Sequestration from the Top Down or From the Bottom Up?

Sequestration requires across-the-board cuts of $85 billion — $43 billion for the Defense Department, $29 billion for non defense agencies and $13 billion for Medicare and other social programs — by Sept. 30. Defense reductions will affect about two-thirds of the Pentagon's $648 billion 2013 budget. Military personnel accounts are protected.

The uncertainty has lasted for weeks and months, as agencies, technically, do not have to make the required cuts until  September 30,2013.  Although the longer they wait, the more pronounced the cuts will have to be toward the end of the fiscal year.

Assuming the major weapons systems battles will be fought and the smoke will clear by default on those that are not affordable, the next largest target in the agency cuts will be manpower -- military, civil service and contractors. 

From what we are reading, the major issue is whether or not the cuts will occur at the top of the hierarchy where the brass (corporate big boys, civil servants the generals/admirals) sit or from the bottom – enlisted men and their benefits and small business.  

Below are 3 different perspectives on this issue for your reading enjoyment, courtesy of our stymied Congress whose budgetary laziness has created the Sequestration Drama. We suggest you choose the one you favor and advise your congressman of your choice. 

THE PROJECT ON GOVERNMENT OVERSIGHT ("POGO")

".............for the first time in the more than 200 years that the U.S. has had a standing military, there are fewer than five enlisted personnel for every officer. In other words, today’s military is the most top-heavy  force in U.S. history.

Former Secretary of Defense Gates remarks on this issue per POGO:

"In  his August 2010 speech on Efficiency Initiatives, Gates referred to  these perks as “the overhead and accoutrements that go with” senior  positions, be they military or civilian, within DoD. In an interview  with Newsweek, Gates bemoaned these accoutrements and entourages that  surround generals and admirals, which he believes are indicative of a  military leadership that is “suffering from an inflated sense of  entitlement and a distorted sense of priorities"

http://pogoblog.typepad.com/pogo/2011/11/todays-military-the-most-top-heavy-force-in-us-history.html

"DOD BUZZ"

"The head of the U.S. Defense Department vowed to cut 20 percent of some areas of the military bureaucracy in a move estimated to save as much as $2 billion.

Defense Secretary Chuck Hagel made  the announcement while speaking to troops during a trip to Naval Air  Station Jacksonville, Fla.

Pentagon Press Secretary George Little  in a statement e-mailed later in the day said the reductions would  affect the Office of the Secretary of Defense, the Joint Staff and the  Military Service Headquarters over a five-year period beginning in 2015.  They will occur whether or not lawmakers agree on a plan to avoid  automatic budget cuts known as sequestration, he said.
 
“These headquarters reductions should be pursued now,  regardless of future fiscal circumstances,” Little said. “These cuts  will be implemented even if Congress lifts sequester-level budget caps.”

Little didn’t specify how many personnel would be affected. The move may eliminate more than 4,000 jobs, according to an unofficial headcount of those areas. That’s less than one-fifth of 1 percent of the Pentagon’s 2.1 million active-duty troops and civilian employees.

What’s more, the Pentagon bureaucracy has only increased since 2010, when  former Defense Secretary Bob Gates made a similar pledge, raising  questions about whether Hagel — or any defense secretary — can succeed  in thinning the ranks of the military’s top-brass and senior civilians.

The number of positions in the Office of the Secretary of Defense, the  Joint Staff and the combatant commands increased 24 percent, to 21,952  in 2012 from 17,765 in 2010, according to a graphic accompanying a  recent analysis by Marcus Weisgerber, a reporter for Defense News.

More than half of the overall increase came from the Joint Staff, which  simply absorbed positions from Joint Forces Command after Gates ordered  the latter to be shuttered in 2010, according to the analysis.

Hagel’s announcement is based on a strategic review of spending priorities in  the wake of across-the-board budget reductions, Little said.

http://www.dodbuzz.com/2013/07/17/like-predecessors-hagel-vows-to-cut-military-fat/

The Defense Department faces $500 billion in automatic cuts over the next decade."

