House proposal would eliminate DISA, 6 other agencies to save money in DoD

House Armed Services Chairman Mac Thornberry wants to take an ax to seven Defense Department agencies as part of a broader cut to save least $25 billion to reinvest back into the Pentagon.

The plan cuts DoD’s so-called “Fourth Estate” by 25 percent by 2021. The Fourth Estate is comprised of 28 agencies that are not part of a military service and employs 200,000 civilian personnel and nearly 600,000 contractors.

The Pentagon reform legislation, which Thornberry (R-Texas) introduced Tuesday as an initial step toward drafting the 2019 Defense authorization bill, completely eliminates the Defense Information Systems Agency as well as the Defense Human Resources Activity, the Defense Technical Information Center, the Office of Economic Adjustment, the Test Resource Management Center, the Defense Technology Security Administration and the Washington Headquarters Services.

Those agencies would be replicated within existing DoD agencies, where additional functions and personnel would be transferred.

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U.S. Cyber Command would absorb DISA by January 2021.

The proposal gives DoD’s newly created chief management officer until March 2020 to come up with a plan to reduce the Fourth Estate and then less than a year to implement those changes.

It’s up to the CMO to decide where the cuts happen and how many jobs will be eliminated.

“I’m going to make somebody in charge of this Fourth Estate, which is the new chief management officer who we created a couple years ago, and I’m going to expect him to find 25 percent savings over the next two years. If he doesn’t find it, we are going to do it for him,” Thornberry said during an April 17 meeting with reporters.

The intelligence community agencies are exempt from the cuts.

Thornberry said the Fourth Estate agencies need to be better integrated into DoD and to have better centralized management under the CMO.

“We’ve got to have a culture that is willing to be disruptive if we are going to defend the nation,” Thornberry said.

The chairman’s bill also requires the Defense Logistics Agency to implement a system where its customers can view items, see their delivery status and use predictive analytics to improve efficiency.

The bill requests the DLA director to reduce rates by 10 percent by 2021.

The past three defense authorization acts significantly revamped the Pentagon’s headquarters staff and acquisition system. Congress hit heavy resistance to the changes from DoD, but Thornberry said these changes are not met with the same recalcitrance.

“I’m not saying they endorse all this stuff, but I am saying we have leadership at the department that is very reform minded and we have been talking to them about what they are thinking about and what we are thinking about,” Thornberry said. “I do think we are trying to swim the same direction.”

The Government Accountability Office categorized some components of the Fourth Estate as high risk. Those include DoD contract management, financial management and supply chain.

The Fourth Estate also grew in budget over the past 10 years. For example, the Defense Contract Management Agency increased its use of contractors and the Washington Headquarters Service doubled its budget.

Thornberry also argues that the Fourth Estate can slow down decision making in the department because of their independence.

Where the money goes

Just because DoD will save at least $25 billion, it doesn’t mean that money still won’t be spent on the military.

“All of the savings and efficiency have to stay within DoD to get more capability in the hands of the warfighter faster. The surest way to torpedo this whole effort is to tell somebody, ‘The money you save I’m going to take away from you,’” Thornberry said. “If you had to summarize this whole thing from my perspective it’s, ‘Reduce the overhead to put more resources at the tip of the spear.’ That’s what this whole thing is about and it will be completely undermined if those savings are taken away from the department.”

The department was just granted a $700 billion budget for 2018 and is requesting $716 billion for 2019. DoD still has not been audited, though it plans to complete its first audit at the end of the year.