Defense Management
The Department of Defense's Fiscal Year 2012 Corrosion Prevention and Control Budget Request Gao ID: GAO-11-490R April 13, 2011In 2010, the Department of Defense (DOD) estimated that corrosion costs the DOD over $22.9 billion annually. Corrosion negatively affects all military assets, including both equipment and infrastructure, and is defined as the unintended destruction or deterioration of a material due to its interaction with the environment. Corrosion also affects military readiness, taking critical systems out of action and creating safety hazards. Congress has enacted several legislative requirements to address the high cost of corrosion on military equipment and infrastructure, including legislation that created the Office of Corrosion Policy and Oversight (Corrosion Office) within the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics. The Corrosion Office is responsible for the prevention and mitigation of corrosion of military equipment and infrastructure and, according to officials, manages funding for DOD-wide corrosion prevention and control (CPC) activities and CPC projects proposed by the Military Departments. Section 2228(e) of Title 10 of the United States Code requires DOD to annually report on CPC funding to Congress. Additionally, the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 required each Military Department's corrosion control and prevention executive to submit an annual report with recommendations pertaining to his or her Department's CPC program, including corrosion-related funding levels to carry out all of the duties of the executive. In fiscal year (FY) 2011, Congress expanded the requirement for DOD to report on its CPC efforts by adding to or revising existing elements. Section 2228(e), as recently amended, requires DOD to annually submit a report to Congress on corrosion funding as part of its annual budget submission. In the report, DOD is to address funding requirements for its long-term corrosion reduction strategy, the return on investment (ROI) that would be achieved by implementing the strategy, the current and previous fiscal year funds requested in the budget compared to funding requirements, an explanation if funding requirements are not fully funded in the budget, and the current and previous fiscal year amount of funds requested in the budget for each project or activity described in its long-term strategy compared to the funding requirements for the project or activity. This letter provides our mandated analysis of DOD's CPC budget request and the Corrosion Office's accompanying report for FY 2012. Accordingly, our objectives were to: (1) determine the extent to which DOD's corrosion report addressed the mandated requirements, (2) assess the extent to which the CPC budget request met total estimated CPC funding requirements for activities and preliminary project proposals as stated in the FY 2012 DOD corrosion report, and (3) calculate the potential cost avoidance for DOD's CPC budget request and reported budget shortfall identified in the FY 2012 DOD corrosion report.
Of the six mandated elements, DOD's corrosion report addressed five elements and did not address one element. DOD's corrosion report addressed elements such as funding requirements for a long-term corrosion reduction strategy, ROI that would be achieved by implementing the strategy, the funds requested in the budget compared to funding requirements (for the current and previous fiscal year), and an explanation if funding requirements are not fully included in the budget request. DOD's corrosion report also included the Military Departments' annual corrosion reports in an annex. DOD's corrosion report did not the address the requirement to compare the amount of funds requested in the budget to funding requirements for each project or activity in the strategy. Corrosion Office officials stated that they did not have enough time to incorporate this newly-required information into the report. The Military Departments' reports included recommendations pertaining to the CPC program, but did not include the funding levels required to carry out all duties of the corrosion control and prevention executive. According to Military Department officials, this is because it is difficult for the Military Departments to develop a comprehensive estimate of its departmentwide corrosion costs. Without such an estimate, they are unable to recommend the funding levels needed to carry out the executive's duties. Without all of the required information, DOD senior leaders and Congress may face challenges in assessing the levels of funding needed to effectively and cost efficiently prevent and control corrosion. DOD reported that the FY 2012 total estimated CPC funding requirement for all CPC activities and preliminary project proposals is $43.2 million. Of this total, DOD requested $11.1 million in its FY 2012 budget. Therefore, DOD's reported budget shortfall is about $32.1 million. However, the actual shortfall is somewhat less than the reported budget shortfall because the Corrosion Office develops its estimated CPC funding requirement based on the Military Departments' preliminary project proposals, which have historically exceeded the number of actual project proposals submitted for funding consideration. Using DOD's estimated ROIs, we calculated that if the amount requested in DOD's FY 2012 budget request is funded, the potential cost avoidance could be about $291.8 million. By applying DOD's estimated ROIs to the reported budget shortfall identified in its corrosion report, DOD may be