On April 6^th 2009, Defense Secretary Robert M. Gates introduced his proposal for a fundamental shift in defense spending priorities.  The proposal potentially affects military contracting and defense operations across the country.  With many lawmakers already gone for Congress’ spring recess, reactions on the Hill have been slow in coming, but expect to hear a lot more about this when Congress resumes on April 20^th.

Some Winners & Losers under Gates’ recommendations:

• Military Defense Acquisition Professionals - existing contractors performing services in this area will be offered a chance to become full-time government employees. By 2015, the plan is to grow the force by 20,000.
• Military Infrastructure - child care, spousal support, lodging, and education on American military bases will see increases of $13 billion over the FY 2009 base budget.
• Medical Care - wounded, ill and injured, traumatic brain injury, and psychological health programs will become part of the base budget, with long term funding. Medical research will also receive a boost of $400 million.
• F-35 Joint Strike Fighter - American orders to increase to 30 in FY 2010 ($11.2 billion), with 513 to be bought over the 5-year defense plan. Gates reiterates the goal of 2,443.
• Special Forces - to grow special operations capabilities personnel will be increased by more than 2,800 and special forces-optimized lift, mobility & refueling aircraft will be purchased.
• Intelligence, Surveillance and Reconnaissance (ISR) - in addition to the Predator and propeller plane winners, R&D will rise for ISR enhancements, and for experimental platforms aimed at today’s problems.
• Light ISR Propeller Planes.
• Predator and Reaper UAVs- including the Army’s MQ-1C SkyWarrior variant. Gates intends to sustain 50 active “orbits” by FY 2011, a 62% increase in capability over the current level.
• THAAD (Terminal High Altitude Area Defense) missiles - another $700 million to field THAAD and SM-3 missiles.
• Standard Missile 3 - the Navy will spend $200 million to fund ballistic missile defense capabilities for 6 additional AEGIS destroyers or cruisers.
• Helicopter Crews - $500 million additional funding to raise the number of helicopters fielded.
• Littoral Combat Ships (LCS) - full 3-ship buy for 2010, with the goal of eventually buying 55 of these $500 million specialty support ships.
• JHSV-like fast catamaran charters - another 2 ships will be chartered from 2009-2011, until JHSV ships begin arriving.
• DDG-51 Destroyers - production will restart at Northrop Grumman’s Ingalls shipyard in Mississippi, subject to a negotiated contract.
• AEHF communications satellites - adds satellites 5 & 6.

Losers:  

• VH-71 Presidential Helicopter - terminated immediately.  New options to be developed for a FY 2011 replacement program.
• F-22A Raptor - ended at 187 planes (183, plus 4 funded aircraft under FY 2009 supplemental).
• C-17 Globemaster III heavy-lift strategic transport - ended at 205 USAF planes. Production to end at the end of 2010, absent further foreign orders.
• 2018 Bomber - terminated.
• TSAT Satellite Program - terminated.
• Multiple Kill Vehicle (MKV) program - terminated “because of its significant technical challenges.”
• Air Force Combat Search and Rescue X (CSAR-X) helicopter program - terminated immediately. 
• Future Combat Systems Ground Vehicle Program - cancellation recommended.