GAO

United States General Accounting Office

Report to the Chairman, Committee on 

the Budget, House of Representatives

November 1999 FUTURE YEARS 

DEFENSE PROGRAM

Funding Increase and 

Planned Savings in 

Fiscal Year 2000 

Program Are at Risk

GAO/NSIAD-00-11

Page 1 GAO/NSIAD-00-11 Future Years Defense Program

Contents

Letter 3

Appendixes Appendix I: Department of Defense’s 1999 and 2000 Future 

Years Defense Programs by Account 40

Appendix II: Comments From the Department of Defense 55

Tables Table 1: DOD’s 1999 and 2000 FYDPs, by Primary Appropriation 

Category (total obligational authority in billions of fiscal year 

2000 dollars) 9

Table 2: Sources of DOD’s 2000 FYDP Savings 12

Table 3: Military Personnel Appropriation Accounts, 1999 and 

2000 FYDPs (total obligational authority in millions of fiscal 

year 2000 dollars) 41

Table 4: Operation and Maintenance Appropriation Accounts, 

1999 and 2000 FYDPs (total obligational authority in millions 

of fiscal year 2000 dollars) 43

Table 5: Procurement Appropriation Category by Component, 

1999 and 2000 FYDPs (total obligational authority in millions 

of fiscal year 2000 dollars) 45

Table 6: Army Procurement Appropriation Accounts, 1999 and 

2000 FYDPs (total obligational authority in millions of fiscal 

year 2000 dollars) 46

Table 7: Navy/Marine Corps Procurement Appropriation 

Accounts, 1999 and 2000 FYDPs (total obligational authority 

in millions of fiscal year 2000 dollars) 47

Table 8: Air Force Procurement Appropriations Accounts, 1999 

and 2000 FYDPs (total obligational authority in millions of 

fiscal year 2000 dollars) 48

Table 9: Defensewide Procurement Appropriation Accounts, 

1999 and 2000 FYDPs (total obligational authority in millions 

of fiscal year 2000 dollars) 49

Table 10: Research, Development, Test, and Evaluation 

Appropriation Accounts, 1999 and 2000 FYDPs (total 

obligational authority in millions of fiscal year 2000 dollars) 50

Table 11: Military Construction Appropriation Accounts, 1999 

and 2000 FYDPs (total obligational authority in millions of 

fiscal year 2000 dollars) 51

Table 12: Family Housing Appropriation Accounts, 1999 and 

2000 FYDPs (total obligational authority in millions of fiscal 

year 2000 dollars) 53
Contents

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Table 13: Revolving and Management Funds, 1999 and 2000 

FYDPs (total obligational authority in millions of fiscal year 

2000 dollars) 54

Table 14: Defensewide Contingencies, 1999 and 2000 FYDPs 

(total obligational authority in millions of fiscal year 2000 

dollars) 54

Figures Figure 1: Annual Military Personnel Funding Levels in 1999 

and 2000 FYDPs (in billions of fiscal year 2000 dollars) 15

Figure 2: Annual Operation and Maintenance Funding Levels 

in 1999 and 2000 FYDP (in billions of fiscal year 2000 dollars) 18

Figure 3: Annual Defense Health Program Funding Levels in 

1999 and 2000 FYDPs (in billions of fiscal year 2000 dollars) 20

Figure 4: Annual Procurement Funding Levels in the 1999 and

2000 FYDPs (in billions of fiscal year 2000 dollars) 24

Figure 5: Annual Family Housing Funding Levels in the 1999 

and 2000 FYDPs (in billions of fiscal year 2000 dollars) 27

Figure 6: Mission and Direct Infrastructure Programs in 1999 

and 2000 FYDPs 31

Figure 7: Military Personnel Levels in the 1999 and 2000 

FYDPs (military personnel in thousands) 35

Figure 8: Civilian Personnel Levels in the 1999 and 2000 

FYDPs (civilian personnel in thousands) 36

Abbreviations

DOD Department of Defense

FYDP Future Years Defense Program

O&M operation and maintenance

RDT&E research, development, test, and evaluation

REDUX Military Retirement Reform Act of 1986
Page 3 GAO/NSIAD-00-11 Future Years Defense Program

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-283583 Letr

November 22, 1999

The Honorable John R. Kasich

Chairman, Committee on the Budget

House of Representatives

Dear Mr. Chairman:

The Department of Defense’s (DOD) Future Years Defense Program 

(FYDP) is the official document that summarizes the force levels and 

funding associated with specific programs that the Secretary of Defense 

would like to see approved by Congress. The FYDP presents estimated 

appropriation needs for the budget year for which funds are being 

requested from Congress and at least the 4 years following it. The fiscal 

year 2000 FYDP requested an additional $50.8 billion to the previously 

requested $1,053 billion total funding for fiscal years 2000-2003.1

 As 

requested, this report identifies the major changes and adjustments in the 

2000 FYDP as compared to the 1999 FYDP and discusses the risks that the 

2000 FYDP faces that may prevent it from being implemented as planned. 

The FYDP reflects decisions made in the DOD Planning, Programming, and 

Budgeting System, which is intended to produce the best possible mixture 

of forces, equipment, and support to accomplish DOD’s mission. In 

reporting the results of the 1997 Quadrennial Defense Review, a 

congressionally mandated review of defense strategy and force 

requirements, DOD noted that it had not always been able to implement 

past FYDPs as planned because DOD underestimated some costs of its 

day-to-day operations and often did not fully achieve savings projected for 

efficiency enhancing initiatives. In addition, DOD or Congress can modify 

policies or begin new programs and operations that can require changes to 

the FYDP. The 2000 FYDP was DOD’s second FYDP since the Quadrennial 

Defense Review in which DOD attempted to achieve a better balance in 

DOD’s financial plans to meet its military forces’ current requirements and 

address long-term modernization needs. The Review examined the likely 

and emerging security threats and opportunities facing the United States 

and developed recommendations for the post-Cold War era.

1

Unless otherwise stated, the years and dollars shown in this report are on a fiscal year basis 

and in constant fiscal year 2000 dollars.
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The 1999 FYDP supported the President’s 1999 budget and included budget 

estimates for 1999-2003. The 2000 FYDP supported the President’s 2000 

budget and included budget estimates for 2000-2005. This report 

concentrates on the period common to both FYDPs, 2000-2003. Our report 

reflects only that portion of the first 1999 supplemental appropriation that 

had been declared “emergency” and released by the Office of Management 

and Budget prior to the 2000 budget submission in February 1999, and does 

not reflect the additional 1999 and 2000 resources provided to DOD in the 

second 1999 emergency supplemental appropriation because it was not 

reflected in the President’s budget and FYDP.2

 The report also discusses 

recent actions taken by Congress on DOD’s budget for 2000 during its 

consideration and enactment of the Fiscal Year 2000 National Defense 

Authorization and Appropriations Acts.

2

The first 1999 emergency supplemental appropriation was provided in the Omnibus 

Consolidated and Emergency Supplemental Appropriations Act, 1999 (P.L. 105-277, 

Oct. 21, 1998), and the second 1999 emergency supplemental appropriation was provided in 

the 1999 Emergency Supplemental Appropriations Act (P.L. 106-31, May 21, 1999). The 

second emergency supplemental provided DOD with $10.7 billion for such items as overseas 

contingency operations, spare parts, depot maintenance, and military pay and retirement.
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Results in Brief DOD planned to increase the funding of its three priority areas in the 

2000 FYDP from an expected overall increase in its budget, as compared to 

past FYDPs where it planned to finance increases to its priority areas from 

other program reductions and savings. More specifically, total funding in 

the 2000 FYDP was $50.8 billion (4.8 percent) higher than in the 1999 FYDP 

over the 2000-2003 period. Of the $50.8 billion, DOD requested 

congressional approval for $45.4 billion in additional budget authority and 

$1.65 billion in rescissions of previously appropriated funds.3

 The 

remainder was to come from unobligated funds from prior years, which 

remain available for future obligations. Over half of the funding increase in 

the 2000 FYDP was for operation and maintenance accounts, 23 percent for 

military personnel accounts, and 16 percent for procurement accounts, 

which reflects DOD’s three priority areas: readiness, quality of life, and 

modernization. In addition to the $50.8 billion, DOD expected to apply 

$15.5 billion in savings achieved from existing programs in the 1999 FYDP 

to the priorities in the 2000 FYDP. Most of the savings—over $11 billion—

were expected to occur because of lower inflation rates than projected in 

the 1999 FYDP.4

There are risks that DOD may not be able to implement its 2000 FYDP as 

planned because it may not receive all the funds it expects. Of DOD’s total 

budget for the common years (2000-2003), at least $50 billion is at risk. The 

FYDP, which supported the President’s budget, projected that the 

$45.4 billion increase in additional funding for the 2000 FYDP was to come 

from a share of the overall anticipated government budget surplus, which is 

uncertain. The surplus is contingent upon several factors, including 

continued economic growth, legislative agreements that address the 

financial soundness of the Social Security program, and adherence to 

statutory budget caps that limit spending for certain programs. Importantly, 

these budget caps apply to all discretionary spending, and the defense 

budget is included within the overall discretionary spending limit. Also, 

both Congress and the administration must agree to allocate some of the 

3

DOD has requested congressional approval to use $1.65 billion for other purposes.

4

Each year, the Office of Management and Budget provides DOD with guidance to use in 

preparing DOD’s budget request and FYDP. The guidance includes the executive branch’s 

assumptions for inflation. DOD uses these assumptions to reestimate the cost of its 

programs. As a result of lower projected inflation rates over the last few years, DOD has 

projected inflation savings and has been authorized to retain most of these projected 

savings. This year, the President directed DOD to retain the projected savings from the 1999 

FYDP to the 2000 FYDP and allocate them to the Department’s most pressing needs.
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anticipated surplus to DOD. In addition, DOD planned on congressional 

approval of a $1.65 billion rescission of previously appropriated funds; 

however, as of the beginning of November, Congress had not fully 

supported the requested rescission.

Some of the expected $15.5 billion in savings and adjustments in the 

2000 FYDP may not occur as planned. DOD’s expected savings of 

$2.82 billion from lower fuel prices may not materialize because current 

fuel projections are higher than those used to develop the 2000 FYDP. 

DOD’s expected savings of $1.22 billion from military payroll adjustments 

are still questionable since they are dependent on pending legislation. Also, 

DOD requested congressional approval to fund fiscal year 2000 military 

construction projects over 2 years instead of 1 year, but Congress rejected 

DOD’s proposal to spread military construction funding over 2 years.

