The Army’s ground combat systems portfolio sits in a better position than their sister services if sequestration strikes and the military is forced to renegotiate contracts because of significant cuts to planned spending.
Air Force leaders don’t have the same confidence. They worry the Air Force will lose its fixed-price contract for the tanker program.
Scott Davis, program executive officer for ground combat systems, explained that the Army’s heavy vehicle fleet is at a point of transition giving him confidence that renegotiating those contracts are “manageable in our portfolio.”
Many programs like the Ground Combat Vehicle or the Armored Multi-Purpose Vehicle are at the early stages of their development meaning these programs do not have multi-year contracts. The Abrams program is the Army’s only ground combat systems multi-year contract.
“Given the speculation that there might be some reduction, I think it is manageable from the perspective that we are in developmental efforts and we may be able to accommodate the adjustments,” Davis said at the Association of the U.S. Army’s annual conference in Washington D.C.
Army officials insist that they have done minimum planning in case of sequestration saying there are still to many unknowns. There is little flexibility to move money around and protect certain programs, said Army Secretary John McHugh.
Davis and other Army Ground Combat Systems leaders do worry about the defense industrial base if the sequestration cuts are executed on Jan. 2. They don’t worry as much about individual companies.
Col. Bill Sheehy, program manager of the heavy brigade combat team, explained that he’s most worried about niche departments inside companies that produce one-of-a-kind parts vital to legacy programs.
“You won’t see companies collapsing, but we are more worried about departments disappearing,” Sheehy said.
In order to cut costs, the companies could cut those departments if they are not needed to produce parts. Army officials worry they won’t exist if those parts are needed for future upgrades or replacements.