United States General Accounting Office

GAO Report to Congressional Requesters

September 1995 FUTURE YEARS

DEFENSE PROGRAM

1996 Program Is

Considerably Different

From the 1995

Program

GAO/NSIAD-95-213

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-265840 

September 15, 1995

The Honorable William V. Roth, Jr.

Chairman, Committee on Governmental Affairs

United States Senate

The Honorable John R. Kasich

Chairman, Committee on the Budget

House of Representatives

The Honorable Charles E. Grassley

United States Senate

At your request, we compared the Department of Defense’s (DOD) fiscal

year 1996 Future Years Defense Program (FYDP) with the FYDP for fiscal

year 1995. Specifically, you asked us to determine (1) what major program

adjustments were made from the 1995 FYDP to the 1996 FYDP, (2) what the

implications of these changes are for the future, and (3) whether the 1996

FYDP complies with statutory requirements.

Background Dramatic changes that occurred in the world as a result of the end of the

Cold War and the dissolution of the Soviet Union have fundamentally

altered the United States’ security needs. In March 1993, DOD initiated a

comprehensive review to define and redesign the nation’s defense

strategy, force structure, modernization, infrastructure, and budgets “from

the bottom up.” The report of the Bottom-Up Review, issued in

October 1993, concluded that DOD could reduce its forces and

infrastructure from a posture designed to meet a global Soviet threat to

one that focuses on potential regional conflicts.1

In our review of the 1995 FYDP,

2

 the first FYDP to reflect the implementation

of the Bottom-Up Review strategy, we concluded that DOD’s major

planning assumptions relied too heavily on optimistic cost estimates and

potential savings. As a result, it had not gone far enough to meet economic

realities, thus leaving its new plan with more programs than proposed

budgets would support. This included approximately $20 billion in

1

DOD defines infrastructure as all DOD activities other than those directly associated with operational

forces, intelligence, strategic defense, and applied research and development.

2

Future Years Defense Program: Optimistic Estimates Lead to Billions in Overprogramming

(GAO/NSIAD-94-210, July 29, 1994).

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overprogramming, which DOD identified in the 1995 FYDP as undistributed

future adjustments.

Results in Brief The fiscal year 1996 FYDP, which covers fiscal years 1996-2001, is

considerably different from the 1995 FYDP, which covers fiscal years

1995-99. First, the total program increased by about $12.6 billion in the 

4 common years of both plans (fiscal years 1996-99). Second,

approximately $27 billion in planned weapon system modernization

programs for these 4 years have been eliminated, reduced, or deferred to

the year 2000 and beyond. Third, the military personnel, operation and

maintenance, and family housing accounts increased by over $21 billion

during the common period and continue to increase to 2001 to support

Defense’s emphasis on readiness and quality-of-life programs. The net

effect is a more costly defense program, despite substantial reductions in

DOD’s weapon modernization programs between 1996 and 1999.

Defense plans to compensate for the decline in procurement during the

early years of the 1996 FYDP by substantially increasing procurement

funding in 2000 and 2001. The Secretary of Defense plans to pay for the

increased future modernization with a combination of savings achieved

from infrastructure reductions and acquisition reforms and from real

budget growth.

Our analysis shows that the 1996 FYDP does not reflect reduced

infrastructure costs, primarily because of funding increases for base

operation and management headquarters functions and quality-of-life

programs. However, the Concurrent Resolution on the Budget for Fiscal

Year 1996 includes over $24 billion more for Defense than requested in the

President’s budget for fiscal years 1996-2001. The additional budget

amounts are expected, in part, to lessen the need for Defense to reduce or

defer weapon modernization programs to meet other near-term readiness

requirements. Assuming the funds are appropriated, Congress will specify

how Defense is to spend some of the added funds; however, DOD may have

an opportunity to restore some programs that were reduced or deferred to

the year 2000 and beyond. Further, the additional near-term funding could

mitigate the need for DOD to increase out-year budgets.

The fiscal year 1996 FYDP was submitted in compliance with applicable

legislative requirements.

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1996 FYDP Shifts

Weapons

Procurement to Later

Years to Fund Higher

Priority Programs

The 1995 FYDP, which totaled $1,240 billion, represented DOD’s 5-year

program plan through fiscal year 1999. The 1996 FYDP, which totals

$1,544 billion, covers the 6-year period from fiscal year 1996 through fiscal

year 2001. The 1996 plan overlaps the 1995 plan for the years 1996-99.

