The Pentagon is notorious for promising to reform itself but never actually getting around to doing so. Secretaries of Defense and their leading assistants always promise to streamline the bureaucracy and render it more efficient, but the bureaucrats watch their political overlords come and go, and are most efficient and effective when it comes to maintaining the status quo. Those reforms that do come to fruition invariably involve changes of process and organization, equally invariably accompanied by the creation of new agencies or sub-agencies and the headquarters to lead them, which all require additional civilian personnel and resources—in other words, more bureaucrats. Thus, even positive changes come with a drag that reduces their net value.Given DoD’s inability to confront its inefficiencies, many reform efforts have originated on Capitol Hill, often drawing upon ideas hatched in the web of think tanks that dot the Washington landscape. Perhaps the most effective reform was the 1986 Goldwater-Nichols Act that empowered the Joint Staff at the expense of the military services; assigned control of military operations to field commanders who reported to the Secretary of Defense; and enhanced the authority of the Chairman of the Joint Chiefs. On the other hand, despite almost annual legislative attempts to tinker with the DoD’s acquisition process, the costs of major weapons systems continue to rise even as it takes increasingly longer to field them. Similarly, with the recent exception of reforming the military retirement system, neither Congress nor DoD have come fully to grips with rising military personnel costs, notably with regard to military health care, or with the incessant growth of the civilian personnel corps.Partly as a result of the cumulative, multi-year effects of sequestration, and partly because personnel and O&M (operations and maintenance) costs continue to outstrip annual overall defense budget growth, both military end strength and force posture have declined since the final year of the George W. Bush Administration. In particular, overhead and support now comprise over 40 percent of total Pentagon spending—some $240 billion out of a base budget of approximately $550 billion. As such, DoD’s overhead figure is more than twice the combined total defense budgets of France and the United Kingdom. The cost of DoD headquarters alone amounts to over $40 billion, more than the entire German defense budget.These developments, coupled with the growing recognition that cutting-edge technology increasingly resides in a private sector that is chary of doing business with the government, have led to a renewed effort, both on Capitol Hill and (not surprisingly) to a considerably lesser extent in the Pentagon, to modernize and render more efficient programs and procedures that in some cases hark back more than half a century.Not surprisingly, skeptics doubt that reform is possible. History certainly is on their side. All that can be done, they say, is to continue to reduce defense spending, which at some point might force the Pentagon to take reform seriously. Still, it does appear that this time may be different: Some major reforms that were unthinkable even a few years ago are now enshrined in legislation, and there is a strong bipartisan consensus in both the House and Senate Armed Services Committees that more legislation will be forthcoming over the next few budget cycles. That legislation is likely to address the updating of Goldwater-Nichols, personnel benefits (notably with respect to health care), the civilian personnel system, and DoD’s rickety acquisition system.Personnel BenefitsEspecially since the beginning of this decade, personnel benefits—which encompass everything from retirement benefits to health care, education, child care, and commissaries—have consumed an ever-larger portion of the defense budget, at the expense of modernization, operations, and research and development. The growth in the cost of these benefits, and the concomitant need for compensation reform, have been the subject of innumerable think tank studies—of both the private and federally funded non-profit varieties, as well studies by for-profit contractors, the Government Accountability Office, the Congressional Research Service, the Defense Business Board and DoD itself. Nevertheless, despite all the ink that has spilled into reports and memoranda over the better part of the past two decades, Congress, often with the encouragement of the Service Chiefs, has expanded rather than reduced the level of benefits made available to both active and reserve personnel.The advent of sequestration forced Congress to come to grips with the need to contain personnel costs; the result was the provision in the Fiscal Year 2013 National Defense Authorization Act for the creation of a bipartisan Military Compensation and Retirement Modernization Commission empowered to review the gamut of personnel benefits and recommend changes as appropriate. The Commission determined at the very outset of its labors that in light of the changing nature of the all-volunteer force (AVF) it would focus on modernizing compensation packages—which in some cases had been in force for seventy