Efficiency is the watchword of the Department of Defense as Defense Secretary Robert Gates implemented business reforms and eliminated duplicative and unnecessary overhead costs in the last 18 months. This article summarizes several key efficiency efforts Secretary Gates undertook.
When Gates took office in December 2006, the defense budget was buoyed by a strong economy. As he leaves office June 30, the defense budget is declining, strongly affected by the fiscal crisis. While there are many questions regarding the conflicts the United States may become involved in, and other missions the military may be required to perform, in the future, one thing is clear: the defense budget will decline.
From the onset of the financial downturn, Gates proactively worked toward increasing the efficiency of the department with a four-track efficiency program. This approach is designed to move the defense enterprise toward a more efficient, effective, and cost-conscious way of doing business, Gates wrote in a memorandum issued Aug. 16, 2010.
The first track specifies shifting overhead costs to fund force structure and future modernization. The second track invites outside experts to suggest ways for the department to become more efficient. The third track uses front-end assessments to inform fiscal year 2012 budget requests. The fourth, and most challenging track, focuses on reducing excess and duplication across the entire defense enterprise.
Track 1: Shifting Overhead Costs to Force Structure and Future Modernization
The demand for military missions continues to rise; however, savings are still possible. Gates instructed each of the services to find efficiencies in overhead costs and use the savings to strengthen direct support to the warfighter. Gates said, "The goal is to cut our overhead costs and to transfer those savings to force structure and modernization within the programmed budget. In other words, to convert sufficient 'tail' to 'tooth' to provide the roughly 2 to 3 percent real growth — resources needed to sustain our combat power at a time of war and make investments to prepare for an uncertain future."
Secretary Gates originally introduced his efficiency and savings initiative in a May 8, 2010 speech at the Eisenhower Presidential Library in Abilene, Kan., Gates said, "I am directing the military services, the Joint Staff, the major functional and regional commands, and the civilian side of the Pentagon to take a hard, unsparing look at how they operate — in substance and style alike."
This initial direction was codified in a memo to all services June 4, 2010. The memo emphasizes the logic behind the efficiencies, which is to move resources from bureaucracies to accounts for new weapons, existing force structure and personnel bills.
For this tail to tooth effort, Gates directed the Army, Navy, Marine Corps and Air Force to find savings of a combined $84.9 billion from the fiscal year 2012 to 2016 budgets and divert those funds into acquisition, personnel and maintenance accounts. To find these savings Gates instructed the service secretaries to look to many areas of the budget, but to focus in particular on headquarters and administrative functions, support activities and other overhead costs.
Another $17 billion in efficiency savings is sought from other DoD agencies and field activities, such as the Joint Staff, Under Secretary for Intelligence, and others. The total savings are to be spread over five years with each department tasked to find $2 billion in FY 2012; $3 billion in FY 2013; $5.3 billion in FY 2014; $8 billion in FY 2015; and $10 billion in FY 2016. The savings goals and plans will be incorporated into the services' FY 2012 program objective memorandum (POM) proposals.
Jan. 6, 2011, the military departments announced the results of their efforts as outlined below.
The Air Force proposes efficiencie