DoD Budget: Fiscal 2013-17 Highlights, Numbers & Unfolding Events

On normal years the US Department of Defense goes through a complicated-enough process to establish and finalize its budget. But whereas FY 2012 offered a welcome return to normalcy after a very long continuing resolution, the budgeting cycle for fiscal year 2013 unfolded in an unproductive, fractious political environment.

As fiscal year 2012 came to a close Congress bought time with a continuing resolution. And as the new civil year started, Congress begrudgingly applied a short-term patch to avoid the fiscal cliff, while the President eventually signed a FY13 authorization bill containing language he had threatened to veto for months. By March 2013 everyone seemed to capitulate to wrap up appropriations for the rest of the year. But FY13 appropriations ended up including sequestration, an outcome that few had predicted since the Budget Control Act was passed in 2011. The FY14 budget cycle then started late, with only dim hope of a more reasonable outcome.

Rapid Fire May 25, 2012: Oversight in Afghanistan

• India’s new aircraft carrier will have its sea trials delayed. The problem isn’t the contractor this time – it’s the weather in northern Russia.

• US base closures: if not this year, maybe the next?

• The Center for a New American Security (CNAS) think tank proposes their recipe for “sustainable pre-eminence.” You’ve heard it before: more Asia/Pacific, more Air/Naval, more joint interdependencies. They are sticking their neck out on capabilities: cut 1 CVN, stop LCS in FY17 at 27 ships vs. a planned 55, get less F-35Cs for the Navy and more F/A-18s instead.

Up to $55.5B in TRICARE Contracts Nothing to Sneeze At

In July 2009, the US Department of Defense’s TRICARE Management Activity (TMA), which provides health care coverage to 9.4 million active duty military family members, military retirees and their eligible family members, issued a number of regional management contract. Under the regional TRICARE MCS services contracts, the companies provide the US military with management of healthcare provider networks and referrals, medical management, enrollment, claims processing, customer service and access to data, among other requirements. The companies will serve as intermediaries between the U.S. military personnel and the U.S. military’s medical care system, similar to the role of a healthcare insurance provider in the private sector.

The size of the covered TRICARE population ensures that these will not be small contracts. The 2009 contracts covered up to $55.5 billion in US regional managed care support (MCS) services, from 3 companies: TriWest Healthcare Alliance Corp. in Phoenix, AZ for the West, Aetna Government Health Plans in Hartford, CT for the North, and UnitedHealth Military & Veterans Services in Minnetonka, MN for the South.

Every single “winner” subsequently lost, after GAO protests were filed. The protests have finally sorted themselves out, and final winners have been declared, but at the price of years of delay…

Elbit’s M7 Wins 2012-2014 Maintenance for US C-23, C-26 Fleets

C-23 landing, Kuwait

M7 Aerospace became an Elbit Systems of America subsidiary in December 2010. Its 6 integrated business segments include Aerostructures Manufacturing; Government Logistics Support Services; Maintenance, Repair & Overhaul; Engineering Services; Aircraft Parts & Support and Supply Chain Management and Purchasing. Their platform specialties include the Shorts Aircraft series of short take-off light transports (incl. US Army’s C-23), and Fairchild’s Merlin & Metro (US C-26 variants).

The US military continues to operate variants of these aircraft, and M7′s strong position in those niches has led to a number of contract wins. A pair of December 2011 support contracts, dating back to FY 2005 and FY 2009, illustrate the point…

US Air National Guard Headed for A Pilot Shortage?

US F-16

In Smithsonian Air & Space magazine’s 10-year, post-9/11 look at the US Air National Guard, Lt. Col. Scott Van Beek talks about the US ANG’s coming pilot crunch, driven by trends in civil aviation, and by the military’s own attempt to shift to UAVs. Going forward, he had this to say:

“For now it’s a good balance, but by the end of 2012, things will get interesting. 9/11 and the economic downturn allowed many of us to put our civilian careers on hold to fill the 9/11 tasking. Employers have been very accommodating, because if their employee came back they would have to lay off someone else, so they would rather let us stay on leave. But there’s a storm brewing. The Air Force had a need for UAV pilots… so they involuntarily transitioned current fighter pilots, and downplayed the fighter track to new graduates from the academy. They’re now facing a fighter pilot shortage. The airlines are slowly hiring again. When the airlines are hiring, pilots leaving active duty increases. The age-60 [retirement] rule has delayed airline retirements, because the [new] rule allowed pilots to stay for another five years. That five-year period will be over at the end of 2012, and mandatory retirements will skyrocket. That is when the airlines, short on pilots, will make [Guard] pilots come back. And the Guard units will look to fill the empty positions from a fighter pilot pool that does not exist.”

