Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Estimated Impacts of Sequestration-Level Funding

UNITED STATES DEPARTMENT OF DEFENSE FISCAL YEAR 2015 BUDGET REQUEST

APRIL 2014

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

The estimated cost of this report or study for the Department of Defense is approximately $19,000 in DoD labor for the 2014 Fiscal Year.
Generated on 2014Apr03 RefID: 8-1214AF3

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Table of Contents 1.
2.

Overview ............................................................................................................. 1-1

Service and Appropriation Level Impacts .................................................................... 2-1 Change by Service ........................................................................................................... 2-1 Change by Appropriation Title........................................................................................... 2-1

3.

Force Structure Impacts ................................................................................................. 3-1 Army .................................................................................................................................. 3-1 Marine Corps..................................................................................................................... 3-2 Navy .................................................................................................................................. 3-3 Air Force............................................................................................................................ 3-4

4.

Modernization Impacts ................................................................................................... 4-1 Summary ........................................................................................................................... 4-1 Army .................................................................................................................................. 4-3 Marine Corps..................................................................................................................... 4-5 Navy .................................................................................................................................. 4-7 Air Force......................................................................................................................... 4-10 Joint................................................................................................................................. 4-13 Missile Defense ............................................................................................................... 4-16

5.

Operation and Maintenance (O&M) Impacts................................................................. 5-1 Summary of Service Readiness Funding .......................................................................... 5-1 Facilities Sustainment, Restoration, and Modernization (FSRM) ...................................... 5-4 Installation Services .......................................................................................................... 5-5 Non-Defense and Other Defense O&M ............................................................................ 5-6

6.

Military Construction (MILCON) Impacts ...................................................................... 6-1 Summary of MILCON ........................................................................................................ 6-1

7.

Other Important Initiatives ............................................................................................. 7-1 Economic Adjustments ...................................................................................................... 7-1 Compensation Savings ..................................................................................................... 7-1

TABLE OF CONTENTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

1. OVERVIEW
The Department of Defenses Fiscal Year (FY) 2015 budget submission provides the resources necessary to protect and advance U.S. interests and to execute the updated defense strategy, although at increased levels of risk for some missions relative to the planned funding levels in the FY 2014 budget. This budget complies with the limits established for FY 2015 in the Bipartisan Budget Act of 2013 (BBA), but over the remainder of the Future Years Defense Program (FYDP), it exceeds the estimated limits on base budget discretionary DoD funding under current law by $115 billion. These estimated limits reflect the automatic reductions of the caps on Government-wide discretionary funding established in the Budget Control Act of 2011 (BCA). For simplicity, this report will refer to these limits as BCA levels or sequestration levels. This report outlines the impacts the Department would face today in having to plan and operate at the sequestration levels and documents the significant cuts to forces, modernization, and readiness that would be required at those levels. Of course, BCA-level funding would have similar impacts for non-defense programs, and any increase in defense discretionary caps should be matched by an equivalent increase in the non-defense caps. For defense, this report illustrates the additional warfighting risk the Department will incur if the BCAs automatic reductions persist. The Department will continue to review and refine this plan as conditions warrant, so while this report shows a specific set of impacts, those impacts may change. The automatic reductions required by the BCA would impose significant cuts to Department resources that would significantly increase risks both in the short- and long-term. These cuts would be in addition to several reductions in planned funding that the Department has already absorbed. Over the past several years, planned DoD spending has been significantly reduced by the following actions: To comply with the original discretionary spending caps in the BCA, FY 2012 enacted appropriations and the FY 2013 Presidents Budget reduced DoD funding by $487 billion compared with the ten-year plan in the FY 2012 Presidents Budget. The March 2013 sequestration reduced base budget FY 2013 DoD funding by an additional $32 billion. Consistent with the revised caps in the BBA, FY 2014 enacted appropriations reduced DoD funding by $31 billion compared with the Presidents Budget request, and the FY 2015 Presidents Budget requested $45 billion less than was planned in the FY 2014 budget. Together, these cuts total almost $600 billion. Accordingly, the Department's planned budgets across the FYDP have been substantially reduced. The Services have already reduced force structure and planned modernizations prior to any additional cuts discussed here. Additionally, compensation savings have been assumed at both funding levels. If these proposed compensation reforms are not enacted, the Department will have no choice but to make further cuts elsewhere in the budget that will deprive our troops of the training and equipment they need to succeed in battle.
CHAPTER 1 1-1 OVERVIEW

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

With the addition of projected sequestration-level cuts for FY 2016 through 2021, reductions to planned defense spending for the ten-year period from FY 2012 to 2021 will exceed $1 trillion. If sequestration-level cuts persist, our forces will assume substantial additional risks in certain missions and will continue to face significant readiness and modernization challenges. These impacts would leave our military unbalanced and eventually too small to meet the needs of our strategy fully. At sequestration-level funding, major reductions from the FY 2015-2019 Presidents Budget request would include: Reducing one squadron of F-35 aircraft (cutting acquisition of 15 aircraft would prevent fielding the squadron) Eliminating the fleet of KC-10 tankers Cutting operational surface combatant ships by 7 in FY 2019 Cutting procurement of 8 ships across the FYDP Divesting the Global Hawk Block 40 fleet Divesting the Predator fleet beginning in FY 2016 Eliminating planned purchases of Reaper aircraft in FY 2018 and FY 2019 Reducing Service readiness funding by $16 billion over the FYDP to include approximately $9 billion in depot/ship maintenance, which would further increase Service maintenance backlogs With respect to readiness, sequestration-level funding cuts would intensify existing shortfalls and delay timelines for building joint readiness for full-spectrum operations. Furthermore, if Congress acts to support FYDP funding at the PB15 level, the Department will not have to cut: Army forces to a total force of 420K Active, 315K National Guard, and 185K Reserve Marine Corps forces to a total active force of 175K An aircraft carrier (CVN-73) to a total inventory of ten aircraft carriers NOTE: Throughout this report we compare the FY 2015 President's Budget FYDP position to a five-year plan that reflects the estimated automatic reductions required by the BCA in FY 2016-2019. All tables show FY 2015 at the PB15 level; only FY 2016-2019 reflect the BCA levels. For simplicity the tables reflecting BCA reductions in FY 20162019 are therefore labeled and referred to throughout the report by the BBA/BCA short hand notation.

CHAPTER 1 1-2

OVERVIEW

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

2. SERVICE AND APPROPRIATION LEVEL IMPACTS

CHANGE BY SERVICE
Under the BBA/BCA scenario, DoD funding would remain at the Presidents Budget (PB) 2015 level in FY 2015, and then decline by an estimated $35.3 billion in FY 2016 and an estimated $115.2 billion across the FYDP. Reductions would be made in every Service. Significant reductions to Defense Agencies have already been accomplished at the PB15 level and their funding would be decreased marginally at the sequestration levels.

