Senate defense bill lays out acquisition reforms

The Senate’s version of the $612 billion 2016 defense authorization bill that cleared committee on Thursday treats shortfalls in the acquisition system as a national security threat while pressuring the Pentagon to accelerate planned reductions in headquarters personnel.

US Congress“This is a reform bill,” said Senate Armed Services Committee Chairman John McCain, R-Ariz. “It tackles acquisition reform, military retirement reform, personnel reform, headquarters and management reform. This legislation delivers sweeping defense reforms that rise to the challenges of a more dangerous world. We identified $10 billion of excess and unnecessary spending from the defense budget, and we are reinvesting it in military capabilities for our warfighters and reforms that can yield long-term savings for the Department of Defense.”

The headquarters staff cuts and purchasing reforms differ slightly from the House version of the bill, which passed that chamber on Friday, May 15, 2015.

“An acquisition system that takes too long and costs too much is leading to the erosion of America’s defense technological advantage, which the United States will lose altogether if the department continues with business as usual. In short, our broken defense acquisition system is a clear and present danger to the national security of the United States,” a committee summary said.

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Top Army contracting official says oversight is too burdensome to promote cutting edge technology

The Defense Department acquisition process has become burdensome, leaving the Army behind in technology development, said Heidi Shyu, assistant secretary of the Army for acquisition, logistics and technology at an April 21 Center for Strategic and International Studies event.

Heidi Shyu,  Assistant Secretary of the Army for Acquisition, Logistics, and Technology
Heidi Shyu, Assistant Secretary of the Army for Acquisition, Logistics, and Technology

Since 2011, the Army research, development and acquisition account declined at a rate twice as fast the Army budget declined, Shyu said. RDA makes up 18 percent of Army topline budget. That’s $23.1 billion of the total $126.5 billion budget. About four years ago, RDA made up 23 percent of the topline, Shyu said.

“We’ve definitely taken our hit,” she said.

But even with that, the DoD and Congress could do more to help promote development of the most advanced technology, Shyu said.

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What military contractors can learn from the Pentagon’s 2016 budget

From the outside, the Pentagon’s budget looks relatively similar that the plan the Defense Department laid out one year ago. But upon closer inspection, President Barack Obama’s budget request gives a glimpse into how the military will look decades from now.

A number of new research-and-development projects could lead to major, multibillion weapon programs down the road. As such, defense firms are paying close attention to these projects.

“This budget does show some priorities,” said Roman Schweizer, an analyst with Guggenheim Securities.

DOD is looking to the latter part of this decade as a time to get back to basics and invest for the future.

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DoD’s FY16 budget could lead to increased contracting activity

The Department of Defense (DoD) will be asking for a budget of $585 billion for fiscal year 2016, according to a draft Pentagon comptroller document obtained by Politico.  This amount represents $38 billion more than the budget which DoD has been operating under as a result of sequestration.

In order for DoD’s budget amount to be approved, Congress will need to agree to suspend or discontinue sequestration.  DoD’s five-year budget plans call for ramping up base defense spending to $570 billion in 2020.

According to the draft budget documents, DoD will request $209.8 billion in funding for operations and maintenance, an increase of $14.5 billion from this fiscal year.  The proposal would also increase procurement spending by $14.1 billion to $107.7 billion, and research and development funding by $6.3 billion to $69.8 billion.

Among the projects included in the Pentagon’s draft FY16 budget are:

  • Three new Littoral Combat Ships (LCS),
  • LCS capabilities improvements,
  • Two Virginia-class attack submarines,
  • Refueling of the USS George Washington aircraft carrier,
  • The Ohio-class replacement nuclear submarine program,
  • The KC-46A tanker program,
  • A new long-range bomber,
  • The MQ-9 Reaper procurement, and
  • 57 F-35 fighter jets.


Pentagon seeks $60 billion increase for FY16 budget

As the White House and Pentagon pass drafts of the fiscal 2016 defense budget back and forth before submitting it to Congress early next year, the base budget request possibly could exceed Congressionally-mandated spending caps by as much as $60 billion, according to a former defense official with knowledge of the discussions.

Administration and defense officials have said for months that the 2011 Budget Control Act (BCA), which limits how much the Pentagon can spend, wouldn’t fully constrain the 2016 request. But a source with knowledge of a meeting between President Barack Obama and the Joint Chiefs of Staff said the chiefs have pushed for an increase of $60 billion over the $535 billion cap for defense, with another $10 billion for Department of Energy programs.

While the number might appear high, Pentagon and administration plans to push past the cap are no surprise.

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