(Editor’s note: The AUSA Hot Topic forum on Army contracts was held April 26. On May 4, seven months overdue, Congress finally passed a $1.07 trillion fiscal 2017 omnibus spending bill. The president signed the measure into law on May 5.)

The inability of Congress to pass an appropriations budget, instead keeping the government running on a continuing resolution (CR), hurts both the Army and the defense industry, experts said at the Association of the U.S. Army’s Hot Topic forum on Army contracts.

The U.S. military is dealing with one of the longest CR periods in history, said Lt. Gen. Karen Dyson, military deputy to the assistant secretary of the Army, financial management and comptroller.

“This is the eighth consecutive year we’re operated under a CR,” and the unpredictable and uncertain fiscal environment is limiting the Army’s ability to build readiness, she said.

Operating under a CR makes it “very challenging to plan” both for the current year and future years, Dyson said. Additionally, the Budget Control Act of 2011 created the threat of sequestration, which could force indiscriminate spending cuts across the Army.

When President Trump came into office, he issued a memorandum asking the Department of Defense to “assess readiness conditions” and provide a report, Dyson said.

That report became a request for additional appropriations, designed to do two things: improve warfighting readiness immediately, and start setting conditions for long-term rebuilding of readiness capability. In the near term, this will mean spending a lot of operation and maintenance dollars in the areas of depot maintenance, training facilities, and weapons systems sustainment, Dyson said.

Kim Denver, senior vice president and chief corporate contracts executive for Leidos, said the defense industry looks at budget predictability in terms of resource management.

“It’s about how we are postured to support [the Army],” Denver said. “The more advance notice we have, the more communication is facilitated” which means the Army’s needs are met faster and with less expense.

Companies in the defense industry want budget certainty because they are accountable to investors and Wall Street, said retired Brig. Gen. Jamey Moran, vice president, Army systems, The Boeing Company.

“They want to see predictability in revenue and profits, and if the government’s not stable, they’ll take their money elsewhere,” he said.

He added, “And why should the government care about that? Because [the military] wants a healthy defense industry.”

Boeing, for example, has had to cut more than 30,000 employees in the last eight years, and there is competition for labor in the science and engineering arenas, he said. “If we don’t have good programs and predictable funding, we’ll have difficulty attracting young smart people to come to our industry – and that hurts the Army too.”

Louisa Jaffe, president and CEO of Technical and Project Engineering (TAPE), LLC, reiterated the importance of two-way communication between the Army and the defense industry.

“I think the contracting side has an opportunity to really help, but we have to know what exactly it is the Army wants,” she said.

The Army is trying to reduce the burden of doing business with the government, said Brig Gen. Michael Hoskin, acting deputy assistant secretary of the Army (procurement) and assistant secretary of the Army (acquisition, logistics and technology).

For example, he said, there are 341 clauses and conditions in a SAT (simplified acquisition threshold) contract. “When you have 341 clauses, what does simplified mean?” he asked.

The Army needs to streamline across the board by moving closer to industry standards, Hoskin said, adding “Wish us luck.”