Back to news

May 4, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

Defense budget brawl looms after pandemic

BY REBECCA KHEEL - 05/03/20 01:30 PM EDT

Defense budget cuts are looming as the coronavirus pandemic places pressure on the federal budget across various agencies.

The Pentagon had already been expecting relatively flat budgets for the next few years due to economic constraints caused by the widening deficits in the country.

But with the pandemic, the deficit is projected to explode after Congress passed trillions of dollars in coronavirus relief packages, with more aid bills expected. Defense budget analysts are predicting that will mean cuts to defense spending down the line.

Meanwhile, Democrats say the crisis should result in a rethinking of national security that gives less money to the Pentagon and more to areas like public health.

The chairman of the House Armed Services Committee said this past week it's hard to predict where the defense budget will head after the crisis abates, but suggested the entire federal budget will need to be re-examined.

“The economics of this get much more complicated than they were before this, and it's logical to assume that we are going to have to reevaluate our entire budget, both revenue and expenditures,” Chairman Adam Smith (D-Wash.) said on a teleconference in response to a question from The Hill. “Beyond that, it would be pure speculation as to what's gonna happen.”

Smith, a long time opponent of the nuclear budget, specifically highlighted nuclear modernization as an area for potential cuts, but said defense portfolios are “all on the table to figure out how to spend the money more wisely.”

In the meantime, defense hawks, progressives and deficit hawks alike are honing their arguments as they brace for defense cuts.

The defense budget battles are already starting to play out as Congress debates further coronavirus relief bills.

The Pentagon has said it expects to request “billions” of dollars in the next bill to help contractors hit by the virus. That funding would follow the $10.5 billion the Pentagon got in the third coronavirus stimulus package for the Defense Production Act, defense health programs, and military deployments related to the crisis and other areas.

Smith, though, said this past week he would not support more Pentagon funding in further coronavirus bills, saying the department can find unused funding in its existing $738 billion-plus budget.

Smith's comments came about a week after dozens of progressive organizations led by Win Without War argued in a letter to Congress that “any arguments that the Pentagon cannot use existing resources to respond to the crisis should be met with considerable skepticism.”

But the Pentagon maintained after Smith's comments it cannot dip into its existing budget for coronavirus relief.

Ellen Lord, the Pentagon's top weapons buyer, said the department may be able to use some operations and maintenance funds for coronavirus needs, but added money still has to be available for “pretty significant needs” in readiness and modernization.

“I am not sure that we have the fiscal flexibility to encompass all of the new demands we have and the inefficiencies that we are seeing and perhaps may see in the future,” Lord said at a briefing. “But I respect what Chairman Smith is saying, and we will obviously do our best.”

Looking further ahead, Pentagon officials have indicated they are preparing to tighten their belts at the other end of the crisis.

In a webinar with the Brookings Institution this past week, Army Secretary Ryan McCarthy recalled “compressed budgets” in the wake of recovery bills for the 2008 financial crisis, culminating in the 2011 Budget Control Act that Pentagon officials now blame for readiness shortfalls. The law set budget caps that resulted in sequestration, continuing resolutions or government shutdowns in several years.

“These are challenges we're thinking about now as we look at the [Future Years Defense Program] and whether or not this will pressurize Army budgets in the [fiscal year] 23, 24 timeframe, which are very critical to us and our modernization efforts and increasing our talent management within the force," he said. “We are watching that very closely, and we know that is a challenge that is out in front of us.”

Late last month, the Congressional Budget Office projected that Congress' rescue and stimulus efforts will cause the federal deficit to quadruple to $3.7 trillion, the largest by far in U.S. history.

Defense budget experts say the ballooning deficit likely spells defense cuts in the future, citing trends after previous rising deficits and economic downturns such after the 2008 financial crisis.

“What has historically happened is, when Congress and fiscal conservatives come out and get serious about reducing the debt and reducing spending, defense is almost always part of what they come up with for a solution,” Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies, said in a webinar. “So, we could be looking at a deficit-driven defense drawdown coming in the next two or three years. At least history would suggest that that is a real possibility.”

In the same webinar, American Enterprise Institute resident fellow Mackenzie Eaglen predicted the “budget comes down sooner rather than later.”

