The House (315-107) and Senate (81-14) overwhelmingly passed the conference agreement on the FY2013 Defense Authorization bill this week.  The bill now goes to the president.

The annual Defense Authorization bill authorizes force levels, programs, and policies (including military pay raises) for DoD budgets.  Appropriations bills provide actual funding for DoD.

House Armed Services Committee (HASC) chairman Rep. Buck McKeon (R-CA) said he is confident that the bill “prepares our nation for the challenges of a dangerous and ever-changing world” and “upholds the strongest tradition of Congressional oversight, while providing value to the taxpayer and strength and agility to the warfighter.”

Senate Armed Services Committee (SASC) Ranking Republican Sen. John McCain (R-AZ) lauded the bipartisan efforts of the SASC and the HASC.  He also saluted the years of “dedication and hard work” of Sen. Carl Levin, who is stepping down as chair of the SASC at the end of the session.

The FY2013 Defense Authorization bill authorizes $525.3 billion for the base Department of Defense discretionary budget and $88.5 billion for Overseas Contingency Operations in FY2013.  Another $17.8 billion is provided in the bill for the Department of Energy’s nuclear weapons program.

The bill approves the 1.7 percent military pay raise proposed by the president and approved in the House bill.  Regarding the future of military compensation, the bill establishes a “Military Compensation and Retirement Modernization Commission” to review the compensation and retirement systems to ensure the long-term viability of the all-volunteer force and continuing a high quality of life for military families. 

The bill rejects the administration’s proposal to set enrollment fees for TRICARE Standard and TRICARE for Life, but would allow a small increase in the TRICARE pharmacy co-pay.  Future increases in the pharmacy co-pay are limited to no more than the cost of living allowance increase for retirees.  The bill establishes a five-year pilot program requiring TRICARE for life recipients to refill prescriptions through TRICARE mail-order.

The bill would reduce civilian and contractor personnel by five percent over five years, aligning civilian workforce cuts with the five percent cut in military strength through 2017.  The Secretary of Defense is given the flexibility to phase in these reductions and exclude critical elements of the workforces.

The conference agreement rejects an administration’s plan to retire 18 Air Force Global Hawk Block 30 UAVs and retains three of the four Navy cruisers requested for early retirement.  The bill also stops the retirement of 26 C-5A and requires the Air Force to retain 32 more C-130 or C-27J tactical airlift aircraft to meet the Army’s requirements.  Under the bill, total strategic aircraft are held at 301 until completion of a DoD study of air mobility requirements.

The bill supports the budget request for many major investment programs including:  CH-47 and UH-60, and AH-64 Block III helicopters; Army’s Ground Combat Vehicle and STRYKER programs; and F-35 (JSF) and F/A-18E/F aircraft.  The bill approves multiyear procurement authority for V-22, Virginia-class submarines, and Arleigh Burke-class destroyers.  The bill would allow incremental funding for another Virginia-class submarine in 2014 and allow the Navy to incrementally fund Ford-class aircraft carriers over six rather than five years.

The military construction authorization request is reduced by $660 million in the bill.  Funding for incrementally-funded construction projects is cut by $200 million.  The bill prohibits funds to realign Marine Corps forces from Okinawa to Guam until DoD submits a plan showing the costs and schedule for all projects needed to meet the plan.

The bill requires DoD to achieve an auditable statement of budgetary resources in 2014, which is the goal set by Secretary Panetta.  Cost-type contracts for major weapon systems production are prohibited under the bill, except for some limited exceptions.  The conferees rejected the Senate bill's proposal to cap contractor salary levels allowable under government contracts at $230,700 (down from the current level of $770,000).  Rather, the final bill directs a study of contractor compensation.