Table Of ContentDefense ManageMent RefoRM
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PeteR Levine
D ef en s e
M a nag eM en t
Ref o R M
How to Make the Pentagon Work Better and Cost Less
stanfoRD UniveRsity PRess
stanfoRD, CaLifoRnia
stanford University Press
stanford, California
©2020 by the Board of trustees of the Leland stanford Junior University. all rights
reserved.
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Contents
foreword by Carl Levin vii
acknowledgments ix
introduction:
The Problem of Defense Management 1
Finding a Targeted Solution to the Right Set of Problems 5
Getting the Initiative Approved 11
Getting the Initiative Implemented on a Lasting Basis 17
The Case Studies 22
1 Civilian Personnel Reform at the Department of Defense 26
The Civil Service Demonstration Projects 30
The Enactment of NSPS Legislation 37
The Implementation of NSPS 44
The NSPS Pay-for-Performance System 52
Labor Relations and the Collapse of the NSPS 67
The Road Forward 77
2 Lessons from the never-ending search for acquisition
Reform 82
The Need for Acquisition Reform 87
1981–1982: The Carlucci Initiatives 93
1983–1985: The Era of Waste, Fraud, and Abuse 99
1986–1992: The Packard Commission 107
1993–2004: Reinventing Government 116
2007–2014: The WSARA Era 129
vi Contents
Assessment 137
The Road Forward 143
3 auditing the Pentagon 149
The Road to the CFO Act and the Goal of a Clean Audit 156
The 1990s: The Bush I and Clinton Administrations 164
The 2000s: The Bush II and Obama Administrations 186
Assessment 216
afterword 224
notes 229
index 321
foRewoRD
Rarely a month goes by without a stream of articles detailing waste and
mismanagement in the Pentagon. on December 1, 2018, a New York Times
editorial proclaimed that “The Pentagon Doesn’t Know where its Money
goes.” Later that month, an op-ed piece in the same newspaper stated that
“These toilet seat Lids aren’t gold-Plated, but They Cost $14,000,” while a
commentary published by the Heritage foundation brashly asserted, “Pen-
tagon waste shouldn’t stop Congress from fully equipping the Military.”
Peter Levine’s book explains in clear detail why the Pentagon has
failed a long-required audit and why its acquisition system continues to
produce examples of overspending, along with other management fail-
ures. That much has been done before. Peter’s book, however, looks not
just at Pentagon failures, but also at real-world examples of reforms that
have worked. He builds on the DoD’s mixed history of failure and suc-
cess to describe the path that needs to be followed to achieve lasting
management reforms. By showing not only where and why Pentagon
management has fallen short, but where it can succeed, Peter has deliv-
ered an optimistic and realistic way forward.
Throughout the book and its case studies, Peter combines careful de-
tailed analysis with common sense and an awareness of human aspects
of reform efforts in the legislative and executive branches. for instance,
rather than beating up on a Pentagon bureaucracy stereotypically accused
of defending its own turf, Peter sees a natural testing of ideas by people of
good will who offer important institutional perspectives. a process that
allows those views and experiences to be voiced, he concludes, provides
greater legitimacy and, if it is well organized, can promote more success-
ful and lasting reform.
Driving the story of this book is an appreciation of the Pentagon’s vital
purpose of helping to defend our nation and the importance of sound
viii foreword
management for the Pentagon’s $700 billion budget and trillions of dollars
of assets. when that management falls short, the result is not only a waste
of the taxpayers’ dollars, but a trail of negative stories that can undermine
our nation’s security and our people’s belief in a democratic government.
Peter Levine’s years on the front lines of government management
make him the ideal person to tell this story. Peter served on my staff for
twenty-eight years—first at the senate governmental affairs Commit-
tee and then at the senate armed services Committee, where he became
general counsel and then staff director. in this time, Peter saw reforms
that successfully leapt legislative hurdles, and others that went nowhere.
He saw that for legislated reform to be effective, it must be the product of
a deliberative process and a collaborative development of solutions, and—
equally importantly—it must be received, understood, and executed in
the federal agencies. Peter’s knowledge and commitment to defense man-
agement issues was so deep and objective that his counsel was sought out
by members and staff of both parties.
after leaving my staff, Peter was appointed as the Defense Depart-
ment’s deputy chief management officer (DCMo)—the senior DoD
official in charge of management reform. He did so well in that job that
he was soon asked to step into the vacant position of under secretary
of defense for personnel and readiness, with policy responsibility for a
military and civilian workforce of more than 2.2 million. This experience
served to deepen his understanding of the obstacles to reform and the
paths to success.
The result is a book that is the product of a unique combination of
legislative and executive branch background. our country is the benefi-
ciary of Peter Levine’s public service and will benefit from the practical
wisdom he gained, as chronicled in this book. it will serve for years to
come as a primer both for those who seek to understand how the Depart-
ment of Defense works, and for those who accept management respon-
sibility and strive to help the department to effectively fulfill its vital role.
Carl Levin
U.s. senator from Michigan, 1977–2015
Chair, senate armed services Committee, 2001–2003 and 2007–2015
aCKnowLeDgMents
when i was preparing to leave the Pentagon at the end of 2016, Dr. David
Chu, the president of the institute for Defense analyses (iDa), invited
me to come to the iDa and write a book on defense management re-
form. This book would not exist without Dr. Chu’s advocacy and support.
Defense Management Reform is rooted in the experiences of my thirty-
year career in the legislative and executive branches of government—a
career that was made possible when senator Carl Levin brought me onto
his staff in 1987. Those of us who had the privilege of working for sena-
tor Levin know that he was not only an energetic and intelligent public
servant but also a wonderful person. He also showed us the importance
of working across the aisle, forming enduring partnerships with many
outstanding Republican senators, including John warner, John McCain,
and Bill Cohen.
i learned almost as much from the many talented professional staff
members with whom i worked over the years. i am particularly grateful
to my three Democratic staff directors—Linda gustitus, David Lyles,
and Rick DeBobes, and to my Republican partners of many years—John
Bonsell, Pablo Carrillo, and Bill greenwalt, for their friendship and sup-
port. There are too many others to thank by name, but i believe that if
the american people could see the hard work and civic spirit shown on a
daily basis by congressional staff, they would have a much higher opinion
of their Congress.
after eighteen years with the senate armed services Committee, i
moved to the Pentagon when senator Levin retired at the end of the
113th Congress. secretary of Defense ash Carter and Deputy secre-
tary Bob work not only brought me onto their team but also taught
me important lessons about effective leadership in the executive branch.
i am also indebted to my two Pentagon deputies—stephanie Barna at
