text: Background History of the CMO Position DOD first took steps to establish a CMO role in May 2007, when it designated the Deputy Secretary of Defense as the department’s CMO. Subsequently, Congress included a provision in the NDAA for Fiscal Year 2008 to codify the Deputy Secretary of Defense as the DOD CMO, establish a new position known as the Deputy Chief Management Officer (DCMO) to assist the Deputy Secretary, and name the Under Secretaries of the military departments as CMOs of their respective organizations. The military departments also established DCMO positions to assist the CMOs with overseeing their business operations. In addition, the NDAA for Fiscal Year 2009 required the secretary of each military department to establish an office of business transformation and develop business transformation plans, with measurable performance goals and objectives, to achieve an integrated management system for the business operations of each military department. Further, DOD’s guidance states that the DOD DCMO should coordinate with the military department CMOs to identify and exchange information necessary to facilitate the execution of the Deputy Secretary of Defense’s responsibilities in his role as the DOD CMO. In October 2008, DOD issued Department of Defense Directive 5105.82 to assign the authorities and responsibilities of the DCMO. Among other duties, the DCMO was responsible for recommending methodologies and measurement criteria to better synchronize, integrate, and coordinate the business operations of the department and advising the Secretary of Defense on performance goals and measures and assessing progress against those goals. For a full list of the DCMO authorities and responsibilities identified in DOD Directive 5105.82, see appendix II. CMO Statutory Authorities and Responsibilities In December 2016, Congress initially established the standalone CMO position to be effective on February 1, 2018 in section 901(c) of the NDAA for Fiscal Year 2017. In December 2017, Congress repealed and replaced this provision in the NDAA for Fiscal Year 2018 and later added additional responsibilities and functions in the John S. McCain NDAA for Fiscal Year 2019. Table 1 summarizes key CMO statutory authorities and responsibilities, and appendix II provides a more detailed comparison of these authorities and responsibilities. Key Strategies for Implementing CMO Positions In November 2007, we reported on key strategies for implementing CMO positions. We developed these strategies based on our work, in which we (1) gathered information on the experiences and views of officials at four organizations that rely on chief management officials and (2) convened a forum to gather insights from individuals with experience and expertise in business transformation, federal and private sector management, and change management. The forum brought together former and current government executives and officials from private business and nonprofit organizations to discuss when and how a CMO or similar position might effectively provide the continuing, focused attention essential for integrating key management functions and undertaking multiyear organizational transformations. Our work identified the following six key strategies: Define the specific roles and responsibilities of the CMO position. Ensure that the CMO has a high level of authority and clearly delineated reporting relationships. Foster good executive-level working relationships for maximum effectiveness. Establish integration and transformation structures and processes in addition to the CMO position. Promote individual accountability and performance through specific job qualifications and effective performance management. Provide for continuity of leadership in the CMO position. DOD Has Taken Some Steps to Implement the CMO Position, but Key Issues Related to Authorities and Responsibilities Remain Unresolved DOD Has Begun to Implement Its CMO Position and Restructure the OCMO, with a Focus on Data Responsibilities In February 2018, DOD formally established the position of the CMO and an office in support of the CMO (OCMO). In establishing the office, the Secretary of Defense stated that all resources and personnel (military, civilian, and contractor) assigned within the existing DCMO office were to transfer to the OCMO. Generally, the department has been focused on updating organizational structures and strengthening the OCMO’s data capabilities, as described below. DOD Has Not Resolved Three Key Issues Related to the CMO’s Authorities and Responsibilities Despite its efforts to establish and restructure the OCMO, DOD has not fully addressed three key issues related to the CMO’s statutory authorities and responsibilities, including: (1) how the CMO will exercise the authority to direct the military departments; (2) how the CMO will exercise oversight of the DAFAs; and (3) which responsibilities, if any, will transfer from the CIO to the CMO. Unresolved Issue #1: The CMO’s Authority to Direct the Military Departments on Business Reform Issues The Secretary of Defense has charged the CMO with leading DOD’s enterprise business operations and with unifying business management efforts across the department