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2 Air Force S&T investment Level and Balance INTRODUCTION Primary among the concerns raised by Congress and other groups reviewing the Air Force S&T program has been the appropriateness of the S&T investment level (see Appendix E). Since this study was tasked with evaluating (1) the adequacy with which the Air Force has addressed the concerns voiced in these re- ports and (2) the sufficiency of the technology invest- ment, the committee examined the Air Force S&T in- vestment level and balance. After a brief program description, this chapter ad- dresses the level of the Air Force's total S&T invest- ment (top line) and the balance of that investment the latter from both an internal perspective (near- versus mid- versus long-term S&T) and an external perspec- tive (the balance of S&T investment with other ele- ments of the Air Force program). AIR FORCE S&T PROGRAM DESCRIPTION Planned and executed by the Air Force Research Laboratory (AFRL), the Air Force S&T program has three elements basic research, applied research, and advanced technology development. These are often re- ferred to by the designation of the applicable DoD bud- get activities: 6.1, 6.2, and 6.3, respectively. AFRL fur- ther divides advanced technology development (6.3) into critical experiments and advanced technology demonstrations (ATDs). In addition to funding appro- priated specifically for Air Force S&T, AFRL also re- ceives funding from other sources (e.g., DARPA). Some of this outside funding is used for advanced con- cept technology demonstrations (ACTDs). 11 The 6.2 tasks often flow from advances in the 6.1 program, 6.3 critical experiments from the 6.2 program, and ATDs from critical experiments. ATDs are spe- cifically planned to lead to efforts that have been pro- grammed or planned by the Air Force and that are ei- ther preliminary to an acquisition program or are part of an acquisition program. In some cases, the products of the technology programs can be immediately applied in response to operational needs, as in the case of tech- nology demonstrations that have a residual operational capability. Usually, however, the results of a technol- ogy program must be transitioned into an acquisition program to complete the development, production, and deployment of sustainable products to the operational forces. The act of transitioning technology to an acquisition program is often not directly controlled by the Air Force. Rather, the mechanism for technology transi- tion to acquisition programs is largely through system architecture decisions and design choices made by in- dustry in response to performance requirements or the need for new capabilities, as stated by the Air Force. In planning its S&T program, the Air Force de- scribes its approach as twofold. First, AFRL works closely with the operational users and acquisition cen- ters to identify the highest-priority technology needs (operational pull or challenges). Second, AFRL devel- ops a broad range of S&T that promises to provide new and improved capabilities (technology push or oppor- tunities). Ultimately, the tasks and programs planned to address technology needs and to provide technology push compete for constrained funding. AFRL is often called on to address issues facing the
EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES 140 - ~n 1 2D - o . _ . _ . _ ,^ V' CO o o >I _' IL 100 - 80 - 60 - 40 - 20 - O- ~ \ / \ S&T ~ 980s Peak to 199Os Trough: 45.6°/ 3.5 Overall TOA ~ 980s Peak to ~ 990s Trouch: 44.3°/O -3.0 ~ ~ ~2.5 I'\ In. ~ '` ~ ......... ,,, Overall AF TOA ~ S&T TOA SIT FY 2003 Appropriation S&T PBR " S&T PBR - OSD Adds Fiscal Year in o . _ . _ 20 ~ · ._ Cal 8 CM _' - 1.0 c/' -0.5 O FIGURE 2- 1 Air Force TOA for S&T and the Air Force as a whole (S&T TOA through FY 2002, appropriation for FY 2003, DoD FYDP for FY 2004 through FY 2007, all in FY 2003 constant dollars). SOURCES: Schneider, 2002b (Chart 44~; DoD, 2002a; Hunsberger, 2002; Jones, 2002; gorger, 2002; U.S. Air Force, 2002. Air Force to which AFRL's science and engineering expertise apply. Also, the Air Force S&T program of- ten provides benefits that extend beyond Air Force pro- grams. However, although it makes other important contributions, the primary purpose of the Air Force S&T program and of AFRL is to provide the technol- ogy base needed by Air Force acquisition (moderniza- tion) programs. AIR FORCE S&T INVESTMENT LEVEL This section addresses the issue of setting the Air Force S&T top line. In doing so, it first provides a his- torical look at Air Force S&T funding. It then addresses the balance of the Air Force S&T investment with other elements of the Air Force program. Air Force S&T Funding History Figure 2-1 shows the estimate, as of the fall of 2002, for the overall annual funding for Air Force S&T from FY 1980 through FY 2007 in FY 2003 constant dol- lars. ~ In the figure, "S&T TOA" is the Air Force' s total obligational authority (TOA) for S&T resulting from the annual appropriation act plus subsequent funding actions. The version available to the committee accom- panied the FY 2003 President's budget request (PBR) Unless otherwise stated, all funding data shown in this report that were not cited in the relevant source in FY 2003 constant dol- lars have been inflated/deflated using the ratio of current year to constant year TOA for the applicable title as reported in DoD (2002a).
