The Senate Armed Services Committee (SASC) passed their FY25 NDAA bill by a 22-3 vote which will advance to the Senate floor. While they went through over 1,000 amendments once again, they’ve released a 29-page summary with the details to follow in the coming weeks.
They authorized $923B, a 5% increase in defense spending and $25B above the $895B FRA caps which the House aligned to. It also included $12.5B in Guam disaster recovery construction funding. The accounting breakout is as follows:
DoD: $878.4B
DOE: $33.4B
NDAA Topline: $911.8B
Defense-related activities outside NDAA jurisdiction: $11.5B
National Defense Topline: $923.3B
Our Take: Hopefully this drives discussion to break from FRA agreements, given the drastic impacts it is having on national security. FRA caps do not keep pace with the high inflation, global threats, and are compounded by annual CRs instead of budgets. Ironically, even with the FRA, the federal deficit grew to $1.9T for FY24.
Acquisition Policy
Streamlines Milestone A and B approval processes for major capability acquisition systems to enter TMRR and EMD phases in order to support tailoring of the acquisition process.
Our Take: We support this change! Currently, a major milestone decision drives numerous certifications and approvals that are essentially a lengthy laundry list of items that add limited value (they don’t really influence the decision) but consume a lot of time (often years). This change strengthens the first three tenets of the Adaptive Acquisition Framework which are: Simplify Acquisition Policy, Tailor Acquisition Approaches, and Empower Program Managers. The more we can remove the many statutory requirements for each acquisition milestone the better. Empower program managers and acquisition executives to tailor the processes, reviews, and documents for what makes sense for each acquisition program to balance speed with rigor. Let them manage the acquisition and operational risks.
Strengthens Middle Tier of Acquisition authority for rapid prototyping and rapid fielding and streamlines iterative deployment.
Our Take: We support this change! The modification to current language here will help expand the aperture of the MTA pathway and make it more user-friendly for programs that are consistently delivering a mix of software and hardware capability. It also serves to protect the MTA pathway (which was designed to be different) from being infringed upon by those who wish to revert it to the status quo. DoD must encourage broader use of MTA to meet the many warfighter demands and not let excess oversight discourage its use.
Establishes an advisory board to SECDEF to provide recommendations for improving the Department’s requirements generation process.
The FY24 NDAA Section 811 required DoD to modernize their requirements process. It appears little to no progress has been made. We are happy to see the Senate continue to pressure the DoD to reform requirements. We recently posted some thoughts on how to bring requirements into the 21st century. Joint Staff and Service requirement orgs have an opportunity to do the smart thing and they have congressional support - they just need to do it.
Increases approval thresholds for Other Transaction Authorities (OTAs).
Our Take: OTAs are invaluable agreements to work with industry at greater speed and agility. We must not burden OTAs with excessive FAR constraints and oversight and instead train and empower lower officials to act.
Creates a pilot program to track the number and amounts awarded to small businesses and non-traditional defense contractors through the use of OTAs, including those carried out through consortia in order to better understand the industrial base implications of using OTAs.
Our Take: There is value in continuing to track the impact that Other Transactions have for small businesses and non-traditional defense contractors. The ability to have free and open discussions, negotiate IP based on a win-win arrangement, and conduct competition more flexibly is powerful and should be documented better.
Removed Special Access Programs (SAP) exemption from MDAP definition making them subject to Nunn-McCurdy determination and analysis.
Our Take: This is disappointing. SAP-level programs are generally the crown jewels of the DoD acquisition enterprise (when overclassification is kept at bay) — subjecting them to all the administration of a normal acquisition is not going to improve outcomes, it will only add more burdens. Of course, the irony is that the number of people who will have access to the details will be extremely small. On the Hill, it may only be the Staff Director of defense committees and the chairman/ranking member.
PPBE Reform
Establishes a cross-functional team to implement the recommendations of the PPBE Reform Commission.
Requires annual reports on the implementation of PPBE Reform Commission recommendations.
Requires DoD to revise the Financial Management Regulation DoD 7000.14R.
Within the Defense Modernization Account, authorizes the procurement and integration of commercial technologies and services to satisfy the requirements of infrastructure projects that accelerate the fielding and adoption of new capabilities.
Our Take: We fully support the establishment of an implementation team. Driving PPBE changes within DoD will take a concerted effort. Revising the FMR is way overdue but will also require an empowered contingent within DoD and with key congressional committees. PPBE reform is a team sport!
Counter UAS
Establishes C-UAS task force to review guidance related to C-UAS activities.
Strategy for C-UAS technologies
Army, Navy, and Air Force provide briefings on plans for C-UAS capabilities.
Directs a report on all recommendations, findings, and results from DoD C-UAS cross functional team.
Increased funding for C-UAS research and testing with Army and university partners.
Full scale C-UAS exercise in DoD’s special use airspace and briefing on outcomes.
