FRCSW / COMFRC Clips for Week of May 22

LOCAL COVERAGE

FRCSE Artisan Finds Family Link to Fallen Soldier in Dusty Shoebox

Capped: Head injuries to zero since implementing PPE wear policy

Innovation Challenge to kick off at FRC East

H-53 Super Stallions Get Super Service at FRCSW

 

WORLD/NATIONAL NEWS

New Defense Budget Poised To Meet Lower Expectations

HASC Chair Thornberry Introduces Latest Defense Acquisition Reform Plan

Expect A Lot Of Modernization Spending In The Next Few Years: Gen. Dunford

Fiscal Year 2018 Budget Set To Answer Lingering Navy Acquisition Questions

Trump Budget Fails To Live Up To ‘Historic’ Defense Promises, Analysts Say

Navy’s 2018 Budget Addresses Readiness Through Maintenance, Spares, Infrastructure Improvements

Amid $52 Billion Plus-Up, DoD Looks To Trim Spending On Service Contracts, Health Care

 

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LOCAL COVERAGE

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FRCSE Artisan Finds Family Link to Fallen Soldier in Dusty Shoebox

(FLEET READINESS CENTER SOUTHEAST PUBLIC AFFAIRS 23 MAY 17)

 

JACKSONVILLE, Fla. – As dawn stretched its fingers across the frozen banks of the Sûre River near the town of Gilsdorf, Luxembourg, the idyllic landscape was exploded by the crash of German 88mm artillery rounds.

 

It was Jan. 18, 1945, and the German army’s last-gasp attempt – known to history as the Battle of the Bulge – to throw back the allies’ inexorable march to their homeland, was in its death throes.

 

Gen. George Patton’s Third Army had broken through the German lines to relieve the 101st Airborne at Bastogne, and was now headed north to cut off any Wehrmacht soldiers remaining in the bulge the German’s advance had created in allied lines. To do that he had to cross the Sûre River, just five miles west of the German border.

 

Among the group of U.S. Army combat engineers on the south bank was Pfc. Leroy Thomas.

 

“I never knew who Leroy Thomas was,” said Fleet Readiness Center Southeast sheet metal worker Dale Holt. “But my mom, whose health is failing, told me the other day ‘I have something that was my mom’s that I want you to have.’

 

“She broke out this little box, and here was this little letter she handed me.”

 

The box contained two yellowed, faded letters and a photo of a grinning, auburn-haired young soldier in his class-B uniform.

 

“The letters were from her stepbrother Leroy Thomas, when she was about 10 years old,” Holt said. “She told me she wanted me to have them because my grandmother kept them until she passed away, so they obviously meant something to her.”

 

All that his mother knew, Holt said, was that Thomas had been killed in the war. The details were fuzzy – if ever known completely – but involved a boat, and what the family thought was an underwater mine.

 

“The body never came home,” Holt said. “My mom told me they had a few friends come by with food and condolences, but they never had a funeral.”

 

Holt wanted to know more about the family member he’d never known, and immediately began to examine the letters.

 

The first was dated March 31st, 1944. The 7th Combat Engineer Battalion, to which Thomas belonged, was still in Northern Ireland for training. In the letter to his father, Thomas sent the photo of him in uniform, and asked for candy, gum, magazines and a lighter. He also noted the fact he was engaged to be married.

 

He mentions the Japanese, perhaps believing they would be his future opponent, with the bravado characteristic of soldiers before they see combat.

 

In closing, he also had a special request for his stepmother, Holt’s grandmother, to send some makeup.

 

“Tell Mable to put a tube of lipstick, rouge and a box of powder in it,” Thomas wrote. “I would like to doll my girlfriend up a little to see how she looks.”

 

The contrast in the second letter is striking.

 

After fighting his way across France for the last six months, his mood was melancholy. Written using the Victory Mail or “V-Mail” system, Thomas’ longing for home bleeds through in the letter to his parents that is post-marked Jan. 10, 1945.

 

“I haven’t heard from you in quite a while, it can’t be you have forgotten your son all the way over here,” he wrote. “It seems that nobody writes me any more, not even my best girlfriend.”

 

Whether his lack of mail was due to a failure in the postal system to keep up with Patton’s blistering pace during those months is unknown. Yet Thomas clearly noticed, like any service member, the decrease in mail. He also acknowledged his own failure to write home.

 

“I know I hardly ever write, but that can be explained,” he wrote. “Not now, but when I come home.

 

“Seems like I’m getting tired of being over here.”

 

From the letters and photo, Holt now had a starting point to look for more. He knew Thomas’ name, unit and that he served in Europe. Armed with that information, he brought the heirlooms to show his coworkers – one of whom is Todd Taylor.

 

Taylor, a Gold Star father himself, is familiar with digging into military records, and immediately went to work on his home computer.

 

There, he found a website dedicated to the 7th Engineers created by George Baldwin, who served in the unit in Vietnam. The site featured first-hand accounts of 7th Engineer soldiers.

 

Astonishingly, one of the men who contributed an account, Tom Tucker, was there that freezing January morning in 1945 on the banks of the Sûre River.

 

“At daylight the Germans started shelling the crossing site,” Tucker wrote of that morning. “The ground was frozen so it was impossible to dig in.”

 

The engineers had moved elements of the 5th Infantry Division across the river in boats in the pre-dawn hours. Several of them had been instructed to stay with the boats in case reinforcements or supplies were needed.

 

“There were large trees at the edge of the river so we were getting some tree bursts,” Tucker said. “There was a small stone building at the edge of the river that we used for cover.”

 

As the shells rained down fatal shrapnel, Tucker made a dash for the building and saw Thomas.

 

“I was almost in the door of the building but looking in his direction,” Tucker said. “He had hit the ground, there was a tree burst, he stood up and shouted ‘I’ve been hit,’ ran about three steps dragging one leg, then collapsed.

 

“The shelling lasted only a few minutes, but when we reached Thomas he was dead.”

 

Holt’s mother was right. Leroy Thomas never made it home to tell his parents about what he’d seen and what he endured.

 

Holt learned Thomas was buried, along with more than 5,000 of his fellow soldiers, in the Luxembourg American Cemetery in Luxembourg City. Eleven months later, he would be joined by his commanding officer, Gen. George Patton, when he succumbed to injuries suffered in a car crash in Heidelberg, Germany.

 

“It means a lot to me to know what happened to him,” he said. “If my mother hadn’t given me those letters, I’d have never known she lost a brother in the war.

 

“I think it’s important to remember these guys. Otherwise, their sacrifice is lost to history.”

 

http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=6544

 

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Capped: Head injuries to zero since implementing PPE wear policy

(FLEET READINESS CENTER EAST PUBLIC AFFAIRS 25 MAY 17)

 

MARINE CORPS AIR STATION CHERRY POINT, N.C. – Fleet Readiness Center East has noticed a significant drop in head injuries since directing artisans to wear caps when performing work in its aircraft production spaces.

 

Safety officials are crediting the wearing of bump caps with the report of zero head injuries since implementing the bump cap mandatory-wear policy Dec. 20, 2016.

