Outsourcing & Privatization of Defense Infrastructure
Abstract
The Department of Defense is currently undertaking a major review--the Quadrennial Defense Review--of its military strategy and force structure. This exercise may lead to significant changes in how the Pentagon organizes and prepares to fight. Left out of this equation will be how the Pentagon manages the day to day business of national defense. This omission will be unfortunate since the need for the Defense Department to fix the way it manages its service and support infrastructure has never been more acute. While military leaders continue to downsize and reorganize the fighting force, spending on support functions and overhead costs remain stable, and, in some cases, are growing. Too much of limited defense dollars goes to support areas--the "tail." In fact, support and infrastructure now consume nearly 70% of all defense dollars, an annual sum of roughly $160 billion per year. Such excessive overhead is inexcusable when many warfighting needs--"tooth"--remain unmet. How can this problem be fixed? In the private sector and in state and local governments nationwide, outsourcing and privatization have emerged as management innovations that promote efficiency and improve service. Faced with a "competitiveness crisis" in the 1980s, American industry restructured and reengineered itself and is now the envy of the world. The Defense Department should try a similar approach. Pentagon leaders recognize that privatization and outsourcing make sense. In fact they backed an aggressive outsourcing policy starting in the mid-1970s. Yet, only halting progress is being made. Moreover, areas widely touted as success stories--as BENS notes in our case studies of the defense travel system and military housing--reflect privatization in name only. Progress to date remains limited, and the projected savings exist only on paper.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 01, 1997
- Accession Number
- ADA530702
Entities
People
- Paul Taibl