Rumsfeld names Defense operations that could be outsourced

Secretary of Defense Donald Rumsfeld announced Monday that the Defense Department's Senior Executive Council will begin a review of the Defense Finance and Accounting Service, the Defense Logistics Agency and the Defense Information Services Agency, with an eye toward eliminating non-essential Defense operations and redundant job positions. Rumsfeld, Deputy Secretary Paul Wolfowitz and the service secretaries comprise the council membership. "Why is Defense one of the last organizations around that still cuts its own checks?," Rumsfeld asked. "When an entire industry exists just to run warehouses efficiently, why do we still own and operate so many of our own?" Rumsfeld, speaking at the kick-off ceremony for the Acquisition and Logistics Excellence Week, said focusing on the core missions of Defense and contracting out the rest makes sense. For example, Defense has three exchange systems and a separate commissary system that all provide similar goods and services. "The Congressional Budget Office estimates that consolidating them could save $300 million," Rumsfeld said. "At bases around the world, why do we pick up our own garbage and mop our own floors rather than contracting those services out, as many businesses do? And surely we can outsource more computer systems support," he said. Streamlining headquarters staff is also on Rumsfeld's agenda. Congress has mandated, and Rumsfeld has ordered, a 15 percent reduction from fiscal 1999 levels of headquarters staffs worldwide. The departments will also look for reductions in the separate staffs of the services. Currently, the Army, Air Force and Navy operate separate but parallel staffs for their civilian and uniformed chiefs. "These staffs largely work the same issues and perform the same functions," Rumsfeld said. Rumsfeld said Army Secretary Thomas White and Air Force Secretary James Roche will soon announce plans for realigning their departments to support information-sharing, speed decision-making and to integrate reserve component headquarters into service headquarters. Navy Secretary Gordon England "is engaging a broad agenda of change in the Department of the Navy as well," he said. Rumsfeld seemed particularly disturbed by redundancy. "It's time to start asking tough questions about redundant staffs," he said. "Let me give you an example. There are dozens of offices of general counsel scattered throughout the department. Each service has one. Every agency does, too. So do the Joint Chiefs. We have so many general counsel offices that we actually have another general counsel's office whose only job is to coordinate all those general counsels." He said there are other examples from public affairs to legislative affairs. "Now, maybe we need many of them, but I have a strong suspicion we need fewer than we have," he said. "We're going to take a good hard look and find out." Rumsfeld said there is redundancy in supervising military medicine as well. He said he has asked the military departments and the undersecretary for personnel and readiness to complete the revamping of the military health system by the end of fiscal 2003. Other changes in store at Defense include:
  • Eliminating 31 of the 72 acquisition-related advisory boards.
  • Investing $400 million in public-private partnerships for military housing. Many utility services to military installations would also be privatized.
  • Tightening the requirements for other government agencies to reimburse the department for Defense detailees. The department is reviewing whether to suspend assignments where detailees are not fully reimbursed.
  • Committing $100 million for financial modernization.
  • Establishing a Defense Business Board to tap outside expertise to improve the department's business practices.
Rumsfeld said changing the bureaucracy to squeeze every cent out of new ideas and processes is a matter of national security. Defense needs the funds to modernize and transform the military, he said. "We must change for a simple reason: The world has, and we have not yet changed sufficiently," he said. "The clearest and most important transformation is from a bipolar Cold War world where threats were visible and predictable to one in which they arise from multiple sources -- most of which are difficult to anticipate and many of which are impossible even to know today."
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