By Matt Vallone, Director of Research & Analysis
Main Story: House Armed Services Subcommittees to Mark-Up the FY 2019 National Defense Authorization Act
This week the House Armed Services Committee will begin marking up the FY 2019 NDAA (H.R. 5515), starting with subcommittee mark-ups on Thursday, April 26th. After that, the full committee will mark-up the bill on May 9th when Congress returns from recess. Some key questions to consider as HASC marks up this legislation:
- How are Thornberry’s proposed reforms received? Chairman Mac Thornberry (R-TX) has introduced extremely ambitious legislation to reform the Pentagon’s so-called 4th estate, the agencies and civilian employees that monitor acquisitions, manage human resources, and support other functions of the sprawling Pentagon bureaucracy. His reforms would require the Pentagon to slash 25% of its spending on these functions and eliminate seven agencies entirely. This proposal will likely face fierce resistance both from DoD and from members of Congress who represent these employees. While it seems unlikely that the Chairman would introduce this unless he felt confident much of it would make it into the NDAA, it will be interesting to see how much opposition it faces during the mark-up. Ranking member Adam Smith (D-WA) has already come out in opposition to some of the proposal.
- What programs get additions? Historically, Congress has increased investment spending at the expense of O&M. In addition, it is basically an annual tradition for Congress to increase the military’s pay raise above the DoD request. Last year’s NDAA included significant increases across a variety of programs, much of which was paid for through a higher topline. However, this year’s authorization will be bound by the same caps as the President’s Budget Request, making it harder to add to all sorts of programs in areas that can be cut to offset increases
- What gets cut? The flip side of any proposed increases will be cuts. O&M is normally the biggest pay-for in these negotiations, but it’s likely that HASC will want to shape various procurements as well.
House Activity – The House will continue work on a series of financial services bills including legislation addressing fraud protection for vulnerable populations (H.R. 5192), and legislation reforming the IRS (H.R. 5444 and H.R. 5445).
Senate Activity – The Senate will spend the week on two pieces of legislation. S.140 amends the White Mountain Apache Tribe Water Rights Quantification Act of 2010 to clarify how some of the funding can be used, and will make changes to how tribal entities are regulated by the National Labor Relations Board. In addition, Majority Leader Mitch McConnell has initiated a floor procedure under Rule 14 that will allow him to place a bill that would allow hemp production to be put on the Senate’s calendar.
- 4/24 “Posture of the Department of the Air Force”, Full Committee Hearing, SD-G50 Dirksen, 930am
- 4/26 “Department of Defense Budget Posture”, Full Committee Hearing, SH-216 Hart, 930am
- 4/26 “Markup of H.R. 5515 – National Defense Authorization Act for Fiscal Year 2019”, Subcommittee on Readiness, 2212 Rayburn, 9am
- 4/26 “Markup of H.R. 5515 – National Defense Authorization Act for Fiscal Year 2019”, Subcommittee on Emerging Threats and Capabilities, 2118 Rayburn, 10am
- 4/26 “Markup of H.R. 5515 – National Defense Authorization Act for Fiscal Year 2019”, Subcommittee on Military Personnel, 2212 Rayburn, 11am
- 4/26 “Markup of H.R. 5515 – National Defense Authorization Act for Fiscal Year 2019”, Subcommittee on Tactical Air and Land Forces, 2118 Rayburn, 1230pm
- 4/26 “Markup of H.R. 5515 – National Defense Authorization Act for Fiscal Year 2019”, Subcommittee on Seapower and Projection Forces, 2212 Rayburn, 130pm
- 4/26 “Markup of H.R. 5515 – National Defense Authorization Act for Fiscal Year 2019”, Subcommittee on Strategic Forces, 2118 Rayburn, 3pm
- 4/25 “FY 2019 Department of Defense Posture and Budget (CLOSED)”, H-140 The Capitol, 1pm
- 4/24 “Subcommittee Hearing: Hearing to Review the FY2019 Budget Request for the U.S. Navy & Marine Corps”, 192 Dirksen, 10am
Government Activity Round-up
Nothing new at the CBO this week. GAO has several interesting and industry-relevant reports out though. First, GAO looked at the Marine Corps’ Amphibious Combat Vehicle (ACV) program. Overall, the GAO has good things to say about the two produced prototypes for ACV 1.1, though it notes that there is some risk in the level of manufacturing readiness. More here.
The second GAO report looks at the cost profile of the KC-46 program, which has experienced a rocky past few years. The report concludes that the programs’ costs appear to be stable but calls into question the planned delivery schedule. Overall the report notes that the total acquisition cost for the KC-46 has declined by $7.3 billion since the initial estimate in February of 2011. However, it expects that the first 18 aircraft may not be delivered until May of 2019. Full report here.
Lastly, GAO looked at a report issued by DoD in April of 2017 comparing the cost of civilian employees versus contractors. DoD’s report “concluded that neither federal civilians nor service contractors were predominately more or less expensive” with costs varying based on position requirements and location. GAO assessed DoD’s reports and, by and large, validated the methodology DoD used. More available here.
Beyond these official reports, two pieces of material from Avascent Analytics were released. First, War on the Rocks published a piece looking at how DoD funding growth might shift based on the spending increases in the Bipartisan Budget Act and in response to longer-term trends in government funding. Second, Shane Mason, our India analyst, put together a great data story looking at how India’s defense market is becoming more competitive. The ebb and flow of import sourcing combined with the focus on improving domestic industry creates some interesting and helpful graphics. Full story here.
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