2.2: Military
Ensure Military Capabilities and Readiness Other Information:
U.S. operations in Iraq and Afghanistan have seen increased deployments for military personnel, as well as put significant
wear and tear on military equipment, and it is unclear when these demands will diminish. The decision to expand U.S. force
levels in Afghanistan will place additional demands on DOD, including requirements for new types of equipment, additional
facilities, and specialized training. Beyond these ongoing operations, DOD is confronted with a rapidly evolving national
security environment exemplified by nonstate actors such as terrorists and pirates, as well as cyber attacks and other emerging
threats. Also, global financial challenges and environmental changes could lead to greater instability and conflicts that
could involve U.S. forces. To meet the continuing demands of current operations and adjust to evolving security needs, DOD
is pursuing broad-based initiatives to grow, modernize, and transform its forces to address a more diverse range of threats.
However, the nation’s fiscal challenges make it increasingly urgent that the department manage and prioritize its resources
well. Budgetary pressures: DOD’s budget represents about half of the federal government’s discretionary spending, and the
level of resources provided to it have increased significantly in recent years. For fiscal year 2010, Congress set aside about
$661 billion for DOD, including about $534 billion for base needs and about $127 billion for contingency operations. (See
fig. 37.) As of December 2009, DOD had received about $1 trillion since 2001 to support contingency operations, including
those in Iraq, Afghanistan, and elsewhere. Despite the significant resources being devoted to defense, DOD will likely face
mounting budgetary pressures over the coming 5 years due to the broader fiscal challenges the nation faces: As the growth
of defense budgets slows, „„DOD will likely be forced to manage trade-offs among operations, personnel, and the development
and acquisition of major weapon systems. Contingency operations will likely continue to require a considerable share of future
defense budgets; the magnitude of the costs will depend on factors such as the scope and duration of the operations and the
related, but as yet unknown, cost to rebuild the force in the aftermath. While it deals with the demands of „„continuing large-scale
operations, DOD must prepare for a range of evolving threats. This preparation includes efforts to become more agile—such
as with the Navy’s development of a multimission littoral combat ship—as well as expanding the use of unmanned systems. Personnel
costs have risen dramatically, partly because the Army and Marines have become larger to meet operational demands, but costs
have also been driven by increases in basic pay, housing allowances, recruitment and retention bonuses, and incentive pay
and allowances. Reflecting similar trends outside of „„the military, DOD’s health care costs are increasing rapidly and have
grown from $17.5 billion in fiscal year 2000 ($21.95 billion adjusted for inflation) to $47.4 billion in fiscal year 2010
budget authority. This cost growth, adjusted for inflation, is greater than 115 percent ($25 billion). The full human costs
of ongoing conflicts are unknown but will likely be borne for many years to come; by 2009, more than 30,000 servicemembers
had been wounded, a number that continues to climb with the ongoing operations. Recapitalizing aging „„ equipment will also
compete for DOD resources. Since 2003, DOD’s portfolio of major defense acquisition programs has grown from 77 to 96 programs;
and its investment in those programs has grown from $1.2 trillion to $1.5 trillion (in fiscal year 2009 dollars). These programs
include new weapons like the Joint Strike Fighter and Virginia-class submarine and upgrades to others, such as the Apache
and Blackhawk helicopters. Improving acquisition outcomes will be crucial, as DOD has been unable to consistently achieve
its goals to deliver weapon systems within the estimated time and costs. The consequences of this failure are significant:
Hundreds of billions of dollars in cost growth for DOD’s portfolio of major defense acquisition programs, average delays in
delivering capabilities of almost 2 years, and an erosion of the buying power of the defense dollar that results from fielding
more expensive systems in fewer numbers. Coordination and integration activities: A growing realization of the limits of traditional
military power to combat increasingly unconventional threats like economic instability or pandemic disasters has highlighted
the need for U.S. government agencies to improve the coordination and integration of national security activities. Federal
agencies will need to create mechanisms that coordinate national security activities across the federal government, such as
developing overarching strategies to guide the planning and execution of missions or sharing and integrating national security
information across agencies. Even when DOD does not take a lead role in future operations, prudent investment will be needed
in key capabilities— such as cyber operations; unmanned systems; intelligence, surveillance, and reconnaissance; and nonlethal
weapons. GAO’s work will examine the federal government’s investments in these key capabilities. This work will also assess
approaches for addressing duplication and overlap across national security programs and activities, such as integrating service
delivery, consolidating programs, or setting up better coordination approaches to ensure that agencies’ strategic goals are
mutually reinforcing. Nuclear weapons stockpile: The National Nuclear Security Administration (NNSA) is responsible for producing
nuclear weapons and naval reactors, as well as preventing the proliferation of weapons of mass destruction. The legislatively
mandated Nuclear Posture Review, completed in April 2010, recognizes that in the years ahead, new approaches will be vital
to ensuring that the nation’s nuclear weapons stockpile continues to be safe and reliable without additional underground testing.