Table 1 compares the two plans by primary appropriation account. The

shaded area represents the common years to both plans.

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Table 1: Comparison of DOD’s 1995 and 1996 FYDPs by Primary Appropriation Account

Fiscal year

Totals

Dollars in billlions

Appropriation Accounts 1995 1996 1997 1998 1999 2000 2001

FYDP

1995

FYDP

1996

Military Personnel FY 1995 $70.5 $66.2 $65.7 $66.1 $67.3 $335.8

FY 1996 $68.7 $67.5 $68.2 $69.6 $70.9 $72.3 $417.2

Operation and Maintenance FY 1995 92.9 88.0 88.0 88.5 90.6 448.0

FY 1996 91.9 90.6 89.9 92.7 94.8 98.1 558.0

Procurement FY 1995 43.3 48.4 49.8 57.1 60.1 258.7

FY 1996 39.4 43.5 51.4 54.2 62.3 67.3 318.1

Research, Development, Test FY 1995 36.2 34.8 32.1 30.9 30.2 164.2

And Evaluation FY 1996 34.3 32.7 31.7 30.9 30.2 30.6 190.4

Military Construction FY 1995 5.2 7.9 5.5 4.7 4.1 27.4

FY 1996 6.7 5.1 4.6 4.4 3.8 3.9 28.5

Family Housing FY 1995 3.6 3.6 3.7 3.6 3.9 18.4

FY 1996 4.3 4.5 4.1 4.4 4.5 4.6 26.4

Other FY 1995 1.8 1.6 2.1 1.6 1.0 $8.1

FY 1996 1.8 0.6 0.9 1.0 0.6 0.8 5.7

Undistributed Adjustments FY 1995 –6.4 –5.4 –5.0 –3.3 –20.1

Totals FY 1995 $253.5 $244.2 $241.5 $247.5 $253.8 $1,240.5

FY 1996 $247.1 $244.4 $250.8 $257.3 $267.1 $277.5 $1,544.2

Increases $2.9 $2.9 $3.3 $3.5

Note: Program estimates in DOD’s FYDP are expressed in total obligational authority. Total

obligational authority is the sum of (a) new budget authority provided for a given fiscal year; 

(b) any balances brought forward from prior years that may remain available for obligation; and 

(c) any other amounts authorized to be credited to a specific fund or account during that year,

including transfers between funds or accounts. Table totals may not add due to rounding.

Source: Fiscal years 1995 and 1996 FYDPs.

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Our analysis of the two FYDPs shows that during the 4 common years, the

budget increases by about $3 billion annually. In addition, DOD reduced the

1996 FYDP for the $20 billion in undistributed future adjustments included

in the 1995 FYDP. These reductions were made primarily in the

procurement account. The largest changes from one year to the next in the

1996 FYDP occur during the last 2 years of the plan when the budget is

projected to increase by about $10 billion from 1999 to 2000 and by

another $10.4 billion from 2000 to 2001. This represents about a 1-percent

real increase after inflation for those years.

According to the Secretary of Defense, the 1996 FYDP emphasizes readiness

and quality-of-life programs. As such, the Secretary increased the budgeted

amounts for the operation and maintenance, military personnel, and family

housing accounts from the 1995 FYDP to the 1996 FYDP as shown in table 1.

The following sections discuss some of the more significant changes in

each of the primary appropriation accounts.

Military Personnel The 1995 FYDP proposed holding military pay raises below the amount

included in current law, about 1.6 percent versus 2.6 percent. According to

DOD, the 1996 FYDP funds the full military pay raises provided for under law

through 1999. About $7.3 billion of the $8.7 billion of additional funds

proposed for the military personnel account is to cover the planned pay

raises. Table 2 shows a comparison of the military personnel account in

the 1995 and 1996 FYDPs.

Table 2: Comparison of the Military Personnel Account in the 1995 and 1996 FYDPs

(dollars in billions)

Military personnel 1995 1996 1997 1998 1999 2000 2001 Total

1995 FYDP $70.5 $66.2 $65.7 $66.1 $67.3

1996 FYDP 68.7 67.5 68.2 69.6 $70.9 $72.3

Increase 1996-99 $2.5 $1.8 $2.1 $2.3 $8.7

Note: Figures are expressed in total obligational authority.

