Air Force FY 2019 Discretionary and IT Budget Request Snapshot

In February the White House released its fiscal year (FY) 2019 budget request and the Department of the Air Force accounts for the largest total discretionary budget and the smallest information technology (IT) budget among the four Department of Defense (DoD) components.

The new budget request sustains growth for the Air Force and the other defense components that could build on budget increases included in the FY 2018 omnibus appropriations that was finalized recently.

A new budget and the year-to-year changes reflect adjusting priorities and efforts in the proposed budget. Normally, I would look at the changes from FY 2018 to FY 2019, but due to the uncertainty of the FY 2018 budget data that the Office of Management and Budget (OMB) provided, (i.e. the impacts of being under multiple Continuing Resolutions (CR) for half of the fiscal year), I chose to base the growth comparisons on FY 2017.

Total Discretionary Funding and Priorities

The proposed FY 2019 budget provides $194.2B in total discretionary budget authority to the Air Force, a 19% increase over FY 2017. The Air Force’s overall strategy supports personnel and operational readiness and force strength to bolster global capabilities.  

Air Force discretionary funding highlights include:

• Providing $61.4B for O&M activities, adding $5.7B vs. FY 2017 with increased funding that prioritizes Flying Operations ($14.2B), Space/Combat Forces ($7.2B, +8%), Civilian Pay ($7.3B), and Training and Recruiting ($1.4B).
• Allocates $40.5B to RDT&E, $15.3B above FY 2017. The funding growth focuses on Operational Systems Development ($13.1B), Demonstration and Validation ($6.5B), Engineering and Manufacturing Development ($5.3B), and Management Support ($2.8B).
• Procurement receives $50.5B in funding for FY 2019, $5B more than in FY 2017. Relevant non-platform funding priorities include Other Procurement funds on Electronics/Telecom Equipment ($1.6B), like Distributed Common Ground System ($448M).
• The budget allots $24.4B for Overseas Contingency Operations (OCO), $7.3B over FY 2017. Funding priorities are dominated by readiness O&M of $15.5B and procurement of $7.0B with increases of $3.8B and $2.4B respectively vs. FY 2017.

Air Force Total IT and New Development Budgets

Over the last several administrations OMB and the DoD have been consistently reducing public visibility into the DoD IT budget by placing an increasing proportion of this spending behind a classified veil.

For FY 2019, OMB no longer allows unclassified IT systems categorized as “National Security Systems” (approximately $17.3B in the FY 2019 request) to be publicly viewable. The net result for FY 2019 is that the Air Force is requesting a combined $2.2B for IT.

The FY 2019 IT budget of $2.2B would be nearly $400M (21%) above the FY 2017 level and if the estimated level for FY 2018 is accurate then we are looking at a more modest year-over-year increase of $77M or +4%. The increase in DME funding from FY 2017 to FY 2019 of $283M is an even larger proportional increase (+78%) than the total IT budget and the FY 2018-19 comparison of +$143M represents a 29% bump. (See table below.)

Noteworthy IT Programs

Looking further into the Air Force’s IT budget initiatives gives us some insight into their current Enterprise IT priorities as well as a glimpse into potential future investments. Below are a few initiatives that stand out among the total budget due to their relative size, budget growth, and/or proportion of new development spending. For FY 2019, IT funding highlights include:

• Enterprise License Agreements – This line item bins all funding for Microsoft and Adobe licensing agreements to show funding just for licensing in IT budget reporting. At $200M for FY 2019 the Air Force’s single largest unclassified IT investment sees a +134% increase over FY 2017 levels. This investment is designated as 100% O&M spending.
• Defense Enterprise Accounting and Management System – DEAMS drives improved information technology management through integrated financial information to enable accurate budget forecasting and the retirement of some legacy systems. DEAMS receives $162M for FY 2019, of which 69% ($112M) is DME. The initiative grows by more than 100% over the FY 2017 level.
• Maintenance Repair and Overhaul Initiative – This initiative standardizes business processes to deliver a materiel solution to achieve depot maintenance To-Be future state. The FY 2019 request of $77M would be a 225% ($53M) increase over FY 2017 and is 100% DME.
• Engineering & Installations – Enterprise – This program provides E&I services to support communications infrastructure i.e. MILCON and Base Information Technology Infrastructure (BITI). The $67M requested for FY 2019 is a $62M (+891%) increase over the FY 2017 level and is 55% DME funding.
• Launch Control Center Block Upgrade – Supports design, develop, test, and qualify replacements for the VCCP, JML, FDD, WSCC, ORU LCC subsystems with $63M in requested budget for FY 2019, which is $45M (+256%) above the FY 2017 level and is slated as 100% DME funding.

It will take many months for Congress to work up final budgets for the Air Force and other defense components and if the recent FY 2018 omnibus spending bill is any indication it could be a year from now before things are settled. But if the omnibus, the 2-year bipartisan budget deal and this new budget request is a fair indication then it seems that we can expect budget increases at the top line, at least.