“While the output has declined, the bureaucracy at the DOD [Department of Defense] has increased. There is enormous waste. Let me give you an example that was reported to me by former secretary of the Navy John Lehman. During World War II we built 1,000 ships a year. And there were 1,000 people in the Bureau of Ships. That's the purchasing department, if you will. In the 1980s we built 17 ships per year, and we had 4,000 people in purchasing. Today we build nine ships a year. Guess how many people are in purchasing? Twenty-five thousand people.”
--Former Mass. Gov. Mitt Romney, Aug. 30, 2011
In his speech to the Veterans of Foreign Wars last week, Romney told a story that was so good that it just cried out for checking.
He repeated a set of statistics that John Lehman, Navy secretary during the Reagan administration, has mentioned in speeches. Lehman’s point has been echoed by others, including mostly recently former Sen. Jim Talent (R-Mo.). In testimony before the House Budget Committee in July, Talent quoted at length from one of Lehman’s speeches on the subject.
Certainly, the issue of Pentagon bloat and inefficiency is an important one, especially as lawmakers seek to trim hundreds of billions of dollars from the budget. But our eyebrows went up when we heard Romney tell this story, in part because it already is a stretch to compare ships made 60 years ago with the modern battleships of today. The U.S. population has more than doubled since then, while technology and complex systems have vastly improved.
Let’s check the numbers.
Lehman quickly got on the phone to explain how he had developed these statistics. He emphasized that “this is not a partisan issue” at all and that the current undersecretary of defense for acquisition, Ashton B. Carter, “really gets it” and is trying to deal with the problem of bloat. Carter was recently nominated to be deputy secretary, largely because of his skill at finding budget savings.
Lehman said that according to the Navy’s history division, the Bureau of Ships (which after 1966 was folded into Naval Sea Systems Command, or NAVSEA) had 1000 billets at the end of World War II. He said he obtained the number of 4,000 people in the 1980s from “the Commander of NAVSEA when we were in the process of abolishing the Naval Materiel Command, another growing layer of bureaucracy.”
As for the current figure of 25,000, that is “the best estimate given to me by NAVSEA officials counting all FTEs, full time equivalents, including contractors supporting internal functions, and all support groups inside the Beltway reporting to NAVSEA. The largest growth from 4,000 to 25,000 took place during the G.W. Bush administration.”
Lehman said that he did not include in the ship figures for World War II the the “many thousands of Higgins boats, PT boats and other ‘small boys’ in Navy parlance.” The growth of the Navy during this period is easily checked on a Navy historical Web site, and it certainly was impressive.
Lehman’s figures for the number of ships built in the 1980s and today appear roughly correct. Romney updated the current ship figures for his speech by relying on a Congressional Budget Office report. Even so, there’s a big difference in ships today compared to decades ago.
The big problem is the personnel numbers. They just don’t seem to be apples to apples.
NAVSEA officials could not confirm the 4,000 figure from the 1980s—the statistic appears to be buried somewhere in the National Archives—but spokesman Christopher G. Johnson said that “fewer than 500 people are directly involved in contract negotiation or program management related to U.S. Navy shipbuilding at the Naval Sea Systems Command .” (Note that Romney had referred to “the purchasing department, if you will.”)
There is a major unit in the department, known as NAVSEA 02, that oversees shipbuilding contracts and the naval shipyards, including design, repair and maintenance of ships and weapons systems. According to an independent examination of the contract management processes in the unit, about 1,150 people work in that department. There are also 25,000 people who work in the shipyards, but Lehman was not referring to that.
This is how NAVSEA spokesman Johnson explained why it is difficult to make these comparisons across the decades.
Today, NAVSEA is responsible not just for shipbuilding, but for ship and submarine maintenance, modernization and disposal (a huge section of our portfolio), weapons systems acquisition, unmanned maritime vehicle development, small arms development and procurement, special warfare systems, counter-IED systems, diving and salvage, foreign military sales, ship museum donations, basic and advanced R&D, and a host of other things that I would expect BuShips didn't do.
Unfortunately, we just don't have a way to look at historical employment levels in a way that would answer your question accurately. However -- and I say this not to argue with Mr. Lehman -- at the most, NAVSEA only employs approximately 3,000 at our headquarters facility in Washington, D.C. That includes all of the people here who are not in any way involved in shipbuilding. We do have a research facility inside the beltway (West Bethesda), and they employ approx 3,200, but they're not responsible for shipbuilding either. I wish I could help you more with hard employment figures. We just don't maintain those types of records.
Again, it's nearly impossible to compare the numbers of people required to manage shipbuilding programs from different time periods. I couldn't say definitively, but I would be willing to hazard that it takes more people to design and manage a stealth aircraft program than it took to manage the prop aircraft programs from WWII, but you wouldn't say that the stealth aircraft managers are inherently less efficient. Modern systems are just orders-of-magnitude more complex.
In the interest of fairness, we provide Lehman’s reaction:
This honest response is a good illustration of the complexity of the issue. The metrics are simply not available in one place. Also there has been fifty years of reorganizations where offices, bureaus and functions have been repeatedly moved around in and out of the headquarters, from one bureau to another. There used to be bureaus of ships, of navigation, of materiel and of ordinance. Now there are “systems commands” of Sea, Air, and Space and Warfare. Still others migrated from Navy to DoD independent agencies like Defense Logistics Agency.
All I can tell you is that I have been focused on this issue since 1983, and my best judgment on an apples to apples basis is in the numbers I gave you. As the DBB study I forwarded to you shows, Defense bureaucracy has grown to 750,000 souls. To suggest that NAVSEA has been immune from this Defense-wide bloat would be naive.
The Defense Business Board study that Lehman provided is indeed very interesting, and worth reading.
The Pinocchio Test
Romney probably should have done some checking before he repeated these statistics in a major speech. Lehman clearly thinks he is correct, but the 25,000 figure seems to be a real stretch, especially when Romney calls them the equivalent of the “purchasing department.” We can revise this ruling if we receive evidence that there are indeed more than 24,000 or so contractors who support the 500 people in the building doing the purchasing.