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The House on Thursday approved a House-Senate compromise bill that will force the Defense Department to cut about 36,000 civilian employees over the next five years.
Sen. John McCain, R-Ariz., originally proposed the measure in the 2013 Defense authorization bill that now requires a 5 percent cut in the agency's civilian workforce. It also requires a 5 percent cut in its contractor staff. The bill allows the Defense secretary to exclude critical positions — such as acquisition personnel and inspector general personnel — from the cuts, and to phase in the staffing reductions.
The Senate on Friday is expected to approve the measure, which clears the Pentagon to spend $631 billion in 2013 — $552.2 billion in base budget monies and another $88.5 billion on ongoing global wars and other operations.
The total amount is $1.7 billion above the Obama administration's 2013 Pentagon budget request.
The legislation also:
• Eliminates a Senate requirement that would have capped individual contractor salary reimbursements at $230,700 — the current yearly salary for the vice president. In its place, the final bill will have the Government Accountability Office study the potential effects of such a compensation cut on the department and contractors. GAO must also estimate the total number of contract employees whose reimbursable compensation exceeded the $230,700 threshold in fiscal 2010, 2011 and 2012.
• Requires the Pentagon to produce an auditable "statement of budgetary resources" by 2014. Two years ago, lawmakers ordered the Pentagon to have fully auditable books by fiscal 2017. Cleaning up the statement of budgetary resources — which shows the flow of money in and out of the department — is one of four steps needed to achieve that goal. Last year, Defense Secretary Leon Panetta volunteered to make the budget statement auditable by 2014; the new defense bill mandates that deadline. The 2017 target remains in place for the other three steps.
• Increases contracting opportunities for small businesses by, among other provisions, requiring the Small Business Administration to develop size standards that accurately define what is a small business in more than 1,100 industries. The requirement is intended to ensure that government contracts meant for small businesses do not instead go to large firms.
According to Rep. Sam Graves, R-Mo., chairman of the House Small Business Committee, the government has missed the goal of awarding 23 percent of contracts to small businesses for six years. The authorization bill seeks to enforce the goal by requiring that meeting small-business goals be part of senior agency employees' reviews and bonus discussions.
• Requires defense contractors cleared to access, receive and store classified information to rapidly report cyber intrusions on their information systems or networks. Reports to DoD must include a description of the technique or method hackers used to penetrate the contractor's network or system, a sample of the malicious software and a summary of any DoD information that may have been compromised. Upon request, contractors would have to provide DoD access to equipment or information needed to conduct a forensic analysis of the attack.
Any procedures DoD uses would need to "provide for the reasonable protection of trade secrets, commercial or financial information, and information that can be used to identify a specific person," the bill said.
• Underscores the importance of reducing the military's reliance on fossil fuels. Not included in the compromise bill, for example, is a House provision that would have generally barred funding for alternative fuels if the cost exceeded that of fossil fuels.
But the bill limits DoD's ability to spend 2013 Defense Production Act funds on biofuel refinery construction "until they receive matching funds from the Department of Energy and the Department of Agriculture," according to the summary of the bill. Lawmakers said the conference committee merely refers back to the original tri-agency biofuels funding plan, which they called "one-third, one-third, one-third."
Until the Energy and Agriculture departments provide their thirds, the Pentagon should not, Senate Armed Services Committee Chairman Carl Levin, D-Mich., told reporters.
• Amends current law to shield contractors from the financial burdens of replacing suspected and known counterfeit parts, if: the contractor is using a DoD-approved method to identify and avoid counterfeit electronic parts; the counterfeit part was provided to the contractor as government property; and the contractor notifies the government in writing within 60 days of discovering or suspecting that the government or its contractors have bought a counterfeit part.
• Restricts the Pentagon's ability to move forward with a controversial plan to expand the number of Defense Intelligence Agency covert military operatives to 1,600.
It is unclear how much of an increase that would be, since the current number of covert DIA operations is classified. As part of the proposal, these military clandestine operatives would conduct spycraft rather than just gather information to aid military operations.
firstname.lastname@example.org?subject=Question from AirForceTimes.com reader">Nicole Blake Johnson, John T. Bennett and Zachary Fryer-Biggs contributed to this report.