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By Nick Wakeman

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Nick Wakeman

Mattis departure puts DOD in chaos zone

Departures of Cabinet department secretaries after an election aren’t unusual. Generally, they leave with a warm embrace and a seemingly sincere thank you.

When Defense Secretary James Mattis announced his departure, it looked like he would get the similar treatment. President Trump tweeted his thanks on Dec. 20, saying Mattis “will be retiring, with distinction, at the end of February… General Mattis was a great help to me in getting allies and other countries to pay their share of military obligations… I greatly thank Jim for his service!”

Then apparently Trump read Mattis' resignation letter and forced him to step down immediately. On Jan. 2, the president was saying that he “essentially” fired Mattis because he wasn’t doing a good job in Afghanistan and elsewhere.

But even without that flip-flop by the president, Mattis' departure leaves an atmosphere of uncertainty at the Pentagon and raises questions that only time will answer.

Part of the uncertainty is the number of senior positions now held by placeholders who have “acting” ahead of their title.

This starts at the top with Patrick Shanahan, who is acting defense secretary.

His previous post is now held by David Norquist, who is acting deputy defense secretary.

The new chief management officer post is also held in an acting capacity by Lisa Hershman.

Kim Herrington is the acting principal director of defense pricing and contracting. She took that role over after Shay Assad was reassigned out of contract negotiations because of problems with his travel.

There also is churn on the uniformed side, where Marine Corps Gen. Joe Dunford is ending his run as chairman of the Joint Chiefs of Staff. President Trump has nominated Army Chief of Staff Mark Milley as the next chairman. Milley was picked over Mattis’ preference of Air Force Gen. David Goldfein.

This has led to speculation that Goldfein is looking for an exit. The president also will need to appoint an Army chief to move into Milley’s post when he becomes JCS chairman.

A question I’ve been asking is how will this impact the business side of the defense market.

One easy answer is probably not much, at least in the short-term. DOD has a budget after all, and even a procurement as large the $10 billion JEDI cloud computing contract doesn’t generally rise to a priority for service chiefs and the secretary of Defense.

If JEDI clears the Court of Federal Claims, then that contract continues on a straight-forward track.

And while procurement policy is important, most of the DOD leadership will be focused on the fiscal year 2020 budget proposal due February.

The budget will be its own source of uncertainty but the instability around the people creates another set of questions?

Much of the innovation in defense arena has been driven upwards and not down from senior leaders. I’m thinking here of things such as the use of Other Transaction Authorities and the successful implementations by the Defense Innovation Unit. But senior leaders can provide the cover that allows others to take the risks, and that approach has led to many innovations.

All indications are that Shanahan will serve as acting secretary for quite some time. Because he is already Senate-confirmed, he can serve for as long as six months. He also is likely a front-runner to hold the post on a permanent basis.

The question is how much will he be pulled by the whims of the White House. And frankly, that is a big worry.

President Trump’s quick decision to pull out of Syria and start planning a major withdrawal from Afghanistan has many military leaders upset to say the least. And of course, Trump is infamous for his poor treatment of long-time U.S. allies.

Trump used to brag about “my generals.” Now they are gone and he bashes most of them, unless they are under indictment.

The president has created an atmosphere of uncertainty and borderline chaos. No matter your political leanings, that’s a tough environment in which to make business decisions with confidence. While this current fiscal year is pretty much set, a longer-term outlook is harder.

My advice: Focus on your customer’s mission. Understand how the chaos might impact that mission and how the uncertainty might put your business at risk.

Posted by Nick Wakeman on Jan 03, 2019 at 12:45 PM

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