“There probably will be a total relook even at the [National Defense Strategy] fundamentals and what mission is going to have to go in response to this,” she added.

But defense hawks are arguing the Pentagon should not be used to pay other bills,, saying the country still faces threats from Russia and China.

Fred Bartels, a senior policy analyst for defense budgeting at the conservative Heritage Foundation, said the defense budget needs to match the National Defense Strategy, which has not changed despite the pandemic. The strategy calls for the military to be ready for so-called great power competition with China and Russia.

“What you're going to have is likely empty promises, and that's the worst possible outcome for the military,” Bartels said of a budget cut without a strategy change. “If your national strategy tells the world that you're going to do that but you don't follow through, it's going to be harder and harder to operate.”

But the pandemic has intensified calls from progressive lawmakers to rethink what constitutes national security.

Rep. Ro Khanna (D-Calif.) told The Hill the crisis shows the definition of national security needs be expanded.

“Lawmakers must view issues like climate change, biosecurity, cybersecurity and this pandemic as serious and real national security threats facing our nation,” Khanna said in a statement to The Hill. “For too long, we were myopically focused and spending trillions on traditional national security issues like terrorism and ‘great power' politics. These new threats impact our health, safety, and economy, requiring new funds to address them.”

https://thehill.com/policy/defense/495762-defense-budget-brawl-looms-after-pandemic

