Deputy defense secretary wary of fixes to Pentagon management

Deputy Secretary of Defense Gordon England is rejecting congressional directives to alter Pentagon management, arguing that legislative fixes in the 2008 House and Senate defense authorization bills could be an additional bureaucratic burden on the Department of Defense (DoD).

Both House and Senate defense authorizers took steps to spur change in the Pentagon’s business processes, but the two chambers will have to iron out some differences when the two defense authorization bills get to conference.

{mosads}Currently, the House bill gives the secretary of defense more flexibility in structuring the management team than the Senate legislation does.

The House and  Senate bills call for the creation of a Pentagon chief management officer. The Senate version also calls for the establishment of a full-time undersecretary of defense to ensure management problems identified by the comptroller general receive continuous attention. Despite Pentagon objections, Senate authorizers defined management responsibilities rather than leaving that up to the Pentagon.

England said the Pentagon leadership prefers the House’s bill to the Senate’s, but stressed that neither “is needed in the department.” England said one of his initiatives upon becoming second civilian-in-command at the Pentagon was to reduce “our own directives to shrink the bureaucracy as much as possible.”

“The Department [of Defense] appreciates the Congress’s interest and willingness to provide legislative assistance to help the department implement more effective and efficient processes,” Gordon said Tuesday in a statement before a House Armed Services Committee hearing. “However, in my judgment the department today is overburdened with rules, regulations and legislation that limit effectiveness.”

England said the key management issue that must be addressed has to do with the Pentagon leadership’s ability to integrate diverse operations, rather than organizational structure.

“I am not anxious to bring about change. I would much rather have a high degree of flexibility,” England said, adding that an adaptable and flexible organization would be better for the country.

England said he was hesitant to implement certain congressionally prescribed organizational changes because they could impede the next secretary of defense’s ability to adjust the organization to fit his desired leadership style. Adjusting the organization to fit the team is “infinitely preferable to forcing the team to fit the organization,” he said.

Leadership positions in government see high turnover due to the nature of political appointments and the planned turnover in military leadership. “To accommodate this personnel rotation, the DoD organization needs to be flexible and adaptable,” England said. “Prescribing specific legislative attributes would run counter to this objective.

England said he appreciates elements of the House bill, which allows the secretary of defense to assign management duties at the undersecretary level or above.

“It is most helpful if the Congress focuses on outcomes, rather than prescribing organizational methods,” though, England said.

Rep. Vic Snyder (D-Ark.), the chairman of the House Armed Services Committee’s Oversight and Investigations panel, said Pentagon management is a topic that “is pretty frustrating to members.” Lawmakers constantly hear of problems: When something goes wrong they try and correct it by statute, he said.

The Pentagon is far from free of management challenges, a fact its leadership has acknowledged. The DoD manages people and business systems at more than 3,000 locations worldwide. It manages $1.4 trillion in assets and $2 trillion in liabilities as well as annual operating costs of more than $700 billion. The department employs more than 3 million people.

Last year, the Pentagon could obtain a clean audit opinion on only 21 percent of its assets and 77 percent of its liabilities, Rep. Ike Skelton (D-Mo.), the Armed Services chairman, noted.

In his testimony, England said the Pentagon had launched an aggressive financial improvement and audit readiness plan. Its goal is to gain clean audit opinions of 72 percent of its assets and 79 percent of its liabilities by 2010.

“That may seem like a long lead time for change, compared to industry, but it is actually quite ambitious given the size of DoD’s asset base — over $1 trillion, more than double the combined total of $480 billion for IBM, Wal-Mart and ExxonMobil,” England said.

“DoD has some high-profile programs to correct these management problems; however, these programs themselves have experienced significant challenges,” Skelton said. “In 2005, GAO [Government Accountability Office] designated DoD’s approach to business transformation as high risk.

“These programs are extremely complex undertakings involving literally thousands of moving parts. Their success depends on careful management, yet the GAO has also identified significant management weaknesses, which have impeded the department.”

The House defense authorization bill calls on the Pentagon to establish a comprehensive business management plan and financial statements for all elements of the department that receive clean audit opinions during independent financial audits. In the Senate Armed Services Committee bill, the chief management officer has to develop and maintain a department-wide strategic plan for business reform.

Among the officer’s other duties are the establishment of performance goals and measures for improving and evaluating the overall economy, efficiency and effectiveness of the business operations of the Department of Defense, as well as monitoring the progress of the Pentagon and its components in meeting performance goals.