As of 21-FEB-2014; reflects Discretionary Budget Authority

CHANGE BY APPROPRIATION TITLE

The BBA/BCA reductions would affect all appropriations, with one-third of the cuts being taken in Operation and Maintenance (O&M) accounts and nearly two-thirds in the modernization accounts. In fact, the O&M title would grow at an average of only approximately 2 percent per year in FY 2015-2019 at sequestration levels, compared with 3 percent per year in FY 2015-2019 at the FY 2015 Presidents Budget level. The Research, Development, Test and Evaluation (RDT&E) title would actually decline across the FYDP at sequestration levels, severely curtailing the Departments ability to develop new technologies. Investment (Procurement and RDT&E) would grow at only 14 percent in FY 2015-2019 under the BBA/BCA levels, while it would grow nearly 23 percent in the FY 2015 President's Budget. Moreover, investment would account for nearly 60 percent of the total reduction in the BBA/BCA case, further eroding the Departments ability to

CHAPTER 2

SERVICE AND APPROPRIATION LEVEL IMPACTS 2-1

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

modernize and improve our forces. Subsequent sections of this report describe the impacts to those accounts in more detail.

CHAPTER 2

SERVICE AND APPROPRIATION LEVEL IMPACTS 2-2

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

3. FORCE STRUCTURE IMPACTS

ARMY

Army force structure is shown in Figure 3-1. There would be no changes from PB15, as submitted, to BBA/BCA. However, PB15 Army end strength for FY 2017-19 will be reviewed further in subsequent budget cycles. If Congress acts to support the outyear PB15 topline, the Department will maintain the Army at a force of 970-980K (440-450K Active, 335K National Guard and 195K Reserve).
Figure 3-1. Army Force Structure
Item Active end strength (K) Position PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA FY 2015 490 490 32 32 350 350 28 28 202 202 258 258 FY 2016 470 470 29 29 336 336 26 26 195 195 249 249 FY 2017 *450 450 *28 28 *329 329 *25 25 *190 190 244 244 FY 2018 *430 430 *25 25 *322 322 *22 22 *186 186 238 238 FY 2019 *420 420 *24 24 *315 315 *22 22 *185 185 238 238

Active BCTs

National Guard end strength (K)

National Guard BCTs

Reserve end strength (K)

Civilian Personnel (K)

* PB15 Army end strength for FY 2017-2019 will be reviewed further in subsequent budget cycles. If Congress acts to support the outyear PB15 topline, the Department would maintain the Army at a force of 970-980K (440-450K Active, 335K National Guard and 195K Reserve.

CHAPTER 3 3-1

FORCE STRUCTURE IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

MARINE CORPS

Marine Corps force structure is shown in Figure 3-2. There would be no changes from PB15, as submitted, to BBA/BCA. However, PB15 Marine Corps end strength will be reviewed further in subsequent budget cycles. If Congress acts to support the outyear PB15 topline, the Department will maintain the Active Marine Corps at a force of 182K.
Figure 3-2. Marine Corps Force Structure
Item Active end strength (K) Position PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA FY 2015 184 184 23 23 39 39 8 8 18 18 1 1 21 21 FY 2016 *179 179 *21 21 39 39 8 8 *18 18 1 1 21 21 FY 2017 *175 175 *21 21 39 39 8 8 *18 18 1 1 20 20 FY 2018 *175 175 *21 21 39 39 8 8 *18 18 1 1 20 20 FY 2019 *175 175 *21 21 39 39 8 8 *18 18 1 1 20 20

Active infantry battalions

Reserve end strength (K)

Reserve infantry battalions

Active TACAIR squadrons

Reserve TACAIR squadrons

Civilian Personnel (K)

* PB15 Marine Corps end strength for FY 2016-2019 will be reviewed further in subsequent budget cycles. If Congress acts to support the outyear PB15 topline, the Department would maintain the Active Marine Corps at a force of 182K.

CHAPTER 3 3-2

FORCE STRUCTURE IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

NAVY

Navy force structure is shown in Figure 3-3. For most Navy force structure elements, the BCA funding level would have a greater impact on the post-FYDP force levels, because 8 fewer ships would be procured and would deliver outside the FYDP. The one exception would be cruisers and destroyers. At the BCA funding level, the Navy would lay-up 6 destroyers (in addition to the 11 cruisers) awaiting mid-life modernization and overhaul. This would extend the period that the ships would not be available for regular operations and surge. The aircraft carrier GEORGE WASHINGTON (CVN-73) is scheduled for refueling starting in FY 2016. At the PB15 budget level, the Department intends to fund this refueling, thus maintaining a force of 11 carriers. At sequestration-level funding, the Department would not fund the refueling, retiring this carrier and its associated air wing.
Figure 3-3. Navy Force Structure
Item Carriers Position PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA FY 2015 10 10 85 85 74 74 11 11 30 30 30 30 54 54 35 35 1 1 194 194 FY 2016 *10 10 89 89 78 72 11 17 31 31 30 30 1 1 52 52 34 34 1 1 194 194 FY 2017 *10 10 90 90 79 73 11 17 32 32 31 31 1 1 49 49 34 34 1 1 192 192 FY 2018 *10 10 91 91 80 73 11 18 33 33 32 32 1 1 51 51 34 34 1 1 190 190 FY 2019 *10 10 92 92 82 75 10 17 33 33 32 32 1 1 51 51 34 34 1 1 189 189

Cruisers/destroyers Operational In lay-up

Amphibious ships Operational In lay-up

Attack submarines

Active TACAIR squadrons

Reserve TACAIR squadrons

Civilian Personnel (K)

* PB15 carrier inventory and associated air wings for FY 2016-2019 will be reviewed further in subsequent budget cycles. If Congress acts to support the outyear PB15 topline, the Department would maintain a force of 11 carriers.

CHAPTER 3 3-3

FORCE STRUCTURE IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

AIR FORCE

Air Force structure is shown in Figure 3-4. At the BCA funding level, the Air Force would field one fewer F-35A squadron by the end of the FYDP. At this funding position, it would also shrink its tanker fleet to 468 aircraft by FY 2019 by terminating the entire KC-10 force starting in FY 2016 (fully removing the force by FY 2020). At the BCA position, the Air Force would divest the entire Global Hawk Block 40 force in FY 2016. It would also terminate the MQ-1 Predator fleet in FY 2016 and substantially reduce the MQ-9 Reaper fleet in FY 2018 and 2019. These changes would result in only 45 fully sustained Predator/Reaper CAPs by the end of the FYDP compared to 55 at the PB15 funding level.
Figure 3-4. Air Force Structure
Item Active TACAIR sqdns Position PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA PB15 BBA/BCA FY 2015 27 27 20 20 3 3 455 455 32 32 18 18 11 11 50 42 177 177 FY 2016 26 26 20 20 3 3 466 460 32 32 18 18 11 50 35 180 180 FY 2017 26 26 19 19 3 3 478 463 21 21 11 50 38 182 182 FY 2018 26 26 18 18 3 3 480 468 21 21 11 52 41 181 181 FY 2019 27 26 18 18 4 4 485 468 21 21 11 55 45 181 181

National Guard TACAIR squadrons

Reserve TACAIR squadrons

Tankers

U2

Global Hawk 30

Global Hawk 40

Predator/Reaper CAPs

Civilian Personnel (K)

