‌The Challenges of Sustaining an Army in Motion

Abstract

In an era of fiscal constraint and competing priorities across and external to the Defence portfolio, Army modernisation efforts are challenged by a number of financial and capability pressures. Ranging from the increased cost of technological sophistication in our equipment to the exclusion of capability replacements under the Defence Integrated Investment Program (IIP), these challenges have a dual and compounding impact on Army’s modernisation. Future equipment may consequently be inadequately provisioned for sustainment, while in-service fleets are concurrently denuded of funding to address higher priorities.

The pressures facing Army modernisation may be outside the organisation’s influence to entirely remove; however, there are several force structure and sustainment considerations available to Army that can mitigate their impacts. Implementing these options would require difficult decisions from Army on capability trade-offs and a potential willingness to at times accept land materiel that may not necessarily be at the leading edge of technology. If applied in a judicious manner, however, and in a way that prioritises investment in and expenditure on those capabilities that directly relate to Army’s directed preparedness requirements, the organisation can ensure a more resilient force is sustained through its path of modernisation.

Introduction

To say that a little has to go a long way is not an overstatement of the case, quite the reverse in fact.¹

Army is presently undertaking its largest recapitalisation and equipment modernisation effort in several generations. While unprecedented and promising to deliver a future force better equipped than any that have preceded it, this initiative comes at great risk of failure if not delivered in a sustainable and affordable manner. To realise the Chief of Army’s (CA’s) intent of an adaptable and modernised force, Army must apply a balanced approach to modernising that ensures capability is resilient within budget.

The article addresses the ‘Preparedness’ aspect of the CA’s Commander’s Statement Army in Motion, specifically as it applies to the modernisation and equipping of land materiel to the future Army. While equally relevant, the themes of ‘People’, ‘Profession’ and ‘Potential’ have been excluded, as they relate more directly to other fundamental inputs to capability modernisation (collective training, doctrine and organisation to name but a few). The article posits that the greatest challenge to modernisation is affordability and elaborates by describing the major financial and capability pressures facing the sustainment of Army’s current and future land materiel.

The article does not address the issue of how Army should fight for modernisation funding or on which capability areas Army modernisation efforts should be focused. It aims instead to provide recommendations on how best to set the conditions for ‘sustainable modernisation’. To this end, the article proposes a series of considerations that innovators and capability managers may apply to mitigate the effects of the financial pressures that are articulated and ensure a responsible approach to modernisation. Each consideration offers options and examples to reduce the impact of these pressures and assist Army’s capability managers to innovate and modernise in a sustainable manner. It is prepared not as a critique of existing practices but as a primer for consideration by any Army member committed to modernisation.

The pressures facing Army modernisation may be outside the organisation’s influence to entirely remove, however there are several force structure and sustainment considerations available to Army that can mitigate their impacts. Image courtesy Department of Defence

The Impetus for (and Challenge to) Army Modernisation

Through the release of Army in Motion, CA has delivered a Commander’s Statement that articulates his intent for the organisation: one that is constantly evolving, adapting and improving. With this imprimatur, CA has implored Army’s officers and soldiers to challenge the status quo, innovate and modernise in order to prepare Army for the challenges of the future environment as encapsulated in his complementary Futures Statement Accelerated Warfare.

In the author’s opinion, the greatest challenge facing Army’s equipment modernisation is affordability. Army’s people are intelligent and innovative in exploiting technological opportunities, and the pace of technological change has made possible the fielding of hardened and networked military forces previously considered the domain of science fiction. The budget, however, is limited. This is not a new problem—to quote Army staff commenting on financial pressures in the postwar era of the 1950s, ‘Army Headquarters … is exploiting every possible avenue to get the utmost value from the limited funds the Parliament has been able to allot them’.² Therefore, as Army progresses on the journey of recapitalisation it has begun, with a complete replacement of armoured and unarmoured vehicle fleets, small arms, digital communications and many combat support fleets in the next decade,³ the challenge of funding and sustaining myriad fleets of increasing technological complexity is a difficult one.

