# Presentation: 911623

## Defense Reform

**Defense Reform**
**Update**
**for**
**Secretary of Defense**
**William Cohen**
**by**
**Stan Soloway**
**November 8, 1999**

## Slide 2

## Management Council

***Under SecDef (Acqsn & Tech)***
***Under SecDef (Comptroller)***
***Vice Chairman of JCS***
***Asst Sec Def (C3I)***
***Under Sec Navy***
***Vice Chief of Staff, Army***
***Vice Chief of Staff, Air Force***

***Under SecDef (Policy)***
***Under SecDef (Pers & Readiness)***
***General Counsel , DoD***
***Under Sec Army***
***Under Sec Air Force***
***Vice Chief of Naval Operations***
***Asst Commandant, Marine Corps***

***Dir, Defense Reform Initiative***

***Dir, Admin & Mgmt***

***The DMC was established as the Board of Directors to oversee the continued***
***reengineering of the Department  of Defense.***

***Deputy Secretary of Defense***

*Management Council*

## MRMs - Management Reform Memoranda

*MRMs - ****Management Reform Memoranda***

**,**

**.**

## DRIDs - Defense Reform Initiative Directives

*DRIDs - ****Defense Reform Initiative Directives***

*.*

**After the DRI report was released in November 1997, Defense Reform Initiative Directives (DRIDs)**
**were released covering over 40 issues that require reports to the Deputy Secretary of Defense. **
**Many new ideas have emerged for changing the way we are doing business. Sometimes they take the **
**form of DRIDs and others are informal reviews.**

## DRIDs - Defense Reform Initiative Directives

*DRIDs - ****Defense Reform Initiative Directives***

## DRIDs - Defense Reform Initiative Directives

*DRIDs - ****Defense Reform Initiative Directives***

**51.****  **_**Transfer of the Defense Property Accountability System to the Defense Logistics Agency (29 Jun 1999)**_** **

##      Performance Scorecards 			         MRM #    DRID #

**     ****Performance Scorecards ****	****	****	****         **_**MRM #**_**    **_**DRID #**_
** ****Paperless Contracting and Acquisition****	****2****	****32, 46**
** ****Logistics Transformation****	****	****	****--****	**** --**
** ****Military Housing Privatization****	****	****--****	**** --**
** ****Energy Management ****	****	****	****--****	****9, 49****	****& Utilities Privatization**
** ****Financial Management Reform****	****	****--****	**** --**
** ****Competitive Sourcing****	****	****	****--****	****20**
** ****Government Purchase Card****	****	****--****	**** --**

## Simplifying Purchasing

**Simplifying Purchasing**
** ****with the Government**
**Purchase Card**

## Increase Purchase Card Usage to 90% by FY 2000 and Decrease Traditional Micro-Purchase ($2,500 and Less) Transaction Methods

**$12 Million**
**in rebates**
**through June 1999**

**Actual through May 1999**

**Increase Purchase Card Usage to 90% by FY 2000 and Decrease Traditional Micro-Purchase ($2,500 and Less) Transaction Methods**

