By Jared Serbu
Reporter
Federal News Radio

The Defense Department will “undoubtedly” be cancelling more major weapons systems as it seeks out further cost savings, possibly as early as the 2013 budget cycle, the Pentagon’s acquisition chief said Wednesday.

But Ashton Carter, DoD’s undersecretary for acquisition, logistics and technology, told attendees at a Heritage Foundation event that major weapons systems make up only about 1/7 of the military’s overall budget, and that the department would likely find more significant savings elsewhere.

“It’s very easy to pick programs, because they all have a name, and they’re discrete, and so they’re easy to identify and they’re easy (for reporters) to write about,” he said. “But it’s not where the money is.”

The Pentagon already has been chasing lower costs through Secretary Robert Gates’ much-touted efficiency initiatives and in acquisitions, specifically through Carter’s Better Buying Power initiative. But President Obama upped the ante with his deficit reduction speech last week, saying he wanted to see $400 billion in savings in national security spending over the next dozen years.

“As we assess how to accomplish the task the President has laid out, we will need to undertake a comprehensive review of the impact of budget reductions in fiscal year 2013 and beyond on force structure and capability, and ultimately on choices about missions and America’s role in the world,” Carter said.

Carter said Gates still is setting the parameters for that review, but he said it was clear to Pentagon leaders that the era of ever-increasing military budgets was over, and that the nation’s political leadership and taxpayers wanted to ensure every dollar of spending the military receives is put to good use.

While he said there would be weapons system cancellations, Carter said that after program terminations that already have saved the Pentagon $300 billion, they are approaching the point where all that’s left are programs that are critically needed.

“I’m trying to draw people’s attention to the other six-sevenths of the Defense budget other than what’s tied up in programs,” he said.

Carter said, for example, DoD spends twice as much for service contracts as it does for major weapons systems. Improving the department’s tradecraft in service acquisition, one of the five areas in DoD’s better buying power roadmap, is an area he said is ripe for savings.

“There is a textbook, so-to-speak, for good tradecraft in services acquisition,” he said. “We just don’t follow it. If you look at how we acquire services around the department, everybody does it differently. Not everybody can be right.”

One reason for the lack of commonality, he said, is that most of the DoD employees handling service contracting are not acquisition professionals, but rather experts in other areas who need small service contracts to accomplish their own missions.

“It’s a collateral duty for them, so it’s no surprise they’re not very good at it,” he said. “I do not intend to make them into experts in it, I intend to help them get better at it. I believe, mostly because we haven’t done that yet, that we’ll be able to realize some great productivity in the acquisition of services.

Carter is hoping to hold down Defense costs in other ways, such as not beginning programs unless they can be proven to be affordable over the long term, using contract types that reward vendors for productivity, trying to increase competition and eliminating bureaucratic processes that don’t add value.

“I think we can succeed,” he said. “And I would also say to others who hesitate to go down this road that they should consider the alternative. And the alternative is broken programs, cancelled programs, budget turbulence, uncertainty, erosion of the taxpayers’ confidence that their money is well spent, and ultimately and most damagingly, foregone capability to warfighters.”

This story is part of Federal News Radio’s daily DoD Report. For more defense news, click here.

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