I'll focus on Berkson's response about the future of the F-35. (You can also check out the video here, or read my full transcript on the jump of this blog page.)
Muradian: What are some of the things though that should be rethought you know by the next team?
Berkson: I think related to that -- it gets to areas like Tacair. So you think about fighters. And who are the air threats for our country? And how many? And what capability do you need of various strike fighter capabilities, bombers, attack aircraft, etc.
Muradian: Even, how many JSFs to buy? I mean, the air force maintains it need about 1,763 JSFs to replace about 1400 F-16s, and there are people who say, "Look, if JSF is that much better, why do we need so many?" Those are the kinds of trades you're talking about?Berkson: I think, exactly. Unfortunately it's counter-intuitive. That investment is going to be increasing in the next 10 years as we do the capital replacement of the Tacair fleet. So even though while we need to allocate significant portions of our investment accounts to recapitalizing that, the end game -- in other words, when we would stop producing those planes and shut down those lines -- I think, is quite variable in this mix. Whether it's 1,000 or 3,000 or somewhere in between there. Obviously administrations to come will make that final decision.
Muradian: What are you guys doing to make sure January 20 goes smoothly no matter who wins?
Berkson: Well, we've really thought about the budget in terms of the capabilities we'll need and the force structure we have today. And the real issue for the transition and what we were thinking about in the budget for the next six years primarily deals with the balance of that whole system.
We have right now a lot of money -- over $150 billion is in supplemental funding. We've recently added significantly to the ground forces. We've been reshaping both the air force and navy in terms of their force structure.
And what we really are going to be aspiring to do and to transmit to the new administration is the need for balance across those various areas both manpower, O&M and procurement. Frankly right now as you look at the force structure we need -- and we've added to the budget over the last few years --
Muradian: Well there's 92,000 more people you have in the force or you're shooting for that much of an increase in end-strength across the army and the marines.
Berkson: Exactly, for that 92,000 end-strength, it obviously requires O&M support and also capital to support those folks.
Currently if you look at the budget we have for procurement -- we're approaching an all-time high for procurement -- at the levels we have for force structure, should we be able to maintain that level of procurement, we can actually continue to reduce the half-life -- in other words how long we can sustain that equipment -- to a level that's sustainbable into the long term.
challenge will be: if we're going to continue to have the force structure we've
added, we will need to maintain budget levels and resource commitments at near
their current levels excluding operations obviously in
Muradian: Are you talking about --. There are two sorts of ways that outgoing administrations handle this. They either leave a one year defense plan in which case would be a FY 2010 plan. Or you leave a future years defense plan that is the six- year plan [and] that is tied to that first year. Are you going to be leaving a full FYDP or will you be leaving a one-year budget for the next administration?
Berkson: We're preparing and looking and --. Well obviously the next administration will decide what they're going to propose to the Congress. But we're preparing a budget that is consistent with the force structure that President Bush has announced. And it will be sufficient to sustain those forces again across the spectrum of operations and support and military, manpower and capital
Muradian: But you are proposing a six year plan, not just a one year plan?
Muradian: And is that plan going to have that $60 billion a year increase to try and increase that overall topline in defense spending?
Berkson: Again --. The $60 billion is a -- comes out and discussed. The real key is you take the force structure you have proposed, and you essentially have to have capital and operations to support that.
Muradian: So that number goes with that increase force structure?
Berkson: The point is to have a balance in that. Again, my job is to balance the portfolio of the Department of Defense, or at least to make those recommendations to the Secretary, in order to have that balance you have to have again at the force structure levels that we're proposing, you have to have again capital and operations support to sustain that level.
I think that then makes it a little more straightforward for the next administration because then they can make trades really about force structure. Because if the force structure needs to be changed, and they have different views of either mix between the services or the overall levels, all three of those accounts can then simultaneously be balanced to that level of force structure.
Muradian: Does a weaker potentially economy -- I mean, has the guidance from OMB and the white house changed at all in the wake of all the financial bailout stuff and everything that's happened?
Berkson: I haven't received any new information on guidance.
Muradian: You're job has historically bean able to better estimate tradeoffs for the department so that tradeoffs can be made. Yet program costs keep going up and schedules keep slipping. What are some of the things PA&E can do to break this trend where almost everything is over budget and behind schedule?
