How DoD’s budget process keeps it on the wrong side of the ‘valley of death’

Here is a slice from an article by Jared Serbu recapping a discussion with Jerry McGinn and myself:

In fiscal year 1956, the Army didn’t ask Congress for a single dollar in its procurement budget. It didn’t need to. Back then, DoD’s budget accounts were apportioned in incredibly broad lump sums, and the dollars didn’t expire. So the Army could simply use $5 billion in unspent funds left over from the Korean War for all of its equipping needs that year.

 

Fast-forward 65 years, and each military service’s budget is made up of hundreds of different line items, each narrowed down into the range of tens of millions of dollars. Each “program element” is planned at least two years in advance, the funds vanish if they’re not used as scheduled, and only about 1% of the budget can be reprioritized during the year it’s actually being expended.

 

Somewhere between those extremes is a budgeting system that’s rational for the 21^st Century. That’s the gist of a new study by George Mason University’s Center for Government Contracting.

Interesting throughout, listen to the whole thing!