Weak processes stymie DOD cost-control efforts

While solving the overarching fiscal impasse is out of DOD's control, there is plenty the department can and should be doing to reduce costs and operate more efficiently; however, the problem is that no one seems to be doing it. PSC President Stan Soloway explains.

I recently spent a weekend at a national defense conference featuring one of the most impressive casts of speakers and panelists imaginable. Gathered in one place were the Secretary of Defense and his two immediate predecessors, the Chairman of the Joint Chiefs of Staff, two service chiefs, a service secretary, three undersecretaries of defense, several four-star commanders, the chairmen and other members of both the House and Senate Armed Services Committees, and a plethora of widely admired, highly knowledgeable “formers” who remain among the real thought leaders in the national security field.

Yet, with all these luminaries, it was one young Air Force lieutenant who caught my attention. During a panel on the impacts of reduced research and development spending on the Defense Department’s access to new and critical technology, the lieutenant rose to express frustration at the lack of flexibility and the lack of tolerance for risk he believes dominates the environment.

He also expressed concern about the inadequate attention being paid to either the technology or to the human capital crises—among both the uniformed and civilian workforces—facing government.

All of the panelists, who hailed from both government and industry, agreed wholeheartedly with him and commiserated over the many impacts of the current budget debacle.

However, none of them spoke directly to steps the department could take, even as the budget battle continues on high, to address one or more of these challenges. Yet, such steps do exist.

Everyone is concerned about the impacts of the current budget instability and additional looming cuts to procurement and research and development. And everyone agrees there are meaningful and necessary savings to be had through reductions in the personnel and operations and maintenance accounts.

But there was surprisingly little discussion about solutions to the self-inflicted wounds alluded to by the lieutenant. Given that there are congressional leaders and others who, while strong supporters of the defense budget, remain unconvinced that DOD has done all it could to reduce unnecessary costs, that gap is one that must be addressed.

Of course, these are not simple questions and consensus on how to address them remains elusive. Nonetheless, it is worth considering some of what was not discussed at this wide-ranging forum.

For example, former undersecretaries of defense Michele Flournoy and Dov Zakheim challenged the department to more aggressively look at its overhead costs and stressed the critical importance of bringing departmental costs down to more sustainable levels. This would likely result in reductions in force structure, benefits and in federal civilian and contractor numbers.

But to make those cuts appropriately one needs analytically sound data. Yet, there was little mention of the analytically weak process the department has put into place to determine, where relevant, whether in-house or contractor costs are lower. In fact, there is resistance in the department to fully incorporating the non-partisan findings of the Center for Strategic and International Studies or the Government Accountability Office on this central question.

Today, the department’s cost comparisons are based on such factors as a company’s published GSA Schedule rates—with no consideration of the substantial discounting that almost always occurs as the result of competition. This makes no sense and is destined to result in flawed comparisons that risk incurring unnecessary costs to the taxpayer. It’s one of those core “specifics” that remains largely ignored.

Likewise, several speakers expressed deep concern over reduced R&D spending and what it could mean for the department’s future access to new and critical technology. Yet no one raised a question about the ways the department was making that access ever more difficult, such as continued efforts to dilute the application of commercial buying authorities contained in the federal acquisition regulation or expanding government audit access to company internal audit documents or imposing artificial caps on contractor employee compensation that bear no relationship to market realities.

Not only do these trends impose unnecessary and costly burdens on existing contractors, it makes access to commercial technology more difficult for DOD and for prime contractors seeking to incorporate cutting edge technology into their proposed solutions.

And we wonder why DOD sometimes seems behind the technology 8-ball?

There is little doubt that the budget challenges are having an enormous impact on government agencies, federal personnel, and contractors. How the fiscal impasse is settled is way above my pay grade.

But that doesn’t mean we can ignore those things over which we collectively do have control. In fact, doing so should be an imperative.

 

NEXT STORY: 7 elements of thought leadership

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.