Defense experts school Congress on waste

The Defense Department is spending more money and getting less out of it, defense analysts told Congress.

Lawmakers and Defense Department officials have been saying throughout the budget process that the Defense budget barely covers what the military needs to counter possible threats.

While DoD is spending more money it’s receiving less in return, and defense analysts are giving Congress solutions for cutting back on wasteful infrastructure and bureaucratic excess that they say is holding back the department.

“The growth in Defense infrastructure has been continuous. The tendency has been to add, rather than subtract. As we have added more staff, more layers and more infrastructure, we have slowed the decision process, expanded the number of players and made the overall system more risk adverse, at a time when we need to take more risk and make quicker decisions,” Arnold Punaro, a member of the Defense Business Board, told the Senate Armed Services Committee on Nov. 17.

The DoD is spending more now than it spent during the peak of President Ronald Reagan’s buildup of the military. However, war fighting forces are 40 percent to 50 percent smaller, Punaro said. He added that infrastructure within DoD is costing about $240 billion and using more than 1 million people.

“The defense agencies have grown in number, scope and cost, and they’re not just defense agencies. These are large business enterprises that account for over 20 percent of all the money that DoD spends,” Punaro said.

Focusing on internal and management matters

The defense budget for fiscal 2016 is looking like it will be about $607 billion.

To help solve DoD’s excess spending problem, former U.S. Comptroller General David Walker proposed adding a high-level defense executive for management.

The position would be a deputy secretary to which all key DoD-wide management functions would report. This deputy would focus on internal and management matters, while the other deputy position, currently held by Bob Work, would focus on policy and external matters.

“The responsibility for the overall business transformation effort needs to be a full-time endeavor, and it needs to be led by a person with an appropriate level of expertise and prior experience,” Walker said.

Both Walker and Punaro noted that DoD is currently organized and operating under management models popular in the 1950s. Walker said there are far too many uniformed personnel in civilian positions, which is driving up cost.

Walker said there needs to be a fundamental review and reassessment of the current organizational structure, operational and personnel practices within DoD.

Right now there are 28 layers of bureaucracy in DoD and more than 330,000 active duty military performing commercial activities that could be done by civilians or contractors, Punaro said, adding that number needs to be reduced.

“Between [the Office of the Secretary of Defense], the Joint Staff, service secretaries, military staff, the combatant commanders and their staffs, and the various standing groups and committees such as the Joint Requirements Oversight Council, command action groups, there are far too many management layers populated by well-meaning officials and officers, who feel they have a major role in any issue, large or small,” he said.

Finding money in BRAC and business practices

Punaro suggested requiring DoD to establish a firm baseline of headquarters, organizations and activities. He said DoD needs to report its annual Defense Manpower Requirement report to reflect the full life cycle costs of personnel and not just the budgeted costs.

Punaro said DoD should reduce the number of senior officials, including undersecretaries, principal deputies and deputy assistants.

Another option for cutting back on DoD’s high infrastructure and overhead costs is to do another round of base realignment and closures (BRAC), the experts said.

DoD has more bases than it currently needs and had a commission in 2005 to close some of them. Congress has been wary of additional closures. Defense officials say that is because they are trying to protect their parochial interests and keep jobs in their districts. The 2016 Defense authorization bill has a provision ensuring BRAC will not happen in this fiscal year.

Purano also suggested looking at business practices. A 2014 Defense Business Board study stated that DoD spends about $100 billion annually on core business processes like human resource and health care management. DoD can save $125 billion over the next five years by modernizing business processes, supporting systems and creating an agile enterprise shared services organization.

Congress has added a provision in the Defense authorization act to cut 25 percent of its workforce over the next five years. That will cut about $10 billion by 2018.

DoD saw the signs and directed the cut with or without a congressional requirement in September.

“We anticipate Congress will require a 25 percent reduction in the funding of DoD headquarters in lieu of the 20 percent requirement previously established by the department,” a September memo signed by Deputy Defense Secretary Bob Work stated. “Even if Congress fails to act, the department needs the savings that will be achieved through this reduction to fund higher priority requirements in support of the warfighter and to address underfunded strategic needs.”

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