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Secretary of Defense Robert Gates: Playing Offense on Defense

January 14, 2011
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The US Defense Budget is defined as our blueprint for implementing our National Security Strategy and our military’s response to the complex threats the United States faces today around the world, and our plans to face evolving threats in the future. Indeed, we all know our troops, with their extended and multiple deployments in Southwest Asia, are physically tired, and we are hurting them and their families as they carry out their long deployments as part of their military duty. Their equipment has been utilized way beyond its envisioned useful design life and our military capacity is being worn out in Iraq and Afghanistan. The demands on our limited military resources to respond are increasing, budgets are being stretched beyond fiscal limits, and quick reaction capabilities are required to be fielded to protect our war fighters to counter immediate and emerging threats in a very dangerous world. There is a perfect storm brewing.

The ongoing debate in Washington for this year's Defense Budget, Weapon Program Priorities and the Five Year Defense Spending Plan (FYDP) could be viewed in most quarters by skeptical people as just one more year of the annual skirmish about service funding and manpower levels, protection of pet programs that industry and each of the services want funded, and widespread acceptance of the “inevitable”--the inability of the Department of Defense (DoD) to reign in or cancel troubled programs. It is a war of attrition over DoD program funding. The winners are those who are standing at the end of the battle on the Hill.

However, the global threat environment and military challenges we face today as a country are overshadowed by the serious economic issues on the table. They include very high unemployment rates in the US (hovering around 10%), a huge underemployed workforce accepting any job to keep their families going, record federal budget deficits, increases in the national debt, and the need to fund mandated social programs such as Medicare, Medicare and Social Security. Many state governments face similar fiscal challenges. We will have to make hard choices to face both discretionary and mandated spending cuts in America if these fiscal problems are to be addressed. How can we continue to fund significant increases for DoD programs at unprecedented rates in this constrained environment? This debate is further complicated in the context of a backdrop of a nine-year conflict in Afghanistan, an ongoing campaign in Iraq, and the demands of the global war on terrorism, all of which aren't going away anytime soon. Domestic cries for fiscal reform are becoming louder and more bitter. Even the Republican Leadership in the House of Representatives, Majority Leader Kantor, says defense cuts are on the table and will most likely happen.

In the end, with the legislative process as the final arbitrator of what program gets approved, the annual debate over the final funding of the Defense Budget becomes a “zero-sum game of political clout”. It is all about whose elected representatives sit on the right Congressional Committee of DoD Authorization or Appropriation, who has the greatest political clout in the hearings to make things happen, and who can influence the “mark-up” process in the House/Senate Defense Conference Committees. They are judged (and likely re-elected) based on who can “deliver the Defense program goods” for their local districts and states back home.

Yes, there is a great deal that will be played out again this spring as part of the annual “Kabuki Theater” that passes for lawmaking for the Defense Budget in Washington, DC. That is our democracy and the way we do business and how we exert civilian leadership and financial control over our military. It isn’t pretty, it’s cumbersome, and is not a very efficient way of funding our Defense Department. I am always amazed if anything gets done, but somehow it does.

I submit there is change in the air, a serious paradigm shift that is ongoing in the way the DoD has been thinking about their roles and missions, their program funding and their decision processes. It is driven by the stark economic realities we face and “the extreme fiscal duress on the federal government,” according to SECDEF Robert Gates. The DoD leadership, driven by SECDEF, has come to the conclusion that they can’t continue to “do business as usual” any longer and they need to change their ways. It is a fundamental change of the "game within the game" of how our National Security Strategy is developed and implemented, the makeup and organization of the Defense Department, tradeoffs and decisions on the priorities of weapon budgets and programs, and ultimately how all defense programs are going to be planned, funded and executed.

Most importantly, SECDEF and his leadership team have worked on a strategic repositioning of the DoD on how to move forward to support our national interests. They have come up with a plan by putting together a realistic future funding blueprint of programs and strategy to support the Department of Defense in this very dangerous world.

This effort is wide ranging and is being driven by the leadership of SECDEF Gates, an effort that he has embarked on for close to two years. He had the vision to see the changing forces early, and took on the responsibility to reshape the DoD to be better positioned in the future to protect the interests of the US military.

Let us quickly review the steps he and his management team undertook to accomplish this task. First, he had the vision, the courage and the plan to back up his ideas for reform. He led the DoD leadership team to:

1) drive the Defense Department where it needed to be with a revised look at roles and missions, war fighting capabilities, and a hard look at the needs of the weapons/program portfolio in a restrained fiscal environment
2) lead the discussion with the Service Secretaries and Joint Chiefs, with a critical look at how they separately and jointly needed to implement their war fighting capabilities against the real threat we would be facing in the future
3) bring in industry to support the changing landscape of government affordability and performance requirements
4) meet and discuss his proposals with the political leadership, gaining the support of the Houses of Congress and the President on the needs of the nation and how to support the revised military capabilities with a revised budget plan
5) display complete transparency on what he was doing with the American people by taking all his ideas public in a straightforward and forthright way where he provided a complete appraisal on his goals and objectives with his DOD Reform initiative.

