That the Pentagon is ending another calendar year under a continuing resolution is not a big surprise—it has been under such a measure for 14 of the past 15 years.

However, an added bonus of negativity within the department’s budget offices is the pressure from a measure passed in June 2023 called the Fiscal Responsibility Act (FRA), which will bring a miniature sequestration—a required 1% across-the-board cut if Congress can’t pass spending bills by the new year. Officials across the department say that bill—along with the state of politics on Capitol Hill—is changing how it is building its next spending plan.

• Mandatory 1% cut coming in January if no spending measures passed
• Major program awards planned throughout the year
• Creative planning gives USAF a head start on uncrewed systems

“This year, it’s a return to: ‘We’ve got tough choices to make,’” Bill LaPlante, undersecretary of defense for acquisition and sustainment, said Dec. 2 at the Reagan National Defense Forum here. “There’s been some tough choices made, and I think it’s going to be a different environment. And that’s assuming we don’t have the worst-case scenario. So what we told everybody as they were building the budget is: ‘Remember, this is not like previous years. There’s going to be some hard choices, and that’s what’s going to happen.’”

The U.S. government is ending 2023 under a split continuing resolution, with funding for three departments running out on Jan. 19 and the rest, including the Pentagon, expiring on Feb. 2. Under the continuing resolution, the Pentagon is operating at the prior year’s appropriations level, with limited reprogramming ability and an inability to start new programs.

That pressure is in addition to the FRA’s stipulation that any discretionary budget account including the Pentagon be reduced by 1% under 2023 levels if it is still funded under a continuing resolution (CR) on Jan. 1. Pentagon comptroller Mike McCord told reporters in November that the measure is a “slow-moving train wreck.”

The department has stipulated that paychecks will not be impacted by this sequestration, putting pressure on the rest of the department. Deputy Defense Secretary Kathleen Hicks, speaking to reporters in late November, said spreading the reduction evenly across the budget would impact many of the Pentagon’s top efforts to counter China’s growth: modernizing the nuclear triad, shipbuilding and networking sensors and weapons systems under Combined Joint All-Domain Command and Control.

“A lot of those efforts are put first forward, or more substantially forward, in our ’24 budget request,” Hicks said. “We’re already four years behind where we should be. We’ll just push further behind.”

That 2024 request outlined a new modernization approach for the U.S. Air Force that includes creating the Collaborative Combat Aircraft (CCA) effort, shifting moving target engagement away from aircraft and into space, operationalizing the Advanced Battle Management System and improving base defense, among others, with about $5 billion to start this series of efforts.

“The modernization piece is depending on the funding. We’ve got a lot riding on ’24,” Air Force Secretary Frank Kendall tells Aviation Week. “Of all the things that I’m worried about, the one that bothers me the most right now is the specter of essentially a yearlong CR with sequestration in ’24. It’s not because of any of the [defense] committees; they’re all fine. It’s because of the overall politics of the Congress.”

The CCA program has taken industry by storm, with the prospect of at least 1,000 uncrewed “loyal wingman” drones flying alongside Air Force fighters including the Next-Generation Air Dominance (NGAD) platform and the F-35. Without congressional approval and funding, the service has tried to find other ways to get the work started to meet a goal of fielding by 2028. Kendall says the service does have “prospective contractors” signed on to start work ahead of a full program beginning.

“We were able to find a few places in ’23 where we could get some things started, or reorient some things in some cases, but the real tranche of money to start the operational imperative work starts in ’24,” he says. “And if we end up with the worst case, we don’t get anything. There’s a whole bunch of new starts in there.”

The Air Force is looking for flexibility to start new programs without appropriations under a “Quickstart” initiative put forth by Kendall to allow the service to begin programs up through the preliminary design review stage. The compromise 2024 defense policy bill released in early December supports this proposal, though it limits potential spending to $100 million as opposed to the requested $300 million.

