Contents

• Background
• The Budgetary Context
• FY2018 Defense Budget Request
• Limits on the FY2018 Base Budget Defense Appropriations
• FY2018 DOD Military Base Budget Request
• FY2018 DOD Overseas Contingency Operations Budget Request
• Unfunded Priority Lists (UPLs)
• FY2018 NDAA
• Budgetary Overview
• Comparison of Base Budget Authorizations
• Comparison of OCO Authorizations
• Comparison of EDI Authorizations
• Selected Defense Budgetary Context
• Budget Caps and the FY2018 NDAA
• FY2018 Defense Budget Request and NDAA
• House and Senate Action on FY2018 NDAA
• FY2018 DOD Budget Amendment (November 2017)
• FY2018 NDAA Conference Report (H.R. 2810)
Selected Budget and Policy Issues in H.R. 2810
• Intermediate-Range Nuclear Forces Treaty
• Deterring Russian Aggression
Countering Russia
• North Korean Threats
• Prohibitions on Transfer or Release of Detainees
• Selected DOD Cyber Matters
• Selected Government-Wide Information Technology Matters
• Software Security Issues
Military Personnel Matters
• Strategic Nuclear Forces
• Ballistic Missile Defense Programs
• Space and Space-basedBased Programs and Activities
• Overview of Ground Vehicle Programs
• Overview of Shipbuilding Programs
• Selected Aviation Programs
• Acquisition Reform
• Military Construction Budget Request
• Authorization of FY2018 Military Construction Projects

Summary

This report discusses the FY2018 defense budget request and provides a summary of congressional action on the National Defense Authorization Act (NDAA) for fiscal year (FY) 2018. The annual NDAA authorizes appropriations for the Department of Defense (DOD) and defense-related nuclear energy programs of the Department of Energy and typically includes provisions affecting DOD policies or organization. Unlike an appropriations bill, the NDAA does not provide budget authority for government activities.

The Trump Administration's The Trump Administration's initial FY2018 budget request, released on May 23, 2017, included a total of $677.1 billion for the national defense budget function (Budget Function 050), which encompasses all defensenational defense-related activities of the federal government. Of that amount, $667.6 billion was for discretionary funding that would be provided by an annual appropriations bill. Of that discretionary defense spending request, $659.8 billion was for appropriation accounts for which authorization is provided in the annual NDAA.

The FY2018659.8 billion was for appropriation accounts for which authorization is provided in the annual National Defense Authorization Act (NDAA). The remainder of the request was either for mandatory funds not requiring annual authorization or for discretionary funds outside the scope of the NDAA. That initial Administration request included $595.3 billion in discretionary funding for the so-called DOD base budget, that is, funds intended to pay for activities that DODthe Department of Defense (DOD) and other national defense-related agencies would pursue even if U.S. forces were not engaged in contingency operations in Afghanistan, Iraq, Syria, and elsewhere. The remaining $64.6 billion of the request, formally designated as funding for Overseas Contingency Operations (OCO), would fund the incremental cost of those ongoing operations as well as any other DOD costs that Congress and the President agree to so designate.

On July 14, 2017, the House passed by a vote of 344-81 H.R. 2810, the version of the FY2018 NDAA that had been reported by the House Armed Services Committee. That bill would have authorized $613.8 billion for the base budget—$18.5 billion more than the Administration's initial request—and $74.6 billion designated as OCO funding, which is $10 billion more than the Administration's OCO request.

The Senate passed its version of H.R. 2810 on September 18, 2017, by a vote of 89-8, after first replacing the House-passed text of that bill with the text of S. 1519, the version of the FY2018 NDAA that had been reported by the Senate Armed Services Committee. This Senate-passed version of the bill would have authorized $631.9 billion for the base budget—exceeding the base budget request by nearly $37 billion—and $60.0 billion for OCO-designated funding.

In November 2017—after the House and Senate had passed their respective versions of the FY2018 NDAA but before conferees had completed negotiations to produce a compromise version of the bill—the Trump Administration amended its FY2018 DOD budget request, asking for an additional $5.9 billion. The additional funds included $4.0 billion for missile defense-related programs the Administration described as being in response to recent missile tests and other activities by North Korea. The budget amendment also included $674 million to repair two Navy destroyers damaged in collisions and $1.2 billion to support the President's decision to increase by approximately 3,500 the number of U.S. military personnel in and around Afghanistan. The $1.2 billion associated with the Afghanistan troop levels was designated as OCO while the remaining $4.7 billion of the increase was included in the base budget.

The final version of H.R. 2810 authorized $626.4 billion for base budget activities and $65.7 billion for OCO-designated funding. The House agreed to this final version of the bill on November 14, 2017, by a vote of 356-70. The Senate agreed to it on November 16, 2017, by voice vote. President Trump signed the bill into law (P.L. 115-91) on December 12, 2017.

Congressional action on FY2018 defense funding reflected a running debate about the size of the defense budget given the strategic environment and budgetary issues facing the United States. Annual limits (often referred to as caps) on discretionary spending for defense and for nondefense federal activities, set by the Budget Control Act of 2011 (P.L. 112-25), remain in place through FY2021. If the amount appropriated for either category were to exceed the relevant cap, it would trigger near-across-the-board reductions to a level allowed by the cap—a process called sequestration. Appropriations designated by Congress and the President as funding for OCO or for emergencies are exempt from these caps.

For the period during which Congress was considering the FY2018 NDAA, the BCA limit on discretionary defense spending was $549 billion. The caps apply to appropriations, not authorization legislation. However, if Congress had appropriated for national defense programs the amounts requested by the Administration or the amounts authorized by any of the versions of H.R. 2810 passed by House or Senate, those appropriations would have triggered sequestration.

Before Congress enacted any FY2018 appropriations bills, it raised the FY2018 and FY2019 discretionary spending caps on defense and nondefense spending as part of P.L. 115-123, which included the fifth continuing appropriations resolution for FY2018. The revised cap on base budget, discretionary defense appropriations for FY2018 is $629 billion, which would accommodate appropriations to the level authorized by the enacted version of H.R. 2810.

Background

The annual National Defense Authorization Act (NDAA) provides authorization of appropriations for the Department of Defense (DOD), defense-related atomic and elsewhere. The remainder of the request – $64.6 billion – would fund the incremental cost of those ongoing operations, formally designated as Overseas Contingency Operations (OCO).

Congressional action on FY2018 defense funding reflects a running debate about the size of the defense budget given strategic environment and budgetary issues facing the United States. Annual limits on discretionary spending for defense and for non-defense federal activities, set by the Budget Control Act of 2011 (P.L. 112-25), remain in place through FY2021. If the amount appropriated for either category exceeds the relevant cap, it would trigger near-across-the-board reductions to a level allowed by the cap – a process called sequestration. Appropriations designated by Congress and the President as funding for OCO or for emergencies, are exempt from the caps.

For FY2018, the BCA limit on discretionary defense spending is $549 billion. Even apart from the request for $8.1 billion in defense-related discretionary appropriations that is outside the scope of the NDAA, the Administration's base budget defense request would exceed the BCA cap by more than $46 billion, thus triggering sequestration.

The House passed H.R. 2810, the version of the FY2018 NDAA reported by the House Armed Services Committee, on July 14, 2017 by a vote of 344-81. On July 10, the Senate Armed Services Committee reported S. 1519, its version of the FY2018 bill. After substituting the text of S. 1519 for the House-passed text of H.R. 2810, the Senate passed an amended version of the latter bill on September 18 by a vote of 89-8.

In terms of the total amounts they would authorize (counting funds for base budget and OCO) the House and Senate proposals differ by slightly more than $3 billion (less than 0.5%). The House bill's $689.0 billion total would exceed the Administration's request by $29.2 billion (about 4.4%), whereas the Senate proposal would exceed the request by $32.3 billion or about 4.8%. The differences between the two bills reflect, in large part, differences in how the chambers categorize and allocate funding for base budget purposes while minimizing the amount by which base budget spending would exceed the BCA cap. Neither bill would modify the FY2018 BCA limit.

---

Background

The annual National Defense Authorization Act (NDAA) provides authorization of appropriations for the Department of Defense (DOD), defense-related nuclear energy programs of the Department of Energy, and defense-related activities of other federal agencies such as the Federal Bureau of Investigation. In addition to authorizing appropriations, the NDAA establishes defense policies and restrictions, and addresses organizational administrative matters related to DOD.¹ Unlike an appropriations bill, the NDAA does not provide budget authority for government activities.

Congressional action on the FY2018 NDAA reflectsreflected a running debate about the size of the defense budget given the strategic environment and budgetary issues facing the United States. Annual limits on discretionary spending set by the Budget Control Act of 2011 (P.L. 112-25) remain in place through FY2021 and fundamentally shape congressional actions related to all federal spending, including defense funding.²

Constrained by these limits, Congress and the Executive Branchexecutive branch face an increasingly complex and unpredictable international security environment, evidenced by a variety of threats to U.S. security interests including;

• Actionaction around the globe by non-statenonstate, violent extremist organizations – —such as the Islamic State of Iraq and Syria (ISIS) and al QaidaAl Qaeda;
• Russian-backed proxy warfare in Ukraine and continued investments intended to undermine the NATO alliance;
• North Korean provocation evidenced by an "unprecedented" number of missile test launches and its "use of malicious cyber tools" to threaten and destabilize the region;³
• China's expansion of its nuclear enterprise, its investments in power projection and continued island building in the South China Sea; and
• Iran's continued efforts to support international terrorist organizations and establish regional dominance.⁴

The presidential transition following the November 2016 elections affected the timing of congressional consideration of the FY2018 defense budget request. The Trump Administration transmitted its budget request to Congress on May 23, 2017, 98 days after it was required by law.⁵ While incoming administrations have tended to submit their budget request later than the statutory deadlines, such delays compress congressional consideration of the request and may result in delays in committee actions and final passage of the authorization and appropriation bills.

The lack of several key strategy documents may also hinder congressional decision-making related to FY2018 defense funding. The Administration is in the process of updating the National Defense Strategy and is also conducting a Nuclear Posture Review. The Administration only recently completed a revision of U.S. strategy in Afghanistan.⁶ As a result, the Trump Administration's budget request serves as a "placeholder" in many respects while Congress awaits the completion of these and other strategy assessments.⁷

The Budgetary Context

The Budget Control Act of 2011Congress completed action on the FY2018 NDAA before the Trump Administration completed its initial updates of the National Defense Strategy and National Security Strategy. A Nuclear Posture Review also was in progress when the bill was enacted. Thus, to some degree, the Trump Administration's initial FY2018 budget request served as a placeholder while Congress awaited completion of these major strategic assessments.⁵

One exception to that rule is that the Administration's November 2017 amendment to its FY2018 budget request reflected its revision of U.S. strategy in Afghanistan: The additional $5.9 billion requested included $1.2 billion to support the President's decision to deploy in Afghanistan about 3,500 more U.S. personnel than the May 2017 budget request had assumed.⁶ Although the additional funds were requested after the House and Senate each had passed their respective versions of the NDAA, conferees incorporated the requested amounts into the version of the bill that was enacted.

Budgetary Context The Budget Control Act of 2011 (BCA/P.L. 112-25), enacted August 2, 2011, contains several measures intended to reduce the budget deficit by $2.1 trillion over the period FY2012-FY2021. Toward that goal, the legislation established annual limits that would reduce discretionary spending by approximately $1.0 trillion, compared with projected spending over that period.

The BCA established separate limits (commonly referred to as capscaps) on defense and nondefense discretionary budget authority that are enforced by a mechanism called sequestration.⁸7 Sequestration provides for the automatic cancellation of previously enactedappropriated spending to reduce discretionary spending to the limits specified in the BCA. The defense limits applylimit applies to the national defense budget (function 050), but dodoes not restrict amounts provided for "emergencies" or "Overseas Contingency Operations."⁹designated by the President and Congress as funding for emergencies or for Overseas Contingency Operations (OCO).⁸

Taking into account actual and projected defense spending over nearly six decades (1962-2022), OMB projects that defense outlays would increase by a multiple of 12.6 (from $52.6 billion to a projected $662.3 billion). Over the same period, net¹⁰ Figure 1. Federal Outlays by Budget Category

amounts in billions of dollars

Source: OMB Historical Table 8.1.

