Department of Defense: Actions Needed to Address Five Key Mission Challenges
Published: 2017-06-13T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The United States faces a complex national security environment, to include strategic challenges presented by traditional state actors and destabilizing nonstate actors, such as the Islamic State of Iraq and Syria. Recognizing these challenges, DOD has emphasized the importance of providing forces that are capable of performing a full range of missions. GAO has issued hundreds of reports that bring greater attention to areas where DOD can strengthen its operations to more efficiently and effectively meet its mission.
This report identifies (1) key challenges affecting DOD's ability to accomplish its mission, progress made on these challenges, and work remaining; and (2) factors that have affected DOD's ability to address these key challenges. This report builds on GAO's past work with an emphasis on reports issued since 2011. GAO also analyzed DOD information on recent actions taken in response to GAO's prior work.
section_title: What GAO Found
paragraphs: The Department of Defense (DOD) faces five key challenges that significantly affect the department's ability to accomplish its mission. These include the need to (1) rebalance forces and rebuild readiness; (2) mitigate threats to cyberspace and expand cyber capabilities; (3) control the escalating costs of programs, such as certain weapon systems acquisitions and military health care, and better manage its finances; (4) strategically manage its human capital; and (5) achieve greater efficiencies in defense business operations. DOD has demonstrated progress addressing challenges, but significant work remains. Specifically:
Rebalance forces and rebuild readiness : The military services today are generally smaller and less combat ready than they have been in many years, and each military service has been forced to cut critical needs in areas such as training, maintenance, and modernization due to budgetary constraints, according to DOD. Officials said that the result of the current state of readiness is that military forces are not strong enough to protect vital U.S. national security interests from worldwide threats. DOD has pursued plans to strengthen military capabilities, but must take key actions to rebalance, rebuild, and modernize the capabilities of U.S. military forces. For example, DOD needs to take further steps to meet the demands of geographic commanders and examine whether there are opportunities to reduce the high demand on special operations forces. DOD also needs to provide decision makers with complete and accurate budget and cost information to make well-informed decisions on weapon systems modernization investments and mitigate potential risks to certain modernization initiatives, including regarding the F-35 aircraft—a program on which DOD plans to spend over $1 trillion to operate and sustain over its life cycle. The military services have plans underway to rebuild readiness for portions of their military forces, but these initiatives are at risk without more comprehensive planning and an approach to measure progress in attaining goals (see table). Since 2011, GAO has directed 39 recommendations to DOD in this area, of which 35 remain open, including 5 priority recommendations.
Mitigate threats to cyberspace and expand cyber capabilities : In February 2016, the Director of National Intelligence identified cyber threats as first among strategic threats to the United States, surpassing terrorism. According to the 2016 Federal Information Security Management Act report, more than 30,000 data security incidents compromised federal information systems during fiscal year 2016, 16 of which were categorized as major incidents. DOD has become increasingly reliant on the Internet and other networks, which are central to its military operations and enable essential services. At the same time, the vulnerability of its cyber networks has grown significantly, due in part to the increase in the severity of cyber attacks. DOD has made progress in developing a cyber strategy to defend its networks and protect the nation from cyber attacks, but needs to take additional actions to improve its planning for the continuity of operations in a degraded cyber environment, such as providing defense organizations with guidance and training to practice responses during exercises. DOD also needs to take further action to strengthen its insider threat awareness program to address the increased risk of the unauthorized disclosure of classified information from defense information systems and to improve the visibility and oversight of the cyber capabilities of all National Guard units, such as computer network defense teams that could be used during a cyber incident. Since 2011, GAO has directed 33 recommendations to DOD in unclassified and sensitive but unclassified reports, of which 14 remain open, including 5 priority recommendations.
Control escalating costs and manage finances : DOD's $580 billion fiscal year 2016 budget accounts for nearly half of the federal government's discretionary spending, and DOD's costs are growing. DOD plans to invest $574 billion to develop and acquire 78 major acquisition programs through fielding, such as the F-35 and the Littoral Combat Ship, while annual military health care costs are expected to increase from about $60 billion in fiscal year 2017 to about $70 billion by fiscal year 2028. Further, DOD remains one of the few federal entities that cannot demonstrate an ability to accurately account for and reliably report its spending or assets. DOD has undertaken a series of reform initiatives to control costs and improve its financial management, but needs to more consistently implement leading acquisition practices to manage the costs of its weapon systems. DOD also needs to better address improper payments to control rising costs in the military health system, which has experienced a 217 percent increase in costs since 2001 (see fig.). Further, DOD should take steps to identify underutilized space in its facilities to reduce its reliance on costly leased facilities. Finally, DOD needs to remediate financial management deficiencies, which prevent it from producing auditable financial statements and result in inadequate financial and other information available to DOD to manage its operations. Since 2011, GAO has directed 79 recommendations to DOD in this area, of which 72 remain open, including 52 priority recommendations.
Strategically manage human capital : DOD estimates that it will spend nearly $180 billion in fiscal year 2017 on pay and benefits for its military personnel and about $70 billion for its civilian employees. Taken together, funding for military and civilian pay and benefits represents nearly 50 percent of DOD's budget in fiscal year 2016 (see fig.). DOD also estimates that it spent about $115 billion on certain contractor-provided services in fiscal year 2015, although we have raised questions regarding the reliability of DOD's information on its contractor workforce. Current budget and long-term fiscal pressures on the department increase the importance of strategically managing DOD's human capital. DOD has taken steps to develop better information about the skill sets possessed and needed within the department's military, civilian, and contractor workforces, but needs to take further actions to complete a workforce mix assessment, improve the methodology for estimating workforce costs, and address skill gaps in critical workforces. DOD should also establish a comprehensive compensation strategy for its military personnel to help achieve its recruiting and retention goals, including a cost-effective approach for managing the $3.4 billion the department spent in fiscal year 2015 on special and incentive pays for active-duty service members. Since 2011, GAO has directed 67 recommendations to DOD in this area, of which 64 remain open.
Achieve greater efficiencies in defense business operations : DOD spends billions of dollars each year acquiring business systems and contractor-provided services to support the warfighter. In 2014 alone, DOD obligated $85 billion on three types of contractor-provided services—including an amount obligated for knowledge-based and research and development services that was more than double what the department spent to purchase aircraft, land vehicles, and ships. DOD has emphasized the need to improve its business practices and reduce overhead and free up resources for higher priorities, but needs to take additional actions to drive business transformation efforts, implement management controls for its business systems investments, and develop guidance to manage the acquisition of contracted services. DOD also needs to improve the reliability of its data to enable it to properly size its headquarters organizations, which have experienced significant growth; to accomplish missions; and identify potential cost savings. Since 2011, GAO has directed 49 recommendations to DOD in this area, of which 38 remain open, including 8 priority recommendations.
GAO's prior work identified four cross-cutting factors that have affected DOD's ability to address the department's key challenges. Specifically:
Lack of sustained leadership involvement: More than 9 years after Congress designated the Deputy Secretary of Defense as the Chief Management Officer and created the Deputy Chief Management Officer position to provide leadership over the department's business functions, all of DOD's business areas remain on our High-Risk List—areas that are vulnerable to waste, fraud, or mismanagement (see fig.). In December 2016, Congress established a separate Chief Management Officer position from the Deputy Secretary of Defense and replaced the Under Secretary of Defense for Acquisition, Technology, and Logistics with two new Under Secretary positions to further address DOD's leadership challenges. These new positions provide an opportunity to enhance DOD's leadership focus on DOD's key challenges, but DOD will need to clearly define the key responsibilities and authorities for these positions to help ensure that they can effectively drive transformation efforts.
Misalignment between programs and resources and budgets: The federal government faces an unsustainable long-term fiscal path, and the Congress and the new administration will need to consider difficult policy choices in the short term regarding federal spending. However, since 2005, GAO has reported that DOD's approach to planning and budgeting often results in a mismatch between the department's programs and available resources. As a result, DOD faces significant affordability challenges for some of its major acquisition programs that have unsustainable cost estimates and that will vie for significant funding commitments.
Ineffective strategic planning and performance monitoring: GAO has reported since 2005 on strategic planning and performance monitoring challenges that have affected the efficiency and effectiveness of DOD's operations, both at the strategic readiness level and across all of DOD's major business areas–including contract management, financial management, and supply chain management. DOD has missed opportunities to hold officials accountable for progress made toward meeting goals and milestones, make timely and well-informed actions to address identified challenges, and encourage continuous improvements in performance across its major business functions.
Ineffective management control system: DOD has not addressed long-standing challenges in implementing an effective management control system to improve accountability and effectively and efficiently achieve its mission. DOD does not have quality information on costs related to mission critical programs, such as weapon systems, and the department is unable to effectively assess the affordability of the programs that support them. Since 2005, GAO has reported on internal control deficiencies with DOD's financial management that have contributed to inconsistent and sometimes unreliable reports to Congress on weapon system operating and support costs, among other areas. This inconsistent and unreliable reporting limits the visibility that Congress needs to effectively oversee defense programs, and impairs its ability to make cost-effective choices.
section_title: What GAO Recommends
paragraphs: GAO has made approximately 3,100 recommendations to DOD since 2006. Of these, about 1,037 remain open, including 78 priority recommendations that, if implemented, could significantly improve DOD's operations. In commenting on this report, DOD stated that although the report made no new recommendations, the department stands by its responses and concurrence to taking the requisite actions needed to address all previous recommendations.

section_title: Letter
paragraphs: The United States faces a complex and uncertain national security  environment to include threats presented by traditional state actors, as  well as destabilizing actions by nonstate actors such as al-Qaida and the  Islamic State of Iraq and Syria. Since 2001, the Department of Defense  (DOD) has been heavily engaged in the Middle East and Afghanistan  conducting counter terrorism operations and building the capacity of  partner nation security forces. DOD is simultaneously facing other  strategic challenges, such as countering Russian and Iranian aggression  and protecting our allies and partners in these regions, remaining ready  on the Korean peninsula in the face of North Korea’s provocations,  maintaining regional stability in the Asia-Pacific region amid tensions in  the South China Sea, conducting a global campaign against terrorists and  other violent extremist organizations, and protecting the department’s  mission-critical networks from cyber attacks.  Recognizing these  challenges, DOD has emphasized the importance of providing agile,  flexible, and operationally ready forces that are capable of performing a  full range of potential missions, and implementing defense institutional  reforms to more efficiently and effectively manage its operations and free  up resources for higher priorities.
The national security environment is further complicated by a myriad of  other influences that pose potential obstacles to DOD’s ability to  effectively and efficiently conduct its operations. For instance, our  January 2017 report on the nation’s fiscal health outlined the current fiscal  condition of the federal government and its future fiscal path, and  demonstrated that the federal government is highly leveraged in debt by  historical norms and is on an unsustainable long-term fiscal path caused  by a structural imbalance between revenue and spending.  We concluded  that addressing this imbalance would require significant changes in fiscal  policy that will place budgetary strains on the federal government,  including DOD, which accounts for approximately half of the federal  government’s discretionary spending.  DOD has also faced budget  uncertainty—including across-the-board spending reductions in fiscal  year 2013, known as sequestration, and a federal government shutdown  in October 2013, and will have to adapt to potentially shifting priorities  from the new administration and Congress.  DOD has stated that it  cannot implement the national defense strategy under the budget caps  set by the Budget Control Act of 2011.  Within this fiscal environment, the  President is proposing a $54 billion increase to DOD’s budget for fiscal  year 2018. Even if this increase is approved, however, DOD will still face  significant affordability challenges as it works to rebuild the readiness of  its forces while simultaneously modernizing to meet future threats.
Further, DOD has remained engaged with the North Atlantic Treaty  Organization (NATO) to make continued progress on shared interests  and to deter and defend against Russian aggression in Europe, and has  secured a NATO commitment to set concrete goals for defense spending  on specified alliance priorities. However, continuing fiscal problems in  some European countries may contribute to political instability, which may  affect DOD’s efforts to strengthen partnerships with NATO allies and  partners. Additionally, climate risks to environmental and economic  systems—including agriculture, infrastructure, ecosystems, and human  health—present a security challenge for DOD, such as the growing threat of increased natural disasters, refugee flows, and conflicts over basic  resources such as food and water.
