Finding Efficiencies in the Business of Defense

The nation’s fiscal crisis all but ensures that the Department of Defense will be resource constrained for the foreseeable future. Budget cuts are expected to be steep, resulting in a real need by DoD officials for advice from senior executives on managing in an era of declining resources. BENS has taken on this challenge before and expects senior DoD leadership and Congress to seek our views going forward on how to cut costs and squeeze efficiencies out of the infrastructure and overhead categories in the defense budget.

A decade ago, we released the recommendations of the original BENS Tail-to-Tooth Commission. Its approach, still relevant today, is based on two simple but compelling ideas: the areas most in need of reform are amenable to best business practice solutions, and those business models that have served America’s world-class companies should be adopted by the Department of Defense–saving money that can be reinvested in modernization and other programs.

In launching our current project on Finding Efficiencies in the Business of Defense, BENS seeks to promote uncompleted work from its earlier Commission, and to suggest long-term structural changes to the Department’s infrastructure and overhead that tie back to work from the 2009 BENS Task Force on Defense Acquisition Law & Oversight and the 2010 BENS Defense Efficiencies effort.

Going forward, we are initiating member-led efforts across a broad range of best private sector practices. These include:

Individual study efforts scheduled to-date focus on (known release dates in parentheses):

• Base Closure and Realignment: Re-energize a non-traditional coalition of advocates to support reauthorizing legislation for BRAC rounds in 2015 and 2017 to enable DoD to adjust basing structure to match its force structure.
• Contracting for Services: Demonstrate how to achieve excellence in contracting for services. Service contracts consume nearly half of the procurement budget: $202 billion in FY2010.
• Compensation and Benefits (including health care): Add a distinctly private sector perspective to the abundant proposals to change current practices and rules in the pay, allowances and retirement systems of military and defense civilian personnel.
• Air Force ERP: At the request of the HQ USAF Deputy Chief management Officer, help the Air Force design an appropriate management structure for their planned Enterprise Resource Planning implementation

Two additional efforts are taking shape:

• Review of Defense Business Practice Reorganization and Change: A BENS CEO panel to provide business reorganization insights to the Deputy Secretary of Defense and, perhaps, one of the Defense Agencies or Military Services.
• Army Installations Management Command (IMCOM) Management Issues: Promote change in the system at the Headquarters Army level that would be unattainable at the local, operational level. A draft working paper would be issued as each working group completes its effort. A follow-on plan for turning the recommendations into action would follow.

These and other critical actions will help the Department of Defense reduce the cost of its infrastructure and overhead.