Over the nearly six decades from 1962 through 2022, OMB projects that defense outlays would increase from $52.6 billion to a projected $662.3 billion. Over the same period, net⁹ mandatory spending is projected to increase at roughly 10 times that rate (from $27.9 billionbillion to $3.16 trillion). (See Figure 1.) to $3.16 trillion). (See Figure 1.)

Figure 1. Federal Outlays by Budget Category amounts in billions of dollars

Source: OMB Historical Table 8.1.

According to OMB data, defense outlays, which accounted for 49.2% of federal spending in 1962, had dropped to 19.4% in 2011 – —the year the BCA was enacted – —and are projected to drop to 13.7% by 2022. On the other hand, net mandatory outlays combined with net interest on the national debt, which accounted for 32.5% of outlays in 1962 and 62.6% in 2011, are projected to account for 76.2% of outlays in 2022. (See Figure 2.)

Similarly, the defense share of the GDP has declinedeclined relatively steadily since 1962, while the share of the GDP consumed by mandatory spending and net interest has risen. (See Figure 3.)

FY2018 Defense Budget Request

Shortly after taking office, President Trump directed Secretary of Defense James Mattis to conduct a "30-day Readiness Review" of "military training, equipment maintenance, munitions, modernization and infrastructure."¹¹ Subsequently, Secretary Mattis issued implementation guidance to DOD that describes a three-phase "campaign" to "build a larger, more capable, and more lethal joint force, driven by a new National Defense Strategy." In the wake of that review, DOD moved out along three axes:

• Submitting a detailed amendment to the Obama Administration's FY2017 budget request – seeking an additional $30 billion to address what it described as "immediate and serious readiness challenges;"¹²
• Developing the FY2018 Budget Request to be "focus[ed] on balancing the program…while continuing to rebuild readiness;" and
• Beginning formulation of the FY2019-FY2023 Defense Program to be shaped by a new National Defense Strategy and provide "an approach to enchanc[e] the lethality of the joint force against high-end competitors and the effectiveness of our military against a broad spectrum of potential threats."¹³

In its presentation of the FY2018 budget request, DOD highlighted several priorities:

• Improving warfighting readiness;
• "Filling holes" in capacity and lethality while preparing for future growth;
• Reforming DOD business practices;
• Keeping faith with servicemembers and their families; and
• Supporting overseas contingency operations.¹⁴

The Trump Administration's FY2018 budget request, released on May 23, 2017, included a total of $677.1 billion for national defense-related activities of the federal government (budget function 050).¹⁵ Of the national defense total, $667.6 billion is discretionary spending to be provided, for the most part, by the annual appropriations bill drafted by the Appropriations Committees of the House and Senate.¹⁶ The remaining $9.6 billion is mandatory spending, that is, spending for entitlement programs and certain other payments. Mandatory spending is generally governed by statutory criteria and it is not provided by annual appropriation acts.¹⁷

As has been typical in recent years, about 95% of the national defense total ($646.9 billion) is for military activities of the DOD—referred to as subfunction 051. The balance of the function 050 request comprises $21.8 billion for defense-related nuclear energy activities of the Department of Energy (designated subfunction 053) and $8.4 billion for defense-related activities of other agencies (designated subfunction 054) of which about two-thirds is allocated to the Federal Bureau of Investigation. See Figure 4.

Figure 4. FY2018 Budget for National Defense (050) (dollars in billions)

Source: OMB Analytical Perspectives (Table 25-1). Notes: Totals may not reconcile due to rounding. OCO is Overseas Contingency Operations.

The term base budget is commonly used to refer to funds intended to pay for activities the DOD and other national defense-related agencies would pursue even if U.S. forces were not engaged in contingency operations in Afghanistan, Iraq, Syria and elsewhere. In principle, the remainder of the DOD budget request funds the expected incremental cost of those ongoing military operations which are formally designated Overseas Contingency Operations (OCO). Appropriations designated for OCO are effectively exempt from the BCA discretionary spending caps.¹⁸

For FY2018, the Administration proposes a total DOD budget of $639.1 billion, of which $574.5 billion comprises the discretionary base budget and $64.6 billion is designated as OCO funding. The $574.5 billion request for DOD is a 10% increase from the FY2017 enacted level (see Table 1).

Comparison of FY2017 Appropriations with FY2018 Request Any comparison of the FY2018 request to FY2017 enacted amounts should be done with consideration that the FY2017 defense appropriations act (Division C of P.L. 115-31) included $14.8 billion in OCO appropriations in Title X–Additional Appropriations. In addition to $2.1 billion for counter-ISIL activities, these OCO-designated amounts included $12.7 billion that, in general, was drawn from the Trump Administration's March 2017 request for $24.7 billion in additional base budget authority for DOD.

Limits on the FY2018 Base Budget Defense Appropriations

The current national defense (budget function 050) discretionary limit (or "cap") set by the BCA is $549 billion for FY2018. The Trump Administration proposes $603 billion for base budget national defense discretionary spending in FY2018—$54 billion more than the BCA limit. In the absence of the appropriate statutory changes to BCA, defense appropriations at the requested level would trigger sequestration.¹⁹

The Trump Administration's FY2018 budget called on Congress to raise the defense discretionary caps for FY2018-FY2021 to accommodate the proposed DOD budget,²⁰ coupled with a recommendation to continue BCA-like limits on discretionary spending through FY2027—six years beyond the expiration of the Budget Control Act (see Table 2).

The Administration's proposed increases in defense spending – which total $463 billion over the period FY2018-FY2027 -- would be more than offset by reductions in non-defense spending that would total $1.5 trillion over the same period. In total, the President's budget proposes a $1 trillion cumulative reduction in federal discretionary spending by establishing such limits.²¹

The Trump Administration's proposed increase in base budget national defense spending—above the current statutory cap for FY2018—falls between two other notable FY2018 budget proposals that also would have exceeded the current BCA defense spending cap: the Obama Administration's projected $584.5 billion budget, and a projected budget of $640.3 billion proposed by Senate Armed Services Committee Chairman John McCain (see Figure 5).²²

Figure 5. Selected Alternative FY2018 National Defense Budget Proposals (amounts in billions of dollars of discretionary budget authority)

Sources: CRS analysis of the Budget Control Act of 2011 (P.L. 112-25), as amended; National Defense Budget Estimates for FY2017 (Green Book); Office of Management and Budget, America First: A Budget Blueprint to Make America Great Again, March 16, 2017; and Senator John McCain, "Restoring American Power," January 16, 2017. Note: The Obama Future Years Defense Program (FYDP) included a placeholder for Overseas Contingency Operations indicating that funding would be needed, but no actual estimates were provided.

FY2018 DOD Military Base Budget Request

The DOD's base budget request for FY2018 was a net of $51.3 billion higher than the amount appropriated in FY2017. (See Table 3.)

FY2018 DOD Overseas Contingency Operations Budget Request

The FY2018 President's budget request includes $64.6 billion for DOD's Overseas Contingency Operations spending. The request reflects a $5.1 billion reduction from the FY2017 request of $69.7 billion. By comparison, defense appropriations for OCO in FY2017 totaled $82.8 billion, of which approximately $18 billion was designated to fund base budget activities.²³

Of the Administration's $64.6 billion request for OCO funding, more than 70% ($45.9 billion) is designated for Operation Freedom's Sentinel (Afghanistan) and overall U.S. Central Command theater posture. The funding requested would maintain 8,448 U.S. military personnel in Afghanistan for train, advise, and assist (TAA) and counterterrorism efforts. Included in this amount is $4.9 billion for the Afghan Security Assistance Fund to continue training and equipping of Afghan security forces, including procurement of aviation assets to support Afghan air force modernization.

The budget request includes $13.0 billion to maintain a force level of 5,765 personnel in Iraq and Syria and support Operation Inherent Resolve. Of the amount requested, $1.8 billion would fund the Counter Islamic State of Iraq and Syria Train and Equip Fund (CTEF)—$1.3 billion for Iraq train and equip (T&E) activities in support of the Iraqi government's security forces and $500 million for Syria T&E in support of forces opposed to the Syrian government that would combat ISIL. The budget also includes $850 million for security cooperation (SC) efforts aimed at building partner capacity, that is, improving the ability of other governments to conduct counterterrorism, perform crisis response and other security activities.²⁴

The OCO request also includes $4.8 billion to enhance U.S. presence in Eastern Europe, often referred to as the European Reassurance Initiative (the ERI). The Administration states that the funding is to provide "near-term flexibility and responsiveness to the evolving concerns of U.S. allies and partners in Europe and helps to increase the capability and readiness of U.S. allies and partners."²⁵ The majority of the requested funding (81%) would enhance U.S. presence in the region, providing $1.7 billion to increase U.S. military personnel presence in Europe and $2.2 billion to increase prepositioned stocks of U.S. military equipment in the region. The request also includes $150 million to "continue train, equip, and advise efforts to build Ukrainian capacity to conduct internal defense operations to defend its sovereignty and territorial integrity."²⁶

Table 5 provides a breakdown of the OCO budget request by title.

Unfunded Priority Lists (UPLs)

Section 1064 of the FY2017 National Defense Authorization Act (NDAA/ P.L. 114-328) added 10 U.S.C. §222a to the U.S. Code, requiring each of the armed forces and combatant commanders to report on unfunded priorities.²⁷ The statute defines an "unfunded priority" as a program, activity, or mission requirement that

• 1. is not funded in the President's budget for the fiscal year under consideration;
• 2. is necessary to fulfill a requirement associated with an operational or contingency plan or other validated requirement; and
• 3. would have been recommended for funding if additional resources were available, or if the requirement had emerged after the budget was formulated.²⁸

The military services submitted their FY2018 unfunded priority lists (UPLs)—totaling $32 billion—to Congress on June 1, 2017. The Army identified $12.7 billion in unfunded priorities, including $2.3 billion in funding for activities the Army associated as "Warfighter Readiness."²⁹ The Army's UPL also identified additional funding needed for munitions ($2.3 billion), increased capacity to grow end-strength ($3.1 billion), weapon systems investments for modernization/improved lethality ($4.9 billion), and military construction ($579 million). Of the $4.9 billion in unfunded weapon systems investments, the Army cited air and missile defense, long-range artillery, and munitions as their top priorities.

The Air Force reports $10.7 billion in unfunded priorities including $504 million in personal protective gear for Airmen (helmets, vests, and ruggedized footwear), night vision devices, communications equipment, and increased funding for training. Also listed are $6.7 billion in "Readiness/Modernization" needs including 14 additional F-35s, three additional KC-46s, funding for an EC-130 avionics update, and additional investments in legacy aircraft modification/modernization programs. The Air Force UPL also cites shortfalls in Nuclear Deterrence Operations ($360 million), Space ($772 million), Cyberspace ($563 million) and Infrastructure ($1.8 billion).

The Navy's unfunded priorities total $5.5 billion. The Navy's report to Congress prioritizes weapons systems purchases with requirements for $740 million for 10 F/A-18's, $1.0 billion for 6 additional P-8A Poseidon Aircraft, $390 million for four V-22 Osprey tilt-rotor aircraft, and $300 million for 5 ship-to-shore vessels and other weapon systems. Aviation logistics funding is at the bottom of the list, with no mention of shortfalls in major ship repair/overhaul or depot maintenance.

Like the Navy, the Marine Corps stated unfunded priorities are heavily weighted toward aviation system procurements. Of the stated $3.1 billion in unfunded priorities, $2.4 billion is associated with aircraft and aviation systems procurement (six additional F-35s, four additional KC-130J mid-air refueling tankers, two additional CH-53K cargo helicopters, two additional MV-22 tilt-rotor aircraft, seven additional AH-1Z attack helicopters, and two C-40A executive transport aircraft). The Marine Corps report also cites $482 million in unfunded "Ground" priorities, including military construction, facilities sustainment, night optics, and training munitions.

FY2018 NDAA

On July 14, 2017, the House passed H.R. 2810, the National Defense Authorization Act for FY2018, by a vote of 344-81. On September 18, 2017, the Senate passed its version of that bill by a vote of 89-8 after having replaced the text of the House bill with an amended version of S. 1519, the version of the bill that had been reported by the Senate Armed Services Committee.

