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Living on the Crest of a New World
Remarks by Sherri W. Goodman, deputy undersecretary of defense for environmental security, Future of U.S. and International Environmental Industry, Washington,, Tuesday, November 11, 1997

Defense Issues: Volume 12, Number 56-- Living on the Crest of a New World DoD's preparations for the future are predicated on changing the way troops are supported and the way decisions are made on everything from purchasing to logistics -- to environmental obligations.


Volume 12, Number 56

Living on the Crest of a New World

Remarks by Sherri W. Goodman, deputy undersecretary of defense for environmental security, at the Future of U.S. and International Environmental Industry, Washington, Nov. 11, 1997.

For Halloween this year, my 2-year-old daughter announced that she wanted to be a witch. A scary witch -- in a pretty dress. This innocent request expresses an ageless wisdom that speaks to the universal struggle to strike a balance. In the case of my wise 2-year-old, striking a balance on Halloween between force and grace.

We are here today as part of our nation's attempts to find balance, in many ways, on behalf of our children -- to leave them a cleaner, safer world of opportunity.

In exploring how society can balance environmental protection and development, in his best selling book, "Earth in the Balance," then-Sen.[Al] Gore said, "At the heart of every human society is a web of stories that attempt to answer our most basic questions: Who are we, and why are we here?"

In the wake of the Cold War era and on the eve of the 21st century, Secretary [of Defense William S.] Cohen is challenging the Defense Department to address these same existential questions: Who are we? Why are we here? And the defense environmental program is not immune from this challenge. Our part of the equation is to ask how we can do our job better.

The Defense Department took a fresh look at itself with the Quadrennial Defense Review. The QDR was the first part of a structured response to asking the questions: Who are we? ... Why are we here?

QDR looked at the world from the present through 2015 to determine where the threats will be as well as the opportunities to make the world safer. In the QDR process, we asked: What will the military look like in the outyears? How will military installations operate in, say, 20 years?

Just 10 years ago, something as routine as contracting to have lawns mowed on military property seemed as improbable as the fall of the Berlin Wall. That seems unbelievable now.

Through QDR came what Secretary Cohen calls the "shape, respond, prepare" defense strategy. First, shape the security environment. Second, maintain strong forces so that we can respond decisively to threats. Third, prepare now for the future. Undoubtedly, this third part is the most difficult challenge.

At the Defense Department, preparing for the future is predicated on investing in modernization. Modernization -- that is, acting today to build tomorrow's military, requires what Secretary Cohen has called a "Revolution in Military Affairs." This means pressing the edge of the envelope to develop and use new technologies -- everything from computers to sensors -- to transform the way we meet our mission.

QDR provides a blueprint for this revolution, spawned by a new world that will thrive using a whole new set of technologies, business practices and services.

... In the 1980s, American industry went through its own revolutionary transformation -- a "re-engineering," to compete with the Japanese and the European Union -- and we emerged as a global economic power. Today, in the era of declining budgets, DoD faces the same challenge.

Investing in modernization, in the Revolution in Military Affairs, will require a fundamental shift in the way we support our troops. It will require changing the way we make decisions on everything from purchasing to logistics.

Secretary Cohen likes to tell about a "Peanuts" cartoon that asks, "How do I do new math with an old math mind?" He says, "And what we have to do is to do new math with a new math mind, and what we need is a Revolution in Business Affairs, and that's where we are lacking today." Secretary Cohen established the Defense Reform Task Force for the purpose of making this leap. It picks up where the QDR left off.

Yesterday, Secretary Cohen announced the results of this effort. He laid out a plan to fuel the Revolution in Business Affairs over the next 18 months. The essence, as described by Deputy Secretary [of Defense] John [J.] Hamre is this, "We want to eliminate the fat, to save the muscle." He went on to say, "It's all summarized in the expression that in the old days it was the big eat the small, but now it's the fast defeat the slow."

With this vision in mind, Secretary Cohen's defense reform has four parts:


  • Adopting best business practices.
  • Restructuring the organization.
  • Streamlining through competition.
  • Eliminating unneeded infrastructure.

Applying lessons learned from the private sector is the centerpiece of Secretary Cohen's Defense Reform Initiative. The goal is to achieve world-class standards of performance.

In a nutshell, this means a move to paper-free contracting of major weapons systems by 2000 as well as paper-free systems for weapons support and logistics. It means a new electronic commerce program; it means "printing on demand" rather than "printing to distribute"; it means re-engineering the travel system; and replacing the military's "just-in-case" logistics mindset with the private sectors "just-in-time" mindset.

The goal is to free resources to refocus on core mission activities and to ensure that we maintain the strongest military organization in the world. Achieving this will means a leaner Office of the Secretary of Defense and leaner defense agencies, Joint Staff and military departments (headquarters). Over half of the reductions (55 percent) in OSD will be through transfers as part of the reorganization, the remainder will be achieved by eliminating positions.

The Defense Department will increasingly rely on competitive powers of the marketplace to improve efficiencies. By 1999, DoD will evaluate the entire work force to determine which functions are commercial in nature and should be opened to competition under the A-76 process.

