Secretary Gates yesterday announced a wide ranging plan to achieve the $100 billion savings goal he called for in June to support force structure and proceed with modernization.  To reach this goal, Gates said in a news conference that the Pentagon would shut down some high profile DoD organizations, reduce the number of senior military and civilian personnel, cut back on contracting, and make other overhead reductions.  These actions, if implemented, will result in the loss of thousands of civilian and contractor jobs.  The Secretary said that the “department must start setting priorities, making real trade-offs, and separating appetites from real requirements.”  ADM Mike Mullen, CJCS, issued a press statement supporting Secretary Gates’ initiatives.

The Secretary directed the closure of the Business Transformation Agency (BTA), the Office of the Assistant Secretary for Networks and Information Integration (NII), and the J-6 (Command, Control, Communications, and Computer Systems) organizations, and will recommend to the president shutting down the Joint Forces Command (JFCOM).  Gates said that the “operational functions of these organizations will be assigned to other organizations, and most of their acquisition functions will transfer to acquisition, technology, and logistics.”  In the case of BTA, which employs 340 people and has a budget of $340 million, he noted the agency “has shifted more of its focus to day-to-day oversight of individual acquisition programs, a function that can be performed by a number of other organizations.”  On the closing of NII and J-6, the Secretary said that the efforts of these organizations have “become redundant, costly, and cumbersome.”  Gates stated that JFCOM was established to “compel jointness” for training, doctrine, and operations throughout the military.  He acknowledged that joint training doctrine is still important, but that the success of “jointness” has negated the need for the extra layer of bureaucracy that includes 2,800 people, about 3,000 contractors, and has an annual budget of $240 million.  The Secretary said that DoD would provide assistance to the employees affected by these closings.

Gates ordered the freezing of employment levels in the Office of the Secretary of Defense (OSD), Defense Agencies, and combatant commands at the 2010 levels.  No additional full-time positions will be allowed to fulfill planned increases, including increases in the acquisition workforce.  He also ordered freezing the number of senior military and civilian personnel (including political appointed staff) at the 2010 levels and has appointed a task force to review senior staffing requirements.  Gates pointed out that since 2001, the number of general and flag officers has increased by more than 100 (40 of whom are four-stars) and SES positions grew by over 300.  He expects this review to result in a cut of at least 50 general/flag officers and 150 SES positions over the next two years.

The Secretary ordered a 10 pecent reduction in contractor funding in each  year for the next three years.  Although the FY2011 budget plan calls for the reduction of 33,000 support contractors by 2015, the Secretary expressed dissatisfaction with the progress in meeting this goal and ordered an acceleration of effort.  But, this will not necessarily lead to replacement by civilian personnel.  Gates said “we will no longer replace departing contractors with full-time personnel.”  For the insourcing initiative, Gates said this means that “other than the planned changes in FY’10, no more full-time positions in these organizations will be created after this year to replace contractors.”

In a move that breaks from past actions to achieve efficiencies, Secretary Gates directed a 10 percent cut in funding for intelligence advisory and assistance contracts.  Gates said he wanted to end needless duplication of Intel efforts, and ordered a review of all the department’s intelligence missions, organizations and contracts.  

In other actions, Gates ordered the military services to consider base closings and consolidations in their budget plans, called for economies of scale in IT operations, and ordered a review of DoD-prepared reports and DoD-sponsored boards and commissions.  He pointed out that IT bureaucracies had proliferated across DoD and directed organizations to consolidate all IT assets and wherever possible to use common IT functions.  To reduce the number of reports the agency prepares, Gates ordered a freeze in the number of DoD-required oversight reports and a 25 percent cut in funding for advisory studies.  He noted that more than 1,000 contractors work on producing over 700 reports.  Under the new order, all reports will require a statement identifying the cost of producing it.  He also directed a review of all outside boards and commissions (65 in OSD alone) to determine which are redundant and unnecessary and he ordered a 25 percent reduction in overall funding for those that are retained.  Secretary Gates said that he expects to see some results from all of these efforts within 120 days.