A Defense Department study to determine an improved rule for contract financing is on hold until the fiscal year 2020 defense budget negotiations have been completed, a senior acquisition official at the Pentagon said Dec. 2.
The department hopes to soon begin the congressionally directed study and have an approved rule within one year, Assistant Secretary of Defense for Acquisition Kevin Fahey said during a Monday media roundtable at the Pentagon. “We haven’t kicked it off because it’s a budget thing, we need money to start it,” he said.
About one year ago, the department was directed by lawmakers to “get back to doing more performance-based payments,” Fahey said. As part of that effort, the Government Accountability Office conducted an assessment that ultimately urged the Pentagon to study new ways to provide progress payments to contractors.
“The world of finance has changed,” Fahey noted. While DoD must wait for Congress to approve the FY ’20 budget to start the study, he said the department is ready to move forward as soon as funding is appropriated. “We really do know how we’re going to do it. We have asked industry and Congress for input to it, and we intend to have them” involved in the process, he said. “My expectation is, one year from now, we would have submitted what we believe the rule is to adjust it, if that’s what the study says.”
Congress most recently approved a continuing resolution to run through Dec. 20, but Republicans and Democrats in the House and Senate continue to negotiate on final versions of the FY ’20 National Defense Authorization Act, as well as multiple FY ’20 appropriations bills, including those for defense, homeland security and energy and water.