Next Steps in Defense Restructuring

Twenty years ago, the United States was in the midst of a Cold War military buildup targeted against the Soviet Union and the other Warsaw Pact countries. Today there is no Soviet Union, Russia is no longer the enemy, and many of the former Warsaw Pact countries are members of the North Atlantic Treaty Organization. The nation now is engaged in a war against “terrorists and tyrants,” which began with the attacks of September 11, 2001, and was officially declared in the National Security Strategy document released on September 17, 2002.

This new security environment alone will require many changes, ranging from alterations in basic warfighting strategies to the development of new military equipment. The required changes have been compounded by the equally dramatic technological revolution–particularly in information-based systems–that has occurred during this same period.

During the 1980s, the nation’s security focus was on “deterrence and containment.” The United States had to have enough airplanes, ships, and tanks to stop a Warsaw Pact attack through the central plains of Germany, and it needed nuclear-armed missiles, bombers, and submarines to deter a nuclear attack on U.S. cities. This strategy worked.

But future adversaries, recognizing that the United States is the sole remaining superpower, will not attempt to match up plane for plane, ship for ship, or tank for tank. Rather, they will use “asymmetrical” approaches focused on areas in which the nation potentially is weak. These areas include attacks by suicide bombers; use of chemical, biological, radiological, and nuclear weapons; information warfare; attacks on U.S. infrastructure, such as power and water systems, financial systems, and food supplies; and long-range missiles aimed at the nation’s military forces or sites (or those of its allies). These approaches, especially when a number of them are used in combination, are not deterred or contained by conventional U.S. military might.

In response, the military needs to shift its resources, training, organizations, and equipment to nontraditional areas. These areas include special operations forces; urban warfare; defense against the battlefield use of weapons of mass destruction; cyberwarfare defense; ballistic missile defense; and “brilliant” systems for carrying out intelligence, surveillance, reconnaissance, communications, and control activities, as well as precision strikes on adversary targets. Needless to say, such shifts, particularly of resources and organizations, tend to be countercultural and fiercely resisted by the entrenched institutions in the military, the defense industry, and Congress. Thus, bringing about the needed changes will be neither rapid nor easy, as Defense Secretary Donald Rumsfeld is finding in his attempts to implement his proposed “transformation” of the nation’s military.

Among the cultural changes that will be required in carrying out this “revolution in military affairs” is that the armed services will have to work together. Future combat will not be carried out via separate air, land, and sea battles, but must be integrated (joint) operations. This requires joint doctrine, joint training, full equipment interoperability, and true dependence of the services on each other. Similarly, U.S. forces will have to work more effectively with allied forces, since it is virtually certain that all future conflicts involving the United States will be carried out in coalition with other nations–often for geopolitical reasons, if not military ones. During military operations in Kosovo, for example, U.S. aircraft were not equipped to communicate securely with allied planes. Pilots had to talk in the open, which made their planes more vulnerable. Working effectively with allies will require full interoperability of equipment and integrated tactics and training.

Another cultural change will involve accepting the likelihood that the nation will be fighting in an asymmetric environment–for example, against an enemy that uses biological and chemical weapons–and so it must develop equipment and train military personnel accordingly. Also, future enemies are likely to fully use cyberwarfare and deploy terrorists (simultaneously) to attack the nation’s supporting military infrastructures as well as its homeland. All of these factors greatly complicate military operations, and the nation has not adequately prepared for them.

Perhaps most difficult, advancing the revolution in military affairs will require reallocating resources and modernizing traditional military organizations. The commanders who have come of age with the “platform-centric” model in which ships, planes, and tanks are the critical elements; the industry that builds this equipment; and the members of Congress who support the continuation of business as usual–none of these elements are likely to enthusiastically support the necessary shift to the new and increasingly information-based weaponry needed to deter or defeat future adversaries.

