From Chaos to Clarity: How Current Cost-Based Strategies Are Undermining the Department of Defense
Abstract
Cost-driven outsourcing strategies are undermining the Department of Defense (DoD). This is the inescapable conclusion we have reached in the course of our research. The effort put into Office of Management and Budget (0MB) Circular A-76 (A-76) and related initiatives is great yet the savings are at best marginal. Moreover, there is evidence these initiatives are degrading mission performance. Why is this so? First, cost-based initiatives do not align with DoD business strategy. The Defense Department has historically followed a generic strategy of differentiation, not cost leadership. The Department of Defense's beliefs, values, and mission are atigned to support this generic strategy. A-76 and related initiatives, with their focus on cost, are not well suited for an organization such as DoD, which competes on quality, not cost. This misalignment of strategy and outsourcing policy has generated a great deal of concern within DoD. This is especially true of base and installation commanders who must implement A-76 and related measures. Installation commanders, more so than any other group we surveyed, place mission performance and personnel ahead of cost. This is at odds with current outsourcing policies that place cost ahead of performance and personnel.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 2001
- Accession Number
- ADA398045
Entities
People
- John J. Mcguiness
- John S. Spicer
- Warren M. Anderson
Organizations
- Defense Acquisition University