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE and defined the DoD baseline through FY 2007. For comparison, the overall Air Force TOA is also shown. As Figure 2-1 shows, S&T funding peaked during the strategic modernization program of the 1980s. The average during the 1980s was about the same as the long-term average of $2.1 billion. In the 1990s, how- ever, S&T TOA generally declined to a post-World War II low of about $1.3 billion in FY 1998, a decline of about 46 percent from the maximum in the 1980s.2 S&T was up in FY 1998 through FY 2002, primarily as a result of congressional increases over the PBR. This trend continued in FY 2003 when Congress increased the funding by $147 million, or 9 percent over the PBR. Actual S&T TOA for any fiscal year has usually ended up being less than the appropriation for that fiscal year as a result of funding actions by DoD or Congress, at times by more than $100 million (Robertson, 2002~. In the FY 2003 PBR, the Office of the Secretary of Defense (OSD) made additions to the Air Force S&T program for the Transformational Wideband Military Satellite Communication (MILSATCOM) program and Special Programs.3 Congress then reduced part of the funding and moved the remainder to non-S&T bud- get activities.4 The data at the right side of Figure 2-1, which show the estimate in the future years both with and without that planned for Transformational Wideband MILSATCOM,5 provide an indication of the range of possible budget variations. The result is con- siderable uncertainty in out-year funding for S&T fund- ing in general and for the two programs added by OSD in particular. Figure 2-2 provides a closer look at the right-hand side of Figure 2- 1. Starting in FY 1991, it contrasts the S&T TOA through FY 2002 and the FY 2003 appro- priation with the PBR to Congress. The TOA reflects the changes made to the PBR by Congress in the ap- propriation and any subsequent actions by Congress or 2Some earlier reports (AFA, 2000, and NRC, 2001a) showed the funding time series starting in FY 1989 using data that were differ- ent from those provided to this committee for FY 1989 (about $2.8 billion versus the $2.3 billion shown here). Though the trend in the l990s is the same, the slope in the early l990s is dramatically dif- ferent. 3"Special Programs" are highly classified programs with special access required. 4Similar issues arose and similar outcomes resulted when Dis- coverer II and Space Based Laser were moved to S&T in the FY 2000 proposed budget see AFA (2000), p. 18. sThe planned S&T funding beyond FY 2003 for the Special Pro- grams was not available to the committee. 13 2.0 - o . _ . _ G ~ 1.5- Cal C' 1.0- o N . ~ .~. , , , , , , , , , , , j . j ~~99 ~~99 ~~99~ ,~99 ,~99~ ,9 ,~9~ ,~99°° ,~999 ,pOOO spoor GOON GOON COT Alp All' ON ~ S&T in the PBR S&T in the PBR - OSD Adds S&TTOA x FY03 Appropriation Fiscal Year FIGURE 2-2 Air Force S&T TOA compared with the PBR. SOURCES: Hunsberger, 2002; Jones, 2002; gorger, 2002; DoD, 2002b; U.S. Air Force, 2002. DoD. The FY 2003 appropriation indicates the changes made by Congress to the PBR for that year. No con- gressional action has yet been taken on the PBR be- yond FY 2003. The PBR reflects Air Force manage- ment of its S&T program, perhaps modified by OSD and Office of Management and Budget (OMB) over- sight. Early in the period shown in the figure, the funds appropriated by Congress were usually lower than the PBR. In the latter part of the period, the PBR, which presumably reflects the Air Force's recommendations, requested increased S&T for the Air Force but not as fast as Congress increased the annual appropriation. This trend continued for the FY 2003 appropriation (though, as noted above, the final S&T TOA may be lower than shown). The lower curve on the right side of Figure 2-2 shows the estimate without the OSD addi- tions discussed above in FY 2003 and without the Transformational Wideband MILSATCOM in the fol- lowing years.6 Without the additions, the requested funding for Air Force S&T would have declined in FY 2003 compared with that in FY 2002. Preliminary in- 6As noted above, the planned S&T funding beyond FY 2003 for the Special Programs was not available to the committee.
14 Air Force* Defense -wide Total: 24.3% 1 t~ EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES 6- . + Defense-wide Air Force _ & Army Navy _` a) o . _ . _ '- 4- . o ct 3- g ON 2 = x x v ....~f.............................................................. ~ = ~ _~ O- . . . . . . . . . . . . . , 1 1989 1991 1993 1995 1997 Fiscal Year 1999 2001 2003 FIGURE 2-3 Companson of service and Defense-wide S&T TOA (TOA through FY 2002, appropriation for FY 2003~. SOURCES: Hunsberger, 2002; DoD, 2002a; Jones, 2002. formation suggests that the FY 2004 and FY 2005 PBRs will be down compared to the 2003 level. It is clear from the above data that the Air Force S&T fund- ing history resembles a roller coaster, a condition un- der which program planning and execution are ex- tremely taxing. Some of the reports referred to in Chapter 1 discuss the Air Force S&T funding in relation to that of the other services. Figure 2-3 compares the funding among the services along with that for Defense-wide S&T (i.e., for the Defense Advanced Research Projects Agency EDARPA], the Missile Defense Agency EMDA], and so on).7 The sum of the constituents shown in the fig- ure is the total DoD S&T, for which the appropriations are almost $11.5 billion for FY 2003. As Figure 2-3 shows, Air Force S&T funding in FY 1989 was higher than that for the other services, fell by the early 1990s to about the same level as the other services, and has been lower than the other services fin addition to DARPA and MDA, other elements of Defense- wide S&T include the Chemical and Biological Defense Program, Defense Information Systems Agency, Defense Special Weapons Agency, Defense Threat Reduction Agency, Joint Chiefs of Staff, Office of the Secretary of Defense, and the Uniformed Services University. *Includes AFIT, SBIR, MAJCOMs, Centers, ALCs, etc. Other Defense-wide 10% 3°/ DARPA 12% Navy 1% /, Army | 1 % Other 1% Organic Air Force S&T 61% FIGURE 2-4 Sources of total funding for AFRL in FY 2002. SOURCE: Legault, 2002. since then. On the other hand, Defense-wide S&T fund- ing, which also declined in the mid-199Os, has grown substantially in the past 3 years. Substantial funds in addition to those specifically identified earlier as Air Force S&T go toward address- ing Air Force technology needs. As shown in Figure 2- 4, Air Force S&T in FY 2002, as an example, accounted for just over 60 percent of the funds available to AFRL (which is about the same as in FY 2000 when it was 59 percent) (AFRL, 1999). As shown in Figure 2-4, about one-quarter of AFRL's total funding came from the Defense-wide S&T program (up slightly from just under 23 percent in FY 2000) (Neighbor, 1999), with DARPA being the largest such source (although down slightly from 14 percent in FY 2000~. The remainder came from Air Force non-S&T funds, the other services, and non-DoD sources. In addition, other parts of the Defense-wide S&T program may ultimately help to satisfy Air Force technology needs. Still other parts of Defense-wide S&T may fund programs that the Air Force would be directed to fund were it not for the Defense-wide pro- grams. The Air Force can leverage its S&T investment with funds made available through the risk-taking, in- novative culture of DARPA and other Defense-wide programs, but at the same time, it should be kept in mind that the direction of such work is controlled to a significant degree by the organizations that transfer the funds to AFRL. In addition to the S&T supported by AFRL, Air Force acquisition programs benefit from industry Inde-
