Welcome to the July edition of A Capitol View! With numerous committee reports already out, the appropriations process is in full swing.

This month’s news includes updates on the infrastructure bill, appropriations process, and status of President’s Biden’s nominees. Additionally, this edition includes details on the final report released by the Defense Critical Supply Chain Task Force and commentary by COO Ken Wetzel.

Update: Infrastructure Deal Clears First Procedural Hurdle in Senate

After weeks of grueling negotiations, the Senate’s bipartisan infrastructure deal finally moved past its first procedural hurdle in a 67-to-32 vote earlier this week.

With the support of 17 Republicans, the Senate has agreed to begin considering the bipartisan bill. However, final passage is still uncertain as Republicans will likely demand amendments and input on the bill. The Senate will also need to, once again, meet the 60-vote threshold to close debate and avoid a filibuster.

The results of these negotiations will set the tone for the Biden Administration’s next $3.5 trillion spending package and includes funding for programs and services such as childcare, tax breaks, and health care.

Defense Critical Supply Chain Task Force Releases Final Report

On July 22, the Defense Critical Supply Chain Task Force, established by the House Armed Services Committee and co-chaired by Rep. Elissa Slotkin (MI-08) and Rep. Mike Gallagher (WI-08), released their final report.

The Task Force was established in March of this year in response to the COVID-19 pandemic exposing the degree to which weakened U.S. supply chains pose a risk to economic and national security. Its aim was to examine and identify vulnerabilities and threats facing the defense industrial base supply chain and provide recommendations to help mitigate the risks, enhance U.S. resilience, and better secure the domestic defense supply chain.

  • The Task Force recommends that the Department of Defense:
    create a DoD-wide risk assessment strategy and system for continuous monitoring, assessing, and mitigating risk in the defense supply chain;
  • employ commercially available tools to map the defense supply chain within one year of enactment;
  • identify supplies and materials for major end items that come from adversarial nations and implement a plan to reduce reliance on those nations;
  • establish a coalition among industry groups representing defense industrial base contractors, education partners, organizations providing workforce training and development, and other federal partners to focus on career development within manufacturing fields and other areas necessary to secure critical supply chains;
  • strengthen the ability to leverage close ally and partner capabilities through the National Technology and Industrial Base (NTIB); and
  • coordinate with both the Secretaries of Energy and Interior to ensure research and development includes the DOD’s interest.

Task Force Recommendation to Maximize Use of DPA Title III Authorities Encouraging
by: Ken Wetzel

The report released by the Defense Critical Supply Chain Task Force earlier this week emphasized that the DOD must use the Defense Production Act (DPA) authorities “proactively and efficiently to increase resilience in the supply chain to avoid crisis-driven decision-making.”

  1. They suggested that the White House and Congress consider:
    ensuring adequate funding through appropriations for existing authorities that DOD currently has in DPA Title III;
  2. modernizing DPA authorities for “low end” supplies and basic materials to increase capabilities in areas like masks, gloves, and gowns;
  3. removing the $50 million statutory spending limitation for individual shortfalls from DPA Title III authorities; and
  4. including in DPA Title III, a general transfer authority that would permit transfer of funds from other defense and non-defense agencies into the DPA fund to allow for more timely reactions during a crisis.

The Task Force’s recommendations are encouraging because, if implemented, they would directly increase the U.S.’ industrial base resiliency and preparedness to address military and non-military threats.

Most notable of the recommendations is creating a general transfer authority process that is not only streamlined, but also encouraged by senior leaders. Often overlooked is the simple fact the DPA Title III program is an authority, not a source of funds. Programs of record, therefore, should take advantage of the ability to transfer budget authority and reprogram funds to the DPA fund as part of its supply chain analysis and resiliency efforts. Instead of waiting to react to a crisis, programs could first identify an issue, develop a mitigation strategy, and include funding for a solution in the Future Years Defense Program (FYDP). Then, each year, transfer the funds to the DPA Title III program to utilize its authorities. This would limit the impact on procurement dollars in any single year as well as enable the program itself to anticipate and budget to resolve its own problems. The result would be a targeted and sustainable approach to promoting supply chain resiliency.

Update: NDAA Moving Through Process

On July 22, the Senate Armed Services Committee approved and released a summary of its draft National Defense Authorization Act (NDAA) for FY2022 after a closed markup the day before. While this bill includes funding tables for each program, it is frequently referred to as the “policy bill” because it authorizes funding but does not appropriate it.

The bill’s authorizations were increased by $25 billion over the President’s budget request, bringing its top line to over $740 billion.

Highlights from the summary include $740.3 billion for the Department of Defense, $27.7 billion for nuclear programs under the Energy Department, and $9.9 billion for defense activities outside of the NDAA’s jurisdiction. It also authorized more funding for the procurement of additional military aircraft, including Air Force F-35A jets and F-35C jets; more funding for shipbuilding, including the Arleigh-Burke class destroyer; and more funding for combat vehicles, such as the Joint Light Tactical Vehicle and Abrams tank.

Other things of note were provisions removing military chain of command from decisions to prosecute serious crimes, expanding the Selective Service System to women, and provisions updating rules on DoD officials’ recusals regarding former employers.

The Senate NDAA draft also eliminated the Overseas Contingency Operations account, which the Biden administration recommended removing.

The Senate will likely not consider the bill until at least September.

The House Armed Services Committee kicked off its consideration of the NDAA on July 28.

Update: House Makes Progress on Appropriations Bills

Over 300 amendments were submitted to the Legislative Branch, Commerce-Justice-Science, and State-Foreign Operations appropriations bills in the House. This week, the House Rules Committee accepted over 100 for the three FY22 funding bills; on July 28, they debated and passed them.

The House also began debate on a minibus that includes the Energy-Water, Labor-HHS-Education, Agriculture-FDA, Interior-Environment, Transportation-HUD, Military Construction-VA, and Financial Service appropriations bills. The Rules Committee accepted over 200 amendments to this package.

On Thursday, the House passed this minibus along party lines.

The Senate has yet to begin its appropriations process. The fiscal year ends on September 30th.

Update: Biden Defense Nominees Continue to be Confirmed

Among others, the Senate has now also confirmed the following positions:

  • Frank Kendall, Secretary of the Air Force
  • Christine Wormuth, Secretary of the Army
  • Carlos Del Toro, Secretary of the Navy
  • Heidi Shyu, Under Secretary of Defense for Research and Engineering
  • Ely Ratner, Assistant Secretary of Defense (Indo-Pacific Security Affairs)
  • Shawn Skelly, Assistant Secretary of Defense (Readiness)
  • Gina Ortiz Jones, Under Secretary of the Air Force
  • Meredith Berger, Assistant Secretary of the Navy (Energy, Installations and Environment)

Michael Brown, Biden’s nominee for the top Pentagon acquisition role, withdrew his nomination earlier this month amid an ongoing DoD Inspector General investigation.