years—rather than on cost-cutting per se.For example, when the AVF came into being in 1973, the military consisted primarily of single males. Four decades later, women were serving in all branches of the armed forces and over half the enlisted force were married, as were some 70 percent of the officer corps. About three-fourths of the force had children. These developments led a premium to be placed on education benefits, the transferability of those benefits, and the availability of childcare, including care for special needs children.Similarly, the DoD retirement system had not kept pace with the evolution of retirement programs in the private sector. It had last been updated in 1986, but retained the defined-benefit system, in contrast to the private sector, which increasingly moved to defined-contribution retirement programs. Moreover, because service members were not eligible for retirement benefits unless they had served a minimum of twenty years, 83 percent of enlisted personnel never received any benefit at all. A defined-contribution plan enabled individuals to invest according to their personal needs; defined-benefit did not afford that flexibility, but it did offer a guaranteed income stream over the long term—though only if the service member qualified after the requisite twenty years.The Commission reported its findings and made a total of 15 recommendations in January 2015. The recommendations included a proposal for a retirement system that blended elements of both the defined-benefit and defined-contribution systems, enabling service members who served fewer than twenty years to collect retirement benefits. It called for a complete overhaul of the health care system that would replace the current TRICARE model with a menu of private health insurance plans available to active-duty family members as well as those serving in the reserves. Other recommendations included ensuring the highest-quality combat-casualty care for service members; a new four-star command that would place special focus on medical readiness; enhanced financial literacy training for service members; improved support for service members with special-needs dependents; cost-effective supplemental benefits for low-income service members to cover nutritional needs; reducing the back-office overlap between commissaries and exchanges; improved access to childcare on military installations; and rationalizing education benefits for service members. Although the Commission did not focus on budgetary savings as such, it estimated that if all its recommendations were adopted, they would result in a reduction of nearly $32 billion in DoD budget costs over the fiscal years 2016–20, with steady-state savings of over $8 billion each year by 2046.1Not surprisingly, many observers expressed doubts that the Commission’s report would have any impact on Congress or DoD. They reasoned that it would meet the same fate as those produced by previous commissions and simply collect dust on some forgotten bookshelf. Instead, the Fiscal Year 2016 National Defense Authorization Act adopted, with few changes, the Commission’s recommendation on retirement, thereby overhauling that system for the first time in decades. In particular, it provided for the implementation of the defined-contribution concept, to be managed within the framework of the government’s Thrift Savings Plan, currently available only to civil servants. Congress also adopted the Commission’s recommendation that, once vested, service member contributions be portable upon separation from the military, and legislated new mid-career retention incentives that the Commission had recommended in conjunction with its retirement proposal. Congress also approved most of the specific elements of the Commission’s recommendation regarding financial literacy and assistance to service members to cover nutritional needs.Congress did not take up the issue of overhauling the TRICARE system; DoD has offered some changes in its FY 2017 proposal, but these do not fundamentally alter the decades-old military health system. Congress also adopted the Commission’s recommendation regarding commissaries, a highly charged issue, especially for veterans. While DoD did recommend some changes to the commissary system, these were more in the nature of adjustments geared to short-term budgetary savings rather than fundamental change to the commissary system.In addition to its proposals that modify the TRICARE program, DoD has outlined several other changes to military personnel compensation and benefits within the rubric of its “Force for the Future” proposal. A sampling of these proposals includes: developing new personnel management systems to better match troops with desired job assignments; improving and enhancing college internship programs; designating a Chief Recruiting Office; expanding the Secretary of Defense Corporate Fellows Program; expanding and making permanent the Career Intermission Program that allows service members to leave and later return to active duty; establishing a DoD-wide standard of 12 weeks of paid maternity leave (up from six weeks) and seeking legislation to expand paternity leave from 10 to 14 days. The “Force for the Future” proposals