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Finding $100B in cost savings at DoD is Ashton Carter's job
Tuesday - 6/29/2010, 7:11pm EDT
"Defense Secretary Robert Gates said Monday he wants to trim some of the billions of dollars the Pentagon spends on weapons systems and contractor services, part of a Pentagon-wide effort to find $100 billion in savings in the next five years.
"Gates, who already plans to pare down the Pentagon's huge bureaucracy to save money, said that the Defense Department will focus on unnecessary spending by defense contractors that provide the military with everything from fighter jets to janitors.
"Gates said it is 'a matter of principle and political reality to make sure every taxpayer dollar counts.' His goal is to shift money from overhead expenses to supporting U.S. troops spread around the globe.
"The Pentagon will spend about $400 billion of its roughly $700 billion budget on weapons and services from defense contractors.
"The new plan calls for annual savings of about 2 percent to 3 percent through measures like contracts that require the defense companies to shoulder cost overruns and encouraging competition between contractors.
"Ashton Carter, Gates' acquisition chief, met Monday with executives from major defense companies. Most saw their profits soar over the past decade as military spending grew rapidly on demand for weapons to fight wars in Iraq and Afghanistan.
"Carter said that the profits of defense firms will not suffer, since the Pentagon was encouraging them to cut costs by being more productive. That could include using fewer workers on a project or cutting their material costs, he said.
"Contractors are already under pressure to reduce costs. Gates has been willing to cut major programs that he deems unnecessary or too costly, like ending the F-22 fighter jet program and scrapping plans for a new long-range bomber."
I played highlights of the news conference on my show today.
Click here for the memo Dr. Carter sent to Pentagon acquisition officials, and the slides he presented at the news conference.
Here's the video of the entire event: