When it comes to bigness, the U.S. military has few rivals. The Defense Department is the nation’s largest employer, with more than 1.3 million men and women on active duty. The Pentagon has three times the floor space of the Empire State Building. The department’s back-office business operations employ more than 1 million people. The $580 billion U.S. military budget takes up more than half of the discretionary spending of the federal government each year. Making the Pentagon more efficient, and wringing change from such a giant organization, has frustrated many of those chosen to lead it.
Robert Work, as deputy defense secretary the Pentagon’s second-highest-ranking official, set out to try again after taking office in 2014. He ordered the Defense Business Board to conduct an efficiency study, and boasted that corporate executives would be recruited. The board was chaired by Robert “Bobby” Stein, a private-equity investor from Jacksonville, Florida, who had been a campaign bundler for President Barack Obama. The board drilled deep into the data of Pentagon back-office operations, looking at personnel, supply chains, acquisition, health care, financial flows and real estate management, and came up with an estimate that, with new ways of doing business, the military could save $125 billion over five years.
The board’s conclusions were made public Jan. 22, 2015. But once the study was completed, according to Post reporters Craig Whitlock and Bob Woodward, Work’s view changed. He dismissed the findings as “unrealistic,” and the report was essentially deep-sixed by the Pentagon leadership, including Ashton Carter, who took office as defense secretary in February 2015. Stein was replaced.
The investigation was conducted with help from consultants McKinsey and Company, and the public report brims with consultant jargon: “optimize,” “prioritize” and “identify performance management policies least supportive of change objectives and develop strategies to improve them.”
At the same time, the study harvested a wealth of unreleased data on how the Pentagon functions. The $125 billion savings figure is an estimate, not a concrete list of wasteful spending to be trimmed. Work criticized the panel for failing to identify specific systems or processes to be changed in order to realize such big savings.
Work was right to embark on the project but wrong to bury it so hastily. The U.S. military has vital missions around the globe and is already facing severe budget pressures. In order to justify the money that it really needs, Pentagon leaders must confront openly the burden of bloat and wasteful overhead.
According to The Post’s report, one member of the defense board told Work there would be political fallout from the study, because it might call into question Pentagon budget requests. “You are about to turn on the light in a very dark room,” he said.
In fact, turning on that light is an essential first step toward credibility and efficiency. The Pentagon needs to be open and candid about its spending problems, not sweep them under a rug.