The top civilian and military Army leaders yesterday issued their “command intent” and immediate, but reversible, actions for risk mitigation in the face of fiscal uncertainty.
The Jan. 16 memo from Army Secretary John McHugh and chief of Staff Gen. Raymond Odierno follows guidance to the services by the deputy Secretary of Defense authorizing immediate steps to reduce expenditures (Defense Daily, Jan. 11).
“Given the magnitude of our budgetary uncertainty, the Army must act now to reduce our expenditure rate and mitigate budget execution risks in order to avoid even more serious future fiscal shortfalls,” the memo said.
McHugh and Odierno direct that Army Materiel Command plan to cancel third and fourth quarter depot maintenance and reset orders and contracts not directly supporting units deployed to a theater or entering the Force Generation available pool. Specific actions won’t be taken until Feb. 13.
The Assistant Secretary of the Army (Acquisition, Logistics and Technology (ASA (ALT)) is to coordinate with commands, program executive officers and industry ”to gather data, assess impacts and develop plans regarding acquisition programs, science and technology activities and contracts,” the memo states.
Additionally, the ASA (ALT) will immediately institute procedures to submit all research, development test and evaluation and production contract awards or modifications that exceed $500 million to the Under Secretary of Defense (ALT) (USD (ALT)) for approval before any award.
ASA (ALT) must also initiate an assessment of science and technology accounts for the impacts of the budgetary uncertainty on meeting departmental research priorities and provide results to USD (ALT) and the Assistant Secretary of Defense for Research and Engineering.
Also immediately, the leaders direct an immediate Army-wide civilian hiring freeze. Temporary employees will be terminated and term appointments will not be extended. The service is considering civilian furloughs.
Certain training will be curtailed, as will conference attendance, administrative and supply spending, and contracts and studies unless congressionally directed or mission critical.
The top Army officials also make clear that exceptions may be made for mission critical purposes or if the actions are irreversible.
McHugh and Odierno said such steps would only achieve “a small portion” of the required savings if sequestration and a year-long continuing resolution occur.
More specific guidance will come from the assistant secretary of the Army (Financial Management & Comptroller).