Just in time for the release of a draft Continuing Resolution to keep the federal government working past Friday, the Washington Post published a piece, “Pentagon buries evidence of $125 billion in bureaucratic waste.”

The Post story reads like a murder mystery lacking only a dead body. “The Body in the Library” meets “The National Military Strategy of the United States.” Sort of. It starts with a fairly dry study about Pentagon business practices done by an outside group working with the Defense Business Board.

But it has plenty of colorful characters like Bob Work, the Deputy Secretary of Defense, and Ray Mabus, the Secretary of the Navy. And, this being the 21^st century, there is email evidence of tension between the players in this mystery. According to press reports, a dust up between Mabus and Under Secretary of Defense Frank Kendall over some recommendations had to be quelled by Work. “Ray, please refrain from taking any more public pot shots. I do not want this spilling over into further public discourse.”

The Pentagon public affairs organization will try to brush this off as a typical, inside-the-beltway process story, of limited interest to anyone outside Washington. That is flat wrong. This is a story that should resonate with anyone who is concerned about how their tax dollars are spent.

Wherever they fall on the political spectrum, people agree that some military spending is necessary. The rub lies in how much spending is necessary. How much is too much? What constitutes wasteful spending at the Pentagon? Should the Pentagon budget be used as a jobs program?

The first substantive page of the study is labeled “The Bottom Line” and says, in part, “We are spending a lot more than we thought. We can see a clear path to saving over $125 billion in the next five years. The greatest contributors to the savings are early retirements and reducing services from contractors.” Time, the Defense Business Board argued, was of the essence. “Early mobilization is the single biggest lever…Every billion saved in 2016 is worth 5 billion FY16-FY20 due to the compounding effect.”

The study focused on six “Core Business Processes”: Human Resources Management, Health Care Management, Financial Flow Management, Supply Chain and Logistics, Acquisition and Procurement, and Real Property Management. The authors calculated that more than one million people work on those six functions with an administrative cost of approximately $670 billion in fiscal years 2016-2020. One slide shows the Pentagon “equivalent” of this many people – roughly 40 times the number of people who work in the Pentagon work on these six management areas across the Department of Defense. Acquisition and Procurement, for instance, employs 8.5 times the number of people (23,000) who show up to work at the Pentagon on an average day.

The Washington Post story first appeared in their paper on Tuesday, Dec.6th, 2016.

Three options were fully fleshed out in the study. The most modest would save $75 billion over five years and the most ambitious would save $150 billion. The middle approach, finally settled upon, would save $125 billion over five years using these goals, “10% Year 1 savings in contracted spend. Modest early retirement adoption. Limited backfill of retirements and attrition.”

Chart #12 of the study may be the ultimate reason civilian leadership wanted to suppress the findings. It shows what that $125 billion might fund for the next five years: 50 Army Brigades, or 10 Navy Carrier Strike Group Deployments, or 83 Air Force F-35 Fighter Wings. According to news reporting, Deputy Secretary Work said of the chart, “This is what scares me.” Presumably, he feared what Congress would make of that chart and, possibly, legislative mandates to reduce Pentagon back office functions in favor of more military capability – the so-called “tooth to tail” ratio.

At Taxpayers for Common Sense we would add a fourth possibility for that $125 billion: deficit reduction. No mention of that in this study, however.

One of the last slides in the study notes, “Best Practices in Change Management Starts with Strong Leadership & Clear Governance”. Sadly, that leadership and commitment to governance was lacking in the Pentagon when they tried to keep this study under wraps.

The three military departments rely more and more on full time contractors to fill these functions: more than 519,000 people are paid for under service contracts according to this study. The departments all pay slightly different rates per worker with the Army paying the most at just over $189,000 per year and the Navy getting a “bargain” at a little less than $171,000 per contractor per year. As the study points out, just the Army’s 199, 661 contracted workers is more than the workforce of the Departments of State, Agriculture, Commerce, Education, Energy and HUD combined.

We hope this work may be used as a future roadmap to reducing the reliance on service contracts to perform back office functions. And we hope the incoming Administration will dust off this study and consider its findings as the Pentagon moves forward.