May 24, 2017

By: Jared Serbu

As expected, the final 2018 Defense budget the Trump administration submitted to Congress Tuesday calls for $640 billion in military spending, $52 billion more than the current year and breaking the current budget caps by the same amount.

But even amid a healthy plus-up in the top-line amount, the Pentagon says it’s found some modest ways to produce “efficiency” savings in 2018. Officials billed the budget as a fulfillment of two commitments Defense Secretary James Mattis made when he took office in January: rebuilding the military’s readiness and reforming its business operations.

“There are a number of ongoing activities that we continue to pursue,” said John Roth, the career senior executive who’s currently performing the duties of DoD comptroller. “We’re continuing to look at the major headquarters and to reduce them by 25 percent. We continue with acquisition reform, particularly with Better Buying Power 3.0. We continue to take a hard look at our service support contracts and make sure that they’re appropriate.”

The department said the largest chunk of the savings — $1.2 billion — will come from changes to business processes in the headquarters of the military services and the Office of the Secretary of Defense.

Its budget document does not identify all of the ways in which DoD expects to reach that total, but offers a few examples:

  •  From now on, the Pentagon’s deputy chief management officer will have to sign off on any new business IT investments that cost more than $1 million over five years. DoD expects that change to save $77 million in 2018 alone.
  • The department says it will save $120 million with a change to travel policy, using the “lowest acceptable” airfare in GSA’s City Pair program as the default option for domestic flights.
  • DoD expects to save $382 million by eliminating “redundant” service contracts. That process will be led by the department’s Service Requirement Review Boards, a process DoD set up last year to begin forcing Defense organizations to justify their use of support contractors.
  • The budget proposes modest increases in staffing levels at the Defense Contract Audit Agency, the Defense Contract Management Agency and the DoD Inspector General’s office to increase oversight over contracts.

The Pentagon also hopes to glean some savings from military compensation.

The 2018 budget proposes a 1.9 percent pay raise for civilians and 2.1 percent raise for military members, lower than the 2.4 percent increase federal employees would otherwise receive based on the Employment Cost Index. The department projects the lower raise would save about $200 million in 2018.