Congress taps brakes on DoD project to reform IT funding

The House-Senate appropriations agreement leaves out a DoD request to significantly expand a pilot program to test "colorless" appropriations for software and t...

The DoD Reporter’s Notebook is a weekly summary of personnel, acquisition, technology and management stories that may have fallen below your radar during the past week, but are nonetheless important. It’s compiled and published each Monday by Federal News Network DoD reporters Jared Serbu and Scott Maucione.

Last week’s passage of an omnibus spending bill eliminated the threat of a full-year continuing resolution and gave the Defense budget a nearly 4.7% spending increase. But lawmakers were less generous when it came to the matter of expanding a program meant to test major reforms to how DoD funds technology modernization.

The final agreement rejected the Pentagon’s request to significantly expand what’s known as the Software and Digital Technology Pilot Program in 2022. The pilot, in short, lets major IT programs fund development using a single “color of money,” rather than trying to wedge their budgets into the R&D, procurement and operations accounts that were originally designed for major weapons systems.

Congress initially allowed DoD to test the concept with eight technology programs as part of the 2021 appropriations bill. And the department will still be allowed to continue proving its case — that a single color of money doesn’t diminish Congressional oversight — with those same programs. But DoD had asked for permission to add five new programs to the pilot this year.

The House Appropriations Committee had okayed nearly all of them in its version of the 2022 budget. At the committee level, the sole exception was also the department’s boldest: The Navy had proposed to move all 2022 spending for its Next Generation Enterprise Network (NGEN) contract, nearly $1 billion, into the pilot.

But the Senate Appropriations Committee never passed its own version of the bill, one possible explanation for why the final omnibus took a more cautious approach to expanding the program.

Besides NGEN, the Pentagon had also requested to move $186 million in funding for the Joint Artificial Intelligence Center into the pilot, plus three Air Force programs: Strategic Mission Planning and Execution System, Air and Space Operations Center, and Defense Enterprise Accounting and Management System.

Those programs’ omission from the omnibus leaves the Air Force with no participation in the colorless money pilot, though it does still include the Space Force’s Kobayashi Maru program, which was added last year.

Officials in DoD’s technology and acquisition communities have long seen the weapons-centric approach to funding as a barrier to the military’s adoption of modern concepts like continuous software delivery and DevSecOps, since those approaches are almost antithetical to the idea that a software project can be categorized as in the “research” or “procurement” or “operations and maintenance” stages that correspond to a hardware system’s normal lifecycle.

“[Software] doesn’t behave like a weapon system,” Jane Rathbun, the Department of the Navy’s CTO said last year, while also acknowledging that the size of the NGEN request caught lawmakers off guard. “I’ve talked to a hundred people who spend six months with their lawyers deciding whether or not they can use procurement or O&M funding for things. I mean, that slows us down. It would be a cultural shift for the entire Department of Defense, and really enable a DevSecOps culture.”

Doug Bush, the newly-sworn in assistant secretary of the Army for acquisition, logistics and technology, said much the same in a roundtable with reporters last month.

“I don’t believe the private sector distinguishes between R&D and procurement for software. But we do. Does that make sense? I’m not so sure,” he said. “But that’s going to have to be a discussion with Congress to make sure they’re comfortable with how we’re proposing to use the authorities and whether or not we can think about how we budget for software, which will be critically important.” —JS

Navy gets funds for Hawaii water contamination, lawmakers weigh issues of closing Red Hill

Tucked into the $1.5 trillion spending appropriation that passed Congress last week is a sizeable amount of money to get the Navy to clean up its act around water issues.

The budget secures more than $686 million for the service around mitigating water contamination in Hawaii.

The Defense Department announced just days prior to the omnibus passing that it would close its Red Hill Underground Fuel Storage Facility, a Pacific asset that dates back to World War II.

About $150 million of the funds will go to the closure of the facility. The rest of the money will support military families impacted by the contamination and recovery efforts.

Funds will also go to environmental restoration and for immediate financial assistance to families where federal funding does not apply.

The law also directs DoD to submit a report on the mitigation efforts in three months.

“This $686 million is an important step, but there is still a lot of work left to be done to safely defuel, permanently close the facility, and remediate any environmental contamination concerns,” Sen. Mazie Hirono (D-Hawaii) said in a statement last week. “This will require direction and oversight by Congress in the out years to provide funding to ensure it is completed.”

Recent problems with the water supply in Hawaii after a fuel spill caused by operator error in late November last year. Operations at the site have been closed since. Residents began reporting symptoms like nausea, diarrhea, headaches and other health issues. It was later found that jet fuel had leaked into the water.

“The committees express disappointment in the Department’s operation and management of the facility and related infrastructure, which has negatively affected and disrupted the lives of service members, their families, and the people of Hawaii,” the bill report states.

The 80 year-old, 250 million gallon storage facility sits just 100 feet above the island of Oahu’s main aquifer, which provides 77% of the potable water in the area.

The Sierra Club of Hawaii states that since 1943, at least 180,000 gallons of fuel have leaked into Hawaii’s water from Red Hill.

Past spills have not been due to operator error. In 2014, tank 5 leaked 27,000 gallons of fuel into the water.

In 2019, the Navy released a third party report it directed stating that there was a 27.6% chance that 1,000 to 30,000 gallons of fuel could leak into the water per year. The Navy stated that the historical record did not reflect that probability considering there had only been one known leak since 1983.

DoD says Red Hill’s closure will be a multi-step process and the Pentagon plans to have a plan ready by the end of May with a target completion of one year.

