The crux of House Armed Services Chair Mac Thornberry’s plan to streamline Pentagon bureaucracy largely survived House-Senate negotiations over the final version of the fiscal 2019 defense authorization bill, with defense support agencies and field activities remaining a target for cost-cutting reforms. The conference agreement requires the chief management officer (CMO) to certify that spending by support agencies on civilian resources management, logistics management, services contracting and real estate management will be cut by 25 percent by Jan. 1, 2020, by reducing or eliminating duplicative functions. If the CMO determines that reaching savings of 25 percent will create “overall inefficiencies” for DOD, the department must notify Congress and specify a lower savings goal. Section 921 also requires the CMO to continue reviewing defense agencies and field activities every five years to identify opportunities “to increase effectiveness and efficiency of mission execution.”
A related provision, section 923, calls for the CMO to review defense agencies and field activities and submit a list to lawmakers of the agencies which operate “efficiently and effectively,” and do not carry out any function that is duplicative of activities carried out by other defense elements. The CMO then would be required to develop a plan for “rationalizing the functions” or agencies not included on that list, or transferring some or all of their functions to another organization.
The conference agreement offers a reprieve for two agencies — Washington Headquarters Services, which would have been eliminated under the House plan; and the Defense Information Systems Agency, which would have seen many of its functions transferred elsewhere. The section also requires DOD to provide Congress 30 days notice before terminating an agency or activity.