Before passing the NDAA, the Senate modified the committee-reported text, adopting by unanimous consent 154 amendments.³⁰an amendment incorporating text from more than 100 amendments.²¹ Subsequently, the Senate adopted an additional 49 amendments, en bloc, by unanimous consent. In the Senate's only roll call vote onin relation to an amendment to the billNDAA, it voted 61-36 to table (and thus defeatreject) an amendment that would have repealed (six months after enactment of the bill) the joint resolutions on the Authorization of Military Force (AUMF) enacted in 2001 (P.L. 107-40) and in 2002 (P.L. 107-243).²² FY2018 DOD Budget Amendment (November 2017)

In November 2017—after the House and Senate had passed their respective versions of the FY2018 NDAA but before House and Senate conferees had completed work on a compromise version of the bill (H.R. 2810)—the Trump Administration amended its fiscal 2018 budget request, increasing its DOD funding request by a total of $5.87 billion. The requested increase included²³

• $4.01 billion to expand and upgrade missile defense programs intended to counter threats from North Korea;
• $674 million to repair USS John S. McCain and USS Fitzgerald, destroyers equipped for antimissile defense that were damaged in separate collisions in the Western Pacific; and
• $1.18 billion to cover costs associated with the deployment in and around Afghanistan of 3,500 more U.S. troops than had been assumed in the FY2018 budget request.

Conferees on the FY2018 NDAA authorized the additional funds requested by the budget amendment.²⁴

The President and Congress designated as emergency funds the $4.7 billion requested for missile defense and ship repair while designating as OCO the funds requested for an enlarged U.S. presence in Afghanistan. Thus, when Congress appropriated those amounts in the FY2018 omnibus appropriations bill, those amounts were exempt from the BCA defense cap.

FY2018 NDAA Conference Report (H.R. 2810) House and Senate conferees filed a conference report for H.R. 2810 on November 9, 2017. The House agreed to the conference report on November 14, 2017, by a vote of 356-70. The Senate agreed to it on November 16, 2017, by voice vote and the President signed the bill into law (P.L. 115-91) on December 12, 2017. (See Table 2.) Table 2. FY2018 NDAA (H.R. 2810/S. 1519)

amounts in millions of dollars of discretionary budget authority

Title

OriginalFY2018 Request Budget AmendmentNovember 2017

Total Revised Request

Enacted (P.L. 115-91)    

Missile Defense re: North Korea

Repair 2 damaged destroyers

Larger force in Afghanistan

   

Procurement

113,983.7

2,423.2

   

116,406.9

137,311.3

Research, Development, Test and Evaluation

82,716.6

1,346.7

   

84,063.3

86,348.7

Operation and Maintenance

188,570.3

42.5

673.5

 

189,286.3

192,290.0

Military Personnel

141,686.1

     

141,686.1

141,846.4

Revolving Funds and Other auth.

37,849.8

     

37,849.8

37,676.2

Military Const. and Fam. Housing

9,782.5

200.0

   

9,982.5

9,980.7

Subtotal: DOD Base Budget

574.589.0

4,012.4

673.5

 

579,274.8

605,453.3

Atomic Energy Defense Activities

20.477.3

     

20,477.3

20,597.8

Other Non-DOD Activities

210.0

     

210.0

300.0

Subtotal: Base Budget

595,276.3

     

599,962.1

626,351.1

OCO

64,573.0

   

1,184.1

65,757.1

65,748.3

Grand Total: Base + OCO

659,849.3

4,012.4

673.5

1,184.1

665,719.2

692,099.4

Sources: Original request is taken from H.Rept. 115-200, Report of the House Armed Services Committee on H.R. 2810, the FY2018 NDAA, July 6, 2017. Data on the November 6, 2017, budget amendment are taken from Office of Management and Budget, "Estimate #3, FY2018 Budget Amendments: Department of Defense to support urgent missile defeat and defense enhancements to counter the threat from North Korea, repair damage to U.S. Navy ships, and support the Administration's south Asia strategy," November 6, 2017, accessed at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/DOD_budgetamendment_package_nov2017.pdf. Total revised request is taken from H.Rept. 115-404, conference report on H.R. 2810, the FY2018 NDAA.

Note: Conferees on the FY2018 NDAA did not consider a separate budget amendment, also submitted in November 2017, that requested $1.16 billion for repair of DOD facilities damaged by Hurricanes Harvey, Irma, and Maria.

Limited Information

The original, House-passed version of the FY2018 NDAA would have authorized a total of about $689.0 billion, exceeding the Administration's initial budget request by about $29.2 billion (4.4%). The original Senate-passed version of the bill would have exceeded the initial request by about $32.3 billion or 4.8%.

The conference report on H.R. 2810 does not present the authorization levels in the original House and Senate versions in comprehensive detail, and the number and complexity of floor amendments adopted by each chamber render it infeasible to extract that information from the data available.

Selected Budget and Policy Issues in H.R. 2810 Intermediate-Range Nuclear Forces Treaty²⁵ The United States and Soviet Union signed the Intermediate-Range Nuclear Forces (INF) Treaty in 1987. In agreeing to the INF Treaty, the United States and Soviet Union agreed that they would ban all land-based ballistic and cruise missiles with ranges between 500 and 5,500 kilometers. The ban applies to missiles with nuclear or conventional warheads, but not to sea-based or air-launched missiles. Since 2014, the U.S. State Department has raised concerns about the Russian Federation violating the INF) an amendment that would have repealed (six months after enactment of the bill) the joint resolutions on the Authorization of Military Force (AUMF) enacted in 2001 (P.L. 107-40) and in 2002 (P.L. 107-243).

Authorization of the Use of Military Force (AUMF) For additional background and analysis of AUMF, see the following: CRS In Focus IF10539, Defense Primer: Legal Authorities for the Use of Military Forces, by [author name scrubbed]; CRS Report R43983, 2001 Authorization for Use of Military Force: Issues Concerning Its Continued Application, by [author name scrubbed]; and CRS Report R43760, A New Authorization for Use of Military Force Against the Islamic State: Issues and Current Proposals, by [author name scrubbed].

Of the $667.6 billion in national defense discretionary funding requested by the President for FY2018, $659.8 billion falls within the jurisdiction of the House and Senate Armed Services Committees and is subject to authorization by the annual National Defense Authorization Act (see Table 6).

Budgetary Overview

In terms of the total amount authorized, the House bill and the Senate bill differed by slightly more than $3 billion (less than 0.5%). The House bill's $689.0 billion total would exceed the Administration's request by $29.2 billion (about 4.4%), whereas the Senate proposal would exceed the request by $32.3 billion or about 4.8% (see Table 6).

Despite recommending base budget authorization totals that would exceed the BCA spending limit of $549 billion by upwards of 10%, neither the House bill nor the Senate bill includes a provision that would repeal or modify the BCA limit for FY2018 in current law.³¹

The total amounts recommended for authorization by the House and Senate bills differ by less than $3.2 billion―about 0.45% of the amount they would authorize. Behind those similar totals, however, the two bills differ more strikingly in how they would allocate funds between the base budget and OCO:

• The House bill would authorize $593.4 billion for base budget purposes―an increase of $18.8 billion over the budget request―whereas the Senate bill would authorize $36.3 billion more than the request ($610.9 billion).
• The Senate bill would authorize a total of $60.2 billion designated as OCO funding ($4.4 billion less than the Administration's request), whereas the House bill would authorize $74.6 billion designated as OCO―$10.0 billion more than the Administration requested.

The Administration's base budget request would exceed the BCA defense spending cap. Thus, appropriations provided at that level would trigger sequestration absent a change in the law. The differences between the House and Senate versions of the FY2018 NDAA reflect, in large part, differences in how the chambers would categorize and allocate additional funding for base budget purposes without increasing the amount by which base budget spending would exceed the BCA cap. As a result, comparisons of the amounts that would be authorized by the Administration request and the two versions of the NDAA are complicated by two factors:

OCO-for-Base Authorizations

In addition to authorizing $593.4 billion that was requested by the Administration as base budget funding, the House bill would authorize an additional $10.0 billion that would be designated as OCO funding―and, thus, would be exempt from the BCA cap―but would be spent for base budget purposes. The majority of this OCO-for-base funding would increase procurement amounts by an additional $6.0 billion, all of which would be authorized for shipbuilding activities. In contrast, the Senate bill would not authorize OCO-designated funds for base budget purposes.³²

European Defense Initiative Authorizations

Comparison of the base budget authorizations in the House and Senate bills with the Administration's base budget request is also complicated by the bills' handling of the $4.8 billion requested for the European Deterrence Initiative (EDI)―an array of investments, deployments, and security assistance grants intended to reassure U.S. allies threatened by Russian military and political maneuvers.³³ The Administration included its EDI funding request in the OCO budget, but the House and Senate NDAAs would authorize it largely as part of the base budget.

Comparison of Base Budget Authorizations

The House authorization of OCO-for-base funding, and both committees' rejection of the President's request to designate as OCO most EDI funding complicate comparison of the base budget amounts authorized by the two versions of the bill. One way to compare the Administration's base budget request (Table 7, column "a") with the amounts the House and Senate bills would authorize for that request would be to adjust the base budget authorization totals in the House and Senate bills to eliminate the following realignments in funding:

• For the House bill add to the base budget (Table 7, column "b") the bill's "OCO for base" authorizations (Table 7, column "c") and deduct the EDI funds (Table 7, column "d") to get a comparable adjusted base budget total (Table 7, column "e").
• For the Senate amendment deduct from the base budget (Table 7, column "f") the EDI funds (Table 7, column "g") to get a comparable adjusted base budget total (Table 7, column "h").

Viewed in that light, the two versions of the NDAAs do not differ dramatically in the amounts they would authorize for the major components of the Administration's base budget. The Senate amendment would authorize a net total of $8.0 billion more than the House measure, with procurement funds accounting for the largest share of the difference.

Comparison of OCO Authorizations

Similarly, for a comparison of the OCO funding levels in the budget request and the OCO authorizations proposed by the two versions of the NDAA, one could, in each case, deduct the EDI-related funding (see Table 8).

Comparison of EDI Authorizations

For the most part, the House and Senate bills would support the Administration's EDI request, although they propose to authorize most of the funds as part of the base budget, rather than as OCO funding, as the Administration proposed. The House bill includes a provision (§1275) that would require the Secretary of Defense to submit to the Senate and House Armed Services and Appropriations Committees a plan for the U.S. military role in Europe and for EDI funding through FY2022. The provision also would halt the divestiture of U.S. military sites in Europe, pending receipt of that report.

Both proposals would designate some EDI funding as OCO:

• the House bill would authorize as OCO funding $195 million of the $307 million requested for EDI-related military construction; and
• the Senate bill would authorize funding for security assistance to Ukraine in the OCO budget and would add $350 million to the $150 million requested for such activities (see Table 9).

Selected Defense Budget and Policy Issues in H.R. 2810

Intermediate-Range Nuclear Forces Treaty³⁴

The United States and Soviet Union signed the Intermediate-Range Nuclear Forces (INF) Treaty in 1987. In agreeing to the INF Treaty, the United States and Soviet Union agreed that they would ban all land-based ballistic and cruise missiles with ranges between 500 and 5,500 kilometers. The ban would apply to missiles with nuclear or conventional warheads, but would not apply to sea-based or air-delivered missiles. The U.S. State Department has consistently raised concerns about the Russian Federation violating the INF Treaty since 2014. In testimony before the House Armed Services Committee on March 8, 2017, General Paul Selva, the Vice Chairman of the Joint Chiefs of Staff, confirmed press reports that Russia had begun to deploy a new ground-launched cruise missile, in violation of the INF Treaty.³⁵

The House bill includes a series of provisions (§. In testimony before the House Armed Services Committee on March 8, 2017, General Paul Selva, the Vice Chairman of the Joint Chiefs of Staff, confirmed press reports that Russia had begun to deploy a new ground-launched cruise missile, in violation of the INF Treaty. The House bill included a series of provisions (§§1241-1248) aimed at compliance enforcement regarding Russian violations of the INF Treaty and other related matters. The Senate bill (§1635) would establishhave established a policy of the U.S.United States regarding actions necessary to bring the Russian Federation back into compliance with the INF Treaty. Both would mandatehave mandated that the Pentagon establish a program of record for the development of a U.S. land-based missile of INF range which, if carried out, would violate the treaty.

