DEFENSE 

EFFICIENCIES

Action Needed to 

Improve Evaluation of 

Initiatives

Report to Congressional Committees

January 2014

GAO-14-134

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-134, a report to 

congressional committees

January 2014

DEFENSE EFFICIENCIES

Action Needed to Improve Evaluation of Initiatives

Why GAO Did This Study

In May 2010, the Secretary of Defense 

announced a department-wide initiative 

with the goal of achieving efficiencies 

and reducing excess overhead costs 

while reinvesting those savings in 

sustaining DOD’s force structure and 

modernizing its weapons portfolio. The 

Secretary tasked the military 

departments and SOCOM to find 

estimated savings of about $100 billion 

over the period of fiscal years 2012 to 

2016. For fiscal years 2013 and 2014, 

DOD identified additional efficiency 

initiatives. The National Defense 

Authorization Act for Fiscal Year 2012

mandated that GAO assess the extent 

to which DOD has tracked and realized 

savings proposed pursuant to the 

initiative to identify $100 billion in 

efficiencies. As the second report in 

response to this mandate, this report

addresses 1) DOD's progress in 

adjusting its approach to tracking and 

reporting on the implementation of its

efficiency initiatives since GAO’s 

December 2012 report, and 2) the 

extent to which DOD is evaluating the 

impact of its initiatives. GAO reviewed 

guidance, and analyzed and discussed 

information developed after December 

2012 with DOD officials. 

What GAO Recommends

GAO recommends that DOD establish 

a requirement for the military 

departments and SOCOM to develop 

approaches for evaluating the impact 

of their efficiency initiatives, such as 

developing performance measures or 

other indicators. DOD concurred with 

GAO’s recommendation, and provided 

additional comments that it will cease 

tracking initiatives that strictly call for 

program terminations. GAO believes 

this to be a reasonable approach.

What GAO Found

The Department of Defense (DOD) has refined its approach for tracking and 

reporting on the status of efficiency initiatives by establishing specific 

requirements to standardize and expand the type of information that the military

departments (Army, Navy, and Air Force) and U.S. Special Operations 

Command (SOCOM) report to senior decision makers. Initially, DOD provided 

general direction through emails, briefings, and training, which gave the military 

departments and SOCOM flexibility to selectively report on the initiatives that 

they believed were important, resulting in inconsistencies. For example, prior to 

February 2013, all but the Navy had chosen to report on all their initiatives. In 

February 2013, the DOD Comptroller issued written guidance that specified the 

type of information to be reported, including 1) whether original net savings 

projections are being met, and 2) any associated program or milestone risks. In 

instances where original net savings projects were not met or risks were 

identified, the guidance required further detail such as how implementation would 

be achieved. As a result, in their March 2013 reports, the military departments 

and SOCOM only reported details on those initiatives that were not achieving 

original net savings estimates or where risk had been identified. GAO observed, 

during this review, that information on all initiatives was now unavailable to DOD 

decision makers, thus hindering their ability to assess implementation progress 

across the full range of initiatives. Comptroller officials agreed that such 

information would enhance DOD’s oversight, and in October 2013, the DOD 

Comptroller issued updated guidance, directing that this information also be 

reported on initiatives on track to achieve savings or not experiencing risk. The 

military departments and SOCOM subsequently began submitting reports with 

this broader set of information. 

The military departments and SOCOM have taken steps to evaluate the impact 

of some of their efficiency initiatives, such as establishing performance measures 

to assess their impact on achieving desired outcomes. However, this has largely 

occurred on an ad hoc basis and varies by initiative because DOD has not 

required such evaluations. As a result, DOD lacks a systematic basis for 

evaluating whether its various initiatives have improved the efficiency or 

effectiveness of its programs or activities. In setting forth initiatives, the Secretary 

of Defense intended for DOD to improve the effectiveness and efficiency of its 

programs and activities, and that related initiatives should be specific, actionable, 

and measurable. While DOD has provided direction on how the military 

departments and SOCOM are to report on implementation status, this direction 

does not require them to develop approaches for evaluating the impact of their 

initiatives. In practice, the military departments and SOCOM varied in the extent 

to which they evaluated initiatives, including whether they had established 

measures or other indicators to assess outcomes. For example, GAO found 

instances where the military departments and SOCOM had established 

measures and assessed progress for some but not all initiatives. Developing a 

more systematic approach to evaluating the impact of its initiatives could provide 

DOD with more complete information to assess whether the initiatives are 

accomplishing desired outcomes, beyond achieving savings, and whether 

adjustments are needed in the scope of implementing the initiatives.

View GAO-14-134. For more information, 

contact Zina D. Merritt at 202-512-5257 or 

merrittz@gao.gov.
Page i GAO-14-134 Defense Efficiencies

Letter 1

Background 3

DOD Has Taken Steps to Further Refine Its Approach to Track 

and Report on Its Efficiency Initiatives 8

Military Departments and SOCOM Vary in the Extent and Nature 

of Their Efforts to Evaluate the Impact of Their Efficiency 

Initiatives 11

Conclusions 15

Recommendation for Executive Action 16

Agency Comments and Our Evaluation 16

Appendix I Scope and Methodology 19

Appendix II Comments from the Department of Defense 20

Appendix III GAO Contact and Staff Acknowledgments 21

Table

Table 1: Projected Savings Identified by the Military Departments 

and SOCOM under the Secretary of Defense’s Efficiency 

Initiative (Fiscal Years 2012 through 2016) 4

Contents
Page ii GAO-14-134 Defense Efficiencies

Abbreviations

DOD Department of Defense 

DCMO Deputy Chief Management Officer

MDUR More Disciplined Use of Resources 

OMB Office of Management and Budget 

SOCOM U.S. Special Operations Command 

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Page 1 GAO-14-134 Defense Efficiencies

