US military could cut $125bn in waste – if it wanted to

The Washington Post uncovers a 2015 study buried by nervous Pentagon managers that shows vast potential for cutting red tape, including better use of information technology

Posted 7 December 2016 by Gary Flood

'Waste' by Angelina Obando, FlickrAmerica’s military bureaucracy has been accused of burying an internal study that detailed $125bn (£98bn) in administrative waste in its business operations.

The study revealed that the Pentagon spends almost a quarter of its $580bn budget on overhead and business operations such as accounting, human resources, logistics and property management.

It also found that Uncle Sam has a million people on payroll who don’t actually drive any tanks or pilot any drones – 1.01m contractors, civilians and uniformed personnel to fill back-office jobs far from the front lines, who almost outnumber the number of actual troops on active duty, 1.3m, the fewest since 1940.

The plan would not have required any loss of US Department of Defense mandarins or reductions in frontline warriors, but would have worked to claw back that 25% by what sounds like a very overdue spot of business process reengineering.

The aim was to improve the body’s workflows through attrition and early retirements, curtailed high-priced contractors and, crucially, better use of IT.

Pentagon management had commissioned the study to see what could be done to streamline its back-office bureaucracy, according to an exclusive in The Washington Post yesterday.

The idea: get more efficient and reinvest any savings in the business of actually defending the county.

But after the project documented far more wasteful spending than expected, senior civil servants officials moved swiftly to kill it by discrediting its findings and suppressing the results.

The newspaper says the blockage was down to fears that Congress would use the recommendations as an excuse to slash their budgets.

The study was produced by the Defense Business Board, a federal advisory panel of corporate executives, and consultants from management consultancy McKinsey.

A spokesperson for the Pentagon told the newspaper it’s adopting “some of the study’s recommendations” on a smaller scale, which will deliver $30bn by 2020.

The report – partly written by veteran investigative reporter and Watergate legend Bob Woodward – includes something of a classic quote by one defensive bureaucrat:

“There is this meme that we’re some bloated, giant organization.

“Although there is a little bit of truth in that, I think it vastly overstates what’s really going on.”