 

“They’re actually working,” said Luc Desilets, FRC East Safety director. “There have been about 15 to 20 incidents of people bumping their heads reported to the safety specialists in the application areas, but no injuries have resulted. Supervisors and work leaders are taking note that the bump caps are working.”

 

The organization recorded 45 head injuries from Oct. 1, 2014 to Oct. 6, 2016. In 2016, alone, the organization recorded 17 – 37.8 percent – of the head injuries in the safety application areas pertaining to its F-35 production line. The reported injuries resulted in a variety of work restrictions, which translated to production time lost. The significant amount of head injuries reported among the F-35 production line led safety officials to do a trial with the bump cap in 2016. The results of the trial drove the command to implement the wear of bump caps on all production lines.

 

According to Desilets, wear of the bump cap is preventing injuries such as cuts or lacerations, scraps, bruises, and nicks that were resulting from the various incidents of artisans bumping their heads in the workplace.

 

“It’s expected that there are going to be instances of people bumping their heads when they’re going in and out of the aircraft and putting their heads into tight spaces,” said Desilets. “Wear of the bump cap is intended to stop artisans from suffering those injuries that come as a result of banging one’s head into aircraft structures, sharp surfaces and other equipment common to those areas.”

 

The policy is consistent with the tenet of the commander’s operating policy and pledge to cultivate an atmosphere of total health consciousness by providing a safe workplace for all employees and visitors.

 

“I can’t make you be safe, but I can create conditions for you to work in that gives you the greatest chance to be safe,” said Col. Clarence Harper, FRC East commanding officer, speaking to members of the workforce on various occasions during the first quarter of the fiscal year while addressing matters that were hindering the organization’s throughput rates. “Our mission is to return quality aircraft, components, and engines back to the fleet, and injuries potentially harm personnel, disrupt families, and disrupt production. Safety, just because it’s the right thing to do, will always be my highest priority.”

 

http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=6546

 

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Innovation Challenge to kick off at FRC East

(FLEET READINESS CENTER EAST PUBLIC AFFAIRS 24 MAY 17)

 

MARINE CORPS AIR STATION CHERRY POINT, N.C. – An Innovation Challenge event will kick off at Fleet Readiness Center East June 14.

 

FRC East has been selected to participate in this first industrial Innovation Challenge in Commander Fleet Readiness Centers. FRC East has a history of successful implementation of innovative ideas with many of those ideas coming from the artisan community. The challenge is being sponsored by Martin Ahmad, deputy COMFRC and Roy Harris, Naval Air Systems Command, Aviation Readiness and Resource Analysis director.

 

This event is aimed to challenge the workforce to develop innovative ideas that can help improve production within the facility. These ideas could involve changes to a process, or the manufacturing of a tool, device, or even a part. All command personnel can participate, and organizers are looking for workforce members with ideas that can be tried out during the challenge event, or anyone who would like to be a member of an innovation team.

 

The Innovation Challenge will run from mid-June until mid-December when the winning team will be crowned. Innovation teams will have until the middle of July to submit their idea as well as a roster of team members into the new online tool called Spark!.

 

Spark! is a new SharePoint site using discussion board thread functionality – permitting online discussions of proposed ideas. It is designed to help drive innovative thinking by leveraging crowdsourcing to improve collaboration amongst team members, FRC employees, as well as, the COMFRC enterprise. The resource is being developed by NAVAIR and is being rolled out for the first time with the Innovation Challenge.

 

From July through August the teams will develop their ideas which will then be discussed and evaluated via Spark! online. Any employee can go online to Spark! and rate an idea.

 

Sponsors and organizers hope that if more people are evaluating and discussing ideas during an idea formation phase that better idea concepts will be generated for implementation.

 

The teams will be using judging criteria that has been developed and approved to help them understand how their idea will be evaluated by a review panel. The online ratings are part of the judgment criteria that will be used during the Down Select, a point in the competition where the field is reduced to five finalist teams, which will happen in September.

 

After the Down Select each of the teams will focus on further design development and (or) prototyping of their idea into a working concept from September through November. During this final phase of the competition, the teams will assess the overall impact of their ideas and design their presentations to explain their idea and the associated benefits to a panel of judges. The winner will be announced in mid-December with awards presented.

 

Sponsors and organizers encourage members of the workforce to come forward with ideas one thinks will help improve the performance of FRC East and build a brighter future. Individuals who wish to participate, but do not plan to lead a team, should let the organizers know.

 

 

For more information, contact Darren Carpenter, Innovation Challenge site lead, at 464-5816 or darren.carpenter@navy.mil.

 

http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=6545

 

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H-53 Super Stallions Get Super Service at FRCSW

(FLEET READINESS CENTER SOUTHWEST PUBLIC AFFAIRS 24 MAY 17)

 

NAVAL AIR STATION NORTH ISLAND, Calif. – From its use in the evacuation of the U.S. embassy during the Somalian Civil War in 1991, to the Persian Gulf War and its role today in supporting the war on terror in Afghanistan and elsewhere, the CH-53E Super Stallion helicopter is a staple in the logistics toolbox of Navy and Marine Corps operations.

 

For more than 30 years the Sikorsky-built aircraft has moved personnel and equipment, and it remains the largest helicopter ever built by the Defense Department.

 

Today, about 150 of the helicopters are still in service. Super Stallions are found in naval squadrons on the East and West Coast, and those assigned to Marine Corps Air Station Miramar (MCAS) are maintained and repaired by the artisans of Fleet Readiness Center Southwest (FRCSW).

 

The FRCSW CH-53 program is comprised of approximately 104 employees including production control personnel and planners.

 

“About 60 to 70 of those employees are the artisans on the floor. They include the primary trades of sheet metal mechanics which is the largest group, electricians, and mechanics,” said John Santos, CH-53 production manager.

 

The program operates in two buildings: 333, where fiberglass and component work is done, and 378 where the remaining airframe work is completed.

 

The maintenance schedule of the Super Stallions is based upon a 54-month cycle called the Integrated Maintenance Program (IMP).

 

The IMP targets structural repairs to the fuselage, and includes replacing the skin, transition bulkhead, cockpit floorboard, any KAPTON electrical wiring upgrades and corrosion repair throughout the aircraft.

 

The IMP workload standard requires about 16,000 manhours per aircraft.

 

After induction, FRCSW artisans disassemble the aircraft and begin the IMP inspection specifications.

 

“We’ll typically do a lot of metal repairs that require us to disassemble electronic and mechanical components so we can access specific areas to rebuild the aircraft,” Santos noted.

 

The program is a combination of organizational level (O-level), or work handled by the Marine Corps squadrons, and depot-level work.

 

“We’ll also do a lot of troubleshooting,” Santos said. “If our spec says `test the landing gear operation,’ for example, and when we test it the landing gear doesn’t respond, we’re supposed to call the Marines because the landing gear system is maintained by the O-level maintainers. The spec only tells us to test it.”

 

However, the Marines have the option to turn an O-level repair over to the depot.

 

“An In-service Repair (ISR) may get to the type commander (TYCOM) who would grant the hours for the repair. The ISR request still goes through the squadron because they need to cut the planner and estimator request to get it submitted to the TYCOM,” Santos said.

