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The Pentagon has buried an internal study that exposed $125 billion in administrative waste in its business operations amid fears Congress would use the findings as an excuse to slash the defense budget, according to interviews and confidential memos obtained by The Washington Post.
Pentagon leaders had requested the study to help make their enormous back-office bureaucracy more efficient and reinvest any savings in combat power. But after the project documented far more wasteful spending than expected, senior defense officials moved swiftly to kill it by discrediting and suppressing the results.
The report, issued in January 2015, identified “a clear path” for the Defense Department to save $125 billion over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology.
The data showed that the Defense Department was paying a staggering number of people — 1,014,000 contractors, civilians and uniformed personnel — to fill back-office jobs far from the front lines. That workforce supports 1.3 million troops on active duty, the fewest since 1940.
So the plan was killed. The Pentagon imposed secrecy restrictions on the data making up the study, which ensured no one could replicate the findings. A 77-page summary report that had been made public was removed from a Pentagon website.
“You are about to turn on the light in a very dark room,” Kenneth Klepper, the former chief executive of Medco Health Solutions, told Work in the summer of 2014, according to two people familiar with the exchange. “All the crap is going to float to the surface and stink the place up.”
In a confidential August 2014 memo, McKinsey noted that while the Defense Department was “the world’s largest corporate enterprise,” it had never “rigorously measured” the “cost-effectiveness, speed, agility or quality” of its business operations.
Nor did the Pentagon have even a remotely accurate idea of what it was paying for those operations, which McKinsey divided into five categories: human resources; health-care management; supply chain and logistics; acquisition and procurement; and financial-flow management.
McKinsey hazarded a guess: anywhere between $75 billion and $100 billion a year, or between 15 and 20 percent of the Pentagon’s annual expenses. “No one REALLY knows,” the memo added.
The mission would be to analyze, for the first time, dozens of databases that tracked civilian and military personnel, and labor costs for defense contractors. The problem was that the databases were in the grip of the armed forces and a multitude of defense agencies. Many had fought to hide the data from outsiders and bureaucratic rivals, according to documents and interviews.
Information on contractor labor, in particular, was so cloaked in mystery that McKinsey described it as “dark matter.”
“I have to admit, with all the caution, negative reaction and pushback,” Klepper said, “I had a bit of concern at the end of the analysis some form of censorship would stop us from showing the true opportunity.”
Almost half of the Pentagon’s back-office personnel — 457,000 full-time employees — were assigned to logistics or supply-chain jobs. That alone exceeded the size of United Parcel Service’s global workforce.
The Pentagon’s purchasing bureaucracy counted 207,000 full-time workers. By itself, that would rank among the top 30 private employers in the United States.
They had long groused that the Pentagon wasted money on a layer of defense bureaucracies — known as the Fourth Estate — that were outside the control of the Army, Air Force and Navy. Military officials often felt those agencies performed duplicative services and oversight.
But the McKinsey consultants had also collected data that exposed how the military services themselves were spending princely sums to hire hordes of defense contractors.
On June 2, 2015, Navy Secretary Ray Mabus delivered a speech at the American Enterprise Institute, a conservative think tank. He complained that 20 percent of the defense budget went to the Fourth Estate — the defense agencies that provide support to the armed forces — and called it “pure overhead.”
Wunderwaffe (German pronunciation: [ˈvʊndɐˌvafə]) is German for "Wonder Weapon" and was a term assigned during World War II by the Nazi Germany propaganda ministry to a few revolutionary "super weapons".
originally posted by: JimNasium
a reply to: eisegesis
Better watch out.. If I remember correctly Rumsfeld mentioned something like this 15 years ago on Sept. 10, 2001. Then a few guys who couldn't pilot a Cessna™ Twin Seater flew a commercial airliner into The Pentagon where ALL the info was kept.
A new Department of Defense Inspector General’s report, released last week, has left Americans stunned at the jaw-dropping lack of accountability and oversight. The glaring report revealed the Pentagon couldn’t account for $6.5 trillion dollars worth of Army general fund transactions and data, according to a report by the Fiscal Times.