CHAPTER 3 3-4

FORCE STRUCTURE IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

4. MODERNIZATION IMPACTS

SUMMARY
Procurement and Research, Development, Test and Evaluation (RDT&E) positions and reductions are shown in Figures 4-1 through 4-3. Combat Systems includes procurement of aircraft, warships, tracked vehicles and special operations forces equipment. Systems Development includes all RDT&E that is not Science and Technology (S&T). Maintenance, Training and Support includes investment for equipment, vehicles, and facilities dedicated to these areas. Modernization reductions for space systems are also a small part of this area. Munitions include ammunition, weapons, missiles and associated equipment.
Figure 4-1. PB15 Procurement and RDT&E
Item ($B) Combat Systems Systems Development Maintenance, Training and Support Munitions Communications and Electronics Science and Technology Modifications Spares and Repair Parts Non Defense and Other Total FY 2015 34.5 40.0 16.9 7.8 7.6 11.5 2.3 6.2 27.1 153.9 PB15 FY 2016 43.0 42.8 21.0 9.8 9.0 12.0 3.0 7.5 29.6 177.5 FY 2017 45.8 41.4 22.4 10.3 9.1 12.1 2.5 7.7 29.9 181.3 FY 2018 47.2 39.5 24.8 10.5 9.5 12.3 2.5 8.5 30.4 185.2 FY 2019 47.5 39.9 25.7 11.2 9.9 12.5 2.5 8.9 30.7 188.8 FYDP 218.0 203.6 110.8 49.6 45.0 60.5 12.7 38.8 147.7 886.7

Figure 4-2. BBA/BCA Procurement and RDT&E
Item ($B) Combat Systems Systems Development Maintenance, Training and Support Munitions Communications and Electronics Science and Technology Modifications Spares and Repair Parts Non Defense and Other Total BBA/BCA FY 2015 FY 2016 34.5 35.0 40.0 40.6 16.9 19.2 7.8 8.3 7.6 8.1 11.5 11.6 2.3 2.5 6.2 6.9 27.1 24.7 153.9 157.0 FY 2017 40.3 38.9 21.1 8.8 8.0 11.7 2.2 7.3 25.3 163.6 FY 2018 44.0 37.2 22.6 9.4 8.6 11.9 2.1 8.4 25.5 169.9 FY 2019 46.4 37.7 24.4 10.2 9.3 12.1 2.3 8.5 25.2 176.1 FYDP 200.2 194.4 104.3 44.6 41.6 58.8 11.5 37.3 127.8 820.5

CHAPTER 4 4-1

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Figure 4-3. BBA/BCA Procurement and RDT&E Reductions

Item ($B) Combat Systems Systems Development Maintenance, Training and Support Munitions Communications and Electronics Science and Technology Modifications Spares and Repair Parts Non Defense and Other Total BBA/BCA - PB15 FY 2015 FY 2016 FY 2017 (8.0) (5.5) (2.2) (2.5) (1.8) (1.3) (1.4) (1.6) (0.9) (1.1) (0.4) (0.4) (0.4) (0.3) (0.6) (0.4) (4.9) (4.6) (20.5) (17.7) FY 2018 (3.2) (2.3) (2.2) (1.0) (0.8) (0.4) (0.3) (0.2) (4.9) (15.3) FY 2019 (1.1) (2.2) (1.3) (1.1) (0.6) (0.4) (0.1) (0.3) (5.6) (12.7) FYDP (17.8) (9.2) (6.5) (5.1) (3.4) (1.6) (1.2) (1.5) (19.9) (66.2)

S&T is a key investment area that enables our military to maintain a competitive advantage over our adversaries. Maintaining consistent S&T funding even at sequestration levels would allow the Department to continue to invest in critical research and technology development initiatives that contribute to future capability improvements, such as supporting the Departments rebalance towards the Asia-Pacific. Therefore, BCA funding for S&T would be relatively unchanged compared with PB15 funding. Minor Procurement for supplies and equipment other than major weapons systems (specifically any appropriations other than Aircraft Procurement, Shipbuilding and Construction, and Wheeled and Tracked Combat Vehicles) is an important support element to sustain the warfighting capability of the force. Minor Procurement is a portion of the entries in Figure 4-3 (primarily Combat Systems; Maintenance, Training and Support; Munitions; and Communications and Electronics). It would represent about 30 percent of the overall modernization reduction in FY 2016 but would be a smaller percentage of the overall modernization reductions in the remaining years of the FYDP. Over 50 percent of the BCA modernization reduction would relate to Combat Systems, Systems Development and Munitions. Select program reductions for these areas are shown below by Service.*

* Figures 4-4 through 4-31 show budget line items with significant reductions. The PB15 and BBA/BCA funding in these figures may not reflect total program values because a program could have more than one budget line item (Example: "DDG-51", "DDG Mod"). Procurement quantity changes are shown when applicable.

CHAPTER 4 4-2

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

ARMY
Blackhawk Blackhawk investments and procurement quantities are shown in Figure 4-4. PB15 funds additional aircraft beginning in FY 2016, allowing for the negotiation of a follow-on multi-year procurement starting in FY 2017. These additional aircraft would not be funded at the BCA funding level.
Figure 4-4. Blackhawk
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 1,369 1,369 79 79 FY 2016 1,296 963 (334) 71 56 (15) FY 2017 1,508 686 (821) 70 28 (42) FY 2018 1,542 1,542 104 104 FY 2019 1,486 1,401 (85) 86 82 (4) FYDP 7,201 5,961 (1,240) 410 349 (61)

BudgetLineItem="UH60BlackhawkMModel(MYP)"

Apache Remanufacture Apache remanufacture investments and procurement quantities are shown in Figure 4-5. PB15 funds additional aircraft buys, achieving economic procurement rates in FY 2016 versus FY 2018 under the BCA level of funding.
Figure 4-5. Apache Remanufacture
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 651 651 25 25 FY 2016 1,203 742 (461) 40 29 (11) FY 2017 1,273 868 (405) 69 33 (36) FY 2018 1,370 1,093 (277) 72 51 (21) FY 2019 1,102 1,030 (72) 53 54 1 FYDP 5,599 4,384 (1,215) 259 192 (67)

BudgetLineItem="AH64ApacheBlockIIIAReman"

CHAPTER 4 4-3

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Stryker Stryker double-v hull investments are shown in Figure 4-6. PB15 funds completing the buy of a third brigade set of double-v hull Strykers and buy a fourth brigade set. At BCA levels, the fourth brigade set would not be funded.
Figure 4-6. Stryker Position PB15 BBA/BCA Delta

Units $M $M $M

FY 2015 385 385 -

FY 2016 455 155 (300)

FY 2017 397 (397)

FY 2018 99 (99)

FY 2019 -

FYDP 1,336 541 (796)

BudgetLineItem="StrykerVehicle"

Light Utility Helicopter (LUH) Light Utility Helicopter investments and procurement quantities are shown in Figure 4-7. PB15 fully funds the procurement of the aircraft needed to replace the Army legacy single engine training fleet. At the BCA level, the Army National Guard would be required to transfer 45 aircraft to the Active Component training establishment and there would be insufficient funds to replace them.
Figure 4-7. LUH
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 417 417 55 55 FY 2016 388 (388) 45 (45) FY 2017 FY 2018 FY 2019 FYDP 804 417 (388) 100 55 (45)

BudgetLineItem="Helicopter,LightUtility(LUH)"

