The Washington Post reported today that the Defense Department disregarded an internal study that found it had a bloated bureaucracy and could cut USD 125 billion in administrative costs over five years. But a Pentagon spokesman said the study had limited value because it didn't take into account existing cost-cutting programs and lacked "actionable recommendations."
The newspaper reported that the study recommended streamlining bureaucracy through personnel attrition, curtailing high-priced contractors and making better use of information technology.
The study was prepared by the Defense Business Board, a panel of corporate executives and consultants from McKinsey and Company. It found that the Pentagon was spending almost a quarter of its budget on overhead and business operations. The newspaper said Pentagon leaders suppressed the report fearing it could prompt Congress and the White House to cut the defense budget.
But Pentagon press secretary Peter Cook said senior managers at the Pentagon concluded that the study, "while well-intentioned, had limited value" because it didn't take into account existing programs to improve efficiency and because it lacked "specific, actionable recommendations appropriate to the department." Cook spoke to reporters in Tokyo, where he was traveling with Defense Secretary Ash Carter.
Cook said Carter "agrees that we must continue to aggressively pursue efficiency especially in the times of constrained budgets," and has pushed for reforms, some of which Congress has blocked. He said the department is pushing for a new round of base closures and adjustments to health care fees.
Disclaimer: No Business Standard Journalist was involved in creation of this content
