A slow delivery on promise to trim Pentagon waste

By , Staff correspondent of The Christian Science Monitor

The Reagan administration began its unprecedented peacetime military buildup vowing to change the way the Pentagon does business. It pledged to clean up ''waste, fraud, and abuse,'' and also to institute management initiatives to tighten up weapons procurement and curb cost overruns.

After two years in office, how has it done? According to the Defense Department, it's taking longer than hoped to make such reforms work. But officials say they are beginning to see results.

At the same time, however, the overruns continue. Critics see questionable procurement practices, such as the juggling of cost figures for the controversial F-18 fighter. Others say the Navy's plan to lease instead of buy some ships, may reduce their apparent price but could lose tax revenues in the process and end up costing more. The Pentagon denies these charges. But there is no doubt that the time-honored practice of spending considerable sums to coddle members of Congress (and even relatively minor functionaries) with free rides on military planes persists.

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There have been attempts in the past to reform Pentagon buying, which accounts for about three-fourths of all federal government private-sector purchases. But major problems have continued. For this reason, former Deputy Defense Secretary Frank Carlucci, who recently left for private industry, set forth two years ago 32 management initiatives to improve efficiency in spending.

These include multiyear contracting, using more realistic inflation estimates , increasing competition, decentralizing procurement authority, and reducing contractor regulations. Some of the measures are generally accepted as necessary , others are controversial.

In his annual report to Congress, Defense Secretary Caspar W. Weinberger recently said the Pentagon expects to save $17 billion with such initiatives over the eight-year period through 1988. This is a large sum in itself, but relatively minor compared with overall military spending, which is likely to surpass $2 trillion during that time.

A study by the conservative Heritage Foundation described the projected cost-savings from these measures as ''minuscule.'' ''The Carlucci initiatives are fine as far as they go,'' it said. ''But they do not promise significant relief from the growing internal budget pressures that are soaking up resources intended to increase defense capability.''

Gordon Adams of the Council on Economic Priorities in New York fears that some of these initiatives could end up costing more and also could make it harder to spot potential overruns. Dr. Adams is the author of a book on defense contracting as well as a report, to be released this week, on the Carlucci initiatives.

Some of the initiatives - more efficient rates of production, better inflation figures, including adequate initial research and development money - involve ''front loading'' spending plans to avoid surprises later on. But, Adams says, essential cost-control measures are lacking. He includes taking better account of a contractor's past performance before awarding work, including stiff competition as part of multiyear contracting, and setting priorities among weapons systems, some of which may be questionable.

He also notes that some controversial systems (like the Pershing II intermediate-range nuclear missile) are already in production without having had adequate testing. This same criticism was raised last week by the General Accounting Office regarding such new Army weapons as the ''Sergeant York'' air defense gun.

Congress last year included, as part of its defense appropriations bill, requirements to make the Pentagon report more often when weapons costs escalate. But the new initiatives (as part of efforts to deregulate and decentralize procurement procedures) reduce some reporting procedures. ''It's harder to get information from the Pentagon because of the Carlucci initiatives,'' Adams says. ''And it's harder for Congress just like it's harder for everyone else.''

Mr. Carlucci's replacement as chief budget shaper and watchdog at the Pentagon is Paul Thayer, a World War II Navy fighter pilot who most recently was chairman of the LTV Corporation, a major defense contractor. As a private businessman, he said government spending should be curbed, including the defense budget.

Observers of Pentagon spending and earlier attempts at reform say it takes someone who knows the military-industrial complex and has the will as well as the authority to effect needed changes. Mr. Thayer may meet these criteria, but his task is formidable.

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