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Science and Technology Budgets

A robust defense aerospace industrial base requires a healthy science and technology (S&T) and research, development, test, and evaluation (RDT&E) funding stream. The future of the Department of Defense (DoD) and Air Force aerospace infrastructure will depend on investments in S&T and research and development (R&D).

The RDT&E budget comprises seven budget activities: (1) basic research, (2) applied research, (3) advanced technology development, (4) demonstration and validation, (5) engineering and manufacturing development, (6) RDT&E management support, and (7) operational systems development. These are also referred to as 6.1 through 6.7, respectively. The first three of these budget activities—basic research, applied research, and advanced technology development (6.1 through 6.3)—constitute the S&T budget. DoD’s S&T budget is currently about 20 percent of the larger RDT&E budget, which includes the labor- and material-intensive tasks of incorporating new technical developments into military systems such as aircraft, avionics, engines, spacecraft, missiles, and weapons. The RDT&E budget is about 14 percent of the total DoD budget.

Industry S&T activities that can be charged as independent research and development (IR&D) are included in the RDT&E and overall procurement budgets. The total DoD S&T appropriation for FY01 was $9.0 billion, $1.5 billion higher than the $7.5 billion budget request submitted to the Congress. This S&T budget represents 3 percent of the overall DoD budget, and IR&D accounts for about another 1 to 2 percent. The total S&T budget is therefore about 4 percent of the DoD budget. This amount has a very great leverage as it has led in the past to the technical superiority of U.S. forces (DDR&E, 2001).

Historical trends in total DoD S&T and Air Force S&T funding are shown in Figures 2–1 and 2–2, respectively. In constant year FY01 dollars, the total DoD S&T budget rose from $6.6 billion in FY80 to a peak of $9.9 billion in FY93 (DDR&E, 2001). Since then it has declined somewhat and increased to $9 billion in FY01.

The Air Force S&T budget was approximately $1.8 billion in FY80, rose to a peak of $2.3 billion in FY88, and since that time has fallen dramatically, before rising slightly to $1.46 billion in FY01 (less than 17 percent of the total DoD S&T FY01 budget). This FY01 budget is only $1.42 billion if you do not count the 6.4-phase Space-Based Laser (SBL) funds moved into the S&T budget line in FY 2000 (USD(C), 2000a; DDR&E, 2001).

The total DoD budget, which peaked in 1985 at $436 billion in constant year FY01 dollars, has since decreased by nearly 33 percent, to $296 billion in FY01 (USD(C), 2000b; Heeter and Kosiak, 2000). During the same period, procurement spending has fallen by just over 56 percent, to $60 billion, and RDT&E spending fell by about 10 percent, to $41 billion (USD(C), 2000b; Public Law 106–259, the Department of Defense Appropriations Act, 2001). As the data show, the decreases for R&D were not nearly as large as those for other categories over this time. During this period, total DoD S&T actually increased, rising from $6.4 billion to $9 billion. In sharp contrast, the $1.5 billion of FY01 Air Force S&T represents a 25 percent decrease since FY85 and a 35 percent decrease since its peak in FY88 (DDR&E, 2001). Over the same period, NASA investment in S&T also declined (NRC, 1999). NASA’s S&T is increasingly being focused on meeting the needs of specific NASA space programs and pulling back from its historic support for the development of aeronautics technologies. Also, NASA and the Air Force have not coordinated these budget reductions in aeronautical S&T investments and programs (Venneri, 2000).

The defense aerospace industry, too, has reduced its R&D investment. In response to the financial instability of the industry, businesses have focused on increasing shareholder value. Company R&D funds have been focused on near-term market prospects (analogous to 6.3 and 6.4). As a result, 6.1 and 6.2 projects have largely become the domain of universities and some military laboratories.

