Can a Dysfunctional Pentagon Reform Itself?

In his first major address as Secretary of Defense, Chuck Hagel identified the elephant in the room when it comes to the future of the Department of Defense (DoD): the Pentagon has become an inefficient, top-heavy, bureaucratized organization seemingly as devoted to social service programs as it is to warfighting. Early in his remarks, Secretary Hagel declared that “the biggest long-term fiscal challenge facing the department is not the flat or declining top-line budget, it is the growing imbalance in where that money is being spent internally.” It was rather remarkable for a member of Team Obama to repeat the comment by former CNO Admiral Gary Roughead that without change DoD could morph from “an agency protecting the nation to an agency administering benefit programs, capable of buying only limited quantities of irrelevant and overpriced equipment.”

The Secretary laid out a devastating bill of indictment of the management failures in the department he now heads. Among the problems he identified are:

• The contribution of the Goldwater-Nichols legislation to the expansion of military and civilian staffs. As Hagel noted, “cost and efficiency were not major considerations.”
• The proliferation of three and four star command and support structures even as the size of the Armed Forces has shrunk significantly.
• Apparently acknowledging a critique by the Defense Business Board of Pentagon personnel policies, the employment of tens of thousands of uniformed active duty personnel and government civilians in positions that could be done equally well and for far less cost by private contractors.
• The failure to pare down what the Secretary called DoD’s “Fourth Estate,” which consists of the Office of the Secretary of Defense, the joint staff, the combatant commands and the defense agencies and field activities – the Missile Defense Agency as well as those that provide health care, intelligence, and contracting support.
• Runaway personnel, health care and retirement costs.
• Even after decades of reform initiatives, an acquisition system that doesn’t operate efficiently, effectively or quickly enough to meet the needs of troops and commanders in the field.
• In a related criticism, the failure to adopt common sense organizational and process reforms standard in the private sector that have resulted in improved efficiency, greater productivity and reduced costs.

Secretary Hagel did identify another culprit, an enabler if you like, in the Pentagon’s dysfunction: Congress. “In order to address acquisition, personnel, and overhead costs in smart ways that have not been done before we need time, flexibility, and the support and partnership of Congress. We also need long-term budget certainty.” He went on to acknowledge that institution’s enormous reluctance to embrace change and reform.

The Secretary has directed the department to conduct a Strategic Choices and Management Review to examine the choices underlying the department’s strategy, force posture, investments and institutional management. This review is being led by Deputy Secretary Ashton Carter in close cooperation with the Chairman of the Joint Chiefs of Staff, General Martin Dempsey. In theory, the review should address many of the problems Hagel identified, although its short, two month time frame makes it virtually certain that it will not be able to adequately address how to reform the Pentagon’s structures, personnel policies and management practices.

Is it possible for a dysfunctional Pentagon to reform itself? The Deputy Secretary and Chairman are smart, experienced and committed individuals. They will do their best given the time available. But look how difficult it was for Secretary Gates, who cancelled some $300 billion in weapons programs, to shut Joint Forces Command. Even though the command’s flag was eventually furled, almost all the functions it performed and the personnel that did them were transferred to other DoD entities. As a result, there was very little real savings from this action. I wonder how easy it will be for Dr. Carter and General Dempsey to cut radically the size, and hence the power, of OSD and the Joint Staff. In fact, when the Deputy Secretary was the Under Secretary of Defense for AT&L and pursuing major acquisition reform initiatives, the size of his organization increased and now numbers nearly 50,000 people. I am sorry to say it but physicians generally do not heal themselves.

What is needed in order to address a problem of such magnitude and political sensitivity is an independent commission that combines the essential features of Simpson-Bowles, Goldwater-Nichols and BRAC. It would have to have the support of both the Executive and Legislative branches. Its goal would have to be legislation directed at reforming the Pentagon’s structures, policies and procedures. Like BRAC commissions, it would recommend cuts and realignments to the current civilian and military organizations that could not be amended; Congress could only vote up or down.