NDAA busts budget caps with $626 billion for defense

Lawmakers are authorizing a budget nearly $80 billion above the sequestration caps.

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An authorization for a nearly $700 billion defense budget, a new commercial marketplace for the Pentagon to buy from and a bigger military end strength may become a reality as the House and Senate finished negotiations of the 2018 defense authorization bill this week.

The bill will now go to the House and Senate for amendments and passage before being signed into law by the president.

The bill includes $692.1 billion for defense; $8 billion from other committees will likely be added to that number, House and Senate Armed Services Committee aides said Nov. 8.

House and Senate Armed Services Committee conference participants OK’d $626.4 billion of that money for the Defense Department’s base budget. The authorization is well over the $549 billion caps mandated by the Budget Control Act. The other $65.7 billion is placed into an emergency war fund, which is not subject to sequestration caps.

The annual marquee defense policy bill only sets markers for what funds will actually be allocated to DoD, and differs greatly from what the current budget resolution gives the Pentagon. That resolution sticks to the budget caps.

End strength

Since the election of President Donald Trump in November, Congress has been trying to increase the end strength of the military and the services have happily obliged.

The Army says it’s stretched thin with its deployments and the Air Force is low on pilots and aircraft maintainers.

The 2018 authorization bill gives the active duty Army 7,500 more soldiers, pushing the end strength to 484,500.

The Air Force receives the second biggest bump of 4,100 airmen. This is the second year in a row the service will have a 4,000 person increase. The new Air Force end strength will settle at 329,000.

The bill also gives the Navy 4,000 more active duty sailors, raising its number to about 329,000.

The Marines will receive an extra 1,000 troops, giving its final ranks about 184,500.

Space Corps

One of the more controversial provisions in the House version of the bill created a new military branch called the Space Corps.

Both the White House and Defense Secretary Jim Mattis panned the idea and Congress decided to heed their warning.

The final version of the bill does not create a new Space Corps, but it does require DoD to look into the implications of its creation.

Mattis stated he opposed the creation of the Corps because it creates a distraction when DoD is focusing on restoring readiness and reducing overhead.

The bill does focus on streamlining space acquisition and delaying some decision making processes. Space acquisition has become a point of contention as many lawmakers feel there are too many fingers in the pie, which slows the procurement of space items.

Commercial buys

The defense authorization bill keeps an acquisition reform provision aimed at buying commercial items easier.

The bill tries to encourage DoD to buy commercial off the shelf products through e-commerce marketplaces. Think something like Amazon, where the marketplace aggregates products from multiple vendors.

DoD already uses a system like that called DoD EMALL, but that is an area where only vendors sell to the government.

The bill requires DoD to enter into one or more private marketplaces used by commercial companies. Grainger Industrial Supply, OfficeMax or Staples are all examples.

“Because we are tapping into an existing commercial marketplace we can leverage all the features of this mini free market. Inherent in this commercial marketplace is market research … also competition is built in. It’s its own mini free market, so prices are reasonable. The market is clear. The prices are the appropriate, best, most reasonable price for the item,” said a House Armed Services Committee aide in April.

The aide said by entering into the marketplace DoD may be able to save money and also get products to the warfighter faster because it would alleviate requirement burdens from program managers.

The finished bill adds benchmarks for oversight and will go into effect immediately if the bill passes.

Some in industry have been critical of the provision, worrying it might reduce competition.

Jon Etherton, a former Hill staff member and now president of Etherton and Associates, said while the inclusion of commercial online marketplaces in federal acquisition would be a major change, companies and agencies shouldn’t be too stressed about it.

“Everyone likes the concept, so it’s just a question of how do you work through the details to make it compatible with government procurement and that sort of thing. It’s not an either-or situation,” Etherton said. “I think it will be an issue where we will work out a lot of details during implementation.”

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