CHAPTER 4 4-4

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

MARINE CORPS
CH-53K CH-53K investments and procurement quantities are shown in Figure 4-8. At BCA levels, the production of the CH-53K helicopter would be delayed by one year, increasing costs and extending reliance on the less capable legacy CH-53E helicopter fleet.
Figure 4-8. CH-53K
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 573 573 FY 2016 755 714 (41) FY 2017 944 518 (426) 2 (2) FY 2018 915 648 (267) 4 2 (2) FY 2019 1,241 940 (301) 7 4 (3) FYDP 4,429 3,394 (1,035) 13 6 (7)

BudgetLineItems="CH53K(HeavyLift)"and"CH53KRDTE"

Amphibious Combat Vehicle ACV investments are shown in Figure 4-9. At the PB15 funding level the Marine Corps begins development of the follow-on ACV program to replace the 40-year old legacy vehicle. At BCA funding, only initial scoping and research efforts could be started.
Figure 4-9. ACV Position PB15 BBA/BCA Delta

Units $M $M $M

FY 2015 106 106 -

FY 2016 199 111 (88)

FY 2017 201 117 (84)

FY 2018 244 112 (132)

FY 2019 328 114 (214)

FYDP 1,078 559 (518)

BudgetLineItem="MarineCorpsAssaultVehicles"

CHAPTER 4 4-5

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

V-22 V-22 investments are shown in Figure 4-10. At BCA funding levels, the V-22 program would be underfunded in Fiscal Years 2018 and 2019, but would not change procurement quantities. Further adjustments to the program would be necessary at the BCA level to correct this imbalance.
Figure 4-10. V-22
Position PB15 BBA/BCA Delta Units $M $M $M FY 2015 1,533 1,533 FY 2016 1,496 1,496 FY 2017 1,447 1,529 82 FY 2018 430 297 (133) FY 2019 440 171 (269) FYDP 5,345 5,025 (320)

BudgetLineItem="V22(MediumLift)"

H-1 H-1 investments and procurement quantities are shown in Figure 4-11. At the BCA funding level, procurement of 11 H-1 helicopters over the FYDP would be delayed, increasing per-unit costs and likely triggering a Nunn-McCurdy breach.
Figure 4-11. H-1
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 860 860 26 26 FY 2016 915 804 (111) 28 24 (4) FY 2017 925 869 (57) 26 24 (2) FY 2018 912 852 (60) 26 24 (2) FY 2019 939 852 (88) 27 24 (3) FYDP 4,552 4,237 (315) 133 122 (11)

BudgetLineItem="H1Upgrades(UH1Y/AH1Z)"

CHAPTER 4 4-6

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

NAVY
All Ship Procurement A summary of all Navy ship procurement investments and quantities are shown in Figure 4-12. At BCA level funding, the Navy would procure 8 fewer ships across the FYDP.
Figure 4-12. All Ship Procurement Position Units FY 2015 11,445 PB15 $M 11,445 BBA/BCA $M Delta $M 7 PB15 Procurement Qty 7 BBA/BCA Procurement Qty Delta Procurement Qty

FY 2016 13,913 10,282 (3,631) 8 7 (1)

FY 2017 14,690 12,593 (2,097) 11 8 (3)

FY 2018 16,231 14,133 (2,098) 10 8 (2)

FY 2019 12,852 12,463 (389) 8 6 (2)

FYDP 69,131 60,916 (8,215) 44 36 (8)

BudgetLineItems="TATFFleetOceanTug","AfloatForwardStagingBase","VirginiaClassSubmarine","DDG51","Littoral CombatShip","TAOFleetOiler","CarrierReplacementProgram"and"LHAReplacement"

DDG-51 DDG-51 investments and procurement quantities are shown in Figure 4-13. DDG-51 procurement would be significantly impacted if Navy is confined to the BCA funding level. Three fewer Flight III destroyers would be procured; one fewer in FY 2017, 2018, and 2019. The resulting large surface combatant force in the post-FYDP period would be smaller and less capable due to the delay of fielding the DDG Flight IIIs improved Air and Missile Defense Radar. In 2024, the PB15 plan would provide for 96 cruiser/destroyers with 4 in lay-up compared with 93 ships with 14 in lay-up that would result from the BCA funding level.
Figure 4-13. DDG-51 Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement
BudgetLineItem="DDG51"

Units $M $M $M Qty Qty Qty

FY 2015 2,805 2,805 2 2 -

FY 2016 3,202 3,202 2 2 -

FY 2017 3,312 2,203 (1,109) 2 1 (1)

FY 2018 3,355 2,332 (1,023) 2 1 (1)

FY 2019 3,337 2,295 (1,042) 2 1 (1)

FYDP 16,012 12,837 (3,175) 10 7 (3)

CHAPTER 4 4-7

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Virginia Class Submarine (SSN) SSN investments and procurement quantities are shown in Figure 4-14. Attack Submarine investments at BCA funding levels would result in the second submarine in FY 2016 being unaffordable. Eliminating this submarine from the shipbuilding plan would reduce the submarine force to 40 SSNs in 2029 and extend the period that the SSN force level is below the desired 48 fast attack submarines by 4 years.
Figure 4-14. SSN Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement

Units $M $M $M Qty Qty Qty

FY 2015 5,884 5,884 2 2 -

FY 2016 5,450 3,886 (1,564) 2 1 (1)

FY 2017 5,223 5,409 186 2 2 -

FY 2018 5,481 5,643 161 2 2 -

FY 2019 5,885 5,885 2 2 -

FYDP 27,923 26,706 (1,217) 10 9 (1)

BudgetLineItem="VirginiaClassSubmarine"

Carrier Replacement Program (CVN) CVN investments are shown in Figure 4-15. The BCA funding level would delay delivery of CVN 79 from FY 2022 to FY 2024. This would save $800M within the FYDP but would push a $2B cost outside the FYDP. The funding level provided in FY 2015 preserves the option to refuel CVN 73 (GEORGE WASHINGTON) and maintain an 11 carrier force. If Congress acts to support outyear funding at the PB15 level, the additional $6.3B necessary to retain CVN 73 would be reflected in next years budget.
Figure 4-15. CVN Position PB15 BBA/BCA Delta

Units $M $M $M

FY 2015 1,300 1,300 -

FY 2016 2,876 1,491 (1,385)

FY 2017 2,291 1,942 (349)

FY 2018 2,849 2,306 (543)

FY 2019 1,865 3,164 1,300

FYDP 11,181 10,204 (977)

BudgetLineItem="CarrierReplacementProgram"

CHAPTER 4 4-8

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

P-8A P-8 investments and procurement quantities are shown in Figure 4-16. At the BCA funding level, Navy would delay 6 P-8A aircraft until FY 2020. This would increase the unit cost for P-8 procurement, operational and support costs associated with aging P-3 aircraft, and would delay the transition to an all P-8 fleet.
Figure 4-16. P-8
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 2,052 2,052 8 8 FY 2016 3,205 2,190 (1,015) 15 9 (6) FY 2017 2,588 2,588 13 13 FY 2018 2,597 2,597 13 13 FY 2019 1,713 1,713 7 7 FYDP 12,155 11,140 (1,015) 56 50 (6)

BudgetLineItem="P8APoseidon"

TAO Fleet Oiler

T-AO(X) investments are shown in Figure 4-17. At BCA funding levels, the Navy would consider buying the ships under a Charter and Build plan with construction starting in FY 2016.
Figure 4-17. T-AO(X)
Position PB15 BBA/BCA Delta Units $M $M $M FY 2015 FY 2016 682 (682) FY 2017 FY 2018 587 (587) FY 2019 589 52 (537) FYDP 1,858 52 (1,807)