As the largest agency in the federal government, DOD’s mission is to  provide the military forces needed to deter conflict, fight and win wars if  needed, and protect the security of the United States. The department is  supported by key business operations that are intended to help facilitate  its warfighting mission. These key business operations include numerous  systems and processes related to the management of contracts, finances,  the supply chain, support infrastructure, and weapon systems acquisition,  and are inextricably linked to the readiness and capabilities of the U.S.  military forces. We and others have highlighted key areas where DOD  can strengthen its operations. Since 1990, for example, we have  maintained a High-Risk List to call attention to agencies and program  areas that are vulnerable to fraud, waste, abuse, and mismanagement, or  are in need of broad-based transformation. Our High-Risk program has  served to identify and help resolve serious weaknesses in areas that  involve substantial resources and provide critical services to the public.  DOD currently bears responsibility in whole or in part, for half (17 of 34) of  the areas we have designated as high risk–7 of which DOD manages and  10 of which DOD shares management responsibilities with other federal  agencies.  Figure 1 shows when the 7 areas were added to the High-Risk  List and DOD’ status in addressing the five criteria for removal from the  list—leadership commitment, capacity, action plan, monitoring, and  demonstrated progress.  Some progress in addressing these high-risk  areas has been possible through concerted efforts of the Congress, DOD,  and Office of Management and Budget leadership, but significant work  remains.
We have issued hundreds of reports and made approximately 3,100  recommendations to DOD since 2006, which, if implemented, could  strengthen DOD’s accountability, programs, and services.  However,  DOD lags behind the rest of the government in implementing our  recommendations. In our 2016 Performance and Accountability Report,  we reported that on a government-wide basis, 77 percent of our  recommendations had been implemented.  In comparison, DOD  implemented about 69 percent of our recommendations since 2006, with  approximately 1,037 recommendations remaining open.  Further, since  August 2015 we have identified priority recommendations that we believe  could significantly improve DOD’s operations. DOD has made progress in  some areas and has addressed 14 of these priority recommendations, but  78 remain open. For example, the department has taken a series of  actions to better protect critical DOD information that is processed,  stored, or transits on an information system that is owned by, or operated  by or for, contractors, including those within the defense industrial base.  However, DOD has not addressed other priority recommendations,  including collecting reliable information on the costs associated with its  headquarters functions, which could facilitate the identification of  opportunities for consolidation or elimination of positions, as we  recommended in 2016. In appendix 1, we list examples of actions that  DOD needs to take to address our 78 open priority recommendations to  the department.
We are also statutorily mandated to identify and report annually to  Congress on federal programs, agencies, offices, and initiatives—either  within departments or government-wide—that have duplicative goals or  activities. These annual reports also identify additional opportunities to  achieve greater efficiencies and effectiveness by means of cost savings  and enhanced revenue collection. In our 2011 through 2017 annual  reports, we directed 168 recommended actions to DOD in areas such as  personnel and logistics, weapon systems, and health care, in response to  which DOD has taken some action that has resulted in cost savings and  other benefits. For example, consistent with our recommendation, the  Army did not introduce a new family of camouflage uniforms into its  inventory, resulting in a cost avoidance of about $4.2 billion over 5  years.  However, DOD has not taken actions in other areas that, if  addressed, would yield significant financial and other benefits. For  example, we reported that DOD could identify procurement inefficiencies  and opportunities to consolidate purchases for the over $1 billion it  spends annually leasing commercial satellite communication networks if it  enforced its current policy and conducted an analysis of its spending in  this area. DOD agreed, but has not fully addressed these  recommendations.
This report identifies key challenges affecting DOD’s ability to accomplish  the department’s mission, progress made, and work remaining to address  these challenges; and factors that have affected DOD’s ability to address  these key challenges. It also describes actions DOD has taken to  implement our recommendations most relevant to the key challenges and  identifies recommendations in these areas that we believe the department  should give high priority to addressing. We initiated work to prepare this  report under the Comptroller General’s authority to address issues of  broad interest to the Congress, with an emphasis on longer-range,  crosscutting, and transformational issues. This report builds on our past  work—97 percent of which is requested by the Congress or required by  law—to provide policy makers with a comprehensive compendium of  DOD’s challenges that require sustained leadership commitment and  attention.
To determine the key challenges and factors affecting DOD’s ability to  execute its mission, we collected and analyzed DOD strategy documents  that were issued between 2011 and 2016.  We analyzed the frequency  with which priorities and associated challenges appeared across the  strategy documents to determine the extent to which similar priorities and  associated challenges are identified within and across the documents.  Specifically, we identified the priorities and associated challenges DOD  described as essential to completing its mission. We then assessed the  frequency, depth, and context with which each priority and associated challenge we identified was cited in DOD documents. We also reviewed  our prior work issued within the past 5 years to determine the extent to  which GAO had previously identified similar priorities and challenges.  Further, we also drew on the collective knowledge of our subject matter  experts and compared our assessment of DOD’s priorities and challenges  with GAO’s institutional knowledge. We took further steps to corroborate  our analysis, to include incorporating feedback from DOD on the priorities  and challenges we identified, and reviewing the DOD Inspector General’s  list of management challenges for 2016.
We determined what progress, if any, DOD had made addressing the key  challenges by examining DOD’s strategies and senior leadership  statements. We compared this information with our previously issued  work as well as with related recommendations made within the past 5  years, including our high-risk; duplication, overlap, and fragmentation;  and key issues products. Specifically, we reviewed our prior work to  determine the extent to which DOD had implemented recommendations  we made related to our assessment of the identified priorities and  challenges. We further assessed the status of the priority  recommendations we made to DOD—recommendations that we believe  the department should give a high priority to addressing, based on the  subject matter knowledge of our staff. We also identified factors affecting  DOD’s ability to make additional progress in addressing the key  challenges by reviewing the causes of issues we identified in our relevant  work issued since 2011. Specifically, we reviewed our prior work going  back 5 years and determined factors affecting DOD’s progress in each  challenge area. We list this prior work in appendix II.
We conducted this performance audit from June 2016 to June 2017 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.
subsections: section_title: DOD Has Made Progress Addressing Key Challenges in Accomplishing Its Mission, but Significant Work Remains
paragraphs: DOD faces five key challenges that significantly affect the department’s  ability to accomplish its mission—specifically the need for DOD to (1)  rebalance forces and rebuild readiness in an evolving global security  environment; (2) mitigate threats in cyberspace and expand cyber  capabilities; (3) control the escalating costs of programs, such as certain  weapon systems acquisitions and military health care, and manage its  finances; (4) strategically manage its human capital; and (5) achieve  greater efficiencies in defense business operations. DOD has  demonstrated progress addressing each of these challenges, but  significant work remains.
subsections: section_title: Rebalance Forces and Rebuild Readiness in an Evolving Global Security Environment
paragraphs: The military services are generally smaller and less combat ready today  than they have been in many years, and each military service has been  forced to cut critical needs in areas such as training, maintenance, and  modernization due to budget constraints, according to DOD. Officials  said that the result of the current state of readiness is that military forces  are not strong enough to protect vital U.S. national security interests from  worldwide threats. After more than a decade combatting violent  extremists and conducting contingency operations in Afghanistan, Iraq,  and most recently Syria, DOD has prioritized the rebalancing of its forces  in recent budget requests to build and sustain the capabilities necessary  to prevail across a full range of potential contingencies. However, DOD  has acknowledged that unrelenting demands from geographic  commanders for particular types of forces are disrupting manning,  training, and equipping cycles. As a result, the military departments  remain hard pressed to sustain meeting high levels of operational  demands while concurrently rebuilding readiness. See table 1 for a  summary of readiness challenges faced by the military services.
DOD has sought to rebalance and rebuild the readiness of its forces while  also meeting emerging geopolitical challenges that threaten U.S. national  security interests and regional stability, such as Russian aggression in  Europe and North Korea’s provocative threats in the Asia-Pacific.  However, the demand for military forces has created significant gaps in  training and maintenance and reduced the margin of error in responding  to a shifting security environment. To execute the defense strategy, DOD  must balance the risks and costs of preparing for current conflicts and  traditional threats with the need to modernize its capabilities and adapt for  future ones. As DOD rebuilds and modernizes its forces, it must make  difficult affordability choices related to upgrading its aging equipment and  weapon systems, while simultaneously sustaining legacy systems and  force structure that are needed to meet current operational needs. Our  work has found that DOD must address several key challenges to  rebalance and modernize the capabilities of U.S. military forces, and  rebuild these forces to an even higher level of readiness.
DOD has taken some positive steps to rebalance and rebuild the  capabilities of its forces to provide a responsive and versatile military that  can meet global needs across the full spectrum of operations. For  example, DOD increased and maintained the size of its special  operations forces—who are specially organized, trained, and equipped to  conduct operations in hostile or politically sensitive environments—even  as the department reduced the size of conventional military forces. DOD  also invested resources to organize and train conventional military forces  to be ready to respond to intense and stressful combat operations in the  future, and also engage with and strengthen partner nation security forces  to meet current operational needs. DOD further pursued modernization  plans, including the “third offset strategy,” a set of initiatives aimed at  strengthening the military services’ competitive edge, maintaining DOD’s  capabilities, and offsetting the technological advances of U.S. foes. For  example, DOD and the Air Force have prioritized investing in the stealthy,  fifth-generation fighter capability by modernizing the F-22 and buying the  F-35 aircraft. DOD, along with the Department of Energy (DOE), is also  undertaking an extensive, multifaceted, and costly effort to sustain and  modernize the nation’s nuclear weapon stockpile, infrastructure, delivery  systems, and nuclear command and control systems that DOD and DOE  estimate will cost around $320 billion over the next decade.  DOD has  also stated that rebuilding readiness is the department’s top priority, and  the military services have plans underway to rebuild the readiness for  portions of their respective forces. DOD has made progress in these  areas, but substantial work remains for DOD in rebalancing its forces and  rebuilding readiness.
The following sections identify our assessment of remaining work,  including additional actions that DOD should take to make further  progress.
Rebalancing forces: DOD has not fully assessed whether opportunities  exist to meet the demands of its geographic commanders and minimize  the negative readiness impacts of operational deployments on certain  forces. For example, despite an increase in resources and a sustained  high deployment level for special operations forces, DOD has not taken  steps to examine whether additional opportunities exist to reduce the high  demand on these forces by sharing some of their responsibilities with  conventional forces. We reported in July 2015 that between fiscal years  2001 and 2014, the average number of special operations personnel  deployed increased by nearly 150 percent, and that DOD expected this  high pace of deployments to continue (see fig. 2). However, we reported  that DOD had not recently evaluated whether some activities conducted  by special operations forces could be conducted by conventional forces.  In 2003, DOD determined that there were opportunities to share the  burden between special operations and conventional forces, including for  certain counterdrug missions and foreign conventional force training. In  our July 2015 report, we found that special operations forces have  continued to perform some activities that could be conducted by  conventional forces, such as noncombatant evacuation missions.
We also identified areas where DOD and the military services have not  determined whether plans to rebalance the capabilities of U.S. military  forces will meet the needs of global commanders. For example, we  reported in September 2016 that the Air Force has not comprehensively  reassessed the assumptions underlying the annual training requirements  for its combat aircrews since 2012. We raised questions as to whether  the assumptions used by the Air Force about the total annual live-fly  sortie requirements by aircraft, the criteria for designating aircrews as  experienced or inexperienced, and the mix between live and simulator  training account for current and emerging training needs. In August 2015,  we also reported that while the Army and the Marine Corps have been  able to fill requests for advise and assist missions in Afghanistan (i.e.  missions intended to engage with and strengthen partner nation security  forces), their approaches affected the overall readiness levels of affected  units.  For example, we found that staffing advisor teams required  brigades to deploy a significant portion of their leadership and expertise  for the advisor mission resulting in a degradation of brigade readiness.  Recognizing that the advising team structure can negatively impact  readiness, the Army announced in February 2017 that it was creating  Security Force Assistance Brigades in fiscal year 2018 to minimize the  overall readiness impact to the service. However, it is unclear if this  initiative will provide combatant commanders with the capabilities needed  to accomplish their missions while minimizing the readiness impact on the  Army.
Weapon systems modernization: DOD expects to invest $951 billion  through fiscal year 2021 to help research, develop, test, evaluate and  procure modern technology and capabilities for the military, including  more than $14 billion annually over the next decade to procure the F-35  aircraft. DOD also plans to recapitalize the three legs of the nuclear  triad, among other modernization investments. Nuclear delivery  systems are aging, including the bombs and warheads they carry, and in  some cases are being deployed long beyond their intended service lives.  For example, the Minuteman III ballistic missile, which was first deployed  in 1970, is expected to stay in service through 2030 through successive  modernization efforts. However, DOD has not ensured that decision  makers have complete and accurate budget and cost information to make  well-informed decisions on investments in weapon system upgrades and  new technologies, or developed plans to address potential risks to certain  modernization initiatives. We reported in September 2014 that it is  unclear whether DOD’s operating and support cost estimates for the F-35  program, DOD’s most expensive weapon system, reflect the most likely  costs that the program will incur. With operating and support estimates  totaling around $1 trillion over a 56-year life cycle, we found that although  the estimates were comprehensive, weaknesses existed with respect to a  few of the assumptions, such as spare part replacement rates and depot  maintenance, and that the estimates did not include necessary analyses  that would make them reliable.