 

Like other aging airframes, recurring areas of the Super Stallion are beginning to show signs of failure.

 

“A fitting toward the back of the aircraft near the base of the ramp have been cracking and we’ve seen issues on both West and East Coast aircraft,” Santos said. “This is a repair that requires the input of mechanics, sheet metal, machinists and non-destructive inspection (NDI) personnel.”

 

To better align the tail drive shaft, Santos said that a new tooling kit was added to the IMP specification.

 

“It’s a surface interim change notice that adds this as a spec, and this procedure will suffice on an interim basis while the aircraft is here,” he said.

 

“When the tail of the aircraft folds, and when it spreads back out, there’s a coupling that connects the tail to the fuselage that has teeth. We’ve been finding that sometimes they are clocked different, so the alignment makes them flush to each other so the power can transfer efficiently and safely from the gear box to the tail rotor.”

 

FRCSW is scheduled to induct 10 CH-53s during fiscal year 2017.

 

Fleet Readiness Center Southwest is commanded by CAPT Craig Owen.

 

http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=6547

 

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WORLD/NATIONAL NEWS

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New Defense Budget Poised To Meet Lower Expectations

(DEFENSE NEWS 19 MAY 17) … Joe Gould and Aaron Mehta

 

WASHINGTON – Pro-military U.S. lawmakers believe the Pentagon needs a major boost above U.S. President Donald Trump’s budget, but it’s unlikely Congress will oblige this year.

 

Trump’s 2018 budget request is itself a placeholder at $603 billion – $18.5 billion more than the Obama administration projected for 2018. On the high end is the $640 billion target advanced by the House and Senate armed services committee chairmen, which they say is needed to repair a military readiness crisis Obama left behind.

 

But powerful House Appropriations Defense Subcommittee Chairwoman Kay Granger, R-Texas, said Thursday that $603 billion for the 2018 defense appropriations bill is “reasonable” and that $640 billion – which exceeds statutory budget caps by roughly $90 billion – won’t be reached “unless something drops from heaven.”

 

“I don’t see how we get to that number this year, though we can get as close as we can this year, and the next year and the next year,” Granger said at a Bloomberg Government event in Washington.

 

Asked for his reaction later on Thursday, House Armed Services Committee Chairman Mac Thornberry, R-Texas, told reporters that $640 billion is what’s needed to repair underfunded readiness accounts and “keep the president’s promises.”

 

“These numbers have real-world consequences,” Thornberry said. “Too often we just split the difference. . You have to look at the world and say: ‘What are we willing to live without?’ ”

 

The White House’s $603 billion base budget proposal for national defense, expected to be released May 23, would exceed spending caps by $54 billion and is about $18.5 billion more than the Obama administration projections for 2018. Much of that increase is expected to be eaten up by personnel costs connected to troop pay raises and recent end-strength growth, leaving little headroom to plus-up procurement programs.

 

Comparing Trump’s budget with the early years of the Reagan administration buildup, and others, Katherine Blakeley, a defense budget expert with the Center for Strategic and Budgetary Assessments, said: “This is not a historic increase.”

 

“The political characterization is that we are at the early part, and we should expect an upward drive,” Blakeley said. “We won’t see a lot of that in [the president’s 2018 budget], but they are clearly laying the groundwork for that.

 

“In this budget, you see some trial balloons, like: Can we have an accelerated path to Navy shipbuilding?”

Insiders agree the 2018 numbers are merely planting seeds for future growth, focusing on Defense Secretary James Mattis’ plans to rebuild readiness in the near term, as he described in a January memo. That focus is expected to translate into more training, depot maintenance and flying hours.

 

In other words, it’s a long way from Trump’s campaign promise to build a 355-ship Navy, grow the Army and Marine Corps by 60,000 and 12,000 troops, respectively, and add at least 100 combat planes to the Air Force.

 

And if defense watchers are looking to the 2018 budget submission for Trump’s plan to get there, they may be disappointed. A source familiar with the 2018 Pentagon budget said it’s likely Trump would skip the tradition of including be top-line numbers for the next five years, as those numbers hinge on ongoing internal studies like the Nuclear Posture Review and the National Security Strategy.

 

There was “largely good work” done by the team that started assembling this last year, but this budget reflects awareness that strategic shifts may be coming and seeks to leave some wiggle room for the administration and the Pentagon’s new leadership to color within the lines, the source said.

 

Yet the president’s budget faces a tough path through Congress. Democrats are needed to reach the 60 vote threshold to ease budget caps, and they and others are already objecting to Trump’s plans to pay for defense increases with non-defense cuts.

 

“How in the world can [Republicans] justify the spending – the spending increase for the Department of Defense?” Sen. Richard Durbin, the Senate’s No. 2 Democrat and the top Democrat on the Senate Appropriations Defense Subcommittee, said Wednesday. “They’ll tell you behind closed doors they’re going to take it out of Medicare and Social Security. Try it, just try it.”

 

High-level congressional Republicans have also expressed skepticism about Trump’s budget plans. Granger, who opposes the administration’s proposal to cut 28 percent of the State Department’s budget, including many foreign aid programs, suggested Congress will reject this part of Trump’s budget.

 

“That’s the president’s budget, not Congress’ budget, I say with a smile, because we do control the purse,” she said.

 

On defense, observers expect Congress will reach a budget deal by meeting somewhere between the Obama and Trump numbers on defense, likely by moving some funds into the emergency overseas contingency operations account, or OCO, which is exempt from budget caps.

 

Though Trump is seeking $54 billion above spending caps, Congress has on average added about $18.5 billion for defense each year, according to Blakeley. “I don’t see an easy path to getting thrice as much,” she noted.

 

“I don’t think there will be as much defense buildup in practice as the budget might lay out,” Blakeley said. “It’s just not there . and the politics are just collapsing more and more every day.”

 

One possibility for more defense spending is that the House Armed Services Committee, with approval from its Senate counterpart John McCain, R-Ariz., drives for a major plus-up in OCO – in defiance of fiscal hawks, and with cooperation from some Democrats, Blakeley said.

 

“There is the space for the defense hawks, who are not only Republicans,” Blakeley said. “It will be substantively difficult for any Democrat to cooperate with the administration, [but] there might be a path to cooperate with Sen. McCain and Rep. Thornberry to say: ‘We the Congress are cooperating on a budget. We’re going to throw out the [president’s budget] when it arrives and keep this in the legislative branch.’ ”

 

http://www.defensenews.com/articles/new-defense-budget-poised-to-meet-lower-expectations

 

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HASC Chair Thornberry Introduces Latest Defense Acquisition Reform Plan

(U.S. NAVAL INSTITUTE NEWS 18 MAY 17) … Otto Kreisher

 

WASHINGTON, D.C. – House Armed Services Chairman Rep. Mac Thornberry (R-Texas) unveiled his latest attempt to modernize the defense acquisition process, focusing this time not on the way the military buys its big, expensive weapons but on helping the Defense Department “run more like a business.”

