Pentagon Fails Reform at Every Angle

Secretary of Defense Robert Gates announced Monday a proposal to reform the defense budget [1]by cutting or scaling back some major weapons programs and strengthening oversight of the acquisitions process. The recommendations made by the Secretary should be applauded, but it is only a small step to curb defense spending. Looking forward the budget for FY 2010 and beyond maintain current levels of funding, without pressuring the Pentagon to make substantial cuts. Instead, it appears the Administration is relying on the Pentagon to trim spending and end waste on its own. If the past is any indicator, this approach won’t work.

Obama’s FY 2010 budget provides a 4 percent increase in defense funding from 2009. To its credit, it does include the cost of war in the defense budget—no longer hidden as off-budget supplementals—but that only accounts for part of the increase.

The increase is hard to defend. Compared to 2000, the FY 2010 defense budget has increased a whopping 78% [2]. While defense spending will continue to represent nearly half of all discretionary spending [3] through 2013.

Secretary Gates has stated [4]the defense funding “spigot” is closing. Adding that the Pentagon will have to reform, make tough spending choices, and expand accountability.

That is a good warning, but without the pressure from funding cuts, the Pentagon’s record of self-imposed reform is dismal. Take DOD’s latest efforts to improve its major weapons acquisitions process. The GAO again this March [5] found their efforts insufficient due to the absence of proper oversight. The system is plagued with nearly $300 billion in cost overruns, numerous scheduling delays and inadequate testing.

The GAO cites in the report common problems of Pentagon management:

“DOD’s processes are fragmented. Once a program begins, it too often moves forward with inadequate technology, design, testing, and manufacturing knowledge, making it impossible to successfully execute the program within established cost, schedule, and performance targets. Furthermore, DOD officials are rarely held accountable for poor decisions or poor program outcomes.”

The problems outlined above are echoed in similar Pentagon cases:

• The Base Realignment and Closure Act of 2005 was to save $2.3 billion with the consolidation of duplicate operations, but a recent GAO report [6]questions whether any savings can be yielded at all. Already 88 percent of the Pentagon’s estimated savings with the move are no longer achievable due to mismanagement of funding, lack of interagency coordination and oversight among the Pentagon’s branches.

• The expensive Missile Defense system shows little improvements made [7] in management and cost controls for the $10 billion a year program. A key contributor to ballooning costs is the Pentagon decision to exempt Missile Defense from standard cost and test baselines. The Pentagon reasoned the “exclusion from traditional oversight was to allow for ‘flexibility’ for development.” Not surprisingly, the complete opposite is true—skyrocketing costs, with nearly every missile system failing in testing.

How to Reform?

Secretary Gates’ recent announcement eliminates some major programs, such as the F-22 Raptor jet, but stops well short of cutting the numerous weapons systems costing tens of billions.

Senators Carl Levin (D-MI) and John McCain (R-AZ) are also taking a small step in the right direction. The Reforming Weapons Acquisitions Reform Act [8]is an effort to inject accountability and avoid cost overruns on projects, but much more must be done.

True reform is making cuts in funding to force the Pentagon to make wiser spending choices and curb waste. Less funding will ensure Cold War weaponry and helicopters that kill more Marines in testing than combat are no longer produced. A leaner, efficient Pentagon with healthy contract competition and strict oversight will not only ensure American security, but also free up funds to strengthen domestic programs that face cuts.

See my past blog on defense waste here [9].

Foreign Policy in Focus of the Institute for Policy Studies lay out specific defense cuts here [10].