Pentagon Chief Management Officer Essential to New Defense Strategy

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The recent announcement that the Pentagon’s first Chief Management Officer, Jay Gibson, would resign at the end of November highlights the inherent difficulty of reforming the Pentagon’s massive agencies and antiquated business processes. As the Trump administration considers Gibson’s permanent replacement, it should see this as an opportunity to enact meaningful changes to ensure necessary managerial modernization can finally become reality.

Ten months ago, Secretary of Defense Jim Mattis’s highly acclaimed National Defense Strategy identified great power competition with Russia and China as our number one threat. To meet this daunting challenge, Secretary Mattis has laid out three major priorities: increase the readiness and lethality of our warfighting force, strengthen and increase alliances and partnerships around the world, and implement needed and meaningful business reforms to DoD.

From a laser-focus on increasing readiness to traveling the world over to maintain and strengthen our alliances, Sec. Mattis has made meaningful strides in achieving two of his essential priorities. More progress, however, is required in reducing DoD’s massive overhead and modernizing outdated business processes.

Since its founding in 1947, the Department of Defense has grown to become larger than any business in the world. With a Pentagon budget of $686 billion in Fiscal Year 2019, it would rank as the nineteenth largest economy in the world in terms of GDP. The Defense Logistics Agency, with over 37,000 people and $38 billion a year in expenditures, is larger than nine Cabinet departments and each of the top ten major defense contractors.

That growth has been accompanied with the slow and seemingly inevitable creep of bureaucracy. Today the Pentagon is home to 28 layers of management, from the Secretary of Defense on down the line. While a structured hierarchy is important, a large bureaucracy too often becomes more about its own propagation than about the original mission. In DoD’s case, that is mission creep our nation can’t afford.

Past administrations have tried—and failed—to modernize Pentagon operations. In 1997, I chaired the Defense Reform Task Force for then-Secretary Bill Cohen. After eight months of review, we reported that DoD needed to focus on core functions, reduce multiple layers of management, eliminate duplication between OSD and the Joint Staff, control headcounts in the headquarters and streamline the defense agencies, among other recommendations.

Seretary Cohen was delighted with our results, saying they were exactly what he was looking for. But I pointed out to him that our conclusions were nearly identical to those advocated by a Commission set up by President Eisenhower in 1956. Numerous other small- and large-scale modernization efforts have failed to generate the political and operational support necessary to achieve the reforms Sec. Mattis now advocates.

Identifying challenges and devising solutions is relatively easy, but implementing reform is considerably harder. That is part of the reason Congress finally stepped in twenty years after the Defense Reform Task Force made its recommendations. The 2017 National Defense Authorization Act mandated the creation of the Chief Management Officer position, a role Gibson assumed in February 2018 after he served as the Deputy Chief Management Officer in November 2017. 

With Gibson’s departure imminent, the Trump administration is on the hunt for a successor who will operate under the forceful directive of Deputy Secretary of Defense Patrick Shanahan. Their focus should be both on a proven business leader who will fill the role and also on three objectives the entire administration must get behind: shift overhead to combat, identify and pursue short-term wins in business functions, and put in place significant reforms that, of necessity, occur over the longer term.

First, our leaders need to continue a sharper focus on warfighting. When most people think of the U.S. military, they think of the warfighter—the proverbial tip of the spear. But large numbers of military personnel sit at the other end of the weapon. For example, there are over 300,000 active duty military members doing non-military jobs, such as accounting services and medical administration, that civilians could do just as effectively at a much lower cost. Sec. Mattis says there are currently over 100,000 who are not ready to deploy—about 10 percent of the active duty force.

The fully-burdened cost of the active duty military has skyrocketed since the inception of the All-Volunteer Force in 1973. The average active duty soldier costs the government over $300,000 per year when one counts salary, health care and other benefits including commissaries, schools, the soldier’s share of research & development, and other costs. And the life cycle costs of paying people for sixty years to serve for twenty years, with a pension indexed for inflation and free health care for life, are off the charts.

Second, the administration should prioritize short-term wins on doable reforms. Doing so will redirect resources where they’re needed and create momentum for the bigger—and harder—changes ahead. Three key areas with the biggest potential for quick results include reforms in DLA and logistics, Defense Health Programs, and information technology, which take up roughly $38 billion, $50 billion, and $46 billion of the DoD budget, respectively, and collectively employ hundreds of thousands of military and civilian personnel.

When an average citizen is repairing his car, he can go online to see if a part he needs is in stock, how much it costs, when it will be delivered, or explore other options if any one of those factors is not to his liking. A sergeant who needs a part to repair his tank, however, can’t do that. He goes to the Defense Logistics Agency. But the DLA can’t tell the sergeant whether they even have his part, not to mention how much it will cost or when he can expect to get it. With his tank out of commission, his company commander has him reorder the part frequently. DLA’s predictive system was so antiquated they purchased $12 billion in inventory they did not need between 2006 and 2008. 

It’s imperative that Pentagon leaders include in their ranks business-minded experts who can improve areas like logistics while the military experts focus on warfighting.

Finally, DoD leaders need to also focus on the long-term impetus for change. All institutions resist change, and entrenched interests in the executive and legislative branches fight for the status quo. The new CMO must be a person who isn’t beholden to the status quo and special interest groups. The new leader will need the people around him or her to buy into the broader vision to drive reforms in the Pentagon and Congress to achieve the goals laid out by Sec. Mattis to ensure our military’s ability to successfully deal with great power competition. 

Maj. Gen. Arnold L. Punaro (USMC, Ret.), former Staff Director of the Senate Armed Services Committee, has chaired or served on numerous boards and commissions focused on business reforms in the Pentagon. He is the author of “On War and Politics: The Battlefield Inside Washington’s Beltway,” and an upcoming book on government reform. He is President of the soon to be launched Government Reform Institute.

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