Wednesday, December 30, 2015

DoD's 100% Return on Investment

Alan Estevez has been the Principal Deputy Under Secretary of Defense for Acquisition, Technology and Logistics since his 2013 Senate confirmation. In that role, he helps develops and implement strategies, policies, and programs that increase the Department's warfighting capabilities, management efficiency, and buying power. He also supports his boss, the Under Secretary of Defense in matters related to acquisition, logistics and material readiness, research and engineering, weapon systems, operational energy, installations and environment and the defense industrial base.

Last June, he announced the Department's goal to shave $15 billion off of the amount they spend on service contracts. The Department spends more on service contracts than it does on weapon systems. Service contracts include such things as technical engineering, health care, shipping of materiel, tactical vehicle maintenance, and of course base maintenance.

But recently, Estevez said something else that got our attention. In a recent speech to DCMA (Defense Contract Management Agency), Estevez stated:
For every dollar I give DCMA, I get two dollars back as a return on investment. DCMA provides the best equipment to the best military on this planet. You should be proud of what you do every day. You are the independent eyes and ears of DoD.
Now that's pretty impressive don't you think. If fact, why stop at DCMA's $1.375 billion budget for this year? Why not double it, triple it? If Estevez quadruple's it, he'll spend $5.5 billion but he'll get back $11 billion.

One really wonders how Estevez calculates ROI (Return on Investment). Perhaps he learned his technique from the Beardstown Ladies.

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