Retired Admiral Pushes Pentagon to Run a Tighter Ship
Cohen Aide Launches Several Reforms

Copyright 1998 The Washington Post Company

By Bradley Graham
Washington Post Staff Writer
Friday, November 6, 1998
Rear Admiral Houley Bio

When first asked to oversee the streamlining of the Pentagon, Bill Houley wasn't interested. A retired rear admiral, he had spent 35 years in military service and knew that history was littered with other well-intentioned efforts to reform the defense bureaucracy.

But Defense Secretary William S. Cohen wanted Houley because of his reputation as a hard-nosed, sometimes irascible manager not hidebound by tradition. If the reform campaign was to be taken seriously and maintain momentum, Cohen and his aides figured it needed someone like Houley.

?We wanted an iconoclast who knew how the place is run,? a senior Pentagon aide said.

Houley finally took the job six months ago, agreeing to supervise the broad reform effort launched by Cohen in November 1997 to cut Pentagon office jobs, open more defense work to private-sector bids and move to paperless contracting by relying on the Internet. Houley said he accepted Cohen's offer after being convinced that the effort was not just ?the drill of the year.?

Besides, something in him couldn't resist the challenge. As a sailor, he recalled, he had aspired to become an admiral ?to fix the Navy,? only to conclude ?that it wasn't the Navy that was broken, it was the Department of Defense.?

The effort, dubbed the Defense Reform Initiative, seemed a hodgepodge of changes when announced a year ago. It included plans to slash by one-third the 3,000 jobs in the Office of the Secretary of Defense; make other substantial reductions in military headquarters staffs and 13 Defense agencies; switch from reams of paper to electronic networks for issuing regulations, ordering items and paying bills; privatize the utility systems at all military bases; and establish a chancellor for education and professional development to oversee the department's 30 civilian schools.

Taken together, the measures were portrayed by officials as part money-saving move, part effort to position the Pentagon better for post-Cold War challenges. While having little to do directly with how the Pentagon prepares for major wars, the reforms were said to bear heavily on how the defense establishment would do business, particularly in areas of contracting, travel planning and household goods transportation.

Lately, officials have been marking the plan's first anniversary by playing up a few successes -- notably, greater reliance on electronic catalogues for Pentagon purchasing and establishment of a new Defense Threat Reduction Agency from the remnants of three Cold War bureaucracies responsible for monitoring compliance with treaties and inhibiting the spread of nuclear weapons and some advanced technologies.

But officials also acknowledge having a long way to go in realizing all the personnel reductions and outsourcing of defense activities originally envisioned.

Conventional wisdom holds that consensus-building, not confrontation, is the better tactic when attempting to overhaul one of the world's largest bureaucracies. But Houley puts little store in diplomacy as a means of nudging the Pentagon in new directions.

?The preferred way of doing business in the department, where possible, is to gain consensus because everything you do involves multiple players,? said the onetime nuclear submariner. ?I make no effort to gain consensus, although I do coordinate views making clear where everyone stands.?

He also shuns the go-slow approach.

?I've never had much patience, which I guess as much as anything else limited my naval career,? said Houley, who left the Navy in 1994 with two-star rank. ?That was the ingredient that got me hired here. They specifically wanted someone who wasn't terribly patient.?

After retiring from military service, Houley went to work for Lockheed Martin Corp. on international submarine programs. Since returning full-time to the Pentagon, he has set up shop down the hall from Cohen's office and acquired a staff of five aides, a number kept small to avoid the impression that he was expanding the bureaucracy he had been hired to shrink.

His weapon of choice in battling the bureaucracy is the DRID, or Defense Reform Initiative Directive. Each DRID covers a particular aspect of change; more than 40 DRIDs have been issued so far under such general headings as ?downsizing and restructuring,? ?best business practices,? ?defense agency performance contracts? and ?competition and infrastructure.?

Living up to his reputation, Houley has tended to be blunt and insistent in pressing for compliance, adding to the irritation felt by some military officials. ?His style can be a problem,? said one senior Navy administrator.

His most difficult moments have come over the reform plan's most controversial provision, the one mandating that more Pentagon work be open to competitive bids from private firms. This is threatening to tens of thousands of defense employees who fear losing their jobs to private-sector bidders, although precedent shows that private firms have won only about half such competitions. Some members of Congress, particularly those with military jobs in their home districts, also view the Pentagon's initiative warily as a forerunner to additional base closings.

?Not everyone is leaning forward to make this initiative happen as quickly as possible,? Houley said. ?We've taken a hard line and said we're going to do this.?

Leading the resistance, the Air Force has argued it should not be held to the new bidding requirements if it could save money in other ways by consolidating and reengineering.

But Houley and other senior defense officials, while welcoming any alternative economizing, have refused to accept substitutes for greater competitive sourcing. Reinforcing this position, a high-level Pentagon panel recently raised the number of jobs up for bids over the next several years from about 150,000 to 237,000 in such areas as janitorial services, payroll, personnel services and property management.

The innovation that Houley and other defense reformers like to tout most is a computerized catalogue now surpassing 3 million items. Called E-Mall, for electronic mall, the network allows military maintenance and logistics agents at far-flung bases to order supplies and spare parts with the point-and-click ease of a computer screen.

In the past, employees looking, say, for parts to repair a broken helicopter rotor or a damaged truck gear would wade through thousands of pages of technical manuals to locate the items, then search piles of vendor catalogues to select suppliers. Now the same information can be scanned quickly on an electronic network.

For vendors, too, the computerized systems are making business with the Pentagon a less daunting and time-consuming experience. Instead of having to register individually with about 800 military contract and finance offices across the country, a contractor can fill out a two-page form that is stored online and is accessible to all military agents.

Houley isn't estimating how much money all the reforms should eventually save. But he does worry that some in the Pentagon may feel less compelled by budget pressures to comply with the initiatives because of recent indications that the White House and Congress will boost defense spending over the next few years in response to pleas from the military chiefs.

?There frankly is not enough money around to solve our problems,? Houley said.


William Houley

Title: Director of defense reform, Department of Defense.

Age: 61

Education: Bachelor of science degree, U.S. Naval Academy.

Family: Married, five children.

Previous jobs: Rear admiral, (retired 1994); nuclear submarine commander; commander, U.S. Naval Submarine School; various Navy staff assignments overseeing training, personnel policy and nuclear warfare planning; commander, Submarine Group Two; director, Navy Science, Technology Requirements, and Test and Evaluation; international submarine and anti-submarine programs, Lockheed Martin Corp.

Hobbies: Reading, enjoying the outdoors.

On Pentagon reform: ?My original wish list was to be an admiral so that I could fix the Navy. Then I discovered when I got to be an admiral that it wasn't the Navy that was broken, it was the Department of Defense.?