How Defense IT Will Cope With Billions In Cuts

The Pentagon is betting that spending on technology can save money and help it meet huge cuts in the defense budget that have been ordered and additional cuts that may be on the way.
The Congressional Super Committee's failure to agree on how to cut the massive federal deficit has implications for the CIOs who manage Uncle Sam's IT budget. Nowhere will the mandatory $1.2 billion in cuts over the next 10 years be felt more than at the Department of Defense, which is now on the hook for half of those cuts.

The DOD's IT budget request for fiscal 2012, at $38.4 billion, represents the largest IT outlay of any organization in the world. At least it did before the Super Committee failed to do its job. As a result, the Pentagon will be forced to reduce its planned IT spending as it looks for another $600 billion in cuts.

Until now, the DOD has been protective of its IT budget. It requested an 8% increase in fiscal 2012, even as its overall budget was to decline 5% to $670.9 billion. Since that budget request was submitted, the DOD has had its spending plans laid on the chopping block. In August, the White House ordered Defense to lop $450 billion in spending over 10 years. And now the mandated cuts triggered by the Super Committee's inaction ups that total another $600 billion, to around $1 trillion.

Secretary of Defense Leon Panetta last week said a cut of that size would be "devastating" to national defense. Lawmakers are mulling workarounds, such as moving billions in cuts to another part of the federal budget.

The CIOs of the DOD, Air Force, Army, Marines, and Navy are bracing for the worst. "I know it's going to be reduced. I just don't know how much," Lt. Gen. Susan Lawrence, the CIO of the Army, told me recently when discussing her IT budget. The Army had requested $10 billion for fiscal 2012. Lawrence has come up with a plan to "return" $1.5 billion to the Army budget, but that's not until 2015.

Defense officials are hesitant to cut IT spending too deeply because the armed forces need state-of-the-art network, intelligence-gathering, and end-user technologies and devices to do their jobs. DOD CIO Teri Takai, in a recent interview with InformationWeek at the Pentagon, said meeting the needs of the nation's war fighters is her No. 1 priority.

There's another reason to continue investing in defense IT: Done right, tech spending translates into efficiencies that can help the DOD meet its cost-cutting objectives. The Pentagon's IT Enterprise Strategy, due for public release any day, identifies 26 "lines of effort" to increase the efficiency, effectiveness, and security of its IT operations. Our story "Under Pressure, Pentagon Adopts New IT Strategy," lays out the details of that plan.

The Pentagon's IT leaders already have identified $3.5 billion in IT savings, but that's just a start--not nearly enough to cover $1 trillion in cuts. The principle of investing in IT to reap savings--a proven strategy among private sector CIOs--is about to be tested at DOD scale.

John Foley is editor of InformationWeek Government.

To find out more about John Foley, please visit his page.

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