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DoD News Briefing: Defense Reform Task Force

Presenter: Defense Reform Task Force
May 14, 1997 1:15 PM EDT

[Also participating in this briefing is Dr. John J. Hamre, Comptroller, Kenneth Bacon, ASD(PA) and Capt. Michael Doubleday, USN, DASD(PA)]

Mr. Bacon: Good afternoon.

Secretary Cohen has to leave for the White House shortly for an announcement on NATO, so he'll read his statement, take a question or two on the topic at hand, and then Dr. Hamre is here to take further questions.

Secretary Cohen: Actually, I won't even read the statement. The statement is too long for me to complete before leaving for the White House, so perhaps I could just summarize.

As some of you are aware, we are about to issue a QDR report in the near future. Hopefully it will be unveiled next Monday, and then I will go to Capital Hill to testify in the Senate on Tuesday, and then again in the House on Wednesday. Some of this material, of course, has been reported in part in the press, but I hope to give you at least a complete overview of the process next week.

The one thing that I have found that we were not adequately able to address has to do with the Office of Secretary of Defense.

As I indicated earlier, there are many people in the Pentagon and elsewhere who felt that the six month timeframe to conduct this Quadrennial Defense Review was really inadequate. When you're talking about taking a profound and an in-depth look at an institution this large, a six month time is really not a great deal of time to complete that kind of an analysis. It was started almost immediately after the election in November, and proceeded through January when I came on at the very end of January, and I have been deeply involved in the process since February, March, April, and now, of course, into May.

But I rejected the notion that we should somehow continue the effort and felt that instead we should meet our targeted deadline of May 15th. It will not actually be May 15th, but 19th, because General Shalikashvili is out of the country until then, and he will want to be present when we unveil the QDR itself, and then make a presentation to Congress.

So the one area that I think we need to focus a good deal more analysis and effort has to do with the Office of the Secretary of Defense and the military departments.

I also felt we needed to have a Defense Reform Task Force. I am in the process of completing that task force. That task force will consist of a group of experts in the field of defense who will be consulting with members of Congress, who will be consulting with top corporate leaders who have gone through the experience of downsizing and streamlining and adopting procedures that would make their operations a good deal more efficient. So this task force will meet with a variety of people and groups, and then work very closely with me and also with the National Defense Panel which is required to complete its report to the Congress by the end of this year. I plan to have the task force, reform task force meet periodically with the NDP to coordinate, certainly, some of their activities and analyses, then to present that to the Congress by the first of December at the end of this year.

It's my hope that we will be able to help redesign our operations here. A good deal of progress has been made in recent years in making the operations more efficient by going to more off-the-shelf technology, by computerizing our operations, becoming more paperless as a society over here, and changing the way in which we reimburse for travel and a host of other areas where we've made significant savings. But I think much more needs to be done, and that is an area that I intend to focus on and have this panel focus upon.

It's something that I also need to send a signal to the services, who I have asked to make a number of reductions in their operations, I want to also indicate to them that I intend to have a corresponding reduction in my own operations to make sure that they don't see any cutback in terms of the tooth, but see the tail continue to grow as it has, almost exponentially, in a number of years.

So that is the purpose of my appearing before you today, to announce the formation of this Defense Reform Task Force and to entertain any questions you might have.

I will submit my statement for the record, as such. I think you probably have an outline of my remarks. You can use those for whatever purpose you have in mind.

Q: Mr. Secretary, do you have any targets for the size of the reductions that you're seeking?

A: Not specifically at this point. I am going to ask Dr. Hamre to oversee the entire project, to make sure that we do, in fact, have some financial analysis that is involved. I want to make sure that we combine the best minds that we have in the corporate field with the best minds that we have also of people who are expert in defense matters. It's one thing for a corporate executive to say here's how I achieved great savings and efficiencies. It might work in the corporate world, it might not work in defense. So I want to make sure we have a proper analysis along functional lines as well as operational lines.

