A trillion dollar reduction in projected defense budgets over the next decade is forcing the Department of Defense (DoD) to propose some very painful decisions. For example, the Army has already cancelled the planned procurement of its signature Ground Combat Vehicle. It also plans to reduce Active Component end-strength by between 120,000 and 150,000. The Air Force wants to retire its entire fleets of A-10 and U-2 aircraft. The Navy has cut the buy of its Littoral Combat Ship nearly in half and may not be able to refuel the nuclear reactor of the USS George Washington (CVN-73). The Marine Corps will reduce its end-strength by more than 12,000 and will have to get by with fewer amphibious warfare ships than it needs.
Less visible but equally worrisome are the cuts that will have to be made in readiness despite the fact that the reductions in force structure discussed above are intended to save money that will go to readiness. Because of sequestration, in FY 2013 the Services were forced to reduce training activities, limit scheduled maintenance and buy fewer spare parts. The same would have happened this year were it not for the Ryan-Murray agreement that added money back into the defense budget. Although the Pentagon is cutting force structure in order to preserve money for readiness and modernization, it is impossible to take reductions fast enough not to impact these other accounts.
In addition to shrinking military forces and reducing readiness, DoD also has proposed another round of base closures as well as reforms to pay and benefits. The Army and Air Force have incurred the wrath of their Reserve Component brethren by proposing changes to the size and composition of the Army and Air National Guard in order to provide the optimum mix of capabilities at the lowest cost.
Yet, even as the Pentagon shows the guts to propose slashing the size and capability of the military and take on a whole herd of sacred cows and special interests, it has done relatively little to address the longstanding problem of excessive overhead and inefficient processes in defense operations and acquisition. Yes, Secretary Hagel has ordered a 20 percent reduction in Pentagon staffs but that is a drop in the bucket. There are nearly 800,000 civilian employees of the DoD yet the majority of personnel reductions are being taken by those in uniform.
DoD knows what to do. It needs to reduce the burden of costly regulations it imposes on anyone trying to do business with the Pentagon and stop the demands for more and more audits, reviews and information. Even when DoD purchases commercial items, which it does to reduce the need to pay more for defense-unique products, it demands certified price data, thereby guaranteeing that prices will go up. In fact, DoD needs to do away with its unique accounting system and go with the generally accepted accounting practices used by most of the commercial world.
Another step DoD should take is to make readiness more affordable by embracing Performance-Based Logistics (PBL) in sustainment activities. PBL-like arrangements are widely used in the commercial world where it saves lots of money compared to old-style transactional support and maintenance. The Pentagon’s own acquisition regulations directs the broadest possible use of PBL-based contracting. Yet, DoD has very few PBL-based sustainment contracts.
The Pentagon can muster the courage to put 100,000 soldiers on the street but it cannot take bold steps to reduce its costs of doing business, thereby saving billions of dollars annually that could be used to maintain more force structure and higher states of readiness. Why is it easier for the Pentagon to cut force structure and readiness, thereby increasing the risks to national security, but seemingly so hard for it to make the necessary changes in the regulations, policies and procedures that add so much unnecessary cost to defense activities?
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