There are several other areas of risk that may impact DOD’s ability to 

implement its 2000 FYDP as planned. First, Congress authorized a larger 

military pay and benefits package in the National Defense Authorization 

Act for Fiscal Year 2000 than proposed by DOD, and provided funds for this 

larger pay package for only fiscal year 2000. Without higher levels of 

funding than currently planned after fiscal year 2000, DOD will need to look 

elsewhere in its budget to fund these increased benefits. Second, funding 

requirements for the Defense Health Program are routinely understated. 

DOD stated that the operation and maintenance portion of the Defense 

Health Program is underfunded by almost $73 million. Third, no funds were 

included in the 2000 FYDP for U.S. involvement in Kosovo, and currently 

available funding may not be sufficient to cover the $2.5 billion estimated 

cost of Kosovo operations in fiscal year 2000. Fourth, DOD has had 

difficulty in recent years meeting its planned growth in procurement 

funding because it has had to move those funds to other priorities, such as 

readiness. Fifth, family housing accounts may require more funding than 

programmed in the 2000 FYDP. Finally, DOD assumed savings from 

reductions in infrastructure through further implementation of competitive 

sourcing−which allows the private sector to bid on performing selected 

activities and functions−and two new rounds of base closures. We have 

previously reported that DOD’s projected savings from competitive 

sourcing are overly optimistic at least in the short term. In addition, 

Congress did not authorize additional base closure rounds.
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Background The 2000 FYDP reflected the recommendations of DOD’s May 1997 

Quadrennial Defense Review, which analyzed U.S. military strategy, force 

structure readiness, modernization, and infrastructure. In its 1999 Annual 

Report to the President and the Congress, DOD stated that the armed 

forces remain fully capable of executing the Quadrennial Defense Review 

strategy, but ensuring readiness today and in the future has become 

increasingly difficult. Further, forces that would deploy in the later stages 

of a conflict are less ready, recruiting and retention rates have declined, 

and modernization schedules are harder to maintain. The 2000 FYDP was 

developed to address these problems. The areas targeted for higher funding 

levels in the 2000 FYDP continue to be readiness and weapons 

modernization, as in the 1999 FYDP, with an added emphasis on personnel 

issues, specifically recruiting and retention.

Our earlier report on DOD’s 1999 FYDP showed that although DOD made 

adjustments to decrease the risk that funds would be transferred from 

procurement to unplanned operating expenses, the 1999-2003 program, like 

previous programs, was based on optimistic assumptions about savings 

and procurement plans.5

 We found that DOD made optimistic assumptions 

about the potential to achieve savings through competitive sourcing and 

reengineering, and these plans may not be completed on schedule.6

 We also 

stated that if the projected savings from other sources do not materialize, 

DOD would have to adjust future budgets by cutting programs and/or 

requesting additional budget authority. Further, we pointed out that the 

1999 FYDP projected that procurement funding would increase in real 

terms by about 29 percent while DOD’s total budget would remain 

relatively flat, despite the experience over the past 32 years that DOD 

procurement funding rises and falls in direct proportion to movements in 

its total budget. Also, planned funding increases for modern weapon 

systems were shifted further into the future, as in previous FYDPs. This 

movement creates a large demand for procurement funds in later years, 

which, according to DOD, tends to disrupt planned modernization 

programs unless additional funds are made available.

5

Future Years Defense Program: Substantial Risks Remain in DOD’s 1999-2003 Plan 

(GAO/NSIAD-98-204, July 31, 1998).

6

Competitive sourcing is a process by which DOD and other federal agencies conduct cost 

comparisons to determine whether the public or private sector can perform selected 

activities and functions more cheaply.
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Total Funding in DOD’s 

2000 FYDP Is Higher 

Than in the 1999 FYDP

Unlike prior FYDPs where DOD planned to increase funds for priorities by 

reducing costs in other areas and applying the savings to the priorities, the 

2000 FYDP included DOD’s plan to fund priorities from an increase in total 

funding. Over the common 4-year period, 2000-2003, in the 1999 and 2000 

FYDPs, as shown in table 1, DOD increased its planned total funding by 

$50.8 billion, a 4.8-percent increase over the funding levels projected in the 

1999 FYDP. DOD projected that the $50.8 billion will come from a 

$45.4 billion increase in DOD’s overall funding and a $1.65-billion rescission 

of previously appropriated funds to offset fiscal year 2000 funding. The 

remainder was from unobligated funds from prior years, which remain 

available for obligation. Also, there was growth within each FYDP over the 

common period. In the 2000 FYDP, the total program was projected to grow 

by 2.8 percent over the common period. This funding growth was over 

three times the 0.9-percent growth identified in the 1999 FYDP for this 

period.
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Table 1: DOD’s 1999 and 2000 FYDPs, by Primary Appropriation Category (total obligational authority in billions of fiscal year 

2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Over half of the increase was programmed in operation and maintenance 

accounts, 23 percent in military personnel accounts, and 16 percent in 

procurement accounts. These increases reflected DOD’s plan to provide 

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

Change

2000-2003

Military personnel 1999 $71.7 $70.7 $70.0 $69.8 $282.2

2000 73.7 73.8 73.4 73.2 294.1

Change 2.0 3.1 3.3 3.4 11.8 4.2

Operation and maintenance 1999 94.4 94.3 93.9 93.9 376.5

2000 103.3 100.8 99.4 99.5 402.9

Change 8.9 6.5 5.5 5.6 26.4 7.0

Procurement 1999 53.3 59.2 57.5 59.0 228.9

2000 53.0 60.7 60.2 63.0 236.9

Change -0.2 1.5 2.7 4.0 8.0 3.5

Research, development, 1999 33.5 32.0 31.9 32.0 129.4

test, and evaluation 2000 34.4 33.7 33.4 32.6 134.1

Change 0.9 1.7 1.5 0.6 4.7 3.6

Military construction 1999 4.8 4.3 3.5 3.7 16.3

2000 2.3 7.0 4.1 4.1 17.5

Change -2.5 2.7 0.6 0.4 1.2 7.3

Family housing 1999 3.8 3.8 3.7 3.9 15.2

2000 3.2 3.8 3.5 3.6 14.0

Change -0.7 0 -0.2 -0.3 -1.2 -7.7

Revolving and management 1999 0.8 0.4 0.4 1.0 2.5

funds 2000 0.4 0.8 0.5 0.7 2.4

Change -0.3 0.4 0.2 -0.3 -0.1 -4.3

Defensewide 1999 0 0 0.8 1.3 2.1

contingencies 2000 0 0 0.8 1.3 2.1

Change 0 0 0 0 0 -0.4

Total 1999 $262.3 $264.5 $261.7 $264.6 $1,053.1 0.9

2000 $270.3 $280.5 $275.2 $278.0 $1,104.0 2.8

Change $8.0 $15.9 $13.5 $13.4 $50.8 4.8
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additional resources for readiness, quality of life, and modernization 

priorities. DOD stated that this plan strikes a balance between immediate 

military needs, most notably force readiness and quality of life, and 

long-term safeguards, including the development and procurement of new 

weapons and technology, as recommended by the Quadrennial Defense 

Review. (App. I shows the differences between accounts in the 1999 and 

2000 FYDPs for each appropriation over the common years, 2000-2003.)

Numerous Risks Exist 

in the 2000 FYDP

DOD may not achieve its 2000 FYDP as planned due to risks in several 

areas. Of DOD’s total budget for the common years, at least $50 billion is at 

risk. The majority of the funding increase DOD programmed in the

2000 FYDP was projected to come from a share of the overall federal 

budget surplus, which is uncertain. DOD planned on congressional 

approval of a $1.65-billion rescission of previously appropriated funds, 

however, as of the beginning of November, Congress had not fully 

supported the requested rescission. Some of the expected $15.5 billion in 

savings and adjustments in the 2000 FYDP may not occur as planned. 

Savings from lower fuel costs and infrastructure reduction initiatives, such 

as competitive sourcing, may not occur to the extent DOD programmed in 

the 2000 FYDP. DOD requested congressional approval to fund fiscal year 

2000 military construction projects over 2 years instead of 1 year, but 

Congress rejected DOD’s proposal. Funding requirements for the Defense 

Health Program are routinely understated and DOD has had difficulty in 

recent years meeting its planned growth in procurement funding because it 

has had to move those funds to other priorities. Two new risks have 

emerged since the 2000 FYDP was submitted to Congress. First, Congress 

authorized an even larger military pay and benefits package in the National 

Defense Authorization Act for Fiscal Year 2000 than proposed by DOD, and 

these additional benefits will have ongoing costs that are not factored into 

the FYDP.7

 Second, no funds were included in the 2000 FYDP for U.S. 

involvement in Kosovo, and current funding available for obligation in 2000 

may not be sufficient to cover the estimated cost of Kosovo operations.

7

P.L. 106-65, Oct. 5, 1999.
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Most of the Additional 

Resources Planned for in 

the 2000 FYDP Are 

Uncertain

Both the projected budget surplus from which the administration plans to 

receive the additional funding and an agreement on the amount of the 

surplus that would be allocated to DOD are uncertain. Also, Congress has 

not fully supported DOD’s requested rescission.

Of the $50.8 billion in additional funding programmed in the 2000 FYDP, 

$45.4 billion was projected to come from the total federal budget surplus. 

This estimated amount is uncertain for several reasons. First, budget 

surplus projections are uncertain. The administration recognizes that 

budget projections for any future period are inherently uncertain. Likewise, 

the Congressional Budget Office reported that the average change between 

its estimates of annual deficits or surpluses 5 years into the future and the 

actual results was substantial.8

 Second, the surplus is contingent on 

continued economic growth, which in itself is uncertain. Third, the 

administration’s proposal to allocate a portion of the surplus to DOD is 

contingent upon the enactment of legislation that would address the 

financial soundness of the Social Security program. As of the end of 

October 1999, no legislation had been passed. Lastly, both the President 

and Congress must agree on using part of the budget surplus to increase 

DOD’s overall annual funding levels. Although both the President and 

Congress want to increase funds for DOD, there is no agreement as to how 

much that increase will be over the period covered by the 2000 FYDP. As a 

result, the programmed funding increases are uncertain.

DOD also requested $1.65 billion in unspecified rescissions of prior year 

funding to offset total fiscal year 2000 defense funding. Congress approved 

$31.4 million in rescissions in the second Fiscal Year 1999 Emergency 

Supplemental Appropriations Act. The Fiscal Year 2000 Defense 

Appropriations Act rescinded $802.3 million from specified appropriation 

accounts. Therefore, DOD did not get the entire $1.65 billion in rescissions 

it requested, but Congress could take further action at a later date.

