Defense Logistics

Military logistics is an important and expensive job. The Defense Department (DOD) will spend about $84 billion out of its $280-billion budget on logistics support this year. Even so, failing equipment and parts shortages continue to be a problem. DOD has taken steps to reengineer its logistics process, but many aspects of its overall plan are incomplete, raising questions about whether or when the goals of better service and lower costs will be realized. It is too early to assess the impact that reengineering logistics support will have on combat forces. Officials representing combat forces have raised several concerns, including the effect of having large numbers of private contractors on or near the battlefield, the ability of contractors to meet the surge requirements, and the effects of contracting on the number of jobs available to military personnel returning to the United States from overseas duty. Several factors, if not addressed, could limit DOD's ability to achieve its reengineering goals. These factors include the impact that use of sole-source, long-term contracts would have on anticipated reengineering savings and the effects that existing laws and policies would have on the implementation of reengineering initiatives. This testimony summarizes the June 2000 report, GAO/NSIAD-00-89.

GAO noted that: (1) DOD has taken steps towards reengineering its logistics processes; (2) however, many aspects of the overall plan are incomplete, raising questions about whether or when the overall goals of improved service and lower costs will be achieved; (3) key steps DOD has taken include establishing 30 pilot programs to test various reengineering concepts and establishing a new office responsible for coordinating implementation of the reengineering effort and overseeing efforts to link hundreds of ongoing service-sponsored reengineering initiatives to the overall reengineering plans; (4) DOD has not developed an overarching plan that integrates individual service efforts into a single DOD-wide implementation strategy; (5) plans to test, evaluate, and fully implement reengineered support strategies DOD-wide by the end of 2005 face a number of challenges, making it unlikely that they will be able to provide key information in time to support interim decisionmaking deadlines; (6) in some instances, pilot test plans have not been fully developed, and in others, test results may be delayed; (7) DOD has not estimated the total costs of completing logistics reengineering or developed a supporting budget plan; (8) without an investment strategy, there may not be sufficient funds to adequately test the reengineering concepts being piloted and to implement the results on a DOD-wide basis; (9) it is too early to assess the impact reengineering logistics support will have on combat forces; (10) officials representing combat forces have brought up a number of concerns, including the effects of having large numbers of private contractors on or near the battlefield, the ability of contractors to meet the surge requirements, the effects of contracting on the number of positions available to military personnel returning to the United States from overseas assignments or at-sea deployments, and the loss of funding flexibility; (11) DOD is in the early phases of developing its Joint Logistics Warfighter Initiative test, which may be useful in assessing the impacts of various logistics reengineering efforts on combat forces in an operational environment; (12) several factors, if not addressed, could limit DOD's ability to achieve its reengineering goals of improved service and lower costs; and (13) these include the impact that use of sole-source, long-term contracts would have on anticipated reengineering savings and the effects that existing laws and policies would have on the implementation of reengineering initiatives.