441 G St. N.W.

Washington, DC 20548

January 17, 2014

Congressional Committees

In May 2010,1 the Secretary of Defense announced that the Department 

of Defense (DOD) was to undertake a department-wide initiative to 

assess how the department is staffed, organized, and operated with the 

goal of reducing excess overhead costs, and reinvesting those savings in 

sustaining DOD’s current force structure2

Information accompanying DOD’s fiscal year 2012 budget request 

outlined specific efficiency initiatives identified by the military departments 

and SOCOM. Prior to the beginning of fiscal year 2012, DOD’s 

Comptroller and Deputy Chief Management Officer (DCMO) began 

developing an approach for the military departments and SOCOM to track 

and report on their efforts to implement efficiency initiatives and realize 

savings.

and modernizing its weapons 

portfolio. The Secretary’s initiative targeted both short- and long-term 

improvements and set specific goals and targets for achieving savings 

and efficiencies, which are expected to be achieved from fiscal years 

2012 through 2016. As part of this effort, the Secretary of Defense tasked 

the military departments (Army, Navy, and Air Force) and other 

components including U.S. Special Operations Command (SOCOM) to 

find savings of about $100 billion in overhead costs over the specified 

time period. About one-third of these savings would be used to fund 

higher-than-expected operating costs and the remaining two-thirds—over 

$70 billion—would be reinvested in high-priority military capabilities in 

fiscal years 2012 through 2016. Of this amount, about $11 billion was 

projected to be achieved in fiscal year 2012 and available for 

reinvestment, and about $14 billion was projected to be achieved and 

available for reinvestment in fiscal year 2013.

The National Defense Authorization Act for Fiscal Year 2012 mandated 

GAO to assess the extent to which DOD has tracked and realized the 

 1

Remarks as delivered by former Secretary of Defense Robert M. Gates, Abilene, Kansas, 

May 8, 2010.

2

Force structure is the number, size, and composition of the units that make up U.S. 

defense forces (e.g., divisions, brigades, ships, air wings, and squadrons). 
Page 2 GAO-14-134 Defense Efficiencies

savings proposed pursuant to the initiative to identify at least $100 billion 

in efficiencies during fiscal years 2012 through 2016, and to submit a 

report annually for each of those fiscal years.3 In December 2012, we 

issued our first report in response to this requirement.4

This report addresses 1) DOD’s progress in adjusting its approach to 

tracking and reporting on the implementation of its efficiency initiatives 

since we issued our December 2012 report; and 2) the extent to which 

DOD is evaluating the impact of its initiatives on DOD’s programs and 

activities. To perform our work, we reviewed guidance and documentation 

issued at the department-wide level as well as within the military 

departments and SOCOM to identify adjustments to tracking and 

reporting requirements since our December 2012 report. We also 

interviewed officials from the offices of the Comptroller and DCMO, the 

military departments, and SOCOM who are involved in monitoring the 

implementation of its efficiency initiatives to discuss their approach to 

tracking and reporting on the initiatives. Specifically, we obtained 

available information from each of the military departments and SOCOM, 

including briefings prepared for DOD officials, on the current status of 

efficiency initiatives, how original estimates of savings compared with 

We reported that 

DOD had developed an approach to track and report on the 

implementation of its efficiency initiatives, but the approach had some 

limitations affecting its ability to monitor progress toward achieving 

programmatic and financial goals. To ensure more complete and 

consistent reporting, we recommended that DOD develop guidance that 

would standardize definitions and methodologies for DOD components to 

use in reporting their efficiency initiatives and savings, including defining 

specific types of costs associated with implementing its initiatives. Since 

then, DOD has continued to refine its approach to monitoring 

implementation of its efficiency initiatives, including issuing additional 

guidance clarifying requirements for tracking and reporting. In addition, 

DOD included additional efficiency initiatives in information accompanying 

its fiscal years 2013 and 2014 budget requests, and has announced its 

intent to implement an additional round of efficiency initiatives in fiscal 

year 2015.

 3

See Pub. L. No.112-81, § 1054 (2011).

4

GAO, Defense Management: Opportunities Exist to Improve Information Used in 

Monitoring Status of Efficiency Initiatives, GAO-13-105R (Washington, D.C.: Dec. 4, 

2012).
Page 3 GAO-14-134 Defense Efficiencies

savings realized to date, and any program or timeline risks associated 

with implementing the initiatives. Additionally, we reviewed existing 

guidance to identify any requirements for the evaluation of efficiency 

initiatives. We then analyzed information provided by each of the military 

departments and SOCOM as well as interviewed officials serving as focal 

points to determine the expected outcome or impact for individual 

initiatives, and what steps they have taken to evaluate the impact of those 

efficiency initiatives. For example, based on discussions with officials, we 

identified examples of initiatives where performance measures or other 

indicators had or had not been established, but did not evaluate the 

application or appropriateness of the measures or other indicators.