Furthermore, in April 2016 we reported that DOD had not developed  credible and accurate cost estimates associated with the F-35’s central  logistics system, the Autonomic Logistics Information System (ALIS).  ALIS, a complex system supporting operations, mission planning, supply  chain management, maintenance, and other processes, has estimated  costs of approximately $16.7 billion over its 56-year life cycle. However,  we found that the estimate is not fully credible and complete since DOD  has not performed uncertainty and sensitivity analyses as part of its cost- estimating process. Similarly, in December 2015 we reported that, when  reporting these costs to Congress, DOD had not thoroughly documented  the methodologies and comparative information for its nuclear  modernization cost estimates, such as the 22-percent increase in the  intercontinental ballistic missile estimate, a difference of approximately  $2.5 billion.
We also reported in August 2016 that DOD and the Air Force did not have  complete and quality information on the full implications of the divestment  of the A-10 aircraft, including gaps that could be created by divestment  and mitigation options.  DOD and the Air Force have prioritized investing  in the next generation of multirole fighter aircraft while placing a lower  priority on older, less capable aircraft such as the A-10, and the Air Force  plans to retire its legacy aircraft, such as the F-16, in the coming years  (see fig. 3). The Air Force is taking a number of steps to try to mitigate  any potential negative impacts from its proposed A-10 divestments, but it  has not established clear requirements for the missions the A-10  performs, and in the absence of these requirements has not fully  identified the capacity or capability gaps that could result from its  divestment. For example, experts convened by the Air Force in 2015  concluded that A-10 divestiture creates a capability gap since the Air  Force is losing a high-capacity and cost-efficient ability to kill armor,  moving, and close-proximity targets in poor weather conditions. We  therefore recommended that the Air Force develop quality information to  inform its decision before again proposing divestment. DOD’s fiscal year  2018 budget request appears to align with this recommendation. The  request fully funds the A-10 fleet and highlights this action as a key  component of DOD’s efforts to address “force structure holes.” The  request further notes that the Air Force is assessing a long-term strategy  for the A-10 fleet.
Rebuilding readiness: DOD has reported that the military services face  significant readiness challenges in protecting U.S. national security  interests. According to DOD, budget cuts have led to undermanned units,  diminished ammunition stockpiles, a broad lack of training, and  equipment and facilities that are out of date or not properly maintained.  As a result, the department faces persistently low readiness levels—with  some forces at historically low levels—and has identified readiness  rebuilding as a top priority. However, we reported in September 2016 that  the department’s readiness rebuilding efforts are at risk without a  comprehensive plan that includes critical planning elements, such as  comprehensive strategies and resource levels needed to achieve  identified goals, and an approach for measuring progress.  Specifically,  we found that the military services’ plans to address declines in readiness  and capacity across the force do not contain key strategic planning  elements, which would help position the military services to meet their  readiness goals and support their rebuilding efforts. In addition, although  DOD and the military services track readiness trends, the military services  have not consistently established metrics or developed a method to  evaluate progress in attaining readiness recovery goals.
We also reported in May 2016 that the Navy’s efforts to rebuild readiness  and achieve employability and sustainability goals for the Navy’s various  classes of ships were at risk.  To meet operational demands over the  past decade, the Navy has increased ship deployment lengths and has  reduced or deferred ship maintenance. These decisions have reduced the  predictability of ship deployments for sailors and for the ship repair  industrial base. They have also resulted in declining ship conditions  across the fleet and a worsening trend in overall ship readiness, and have  increased the amount of time that ships require to complete maintenance  in the shipyards. For example, we reported that the number of casualty  reports—incidents of degraded or out-of-service equipment—nearly  doubled for both U.S. homeported ships and overseas homeported ships  from January 2009 through July 2014 (see fig. 4). Increased  maintenance periods, in turn, compress the time during which ships are  available for training and operations, referred to as “employability.”
To address these issues, the Navy began implementing a revised  operational schedule in November 2014, which is intended to maximize  employability while preserving maintenance and training, and restore  operational and personnel tempos to acceptable levels. However, our  analysis of Navy data for fiscal years 2011 through 2014 shows that prior  to the implementation of the revised schedule, the majority of  maintenance availabilities completed by both the public and private  shipyards took more time than scheduled, thereby reducing the time  during which ships were available for training and operations. As of May  2015, only a small portion of the fleet had entered the revised  maintenance schedule, and as a result it is too early to assess its overall  effectiveness. However, the first three aircraft carriers to enter the revised  schedule have not completed maintenance tasks on time, a benchmark  that is crucial to meeting the Navy’s employability goals. Further, any  changes to assumptions the Navy made in formulating the revised  schedule, including those related to available funding levels, force  structure, or deployments, will further place achieving its goals at risk.
By determining the most appropriate forces and training to meet the  demands of its combatant commanders, ensuring policy makers have  information to make well-informed weapon system modernization  choices, and developing a comprehensive plan to rebuild readiness with  methods for evaluating outcomes, DOD and decision makers would be  better positioned to evaluate whether U.S. military forces have the  capacity and capabilities to prevail across a full range of potential  contingencies. Since 2011, we have directed 39 recommendations to  DOD in this area, of which 35 remain open, including 5 priority  recommendations. Table 2 highlights key actions DOD should take to  help address the challenges in rebalancing forces, modernizing weapon  systems, and rebuilding readiness in an evolving global security  environment.
section_title: Mitigate Threats in Cyberspace and Expand Cyber Capabilities
paragraphs: Cyber threats to U.S. national and economic security are increasing in  frequency, scale, sophistication, and severity of impact. A 2016 Federal  Information Security Management Act report noted that more than 30,000  data security incidents compromised federal information systems during  fiscal year 2016—16 of which were categorized as major incidents that  needed to be reported to Congress. In July 2015, a major cyber breach  was reported at the Office of Personnel Management, which affected at  least 21.5 million individuals and resulted in the release of personally  identifiable information on federal contractors and employees, including  those at DOD. Recognizing this strategic challenge, in February 2016  the Director of National Intelligence identified cyber threats as first among  strategic threats to the United States, surpassing terrorism.
DOD has become increasingly reliant on the Internet and other networks,  which are central to the department’s operations and enable essential  services including logistics, budgeting, personnel, and policymaking. We  have reported that the security of the federal government’s cyber systems  and data is vital to public confidence and to the nation’s safety, prosperity,  and well-being.  However, the vulnerability of DOD’s networks, along  with those across the federal government has grown, and hostile actors  have used cyberspace as an asymmetric capability to strike the U.S.  homeland and interests.
DOD has acknowledged the need to coordinate cyber efforts and clarify  roles and responsibilities for addressing domestic cyber incidents with the  Department of Homeland Security—which has primary responsibility for  the protection of critical cyber infrastructure within the United States—and  has prioritized investments to expand its current cyber capabilities. Our  work has found that DOD must address weaknesses in (1) its planning for  the continuity of operations in a degraded cyber environment, (2) the  protection of classified information and systems from insider threats, and  (3) the visibility and oversight of its capabilities that could be used during  a cyber incident.
DOD has made progress in developing cyber capabilities that are needed  to simultaneously defend its networks, systems, and information; protect  the nation from cyber attacks of significant consequence; and work with  other departments and branches of the federal government to address  cyber-related issues. In April 2015, DOD issued a cyber strategy to guide  the development of the department’s cyber forces and strengthen the  department’s cyber defense and deterrence posture. A central aim of  DOD’s cyber strategy is to set specific goals and objectives to guide the  development of the Cyber Mission Force and of DOD’s wider cyber  workforce to protect and defend U.S. national interests. DOD has also  taken steps to improve its ability to provide support for state and local civil  authorities to improve cybersecurity and contingency planning in  response to a hostile attack on cyber infrastructure. For example, from  2013 through 2015, DOD conducted or participated in nine exercises that  were designed to test cybersecurity policies for supporting civil authorities  or to test the response to simulated attacks on cyber infrastructure owned  by civil authorities. In addition, in response to our July 2015 report, DOD  issued a memorandum directing the services and other defense agencies  to develop plans identifying the goals, milestones, and resources needed  to identify, register, and implement cybersecurity controls on DOD facility  industrial control systems, which are computer-controlled systems that  monitor and operate utilities infrastructure.  DOD has made progress in  these areas, but substantial work remains for DOD to mitigate threats to  cybersecurity and expand its cyber capabilities.
We discuss below our assessment of remaining work, including additional  actions that DOD should take to make further progress.
Continuity of operations in a degraded cyber environment: DOD,  along with the rest of the federal government, needs to take additional  steps to protect its critical cyber capabilities and ensure continuity of  operations. In February 2017, we reported that federal agencies,  including DOD, have not fully developed and implemented complete  strategies, policies, plans, and procedures for responding to cyber  incidents and effectively overseeing response activities. Our work  assessing DOD’s cyber efforts found that DOD has not fully conducted  the planning needed to maintain continuity of operations in a degraded  cyber environment, which could affect DOD’s ability to perform essential  functions—such as combat operations and homeland defense. DOD has  stated that expenditures on cyber capabilities have begun to provide a  measurable return on investment and that the department is interdicting  more threats than ever before, but the department also acknowledges  that unauthorized intrusions of its networks still occur.
The evolving array of cyber threats, along with the continuing threat of  nuclear attacks and natural disasters, has underscored the need for DOD  to further strengthen its planning for continuity of operations and the  collection of relevant data to inform planning. Doing so would help ensure  that the department can continue to perform its mission-essential  functions even if its information systems and networks become  unavailable, infiltrated, or destroyed, which can occur due to natural  disasters (e.g., hurricanes), system or infrastructure failures, and by  intentional or unintentional human-caused incidents. Since April 2014, we  have been calling upon DOD to revise its guidance on continuity plans to  describe the priority of continuity planning for cyber events or to provide  additional guidance to DOD components on how to include accurate and  complete data on information systems and networks necessary to  perform mission-essential functions in continuity plans.  DOD also needs  to provide its components with tools—such as guidance, training, and  exercises—that both emphasize the need to conduct continuity exercises  in a degraded cyber environment and assist DOD components in  developing and practicing effective responses during continuity exercises.  We further reported that DOD had not evaluated its approach to assigning  tasks among its components that assures continuity of mission-essential  functions or evaluated the readiness of its components to respond to an  incident that degrades the cyber environment.
In July 2015, we reported that DOD does not have comprehensive and  accurate utility disruption data.  Specifically, DOD’s collection and  reporting of utility disruption data is not comprehensive and contains  inaccuracies because not all types and instances of utility disruptions  have been reported and because there are inaccuracies in reporting of  disruptions’ duration and cost. Further, according to officials, DOD  installations are not reporting all disruptions that meet the DOD criteria of  commercial utility service disruptions lasting 8 hours or longer. This is  likely due, in part, to military service guidance that differs from instructions  for DOD’s data collection template. As of March 2016, DOD has  implemented steps to improve its data collection and validation process,  but additional work remains.
Protect classified information and systems from insider threat: Since  2010, the United States has suffered grave damage to national security  and an increased risk to the lives of U.S. citizens due to the unauthorized  disclosures of classified information by individuals with authorized access  to defense information systems. In June 2015, we reported that DOD had  taken action to implement minimum standards established by the National  Insider Threat Task Force.  For example, the seven DOD components  we assessed had begun to provide insider threat awareness training to all  personnel with security clearances. However, DOD had not addressed all  tasks associated with the minimum standard; had not analyzed gaps or  incorporated risk assessments into the program; and had not consistently  incorporated all of the key elements associated with an insider threat  framework that we developed synthesizing information from a White  House report, an executive order, DOD guidance and reports, national  security systems guidance, and leading practices recommended by the  National Insider Threat Task Force (see fig. 5).
Visibility of cyber capabilities: We reported in September 2016 that  DOD may be limited in responding to a cyber attack in a timely manner  because it does not have visibility into all of its domestic capabilities that  could be used in the event of a cyber incident.  Specifically, DOD has  not maintained a database that would allow the department to fully and  quickly identify existing cyber capabilities of all National Guard cyber  units, as required by law.  We reported that National Guard Bureau  officials had identified two systems that the bureau traditionally uses to  identify National Guard capabilities—the Defense Readiness Reporting  System  and the Joint Information Exchange Environment —but  acknowledged that neither of these systems could be used to fully or  quickly identify National Guard cyber capabilities. We found examples of  three types of cyber capabilities in National Guard units—communications  directorates, computer network defense teams, and cyber units—that  DOD may be unaware of if requested to support civil authorities during a  cyber incident. This is because some National Guard capabilities were  established to support state and local governments and do not have a  federal mission and, therefore, would not be reported in the Defense  Readiness Reporting System. Further, the amount of time required to  query other systems may not be feasible during a cyber incident, which  could impede DOD from using the full range of its capabilities.