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE 1.2 - o .= 0.8- . Cal o u) o C) N go N 1 .n - 0.6 - ,,,,, - N ,'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''I'''' .. ........................................................................... ..~....................... 0.4 - 0.2- ........................................................................................................................................................................................................................... O- 1980 1985 1990 1995 2000 2005 Fiscal Year FIGURE 2-5 President's budget requests for NASA aero- nautical technology. (These amounts do not include govern- ment personnel or facilities.) SOURCE: NASA Office of Aerospace Technology, 2003. pendent Research and Development funds, which are funded by allowable indirect (overhead) costs on cer- tain DoD contracts. Also, technology developments funded by other federal (such as Department of Energy EDoE] and NASA), commercial, and international ef- forts often support Air Force needs and may be adapted to Air Force needs in its S&T and acquisition programs. In a broad sense, the Air Force and NASA share stewardship of the nation's aerospace future, since their activities dwarf those of the other services and non-DoD agencies. Consider. for example. aeronautics. which encompasses all of the disciplines needed for flight, including avionics, software, communications, automa- tion, human factors, navigation, control, propulsion, structures, materials, aerodynamics, and systems engi- neering. Together, the Air Force and NASA provide most of the funding for university and industrial research in aeronautics, collectively subsidizing aerospace education and technology. They also perform most of the in-house government aeronautical research. During the 1990s, the AFRL expenditures in this area were roughly the same as NASA's (see Figures 2-5 and 2-8~. The past two decades of NASA funding for aero- nautics are shown in Figure 2-5. These amounts do not include the salaries of NASA employees or the NASA facility costs (in contrast, AFRL employee salaries are included in its 6.2 budget; see Figure 2-10~. These monies mostly go to fund industrial and university re- search (with the rest spent on in-house NASA contract 15 personnel services and research expenses). In the past 5 years, NASA has reduced its support for aeronautics by over 40 percent (NASA Office of Aerospace Tech- nology, 2003~. While not all of NASA's research and technology investments are directly relevant to Air Force systems, many are. At the more basic levels (corresponding to DoD 6.1 and 6.2 categories), technologies such as ma- terials, propulsion, and electronic devices are often ap- plicable across a wide range of applications, both mili- tary and civil. Even at the more applied levels (DoD 6.3), many technologies are relevant to both civil and military applications. In summary, from FY 1988 to FY 1998, the Air Force S&T investment fell significantly approxi- mately 45 percent in real terms. It then rose from 1998 to 2003, mainly due to Congress's yearly increasing of S&T funding over the amount requested by the Presi- dent. By FY 2003, Air Force S&T funding had recov- ered about half the early 1990s decline. Part of the FY 2003 increase, however, was due to DoD's moving pro- grams into the Air Force S&T funding line that previ- ously had not been considered to be S&T. In the FY 2004 PER, DoD again moved programs under the Air Force S&T top line that previously had not been there. Taking these programs into account, the FY 2004 fund- ing requested for the continuing Air Force S&T pro- gram was less than that received for FY 2003. Plans for similar reductions appear to be in place for FY 2005. Currently, the Air Force relies on funding from non- Air Force S&T sources to supply approximately 40 per- cent of the AFRL budget. The Air Force also benefits from the research and technology development con- ducted by other agencies, principally NASA. Need for Increased S&T Invesiment Ensuring that the Air Force has appropriate and suf- ficient technology to counter future threats is now more difficult than at any time in the past, in part because both the challenges posed by the threats and the oppor- tunities offered by technologies are more numerous and more complex as a result of the inexorable advances of scientific discovery and engineering applications. The words "higher, farther, faster" are given new meaning by the evolving military applications of directed en- ergy and information warfare to name just two areas. As a result, for example, Potentially hostile nations that cannot afford a large military force can afford today's advanced information systems, as can terrorist
16 EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES groups. With these technologies, access to the world through global connectivity, and hostile intent, such adversaries can cause great harm at low cost. (NRC, 2001a, p. 4) New systems such as directed energy and information warfare represent the fruits of past S&T investments. As they pass through full-scale development and into deployment, experience suggests that new technology needs will rapidly be identified. Thus, S&T in such areas is really just at the end of the initial phase; much more will be needed to support and evolve fielded sys- tems and their descendants. In addition, nano, biological, and the ever-expand- ing information sciences are certain to offer new op- portunities to improve security, add to the technologi- cal edge, and save lives as an example, see the recent NRC report Implications of Emerging Micro- and Nanotechnologies (NRC, 2002~. At times, new challenges and opportunities such as those just discussed can be funded by disinfesting in ongoing areas that can be transitioned or that are no longer productive toward needed Air Force capabili- ties (zero-based transfers). That does not mean, how- ever, that satisfying the need to invest in such new op- portunities as nano, biological, and information sciences should always be at the expense of ongoing programs. Also, NASA has significantly reduced its support for aeronautics, but Air Force needs for many of these technologies for advanced air vehicles and ac- cess to space have certainly not slackened. Further, decisions on 6.1 research support to universities, for 160 ~ ~ . _ 140 - . f ~ WN . ,~ ~\ _ _ ............................................................................................................................................................................................................................. _ , . . , . . . , , , , . . , . , . . . , . . , . , MOO ~9~ ~9~ ~9~ ~9~ 99O ,~99~ ,~99> ,~99~ ~99°° HOOF HOOF ON ON a, O 120- . _ . _ . _ a, o a, co lo lo N IL 100 80 60 40 20 o FY 1 980s Peak to FY 1990s Trough: 44.3% ,, Fiscal Year FIGURE 2-6 Air Force TOA (TOA through FY 2002, PER for FY 2003, FYDP for FY 2004-FY 2007). SOURCE: DoD, 2002a. example, can have far-reaching impact, even to the point of affecting curricula; once made, such decisions cannot be readily or quickly reversed. There are likely to be times, therefore, when increases in basic and ap- plied research will be appropriate in order to protect the future. Considering the increased tempo of opera- tions and demands for modernization to meet the evolv- ing threats, the present is one of those times. In summary, the committee believes that there are many indicators suggesting that increased Air Force S&T investment may be appropriate. These include numerous new and complex threats, new opportunities opened up by basic research, new classes of systems entering the Air Force inventory, ongoing S&T pro- grams for which the investments need to maintained, and reductions in non-Air Force S&T efforts from which the Air Force benefits. Balancing the S&T Top Line with Other Requirements With constrained budgetary resources, all possible combinations of readiness, modernization, and S&T investment entail risk. Increasing investment in one area may reduce risk in that area but increase risk in other areas. The trade-offs that must be made are greatly complicated by uncertainty in the size of risks accompanying particular investment levels and uncer- tainty in comparing risks among areas. A number of the studies summarized in Appendix E have addressed this challenge. The Defense Science Board (DSB), for example, has recommended increasing the level of DoD S&T funding to a fixed percentage of the total DoD TOA (DSB, 2000, 2002~. In declining to endorse the DSB ' s percentage of TOA recommendation, the Air Force Scientific Advisory Board (SAB ~ noted that such an approach restricts leadership' s ability to manage the total budget in times of extreme constraints that is, to balance, and hopefully minimize, risk. Instead, the SAB recommended that the Air Force tie its S&T in- vestment strategy to its long-range plan and vision (SAB, 2001). As background for understanding the Air Force S&T funding allocation relative to the competing demands, the committee noted that during most of the 1990s the Air Force was faced with the demands of a high opera- tional tempo, including Northern and Southern Watch over Iraq, operations in the Balkans, and numerous humanitarian actions all in the face of funding that declined through FY 1997 and remained relatively low through the decade (see Figure 2-6~.