We conducted this performance audit from May 2013 through January 

2014 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

As part of its fiscal year 2012 budget request, DOD outlined estimated 

savings of about $178 billion to be realized over a 5-year time period 

beginning in fiscal year 2012. According to DOD, these savings included 

about $154 billion from the Secretary’s initiative and about $24 billion 

from other sources. Specifically,

• The military departments and SOCOM identified a total of $100 billion 

in savings as a result of their efforts to support the Secretary’s 

initiative. A majority of the projected savings identified by the military 

departments and SOCOM (approximately $70 billion, or 70 percent) 

was planned to be reinvested in high-priority military needs—such as 

enhancing weapon systems—while the remainder was planned to be 

used to address operating costs resulting from areas such as health 

care and training.

• In addition to the $100 billion from the military departments and 

SOCOM, DOD proposed a $78 billion reduction in its overall budget 

plan over a 5-year time period, covering fiscal years 2012 through 

2016, which reflected a 2.6 percent reduction from DOD’s fiscal year 

2011 budget submission over the same time period. Of this amount, 

$54 billion reflected projected savings identified from a health care 

policy assessment, government-wide civilian pay freeze, and other 

specific areas identified by the Secretary where immediate action 

Background
Page 4 GAO-14-134 Defense Efficiencies

could be taken department-wide. The remaining $24 billion reflected 

revised economic assumptions, projected savings from restructuring 

the Joint Strike Fighter weapon program, and projected savings from 

reducing the size of the Army and Marine Corps.

Information accompanying DOD’s fiscal year 2012 budget request 

catalogued the $100 billion in savings from the military departments and 

SOCOM under the following four categories:

• reorganizations, such as restructuring headquarters management and 

eliminating unneeded task forces;

• better business practices, such as reducing energy consumption;

• program reductions and terminations, such as terminating weapon 

system programs; and

• reductions in lower priority programs, such as shifting funding 

requests from military construction projects to base operations.

Table 1 shows the specific amounts of projected savings reported for 

each category and military department.

Table 1: Projected Savings Identified by the Military Departments and SOCOM under the Secretary of Defense’s Efficiency 

Initiative (Fiscal Years 2012 through 2016) 

Dollars in billions

Fiscal years 2012 through 2016

Category of reduction Army Navy Air Force SOCOM

Total for fiscal years 

2012 through 2016

Reorganizations 5.4 15.4 4.2 0 25.0

Better business practices 10.3 14.1 20.6 .4 45.4

Program reductions/terminations 11.0 5.5 3.7 1.3 21.5

Reductions in lower priority programs 2.8 0 4.8 .6 8.2

Total 29.5 35 33.3 2.3 100.1

Source: DOD.

Under the Consolidated Appropriations Act for 2012, the Secretary of 

Defense was required to submit a report to the congressional defense 

committees on the $100 billion in savings that derived from the efficiency 
Page 5 GAO-14-134 Defense Efficiencies

initiatives identified by the military departments.5

• the budget account from which each savings identified will be derived;

Among other things, the 

Act also required the Secretary to report on the following:

• the number of military personnel and full-time civilian employees of 

the federal government affected by such savings;

• the estimated reductions in the number and funding of contractor 

personnel caused by such savings;

• a specific description of activities or services that will be affected by 

such savings, including the locations of such activities or services; 

and

• certain information regarding each reinvestment planned to be funded 

with efficiency initiative savings.6

In June 2012, DOD submitted its report to the congressional defense 

committees and provided some information on the categories above. 

Among other things, at that time, DOD reported that it was on track to 

meet estimated savings targets for all of its efficiency initiatives. However, 

the report did not include a comprehensive analysis of reinvestments 

because, according to DOD, many areas in which reinvestments had 

occurred due to the efficiency initiatives included in the fiscal year 2012 

President’s Budget request had been offset by major force structure 

changes and other reductions in its fiscal year 2013 budget request. In 

briefings to the Comptroller delivered in February 2013 and March 2013, 

the military departments and SOCOM reported that they remain, with a 

few exceptions, on track to meet original savings estimates associated 

with their individual efficiency initiatives. At the time of our review, DOD 

had not compiled DOD-level summary information on its progress in 

achieving its original savings estimate of $100 billion. DOD officials cited 

various reasons why compiling and reporting on this information may not 

be feasible. For example, they noted that the need to apply spending 

reductions in response to sequestration7

 5

See Pub. L. No. 112-74, § 8123 (2011). Although the provisions do not discuss SOCOM, 

DOD’s report included similar information for the command. 

affected funding levels for many 

6

See § 8123(1), (2). 

7

Sequestration is the reduction or cancellation of budgetary resources by presidential 

order. The Budget Control Act of 2011, Pub. L. No. 112-25 (2011), as amended, requires 

the President to order a sequestration under certain circumstances. The Act also imposes 

discretionary spending limits.
Page 6 GAO-14-134 Defense Efficiencies

programs, including areas targeted for efficiency initiatives. As a result, 

DOD had to adjust plans for executing programs as well as for 

implementing initiatives, such as adjusting the scope of initiatives or the 

timing of actual or planned actions for implementation. Because of the 

variability in its programs and funding amounts, DOD officials stated that, 

at a certain point, it becomes difficult to isolate whether savings were 

achieved solely due to implementing initiatives rather than a combination 

of factors.

