Throughout the acquisition community there is a strong cultural belief that if funds are not obligated, they will be reallocated to other projects or reduced in future appropriations.
Because of these beliefs, which may in many cases be justified, an obligation surge occurs at the end of each fiscal year. This rush to spend, spurred by a use it or lose-it mentality, can lead to lower-quality requirements and contracts, inefficient resource allocation, degraded negotiating leverage and pricing power, and a negative effect on workforce morale.
Greater flexibility of DoD’s acquisition budget authority across time periods would likely increase the efficiency and effectiveness of contract spending within those time periods. Such changes would also preserve Congress’s ability to determine the total, long-term dollar amount spent on individual DoD components, appropriation titles, or programs.
A full expansion of O&M obligation authority to multiple years would limit Congress’s ability to control how much is spent from one period of time to the next. Many in Congress clearly view this ability as a core aspect of the oversight process.
That was from the Volume 3 (Part 1) of the Section 809 Panel report.
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