In the spring of 2009, Gates, Deputy Secretary Bill Lynn and Undersecretary Ashton Carter, announced a series of reforms to redirect the way DoD does business. Close to 30 programs were recommended for cancellation or significant cutbacks with strict conditions on their continued funding. Programs were targeted based on incurred cost over-runs, developmental engineering problems and changing DoD needs. There were Congressional Hearings and there was a lot of “smoke, light and fire” on Capital Hill as he was initially greeted as someone “who was trying to gore someone else‘s ox”. It was through Secretary Gates's statesmanship and his ability to bring people together and convince them of the benefits of his reform initiatives that he got what he proposed and prevailed in his plans.

In addition, there were unprecedented reforms in the DoD Acquisition process passed into law making both DoD Program Managers and Program Executive Officers (PEO) and their Industrial Contractors (OEM) far more accountable in the contracting process. More emphasis was placed on overall systems engineering, driven by DDR&E Zack Lemnios, the DoD's Chief Technology Officer. His goal was to have DoD Program and Acquisition folks think through the whole multi-step acquisition process and “go back to basics” on Program Management--to look at how system requirements are defined, designed for, and then how metrics are used to evaluate how progress is made and measured.

The next major step was the announcement last year of the DoD program that was kicked off to eliminate over $100 B of overhead cost in the annual DoD budget and to redirect those “saved funds” to specific DoD program needs. It was a way to “self fund” necessary defense priorities. When announced, there were a lot of folks highly skeptical of the program savings to be realized under the effort that Secretary Gates had outlined. However, he had met with all the Service Secretaries and all members of the Joint Chiefs of Staff and had a series of meetings to discuss and work through the plan. As a group, they all bought into the plan. They all realized that unless they delivered to the President and the Congress their ideas for how to re-structure the military based on their ideas on roles and missions, programs and funding priorities, someone else would do it for them. They all understood that the US was entering a highly constrained financial budgetary environment, and maybe something that is more highly uncertain, a highly charged “electro-political” environment.

This effort also worked well in that it established a process and solid backstop that there was a “firm funding wall required for Defense Programs from which Defense Spending could not drop below." But more importantly the deal was personal with each service, as “each dollar you save you can use yourself” to fund your service priorities, said Gates.

Last week the final part of this plan came into view with Gates announcing a number of measures that mark the next step in the DoD’s reform agenda. Quoting from his press release, he covered the efforts to generate efficiency savings by “reducing overhead costs, improving business practices, or cutting excess or troubled programs.” He also talked about “the substantial investments that the military departments will be able to make in high priority capabilities and programs--investments made possible by the savings identified by the service leadership" and he said, "how these reforms if followed through to completion, will make it possible to protect the US military‘s size, reach and fighting strength, despite a declining rate of growth--and eventual flattening of the defense Budget over the next five years." He made it very clear that “America is at war and confronts a range of future security threats, and we must not repeat the mistakes of the past by making drastic and ill conceived cuts to the overall Defense Budget. It is also imperative for the department to eliminate wasteful excessive, and unneeded spending. To do everything, we have to make every dollar count.”

To meet SECDEFs goal of saving $100 B over the next five years, the Army proposed saving $29 B, the Air Force $34 B and the Navy $3 5 B. This is a remarkable achievement and sets the table for the debate over the FY 2012 Defense Budget on a very strong footing. There was also some program cuts highlighted by SECDEF, including: SLAMRAAM, cancellation of the USMC EFV (Expeditionary Fighting Vehicle), and focus on cutting the costs of the military's healthcare system, TRICARE. On the plus side, the USAF will buy more UAVs, more JSFs and Expendable Launch Vehicles. The Army intends to upgrade Bradleys, Abrhams Tanks and Stryker Vehicles. The Navy will develop advanced EW Jamming capability, purchase additional ships and buy more F-18 fighters. The Marines JSTOL version of JSF is on probation for two years.

It looks like the SECDEF has done a fairly good job “hitting the reset button” on how the DoD will be conducting business in the future. SECDEF Gates has shown vision and wisdom and we will reap the benefits of his hard work for years to come. We as citizens should be grateful of the work done by our defense leadership in this area.

Recent Articles by Jim Fallon, President and CEO, Fallon and Associates Consulting LLC

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