The Defense Finance and Accounting Service -- a 16,000-member accounting cadre that processes payrolls and invoices and administers military trust funds for the armed forces -- will face a massive restructuring that includes site closures and layoffs.
The DFAS cutback, announced as part of last week's decision by the Department of Defense to close 33 military bases, includes shuttering more than 20 locations across the country and instituting layoffs that could potentially approach 13,000 by the year 2011. Most of those furloughs would be civilians.
The closures would affect DFAS sites such as Rock Island, Ill., Patuxent River, Md., Charleston, S.C., Orlando, Fla., San Bernardino and Oakland, Calif., and Kansas City, Mo.
The plan also calls for a realignment of DFAS locations in Arlington, Va., and Cleveland by relocating and consolidating the offices' corporate and administrative functions to the Defense Supply Center in Columbus, Ohio, the Buckley Air Base in Denver, or the Federal Center in Indianapolis. A minimal liaison staff would remain in both Arlington and Cleveland.
The DoD estimated that it would absorb a one-time charge of $282.1 million and realize an annual savings of roughly $120.5 million through fiscal 2011. Over a 20-year period, the DoD estimated savings of $1.3 million via the DFAS consolidation.
A DoD spokesman said that he "could not comment on anything beyond the report."The DFAS was created in 1991. In fiscal 2004, the DFAS administered payroll services to roughly 5.9 million people, processed more than 12.6 million invoices from defense contractors, disbursed more than $455 billion and managed more than $234 billion in military trust funds.
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