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Cain: No federal budget puts AEDC projects at risk

Posted on Wednesday, December 6, 2017 at 11:00 am

STAFF WRITER

Kelly Lapczynski

 

As the federal government faces running out of money on Friday, Arnold Engineering Development Complex (AEDC) commander Col. Scott Cain said continued delays in passing a budget could have dire consequences for the complex.

Without an FY18 budget in place, Congress has until the end of the day Friday to pass a short-term spending bill to keep the government operational or risk shutdown.

As of Tuesday morning, it was unlikely that lawmakers would agree on an FY18 budget before the Friday deadline. But rather than preparing for a shutdown, the House of Representatives had proposed a stopgap funding bill that would keep the government running for the next two weeks.

AEDC Commander Col. Scott Cain met with The News Thursday to discuss the federal budget and how continuing resolutions and possible sequestration affect the complex mission.
–Staff Photo by Cameron Adams

That short-term funding extension, called a continuing resolution (CR), grants government entities the means to continue operating at the previous year’s funding level for a set period of time. In this case, the CR would extend funding through Dec. 22, while giving Congress additional time to reach a longer-term deal.

It was unclear Tuesday whether Congress would pass the proposed stopgap measure, but if the government is operational after Friday it will likely be the result of another CR.

With no approved budget, the government has been operating on such a funding extension since its fiscal year began Oct. 1. That, according to Cain, presents an ongoing problem for the largest and most advanced complex of flight simulation test facilities in the world.

 

The AEDC mission

“The purpose of AEDC is to keep the Air Force and the Department of Defense technologically superior to our adversaries,” he said. “In order to do that, we are investing – over a five-year period – about $300 million into the infrastructure at Arnold.”

Or, at least, that’s the plan.

Delays in funding mean AEDC does not have access to the money it needs to modernize the mechanical, electrical and control equipment that runs the AEDC facility – from the wind tunnels to the engine, rocket and space test facilities. Without a budget and its subsequent appropriations bill, the needed funds simply aren’t flowing in.

But the funds aren’t just stagnant this year, Cain said; they were late to start flowing last year, too.

AEDC’s modernization effort, called the Service Life Extension Program, had already lost half a year before the needed $80 million was secured to place contractors on FY17 projects. Those projects, begun too late in the fiscal year, were not finished by the end of it – and now those unfinished projects face further delay as AEDC awaits FY18 funds. When the funds do come, the monies will be needed to complete projects left unfinished last year. Those planned for FY18 may not begin this year at all.

“Modernization at Arnold is getting delayed more than a year by the effects of the continuing resolution and that puts projects at risk,” Cain said. “We are in our second year of trying to keep the facility as functional and efficient as it can be. The CR stops our ability to do that.”

Continuing resolutions are a problem, but they may not be the only problem facing AEDC this fiscal year. If no new deals are made in Congress, the Air Force could once again be looking at sequestration.

 

Sequestration

In August 2011, the passage of the Budget Control Act (BCA) ended a debt-ceiling crisis by raising the country’s debt limit. The measure prevented U.S. default, but required substantial spending cuts in exchange. One of the mechanisms used to cut spending, automatic budget sequestration, has already had an effect on AEDC.

In March 2013, government-imposed sequestration lead to a hiring freeze and mandatory furloughs, causing a civilian workforce reduction at AEDC even as the year promised to be among the busiest testing periods for the complex in some time.

The Bipartisan Budget Act of 2015, a two-year deal to roll back spending caps and increase discretionary spending, provided some relief from sequestration in 2016 and 2017 but, Cain said, “it does not in 2018.”

So not only does the Air Force, under the continuing resolution that may be renewed Friday, still not have an appropriation of this year’s funds, it is also facing the possibility that even if it receives its budgeted funding, sequestration could kick in and strip those funds away.

All of this, Cain said, puts AEDC “in a place of a lot of uncertainty” with regard to its own budget.  “We don’t have predictability for the budget and that leads to an inefficient use of that budget as we go through the year.”

Right now, Cain said his biggest concern in the midst of that uncertainty is for AEDC’s largest contractor, NAS.

 

Contract payments

National Aerospace Solutions, LLC (NAS) began performance July 2016 on the Test Operations and Sustainment (TOS) contract at AEDC, employing more than 1,300 engineers, scientists, technicians and other professionals to operate 43 wind tunnels, rocket and turbine engine test cells, ballistic ranges, space chambers and other specialized testing units, as well as to handle technology development, equipment and facility sustainment, capital improvements and other services for the complex.

Among AEDC’s six major contracts, the TOS contract stands out by way of being cost-reimbursable, paid incrementally throughout the year, rather than fixed-price, paid annually.

There’s certainly no lack of work for the contractor: 2018 is, like 2013 was, shaping up to be a busy year at the complex.

“We are fully booked,” Cain said. “Business is good as far as the customers that are on the schedule.”

But without an influx of funds, he said, “I don’t necessarily have the money I need to execute those projects.”

Under the continuing resolution, Cain said, “it’s unpredictable how much money is going to come in and when it’s going to come in.” And that unpredictability puts at risk the incremental payments that are due to the contractor.

Insufficient funds, Cain said, could lead to curtailment of the work itself and, subsequently, of the workforce. “And that’s mission failure to me.”

Because the other contractors at the complex are tied to annual, fixed-price contracts, AEDC’s ability to maintain and pay the workforce on those contracts isn’t as worrisome. But that doesn’t necessarily mean those contractors are in the clear.

 

Government oversight

If the budget is curtailed again, the impact of sequestration on the “relatively small” government workforce at the complex could become a problem.

“If sequestration kicks in again, there may be a furlough situation or a hiring freeze,” Cain said.

Under the last sequestration, he said, “We executed a furlough and brought in those people that were essential for safety, national security and protection of life – which ends up being a very few individuals.”

A hiring freeze would also mean that Cain could not fill any government vacancies at AEDC – vacancies that could, in turn, beget vacancies.

“It’s critical to have that (government workforce) fully staffed to execute the mission,” Cain said. “Those individuals are the oversight for the contractors and, without that government oversight of the contractor, the contractor can’t keep performing work.”

And because sequestration isn’t Arnold-specific, cuts to other Air Force budgets due to sequestration would likely reduce overall testing conducted at AEDC for the remainder of the fiscal year as new acquisitions are put on hold.

 

Moving forward

In a perfect world, Cain would like to see the end of continuing resolutions and military sequestration.

“If our adversaries are modernizing at a pace faster than we are and we have a strategic problem of them catching up to us,” he said, “then continuing resolutions, the Budget Control Act and sequestration exacerbate that strategic problem.

“We’ve come a long way in the last few years of restoring (combat) readiness,” Cain said. “It’s a good trend.”

But under a continuing resolution and the threat of sequestration, he said, “that trend stops.”

 

Stability sought

The Air Force is not alone among the armed services in wanting to see legislation changes that would end unstable and unpredictable funding.

Chiefs of the Army, Navy and Marine Corps have also testified before the House Armed Services Committee about how deferred modernization and maintenance programs in the wake of repeated short-term funding through continuing resolutions and the Budget Control Act have hurt aviation readiness.

The Department of Defense reports that officials from the four services have stressed an urgent need for stable, predictable budgets.

That’s a message that both government and civilian workers alike hope will reach their representatives in the U.S. House and Senate.

Kelly Lapczynski can be reached at tnrept01@lcs.net.

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