May 09 2011
Committee Chairman Charges: “We Can’t Keep Doing Things the Same Old Way and Expect Better Results”
“The Department of Defense cannot continue to conduct business as usual and expect better results. Proposing to cut defense spending by nearly $500 billion in the coming decade without first conducting the necessary due diligence to determine what our nation’s basic defense requirements will be is an invitation to other countries to challenge America’s supremacy,” stated McKeon.
“When tapped to lead the Armed Services Committee, I committed—and instructed all Members of the Committee—to scrutinize the Department of Defense’s budget and identify inefficiencies so we may invest those savings into higher national security priorities. Up until now, the Pentagon has taken a band-aid approach to acquisition and management problems and has done little to identify the root causes of the inefficiencies that exist within the defense enterprise,” continued McKeon.
“The 2012 defense bill reflects the fact that members of the Armed Services Committee, the broader Congress—and the nation—must make tough choices in order to provide for America’s common defense. We must examine every aspect of the defense enterprise—not as a target for arbitrary funding reductions as the current Administration has proposed—but to find ways that we can accomplish the mission of providing for the common defense more effectively,” concluded McKeon.
The National Defense Authorization Act for Fiscal Year 2012, which will be marked up by the Armed Services Committee on Wednesday, achieves Chairman McKeon’s goals by working to:
Ensure our troops deployed in Afghanistan, Iraq and around the world have the equipment, resources, authorities, training, and time they need to successfully complete their missions and return home;
- Provide our warfighters and their families with the resources and support they need, deserve, and have earned;
- Invest in the capabilities and force structure needed to protect the United States from current and future threats;
- Mandate fiscal responsibility, transparency and accountability within the Department of Defense; and
- Incentivize competition for every tax-payer dollar associated with funding Department of Defense requirements.
Oversight of Financial Management and Reliability of Department of Defense Financial Statements. The Armed Services Committee continues to be concerned that more than 60 percent of the Department of Defense financial community exists outside the auditing, accounting and financial management job classifications. Members of the committee are also concerned that the Department of Defense lacks financial managers who understand the fiscal concepts necessary to manage defense resources. Therefore, Chairman McKeon’s mark:
- Establishes a financial management certification program for the Department of Defense;
- Requires the Chief Management Officer to conduct a financial management personnel competency assessment in order to identify the personnel requirements needed to effectively perform financial, budgetary and accounting processes and to maintain professional certification standards;
- Directs the Comptroller General to annually assess the extent to which the Department of Defense is realizing the savings proposed by Secretary’s efficiencies initiatives, and requires the Comptroller General to assess the extent to which components of the Department of Defense conducted business case analysis prior to recommending or implementing these efficiencies initiatives;
- Requires increased oversight of the Department of Defense’s execution of the Financial Improvement and Audit Readiness (FIAR) plan by requiring specific funding lines in the budget, development of metrics for identifying progress, and mitigation strategies for failure to meet required deadlines.
Chairmen McKeon will continue to rely upon on Representative Mike Conaway (R-Tex.) and Representative Rob Andrews (D-N.J.) as they and the committee work to reform the Pentagon’s acquisition and management practices.
Roles and Missions of the Department of Defense. In the 2008 version of the defense authorization bill, Congress required the Secretary of Defense to conduct a review of roles and missions every four years with the intent of identifying capability gaps and areas of unnecessary duplication. In the report delivered to Congress in January 2009, it was clear that the Department of Defense failed to use the first review as an opportunity to conduct a comprehensive assessment of the roles and missions of the Armed Forces—choosing instead to simply endorse the status quo.
When the President announced his intent to cut the Department of Defense’s budget by an additional $400 billion—above the $78 billion which had already been announced—he also announced that the Department of Defense would conduct a review of the Department’s roles and missions in order to determine where those cuts should be made. Chairman McKeon and the members of the committee support this effort and strongly believe that harvesting arbitrary “savings” prior to determining the capabilities needed to protect the United States is putting the cart before the horse.
