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Ground Vehicle Cash At Risk With Flattening Budgets

One of the Army's top budget officers today warned of coming friction between Army personnel costs and procurement with the deck stacked against investment spending, as defense budget cuts are unveiled in the coming years.

The simple size of Army personnel accounts means that any move to shrink defense spending “puts a lot of pressure on force structure," said Lt. Gen. Edgar Stanton, military deputy for budget in the office of the Assistant secretary of the Army, during an AUSA-sponsored breakfast. However, achieving any real savings in this area would require very large cuts in manpower, something like 10,000 soldiers for every billion dollars saved, according to the general.

This means that Army investment accounts will likely be at risk if budgets continue to flatten or even shrink as the war in Afghanistan winds down and OCO accounts are forced into the baseline budget.

"That causes you to look very carefully at the Ground Combat Vehicle, Joint Light Tactical Vehicle" and Army trucks, said Stanton to a room full of defense industry representatives. He added that budget officials are analyzing the service's modernization portfolio "program by program" and weighing the levels of risk involved in any programmatic cuts.

Both the GCV and JLTV make sense as prime targets for budget trimmers, according to Lexington Institute analyst Loren Thompson.

Thompson predicts the newly re-started GCV program could balloon into something like the Marines' recently cancelled Expeditionary Fighting Vehicle; the super-swimmer tractor that took decades to develop and was mired in cost growth.

The new GCV “has a projected production cost of $10 million per vehicle, which is much more than any armored system in the existing inventory costs for a relatively modest gain in functionality," said Thompson. "The real cost of GCV will end up being similar to that of the Marine Corps Expeditionary Fighting Vehicle, which was canceled mainly due to high unit costs."

Keep in mind that the original GCV program was scrapped so that the Army could buy an achievable, affordable, and timely infantry fighting vehicle.

Army officials want the new GCV to be able to fight effectively in a host of combat scenarios, from high-end armored fights to low-intensity insurgencies and weapons that can do this much tend to cost a lot.

The JLTV, which GAO predicts will cost $354,000 apiece before GFE is added, is another high-cost vehicle that makes an easy target, said the analyst. "That's just way too high for a Humvee replacement, and saddles the Army with a $50 billion bill to replace only a fraction of its light trucks," said Thompson.

He went on to say that the future of Army vehicles lies in "upgrading what the service already owns, because it hasn't learned how to buy new vehicles at affordable prices."





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