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We were a bit disappointed by some things that the comptroller of the DOD stated during his presentation. The first was in response to our question about the source of further savings and efficiencies beyond those identified in the FY12 and FYDP just released. The comptroller’s response was that “logistics and healthcare” are two potential areas for additional savings. Furthermore, we got the impression that savings efficiencies beyond FY12 are not as firm as the numbers might suggest. While logistics and healthcare may well be places for savings – they are almost too obvious and their mention begs the question of why logistics didn’t figure more prominently in the FY12 efficiencies.We were hoping for a firmer answer about future cost savings plans including additional de-layering of overhead, better DOD buying practices, divestiture of assets that are costly to sustain and maybe even a look at some things DOD is doing in depots and arsenals that might be done by outside contractors at lower cost. Clearly some elements of an answer along this line would be controversial. But given the budget challenges the DOD is facing, a bit more controversy could be a good thing. A tighter answer that maybe even had some numbers to it would have been more convincing that DOD cost reductions are not a one shot deal for FY12 and the FYDP. To the comptroller’s credit, he mentioned that the secretary of Defense is trying to instill a culture of cost savings and that’s positive. But a deeper understanding of how much fat is on the bone is surely needed.
ar99, defense, spending
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