Source: Fiscal years 1995 and 1996 FYDPs.

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Operation and

Maintenance

As table 3 shows, the operation and maintenance account is projected to

increase by a total of about $10 billion for the common years of the 1995

and 1996 FYDPs.

Table 3: Comparison of the Operation and Maintenance Account in the 1995 and 1996 FYDPs

(dollars in billions)

Operation and

maintenance 1995 1996 1997 1998 1999 2000 2001 Total

1995 FYDP $92.9 $88.0 $88.0 $88.5 $90.6

1996 FYDP 91.9 90.6 89.9 92.7 $94.8 $98.1

Increase 1996-99 $3.9 $2.6 $1.4 $2.1 $10.0

Note: Figures are expressed in total obligational authority.

Source: Fiscal years 1995 and 1996 FYDPs.

The budgeted amounts for many operation and maintenance programs

changed from the 1995 to the 1996 FYDP resulting in the net increase of

$10 billion during the 4 common years, 1996-99. Our review shows that the

largest increases were in the base operations and management

headquarters functions. These functions include child care and

development, family centers, base communications, real property services,

environmental programs, and other infrastructure-related activities. For

example, Army base operations and management headquarters, including

maintenance and repair activities funding show a net increase of about

$3 billion. Similarly, the Navy’s base operations, operations support, and

management headquarters activities show a net increase of over $2 billion.

Similar Air Force accounts show a net increase in these functions of about

$2 billion.

Procurement The 1995 FYDP contained undistributed future adjustments of about

$20 billion. Because of the magnitude of the decrease in the procurement

account from the 1995 to the 1996 FYDP, it is evident that most of these

adjustments were taken from the procurement account. As table 4 shows,

the procurement account decreased by almost $27 billion for the common

years in the 1995 and 1996 FYDPs.

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Table 4: Comparison of the Procurement Account in the 1995 and 1996 FYDPs

(dollars in billions)

Procurement 1995 1996 1997 1998 1999 2000 2001 Total

1995 FYDP $43.3 $48.4 $49.8 $57.1 $60.1

1996 FYDP 39.4 43.5 51.4 54.2 $62.3 $67.3

Decrease 1996-99 ($9.0) ($6.3) ($5.7) ($5.9) ($26.9)

Note: Figures are expressed in total obligational authority.

Source: Fiscal years 1995 and 1996 FYDPs.

DOD decreased the procurement account in the 4 common years by

stretching out the planned buys for some systems to the year 2000 and

beyond and by reducing the total acquisition quantities for others. For

example, according to the 1995 FYDP, Defense planned to procure one

LPD-17 amphibious ship in 1996, two in 1998, and two in 1999. This

procurement schedule slipped in the 1996 FYDP to one ship in 1998, two in

2000, and two in 2001. Also, the F-22 procurement program was slipped 

1 year so that the 12 aircraft that were to be procured in 1999, according to

the 1995 FYDP, are now programmed to be procured in 2000. The total

planned procurement quantities were reduced for other programs,

including the F/A-18C/D fighter aircraft and the Navy’s Tomahawk missile.

Appendix I shows 14 of the more significant procurement program

deferrals or reductions relative to last year’s FYDP. The 14 programs

account for about $14.7 billion, or 54 percent, of the approximately

$27 billion in reductions to the procurement account.

The decrease in procurement dollars during the 4 common years of the

1995 and 1996 FYDPs comes on top of an already steep decline in

procurement that began in the mid-1980s. The 1996 procurement budget

request is $39.4 billion, which when adjusted for inflation, is a decline of

71 percent from fiscal year 1985. The implication of this trend is that future

years’ budgets will eventually have to accommodate a recapitalization of

equipment and weapon systems. DOD plans to reverse this trend and

increase its procurement budgets starting in fiscal year 1997.

Figure 1 shows the sharp decline in the procurement account from fiscal

years 1985 to 1996 and, as indicated by the dotted line, DOD’s proposed

increase from fiscal years 1997 through 2001.

