Report: DOD lacks realistic plan to cut costs at management headquarters

These graphs, from left, show that the Transportation Command, Strategic Command and Special Operations Command, respectively, spend 73 percent, 44 percent and 80 percent of their allotted funding on their headquarters operations.


By WYATT OLSON | STARS AND STRIPES Published: June 27, 2014

The Pentagon has produced no realistic plan for cutting costs at its many management headquarters, according to a report released Thursday by the Government Accountability Office.

The Department of Defense was mandated by Congress to develop and submit a plan by the end of this month for HQ budget cuts for the years 2015-2024, which was to include combatant commands. It remains unclear, however, “how the department will provide reliable information to Congress,” concluded the report by the GAO, a government watchdog agency that advises lawmakers.

The report examined the Defense Department’s three so-called functional combatant commands: the Special Operations Command, Strategic Command and the Transportation Command. These commands employ thousands to support the DOD’s six geographic combatant commands and the four military services.

The secretary of defense last year directed that spending in management headquarters be cut by 20 percent, which included civilian personnel, facilities and information technology.

But cutting that layer of management by a certain percentage requires a reliable baseline, which the DOD does not have. The GAO has issued several reports during the past few years cajoling the Pentagon to determine such a baseline.

A GAO report last year found that “DOD’s process for sizing its combatant commands had several weaknesses, including the absence of a comprehensive, periodic review of the existing size and structure of these commands and inconsistent use of personnel-management systems to identify and track assigned personnel.”

A 2012 report found that the DOD didn’t have “complete and reliable headquarters information available for use in making efficiency assessments and decisions.”

In general, the size and expense of management headquarters has ballooned during the past decade. The number of authorized positions across the commands increased from 5,731 to about 10,500 during the nine years leading up to fiscal year 2013, the GAO report stated. The combined costs for headquarters operations increased from $296 million in 2001 to just more than $1.23 billion in 2013, as calculated in fiscal year 2013 dollars.

In the study just released, the GAO found that the DOD’s tracking of “underlying data” was “inconsistent,” with various commands calculating total costs in different ways.

“All the commands included costs for categories like civilian compensation, travel and transportation expenses,” the report said. “However, some commands included categories such as software for command-specific systems as well as command-specific equipment. Based on discussions with DOD officials, it is unclear whether the commands were consistent in their approaches for identifying and self-reporting the information they provided.”

The report points out that it’s critical to determine a baseline for management costs because that will serve as the basis for cutting management by 20 percent as the defense secretary has called for.

Based on its data collection, the GAO estimated that about 2,500 of 10,500 total authorized positions are considered to be part of “management headquarters functions.” A 20-percent reduction of would amount to a “relatively small cut” of about 500 positions, “or less than 5 percent of the overall authorized positions at the commands.”

“[S]ince the universe of resources that DOD has identified for headquarters reductions is relatively small compared to the overall size of the functional combatant commands, unless the department reevaluates its decision to base reductions on management headquarters, it may not ultimately realize significant savings,” the report said.

In response to the report’s findings, the DOD told the GAO that the military services were allowed to make cuts in elements of combatant commands that are not designated as management, cuts that will range from 3 to 15 percent.

“However, the department’s response did not delineate how these reductions were determined, how they were applied by the military services, or how much the actions would ultimately save the department,” the GAO report said.


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