ARLINGTON, Va. (Army News Service, June 4, 2015) – The Department of Defense, or DOD, spends more on services than it does on purchasing weapons and equipment, said Alan Estevez, and he would like to see efficiencies in service contracts save the department as much as $15 billion.
Estevez, principal deputy undersecretary of defense for acquisition, technology and logistics, provided the closing address, June 3, during the Association of the United States Army’s Institute of Land Warfare-sponsored Hot Topics conference on sustainment.
That $15 billion represents a 10 percent savings over what the department spends now for services, Estevez said. Last year DOD spent $155 billion on services, about $10 billion more than the $145 billion it spent purchasing equipment like fighter jets and Stryker vehicles.
“I’m not saying that we don’t need to be buying these services,” he said. “We just need to be buying smart.”
The military buys service contracts for, among other things, technical engineering, health care, shipping of materiel, and maintenance for tactical vehicles.
Estevez said when a new weapons system is acquired, the military spends years planning, designing, testing and analyzing the program to find cost-saving efficiencies. Not nearly as much analysis or planning occurs in advance of the military letting a billion-dollar contract for shipping privately-operated vehicles, he said. But that planning needs to happen to save taxpayer dollars.
Such service contracts, he said, ought to be studied by design engineers with an eye toward efficiencies. Dollars saved on services can then be put to good use by combatant commanders, he said, especially during a time of diminishing budgets.
The Joint Theater Support Contracting Command is now realizing efficiencies in Afghanistan and across the Central Command area of responsibility, said Marine Corps Lt. Gen. Robert Ruark, director of logistics, J-4, for the Joint Staff.
He said other combatant commanders could easily set up such a contracting command.
Ruark, who spoke earlier in the afternoon, suggested that efficiencies could be found through joint working groups and boards.
The Joint Transportation Board, for instance, set priorities for movement following the 9/11 terrorist attacks, but has not been used much since. Ruark said it is time to bring it back to the forefront.
“Outcome of the last four tier-one JCS [Joint Chiefs of Staff] exercises … we need to start doing this again,” he said.
The Joint Logistics Coordination Board is another “tool in the kit bag” that combatant commanders can benefit from and it should be used more often, Ruark said. Such boards could provide enhanced synchronization, he said.
ARMY OPERATING CONCEPT
The Army Operating Concept, or AOC, recognizes that U.S. military power is joint power, said Maj. Gen. William Hix, director of strategy, plans and policy for the Army G-3/5/7.
The AOC emphasizes that future operations will include interagency cooperation, Hix said, and added that all elements of national power must be brought into the mix.
“The world is rapidly changing … and we must change with it,” Hix said. He talked about the “velocity of instability” throughout the world when even non-state actors are gaining access to lethal technology.
Such a time requires a new look at how the U.S. Army projects and sustains power, Hix said.
“Sustainment is not only an Army core competency – it is a competitive advantage,” he said. It is a competency, which many armies throughout the world do not have, Hix said, and one the U.S. Army should use to its full advantage.