Management Shakeup Looms at Defense

When a new secretary of defense takes the helm at the Pentagon at the outset of the next administration, he or she will have to deal with a potentially chaotic staff reorganization that Congress signed into law.

The new org chart for the office of the secretary of defense is a product of the 2015 National Defense Authorization Act. The law created a new undersecretary of defense for business management and information who would take on the duties currently performed by the deputy chief management officer and the chief information officer.

Congress’ intent was not to inflate the office of the secretary of defense — which many politicos on Capitol Hill criticize for being bloated — but to compel the Pentagon to clean up its act in areas like business reforms and information technology investments.

Also significant is where the new undersecretary would fit in the Pentagon hierarchy. The post will move into the third ranking position at the Defense Department underneath the secretary and deputy secretary — a position now held by the undersecretary for acquisition, technology and logistics.

The power shakeup is more far reaching than typical bureaucratic shuffling. Besides demoting the weapons acquisition chief, the law is requiring the Pentagon to elevate the management of day-to-day business operations and information systems as higher priorities than they currently are.

The NDAA requires the new undersecretary to be in place by January 2017. The date was set so the responsibility for reorganizing the Defense Department’s senior ranks would fall on the next administration. Although that deadline is more than a year away, the Pentagon is already drawing up plans.

“The office of the deputy chief management officer has conducted initial fact-finding efforts in this area in order to provide informed options for the secretary,” said Defense Department spokesman Navy Cmdr. Bill Urban.

The NDAA provision is part a larger congressional effort to prod federal agencies to rethink how they buy information systems. The Pentagon is the largest consumer of IT in the federal government with a $37 billion annual budget. Having the undersecretary for business management overseeing CIO duties is a “big deal” for the Pentagon, although not uncommon in other federal agencies, said Dave Wennergren, former Defense Department CIO and now senior vice president of the Professional Services Council.

One of the most intriguing angles of the upcoming Pentagon reorganization is the likely bureaucratic turf war between the incoming undersecretary and the acquisition shop that currently holds the power over all Pentagon procurements, including IT systems. “That’s the interesting thing,” said Wennergren. “AT&L is the big dog in DoD,” responsible for all acquisitions and for initiating reforms. “It will be an interesting change from the way things are done now.”

Wennergren senses the building has not yet realized what a seismic shift this could be. The undersecretary for business management and information would actually have a voice in the budget and contracting process.

There is growing pressure on the Defense Department to overhaul outdated procurement practices and catch up with the pace of technology in the private sector, he said. The IT priorities are significant, including a move of traditional networks and services to the cloud, pressures to improve cybersecurity and modernize aging infrastructure.

Some beltway insiders wonder how this massive reorganization of the Pentagon’s top ranks slipped into the NDAA without major squawking from the Defense Department. “Timing is everything,” said Wennergren. The law was signed in December — just weeks after then Secretary Chuck Hagel was asked to step down and before Ashton Carter was confirmed as the new Pentagon chief. “Nobody was paying much attention” to the NDAA’s mandate to reorganize the office.

Had the language been proposed after Carter and his deputy Bob Work were in office, they might have challenged it. Hagel, though, probably would have been in favor of the restructuring as he had proposed a similar consolidation of business and IT responsibilities under a single office as part of a comprehensive austerity plan he put together in response to congressionally mandated spending cuts.

In a curious twist, the Senate Armed Services Committee staff director who championed and wrote the 2015 NDAA language, Peter Levine, was named the Pentagon’s deputy chief management officer in March. And he could be in line to move up to undersecretary for business management and information.
For defense contractors, there is much at stake in how the Pentagon executes the mandated changes and divvies up responsibilities. Much of the oversight over future IT procurements is likely to shift to new players. The new undersecretary also would have a huge say in how the Pentagon implements acquisition reforms that Congress is expected to pass in the fiscal year 2016 NDAA.

The changes at the top should be an “important step toward recognizing that the business of defense is massive, crosses across every military department and every defense agency,” said Wennergren. The legislation says this newly created undersecretary is going to have the authorities he or she will need to actually work across those organizations, which are powers that the current DCMO lacks.

Congress has been frustrated not just by the Pentagon’s but all federal agencies’ lackluster performance in IT investments. “Much could be done to bring speed and innovation,” said Wennergren.

In a bizarre irony that speaks volumes about how Washington works, the 2015 NDAA provision was a compromise that allowed Congress to pass the Federal Information Technology Acquisition Reform Act. The FITARA — a law that seeks to overhaul government IT procurement — was packaged in the NDAA to get it passed but most of the provisions don’t apply to Defense.

Topics: Defense Department, DOD Leadership