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OMB gives agencies guidance for operating under FY2015 CR

Monday, October 6th, 2014

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The Office of Management and Budget (OMB) has issued guidance setting the rules under which federal agencies will operate during the FY2015 Continuing Resolution (CR) enacted (H.J. Res 124) late last month. The CR period runs from October 1 through December 11, 2014.

Under this guidance, OMB will apportion (distribute funds to agencies to be available for obligation) funds automatically to appropriations accounts during the CR period, unless language in the CR provides for specific levels of funding or special rules.

The amount provided in the FY2015 CR is the “rate for operations provided in the applicable appropriations acts for fiscal year (FY) 2014 and under the authority and conditions provided in such Acts,” according to the OMB memo.  The amount is net of any rescissions, plus or minus mandated transfers, and includes a 0.0554 percent reduction required in the CR (Section 101(b). However, funds designated for Overseas Contingency Operations/Global War on Terrorism and disaster relief are excluded from the 0.0554 percent cut.

OMB calculates the automatic apportionment rate by multiplying the annualized amount by the percentage of the year covered in the CR.  In this case the automatic apportionment rate is 19.73 percent to cover the 72-day CR period.

Not all accounts receive funding during the CR period.  Agencies cannot obligate funds for accounts for which no funding was included in an FY2015 appropriations bill that has been passed or reported out of committee in either the House or the Senate. If a program (PPA) within an account has not been funded (zero-funded) by the House or Senate, the account will receive an automatic apportionment and the agency can fund the program within the account total.

OMB notes that the CR provides limited authority (in Section 112) to mitigate civilian furloughs during the CR period   Apportionments for civilian personnel compensation and benefits can be apportioned at an “accelerated rate.”  However, OMB advises that agencies must receive written pre-approval to receive a higher rate, but expects few if any written apportionments using this authority.

The OMB memo addresses specific CR issues of interest in a “Frequently Asked Questions” format in Attachment A of the memo. 

Cost of U.S. military operations against ISIL is increasing

Tuesday, September 30th, 2014

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The cost of military operations in Iraq and Syria to combat the Islamic State of Iraq and the Levant (ISIL) is growing as Department of Defense (DoD) operations continue and expand.

The Pentagon announced a few weeks ago that the cost of the operations in Iraq were averaging $7.5 million dollars per day. Since then the air operations have been expanded to include strikes against ISIL forces in Syria and costs have increased. The U.S. and its partners have conducted 43 air strikes against ISIL forces in Syria, according to Hagel.

Last week, in a news conference Defense Secretary Hagel said the cost of DoD’s operations is now running between $7 and $10 million per day. A study prepared by the Center for Strategic and Budgetary Assessment (CSBA) estimated that DoD spent between $780 and $930 million through September 24.

Secretary Hagel stressed that the costs for these operations are being funded from the Overseas Contingency Operations (OCO) appropriations provided by Congress for FY2015.

Hagel also underscored that the U.S. is not acting alone in this effort. “A broad coalition has been and will continue to be a cornerstone of our strategy against ISI, he said.

But, he warned, the “diplomatic economic and military campaign will require a long-term commitment from the United States and all of our partners and allies.” “We are at the beginning, not the end of our effort to degrade and destroy ISIL” he cautioned. And, he said, the costs of ongoing operations will “require additional funding from Congress.” He said the administration is working with Congress to determine the source of this funding.

Some members of Congress have been calling for hearings to assess the cost as well as a debate on the goals and strategy underlying military operations against ISIL. However, the full Congress does not return until after the November elections so these hearings and congressional debate will probably not happen until mid-November.

DoD issues Better Buying Power 3.0 draft

Thursday, September 25th, 2014

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The Department of Defense (DoD) released a draft of Better Buying Power (BPP) 3.0, the latest step in DoD’s continuing effort to improve its acquisition process.

Frank Kendall, DoD’s Under Secretary of Defense for Acquisition, Technology, and Logistics, made the announcement at the Center for Strategic and International Studies (CSIS), a prominent think tank headed by John J. Hamre, former Deputy Secretary of Defense and DoD Comptroller.

Kendall warned that in the current security environment “our technical superiority is at risk, because we are not making the investment we should be making,” He implied the required cuts to DoD funding (sequestration) are a primary threat to continued technological dominance.

A DoD white paper on BBP 3.0 accompanying the announcement emphasized that the new version does not abandon earlier versions. BBP 1.0 stressed best practices and 2.0 emphasized critical thinking skills and better tools for the decisionmakers.

Many initiatives from 1.0 and 2.0 are “core” concepts of acquisition reform, the paper stressed. Affordability constraints, should-cost management, using data to inform policy development, and competition remain central to acquisition improvement. Along with a summary of BBP 3.0, the paper includes a status of the BBP 2.0 initiatives.

In describing BBP 3.0, Kendall said the new version “emphasizes innovation and technical excellence” and remains true to the concept of continual improvement in acquisition management.

BBP 3.0 is designed to strengthen the capabilities and “professionalism” of the acquisition workforce, Kendall said. It will stress better working relationships with industry by incentivizing innovation and removing barriers, but will still emphasize controlling total lifecycle costs, he added.

In his presentation, Kendal laid out eight focus areas for achieving dominant capabilities: Achieve affordable programs; Achieve dominant capabilities while controlling costs; Incentivize productivity in industry and government; Incentivize innovation in industry and government; Eliminate unproductive processes and bureaucracy; Promote effective competition; Improve tradecraft in acquisition of services; and Improve the professionalism of the acquisition workforce. Some of these areas are “core” initiatives from earlier versions, some are expanded, and some are new. These areas contains over 30 initiatives.

