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Report: Pentagon Leaders Suppressed Cost-Cutting Study

A study commissioned by the Pentagon outlined how the military could save $125 billion by cutting down on bureaucratic waste. But instead of taking the study's advice, military brass ignored it.

That's according to a Dec. 5 report in The Washington Post, which cites internal Department of Defense memos and interviews with people familiar with the situation.

Not only did Pentagon leaders ignore the study, which outlined the savings over a five-year period, but they actively tried to suppress it by "imposing secrecy restrictions" on the study's data, prohibiting anyone from verifying or replicating the study's conclusions, according to The Washington Post. The Pentagon also scrubbed the study from its website, where it was briefly visible to the public.

This raises questions about why the Pentagon would bury a study that could have saved taxpayers such an enormous amount of money.

The brass was worried that if Congress found out, lawmakers would not allocate more money for military spending in subsequent budgets or would cut the DOD's funding, according to the newspaper.

The study was conducted by the Defense Business Board, a group of about 20 private sector business executives brought on to help the Pentagon operate more efficiently. The idea was to advise career military officers who don't have the business acumen or management experience and could benefit from experienced advisers.

One of the study's key findings was that the Pentagon pays more than a million people doing desk jobs -- including military members, contractors and in-house personnel -- to support 1.3 million active duty military. Most of those contractors perform "back-office jobs" and add to administrative bloat, the study's authors concluded.

The study's authors, who also included analysts from the management consulting firm McKinsey and Company, pointed out that the Pentagon spends almost one-fourth of its budget on administrative operations like human resources and accounting.

Overall, the conclusion painted a picture of an organization too heavy on the top end, plagued by inefficiencies, and unwilling to take steps to streamline bureaucracy for fear of losing negotiating strength in budget sessions.

“They’re all complaining that they don’t have any money," said Florida-based investor Robert L. Stein, the former chairman of the Defense Business Board. "We proposed a way to save a ton of money."

Overall, the Pentagon's 2016 budget is $582 billion, which accounts for about 16 percent of total federal spending, according to The Fiscal Times. That figure doesn't include government agencies that fall outside of the control of the DOD, but are still part of the country's defense apparatus, including Department of Homeland Security and domestic agencies with national security missions. Total defense spending approaches $1 trillion.

Those numbers don't include the trillions of dollars the DOD is expected to spend on operations in Iraq, Afghanistan, Syria and other places over the next several years and beyond, The Fiscal Times noted.

Deputy Defense Secretary Robert Work originally commissioned the Defense Business Board Study, framing it as a way to implement corporate best business practices and use private sector experts to help the Pentagon get leaner.

But after Work saw the results of the study, The Washington Post reported, he said the $125 billion in savings was "unrealistic."

“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.”

But in some ways, the results of the study weren't a surprise. Kenneth Klepper, a private sector executive, warned Work and the Pentagon in 2014 that they weren't going to like the results of the study. They told the board to go ahead with the study anyway.

“You are about to turn on the light in a very dark room,” Klepper told Pentagon brass. “All the crap is going to float to the surface and stink the place up.”

Sources: The Washington Post, The Fiscal Times / Photo credit: DOD photo by Master Sgt. Ken Hammond, U.S. Air Force/Wikimedia Commons

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