Navy FY 2021 Discretionary and IT Budget Request Observations

Earlier in February the White House released its fiscal year (FY) 2021 budget request. The latest budget request sustains priorities for the Navy and Marines that were funded in the FY 2019 and FY 2020 defense appropriations.

Total Discretionary Funding and Priorities

The proposed FY 2021 budget provides $207.1B in total discretionary budget authority to the Navy and Marine Corps, a $1.9B (-0.9%) decrease from the reported enacted FY 2020 budget of $209B. But this FY 2020 enacted amount is $3.4B above what the DON requested in last year’s FY 2020 budget, so the FY 2021 request is $1.5B above what the Navy requested last year.

Further, the FY 2021 request is $11.5B above the FY 2019 final budget actuals reported by the Pentagon. Overall, the budget trend at the Navy continues to trend upward, although the message from DoD and Navy leadership is that we should expect to see growth moderate as priorities are met. The Navy’s overall strategy continues to aim at aligning its personnel, capabilities and processes to strengthen its global readiness posture.

Navy discretionary funding highlights include:

• Strengthens Navy global readiness posture by adding $2.6B to Operations and Maintenance (O&M) vs. FY 2020 to reach $70.6B.
• Supports innovation with $21.5B in RDT&E funding for advanced weapons systems and component development, an increase of $1.3B from FY 2020.
• Provides $57.2B in Procurement funding, a $4.4B reduction from the FY 2020 enacted level.
• Overseas Contingency Operations (OCO) funding priorities continue to be dominated by combat readiness O&M activities and procurement of related components.

Navy’s FY 2021 IT Budget

Over the last decade or more the DoD has been slowly but consistently decreasing visibility into its IT budget as a growing proportion of this spending has been shifted behind the veil of classified programs and related budgets. Beginning with the FY 2018 budget, the Office of Management and Budget (OMB) began masking the investment details of unclassified IT systems categorized as “National Security Systems” from public view. That accounts for approximately $17-20B in IT budget across the DoD with roughly $4B of that within the Navy.

To date, we currently have visibility into only the portion of DON’s IT budget published on OMB’s IT Dashboard, which does not include details for NSS and other classified systems. That being the case, the Navy is requesting $5.2B for non-classified, non-NSS IT investments, up $419M (+9%) from the FY 2020 enacted level of $4.8B and $742M (+16%) above the final FY 2019 budget level. Further, the portion of Navy’s IT budget allocated to new Development/Modernization/Enhancement spending for this subset of investments is set for $637M in FY 2021, an increase of more than 37% from FY 2020. (See table below.)

Noteworthy IT Programs

Looking into the Navy’s IT budget investments and initiatives provides some idea of 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:

• Navy Enterprise Resource Planning – Enables faster, more accurate responses to the needs of the warfighter, sharing authoritative information across functional communities to improve Enterprise performance. At $382M for FY 2021 the Navy’s single largest IT investment sees a 10% increase over FY 2020 levels and 114% over FY 2019 levels. This investment is designated as 100% O&M spending.
• Base Communications Office (BCO) – Supports base desk phones, cell phones, pagers, calling cards, fax and modem lines, video teleconferencing, audio conferencing and toll free telephone services. BCO receives $140M for FY 2021, of which 20% ($28M) is DME. The initiative grows by 24% over the FY 2020 level.
• Navy Standard Integrated Personnel System – NSIPS will deliver field-level pay and personnel data to update corporate databases in peacetime, recalls, and partial and full mobilizations. At $134M for FY 2021 the investment includes $56M (42%) DME funding. Overall, the initiative’s budget increases more than $69M (+107%) over FY 2020.
• Navy Maritime Maintenance Enterprise Solution – NMMES is consolidating overlapping applications and databases, data centers, and infrastructure into a fully integrated enterprise solution. The investment requests $128M for FY 2021, an increase of $11M (+10%) from FY 2020. DME accounts for $18M (14%) of the FY 2021 budget.
• Navy Maritime Maintenance Enterprise Solution–Technical Refresh – Provides an enterprise IT solution for shore maritime maintenance that aligns to mission needs and delivers a cost effective IT solution for ship maintenance, repair for shipyards, and other industrial activities worldwide. The FY 2021 request is for $115M, a $58M (102%) increase over FY 2020. DME accounts for 100% of this investment.

DoD has yet to release updated total FY 2021 IT budget details that include subtotals for NSS and other classified systems that will provide a more complete perspective on overall IT budget growth. Stay tuned.