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Navy FY 2016 Discretionary and IT Budget Request Snapshot

Published: March 17, 2015

BudgetNAVY

In February the White House released its fiscal year (FY) 2016 budget request, including agency discretionary and information technology (IT) budget submissions. However, as is often the case in recent years, we had to wait until March before we got full detail on the DoD and component IT budget numbers, like the Navy. Now that the data is released, what do the numbers tell us?

Total Discretionary Funding

The FY 2016 federal budget provides the Navy with $161B in base discretionary funding, an increase of $11.8B (+7.9%) from the FY 2015 enacted level, coming in second behind the Air Force in base budget increases. The budget also includes $7B in total Overseas Contingency Operations (OCO) funding, a reduction of $2.6B (-27%) from FY 2015, which is second in cuts behind the Army.

Discretionary funding highlights include:

  • $44.3B in in base funding for Procurement, up $3.4B (8%) from FY 2015 enacted level of $40.9.
  • $50B in base funding for Operations and Maintenance (O&M), an increase of $4.7B (+10.5%) from the FY 2015 enacted level of $45.3B.
  • $17.9B in base funding for Research, Development, Test, & Evaluation (RDT&E), up $2.1B (+13%) from the FY 2015 enacted level of $15.8B.

Navy Total IT and New Development Budgets

The Navy is requesting a combined $6.5B for IT in FY 2016 IT, a 3.8% increase from the $6.2B enacted level in FY 2015, but 1.2% below the FY 2014 level of $6.6B. The $240M increase from FY 2015 to FY 2016 is the largest dollar increase across the four DoD components. Further, Navy IT Operations and Maintenance (O&M) funding in FY 2016 increases $237M, or 4.5%, from FY 2015 and increases $48M, or 0.9%, from FY 2014. However, the Navy’s IT Development, Modernization, and Enhancement (DME) funding in FY 2016 increases just $2.7M, or 0.3%, from FY 2015, and is a decrease of $127M, or 11.4%, from FY 2014. Among the four defense components, Navy’s marked shift from DME to O&M stands apart from the other branches. Navy’s DME as a percentage of total IT declines 1% per year over these three years from 17% to 15%. (See table below.)


 

Noteworthy IT Programs

Delving further into the Navy’s IT budget investments and initiatives provides some vision into their current priorities and future direction. Here are a few initiatives that stand out among others due to relative size, budget growth, and/or proportion of new development spending.

IT funding highlights include:

  • Next Generation Enterprise Network (NGEN) – Provides secure net-centric data and services to Navy/Marine personnel. At $1.4B this is the largest single Navy IT investments for FY 2016 and receives a 3.6% increase from FY 2015 and has 0.2% DME funding.
  • Base Communications Office (BCO) – Supports voice and data communications and video teleconferencing (VTC), etc. BCO receives a 26.5% budget increase to $222M in FY 2016, of which 0.5% is DME.
  • Multifunctional Information Distribution System – A rapid communications, navigation and identification system for tactical and C2 operations, this investment receives $107M (+12.9%) for FY 2016, of which nearly 75% is DME.
  • Core Services Architecture (CSA) – Provides the Hosting Shell of all network, server, and storage hardware and provides a management environment for production development and test systems. At $93M (+10.6%) for FY 2016, this investment is 100% O&M funding.
  • Joint Precision Approach and Landing System – A GPS based, rapidly deployable approach and landing capability, this $91M investment receives a 18.4% increase for FY 2016 and is 100% DME funding.

After experiencing both a the total discretionary and IT budget reduction from FY 2014 to FY 2015, The Navy’s discretionary and  IT budgets for FY 2016 have rebounded to near FY 2014 levels. Yet, the ongoing shift in Navy IT to predominantly O&M spending continues to point to an agency that is economizing and scrutinizing new IT investments, which could challenge companies looking to introduce new technologies or win new business.