Sec. Gates Announces Efficiencies Initiatives
(Source: U.S Department of Defense; issued August 9, 2010)
Today, Secretary of Defense Robert M. Gates announced a series of initiatives designed to reduce overhead, duplication, and excess in the Department of Defense, and, over time, instill a culture of savings and restraint in America’s defense institutions.

These initiatives represent the latest of the secretary’s efforts to re-balance the priorities of the department and reform the way the Pentagon does business.

As part of the fiscal 2010 budget, the department curtailed or cancelled nearly 20 troubled or excess programs - programs that if pursued to completion would have cost more than $300 billion. Additional program savings have been recommended in the defense budget request submitted this year.

In May, the secretary called on the department to take a hard, unsparing look at how it is staffed, organized, and operated. The purpose was not to reduce the department’s top line budget - which he considers the minimum needed to sustain a military at war and prepare for future threats - but to significantly reduce its excess overhead costs and apply the savings to force structure and modernization.

“It is important that we not repeat the mistakes of the past, where tough economic times or the winding down of a military campaign leads to steep and unwise reductions in defense,” Gates said. “As a matter of principle and political reality, the Department of Defense cannot expect America’s elected representatives to approve budget increases each year unless we are doing a good job, indeed everything possible, to make every dollar count.”

Earlier this summer, the department began a comprehensive effort along several tracks to gain efficiencies, reduce costs, and improve the effectiveness of the DoD enterprise, the results of which will be rolled out as part of the fiscal 2012 budget request. The secretary believes the department can take the following actions immediately rather than waiting for the normal budgeting and programming cycle.

-- The secretary directed a reduction of funding for support contractors by 10 percent 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.

-- To address the personnel growth in the Office of the Secretary of Defense (OSD), the defense agencies, and Combatant Command (COCOM) staffs, the secretary of defense has directed a freeze in the number of OSD, defense agencies and COMCOM billets at the fiscal 2010 levels for next three years.

* With regard to in-sourcing, no more full-time OSD positions will be created after fiscal 2010 to replace contractors except for critical needs.

* These measures are part of a comprehensive re-base lining 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 Nov. 1.

* As a result of the re-base lining, there will be a minimum reduction of 50 percent 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.

-- The secretary directed a freeze at fiscal 2010 levels on the number of civilian senior executives, general and flag officer, and PAS positions. By Nov. 1, we will also assess the number and locations of senior positions as well as the overhead and accoutrements that go with them.

-- To achieve greater benefits in cost and efficiency through “economies of scale,” the secretary of defense directed the consolidation of our information technology 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.

-- To combat the enormous amounts of taskings for reports and studies both from Congress and from OSD, the secretary of defense directed starting now:

* Freeze in the number of all DoD-required oversight reports;
* Immediate cut in the dollars allocated to advisory studies by 25 percent;
* Track and publish the actual cost of preparation of each reports and studies prepared by DoD in the front of each document; and
* 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 Oct. 1.

-- The Office of the Secretary of Defense funds 65 boards and commissions at an annual cost of $75 million. Therefore, the secretary of defense directed a review of all outside boards and commissions, for the purpose of:
* Eliminating those no longer needed;
* Focusing the efforts of those that continue to be relevant;
* Cutting overall funding available for studies tasked by remaining boards and commissions by 25 percent in fiscal 2011.

-- The secretary 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 Nov. 1. In addition, the secretary of defense directed an immediate 10 percent 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.

-- -In addition to flattening and trimming structures, the secretary of defense over the next six to 12 months will eliminate two organizations and recommend the closure of another that perform duplicative functions and/or outlived their original purpose.

* Elimination of the assistant secretary of defense networks integration and information, and J6 function, which deal with enterprise information technology 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.
* 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 deputy chief management officer.
* 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. Over time, 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.
* 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, the secretary has appointed a task force chaired by his chief of staff. This task force will develop action plans and oversee their implementation and eventual transition to the appropriate department leadership.

The initiatives announced today represent the last of a four-track effort begun earlier this summer:

-- In June, 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.

-- At the same time the department began seeking ideas, suggestions and proposals from other than official channels, including outside experts, think tanks and DoD employees who are being asked to solicit ideas directly via the Internet.

-- The secretary directed a comprehensive assessment of every aspect of how this department is organized and operated to inform the fiscal 2012 budget request.

“Instilling habits of restraint, of subtracting as well as adding, of elevating affordability on a par with desirability, is a project of years in the making,” the secretary concluded in his statement today. “This will reflect itself in ways large and small, substantive and symbolic. My hope and expectation is that the efforts we have launched will lead to the kind of cultural changes that over time become part of this department’s DNA and institutional memory.”

Click here for the transcript of Gates' Aug. 9 press conference, on the Pentagon website.

Gates Puts Meat on Bones of Department Efficiencies Initiative
(Source: U.S Department of Defense; issued August 9, 2010)
WASHINGTON --- Defense Secretary Robert M. Gates is putting meat on the bones of his initiative to reform the way the Pentagon does business and to eliminate duplicative, unnecessary overhead costs.

