GPRA is intended to shift the focus of government decisionmaking, management, and accountability from activities and processes to the results and outcomes achieved by federal programs. New and valuable information on the plans, goals, and strategies of federal agencies has been provided since federal agencies began implementing GPRA. Under GPRA, annual performance plans are to clearly inform the Congress and the public of (1) the annual performance goals for agencies’ major programs and activities, (2) the measures that will be used to gauge performance, (3) the strategies and resources required to achieve the performance goals, and (4) the procedures that will be used to verify and validate performance information. These annual plans, issued soon after transmittal of the President’s budget, provide a direct linkage between an agency’s longer-term goals and mission and day-to-day activities. Annual performance reports are to subsequently report on the degree to which performance goals were met. The issuance of the agencies’ performance reports, due by March 31, represents a new and potentially more substantive phase in the implementation of GPRA—the opportunity to assess federal agencies’ actual performance for the prior fiscal year and to consider what steps are needed to improve performance and reduce costs in the future. The mission of the Department of Defense is to support and defend the Constitution of the United States; provide for the common defense of the nation, its citizens, and its allies; and protect and advance U.S. interests around the world. Defense operations involve over $1 trillion in assets, budget authority of about $310 billion annually, and about 3 million military and civilian employees. Directing these operations represents one of the largest management challenges within the federal government. This section discusses our analysis of DOD’s progress in achieving outcomes and the strategies that DOD has in place, particularly human capital and information technology, for accomplishing these outcomes. In discussing these outcomes, we have also provided information drawn from our prior work on the extent to which DOD provided assurance that the performance information it is reporting is credible. In general, the extent to which DOD has made progress in achieving the six outcomes is unclear. In our opinion, one of the reasons for the lack of clarity is that most of the selected program outcomes DOD is striving to achieve are complex and interrelated and may require a number of years to accomplish. This condition is similar to what we reported last year on our analysis of DOD’s fiscal year 1999 performance report and fiscal year 2001 performance plan. Further, with the new administration, DOD is undergoing a major review of its military strategy and business operations, which may result in changes to the way DOD reports performance information. The extent to which the Department has made progress toward the outcome of maintaining U.S. technological superiority in key war-fighting capabilities is difficult to assess. DOD’s performance goal for this outcome is to transform U.S. military forces for the future. As we reported last year, some of the performance goal’s underlying measures—such as procurement spending and defense technology objectives—do not provide a direct link toward meeting the goal, thus making it difficult to assess progress. DOD’s performance report does not reflect concerns raised within the Department about the adequacy of its strategy and institutional processes for transforming forces. We noted in a prior report that a transformation strategy is presented in the former Secretary of Defense’s 2001 Annual Report to the President and the Congress. However, the strategy does not clearly identify priorities or include an implementation plan and outcome- related metrics that can be used to effectively guide the transformation of U.S. forces and assess progress. This topic is currently being reviewed by the new administration. As we reported, a 1999 Defense Science Board study had recognized the need and called for such an explicit strategy, or master plan; a roadmap; and outcome-related metrics to assess progress. Also, a joint military service working group identified a need for a comprehensive strategy as an issue that the 2001 Quadrennial Defense Review must address. Further, the Defense Science Board, Joint Staff and unified command officials, joint military service working group, and others raised concerns about the ability of DOD’s current institutional processes to turn the results of transformation initiatives into fielded capabilities in a timely manner. These processes—which include DOD’s planning, programming, and budgeting system and weapons acquisition system— focus on near- or mid-term requirements and do not foster the timely introduction of new technologies to operational forces. For each of the supporting performance measures, DOD’s report describes data collection and verification measures. However, our work in this area has not addressed the reliability of DOD’s data. Thus, we are unable to comment on the extent to which the reported performance information is accurate. DOD’s performance measures do not adequately indicate its progress toward achieving the outcome of ensuring that U.S. military forces are adequate in number, well qualified, and highly