That would be the largest increase in nearly four decades for the U.S. government’s 2.1 million civil service employees.

“Federal employees are dedicated and talented professional public servants, often working demanding jobs,” the budget reads. “To continue to deliver for the American people in the 21st Century, the Federal Government must win the competition for highly-skilled talent.”

As is custom, each year the White House unveils the president’s funding requests for agencies and programs, offering a detailed look at priorities for the upcoming year to kick off the budget cycle. Pay raises for federal and military personnel are always highly anticipated, especially this year with inflation widening the double-digit wage gap between the public and private sector, and with agencies still reeling from staffing struggles exacerbated by the pandemic’s increased demand on public programs.

Biden’s proposed raise sets only a baseline, which is likely to change as Congress debates it in coming months. Federal unions and some lawmakers were hoping for more. They said an increase of 8.7%, as called for by the Democrats’ FAIR Act, would go further to make federal salaries competitive, especially for high-demand jobs in cybersecurity, health care and IT.

Last March, the federal budget proposal included an average pay increase of 4.6% for civilian federal workers, matching a planned military pay raise.

Other initiatives

The budget sets intentions to invest in the civilian workforce in other ways. To invite diverse applicants to federal jobs, the White House wants agencies to base hiring practices on skills rather than educational qualifications alone. It also directs agencies to consider beefing up paid internships.

To help with those goals, the budget supports expanding the Office of Personnel Management’s Hiring Experience Office. It provides $464 million, $78 million over the 2023 enacted amount, for OPM’s salaries and expenses account to ensure it can serve the government’s various HR needs.

The budget also provides resources to improve personnel vetting under the Trusted Workforce 2.0 plan, which is a policy framework coupled with technology to better background investigate job candidates and issue security clearances. In 2019, 2.9 million government employees and private sector contractors held a federal security clearance.

The Biden administrative also repeated its opposition against Schedule F and attacks on worker protections and unionization.

Improving customer experience

Improving the way the public interacts with agencies and the way agencies work with each other is another theme of this year’s budget proposal.

The budget requests an additional $200 million for the Technology Modernization Fund, which gives agencies a pool of money and resources to improve crumbling IT systems.

To ensure there are enough employees to deliver public services, the budget also wants to expand customer experience offices at nine high-volume departments, including the U.S. Departments of Agriculture, Commerce, Homeland Security, the Interior, Labor, the Treasury, Veterans Affairs, the Small Business Administration and the Social Security Administration.

That includes hiring more than 120 full-time workers with customer experience skills and incorporating public feedback and data in a “Voice of the Customer”program at seven agencies.

Biden also proposes a pilot program at the Transportation Security Agency to embed customer service officials in the traveler screening process to solicit public feedback. Other pitches include self-help passport renewal at the Department of State and online tax services at the IRS. Shared platforms used by multiply agencies are also a way services can be streamlined and workflow and data silos can be consolidated.

With regard to the $600 billion the government spends a year on contracts, the Biden administration wants to steer its procurement dollars toward small disadvantaged businesses. The goal remains for 15% of federal contract dollars to go to these enterprises by 2025.

Finally, the budget also wants contract dollars to promote environmental initiatives in and out agencies. Biden set a goal for carbon pollution free federal electricity by 2030, zero-emission vehicle acquisitions by 2035 and net-zero emissions in federal buildings by 2045.

How pay raises work

By law, federal employees’ salaries are set at a level “equitable and comparable” with similar levels of work in the private sector, unless the president proposes alternative federal pay rates. It’s not clear based on the budget what the breakdown will be between the across-the-board raise and locality pay.

Normally, under the Federal Employees Pay Comparability Act of 1990, law requires a default adjustment each year if the president takes no action.

The president has authority to circumvent the automatic rate set by the Pay Agent, which includes the directors of the White House Office of Management and Budget and Office of Personnel Management, as well as the secretary of labor.

On Thursday, the NNSA quietly put a notice of a sole-source contract up on the FedBizOps website, to “award a short-term sole source contract to MITRE Corporation to provide management and logistics support to the Jason program and its members, referred to as ‘The Jasons.’”

In essence, NNSA seeks to recreate the Pentagon’s contract with the advisory group through the end of next January, in order to keep key research from falling apart.

“NNSA has issued a notice of intent to award a short-term sole source contract to MITRE Corporation to provide management and logistics support to the Jason program and its members through January 31, 2020,” agency spokesman Gregory Wolf told Defense News.

“JASON is a group of elite scientists and engineers who advise NNSA and the United States Government on matters of science and technology, mostly of a sensitive nature, and has provided significant contributions to NNSA’s mission of ensuring a safe, secure and reliable nuclear stockpile and preventing nuclear weapon proliferation around the world. NNSA cannot afford a contractual gap in the services MITRE provides.”

