Details from DoD’s Revised FY 2017 Budget Request

This week’s post provides details surrounding the Department of Defense’s revised budget request for fiscal year 2017 in the Consolidated Appropriations Act that is currently being considered by the Senate. Keep in mind that the numbers presented here are found in the House’s version of the Omnibus spending bill. The Senate could still change these totals, but knowing what Senators are debating can at least provide some understanding of what the DoD is thinking to close out FY 2017 and set the stage for the FY 2018 request it is expected to release toward the end of May.

Air Force

The table below shows the Air Force’s requested budget totals for FY 2017, both from the previous administration’s final budget and the new administration’s revised request.

Air Force’s spending on Personnel is expected to rise by a tiny +0.05%. Similarly, its spending on Procurement is expected to rise +0.4%.

By contrast, Air Force spending on Operations and Maintenance and Research, Development, Test, and Evaluation (RDT&E) are both expected to decline, with O&M falling -3.4% and RDT&E falling -1.15%.

Army

The Army’s request shows a different pattern, with RDT&E spending expected to rise +10.8%, or just over $800M.

Like Air Force, however, the Army also requested a slight bump in its spending on Personnel and a slightly larger increase of +8% in its Procurement budget. The latter is good news for the contracting community because it signals that Army’s spending on contracted efforts will grow in the second half of the fiscal year. The only major area where the Army expects its spending will decline is O&M, for which it requested -3.16% less than in the spring of 2016 when it released the original FY 2017 request.

Navy

The Navy expects its funding to fall in 3 major areas: Personnel (-0.2%), O&M (-2.35%), and RDT&E (-0.35%).

The only area where the Navy hopes its funding will grow is in Procurement, which is slated to receive an extra $4.8M. Like the Army, this is good news for contractors as it suggests Navy program offices will ramp up their spending in the latter half of FY 2017.

Defense Agencies

Looking at the Defense Agencies, we see a generally similar pattern of falling requested O&M funding (-0.6%) and rising requested Procurement funding (+7.9%)

The big difference with the Defense Agencies is that their requested RDT&E funding is +2.6%, which puts them in company with the Army. This makes sense from a certain perspective as the Army and the Defense Information Systems Agency work closely together on major initiatives like the Joint Information Environment.

Concluding Thoughts

Assuming the Senate passes the 2017 CAA with the defense funding portion relatively intact, industry will see DoD procurement activity rise across the board from June through September. This summer could be busier for proposal writing teams than it has been in recent years. Uneven RDT&E funding, meanwhile, signals some increased activity at agencies like DARPA, the Defense Health Agency, and DISA, as well as a slight bump in business across the Army. Activity should remain relatively static in the Air Force and Navy.