NDIA PERSPECTIVE: Another CR, Another Blow to National Security

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NDIA PERSPECTIVE: Another CR, Another Blow to National Security

12/3/2019
By Wesley Hallman

Photo: iStock

What’s so bad about an extend­ed, or worse, a year-long con­tin­u­ing res­o­lu­tion? While some see saved dol­lars due to spend­ing at pri­or-year lev­els or mere­ly delays that accel­er­at­ed con­tract­ing and financ­ing lat­er in the year can mit­i­gate, the insid­i­ous effects of a long-term CR mean few­er war­riors with low­er readi­ness, slowed field­ing of capa­bil­i­ties, and a defense indus­tri­al base yet again bur­dened by delays and uncer­tain­ties.

Despite a two-year bud­get deal signed ear­ly this past sum­mer estab­lish­ing defense toplines for fis­cal years 2020 and 2021, we have no National Defense Authorization Act or a signed defense appro­pri­a­tions bill.

Funding uncer­tain­ty fol­lowed by a year-long CR could mean $22 bil­lion in lost pur­chas­ing pow­er the Defense Department gained under the two-year bud­get agree­ment. That’s pur­chas­ing pow­er need­ed to con­tin­ue the readi­ness recov­ery along with fund­ing crit­i­cal invest­ments, espe­cial­ly by the Army, to realign resourc­ing to the 2018 National Defense Strategy.

The con­tin­u­ing res­o­lu­tion that was in place at the begin­ning of this fis­cal year blocked 79 new pro­gram starts and 39 planned pro­gram increas­es. When start­ing the new fis­cal year with a con­tin­u­ing res­o­lu­tion became appar­ent, the depart­ment asked for “anom­alies” to exe­cute these actions, but Congress pro­vid­ed none. And, even if there is a year-long CR with some anom­alies allowed, his­to­ry shows the Defense Department gets that for only about 20 per­cent of those actions.

Doing busi­ness with the fed­er­al gov­ern­ment is already hard. The tomes of reg­u­la­tions, the bur­den­some busi­ness require­ments, the some­times Kafkaesque con­tract­ing and over­sight pro­ce­dures, and com­pressed mar­gins make this a sec­tor that has seen a net out­flow of com­pa­nies. Add to that the uncer­tain­ty of if and when a full-year defense appro­pri­a­tions mea­sure and NDAA get signed into law, more com­pa­nies will reassess their par­tic­i­pa­tion in the defense indus­tri­al base.

The gov­ern­ment dis­in­cen­tivizes new, inno­v­a­tive entrants into the defense sec­tor even though the pol­i­cy of the Defense Department places a pri­or­i­ty on doing the exact oppo­site in order to bring in new ideas, new capa­bil­i­ties and greater com­pe­ti­tion.

Fiscal year 2018 marked the ninth year in a row to begin with a CR. The Navy alone report­ed over $10 bil­lion lost in inef­fi­cient acqui­si­tions over that time peri­od. Additionally, the Center for Strategic and International Studies not­ed over 11,000 com­pa­nies had left the defense indus­tri­al base dur­ing that peri­od. But, with a bud­get deal and a recog­ni­tion that CRs are no way to main­tain nation­al secu­ri­ty, Congress passed and the pres­i­dent signed the fis­cal year 2019 defense fund­ing bill and NDAA before the begin­ning of the fis­cal year, allow­ing real progress across depart­ment pri­or­i­ties and invest­ments by indus­try.

Unfortunately, the learned les­son was short-lived, and we find our­selves again begin­ning the fis­cal year with a CR, no NDAA, and talk of that extend­ing through the whole of the fis­cal year with all the con­comi­tant harm and inef­fi­cien­cies that come with it.

Most of the inef­fi­cien­cies and many of the exits from the indus­tri­al base result from delayed or can­celed con­tract­ing starts. Many will under­stand that a delayed start can lead to aggra­va­tion for larg­er con­trac­tors, but that aggra­va­tion becomes exis­ten­tial for small­er prime con­trac­tors and com­pa­nies down the sup­ply chain. The effect of that has a human face and a long-term impact.

Take the exam­ple of a com­pa­ny con­tract­ed on a pre­vi­ous­ly approved new-start pro­gram. To exe­cute the con­tract, despite the tight labor mar­ket and a short­age of work­ers with the required secu­ri­ty clear­ance, that com­pa­ny has recruit­ed and hired a work­force and trained them to exact­ing stan­dards. With a CR now in place, that com­pa­ny has to choose from two very bad options. It can either pay that work­force to stand idle — some small busi­ness own­ers do this by tak­ing out sec­ond and third mort­gages on their own homes — or it can let those work­ers go, unlike­ly to return, while los­ing that upfront invest­ment and plac­ing it in dan­ger of not being able to per­form the con­tract as promised once a full-year bud­get pass­es.

It is no won­der why so many com­pa­nies left the defense indus­tri­al base dur­ing the last long run of CRs. Over time, though, it means our nation­al secu­ri­ty is at risk.

According to Rep. Steve Womack, R‑Ark.,“When Congress fails to pro­vide sta­ble fund­ing, we hin­der our warfight­ers and neglect our con­sti­tu­tion­al duty of pro­vid­ing for the com­mon defense. We can’t con­tin­ue to hold our mil­i­tary hostage — and any­thing less than sus­tained, pre­dictable appro­pri­a­tions will dam­age nation­al secu­ri­ty.” This is espe­cial­ly true in an era of great pow­er com­pe­ti­tion.

Our National Defense Strategy calls out two spe­cif­ic com­peti­tor nations: China and Russia. Neither of these coun­tries have ever wor­ried about a CR. Instead, our delays enable them to take advan­tage of time, time we will nev­er get back, and time they will use to con­tin­ue to chip away at the advan­tages America has invest­ed in, trained for, and brought to bear in the defense of the nation and its inter­ests.

In today’s nation­al secu­ri­ty envi­ron­ment, we can­not afford a long-term CR. We can­not afford to ham­per readi­ness recov­ery efforts, delay capa­bil­i­ties to warfight­ers, post­pone invest­ments in advanced tech­nolo­gies, or allow the defense indus­tri­al base to erode.

Wesley P. Hallman is NDIA’s senior vice pres­i­dent for strat­e­gy and pol­i­cy.

Topics: Defense Department

Source: NDIA

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