oversight

Observations on the Department of Defense's Fiscal Year 2000 Performance Plan

Published by the Government Accountability Office on 1999-07-20.

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

United States General Accounting Office                                                                  National Security and
Washington, D.C. 20548                                                                            International Affairs Division




                 B-282836

                 July 20, 1999

                 The Honorable Dick Armey
                 Majority Leader
                 House of Representatives

                 The Honorable Dan Burton
                 Chairman, Committee on Government Reform
                 House of Representatives

                 The Honorable Fred Thompson
                 Chairman, Committee on Governmental Affairs
                 United States Senate

                 Subject: Observations on the Department of Defense’s Fiscal Year 2000 Performance Plan

                 As you requested, we have reviewed and evaluated the fiscal year 2000 performance plans for
                 the 24 Chief Financial Officers (CFO) Act agencies that were submitted to Congress as
                 required by the Government Performance and Results Act of 1993 (Results Act). Enclosure I
                 to this letter provides our observations on the fiscal year 2000 performance plan for the
                 Department of Defense (DOD). Enclosure II lists management challenges we and DOD’s
                 Inspector General identified that the agency faces and the applicable goals and measures in
                 the fiscal year 2000 annual performance plan.

                 Our objectives were to (1) assess the usefulness of the department’s plan for decisionmaking
                 and (2) identify the degree of improvement the department’s fiscal year 2000 performance
                 plan represents over the fiscal year 1999 plan. Our observations were generally based on the
                 requirements of the Results Act, guidance to agencies from the Office of Management and
                 Budget (OMB) for developing the plan (OMB Circular A-11, Part 2), our previous reports and
                 knowledge of DOD’s operations and programs, and our observations on DOD’s fiscal year
                 1999 performance plan. Our summary report on the CFO Act agencies’ fiscal year 2000 plans
                                                                                            1
                 contains a complete discussion of our objectives, scope, and methodology.



                 1
                  Managing for Results: Opportunities for Continued Improvements in Agencies’ Performance Plans (GAO/GGD/AIMD-99-215,
                 July 20, 1999).




                 Page 1                                                GAO/NSIAD-99-178R DOD’s Fiscal Year 2000 Performance Plan
B-282836


As agreed, unless you announce the contents of this letter earlier, we plan no further
distribution until 30 days from the date of this letter. The major contributors to this report
are listed in enclosure III. Please call me on (202) 512-8412 if you or your staff have any
questions.




David R. Warren, Director
Defense Management Issues

Enclosures - 3




Page 2                                      GAO/NSIAD-99-178R DOD’s Fiscal Year 2000 Performance Plan
Enclosure I

Observations on the Department of
Defense's Performance Plan for
Fiscal Year 2000
DOD’s fiscal year 2000 annual performance provides a limited picture of intended
performance across the Department, a general discussion of strategies and resources that will
be used to achieve performance goals, and limited confidence that performance information
                 1
will be credible. For example, while the plan clearly states DOD’s performance goals, it does
not clearly explain how key output measures such as having ten active Army Divisions will be
used along with other information to assess the outcomes that result from using DOD’s
resources. The plan does not explain the limitations of DOD’s performance measure on
infrastructure spending. As another example, the plan states that there are no known
deficiencies in data to be used for some performance measures such as the disposal of
unneeded property held by contractors, although DOD recently reported systemic problems
in maintaining adequate control and management accountability over this property. DOD’s
corporate-level (strategic) goals are to (1) shape the international environment and respond
to crises and (2) prepare now for an uncertain future. The following figure highlights the
plan’s major strengths and key weaknesses.

