Sunday, April 09, 2023

FY24 Budget Munitions Update

 The high rate of ammunition usage on both sides of the Ukraine war has made munitions acquisition questions much more relevant for policymakers. This is reflected in the DoD's FY24 budget released last month, which provides a $12.9 billion increase in acquisition funding, which includes raw procurement and testing and evaluation procedures. This includes expanding the use of multiyear contracts for systems like the Naval Strike Missile (NSM) and Long Range Anti-Ship Missile (LRASM), which defense companies have argued is necessary to meet capacity for high-tech weapons. Other systems, however, continue to use the yearly procurement system. 

However, while the FY24 budget allocates $1 billion for expanding the capacity of the defense industrial base, DoD officials have noted that munitions acquisition is currently "buying to the limits of the industrial base", which may explain why net changes in actual weapons procurements are minimal from FY23. And the increase in acquisition funds is less impressive when the analysis is extended to the next 5 years; the FY24 budget projects acquisition funding to increase by 5.7% in that period, which would not keep up with even average inflation rates. 

No comments: