New Watchdog Report Sends a Signal to Congress: Keep Top Pentagon Official Working on Spending Reform

Early in November, the nonpartisan U.S. Government Accountability Office (GAO) released a comprehensive report on the state of the Department of Defense’s (DoD) spending and business reform efforts, reporting mixed results from the years-long efforts at DoD and in Congress, but sending one clear message to lawmakers.

GAO concludes that while a reported $37 billion in savings from three recent reform efforts “were largely reflected in DOD's budget materials, [GAO] could not determine the quality of the analysis supporting them due to a lack of information about economic assumptions and other factors.”

The watchdog office points to some ways DoD can improve its internal processes, measures, and metrics going forward, in order to more accurately assess both existing waste and future reform savings. These recommendations are important, and fortunately DoD accepted all of them.

However, one portion of this report sends an unmistakable message not to DoD but to Congress: they should halt the bicameral campaign to eliminate the Chief Management Officer (CMO) position at the Pentagon.

The CMO position was first recommended by GAO in November 2006. As the CMO’s website notes in its history of the position and office:

...the Government Accountability Office (GAO) proposed establishing a permanent DoD official with the authority, experience, and tenure to drive change and be accountable for overseeing the department's business operations. While crediting departmental progress to date, the GAO said a Chief Management Officer (CMO) was needed to reconcile the competing priorities that could impede DoD's progress in its transformation efforts.

Elizabeth McGrath became the first Senate-confirmed Deputy CMO in 2010. The current CMO, Lisa Hershman, was unanimously confirmed by the Senate in December 2019.

Unfortunately, members of Congress in both the Democratic-led House and the Republican-led Senate want to permanently eliminate the CMO position. As we wrote to Congressional leaders in September 2020, on their respective versions of the annual National Defense Authorization Act:

...we urge you to remove Sec. 911 of S. 4049 and Sec. 901 of H.R. 6395, each of which would eliminate the Chief Management Officer (CMO) position at DoD, along with subsequent sections in each bill that are inextricably linked to the elimination of the CMO position. The CMO position has not been in place for very long but has already identified billions of dollars in savings for taxpayers. It is too early to give up on the office.

We stand by our support of the CMO position today, but we must add that the nonpartisan GAO has now expressed concerns over how eliminating the CMO -- as Congress plans to do -- may negatively impact DoD business reform efforts.

The key paragraph from their report:

Our prior reports have identified cases in which leadership changed—or was briefly absent—and, accordingly, an interagency collaborative mechanism either disappeared or became less useful. Our prior work has also found that organizational changes can occur over several years, and must be carefully and closely managed. The risk that collaborative mechanisms would become less useful for DOD’s reform efforts is increased by the fact that OCMO [the Office of the Chief Management Officer], Office of the Under Secretary of Defense (Comptroller), and CAPE [Cost Assessment and Program Evaluation] have not formalized and institutionalized these efforts. Specifically, there are no written policies or formal agreements that define how organizations should collaborate with regard to DOD’s reform and efficiency efforts. As a result, there is also a risk that leadership for reform efforts will not be sustained in light of any organizational changes that may occur.

In other words, eliminating the CMO position may cause significant disruption or delay to ongoing business reform efforts. That could, in turn, result in lost savings for taxpayers within the Pentagon’s massive bureaucracy.

As the country continues to struggle with the COVID-19 pandemic and economic downturn, budget hawks are warning Congress that the extraordinary federal spending required to combat the pandemic’s effects will require subsequent years of significant fiscal discipline in the federal budget. One piece of low-hanging fruit for Congress is to allow the important work of the CMO continue by not eliminating the position in this year’s NDAA. While the GAO report indicates that the Pentagon can certainly improve on elements of its cost and savings estimates, now is the worst time to abandon an office solely dedicated to identifying reform efforts that ultimately save taxpayers money.