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Sequester affecting Army modernization plan

Feb. 28, 2013 - 08:59AM   |   Last Updated: Feb. 28, 2013 - 08:59AM  |  
Lt. Gen. James Barclay
Lt. Gen. James Barclay (Army)
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FORT Lauderdale, Fla. The Army has completed a modernization strategy based on the effects of sequestration over the next decade, a top service official said Feb. 22.

Army Chief of Staff Gen. Ray Odierno has already signed off on the document, and it is awaiting the signature of Army Secretary John McHugh.

Lt. Gen. James Barclay, deputy chief of staff, G-8, for the Army told an audience at the AUSA winter convention here that the strategy, which should be made public over the next week or two, "talks about our modernization, but it's not program specific. We don't pick a program like JLTV or GCV, it's more in broader terms to give guidance to the force, and once it's out on the street industry will be able to see how we're looking at where we're going to go in the future."

Speaking on the last day of the convention, Barclay delivered yet another sharply worded warning about possible effects of sequestration on the Army, saying the service will have to slash $18 billion to $20 billion from its accounts between March and September.

Sequestration, of course, isn't just a one-year deal. After fiscal 2013, the Pentagon will have to continue spreading that $500 billion reduction to planned spending over nine more years. But while the fiscal 2013 cuts are simply a 9 percent "salami slice" to every account across the board, the services will control where they put their money in future years, Barclay said.

In order to deal with this, "we're going to extend the timelines on our modernization programs," the general said. "We're also looking at staggered modernization," which means "incremental changes in different variants, and staggering our modernization" over a longer period of time.

"The CH-47 will be pushed back a couple years, the Apache fleet is going to be extended by three to five years and the Black Hawk fleet is going to be extended by three to five years" in order to meet the new fiscal realities.

Extending modernization programs comes with its own price tag, however. Pushing contracts back will boost their overall cost since the Army will be charged penalties in renegotiating contracts with its industry partners.

Under the continuing resolution, if extended over the rest of the fiscal year, the Army won't be able to launch any new-start programs, sign any new contracts or even expand existing programs. One loser under this scenario is the Paladin PIM mobile gun platform, which was slated to receive a production decision this summer and would have been considered a new-start program.

One way to reduce the budget is to cut force structure, which is the most expensive part of the Army's budget. The service is already coming down to 490,000 from 570,000 soldiers by 2017, but "we cannot allow the force structure to be the bill payer" for all of the cuts, Barclay warned.

Everything above the 490,000 threshold is funded through overseas contingency operations dollars, which means that the already planned for reduction won't affect the Army's base budget.

But the possibility of reducing the force below that 490,000 threshold remains.

"Is 490 the bottom?" Barclay asked. "We're not sure."

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