The final version of the bill retains the language that requires the Secretary of Defense to "establish a program of record to develop a conventional road-mobile ground-launched cruise missile system with a range of between 500 to 5,500 kilometers" and authorizes $58 million in funding for the development of active defenses to counter INF-range ground-launched missile systems; counterforce capabilities to prevent attacks from these missiles; and countervailing strike capabilities to enhance the capabilities of the United States.

Deterring Russian Aggression³⁶

BothCountering Russia²⁶ Like the House and Senate bills includeversions of the bill, the final version of the NDAA includes several policy provisions aimed at deterring Russian aggression and responding to Russian influence operations. Both bills would express support for continued funding for the European Deterrence Initiative at levels similar to the President's budget request. The House bill would further state that it is U.S. policy "to develop, implement, and sustain credible deterrence against aggression" by the Russian government (§1233). The House bill would also require the Secretary of Defense, mostly in coordination with the Secretary of State, to develop and submit strategies, plans, or reports aimed at countering Russian threats and military capabilities, among other objectives (see §1251-1259, §1656). The Senate bill would require the Secretary of Defense to include an assessment of Russian hybrid warfare in an annual report on Russian military and security developments. Both chambers would also require reports on Russian cyberattacks against the Department of Defense (House bill, §1059) or influence operations against members of the Armed Forces (Senate amendment, §1247).³⁷

Both bills would also provide an extension of authorities to provide security assistance – including defensive lethal assistance and intelligence support – to Ukraine (House bill, §1234; Senate amendment, §1243). The Senate bill (§1250) would expand the underlying authorities to include medical treatment of wounded Ukrainian soldiers in certain conditions.

The House bill would express support for U.S. allies and partners Estonia, Latvia, Lithuania, and Georgia (§1237-1238). The Senate amendment would extend authorities for the training of Eastern European national security forces in multilateral exercises and authorize the Secretary of Defense to provide joint security assistance to Estonia, Latvia, and Lithuania to strengthen their resiliency and deterrence against Russian aggression (§1244-1245).

In addition, both chambers would extend existing prohibitions on funding for military-to-military cooperation with Russia and for implementing any activity that would recognize Russian sovereignty over Crimea (House bill, §1231-1232; Senate bill, §1241-1242). The House bill also included three provisions that would restrict contracting with Russian entities:

• §1612 - Restrictions against contracts for satellite services using satellites or launch vehicles designed or manufactured in Russia, or by an entity controlled by the Russian government, except for launches in the United States with engines designed, manufactured in, or provided by entities of Russia.
• §1664 - Restrictions against contracts to procure or obtain telecommunications equipment, systems, or services from Russian government-controlled entities to carry out DOD nuclear deterrence and homeland defense missions.
• §3117 - Restrictions against contracts or assistance agreements with Russia for atomic energy defense activitiescountering Russian aggression and malign influence in Europe and expressing support for the European Deterrence Initiative (EDI). For example, in the enacted version of H.R. 2810
• Section 1273 requires a five-year plan of activities and resources for EDI that would be generally similar to the plan that would have been required by Section 1275 of the House version of the bill;
• Section 1205 extends existing authorities for the training of Eastern European national security forces in multilateral exercises, as would Sections 6209 and 6210 of the Senate version of the bill;
• Section 1279D authorizes the Secretary of Defense to provide joint security assistance to Estonia, Latvia, and Lithuania to improve their interoperability and build capacity to deter aggression, while Sections 1237 and 1238 of the House bill would have expressed support for those three countries and Georgia.
• Section 1234 extends current authorities to provide security assistance—including defensive lethal assistance and intelligence support—to Ukraine, as would the House bill (§1234) and the Senate bill (§6208);
• Section 1234 also expands authorities to provide medical treatment to wounded Ukrainian soldiers and additional forms of military assistance, as would the Senate bill (§6215);
• Sections 1231 and 1232 extend existing prohibitions on funding for military-to-military cooperation with Russia and on activities that would recognize Russian sovereignty over Crimea, echoing language in the House bill (§1231) and the Senate bill (§§1241 and 1242); and
Section 3122 extends existing prohibitions against contracts with or assistance to Russia for atomic energy defense activities, as would Section 3117 of the House bill.

North Korean Threats

²⁷

Both the House and Senate bills both includeincluded sense of Congress provisions related to the importance of the U.S. alliance with the Republic of Korea and threats to U.S. interests and national security posed by North Korea (see §§1264, §1266, and §1270B of the House bill and §1268-§§1268 and 1269 of the Senate bill). The House bill also would have requiredwould also require the President to provide a report to Congress on cooperation between the Government of Iran and the Democratic People's Republic of Korea on nuclear weapons programs, ballistic missile development, chemical and biological weapons development, and conventional weapons (§1288). The House bill also would have required an assessment and report related to the defense of Hawaii from a North Korea ballistic missile attack (§1685). The enacted version of the bill includes sense of Congress provisions related to the importance of the U.S. alliances with the Republic of Korea and Japan, the need to strengthen deterrence capabilities in the face of North Korean aggression, and the need to encourage further defense cooperation among the allies (see §§1254 and 1255). It also requires that the President submit a strategy on North Korea, including addressing the DPRK's nuclear weapons programs, ballistic missile development, chemical and biological weapons development, and conventional weapons (§1256). Section 1257 of the conference report requires a briefing by the Secretary of Defense to the armed services committees on the "hazards or risks posed directly or indirectly by the nuclear ambitions of North Korea" including a plan to deter and defend against such threats. The NDAA conference report also adds a requirement that the annual report on the Military Power of Iran also include an assessment of military-to-military cooperation between Iran and North Korea (§1225). The conference report also requires an assessment and report related to the defense of Hawaii from a North Korea ballistic missile attack (§1680 requires an assessment and report related to the defense of Hawaii from a North Korea ballistic missile attack (§1685).

Prohibitions on Transfer or Release of Detainees

²⁸

BothThe final version of H.R. 2810—like the versions passed by the House and Senate bills include—included provisions that would extend until December 31, 2018, previously enacted provisions prohibiting or restricting the transfer or release of detainees at Guantanamo Bay, Cuba. Both include provisions that would extend the prohibition onIn the final billSection 1033 prohibits the use of any funds available to DOD to transfer or release Guantanamo Bay detainees to the United States, its territories, or possessions;

Section 1034 prohibits the use of funds to construct or modify any facility in the United States to house detainees transferred from Guantanamo Bay;

Section 1035 extends the current prohibition on the use of any funds or possessions. However, the Senate bill includes a provision (§1035) that would allow for the temporary transfer of a detainee to the United States for necessary medical treatment that is not available at Guantanamo. Both chambers would also extend prohibitions on the use of any funds available to DOD to transfer or release detainees to Libya, Somalia, Syria, or Yemen. See §1022-1024 of the House bill and §1031-1035 of the Senate bill for the related provisions.

Additional Information on Detainee-related Issues For additional background and information see CRS Report R42143, Wartime Detention Provisions in Recent Defense Authorization Legislation, by [author name scrubbed] and [author name scrubbed]; CRS Legal Sidebar WSLG1501, DOD Releases Plan to Close GTMO, by [author name scrubbed]; and CRS Report R41156, Judicial Activity Concerning Enemy Combatant Detainees: Major Court Rulings, by [author name scrubbed] and [author name scrubbed].

Selected DOD Cyber Matters

Both the House and Senate bills includeto transfer or release detainees to Libya, Somalia, Syria, or Yemen; and

Section 1036 prohibits the use of funds to close or relinquish U.S. control of the Guantanamo Bay base.

The Senate bill included a provision (§1035) that would have allowed the temporary transfer of a detainee to the United States for necessary medical treatment not available at Guantanamo Bay. That provision was not included in the final bill.

Selected DOD Cyber Matters²⁹ Both the House and Senate versions of the NDAA included several provisions related to DOD-focused cybersecurity and cyberspace issues. Among such provisions in the House bill are the following:

• Section 1651 would require which were incorporated into the final version of the bill, with modifications. House-Originated Provisions

  In the version of H.R. 2810 originally passed by the House:

  Section 1651 would have required the Secretary of Defense to "promptly submit in writing [to Congress] notice of any sensitive military cyber operation and notice of the results of the review of any cyber capability that is intended for use as a weapon;"
• Section 1654 would require." In the final version of the bill, Section 1631 modifies the House provision to require that the legal reviews of cyber capabilities intended for a weapon be submitted on a quarterly basis in aggregate form. Section 1654 would have required the Secretary of Defense to develop plans to increase regional cyber planning and enhance information operations to counter information operations and propaganda by China and North Korea;
. A slightly modified version of that requirement is included in Section 1641 of the final version of the NDAA.
• Section 1655 would requirehave required a report on the progress of the review of the possible termination of the dual-hat arrangement of the commander of U.S. Cyber Command.

The House Armed Services Committee report on H.R. 2810 also expresses concerns over cyber vulnerabilities, cyber workforce management (training and recruiting), cybersecurity risks of third-party providers (contractors), and the effectiveness of DOD's reporting of cybersecurity incidents.

Senate Provisions

Subtitle C of Title XVI of the Senate bill also includes several provisions related to DOD cybersecurity matters, including the following:

• Section 1621 would establish, as a policy of the United States, that the U.S., who also serves as Director of the National Security Agency. This review had been mandated by the FY2017 NDAA (P.L. 114-328). The corresponding provision in the final version of the bill (§1648) requires that this report be informed using data from the Director of Cost Assessment and Program Evaluation, in consultation with the USCYBERCOM commander and Director of NSA.Senate-Originated Provisions

  In the version of the FY2018 NDAA originally passed by the Senate:

  Section 1621 would have established, as a policy of the United States, that the United States should "employ all instruments of national power, including the use of offensive cyber capabilities, to deter if possible, and respond when necessary, to any and all cyberattacks or other malicious cyber activities that target United States interests...."
• Section 1622 would requireIn the final version, this was replaced by Section 1633, which requires the President to develop a national policy for the United States relating to cyberspace, cybersecurity, and cyberwarfare. Section 1622 of the original Senate bill would have required the Secretary of Defense, in consultation with the Director of National Intelligence, the Attorney General, the Secretary of the Department of Homeland Security, and the Secretary of State, to complete a cyber posture review not later than March 1, 2018.
• Section 1625 would establish a Strategic Cybersecurity Program to conduct continual "red-teaming" reviews of weapon systems, offensive cyber systems, and critical infrastructure of DOD.
• Section 1663 would require an update on the federal cyber scholarship-for-service program which awards graduate and undergraduate scholarships to students in cyber-security-related programs in return for which recipients agree to work in cybersecurity after graduation for a federal agency or other designated entity for a period equal to the length of the scholarship.
• Section 6608 would require a GAO report on any critical telecommunications equipment manufactured by or incorporating information manufactured by a foreign supplier that is closely linked to a leading cyber threat actor.
• Section 6211 would modify the. In the final version of the bill, Section 1644 expanded the scope of the required study to include a review of the role of cyber operations in combatant commander operational planning; a review of the relevant laws, policies, and authorities; and a review of the various approaches to cyber deterrence.
• Section 1625 would have established a Strategic Cybersecurity Program to conduct continual "red-teaming" reviews of weapon systems, offensive cyber systems, and critical infrastructure of DOD. This provision was supplanted in the final bill by Section 1640, which calls on the Secretary of Defense, in consultation with the Director of the National Security Agency, to submit to the congressional defense committees a plan for carrying out the activities described in the Senate provision.
Section 6211 of the Senate bill would have modified an existing requirement for an annual report on Russian military developments to include Russia's information warfare strategies and capabilities. In the final version of the bill Section 6212 requiresSection 6212 would require a separate annual report on Russian efforts to provide propaganda topropagandize members of the U.S. armed forces.Armed Forces.
• Section 1042 would establishof the Senate bill would have established a task force to integrate DOD organizations responsible for information operations, military deception, public affairs, electronic warfare, and cyber operations.
• Section 902 would delineate the responsibilities of DOD's Chief Information Warfare Officer.
• Section 1630C would require a report on the applications of Blockchain technology and any efforts by foreign powers, extremist organizations or criminals to utilize these technologies.

