Government Contracts Monitor

Short Take: Uncertainty Remains Over 2017 NDAA

September 13, 2016

As Congress returned to session last week, the only certainty with regard to the 2017 Defense budget is more uncertainty. A third attempt to vote on the Senate’s version of the bill was blocked last week by filibuster, despite the bill’s passing the bipartisan Senate Appropriations Committee several months ago. The House has passed its own version of the NDAA, but even if the Senate is able to pass legislation, the two very different bills will have to be reconciled, and then survive the threat of veto by President Obama ahead of the November 8 Presidential election. The funding uncertainty is further compounded by the backdrop of increased terrorist threats and simultaneous attempts to shore up the nation’s ability to prevent and respond to cyber attacks.

The Senate’s bill would set total defense spending at $602 billion, while the House’s version authorizes $610 billion to the DoD. The House’s version funds Overseas Contingency Operations (OCOs) only through April 30, and proposes a funding structure that prioritizes readiness and modernization through the procurement of more aircraft and Navy vessels than the President has requested, as well as higher end-strength troop levels across the board in all services. The Senate’s version largely mirrors the President’s funding requests, but the full vote is ostensibly being held up by the presence of riders in the bill unrelated to the DoD.Even though the House version only funds OCOs through April, both versions earmark nearly $60 billion for this requirement.

Meanwhile, the end of Fiscal Year 2016 is only a few weeks away. Federal agencies face increasing funding uncertainty because of the failure to pass a comprehensive defense budget, and growing likelihood of, at best, a Continuing Resolution to fund the government beyond September 30. We will continue to monitor and report on developments in the coming months.