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Congressman Garamendi Votes to Fund Military — Press Release

Defense Appropriations Bill Offers Progress on Sexual Assaults, Disappointment on
Privacy Rights & Wasteful Missile Shield, Mixed Bag on Afghanistan

 

WASHINGTON, DC – Congressman John Garamendi (D-Fairfield, CA), a Member of the House Armed Services Committee, today voted to fund the U.S. military at the Department of Defense by voting for H.R. 2397, the FY 2014 Department of Defense Appropriations Bill (HAC-D). The bill passed by a 305-109 vote.

Garamendi represents Northern California’s 3rd Congressional District, which includes Beale and Travis Air Force bases.

“Today I voted for legislation that makes sure our men and women in uniform can do their jobs,” said Congressman Garamendi. “This version of HAC-D is imperfect legislation, but it is also essential legislation that I fought hard to improve. I look forward to continuing to build the bipartisan coalition necessary to reduce waste in our military and to protect the privacy rights of all Americans.”

Pay Raise for the Troops

The appropriations bill includes provisions to provide for our troops and their families, including supporting a pay raise of 1.8 percent for the troops and strengthening health care services for troops and their families. HAC-D provides $33.6 billion – $519 million above the President’s request – for Defense health care programs for members of the military, their families, and retirees.

“Above all else, the Defense appropriations bill must do right by the troops and their families. This bill offers a needed pay raise and provides good health coverage for the troops and their families,” said Congressman Garamendi.

Defense Appropriations Bill a Mixed Bag on the Longest War in U.S. History

Congressman Garamendi has been a leading voice against waste, fraud, and abuse in Afghanistan and a strong advocate of ending the war and bringing our troops home to their families. There were some major legislative victories on Afghanistan during the amendment process and at least one major setback.

The Republican-led Appropriations Committee allocated $85.8 billion for war funding in the original bill, exceeding the President’s budget request by more than $5.1 billion. Rep. Garamendi supported a successful bipartisan amendment that reduced this war funding by $3.55 billion, which passed by a narrow margin of 215-206. Garamendi also supported an amendment that would have required Congressional approval to extend U.S. military involvement in Afghanistan beyond 2014, which failed 177-246 as well as an amendment that would have terminated the current Authorization for the Use of Military Force (AUMF), which has provided the legal basis for the continuation of U.S. troops in Afghanistan on December 13, 2014. This amendment failed 185-236.

Congressman Garamendi was the cosponsor of two successful amendments that restricted funding for the Afghan National Security Forces (ANSF), helping to ensure that further taxpayer dollars are not wasted on equipment that the ANSF is currently incapable of operating and maintaining in a country that is among the most corrupt in the world. Both amendments restrict funds for the purchase of Mi-17 helicopters for the ANSF from the Russian arms company Rosoboronexport, which has also been supplying arms to the Syrian regime. The first amendment on Mi-17s cut $553.8 million from the bill, the amount that the Department of Defense has currently allocated for the contract with Rosoboronexport, despite Congressional prohibitions on such a deal included in the FY2013 National Defense Authorization Act (NDAA). The amendment puts these funds toward deficit reduction and passed by a large bipartisan majority (346-79). The second amendment prohibited funds from being used to train the Afghan Special Mission Wing (SMW) to operate the Mi-17s, and it passed by a 333-93 vote.

Congressman Garamendi also sponsored a fiscally responsible amendment that would have eliminated the $2.6 billion increase in funding for the Afghan National Security Forces (ANSF), holding funding at last FY2013 levels. From last year to this, funding for the ANSF jumped from $5.1 billion to $7.7 billion, with additional funds slotted for buying aircraft, air support systems, vehicles and other equipment – much of which the Special Inspector General for Afghanistan (SIGAR) has warned the ANSF will not be capable of independently operating and maintaining for more than a decade. Of the more than $52 billion we have appropriated to date for the ANSF, only $40 billion has actually been dispersed. This amendment failed by a 150-276 vote. (Videos of Garamendi speaking on these amendments will be up shortly)

“The Karzai government is corrupt to the bone and cannot be trusted. We are already wasting too much money in Afghanistan on projects that aren’t being built and equipment that is going to languish,” Congressman Garamendi said. “Our taxpayer dollars are being squandered in Afghanistan. They don’t need more money; they need more accountability and oversight.”

Congress Punts on Protecting Privacy Rights

Congressman Garamendi is deeply disappointed that the House of Representatives failed to rein in the NSA’s stated authority to collect the metadata of effectively every American’s phone records. The bipartisan amendment by Rep. Justin Amash (R-MI), Judiciary Committee Ranking Member John Conyers (D-MI), and Rep. Jared Polis (D-CO) would clarify that the “any tangible thing” language in Section 215 of the PATRIOT Act only applies to people being investigated for terrorism. The amendment would have shut down the bulk, suspicionless collection of Americans’ telephone records by requiring the FISA court to limit the collection of telephone records to records that pertain to people actually under investigation and not ordinary Americans who have no reasonable connection to a Patriot Act investigation. This commonsense amendment to protect our privacy rights failed by a 205-217 vote.

“The NSA says it has the authority to collect the phone records of everyone in the United States. That this ‘metadata’ doesn’t directly include names is of little comfort to me, since it is easy for people in the intelligence community to piece together a person’s identity based on these records or to use these records to target a person for any number of motivations,” said Congressman Garamendi. “If everyone’s phone records are a ‘tangible thing’ for the purposes of a terrorism investigation, then our government sees everyone as a potential suspect. That’s nowhere in the Constitution I swore an oath to defend.”

Garamendi added, “I see no legal justification for this program in statute, and I have a hard time understanding how this broad collection of everyone’s data is consistent with our Fourth Amendment right to due process. The NSA misled Congress about the extent of this program, and it misled the American people on the extent Congress was informed about this program. We’ve seen too many abuses in the past to shrug our shoulders and move on. Enough is enough. It’s time to restore checks and balances and protect our right to privacy.”

Progress on Preventing Sexual Assaults in the Military

HAC-D makes some progress combating the epidemic of sexual assaults in the military, including fully funding Sexual Assault Prevention and Response programs at $157 million and adding $25 million above the request to implement a Sexual Assault Special Victims Program.  The bill also reaffirms numerous provisions on sexual assault in the FY2014 National Defense Authorization Act, including those increasing penalties for sexual assault, requiring trial by court-martial for such offenses, and limiting convening authority discretion regarding court-martial findings and sentencing.

