Pentagon looks to save billions with smarter spending

Pentagon officials estimate they can save $100 billion over the next five years by reining in skyrocketing contract costs.

Kevin Wolf/AP
Defense Secretary Robert Gates, (l.) turns a press briefing over to Defense Undersecretary for Acquisition, Technology and Logistics Ashton Carter after making a statement at the Pentagon Tuesday.

The last time the Pentagon tried to order up a presidential helicopter, it abandoned its plan after reports surfaced that the cost of test aircraft had doubled and would run into the billions of dollars.

Now, the Pentagon is once again aiming to buy a new presidential helicopter and, in the process, putting new measures in place throughout the Defense Department to rein in skyrocketing contracting costs.

To that end, they are calling on defense officials to begin providing estimates of not just what new planes, weapons, and, say, internet services will cost – but what these items should cost as well. “So we don’t end up,” as Secretary of Defense Robert Gates explained in a press briefing Tuesday, “with another half-billion dollar presidential helicopter.”

Of the nearly three quarters of a trillion dollars that the Pentagon now spends each year, defense officials allot some $400 billion for contracts for goods – including weapons – and services such as computer systems. It is in this realm that defense officials estimate they can save $100 billion over the next five years.

The Pentagon is asking officials to weigh in on budgetary matters and say, “We shouldn’t do that; we shouldn’t pay that,” says Ashton Carter, Undersecretary of Defense for Acquisition, Technology, and Logistics, who also briefed reporters.

Reducing costs may also mean “reducing ambition” in some areas, he added. On ships, for example, defense officials might ask, “Is it really worth it to go one knot faster?” Mr. Carter added.

The Pentagon may also need to bring in more experienced acquisition experts, who have long been in short supply there. Gates was reportedly “amazed” at the “junior people negotiating these huge contracts” on behalf of the Defense Department for services, according to Pentagon spokesman Geoff Morrell. Carter explained many defense officials who buy weapons systems “buy them for a living.” But the less experienced defense officials who often pay large sums of money for services simply “are trying to get something else done,” he said. “They’re amateurs.”

In an effort to reward contractors who consistently stay on budget, the Pentagon is also rolling out what it likens to a “frequent flier program.” Those who “do a good job … we’ll give preferential treatment to,” Carter said.

A number of programs have been canceled recently by Gates in an effort to rein in costs during a time in which the defense budget is leveling off after years of wartime growth post-9/11. “In that era,” Carter said, “fat has crept in.”

Defense officials say they are also concerned about private defense corporations like Blackwater that operate under some two dozen names, raising issues of accountability.

“We are optimistic we can do well,” Carter said of the cost-cutting measures, “because we haven’t really applied ourselves in the past.”

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