The Jason program dates back the 1950s, when the Pentagon put together a panel of scientific experts to provide outside advice. That contract is now managed by the MITRE group, and run through the Pentagon’s undersecretary of research and engineering.

According to a 2006 book written about the group, the panel played major roles in developing, or lambasting, technical ideas for the department, including pushing to sign the Comprehensive Test Ban Treaty on nuclear weapons and a controversial stretch of ideas during the Vietnam War. Much of their work, however, has been classified.

The latest contract for the group’s work existed under an indefinite delivery, indefinite quantity contract, which allowed for an unlimited number of deliveries over a fixed time period. That contract was between the Pentagon’s undersecretary of research and engineering and the MITRE corporation.

However, that contract was allowed to expire on March 31, with a final tasking order set to expire at the end of April. The Pentagon has said the move was made as a cost-saving measure and that the open-ended nature of Jason no longer makes sense.

And while the DoD said it intends to still use JASON for one-off contracts, critics have said that the financial setup for the panel requires a constant stream of work and that attempting to do piecemeal studies will lead to the closure of the group.

The NNSA’s plan to keep JASON alive came together quickly, in just the last few weeks. While there will be some sort of gap between when the Pentagon contract expires and NNSA can get theirs off the ground, it is not expected to be a large gap in time.

The NNSA contract would mirror the ID/IQ nature of the Pentagon’s legacy contract. Meanwhile, the agency will use the time to “perform market research to determine a long term strategy for obtaining JASON scientific support services,” an indication that alternative solutions may be an option.

The cancellation of the Jason contract came to light during a hearing featuring NNSA head Lisa Gordon-Hagerty, who said she had asked her staff to look into what the Pentagon’s cancellation of the contract would mean for her agency.

“I found their reports to be fulsome and the members of JASON to be knowledgeable about issues associated with our programs at NNSA,” Gordon-Hagerty said during that hearing, when asked if the agency had benefited from the advisory panel.

The agency currently has three studies being considered and planned with Jason, related to “cyber security of operating equipment, nuclear detonation detection, and plutonium aging,” according to Wolf.

The Section 809 Panel on Tuesday released its third and final volume of recommendations to streamline the Defense Department’s lumbering acquisition bureaucracy. In 500-plus pages, it emphasized changes to revamp the way the military buys commercial products, information technology and major weapons programs, among other far-reaching ideas.

When panel members on the hunt for ways to make the acquisition process more accessible visited one Silicon Valley firm flying under the Pentagon’s radar, the members were alarmed to learn a Chinese delegation had visited only a week before, offering to buy the company’s production capability, if not the company itself.

“These are companies that the United States I guess knows about at some level, but the Department of Defense didn’t know existed, they weren’t interested and wouldn’t know how to do business with them,” Section 809 Panel Chair David Drabkin, a former General Services Administration official, said at Tuesday’s rollout event.

“The whole focus is to speed up the process to deliver what the war fighter needs,” Drabkin said of the panel. “We’re at war. We won’t declare it, but there’s a cyberwar going on. And the Chinese and the Russians are beating us, and they’re buying stuff we don’t even know about, but in some cases we invented.”

Since its launch two years ago, the panel has made 98 recommendations — some of which have been synthesized by Congress into the 2019 defense policy law. The effort — just the latest in a long line of acquisition reform efforts — has worked closely with Capitol Hill all along, and Drabkin was optimistic many of the recommendations, while bold, would be adopted by the congressional defense committees.

With an eye toward rapidly buying cutting-edge capabilities for troops to address emerging threats, the panel would create new acquisitions categories under a “Dynamic Marketplace Framework.” The framework would separate defense-unique development and replace commercial buying procedures with new procedures for “readily-available capabilities” and capabilities that are “readily available with customization.”

The idea is to give Pentagon officials more latitude to buy “the most up-to-date products and services in the least amount of time possible from the open, accessible marketplace, including nontraditional and other private-sector suppliers,” according to a summary.

Panel member Ross Thompson, a former Army acquisitions official and industry executive, spoke passionately about the need for Pentagon and congressional leadership to quickly adopt the panel’s recommendations.

“Time to me today is turning faster than the Chinese and the Russians,” Thompson said. “If we can’t turn faster than they do, we’re going to have people killed the next time we have a conflict. … Our sons and daughters are going to be affected by the inability to speed this process up without sacrificing quality and sacrificing cost.”

Protecting against budget chaos

The panel also made a series of recommendations for Congress to grant Pentagon acquisitions officials more spending flexibility — both to protect against Capitol Hill’s budget chaos and dysfunction and to speed the acquisitions process.

Congress’ late budgeting has normalized stop-gap continuing resolutions that might keep the government running but bar funding for new-start programs, production rate increases and multiyear procurements. The panel recommends voiding those prohibitions.