Figure 1: Major Strengths and Key Weaknesses of DOD’s Fiscal Year 2000 Annual
Performance Plan

Major Strengths
• Includes a clear discussion of corporate-level and annual performance goals
• Includes a general discussion of strategies and resources
• Includes output-oriented measures and indicators related to most major management
challenges

Key Weaknesses
• Does not include information on how DOD will qualitatively assess results
• Does not explain coordinatoin for crosscutting efforts
• Does not relate budget program activities to performance goals
• Does not provide confidence that performance information will be credible

This year’s plan represents a moderate improvement over the fiscal year 1999 plan. Specifically,
some degree of progress was made in addressing the weaknesses we and others identified in last
year’s plan, which partially depicted intended performance across the Department, partially
discussed how strategies and resources would help achieve goals, and did not provide sufficient
confidence that performance information would be credible. Last year’s plan also lacked a


1
 DOD’s performance plan is included as appendix J of the Secretary of Defense’s Annual Report to the President and the
Congress. DOD officials stated that the fiscal year 2000 performance plan was designed to be a stand-alone document but that it
was deliberately included in the Secretary’s annual report because the annual report supports and elaborates on the performance
plan. Therefore, we considered information throughout the Secretary’s annual report in assessing DOD’s plan.




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Enclosure I
Observations on the Department of Defense's Performance Plan for Fiscal Year 2000




discussion of coordination efforts for most crosscutting activities with other agencies, such as
combating terrorism. Additionally, the plan was not presented in a single document. As a
consequence, last year, the reader was required to refer to a number of other documents, such as
the Quadrennial Review of Military Compensation, to obtain relevant information.

Among improvements in this year’s plan are (1) inclusion of baseline data for 39 of 43
unclassified performance measures and indicators;2 (2) identification of some known deficiencies
such as financial and accounting system problems; and (3) inclusion of performance goals,
measures, and indicators related to six of nine major management challenges identified by us
and/or the DOD Inspector General (see attached table). 3 Also, this year’s plan is set forth in a
single document with references to key support information.

DOD’s Performance Plan Provides a Limited Picture of Intended
Performance Across the Agency
The plan provides only a limited picture of intended performance across the agency, principally
because it does not discuss how information from performance measures and indicators will be
used in conjunction with qualitative evaluations to assess outcomes. The plan has been improved
by including more clearly stated annual performance goals and additional specific performance
measures and indicators along with DOD’s corporate-level goals. It also includes baseline data for
comparing anticipated future performance. DOD’s corporate-level goals are to (1) shape the
international environment and respond to the full spectrum of crises by providing appropriately
sized, positioned, and mobile forces and (2) prepare now for an uncertain future by pursuing a
focused modernization effort that maintains U.S. qualitative superiority in key war-fighting
capabilities, transform the force by exploiting the Revolution in Military Affairs, and reengineer
the Department to achieve a 21st century infrastructure.

While clearly stating goals and measures, the plan lacks information on how DOD will use
performance information to assess mission outcomes. For example, key output measures related to
force structure, overseas presence, and acquisition expenditures, only reflect whether forces are
available to perform assigned missions or levels of spending. The measures do not reflect the
results achieved from DOD’s use of the resources. Assessment of performance will require


2
 In addition, DOD plans to include eight classified readiness performance measures and indicators, along with classified goals
for each and information on how the credibility of performance data will be ensured, in a classified document—the January-
March 1999 Quarterly Readiness Report to the Congress.
3
 The Senate Committee on Appropriation’s report on DOD’s fiscal year 1999 appropriation bill (S. Report 105-200) contains
suggestions for improving the fiscal year 1999 performance plan. DOD’s fiscal year 2000 plan responded to these suggestions.




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Enclosure I
Observations on the Department of Defense's Performance Plan for Fiscal Year 2000




complex considerations about such things as (1) assigned missions and how well they were
accomplished and (2) whether weapon systems expenditures provide desired capabilities. In
addition, the plan does not fully explain the limitations of some measures and indicators. For
example, the plan includes the percentage of the budget spent on infrastructure as a performance
indicator to support the goal of streamlining infrastructure. However, if other areas of the budget
were to substantially increase, infrastructure as a percentage of spending could decrease, even if
actual infrastructure spending were increasing. To make such instances evident, the plan could
include measures for both the actual and constant dollars spent on infrastructure to provide
additional information. Also, the plan does not sufficiently explain coordination with other
agencies that conduct related activities. For example, it does not discuss how DOD coordinates
with State and other agencies that cooperate in a number of programs and activities aimed at
helping to shape the international environment.

