DoD on the Hill

House defense committee chair proposes acquisition system reforms

Friday, March 27th, 2015

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House Armed Services Committee (HASC) chair Rep. Mac Thornberry (R-TX) introduced a bill containing the first in a series of broad ranging defense acquisition reforms.

During a year-long effort, the committee engaged stakeholders from the Department of Defense (DoD), industry, and Congress to develop proposals for long-term reform of the defense acquisition system. Thornberry called his proposal “the first step on what I expect to be many years of focused work to improve our flawed defense acquisition system.”

The broken acquisition system is contributing to the loss of our military’s technological edge,” Thornberry charged. He said the current system is slow, cumbersome, and often many years late in delivering equipment that frequently under performs and is costly to maintain.

The proposed “Agile Acquisition to Retain Technological Edge Act” would streamline the process, improve accountability, and eliminate outdated regulations, thereby begin “to get some of that edge back,” Thornberry stressed. The bill’s provisions promote a system that is “proactive, agile, transparent, and innovative.”

To be proactive, the bill proposes to empower acquisition officials by removing barriers so that officers can pursue acquisition as a profession. It would provide a “Defense Acquisition Workforce Development Fund” and expedited hiring authority for hiring and training the acquisition workforce. The bill also would give acquisition program managers greater flexibility to address programmatic risk and enable the selection of contract types that best meet program objectives with an appropriate level of risk.

The bill promotes quick program adjustments by allowing program managers to focus on oversight, engineering, and risk management. The proposal would consolidate reporting requirements, streamline the approval process, and identify key considerations that are addressed during the life of the program. The bill also would eliminate “non-productive Departmental legal review” in some cases.

The bill promotes transparency by supporting government and industry communication that is clear and open and the production of auditable financial management statements.

The proposed reform bill would remove barriers that inhibit companies from seeking defense business or proposing new ideas. The bill would promote the use of value engineering to encourage contractors to reduce costs and share savings. The Mentor-protégé Program would be made permanent to improve the linkage small and large defense contractors. Also, the bill would make the Small Business Innovative Research Program permanent to be used “more broadly by the military services and defense agencies.”

Thornberry said the reforms will be considered for inclusion in the FY2016 Defense Authorization bill, which the HASC will take up next month. Ranking Member Rep. Adam Smith (D-WA) co-sponsored Thornberry’s proposals.

Thornberry said he released his recommendations of what he called a “discussion draft” of the bill now because he wanted feedback from the stakeholders. “We listened to a lot of folks as we drafted this bill, and we want to hear from them again before we work to make it law,” he said.

Proposed House Budget Resolution would cut spending by $5.5 trillion, increase defense, but not end sequestration

Friday, March 20th, 2015

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A budget resolution approved by the House Budget Committee (HBC) yesterday would cut $5.5 trillion from federal budgets over the next 10 years and balance the budget by 2024.

HBC Chairman Rep. Tom Price (R-GA) called the resolution “a strong step forward in addressing the nation’s fiscal and economic challenges.”

The annual budget resolution, often referred to as a “congressional budget blueprint,” sets revenue and appropriations targets for the tax writing and appropriations committees, so they can begin work on the president’s budget request.  This is an internal congressional procedure, so the passed budget resolution is not sent to the president for approval.

The HBC plan, “A Balanced Budget for a Stronger America,” would set the FY2016 total federal spending level at $3.8 trillion, about $140 billion less than current policy. Of the $5.5 trillion reduction from 2016 to 2025, $2.2 trillion would come from changes to the health care law and $2.1 trillion from Medicare, Medicaid, and other mandatory programs. The remaining reduction would result from cuts to discretionary programs (-$539 billion) and lower interest payments on the debt ($-798 billion).

The HBC proposal would not end sequestration.

The budget discretionary budget authority for national defense (DoD plus other defense-related spending such as the Department of Energy’s nuclear program) would increase by $387 billion from FY2017 to FY2025, while cutting non-defense budgets by $759 billion over the same period.

In FY2016, the proposed budget would keep defense at the sequester level of $523 billion, but would set funding for Overseas Contingency Operations (OCO) at $90 billion, about $40 billion above the request. The president’s national defense base budget request was $561 billion, $38 billion above the cap.

The committee’s budget resolution would also set up a “Defense Readiness and Modernization Fund” that could be used to increase defense funding is a way that would be considered “deficit-neutral,” just like funding for the OCO account.

House pro-defense supporters urged the committee to approve an amendment adding more defense funds. This concerned so-called “deficit hawks” who are troubled about resulting increases to the deficit, unless they were offset by cuts elsewhere. The House leadership, worried that this standoff could imperil passage of the budget resolution on the house floor, brokered a deal that the Rules Committee would accept an amendment to increase OCO funding to $96 billion, without requiring any offsets, and would not require offsets for the $20 billion “Defense Readiness and Modernization Fund.”

The full House is expected to consider the budget resolution next week

Senate passes and sends FY2015 Appropriations and Defense Authorization bills to president

Monday, December 15th, 2014

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The Senate has passed and sent to the president the FY2015 Appropriations bill that funds the Department of Defense Appropriations bill and 10 other bills (including Military Construction /VA) through the end of FY2015. The bill also funds the Homeland Security Appropriations bill under a continuing resolution (CR) through February 27, 20015.

