By Jason Miller
Executive Editor
Federal News Radio

On the heels of recommendations by the Defense Business Board to reduce rampant duplication of back-office and administrative functions, the Defense Department has begun its cost cutting surgery.

The Pentagon announced Monday that Defense Secretary Gates received a proposal from officials to eliminate a major military command in Norfolk, Va., and try to cut the use outside contractors by 10 percent in 2011.

The recommendation to eliminate the Joint Forces Command is one of the first announcements coming after Gates pledged to move $100 billion from back-office spending to warfighter needs.

The Associated Press has learned that Joint Forces Command will be eliminated and its role absorbed elsewhere within the Defense Department. Gates has long said the Pentagon needs to reduce waste and duplication.

“Although I am still reviewing the specific details of this announcement, Secretary Gates has proposed a number of steps that appear to efficiently find savings within the defense budget without taking away resources from our warfighter,” says Rep. Ike Skelton (D-Mo.), chairman of the Armed Services Committee.

“Supporting the men and women in uniform who protect our nation is a top priority, and I support any responsible shift of funds from overhead costs in order to strengthen the efforts of our brave troops. There are many functions within the Department that are critical to our nation’s defense, and we need to carefully analyze Secretary Gates’ new plan to ensure that no essential programs fall through the cracks. I look forward to holding a hearing on this proposal when Congress returns from the August recess.”

Part of how Gates is expected to save money on contractors is based on what the board found, “it appears that Joint Forces Command (JFCOM) now has more contractors on its payroll than government military and civilian personnel.”

“Joint Forces Command appears to own its own multiple ‘joint commands,'” the board states. “Some of the organizations on this chart appear to have almost the same name and mission. We now have NORTHCOM as a combatant command with focus on the homeland and this command could some of the JFCOM mission. We would hope the Chairman of the Joint Chiefs is looking closely at the possibility of the eliminating redundancies and duplication not only in the Combatant Commands but consider what the military departments could do within their existing capabilities.”

The Defense Business Board also found that DoD’s operations and maintenance budget increases by 3 percent a year–the Pentagon spent $185 billion in 2010 alone-in part because of these duplicative organizations.

Along with merging the JFCOM, DoD continues to look at how best to cut contractor costs.

The board says that a recent document signed by Under Secretary for Acquisition Technology and Logistics Ashton Carter says the number of contractors across DoD is approximately 766,000 at a cost of about $155 billion. This exceeds the 745,000 civil service workforce. This does not include the intelligence organizations, which the board says is not a high confidence figure.

“We have over 340,000 military personnel serving in essentially civilian jobs-jobs that DoD itself characterizes as non-governmental,” the board states. “By conservative estimates, if by removing even 10 percent of the 339,142 people from this category, the department could free-up $5.4 billion for combat purposes.”

DoD spent $376 billion on procurement in 2009, according to the most current data, the board states. DoD spends about $197 billion on services and $179 billion on supplies and equipment through roughly 1,200 contracting activities.

The board reports that DoD spends more than $190 billion a year on logistics and supply chain and almost $37 billion a year on information technology.

“The serious application of proven business processes in these areas to reduce costs would be enough to meet Secretary Gates’ targets well inside the five year target if applied with informed leadership and strong discipline,” the board states.

The Associated Press contributed to this story.

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