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE 70 - 60 - In o . _ 50 - 20 ~ 10 At _ Al 77 \~~ FY 1 980s Max to / \ FY1990sMin: / ~ RDT&E: 53.8% I it. 1 \ I ~ 1~ ,*' V ~_.. _ AN _ - I T ~ I I ~ AF RDT&E DEAF Procurement · AF Military Personnel x Operations & Maintenance Other (Milt Const., etc.) ~1 Procurement: 73.0°/O Modernization: 60.5% Mill Personnel: 37.4°/O O&M: 27.7% - \~,~,~ - I I I T I ~ I O 1 ~ 1 1 1 1 1 1 1 1 1 1 1 1 1 1 ~ 1 1 1 1 1 1 1 1 1 O <~' <~` ~ ~ 90 99~ 99~ 992~ 99°° OOO,pOo~,pOo~,~~Oo2) Fiscal Year 17 FIGURE 2-7 Air Force TOA by category (TOA for FY 1989-FY 2002, PBR for FY 2003, FYDP for FY 2004-FY 2007~. SOURCE: DoD, 2002a. Comparing Figures 2- 1 and 2-6, the committee noted that overall Air Force S&T funding fell from its peak in the 1980s by about the same percentage as the de- cline in overall Air Force TOA. While the S&T fund- ing in Figure 2-1 has in fact kept pace with recent in- creases in the overall Air Force TOA, this would not have been the case had the Air Force plan been imple- mented (reflected in Figure 2-2 by the curve for the PBR less the OSD additions). The Air Force distributed the overall TOA illustrated in Figure 2-6 among the major appropriation catego- ries, as shown in Figure 2-7. The figure shows that by the mid-199Os, modernization (RDT&E "research, de- velopment, test, and evaluation] plus procurement) was reduced by about 60 percent and personnel by about 35 percent, reflecting the decline in overall Air Force fund- ing. Although these reductions were partly offset by force reductions and reduced near-term emphasis on strategic nuclear capabilities, the result has been aging avionics (NRC, 2001c), aging platforms, and aging in- frastructure (NRC, 2001b), as well as personnel prob- lems (NRC, 2001a). As the total funding shown in Fig-
18 TABLE 2-1 Funding Increases (constant year dollars) in Real Terms Title Percentage Increase from FY99 TOA to FY03 PBR Percentage Increase from FY02 TOA to FY03 PBR TOA Personnel O&M Procurement RDT&E s&Ta 19.9 11.8 14.6 40.7 19.9 25.0 10.9 9.5 5.7 19.0 19.2 4.4 aWithout the OSD additions discussed earlier, S&T would have grown only 3 percent from the FY 1999 TOA to the FY 2003 PBR and would have declined by 14 percent from the FY 2002 TOA to the FY 2003 PBR. The growth from the FY 1999 TOA to the FY 2003 appropriation was 36.1 percent, and from the FY 2002 TOA, 13.6 percent. SOURCE: DoD, 2002a. ure 2-6 started to increase so that at least some of the demands could be addressed, the war on terrorism and the desire for force transformation created new de- mands. As a result, the Air Force leadership, which must balance the competing funding demands (subject to OSD and OMB oversight), had to make hard choices. Table 2-1 reflects these decisions as the change in the major budget categories from FY 1999 (planned about the time the concerns referred to in Chapter 1 started to arise) to FY 2003 (the latest data to which the commit- tee had full insight into the Air Force' s plans). As shown in the table, the largest increase since FY 1999 has been in procurement, where (as shown in Table 2-2) the increase is primarily to address aging platforms, special projects and programs, infrastruc- ture, and munitions, including those used heavily in Afghanistan. The data in Table 2-2 also show that the second- largest percentage increase since FY 1999 has been in S&T, largely due to congressional action, as discussed earlier. Conversely, from FY 2002 TOA to the FY 2003 PBR, after the Air Force balanced its program, the in- crease in S&T was only 4.4 percent (see Table 2-1~. (As noted earlier, without additions made by OSD for Transformational Wideband MILSATCOM and for Special Programs, the PBR for S&T for FY 2003 would have been below the S&T TOA for FY 2002.) The data in the last column of Table 2-1 show that most of the increases in personnel funding and RDT&E EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES funding over the 4-year period occurred in the FY 2003 PBR. The increase in personnel funding presumably reflects pent-up demand for pay and benefits. The breakout for RDT&E is shown in Table 2-3. As shown in Table 2-3, the increases in RDT&E funds primarily address aging platforms and avionics: The Joint Strike Fighter (intended to replace the F-16 and A-10) accounts for nearly one-third of the in- crease,8 while the F-22 (the replacement for the F-15) and the C-130J all address aging platforms. The C-5 and C-130 programs address life-extension activities. Among the space satellite systems, Advanced EHF is an upgrade and replenishment for MILSTAR, NPOESS for the Defense Meteorological Satellite Program (DMSP), GPS III for GPS II, and SBIRS High for the Defense Support Program (DSP). The next several paragraphs examine the meth- odology used by the Air Force to guide the deci- sions summarized in Figure 2-7 and Tables 2-1 through 2-3. To balance its budgetary requirements and set the S&T top line, the Air Force works within DoD's Planning, Programming, and Budgeting Sys- tem (PPBS). The PPBS is applied to develop the overall program for the Air Force, the other services, and the so-called Defense-wide programs managed directly by the defense agencies and OSD. The Air Force budget consists of recommended funding for operations and maintenance (O&M); personnel; pro- curement; research, development, test, and evalua- tion (which includes S&T); and other areas to be proposed by DoD to OMB and subsequently to the Congress in the President's budget. Under the PPBS, AFRL recommends the allocation of the top line S&T funding among 6.1, 6.2, and 6.3 research categories and then to specific programs. Based on AFRL's input, the Defense Planning Guid- ance (DPG), and other considerations, the Air Force determines the budget allocation for S&T. This is an iterative process. In some years, AFRL submits recommendations for increased funding in the form of unfunded require- ments. The committee understands that in recent years, requirements above the guidance budget level either have not been submitted by AFRL or have seldom been ~The Joint Strike Fighter EMD increase was 32 percent of the total RDT&E increase, but that amount was partly offset by reduc- tions in the budget for EMD of other programs so that the overall EMD increase is only 23 percent.