The Pressures and Challenges Facing Army Sustainment

The greatest limiting factor of the Army Sustainment Budget is its static nature. Although the budget is adjusted annually to accommodate consumer price index increases into the future, there is no real value increase to the budget across future years. Essentially, Army Sustainment Budgets into the future are determined based on the present cost of sustaining the equipment fleet types and quantities currently fielded across Army; there is no consideration afforded to growth in fleet size, changes to fleet composition or addition of new fleets. Army’s only ability to influence and increase this funding is through the Defence IIP, under which the approval of major capital acquisitions generally incorporates an associated funding line for the sustainment of new fleets once introduced. This funding is directly linked to new projects and transfers money to the Sustainment Budget only when approved projects deliver new capability. Within this context, Army’s ability to fund and sustain both in-service and future land materiel is affected by a multitude of financial, organisational and capability pressures that broadly fit into five categories. These categories are outlined below.

Sustainment Budget Reductions to Address Broader Portfolio Pressures

While it is Army’s obligation to fight for funding, the decision on how much is allocated is ultimately the remit of the Australian government. During periods of fiscal constraint and competing pressures, the Australian government may choose to denude Army funding in order to meet higher priorities across, or even external to, Defence. By way of example, strategic decisions enacted through the Defence White Paper 2013 and its 2016 successor prioritised investment in major Navy and Air Force platforms.⁴ To ensure affordability of these capabilities, Army (among other organisations) was required to reduce Sustainment Budgets over several years for reinvestment of funds toward these broader portfolio priorities. To mitigate the impact of this decision, Army risk-managed the sustainment of several general and armoured vehicle fleets, reducing budgets accordingly. This was achieved through the reduction of inventory procurement activities and acceptance of lower levels of equipment serviceability and availability.⁵ Although these decisions did not affect Army’s immediate preparedness requirements, the longer-term impact of such decisions was to sub-optimise the sustainment of the capabilities, reducing available inventory for repairs and hence decreasing capability resilience over time. In other possible scenarios of extra-portfolio financial pressure, the Sustainment Budget might be reduced in order to supplement funding shortfalls for military workforce numbers excess to allocated budgets or because the Department of Defence as a whole has suffered budget reductions to meet other national priorities such as health, welfare or education.

Insufficient Sustainment Funding for New Land Materiel Introduced Under the IIP

The best intent of staff officers and project managers notwithstanding, major capital projects in the IIP may fall short of required sustainment funding provisions to adequately support new materiel. The reasons for this are myriad. Cost modellers may underestimate the total cost of sustainment by error or omission, failing to include critical technical refresh and obsolescence treatment activities. Modellers may also simply utilise cost figures in the lower range of forecast cost envelopes in order to demonstrate project affordability and enhance the likelihood of governmental approval. Conversely, even the most comprehensive and transparent of cost models can be undermined if government assesses that a project’s entire sustainment funding requirement is unaffordable and allocates only a portion of this amount. The net impact of these shortfalls is to ‘kick the can down the road’. While the allocated provision of funds is reduced, the actual cost of sustainment is not, simply transferring financial pressure to the existing Sustainment Budget. This necessitates the reallocation of funds previously allocated to sustaining other capabilities and causes associated capability trade-offs.

Insufficient Sustainment Funding for New Land Materiel Introduced Through Operational Procurement, Rapid Acquisition or Other Innovation Initiatives

The past two decades of serving as an Army committed to operations both regionally and globally have manifested substantial capability improvements for the force. Operational lessons and innovation have resulted in the introduction of many capabilities not previously resident in Army, ranging from counter-rocket, artillery and mortar systems through to multiple unmanned aerial system fleets. While operational procurement, rapid acquisition and Army minor project frameworks have facilitated the rapid fielding of this technology to the deployed force, in many cases this has not been accompanied by a holistic approach to sustainment. Historically, many of these acquisitions were limited in scope to equipment procurement and indicative periods of one to three years of sparing and support⁶ without an enduring approach to sustain and replace the capability through a dedicated IIP-funded major capital project. The unintended consequence of this approach is that it transfers enduring sustainment requirements to an already committed Sustainment Budget. When this occurs, the requirement to ‘absorb’ this previously unfunded pressure occurs at the expense of other in-service capability.

