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Accession Number ADA591431
Title Cost of Culture: Controlling DOD's Runaway O&M Spending.
Publication Date 2013
Media Count 9p
Personal Author J. J. Luker
Abstract Since September 11, 2001, the Department of Defense (DoD) has been engaged continuously in combat. As operations subside and DoD attempts to recapitalize its forces, it faces a different yet extremely critical threat: unsustainable operations and maintenance (O&M) cost growth. O&M costs are skyrocketing, reducing funding available for recapitalization. With major budget cuts looming, DoD must address the root causes of the rising costs. Several recent studies have attempted to pinpoint the root cause of the huge O&M cost growth. Many have discussed growing healthcare costs and others have dwelled on the increased use of contracted support. These are only symptoms of the problem, not the root causes. The O&M cost growth is, at its core, due to an underlying culture that does not incentivize development of cost-effective solutions. DoD must counter this growth by instituting incentives and rewards that encourage unit-level commanders to accomplish their assigned missions under budget. Effective incentives vary depending on whether DoD is operating at steady-state, in a war, or absorbing a postconflict drawdown. Potential solutions for each case are presented herein. O&M funds pay for DoD's 'day-to- day' operating expenses, including training, supply, and equipment maintenance of military units as well as the administrative and facilities infrastructure of military bases; salaries and benefits for most DoD civilian employees; depot maintenance activities; fuel purchases; flying hours; base operations; consumable supplies; health care for Active-duty Service personnel and other eligible beneficiaries; Reserve Component operations; and DoD-wide support operations including several combat support agencies, four intelligence agencies, and other agencies that provide common information services, contract administration, contract audit, logistics, and administrative support to the military departments.
Keywords Afghanistan conflict
Budget trends
Congress
Contractor support costs
Contractors
Cost analysis
Cost effectiveness
Cost growth trends
Cultural change
Culture
Department of defense
Healthcare costs
High costs
History
Incentive programs
Iraqi war
Medical services
Military budgets
Military commanders
Military culture
Military operations
Operations and maintenance cost growth
Outsourcing
Peacetime
Persian gulf war
Post- 9/11 cost growth
Postdrawdown cost growth
President(United states)
Reprints
Steady-state growth
Supported service costs
Use it or lose it mentality
Vietnam war
Wartime
Wartime cost growth

 
Source Agency Non Paid ADAS
NTIS Subject Category 70B - Management Practice
96 - Business & Economics
74 - Military Sciences
74G - Military Operations, Strategy, & Tactics
92D - Education, Law, & Humanities
Corporate Author Naval War Coll., Newport, RI.
Document Type Journal article
Title Note Journal article.
NTIS Issue Number 1411
Contract Number N/A

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