8

Evaluating CBO’s Record of Economic Forecasts, Congressional Budget Office, July 30, 

1999.
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Inflation Savings Appear 

Probable, but Other Savings 

Are at Risk

As shown in table 2, DOD estimated that it would save $15.5 billion as a 

result of lower inflation rates and fuel costs, and a reduction in military 

payroll costs. The President directed DOD to retain the savings and 

allocate them to the Department’s most pressing needs. In addition, to free 

up funds in 2000, DOD requested only $5.4 billion of the $8.5 billion 

projected cost of fiscal year 2000 military construction projects, and 

requested the remaining $3.1 billion as an advance fiscal year 2001 

appropriation.9

Table 2: Sources of DOD’s 2000 FYDP Savings

Note: Totals may not add due to rounding.

Source: Our analysis of DOD data.

In the 2000 FYDP, DOD included $11.4 billion in inflation savings for the 

2000-2003 period due to a decline in projected inflation rates provided by 

the Office of Management and Budget. These savings resulted from using 

mostly lower projected inflation rates to develop the 2000 FYDP than for 

the 1999 FYDP. The administration’s mid-year budget update, which revised 

the projections for 1998−2005 and beyond, reflected lower inflation rates 

for 1999 and 2000 and slightly higher inflation rates for 2002 and beyond. 

According to an Office of Management and Budget official, the reductions 

in fiscal years 1999 and 2000 compounded over time combined with the 

small increase in the later years result in almost no net change from the 

inflation savings estimate included in the 2000 FYDP. Therefore, the most 

9

An advance appropriation is budget authority provided in an appropriation act that is first 

available in a fiscal year beyond the fiscal year for which the appropriation act is enacted.

In billions of constant fiscal year 2000 dollars

Source 2000 2001 2002 2003

 Total

2000-2003

Savings from lower estimated 

inflation rates

$2.47 $2.81 $2.97 $3.17 $11.42

Savings from lower estimated 

cost of fuels

0.97 0.64 0.60 0.61 2.82

Military payroll adjustments 0.32 0.31 0.30 0.29 1.22

Total savings $3.76 $3.76 $3.87 $4.07 $15.46
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recent inflation rate projections continue to support DOD’s projected 

inflation savings in the 2000 FYDP.

DOD projected an additional $2.8 billion in savings during the 2000-2003 

period from lower fuel costs for ship and jet fuel, diesel oil, and gasoline. 

The Office of Management and Budget provided DOD with revised inflation 

estimates for fuel purchases for inclusion in the 2000 President’s budget. 

The estimates lowered the projected cost of fuel from previously budgeted 

levels. However, the fuel cost factors the Office of Management and Budget 

provided to DOD in May 1999 were higher than those used to develop the 

2000 President’s budget. Additionally, as of August 1999, the Department of 

Energy projected fuel costs would be higher than the Office of Management 

and Budget’s estimates through 2000. Given the projected fuel cost 

increases, there are risks associated with DOD’s ability to achieve all of the 

savings that were based on lower fuel costs.

The remaining $1.2 billion in expected savings come from military payroll 

adjustments. DOD pays wage credits into the Social Security Trust Fund for 

non-taxed benefits for which servicemembers pay no social security tax. 

DOD, however, has submitted a legislative proposal to eliminate these 

credits, which would result in savings to DOD. As of September 1999, no 

congressional action had been taken on this proposal. If this proposal does 

not pass, these savings will not be realized.
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To free up more resources for fiscal year 2000, DOD proposed a plan to 

finance fiscal year 2000 military construction projects by combining regular 

and advance appropriations. The regular appropriations only funded DOD’s 

expected fiscal year 2000 obligations for military construction projects 

scheduled to begin in 2000. The remaining funding for the fiscal year 2000 

projects were to come from advance fiscal year 2001 appropriations. This 

proposal was designed to allow DOD to continue with planned fiscal year 

2000 construction projects while providing additional funds to support 

other high priority programs in 2000 as well as keep the budget within the 

2000 budget caps as mandated by the 1997 Budget Enforcement Act.10

Congress rejected DOD’s proposal because it was concerned that 

incremental funding would lead to increased costs and delayed completion 

of projects, and that this funding approach would be implemented 

permanently, creating a large demand for military construction funds 

beyond 2000. The Fiscal Year 2000 Military Construction Appropriations 

Act provides $8.4 billion in funding for DOD’s fiscal year 2000 military 

construction priorities, $100 million less than full funding.11

DOD Will Likely Require 

Military Pay Funding Above 

Levels Programmed in the 

2000 FYDP

DOD proposed four changes to the current military compensation system 

to address the services’ recruiting and retention problems. The 2000 FYDP 

included funding for these four proposals, resulting in the higher annual 

funding levels for military personnel salaries and benefits, as shown in 

figure 1. Legislative action, though, introduced risk into the Department’s 

2000 FYDP military pay program because the National Defense 

Authorization Act for Fiscal Year 2000 provides an even larger military 

compensation package than proposed by DOD. The second 1999 

emergency supplemental appropriations act and the Fiscal Year 2000 

Defense Appropriations Act only provide sufficient funding for this larger 

package in fiscal year 2000.12 Therefore, DOD will require higher annual 

funding levels to meet the additional military pay requirements.

101997 Budget Enforcement Act−Title X of P.L. 105-33, Aug. 5, 1997.

11P.L. 106-52, Aug. 17, 1999.

12P.L. 106-79, Oct. 25, 1999.
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Figure 1: Annual Military Personnel Funding Levels in 1999 and 2000 FYDPs (in 

billions of fiscal year 2000 dollars)

Source: Our analysis of FYDP data.

Proposed changes to military base pay account for the largest part of the 

funding increase in the 2000 FYDP. DOD proposed to partially alleviate the 

perceived military-civilian pay gap by raising military base pay by 

4.4 percent in 2000, the Employment Cost Index of 4.3 percent plus 

0.1 percent.13 DOD proposed annual raises of 3.9 percent thereafter for the 

remainder of the 2000 FYDP period, which is the projected Employment 

Cost Index rate in the future.

13The Employment Cost Index is a measure of overall compensation trends in the economy.

70.0

73.4 73.2

69.8

70.7

71.7

73.7 73.8

67

0

68

69

70

71

72

73

74

75

2000 2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP
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Pay table reform was another military pay initiative. The proposal provides 

progressively higher pay increases for servicemembers for each promotion 

they receive, so pay increases for promotions would generally be higher 

than those tied to longevity. These increases were meant to be incentives to 

remain in the service for noncommissioned and mid-grade commissioned 

officers with the experience, skills, and knowledge most needed by the 

services.

DOD also proposed to increase funding for other incentives to enlist and 

retain people with certain skills. The services are currently using special 

and incentive pays to retain personnel with the most critical skills, such as 

pilots. Since skill areas, such as surface warfare officers, are experiencing 

shortages, the 2000 FYDP added retention bonuses for personnel 

possessing those skills. To help meet recruiting goals, the services 

increased funding for recruiting incentives. For example, the Army and the 

Navy included funding for enlistment bonuses during slow recruiting 

months (Feb. through May) and increases for college fund incentives, while 

the Air Force planned to increase its advertising budget for recruiting.

Finally, DOD proposed to reverse the changes made to the military 

retirement system by the Military Retirement Reform Act of 1986.14 This 

act, commonly known as REDUX, reduced anticipated future retired pay 

levels for personnel who entered the military service after August 1, 1986, 

from 50 to 40 percent of base pay for servicemembers retiring with 

20 years of service. In addition, DOD’s proposal provided cost-of-living 

increases for retirees during periods of low inflation. All of the services 

believe that the REDUX system negatively affects career retention 

behavior.

The National Defense Authorization Act for Fiscal Year 2000 was passed on 

October 5, 1999. This law provides a substantially larger pay and benefits 

package than the administration proposed. For example, the law provides a 

4.8-percent pay raise in 2000 instead of the 4.4 percent proposed by the 

administration. Pay and benefits increases constitute permanent 

legislation. They are included in defense authorization legislation, not in 

appropriation measures, though the amount of money provided for military 

personnel in the appropriations act is directly affected by any changes. Pay 

increases for 2001-2006 will be based on the Employment Cost Index plus 

14Military Retirement Reform Act of 1986−P.L. 99-348, July 1, 1986.
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0.5 percent instead of the administration’s proposed annual 3.9 percent 

increases for 2001-2005.

The second 1999 supplemental appropriations act and the Fiscal Year 2000 

Defense Appropriations Act have sufficient funding to cover the larger 

congressionally approved military pay and benefits packages for 2000. 

However, without higher levels of funding than currently planned after 

2000, DOD will need to look elsewhere in its budget to fund these benefits, 

possibly adversely affecting its current plans to meet its procurement and 

readiness goals.

Risks Exist in Achieving 

Higher Operation and 

Maintenance Funding 

Levels

Like the 1999 FYDP, the 2000 FYDP provided for increased operation and 

maintenance (O&M) funding. According to DOD, the additional funds are 

needed to maintain U.S. forces’ readiness. DOD may not be able to execute 

its O&M program as planned, though, due to several factors. First, it is 

unclear at this point if congressional action on the 2000 budget provided 

DOD with more or less O&M funding than DOD stated is required to 

maintain readiness. Second, the funding requirements for the Defense 

Health Program, which is over 10 percent of DOD’s annual O&M budget, 

are routinely underestimated. Finally, DOD may not have sufficient funding 

for its ongoing contingency operations in locations such as Kosovo.

To address growing readiness concerns, DOD allocated higher annual 

funding levels for O&M in the 2000 FYDP than in the 1999 FYDP, as shown 

in figure 2.15 For the 2000-2003 period, total funding was $26.4 billion 

higher, a 7-percent increase. The O&M portion of the defense budget is 

most closely related to readiness. The O&M budget funds the costs of 

purchasing fuel, spare parts, and other items associated with training and 

military operations.

15As noted earlier, the values in our report reflect only that portion of the first 1999 

supplemental appropriation that had been declared “emergency” and released by the Office 

of Management and Budget prior to the 2000 budget submission in February 1999, and do 

not reflect the additional 1999 and 2000 resources provided to DOD in the second 1999 

emergency supplemental appropriation because it was not reflected in the President’s 

budget and FYDP.
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Figure 2: Annual Operation and Maintenance Funding Levels in 1999 and 2000 FYDP 

(in billions of fiscal year 2000 dollars)

Source: Our analysis of FYDP data.

