National Defense Authorization Act: Post-Election Outlook

Nov 4, 2022

When Congress returns after the November 8 election, there will be a narrow window for legislative activity before the end of the year. Complicating the policymaking landscape further is the likelihood of a new partisan dynamic when the 118th Congress convenes in January.

Though an institution that many associate with gridlock, Congress has shown a predictable ability to resolve or set aside partisan squabbling in order to authorize spending in support of the U.S. military. Indeed, Fiscal Year (FY) 2023 will mark the 62nd consecutive year that the National Defense Authorization Act (NDAA) becomes law. The measure is one of the few must-pass annual legislative vehicles, as it directs funding for the Department of Defense (DOD) and national security programs within the Department of Energy (DOE) and other agencies. The NDAA’s must-pass status also makes it a popular target for unrelated legislative measures, such as authorization for the State Department, the Maritime Administration, the Coast Guard and the Water Resources Development Act, as is the case this year in the Senate’s FY 2023 NDAA bill.

In July, after sorting through hundreds of amendments and multiple hours of debate, the House of Representatives approved their version of the FY 2023 NDAA, which authorized $840.2 billion in national defense spending. In October, the Senate Armed Services Committee replaced the House-passed text with a new version of the bill, which included 75 accepted amendments from a list of over 900 that were submitted. This measure would authorize $846 billion in defense spending. A Senate floor vote on this bill is unlikely, given the timing constraints they face when Congress returns. Even without that vote, the Senate’s action from October serves as an instrument to negotiate the bill’s provisions during a legislative conference with the House of Representatives, and congressional staff have been busy on these provisions even while their bosses are in campaign mode and largely outside of Washington, DC. Legislators will have to iron out their differences during the lame duck session, and the level of authorization could rise even higher to fund varied priorities and win enough support to move a final bill before this Congress adjourns in December.

FY2023 NDAA Trends:

  • Russia and China: Much of the NDAA’s spending priorities include countering threats from China and Russia, as well as strengthening strategic competition with the two countries.
  • Ukraine and Taiwan: The measures increase U.S. assistance to the island of Taiwan, to counter threats from China, and assistance to protect Ukraine from Russia.
  • Increased Pay: With an eye toward the eroding impact of inflation on military wages, the bill currently gives a 4.6 percent pay raise for service members and directs the DOD to pay an inflation bonus to active duty personnel.
  • Health provisions: The bill currently includes provisions to help address PFAS, or “forever chemicals,” contamination and their health impacts on service members and communities.

NDAA Funding Opportunities:

Although the NDAA only authorizes funding for national defense programs, and appropriations must follow, historically, the measure has indicated congressional intent on discretionary funding for relevant activities. The House and Senate measures reflect authorization levels between 4.6 percent and 5.6 percent more than President Biden requested. The NDAA is closely watched by a broad array of stakeholders and interest groups due to the enormous projects this legislation identifies for annual funding. Outlined below are top line funding authorizations for FY 2023.

House Bill (HR 7900):

  • $160.2 billion for procurement: This includes additional funding for Navy ships and aircraft; Air Force aircraft; and Army weapons, tracked combat vehicles and missiles.
  • $138.64 billion for research, development, test and evaluation activities. Among other items, the Defense Department would be required to establish a pilot program to provide grant funding to historically Black colleges and universities and other minority-serving institutions to enhance their research capacity in areas of interest to the DOD related to STEM and critical technologies. An additional provision would direct the DOD to ensure that noncompetitive contracts awarded to educational institutions for certain engineering or research capabilities include a requirement to subcontract with one or more minority institutions for at least 2 percent of awarded amounts, starting October 1, 2026.
  • $16.47 billion for military construction and family housing projects.
  • $274.27 billion for operation and maintenance: This would include a transition of non-tactical vehicle fleets to electric non-tactical fleets by January 1, 2025.
  • $30.5 billion for Energy Department national security programs, including $22.1 billion for the National Nuclear Security Administration and $8.21 billion for environmental cleanup and other defense activities.
  • As much as $253.5 million could be used to acquire specified strategic and critical materials for the National Defense Stockpile.
  • $685 million of transportation and infrastructure funding is reserved for port infrastructure development activities, including grants.

Senate Bill (S 4543):

  • $157.98 billion for procurement with additional funding for Air Force and Navy aircraft, Army missiles and Navy ships.
  • $137.75 billion for research, development, test and evaluation activities. An additional provision would also authorize DOD to contract with one or more federally funded research and development centers to study the proposed reorganization of the Space Force.
  • $17.33 billion for military construction and family housing projects.
  • $179.76 billion for military personnel, including $50 million for local educational agencies affected by the enrollment of dependent children of military members and DOD civilian employees, $10 million for impact aid payments for children with disabilities and $10 million for local educational agencies that have higher concentrations of military children with severe disabilities.
  • $29.7 billion for Energy Department national security programs, including $22 billion for the National Nuclear Security Administration (NNSA); $6.53 billion for defense environmental cleanup; and $978 million for other defense activities.

As Congress continues its annual NDAA authorization process, these funding levels could shift as the two chambers iron out the bill’s provisions.

This is not intended to be an exhaustive list of 2023 NDAA provisions, but rather a snapshot of potential funding opportunities for industry stakeholders and interest groups, particularly in BPAG areas of expertise. If you are interested in discussing these opportunities further with a BPAG professional, please contact us.