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 September 2010 

Lt. Gen. Lawrence P. Farrell, Jr., USAF (Ret)With Gates’ Proposals, the Edge Of the Perfect Storm Comes Ashore

September 2010

by Lt. Gen. Lawrence P. Farrell, Jr., USAF (Ret) 

Defense Secretary Robert Gates just issued a significant series of budgetary and programmatic decisions that begin the major adjustment process he announced in early May at the Eisenhower Library in Kansas.

In last month’s President’s Perspective we anticipated the coming storm. With the August announcements, the leading edge of that storm has come ashore.

The reforms proposed by Gates are quite significant and will greatly affect many organizations. A series of reviews between now and the end of the year presages more adjustments to come in the 2012 budget. The efficiency push is not over, Gates warned. “This is a dynamic process,” he said. “I expect it to continue. It’s not the work of one year or of one budget cycle. ... I wouldn’t necessarily describe it as the tip of the iceberg, but if 90 percent of an iceberg is under water, then this is a pretty good percentage of it, but not all.”

Gates has been adamant that his intent is not to cut the department’s budget. The goal is to reshape priorities so resources can be freed up and reallocated within the Defense Department’s budget to get to the 2 to 3 percent real growth (1 to 2 percent above current top line) he believes is needed to underwrite two wars and to protect our interests and future capabilities. Thus, any savings will be applied to more pressing needs within the existing top line.

The process will play out in four tracks:  $100 billion in service-generated overhead savings (to include closure of bases); suggestions from external sources and boards (where the proposal to shutter Joint Forces Command came from); internal assessments (the Ashton Carter initiative) that will affect ongoing programs immediately, and the recent August announcements.

This last set of initiatives aims, in the first instance, to cut down on the use of advisory and support contractors by 10 percent a year for three years.  Next up is a freeze on headquarters, agency and combatant positions and significantly, no creation of full-time in-house positions as a result of in-sourcing after 2010. A “clean-sheet” review will be completed by Nov. 15. A freeze on senior executive service and general officer positions is to be followed by the elimination of at least 50 general officers and 150 SES officials over the next two years.

Reports and studies, and outside boards/commissions are to be cut by 25 percent and are targeted for further reductions.

The most significant changes come with major functional and organizational adjustments. Of note is the consolidation of information technology within the department and across bases, headquarters and agencies. Not much detail is available yet, but much more is to come. Slated for elimination is the office of the assistant secretary for networks and information (NII) and the Command, Control, Communications and Computer Systems Directorate of the Joint Staff, known as JCS/J-6; the Business Transformation Agency, and the already mentioned Joint Forces Command. The closings and consolidations are all scheduled to be completed within one year. That is aggressive.

What to make of all this? First, the reduction in studies, reports and outside boards is probably the easiest to achieve, although there may not be a lot of savings there. Cutbacks in the number of general officers and senior civilians are not hard to do, but they are complicated by other personnel reductions associated with the elimination of agencies and commands. It is not clear where these people will go.

The elimination of J-6 will require some heavy thinking. It is a key organization that oversees and manages the operational piece of battlefield communications and networking.

And while the Business Transformation Agency may go easily, closing JFCOM will be tough, because of its size and numerous functions, some of which will undoubtedly be deemed critical and will be realigned. There is also the political impact of letting go nearly 6,000 personnel and contractors in Suffolk and Chesapeake, Va. The Virginia delegation is already gearing up for a fight, although statements by House Armed Services Committee leaders seem to be neutral if not mildly supportive of Gates’ efforts.

One big unknown is the initiative to streamline intelligence organizations and operations in order to eliminate “unnecessary redundancy.” This is accompanied by a 10 percent reduction in funding for intelligence advisory and assistance contacts and freezing the SES positions. A zero-based review is scheduled to wrap up by Nov. 1. The new Director of National Intelligence James Clapper has indicated a parallel effort for national intelligence organizations.

Finally, it is worth noting that the program that Gates launched with his May speech in Kansas has momentum and continuity. It also has support. His reforms will have serious and significant implications across the Defense Department, and there is more to come. A key fact to remember is that Secretary Gates is the helmsman. The dire financial condition of the country, and upcoming report by the Deficit Commission in December virtually guarantee that most of his proposals will come to pass.

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