By improving the planning for cyber operations and the visibility and  oversight of department-wide cyber capabilities, DOD would be better  positioned to ensure that it maintains critical mission continuity;  safeguards classified information and systems; and quickly responds to a  cyber incident. Since 2011, we have directed 33 recommendations to  DOD in unclassified and sensitive but unclassified reports, of which 14  remain open, including 5 priority recommendations. Table 3 highlights key  actions DOD should take to help address challenges it faces in mitigating  threats to cyberspace and in expanding cyber capabilities.
section_title: Control Escalating Costs and Manage Finances
paragraphs: DOD’s $580 billion fiscal year 2016 budget accounts for nearly half of the  federal government’s discretionary spending, and DOD’s costs are  growing. For example, DOD plans to invest $574 billion in future funding  to develop and acquire major acquisition programs, and the department’s  annual military health care costs are expected to increase from about $60  billion in fiscal year 2017 to about $70 billion by fiscal year 2028. DOD  also maintains a substantial inventory of infrastructure, owning over 70  percent of the federal government’s physical assets, with a reported  replacement value of about $880 billion. Senior leaders have  acknowledged the need for the department to effectively manage the  resources entrusted to it. However, DOD is one of the few federal  agencies that cannot accurately account for and report its spending or  assets.
Like the rest of the federal government, DOD’s budget has been affected  by policies that are intended to correct the imbalance between spending  and revenue. For example, the Budget Control Act of 2011 imposed an  $800 billion reduction in planned spending for DOD from fiscal years 2012  through 2021. Given these constrained budgetary resources and DOD’s  recognition that there are opportunities to be more efficient in the  department’s operations, the department has undertaken a series of  reform initiatives to control costs for programs that make up a significant  portion of DOD’s budget and improve DOD’s financial management  operations. At the same time, DOD is pursuing new technologies and is  investing significant resources to develop and procure a portfolio of 78  major defense acquisition programs. However, DOD has experienced  cost and schedule overruns that expose its procurement budgets to  unnecessary risk.
In addition, DOD’s military health system must ensure access to quality  health care for service members and their families, but it has experienced  a more than two-fold increase in costs in fiscal years 2001 through 2017,  and DOD has likely underestimated its improper payments for health care  services.  Further, total military health system costs are expected to  increase from about $60 billion in fiscal year 2017 to a projected $70  billion annually by fiscal year 2028 (see fig. 6).
DOD also manages installations worldwide to support military readiness,  consisting of about 562,000 facilities, but has maintained excess  infrastructure relative to the department’s force structure needs.  DOD  has expressed a commitment to holding itself accountable for the funding  it receives and is taking actions to allow for an annual financial statement  audit, but it continues to remain one of the few federal entities that cannot  demonstrate an ability to accurately account for and reliably report on its  spending or assets. Our work has found that DOD must address these  and other weaknesses to control costs as it faces a period of constrained  budgetary resources and fiscal uncertainty.
Since 2010, DOD has implemented a series of Better Buying Power  initiatives that outline steps the department is taking across its weapon  system acquisition portfolio to reduce cost and schedule overruns and  achieve better capability and performance results for the warfighter.   These initiatives include setting and enforcing affordability constraints,  implementing “should cost” management to control contract costs, and  eliminating redundancies within portfolios, among others. In implementing  these initiatives, DOD has achieved better acquisition outcomes in some  programs, including collectively reducing the total cost estimate for 14  programs that began systems development during this period by over  $580 million since their first full estimates.
DOD has also taken steps to modernize the military health system and  control health care costs. After decades of incremental alterations to its  health care programs, DOD created the Defense Health Agency (DHA) in  2013 to provide administrative governance for a more cost-effective and  integrated military health system. DHA has implemented various  initiatives, such as consolidating shared medical services; eliminating  redundant processes; coordinating resources; and matching personnel,  infrastructure, and funding to missions and populations in demand. DOD  has also taken steps to control costs for its support infrastructure. For  example, DOD consolidated some of its base support services and  reported a net reduction of 7.7 million square feet of support infrastructure  in fiscal year 2013, which represented about 75 percent of the federal  government’s total reduction under a government-wide initiative.  DOD  also established financial improvement and audit readiness guidance,  implemented training programs to help build a skilled financial  management workforce, and developed corrective action plans to track  the remediation of audit issues. However, DOD continues to identify the  need for sufficient numbers of qualified and experienced personnel as a  challenge to achieving its goals of financial improvement and audit  readiness. DOD has made progress in these areas, but substantial work  remains for DOD to further control costs and manage its finances.
The following sections identify our assessment of remaining work,  including additional actions that DOD should take to make further  progress.
Weapon system acquisition: This portfolio of 78 major defense  acquisition programs will require roughly a quarter of DOD’s development  and procurement funding over the next 5 years. Currently, DOD’s total  investment in these major defense acquisition programs is estimated at  $1.5 trillion, of which $574 billion is for future funding. However, over the  past year, we reported that a majority of DOD’s 78 major programs (46  out of the 78 programs) had experienced a cost increase, as shown in  figure 7.
We have reported that DOD could achieve significant cost savings by  consistently employing acquisition best practices in its weapon systems  programs, such as early systems engineering, analyzing alternatives,  managing changes in system requirements, and applying prototyping  early in development testing.  While DOD has made progress in  decreasing the amount of cost growth realized in its portfolio of major  acquisition programs, it has not uniformly implemented acquisition best  practices and reforms across the portfolio, which has resulted in some  programs that realized significant cost growth and delays in delivering  needed capabilities.
We have also found that new acquisition programs started each year at  DOD fulfill only some of the best practices intended to achieve a level of  knowledge that would demonstrate that the program is capable of  meeting its performance requirements and cost and schedule  commitments. Specifically, in March 2017 we found that most of the  programs we assessed were not fully following a knowledge-based  acquisition approach.  Further, only one of the four programs that began  or planned to begin system development during the fiscal year 2016  assessment period demonstrated a total match between resources and  requirements (see fig. 8). The remaining 41 programs we reviewed  implemented knowledge-based leading practices to varying degrees.
We further reported that some programs have progressed through the  acquisition cycle without the appropriate levels of knowledge at key  junctions, which is of particular concern for programs that entered the  system development phase before satisfying knowledge-based best  practices. For example, DOD faces technical, design, and production  challenges for some of its large programs, such as the CVN 78 aircraft  carrier, which has experienced an almost 23-percent increase in program  costs since construction was authorized in fiscal year 2008—from $10.5  billion to $12.9 billion. In an effort to meet required installation dates  aboard the CVN 78, the Navy elected to produce some of these systems  prior to demonstrating their maturity, which introduces the risk of late and  costly design changes and rework. In addition, progress in constructing  the CVN 78 was overshadowed by inefficient out-of-sequence work,  driven largely by material shortfalls, engineering challenges, and delays in  developing and installing critical technology systems.
Military health care: Military health care costs constituted about 6  percent of DOD’s total budget in fiscal years 1994 and 2000, but have  grown considerably by about 217 percent in fiscal years 2000 and 2017.  As noted above, DOD created DHA in 2013 to create a more cost- effective and integrated military health system. DHA provides  administrative support for the services’ respective medical programs and  combines common “shared” services in certain areas to achieve cost  savings. However, DOD has not established key processes for monitoring  improper payments or fully implemented DHA reforms, which include  limited efforts to modernize the military health system and reduce health  care costs.
In February 2015, we reported that DOD has not developed a  comprehensive methodology to monitor improper payments to control  costs in the military health care plan (i.e., TRICARE). We reported that in  its fiscal year 2015 agency financial report, DOD reported spending about  $19.7 billion on the purchased care option of TRICARE, yet reported  improper payments of only about $158 million, an error rate of 0.8  percent, compared with Medicare’s error rate of 12 percent. This  considerable disparity raises questions about the accuracy of the  methodology for calculating TRICARE improper payments.  In our  February 2015 report, we found that TRICARE’s methodology for  estimating improper payments for fiscal year 2013 was less  comprehensive than the measurement methodology used to estimate  Medicare improper payments because TRICARE’s methodology does not  comprehensively capture errors that occur at the provider level or errors  that can only be identified through an examination of underlying medical  record documentation. As a result, for fiscal year 2013, there were  significant differences in the improper payment rate for TRICARE and  Medicare (see fig. 9).
With respect to DHA, we reported in September 2015 (nearly 2 years  after DHA’s creation) that DOD had not fully implemented key  processes—including developing personnel requirements, identifying cost  savings, and establishing performance measures—to monitor the  department’s implementation of DHA reforms.  More specifically, we  reported in 2013 that DOD had not developed DHA staffing requirements  to monitor the effect of possible personnel growth and the composition of  its workforce. In the absence of such requirements, the military services  questioned the accuracy of the estimated $46.5 million in annual  personnel savings on which DOD had, in part, based its decision to  establish DHA.  We further reported that DOD’s cost estimates for DHA  were unclear and missing key details. For example, although DOD had  developed a business case analysis approach to help achieve cost  savings and has applied this approach to eight of its ten shared service  areas, it has not developed these analyses for the remaining two areas of  shared services—(1) public health and (2) medical education and training.  We also reported that DOD did not have comprehensive performance  measures and quantifiable targets to assess progress in achieving DHA’s  cost-savings goals, and that opportunities existed to reduce health care  costs by millions of dollars by completing, implementing, and monitoring  comprehensive plans for each of its approved health care initiatives. For  example, in 2012, we reported that DOD had calculated that it would save  $300 million by meeting one of its health care initiative cost growth targets  related to clinical and business practices, such as purchased care  reimbursements.
Defense support infrastructure: DOD has not effectively and efficiently  managed its portfolio of facilities or controlled the costs of maintaining  excess support infrastructure relative to its force structure needs. DOD’s  most recent Base Realignment and Closure round occurred in 2005 and,  according to DOD officials, was the largest to date. DOD officials noted in  May 2017 some reasons for cost overruns associated with the 2005 Base  Realignment and Closure round, including, among others, higher costs for  military construction materials and efforts to align DOD's infrastructure  with military strategy. Our work on DOD’s implementation of the 2005  Base Realignment and Closure round identified weaknesses that  hampered DOD’s ability to execute its responsibilities related to the cost  and savings estimation process and efforts to measure performance.  In  addition, we reported that DOD had underestimated specific infrastructure  requirements in the model that it used to estimate expected costs and  savings from implementing closures and realignments under the Base  Realignment and Closure process.  Specifically, DOD did not fully  identify requirements for military construction, relocating military  personnel and equipment, and information technology when entering  these costs into its model, which resulted in inaccurate cost estimates.  We reported that the primary reason costs increased for the 2005 Base  Realignment and Closure round was higher-than-anticipated military  construction costs—an increase of 86 percent from $13.2 billion originally  estimated to $24.5 billion after implementation ended in 2011.
In addition, DOD can improve the accuracy and completeness of its  facilities utilization and leasing information to more effectively manage the  department’s portfolio of facilities and control the costs of maintaining  excess support infrastructure relative to its force structure needs.  In  February 2017 we reported that DOD had utilization data on about 97  percent of its facilities as of September 2015—the most recent data  available—increasing from 53 percent as of September 2013. However,  we reported that, of the facilities that have a utilization rating of 100, 24  percent had either no inspection date or had most recently been  inspected prior to September 30, 1999, which calls into question the  accuracy of these data. We also reported in March 2016 that DOD did  not always assess the use of available space resulting from planned force  reductions at its installations or systematically identified the availability of  underutilized space prior to entering into lease agreements.
Financial management: Long-standing internal control deficiencies have  adversely affected the economy, efficiency, and effectiveness of DOD’s  operations. The effects of DOD’s financial management problems extend  beyond financial reporting and negatively affect DOD’s ability to manage  the department and make sound decisions regarding its mission and  operations. Among other issues, DOD’s financial management problems  have contributed to (1) inconsistent and sometimes unreliable reports to  Congress on weapon system operating and support costs, limiting the  visibility that Congress needs to effectively oversee weapon system  programs and (2) an impaired ability to make cost-effective choices, such  as deciding whether to outsource specific activities or how to improve  efficiency through technology.
In January 2017, we reported that DOD’s financial management problems  have continued to significantly impede our ability to render an opinion on  the federal government’s consolidated financial statements and have  prevented DOD from producing auditable department-wide financial  statements. For example, DOD’s reported inventory, buildings, and  other property and equipment represent 75 percent of the federal  government’s reported physical assets as of September 30, 2016.  However, DOD cannot demonstrate that it accurately and completely  accounted for all of these assets, including their location and condition.  DOD also reported fiscal year 2015 procurement obligations that  represent over 60 percent of the federal government’s equity. However,  DOD lacks effective systems, processes, and controls related to its  procurement activity, including contract pay.
