WASHINGTON ― A task force formed to examine the Pentagon’s reform-focused No. 3 job has concluded the position was “mostly ineffective” at taming the department’s bureaucracy and urged that it be scrapped and replaced.

The Defense Business Board, whose task force was tapped by the Pentagon for the study, unanimously adopted the recommendations at its meeting on Wednesday.

The board warned that China’s rise as a technological powerhouse is threatening America’s military dominance while America’s mandatory spending and COVID-19 response is expected to suppress U.S. defense budgets. Meanwhile, the cost of the Defense Department’s support agencies, activities and infrastructure have steadily grown, crowding core war fighting functions.

“The multi-decade missed opportunity to achieve systemwide efficiencies has taken on even greater importance within the fiscal consequences of what are likely to be flatline defense budgets,” said Defense Business Board Chairman Michael Bayer. “Progress and efficiency is now beyond a statutory mandate, it’s become an existential mandate.”

Alongside more than 20 other reforms, the task force offered three replacement options for the CMO that would reshape the military’s top civilian tiers:

- Create a dual-hat position for principal undersecretary of defense for business transformation and deputy chief operating officer. As the least dramatic idea of the three, it would allow room for the role of DCOO to mature, but it would not provide an immediate fix.

- Establish two deputy secretaries of defense: one for strategy and policy, and another for resources and management. The most far reaching option, it would establish 10 new positions ― including a “performance improvement officer”―and align DoD’s comptroller and acquisition focused undersecretaries under the deputy resources and management.

- Empower the deputy defense secretary as chief operating officer, also with a subordinate performance improvement officer. This option would establish a director of administration and support and a PIO as well. The COO job would have to be filled by a leader with a record of managing in the Defense Department but also large, private sector organizations, the task force said.

Though the task force did not take a position, the third option was presented with the most advantages and the least disadvantages. Among the advantages, the defense secretary could adopt it quickly by moving most of the chief management officer functions, designating the deputy as chief operating officer and aligning other jobs in the Pentagon hierarchy.

In the 2016 defense policy bill, Congress elevated the longstanding deputy chief management officer position to a full CMO role, but the job fell short of expectations, and a disenchanted Congress passed a defense policy legislation last year that ordered an independent study to restructure the job. Pentagon leaders chose the DBB to perform it.

Co-chaired by Punaro Group CEO Arnold Punaro and Neo Group CEO Atul Vashistha, the task force interviewed 90 people and compared the CMO job with corporate best practices and equivalents in the U.K. and Australia. Their focus was institutional, and not on any occupants of the job.

The task force concluded that since the CMO’s inception in 2008, the job never invested with the right mix of authorities to combat DoD’s cultural and institutional barriers to reform. While the defense secretary and Joint Chiefs chairman have appropriately increased their focus on tying resources to the National Defense Strategy, the leadership tiers below are mired in governance bodies, process and guidance documents.

To boot, the CMO job suffered from having no formal charter, turnover problems (it’s only been filled 45 percent of the time), a confusing title, an ingrained resistance to change, as well as unclear goals, incentives and success metrics. Key to its failure was its lack of budgetary authority.

“We do not believe this position, since the beginning has ever been set up for success,” said DBB member David Walker. “The CMO position as designed and implemented has been mostly ineffective.”

The board credited the defense secretary and Joint Chiefs chairman for increasing their attention to reforms, but said the CMO role has historically focused on cost cutting and not enterprise-wide improvements.

How Congress and the Trump administration will react to the report was not immediately clear.

At Wednesday’s DBB meeting, Chief Management Officer Lisa Hershman told the board her office has found $11.2 billion in savings and will likely find $7.5 billion more. Since Defense Secretary Mark Esper asked her in January to spearhead the department’s “night court” reviews to streamline the Pentagon, she has worked to make data-driven reforms.

“I’m meeting with the undersecretary of defense for research and engineering and his team Friday, and I told him, ‘I found a way that we can look at your contracts and and free up more money than your target plus another $125 million,’” she said. “He said, ‘I can’t wait to talk to you.’”

Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.

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