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Happy New [Fiscal] Year! 
This week we’re celebrating/castigating the fiscal year, that weird federal government accounting thing you usually hear around this time of year.

This boring-like-broccoli topic is worth understanding because it’s like music at a nightclub—it sets the rhythm for getting down to business. But, where did it come from, and does it actually work?

As with most dysfunctional things, the fiasco year starts with Congress.
US Congressional sessions match the normal calendar and run from January to December.

Each and every year, there are 12 annual appropriations bills that must be passed to keep the government running. On top of that, elections every other year reshuffle the make-up of Congress.

To buy more time for Congress to process the aforementioned appropriations legislation—particularly to avoid continuing resolutions—a “fiscal year” was created in 1974 to offset the Congressional session calendar year.

It was decided this fiscal year would shift left three months, beginning October 1 and end on September 30 the following calendar year (i.e., you are reading this in FY2022, even though it’s still 2021). #fiscaltimetravel

Next level dysfunction: The US fiscal year only shifts the spending by the government. Income—that pesky thing called taxes to pay for it all—still works off the calendar year.

So What
Three months should be plenty of time to make it all work, right? Right??

Well, the record speaks for itself. In the 48 years that the federal government’s fiscal year has been in place, Congress has only managed to pass all required appropriations bills four times within the year they were supposed to. #defineinsanity
For perspective, that works out to a .083 batting average — bad enough to top the list of the worst batting averages in the history of Major League Baseball.

Say What
Like its refusal to use the metric system, the US fiscal year is an outlier in the world.
Here are what other governments use instead:

  • The Tax Year: Align the fiscal year with the tax year, and hold the Christmas holiday hostage. Mandate that the December Congressional session cannot adjourn without passing appropriations. Most public US companies use this.
  • The Down-Under Year: Australia, New Zealand, and a few other countries use a June-to-July fiscal year. OBTW, this is what the US had before 1974 and most US state governments currently use this fiscal year model. Bonus: Australia’s tax year aligns with this fiscal year model.
  • The Texas Year: Move the federal government to a biennial (two-year) budget cycle — as Texas does. This would align with election cycles to preserve the power of the purse. It would also get rid of one-year obligation limits in the various colors of federal money, which fuels the massive federal ritual of frantic “use it or lose it” spending.

What Now
In the end, any change involves trading one set of attributes for another, and passing a budget on time isn’t just about the process — it’s about the leverage.

Many a deal has been made in Congress by holding appropriations hostage. For now, Congress appears to favor these manufactured train wrecks to preserve political gamesmanship.

If you don’t believe us, consider this: you are reading this under a continual resolution, which is the 12th time in the past 13 years. #howChinawins

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In That Number

The new max F-35 production rate, according to the latest program production re-baseline. This is planned to be achieved by 2023. By comparison, the original plan envisioned 200+ F-35s rolling off the assembly line in 2014.
Trivia: In 1959, the US Post Office experimented with delivering mail with which of the following:

A) Bomb from a fighter jet
B) Missile from a submarine
C) Barrel from a helicopter 
On the Radar
Keep an eye on the growing satellite servicing sector for dual-use applications. Northrop Grumman currently has two mission extension vehicles in orbit that provide station-keeping services for two Intelsat GEO satellites that are low on fuel but is now preparing to launch a new kind of satellite: one with a robotic arm to install propulsion packs on dying satellites instead. Meanwhile, NASA and Maxar are developing the on-orbit servicing for a polar satellite, startup Orbit Fab is building a GEO propellant tanker, Lockheed is developing a CubeSat that can refuel other satellites, and Starfish Space is developing a space tug that can capture and move objects in orbit.
They Said It

“The combatant commanders have not wanted that airplane for the last several years…there’s no federal demand for the aircraft.”

—  Lt. Gen. Michael Loh, Air National Guard director, on the 11 RC-26 Metroliners that Congress has blocked from retirement, largely because the legislation was written by a sitting Congressman who flies in that unit as an ANG pilot.

It costs taxpayers $30 million per year.

Basic Purchasing Agreement (BPA): a simplified method of filling anticipated repetitive needs for supplies or services by establishing a "charge account" with qualified sources of supply that is accessible by multiple organizations

Why it Matters: The Air Force’s AFWERX awarded Dcode a 5-year BPA that permits any organization in the Department of Defense to order the company’s innovation-related educational and advisory services to foster a forward-leaning culture for their unit.
Zoom in
Defense spending comprises the largest pot of discretionary spending in the US, making it a key tool in strategic competition. Unfortunately, it’s been knee-capped by a 50-year-old budget process. The good news is that the Senate is launching a commission to look at fixing it. Zoom in here to learn more about why the overhaul is needed, from people who’ve led the process. 
Saved Rounds
  • Boeing delivered the first Block III Super Hornets to the US Navy
  • Lockheed Martin secured a $9.6 million OTA contract to develop a prototype for an integrated EW/signals/cyber system for Army Strykers
  • Northwestern University engineers developed a flying-winged microchip that is the size of a grain of sand
  • Boeing was tapped by the Air Force to sustain the C-17 fleet for the next decade for the low, low price of $24 billion
  • PAR Government Systems won an eight-year $490 million contract to provide a counter-small unmanned aerial system (C-UAS)—and was the only company to even apply
  • Germany announced it will purchase five P-8A Poseidon from Boeing, through the US Navy
  • Hughes and SES demonstrated the first multi-orbit SATCOM for General Atomics’ remotely piloted aircraft
  • Honda announced plans to build electric VTOLs and telepresence robots
  • Xona Space Systems raised $8 million to fund an orbital alternative to GPS demo next year
  • DARPA’s Raytheon/Northrop Grumman-developed Hypersonic Air-breathing Weapon Concept (HAWC) vehicle made its first flight
  • Cubic Defense was awarded an $8 million contract to miniaturize a halo directional antenna to use for aerial mesh networking 
  • The Army awarded a $226 million full-rate production contract for 3800+ MOUS SATCOM radios from L3Harris and Collins Aerospace
  • Terran Orbital announced it will invest $300 Million to construct the world’s largest state-of-the-art commercial spacecraft facility
  • HawkEye 360 was issued a $10 million contract from the NGA to provide space-based detection and mapping of surface-based radiofrequency emissions
  • The Army continued testing Raytheon’s EW Planning and Management Tool to inform a service-wide deployment decision 
  • Lynk revealed its satellite successfully mimicked a cellphone tower in space, allowing hundreds of phones on earth to connect to it as it passed overhead
  • Leidos was awarded $202 million to provide low-energy non-intrusive inspection portals for passenger vehicles at the US-Mexico border
  • An Army pilot developed a way to use a camera to capture, record, and scrape the gauge information from an aircraft to provide an automated debrief and career tracking of flying performance
  • SpaceX, ULA, Blue Origin, and Rocket Lab all received prototype contracts from the Space Force to advance rocket engine testing and launch vehicle upper stages
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The 5 Second Debrief
Trivia Answer: B. The 36-foot-long missile was launched 100 miles off the coast of Jacksonville, FL. The warhead was replaced with a metal container with 3,000 letters.
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