H.R. 2810 authorizes and prioritizes funding for the Department of Defense (DoD) and military activities and construction, and prescribes military personnel strengths for Fiscal Year 2018. The bill authorizes $613.8 billion in base funding, including a $28.5 billion increase above the President’s budget for essential readiness recovery. Further, the bill authorizes an additional $10 billion in the Overseas Contingency Operations fund (OCO) for base requirements, and an additional $64.6 billion in the OCO fund to cover contingency operations. When factoring in $7.5 billion for mandatory defense spending, a total of $695.9 billion is authorized to be appropriated.[1]

A summary of the Chairman’s mark of H.R. 2810 provided by the House Armed Services Committee can be found here. Significant provisions of the legislation include:

Reforming the Department of Defense – Over the past two years, Congress has enacted significant defense reforms affecting retirement systems, the military health care system, the commissary benefit, and major bureaucratic overhauls. The bill for FY18 reflects a number of additional reforms including:[2]

Acquisition Reform – The bill calls for additional oversight by requiring increased specificity in funding requests for service contracts. Under the legislation, requests for service contracts will be submitted through the DOD budget process, forcing the Pentagon to analyze actual needs and spending patterns, similar to the process employed for weapons systems. By specifying contract requirements early enough to have them validated, awarded, and the funding secured, Congress will have more oversight and enabling efficiencies.

Purchasing Commercial Goods – Commercial-off-the-shelf goods are currently purchased by the Pentagon through a contracting process or from the General Services Administration. However, a recent GSA Inspector General report revealed that for IT products alone, GSA rates were 13% higher than those on the open market. Under the legislation, DOD would have the ability to buy commercial goods using online commercial sites like Amazon, Staples, Grainger, or various other retailers.

Contract Auditing – H.R. 2810 directs DOD to move at least 25% of incurred cost audits to the private sector over the next few years. The Defense Contract Audit Agency currently focuses on two types of audits: forward-pricing and incurred cost. Forward pricing audits review the cost of labor, supplies, and overhead to inform the appropriate price range for a contract being negotiated. Incurred cost audits go back and look at whether the costs charged to the government were reasonable and permissible under the contract. According to DCAA’s own data, incurred costs audits provide the lowest return on investment, potentially losing up to 13 cents for every dollar invested in conducting these audits and taking an average of over 880 days to complete. Other federal agencies have moved to private accounting firms to conduct incurred audits, getting the same work done faster and without costing extra money.

Acquisition Code – In the NDAA for Fiscal Year 2016, Section 809 established a panel on streamlining and codifying acquisition regulations. The panel produced an interim report in May 2017 that recommended several revisions to acquisition statutes and regulations. The bill includes provisions to remove unnecessary prescriptive requirements from the U.S. Code, which may create a culture of compliance in acquisitions rather than empowering smart, agile, decision-making.

Duplication of Effort – The bill restricts funding for service-unique contract writing systems in FY18, while requiring an assessment of the underlying requirements to inform future year’s support for the programs. In fiscal year 2015, the Defense Business Council approved certification requests totaling $6.9 billion for 1,182 business systems. Of these, more than 30 were for service or component unique contracting, procurement, and solicitation management systems. This redundancy diverts available funding from direct warfighting capability and decreases the Department’s ability to manage its operations as an enterprise.

National Security Space – The bill establishes a new U.S. Space Corps as a separate military service within the Department of the Air Force by 2019. The bill also establishes a U.S. Space Command as a new sub-unified command within U.S. Strategic Command.

Repairing the Military and Restoring Readiness[3] – H.R. 2810 authorizes funds to increase the size of the Army, Navy, Air Force, Army Guard and Reserve, Naval and Air Reserve, and Air Guard. In addition, the bill full funds the 2.4% pay raise troops are entitled to under law, and blocks the President’s ability to reduce troop pay while extending special pay and bonuses for service-members. Any reduction of inpatient care for military Medical Treatment facilities locations outside the U.S. is prohibited.

According to the Committee, all of the services noted the serious consequences of years of under-funding and high operational tempo. For example, the Air Force has testified that less than 50% of its planes were combat ready, while the Navy and Marine Corps had just over 50% of aircraft necessary for training and operations. In total, only 3 of the Army’s 50 Brigade Combat Teams are ready.

The bill increases Navy ship and Aircraft depot maintenance and afloat readiness, while also including additional funds for the Army, Navy, Marine Corps, and Air Force operation and maintenance to fulfill unfunded requests for necessary maintenance and increasing training opportunities.