missing an opportunity for additional cost avoidance totaling around $721.4 million by not funding all of its estimated CPC activity requirements and preliminary project proposals. The accuracy of these calculations is contingent on the accuracy of the estimated ROIs that have not been validated. Moreover, due to historical differences between the number of preliminary project proposals and actual project proposals, the actual shortfall--and therefore the potential cost avoidance--could be somewhat less. We are making recommendations to the Secretary of Defense to help ensure that the Corrosion Office and Military Department annual reports provide information on all of the mandated elements. Specifically, to ensure that Congress has all of the information it needs to exercise its oversight responsibilities, we recommend that the Secretary of Defense take the following two actions: (1) Direct the Under Secretary of Defense for Acquisition, Technology and Logistics to include all required elements in DOD's future corrosion reports. (2) Direct the Secretary of each Military Department to provide the required information on funding levels necessary to carry out all duties of the corrosion control and prevention executive. As the Military Departments develop the elements needed to provide the full funding levels, they should include the information on these elements in their annual reports.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Jack E. Edwards Team: Government Accountability Office: Defense Capabilities and Management Phone: (202) 512-8246GAO-11-490R, Defense Management: The Department of Defense's Fiscal Year 2012 Corrosion Prevention and Control Budget Request
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GAO-11-490R:
United States Government Accountability Office:
Washington, DC 20548:
April 13, 2011:
Congressional Committees:
Subject: Defense Management: The Department of Defense's Fiscal Year
2012 Corrosion Prevention and Control Budget Request:
In 2010, the Department of Defense (DOD) estimated that corrosion
costs the DOD over $22.9 billion annually. Corrosion negatively
affects all military assets, including both equipment and
infrastructure, and is defined as the unintended destruction or
deterioration of a material due to its interaction with the
environment.[Footnote 1] Corrosion also affects military readiness,
taking critical systems out of action and creating safety hazards.
Congress has enacted several legislative requirements to address the
high cost of corrosion on military equipment and infrastructure,
including legislation that created the Office of Corrosion Policy and
Oversight (Corrosion Office) within the Office of the Under Secretary
of Defense for Acquisition, Technology and Logistics.[Footnote 2] The
Corrosion Office is responsible for the prevention and mitigation of
corrosion of military equipment and infrastructure and, according to
officials, manages funding for DOD-wide corrosion prevention and
control (CPC) activities and CPC projects proposed by the Military
Departments. Section 2228(e) of Title 10 of the United States Code
requires DOD to annually report on CPC funding to Congress.[Footnote
3] Additionally, the Duncan Hunter National Defense Authorization Act
for Fiscal Year 2009 required each Military Department's corrosion
control and prevention executive to submit an annual report with
recommendations pertaining to his or her Department's CPC program,
including corrosion-related funding levels to carry out all of the
duties of the executive.[Footnote 4] In fiscal year (FY) 2011,
Congress expanded the requirement for DOD to report on its CPC efforts
by adding to or revising existing elements.[Footnote 5]
Section 2228(e), as recently amended, requires DOD to annually submit
a report to Congress on corrosion funding as part of its annual budget
submission.[Footnote 6] In the report, DOD is to address funding
requirements for its long-term corrosion reduction strategy, the
return on investment (ROI) that would be achieved by implementing the
strategy, the current and previous fiscal year funds requested in the
budget compared to funding requirements, an explanation if funding
requirements are not fully funded in the budget, and the current and
previous fiscal year amount of funds requested in the budget for each
project or activity described in its long-term strategy compared to
the funding requirements for the project or activity. DOD is also to
include a copy of the annual corrosion report most recently submitted
by the corrosion executive of each Military Department, in an annex to
DOD's report. The law also requires us to analyze DOD's budget
submission and report and provide an assessment to the congressional
defense committees within 60 days after the submission of the budget
for the fiscal year,[Footnote 7] which occurred on February 14, 2011.
This letter and enclosure I provide our mandated analysis of DOD's CPC
budget request and the Corrosion Office's accompanying report for FY
2012. Accordingly, our objectives were to: (1) determine the extent to
which DOD's corrosion report addressed the mandated requirements, (2)
assess the extent to which the CPC budget request met total estimated
CPC funding requirements for activities and preliminary project
proposals as stated in the FY 2012 DOD corrosion report, and (3)
calculate the potential cost avoidance for DOD's CPC budget request
and reported budget shortfall identified in the FY 2012 DOD corrosion
report. (See the related GAO products at the end of enclosure I for a
list of corrosion-related reports.)