"WASHINGTON TECHNOLOGY"

"The Small Business Administration reported that the federal government again missed the mark for small business contracting during  fiscal 2012, but the gap has narrowed for primes.

Overall, $89.9 billion in government contracts went to small businesses last year, that’s 22.25 percent of all contracts, according to the SBA report. The goal for small businesses is 23 percent. In fiscal 2011, 21.65 percent of contracts went to small businesses.

There also are goals for various sub-categories of small businesses:

• Women-owned: 4 percent or $16.2 billion (goal 4 percent)
• Small disadvantaged: 8 percent or $32.3 billion (goal 5 percent)
• Service disabled, veteran-owned: 3.03 percent or $12.3 billion (goal 3 percent)
• HUBZone: 2.01 percent or $8.1 billion (goal 3 percent)

The annual SBA report also tracks small business contracting goals. The gap between goal and achievement is greater there.

Overall, 33.6 percent of subcontracts went to small businesses, with  the goal being 36 percent; however, women-owned small businesses  surpassed their 5 percent goal with 5.6 percent achieved. Small disadvantaged businesses also were over their 5 percent goal with 5.1  percent.

But service-disabled, veteran-owned businesses fell short with 1.8  percent versus a goal of 3 percent, as did HUBZone, which had 1.3  percent of subcontracts against a goal of 3 percent.

SBA’s annual release of its small business goals isn’t without critics. The American Small Business League criticized the report saying it was “completely false and totally unsupported by the facts.”

The group claims that SBA miscalculated the actual federal  acquisition budget, and according to ASBL, small businesses only  received 8.2 percent of prime contracts.

In addition, the group claims that a significant number of large businesses are receiving small business contracts."

"WHEN WILL THE CONTRACTORS CONTRACT?

How the Pentagon Floats to the Tax Payer the Massive, Tiered, Overheads of Major Corporations in the Military Industrial Complex

 Chuck Spinney Photo Courtesy of Bill Moyers Interviews at "Now" on PBS http://www.pbs.org/now/transcript/transcript_spinney.html 

The following article is an outstanding guest blog by Chuck Spinney  on the Project on Government Oversight (POGO) a venerable Washington D.C. Non-Profit that has been around since they first assisted in bringing attention to $640 toilet seats and $436 hammers of the 1980s.

Spinney spent 33 years at the Department of Defense including 26 years as a staff analyst, has testified before congress and won many awards for his straight forward critique of the Pentagon.

Rather than blowing whistles on classified data, Chuck has been respected for years for his straight-forward views and recommendations on how the Pentagon, our biggest government agency, has been managed.   This is a man who has been there.

As Spinney points out the reasons for the astounding costs at the Pentagon are the  same today - "It is all about allocating overhead spending by contractors in an  unaccountable financial system"

Below is an extract from Chuck's article and a link to it at POGO:

POGO

 "The fact that the Pentagon does not have an in-house capability to do  audits is a reflection of its own priorities of delay and obfuscation.  The Pentagon does not have a capability to make sense out of accounting  systems after 20-plus years of failing to meet its legal obligations,  because it has not assigned a high enough priority to the problem. Punt  bluntly, the Pentagon does not want to have that capability.

 The reason the Pentagon does not want auditable books is simple: the Military-Industrial-Congressional Complex benefits  from the money flows hidden in the perpetual chaos of the bookkeeping shambles. "

 

http://www.pogo.org/blog/2013/06/when-will-the-contractors-contract.html

 

 

How Does One Inculcate Independence?

               Awards Ceremony U.S. Department of Agriculture Small Woman-Owned Business of the Year

A MENTORING QUESTION ON "QUORA":

"I understand that there is a fine line between when you step in to guide and when you expect/want the mentee to figure it out on their own. How would you slowly push them towards the independent side?"

