Continuing resolution would ruin DoD modernization plans

The Defense Department’s top budget futures official continued the Pentagon’s campaign against a possible long-term continuing resolution to keep the government funded.

Cost Assessment and Program Evaluation (CAPE) Director Jamie Morin said during a Sept. 17 speech at the Atlantic Council that a continuing resolution (CR) would seriously jeopardize DoD modernization efforts.

“The President asked for a $38 billion increase in Defense resources in 2016 over what we had in 2015.  A CR gives us none of that,” Morin said. “Those additive resources were overwhelmingly focused in getting our modernization back on track.”

Modernization previously bore the burden of sequestration cuts in DoD because personnel forces cannot be quickly and radically changed, and the cost to maintain the force has limited wiggle room.

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DoD’s modernization plans invest in cyber, electronic warfare, space, under sea, nuclear deterrence and guided munitions.

Defense officials said those are areas in dire need of funds, research, personnel and development, considering America’s greatest rivals have been growing and operating in those areas.

Both China and Russia have started their nuclear modernization programs. This summer China allegedly hacked the Office of Personnel Management, compromising 22 million federal workers, and Russia is actively ignoring the terms of the New START treaty.

Morin said “gimmicks” such as the overseas contingency operations (OCO) funds are also detrimental to Defense planning. OCO is a separate, year-by-year fund originally created to finance emergency operations and is not subject to sequestration caps. However, as Congress has grasped for ways to avoid sequestration, dollars for things that were traditionally in the base budget like operations and maintenance have leaked over into OCO.

“OCO … is the wrong answer for the country. I’m speaking here as the programmer for the Department of Defense. My job is to look five years into the future and look at the force that we will produce with resources over those five years and what it would mean for the next 30 or so years,” Morin said. “One-year patches don’t let us get after the sort of investments we need and particularly in modernization programs in order to create a dominant joint force.”

On Sept. 16, Defense Secretary Ash Carter said he already was planning on doubling down on modernization investments for fiscal 2017.

Congress, however, still has to figure out the 2016 budget by the end of the month or risk a government shutdown. Lawmakers also need to reach a deal to pass the current budget and avoid or raise the sequestration caps to accommodate the Defense budget. If it doesn’t fix sequestration, the modernization funds would be erased by sequestration, DoD officials said.

The other option is to pass a CR, which will keep funds at 2015 levels. The legislature has the option of passing a short-term CR until it can come to a deal or a long-term CR that could last until next October.

Morin asks for good cost data from industry

As DoD is worried about its budget, Morin asked industry to help keep programs on track by providing good cost data.

Cost data analysis collects information on the development and production costs incurred by contractors in performing DoD acquisition contracts.

Morin said in the 1990s DoD significantly reduced its cost data, going from about 1,200 cost reports a year in the 1980s to less than 200 by the end of the 1990s.

“We found when we were trying to start new programs in the 2000s that we didn’t have the analytic foundation on which to assess what they would cost and whether they were likely to deliver,” Morin said. “I don’t think it’s a surprise in that circumstance that we ended up with program after program that flamed out.”

DoD has rebuilt its cost data system, but Morin said collecting cost data is always tenuous. Morin said working with industry cost data can be more effective by creating a common operating picture.