According to DOD, its readiness indicators in 1998 showed declines in 

readiness. In September 1998, the service chiefs testified before the Senate 

Committee on Armed Services that they needed more resources to fully 

address emerging readiness concerns, and in October 1998, the Office of 

Management and Budget, on behalf of the administration, submitted a 

supplemental appropriations request for a $1-billion defense readiness 

package to the Chairmen of the Appropriations Committees. In response, 

Congress provided $1.3 billion in additional readiness funding in the first 

1999 emergency supplemental appropriations act of 1999. Although DOD 

testified before the House Armed Services Readiness Subcommittee in 

February 1999 that the principal purpose of the overall funding level 

increase in the 2000 FYDP was to meet the most urgent near and long-term 

94.4 94.3 93.9 93.9

100.8

99.4 99.5

103.3

88

0

90

92

94

96

98

100

102

104

2000 2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP
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readiness needs, Congress provided $2.35 billion in additional readiness 

funding in the second 1999 emergency supplemental appropriations act. 

The readiness items included in both 1999 emergency supplemental 

appropriations were some of the same items that are priority items for the 

services in the 2000 FYDP. For example, the Army planned to increase 

funds for flying hours, training, barracks, depot maintenance, and 

installation improvements. The Navy increased funding for additional 

flying hours, ship maintenance, and spare parts. The Air Force increased 

funding for spare parts and recruiting and retention initiatives. In addition, 

DOD’s O&M program also included $10 billion in planned pay raises for 

DOD civilians.

There is some indication that DOD may not get the O&M funds it said it 

needed to sustain readiness. In addition to the funding provided in the 

second fiscal year 1999 emergency supplemental appropriation, the Fiscal 

Year 2000 Defense Appropriations Act provides DOD with more O&M 

funding than it requested in its budget. However, there are offsets that may 

result in DOD receiving less O&M funding than it requested. The act 

includes offsets to the amount of O&M funding provided in the act equal to 

$1.05 billion, which was provided in the second fiscal year 1999 emergency 

supplemental appropriation. The act also includes O&M offsets of 

$363 million to reflect savings from civilian pay, favorable foreign currency 

fluctuations, and competitive sourcing.

DOD Has Difficulty Estimating 

Funding Requirements of the 

Defense Health Program

In 2000, the Defense Health Program was projected to account for over 

10 percent of DOD’s 2000 O&M appropriations. Defense Health Program 

funding was projected to receive $1.4 billion (3.4 percent) more funding 

over the 2000-2003 period in the 2000 FYDP than in the 1999 FYDP. Figure 3 

shows annual funding level projections from both FYDPs.
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Figure 3: Annual Defense Health Program Funding Levels in 1999 and 2000 FYDPs 

(in billions of fiscal year 2000 dollars)

Source: Our analysis of FYDP data.

The funding levels projected for the Defense Health Program in the 

2000 FYDP may not be adequate to execute the program as planned. In the 

last few years, funding requirements for the program, as presented to 

Congress as part of the President’s budget in February, have been 

underestimated. The Fiscal Year 1997 Defense Appropriations Act added 

about $475 million to the program to address a shortfall discovered after 

the initial budget was submitted.16 In 1998, DOD’s Comptroller submitted a 

budget amendment to add $274 million to the program to fully fund it. 

16P.L. 104-208, Sept. 30, 1996.

10.8

10.7

10.5

10.3

10.4

10.3

10.6

11.0

9.8

0

10.0

10.2

10.4

10.6

10.8

11.0

11.2

2000 2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP
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Despite DOD’s testimony in February 1998 that the core programs of the 

1999 Defense Health Program were fully funded, the services later reported 

that the funding shortfall could be as much as $613 million. The Defense 

Health Program received an additional $347 million for 1999 than requested 

in DOD’s original budget. 

The Department of Defense Appropriations Act for Fiscal Year 2000 

provides $320 million more in funding than requested by DOD for the 

Defense Health Program. Over 85 percent of these funds are allocated to 

research, development, test, and evaluation activities. Congress added 

$108 million in new O&M programs, which were not requested by the 

administration. Congress offset this $108 million by $63 million of budget 

execution savings, for a net $45-million increase in O&M funding. In 

addition, the Appropriations Act reduces the total amount appropriated to 

the Defense Health Program by $9.8 million to reflect savings from 

favorable foreign currency fluctuations. DOD stated that these actions 

underfund the O&M portion of the Defense Health Program by almost 

$73 million, and as a result will likely require additional funding.

We recently reported that there is risk to the sufficiency of the projected 

annual funding levels for the Defense Health Program.17 Program officials 

told us that the beneficiary population is largely undefined because neither 

military treatment facilities nor managed care support contractors require 

enrollment for most of the beneficiaries and that this is a major impediment 

to submitting realistic Defense Health Program budget requests. DOD 

currently relies on surveys to estimate how many beneficiaries use military 

facilities and managed care and to what extent DOD is their primary or 

secondary source of coverage. We estimated that at the end of 1998 less 

than half of the 8.2 million DOD-eligible beneficiaries were enrolled in the 

military health system. We and the Congressional Budget Office concluded 

that for DOD to better estimate costs and efficiently manage the Defense 

Health Program system, it needs a universal beneficiary enrollment system 

to clearly identify the population for whom health care is to be provided.18

DOD’s budgeting uncertainties in the Defense Health Program stem, in 

large measure, from its lack of a universal beneficiary enrollment 

requirement.

17Defense Health Program: Reporting of Funding Adjustments Would Assist 

Congressional Oversight (GAO/HEHS-99-79, April 29, 1999).

18Restructuring Military Medical Care, July 1995, Congressional Budget Office.
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DOD May Need Additional O&M 

Funds for Ongoing Contingency 

Operations

Current estimated costs for fiscal year 2000 ongoing contingency 

operations costs are likely to exceed $5 billion. The President’s budget for 

2000 included $1.8 billion for ongoing Bosnia operations and $1.1 billion for 

Southwest Asia. Since there were no operations in Kosovo at the time the 

2000 budget was submitted, no funds were included for U.S. involvement in 

Kosovo. DOD’s current, but not finalized, estimate for the cost of U.S. 

military participation in the Kosovo peace enforcement force in 2000 is 

$2.5 billion.

We estimated that as much as $475 million provided for fiscal year 1999 

contingency operations were in excess of 1999 costs.19,20 The excess was 

due primarily to the fact that combat operations in Kosovo ended in June 

rather than continuing to the end of the fiscal year as anticipated by DOD’s 

supplemental appropriations request and the funding provided by 

Congress. The majority of these funds for fiscal year 1999 contingency 

operations have been appropriated to the Overseas Contingency 

Operations Transfer Fund, which are available until expended.

If DOD’s $2.5 billion estimate for fiscal year 2000 U.S. participation in 

Kosovo is correct, and DOD does have $475 million available from fiscal 

year 1999 appropriations to apply to fiscal year 2000 costs, DOD will still 

require over $2 billion in additional funds for its ongoing Kosovo operations 

to pay for the costs not covered by the excess 1999 funds. Also, DOD may 

need more funds for both Bosnia and Southwest Asia operations than 

projected when the 2000 FYDP was finalized because the Fiscal Year 2000 

Defense Appropriations Act provides less for these operations than 

proposed in the 2000 FYDP. Finally, DOD programmed only minimal 

amounts for new unexpected contingencies (less than $300 million in 

2002 and 2003), which will place a further burden on DOD’s resources, if 

additional funds are required during that period.

19Military Operations: Some Funds for Fiscal Year 1999 Contingency Operations Will Be 

Available for Future Needs (GAO/NSIAD-99-244BR, Sept. 21, 1999).

20The contingency funding values for 1999 are in current dollars.
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Even if Congress appropriates supplemental funds for the ongoing and 

unexpected contingencies, Congress continues to debate whether 

rescissions from other defense programs should be imposed to offset some 

or all of the funding provided. If the funding is designated as an 

“emergency” requirement, Congress can approve supplemental funds 

without offsetting the amounts with rescissions in previously enacted 

discretionary appropriations or mandatory spending programs. The 

controversy has been that if Congress and the President agree to define the 

supplemental appropriations as an emergency, discretionary spending rises 

beyond the discretionary spending caps and the size of the budget surplus 

declines. In 1993 through 1997, Congress offset some, but not all, of the 

emergency supplemental appropriations.21 In 1998, Congress provided 

DOD with emergency appropriations without offsets. The two emergency 

supplemental appropriations for 1999 provided DOD with $7.7 billion and 

$10.7 billion, respectively, and required less than $100 million each in 

offsets of DOD programs, but only after extensive debate and a threat of 

presidential veto.22 In the past, rescissions came from inflation savings, fuel 

savings, and large unobligated budget authority, but such savings from less 

contentious sources are not always possible according to the 

Congressional Research Service. Since historically, DOD has only 

programmed for and Congress has only appropriated for ongoing 

contingency operations, the services generally have borrowed funds from 

other activities that they planned to conduct later in the fiscal year to pay 

for new or expanded contingencies. Although Congress has appropriated 

supplemental funding to pay for the added costs of contingencies, DOD 

may be required, as it has in the past, to reduce funding in the short term 

for other programs through reprogramming and rescissions, adversely 

impacting those programs such as readiness.

Planned Increase in 

Procurement Funding at 

Risk

DOD programmed $8 billion (3.5 percent) more in procurement funds over 

the 2001-2003 period in the 2000 FYDP than in the 1999 FYDP. About half of 

the increase occurred in 2003 when the discretionary spending caps are 

21Emergency Appropriations for the Department of Defense, Congressional Research 

Service memorandum, Aug. 18, 1998.

22Appropriations Supplemental for FY1999: Emergency Funding in P.L. 105-277 for 

Agriculture, Embassy Security, Y2K Problems, Defense, and Other Issues, Congressional 

Research Service Report for Congress, RL 30056, Feb. 25, 1999 and Supplemental 

Appropriations for FY1999: Central America Disaster Aid, Middle East Peace, and Other 

Initiatives, Congressional Research Service Report for Congress, RL30083, May 26, 1999.
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expected to end. DOD planned to add to the procurement of items in its 

Quadrennial Defense Review modernization plan. For example, the 

2000 FYDP included an additional new attack submarine in the Navy’s 

shipbuilding plan and accelerated the rate of procurement of the Marine 

Corps’ tilt-rotor V-22 aircraft. Despite the net increase, procurement 

funding for both the Army and defensewide components was projected to 

decrease during the same period. Figure 4 compares total procurement 

funding in the 2000 FYDP with annual procurement funding projections in 

the 1999 FYDP.

