As DOD seeks to reduce spending, the Pentagon's top acquisition official says that cutting big-ticket weapons programs won't be enough to generate serious savings.
Continuing resolutions may look to Congress like an easy way to keep the government running while budget disagreements are debated, but they carry a bigger cost than they appear to, said Ashton Carter, under secretary of defense for acquisition, technology and logistics.
Speaking at the Heritage Foundation on April 20, Carter called the practice “not just inefficiency, but anti-efficiency.”
“Each and every program manager in the department has had to upset carefully calibrated plans, stop or slow activities only to restart them later, defer the commencement of important new programs and so forth. And the result of this is not only delay, it is inefficiency,” he said. “It is an uneconomical way to proceed in this herky-jerky fashion with all of our programs, procurements and activities.”
The budget uncertainty has added another layer of wasteful spending that will need to be stripped from DOD funding, Carter suggested.
“This has cost us billions to operate in this way,” he said. “It adds a dollop of cost overhead to everything we are doing. It is like a hidden tax.”
Carter added, “Whatever the budget levels are, this will feel very different to a group of government and industry managers and congressional overseers who have grown accustomed to [always reaching] for more money when they encountered a managerial or technical problem or a difficult choice. It’s clear that everyone, from the president to the defense secretary to the taxpayer, expects DOD to make every dollar count.”
Carter also said more cuts are ahead for DOD. Although virtually all parts of DOD spending are on the chopping block, it still won’t be enough to attain the $400 billion in DOD budget reductions President Barack Obama called for on April 13.
“We will be scrutinizing all of our programs and activities for those that are not needed,” Carter said. “It’s very easy to pick [weapons] programs because they all have a name and they are discrete. They are easy to write about, but that’s not where the money is…it is only a piece of the budget.”
Carter noted that weapons procurement accounts for $100 billion, or one-seventh, of the total DOD budget, with 70 percent of that going toward sustaining existing systems. He said DOD will need to look beyond weapons acquisition to achieve real efficiencies.
“We need to take a comprehensive look at our spending, including, but not limited to, acquisition programs,” he said, indicating the $400 billion DOD spends annually on contracted goods and services. “That is exactly what better buying power does.”
Carter released the 23-point “better buying power” guidance for acquisition reform last Sept. 14, just after Defense Secretary Robert Gates announced plans to identify and reinvest $100 billion during the next five years.