and other responsibilities as set forth in section 132a of title 10, United States Code. Moreover, the NDAA for Fiscal Year 2019 directed the Secretary of Defense, acting through the CMO, to reform DOD’s enterprise business operations across all organizations and elements of the department with respect to any activity relating to civilian resources management, logistics management, services contracting, or real estate management. Fulfilling these responsibilities depends, in part, on the CMO’s visibility into the business operations of all components of the department, including the military departments, as well as the ability to identify and execute DOD-wide business reforms, including those that may affect the military departments. Congress addressed the issue of the CMO’s relationship to the military departments in section 132a, which authorizes the CMO, subject to the authority, direction, and control of the Secretary of Defense and Deputy Secretary of Defense, to direct the secretaries of the military departments and the heads of all other elements of DOD on matters for which the CMO has responsibility under the statute. DOD leadership has provided some guidance regarding the CMO’s responsibilities for efforts that are department-wide and therefore involve the military departments. For example: In a May 2017 memorandum, the Deputy Secretary of Defense directed all DOD components to conduct a thorough review of business operations throughout the department and to propose initiatives that drive increased effectiveness in pursuit of greater efficiency. The memorandum identified the DCMO as the lead for this effort and tasked the DCMO with integrating all initiatives. All responsibilities and authorities assigned to the DCMO were transferred to the CMO on February 1, 2018. More recently, in May 2018, DOD issued its FY 2018-FY 2020 National Defense Business Operations Plan (Plan), which states that the CMO is personally responsible for overseeing implementation of business reforms. The Plan further establishes, and gives the CMO responsibility for carrying out, a strategic objective to improve and strengthen business operations through a move to DOD-enterprise or shared services and reduce administrative and regulatory burden. However, DOD leadership has not determined how the CMO will exercise this authority in instances where the military departments have concerns or disagree with decisions that the CMO makes. In our discussions with the Army, Navy, and Air Force’s CMO offices, officials from each military department explained that they frequently met with the CMO and were involved in discussing business operation initiatives with potential for implementation across multiple military departments. According to these officials, these discussions were collaborative and the CMO did not have to exercise his authority to direct the services. However, we found two instances in which the lack of a determination as to how the CMO is to direct the business-related activities of the military departments led to questions about the respective roles and authorities of the CMO and the military departments as they relate to business reform. In one case, officials from the military departments questioned the CMO’s authority to make binding decisions; in the other, the military departments sought to pursue reform activities without CMO involvement and oversight, even though the CMO has responsibility for leading DOD’s enterprise business reform efforts. First, officials told us that in a July 2018 meeting of the Reform Management Group (RMG) the CMO approved a decision to consolidate DOD’s contract writing systems into a single system. According to OCMO officials, the effort to move to a single contract writing system would increase data visibility, lessen or eliminate redundant contracting needs, provide for greater management insight, and increase the buying power of the department. However, officials told us the military departments, which had voiced concerns about moving to one consolidated system in a previous RMG meeting, expressed reservations. Specifically, a DOD official who participated in the RMG meetings told us the military departments cited a concern about loss of individual authorities and requirements, among other issues. Several DOD officials we spoke with described the RMG meeting as the first time the question of the CMO’s authority to make decisions for enterprise-wide business reform and to direct the military departments had been raised at an RMG meeting. According to officials who were present at the meeting, participants discussed whether the RMG is a voting body and what authority the CMO has to make unilateral decisions for the RMG. When we spoke with officials about this matter in January 2019, they said this question was still unresolved. Second, the Secretaries of the Army, Navy, and Air Force, in a December 10, 2018 memorandum to the Secretary of Defense, requested the Secretary direct the military departments to jointly review organizations, activities, processes, and procedures that might be reformed or restructured to enhance lethality and readiness or reduce cost. While the departments asked for support the Secretary deemed appropriate