During a Pentagon news conference today, Gates said the steps he is taking will help the U.S. military fight the wars it faces now, and help ready the force for the wars it may face in the future. With these moves, the secretary said, he wants to instill a culture of saving in the department.

Money saved with these efficiencies will go back into funding needed military capabilities. “To be clear, the task before us is not to reduce the department’s top-line budget,” Gates said. “Rather, it is to significantly reduce its excess overhead costs and apply the savings to force structure and modernization.”

President Barack Obama has programmed in real growth of between 1 and 2 percent into future years’ defense budgets, but that is not enough to maintain today’s warfighting capabilities and modernize, which requires roughly 2 to 3 percent real growth. The savings in overhead are crucial to making up that difference, Gates said.

Earlier this year, the secretary tasked the services to find $100 billion in overhead savings over the next five years. “This exercise is well under way, as the services are evaluating their programs and activities to identify what remains a critical priority and what is no longer affordable,” he said. “They are all planning to eliminate headquarters that are no longer needed and reduce the size of the staffs that remain.”

Gates also authorized the services to consider consolidation or closure of excess bases and other facilities. It is a measure of Gates’ determination to save money that he has proposed this, he noted, since Congress has made it almost impossible to close bases. “But hard is not impossible, and I hope Congress will work with us to reduce unnecessary costs in this part of the defense enterprise,” he said.

The secretary also announced a number of immediate steps he will take. Gates said he will reduce the funding for support contractor personnel by 10 percent a year for the next three years.

Gates is freezing the number of office of the secretary of defense, defense agency and combatant command manpower positions at the fiscal 2010 levels for the next three years. He said this is just a first step to studying these leadership organizations.

“We will conduct a ‘clean-sheet review’ to determine what our people should be doing, where, at what level of rank in keeping with the department’s most critical priorities,” he said.

He is also freezing the number of senior Defense Department leaders at fiscal 2010 levels. He will appoint a senior task force to assess the number of positions for general and flag officers, senior executive service employees and political appointees. “At a minimum, I expect this effort to cut at least 50 general and flag officer positions and 150 senior civilian executive positions over the next two years,” he said.

Gates also pushed the potential for economies of scale – especially in the information technology arena.

“All of our bases, operational headquarters and defense agencies have their own IT infrastructures, processes and application-ware,” Gates said. “This decentralized approach results in large cumulative costs, and a patchwork of capabilities that create cyber vulnerabilities and limit our ability to capitalize on the promise of information technology.” The secretary directed the department to increase the use of common information technology functions.

The Pentagon is awash in reports; the secretary is freezing the overall number of required oversight reports, and he will immediately cut by a quarter the money allocated to the effort.

The department similarly has a number of boards and commissions that have outlived their usefulness. He directed that the department eliminate those boards no longer needed and an overall funding cut of 25 percent for these boards.

The secretary also is looking for efficiencies in the department’s intelligence apparatus. He has directed an immediate 10 percent reduction in funding for intelligence advisory and assistance contracts and a freeze in the number of senior executive service positions. He also is moving to end needless duplication in the intel business.

“I have directed a zero-based review of the department’s intelligence missions, organizations, relationships and contracts to be completed by Nov. 1,” Gates said. James Clapper, the new director of national intelligence, has expressed interest in doing the same for civilian intelligence organizations, the secretary said.

Finally, the secretary is closing two defense offices and recommending the closure of a combatant command. The secretary is eliminating the offices of the assistant secretary of defense for network integration and the Joint Staff’s section for command, control, communications, and computer systems. “Their operational functions will be assigned to other organizations, and most of their acquisition functions will transfer to acquisition, technology and logistics,” Gates said.

Gates also will eliminate the Business Transformation Agency. The agency – with 360 people and a budget of $340 million – will transfer responsibilities to other offices.

The secretary is recommending eliminating U.S. Joint Forces Command. The command is the arbiter and proponent for joint training, doctrine and operations in the military, he said, but it means an extra layer in the bureaucracy. It is one of five four-star commands that need to be involved in sending a military working dog team to Afghanistan, Gates said during a speech in Abilene, Kan., earlier this year.

But driven by joint experience in Afghanistan, Iraq and around the world, the secretary noted, the need for such a joint advocate has lessened. Training and generating joint forces still is important, as is developing and testing joint doctrine. But it does not “require a separate four-star combatant command, which, in the case of [Joint Forces Command] entails about 2,800 military and civilian positions and roughly 3,000 contractors of all kinds at an annual cost of at least $240 million to operate,” Gates said.

The secretary said the department will help employees affected by these closings.

Gates also wants military personnel and civilians to think outside the box. He wants them to submit their ideas for saving resources, reducing the layers of the organizations and eliminating duplication and overhead.

“Within the department, we are launching an online contest for the purpose of soliciting and rewarding creative ideas to save money and use resources more effectively,” he said.


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