We have previously reported on opportunities for DOD to improve 

tracking and reporting on cost savings and efficiencies. For example, in 

March 2012, we reported that DOD took steps to examine its 

headquarters resources for potential efficiencies, but that it faced an 

underlying challenge of not having complete and reliable headquarters 

information available to make related assessments and decisions.8 To 

improve DOD’s ability to identify how many headquarters personnel it 

has, we recommended that the Secretary of Defense direct the Director of 

Administration and Management, in consultation with the Under Secretary 

of Defense for Personnel and Readiness, to revise its DOD Instruction 

5100.73, Major DOD Headquarters Activities, to, among other things, 

include all major DOD headquarters activity organizations. DOD partially 

concurred with our recommendation and commented that the 

shortcomings in the instruction have limited impact on the management of 

the department. In July 2012, we reported that, as part of one of its 

efficiency initiatives, the Air Force estimated it could save about $1.7 

billion in its training program by reducing live flying hours and taking other 

steps, such as increasing the use of virtual training, but lacked a 

methodology for determining the costs of virtual training and therefore, did 

not consider these costs in its estimate.9

 8

GAO, Defense Headquarters: Further Efforts to Examine Resource Needs and Improve 

Data Could Provide Additional Opportunities for Cost Savings, 

To improve decision makers’

visibility over the costs related to virtual training, we recommended that 

the Secretary of Defense direct the Secretary of the Air Force to develop 

a methodology for collecting and tracking cost data for virtual training and 

use this cost data to help inform future decisions regarding the mix of live 

and virtual training. DOD concurred with our recommendation and 

GAO-12-345 (Washington, 

D.C.: Mar. 21, 2012). 

9

GAO, Air Force Training: Actions Needed to Better Manage and Determine Costs of 

Virtual Training Efforts, GAO-12-727 (Washington, D.C.: July 19, 2012). 
Page 7 GAO-14-134 Defense Efficiencies

identified actions being taken to enhance its ability to capture costs 

related to virtual training.

Additionally, in December 2012, we reported that DOD had developed an 

approach for the military departments and SOCOM to follow in tracking 

and reporting on the status of efficiency initiatives; however, DOD’s 

approach had some limitations that resulted in incomplete reporting which 

could limit the visibility of senior leaders in monitoring progress toward 

achieving programmatic and financial goals. Specifically, the offices of the 

Comptroller and DCMO had provided general direction through emails, 

briefings, and training, and, according to officials, had given the military 

departments and SOCOM flexibility to report on the efficiency initiatives 

that they felt were most important. In practice, the Army, Air Force, and 

SOCOM had reported on all of their efficiency initiatives, while the Navy 

reported on a subset of its initiatives based on what it deemed to be at 

medium or high risk of experiencing implementation issues or adversely 

affecting the Navy’s ability to carry out its mission. With respect to 

realized savings, we reported that the military departments and SOCOM 

told us they were on track to realize estimated savings, but found some 

instances where certain costs were not considered. For example, for its 

initiative to reduce fleet shore command personnel from U.S. Pacific Fleet 

and U.S. Fleet Forces Command, the Navy did not account for potential 

increases in relocation costs for moving personnel to other areas within 

the Navy. We found that the military departments and SOCOM were not 

reporting consistent information or complete cost information because 

they had not received written guidance with standardized definitions and 

methodologies. Rather, the direction provided by the offices of the 

Comptroller and DCMO did not specify whether all of the costs associated 

with implementing an efficiency initiative, including costs not initially 

identified, should be included. To ensure more complete and consistent 

reporting, we recommended that DOD develop guidance with 

standardized definitions and methodologies for the military departments 

and SOCOM to use in reporting. Further, we recommended that guidance 

should define reporting requirements for such things as the specific types 

of costs associated with implementing the initiatives, including 

implementation costs that were not initially identified in calculations of net 

savings. DOD agreed with the spirit and intent of our recommendation 

and indicated it planned to issue additional formal guidance in the 

February 2013 timeframe. The status of DOD’s implementation of this 

recommendation is discussed in more detail later in this report.

Since initiating its initial round of initiatives for fiscal year 2012, DOD has 

continued to identify and implement efficiency initiatives. Specifically, in 
Page 8 GAO-14-134 Defense Efficiencies

information accompanying its fiscal years 2013 and 2014 budget 

requests, DOD identified additional efficiency initiatives, referred to as 

More Disciplined Use of Resources (MDUR) initiatives. These initiatives 

are expected to generate $60 billion in savings for the period of fiscal 

years 2013 through 2017 and an additional $34 billion for the period of 

fiscal years 2014 through 2018. While savings generated by the 

Secretary’s fiscal year 2012 efficiency initiatives were to be reinvested, 

savings from the MDUR initiatives were intended to help the department 

meet reductions to its budget, and therefore will not be reinvested. More 

recently, on July 31, 2013, as part of DOD’s Strategic Choices and 

Management Review, the Secretary announced his plan to implement an 

additional round of efficiency initiatives in fiscal year 2015. According to 

the Secretary, a tenet of the review was the need to maximize savings 

from reducing DOD’s overhead, administrative costs, and other 

institutional expenses. These initiatives would include management 

reforms, coupled with consolidations, personnel cuts, and spending 

reductions that would reduce DOD’s overhead and operating costs by 

some $10 billion over the next 5 years and almost $40 billion over the 

next decade.

DOD has taken steps to further refine its approach to its tracking and 

reporting on the implementation of its efficiency initiatives. Specifically, 

DOD issued written guidance that standardizes and expands the type of 

information on efficiency initiatives that the military departments and 

SOCOM are expected to report, which may improve visibility on the 

progress and risks in implementation for DOD decision makers. 