This year’s plan is moderately improved over last year’s in that it demonstrates some degree of
progress in addressing the weaknesses identified in last year’s plan as it relates to describing
intended performance across the agency. Specifically, last year’s plan could have been improved
by including (1) baseline data for comparative purposes; (2) goals and performance measures for
both dollars spent on infrastructure and infrastructure costs as a percentage of spending; (3)
performance goals and measures related to major management problems; and (4) more
information on coordination efforts for activities that crosscut with other agencies’ activities. The
fiscal year 2000 plan addressed some of these weaknesses and additional weaknesses identified by
others. For example, it included performance measures or indicators for six of nine major
management challenges. However, it did not address other weaknesses such as by including goals
and performance measures for actual and constant dollars spent on infrastructure.

DOD’s Performance Plan Provides a General Discussion of the
Strategies and Resources the Agency Will Use to Achieve Its
Goals
The plan generally clearly presents the broad strategies and resources DOD will use to achieve
performance goals. For example, the plan cites the importance of forces being continually ready to
respond in order to provide the flexibility needed to shape the global environment, deter potential
foes, and, when required, rapidly respond to a broad spectrum of threats. It also presents a broad
strategy to maintain ready forces. Among others, the plan includes goals to maintain specified
levels of (1) forces; (2) flying hours, tank miles, and steaming days; and (3) unit readiness.

The plan also identifies performance measures and indicators related to changes in program
approaches that are being made to help achieve performance goals. For example, in support of the
performance goal to streamline infrastructure, the plan discusses a basic strategy of redesigning




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Enclosure I
Observations on the Department of Defense's Performance Plan for Fiscal Year 2000




the support structure and pursuing business practice reforms. Additionally, the plan discusses
performance measures or indicators related to the strategy such as (1) increasing the efficiency of
logistics operations by improving the ability to track items in the supply system and (2) increasing
public-private sector competition for functions that are not inherently governmental. The plan also
contains some discussion of how proposed capital assets and mission-critical management
systems support the achievement of performance goals and discussion of efforts to build,
maintain, and marshal human capital. For example, the plan recognizes the tremendous
importance of DOD’s 1.4 million active duty military personnel, approximately 880,000 military
reservists, and over 700,000 civilian personnel to achieving DOD’s goals. Specifically, the plan
includes considerable discussion of various aspects of human capital management strategies such
as recruiting, training, and military retention. It also includes performance measures and goals for
aspects of human capital management such as recruiting and retention. However, like last year,
linkages are not established between performance goals and the program activities in the
President’s budget request for DOD. The plan does not show how requested budgetary resources
relate to performance goals.

This year’s performance plan is moderately improved over last year’s in that it demonstrates some
degree of progress from last year as it relates to specifically discussing strategies and resources
DOD will use to achieve goals. Last year’s plan could have been improved by (1) clearly
identifying strategies for achieving performance goals; (2) discussing factors that might help
mitigate known risks to implementing a strategy for achieving a performance goal, particularly in
relation to recruiting and retaining well qualified personnel; (3) discussing strategies for
mitigating any external factors that could negatively influence achievement of a performance goal,
particularly in relation to contingency operations being funded from budget accounts intended to
support the readiness of U.S. forces; and (4) identifying the specific resources DOD plans to use
to achieve specific performance goals. This year’s plan addressed several of these weaknesses and
additional weaknesses identified by others. For example, the plan discusses actions DOD has
taken and is planning to take to mitigate challenges faced in recruiting and retaining well qualified
personnel. These actions include doubling recruitment advertising from 1995 to 1998 and
increasing enlistment bonuses and funds for college. As another example, the plan discusses
actions that have been taken to mitigate funding contingency operations from budget accounts that
support readiness.

