Monday, December 12, 2016

$NAFU - The Killing of Potential Cost Savings

"Why the Pentagon ‘buried and killed' a study on potential cost savings" PBS NewsHour 12/6/2016


SUMMARY:  Leaders at the Department of Defense periodically conduct efficiency reviews, looking for ways to cut costs.  One such report, ordered by Deputy Secretary of Defense Robert Work in 2014, was scrapped after it identified wasteful spending and suggested measures to save $125 billion over five years.  For background and analysis, Judy Woodruff speaks with The Washington Post's Craig Whitlock.

JUDY WOODRUFF (NewsHour):  Every few years, Pentagon leaders conduct efficiency reviews, looking for ways to save money.

Two years ago, Deputy Defense Secretary Robert Work commissioned a study that looked at how much the Defense Department spent on things like its supply chain, property management and health care.  But according to The Washington Post, when the results came back that said an estimated $125 billion could be saved over five years, the report was buried by top Pentagon officials.

Reporter Craig Whitlock broke the story for The Post, and he is here now to tell us more.

Craig Whitlock, tell us how all this started.  Why did — why was the study ordered in the first place?

CRAIG WHITLOCK, The Washington Post:  Well, a couple years ago, the Pentagon's budget, the defense budget, was under a lot of pressure.  It had been flat for a few years, and military leaders were worried that, under sequestration and the Budget Control Act, that they could actually be forced to stomach some pretty substantial cuts in the coming years.

So, Deputy Defense Secretary Bob Work ordered a federal advisory panel of private sector executives to start collecting a lot of data about how much the Pentagon spends on its back office functions as a way to find ways to save money.

JUDY WOODRUFF:  And the work — the study got under way.  They asked them to do it in a relatively short period of time, just a few months.  It wasn't easy to do.  I gather there wasn't a great deal of cooperation across the board.

But they did come back with a report.  And what did it find?

CRAIG WHITLOCK:  Well, what they found was pretty striking.

This is kind of hard, I think, for most folks to understand.  But the Pentagon, actually up, until then had no idea how many contractors actually worked for it.  So they were trying to figure out how many people worked in its business operations.  And they found that more than one million people worked in these core business operations, like you said, health care management, human resources, property management, things that any organization needs.

But, you know, even for the Pentagon, one million is a lot of people.  These are essentially desk jobs.  And that compares to only 1.3 million active-duty troops.  So the backing of the Pentagon was almost as big as, you know, the tip of the spear, so to speak.

JUDY WOODRUFF:  So, Secretary Work, number two man at the Pentagon, when he and others saw this report, what did they do?

CRAIG WHITLOCK:  Well, they had touted this in advance, saying this was going to be really important, and that they had asked these private sector executives to help them make sure that the report didn't gather dust and that they would, you know, pass all these — or adopt these recommendations.

But when the numbers came back much bigger than they thought, and the recommendation that they could save $125 billion over five years, effectively, they buried and killed the study.  The data that had been collected internally for the first time to pinpoint how many people worked in these jobs was kept secret.

It is still classified and confidential.  We worked hard for months to get our hands on it.  We were unable to.  And I was working with Bob Woodward, my colleague here at The Post, who is pretty good at that stuff.  To this day, they have kept that data confidential.

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