“Current rules limit the flexibility of DoD’s acquisition workforce in dealing with the realities of the marketplace such that near-peer competitors and nonstate actors have a decided innovation advantage,” the summary argues.

Of the 12 recommendations in this area, one most likely to make waves is to increase the threshold for reprogramming requests that need congressional approval relative to inflation. The $20 million threshold for procurement and $10 million threshold for development programs would both double, according to panel member Allan Burman, a former administrator for federal procurement policy.

Another recommendation would delegate that below-threshold reprogramming decision authority down to portfolio acquisition executives.

Those recommendations aren’t intended to weaken Capitol Hill prerogatives, according to Burman, but just how protective appropriators will be of their authorities remains to be seen.

“Our prime recommendation, it goes without saying, is to pass the budget on time,” Burman said. “We haven’t for a number of years been too successful at that.”

Speaking at the Farnborough Airshow on Monday, two top A&S officials — Assistant Secretary of Defense for Acquisition Kevin Fahey and Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy Eric Chewning — previewed a few of the big changes to come out of the reorganization effort.

The Pentagon’s legacy acquisition, technology and logistics office split into two new offices on Feb. 1 (the undersecretaries of Research and Engineering; and Acquisition and Sustainment, the latter a title held by former Textron executive Ellen Lord. However, both offices had to submit their plans for a redesign of the various assistants and deputies to Shanahan for approval.

Click here for more from the Farnborough Airshow!

Big changes are coming to the Manufacturing and Industrial Base Policy office headed by Chewning. The manufacturing aspect, including the Department of Defense Manufacturing Technologies (ManTech) program, is being split off and heading to the R&E side, while the Office of Small Business Policy is being folded into the newly rechristened MIBP team.

“Given where we are right now in the world there’s a real need to get back to what I’ll call a real industrial policy capability within the Pentagon, to address the sorts of problems that we know we’re going to face going forward,” Chewning said.

He called it a “back to the future” moment to focus on “core competencies” at a time when the defense-industrial base is under constant attack from abroad, as well as the need to innovate at home.

“In the past our industrial policy essentially was our acquisition policy. It was what we bought and how we bought it,” Chewning said. “What I’d like to be able to do is get out in front of that and think about how do we help inform acquisition policy with an industrial policy in support of our modernization objectives.”

Chewning will also keep oversight on the CFIUS foreign investment rules and manage merger and acquisition attempts, among other existing authorities.

Under the reorganization, Fahey’s main focus will be on what he calls “portfolio management” of major weapon systems and ongoing programs. However, he will have far fewer systems to focus on than in previous years; as part of the split of AT&L, oversight of all but 11 major defense programs have been delegated down to the armed services.

He will also have a new deputy-assistant-secretary-of-defense-level office, focused on “acquisition enablers.” In essence, it will be focused on getting things done — defining commercial items to help companies come into the Pentagon, sort out intellectual property issues and keep track of what contracting methods, such as Other Transaction Authority, are successful.

In addition, the Defense Acquisition University will report up to Fahey, with a greater emphasis on real-world education and less on compliance.

“As you can imagine, reform is our focus is how do we change to be able to deliver capabilities at the pace of innovation,” he said.

The proposal announced Sunday includes a combination of CACI common stock and cash, totaling $44 per share ($29 CACI stock, plus $15 cash).

The founder of government contracts consulting and legal firm McAleese & Associates, Jim McAleese, noted this is an 8 percent premium increase over the $40.75 all-cash-per-share agreement between General Dynamics and CSRA.

According to financial analysis firm Martin Wolf, the transaction value of CACI’s bid is $7.2 billion, edging out General Dynamics’ $6.8 billion proposal.

Although initial reports indicated General Dynamics would stick with its bid, a company statement released Tuesday morning announced an amended merger agreement. The new proposal will have GD acquire all outstanding shares of CSRA for $41.25 per share in cash, an increase from the original $40.75 per share offer.

Following this increased offer, the transaction is now valued at $9.7 billion, including GD’s assumption of $2.8 billion in CSRA debt.

In making the decision to stick with General Dynamics, “CSRA’s Board of Directors took into account various factors, including among others, the value, certainty of value, certainty of closing, and speed to closing of the General Dynamics offer, as amended, as compared to the CACI proposal” the statement says.

U.S. President Donald Trump tweeted a video following his visit to San Diego, California, saying that without a wall, “we’re not going to have a country.”

Chinese President Xi Jinping and the Chinese Communist Party are explicit about their desire for complete control of China’s economy, and foreign companies are regularly subject to the party’s often intrusive demands. When foreign companies seek to acquire a U.S. company, the CFIUS review process is voluntary or by the panel’s request. As a result, transaction participants have been able to skirt CFIUS authority. In order to protect America’s vital supply chains from foreign interference, regulations and laws governing CFIUS must be updated.

