Defense Management: DOD Needs to Address Inefficiencies and Implement Reform across Its Defense Agencies and DOD Field Activities
Highlights
What GAO Found
The Department of Defense (DOD) does not comprehensively or routinely assess the continuing need for its defense agencies and DOD field activities (DAFAs). DOD was statutorily required to review the services and supplies each DAFA provides to ensure there is a continuing need for each and that the provision of services and supplies by each DAFA, rather than by the military departments, is more effective, economical, or efficient. A DOD directive requires the recording of the review. DOD previously issued biennial reports to Congress to record its review. Since 2012, DOD has relied on existing processes to fulfill the requirement; such as the annual budget process and the day-to-day management of the DAFAs. However, DOD did not provide sufficient evidence that these processes satisfy the statute. For example, while DOD reviews the DAFAs during the budget process, it does not specifically review the provision of services by the DAFAs rather than the military departments. Further, DOD does not have internal guidance that provides clear direction for conducting and recording its response to the statutory requirement. Without such guidance, DOD is limited in its ability to clearly define or target the scope of its reviews and any resulting reports. As such, DOD and congressional decision makers may not have reasonable assurance of a continuing need for the DAFAs, or that the provision of services and supplies is effective, economical, and efficient.
There is fragmentation and overlap within the DAFAs that provide human resources services to other defense agencies or organizations within DOD. At least six DOD organizations, including three DAFAs, perform human resources services for other parts of the department. One DAFA receives human resources services from all six organizations. This has resulted in negative effects, such as inconsistent performance information regarding hiring, fragmented information technology systems, and inefficiencies associated with overhead costs. For example, DOD officials stated that there are over 800 fragmented information technology systems used to store and record training records across the department, which are costly to maintain. DOD established a reform team to reduce inefficiencies within this business function. However, the team lacks comprehensive information on overhead costs that could guide reform and does not have time frames or deliverables for completing certain reform initiatives. With consistent human resource performance information, comprehensive information on overhead costs, and clear time frames in place, the team would be better positioned to thoroughly assess the department's system for human resources service delivery and develop and implement long-term solutions for better coordination or consolidation of this function.
DOD has taken some steps to monitor and evaluate the results of key efficiency initiatives that affect the DAFAs. However, DOD has not always established baselines or performed ongoing monitoring of its initiatives. Further, DOD has focused on whether steps have been taken, rather than outcomes achieved. For example, DOD did not evaluate whether a prior efficiency initiative called the Core Business Process Review achieved any of its intended savings or led to expected efficiencies. Without ensuring that efficiency initiatives are fully monitored and evaluated against established baselines over time, DOD lacks a systematic basis for evaluating whether its various initiatives have improved the efficiency or effectiveness of its programs or activities.
Why GAO Did This Study
DOD spends billions of dollars annually to maintain business functions that support the warfighter. Many of these functions are performed by the DAFAs—DOD's 19 defense agencies and 8 field activities intended to provide department-wide consolidated support functions. GAO has previously identified instances of fragmentation, overlap, and duplication among the DAFAs.
Senate Report 115-125, accompanying a bill for the National Defense Authorization Act for Fiscal Year 2018, included a provision that GAO review the DAFAs. This report evaluates the extent to which (1) DOD has assessed the continuing need for each DAFA; (2) any overlap or fragmentation among the DAFAs that provide human resources services has affected service delivery; and (3) DOD has monitored and evaluated the results of its efficiency initiatives that affect the DAFAs. GAO reviewed legal requirements, assessed prior DOD reports, and analyzed DOD's human resources activities and documentation tracking past efficiency initiatives.
Recommendations
GAO is making five recommendations, including for DOD to develop internal guidance to conduct and record its reviews of DAFAs; collect consistent performance information and comprehensive overhead cost information; establish time frames and deliverables for key reform efforts; and ensure routine and comprehensive monitoring and evaluation of ongoing efficiency initiatives. DOD concurred with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should ensure that the Chief Management Officer (CMO) develops internal guidance that defines the requirements and provides clear direction for conducting and recording reviews of the Defense Agencies and DOD Field Activities in response to 10 U.S.C. § 192(c). This guidance, which could be similar to the guidance that exists for assessments of the combat support agencies, should reflect the key elements of quality evaluations. (Recommendation 1) |
DOD concurred with this recommendation and noted planned actions. In its written comments, DOD stated that the National Defense Authorization Act for Fiscal Year 2019 gives the CMO additional specific authorities and substantially rewrites the requirements of section 192(c). In April 2019, DOD submitted to Congress its initial plan for business operations reform, which provided an initial plan, schedule, and cost estimate for conducting reforms within the enterprise business operations across all organizations and elements of the department. The plan describes in detail the Office of the CMO's responsibilities for conducting efficiency and effectiveness reviews of the Defense Agencies and DOD Field Activities in order to identify duplicative activities. Further, in August 2019, in response to this recommendation, DOD issued guidance for reviews of the DAFAs. The guidance reflects key elements of quality evaluations including: (1) requiring frequent data-driven reviews that would support high quality, sufficient, and appropriate data for their evaluations; (2) establishing a clear criteria for selecting DAFAs to review, and (3) ensuring results of the review are relevant to leadership stakeholders. DOD's actions meet the intent of this recommendation and it is considered closed as implemented.