Moreover, in commenting on a draft of this report, DOD stated that it will

cease to track initiatives once they have been implemented and will select 

for detailed tracking only those initiatives where this information will help it 

manage more effectively.

Following our December 2012 report, the Comptroller issued written 

guidance in February 2013 establishing a standardized format for 

reporting on the fiscal year 2012 efficiency initiatives as well as the fiscal 

year 2013 MDUR initiatives.10

 10See Memorandum from the Under Secretary of Defense (Comptroller), Fiscal Year (FY) 

2013 More Disciplined Use of Resources (MDUR) and Congressional Interest Items 

Reporting Requirements (Feb. 8, 2013). This memorandum was addressed to the heads 

of various DOD components; for the purposes of this report, we focus on the military 

departments and SOCOM.

According to DOD officials, this guidance is 

DOD Has Taken 

Steps to Further 

Refine Its Approach 

to Track and Report 

on Its Efficiency 

Initiatives
Page 9 GAO-14-134 Defense Efficiencies

also applicable to initiatives identified in fiscal year 2014 and any future 

initiatives. In contrast to the way they reported before, the military 

departments and SOCOM were now expected to report consistently and 

provide the status of their efficiency initiatives, including summary 

information related to (1) whether original net savings projections across 

the Future Years Defense Program11 are being met, (2) risks to 

program(s), mission(s), or resources associated with the efficiency 

initiative (characterized as “low”, “medium”, or “high” risk), and (3) any 

risks to “milestones” or the implementation status of the efficiency 

initiative (e.g., characterized as “on track,” “off track but can meet major 

milestones,” or “off track and cannot meet major milestones”). Only in 

instances where the military departments and SOCOM identified 

programs that were not achieving original net savings estimates or where 

program or milestone risk had been identified, the guidance requires 

further detail, including how implementation would be achieved. Further, 

all of the information was to be reported in a manner that mirrored the 

descriptions contained in DOD’s fiscal year 2012 budget request 

justification book for the efficiency initiatives, whereby some of the 

efficiency initiatives were collapsed into broader groups of initiatives 

referred to by descriptive titles.12

In reviewing the military departments’ and SOCOM’s February 2013 and 

March 2013 reports, we observed that, consistent with the 

aforementioned February 2013 guidance, the military departments and 

SOCOM reported details associated with only those efficiency initiatives 

that were not achieving original net savings estimates or where program 

or milestone risk had been identified. As a result, detailed information on 

the full range of efficiency initiatives and related programs was not 

included in their reports. For example, the Air Force has as many as 10 

In February and March 2013, using the 

new February 2013 guidance, the military departments and SOCOM 

completed the first round of semi-annual reporting on the fiscal year 2012 

efficiency initiatives and fiscal year 2013 MDUR initiatives.

 11The Future Years Defense Program is DOD’s financial plan over a 6-year period. 

12The February 2013 OUSD Comptroller memo called for a listing of each initiative by title 

that was reflected in DOD’s 2012 budget request justification book. The justification book 

summarized initiative savings under four general categories, seven funding categories, 

and, for each military department and SOCOM, more descriptive titles, such as “reduce 

recruiting and retention incentives” or “reduce energy consumption.” The military 

departments and SOCOM used the descriptive titles when reporting on their efficiency 

initiatives. 
Page 10 GAO-14-134 Defense Efficiencies

individual initiatives that comprise its acquisition management initiative. 

Absent a requirement in the February 2013 guidance to report on each of 

those underlying initiatives, DOD decision makers would only receive 

information on the overall acquisition management initiative. Moreover, as 

a result of the reporting direction, DOD decision makers would receive 

detailed information on the overall acquisition management initiative only 

if the initiative is not meeting original savings estimates, or where 

program or milestone risk had been identified. Prior to the February 2013 

guidance, some departments and SOCOM had previously chosen to 

report on all their initiatives. In reviewing the reports developed by the 

military departments and SOCOM in February 2013 and March 2013, we 

observed that information on all initiatives was now unavailable to DOD 

decision makers, thus hindering their ability to assess implementation 

progress across the full range of efficiencies. We discussed with DOD 

Comptroller officials whether reporting on only those efficiency initiatives 

not achieving their original estimates or facing risk had provided the 

Comptroller with sufficient details to oversee all of the initiatives. 

Comptroller officials agreed that reporting on each of the individual 

efficiency initiatives would improve DOD decision makers’ visibility and 

therefore provide information needed for their oversight. They also noted 

that it would facilitate DOD’s ability to address any future congressional 

reporting requirements. As a result, the Comptroller’s office subsequently 

issued guidance in October 201313

While obtaining this broader set of information, DOD stated in its written 

comments on a draft of this report, provided on January 6, 2014, that it 

will narrow the scope of efficiency initiatives that will be tracked due to the 

period of constrained resources it is experiencing. DOD stated that it will 

cease tracking initiatives once they have been implemented, and will 

select for detailed tracking only those initiatives where this information will 

help it manage more effectively. In clarifying its written comments, DOD 

that, according to these officials, 

superseded the February 2013 guidance and expanded the amount of 

information to be reported. Specifically, this guidance directed the military 

departments and SOCOM to submit further detail for all efficiency 

initiatives, rather than merely those not achieving the original estimates or 

at risk. Beginning in October 2013, the military departments and SOCOM 

began submitting reports that included this broader set of information.

