The Over Regulation of DoD

The Economist recently published a piece The Over-Regulated America critical of financial and healthcare reform laws that were noble efforts to prevent another crisis, abuse, or skyrocketing costs but imposed a huge burden.  Politics aside, the DoD faces related burdens of over-regulation and would benefit from exploring the author’s recommendations.

America needs a smarter approach to regulation. First, all important rules should be subjected to cost-benefit analysis by an independent watchdog. The results should be made public before the rule is enacted. All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorizes them.

More important, rules need to be much simpler. When regulators try to write an all-purpose instruction manual, the truly important dos and don’ts are lost in an ocean of verbiage. Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them. Legislators should pass simple rules, and leave regulators to enforce them.

Deputy Secretary of Defense Dr. Ashton Carter in September 2010 as the Under Secretary for Acquisition laid out the Better Buying Power strategy.  It included:

  • Reduce the number of OSD-level reviews to those necessary to support major investment decisions or to uncover and respond to significant program execution issues
  • Eliminate low-value-added statutory processes
  • Reduce by half, the volume and cost of internal and congressional reports
  • Reduce non-value-added overhead imposed on industry

Dr. Carter’s leadership in championing these reforms has been much needed in OSD.  While I haven’t seen any interim progress reports, there is still ample room for improving DoD operations.  The OSD culture will take years to change from an over-regulated mantra to more of a facilitating and guiding approach.  I hope leaders and staffs can see the benefits and are laying the ground work of real reforms within their organizations.

Each new policy, while well intended, is additive to the mountains of policies that organizations struggle to understand, apply, and comply with.  It would be very interesting to see cost benefit analyses and sunset clauses for each major new policy.  The approach would force DoD leaders to assess the true impact, including the cost and energy, of implementing this new policy, and weigh it against the anticipated benefit.  As it takes significant energy, debate, and political power to repeal a bad policy, a sunset clause would limit the long term growth of policy mountains.  If 5-10 years later the policy still has value, it can be reauthorized with any necessary updates based on feedback, effectiveness, and assessment of the current environment.

Similarly, Congress via the National Defense Authorization Act (NDAA) imposes dozens of new policies on the DoD annually.  As the Congressional Budget Office (CBO) scores legislation for the economic/budget impact, the GAO could develop and publish a cost-benefit analysis of all proposed defense legislation prior to voting on the NDAA.

The DoD bureaucracy needs to be aggressively simplified and policies streamlined.  While we operate in a very complex enterprise, the over-regulation of DoD has taken a considerable toll in delivering cost efficient, effective, and innovative solutions.

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