By Jason Miller
Executive Editor
Federal News Radio

The Defense Department may not have a new chief information officer after all. About a week after the nomination of hearing of Teri Takai to be the next DoD CIO was abruptly cancelled, Defense Secretary Robert Gates announced the plan to eliminate the CIO’s office.

“The Office of the Assistant Secretary of Defense for Networks and Information Integration or NII was set up in 2003 when policy, oversight and advocacy functions for command, control and communications split off from intelligence,” Gates said during a press conference at the Pentagon Monday. “The resulting arrangement for dealing with enterprise IT and hardware issues, which includes a similar function for the J-6 on the Joint Staff, has since become redundant, costly and cumbersome. Therefore, I have directed the elimination of NII and the J-6 organizations.”

Gates says the DoD CIO’s functions will move to a “re-fashioned” Defense Information Systems Agency (DISA), and the acquisition functions will belong to the Office of Acquisition, Technology and Logistics. This leaves Takai’s new position in limbo.

This was one of several management changes Gates announced Monday as part of his plan to move $100 billion in spending from back-office functions to warfighter needs.

Along with closing the Joint Forces Command base in Norfolk, Va. and calling for a reduction of contractors by 10 percent a year for through 2012, Gates froze hiring for senior executives on his staff, at defense agencies and at combatant commands, cut the number of DoD advisory boards and oversight reports and eliminated the Business Transformation Agency.

“The task before us is not to reduce the top — the department’s topline budget; rather it is significantly to reduce its excess overhead costs and apply the savings to force structure and modernization,” he says. “Toward this end, starting in June we embarked on a four-track approach to move America’s defense institutions toward a more efficient, effective and cost-conscious way of doing business.”

He adds these initial decisions are designed to reduce duplication, overhead costs and excess across DoD and instill a culture of savings and restraint.

Gates says these changes will result in a number of full-time civilian employees and contractors having to find new jobs.

“I’ve asked Dr. Clifford Stanley, the Under Secretary of Defense for Personnel and Readiness, to work with the leaders of the affected organizations to do everything possible to assist their employees in what may be a difficult transition,” he says. “I do so with great appreciation and admiration for the service these employees have rendered, and with the hope that we can help them find new ways to offer their expertise and experience in service to our nation.”

A large number of employees will come from BTA and the CIO offices. Congress required DoD to create the Business Transformation Agency in 2006 to help address and modernize military business practices and systems.

“Since its creation, BTA, an agency that now employs approximately 360 people and spends $340 million a year, has shifted more of its focus to day-to-day oversight of individual acquisition programs, a function that can be performed by a number of other organizations,” Gates says. “Furthermore, the mission assigned to BTA has largely been legislatively assigned to other elements of the department. Therefore, I have directed the elimination of the Business Transformation Agency and shifted its responsibilities largely to the deputy chief management officer.”

Beth McGrath is the deputy CMO, and has worked closely with the BTA over the last year.

Besides eliminating the CIO office, Gates wants to consolidate technology capabilities across the department to reduce cyber vulnerabilities and find savings in acquisition, sustainment and manpower costs.

“This action will allow the increased use by the department of common functions and improve our ability to defend Defense networks against growing cyber threats,” he says.

Additionally, Gates wants to reduce the number of senior executive and general and flag officer positions by at least by 50 percent by 2012; rebaseline the OSD, defense agencies and combatant commands to better determine what personnel should be doing, where and what level of rank. He expects the review to be finished by Nov. 1.

“At a minimum, I expect this effort to recommend cutting at least 50 general and flag-officer positions and 150 senior civilian executive positions over the next two years,” he says.

Another fertile area for savings is the reports and advisory boards DoD supports.

Gates says since 1970 the number of reports to Congress grew to more than 700 from 37. DoD alone had almost 1,000 contractors working on these reports, and no one knows the cost to produce them.

“I have directed that, starting now, we will freeze the overall number of DOD-required oversight reports,” Gates says. “We will immediately cut the dollars allocated to advisory studies by 25 percent. And henceforth, we will publish the actual cost of the preparation of each report and study prepared by DOD in the front of each document.”

He adds that by Oct. 1, DoD will review all oversight reports and use the results to reduce the volume generated internally.

DoD also has more than 65 advisory boards and commissions which cost about $75 million to support.

“I’m ordering a review of all outside boards and commissions, for the purpose of eliminating those that are no longer needed, focusing the efforts of those that continue to be relevant, and cutting the overall funding available for studies tasked by the remaining boards and commissions by 25 percent in fiscal 2011,” he says.

Finally, Gates continued to look at acquisition as an area for costing savings. Along with reducing the contractor workforce, Gates says a new initiative to improve efficiency and reduce costs is underway, led by Undersecretary of Defense for ATL Ashton Carter.

DoD will provide more details on this effort in early September. Gates says the goal is for this initiative to begin affecting ongoing programs immediately.

“With regard to insourcing, other than changes planned for fiscal 2010, no more full-time positions in these organizations will be created after this fiscal year to replace contractors,” he says. “Some exceptions can be made for critical areas such as the acquisition workforce.”

Gates also is asking for DoD employees help to save money.

“Within the department, we’re launching an online contest for the purpose of soliciting and rewarding creative ideas to save money and use resources more effectively,” he says.

More information on the contest is on Defense.gov.

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