have encountered considerable resistance on Capitol Hill, however, on the grounds that they add unnecessary costs to the military personnel accounts while failing to address the need for fundamental reforms.2Despite congressional antipathy to DoD’s proposals, the fact that the Department recognizes the urgent need for reform of military compensation and benefits, coupled with the virtually immediate adoption by Congress of the Commission’s recommendations on retirement, has created a momentum for additional changes to personnel compensation programs, whether in the current fiscal year budget process or in those of fiscal years 2018 and 2019. Indeed, leading members of the Armed Services Committees of both houses of Congress have indicated that they would consider the Commission’s recommendations on reforming TRICARE and on providing improved support for Service members’ dependents with special needs during the consideration of the fiscal year 2017 defense budget.The Unwieldy Civilian Personnel SystemSince 2001, the ranks of DoD civilian personnel have increased by over 15 percent, or some 100,000 individuals, while military personnel has declined by about 5 percent. Yet the Department of Defense has little direct control over the nature and tenure of the civilians who work for it. The Office of Personnel Management, arguably one of the least-effective government agencies (and not merely because so much of its data was hacked), sets policy guidelines for all civilian personnel, including those working in DoD. OPM maintains pay tables for General Schedule employees, manages the Federal Wage System, and develops and provides government-wide regulations and policies on other pay and leave authoritiesFiring incompetent employees is a burdensome process. The process of hiring new employees must first allow for veterans’ preference—and as a result of 15 years of war, there are far more veterans applying for government jobs today than there were during the previous two decades. Finally, any attempt to adjust the current civilian personnel system must contend with powerful and politically active civil service unions. The unions are determined to preserve a system that has remained essentially unaltered since the 1883 Civil Service Act, which primarily rewards personnel on the basis of tenure and seniority rather than merit.Secretary of Defense Donald Rumsfeld, acting on a series of recommendations by the Defense Business Board, actually did try to impose some merit-based considerations upon the hidebound GS system. He was met with a torrent of criticism and lawsuits by the civil service unions. His initiative was given a quiet burial.The difficulties involved in any attempt to rationalize the civilian workforce have led some members of Congress—most notably Representative Ken Calvert (R-CA), a senior member of the House Appropriations Committee majority—to introduce legislation, termed the REDUCE act, that draws upon a Defense Business Board proposal that calls for a 15 percent reduction in the civilian workforce by fiscal year 2022, and for maintaining the resulting cap until fiscal year 2026. During the same time frame, the Senior Executive Service, the uppermost echelon of the civil service, would be capped at 1,000 personnel. Calvert has not succeeded in winning House-wide support for his legislation, much less Senate-wide. Nevertheless, there is a growing consensus, which includes Secretary of Defense Ash Carter, that some legislation is needed to rein in the growth in civilian levels, the savings from which could be applied to other elements of the DoD budget.Reforming the civilian personnel system is a vexing endeavor not only due to the intransigence of the bureaucracy and the unions, but also because the Armed Services Committees do not have jurisdiction over OPM. Instead, the Government Affairs committees provide oversight for that agency. As a result, there is not much that can be done by the defense authorizing committees to set government policy; rather, it must fall to the appropriations committees, which encompass all government agencies through their subcommittee structure, to address DoD civilian personnel matters, as they do those of other agencies. Needless to say, with turf at issue, as well as the difficulties of dealing with unions powerful within the Democratic Party, the prospects for reform of the civilian personnel system are not bright.Headquarters ReductionsThe ballooning growth in DoD headquarters staffs overlaps with civilian workforce growth but includes military personnel as well. Since 2009, the size of the civilian workforce in the Office of the Secretary of Defense has grown to more than 2,000 people, or by nearly 18 percent. The Joint Staff grew from 1,286 people in 2010 to 4,244 people in 2012, a 230 percent increase. Reductions mandated by successive Secretaries of Defense, beginning with Robert Gates, have merely resulted in bureaucratic shell games: as one headquarters is reduced, another is increased. Gates actually closed down an entire command—the Joint Forces Command—yet almost all the headquarters staff, and its supporting contractors, moved on to other jobs elsewhere in the Department’s vast bureaucracy. There is