Pentagon chief eyes trimming post-Sept. 11 intelligence spending as part of sweeping review

Defense intelligence community to tighten belt

WASHINGTON — The defense intelligence community is combing its budgets to figure out where to cut 10 percent of its contractors as part of Defense Secretary Robert Gates’ drive to reduce costs in the Pentagon.

Defense officials told staffers on Capitol Hill that they expect a similar review to be carried out “for the broader intelligence community,” according to a congressional staffer who spoke on condition of anonymity to discuss the private briefing.

White House officials from the Obama and the Bush administrations tried to get rampant spending on contractors under control after the post-Sept. 11 surge to hire contractors to meet the demands of fighting terrorism and extremism.

More than 50 percent of the current intelligence work force was hired after the terrorist attacks of Sept. 11, 2001, according to the Office of the Director for National Intelligence. Several U.S. officials contacted by The Associated Press said they could not estimate the savings or the number of contractors who could lose their jobs under the proposed budget cuts.

What’s also not clear is how much any budget cutting would affect intelligence work or overlap with reductions that were already under way. The officials spoke on condition of anonymity because the budget analysis was ongoing.

That’s part of the homework project assigned to the acting under secretary for defense intelligence, Thomas Ferguson, who replaces James R. Clapper, the new director of national intelligence.

Overall government spending on contractors doubled from 2000 to 2008, exceeding $500 billion in 2008, according to Office of Management and Budget spokesman Kenneth Baer. The Obama administration had already set a goal of reducing overall use of contractors by 7 percent, or $40 billion, by 2011.

As part of trimming that cost, the Obama administration has cut spending on intelligence contracting by 15 percent, from the year 2007 to 2009, according to Baer. The percentage decrease for the last two years is still classified, but Baer says the “numbers have continued to go down.”

Within the CIA, for instance, since 2007, the agency has reduced its contractor work force by about 2,000, said CIA spokesman Paula Weiss. “By the end of 2011, we will have redirected $800 million that had been spent on contracting to other agency priorities,” she said.

Gates wants to see a similar spending drop in the defense intelligence agencies, like the Defense Intelligence Agency and the various military service intelligence agencies, as part of defense budget goals he announced this week.

In a memo, Gates ordered a review to be completed by Nov. 1 of all Defense Department intelligence missions, organizations, relationships and contracts to eliminate needless duplication.

Gates also directed an immediate 10 percent reduction in funding for contractors who provide management, analysis and engineering as well as a freeze on the number of senior executive positions in defense intelligence organizations.

The worldwide intelligence budget was roughly $75 billion in 2009, according to congressional testimony from the former national intelligence director, Dennis Blair. The Pentagon’s portion is estimated to be roughly 80 percent of that, or $60 billion.

The DNI says contractors who augment civilian and military intelligence staffs comprise 28 percent of the total force. Contractors tend to cost more than government employees.

But as that budget is classified, it’s not clear how much of that goes to acquisitions such as satellites and computer systems or rent, food service and facilities maintenance. The DNI says 70 percent of the entire intelligence budget is spent on such contracts, not contractors.

Ironically, the Pentagon had recently moved to add 20,000 employees to oversee future contracts. Baer says that was necessary because while the number of contractors has doubled, oversight staff has remained the same. He said the Office of the Director for National Intelligence also intends to expand its oversight staff, though the number of staff to be added is classified.