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Commission Expected To Propose Privatization Of Military Activities Panel Likely To Urge Turning Health Care, Supply Roles Over To Commercial Markets

Washington Post

An independent commission trying to streamline the U.S. military is moving toward proposing large-scale privatization of such defense support activities as depot maintenance, supply logistics, financial services and family health care.

Persuaded that many things done by the Pentagon could be handled more efficiently and more cheaply by the private sector, the congressionally authorized commission is drafting recommendations calling for aggressive change in the way the Defense Department does business.

Commission members have yet to review the draft report, but interviews indicate broad agreement on shifting away from the Pentagon operations for which competitive commercial markets exist.

“There’s a growing consensus that we need to move toward more privatization,” said Franklin Raines, a commission member and vice chairman of the Federal National Mortgage Association.

“The burden of proof in the future should be why something shouldn’t be privatized rather than why it should be.”

Any drive to remove from the Pentagon the responsibility for staffing much of the vast support infrastructure built up during the Cold War would face considerable resistance.

Thousands of federal jobs and more than $40 billion in annual defense expenditures are at stake.

Military officials have been reluctant to give up control over many support activities, worried that in an emergency, private contractors may be unable to provide the requisite surge in supplies and services. And almost everyone in the Pentagon seems to have at least one horror story involving a private contractor; some of the government’s most egregious cases of fraud, waste and abuse in the 1980s resulted from Pentagon contracting gone awry.

Moreover, in the new Republican-led Congress, any attempt to privatize a chunk of the Pentagon risks widening the divide between defense hawks, who want more military spending, and deficit hawks, who would like to see the Pentagon cut waste first.

But for the Commission on Roles and Missions, set up by Congress in 1993 to recommend ways to eliminate excessive duplication among the rival military services, the privatization issue affords a useful strategic theme for defining the military’s core competencies.

“The feeling on the commission is: Wherever it makes sense to privatize, that’s where we should be going,” said Bernard Trainor, a retired Marine Corps lieutenant general and one of 11 commission members.

Much public attention has focused on the commission’s deliberations on the overlapping combat tasks among the Army, Navy, Air Force and Marine Corps.

Should each service continue to maintain its own air wing?

What is the optimal mix of Army and Marine Corps ground forces?

Which service should take the lead in missile defense?

While the commissioners still intend to address these battlefield disputes, John White, commission chairman, has begun to signal in interviews and speeches that his group’s most important contribution likely will be in pushing the Pentagon to embrace several broad principles of institutional change.

In addition to privatization, White has indicated the commission will reinforce two themes already popular with Defense Secretary William J. Perry: increased “jointness” among the services in operations, training and weapons development as well as a greater role for the military reserves in national defense.

With the commission’s final report not due for another two months, members have yet to decide how specific they want to be about what to privatize.

Some defense activities would be easier to shift into the private sector than others. Among the easiest, advocates say, would be those business operations - payroll, accounting, information management systems - for which a large, competitive commercial market exists.