 13Memorandum from the Office of the Under Secretary of Defense Comptroller, More 

Disciplined Use of Resources (MDUR) and Congressional Interest Items Reporting 

Requirements (Oct. 16, 2013). 
Page 11 GAO-14-134 Defense Efficiencies

officials stated that all of its efficiency initiatives, except those

implemented or which strictly call for terminations of programs, such as 

weapons systems, will be selected for detailed tracking. While the 

October 2013 guidance, which requires the military departments and 

SOCOM to report more detailed information on the full range of ongoing 

efficiency initiatives, does not specify that initiatives that strictly call for 

program terminations should no longer be tracked, we believe it is 

reasonable for DOD to cease the tracking of initiatives that strictly call for

program terminations.

We note that, in issuing additional guidance on its tracking and reporting 

on efficiency initiatives, DOD did not include any direction as to the 

specific types of costs that the military departments and SOCOM should 

consider in determining realized savings associated with implementation, 

such as costs that were not initially identified in calculations of net 

savings, as we had recommended in our December 2012 report. 

According to a Comptroller official, DOD has various guidance on 

developing cost estimates that the military departments and SOCOM can 

use in determining savings associated with the implementation of their 

efficiency initiatives. We reviewed the documents and discussed with the 

efficiency initiative focal points how, or if, this guidance was applied in 

developing their cost estimates. Some of the program managers with 

whom we spoke confirmed that while they were aware of existing 

guidance on developing cost estimates, they had not been instructed to 

use this guidance to determine specific types of costs that should be 

considered in calculating net savings. As a result, we continue to believe 

that our prior recommendation in our December 2012 report has merit 

and should be implemented.

The military departments and SOCOM have taken steps to evaluate 

some of their efficiency initiatives, such as establishing performance 

measures and collecting performance data. However, these efforts have 

largely occurred on an ad hoc basis and vary by efficiency initiative 

because DOD has not established a requirement for performing such 

evaluations. As a result, DOD lacks a systematic basis for evaluating the 

impact of its efficiency initiatives on improving program efficiency or 

effectiveness.

In setting forth the initial efficiency initiatives, the Secretary of Defense 

intended for DOD to improve the effectiveness and efficiency of its 

programs and activities. The Secretary also directed that any efficiency 

initiative must be specific, actionable, and measurable. Our prior review of 

Military Departments 

and SOCOM Vary in 

the Extent and Nature 

of Their Efforts to 

Evaluate the Impact

of Their Efficiency 

Initiatives
Page 12 GAO-14-134 Defense Efficiencies

federal agencies’ efficiency efforts concluded that an improvement in 

efficiency need not only involve a reduction in costs, but also can be 

achieved by maintaining federal government services or outcomes with 

fewer resources (such as time or money), or improving or increasing the 

quality or quantity of services while maintaining (or reducing) resources.14

In addition, we and other agencies, such as the Office of Management 

and Budget (OMB), have documented the need to develop performance 

measures for evaluating progress toward achieving desired outcomes.15

For example, as we have previously concluded, performance measures 

should be measurable, outcome-oriented, and actively tracked and 

reported. As our prior work has shown, leading organizations that employ 

result-oriented management use performance information as a basis for 

decision making and have found this approach improves program 

results.16

As previously discussed, the Comptroller’s October 2013 guidance 

provides direction on how the military departments and SOCOM are to 

approach reporting on the status of their efficiency initiatives, but does not 

require them to develop approaches for evaluating the impact of initiatives 

on achieving desired outcomes. In practice, we found that the military 

departments and SOCOM varied in the extent to which they evaluated 

individual efficiency initiatives, including whether they had established 

measures or indicators to gauge the impact on program efficiency or 

effectiveness beyond savings. The following paragraphs provide 

 14GAO, Streamlining Government: Key Practices from Select Efficiency Initiatives Should 

Be Shared Governmentwide, GAO-11-908 (Washington, D.C.: Sept. 30, 2011) and 

Streamlining Government: Opportunities Exist to Strengthen OMB’s Approach to 

Improving Efficiency, GAO-10-394 (Washington, D.C.: May 7, 2010).

15See generally OMB Circular No. A-11, Preparation, Submission, and Execution of the 

Budget, Circular No. A-11, Part 6 (July 26, 2013). GAO, Data Center Consolidation: 

Strengthened Oversight Needed to Achieve Billions of Dollars in Savings, GAO-13-627T 

(Washington, D.C.: May 14, 2013). Also, with the enactment of the GPRA Modernization 

Act of 2010 which updated the Government Performance and Results Act of 1993, 

Congress established a new framework aimed at taking a more crosscutting and 

integrated approach to focusing on results and improving government performance. See 

generally Pub. L. No. 111-352 (2011).

16GAO, Managing for Results: Enhancing Agency Use of Performance Information for 

Management Decision Making, GAO-05-927 (Washington, D.C.: Sept. 9, 2005); ResultsOriented Cultures: Creating a Clear Linkage between Individual Performance and 

Organizational Success, GAO-03-488 (Washington, D.C.: Mar. 14, 2003); and Executive 

Guide: Effectively Implementing the Government Performance and Results Act, 

GAO/GGD-96-118 (Washington, D.C.: June 1996).
Page 13 GAO-14-134 Defense Efficiencies

examples of the services’ and SOCOM’s efforts to evaluate certain 

efficiency initiatives.

