SECDEF Cost Reduction Initiatives

[Leatherneck]

In recognition of the realities in today's economy, secretary Gates is proposing a sweeping examination of ways to cut low-priority spending throughout DoD. Some of these are excellent and need to be done; others maybe not so much.

EFFICIENCIES INITIATIVES KEY POINTS
• The task here is not to reduce the Department’s top-line but, rather it is to significantly reduce excess overhead costs and apply the savings to force structure and modernization.
• We embarked on a four-track approach to move the Department towards a more efficient, effective and cost-conscious way of doing business.
1. Earlier this year, the military services were assigned the task of finding more than $100 billion in overhead savings over the next five years. The services will be able to keep any of the savings they generate to invest in higher priority warfighting needs.
2. We are seeking ideas, suggestions and proposals from outside experts such as think tanks and others.
3. SECDEF directed a comprehensive assessment of every aspect of how this department is organized and operated to inform the FY12 budget request.
4. To deal with a number of areas where we can take action now rather than wait for the normal budgeting and program cycle, SECDEF is announcing 8 initiatives and decisions.
   o These are designed to reduce duplication, overhead, and excess in the defense enterprise, and, over time, instill a culture of savings and restraint across DoD.
   o The initiatives vary in size and levels of savings achieved and represent an initial down payment on a comprehensive, department-wide efficiency and savings campaign that will be rolled out as part of the FY12 budget request.
• First, SECDEF directed a reduction of funding for support contractors by 10% a year for each of the next three years. The goal is to reduce the number of contractors that are performing functions that are inherently governmental.
• Second, to address the personnel growth in OSD, the defense agencies, and COCOM staffs, SECDEF has directed a freeze in the number of OSD, defense agencies and COCOM billets at the FY10 levels for next three years.
   o With regard to in-sourcing, no more full-time OSD positions will be created after FY10 to replace contractors except for critical needs.
   o These measures are part of a comprehensive re-baselining of OSD, defense agency and COCOM staffing and organization. Starting essentially from scratch, we will conduct a clean sheet review to determine what our people should be doing, where, and at what level of rank in light of this department’s most urgent priorities by November 1st.
   o As a result of the re-baselining, a minimum reduction of 50% of total growth in billets since 2000. This reduction in civilian senior executive and general and flag officer billets shall be achieved over two years.
• Third, SECDEF directed a freeze at FY10 levels on the number of civilian senior executives, general and flag officer, and PAS positions. By November 1st, we will also assess the number and locations of senior positions as well as the overhead and accoutrements that go with them.
• Fourth, to achieve greater benefits in cost and efficiency through economies of scale, SECDEF directed the consolidation of our IT infrastructure facilities. 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.
• Fifth, to combat the enormous amounts of taskings for reports and studies both from Congress and from OSD, SECDEF directed starting now:
   o Freeze in the number of all DoD-required oversight reports;
   o Immediate cut in the dollars allocated to advisory studies by 25%;
   o Track and publish the actual cost of preparation of each reports and studies prepared by DoD in the front of each document; and
   o A comprehensive review of all oversight reports and use the results to reduce the volume generated internally while engaging the Congress on ways to meet their needs while working together to reduce the number of reports by October 1st.
• Sixth, all told, OSD funds 65 boards and commissions at an annual cost of $75 million. Therefore, SECDEF directed a review of all outside boards and commissions, for the purpose of
   o Eliminating those no longer needed;
   o Focusing the efforts of those that continue to be relevant;
   o Cutting overall funding available for studies tasked by remaining boards and commissions by 25% in FY11.
• Seventh, SECDEF directed a zero-based review of all of the department’s intelligence missions, organizations, relationships, and contracts with the goal to eliminate needless duplication to be completed by November 1st. In addition, SECDEF directed an immediate 10% reduction in funding for advisory and assistance contractors in this area and a freeze of the number of senior executive positions in defense intelligence organizations.
• Eighth, in addition to flattening and trimming structures, SECDEF over the next 6-12 months will eliminate 2 organizations and recommend the closure of another that perform duplicative functions and/or outlived their original purpose.
   o Elimination of the Assistant Secretary of Defense Networks Integration and Information, and J6 function, which deal with enterprise IT and hardware issues. Their essential missions will be performed by other organizations. A re-fashioned Defense Information Systems Agency will perform the department’s CIO function.
   o Elimination of the Business Transformation Agency (BTA), which performs day-to-day oversight of individual acquisition programs, a function largely performed by a number of other organizations. BTA’s essential responsibilities will be shifted to the DCMO.
   o Recommend the Closure of Joint Forces Command (JFCOM) which was established to infuse jointness into everything the military does, especially the training and providing of forces for operations. Overtime it has created an unneeded extra layer and step in the force management process. JFCOM’s force management and sourcing functions will be assigned to the Joint Staff while the remaining responsibilities will be evaluated and those determined to be essential will be re-assigned to other entities.
   o As a result of closing or consolidating these three organizations, a number of civilian employees and contractors will no longer work in the Department.
• To see these initiatives through from announcement to action to measurable results over the next 90 to 120 days, SECDEF has appointed a task force chaired by his chief of staff.
   o This task force will develop action plans and oversee their implementation and eventual transition to the appropriate department leadership.

