The Department of Defense was created in 1949 to replace the more aggressively-titled Departments of War and Navy. Today, the major components of the DOD are the Army, Navy, Air Force, and Marine Corps. Each unit is responsible for a different aspect of peacekeeping, national security, and antiterrorism efforts. The largest Federal Department, the DOD employs nearly 2.5 million armed forces personnel, and a civilian staff of approximately 900,000. The department is headquartered near Washington D.C. in the Pentagon, one of the largest office buildings in the world. The Secretary of Defense, a civilian member of the presidential cabinet, controls the Department's military and civilian wings. Sub-cabinet civilians control the Army, the Air Force, and the Navy, and other agencies within the department, such as the National Security Agency, Ballistic Missile Defense Organization, and Defense Intelligence Agency. The Joint Chiefs of Staff, another prominent department, consists of several top generals and provides the president with tactical military advice.

Budgetary blues

Since the end of the Cold War, the military budget has dipped 70%, prompting several rounds of military base closures. Despite the economic hardship these closures have caused the host cities, some critics say the government is still spending too much on Defense. Other critics have blamed the Defense Department for misallocating resources. It's no big secret that the Department's acquisition process is both wasteful and time-consuming. Stories have circulated from the newsdesk to the watercooler about $640 toilet seats and $400 hammers. Plus, in an age where technology can become obsolete in as little as 18 months, the average development cycle at the Pentagon is 13 years. Furthermore, the government no longer has a monopoly on technological innovation. In fact, the next breakthrough is just as likely to be born in Silicon Valley as it is inside the Beltway. Most contractors avoid the DOD like the plague, claiming that the financial micromanagement involved isn't worth the money they stand to make.

Money in, money out

In the fall of 1997, Jacques Gansler, Undersecretary of Defense, testified before Congress that military readiness had seriously eroded since the Cold War. Congress decided to approve a $9 billion increase in defense spending, the largest since 1991. Unfortunately for the DOD, most of that money was allotted to the CIA, missile defense research, and special projects chosen by various congressional leaders. The Pentagon, desperately in need of an IT overhaul, finally realized that it would have to cut costs if it wanted to become up-to-date.

Reforming itself

In November 1997, the Secretary of Defense addressed the issue by introducing the Defense Reform Initiative, aimed at improving business practices, saving money, and modernizing the unit. Since then, many of the limitations on the use of commercial products have been dropped, and much of the time-consuming paperwork has now been eliminated. Though observers say it will take years for the changes to filter through the Pentagon's near-watertight bureaucracy, there is some evidence that the reforms have been - and will be - effective.

The results: positive

Since the initiative was launched, the DOD has started to reorganize the way it buys weapons. It is applying business sense borrowed from the public sector and reviewing its relationships with long-time contractors. The initiative seems to be gaining speed - and reaping results. Impressively, several contractors have completed projects for less than the original estimates, and the DOD has formed joint ventures with corporations to co-finance "dual use" projects. For example, The Navy worked with a Virginia-based company called Space Technology Development to develop the Naval Earth Map Observer, a $130 million project. The Defense Reform Initiative is expected to have a major impact on the public sector too. With the Pentagon planning to spend somewhere in the area of $48 to $60 billion on new products and upgrades each year for the next five years, the public will see much of this money as it shifts hands. Much of this money will be spent on making sure the Pentagon's information stays in the right hands. To that end, the DOD has begun working with CommVault Systems to make sure the information exchanged over Microsoft platforms stays secret. It is also investing in a "Shareable Courseware Object Reference Model" to ensure that all personnel have access to the most up-to-date training software and methodology available. Tax dollars at work, indeed.

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