How can the military become more fiscally responsible?

LTJG Private RallyPoint Member — Fri, 16 Oct 2015 17:49:36 -0400

I had a discussion today with a friend where I vented about wasteful spending. I have a major issue with the processes and procedures that lead to huge wastes of taxpayer money. With our national deficit through the roof and our budgets restrained, our management of spending is now more important than ever. What areas can we improve upon to maximize the resources we are given? If anyone can show the break down of where the spending goes, I would love to see it.

Response by 1stSgt Private RallyPoint Member made Oct 16 at 2015 6:03 PM

1stSgt Private RallyPoint Member — Fri, 16 Oct 2015 18:03:02 -0400

I think we have no choice. War spending is over.

Response by LCDR Rabbah Rona Matlow made Oct 16 at 2015 6:20 PM

LCDR Rabbah Rona Matlow — Fri, 16 Oct 2015 18:20:49 -0400

The people in the Puzzle palace, fueled by CONgresspeople bought by lobbyists, keep buying bad acquisition programs that the military doesn't want or need, and good programs are shredded. So we have the F22 and the LCS, but only 3 Elmo Zumwalt Destroyers (oh and the Elmo's were designed to protect the LCS which are limited in self defense capabilities...)

Then there are the corrupt contracting officers such as what happened in the Pacific, and horribly inefficient Defense Contractors and Shipyards that have huge delays and cost over-runs on most of their programs. The DOD pays for the overages, instead of charging the contractors penalties. Of course a lot of that comes from constant change orders and redesigns on the part of DOD...

I'm not a contracting officer or an Engineering Duty Officer, and I don't have a Wharton MBA, but I can see all this - why can't DOD and CONgress?

Response by A1C Charles D Wilson made Oct 16 at 2015 7:51 PM

A1C Charles D Wilson — Fri, 16 Oct 2015 19:51:58 -0400

This is a thing that needs to be reset. A lot of the budget is under cover so to speak. Hammers at that price just funds secret weapons and science to build such weapons while .50 cents of the hammers cost is the cost. A lot of the budget feeds the brains and material we need for future weapons and technology. Lets just say. a new car today may cost $10,000 to build in materials but would cost you $25,000 to purchase before you have it financed. This money goes to designs and retirement plans (Union). The same process works to fund military technology without retirement benefits. I would love to know the true cost of the F-22 or F-35 without all the hidden cost. To me a company should charge the minimum to build due to it being to keep them safe and secure.

Just my 2 cents on this.

Chuck D

Response by Maj William Gambrell made Oct 16 at 2015 8:00 PM

Maj William Gambrell — Fri, 16 Oct 2015 20:00:55 -0400

LTJG Cowart...to answer your question, the military has eliminated many mil standards, which is why we spent so much money on stupid items. The program offices can request a waiver on current standards still in existence. You won't see 500 toilet seats anymore. That was an old argument by politicians in the past.

Response by PV2 Scott Goodpasture made Oct 16 at 2015 10:23 PM

PV2 Scott Goodpasture — Fri, 16 Oct 2015 22:23:02 -0400

Already getting better according to the cartoon. When I enlisted a hammer was $700.00

Response by MCPO Roger Collins made Oct 16 at 2015 10:58 PM

MCPO Roger Collins — Fri, 16 Oct 2015 22:58:06 -0400

A simple google search would answer your questions, Here is a good place to start. http://cagw.org/reporting/pig-book
The Abrahams tank program, bio-fuels, grants, school systems in the CONUS, when public schools are available, for a few starters.

Congressional Pig Book | Citizens Against Government Waste

The Congressional Pig Book is CAGW's annual compilation of the pork-barrel projects in the federal budget. A "pork" project is a line-item in an appropriations bill that designates tax dollars for a specific purpose in circumvention of established budgetary procedures. To qualify as pork, a project must meet one of seven criteria that were developed in 1991 by CAGW and the Congressional Porkbusters Coalition.

Response by PO2 Steven Erickson made Oct 17 at 2015 11:47 AM

PO2 Steven Erickson — Sat, 17 Oct 2015 11:47:32 -0400

Make contractors EAT the overruns that are NOT directly caused by changes to specifications provided by the military.

In my consulting world, that's the standard for us. If SCOPE OF WORK (SOW) is changed by the client, then we get more (or less) money in the budget. If no change in SOW, we better get the work done on budget, or we EAT the loss. I can guarantee that the Ford-Class would NOT cost $13 billion each if the shipyards were eating the overruns.

Simple... on paper... impossible with lobbyists and - as LCDR Rabbi Jaron Matlow stated - CONgress.

But ANY step in that direction would be an improvement.

