Mackenzie Eaglen
Another round of pink slips for U.S. troops: On July 9 the Army announced that 40,000 soldiers will be cut from active duty—some involuntarily. This comes on top of the 80,000 soldiers already let go since the Iraq and Afghanistan buildup. At a time of increasing global tension, the American military is smaller than it was before 9/11 at the nadir of the Clinton “peace dividend” drawdown.
Yet even as the military shrinks and readiness wanes, the Pentagon’s two civilian workforces—government employees and federal contractors—remain disproportionately large. Since defense budgets peaked in 2010, the number of civilian employees at the Pentagon has grown nearly 6% to 744,000. Similarly, the figure for civilian contractors has ballooned 20% to an estimated 730,000. Active duty military personnel, who number 1.36 million, are now outnumbered by the civilians supporting them—a historic shift.
The primary culprit for this imbalance is uncontrolled spending on defense services with little accountability. The Pentagon’s purchasing power is staggering, and it now buys more services than hardware. Many tasks are contracted out, from basic IT and food service to bomber maintenance and logistics support.
Spending on services grew to 53% of all purchases in 2014 from 40% in 2010—even as the total defense budget dropped more than 20% over the same period. In 2010 the Pentagon spent $205 billion on equipment and $134 billion on services. By 2014 that relationship flipped, with $161 billion to services and $143 billion to weapons systems. This doesn’t include spending on services that are classified.
Further, because the category of services is so broad, Pentagon leaders seem to have trouble tracking spending. Air Force acquisition chief William LaPlante told Federal News Radio last year: “I jokingly say knowledge-based services should just be called ‘stuff.’ Because the way we categorize it, it can contain everything from a plasma physicist helping on the re-entry of a Minuteman missile, to designing a building, to helping with a view graph presentation.”
Everyone knows about cost overruns and schedule slips with the military’s flagship weapons programs, from the F-35 Joint Strike Fighter to the Navy’s newest all-electric aircraft carrier. But other bureaucratic missteps fly under the radar. Failures in IT acquisition akin to Healthcare.gov occur regularly in Pentagon service programs. At the moment, the Navy is embroiled in scandal over a services-acquisition nightmare in which contracting officials were bribed to steer overpriced contracts to a con man. That con man, nicknamed “Fat Leonard,” exploited confidential pricing information about competitors’ bids—along with secret Navy ship schedules—to overcharge the government by $20 million.
Because the Pentagon cannot adequately manage this unaccountable army of contractors, it ends up shortchanging the military, which is starting to lose critical staff, notably mid-grade field officers and senior noncommissioned officers.
Congressional and Pentagon leaders must impose oversight on the Pentagon’s shadow workforce. A start would be to get a handle on what contracts are in effect now. The Pentagon’s inventory of contracted services lacks a standardized classification, so it’s difficult to compare by type of service, price paid and contractor employed. With an adequate data set and support from top leaders, procurement professionals could analyze services spending, recommend better choices and avoid wasting precious defense dollars on excess or redundant services.
Progress is being made: The arcane purchasing process is a high-profile issue inside the Beltway at the moment. This year’s National Defense Authorization Act contains more than 150 legislative provisions on acquisition reform alone—but only for weapons systems, not Pentagon services.
Similarly, the Pentagon has begun to recognize that it employs too many civilians and has taken small steps to right-size that workforce, such as reducing staff at headquarters, albeit too slowly. Still, defense officials remain unable to provide even basic facts about the size, price, or composition of their shadow workforce of contractors.
The growth in spending on services and support can no longer continue at the expense of America’s active-duty military and combat power. By reining in defense services, we can ensure that the next set of pink slips don’t go to those in uniform.
Ms. Eaglen is a resident fellow in the Marilyn Ware Center for Security Studies at the American Enterprise Institute.