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Figure 1: DOD Procurement Budget From 1980 to 2001 in Billions of Constant 1996 Dollars

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

20

40

60

80

100

120

140

160

Fiscal Year

FY 1985 = $135.7

FY 1980 = $63.4

FY 1996 = $39.4

FY 2001 = $58.0

Dollars

Actual data

Projected data

Note: Figures are expressed in budget authority.a

aBudget authority is the authority to incur legally binding obligations of the government that will

result in immediate or future outlays. Most Defense budget authority is provided by Congress in

the form of enacted appropriations.

Source: Fiscal year 1996 President’s budget deflated using DOD deflators.

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According to the Secretary of Defense, future modernization funds will

come from savings achieved through infrastructure reductions and

acquisition reforms and from larger future Defense budgets. Significant

spending increases are planned in the last 2 years of the 1996 FYDP.

Specifically, procurement funding estimates are 15 and 24 percent greater

in 2000 and 2001 compared with 1999.

Congressional action may result in increasing near-term funding for

defense, which could mitigate the need for DOD to increase out-year

budgets. The June 1995 Concurrent Resolution on the Budget for Fiscal

Year 1996 includes over $24 billion more for defense than the President’s

budget for fiscal years 1996-2001. The additional funds are expected, in

part, to lessen the need for DOD to reduce or defer weapon modernization

programs to meet other near-term readiness requirements. Assuming the

funds are appropriated, Congress will specify how defense is to spend

some of the added funds, but DOD may have an opportunity to restore

some programs that were reduced or deferred in the 1996 FYDP. The

Concurrent Resolution on the Budget is discussed further in a later

section.

Research, Development,

Test, and Evaluation

As table 5 shows, the research, development, test, and evaluation account

increased by $1.6 billion during the common years of the 1995 and 1996

FYDPs.

Table 5: Comparison of the Research, Development, Test, and Evaluation Account in the 1995 and 1996 FYDPs

(dollars in billions)

Research and

development 1995 1996 1997 1998 1999 2000 2001 Total

1995 FYDP $36.2 $34.8 $32.1 $30.9 $30.2

1996 FYDP 34.3 32.7 31.7 30.9 $30.2 $30.6

Increase/(decrease)

1996-99 ($0.5) $0.6 $0.8 $0.7 $1.6

Note: Figures are expressed in total obligational authority.

Source: Fiscal years 1995 and 1996 FYDPs

The budgeted amounts for many research and development programs

changed from the 1995 FYDP to the 1996 FYDP. Two programs that are

projected to receive some of the largest funding increases over the 1995-99

period are special classified programs, which increased by about 

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$1.8 billion, and the F-22 advanced fighter aircraft engineering and

manufacturing development, which increased by about $700 million. Two

programs that are budgeted substantially less are the defense reinvestment

program, which decreased by about $1 billion, and the Comanche

helicopter development program, which decreased by about $700 million.

Overall, the comparison of the 1995 and 1996 FYDPs for the common years

1996-99 shows that programs in the latter stages of development are

receiving increased funds, while those in the earlier stages of development

are receiving less funds. For example, programs in demonstration and

validation, engineering and manufacturing development, and operational

systems development increased by about $7.1 billion while programs in

basic research, exploratory development, and advanced development

decreased by about $5.4 billion. A large part of the shift was in ballistic

missile defense programs from earlier development to later stages of

development.

Military Construction As table 6 shows, the 1996 FYDP budgets less for military construction than

was planned in the 1995 FYDP.

Table 6: Comparison of the Military Construction Account in the 1995 and 1996 FYDPs

(dollars in billions)

Military construction 1995 1996 1997 1998 1999 2000 2001 Total

1995 FYDP $5.2 $7.9 $5.5 $4.7 $4.1

1996 FYDP 6.7 5.1 4.6 4.4 $3.8 $3.9

Increase/(decrease)

1996-99 ($1.2) ($0.4) ($0.1) $0.3 ($1.4)

Note: Figures are expressed in total obligational authority.

Source: Fiscal years 1995 and 1996 FYDPs.

The table shows that although the biggest reduction is projected to occur

in fiscal year 1996, the funds continue to decrease through 1998, increase

slightly in 1999, and drop below $4 billion in 2000 and 2001.

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Family Housing Table 7 shows that, over the common years of the 1995 and 1996 FYDPs, the

family housing account increases by about $2.5 billion.

