Defense Financial Highlights

OMB issues revised guidance on conference participation

Tuesday, December 6th, 2016

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The Office of Management and Budget (OMB) has revised its guidance on policies and practices regarding U.S government employees and agencies participating in conferences.

In a memo to federal department and agency heads, OMB Director Shaun Donovan amended the guidance OMB issued in 2012 (OMB Memorandum M-12-12) that reduced travel spending and instituted tough management controls for conference participation.

The 2012 guidance was issued to comply with the president’s direction to cut administrative expenses. It was also in response to an Inspector General report that in 2010 the General Services Administration (GSA) spent close to one million dollars on a training conference in Las Vegas.

Donovan said that since 2012, agencies “have achieved significant savings in conference spending and strengthened internal controls to monitor travel and conference-related activities.” Donovan emphasized the revised guidance acknowledges the lessons learned and the actions agencies have taken, but also recognizes the challenges faced over the past few years, especially “reduced opportunities to perform agency functions, present scientific findings and innovations, train, recruit, and retain employees, or share best practices.”

The revised guidance “amends policies and practices for Federal conference sponsorship, hosting, and attendance.” The guidance stresses the importance of conferences and eases some approval requirements. But, it still requires detailed annual reporting on conference participation.

In the memo, Donovan stresses that OMB understands the important role conferences play in the operations of the federal government.  He said conferences enable “the sharing of knowledge among large groups, bringing together dispersed communities, or providing opportunities for interaction, collaboration and presenting cutting edge work.”

Under the revised guidance, agencies are directed to continue to ensure:1) “that Federal funds are used only for necessary and appropriate proposes” and 2) that all conference attendance and expenses are appropriate to the agency mission and comply with the Federal Travel Regulation (FTR) and Federal Acquisition Regulation (FAR).

OMB directs agencies to designate an official “to approve estimated spending excess of $500,000 on a single conference and submit justification that attendance is the most cost-effective way to achieve a “compelling purpose.”

Agencies should make sure that decisions on conference participation and attendance are made in a timely manner “to ensure that conference attendees are able to commit to participation in a timely manner and take advantage of cost-savings measures such as early registration and advance travel bookings,” according to the memo. To prevent lengthy review processes, OMB states that agencies “should pre-approve, as appropriate, employee attendance at known recurring conferences.

OMB also requires agencies to report conference expenses on their official websites. OMB directs agencies to report by January 31 of each year a “description of all agency-sponsored conferences from the previous fiscal year where net expenses exceed $100,000. If net costs for an agency-sponsored conference exceed $500,000 the website should identify the approving official and the rational for approval.

Carter urges Congress to avoid long-term CR for FY2017

Friday, December 2nd, 2016

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With Congress appearing ready to consider a long-term continuing resolution (CR) well into next year (possibly until May 2017), Secretary of Defense Ash Carter warned of the detrimental effects on U.S. national security of such action.

In a letter to congressional leaders, Carter called the prospect of operating under a CR for nearly two-thirds of the fiscal year “unprecedented and unacceptable.”  He stressed that DoD has never operated under a long-term CR during a transition to a new administration.

The longer the length of the CR the more damage will be done to DoD’s capabilities because DoD will be “locked into last year’s budget and last year’s priorities,” Carter said.  He cited the most harm will be resulting shortfalls in operations and munitions accounts, especially those accounts funding counterterrorism operations. 

Carter emphasized that operating under a CR means that DOD will not have the authority to begin new programs, increase program production rates, or start multi-year procurement projects.  He said in FY2017 DOD will need 57 new starts and 87 increases in program production rates.  Delaying these actions during a CR would undercut important programs (e.g., KC-46 Tanker, helicopter buys, and replacement of the Ohio submarine).

Carter said if Congress can’t complete action on the FY2017 DoD appropriations bill by the time the current CR runs out on December 9, it should at least keep the CR as short as possible to allow time to finish the bill.

OMB/OPM guidance increases amounts available for federal employee bonuses in FY2017

Tuesday, November 29th, 2016

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Funding available for awards for federal non-Senior Executive Service (SES) employees is set to increase for FY2017.

Guidance issued to agency heads in a joint memorandum from the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) increased the amounts agencies can use to pay non-SES/Senior Level (SL)/Senior Professional and Scientific (ST) for the period October 1, 2016 to September 30, 2017.

Separate guidance on bonuses for SES/SL/ST employees was issued in August.  The freeze on bonuses and awards to political appointees remains in effect.

The aggregate amount agencies can spend on bonuses for non-SES/SL/ST employees for FY2017 is 1.5 percent of the aggregate salaries.  Agency spending on bonuses has been frozen at the FY2010 level since FY2011.  This guidance lifts that freeze.

This guidance applies to individual money awards only, including individual rating-based performance awards and individual contribution awards (e.g., special act awards).

The guidance also lifts monetary caps (frozen at the FY2010 level) for other awards such as group awards, referral bonuses, suggestion/inventions awards, Quality Step Increases (QSIs), and recruitment, relocation, and retention incentives.