Amendments by Rep. Jackie Speier (D-CA) passed by voice vote or en bloc provide $10 million in additional funds to increase training for investigators of sexual assaults, prohibit convicted rapists and sexual assailants from enlisting in the armed services, and provide funds to help identify people who were separated from the military because of a disorder subsequent to reporting a sexual assault, and if appropriate, correcting their record.

“We’ve got a long way to go to combat sexual assaults in the military, but HAC-D makes progress on this blemish to our nation,” said Congressman Garamendi. “The military has enough external enemies; no one in uniform should have to fear their peers. I’m glad Rep. Speier continues to be a moral voice of reason on this issue, and she will have my continued support as we work to make sure the military lives up to the best of its ideals.”

East Coast Missile Boondoggle Remains in HAC-D

Congressman Garamendi is among the leading voices on the House Armed Services Committee against a wasteful East CoastMissile Defense Site that relies on expensive and unproven technology and that the military has said is not needed. Garamendi joined Rep. Jerry Nadler (D-NY) and Rep. Jared Polis (D-CO) in co-sponsoring an amendment to HAC-D that would remove $70.2 million that is set aside for the missile boondoggle.

In a June 10 letter to Senate Armed Services Committee Chairman Carl Levin (D-MI), Vice Admiral James Syring, Director of the Missile Defense Agency, and Lt. Gen. Richard Formica, Commander, Joint Functional Command for Integrated Missile Defense, unequivocally stated that “there is no validated military requirement to deploy an East Coast missile defense site.” In response to a question from Rep. Garamendi in a recent House Armed Services Committee Hearing, Vice Admiral Syring also affirmed that the additional $250 million in funding for the East Coast Missile Defense Site that Congressional Republicans allocated this year would not even be useful to the Department, as they have all of the money they need to carry out an original assessment of any potential site.

According to the Congressional Budget Office, expanding the ground based midcourse defense system to the East Coast would cost approximately $3.5 billion over the next five years. In their letter to Sen. Levin, Admiral Syring and General Formica stated that there currently are more cost effective and less expensive alternatives to improving the defense of the U.S. homeland than an East Coast site.

Despite the overwhelming evidence that the East Coast Missile program proposed in HAC-D is a waste of taxpayer dollars, Garamendi’s amendment failed by a 173-249 vote.

“At every town hall I host, at every public meeting I attend, there’s always at least one person telling me to cut the waste and abuse in the federal government. Here is a clear example of $3.5 billion being flushed down the toilet for a program that won’t make us any safer,” said Congressman Garamendi. “The Pentagon doesn’t want this technology; independent experts agree it probably won’t work; and more cost effective technologies are available to us. Why the House insists on funding this wasteful missile boondoggle makes no sense to me, and I’ll continue fighting for a better deal for American taxpayers.”

# # #

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HASC Members, Air Force Trying ‘End Run’ on Air Guard Budget Talks — Press Release

WASHINGTON, Dec. 13, 2012 /PRNewswire-USNewswire/ — The National Guard Association of the United States today released the following statement by retired Maj. Gen. Gus L. Hargett Jr., the NGAUS president:

“Fueled by misinformation from some Air Force officers, it appears a handful of House Armed Services Committee members are willing to circumvent the legislative process to force a budget on the Air National Guard that the governors, the adjutants general and most in Congress oppose.

“This is the kind of mischief that can occur during conference, when a handful from the House and Senate can go behind closed doors and literally change legislation in the name of forging compromise between the two chambers.

“The House and Senate both rejected the Air Force’s fiscal 2013 budget request, which would take disproportionate cuts from the Air National Guard. Both chambers told Air Force officials to go back and work with the governors and the adjutants general on a new proposal that addressed state concerns.

“Unfortunately, Air Force officials have since ignored the governors and the adjutants general. Neither group has been able to provide meaningful input to a new budget plan. Nevertheless, Air Force officers have told members of Congress that they have a compromise plan in hand.

“For the record, the nation’s governors and adjutants general favor a freeze on Air Guard manpower and force structure and the establishment of a National Commission on the Structure of the Air Force. Neither organization has agreed to any Air Force proposal. Both remain concerned that the cuts to the Air Guard would adversely affect domestic response.

“In addition, to our knowledge, the chief of the National Guard Bureau has not endorsed any compromise plan for the Air National Guard in the fiscal 2013 Air Force budget.

“Commissions are certainly not the ideal way to craft budget decisions. They are a last resort. But at this point, a commission independent from the Air Force is our only remaining hope for a transparent process that includes real input from the governors and Guard leaders.”

About NGAUS: The association includes nearly 45,000 current or former Guard officers. It was created in 1878 to provide unified National Guard representation in Washington. In their first productive meeting after Reconstruction, militia officers from the North and South formed the association with the goal of obtaining better equipment and training by petitioning Congress for more resources. Today, 134 years later, NGAUS has the same mission.

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Congress Continues Push Back on Defense Spending Proposals

The House Armed Services Committee (HASC) continues their mark up of the 2013 defense budget proposed by the Obama administration and continues their push back on proposed cuts to programs. As part of a plan to reduce defense spending by almost $500 billion over the next 5 year defense plan certain programs were ended or reduced. Congress as it often is does not like some of these reductions and is adding them back into the budget.

The HASC is just one of four different committees in both parts of Congress that can rewrite the budget. After the markups are complete the House and Senate vote their own versions of the bill and a Conference Committee irons out the final version that goes to the President. There is no guarantee that any changes made by any of the committees will stick but it is clear that there are a lot in Congress not willing to reduce spending the way that is being proposed.

Earlier we wrote of how they added back in a submarine the Navy had delayed until 2018. Now the committee is changing some proposals with other systems.

These include the retirement of several Northrop Grumman (NOC) Global Hawk strategic Unmanned Aerial Vehicles (UAV). The Air Force had proposed mothballing the Block 30 version of the system and continuing to use the manned U-2/TR-1 aircraft instead. They also would not buy more of that block. The bill the HASC is writing would prevent the retirement before 2014.

The committee has also reduced or eliminated some of the troop cuts and increased co-pays and fee for TRICARE, the military medical plan. Another area they are exploring is increasing funding for some of the Army’s vehicle programs which was cut.

These reductions and the troop cuts are based on the fact that the U.S. is withdrawing from Afghanistan and the Obama administration is predicting less deployments and action in the near future.

This is just the first round of mark ups and the ending bill will be some sort of compromise where some cuts are kept and others aren’t. It does show though that there are many in Congress not ready for large reductions in defense spending and investment.