As illustrated by the recent acquisition of the United States’ only rare earth mine, foreign companies have found loopholes in the current CFIUS process. When MP Mine Operations LLC ― a Chinese-affiliated consortium including rare earth miner Shenghe Resources Holding Co. ― sought to acquire the only formerly operational U.S. rare earth mine, CFIUS, the very committee charged with evaluating deals of this nature, did not review the transaction, despite the fact that rare earth minerals are found in almost every major weapon system.

Proposed legislation in Congress aims to broaden the powers of CFIUS; moreover, this legislation provides an opportunity to scrutinize the very foreign investments that threaten to leave America reliant on China for critical military technologies.

Since it was established in 1975, CFIUS has not considered the long-term geopolitical implications that foreign investments in U.S. companies will have on the defense industrial base and on our military’s ability to fight — and win — wars. Not only is the United States the world’s largest recipient of foreign direct investment since 2006, but it is also the primary target of Chinese investment.

During the past 10 years, China’s investment in U.S. technology firms has amounted to approximately $35 billion. During this same time frame, foreign companies have continually evaded CFIUS scrutiny and threatened the United States’ technological advantage in a number of ways. For example, in 2012 a promising lithium-ion battery technology, developed in part with U.S. government funding, was sold to the Chinese conglomerate Wanxiang Group. Despite public concern that the acquisition would be used to supply advanced technology to the Chinese military rather than to American troops, CFIUS approved the acquisition with few reservations.

To prevent any further degradation of our military’s technological advantages, CFIUS must focus on the long-term implications foreign investment will have on the American defense industrial base.

CFIUS reviews hundreds of proposed transactions each year and recommends whether the U.S. president should prevent a transaction from being finalized. Over the 30 years of its existence, a U.S. president has prevented only five CFIUS-reviewed deals from being finalized. Two of those denials have happened under this administration.

Just this week, President Donald Trump blocked Broadcom Limited — a Singapore-based company tied to Chinese firm Huawei Technologies Co. — from acquiring Qualcomm Inc. Huawei and Qualcomm are the two dominant players in the market for next-generation wireless 5G. CFIUS was concerned that Broadcom’s links to Huawei, which many believe works primarily for Chinese government interests, and its hostile takeover bid of Huawei’s primary competitor would have given the Chinese company the lead in the race for 5G technology and forced consumers to turn to Hauwei or other Chinese companies for telecom gear.

The decision to block Broadcom from acquiring Qualcomm follows a presidential order last fall to prevent the acquisition of Lattice Semiconductor by a subsidiary of the state-owned China Venture Capital Fund Corporation Limited.

This rare uptick in blocked deals is promising and necessary to ensure American technologies are not easily sold to competitor nations. Unfortunately, these outcomes are rare exceptions in a long history of CFIUS reviews.

Recent legislation introduced by Sens. John Cornyn, R-Texas, and Dianne Feinstein, D-Calif., is an opportunity to strengthen CFIUS and ensure recent progress continues under future administrations. The “Foreign Investment Risk Review Modernization Act of 2017” would give CFIUS new tools to prevent mergers or acquisitions that could lead to the loss of technology critical to our military’s operations. This bill, the first to address the power and scope of CFIUS that Congress has considered in more than a decade, is an important opportunity to sharpen the national security focus of CFIUS and ensure that technology produced in the United States — and funded by U.S. tax dollars — is not surrendered to foreign entities seeking to take advantage of America’s open economic system.

In a period during which critical supply chains for U.S. military equipment and services are increasingly influenced or even owned by Chinese firms, CFIUS is one of the few tools America has to protect against foreign investments that may be designed more to weaken American national security than provide economic benefits. Accordingly, the need for a comprehensive policy that adopts a multi-decade, strategic view of foreign investment in critical technologies has never been more important. Without a holistic view of foreign investments and their long-term implications, CFIUS will fail to preserve the technologies needed to create disruptive, enhanced and enduring operational advantages over potential adversaries.

As the Department of Defense notes, “if we allow China access to [the technologies that enable our Third Offset strategy], then not only may we lose our technological superiority, but we may even be facilitating China’s technological superiority.”

Congress and the current administration seem aware of the dangers to national security posed by unrestricted foreign investment. Recent actions suggest that both are serious about taking a more holistic and long-term view of acquisitions of American technologies and manufacturers. Further codification and establishment of safeguards against hostile foreign acquisition should be strongly considered, lest we someday find ourselves overmatched on the battlefield by an adversary using our own technologies against us.

Jeff Green is the president of J.A. Green & Company, a government relations firm based in Washington, D.C. He previously served with the House Armed Services Committee and the Defense Department.