Table 7: Comparison of the Family Housing Account in the 1995 and 1996 FYDPs

(dollars in billions)

Family housing 1995 1996 1997 1998 1999 2000 2001 Total

1995 FYDP $3.6 $3.6 $3.7 $3.6 $3.9

1996 FYDP 4.3 4.5 4.1 4.4 $4.5 $4.6

Increase 1996-99 $0.7 $0.8 $0.5 $0.5 $2.5

Note: Figures are expressed in total obligational authority.

Source: Fiscal years 1995 and 1996 FYDPs.

According to DOD, worldwide military housing is inadequate and needs to

be improved. Most of the funding increases in the 1996 FYDP are for

operation and maintenance, new construction, and improvements to DOD’s

family housing.

Infrastructure

Funding as a

Proportion of the

Defense Budget Is Not

Declining

DOD anticipates that the realignment and closure of unneeded military

bases and facilities resulting from the four rounds of closures since 1988

and force structure reductions will result in substantial savings. Our

analysis of the 1996 FYDP shows that savings that have accrued or are

expected to accrue from the base closings and force reductions appear to

have been offset by increased infrastructure funding requirements

primarily for base operations and management headquarters functions and

quality-of-life programs. Thus, the proportion of infrastructure funding in

the total defense budget in 2001 is expected to be about the same as it was

reported for fiscal year 1994 in DOD’s Bottom-Up Review report.

DOD stated in its Bottom-Up Review report that $160 billion, or

approximately 59 percent, of its total obligational authority for fiscal year

1994 was required to fund infrastructure activities. These activities include

logistics support, medical treatment and facilities, personnel costs,

including a wide range of dependent support programs, formal training,

and installation support such as base operations, acquisition management,

and force management. The Bottom-Up Review report noted that a key

defense objective was to reduce this infrastructure without harming

readiness. Figure 2 shows a breakdown of these infrastructure categories

for fiscal year 1994 as displayed in DOD’s report.

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Figure 2: $160 Billion of Infrastructure Funding in the Fiscal Year 1994 Defense Budget by Category

Acquisition Management 

Logistics

Force Management

Installation Support

Training

Personnel

Medical

40%

13%

17%

6% 8%

7%

9%

Source: DOD’s Bottom-Up Review report.

Using the infrastructure categories identified by DOD, we calculated the

amount of infrastructure funding for fiscal years 1995 through 2001. 

Table 8 shows that, on the basis of current program plans, infrastructure

funding (as a percentage of DOD’s total budget) stays relatively stable

through 2001 and shows no improvement over the 59-percent

infrastructure level DOD reported for fiscal year 1994.

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Table 8: DOD’s Projected

Infrastructure and Noninfrastructure

Funding Through Fiscal Year 2001

(dollars in billions)

Fiscal

year

Projected

budget

Infrastructure

funding

Noninfrastructure

funding

Percentage

infrastructure

funding

1995 $256 $158 $98 62

1996 247 156 91 63

1997 244 152 92 62

1998 251 152 99 61

1999 257 157 100 61

2000 267 161 106 60

2001 277 166 111 60

Note: Figures are expressed in total obligational authority.

Source: Our calculation from fiscal year 1996 FYDP.

According to DOD’s Bottom-Up Review report, approximately 40 percent of

infrastructure funding such as for training, supply, and transportation are

tied directly to force structure and would be expected to decline with

force structure reductions. Historically, savings resulting from force

structure reductions lag a few years behind. On the basis of this, and

because DOD’s planned drawdown of forces is essentially complete in fiscal

year 1996, the 1996 FYDP should begin to reflect some significant

infrastructure savings. However, FYDP estimates include the costs of new

requirements as well as anticipated savings. Our analysis indicates that

increases in personnel, operation and maintenance, research and

development, and family housing, which include increases in

infrastructure costs, appear to offset most planned infrastructure savings

through 2001. As a result, the 1996 FYDP does not show the decline in the

proportion of infrastructure funding that might be expected.

Fiscal Year 1996

Concurrent Budget

Resolution Proposes

Increased National

Defense Funding

The concurrent budget resolution approved by both the Senate and the

House in June 1995 anticipates $35.6 billion more funding for national

defense over the 1996-99 period than the President’s budget request.

However, as shown in table 9, the resolution would reduce the President’s

proposed budgets for 2000-2001 by a total of $11.4 billion. The net effect of

these adjustments is a $24.2-billion increase over the period. These

estimates include funding for DOD military, atomic energy defense

activities, and defense-related activities.

