The Pentagon Can’t Spend its Cash Fast Enough

FY18 OmnibusThe Pentagon Can’t Spend its Cash Fast EnoughIt can now obligate up to 25 percent of its funds in the last two months of the fiscal year

National Security,  | Quick Take
Mar 27, 2018  | 2 min read | Print Article

You know that feeling you get when it’s close to pay day and you’re hoping you don’t run out of money before then? It may have been a while for most of our readers, but almost everyone has had a job where you felt like you were living paycheck to paycheck.

Well, if you’re a Pentagon contracting officer, spending the Pentagon’s money and not your own, you don’t have to worry about that. No stretching a dollar to make ends meet in the F-35 program. No sir. And shipbuilding? Well, they’re afloat on a sea of money, a big chunk of it for ships the Navy technically didn’t ask for. (A rising tide lifts all boats, as they say.)

The Pentagon actually has the opposite problem this time: too much money to spend by the end of the fiscal year. And the Pentagon normally operates under a requirement that contracting officers cannot obligate more than 20% of their total available funds in the last two months of the fiscal year. This is colloquially called “the 80/20 rule” and is a way of avoiding wasteful spending in a rush to use it before they lose it when the funds expire.

Well, in another sign that the Pentagon is special and the normal rules don’t apply to them, the Fiscal Year 2018 Omnibus Appropriations Act just signed into law relaxes that rule. The Pentagon can now obligate up to 25 percent of its funds in the last two months of Fiscal Year 2018.

So, all you defense contractors out there, you should make like Scrooge McDuck and open up your vaults. Look for a lot of cash to be pouring in during August and September. You won’t have to worry about stretching your paychecks this year.

Go to Top