Q: Many of the efforts to centralize things in defense agencies or in OSD originally were proposed as efficiency measures -- cutting down on duplication. Obviously you haven't done the analysis yet, but conceptually, was there something wrong with the efforts of the last couple of decades which caused this centralization?

A: Actually, I was reading Clark Clifford's memoirs the other night for easy bedtime reading... (Laughter) I was flipping through just a couple of nights ago, as a matter of fact, and I found in 1947, Clark Clifford was proposing essentially some of the same things that I am proposing here today, how to get control over OSD and to get better efficiencies and to try to streamline operations. There's a great deal of redundancy in much of what we do. Essentially it has been growing like Topsy, and we have to find ways in which we can achieve these savings.

As I indicated, as a result of some congressional action, I'd like to take a little bit of credit for that by focusing upon the travel reimbursement process of why we don't do more in the way of buying our procurement equipment through the credit card. You'd be surprised to find, for example, as was I, that roughly 75 percent of all the goods that we acquire are under $2,500 and yet we have example after example of having to negotiate 11 or 12- page contracts, each line having to be audited at roughly, I think it's $26 a line. We had an example last year where a day care center in Europe ordered roughly, I think, $1,500 worth of supplies for the party, signed an 11 page contract, and then had to have the audit conducted on the contract which cost, guess what? $1,500. So we spent as much auditing it as we did buying it. Whereas we could have used the credit card and had a very small overhead.

So we're going to do a number of... We have to have a revolution in our business practices, and we will do that. This task force will help me to analyze it, make recommendations. I also wanted to work fairly closely with members of Congress because some of this may involve legislative changes and I want the members of Congress to be a part of this analysis so that when I finally file the report next December I can this is what needs to be done.

Much as I will be asking for legislative changes in the QDR, I will need to have members of Congress become a part of it because, and I will mention this on Monday when I meet with you again, that I can present this document to the Hill, and will, and they will say thank you very much, it's not etched on Mt. Sinai, it needs to have the endorsement/support of members. So they are a major portion of the solution to our problem, so they will have to be brought on.

Q: Are you disturbed at all by the laser incident involving the Russian ship and the Canadian helicopter off the Washington coast this month? And did you raise the issue at all with Minister Rodionov?

A: I did not raise that issue with him, but the allegations pertaining to that are still currently under investigation and the answer is yes, I would be concerned any time there might be a violation of agreements pertaining to the use of lasers.

Q: Do you think there was a use of...

A: I don't know yet. It's still under investigation. There's still some conflicting evidence about it, so we don't have a conclusive answer, yet.

Q: We're led to believe there's a photograph showing the laser beam, you can distinctly see it. If there is, can we please have a copy of that photograph? And two, why has this been sat on here? This is more than a month. This happened April 7th. We're just finding out about it today.

Mr. Bacon: As the gentleman said, it was inconclusive. We don't announce...

Q: Well, it may be inconclusive, but a protest to the Russian government... The ship was manned and searched, a very inadequate search form what I read about, and then this ship is allowed to leave. We still don't know whether it was on an intelligence mission. We've got an American officer, Canadian officer who were injured. And no one sees fit to tell the American people about this.

Secretary Cohen: I don't have a copy of any photograph. If there is a copy, I'm sure it will be made available at some future point. I think the matter is under investigation, and until such time as we have the answers, it would be I think premature for me to come before you and say we've got a problem. We haven't figured out yet what the answer is, but we will in due course.

So that will take place, and as soon as we get the satisfactory answers, I'll be reporting to you.

Thank you.

Q: As a general rule, John, a lot of the defense agencies and the OSD infrastructure over the years accreted, and the rationale was the services are duplicating efforts. Let's pull them together and invent the wheel once. The latent premise of what you're doing here is that somehow that organizational thrust in the last couple of decades either was wrong or was overdone or what? I realize this is a broad question, but is there any meaningful answer you can give?