DOD’s Performance Plan Provides Limited Confidence That
Agency Performance Information Will Be Credible
We continue to have concerns about the credibility of data from DOD’s financial, accounting, and
other information systems. While DOD’s performance plan discusses data verification and
validation for some performance measures and indicators, and it acknowledges that data for




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Enclosure I
Observations on the Department of Defense's Performance Plan for Fiscal Year 2000




certain measures and indicators come from financial and accounting systems that have
experienced problems, it provides only limited confidence that the performance information will
be credible. To remedy accounting systems shortcomings, DOD has developed a financial
management improvement plan. However, as we reported, the improvement plan has several
critical omissions which, unless they are effectively addressed in the near term, will impair the
implementation of a sound foundation for fundamentally reforming DOD’s financial management
operations.

DOD Inspector General and service audit organizations have reported that DOD’s financial
systems are not in compliance with federal systems requirements and applicable federal
accounting standards. These problems limit the reliability and timeliness of currently available
financial information needed to effectively manage operations. Moreover, the audit organizations
have repeatedly found systems to be inadequate for measuring the cost of operations and
programs. This deficiency, which the Secretary acknowledged in his 1999 annual report, has
hampered the Department’s ability to manage weapon systems’ life-cycle cost. The lack of
adequate cost information impairs the development of reliable cost-based performance measures
and indicators across virtually the entire spectrum of DOD’s program operations. While we agree
that DOD’s performance measures should center on mission performance, most programs have
associated cost consequences that can be directly or indirectly measured as a factor in judging
program results. Consequently, it is essential that DOD continue working to develop reliable cost
information and, where appropriate, cost-based performance measures.

Additionally, although the plan states that there are no known data deficiencies for some
performance measures and indicators audits continue to identify significant problems with the
data integrity of DOD financial systems and supporting cost, logistical, and operations
information systems. For example, the plan states that there are no known deficiencies in the data
collection process related to the performance measure for the disposal of unneeded government
property held by contractors. That measure supports the annual performance goal to meet combat
forces’ needs “smarter and faster”. However, accurately accounting for and controlling contractor-
held assets has been a long-standing issue at DOD. A 1997 report by the DOD Inspector General
recommended that DOD develop short- and long-term solutions to the financial accountability and
reporting problems regarding government property in the possession of contractors. In response
the Department has set out an action plan with action steps for this area scheduled to be completed
by October 1999.

This year’s plan is moderately improved over last year’s in that it demonstrates some degree of
progress in addressing credibility of performance information weaknesses we and others
identified in last year’s plan. Specifically, last year’s plan did not address known data and systems
deficiencies, the degree to which these deficiencies affect specific performance information, or
planned actions to address these deficiencies. Furthermore, the plan did not identify the extent to



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Enclosure I
Observations on the Department of Defense's Performance Plan for Fiscal Year 2000




which external evaluations such as audits would be used in the performance information
validation process.

Improvements in this year’s plan in this area include discussions on (1) verifying and validating
data such as that generated by the components’ automated inventory data collection systems; (2)
known data and systems limitations for performance metrics, such as using Selected Acquisition
Reports data as an absolute measure of research and development and procurement cost
performance; and (3) planned actions to address data or systems deficiencies such as enhancing
the interface among the military services and defense agencies to overcome data systems
interoperability problems related to the location of inventory. However, this year’s plan does not
address how external evaluations will be used.

Other Observations on DOD’s Implementation of Performance-
Based Management
DOD is starting to implement performance-based management. Secretary-level guidance
emphasizes this effort by requiring that subordinate-level strategic plans show a clear linkage to
the Department’s mission, vision statement, and corporate-level goals. The services are including
linkages to performance-based management in their budget and planning documents. We have not
made an overall assessment of performance-based management implementation. However, our
work has shown that some difficulties are being experienced in DOD’s Total Asset Visibility
initiative, and at the U.S. Atlantic Command. In each instance, the performance measures that
were developed were not helpful for measuring mission or program goal accomplishment.
Defense officials stated that steps are being taken to improve the measures.

