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Corps to Industry: Prepare for the Worst


QUANTICO, Va. -- One of the Marine Corps' top acquisition officials had a stark message for defense contractors on the prospect of ongoing federal budget cuts.

"Industry is going to get punched in the face with reality over the next couple of years," Bill Taylor, who oversees land weapons systems, said during a briefing to company officials during the third and final day of the Modern Day Marine conference.

"As much as we are concerned about the industrial base, industry has to consider the alternative of contraction," he said. "I'm sorry to say that you have to be confronted with those same realities."

The U.S. military is downsizing after more than a decade of war, fueled by automatic budget cuts known as sequestration. The Marine Corps, which peaked in size at 202,000 Marines in 2008, may shrink to as few as 150,000 Marines by 2017, depending on the pace of the reductions. The cuts will reshape the structure of the service and force it to upgrade rather than buy new equipment, officials said.

"We need to be lighter, faster, more agile and cheaper," Lt. Gen. Kenneth Glueck, deputy commandant for combat development and integration, said during the panel discussion. "We're going to need to focus on what's good enough."

Programs with the highest levels of proposed funding over the next five years include the Ground/Air Task Oriented Radar, known as G/ATOR, with about $1.37 billion through fiscal 2018; and the Humvee-replacement Joint Light Tactical Vehicle, or JLTV, with about $925 million over the same period, according to a slide presented at the briefing.

The Defense Department faces $500 billion in automatic cuts over the next decade. That’s in addition to almost $500 billion in defense reductions already included in 2011 deficit-reduction legislation. The first installment of the automatic cuts began March 1 after lawmakers were unable to reach an alternative agreement on taxes and spending. The next round takes effect in fiscal year 2014, which begins Oct. 1, and is estimated at $52 billion.

The potential for a government shutdown next week because of political gridlock on Capitol Hill over a stop-gap funding resolution further complications planning, according to Brig. Gen. John Jansen, assistant deputy commandant for programs and resources.

"We're laboring under many yokes," he said.

Excluding the possible spending cuts, the Corps' base budget is estimated at $24 billion to $26 billion, Jansen said. That's down about half from a high of $50 billion in 2008 amid the U.S.-led wars in Iraq and Afghanistan, though up significantly from about $17 billion in 2001, he said.

Without an alternative deficit-reduction deal, the across-the-board cuts will slice more than $12 billion from the Corps' budget over the next five years, or slightly more than $2 billion a year, Jansen said. The Corps will continue to station Marines overseas to be ready to respond to global contingencies -- but those priorities will come at a cost to installation maintenance and weapons development, he said.

"There's a great deal of uncertainty in the Marine Corps right now," Jansen said. At the same time, there is opportunity for the service to shed excess equipment and gear as the headcount falls, he said.

The typical infantry rifleman now carries as much as $14,000 worth of gear, excluding night-vision goggles, up from about $2,500 a decade ago, Jansen said. Similarly, a typical Humvee now costs about $250,000, up from about $50,000 in 2001, he said.

"The ability to adapt and then perform is really the formula for success in this environment," he told company officials.

Lt. Gen. William Faulkner, deputy commandant for installations and logistics, agreed, saying budget pressures will help force leaders "make some of those real changes that we need to make."

Over the past decade, the Corps not only expanded its ranks, it also boosted its equipment inventory, Faulkner said. For example, the typical infantry battalion now has 8,500 pieces of gear, such as radios and trucks, up from 3,400 in 2001, he said. Many of the items are no longer necessary, he said.

"That's the stuff we have to trim," he said.

The Corps plans to keep just 1,200 to 1,300 bomb-resistant trucks known as mine-resistant ambush-protected vehicles, or MRAPs, of the 3,700 to 3,800 currently in the inventory, Faulkner said.

The budget reductions will also prompt changes in the structure of Marine Expeditionary Forces, though Marines will probably continue to serve two months stateside for every month deployed -- a ratio known as dwell time, Glueck said.

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