Panel pushes Pentagon privatization

The Defense Department can save up to $70 billion by revamping its acquisition programs and contracting out more of its support services, according to a report released Thursday by a commission of business leaders and former government officials. The panel, known as the Tail-to-Tooth Commission, is chaired by former New Hampshire Sen. Warren Rudman and Josh Weston, retired CEO of Automatic Data Processing Inc. The "tooth" refers to combat troops and weapons systems, while the "tail" refers to infrastructure and functions that support warfighters. According to the commission, which is sponsored by a group of business leaders with an interest in national security policy, the tooth is becoming lean and mean, but the tail remains big and bureaucratic. According to the report, 70 percent of the Pentagon's budget goes to support functions, with only 30 percent paying for combat forces. The commission wants to shift Defense's budgetary focus from "tail" to "tooth." "The national interest is to make the U.S. military as efficient as we can," said Rudman. "I believe that if we apply business practices... you could get one-third of [the money] the services really need to perform their primary functions." The report identified 11 initiatives that could save the Defense Department billions of dollars. The money saved could be used to build up the armed forces and update weapons and equipment, the report said. The initiatives included expanding acquisition reform pilot programs, improving contracting processes, revising public-private competitions, closing unnecessary military bases and modernizing the defense budget and accounting system. The report also recommended that the following military operations be turned over to the private sector:
  • Military family housing
  • Long-haul Defense communications
  • Utilities on military bases
  • Supply chain management
Commission members acknowledge that their recommendations are not novel. "All 11 Tail-to-Tooth reforms have been recommended by previous panels that have reviewed Pentagon practices over the past 15 years," the commission said. The report included step-by-step instructions on how to actually implement the reforms. "This is a blueprint for action, it's not a report about what other people should do," Weston said. "We're not talking about chicken feed here. We're talking about something that could be a monumental difference to the Defense Department." Bob Welch, vice president for government operations at Acquisition Solutions Inc., says the commission's recommendations are "right on the money." Welch was the top procurement official at the Commerce Department under the Clinton administration. "It will just take management and leadership over at the Pentagon to embrace it and say we're going to do this," Welch said. "It's really hard to change the way people have been taught to do business." Rudman and Weston said the group plans to lobby for Defense privatization and downsizing in Congress, in the Pentagon and at the White House. "We're not trying to lecture people and tell them 'Here's what we think you should do and here's when you should do it,' but we think this is a good kick-start," Rudman said.
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