BudgetLineItem="TAOFleetOiler"

CHAPTER 4 4-9

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

AIR FORCE
KC-46A KC-46 investments and procurement quantities are shown in Figure 4-18. At BCA funding levels, 3 fewer aircraft would be purchased in FY 2017 and 2 fewer aircraft would be purchased in FY 2018.
Figure 4-18. KC-46
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 1,583 1,583 7 7 FY 2016 2,427 2,427 12 12 FY 2017 3,772 3,117 (655) 18 15 (3) FY 2018 3,691 3,207 (484) 17 15 (2) FY 2019 3,317 3,317 15 15 FYDP 14,790 13,650 (1,139) 69 64 (5)

BudgetLineItem="KC46ATanker"

Combat Rescue Helicopter (CRH) CRH investments are shown in Figure 4-19. At BCA funding levels, the CRH program start would be delayed until FY 2019.
Figure 4-19. CRH Position PB15 BBA/BCA Delta

Units $M $M $M

FY 2015 -

FY 2016 11 (11)

FY 2017 122 (122)

FY 2018 394 (394)

FY 2019 561 131 (430)

FYDP 1,087 131 (957)

BudgetLineItem="CSARHH60Recapitalization"

CHAPTER 4 4-10

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

MQ-9 MQ-9 investments and procurement quantities are shown in Figure 4-20. At BCA funding levels, the Air Force would cancel MQ-9 procurements in FY 2018 and FY 2019.
Figure 4-20. MQ-9
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement
BudgetLineItem="MQ9"

Units $M $M $M Qty Qty Qty

FY 2015 240 240 12 12 -

FY 2016 438 438 22 22 -

FY 2017 296 296 11 11 -

FY 2018 551 113 (438) 22 (22)

FY 2019 543 74 (469) 16 (16)

FYDP 2,068 1,161 (907) 83 45 (38)

MC-130J MC-130J investments and procurement quantities are shown in Figure 4-21. At BCA funding levels, the Air Force would reduce MC-130J modernization investments and purchase 10 fewer aircraft.
Figure 4-21. MC-130J
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement
BudgetLineItem="MC130J"

Units $M $M $M Qty Qty Qty

FY 2015 271 271 2 2 -

FY 2016 1,195 802 (393) 11 8 (3)

FY 2017 903 508 (395) 9 5 (4)

FY 2018 577 468 (109) 6 5 (1)

FY 2019 808 550 (258) 7 5 (2)

FYDP 3,754 2,599 (1,155) 35 25 (10)

CHAPTER 4 4-11

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Global Positioning System III (GPS III) GPS III investments and procurement quantities are shown in Figure 4-22. At BCA funding levels, the Air Force would procure one fewer satellite in FY 2017.
Figure 4-22. GPS III
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 505 505 1 1 FY 2016 583 507 (75) 1 1 FY 2017 933 645 (288) 3 2 (1) FY 2018 892 851 (41) 3 3 FY 2019 993 993 3 3 FYDP 3,906 3,501 (404) 11 10 (1)

BudgetLineItem="GPSIIISpaceSegment"

Adaptive Engine Technology Transition Program investments are shown in Figure 4-23. At BCA funding levels, the additions for Adaptive Engine funding ($1.3 billion) would be eliminated.
Figure 4-23. Adaptive Engine Position Units PB15 $M BBA/BCA $M Delta $M

FY 2015 59 59 -

FY 2016 78 78 -

FY 2017 156 1 (155)

FY 2018 506 (506)

FY 2019 670 (670)

BudgetLineItem="TechTransitionProgram"

FYDP 1,470 139 (1,331)

CHAPTER 4 4-12

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

JOINT PROGRAMS
F-35A F-35A investments and procurement quantities are shown in Figure 4-24. Under the BCA profile, the Air Force would reduce procurement in FY 2016 by 14 aircraft and in FY 2017 by one aircraft.
Figure 4-24. F-35A Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement
BudgetLineItem="F35"

Units $M $M $M Qty Qty Qty

FY 2015 3,845 3,845 26 26 -

FY 2016 5,577 4,213 (1,365) 44 30 (14)

FY 2017 5,791 5,668 (123) 48 47 (1)

FY 2018 6,466 6,466 60 60 -

FY 2019 6,269 6,269 60 60 -

FYDP 27,947 26,460 (1,488) 238 223 (15)

F-35B F-35B investments and procurement quantities are shown in Figure 4-25. There would be no changes from PB15 to BBA/BCA.
Figure 4-25. F-35B
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement
BudgetLineItem="JSFSTOVL"

Units $M $M $M Qty Qty Qty

FY 2015 1,344 1,344 6 6 -

FY 2016 1,655 1,655 9 9 -

FY 2017 2,288 2,288 14 14 -

FY 2018 2,863 2,863 20 20 -

FY 2019 2,950 2,950 20 20 -

FYDP 11,100 11,100 69 69 -

CHAPTER 4 4-13

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

F-35C F-35C investments and procurement quantities are shown in Figure 4-26. The Navy would reduce procurement of the F-35C carrier variant by two aircraft in FY 2016 under BCA funding levels.
Figure 4-26. F-35C
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 640 640 2 2 FY 2016 704 477 (227) 2 (2) FY 2017 1,259 1,259 6 6 FY 2018 1,591 1,591 10 10 FY 2019 2,220 2,220 16 16 FYDP 6,414 6,187 (227) 36 34 (2)

BudgetLineItem="JointStrikeFighterCV"

Advanced Medium-Range Air-to-Air Missile (AMRAAM) AIM-120D investments and procurement quantities are shown in Figure 4-27. At BCA funding levels, about 531 fewer missiles would be procured in FY 2016-FY 2019, providing fewer highend, medium-range missiles to combat advanced adversaries.
Figure 4-27. AMRAAM
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement
BudgetLineItem="AMRAAM"

Units $M $M $M Qty Qty Qty

FY 2015 362 362 200 200 -

FY 2016 563 361 (202) 380 275 (105)

FY 2017 613 369 (244) 424 300 (124)

FY 2018 724 440 (284) 602 478 (124)

FY 2019 777 471 (306) 662 484 (178)

FYDP 3,038 2,003 (1,035) 2,268 1,737 (531)

CHAPTER 4 4-14

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Joint Light Tactical Vehicle (JLTV) JLTV investments are shown in Figure 4-28 for the Marines and Army. At BCA funding levels, the purchase of ~1000 JLTVs over the FYDP would be delayed, slowing replacement of the High Mobility Multi-Purpose Wheeled Vehicle (Humvee).
Figure 4-28. JLTV
Position PB15 BBA/BCA Delta Units $M $M $M FY 2015 172 172 FY 2016 387 341 (46) FY 2017 747 703 (44) FY 2018 1,364 929 (436) FY 2019 1,720 1,660 (60) FYDP 4,391 3,805 (585)

BudgetLineItem="JointLightTacticalVehicle"

Joint Direct Attack Munition (JDAM)

