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Pentagon Buried Study That Revealed $125B In Waste

A Department of Defense study that found $125 billion in administrative waste at the Pentagon was allegedly buried so Congress would not cut defense spending.

By reviewing confidential memos and performing interviews, The Washington Post uncovered the study Pentagon leaders requested to increase efficiency and reinvest any savings in defense.

The report was issued in 2015 by the Defense Business Board, a federal advisory panel, and found a “clear path” for the DOD to save $125 billion over five years.

Nearly one-fourth of the Pentagon’s $580 billion budget was going toward overhead and core business operations, such as accounting, human resources, logistics and property management, the report found.

The Pentagon would not have had to perform layoffs of civil servants or reduce military personnel to meet the $125 billion savings goal, but would have had to streamline staff through attrition and early retirement, cut high-priced contractors and use information technology more efficiently.

The study called for using the administrative savings for troops and weapons, or allocating a large portion to the bill that would rebuild the nation’s aging nuclear arsenal. It also suggested using the funds for operating expenses of 50 Army brigades.

Pentagon leaders did not want to disclose how much waste was occurring, as it might undermine their public assertions that budget cuts had left the armed forces in need of funding, and result in further cuts to defense spending. So, they put an end to the plan to cut expenses and imposed secrecy restrictions on the data that the study was drawn from so no one could replicate its findings.

A 77-page summary of the report that had been made public was removed from a Pentagon website.

“They’re all complaining that they don’t have any money. We proposed a way to save a ton of money,” Robert “Bobby” L. Stein, a private equity investor from Jacksonville, Florida, who served as chairman of the Defense Business Board, said.

Stein said it was a travesty that the Pentagon chose to suppress the study’s results.

“We’re going to be in peril because we’re spending dollars like it doesn’t matter,” he added.

Deputy Defense Secretary Robert O. Work, the Pentagon’s second-highest ranking official, ordered the report be completed, but changed his position of wanting to make the Pentagon more efficient after it was submitted for review.

He said the $125 billion in savings was “unrealistic” and that the Defense Business Board failed to understand basic obstacles that occur when restructuring in the public sector. 

“There is this meme that we’re some bloated, giant organization,” Work said. “Although there is a little bit of truth in that ... I think it vastly overstates what’s really going on.”

Work said the DOD is adopting some of the study’s recommendations and estimates a savings of $30 billion by 2020.

“We will never be as efficient as a commercial organization,” he said. “We’re the largest bureaucracy in the world. There’s going to be some inherent inefficiencies in that.”

President-elect Donald Trump said he wants to slash the bureaucracy and duplication at the Pentagon and use the savings to boost weapons spending, according to Bloomberg.

Mackenzie Eaglen, a defense analyst with the American Enterprise Institute who has briefed Trump’s advisers, does not think his plan will work.

“It’s a fantasy,” she said.

“I tried several times to disabuse them of the notion that this could ever pay for even a fraction of Trump’s buildup costs,” Eaglen said of her time with Trump’s advisers.

On the campaign trail, Trump said his “administration will lead a free world that is properly armed and funded, and funded beautifully.”

He proposed increasing the Army to 540,000 soldiers from about 475,000, and to “build a Navy approaching 350 surface ships and submarines.” His plans go against current downsizing efforts by President Barack Obama.

Trump’s military increases would add $55 billion to $80 billion annually to a 2016 military spending request that totals $583 billion, according to Eaglen.

Trump plans to find ways to fund the rebuilding of the country’s national defense by “conducting a full audit of the Pentagon, eliminating incorrect payments, reducing duplicative bureaucracy, collecting unpaid taxes and ending unwanted and unauthorized federal programs.”

Eaglen states that his pursuits may be well-intentioned but, “cannot yield $55 to $60 billion per year in new money to reinvest -- period.”

Sources: The Washington Post, Bloomberg / Photo credit: David B. Gleason/Flickr

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