DOD must mesh realignment with approaching budget battle

Defense Department officials are pushing for reorganization throughout the military as means to reduce spending and increase efficiency, but with some efforts producing meager savings or facing uphill battles with Congress, how effective those measures will be remains very much in question.

At various headquarters offices, restructuring already is under way to streamline operations and reduce overhead. Further changes could come if DOD leaders are able to persuade Congress to grant another round of Base Realignment and Closure, but few are optimistic that will happen.

The headquarters reorganization plans are being touted as real action happening at the top to trim fat, but in the grand scheme of things, actual savings would be a fraction of overall defense spending. On Feb. 24 Defense Secretary Chuck Hagel said DOD will save $5 billion over the next five years in headquarters restructuring. The fiscal 2015 budget, due out March 4, likely will be close to $500 billion in base spending.

"It's a non-trivial sum of money -- now, by our standards, it's not huge money either. I think more importantly it is the right gesture, symbolism if you will," Robert Hale, DOD comptroller, said Feb. 25 at a McAleese/Credit Suisse event in Washington. "We need to start by cutting our own staffs before we ask others to do it. I should make clear that the $5 billion across the whole department; [Hagel] asked all the services and all the defense agencies, as well as OSD and as well as the combatant commands and the Joint Staff, to make 20 percent cuts to their operating budgets. It's important, somewhat symbolic, but still important."

Officials hope that a 2017 round of BRAC would help the military shed roughly a quarter of its infrastructure, which leaders deem as excess. However, it is all but assured that the measure will face vehement opposition by lawmakers looking to protect their districts and political interests from job losses that would result.

The last round of BRAC, which started in 2005, resulted in net annual recurring DOD savings of about $3.8 billion, according to a 2012 report from the Government Accountability Office. That figure is a 9.5 percent decrease from the BRAC Commission's earlier estimate of $4.2 billion, and implementation costs soared from an estimated $21 billion to more than $35 billion.

But defense officials want to distance themselves from 2005, insisting that there is no way around the cuts that a 2017 BRAC would institute and that it would not be like 2005.

"We need to change the narrative from 2005 BRAC," Adm. James Winnefeld, vice chairman of the Joint Chiefs of Staff, said Feb. 26 at a Bloomberg Government event in Washington. He added that part of 2005's BRAC was transformational, with major changes that cost big money, and part was widespread base closures. "Now we want modest closures for 2017. We have 25 percent excess infrastructure; I don't know anyone in industry who would carry around 25 percent extra. They'd get rid of it immediately."

Top Pentagon officials are expected to submit a request for 2017 BRAC on March 4 with the release of the budget, which will include sequestration scenarios. The budget's release also will be accompanied by the latest Quadrennial Defense Review.

"We've asked for BRAC authority the last two budgets that we've submitted. We're going to ask for it again and try to make the case that it's not in anyone's interest to continue to have to carry overhead we don't need," Hagel said Feb. 25 while visiting troops at Fort Eustis, near Norfolk, Va.

In the meantime, officials are preparing for the looming budget battle.

"We'll get some but not all of what we're asking. We've gotten a lot of questions, you know, 'is your budget dead on arrival?' I think that's not true," Hale said. "It will be a struggle if we only get part of it. And unfortunately the part that we will end up looking at [is] readiness. We won't be able to improve or increase spending on operations and maintenance as much, or we'll have to do what we did in the '90s, which is more likely, and that is that we won't increase modernization as much."