JDAM investments and procurement quantities are shown in Figure 4-29. Under BCA funding levels, the Air Force would reduce funding for procurement by approximately $327 million across the FYDP, equivalent to about 17,000 weapons.
Figure 4-29. JDAM
Position PB15 BBA/BCA Delta PB15 Procurement BBA/BCA Procurement Delta Procurement Units $M $M $M Qty Qty Qty FY 2015 104 104 2,973 2,973 FY 2016 295 134 (162) 10,635 3,775 (6,860) FY 2017 309 144 (165) 10,821 3,915 (6,906) FY 2018 160 160 4,840 3,901 (939) FY 2019 363 363 12,089 9,699 (2,390) FYDP 1,231 905 (327) 41,358 24,263 (17,095)

BudgetLineItem="JointDirectAttackMunition"

CHAPTER 4 4-15

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

MISSILE DEFENSE
Interceptor Follow-on Ballistic Missile Defense Midcourse Defense Segment investments are shown in Figure 4-30. Under the BCA profile, an interceptor follow-on effort would not be funded.
Figure 4-30. Interceptor Follow-on Position Units FY 2015 PB15 $M 1,004 BBA/BCA $M 1,004 Delta $M -

FY 2016 1,131 867 (264)

FY 2017 938 665 (273)

FY 2018 691 602 (89)

FY 2019 628 615 (13)

FYDP 4,392 3,753 (639)

BudgetLineItem="BallisticMissileDefenseMidcourseDefenseSegment"

Additional Ground-Based Sensor Ballistic Missile Defense Sensor investments are shown in Figure 4-31. Under the BCA profile, an additional ground-based sensor would not be funded.
Figure 4-31. Additional Ground-Based Sensor Position Units FY 2015 FY 2016 PB15 $M 393 462 BBA/BCA $M 393 336 Delta $M (126)
BudgetLineItem="BallisticMissileDefenseSensors"

FY 2017 449 297 (152)

FY 2018 403 258 (145)

FY 2019 368 236 (132)

FYDP 2,075 1,519 (556)

CHAPTER 4 4-16

MODERNIZATION IMPACTS

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

5. OPERATION AND MAINTENANCE (O&M) IMPACTS

Through O&M accounts, the Services and Components fund a range of activities, including readiness, facilities, maintenance, installation services, and administrative support. The table below describes the impact of the BBA/BCA scenario on O&M funding, which would be $40B lower than the PB15 level over the FYDP.
Figure 5-1. Operation and Maintenance Impacts of BBA/BCA Funding Levels
Item ($B) Service Readiness Facilities Sustainment, Restoration and Modernization (FSRM) Installation Services Non-Defense and Other Defense O&M* Total Delta FY 2015 FY 2016 (4.3) (1.9) (1.8) (4.1) (12.1) FY 2017 (4.8) (2.0) (1.2) (3.3) (11.3) FY 2018 (4.1) (1.8) (1.0) (2.5) (9.4) FY 2019 (2.8) (1.3) (0.8) (2.4) (7.4) FYDP (16.0) (7.0) (4.8) (12.3) (40.1)

SUMMARY OF SERVICE READINESS FUNDING

This section describes changes to Service training and maintenance activities that most directly ensure forces (air, ground, and sea) are sufficiently ready to meet current and anticipated operational demands. This would represent about $16B of the O&M reduction from PB15 to BBA/BCA. ARMY PB15 begins to restore Army core mission readiness for combat units and requisite enablers and to balance readiness with planned force structure. A return to the BCA funding levels would impede this recovery, require the Army to assume risk to unit readiness, and decrease its ability to achieve proficiency goals by FY19. As a further complication, low levels of Decisive Action training in recent years due to reduced funding levels and training focused on contingency operations have created a cohort of less trained soldiers and overall leadership development challenges. Decreased readiness funds would exacerbate this condition. PB15 funds Army ground and aviation readiness at 87 percent of requirements over the FYDP. BCA levels for FY 2016-19 would decrease funding to 81 percent of the requirement. At the BCA levels in FY 2016-19, ground depot maintenance would be funded at 65 percent of the requirement versus 74 percent in PB15, thus increasing the backlog of ground vehicle and aviation maintenance.

CHAPTER 5

OPERATION AND MAINTENANCE (O&M) IMPACTS 5-1

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Figure 5-2. Army OPTEMPO

$M OPTEMPO* Position PB15 BBA/BCA FY 2015 5,920 5,920 FY 2016 6,584 5,813 FY 2017 6,852 6,336 FY 2018 6,873 6,517 FY 2019 6,939 6,672 FYDP 33,168 31,258

Delta (771) (516) (356) (267) (1,910) *OPTEMPO reflects Sub-Activity Groups (SAG): 111 - Maneuver Units; 112 - Modular Support Brigades; 113 Echelons Above Brigade; 114 - Theater Level Assets; 115 - Land Forces Operations Support.

Figure 5-3. Army Flying Hours

Position Flying Hours* PB15 BBA/BCA FY 2015 2,402 2,402 FY 2016 2,755 2,385 (370) FY 2017 2,796 2,629 (167) FY 2018 2,854 2,703 (151) FY 2019 2,767 2,625 (142) FYDP 13,574 12,744 (830)

Delta *Flying Hours reflects SAG: 116 - Aviation Assets.

Figure 5-4. Army Depot Maintenance

$M Depot Maintenance* Position PB15 BBA/BCA FY 2015 1,198 1,198 FY 2016 1,747 1,485 FY 2017 2,166 1,947 FY 2018 2,329 1,984 (345) FY 2019 2,373 2,165 (208) FYDP 9,813 8,779 (1,034)

Delta (262) (219) *Depot Maintenance reflects SAG: 123 - Land Forces Depot Maintenance.

NAVY Under both the PB15 and BCA funding limits, the Navy would balance readiness funding with force structure changes to deliver a ready fleet and meet presence requirements. Even so, a return to BCA funding levels in FY 2016-19 would limit the Navys ability to reduce the backlog of surface ship maintenance and respond to unforeseen contingencies. Under BCA funding limits, the FY 2016-19 post-deployment phase of the Fleet Response Plan (FRP) would not be fully funded, limiting Navy capacity to meet contingency requirements. PB15 funds ship and aviation depot maintenance at 80 percent of requirements in FY 2016-19. A return to BCA levels would underfund ship and aviation depot maintenance to only ~70 percent of requirement and add to the backlog of maintenance projects. Navy and Marine Corps flying hours would decrease to T2.6/2.1 under BCA funding levels versus the PB15 funded level of T2.5/2.0, lowering Navy and Marine Corps pilot readiness levels.
$M Ship Operations* Position PB15 BBA/BCA FY 2015 3,874 3,874 FY 2016 4,565 4,223 FY 2017 4,674 3,830 FY 2018 4,755 4,641 (114) FY 2019 4,902 4,877 (25) FYDP 22,770 21,445 (1,325)

Figure 5-5. Navy Ship Operations

Delta (342) (844) *Ship Operations reflects SAG: 1B1B - Mission and Other Ship Operations.

CHAPTER 5

OPERATION AND MAINTENANCE (O&M) IMPACTS 5-2

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Figure 5-6. Navy and Marine Corps Flying Hours

$M Flying Hours* Position PB15 BBA/BCA FY 2015 7,161 7,161 FY 2016 7,108 6,801 FY 2017 7,281 6,982 FY 2018 7,385 7,110 FY 2019 7,421 7,100 FYDP 36,356 35,154 (1,202)

Delta (307) (299) (275) (321) *Flying Hours reflects SAGs: 1A1A - Mission and Other Flight Operations; 1A2A - Fleet Air Mission.

