USA – Defense Officials Testify On Cost-saving Measures

WASHINGTON – Senior Defense Department officials here today detailed the department’s efforts to redirect $100 billion in defense spending over the next five years.

„This effort is not just about the budget, it is also about operational agility,“ Deputy Defense Secretary William J. Lynn III said. „We need to ensure the department is operating as efficiently and effectively as possible.“

Lynn, along with Ashton B. Carter, undersecretary of defense for acquisition, technology and logistics, and Marine Corps Gen. James E. Cartwright, vice chairman of the Joint Chiefs of Staff, testified before the Senate Armed Services Committee on the efficiencies initiatives outlined Sept. 14.

The guidance expanded cost-saving measures Gates mandated June 28, and outlined 23 principal actions organized in five major areas:

— Target affordability and control cost growth;
— Incentivize productivity and innovation in industry;
— Promote real competition;
— Improve tradecraft in services acquisition;
— Reduce nonproductive processes and bureaucracy.
As the department projects lower future budget increases than those over the past decade, it must fundamentally change the way it does business, Lynn said.

„To sustain the current military force structure, which we must do given the security challenges this country faces, requires the equivalent of real budget growth of 2 to 3 percent,“ Lynn said. „The overall defense budget, however, is projected to rise in real terms by about 1 percent.“

Bridging the gap, he said, requires reducing the „tail“ of massive overhead costs and structures, and redirecting those dollars to the „tooth“ of fighting forces and modernization accounts.

The department will achieve that resource shift, Lynn said, by reducing executive and flag officer billets and their staffs, shedding overlapping commands and organizations, and trimming the role and cost of support contractors.

In a four-track approach, Lynn said, Gates directed that the services identify $100 billion in savings over five years to invest in high-priority needs, that the department seek suggestions for efficiencies from experts, think tanks and other sources outside normal channels, that it review its organization and operations to effect systemic improvements, and to take specific actions to reduce overhead.

„With regard to track four,“ he said, „the secretary announced August ninth specific areas where the department can take action now to reduce inefficiency and overhead.“

Gates‘ Aug. 9 announcement included his proposal to close Joint Forces Command based in Norfolk, Va.

During his opening statement today, Cartwright said Jfcom had accomplished its primary mission to establish „jointness“ throughout the military.

„It is our goal to reduce unintended redundancies and layering,“ Cartwright said, „to more clearly align operational responsibilities with service, train and equip functions.“

Meanwhile, future military functions would „move toward a construct of combined, joint, interagency task force organizations or centers,“ the general said.

During his testimony, Carter said the department’s reduction targets were very reasonable.

„We recognize the change in our business practices will take time, and require the close contribution of our industry partners,“ he said.

Carter said the alternative would be broken or cancelled systems, uncertainty for industry, erosion of taxpayer confidence and „lost capability for the warfighter in a dangerous world.“

„Not only can we succeed in this endeavor, but we really have to,“ he said.

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

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