Intelligence agencies to squeeze savings from IT, contractors

After a decade of uninterrupted spending growth, the Office of the Director of National Intelligence has submitted budget cutting plans for intelligence agencie...

The intelligence community has submitted plans to cut the budgets of intelligence agencies over the next decade. And IC leaders are hoping to find a big chunk of their savings in information technology efficiencies.

The Office of the Director of National Intelligence submitted its budget cutting plan to the Office of Management and Budget Monday. It includes, according to Director of National Intelligence James Clapper, 10-year budget reductions in the double digits of billions of dollars. He did not specify an exact number.

“We’re all going to have to give at the office,” Clapper said at the annual geospatial intelligence conference known as GEOINT in San Antonio, Texas “And we in the IC are going to contribute to reducing the deficit, which itself presents a profound threat to national security.”

Details of U.S. intelligence budgets are almost entirely secret, but top line numbers for overall intelligence spending disclosed by the ODNI, the Defense Department and other civilian intelligence agencies suggest total spending in fiscal 2012 of approximately $85 billion.

Clapper said he developed the budget plan after long discussions between leaders of the nation’s intelligence agencies. The reduction in spending follows a decade during which spending on the intelligence community increased every year.

“It’s a fairly easy proposition for the intelligence community, because every year all we had to do was hand out more money and more people,” he said. “That’s certainly been the case for the entire six year existence of the ODNI. Well, now we’re going to be in a much different mode.”

Learning from the past

Clapper served as director of the Defense Intelligence Agency in the early 1990s, when the IC was managing a drawdown in spending after the fall of the Berlin Wall and the collapse of the Soviet Union. He said he learned a lot about how not to cut intelligence spending through that decade.

He said the intelligence community did not manage the workforce drawdown well, and stopped hiring fresh talent. It cut its all-source analysis capabilities by a third, and made serious reductions in its human intelligence and overhead surveillance capabilities. Clapper said he’s determined not to repeat those mistakes.

“This incoming challenge of reducing our budget rationally is kind of a litmus test for the Office of the Director of National Intelligence,” he said. “What we’ve tried to do is engage the agency directors, notably the big five. Why focus on them first? That’s where the money is. We tried to abide by some organizing principles, starting with no “salami slicing.” That didn’t work well before, and it’s a way of avoiding hard decisions. It assumes that everything we do in the intelligence community is of equal value. We all know that’s not the case.”

Clapper offered a few glimpses of the way intelligence agencies will cut their budgets without salami slicing. He said he and the agency heads are hoping to get about half of their planned savings through improvements in IT efficiency, including a transition to cloud computing.

Again, he said, that’s where the money is — 20 to 25 percent of intelligence agencies 2012 budget requests went to IT. “So if there’s an area where we can bring about efficiency and savings, I think that’s it,” he said.

The chief information officers of the big five intelligence agencies huddled for a 30-day period to develop a strategy for more efficient IT across the IC, Clapper said. Even before that, a group that had been formerly called the “quad” — the CIOs of the Defense Intelligence Agency, the National Geospatial Intelligence Agency, the National Security Agency and the National Reconnaissance Office — had already been working to get rid of IT duplication across their agencies.

“Now, all five of the National Intelligence Program entities, including specifically and especially the Central Intelligence Agency are engaged in this. The Quad has become the Quint,” he said. “The new director of CIA, David Petraeus, is a supporter of that. This will concentrate on integrating a common IT architecture, but allowing for unique mission or agency-specific capabilities. If we execute this right, it will allow us to operate more effectively and efficiently, improve IC integration and information sharing, security and privacy, preserve our mission capabilities, have common access and common improved user experience, increased confidence and trust in the IC’s handling of personal information, and most importantly save money.”

Cuts to overseas facilities

Clapper said one other area he may look to for savings is the intelligence community’s network of overseas facilities. He said closures will not begin right away, but it is an area the DNI will be examining over the coming years. One of the reasons Clapper added facilities to the portfolio of the DNI’s acquisition and technology directorate was to look at the issue from an intelligence community-wide perspective, he said.

As for areas in which the IC will try to avoid cuts, Clapper said agencies will do their best to protect their workforces of federal employees, but that means the contractor workforce will have to come down.

“I say that as someone who was a contractor, and I’m the first to acknowledge the hugely important role contractors play,” he said. “If all contractors failed to come to work tomorrow, the IC would stop. But we’re all going to have to share in the pain.”

The widespread use of service contracting was the way the intelligence agencies were able to quickly expand their workforce in the years after Sept. 11, Clapper said. For the past five years, intelligence agencies have been trying to convert those contracted jobs to federal civilian positions.

But, he said, generous intelligence budgets over the past decade let the intelligence community continually add contractors to its workforce without much of a second thought.

“In retrospect, maybe we weren’t as disciplined as we should have been,” he said. “Now, we’re going to have to be.”


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