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE TABLE 2-2 Allocation of Procurement Increases from FY 1999 to FY 2003 19 Procurement Appropriation Percentage Increase: FY99 TOA to FY03 PBR Primary Sources of Increase Aircraft (3010) Other (3080) Missile (3020) (includes space) Ammunition (3011) 42 34 16 8 F-22, C-17, V-22 (partially offset by reductions for older platforms) Special support projects, electronics and telecommunications equipment (base communications, tactical C-E, base information), and vehicular equipment (material handling equipment) Special Programs, Minuteman modifications, replenishment/ upgraded satellites, air-launched missiles Rockets, bombs (including JDAM, WCMD), flares, fuses SOURCES: U.S. Air Force Committee Staff Procurement Backup Book, FY 2001 Amended Budget Request, February 2000; U.S. Air Force Committee Staff Procurement Backup Book, FY 2003 Budget Estimates, February 2002. elevated to the leadership, given their slim chances of being funded. The Air Force then balances the risks for readi- ness (O&M and personnel), modernization (devel- opment, test, and evaluation; and procurement), and military construction against those of S&T in pre- paring funding allocations in its program objectives memorandum (POM). Thus, in assessing whether "appropriate and sufficient technology is available to ensure the military superiority of the United States and counter future high-risk threats," as de- fined in the statement of task for the committee, the Air Force leadership has to balance the risks to near- term military superiority by balancing the risks among the elements of its longer-term programs. AFRL submits its S&T funding proposals about 2 years before funding becomes available, and planning must precede submission. Action within the PPBS is subsequently completed about 1 year before the S&T details are set in the annual appropriations act. Once the funding is available, S&T tasks must be executed to provide the technology basis for the acquisition pro- grams, usually a multiyear step. Thus, planning the S&T program must include long-range forecasts of fac- tors such as technology needs and scheduling for the acquisition programs that may apply the resulting tech- nology. The preceding discussion was necessarily abbrevi- ated; however, the point is that, in a fiscally constrained environment, achieving the best balance between Air Force S&T and other demands within a specific top line budget is a complex problem. The Air Force pro- cedures to generate an appropriate S&T top line by building from the bottom up (i.e., assembling specific TABLE 2-3 Allocation of RDT&E Increases from FY 2002 to FY 2003 RDT&E Budget Activity Percentage Increase: FY02 TOA to FY03 PBR Primary Sources of Increase (Rank Ordered) S&T Demonstration and validation EMD RDT&E management support Operational systems development 3 16 23 58 Advanced technology development Advanced EHF, Transformational Wideband MILSATCOM, NPOESS, GPS III Joint Strike Fighter, SBIRS High, ICBM, Counterspace Systems F-22, GPS, AWACS, C-5, C-130, selected activities, C- 130J, MILSATCOM terminals SOURCE: DoD, 2002b.
20 EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES technical tasks) are just as complex and involve the work of many people over multiple years. In summary, the Air Force leadership must set the top line funding for S&T in competition with other el- ements such as readiness and modernization (other than S&T) within fiscal constraints established by the Presi- dent and the Secretary of Defense. It is a difficult, com- plex task to which OSD and the Air Force apply a com- plex, multiyear, resource-intensive process. The committee was not presented with convincing argu- ments that the resulting S&T funding is now signifi- cantly out of balance with its budget competitors. IMPORTANCE OF S&T FUNDING STABILITY Perhaps the dominant characteristic of the S&T funding shown in Figure 2-1 is instability. Yet, the committee judges that stable funding is required for the effective and efficient generation and maturation of new technology over the long term, from 6.1 research, through 6.2 programs, 6.3 critical experiments, and fi- nally 6.3 advanced technology demonstrations (ATDs) into technology ready for application when needed in an acquisition program. This stability is needed both for the funding plans of individual projects and for the longer-term health of the research organizations in which they reside. Unplanned funding decreases interrupt or stretch out work, prevent or delay transition, and may lead to the closing of valuable facilities or the dissolution of re- search and development teams. Attempts to maintain teams may spread funding too thin across too many programs. To the extent that such "keep-alive" funding is applied, the result is typically little progress. De- creases not planned well in advance also result in the inefficiencies of "broken" programs. Cumulative de- creases over many years, as was the case in the reduc- tion of over 45 percent from FY 1989 to FY 1998 shown in Figure 2-1, could have a proportionally larger effect on program execution through continuing man- agement distraction, associated workforce reductions, and declining morale. Increases can also have destabilizing effects. In- creases that occur too fast can be greater than the system can efficiently absorb. It takes time to put into place S&T projects that are well planned and structured, strongly integrated with related projects, and that are relevant and contribute to overall S&T objectives. Furthermore, funding controlled by sources external to the Air Force can be cut off with- out concurrence or consultation, contributing sub- stantial instability. The committee recognizes that, as with any DoD or government funding line, stability is a difficult target, given exogenous factors such as congressional man- dates, abrupt DoD transfers of large programs into and out of the S&T budget, and unplanned operations. Nev- ertheless, the committee judges that stability, both in fact and in prospect, is a key characteristic of success- ful S&T programs and should be adopted as a planning guideline by the Air Force. AIR FORCE S&T PROGRAM INTERNAL BALANCE The Air Force reports that it regards the issue of in- vestment balance as having multiple aspects: topical areas (e.g., air versus space), expected payback time (near- versus mid- versus long-term), and the S&T to- tal versus other uses for the funds. It further reports that it has addressed balance by taking action on 4 of some 14 recommendations embodied in the reports ref- erenced in Chapter 1. The discussion here will focus on the balance among near-, mid-, and long-term efforts, consistent with the committee's statement of task. As indicated at the beginning of this chapter, the Air Force S&T program consists of three distinct budget activities: basic research (for brevity, often denoted as 6.1), applied research (6.2), and advanced technology development (6.3~.9 The discussion that follows identi- fies 6.1 as long-term, 6.2 as mid-term, and 6.3 as near- term. The Air Force S&T program proposed for FY 2003 consists of 27 program elements (PEs): 1 covering all of 6.1, 11 for 6.2, and 15 for 6.3. The funds in the 6.1 PE are divided among 11 science and engineering ar- eas. These, in turn, consist of a large number of indi- vidual projects and tasks. For example, in FY 2001, there were 132 AFRL 6.1 projects and 337 grants and contracts to universities and industry (Carlson, 2002~. The funds in the 11 PEs for 6.2 are spread over 45 projects, while the 15 PEs for 6.3 are divided among 44 projects. Overall, the committee understands that sub- sumed within this arrangement are a thousand or more individual tasks. The volume of data needed to describe 9The RDT&E Budget Activities, including those for S&T, are defined in the DoD Financial Management Regulation, Volume 2B, Chapter 5, Section 05020 1, June 2002.
