$125 Billion in Savings Ignored: Review of DoD’s Efficiency Study

Full House Committee on Oversight and Government Reform
Full House Committee on Oversight and Government Reform
Hearing Date: March 21, 2017 10:00 am 2154 Rayburn HOB

TAKEAWAYS:
  • The contract to generate a report on potential savings within DoD totaled $9 million. DoD never finalized the report; the deliverable was limited to a slide deck.
  • This study was treated differently than previous reports published by the DBB
  • DoD testified that the study was widely disseminated, but:
    • The slide deck of the study was not filed under “Reports” section of the website, but instead filed under the “Meeting Minutes” section.
    • A former member of the DBB called to obtain a copy of the study, but was told the DoD declined to print copies of the study.
  • DoD is the only agency that has never conducted a full financial audit, despite a congressional mandate to do so.
  • DoD needs to change its culture to reduce waste.
  • DoD needs to review the balance of contractors vs. civilian employees vs. uniformed personnel

PURPOSE:

  • To discuss the findings from a DBB study concluding that DoD could save $125 billion by instituting operational reforms and reducing “back-office” (non-combat) operations.
  • To investigate any deliberate suppression of DBB’s findings, as well as DoD’s progress in implementing necessary human resource and administrative cuts.

BACKGROUND:

  • In October 2014, DoD commissioned DBB to perform a comprehensive study to find human resource and back-office administrative cost savings so that the Department could reallocate the funds to war-time operations and maintenance.
  • In December 2016, the Washington Post reported that DoD tried to bury the results of this study when it identified far more wasteful spending than the Department expected.
  • Thirty-one members of the committee sent a letter to DoD seeking information about the study.

KEY VIDEOS:

Chairman Chaffetz (R-UT): “Even just doing a study we can’t figure out what it cost and what it didn’t cost and who got paid and who didn’t do the work. . .whether you’re buying an F-35 or whether you’re buying a study. . .this is the problem in the bureaucracy of the Pentagon”

Health Care, Benefits, and Administrative Rules Subcommittee Chairman Jim Jordan (R-OH): “So all the other times you use taxpayer dollars, you do a study, find out something important for taxpayers and potentially savings, there’s a normal way that information is presented to the public. . .[this report] wasn’t widely disseminated, wasn’t printed, and was taken off the website. Why was this report treated different?. . .Maybe it was the magnitude of the findings?”

Rep. Darrell Issa (R-CA): “How do we on this side of this dais ensure that never again are there tens or hundreds of billions of dollars in savings that the American people are denied because some unknown person at the Department of Defense puts a kabosh on it–for whatever reason–and Congress doesn’t find out about it?”

Witnesses and testimonies

Name Title Organization Panel Document
Mr. David Tillotson III Acting Deputy Chief Management Officer Department of Defense Document
Mr. Scott Rutherford Senior Partner McKinsey & Company Document
Mr. Michael Bayer Current Chairman Defense Business Board Document
Mr. Robert "Bobby" Stein Former Chairman Defense Business Board Document
Mr. Kenneth "Kenny" Klepper Former Board Member Defense Business Board Document
Dr. Lawrence J. Korb Senior Fellow Center for American Progress Document