Department to Call on Services, Components to Identify Savings

By Donna Miles
American Forces Press Service

June 4, 2010 - The military services and defense components will receive official guidance in the coming days directing them to find ways to cut costs and improve efficiencies so the savings can be used to improve warfighting capabilities, Deputy Defense Secretary William J. Lynn III said here today.

Lynn is leading Defense Secretary Robert M. Gates' crackdown on overhead, bloat and unnecessary spending, announced during a major speech last month at the Eisenhower Library in Abilene, Kan.

The initiative is a three-part process, Lynn explained. It involves cutting non-essential programs, shifting the dollars saved to force structure and modernization accounts, and making those accounts more efficient.

But it also aims to make the department itself a flatter, more efficient organization, with fewer headquarters and smaller staffs.

Ultimately, the department aims to shave more than $100 billion from existing programs over the next five years and to redirect those funds to maintaining and building the force's warfighting capabilities, Lynn said.

The Army, Navy and Air Force will be asked to find $2 billion in cost savings in fiscal 2012. They'll all get to keep the savings they generate to improve their own capabilities – a carrot Lynn said he hopes will provide the incentive needed for them to take a long, hard look at their programs.

"This is not an effort to reduce the defense budget," or "top line," he emphasized. "This is about operating within a constrained top line and trying to get enough resources into that warfighting end, in addition to developing that operating capability." History shows that the Defense Department needs 2 to 3 percent in real growth each year to service the force structure – refreshing its technology, recapitalizing and modernizing it and giving troops "what they need to do their very best," Lynn said.

That's more than defense planners expect to receive for the foreseeable budget cycles. The Defense Department received a 1.8 percent increase from fiscal 2010 to 2011, but beginning in 2012, it expects just 1 percent growth for the next five years.

"What we are trying to do here is to get that 2 to 3 percent in the accounts where it is needed – force structure and modernization – without asking for an increase in the top line," Lynn said.

Calling the targeted reductions "ambitious," Lynn said the cost-cutting will begin at the Office of the Secretary of Defense level and continue throughout the department.

"We're going to the defense components looking for savings and initiatives," he said. "We're going to the combatant commands looking for efficiencies. And we have a cross-cutting set of groups that are looking at broad department-wide issues," including personnel policies, medical costs, Tricare, organizational restructuring, acquisition practices and logistical efficiencies.

Acknowledging that the Defense Department has a long track record of talking about cutting costs and increasing efficiency, Lynn said Gates' big focus and personal involvement in the effort is exactly what's needed to make it succeed.

He cited progress already made on the acquisition front, including decisions last year to halt F-22 Raptor fighter jet production and cancellation of the VH-71 presidential helicopter program. This year, Gates' focus is on keeping Congress from funding an alternate engine for the F-35 Joint Strike Fighter aircraft or asking for more C-17 Globemaster III aircraft, neither of which the department wants or needs.

"The secretary has shown the ability to make the tough choices," Lynn said. "What distinguishes this effort is leadership."