Agency Comments and Our Evaluation
In oral comments on a draft of our observations, DOD did not agree with our overall assessment
of the performance plan and asked that we include their view on two issues. First, DOD officials
stated the principal output and outcome of DOD’s annual budget is a specified military force
ready to go to war, and the fiscal year 2000 performance plan defines performance goals relevant
to that objective. The performance goals establish a measurable path to achievement of the
corporate goals articulated in the Department’s strategic plan. Second, officials stated that our
characterization of the plan as being of limited use to decisionmakers does not fully reflect their
views. They noted that this year’s plan contains more information and is more useful to internal
departmental decisionmakers than last year’s plan. However, they recognized that the plan could
be made more useful to external decisionmakers by including additional information such as more
outcome-oriented measures for business operations such as logistics, which accounts for over half
of the Department’s budget.




Page 8                                            GAO/NSIAD-99-178R DOD’s Fiscal Year 2000 Performance Plan
Enclosure I
Observations on the Department of Defense's Performance Plan for Fiscal Year 2000




We agree that ready forces are a key output of DOD’s efforts. However, we continue to believe
that better results information will require a qualitative assessment of the conduct of military
missions, as well as an assessment of investments in technology to improve weapons capabilities.




Page 9                                            GAO/NSIAD-99-178R DOD’s Fiscal Year 2000 Performance Plan
Enclosure II

Management Challenges


The following table shows major management challenges confronting DOD and the goals and
measures in its performance plan related to those challenges.

Table II.1: Management Challenges Confronting DOD and Applicable Goals and Measures


Management challenge                                      Applicable goals and measures in DOD’S fiscal year
                                                          2000 performance plan
Financial Management                                      None. However, in late October 1998, DOD issued its
                                                          first Biennial Financial Management Improvement Plan,
We reported that DOD is struggling to overcome the        which established DOD’s strategy for managing
problems brought about by decades of neglect and to       financial management operations. According to the
fully institute sound financial management practices.     Secretary, the plan sets out DOD’s first ever attempt to
The problems range from being unable to properly          describe the overall concept for its future financial
account for billions of dollars in assets to being        management operations. Additionally, Chapter 14 in
unable to produce reliable and timely information         DOD’s 1999 Annual Report to the President and the
needed to make sound resource decisions.                  Congress discusses financial management reform
                                                          efforts.
The DOD Inspector General reported that DOD
remains unable to comply with laws requiring              Also, various sections of the performance plan discuss
auditable financial statements for its major funds and    procedures for verifying and validating data, along with
for the Department as a whole.                            the performance measures and indicators that the data
                                                          support. Many of the metrics refer back to DOD
                                                          financial and accounting systems that have
                                                          experienced problems in accurately capturing costs and
                                                          tracking disbursements. DOD has undertaken
                                                          management reforms to remedy system shortcomings.

Information Management and Technology                     None. However, the plan notes that DOD works with
                                                          other federal agencies to ensure the security of the
We reported that information management and               increasingly interconnected and vulnerable U.S.
technology issues are key DOD management                  infrastructures against physical or cyber attack.
challenges. A primary short-term concern centers on
the implementation of the year 2000 conversions of        Additionally, the Clinger-Cohen Act of 1996 requires
date-sensitive information on computer systems.           DOD to establish goals for improving the efficiency and
Also, information security for computer systems           effectiveness of its operations through the use of
poses concerns, because malicious attacks on these        information technology. It also requires DOD to include
systems are an increasing threat to our nation’s          an annual report with the submission of its budget to
security.                                                 the Congress on its progress in achieving the goals.
                                                          The current report is Appendix K in DOD’s 1999 Annual
The DOD IG also reported that DOD, which has              Report to the President and the Congress. The goals
about 28,000 computer systems, roughly 3,000 of           are to (1) become a mission partner; (2) provide
which are considered mission critical, faces a            services that satisfy customer needs; (3) reform
monumental challenge in converting the systems for        information technology management processes to
year 2000 compliance and faces major problems in          increase efficiency and mission contribution; and (4)
providing information security for both old and new       ensure vital information resources are secure and
computer systems. The IG further reported that DOD        protected. Appendix K discusses progress toward
faces a formidable challenge in managing the              achieving these goals and efforts to meet the technical
acquisition, migration, or modification of a large        challenges related to year 2000 compliance.
number of computer systems projects. Such projects
have tended to cost more and take longer than
anticipated, fail to meet data standardization and
interoperability requirements, and shortchange user
needs.