Dr. Hamre: Let me tell you what we experienced when we came here back four years ago when we looked at what was called the Defense Management Review. Remember the late Don Atwood that started that? He brought together a lot of service organizations and created new defense agencies -- DISA, Defense Information Systems Agency; DFAS; Defense Contract Management Command; these sorts of things.

At the time, they advertised very large savings. They advertised savings of about $70 billion from doing it. When we got there and did kind of an independent audit, the savings were $42 billion. So they were still very large. There were significant savings, but not as large as had been advertised. Frankly, one of the reasons I think we're not trying to advertise big numbers right now is because it tends to create a political reality that everybody measures against, and the first thing you want to do is change our business practices and reform our way of doing business -- not just politically hit a target. So I think we're trying to avoid kind of a superficial criteria to be measured by at the outset.

I think you'll see there's been a lot of good that's come from creating defense agencies. But as we've seen in the past, just like when we thought 10, 15 years ago the best way to get efficiency was great big computers. Now the mode is really distributed computing. When you have great big centralized operations, sometimes you deny yourself the creativity that exists in other organizations.

I wouldn't say that there's... There's not a guaranteed formula on what the panel is going to recommend for the future. It isn't to say that in the past creating defense agencies was a bad idea -- it really wasn't. There were some very good things. But maybe there needs to be some rebalancing, and maybe there are still some redundancies where we are doing duplicative things if you look at it from an enterprise-wide basis.

So no guaranteed outcomes yet.

Q: Do you have any idea who specifically you want to talk to in industry? Is it Vance Coffman, Ken Pressa, specifically?

A: First of all, let me say that it's really going to be the task force that's been asked to do that. Lots of people have been submitting recommendations to us. I think we're anxious to go outside of just the traditional defense community. I think we need to go out... If you just talk to us defense types, we would understand each other but we wouldn't necessarily always get the freshest ideas. There's some tremendous innovation that's been going on.

For example, one of the best trips I ever made was to Federal Express. I learned a lot about business practices going to FedEx. Normally I wouldn't have done that because they're not traditionally a defense contractor. So there is no magic list of gurus who we're going to go consult. I think the panel itself is going to look, and there are lots of great things going on in this country in industry.

Q: Isn't a chunk of this paralysis by analysis? I can't think of the size of the forest that's been felled for reports on how we can identify reforms in the areas of acquisition, logistics, installation operations, or property management. I think there's just been... Pete Marwick has just done a study of OSD and the service equivalent on management. (inaudible) John White.(inaudible)?

A: Yes, there is, and that's going to be kind of a starting point for kind of the final recommendations that will be brought forward to the Secretary.

One difference. The reason, I mean why would they trust this to a comptroller geek? Why would they ask me to do it? I think the reason is the Secretary wants it put into the program and budget review this summer. This is going to be real. We're going to be moving on it this summer and this fall. That doesn't mean everything, of course, because we're going to be learning a lot in the fall later on that has to be vetted. But this is not just going to be a make-work exercise that you can hang it up and use it as talking points when you go up and meet with members of Congress.

Q: A lot of the ideas have already been put out there. There's reams of paper, of ideas. It isn't just a question of adding at these ideas, is there? And figuring out which are good and bad. Isn't it also creating the political preconditions and lobbying the Hill...

A: We don't lobby the Hill. But it does mean that you have to... A lot of this does require legislative changes. Not a lot of it, but some of it does. You have to create that consensus working with people on the Hill to say we really do have to make a change here. Will you be our partners in making that change? That's part of what this panel is going to do. That's part of the reason that you see a lot of representation on the panel from people on the Hill.

Q: Congress ordered the Secretary to review how he, report to them, I think February 1 was the due date. Report how they were going to downsize OSD. That report has never been made. Congress is still waiting to hear. So now instead of reporting to Congress, you're starting the process all over again. What happened to the last requirement?

A: That report is still being developed. (Laughter)

Q: The great American novel. (Laughter)

A: Don't do this to me. Too many staff to coordinate, huh?

