Defense Budget: Independent Review Is Needed to Ensure DOD's Use of Cost Estimating Tool for Contingency Operations Follows Best Practices
Highlights
Since the September 2001 terrorist attacks, Congress has provided about $800 billion as of July 2008 to the Department of Defense (DOD) for military operations in support of the Global War on Terrorism (GWOT). GWOT budget requests have grown in scope and the amount requested has increased every year. DOD uses various processes and the Contingency Operations Support Tool (COST) to estimate costs for these operations and to develop budget requests. GAO assessed (1) how DOD uses COST and other processes to develop GWOT budget requests and (2) what actions DOD has taken to ensure COST adheres to best practices for cost estimation. GAO interviewed DOD officials and others to determine how the services develop GWOT budget requests using COST and other processes. GAO also used its Cost Assessment Guide as criteria for best practices for cost estimation.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To ensure that DOD budget requests for GWOT are based on a sound cost estimation process, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to arrange for an independent review of COST against best practices for cost estimation. | While DOD concurred with our recommendation, the agency comments did not say that an independent review of COST would be performed and that a prior review by the Air Force was sufficient. However, DOD subsequently performed a review of the COST model. The department reviewed the cost estimates generated by the COST model and the actual expenditures for Operation Unified Protector. The study, completed in October 2011, found that COST model estimation was accurate within a 5% range of the actual execution for this operation. However, the review was not independent as it was completed by department officials and others responsible for the creating and maintaining the model. Officials... stated that an independent review against best practices for cost estimation was not planned, therefore we consider this recommendation closed not implemented.
View More |
| Department of Defense | Based on that review, and taking into consideration how each service uses COST, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to consider options for refining COST, determine the appropriate items or types of costs for which COST should be applied, and identify methods to be used when COST is not appropriate. | The Department uses every opportunity to refine and improve the Contingency Operations Support Tool (COST) model for comprehensiveness and accuracy. For example, during a supplemental budget build OSD Comptroller, the Joint Staff, Institute for Defense Analyses, and Service personnel review the model results and critique assumptions, factors, and outputs of the COST model. The results of the review are used to adjust the Supplemental amounts and for initiating improvements to the COST model. In addition, annual training involving all COST users is conducted before supplemental requests are developed. The feedback and exchange between the attendees (Services, OUSD(C), the Joint Staff and...
|