Page 10                                             GAO/NSIAD-99-178R DOD’s Fiscal Year 2000 Performance Plan
Enclosure II
Management Challenges




Management challenge                                         Applicable goals and measures in DOD’S fiscal year
                                                             2000 performance plan
Weapon Systems Acquisition                                   The Performance Plan includes a performance goal to
                                                             “meet combat forces’ needs smarter and faster, with
We reported that effectively managing the weapon             products and services that work better and cost less, by
systems acquisition process continues to be a                improving the efficiency of acquisition processes.” The
concern. Although DOD has increased its                      plan includes two related performance measures. They
procurement budget, it consistently pays more and            are:
takes longer than planned to develop systems that do
not perform as anticipated.                                  • Major Defense Acquisition Program cost growth; and
                                                             • Successful completion of weapon system operational
The DOD IG also reported a compelling need to                test and evaluation events.
accelerate the weapon systems acquisition cycle and
reduce per unit costs. The IG further reported that a        The plan also includes a related performance
significant gap exists between weapon systems                indicator—Major Defense Acquisition Program cycle
modernization requirements and planned funding.              time.
DOD has a goal to further increase procurement
spending but the goal relies on shifting about $10
billion of spending a year from other areas. The IG
doubts that planned actions will free up that amount
of funds.

Contracting                                                  The Performance Plan includes a performance goal to
                                                             “meet combat forces’ needs smarter and faster, with
We reported that DOD spends over $100 billion a              products and services that work better and cost less, by
year contracting for goods and services. Over the            improving the efficiency of acquisition processes.”
last few years, several broad-based changes have             Three performance indicators for this goal relate to
been made to acquisition and contracting processes           some aspects of contracting. They are:
to improve DOD-contractor relationships and rules.
But we and the DOD IG continue to identify risks in          • The percentage of purchases made by purchase card;
contracting, including erroneous, fraudulent, and            • The percentage of paperless transactions; and
improper payments to contractors; payment of higher          • The percentage of paperless acquisition transactions.
prices for commercial spare parts than necessary;
and the award and administration of health care
contracts.

The DOD IG, which continues, as we do, to identify
risks in DOD’s contracting activity, also reported that
the sheer volume and great variety of the contracting
activity makes it a high-risk area. The IG also
reported a lack of good cost information and
significant levels of fraud, mostly by providers, in the
Defense Health Program.
Defense Infrastructure                                       The Performance Plan includes a performance goal to
                                                             “streamline the infrastructure by redesigning the
We reported that although DOD has substantially              Department’s support structure and pursuing business
downsized its force structure over the past 7 to 10          practice reforms.” Key related performance measures
years, it has not reduced operations and support             include:
costs--the costs for its supporting infrastructure--
commensurately. A key reason is that the services            • the number of positions subject to A-76 competition
are reluctant to consolidate activities that span            studies;
service lines and reduce capacity as necessary.              • logistics response time;
                                                             • the dollar amount of National Defense Stockpile
The DOD IG reported that key infrastructure areas            • disposals and reductions in the supply inventory; and
such as transportation, maintenance, facilities, and         • disposals of excess real property.




