H.R. 1540: National Defense Authorization Act for Fiscal Year 2012

H.R. 1540

National Defense Authorization Act for Fiscal Year 2012

May 24, 2011 (112th Congress, 1st Session)

Staff Contact

Floor Situation

On Tuesday, May 24, 2011, the House is scheduled to begin consideration of H.R. 1540 under a rule.  The bill was introduced by Rep. Buck McKeon (R-CA) on April 14, 2011, and referred to the Committee on Armed Services.  The committee held a mark-up on May 11, 2011 and reported the bill as amended by a vote of 60-1.   The rule for consideration (H.Res. 269) provides for one hour of general debate, equally divided and controlled by the chair and ranking minority member of the Committee on Armed Services. Any other action on the bill, including the consideration of amendments, must be pursuant to a subsequent rule.  A summary of amendments made in order under an additional rule will be distributed after the rule is reported.

Bill Summary

H.R. 1540 would authorize appropriations for the Department of Defense (DoD) and for the national security programs of the Department of Energy (DoE) for Fiscal Year 2012.  This budget authority is intended to enhance national security through the procurement of materiel, the modernization of the Armed Forces, and continued funding for overseas contingency operations in Iraq and Afghanistan. 

The bill would authorize $553 billion for the Department of Defense’s base budget, $119 billion for overseas contingency operations, and $18 billion for the Department of Energy’s atomic energy defense programs.

The bill also contains a number of provisions concerning military personnel policy, education and training, military pay and allowances, acquisition policy and management, DoD organization and management, civilian personnel, and matters relating to foreign nations.

For FY2012, the bill would authorize: $111 billion for procurement; $15 billion for procurement to support overseas contingency operations (OCO); $75 billion for research, development, & testing (RDT&E); $171 billion for operation and maintenance (O&M); $90 billion for O&M supporting OCO; $142 billion for military personnel; $11 billion for personnel supporting OCO; and $40 billion for other authorizations.  Additionally, the bill would authorize $14.8 billion for military construction and $18 billion for DoE national security programs.

Military personnel end strength: The bill would authorize cuts to the armed forces end strengths, including: a drawdown of 7,400 for the Army and a cut of 2,961 for the Navy.  The Air Force would be authorized an increase of 600.

Limitation on availability of funds for Ohio-class ballistic missile submarine replacement program: The bill would limit the obligation and expenditure of funds authorized to be appropriated or otherwise made available for fiscal year 2012 for the Ohio-class ballistic missile submarine replacement program to not more than 90 percent until the Secretary of Defense submits to the congressional defense committees a report summarizing the analysis that supported the Department’s decision to reduce the planned number of submarine launched ballistic missile (SLBM) launchers (missile tubes) per submarine to 16.

Preservation and Storage of Certain Property Related to F136 Propulsion System: The bill would require the Secretary of Defense to develop and carry out a plan for the preservation and storage of property owned by the Federal Government that was acquired under the F136 propulsion system development contract, commonly referred to as the alternative engine, developed by GE and Rolls Royce, for the F-35 Joint Strike Fighter.

Disability, retired pay, and survivor benefits: The bill would increase existing monthly amounts and establish additional monthly amounts paid under the Special Survivor Indemnity Allowance to surviving spouses or former spouses of deceased service members who are denied the full amount of their annuity under the Survivor Benefit Program (SBP) due to the offset required by the receipt of Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs.  This “widows’ tax” has long denied surviving family members the payment of their SBP benefits earned by the service of their spouses and paid for through premium reductions to retired pay. This section would provide an incremental step in the continuing effort to eliminate the DIC offset against SBP annuities.

Improvements to pay and health benefits: The bill would authorize an increase in base pay for military members by 1.6 percent for FY2012.  The bill would also limit any annual increase in TRICARE Prime enrollment fees to the amount equal to the percentage by which retiree pay is increased beginning October 1, 2012, meaning future fee increases are capped to cost of living adjustments.  Additionally, the bill would prohibit a Medicare eligible military retiree from enrolling in the managed care program of a designated provider after September 30, 2012.

Ballistic missile defense: The bill would provide additional resources for development, test and fielding of missile defenses to protect the U.S. homeland and support the implementation of the Administration’s phased adaptive approach for regional missile defense. The bill would include over $300 million in missile defense-related authorizations above the President’s FY2012 request, including an additional $110 million for Israeli cooperative programs.