Already we are beginning to use the A-76 process more than ever before. In FY [fiscal year] 1997 alone, we will do three times as many A-76 competitions as the previous year, competing 34,000 positions. And we plan to compete 120,000 positions over the next four years, at a savings of $6 billion in FY 99 to 2003, with an annual savings of $2.5 [billion] thereafter.

DoD will continue to pursue public sector/private sector competitions for depot maintenance work to the fullest extent allowed by law. The challenge is to open our minds to think about what functions stand to benefit from competition.

We are saddled with old infrastructure and excess Cold War infrastructure. As part of this "revolution," DoD will eliminate the "fat" in infrastructure. DoD will seek congressional authority for two more rounds of BRAC [base realignment and closure] in 2001 and 2005. These rounds are expected to save $2.7 billion per year after implementation.

By Jan. 1, [1998] with a few exceptions, DoD will initiate the privatization of all utilities, including water, waste water, gas and electricity. Also, within six months, the newly renamed Defense Energy Management Center will outline a blueprint for three regional demonstrations of integrated energy management, to include supply and demand management.

How does defense reform affect environmental security? Defense Reform will change the way environmental security does business.

The major tenets of Secretary Cohen's Revolution in Business Affairs will mean more public sector/private sector partnerships, more privatization and more public sector/private sector competition to deliver products and services faster, cheaper, better. The utilities privatization I just spoke about is a good example.

For environmental security, these changes are good news. Secretary Cohen's defense reform builds on changes we have been making for several years to "reinvent" the way defense fulfills its environmental commitments to:


  • Protect civilian and military personnel;
  • Manage the natural areas under our jurisdiction;
  • Be good citizens and neighbors;
  • Set an example for militaries around the world.

In environmental security, we have already begun to cut infrastructure and improv[e] efficiencies through technology and management innovation, privatization and by building meaningful partnerships with industry, regulators, nongovernmental organizations and the public. ... Yes, we need to reduce costs, and, yes, we need competition, but the best way to foster that is by building partnerships.

Defense reform will help us to augment our existing partnerships. I would like to take a few moments now to talk about how environmental security will support defense reform and what it may mean for the private sector, by focusing on several initiatives we have under way in three areas:


  • Operating more efficiently;
  • Reaching out to the private sector;
  • Cutting paperwork.

We have learned that pollution is waste, and waste is money. The result? Today, environmental protection is being integrated into all defense activities.

As the world's largest industrial, we reflect the full spectrum of societal trends, and it has become crystal clear to us that environmental protection makes good business sense.

Finding ways to reduce our fossil fuel use is recognized within defense as an area where improved efficiencies can be garnered. With the president's global climate change initiative in full swing, the breadth and scope of our efforts in this area have grown exponentially.

In October 1997, President Clinton announced the United States' climate change proposal, committing the U.S. to negotiate a new protocol under the U.N. Framework Convention on Climate Change that will, according to the president, "commit to the binding and realistic target of returning to emissions of 1990 levels between 2008 and 2012."

The president also said that "we must reinvent how the federal government, the nation's largest energy consumer, buys and uses energy ... the federal government will play an important role in helping our nation to meet its goal."

DoD is the largest energy user in the federal government. In fiscal year 1996, our energy consumption was about 1.4 percent of the total energy use in the United States.

The Defense Department is challenged with meeting the president's new targets while sustaining the military mission -- without increasing the overall defense budget.

We must harness our leadership in environmental protection to reduce greenhouse gas emissions from our day-to-day operations and training activities in a way that is consistent with national security goals.

DoD can and should reduce our emissions as the rest of the nation will be called on to do. We can meet this obligation by focusing on improving efficiencies for our facilities and nontactical vehicles. We are well on our way to putting plans in place to improve our energy management in these areas.

Energy management is important for three reasons:


  • First, increasing energy efficiency reduces the cost of heating our facilities, lighting our workplaces and cooling our family housing -- saving money which can be applied to other priorities.
  • Second, increasing energy efficiency reduces the fuel use in trucks, ships and planes -- increasing mobility.
  • Finally, energy conservation is good for the environment and reduces greenhouse gas emissions. Sound energy management is good business, makes operational sense and compliments the president's climate change goals.

In his recent address on climate change, President Clinton announced a series of federal initiatives. In partnership with industry, the Defense Department is providing leadership in this arena in three important ways. This work is a preamble to the innovation that will be required to beat our dependency on fossil fuels.

DoD is working to increase energy efficiency in new construction by 30 to 50 percent by fiscal year 2000 (compared to existing facilities). The services have already executed several projects that demonstrate this comprehensive approach. They had an annual energy savings of $130,000 per year (compared to the conventional design) by building energy efficiency into construction design -- and this did not require additional up from costs.

The Department of Defense is increasing use of energy savings performance contracts. Energy savings performance contracts use private investment capital and expertise to implement energy and cost savings projects in DoD facilities. The contractor's investment is repaid from energy savings based on measures taken at the installation. When the investment is repaid, all additional energy savings go to the government, and the government retains ownership.