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE BY BUDGET ACTIVITY FY03 PBR BAC (in millions) 6.1 219.1 6.2 697.5 6.3 742.9 TOTAL 1,659.6 FY03 BUDGET: $~.660 Billion Numbers may not add due to rounding. BY TECHNICAL AREA HUMAN EFFECTIVENESS 6% SPECIAL PROGRAMS 6% MUNITIONS 6% SPACE VEHICLES 6% INFORMATION 6% MATERIALS & MFG Rio DIRECTED ENERGY DUAL USE 5% ~ 1Y ° PROPULSION 15% AIR VEHICLES SENSORS r/O 1 0% BASIC RESEARCH 13% MILSATCOM 12% TECHNICAL AREA PROPULSION ......................................................................................................................................................... ' BASIC RESEARCH ................................................. M ~ USATCOM SENSORS AIR VEHICLES MATERIALS & MEG FY03 PBR 243.5 ...................... 219.1 ............................................................................... 195.0 162.7 123.0 1 21.9 . ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, _ _ _ _ _ _ _ _ _ _ _ _ _ INFORMATION ~_ ~ SPACE VEHICLES MUNITIONS SPECIAL PROGRAMS , ..................................................................................................... HUMAN EFFECTIVENESS 96.2 DIRECTED ENERGY DUAL USE TOTAL ................................ 85.8 10.6 1,659.6 FIGURE 2-8 Proposed Air Force S&T FY 2003 budget. SOURCE: Ruck, 2002. each task's technical and funding plan constrains the depth of any review that is practical outside AFRL. Any practical approach for allocating S&T funding must account for this reality. The Air Force S&T funding for 6.1, 6.2, and 6.3 proposed by the President for FY 2003 is shown in Figure 2-8. The split of 6.2 and 6.3 funding into techni- cal areas is also shown. The data show that among the 6.2 and 6.3 categories, propulsion receives the most 21 funding ($243.5 million), followed by MILSATCOM ($195 million one of the OSD additions), sensors ($162.7 million), air vehicles ($123 million), and ma- terials and manufacturing ($121.9 million). These top five categories make up over 50 percent of the total budget. The trend in funding from FY 2002 to FY 2003 in 6.1, 6.2, and 6.3 is shown in the Figure 2-9. The FY 2003 PBR for 6.1 and 6.2 decreased relative to both the
6.1 224.2 229.7 219.1 224.0 6.2 706.6 779.6 697.5 865.0 6.3 471.7 580.7 742.9 718.0 TOTAL 1,402.5 1,590.1 1,659.6 1,807.0 22 EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES FY03 FY02 PBR FY02 TOA FY03 PBR Appropriation BUDGET ACTIVITY FY02 PBR FY02 TOA FY03 PBR FY03 Appropriation . . Numbers may not add due to rounding. FIGURE 2-9 Air Force S&T by budget activity (FY 2003 constant dollars, in millions). SOURCES: Hunsberger, 2002; DoD, 2002a; Jones, 2002. FY 2002 PBR and TOA; 6.3 would have decreased without the OSD additions discussed earlier. For FY 2003, the 6.1 appropriation was higher than the PBR but less than the FY 2002 TOA. The 6.2 FY 2003 ap- propriation increased significantly. The 6.3 FY 2003 appropriation also provided a significant increase over the FY 2002 TOA but was lower than the PBR because of the issues regarding the OSD additions. Basic Research (6.~) The 6.1 activities are defined in the DoD Financial Management Regulation (FMR).~° The Air Force asso- ciates 6.1 with Technology Readiness Levels (TRL) 1 and 2.~ Key phrases in these definitions are "directed l°DoD FMR, Vol. 2B, Section 050201. Generally consistent but less detailed definitions are also contained in DoDI 5000.2 on the operation of the DoD acquisition system. iiSee GAO/NSIAD-99-162, p. 68, for definitions of the TRLs (GAO, 1999~. toward greater knowledge or understanding of the fun- damental aspects of phenomena . . . without specific applications . . . fundamental knowledge and under- standing . . . related to long-term national security needs . . . farsighted . . . involve pre-Milestone A efforts" and "Invention begins.... The application is speculative." Thus, the 6.1 budget managed by the Air Force Office of Scientific Research (the basic research arm of AFRL) is primarily one of "technology push," not nec- essarily directed toward a specific military application. In addition, the committee notes that a significant por- tion of 6.1 funding goes to the nation's universities and colleges, so it has the very important additional benefit of helping to build the pool of scientists and engineers (S&Es) an important consideration, since the Air Force continues to face a shortage of S&E personnel (see Chapter 3). The principal output of 6.1 activity is knowledge in the form of papers published in the open literature. Most of the technological underpinnings of today's military capabilities started at this fundamental level. Thus, 6.1 funding contributes to both national
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE 1 400 - 1 200 - ~_ to ~ 1 000 - in ~ 800 - o Cal in co 600 - \` _ '_ do_ ~ Basic Research (6.1) Applied Research (6.2) Ada. Tech. Dev. (6.3) ~ / ~ . ~ hi, ~ O- l l l l l l l l l l l l l l 1989 1 991 1993 1995 1997 1999 2001 2003 Fiscal Year FIGURE 2-10 Air Force S&T funding trends by budget activity (TOA through FY 2002, appropriation for FY 2003~. SOURCES: Hunsberger, 2002; DoD, 2002a. security and economic security. The 6.1 funding over time is shown in Figure 2-10. As shown in Figure 2-10, 6.1 funding declined dur- ing the mid- l990s but partially recovered over the late l990s and early 2000s. Work under 6.1 sets the stage for future technological opportunities, usually a decade or more in the future. These investments character- ized by uncertain outcomes, high risk, but possible high reward (for example, support for the work that led to the invention of the laser, adaptive optics, the develop- ment of self-healing polymer composites, dip pen nanolithography for nanoelectronics, and improved tracking algorithms) are intended to open new tech- nological opportunities and to prevent technological surprise. Because the outcome is uncertain and not usually related to near-term operational needs, the 6.1 program is perhaps the easiest budget line to cut arbitrarily, even though doing so mortgages the future from the viewpoint of both technology and personnel. The committee suggests that making the flow of tech- nology from 6.1 through 6.2/6.3, development, and into the field more readily apparent to the major operational commands and Air Force corporate leadership through the use of current and planned as well as retrospective examples would increase the insight into and interest in basic science on the part of Air Force senior leader- ship. 23 Applied Research (6.2) The DoD FMR cited above also defines 6.2, which the Air Force associates with TRL 3 and 4. Key phrases from these definitions are "study to understand the means to meet a recognized and specific national secu- rity requirement . . . translates promising basic research into solutions for broadly defined military needs . . . non-system specific technology efforts . . . directed to- ward general military needs with a view toward devel- oping and evaluating the feasibility and practicality of proposed solutions . . . precedes system specific re- search . . . pre-Milestone B efforts, also known as Con- cept and Technology Development phase tasks, such as concept exploration efforts" and "proof of concept . . . physically validate analytical predictions of sepa- rate elements of the technology.... Component and/or breadboard validation in laboratory environment . . . establish that the pieces will work together." In addition to the current Air Force administrative structure, 6.2 also funds most of the AFRL manpower and infrastructure. Figure 2-10 also shows the historical funding trends for 6.2. Like 6.1, 6.2 funding also declined in the mid- l990s but has recovered and now exceeds the level of FY 1989. Advanced Technology Development (6.3) Key phrases from the definitions in the DoD FMR and TRL 5 and 6 for 6.3 include "development of sub- systems and components and efforts to integrate sub- systems and components into system prototypes for field experiments and/or tests in a simulated environ- ment . . . includes concept and technology demonstra- tions of components and subsystems or system models . . . The models may be form, fit and function proto- types or scaled models . . . proof of technological feasi- bility and assessment of subsystem and component operability and producibility rather than the develop- ment of hardware for service use . . . direct relevance to identified military needs . . . pre-Milestone B efforts, such as system concept demonstration, joint and Ser- vice-specific experiments or Technology Demonstra- tions . . . do not necessarily lead to subsequent develop- ment or procurement phases" and "Component and/or breadboard validation in relevant environment . . . Sys- tem/subsystem model or prototype demonstration in a relevant environment . . . in a high fidelity laboratory environment or in simulated operational environment."
