D
Allocation of Funding in the Naval Aviation Program at the Office of Naval Research

The Deputy Assistant Secretary of the Navy (DASN) for Research, Development, Test, and Evaluation (RDT&E) briefed the committee and provided a breakout of funding allocated to naval aviation technology at the Office of Naval Research (ONR) (Figure D.1). It showed that the President’s budget for ONR in fiscal year (FY) 2004 was $1,743 million, with investments in three major categories:

  • Discovery and Invention (D&I; categories 6.1 and early 6.2),

  • Exploitation and Deployment (E&D; categories late 6.2 and 6.3), and

  • Other.

D&I programs were funded at $697.4 million, or 40 percent of the budget. Of this amount, $448.5 million was allocated to internal ONR programs, $157.7 million to the Naval Research Laboratory base of support, and the remaining $91.3 million to various Office of the Secretary of Defense (OSD) programs. E&D funding of $844.5 million, amounting to 48 percent of the budget, included the categories of Future Naval Capabilities (FNCs), Naval Innovations, Marine Corps Warfighting Laboratory programs, and some OSD programs. The FNCs (categories 6.2 and 6.3) were funded at $500.3 million, or 29 percent of the budget. Innovative Naval Prototypes (INPs) activities were initially funded at $225.5 million, but congressional appropriations (plus-ups) of $433 million increased the total to $658.5 million, or 38 percent of the budget. The “Other” category total of $201.3 million (12 percent) includes $164.7 million of pass-



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Identification of Promising Naval Aviation Science and Technology Opportunities D Allocation of Funding in the Naval Aviation Program at the Office of Naval Research The Deputy Assistant Secretary of the Navy (DASN) for Research, Development, Test, and Evaluation (RDT&E) briefed the committee and provided a breakout of funding allocated to naval aviation technology at the Office of Naval Research (ONR) (Figure D.1). It showed that the President’s budget for ONR in fiscal year (FY) 2004 was $1,743 million, with investments in three major categories: Discovery and Invention (D&I; categories 6.1 and early 6.2), Exploitation and Deployment (E&D; categories late 6.2 and 6.3), and Other. D&I programs were funded at $697.4 million, or 40 percent of the budget. Of this amount, $448.5 million was allocated to internal ONR programs, $157.7 million to the Naval Research Laboratory base of support, and the remaining $91.3 million to various Office of the Secretary of Defense (OSD) programs. E&D funding of $844.5 million, amounting to 48 percent of the budget, included the categories of Future Naval Capabilities (FNCs), Naval Innovations, Marine Corps Warfighting Laboratory programs, and some OSD programs. The FNCs (categories 6.2 and 6.3) were funded at $500.3 million, or 29 percent of the budget. Innovative Naval Prototypes (INPs) activities were initially funded at $225.5 million, but congressional appropriations (plus-ups) of $433 million increased the total to $658.5 million, or 38 percent of the budget. The “Other” category total of $201.3 million (12 percent) includes $164.7 million of pass-

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Identification of Promising Naval Aviation Science and Technology Opportunities FIGURE D.1 President’s FY 2004 Budget for Office of Naval Research Science and Technology. SOURCE: Michael McGrath, Deputy Assistant Secretary of the Navy (RDT&E), “DoN S&T Planning,” presentation to the committee on October 26, 2004. through funding from the U.S. Joint Forces Command and some minor funding from various sources. In 1999 the Department of the Navy adopted the FNC process as a means of concentrating and focusing its existing 6.2 and 6.3 S&T activities to achieve some near-term technology transitions into the fleet. The Department of the Navy Science and Technology Corporate Board, consisting of the Vice Chief of Naval Operations, the Assistant Commandant of the Marine Corps, and the Assistant Secretary of the Navy for Research, Development, and Acquisition (ASN[RDA]), selects and prioritizes the investments in the FNCs. Each FNC is directed by an integrated product team that brings the perspectives of all the stakeholders to bear: requirements, acquisition, S&T, Office of the Chief of Naval Operations (OPNAV), and operating forces. While notable in the attempt to transition technology to the users, the FNCs are faced with the daunting task of getting the most out of S&T activities that were not planned and optimized from the start to meet user requirements. INPs are high-risk/high-payoff projects that could be potential “game changers.” They exceed FNC limits in both risk and schedule. The criteria for an INP selection were not explained to the committee; however, the DASN RDT&E in his presentation stated that the INPs currently lacked advocacy beyond the Chief