from the Joint Staff, the Office of the Secretary of Defense, and others, it did not request support or involvement from the CMO. Further, the memorandum stated that the military department secretaries envision a process where they would make recommendations directly to the Secretary. However, the memorandum made no mention of CMO involvement in the review, notwithstanding Congressional, Secretary of Defense, and Deputy Secretary of Defense direction that calls for the CMO to oversee DOD’s business reform efforts. Without a determination by the Secretary or Deputy Secretary of Defense about how the CMO is to direct the business-related activities of the military departments, the CMO’s ability to lead DOD’s reform of its enterprise business operations and to direct the military departments may be limited, potentially leading to fragmented business reform efforts. Unresolved Issue #2: The CMO’s Oversight Responsibilities for the Defense Agencies and DOD Field Activities (DAFA) DOD’s 19 defense agencies and eight DOD field activities are intended to perform many of DOD’s business operations, including consolidated supply and service functions such as human resources services, on a department-wide basis. We have previously identified numerous instances of fragmentation, overlap, and duplication and have recommended actions to increase coordination or consolidation to address related inefficiencies that affect the DAFAs. For example, in September 2018, we reported that there is fragmentation and overlap within the DAFAs that provide human resources services to other defense agencies or organizations within DOD. Our September 2018 report on the DAFAs also found that DOD does not comprehensively or routinely assess the continuing need for its DAFAs. GAO-18-592. DOD was statutorily required to periodically review the services and supplies each DAFA provides to ensure there is a continuing need for each, and that the provision of services and supplies by each DAFA, rather than by the military departments, is more effective, economical, or efficient (See 10 U.S.C. § 192 (c)). Since 2012, DOD has relied on existing processes, such as its annual budget process, to fulfill this review requirement. However, DOD did not provide sufficient evidence that these processes satisfy the statute. For example, while DOD reviews the DAFAs during the budget process, it does not specifically review the provision of services by the DAFAs rather than the military departments. that provide shared business services for the department, as designated by the Secretary or Deputy Secretary of Defense. In January 2018, the Deputy Secretary reported to Congress that the Secretary of Defense formally identified the Pentagon Force Protection Agency and Washington Headquarters Services (WHS) as the DAFAs that provide shared business services, and directed that they would fall under the authority, direction, and control of the CMO. However, both of these organizations had already been identified as providing shared business services and aligned under the previous DCMO. In addition, the Deputy Secretary’s January 2018 report to Congress did not explain why these two DAFAs, but not others, were designated as providing shared business services. In the January 2018 report to Congress, the Deputy Secretary of Defense also stated that, under his direction, the DCMO and Director of CAPE were leading defense reform work that would result in recommendations on, among other things, any required organizational changes. According to DOD’s report, such changes would include the designation of, and oversight arrangements for, other DAFAs providing shared business services that require CMO oversight. The recommendations were expected in late summer 2018. However, when we asked OCMO officials for a status update in November 2018, they acknowledged that they had not yet conducted the review. In November 2018, OCMO officials told us they had recently begun a review of the DAFAs but had not designated any additional DAFAs as providing shared business services. OCMO officials explained that the DAFAs were prioritized for review, with WHS being selected to be the first reviewed. The review will assess what role WHS performs and how efficiently it is performing that role, and will compare WHS performance to commercial benchmarks, according to OCMO officials. As of January 2019, officials said they expected to complete the review of WHS on February 16, 2019. According to officials, the next DAFAs to be reviewed will be DLA, the Defense Finance and Accounting Service, and the Defense Information Systems Agency. In addition, OCMO officials said that they plan to conduct a review of business functions performed in multiple DAFAs to identify opportunities to consolidate shared services for greater efficiency. For example, because WHS performs some human resource functions, as do certain other DAFAs, the OCMO is assessing how human resources management can be improved across the department. OCMO officials indicated they expect additional DAFAs to be identified as shared business services as a result of this review. Additionally, officials said they expect that the review will be completed in January 2020, but have