Getting the Defense Department Off the Hamster Wheel: Reducing Operating Costs to Invest in the Future of the Force
Doug Berenson
March 31, 2021
The U.S. military is not only the world’s most advanced force, but it is also the busiest and most widely deployed. The Defense Department’s constant commitments leave it caught in a metaphoric hamster wheel of activity, with important implications for its strategy and investment plans. Gallons of ink have been spilled debating defense spending priorities and force modernization. Now, we should spare a few drops to discuss the resulting trade-offs in force readiness and operating tempo as well as what this all means for military contractors.
The Defense Department’s top-line budget is likely to remain fixed or even decline in the coming years. The military’s push for technological innovation will require money, and Congress will continue to fund military-linked manufacturing. This means that the Defense Department will need to find deep savings elsewhere, including in its Operations & Maintenance (O&M) budget. O&M pays for equipment and facilities maintenance, fuel, spare parts, and training services, making it the lifeblood of U.S. forces across all service and operating domains (see figure 1). The salaries and benefits for most Defense Department civilian employees are paid from O&M accounts. O&M is also a major source of funding for contractor personnel who support the Defense Department in areas like information technology, engineering, logistics, and administration. Since the 1970s, the O&M budget has tended to grow at a relentless, if gradual, pace when benchmarked against the size of U.S. military forces. In Fiscal Year 2020, the O&M budget accounted for about 42 percent of the defense budget.
https://warontherocks.com/2021/03/getting-the-defense-department-off-the-hamster-wheel-reducing-operating-costs-to-invest-in-the-future-of-the-force/