The elimination of JFCOM is one I support. The downsizing of the DIA and associated intel organizations is dangerous, IMO.

What say you?

TC

[SADShooter]

Once upon a time, I would have argued against intelligence "duplication". My sense now is that while Defense Intelligence is still a political animal, we need the infrastructure to counter the even more radical politicization of CIA and the civilian intelligence establishment. We also face specific military threats (Iran/Norks, etc.) which DIA should have a prominent role in evaluating.

It's also interesting that, while I'm sure there is an entirely legitimate opportunity for cost-cutting within DoD, the proposed cuts to other discretionary .gov spending are virtually non-existent, and the very idea of cutting massive entitlement spending is still only a vague notion.

For disclosure purposes, my job is largely Fed-funded.

[makattak]

It's also interesting that, while I'm sure there is an entirely legitimate opportunity for cost-cutting within DoD, the proposed cuts to other discretionary .gov spending are virtually non-existent, and the very idea of cutting massive entitlement spending is still only a vague notion.

That's because the only area of "waste" the Democrats can see fall under the defense budget.

They look at Europe and think "If only we could spend 1-2.5% of our GDP on Defense! We'd be able to afford European socialism!"

They don't realize the only reason Europe CAN spend less than 3% of GDP on defense is because of how much the US spends. Pax Americana disappears if we cut our defense spending in half. (And half only gets us to just about 3%. I'm sure they'd wish we were at half of that...)

[longeyes]

+1

And ditto Canada.

[MechAg94]

Yeah, I was thinking the same thing.  Democrats in charge and the only thing they want to cut is defense.  What else is new?

[Hawkmoon]

I'm sure hammer and toilet seat manufacturers across the country are gearing up to unleash legions of lobbyists even as I speak type.

[Leatherneck]

Bear in mind that these are proposals from Gates, a Bush appointee, in reaction to the Obama-induced poverty in once-rich America.

TC

[Nitrogen]

Defense, at least to me, and admitted proto-liberal, is a sacred cow that could use some cutting.

Now, do I trust this administration to cut properly?  No.

[roo_ster]

I'm sure hammer and toilet seat manufacturers across the country are gearing up to unleash legions of lobbyists even as I speak type.

I'd suggest reading "Blind Man's Bluff."

Hint: All those black programs are not called out in the budget explicitly, but the dollars get counted in elsewhere: 

"Howdy Colonel!  You're running a fine acquisitions program there, as PM-Widget, yessiree Bob!.  On schedule.  On budget.  Meets requirements.  Good stuff.  Now, stuff another billion dollars into your budget you have to account for, but not get the use of. What?  You say that will result in a 25% budget overrun?  Suck it up, buttercup.  I don't care if you have to inflate the cost of the toilet seats and bolts by 1000% and every other bit of hardware by 20%.  Sure, you'll get vilified by congresscritters who know part of your budget hides part of a black program but will grand stand anyway.  Hey, I hear there are openings at our air base in Greenland...I thought you might come around, Colonel.  Good luck with your creative accounting!"

[Leatherneck]

Such a jejune comment degrades adult conversation.

TC

"Howdy Colonel!  You're running a fine acquisitions program there, as PM-Widget, yessiree Bob!.  On schedule.  On budget.  Meets requirements.  Good stuff.  Now, stuff another billion dollars into your budget you have to account for, but not get the use of. What?  You say that will result in a 25% budget overrun?  Suck it up, buttercup.  I don't care if you have to inflate the cost of the toilet seats and bolts by 1000% and every other bit of hardware by 20%.  Sure, you'll get vilified by congresscritters who know part of your budget hides part of a black program but will grand stand anyway.  Hey, I hear there are openings at our air base in Greenland...I thought you might come around, Colonel.  Good luck with your creative accounting!"

[Waitone]

To the extent the intel community looks after the interests of the US, I would consider it bad mojo to look for cost saving there before oh, say congressional pensions.

That said, I'm increasingly concerned that US intel efforts are less focused on the US and more pointed toward global institutions.  Hack away if my fears are correct.

[makattak]

To the extent the intel community looks after the interests of the US, I would consider it bad mojo to look for cost saving there before oh, say congressional government pensions.

That said, I'm increasingly concerned that US intel efforts are less focused on the US and more pointed toward global institutions.  Hack away if my fears are correct.

Fixed that for you.