As a result of the demise of the Soviet Union and the



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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense 2 Science and Technology Budgets A robust defense aerospace industrial base requires a healthy science and technology (S&T) and research, development, test, and evaluation (RDT&E) funding stream. The future of the Department of Defense (DoD) and Air Force aerospace infrastructure will depend on investments in S&T and research and development (R&D). The RDT&E budget comprises seven budget activities: (1) basic research, (2) applied research, (3) advanced technology development, (4) demonstration and validation, (5) engineering and manufacturing development, (6) RDT&E management support, and (7) operational systems development. These are also referred to as 6.1 through 6.7, respectively. The first three of these budget activities—basic research, applied research, and advanced technology development (6.1 through 6.3)—constitute the S&T budget. DoD’s S&T budget is currently about 20 percent of the larger RDT&E budget, which includes the labor- and material-intensive tasks of incorporating new technical developments into military systems such as aircraft, avionics, engines, spacecraft, missiles, and weapons. The RDT&E budget is about 14 percent of the total DoD budget. Industry S&T activities that can be charged as independent research and development (IR&D) are included in the RDT&E and overall procurement budgets. The total DoD S&T appropriation for FY01 was $9.0 billion, $1.5 billion higher than the $7.5 billion budget request submitted to the Congress. This S&T budget represents 3 percent of the overall DoD budget, and IR&D accounts for about another 1 to 2 percent. The total S&T budget is therefore about 4 percent of the DoD budget. This amount has a very great leverage as it has led in the past to the technical superiority of U.S. forces (DDR&E, 2001). Historical trends in total DoD S&T and Air Force S&T funding are shown in Figures 2–1 and 2–2, respectively. In constant year FY01 dollars, the total DoD S&T budget rose from $6.6 billion in FY80 to a peak of $9.9 billion in FY93 (DDR&E, 2001). Since then it has declined somewhat and increased to $9 billion in FY01. The Air Force S&T budget was approximately $1.8 billion in FY80, rose to a peak of $2.3 billion in FY88, and since that time has fallen dramatically, before rising slightly to $1.46 billion in FY01 (less than 17 percent of the total DoD S&T FY01 budget). This FY01 budget is only $1.42 billion if you do not count the 6.4-phase Space-Based Laser (SBL) funds moved into the S&T budget line in FY 2000 (USD(C), 2000a; DDR&E, 2001). The total DoD budget, which peaked in 1985 at $436 billion in constant year FY01 dollars, has since decreased by nearly 33 percent, to $296 billion in FY01 (USD(C), 2000b; Heeter and Kosiak, 2000). During the same period, procurement spending has fallen by just over 56 percent, to $60 billion, and RDT&E spending fell by about 10 percent, to $41 billion (USD(C), 2000b; Public Law 106–259, the Department of Defense Appropriations Act, 2001). As the data show, the decreases for R&D were not nearly as large as those for other categories over this time. During this period, total DoD S&T actually increased, rising from $6.4 billion to $9 billion. In sharp contrast, the $1.5 billion of FY01 Air Force S&T represents a 25 percent decrease since FY85 and a 35 percent decrease since its peak in FY88 (DDR&E, 2001). Over the same period, NASA investment in S&T also declined (NRC, 1999). NASA’s S&T is increasingly being focused on meeting the needs of specific NASA space programs and pulling back from its historic support for the development of aeronautics technologies. Also, NASA and the Air Force have not coordinated these budget reductions in aeronautical S&T investments and programs (Venneri, 2000). The defense aerospace industry, too, has reduced its R&D investment. In response to the financial instability of the industry, businesses have focused on increasing shareholder value. Company R&D funds have been focused on near-term market prospects (analogous to 6.3 and 6.4). As a result, 6.1 and 6.2 projects have largely become the domain of universities and some military laboratories. As a result of the demise of the Soviet Union and the

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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense FIGURE 2–1 Total DoD S&T budget history. SOURCE: DDR&E, 2001. subsequent downsizing of the U.S. military, the services have attempted to meet the resultant resource shortfall by taking advantage of excess inventory to address their equipment needs from existing systems or by modernizing existing systems rather than procuring new systems. In this light, the overall pattern of DoD budget reductions seems reasonable. However, RDT&E budgets, particularly the S&T portion of these budgets, must continue to anticipate the need for new technologies and systems once excess inventory has been depleted. Also, the change in threat places new demands on RDT&E. The 35 percent decline in the Air Force S&T budget since 1988 is inconsistent with the Air Force goal of maintaining technological superiority. S&T funding must be maintained if the Air Force is to retain its technical superiority. A vigorous S&T program is also a necessary, but not sufficient, condition for the future health of the defense aerospace industry. Decisions about current expenditures and investments in future technologies should be based on a vision and a plan to ensure the development of technical resources for the future and to insulate S&T budgets from the vagaries of market fluctuations and short-term fixes. INSTABILITY OF PROGRAM BUDGETS The negative effects of budget reductions have been magnified by the instability of individual program budgets. Instability results from a policy of seeking to keep all or nearly all programs alive while shuffling money among them to deal with immediate problems. Shifting priorities and inadequate management reserves also disrupt programs, undermining the effectiveness of S&T and R&D spending. Also, erosion in the integrity of the 6.1 to 6.5 funding process has destabilized S&T programs. Air Force S&T accounts have been reprogrammed to pay bills and to meet pressing O&M and procurement needs that have arisen with the recent increase in operations tempo (Etter, 2000). Funding of Air Force S&T programs has become increasingly unstable. “Raiding” of S&T budgets to meet short-term readiness goals is an understandable reaction to short-term pressures but is not an acceptable policy for meeting long-term national security requirements because it destroys S&T program integrity and viability, wastes resources, and undermines the stability of the defense aerospace industry. Senior Air Force leadership must take into account that a viable industry is an absolute requirement for a strong U.S.