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Table 9: Comparison of Concurrent Budget Resolution With the President’s 1996 Budget for National Defense

(dollars in billions)

Budget 1996 1997 1998 1999 2000 2001a Total

President’s budget $257.8 $253.4 $259.6 $266.3 $276.0 $286.9 $1,600.0

Budget resolution 264.7 267.3 269.0 271.7 274.4 277.1 1,624.2

Increase/(decrease) $6.9 $13.9 $9.4 $5.4 ($1.6) ($9.8) $24.2

Note: Figures are expressed in budget authority.

aThe atomic energy defense activities portion of the budget was not available to us for fiscal 

year 2001. Therefore, we estimated that these activities would be funded at about $9.3 billion, the

average annual level projected for fiscal years 1998-2000.

Source: Concurrent Resolution on the Budget for Fiscal Year 1996 and the President’s Fiscal 

Year 1996 Budget.

According to the conference agreement on the budget resolution, most of

the increase for DOD in 1996 is assumed to be used for the procurement of

weapons and research and development activities. For the period 1997

through 2001, budget authority increases are assumed to be split equally

between procurement and operation and maintenance.

In providing additional defense funds, it is the intent of the conferees to

lessen the need for decisionmakers to sacrifice future readiness to meet

current readiness requirements. When the funds are appropriated,

Congress will undoubtedly specify how DOD is to spend some of the added

funds. For example, the House bill on the defense authorization act for

fiscal year 1996 would add programs such as the B-2 bomber, which DOD

did not request and for which DOD would have to find funding in the future.

Also, the Senate’s 1996 authorization bill would significantly increase DOD’s

proposed funding for a missile defense system. In addition, DOD may have

an opportunity to restore some of the programs that it reduced or deferred

to the year 2000 and beyond.

FYDP Submission Is

in Accordance With

Legislative

Requirements

Congress enacted legislation in 1987 requiring DOD to submit future years

program and budget information consistent with the President’s budget.

This enactment was in response to congressional concern that DOD’s FYDPs

were inconsistent with the President’s budget submissions because they

contained more programs than the President’s funding projections would

support. Last year, as a result of continuing program and budget

mismatches, Congress added the requirement that the Secretary of

Defense, after consultation with the DOD Inspector General, certify that the

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FYDP submission complies with section 221, title 10 of the United States

Code. Section 221 of title 10 states

The Secretary of Defense shall submit to Congress each year, at or about the time that the

President’s budget is submitted . . . a future-years defense program . . . reflecting the

estimated expenditures and proposed appropriations included in that budget.

The provision requires that program and budget information submitted to

Congress by DOD be consistent with the President’s budget.

The President’s fiscal year 1996 budget was submitted to Congress on

February 6, 1995. The 1996 FYDP was submitted to Congress on March 29,

1995, and was accompanied by a written certification by the Secretary of

Defense that the FYDP and associated annexes satisfied the requirements of

section 221 of title 10, United States Code. This certification was made

after consultation with the DOD Inspector General. On the basis of our

review, we consider the FYDP estimates to be consistent with the

President’s budget submission. Therefore, in our opinion, the fiscal 

year 1996 FYDP was submitted in compliance with all applicable legislative

requirements.

Agency Comments

and Our Evaluation

In commenting on this report, DOD stated that we had fairly and accurately

assessed the funding adjustments it made to balance the program plans for

fiscal years 1996-2001. DOD also stated that the report correctly identified

the fiscal implications of funding priorities and strategies that guided the

preparation of the 1996-2001 program.

We reported that infrastructure funding, as a proportion of the defense

budget, is relatively constant from 1995 through 2001. DOD agreed and said

that it would be incorrect to infer from this finding that the Department is

failing to achieve savings from a smaller infrastructure and applying them

to higher priority activities like readiness, quality-of-life, and procurement.

We agree with DOD in part. Our analysis shows that infrastructure savings

that have occurred have been applied toward new infrastructure

requirements, but not to weapons procurement or modernization in any

appreciable amounts.

DOD expressed concern that it may not be able to accelerate the

procurement of programs that are already in the defense program if

Congress directs that additional funding be used to acquire new programs

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with large out-year funding requirements. The full text of DOD’s comments

are included as appendix II.

