Better Buying Power

Pentagon acquisition executive Ashton Carter on Monday unveiled an initiative to streamline the manner in which the Defense Department buys goods and services and deals with industry. Purchases of those goods and services consume about $400 billion of the Pentagon’s annual $700 billion budget, he told reporters during a Pentagon briefing. Carter said he wants to incentivize industry to increase productivity. He also seeks to adapt DOD management practices to encourage efficiency. “The objective here is productivity and the reduction of unproductive cost,” he said. The defense sector has not seen the same productivity growth as other economic sectors, a trend that Carter wants “to reverse.” He said he will be issuing guidance laying out the details of these actions in the coming weeks. This initiative is part of the broader DOD-wide drive to reduce overhead costs by more than $100 billion over five years starting in Fiscal 2012. (Carter press briefing transcript) (Carter briefing slides and letter) (Boeing statement)