On the same subject

  • Contract Awards by US Department of Defense - March 19, 2020

    March 20, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - March 19, 2020

    NAVY Lockheed Martin Space, Titusville, Florida, is awarded a $601,332,075 fixed-price-incentive, cost-plus-incentive-fee and cost-plus-fixed-fee modification (P00005) to exercise options under a previously awarded and announced contract N00030-19-C-0100 for the submarine-launched ballistic missile (model) Trident II D5 production and deployed systems support. Work will be performed in Magna, Utah (33.5%); Sunnyvale, California (13.7%); Denver, Colorado (10.6%); Cape Canaveral, Florida (6.9%); Titusville, Florida (4.7%); Orange, Virginia (4.4%); Kings Bay, Georgia (3.4%); Kingsport, Tennessee (3.4%); Pittsfield, Massachusetts (3.3%); El Segundo, California (2.4%); Lancaster, Pennsylvania (2.2%); Inglewood, California (1.6%); Clearwater, Florida (1.3%); and other various locations (less than 1% each, 8.6% total). Work is expected to be complete by September 2024. Fiscal 2020 weapons procurement (Navy) funds in the amount of $499,278,762; United Kingdom funds in the amount of $93,325,301; and incremental fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $500,000 are obligated on this award, none of which will expire at the end of the current fiscal year. This contract was awarded on a sole-source basis under 10 U.S. Code 2304(c)(1) and was previously synopsized on the Federal Business Opportunities website. Strategic Systems Programs, Washington, District of Columbia, is the contracting activity. AECOM Technical Services Inc., Los Angeles, California (N62470-19-D-8022); Aptim Federal Services LLC, Alexandria, Virginia (N62470-19-D-8023); CH2M Hill Constructors Inc., Englewood, Colorado (N62470-19-D-8024); Environmental Chemical Corp., Burlingame, California (N62470-19-D-8025); Fluor Intercontinental Inc., Greensville, South Carolina (N62470-19-D-8026); and Perini Management Services Inc., Framingham, Massachusetts (N62470-19-D-8027), are awarded an $85,000,000 modification to increase the maximum dollar value of an indefinite-delivery/indefinite-quantity, multiple award contract for global contingency construction projects. Work will be predominately construction, worldwide and is expected to be complete by March 2024. The work to be performed provides for the Navy on behalf of the Navy, Department of Defense and other federal agencies. The construction and related engineering services will respond to natural disasters, humanitarian assistance, conflict and various projects with similar characteristics. The contractor may be required to provide initial base operating support services in support of the construction effort, which will be incidental to construction efforts. After award of this modification, the total cumulative contract value will be $1,060,000,000. The term of the contract is not to exceed 60 months. No funds will be obligated at time of award; funds will be obligated on subsequent modifications for work on existing individual task orders. Naval Facilities Engineering Command Atlantic, Norfolk, Virginia, is the contracting activity. Environmental Chemical Corp., Burlingame, California, is awarded a $9,788,756 firm-fixed-price task order modification (N62470-20-F-9001) under the global contingency construction, multiple award contract for the exercise of Option One, which provides for the design, fabrication, transportation and installation of a waterside obstacle system at Mina Salman, Naval Support Activity (NSA) Bahrain. Work will be performed at Mina Salman, NSA Bahrain, and is expected to be complete by August 2020. The total task order amount after exercise of this option will be $14,772,620. The task order also contains three unexercised options, which if exercised will increase the cumulative task order value to $16,427,558. Fiscal 2020 other procurement (Navy) funds in the amount of $9,788,756 are obligated on this award and will not expire at the end of the current fiscal year. Naval Facilities Engineering Command, Europe Africa Central is the contracting activity (N62470-19-D-8025). KOAM Engineering Systems Inc., San Diego, California, is awarded a $9,711,022 indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee contract. All work will be performed in San Diego, California, at government facilities (50%) and contractors' facilities (50%). The work provides for systems engineering integration, engineering analysis, installation, testing and evaluation, fleet troubleshooting, configuration management, integrated logistics support, deploying group systems integration testing and combat systems ship qualification trials of tactical data link systems. The period of performance of the base award is from March 19, 2020, to March 18, 2021. If all options are exercised, the period of performance would extend through March 18, 2027. This one-year contract includes six one-year options, which will bring the potential value of this contact to an estimated $71,051,742 if exercised. No funds will be obligated at the time of award. Funds will be obligated as task orders are issued using operations and maintenance (Navy); other procurement (Navy); research, development, test and evaluation (Navy); Foreign Military Sales; and funding from other government agencies such as the Air Force on fiscal year spending plans. This contract was competitively procured as a small business set-aside solicitation by a request for proposal N66001-19-R-0044, which was published on the Federal Business Opportunities website and the Naval Information Warfare Systems Command's e-Commerce website. Four proposals were received and one was selected for the award. Naval Information Warfare Center, Pacific, San Diego, California, is the contracting activity (N66001-20-D-0044). Innovative Defense Technologies LLC, Arlington, Virginia, is awarded an $8,067,432 