The IDF said it would begin taking steps to save NIS 30 billion over the next decade under a comprehensive cost-saving plan that Chief of General Staff Lt.-Gen. Gabi Ashkenazi and Defense Ministry Dir.-Gen. Pinhas Buchris approved Wednesday.
The plan was prepared by the McKinsey & Company consulting group which won a three-year multimillion dollar contract in July 2008 to create a 10-year streamlining plan for the IDF. It is one of the world's leading consulting companies and previously conducted similar projects for the US and British militaries.
The plan, formulated over the past year by McKinsey consultants granted access to classified IDF bases and documents, will in the coming year focus on the military's construction and procurement departments. In the first stage of the plan, the IDF will work to save NIS 350-450 million in 2010 and increase this annually until it steadies at around NIS 1.6 billion in 2014.
The second stage of the plan, on which work will only begin in 2010, will focus on IDF manpower and human resources. By 2017, the IDF hopes to save some NIS 30 billion. Under an earlier agreement with the Treasury, all of the money saved will go toward the procurement of additional weapons for the IDF.
The immediate changes will be to the construction departments in the IDF and the Defense Ministry. In the report, McKinsey concludes that there is no reason to have two parallel departments and instead recommended establishing a single department that would be responsible for new construction and maintenance of current IDF bases. Costs for these operations comes close to NIS 3.3 billion a year.
The report also recommended that the Defense Ministry cut personnel at its mission in New York by 30 percent.