Are Defense Department Civilians Behind the DOD’s Spending Problem? Not So Much

aerial view of pentagon

On June 3, 25 defense analysts from several think tanks announced that there are three areas of defense reform consensus:

  • Closing down unnecessary military bases and facilities
  • Reforming military compensation
  • Shrinking the number of Department of Defense (DOD) civilian employees

Justifying the last point, the analysts wrote in a letter to DOD and to Capitol Hill that:

From 2001 to 2012, the active duty military grew by just 3.4 percent. Yet over the same timeframe, the number of civilian defense employees grew by 17 percent, an increase five times greater than the armed forces.

Sounds bad, right? Sounds like the DOD civilian workforce is out of control, right? Wrong.

The problem with the analysts’ letter is the baseline they use. They picked the period when the DOD civilian workforce was the smallest it’s been since at least 1981, perhaps since before the U.S. entry in World War II. The number of DOD civilians hovered around 1.1 million throughout the 1980s.

During the 1990s, the DOD civilian workforce shrunk from 1 million in 1990 to 649,000 in 2002, according to White House data. Those 350,000 DOD civilians represented the bulk of federal civilian jobs lost during the '90s, thanks in large part to the Federal Workforce Restructuring Act of 1994, but also to reduced DOD expenditures as the Cold War drew to a close.

Many of the civilians shed in the 1990s were acquisition professionals – not just contracting officers, but engineers and scientists – who oversaw contracts and would call out contractors when they were pulling a fast one on the government.

Much of the hiring in the 2000s, a relatively modest increase of 128,000 civilian employees, was to rebuild the workforce gaps created during the 1990s that became an issue as the U.S. fought wars in Afghanistan, Iraq, and elsewhere and DOD spending nearly doubled.

In fact, what really grew during this time was service contract spending. Instead of hiring as many federal civilians as the DOD would have liked, arbitrary workforce caps and a White House that ideologically preferred contractors – whether they cost less or not or actually performed better – led to extraordinary growth in DOD contract spending. It was during this time that more money in contract spending was being used on services rather than on goods, like tanks, planes, bullets, food, fuel, etc.

It got so out of hand that contractors were getting hired to oversee contractors; the DOD was losing control of its affairs. Plus it was costing a ton of money, and still is. 

Here’s a DOD chart where they compare spending on civilians, uniformed military personnel, and service contractors.

The graphic says service contractors are “Increasingly Unaffordable” and that “the savings are here.”

Defense analysts should know that cutting federal civilians could lead to those functions simply being handed over to more expensive contractors, which wouldn’t save any money at all and might cost us more. Thus, to really save money while maintaining an effective DOD, the total force mix has to be analyzed as a whole.

Oddly, the 25 analysts conclude that cutting civilians is a solution while acknowledging that “it is unclear if that growth [in DOD civilians] was appropriately matched to the changing needs of a downsizing military and shifting strategy.” Without assessing the service contractor part of the workforce – which is not mentioned in their letter – it’s hard to conclude that DOD civilians are really the problem.

But wait, that’s not all. Even as these analysts target federal civilians, some in DOD and elsewhere still want to spend even more on contractors. Last week, Steven Aftergood at the Federation of American Scientists got a hold of a new Congressional Research Service report on DOD contractors. As Aftergood wrote of the report, "The Pentagon’s reliance on contractors to support military operations has now become so extensive that some argue it should be … even more extensive!"

back to Blog