Scope and Methodology:
To conduct this work, we analyzed data on DOD's CPC budget request and
DOD's corrosion strategy, Corrosion Office-estimated CPC activity
requirements and preliminary and actual project proposals, and other
pertinent documents. In addition, we interviewed Corrosion Office and
Military Department officials to obtain information on DOD's process
for developing the CPC budget request, the FY 2012 DOD corrosion
report, and the estimated ROIs used to calculate potential cost
avoidance for DOD's CPC budget request and reported budget shortfall.
To determine the extent to which the DOD and Military Department
reports addressed the mandated requirements, we assessed the DOD and
Military Department reports against the mandated requirements using
qualitative content analyses. Two analysts independently reviewed the
reports, recorded their observations, and discussed and reconciled any
differences. The final assessment reflected our consensus. In
addition, we discussed our preliminary analyses with Corrosion Office
and Military Department officials to seek additional information in
those cases where we determined that a report did not meet the
mandated requirements. We considered the element addressed when the
report explicitly discussed all parts of the element and not addressed
when the report did not explicitly address any part of the mandated
element. To assess the extent to which the CPC budget request met
total estimated CPC funding requirements for activities and
preliminary project proposals, we compared the CPC budget request to
the reported funding requirements for CPC activities and preliminary
project proposals. To calculate the potential cost avoidance for DOD's
CPC budget request and reported budget shortfall identified in the FY
2012 DOD corrosion report, we multiplied the CPC budget request and
reported budget shortfall by the relevant estimated ROIs for activity
requirements and preliminary project proposals provided by the
Corrosion Office. As in prior years, we did not independently validate
the Corrosion Office's estimated CPC activity requirements, project
proposals, or estimated ROIs. Instead, we relied on data provided by
the Corrosion Office after assessing the general reliability of the
data by cross-checking them with other data sets and interviewing the
officials responsible for the data collection. We found the data to be
sufficiently reliable for the purposes of (1) presenting budget
requirements, funding requested, and shortfall data as stated in DOD's
corrosion report and (2) calculating potential cost avoidance based on
these data and estimated ROI information provided by Corrosion Office
officials.
We conducted this audit from January 2011 through April 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Summary:
Of the six mandated elements, DOD's corrosion report addressed five
elements and did not address one element. DOD's corrosion report
addressed elements such as funding requirements for a long-term
corrosion reduction strategy, ROI that would be achieved by
implementing the strategy, the funds requested in the budget compared
to funding requirements (for the current and previous fiscal year),
and an explanation if funding requirements are not fully included in
the budget request. DOD's corrosion report also included the Military
Departments' annual corrosion reports in an annex. DOD's corrosion
report did not the address the requirement to compare the amount of
funds requested in the budget to funding requirements for each project
or activity in the strategy. Corrosion Office officials stated that
they did not have enough time to incorporate this newly-required
information into the report. The Military Departments' reports
included recommendations pertaining to the CPC program, but did not
include the funding levels required to carry out all duties of the
corrosion control and prevention executive. According to Military
Department officials, this is because it is difficult for the Military
Departments to develop a comprehensive estimate of its departmentwide
corrosion costs. Without such an estimate, they are unable to
recommend the funding levels needed to carry out the executive's
duties. Without all of the required information, DOD senior leaders
and Congress may face challenges in assessing the levels of funding
needed to effectively and cost efficiently prevent and control
corrosion.
DOD reported that the FY 2012 total estimated CPC funding requirement
for all CPC activities and preliminary project proposals is $43.2
million. Of this total, DOD requested $11.1 million in its FY 2012
budget. Therefore, DOD's reported budget shortfall is about $32.1
million. However, the actual shortfall is somewhat less than the
reported budget shortfall because the Corrosion Office develops its
estimated CPC funding requirement based on the Military Departments'
preliminary project proposals, which have historically exceeded the
number of actual project proposals submitted for funding consideration.
Using DOD's estimated ROIs, we calculated that if the amount requested
in DOD's FY 2012 budget request is funded, the potential cost
avoidance could be about $291.8 million. By applying DOD's estimated
ROIs to the reported budget shortfall identified in its corrosion
report, DOD may be missing an opportunity for additional cost
avoidance totaling around $721.4 million by not funding all of its
estimated CPC activity requirements and preliminary project proposals.