US Naval Special Warfare: Training Families

This can be
the easy part…

Deployments aren’t easy for active personnel. They can be even harder on families, and the impacts don’t end when the deployment does. In recent years, the US military has recognized the effect family difficulties have on its all-volunteer force, and placed a higher priority on family assistance programs. The priority is especially urgent with respect to special forces, who are deployed more often because they’re in such high demand. That means trouble if family problems cause them to decide to do something else. Even if replacing existing operators is possible, it’s time-consuming, difficult, and costly.

One example of the US military’s response is the Naval Special Warfare (NSW) Resiliency Program, which recently issued a contract worth up to $44.4 million to Loving Couples Loving Children, Inc. in Seattle, WA. This LCLC program was originally developed by John and Julie Gottman for low-income couples expecting a child…

TRICARE Sends $269.1M SOS for Overseas Health Care

International SOS Assistance in Trevose, PA won a fixed-price requirements contract to provide health care support services, dental care services and claims processing to the US Department of Defense TRICARE Overseas Program. The total potential contract value, including an approximately 10-month base period and 5 one-year option periods for health care delivery, plus a transition-out period, is estimated at $269.1 million.

The TRICARE Management Activity provides health care coverage to 9.4 million active duty military family members, military retirees and their eligible family members.

The new contract includes the establishment of host nation provider networks around military treatment facility (MTFs)…

Information Shifts: From Facebook, With Love

James never had
this little problem…

In March 2008, “Sharpen Yourself: LinkedIn & Social Networking Sites” discussed both the career benefits and security risks associated with social networking sites. Sir John Sawers, the prospective head of Britain’s MI6 intelligence agency is probably wishing he had read it. His wife recently leaked dangerously specific information about him on Facebook, and created a controversy about his fitness for the job. Sir John now faces a possible parliamentary probe.

Social networking is becoming a larger part of the military, and the industry. In July 2009, Lockheed Martin released its internal company social networking application’s underlying code as open source software. Social networking efforts are being explicitly built into PR contracts, and it’s becoming one of the information shifts that are changing the battlespace. The Pentagon recently launched an official blogging platform at DODLive.mil, and US Forces Afghanistan launched a social networking strategy that extends to Facebook, Twitter, and YouTube. Followed by orders to bases to stop blocking key social networking sites. These efforts can make a big difference toward ensuring that the Pentagon is no longer, as Secretary of Defense Robert Gates puts it, “being out-communicated by a guy in a cave.” On the other hand, they are not risk-free.

US Army Stationing Decisions, FY 2008-2013

Base infrastructure contracts are a quietly substantial portion of defense spending in any country, including the USA. Which is why DID covers them on a semi-regular basis, and notes trends in key areas, even though this coverage are only a fraction of the contracts issued. A December 2007 announcement by the US Army has significant implications for base infrastructure projects at a number of locations, however, as the push to grow the US Army by 74,200 troops and 6 brigade combat teams (BCTs)/ 8 support brigades continues, and so does partial relocation of US troops deployed abroad. A June 2009 announcement cut the number of new BCTs in half to 3, and will affect construction and stationing on 3 important Army bases.

The following lists offer updated breakdowns of the associated relocations and new unit stand-ups, first by timeline, and second by location:

Information Shifts: 4 Defense Snapshots – February 2009

Hostile surveillance

Defense Industry Daily came across 3 snapshots in recent months that illustrate the changing nature of the front-line information war, and of the environment in which industry and government must operate. We’ve now added a 4th.

These 4 examples have broad reach, from tactical reconnaissance and information warfare, to strategic reconnaissance, to front-line “public diplomacy,” to the halls of politics and power…

1. Tactical: You’re on Candid Cellphone!
2. Google Earth is Watching You… as You Watch Others [NEW]
3. From Front-Line Transparency to Policy Debates: US Navy Blogs
4. Informed Reporters Who Work from Home: The US V.A. Department Experience