Increased funding for CCMDs C-UAS activities
Authorizes the DoD to support civil authorities in C-UAS of U.S. borders.
Our Take: Given the rapid acceleration and escalation of drone attacks across Ukraine, the Middle East, and beyond, the DoD must move out quickly on producing and deploying C-UAS solutions at scale. Given recent attacks, DoD leaders are putting increased attention on C-UAS and more can be done to work with Congress on shaping strategies and investments to protect U.S. and Allies from drones.
Developing American UAS Capabilities
Army report on current sUAS funding model and proposal to consolidate funding lines to improve portfolio fiscal agility.
Increased funding to develop new and innovative design, manufacturing, and production techniques for low-cost attritable, uncrewed systems and development of distributed AI fusion for such systems.
Strategy to develop secure domestic and allied supply chain of critical components for small UAS.
Our Take: As the Replicator initiative champions, DoD needs thousands of low-cost, unmanned systems (UAS, USV, UUV, and UGV) across a wide array of mission sets. DoD needs to scale, by orders of magnitude, the investments in these systems to tap many leading American and allied companies, shape novel CONOPS and organizing constructs, and complement existing large weapon systems and manned operations.
AI
Pilot program for AI enabled software to optimize workflow of DoD depots, shipyards, and manufacturing facilities.
Working group to coordinate AI initiative among U.S. allies and partners.
Expands duties of CDAO Governing Council.
Directs a review of DoD’s management of AI related issues.
Briefing on opportunities for the creation of lateral entry programs for AI/ML fields within the military departments.
Briefing on testing infrastructure and criteria to validate AI in military systems.
Plan to ensure budgeting process for programs with AI include cost estimates for the acquisition and sustainment of data required to train, maintain, or improve the AI.
Our Take: Hopefully this is addressed as department guidance for acquisition professionals and not an additional layer of reviews in the PPBE process. Acquisition guidance should be maintained online in a dynamic environment to be continuously improved and aligned with training materials instead of static PDF documents that take a year to get approved then never updated.
Emerging Technologies
Briefing on current and future capabilities to test directed energy systems.
Designates DoD leadership with primary responsibility for collaboration with international partners on directed energy weapons.
Brief on space-based sensing capabilities for hypersonic defense.
Investment in highly maneuverable, threat-representative hypersonic targets to develop U.S. defensive capabilities
DARPA to establish a Quantum Scaling Initiative.
Authorizes DARPA to provide personnel to the Services to support transition of DARPA tech, if requested by the Principal Technology Transition Advisor
International cybersecurity cooperation report.
Assessment of DoD’s implementation of CMMC 2.0.
Limits funding on JCWA until CYBERCOM Commander provides a plan to minimize work on the current JCWA architecture to plan for next generation JCWA.
Our Take: Includes a number of briefings in critical technology areas where DoD should already be keeping Congress apprised. The focus on DARPA expanding their current investments and increasing focus on quantum is critical as its widely viewed that whoever can field that technology at scale first will have a major advantage. The ability to temporarily assign DARPA personnel to the Services could have enormous benefits in streamlining tech transition. The language requiring a serious review of the CMMC program is highly warranted as it appears likely that the cost of compliance may outweigh the benefits. The encouragement to look beyond the current JCWA architecture is probably well advised since it has had very mixed reviews by the operational community.
DoD Organization and Management
Institutionalize “Service Secretary-like” role of ASD for Special Operations and Low Intensity Conflict (SOLIC) in DoD processes, policies, and plans updates.
Increased number of authorized DASDs from 60 to 62.
Requires additional coordination between USD(Policy) and DASD International and Industry Engagement for allied industrial base integration work.
Our Take: No major issues. We hope that improved coordination on the allied industrial base front results in DoD pursuing more international R&D efforts.
Program Specific Funding Authorization
Increased funding for procurement of surface vessels, undersea vessels, aircraft, and munitions.
Additional $1.43B for third DDG Arleigh Burke-class destroyer.
Funding to enhance submarine industrial base and support second Virginia class submarine (Runs counter to House Appropriators)
Authorizes block buy contract for up to 37 CH-53K airframes and multiyear procurement for CH-53K engines.
Requires Navy to conduct competitive demonstration of XLUUV including NDIs from commercial or foreign partner sources.
Approves Air Force request to retire 56 A-10s, 65 F-15C/Ds, and 11 F-16 C/Ds.
Disapproves the Air Force proposal to retire 26 F-15Es and 32 F-22s.
Requires Air Force to maintain 16 E-3s until they can be replaced by E-7s.
AFRL briefing on integrating stratospheric balloon systems into military exercises.
Analysis on how air superiority mission will be secured in the 2030s and 2040s.
We look forward to reading the SASC detailed FY25 NDAA bill in July and will summarize for our paid subscribers.
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