WASHINGTON — If the U.S. Department of Defense wants to find efficiencies and bring down waste, it should look to McDonald’s, the nominee for the department’s No. 3 job said Tuesday.
No, the department isn’t ready to drop its rifles for Big Macs, nor is it taking a side in the perpetual Great Fast Food Competition between Ronald and Col. Sanders. But according to Lisa Hershman, the acting chief management officer who on Tuesday had a confirmation hearing to permanently fill the role, the department would be lovin’ it if they could mirror some of McDonald’s supply chain strategies.
Asked how the Pentagon can trim waste during her hearing, Hershman told senators that there are best practices that can be learned from big corporations in the private sector, including “taking a page from McDonald’s, who is very good at managing and acquiring goods and services by category.”
“We have a large DoD-wide category management reform initiative underway. We are looking at everything from what type, how many contracts we have for certain goods and services,” Hershman said. She held up the example of the humble two-by-four, for which the Pentagon had 22 different acquisition contracts.
“Here’s the problem: We found that amongst those 22, several of the contracts were from the same vendor at different price points,” Hershman said. “We necked it down to two contracts — $18 million in savings, which seems small, but when you have 40,000 contracting officers, those small items start to add up very quickly.”
Several times during her hearing, Hershman drew back upon her private sector experience and expressed her belief that common-sense contracting reforms such as the two-by-four case could net the Pentagon savings. Members of the Senate Armed Services Committee asked few probing questions and largely gave the impression that Hershman should face limited, if any, opposition for the job.
The CMO position is not as high-profile a gig as other top Pentagon jobs, but the holder is the third-ranking official in the department, thanks to a series of congressional reforms in recent years. Capitol Hill’s intention was to empower the CMO to find efficiencies inside the Pentagon. Through February 2019, Hershman said her team found $4.4 billion in efficiencies and savings — a number she expects to grow in the future both through CMO-directed efforts and savings discovered through the Pentagon’s ongoing annual audit.
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.