Reform Initiative Reorienting Way DoD Does Business

Deputy Defense Secretary John Hamre said he was satisfied with the progress DoD has made in implementing the reform initiative, except for its inability to get approval for two new rounds of base realignments and closures.

Cohen also unveiled a CD-ROM on the initiative entitled "Partnering for Excellence." The disk highlights the status of reforms and features new reforms the department is working on. The information is also available on the World Wide Web at www.defenselink.mil/dodreform.

He held it up during a Pentagon news briefing and said it was another example of the way he wants the department to head. "In keeping with our desire to move the department toward an electronic and paperless environment, I decided that our first status report on defense reform should be available solely in an electronic format," he said. "A CD report is easy to use; it is widely available and included on our DoD Web site, DefenseLINK."

Cohen said DoD would not use the first sustained increase in the DoD budget in 15 years as an excuse to derail reforms. "On the contrary, now more than ever, our ability to both secure the necessary funding for our men and women in uniform and sustain efforts to prepare them for future missions hinge on our ability to build the most efficient, effective support structure possible," he said.

The U.S. military is world class even after severe downsizing, major spending cuts and reorganization, Cohen said. But the war- fighting force has shrunken faster than its support structure, he added, warning, "We risk having a world-class military being encumbered by proportionately larger yet less efficient support infrastructure."

DoD needs reforms because it hasn't enough to pay for all its high-priority readiness and modernization needs, even with promised, sustained budget increases, Cohen said. It needs base closures for the same reason, he added. The BRAC rounds of 1988, 1991, 1993 and 1995 will have saved $14.5 billion by fiscal 2001 with annual savings of $5.7 billion per year. The department expects BRAC rounds in 2001 and 2005 would net significant savings that could be channeled to readiness and modernization.

Hamre said he believes a base closure commission is a real possibility. "When I speak to people on the Hill, they have an understanding of our situation," he said.

The DRI started with four pillars: elimination, re-engineering, consolidation and competition. The program expanded to include such areas as acquisition reform, logistics improvement, financial management and quality of life programs for DoD personnel. The expansion institutionalized the program so workers are used to "reforming the support structure on an ongoing basis," Hamre said.

Hamre said it is easy to track the progress the department has made under the DRI. "When the secretary tasked us to do this, he said 'I don't want any "airy-fairy" stuff, I want real tracking of progress that you're trying to make,'" Hamre said. "We've tried to highlight that in this report."

One example is DoD's adoption of the best business practice of using a "company" credit card for small purchases. In fiscal 1996, DoD activities used the government credit card for only 52 percent of their under-$2,500 transactions. The percentage was to 86 percent at the end of fiscal 1998, and DoD officials expect it to hit 90 percent by fiscal 2000.

Another way to chart DoD's progress is in competition. DoD wants to use competitive bidding for functions currently performed in- house. DoD saves money no matter whose bid wins, in-house activities or private contractors. The department expects to save $11.2 billion by competing 229,000 positions through fiscal 2005.

The CD also has information specifically aimed at communities that might be affected if new base closure rounds are approved. The disk points to notable success stories such as the 2,000 jobs created by the Devens Commerce Center, created when Fort Devens, Mass, closed in March 1996. Nationwide, 60 percent of the jobs lost when the installations closed have already been replaced.

Cohen said the Defense Reform Initiative has started to reorient DoD's missions and business methods. "It's had a deep impact on altering mind sets as well," he said. "We remind ourselves day in and day out, every person in this department has a personal obligation to really commit himself or herself to the DRI goals.

"We have one of the world's largest organizations," he continued. "We want to turn it into a truly world-class supporter of our men and women in uniform, and we believe we're on the right track to do so."