Dale Moore, EdD’s Post

The $2 Trillion Question for Aerospace & Defense: What DOGE it all meme? The proposed Department of Government Efficiency (DOGE) aims to cut $2 trillion in federal spending. For industries tied to government contracts, like aerospace and defense, this raises critical questions: Which programs could face scrutiny? Legacy systems? Expensive R&D? Even high-priority modernization efforts might not be immune. How might contracts change? We could see a shift to fixed-price contracts and tougher performance benchmarks. The days of cost overruns being tolerated may be quickly coming to a close. Expect the government to force suppliers to own their risks. What can companies do now? • Assess your portfolio for at-risk programs. • Double down on cost efficiency and operational transparency. • Advocate for mission-critical priorities with policymakers. The DOGE may demand leaner, faster, and more accountable operations, reshaping how we innovate and deliver in aerospace and defense. What’s your take on the DOGE potential impacts? https://lnkd.in/eYEkGZNy

This isn’t the first time I’ve posted about the need to send clear demand signals to industry through on-time, predictable, and sufficient government funding, and it won’t be the last. This year, we saw some encouraging momentum in Congress – the Senate plussed up both defense and non-defense toplines, and the House made real progress toward completing all 12 appropriations bills. But once again, with just seven days left until the end of the fiscal year, we’re facing down the all-but-guaranteed likelihood of a continuing resolution (though hopefully not a government shutdown). So as Congress tries to figure out a path forward, let’s recap why a long-term continuing resolution would be bad for the aerospace and defense industry, the country, and in particular national security: ➡️ Slowing much-needed efforts to expand production capacity and modernize our nuclear arsenal ➡️ Stalling new programs that will keep our military on the cutting edge ➡️ Limiting procurement and sustainment ➡️ Hurting troop pay ➡️ Delaying key national security space launches ➡️ Jeopardizing innovative new space exploration programs like Artemis ➡️ Slowing down FAA modernization efforts enabled by the latest FAA reauthorization bill ➡️ Driving up costs across the board and wasting money on outdated programs As Chairman of the Joint Chiefs General CQ Brown Jr. wrote to Congress last week, we’re already operating from behind. We’ve lost five years of progress to continuing resolutions. And it’s even worse now, because, as General Brown wrote, we’re in the “most dynamic and challenging global security environment” he’s seen in his 40-year career. I know Congress knows this just as well as I do, but it bears repeating. So I’m hoping that Congress will see the harm of long-term and repeated continuing resolutions and get their fiscal house in order by passing full-year appropriations bills as soon as possible. A short-term CR may be necessary for now, but it shouldn’t be our default strategy. https://lnkd.in/eDxdWYRD

I recently read Warren Katz's piece on the challenges of the Cost Plus model in U.S. defense contracting. The Army's focus on a system that stifles innovation and discourages smaller tech companies reflects a broader issue: outdated practices hindering progress. It reminds me of my own field experiences, where modern, flexible approaches are crucial for competitiveness. Without a mindset shift, we risk falling behind in defense and technological advancement.

The U.S. is projected to have an $833 billion defense budget for FY25, although there may be delays in its approval. A key lawmaker has indicated that while the proposed budget reflects a continued commitment to national defense, the timeline for its approval could be affected by congressional procedures and negotiations. Similar to past years, where budget approvals faced delays due to political discussions, stakeholders may need to prepare for a potentially extended timeline before the FY25 budget is finalized. This projected increase underscores the ongoing emphasis on defense spending amid evolving global security challenges. Timely engagement in discussions can help avoid disruptions in funding and strategic planning. #DefenseBudget #NationalSecurity #FY25 #Congress #MilitarySpending #BudgetApproval #Pentagon #DefenseIndustry #USPolitics

I highly recommend reading my colleague Omar T.'s insightful op-ed on the urgent need for greater accountability in Pentagon spending. Instead of inflating the Pentagon budget beyond what’s necessary, we should focus on closing loopholes that allow defense contractors to overcharge taxpayers. It’s time for fiscal responsibility and transparency to ensure our national security is safeguarded without unnecessary financial burdens. Read Omar’s op-ed here: https://lnkd.in/eqQN4kew #FiscalResponsibility #Accountability #PentagonSpending

