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Defense Speak Interpreted: Unpacking the NDAA

What is this National Defense Authorization Act, or NDAA, stuff you keep hearing on the national news all the time, and why is it important to PCBs? I will aim to answer these questions in this column, but right up front, I have to clarify appropriation ^[1] versus authorization ^[2]; it’s only right for a column titled “Defense Speak Interpreted.”

• Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization and then appropriation.”
• Authorizations Act: A law that establishes or continues one or more Federal agencies or programs, establishes the terms and conditions under which they operate, authorizes the enactment of appropriations, and specifies how appropriated funds are to be used.

I think the general public uses these terms interchangeably, but they are not the same. Much of the argument is about the appropriation of money, but that is rolled into the final authorization that becomes the law when signed by the President.

Overall, the NDAA ^[3] authorizes programs and lays out the priorities and policies for the U.S. Department of Defense (DoD) for the coming federal fiscal year (FY, October 1 through September 30). The NDAA frequently runs over 1,000 pages of detail on all sorts of defense programs, as I will detail in this column. The very first NDAA was passed in 1961 before most of you were born. Much of the process is now rooted in tradition rather than a legal process. There are a lot more behind-the-scenes negotiations than I will outline here.

But wasn’t there an agreement between the Trump White House and Congress on the FY 2021 budget? Yes, there was a handshake agreement that the 2021 DoD spending would be $740.5 billion, including $69 billion for Overseas Contingency Operations (i.e., for the troops and “wars” that are currently being fought). Then, there is the $10 billion added in March for personal protective gear for defense personnel to fight COVID-19. Another $10 was allocated for defense in the current COVID-19 Relief Executive Order because Congress just adjourned for August without passing another stop-gap measure.

But how will the whopping $740.5 billion be spent? The budget agreement is like a household saying, “We can spend $100,000 next year with $90,000 for food, housing, utilities, and clothes, but what do we spend the rest on—the roof, a new car, or a vacation?” (Of course, Washington frequently spends more than they take in by borrowing the difference.) The NDAA contains the detail on what exactly will be purchased. All 435 U.S. representatives and 100 senators have ideas about what defense expenditures would most help their constituents. Also, the NDAA by tradition needs to be passed each year, so it is a target for amendments, even if they have little to do with the DoD. And the federal FY starts October 1 of each year, so that is the target date for a new budget to be in place with the President’s approval signature (now less than two months away).

And just as there are arguments about the family spending, the Democrat-controlled House and the Republican-controlled Senate have passed defense appropriations bills that are somewhat different. Worse yet, the President has threatened to veto the NDAA if it contains language about military base renaming or does not include funding to build more of the U.S./Mexico border wall.

By the way, you need to know the difference between the Armed Services Committees and the Appropriations Committees in both chambers of Congress. The Appropriations Committees set budget limits and translate them into specific spending authority. The Armed Services Committees produce the final “authorization” bills (e.g., the NDAA, which set priorities, policies, and budget limits). It’s analogous to one parent in the family setting the budget, and the other paying the bills.

Historically, the NDAA originated in the House, to whom the Constitution grants the primary taxing and spending authority; however, today, each chamber starts its NDAA at about the same time in the spring, hoping to come together on a negotiated compromise by summer.

This year, the House version of the NDAA proposes to prohibit further nuclear testing and require the President to consult Congress before deploying federal forces to limit rioting. The Senate NDAA version would limit the transfer of military weapons to local law enforcement officials. Both bodies would allow the Pentagon to rename military bases named for Confederates ^[4]. It will now be up to a House/Senate conference committee to iron out these small differences.

Now, we get around to an almost-annual problem. What happens if there is no budget or spending agreement by October 1? Congress has invented (principally for defense) a handy stop-gap spending bill called a continuing resolution (CR), which allows defense programs to continue operating temporarily at the levels agreed the previous year. In 2019, Congress used a 2019 CR in place from October 1 through December 20, 2019.

Today, while there is general agreement on FY 2021 funding, there are a number of hot button issues between the House, Senate, and President. Worse, there is a threat that control of the White House or Senate may pass from Republican to Democrat after the 2020 election, so the House is in no hurry to compromise before the November 3 election. If there is no spending deal before the election, we’ll see a CR during the “lame-duck” period between November 3 and early January, when the new Congress is seated.

What is the PCB industry’s history with the NDAA? The landmark of recent years was the creation of an executive agent (EA) to coordinate defense-related PCB and electronics interconnection activities, as recommended by the National Academy of Science study of the U.S. PCB industry in 2006. Section 256 of the NDAA for FY 2009 established the EA for printed circuits and electronic interconnections within the Navy, which was established at the Naval Surface Warfare Center in Crane, Indiana.

However, it took four more years for the actual funding to flow. Since then, the EA has given public status updates twice a year at IPC meetings since 2015. The EA has now initiated its first technology demonstration through the NSTXL OTA framework through the S2MARTS program—very-high-density interconnections—awarded to Averatek last year. The intent is to demonstrate the fine-line PCB process eventually at the Crane board shop, using relatively common U.S. PCB equipment.

A key PCB impact point is in each version of the Appropriations Acts passed in both chambers but slightly different. The IPC Government Relations Team ^[5] stated it as follows:

House and Senate Pass Pro-Electronics Measures in Defense Bills

The U.S. House and Senate this week passed their separate versions of the annual NDAA, and both bills include provisions of significant interest to our industry:

• New requirements for bare and assembled PCBs and PCBAs used in sensitive defense systems to be purchased from trusted U.S. or allied sources
• An IPC-backed measure requiring the DoD to analyze certain materials and technology sectors—including PCBs and other electronics components—for possible action to address sourcing and industrial capacity risks
• Funding and tax credits to strengthen domestic semiconductor production
• Funding for a Centers for Disease Control and Prevention study on per- and poly-fluoroalkyl substances (PFAS)

The House proposed a version of the 2021 NDAA ^[6], which contains this language to increase the production of PCBs in the U.S. (but good luck understanding all of it). It should be noted that the currently passed U.S. Senate version is a bit more strict than the House version, covering COTS boards for industries besides defense and calling out specific countries from which PCBs cannot be sourced for the DoD, including China.

Certainly, the 2021 NDAA has not been completely ironed out, let alone received the President’s signature, but it does portend a watershed year for PCBs in the U.S. Stay tuned.

References

1. United States Senate, “Glossary Term: Appropriation.”
2. United States Senate, “Glossary Term: Authorizations Act.”
3. Congressional Research Service, “Defense Primer: The NDAA Process,” January 8, 2020.
4. Scott Nueman, “Despite Trump's Veto Threat, Senate Approves Provision to Rename Military Bases,” July 24, 2020.
5. IPC, “IPC Global Advocacy Report,” July 24, 2020.
6. “Calendar No. 505: 116^th Congress, RD Session, H.R. 6395,” August 4, 2020.

Dennis Fritz was a 20-year direct employee of MacDermid Inc. and is retired after 12 years as a senior engineer at (SAIC) supporting the Naval Surface Warfare Center in Crane, Indiana. He was elected to the IPC Hall of Fame in 2012.