OUR ANSWER:

"Do not work the issue or solve the challenge for them.  Educate and provide a road map so they understand it and evolve the solution for themselves.

Offer a map with variable shoulders on the road and the flexibility for a  few detours from which recovery can be achieved."

      

Travelers on the road of knowledge en route to wisdom learn best via a vehicle they  drive themselves.  Not all travel at the same speed or take the same  route to a destination.

Here is a success story that I had the privilege to witness from a company that bridged the gap to which your question refers.  Note the link to the astute article they have shared with the small business community at the link below:

Top 3 Success Strategies from a Thriving Small Business

 

A Failing Veterans Health Care Handoff

ISSUE

Massive backlog reveals the dire necessity for simplification, communication and efficiency in processes, systems and government service contracting in DOD and the Veterans Administration. 

BACKGROUND

A recent 3 part special in Time Magazine addresses the serious gaps between treatment, benefits and services processes and systems between the military services and the Veterans Administration:

http://nation.time.com/2013/04/22/what-the-hell-is-going-on-with-va/#ixzz2RnspoSM4

"While awaiting processing, "the veteran’s claim sits stagnant for up to 175 days as VA awaits transfer of complete (service treatment records) from DoD,":


http://veterans.house.gov/sites/republicans.veterans.house.gov/files/2013%2004%2016%20HVAC%20to%20Sec%20Hagel.pdf

After years of work to move toward integrated electronic records that would eliminate this sort of delay, Defense Secretary Chuck Hagel recently conceded that the Defense Department is not holding up its end of the bargain to improve the disability process.

"I didn’t think, we knew what the hell we were doing.":

 http://www.federalnewsradio.com/394/3288748/Hagel-orders-DoD-to-restructure-path-toward-integrated-health-record

HISTORICAL SIMILARITIES
 
The above scenario is not unlike the Walter Reed Army Hospital care fiasco a few years ago, before the facility was shut down and consolidated with the Bethesda Naval facility.

OTHER SYMPTOMS

The VA decided to have those who would actually use the system (claims processors) work with software developers. This process took longer but will create a system more likely to meet the needs of those who actually use it. VA also worked closely with major congressionally-chartered veterans’ service organizations.

This year, 2013, is the year in which regional offices are being transitioned to the new electronic system.

ROOT CAUSE

Both the services and the Veterans Administration use service contractors to perform this type of systems development. Government Computer News (GCN)  carried a story on the difficulties experienced with, "Performance-Based Contracting", which has been made part of the Federal Acquisition Regulation (FAR) in an attempt to pre-establish at contract award those discrete outcomes that determine if and when a contractor will be paid.

Interestingly enough, the article splits the blame for the difficulties right down the middle, stating the government typically has problems defining what it wants as an end product or outcome and looks to contractors to define it for them. More than willing to do so, the contractors detail specific end products or outcomes, set schedule milestones and submit competitive proposals.

The winner is selected based on what the government thinks it needs at the time to fulfill its requirement and a contract is negotiated. Once underway, the government decides it wants something else (usually a management-by-government committee phenomena with a contractor growing his product or service by offering lots of options). The resulting change of contract scope invalidates the original price and schedule, so a whole new round of proposals and negotiations must occur with the winner while the losers watch something totally different evolve than that for which they competed. The clock keeps ticking and the winner keeps getting his monthly bill paid based on incurred cost or progress payments. The link to the GCN article is below:

http://gcn.com/articles/2006/12/01/performancebased-contracting-still-baffles-agencies.aspx

CONCLUSION

The present state of the economy and the needs of our servicemen will not allow the aforementioned to continue. Government agencies are now hard pressed to insure the most "Bang for the Buck". It is in the long term interests of astute contractors to assist in that endeavor. The only way to achieve such an objective is through sound technical, cost and schedule contract definition via an iterative process of baseline management and control.

Our returning soldiers and those who have served before deserve better.