24 The 6.3 activities are divided into two major catego- ries critical experiments and advanced technology demonstrations. Critical experiments address technol- ogy development efforts that were enabled by 6.2 ini- tiatives and which may subsequently advance to ATDs. ATDs represent the final or most advanced phase of S&T development just prior to transition to an acquisi- tion program for development, production, and deploy- ment to an operational user. The committee was in- formed that AFRL intends to divide 6.3 funding about evenly between critical experiments and ATDs. As also shown in Figure 2-10, 6.3 funding declined sharply in the early 1990s, from about $1.2 billion in FY 1989 to about $530 million in FY 1994 (in constant FY 2003 dollars). It then ranged between about $480 million and $600 million, rising to $718 million in the FY 2003 appropriation. ATDs and Transition to 6.4 and Following Budge! Activities Recent Air Force management initiatives have fo- cused ATDs on projects expected to be ready to transi- tion to 6.4 or other acquisition budget activity after one more development cycle. Key phrases from the DoD FMR for the activities under 6.4, Advanced Compo- nent Development and Prototypes include these: "in- volve efforts prior to Milestone B . . . include technol- ogy demonstrations . . . Completion of Technology Readiness Levels 6 and 7.... A logical progression of program phases and development and/or production funding must be evident in the FYDP." The Air Force plan is to restrict ATDs to projects for which a major Air Force Command has programmed or plans to program funding for transition. This is an attempt to jump technology across the traditional gap between S&T and acquisition programs and ultimately into fielded capability. The Applied Technology Coun- cils (ATCs), a relatively new Air Force management initiative, provide forums to ensure warfighter interest and commitment to transition for each ATD (see the discussion of ATCs in Chapter 3~. Figure 2-10 portrays the historical balance between the TOA for 6.1, 6.2, and 6.3 in constant year FY 2003 i2In some cases, ATDs may provide a residual capability that can be used operationally, but they are not usually designed with the supportability features required for sustained operational use. EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES a: o ~ 40- (a rr 30- ._ a: o 0' 20- 10 ----- O ~ 6.2 Target 50% . _~ =~= it_ ^ 6.3 Target 35% + 6.1 ~ 6.2 _- 6.3 1 7 1 1989 1991 l I 1993 1995 1997 Fiscal Year l l , T T 1 1 1999 2001 2003 FIGURE 2-11 Percentage split of Air Force S&T TOA between 6.1, 6.2, and 6.3. SOURCES: Hunsberger, 2002; Jones, 2002. dollars. Figure 2- 11 shows the same data as a percent- age of the total annual S&T TOA. Figure 2-11 also shows the Air Force targets for a balanced S&T portfolio: 15 percent for 6.1,50 percent for 6.2, and 35 percent for 6.3 (Brandt,2002~. The allo- cations have been near the targets since the mid-199Os, essentially "on target" in FY 2002, and would have been near the targets in FY 2003 without the OSD ad- ditions discussed earlier (6.1 and 6.2 slightly above and 6.3 slightly below). As a matter of completeness, the committee notes that, like the constant year dollar level, the allocation to 6.3 is low compared with that in FY 1989 and the early 1990s. Comparing Balance Among the Services The 6.1, 6.2, and 6.3 funding balance among the ser- vices is compared in Table 2-4. As shown in the table, all three services have, on the average over FY 1989 to FY 2003, allocated the least to 6.1 and slightly more to 6.2 than to 6.3. The primary difference among the ser- vices is that the Navy allocates twice the fraction to 6.1 (and correspondingly less to 6.2 and 6.3) compared with the other services. SETTING THE PROPER S&T INVESTMENT LEVEL The committee was led by the totality of the factors discussed in this chapter to conclude that the most im-
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE TABLE 2-4 Percentage of Service S&T TOA Average over FY 1989 to FY 2003 Service 6.1 6.2a 6.3 Army Navy Air Force 12.9 27.3 14.5 43.8 38.6 43.6 43.2 34.0 41.9 NOTE: Some rows may not total to 100 percent because of rounding. SOURCES: Hunsberger, 2002; Jones, 2002. aAir Force includes laboratory personnel salaries in 6.2; Army and Navy do not. portent objective is to achieve basic stability in Air Force S&T. It also believes that S&T funding should be increased with modest, realistically achievable real growth to a sustainable funding level. The committee judges such a guideline to be critical in light of the deleterious effects of instability and the need for in- creased funding discussed earlier. It is clear that there are very real major opportunities and needs for new S&T investment. Since there was not time for a review of the content of the Air Force S&T portfolio, the com- mittee cannot judge from first-hand information how much of this demand can be met by the curtailment of current programs. The committee notes, however, that for the past 5 years, the Air Force Scientific Advisory Board has scrubbed the content of the program in great detail and presumes that the board has done a thorough and competent job; thus, much of the new emphasis must come from new investment. The question of how much the Air Force should in- vest in S&T is ill posed, so elaboration is required. The question implied in the committee's statement of task is Is the Air Force S&T program (and by implication its budget) sufficient to counter future high-priority threats and ensure military superiority? This is a differ- ent question from that addressed each year by the Air Force leadership (and its DoD and congressional over- sight), which is What should the Air Force S&T budget be in that year given competing budget priorities? The reports referenced in this committee's statement of task use still other criteria. The SAB recommended that the Air Force S&T investment be determined on the basis of the cost of the S&T program needed to satisfy the Air Force's critical future capabilities (SAB, 2001). The SAB did not specify an investment level, but im- 25 plied that the current level was too low. The Air Force Section 252 review (discussed in Chapter 3) concluded that the investment needed to satisfy fully the Air Force's short-term objectives and long-term challenges was roughly twice the investment then planned. The DSB and Quadrennial Defense Review put forth a percent-of-TOA approach, recommending, for ex- ample, that the DoD S&T investment be set at 3 per- cent of DoD TOA (significantly above the current level) (DSB, 2000, 2002; DoD, 2001~. The AFA ex- pressed concern about the decline in the Air Force S&T investment since the end of the Cold War and recom- mended that decline be reversed (AFA,2000~. A previ- ous NRC committee (NRC, 2001a) recommended that the Air Force S&T investment be increased to 1.5 to 2 times its FY 2001 level. While these recommendations have rationales in the respective reports, most are not based on quantitative analysis. This committee believes that stability, in fact as well as in prospect, is as important as a specific (reasonable) S&T funding level. Within the context of stability as a governing principle, what is the proper level of S&T funding and how do we get there? The committee is aware of the extreme difficulty in maintaining funding stability under the current annual budgeting process. Nevertheless, such stability is important to the future of the Air Force and the nation's security. Given a judi- cious choice of funding level and proper priority by Air Force leadership, the committee believes that it is pos- sible to stabilize the S&T funding to a much greater degree than the historical record would indicate. The objective is to avoid both the lows of the 1990s (which resulted in the concerns described in Chapter 1) and the highs or peaks of previous periods (that proved to be unsustainable and were always followed by years of debilitating declines). The first question, establishing the proper S&T fund- ing level, is challenging. Addressing the question of whether the S&T program is sufficient to counter future high-priority threats and ensure military superiority comprehensively and in a substantive, quantitative manner would require detailed study of the threats (cur- rent and projected), the current S&T program, and future needs and opportunities. It would need to evalu- ate the costs of pursuing specific technologies as well as to assess the risks in not pursuing them. Most likely, it would need to be conducted at a classified level. Such an effort on a $1.5 billion program divided into some 27 program elements containing more than 200 projects was well beyond the scope of this 7-month study.
