Unfunded Requirements AWOL in 2013 Budget
By Elliott Suthers on May 7, 2012 - 9:52am
As the 2013 defense budget trudges its way through the House markup on Wednesday, there’s one very important element missing from the debate — the services’ annual unfunded requirements list.
Often referred to as the military’s “wish list,” unfunded requirements — known as “ufers” to the procurement community — are the programs that the services want, but can’t find money for in the president’s budget. The list is tacked on as an addendum to the annual defense budget, and then presented to Congress with the thinking that, by showing lawmakers what they’re missing out on, you might just guilt them into funding the systems.
In years gone by, ufers were often seen as the first stage to getting a program funded. The wisdom was that, if you stood in line long enough, eventually the bouncer would lift the velvet rope and let you in.
For defense contractors, this meant that short of winning a program outright, working with the services to score a ufer was the next best thing.
But with budgets rapidly drying up, and the dreaded sequestration on the horizon, the service chiefs have forgone their annual wish list, and instead focused their energies on fighting for the programs that are already in their budgets.
This is going to put defense companies in a tricky position over the next few years. Already reeling from fewer program starts, manufacturers of military technology are going to find it even more difficult to get the funding they require to get their latest technology off the drawing board and into the field.
But not all hope is lost. Though the ufer list definitely made the process of getting a program off the ground easier, it was by no means the only avenue with which to do so. Listed below are a few recommendations.
Find allies in Congress
One way around the services’ reluctance to provide a ufer list is for contractors to work with Congress directly. Nobody in Washington actually believes that our five branches of military have everything they desire, especially the Republicans. So this is where direct lobbying efforts could pay off big time.
As we’ve seen in the past, lawmakers have little compunction about telling the military how to spend its money, and it seems realistic to expect this Congressional activism to only increase in the coming years.
In fact, according to a number of sources that I’ve spoken to, the services will actually be relying on lawmakers to champion a number of efforts that are simply unpalatable to the 2013 president’s budget. (Support for Israel’s controversial Iron Dome system is a good example of this).
My suggestion here is to work closely with program offices, research labs and the user community to anticipate future needs, and then offer your local representatives the chance to fund it through whatever means necessary. If it’s a genuine need, produced in a responsible fashion, that will create or secure jobs, a smart lawmaker will jump at the opportunity.
Align technology to operational doctrine
The simplest way to sell something to a customer is for them to want it. Right now, the administration wants more unmanned aircraft, less troops, and technology that’s suited to its efforts in Asia.
It would, therefore, be reasonable to anticipate that the sheer majority of the military budget will be dedicated to these areas. While this is probably bad news for some companies that specialize in manned, troop carrying aircraft that can only land in Europe, most businesses in the defense industry are diversified enough that they’ll survive.
Suggestion: before you even consider approaching your Congressman to fund your program, ensure that it adheres closely with what’s going to be needed in the next 10 years. Contractors love their science experiment. Taxpayers don’t.
Even if you think that what you’re producing is the most revolutionary widget in the history of widgets, if it’s not going to play a part in the administration’s planning, it’s not going to be in its budget.
More IRAD funding
If a Congressman is expected to go out on a limb to support a program, they’re going to want to see a little skin in the game from their contractor partners. Think of it as a gesture of goodwill.
Companies expecting government contracts are going to have to put more of their own funds into their initiatives. In today’s tough environment, the government simply won’t fund endless research cycles. This, paired with an expectation of higher production readiness levels and lower program risk, is going to require a little more IRAD funding than many contractors are currently comfortable with.
More IRAD is a risky proposition, but it will be absolutely critical in the next decade as it will be the only way of convincing Congress and the services that you’re ready to play ball. And that’s half the battle.
Elliott Suthers, is a vice president at Spector & Associates and a registered government lobbyist. He specializes in the defense and technology sectors. Prior to joining Spector, Elliott worked in government relations for the United Nation’s Development Programme in Washington, D.C, with the Republican National Committee during the 2008 Presidential cycle. He has also advised two successful senatorial campaigns. Elliott is a current political contributor to Forbes.com and can be reached at Elliott@SpectorPR.com.