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House Begins Markup of 2014 Budget with Add of Submarine

The House and Senate are in the process of considering the President’s 2014 budget request. As often different committees will review it and make changes sometimes based on their own priorities which means adding things or removing items from the original request. The budget has to go through two committees in each the House and Senate. Then it is voted on and a Conference Committee held. This means that often the final budget is not necessarily similar to what was submitted in February.

Not only do different companies lobby Congress for inclusion of their products and projects but sometimes the Services will indirectly. There exist lists of “unfunded priorities” and needs that Congress may address even though they are not part of the budget request.

The House Armed Services Committee as part of its review has reportedly increased the Navy’s buy of U.S.S. Virginia class attack submarines by 1 more then requested. The Navy had originally planned to buy two a year but in order to meet budget cut goals and reduce spending only 1 was asked for in 2014. The HASC has bumped that back up to 2.

Congress also wants the Navy to consider signing a multi-year contract for 10 submarines. Multi-year contracts are normally for five years and done for systems, especially aircraft, in steady state production. This allows efficiencies and better pricing due to stable quantities and funding. Virginia submarines are currently built by two companies – Huntington Ingalls Industries (HII) in Virgina and General Dynamics (GD) Electric Boat in Connecticut and Rhode Island.

One of the problems that the Pentagon will face as it tries to cut money required to meet budget goals is that Congress is loathe to reduce programs. There are 435 House members and 100 Senators who see defense spending as a way to bring money and jobs into their districts. The idea of keeping one more submarine in the current budget will do so. It will also require the Navy to cut less money or take it from other budget priorities.

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NGAUS Statement on Thursday’s Senate Hearing on Guard Empowerment — Press Release

November 8, 2011 by · Comment
Filed under: Events, Press Releases 

NGAUS Statement on Thursday’s Senate Hearing on Guard Empowerment

WASHINGTON, Nov. 7, 2011 /PRNewswire-USNewswire/ — NGAUS released the following statement by retired Maj. Gen. Gus L. Hargett Jr., the association president:

“We welcome a Senate hearing on legislation that would add the chief of the National Guard Bureau to the Joint Chiefs of Staff. The proposal would be the first change in the composition of the panel since 1986 and it deserves careful consideration, including input from a representative cross section of all the agencies and institutions impacted.

“Unfortunately, today’s announced list of those scheduled to testify at the Senate Armed Services Committee hearing on the matter Thursday morning looks more like a Defense Department show of force than an objective legislative hearing. Of course, Army and Air Force officials will oppose the proposal. They have historically fought― in some cases fairly, in others not so fairly― every attempt to give the National Guard and the states a greater voice at the Pentagon.

“Today the American homeland is part of a global battle space and the governors, state Guard leaders and homeland security officials down to the local level are in the fight. Yet they will have no representation at a hearing to determine if they need a statutory channel of communications to the nation’s senior panel of defense advisors.

“The House of Representatives and 68 members of the Senate, including a majority of those on the Armed Services Committee, support a Guard seat at the table. Thursday’s hearing, as now planned, is at best a last ditch, desperate attempt by the opposition to bully just enough votes to blunt on procedure the will of Congress and so many others.”

About NGAUS: The association includes nearly 45,000 current or former Guard officers. It was created in 1878 to provide unified National Guard representation in Washington. In their first productive meeting after Reconstruction, militia officers from the North and South formed the association with the goal of obtaining better equipment and training by petitioning Congress for more resources. Today, 133 years later, NGAUS has the same mission.

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Pentagon Clarifies Cost Increases on the JSF Production

A few weeks ago when a funding reprogramming from the Defense Department was submitted to the Congress for their consideration it caused Senator John McCain (R-AZ) and the Senate Armed Services Committee (SASC) to question the program’s status. As part of the request it was asked by the Air Force to move over $240 million to pay cost increases on the F-35 Joint Strike Fighter (JSF) first production contracts. The total bill was actually closer to $750 million as the plan was to move internal JSF funding to make up the difference. Needless to say given the history of the program the SASC was not happy to see the further increases.

As part of their response McCain and Senator Levin (D-MI), the Chair, sent the Defense Department six questions about the reprogramming and the program’s funding status. One of the questions asked the Government to state how much of the cost increase is recoverable and most interestingly the cost to terminate the program.

The Pentagon has now responded to parts of the letter. They revealed that Lockheed Martin (LMT), the prime contractor, and Pratt & Whitney, part of United Technologies (UTX), will pay $283 million of the increase based on the cost sharing provisions of the production contracts.

One could assume this means the total bill to the Government now is below $500 million once this figure is subtracted. Unfortunately that is wrong. The total increase may ultimately be closer to $1 billion and the $283 million is the contractor share with the Pentagon picking up the rest, or just over $700 million. Pratt & Whitney estimates that their portion of the increase is about 6% of the total cost of the contracts.

The F-35 has suffered a series of production delays and cost increases due to testing issues and changes in the design of the aircraft. It had long been expected that there would be cost increases with the first three production batches. The Senate, though, has been trying to draw a hard line on future cost increases and have written into their version of the 2012 Authorization Act a requirement that Lockheed pick up all cost overruns beyond the target price and that the contract be a fixed price one. Normally at this stage in the program where much development and testing remains the contract would be cost plus and there would be some risk sharing as on the current ones.

There are many who are starting to get tired of the JSF status. The program has been re-baselined and repriced but it is not near its original schedule and cost. That is why the SASC raised the idea of terminating the program at its current state. This would be expensive, although no official estimate has been made, and would still leave the requirement for a new aircraft that would either require a new development program or a decision to buy an existing U.S. or foreign aircraft.

As with most things about the JSF there will be more to come in the near future on these latest rounds of cost increases and their ultimate effect on the program.

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Department of Defense Not Really That Concerned with Boeing’s Costs for Tanker

At a recent public event the Undersecretary of Defense for Acquisition, Logistics & Technology, Ashton Carter, was asked about the projected cost increases for the KC-46A development. His response was that he, and OSD, are not really that worked up about the fact that Boeing (BA) may exceed the projected ceiling price of the contract.

In his eyes the U.S.’s liability is based on the $4.9 billion price. Boeing’s bid of $3.6 was a conscious business decision on their part. Some members of Congress, led by Senator John McCain (R-AZ), have raised concerns about the increase and the fact that the cost share structure of the contract obligates the U.S. to pay 60% of the first billion in increases.

There is also the idea that this situation would encourage contractors to submit low estimates for development contracts, or buy-in, with the goal of making up the difference in their production or by having the U.S. pay some of the overruns. McCain and the Senate Armed Services Committee (SASC) are also investigating the large cost increases in F-35 production that are requiring the U.S. to pay over $700 million as part of their cost share.

