Army Official: Business Reforms Needed ASAP

HUNTSVILLE, Ala. – The Army’s ability to secure sufficient funding from Congress for modernization in the coming years will depend on the success or failure of the Pentagon’s business reform agenda, a service leader said March 14.

“In the conversations that Secretary Mattis, Secretary Speer [Acting secretary of the army Robert Speer], the chief, the vice chief and I have had with people on Capitol Hill — What they’re telling us is very clear,” said Karl Schneider, who is performing the duties of acting undersecretary of the Army.

“They will help us rebuild the United States Army. What they need in exchange is … reform of the way we do business. We must do business more effectively and efficiently in the future,” he said at the Association of the United States Army’s Global Force Symposium.

Achieving financial auditability -- which the Defense Department and the services are required to do by the end of this fiscal year -- will be critical, he said.

“We have to have our books in a way that they are certified so that we can prove to Congress and the American people that we’re using the money that they give us responsibly for the purposes for which it was given to us,” Schneider said.

Doing so will also allow Army leaders to make better informed investment decisions as the service tries to “correct the damage” that budget constraints have inflicted on modernization efforts, he noted.

“We’ll be able to see the true cost of things,” he said. “We’ll be able to see where our investments are paying off and where they’re not, [and determine] where the money should go and where we should take the money away. That’s something we need for all of our programs.”

Achieving financial auditability will be a major focus of Secretary of Defense James Mattis as he seeks efficiencies and better business practices for the Pentagon, Schneider said.

Using big data analytics to improve supply chain management and other activities is another priority, he said. The private sector is already taking advantage of the practice, he noted.

“There’s a lot more we can be doing,” he said. “Tools exist for us to put in the right kind of controls and the right kind of metrics so we can show that we’re … achieving outcomes that we need.”

In the meantime, Schneider called on Congress to pass defense appropriations for fiscal years 2017 and 2018 and head off the return of sequestration in October. The Pentagon is currently operating under a continuing resolution that makes it difficult to execute programs.

The Army has had to delay more than 120 programs that would enhance modernization and provide the service with additional weapons and platforms. About 50 critical new-start programs are on hold, he said.

The House recently passed a defense appropriations bill for fiscal year 2017 that would boost Army end strength and provide additional funding for aviation procurement.

The legislation is “actually pretty favorable for the Army,” Schneider said. “It gets us some of the money we need. But the Senate has yet to act.”

Doubts remain as to whether the Senate will follow suit, as Democrats and Republicans remain at loggerheads over funding for non-defense programs.

Even if the Senate acts quickly and a 2017 defense appropriations bill is signed into law in the coming weeks or months, the Army will still be in a bind to spend the money before the fiscal year ends on Sept. 30, Schneider noted.

“Because it’s getting late in the fiscal year, when we actually do get the appropriations it will be a challenge for us to ensure that we obligate it in this fiscal year,” he said.

Topics: Acquisition, Army News