The 2015 National Defense Authorization Act (NDAA)

The National Defense Authorization Act (NDAA) offers Congress its most significant single opportunity to weigh in on defense policy issues. The bill authorizes funding levels, military end strength, and personnel levels, as well as providing a forum for addressing the pressing policy questions of the day. The NDAA passed the House on December 4 and the Senate on December 12 and is expected to be signed by the President this month. Below, CSIS experts in the International Security Program weigh in on four key issue areas in this year’s NDAA.

Turning “Nos” into “Maybes”

Ryan Crotty, Fellow and Deputy Director for Defense Budget Analysis, International Security Program

The Department of Defense (DOD) came to Congress each of the last three years with a series of proposals to execute cuts that would help DOD rationalize its program and contain growing costs. The response out of Congress has frequently been one of denial, with many of these reform proposals seemingly rejected out of hand. The narrative out of the DOD has been that Congress is undermining the department’s ability to manage to the budget cuts that Congress has forced on them.  Deputy Secretary Bob Work has stumped on this narrative in 2014, stating at the Global Security Forum here at CSIS in November that, “we do know we're facing up to $70 billion in nos, $70 billion in nos across the Future Years Defense Program, stemming from potential congressional rejections of our proposed way forward.” These “Nos” come from changes to force structure, including fleet retirements, mothballing of platforms and restructuring, and compensation changes, including changes to housing allowance calculations, pay raises, and healthcare co-pays, among others.

While many of the proposals from DOD in the FY 2015 were not supported in this year’s authorization bill, they were not as roundly rejected as may have been initially expected. This should be taken as a positive sign for DOD and the administration. Moving congressional positions and enacting reform is a long process. Any significant change has to go through what could be termed the four stages of congressional acceptance: Denial, Studying, Half-measures, and Acceptance. For the first time, some of these DOD initiatives are moving past the denial phase.

Significant TRICARE co-pay changes and consolidation did not get through in this year’s NDAA, but pharmacy co-pay increases did get into the bill, and the Military Compensation and Retirement Modernization Commission established in the 2013 NDAA will release its study in February, providing plenty of time for their recommendations to be considered by Congress for the 2016 bill. Pay raises were limited to below inflation and housing allowance cost growth was slowed (if only for one year). The retirement of the A-10 fleet was rejected, but Congress did allow a third of the planned retiring planes to move into “backup inventory status.” Similarly, the bill rejects the cruiser phased modernization program for 11 cruisers and 3 dock landing ships, but does allow 2 cruisers to go into modernization. The Army’s plan to restructure the aviation assets between the active component and the National Guard was denied, but Congress initiated a commission to study the issue and allows the Army to plan for changes starting in FY 2016.

These half-measures and small conciliations are understandably frustrating for DOD. The most severe challenges for DOD under steep budget cuts are in the near term. The options for what can be cut right away are limited, and any changes take time to implement, so each year of rejection has ripple effects through the defense program.  And there are still big-ticket items, like Base Realignment and Closure (BRAC), which remain in the denial phase. Even if sequester does not return, many of these initiatives will be important to ensure that DOD is getting the greatest amount of capability for its dollar. But, this will only happen one step at a time, so DOD should be heartened that congress has begun to walk along the path of change.

Opening Up Defense Acquisition

Andrew Hunter, Director, Defense-Industrial Initiatives Group and Senior Fellow, International Security Program

Nothing has been discussed more intensely this year in defense acquisition circles than the question of what intellectual property (IP) rights the Department of Defense needs to acquire for its many complex weapon and information systems, and whether its approach to doing so disadvantages industry. The government’s case is that it requires enough IP rights for its systems to allow it to compete the maintenance of these systems and to upgrade them over their decades-long lifecycles. Industry argues that intellectual property is the life blood of its product development and the foundation for its profits.  Many companies have indicated that they may forego government business rather than concede critical IP rights. This year’s NDAA addresses a related topic that gets at the heart of this issue: the adoption of modular open systems approaches in acquisition programs.  What remains to be seen is if modular open systems approaches provide a way to resolve this conflict or simply open a new front in the battle.

