The Army’s successful housing privatization initiative can be used as a model to guide future reforms of DOD’s real estate portfolio, two former high-ranking Army officials say in a recent commentary in the Wall Street Journal.
“The program’s success shows how partnerships between business and the military can often achieve better outcomes than the military can achieve on its own. This is especially so when applied to the vast infrastructure that consumes more than $200 billion of today’s defense budget,” say Sandy Apgar, who served as assistant secretary of the Army for installations and environment from 1998-2001, and Jack Keane, who served as the Army’s vice chief of staff from 1999-2003.
Apgar and Keane suggest that other assets, such as offices, warehousing and maintenance, could be monetized and their performance improved.
“If the Defense Department were authorized to follow the best practices of American business and shed 10 percent to 20 percent of its infrastructure-related costs, it could save $20 billion to $40 billion a year,” they state.
They cite five principles of defense reform that the next administration should follow in launching new initiatives:
- integrate public needs with private means and methods;
- plan from the inside out — military-business partnerships start with the soldier and the family, not the budget or the building;
- act strategically, trading short-term gains for long-term benefits;
- cross institutional, functional and geographic boundaries — bypassing DOD’s vertical silos and risk-averse culture can eliminate overhead and produce outcome-based systems; and
- focus more on best-value outcomes than least-cost activities.
“Partnerships have shown that the Pentagon’s conventional contracting methods can be more costly in the long run while risking mediocre results,” Apgar and Keane say.