Two amendments adopted during Senate floor consideration of the NDAA aim to address shortages in the cyber workforce:

• Section 515 would require DOD to prepare a plan to meet the demand for cyberspace career fields in the reserve components.
• Sections 1661-1664 would expand scholarship programs focused on cybersecurity.

Selected Government-Wide Information Technology Matters

The Senate bill incorporated In the final bill, Section 1042 requires the Secretary of Defense to establish processes and procedures to integrate strategic information operations and cyberenabled information operations across the responsible organizations. It also requires that a senior DOD official implement and oversee such arrangements.

Section 902 of the Senate bill would have delineated the responsibilities of DOD's Chief Information Warfare Officer. In the final version, Section 909 requires that this official be appointed by the President subject to Senate confirmation.

A provision of the original Senate-passed version retained in the final version as Section 1649B requires an update on the federal cyber scholarship-for-service program. This program awards graduate and undergraduate scholarships to students in cyber-security-related programs in return for which recipients agree to work in cybersecurity for a federal agency or other designated entity after graduation for a period equal to the length of the scholarship.

A provision in the original Senate-passed provision (§6608) that was not included in the final version of the bill would have required a Government Accountability Office (GAO) report on any critical telecommunications equipment manufactured by or incorporating information manufactured by a foreign supplier that is closely linked to a leading cyber threat actor.

Selected Government-Wide Information Technology Matters³⁰ The Senate incorporated into its version of the NDAA the text of two previously introduced bills dealing with government-wide cybersecurity and information technology matters.

OPEN Government Act

Section 6012, of the Senate bill incorporated the "Open, Public, Electronic, and Necessary Government Data Act" or (OPEN Government Act), previously had been introduced as S. 760. It would require federal government agencies to catalog and publish their data in formats that are machine usable and to provide a license for open use of thatthose data. This provision mirrorsmirrored recommendations made in the Report of the Commission on Evidence-Based Policymaking, created by P.L. 114-140.³⁸

31

The final version of the NDAA did not include this provision.

MGT Act

Section 1091-1094Sections 1091-1094 of the Senate version, comprising the "Modernizing Government Technology Act of 2017," or MGT Act, previously had been introduced as S. 990 and was passed by the House on May 17, 2017 as H.R. 2227. These sections wouldwere incorporated into the final version of the NDAA as Sections 1076-1078. These sections authorize the creation of working capital funds in individual agencies, and a central fund managed by GSAthe General Services Administration (GSA) to improve or replace legacy government information technology. The savings realized through modernizing the technology wouldare to be used to replenish the fund for future use.

Prohibition on the Use of Software Platforms Developed by Kaspersky Lab

The Senate also adopted an amendment (comprising Sections 11602 and 11603) that would prohibitThis legislation had been introduced as S. 990 and had been passed by the House on May 17, 2017, as H.R. 2227. Software Security Issues

The final version of the NDAA included, in modified form, two other Senate-passed provisions dealing with software security threats:

Section 1634 of the final bill prohibits the use by any federal agency of software products developed by Kaspersky Lab, a Russian firm selling anti-virusantivirus software. The Department of Homeland Security has banned the use of Kaspersky products by federal agencies because of allegations that the company is associated with Russian espionage efforts. The provision also requires a report on procedures that are to be followed to remove suspect software from federal IT systems. A similar ban on Kaspersky products had been included in the Senate bill as Section 11603.

Section 1646 of the final bill requires a DOD report to the appropriate congressional committees on the potential offensive and defensive applications of blockchain technology and on any efforts by foreign powers, extremist organizations, or criminals to utilize those technologies. The Senate version had included a similar provision as Section 1630.

Military Personnel Matters³² Russian espionage efforts.

As reported by the Senate Armed Services Committee, the prohibition on the use of Kaspersky products would have applied only to DOD.

Military Personnel Matters³⁹

Continuing the basic thrust of a congressional initiative in the FY2017 NDAA, the Administration's FY2018 budget request would sustain the currently authorized end-strength of the active-duty components of the Army and Marine Corps.⁴⁰ Active duty end strengths of those two services33 The two services' end-strengths increased gradually in the years after 2001, but those increases accelerated between 2006 and 2010 in response to the tempo of operations in Iraq and Afghanistan. The active duty end-strengths of the two services peaked in 2011,Army and Marine Corps peaked in 2010 and 2009, respectively, with the Army at slightly more than 566,000 and the Marine Corps at slightly less than 203,000. (See Figure 65.)

Figure 65. Active-duty End-Strength, 2001-2017 2018

Sources: : Defense Manpower Data Center and FY2017FY2018 NDAA NDAA (P.L. 114-328). NoteNotes: This table includes actual end-strengths for FY2001 through FY2016FY2017 and authorized end-strength for FY2017FY2018.

Beginning with the budget for 2012, the Obama Administration proposed—and Congress generally approved—a drawdown in the two services, with the Army heading for aAdministration ultimately proposing an end-strength goal of 450,000 and the Marines toward a goal of 182,100.⁴¹ The FY2017 NDAAfor the Army and 182,000 for the Marines.³⁴ In the FY2017 NDAA, Congress changed that trajectory, rejecting proposals by the Obama Administration to continue the Army and Marine Corps reductions. Instead, that bill increased the Army's authorized end-strength to 476,000—an increase of 16,000 over the budget request—and increased the Marine Corps end-strength to 185,000, an increase of 3,000 over the request.

The FY2018 budget request would continue those limits for the Army and Marine Corps and would slightly increase the limits for the Navy and Air Force, increasing each service by 4,000 to a total of 327,900 for the Navy and 325,100 for the Air Force.

All told, theproposed maintaining those end-strengths for the Army and Marine Corps, while increasing the Navy to 327,900 (+4,000) and the Air Force to 325,100 (+4,100). The FY2018 request would increase the active-duty end-strength of the armed forcesArmed Forces to 1,314,000, an increase of 6,0008,100 over the FY2017 end-strength cap. By one widely- used rule-of-thumb, the annual pay and benefits for each additional active-duty servicemember cost about $100,000. On that assumption, the requested end-strength increase would cost about $600.0810 million, annually.

The House and Senate bills each would authorize a larger number of Army personnel (active and reserve) than was requested and the Senate bill also would authorize a larger than requested Marine Corps. Table 10 annually. The enacted version of the FY2018 NDAA authorized a larger number of personnel than requested for the Army (active and reserve) and the Marine Corps. Table 3 summarizes the end-strength authorizations proposed by the Administration and the levels that would be, the end-strengths authorized in the House and Senate NDAAs, and the end-strengths enacted into law by the FY2018 NDAA (P.L. 115-91).

Military Pay Raise

The FY2018 budget request proposes a 2.1% increase in basic pay for military personnel instead of the 2.4% increase that would occur automatically. Title 37 of United States Code provides a permanent formula for an automatic annual increase in basic pay that is indexed to the annual increase in the Employment Cost Index (ECI) for "wages and salaries" of private industry workers.⁴²

In most years from 2001 through 2010, increases in basic pay were above ECI. From 2011 through 2014, raises were equal to ECI as per the statutory formula. From 2014 through 2016, the rate of military pay raises slowed as the President invoked his authority to set an alternative pay adjustment below the ECI, and Congress did not act to overturn those decisions. In 2017 the President proposed a pay raise that was lower than the ECI, but Congress included a provision in the FY2017 NDAA a provision that set the pay raise at the ECI rate. The FY2018 budget would increase basic pay by 2.1%—the same rate as in FY2017—rather than 2.4% reflecting the ECI. The lower pay raise is estimated to save $200.0 million in FY2018 (see Figure 7proposed increasing basic pay by 2.1% rather than the statutory formula of 2.4%, but in the FY2018 NDAA Congress required that the 2.4% statutory formula go into effect (see Figure 6).

Figure 76. Increases in Basic Pay, 2001-2018

Sources: Bureau of Labor Statistics, Employment Cost Index; National Defense Authorization Acts for FY2001-FY2018. Note: This table does not include other pay increases that were enacted through basic pay table reforms. only includes increases in basic pay applicable to all servicemembers; it does not include increases in basic pay for specified paygrades that were included in a series of "pay table reform" measures in 2000-2004, and 2007.

Military Sexual Assault and Sexual Harassment

Over the past decade, the issues of sexual assault and sexual harassment in the military have generated a good deal of congressional and media attention. In 2005, DOD issued its first department-wide sexual assault policies and procedures.⁴³36 Between 2012 and 2017, DOD took a number of steps to implement its own strategic initiatives as well as dozens of congressionally mandated actions related to sexual assault prevention and response, victim services, reporting and accountability, and military justice.⁴⁴ House and Senate bills both include a number of provisions aimed at further improvements in these areas, including provisions to prohibit wrongful broadcast or distribution of intimate visual images (see §523 in the House bill and §532 in the Senate amendment).

37

House and Senate versions of the NDAA as well as the final version included a number of provisions aimed at expanding or clarifying existing requirements in these areas. One new departure in this area was Section 533 of the final bill (corresponding to Section 523 in the House bill and Section 532 in the Senate bill) amending the Uniform Code of Military Justice (UCMJ) to criminalize wrongful broadcast or distribution of intimate visual images.

Strategic Nuclear Forces⁴⁵

38

The Trump Administration has initiated a new review of the U.S. nuclear force posture and hasin 2017 but also pledged to continue most, if not all, previously planned nuclear modernization programs. Hence, the FY2018 budget request would sustain the currentsustained the previous Administration's plan to modernize each leg of the triad of long-range, nuclear-armed weapons over the course of the next decade.⁴⁶

39

See Table 114 for information on the FY2018 budget request and authorization actions for selected strategic offense and long-range strike systems.

B-21 Long-Range Strike Bomber⁴⁷

40

The budget includes $2.00 billion to continue development of the B-21 long-range bomber, which the Air Force describes as one of its top three acquisition priorities. Acquisition of the plane is slated to begin in 2023. The new bomber—like thosethe B-2s and B-52s currently in U.S. service—could carry conventional as well as nuclear weapons.⁴⁸ For the latter role, the budget includes $451.3 million to continue development of the Long Range Standoff Weapon (LRSO), a cruise missile that would replace the 1980s-vintage Air-Launched Cruise Missile (ALCM) currently carried by U.S. bombers. Both theThe House bill and, the Senate amendment would, and the final version of the bill all support the President's budget request for the B-21.

Columbia class Ballistic-missile Submarine⁴⁹

bomber and the LRSO. Columbia-Class Ballistic Missile Submarine⁴¹

The Columbia -class program, previously known as the Ohio replacement program (ORP) or SSBN(X) program, is a program to design and build a new class of 12 ballistic missile submarines (SSBNs) to replace the Navy's current force of 14 Ohio-class SSBNs. The Navy has identified the Columbia -class program as the Navy'sits top priority program. The Navy wants to procure the first Columbia-class boat in FY2021. The Navy's proposed FY2018 budget requestsrequested $842.9 million in advance procurement (AP) funding and $1,041.7 million.04 billion in research and development funding for the program. The budget also includes $1.3 billion to continue refurbishing the Trident II (or D-5) missiles that arm the submarines. Both the House bill and the Senate amendment wouldThe House bill, the Senate amendment, and the final version of the bill all support the President's budget request for the Columbia -class program and refurbishment of the Trident II missiles.

Land-based Ballistic Missiles⁵⁰

42

Also requested is $215.7 billion216 million to continue developing a new, land-based intercontinental ballistic missile (ICBM), known as the Ground-Based Strategic Deterrent (GBSD), that in 2029 would begin replacing the Minuteman III missiles currently in service. In general, the funding requests for modernization of the nuclear weapons force continue the established scope and pace of activity. However, those plans could change as a result of the Administration's Nuclear Posture Review, currently underway. Both the House bill and the Senate amendment would support the President's budget request for the Columbia class program.

Ballistic Missile Defense Programs⁵¹

43

The United States has been developing and deploying ballistic missile defenses (BMD) to defend against enemy missiles since the late 1940s. In 1983, President Reagan announced an enhanced effort for BMD. Since the start of the Reagan initiative in 1985, BMD has been a key national security interest in Congress. It, which has appropriated overmore than $200 billion for a broad range of research and development programs and deployment of BMD systems.

See Table 12 for information on the FY2018 budget request and authorization actions for selected ballistic missile defense systems.