Scope and

Methodology

To evaluate the major planning assumptions underlying DOD’s fiscal 

year 1996 FYDP, we interviewed officials in the Office of the DOD

Comptroller, the Office of Program Analysis and Evaluation, Office of

Environmental Security, Base Closure and Utilization Office, and the

Congressional Budget Office. We examined a variety of DOD planning and

budget documents, including the FYDP and associated annexes. We also

reviewed the President’s fiscal year 1996 budget submission; the fiscal

year 1996 concurrent budget resolution; our prior reports; and pertinent

reports by the Congressional Budget Office, the Congressional Research

Service, and others.

To calculate the amount of infrastructure funding for fiscal years 1995

through 2001 we used the infrastructure definitions and categories

provided by DOD. Results of our infrastructure analysis were provided to

cognizant DOD officials within the Office of Program Analysis and

Evaluation for validation and comment. Department officials stated the

analysis was correct on the basis of the definitions and categories

established in 1994. However, they also stated they were redefining some

infrastructure activities and categories that may change the results. DOD

would not provide us with the details supporting these new categories

during our review so we were unable to evaluate them.

To determine whether the FYDP submission complies with the law, we

compared its content with the requirements established in section 221 of

title 10 of the United States Code and section 1005 of the Defense

Authorization Act for fiscal year 1995. We also reviewed references to the

reporting requirement in various legislative reports to clarify

congressional intent. Our work was conducted from March to August 1995

in accordance with generally accepted government auditing standards.

We are providing copies of this report to appropriate House and Senate

Committees; the Secretaries of Defense, the Air Force, the Army, and the

Navy; and the Director, Office of Management and Budget. We will also

provide copies to other interested parties upon request.

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If you have any questions concerning this report, please call me on

(202) 512-3504. Major contributors to this report are listed in appendix III.

Richard Davis

Director, National Security

 Analysis

Page 17 GAO/NSIAD-95-213 Future Years Defense Program
Contents

Letter 1

Appendix I 

Selected Procurement

Program Deferrals or

Reductions for

1996-99 From the 1995

FYDP to the 1996

FYDP

20

Appendix II 

Comments From the

Department of

Defense

21

Appendix III 

Major Contributors to

This Report

23

Related GAO Products 24

Tables Table 1: Comparison of DOD’s 1995 and 1996 FYDPs by Primary

Appropriation Account

4

Table 2: Comparison of the Military Personnel Account in the

1995 and 1996 FYDPs

5

Table 3: Comparison of the Operation and Maintenance Account

in the 1995 and 1996 FYDPs

6

Table 4: Comparison of the Procurement Account in the 1995 and

1996 FYDPs

7

Table 5: Comparison of the Research, Development, Test, and

Evaluation Account in the 1995 and 1996 FYDPs

9

Table 6: Comparison of the Military Construction Account in the

1995 and 1996 FYDPs

10

Table 7: Comparison of the Family Housing Account in the 1995

and 1996 FYDPs

11

Page 18 GAO/NSIAD-95-213 Future Years Defense Program
Contents

Table 8: DOD’s Projected Infrastructure and Noninfrastructure

Funding Through Fiscal Year 2001

13

Table 9: Comparison of Concurrent Budget Resolution With the

President’s 1996 Budget for National Defense

14

Table I.1: Selected Procurement Program Deferrals or Reductions

for 1996-99 from the 1995 FYDP to the 1996 FYDP

20

Figures Figure 1: DOD Procurement Budget From 1980 to 2001 in Billions

of Constant 1996 Dollars

8

Figure 2: $160 Billion of Infrastructure Funding in the Fiscal Year

1994 Defense Budget by Category

12

Abbreviations

DOD Department of Defense

FYDP Future Years Defense Program

Page 19 GAO/NSIAD-95-213 Future Years Defense Program
Appendix I 

Selected Procurement Program Deferrals or

Reductions for 1996-99 From the 1995 FYDP

to the 1996 FYDP

Table I.1 shows 14 of the more significant procurement program changes

for 1996-99 from the 1995 FYDP to the 1996 FYDP. The 14 programs account

for about $14.7 billion, or 54 percent, of the approximately $27 billion in

reductions to the procurement account.