nothing new about this type of behavior: decades ago, when David O. (Doc) Cooke, the long-serving “Mayor of the Pentagon,” was ordered to reduce the staff of the Office of the Secretary of Defense, he simply created a new agency called Washington Headquarters Services (WHS). That agency is still in existence, even as the Secretary’s office has continued to grow.As with civilian personnel, there is a growing consensus that the many layers of headquarters staff have undermined the Department’s agility and responsiveness to the crises that constantly unfold worldwide. There does appear to be less disagreement about headquarters staff reductions than about cutting civilian personnel more generally. The Department continues to commit itself to significant reductions: Secretary Carter, when he was Deputy Secretary, ordered a 20 percent reduction of headquarters staffs,3 while his current deputy, Robert Work, has ordered a 25 percent funding cut for all headquarters activities for fiscal years 2017–20.4 Work has also frozen civilian hiring for the Office of the Secretary, the defense agencies, and field activities, while the Deputy Chief Management Officer conducts a “delayering study.” (However, apart from the fact that hiring freezes invariably result in the retention of dead wood, a study undertaken in the Administration’s final months is unlikely to result in any substantive changes to the Pentagon bureaucracy.)In addition to the consensus regarding the need for civilian personnel reform, there is a growing sense that the Unified Command Plan, which establishes the missions, force structure, and geographic areas of responsibility of the combatant commanders, also needs to be altered to allow for a reordering and consolidation of the command structure. Coupled with congressional discontent with both headquarters growth and the bureaucratic shell games to avoid real cuts, and following legislative support for the Secretary’s position in the fiscal year 2016 authorization, there is an excellent prospect that additional action will be taken in the current or next fiscal year to ensure that mandated reductions prove to be both real and permanent.Goldwater-Nichols Until the Goldwater-Nichols legislation was enacted, the Chairman of the Joint Chiefs was at best primus inter pares with the Service Chiefs; all were military advisers to the President. Indeed, real power resided in the Services, whose Deputy Chiefs of Staff for Operations (the “Ops-Deps” as they were called), actually controlled the planning for, and even more importantly the execution of, operations in the field. Not surprisingly, the best and the brightest military officers were to be found on the service staffs. In contrast, the Joint Staff was the graveyard of military careers; most officers on the Joint Staff never reached flag or general officer rank.The diffusion of power in the Department led to a degree of operational independence that resulted in lack of coordination in the field—whether in Vietnam, the failed attempt to rescue the Iranian hostages in 1980, or the 1983 attack on Grenada—and the continual production of operational plans by individual services that failed to account for the capabilities of their counterparts. Goldwater-Nichols resolved many of these concerns by, among other things, designating the Chairman of the Joint Chiefs as the President’s sole military adviser and requiring joint service as a prerequisite for promotion to general or admiral. The Act also created a Vice Chairman who effectively has become the military counterpart to the Deputy Secretary of Defense.Finally, and critically, the Act transferred operational control from the services to the combatant commanders in the field (the “COCOMs.”) who reported directly to the Secretary of Defense. On the other hand, the Act removed the Chairman of the Joint Chiefs from the military chain of command. In other words, the Chairman was truly a staff official, with no real line authority.There is a widespread consensus that the Act succeeded in empowering the Joint Staff and the commanders in the field. The Joint Staff now consists of the best and the brightest military officers, while the Combatant Commanders have become increasingly powerful not only in managing operations, but in exerting influence over programmatic and budgetary decisions. Indeed, it has become increasingly clear that the Act has been too successful. The power balance in the Pentagon has shifted too far in favor of the Joint Staff and the Combatant Commanders, at the expense of both the Office of the Secretary of Defense (OSD) and, even more so, of the military services, who are responsible for manning, training, and equipping the forces that will at some point come under the command of the COCOMs. At the same time, the Chairman, lacking operational control and relegated to an advisory role, has increasingly been seen as no stronger than his predecessors were prior to the enactment of Goldwater-Nichols. There is a growing consensus that the Chairman requires more than a forceful personality, as exemplified by Colin Powell, to have a major influence over national security decision-making.It should come as no surprise that calls for an updated version of