**TRANSACTIONS**

**Dollar Value of Purchase Actions:**
**FY1998 = $3.4B **
**FY1999 = $4.35B (Projected)**

## Cumulative Minimum Savings 

**Cumulative Minimum Savings **
**from Increased Purchase Card Usage**

**TRANSACTIONS**

*** Cost Savings figured at $20 per transaction**

**Cumulative Savings**
**$175M**** ***

## Overhaul of Financial Operations & Systems

**Overhaul of Financial ****Operations & Systems**

**Consolidating Systems**
**Increasing Accuracy**

## Reduce the Number of Financial Operations and Accounting Systems to 32 by FY 2003

**Reduce the Number of ****Financial Operations ****and Accounting Systems**** to 32 by FY 2003**

**324**

**109**

**102**

**32**

**NUMBER OF SYSTEMS**

## Reduce Unmatched Disbursements / Negative Unliquidated Obligations by 75% of 1998 Level

**Reduce Unmatched Disbursements / Negative Unliquidated Obligations by 75% of 1998 Level**

**82% Improvement**
**in Reconciling Disbursements **
**with **
**Official Accounting Records**

**BILLIONS**

**FY 1993**
**Baseline**

**FY 1997**

**FY 1998**

**FY 2000 GOAL**

**FY 1999**

**(As of 3Qtr)**

## Paperless  Contracting

**Paperless  Contracting**

**Contract Requirements**
**Solicitations**
**Awards/Modifications**
**Receipts/Acceptance**
**Invoices/payment**
**Delegated Contract Closeout ****(DCMC only)**

## Reduce Paper-bound Contracting Processes 

**Reduce Paper-bound Contracting Processes **
**by 50% by January 2000**

**PERCENT**

## Achieve a 90% Paperless Contracting Environment 

**Achieve a 90% Paperless Contracting Environment **
**by January 2000 (by Category)**

**PERCENT**

## Streamlining and Saving 
Through Competitive
Sourcing

The A-76 Process

**Streamlining and Saving **
**Through Competitive**
**Sourcing**
**The A-76 Process**

## Competitive and Strategic Sourcing- Compete 150K Positions by FY 2003 and 229K Positions by FY 2005

***NOTE:  Competitive and Strategic Sourcing goal is $11.2B savings by 2005.  Savings based on historic average of 20% per FTE competed ***_***regardless***_*** of competition results.***

**Competitive and Strategic Sourcing****- Compete 150K Positions by FY 2003 ****and 229K Positions by FY 2005**

***Positions***
***(Thousands)***

***Fiscal Year***

## Savings:  $11.2 Billion

**Savings:  $11.2 Billion**
**Competitive Sourcing**
**Programmed Savings FY97-05**

## 
Military Housing 
Privatization Initiative:  

Improving Quality of Life

**Military Housing **
**Privatization Initiative:  **
**Improving Quality of Life**

## Privatize 28,000 Military Housing Units by FY 2000

**Privatize 28,000 Military Housing Units by FY 2000**

***Housing Units***

**300K Housing Units**
**200K Need Repair**

## Energy & Utilities
Management

**Energy & Utilities**
**Management**

## Energy & Utilities Management Goal

**Energy & Utilities Management Goal**

**  ****Reduce energy consumption per square foot in our buildings and facilities 30 percent *****below 1985***** levels             by 2005 *****and***** 35 percent by 2010**

***“******Manage energy, not power infrastructure”***

**  ****Privatize 2,400 utilities systems by September 30, 2003**

## Reduce Energy Consumption 30% below 1985 levels 

**Reduce Energy Consumption 30% below 1985 levels **
**by 2005 and 35% by 2010 ***

*** Mandated per Executive Order 13123**

**Logistics **
**Transformation**

## Logistics Initiatives

**Logistics Initiatives**

**Reduce wholesale supply order-receipt time**
**Re-engineer product support**
**Re-engineer logistics processes**
**Re-engineer operational maintenance procedures**
**Modernize logistics information systems**

## Reduce Order Receipt Time by 50% of FY 97 Baseline(Requisitioned items for any class of supply submitted against the Wholesale System)

**Reduce Order Receipt Time by 50% of FY 97 Baseline****(Requisitioned items for any class of supply submitted against the Wholesale System)**

**DAYS**

## Total Asset Visibility & Accessibility- Achieve 90%Visibility of Items in Storage by FY 2000

**Total Asset Visibility & Accessibility****- Achieve 90%Visibility of Items in Storage by FY 2000**

**PERCENT**

## Reduce Secondary Item Inventory Balance to $56B by FY 2000

**Reduce Secondary Item Inventory ****Balance to $56B by FY 2000**

**BILLIONS**

## Framework for Longevity

**Framework for Longevity**

-  Change Management - Rapid Improvement Teams
-  Performance Management
-  Pilots/Experimentation
-  Congress / GAO / Industry Partnership

## Slide 32