Defense Secretary Dr. Mark T. Esper's Defense Wide Review is paying off, with $5.7 billion freed up for more important priorities, senior defense officials said.
The officials — spoke with reporters yesterday — are looking to institutionalize the process to subject the defense agencies that make up "the Fourth Estate" — parts of the Defense Department that are not military services — to the same pressures the services face when crafting their budgets.
his is even more critical in fiscal year 2021, as the defense budget
will remain flat, which means that after accounting for inflation, the
DOD budget will buy less.
The money saved will flow to National Defense Strategy
priorities — including research into hypersonic weapons, artificial
intelligence and big data, fifth-generation communications technologies,
nuclear enterprise modernization, space, missile defense and response
force readiness.
The review began soon after Esper took office and built on a similar
process he put in place as Army secretary. The process involved
personnel from the Office of the Secretary of Defense and the services.
It was a line-by-line examination of the budgets of defense agencies and
activities.
"We ended up with 21 sessions over the course of about 16-ish
weeks," a senior defense official said. The directors of the defense
agencies and activities participated.
Esper looked at each organization and each budget item and asked basic questions: Why is DOD doing this? What is the requirement? Should this be done by this agency or one of the services?
The secretary has his own key phrases that boil down to freeing up
time, money and manpower for redirecting to NDS priorities, the official
said. "It's a long, tough process, but it realized $5.7 billion in 2021
savings that re-prioritize to NDS priorities, and another $2.1 billion
that will transfer from defense agencies and activities to the
services," the official said.
In some cases, the review called for increases in capabilities. In
other cases, it called for cuts. Some legacy systems and equipment that
were resident in the Fourth Estate are being cut. Some missions,
overcome by events, are being ended. All this money will flow to higher
priorities.
Officials said employees should not be affected by the changes. Any
changes in personnel can be handled under normal retirements and
attrition.
Officials said most of the money can just be transferred. Some will
require congressional action. Officials stressed these actions do not
involve the combatant commands.
The process is not over. Esper will institutionalize the process
under the auspices of the office of the DOD chief management officer.
Right now, officials explained, the services prepare their budgets in
accordance with the National Security Strategy. Before submitting them
to the Office of the Secretary of Defense for scrutiny, service leaders
make tough decisions about what programs or capabilities should have
priority. They have a topline number they cannot exceed and the budget
submission — usually in August — requires tough choices on the part of
service leaders.
But the agencies and activities in the Fourth Estate do not have the
same pressures. They submit their budgets at the same time as the
services, but miss the scrutiny that requires taking money from one
program to fund one with a higher priority. Esper signed a memo to place
all the Fourth Estate agencies into one pot, and the chief management
officer would examine the budgets as a whole, shifting funds where they
are needed and eliminating duplicative or overtaken capabilities.
Just as a service scrubs its budget before submitting it to the
secretary's office, the chief management team will be scrubbing all of
the Fourth Estate budget as an entity before it hits the big budget
review process in the fall.
Essentially, this means "creating that same management incentive on
the Fourth Estate side," an official said. "You got a bill? Find an
offset."
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