Goldwater-Nichols come from outside the Pentagon—that is, from the close-knit circle of think tankers and congressional members and staff. The Department did not initiate Goldwater-Nichols in the 1980s and resisted many of its provisions at that time. Its attitude toward military organizational reform is hardly different today. The proposals for change in the Pentagon power structure range from the more radical, such as replacing the Joint Staff with a more German-like General Staff; to inserting the Chairman of the Joint Chiefs into the chain of command and extending the terms of the Chairman and Vice Chairman from two years to four; to reducing the size of COCOM staffs; to granting the services more authority in the realm of defense acquisition (more about which below).Secretary Carter has proposed several changes to Goldwater-Nichols, which he argues will better align the role of the Chairman, Combatant Commanders, the Chiefs, and the Joint Staff with the current security environment. Such changes include codifying the Chairman’s role as adviser to the Secretary of Defense; downgrading some four-star billets to three stars; and integrating functions like logistics, intelligence, and planning across the Joint Staff, the combatant and subordinate commands.5 On the other hand, Carter has explicitly rejected any of the more sweeping changes noted above.Since there is no consensus on what reforms actually should be implemented, there is also no consensus regarding the speed with which reforms of any kind should be implemented. In general, the Senate appears to be pushing for more rapid change, while the House is taking a more deliberate view. Nevertheless, just as all agree that civilian control of the military must be preserved regardless of what changes are ultimately implemented, there does appear to be a strong and growing consensus in favor of a reordering of DoD’s centers of power. It is likely to be the subject of legislation within the next two to three years.The Broken Acquisition SystemThe need to reform the DoD acquisition system has probably generated more studies, reports, and task forces than any other area for defense reform. Their areas of focus have included: the determination of requirements for new weapons and weapons systems; the nature of contracting and competition; the need to control costs and both development and procurement schedules; the need to reach out to the non-defense industrial base; the quality and size of the acquisition work force; and the urgent need to improve the agility and responsiveness of the current system. The situation has deteriorated to the point that when Secretary Gates determined that the ground forces operating in Iraq needed more protection for their vehicles, he elected to sidestep the acquisition process. Instead, he personally oversaw the development, production, and rapid deployment of mine-resistant, ambush-protected (MRAP) vehicles, which resulted in a huge reduction in U.S. casualties. In the same vein, the Army program to increase the firepower of its Stryker vehicles; the Navy program to convert the SM-6 anti-aircraft/anti-missile system to an anti-ship system; and, more generally, the rapid acquisition system, all have circumvented the Department’s own stodgy acquisition process.Successive Secretaries of Defense, generally with congressional support, have pressed for acquisition reform even longer than they have for headquarters reductions. Efforts to contain costs, such as the Nunn-McCurdy provision of the FY 1983 defense authorization bill, which has required DoD to report to Congress whenever a Major Defense Acquisition Program (MDAP) experiences cost overruns that exceed a series of specified thresholds, have not succeeded in controlling costs and preventing overruns.6 Nor has a series of legislative efforts successfully reformed the acquisition corps. And neither DoD leadership nor Congress has made any headway at all in reducing schedule overruns.The prospects for real reform are nevertheless better now than in the past. To begin with, both Carter when he was Under Secretary of Defense for Acquisition, Technology, and Logistics, and his successor, Frank Kendall, have issued a series of memoranda termed “Better Buying Power,” which, at a minimum, demonstrate that there is an ongoing OSD effort to reform the acquisition system. In addition, and crucially, there is a bipartisan consensus on Capitol Hill, led by Senate Armed Services Committee Chairman John McCain and Ranking Member Jack Reed, and their counterparts on the House Armed Services Committee, Chairman Mac Thornberry and Ranking Member Adam Smith, that the Department is not moving fast enough or going far enough to reform itself.7In particular, there is considerable support for giving the Services a much stronger say in the acquisition system, at the expense of a bloated OSD acquisition bureaucracy. Indeed, the FY 2016 authorization act gave greater authority to the military services to manage their own programs and enhanced the role of the Service Chiefs in the acquisition process. At the same time, the Services were instructed to commit to management, requirement, and resource goals that, if not realized for a given program, would