By Emelie Rutherford

In case Congress does not pass the defense policy bill by the start of the new fiscal year, Pentagon and congressional officials are talking about granting the military special authorities to start new and urgent programs.

Pentagon spokesman Geoff Morrell told reporters yesterday that his colleagues are concerned that fiscal year 2011 will start Oct. 1 before lawmakers pass the policy-setting defense authorization bill. It also appears Congress will not pass the budget-setting FY ’11 defense appropriations legislation before the end of September.

Lawmakers could pass a continuing resolution extending FY ’11 Pentagon spending into the fall, likely sometime in November, at FY ’10 levels.

Morrell said the Pentagon is not poised to run out of money and has supplemental war funding on hand.

“But we are concerned about the restrictions posed by a continuing resolution, and…chief among them would be our inability to launch new programs and so forth,” he said during a press briefing.

“So we are in discussions with…the (congressional) committees about how to deal with that situation, and historically the way we’ve dealt with it is that we have been given some latitude or some special authorities where necessary in our theater of operations,” he said. “So if there is an urgent need, if there is something that the forces need or the operations need that is inhibited under the continuing resolution, we would have more latitude there to do things. So that’s where the discussions stand right now.”

The Pentagon authorization bill is tied up in the Senate. Senators will return to Washington following their summer recess next week, and no specific date has been set for the chamber to debate the bill that often takes up a full week of deliberations.

Senate Armed Services Committee (SASC) Ranking Member John McCain (R-Ariz.) blocked an attempt by SASC Chairman Carl Levin (D-Mich.) to bring the legislation to the floor in early August. McCain objects to provisions in the legislation including changes to the Pentagon’s Don’t Ask Don’t Tell policy on gay troops.

The House passed its version of the authorization bill in May.

A hot-button issue in the policy-setting legislation concerns whether to fund the F-35 Joint Strike Fighter’s second engine, developed by General Electric [GE] and Rolls-Royce. The House bill funds the engine, which the Pentagon wants to stop developing, while the SASC-approved legislation does not.

On the appropriations side, only the House Appropriations Defense subcommittee has marked up a FY ’11 defense budget bill, which funds the second engine. The full House Appropriations Committee, as well as the Senate Appropriations Committee and its Defense subcommittee, have not approved their versions of the FY ’11 Pentagon appropriations legislation.

In the Pentagon, Morrell said defense acquisition chief Ashton Carter in the coming days will unveil guidance intended to spur the Pentagon to buy goods and services more efficiently.

The defense industry has submitted recommendations to the Pentagon for its efficiency effort, suggesting it incentivize cost savings by companies, tweak the contracting process, and streamline contractor-oversight methods, among other things (Defense Daily, Aug. 18).

Carter will address Pentagon reporters about the efficiency guidance in the new few days, likely early next week, Morrell said.

The Pentagon is pursuing cost-cutting measures intended to yield $100 billion in savings over five years, money military leaders hope to use to maintain 2 percent to 3 annual real growth for warfighting capabilities.

“Given the 1 percent real growth (in the defense budget) that we anticipate having over the next several years, we need to find savings within ourselves to sustain the force structure and ensure proper investment in modernization,” Morrell said. “So, clearly the efforts of Ash Carter in terms of working with industry to find a way for us to be more efficient and more effective and better stewards of the taxpayer dollars is going to be a key component to this overall effort.”

On another hot issue, the Air Force aerial-refueling tanker contract, Morrell stuck by the stance that the contract award will be “this fall.” He said he knows of no change in that timeline, despite a news report that the date could slip to December. He noted that fall runs up to Dec. 21.