Figure 4: Annual Procurement Funding Levels in the 1999 and 2000 FYDPs (in 

billions of fiscal year 2000 dollars)

Source: Our analysis of FYDP data.

53.0

60.2

63.0

53.3

57.5

59.2 59.0

60.7

48

0

50

52

54

56

58

60

62

64

2000 2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP
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In recent years, DOD has had difficulty in meeting its planned growth in 

procurement funding. Although the 2000 FYDP projected that DOD will 

meet the Quadrennial Defense Review’s goal of $60 billion in procurement 

funding by 2001, this plan follows the pattern of previous FYDPs by putting 

most of the procurement funding increase in the outyears of the FYDP. We 

have reported that DOD reduced programmed procurement in successive 

FYDPs and reprogrammed some procurement to the years beyond the 

FYDP.23 The 2000 FYDP is no exception. The level of procurement funding 

for 2000 was slightly reduced in the 2000 FYDP from the level projected in 

the 1999 FYDP. In addition, procurement plans were either canceled or 

reprogrammed to the outyears of the FYDP. For example, Army officials 

stated that the Army terminated the Improved Recovery Vehicle program 

and moved funding for the CH-47 cargo helicopter upgrades to the 

outyears. The Army stated that funds originally slated for these programs 

would be used to increase O&M funding for such activities as depot 

maintenance, real property maintenance, and active component flying 

hours for training. According to the Army, these cuts in procurement will 

adversely affect future readiness because the Army will have to rely on 

older, more maintenance intensive equipment. 

The Quadrennial Defense Review stated that as successive FYDPs reduced 

the amount of programmed procurement, some of these reductions have 

accumulated into long-term projections, creating a large demand for 

procurement funds in the outyears. This movement of procurement 

funding to the outyears is a source of risk to the long-term affordability of 

the Department’s modernization plans. The Quadrennial Defense Review 

stated that to ensure that DOD meets and maintains its $60-billion 

minimum funding level for procurement, DOD must stop the movement of 

funding planned for procurement in the FYDP to other accounts and 

achieve the overall funding increases it has programmed in its FYDPs to 

pay, in part, for its modernization plans.

23Future Years Defense Program: Substantial Risks Remain in DOD’s 1999-2003 Plan and

DOD Budget: Substantial Risk in Weapons Modernization Plans (GAO/T-NSIAD-99-20, 

Oct. 8, 1998).
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Family Housing Accounts 

May Require More Funding 

Than Programmed in the 

2000 FYDP

DOD programmed less money in the 2000 FYDP for family housing due to 

planned further implementation of the Military Housing Privatization 

Initiative. The purpose of the Initiative is to encourage private sector 

investment, rather than use government funding, to build and operate 

housing on military installations or in nearby communities where local 

markets could not meet military housing needs. The House Appropriations 

Military Construction Subcommittee, though, was concerned with some of 

the services’ plans to move to greater use of the Initiative instead of using 

the Initiative as a supplement to traditional military housing construction 

financing, which funds the construction and operation of military housing 

solely through DOD funding. As a result, the Army and the Navy scaled 

back their privatization plans and stated that the 2001 FYDP will show 

higher projected funding levels in the family housing construction and 

operations appropriation accounts.

Funding for family housing operations and construction activities was 

projected to be lower in the 2000 FYDP than in the 1999 FYDP over the 

2000-2003 period, as shown in figure 5. Total funding for this period was 

projected to be about $1.1 billion less in the 2000 FYDP.
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Figure 5: Annual Family Housing Funding Levels in the 1999 and 2000 FYDPs (in 

billions of fiscal year 2000 dollars)

Source: Our analysis of FYDP data.

Over the past several years, DOD had expressed concern over the poor 

condition of military family housing. To more quickly and economically 

remedy the housing problems, the Fiscal Year 1996 National Defense 

Authorization Act gave DOD the authority to test a new initiative, known as 

the DOD’s Military Housing Privatization Initiative.24 DOD’s goal was to 

reduce the government’s near-term outlays for housing revitalization by 

24P.L. 104-106, Feb. 10, 1996.

3.2

3.5 3.6

3.8

3.7

3.9 3.8 3.8

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2000 2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP
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encouraging the private sector to invest at least $3 in military housing 

development for each dollar that the government invested. By leveraging 

government funds by a minimum of 3 to 1, the military can stretch its 

available construction funds so that significantly more housing can be 

revitalized in comparison to traditional military housing financing. Under 

the Initiative, funds can be moved from military housing construction and 

operations accounts to military housing allowance accounts for use by 

military personnel for rent payments.

Progress in implementing the Initiative has been slow. Currently, DOD has 

only privatized 3,083 housing units under the Initiative although it had 

expected to privatize 15,000 units by 1999 according to the Defense Reform 

Initiative. DOD took steps in the 2000 FYDP to speed implementation of the 

program. When the 2000 FYDP was developed, DOD identified 7 

privatization projects for 2000 that would improve or build an additional 

10,500 units and moved funding from family housing appropriations to 

military personnel appropriations, reducing the level of annual family 

housing appropriations in the 2000 FYDP.

In June 1999, the House Appropriations Military Construction 

Subcommittee expressed concern that some of the services were not using 

the Initiative as intended by the legislation, which was to use the Initiative 

to supplement traditional military housing construction financing. The 

Army and the Navy planned aggressive use of the Initiative to reduce their 

housing deficiencies. The Army’s fiscal year 2000 program did not include 

any conventional military family housing construction funding for 

installations within the United States. The Navy’s fiscal year 2000 plan did 

not build any new family housing units within the continental United States 

during that fiscal year. Given the extent of the housing problems, and the 

slow pace of execution under the Initiative, the Subcommittee did not 

believe that the Army’s and the Navy’s aggressive use of the Initiative was 

appropriate. The Subcommittee stated that no further privatization 

approval would be forthcoming and that approved projects should be 

thoroughly reviewed by DOD. As a result of these concerns, DOD revised 

the privatization plans to include only five projects in 2000, not seven. 

Based on the revised plan, some funds will shift back to the family housing 

construction and operation accounts from the military housing allowance 

accounts in the 2001 FYDP. 
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We have also questioned how much DOD saves per unit by constructing 

family housing under the Initiative.25 In our review of two privatization 

projects, we found that the difference in the cost of privatization and 

traditional military construction financing was about 10 percent or less, 

considerably lower than the services’ estimates. Also, according to DOD, 

some projects under the Initiative may require more funding than originally 

projected.

DOD Unable to Shift Funds 

to Modernization and 

Readiness Through 

Infrastructure Reductions

Despite DOD’s continued emphasis to reduce its infrastructure to free up 

funds for its priorities, most notably modernization and readiness, our 

analysis found almost no reduction in the proportion of resources allocated 

to infrastructure in the 2000 FYDP from the allocation in the 1999 FYDP.26

Total funding for infrastructure and mission programs increased in the 

2000 FYDP, with over two-thirds of the increase provided to mission 

programs, resulting in almost no change to the overall proportion of 

mission and infrastructure in the total DOD program. In addition, DOD may 

not be able to reduce its infrastructure using two of its major infrastructure 

reduction initiatives−competitive sourcing and base realignment and 

closure. Our work to date has shown that although DOD has achieved some 

savings through competitive sourcing, savings are overestimated, at least in 

the short term, and it has taken longer to begin and complete the 

competitions than originally planned.27 Also, the National Defense 

Authorization Act for Fiscal Year 2000 contained no authorization for either 

of the two additional rounds of base closures DOD requested and included 

in the 2000 FYDP. Therefore, DOD will have less infrastructure savings 

available than planned in the 2000 FYDP to fund its priorities.

The Quadrennial Defense Review concluded that the downsizing of DOD’s 

infrastructure had fallen behind the downsizing of its force structure, and 

DOD could not afford to waste resources on an infrastructure “stuck in the 

past.” The Secretary of Defense stated that despite the additional funding in 

25Military Housing: Privatization Off to a Slow Start and Continued Management 

Attention Needed (GAO/NSIAD-98-178, July 17, 1998).

26DOD defines infrastructure as those activities that provide support services to mission 

programs, such as combat forces, and primarily operate from fixed locations.

27Defense Outsourcing: Challenges Facing DOD as It Attempts to Save Billions in 

Infrastructure Costs (GAO/T-NSIAD-97-110, March 12, 1997) and Defense Reform 

Initiative: Organization, Status, and Challenges (GAO/NSIAD-99-87, Apr. 21, 1999).
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DOD’s 2000 budget, DOD still needs to reduce excess support activities and 

infrastructure that continue to take resources away from readiness, 

modernization, and the quality of life of DOD’s personnel. Despite this 

emphasis on reducing DOD’s infrastructure to free up resources for DOD’s 

most pressing requirements, our reviews of DOD’s 1996-2000 FYDPs have 

shown that DOD has not made any significant reductions in the proportion 

of resources allocated to infrastructure.

The portion of DOD’s 2000 FYDP allocated to its direct infrastructure 

during the 2000-2001 period remained at about the same level as DOD 

projected its level of infrastructure funding in the 1999 FYDP.28 DOD 

projected only about 1 percent decline in the portion of resources allocated 

to infrastructure in 2002 and 2003 compared to the portion allocated to 

infrastructure in the 1999 FYDP, as shown in figure 6. In addition to this 

direct infrastructure, there are parts of the total infrastructure funding that 

cannot be clearly identified in the FYDP. These funds pay for goods and 

services sold by the four Defense Working Capital Funds and mostly 

represent logistics purchases.29 In the past, DOD estimated that this 

“indirect” infrastructure was on average an additional 14 percent of its total 

program.

28Using the FYDP, DOD has clearly identified program elements that fund infrastructure 

activities and refer to these as “direct infrastructure.”

29The Defense Working Capital Funds are revolving funds, which support self-sustaining 

activities in DOD that sell a product or service to DOD customers and then use the receipts 

from sales to pay operating expenses and purchase new stock. There is a Working Capital 

Fund for each service and defensewide to devolve the responsibility for cash balances to 

each DOD component.
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Figure 6: Mission and Direct Infrastructure Programs in 1999 and 2000 FYDPs

Source: Our analysis of FYDP data.