Acquisition policy and management: The bill would require the Milestone Decision Authority to certify that a preliminary analysis of core logistics capabilities for each major weapons system has been performed as entrance criteria for entering the technology development phase of a major defense acquisition program (milestone A) and that the core logistics requirements and associated sustaining workloads for the weapons system have been determined as entrance criteria for entering the engineering and manufacturing development phase (milestone B).  The bill would also require certification that life-cycle sustainment planning has identified and evaluated relevant sustainment costs through development, production, operation, sustainment, and disposal of the program, and any alternatives, and that such costs are reasonable and have been accurately estimated.

The bill would also include a new section relating to the disclosure of confidential commercial, financial or proprietary information, technical data, or other privileged information to a litigation support contractor for the sole purpose of providing litigation support. This section would require the litigation support contractor to execute a contract with the Government agreeing to or acknowledging that any information furnished will be used only for the purpose stated in the contract, that the litigation support contractor will take all precautions necessary to protect the sensitive information, that the sensitive information will not be used by the litigation support contractor to compete against the third party for contracts, and that a violation of any of the above would be basis for the Government to terminate the contract.

The bill would also expand the existing executive compensation cap to apply to any individual performing on a contract rather than certain management employees.  This provision is intended to reduce the risk of excessive individual compensation charged to defense contracts.

The bill would also require the Secretary of Defense to manage supplier risk by directing contracting personnel to use a business credit reporting bureau, or other objective sources of business information, to evaluate supplier risk on all Department of Defense (DOD) contract actions. This section also would require the use of automated, off-the-shelf products to identify suppliers by location and to monitor suppliers for events that may affect their performance, such as a merger or acquisition, or bankruptcy filing.  The committee believes that such a supplier risk management initiative would benefit the Department of Defense through cost avoidance (by reducing its exposure to high-risk suppliers), increased efficiency, and a greater return on investment.

The bill would also require the Director of the Defense Contract Audit Agency (DCAA) to submit an annual report that summarizes DCAA’s audit activities during the previous fiscal year, including significant problems, abuses, and deficiencies, a statistical table showing the total number of audit reports, the length of time taken for each audit, and the questioned dollar value, as well as recommendations for corrective actions.  The committee believes that this section would increase transparency and accountability, and facilitate congressional oversight of the Defense Contract Audit Agency.

The bill would also make a number of technical corrections with regard to general contracting authorities, procedures, and limitations, including provisions relating to contracts in support of contingency operations in Iraq or Afghanistan.

Don’t Ask, Don’t Tell repeal: The bill would require the service chiefs of each branch to submit to the congressional defense committees a written certification that the repeal of the policy, enacted by P.L. 111-321 on December 22, 2010, will not degrade the readiness, effectiveness, cohesion, and morale of combat arms units and personnel of the Armed Forces engaged in combat, deployed to a combat theater, or preparing for deployment to a combat theater.

Military regulations regarding marriage:  The bill would reaffirm the policy of section 3 of the Defense of Marriage Act, as applicable to members of the Armed Forces or civilian employees of the Department of Defense, that the word ‘‘marriage’’ means only a legal union between one man and one woman as husband and wife, and the word ‘‘spouse’’ refers only to a person of the opposite sex who is a husband or a wife.

DoD organization and management: The bill would redesignate the Department of Navy as the Department of the Navy and Marine Corps and would change the title of its secretary to the Secretary of the Navy and Marine Corps.

The bill would also direct the Secretary of Defense to provide a report to the congressional defense committees, the House Permanent Select Committee on Intelligence, and the Senate Select Committee on Intelligence on actions taken to implement the recommendation of the Government Accountability Office (GAO).  GAO recommends that the Secretary of Defense direct the Under Secretary of Defense for Intelligence, in coordination with the Chairman of the Joint Chiefs of Staff and the Secretaries of the military services, develop intelligence information sharing guidance, such as a concept of operations, and to provide such direction and prioritization to improve intelligence community information sharing. In addition, the bill would direct the Comptroller General of the United States to review the Under Secretary’s report to determine whether it is consistent with and adequate to address its recommendation.

