The Department of Defense holds the distinction of enjoying the highest annual budget of any federal agency, while also being the only one to have never passed an audit. Decades of reports detailing wasteful defense spending have demonstrated that this is a dangerous combination.
In an effort to get the Pentagon’s business operations in order, members of Congress in fiscal 2018 created the role of chief management officer. Elevated to the third-highest civilian position at the Pentagon from its previous, ineffective deputy secretary level, the CMO is tasked with improving efficiency and locating savings in the “fourth estate,” which is made up of DoD support services that are not part of the military branches. The portfolio includes the Office of the Secretary of Defense, the Joint Staff, and agencies that perform tasks related to intelligence, logistics, accounting and contract management. The fourth estate employs approximately 380,000 individuals and has an annual budget of more than $100 billion.
Confirmed to the position on Dec. 19, 2019, CMO Lisa Hershman has found a target-rich environment. In a Feb. 10, 2020, interview with Defense News, Ms. Hershman stated that the DOD is spending vast sums to stock its commissary system with items that are of limited interest to customers. Of the 1.4 million items carried, nearly 1 million produce less than $1,000 in revenue each year, including 23 brands of apple juice.
Efforts to find efficiencies across the fourth estate have already paid dividends. The CMO has claimed to have identified $22.3 billion in savings between FY18 and FY21. These savings are being reinvested in war fighting, enhancing the ability of the DoD to perform its core function.
Taming the bureaucratic beast has always been and will continue to be a challenge because of institutional inertia, contractor resistance and the Pentagon’s benefactors in Congress.
In fact, just three years after touting its creation and despite its success, legislators have taken steps to unwind the CMO position. The Senate version of the FY21 National Defense Authorization Act would require the CMO office to be disbanded by Sept. 30, 2022, with most of the authorities transferred to the deputy defense secretary. The House NDAA would eliminate the CMO office within 30 days of enactment, and enable the secretary of defense to choose where to transfer the role.
Even House Armed Services Committee ranking member Rep. Mac Thornberry, R-Texas, who in the past had championed institutional reform at the Pentagon, now supports eliminating the CMO position.
In a July 9, 2020, Defense News interview, Ms. Hershman said any demotion of the CMO role would represent a “guaranteed failure” in the effort to make fundamental changes in how the Pentagon does business and show that Congress is not serious about reform.
During a July 10, 2020, Facebook Live broadcast with Citizens Against Government Waste President Tom Schatz, Ms. Hershman stated: “It’s not about me personally, I knew I was going to be here for a temporary amount of time,” but keeping the status quo at the CMO office is necessary “to make sure we’ve hit that tipping point and are creating game-changing results.”
And on top of the examples of wasteful spending she provided in the Defense News interviews, Ms. Hershman said that her office had found 31 contracts for orange juice in one agency with only two vendors.
Instead of undermining the CMO by assigning it a position of less authority, Congress should support efforts to strengthen and institutionalize the office. The role requires more time and resources to train staff, track implementation of its recommendations and become incorporated into the culture of the DoD.
A March 14, 2019, Government Accountability Office report concurred with this assessment. The report recommended providing a chartering directive to address the manner in which “the CMO’s authorities should be operationalized.” The GAO also noted the current lack of clarity in the CMO’s ability to direct military departments on business reform issues, especially in the event of disagreement between parties. Crucially, the DoD agreed with the GAO’s appraisal and recommendations.
Members of Congress, particularly those who claim to strongly back the DoD, should fully support the CMO, especially since the savings enhance national security. Killing the CMO position will snuff out one of the few prospects for sorely needed institutional reform within the Pentagon.
Sean Kennedy is the director of policy and research for Citizens Against Government Waste.
