defense secretary can also result in changes to the final shape of the Pentagon's fiscal year 2008 budget request, which is expected to be complete by the end of the year.

The draft budget decision turns back cost-reduction initiatives the Navy has factored into its budget for the DDG-1000 destroyer, formerly called the DD(X). The comptroller's office directs the Navy to cut $385.4 million from other parts of its budget -- the "Other Procurement, Navy" accounts -- to restore funding to the DDG-1000. The Navy's FY-08 budget submission included $2.7 billion for DDG-1000 procurement.

The adjustment directed by Jonas' office would bring funding in step with the Pentagon's fiscal year 2007 spending plan and resource levels directed by Kenneth Krieg, the Defense Department's acquisition executive, on Nov. 23, 2005, in an acquisition decision memorandum that codified decisions agreed to at the DDG-1000 Milestone B review last fall.

In addition, the draft budget decision would direct DDG-1000 increases of $334.4 million in FY-09, $221.3 million in FY-10 and $224.3 million in FY-11. These boosts would be tagged on to Navy proposals for $2.2 billion in FY-09, $2.5 billion in FY-10 and $2.1 billion in FY-11.

/InsideDefense.com/ reviewed the draft budget document.

Other naval programs are directed to reduce procurement plans in the draft decision. The Marine Corps, in its fiscal years 2008 to 2013 proposal submitted to the Office of the Secretary of Defense in August, made steep cuts to the total size of the EFV buy -- slashing the number of vehicles it planned to procure by 43 percent -- as part of a wider effort to recalibrate its forces to better fight irregular combatants (/DefenseAlert/, Aug. 23).

The EFV is an armored vehicle equipped with powerful water jets to propel it across the sea surface, as well as tracks that allow it to drive ashore. The program recently experienced technical challenges that prompted the Pentagon's top testers to find the armored vehicle "unsuitable for combat operations," according to the draft budget document.

In light of numerous engineering problems -- which, according to /Inside the Navy/, include the vehicle's inability to come anywhere near meeting a key requirement to remain "reliable" for more than 40 consecutive hours -- Congress, in its fiscal year 2007 Defense Appropriations Act, denied all $265 million sought for procurement and boosted the program's research and development efforts by $155 million.

The draft budget decision reflects "significant technological challenges" that must be corrected before the program receives a green light to proceed with full-rate production. "This has been a troubled program in the past, and the belief that a success based schedule can delivery [sic] a reliable vehicle before FY-2010 is not realistic given the level of work that needs to be performed, and subsequent developmental testing," the draft document states.

Accordingly, the Pentagon comptroller directs the Marine Corps to divert $501.5 million over the service's six-year spending plan to re-engineer the troubled parts of the vehicles and provide adequate testing. The budget decision also directs the program to structure the EFV program to begin production in 2010.