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Gates Trims Senior Ranks in Major Cost Cutting Initiative

by Greg on August 9, 2010

In his continuing war on the “culture of endless money that has taken hold” within the Department of Defense since 2001, Defense Secretary Robert Gates announced today plans to eliminate Joint Forces Command, based at Norfolk, Va., curtail the use of contractors and eliminate up to 50 flag officers and 150 senior civilian positions over the next two years.

The cost cutting efforts announced today are not a budget cut drill, rather, he is trying to get ahead of deficit hawks in Congress that may be tempted to look to the defense budget as a source of money to cure the federal government’s fiscal woes. Seeking a “peace dividend,” Congress has slashed defense spending four times in the past, he said; he worries they’ll try it again.

“It’s about protecting money for the future.” Gates is struggling to free up money within the defense budget top line to spend on force structure and modernization to meet what he said were future threats, including failed and failing states and countries that are rapidly modernizing their militaries; which is the common euphemism for China. He singled out “precision ballistic missiles” as a looming threat to U.S. forces.

Current and planned defense budgets represent the minimum level of spending needed to prepare the military to counter such threats, he said. He hopes to find 2 to 3 percent in savings that can be reinvested in weapons systems. He highlighted shipbuilding as one area where more money is needed.

Where savings can be found, Gates said, is in the military’s bloated executive suites which have become “cumbersome” and overly reliant on contractors. While the wide ranging cuts he proposed today focused on trimming labor costs, Gates said he was mindful that at some point DoD must address the rampaging elephant in the defense budget: rising health care costs. “We’re being eaten alive by health care,” he said. The military’s health care costs have risen from $19 billion in 2001 to over $50 billion in 2011.

Gates said the services get to keep any savings they can come up with to spend on new weapons. He hinted that the services may propose significant personnel cuts of their own to free up money.

The initiatives announced today to reduce overhead duplication and excess include:

• Reduce funding for support contractors by 10 percent a year for the next three years.

• Close JFCOM, a command that includes some 2,800 military and civilian personnel and 3,000 contractors at an annual cost of $240 million.

• As part of a re-base lining, freeze the number of OSD, defense agency and Combatant Command billets at the fiscal 2010 levels for the next three years. No additional full time OSD positions will be created after 2010 to replace contractors except for critical needs.

• Freeze at FY2010 levels the number of flag officer, senior executive and political appointee positions.

• Consolidate IT infrastructure facilities.

• Freeze the number of DoD required oversight reports and cut the dollars for advisory studies by 25 percent.

– Greg Grant

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{ 25 comments… read them below or add one }

chaos0xomega August 9, 2010 at 6:08 pm

I understand (and admire) his reasons for doing this, but I think he needs to seriously reconsider his methods. It looks like a lot of what he is doing is really just skirting around the real problem areas rather than getting to the controversial heart of the matter (that the entire DoD establishment needs to be reorganized from the top down to eliminate all the redundancy and duplication of effort we have).

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JEFF August 10, 2010 at 6:26 am

I think though the first step to doing what you say is to eliminate redundancy. That way the people who are left are will tend to be more cooperative, either due to fear or due to their professionalism.

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noquarter August 9, 2010 at 6:25 pm

Yeah let's eliminate the contractors right after we learn that we are going to have to "lean on" contractors for the technical expertise in order to get our artillery functional. I agree with chaos above. We need to trim the fat for sure but trimming just to show that you are trimming? Hope we don't end up weaker in the end.

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JEFF August 10, 2010 at 6:29 am

The article on "leaning on" contractors for technical expertise was about the Marines identifying the need to get away that reliance. I think the reduction in contractors is going to come elsewhere.

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noquarter August 10, 2010 at 5:57 pm

Of course they need to get away from contractors but let's make damn sure they've gotten away from needing said contractors before tossing them in the bin.

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Nadnerbus August 9, 2010 at 6:59 pm

Who's to say these voluntary cuts wont be followed by additional cuts by Congress when they start raiding discretionary spending to pay for their social programs?

I think Gates' heart is in the right place, I'm just not sure his efforts will be rewarded.

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Stephen Russell August 9, 2010 at 9:00 pm

Cut internal DoD bureacuracy, then by Depts IE Army, Navy, AF.
Merge like commands, streamline commands, combine bases, Declassify Area 51 NV,
Less Black Ops Projects, Change procurement regs, Auction more to Public
Reuses bases for Marinas or airports?
etc.
More can be done.

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William C. August 10, 2010 at 9:06 am

Seems people don't like your suggestions about less black ops. We need that sort of thing in today's world. Also nobody will deny Area 51 exists these days. They flight test all sorts of aircraft there, but if you think they would reveal everything they are working on down there your crazy.

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STemplar August 9, 2010 at 9:25 pm

The reform needs to come from Congress not the DoD. As long as Congressmen have that one base closure that will cost too many lost jobs in their district, or just 10 more of something we already have enough of, to keep the line open and save jobs, or the must have duplicate part that really saves us money even though it costs us more money to build, but o yah the factory just happens to be in my district, the DoD is never going to cut costs. Saving money is easy, just decide that is the goal, and save money. Simple. Instead of all the competing goals and excuses for not saving money.

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chaos0xomega August 10, 2010 at 3:20 am

Agreed, but Ive yet to figure out a reasonable way (short of a complete dictatorship) where we could put an end to the congressional problem.

