Spotlight: Pentagon buries report of wasting 125 bln dollars on bureaucratic system: study

An internal study found that the U.S. Department of Defense wasted as much as 125 billion U.S. dollars on bureaucracy, which is intentionally hidden away by top Pentagon officials, U.S. media reported Tuesday.

The Washington Post said in an exclusive report that the study found a way to cut back-office business operation cost by 125 billion dollars over five years.

The study, named Transforming DoD's Core Business Process for Revolutionary Change, was conducted by the Defense Business Board (DBB), a federal advisory panel, and consultants from McKinsey. It was released in early 2015.

Deputy Defense Secretary Robert Work, who initiated the project and initially was enthusiastic about a shake-up, said he was "scared" at the result and agreed to adopt only part of the study and save 30 billion dollars by 2020.

NO ONE REALLY KNOWS

It was no secret that the Pentagon has a bureaucracy issue, but the problem is that even department officials don't know exactly how much money was paid for those operations.

In 2014, Work commissioned the DBB and McKinsey with a 2.9 million dollar contract to gather information. The target was to find out how much money was spent on back-office bureaucracy and ways to cut the cost.

Initially speculation made by McKinsey was about 75 billion to 100 billion dollars, but it said in a memo that "no one really knows."

After three months' of analysis, the result came back and shocked everyone.

For its back-office operations, the Pentagon spends 134 billion dollars annually on more than 1 million personnel, compared to the 1.3 million troops it has on active duty.

The study found that 457,000 people were hired in position related to supply chain and logistics, constituting a larger employee count than international shipping company UPS.

For purchasing, 207,000 people were hired, which by itself would rank among the top 30 U.S. private employers.

In response to the overstaffing problem, the study proposed three ways to cut spending, with the most conservative saving 75 billion dollars over five years and the most ambitious saving twice as much.

In the end the middle way was chosen, recommending saving 125 billion dollars, which if spent on boosting combat power, can cover the operation cost of 50 army brigades, 3,000 F-35 fighter jets, or 10 aircraft-carrier strike groups.

INTENSE BACKLASH

In face of the unexpected result, even Work, who ordered the study, became uncomfortable.

"There is this meme that we're some bloated, giant organization, although there is some truth in that...I think it vastly overstates what's really going on," he said.

"We are the largest bureaucracy in the world. There's going to be some inherent inefficiencies in that," he said.

The incentive for hushing it up was that Congress may consider the study a reason to scrap 125 billion dollars from the defense budget.

Frank Kendall III, who oversaw weapon purchases at the Pentagon, too was worried that the study may damage the Pentagon reputation.

"If the impression that's created is that we've got a bunch of money lying around and we're being lazy and we're not doing anything to save money, then it's harder to justify getting budgets that we need," he said, adding that the finding could be "used as weapon against the Pentagon."

But the officials' concern may be for nothing, as Congress is no more eager to cut jobs than the Pentagon.

Arnold Punaro, a former staff director for the Senate Armed Services Committee, said lawmakers block even the modest attempts to downsize the Pentagon workforce because they do not want to lose jobs in their districts.

"You can't even get rid of the guy serving butter in the chow hall in a local district, much less tens of thousands of jobs," he said.

The coalition of opponents saw to it that the plan was killed shortly after its release, but Navy Secretary Ray Mabus still made a complaint in June 2015 about the waste during a speech.

For this, Mabus was told by Work to "please refrain from taking any more public pot shots." Endi