Berkson: I think our most important job is really to look at the - one, to take the perspective of the kind of fair and objective observer of the system and come up with proposals both that challenge the status quo and give new opportunities and new essentially trades that can be made as well to challenge programs individually as they meet or fail to meet either quality cost or schedule.
Our role is not to deliver a program on time. My role -- and that of our team is to look at the program as it is and see does it fit in? Does it add value to the portfolio of the Defense Department, and is it something -- given all of the cost, requirements ... and technology risk etc -- is it something we would recommend the secretart and eventually the president continue to pursue ...
Muradian: As this next administration comes into office, what are some of the things that you would leave for them? Things that should live? Things that shouldn't. Things that should be changed? What are sort of some of the lessons learned, to-do lists that you're going to pass to the next administration?
Berkson: I think the big challenge with regard to trades for the next administration is one we've been facing for the past few years. It's really the technological investments one needs to maintain superiority with the highest-end threats in the world versus the resources to support most of the current operations. And while --
Muradian: Which are much lower intensity operations.
Berkson: In general. Especially in areas like air, air defense, missile defense a number of capabilities that one needs really to deal with the highest-end threat. But at the low end it's just that the level of need is not as signifrcant.
So Secretary Gates has been driving this point home, and I really agree with it, that we have to think about that balance because a large portion of our resources end up going into defending against a threat in the future of a very technologically capable foe and while it's very likely that those capabilities will proliferate over time and that we cannot abandon our investment in those areas for fear of leaving ourselves vulnerable as a country, it really becomes a real challenge to think how much is enough in that area especially when I'm facing a global war on terrorism, which has more near to the present and more current challenges and requires investment as well.
Muradian: What are some of the things though that should be rethought you know by the next team?
Berkson: I think related to that -- it gets to areas like Tacair. So you think about fighters. And who are the air threats for our country? And how many? And what capability do you need of various strike fighter capabilities, bombers, attack aircraft, etc.?
Muradian: Even, how many JSFs to buy? I mean, the air force maintains it need about 1,763 JSFs to replace about 1400 F-16s, and there are people who say, "Look, if JSF is that much better, why do we need so many?" Those are the kinds of trades you're talking about?
Berkson: I think, exactly. Unfortunately it's counter-intuitive. That investment is going to be increasing in the next 10 years as we do the capital replacement of the Tacair fleet. So even though while we need to allocate significant portions of our investment accounts to recapitalizing that, the end game -- in other words, when we would stop producing those planes and shut down those lines -- I think, is quite variable in this mix. Whether it's 1,000 or 3,000 or somewhere in between there. Obviously administrations to come will make that final decision.
we doing a good job making sort of the broader asymmetric trades? For example
looking at the crusader. It was cancelled yet the army still maintained the
money and gone on to develop pretty much another self propelled howitzer. Does
that money need to be shifted somewhere else entirely? Are we making some of
these moves that are going to set
Berkson: Again, I think, as you think about who is the high-end threat for an armored force, it's a very interesting and important question.
So it's very difficult to say, you know exactly, "I don't need that technology. But technology creates an opportunity to reduce the force structure to control much bigger areas of either land or air or whatever. So while I think there are reasonable ways to think about how many ways do I need a strike platform -- artillery, non-line of sight cannon, cannons in a box, DDX firing from the shore, Predator or Reaper dropping Hellfire weapons -- I mean, I have literally hundreds of ways to create the same effects on the battlefield. Really looking at the effectiveness and efficiency trades of those solutions is critical
Muradian: One criticism leveled at PA& E is it has taken too much of a soda straw approach and not as much a strategic view. How do you respond?
Berkson: I think were where we get criticism is really outside the building. The place that you have an impact on actually affecting what decisions we make are really two. One is when you do the budget and two is when you review a program for a milestone decision.
So while you will only see PA&E fly in and show up is coming in to either kill a program or a major restructure, what you're not seeing is what's going on the rest of the time, where we're look across the whole program and make trades across that. It just happens that the two levers that are most visible come in things that are more near term -- budgets and acquisition.