cost-plus-fixed-fee contract modification to previously awarded contract N00024-20-C-6116 to exercise and fund options for Navy engineering services, required material and travel. Work will be performed in Fall River, Massachusetts, and is expected to be complete by December 2020. Fiscal 2020 research, development, test and evaluation (Navy) funding in the amount of $3,300,000 will be obligated at time of award and will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington Navy Yard, Washington, District of Columbia, is the contracting activity. General Dynamics Electric Boat Corp., Groton, Connecticut, is awarded a $7,307,480 cost-plus-fixed-fee modification to exercise Options 5 through 9 to previously awarded contract N00024-09-C-2104 for planning and execution of U.S. ship South Dakota (SSN 790) guaranty. Work will be performed in Groton, Connecticut, and is expected to be complete by December 2020. Electric Boat Corp. will perform planning and execution efforts and material procurement in preparation to accomplish work on the U.S. ship South Dakota (model SSN 790) during its guaranty period. Fiscal 2020 shipbuilding and conversion (Navy) funding in the amount of $7,307,480 will be obligated at award and will not expire at the end of the current fiscal year. These exercised options will bring the total cost-plus-fixed-fee award to $16,889,161. The Supervisor of Shipbuilding Conversion and Repair, Groton, Connecticut, is the contracting activity. AIR FORCE AECOM International Inc., Neu-Isenburg, Germany (FA5641‐20‐D‐0003); Arcadis, London, United Kingdom (FA5641‐20‐D‐0004); Cardno GS Inc., Charlottesville, Virginia (FA5641‐20‐D‐0005); Jacobs Government Services Co., Arlington, Virginia (FA5641‐20‐D‐0006); Tetra Tech Inc., Pasadena, California (FA5641‐20‐D‐0007); and Wood Environment and Infrastructure Solutions Inc., Blue Bell, Pennsylvania (FA5641‐20‐D‐0008), have been awarded a $90,000,000 indefinite-delivery/indefinite-quantity contract for environmental services and environmental construction. This contract provides a broad range of environmental services including operations and maintenance activities associated with environmental programs, environmental construction, repair and demolition work including remediation, restoration and abatement on real property in support of the Department of Defense environmental mission. Work will be performed at various installations within the U.S. European Command and U.S. Africa Command areas of operation and is expected to be completed by June 14, 2031. This contract is the result of a competitive acquisition and six offers were received. Fiscal 2020 operations and maintenance funds in the amount of $2,500 are being obligated for each awardee at the time of the award. The 764th Enterprise Sourcing Squadron, Ramstein Air Base, Germany, is the contracting activity. ARMY Lagan Construction LLC, Woodbridge, Virginia, was awarded a $29,716,940 firm-fixed-price contract for the design, build repair and replacement of runways and overruns. Bids were solicited via the internet with three received. Work will be performed at Westover Air Reserve Base, Massachusetts, with an estimated completion date of July 9, 2021. Fiscal 2020 operations and maintenance, Defense funds in the amount of $29,716,940 were obligated at the time of the award. U.S. Army Corps of Engineers, Louisville, Kentucky, is the contracting activity (W912QR-20-C-0010). AECOM Management Services Inc., Germantown, Maryland, was awarded a $22,497,260 modification (P00005) to contract W58RGZ-19-F-0301 for repair or recap efforts of aircraft structures, engines, transmissions, blades, and components for various rotary wing aircraft. Work will be performed in Corpus Christi, Texas, with an estimated completion date of March 31, 2022. Fiscal 2020 Army working capital funds in the amount of $22,497,260 were obligated at the time of the award. U.S. Army Contracting Command, Red Stone Arsenal, Alabama, is the contracting activity. CHC/SJH JV LLC, Miami, Florida, was awarded a $21,481,049 firm-fixed price contract for long-term riprap repair of the Walter F. George Dam. Bids were solicited via the internet with five received. Work will be performed at Fort Rucker, Alabama, with an estimated completion date of Sept. 10, 2021. Fiscal 2019 civil works funds in the amount of $21,481,049 were obligated at the time of the award. U.S. Army Corps of Engineers, Mobile, Alabama, is the contracting activity (W91278-20-C-0011). AECOM Management Services Inc., Germantown, Maryland, was awarded a $12,177,497 modification (P00003) to contract W58RGZ19-F-0304 to support the Aircraft and Aircraft Components Production Directorate, including facilities maintenance, supply logistics and administrative duties. Work will be performed in Corpus Christi, Texas, with an estimated completion date of March 31, 2022. Fiscal 2020 Army working capital funds in the amount of $12,177,497 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. DEFENSE LOGISTICS AGENCY Federal Prison Industries,** doing business as UNICOR, Washington, District of Columbia, has been awarded a maximum $12,720,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for Army physical fitness uniform jackets. This is a one-year base contract with two one-year option periods. Locations of performance are Florida and Washington, District of Columbia, with a March 18, 2021, performance completion date. Using military service is Army. Type of appropriation is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-20-D-F055). UPDATE: Kohler Co., Sheboygan, Wisconsin (SPE8EC-20-D-0056), has been added as an awardee to the multiple award contract for commercial portable power equipment, issued against solicitation SPE8EC-17-R-0010 and announced Dec. 10, 2018. (Awarded March 18, 2020) *Small business **Mandatory source https://www.defense.gov/Newsroom/Contracts/Contract/Article/2118872/source/GovDelivery/