A modular open systems approach is a strategy for designing and developing a system, whether it’s a simple piece of software or a complex weapon system, so that it consists of clearly defined modules connected by interfaces built to consensus-based standards. Because these modules are designed to be readily modified or replaced, this approach can enable competition for upgrades and sustainment over time. Military weapon systems have traditionally been associated with proprietary design approaches, but open approaches have also been used successfully as demonstrated by the Navy’s Acoustic Rapid COTS Insertion (ARCI) effort. ARCI defined standardized interfaces within the Navy’s submarine sonar systems that allowed new COTS technologies to be rapidly incorporated into the systems to improve performance and the Navy has shown it can extend this approach to other systems.

Section 801 of the recently passed NDAA promotes the adoption of modular open systems approaches by requiring a plan for the development of new consensus-based standards for systems in key mission areas where feasible and cost effective. The provision would also ensure that DoD enforces its existing policy preference for modular open systems approaches in the development of systems and require consideration of converting existing systems to open approaches. Because modular open systems approaches rely on consensus-based industry standards for the design of interfaces, a shift to these approaches could significantly reduce the Department’s need to acquire companies’ proprietary IP. Where standard interfaces exist, the government should be able to achieve its objectives of enabling upgrades and sustainment without the need for proprietary IP. Another potential advantage is that open approaches could facilitate international cooperative programs where a variety of international companies can contribute modules within a larger system design. The challenge, however, is that the work of developing new consensus-based industry standards where they don’t currently exist will be arduous, long, and potentially highly contentious. For this reason, Section 801 may simply lead to a partial shift of the debate from proprietary IP rights to how new standards are developed.

Strategic Forces in the NDAA

Thomas Karako, Visiting Fellow, International Security Program, Project on Nuclear Issues

In the areas of nuclear forces and missile defense, the FY2015 NDAA is characterized by a range of prudent advances for U.S. capabilities and remarkable caution about Russia and China.

Russia gets the most special attention. Concern about Russia’s actions in Ukraine, its probing and taunting of NATO and other neighbors, and its disregard of treaty obligations are reflected throughout the bill. So long as Russia is occupying Crimea, Congress prohibits almost all military cooperation with Russia. Notably, Congress expressly finds Russia in violation of the Intermediate-Range Nuclear Forces (INF) treaty, encourages that the treaty remain in effect and for the Russian Federation to return to full and verifiable compliance, but also encourages preparations should the treaty cease to exist. The House version had required a plan to counter Russia’s INF-noncompliant cruise missiles with the Aegis Ashore missile defenses now being deployed, but this was replaced with a broader report on the full range of DOD plans to counter Russia’s INF activities.

While Russian aircraft buzz NATO airspace and nuclear exercises occur in Kaliningrad, Congress reaffirms in the NDAA its sense on both the importance of NATO’s air and missile defense modernization and on the conclusions of NATO’s 2012 Deterrence and Defense Posture Review, whereby the alliance determined to retain forward-based nuclear weapons in Europe. The bill also extends a past prohibition on giving sensitive missile defense information to Russia, particularly concerning the velocity at burnout (VBO) of U.S. interceptors, and limits integration of Russian missile defenses into those of NATO. Dependence on Russia for space launch has long been recognized as a problem, and the bill both prohibits further contracts for space launch services and funds the development of a new domestic launch system by 2019. While probably not a return to the annual Soviet Military Power volumes from the 1980s, DoD is now charged to produce a substantial report on military and security challenges from Russia, mirroring the (sometimes) hefty annual report on China.

For China and the Asia Pacific, the NDAA emphasizes the importance of the rebalance and the importance of reassuring regional allies and partners. Whereas some room was left open for Russia and NATO, the bill prohibits any integration of U.S. missile defenses with the emerging missile defenses of China. Congress also requires DOD to study the prospects for increased missile defense cooperation (and improved short-range offensive capabilities) in Northeast Asia, especially between and among the United States, Japan, and the Republic of Korea, and also a broader report on regional missile defense efforts.    

For U.S. homeland missile defense, the bill requires DOD to produce a rigorous plan for the much-needed redesigned kill vehicle to put atop the ground-based interceptors in Alaska and California which currently comprise the only defenses for the homeland, and also to assess the adequacy of the program's testing regime. The bill accompanies significant increased funding for Iron Dome and other cooperative missile defense programs with Israel, but these funds come with strings attached, including a requirement for U.S. coproduction.  So long as American taxpayers are footing the bill to help secure Israel, it makes financial and strategic sense for the U.S. to be involved.

