Vice at CSIS
During a presentation at the Center for Strategic and International Studies, July 15, Vice Chief of Staff of Army Gen. Peter W. Chiarelli discussed how the Army will meet requirements set out by DoD in the "Savings and Efficiencies Initiative."

WASHINGTON (Army News Service, July 21, 2010) -- In order for the Army to meet budget goals set by the Department of Defense, it must review its equipment portfolios and identify systems that provide redundant capabilities.

During a presentation at the Center for Strategic and International Studies, July 15, Vice Chief of Staff of Army Gen. Peter W. Chiarelli discussed how the Army will meet requirements set out by the DoD in the "Savings and Efficiencies Initiative."

That initiative requires all three military departments -- the Army, Navy, and Air Force -- to reduce the cost of doing business by implementing "specific, actionable, and measurable" initiatives to reduce redundancies and inefficiencies.

The Army, for instance, has a goal to reduce its budget by $2 billion in fiscal 2012. That requirement increases to $3 billion in fiscal 2013, to $5.3 billion in fiscal 2014, and ends up at $10 billion in fiscal 2016.

Chiarelli said the main mechanism for this change will be portfolio reviews, where the Army staff is currently working through the complexities and components of directorates such as aviation, Army training strategy, and software.

"We need to refine the current portfolios, because they're not where they need to be," the general said. "This is an iterative process that we're working our way through and we know that we're going to have to do a heck of a lot more to understand dynamically how these work throughout the building ... in the budget process."

With equipment for instance, he said the Army must be sure that the capabilities of the expensive equipment it buys is not already being provided, in part or in full, by other equally expensive systems.

As an example, Chiarelli discussed development of the Excalibur weapons system -- a precision munition, or "smart" round. That weapon, he said, started out costing $100,000 a piece, though he said with multiple purchases, the cost would come down to about $47,000. But still, he said, an expensive system.

The Excalibur, he said, provides "circular error probable" of 10 meters -- a measure of accuracy. But other weapons systems under development come close to that, and at far less cost.

He said a precision guidance kit is another item being looked at that provides capability similar to the Excalibur. "That doesn't quite have the same kind of accuracy, but comes in as a kit that goes on that old $600 projectile and quite frankly, you know, it's cheaper."

"We need to better identify hidden redundancies," Chiarelli said.

The general said the Army might be able to reduce costs by looking at commercial, off-the-shelf products. A COTS purchase, he said, brings technology to Soldiers faster because it is technology that exists now, and doesn't need to be developed. Perhaps an application can be developed so that an off-the-shelf gadget can be used to control a system instead of developing special hardware. He said that could save on development costs.

Reviewing weapons portfolios for cost versus capability can help save the Army money, Chiarelli said. Systems should be reviewed regularly to determine if their cost has gone too high for the Army to be able to afford them, he said.

"It's revisiting to understand as it goes through its developmental cycle, is this rocket that was thought to cost less than $100,00 that maybe now is costing over $300,000... something that the Army can afford into the future' And that's literally what we're doing."

Under the "Savings and Efficiencies Initiative," the Army can keep the savings and apply them to critical areas such as personnel in units, force structure, readiness to fight and investment in future capabilities.

Page last updated Fri July 22nd, 2011 at 12:16