Inside the DoD Reporter's Notebook: NDAA takes shape, DoD's budget plans under sequestration

Friday - 5/2/2014, 6:46pm EDT

"Inside the DoD's Reporter's Notebook" is biweekly feature focused on news about the Defense Department and defense community as gathered by Federal News Radio DoD Reporter Jared Serbu.

Submit your ideas, suggestions and news tips to Jared via email.


House's lawmakers likely to rebuff many of DoD's plans

Next Wednesday morning marks the start of the House's annual marathon of Defense legislating: the full committee markup of the National Defense Authorization Act (NDAA). We haven't yet seen the main foundational bill (known as the "chairman's mark") that the Armed Services Committee will be debating and amending, but it's already clear that the committee is poised to reject a large proportion of the cost-saving ideas DoD wants to implement as coping mechanisms under sequestration.

In their markups of the chunks of the NDAA over which they hold jurisdiction, the six HASC subcommittees took several jabs at the department's proposals.

For instance, on Wednesday, the personnel subcommittee snubbed most of the elements of DoD's package to save $2.1 billion in military compensation costs. Members approved language that would turn back the department's request to consolidate the TRICARE system and increase retiree premiums, blocked most of DoD's proposed cut to the commissary system and declined to allow cutbacks in service members' housing allowances.

"Congress established the Military Compensation and Retirement Modernization Commission and we need to be informed of their analysis before proceeding with wide impacting changes," Rep. Joe Wilson (R-S.C.), the subcommittee chairman, said.

With regard to DoD's request for permission to do another round of base realignments and closures (BRAC), lawmakers already have made it known in hearings this year that they had no interest in authorizing another BRAC, but the readiness subcommittee went a step further, adding language that expressly condemns another round.

DoD's budget plan also made clear that if sequestration stays in place beyond 2015, it would have to cancel plans to refuel and overhaul the aircraft carrier U.S.S. George Washington, and retire the ship instead. But the seapower and projection forces subcommittee inserted language to force DoD's hand, withholding funds from the Office of the Secretary of Defense until the department obligates more than $700 million to keep Washington in service.

The chairman's mark next week is expected to include language dealing with several other of DoD's cost-saving ideas, such as the Navy's "lay-up" plan for several of its cruisers, but Rep. Adam Smith (D-Wash.), the Armed Services Committee's ranking member, said we shouldn't expect next week's final product to acquiesce to many of DoD's cost reductions.

"I don't know that Democrats are being any less parochial than Republicans are at this point," he said Thursday at a Capitol Hill forum hosted by the Center for Strategic and Budgetary Assessments. "I think most of the amendments you'll see will be efforts to save one program or another, not to find budget savings."

Smith, like most HASC members, thinks sequestration was monumentally stupid and destructive to both the Defense and non-defense sides of government, but he takes the view that since there are very few conceivable political paths to getting rid of it, it's time for Congress to devote its energy toward finding ways to create a military that can live within the budget caps.

Instead, he said, Capitol Hill's most ardent Defense supporters are making DoD's problems much worse by forcing the continuation of programs it won't be able to fund.

Defense officials have made a similar point as they rolled out their budget submission this year. They say they designed many of this year's proposed cuts in such a way that they'll bring year-over-year compounding savings in 2016 and beyond, when sequestration will have taken full effect. So even if lawmakers find ways to hang onto their favorite programs in 2015 while staying under this year's more modest caps, they'll be blowing a much bigger hole in the following years' budgets.

"We're battling over a little bit of money here and a little bit of money there in order to get through 2015, but we're creating a big bow wave," Smith said. "People are saying, for instance, 'If we can just find $400 million, we can save the A-10.' That's a daunting challenge, but it's also not realistic, because if we save the A-10 this year, it's going to cost us $3.5 billion in the four years after that. The same is true with the personnel costs. The FY15 savings are relatively small, but it's $2 billion over five years. We're painting ourselves into a corner, and we're going to run out of floor space at some point."

Just so I'm not accused of making too much out of the first step in what will be a long legislative process, it's worth noting that the language the HASC subcommittees passed this week still will be subject to amendment in the full committee next week, and the bill they end up passing will be further debated on the House floor (where Smith intends to force a vote on BRAC, by the way).

The Senate will need to undertake its own parallel NDAA markup process, which usually happens much later in the year and under the cover of closed-door markups, not because there's much classified material being discussed, but because the Senate likes it that way.

With that caveat, a few other interesting items from this week's subcommittee markups on the House side:

  • In the 2012 version of the NDAA, Congress told DoD to develop a strategy to transition to cloud computing, using commercially-provided cloud services as much as possible. But the subcommittee on emerging threats, capabilities and intelligence believes the department is moving too slowly. Its contribution to this year's bill would order an outside assessment of DoD's cloud posture, including whether it's biased toward using government cloud services instead of commercial ones, whether it's clearly articulated its cloud brokerage and security procedures to industry, and whether commercial cloud services are being built into DoD's forthcoming Joint Information Environment (JIE).

