Army centralizes contracting, base management: New contracting command could consolidate acquisitions.

The Army is centralizing acquisition and installation management as part of a reorganization of its headquarters.

A new Contracting Command will oversee all acquisition activities, including contracting offices at the regional and installation levels. The restructuring "should produce efficiencies of scale and quality of operation." Army Secretary Thomas White said in a briefing for reporters.

White made it clear that one result of centralization will be more consolidated contracts. For example, he said, "We literally have hundreds of separate contracts across the Army to buy various types of products from Microsoft. And if you rolled that up into a strategic relationship, you would get the leverage of becoming one of their biggest customers."

All acquisition responsibilities are being removed from the Army Materiel Command and centralized under the Army acquisition executive. The Materiel Command awarded $18.2 billion in contracts in fiscal 2001 for everything from missiles and helicopters to groundskeeping and paving, a spokeswoman said.

In another important change, management of Army installations is being shifted away from major commands and base commanders.

"That's probably the most controversial part of this reorganization, because it changes how our field commanders are apportioned the dollars to run their installations," said Army Vice Chief of Staff Gen. John Keane. "In the Army, an installation commander, in most cases, is also a commanding general, and he has a garrison commander who works with him to run the installation."

In the new structure, garrison commanders will report to one of eight regional directors, each responsible for 20-26 installations, under the assistant chief of staff for installation management. Gen. Keane said the installation commander "will not receive the money to run his installation or what we call base operations accounts. That will go through another headquarters, and he will not touch that money. He will only receive the mission money that will help him train his force."

Centralization of installation management could make it easier to consolidate contracts so that a single contract might be awarded for products or services at a number of bases. It could yield economies of scale for base utilities, housing and other functions, officials said.

"We will establish an installations command that doesn't run through the major commands of the Army," Secretary White said. "Where the major commands in the past...have taxed the money on occasion or diverted it for other purposes, we're going to use the Air Force model here and the installations of the Army will report directly in to the assistant secretary for installations and environment."

Some generals have acknowledged that they diverted funds away from maintenance and repair of equipment and buildings, including housing, because they needed the money for more pressing concerns in recent years of tight military budgets.

Details of the new contracting procedures are still being drafted. "The implementing guidance is yet to be released," an Army spokeswoman said. The reorganization is scheduled to be completed by September.

White said the reorganization will more closely integrate the Secretariat -- the Army's civilian officials -- with the military staff to streamline decision-making.

Defense Secretary Donald Rumsfeld has ordered the services to cut their headquarters personnel by 15%. While the Army in the field has been cut by 40% since the end of the Cold War, the Pentagon Secretariat has grown. Secretary White pledged to "put the Secretariat on a diet."

RELATED ARTICLE: Air Force Promises "Agile Acquisition"

The Air Force has opened a new Acquisition Center of Excellence aimed at cutting through burdensome, unproductive processes that slow the fielding of new warfighting capabilities.

The new office will be charged with implementing "Agile Acquisition," a series of initiatives designed to streamline the Air Force's acquisition systems. Marvin Sambur, assistant secretary for acquisition, said the purpose of Agile Acquisition is "to shorten acquisition cycle times, insert new technologies into systems throughout their life cycles and deliver today's technology today."

"Too often, we complain that the law requires us to do this or to do that, when in fact it's our own regulations implementing the law that are the culprits," said Darleen Druyun, principal deputy assistant secretary for acquisition management. "Sometimes, we are our own worst enemies. That is about to change."