The idea that the Defense Department would accept this kind of business model is interesting. One of the criticisms of defense acquisition is this very point. In the late Sixties when Lockheed, now Lockheed Martin (LMT), did the same with the C-5 transport, although perhaps not deliberately, it is considered one of the examples of acquisition abuse and the program was almost cancelled. Now Carter is saying that as long as it involves a Firm Fixed Price Contract it is an acceptable practice.

This is just the beginning of the situation and Boeing certainly has the ability to not charge more then the ceiling price as they work the KC-46A development. Their current estimate of about $5.2 billion may be conservative and costs for the first 18 aircraft could be under $4.9 billion.

Senators Levin and McCain Send Questions on F-35 Reprogramming

Earlier this week it was reported, and tweeted, by Senator John McCain (R-AZ) that the Department of Defense as part of a reprogramming request needed $264 million to cover cost increases on the first three Low Rate Initial Production (LRIP) contracts for the F-35 Joint Strike Fighter (JSF). Now Senator Levin (D-MI) the Chairman of the Senate Armed Services Committee (SASC) and McCain, the Ranking Member, have sent a letter with a series of questions to OSD about the reprogramming and the Government’s obligations to lead contractor Lockheed Martin (LMT).

The Omnibus Reprogramming request which is often annually submitted to Congress by OSD allows the move of large amount of funds from different appropriations and services to pay higher priority bills. Often during the years of heaviest engagement in Iraq and Afghanistan it converted Research & Development (RDT&E) and Procurement funds to those used to pay for Operations and Maintenance (O&M). In this years’ it asked for the $264 million to be reprogrammed to pay for “cost growth on the first three F-35 low rate initial production lots (LRIPs 1-3).” It also informed the Congress that there would be a requirement for a further $496.2 million found within JSF’s funding to pay for the rest of the cost increases coming to a grand total of $760.2 million.

The letter asks the Department to answer a series of questions and says the reprogramming won’t be considered until they are answered. These include whether the Government is legally obligated to pay the cost increases, what would be the effect if the request for reprogramming was denied, what other alternatives are there, are the cost increases recoverable, what would be the termination costs for the F-35 program, and how Defense intends to prevent these types of overruns in the first place.

This is the second time in recent months that McCain has raised the specter of cancelling the F-35 contract. Earlier he had tried to have an amendment added to the Authorization Bill requiring termination if cost growth was above a certain point. That failed in Committee by one vote. Now it is clear that Levin, the senior Democrat on the Committee and Chair, is willing to at least put the question out there.

Termination costs for a contract like the F-35 development and production would most likely be in the billions. While McCain has led discussion of this idea it will be hard for the Government to end the program. There is still a requirement for a new aircraft to replace the aging F-16, F/A-18 and AV-8A systems in current inventory. The U.S. has finished buying F-22 and the production line will be shutting down. The F/A-18 is available but any other exiting aircraft that might be considered is non-U.S. A new development program could be started but that would probably end up being more expensive then the current F-35.

Even so the continued cost growth in the program is leading many in Congress to reconsider the future investment in the F-35 in this time of budgetary pressures. McCain especially seems likely to keep up the pressure on the program and Lockheed.

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Reports that Initial F-35 Production Batch Costs Over Target Costs

Yesterday Senator John McCain (R-AZ) caused a stir by tweeting that the Pentagon had requested $264 million as part of a reprogramming as a “downpayment” on the cost overruns for the the first three production batches of the F-35 Joint Strike Fighter.

He also said that the total cost would be closer to $800 million. As with a many programs at the stage of the acquisition cycle Lockheed Martin’s (LMT) F-35 is in the government and contractor share cost increases beyond the target or ceiling price. Reportedly this cost increase applies to the first 28 aircraft ordered by the Defense Department.

The Defense Department and Joint Project Office have yet to confirm McCain’s information.

The F-35 is an advanced tactical aircraft being developed to replace F-16, F/A-18 and A/V-8A aircraft currently in service with the U.S. Air Force, Navy and Marine Corps as well as for many U.S. Allied nations. It is the largest defense acquisition program ever planned to date and has suffered from cost and schedule growth due to testing and development issues.

The production buy currently being planned will be the fourth batch and the largest. There has been frustration over the cost increases with the program by many in Congress and especially McCain. The Senate Armed Services Committee recently added to the 2012 Defense Authorization Bill specific language for the F-35 limiting the government’s exposure to cost overruns. The bill if it becomes law after conference with the House would require Lockheed to be responsible for all cost increases past the target price rather then the Government and it sharing in them.

McCain also attempted in Committee to add language that would have allowed the Government to terminate the program if cost increases for the next production lot exceeded ten percent. That vote failed in committee but by only one vote. This illustrates the concern many have for the increased costs the program is facing.

If the contract was cancelled the U.S. would be faced with buying more Boeing (BA) F/A-18 or non-U.S. aircraft or even re-starting the F-22 production line to meet the requirement while a new fighter program was started.

The chances of terminating the contract are low due to the amount of money already invested in it. A more likely scenario is reduced quantities or a longer production run due to cost and funding limitations.

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Congress Continues to Nibble Around the Edges of Defense Spending

June 29, 2011 by · Comment
Filed under: Editorial 

The FY12 budget for the U.S. Defense Department continues its long process through Congress. The Senate Armed Services Committee (SASC) released its mark up this week. It is one of the four committees between the two parts of the legislature with this responsibility. As the House committees have already done they made some small cuts in the budget.

The Committee’s mark up removed less then one percent of the $671 billion requested by the Obama administration or $6.4 billion. Most of this was achieved by holding Operations & Maintenance (O&M) spending at FY10 levels and removing a billion from the Department’s construction budget.

The House had made smaller cuts of less the half a billion in their mark ups but had focused on reducing the funds for use in Afghanistan and Iraq. These saw a major cut overall with a planned amount of less the $120 billion compared to the $130 billion in the last proper budget passed in FY10.

The SASC bill does contain some controversial provisions including those dealing with the next F-35 production buy from Lockheed Martin (LMT). The committee is dictating the type of contract required and the cost sharing if their are any increases over the target price for the aircraft. If that provision stands after the conference with the House it would mean Lockheed would be liable for any overruns past the target while right now the government is responsible for up to the first twenty percent.

The Senate does, unlike the House, end funding for the JSF’s second engine program. The Obama administration had requested terminating this and the SASC agreed. Rolls-Royce (RR) and GE (GE) continue to develop this out of their own funds for now hoping that Congress will continue funding it. The House did but now the Senate did not so another item to be worked out in the conference committee.

