Weapons acquisitions, personnel costs like health care and benefits, and labor “overhead” will be prime targets for savings as the undertakes what could be its most genuine roles-and-missions review in decades, according to prepared remarks given by Defense Secretary Chuck Hagel.
“It is already clear to me that any serious effort to reform and reshape our defense enterprise must confront the principal drivers of growth in the Department’s base budget — namely acquisitions, personnel costs, and overhead,” Hagel told a National Defense University audience in a well-touted speech April 3.
“In many respects, the biggest long-term fiscal challenge facing the [Defense] Department is not the flat or declining top-line budget; it is the growing imbalance in where that money is being spent internally,” Hagel said. “Left unchecked, spiraling costs to sustain existing structures and institutions, provide benefits to personnel, and develop replacements for aging weapons platforms will eventually crowd out spending on procurement, operations and readiness — the budget categories that enable the military to be and stay prepared.”
To underscore the notion, Hagel cited recent comments by former chief of naval operations Gary Roughead, who said the military risks going from “an agency protecting the nation to an agency administering benefit programs, capable of buying only limited quantities of irrelevant and overpriced equipment.”
Hagel praised work already accomplished by the administrations of his two most recent predecessors, Leon Panetta and Robert Gates, but the new defense secretary promised even more hard work, difficult decisions and strategic prioritizing under the Strategic Choices and Management Review led by Deputy Defense Secretary Ash Carter.
Regarding weapons systems and technology specifically, Hagel appeared to pick up Gates’ mantra of concern that even as acquisitions become costlier for the Pentagon, it continues to get less in both quantity and capability. And that is despite four years of “pruning” many major procurements starting with Gates’ now-infamous April 2009 announcements that cappedproduction and canceled /SAIC’s Future Combat Systems and Lockheed’s VH-71 presidential helicopter programs, among many others.
“We need to continually move forward with designing an acquisition system that responds more efficiently, effectively and quickly to the needs of troops and commanders in the field. One that rewards cost-effectiveness and efficiency, so that our programs do not continue to take longer, cost more, and deliver less than initially planned and promised,” Hagel said.
Hagel outlined some of the key questions to be addressed by Carter’s review, which is being pegged as the most significant roles-and-missions examination since the Goldwater-Nichols Act of 1986 that realigned combatant commanders and acquisition authorities. Those questions are not necessarily new, but the era of austerity brought by the West’s recession and the Budget Control Act of 2011 specifically bring new urgency to finding answers. Goldwater-Nichols was designed to force more “jointness” among the armed services, as well as establish clear chains of command, and it did so by adding layers of military management. By comparison, Carter’s review could focus on cost and efficiency across the Defense Department, especially paring back commanders, “back-office” services and authorities.
“We need to challenge past assumptions, and we need to put everything on the table,” Hagel said. That includes the future size of the armed forces, the mix of conventional and unconventional capabilities, special operations versus general forces, foreign and home bases, and reliance on allies.
Before taking questions, the defense secretary also begged for patience from Congress as the Pentagon goes through the review, as well as more stable annual funding.