not determined when or how the Secretary of Defense will designate additional DAFAs as providing shared business services. They have also not determined what those decisions would mean for the OCMO’s management of its responsibility to provide direct authority, control, and direction over those DAFAs. In section 921 of the John S. McCain NDAA for Fiscal Year 2019, Congress also expanded and codified the CMO’s authority over the DAFAs by requiring the Secretary of Defense, acting through the Under Secretary of Defense, Comptroller, to direct the head of each DAFA specified by the Secretary for the purpose of section 921, to transmit its proposed budget for enterprise business operations for a fiscal year to the CMO for review, beginning in fiscal year 2020. Section 921 further provides that the CMO shall submit a report to the Secretary containing the CMO’s comments and certification of whether each proposed budget achieves a required level of efficiency and effectiveness for enterprise business operations, consistent with guidance for budget review established by the CMO. Under section 921, the Secretary of Defense has discretion to determine which DAFAs’ proposed budgets are subject to CMO review. In November 2018, OCMO officials told us that the Secretary of Defense had not yet designated any DAFAs as required to submit their budgets for review. However, they stated that the OCMO is working with the DOD Comptroller to determine how the DAFA budget review will be conducted. They also said that they have hired consultants under an existing blanket purchase agreement contract to assist with developing a methodology for this review. OCMO officials told us they believed they would be ready to conduct the required review by fiscal year 2020, as required by the statute. However, it is unclear whether this review will result in a determination of which DAFAs are required to submit their proposed budgets for review. Until the Secretary of Defense makes a determination regarding the CMO’s relationship to the DAFAs, including whether additional DAFAs should be identified as providing shared business services and which DAFAs will be required to submit their proposed budgets for CMO review, the CMO’s ability to effectively oversee and streamline the DAFAs’ business operations may be limited. Unresolved Issue #3: The Transfer of Responsibilities from the Chief Information Officer to the CMO As described in table 1 of this report, section 910 of the NDAA for Fiscal Year 2018 provided that, effective January 1, 2019, the CMO would assume certain responsibilities for business systems and management that were formerly performed by the CIO. Section 903 of the John S. McCain NDAA for Fiscal Year 2019 clarified this provision by amending the statute (10 U.S.C. § 142) which established and provides responsibilities for the DOD CIO. However, in July 2018, DOD officials told us no formal action had been taken to determine which, if any, responsibilities would transition or to assess the resource impact this would have on both offices because they had concerns about the statutory requirement and how it would affect IT management at the department. For example, CMO officials expressed the belief that all IT roles and responsibilities should be consolidated under one position. We have previously found that having department-level CIO responsibilities performed by multiple officials could make the integration of various information and technology management areas, as envisioned by law, more difficult to achieve. The CMO told us in July 2018 that he had begun engaging informally with Congress to discuss the department’s concerns about the transition of certain responsibilities from the CIO to the CMO, and that he would engage further once the newly confirmed CIO felt prepared to join those discussions. However, in November 2018, the Acting CMO told us that the OCMO was still exploring all of the authorities that Congress had provided, and, as such, felt that further engagement with Congress was premature at this point. The Acting CMO added that she and the CIO had worked out an informal agreement regarding which areas they would each manage, but did not identify specific tasks that would transfer to the CMO or provide any details of this agreement. At the same time, OCMO officials acknowledged in November 2018 that the OCMO had not conducted an analysis to determine which responsibilities should formally transfer or what resource ramifications, if any, this transfer would have on both offices. Without an analysis to help DOD determine which duties should transfer from the CIO to the CMO, including identifying any associated resource impacts, DOD will remain reliant on this informal agreement. Such reliance could cause confusion within the department about who is responsible for key IT functions. Moreover, section 3506 of title 44, United States Code states that in similar circumstances, where a CIO is designated for DOD and for each military department, the respective duties of the CIOs shall be clearly delineated. DOD Lacks Guidance That Institutionalizes All of the CMO’s Authorities and Responsibilities In part because the issues identified above have not been resolved, DOD