Report: Congress needs to take charge of DOD procurement policy

Congressional Research Service report

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Congress needs to take a stand before the Defense Department sets a new procurement precedent and moves away from a decades-old policy of paying for a project with one fiscal year’s appropriations. But the question for Congress is how to do that, according to a new Congressional Research Service report.

Current policy requires DOD to fund a weapon or piece of equipment in the year in which the item is bought. The full-funding policy is a budgeting rule that has been applied to DOD procurement programs since the 1950s, according to the CRS report released June 15 by the Federation of American Scientists.

Ronald O’Rourke and Stephen Daggett, national defense specialists in CRS’ Foreign Affairs, Defense and Trade Division, wrote in the report that despite being a technical rule, the policy deals with Congress’ budget power and oversight of DOD.

“The issue for Congress is how to respond to DOD’s proposals for procuring ships and aircraft…with funding approaches that do not conform to the full-funding policy,” they wrote. “Congress’ decision on this issue could have significant implications for Congress’ ability to conduct oversight of DOD procurement programs.” They added that it also could affect how DOD budgets its annual funding requirements.

Most notably, DOD has bought Navy ships without conforming to the full-funding policy and is now proposing to buy other items -- including ships and aircraft -- in the same manner, the report states.

In 2005, retired Navy Adm. Vernon Clark, then chief of naval operations, told the Senate Armed Services Committee that acquisition and budgeting reforms, such as multiyear procurements, help stabilize production and reduce shipbuilding costs.

“The budget continues to maximize return on procurement dollars, primarily through the use of multiyear procurement,” Clark said.

But O’Rourke and Daggett wrote that using incremental funding could commit future Congresses to providing funding for the programs previous Congresses had initiated. That could hinder lawmakers’ ability to adapt budgets to changing needs.

Ultimately, “weighing options may involve balancing a need to meet DOD procurement goals within available funding against the goal of preserving Congress’ control over DOD spending and its ability to conduct oversight of DOD programs,” they wrote.

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