U.S. National Defense Authorization Act of 2014 – Big Changes in the Making

Francisco A. Laguna & Wojciech Kornacki

The United States National Defense Authorization Act of 2014 is expected to reflect the growing political dilemma for many lawmakers in the next fiscal year – how to maintain national security during the era of dwindling resources and uncertain future.  The following information pinpoints the spending priorities for the U.S. Government in fiscal year 2014, based on the drafts of the proposed legislation which you can find here.

 Overseas Combat Spending

Seal of the House Armed Services Committee.  This committee, along with the Senate Armed Services Committee, is responsible for shaping general defense policies of the United States Armed Forces, including reforming the Department of Defense, counter-drug operations, acquisition and industrial base, and ongoing military operations.   In FY14 National Defense Authorization Act, the Committee will have to make very difficult choices between defense spending and dwindling resources.  Courtesy of http://armedservices.house.gov

Seal of the House Armed Services Committee. This committee, along with the Senate Armed Services Committee, is responsible for shaping general defense policies of the United States Armed Forces, including reforming the Department of Defense, counter-drug operations, acquisition and industrial base, and ongoing military operations. In FY14 National Defense Authorization Act, the Committee will have to make very difficult choices between defense spending and dwindling resources. Courtesy of http://armedservices.house.gov

Overseas combat spending will continue at the levels seen in 2013, $85.8 billion is expected be spent on overseas military operations, primarily taking place in Central Asia.  Special Operations Forces and anti-drug operations will receive priority funding.  The US Armed Forces will continue to procure resources at historic levels, as it seeks to bring Operation Enduring Freedom to a speedy conclusion.  Section 1222 places specific requirements to accelerate transition of the US military efforts in Afghanistan.  This means that businesses can still find and benefit from international opportunities with the US Government or other businesses in Central Asia.  According to the Office of the Secretary of Defense, Justification for FY 2014 Overseas Contingency Operations Afghanistan Infrastructure Fund (AIF), investing in Afghan power grid and infrastructure is critical for the success of counter-insurgency operations.  Therefore, contingency contracting will continue in Afghanistan with specific focus on several industries.  TransLegal is here to advise you on how it can benefit your business.

Increased Domestic Spending

During his testimony at the Senate Armed Services Committee, Admiral Mark Ferguson, Vice Chief of Naval Forces, explained that, approximately 66 % of all Navy non-deployed ships will be less than fully mission-capable by the end of the fiscal year, if the Navy budget request is not approved.  Courtesy of http://navylive.dodlive.mil

During his testimony at the Senate Armed Services Committee, Admiral Mark Ferguson, Vice Chief of Naval Forces, explained that, approximately 66 % of all Navy non-deployed ships will be less than fully mission-capable by the end of the fiscal year, if the Navy budget request is not approved. Courtesy of http://navylive.dodlive.mil

Significant resources will be spent on restoring combat readiness of the Active Duty units to pre-Operation Enduring Freedom and Operation Iraqi Freedom levels.  This includes new weapons and research into new technologies.  While historically, combat readiness has been at 90%, in the last decade it dropped to 80%.  Congress will spend significant resources on logistical support, training, maintenance and sustainment, and will seek to phase out several weapons systems.   Find out from TransLegal what particular domestic industries will benefit from the spending, what industries will lose funding, and how to prepare to be there when the Government releases requests for solicitations.

 Federal Information Technology Acquisition Reform Act (“FITARA”)

A contractor explains the functions of a generator to Major Tim Hawkins, 386th Expeditionary Contracting Squadron commander.  The generator was procured by the Air Force to power its facilities in a deployed area.  Courtesy of http://www.386aew.afcent.af.mil.

A contractor explains the functions of a generator to Major Tim Hawkins, 386th Expeditionary Contracting Squadron commander. The generator was procured by the Air Force to power its facilities in a deployed area. Courtesy of http://www.386aew.afcent.af.mil.

In its continuing search for savings, Congress is changing the federal Government’s way of acquiring and procuring Information Technology.  Currently, the federal Government spends approximately $81 billion on Information Technology; the Committee on Oversight & Government Reform reports that approximately $20 billion of it is redundant or otherwise wasted.  The FITARA establishes new ways of procuring IT for the Department of Defense, but it does not cover all agencies.  Specific rules and regulations must still be developed.  The Act requires the Department of Defense to reduce redundancies, develop new procurement rules, and increase savings.  As reported by the same committee, there are significant duplications and redundancies of IT contracts and FITARA seeks to address them.  If you are in the IT or procurement industry and need to know how this affects your bottom line – contact TransLegal.

New Rules and Requirements for Government Contractors 

The Act is also expected to place a multitude of new requirements on Government contractors and foreign businesses.  Section 811 requires contractors to conduct due diligence on using only legitimate electronic parts when working for the federal Government.  Other sections place additional limits compensation for contractors and discuss debarment and suspension for contractors.

Contact TransLegal today to discuss new business opportunities that the National Defense Authorization Act of 2014 is expected to offer.  Billions of dollars are expected to be spent overseas and domestically, but new rules place additional requirements and seek to reduce spending and redundancies.

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