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MAJOR PROGRAM CUTS LOOM IN U.S. ARMY BUDGET

05 Dec 06. Bloomberg reported that Boeing Co.’s program to build a new family of computer-networked armored vehicles and drones would be delayed and 11 other programs terminated in the U.S. Army’s new six-year budget plan, according to service documents. The Army’s proposed fiscal 2008-2013 budget defers four projects within the Future Combat Systems, the Army’s largest weapons program, and slows its production schedule. Among the programs killed is General Dynamics Corp.’s new digital communications system that would be worn by soldiers, according to documents the Army used to brief Pentagon leaders last month. The savings would in part cover costs associated with the continued occupation of Iraq — a deployment that’s been longer and more dangerous than expected and is forcing the Army to pay higher recruiting and retention bonuses as well as unexpected costs associated with repairing war-torn equipment and mobilizing the National Guard and Reserves. The $164bn Future Combat Systems has been highlighted by outgoing Defense Secretary Donald Rumsfeld as key to making U.S. ground forces lighter, more mobile and better connected. The delay may be a harbinger of greater cuts to come in a program Army leaders have sought to shelter, an analyst said. “In all likelihood, the Army will be forced to scale back and push back this program even further over the next six years,” said Steven Kosiak, a defense budget analyst for the nonpartisan Center for Strategic and Budgetary Assessment in Washington. “The FCS is a very costly and technologically ambitious program, and it is not likely to fit — as currently constituted — within the budget levels the Army is realistically likely to see over the next six years,” he said. The delay would be the second in two years for the program, the Pentagon’s second most expensive. The development phase was stretched in 2004 by about four years. Congress has approved about $8bn to date for the program but in the last two years has shaved funding while expressing concern over the systems’ complexity and cost. The latest delay is highlighted without details in the 14- page briefing paper prepared by Army budget officials. The paper, dated Nov. 21, was presented to Deputy Defense Secretary Gordon England and other top Pentagon officials Nov. 27 as a final step in crafting the fiscal 2008 defense budget that’s due for release in February. Army spokesman Paul Boyce said the service had no comment on the budget documents. In addition to delaying part of the Future Combat Systems, the proposed budget calls for delaying by an unspecified number of years the fielding of a U.S.-German-Italian battlefield missile defense program that’s based on the Lockheed Martin Corp. Patriot-3 defense, according to the budget documents. Development of the $30bn Medium Extended Air Defense System began in 2004, and a decision on initial production was scheduled for 2012. Congress has approved spending about $800m so far. Of the 11 programs killed, the most noteworthy is the General Dynamics “Land Warrior.” The $4bn program, started in 2002, aims to equip soldiers with uniform- and helmet-mounted electronics that enhance communications so troops’ whereabouts are always known to headquarters and other battlefield locations. Congress has approved spending about $600m on the program to date.
Other programs proposed for termination include:
— a precision-guided 120mm mortar round under development by Alliant Techsystems Inc. and BAE Systems. Production was expected to begin in 2008; the companies said the program could be worth as much as $500m;
— a program won this year by BAE Systems, Northrop Grumman Corp. and General Dynamics to develop a new air-to-ground rocket to be fired by helicopters. Analysts said the so-called “advanced precision kill” system could be worth as much as $2bn over 20 years;
— a program managed by Raytheon Co. to build and install digital communications equipment in UH-60 Black Hawk helico

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