Army chief says to expect fewer program cuts in 2021 budget

Following two rounds of zero-based budgeting that went after underperforming and legacy programs, the Army's 2021 budget request is likely to contain fewer deep cuts to existing budget lines, Army Secretary Ryan McCarthy told reporters.

The Army’s zero-based budgeting process -- called "night court" -- for fiscal years 2019 and 2020 was "far more aggressive because you had to reshape the portfolio," McCarthy said at a Jan. 15 Defense Writers Group event. The 2021 budget will be more focused on "refinements," he said, now that the Army has completed a push to move more than half of its research, development, and acquisition accounts to focus on new capabilities.

"And there's a lot of risk associated with that. This budget is the refinements of those decisions, and you've got be successful, in the form of demonstrations and prototypes, before you would want to expand," McCarthy said, mentioning that hard choices were still made but declined to name specific programs.

But those research and development initiatives often hinge on other transaction authorities, a fast-tracked acquisition pathway that allows the Defense Department to more quickly prototype new tech capabilities.

With OTA acquisition, Army leadership is trying to be "judicious but watching it very closely," McCarthy said.

The Defense Department has accelerated its use of OTAs in recent years. According to a Government Accountability Office report published in November, DOD had 618 new OTA awards in 2018 compared to 384 the prior year. The Army issued the majority of OTA awards, some of which were conducted on behalf of other DOD components.

Ellen Lord, undersecretary of defense for acquisition and sustainment, told reporters last month that OTA spending increased from $1.7 billion in 2016 to $3.7 billion in 2018. Additionally, 88% of those awards went to contractors who were new to the government market.

However, such fast growth has created concern for Congress, which has pushed for more OTA scrutiny.

"Congress has been very good to us on this, allowing us to have this authority," McCarthy said. Members have said they want us to use OTAs, but "if something happens and something goes wrong, we've got to be there to manage any fallout," he said.

But it looks like the night court process introduced by Defense Secretary Mark Esper when he was Army secretary will remain a mainstay, McCarthy said.

"We're going to have to do night court whether I'm in this job or not," he said. "If the prototypes start landing over the next 18 months and they work -- I mean it's a good problem to have, but then -- now you have to make choices. Do you start scaling long-range fires before helicopters, before armored vehicles?"

McCarthy said the 2021 budget request should be public by mid-February.