The 2012 defense authorization act would strengthen the 2011 Quarterly Roles and Missions Review in order to provide a solid basis for reducing waste while also improving the joint warfighting capability of the Department.
Sustainment of Equipment and Weapon Systems. American taxpayers cut a check every year for more than $80 billion in order to maintain defense material and equipment. Chairman McKeon believes this could be provided more efficiently. To achieve this goal, the National Defense Authorization Act for Fiscal Year 2012:
- Strengthens and improves the military’s depots and arsenals. These critical, organic industrial base assets provide the nation with a ready and controlled source of repair for our military equipment, and they provide jobs for more than 77,000 hard working, highly skilled Americans.
- Requires competition throughout the life-cycle of weapon systems for components and subcomponents. Air Force estimates indicated that this type of competition could render up to $2 billion in savings annually when applied to sustainment of Air Force commercial derivative aircraft engines alone, yet the Department has not embraced this competitive approach.
- Provides increased stability in workload planning for private industry and the depots by requiring the Department of Defense to plan for sustainment earlier in weapon system development.
- Aligns Centers of Industrial and Technical Excellence with Pentagon workload assignments to enhance capability, efficiency and effectiveness of the depots.
- Enhances the capability of Army industrial facilities by making permanent the authority for them to enter into cooperative agreements with private sector contractors.
- Focuses on the Pentagon’s efforts to do more to reduce the impact of corrosion. The Department of Defense’s own estimates show corrosion costs American taxpayers nearly $23 billion annually. Despite that fact—and the awareness that $37 is avoided for every $1 invested for corrosion mitigation and control actions—the Department Defense continues to fail to invest adequate resources to achieve these savings.
Total Workforce Management. Workforce costs are the greatest cost drivers in the Department of Defense. Just as with the sustainment of the industrial base, the Department of Defense must be held accountable for managing its workforce in the most efficient manner possible. Instead of a stove-piped approach to managing the Pentagon’s military, civilian and contractor workforce, the National Defense Authorization Act for Fiscal Year 2012 requires the Department of Defense to review its manpower needs holistically, which includes addressing: What work needs to be done; does a military member or a government civilian need to do it; and, if not, can a contractor do it more efficiently and effectively?
- As a result, the annual defense authorization bill requires the Department of Defense to project the annual civilian personnel and contractor requirements for support services to facilitate an improved awareness of the Pentagon’s manpower requirements.
- The bill includes a provision that requires the Pentagon to develop a Total Force Management Plan that would determine the appropriate mix of military (active and reserve component), civilian and contractor personnel to meet the projected requirements.
- The legislation also requires the Department of Defense to manage civilian personnel on the basis of the workload requirements and not on arbitrary cost targets.
- Finally, the annual defense authorization act requires the Pentagon to enhance its accounting of contractors to include reporting of contractors in the annual report to Congress on the expenditures, work and accomplishments of the Department of Defense.
Reforming Department of Defense Reporting Requirements. The Department of Defense spends hundreds of millions of dollars every year producing and disseminating reports internally and to the Congress. The National Defense Authorization Act for Fiscal Year 2012 would repeal a large number of these reports if they are redundant or no longer relevant. The legislation would also require the Department of Defense to transmit reports required by law to Congress electronically, which would dramatically reduce the printing and reproduction costs of the Department of Defense.
- The annual defense bill would also mandate that the Secretary of Defense conduct a biennial review of Department of Defense reports required to be submitted to Congress. In doing so, the Secretary would have to evaluate the content, quality, cost and timeliness of the Department’s compliance with the reporting requirements. The legislation, while requiring this review, would allow the Secretary of Defense to recommend reports that could be amended or repealed.
- The 2012 defense bill would also require the Secretary of Defense to conduct a biennial review of internal Department of Defense reports and take the necessary steps to eliminate or modify reports which are redundant, overly burdensome, of limited value, unjustifiably costly or otherwise determined to unduly reduce the efficiency of the Department of Defense.