We also identified several long-standing and interrelated deficiencies that  have hindered DOD’s financial management activities.  For example,  DOD leadership has not assured that DOD’s components adhere to audit  readiness plans and guidance. As a result, components lack the  necessary leadership, processes, systems, and controls to improve  financial management operations and audit readiness. DOD also has not  assured that the military services enhance their policies and procedures  for developing audit corrective action plans and improve processes for  identifying, tracking, and remediating financial management-related audit  findings and recommendations. We further reported that DOD needs to  continue to (1) develop and deploy enterprise resource planning systems  as a critical component of it financial improvement and audit readiness  strategy and (2) design manual work-arounds for older systems to satisfy  audit requirements and improve data used for day-to-day decision  making.  We also reported in February 2017 that all three of the  independent public accountants (IPA) contracted to audit the fiscal year  2015 Schedules of Budgetary Activity (Budgetary Schedule) of the Army,  the Air Force, and the Navy issued disclaimers, meaning that the IPAs  were unable to complete their work or issue an opinion because they  lacked sufficient evidence to support the amounts presented. These IPAs  also identified material weaknesses in internal control and collectively  issued over 700 findings and recommendations. These weaknesses  included the military services’ inability to, among other things, reasonably  assure that the Budgetary Schedules reflected all of the relevant financial  transactions that occurred and that documentation was available to  support such transactions. As a result of these financial management  issues, DOD expects the department-wide financial statement audit  planned for fiscal year 2018 to result in significant audit findings and a  disclaimer of opinion. In addition, DOD reported that it anticipates  receiving disclaimers of opinion on its full financial statements for several  years, but emphasized that being subject to audit will help the department  make progress.
By consistently applying weapon system acquisition best practices,  managing improper payments associated with military health care,  comprehensively implementing military health care reforms, more  effectively managing its portfolio of support infrastructure, and addressing  long-standing financial management deficiencies, DOD would be better  positioned to identify opportunities to direct its resources to its highest  priorities. Since 2011, we have directed 79 recommendations to DOD in  this area, of which 72 remain open, including 52 priority  recommendations. Table 4 highlights key actions DOD should take to  help address the challenges it faces in controlling costs and managing  finances.
section_title: Strategically Manage Human Capital
paragraphs: DOD is one of the nation’s largest employers, managing a total workforce  of about 2.1 million active-duty and reserve military personnel and  approximately 769,000 civilian personnel. DOD estimates that it will  spend nearly $180 billion in fiscal year 2017 on pay and benefits for  military personnel and about $70 billion for its civilian employees. Taken  together, funding for military and civilian pay and benefits represented  nearly 50 percent of DOD’s budget in fiscal year 2016 (see fig. 10). DOD  is also supported by about 561,000 contractor personnel, who help  maintain weapon systems; support base operations; and provide  information technology, management, and administrative support, among  other responsibilities.  DOD estimates that it spent about $115 billion on  its contractor workforce in fiscal year 2015, although we have raised  questions regarding the reliability of the department’s information on this  workforce.
As with other large organizations, DOD must compete for talent in the  21st Century, and recruit, develop, promote, and retain a skilled and  diverse workforce of service members and civilians. However, DOD, as  other federal agencies, faces mission-critical skill gaps that pose a risk to  national security and impede the department from cost-effectively serving  the public and achieving results. For example, the need for some skill  sets, such as cyber, intelligence, maintenance, engineering, disability  evaluation, and auditing has increased while the need for other skill sets  may decrease over time. Moreover, the changing nature of federal work  and a potential wave of employee retirements could produce gaps in  leadership and institutional knowledge, which may aggravate the  problems created by existing skill gaps.
Current budget and long-term fiscal pressures on the department only  increase the importance of strategically managing human capital. DOD  has recognized that efficient human capital management is imperative  because personnel costs will likely drive many of the department’s future  strategic decisions, and that it must incur compensation costs that are  effective in helping it achieve its recruiting and retention goals. Our work  has found that DOD must address several weaknesses to determine its  appropriate workforce mix and costs, address critical skill gaps, and  develop an effective military compensation strategy as it attempts to  strategically manage its military and civilian workforces and contracted  support.
DOD has begun to implement a significant phase of its civilian workforce  performance management system, called “New Beginnings,” which aims  to create a department-wide civilian workforce performance management  process, and has taken steps to develop better information and data  about the size, capabilities, and skills possessed and needed within its  total workforce. For example, in June 2014 DOD incorporated some  results-oriented performance measures into its civilian workforce plan,  and in June 2016 issued guidance that established a common structure  for managing and evaluating workforce competency gaps for developing  its future strategic workforce plans. In an effort to address critical skill  gaps in its cybersecurity workforce, DOD updated its cybersecurity  workforce plan in 2014 to include a description of the strategies it plans to  employ to address gaps in human capital approaches and critical skills  and competencies.
DOD has also taken steps to evaluate the effectiveness of specific pay,  retirement, health care, and quality of life benefits included in military  compensation, and proposed a range of options to reduce military  compensation costs, such as limiting the amount of the annual pay raise  and implementing increases in enrollment fees, deductibles, and co-pays  for TRICARE participants. DOD has also begun a study to determine the  appropriate mix of pay and benefits to use in making comparisons with  private-sector compensation, and is developing a more comprehensive  methodology for making these comparisons. DOD has made progress in  these areas, but substantial work remains for the department in managing  its human capital.
The following sections identify our assessment of remaining work,  including additional actions that DOD could take to make further progress.
Workforce mix and costs: Since 2004 we have reported on challenges  DOD faces in developing a strategic workforce plan that would enable the  department to make efficient and cost-effective human capital decisions.
For example, we reported that DOD had not assessed the appropriate  mix of military, civilian, and contractors to prioritize its investments and  improve its overall workforce. DOD noted in its strategic workforce plans  that assessing this mix is a significant challenge, and that it planned to  complete a workforce mix assessment in a future plan. However, the  requirement to develop and submit its biennial strategic workforce plan  was repealed in the National Defense Authorization Act for Fiscal Year  2017 and not replaced with another legislative requirement. DOD officials  have stated that the department is engaged in internal workforce planning  efforts to better align its workforce mix and costs.
We also reported in September 2013 that DOD had opportunities to  improve its methodology for estimating workforce costs.  For example,  DOD has not followed our leading practices for cost estimation and it  likely underestimated certain costs, such as those for training, which  prevents the department from making cost-effective comparisons and  decisions regarding the use of its military, civilian, and contractor  workforces. We further reported in December 2015 that DOD has not fully  developed and implemented a plan to achieve savings for its civilian and  contractor workforces, consistent with congressional direction.
We further found that civilian full-time equivalents by themselves may not  be reliable measures of the cost of the civilian personnel workforce. For  example, our analysis shows that from fiscal years 2012 through 2016,  civilian full-time equivalents declined by 3.3 percent, but civilian personnel  costs declined by only 0.9 percent, adjusted for inflation. As a result,  reductions to civilian full-time equivalents may not achieve commensurate  savings, and larger full-time equivalent reductions may be required in  order for DOD to meet mandated savings requirements for the civilian  and contractor workforces.
Critical skill gaps: DOD has not taken sufficient actions to strengthen  the management of certain mission-critical workforces. For example, in  December 2015 we reported that DOD had developed a five-phased  process, including surveys of its employees, to assess the skills of its  acquisition workforce and to identify and close skill gaps. DOD  completed competency assessments for 12 of its 13 career fields and is  developing new training classes to address some skill gaps. However,  DOD has not determined the extent to which workforce skill gaps  identified in initial career field competency assessments have been  addressed and what workforce skill gaps currently exist. Further, DOD  has not established time frames for when career fields should conduct  another round of competency assessments to assess progress toward  addressing previously identified gaps and to identify emerging needs. The  department’s November 2016 acquisition workforce strategic plan  identified that career field competency assessments should be conducted  a minimum of every 5 years, but it is too soon to tell whether DOD will  conduct these assessments as recommended in the plan.
DOD also has not addressed certain personnel challenges resulting from  the increased demand for its unmanned aerial systems. In 2014, we  reported that the Air Force did not accurately identify the crew ratios  needed to meet requirements for its unmanned aerial systems pilots or  establish the effective mix of personnel to satisfy its pilot shortages,  including evaluating the use of military enlisted and federal civilian  personnel to help address pilot needs.  In January 2017, we further  reported that the Air Force and the Army had not resolved key challenges  in managing these pilots or tailored their human capital strategies to  address pilot gaps, to include evaluating the extent to which federal  civilians could be used as pilots.
Military compensation: Since 2011, we have reported that DOD has not  completed the steps necessary to develop a more comprehensive  compensation strategy that could improve the ability of the department to  recruit and retain a highly qualified force to carry out its mission while  minimizing unnecessary costs.  DOD has taken some steps to evaluate  the effectiveness of specific pay and benefits included in military  compensation, as we suggested in March 2011, but has not  comprehensively assessed the effectiveness of its mix of pays and  benefits and used the results to develop a compensation strategy. For  example, the department is implementing changes to the military  retirement system that will provide eligible service members who have at  least 2 but fewer than 20 years of service when departing the military with  a portable retirement benefit. A DOD official stated in January 2017 that  the department has also completed a study to review how military  compensation compares to private sector compensation, among other  efforts.
However, as of March 2017, DOD had not completed an assessment of  the effectiveness of all types of military pay and benefits, or identified  opportunities to achieve long-term cost avoidance by addressing in a  compensation strategy the types of compensation that are effective and  by not incurring costs for compensation that may not be effective to help it  achieve its recruiting and retention goals. For example, in November  2015, we reported that special and incentive pays were not always being  used to fill military occupational specialties that were consistently below  authorized levels for the Army and the Army National Guard, and that  incentives were being used sometimes for military occupational  specialties that were consistently above approved levels.  We further  reported in February 2017 that DOD has not effectively managed special  and incentive pays for its active-duty service members—which totaled  more than $3.4 billion in fiscal year 2015. In May 2017, DOD officials  noted that Army's Career Satisfaction Program is one example of the  services using non-monetary pay incentives to improve retention.  However, we found that while DOD and the military services have  occasionally offered service members non-monetary incentives, they do  not routinely assess whether nonmonetary incentives could be used as  less costly approaches to addressing retention challenges, and that  DOD’s guidance for special and incentive pay does not explicitly  incorporate personnel performance into eligibility criteria for retention  bonuses as a way to foster top talent and improve program results. We  also found that the military services were not consistently applying key  principles of effective human capital management to its special and  incentive pay programs for three high-skill occupations (nuclear  propulsion, aviation, and cybersecurity) that reflect a range of  characteristics of such programs and are associated with missions  deemed critical by the department. In May 2017, DOD officials stated that  DOD applies some human capital principles in its management of military  compensation programs, noting that DOD’s review of the programs  showed that they met or partially met 98 percent of the criteria for  effective human capital management. However, we believe that more fully  implementing such principles to include more precisely targeting its  bonuses to occupations in critical need, and using these pays to foster its  top talent, would help to ensure that DOD’s resources are optimized for  the greatest return on investment.
By comprehensively assessing its workforce mix and costs, strengthening  the management of critical skill gaps, and establishing a cost-effective  military compensation strategy, DOD would be better positioned to  determine and maintain the most effective and efficient mix of military and  civilian personnel and contractor support. Table 5 highlights key actions  DOD should take to help address the challenges it faces to strategically  manage its human capital. Since 2011, we have directed 67  recommendations to DOD in this area, of which 64 remain open.
section_title: Achieve Greater Efficiencies in Defense Business Operations
paragraphs: DOD spends billions of dollars each year acquiring business systems and  contractor-provided services that provide fundamental support to the  warfighter in the areas of health care; logistics; personnel; and financial  management, among other areas. In fiscal year 2014 alone, DOD  obligated $85 billion to its three largest types of contractor-provided  services: knowledge-based, facility-related, and research and  development services. This amount is more than double the amount that  DOD obligated to purchase aircraft, land vehicles, and ships. DOD senior  leaders have prioritized defense institutional reform, and have  emphasized the need to improve business practices and reduce  overhead as a means to achieve greater efficiencies and free up  resources for higher priorities.
However, problems in DOD’s management of the department’s business  functions continue to negatively affect the ability of DOD to satisfy its  mission. In 2005, we designated DOD’s business transformation efforts— those intended to increase the efficiency and effectiveness of what we  identified as DOD’s core business functions—as high risk because DOD  did not have integrated planning or sustained oversight of its business  processes.  We have also designated DOD’s efforts to modernize and  consolidate the department’s business systems, contract management,  financial management, and weapon systems acquisition as high risk  because of planning and leadership challenges.