 

The draft legislation, released on Thursday, emphasizes better use of technology to speed up and improve decision making, adopting “E-Commerce” to aid use of commercial off-the-shelf products, and sharpening the auditing of contractor charges. It also seeks to reduce the life-cycle cost of weapons by emphasizing reliability and maintainability early in the development process, requiring early decisions on who controls the intellectual property, or technical data, in proposed systems and strengthening the quality of the acquisition work force.

 

But it does go after one of the chronic causes of weapon systems soaring over budget and falling behind schedule by requiring more developmental testing early in the acquisition of large, complex weapons.

 

“The big lesson we all learned with the F-35 and the [Gerald R.] Ford carrier was we were inventing it as we built it,” Thornberry told reporters in a committee office.

 

This will be the third attempt Thornberry has made to modernize and streamline the notoriously cumbersome defense procurement system, usually in close cooperation with Senate Armed Services Chairman Sen. John McCain (R-Ariz.).

 

Thornberry said one of the reasons he has put such a priority on acquisition reform was to get better value for the taxpayers’ money and “to be more agile in the face of technology that changes so fast and threats that change so fast.”

 

But the biggest reason, he said, is that “it is wrong for us to send men and women out on missions unless we provide them the very best equipment, the very best training, the very best support that this nation can produce. And if for some reason there is bureaucracy or outdated technology that prevents us from doing that, I think that’s morally wrong.”

 

He noted that their previous reform efforts focused mainly on the procurement of the major weapon programs.

“This year, we’re not as much going for the bright shiny objects, like aircraft carriers and fighters,” but “to make the Department run more like a business,” he said.

 

One of the key efforts was to promote the use of on-line shopping services, such as Amazon, to enable officials to buy commercial products instead of using the complicated and slow General Services Administration process, which usually has extensive detailed requirements and is more expensive, he said.

 

The items would have to be commercial off-the-shelf such as office electronics and supplies, subject to “a number of safeguards.” It was not clear whether there would be a dollar limit to the buys.

 

The bill also would promote use of technology to improve the ability for department and outside auditors to ensure that the prices contractors charge are fair and to make better business decisions.

 

It also would go after the frequently criticized contracting for services, which consume more of the defense budget than buying the big weapon systems, by forcing the department to collect and analyze data to evaluate and plan for contracted services.

 

Moving to the acquisition of weapons and major equipment, the bill would require greater focus at the beginning of the procurement process on reliability and sustainability, which historically makes up 80 percent of the life-cycle cost of equipment. It also would require program managers to make decisions with the contractors early in the process on what intellectual property the government could own, with the view of allowing the services to either upgrade or repair the equipment themselves or hold a competition for that work.

 

And it would require much more developmental testing to determine whether a proposed major weapon would meet the requirements and could be produced within the projected time and cost. Although such early testing could result in termination of programs after considerable investment, Thornberry said it could prevent moving a complex weapon system into production before the technology was proven, which can result in major changes to equipment already under construction.

 

Production before adequate testing was a major reason the fifth-generation Lockheed Martin F-35 Joint Strike Fighter and the Ford, the first in a new class of radically different carriers, both ran years behind schedule and far over the predicted cost.

 

Another attempt to improve the acquisition process from the inside would require new programs to improve the training and the career path for acquisition professionals. Attempting to expand and improve the acquisition workforce would be a reversal of congressional actions a decade ago that forced out hundreds of experienced workers, which forced the services to allow the contractors to design their own products and supervise the production.

 

Unlike his previous reform efforts, Thornberry did not ask ranking member Rep. Adam Smith (D-Wash.) to cosponsor this bill. But he said he was introducing the measure a month before the committee would seek to approve it, to allow members and others to review it and make suggestions.

 

In a release, Smith said, “while I support some of the proposals it puts forward, I have concerns about others. I look forward to continuing to work with him on these important issues.”

 

HASC Chair Thornberry Introduces Latest Defense Acquisition Reform Plan

 

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Expect A Lot Of Modernization Spending In The Next Few Years: Gen. Dunford

The 2018-21 budgets will be crucial in setting up the U.S. military for the future, says the Joint Chiefs chairman.

(DEFENSE ONE 18 MAY 17) … Marcus Weisgerber

 

The Joint Chiefs have been particularly focused on military readiness of late, so with the Pentagon’s 2018 budget request set to come out next week, I asked Chairman Gen. Joseph Dunford about it as we flew home from a NATO meeting in Brussels.

 

“What we began last year, and what I think you’ll see continue next year, is a recognition that we’ve got to start to look to the future as well as meeting our current operational requirements, Dunford said. “I think it’s fair to say that when we went through a period of unstable budgets, particularly starting in 2010, we delayed a lot of modernization that now has to be addressed.”

 

Areas that particularly need investment, he said, include electronic warfare, cyber, space, modernizing the nuclear triad, and maritime requirements.

 

Dunford alluded to Defense Secretary Jim Mattis’ three-step approach to repairing readiness: first, fill equipment and training holes, then increase the capacity of the military, and finally, grow its lethality.

 

“Readiness is not only getting the equipment that you have ready, not only providing training to the troops, getting the right number of people there, but it’s also recapitalizing and modernizing,” the chairman said. “Now you’re not buying yesterday’s vehicle, yesterday’s aircraft.”

 

Filling equipment gaps does not necessarily mean refurbishing battle-worn weapons. For example, if a fighter jet reaches the end of its life or is destroyed in battle, expect the Pentagon to buy a newer, more modern plane.

 

“I think in ’18, we’ll start to get a little bit closer to that, and really, as we go into ’19, ’20 and ’21, in my judgment, that’s really when we need to make sure that we’re attentive to our modernization requirements because not only then are we talking about readiness, we’re talking about modern capabilities that preserve a competitive advantage for those key areas,” Dunford said.

 

http://www.defenseone.com/business/2017/05/expect-lot-modernization-spending-next-few-years-gen-dunford/137976/

 

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Fiscal Year 2018 Budget Set To Answer Lingering Navy Acquisition Questions

(U.S. NAVAL INSTITUTE NEWS 22 MAY 17) … Megan Eckstein

 

Since the last Pentagon budget request 15 months ago there’s been a presidential election, a seven-month continuing resolution, a supplemental spending bill, promises from the new administration for a military spending spree, vows from inside the Pentagon to rebuild readiness and multiple studies looking at what a future naval fleet should look like.

 

In the churn leading up to this week’s release of the Fiscal Year 2018 budget request to Congress, questions still remain on the Navy’s acquisition and readiness plans. The following is a list of important policy and acquisition issues that Navy officials have declined to comment on but have assured USNI News and the public that answers would be found in the budget request.

 

Shipbuilding and Conversion, Navy

 

President Donald Trump called for a 350-ship fleet as early as last summer – a specific promise at the time, which was later backed up by the Navy’s Force Structure Assessment that called for 355 ships, as well as three separate Future Fleet Architecture studies that generally supported fleets of around that size.

 

With the general consensus being that the Navy needs more ships, the question now is, how will the service achieve that? The Congressional Budget Office looked at various rates of shipbuilding to analyze how much it would cost, and House Armed Services seapower and projection forces subcommittee chairman Rep. Rob Wittman (R-Va.) told USNI News he believes the Navy should aim for 355 ships in the next 25 to 30 years.