Defense Secretary Lloyd Austin called the closure “the right thing to do,” in his statement announcing the shutdown of the facility.

“Centrally-located bulk fuel storage of this magnitude likely made sense in 1943, when Red Hill was built. And Red Hill has served our armed forces well for many decades. But it makes a lot less sense now. The distributed and dynamic nature of our force posture in the Indo-Pacific, the sophisticated threats we face, and the technology available to us demand an equally advanced and resilient fueling capability,” he wrote. “To a large degree, we already avail ourselves of dispersed fueling at sea and ashore, permanent and rotational. We will now expand and accelerate that strategic distribution.”

Navy Secretary Carlos Del Toro said the Navy will not need to build any new facilities to replace Red Hill.

The decision is drawing fire from Republican lawmakers, however.

“Red Hill has serious problems, but the secretary closed Red Hill without laying out the resources needed to replace that capability,” Rep. Mike Rogers (R-Ala.) ranking member of the House Armed Services Committee said at a hearing last week. “That’s extremely short sighted. The response from the department has been the same: The answer’s just one policy announcement away. That’s unacceptable.”

Sen. Jim Inhofe (R-Okla.), the ranking member of the Senate Armed Services Committee, said he wants more information on DoD’s plan.

“I would like to learn more about the potential operational risk of taking Red Hill offline,” Inhofe said in a statement. “Secretary Austin has stated that it is his goal to shut down this facility in just one year, but we haven’t seen a plan for how that is going to happen, and we don’t know if that plan is fully funded to execute as quickly as possible. We also need to understand how the Department of the Navy and Indo-Pacific Command will mitigate risk in this theater, how the repositioning of fuel will align with the National Defense Strategy, and if the Department of Defense has assessed the strategic value of Hawaii to all operational planning before making this decision.”

However, Navy Secretary Carlos Del Toro said at the McAleese Conference last week that other storage facilities in the Pacific will be able to make up for the lack of Red Hill.

“I spent a lot of time just talking about the relationship between partners and allies,” Del Toro said. “We have the locations necessary to distribute that fuel effectively, without building an enormous number of additional fuel farms, for example.” — SM

Leadership roles take shape for DoD’s new data and AI office as Spirk departs CDO position

The Pentagon has picked a new official to head up its new Chief Digital and Artificial Intelligence office, officials said Friday.

Margie Palmieri, previously a special assistant to the vice chief of naval operations took on the new role of deputy chief digital and artificial intelligence officer (CDAO) on Friday, the Defense Department said in a statement. Palmieri previously founded and led the Navy’s digital warfare office.

DoD first announced the standup of the new office in December. It’s meant to bring the management of its Joint Artificial Intelligence Center (JAIC), chief data office and the Defense Digital Service under a single governance structure within the DoD CIO’s office. It reached initial operating capability last month, and is expected to declare full operating capability by June 1.

John Sherman, the DoD CIO, still holds the official title of “acting” CDAO, but Palmieri will lead the overall organization’s “executive team,” officials said. Meanwhile, several other newly-named deputies will have portfolios within the new structure:

  • Gen. Michael Groen, the current JAIC director, will continue in that role, along with the new title of senior military advisor to the CDAO
  • Clark Cully, the deputy DoD CDO, will serve as deputy CDAO for policy
  • Greg Little, the deputy DoD comptroller for data transformation, will serve as deputy CDAO for enterprise capabilities
  • Katie Olson, the acting director of the Defense Digital Service, will serve as deputy CDAO digital services
  • Dan Folliard, a former special assistant to the secretary of Defense, will serve as the CDAO’s chief operating officer.

On the same day, David Spirk, who had served as DoD’s chief data officer since May 2020, left government service, according to his LinkedIn profile. Fedscoop was first to report his departure.

Spirk told the publication he was comfortable leaving his position now in large part because of the progress that’s been made in standing up the new CDAO office.

While it’s still unclear exactly how the new structure will work, Defense officials have said they believe they will need legislation to formalize its roles and responsibilities within the CIO’s office and across the broader department. They’ve also insisted the intent is not to create another layer of management bureaucracy, but to harmonize and integrate the organizations that have handled AI, data analytics and data management functions up to this point.

“We’d created the CDO and the JAIC and DDS in a way that each was operating independently, as if the others don’t exist,” a senior Defense official told reporters in December. “That causes two kinds of inefficiencies. One, it means we don’t have the kind of integration across their lines of efforts that we could to really maximize the impact. And two, it means we don’t take advantage of when there are overlaps or underlaps in what they’re doing so that we can drive the right kind of prioritization in these spaces.” —JS

Navy, Marine reservists say they aren’t getting disability benefits

The Navy and Marine Corps are facing a class action suit from reservists with service-connected injuries who say they are having issues getting benefits.

Covington & Burling and the National Veterans Legal Services Program are filing the complaint.

The issue stems from what the suit calls a catch-22, where reserve sailors and Marines need to obtain a line of duty benefits letter to receive disability processing for retirement benefits. However, the case alleges that there is no formal process to get the letter.

“I hope this lawsuit helps service members, who like me, were unquestionably injured in the line of duty,” said Richard Henderson, a former petty officer first class and class action suit representative, who was injured in Afghanistan in 2014. “I was medically evacuated from Afghanistan for injuries I sustained while evading rocket fire.  Nonetheless, I was not offered access to the Navy’s duty-related disability retirement system. Instead, I was separated as if my injuries had occurred while I was off active duty orders. Now, because the Navy denied me a medical retirement, I am without the healthcare I need.”

The suit seeks declaratory and injunction relief to provide benefits to veterans through the Administrative Procedure Act. — SM

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