Response by PO1 Glenn Boucher made Oct 17 at 2015 1:38 PM

PO1 Glenn Boucher — Sat, 17 Oct 2015 13:38:41 -0400

The only way to control the budget is to stick to it.
Why if a contractor is over budget do we pay more, the agreed price for example is $10 million and this is what the contractor said it will cost to do everything. So once the contractor goes over $10 million its on the contractor to make up the deficit not the taxpayers.
If a contractor says that it will take 8 months to complete a project then once your at 8 months and 1 day the contractor should not receive one more cent and should actually be fined for each day that they go over the agreed contract, the only exceptions would be unavoidable acts of nature such as earthquakes, hurricanes / typhoons or things of that nature.
Our government seems to have no problem overpaying for a contractor to perform duties that should be done for half the cost or in half the time and once it goes over budget and over time, Uncle Sam just opens up the check book and gives away blank checks.
Until we can control the corruption from our elected leaders we will never see a budget being adhered to.

Response by LT Carl Martin made Oct 18 at 2015 10:13 AM

LT Carl Martin — Sun, 18 Oct 2015 10:13:30 -0400

I think the question and the responses provided are out of sync. How can the military become more fiscally responsible? Think about it. The military, the operators, the point end of the spear are as fiscally responsible as possible. They operate given the budget they have within the parameters, or ground rules they are held accountable toward. They provide feedback on our weapon systems, publications, training. For the most part they perform as expected. It's our DoD acquisition system and the administration's inability to pass a budget that impacts our procurement programs the most, thus driving up costs and delay in schedules. Aircraft programs go on for years before we see the first aircraft in the fleet. The majority of the aircraft are built with leading edge technology that takes time and effort to flush out all the capabilities. Many times what the government buys turns out to be hard to achieve thus requiring more investment to solve in order to field a safe and reliable item. Not having an approved budget each year delays the start of new contracts which cost additional money later on in the development. The administration and Congress changing the plan of quantity of items to be procured, drives up procurement costs, drives off sets in supply chain requirements. For the most part contractors do their best to deliver their products as the contract requires. Otherwise, they would not be in this business. However, I believe the government needs to take charge and ownership of the procurement process and stop relying on the contractor to do everything. The government needs to act as the Prime System Integrator (PSI) vice relying on contractor to do so. More organic repair capability needs to be developed, more technical data needs to be procured, the job of obsolescence management (DMSMS) needs to be lead by the government and not the contractor. I base my comments on my experience of over 20 years military service, 10 years as a defense contractor and the last 9 years as a government employee in acquisition management, specifically sustainment.

Response by MAJ Ken Landgren made Oct 18 at 2015 1:52 PM

MAJ Ken Landgren — Sun, 18 Oct 2015 13:52:46 -0400

Response by MAJ Ken Landgren made Oct 18 at 2015 2:07 PM

MAJ Ken Landgren — Sun, 18 Oct 2015 14:07:09 -0400

Construction costs can get out of hand (1.4 billion dollar VA Center), production estimates can be inaccurate (F-35). Wars are super expensive, and of course we have many people who disregard rules and regulations to obtain ill gotten benefits.

Response by LTC Ed Ross made Oct 18 at 2015 3:16 PM

LTC Ed Ross — Sun, 18 Oct 2015 15:16:03 -0400

Lots of good observations here, but it all boils down to one three-headed problem. War fighters chase ultimate capabilities. Defense industry chases ultimate profits. Members of Congress chase votes. In our capitalistic society we are never going to change that. What we can do is chose top level leaders in the department of defense who chase the optimum, not the ultimate.

Response by 1LT Private RallyPoint Member made Oct 19 at 2015 1:42 AM

1LT Private RallyPoint Member — Mon, 19 Oct 2015 01:42:06 -0400

The easiest way ( and most unpopular) is to cut pensions and save a third of our budget. We literally could keep our capabilities. A lot of companies cut their pension programs after the Financial Accounting Standards Board forced disclosure of Pension expense for corporate financial statements. I don't see why the federal government is any special.

Another unpopular way is to change PPBEs. The joint chiefs, combatant commanders,Council of Colonels all sit around an ouija board to predict the future threats. They shoot it down to a bunch of bean counters who cost and program it. Then, they go beg to congress for money. The DoD plans their expenses and gets revenues. But if you reverse it and plan from revenues then you have more pressure to scrutinize all your programs.

Today, the ongoing way since the 90s is FIAR or financial improvement and audit readiness. It includes a bunch of mandatory training, ERP development, and "cost culture " initiatives from a bunch of management consultants at the pentagon. I'm not exactly sure how effective it is if DoD keep doing the same thing we did in the 60s. But, the DoD is more damned if they did not do it. Believe it or not, their DoD fantasy is all the S-4s , bean counters, and commanders doing Cost Benefit Analysis, variance analysis, and balanced scorecards. Don't laugh.