For other Air Force programs, the service’s biggest upcoming acquisition milestone will be the award of a development contract for NGAD, with Boeing and Lockheed Martin the remaining contenders. GE Aerospace and Pratt & Whitney are competing for the related Next-Generation Adaptive Propulsion engine program, though the service has said it plans to carry both through prototyping ahead of a downselect in 2027.

The service has accelerated its push for next-generation mobility aircraft, with an analysis of alternatives underway for the Next-Generation Aerial Refueling System (NGAS) and the Next-Generation Airlift to follow. To bridge the gap between the end of KC-46 procurement in 2029 and the beginning of NGAS, the service has issued a request for a procurement of tankers it is now calling the KC-135 Recapitalization. Lockheed Martin announced it is out of the running for this effort, although Airbus is pressing ahead by continuing to offer its A330 Multi-Role Tanker Transport against more Boeing KC-46s. An acquisition strategy is expected to be finalized in the third quarter of fiscal 2024.

Nuclear modernization is heavily underway in both legs of the triad under the Air Force, following the high-profile first flight of the Northrop Grumman B-21 Raider. The first B-21 is now at Edwards AFB, California, where it will conduct flight testing throughout the year. Following the test, Northrop is expecting its first contract award for production. The company’s LGM-35A Sentinel faces an uncertain timeline, with the Pentagon expected to finalize a new baseline schedule by early 2024 for the overall program, which could push back its expected initial operational capability date set at 2029.

As part of a modernization of the nuclear command-and-control enterprise, the Air Force is expected to award a development contract in February for the Boeing E-4B Nightwatch replacement. The Survivable Airborne Operations Center will be a fleet of at least four but possibly eight or more large aircraft, most likely newer Boeing 747-8s. In December, Boeing said it was no longer going to pursue the program under the current request for proposals, leaving Sierra Nevada Corp., the only other company that announced its involvement.

For the U.S. Army, 2023 was a major year for broad modernization, as it marked the end of its “24 in ’23” goal of fielding two dozen prototypes by the end of the fiscal year. The service largely met the mark, except for two—the Long-Range Hypersonic Weapon (LRHW) and the Extended-Range Cannon Artillery. A launcher issue inhibited tests of the LRHW, and the service is setting a new test plan to get it back on track.

Heidi Shyu, Pentagon undersecretary of defense for research and engineering, said the department broadly has a limit on hypersonic testing, which can affect schedules. The department has requested more funding for its test infrastructure and is awaiting congressional action.

After closing the Future Long-Range Assault Aircraft competition in late 2022 with victor Bell proceeding on its development of the winner, the V-280, focus on the Army’s vertical lift shifts to the Future Attack Reconnaissance Aircraft (FARA). The competitors for FARA—Bell with its 360 Invictus, and Sikorsky with its Raider X—are expected to fly their prototypes in 2024.

The biggest hurdle in that competition appeared to have been cleared in late 2023, as GE Aerospace has delivered its first T901 engines to the Army and in turn the competitors for integration. The engines will also be added to the Boeing AH-64 Apache and Sikorsky UH-60 Black Hawk.

The U.S. Navy closed 2023 with the long-awaited deployment of the first-of-its-class USS Gerald Ford, with multiple extensions to the Middle East deployment keeping it at sea much longer than expected. The second of the class, the USS John F. Kennedy, has had its delivery date pushed back from 2024 to an expected July 2025. In the meantime, the service is likely to extend the lives of all Nimitz-class carriers to meet the need for carrier air wings at sea.

The Navy is continuing to set requirements for its NGAD platform, also known as the F/A-XX, although it has not outlined a public timeline for an award. The service has said it will not buy more Boeing F/A-18s, production for which is expected to end in 2025.

Boeing’s uncrewed refueler for the Navy, the MQ-25 Stingray, has seen its schedule slip repeatedly. The Navy had expected a Milestone C decision in 2023, but a new date has not been set.

The service in August 2023 announced new requirements for a replacement jet trainer known as the Undergraduate Jet Training System, with a formal request for proposals expected in 2024. Competing for this program are Boeing with its T-7A, Lockheed Martin with its T-50N and a new team of Textron and Leonardo with the M-346N.