• Air Force’s Facility Sustainment Initiative: This initiative is intended to 

reduce infrastructure maintenance costs by a total of $1.4 billion 

during the period of fiscal years 2012 through 2016 by performing 

preventative maintenance before critical failures occur. The Air Force 

uses a model to predict and prioritize infrastructure most at risk for 

critical failures and then focuses preventive maintenance efforts on 

such infrastructure.17 Furthermore, the Air Force has established 

measures to track the amount of hours spent performing preventive 

and corrective maintenance over the course of the initiative to 

determine whether this effort achieved the intended outcome, which 

was to reduce the amount of more costly corrective maintenance 

performed. We have previously concluded that deferring facility 

sustainment can lead to shortened facility service lives and increased 

future costs for recapitalization.18

• SOCOM’s Information Technology Services Efficiency Initiative: 

SOCOM established a new approach for its information technology 

services that is intended to reduce costs by a total of $394 million 

during the period of fiscal years 2012 through 2016. According to 

SOCOM officials, the new approach involved a contract framework for 

information technology services that reduces costs by awarding funds 

directly to the organizations that provide the services on a competitive 

basis, rather than through an intermediary that selects the 

organizations that provide the information technology services. The 

approach also adopts other best practices for procurement, such as 

providing performance-based incentives. As part of this initiative, 

SOCOM established multiple individual measures to assess 

contractor performance, such as answering a help desk call within a 

set amount of time or tracking trends on resolving information 

technology issues such as user access, but does not have measures 

in place to evaluate how the overall impact of the initiative affects the 

delivery of information technology services relative to the previous 

 17GAO previously reported that accuracy and supportability issues with two of DOD’s 

facility sustainment model key inputs have affected the reliability of the model’s estimates. 

See GAO, Defense Infrastructure: Continued Management Attention Is Needed to Support 

Installation Facilities and Operations, GAO-08-502 (Washington, D.C.: Apr. 24, 2008). Our 

current body of work did not analyze the model or the reliability of the model’s estimates.

18See GAO-08-502. 
Page 14 GAO-14-134 Defense Efficiencies

approach. SOCOM officials explained that because the 

implementation of its Information Technology Services Efficiency 

Contract occurred prior to it being identified as an efficiency initiative, 

methods of evaluating its effectiveness or efficiency, other than cost, 

were not established.

• Navy’s Total Ownership Cost Initiative: This initiative seeks to achieve 

efficiencies through life cycle management of the Navy’s ships and 

encompasses multiple underlying initiatives, such as the Navy’s 

Revised Virginia Class Drawings Efficiency Initiative. This initiative is 

intended to reduce costs of $30.3 million during the period of fiscal 

years 2012 through 2016 by moving away from reliance on paper 

documents toward an electronic system that allows multiple users to 

make revisions and access up-to-date documents. The Navy has not 

yet identified measures to evaluate how increasing the use of the 

electronic system to process technical documents will maintain or 

improve work processes. Navy officials indicated the same is true for 

other fiscal year 2012 initiatives that make up the Navy’s Total 

Ownership Cost initiative and commented that the focus was on 

tracking savings and not on developing efficiency measures to assess 

whether its initiatives, once implemented, improve the effectiveness or 

efficiency of these programs.

• Army and Air Force Data Center Consolidation Efficiency Initiatives: 

These initiatives are part of the larger Federal Data Center 

Consolidation Initiative, directed by OMB, that seeks to consolidate 

information technology infrastructure and activities to save energy 

costs, among other goals, and are expected to reduce the Army and 

Air Force’s costs by $490 million and $180 million, respectively, during 

fiscal years 2012 through 2016. Both the Army and Air Force have 

taken steps to implement these initiatives. According to Air Force 

officials, they had begun to establish measures that could be used to 

evaluate the impact of these initiatives, but faced some challenges 

due to changing guidance. For example, officials discussed that OMB 

guidance issued after the initiatives were underway expanded the 

definition of a data center and effectively increased the scope of the 

military departments’ consolidation effort after these initiatives were 

submitted in the fiscal year 2012 budget request. This resulted in the 

reconfiguration of planning and implementation schedules. Air Force 

officials also stated that they had begun to develop performance 

measures to assess impact when a new DOD effort to establish a 
Page 15 GAO-14-134 Defense Efficiencies

secure, joint information environment19

While the focus of DOD’s effort was to quickly identify funds that could be 

reinvested into other higher priority programs, military department and 

SOCOM officials explained that because the initial effort to identify 

efficiency initiatives occurred late at the end of the cycle they used to 

build their fiscal year 2012 budget submission, their effort focused on 

tracking savings targets and not on developing measures to evaluate 

impact. In the subsequent budget cycles that included the MDUR 

initiatives, the focus remained on identifying areas for reductions in 

spending. DOD officials agreed that additional measures could be useful 

to evaluate impacts—beyond savings—of their efficiency initiatives. Our 

prior work concluded that such measures can assist managers in 

determining whether desired outcomes were being achieved or if 

adjustments were needed, such as in the scope of the initiative or to the 

nature or timing of implementation actions. Without a systematic way to 

evaluate the impact of its efficiency initiatives, DOD is limited in its ability 

to assess whether the efficiency initiatives have improved the 

effectiveness or efficiency of its programs and activities.

was put in place. Therefore, 

the Air Force had to adjust their implementation plans and postpone 

the development of their measures to ensure actions taken on this 

initiative conformed to the new DOD requirement.

Over the past few years, in light of mounting fiscal pressures, DOD has 

continued to identify and implement efficiency initiatives with certain goals 

in mind, including achieving cost savings and seeking opportunities to 

enhance the efficiency or effectiveness of its programs and activities. 