DOD projected increases in funding for both its mission and infrastructure 

programs in the 2000 FYDP. Over two-thirds of the annual increases in the 

2000 FYDP were for mission programs, and the remainder of the increases 

was for direct infrastructure, which had almost no impact on the overall 

proportion of mission to infrastructure in the total DOD program. Most of 

the increase in mission program funding was due to changing the 

designation of programs from infrastructure to mission, specifically direct 

support forces. For example, the Air Force personnel and funds in base 

operations and medical functions that have wartime missions were 

redesignated from infrastructure to combat support programs. Similarly, 

according to the Army, it moved considerable funding and personnel 

resources from central personnel and training programs (infrastructure 

programs) into direct support forces programs.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999

FYDP

2000

FYDP

1999

FYDP

2000

FYDP

1999

FYDP

2000

FYDP

1999

FYDP

2000

FYDP

Mission

Direct infrastructure

FY 2000 FY 2001 FY 2002 FY 2003
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Several infrastructure categories were projected to have funding increases 

over the 2000-2003 period. For example, central training infrastructure 

funding was projected to increase between 8 and 10 percent each year over 

the 2001-2003 period in the 2000 FYDP from the levels projected in the 1999 

FYDP.30 This increase was not surprising because we recently found that 

the Army, the Navy, and the Air Force may not have been able to 

accomplish their training programs at the reduced annual funding levels in 

the 1999 FYDP.31 Service officials agreed and told us that some training 

categories were underfunded and may require higher funding levels in the 

2000 FYDP. For example, since the services were experiencing lower-thanexpected retention rates for enlisted personnel, future training 

requirements would increase to replace the personnel not retained. 

However, all of the services projected that the number of personnel to be 

trained would be reduced, resulting in lower levels of training funding in 

the 1999 FYDP.

DOD continued to emphasize the reduction of unneeded support activities 

and infrastructure and its goal of having infrastructure consume a smaller 

portion of the defense budget through ongoing and proposed initiatives. 

DOD planned to use the savings to offset current funding shortfalls in 

modernization and quality of life initiatives. Its major initiative to reduce 

infrastructure is the ongoing Defense Reform Initiative, which included the 

proposed 2001 and 2005 rounds of base realignment and closures. The 

2000 FYDP included savings and costs from these initiatives.

DOD May Not Achieve All of the 

Savings Programmed in the 2000 

FYDP From Competitive 

Sourcing Initiatives

The 1999 FYDP was the first to reflect savings from DOD’s Defense Reform 

Initiative. The intention of the Initiative was to change how DOD does 

business internally and with the private sector. The Initiative has four basic 

tenets: (1) reduce excess infrastructure and redundancies, (2) adopt 

modern business practices to achieve world class standards of 

performance and continue to reform the acquisition process, (3) streamline 

organizations to remove redundancies and maximize synergy, and 

(4) expand the use of competition between the public and private sectors 

to improve performance and reduce the cost of DOD business and support 

activities. Quantifiable long-term savings, to pay for future modernization 

30Central training programs include individual training activities that provide training for 

active military personnel, reserve component personnel, and DOD civilians.

31Defense Infrastructure: Funding Risks in Services’ 1999 Central Training Programs

(GAO/NSIAD-99-56, Feb. 24, 1999).
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have been estimated for only two initiatives: public/private competitions 

(competitive sourcing) and base realignment and closures.

DOD estimated that competitive sourcing will save about $11.2 billion over 

the 1997 through 2005 period and $3.4 billion each year thereafter.32 Under 

competitive sourcing, a federal agency identifies the work to be performed; 

and prepares an in-house cost estimate, based on its most efficient 

organization; and compares it with the best offer from the private sector to 

determine which entity can perform the work more cost-effectively. For 

example, the Army’s program reflected anticipated savings of $3.1 billion 

from competitions over the 2000-2005 period. The Army expected that all of 

its competitive sourcing studies, which would determine whether it is less 

expensive to have in-house organizations or private contractors perform 

certain functions, will be completed by 2005 and that subsequent decisions 

will achieve “steady-state” savings of about $800 million per year. All of its 

projected savings in the 2000 FYDP were reprogrammed to pay for other 

Army high priority programs.

DOD’s past competitive sourcing efforts for various activities yielded some 

savings. However, because these efforts achieved lower savings than 

anticipated, we see risk in that DOD may not achieve all of the savings 

programmed in the 2000 FYDP for several reasons.33 First, DOD has 

established far greater and more aggressive goals for competitions than in 

the past. Second, our recent work concluded that the savings estimates 

provided to Congress from the use of competitive sourcing are overstated 

at least in the short term because DOD has not fully determined the upfront investment costs required to perform the competitive sourcing 

studies or the personnel separation costs likely to be associated with 

implementing the studies. Third, Defense components have fallen behind in 

beginning and completing many of the initial studies. DOD officials have 

raised concerns about the number of positions that can be reasonably 

studied during the prescribed time frame and the likelihood that the 

projected savings can be realized.

32These values are in current dollars.

33Defense Reform Initiative (GAO/NSIAD-99-87, Apr. 21, 1999).
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Congress Did Not Approve 

Additional Base Realignment and 

Closure Rounds

To enable DOD to close unneeded bases, Congress enacted base closure 

legislation that instituted base closure rounds in 1988, 1991, 1993, and 1995. 

The 2000 FYDP, like the 1999 FYDP, requested congressional approval for 

two more rounds of base realignment and closure (referred to as base 

closures) in 2001 and 2005. Both FYDPs included approximately 

$790 million in 2002 and $1.3 billion in 2003 to begin implementation of a 

2001 base closure round. The 2000 program also contained $525 million in 

base closure funding in 2004. DOD estimated that initial net savings from a 

2001 base closure round would occur in 2005 and showed $162 million in 

savings for that year in the 2000 program. In total, DOD estimated that the 

two base closure rounds would yield savings of over $20 billion over the 

2008-2015 period and $3 billion annually thereafter.34 DOD continued to 

emphasize that it needs two more base closure rounds to reduce excess 

base capacity and to free up additional funds for readiness, weapon 

modernization, and quality of life plans. DOD stated that although force 

structure has been reduced by 36 percent, base capacity has only been 

reduced by 26 percent through the four previous base closure rounds. 

Congress did not authorize new base closure rounds. Many Members of 

Congress have been reluctant to support additional base closure rounds 

because they were concerned about the costs and savings from prior base 

closure rounds, their economic impact, and executive branch 

implementation of the 1995 base closure commission’s recommendations 

regarding McClelland and Kelly Air Force bases in California and Texas, 

respectively. In May 1999, the Senate rejected a proposed amendment to 

the National Defense Authorization for Fiscal Year 2000 bill to establish 

another base closure round in 2001. Thus, DOD will need to make some 

changes to the 2000 program, especially in 2005 when DOD expects the 

first net savings to appear. Also, until additional rounds are approved, DOD 

will have the net cost of these rounds to reallocate to other programs. DOD 

stated that without base closure authority, it will need to continue spending 

scarce funds on maintaining excess infrastructure, and identify other 

funding sources to meet these needs, including modernization.

34These values are in current dollars.
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Page 35 GAO/NSIAD-00-11 Future Years Defense Program

Most Savings From Base 

Closings and Other 

Initiatives Come From 

Lower Civilian Personnel 

Employment Levels

The personnel levels in the 1999 FYDP reflected the Quadrennial Defense 

Review’s recommendations−reductions in military personnel and civilians. 

In the 2000 FYDP, DOD continued to project a decline in military personnel 

levels, but the decline was about 2,000 people less than projected in the 

1999 FYDP, as shown in figure 7.

Figure 7: Military Personnel Levels in the 1999 and 2000 FYDPs (military personnel 

in thousands)

Source: DOD FYDP data.

Figure 8 shows that the number of civilian personnel continues to decline, 

but DOD projected over 20,000 fewer civilians in 2003 in the 

2000 FYDP than projected in the 1999 FYDP. Programmed lower levels of 

civilian personnel employment provided most of the eventual savings from 

base closings and other initiatives.

2,203

2,222

2,247

2,203

2,208 2,212

2,231

2,251

2,170

0

2,180

2,190

2,200

2,210

2,220

2,230

2,240

2,250

2,260

2000

Personnel

2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP
B-283583

Page 36 GAO/NSIAD-00-11 Future Years Defense Program

Figure 8: Civilian Personnel Levels in the 1999 and 2000 FYDPs (civilian personnel 

in thousands)

Source: DOD FYDP data.

The ability of DOD to make such significant reductions in civilian 

personnel levels will depend on whether DOD receives authority for a 

2001 base closure round, if competitive sourcing and other Defense Reform 

Initiative projects are completed on time, and if the timing and estimates of 

the savings are accurate. For example, the Navy projected almost 

13,370 fewer civilians in 2003 as competitive sourcing is implemented. The 

Air Force was the only service that projected that its civilian personnel 

levels would be higher in the 2000 FYDP than in the 1999 FYDP over the 

2001-2003 period, although the annual levels in the 2000 FYDP were 

projected to be lower in 2003 than in 2000. According to the Air Force, 

these increases resulted from more refined estimates of reductions in 

civilian personnel requirements from implementing competitive sourcing. 

As mentioned previously, the services’ ability to achieve these reductions 

when planned is questionable since several services have fallen behind in 

beginning and completing the initial competitive sourcing studies.

2000

Personnel

2001 2002 2003

Fiscal year

1999 FYDP

2000 FYDP

672

652

680

694

715

700

684

668

620

0

630

640

650

660

670

680

690

700

710

720

730
B-283583

Page 37 GAO/NSIAD-00-11 Future Years Defense Program

Agency Comments In written comments on a draft of this report, DOD provided technical 

comments, which we included in the report where appropriate. DOD’s 

comments are reprinted in their entirety in appendix II.

Scope and 

Methodology

To determine the major program adjustments in DOD’s defense plan, we 

analyzed funding data from the 1999 and 2000 FYDPs for fiscal years 

2000−2003. We adjusted the current dollars to constant 2000 dollars using 

appropriate DOD Comptroller inflation indexes. We did not test DOD’s 

management controls of the FYDP data or verify the data contained in 

either the 1999 or the 2000 FYDPs. However, we compared DOD’s 

automated FYDP data with published documents DOD provided. 

Specifically, we compared total budget estimates, appropriation totals, 

military and civilian personnel levels, force structure levels, and some 

specific program information. Based on our comparisons, we were 

satisfied that the automated FYDP data and published data were in 

agreement.