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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense FIGURE 2–2 Air Force S&T budget history. SOURCE: DDR&E, 2001. defense and that S&T funding is the source of technology advancement in the industrial sector. In the process of refocusing its priorities and as a result of reorganizations predicated by the Goldwater-Nichols Act, the Air Force eliminated the position of deputy chief of staff for research and development, which served as a strong advocate for science and technology. In addition, Air Force Systems Command has been combined with the Air Force Logistics Command to form the Air Force Materiel Command (AFMC). Although this has streamlined AFMC’s processes for development, acquisition, and support of Air Force systems, it has also tended to reduce the emphasis on S&T. Currently, the highest S&T-dedicated position in the Air Force is the two-star Air Force Research Laboratory (AFRL) commander position at Wright-Patterson Air Force Base (AFB) near Dayton, Ohio, which is several levels below the Air Force Council. The AFRL commander reports directly to a general (four-star), the commander of AFMC, of which AFRL is a part. AFMC headquarters is also located at Wright-Patterson. The AFMC commander’s responsibilities are very broad, including the programs at four product centers, five air logistics centers, three test centers, and two major specialized centers, in addition to AFRL. The AFMC commander has too many other responsibilities to focus on S&T, and without an S&T advocate at the Air Staff level where budget decisions are made, support for S&T has declined substantially. The Air Force needs to establish a deputy chief of staff, who is also a member of the Air Force Council, with primary responsibility for planning and managing future Air Force scientific and technical resources. Among his duties, which should include all Air Force technical activities from research through initial production and maintenance, this officer should be the advocate for funding science and technology requirements and for modifying and tracking the implementation of S&T requirements to minimize instabilities in S&T and R&D funding (including new production processes), ensure that adequate funding is budgeted annually, and defend against attempts to “raid” S&T or R&D funds to meet short-term budget shortfalls in other areas. Finally, this officer should be responsible for ongoing assessment of the Air Force technical resources both current and future and should present that assessment to the periodic meeting of senior Air Force leadership at Corona. Ongoing assessments should include the following estimates: The number of technical personnel necessary now and in the future, including skills, technical specialties, and years of experience; The organizational base and operating requirements to

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Review of the Future of the U.S. Aerospace Infrastructure and Aerospace Engineering Disciplines to Meet the Needs of the Air Force and the Department of Defense support the Air Force’s long-term technology needs, including size, skills, and responsibilities for universities and in-house laboratories performing scientific and technical research, industrial organizations that the Air Force considers essential to maintaining a competitive supplier base, organizations the Air Force intends to sustain as sole suppliers in particular areas, and Federally Funded Research and Development Centers (FFRDCs); and The need for R&D facilities, such as wind tunnel facilities and test ranges, necessary for transitioning technology capabilities and meeting research requirements. These needs must be closely coordinated with the other services and with the National Aeronautics and Space Administration. The committee realizes that making this assessment will be difficult because of uncertainties about future operational needs, technical advances, and funding. Nevertheless, if the assessment emphasizes flexibility and planning for change, it could help the Air Force make long-term decisions and decrease the likelihood of future crises in technical support. Stability and a sense of direction in the S&T sector of the Air Force would go a long way toward helping the Air Force use its limited resources effectively to support the defense aerospace industry. The committee is aware that Goldwater-Nichols defines the relationship between the Secretary’s Office and the Chief’s Office on technical matters. The Secretary’s responsibilities are clear, but this should not mean the military does not have very strong concerns about and influence on the technical resources of the Air Force and does not have the need for oversight. The committee believes that the Air Force, both civilian and military, must pay more focused attention to its technical resources if it is to continue to get the best weaponry. If Goldwater-Nichols or other constraints make a DCS position unworkable, the role and responsibility recommended could be assigned in other ways. The committee understands, for example, that the Navy has established a position for a two-star Director of Test & Evaluation and Technology Requirements (N091) who reports directly to the Chief of Naval Operations (CNO) and has somewhat similar functions. He serves as principal interface between the CNO and the Assistant Secretary of the Navy for Research, Development and Acquisition on RDT&E; Resource Sponsor for Navy S&T (6.1, 6.2, 6.3A) investments; Resource Sponsor for RDT&E Field activities; and Appropriations Sponsor for CNO RDT&E, Navy (RDT&E,N) funding. In any event, the committee believes that high-level attention is needed to get the best result.