The Pentagon’s ongoing review of its Fourth Estate agencies has resulted in $5 billion of cost savings, Defense Secretary Mark Esper said on Saturday, with plans to continue the department-wide reform process in 2020.

Esper told attendees at the Reagan National Defense Form in California the Pentagon will call on Congress to support the wide swath of program cuts to reinforce the department’s plan to shift funds away from legacy programs toward higher-priority modernization efforts.

Secretary of Defense Mark Esper (DoD photo by U.S. Army Sgt. Amber I. Smith)

“By decreasing overhead, divesting legacy activities and reducing lower-priority programs, we were able to invest more in the warfighting requirements of the services,” Esper said during his keynote address at the event. “However, we can’t do this without the backing of Congress. When our budget comes to the Hill next year, I ask you to support our proposals and enact the legislative changes needed to get these reforms across the finish line.”

The department-wide reform effort was launched over the summer during Esper’s first week as defense secretary, expanding upon the “night court” process he initiated in his previous role leading the Army that found $33 billion the service could shift to modernization efforts over the next five years. 

The reform effort began with DoD’s 27 Fourth Estate agencies, which includes the Defense Intelligence Agency, DISA and the National Reconnaissance Office, with cuts to be made on a rolling basis (Defense Daily, Sept. 9). 

“And to be clear, this is just the beginning. I expect every leader in each military service, [the Office of the Secretary of Defense], the Joint Staff and in the combatant commands to review their budgets with the same rigor and reprioritize to support the National Defense Strategy,” Esper said.

Esper said the reform process will start up again early next year “from a clean sheet” as senior leadership begins working on its plans for the 2021 budget. 

The ongoing cost saving measures arrive while the Pentagon faces losing $5 billion buying power for every quarter the department has to operate under a continuing resolution.

“We understand that the nation’s resources are limited. To enable and sustain investment in critical next-generation capabilities, our future budgets must free up those resources by divesting from legacy systems and low-priority activities,” Esper said.