Bureaucratic Delay Is A Key Source Of Pentagon Inefficiency, Costing Billions Of Dollars

On September 14, Pentagon acquisition chief Ashton Carter released guidance to his staff concerning execution of the defense department’s efficiency drive. The efficiency drive is supposed to save many billions of dollars over the next five years by professionalizing weapons-purchasing practices and streamlining the way the military does business. Much of what Carter mandates makes sense — at least, as long as Congress is willing to go along and the acquisition workforce has sufficient skills to implement more rigorous acquisition procedures.

However, several features of the Pentagon’s current behavior raise doubts about whether policymakers and bureaucrats are in the right frame of mind to save money. One such issue is the plan to hire thousands of new civil servants into the acquisition system, on the argument that the system isn’t adequately staffed to disburse the amount of money it is receiving. That’s a startling admission, but even if true, it’s a bit counter-intuitive to hire so many high-priced workers just as the military is pulling out of Iraq and budget experts are predicting Pentagon spending will fall.

Another perverse feature of the current acquisition system is its tendency to ponder program decisions for so long that it ends up causing costly delays. The process whereby military requirements become fielded equipment is so baroque that surmounting the various hurdles to full-rate production has become costly and time-consuming even for model programs. For instance, once a program has entered the “systems development and demonstration” phase — the most intensive stage of development — it must successfully complete a (1) systems requirements review, (2) integrated baseline review, (3) system functional review, (4) preliminary design review, and (5) critical design review. The challenge of simply getting all the players into a room so they can agree the latest threshold has been met can take months, during which time workforces and supply chains must be kept intact awaiting approval.

Nobody in the Pentagon ever seems to ask what the cost is of introducing yet another hurdle into the acquisition process, but it’s a safe bet a lot of money gets wasted through bureaucratic dawdling. One indication of just how sizable the waste is can be inferred from adding up all the programs appropriators decide to take money from because of delays. In its review of the fiscal 2011 budget request, the Senate Appropriations Committee decided to cut $4 billion from weapons programs due to delays. It slashed everything from electronics for the Air Force’s C-17 airlifter to the Navy’s littoral combat ship to the Army’s theater missile-defense system to the Marine Corps’ next-generation jumpjet. The committee argued that bureaucratic delays had reduced the time left in the fiscal year to spend budgeted funds, so it used a portion of the funds for other purposes — potentially wreaking havoc on carefully crafted program plans.

It’s good to know that policymakers are taking the time to make sure programs have met key objectives before moving on to the next step in development, but at some point the deliberations themselves start to become a source of inefficiency. When unnecessary delays become a chronic feature of the system, that raises questions about whether it is being competently managed.