Efficiency Push Elicits Skeptical Response

Last week’s meeting between defense department officials implementing a new efficiency initiative and representatives from the defense industry did not go well. Although everybody in industry understands the need to cut costs, there is pervasive skepticism about the government’s ability or willingness to do its part. The prevailing view among contractors is that they will work to whatever standards and requirements the federal customer establishes, but that nearly all of the waste in the system is traceable to the practices the customer has previously put in place. Therefore, the real key to efficiency is transforming the government customer into a more disciplined and competent buyer — a goal that past experience suggests is nearly impossible.

There’s a lot of mythology in the defense sector about how things used to be better in “the old days” — back before the Cold War ended, or before Goldwater Nichols, or before John McCain decided to go into politics. But a dispassionate assessment of the history of military procurement suggests that weapons-buying practices have always been a mess. The main reason is that the federal government is a political system, and political systems thrive by rewarding supporters. If the Pentagon pared its weapons-buying bureaucracy down to a lean, mean machine by eliminating redundancy and stressing value, the political fallout would endanger the careers of key politicians. The only voters who really care about weapons spending are those whose jobs depend on Pentagon largesse, and those voters are disproportionately located in electoral swing states like Colorado, Florida, Missouri, Ohio and Pennsylvania.

Like Bob Dole’s old line about tax cuts, the typical response of a defense worker to efficiency moves is “don’t cut him and don’t cut me, cut that crook behind the tree.” You know, the guy I’ve never met but whom I’m sure is robbing the government blind. I, on the other hand, am making the world safe for democracy by producing this helmet lining here in Johnstown using twice the labor inputs a Korean factory would require. That’s the way politics works — it’s all about self-interest, and abstractions like “efficiency” and “productivity” have no traction unless they connect with the interests of key players.

The contradictions of trying to winnow down waste in this kind of political culture are on display every day at the Pentagon. Even as military contractors reduce their workforces in response to softening demand, the government is adding tens of thousands of acquisition workers. It continues to require set-asides for marginal (“disadvantaged”) contractors like Native American tribes who have gamed the system for big bucks, while wasting vast amounts of time and money on regulations that have no connection at all to producing weapons efficiently. The notion that this system can be made more efficient through analysis has been proven fallacious over and over again. What it can be made is smaller, by directing money to other interest groups with more political clout than the people currently getting the funds. And that is the main way that money will be saved at the Pentagon in the years ahead. The “efficiency initiative” is just another dead-end gesture the sector must endure as it heads into a downturn.