Figure 5-7. Navy Ship Maintenance

$M Ship Maintenance Position PB15 BBA/BCA FY 2015 5,301 5,301 FY 2016 5,275 5,024 FY 2017 5,296 4,984 (312) FY 2018 5,794 5,232 (562) FY 2019 5,603 5,226 (377) FYDP 27,269 25,767 (1,502)

Delta (251) *Ship Maintenance reflects SAG: 1B4B - Ship Depot Maintenance.

Figure 5-8. Navy and Marine Corps Aviation Depot Maintenance

$M Aviation Depot Maintenance Position PB15 BBA/BCA FY 2015 897 897 FY 2016 963 906 FY 2017 1,042 933 FY 2018 1,005 939 (66) FY 2019 1,028 935 (94) FYDP 4,935 4,610 (325)

Delta (57) (109) *Aviation Depot Maintenance reflects SAG: 1A5A - Aircraft Depot Maintenance.

AIR FORCE The Air Force would prioritize readiness, funding flying hours under the BCA to the maximum executable level for the BCA force structure. Additional flying hours in PB15 are associated with the restoration of KC-10 and F-35 force structure. Even so, the Air Force might not be able to fully execute the flying hours if other readiness levers (such as Weapons Systems Sustainment, Training Resources Availability) were underfunded. Under BCA funding limits, Weapons Systems Sustainment (WSS) would be significantly underfunded roughly 67 percent of requirements funded from FY 2016-19. In contrast, the PB15 funds WSS at 78 percent on average. In addition to WSS shortfalls, BCA funding levels would leave critical readiness accounts underfunded, including exercises, simulators, training ranges, threat emitters, and Modeling and Simulation.

Figure 5-9. Air Force Flying Hours $M

Flying Hours*

Position
PB15 BBA/BCA

FY 2015
7,637 7,637

FY 2016
7,506 7,339

FY 2017
7,454 7,272 (182)

FY 2018
7,645 7,460 (185)

FY 2019
7,506 7,339 (167)

FYDP
37,748 37,047 (701)

Delta (167) *Flying Hours reflect Service provided flying hour program.

CHAPTER 5

OPERATION AND MAINTENANCE (O&M) IMPACTS 5-3

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Figure 5-10. Air Force Depot Maintenance

$M Depot Maintenance* Position PB15 BBA/BCA FY 2015 9,713 9,713 FY 2016 11,357 9,785 FY 2017 11,818 9,790 FY 2018 11,863 9,990 FY 2019 11,267 10,230 (1,037) FYDP 56,018 49,508 (6,510)

Delta (1,572) (2,028) (1,873) *Depot Maintenance reflects SAGs: 011M - Depot Maintenance; 021M - Depot Maintenance.

MARINE CORPS Marine Corps would protect unit readiness (Training and Ground Equipment Maintenance) at the expense of sustaining infrastructure and increasing modernization programs under PB15 and at BCA funding limits. However, under the BCA funding limits, Marine Corps would lose unit- and service-level support and decrease proficiency within units. The FY 2015 Budget funds depot maintenance to 80 percent of requirements through the FYDP. At BCA funding levels, Marine Corps depot maintenance requirements would be funded to an average of 57 percent in FY 2016-19, impairing the Marine Corps ability to maintain ground equipment.

Figure 5-11. Marine Corps Operational Forces

$M Operational Forces* Position PB15 BBA/BCA FY 2015 998 998 FY 2016 982 901 FY 2017 997 903 (94) FY 2018 1,044 957 (87) FY 2019 1,053 951 (102) FYDP 5,074 4,710 (364)

Delta (81) *Operational Forces reflects SAG: 1A1A - Operating Forces

Figure 5-12. Marine Corps Depot Maintenance

$M Depot Maintenance* Position PB15 BBA/BCA FY 2015 247 247 FY 2016 239 144 FY 2017 246 178 (68) FY 2018 269 209 (60) FY 2019 294 204 (90) FYDP 1,295 982 (313)

Delta (95) *Depot Maintenance reflects SAG: 1A3A - Depot Maintenance.

FACILITIES SUSTAINMENT, RESTORATION, AND MODERNIZATION (FSRM)

To keep its facilities in good working order, the Department performs regularly scheduled and preventive maintenance and repair. DoD uses the Facilities Sustainment Model (FSM) to calculate the aggregate funding needed to sustain its real property across the full inventory of facilities. If the Services were to underfund sustainment, their average facility condition could drop and lead to increased costs in later years as the damage needs to be repaired.

CHAPTER 5

OPERATION AND MAINTENANCE (O&M) IMPACTS 5-4

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

Figure 5-13. Facilities Sustainment, Restoration, and Modernization*

Department ($M) Army Position PB15
% FSM funded

FY 2015 2,785
63%

FY 2016 3,570
73%

FY 2017 3,832
78%

FY 2018 3,920
79%

FY 2019 4,060
79%

FYDP 18,168

BBA/BCA
% FSM funded

2,785
63%

3,179
68%

3,235
67%

3,235
67%

3,467
71%

15,901

Delta Navy PB15

% FSM funded

1,532
70%

(390) 2,364
82%

(598) 2,417
82%

(685) 2,378
82%

(593) 2,478
82%

(2,266) 11,169

BBA/BCA
% FSM funded

1,532
70%

1,720
70%

1,854
70%

1,950
72%

2,031
73%

9,088

Delta Marine Corps PB15

% FSM funded

603
75%

(644) 779
90%

(563) 863
90%

(427) 890
90%

(447) 927
90%

(2,081) 4,062

BBA/BCA
% FSM funded

603
75%

559
63%

661
65%

715
70%

820
79%

3,359

Delta Air Force PB15

% FSM funded

2,310
65%

(220) 3,286
80%

(202) 3,347
80%

(175) 3,477
80%

(107) 3,553
80%

(704) 15,973

BBA/BCA**
% FSM funded

2,310
65%

2,627
70%

2,745
75%

2,988
80%

3,363
80%

14,033

(659) (602) (488) (190) (1,940) Delta *FSRM reflects SAGs 11R, 21R, 31R, 41R, 132, BSM1, and BSMR - Facilities Sustainment, Restoration & Modernization. **Provided by the Air Force. The portion of PB-15 and BBA/BCA FSRM that supports sustainment in FY15, FY18, and FY19 is equivalent.