If I were to categorize my posts, I'd say they broadly fit into two buckets: posts about technology, especially in electronic warfare and missile defense, and posts about how those technologies are changing warfighting. This mirrors what I generally like to do professionally: help to develop technologies and understand how those technologies help win the next fight. However, as anyone who plays in this game knows, in order to do the work you want to do, you have to understand how to develop and run a viable business within the guidelines that the DoD has set up to do that. This is akin to cleaning up the kitchen so you have a good place to cook; it's the project before the project that you don't necessarily want to do, but you know that if you don't do it, you won't get to do the rewarding work. This article details some of the frustrations around working with one of the DoD's favorite types of contract vehicles: "Cost Plus" contracts. These contracts are designed to get the DoD what it wants, as expressed through extensive requirements. To develop the end product, the DoD agrees to pay a contractor that contractor's costs plus a certain percentage in fees. DoD rules also define what counts as a "cost" and what doesn't, and they audit contractors to make sure that they're playing by the rules. Of course, this sets up a perverse incentive structure whereby the contractor makes more profit if an acquisition takes a longer amount of time or costs more money; a percentage of a smaller number is smaller than that same percentage of a bigger number. As this article mentions, this system is expensive to manage, incentivizes both longer schedules and higher costs, and is open to exploitation both by the DoD and by contractors. However, it allows the DoD to completely specify the requirements for the project and notionally get exactly what they want...eventually...and at a cost. The last few years have seen a groundswell of desire for innovation in the process of getting DoD money to worthy contractors in ways that are legal and get the DoD what they need. There continues to be a need for the DoD to help the defense industrial base execute more efficiently and be better stewards of taxpayer money. #defensespending #defensecontracting #costplus #army #innovation https://lnkd.in/evPvf3zT

Great Article. The Defense Industry is not the Defense Industry that Eisenhower warned us about 60+ years ago. And DoD approach is largely to blame, NOT greedy 'arms dealers'. I've experienced contract negotiations where we provided a product at well below 'market value', yet the focus was on how much profit was written into our price. Never mind that profit is what pays for innovation, pays for a contractor to go out on a limb to listen and provide a solution to what are 'known' defense shortfalls. Defense leaders have been screaming to get private capital to invest in the defense market, but why would they when their returns are capped at around 10%? Much better investment to buy real estate, invest in Google (27% returns), or Microsoft (44% return), or Apple (34%). Bottom line, you get what you pay for. If you cap returns, companies have less capital and less incentive to go beyond 'requirements' and provide cutting edge tech to our warfighter. They simply cannot afford it, and the contracting largesse of the DoD actually discourages it. It's like keeping gifted and talented kids moving through school at the same speed a the lowest common denominator.

Congress’s passage of a continuing resolution (CR) through December avoids an immediate government shutdown but introduces another round of funding uncertainty for defense agencies. This short-term extension keeps vital programs afloat but poses significant challenges for defense contractors needing stable, predictable funding to advance key projects, including modernization, munitions, and new systems. CRG’s SME-Based Opportunities, Interim Advice & Differentiators: Opp - Defense Program Continuity & Risk Mitigation: As the CR only extends funding until December, agencies and contractors must plan for potential disruptions and delayed funding for critical projects. -         Advice: Proactively engage with government clients to ensure your ongoing projects have contingency plans in place. Maintain a flexible staffing model to manage workload fluctuations due to funding uncertainties. -         Differentiator: Companies that demonstrate resilience and adaptability during funding gaps will be trusted partners. CRG provides expert guidance on navigating the complexities of short-term funding, ensuring program continuity. Opp - Strategic Communication & Proposal Preparation: With potential funding cuts looming in FY 2025, contractors need to effectively communicate their value and impact on national security to secure their share of limited funds. -         Advice: Develop concise, high-impact proposals that emphasize cost efficiency, ROI, and mission-critical capabilities. Utilize SME insights to highlight how your solutions align with urgent defense priorities. -         Differentiator: CRG's proposal management expertise ensures your submissions resonate with decision-makers, maximizing your chances of winning critical contracts amidst tightening budgets. Opp - Modernization & Readiness Support: The CR’s impact on modernization programs like the B-21 bomber and Columbia-class submarine calls for innovative solutions to keep projects on track. -         Advice: Offer modular, scalable technology and support services that can adapt to shifting timelines and budgets. Focus on enhancing existing capabilities to maintain readiness and operational efficiency. -         Differentiator: CRG connects you with defense stakeholders to align your solutions with modernization goals, ensuring that you remain a vital part of the evolving defense landscape. Contact CRG today to navigate funding uncertainties and keep your defense projects moving forward! 👉 crgroupinc.com | [email protected] #CRG #DefenseFunding #ContinuingResolution #NationalSecurity #Congress #DefenseModernization #MilitaryContracts #DefenseIndustry #DoD #DefenseContractors #GovCon #FY2024 #FY2025 #FederalSpending #FederalBudget

For the #defense budget watchers, expect a Continuing Resolution (CR) on October 1st, extending through mid-November or possibly early 2025. Defense financial managers have implemented measures to mitigate risks as CRs have become the norm. Nonetheless, the PPBE Reform Commission highlighted in their Final Report that "late enacted budgets, and long CRs, pose another critical challenge to resource allocation. The CRs generally include a provision prohibiting new start activities, which can slow efforts to insert #innovative #technology in both new and current programs. Not knowing what the final appropriations will be until well into the fiscal year further hinders effective budget execution and the timely delivery of capabilities to the warfighter." #financialmanagement #accounting #auditing #budgeting #military #federalbudget #govcon #governmentcontracting #SDFM #CDFM #defensecontracting #militaryreadiness