 

Vice Chief of Naval Operations Adm. Bill Moran told USNI News the Navy may need as $150 billion over the current shipbuilding plan to “jump-start” shipbuilding and get on a trajectory to 355 – helping shipyards make the investments in their workforce and facility needed to build today’s ships faster, and to prepare for new classes of ships that will be central to that 355-ship fleet. And Chief of Naval Operations Adm. John Richardson told reporters last week that the industrial base could handle 29 additional ships over the next seven years beyond what the current shipbuilding plan calls for. But the question remains, will the Navy actually seek the money it needs to get on that trajectory to 355 as fast as the service and the shipbuilders can handle? And if the Navy does look for a quick buildup, will it focus on the massive “USS” warships already under construction – aircraft carriers, attack submarines, destroyers and amphibious transport docks – or will it rely on some less expensive “USNS” ships, such as the expeditionary mobile base (formerly called the Afloat Forward Staging Base) to help bolster the fleet buildup numbers?

 

While FY 2018 itself isn’t likely to include major investments in shipbuilding – Defense Secretary James Mattis made clear in a Jan. 31 memo that 2018 would focus on wholeness, with acquisition to support a force buildup starting in 2019 – there may be some investments to help shipyards train new employees, build additional indoor work facilities and more to support an upcoming surge in work. And with the 2018 budget submission will come an outline of spending plans for the Future Years Defense Plan that runs through FY 2022, so much about the Navy’s buildup should be revealed this week.

 

Littoral Combat Ship

 

The Navy has planned to transition from its Littoral Combat Ship to a frigate since 2014, but in recent months it has totally revamped its plan for doing so, starting over with its frigate requirements development process and moving from a faceoff between the two LCS builders to an open competition for shipbuilders around the globe.

Program and surface warfare officials vowed in a recent hearing that more details about the new transition plan would be included in the 2018 budget submission.

 

Questions that remain are: how many LCSs will be purchased before the frigate transition takes place? In its 2017 budget request, the Navy outlined a plan to buy two in 2017; one a year in 2018, 2019 and 2020; and then two in 2021. However, Program Executive Officer for LCS Rear Adm. John Neagley said at the recent hearing that the two builders, Austal USA and Marinette Marine, needed the Navy to buy three ships a year to sustain their yards and allow them to compete for the frigate. Lawmakers forced the Navy to buy three in the recent 2017 spending bill, but at the hearing Neagley declined to comment on how many ships the Navy would actually buy in 2018 and beyond, only noting that the industrial base required three a year.

 

As for the frigate, when will the Navy complete its requirements development and begin to compete design contracts to industry? When does it believe it can award construction contracts? How much will the frigate cost? Some or all of these questions may be answered in the Navy’s outline of the FYDP.

 

Attack Submarines

 

Perhaps the number-one thing the Navy wants to do if more funding is available for a fleet buildup is to buy more Virginia-class submarines. The Navy is facing a massive submarine shortfall in the next decade, at the same time it is facing an increase in work for the two submarine shipbuilding yards due to the introduction of the Columbia-class ballistic-missile submarine and the Virginia Payload Module addition to the SSNs. The Navy originally intended to buy two SSNs in years without a SSBN, and one of each during SSBN acquisition years. In 2015 then-acquisition chief Sean Stackley said the Navy was looking at industrial base capacity to build two SSNs every year, regardless of the Columbia subs. Then perhaps each SSN would have a Virginia Payload Module built in, to give it extra missile-carrying capacity, rather than just one VPM a year. And then some lawmakers wondered if perhaps industry could build three SSNs a year. This budget submission should reveal how the Navy intends on handling the massive workload for General Dynamics Electric Boat and Huntington Ingalls’ Newport News Shipbuilding through FY 2022.

 

LPD to LX(R) Transition

 

Budgeting plans surrounding the LX(R) amphibious dock landing ship replacement program, and the LPD amphibious transport dock the LX(R) is based on, have changed multiple times in the last couple years. Previous budgets had the final LPD bought in FY 2016 and LX(R) beginning in FY 2020, which would have left a production gap at Ingalls Shipbuilding and may have risked the yard having to lay off workers, only to try to rehire them again. So in FY 2016 lawmakers cobbled together funds for an LPD-28, a 12th ship in the class, as a bridge from LPD to LX(R), as well as a small sum of money to begin accelerating the LX(R) design.

 

This year’s final FY 2017 spending bill, just passed by Congress this month, both adds nearly $1.8 billion for a 13th ship, LPD-29 – the production line is moving so efficiently at Ingalls that even LPD-28 was now expected to leave a production gap – and more than $25 million funding to accelerate LX(R) development. The 2018 budget should reveal new details about the updated transition schedule, as well as whether the LX(R) will be included in the Navy’s fleet buildup or whether the service will allow the program some time to prove itself ahead of looking at speeding up production.

 

Aircraft Carriers

 

The nuclear-powered aircraft carrier may take the longest of all the Navy’s ships to build, but service leadership hopes to include the carriers in the fleet buildup effort as well. The Navy currently buys carriers one every five years, a rate that is less efficient for sole builder Newport News Shipbuilding and has led the service to dip below the congressionally mandated 11-carrier fleet. Industry has long been pushing for three- or four-year centers on the aircraft carriers, and CNO Richardson said last week that his shipbuilding acceleration would include a quicker carrier construction rate. This budget document is likely to reveal just how fast the Navy thinks it and its industry partners can build a carrier.

 

Cruiser Modernization

 

The Navy and Congress have been at odds over how to approach the modernization and life extension of the Ticonderoga-class guided-missile cruisers. The Navy in 2013 suggested decommissioning half the fleet to deal with sequestration, arguing it didn’t have the money to man and operate them, let alone modernize the full class of ships. Congress in FY 2015 mandated that two cruisers a year be inducted into the modernization program, which led to the 2/4/6 plan – in which two ships a year would be inducted into the modernization program, for no longer than four years each, with no more than six ships laid up at any given time. The Navy has continued to push back against that, including in both its FY 2016 and 2017 budget requests, arguing it could save billions of dollars if it laid up all the remaining cruisers and modernized them only as older cruisers begin to decommission. This week’s budget will show whether the Navy will this year go along with the 2/4/6 plan or push back again to save money on the remaining five or so cruisers yet to be inducted into the modernization program.

 

Super Hornets v. Joint Strike Fighter

 

The Navy’s plans for its future air wing have long centered around having the fourth-generation F/A-18E-F Super Hornet and fifth-generation F-35C Joint Strike Fighter operating side-by-side. One a stealthy battle management tool and the other a lethal bomb truck, the Navy never intended to compete them against one another, until President Donald Trump on Dec. 22, 2016, suggested in a tweet that Boeing could develop a Super Hornet variant “comparable” to the JSF for a lower cost. As a result, Defense Secretary Mattis ordered a review of the two aircraft in a Jan. 26 memo. The budget should indicate how the Navy intends to move forward.