[kgbsquirrel]

A first term congresscritter, last I checked, starts at $157,000 a year, tax free. A newly inducted recruit at the paygrade of E-1 starts at $16,000 a year and is taxed, even a fresh officer starts at around $33,000. This of course also doesn't cover the per diem, staff and many other benefits said congresscritter receives.

I would fully support putting representatives and senators on a similar scale to the military paychecks, perhaps split the difference between E and O scales and with a similar pension setup requiring 20 years of service in order to collect 50% of the average of the top three collecting years, scaling up to 75% at 30 years of service, but no higher.

[MechAg94]

Defense, at least to me, and admitted proto-liberal, is a sacred cow that could use some cutting.

Now, do I trust this administration to cut properly?  No.

I figure that right now there is no place in the federal govt that couldn't use a lot of fat trimming and middle manager cutting.  My problem is that in the last 20 or 30 years I am aware of, defense is the only group that has been cut to any great extent.  IMO, if you cut everything else to the point that Defense is back to 30% or 40% or more of the budget, then you can start hitting it again.

[makattak]

I figure that right now there is no place in the federal govt that couldn't use a lot of fat trimming and middle manager cutting.  My problem is that in the last 20 or 30 years I am aware of, defense is the only group that has been cut to any great extent.  

As far as I know, it's the only place actual cuts have been enacted.

All the others are "cuts in the growth" which somehow becomes "cuts" in Washington.

We need REAL cuts. Everywhere. Judging by what happened after we needed the military after the last cuts, I suggest we start in more useless places first.

E.g. DOE. Both of them.

[MechAg94]

Actually these days, cuts are tax reductions since they have to be "paid for". 

I would also argue that DOD is by far NOT a sacred cow to pretty much anyone.  Sure, it is considered an important role of govt by a lot of people, but the Defense budget gets reviewed, adjusted, cut, increased, and changed every single year.  It probably gets more attention than just about any other significant govt expenditure except maybe NASA

[SADShooter]

Don't forget all the non-defense appropriations tacked on to the DoD budget. An example I'm familiar with, the CDMRP, or Congress Directed Medical Research Program, grants millions per year for biomedical research. Some is directly relevant to military needs like burn trauma and traumatic brain injury, but the program also spends money on breast and prostate cancer research, paralleling/duplicating activities at NIH and NSF which receive much more scrutiny.

[cassandra and sara's daddy]

, tax free


where were you checking?
http://usgovinfo.about.com/od/uscongress/a/congresspay.htm

[kgbsquirrel]

, tax free


where were you checking?
http://usgovinfo.about.com/od/uscongress/a/congresspay.htm

That link you posted says only that they now pay into Social Security, not Federal Income Tax, not Medicaid and Medicare, just SS, something I should note has always been proclaimed to not be a tax either, as was the excuse for them to still be pulling it out of my paycheck when I was in Afghanistan, a supposed "tax free" combat zone. Oh, and I was wrong about the starting pay for a congress critter, it isn't 157,000... it's 169,300 dollars. Thank you for the correction.

[cassandra and sara's daddy]

That link you posted says only that they now pay into Social Security, not Federal Income Tax, not Medicaid and Medicare, just SS, something I should note has always been proclaimed to not be a tax either, as was the excuse for them to still be pulling it out of my paycheck when I was in Afghanistan, a supposed "tax free" combat zone. Oh, and I was wrong about the starting pay for a congress critter, it isn't 157,000... it's 169,300 dollars. Thank you for the correction.

where were you checking again  i missed that
http://www.ntu.org/on-capitol-hill/pay-and-perks/do-members-of-congress-pay-1.html


http://www.ehow.com/about_5598628_do-pay-income-tax-retirement_.html


http://www.senate.gov/reference/resources/pdf/RL30631.pdf


http://www.conginst.org/index.php?option=com_content&task=blogcategory&id=6&Itemid=32


take your pick  you're welcome

[kgbsquirrel]

where were you checking again  i missed that
http://www.ntu.org/on-capitol-hill/pay-and-perks/do-members-of-congress-pay-1.html


http://www.ehow.com/about_5598628_do-pay-income-tax-retirement_.html


http://www.senate.gov/reference/resources/pdf/RL30631.pdf


http://www.conginst.org/index.php?option=com_content&task=blogcategory&id=6&Itemid=32


take your pick  you're welcome

I'll bow to the NTU report, but again half your links referred to social security and retirement annuities when the topic was income taxes on their standard pay. I do also like how the NTU page states that they've given themselves some nice tax loopholes just for themselves and another part of their website details the "Cost of Living Adjustments" that they get each year (in order to dodge the 27th amendment.)

[cassandra and sara's daddy]

i sand bagged you  mom worked on the hill and so did i and lil bro for a while  kid sis worked for a congressman for a while as an aid.  i hear a lot of "stuff" about washington and laugh  should be a special section of snopes for dc urban legends