The OMB/OPM memo emphases that “awards programs are valuable tools to help agencies to reward employee performance excellence and reinforce a high performing culture that will help improve organizational effectiveness.”  Agencies are encouraged “to review their awards policies to ensure they are operating awards programs that optimize employee engagement and recognition through appropriate use of the various awards authorities.”

The memo also directs agencies to honor all collective bargaining agreements before implementing this guidance.

OPM directs federal agencies to freeze SES hiring

Friday, November 25th, 2016

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The Office of Personnel Management (OPM) has announced a government-wide freeze on Senior Executive Service (SES) hires effective December 7, 2016.

Acting OPM Director Beth Colbert said in a memo issued last week that the freeze will “ensure the incoming head of the agency will have the full opportunity to exercise his or her prerogative to make or approve executive resources decisions.”

Colbert pointed out that this is normal procedure during transition to a new administration when the president requests letters of resignation form all non-term presidential appointees.

President Obama has asked all non-termed presidential appointees to submit a resignation letter by December 7, 2016. Exceptions to this request are U.S. Marshals; U.S. Attorneys; Inspectors General; Termed appointees; Appointees of independent and regulatory agencies that are led by termed appointees; and Appointees serving on part-time boards and commissions.

During the freeze (ending on Inauguration Day, January 20, 2017) OPM will not accept agency submissions of new SES Qualifications Review Board (QRB) cases. In addition, OPM will suspend the 90-day deadline for agency submissions of QRB cases. However, OPM will continue to process QRB cases that have been submitted before the effective date of the freeze. Agencies will be allowed to continue to conduct SES staffing actions up to the point submission to the QRB.

OPM identified some exceptions to the freeze on SES hiring. The freeze does not apply to agencies excepted from the president’s resignation letter request. The freeze also does not apply to submission of “Criterion B” cases covering those individuals who have “successfully completed an OPM-approved SES Candidate Development Program (CDP) and whose executive qualifications are then transmitted to OPM for QRB review and certification for general non-competitive SES appointment eligibility.”

OPM will consider exceptions to the freeze if necessary to “ensure the continuity of agency operations” during the transition to the new administration.  The exception consideration will be based upon “critical need” in the agency. OPM will consider exceptions on a case-by-case basis.

Agencies will be able to request resumption of QRB processing of their SES cases when a new agency head is appointed.

FY2017 Military Construction/VA appropriations bill stands alone as Congress seen likely to extend CR into next year

Tuesday, November 22nd, 2016

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With the end of the current FY2017 Continuing Resolution (CR) set to run out on December 9, Congress appears likely to pass an extension until March 2017.

Congressional Republicans, who now control both houses of Congress seem ready to defer action on the final 11 remaining FY2017 appropriations bills until March 2017.  There had been movement in the House to propose an FY2017 Omnibus Appropriations bill.  But, last week House Appropriations Committee Chairman Rep. Harold Rogers (R-KY) announced that his committee will start work on a CR that would keep the government operating until March 31, 2017.

“While I’m disappointed that the Congress is not going to be able to complete our annual funding work this year, I am extremely hopeful that the new Congress and the new Administration will finish these bills.” Rogers said.  Rogers also said he hoped “regular order” would return to the appropriations process next year “so that the damaging process of Continuing Resolutions will no longer be necessary.”

Some Senate republicans, including Senate Armed Services Committee (SASC) chairman Sen. John McCain (R-AZ) pushed back against the House movement towards extending the CR into next year.  McCain has been working with his House counterparts to try to complete a compromise version of the FY2017 Defense Authorization bill.  However, without a completed FY2017 DoD Appropriations bill, final action on the defends policy bill will likely also be deferred until next year.  Congressional Democrats have been pushing for a series of “minibus” appropriations bills, batching the remaining 11 bills.

If that the CR is extended into next year, the FY2017 Military Construction/Veterans Affairs appropriations bill would be the only appropriations bill to become law this year.  The FY2017 MilCon/VA bill was passed and signed into law in September along with the CR extending FY2017 government funding until December 9.

The Military Construction portion of the FY2017 MilCon/VA Appropriations Act provides $7.75 billion for military construction projects, family housing, Base Realignment and Closure (BRAC), and the NATO Security Investment Program. This amount is $280 million above the president’s request. The Act also funds $172 million in the Military Construction Overseas Contingency Operations (OCO) appropriation.

Funding for specific active and reserve component military construction projects in the Act is set at $5.7 billion.  In addition, the Act provides another $615 million in FY2017 for the Army ($41 million), Navy and Marine Corps ($316 million), Air Force ($150 million), Army national Guard ($67 million), Air National Guard ($11 million) and Army Reserve ($30 million) to be used for projects identified in unfunded priority lists identified by the military services and provided to Congress.

The Act fully funds the request for Family Housing projects ($1.3 billion) and the NATO Security Investment Program ($178 million) to support fixed and mobile infrastructure projects for NATO operations.  The DoD Base realignment and Closure Account is provided $240 million for cleanup and disposal of property under the four closure rounds already approvedThe Act also rescinds $283 million from prior military construction appropriations Acts.

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