 

Hypoxia Concerns

 

The Navy has a growing problem with breathing-related issues for fighter jet pilots – both hypoxia, in which pilots cannot get enough oxygen or receive contaminated oxygen from their masks, and cabin pressure issues that can lead to decompression sickness. The number of so-called physiological episodes is increasing at an increasing rate and affecting all the Navy’s jets: legacy F/A-18 Hornets, F/A-18E-F Super Hornets, EA-18G Growlers and T-45C Goshawk trainers. Navy leadership has vowed to address this in a resource-unconstrained manner, taking whatever steps are necessary to find the root of the problem, so this budget could give some indication of how the Navy intends to do that.

 

Fiscal Year 2018 Budget Set to Answer Lingering Navy Acquisition Questions

 

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Trump Budget Fails To Live Up To ‘Historic’ Defense Promises, Analysts Say

(DEFENSE NEWS 22 MAY 17) … Aaron Mehta

 

WASHINGTON – The first Trump administration budget plan fails to live up to the president’s claims of a “historic” defense increase, and will likely meet stiff resistance on the Hill for what analysts say are unrealistic plans for cuts to non-defense spending.

 

Details of the fiscal year 2018 budget, released to reporters Monday evening, also confirm an increase in nuclear weapons funding and changes to foreign military aid, as previously reported by Defense News.

 

The budget – which includes $603 billion earmarked for national security issues, including defense – certainly reflects a major attempt at reshaping the social safety net. But when it comes to defense, the planned increase is fairly pedestrian, or as House Armed Services Committee chairman Rep. Mac Thornberry, R-Texas, said Monday, “basically the Obama approach.”

 

Todd Harrison, a budgetary expert with the Center for Strategic and International Studies, wrote Monday that the real numbers don’t match up to the rhetoric from President Donald Trump that his spending plan will rebuild the military.

 

Harrison notes that the budget plan represents only the ninth-largest increase in the past four decades for defense spending, While the budget request features $54 billion for defense above the Budget Control Act (BCA) caps in place for FY18, that’s only $19 billion more than was planned for this year by the Obama administration.

 

Mackenzie Eaglen, a defense analyst with the conservative American Enterprise Institute, called the defense plan “middle of the road, vanilla stuff. It’s a budget that is in line with recent historical precedent and is nothing extraordinary or historical.”

 

The budget documentation notes in a footnote that defense spending in the future will be based on the results of several major strategic reviews now underway, including the National Security Strategy and the Nuclear Posture Review. That was echoed by a source familiar with the defense budgeting process, who told Defense News that the budget is largely a placeholder until those decisions can be made.

 

There was “largely good work” done by the team that started assembling this last year, the source said, but this budget reflects awareness that strategic shifts are coming and was designed to leave wiggle room for the administration and DoD’s incoming leadership to color within the lines.

 

Instead, this budget focuses on doing repairs where needed – something that leaves Eaglen skeptical about major shifts coming in the future.

 

“They’re going to try and spin it that they will get the rebuild next year. I’ve seen that movie. Anytime you try to do things the next year, it just becomes the next year,” she said.

 

DOA On The Hill

 

Eaglen sees the fingerprints of White House Budget Director Mick Mulvaney all over the document, even more so than Trump.

 

“This budget is Mick Mulvaney’s dream. He had a lot of discretion in terms of what choices were made. There is some Trump stuff here – no cuts to Social Security, new paid parental leave – but this is a Mulvany budget through and through,” Eaglen said.

 

And like Mulvaney’s budget plans when he was a member of the House Freedom Caucus, this plan will likely be dead on arrival on the Hill, due to the budgetary tradeoffs it relies on.

 

In the budget documentation, the administration expresses plans for an annual 2.1 percent growth for defense discretionary spending, accompanied by an annual 2 percent reduction in non-defense discretionary spending – not just for FY18, but for the next decade.

 

“As we’ll see with the ’18 budget, the one defense dollar up and one non-defense dollar down trade will never, ever have enough votes to pass, period,” Eaglen said, noting that Democrats will never agree to such a tradeoff. “So this notion that for the next 10 years it will happen is kind of crazy.”

 

Asked about the budget’s chances on the Hill, Harrison said, “Dead on arrival is an understatement. The cuts to non-defense discretionary spending in the out years may even spook some fiscal conservatives.”

 

Interestingly, the documentation also calls for keeping budget caps in place through 2027, despite the caps associated with the BCA set to expire in 2021. Aside from a few members of Mulvaney’s Freedom Caucus, there is zero appetite on the Hill for continuing mandatory budget caps after they expire, Eaglen said.

 

Speaking to reporters Monday, Mulvaney acknowledged that Congress will have its say, but defended the budget plan as one required to meet the vision laid out by the president.

 

“Do I expect them to adopt this 100 percent whole-heartedly, without any change? Absolutely not. Do I expect them to work with the administration on trying to figure out places where we’re on the same pages?

 

Absolutely,” Mulvaney said. “I don’t think it invalidates the importance, the credibility of the president’s budget, just because they’re not going to fund it wholeheartedly.”

 

OCO’s End?

 

As a House member, Mulvaney made targeting the use of overseas contingency operations (OCO) a signature issue. At first glance, that appears to be reflected in the budget, as the 10-year plan calls for the dialing down of OCO funding to almost nothing.

 

Harrison isn’t impressed, noting that a footnote in the budget document says the OCO numbers are based on several assumptions that simply may not happen.

 

“The Obama admin used to do this, too. It’s just a placeholder and not a proposal,” Harrison said. “Obama’s OMB had talked about phasing out OCO, as well. Nothing happened.”

 

OCO remains popular on the Hill, where it has served as a useful vehicle for supporting DoD despite the BCA-imposed restrictions on spending. The wartime fund is exempt from the budget BCA caps.

 

Speaking Monday at the Brookings Institution, Thornberry reiterated a call for defense spending to reach $640 billion in base dollars, with an additional $60 billion in OCO. The chairman told the crowd he was not trying this year to change the longstanding practice of parking base budget costs in OCO – but it was something he was open to.

 

“It does not accomplish that goal,” he said. “I think that is a worthwhile conversation to have. What concerns me is if there are transfers from OCO to the base budget and people call it a defense increase, it will not be accurate. It will not tell you the facts, which is you have not really increased anything at all. You’ve just changed the label on the money.”

 

Putting base requirements into OCO, Thornberry said, “makes it very difficult to plan and that that we are not spending it as efficient as it could be, and yet, we have become very dependent on that.”

 

Foreign Financing Changes

 

Mulvaney confirmed that changes would be coming to the State Department’s Foreign Military Financing programs, including details, first revealed by Defense News, that Pakistan’s military aid will be slashed compared with previous levels.

 

The OMB director also confirmed that several countries would have their FMF financing changed from grants to loans, although he noted Israel and Egypt would be exempt from such changes.

 

“Our argument is instead of giving somebody $100 million, we can give them a smaller number with a loan guarantee so they can actually buy more stuff,” he said. “State still has some flexibility to come up with the final plan on that, but writ large, we have proposed to move several countries from a direct grant program to a loan guarantee program.”

 

Foreign Military Financing has largely taken the role of a grant given to U.S. allies to allow them to buy defense equipment. With the exception of Israel, all countries that receive FMF have to spend it on goods made in the United States, a boost for the domestic defense industry.

