Investigation: Pentagon officials ignored internal recommendations to save $125 billion

A Washington Post investigation on Monday revealed top officials at the Department of Defense willfully ignored an internal Pentagon study published in January 2015 which found $125 billion in business cost savings that could be realized over a five-year period.

Entitled, “Transforming DoD’s Core Business Processes for Revolutionary Change”, corporate executives on the Defense Business Board, a best practices advisory panel, worked for half a year to determine how to make the Pentagon more economically efficient.

The board concluded in their report that through streamlining DoD’s workforce, retiring long-tenured bureaucrats earlier, cutting back on contracted service outlays and optimizing information technology resources through consolidation, the Pentagon could use the budgetary savings on military-related operation expenses.

The study pointed to $134 billion out of DoD’s $580 billion annual budget that was being spent on business operating costs, including pay-outs to over 1 million back-office workers comprised of contractors, civilian and military personnel. At the same time, the U.S Armed Forces only employed 1.3 million active duty troops.

Through the acquisition of internal memos and interviews conducted with Pentagon personnel, the Washington Post found that DoD tried to hide the study’s findings from public view by making budgetary reports confidential and removing a link to the summary report on the Defense Business Board’s website.

Perhaps more importantly, shortly after the report was published, Defense Secretary Chuck Hagel left the Pentagon and was replaced by Ash Carter who subsequently ignored scheduled follow-up meetings with board members.

Pentagon comptroller during the George W. Bush administration, Dov Zakheim, acknowledged the problem of trying to enact comprehensive budget allocation reform under multiple leadership teams.

“Because we turn over our secretaries and deputy secretaries so often, the bureaucracy just waits things out,” he said. “You can’t do it at the tail end of an administration. It’s not going to work. Either you leave the starting block with a very clear program, or you’re not going to get it done.”

In addition, Deputy Defense Secretary Robert Work, who initially commissioned the Business Board study with enthusiasm, turned against its authors and deemed the findings as “unrealistic”. Work cited the difficulty in consolidating “the largest bureaucracy in the world.”

Instead, Sec. Work committed to adopting $30 billion worth of the study’s cost saving recommendations by the end of the decade. Even so, Work told a board member after the study’s release that the $125 billion advertised savings number “scares me.”

At a board meeting in February 2015, Under Secretary of Defense for Acquisition, Technology and Logistics, Frank Kendall, reacted defiantly to the report, saying he was “very disappointed”, and dismissed the findings as “shallow” and “very low on content.”

Kendall later told Work that, “If the impression that’s created is that we’ve got a bunch of money lying around and we’re being lazy and we’re not doing anything to save money, then it’s harder to justify the budgets that we need.”

Both Work and Kendall probably had the Budget Control Act of 2011 in mind, which stipulated $113 billion in automatic Defense Department budget cuts over a four-year period. Pentagon leaders were most likely fearful that any additional reasons for Congress to cut military spending would be acted upon.

On Tuesday, the Pentagon responded to a New York Times request for comment on the investigation, denying the Post‘s accusations.

“Any suggestion the report has been suppressed by the department is false,” said spokesman Gordon Trowbridge. “The study has been publicly available on since its release in January 2015, where it’s been downloaded more than 2,800 times.”

An anonymous DoD official also told the Times that the board’s suggestions on how to cut costs were “aspirational” rather than sure-fire methods of how to save nearly a quarter of the Pentagon’s budget.


[Washington Post] [New York Times]