H.R. 2810 supports 90% of requirements for facilities sustainment and a significant increase for facilities restoration and modernization. Additionally, the proposal increases funding for facilities restoration and modernization by $1.4 billion.

The NDAA FY18 focuses on rebuilding parts of the Armed Forces that have faced eight years of constrained budgets and a high-operational tempo. DOD has deferred buying modern and more capable equipment, relying on repairing existing equipment that can no longer safely be repaired or is too costly to do so. The bill provides the following:

More than $1 billion for 85 M1A2SEPv3 Abrams tanks

$311 million for 93 M2A4 Bradley fighting vehicles

$194.4 million for 51 HERCULES improved recovery vehicles

$1.1 billion for 10 V-22 aircraft

$103 million for A-10 wing upgrades

$878 million for 27 AH-1Z attack helicopters

Funding for a total of 87 F-35s

$739 million for 10 additional F/A-18E/F Super Hornets

Additional funding for UH-60M Blackhawks, AH-64E Apaches, and CH-47F Chinook helicopters

An additional $348 million for 116 double V-hull Stryker combat vehicles

For of a full list of the equipment authorized by the legislation, click here and see pages 6 through 7.

Force Projection and Strategic Presence

The bill advances a vision of a 355-ship Navy, giving the Department the authority to enter in long-term contracts for Arleigh Burke class destroyers and Virginia class submarines. The bill adds 5 additional ships, including an Arleigh Burke destroyer, 2 Littoral Combat ships, a Puller-class Expeditionary Support Base, and a San Antonio class Amphibious Landing Platform. The legislation also supported the Department’s advance procurement of aircraft carriers and attack submarines.

Confronting Aggression and Addressing Threats

_Afghanistan – _The bill authorizes the Afghanistan Security Forces Fund at $4.9 billion. The Fund will provide enhancements in the Afghan Air Force’s fixed and rotary wing fleet and support expansion of the Security Forces. In addition, the Fund will provide support to the Afghan government’s anti-corruption efforts. The Secretary of Defense, in consultation with the Secretary of State, shall conduct a progress assessment on the efforts of the Afghan National Defense and Security Forces, focusing on accountability, anti-corruption efforts, the capability and capacity of the forces, success in taking and holding territory, and the appropriate distribution of equipment.

Syria and Iraq – provides for additional U.S. support for the training and equipping of Syrian fighters and Operation Inherent Resolve, a partnership of forces engaged in curtailing ISIS expansion, recovering territory in Iraq and Syria, and refitting partners following difficult combat missions.

Ukraine – The bill provides $150 million for the Ukraine Security Assistance Initiative to help train, equip, and assist the Ukrainian military, National Guard, and security services.

_Russia – _H.R. 2810 significantly increases resources for the European Deterrence Initiative, authorized by Congress last year to counter Russian aggression through conventional and unconventional warfare methods in Europe. This will authorize rotations of U.S. combat units in the region, pre-positioning equipment, infrastructure improvements for the Air Force, and additional training and exercises. In addition, the bill funds additional intelligence and warning capabilities, including technologies supporting U.S. information operations, and strategic communications activities. H.R. 23 denies funding related to use of Open Skies overflights, as well as unnecessary spending related to the Open Skies Treaty.

Defense Security Cooperation – The Department of Defense trains and equips our foreign partners through Defense Security Cooperation so our allies can meet their own security needs in support of U.S. strategic objectives, and reduce the likelihood that U.S. forces will need to be employed. The legislation continues to advance the progress made in last year's NDAA to reform defense security cooperation in order to ensure training and equipment is provided effectively and efficiently.

_Cyber Warfare and Cyber Operations _ - The legislation fill funds $8 billion for cyber operations and fully supports the Department’s defensive and offensive cyberspace capabilities and strategies. This includes $647 million for U.S. Cyber Command.

Enhancing Missile Defense – The bill provides $2.5 billion above the President’s request for critical missile defense needs, and directs funding be directed to procure additional SM-3IB, THAAD, and Patriot MSE interceptors, along with additional investments in the Ground-based Midcourse Defense System.

Strengthening our Nuclear Deterrent – The bill full authorizes the National Nuclear Security Administration, including critical efforts to modernize the nuclear weapons stockpile. The legislation establishes a strong oversight process, and ensures the nation’s nuclear command, control, and communications efforts during ongoing recapitalization.

Guantanamo Bay (GTMO)

The bill carries annual restrictions against transferring detainees from the detention facility at Guantanamo Bay to the United States and building or modifying facilities in the United States for housing detainees. H.R. 2810 also prohibits DoD from using any funds to transfer the U.S. Naval Base at Guantanamo Bay back to Cuba.