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Identification of Promising Naval Aviation Science and Technology Opportunities TABLE D.1 Fiscal Year 2004 Funding for Naval Aviation at ONR (millions $) ONR Dept. Dept. Name ONR ONR + Other ONR31 Information/electronics 107 160 ONR32 Oceans 9 10 ONR33 Materials/physical 19 35 ONR34 Human systems 4 11 ONR35 Naval expeditionary 218 262 ONR36 Industrial programs 1 10   TOTAL 358 488 of Naval Research (CNR), and so transition beyond the demonstration phase was doubtful. While FNCs (near-term benefits) and INPs (potential game changers) make sense in principle, the committee is concerned that only 40 percent of the Navy’s S&T budget is being spent on the D&I seed corn of the future. The committee is unaware of any portfolio analysis that showed that this investment distribution was appropriate. The committee asked for a breakout of the funding dedicated to naval aviation across all ONR departments. A FY 2004 breakout of the 6.1, 6.2, and 6.3 accounts was provided by ONR Code 35 and is shown in Table D.1. Naval aviation received initial funding of $358 million, or 21 percent of the total ONR budget in FY 2004, with Code 35 receiving about 61 percent of this funding. The naval aviation allocation increases to 28 percent when the Defense Advanced Research Projects Agency and congressionally directed funding is also included. The contributions of the Air Force and Army aviation S&T to naval aviation objectives are not incorporated into these numbers. Is discretionary annual funding of $358 million and total funding of $488 million, including add-ons amounting to some 21 to 28 percent of the total ONR S&T budget, sufficient for naval aviation? The committee notes that naval aviation consumes 30 to 40 percent of the total Navy procurement budget; therefore, on that basis the 21 to 28 percent share of the S&T budget might seem low. Due to the lack of detailed technology plans, the committee found it difficult to determine the adequacy of current funding based on the information provided. Even if the current S&T funding level is adequate, are the funds optimally allocated across the accounts and ONR codes? The committee concluded that the allocation distribution may not be optimal. The ONR Code 35 department expressed particular concern over projected significant decreases in its year-to-year upcoming funding. Of special concern to the committee was the minuscule amount of current D&I funding in the 6.1 category performed by this organization, despite the fact that it is the lead code for naval aviation S&T. The committee was told that the 6.1 funding level in FY

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Identification of Promising Naval Aviation Science and Technology Opportunities 2004 was $4.5 million but was scheduled to be reduced to approximately $2.5 million in FY 2005. Clearly there is a problem for the future of naval aviation when the D&I category in the principal naval aviation S&T department is approaching only 1 percent of the budget available to that department and when the total S&T funding for the organization is projected to decrease by over 50 percent over the next few years. The DASN(RDT&E) briefed the committee and discussed an S&T review for ASN(RD&A), which included the programs and processes at ONR.1 He concluded that ONR needs a strategic plan for developing S&T and a process for assessing the overall balance of the S&T portfolio. The CNR provided a personal briefing to the committee on the status and achievements of ONR. He acknowledged the current lack of and need for a naval aviation strategic S&T plan and committed his organization to work with the Naval Air Systems Command (NAVAIR) in the creation of one. The Chief Technology Officer of NAVAIR briefed the committee and also committed his organization to work with ONR to develop a strategic S&T plan for naval aviation over the next year. AIR-00X (NAVAIR’s S&T manager) acknowledged that there is no formal process for the assessment or transitioning of 6.1 to 6.3 aviation-related efforts at ONR, that naval aviation technology leaders are spread across various laboratories and commands, and that NAVAIR’s current strategy is limited to exploiting near-term gains. AIR-00X opined that the aviation visionaries now in industry need to be tapped to bring new perspectives into NAVAIR and ONR. The Deputy Commandant for Aviation, HQMC, briefed his view of the future of Marine Corps aviation and its role in Naval Power 21. OPNAV N70 described the use of war-fighting scenario analyses to identify key capability gaps and to both support the budget process and guide the path of the FNCs. 1   Michael McGrath, Deputy Assistant Secretary of the Navy (RDT&E), “DoN S&T Planning,” presentation to the committee on October 26, 2004.