U.S. Homeland Missile Defense

The United States has deployed a global array of networked ground-, sea-, and space-based sensors for target detection and tracking, an extensive number of ground- and sea-based hit-to-kill (direct impact) and blast fragmentation warhead interceptors, and a global network of command, control, and battle management capabilities to link those sensors with those interceptors. The FY2018 budget request includes

The Trump Administration's initial FY2018 budget request included a total of $9.2 billion for defense against ballistic missiles, of which $7.9 billion would be allocated to the Missile Defense Agency (MDA), more. More than three-quarters of whichthat total is for research and development.

A total $904.9 billion is The budget amendment sent to Congress in November added a total of $4.0 billion to the missile defense request, three-quarters of which was for MDA. The supplemental request also added $905.0 million to the Army's request for Patriot and PAC-3 antimissile interceptors. See Table 5 for information on the FY2018 budget request and authorization actions for selected ballistic missile defense systems. U.S. Homeland Missile Defense In the Administration's May budget submission, a total of $905 million was requested for the Ground-Based Mid-course Defense System (GMD) which, at the time the FY2018 budget was submitted, was projected to include 44 interceptor missiles deployed in Alaska and California by the end of 2017. These interceptors, the last of which was deployed in November 2017, are intended to destroy long-rangeintercontinental ballistic missiles (ICBMs) with ranges in excess of 5,500 kilometers launched toward U.S. territory from countries such as North Korea and Iran. An additional $823.2 million is requested The original FY2018 budget request also included $823 million to develop improvements to the GMD system, including an upgraded interceptor missile and improved radar to be deployed in the mid-2020s. Both the House bill and theand Senate amendmentbills would providehave authorized additional funding to expand the GMD effort and accelerate planned improvements. However, before conferees completed work on the final version of the NDAA, the Administration's November budget amendment boosted the total amounts requested to $1.5 billion for the current GMD system and $904 million for planned improvements. The final version of the NDAA authorized both increased amounts, in toto. The increased funding for the current homeland defense system includes $200 million to construct a third interceptor launch site at Fort Greely, Alaska, and $268 million for 20 interceptors to be deployed there. The House bill (§1699F) and the Senate bill (§1653) each would have required additional funding for GMD efforts.

The House bill includes a provision (§1681) that would require that acquisition and budgeting for missile defense programs be transferred from the Missile Defense Agency to the military service departments in time for presentation of the FY2020 DOD budget request.

The Senate bill includes a provision (§1653) that requires DOD to develop a plan to significantly increase the number of deployed GMD interceptors. The final version of the bill (§1686) authorizes the Secretary of Defense to deploy 20 additional interceptors in Alaska and also authorizes MDA to develop detailed options for increasing to 104 the total number of interceptors deployed. This is one of the more substantial changes to the U.S. BMD System since 2002, when President George W. Bush withdrew the United States from the 1972 ABM Treaty and then beganGMD interceptors from 44 to 104 and to plan for any future capacity at any BMD site. The provision would further require MDA to rapidly advance the capability and reliability of the GMD system. If adopted, this effort would be one of the more significant changes to the U.S. BMD System since about 2002 with the decision to deploy the GMD system in Alaska and California.

Regional Missile Defense

ForThe Administration's initial budget included a total of $700.5 million for procurement and additional development work associated with the TheaterTerminal High-Altitude Air Defense (THAAD) system, which is intended to intercept short-, medium- and intermediate-range ballistic missiles. THAAD is a transportable system designed to defend troops abroad and population centers. In testing, THAAD has generally performed well by most measures, but THAAD has not operated in combat. Both the House and Senate versions of the NDAA would have authorized an additional $318.4 million in procurement funding for THAAD. However, the November budget amendment boosted the total THAAD request to $1.3 billion. That amount is authorized by the final version of H.R. 2810intended to intercept medium-range missiles, as well as aircraft, the Administration's budget includes a total of $700.5 million. Both the House bill and the Senate amendment would authorize an additional $318.4 million in procurement funding for the program.

The Army's Patriot system is the most mature BMD system. It was used in combat in the 1991 and 2003 wars against Iraq with mixed results and is fielded around the world by the United States and other countries that have purchased the system. Patriot is a mobile system designed to defend relatively small areas such as military bases and air fields. Patriot works with THAAD to provide an integrated and overlapping defense against attackingincoming missiles in their final phase of flight. The The original FY2018 budget request included $625.9 million for the Patriot system. Both chambers would substantially increase procurement funding for Patriot – the House bill would authorize an additional $633.6 million and the Senate amendment would authorize an additional $650.1 million.

In addition, a total of $1.71 billion is requested for the anti-missile version of the Aegis system, developed by the Navy and deployed on ships and land-based sites in Poland and Romania. The Senate committee bill would fully fund the President's procurement request for the Aegis system and the House bill would provide an additional $58 million for the program. Both chambers' FY2018 NDAAs would recommend a minor reduction ($6.4 million) to the RDT&E request.

Foreign BMD Participation

The United States has collaborated with a number of allies in missile defense programs since 1986. MDA actively participates in NATO activities to develop an integrated NATO BMD capability. Several allied countries have purchased Patriot systems and allies in the Middle East and East Asia are in various stages of acquiring THAAD. Japan has acquired Aegis BMD capabilities.

U.S. THAAD radars are deployed in Turkey, Israel, and Japan, and U.S. THAAD batteries are deployed in the Persian Gulf, Guam and South Korea. Since 1986, the United States has invested significantly in Israel's missile defense programs and systems designed to protect against rocket attacks. The United States also has deployed a THAAD radar to Israel in 2008. Thus far, the United States has provided about $2.5 billion for Israeli-designed missile defense programs, which include the Arrow systems designed to counter short- and medium-range ballistic missiles, Iron Dome (to counter short-range rockets), and David's Sling (designed to counter longer range rockets).

Space and Space-basedBased Programs and Activities⁵²

44

The President's budget request included $6.9 billion in funding forto fund National Security Space activities which includes. This includes a total of $1.9 billion to continue acquiring satellite launchers under the Evolved Expendable Launch Vehicle (EELV) program and developing a replacement for the Russian-made rocket engine used since the early 2000s in some EELV launchers.⁵³ Both the House bill and the Senate amendment most national security space launches.⁴⁵ The enacted version of the bill—like the versions earlier passed by the House and Senate—generally supported the President's budget request for space programs. (See (see Table 13). However, the Senate bill Table 6.) The Senate version of the NDAA included a provision (§1604) that would prohibithave prohibited the obligation of funding to maintain infrastructure, base and range support, sustainment commodities, and other activities associated with the Delta IV launch vehicle until the Secretary of the Air Force certifiescertified that the Air Force plans to launch a satellite on a Delta IV launch vehicle within three years. In its report on the FY2018 NDAAbill, the Senate Armed Services Committee contended that, "[since] the Air Force no longer requires the Delta IV, the Air Force should not be responsible for the significant costs associated with maintaining the capability for the NRO [National Reconnaissance Office]."⁵⁴

In addition to providing authorization of appropriations for space programs and activities, the House bill recommends two provisions (§1601-§1602) to reorganize the DOD national security space structure. According to committee's report, the provisions are intended to

• create a Space Corps to "posture and properly focus" the military services to protect U.S. interests in space and provide combat-ready space forces;
• elevate national security space operations within the combatant command structure; and
• eliminate unnecessary bureaucracy through consolidation and elimination.⁵⁵

The Senate bill does not include provisions aimed at a general reorganization of the national security space structure. Moreover, it includes a provision (§6605) that would prohibit the creation of any corps independent of the existing service departments (such as the Space Corps proposed by the House).

The Senate bill also includes a provision that would require the Commander of Air Force Space Command to serve a term of at least six years (§1601) and a provision that establishes the position of Chief Information Warfare Officer who would have authority to establish policy for and direct all elements of the DOD in matters related to space and space launch systems (§902).

Overview of Ground Vehicle Programs⁵⁶

The House and Senate bills each would accelerate programs to modernize the Army's existing suite of armored combat vehicles: M-1 Abrams tanks, M-2 Bradley troop carriers, and Stryker light armored cars. All three types of vehicles, which are slated to remain in service beyond FY2028, are being given various upgrades including self-protection systems intended to neutralize anti-armorantiarmor missiles.

Both bills also would accelerate the Similarly, the enacted version of the bill—as the House and Senate versions would have done—accelerates the planned procurement of long-range artillery rockets and of the Joint Light Tactical Vehicle (JLTV) slated for use by all services as a replacement for the 1980s-vintage High Mobility Multi-purpose Wheeled Vehicle (HMMWV).

The two bills each would authorizeHouse and Senate versions, as well as the final version, authorized the amounts requested to continue a program to remount the Army's Paladin self-propelled artillery piece on a new tracked chassis, based on the Bradley, and to continue. They also authorized continued acquisition of two new types of combat vehicles: the Army's Armored Multi-Purpose Vehicle (AMPV), the Marine Corps' Amphibious Combat Vehicle (ACV).

See Table 147 for information on the FY2018 budget request and authorization actions for selected ballistic missile defense systemsground vehicle programs.

Armored Multi-Purpose Vehicle (AMPV)

The Armored Multi-Purpose Vehicle (AMPV) is the Army's proposed replacement for the Vietnam-era M-113 personnel carriers, which are still in service in a variety of support capacities in armored brigade combat teams (ABCTs). While M-113s no longer serve as infantry fighting vehicles, five variants of the M-113 serve as command and control vehicles, general purpose vehicles, mortar carriers, and medical treatment and evacuation vehicles. The new vehicle would incorporate those capabilities on a Bradley chassis.

For FY2018, the Army requested a total of $647.4 million (base budget and OCO funds combined) to continue developing the AMPV and to procure the first 107 vehicles, which the House and Senate versions of the NDAA each would authorize. The request was approved by the House and Senate bills and by the enacted version.

Amphibious Combat Vehicle (ACV)

Similarly, theThe Marine Corps is requestingrequested $340.5 million to continue developing and begin procurement of the Amphibious Combat Vehicle (ACV) to replace its 1970s-vintage amphibious assault vehicles. The service plans to field 204 wheeled vehicles (designated ACV 1.1) and then begin fielding a tracked vehicle designated ACV 1.2. As requested by the Administration, the House bill and Senate amendment each would authorizeenacted bill authorizes $340.5 million to continue development of the new vehicles and to acquire the first 26 ACV 1.1s.

The House and Senate bills would have done likewise.

Overview of Shipbuilding Programs⁵⁷

In early 2016, when the Navy's long-term goal was to sustain a fleet of 308 ships, it projected a budget request for FY2018 that would fund eight new ships. Toward the end of48 In December 2017, the Navy adopted a new force goal of 355 ships – —a total similar to the 350-ship fleet President Trump had called for during the 2016 election campaign. The 355-ship plan replaced a force goal of 308 ships that the Navy had adopted in March 2015. The House bill and the Senate amendment both includeincluded a provision (coincidentally designated §designated Section 1016, in each case) to declare it to be U.S. policy to have available, as soon as practicable, a force of 355 ships.

The FY2018 NDAA as enacted (H.R. 2810/P.L. 115-91 of December 12, 2017) includes this provision as Section 1025.

The Navy's proposed FY2018 budget, as amended on May 24June 29, 2017, requestsrequested the procurement of nine new ships, including one Gerald R. Ford (CVN-78) class aircraft carrier, two VirginiaVirginia-class attack submarines, two DDG-51 class destroyers, two Littoral Combat Ships (LCSs), one TAO-205 class oiler, and one towing, salvage, and rescue ship. With one exception, these are the same ships that the Navy had projected a year earlier it would request for FY2018. The difference is that the Navy had projected a request for one LCS in FY2018 rather than two.

According to separate analyses by both CRS and CBO, Navy's goal of a 355-ship fleet would require an increase in annual shipbuilding funds. The House bill and the Senate amendment each would authorize similar additions to the FY2018 shipbuilding requestThe request was amended on June 29 to include the second LCS—the budget as originally submitted requested only one LCS. Achieving and maintaining the Navy's 355-ship fleet would require an expanded shipbuilding effort, and an associated increase in funding for Navy shipbuilding. The House bill and Senate amendment would have authorized various changes (mostly additions) to the shipbuilding request. In total, the House bill would authorize a $4.9 billion increase to the requested amount for shipbuilding. The Senate bill would authorize a $5.0 billion increase. The FY2018 NDAA as enacted authorizes a $5.8 billion increase, including funding for not only the nine ships requested for FY2018, but also one additional DDG-51 class destroyer, one additional LCS, one additional LPD-17 or LX(R) class additional amphibious ship, one additional expeditionary sea base (ESB) ship, one additional cable ship, and five additional ship-to-shore connector (SSC) landing craft.

