Navy FY 2020 Discretionary and IT Budget Request Observations

In mid-March the White House released its fiscal year (FY) 2020 budget request the delay from its normal February release due to a month-long partial federal government shutdown. The initial budget release included broad top-line details for the Department of Defense (DoD) and its components and military departments, like the Department of the Navy (DoN). However, fuller detail of the DoD and MILDEP FY 2020 budgets, including information technology (IT), were not released until mid-April.

The latest budget request sustains strong growth for the Navy and the other defense components that would continue budget increases in the FY 2018 and FY 2019 budget appropriations.

Total Discretionary Funding and Priorities

The proposed FY 2020 budget provides $205.6B in total discretionary budget authority to the Navy and Marine Corps, a 5% increase over the FY 2019 level of $195.6B. The Navy’s overall strategy seeks to align people, capabilities and processes to strengthen its global readiness posture.  

Navy discretionary funding highlights include:

• Strengthens Navy global readiness posture by adding $5.6B to Operations and Maintenance (O&M) vs. FY 2019 to reach $68.5B. Increased funding goes to Combat Operations - ships aircraft and base support - and Force Mobilization.
• Supports innovation with $20.4B in RDT&E funding for advanced weapons systems and component development.
• Provides $61.1B in Procurement funding. New procurement priorities support fleet expansion, including tactical combat platforms, shipboard IW, missions systems and core communications capabilities such as CANES.
• Overseas Contingency Operations (OCO) funding priorities are dominated by combat readiness O&M activities and procurement of related components.

Navy FY 2020 IT Budget

Over the last several administrations public visibility into the DoD IT budget has been slowly by consistently decreasing, 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, OMB began masking the investment details of unclassified IT systems categorized as “National Security Systems” from public view. That accounts for approximately $17B in IT budget across the DoD with roughly $3.4-$3.7B of that within the Navy.

Though the DoD holds back the individual program details, they do release total top-line budget estimates for both the NSS and Classified IT/Cyberspace Activities (CA) budget categories for each of the DoD components, allowing us to piece together a total IT budget for the Navy and Marine Corps. The result for FY 2020 is that the DoN is requesting a combined $10.4B for IT, which is 6% above FY 2019 and reflects increases across all funding categories. (See table below.)

Noteworthy IT Programs

Looking 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:

• 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 $320M for FY 2020 the Navy’s single largest IT investment (other than $187M in transfer payments to DISA) sees a +85% increase over FY 2019 levels. This investment is designated as 100% O&M spending.
• 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 $150M for FY 2020 the investment includes $111M (74%) DME funding. Overall, the initiative’s budget increases more than $45M (+43%) over FY 2019.
• 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 $110M for FY 2020, a decrease of $10M (-8%) from FY 2019. DME accounts for $9M (8%) of the FY 2020 budget.
• 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 $108M for FY 2020, of which 14% ($15M) is DME. The initiative declines by 35% over the FY 2019 level.
• 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 2020 request is for $84M, a $33M (64%) increase over FY 2019. DME accounts for 100% of this investment.

The final budget appropriations for the Navy and other defense and civilian departments will take months to hammer out in Congress, something which is needed by the end of September if the DoD is to begin FY 2020 with an approved budget vs. continuing resolution.

That said, it is unclear how Congress will eventually respond to the DoD’s effort in this budget to shift a significant portion of base funding over to the OCO budget category simply to avoid sequestration caps that would re-engage in FY 2020 in the absence of new congressional action to remove it – either in the form of a bipartisan budget agreement or a similar provision within the Defense appropriations bill. (OCO falls outside of the sequestration scope.) In light of those uncertainties and potential differences of funding priorities between Congress and the Pentagon, it is uncertain whether we will continue to see similar funding increases in FY 2020 that we have seen over the last several years.

Get a focused look into the current contracting outlook at the Navy, check out our free webinar Navy Strategic Outlook for 2019 and Beyond.

For a deeper dive into the details of the FY 2020 budget, check out our report: Insights and Implications: FY 2020 Federal Budget Request.

Get a free report summary of Insights and Opportunities: FY 2020 Federal Budget Request.