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DoD's efficiency maven sets a big agenda

Jun. 9, 2011 - 04:03PM   |  
By SEAN REILLY   |   Comments
Elizabeth McGrath, the Defense Department's deputy chief management officer, speaks June 6 during a Federal Tomes editorial board meeting.
Elizabeth McGrath, the Defense Department's deputy chief management officer, speaks June 6 during a Federal Tomes editorial board meeting. (Chris Maddaloni / Staff)

The Defense Department is creating a quarterly reporting system to track savings from a series of efficiency moves.

Those moves, rolled out since last summer, are supposed to save more than $24 billion in fiscal 2012 and then be plowed back into force structure and other combat capabilities, according to Pentagon estimates.

A civilian pay freeze and various "economic adjustments" will account for almost one-third of the total; other savings are supposed to come from the breakup of Joint Forces Command and the Business Transformation Agency, overhead cuts by the military services and cancellation of various weapon programs.

Early this month, the Pentagon set the baselines and milestones for measuring progress, Elizabeth McGrath, the department's deputy chief management officer, said Monday in an interview. McGrath and Pentagon Comptroller Robert Hale will begin tracking them on quarterly intervals. While no disclosure policy has been set, McGrath thought the resulting reports will be made public.

McGrath, a 22-year career employee, became the department's first Senate-confirmed deputy chief management officer last summer.

The post was created under congressional pressure to usher in better business practices at the Pentagon. Of the 30 programs on the Government Accountability Office's latest high-risk list, a half-dozen involve Defense Department operations.

Although GAO dropped the department's personnel security clearance program from this year's high-risk roster, those that remain include weapon systems acquisition, financial management and business systems modernization.

After a decade of galloping budget growth, the department is also in for a prolonged period of retrenchment. Under a House Appropriations Committee blueprint, for example, DoD's 2012 base budget would be $530 billion, up just 3 percent from this year's level.

"I've been [at DoD] for a very long time, this is sort of the tightest it has felt to me from a fiscal perspective that I can remember, so we're all taking a really hard look at every function," she said.

McGrath's chief focus is to transform the Pentagon's "back-office" operations such as acquisition, logistics, personnel and financial management to be more streamlined, efficient and capable of aggregating information that can help managers make better decisions.

The Pentagon, for example, lacks a cost culture, she said. While the department knows where its money goes, it cannot assess costs per transaction. Under orders from Capitol Hill to produce auditable financial statements by 2017, officials currently have to mesh some 2,500 financial and feeder systems. And neither McGrath nor staffers could furnish a ballpark figure for the size of DoD's vast contractor workforce.

But McGrath said the department is "definitely on the path" to meet the 2017 deadline. She also singled out the Pentagon's success in getting its once-cumbersome security clearance process off the GAO high-risk list. She said she is now working to iron out differences in how clearances are handled when former military personnel go to work for the department as civilians.

Asked whether she thought another round of base realignment and closures, or BRAC, is needed, McGrath said that wasn't her decision, but that the option shouldn't be off the table.

Her own office, which currently has a staff of just 12, is poised to grow by 120 as it absorbs part of the Business Transformation Agency's workforce.

While streamlining Defense Department operations is key to the office's mission, McGrath didn't see her job as simply making cuts. Workforce reductions, she said, have to be done strategically. "If you start taking numbers off the top, you may end up creating gaps in certain areas where you actually need skill sets."

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