The Senate passed the $1.013 trillion government funding bill 56-40 Saturday after defeating moves by Sen. Ted Cruz (R-TX) designed to stop the bill from proceeding to a final vote. The House had passed the bill 219-206 on Thursday. The president indicated he will sign the bill, thus averting a government shutdown.

Senate Majority Leader Sen. Harry Reid (D-NV) acknowledging the compromise cooperation between Democrats and Republicans needed to finish the bill said “this bill is not perfect, but we can all be proud that we voted tonight to make America more secure, put our government on more sound footing than when this Congress began.”

Funding in the bill for DoD base appropriations, less Military Construction, totals almost $490.2 billion, about $1 billion less than the request. Military Construction appropriations funding (in the MilCon/VA bill) is $6.6 billion, essentially the same as the request.The bill also provides $64 billion for Overseas Contingency Operations (OCO).

The bill provides funding for a 1% percent military pay raise. But, it freezes freeze pay for general and flag officers and makes a 1 percent reduction in the Basic Housing Allowance (BAH). The conference agreement adds about $200 million to the Defense Commissary Agency funding request to maintain operations.

The legislation includes about $850 million to refuel the USS George Washington, denying the administration’s plan to defer a decision on refueling until the FY2016 budget. The bill also funds continued operations of A-10 aircraft and continues operations of the full Airborne Warning and Control System (AWACS). The administration had proposed retiring both of these aircraft.

The Senate also approved (89-11) the FY2015 Defense Authorization bill, which the House passed earlier this month. The president is expected to sign the bill.

The Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015,” named after the Senate and House Armed Services Committee chairmen, authorizes $495.9 billion for the Department of Defense (DoD) and $17.5 billion for the Department of Energy (DoE) nuclear weapons program.  The bill authorizes an additional $63.7 billion for Overseas Contingency Operations (OCO).

The legislation authorizes a 1 percent military pay raise, requested by the president. However, the bill rejects proposed changes to TRICARE fees, deductibles, and pharmacy co-pays, but does authorize a $3 increase in pharmacy co-pays for prescriptions filled in non-military treatment facilities by non-Active Duty TRICARE beneficiaries.

The authorization bill rejects the administration-proposed 5 percent cut to Basic Allowance for Housing (BAH), opting instead for a 1 percent reduction in BAH. The bill also rejects another Base Realignment and Closure (BRAC) round in 2017 that was urged by the administration. In recent years Congress has repeatedly rejected administration requests for another BRAC round.

The bill also denies the administration proposal to defer a decision on refueling the USS George Washington, providing almost $800 million for support and advance planning for refueling the aircraft carrier, prohibits the Air Force from retiring or preparing to retire the A-10 aircraft fleet in FY2015, and stops the Air Force from retiring any Airborne Warning and Control System (AWACS) in FY2015.

In a major organizational move, the conference agreement creates an Under Secretary of Defense for Business Management and Information that combines the positions of Deputy Chief Management Officer (DCMO) and Chief Information Officer (CIO).

Before adjourning this week, the Senate will move to complete action on a number of pending nominations proposed by the president and legislation extending for one year tax provisions set to expire at the end of the year. These so-called “tax extenders” include research and development tax credits (highly popular with business), state and local sales tax deductions, tax credits for energy efficient homes, and bonus depreciation tax credits. 

House passes FY2015 appropriations for DoD and 10 other bills; CR for Homeland Security bill

Thursday, December 11th, 2014

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With the Continuing Resolution (CR) on FY2015 funding set to expire at midnight, the House passed a $1.013 trillion FY 2015 Appropriations bill that funds the Department of Defense Appropriations bill and 10 other bills (including Military Construction /VA) through the end of FY2015.

The Homeland Security Appropriations bill, subject to intense debate after the president announced an executive order on immigration, is funded in the bill under a CR through February 27, 2015. This action will allow the Republican-controlled 114th Congress time to address concerns about the immigration order.

The Senate is expected to take up the bill tomorrow. To avert a shutdown until the Senate acts both the House and Senate approved a two-day CR.

This bill is being referred to as a CRomnibus appropriations bill because it is a combination of full-year appropriations for 11 appropriations bills and a two and a half month CR for the Homeland Security bill.

After a day of high drama that included a razor thin vote (214-212) approving the rule to proceed to a final vote and an almost seven hour recess, the House passed H.R. 83 by 219-206. Fifty seven Democrats joined 162 Republicans in supporting the bill. Defections from the bill included Republicans unhappy that the bill did not more strongly rebuke the president’s order on immigration and Democrats who were outraged over provisions that changed the Dodd-Frank law regarding banks trading financial derivatives and relaxed restrictions on campaign contributions by individuals.

The final bill was the result of intense conference negotiations between the House and Senate Appropriations committees. The House had passed its version of the bill in June and the Senate Appropriations Committee approved a bill in July.

