Posted on 12/23/2003 4:25:01 AM PST by Calpernia
Dov Zakheim, undersecretary of defense (comptroller) and the Defense Department's chief financial officer, often refers to DoD as America's largest corporation. And during a recent interview, he did not hesitate to characterize that reference as a vision that can be a bit overwhelming at times.
"Sometimes it's a scary vision," Zakheim said in a half-serious, half- joking manner, "to wake up in the morning and say, 'My God, we're trying to drag the largest corporation in America into the 21st century.'"
But it's a vision that seems to have served him -- and all of DoD -- well during the past few years, helping him transform department budget practices, and at the same time, advancing transformation efforts throughout the department and individual services.
Zakheim said the first step he took upon taking office was to streamline the budget process and provide a "degree of consistency that wasn't there before."
He explained that budget process basically was broken down into two parts: the program review, performed by the Office of Director of Program Analysis and Evaluation, and the budget review, performed by Zakheim's office -- two processes that were more independent than integrated at the time.
"The program review traditionally looked at programs -- did you want to buy an F-16, as opposed to an F-18, as opposed to an aircraft carrier - - and they were decisions made in the summer prior to the start of the new fiscal year," Zakheim explained. "What then happened was we would review the actual budget proposals, and those who didn't get what they wanted in the program review looked at the budget review as a vehicle for overturning prior decisions. And in many cases, that happened. The two reviews did not share a common database, nor did they harmoniously integrate the people who were managing each of the reviews."
Today, all that has changed.
Zakheim said that during the past year, the two staffs have become fully integrated, working hand-in-hand to ensure that what happens during the program review does not change in the budget review.
"We simply issue a document that confirms, in budgetary terms, the decisions made in programmatic terms," he said.
So what does all this mean for transformation?
"It allows planners -- and this is particularly critical for those involved in transformation -- to think ahead, to recognize that a program decision is a program decision is a program decision, and they can plan ahead, knowing that decision will not be reversed," he said. "The transformation planners, who need that long-term perspective, can now rely on decisions made in the program review, knowing full well that all the budget review will do is add the budgetary flesh on the bones of those decisions. That is a major change."
Another significant change benefiting transformation efforts is Zakheim's initiative to examine the budget from a two-year perspective.
"This has allowed us to make a commitment not to tamper with financial resources from one year to the next," Zakheim explained. "So in effect, what we're doing is carrying forward the full vision of transformation that really began last year. And as many people recall, last year we demonstrated a full-blown budgetary commitment to transformation that was much more difficult to do in previous fiscal year budgets."
He cited increased funding for development and production of unmanned aerial vehicles and armed unmanned aerial vehicles as examples of how the budget process has aided transformation efforts.
"Those are long-term programs, and we couldn't ensure funding without a long-term budgetary vision," he said.
A second benefit to a two-year budget approach, Zakheim pointed out, is it discourages commanders from spending last-minute money at the end of the fiscal year, because they are now confident their transformation programs will be funded into the next year.
Finally, the comptroller pointed to protection of operations and maintenance accounts as another initiative aiding transformation programs. O&M accounts are the bread and butter accounts for the services, funding such areas a readiness, flying hours and ship steaming days, as well as maintenance of equipment and infrastructure.
Zakheim said this commitment is vital, because in the past there was a "premeditated underfunding of operations and maintenance accounts."
"What that meant was we had to options: either go to Congress and ask for supplemental funding or raid the acquisition accounts," he said. "And raiding of acquisition accounts was no longer a viable option, because we were shifting from legacy systems to new, transformational systems.
"We felt it was important for commanders not to be in constant fear of shortfalls in flying hours, or steaming hours, or tank miles, or spare parts and upgrading facilities," he continued. "So we're making sure those accounts are fully funded, because of if you can't train, some transformation efforts come to a halt."
Zakheim said the department has been "pretty successful" in protecting the O&M accounts. "Last year was the first year in many, many years in which none of the service chiefs felt O&M was underfunded," he said.
At the same time, DoD has invested more than $70 billion in procurement and continues to increase funding for science and technology.
"We're pushing ahead with transformational programs such as cruise- missile-carrying Trident submarines, and increasing our bandwidth capabilities so we have greater ability to absorb and disseminate information. All these things manifested themselves in OEF (Operation Enduing Freedom) and OIF (Operation Iraqi Freedom). But we would not be able to do this had we not been clear about, first, what we needed for O&M accounts, and secondly, protected those accounts.
Part one of a three-part series
Dov Zakheim, undersecretary of defense often refers to DoD as America's largest corporation.
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