The supplemental war bills causing all the hot air to blow around Washington, D.C., are controversial for reasons beyond who does and doesn't support the troops. According to a March 28 Congressional Research Service report released by Secrecy News, the fiscal year 2007 supplemental contains considerable evidence that the Pentagon is redefining terms like "war costs," "reset" and "recapitalization" in ways that are not entirely appropriate.
"Reset" is a term used to describe the repair or replacement of war-worn equipment. CRS says the Pentagon is "front loading" its reset requirements and using the money to pay for modifications, upgrades and new versions of old equipment. While it may be a good idea to replace war worn equipment with the most current technology available, CRS says the Pentagon's methods of doing so should be carefully scrutinized by Congress.
Reset and reconstitution (which appear to be used interchangeably) therefore refer to the repair and replacement of war-worn equipment. Typically, about half of the total has been for repair (funded in O&M) and half for replacement (funded in procurement). Actual battle losses made up only about 10%, or $1.5 billion of the Army’s total reset requirement in FY2006, with the remainder due to additional wear and tear on equipment to added equipment requirements. Equipment is replaced, not only when it is destroyed, but also when the services decide it is uneconomical to repair it (“washouts”). Recently, the services have also included in reset requests funds for recapitalization (rebuilding and upgrading equipment), for adding modifications to current equipment, and for buying new versions of equipment. This constitutes a substantial expansion of the traditional definition of reset. Between FY2002 and the FY2007 bridge fund, the Army and Marine Corps have received a total of $50.2 billion for reset under this broad definition.
The list of items included under reset funding includes large amounts for Bradley fighting vehicle recapitalization and the M-1A2 system enhancement program tank upgrades. Other items noted by CRS and for which the Pentagon already received funding in the 2007 bridge fund are:
- $520 million for Bradley base sustainment ($1.4 billion in bridge)
- $1.6 billion for the Family of Medium Tactical Vehicles ($795 million in bridge)
- $533 million for SINCGARS Family radios ($125 million in bridge)
- $573 million for Family of Heavy Tactical Vehicles (648 million in bridge)
- $300 million for Marine Corps radio systems ($850 million in bridge) and
- $45 million for Family of Construction Vehicles ($98 million in bridge)
CRS reports are not officially released to the public, but are hunted down and posted with great frequency by the Federation of American Scientists' Steven Aftergood, who runs the Project on Government Secrecy and publishes Secrecy News.
The CRS report also found that following guidance issued by Deputy Defense Secretay Gordon England last year, the Pentagon's supplemental requests also include an expanded definition of war costs. As InsideDefense.com reported last October, England issued a memorandum calling for Pentagon budget planners to include in supplementals costs for the "longer war on terror" not just Operations Enduring Freedom and Iraqi Freedom. CRS' recent report says Congress may want to consider the implications of the expanded definition, which may be responsible for the 40 percent increase over FY06 funding that the Pentagon is requesting for 2007. The CRS report also notes that the Defense Department has not defined "longer war on terror," which could be unending.
The new definition constitutes a significant shift from long-standing DOD financial regulations that require that costs be: Necessary to carry out specific operations; Strictly incremental, i.e., costs would not have been incurred “in the absence of the contingency requirement;” and Executable within the current fiscal year. These strictures were reiterated in guidance issued to the services on July 19, 2006 on developing FY2007 Supplemental and FY2008 war costs, with warnings that any questionable procurement costs that did not appear to be incremental would be closely scrutinized.
--Catherine MacRae Hockmuth
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