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Hamre Says DoD Building Agile Support Organization

By Jim Garamone
American Forces Press Service

WASHINGTON, Oct. 8, 1998 – The Defense Reform Initiative is not just about saving money, but "building an agile support organization for the future," said John Hamre, deputy secretary of defense, and with one exception, DoD has done well.

Hamre addressed reporters Oct. 8 at a Pentagon news conference. The exception, he said, was the department's goal to hold two more rounds of base closures.

One thrust of the initiative was to downsize management beginning at the top. The initiative called for the Office of the Secretary of Defense to cut a third of the 3,000-member staff. "This is about 75 percent done," Hamre said. "About half these cuts were transfers, and we have about 250 to go." He said he expects the initiative to eliminate about 35,000 civilian positions throughout DoD.

The initiative, announced in November 1997, called for DoD to adopt best business practices from private industry. He pointed to the Electronic Mall run by the Defense Logistics Agency as one example of DoD's progress. "This is real, live and available today," he said. "Workers can buy what they need electronically over the Web. This is a revolutionary change. No longer do they have to fill out reams of paperwork to buy something. There are thousands of items they can order on their computers."

With this is the use of commercial credit cards to buy small items. Hamre said about 80 percent of these "micro-purchases" are done using a commercial credit card. This, again, cuts the paperwork and time required for purchases.

The initiative included many organizational changes. The biggest was the creation of the Defense Threat Reduction Agency, which activated Oct. 1. The agency merges three others -- the Defense Special Weapons Agency, the On-Site Inspection Agency and the Defense Technology Security Administration. "This makes these organizations more agile and, frankly, more creative in combating the threats posed by weapons of mass destruction," Hamre said.

Another success, he said, was "competitive sourcing." This is not privatizing jobs, but competing contracts for work not inherently governmental. DoD's initial goal was to compete 150,000 jobs, but the tally was boosted recently to 237,000.

The department expects significant savings from competitive sourcing, he said, but must wade though paperwork to accomplish that. Recent congressional action makes it more difficult for DoD to compete government jobs.

"One half of the authorization bill beats us up for not moving fast enough," Hamre said. "The other half makes us do extra paperwork every time we want to contract out more than 15 jobs."

The Defense Reform Initiative failure was base closures. "We tried very hard to accomplish this, but Congress said not this year," he said. "We're still counting on savings from base closures to fund our long-term modernization."

Hamre said the department will work with Congress to get base closure next year. In the meantime, DoD is doing what it can to get rid of excess infrastructure. "We're demolishing 80 million square feet of unused buildings on our installations this year," he said. "That's 8,000 buildings we will knock down. Also, we are reviewing every utility system we have to see if we can't privatize them."

He said the initiatives were not designed to just save money. "We asked the services and defense agencies to look at the way they were doing business and find a way to do it better and at less cost," he said. "Any savings they realized, they kept. We wanted this to be real management reform and not just a cost- cutting exercise."

He pointed to reengineering the travel system as an example. DoD set up prototype electronic travel payment systems at 29 installations in the past year. At those installations, performance improved 100 to 150 percent and costs dropped 67 percent, he said.

"Everything from authorization to final payment is paper-free," he said. "We will expand this throughout the upper Midwest this year."

All of this, Hamre said, is about managing the department into the next century. "No one believes we should use a management system developed in the 1970s and 1980s," he said. "DoD is a world-class warfighting organization. We need to have a world- class support structure."

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