Kendall stressed that BBP 3.0 wants to stimulate research through programs to incentivize innovation. As described in the white paper, DoD is striving to increase the use of prototyping and experimentation to allow the exploration of innovative operational concepts, emphasize technology insertion to keep up with the pace of technology in certain areas, such as digital processing, and use modular open systems to stimulate innovation. DoD also wants to increase the return on Small Business Innovation Research (SBIR) and provide clear definitions of “best value” to allow industry to make better bids and enable DoD to make wiser decisions.

In the next three months, DoD will consult with industry, academia, Congress, customers, and other stakeholders on the BBP 3.0 draft. The final version should be released in January 2015, Kendall said.

More detailed information is available on the Better Buying Power program website.

President signs FY2015 Continuing Resolution funding government through Dec 11

Tuesday, September 23rd, 2014

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The president signed a FY2015 Continuing Resolution (CR)—H.J. Res 124—that will fund the government through December 11, 2014. The House passed the CR (319-108) last Wednesday and the Senate approved it (78-22) on Thursday, 78-22.

After the Senate passed CR, Senate Appropriations Committee (SAC) chair Sen. Barbara Mikulski (D-MD) said the goal of the CR “is to lay the groundwork for an omnibus funding bill in December that will include all 12 appropriations bills.” Mikulski said she supported the bill because it avoided a government shutdown, does not harm existing important programs, provides funding for the nation’s security, and will allow Congress time to negotiate an omnibus appropriations bill.

The bill sets the discretionary funding level for the federal government during CR period at an annual rate of $1.012 trillion.

Final action on the CR came after agreement was reached on a proposal to authorize the training and arming of Syrian rebels fighting Islamic State of Iraq and the Levant (ISIL) forces. The bill allows the Department of Defense (DoD) to reprogram funds provided to DoD in the CR to support this action.

The bill also extends expiring Department of Defense (DoD) activities, such as counterdrug activities and support of the Office of Security Cooperation in Iraq, and provides State Department funding to counter regional aggression toward Ukraine. Additional Veterans Affairs funding is included to process disability claims and to investigate improper conduct, and the Customs and Border Protection receives funding flexibility to address urgent problems. The bill also includes $88 million requested by the administration to address the Ebola crisis, extends the operating authority of the Export-Import Bank through June 30, 2015 and extends the Internet Tax Freedom Act through Dec 11, 2014.

After passing the CR, the House and Senate adjourned for the November mid-term elections. The Senate may convene in October to conduct some business, but the full Congress will not return until after Veterans Day (Nov. 11). At that time Congress will begin a lame duck session to address unfinished business, including the passage of FY2015 appropriations.

To date the House has only passed seven FY2015 appropriations bills while the Senate has passed none. Congress will have less than one month to reach agreement on the details of all 12 appropriations bills, put them together in an omnibus bill, and get it to the president by December 11th. If Congress does not meet this deadline it will have to pass another CR to avert a government shutdown.

House passes Continuing Resolution to keep government running until December 11

Wednesday, September 17th, 2014

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Today, the House passed (319-108) a FY2015 Continuing Resolution (CR), H.J. Res 124, which would fund the federal government until December 11. The bill sets the discretionary funding level for the federal government during CR period at an annual rate of $1.012 trillion.

The House passed the CR after debating and approving (273-156) an amendment that would authorize support (training and arming) for Syrian rebels fighting Islamic State of Iraq and the Levant (ISIL) forces. “This amendment is of great importance to our national security, and attaching it to this Continuing Resolution will allow its enactment within a swift timeframe,” said House Appropriations Committee chair Rep. Hal Rogers (R-KY).

A CR is necessary because less than two weeks remain until the beginning of FY2015 and Congress has not passed any of the 12 appropriations bills. The House has passed seven appropriations bills (including DoD and Military Construction/VA) and approved another four through the full House Appropriations Committee (the HAC has not approved the Labor, HHS bill). The full Senate has not considered a single appropriations bill and the Senate Appropriations Committee (SAC) has approved only eight bills (including DoD and Military Construction/VA).

The CR “is merely a temporary, Band-Aid funding measure,” Rogers said. But, he stressed, now it is “the most clear path forward—allowing time to draft bicameral pieces of legislation that reflect our real and budgetary requirements.” Final action on FY2015 appropriations bills will have to occur in a lame duck session of Congress after the November mid-term elections. That session is expected to begin right after Veterans Day.

Other than the amendment to authorize support for the Syrian rebels, the House CR is relatively clean of controversial extraneous matters. But, it does include a number of provisions that the Appropriations Committee described as necessary” to prevent catastrophic, irreversible, or detrimental changes to government programs, to address current national or global crises, or to ensure good government.”

The bill would extend expiring Department of Defense (DoD) activities, such as counterdrug activities and support of the Office of Security Cooperation in Iraq, and provide State Department funding to counter regional aggression toward Ukraine. Additional Veterans Affairs funding is included to process disability claims and to investigate improper conduct and the Customs and Border Protection would receive funding flexibility to address urgent problems. The bill also includes funding $88 million) requested by the administration to address the Ebola crisis.

Addressing two issues that Congress is currently debating, the House CR includes funds to extend the operating authority of the Export Import Bank through June 30, 2015 and to extend the Internet Tax Freedom Act through Dec 11, 2014.

Under the CR, agencies cannot start any new programs or increase production rates and could not initiate any multiyear procurements during the CR period.

The Senate is expected to consider the CR over the next week.  

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