Congressional direction and personnel growth in headquarters  organizations have led DOD to pursue several personnel reduction  initiatives to achieve efficiencies since 2014. However, DOD has faced  obstacles accounting for the resources devoted to its multiple layers of  headquarters activities because of complex and overlapping relationships  among them, incomplete data, and unclear personnel requirements. Our  work has found that DOD must address several weaknesses to  successfully implement its business transformation efforts, manage  investments to modernize business systems, manage the acquisition of  services, and properly size the department’s headquarters organizations  to accomplish assigned missions.
DOD established new governance forums, issued new plans to guide its  business transformation efforts, and established or clarified roles and  responsibilities for senior positions related to its business functions. In  2012, DOD established the Defense Business Council as a senior-level  governance forum to oversee its core business functions. The Defense  Business Council has recently begun conducting high-level performance  reviews to assess progress in achieving department-wide goals and  objectives in DOD’s Agency Strategic Plan, which is intended to be a  department-wide performance plan for assessing progress across DOD’s  business areas. The Defense Business Council has also started to  identify opportunities to gain efficiencies across DOD’s headquarters  offices and defense agencies. For example, in March 2017, senior DOD  officials stated that DOD had implemented a new initiative to review how  it accounts for costs across its business functions. DOD and the military  departments have also established roles and responsibilities for senior  business transformation positions, such as Chief Management Officers  (CMOs) and Deputy CMOs (DCMOs). DOD has further taken other steps  to avoid potential overlap and duplication and gain efficiencies in its  business systems investments. For example, DOD established an  authoritative data source for defense business system certification  funding and improved the data it uses to manage business systems  acquisition.
Senior DOD leadership also remains committed to addressing its contract  management challenges, and since 2015 has made significant progress  in addressing operational contract support issues, such as incorporating  operational contract support considerations into operational plans. DOD  has also established a framework to define its major headquarters  activities, a key step needed to track resources for these organizations  and identify opportunities to consolidate or eliminate certain positions to  achieve the department’s goals to reduce its headquarters resources.  DOD has made progress in all of these areas, but substantial work  remains to strengthen its business operations and achieve efficiencies.
The following sections identify our assessment of remaining work,  including additional actions that DOD should take to make further  progress.
Business transformation: DOD has not conducted effective  performance reviews needed to ensure accountability for achieving  results for its business transformation initiatives, or established a  department-wide performance plan to monitor progress. Although the  Office of the DCMO has recently begun to hold performance reviews to  assess progress in achieving department-wide strategic goals and  objectives, the reviews have not held business function leaders  accountable in part because military department performance information  was not included in the scope of the reviews. In July 2015, the Office of  the DCMO issued the DOD Agency Strategic Plan, which according to  DOD is a plan that establishes goals and priorities to manage its major  business operations. However, the plan does not identify specific  initiatives to improve DOD’s business transformation efforts, identify the  systems and processes needed to address business transformation  matters, or identify how progress will be assessed. In addition, while the  Agency Strategic Plan is intended to apply to the entire department, we  reported that the military departments had a limited role in the  development of the plan. Further, the military departments have not  aligned their respective plans with the Agency Strategic Plan, or used the  Agency Strategic Plan to monitor their business functions.
Business system modernization: DOD has developed an enterprise  architecture—a blueprint for DOD’s business system modernization  efforts that is intended to guide and constrain the implementation of  business systems; however, the current version is missing important  content associated with achieving the department’s goal of using the  architecture to guide, constrain, and enable interoperable business  systems. In addition, the department has not fully defined and established  management controls and plans to more effectively and efficiently  manage its business system investments, which totaled approximately  $10 billion in fiscal year 2015. DOD officials stated in May 2017 that the  department has used its business enterprise architecture for at least the  past three investment review cycles to help identify duplicate investments.  In addition, officials have provided examples of benefits attributed, at  least in part, to the department’s enterprise architecture. For example,  according to officials with the Office of the DCMO, two proposed defense  business systems were not approved due, in part, to architecture reviews  that revealed that the requested capabilities were already available in  other systems. In addition, DOD officials stated in May 2017 that the  architecture informed a decision to investigate potential duplication and  overlap and opportunities to develop shared services among fourth estate  and financial management systems. However, the department has not  yet demonstrated that it is actively and consistently using such  assessments of potential duplication and overlap to eliminate duplicative  systems. In January 2017, the department issued a plan to improve the  usefulness of its business architecture. However, the department’s effort  to complete its federated business architecture remains a work in  progress. In addition, DOD needs to take steps to ensure that, among  other things, documents submitted as part of the business system  investment management process include critical information for  conducting all assessments, such as information about cost in  relationship to return on investment.  We also reported in February 2017  that DOD had not yet established an action plan (or plans) highlighting  how it intends to, among other things, improve its business system  investment management process or improve its business system  acquisition outcomes.
Services acquisition: DOD has not fully developed guidance and plans  needed to strategically manage its acquisition of services to determine  what the department is buying today and what it intends to buy in the  future, or provide the Congress with visibility into its planned spending for  contracted services. Specifically, we reported in February 2017 that, while  DOD issued new guidance in January 2016 for acquiring services, DOD  lacks an action plan to enable it to assess progress in achieving its goals  of more effectively managing services acquisition, and efforts to identify  goals and associated metrics are in the early stages of development.  We also reported in February 2016 that, while data on future service  acquisitions are generally maintained by DOD program offices, DOD and  military department guidance do not require that the data be specifically  identified in DOD’s budget forecasts, and DOD’s January 2016 instruction  does not clearly identify what level of detail should be collected, leaving  DOD at risk of developing inconsistent data between the military  departments.
Headquarters management: Our body of work on DOD’s headquarters  reduction initiatives found that department-wide efforts to improve the  efficiency of headquarters organizations and identify related costs savings  may not be fully implemented or may not result in meaningful savings. In  February 2012, we reported that DOD could recognize cost avoidance  and save billions of dollars by reviewing and identifying further  opportunities for consolidating or reducing the size of headquarters  organizations.  In a 2015 review of its six business processes, which  included savings opportunities beyond headquarters reductions, the  Defense Business Board identified between $62 billion and $84 billion in  potential cumulative savings opportunities for fiscal years 2016 through  2020 that could be achieved through civilian personnel attrition and  retirements to occur without replacements over the next 5 years and by  improving core processes such as reducing excessive organizational  layers, among other factors.
However, we reported that DOD has not had a clear or accurate  accounting of headquarters’ resources, including contractors, to use as a  starting point to track headquarters reduction initiatives.  We further  reported that DOD has not periodically reviewed the size and structure of  these organizations, such as the geographic combatant commands, and  that personnel management systems have not consistently identified and  tracked assigned personnel.  We also found that DOD headquarters  organizations have neither systematically determined their workforce  requirements nor established procedures to periodically reassess these  requirements, as outlined in DOD and other guidance, limiting DOD’s  ability to identify efficiencies and limit headquarters growth in these  organizations.  In 2016, DOD established a revised definition for “major  headquarters activities,” but the one department-wide data set that  identifies military and civilian positions by specific DOD headquarters  functions contains unreliable data because DOD has not aligned these  data with its revised definition.
By effectively monitoring department-wide business transformation  efforts, establishing management controls for its business system  investments, developing guidance to monitor service acquisitions, and  improving the reliability of its headquarters data, DOD will be better  positioned to identify opportunities to gain additional efficiencies in its  business operations. Table 6 highlights key actions DOD should take to  help achieve efficiencies across its defense business operations. Since  2011, we have directed 49 recommendations to DOD in this area, of  which 38 recommendations remain open, including 8 priority  recommendations.
section_title: Four Cross-Cutting Factors Have Affected DOD’s Ability to Address Key Mission Challenges
paragraphs: Our body of work at DOD has identified four cross-cutting factors that  have affected DOD’s ability to address its key mission challenges: (1) the  lack of sustained leadership involvement, (2) a misalignment between  programs and budgets and resources, (3) ineffective strategic planning  and performance monitoring, and (4) an ineffective management control  system.
Lack of sustained leadership involvement: Sustained leadership  involvement is critical to DOD’s success in addressing long-standing  management challenges, implementing lasting department-wide reforms,  and achieving greater accountability. Since 1990, we have reported on  leadership challenges across the department. In 2007, we suggested to  Congress that it consider enacting legislation to establish a full-time CMO  position at DOD with significant authority and experience and a sufficient  term to provide focused and sustained leadership over the department’s  business functions. In 2008, Congress passed the National Defense  Authorization Act for Fiscal Year 2008, which designated the Deputy  Secretary of Defense as the CMO and created the DCMO position, which  differed from our recommendation that DOD create a separate full-time  CMO position as an Executive Level II position that reports directly to  Secretary of Defense. Since 2008, DOD has made some progress in  sustaining leadership over its business functions, including developing  specific roles and responsibilities for the CMO and DCMO and  establishing a senior-level governance forum co-chaired by the DCMO  and the DOD Chief Information Officer to oversee the department’s  business functions. However, DOD has had challenges retaining  individuals in some of its top leadership positions, and significant work  remains to address long-standing challenges in the management of  DOD’s business functions (see fig. 11).
Nine years after the creation of the CMO and DCMO positions, all of  DOD’s business functions remain on our High-Risk List. For example,  with respect to financial management, in 2005 we reported that DOD had  not established a framework to oversee and integrate financial  management improvement efforts, such as developing remediation plans  and accountability mechanisms to ensure progress and lasting financial  management reform. In February 2017 we further reported that DOD had  not reasonably assured that its components had effective leadership and  processes in place to substantially improve DOD’s financial management  operations and audit readiness.  Consequently, although DOD  leadership has shown a commitment to financial management reform and  established associated plans and guidance, we have seen little tangible  evidence of progress in achieving significant financial management  reforms. Regarding business system modernization, we reported in 2005  that DOD leadership had not ensured that these investments were  effectively implementing acquisition best practices so that each  investment might deliver the expected benefits and capabilities on time  and within budget. We further reported in February 2017 that the DCMO  and other DOD stakeholders did not yet have the full range of  management controls in place needed to effectively oversee these  investments.
Congress has remained concerned about DOD’s leadership challenges  and, in the National Defense Authorization Act for Fiscal Year 2017,  established a new CMO position and replaced the Under Secretary of  Defense for Acquisition, Technology, and Logistics with the Under  Secretary of Defense for Research and Engineering and the Under  Secretary of Defense for Acquisition and Sustainment.  These new  positions provide an opportunity to enhance the department’s leadership  focus on its key mission challenges, but DOD will need to clearly define  key responsibilities and authorities to help ensure that these positions can  effectively drive transformation efforts. For example, section 901 of the  National Defense Authorization Act for Fiscal Year 2017 requires the  CMO to have extensive experience managing large or complex  organizations, and to establish policies on and supervise all of the  department’s business operations. In addition, the provision requires the  CMO to have the authority to direct the Secretaries of the military  departments and the heads of all other DOD organizations with regard to  business operations. This provision further requires that the Secretary of  Defense conduct a review of DOD leadership positions and subordinate  organizations, and define relationships, including the placement of the  CMO within the department, to inform how the position will be  implemented. Our prior work has found that a CMO position similar to the  one set forth in the provision may help DOD address its challenges in  implementing business transformation and other efforts, and provide  focused and sustained leadership over them. However, the provision  does not specify how the CMO will carry out its authority, what the CMO’s  precedence in the department will be, what the CMO’s executive  schedule level will be, and how long the term of service for the position  will be.
The new Under Secretary for Research and Engineering will have  responsibility for technological development and testing, while the Under  Secretary for Acquisition and Sustainment will have responsibility for  acquiring and sustaining DOD’s capabilities and overseeing the  modernization of nuclear forces and the development of capabilities to  counter weapons of mass destruction. We have reported on the potential  benefits of separating technology development from system development  for acquisition programs, but the National Defense Authorization Act for  Fiscal Year 2017 did not contain any provisions for DOD to realign its  acquisition process along these lines. Further, in considering the  cumulative effect of these changes, it is unclear whether the newly  established acquisition Under Secretary positions will have adequate  authority to address long-standing issues in holding the military  departments and service acquisition executives accountable for major  defense acquisition programs before they start and for their execution  once they begin. We will continue to assess the department’s leadership  commitment to addressing DOD’s key mission challenges, and we will  also assess the impact of these new positions.