To identify risks in the 2000 FYDP and determine how DOD will achieve 

savings programmed in that FYDP, we interviewed program and budget 

officials in the Office of the Secretary of Defense, Army, Navy, and Air 

Force Headquarters. We also examined various DOD planning and budget 

documents, including the 1999 Report of the Secretary of Defense to the 

President and the Congress, Programming and Budget Decisions for the 

2000 budget, the President’s fiscal years 1999 and 2000 budget submissions, 

the Mid-Session Review of the Fiscal Year 2000 Budget, Selected 

Acquisition Reports, the Report of the Quadrennial Defense Review, and 

the Defense Reform Initiative Report. We also reviewed congressional 

testimonies of various DOD officials to support the 1999 and 2000 budget 

submissions; our prior reports; and pertinent reports by the Congressional 

Budget Office, the Congressional Research Service, and others. In addition, 

we provided each services and the Office of the Secretary of Defense 

(Program Analysis and Evaluation) with questions about the changes 

between the two FYDPs. We included their responses throughout the 

report as appropriate.

Our review was conducted from April through October 1999 in accordance 

with generally accepted government auditing standards.
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Page 38 GAO/NSIAD-00-11 Future Years Defense Program

We are sending copies of this report to other appropriate congressional 

committees; the Honorable William Cohen, Secretary of Defense; the 

Honorable F. Whitten Peters, Secretary of the Air Force; the Honorable 

Louis Caldera, Secretary of the Army; and the Honorable Richard Danzig, 

Secretary of the Navy. We will also provide copies to others upon request.

If you have any questions concerning this report, please call Robert 

Pelletier on (202) 512-4032. Key contributors to this report were Edna Thea 

Falk, Gaines R. Hensley, Patricia Lentini, and Dale Wineholt.

Sincerely yours,

Norman J. Rabkin

Director, National Security

Preparedness
Page 39 GAO/NSIAD-00-11 Future Years Defense Program
Page 40 GAO/NSIAD-00-11 Future Years Defense Program

Appendix I

Department of Defense’s 1999 and 2000 Future Apendxies

Years Defense Programs by Account ApendxiI

The following tables show the differences between accounts in the 1999 

and 2000 Future Years Defense Programs (FYDP) for each appropriation 

over the years common to the two programs, 2000-2003.
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 41 GAO/NSIAD-00-11 Future Years Defense Program

Table 3: Military Personnel Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal year 

2000 dollars)

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Military personnel, Army 1999 $21,102 $21,008 $21,040 $21,098 $84,248

2000 22,007 21,957 21,906 21,920 87,790

Change 904 949 866 822 3,542 4.2

Military personnel, Navy 1999 16,721 16,491 16,453 16,458 66,123

2000 17,207 17,311 17,323 17,295 69,137

Change 487 820 870 837 3,014 4.6

Military personnel, 1999 6,533 6,520 6,498 6,478 26,030

Marine Corps 2000 6,545 6,619 6,618 6,611 26,394

Change 12 99 120 133 364 1.4

Military personnel, 1999 17,621 17,068 16,645 16,430 67,763

Air Force 2000 17,900 17,787 17,498 17,351 70,537

Change 279 720 853 922 2,773 4.1

Reserve personnel, Army 1999 2,199 2,173 2,106 2,111 8,590

2000 2,271 2,290 2,267 2,300 9,129

Change 72 117 161 189 539 6.3

Reserve component 1999 0

personnel, Army 2000 -29 -92 -137 -259

Change 0 -29 -92 -137 -259

Reserve personnel, Navy 1999 1,405 1,385 1,369 1,364 5,522

2000 1,446 1,429 1,422 1,416 5,713

Change 42 45 53 52 191 3.5

Reserve personnel, 1999 410 395 383 375 1,563

Marine Corps 2000 409 410 407 398 1,624

Change 0 14 25 22 61 3.9

Reserve personnel, 1999 906 903 901 900 3,610

Air Force 2000 881 910 908 904 3,604

Change -25 7 7 5 -6 -0.2

National Guard personnel, 1999 3,399 3,296 3,216 3,179 13,091

Army 2000 3,571 3,588 3,600 3,634 14,393

Change 171 291 384 455 1,301 9.9

National Guard personnel, 1999 1,423 1,417 1,419 1,422 5,681

Air Force 2000 1,487 1,502 1,504 1,507 5,999

Change $64 $85 $85 $85 $319 5.6

(Continued )
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 42 GAO/NSIAD-00-11 Future Years Defense Program

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Total 1999 $71,719 $70,657 $70,030 $69,815 $282,221

2000 $73,723 $73,775 $73,363 $73,199 $294,060

Change $2,004 $3,118 $3,332 $3,384 $11,839 4.2

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

(Continued from Previous Page)
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 43 GAO/NSIAD-00-11 Future Years Defense Program

Table 4: Operation and Maintenance Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of 

fiscal year 2000 dollars)

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Operation and 1999 $17,296 $17,212 $17,316 $17,111 $68,935

maintenance (O&M), 2000 18,661 18,690 19,038 19,006 75,396

Army Change 1,365 1,478 1,723 1,895 6,460 9.4

O&M, Navy 1999 21,413 20,778 20,558 20,566 83,315

2000 22,239 21,799 21,503 21,506 87,047

Change 825 1,021 944 940 3,731 4.5

O&M, Marine Corps 1999 2,533 2,477 2,491 2,528 10,030

2000 2,559 2,623 2,575 2,539 10,297

Change 26 146 84 11 267 2.7

O&M, Air Force 1999 20,150 20,833 20,660 20,864 82,507

2000 20,363 21,337 21,248 21,598 84,547

Change 213 504 589 735 2,040 2.5

O&M, defensewide 1999 10,528 10,511 10,518 10,526 42,082

2000 11,419 11,119 11,072 11,024 44,634

Change 892 608 554 498 2,552 6.1

O&M, Army Reserve 1999 1,227 1,191 1,214 1,208 4,840

2000 1,369 1,442 1,491 1,497 5,799

Change 142 252 277 289 959 19.8

O&M, Army Reserve 1999 0

Component 2000 -17 -49 -66 -132

Change 0 -17 -49 -66 -132

O&M, Navy Reserve 1999 928 872 994 830 3,624

2000 918 865 893 971 3,648

Change -10 -7 -100 141 23 0.6

O&M, Marine Corps 1999 112 103 102 101 418

Reserve 2000 123 126 124 124 498

Change 11 23 22 23 80 19.0

O&M, Air Force 1999 1,649 1,634 1,637 1,641 6,560

Reserve 2000 1,728 1,737 1,756 1,768 6,990

Change 80 103 119 127 430 6.6

O&M, Army National 1999 2,356 2,366 2,369 2,421 9,512

Guard 2000 2,904 2,962 3,005 3,021 11,892

Change $547 $596 $637 $600 $2,380 25.0

(Continued )
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 44 GAO/NSIAD-00-11 Future Years Defense Program

O&M, Air National 1999 $3,031 $3,006 $3,035 $3,032 $12,103

Guard 2000 3,100 3,165 3,167 3,153 12,584

Change 69 159 132 121 481 4.0

Environmental 1999 379 376 375 375 1,505

restoration fund, Army 2000 378 373 333 332 1,416

Change -1 -4 -42 -42 -88 -5.9

Environmental 1999 295 291 374 316 1,275

restoration fund, Navy 2000 284 288 269 244 1,084

Change -11 -2 -105 -72 -191 -14.9

Environmental 1999 381 379 377 375 1,512

restoration fund, 2000 377 369 367 364 1,477

Air Force Change -4 -9 -10 -12 -36 -2.4

Environmental 1999 25 23 23 22 93

restoration fund, 2000 25 23 22 22 92

defensewide Change 0 0 0 0 -1 -0.8

Environmental 1999 298 184 184 182 848

restoration fund, 2000 199 183 182 180 743

formerly used sites Change -99 -1 -2 -2 -105 -12.4

Drug interdiction and 1999 702 701 694 690 2,788

counterdrug activities, 2000 788 749 737 726 3,001

defense Change 86 48 43 36 213 7.6

Defense Health Program 1999 10,302 10,554 10,427 10,347 41,629

2000 10,835 10,973 10,713 10,523 43,043

Change 533 419 286 176 1,414 3.4

Former Soviet Union 1999 444 450 241 413 1,549

threat reduction 2000 476 488 429 466 1,857

Change 31 38 188 52 309 19.9

Overseas contingency 1999 148 145 142 138 573

operations transfer fund 2000 2,388 1,261 280 273 4,202

Change 2,240 1,116 139 135 3,629 633.5

Other O&M 1999 196 190 190 191 767

2000 2,134 213 214 213 2,774

Change 1,937 24 24 23 2,008 261.8

Total 1999 $94,395 $94,274 $93,918 $93,877 $376,464

2000 $103,266 $100,769 $99,369 $99,484 $402,888

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

(Continued from Previous Page)
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 45 GAO/NSIAD-00-11 Future Years Defense Program

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Table 5: Procurement Appropriation Category by Component, 1999 and 2000 FYDPs (total obligational authority in millions of 

fiscal year 2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Change $8,870 $6,495 $5,451 $5,607 $26,424 7.0

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

(Continued from Previous Page)

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Army procurement 1999 $8,982 $9,683 $10,653 $11,382 $40,700

2000 8,569 9,371 10,290 11,770 40,001

Change -413 -312 -363 388 -700 -1.7

Navy/Marine Corps 1999 21,322 25,484 21,890 22,481 91,178

procurement 2000 21,987 26,588 23,488 25,194 97,257

Change 665 1,104 1,598 2,713 6,079 6.7

Air Force procurement 1999 18,558 20,050 20,807 20,831 80,245

2000 19,166 20,947 22,127 22,092 84,333

Change 608 898 1,320 1,261 4,088 5.1

Defensewide 1999 4,394 3,980 4,150 4,280 16,804

procurement 2000 3,299 3,833 4,250 3,955 15,337

Change -1,095 -147 100 -326 -1,467 -8.7

Total 1999 $53,256 $59,196 $57,501 $58,975 $228,928

2000 $53,022 $60,740 $60,155 $63,011 $236,928

Change $-235 $1,543 $2,655 $4,036 $8,000 3.5
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 46 GAO/NSIAD-00-11 Future Years Defense Program

Table 6: Army Procurement Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal year 

2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Aircraft procurement, Army 1999 $1,350 $1,407 $1,902 $1,925 $6,584

2000 1,230 1,290 1,858 2,142 6,519

Change -120 -117 -45 217 -65 -1.0

Missile procurement, Army 1999 1,409 1,463 1,410 1,193 5,475

2000 1,358 1,389 1,304 1,503 5,554

Change -51 -74 -107 310 79 1.4

Procurement of weapons and 1999 1,541 1,560 1,700 1,774 6,575

tracked combat vehicles, Army 2000 1,417 1,474 1,642 1,646 6,180

Change -124 -86 -58 -128 -396 -6.0

Procurement of ammunition, 1999 1,138 1,190 1,417 1,545 5,290

Army 2000 1,141 1,236 1,365 1,448 5,189

Change 3 45 -52 -97 -101 -1.9

Other procurement, Army 1999 3,544 4,062 4,224 4,945 16,776

2000 3,424 3,982 4,122 5,031 16,559

Change -121 -80 -102 86 -217 -1.3

Total 1999 $8,982 $9,683 $10,653 $11,382 $40,700

2000 $8,569 $9,371 $10,290 $11,770 $40,001

Change $-413 $-312 $-363 $388 $-700 -1.7
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 47 GAO/NSIAD-00-11 Future Years Defense Program