In a joint statement House Appropriations Committee (HAC) chair Rep. Harold Rogers (R-KY) and Senate Appropriations chair Sen. Barbara Mikulski (D-MD) said “this bill fulfills our constitutional duty to fund the government, preventing damage from shutdown politics that are bad for the economy, cost jobs and hurt middle class families. While not everyone got everything they wanted, such compromises must be made in a divided government.”

Funding in the bill for DoD base appropriations, less Military Construction, totals almost $490.2 billion, about $1 billion less than the request. Military Construction appropriations funding (in the MilCoN/VA bill) is $6.6 billion, essentially the same as the request.The bill provides $64 billion for Overseas Contingency Operations (OCO).

The bill provides funding for a 1% percent military pay raise as proposed by the president, but freezes freeze pay for general and flag officers. It also allows for a 1 percent reduction in the Basic Housing Allowance (BAH) growth (the administration proposed a 5 percent cut). The conference agreement adds about $200 million to the Defense Commissary Agency funding request to maintain operations and block the president’s proposed cut to the commissary subsidy.

The legislation includes about $850 million to refuel the USS George Washington, denying the administration’s plan to defer a decision on refueling until the FY2016 budget. The bill also funds continued operations of A-10 aircraft, blocking the administration proposal to retire the A-10 fleet, and continues operations of the full Airborne Warning and Control System (AWACS), thwarting the administration’s plan to retire some AWACS aircraft in FY2015.

Operations and Maintenance (O&M) funding in the bill totals $161.7 billion, more than $4 billion below the administration’s request. The bill includes finding for a 1 percent civilian pay raise and provides funding increases for facility sustainment (+$900 million) and readiness, depot maintenance, and base operating support shortfalls (+$1.2 billion). Conferees cut $270 million or 2 percent from the information technologies O&M budget request.

Procurement funding in the bill totals $93.8 billion, more than $4 billion higher than the request. Included in the bill’s procurement funding are: two attack submarines and three Littoral Combat Ships; 38 F-35 (Joint Strike Fighter) aircraft and 7 KC-46A tankers; and 15 EA-18G Growlers. The legislation appropriates $1.2 billion for National Guard and Reserve equipment not requested by the administration.

The bill includes $63.7 billion for research and development, slightly more than the request. Among the programs receiving R&D funding are: the Armored Multi-Purpose Vehicle (AMPV); the long-range strike bomber; and the KC-46 tanker. The conferees also included $225 million for the Rapid Innovation Fund to support small businesses provide “leap-ahead” technologies. The bill also adds $1.3 billion for medical research (including about $100 million for the Ebola crisis) with a special focus on Peer-Reviewed Medical Research and Peer-Reviewed Cancer Research.

The conferees essentially continued language from the FY2014 appropriations bill to prohibit the transfer of detainees from Guantanamo to the United States or its territories or the modification or acquisition of facilities used to house detainees and eliminated the 5 percent discount for Military Exchanges sales of tobacco and tobacco-related products.

House passes conferenced FY2015 Defense Authorization bill

Friday, December 5th, 2014

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The House passed (300-119) the FY2015 Defense Authorization bill yesterday with bipartisan support.

The “Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015,” named after the Senate and House Armed Services Committee chairmen, was agreed to in conference this week. The House had passed its version of the bill in May. The Senate Armed Services Committee approved its version in May, but the full Senate had not acted on the bill.

The agreed-to legislation authorizes $495.9 billion in base discretionary budget authority for the Department of Defense (DoD) and $17.5 billion for the Department of Energy (DoE) nuclear weapons program.  The bill authorizes an additional $63.7 billion for Overseas Contingency Operations (OCO).

The bill authorizes the president’s request for a 1 percent military pay raise and accepts the president’s proposal to freeze pay for General and Flag officers in FY2015. However, the bill rejects proposed changes to TRICARE, but does authorizes a $3 increase in pharmacy co-pays for prescriptions filled in non-military treatment facilities by non-Active Duty TRICARE beneficiaries. The bill also provides an additional $100 million in subsidy funding for the commissary system, restoring the administration proposed reduction

The conferees reduced the administration-proposed 5 percent cut to Basic Allowance for Housing (BAH) to 1 percent. The bill also rejects another Base Realignment and Closure (BRAC) round in 2017 that was urged by the administration.

The bill also rejects other savings proposals made by the administration. The House-Senate bill denies the administration proposal to defer a decision on refueling the USS George Washington until the FY2016 budget. Almost $800 million is provided in FY2015 for support and advance planning for refueling the aircraft carrier.

The bill also prohibits the Air Force from retiring or preparing to retire the A-10 aircraft fleet in FY2015 and stops the Air Force from retiring any Airborne Warning and Control System (AWACS) in FY2015.

The legislation authorizes $1.25 billion for National Guard and Reserve equipment (not requested by the administration) and blocks the Army’s plan to move AH-64 Apache helicopters from the National Guard to active components in FY2015.

In a major organizational move, the conference agreement creates an Under Secretary of Defense for Business Management and Information that combines the positions of Deputy Chief Management Officer (DCMO) and Chief Information Officer (CIO). Currently, the Deputy Secretary of Defense, supported by the DCMO and staff, assumes the CMO roles and responsibilities.

The Senate will consider the bill next week.

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