Carter Updates Industrial Leaders on ‘Better Buying Power’

WASHINGTON, July 19, 2011 — The offi­cial who leads the Pentagon’s plan to ensure bet­ter val­ue to tax­pay­ers and warfight­ers from the Defense Department’s bud­get pro­vid­ed an update on progress to indus­tri­al lead­ers yes­ter­day.

Ten months after intro­duc­ing the 23-point “Bet­ter Buy­ing Pow­er” ini­tia­tive, Ash­ton B. Carter, under­sec­re­tary of defense for acqui­si­tions, tech­nol­o­gy and logis­tics, spoke to the Nation­al Defense Indus­tri­al Asso­ci­a­tion about progress made toward max­i­miz­ing every dol­lar spent.

The ini­tia­tive is built on tar­get­ing afford­abil­i­ty, reward­ing pro­duc­tiv­i­ty, pro­mot­ing com­pe­ti­tion, improv­ing trade­craft and reduc­ing bureau­cra­cy to get the most out of each Defense Depart­ment bud­get dol­lar.

“For every 30 cents we spend to devel­op and acquire a defense sys­tem, we spend 70 cents to sus­tain them, result­ing in a $100 mil­lion annu­al main­te­nance bud­get,” he said. “For every 45 cents we spend on goods, weapons sys­tems and things, we spend 55 cents on ser­vices, for a total of $200 mil­lion.”

The point, he added, is that Pen­ta­gon offi­cials need to take a com­pre­hen­sive look at spend­ing, includ­ing things that can become options in meet­ing Pres­i­dent Barack Obama’s man­date to save mon­ey while keep­ing nation­al secu­ri­ty in mind.

“Pres­i­dent Obama’s planned defense bud­gets are robust,” he said. “They’re strong and will stay so. We are, after all, involved in two major ongo­ing con­flicts [and] oper­a­tions in Libya, and the world is still a dan­ger­ous place.”

But Oba­ma, Pen­ta­gon lead­er­ship and Con­gress also have made it clear that the nation­al secu­ri­ty bud­get — which includes the defense bud­get and totals about 20 per­cent of the total fed­er­al bud­get — must be a part of the over­all pur­chase equa­tion over the next dozen years, Carter told the group.

“Pres­i­dent Oba­ma specif­i­cal­ly [wants] over $400 mil­lion in reduc­tions over the next 12 years,” he said. “To assess how to accom­plish the task the pres­i­dent has laid out, the depart­ment has under­tak­en a com­pre­hen­sive review of the impact of such reduc­tions, … and that review is ongo­ing.”

The way gov­ern­ment and indus­tri­al lead­ers think must change, Carter said.

“This new era will require a dif­fer­ent mind­set for our gov­ern­ment and indus­try man­agers — you and us — and their con­gres­sion­al over­seers,” Carter told the indus­try lead­ers. “[We are] a gen­er­a­tion who has grown accus­tomed over the post-9/11 decade to cir­cum­stances in which we could always reach for more mon­ey when we encoun­tered man­age­r­i­al or tech­ni­cal prob­lems or a dif­fi­cult choice,” he said. “Those days are gone.”

And it’s not sim­ply a mat­ter of cut­ting from our cur­rent plans and activ­i­ties, he not­ed.

“Cut­ting capa­bil­i­ty and adjust­ing strat­e­gy might be nec­es­sary, but they are where we should go only after exam­in­ing all the options,” he said. “The pres­i­dent, sec­re­tary of defense and the tax­pay­er are going to expect us to make every dol­lar we do get count. … This is some­thing the coun­try should expect no mat­ter what size the defense bud­get is.” The Bet­ter Buy­ing Pow­er ini­tia­tive is a response to that chal­lenge, Carter said.

“Peo­ple ask me, ‘Well, can you suc­ceed at this?’” he said. “I think we can. … We have a very clear roadmap [and] clear and rea­son­able objec­tives com­ing from tax­pay­ers, warfight­ers and our lead­er­ship. We also have the staunch sup­port of the pres­i­dent, sec­re­tary of defense and Con­gress.”

Carter’s final mes­sage to the indus­tri­al lead­ers was that the Defense Depart­ment needs the capa­bil­i­ties they can pro­vide, but also needs them to be afford­able.

“What­ev­er you’re doing for us, make it pos­si­ble for us to con­tin­ue to afford it,” he said. “Togeth­er, let’s bend so we don’t need to break our pro­grams and activ­i­ties, … and this way, I’m sure we can suc­ceed.”

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)

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