Thought Piece

The Four Seasons of Defense Budgets

Continuing Resolutions are the norm these days, and the impacts on industry and government could be mitigated with AI.

Sep 18, 2024

Spring

The springtime mist of small Continuing Resolutions (CR) dollars, lightly falling on pre-established programs as everyone "waits for their budget", budding new programs are still under threat of death from another 3-month cold snap. This season of anticipation and anxiety often sees managers cautiously navigating their limited financial leeway, prioritizing urgent needs while significant projects remain stagnant. The piecemeal funding, though providing temporary relief, lacks the robustness needed for strategic development and expansion, particularly in critical areas of government function. The uncertainty stifles innovation and growth, with program managers unable to commit to long-term contracts or initiatives.

From a defense standpoint, the spring's CRs introduce significant risks to maintaining and advancing military capabilities, especially in the context of great power competition. As emerging threats require rapid and adaptive responses, the inability to predict funding streams hinders the Department of Defense's capacity to invest in new technologies or scale existing programs effectively. This financial unpredictability could delay critical advancements in cybersecurity, artificial intelligence, and other areas vital for maintaining technological superiority.

Summer

The summertime bonfire of O&M budgets and last year's RDT&E, "first-in/first-out, 80% obligated by July"...after finally getting your full budget in June. Funding gets burned with wanton abandon, because the only thing worse than wasting money is not getting it next year because you failed to expend it fast enough last year. This frenzied spending spree not only strains administrative capacities but also often leads to suboptimal procurement decisions, as the rush to expend funds can overshadow considerations for cost-effectiveness and strategic alignment.

For the Defense Department, the summer's rush to spend can be particularly detrimental. In the race against fiscal year deadlines, there is a tangible risk that hurried expenditures might not align with broader strategic needs, potentially resulting in investments that do not adequately address the challenges posed by near-peer competitors. This misalignment can weaken the military's readiness and hinder its ability to adapt to new threats or operational demands, which are crucial in a dynamically shifting global power structure.

Fall

The autumn where last minute end of year buys give way to the fall of budget contingency plans that get revised on a weekly basis, less useful than napkins. This often chaotic period sees a scramble to adjust plans and expectations with the reality of actual appropriations, leading to rushed decisions and compromised strategic objectives. The makeshift adjustments and patchwork spending not only undermine the efficiency of government operations but also erode the foundation of future fiscal planning and execution.

In the context of national defense, the fall's erratic spending and planning cycle can severely impact readiness and modernization efforts. As defense initiatives require consistent and predictable funding to maintain momentum, the erratic flows jeopardize not only current operations but also future capabilities, particularly in areas requiring sustained investment like space, cyber, and advanced computing. This volatility could ultimately compromise national security in the face of evolving global threats.

Winter

The deep frozen winter wherein nothing is certain, save than not a single red cent with go on contract...plus there's like a week's worth of federal holidays. This period of fiscal inactivity often forces a hard pause on many governmental activities, halting progress in various sectors. The stringent constraints on spending during this time exacerbate the challenges faced throughout the year, leaving critical projects in limbo and stakeholders in a state of prolonged uncertainty.

For the Defense Department, winter's standstill poses direct risks to sustaining force readiness and advancing technological edges required in great power competition. Delays in procurement and development during this crucial period can result in gaps that adversaries might exploit, potentially altering the strategic balance in subtle yet significant ways.