With draft bill, Republican appropriators tee up defense spending divide in House

Streaks in the sky form at sunset behind the U.S. Capitol Building on November 13, 2019 in Washington, DC. (Photo by Mark Makela/Getty Images)

WASHINGTON — The House Appropriations Committee is poised to mark up the Defense Department’s fiscal 2024 budget request on Thursday, and an early draft of the language shows brewing fights over social issues and a $4 billion cut to procurement coffers, including the decision to strip dollars away from multi-year munition contracts.

Last week the House Appropriations Defense subcommittee marked up the fiscal 2024 spending bill behind closed doors and, according to a version posted online by Inside Defense, Republicans included the $886 billion national security topline as negotiated in the debt ceiling deal, while taking aim at several top Democratic issues.

“The committee’s recommendation supports full funding for many of the [Defense Department’s] top priorities, such as the B-21 bomber, the Columbia-class submarine, and a pay increase for uniformed personnel,” lawmakers write. “While the committee appreciates the budget request’s increase in funding for the department, it is concerning that the administration has poorly prioritized funds within the request to include proposals for climate change initiatives, partisan policies that may harm recruitment, and the use of legacy business systems and processes.”

When it comes to individual pots of money, the panel wants to add nearly $3 billion to the administration’s request for operation and maintenance accounts and $2 billion for research and development programs, while stripping nearly $4 billion away from procurement coffers and $953 million for personnel.

That $4 billion procurement hit includes cuts to Pentagon plans to ink several high-profile, multi-year munition procurement deals next year. Specifically, when the White House delivered its FY24 budget request to Capitol Hill earlier this year, it outlined plans for five multi-year munition buys next year — the Naval Strike Missile, Standard Missile 6, AIM-120, LRASM and JASSM-ER — before subsequently adding Patriot interceptors and Guided Multiple Launch Rocket System (GMLRS) to that list. The idea, in part, was to incentivize industry to ramp up production so that it could better stockpile weapons for a potential conflict in the Indo-Pacific.

Although the defense subcommittee said it “strongly agrees with the need to ensure the munitions industrial base has steady demand from the Department of Defense to meet national defense requirements,” the Pentagon ultimately “failed to show how the use of these proposed contracts would meet the standards as outlined in statute” that requires cost saving.

“Since the department has failed to provide the committee with cost savings expected to be generated by [economic order quantity] EOQ funding and in some instances has communicated an expectation of no cost savings from multi-year contracts, EOQ funding is not justified at this time,” the draft legislation says.

“The committee expects that prior to the transmission of its fiscal year 2025 president’s budget request, the department will demonstrate how EOQ funding would generate cost savings across the respective multiyear contracts,” it adds.

Despite those concerns and words of encouragement to try again next year, the panel includes $1.4 billion for advance procurement and industrial base funding to help industry boost munition production.

Given that this is draft legislation, Pentagon officials still have time to convince House members to change course or, if Senate appropriators support the multi-year deals going forward, it could be an issue to be ironed out during negotiations between the two chambers in coming months.

“It’s hard to comment on pending legislation… [but] the department is of course in touch with Congress and working with them to address what we need in the budget,” Deputy Pentagon Press Secretary Sabrina Singh said today during a press conference when asked about multi-year buys. “So, I won’t get ahead of any of those conversations that are happening.”

Drilling Down

Aside from the multi-year munition roadblock, the draft bill includes multiple changes for the services.

For the Army, for example, several programs are aligned for budget hikes, including a $205 million addition for the Army’s Self-Propelled Howitzer Paladin Integrated Management (PIM) program, and an additional $80 million provided for Stryker upgrades.

When it comes to Air Force programs, the House subcommittee also voted to defund the troubled Air-launched Rapid Response Weapon (ARRW), while adding $150 million to the budget to keep the Adaptive Engine Transition Program alive next year.

The Space Force is also aligned for several cuts including $605 million slashed from the service’s procurement request of $4.7 billion, bringing that total down to $4.1 billion. That cut includes a $60.6 million from the $119.7 million request for the GPS III Follow-on (GPS IIIF) program.

For Space Force research and development coffers, the appropriations mark slices almost $400 million off, bringing it down to about $18.8 billion. This includes a $45.5 million reduction to the administration’s request for the long-troubled Next Generation Operational Control System (OCX), while the Next-Generation Overhead Persistent Infrared (Next-Gen OPIR) missile warning program was reduced by $35.6 million.

Innovation Dollars

House appropriators, meanwhile, want to inject more than $1 billion into the Defense Innovation Unit to create a new “hedge portfolio,” while also funding the innovation hub’s fielding and prototyping efforts. The hedge portfolio would fund the fielding of emerging technologies within one to three years.

“This hedge portfolio of many smart, affordable, modular, and sustainable systems could include, but is not limited to, low-cost, light-logistics, multi-domain drones, satellites, and munitions; agile communications, compute and sensor nodes; and artificial intelligence agents and users,” according to the bill. “It could create asymmetric advantage to support combatant command operational challenges like contested logistics, electronic warfare, resilient communications, Joint All-Domain Command and Control, and weapon and platform capacity.”

The proposed spending bill also tasks the DIU director with providing a report to the congressional defense committees on an acquisition strategy and spending plan for 10 projects under the hedge portfolio that support the Joint Warfighting Concept. The bill also says that the portfolio will be developed in coordination with the Joint Staff and combatant commands through an advisory board also composed of the Chief Digital and Artificial Intelligence Officer (CDAO).

“These funds should mature fielding models like Task Force 59 and propagate acquisition models like AFWERX Prime to the joint community, accelerating military relevant technologies with external capital and talent by using the Department’s unique ability to reduce technical, regulatory, and financial risk in emerging technology sectors,” the bill says.

The committee is also recommending $649.8 million in DIU funding for a software and digital technology pilot and wants the DIU director and the CDAO to submit a report on a “development, data, and deployment strategy” of a secure web interface used to access data for DIU project reporting.

“It will also have a modern workflow interface for rapid approval and archiving of decisions,” according to the bill.

Lawmakers are also directing the CDAO, in coordination with DIU, DoD chief information officer, director of operational test and evaluation and the undersecretary of defense for acquisition and sustainment and the Pentagon comptroller to provide a report on the adoption of Joint All Domain Command and Control, that nebulous concept involving connecting “sensors to shooters” anywhere in the battlespace.

“The report shall detail delineations and coordination to facilitate efficiency and expedited adoption of Joint All-Domain Command and Control, advanced digital business practices, due diligence for foreign influence among industry and academia seeking or receiving Department funding, metrics tracking to accelerate funding apportionment and distribution, analytics to support operations and investment decisions, and digital engineering and testing,” according to the bill.

After the legislation is marked up by the full House Appropriations Committee, during which it’s not expected to change all that much, it will eventually head to the House floor for a vote. After the Senate passes its respective versions, the two versions will have to be reconciled. Any number of changes could be expected then, due to the Pentagon’s intervention with lawmakers or just political expediency, before the final bill goes to the president’s desk.

Breaking Defense’s Theresa Hitchens and Michael Marrow contributed to this reporting.