Defense Management

This letter formally responds to section 371 of the National Defense Authorization Act for Fiscal Year 2008. The act requires GAO to provide an analysis of the Department of Defense's (DOD) budget submission for corrosion control and prevention and a DOD report that was to be submitted with defense budget materials to the congressional defense committees within 60 days after submission of the budget for a fiscal year. On April 3, 2008, we provided the briefing to staff of Congressional committees to satisfy the mandate and 60-day reporting requirement.

Section 371 of the National Defense Authorization Act for Fiscal Year 2008 requires the Secretary of Defense, for each budget for a fiscal year beginning with FY09, to submit, with defense budget materials, a report on: (1) funding requirements for DOD's long-term corrosion prevention and control strategy; (2) return on investment that would be achieved by implementing this strategy; (3) funds requested in the budget compared with funding requirements; and (4) an explanation if requirements are not fully funded in the budget. It also requires GAO to provide an analysis of DOD's budget submission for corrosion control and prevention and an analysis of the report described above to the congressional defense committees within 60 days after submission of the budget for a fiscal year. President's FY09 budget request includes about $14.1 million for the CPC PE. This amount excludes any funding that the military services may contribute. According to data provided by OSD, of the $14.1 million requested for FY09, about $10.7 million is expected to fund corrosion projects. The remaining $3.4 million is expected to fund corrosion activities. Activities may include such things as cost studies, development of a corrosion guidebook for acquisition programs, and training. In addition to the CPC PE funding provided by OSD, the military services provided an average of about $8.5 million for corrosion projects per year for FY06-08. Using DOD requirements data and overall ROI averages, we calculate that: (1) FY09 budget request, if approved, would result in a total ROI of $435 million; (2) If all FY09 validated requirements were funded, the total ROI would be $1.15 billion; and (3) Therefore, the total ROI for unfunded requirements--that is, projects and activities not included in the budget request--is $715 million ($1.15 billion minus $0.435 billion).