To realise the Chief of Army’s intent of an adaptable and modernised force, Army must apply a balanced approach to modernising that ensures capability is resilient within budget. Image courtesy Department of Defence

Increasing Technological Sophistication (and Replacement Cost) of In-Service Land Materiel Not Captured Through the IIP

The Army of the future is one that will operate increasingly sophisticated and technologically complex land materiel. Legacy radio fleets that were operated using codes and ‘scheds’ have been superseded by digitised and networked communications with complex cryptographic components. Similarly, Army has replaced vehicle platforms, weapon systems and explosive ordnance with increasingly complex and lethal systems and natures, all of which come at exponentially greater cost than the legacy fleets replaced. Where the IIP captures and modernises these capabilities, consideration is afforded to the increased cost of sustaining these fleets (albeit, as previously highlighted, not always adequately provisioned). Unfortunately, not every equipment fleet is replaced by a project.

There are many fleets of sufficiently low individual value, complexity and strategic importance which do not warrant consideration or priority for replacement through the IIP. These fleets are refreshed, replaced and upgraded only through existing sustainment funding lines, which face increasing pressure and are frequently insufficient when replacements prove to be substantially more expensive. Army’s newest modularised BaseX tentage systems, replacing Vietnam-era canvas tentage, are several orders of magnitude more expensive than their predecessors.⁷ Similarly, small watercraft and outboard motors used for riverine and estuarine operations are replaced with craft of greater structural complexity and upgraded with more sophisticated mechanical operating systems and onboard computer and Global Positioning System (GPS) capabilities.⁸ Each of these fleets in isolation may represent only a fraction of a percent of the total Sustainment Budget; in aggregate, however, they total hundreds of fleets across the Australian Defence Force (ADF) and equate to substantial portions of an already committed budget. As the budget lacks the capacity to absorb exponential cost increases, Army is often incapable of effecting complete fleet replacements in a deliberate and timely manner.

Increased Costs to Sustain Land Materiel Beyond Life of Type

Many materiel fleets are extended for retention in Army beyond their original serviceable life and retained to mitigate and reduce capability gaps. One key driver for this is delays to the delivery of major replacement projects. When this occurs, the service life of legacy fleets may be extended by necessity, albeit at additional cost to fund multiple fleets concurrently or to maintain obsolescent and ageing fleets. A key example is the multi-year delay to the replacement of the ADF medium and heavy vehicle fleet under Project Land 121, which resulted in the retention of legacy fleets for more than a decade beyond their original life of type. During this period, a lack of repairable items and inventory available from original equipment manufacturers, which no longer supported these fleets, drove the requirement for Army to invest additional funding in the fabrication and replacement of major parts assemblies.⁹

In another example of a driver for life of type extension and cost increase, directed contingency requirements and capability preparedness within Army may preclude the retirement of legacy fleets. The extension of the Black Hawk helicopter life of type from 2016 to 2021 was a decision that was necessary to ensure the continued provision of a troop-lift capability as a mitigator until Army could declare final operational capability for the Multi-Role Helicopter (MRH90). During the period of extension, however, Army bore substantial additional costs to continue to maintain high-cost repairable inventory and contracted support workforce for the Black Hawk platform, concurrent with its sustainment of the MRH90.¹⁰ Although the retention of legacy fleets beyond their original life of type is in many cases a necessity to ensure the preservation of Army’s capability effect in support of government, the additional costs are invariably transferred to a fully committed Sustainment Budget. In many cases, funding can consequently be made possible only through a deliberate decision to trade off sustainment to another fleet or other fleets.

Balancing Innovation, Modernisation and Enduring Sustainability

How then does an Army in Motion realise its potential and innovate to deliver new and superior capability, yet do so in an affordable and sustainable manner? Although not exhaustive, there are several considerations when determining how best to define the types, quantities and employment options for our equipment fleets into the future. Each should be weighed carefully against the strategic value of the fleet or capability under consideration, as Army’s appetite to sub-optimise or accept risk in specific capabilities will vary based on the significance of each to the joint force.

Accept ‘Fit-For-Purpose’ in Lieu of ‘Best of Class’

While Army should strive to be the best at what it does, the practicalities of budgets preclude the organisation’s ability to always operate and equip the leading edge of technology. More importantly, Army should beware of conflating the concepts of ‘professional advantage’ with ‘technological advantage’ or, in more colloquial terms, ‘being the best’ and ‘having the best’. This is a false equivalence and subordinates the value of people to the value of equipment as the decisive factor in warfare. Precision- guided munitions may be capable of placing explosive ordnance to within one square metre of a designated target at extended distances, but unit costs several orders of magnitude higher than traditional munitions make replacement of the entire inventory unachievable. This principle applies equally to ADF vehicles, weapons and other land materiel fleets.

