Norquist Pledges To Shakeup Budget; Sharp Eye On R & D

WASHINGTON: The White House’s pick to be the next Deputy Defense Secretary, David Norquist, has pledged to throw his weight behind tackling one of the Pentagon’s most intractable problems: reforming the military’s complex budgeting and business processes.

The pledge isn’t new. Practically every DoD official has promised to trim the fat surrounding the moribund process for identifying requirements and actually building new weapons systems. But with the rapid rise of China as a military powerhouse and as commercial technologies continue to blow past military capabilities, the issue is more acute than at any other time in history.

In written answers submitted to the Senate Armed Services Committee before his nomination hearing Wednesday, Norquist pledged to “focus on improving” the Program Budget Review process, adding, “specifically, I will revise budget review timelines and data collection standards to maximize senior leader decision-making quality and timing.”

Norquist, who as comptroller oversaw the DoD’s first-ever audit last year — the department, as expected, failed — is in  a unique position to move the needle if confirmed as deputy given his years of experience looking at the Pentagon’s books. He said elsewhere in his written answers that he plans to “implement new ideas for overseeing the business operations of the Department, to include a focus on monthly execution of critical operations.” 

Part of the plan includes pushing the Pentagon to invest more in developing cutting edge technologies like hypersonics and AI. But with research and development spending squeezed by flatlining Pentagon budgets, the Pentagon will have to make some tough choices in the coming years.

Norquist, during his testimony before a friendly Senate Armed Services Committee likely to fast track his nomination, reiterated the areas where the gap between the US and rivals China and Russia “is most noticeable,” including hypersonics, Artificial Intelligence and cyber. But, there’s a but.

“One of the challenges that is facing the department, even as we maintain readiness and the right force structure size, is to ensure that we are investing in those cutting-edge technologies that not only are just advances to warfare, but may change dramatically the way warfare is fought,” he said.

Norquist has been performing the duties of deputy secretary in the Pentagon since Jan. 1. The position sat empty since Patrick Shanahan, who held that job under former Defense Secretary Jim Mattis, took over as acting secretary when Mattis resigned in December.

There is broad consensus across the Senate and Pentagon that Norquist needs to be seated as soon as possible, given the long, seven-month gap between Senate-confirmed officials at the top of the Pentagon’s hierarchy. Defense Secretary Mark Esper was officially sworn in Tuesday evening, and has already made plans to tackle the crisis in the Persian Gulf with Iran, and has issued memos to staff on combating contamination at domestic bases and doing more outreach to the press. 

A key task for Norquist will be managing the research and development budget, which is seeing an influx of critical new programs looking for funding.

While the administration requested $104 billion for R&D in fiscal 2020 — about $8 billion more than what was allocated in 2019 — that came as part of a $750 billion topline. The new two-year budget deal reached between the White House and Congress dropped that to $738 billion, followed by a $740 billion DoD budget in 2021. Those numbers represent next to zero real growth when inflation is taken into account, making the squeeze on R&D budgets even more acute as rising personnel and sustainment costs will vie for major pieces of the pie.

Andrew Hunter, director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies, told me that tight R&D budgets represent “a core challenge” for DoD, and have significantly hampered the ability of defense planners to implement 2018’s National Defense Strategy. “The problem is even worse than the budget numbers imply,” he said, “because within R&D, the portion of that funding that goes to industry for contracts to develop the next generation of systems fell dramatically under sequestration and has not meaningfully recovered.”  

The importance of investing quickly and substantively in next-generation tech like AI, hypersonics, and cyber was underscored recently by the news that six Chinese companies have stormed into the top 15 global defense firms, according to Defense News’ annual Top 100 list of the globe’s biggest defense firms. There’s little daylight between Chinese manufacturers and the government, giving Beijing some advantage over the US in being able to make use of the latest commercial technologies in defense programs.

The Pentagon is trying to close that gap — if even just a little — by making wider use of Other Transaction Authority contracts that allow DoD to fund rapid prototyping projects quickly without having to hack through the cumbersome government acquisition process, but with tighter, more crowded R&D budgets, there may be less opportunity to do that.

Asked Wednesday about the two-year budget deal and if he was concerned over the lack of real growth in 2021, Norquist did not delve into the details. While praising the stability that the end of sequestration and budget stability bring, he said, “I understand the importance of both security and solvency, and that not everyone gets everything they want.”

There are other concerns over the management of the R&D accounts across the Pentagon, as well.

There were persistent rumors that Mike Griffin, undersecretary for research and engineering (USDR&E), would be the next DoD official to leave the building. Some of Griffin’s decisions have rankled others at the Pentagon, including two senior officials who worked for him on space and rapid acquisition issues.

After just four months on the job, the director of the nascent Space Development Agency, Fred Kennedy, stepped down before he could be asked to resign after just four months on the job. Kennedy and Griffin were said to be at odds over Kennedy’s plans for SDA to start partnering with commercial companies to quickly field new types of satellites. 

Kennedy’s departure came days just after Chris Shank, head of the Strategic Capabilities Office, tendered his own resignation in protest against Griffin’s plan to transfer his shop to live under DARPA. Griffin’s decision came despite the opposition of many on Capitol Hill and senior military commanders and the Joint Staff. Shank left no doubt over the reason for his departure: “My integrity and belief in SCO’s mission is more important to me than my friendship over many years with Mike (Griffin).”