motivated. Therefore, we cannot judge the level of progress DOD has made in this area. DOD’s performance goal for this outcome is to recruit, retain, and develop personnel to maintain a highly skilled and motivated force capable of meeting tomorrow’s challenges. DOD’s performance measures still do not fully measure how well DOD has progressed in developing military personnel or the extent to which U.S. military forces are highly motivated. Although DOD’s report identifies specific goals for recruiting and retention, the Department does not include human capital goals and measures aimed specifically at tracking the motivation or development of its personnel. The level of progress toward meeting specific targets in the areas of enlisted recruiting and retention is mixed. The Air Force failed to meet its targets for first- or second-term retention, and the Navy did not meet its target for first-term retention. While most reserve components met or came in under their targets for enlisted attrition, the Army Reserve did not stay within its attrition target. On the positive side, the services met or exceeded their targets for enlisted recruiting and recruit quality. However, DOD’s report showed that the target for active enlisted recruiting was revised downward, enabling DOD to meet a goal it might otherwise have been unable to achieve. If such adjustments become commonplace, the same kind of force shaping problems that resulted from the intentional restriction of new accessions during the 1990s drawdown could result. Still other targets, such as for enlisted retention, are set at such aggregate levels that they could mask variations in retention by occupational area and skill levels, which would limit achieving the outcome of ensuring that U.S. military forces are adequate in number, well qualified, and highly motivated. As such, the enlisted retention goal provides only a partial measure of the military’s ability to retain adequate numbers of personnel. DOD’s performance report realistically identified the likelihood of continued challenges in recruiting for the military services and in retention for the Navy and the Air Force. But it did not devote significant attention to identifying specific reasons why DOD missed certain targets. Likewise, with the exception of the enlisted recruiting area, the report did not identify specific planned actions that DOD or the services will take to assist them in meeting future performance targets. For enlisted recruiting, however, the services identified several actions to help them cope with this challenge. For example, the Army and the Navy have increased funding for recruiting and plan to offer enlistment bonuses of up to $20,000. They also plan to continue allowing recruits to choose a combination of college fund and enlistment bonuses. The Army plans to experiment with innovative ways to expand the market for new recruits through programs like College First and GED Plus. And, the Air Force has instituted a college loan repayment program, increased enlistment bonuses to $12,000, and added more recruiters. With regard to retention, the Department’s performance report discusses generally the difficulties of the current retention environment and the fiscal year 2000 enlisted retention challenges. However, the report contains little clear articulation of specific actions or strategies being taken to improve future retention. For example, the report noted that the Navy has established a Center for Career Development that is chartered to focus on retention, providing the fleet the necessary tools to retain Navy personnel. However, the performance report does not elaborate on what those tools are or how they are being enhanced. Similarly, the Air Force indicated that it held two retention summits in fiscal year 2000 and that initiatives resulting from those summits will facilitate achievement of fiscal year 2001 retention targets. However, the report does not cite specific initiatives that would be taken or when they would be put into place. DOD expects that fiscal year 2001 will continue to present retention challenges for the services’ reserve components. The report, however, did not identify any specific actions or initiatives that would be taken to help address the challenge. Finally, for each of its performance measures, DOD’s report describes the data flow used to produce DOD’s assessment. The procedures used to collect, verify, and validate the data cited in the report provide reasonable assurance that the information is accurate and reliable. The level of progress that DOD has made toward the outcome of maintaining combat readiness at desired levels is unclear. DOD’s performance goals for this outcome are to maintain trained and ready forces and have strategic mobility. Although DOD has met some performance measure targets for both goals, other targets are incomplete, have been lowered, or have not been met, thus making an accurate assessment of progress difficult. For example, DOD reported meeting its force-level targets for the performance goal of maintaining trained and ready forces. However, the targets do not provide a complete picture of the forces needed to respond to a full spectrum of crises, to include fighting and winning two major theater wars nearly simultaneously.DOD’s metric includes only combat forces for each service, and not the necessary support forces.