The bill would also require the Secretary of Defense to establish a program for enhanced information sharing protection and insider threat mitigation for the information systems of the Department of Defense in order to detect unauthorized access to, use of, or transmission of, classified or controlled unclassified information.  This provision is intended to prevent security breaches such as the “Wikileaks” incident that occurred last this year.

The bill would require the Secretary of Defense to develop and implement a total force management plan that would determine the appropriate manpower mix of military (Active and Reserve Components), civilian and contractor personnel necessary to accomplish the mission of the Department of Defense (DoD). Overall responsibility for establishing the policies and procedures to implement such a plan would be given to the Under Secretary of Defense for Personnel and Readiness, with responsibility for requirements determination, planning and programming being given to the manpower and force structure authorities for each DoD component.  The bill also contains a number of provisions relating to management, employment, and workforce integration of civilian personnel within the Department.

The bill would affirm that the Secretary of Defense has the authority to conduct military activities in cyberspace. The committee recognizes that because of the evolving nature of cyber warfare, there is a lack of historical precedent for what constitutes traditional military activities in cyberspace.  In particular, the provision would clarify that the Secretary of Defense has the authority to conduct clandestine cyberspace activities in support of military operations pursuant to the Authorization for the Use of Military Force (Public Law 107-40; 50 U.S.C. 1541 note) outside of the United States or to defend against a cyber attack on an asset of the Department of Defense.

Guantanamo detainees: The bill would prohibit the Secretary of Defense from using any funds made available to the Department in fiscal year 2012 to support the transfer of Guantanamo Bay detainees to or within the United States or to foreign countries unless certain requirements are met and certified to Congress at least 30 days in advance.

Tracking implementation of DoD efficiencies: The bill would require the Comptroller General of the United States to assess the extent to which the Department of Defense is tracking and realizing the savings proposed pursuant to the initiative led by the Secretary of Defense to identify at least $100 billion in efficiencies during the period of fiscal year 2012-16.

Limitation on procurement and fielding of Light Attack Armed Reconnaissance Aircraft: The bill would require the Secretary of Defense to review the capability of the elements of the Department of Defense to conduct light attack and armed reconnaissance missions, or to fulfill requests of partner nations for training in the conduct of such missions, in the next Quadrennial Roles and Missions Review.  The bill would also prohibit obligation or expenditure of funds for the start of any new program to procurement of field light attack and armed reconnaissance aircraft until the Joint Requirements Oversight Council validates a requirement for such aircraft and the Under Secretary of Defense for Acquisition, Technology, and Logistics approves the acquisition strategy for such aircraft. However, the Secretary would be allowed to waive the prohibition should he determine that acquisition of the aircraft is necessary to support contingency operations in Iraq or Afghanistan.  The committee is concerned by the disjointed approach taken by the Department of Defense in its many efforts to acquire and field light attack and armed reconnaissance aircraft.

Interagency coordination:  The bill would require the Secretary of Defense, the Secretary of State, and the Administrator of the United States Agency for International Development (USAID) to jointly establish a standing advisory panel to advise, review, and make recommendations on ways to improve coordination among the Department of Defense, the Department of State, and USAID on matters relating to national security, including reviewing their respective roles and responsibilities in activities such as stability operations, foreign assistance, including security assistance, strategic communications, public diplomacy, and countering proliferation of weapons of mass destruction.

Pakistan counterinsurgency fund: The bill would extend by one year the authority to provide assistance to the security forces of the Islamic Republic of Pakistan to build and maintain those forces’ counterinsurgency capability.

Report on extension of U.S.-Iraq Status of Forces Agreement (SOFA): The bill would require the Secretary of Defense, in consultation with the Secretary of State, to provide a formal notification to the congressional national security committees if the United States Government and the Government of the Republic of Iraq complete an agreement permitting the United States to maintain a force presence in Iraq above that envisioned for the Office of Security Cooperation-Iraq (OSC-I). This section would require the Secretary of Defense to notify the congressional defense committees should no such agreement be reached by December 31, 2011.  In the absence of such an agreement, the Secretary of Defense shall submit a report to the committees by January 31, 2012 outlining how Department of Defense participation in OSC-I programs will address the capability gaps of the Iraqi Security Forces, should the Government of Iraq request such assistance.

