business

Anyone who has attended an AFCEA conference in the past two months has heard the constant drumbeat from senior government leadership on the limitations on operations and readiness likely to occur in defense, intelligence and homeland security. At the AFCEA/USNI West 2013 Conference in San Diego January 29-31, the vice chairman of the Joint Chiefs of Staff told a packed audience that the U.S. Defense Department did not know how much money it would receive, when it would receive it or what the restrictions on its use would be.

While we are getting a similar message from defense, intelligence and homeland security leaders, the most concise statement of the problem comes from Deputy Secretary of Defense Dr. Ashton Carter. In a January 10 memorandum, “Handling Budgetary Uncertainty in Fiscal Year 2013,” Carter points out that the department faces two elements of economic uncertainty in this fiscal year. First, the department, as are all U.S. federal agencies, is operating under a continuing resolution (CR) that expires March 27. While the Defense Department is working with Congress to get appropriations bills, the possibility exists that it will operate under a CR for the remainder of the fiscal year.

Under a CR, the department is limited to prior-year funding levels, and there can be no new starts. In addition, transfer of funds among categories is very limited. Second, Congress deferred potential sequestration under the American Taxpayer Relief Act of 2012 from January 2, 2013, to March 1. If sequestration does occur this late in the year, the approximately $46 billion in reductions would occur in a very concentrated period. Remember too that the reductions under sequestration have few exceptions and must be applied across all program elements.

A new computing architecture emphasizes shared resources.

The nation’s intelligence community has embarked on a path toward a common computer desktop and a cloud computing environment designed to facilitate both timely sharing of information and cost savings. The implementation could result in budget savings of 20 to 25 percent over existing information technology spending within six years, but the ramifications could include large cultural changes that result both in lost jobs and business for industry partners.

Al Tarasiuk, chief intelligence officer for the Office of the Director of National Intelligence (ODNI), explains that the changes will be difficult. Agency employees, and the vendors who help operate and manage information technology for the 17 agencies composing the nation’s intelligence apparatus, will feel the effects of the cost cuts.

“Right now, technology is not our biggest risk. The culture change is our biggest risk, and that extends to our industry partners. We have a lot of industry employed in the community through service contracts and other things. They could help, or they could choose not to help,” Tarasiuk emphasizes, candidly describing the pivotal role of these firms in a transition that could spell the loss of both business and jobs. “They know, and I’ve been very open with them, that we’re not going to need the pool of resources of people that we have today to manage what we have in the future.”