It is unsustainable and unnecessary to replace the ADF fleet of weapon- mounted torches on a biannual basis simply because the pace of technology increases the brightness output in lumens at this rate. There is a tendency, however, for some innovators to overemphasise technological advantage as a panacea for Army’s warfighting challenges—a false economy that Australia cannot rely upon when in competition with much larger nations. By contrast, Army’s focus should instead be to link modernisation and procurement to clearly defined capability requirements and then integrate equipment with the other fundamental inputs to capability in order to maximise the effect delivered. The equipment that meets these functional performance specifications and achieves the requirement may not necessarily be the most sophisticated item on the market.

Fund and Equip to Preparedness Requirement, Not the Entire Force 

The cost of modernisation is increasingly shaping Army to prioritise its limited available equipment to areas and units of the highest priority: simplistically, an Army of ‘haves’ and ‘have nots’. This challenge is not unique to Australia—the United States (US) Army is currently looking to apply a tiered access model to its M4 replacement under the Next Generation Squad Weapon modernisation program. The replacement cost of US small arms has required prioritisation only to infantry and special forces units, with remaining forces expected to retain the M4 in order to ensure affordability.¹¹ Although not palatable, particularly to those supporting or part-time elements that may not receive access to new fleets, tiered access options are relevant where cost models are inadequate to meet the requirement of the entire force. The Australian Army can learn from coalition exemplars in how it equips its force, prioritising delivery of its most lethal, sophisticated (and costly) capabilities along a basis of issue that aligns with those elements supporting directed preparedness requirements. For limited fleets this has already been applied in Australia with some success. Through the delivery of the Soldier Combat Ensemble modernisation plan, Army has prioritised the allocation of its newest generation of load carriage equipment, protective elements, combat helmets and ocular protection to the ADF’s highest land combatant priorities. While this allocation is insufficient to equip the entire ADF within the available budget, it ensures that those units, elements and individuals with directed readiness requirements are equipped with the most advanced protective equipment available. Individuals and units in supporting staff echelons, without commensurate preparedness commitments, continue to utilise legacy systems that remain fit for purpose, despite not being at the leading edge of technology.¹²

Holistic consideration of equipping along preparedness lines also ensures that Army does not denude quantities of equipment in a general manner across every unit in the entire force but, rather, concentrates and preserves equipment holdings in those areas of highest priority. Although this is a hard choice, it is nonetheless also preferable to the occasional practice of ‘trading off’ and reallocating project sustainment funds to acquisition in order to preserve acquisition quantities that will inevitably be unsustainable at a future point in time.

Exploit Opportunities to Retire Superseded Fleets

Where new technologies present opportunities to modernise and enhance how Army fights and operates, innovators should seek not simply to introduce new equipment but to consider the total capability effect provided and linked capabilities affected. In many cases, this review may identify legacy equipment in interdependent capabilities that has been superseded or rendered obsolete. If these legacy fleets are retired from service, funding previously allocated to them may then be repurposed to offset the cost of new materiel. A case in point is that Army has introduced multiple different bulk liquid storage fleets over several decades. Through examination of the storage options required to support our force under the future ADF Bulk Liquid Distribution project, complemented by bulk liquid modules already delivered under Project LAND 121, it is feasible that many of these legacy fleets could be rationalised and reduced in number. The funds associated with maintaining these legacy fleets may then partially offset the introduction of new capability, or at least spare Army the cost of sustaining duplicate and redundant fleets.

The pace of technological change has made possible the fielding of hardened and networked military forces previously considered the domain of science fiction. Image courtesy Department of Defence

Similarly, new technologies and methods of employment may indirectly realise cost reductions in sustaining ‘old’ practices. In the area of logistic distribution, the Joint Modular Intermodal Container represents a durable and reusable alternative to traditional cardboard and palletised transportation materials. Although the individual cost of each container is substantially greater than the comparative cost of wooden palletised options, the option for repeated use and repurposing of these items presents the possibility of employing a different distribution model in Army—one that, over time, may realise cost efficiencies in procurement of consumable distribution materiel.¹³ In exploring innovative technologies and concepts for employment, Army should continue to ask whether innovations in one area might realise cost savings to fleets or capabilities in other areas.

