FY14 Federal Budget Pares GPS Appropriations

The GPS program sustained a cut of more than six percent from the levels in the president’s proposed budget for Fiscal Year 2014 (FY14), increasing the likelihood that the Next Generation Operational Control System (OCX) will be delayed and putting pressure on budgets in future years to make up for cuts to modernization efforts.

Congress made combined reductions of $67 million in GPS-related Department of Defense (DoD) line items out of a total White House request for $1.276 billion — some 5.3 percent. The depth of the cut jumps a bit, however, when cuts in the civil contribution to GPS are taken into account.

The Obama administration had asked for $20 million for the Department of Transportation’s (DoT’s) payment into the GPS program — money that goes primarily toward upgrading the ground segment and support for new civil signals. Lawmakers in the House cut the civil request entirely while those in the Senate gave the budget item a mere 25 percent haircut to $15 million.

In the end, House lawmakers appear to have persuaded their Senate colleagues to adopt their point of view, holding the civil contribution to just $6 million for fiscal year 2014. When the civil contribution is taken into account, the total reduction in appropriations for GPS is over six percent.

The main effect of the shortage in civil money will be delays in work on the OCX, which is integral to benefiting from the capabilities of the GPS Block III satellites and new civil signals.

“The impact of the reduced civil contribution to OCX will slow software development and testing,” the U.S. Air Force said in a written response to a question from Inside GNSS about the significance of the cuts. “However, the impact is recoverable,” they said, “if appropriations over the next two years fulfill the agreed to funding commitments.”

The prospects for full restoration of civil funding, however, seem dim. The budget line has been cut repeatedly since 2011 with the request more than halved for the last two years. From an original plan that should have seen $40 million or more contributed each year by the civil community, Congress allocated only $19 million in both 2012 and 2013 out of a $50.3 million and a $40 million request, respectively.

DoD, DoT Differences on Civil Funds
A further complication arises from a very long — and so far unresolved — back-and-forth between the departments of defense and transportation over what exactly the civil money is to pay for. Without clarity on what civil appropriations buys and what the likely consequences of further cuts would be, the chances that Congress will be convinced to support more funding appear sharply reduced.

“DoT looks forward to continuing to provide input on GPS requirements from the civil sector to the Air Force,” the agency said in written response to Inside GNSS. “DoT will work with DoD to assess programmatic and schedule impacts to ensure that we continue implementation of the civil signal monitoring requirement.”
The Pentagon is in a tougher spot this year with regard to its own funding and will be less likely to be able to make up any deficiencies. Although the congressional authorizing committees approved the entire White House request for GPS, the appropriators cut everything but procurement of the GPS IIF satellites — $56 million. The request for GPS III procurement was cut by $27 million to $450.6 million. Also downsized was the request for GPS III development — trimmed by $20 million to $201.3 million.

“The impacts from the FY 2014 Consolidated Appropriations Act reductions to the GPS program are consistent with efficiencies across the space portfolio,” said the Air Force. “The $67M in cuts to the GPS Enterprise are targeted at a variety of programs with varying impact. The most significant reduction is to the procurement of long lead items. Although not likely to delay production, it will defer these costs to future years.”

Slowdown in GPS Modernization?
The exact reasons for the cuts are unclear. The House said the advance procurement money for the ninth GPS III spacecraft and beyond was “ahead of need.” It gave a similar reason for its proposed cut from GPS III development. The Senate was “eliminating program management growth,” citing a desire to “maintain program affordability.” The explanation accompanying the final budget agreement used similar language to describe the decisions. The House and Senate committees did not respond to queries about the decisions by press time.

The financial decisions may hint at a further slowing of GPS modernization. Defense managers were already replacing satellites on an as-needed basis, launching only when one of the famously long-lived GPS satellites started to fail.

The anticipated mission duration of each of the 19 IIR and IIR-M satellites is now expected to be longer by one to two years as a result of revised battery-charge control rates. Those satellites make up more than half of the current constellation. Although budget-smart, delaying launches also delays modernization at a time when other, potentially competing, DoD constellations are coming online.

Independent sources have confirmed that finding savings is a top priority, a point underscored by military officials.

“Due to fiscal realities, the Air Force has implemented cost saving measures while continuing modernization efforts across the GPS Enterprise,” the Air Force told Inside GNSS. “Furthermore, the Air Force is maintaining our commitment to National Security users and the larger civil community for a baseline GPS satellite constellation requirement of 95% functional availability of a 24-satellite constellation. The Air Force works with OSD (the Office of the Secretary of Defense) and Congress to ensure the GPS enterprise continues to be adequately funded to meet these requirements.”

Caught in the middle is the National Coordination Office (NCO) for Space-Based Positioning, Navigation, and Timing (PNT), a key hub for working through interagency GPS issues. The NCO gets its funding from both DoD and DoT and has already taken budgetary hits over the last several years.

“We suspect we’ll have to deal with smaller budgets like all the other departments,” said Acting NCO Director Col. Harold "Stormy" Martin, although “all the ramifications” of the 2014 budget “have not played out.”

The budget pressures driving the cuts will continue, said federal budget expert Stan Collender, although improvements in the overall federal deficit outlook should reduce the pressure to ratchet spending down beyond what is already planned through measures such as “sequestration,” which lasts through 2021.

“The best way to look at this is that where these programs are now, for the most part, is where they are going to be for the next five years,” said Collender, who is national director of financial communications for Qorvis Communications.

“In general what you would expect on appropriations, defense and domestic, is that there is going to be a lot of pressure on all spending programs,” Collender told Inside GNSS. “Some will do a little bit better, some will do a little bit worse, but there is not a big windfall in additional cash coming anytime soon. And I mean through 2020. So you're going to find a lot of programs squeezed, and squeezed and squeezed again over the next five years.”
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