Congress is aiming toward sweeping changes to the Defense Department’s acquisition apparatus in this year’s version of a long-negotiated Defense authorization bill that’s likely to see a floor vote later this week.
Changes to DoD’s organizational structure are just one element of the 2017 National Defense Authorization Act, which also includes an increase in Defense funds compared to the President’s request, higher military end-strength numbers, an increase in the annual military pay raise and reforms to TRICARE.
The bill would eliminate the position of undersecretary of defense for acquisition, technology and logistics. That post is considered one of the most powerful in the department; it is responsible for more than $160 billion in procurement and research funds and is currently held by Frank Kendall.
The bill splits Kendall’s job into two positions.
DoD “will essentially have similar to what the Senate version of the bill proposed: an undersecretary focused on research and engineering and another undersecretary focused on acquisition and support, which would be the chief acquisition officer,” a senior Armed Services Committee aide speaking on background told reporters Nov. 29.
If the bill makes it to law, DoD will have one year to comply.
“We have a whole other legislative cycle to make changes if necessary,” another aide said. “How many corporations in the world actually have the acquisition and the engineering folded in under one organization? The answer is none, actually. The reason is because they are two different skill sets, two different culture characters between engineering and acquisition. The attempt here was … to spur innovation and things like that.”
The research and engineering position builds on and updates “a once-powerful position that helped to lead the development of stealth, precision guided munitions and other advanced capabilities as part of the so-called ‘Second Offset’ strategy during the Cold War,” a May Senate Armed Services Committee release stated.
The acquisition and support function would handle more of the everyday business side of acquisition. The office would be a line office that helped run defense agencies that perform critical business operations.
Funding and readiness
The bill authorizes $618.7 billion in defense spending for 2017, about $35 billion more than what the President requested.
Part of that $618.7 billion is about $68 billion in overseas contingency operations (OCO) funds. That money is supposed to be used for wartime spending. However, Congress and the President slipped base budget spending into the account this year and in prior years.
The 2017 bill uses $8.3 billion in OCO spending to pay for base budget items. About $3.2 billion of that money was not asked for by the President and goes to increasing troop levels and increasing military pay by 2.1 percent.
The bill increases the end strength of the active-duty Army to 476,000. The Army currently stands at 475,000, but was scheduled to be reduced to 460,000 by the end of 2017.
The Air Force is getting an active duty increase to 321,000, an increase of 4,000, and the Marine Corps is authorized to bump up to about 18,500, and increase of 3,000. The Navy’s end strength is set at about 324,000.
Congress plans to bring the bill to the House floor by Friday, where it will only need a majority to pass. However, there is still the threat of a veto from President Barack Obama.
“The 3.2 [billion] not answered on the nondefense side is the only obvious provision” that would lead to a veto, said one aide.
The Obama administration, along with most Democrats, has called for an increase in funds for domestic spending to coincide with any increase in defense spending above the spending caps set by the 2015 budget deal.
That stipulation led to the NDAA nearly not being passed last year after it was vetoed.
The White House disapproved of multiple provisions in the bill though, including the acquisition undersecretary split, the military pay raise and end strength increases.
One other area of major reform is in TRICARE. The bill will require new premiums and copays from military retirees and their beneficiaries.
That’s a step back from the House version of the bill, which required fees from active-duty military family members.
The bill still keeps extensions of care that will cost the military health system more money. It expands urgent care access by eliminating referrals and keeps urgent care clinics open until 11 p.m.
It also standardizes appointment scheduling and first-call resolution when contacting clinics.
Expanding benefits while taking in less money leaves a larger debt for future defense budgets.
A Congressional Budget Office report stated DoD spent $52 billion in health care for service members, retirees and their families in 2012.
“The cost of providing that care has increased rapidly as a share of the defense budget over the past decade, outpacing growth in the economy, growth in per capita health care spending in the United States and growth in funding for DoD’s base budget,” the report states.
The cost of providing health care to military and their families rose 130 percent from 2000 to 2012, the report states.
The report stated expanded benefits, medical costs of wars and the increased use of TRICARE are all causes of the cost increase.
Senate Armed Services Personnel Subcommittee Chairman Lindsey Graham (R-S.C.) said if Congress doesn’t reform military health care, in about 20 years 18 percent of the defense budget will be military health care related.
“That’s an unsustainable path. We are trying to create sustainability, higher quality, better access and quite frankly expand the services,” Graham said.
The NDAA would also elevate U.S. Cyber Command to a full combatant command. The move is something lawmakers and DoD haveconsidered for a few years.
With the increased emphasis on cyber, CYBERCOM is becoming more indispensable to the Pentagon.
CYBERCOM got its first wartime assignment this year.
“What that means is interrupting [the Islamic State’s] ability to command and control their forces, their ability to plot against us or our friends and allies, interrupting their ability to pay people. All of those things are things we can do through cyber, but all of those things are happening in U.S. Central Command, the geographic combatant command. That makes things more complicated, because we’re increasingly finding that our problems cross geographical boundaries and the functional boundaries we have now,” Defense Secretary Ash Carter said earlier this year.
Most of CYBERCOM’s growth, to-date, has come through the three types of offensive and defensive teams the military services have been building on its behalf since 2013.
Eventually, there will be 133 such teams made up of 6,200 people. As of now, 123 are in place, although only 27 have reached full operational capability. Another 68 have been deemed to have attained initial operating capability.
The command is aiming for a workforce made up of about 80 percent uniformed military and 20 percent civilian.