 

Analysts have questioned whether countries which receive FMF grants now will be able to take on the costs of a loan program, and whether those nations may instead look to buy cheaper goods from competitor nations such as Russia or China.

 

Nuclear Plus-Up

 

According to the budget materials, the National Nuclear Security Agency (NNSA) will receive a $1.4 billion increase from 2017 levels, a roughly 11 percent increase on the agencies budget. That will certainly be welcome from NNSA head Frank Klotz, a retired Air Force general who has expressed a desperate need for funding to help balance out a backlog of maintenance projects at nuclear facilities.

 

However, the funding is expected to largely come in the form of NNSA’s weapons accounts, according to a budget leak from the Third Way group revealed last week. A recent Government Accountability Office report warned that NNSA’s weapons development funding was too small to meet requirements for the coming decade.

 

Andrew Webber, who served from 2009 to 2014 as Assistant Secretary of Defense for Nuclear, Chemical & Biological Defense Programs, believes that plus-up to NNSA accounts reflects that Trump is following through on his stated desire to modernize America’s nuclear weapons.

 

“The big spike in weapons activities must mean that Trump is accelerating his new nuclear weapons like the LRSO,” Webber said, referring to the new nuclear cruise missile project that some Democrats on the Hill have tried to delay.

 

Joe Gould in Washington contributed to this report.

 

http://www.defensenews.com/articles/trump-budget-fails-to-live-up-to-historic-defense-promises-analysts-say

 

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Navy’s 2018 Budget Addresses Readiness Through Maintenance, Spares, Infrastructure Improvements

(U.S. NAVAL INSTITUTE NEWS 23 MAY 17) … Megan Eckstein

 

THE PENTAGON – 2018 may be the Navy’s opportunity to dig out of a massive readiness hole found in its aviation enterprise and at the public shipyards, with the Pentagon’s budget request focusing on maintenance and readiness spending.

 

Though acquisition spending is down compared to last year, the service is requesting $51.3 billion for its operations and maintenance budget, compared to $48.2 billion in 2017 and $46.9 billion in 2016. That 6.5 percent increase includes $2.5 billion more for air operations and $4 billion more for ship operations.

 

On the ship side, the Navy is looking to increase is public shipyard workforce from 33,850 full-time equivalent workers to 34,988, or a 3.4 percent increase, “to increase shipyard throughput,” the Navy’s budget highlights book notes.

 

“Additionally, to help reduce [naval shipyard] workload and better align workload to capacity, FY 2018 funds planning for private sector submarine maintenance to reduce the impact to follow-on maintenance work. These efforts minimize the more expensive future execution of deferred maintenance work, maximize utilization of private and public maintenance capacity, and support [the Navy’s Optimized Fleet Response Plan],” the book reads, referring to persistent backlogs of work at the public yards that have left multiple attack submarines unable to get into the yards for work.

 

This increase in shipyard personnel and assistance from the private sector will contribute to the Navy being able to conduct 71 ship maintenance availabilities, or 10 more than last year, Deputy Assistant Secretary of the Navy for Budget Rear Adm. Brian Luther told reporters during a budget rollout briefing today. Those availabilities will help chip away at the $3.5 billion in deferred maintenance the Navy faces, he added.

 

Ship maintenance is funded at 100 percent of required levels through both base budget and Overseas Contingency Operations funding, for a total of $11.8 billion.

 

On aviation, the Navy and Marine Corps looked to address support accounts that contribute to ongoing readiness challenges – spare parts, logistics and other flight line readiness enablers.

 

“FY 2018 funding supports the maximum executable requirements of deployed units, units training in preparation to deploy, and of non-deployed units for sustainment and maintenance readiness levels,” according to the Navy budget highlights book.

 

“The primary driver of the increases in FY 2018 funding in comparison to FY 2017 is the increase in cost-per-flight hour for various Type/Model/Series in repairable parts, consumables, and maintenance contracts.”

Luther expanded on the topic of aviation readiness, noting that “aircraft depot maintenance is funded to capacity, which is 89 percent of the requirement. This is an increase from last year, where we funded the air depot maintenance to 85 percent. Capacity is limited for different reasons at our fleet readiness centers. Some are limited by the hiring of civilian personnel, others by physical space and aging tools and materials. In all cases, we are investing to correct those limitations.”

 

Despite those limitations, “aviation spares is funded to the highest level in the last 14 years, at 91 percent,” Luther said.

 

“The aviation logistics support has increased 6 percent to a high of 87 percent of the requirement. These logistics contracts for the F-35, KC-130J and MV-22 and E-6B are funded at an all-time high,” he added, making clear that “executing the training and deployed flight hours requires more than just the flying and depot maintenance funding; it requires sufficient funding for enabling accounts such as aviation logistics, aviation support and . aviation spares.”

 

The Pentagon also sought to address readiness through weapons procurement, which U.S. Pacific Command Commander Adm. Harry Harris discussed last month in congressional hearings. Harris told lawmakers that “we’re short on things like small-diameter bombs. These are not exciting kinds of weapons, these are mundane sort of weapons, but they’re absolutely critical to what we’re trying to do not only against North Korea but also in the fights in the Middle East. So we have a shortage of the small-diameter bombs throughout the inventory, so the stockpile of the small-diameter bombs that PACOM has, for example, we send them, and rightfully so, to CENTCOM, Central Command, and AFRICOM. That’s a fight we’re in and they need them, so we send them there and they use them.”

 

As a result, Defense Secretary James Mattis created a “preferred weapon” status within the FY 2018 budget request, John Roth, acting as the Pentagon comptroller, told reporters today.

 

“As we closed out this budget over the last two or three weeks in particular, a great deal of concern was being raised with current inventory levels and, particularly given some of the [weapons] expenditures in the CENTCOM area of operations as we talk, and so the secretary mandated and insisted that we fully fund to the maximum extent possible the full production capability for certain selected preferred munitions – things like the Hellfire, things like the JDAM and the Guided Multiple Launch Rocket System,” Roth said.

 

Preferred weapons include the Hellfire air-to-surface missile, Tomahawk Land Attack Missile, small-diameter bomb, Advanced Precision-Kill Weapon System, Guided Multiple Launch Rocket System and Joint Direct Attack Munition.

 

Though still taking risk in shore infrastructure to help pay for operational fleet readiness, the Navy and Marine Corps are making some major investments in military construction that directly help the readiness rebuilding effort. These MILCON projects – $73 million for the Ship Repair Training Facility at Naval Support Activity Norfolk; $62 million to improve the Paint, Blast and Rubber Facility at Portsmouth Naval Shipyard; $61 million for an F/A-18 Avionics Repair Facility replacement at Naval Air Station Lemoore; and more – pushed the services to a 13-percent higher “major construction” budget request than last year, and 11.6 percent higher MILCON budget overall.

 

Despite the emphasis on restoring readiness – with 100 percent of the ship readiness requirement being funded and about 90 percent of the aviation readiness requirement being funded, which are higher than historical averages, the Marine Corps is only funding its ground equipment depot maintenance at 79 percent of the requirement.

 

Overall, Luther said of the Navy and Marine Corps budget request, “it is important to note, however, the effects of multiple years of insufficient resources cannot be corrected by the increases of one budget year. The department will require stable, predictable funding over multiple years to achieve sustained and positive results.”