DOD’s recent efforts to refine its approach for tracking and reporting on 

its current efficiency initiatives has the potential for providing greater 

oversight to decision makers on progress of the military departments and 

SOCOM on the status of their implementation efforts. However, its efforts 

to date do not sufficiently ensure that leaders have the information they 

need to fully assess the impact these initiatives are having on DOD’s 

programs and activities. Having a systematic way to evaluate the impact 

of its efficiency initiatives beyond cost savings could provide DOD the 

ability to determine whether or not its initiatives are improving the 

 19The DOD Joint Information Environment is an initiative to establish within the 

department a secure, joint information environment comprised of shared information 

technology infrastructure and services. 

Conclusions
Page 16 GAO-14-134 Defense Efficiencies

efficiency and effectiveness of its programs and activities while also 

achieving savings. Such information could also inform DOD as to whether 

actions are needed to make adjustments to the scope of any given 

initiative and related programmatic actions necessary for implementation.

To enhance DOD’s ability to determine whether its efficiency initiatives 

are having the desired effect of improving efficiency and effectiveness, we 

recommend that the Secretary of Defense require the military 

departments and SOCOM to develop approaches for evaluating the 

impact of their efficiency initiatives, such as establishing performance 

measures or other indicators, collecting related performance information, 

and using this information to measure progress in achieving intended 

outcomes associated with their initiatives until implemented.

In written comments on a draft of this report, DOD concurred with our 

recommendation and provided additional comment. Specifically, DOD 

concurred with having the military departments and SOCOM develop 

performance measures and other indicators for evaluating the impact of 

its efficiency initiatives, and commented that it has decided to cease 

tracking initiatives once they have been implemented. DOD also provided 

technical comments, which were incorporated as appropriate. The full text 

of DOD’s comments is reprinted in appendix II.

In its overall comments, DOD stated it intends to continue to refine its 

procedures, guidance, and oversight in order to achieve its goal of 

identifying and implementing efficiencies. DOD also stated that during this 

period of constrained resources, it must avoid creating a costly and 

redundant oversight process. To that end, DOD stated that it will cease 

tracking initiatives once they have been implemented, and will select for 

detailed tracking only those initiatives where this information will help it 

manage more effectively. We have modified the report to reflect DOD’s 

decision.

In clarifying its written comments, DOD officials stated that DOD will 

select for detailed tracking all of its efficiency initiatives except those 

implemented or which strictly call for terminations of programs, such as 

weapons systems. While the October 2013 guidance does not specify 

that initiatives that strictly call for program terminations should no longer 

be tracked, in a resource-constrained environment, we believe it is 

reasonable for DOD to do so. We also expect that DOD will clarify this 

revised approach in any future guidance to the military departments and 

SOCOM.

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
Page 17 GAO-14-134 Defense Efficiencies

In addition, we have modified the recommendation to clarify its intent that 

DOD should develop an approach for evaluating the impact of its 

efficiency initiatives until those initiatives have been implemented.

We are sending copies of this report to the Secretary of Defense and 

appropriate congressional committees. In addition, the report is available 

at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-5257 or merrittz@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. Key contributors to this report are listed in appendix 

III.

Zina D. Merritt

Director

Defense Capabilities and Management
Page 18 GAO-14-134 Defense Efficiencies

List of Committees

The Honorable Carl Levin

Chairman

The Honorable James Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Richard J. Durbin

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Howard P. McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Rodney Frelinghuysen

Chairman

The Honorable Pete Visclosky

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Scope and Methodology

Page 19 GAO-14-134 Defense Efficiencies

To determine the progress DOD has made in adjusting its approach to 

tracking and reporting on the implementation of its efficiency initiatives 

since we last reported in December 2012 and to assess the extent to 

which DOD is evaluating the impact of its efficiency initiatives on DOD 

programs and activities, we reviewed guidance and documentation issued 

at the department-wide level as well as within the military departments 

and SOCOM. We also interviewed officials from the offices of the 

Comptroller and DCMO, the military departments, and SOCOM who are 

involved in monitoring the implementation of its efficiency initiatives to 

discuss their approach to tracking and reporting on the initiatives. 

Specifically, we obtained available information from each of the military 

departments and SOCOM, including briefings prepared for senior DOD 

officials, on the current status of initiatives, how original estimates of 

savings compared with savings realized to date, and any program or 

timeline risks associated with implementing the efficiency initiatives. 

Additionally, we reviewed existing guidance to identify any requirements 

for evaluation of the efficiency initiatives. We then analyzed information 

provided by each of the military departments and SOCOM as well as 

interviewed officials from each of the military services and SOCOM 

serving as focal points for the efficiency initiatives to determine the 

expected outcome or impact for individual initiatives, and what steps they 

have taken to evaluate the impact of efficiency initiatives.

We conducted this performance audit from May 2013 through January 

2014 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Appendix I: Scope and Methodology
Appendix II: Comments from the Department 

of Defense

Page 20 GAO-14-134 Defense Efficiencies

Appendix II: Comments from the Department 

of Defense
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 21 GAO-14-134 Defense Efficiencies

Zina D. Merritt, (202)512-5257 or merrittz@gao.gov

In addition to the contact named above, Tina Won Sherman, Assistant 

Director; Grace Coleman; Susan Langley; Ricardo A. Marquez; Sharon L. 

Pickup; Mike Silver; Michael Shaughnessy; Susan Tindall; and Sarah 

Veale made key contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(351824)
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