result in their loss of authority and control over that program and the assessment of an annual cost penalty on their cost overruns.Building upon, and in response to a directive in, the FY 2016 authorization, the Services have openly pushed for even more say in a system that directly affects their ability to organize, train, and equip their personnel. For example, responding to direction in the FY 2016 authorization act, Army Chief of Staff Mark Milley submitted a report to Congress that calls for de-layering OSD oversight by allowing the Army, rather than OSD, to create independent cost estimates; maintain complete control over analyses of alternatives to any given program; certify technology-readiness levels; and have full responsibility for testing.8 Milley’s recommendations are finding favor on Capitol Hill, and both the Senate and the House Armed Services Committee leaderships are promising more reform in this regard.Secretary Carter has also indicated that he supports greater participation by the Joint Chiefs in the acquisition process, though he does not go as far as General Milley’s proposals. Carter has given the Chiefs a seat on the Defense Acquisition Board—even as he is reducing the overall size of the Board, which, at 35 members, he considers far too unwieldy. He also is granting the Chiefs greater authority with respect to the initiation of engineering and manufacturing development, termed “Milestone B” in the jargon of the defense acquisition process. Finally, he intends to cut back on the documentation that drowns the process in paper, though every reform itself generates a new deluge.9Both Congress and Secretary Carter are also committed to enabling the non-defense industrial base to support DoD requirements. With much fanfare, Carter opened a new Defense Innovation Unit Experimental (DIUx) in Silicon Valley to enlist its support in finding creative technology solutions for future threats, a critical element of what Carter has termed his “Third Offset Strategy.” At the same time the FY 2016 authorization act sought to improve access to non-traditional and commercial innovation by removing barriers to new entrants into the defense market, adopting commercial buying practices for the Defense Department, and ensuring that these firms are not forced to cede intellectual property developed at their own expense. The NDAA also expanded flexible acquisition authorities and the development of alternative acquisition pathways for amassing critical national security capabilities.The attempt to enlist technology firms with no previous connection to DoD still has some way to go before it succeeds. Many non-defense firms are chary of dealing with a hidebound and virtually hostile DoD bureaucracy. For its part, the DoD bureaucracy, while paying lip service to both Carter’s priorities and congressional mandates, is reluctant to change its old habits and move out of its comfortable relationships with the far more familiar defense-industrial base. And, as has always been the case, it awaits a new Secretary who may have different priorities and interests, so that Carter’s initiatives will fade away. As result, there is considerable determination on Capitol Hill to press forward with more legislation that force the bureaucracy to come to terms with the reality that it must work in partnership with the commercial high technology sector.A 21st Century Budget and Financial SystemApart from acquiring an “E” for execution, the Planning, Programming, and Budgeting process remains much as it was when first initiated over half a century ago.10 Moreover, nothing much has changed with respect to execution, either. There is still only one mid-year review, which examines programmatic rates of expenditure and attempts to adjust the budget accordingly. Invariably, however, such reprogramming, or adjustments within and transfers between appropriations accounts, requires prior congressional approval if it involves an amount above the threshold of a few tens of millions of dollars—the total amount that may be transferred is less than 1 percent of the budget. Finally, the Department has had great difficulty accounting for money actually spent. It has yet to receive an unqualified, or “clean,” audit opinion, and none of the Service Departments has ever received one. DoD has failed time and again to meet timetables for reconciling its financial statements; the latest target is fiscal year 2017, which DoD once again will fail to meet.There have been far fewer calls for budgetary reforms than for improvements in DoD’s financial management processes. On occasion, DoD has called for lifting the thresholds for prior approval reprogrammings. If coupled with a greater emphasis on execution, for example requiring quarterly budget reviews, not semi-annual reviews as is the case today, the Department would be in a better position to move monies around in response to emerging needs. The congressional appropriations committees have lifted thresholds only with the utmost reluctance, however, while the DoD bureaucracy resists undertaking more budget reviews.Congress has expressed far greater concern over DoD’s ability to account for its financial transactions. The entire process toward