They found out in the panel that there was only one essential position, and it was the comptroller, and I'm pleased to report that. (Laughter) My job was not eliminated.

As a matter of fact when the Secretary had an informal session today with some of the people who were going to be on it he said the first order of business is OSD. He means that very sincerely. It has to start here. We're asking lots of people in the Department to do very difficult and sometimes painful things, and he said my credibility is on the line. I'm going to show it can start at home.

Q: Didn't he like the results of the study? You didn't like the number that you had to cut, or...?

A: In all honesty, I think that the question that was asked that framed the start of that study is different than the question the Secretary's asking. I think that that was... If you were to look at all the various actors and jobs and tasks that OSD is doing, are they properly aligned today? It was not asking do we have to do all those things in OSD. Do we have to have the same structure today? We've built up lots of things over the last several years. We've brought lots of things like operational activity into OSD. Does that need to be in OSD? I think the Secretary's asking a very different question than that study, which is why I think it's a good starting point. But we're going to have to go beyond it.

Q: .Will this study take a look at the suggestions that have been made repeatedly over the recent years to abolish the Service Secretaries?

A: The study that you're referring to does not do that. I know that the Secretary did say that, first of all, there were no boundaries as to what he felt the task force should look at. Of course the task force itself needs to put some boundaries around it because otherwise it would be too big a job. But specifically, that subject came up and he says I expect you to give me your thoughts on that.

Q: A lot of what seems to be excess that's seen in OSD, or is perceived that way, is because of duplication not within OSD, in a different branch, but because there's duplication in the service. And, you know, audits for example, or logistics, things like that. But if this is a review of OSD...?

A: Not just OSD.

Q: So it's more than that.

A: It is. There are three big features. It's look at OSD and what do we need to do with OSD. Look at defense agencies and field operating activities -- kind of the structure, the oversight comes from OSD. Finally, to look at enterprise-wide activities where we can make some reform efforts, like acquisition. You can't talk about acquisition reform without talking to the logistics people, the contracts people, contract management people, the finance people. It cuts across three different Assistant Secretaries here. So you have to look at those kind of horizontally. You have to look at them as an enterprise-wide problem, and they're supposed to be looking at that, as well. I think in the area of base operations, transportation, acquisition reform, real property management, things of that nature that are supposed to go. So yeah, we're going to be definitely looking, trying to uncover these redundancies that exist either between OSD and the Service Secretariats, Service Secretariats and field organizations. It's a very large charter that the Secretary has given to the panel. Again, we're finding ways to tackle it in the next couple of weeks.

Q: So in theory, you could come back and say we like having everything centralized in OSD. We want to get rid of the duplication in other places. This is not necessarily going to lead to a downsizing of OSD?..

A: It's theoretically possible, and I won't speak for the Secretary. He needs to tell you his view of this. But I think it is widely felt that OSD is properly a policy organization and a staff support organization for the Secretary, and that it's migrated, or it's accreted new tasks over the years -- it's actually running programs out of OSD. I think we don't think that's necessarily the best overall structure. If there is a bias, and I probably shouldn't say it that way. If there's a bias, I think it's the view that there's too much program administration and management coming out of OSD, and we really ought to return to our real role as being policy development, policy support for the Secretary, staff support for the Secretary, rather than actually running things. But I don't want to prejudge what the panel will say to the Secretary, and what he may choose to do himself. But I do know he intends to see a much leaner, more agile OSD when it's all done.

Q: Since you're looking at such a simple task, will you also be looking at things like -- oh, I don't know -- privatization, 60/40 split, all of those equally easy issues to resolve?

A: Again, the Secretary said he is not placing any boundary conditions on the task force. Those are big issues that are being debated in other venues, and I think he sees this as very much a management reform team. So when you get to something like 60/40, now we're in the realm of God and the angels. This is big, heavy duty politics. I think you can get bogged down real quick on that, and I think he really wants to try tackling some management things, first. But again, let me just tell you, he hasn't said no, but I don't think that's what he thinks of as the first priority.

