DoD Deputy Nominee Kathleen Hicks Critical of “Use or Lose” Budgeting

Kathleen Hicks, the Biden Administration’s nominee for Deputy Defense Secretary, expressed criticism this week for the current “use or lose” culture in defense budgeting.

“If the incentive structure is you only get your money if you spend it inefficiently and hold on to it and hide the ball, you’ll never get the business reform that we need,” she said.
Ms. Hicks also expressed support for Other Transaction Authority agreements and other alternative purchasing and contracting methods as mechanisms that increase efficiency and attract new talent and non-traditional defense contractors to the Defense Industrial Base.

A change to “use or lose” budgeting will have broad implications for those that work with the federal government. We will continue to track this discussion.

Additionally, the Biden Administration’s continued support for OTAs and other alternative purchasing and contracting methods (such as SBIRs) is encouraging and will continue the innovation emerging from Army Futures Command, AFWERX, and SOFWORX. Ward & Berry works hard to assist its clients – both established government contractors and innovators new to the world of federal contracting – in their efforts to rapidly bring innovative solutions to the federal government.

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