John McCain

CAPITOL HILL: The balance of power between the Office of Secretary of Defense and the four service chiefs shifted to the uniformed leaders today as details began to seep out about the annual defense policy bill.

The House-Senate conference on the 2016 National Defense Authorization Act largely enshrined what Sen. John McCain wanted as part of a major acquisition overhaul proposed in the Senate version of the NDAA.

Here’s our earlier summary of the proposed changes. All of these were approved pretty much as is:

• The heads of the four armed services will get much increased control over weapons programs and requirements, something outgoing Army Chief of Staff Ray Odierno has pushed hard for. The Office of Secretary of Defense (OSD) — in particular the undersecretary of acquisition, technology and logistics — will lose some power.
• The services will be punished for poor performance and must ensure they know about changes in requirements, cost and schedule. In the event of a Nunn-McCurdy breach, the services will have to pay a 3 precent penalty to a rapid prototyping fund overseen by OSD. Also, oversight of the program would shift to OSD until the program is back on track.
• To boost the speed with which weapons are fielded, the proposed bill creates what is being called a “middle tier” of acquisition. It’s designed to encourage the development and fielding of weapons in two to five years. After that, the idea is to do that which was discussed in the late 1990s — spiral development: You field the weapon quickly. Upgrade. Field the upgrade. Upgrade. Repeat.
• The bill would confer special authority on Cyber Command to develop and buy weapons in much the same way that Special Operations Command (SOCOM) does — with few bureaucratic impediments. (The great majority of SOCOM acquisitions are smaller programs, (ACAT III), “have short acquisition cycles, and use commercial off-the-shelf and nondevelopmental items or modify existing service equipment and assets,” the Government Accountability Office says.)
• It would allow the Pentagon to buy commercial items from a nontraditional defense contractor. For example, the military could buy thousands of Apple laptops without Apple being subject to the sort of defense acquisition regulations faced by the large defense contractors.
• The bill would push the Pentagon to use more authorities it already possesses in law and directs the military to study how it would use those authorities. One of the most intriguing examples is US Code 2373, fondly known as “experimental purposes language.” The language was originally drafted to help the Army build the Army Air Corps in 1926. “It’s still active,” the staffer says, “but it hasn’t been used. ” It is simply written and appears quite powerful: “(a) Authority.— The Secretary of Defense and the Secretaries of the military departments may each buy ordnance, signal, chemical activity, and aeronautical supplies, including parts and accessories, and designs thereof, that the Secretary of Defense or the Secretary concerned considers necessary for experimental or test purposes in the development of the best supplies that are needed for the national defense. “(b) Procedures.– Purchases under this section may be made inside or outside the United States and by contract or otherwise.”

The hotly fought battle over the Russian-made RD-180 rocket engines ended with the House and Senate agreeing to add four engines to the five already approved, giving the government nine engines. ULA had been allowed by law to use just five RD-180 engines and said it needed at least 14 engines. The House version of NDAA would have let them use all 14. The Senate version, which prevailed, clears the use of no more than nine. Sen. John McCain was adamant and outspoken in his opposition to allowing the use of more engines beyond the limits place in last year’s bill. A senior congressional staff member told me that the bill also authorizes $184 million for continued work on new rocket propulsion technologies.

We’ll have much more on the bill tomorrow.