Leaders direct DOD to buckle down on spending
Because the recent spending deal did not permanently solve the nation's fiscal crisis, the Defense Department is now planning measures to limit its budget risk.
Defense Secretary Leon Panetta: DOD must implement 'prudent measures' to mitigate budget risk. (DOD photo)
The Defense Department’s two top leaders on Jan. 10 instructed the military services to get serious about planning to major budget cuts, including a memo from Deputy Defense Secretary Ashton Carter with guidelines for addressing looming fiscal uncertainty.
Military agencies have received the green light to freeze civilian hiring, terminate temporary hires and reduce base operating funds. Also on the chopping block are expenses that could include business IT, according to the memo, which has been viewed by FCW. The measures regarding the workforce have already prompted a complaint from a federal employees' union.
Related:
Union complaint: DOD memo biased toward contractors
In the memo, Carter attributes the guidance to concerns about sequestration and the ongoing use of continuing resolutions.
“Given the overall budgetary uncertainty faced by the department, and in particular the immediate operational issues presented by the CR, it is prudent to take certain steps now in order to help avoid serious future problems. I therefore authorize all defense components to begin implementing measures that will help mitigate execution risks,” the memo stated.
Carter also directed that any measures undertaken should be able to be undone in the case agreements are reached on Capitol Hill.
“For now, and to the extent possible, any actions taken must be reversible at a later date in the event that Congress acts to remove the risks I have described. The actions should be structured to minimize harmful effects on our people and on operations and unit readiness,” Carter wrote.
Beyond personnel guidance, the memo permits the services to cut travel, training and conferences. It additionally includes within near-term measures the curtailment of “administrative expenses such as supply purchases, business IT, ceremonies, etc.”
The outline also allows agency leaders to review contracts and studies for possible ways to cut costs or find savings. All research and development, as well as production and contract modifications, that obligate more than $500 million now are subject to clearance by the under secretary of defense for acquisition, technology and logistics prior to award, according to the report.
Officials also must provide the under secretary and the assistant secretary of defense for research and engineering with a budgetary impact assessment of fiscal uncertainty on research priorities for all science and technology accounts.
At a Jan. 10 Pentagon briefing, Defense Secretary Leon Panetta echoed the concerns Carter conveyed in the memo.
“While we appreciate the fact that both parties came together to delay sequester, the unfortunate thing is that sequester itself, and the sequester threat, was not removed. So the prospect of it happening again is undermining our ability to responsibly manage this department in the current fiscal year,” Panetta said. “Regardless of what Congress does or fails to do, we still have an obligation to protect this country. So for that reason, I've asked the military services and the other components to immediately begin implementing prudent measures that will help mitigate our budget risk.”
He noted a potential “perfect storm of budget uncertainty” in sequestration, the continuing resolutions and an impending debt ceiling debate.
“The fact is, looking at all three of those, we have no idea what the hell's going to happen. All told, this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness,” Panetta said.