How the Pentagon’s big tech bets could suffer from a continuing resolution

Whether the government shuts down this weekend or limps into the new fiscal year with temporary funding, the Pentagon’s new, big ideas could see significant delays in the year ahead. 

One example: the Air Force’s robot wingman, or collaborative combat aircraft, effort and the many individual programs that feed into it. 

While the exact effects on the overall CCA program are not clear, the Air Force confirmed to Defense One that a key program at Eglin Air Force Base in Florida that seeks to convert F-16s to be compatible with artificial intelligence could be delayed.

The experimental operations unit, which is tasked with testing the new capability as part of Project Venom, is slated to get $72 million in the fiscal 2024 budget. But because it’s a new program, a shutdown or a continuing resolution means the program would not get any funding until a new budget passes.

And with less than two days left, it looks like the government is facing two undesirable situations: a shutdown, however brief, and, possibly a series of continuing resolutions—all of which can stall the Pentagon’s technology plans, said Eric Fanning, the president of the Aerospace Industries Association.

“It’s entirely possible that we find ourselves with a series of CRs before a budget is passed,” Fanning said. 

CRs keep the government running on last year’s budget, so new efforts can’t happen—unless there’s an exemption, Fanning said. They also keep existing programs from scaling or increasing production and “the problem gets worse the longer the CR or shutdown is.” 

For example, Air Force Secretary Frank Kendall has made several strategic changes to better position the military service for a competition with China, and has plans to divest of key platforms to help with that. Planning for a budget takes about two years, Fanning said, and a CR or shutdown could put the Air Force and other defense agencies back “at least a year.”

Shutdowns can annihilate productivity for government initiatives and the companies they rely on to make things, like munitions.The Defense Department was last impacted by a government shutdown in 2013, when contractors working on the F-35 were sent home. DOD was largely spared from the extended government shutdown in 2018 thanks to a smaller spending bill that passed, but still saw some effects. 

And even a day of lapsed appropriations can slow productivity. It can take three to five days of recovery for every day the government is shut down, said David Berteau, president of the Professional Services Council: “So there's a huge loss in productivity. And that loss on the government side turns into contracts that aren't awarded, work not done, money not paid for the contractors.”

PSC and the National Defense Industrial Association penned a letter Thursday to leaders in Congress, urging them to pass temporary and permanent spending bills.

“One lesson learned on the contracting side is new solicitations, evaluations, awards—those are all put on hold. And you not only lose the time of the shutdown, you lose the time after the shutdown that it takes to get back where you were,” Berteau said.

Contractors have to keep working if there’s funding in place—with a few exceptions. 

“You have a contractual responsibility to keep going unless one of four things happens: one is if you run out of money,” he said. 

Another exception: furloughed government officials needed to sign off on contract tasks.

“For example, in the IT world, if you have a software deliverable, somebody on the government side has to sign the acceptance of that deliverable in order for you to proceed to the next task. If there's nobody there to accept, then you can't, under your contract, proceed to the next task,” Berteau said. 

Lack of access to government data, networks, or facilities could also interfere with a contractor's ability to work—as would a stop-work order. 

The Pentagon released guidance earlier this month in preparation for a government shutdown, stressing that contracts aren’t necessarily terminated due to lack of funding. And DOD may “continue to enter into new contracts, or place task orders under existing contracts, to obtain supplies and services necessary to carry out or support excepted activities even though there are no available appropriations,” according to the document.

Some excepted activities would be intelligence gathering, contracting administration for those funded with last year’s funds, and counterterrorism investigations. C4ISR—or command, control, communications, computer, intelligence, surveillance, and reconnaissance activities—are also listed. Those include keeping telecom centers, phone switches, and secure calls at command centers operations going. 

Congress and the White House have until Sept. 30 to pass funding legislation to prevent a shutdown. The Pentagon is still working through which programs would be affected by a shutdown, DOD spokesperson Sabrina Singh told reporters Thursday. 

“Our priority is always to make sure that we have an on-time appropriations, and as bad as it could be to have a Continuing Resolution, which we always want to avoid, it's even worse for the defense of the nation to have a shutdown,” Singh said. “A government shutdown is a worst-case scenario for the department, so we continue to ask Congress to do its job and fund the government.”`