National Defense:

Maximizing DOD's Untapped Potential to Improve Business Performance

GAO-10-184CG: Published: Oct 14, 2009. Publicly Released: Oct 14, 2009.

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This speech was given by the Acting Comptroller General before the Department of Defense Performance Breakthrough Convention in Lansdowne, Virginia on October 14, 2009. As is the case for other federal agencies, the Nation's fiscal situation has significant implications for DOD. Specifically, the Department faces competing demands for resources and a number of internal fiscal pressures as it tries to support ongoing operations, rebuild readiness, and prepare for the future. While these circumstances are challenging, they also underscore the need for constructive change.

Given the reality of growing federal budgetary constraints, it is essential that DOD become more efficient and put its resources to better use. Clearly, DOD is unique among federal agencies due to its size and budget as well as the complexity of its organizational structure and mission. Not only does its budget represent a little over half of the entire federal government's discretionary spending, the level of resources provided to the Department has increased significantly over time. For fiscal year 2009, Congress provided about $664 billion for DOD, including about $513 billion for base needs and about $151 billion for contingency operations. And, since 2001, DOD has received a total of about $893 billion to support contingency operations, including military operations in Iraq, Afghanistan, and elsewhere around the world. Notwithstanding the external pressures, DOD faces its own near-term and long-term internal fiscal pressures as it attempts to balance competing demands from within. Let me touch on a few areas we have highlighted for the Congress and the new administration. First, ongoing operations will continue to require substantial amounts of resources. Second, extended military operations have taken a toll on readiness and rebuilding the force will undoubtedly have a big price tag. Third, personnel and health care costs are increasing. Fourth, cost growth in weapon systems programs remains a significant problem. Now let me turn to a few key examples of where DOD can tap its potential to improve business operations, save money, and optimize support to the warfighter: (1) weapon systems acquisition management; (2) inventory management; (3) contract management; and (4) financial management. In so many areas, DOD has the ability to achieve tangible and sustainable outcomes that will ultimately provide better support to the war fighter. Success will require strong leadership that sets the tone, takes decisive action, and assumes accountability for results. Success will also depend on sound plans that set clear priorities and measurable goals as well as results-oriented performance measures that can be used to gauge progress and make adjustments. Truly, DOD will need to approach the transformation of its business operations with the same level of intensity as it plans and carries out its military operations.

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