See Table 158 for summary information on the FY2018 budget request and authorization actions for selected combatant ships. See Table 169 for summary information on the FY2018 budget request and authorization actions for selected support and amphibious assault ships.

In general, the House bill and the Senate amendment each would authorize funds to accelerate procurement of attack submarines, Aegis destroyers, and vessels designed to support amphibious assaults. They diverge in their respective treatments of the LCS program, with the House bill authorizing funds for three of the ships while the Senate bill would authorize one, disregarding the Administration's belated request to fund two LCSs in FY2018.

Nuclear-poweredNuclear-Powered Aircraft Carrier Programs

A total of $4.465 billion iswas requested to continue acquisition of Gerald R. Ford-class nuclear-powered aircraft carriers. This includes a, including $2.6 billion increment to continue work on the second ship of the class, designated CVN-79 (slated for delivery in 2024 at aan estimated total cost of $11.4 billion) and $1.9 billion to begin work on afor the third ship of the class, designated CVN-80 (slated for delivery in 2027 at an estimated total cost of $13.0 billion).⁴⁹).⁵⁸ The Senate bill would approvehave approved the request while the House bill would approve a total of $3.74 billion on grounds that the remainder of the funds requested would not be needed during FY2018. The Senate amendment also includesincluded a provision (§125) limiting to $12.0 billion the cost of any aircraft carrier procured after the procurement of CVN-79.

The two bills diverge in a similar way regarding the request for $1.60 The FY2018 NDAA as enacted authorizes the requested amount. The House bill and Senate amendment diverged regarding a request for $1.7 billion to continue refueling and modernizing the carrier George Washington and to continue procurement of equipment that would be used in modernizing and refueling the carrier John C. Stennis, an operation slated to begin in 2021. The Senate amendment would authorizehave authorized the amount requested for the refueling operations while the House bill would make a net reduction of $423.3 million, largely on grounds that the funds would not be needed in FY2018.

The FY2018 NDAA as enacted authorizes about $1.6 billion—a reduction of $35.2 million from the requested amount.

Selected Aviation Programs⁵⁰

The budget request includes $40.3 billion for acquisition of manned and unmanned aircraft. Of that amount, $528 million is designated as OCO funding to replace 22 unmanned aerial vehicles (UAVs) and two Apache helicopters that were destroyed or damaged beyond repair in missions related to operations in Afghanistan and the Middle East.

See Table 1710 for summary information on the FY2018 budget request and authorization actions for selected fighter and attack aircraft. See Table 1811 for summary information on the FY2018 budget request and authorization actions for selected tanker, transport, and cargo aircraft. See Table 1912 for summary information on the FY2018 budget request and authorization actions for selected patrol and surveillance aircraft (including UAVs). See Table 2013 for summary information on the FY2018 budget request and authorization actions for selected helicopters and tilt-rotor aircraft.

Fighter and Attack Aircraft⁵⁹

The budget request includes $9.0 billion for the procurement of 70 F-35 Joint Strike Fighters, including 46 Air Force F-35As, 20 F-35Bs for the Marine Corps equipped for short takeoff and vertical landing (STOVL), and 4 Navy F-35Cs, equipped for carrier operations. The request also includes $135 million to modify F-35s already in service and $542 million for F-35 spare parts. The request also includes nearly $1.2 billion to continue development of the three versions of the aircraft and of the F135 engine that powers it.⁶⁰51 Both chambers proposed additions to the President's budget request for the F-35 program: the House bill would addhave added 17 aircraft and the Senate bill would add 24have added 24. The final version provides 90 F-35s, an increase of 20 from the request.

In addition to heavily investing in the JSF program, the Air Force continues investments in modification of in-service fighter aircraft—often referred to as legacy aircraft—with 23% of its aircraft procurement budget ($3.5 billion) allocated to the effort. Modifications include continued modernization of legacy fighters such as F-22A, F-1522As, F-15s, and F-16s. As enacted, H.R. 2810 fully funds this request. , and F-16s. The Air Force budget maintainsrequest would have maintained the A-10 fleet at its FY2017 inventory levels (143 active, 85 National Guard, 55 reserve). The House bill and the Senate amendment would both fully supportand Senate versions of the NDAA both fully supported the President's budget request for these aircraft. Both bills would also provide an additional $103.0 million for procurement of additional, as does the enacted version. The final bill, like the House and Senate versions, authorizes $103 million for replacement wings for A-10 aircraft (not requested by the Administration, but included on the Air Force's Unfunded Priority List or UPL).⁵²UPL).⁶¹

To compensate for the slower-than-planned fielding of the JSF, the budget request includesincluded funds to mitigate a shortfall in the Navy's fleet of strike fighters by buying new F/A-18s and upgrading planes of that type already in service. The Administration requested $1.3 billion for procurement of 14 Navy F/A-18s and an additional $1.3 billion for modifications and upgrades to the existing fleet. The FY2018 budget does not indicate F/A-18 purchasesdid not report plans to buy additional F/A-18s in future budget years. However, the Navy's Unfunded Priority ListUPL included an additional 10 F/A-18s as the service's top priority should additional funding be available.

Both the House and Senate bills generally supported the President's budget request for the F/A-18 program and took note of the UPL, recommending procurement of additional aircraft. The House bill would authorizehave authorized procurement of 8 additional F/A-18s (22 total) and the Senate amendment would authorize an additional 10.

In addition, the have authorized an additional 10. The enacted NDAA provides 24 F-18s, matching the Navy's UPL. In addition, SASC expressed concern that "continued reliance on the A–-10, B–-1, B–-52, F–-16, and F–-15E fleets to conduct armed reconnaissance and close air support (CAS) missions in Afghanistan, Iraq, Syria, and other regions significantly reduces airframe lifespans due to utilization rates that are much higher than planned and programmed."⁶²53 The committee recommended an additional $1.2 billion be provided to the Air Force for the acquisition of a fleet of light attack/observation aircraft (OA-X) fleet.

. The final version of the bill provides $400 million for this purpose.

Tanker, Cargo, and Transport Aircraft

The KC-46A aerial refueling tanker program continues into the fourth year of low-rate initial production (LRIP), with the Administration requesting $3.1 billion for the procurement of 15 additional aircraft and support of continued development and testing. The House and Senate versions of the bill each would add two aircraft to the President's budget request for the KC-46A (authorizing a total of 17). However, the House bill would authorize none of the $93 million requested for RDT&E funding on grounds that the program has not spent funds appropriated in prior budgets. See Table 18.

The President's budget request included $1.7 billion in procurement funding for the C-130 aircraft program (all variants), which includes the procurement of nine aircraft as well as modifications to the in-service fleet. Both the House and Senate-committee recommended substantial increases in procurement quantities – the House bill would authorize a total of $2.9 billion (adding 11 aircraft) and the Senate amendment would authorize $3.4 billion (adding 17 aircraft).

Both chambers also supported the President's budget request for research, development, test and evaluation funding for an Air Force One replacement (formally known as the Presidential Aircraft Recapitalization program) and the VH-92 Presidential helicopter. However, the House bill included a provision (§211) that would place cost controls and require quarterly briefings to the HASC on efforts to control costs related to the program.

Patrol and Surveillance Aircraft

The President's budget request also investsalso requested investment in several patrol and surveillance aircraft (see Table 1912). Both chambers generally supported the request but also recommended additional funding for procurement of P-8 Poseidon aircraft for the Navy and an additional $39.4 million for RQ-4 Global Hawk modifications . The House bill would have further increaseincreased funding for the RQ-4 program by $18.3 million to support continued modifications of existing RQ-4 aircraft. The House bill also included a provision (§1034) that would repeal §Section 133 of the FY2012 NDAA (P.L. 112-81), which limited the Secretary of the Air Force in taking actions to retire U-2 aircraft.

The final version of H.R. 2810 included $1.8 billion for P-8s, authorizing three more than requested. Global Hawk modifications are funded at $101.8 million, $39.4 million above the request. Section 136 of the conference report places modified limits on retirement of U-2s. Table 12

Helicopters and Tilt-Rotor Aircraft

Both chambers generally supported the request and recommended additional funding for the procurement of various types of helicopters and tilt-rotor aircraft—AH-64 Apaches, CH-47 Chinooks, and V-22 Ospreys—and for upgrades to Apaches, Chinooks, H-1 "Hueys," and AH-1 Cobras (see Table 13). The House bill would have authorizedAH-64 Apache program, CH-47 Chinook procurement, UH-1/AH-1 procurement and V-22 Osprey procurement (see Table 20). The House bill also recommended additional funding for AH-64 modifications and UH-60 Blackhawk procurement (8 additional aircraft). The Senate amendmentbill would authorizehave authorized an additional $279.2 million to procure 2 additional CH-53Ks over the Marine Corps request.

The final version of H.R. 2810 authorized procurement of 14 CH-47s (8 more than requested); 75 AH-64s (10 more than requested); 92 UH-60s (8 more than requested); 29 UH/AH-1s (7 more than requested); 12 V-22s (6 more than requested); and met the requested amount of CH-53s.

Table 13. Selected Helicopter.

Acquisition Reform

⁵⁴

Since the 114th Congress, the House and Senate Armed Services Committees have worked to reform the Department of Defense's acquisition processes. This focus continues in the House and Senate versions of H.R. 2810. The bills address several major areas of shared interest:

Commercial Items

Many provisions in the two bills expand the range of what may be considered commercial items, thus exempting them from certain federal procurement regulations. Intending to make buying commercial products easier, the House included a provision in its bill (§801)enacted version of the FY2018 NDAA. The final version of the bill addresses several major areas, including the following. Procurement of Commercial Items

Many provisions in the House and Senate versions of the NDAA would have expanded the range of products that may be considered commercial items and, as such, would be exempt from certain federal procurement regulations, thus making their purchase simpler and faster. The final version of the bill included modified versions of several such provisions:

The House bill included a provision (§801) that would require the General Services Administration to "establish a program to procure commercial products through online marketplaces for purposes of expediting procurement and ensuring reasonable pricing of commercial products." The Senate's subtitle E, "Provisions Related to Commercial Items," specifically includes several items (§851-855) bill contained no such provision. The House provision is included in the final bill (§846) with a number of modifications, including requiring a phased implementation of the program, limiting acquisition on such marketplaces to the simplified acquisition threshold, and requiring GAO to assess both the implementation plan and the first three years of the program's performance. The Senate bill included several provisions intended to expand the range of products DOD could acquire under thesethe less restrictive commercial procedures. In the Senate bill, Section 852 would allow an item to meet the definition of being commercially available if it had been sold to multiple foreign governments. No such provision was contained in the House bill. A modified version of the Senate provision was included in the final bill (§847).

Section 853 of the Senate bill would direct that a contract for a commercial item "shall serve as a prior commercial item determination" when making any future purchase of the item unless there is a written determination to the contrary. No such provision was in the House bill. The provision was included in the final bill, with some modification (§848).

Section 854 of the Senate bill would require that the acquisition of commercial items and nondevelopmental items take priority over any small business set-asides that would result in a noncommercial acquisition. No such provision was in the House bill. This provision was not included in the final bill.

Contracts for Services

The House and Senate versions of the NDAA both included provisions intended to improve the visibility and oversight of contracts for services, which account for the majority of DOD spending on contracts. GAO has found that both DOD and Congress track the funding spent on products better than they do the funding spent on services.⁵⁵ Many of these service contracting oversight provisions were incorporated into the final version of the bill, with some modifications:

• Section 814 of the House bill and Section 829 of the Senate bill include similar provisions aimed at improving the collection and analysis of data used in planning for and awarding service contracts. A similar provision, based on the House language, is included in the final bill as Section 851.
• Section 819 of the Senate bill would have created temporary authority for DOD to enter into multiyear services contracts for up to 15 years instead of the current limit of 5 years. A similar provision was included in the final version of the bill as Section 854.