26 While lacking an analysis-based, quantitative as- sessment as discussed above, it is possible to exam- ine the issue of the proper funding level by address- ing the second question, how to get there. The committee believes that the approach of 2 percent annual real growth over the 6-year period of the Future Years Defense Program (FYDP) has merit. This increase is modest in terms of annual growth, manageable by AFRL, and, in the committee's judg- ment, realizable within the pressures facing the Air Force budget. This is the same growth rate that Con- gress, in both the FY 1999 and FY 2000 National Defense Authorization Acts, said that the Secretary of Defense should have as an objective for defense S&T funding, especially Air Force S&T funding (U.S. Congress, 2000, 2001~. Over the 6-year pe- riod of the FYDP, a 2 percent real growth rate would bring the Air Force S&T budget to about the aver- age level of the past two decades. This represents a 12 to 14 percent increase over the FY 2004 PER (taken as a reference level). This increase would pro- vide funding to pursue new requirements and op- portunities beyond those that could be funded if ex- isting programs were trimmed. The committee notes that this investment is still below (but closer to) those of the Army and Navy. Recommendations for the detailed distribution of a funding increase are beyond the scope of this study. Broadly speaking, however, the committee suggests that growth should be balanced among near-, mid-, and far-term opportunities. The growth should apply to the sum of 6.1 and 6.2 budgets (with AFRL leadership determining the relative growth between the two) and to the 6.3 total. The growth in 6.1 and 6.2 funds is commingled here because the committee believes that there is more of a continuum between 6.1 and 6.2 than is generally acknowledged and that it is the responsibility of the AFRL leader- ship to determine the relative growth between the two. The committee notes, however, that the 6.1 budget has suffered considerable atrophy over the past decade, especially compared with that for 6.2. The 6.3 advanced technology demonstrations (ATDs) are most effective in supplying the latest technology when they are completed near the time that the technology is needed by an acquisition pro- gram. As a result, the allocation between critical experiments and ATDs should be modulated accord- ing to the demands of anticipated acquisition pro- grams. EFFECTIVENESS OF AIR FORCE SCIENCE AND TECHNOLOGY PROGRAM CHANGES FINDINGS AND RECOMMENDATIONS Finding 2-1. The committee holds firmly to the view that stability in Air Force S&T funding is the most criti- cal element of ensuring its S&T success. Finding 2-2. Increases in the level of investment in S&T in support of Air Force missions, at least over the near term, could be productively applied to ensure the long-term security and military superiority of the na- tion. Supporting factors include these: New and emerging threats most evident after the terrorist attacks of September 11, 2001; - The results of the S&T planning review imple- mented by the Air Force in response to Section 252 of the FY 2001 National Defense Authoriza- tion Act (P.L. 106-398) (which identified signifi- cant unfunded challenges and opportunities); - New types of systems such as directed energy now moving toward the field; The reduced S&T investment by others from which the Air Force historically benefits; and New opportunities (such as in the nano, biologi- cal, and the ever-expanding information sci- ences). Finding 2-3. While the balance among 6.1, 6.2, and 6.3 is different among the three services, the commit- tee was not presented with arguments suggesting that the distribution in the balance for the Air Force should be dramatically changed. Finding 2-4. The Air Force has not adequately ad- dressed the concerns raised by Congress and others re- garding the Air Force S&T investment level. The Air Force S&T investment rose during the late 1990s and early 2000s, primarily as a result of congressional in- creases. For FY 2004, however, after taking into ac- count the movement of programs under the Air Force S&T top line that previously had not been there, the Air Force requested less funding for the continuing Air Force S&T program than was received for FY 2003. Plans for similar reductions appear to be in place for FY 2005. The committee believes that the Air Force S&T investment objective stated by Congress in both the FY 1999 and FY 2000 National Defense Authori- zation Acts (2 percent real growth per year over the period covered by the Future Years Defense Program)
AIR FORCE S&T INVESTMENT LEVEL AND BALANCE has merit. In the committee' s judgment, this is modest in terms of real growth, manageable by the Air Force Research Laboratory, and realizable within the pres- sures facing the Air Force budget. Recommendation 2-1. The committee recommends that the Air Force S&T budget be grown, in accordance with the investment objective stated by Congress. When that level is achieved, every effort should be made to keep it there, thereby assuring future S&T in- vestment stability. Finding 2-5. The Air Force S&T budget covers about 60 percent of the funding for the Air Force Research Laboratory (AFRL). For the remainder, AFRL lever- ages funding by other Air Force programs, Defense- wide S &T programs (principally the Defense 27 Advanced Research Projects Agency), and other gov- ernment sources. The benefits of such leveraging are constrained by the direction that comes to AFRL with the external funding and by dependence on the paths taken by the external entities but magnified by the range of innovation and risk taking that consequently drive Air Force modernization. The committee is concerned that additional increases in non-Air Force S&T fund- ing could further jeopardize stability and result in the Air Force's losing the ability to mature the S&T needed by the acquisition programs. Recommendation 2-2. The balance between Air Force S&T and other sources of AFRL funding should be monitored with regard to impact on the stability of the total S&T program and the maturation and transition of the technology needed for acquisition programs.
