On October 28, 2009 Senator Jack Reed (D-Rhode Island) told a group of reporters that increased Afghanistan troop levels will have unavoidable impacts on ongoing weapons program as well as weapons modernization programs.  According to this article on defensenews.com, the member of the Senate Armed Services Committee and Chair of the Subcommittee on Seapower and veteran of the U.S. Amy predicted that the combination of increased combat operations in Afghanistan, coupled with a flat defense budget, will inevitably lead to reduced spending on weapons programs.  The article quotes Senator Reed as saying, “It is going to be a difficult time.”

Moreover, Senator Reed stated that “Higher levels of defense spending, which would allow for both higher troop levels and weapons modernization, will take a backseat to more pressing national economic problems, he said, with creating jobs as the first priority.  After that, the next priority will be paying for the expensive economic stimulus measures that have been and will be enacted.”

Importantly, Senator Reed explained that poor performing programs will be targeted for termination.  The article reports that he “expects that funding will continue to be scarce for marginal weapons that suffer cost overruns or other problems. And weapons programs that continue likely will be scaled down and purchased in smaller numbers.”  The article quotes Senator Reed as describing these effects as "painful adjustments."

As we have previously posted the Obama Administration and Congress have made it abundantly clear that program execution is of paramount importance.  As we noted, several big-ticket (but poorly performing) programs were terminated in the upcoming FY 2010 National Defense Authorization Act.  Contractors who want to win their share of the scarce defense dollars must control costs and deliver on schedule; those that do not will pay a steep price for their execution missteps.