Moreover, maintaining and refurbishing the stockpile as it ages will require a modern, efficient, and secure research and
development and production infrastructure. Meeting these challenges will also require NNSA to have effective human-capital
strategies to respond to an aging contractor and federal workforce. Our work in the coming years will help ensure that NNSA
achieves effective results from the more than $6 billion per year spent on these efforts, with a particular focus on NNSA’s
efforts to improve its project management and contract administration—an area we have identified as being at high risk for
fraud, waste, and abuse. Business operations: Importantly, DOD has an opportunity over the next few years to take concrete
steps to correct long-standing weaknesses in its business operations, as well as free up resources that can better position
the department to respond to changing economic conditions and future threats. DOD is taking some positive steps to formally
establish business leadership positions and institutions so that defense business operations not only deliver the outcomes
expected under the terms of DOD’s overarching strategic plan, the Quadrennial Defense Review, but also respond and adapt to
emerging needs and unexpected problems. In addition, the department will need to continue to take steps to meet the congressionally
mandated organizational changes designed to increase DOD’s emphasis on acquisition improvements, such as cost estimating,
program performance, systems engineering, and developmental testing. These changes, if implemented consistently, could improve
the department’s return on investment in this area. Lasting reform in defense business operations will require DOD to follow
through by setting priorities, strengthening management accountability, executing plans, implementing policy, gauging actual
progress against goals, and making adjustments as needed. Major weapon systems acquisition: One area where DOD needs to make
real progress is in improving its approach to acquiring major weapon systems. Total acquisition cost growth on DOD’s fiscal
year 2008 portfolio of major programs reached nearly $300 billion over initial estimates. DOD’s ability to successfully adapt
to budgetary constraints will depend in great measure on its ability to better manage weapon systems acquisition. At the program
level, programs are often begun and continued without enough knowledge about a system’s requirements, technology, and design.
Lacking such knowledge, managers rely on assumptions that are consistently too optimistic, exposing programs to significant
and unnecessary risk and, ultimately, cost growth and delays. Cost overruns lead to fewer resources for other priorities and
reduced buying power for DOD, and schedule delays mean that the warfighter does not get critical capabilities when needed
and therefore relies on legacy systems or goes without. The Congress and DOD have recently addressed many of these issues
through acquisition reform legislation and changes to acquisition policy. However, many efforts at acquisition reform have
been tried in the past without much success. Sustained leadership and consistent implementation of these recent reforms are
necessary if DOD hopes to improve its weapon system program outcomes. Supply chain network and support infrastructure: Improving
management of DOD’s vast and complex supply chain network and support infrastructure represents opportunities to increase
efficiency, improve effectiveness, reduce waste, and free up resources for other priorities. For example, DOD officials have
estimated that the level of investment in the department’s supply chains is more than $150 billion a year, and the value of
its spare part inventories has grown by tens of billions of dollars in recent years. Yet, the department continues to have
substantial unneeded inventory. Furthermore, DOD faces challenges in managing its portfolio of facilities, halting facilities’
degradation, and reducing unneeded infrastructure to save money. DOD also faces challenges in relocating over 120,000 personnel
to new bases, which will prompt significant new construction. As a result, DOD’s budget will be even further squeezed as it
attempts to complete all required construction, maintain facilities to avoid degradation, and ensure adequate installation
support for DOD’s mission and the quality of life for DOD personnel and their families. DOD contractor-supported missions:
DOD’s ongoing reliance on contractor-provided services to support its missions makes effective management and oversight of
these contracts critical. DOD obligated about $207 billion on contracts for services in fiscal year 2009.32 At installations
within the United States, contractors provide base operations support (such as food and housing) and other administrative
and logistical support. In Iraq and Afghanistan, where DOD reported that more than 217,000 contractors were supporting its
efforts as of September 30, 2009, contractors provide not only traditional logistical support—such as base operations support
and the maintenance of weapon systems—but also intelligence analysis and interpreters who accompany military patrols. This
reliance on contractors will continue to present several challenges for DOD, such as: determining which functions and „„activities
should be contracted out and which should not to ensure institutional capacity; developing a total workforce strategy „„to
address the appropriate mix of contractor and government personnel; identifying and distinguishing the roles „„and responsibilities
of contractors and civilian and military personnel; and ensuring appropriate oversight, including „„addressing risks, ethics
concerns, and surveillance needs. GAO’s recent and forthcoming work on these challenges will support congressional oversight
and assist DOD in determining the appropriate role of contractors in supporting the military in carrying out its mission.
Human-capital management: In addition to contractors, DOD needs effective management of its total workforce of over 3 million
active duty, guard, reserve, and civilian personnel to maximize their value in achieving its mission. The cornerstones of
human-capital management are leadership; strategic planning; acquiring, developing, and retaining talent; and creating resultsoriented
organizational cultures. However, DOD faces numerous challenges, including competition with the private sector, in making
sure that it has the right number of people with the right skills. Also, social and behavior factors, such as incidents of
sexual assault or domestic violence, can undermine core values and negatively affect readiness. Taken together, the national
security challenges are immense, and our work can help the Congress and federal leaders as they seek to reconcile competing
demands, strengthen interagency collaboration, and improve defense business operations to make the most of the nation’s investment
in national security. Specifically, GAO has established the following performance goals and key efforts:
Indicator(s):
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