The Army's $200 Billion Makeover

Dennis A. Muilenburg, Boeing's program manager on Future Combat Systems, disagreed. "The technologies are maturing right on track," he said.

The Army has miscalculated some basic assumptions, according to congressional investigators. For instance, Future Combat Systems originally called for its new manned ground vehicle to weigh less than 20 tons so one could be transported in a C-130 aircraft, which is small enough to land on a makeshift airfield, making for quicker deployment. But the combat vehicle needs more heavy armor to protect soldiers, and now the design calls for between 27 and 30 tons, which means that it will have to be transported by the larger C-17, developers said. As a result, Future Combat Systems has failed in its goal to be able to deploy an Army unit overseas substantially faster than it can now, according to the Congressional Budget Office, which studied the program on behalf of a congressional subcommittee.

"We disagree" with that assessment, said the Army's Smith, citing a recent internal military analysis in which a Future Combat Systems brigade could deploy from the United States to the Middle East 24 percent faster than a current heavy brigade.

The GAO also points to potential risks in the Army's close collaboration with its lead contractors, Boeing and SAIC. As the Lead Systems Integrators, or LSI, the two contractors are more involved in influencing the Army program requirements, solutions and testing than usual, the GAO said. The Army opted to give the two contractors so much authority because it didn't have the resources, flexibility or technical expertise to oversee such a far-flung program, the GAO said. But the military "runs the risk of being less able to provide oversight compared with an arms-length relationship," the agency said.

Boeing's Muilenburg disputed that, saying, "The Army is in charge of the program, the Army has oversight of the program, and we work for the Army." He also said that with Boeing and SAIC's centralized approach, the Army is saving money because the companies are consolidating management and overhead.

A Huge Investment

Savings notwithstanding, Future Combat Systems is "by far the biggest single investment the Army is planning to make during the next 20 years," the Congressional Budget Office said. The program will take up about half of the Army's procurement budget in 2015 and stay at about that level over the next decade, leaving little money for other weapons and equipment, according to a 2006 study by the office.

"The Army has some huge long-term budget problems," said Steven M. Kosiak, vice president of budget studies at the Center for Strategic & Budgetary Assessments, a defense think tank. The question isn't so much how the government will pay for the conflicts in Iraq and Afghanistan now, he said. That's being covered by supplemental budgets. The issue is how the Army will afford Future Combat Systems at the same time it's grappling with the cost of adding 65,000 troops and covering rising health care and compensation expenses. "Can you really afford to equip and upgrade the rest of the Army?" Kosiak said.

Davis, the Army official, said the program would not take up nearly half of the Army's procurement budget when it begins full production in about eight years. What's more, the Army said that the project represents only a fraction of its overall budget over the next five years.

Estimating how much the entire program will cost remains a complicated question. "Which way do you want it?" Davis asked.

The Army said the overall program will cost $124 billion. That's $162 billion when inflation is factored in, it said. It noted that the program has suffered hundreds of millions in budget cuts and that it will save money, employing technology that will reduce the support personnel in a brigade and developing a hybrid-electric combat vehicle, based on a common chassis, that will increase fuel efficiency and lower maintenance costs.

Meanwhile, independent estimates from the office of the Secretary of Defense put the program at between $203 billion and $234 billion. The GAO said the cost has increased 79 percent, to $163.7 billion, from $91.4 billion, its original estimate in 2003. The Army said costs rose in part because it "increased the size and scope of the program to accelerate the delivery of capabilities to frontline troops."

The GAO expects costs to rise. Congress has set 2009 to decide whether to continue pursuing the ambitious program. But Brig. Gen. James Terry, who oversees doctrine and training for Future Combat Systems at Fort Bliss, said there is no turning back.

"We have to head toward the future," he said, adding, "I think the train left the station a couple of years ago."