Paying for changes

The good news is that sufficient resources to pay for such changes can be generated out of current defense budgets. There are four areas ripe for revision:

• Base closures. With the recent downsizing of military forces, the nation has ended up with 25 percent excess capacity in the number of bases needed. (This figure is widely accepted, but no one has yet identified a base that a local member of Congress does not immediately declare to be critical to the nation’s security.) Closing unneeded bases would save roughly $6 billion per year. Moreover, empirical evidence shows that when such closures are well planned and the Department of Defense (DOD) provides transitional support, most communities end up far better off over the long run, in terms of employment and economic growth.
• Logistics. DOD spends more than $80 billion a year in the area of logistics and does not do a world-class job. When an ordinary consumer sends a package by an express delivery company, he or she has nearly total confidence that it will arrive domestically within 24 hours or worldwide within 48 hours. Similar performance is achieved by the supply chains of Wal-Mart, Caterpillar, General Electric, and numerous other companies. DOD meets its logistics objectives by piling up lots of parts in warehouses and by using lots of people to manage them–not by using modern information technology and rapid transportation, as world-class firms do. In fact, there are more people working in the DOD logistics system than there are carrying weapons in the military.

The results of such inefficiency are to be expected. For example, during the 1991 Gulf War, it took field personnel 36 days, on average, to get a part ordered from a DOD warehouse. Today, the wait is down to 22 days. But that is the average, and it may actually take as long as two years for the needed part to arrive. So forces in the field routinely stock lots of parts and order needed parts three separate times, to make sure they get what they need. That is part of the reason why the DOD currently has an inventory of more than $60 billion in spare parts. It clearly makes sense for DOD to implement a world-class logistics information system, to replace a current set of more than 1,000 different and noninteroperable information systems. This step not only will save billions of dollars each year but also will greatly improve the readiness and responsiveness of defense systems.

• Competing for work. Instead of having work performed on a monopoly basis by government workers, the government should open the door to private firms as well, and then have all interested parties bid for jobs. After all, turning a wrench in a maintenance facility or writing payroll checks are not inherently government jobs. Numerous studies show clearly that when such work is competitively awarded–regardless of whether the public or private sector wins the competition–job performance improves significantly, with a cost savings that averages about 30 percent. The Bush administration estimates that there are more than 800,000 jobs that are not inherently governmental that are currently being done on a monopoly basis by government workers. Subjecting them to public-private competition (or privatization or outsourcing) makes sense.
• Buying smarter. Although pushing DOD to improve what it buys will have the greatest impact on its mission effectiveness, there also is great potential in improving how the department buys and from whom. In this area, significant steps have been taken during the past two decades to help transform DOD into more of a world-class buyer. Some of the changes include placing a priority on buying rugged commercial parts and subsystems, rather than special-purpose, high-cost items unique to the military; making unit production costs, support costs, and interoperability key military design requirements; implementing an integrated digital-based supply chain, including e-logistics, e-finance, and e-procurement; and making a concerted effort to increase the professionalism of the DOD acquisition workforce, which, depending on the definition used, stands at approximately 300,000 military and civilian personnel. Perhaps the most important change is using “spiral,” or evolutionary, development of products, with continuous involvement of the ultimate users of those products. This type of development necessitates corresponding changes in the requirements process, the budget process, the testing and evaluation process, and the support process, as well as maximization of rapid, competitive prototyping. The challenge for the coming years in these areas is for DOD to fully implement all of the acquisition reforms that have been introduced in recent years.

The private sector–the supply side of the equation–also has a role in advancing the military revolution. During the past 20 years, there have been dramatic changes in the defense industry in response to the changes in products and services demanded and to the need for greater efficiency. Specifically, there has been very significant consolidation during this period, from roughly 50 top contractors to only 5 or 6 large firms today. The government allowed such consolidation so long as sufficient competition in all critical areas was maintained. There also has been a shift toward more internationalization of defense firms, so long as the partner firms and countries agreed to meet U.S. controls on sensitive technologies. One area that only recently has been receiving needed attention is that of bringing commercial firms into the defense industry and/or encouraging traditional defense suppliers to integrate their civil and defense operations. The more DOD uses commercial buying practices, the more this trend will build up.

These various examples suggest that unless the government changes its way of doing business and adapts modern, commercial, cost-sensitive best practices, the revolution in military affairs will not be affordable. The United States will then be in a perverse situation in which the richest, most powerful nation in the world can be outmaneuvered by terrorists and tyrants. These hostile agents will be able to quickly acquire things such as state-of-the-art secure communications equipment, biological weapons, and information warfare tools, while the United States spends its money on maintaining the structure of its military forces (and the equipment available to those forces) in a fashion that is woefully out of date. Clearly, this cannot be allowed to happen.