Finally, this is a stretch but you could hold the DoD more accountable by expanding the definition of fraud. Common law says fraud needs intent, damages, and reliance against material false statement. Some courts have translated breach of fiduciary duty as fraud. Well, in government who suffers damages when there is cost overrun? nobody. What if a competing program could press charges against another program for something that had less cost benefit? You count that as damages and file an injunction against the manager. Accountants joke that they would get arrested if they did stuff in government for a corporation. Why not change it and let everyone get arrested?

Response by PO2 Angelika Laist made Oct 19 at 2015 4:44 PM

PO2 Angelika Laist — Mon, 19 Oct 2015 16:44:57 -0400

OMG, don't even get me started! Having worked in logistics for 14 years let me see all the waste! It's disgusting and irresponsible!
First off, the end of the fiscal year spending needs to stop. " To get a bigger budget next year" is an excuse that is long overdue to be thrown in the trash! Repairable items need to be properly cleaned, packaged and brought to facilities that either recycle them or repair them. I have seen too much stuff being thrown overboard. Carriers not so much, but the small Navy does that a lot. As if our waters weren't polluted enough! Repairable funding should be openly available, but since people don't like to do their maintenance and just fix stuff when it breaks, they need grants on a whim. Everything could be better scheduled if it wasn't Jerry-rigged so much. Hazardous Materials are over-bought because forecasting reports are not being worked, painting should be scheduled to keep proper amounts of paint on-board. painting the whole ship in 2 days because the Admiral may come to visit does not constitute for a bigger paint budget. The list goes on..............

Response by MSG Tim Gray made Oct 19 at 2015 4:49 PM

MSG Tim Gray — Mon, 19 Oct 2015 16:49:23 -0400

I think I know one way we could put a dent in wasteful spending. Organizations are allocated funding based off of previous FY spending. I saw so many commands spending every last penny they had in their accounts to guarantee like funding in the upcoming FY. Top that and you save a lot of taxpayer dollars. Why should a unit spend 1500 bucks for a sidewalk artist to draw a unit picture on a public street?

Response by SSgt Private RallyPoint Member made Oct 19 at 2015 5:17 PM

SSgt Private RallyPoint Member — Mon, 19 Oct 2015 17:17:25 -0400

Get rid of the mandate to purchase from certain places such as "GSA Advantage" and "Lighthouse for the Blind" which charge 5x as much for the exact same product and take months to arrive. Perfect example: A while back, I was in charge of the computers in my squadron and had a shop that needed a new printer. The requester chose one from BestBuy that cost $250, and could have been picked up that day. It was shot down because "BestBuy" isn't one of the "authorized" places to purchase printers from. We ended up getting the exact same printer from the cheapest "authorized" place, spent over $2,000 and waited 3 months for it to arrive. Once it arrived, we discovered it was refurbished, and didn't even come with the cables. We had to purchase those separately, for another $200, and wait for them to arrive.

This crap happens all the time. I realize this isn't as much money as the waste on planes and buildings.... but it does add up, and quickly.

Response by SPC David S. made Oct 19 at 2015 6:21 PM

SPC David S. — Mon, 19 Oct 2015 18:21:47 -0400

Part of the problem is that the Defense Department takes on Congressional and in some cases Presidential obligations without having a win strategy. I present this as the majority of the military's budget is spent in three areas - operations, personal and weapons procurement. By not having a complete plan with a never ending exit strategy from a project management perspective there are going to serious delays and over runs do to the mismanagement. Imagine that the military was ordered to build a building - yet they are giving no budget or blueprint. Yet the foreman - the Pentagon - goes ahead and breaks ground and just starts building.

In that environment it would be impossible to monitor the progress using any project management tools such as the S-curve. There are no due dates, no monetary values assigned in the work breakdown structure and worst of all no defined deliverables. The Pentagon is to blame for not demanding a clear objective from congress - win the war, nation building or support. However as Congress writes the checks as well as sign off on promotions I really don't see senior leaders pressing the Congress for defined objectives.

Response by MAJ Ken Landgren made Nov 19 at 2015 4:12 PM

MAJ Ken Landgren — Thu, 19 Nov 2015 16:12:06 -0500

The cardinal rules to budgeting is Purpose, Time, and Amount. A general wanted a runway but was told no. He then had a large sidewalk constructed for planes. He hid the purpose, and was kicked out of the Army. Time means when should the bill be paid over a few fiscal years. Amount seems to be the big sin. The F-35 and VA construction are perfect examples of being over budget. Contract officers should monitor their programs and raise red flags. That being said, the bigger the contract the more political it becomes.