Reports and other matters: The bill would require the Secretary of Defense to submit to the congressional national security committees the following selected reports:

  1. A classified study undertaken by an independent entity outside the Department of Defense assessing the gaps between the conventional and anti-access capabilities of the Islamic Republic of Iran and the People’s Republic of China and the U.S. forces’ ability to overcome such capabilities.
  2. A report on consultation regarding a federally funded research and development center of the Department of Defense to conduct an assessment of the energy security of the NATO alliance, with an emphasis on the vulnerabilities of NATO alliance members to a sole supplier or distribution network for oil or gas, and how such vulnerabilities could adversely affect the security and cohesion of the alliance. 
  3. A report on the current and future military power of the Democratic People’s Republic of Korea, in both classified and unclassified form.
  4. An assessment, carried out in consultation with the Director of National Intelligence, of the national security risks posed to the United States and United States allies as a result of the Federal debt liabilities owed to China and the amount of interest determined to have been paid by the United States to China.

Department of Energy national security programs: The bill would limit the Secretary of Energy from obligating or expending more than $7 million for a Center of Excellence on Nuclear Security in the People’s Republic of China until the date on which the Secretary of Energy submits two reports to the congressional national security committees addressing: 1— the existing capacity of China to develop and implement best practices training; and 2— the extent to which additional best practices training and relationship building activities would contribute to improving the Chinese record of proliferation with respect to weapons of mass destruction, missiles, and related technologies and materials.

The bill would also require the Secretary of Energy to submit to the congressional defense committees an annual report on the strategic plans of the DoE and the National Nuclear Security Administration (NNSA) to prevent nuclear and radiological proliferation and on the implementation of these plans, including progress and challenges of implementation, an estimate of budget requirements over 10 years, and interagency coordination.  This provision would also require the Secretary of Energy to submit an assessment of the risk that non-nuclear weapon countries may acquire nuclear enrichment or reprocessing technology, and a classified list of the location and vulnerability of highly-enriched uranium worldwide.


The FY2012 defense bill is a key mechanism by which Congress fulfills one of its Article I, Section 8 constitutional responsibilities to provide for the common defense.  Members of the Armed Services Committee scrutinized every aspect of the defense enterprise to find ways to accomplish this mission more effectively in today’s fiscal environment.  The defense bill reduces costly reporting requirements, sets new standards for financial management at the Pentagon, and incentivizes competition as a means to reform defense acquisition. 

The legislation reaffirms that the United States is engaged in an armed conflict with Al Qaeda, the Taliban and associated forces pursuant to the Authorization for Use of Military Force from 2001—and strengthens policies and procedures used to prosecute and detain terrorists captured under this banner.  It’s important to note that the 2012 defense bill does not expand the war on terrorism or authorize force against Libya or Iran.  The legislation also includes a number of provisions to identify and prepare for future threats. 

According to the Committee on Armed Services, the guiding priorities of this bill are:

  • Ensuring our troops deployed in Afghanistan, Iraq and around the world have the equipment, resources, authorities, training, and time needed to successfully complete their missions and return home;
  • Providing our warfighters and their families with the resources and support they need, deserve, and have earned;
  • Investing in the capabilities and force structure needed to protect the United States from current and future threats;
  • Mandating fiscal responsibility, transparency and accountability within the Department of Defense; and
  • Incentivizing competition for every tax-payer dollar associated with funding Department of Defense requirements.


The bill would authorize $553 billion for the Department of Defense’s base budget, $119 billion for overseas contingency operations, and $18 billion for the Department of Energy’s atomic energy defense programs.

The Congressional Budget Office (CBO) estimates that this bill would have an insignificant effect on direct spending in 2012 and would, on net, decrease such spending by $1 million over the 2012-2016 period and $3 million over the 2012-2021 period.  The largest costs over that 10-year period would result from an increase in the special survivor allowance paid to certain beneficiaries of the military Survivor Benefit Plan, and from a change in the growth rate of enrollment fees charged to certain retirees who use TRICARE Prime, a health benefit plan for both active-duty and retired members of the uniformed services and their dependents.

Those costs would be offset by new receipts from additional sales of material in the National Defense Stockpile and savings from a provision to limit enrollment in the Uniformed Services Family Health Plan.  Enacting the bill would not affect revenues.