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STemplar August 10, 2010 at 3:55 am

It requires some cajones on the part of the CINC and probably can't happen while we are in active ops. First step is veto the spending bills if they keep buying defense welfare items, like more C17s. Second step is put requirements in the RFPs that the manufacturing of items can't be spread out over multiple states. The C17 has total parts from something like 40 states, that sure doesn't have anything to do with business efficiency. Finally you have to get practical people in charge of the services. No more fighter jocks for the USAF, get some submariners running the USN, A Commandant that thinks about the future and doesn't relive the past, and a Chief of Staff of the Army that is all about logistics and rooted in the world of highly likely and not Tom Clancy.

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msufalcon August 10, 2010 at 8:00 am

modern supply chain management theory makes its so its cheaper to build component parts all over and ship them in then to build everything in one place, look at how many different countries the component parts of ipods come from as an example

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chaos0xomega August 10, 2010 at 3:03 pm

See, the problem with that is that most of that will likely have to be put through congress first before it becomes practice… meaning it probably won't happen.

And in any case, that doesn't necessarily solve the problem (although I admit your ideas are pretty good), just shifts it over a bit. Instead of senators fighting to make sure there district gets a part of the pie, they will instead fight to make sure that the new Boeing plant to build the new bomber will be set up in their district instead.

The only way to really put an end to that is to put a one term limit on senate/house seats, but even that will only shift the problem. Instead of a senator being a *!$%wad so that he can get re-elected he's going to be a *!$%wad so that he can make a meaningful endorsement for his replacement and get kickbacks in the process, or he'll do it to get a nice comfy job at whatever corporation he just helped push favored legislation through for.

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Rick W August 10, 2010 at 3:20 pm

What you are looking for is called a line item veto. But that's already be tried (in 1996 under Clinton) and Congress had a fit. Rudy Gulliani (sp?) who was then the mayor of NY brought a suit against it and the court ruled it unconsitutional.

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Holyland August 9, 2010 at 10:55 pm

Your article is not correct.
Dr. Gates said, “At a minimum, I expect this effort to cut at least 50 general and flag officer positions and 150 senior civilian executive positions over the next two years,” according to DOD web site article.

Not up to 50 50 flag officers and 150 senior civilian positions

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Jim Davis August 9, 2010 at 11:53 pm

Obama's strategy to balance the budget, or at least to reduce the deficit (while spending big elsewhere) is to follow Clinton's. This is only the beginning. Stay tuned.

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Blight August 10, 2010 at 4:23 am

I wonder if the military would be better if we decoupled pay grade from rank. Someone who is exceedingly competent and indispensible at a lower rank, versus someone who is a political animal and is higher up the food chain…and the latter is usually paid more.

I don't know if more positions in the Pentagon could be taken up by DoD civilian employees instead of by military personnel, but that's always a possibility. How much of the administration of the military needs actual military personnel in the loop? Automation/computerization and a switch to hopefully cheaper civilian employees might be the way to go on this. Its not like civilian employees are ex-Special Forces and get paid top dollar a la a Private Security Company, nor will they get all the cushy GI bill/VA benefits just for doing desk work.

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JEFF August 10, 2010 at 6:26 am

Clearing out what are effectively executive positions is a good idea, in private companies cleanning house usually stops at middle management. The willingness to cut into the higher echelons shows he's serious about this.

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Clement August 10, 2010 at 9:26 am

Can any of the more knowledgeable people help explain the potential implications/ramifications of cutting JFCOM?

Thanks,
Clement

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john Moore August 10, 2010 at 11:26 am

What about just going with fixed prices for fighters as an example, no more of this 100B over budget and additional funds, they low ball the initial est and then demand more $ to keep the project going.

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Blight August 11, 2010 at 9:08 am

It would mean that when the air force changes a spec and forces a redesign, that eventually when you hit the money limit and the changes keep coming the project is effectively dead if the company projects that costs will exceed termination fees.

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bobbymike August 11, 2010 at 5:20 am

Any initiative to reduce the tooth to tale ratio as well as get more advanced weapons to the warfighter is welcome. But the savings HAVE to go to recapitalization not to "fund" profligate state governments as we have just seen with the $26 billion "stimulus" just passed by Washington.

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Blight August 11, 2010 at 9:09 am

Gates wanted cuts, but I assume they were coupled with reprogramming the funds to other dod initiatives. Contractors should not see this as a reprieve to do business as usual.

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SCPO USN Ret August 12, 2010 at 3:49 pm

Just read my Navy spent 80 million for new digital cammie design. Why dose each service have to have it's own combat uniforms. Oh I guess it is because they can each have a little digital logo embedded in the patterns.

Start there and work your way down. How about all the different types of rifles, pistols, etc. Plus different PT gear, combat boots, bathing suits, under wear, etc.

We fought WW2 with one standard set of weapons for all services.

Like the $200,000 USMC Jeep…a lot of this stuff is generated from high level O's on active duty who just change a uniform for suit when they retire.

Wonder who and what company was involved in the 80 million dollar navy uniform scam.

I wish I had a velcro contract. Every uniform seems to have yards of it attached. Guess no on can sew on buttons anymore. Of course each service would have to have it's own sewing kit, except the Air Force. They would have a mini electric sewing machine.

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Bob August 10, 2010 at 2:34 pm

They spend their time on PC and diversity programs because their civilian bosses tell them too. Havn't you noticed that the civilians run the military, and our civilian government is very into PC and diversity. Hell, I think the government invented it.

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