Estimated Savings Reported by the Department of Defense

GAO was asked to evaluate the efforts by the Department of Defense (DOD) to achieve maximum economies and efficiences in its operations. Further, GAO was asked to verify the reasonableness and accuracy of the estimated economies and to determine if DOD is adequately tracking its actual savings.

GAO found that the reported savings estimates fell into two broad categories: (1) actions planned by the administration and Congress; and (2) in-house initiatives planned by DOD. The administration is planning a Government-wide action to reduce cost to DOD, as well as to other agencies. These savings are expected to result from a continuation of the 5-percent pay cap on civilian employees' pay. Congress directed that retired DOD employees' pay be adjusted annually as opposed to semiannually which is reported to achieve savings. In-house management initiatives taken or planned by DOD also appear to have the potential to achieve savings. The most significant initiative in this category concerns the elimination or reduction of marginal programs or systems. These initiatives, if carried out as planned, will undoubtedly achieve savings. Formal systems to track all the economies and efficiencies have not been instituted; however, some mechanisms are in place. Acquisition initiatives will be tracked, for the most part, through the existing budget process. Reductions in research and development efforts will be tracked by the service program budget analysts. To date, guidelines for existing and new tracking mechanisms for those economies and efficiencies discussed in this report have yet to be issued by the Office of the Secretary of Defense.