The department has 20 ESPC contracts in progress or under negotiation. Projected investment by the energy services contractors is nearly $54.8 million. Additionally, the Army Corps of Engineers, as the lead executive agent for the department, has established two superregional ESPCs for all 50 states, with a total investment capacity of $1.455 billion.

The department is also working with the private sector to improve energy efficiency in diesel and high-performance turbine engines and is developing partnerships with private industry to improve efficiency of our mobility and weapons systems.

The overriding issue for DoD is reducing the logistics burden associated with fuel consumption, which will, in turn, reduce emissions of greenhouse gases. DoD owns the largest fleet of vehicles within the federal government, and the Army has the bulk of these vehicles. The Army and other services need more efficient propulsion systems for a wide range of systems, from medium tactical trucks to heavy trucks and combat vehicles.

We envision establishing a consortium of truck and power train manufacturers and research organizations, including commercial, academic and government laboratories, to accelerate technology transfer of advanced technologies, such as diesel, electronics and materials from research to manufacturing.

These and other initiatives will allow us to achieve a 30 percent reduction in energy use that must be reached by 2005 as directed in the Energy Policy Act of 1992.

We can meet that goal!

Part of the solution to reduce energy use and reduce greenhouse gas emissions in the future will rest in applying the same pollution prevention philosophy that we now use to reduce pollution in the design of our weapon systems and at our installations. In the same way, we can abate greenhouse gas emissions and reduce life cycle costs, but only if we work in partnership with industry.

As the Defense Reform Initiative outlines, partnerships and competition with the private sector will play a growing role in helping defense consolidate infrastructure and improve efficiencies.

To illustrate, let's talk about the partnerships we are building to strengthen our ability to innovate environmental technologies. In this area, we are striving to consolidate functions and reduce administrative costs, freeing limited dollars for reinvestment in more technology innovation -- an item that is central to the secretary's Revolution in Military Affairs.

We must remove barriers to technology innovation. Much of the environmental technology advances we have made come from picking the low-hanging fruit. The major challenges will be met by working with industry to deliver products that meet operational needs through processes and partnerships that have yet to be developed. We must proceed in a way that minimizes the risks and costs of bringing emergent technologies to market.

I am proud to be able to tell you today that we have taken a first, and I believe very brave, small step forward. We expect to have brand new legislative authority that will create a new tool for working with the private sector. It is now before President Clinton for signature. This mechanism is designed to stimulate the market with increased emphasis on emergent technologies that could help us address military unique challenges.

The new legislation was proposed by DoD for inclusion in the Defense Authorization Act. Defense Environmental Security Technology Investment Partnership is an investment tool by which DoD may enter into partnerships with the private sector. Its goal is to ensure that environmental technology projects are not abandoned or delayed due to perceived risks (risk defined in the broadest sense). DESTIP will help us to work with the private sector to leverage expertise and understanding of market factors.

Consolidation will help create an atmosphere for growth in technology innovation because there is a greater likelihood that industry, regulators and the community will share risks -- with the expectation that services, such as environmental restoration, will be accomplished better, cheaper, faster.

Moving to paperless systems [is] a priority. Our current paper use and flow is a shackle to the past. In government, freeing ourselves from the most cumbersome aspects of paperwork is central to our transformation. This battle will be won by moving to the paperless office and by finding ways to cut paperwork altogether.

Our ENVVEST (Environmental Investment) Initiative is a case in point. It is a parallel effort to EPA's XL program that trades paperwork for performance, with a net gain for the environment. XL and ENVVEST are part of the president's overall Reinventing Government initiative. It allows military installations, in conjunction with federal, state and local regulators, to test cost-effective, practical alternative approaches to achieving environmental protection.

It is designed to demonstrate that the Defense Department can improve environmental performance at tremendous savings by encouraging performance-based solutions to environmental problems. We are in the environmental reinvention business -- and we mean business.

Just last week officials from the Air Force, Environmental Protection Agency and Santa Barbara {Calif.] County Air Pollution Control District signed the very first ENVVEST agreement at Vandenberg Air Force Base [Calif.]. It will allow the Air Force to reduce environmental program costs and apply savings directly to reducing pollution from the base.

Vandenberg Air Force Base was the first DoD installation to sign an agreement with EPA. They plan to redirect environmental compliance funds into water conservation, air and water pollution prevention projects. The Air Force will use the savings to purchase and operate cleaner operating boilers and equipment for the base's power station. The result is less money spent on administration, and more invested in improving air quality.

Vandenberg serves as a model for other agreements, which are soon to follow. What we hope industry will be able to bring to the table are new technologies that push the envelope in terms of efficiency and pollution prevention.

All of these changes at the Department of Defense will open up new markets in areas that were previously handled in-house, and many environmental services are among those that are likely to be delivered though contracting. ...

Defense reform challenges us to strike the balance between public sector/private sector leadership. Our futures hang in this balance.

I want to reassert that we must work in full partnership, embracing change, letting go of old paradigms and preconceived notions of how to do business if we are to create an environmentally and economically sustainable future. The Defense Department is committed to doing our part and hope you will join us. Thank you.


Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission. Defense Issues is available on the Internet via the World Wide Web at