Accept that Army May Not be Able to Field Every Capability It Would Like to Possess

This consideration is arguably the most contentious for Army to grapple with. It runs contrary to military nature to accept that there may actually be some tasks the Army simply cannot do and some capabilities it simply chooses not to field. For Army to modernise in a sustainable manner however, due consideration should be given to a holistic review of the capabilities Army intends to field as an independent or lead nation in a multinational task force and those which may be facilitated by leveraging coalition partners. To do so would require Service Chief level prioritisation of every major project Army intends to deliver over the next 20 years, with recommendations for government decisions to cancel those projects deemed non-essential to Australia’s warfighting capability as a nation. This cannot occur in isolation however, and should be undertaken within the context of how each project contributes to the joint force. The ‘harvested’ funds from cancelled projects might then be reinvested against under- provisioned projects of higher strategic priority. While not a palatable option, and one that would require government acceptance of reduced capability against a list of prioritised options, this would ensure a more robust force able to sustain the capabilities government has chosen to invest in. The benefit realised through this approach is fewer but more resilient capabilities that have not been ‘hollowed out’ through reduced and potentially minimised asset quantities to fit within budgets.

Conclusion

Army’s recapitalisation and modernisation pathway is one that will enhance the organisation’s warfighting capability; however, it comes at a risk to capability resilience if not implemented in a sustainable manner. Competing pressures on finances and capability place Army’s modernisation and sustainment budgets under stress, which has an impact on current land materiel and future equipment fleets identified for introduction into service. While Army has varying ability to respond to and treat each of these pressures, there are measures that innovators and capability managers can take when modernising land materiel to reduce the impacts associated with these challenges. By considering the applicability of these measures for each equipment fleet Army seeks to modernise, and holistically across the entire spectrum of capability Army generates, the organisation may achieve a more sustainable and resilient modernisation path.

Endnotes

1. Editorial Staff, 1954, ‘What Does It Cost?’, Australian Army Journal Vol 13, Nov
2. Editorial Staff, 1954.
3. Department of Defence, 2013, Defence White Paper 2013, Canberra: Commonwealth of Australia, pp 97-98
4. Department of Defence, 2013, pp 71-89; Department of Defence, 2016, Defence White Paper 2016, Canberra: Commonwealth of Australia, pp 177–79
5. Australian Army, 2014, Decision Brief for Deputy Chief of Army on FY14/15 Sustainment Budget (For Official Use Only), 17 Feb
6. Australian National Audit Office, 2007, Audit Report No 3 Management of Army Minor Capital Equipment Procurement Projects, 2006-2007, Department of Defence, at: https:// www.anao.gov.au/sites/g/files/net4981/f/ANAO_Report_2006-2007_03.pdf
7. When scoping the basis of issue for tentage procured in support of Army’s Multi-Role Helicopter capability, Army obtained procurement costings for BaseX tent systems that were several orders of magnitude more expensive than other in-service canvas options: Australian Army, 2017, Minute—MRH90 Shelter and Tentage Requirement (BaseX Shelter System) (For Official Use Only), 23 Oct
8. Australian Army, 2018, Life of Type Review of CA42 Army Marine Systems—Summary of Outcomes (For Official Use Only), 23 Apr
9. Capability Acquisition and Sustainment Group, 2015, Minute—Request for FY15/16 Funding from AHQ Unfunded Pressures List—Heavy Recovery Vehicle Crane Replacement Program (For Official Use Only), 21 May
10. Capability Acquisition and Sustainment Group, 2016, Minute—Revised Blackhawk Planned Withdrawal Date Sustainment Funding (For Official Use Only), 12 Oct
11. T South, 2018, ,‘Major Changes are On the Way for Army’s SAW Replacement’, Army Times, 9 Oct, at: https://www.armytimes.com/news/your-army/2018/10/09/major- changes-for-small-arms-are-on-the-way-with-the-armys-saw-replacement/
12. Australian Army, 2016, Introduction into Service (IIS) Directive for the Soldier Combat Ensemble (SCE) Modernisation Plan (For Official Use Only), Canberra: Commonwealth of Australia, p 3
13. S Gregory, 2007, ‘Joint Military Intermodal Distribution System (JMIDS) Joint Capability Technology Demonstration’, Military News, 30 Jul, at: https://www.militarynews.com/ peninsula-warrior/news/top_stories/joint-modular-intermodal-distribution-system- jmids-joint-capability-technology-demonstration/article_e4777c23-5041-5319-ac3e- bb67be6d07a4.html