So the U.S. Department of Defense (DOD) fiscal year 2014 defense budget request has been out for a couple of weeks now. We know the news isn't particularly good, but it's not a disaster, either.
What the Pentagon's proposed 2014 budget tells us is now we have an idea of what we need to do moving forward. In other words, most of the uncertainty that's paralyzed our industry for months is behind us, and now we have somewhat of an idea what we're working with.
Here's some of the bad new:
The Pentagon's fiscal 2014 budget would cut military procurement and research, development, test, and evaluation (RDT&E) spending by 11.3 percent over this year's request. These accounts hold the vast majority of money the Pentagon has earmarked for military electronics and electro-optics.
Next year the Pentagon proposes to spend $166.8 billion on procurement and RDT&E, which is down 11.3 percent from this year's request of $188.1 billion. The 2014 DOD budget request does not give this year's actual spending levels approved by Congress, as past budgets have done.
In the procurement and RDT&E accounts, next year's Pentagon budget would cut spending for military communications, electronics, telecommunications, and intelligence (CET&I) technologies by 14.51 percent over current-year levels. Over two years, CET&I spending would drop by about one fourth.
The defense budget next year would slash the Pentagon's operations and maintenance budget by nearly 20 percent in a direct reflection of shrinking military readiness levels in the post-sequestration era.
The DOD budget proposed 2014 operations and maintenance (O&M) spending for next year is $207.95 billion, which is down nearly 20 percent from the 2013 request of $259.79 billion. These numbers reflect proposed O&M budgets for the Army, Navy, Marine Corps, Air Force, and independent DOD agencies. Federal fiscal year 2014 runs from 1 Oct. 2013 to 30 Sept. 2014.
Operations and maintenance is a direct reflection of military readiness. These accounts essentially indicate the level of military personnel training and keeping military equipment in good repair. Cuts in the O&M budget necessarily mean less training and a compromise in keeping equipment in tip-top shape.
Here's a little bit of good news, in case you're ready for some of that right about now. The defense budget for next year actually is up $1.2 billion over the budget submission for the current fiscal year. That money may not be for a lot of technology, and sequestration cuts still will play a factor.
Okay, so technology spending is down. I know you hate to hear it, but it could have been worse. More the point, knowing is much better than not knowing.
We have a map forward. It's not what we would have hoped, but now we can start to plan.
Time for the defense industry to get back to work.