Published: June 14, 2018

BudgetDEFENSENational Defense Authorization Act

On Thursday, May 24, 2018, the House passed the much anticipated $717 billion spending bill for fiscal year 2019, known as the National Defense Authorization Act (NDAA) on a bipartisan 351-66 vote. The bipartisan measure is now in the Senate pending amendment(s) and approval. Incorporated within the Act, and chiefly arranged to reduce costs through 2021, is a continued discussion of efficiency within the DoD’s Fourth Estate agencies.

What is the Fourth Estate?

The Fourth Estate is a Department of Defense (DoD) initiative put forward by the House Armed Services Committee Chairman Rep. Mac Thornberry (Rep. Texas). The primary objective of the Fourth Estate is to encourage further productivity and efficiency within the DoD’s civilian agencies. It is comprised of 28 civilian agencies, which are not part of the armed services, and employ over 200,000 civilian personnel and nearly 600,000 contractors.  The Fourth Estate has come under increasing criticism as it has grown from 7 percent of the DoD budget in 1990 to 18 percent today.

To accomplish its goals, the DoD intends to reduce agencies within the Fourth Estate by 25 percent by 2021.  The 25 percent in savings is pulled from logistics, human resources, contracting and real property management. Both Healthcare and IT are exempt from these cuts, as the DoD already has initiatives currently in place to lower costs in those industries. In addition, the intelligence community agencies are also exempt from any decreased spending. The 28 civilian agencies are to be replicated within already existing DoD agencies, where additional functions and personnel will be transferred.

The House Armed Services Committee Chairman Rep. Mac Thornberry’s vision includes reducing the expense of Fourth Estate agencies by one quarter in hopes of saving over $25 billion or more and reinvest back into the Pentagon.

Mapping Out Fourth Estate Initiatives

The original measures presented to the House in regards to the Fourth Estate, held during an April 18, 2018 House Armed Services Committee hearing, envisioned much more robust and drastic changes, but were met with skepticism and backlash from members of Congress. Originally, the proposal put forward from Rep. Mac Thornberry intended to completely eliminate seven DoD agencies, including:

  • Defense Information Systems Agency (DISA)
  • Defense Human Resources Activity (DHRA)
  • Defense Technical Information Center (DTIC)
  • Office of Economic Adjustment (OEA)
  • Test Resource Management Center (TRMC)
  • Defense Technology Security Administration (DTSA)
  • Washington Headquarters Services (WHS)

Recently, the White House weighed in on the matter and stated its stance is to scrap plans to completely remove the original seven mentioned agencies put forward from Rep. Mac Thornberry and will now leave such cuts up to the current DoD Chief Management Officer (CMO), John H. Gibson II.

After much speculation and many revisions and amendments, what remains in the House version of the 2019 National Defense Authorization Act is a requirement for DoD to eliminate only two agencies: WHS and DISA; review and restructure several more, and cut personnel by 25 percent. It may be messy situation now, but given some time we will learn the final details of the Fourth Estate initiative. 

Who is the CMO and what are his duties?

The CMO, John H. Gibson of Texas, was nominated by President Donald Trump on January 2018, and approved by the Senate in February 2018. He has been leading the effort charged to encourage reform in the Fourth Estate.  Previous to his new position, Mr. Gibson was the Deputy Chief Management Officer of the Department of Defense. Mr. Gibson, in addition to his current Deputy Defense Secretary Patrick M. Shanahan, believes there is tremendous opportunity for reform within DoD and the Fourth Estate will boost productivity and modernization within the department. However, the CMO faces numerous obstacles in his new role.  One concern presented in the House Services Committee hearing included questioning how he will manage all of the agencies under his jurisdiction. Another noted the newness of the CMO’s office; it may not have the “institutional capability” to manage many agencies while developing the process of building a new bureaucracy. There is further question that the CMO, who is the direct line of authority over the various defense agencies, may be too overwhelmed with new responsibilities and may have to develop management initiatives across the department, leaving much less time and flexibility for adjustments.

A final vote for passage of the 2019 NDAA is slated for later this year. As of June 11, 2018, the Senate is reviewing 4 proposed amendments to the bill.