In the nuclear realm, the bill establishes a Sea-Based Deterrent Fund to steward the essential but highly expensive undertaking to build the next generation nuclear submarine (SSBN), the Ohio-class replacement. Congress reaffirms the importance of the triad of nuclear delivery systems, and a new report on command and control addresses strong concerns about needed improvements to STRATCOM’s systems. All 450 ICBM silos must also be kept “warm,” even if some missiles are removed for NEW START. Besides serving as a hedge for possible future operational status, this low cost requirement strengthens deterrence by creating targeting uncertainty in the mind of a potential adversary about just which silos are empty. Finally, the bill reaffirms the important capability of today’s air-launched cruise missile (ALCM), expected to be retired in 2030, and advances its replacement, the long range standoff missile (LRSO).

In sum, the 2015 NDAA takes some important steps toward sustaining nuclear and missile defense modernization efforts, and signals to both allies and strategic competitors alike that our commitment to deterrence and defense will be robust. 

Capacity-Building for Partner Nations

Stephanie Sanok Kostro, Senior Fellow, International Security Program

U.S. defense officials have long understood the value in ensuring that partner nations develop and maintain critical military capabilities – in large part because these nations often participate alongside U.S. forces in operations but also because close military-to-military relationships can strategically shape the security environment in times of relative peace. The last decade of authorization acts has reflected the Defense Department’s growing interest in training, advising, and equipping foreign military and security forces. The NDAAs have also reflected Congress’ focus on a careful balance between these programs and efforts to promote respect for human rights, civilian control of the military, and the rule of law.

The fiscal year 2015 act is no exception. In addition to lengthy subtitles on Afghanistan, Pakistan, and Iraq, the Russian Federation, and the Asia-Pacific region, the legislation signals clear congressional support for the Defense Department’s assistance and training authorities, especially relating to counterterrorism operations. After nine years as a pilot program, Congress has graduated the Global Train and Equip (“section 1206”) authority to statutory status. This statutory authority allows the Secretary of Defense, with the concurrence of the Secretary of State, to work with a partner nation’s military, national maritime or border security, and certain national-level security forces to combat terrorism. This expansion to include certain security forces indicates Congress’ understanding that not all counterterrorism operations will cross national borders, as this catch-all will now allow DOD to work with ministries of interior and other like bodies focused on domestic security. As such, it reflects Congress’ willingness to support partner nations’ ability to conduct such operations wherever they occur. Another 10-year old authority to allow U.S. Special Operations Command to assist counterterrorism efforts also received additional support this year. In fact, during the conference process, it appears that the final authorized funding exceeds the amount in both the House-passed and Senate Armed Service Committee bill – a rare occurrence and a clear indication of congressional support.

Despite these notable steps, Congress also clearly indicated its very real, continuing concern regarding recipients of U.S. security assistance. The fiscal year 2015 legislation codifies a prohibition on assistance to units that have committed a “gross violation of human rights” and includes a separate authority to conduct human rights training to prevent such violations, strengthen civilian control of the military, and promote rule of law. Moreover, many programs – such as Global Train and Equip – specifically require human rights training as an essential requirement for receiving assistance. Finally, the law requires several reports, which may irk the Defense Department officials who must complete them but which, when viewed together, provide Congress the information to conduct responsible oversight.

The ability for the U.S. military to train, advise, and equip foreign forces is a key component of the foreign assistance toolbox. That ability is predicated upon the reliability of recipient forces to use their capabilities with respect for human rights, civilian control of the military, and rule of law – the basic building blocks that can effectively shape the security environment in peacetime and ensure that the United States has responsible partners in times of war.

Ryan Crotty is a fellow with the International Security Program and deputy director for defense budget analysis at the Center for Strategic and International Studies (CSIS). Andrew Hunter is a senior fellow with the International Security Program and director of the Defense-Industrial Initiatives Group at CSIS, Thomas Karako is a visiting fellow with the International Security Program and Stephanie Sanok Kostro is a senior fellow with the International Security Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2014 by the Center for Strategic and International Studies. All rights reserved.


Tom Karako
Senior Fellow, International Security Program and Director, Missile Defense Project

Andrew Philip Hunter

Stephanie Sanok Kostro