In this blog, I will point out notable exemptions as specified in the White House report, as well as notable sequestration amounts for the Department of the Army and the Department of Defense (non-military agencies).
Notable Exemptions:
The Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA) as amended, identifies programs exempt from sequestration and subject to special rules. The percentage cuts in the Office of Management and Budget’s sequestration report, and the identification of exempt and non-exempt accounts, reflect the requirements set forth in the BBEDCA. The administration cannot choose which programs to exempt, or what percentage cuts to apply.
Notable exemptions (>$200m) to budget accounts for the Army are shown below:
Dept./Bureau
|
Budget Account
|
Total Budget Amount ($m)
|
Exempt Amount ($m)
|
Army
|
|
|
|
Military Construction
|
Military Construction, Army
|
8,486
|
4,414
|
Military Personnel
|
Military Personnel, Army
|
50,436
|
50,436
|
|
National Guard Personnel, Army
|
8,267
|
8,267
|
|
Reserve Personnel, Army
|
4,521
|
4,521
|
|
Medicare-Eligible Retiree Health Fund Contribution, Army
|
2,404
|
2,404
|
|
Medicare-Eligible Retiree Health Fund Contribution, National Guard Personnel, Army
|
913
|
913
|
|
Medicare-Eligible Retiree Health Fund Contribution, Reserve Personnel, Army
|
524
|
524
|
Operation and Maintenance
|
Operation and Maintenance, Army
|
81,090
|
8,037
|
Procurement
|
Procurement of Ammunition, Army
|
4,514
|
2,078
|
|
Missile Procurement, Army
|
2,087
|
285
|
Research, Development, Test, and Evaluation
|
Research, Development, Test, and Evaluation, Army
|
12,897
|
2,749
|
Revolving and Management Funds
|
Working Capital Fund, Army
|
12,279
|
12,101
|
The 3 highest dollar value exemptions for Department of the Army are the Military Personnel (100% exempt) budget, the National Guard Personnel (100% exempt), and Working Capital Fund (98.5% exempt). The exemption of 98.5% of the Army’s Working Capital Fund from sequestration is significant for vendors working with Army Materiel Command in particular, as a considerable percentage of the AMC’s budget for supply management comes out of the Working Capital Fund. This includes the Logistics Modernization Program and IT spending related to the supply management activities of the Army.
The potentially hardest hit Army accounts relevant to IT spending are the Army’s RDT&E budget, of which 79% is susceptible to sequestration, and the procurement account, of which approximately 51% is vulnerable to sequestration. Cuts to the Army’s procurement budget could have a particularly dramatic effect given that Army procurement is already severely stressed.
Notable exemptions (>$200m) to budget accounts for the DoD non-military agencies are shown below:
Dept./Bureau
|
Budget Account
|
Total Budget Amount ($m)
|
Exempt Amount ($m)
|
DoD (Non-Mil Agencies)
|
|
|
|
Military Personnel
|
Concurrent Receipt Accrual Payments to the Military Retirement Fund
|
6,950
|
6,950
|
Operation and Maintenance
|
Operation and Maintenance, Defense-wide
|
43,890
|
2,624
|
|
Defense Health Program
|
37,168
|
2,388
|
|
Allied Contributions and Cooperation Account
|
905
|
905
|
|
Department of Defense Acquisition Workforce Development Fund
|
751
|
570
|
Procurement
|
Procurement, Defense-wide
|
8,009
|
506
|
Research, Development, Test and Evaluation
|
Research, Development, Test and Evaluation, Defense-wide
|
23,344
|
1,994
|
Revolving and Management Funds
|
Working Capital Fund, Defense-Wide
|
54,877
|
54,473
|
|
Working Capital Fund, Defense Commissary Agency
|
7,475
|
6,092
|
|
National Defense Sealift Fund
|
1,833
|
610
|
|
Pentagon Reservation Maintenance Revolving Fund
|
551
|
551
|
The 3 highest dollar value exemptions for DoD non-military agencies are the Defense-wide working Capital Fund (99% exempt) budget, the Concurrent Receipt Accrual Payments (100% exempt), and the Working Capital Fund for the Defense Commissary Agency (98.5% exempt). The exemption of 99% of the DoD’s Working Capital Fund from sequestration is significant for IT vendors because a considerable percentage of the DoD’s IT spending at DISA and other agencies comes out of the Working Capital Fund. This includes most of the large network infrastructure work at DISA.
The potentially hardest hit DoD non-military agency accounts relevant to IT spending are the DoD’s RDT&E budget, of which 91.5% is susceptible to sequestration, and the procurement account, of which approximately 93% is vulnerable to sequestration. Cuts to the DoD’s procurement budget could slow already bottlenecked DoD procurement channels.
Notable Sequester Amounts:
Notable sequestration amounts per budget account (>$200m) for the Army are shown below:
Dept./Bureau
|
Budget Account
|
Total Budget Amount ($m)
|
Sequestration Amount ($m)
|
Army
|
|
|
|
Operation and Maintenance
|
Operation and Maintenance, Army
|
81,090
|
6,867
|
|
Operation and Maintenance, Army National Guard
|
7,496
|
686
|
|
Operation and Maintenance, Army Reserve
|
3,356
|
309
|
Procurement
|
Other Procurement, Army
|
13,386
|
1,251
|
|
Aircraft Procurement, Army
|
9,116
|
843
|
|
Procurement of Weapons and Tracked Combat Vehicles, Army
|
3,003
|
276
|
|
Procurement of Ammunition, Army
|
4,514
|
229
|
Research, Development, Test and Evaluation
|
Research, Development, Test and Evaluation, Army
|
12,897
|
954
|
Military Construction
|
Military Construction, Army
|
8,486
|
383
|
The most notable amount potentially relevant to IT programs is the $1.25 billion sequestered from the Army’s other procurement budget. These cuts would have a direct and palpable impact on Army IT procurement if they are implemented.
Notable sequestration amounts per budget account (>$200m) for the DoD non-military agencies are shown below:
Dept./Bureau
|
Budget Account
|
Total Budget Amount ($m)
|
Sequestration Amount ($m)
|
DoD (Non-Mil Agencies)
|
|
|
|
Operation and Maintenance
|
Operation and Maintenance, Defense-wide
|
43,890
|
3,879
|
|
Defense Health Program
|
37,168
|
3,269
|
|
Afghanistan Security Forces Fund
|
14,100
|
1,325
|
Research, Development, Test and Evaluation
|
Research, Development, Test and Evaluation, Defense-wide
|
23,344
|
2,007
|
Procurement
|
Procurement, Defense-wide
|
8,009
|
705
|
|
Mine Resistant Ambush Protected Vehicle Fund
|
3,338
|
314
|
|
Joint Improvised Explosive Device Defeat Fund
|
3,148
|
296
|
Military Construction
|
Military Construction, Defense-wide
|
4,415
|
415
|
The most notable amounts potentially relevant to IT programs are the $705 million sequestered from the DoD's procurement budget and the $296 million sequestered from the JIEDDO program's budget. The cuts to DoD procurement would be felt across IT contract competitions if they are implemented. The cuts to JIEDDO would have a directly negative effect on that program's technology development and fielding efforts.