The Defense Department will likely find other ways to save more than $11 billion over the next six years besides putting 230,000 jobs up for sale to the lowest bidder.
The Pentagon's Defense Resources Board, as part of its fiscal 2001 budget preparations, is considering a change to its policy requiring the military services and Defense agencies to come up with $11.2 billion in savings by 2005 using the public-private competition process outlined in Office of Management and Budget Circular A-76. The board is made up of top-level DoD officials who decide on the Defense budget and is chaired by Deputy Defense Secretary John Hamre.
Instead, DoD units could use a variety of options to achieve the savings, including "consolidation of functions, reengineering and restructuring of organizations, adoption of streamlined business practices, termination of obsolete practices and privatization of functions," said Randall Yim, deputy undersecretary of Defense for installations, in a written response to questions posed by GovExec.com.
"The department's willingness to consider options to traditional A-76 processes is not and should not be interpreted as an 'abandonment' or 'avoidance' of A-76," Yim said. "A-76, and its focus upon fair competitions to achieve both cost efficiency and infusion of best business practices, is and will continue to be a dominant factor in the department's plan to do our business better, faster and cheaper."
The possible change in DoD policy is based on a Navy proposal. The Navy submitted a plan to the Pentagon showing how it could achieve its chunk of the $11.2 billion savings with a mix of A-76 competitions and other options. Rather than relying entirely on A-76, which looks only at activities that could be performed by contractors, the Navy is reviewing all its functions, including those considered inherently governmental, to determine whether operations can be improved, streamlined or eliminated.
Under revised savings requirements, other services and Defense agencies would have to make a strong case for using options other than A-76, Yim said. The Navy's plan includes an extensive action plan and established milestones for meeting its share of the downsizing and cost-savings load.
"Though the Navy's case is being considered, the Navy will be subjected to a rigorous audit during the execution of their plan to validate proper program execution," Yim said. "Any other Defense component that wishes to travel this path will be required to submit as detailed a plan as the Navy."
Members of Congress and the General Accounting Office have criticized the Pentagon's A-76 plans, saying the services shouldn't be forced to meet arbitrary staffing and budget reductions. Critics charge that the $11.2 billion figure, because it was set at headquarters, will not actually be achieved.