Detailing his plans to lower costs by 20 percent at senior levels of the Pentagon by the end of the decade, Defense Secretary Chuck Hagel said Wednesday he expects that contractor positions will face the largest cut.
Hagel addressed reporters on the implementation of plans announced last summer to reduce costs in the Office of Secretary of Defense (OSD) by 2019. The reforms include eliminating or combining positions at the levels of assistant secretary of defense or deputy assistance secretary of defense and their civilian staffs, but the biggest cut would be to contractor jobs, Hagel said.
“Much of these savings will be achieved through contractor reductions, although there will be reductions in civilian personnel,” Hagel said, adding that many of the jobs will be eliminated by declining to replace individuals who leave.
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| Defense Secretary Chuck Hagel has announced plans to scale back the size of his office. |
A senior defense official said that of the 2,400 military and civilian personnel, 200 of those positions will go by 2019. The Pentagon did not provide figures on the number of contractor jobs to be reduced.
Hagel’s announcement is part of a broader plan to reduce headquarters spending throughout the Pentagon and military by 20 percent, including at combatant commands and other areas. Hagel had pledged that OSD would be the first subjected to the cutbacks.
Hagel said that the cost saving measures are required to offset the impact of a $487 billion in budget reductions throughout the rest of the decade, and to cope with the draconian sequester cut what went into effect earlier this year that–unless lifted by Congress–will slash an additional $500 billion in funding across Pentagon accounts.
“With the Pentagon confronting historically steep–and abrupt –spending reductions after a decade of significant budget growth, there is a clear need, and an opportunity, to pare back overhead and streamline headquarters across the department,” Hagel said.
The reductions in OSD will only save about $1 billion over five years, which Hagel said was a small amount compared to the impact of the budget cuts and underscores “the challenges that face this department in absorbing these very large sequester level reductions.”
“These reductions are only a first step in DoD’s efforts to realign defense spending to meet new fiscal realities and strategic priorities,” he added. “Difficult but necessary choices remain ahead for the department on compensation reform, force structure, acquisitions and other major parts of DoD.”
Hagel said that the cost savings through the reductions will help allow for continued investment in warfighter capabilities such as weapons as well as maintain readiness. The changes were also designed to meet the needs of evolving security priorities worldwide.
None of the structural changes outlined by Hagel appear to directly affect the Pentagon’s acquisition community under the under secretary of defense for acquisition, technology and logistics–a position currently held by Frank Kendall.
Several of the reforms will take place in the Office of the Under Secretary of Defense For Policy, the Office of the Deputy Chief Management Officer (DCMO), in intelligence activities and other areas.
One key change is moving the oversight of business systems from the DCMO to the Pentagon chief information officer to improve the management of information technology and address cyber challenges, Hagel said.
Since Hagel first outlined plans to restructure OSD, there had been speculation that the Office of Net Assessment, and its longtime and highly regarded leader, Andrew Marshall, could be in trouble. Instead, the internal think tank was preserved and realigned under the undersecretary of defense for policy, which Hagel said would give it a better role in influencing the overall strategy across all levels of the Pentagon.
Marshall, 92, has been the director of the Office of Net Assessment since its founding 40 years ago and is considered among the most important thinkers when it comes to shaping defense policy and the military.