Deputy Defense Secretary Nominee Talks DOD Audit, Strengthening Industrial Base

View Online Deputy Defense Secretary Nominee Talks DOD Audit, Strengthening Industrial Base Feb. 26, 2025 | By C. Todd Lopez A war room may serve as a nerve center for Defense Department efforts to pass an audit, said Stephen A. Feinberg, who testified yesterday before the Senate Armed Services Committee after he was nominated by President Donald J. Trump to the position of deputy defense secretary.  If confirmed, Feinberg would be responsible for the Defense Department's day-to-day business and would have primary responsibility for managing the defense budget and executing the defense secretary's priorities.  With current budget challenges threatening the ability of military services to meet current and future needs, Feinberg said he thinks there is a lot of room for improvement in how the department conducts business.  "There is great opportunity to improve our cost structure, our efficiency, our operations to really save a lot of money that could be plowed into mission," he said.  Noting that DOD does not currently have good financial accountability or financial metrics, Feinberg said it also has too many poor financial systems in place.  " awful lot of low-hanging fruit there, so we can improve our cost structure," he said. "This is in my wheelhouse ... I spent a career helping organizations improve."  Lawmakers asked Feinberg, who has more than 40 years of experience in private sector financial markets, how he would go about helping the department pass an audit.  He said those responsible for the Pentagon budget are often not as involved in the details as he thinks they should be, and he said he would change that.  "In my humble opinion, at times, some of the people in the operational execution jobs are not involved in detail," Feinberg said. "We're going to set up a war room if I'm fortunate enough to be confirmed and we're going to go over every program, every cost, line by line, with an army of people, until it's done."  In an effort to pass an audit, Feinberg said, there will be a focus on details that result in DOD knowing exactly where it spends its money.  "We're going to understand where our costs are, why we don't have our audit, where the financial problems are, and everyone's come up with a plan to fix it," he said. For strengthening and growing the defense industrial base — the American companies who build hardware for the nation's military — Feinberg said there need to be people within DOD who are far more familiar with how private sector companies work and what needs to be done to make it easier to develop and manufacture weapons and munitions. "Our supply chain is definitely weak. Our workforce needs to be improved," he said. "A big piece of improving our supply chain is working more closely with our private sector. We need people inside of government understand their issues, understand what drives their boards, what drives the pressure they get from shareholders."  He said that knowledge will enable the Defense Department to work with more companies willing to enter the defense industrial base.  We certainly have the manufacturing capability to meet the shortages in our supply chain, and we've got to encourage those companies to do it, Feinberg said.  Last week, Defense Secretary Pete Hegseth said DOD would refocus about 8% of its budget away from nonlethal programs and inefficiencies and put that money instead toward the president's "America First" priorities for national defense.  Feinberg cited for lawmakers an inefficiency in DOD program requirements that drives up the cost of programs like aircraft, helicopters and ships. It's something he thinks needs to change.  Our program requirements are very rigid and expensive, he said. "We can get the job done with the simplification of many of those requirements."

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