September 16, 2013
Credit: U.S. Air Force
They still need to break a sweat, but the wrench turners, mechanics and other “artisans” at U.S. military depots do not appear to be an immediate target for cost savings even as the Pentagon, White House and Congress eye so-called sequestration cuts for the long term.
The question is, though, for how long are they relatively safe?
“You know, it's a very sensitive political subject. Right now, with the situation we're in at the department, we are looking at creative ways to try to save money and to have more competition,” says Pentagon acquisition chief Frank Kendall. “We're not allowed to have competition, I think, under the law, between the depots and the commercial world at that moment. I don't know that we're going to go so far as to try to take that one on politically.”
Ironically, Kendall's comments this summer come as the Defense Department is busy proposing a slew of unpopular ideas, from closing more bases to reining in personnel benefits, let alone allowing some combat units to slip in readiness. But they also come as the Defense Department pushes its Better Buying Power strategy, which relies heavily on the benefits of competition, to help it get more “ bang for the buck.”
That will become increasingly important as federal dollars become scarcer under the long-term effects of the 2011 Budget Control Act and its spending caps or automatic sequestrations, i.e., widespread budget rescissions, if Congress does not appropriate on its own to the predetermined caps. With fiscal 2014 starting Oct. 1, and with it, the near certainty of another round of sequestration—and, at $52 billion above plan, also larger than the $37 billion that took effect in March—the whole idea of introducing competition in military depot work could become harder to fend off.
“It's something we should think about,” Kendall adds, knowing he is touching on a sensitive subject. “There's a very strong [congressional] caucus, as you're well aware, that supports the depots. And we do need some capacity there. So the question is, what's the right balance? I think we need to be sure that our depots are giving us value, and we need to have competition where we can. But I'm not sure that we can move very far away from the situation we have right now in terms of the balance.”
Yet, while it was always tenuous, the balance appears to be teetering even further lately. Today's military depot regime stems from Washington's fears following World War II that industry would abandon the maintenance, repair and overhaul (MRO) business in light of a major drawdown in the armed forces. U.S. law was passed to require the Pentagon to maintain a “core maintenance capability”—or a combination of people, facilities, equipment, processes and technology, as expressed in direct labor hours—that is government-owned and operated to meet regular and emergency force-generation requirements. In even-numbered years, the Pentagon must provide lawmakers a so-called Biennial Core Report outlining its status.