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| Department of Defense | The Secretary of Defense should ensure that the CMO, with input from the human resources management team, requires that all DOD human resources providers adopt consistent time-to-hire measures, as one process for assessing performance. (Recommendation 2) |
DOD concurred with this recommendation and noted planned actions. In April 2024, DOD provided documentation that showed DOD has taken steps to develop a consistent time-to-hire performance measure that is required across the department. Specifically, DOD's Defense Civilian Personnel Advisory Service issued a memorandum in February 2024 requiring all human resources providers to report time-to-hire in accordance with a February 2020 memorandum from the Office of Personnel Management (OPM). That OPM memorandum detailed two time-to-hire measures with specific time frames for beginning and ending the measurement of time-to-hire. In addition, DOD provided data that demonstrates it is monitoring these required time-to-hire measures reported by its human resources services providers in Advana, the department's data analytics platform. These steps help ensure that all DOD human resources providers are reporting a consistent time-to-hire measure across the department. Therefore, this recommendation has been addressed.
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| Department of Defense | The Secretary of Defense should ensure that the CMO, through the human resources management reform team, identifies time frames and deliverables for identifying and adopting optimal IT solutions for human resources and fully assessing, identifying, and implementing the most effective and efficient means of human resources service delivery. (Recommendation 3) |
DOD concurred with this recommendation and noted planned actions. In April 2024, DOD provided documentation that detailed steps taken by DOD to address this recommendation. Specifically, the department identified deliverables and time frames for implementation of the Defense Civilian Human Resources Management System (DCHRMS). According to DOD, DCHRMS is a cloud-based IT system that will provide a single IT solution for civilian human resources management and will replace at least six older human resources IT systems that providers used. In addition, according to DOD, the implementation of DCHRMS will standardize and streamline personnel processes. Doing so would be consistent with the original human resource management reform team's goal of implementing the most effective and efficient means of human resources service delivery. In addition, DOD is taking steps to track the performance of its human resources service providers through Advana, its data analytics platform, and through measures related to effectiveness and efficiency, such as time-to-hire. As the department has assessed its human resources service delivery and identified optimal means of human resources management and identified time frames and deliverables for full implementation of its human resources IT system, this recommendation has been addressed.
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| Department of Defense | The Secretary of Defense should ensure that the CMO, through the human resources management reform team, collects information on the overhead costs charged by all DOD human resources service providers to assist in determining the most effective, economical, and efficient model of human resources service delivery within the department. (Recommendation 4) |
DOD concurred with this recommendation and noted planned actions. In April 2024, DOD provided documentation, which stated that the department supports closing this recommendation as no longer valid. DOD noted changes in both statute and in the scope of the department's reform efforts as reasons the recommendation is no longer valid, and we agree with this assessment. At the time we made this recommendation, the roles and responsibilities of the CMO position included carrying out business reforms focused on cost savings and achieving efficiencies. Since the disestablishment of the CMO in January 2021, DOD has adopted a new approach to performance improvement efforts pursuant to 10 U.S.C. Section 125(a). This new approach places less emphasis on financial savings as the primary indicator of progress in reform efforts, and instead considers other performance indicators to determine progress. Within the specific area of human resource management, DOD's reform efforts are focused on specific performance improvements, such as improving civilian talent management by improving hiring timeliness and reducing the associated risks resulting from hiring and retention inefficiencies. DOD further stated that reform efforts have significantly changed since they were led by the CMO and that collecting information about overhead costs is no longer within the scope of human resources-related reform efforts. We agree that significant changes have occurred in DOD's organization and, more importantly, in the focus of DOD's reform efforts. As the focus of the department's reform efforts have changed from that of seeking cost savings to improvements in performance, we would most likely not make the same recommendation today and we are considering this recommendation as no longer valid. We will continue to monitor DOD's progress in carrying out business reforms as part of our Business Transformation High-Risk Area and related work.
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| Department of Defense |
Priority Rec.
The Secretary of Defense should ensure that the CMO routinely and comprehensively monitors and evaluates ongoing efficiency initiatives within the department, including those related to the reform teams. This monitoring should include establishing baselines from which to measure progress, periodically reviewing progress made, and evaluating results. (Recommendation 5) |
DOD concurred with our recommendation. In January 2021, the position of CMO was disestablished and responsibilities for the department's reform efforts were transferred to the Performance Improvement Directorate within the Office of Director of Administration and Management (DA&M). In October 2022, the Deputy Secretary of Defense issued the department's new Performance Improvement Framework, which provides a consistent methodology to define, identify, track, and report on existing and planned opportunities for performance improvement across DOD, including those that enable cost savings. In November 2022, DA&M issued a memorandum instructing principal staff assistants and component heads to build an authoritative repository of performance improvement initiatives, including establishing a baseline to document current and prior year initiatives that had been overseen by the CMO. Further, the memorandum announced the establishment of an authoritative performance management executive analytics platform, known as Pulse, to monitor implementation of performance improvement initiatives. DOD provided results from its data collection on new performance improvement initiatives as part of DOD's budget overview submission for fiscal years 2024 and 2025. DOD has also been preparing an annual report on its performance improvement efforts required by 10 U.S.C. 125a. As a part of this report, DOD is required to report on its activities and accomplishments pursuant to that section. In addition, the Deputy Secretary of Defense previously designated certain performance improvement initiatives as priority cross-cutting performance improvement initiatives and directed the Defense Performance Improvement Council to assess those initiatives on a quarterly basis. As of March 2024, DOD had been developing its methodology for assessments of these crosscutting initiatives but has not yet conducted them. These efforts represent important steps in implementing this recommendation. To fully demonstrate implementation, DOD should document baselines and demonstrate progress made on performance improvement initiatives through its annual reports and quarterly assessments.
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