  • New Pentagon chief under scrutiny over perceived Boeing bias

    January 10, 2019 | International, Aerospace

    New Pentagon chief under scrutiny over perceived Boeing bias

    By ELIANA JOHNSON and DAVID BROWN Concerns about Patrick Shanahan's Boeing ties have re-emerged since President Donald Trump said he may be running the Pentagon ‘for a long time.' Acting Defense Secretary Patrick Shanahan's private remarks during his 18 months at the Pentagon have spurred accusations that he is boosting his former employer Boeing, people who have witnessed the exchanges told POLITICO — fueling questions about whether he harbors an unfair bias against other big military contractors. Shanahan, who spent 31 years at Boeing before joining the Pentagon in mid-2017, has signed an ethics agreement recusing him from weighing in on matters involving the mammoth defense contractor. But that hasn't stopped him from praising Boeing and trashing competitors such as Lockheed Martin during internal meetings, two former government officials who have heard him make the accusations told POLITICO. The remarks raise questions among ethics experts about whether Shanahan, intentionally or not, is putting his finger on the scale when it comes to Pentagon priorities. They also call new attention to a recent decision by the Pentagon to request new Boeing fighters that the Air Force has said it does not want — a request that Bloomberg has reported came after "prodding" from Shanahan. Concerns about Shanahan's ties to his former employer first surfaced during his confirmation hearing to be deputy secretary, but they have re-emerged since President Donald Trump said last month he may be running the Pentagon “for a long time.” In high-level Pentagon meetings, Shanahan has heavily criticized Lockheed Martin's handling of the production of the F-35 fighter jet, which is expected to cost more than $1 trillion over the life of the program, according to one of the two sources, a former senior Defense Department official who was present. Shanahan, this official said, called the plane “f---ed up” and argued that Lockheed — which edged out Boeing to win the competition to build the plane in October 2001 — “doesn't know how to run a program.” “If it had gone to Boeing, it would be done much better,” Shanahan said, according to the former official. As the Pentagon's No. 2, Shanahan repeatedly "dumped" on the F-35 in meetings, calling the program "unsustainable," and slammed Lockheed Martin's CEO, Marillyn Hewson, according to the second source, a former Trump administration official. "'The cost, the out-years, it's just too expensive, we're not gonna be able to sustain it,'" this person said, quoting Shanahan. The former Trump official said Shanahan "kind of went off" about the F-35 at a retreat for Republican lawmakers last year at the Greenbrier resort in West Virginia. This angered several members of the delegation who had home-district interests in the F-35 program, the former official said. "He would complain about Lockheed's timing and their inability to deliver, and from a Boeing point of view, say things like, 'We would never do that,'" this former official said. Shanahan is the first Pentagon chief to come purely from the private sector since the 1950s and has virtually no government or policy experience. He became the acting Defense secretary Jan. 1, following former Secretary Jim Mattis' resignation over Trump's abrupt decision to pull U.S. troops from Syria and begin drawing down from Afghanistan. He has signed an ethics agreement barring him from weighing in on any matters involving his former employer, the Pentagon's fifth-largest contractor in 2017. Shanahan's experience at Boeing is “his only reference point," the former Trump administration official said. "He doesn't have a lot of other experiences to draw on. He owns it in a powerful way because he doesn't have the military experience, he doesn't have the experience in government. So when he talks about those things, he's very forceful." His remarks about the F-35 stand in stark contrast to those of the president, who regularly praises the stealth fighter despite initially slamming its high costs. The F-35 program, while experiencing a number of setbacks, technical delays and groundings throughout the years, is generally considered to be on the mend. The Air Force and Marine Corps variants have been declared ready to deploy, and the Navy version is expected to reach that point as early as next month. And unit costs have come down for all three variants as the plane matures. Trump has praised Shanahan's ability to cut costs, calling him a “great buyer.” He is now among the candidates the president is considering as a permanent replacement for Mattis. Asked for comment, Shanahan's office released a statement saying he is committed to his agreement to stay out of matters involving Boeing. “Under his ethics agreement, Mr. Shanahan has recused himself for the duration of his service in the Department of Defense from participating personally and substantially in matters in which the Boeing Company is a party,” his office said. Full article: https://www.politico.com/story/2019/01/09/defense-patrick-shanahan-boeing-pentagon-1064203

  • Chinese APT41 Upgrades Malware Arsenal with DodgeBox and MoonWalk

    July 11, 2024 | International, Security

    Chinese APT41 Upgrades Malware Arsenal with DodgeBox and MoonWalk

    Chinese APT41 group upgrades malware arsenal with DodgeBox loader and MoonWalk backdoor, employing advanced evasion techniques for cyber espionage cam

All news