$1.5 Billion-Plus Hit on USAF from Yearlong CR, Contract Delays Baked In

Vice Chief of Staff Gen. Seve Wilson said the Air Force no longer awards contracts in the first two quarters of the year, because it now assumes it won't have a budget on time. Air Force photo by SrA. Jessica H. Smith.

If Congress opts to kick the budget can all the way to next year and compel the services to operate on a yearlong continuing resolution, the damage to the Ai?r Force would be worse than $1.5 billion, and it would strike directly at readiness, Vice Chief of Staff Gen. Steven Wilson said.

In an interview with Air Force Magazine, Wilson said during budget testimony season last year, he called a yearlong CR a “$1.5 billion math problem.” It would compel him to take money out of “flying hours, … weapon systems support,” and maintenance accounts, and “all those impact readiness.”

“What this means is, we have to stop flying, shut down depots, [and] stop civilian hiring,” said Wilson.

Budget instability “makes everything unpredictable,” he added, noting? the Air Force has begun to assume Congress will fail to deliver a budget, baking in budget delays to program timelines.

“We don’t do a contract in the first six month of the [fiscal] year,” Wilson admitted. “I can’t go out and say, ‘I’m going to put something on contract in October,’ because I know I’m not going to have a budget.?” And now, “Here we are in January, without a budget, and talk of it continuing, so, no: Let’s don’t plan any contracts in the first two quarters. And tha?t’s just built-in.”

The T-X trainer contract had been hoped for by the end of calendar 2017, but Wilson said it’s not likely to be awarded before June. “We’re not going to see it because we can’t plan on one,” he said. Such a freeze will also likely affect the JSTARS Recapitalization program, the contract for which had been expected in the March-April timeframe.

In previous years, the Air Force has managed CR impacts by moving money among accounts to continue its cashflow to projects like the KC-46 tanker, which is of a fixed-price nature. Disrupting cashflow to fixed-price deals—increasingly common—effectively break the contract and reopen it for renegotiation. Wilson did not have a dollar amount for contract disruptions, but a CR prevents the service from entering into any new-start projects.

“I need a stable, predictable budget” to make efficient use of resources and keep projects on track, Wilson asserted.