INSTALLATION SERVICES
Installation Services cover a wide range of activities, including operational mission services, command support, facility operations, logistics, security, energy and environmental programs, housing, and community services. Lower funding levels may limit critical installation services and challenge the Department to meet basic service needs. Significant budget reductions to installation services may require the elimination of certain services, ultimately impacting the DoD mission. Some potential impacts could include: Reducing operating hours, such as cutting airfield operating hours Decreasing the number of quality-of-life services Failing to meet response time standards in fire and emergency services Requiring the use of military personnel to perform base support functions Delaying the implementation of base safety and security standards

At the BCA levels, Army and Marine Corps would assume a greater proportional reduction to their installation services funding than Navy and Air Force, compared with previous plans. The
CHAPTER 5 OPERATION AND MAINTENANCE (O&M) IMPACTS 5-5

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

PB15 increases shown below help mitigate some of the risk taken in these accounts.
Figure 5-14. Installation Services*
Department ($M) Army Position PB15 BBA/BC A Delta PB15 BBA/BC A Delta PB15 BBA/BC A Delta FY 2015 8,622 8,622 4,501 4,501 2,090 2,090 FY 2016 9,056 7,483 (1,573) 4,613 4,556 (57) 2,152 1,986 (166) FY 2017 9,159 8,198 (960) 4,582 4,530 (52) 2,104 1,927 (177) FY 2018 9,362 8,653 (709) 4,651 4,599 (53) 2,123 1,941 (182) FY 2019 9,725 9,153 (572) 4,737 4,684 (53) 2,149 1,964 (186) FYDP 45,924 42,111 (3,813) 23,084 22,869 (215) 10,618 9,907 (711)

Navy

Marine Corps

PB15 6,101 6,271 6,439 6,532 6,630 31,974 BBA/BC 6,101 6,295 6,414 6,507 6,605 31,922 A Delta 23 (25) (25) (26) (52) *Installation Services reflects SAGs 11Z, 21Z, 31Z, and 41Z - Base Support; 131 - and Base Operations Support; and BSS1 and BSSR - Base Operating Support.

Air Force

NON-DEFENSE AND OTHER DEFENSE O&M

The Services ability to effectively train and achieve their readiness goals would be affected by FY 2016-19 BCA reductions in other O&M accounts, such as Combat and Servicewide Communications, Specialized Skill Training, Logistics Support, Prepositioned Stocks, and Environmental Restoration. The other O&M portfolio indirectly supports Service readiness by funding such areas as training and recruiting, institutional training, strategic positioning of critical warfighting stocks, communications, transportation, environmental restoration, and administration. The portfolio also supports intelligence programs and defense-wide activities, such as the Defense Health Program, Special Operations Command (SOCOM), Office of the Secretary of Defense (OSD), and Department of Defense Education Activity (DODEA). Most of these defense-wide activities did not receive additional funding above estimated BCA levels and their respective administrative accounts remain adjusted for sequestration even at the PB15 position.
Figure 5-15. Non-Defense and Other Defense O&M
$M Other O&M Position PB15 BBA/BCA Delta FY 2015 124,802 124,802 FY 2016 131,816 127,716 (4,100) FY 2017 134,922 131,643 (3,279) FY 2018 136,715 134,166 (2,549) FY 2019 139,392 136,998 (2,394) FYDP 667,647 655,325 (12,322)

CHAPTER 5

OPERATION AND MAINTENANCE (O&M) IMPACTS 5-6

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

6. MILITARY CONSTRUCTION (MILCON) IMPACTS

Through MILCON accounts, the Services and Components fund a range of activities, including operational, training, maintenance and support, unaccompanied housing, and quality-of-life facilities. The table below describes the impact of the BBA/BCA funding levels on MILCON funding, which would be $5.7B lower than the PB-15 level. A new round of Base Realignment and Closure (BRAC) is requested under both the PB-15 and BBA/BCA funding positions in order to align DODs infrastructure with its mission and force structure.
Figure 6-1. Military Construction
$B MILCON Position PB15 BBA/BCA Delta FY 2015 5.4 5.4 FY 2016 8.0 6.0 (2.0) FY 2017 7.4 5.8 (1.6) FY 2018 7.0 5.9 (1.1) FY 2019 6.9 6.0 (0.9) FYDP 34.8 29.1 (5.7)

SUMMARY OF MILCON
Under BCA levels, the MILCON accounts would decline to allow for the rebalancing of resources to higher DoD priorities, such as operations and readiness. The MILCON accounts would only be able to support the most critical facility requirements, including projects that protect life, health, and safety and support the Secretary of Defenses strategic choices/capabilities and administration priorities. Most quality-of-life projects (e.g., family housing improvements and barracks recapitalization) would be delayed. Most recapitalization efforts would be deferred, increasing risk and the degradation of overall facility conditions that would drive higher facility sustainment costs. Deferring projects now might result in larger MILCON bills in the future. The Department might experience reduced capability due to the use of undersized, dispersed, obsolete, or failing facilities.

CHAPTER 6

MILITARY CONSTRUCTION (MILCON) IMPACTS 6-1

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

7. OTHER IMPORTANT INITIATIVES

In addition to the force structure, modernization and readiness adjustments described above, the Department incorporated changes from efficiencies, economic adjustments, and compensation savings proposals. These additional efforts generated resources that were applied to critical needs and priority programs. These programmatic adjustments are incorporated at both levels of the Departments budget the submitted FY 2015 Presidents Budget and the lower level BCA-driven numbers. In particular, the compensation savings proposals are integral to the Departments efforts regardless of overall funding level.

COMPENSATION SAVINGS
To live within sequestration levels, the FY 2015 Budget proposes to slow the growth of compensation, including military pay, beyond proposals made in the FY 2014 Budget. While pay is an important element to recruit and retain a strong force, DoD must also train and equip those we send into harms way to meet the national security challenges of the future. Thus, in the FY 2015 Budget, the proposed additional compensation savings of $11.9 billion are reinvested by the Services into readiness and other critical capabilities. However, if Congress denies authority for all the compensation changes, including those assumed in the FY 2014 budget for the outyears, that decision will result in added costs of $2.1 billion in FY 2015 and $31.2 billion across the FYDP.
$B Army Navy AirForce Defensewide FY2015President'sBudgetTotalCompensationSavings* FY2015 FY2016 FY2017 FY2018 FY2019 FYDP 0.9 1.9 2.8 3.4 3.8 12.7 0.7 1.5 2.2 2.7 3.2 10.2 0.5 1.2 1.7 2.2 2.5 8.1 <0.1 <0.1 <0.1 <0.1 <0.1 0.2

Total 2.1 4.6 6.7 8.3 9.5 31.2 *ThesesavingsestimatesassumebasicpayincreaseswillmatchtheEmploymentCostIndexwhichare estimatedbyDODtobe1.8percentinFY2015through2017and2.8percentinFY2018and2019 insteadoftheraisesproposedintheFY2015budget(FY1519payraisesof1.0%/1.0%/1.0%/1.5%/1.8%) $B PB14HealthBenefitProposal PayRaiseAssumptions** LessPreviouslyAssumedSavings 1.9 2.2 2.5 2.7 1.2 1.9 2.3 2.4 4.8 5.0

1.7 0.5

10.9 8.4 19.3

Total 2.2 3.2 4.1 **AssumedFY15FY19basicpayraisesof1.0%/1.0%/1.5%/2.8%/2.8% $B Army Navy AirForce Defensewide Total CHAPTER 7 7-1

FY2015President'sBudgetNetCompensationSavingsReinvested FY2015 FY2016 FY2017 FY2018 FY2019 FYDP 0.1 0.5 1.0 1.4 1.7 4.5 0.0 0.5 0.9 1.2 1.5 4.1 0.0 0.4 0.7 0.9 1.2 3.1 <0.1 0.1 <0.1 1.4 <0.1 2.6 <0.1 3.5 <0.1 4.5 0.2 11.9

OTHER IMPORTANT INITIATIVES

Estimated Impacts of Sequestration-Level Funding FY 2015 Defense Budget

CHAPTER 7 7-1

OTHER IMPORTANT INITIATIVES