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Feb. 15, 2011Air Force officials used the rollout of the Pentagon's $553 billion Fiscal 2012 budget proposal to lobby Congress once again to approve a spending bill for Fiscal 2011. They reiterated earlier comments by senior defense leaders that another extension of the existing continuing resolution will cause program delays, drive cost increases, and force the service to put off meeting some requirements until Fiscal 2012.

"We need an appropriations bill in Fiscal 2011," said Maj. Gen. Alfred Flowers, the Air Force's deputy assistant secretary for budget. He added, "Operating without it is limiting our capability to respond to emerging requirements. It's restricting investment programs, as far as new starts and production increasing. It's causing us to defer contracting on military construction projects."

The 111th Congress failed to approve a Fiscal 2011 appropriations bill before it adjourned in December, opting instead to renew the CR, which forces the department to operate at Fiscal 2010 spending levels until March 4—six months into the fiscal year. If the CR is extended for a full year, it likely will force DOD to operate with about $23 billion less than what it submitted as part of President Obama's Fiscal 2011 budget, said Flowers.

The service's piece of that $23 billion is roughly $7 billion, of which $4.6 billion will come from operations and maintenance, $1.2 billion from the military personnel account, another $1 billion from the service's share of defense healthcare costs, and roughly $250 million from joint and coalition support programs, said Flowers.

Continuing the CR also prohibits the department from initiating new start programs—such as installing active electronically scanned array radar systems on F-15 fighters. Because the budget released Monday is based on the assumption that Congress will pass some type of spending bill for the remainder of Fiscal 2011, failure to begin planned new starts could cause major disruptions in Fiscal 2012, said Marilyn Thomas, budget deputy in the Air Force Secretariat.

Thomas warned that a delay in the F-15 AESA program could lead to grounding "some aircraft in the future." However, she said, it's not clear how many aircraft would be grounded or how long the iron would hold out if the AESA program veered off schedule.

"At this point, we don't have any idea … it's just a concern and we are doing risk mitigation," she said.

The Wide-band Global Satellite Communications system is another program of concern under a year-long continuing resolution. The Air Force was slated to award a contract the end of January and has been working with the contractor to negotiate an extension that would lock in the current pricing until an appropriations bill is approved. Eventually, though, it's going to become too difficult to "float subcontractors" and prices are likely to go up, Thomas acknowledged.

Officials said they are still hoping to award the long-awaited KC-X tanker contract in the coming weeks, saying there is enough flexibility under the continuing resolution to award the contract because it is not a new start. Outside budget experts, however, seem to disagree, saying last week that there is not enough funding under the stopgap spending measure to award the full contract.

"There are no restrictions to awarding the KC-X contract because it is not a new start and [the] research and development limit is at appropriation level under CR," Air Force spokesman Andre Kok told the Daily Report in response to a query. It's not clear, however, if the Air Force will have to award the contract incrementally if forced to continue operating at Fiscal 2010 levels.

Even though the 111th Congress adjourned before approving a Fiscal 2011 spending bill, it did approve a 1.4 percent raise for troops in the current fiscal year. That means the Defense Department is paying $1.2 billion more than has been appropriated to troops in Fiscal 2011.

"We'll have to do some reprogramming out of investment programs or some other programs if we don’t get an appropriation bill that is funded or some language added on to the CR" giving the department flexibility to move funding between accounts,  said Flowers.

The Air Force already has had to do some reprogramming for the C-5 Reliability Enhancement and Re-engining program and the Global Positioning System Block III satellite program "because of contract awards that had to be made" to prevent delays and cost hikes, Flowers said. Another reprogramming request for the Joint Air-to-Surface Standoff Missile and its extended-range variant, JASSM-ER, has been submitted to the Hill, he added.

"These things are happening," said Flowers. "It won't get better as time goes on."

Military construction also will take a hit if an appropriations bill is not approved soon. By March 4, when the current CR expires, the Air Force will have to delay nearly 40 military construction projects for which it had intended to award contracts in this fiscal year. If the CR is extended for a full year, that number will jump to 75.

As of last week, 20 of the 36 award dates had already passed and another 16 will pass before March 4, Flowers said.