Q: But it will sort of be talked about at the edges? Because I can't see if you want to do something substantive on acquisition reform or anything else...

A: What the Secretary has said was, 'I want stuff that we can do as soon as possible, and that basically means things internal to OSD and the defense agencies to start with.' That's going to be the first order of business. That's going to be the agenda, I think, for the first couple of months.

Q: Another role which hasn't been mentioned here is the relationship between OSD and the Joint Staff. One of the huge developments has been the accretion of power by the Joint Staff under Goldwater/Nichols. One has a sense that OSD in a way is struggling to match the growth in power of the Joint Staff. How does this factor into this?

A: I think Goldwater/Nichols envisioned the Chairman and the Joint Staff as being the military staff of the Secretary. So as far as the Secretary's perspective is that they are part of this review, as well. I think there is a great deal more collaboration that exists between OSD and the Joint Staff than people realize. We work very closely together. I couldn't develop a position to go up to the Hill on contingency financing, for example, without talking to J-8. So there really is a lot of collaboration. There are some things we just don't do in OSD. We don't worry about operations. We don't worry about task orders and things of this nature. So there are some things that are clearly Joint Staff alone, but I think he does intend that that be reviewed as well, and that probably is going to be streamlining. I'm sure it's going to be in a collaborative process working with the Chairman and the Vice Chairman.

Q: David Chu mentioned this morning that one of the things the panel might look at are political mechanisms for allowing some of these changes to go through I guess in an essentially non- partisan or less politicized atmosphere. Do you foresee the need for any kind of a mini-BRAC style commission to allow some of these reforms to take place?

A: We first have to sort out which are the ones where you genuinely need congressional action to be able to get it through, and there are going to be some. But one thing I found is there are a lot of things that we pretend take congressional action, and frankly, it tends to be our own regulation and our own way of doing business. We need to develop a consensus of support to back that up, but it doesn't require legislation or a BRAC-like commission. A lot of this is stepping back and saying why do we do it this way? Why do we have to do it the way we're currently doing it? I don't think that necessarily means that you've got to create another politically charged process, like a BRAC process. We are going to recommend that we have another round of BRAC review. That's going to be hard enough to convince that we need to do it. We need to demonstrate that the long term health and vitality of our modernization program rests on a contraction of our infrastructure, and members of Congress are very... This is a very hard thing for them to deal with. I understand that. I used to work there. So I don't think we're going to add yet another white hot problem in the mix right now, especially when we can do a lot of this ourselves and should be doing it ourselves.

Q: So what are your ideas on it? With or without legislation, if the Department decides to undertake full scale privatization or a larger amount of privatization and Congress comes back and...

A: Let me give you an example. The Secretary mentioned it. You know if you're going to undertake a privatization any more than 75 people, by regulation you have to go through an A76 study. A76 is a regulation that OMB publishes. It takes about two years to do an A76 study.

If, on the other hand, you say I want to think about doing business very differently, rather than having contracts and finance offices paying contracts, let's just use commercial credit cards. I can use that as a new payment mechanism and I don't have to do an A76 study and I can shrink my workforce by about 2,500 people.

So if you think about it in a very different way and you approach it as really a business practice change, you don't have to go through these politically very wrenching things. That isn't always the case.

If you want to do a direct head-to-head competition, private/public sector, you're going to have to go through A76. The A76 process, by and large, works. It's lengthy. It's kind of expensive. But the average A76 review that we've done, we've saved 20 percent. Sometimes it stays in the government and sometimes it goes out.

Q: You and Dr. Kaminski have been trying to overcome this disconnect between the acquisition side and the comptroller, your shop. Are you going to try to institutionalize this as part of this reform effort?