Table I.1: Selected Procurement Program Deferrals or Reductions for 1996-99 From the 1995 FYDP to the 1996 FYDP

(dollars in millions)

Procurement program

1995 FYDP

quantity

1996 FYDP

quantity

Deferred

or reduced

quantity

Deferred or

reduced cost

LPD-17 Amphibious Ship 5 1 4 $2,280

F-22 Fighter 20 8 12 2,134

F/A-18C/D Fighter 48 12 36 1,958

C-17/Strategic Airlifta 8 8 0 1,347

Family of Medium Tactical Vehicles 9,987 954 9,033 1,157

DDG-51 Destroyer 12 10 2 1,052

Joint Primary Aircraft Training Systemb 174 51 123 900

Space Boosters 3 2 1 876

F-14 Aircraft Modificationsc 0 0 0 671

Minute Man Missile Modificationsc 0 0 0 617

AMRAAM Missileb 2,520 1,774 746 572

Navy Tomahawk Missile 651 448 203 464

F-16C/D multi-year procurement funding 0 0 0 381

Sensor Fuzed Weapon 3,834 2,534 1300 288

Total $14,697

Note: Figures are in total obligational authority.

aAlthough DOD is to decide later this year whether to procure more than 40 C-17s or a

commercial alternative, it has reduced the amount of funds available for this procurement by

$1.3 billion over the 1996-99 period.

bJoint Air Force and Navy program.

cThe funds are to be used for the procurement of modification parts.

Source: Fiscal years 1995 and 1996 FYDPs.

Page 20 GAO/NSIAD-95-213 Future Years Defense Program
Appendix II 

Comments From the Department of Defense

Page 21 GAO/NSIAD-95-213 Future Years Defense Program
Appendix II 

Comments From the Department of Defense

Page 22 GAO/NSIAD-95-213 Future Years Defense Program
Appendix III 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Robert L. Pelletier, Assistant Director

William W. Crocker III, Evaluator-in-Charge

H. Donald Campbell, Evaluator

Kenneth A. Mann, Evaluator

Robert Clark, Evaluator

Edna T. Falk, Evaluator

Scott Hornung, Consultant

Mae F. Jones, Editor

Page 23 GAO/NSIAD-95-213 Future Years Defense Program
Related GAO Products

DOD Budget: Selected Categories of Planned Funding for Fiscal Years

1995-99 (GAO/NSIAD-95-92, Feb. 17, 1995).

Future Years Defense Program: Optimistic Estimates Lead to Billions in

Overprogramming (GAO/NSIAD-94-210, July 29, 1994).

DOD Budget: Future Years Defense Program Needs Details Based on

Comprehensive Review (GAO/NSIAD-93-250, Aug. 20, 1993).

Transition Series: National Security Issues (GAO/OCG-93-9TR, Dec. 1992).

High Risk Series: Defense Weapons Systems Acquisition (GAO/HR-93-7,

Dec. 1992).

Weapons Acquisition: Implementation of the 1991 DOD Full Funding Policy

(GAO/NSIAD-92-238, Sept. 24, 1992).

Defense Budget and Program Issues Facing the 102nd Congress

(GAO/T-NSIAD-91-21, Apr. 25, 1991).

DOD Budget: Observations on the Future Years Defense Program

(GAO/NSIAD-91-204, Apr. 25, 1991).

Department of Defense: Improving Management to Meet the Challenges of

the 1990s (GAO/T-NSIAD-90-57, July 25, 1990).

DOD Budget: Comparison of Updated Five-Year Plan With President’s

Budget (GAO/NSIAD-90-211BR, June 13, 1990).

DOD’s Budget Status: Fiscal Years 1990-94 Budget Reduction Decisions Still

Pending (GAO/NSIAD-90-125BR, Feb. 22, 1990).

Status of Defense Forces and Five Year Defense Planning and Funding

Implications (GAO/T-NSIAD-89-29, May 10, 1989).

Transition Series: Defense Issues (GAO/OCG-89-9TR, Nov. 1988).

Defense Budget and Program Issues: Fiscal Year 1989 Budget

(GAO/T-NSIAD-88-18, Mar. 14, 1988).

Underestimation of Funding Requirements in Five Year Procurement Plans

(GAO/NSIAD-84-88, Mar. 12, 1984).

(701062) Page 24 GAO/NSIAD-95-213 Future Years Defense Program
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