 

Navy’s 2018 Budget Addresses Readiness Through Maintenance, Spares, Infrastructure Improvements

 

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Amid $52 Billion Plus-Up, DoD Looks To Trim Spending On Service Contracts, Health Care

(WFED AM RADIO WASHINGTON DC 24 MAY 17) … Jared Serbu

 

As expected, the final 2018 Defense budget the Trump administration submitted to Congress Tuesday calls for $640 billion in military spending, $52 billion more than the current year and breaking the current budget caps by the same amount.

 

But even amid a healthy plus-up in the top-line amount, the Pentagon says it’s found some modest ways to produce “efficiency” savings in 2018. Officials billed the budget as a fulfillment of two commitments Defense Secretary James Mattis made when he took office in January: rebuilding the military’s readiness and reforming its business operations.

 

“There are a number of ongoing activities that we continue to pursue,” said John Roth, the career senior executive who’s currently performing the duties of DoD comptroller. “We’re continuing to look at the major headquarters and to reduce them by 25 percent. We continue with acquisition reform, particularly with Better Buying Power 3.0. We continue to take a hard look at our service support contracts and make sure that they’re appropriate.”

 

The department said the largest chunk of the savings – $1.2 billion – will come from changes to business processes in the headquarters of the military services and the Office of the Secretary of Defense.

 

Its budget document does not identify all of the ways in which DoD expects to reach that total, but offers a few examples:

.               From now on, the Pentagon’s deputy chief management officer will have to sign off on any new business IT investments that cost more than $1 million over five years. DoD expects that change to save $77 million in 2018 alone.

.               The department says it will save $120 million with a change to travel policy, using the “lowest acceptable” airfare in GSA’s City Pair program as the default option for domestic flights.

.               DoD expects to save $382 million by eliminating “redundant” service contracts. That process will be led by the department’s Service Requirement Review Boards, a process DoD set up last year to begin forcing Defense organizations to justify their use of support contractors.

.               The budget proposes modest increases in staffing levels at the Defense Contract Audit Agency, the Defense Contract Management Agency and the DoD Inspector General’s office to increase oversight over contracts.

 

The Pentagon also hopes to glean some savings from military compensation.

 

The 2018 budget proposes a 1.9 percent pay raise for civilians and 2.1 percent raise for military members, lower than the 2.4 percent increase federal employees would otherwise receive based on the Employment Cost Index. The department projects the lower raise would save about $200 million in 2018.

 

The spending plan would also require some of DoD’s health care beneficiaries to pay more for their own treatment. While active-duty service members would continue to be cared for at no charge, the budget would introduce enrollment fees and deductibles for family members and retirees.

 

Congress already allowed for those fees in the 2017 Defense authorization bill, but only applied them prospectively – to service members who join the military after January 2018.

 

“What that did, in effect, is pretty much wipe out any to near-term savings and created what we think is an awkward two-tier system. Some people will be under one system and some people will be under another for the next 50 years,” Roth said. “We’re going to ask the Congress if they would consider eliminating the grandfathering. We’d like to exempt the medically retired and family members of those who die on active duty.

 

We think that’s just a tweak in a law that perhaps the Hill has overlooked. And we continue to look at efforts to rely on telehealth, nurse advice lines, those kinds of things to try to improve the beneficiary’s experience with the process.”

 

The cost-share changes would be most impactful for retirees and their families. Within that group, the department estimates an average family of three’s out-of-pocket medical costs would rise from about $1,500 a year to $2,000 if the proposal is approved.

 

The department also pressed for what it said would be a “simplification” of the TRICARE health insurance system. Currently, beneficiaries can choose between TRICARE Prime, a managed-care option with low-to-no co-pays and TRICARE Standard, a more flexible plan that does not require enrollment but involves more out-of-pocket costs. The budget proposal would merge the two into a single plan that more closely mirrors private-sector health plans, with “in-network” providers costing beneficiaries less than out-of-network providers.

 

Another new element: beneficiaries would have to take active steps to take part in the health system during an annual open enrollment period, similar to what’s required for civilian employees in the Federal Employee Health Benefits Program. As of now, under TRICARE Standard, beneficiaries need only show their DoD ID card at a health care provider’s office to get TRICARE coverage.

 

Apart from the $2 billion in efficiency savings in 2018, the Trump administration believes DoD could save another $2 billion per year in perpetuity if Congress allows it to conduct another round of Base Realignment and Closure (BRAC), a request DoD has made in every budget proposal since 2012, but which Congress has rejected each year.

 

The latest proposal would initiate a BRAC round in 2021, making it the first since 2005. The Pentagon’s rough calculations show it’s currently paying to maintain 22 percent more base capacity than what’s militarily useful.

“The sum-total of the five rounds we’ve had since the 1990s has resulted in approximately $12 billion a year in savings. It’s a gift that keeps on giving,” Roth said. “All we’re asking for at this stage is the authority: we can’t even do the detailed analysis under current law. What we have is a parametric estimate. If that number is anywhere near correct, we are forgoing a very significant opportunity to get some savings. [BRAC] is a very structured, systematic, rigorous process that ultimately, Congress has the final say on. We think we’re getting some signals from at least a couple of committees that are more amenable to it and so we will be pushing that pretty hard.”

 

At the same time, the budget proposes to spend more on improvements to existing infrastructure than DoD has put forward in the last several years.

 

A multi-year maintenance backlog has led to one out of every five Defense facilities falling into “failing” condition; the 2017 budget provided only enough funding to conduct 74 percent of the military’s needed facility upkeep. The 2018 version would add several billion dollars to preventative maintenance and military construction accounts – about 25 percent more than last year.

 

“This is an area where when you get constrained budgets and you have lower top-lines, you tend to take risk and you tend to defer. You’re going to wait to fix that window until the next year as long as the roof’s not leaking,” Roth said. “We’ve had pretty anemic military construction facilities budgets over the last four-or-five years, but there’s a readiness nexus with this. So we’re investing in operational and training facilities and maintenance and production facilities in particular.”

 

Roth said getting the Defense Department in a position to pass a financial statement audit is also one of Secretary Mattis’ top reform priorities.

 

Per a congressional mandate, DoD is supposed to declare itself “audit-ready” by September. Roth said that means the department will continue with its previous plan to begin subjecting itself to full-scale audits in 2018, but that no one should expect a passing score in the first year.

 

“One of the reasons we are where we are is for about 20 years, no one really cared. That’s why we didn’t move the ball,” Roth said. “In the last six or seven years, it became a high priority for the entire department. This isn’t something that only a comptroller and financial manager can do, it needs a buy-in from the entire enterprise.

 

We’ve made an enormous amount of progress getting, quote ‘ready,’ but we’re not going to get to a clean audit in one year. But we won’t know until we start the audit. We’ll get some good audit opinions and frankly, we’ll get some bad audit opinions. Those will lead to remediation efforts in terms of either changing business processes or changing accounting processes and the like. But we have to start, and that’s the importance of 2018.”

 

Amid $52 billion plus-up, DoD looks to trim spending on service contracts, health care