U.S. ARMY BUDGET & CONTRACTING TRENDS: FISCAL 2018 & BEYOND Your Guide to U.S. Army Budget Priorities, Challenges and Upcoming Contracting ...
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U.S. ARMY BUDGET & CONTRACTING TRENDS: FISCAL 2018 & BEYOND Your Guide to U.S. Army Budget Priorities, Challenges and Upcoming Contracting Opportunities.
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BRIEFING
CONTENTS
BOOST IN DISCRETIONARY DEFENSE FUNDING.......................................... 3
ARMY RDT&E – A SIGNPOST FOR THE FUTURE ........................................... 5
WEAPONS AND TECHNOLOGY MODERNIZATION.......................................... 6
BREAKING DOWN THE ARMY MODERNIZATION BUDGET...............................7
COMPLEX ACQUISITION HIERARCHY.......................................................... 8
FUTURE FUNDING FOCUSES .....................................................................9
OPPORTUNITIES TO BUILD YOUR PIPELINE..................................................10
2
BOOST IN
DISCRETIONARY
DEFENSE FUNDING
TRUMP’S BUDGET PROPOSES A DEPARTMENT
OF DEFENSE INCREASE, REQUIRING A
DISCRETIONARY SPENDING CAP CHANGE.
Defense spending caps would increase,
nondefense caps decrease.
Trump request would shift $54 billion in discretionary
funds to defense activities. The defense cap covers all
defense spending across the government, including DOD
and parts of other agencies (Energy, Justice departments).
DOD share of the increase would be about $52 billion.
Nondefense activities would be cut correspondingly.
Discretionary spending caps (under Trump, neither floors nor ceilings)
Base budget authority in billions of dollars
Defense cap (050) (current law) Nondefense cap (current law)
Trump proposed defense (050) cap Trump proposed nondefense cap x
$629.0
$616.0
$603.0
$576.0
$576.0 $576.0
$549.0 $562.0 $554.6
$548.1 $551.1 $542.3
$518.5 $518.5 $529.2
$515.7
$518.5
$462.0
$504.0 $446.0
$437.0
$417.0
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
3
BIGGER BASE BUDGET BOOSTS FOR ARMY, AIR
FORCE COMPARED WITH FY 2017 CR LEVELS –
$574 BILLION IN BASE FUNDING WOULD BE A
RISING TIDE.
Priorities for DOD include critical equipment modernization,
infrastructure upgrades, end strength increases, training,
maintenance, and munitions. Component priorities include:
• Air Force would add funding for flying hours and invest
in training ranges – $1.5 billion for training/live-virtual-
constructive training.
• Army budget would cover end-strength increases, more
Combat Training Center Rotations and developing
A2AD capabilities.
• Marines’ request focuses on integrated combat arms
for full-spectrum readiness.
• SOCOM – is looking for “innovative, low-cost, small
footprint solutions” to reverse unfavorable cost ratios.
Substantial increases in requested funding for major components within DOD
FY18 Budget Request Percent over FY17
Army $137.1 11.6%
Navy $171.5 7.8%
Air Force $165.5 13.0%
Defense wide $100.4 7.6%
4
ARMY RDT&E –
A SIGNPOST FOR
THE FUTURE
ARMY IS FOCUSING A HIGHER PERCENTAGE
OF ITS R&D BUDGET ON BASIC AND APPLIED
RESEARCH AND ADVANCED SYSTEMS
DEVELOPMENT THAN THE NAVY OR
AIR FORCE – 25 PERCENT.
Funding Increase – all major Pentagon budget
categories would be increased – RDT&E by
19.2 percent
Increase in research shows the new administration is
not solely focused on current needs. The chart below
illustrates the relative priority the fiscal 2018 budget
would give to various categories of Pentagon spending.
Current discretionary budget authority in millions
Percentage change from fiscal 2017
Fiscal 2018 request, dollars in millions CR/enacted to fiscal 2018 request
Operation and Maintenance $271,932 9.2%
Military Personnel $145,963 5.1%
Procurement $125,226 4.6%
Research, Development, Test and
$83,326 19.2%
Evaluation
Military Construction $9,015 35.6%
Revolving and Managmenet Funds $2,244 77.8%
Family Housing $1,408 12.6%
5
WEAPONS &
TECHNOLOGY
MODERNIZAION
THE ARMY IS IN A HOLDING PATTERN WHEN
IT COMES TO MODERNIZATION – UPGRADING
EXISTING SYSTEMS AND INCUBATING FUTURE
TECHNOLOGY THAT’S NOT READY YET.
