Reduced DoD funding will require fundamental change, says panel

A Defense Department in store for a difficult decade of spending cuts will have to make sweeping changes to its internal structure, said panel members during a May 12 AFCEA International 2011 Joint Warfighting Conference in Virginia Beach, Va.

"For the past decade, we have had a culture of spending more money," said Dov Zakheim, a former DoD comptroller. "You have a situation where the department doesn't even really know how many contractors are working for it--how do you get at a problem when you don't even know its size?" he added.

Retired Army Col. Doug MacGregor said that a changing strategic and funding landscape will require the Pentagon to significantly pare down its ground forces--he suggested a number of 600,000, since future battlefields will not permit large concentrations of forces for long periods of time.

"You're going to live in a world increasingly dominated by submarines, unmanned submersibles, unmanned aircraft, the aerospace environment, this complex, this ISR-strike-maneuver complex from space, from land, from the sea," MacGregor, who has a history of iconoclasm, said.

Cuts to the military should be such that what is left is organized "not under single-service headquarters and single service chains of commands, sometimes with a 'J' in front of them to make them joint, but in fact integrated command structures, where joint force commanders with three stars could be from any service," he said.

When it comes to revamping the military services' financial management, Air Force Comptroller Jamie Morin suggested the introduction of pricing mechanisms for shared capabilities. "I'm not talking about put a slot on every GPS receiver and requiring users to drop quarters in," he said. Rather, Morin said, expanding pricing concepts such as reimbursable services provided by Transportation Command into the requirements and acquisition systems would create a way to make tradeoff decisions.

He also suggested that the Pentagon convert as many fixed cost operational elements into variable cost elements as possible.

Morin also argued against what he said would be two tendencies of organizations faced with declining budgets: Relying on clever financing mechanisms to attempt to get around problems, and adopting overly-optimistic cost estimates.

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