agreed that it does not have department-wide guidance, such as a chartering directive, that fully and clearly institutionalizes the CMO position by articulating how all of the CMO’s authorities and responsibilities are to be operationalized. The department has issued several documents that refer to some of the CMO’s authorities and responsibilities, but these documents were issued as the CMO’s role under the statute was evolving, and none of them, either individually or collectively, encompass all of the CMO’s current authorities and responsibilities. For example: DOD Directive 5105.82 (Oct. 17, 2008) established the responsibilities and authorities of the DCMO. These responsibilities included, among others, advising the Secretary of Defense on performance goals and measures and assessing progress against those goals; and ensuring that strategic plans, performance goals, and measures were aligned with, and assured accountability to, DOD strategic goals. However, this document is now outdated—for example, it assigns the DCMO responsibilities related to the Defense Business Transformation Agency, which an OCMO official agreed no longer exists. Moreover, the directive does not reflect the additional authorities and responsibilities for the CMO position that are delineated in section 132a of title 10, United States Code, as amended. Table 3 at appendix II summarizes all authorities and responsibilities included in this directive. Secretary of Defense Memorandum (Feb. 1, 2018) established the CMO position and outlined its authorities and responsibilities consistent with section 132a of title 10, United States Code. The authorities and responsibilities outlined in this memorandum align closely with those specified for the CMO in the statute, but the memorandum does not explain how these authorities and responsibilities are to be operationalized. For example, this memorandum does not address how the CMO will interact with other DOD organizations, such as the military departments, as DOD traditionally has done through its chartering directives. Table 4 at appendix II summarizes authorities and responsibilities included in Secretary of Defense memorandums. Secretary of Defense Memorandum (July 12, 2018) addressed the CMO’s role in supporting the Deputy Secretary of Defense on enterprise management and performance accountability. According to this memorandum, the CMO supports the Chief Operating Officer to ensure all DOD leaders are unified and aligned across all assigned responsibilities and functions, through strong management practices, integrated processes, and best value business investments, and to support the Deputy Secretary of Defense in his capacity as the department’s Chief Operating Officer. However, the CMO’s responsibilities in supporting the Deputy Secretary of Defense as the Chief Operating Officer outlined in this memorandum are not specified by any other relevant guidance documents. CMO Action Memorandum (July 27, 2018) responded to the Secretary’s February 1, 2018 memorandum and restated several of the CMO’s authorities and responsibilities, consistent with 132a of title 10, United States Code, and provided information on the plans to restructure the OCMO and to establish the CMO Action Group. The Secretary of Defense’s July 12, 2018 Memorandum directed the Deputy Secretary of Defense to provide amplifying guidance on CMO responsibilities and authorities emanating from statute as well as delegating additional discretionary authorities or responsibilities to the CMO. Issuance of this amplifying guidance would be consistent with one of the key strategies we identified for implementation of a CMO position— clearly defining roles and responsibilities of the position and communicating them throughout the organization. In November 2018, however, officials told us that they expected the CMO vacancy to delay progress on codifying any decisions on the CMO’s statutory and discretionary authorities in a chartering directive. Additionally, in November 2018, a senior OCMO official stated that the office needed to complete its reorganization prior to the department issuing updated guidance. Until the Deputy Secretary of Defense resolves the issues previously discussed and issues guidance (such as a chartering directive) to codify the CMO’s authorities and responsibilities and specify how those are to be operationalized, questions regarding the extent of the CMO’s authority and responsibility are likely to persist, preventing a shared understanding across the department of the CMO’s role. Further, the lack of guidance could affect the ability of the department to make progress in conducting necessary business reforms—one of three key priorities identified in the 2018 National Defense Strategy. Conclusion DOD has made progress in implementing some of the authorities and responsibilities Congress has provided the CMO. However, DOD has not resolved several key issues that limit its ability to implement all statutory authorities and responsibilities. Specifically, DOD has yet to resolve key issues, such as how the CMO will exercise authority to direct the military departments and exercise direction and control over DAFAs that provide shared business