Misalignment between programs and resources and budgets: In  January 2017, we reported that the federal government faces an  unsustainable long-term fiscal path and that the Congress and the new  administration will need to consider difficult policy choices in the short  term regarding federal spending. However, since 2005, we have  reported that DOD’s approach to planning and budgeting often results in  a mismatch between the department’s programs and available  resources. For example, while we have found that DOD has reported  some progress in implementing acquisition reforms to control program  costs for its weapon systems, we have reported that DOD has  inconsistently implemented knowledge-based acquisition leading  practices to estimate costs for its $1.5 trillion portfolio of large weapon  systems. Because DOD does not routinely identify accurate and  realistic resource needs, unexpected growth in some of its major  acquisition programs—including the F-35, AIM-9X Block II Air-to-Air  Missile, and MQ-8 Fire Scout—will affect numerous programs that  simultaneously vie for significant funding commitments. In addition, we  have reported that the Missile Defense Agency, which has spent  approximately $90 billion since 2002, has been unable to fully estimate all  life-cycle costs and stabilize acquisition funding baselines in order to  assess affordability over time, which has affected DOD’s ability to make  investment and program decisions that align with the budget. Further  straining DOD’s budget is a proposed near-simultaneous recapitalization  and modernization of all three legs of the nuclear triad, which DOD  estimates will cost around $270 billion over the next two decades.
Since 2001, DOD has increasingly relied on funding for overseas  contingency operations (OCO) to pay for operating costs—those for day- to-day operations that are typically funded through the base budget— raising uncertainty as to whether over the long term the department can  afford the forces and weapon systems and other programs it currently  maintains. We reported in January 2017 that the amount of OCO  appropriations DOD considers as nonwar related increased from about 4  percent in fiscal year 2010 to about 12 percent in fiscal year 2015, an  increase that reflects DOD’s expanding the use of OCO appropriations  from contingency-related operations in Iraq and Afghanistan to other  activities, such as efforts to deter Russia and reassure U.S. allies.   Senior DOD officials have acknowledged that costs funded by OCO  appropriations are likely to endure after contingency operations have  ceased. However, DOD has not developed a plan to transition enduring  OCO-funded costs to the base budget, and senior level DOD officials  maintain that DOD will be unable to make this transition until there is  sufficient relief from the sequester-level discretionary budget caps  established in the Budget Control Act of 2011. In January 2017, we  recommended that DOD collaborate with the Office of Management and  Budget to modify guidance on what costs should be included in OCO  funding requests, and that DOD develop a complete and reliable estimate  of its enduring OCO-funded costs and report those costs with its future  base budget requests.
Ineffective strategic planning and performance monitoring: For more  than a decade we have reported on strategic planning and performance  monitoring challenges that have affected the efficiency and effectiveness  of DOD’s operations both at the strategic readiness level and across all of  DOD’s major business areas–including contract management, financial  management, and supply chain management.  DOD has made some  important progress in these areas, such as implementing a corrective  action plan and demonstrating sustained progress on the management of  its spare parts from 2010 through 2017. As a result, we removed the  inventory management component of the supply chain management high- risk area—an issue that has been on our High-Risk List since 1990.   However, more work remains. For example, in 2016 we reported that  DOD may be unable to determine the effectiveness of the military  departments’ respective readiness recovery efforts or assess the  departments’ ability to meet the demands of the National Military Strategy  because DOD has not used effective strategic planning practices–that is,  identified goals and metrics for measuring progress against the goals and  evaluated performance and progress toward meeting the goals.  We  also reported that DOD had made progress in establishing an effective strategic plan to integrate business transformation efforts across DOD’s  major business areas, but that DOD continued to lack a strategic planning  process that defined a role for the military departments in those efforts.
We have also reported that in its performance monitoring efforts DOD has  missed opportunities to hold officials accountable for progress made  toward DOD-identified goals and milestones, to make timely and well- informed actions to address identified challenges, and to encourage  continuous improvements in performance across its major business  functions. We reported in July 2015, for example, that DOD’s  performance monitoring practices have been inconsistent with  government-wide requirements because DOD had not conducted  performance reviews that were led by the CMO or other top agency  leaders at least once a quarter to review progress on all agency priority  goals, which cover many of DOD’s major business functions, or to  discuss at-risk goals and improvement strategies, among other issues.  We also reported that DOD’s ability to make further progress in the  business systems modernization and financial management business  areas have been hindered by limitations in its performance monitoring.  For example, DOD has not developed an action plan to monitor progress  in making business system improvements and has not obtained  complete, detailed information on all corrective action plans from the  military services to fully monitor and assess DOD’s progress in resolving  its financial management deficiencies.
Ineffective management control system: A critical component of an  effective management control system is the use of quality information to  inform day-to-day decision making.  However, we have also reported  since 2011 that DOD does not have quality information on costs related to  mission critical programs, the department’s headquarters functions, and  the department’s major business areas.  Without quality information  regarding the costs associated with DOD’s mission-critical weapon  systems, for example, DOD will be unable to effectively assess the  affordability of the programs that support them. Among other things, DOD  will be unable to accurately estimate the cost to recapitalize the nuclear  triad, to complete the acquisition and deployment of the F-35, and to  evaluate gaps that could result from the divestment of the A-10. We also  reported in 2016 that DOD does not have cost data associated with  functions within headquarters organizations, including within its business  areas, which is needed to facilitate the identification of opportunities for  consolidation or elimination of positions across an organization.  Absent  internal control systems needed to help ensure quality cost information,  DOD’s ability to provide meaningful information to Congress to inform  future budget and funding decisions is hindered.
We have reported that DOD also faces long-standing challenges in  implementing an effective management control system to improve  accountability and effectively and efficiently achieve its mission. For  example, since 2005 our body of work on DOD’s financial management  has found that DOD has been unable to receive an audit opinion on its  financial statements because of its serious financial management  problems, including material internal control weaknesses. DOD has  begun to address our 2014 recommendation about internal control  weaknesses, identifying internal controls as a critical capability in DOD’s  audit readiness guidance. However, as of April 2017, the Defense  Finance and Accounting Service had not fully implemented the steps  needed to address requirements in DOD’s audit readiness guidance  related to planning, testing, and implementing corrective actions. As a  result, the Defense Finance and Accounting Service does not have  assurance that its processes, systems, and controls can produce and  maintain accurate, complete, and timely financial management  information for the approximately $200 billion in contract payments it  annually processes on behalf of DOD components.  Implementing  internal control steps, to include performing required testing of contract  pay processes and documenting how previously identified internal control  deficiencies have been addressed, can help ensure that DOD  implements, maintains, and sustains the necessary financial  improvements to effectively carry out its contract pay mission.
section_title: Concluding Observations
paragraphs: DOD plays a critically important role in protecting the security of the  United States while simultaneously working to maintain regional security  and stability abroad. The department must fulfill this vital role while facing  a complex and changing national security environment with unique and  rapidly evolving threats. Although the United States’ military strength is  unparalleled across the globe, the department faces a myriad of  influences that pose obstacles to its effectiveness and progress, including  budgetary strains and uncertainty, and growing and evolving demands  that challenge its ability to restore needed levels of readiness after more  than a decade of war. At the same time, the department must be more  efficient in managing the significant resources entrusted to it, including  the billions of dollars invested in acquiring major weapon systems, as well  as its vast and complex business operations supporting its warfighting  mission. The department has made noteworthy progress addressing key  challenges that affect its mission but significant work remains, and the  department will need to continue to make difficult decisions regarding  reaching an affordable balance between investments in current needs  and new capabilities.
We have issued hundreds of reports and made thousands of  recommendations to DOD to help position it to address its challenges.  While DOD has taken action to implement many of them, it lags behind  the rest of the federal government in implementing our recommendations,  with 1,037 recommendations remaining open, including 78 priority  recommendations that we believe require top leadership attention and  that, if implemented, could result in significant financial savings and  increased efficiencies. Implementing these recommendations would go a  long way toward addressing the factors that have consistently affected  DOD’s ability to efficiently and effectively meet the department’s mission,  as well as position the department to make significant and sustained  progress across its key challenges. The need for progress will be critical  in an era of increased uncertainty both domestically and abroad, and  must continue to be the department’s top priority.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for comment. In its comments,  reproduced in appendix III, DOD stated that although this report is a  review of progress made of previous GAO audits and no new  recommendations were issued, the department stands by its responses  and concurrence to taking the requisite actions needed to address all  previous recommendations. DOD also provided technical comments,  which we incorporated into the report, as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, the Deputy Secretary of Defense,  and the Deputy Chief Management Officer. 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) 512-3404 or berrickc@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.
section_title: Appendix I: Actions That the Department of Defense (DOD) Needs to Take to Address Our 78 Priority Open Recommendations
section_title: Appendix II: Our Work Related to the Department of Defense’s Key Mission Challenges
paragraphs: Our work identified five key challenges that impact Department of  Defense’s (DOD) ability to accomplish its mission–specifically, the need  for DOD to (1) rebalance forces and rebuild readiness in an evolving  global security environment; (2) mitigate threats to cyberspace and  expand cyber capabilities; (3) control the escalating costs of programs,  such as certain weapon systems acquisitions and military health care,  and manage its finances; (4) strategically manage its human capital; and  (5) achieve greater efficiencies in defense business operations. We have  listed related work completed since 2011 for each of these challenge  areas below. Also listed below are our cross-cutting products, such as the  high-risk; duplication, overlap, and fragmentation; and key issues  products.
subsections: section_title: Challenge 1: Rebalance Forces and Rebuild Readiness in an Evolving Global Security Environment
paragraphs: Overseas Contingency Operations: OMB and DOD Should Revise the  Criteria for Determining Eligible Costs and Identify the Costs Likely to  Endure Long Term. GAO-17-68. Washington, D.C.: January 18, 2017.
Air Force Training, Further Analysis and Planning Needed to Improve  Effectiveness. GAO-16-864. Washington, D.C.: September 19, 2016.
Military Readiness: DOD’s Readiness Rebuilding Efforts May Be at Risk  without a Comprehensive Plan. GAO-16-841. Washington, D.C.:  September 7, 2016.
Force Structure: Better Information Needed to Support Air Force A-10  and Other Future Divestment Decisions. GAO-16-816. Washington, D.C.:  August 24, 2016.
Military Readiness: Progress and Challenges in Implementing the Navy’s  Optimized Fleet Response Plan. GAO-16-466R. Washington, D.C.: May  2, 2016.
F-35 Sustainment: DOD Needs a Plan to Address Risks Related to Its  Central Logistics System. GAO-16-439. Washington, D.C.: April 14, 2016.
Nuclear Weapons Sustainment: Improvements Made to Budget Estimates  Report, but Opportunities Remain to Further Enhance Transparency.  GAO-16-23. Washington, D.C.: December 10, 2015.
Regionally Aligned Forces: DOD Could Enhance Army Brigades’ Efforts  in Africa by Improving Activity Coordination and Mission-Specific  Preparation. GAO-15-568. Washington, D.C.: August 26, 2015.
Nuclear Weapons Sustainment: Improvements Made to Budget  Estimates, but Opportunities Exist to Further Enhance Transparency.  GAO-15-536. Washington, D.C.: July 31, 2015.
Special Operations Forces: Opportunities Exist to Improve Transparency  of Funding and Assess Potential to Lessen Some Deployments.  GAO-15-571. Washington, D.C.: July 16, 2015.
Navy Force Structure: Sustainable Plan and Comprehensive Assessment  Needed to Mitigate Long-Term Risks to Ships Assigned to Overseas  Homeports. GAO-15-329. Washington, D.C.: May 29, 2015.
F-35 Sustainment: Need for Affordable Strategy, Greater Attention to  Risks, and Improved Cost Estimates. GAO-14-778. Washington, D.C.:  September 23, 2014.
Security Force Assistance: More Detailed Planning and Improved Access  to Information Needed to Guide Efforts of Advisor Teams in Afghanistan.  GAO-13-381. Washington, D.C.: April 30, 2013.
Missile Defense: Opportunity to Refocus on Strengthening Acquisition  Management. GAO-13-432. Washington, D.C.: April 26, 2013.
section_title: Challenge 2: Mitigate Threats to Cyberspace and Expand Cyber Capabilities
paragraphs: Defense Civil Support: DOD Needs to Identify National Guard’s Cyber  Capabilities and Address Challenges in Its Exercises. GAO-16-574.  Washington, D.C.: September 6, 2016.
Civil Support: DOD Needs to Clarify Its Roles and Responsibilities for  Defense Support of Civil Authorities during Cyber Incidents. GAO-16-332.  Washington, D.C.: April 4, 2016.
Defense Infrastructure: Improvements in DOD Reporting and  Cybersecurity Implementation Needed to Enhance Utility Resilience  Planning. GAO-15-749. Washington, D.C.: July 23, 2015.
Insider Threats: DOD Should Strengthen Management and Guidance to  Protect Classified Information and Systems. GAO-15-544. Washington,  D.C.: June 2, 2015.
