September 17, 2015
Now How Much is Enough? The Contemporary Challenge of Cost and Program Analysis at the Pentagon
By Brent Scowcroft Center
In his public remarks, Dr. Morin identified, among others, three realities that shape his office's approach to conducting analysis on resource allocation and cost estimation problems:
- Although the Pentagon is on the verge of making important shifts in priorities and how it advances the United States' warfighting capabilities, the current budgetary environment of continuing resolutions and routine fiscal impasses has been hindering progress. The Pentagon's budget is enormous "even by Washington standards," but it is finite and cannot make needed investments or carry out modernization on the basis of annual financial patches. Sequestration, Congressional scrutiny, and the continually evolving challenge of planning the best possible portfolio of technical capabilities for the national defense have therefore made delivering accurate resource analysis more critical than ever.
- Political pressure focused on minimizing waste can backfire. Dr. Morin pointed to several studies that have found the strongest single predictor of whether a program will overrun projected costs is if it was started during a time of budget stringency. Combined with the loss of public and Congressional confidence, when the Pentagon builds failing programs, budgetary constraints make the delivery of optimal defense capabilities in a cost effective manner as challenging as ever.
- If the Pentagon is going to be rigorous in its analysis, it needs access to good cost data, and this is where private industry must play a crucial role. Dr. Morin cited the example of the Pentagon's F-35 acquisition program, where a major contractor has been providing a data feed from its enterprise planning systems directly to the Pentagon in lieu of reproducing antiquated forms, thereby giving planners more accurate analytical insight and reducing administrative burdens. This kind of collaborative focus on improving the reliability of data will be an increasingly vital component of the Pentagon's ongoing cost modernization efforts.
Despite his blunt assessment of the Pentagon's current budgetary environment, Dr. Morin expressed optimism over the kernels of consensus he has seen emerging on resolving the political impasse over the Pentagon's budget. He stressed that such consensus in Washington will be needed to get the maximum combat capability out of every taxpayer dollar and align the military's capabilities with the evolving international order.