Defense Management Issue Area Plan--Fiscal Years 1997-99

Published by the Government Accountability Office on 1997-06-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United   States General   Accounting   Office

GAO            National Security and International
               ,4ffairs Division

June 1997
               Defense Management
               Issue Area Plan
               Fiscal Years 1997-99


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research and uses hundreds of databases or creates its own when
information is unavailable elsewhere.

To ensure that GAO'S resources are duected toward the most important
issues facing Congress, each of GAO'S 33 issue areas develops a strategic
plan that describes the significance of the issues it addresses, its
objectives, and the focus of its work. Each issue area relies heavily on
input from congressional committees, agency officials, and subject-matter
experts in developing its strategic plan.

Defense managers face many challenges as they strive to stream line
operations, particularly those associated with the Department of Defense
(DOD) logistics-related business activrties, while continuing to accomplish
their required m issions. DOD business activities refer to operations and
m frastructure support functions such as depot maintenance, the purchase
of parts and supplies for inventory, storage and disposal, and
transportation. These activities will absorb a major share of DOD'S budget
for fiscal year 1997-perhaps as much as $80 billion. To fund acquisitions
for weapon systems modernization, DOD is seeking a reduction of
$20 billion annually in these kinds of costs. Initiatives to achieve DOD'S
reduction objective include privatization, acquisition reform , technology
msertion, organizational stream lining and consolidation, management
process reengineering, base and facility closures, personnel reductions,
inventory reductions, and private sector use of facilities.

GAO'S overall objectives for Defense Management issues are to improve the
management and operational effectiveness and efficiency of DOD'S
business activities and facilities and to support congressional needs
regarding high interest programs such as environmental cleanup and
compliance. Our focus will be on the implementation and effectiveness of
DOD'S cost reduction initiatives. Principal issues to be examined in the
Defense Management area include

Page 1                                                           GAO/UP-97-4

l inventory management practices and efforts to reduce inventory levels;
. depot maintenance excess capacity costs and workload allocations
  between the public and private sector;
9 opportunities to streamline and improve the efficiency and effectiveness
  of defense transportation systems and processes;
. the transition of former military bases to civilian use;
. DOD'S environmental compliance and cleanup efforts; and
l financial and information management systems and processes.

    In the pages that follow, we describe our objectives and planned work on
    these issues.

    Because unanticipated events may affect this plan, GAO'S planning process
    allows for updating and flexibility to respond to new emerging issues. If
    you have any questions or suggestions about this plan, please call me at
    (202) 512-8412.

    David R. Warren
    Director, Defense Management Issues

    Page 2                                                         GAO/UP-97-4
Table I: Key Issues
Table II: Planned              6
Major Work
Table III: GAO

                      Page 3
“F-’Table I: Key Issues

   Issue                                           Significance
   Business Activities and Facilities              Infrastructure costs accounted for $152 billron (59 percent) of DOD’s fiscal year 1997
   Management:                                     budget, DOD expects to achieve an annual budget savings of $20 billion in operational
   Is DOD effectively and efficrently managing     support and infrastructure costs to fund planned weapons procurement The savings are
   Its logrstrcs support operations and other      expected to result from base closures, pnvatrzatron rnrttatrves, acqutsrtron reforms,
   business activitres and facrlrttes to rnclude   organizational streamlrnrng, and consolrdatrons, management process reengrneenng,
   effectively reducing operating and              and Inventory reductions To date, the expected savrngs from these inrtratrves have fallen
   infrastructure costs7                           short of DOD budget plans and expectations If these initiatrves are not fully successful,
                                                   DOD will need to consider delaying or canceling planned weapons acquisitions and/or
                                                   reducing its force structure Fully achieving these savings may be difficult without another
                                                   legislated round of base closures similar to those prevtously authorized

   High interest Programs:                         DOD has a number of programs underway that are of high Interest to Congress and the
   Is DOD’s management of high interest            public These programs are generally costly and rnclude things sueh as envrronmental
   programs effective and efficient?               cleanup and compliance and chemical weapons disposal Despite their Importance,
                                                   these programs have historically experienced significant cost growth and schedule
                                                   delays, and often have not achieved their original objectives In addition, DOD’s
                                                   implementatron of Government Performance Review Act requirements IS also an area of
                                                   high interest and could significantly impact DOD operations