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Enclosure II
Management Challenges




Management challenge                                        Applicable goals and measures in DOD’S fiscal year
                                                            2000 performance plan
supply offer opportunities to reduce costs. The IG
noted, however, that many logical measures are              Key related performance indicators include:
highly controversial and that the Congress and DOD
disagree over additional base closures and the              • the percentage of budget spent on infrastructure;
distribution of workload between DOD and private            • the percentage of materiel assets that are visible and
sector maintenance facilities.                              accessible to its Integrated Materiel Managers; and
                                                            • the net operating results of working capital funds.
Inventory Management                                        The Performance Plan includes two performance
                                                            measures related to inventory management. They are:
We reported that DOD’s inventory management
practices continue to be ineffective and inefficient and    • logistics response time; and
are not well-suited to meet new missions and war-           • the dollar amount of National Defense Stockpile
fighting strategies. As a result, DOD spends more           disposals and reductions in the supply inventory.
than necessary to procure inventory, yet items are
not available when needed.                                  The plan also includes two related performance
                                                            indicators. They are:
The DOD IG also reported shortages of spare parts
and that war reserves are overstocked in some               • the percentage of materiel assets that are visible and
locations but short of critical items in others. The IG     accessible to its Integrated Materiel Managers; and
additionally reported problems with fraud and               • the dollar amount of unfunded depot maintenance
inappropriate practices in the disposal process.            requirements.
Military Personnel                                          The Performance Plan includes a performance goal to
                                                            “recruit, retain, and develop personnel to maintain a
We reported that DOD’s personnel programs to                highly skilled and motivated force capable of meeting
recruit, train, and retain a high-quality active-duty       tomorrow’s challenges.” The plan includes three
enlisted workforce have not received the                    related performance measures. They are:
management attention needed to ensure their
successful operation. The military services recruit         • the number of enlisted recruits inducted into the
tens of thousands of new enlistees each year who fail       Active Force and into the Selected Reserve;
to complete their contracts.                                • the Active Force components enlisted retention rates;
                                                            and
                                                            • the Selected Reserves’ enlisted attrition rates.

                                                            The plan also includes a related performance indicator.
                                                            It is the percentage of enlisted recruits that meet quality
                                                            benchmarks (high school diplomas, etc.) for such
                                                            recruits.
Military Readiness                                          The Performance Plan includes a performance goal to
                                                            “maintain ready forces and ensure they have the
The DOD IG reported that DOD has difficulties in            training necessary to provide the United States with the
maintaining sufficient military readiness. The IG           ability to shape the international environment and
reported a concern about the accuracy of reporting          respond to the full range of crises.” The plan includes
for unit-level readiness; weaknesses in chemical and        classified measures for the readiness of each service’s
biological defense preparedness and in                      forces.
communications capability; impact of changes in the
threat environment; and impact of currently approved        The plan also includes several related performance
budget levels.                                              indicators, including:

                                                            • the amount of time military personnel are deployed;
                                                            • number of flying hours per month, by service;
                                                            • number of tank miles per year;
                                                            • number of steaming days per quarter; and




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Enclosure II
Management Challenges




Management challenge                                      Applicable goals and measures in DOD’S fiscal year
                                                          2000 performance plan
                                                          • classified indicators for the percentage of billets filled
                                                          in each service.
Turbulence From Change                                    None. However, the plan and the Secretary’s annual
                                                          report discuss human capital management issues such
The DOD IG reported that all functional areas within      as recruiting, training, operating tempo, and military
DOD are engaged in fundamental reform and                 retention. The Secretary’s annual report also includes
process reengineering efforts at the same time,           chapters on initiatives such as acquisition reform,
causing turbulence. The turbulence brings with it         financial management reform, and infrastructure.
several additional difficult challenges such as
conflicting priorities, downsizing, outsourcing,
dependence on new and unproven systems or
processes, and deemphasis on management controls
and oversight, all of which are putting considerable
strain on DOD. The IG noted that DOD confronts a
huge task in coordinating and integrating its hundreds
of reform initiatives so that they do not work at cross
purposes with each other.




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Enclosure III

GAO Contacts and Staff
Acknowledgments

GAO Contacts
David R. Warren,        (202) 512-8412
Charles I. Patton, Jr., (202) 512-4412



Acknowledgments
In addition to those named above, Kenneth R. Knouse, Jr., F. Earl Morrison, Elizabeth G.
Mead, Geoffrey B. Frank, Laura E. Castro and Alan S. Goldberg made key contributions to
this product.




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