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Defense Headquarters: DOD Needs to Reevaluate Its Approach for Managing Resources Devoted to the Functional Combatant Commands

GAO-14-439 Published: Jun 26, 2014. Publicly Released: Jun 26, 2014.
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Highlights

What GAO Found

GAO analysis of the resources devoted to the Department of Defense's (DOD) functional combatant commands shows substantial increases in authorized positions and costs to support headquarters operations. Specifically, the number of authorized positions across the commands grew from 5,731 in fiscal year 2004 to 10,515 in fiscal year 2013. According to DOD officials, recent and emerging missions have driven up demands at all three functional combatant commands and driven the growth in authorized personnel. In addition, costs to support headquarters operations also increased substantially at the functional combatant commands. Data, in constant fiscal year 2013 dollars, show that the combined costs to support headquarters operations for the commands increased from about $296 million in fiscal year 2001 to more than $1.236 billion in fiscal year 2013. Authorized positions and costs to support headquarters operations at the service component commands supporting the functional combatant commands also increased. Specifically, authorized positions grew from about 6,675 in fiscal year 2002 to about 7,815 in fiscal year 2013, and costs to support headquarters operations increased from about $614 million in fiscal year 2008 to about $657 million in fiscal year 2013.

DOD's directed reductions to headquarters do not include all resources at the commands, which may affect DOD's ability to achieve significant savings in headquarters operations. In 2013, DOD directed reductions to management headquarters resources in an effort to streamline the department's management. However, GAO found that the department did not have a clear or accurate accounting of the resources being devoted to management headquarters to use as a starting point to track reductions. Officials noted that DOD relied on data self-reported by the commands, and GAO found that these data were potentially inconsistent and did not include the totality of headquarters resources. Specifically, GAO found that less than a quarter of the positions at the functional combatant commands are considered to be management headquarters even though many positions appear to be performing management headquarters functions such as planning, budgeting, and developing policies. As such, more than three quarters of the headquarters positions at the functional combatant commands are potentially excluded from DOD's directed reductions. However, the department does not have any plans to reevaluate the baseline on which the reductions are based, in part because it does not have an alternative source for complete and reliable data. GAO has also concluded that restructuring efforts must be focused on clear goals and consolidation initiatives grounded in accurate and reliable data. Section 904 of the National Defense Authorization Act for Fiscal Year 2014 requires that DOD develop and submit a plan for streamlining management headquarters by June 2014. Unless DOD reevaluates its decision to focus reductions to management headquarters and establishes a clearly defined and consistently applied starting point on which to base reductions, the department will be unable to track and reliably report its headquarters reductions and ultimately may not realize significant savings.

Why GAO Did This Study

DOD operates three functional combatant commands, which provide special operations, strategic forces, and transportation. GAO was mandated to review personnel and resources of these commands in light of plans announced by DOD to reduce headquarters. This report (1) identifies the trends in resources devoted to the functional combatant commands and their service component commands and (2) evaluates the extent to which DOD's reductions to headquarters could result in cost savings.

GAO analyzed data for fiscal years 2001 through 2013 on authorized positions and costs to support headquarters operations for the functional combatant commands and their service component commands. GAO also obtained documentation such as guidance and budget documents and interviewed officials regarding the commands' approach for implementing reductions to headquarters.

Recommendations

GAO recommends that DOD (1) reevaluate the decision to focus reductions on management headquarters to ensure meaningful savings, (2) set a clearly defined and consistently applied starting point as a baseline for the reductions, and (3) track reductions against the baselines in order to provide reliable accounting of savings and reporting to Congress. DOD partially concurred with the first recommendation, questioning, in part, the recommendation's scope, and concurred with the second and third recommendations. GAO continues to believe the first recommendation is valid, as discussed in the report.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense In order to improve the management of DOD's headquarters-reduction efforts, the Secretary of Defense should reevaluate the decision to focus reductions on management headquarters to ensure the department's efforts ultimately result in meaningful savings.
Closed – Implemented
DOD partially concurred with our recommendation, stating that this department-wide recommendation would garner greater savings but did not provide plans on how it planned to implement the recommendation. Partly as a result of GAO's work, Congress required reductions to resources beyond headquarters in section 346(a) of the National Defense Authorization Act for Fiscal Year 2016. Specifically, Congress required DOD to implement a plan to achieve not less than $10 billion in cost savings from its headquarters, administrative, and support activities, beginning with fiscal year 2015 and ending with fiscal year 2019. In response to this mandate and consistent with GAO's recommendation, DOD identified four categories of efficiency-related initiatives in addition to major headquarters activities: service requirement review boards, information technology optimization, business operations improvements, and defense resale optimization. In comments on subsequent GAO reports on headquarters (GAO-17-726, GAO16-286), DOD has also noted an expansion beyond headquarters to find efficiencies towards this cost savings goal. DOD's efforts are consistent with the intent of this recommendation.
Department of Defense
Priority Rec.
In order to improve the management of DOD's headquarters-reduction efforts, the Secretary of Defense should set a clearly defined and consistently applied starting point as a baseline for the reductions.
Closed – Implemented
The DOD concurred with our recommendation to set clearly defined and consistently applied starting point as a baseline for the reductions. To support the fiscal year 2018 budget request, DOD added 53 program element codes in the Future Years Defense Program that align with its definition of headquarters-related spending and establish a clearly defined and consistently applied baseline for management headquarters activities as GAO recommended. In May 2018, DOD reported that this re-baselining effort establishes both an authoritative management headquarters manpower and operating cost baseline for the purposes of reporting and tracking. DOD also reported that measuring the workforce baseline was an essential foundational step in determining the overall headquarters costs. These efforts by the department are consistent with the intent of this recommendation.
Department of Defense In order to improve the management of DOD's headquarters-reduction efforts, the Secretary of Defense should track reductions against the baselines in order to provide reliable accounting of savings and reporting to Congress.
Closed – Implemented
DOD concurred with our recommendation to track headquarters reductions against clearly defined baselines. To support the fiscal year 2018 budget request, DOD added 53 program element codes in the Future Years Defense Program that align with its definition of headquarters-related spending and establish a clearly defined and consistently applied baseline for management headquarters activities as GAO recommended. In addition, in May 2018, DOD reported that this re-baselining effort establishes both an authoritative management headquarters manpower and operating cost baseline for the purposes of reporting and tracking. The report also indicates that the information provided with the fiscal year 2018 budget will represent an official consistent baseline going forward upon which the department can reliably track and report future reductions in management headquarters. These efforts by the department are consistent with the intent of this recommendation.

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Civilian employeesCost analysisDefense contingency planningDefense cost controlDefense economic analysisDefense operationsDefense procurementMilitary forcesMilitary operationsMilitary personnelTransportation