UPDATE 2-Obama plan vows to end waste in U.S. arms programs

(Adds comments from defense secretary)

By Andrea Shalal-Esa

WASHINGTON, Feb 26 (Reuters) - The Obama administration on Thursday vowed to end years of cost overruns and schedule delays in U.S. weapons programs, calling acquisition reform one of the Pentagon's highest priorities.

The fiscal 2010 budget overview released on Thursday called for a 4 percent increase in the Pentagon's base budget to $533.7 billion, to increase the size of the Army and Marine Corps, improve medical services for wounded troops, and reform the way the Department of Defense buys weapons.

The plan did not include any details about specific weapons programs that may be targeted for cancellation or cutbacks, although President Barack Obama this week said he would end Cold War programs that are not being used.

Those reform efforts are being closely watched by the Pentagon's biggest suppliers, including Lockheed Martin Corp (LMT.N), Boeing Co (BA.N), Northrop Grumman Corp (NOC.N), General Dynamics Corp (GD.N), BAE Systems Plc (BAES.L) and other big contractors.

The companies are girding for a leveling off of spending on big weapons programs after nearly a decade of massive growth. They are particularly worried about Obama's promise to cancel some programs outright, but details are still scant.

Analysts say the F-22 fighter jet built by Lockheed, U.S. missile defense programs, a big Army modernization program led by Boeing, and a new Navy destroyer built by Northrop Grumman and General Dynamics are among the most vulnerable to cuts.

"The administration is committed to reforming the defense acquisition process so that taxpayer dollars are not wasted," the budget outline said. "When it comes to the defense of our nation, it's critical that every dollar is spent in the most effective way possible."