Pentagon suppressed study that revealed $125B in waste: report

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The Department of Defense suppressed one of its own studies that revealed $125 billion in wasteful spending, according to an investigation published by the The Washington Post.

The newspaper found that the study, commissioned by Deputy Defense Secretary Robert O. Work, was hidden because of fears Congress would cut defense spending.

The Defense Business Board, along with McKinsey & Company consultants, conducted the study, which produced a 2015 report titled “Transforming DoD’s Core Business Processes for Revolutionary Change.”

In an interview with the Post, Work said the report proposal was “unrealistic.”

“There is this meme that we’re some bloated, giant organization,” Work told the newspaper. “Although there is a little bit of truth in that … I think it vastly overstates what’s really going on.” 

“We’re the largest bureaucracy in the world. There’s going to be some inherent inefficiencies in that,” he said.

In the course of its investigation into the business operations of the Pentagon, McKinsey placed the various operations into five groups: supply chain and logistics; financial-flow management; human resources; acquisition and procurement; and healthcare management. A sixth category was later added for real property management. 

A confidential memo issued by the consulting firm put the spending on these categories at anywhere from $75 billion to $100 billion.

The report ultimately found that the Defense Department was spending more than $134 billion on business operations each year. The board putting the study together decided to propose that the Pentagon try to save $125 billion over a five-year period.

But the report received backlash from top Pentagon officials, including chief weapons-buyer Frank Kendall III.

“If the impression that’s created is that we’ve got a bunch of money lying around and we’re being lazy and we’re not doing anything to save money, then it’s harder to justify getting budgets that we need,” he told the newspaper in an interview.

Robert “Bobby” L. Stein, the chairman of the board who commissioned the study, alleged that Secretary of Defense Ash Carter suppressed the study on purpose. 

“Unfortunately, Ash — for reasons of his own — stopped this,” Stein told the Post.

Peter Cook, a spokesman for the Defense secretary, told the newspaper that Carter had “a long list of national security challenges” to handle. Cook also said that Work and other Pentagon officials “concluded that the report, while well-intentioned, had limited value.”

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