While these cuts seem rather small they do indicate a sea change in the process. Up to this year the Defense Department’s budget grew. Much of this was due to the fighting in Iraq and Afghanistan. Now it is being reduced. Programs are being prioritized and some are even eliminated. The next few years will see continuations of these trends as the U.S. tries to get a handle on its spending. Bigger reductions are going to come and they may be closer to ten percent or more and not 1 percent.

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Senate Tries to Negotiate Next JSF Contract with Lockheed Martin

When a company signs any contract they spend a great deal of time negotiating it with the other party. This is true not only of defense contractors and the government but in any contract. The decision on terms and conditions as well as price may take several months. Now Lockheed Martin (LMT) may be forced to sign a contract for the Joint Strike Fighter (JSF) where the terms and conditions will be dictated by the U.S. Senate.

In the recent Defense Authorization bill passed out of the Senate Armed Services Committee (SASC) for the consideration of the full Senate specific conditions were levied on the JSF program’s next contract. This is fairly unprecedented but indicates how high the level of concern there is with the performance of the program for this new combat aircraft program led by Lockheed.

The Joint Strike Fighter is the largest defense acquisition program in the history of the world. It will buy thousands of modern, stealthy aircraft to replace the aging Eighties fleet of F-16, F/A-18 and A/V-8 aircraft used by the Air Force, Navy and Marine Corps. Many allied nations will also purchase it to replace their F-16 aircraft. The F-35 Lightning II JSF will be made in three variants and ultimately cost the U.S. billions to produce and sustain over the next forty years.

The program has a history of sustained cost and schedule increases as development and testing has turned out to be longer and more complicated then originally thought. Over the last three years the program has been re-baselined and redesigned to account for some of problems but still faces many challenges to achieve its scheduled timeline. Many in Congress, the media and the aviation community have become increasingly concerned about this cost growth and how it will ultimately affect the production and delivery of the aircraft.

Due to these concerns the SASC added two very specific provisions to the 2012 defense authorization bill relative to the JSF. The authorization bill combined with the appropriations bill from the Senate Appropriations Committee tell the Pentagon how much money they have to spend and how it should be spent. Once the bills are approved by the Senate they go to a conference committee with the House to produce the final bills.

These provisions require the next annual production contract for the F-35 to be a fixed priced one with Lockheed absorbing any cost increases over the contracted amount. (http://www.defensenews.com/story.php?i=6845494&c=air;%20budget;%20policy&s=TOP) This is rather unique contracting decision because at this stage in the life of a defense program there remains enough uncertainty that fixed prices are hard to define and agree on. That type of contract is more commonly used when the production line is fairly stable and little or no development effort remains. Lockheed is currently under a fixed price contract but it will received fees for good performance. The contract also has a provision that the maximum the government will pay is 120 percent of the target price.

The second requirement that Lockheed will have to absorb cost overruns is something that will be hard for the company to accept at this time. When a program is in the testing and development stage the Government and the contractor make an effort to share the risk. This means that cost increases due to delays or technical issues are spread between the two parties. In the current contract any cost over the 20% increase would be covered by Lockheed with the Government accepting the cost growth risk to that point. The Senate is proposing that the contractor accept all of the risk meaning Lockheed would begin losing profit immediately.

The JSF is entering into dangerous territory. There is beginning to be extreme concerns about the cost of the program especially when the U.S. budget is facing such pressure due to the needs to reduce the annual deficits. The 2012 budget will include almost $7 billion to buy 28 aircraft for the U.S. military. Some in Congress are now discussing alternatives to the program which would require a different aircraft or approach. Ending or scaling back the program would be huge blow to the U.S. military who are counting on the JSF to provide a major technical upgrade as well as replace many aging systems. The U.S. ended production of the F-22 their last most recent tactical aircraft program in 2009. If there is no JSF they would have to consider re-starting that production, upgrading existing aircraft or looking overseas for a new fighter.

At the same time it is unprecedented for Congress to wade into the minutiae of details in contract negotiation like this. Lockheed and the Defense Department must decide on the best contract vehicle to achieve the goals of the program. The program has issues but dictating to Lockheed a situation where there ability to make money which is their goal will make it difficult to award the contract. These provisions will make it more difficult to negotiate the next production contract potentially stretching out the program even more as well as setting a precedent that will make other companies think twice about beginning programs. There is a chance that competition will be reduced causing further price problems for the Pentagon.

Article first published as Lockheed Martin Now Negotiating Contracts with the United States Senate on Technorati.

Photo from ngotoh’s flickr photostream

House Begins to Cut Defense Budget

The House Armed Services Committee (HASC) approved by a 60 to 1 vote their version of the 2012 Defense Budget. This is basically similar to what was requested by the Obama Administration and reflects the first real reduction to U.S. defense spending since the attacks of 9/11.

As in previous budgets it was split into three parts: first, the base budget which funds the U.S. military and its investment, production, training and support activities; second, the cost of “Overseas Contingency Operations” (OCO) which used to be called the Global War on Terror (GWOT) which are the costs associated with operations in Iraq and Afghanistan and finally it also includes money for the Department of Energy (DOE) support to the U.S. military which is primarily related to nuclear weapons.

The base budget was about $535 billion which was a slight increase on the $533.8 billion programmed in 2010 for such activities. Due to the fact that no 2011 budget was officially passed by Congress until late in the year the Department of Defense relied on continuing resolution which restricted spending to 2010 levels. When the final budget deal was struck funding the rest of the year total planned spending remained consistent with 2010 levels. The Obama Administration had requested $548 billion with almost $160 billion for OCO. This amount was not approved or provided.

The HASC bill approved amounts to a reduction as the OCO funding was reduced to only $119 billion from the $130 billion in 2010 and the $160 billion proposed in 2011. Total spending in 2012 based on the HASC will be $690 billion including the DOE funding of $18 billion. This is a net increase over 2010 but almost $20 billion less then the planned spending in 2011.

What does this all mean for defense contractors? If the House totals hold, and after the work with the Appropriations Committee and the Senate there may be many changes in what the money is spent on, it will be the first net reduction in U.S. defense spending in 10 years. This will mean that some contracts won’t get funded and some companies will see their revenue and earnings reduced.

The cuts to OCO mean those companies heavily involved in providing support and equipment for Iraq and Afghanistan will see the first cuts. The Army’s LOGCAP IV contract provides much of this support for deployed forces and companies like DynCorp International, Fluor and KBR have received large contracts as part of it. The reduction to OCO may affect LOGCAP and those companies involved in it.