The short-term focus revolves around enhancing Critical technologies include ongoing development
capabilities to deter sophisticated threats such of sensors, engines, missiles, helicopters, cyber,
as long-range artillery/rockets, cyber/EW electronic warfare, and survivability enhancements.
capabilities and increasing survivability of both New programs include $39.6 million for robotics
systems and command and control. development, $70.8 million for ground robotics, and
long-term investments in electronic warfare. However,
Army modernization priorities not all decisions points are equal – some represent
shift from R&D to procurement, and others are new
Specific priorities to note out of the past year’s review starts. Some programs are “ongoing” but still face
include: air and missile defense; long-range fires – technical challenges. Long-range precision fires
artillery and rockets; preferred munitions (including missile program could affect helicopter requirements.
ammunition for air and missiledefense, long-range Unmanned ground vehicles and rotary lift are different
fires and more); mobility and lethality improvements for ways to meet logistics requirements.
brigade combat teams; active protective systems for
air and ground systems; assured mission command;
electronic warfare; cyber; and vertical lift – new engines
for current aircraft and eventually, new helicopters.
6
BREAKING
DOWN THE ARMY
MODERNIZATION
BUDGET
As BGOV’s FYDP dashboard reveals, the Army has
a smaller modernization budget than the Air Force
or the Navy but still has substantial funding for
both procurement and research, development,
test and evaluation.
Army Investment in New Programs
22 Army RDT&E program elements are new for fiscal
2018 – drawing from DOD documents, BGOV has
identified growth areas within the Army RDT&E Budget.
7
COMPLEX
ACQUISITION
HIERARCHY
NAVIGATING THE TAXONOMY OF A DIVERSE
SET OF PEO ROLES
Each military service delegates the management of
acquisition programs to Program Executive Offices, or
PEOs. Each is led by a Program Executive Officer, also
shortened to PEO – either a military flag or general
officer or a civilian senior executive officer.
The Army’s ASA / ALT office – short for Assistant
Secretary of the Army for Acquisition, Logistics and
Technology – has 11 PEOs plus the Joint PEO for
Chemical and Biological Defense. Each PEO has multiple
program offices managing systems development – often
several tiers below in the acquisition organization. The
contracts may then be managed and owned by another
office – often Army Materiel Command.
Federal contractors would like to know the size and
the scope of the portfolio managed by each PEO. Yet
the format of the Pentagon’s budget request (at least
what’s publicly available), the primary source of funding
information, is organized for the convenience of Congress
– not contractors. The budget information that is publicly
available groups programs into accounts that sometimes
don’t align with PEO responsibilities.
Bloomberg Government’s Contracts Intelligence Tool
allows searches by funding and/or contracting office
so you can analyze trends.
8
FUTURE FUNDING
FOCUSES
Army market trends through fiscal 2016 and 2017
obligations reported so far indicating stabilization
after previous declines such as professional services,
or strengthening including IT and training, modeling
and simulation.
9
OPPORTUNITIES
TO BUILD YOUR
PIPELINE
UNCOVER INCREASED FUNDING OPPORTUNITIES
WITH BGOV MARKET INTELLIGENCE
• Identify Hidden Opportunities – Search smarter.
Our opportunity database allows you to find keywords
buried in task order and solicitation documents so
you never miss a thing at any tier
• Build Your Pipeline – Quickly query for specific,
winnable task orders and contracts expiring in a
given time-frame or at a certain burn rate or ceiling
percentage.
• Target Opportunities within Specific MACs –
Segment the federal market by MAC and search
for expiring opportunities within a specific program
to narrow the competitive landscape.
• View Incumbent Contracts – Be alerted when your
competitors win a contract or task order so you can
start planning for the recompete right away.
• Generate Leads from Budgets – BGOV’s I.T. Explorer
lets you identify programs that are in trouble or are
slated for budget increases. Check out recent projects
and activities, and see the incumbent contractors and
contracts.
10BLOOMBERG
GOVERNMENT
Data, news and opportunities.
Delivering rich data, sophisticated tools and breaking news alongside original, in-depth
analysis from contracting experts, BGOV helps government contracting professionals
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integrated platform — with every feature included.
TIMELY AND RELEVANT CLEAR AND COMPREHENSIVE EMERGING AND
NEWS AND ANALYSIS MARKET BREAKDOWNS ESSENTIAL OPPORTUNITIES
Analysts provide an exclusive look The Contracts Intelligence Tool turns Search titles, descriptions and
into the federal market, including millions of data points on government critical documents attached to an
opportunities in information technology, spending into a clear picture of the market. FBO notice otherwise missed by
staffing, professional services, competitive solutions.
construction or major defense.
CONTRACTS AND INSIGHTFUL INTELLIGENT COMPANY
TASK ORDERS SEARCH AGENCY TRENDS INFORMATION
Build a proactive pipeline of Agency profiles provide a general Powered by the Bloomberg Terminal,
contracts and task orders coming up overview of trends for account the company pages present accurate
for re-complete through tracking burn planning and identify new and timely information about your
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and related transactions.
CENTRAL PROJECTS GROW YOUR NETWORK DEDICATED ACCOUNT
FOR YOUR TEAM MANAGEMENT
BGOV’s pipeline manager supports Meet federal decision makers Account managers provide
you and your team through the entire and connect with potential complimentary support and
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