Nobody likes wasteful government spending, whether it’s $500 hammers at the Pentagon or federal employees using Uncle Sam’s credit cards to buy personal cameras, laptop computers and iPods.
So the military should set a goal: Find ways to trim the fat in its budget, then reinvest the savings in combat missions. One area in which the United States military can operate more efficiently, possibly providing large-scale dollar savings, is in logistics.
For example, if the maintenance costs incurred for the support of existing weapons can be reduced, the savings can be channeled into the acquisition of new weapons that will be less expensive to maintain. While this step would require larger overall defense budgets for the core defense program, it can help to initiate a reverse dynamic that will permit the death spiral to become a recovery spiral.
According to the Aerospace Industries Association, the Department of Defense could save as much as $32 billion each year if it increased the application of performance-based logistics in several specific areas. However, achieving this level of savings would require five steps:
1) Broaden the application of performance-based logistics at all levels of the logistical system, specifically the component level, the subsystem level, and the system level.
2) Expand the Pentagon’s use of commercial supply chains.
3) Use outcome-based partnerships in order to transfer best practices for distribution from the commercial sector to the public component of the logistical system.
4) Establish more outcome-based partnerships in theater-based logistics.
5) Provide greater access to commercial managed services to provide information technology to the logistical system.
These steps would save money by streamlining the logistic systems the military relies on to remain deployed and complete missions. Most savings would occur in the operations and maintenance accounts of the Department of Defense budget. Reducing these costs would permit the Department of Defense to break the “death spiral” in the acquisition system, broadly defined to include the full life-cycle costs of weapons systems.
The acquisition death spiral, as described by then-Under Secretary of Defense Jacques Gansler in 1998, is a cycle where aging weapons and inefficiencies in the support programs for existing weapons divert defense dollars to the maintenance accounts, which results in deferral of the procurement of new weapons, which in turn results in older and more expensive-to-maintain weapons.
Initial experience with performance-based logistics indicates that it is a well-designed approach that could improve the overall effectiveness and efficiency of the military’s logistical system, particularly in the maintenance of weapons and equipment. So Congress and the Department of Defense should take action.
Lawmakers should find ways to expand the use of performance-based logistics, and reinforce the partnerships between contractors and the Department of Defense. Congress should also establish a pilot program to identify and eliminate barriers to expanding public– private partnerships in logistics.
Finally, and most importantly, the Defense Department and Congress should plow all savings from the logistical system back into procurement. That means more money and better equipment for our men and women in uniform, at no additional cost to taxpayers.
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