Panel Urges Deep

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Panel Urges Deep Cuts in DoD Staff

By Neil Munro
Staff Writer

A top-level panel appointed by Defense Secretary William Cohen is eyeing a 30 percent cutback in Pentagon staff and the elimination of seven of 11 assistant secretaries of defense, executives familiar with the group's draft report say.

Cutting one-third of the 1,800 officials working for the Office of the Secretary of Defense would yield little immediate savings, but would reduce bureaucratic obstacles to controversial decisions such as the elimination of costly procurement programs, said an industry official.

The report, expected to be delivered to Cohen by the end of the month, is likely to provoke a firestorm of opposition. For example, several members of Congress would probably oppose the task force's call to eliminate the Ballistic Missile Defense Organization, which develops missile defense technology, said a defense official. The plan also would eliminate the Defense Airborne Reconnaissance Office, which is developing a fleet of unmanned spy aircraft.

Rhett Dawson, a member of the panel, declined to comment on the report's contents. However, he said the panel would first recommend significant changes to the Office of the Secretary of Defense before urging changes in other elements of the Defense Department.

"We'll do it in sections. OSD first, then the Joint Chiefs of Staff, the defense agencies, services secretaries and process improvement ... [meaning] the PPBS," said
Dawson, who is president of the Washington-based Information Technology Industry Council.

Formally known as the Planning, Programming and Budgeting System, the PPBS was established in the 1960s by then-Defense Secretary Robert McNamara. It allows the secretaries of the Army, Air Force and Navy to deliver voluminous budget requests to the OSD, leaving OSD little opportunity to force significant changes in the services' spending plans, said one defense industry official.

The most important task "is to reduce the amount of layering to let the decision makers into a process where they have the information they need," Dawson said.

"The answers are more competition, fewer [management] layers and more accountability," said Dawson. "You can't appreciate the costs that you get into by having a large staff that begets more staff that begets more staff. Our general experience in looking at corporate headquarters is that you can have a corporation that is leaner, more effective and more nimble" if you keep its size small, said Dawson.

The panel, announced in mid-May, is chaired by Arnold Punaro, a former Democratic staff director on the Armed Services Committee, who is now an executive at the McLean, Va., office of Science Applications International Corp.

Other members include Dawson, Kim Wincup, a former staff member for the House of Representatives who is now an executive at SAIC; David Chu, a former defense official who is a senior executive at the Washington office of Rand Corp.; James Locher, a former assistant secretary of defense; Dov Zakheim, a former Pentagon official who is now vice president at System Planning Corp., Arlington, Va.; and Michael Bayer, a business consultant for the departments of Energy and Commerce.

Cohen will decide whether to implement or reject the report's recommendations.

A recent draft of the report recommended that seven of the 11 assistant secretaries of defense be shut down, and their tasks divided among four undersecretaries of defense that would have immediate access to Cohen and John Hamre, the deputy secretary of defense.

These undersecretaries of defense would include the current undersecretary for acquisition and technology, the undersecretary for policy, an undersecretary for support services and a fourth undersecretary, perhaps serving as the department's chief information officer.

The chief information officer post was established by the 1996 Clinger-Cohen procurement reform act, which requires that the officer report to the department's secretary. The act was championed by Cohen before he resigned his Senate seat to become defense secretary in January.

Punaro's draft plan would dismember the post of the assistant secretary of defense for command, control, communications and intelligence - a post that has a significant role in intelligence planning, procurement oversight and technology integration.

The task force's draft report would distribute this portfolio among the undersecretaries of defense, giving procurement oversight to the undersecretary for acquisition and technology, intelligence oversight to the upgraded undersecretary for policy, while leaving the technology integration and standards-setting task to the chief information officer.

One area of disagreement is whether the chief information officer should report to Cohen or report to Hamre, who runs day-to-day operations at the Pentagon while Cohen sets policy decisions.

"We are actively trying to figure that out. ... We don't have a decision yet," said Dawson. However, "I would imagine by the end of the month" the panel will have made its recommendation to Cohen, he said.

The four remaining assistant secretaries of defense would include an assistant secretary for public and legislative affairs, who would report directly to Cohen. The assistant secretary for health affairs also would be kept but would be subordinated to the undersecretary of defense for support services.

The planned reform effort is controversial because Congress and labor unions are worried that any reforms may end up hurting their interests.

For example, a variety of high-tech contractors are pushing the Pentagon to create a top-level organization that would hire contractors to perform tasks now performed by government workers. Such "outsourcing" of government work could save taxpayers up to $30 billion over five years, said Bert Concklin, president of the industry-funded Professional Services Council, Vienna, Va.

However, Concklin's outsourcing goals have been stymied by Congress and labor unions, who are loath to see well-paying jobs transferred to defense contractors. Moreover, "the administration does not want to face the wrath of the civil service unions," said Concklin.

Pentagon spokeswoman Susan Hansen declined to comment on the report, except to say that the task force is "looking at the organizational structure ... to configure these organizations to meet the challenge of the next century."

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