Some Rays of Hope Emerge from Capitol Hill

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While the news remains rife with the crises and fiscal cliffs facing our federal government, it has not been all bad for those focused on national security.

But first, let’s focus on the bad, though unsurprising news. On Oct. 1 — for the 12th time in the past 13 years — the new fiscal year started under a continuing resolution. For those not attuned to what a CR is or does, it means we entered the government’s new spending year hamstrung with last year’s budget and last year’s spending authorities. Not only does this mean reduced resources from those planned by the Defense Department and the military services, it also means they — and industry — are unable to start new programs as planned.

As highlighted by experience, this portends spending inefficiencies, extended vulnerability and risk for the defense industrial base, and delayed advanced capabilities for warfighters. This is time and money we will never get back and something neither China nor Russia has to contend with. So, despite the efforts of the National Defense Industrial Association and many others, budget stability remains an elusive goal, but one which remains a foundational priority.

Despite neither a defense appropriation or a passed and signed National Defense Authorization Act, there remain some rays of good news in the ongoing legislative process.

First and foremost, the fact that annual defense legislation remains an exercise in bipartisanship bodes well at a time when we increasingly need a unified voice and purpose addressing the nation’s security. Congress put this bipartisanship on display when the respective Armed Services committees defied the White House and added nearly $25 billion to the topline defense budget. Both committees passed their versions of the NDAA by wide bipartisan margins, and, on the House side, also passed on a broad bipartisan floor vote after easily overcoming an amendment seeking a 10 percent spending cut.

But bipartisanship is not the only reason for faith. Congress has taken up several substantive policy issues of real import now and into the future. First among these in the House bill is Section 802, “Special Emergency Reimbursement Authority,” also known as the “Just in Case Act.” Co-sponsored by Reps. Anthony Brown, D-Md., and Rob Wittman, R-Va., the provision builds on the lessons of the COVID-19 pandemic, enshrining an emergency authority that “will enable contractors — particularly small innovative businesses — to keep their workforces intact and weather the crisis when unable to perform on their contracts.”

Such authority will lessen the risks and uncertainties industry and the Defense Department face during the early days of the next emergency by protecting the underpinnings of the defense supply chain and its skilled, cleared workforce.

The ongoing concerns with the Cybersecurity Maturity Model Certification program also garnered the attention of Congress. While the need for a cybersecure defense industrial base is beyond argument, the CMMC program continues to endure a difficult launch to include a reassessment by the Pentagon. As of press time, we have not seen the results of the department’s 30-day internal review ordered back in the spring, but that did not stop the House of Representatives from including language via a perfunctory voice vote to require the department to submit a report on the effects of CMMC on small businesses.

Also of interest to small companies are provisions focused on the Small Business Innovation Research program. This program, slated to sunset at the end of fiscal year 2022 if not extended, has been a driver of bringing small and nontraditional companies into the defense sector.

With a reported 22:1 return for every Defense Department dollar invested in the program, extending and expanding it are association priorities. The House has seen the benefit of SBIR and included a large plus-up for the program as it pertains to special operations forces.

Additionally, the Senate version of the NDAA includes a provision targeted at transitioning more SBIR projects beyond research and prototyping to real capabilities in the hands of service men and women through “Phase III” contract awards. It does this through the adage “what gets measured gets done,” requiring the Pentagon to collect and report data on Phase III awards to include: the cumulative funding amount for Phase III awards; the number of Phase III award topics; the total funding obligated for Phase III awards by state; the original Phase I or II award topics and the associated Phase III contracts awarded; and where possible, an identification of the specific program executive office involved in each Phase III transition.

In the same what-gets-measured-gets-done category, the Senate version also contains a provision, Section 805, that forces the Pentagon to produce an annual report on the five highest and lowest performing acquisition programs.

Finally, and maybe most impactful to the future of how the Pentagon operates, is Senate NDAA Section 1002 establishing a “Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform.” This commission will study and assess the PPBE process to make recommendations to modernize how the department fundamentally carries out its mission, not least of which is how it acquires the equipment and services our warfighters require to carry out their mission. With NDIA soon to release a white paper on the process, this effort is timely.
For all this we should be heartened that despite the budget battles, legislators remain serious about national defense and doing it better. 

Wesley Hallman is senior vice president for strategy and policy at NDIA.

Topics: Defense Department