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  •   Cohen Sets Major Pentagon Overhaul

    By Bradley Graham
    Washington Post Staff Writer
    Monday, November 10, 1997; Page A01

    In a broad overhaul of the Pentagon's bureaucracy and business practices, Defense Secretary William S. Cohen plans to announce today a one-third cut in his 3,000-person office, other large reductions in employment in the Joint Staff and supporting defense agencies, and the opening of tens of thousands of additional defense jobs to competitive bids from private firms, officials said yesterday.

    Under the plan, numerous offices will be shuffled into new alignments with others, resulting in the elimination of two of 11 assistant secretary positions and the slashing of 28,000 out of 141,000 civilian jobs in the targeted organizations. Among the groups affected are the secretariats for policy, acquisition, finance, personnel and intelligence as well as agencies responsible for commissaries, security, financial accounting and information services.

    Defense officials said the changes are intended not just to save money but to focus the department better on such post-Cold War concerns as blocking the spread of nuclear weapons and guarding against terrorism in the United States. While the restructuring does not bear directly on how the Pentagon prepares for major wars, it is meant to have a wide impact on how the defense establishment does business, officials said.

    In addition to the job changes, Cohen also has decided on measures to streamline Pentagon contracting, travel planning and household goods transportation. Central to this effort will be a push to reduce the department's reliance on paper and greatly expand its use of computers. Cohen's plan, for instance, envisions a sharp rise in purchasing through electronic catalogues, a halt by next July in routine Pentagon printing of regulations and achievement within three years of entirely paper-free contracting for all major weapon systems.

    "The Pentagon is a 1960s organization heading into the next century," said a senior official involved in drafting the plans. "The structure is solid, but it certainly needs some pruning."

    The initiatives represent the next chapter in an ongoing reassessment of defense manpower and resource requirements that began last spring with the Quadrennial Defense Review, which Cohen headed soon after taking over as secretary. That effort produced only modest reductions in uniformed personnel and military units and preserved all major procurement programs. It also did little to tackle what many experts regard as the bloated bureaucracies that have sprouted under the Office of the Secretary of Defense and in 13 defense agencies that provide supplies or services common to more than one military department.

    Vowing to revamp these structures, Cohen established a separate task force staffed with outside experts who labored through the summer. Another group, internal to the Pentagon, has been working on other changes.

    The results of these efforts were merged to produce the wide assortment of job cuts, organizational changes, new business practices and intensified competitive bidding procedures to be unveiled today. While the reforms deal with only a portion of the total 760,000 civilians employed by the Defense Department – and do not shrink the military force of 1.4 million – their scope appears to exceed previous attempts to transform the Pentagon's management structure and practices.

    "I don't think there's been anything this wide-scale that's been broached before," the senior official said.

    Even with these changes and accompanying savings, Cohen has concluded that two more rounds of base closures are needed to help eliminate a projected multibillion-dollar gap between planned defense spending and military procurement plans, according to defense officials. His announcement today will include another call to shut more bases, officials said. But the same request earlier this year was rejected by Congress, whose members still are absorbing the political fallout from four previous rounds of closings.

    While declining to put a dollar figure on the savings expected from the job cuts and institutional restructuring, officials said that covering the future budget gap still will require more than another $2.5 billion a year in savings through additional infrastructure reductions such as base closings.

    The major features of the organizational reforms include:

    - Reductions of 33 percent in the number of employees in the Office of the Secretary of Defense, 29 percent in the Joint Staff, 10 percent in military headquarters, 21 percent in defense agencies and 36 percent in departmental field activities.

    - Consolidation of three agencies into a new one for monitoring compliance with treaties and managing programs aimed at controlling the spread of nuclear, biological and chemical weapons.

    - Increased National Guard participation in the Army's domestic crisis response center, which is responsible for handling terrorist threats and other military emergencies in the United States.

    - Establishment of a Defense Management Council to act as a kind of board of directors for the defense agencies, which Pentagon officials say have lacked accountability.

    - Formation of a center to manage the department's 650 energy utilities, many of which are old and in need of repair.

    - Creation of a chancellor for education and professional development to oversee the department's 30 civilian schools, many of which lack accredited programs and credential requirements for faculty.

    - Opening of 120,000 jobs – in such areas as janitorial services, payroll, personnel services and property management – to competitive bidding between government entities and private firms over the next four years.

    This last initiative – which dwarfs the number of jobs that the Pentagon has ever opened to competition under what is known as the "A-76" bidding process – promises to be among the most controversial, particularly in Congress. While top defense officials increasingly have extolled the efficiencies to be gained and money to be saved by letting private firms assume more of the Pentagon's work, congressional critics, many with military jobs in their home districts, have challenged these arguments.

    By simply subjecting more jobs to competitive bidding, defense officials said, there is no guarantee the work will go to private firms. Historically, the government has won about half such competitions. But based on this record, Cohen is banking on realizing $6.4 billion in savings between fiscal 1999 and 2003.

    Missing from the new package of reforms is any effort to address bureaucratic inefficiencies in the military service departments or the health care offices, all of which have been the subject of much criticism by management experts. Defense officials said changes in these areas remain under consideration.

    © Copyright 1997 The Washington Post Company

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