services. Additionally, without analyzing the authorities and responsibilities that will transfer from the CIO to the CMO and the resource impact, if any, those new responsibilities will have on the OCMO, DOD risks creating confusion within the department about which official is responsible for key information technology functions. While DOD has issued several documents delineating some of the CMO’s authorities and responsibilities, the department does not currently have formal and current guidance, such as a DOD chartering directive, that institutionalizes all the CMO’s authorities and responsibilities. Considering the evolution of the CMO’s authorities and responsibilities since the position was created, guidance that fully encompasses all CMO authorities and responsibilities and explains how they are to be operationalized could help to institutionalize and sustain the position beyond the tenure of the current acting CMO. Recommendations for Executive Action We are making the following four recommendations to the Secretary of Defense: The Secretary of Defense should ensure that the Deputy Secretary of Defense makes a determination as to how the CMO is to direct the business-related activities of the military departments. (Recommendation 1) The Secretary of Defense should ensure that the Deputy Secretary of Defense makes a determination regarding the CMO’s relationship with the DAFAs, including whether additional DAFAs should be identified as providing shared business services and which DAFAs will be required to submit their proposed budgets for enterprise business operations to the CMO for review. (Recommendation 2) The Secretary of Defense should ensure that the CMO and CIO conduct an analysis to determine which responsibilities should transfer from the CIO to the CMO, including identifying any associated resource impacts, and share the results of that analysis with the Congress. (Recommendation 3) The Secretary of Defense should ensure that the Deputy Secretary of Defense, on the basis of the determinations regarding the CMO’s statutory and discretionary authorities, codify those authorities and how they are to be operationalized in formal department-wide guidance. (Recommendation 4) Agency Comments and Our Evaluation We provided a draft of this report to DOD for review and comment. In its written comments, which are reproduced in Appendix III, DOD concurred with our recommendations and described ongoing and planned actions to address them. We are sending copies of this report to the Acting Secretary and Acting Deputy Secretary of Defense, the Acting DOD Chief Management Officer, the DOD Chief Information Officer, the Director, Cost Assessment and Program Evaluation, and appropriate congressional committees. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2775 or fielde1@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix IV. Appendix I: Scope and Methodology To examine the extent to which DOD has implemented the authorities and responsibilities of its Chief Management Officer (CMO) position and issued guidance communicating within the department the authorities and responsibilities of the position, we reviewed related laws and key documents such as memorandums issued by the Secretary of Defense that outline some of the CMO’s authorities and responsibilities. To understand the authorities and responsibilities that Congress and DOD have assigned to this position, we reviewed section 901 of the National Defense Authorization Act (NDAA) for Fiscal Year 2017, which initially created the CMO position effective February 1, 2018; section 910 of the NDAA for Fiscal Year 2018, which codified and expanded the CMO’s authorities and responsibilities; and section 921 of the John S. McCain NDAA for Fiscal Year 2019, which further expanded the CMO’s authorities and responsibilities. We reviewed DOD’s August 2017 Report to Congress and its April 2018 National Defense Business Operations Plan. We also reviewed our November 2007 report on key strategies for implementing CMO positions. To understand ongoing actions to implement the authorities and responsibilities given to the CMO position, we interviewed DOD’s former CMO, who served from February to November 2018, as well as the current acting CMO and the chiefs of the five directorates or their representatives within the Office of the CMO (OCMO) in July 2018, to understand the responsibilities of these directorates. We also met with the nine reform teams charged with implementing initiatives to, among other things, move DOD toward an enterprise-wide, shared-service model. Additionally, we reviewed documentation from the reform teams to understand what business operation reform initiatives the CMO has prioritized and what progress has been made to implement and monitor these initiatives. To understand key initiatives DOD is pursuing to improve its business operations and how it monitors implementation of those initiatives, we attended demonstrations of DOD’s cost management framework and its reform team portal. We also met with an official from DOD’s Cost Assessment and Program Evaluation (CAPE) Office to gain additional insights on oversight of the reform teams from one of the co- chairs on the Reform Management