  • Speaking of the JIE, the subcommittee also believes the way DoD's building the elements of that future shared IT infrastructure has resulted in "decisions made for expediency over competition." So it's ordering a DoD inspector general review into whether the department is "overly reliant on sole source, brand name or other contract types that bypass competition requirements" in its pursuit of IT commonality.

  • DoD's constant mantra with regard to JIE is that it's not a program of record. But the subcommittee is concerned that the department can't describe what it is instead, including which existing programs are going to be affected by the new architecture. So the legislation orders the DoD CIO to come up with a briefing that identifies all the funded programs across the military services that contribute to the JIE, along with a five-year master schedule with milestones and funding for each of the programs.

  • The subcommittee takes a similar view toward Air Force cyber spending. It believes that service's cyber workforce is so disaggregated across so many projects that it's impossible to track the entirety of its investments or manage the workforce in a coherent fashion. So it's ordering up a report that identifies all of the Air Force's aggregate spending on cyber and how its programs integrate with U.S. Cyber Command and the rest of DoD.

  • While the personnel subcommittee blocked most of DoD's proposals to reduce compensation spending, it did order the department to conduct an anonymous survey of service members to determine which forms of compensation they most value relative to one another — ostensibly to help guide future decisions about personnel spending. Our friends at CSBA conducted a nearly-identical study as a proof of concept two years ago, and found some surprising results.

  • The readiness subcommittee gave some help to DARPA and its pursuit to constantly recruit new talent. The agency has been using some "temporary" authorities that give it a free hand to hire up to 60 scientists every year outside the normal pay and personnel rules that govern most federal employees. The language makes those authorities permanent, but doesn't expand the cap beyond 60, something DARPA's director, Arati Prabhakar says she'd like. She told the Senate Armed Services Committee last month that the agency is consistently using each of those authorized slots each year.


The Pentagon's view of the impacts of sequestration beyond 2016

One more note on the DoD budget and sequestration: The Pentagon's current five-year budget asks for $115 billion more than sequestration allows, but last week, DoD sent Congress a report which detailed the actions the department would have to take if it doesn't get what it's asking for and the spending caps stay in place.

The contents of the report have been well reported in other media outlets, but it's worth pointing out that the worst-case picture DoD painted almost was entirely about military hardware and force structure. As mentioned above, the Navy would have 10 carriers instead of 11. The Air Force would have to eliminate its fleet of KC-10 refueling aircraft, and the Army would reduce its number of active duty soldiers from 450,000 to 420,000, to take just a few examples.

But the report almost is entirely silent on any reductions DoD would have to make to its civilian and contractor workforces - two areas of the budget that have grown the most over the last decade. It's difficult to imagine that full sequestration wouldn't impact defense employment, and it's also difficult to understand why DoD didn't put that issue front and center in its presentation to Congress.


DoD to reward its best suppliers

The Pentagon's Better Buying Power program first started four years ago. Many of its ideas have been revised since then in Better Buying Power 2.0, and more revisions are coming in a 3.0 version.

But one idea that's been around since the outset and never really got off the ground was the idea of creating a "superior supplier program." It was outlined at the time as a way to create some sort of advantage in the acquisition process for contractors with a consistent history of good performance. It's a complicated notion to implement in a government acquisition structure that's supposed to be biased toward the idea of full and open competition wherever possible, but DoD thinks they've finally got the basic underpinnings worked out, based on pilot programs the Navy has been working on.

In written testimony to the Senate Armed Services Committee this week, Frank Kendall, the undersecretary of defense for acquisition, logistics and technology said the superior supplier program should be up and running DoDwide within the next year.

He didn't specify exactly how the final program will work, but under the Navy construct, vendors are divided into three tiers, based on past performance data in the government's Contractor Performance Assessment Rating System (CPARS).

Under the Navy program, the top third of the performers get a chance to propose ways to reduce costs to the acquisition system. It's unclear if DoD will add any other rewards in the final, militarywide system.

OUT & ABOUT

  • The first C4SIR & Networks conference is scheduled over two days beginning Monday in Arlington, Virginia. Speakers include Navy CIO Terry Halvorsen, Army deputy CIO Mike Krieger, Brig. Gen. Brian Dravis, the director of the JIE Technical Synchronization Office (JTSO) at the Defense Information Systems Agency, and many more high ranking officials.

  • The Senate Armed Services Committee kicks off its week on Tuesday with a hearing on military compensation featuring Gen. Martin Dempsey and the other top ranking uniformed military personnel from the services and reserves.

  • The House Armed Services gets started with the aforementioned NDAA markup on Wednesday and expect a series of marathon sessions.

RELATED STORIES:

DoD's 2014 budget: Fewer civilians, higher retiree health fees

DoD plots third chapter in Better Buying Power initiative

On DoD: Pentagon's JIE moves from planning to implementation

More Inside the DoD Reporter's Notebook:

April 18 -- Inside the DoD Reporter's Notebook: Too many $31 staplers in DoD, NGA turns to open source

April 4 -- Inside the DoD Reporter's Notebook: Pentagon goes its own way on GSA schedules; VA still thinks its electronic health record can meet DoD's needs

March 10 -- Inside the DoD Reporter's Notebook: DoD's even-more-complicated-than-usual budget request