Opposed Systems Design

First, this department must consistently demonstrate the commitment and leadership to stop programs that significantly exceed their budget or which spend limited tax dollars to buy more capability than the nation needs. Our conventional modernization goals should be tied to the actual and prospective capabilities of known future adversaries – not by what might be technologically feasible for a potential adversary given unlimited time and resources. I believe the decisions I am proposing accomplish this step.
Second, we must ensure that requirements are reasonable and technology is adequately mature to allow the department to successfully execute the programs. Again, my decisions act on this principle by terminating a number of programs where the requirements were truly in the “exquisite” category and the technologies required were not reasonably available to affordably meet the programs’ cost or schedule goals.
…Under this budget request, we will reduce the number of support service contractors from our current 39 percent of the workforce to the pre-2001 level of 26 percent and replace them with full-time government employees. [Part of a larger rebalancing of the role of support contractors.]
…As I told the Congress in January, this budget presents an opportunity – one of those rare chances to match virtue to necessity; to critically and ruthlessly separate appetites from real requirements – those things that are desirable in a perfect world from those things that are truly needed in light of the threats America faces and the missions we are likely to undertake in the years ahead. An opportunity to truly reform the way we do business.I will close by noting that it is one thing to speak generally about the need for budget discipline and acquisition and contract reform. It is quite another to make tough choices about specific systems and defense priorities based solely on the national interest and then stick to those decisions over time. To do this, the president and I look forward to working with the Congress, industry, and many others to accomplish what is in the best interest of our nation as a whole.

And from the Q&A:

Q: Dr. Gates, you famously complained about next-war-itis. Does this proposal cure this building of next-war-itis? And if so, how?
SEC. GATES: Well, it certainly doesn’t cure it. That may be incurable.
I mean, the reality is that — and let me put this very crudely — if you broke this budget out, it would probably be about 10 percent for irregular warfare, about 50 percent for traditional, strategic and conventional conflict, and about 40 percent dual-purpose capabilities.So this is not about irregular warfare putting the conventional capabilities in the shade. Quite the contrary: this is just a matter — for me, at least — of having the irregular-war constituency have a — have a seat at the table for the first time when it comes to the base budget.

I pointed out a while ago that this isn’t an either-or choice (and anyone who tries to portray it as such is off-base). Gates 10%-50%-40% breakout illustrates this.