Congressional Research Service 7-5700 www.crs.gov
MEMORANDUM Revised, August 12
201
Subject:
Preliminary assessment of efficiency initiatives announced by Secretary of Defense
Gates on August 9, 2010
From: Stephen Daggett, Specialist in Defense Policy and Budgets, 202 707-7642
CRS prepared this memorandum for distribution to more than one congressional office.
On August 9, 2010, Secretary of Defense Gates announced a number of efficiency initiatives intended to
contribute to a Defense Department effort to achieve about $100 billion of savings over the next five
years. The Defense Department’s intent is not to reduce the defense “top line” budget, but, rather, to apply
any savings to finance currently planned programs. Below, in a table format, is an order-of-magnitude
analysis of amounts of money currently spent in each of the major areas Secretary Gates identified for
savings. It suggests several points.
• The largest savings appear likely to come from a 30% reduction over three years in
funding for “service support contractors.” DOD’s overview of the FY2011 budget cites
plans to reduce the number of “support service contractors” from 39% of the workforce
in FY2010 to 26% in FY2014 by in-sourcing 33,400 positions.
1
Using those figures, the
service support contractor workforce in FY2010 totals about 100,200. Annual reductions
of 10% would entail eliminating about 10,000 positions each year. Assuming $120,000
per position per year, and assuming the reductions are phased in at a steady rate over the
course of each year, savings would equal about $600 million in FY2011, $1.8 billion in
FY2011, $3.0 billion in FY2012, and $3.6 billion per year in subsequent years. As an
aside, the total workforce, by that calculus is about 257,000, so eliminating 30,000 jobs
would reduce the workforce by about 12%.
• The amount that might be saved from information technology (IT) consolidation is hard
to estimate, even roughly, with available information.
• Savings of about $2.4 billion a year might be obtained from cutting in half the increase
since 2000 in personnel in the Office of the Secretary of Defense (OSD), combatant
commands (COCOMs), and defense agencies. A Defense Business Board (DBB)
briefing of June 2010 shows an increase in those organizations of about 40,000
1
Department of Defense, Overview: FY2011 Defense Budget, February 2010, on line at:
http://comptroller.defense.gov/defbudget/fy2011/FY2011_Budget_Request_Overview_Book.pdf. I am indebted to my colleague,
Amy Belasco, for pointing out these figures.