Group. Additionally, we reviewed documentation from the OCMO containing personnel numbers and funding levels to determine the level and type of resources available to the CMO to assist in carrying out his responsibilities. To understand how the CMO collaborates with other DOD entities to lead business operation reform and how the responsibilities of the CMO and Chief Information Officer (CIO) may change, we met with officials from the Office of the DOD CIO. To understand how the CMO is interacting with and influencing the military departments’ business operations, we met with officials from the Army, Air Force, and Navy CMO and CIO offices. We performed our work under the authority of the Comptroller General to conduct evaluations to assist Congress with its oversight responsibilities. We conducted this performance audit from February 2018 to March 2019 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. Appendix II: Summary of Key Authorities and Responsibilities for the Department of Defense Chief Management Officer Appendix III: Comments from the Department of Defense Appendix IV: GAO Contact and Staff Acknowledgments GAO Contact Elizabeth A. Field, (202) 512-2775 or fielde1@gao.gov. Staff Acknowledgments In addition to the contact named above, Sally Newman (Assistant Director), Tracy Barnes, Margaret Best, Arkelga Braxton, William Carpluk, Timothy DiNapoli, Michael Holland, Chad Johnson, Kristi Karls, William Lamping, Ned Malone, Jared Sippel, Susan Tindall, Sarah Veale, and Lillian Yob made key contributions to this report.
target: DOD spends billions of dollars each year to maintain key enterprise business operations intended to support the warfighter, including systems and processes related to the management of contracts, finances, the supply chain, and support infrastructure. The 2018 National Defense Strategy identified reform of DOD's business practices as one of DOD's three strategic goals. GAO has previously reported that weaknesses in these business operations have resulted in inefficiencies and billions of dollars wasted. GAO has also identified the need for a CMO with significant authority and experience to focus concerted attention on DOD's long-term business transformation efforts. Congress initially established such a position in the National Defense Authorization Act for Fiscal Year 2017. This report evaluates the extent to which DOD has implemented its CMO position and issued guidance to communicate within the department the authorities and responsibilities of the position. GAO analyzed the statutory authorities and responsibilities assigned to the CMO position and evaluated DOD's actions to implement them. The Department of Defense (DOD) has taken steps to implement its Chief Management Officer (CMO) position which has been given the responsibility for managing DOD's business operations; however, unresolved issues remain for DOD to fully institutionalize the CMO's authorities and responsibilities. DOD has restructured the Office of the CMO (OCMO) to more closely align with the CMO's statutory authorities and responsibilities. Further, the OCMO is working to strengthen its data capabilities and has hired a Chief Data Officer and formed a Data Management and Analytics Steering Committee. Additionally, OCMO officials told us they are establishing cost baselines for each of DOD's major business functions. However, DOD has not fully addressed three key issues related to the CMO's authorities and responsibilities: The CMO's authority to direct the military departments on business reform issues . The law gave the CMO authority to direct the secretaries of the military departments on matters over which the CMO has responsibility. However, DOD has not determined how the CMO will exercise this authority, particularly when there is disagreement between the departments and the CMO. The CMO's oversight responsibilities of the Defense Agencies and DOD Field Activities (DAFAs) . The CMO is responsible for exercising authority, direction, and control over the designated DAFAs that provide shared business services—those business functions, such as supply chain and logistics and human resources operations, that are provided across more than one DOD organization. However, DOD has not determined how the CMO will exercise this authority, such as which DAFAs will submit their proposed budgets for CMO review. Transfer of responsibilities from the Chief Information Officer to the CMO. Under the law, the CMO will exercise responsibilities relating to business systems and management that previously belonged to the Chief Information Officer. However, DOD has not determined which, if any, responsibilities will transition from the Chief Information Officer to the CMO or assessed the impact of such a transition on associated resources. In part because these issues remain unresolved, DOD agreed that it does not have department-wide guidance that fully and clearly articulates how the CMO's authorities and responsibilities should be operationalized. Making determinations on the three unresolved issues and issuing guidance would help ensure a shared understanding throughout the department of the CMO's role in leading DOD's enterprise-wide business reform efforts.