Defense Cybersecurity: DOD Needs to Better Plan for Continuity of  Operations in a Degraded Cyber Environment and Provide Increased  Oversight. GAO-14-404SU. Washington, D.C.: April 1, 2014. (For Official  Use Only)
section_title: Challenge 3: Control Escalating Costs and Manage Finances
paragraphs: DOD Financial Management: Significant Efforts Still Needed for  Remediating Audit Readiness Deficiencies. GAO-17-85. Washington,  D.C.: February 9, 2017.
Financial Audit: U.S. Government’s Fiscal Years 2015 and 2016  Consolidated Financial Statements. GAO-17-283R. Washington, D.C.:  January 12, 2017.
Littoral Combat Ship and Frigate: Congress Faced with Critical  Acquisition Decisions. GAO-17-262T. Washington, D.C.: December 1,  2016.
DOD Financial Management: Improvements Needed in the Navy’s Audit  Readiness Efforts for Fund Balance with Treasury. GAO-16-47.  Washington, D.C.: August 19, 2016.
DOD Financial Management: Greater Visibility Needed to Better Assess  Audit Readiness for Property, Plant, and Equipment. GAO-16-383.  Washington, D.C.: May 26, 2016.
Defense Infrastructure: More Accurate Data Would Allow DOD to Improve  the Tracking, Management, and Security of Its Leased Facilities.  GAO-16-101. Washington, D.C.: March 15, 2016.
Military Base Realignments and Closures: More Guidance and  Information Needed to Take Advantage of Opportunities to Consolidate  Training. GAO-16-45. Washington, D.C.: February 18, 2016.
DOD Financial Management: Continued Actions Needed to Address  Congressional Committee Panel Recommendations. GAO-15-463.  Washington, D.C.: September 28, 2015.
Defense Health Care Reform: Actions Needed to Help Ensure Defense  Health Agency Maintains Implementation Progress. GAO-15-759.  Washington, D.C.: September 10, 2015.
F-35 Joint Strike Fighter: Assessment Needed to Address Affordability  Challenges. GAO-15-364. Washington, D.C.: April, 14, 2015.
Improper Payments: TRICARE Measurement and Reduction Efforts  Could Benefit from Adopting Medical Record Reviews. GAO-15-269.  Washington, D.C.: February 18, 2015.
Defense Infrastructure: DOD Needs to Improve Its Efforts to Identify  Unutilized and Underutilized Facilities. GAO-14-538. Washington, D.C.:  September 8, 2014.
Defense Health Care Reform: Additional Implementation Details Would  Increase Transparency of DOD’s Plans to Enhance Accountability.  GAO-14-49. Washington, D.C.: November 6, 2013.
Ford Class Carriers: Lead Ship Testing and Reliability Shortfalls Will Limit  Initial Fleet Capabilities. GAO-13-396. Washington, D.C.: September 5,  2013.
Military Bases: DOD Has Processes to Comply with Statutory  Requirements for Closing or Realigning Installations. GAO-13-645.  Washington, D.C.: June 27, 2013.
DOD Financial Management: Significant Improvements Needed in Efforts  to Address Improper Payment Requirements. GAO-13-227. Washington,  D.C.: May 13, 2013.
Defense Infrastructure: Improved Guidance Needed for Estimating  Alternatively Financed Project Liabilities. GAO-13-337. Washington, D.C.:  April 18, 2013.
Military Bases: Opportunities Exist to Improve Future Base Realignment  and Closure Rounds. GAO-13-149. Washington, D.C.: March 7, 2013.
Excess Facilities: DOD Needs More Complete Information and a Strategy  to Guide Its Future Disposal Efforts. GAO-11-814. Washington, D.C.:  September 19, 2011.
section_title: Challenge 4: Strategically Manage Human Capital
paragraphs: Defense Acquisition Workforce: DOD Has Opportunities to Further  Enhance Use and Management of Development Fund. GAO-17-332.  Washington, D.C.: March 28, 2017.
Military Compensation: Additional Actions Are Needed to Better Manage  Special and Incentive Pay Programs. GAO-17-39. Washington, D.C.:  February 3, 2017.
Unmanned Aerial Systems: Air Force and Army Should Improve Strategic  Human Capital Planning for Pilot Workforces. GAO-17-53. Washington,  D.C.: January 31, 2017.
DOD Inventory of Contracted Services: Timely Decisions and Further  Actions Needed to Address Long-Standing Issues. GAO-17-17.  Washington, D.C.: October 31, 2016.
DOD Civilian and Contractor Workforces: Additional Cost Savings Data  and Efficiencies Plan Are Needed. GAO-17-128. Washington, D.C.:  October 12, 2016.
Unmanned Aerial Systems: Further Actions Needed to Fully Address Air  Force and Army Pilot Workforce Challenges. GAO-16-527T. Washington,  D.C.: March 16, 2016.
Civilian and Contractor Workforces: Complete Information Needed to  Assess DOD’s Progress for Reductions and Associated Savings.  GAO-16-172. Washington, D.C.: December 23, 2015.
Defense Acquisition Workforce: Actions Needed to Guide Planning Efforts  and Improve Workforce Capability. GAO-16-80. Washington, D.C.:  December 14, 2015.
DOD Inventory of Contracted Services: Actions Needed to Help Ensure  Inventory Data Are Complete and Accurate. GAO-16-46. Washington,  D.C.: November 18, 2015.
Military Recruiting: Army National Guard Needs to Continue Monitoring,  Collect Better Data, and Assess Incentives Programs. GAO-16-36.  Washington D.C.: November 17, 2015.
Unmanned Aerial Systems: Actions Needed to Improve DOD Pilot  Training. GAO-15-461. Washington, D.C.: May 14, 2015.
Defense Contractors: Additional Actions Needed to Facilitate the Use of  DOD’s Inventory of Contracted Services. GAO-15-88. Washington, D.C.:  November 19, 2014.
Human Capital: DOD Should Fully Develop Its Civilian Strategic  Workforce Plan to Aid Decision Makers. GAO-14-565. Washington, D.C.:  July 9, 2014.
Air Force: Actions Needed to Strengthen Management of Unmanned  Aerial System Pilots. GAO-14-316. Washington, D.C.: April 10, 2014.
Human Capital: Opportunities Exist to Further Improve DOD’s  Methodology for Estimating the Costs of Its Workforces. GAO-13-792.  Washington, D.C.: September 25, 2013.
Human Capital: Additional Steps Needed to Help Determine the Right  Size and Composition of DOD’s Total Workforce. GAO-13-470.  Washington, D.C.: May 29, 2013.
Human Capital: Critical Skills and Competency Assessments Should Help  Guide DOD Civilian Workforce Decisions. GAO-13-188. Washington,  D.C.: January 17, 2013.
Human Capital: DOD Needs Complete Assessments to Improve Future  Civilian Strategic Workforce Plans. GAO-12-1014. Washington, D.C.:  September 27, 2012.
Defense Acquisition Workforce: Improved Processes, Guidance, and  Planning Needed to Enhance Use of Workforce Funds. GAO-12-747R.  Washington, D.C.: June 20, 2012.
section_title: Challenge 5: Achieve Efficiencies in Defense Business Operations
paragraphs: Defense Business Transformation: DOD Should Improve Its Planning with  and Performance Monitoring of the Military Departments. GAO-17-9.  Washington, D.C.: December 7, 2016.
Defense Headquarters: Improved Data Needed to Better Identify  Streamlining and Cost Savings Opportunities by Function. GAO-16-286.  Washington, D.C.: June 30, 2016.
DOD Major Automated Information Systems: Improvements Can Be  Made in Reporting Critical Changes and Clarifying Leadership  Responsibility. GAO-16-336. Washington, D.C.: March 30, 2016.
DOD Service Acquisition: Improved Use of Available Data Needed to  Better Manage and Forecast Service Contract Requirements.  GAO-16-119. Washington, D.C.: February 18, 2016.
Defense Satellite Communications: DOD Needs Additional Information to  Improve Procurements. GAO-15-459. Washington, D.C.: July 17, 2015.
DOD Business Systems Modernization: Additional Action Needed to  Achieve Intended Outcomes. GAO-15-627. Washington, D.C.: July 16,  2015.
Defense Headquarters: DOD Needs to Reassess Personnel  Requirements for the Office of the Secretary of Defense, Joint Staff, and  Military Service Secretariats. GAO-15-10. Washington, D.C.: January 21,  2015.
Defense Headquarters: DOD Needs to Reevaluate Its Approach for  Managing Resources Devoted to the Functional Combatant Commands.  GAO-14-439. Washington, D.C.: June 26, 2014.
DOD Business Systems Modernization: Further Actions Needed to  Address Challenges and Improve Accountability. GAO-13-557.  Washington, D.C.: May 17, 2013.
Defense Headquarters: DOD Needs to Periodically Review and Improve  Visibility of Combatant Commands’ Resources. GAO-13-293.  Washington, D.C.: May 15, 2013.
DOD Business Systems Modernization: Governance Mechanisms for  Implementing Management Controls Need to Be Improved. GAO-12-685.  Washington, D.C.: June 1, 2012.
Defense Headquarters: Further Efforts to Examine Resource Needs and  Improve Data Could Provide Additional Opportunities for Cost Savings.  GAO-12-345. Washington, D.C.: March 21, 2012.
section_title: Our Cross-Cutting Reports
paragraphs: Defense Acquisitions: Assessments of Selected Weapon Programs.  GAO-17-333SP. Washington, D.C.: March 30, 2017.
High-Risk Series: Progress on Many High-Risk Areas, While Substantial  Efforts Needed on Others. GAO-17-317. Washington, D.C.: February 15,  2017.
The Nation’s Fiscal Health: Action Is Needed to Address the Federal  Government’s Fiscal Future. GAO-17-237SP. Washington, D.C.: January  17, 2017.
Performance and Accountability Report, Fiscal Year 2016. GAO-17-1SP.  Washington, D.C.: November 15, 2016.  2016 Annual Report: Additional Opportunities to Reduce Fragmentation,  Overlap, and Duplication and Achieve Other Financial Benefits.  GAO-16-375SP. Washington, D.C.: April 13, 2016.
Managing for Results: Agencies Report Positive Effects of Data-Driven  Reviews on Performance but Some Should Strengthen Practices.  GAO-15-579. Washington, D.C.: July 7, 2015.  2015 Annual Report: Additional Opportunities to Reduce Fragmentation,  Overlap, and Duplication and Achieve Other Financial Benefits.  GAO-15-404SP. Washington, D.C.: April 14, 2015.
High-Risk Series: An Update. GAO-15-290. Washington, D.C.: February  11, 2015.
DOD Financial Management: The Defense Finance and Accounting  Service Needs to Fully Implement Financial Improvements for Contract  Pay. GAO-14-10. Washington, D.C.: June 23, 2014.  2012 Annual Report Opportunities to Reduce Duplication, Overlap and  Fragmentation, Achieve Savings, and Enhance Revenue.  GAO-12-342SP. Washington, D.C.: February 28, 2012.
Opportunities to Reduce Potential Duplication in Government Programs,  Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington,  D.C.: March 1, 2011.  21st Century Challenges: Reexamining the Base of the Federal  Government. GAO-05-325SP. Washington, D.C.: February 1, 2005.
High-Risk Series: An Update. GAO-05-207. Washington, D.C.: January  2005.
Defense Acquisitions: Assessments of Major Weapon Programs.  GAO-04-248. Washington, D.C.: March 31, 2004.
Military Readiness: New Reporting System Is Intended to Address Long- Standing Problems, but Better Planning Is Needed. GAO-03-456.  Washington, D.C.: March 28, 2003.
section_title: Appendix III: Comments from the Department of Defense
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Matt Ullengren (Assistant  Director); Bonnie Anderson; Lori Atkinson; Jason Bair; Vincent Balloon;  Thomas Baril; Tracy Barnes; Daniel Berg; Margaret Best; Arkelga  Braxton; Penney Harwell Caramia; Angela Clowers; Kevin Copping;  Alissa Czyz; Timothy DiNapoli; Debra Draper; Gary Engel; Brenda S.  Farrell; Gayle Fischer; Gina Flacco; Paul Francis; Brent Helt; Gina  Hoffman; Michael Holland; Charles Michael Johnson, Jr.; Mae Jones;  Joseph Keener; Asif Khan; Joseph W. Kirschbaum; Brian Lepore; Michele  Mackin; Ned Malone; Judith McCloskey; Jacqueline McColl; Valerie  Melvin; Zina Dache Merritt; J. Christopher Mihm; Jamilah Moon; Elizabeth  Morris; Marcus Oliver; John Pendleton; Natalia Pena; Richard Powelson;  Erika Prochaska; William Reinsberg; James Reynolds; Cary B. Russell;  Tina Won Sherman; Andrew Von Ah; Shana Wallace; Chris Watson; and  Kristy Williams made key contributions to this report.