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Pentagon eyes $100 billion in savings by trimming overhead

By Mike Mount, CNN Senior Pentagon Producer
  • Savings will come over 5 years beginning in 2012, defense secretary says
  • Secretary Gates has been outspoken about saving money
  • Savings will go back into personnel, military units and war-fighting capabilities

Washington (CNN) -- The Pentagon is out to save $100 billion over the next five years in a major push to cut overhead costs, according to U.S. Defense Secretary Robert Gates.

Gates officially unveiled his plan at a Pentagon news conference Monday, announcing he is putting department acquisition chief Ashton Carter in charge of finding where the $100 billion will come from in the budgets beginning in 2012.

"The department's leadership has already taken strong action in this area, and needs to do more," Gates said.

"Other savings can be found within programs and activities we do need, by conducting them more efficiently. ... I'm confident we'll succeed," he said.

The defense secretary has been discussing his plan to be more fiscally smart in the way the Pentagon spends money, often getting visibly upset when verbalizing his displeasure with congressional plans to force the purchase of what he calls unneeded and wasteful programs.

He has urged President Barack Obama to veto the 2011 defense budget if lawmakers keep programs he considers a waste of money, such as additional C-17 cargo planes or an alternate engine design for the F-35 Joint Strike Fighter. Gates also recently ordered the restructuring of the F-35 programs because of massive delays and cost overruns.

He has said he would put the savings back into personnel, military units and future war-fighting capabilities.

Carter said the cost-saving plan will save about 2 to 3 percent a year by forcing contract companies to absorb cost overruns, which now are put onto the Pentagon.

He said it will also encourage more competition between companies.

"In the rest of the economy, we expect this [competition]," Carter said.

"You get a better computer every year, and cheaper. But we haven't seen productivity growth in the defense economy, more has been costing more, and we need to reverse that trend and restore affordability to our programs," he said.