Tuesday, December 6, 2016

Wasteful? Yes. Overplayed, Yes.

Every democracy messes up defense procurement, but they vary in how they do it.  Canada messes it up by deferring decisions so that defense inflation itself drives up the costs.  I will be speaking later this week at a conference on defence procurement in Canada, even though I don't really study procurement itself.  My take will be that parliamentary ignorance is part of the problem.  In the US, Congress is part of the problem, but perhaps because of too much engagement, certainly not too little.

So, when I see a story about Pentagon burying evidence of $125 billion in bureucractic waste, I have lots of reactions:
  • Using Pentagon as shorthand for Department of Defense can be handy, but the subsequent discussion tends to make one thing that a million people work in the building. Um, no.  Not that big of a building.
  • Using Pentagon also helps to deflect responsibility--is the failure with the uniformed services or with the Office of the Secretary of Defense [OSD]?  The answer, of course, is yes, both, but in different ways.  Conflating them is not especially helpful.
  • Saying $125 billion as a percentage of annual spending on the military is DECEPTIVE, since the $125 billion figure is created via $25 billion of savings over five years.  So, the right math is actually $25b/$600b.  Which gets to the old quote by Senator Dirksen about US military spending: "A billion here, a billion there, pretty soon, you're talking real money."  My point here is simply that the waste annual is not 1/5 of the defense budget, at least not how waste is defined by the reports here.
  • The entire tone is that "back office bureaucracy" is waste.  Maybe we don't need all of these people doing this work, but armies do run on logistics.  How do you get x number of marines, soldiers, sailors and air-people to a spot, sustain them, supply them with ammunition, care for them and all the rest?  This is tricky business that requires much tail for the tooth (teeth to tail ratio is a favorite military spending bit of jargon).  
  • Indeed, one procurement challenge Canada has is lacking enough staff to oversee multiple big projects.  Cutting the acquisition people in/near the Pentagon might actually make procurement more wasteful, not less.
  • So, comparisons to UPS piss me off: "That alone exceeded the size of United Parcel Service’s global workforce."  So what? The military has a much bigger, more complex job than UPS.  They are not doing the same thing.
  • Consultants saying that cuts can be made via attrition should always be distrusted.  Change is painful, cuts are painful.  Saying that they don't hurt is a lie.
  • So much for property management?  Yes, because the US military owns a heap of property, and it has to deal with the complexities of its activities on said properties.  Could/should the US military own less property? Sure, whose fault is it that it does not drop many bases?  Congress.
A million desk jobs? I have no idea of this is too much or just right.  Probably a bit too much, but let's not think that a million people are doing the jobs that 20,000 could do or 100,000.  The military is the biggest agency of the US government, which both reflects the priorities of the past dozen Presidents and dozens of Congresses AND is a basic reality these days.  Not all administration is wasteful (even as I blast universities for increasing admin spending more than spending on profs/students).

Could the Department of Defense spend US tax dollars better?  Absolutely.  Whose job is to make this happen?  Largely Congress's.  But the Congress and the folks in it have interests that are not always about efficiency.  The media's job is to report waste so that Congress pays attention, but buying the results of a consultant may not be the best way to shed light on this.  Which jobs are duplicates, which roles are actually cheaper when contracted out (I am suspicious of privatizing = savings), what bases of comparison make sense?

So, yeah, we could do better, but it is not very likely.  Good thing the next SecDef is a procurement expert.  Oh, he's not?  Never mind.

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