Table 7: Navy/Marine Corps Procurement Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions 

of fiscal year 2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Aircraft procurement, Navy 1999 $7,998 $7,515 $7,635 $7,418 $30,566

2000 8,229 7,875 8,270 8,381 32,755

Change 231 361 635 963 2,189 7.2

Weapons procurement, Navy 1999 1,590 1,649 1,789 1,896 6,924

2000 1,357 1,533 1,619 1,849 6,359

Change -232 -116 -170 -46 -565 -8.2

Shipbuilding and conversion, 1999 6,118 11,144 6,924 7,425 31,611

Navy 2000 6,678 12,019 7,323 8,264 34,285

Change 560 875 399 839 2,674 8.5

Ammunition procurement, 1999 481 459 474 536 1,950

Navy and Marine Corps 2000 485 472 532 610 2,099

Change 4 13 58 75 149 7.7

Other procurement, Navy 1999 4,173 3,711 4,096 4,265 16,244

2000 4,100 3,579 4,571 4,787 17,036

Change -73 -132 475 522 792 4.9

Procurement, Marine Corps 1999 962 1,007 972 942 3,883

2000 1,137 1,111 1,173 1,303 4,724

Change 175 104 201 361 841 21.7

Total 1999 $21,322 $25,484 $21,890 $22,481 $91,178

2000 $21,987 $26,588 $23,488 $25,194 $97,257

Change $665 $1,104 $1,598 $2,713 $6,079 6.7
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 48 GAO/NSIAD-00-11 Future Years Defense Program

Table 8: Air Force Procurement Appropriations Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal

year 2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Aircraft procurement, Air Force 1999 $8,084 $9,164 $9,846 $9,429 $36,524

2000 9,302 9,755 10,607 10,637 40,302

Change 1,218 591 761 1,208 3,778 10.3

Missile procurement, Air Force 1999 2,754 3,077 3,168 3,339 12,338

2000 2,360 3,281 3,573 3,351 12,564

Change -395 204 405 12 226 1.8

Procurement of ammunition, 1999 539 697 657 754 2,647

Air Force 2000 420 637 603 601 2,261

Change -119 -60 -54 -154 -387 -14.6

Other procurement, Air Force 1999 7,182 7,111 7,136 7,308 28,736

2000 7,085 7,274 7,343 7,503 29,206

Change -96 163 208 195 470 1.6

Total 1999 $18,558 $20,050 $20,807 $20,831 $80,245

2000 $19,166 $20,947 $22,127 $22,092 $84,333

Change $608 $898 $1,320 $1,261 $4,088 5.1
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 49 GAO/NSIAD-00-11 Future Years Defense Program

Table 9: Defensewide Procurement Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of 

fiscal year 2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Procurement, defensewide 1999 $3,262 $2,996 $3,060 $3,463 $12,781

2000 2,129 2,862 3,176 3,151 11,319

Change -1,133 -134 117 -312 -1,463 -11.4

Chemical agents and munitions 1999 1,131 982 1,089 816 4,018

destruction, defense 2000 1,169 969 1,074 804 4,016

Change 38 -12 -15 -12 -2 0.0

Defense export loan 1999 1 1 1 1 6

guarantees 2000 1 1 2

Change 0 0 -1 -1 -3 -57.0

Total 1999 $4,394 $3,980 $4,150 $4,280 $16,804

2000 $3,299 $3,833 $4,250 $3,955 $15,337

Change $-1,095 $-147 $100 $-326 $-1,467 -8.7
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 50 GAO/NSIAD-00-11 Future Years Defense Program

Table 10: Research, Development, Test, and Evaluation Appropriation Accounts, 1999 and 2000 FYDPs (total obligational 

authority in millions of fiscal year 2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Research, development, 1999 $4,696 $4,751 $4,651 $4,555 $18,654

test, and evaluation (RDT&E), 2000 4,426 4,665 4,747 4,427 18,266

Army Change -270 -86 96 -128 -388 -2.1

RDT&E, Navy 1999 7,512 7,011 7,302 7,711 29,536

2000 7,984 7,832 8,009 7,760 31,585

Change 472 820 708 49 2,049 6.9

RDT&E, Air Force 1999 12,459 11,914 12,174 12,255 48,802

2000 13,078 12,527 12,301 12,471 50,377

Change 619 613 127 216 1,575 3.2

RDT&E, defensewide 1999 8,551 8,037 7,517 7,226 31,331

2000 8,609 8,376 8,115 7,684 32,785

Change 58 339 598 458 1,453 4.6

Director test and 1999 260 255 246 255 1,016

evaluation, defense 2000 253 249 240 248 991

Change -6 -6 -6 -7 -25 -2.5

Director, Operational test and 1999 25 24 24 24 98

evaluation, defense 2000 24 24 24 23 95

Change -1 -1 -1 -1 -3 -3.5

Total 1999 $33,503 $31,993 $31,915 $32,026 $129,437

2000 $34,375 $33,673 $33,436 $32,614 $134,098

Change $872 $1,679 $1,521 $588 $4,661 3.6
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 51 GAO/NSIAD-00-11 Future Years Defense Program

Table 11: Military Construction Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal

year 2000 dollars)

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Military construction, Army 1999 $935 $849 $922 $713 $3,419

2000 656 1,581 1,032 872 4,141

Change -279 732 110 160 722 21.1

Military construction, Navy 1999 700 728 772 876 3,077

2000 320 1,240 846 954 3,359

Change -380 512 73 78 282 9.2

Military construction, Air Force 1999 446 501 592 602 2,141

2000 179 898 590 580 2,247

Change -267 397 -2 -22 106 5.0

Military construction, defensewide 1999 800 517 497 799 2,614

2000 193 1,107 783 926 3,009

Change -607 590 286 126 395 15.1

Military construction, 1999 79 73 70 69 290

Army Reserve 2000 23 140 68 57 288

Change -56 68 -2 -12 -2 -0.7

Military construction, 1999 21 21 22 34 99

Navy Reserve 2000 5 29 23 21 78

Change -16 9 1 -14 -20 -20.7

Military construction, 1999 60 46 45 45 197

Army National Guard 2000 16 88 51 46 201

Change -44 41 5 2 4 2.0

Military construction, 1999 106 119 53 55 332

Air National Guard 2000 21 107 48 54 230

Change -84 -13 -5 0 -102 -30.7

Military construction, 1999 26 29 32 33 119

Air Force Reserve 2000 12 35 23 29 99

Change -13 5 -9 -3 -20 -16.8

North Atlantic Treaty 1999 289 330 368 358 1,345

Organization Security 2000 202 205 255 249 911

Investment Program Change -87 -125 -113 -109 -434 -32.2

Base realignment and 1999 1,361 1,037 151 109 2,658

closure accounts, III-IV 2000 689 1,540 59 25 2,313

Change $-672 $503 $-92 $-84 $-346 -13.0

(Continued )
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 52 GAO/NSIAD-00-11 Future Years Defense Program

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Base realignment and 1999 0

closure accounts, 2000 $319 $283 $602

environmental restoration Change 0 0 319 283 602

Total 1999 $4,824 $4,250 $3,523 $3,692 $16,290

2000 $2,317 $6,969 $4,095 $4,097 $17,478

Change $-2,507 $2,719 $572 $404 $1,188 7.3

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

(Continued from Previous Page)
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 53 GAO/NSIAD-00-11 Future Years Defense Program

Table 12: Family Housing Appropriation Accounts, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal year 

2000 dollars)

a

Includes both Family Housing, Construction and Family Housing, Operations appropriations.

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Family housing, Army 1999a $1,225 $1,194 $1,199 $1,228 $4,846

2000a 1,112 1,044 975 1,018 4,150

Change -113 -150 -224 -210 -696 -14.4

Family housing, Navy and 1999a 1,184 1,170 1,180 1,172 4,706

Marine Corps 2000a 960 1,222 1,103 1,069 4,354

Change -224 52 -77 -103 -352 -7.5

Family housing, Air Force 1999a 1,064 1,064 1,065 1,058 4,252

2000a 924 1,256 1,301 1,338 4,818

Change -140 192 236 280 567 13.3

Family housing, defensewide 1999a 38 37 36 35 145

2000a 41 43 43 42 169

Change 4 6 7 7 24 16.4

Homeowner’s assistance 1999 0

fund, defense 2000 63 50 113

Change 63 50 0 0 113

DOD family housing 1999 335 327 190 373 1,224

improvement fund 2000 79 172 71 84 406

Change -256 -154 -119 -288 -818 -66.8

Total 1999 $3,845 $3,792 $3,669 $3,866 $15,172

2000 $3,178 $3,788 $3,492 $3,551 $14,010

Change $-666 $-4 $-177 $-315 $-1,162 -7.7
Appendix I

Department of Defense’s 1999 and 2000 

Future Years Defense Programs by Account

Page 54 GAO/NSIAD-00-11 Future Years Defense Program

Table 13: Revolving and Management Funds, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal year 2000 

dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Table 14: Defensewide Contingencies, 1999 and 2000 FYDPs (total obligational authority in millions of fiscal year 2000 dollars)

Note: Totals may not add due to rounding.

Source: Our analysis of FYDP data.

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

DOD working capital funds 1999 $443 0 0 $654 $1,097

2000 90 $384 $149 299 922

Change -353 384 149 -354 -174 -15.9

National defense sealift 1999 331 356 354 356 1,398

fund 2000 355 372 369 371 1,466

Change 23 15 15 15 68 4.9

Total 1999 $775 $356 $354 $1,009 $2,494

2000 $445 $756 $517 $670 $2,388

Change $-329 $399 $163 $-339 $-106 -4.3

Appropriation category FYDP 2000 2001 2002 2003 Total

Percent

change

2000-2003

Undistributed contingencies, 1999 $1 $1 $791 $1,346 $2,139

defense 2000 0 0 $790 $1,342 $2,132

Change $-1 $-1 $-1 $-4 $-7 -0.3
Page 55 GAO/NSIAD-00-11 Future Years Defense Program

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