spending | The Contracting Education Academy

February 27, 2020 By cs

New NDIA study gives defense industrial base health a ‘C’ grade

A new battery of tests that aims to assess the overall health of the defense industrial base over time reported a barely-passing “C” grade in the inaugural edition, issued earlier this month.

The report card — dubbed “Vital Signs” by analysts at the National Defense Industrial Association and Govini — is partly a follow-on response to a first-of-its-kind report the Pentagon issued in 2018. That assessment showed some worrisome signs about the defense industry, but was a snapshot in time. NDIA officials said policymakers need a more repeatable deep-dive to understand the key problems on an ongoing basis.

From a Wall Street perspective, the industry is in very good shape. Publicly-traded companies in the sector are profitable, and have historically-high amounts of cash on hand even though they’re spending heavily on new plants and equipment. On a scale of 0 to 100, the NDIA report scores those measures — collectively called “competition” — at 96.

But that category is only one of eight in the report, and the picture is less rosy in many of the others.

Keep reading this article at: https://federalnewsnetwork.com/defense-main/2020/02/new-ndia-study-gives-defense-industrial-base-health-a-c-grade/

November 1, 2019 By cs

As secret Pentagon spending rises, Defense firms cash in

Classified spending has edged up faster than overall defense budget requests, and accounts for nearly 11 percent of the $716 billion proposed for 2020.

The share of Pentagon spending hidden from public view is rising, as are defense contractors’ revenues from it.

The U.S. Defense Department’s overall budget request increased nearly 5 percent from 2019 to 2020, but classified spending rose 6 percent, according to the consulting firm Avascent. It accounts for about $76 billion, or almost 11%, of the $718 billion requested for the current fiscal year.

Military officials say they can’t talk about classified aircraft, space, and missile projects, lest they cede advantage to America’s enemies. (Critics, including House Armed Services Committee Chair Adam Smith, D-Wash., say excessive hidden spending hinders oversight, leads to waste, and undermines public trust.)

But there is one group of people talking about classified spending: the executives of America’s largest defense firms. In recent months, what defense contractors call “restricted” projects have become a hot topic on quarterly earnings calls with Wall Street analysts. Firms also tout the increase in classified contracts in annual reports and regulatory filings.

Keep reading this article at: https://www.govexec.com/technology/2019/10/secret-pentagon-spending-rises-defense-firms-cash/160818/

October 28, 2019 By cs

Congress mulls spring continuing resolution to avoid government shutdown

With impeachment proceedings looming and budget talks stalling, Congress will likely need a stopgap spending measure for February or March, the Senate’s top appropriator said last Thursday.

A continuing resolution, or CR, would avoid a government shutdown when the last funding patch expires Nov. 21, just before Congress takes its Thanksgiving recess.

Senate Appropriations Committee Chairman Richard Shelby, R-Ala., said that if the House passes a resolution to impeach President Donald Trump, it will indefinitely dominate the the Senate’s business, forestalling budget talks.

“It takes a lot of oxygen out of the air, and some business is transacted, but it will slow everything down,” Shelby told reporters, adding that a continuing resolution could be needed into February or March.

The Senate last week voted to advance the a package of fiscal 2020 domestic spending bills passed by the House, which would include nearly one-third of all nondefense discretionary spending. The Senate is set to resume consideration of the package today.

That package excludes Department of Defense appropriations, which has been snagged in a fight over border wall funding. Democrats are likely to withhold support for defense spending until a larger spending deal is reached.

Keep reading this article at: https://www.defensenews.com/congress/2019/10/25/congress-mulls-spring-cr-to-avoid-government-shutdown/

October 28, 2019 By cs

How ‘night court’ will impact the Pentagon’s acquisition office

When U.S. Defense Secretary Mark Esper launched a review this summer of the departmentwide offices known as the “fourth estate,” he made it clear that everything, including cuts to programs and personnel, were on the table.

Two months into that review, clear themes have emerged, according to Pentagon acquisition head Ellen Lord: Esper isn’t looking to cut just to cut, and if offices aren’t tied directly into war-fighting needs, they may no longer belong in the Department of Defense.

Speaking on a panel at the Association of the U.S. Army’s annual conference last Monday, Lord said several of her offices, including the Defense Threat Reduction Agency and the Defense Acquisition University, have gone through the review process.

“What we’ve seen there is more, perhaps, a pushing back of certain functions to either services or to intel,” Lord said. “Where I’ve seen a question of actually cutting the workforce is non-true DoD missions. As we’ve gone through a lot of the different areas, if it isn’t war fighting, if it’s something that one of the other agencies or the other departments across government has asked us to do, or if it’s something that should be a function of another department because it’s not about lethality, it will get cut.”

Keep reading this article at: https://www.defensenews.com/digital-show-dailies/ausa/2019/10/15/how-night-court-will-impact-the-pentagons-acquisition-office

August 19, 2019 By AMK

Money spent through OTAs surges to more than $4 billion

Other Transaction Agreements are an increasingly popular contracting tool, and they’re affecting overall government contracting numbers.

OTA purchases across the government surged from $2.3 billion in fiscal 2017 to over $4 billion in fiscal 2018.

The numbers come from the BGOV200, an annual ranking of the top 200 federal contractors created by Bloomberg Government.

“While multiple-award contracting is expected to dominate spending for years to come, agencies are also leveraging new acquisition methods to buy goods and services more quickly and easily in ways they haven’t before,” the report states.

The OTA authority, which was expanded by the 2016 National Defense Authorization Act, allows agencies to sidestep the Federal Acquisition Regulation and work with innovative, small companies that don’t normally do business with the government.

Keep reading this article at: https://www.fedscoop.com/otas-contracting-fiscal-2018-bgov/

A new battery of tests that aims to assess the overall health of the defense industrial base over time reported a barely-passing “C” grade in the inaugural edition, issued earlier this month.

Classified spending has edged up faster than overall defense budget requests, and accounts for nearly 11 percent of the $716 billion proposed for 2020.

With impeachment proceedings looming and budget talks stalling, Congress will likely need a stopgap spending measure for February or March, the Senate’s top appropriator said last Thursday.

When U.S. Defense Secretary Mark Esper launched a review this summer of the departmentwide offices known as the “fourth estate,” he made it clear that everything, including cuts to programs and personnel, were on the table.

Other Transaction Agreements are an increasingly popular contracting tool, and they’re affecting overall government contracting numbers.

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