By: Ryan Byrd
On January 10, 2013, Deputy Secretary of Defense Ashton Carter issued a memorandum for the secretaries of the various military departments regarding the handling of the budgetary uncertainty in fiscal year 2013.
In the memo, Mr. Carter identifies two sources of the budgetary uncertainty: the Continuing Resolution (CR) and the potential of the deferred sequestration. The CR holds the operating funding for the DoD at FY 2012 levels and could be extended to the end of the fiscal year if Congress does not enact appropriations bills for FY 2013. The potential sequestration could occur as early as March 1, 2013.
According to Mr. Carter, each of these issues poses significant challenges to the DoD when faced in isolation, negatively impacting the department’s ability to maintain a ready force and perform wartime operations.
To mitigate the impact of the budgetary uncertainty, Mr. Carter provides the following guidance to reduce the impact on its workforce, operations, and unit readiness in the near term. He notes that due to the temporary nature of the CR, any actions below would need to be reversible at a later date in the event that Congress acts to remove the risk of the budgetary certainty regarding the CR.
Near-Term Actions to Address
Budgetary Uncertainty Related to the CR
- Freeze civilian hiring
- Provide authority to terminate employment of temporary hires and to notify term employees that their contracts will not be renewed
- Reduce base operating funding
- Curtail travel, training, and conferences
- Curtail facilities maintenance or Facilities Sustainment, Restoration, and Modernization
- Curtail administrative expenses such as supply purchases, business IT, ceremonies, etc.
- Review contracts and studies for possible cost savings
- Cancel third- and fourth-quarter ship maintenance availabilities and aviation and ground depot-level maintenance activities
- Clear all research and development (R&D) and production contracts and contract modifications that obligate more than $500 million with the USD(AT&L) prior to award
- For Science and Technology accounts, provide the USD (AT&L) and the assistant secretary of Defense (Research & Engineering) with an assessment of the impact that budgetary uncertainty may have on meeting departmental research priorities
Longer-term budgetary challenges resulting from potential sequestration in March would have a greater impact on the DoD. As such, Mr. Carter provides the following guidance—specifically related to the DoD civilian workforce—to prepare for and mitigate the impact of possible sequestration.
Long-Term Actions Regarding the Civilian Workforce to Address
Budgetary Uncertainty Related to Sequestration
- Release temporary employees
- Do not renew term hires
- Impose hiring freezes
- Authorize voluntary separation initiatives and early retirements
- Consider the possibility of furloughs of up to 30 calendar days or 22 discontinuous workdays
Per Mr. Carter’s guidance, when developing their draft budget plans, components should exempt military personnel funding and fully protect funding related to wartime operations and Wounded Warrior programs from any sequestration reduction. In addition, per the guidance, components should strive to protect family programs, funding associated with military readiness, and investments funded in overseas contingency operations.
With a discrete focus on the civilian DoD workforce and non-mission-critical research and development spending, Mr. Carter’s memo gives insight into areas within the DoD that may be impacted most by the budgetary uncertainty.
The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.