The Defense Department will struggle to significantly reduce the civilian workforce without another round of base closures.
A majority of the DoD civilians work outside of the Pentagon at bases, depots and other places that may or may not be needed any longer as the military reorganizes and shrinks.
DoD officials say civilian and contractor workforce cuts at the headquarters level across all the services, agencies and combatant command already are under way. But it’s not nearly enough.
Christine Fox, the acting deputy secretary of Defense, said Tuesday that all of these offices took a 20 percent reduction in staffing in 2014 to save about $5 billion.
While these cuts are important for both cost savings and symbolic reasons, Fox said these personnel account for only about 2 percent of DoD’s total budget.
“Until we can consolidate our infrastructure, we’d love to do some efficiencies in depots. We’ve got a whole set of proposals, and all of them will require a Base Realignment and Closure (BRAC),” Fox said during a speech at the McAleese/Credit Suisse 2015 Defense Programs Conference in Washington. “Until we get to a BRAC, our ability to significantly do more on our civilian workforce, and so much of it is not at headquarters as people think. It’s actually people doing real things. We will be constrained in how much we can bring down our civilian workforce.”
Fox said DoD would like to close about 25 percent of facilities based on their active and reserve projections over the next few years.
Robert Hale, the comptroller of the DoD, at least for a few more weeks, said with or without a BRAC, the civilian workforce will shrink.
“I think we will see continued downward trends with our civilians. It would be larger if we had BRAC authority and could close bases, because as I said, that’s where a lot of our civilians work. We are looking at reorganizations like management headquarters and others as well,” Hale said. “Frankly, some of our workload is coming down, especially in the out years as wars end. And as we get beyond the reset issues, our depots will need fewer people, and organizations like the Army and others will see a decline in their needs. You will see a decline in civilians. It would be bigger if we were allowed to get rid of some infrastructure that we don’t need.”
Different than last time
Hale added he fears if DoD can’t get rid of the workers they need to, the Pentagon will be forced to keep them and cut employees in those areas where they are needed the most.
He added DoD’s civilian workforce is about 750,000 employees, and the Pentagon expects it to come down by a few percentage points each of the next few years on its own without any help from BRAC or buyouts or reductions in force efforts.
DoD hasn’t had much luck convincing Congress that another round of BRAC is possible. As part of the Defense Authorization bill, Congress not only would not let DoD close more bases, it added a provision barring the Pentagon from even planning for another round.
But in the fiscal 2015 request going to Congress March 4, President Barack Obama is trying again. Defense officials hope a different approach to BRAC may change lawmakers’ minds.
Fox said this round of BRAC would be much different than the 2005 round in one major way.
“BRAC typically is an efficiency initiative. We have about 25 percent greater number of bases than we need for the size of the force we are moving toward. So what we’d like to do is consolidate our infrastructure to support the needs of the forces we have,” she said. “2005 did two things. It was an efficiency BRAC, but it was also a restructuring BRAC. There was a lot of restructuring and additional force. So the combination of those two things under one BRAC process put it as a separate kind of BRAC than any of the others that we experienced. It made it more expensive to get going, and the department’s ability at the time to estimate the cost of the BRAC, there were a lot of cost overruns on it.”
She said the model DoD is proposing is a straight efficiency effort. And, the 2005 effort is saving DoD about $4 billion a year today, Fox said.
The Government Accountability Office in July 2012 found DoD’s cost overruns because of BRAC were about 67 percent.
Fox says the other reason Congress may be more open to BRAC is because the workforce reductions are, in part, coming from Congress. So if DoD needs help, someone has to provide it.
Other options to close bases are available
If Congress doesn’t come through with help, Defense Secretary Chuck Hagel said yesterday at the 2015 budget roll out press conference that DoD will use any lawful means to close bases and reduce infrastructure.
“We cannot fully achieve our goals for overhead reductions without cutting unnecessary and costly infrastructure. For that reason, DoD will ask Congress for another round of base realignment and closure [BRAC] in 2017,” Hagel said. “I am mindful that Congress has not agreed to BRAC requests in the last two years. But if Congress continues to block these requests, even as they slash the overall budget, we will have to consider every tool at our disposal to further reduce infrastructure.”
In fact, DoD has the ability to close some bases under a certain size without Congress acting only needing to disapprove of the decision.
Under the statute, DoD could close an installation or realign facilities if the President certifies to Congress that such a closure or realignment must be implemented for national security or emergency reasons.
DoD is under pressure to reduce its civilian workforce and its active duty members because of the long-term budget challenges. Fox said personnel costs, including compensation and pay, account for about one-third of DoD’s $496 billion budget in 2014.
Quality of service is suffering
Hale said DoD’s budget is $31 billion lower in 2014 than it planned for in the 2012 Defense strategy. Its budget would only decrease in the out years as compared to what they planned for, and further cuts because of sequestration remains a possibility in 2016 and beyond.
Fox said DoD is taking a lighter touch this year with proposed changes to compensation and benefits.
Fox said she recently testified before Congress about compensation and related issues and tried to explain why compensation needs to be addressed.
“Quality of life of our men and women in the military is pretty high. Pay is good. Housing is high quality. Rec centers are good, and commissaries are good. They have a good quality of life. They recognize it and they like it and they should. They deserve every dime of quality of life we can give them,” Fox said. “But they also deserve good quality of service. They leave a nice house with a good paycheck and had a nice opportunity to spend some money on their families, training and education. They go to their unit, whether it’s a ship or a ground combat unit, and what do they find there? They are not able to fly. They don’t have the parts. People are short and they are picking up the slack for someone else because the manning is inadequate. There’s a real distinction drawing in our service between quality of life and quality of service.”
She said the service chiefs make a compelling case as to why they need to take some savings from personnel and put it into the quality of service. Fox said the modest proposals would bring between $25 billion and $50 billion into readiness and operations and maintenance accounts.
Fox said she may be optimistic, but she believes that message is starting to come through.
In fact, she said Hagel met with Veterans’ service organizations and military service organizations Monday to discuss this quality of life versus quality of service issues, and she said they seem to understand the challenges DoD faces.
Hale added DoD has been able to hold costs steady or only seen minimal increases over the last year, but it’s not enough as spending continues to shrink and these cost rise.