achieving a “clean” audit was set back when the DoD Office of the Inspector General (OIG) had to withdraw its support for an unqualified opinion on a Marine Corps financial statement; it had become clear that there was insufficient evidence to sustain that opinion. The Government Accountability Office has recommended that the Inspector General’s office develop a quality assurance program to ensure that audits are based on accurate, supportable information. Congress might require the OIG to implement the GAO proposal.More Reforms Are on the WayThe foregoing discussion does not address the entire gamut of potential reforms. The Pentagon has continued to push for a new round of base realignment and closure (BRAC), though the combination of constituency politics and the poor results of the 2005 BRAC round render it unlikely that there will be much progress in this area. There have been numerous attempts, most of which have failed, to rationalize the Pentagon’s information technology systems, its financial systems, and its audit agency. Of special concern is how DoD has organized itself to deal with threats in the cyber domain. There are also suggestions about easing the “revolving door” restrictions currently in place, since they discourage top industry executives from seeking senior government positions for which they would be the best qualified. In other words, the scope of potential reform is very broad indeed.There is little doubt that the current Secretary of Defense, his deputy, and the Hill leadership are determined to succeed where others have failed in the past. The record of the past fiscal year in particular indicates that there is a new momentum building for defense reform that differs in both kind and degree from other such attempts in the past three decades. There was never as great a degree of consensus between Democrats, Republicans, the Pentagon leadership, and Capitol Hill regarding the urgent need for reform, not even when Goldwater-Nichols became law.No one is under any illusion that the culture of that mastodon known as the Defense Department bureaucracy can easily or quickly be changed. Still, the prospects for change are better than ever. If a new Administration’s defense leadership sustains Dr. Carter’s initiatives, and bipartisan congressional efforts continue, reforms could go well beyond those that even sympathetic Pentagon officials are prepared to contemplate. There is reason to hope that defense reform in the 21st century will no longer be merely a gleam in some think tanker’s eye.
1These figures are in constant fiscal year 2016 dollars; the savings in then-year dollars would be higher, with the magnitude of those savings depending on future yearly rates of inflation.2Senate Armed Services Committee chairman John McCain said, ““This initiative has been an outrageous waste of official time and resources during a period of severe fiscal constraints. It illustrates the worst aspects of a bloated and inefficient defense organization.” Leo Shane III, “The Pentagon’s ‘Force of the Future’ plan just got trashed in Congress,” Military Times, February 25, 2016.3The Deputy Secretary of Defense, “Memorandum to the Secretaries of the Military Departments et al.,” July 3, 2013.4“Memorandum to the Secretaries of the Military Departments.”5Ash Carter, “Remarks on ‘Goldwater-Nichols at 30: An Agenda for Updating,’” Center for Strategic and International Studies, April 5, 2016.6There are two types of breaches: significant breaches and critical breaches. A “significant” breach is when the Program Acquisition Unit Cost (the total cost of development, procurement, and construction divided by the number of units procured) or the Procurement Unit Cost (the total procurement cost divided by the number of units to be procured) increases 15 percent or more over the current baseline estimate or 30 percent or more over the original baseline estimate. A “critical” breach occurs when the program acquisition or the procurement unit cost increases 25 percent. See Moshe Schwarz, The Nunn-McCurdy Act: Background, Analysis, and Issues for Congress, Congressional Research Service, March 3, 2015.7Of course, there is less agreement regarding the details of further improvement to the acquisition system. Chairman Thornberry has unveiled a proposal for an “Acquisition Agility Act” that would have DoD field platforms first and then allow components to be upgraded sometime thereafter. Thornberry’s proposal would also foster experimentation and prototyping by the Services. Whether his proposal will be implemented in whole or in part remains to be seen. Kristina Wong, “GOP Chairman Unveils Pentagon Buying Reforms,” The Hill, March 15, 2016.8Department of the Army, Report to Congress on Chief of Staff Acquisition Authorities (March 2016).9Carter, “Remarks on ‘Goldwater-Nichols at 30.”10Shortly after I was nominated as Under Secretary of Defense (Comptroller) in 2001, Robert McNamara asked me if the Planning, Programming, and Budgeting process that he had instituted forty years earlier was still in place. He was incredulous when I told him that it was. The system has not changed in the 15 years since that conversation, other than my having added the “E” to the process.