The Insider

Mattis describes CR impacts on DOD contracting

September 12, 2017 |
Tony Bertuca

In a letter to senior lawmakers, Defense Secretary Jim Mattis said a stopgap spending measure will have an immediate impact on Pentagon contracting, forcing delays to key acquisition programs.

Congress approved the 10-week stopgap measure known as a continuing resolution last week as part of a sweeping legislative package, which also included funding for hurricane relief and a temporary extension of the federal debt limit.

A CR caps Pentagon spending in fiscal year 2018 at FY-17 levels and prohibits starting new programs and increasing weapon system production rates.

Inside Defense recently obtained a copy of the Defense Department's "consolidated anomaly list," which it sent to the White House Office of Management and Budget in an unsuccessful attempt to get CR exemptions for high-priority productions increases and new starts.

"The impacts of a CR on DOD contracting efforts are significant and begin within the first 30 days of  each CR," Mattis writes in the Sept. 8 letter. "Every contract that has to be re-competed represents additional work for the already-pressed DOD acquisition workforce. . . . To vendors and manufacturers, the government becomes a less reliable, higher-risk customer."

Senate Armed Services Committee Chairman John McCain (R-AZ), one of the lawmakers to whom the letter was addressed, said Congress must not extend the CR beyond its Dec. 8 expiration date.

"Congress' vote to begin the year on yet another continuing resolution is inexcusable. It says that we are willing to accept the status quo for our military -- where more service members are dying in training than on the battlefield," he said. "We must not repeat this mistake in December."

Mattis writes that acquisition programs are "forced to use incremental contract actions to preserve efforts and schedules, which inevitably results in higher program costs and schedule delays. Each iteration of contract rework further taxes the DOD contracting community, doubling or tripling their workload annually."

The Army, Mattis writes, has 18 new starts and eight production increases impacted by the CR.

"These include the Paladin Integration Management Improvement, Interim Combat Service rifle, Multi-role Anti-armor Anti-personnel Weapon System, Lightweight 30 mm cannon and the Armored Multi-Purpose Vehicle," Mattis writes. "Rate increases are planned for handguns, TOW2 missiles, M240L medium machine gun and the Advanced Tactical Parachute system."

More programs would be affected if the 10-week CR were to be extended.

"Beyond three months (4-12 months), the Army would have 24 additional new starts and [seven] additional production rate increases," Mattis writes.

The Navy, meanwhile, has seven procurement contracts that would be delayed, should the CR extend to six months, while the Air Force has six.

Mattis also tells Congress the CR impact on training will be felt immediately and will be "unrecoverable" should the period extend to 90 days.

Readiness and maintenance, which have become hot-button issues on Capitol Hill in the wake of several deadly and high-profile accidents, will also be hurt by a CR and "grow exponentially over time," according to Mattis.

Over the next three months, Mattis writes, the CR will force the Army to postpone maintenance, while the Navy delays ship inductions and reduces flying hours and the Air Force restricts infrastructure funding.

"Although maintenance impacts can be mitigated for some activities operations under a three-month CR, in areas, such as Navy Ship Depot Maintenance, funding shortfalls result in delays in naval vessel availability, which may affect subsequent deployment rotations," he writes.

Under the CR, the Navy will delay induction of 11 ships, "which will exacerbate the planned ship maintenance," Mattis writes.

The Army, meanwhile, will have "about $400 million" less in its operating accounts and be forced to restrict home station training.