Some service contracting provisions approved by one or the other chamber were dropped in conference. Such was the fate of House Section 870 that would have limited the amount spent on services contracts in FY2018 to the amount spent in FY2010. Also dropped was Senate Section 820 that would have required the Secretary of Defense to identify categories of industry in which there are a significant number of commercial services providers that could meet DOD requirements.

Major Defense Acquisition Programs (MDAPs)

Following on previous efforts to reform acquisition process management, both House and Senate versions again proposed changing parts of the process. The Senate bill contained a provision to exclude defense business systems and major automated information systems from the definition of an MDAP (§835). The House bill had no such provision and the House receded, including the provision in the final bill (§831).

Section 811 of the House bill sought to insert new requirements to consider "reliability and maintainability" when DOD designs weapon systems, and Section 852 of the House bill would codify use of operating and support costs in evaluating major programs at every stage of acquisition. Both provisions were included in the final version of the NDAA, with some modification (§§834 and 836 respectively).

Bid Protests to GAO

Section 821 of the Senate bill would require that in a bid protest where GAO issues an opinion denying every point of a protest, the protestor would pay the protest costs if the protester had revenues in excess of $100.0 million during the previous year. The House bill had no such provision. The final version of the bill establishes a three-year pilot program requiring certain companies filing a GAO bid protest to pay DOD processing costs for the protest when GAO issues an opinion that denies all elements of the protest. By terms of Section 827, the pilot program is to begin two years after the date of the bill's enactment.

Military Construction⁵⁶ For military construction (MILCON) and family housing in FY2018, the Administration requested $9.8 billion in the base budget and $600 million in OCO funds, for a total of $10.4 billion (see Table 14). This compares with the FY2017 total of $8.1 billion, including $7.7 billion in the base budget and $420 million in OCO.

DOD's proposed increase in military construction funds continued an upward trend that began in FY2015. The department indicated it would use the additional amounts in FY2018 to address priorities that include the establishment of new missions at various locations (such as the arrival of F-35s at various bases); support to combatant commands (e.g., improvements to existing air bases); medical facility recapitalization (at Fort Bliss, Fort Leonard Wood, Walter Reed, and Rhine Ordnance Barracks); and quality of life improvements (e.g., the replacement of schools for servicemembers' dependents).

The FY2018 funding requests for seven projects exceeded $100 million each. For four of the seven, the full amounts requested were approved in the House and Senate versions of the bill and in the final enacted version:

• $314 million for a National Security Agency operations facility for more than 3,000 personnel at Fort George G. Meade, Maryland;
• $251 million for a hospital at Fort Bliss, Texas;
• $124 million for a hospital at Bethesda, Maryland; and
• $107 million for a hospital at Rhine Ordnance Barracks in western Germany.

According to the conference report on the final version of the NDAA, House and Senate conferees approved the other three large projects in principle, but authorized in H.R. 2810 only that portion of the requested amounts that could be spent during FY2018. Thus, the final bill authorized

• $175 million (of $381 million requested) for a new headquarters complex in St. Louis, MO, for the National Geospatial-Intelligence Agency;
• $100 million (of $254 million requested) for a maintenance complex for Air Force One at Andrews Air Force Base, in Maryland; and
• $100 million (of $250 million requested) for a hospital at Fort Leonard Wood, Missouri.

Base Realignment and Closure

As it had done for several years, the Administration included in its DOD budget request for FY2018 authorization to conduct another Base Realignment and Closure (BRAC) round—this one in 2021. The House and Senate versions of the NDAA included identical provisions (§2702, in each case) that would have prohibited an additional BRAC round. The same language was incorporated into the final bill as Section 2702.⁵⁷

Overseas Contingency Operations

The Administration requested $638 million in OCO funds for military construction, an increase of $218 million over FY2017 enacted amounts. Most of this increase was for European Reassurance Initiative (ERI) construction projects. Funding for ERI projects represents roughly half of the Administration's entire OCO request. Of the $306.9 million requested for ERI-related military construction, more than two-thirds is for Air Force facilities, with the largest amounts targeted for projects in Luxembourg, Hungary, and Slovakia. Both the House and Senate versions of H.R. 2810 approved the ERI construction requests in toto, as did the final version of the bill.

The Administration requested an additional $331 million in non-ERI OCO appropriations for a relatively small number of capital-intensive projects. These includedprocedures.

Contracts for Services

Both chambers emphasize oversight and visibility of service contracts and seek to better evaluate the services contracts DOD lets. In addition, the Senate amendment would create a temporary authority for DOD to enter into multiyear services contracts for up to 15 years instead of the current limit of 5 years (§819) and would echo the emphasis on commercial products by requiring the Secretary of Defense to list industries in which there are significant numbers of commercial services providers (§820). Also of note, the House bill contains a provision limiting the total amount spent on services contracts to the amount requested in FY2010 (§870). This limit was enacted from FY2012 to FY2015. Although House NDAA bills in earlier years carried an extension in FY2016 and FY2017, neither provision was enacted.

Intellectual Property

The House and Senate bills each would bolster DOD's role in acquiring intellectual property rights for the goods and services it procures. DOD seeks intellectual property rights to ensure the department does not become beholden to a single contractor.⁶³ See §812 and §813 in the House bill, and §881, §892, and §899 in the Senate amendment for related provisions.

"Other Transaction" (OT) Authority

Both bills seek to increase DOD's use of other transaction (OT) authority. An OT is a special vehicle that allows DOD, using the authority found in 10 U.S.C. §2371, to enter into transactions with private organizations for basic, applied, and advanced research projects.⁶⁴ An OT, in practice, is defined in the negative: an OT is not a contract, grant, or cooperative agreement, and its advantages come mostly from OTs not being subject to certain procurement statutes and acquisition regulations. The Senate amendment includes a subtitle dedicated to such transactions. The Senate amendment (§871) and House bill (§855) would both extend this authority to include developing prototypes. The Senate amendment would also address education and training on OT (§872), and the use of OT for science and technology projects (§873) and for research and development programs (§874).

Acquisition System Management

Following on previous efforts to reform acquisition process management, both bills again propose changing parts of the process. The bills also address data analytics, software acquisition, and revisions to previous reforms. The Senate amendment (§804) would direct that the defense-specific acquisition regulations adopt language stating the purpose of the defense acquisition system and would require a report on whether Special Operations Command should have the same acquisition authorities as the military departments (§806). The House bill (§811) would insert new requirements to consider "reliability and maintainability" when DOD designs weapon systems and would codify use of operating and support costs in evaluating major programs at every stage of acquisition (§852).

Bid Protests to GAO

The Senate amendment includes a provision (§821) that would modify the procedure by which a bidder can protest the bidder's loss of a competition on procedural grounds. In a case in which GAO denies every point of a protest, the Senate provision would require the party filing the protest to pay the cost of processing the protest, if that party had revenues in excess of $100.0 million during the previous year.

FY2018 Acquisition Reform Initiatives For more background and information see CRS Report R44920, Select Acquisition Reform Provisions in the House and Senate Versions of the FY2018 National Defense Authorization Act, by [author name scrubbed].

Military Construction Budget Request⁶⁵

For military construction (MILCON) and family housing in FY2018, the Administration has requested $9.8 billion in the base budget and $600 million in OCO funds, for a total of $10.4 billion. This compares with $8.1 billion appropriated ($7.7 base and $420 million OCO) for these programs in FY2017.

DOD's proposed increase in military construction funds would continue an upward trend that began in FY2015. The Department has indicated it would use the additional amounts in FY2018 to address priorities that include the establishment of new missions at a location (such as the arrival of Joint Strike Fighters at various bases); support to combatant commands (such as improvements to existing air bases); medical facility recapitalization (at Fort Bliss, Fort Leonard Wood, Walter Reed, and Rhine Ordnance Barracks); and quality of life improvements (such as the replacement of schools for servicemembers' dependents).

The two largest projects the Administration has proposed would fund construction of a replacement National Geospatial-Intelligence Agency (NGA) complex in St. Louis, MO ($381 million) and a National Security Agency operations facility for more than 3,000 personnel at Fort George G. Meade, MD ($314 million). Funding for the NSA and NGA projects accounts for almost a quarter of the President's overall military construction request. Compared with the military departments, the Defense-Wide account would receive a larger increase in funding ($1.3 billion over the FY2017 appropriation), though each of the services also would receive some additional amounts (see Figure 8).

Figure 8. Proposed Changes in the Military Construction Spending, by Military Department FY2017 Enacted vs. FY2018 Administration Request

Source: Department of Defense, FY2018 Military Construction Budget Request.

Overseas Contingency Operations

The Administration has requested $638 million in OCO funds, an increase of $218 million over FY2017 enacted amounts. Most of this increase would provide for European Reassurance Initiative construction projects within the OCO account. Funding for ERI projects represents roughly half of the Administration's entire OCO request. Within the ERI request, the largest amounts for military construction in specific countries would fund projects in Luxembourg, Hungary, and Slovakia.

The Administration has requested an additional $331 million in non-ERI, OCO appropriations for a relatively small number of capital intensive projects. These include the construction of a new airfield in Jordan ($143 million), an enlisted barracks at Guantanamo Bay ($115 million), and security upgrades at Incirlik Air Base in Turkey ($22 million).

Family Housing

Family Housing funds within the MILCON appropriation have the construction of a new airfield in Jordan ($143 million), an enlisted barracks at Guantanamo Bay ($115 million), and security upgrades at Incirlik Air Base in Turkey ($22 million). All of these projects were authorized by the final version of H.R. 2810, as they had been by the House and Senate versions. Family Housing Funding for the construction and operation of DOD-owned military family housing has generally remained level since FY2014, following a period of steep decline with the privatization of most of the DOD's government-owned housing within the United States.⁶⁶ The Administration has requested $1.4 billion in Family Housing appropriations for FY201858 DOD's FY2018 budget request included $1.4 billion for family housing, an increase of $130 million over the FY2017 enacted amounts.

The House bill would have cut $46 million from the housing request citing anticipated savings. The Senate bill would have cut $72 million to deny funding for housing construction on Guam and on Kwajalein Atoll. The final version of the NDAA fully funded the request.

Table 14. Authorization for FY2017 enacted amounts.

Base Realignment and Closure

The Administration has requested authorization to conduct a Base Realignment and Closure (BRAC) round in 2021. DOD has recommended revising the legislation to include a requirement that the Secretary of Defense certify that the elimination of excess infrastructure as a primary objective, and that net savings would be achieved within five years of implementation. As further justification for a new BRAC round, senior officials have cited the need to revise stationing requirements to account for anticipated changes in force structure. Provisions in the Senate and House versions of the FY2018 NDAA (§2702, in each case) would prohibit an additional Base Realignment round.⁶⁷

Authorization of FY2018 Military Construction Projects

In FY2018, congressional committees have recommended altering the Administration's MILCON topline request by less than 2% overall. The Senate recommended an increase of $700 million to the President's proposed topline. The Senate would also move $300 million of the Administration's OCO request ― for ERI construction ― into the base account. See Table 22.

Among the largest changes the House bill would make to the President's request are: a decrease by $181 million for a replacement National Geospatial-Intelligence Agency (NGA) complex in St. Louis, MO ($381 million proposed; reduced to $200 million); and a reduction by $130 million in a Presidential Aircraft Recapitalization Complex at Joint Base Andrews, in Maryland ($254 million proposed, reduced to $124 million).⁶⁸ In its report accompanying H.R. 2810, the House Armed Services Committee expressed support for fully funding these projects over time, but said it was authorizing the amounts that the lead agency on each project could spend in FY2018.

Like the House version of the FY2018 NDAA, the Senate amendment would significantly reduce funds for the construction of a replacement National Geospatial-Intelligence Agency (NGA) complex in St. Louis, MO ($381 million proposed; reduced to $50 million); and a Presidential Aircraft Recapitalization Complex at Joint Base Andrews, in Maryland ($254 million proposed, reduced to $58 million). The Senate version of the bill would authorize less than the Administration requested for a new hospital at Fort Leonard Wood, in Missouri ($250 million proposed; reduced to $50 million).

The House bill would also remove roughly $112 million in OCO-ERI funded projects in Hungary, Norway, and Slovakia. House authorizers fully funded the remaining $195 million for OCO-ERI projects in Estonia, Iceland, Latvia, Romania, and unspecified locations worldwide.