| Business Case | The NDAA is historically not signed in a timely manner which affects how the military O&M budget is spent. Because the NDAA is approved sometimes months into the next calendar year the acquisition community and their mission partners have less than six months to properly plan for quality purchases, services, and construction. The FY 22 NDAA listed 25 exceptions allowing monies to be spent past the EOFY, which shows there is a mechanism to allow for the acquisition O&M monies to be valid past the EOFY.
1. Funding the Department of Defense budget on a timely basis is critical to ensuring military readiness. The National Defense Authorization Act (NDAA) has provided spending authority for
the past 61 years, but that authority, has historically been delayed. As a result, the U.S. must take steps to modernize its business practices to ensure military readiness, critical projects, and key
warfighting capabilities are resourced.
2. With financial reform efforts currently on-going, the proposed amendment provides an immediate and iterative way to ensure spending quality and transparency for single-year, Operations and Maintenance (O&M) funds within the current budgetary framework. Thus, ensuring key capability gaps are maintained and military readiness is safeguarded so that we may deter our adversaries and defend our nation.
Proposal
3. Propose a provision to the NDAA that provides an extension to budget authority for singleyear O&M appropriation accounts, allowing for a minimum 1-year validity of all funding appropriations in order to overcome obligation limitations under a Continuing Resolution (CR).
How it Works
4. The proposal works on a sliding scale and goes into effect when the appropriations bill is signed. For example, the FY22 appropriations bill was signed 15 March, 2022, leaving 6 months until the end of a standard FY. In this sequence, instead of the period of authority ending on 30 September 2022, the period of authority would end 15 March, 2023. Alternatively, if the budget is signed on time, no changes would be applied. Following each FY, unspent funds go into an expired authority period for 5 years before returning to the U.S. Treasury. The proposed solution extends spending authority into this expired period which does not affect final closeout when underspend is returned. Finally, in the FY22 NDAA, there are 25 micro-examples of similar extensions in-place. By applying the same control mechanisms, appropriators are able to more effectively support the DoD while maintaining regular and proper congressional oversight.
5. By appropriators providing the lost obligation time while bi-partisan consensus is achieved, the DoD is able to execute funds in a more stable and predictable timeframe. This prevents endof-year contract price gouging and avoids low quality spending practices associated with obligating FY funds under a condensed period of availability. Quality contracting and planning takes time, and military commanders are losing more of that time each year.
6. In a testimony given by Secretary of Defense, Lloyd J. Austin III (2021), “(the DoD budget) matches our resources to strategy, strategy to policy, and policy to the will of the American people”. This solution safeguards the “Power of the Purse” while providing the DoD the ability to apply resources as originally intended by Congress.
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