It will also mean less bullets, beans and gas will be bought to support the troops in Iraq especially. Suppliers of basic items may see reductions in the amount of items purchased from them. This includes ATK who make ammunition as well as the various gasoline refiners and providers. As the fighting in Iraq and Afghanistan winds down the DoD will be concentrating on making new weapon systems and repairing and refitting the equipment used by the military in those operations.

If and when all of the U.S. and Allied forces return from the fight there will be no need for OCO funding at all. This seems to indicate that the base U.S. defense budget will sink to about $500 – $600 billion a year. This will provide opportunities for those companies providing new, advanced weapons as well as supporting the U.S. military in its bases in the U.S., Asia and Europe. The next round of cuts though will be to this base budget. That will affect the entire U.S. defense industry and may lead to reductions in the number of contractors either through M&A or just moving to other business lines.

Defense spending has been a major prop to the U.S. economy as a whole as it supports businesses and jobs across all of the states. If the civil market has not recovered sufficiently cuts to this money will have a negative effect on many local economies across the U.S. already being experienced as some contracts are eliminated or reduced.
This HASC vote may be the first step into a period like the Nineties which saw wholesale changes to the U.S. defense industry and the countries’ industrial base as a whole.

Photo from David Paul Ohmer’s Flickr Photostream.

Article first published as House Begins to Cut Defense Budget on Technorati.

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House Armed Services Committee: schedule for the week of July 26 – July 30, 2010

July 25, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: schedule for the week of July 26 – July 30, 2010
Ike Skelton, Chairman
July 23, 2010

Tuesday, July 27, 2010 – 10:00am – 2118 Rayburn – Open

The Full Committee will meet to receive testimony on Japan: Recent Security Developments.

Witnesses:

The Honorable Kurt M. Campbell
Assistant Secretary of State for East Asian and Pacific Affairs
U.S. Department of State

The Honorable Wallace C. Gregson
Assistant Secretary of Defense for Asian and Pacific Security Affairs
U.S. Department of Defense

The Honorable Jackalyne Pfannenstiel
Assistant Secretary of the Navy (Energy, Installations, and Environment)


Wednesday, July 28, 2010 – 10:00am – 2118 Rayburn – Open

The Joint Readiness and Seapower and Expeditionary Forces Subcommittees will meet to receive testimony on surface fleet readiness.

Witnesses:

Admiral John Harvey, USN
Commander
Fleet Forces Command

Vice Admiral Kevin McCoy, USN
Commander
Naval Sea Systems Command

Vice Admiral William Burke, USN
Deputy Chief of Naval Operations
Fleet Readiness and Logistics (N4)


Wednesday, July 28, 2010 – 1:30pm – 2212 Rayburn – Open

The Oversight and Investigations Subcommittee will meet to receive testimony on Transformation in Progress: The Services’ Enlisted Professional Military Education Programs.

Witnesses:

Colonel James J. Minick, USMC
Director of Enlisted PME
Marine Corps University
U.S. Marine Corps

Mr. Dan Sparks
Director, Institute for NCO Professional Development
Training and Doctrine Command
U.S. Army

Mr. Scott Lutterloh
Director
Total Force Requirements Division
U.S. Navy

Mr. Dan Sitterly
Director of Force Development
Deputy Chief of Staff
Manpower and Personnel
U.S. Air Force


Wednesday, July 28, 2010 – 2:00pm – 2118 Rayburn – Open

The Terrorism, Unconventional Threats and Capabilities Subcommittee will meet to receive testimony on harnessing small business innovation for national security cyber needs.

Witnesses:

Mr. John Ricketson
Chief Executive Officer
Dejavu Technologies, Inc

Mr. Roger Thornton
Founder and Chief Executive Officer
Fortify Software

TBA


Thursday, July 29, 2010 – 10:00am – 2118 Rayburn – Open

The Full Committee will meet to receive testimony on receive testimony on the Final Report of the Independent Panel's Assessment of the Quadrennial Defense Review.

Witnesses:

The Honorable William J. Perry
Co-Chairman
Quadrennial Defense Review Independent Panel
United States Institute for Peace

The Honorable Stephen J. Hadley
Co-Chairman
Quadrennial Defense Review Independent Panel
United States Institute for Peace


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House Armed Services Committee: schedule for the week of July 19 – July 23, 2010

July 15, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: schedule for the week of July 19 – July 23, 2010
Ike Skelton, Chairman
July 15, 2010

The House Armed Services Committee announces the following schedule for the week of July 19 – July 23, 2010:

Tuesday, July 20, 2010 – 10:00am – 2118 Rayburn – Open

The Readiness Subcommittee will meet to receive testimony on Modeling and Simulation: Enhancing Military Readiness.

Witnesses:

Vice Admiral William Burke, USN
Deputy Chief of Naval Operations Fleet Readiness & Logistics (N4)

Major General Stephen R. Layfield, USA
Director, Joint Training and Joint Warfighting Center U.S. Joint Forces Command

Major General Marke F. Gibson, USAF
Director of Operations, Deputy Chief of Staff for Operations, Plans and Requirements Headquarters U.S. Air Force

Rear Admiral Fred L. Lewis, USN (ret)
President National Training and Simulation Association


Thursday, July 22, 2010 – 10:00am – 2118 Rayburn – Open

The Full Committee will meet to receive testimony on managing the Department of Defense in a time of tight budgets.

Witnesses:

The Honorable Elizabeth McGrath
Deputy Chief Management Officer U.S. Department of Defense

The Honorable Joseph Westphal
Under Secretary of the Army

The Honorable Robert O. Work
Under Secretary of the Navy

The Honorable Erin Conaton
Under Secretary of the Air Force

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House Armed Services Committee: schedule for the week of July 12 – July 16, 2010

July 8, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: schedule for the week of July 12 – July 16, 2010
Ike Skelton, Chairman
July 8, 2010

The House Armed Services Committee announces the following schedule for the week of July 12 – July 16, 2010:

Wednesday, July 14, 2010 – 1:30pm – 2212 Rayburn – Open

The Seapower and Expeditionary Forces Subcommittee will meet to receive testimony on oversight of the activities of the Maritime Administration.

Witness:

The Honorable David Matsuda
Maritime Administrator
Maritime Administration
U.S. Department of Transportation


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House Armed Services Committee: Schedule July 6, 2010 – July 9, 2010

July 6, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: Schedule July 6, 2010 – July 9, 2010
Ike Skelton, Chairman
July 2, 2010

The House Armed Services Committee has no hearings scheduled during the district work period, July 6, 2010 – July 9, 2010.