A: I don't know that there's really a way to institutionalize it. I think it really has to start with a close working relationship with the people at the top and communicate to your organization that it isn't tug of war, we're all supposed to be on the same end of the rope. That ain't the way we do it around here most of the time, but really, we're all supposed to be pulling in the same direction, and it really does rest on a team that views it that way. I think that was the genius of Dr. Perry in pulling together a team. I think Secretary Cohen was fortunate to inherit it, but unfortunately, a lot of these people now are going on to other dimensions of their lives, and I know the Secretary is anxious to try to build that kind of a team again. But I don't know that you can blend big organizations and have it work without there being a spirit of wanting to make it work. So no; I don't see somehow folding together the comptroller and the acquisition secretariats, personally, if that's what...

Q: You mentioned percentages a minute ago. Do you have any sort of notion from a percentage standpoint how much savings... Is there a targeted number out there?

A: I could set a high target and then we'll fail and everybody will measure me for failure; or I can set a low target and everybody will just rise to mediocrity. Don't pin us down right now. As soon as you start doing that you shape the way people look at the problem. I would rather find a way... Maybe these savings are way downstream. Maybe the savings show up as a better work process. Maybe the savings show up as clear sets of choices for the Secretary. It isn't necessarily dollars.

We have not postulated targets and we are not spec'ing some outcome from this task force to measure us by.

Q: How many people are there and how much money is spent on the administration?

A: Well...

Q: Within OSD.

A: OSD itself isn't large. OSD, it depends on how you slice it. I think in OSD directly there are about 2,000 people. Then there are the direct support activities that kind of serve as extended staff functions for OSD, that's probably another 2,000. This doesn't have the costs of OSD, we can give you this, but...

Captain Doubleday: They already have it Dr. Hamre. It's in the package.

Dr. Hamre: OSD itself isn't all that big, but we'll have... For example, in finance which is under me, we've got today about 25,000 people doing finance. With the business practice changes that we are adopting and putting into the QDR we think we'll get down to about 16,000. So we envision some very large changes in finance. I'm familiar with the finance piece. I can't speak to the other communities yet. Give us a little time to do that. We'll be back.

Q: Does this group have a chairman? Are you the chairman?

A: There are these ground rules dictated by a thing called FACA, which I can't remember what that stands for, but it's a process for advisory commissions. They have not yet had their organization session. They just met this morning. The Secretary invited as many as he could to talk to them, just to give him some sense of what he was after. They are going to be organizing themselves very quickly. I intend to be very heavily involved with them. I can't, obviously, go to every place they're going and do other things, so there will be some internal structure to the organization, but they'll do that when they have their organizing session.

Q: If you happened to change positions, would this...

A: I'm not being fired, am I? (Laughter)

Q: No. Would this panel migrate with you? Is it going to be a report to you whether you're comptroller or in some other position?

A: The charter says that it reports to the comptroller. So for the time being, as long as I'm comptroller, I'll be working with them.

Q: You just mentioned a number for finance from the QDR. There's a target there. Are there targets or are there not targets?

A: What happened during the QDR process, there was lots of internal task forces to look at things of this nature. I leaned on my community very hard and I said we're going to sign up. We're going to sign up for some big savings. So you'll see when the QDR comes out, you're going to see some fairly large cuts in the finance world and you'll see some fairly large cuts in data processing, in DISA. The other communities just were not able to kind of come forward as aggressively, and the Secretary said I know there's more in this and we're going to have to tackle it. So there are some very broad targets. But the real engineering of that is going to take place through this panel and in the program review this summer.

So it's going to be a little odd in one sense, but by the time you see it, which is when the budget rolls out, you're going to see detail all over. Right now there's detail in finance and there's detail in data processing.

Q: When you say finance, you mean DFAS?

A: DFAS, Yes.

Q: How are you dealing with the lack of a supplemental?

A: Well...

Q: Credit cards. (Laughter)

A: Well, I'm borrowing. I will say that, but it's not credit card. I'm borrowing from the 4th Quarter O&M Budget.

