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Ray Odierno, John McHugh Preview Army Service Contract Cuts

Gen. Ray Odierno
Gen. Ray Odierno

U.S. Army Chief of Staff Gen. Ray Odierno and Secretary John McHugh have announced that the Army is in the process of cutting its spending on services contracts to drive efficiency, Federal News Radio reported Thursday.

Jared Serbu writes that the contract spending cuts could continue over the next three years and would add to other reductions in the contracted workforce through the Defense Department‘s insourcing initiative.

“We have over-relied on contractors to do tasks at our installations that I believe can be done in many different ways, to include using soldiers,” Odierno told the Senate Appropriations Committee, according to the report.

The Army particularly plans to cut $2 billion from the buildup of logistics support contracts and train soldiers or Army civilians to take over equipment sustainment, base security and other work, Serbu reports.

John McHugh
John McHugh

“As part of our restructuring initiative, what we’re doing at headquarters and upper levels is taking 25 percent off the administrative staff and trying to ensure that where we do use contractors, it’s justifiable, not just in terms of the mission, but in terms of dollars,” McHugh added.

The report said the Army’s proposed reforms for 2016 are equivalent to $6 billion in cost savings but include plans that will still need approval from Congress.

According to Serbu, these plans include base realignment and closures and a reallocation of the service’s helicopters across active-duty, Reserve and National Guard units.

Odierno and McHugh have indicated that these measures meet the “bare minimum” of the requirements needed to fulfill the defense strategy and assume that Congress will lift the sequester-level budget caps, the report said.

The Army’s announcement also comes as a new report by the Congressional Budget Office found DoD to have the highest percentage of contract spending across the federal government.

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