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House Armed Services Committee: Skelton Calls for Vote to Support Troops in Afghanistan and Iraq

July 6, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: Skelton Calls for Vote to Support Troops in Afghanistan and Iraq
Ike Skelton, Chairman
July 1, 2010

Washington, D.C. – House Armed Services Committee Chairman Ike Skelton (D-Mo.) released the statement below calling for a House vote on the Senate version of the Supplemental Appropriations Act of 2010, which includes $37.12 billion for our troops in Afghanistan and Iraq:

“We are fighting two wars, and our forces in Afghanistan and Iraq need this additional funding to continue our efforts to disrupt, dismantle, and eventually defeat the terrorists who threaten America.

“The quickest way to get a bill to the President that supports our troops in the field is for the House to vote on the Senate bill. Our troops need this support, and we must send a bill to the President without delay.”

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House Armed Services Committee: Opening Statement of Chairman Ike Skelton Hearing on Army Investigation of Arlington National Cemetery

June 30, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: Opening Statement of Chairman Ike Skelton Hearing on Army Investigation of Arlington National Cemetery
Ike Skelton, Chairman
June 30, 2010

Opening Statement of Chairman Ike Skelton
Hearing on Army Investigation of Arlington National Cemetery

Washington, D.C. – House Armed Services Committee Chairman Ike Skelton (D-Mo.) delivered the following opening statement during today’s hearing to review the Army investigation of Arlington National Cemetery:

“Good morning. The hearing will come to order. Today the Committee will receive testimony about the management of Arlington National Cemetery. Our witnesses include John McHugh, Secretary of the Army, and Lieutenant General R. Steven Whitcomb, Inspector General of the Army. Welcome to you both.

“I am angry, period. Anger is generally not a useful emotion, particularly here on Capitol Hill. However, in light of the recent revelations about the management of Arlington National Cemetery, I am just downright angry.

“Arlington Cemetery is our nation’s most hallowed ground. It is reserved as the final resting place of our heroic warriors. Management ineptitude and neglect have resulted in a web of errors. How in the world could this tragedy be allowed to happen?

“Behind the façade of what appeared to be well orchestrated burial services, investigations now reveal a dysfunctional management team operating without any oversight. We all know people who are buried there—people we respect and whose memory we hold dear. Every American, whether they have a loved one buried at Arlington or not, should be outraged.

“Secretary McHugh, I know that you have already done much to right this wrong, but I cannot understand how the Army has allowed the problem to fester for years. There is clear evidence that in 1992 the Army was aware of a level of leadership discord at Arlington that would not have been tolerated in any other organization. The situation cried out for intervention, but the Army’s response was to further withdraw from Arlington Cemetery operations.

“Let me make clear that the uniformed service members who so proudly conduct the military honors ceremonies with such grace and precision are not part of this problem. We are so proud of those young men and women who continue to provide those ceremonies during these troubled times at Arlington Cemetery.

“Sadly, notwithstanding the efforts of the Army, the way forward offers many difficult challenges. Given the limited nature of the investigation up until now, I am afraid that the 200 irregularities associated with gravesites may only be a fraction of the problem. We must be prepared that a 100 percent survey of the cemetery and all of its operations, which I believe must now be undertaken, will yield a larger number of problems that must be addressed.

“The American people and especially our military families expect that those who wear the uniform of this Nation and have made the ultimate sacrifice are afforded the upmost respect and dignity even after their death. They deserve no less.”

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The House Armed Services Committee: *****Time change for Wednesday’s Full Committee Hearing*****

June 29, 2010 by · Comment
Filed under: Syndicated Industry News 
The House Armed Services Committee: *****Time change for Wednesday’s Full Committee Hearing*****

Wednesday, June 30, 2010 – 10:30am – 2118 Rayburn – Open

The Full Committee will meet to receive testimony to review the Army investigation of Arlington National Cemetery.

Witnesses:

The Honorable John McHugh
Secretary of the Army

Lieutenant General R. Steven Whitcomb, USA
Army Inspector General
U.S. Army


House Armed Services Committee: schedule for the week of June 28 – July 2, 2010
Ike Skelton, Chairman
June 24, 2010
The House Armed Services Committee announces the following schedule for the week of June 28 – July 2, 2010:

Tuesday, June 29, 2010 – 10:00am – 2118 Rayburn – Open

The Readiness Subcommittee will meet to receive testimony on Wind Farms: Compatible with Military Readiness?

Witnesses:

Dr. Dorthy Robyn
Deputy Under Secretary of Defense
Installations and Environment
U.S. Department of Defense

Major General Lawrence Stutzriem, USAF
Director, Plans, Policy and Strategy
North American Aerospace Defense Command and U.S. Northern Command

Ms. Nancy B. Kalinowski
Vice President, System Operations Services
Air Traffic Organization
Federal Aviation Administration

Mr. Stu Webster
Co-Chairman of the Siting Committee
American Wind Energy Association


Tuesday, June 29, 2010 – 1:30pm – 2212 Rayburn – Open

The Oversight and Investigations Subcommittee will meet to receive testimony on Beyond the Defense Language Transformation Roadmap: Bearing the Burden for Today’s Educational Shortcomings.

Witnesses:

Mrs. Nancy Weaver
Director, Defense Language Office
Office of the Under Secretary of Defense (Personnel and Readiness)

Brigadier General Walter Golden, USA
Director, J-1 Manpower and Personnel
Office of the Chairman, Joint Chiefs of Staff

Ms Sharon Pickup
Director, Office of Defense Capabilities and Management
U.S. Government Accountability Office


Wednesday, June 30, 2010 – 10:30am – 2118 Rayburn – Open

The Full Committee will meet to receive testimony to review the Army investigation of Arlington National Cemetery.

Witnesses:

The Honorable John McHugh
Secretary of the Army

Lieutenant General R. Steven Whitcomb, USA
Army Inspector General
U.S. Army


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Today in the Department of Defense, Wednesday, June 30, 2010

Today in the Department of Defense, Wednesday, June 30, 2010
June 29, 2010

Secretary of Defense Robert M. Gates and Deputy Secretary of Defense William J. Lynn have no public or media events on their schedules.

Secretary of the Army John McHugh and Army Inspector General Lt. Gen. R. Steven Whitcomb testify at a hearing of the House Armed Services Committee on the Army investigation of Arlington National Cemetery at 10:30 a.m. EDT in room 2118, Rayburn House Office Building.



