Home' Army Acquisition Logistics and Technology Magazine : Army ALT January-March 2012 Contents 130 Army AL&T Magazine
readiness," Hale said. "You need more
than just trained people. You also have to
give them the equipment that they need
to win on the battlefield."
Hale cited examples in DoD history---
the 10 percent real reduction in the
total defense budget from 1985 to 1989,
which included a 29 percent reduction
in procurement; and the 23 percent
cut in the defense budget from 1989 to
1994, representing a 51 percent real cut
in procurement---to show that "cuts in
modernization will be disproportionately
large early in the reduction."
He sees these large procurement cuts as the
result of the services' reluctance to reduce
force structure. "Holding on to force
structure means we keep up our operat-
ing costs, our fixed top line that tends to
cause the focus to be on modernization."
Acquisition also is affected in the develop-
ment of major weapons and the necessary
decisions to restrain requirements to keep
costs down. "If you look back over the
long period of our budgetary history, it
seems like new generations of weapons
cost about two to three times as much in
terms of real unit costs," Hale said. "You
have to get at this early in the life cycle
of a weapon in order to really control its
cost. We need to break this rule of con-
IMPORTANCE OF AUDITING
Hale discussed the role that audits can
play in reducing costs, particularly in
acquisition programs. He encouraged the
use of the Defense Contract Audit Agency
(DCAA) to help develop auditable finan-
Hale acknowledged that DCAA is deal-
ing with problems that have hindered
audits in the past, and he requested assis-
tance from program executive officers and
program managers to improve the audit
process while also helping to ensure that
audits are requested on time and with rel-
"Leave enough time in your acquisition
plans for an audit if you're going to have
one. There may be areas where you say, 'I
know these costs are within reason. I don't
need an audit.' ... But if you're going to
do it, you need enough lead time," he said.
"... Most of all, we need your help in lean-
ing on contractors to give us good pricing
proposals. That's the single biggest cause
of delay. We get into these things and find
out the information is not reasonable, par-
ticularly with regard to subcontractors."
Auditing also is an important process
for Panetta, who has requested that
the process be sped up and given more
emphasis, Hale added. DoD is one of
only two federal agencies, the other being
the Department of Homeland Security,
that have never had a "clean opinion" on
financial statements, he said.
In addition to complying with the Govern-
ment Management and Reform Act of 1994,
which requires auditable statements at all
federal agencies, Hale said the biggest rea-
son that auditable statements are vital is "...
to reassure the public that we're good stew-
ards of their money. Although we do a lot
of things right in financial management
and we do know where we are spending
money, I think it is really tough to convince
the public that we are reasonable stewards
when we keep flunking these audits."
Hale stressed the need for involvement
and cooperation from all areas of DoD,
particularly the acquisition community.
"You have some of the toughest problems,
as usual, in the financial management
area," he said.
Finding realistic ways to cut the defense
budget and protect national security is a
huge task, especially when coupled with
the uncertainty of sequestration.
"We face large cuts in the defense budget
over the next few years, and they're man-
dated in law. I know we're going to need
to slow modernization, but we've got to
do it in a way that is strategic and mod-
ernize in the areas of highest priority,"
Hale said. "And most of all, we've got to
look for ways to hold down costs, and I
know you hear that all the time, but it's
important. I hope that you'll work with
me to make good use of organizations like
DCAA and ... on things like auditable
financial statements, to reassure the pub-
lic that we're good stewards of their funds."
BRITTANY ASHCROFT provides contract
support to the U.S. Army Acquisition Sup-
port Center through BRTRC Technology
Marketing Group. She has nearly 10 years'
experience in magazine editing and holds a
B.A. in English from Elmhurst College.
Under Secretary of Defense (Comptroller) Robert
F. Hale addressed DoD s financial outlook
during the PEO/SYSCOM Commanders
Conference. "We face large cuts in the defense
budget over the next few years, and they re
mandated in law. I know we re going to need to
slow modernization, but we ve got to do it in a
way that is strategic and modernize in the areas
of highest priority," Hale said. (DoD photo by
Links Archive Army ALT October-December 2011 Army ALT April-June 2012 Navigation Previous Page Next Page