                                                   Page 4
                                               Table I: Key Issues

Objectives                                                                   Focus of work
ldentrfy opportunrtres to reduce rnfrastructure costs through outsourcrng,   DOD rnrtratrves for reducing infrastructure            costs
reengrneenng, streamlrnrng, consolrdatrng, or elrmrnatrng infrastructure
actrvrtres and functions                                                     DOD efforts to downsize infrastructure actrvrtres and
                                                                             functions in line with the force structure
Determine the Impact of recommendations by the Quadrennral Defense
Review on DOD’s infrastructure costs and busrness activities.                Infrastructure actrvrtres that are costly, duplicative,           or
                                                                             managed inefficiently
Assess whether DOD IS effectively managing privatization       and
outsourcing.                                                                 DOD strategy and plans for pnvatrzrng or outsourcing
                                                                             non-core functions
Evaluate actions by DOD to reduce accumulation        of costly and
excessive inventones                                                         lmplementatron      of privatization     and outsourcing       rnitratrves

Identify opportunities for consolidating depot maintenance     workloads     DOD inventory requirements             determination
and reducing high maintenance costs
                                                                             DOD plans to reduce costly excess depot marntenance
Assess opportunities   to streamlrne DOD’s transportation    organizations   capacity
and systems
                                                                             Implementation,      costs, and savings of base closures
Evaluate internal controls over property disposal operations
                                                                             DOD management          of contractor-furnrshed        equipment       and

Determine whether DOD IS effrcrently and effectively managing high           DOD efforts related to environmental           compliance       and
risk/interest programs                                                       cleanup

Evaluate DOD’s rmplementatron     of the Government    Performance    and    DOD programs to dispose of chemical weapons and
Review Act                                                                   related materials

                                                                             Management        of the National Defense Stockpile

                                                                             DOD plans and actions to implement the Government
                                                                             Performance and Review Act
         Issue                                Planned major job starts
         Business Activities and Facilities   Management     of Mothballed   Facrlrtres
                                              Management of Government Furnished Property
                                              Provided to Contractors/Grantees

                                              BRAC implementation

                                              Management of Government-Owned
                                              Contractor-Operated Facilities

                                              Excess On-Order Material

                                              Primary Inventory Control Activities
                                              (PICA)/Secondary Inventory Control Activities (SICA)

                                              lnrtratrves to Reduce Repair Leadtrme

                                              War Reserve Stock Requirements

                                              DOD Efforts to Reduce Navy Ship Maintenance
                                              Infrastructure and Facrlrtres

                                              Commercial Contracting Practices for Depot
                                              Maintenance Pnvatrzatron

                                              Reengineenng      Efforts at Publrc Depots

                                              Army/MTMC      Efforts to Outsource Personal Property

                                              U S Transportation Command and Information
     D                                        Systems Infrastructure

                                              Management       and Privatization of DRMS Operations
                                              Impact of Quadrennial Review Recommendations
                                              on DOD Business Activities

                                              Service and Defense Working Capital Funds and

                                              Reengrneenng Strategy to Reduce Finance and
                                              Accounting Structure and Network
         High Interest Programs               Opportunrtres to Control Environmental       Qualrty

                                              DOD Envrronmental Compliance         Management

                                              DOD Cleanup Pnontrzatron and Cost

                                              lmplementatron     of GPRA lnrtratrves

         Page 6                                                                            GAO/UP-97-4
Table III: GAO Contacts

;                     David R. Warren
Associate Directors   Charles I. Patton          (202) 512-8412
                      James F. Wiggins
                      Barry W. Holman (Acting)

Assistant Directors   Uldis Adamsons
                      Ron Berteotti
                      Gary Billen
                      Julia C. Denman
                      Rick Gist
                      James E. Hatcher
                      Thomas J. Howard
                      George Jahnigen
                      Kenneth R. Knouse
                      James Murphy
                      Nomi Taslitt
                      Foy Wicker

                      Page 7
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