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House Armed Services Committee: schedule for the week of June 28 – July 2, 2010

June 23, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: schedule for the week of June 28 – July 2, 2010
Ike Skelton, Chairman
June 24, 2010
The House Armed Services Committee announces the following schedule for the week of June 28 – July 2, 2010:

Tuesday, June 29, 2010 – 10:00am – 2118 Rayburn – Open

The Readiness Subcommittee will meet to receive testimony on Wind Farms: Compatible with Military Readiness?

Witnesses:

Dr. Dorthy Robyn
Deputy Under Secretary of Defense
Installations and Environment
U.S. Department of Defense

Major General Lawrence Stutzriem, USAF
Director, Plans, Policy and Strategy
North American Aerospace Defense Command and U.S. Northern Command

Ms. Nancy B. Kalinowski
Vice President, System Operations Services
Air Traffic Organization
Federal Aviation Administration

Mr. Stu Webster
Co-Chairman of the Siting Committee
American Wind Energy Association


Tuesday, June 29, 2010 – 1:30pm – 2212 Rayburn – Open

The Oversight and Investigations Subcommittee will meet to receive testimony on Beyond the Defense Language Transformation Roadmap: Bearing the Burden for Today’s Educational Shortcomings.

Witnesses:

Mrs. Nancy Weaver
Director, Defense Language Office
Office of the Under Secretary of Defense (Personnel and Readiness)

Brigadier General Walter Golden, USA
Director, J-1 Manpower and Personnel
Office of the Chairman, Joint Chiefs of Staff

Ms Sharon Pickup
Director, Office of Defense Capabilities and Management
U.S. Government Accountability Office


Wednesday, June 30, 2010 – 10:00am – 2118 Rayburn – Open

The Full Committee will meet to receive testimony to review the Army investigation of Arlington National Cemetery.

Witnesses:

The Honorable John McHugh
Secretary of the Army

Lieutenant General R. Steven Whitcomb, USA
Army Inspector General
U.S. Army


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House Armed Services Committee: Skelton Statement on President’s Decision to Change Commanders in Afghanistan

June 23, 2010 by · Comment
Filed under: afghanistan, Syndicated Industry News 
House Armed Services Committee: Skelton Statement on President’s Decision to Change Commanders in Afghanistan
Ike Skelton, Chairman
June 23, 2010

Skelton Statement on President’s Decision to Change Commanders in Afghanistan

Washington, D.C. – House Armed Services Committee Chairman Ike Skelton (D-Mo.) released the following statement on the President’s decision to accept General Stanley McChrystal’s resignation and appoint General David Petraeus as commander in Afghanistan:

“General Petraeus is the best that we have. I have great confidence in his ability to bring about a successful outcome in Afghanistan. The Commander-in-Chief must have confidence in his commanders in the field. It is time to move on and return our focus to waging the war in Afghanistan.”

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House Armed Services Committee: Skelton Statement on General McChrystal Profile

June 22, 2010 by · Comment
Filed under: afghanistan, Syndicated Industry News 
House Armed Services Committee: Skelton Statement on General McChrystal Profile
Ike Skelton, Chairman
June 22, 2010

Skelton Statement on General McChrystal Profile

Washington, D.C. – House Armed Services Committee Chairman Ike Skelton (D-Mo.) released the following statement regarding the recent profile on General Stanley McChrystal:

"I was disappointed by the Rolling Stone profile of General McChrystal, and I hope that we will be able to sort this out soon and move forward so we can get back to winning the war in Afghanistan. Nothing is more important than defeating the terrorists who want to harm us. That should be paramount."

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House Armed Services Committee: Langevin and Turner Call for Improved Accounting of Total Nuclear Weapons Complex Costs

June 21, 2010 by · Comment
Filed under: GAO, Syndicated Industry News 
House Armed Services Committee: Langevin and Turner Call for Improved Accounting of Total Nuclear Weapons Complex Costs
Ike Skelton, Chairman
June 21, 2010

Langevin and Turner Call for Improved Accounting of Total Nuclear Weapons Complex Costs

Washington, D.C. – Responding to a Government Accountability Office (GAO) report released today, Strategic Forces Subcommittee Chairman Jim Langevin (D-R.I.) and Ranking Member Michael Turner (R-Ohio) called for a more comprehensive and accurate assessment of the total costs of developing and maintaining the nation’s nuclear weapons.

“We must have a clear picture of the total costs of maintaining an effective nuclear stockpile to be able to accurately assess current and future needs and capabilities. We need to know exactly where the money is going and how it is being used. I am pleased that National Nuclear Security Administration has agreed with the GAO’s recommendations and has already begun to implement these accounting changes to improve their financial tracking and budgeting systems,” said Chairman Langevin.

“Having GAO’s independent assessment is particularly timely given NNSA’s release last week of its Stockpile Stewardship and Management Plan. NNSA plans to seek over $29 billion over the next four fiscal years and it is absolutely essential that NNSA be able to justify this increase and explain how it will benefit stockpile stewardship and management,” said Ranking Member Turner.

In November 2008, the Strategic Forces Subcommittee requested that GAO examine NNSA accounting practices and assess whether reductions in the nuclear stockpile would significantly affect nuclear weapons costs related to the Readiness in Technical Bases and Facilities (RTBF) operations and Stockpiles Services. GAO’s report, entitled “Actions Needed to Identify the Total Costs of Weapons Complex Infrastructure and Research and Production Capabilities” (GAO-10-582), recommends that NNSA develop guidance for consistent collection of total cost information and use this information for budget formulation and program planning.

The GAO report concludes that:

· NNSA cannot accurately identify the total costs to operate and maintain weapons facilities and infrastructure because of differences in sites’ cost accounting practices.

· NNSA does not fully identify or estimate the total costs of the products and capabilities supported through the Stockpile Services R&D and production activities.

· Reducing stockpile size is unlikely to significantly affect NNSA’s RTBF Operations of Facilities and Stockpile Services costs because a sizable portion of these costs is fixed to maintain base nuclear weapons capabilities.

· Without complete and reliable information about these costs, NNSA lacks information that could help justify planned budget increases or target cost savings opportunities.

· NNSA has efforts underway that, if fully implemented, will provide more accurate information on costs related to maintaining U.S. nuclear weapons.

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House Armed Services Committee: schedule for the period of June 21 – June 25, 2010

June 17, 2010 by · Comment
Filed under: Syndicated Industry News 
House Armed Services Committee: schedule for the period of June 21 – June 25, 2010
June 17, 2010
Ike Skelton, Chairman
June 17, 2010

The House Armed Services Committee has no hearings scheduled for the period of June 21 – June 25, 2010.


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