Reasons Programs Lose Funding

  • Scarcity of Financial Resources: Limits of the DoD topline may cause programs to be unfunded or funded at less than desired levels. Additionally, programs may lose funding as DoD attempts to balance competing priorities (for example, readiness and modernization.) Programs whose funding profiles absorb too large a share of a Component’s resources may also be vulnerable to cuts.
  • Questionable Need for Program: Failure to provide detailed justification for requested funding may cause decision-makers to misjudge the imporance of a program and reduce or eliminate its funds. Programs which duplicate efforts or capabilities existing elsewhere in DoD will usually be eliminated or consolidated. Programs to improve systems which will be retired in the near future are also vulnerable, as these resources can probably be applied to more lasting effect elsewhere.
  • Excessive Risk: Projects that involve high technological risk may be scaled back in the short term to allow technology to catch up. Programs that are being undertaken before clear needs or capability requirements have been identified are also likely to be eliminated or reduced.
  • Budget Review Issues: The four principle issue areas considered by OSD and OMB analysts during the review of the Component budget submissions are:
    • Program pricing
    • Program phasing
    • Funding policies
    • Program budget executability

Of the four major issues above the greatest concern, since “excess” funds identified during the budget scrub can be used to finance other requirements that ended up just below the “cut line” due to their priority status. This enables DoD to use its funds efficiently, stretching its limited dollars to address as many requirements as possible.

Impact Statements and Reclamas
Well-written impact statements and reclamas clearly and succinctly state the program’s position in an attempt to either avoid or minimize the effects of proposed budget cuts.

  • Impact Statement: An impact statement is an assessment of the effects that a budget cut will have on a program. Impacts may include work that will not be accomplished or will be slipped to a future year, cost growth due to program delays, adverse impacts on system users, etc. Such budget cuts may already have occurred or may be under consideration.
  • Reclama: A reclama is an attempt to head off a proposed budget cut by explaining why the proposal should be changed or eliminated. As such, a reclama often includes an impact statement

AcqLinks and References:

Updated: 7/13/2017

Print Friendly, PDF & Email