O&M, when it's appropriated, is fungible in very large categories. There are certain bills you're always having to pay, so we're running the day care centers and things like this. What is available is, we can borrow from our training budget in the last quarter of the fiscal year. So we have, for all practical purposes, used the last three months training budget to take care of the costs of Bosnia operations so far. We are getting very desperate.

The Senate has acted on the supplemental, and that gives us confidence that we're going to be able to get the funding.

The House had a little bit of a hiccup today. The rule governing the debate of the supplemental was voted down. I think that... It's just part of the fun of watching the legislative process. It will get straightened out here within 24 hours. I'm confident of that.

Q: (inaudible)

A: No, no, no. The thing is this. As long as you know it's coming. As long as you know the supplemental is coming, then we can continue to basically use final quarter training funds. The moment we say it's not done, then it's going to be a crisis. We'll have to literally turn off all of the training exercises at the National Training Center, things of that nature. We're not there yet because the people we work with have asked that you don't have to worry, we're going to get you a supplemental. It's taking longer than we thought and the environment is more complicated, obviously. But our committees have been very reassuring to us.

Q: The Senate Bill has a provision in it that the White House won't accept.

A: The continuing resolution?

Q: Yeah, the government never ends.

A: I love that part. I love the government never ends. (Laughter) That's an item they're discussing fairly intensively, and at circles much higher than mine. Everything I'm hearing informally, and that means people who are not in the discussions, is that there is going to be some kind of a procedural way to get it out of the way right now but still come back to it later on so we can get on with the supplemental. I really, honestly, don't think they're going to leave for the recess not having acted on the supplemental. I don't think they'll go back.

Q: The Secretary spoke of the difficulty in getting the QDR done on time, the mammoth nature of the undertaking. Did the structure you have in place add to the difficulty? And is that part of the reason we're seeing this task force created? That he felt like he needed a structure to help him resolve policy questions?

A: That's a very interesting question. I think the Secretary early on... This is a big, darn deal. We had lots and lots and lots of people in lots of places doing lots of things. I think the Secretary really made the correct choice. Ultimately his oath was to protect and defend the Constitution and he had to sort out the big things first. What are we doing about overseas presence? What are we doing about the size of our force? What kind of a threat are we going to face? Have we adequately covered the kind of emerging asymmetrical security challenges that we're looking at? Those had to be his first priority. So it became clear to him as he had time and energy, he had to make some choices. And the choices revolve around really getting it straight and solid in the area of strategy and force structure, modernization, things of that nature. Foreign policy presence, overseas presence, things like that. That had to be his first priority. He made the right choice.

What it meant was there was less time at very senior levels -- his time and the other very senior people, to delve into some of these management things, the infrastructure stuff. He said okay, I'm going to have to make some choices and I will not slow us up. We need to get some clarity on the big picture.

Probably six weeks ago I think the Secretary came to say that we're going to have to find another way to tackle this part of the job. I think that's the right choice. This piece now we'll bring into the regular budget building. The services are now going to go off, build their POM, their budget submissions and their program submissions based on the broad outlines of the strategy, the force structure choices, that sort of thing. We can now tackle these infrastructure things in the summer.

Q: But we shouldn't read into this any kind of feeling that, 'Gee, I couldn't do the kind of QDR I really wanted because we had these...'

A: I would be speaking for the Secretary, and you need to ask him that question. I've never heard him say that in private. What I have heard him say is he is satisfied that it brought forward to him the kind of choices on the big issues that he alone could wrestle with when he had to, and these second order questions -- and I don't say second order to minimize their importance, but by definition you're going to deal with your nuclear policy, your modernization strategy, your security strategy first. You should. And leave it to us finance types later on to do our little things.

Q: Can you just summarize for us again why this one is going to be different than previous reform efforts? (Laughter)

A: In a nutshell? Because I'm running it and I've got my butt on the line, okay? The Secretary has said I want something to happen. I want real things to happen. I want them to show up on the budget we submit next January. So what's going to be at least different is I feel like my performance rating's riding on this one.

Press: Thank you.

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