The accuracy of these calculations is contingent on the accuracy of
the estimated ROIs that have not been validated. Moreover, due to
historical differences between the number of preliminary project
proposals and actual project proposals, the actual shortfall--and
therefore the potential cost avoidance--could be somewhat less.
For additional information on the results of our work, see enclosure I.
Recommendations for Executive Action:
We are making recommendations to the Secretary of Defense to help
ensure that the Corrosion Office and Military Department annual
reports provide information on all of the mandated elements.
Specifically, to ensure that Congress has all of the information it
needs to exercise its oversight responsibilities, we recommend that
the Secretary of Defense take the following two actions:
* Direct the Under Secretary of Defense for Acquisition, Technology
and Logistics to include all required elements in DOD's future
corrosion reports.
* Direct the Secretary of each Military Department to provide the
required information on funding levels necessary to carry out all
duties of the corrosion control and prevention executive. As the
Military Departments develop the elements needed to provide the full
funding levels, they should include the information on these elements
in their annual reports.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, DOD concurred with both
recommendations. DOD's written comments are reprinted in enclosure II.
DOD concurred that it should include all required elements in its
future corrosion reports. DOD stated that the report, as submitted,
provides Congress with all the information it needs to exercise its
oversight responsibilities. DOD also commented that budgets for both
activities and projects were provided and that activities are being
executed in accordance with the DOD Corrosion Prevention and
Mitigation Strategic Plan. However, as we stated earlier, DOD's
corrosion report did not include, for the current and previous fiscal
year, the amount of funds requested in the budget compared to the
funding requirements for each project or activity in the strategy.
Therefore, DOD should include this information in its FY 2013 report.
DOD concurred that it should provide the required information on
funding levels necessary to carry out all duties of the corrosion
control and prevention executives and that as the Military Departments
develop the elements needed to provide the full funding levels, they
should include the information on these elements in their annual
reports. DOD commented that it will, in future reports, provide the
required information on funding levels necessary to carry out all
duties of the corrosion control and prevention executive, as described
in DOD guidance.
We continue to believe that DOD leaders and Congress need all of the
required information to exercise their oversight responsibilities.
Because neither DOD's nor the Military Departments' reports provided
all of the required information, DOD leaders and Congress may not be
able to determine the size of the Corrosion Office's budget needed to
cost-effectively prevent and mitigate corrosion's negative effects.
We are sending copies of this report to the appropriate congressional
committees. We are also sending copies to Secretary of Defense; the
Deputy Secretary of Defense; the Under Secretary of Defense for
Acquisition, Technology and Logistics; the Secretaries of the Army,
Navy, and Air Force; and the Commandant of the Marine Corps. The
report also is available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
Should you or your staff have questions concerning this report, please
contact me on (202) 512-8246 or edwardsj@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made key contributions
to this report are list in enclosure III.
Signed by:
Jack E. Edwards:
Director, Defense Capabilities and Management:
Enclosures - 3:
List of Committees:
The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Howard P. "Buck" McKeon:
Chairman:
The Honorable Adam Smith:
Ranking Member:
Committee on Armed Services:
House of Representatives:
The Honorable C.W. Bill Young:
Chairman:
The Honorable Norman D. Dicks:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Enclosure I: Briefing Slides:
The Department of Defense's Fiscal Year 2012 Corrosion Prevention
and Control Budget Request:
Background:
To mitigate corrosion's negative effects, Congress established the
Corrosion Office:
Congress has enacted several legislative requirements to address the
high cost of corrosion and its negative effects, including legislation
that created the Office of Corrosion Policy and Oversight (Corrosion
Office) within the Office of the Under Secretary of Defense for
Acquisition, Technology and Logistics (AT&L). The Corrosion Office is
responsible for the prevention and mitigation of corrosion of military
equipment and infrastructure.[Footnote 8]
Corrosion can have negative effects on military equipment and
infrastructure in terms of cost, readiness, and safety.
* The Department of Defense (DOD), in its Annual Corrosion Report for
2010, estimated that corrosion costs DOD $22.9 billion a year.
* GAO has previously reported that corrosion negatively affects
military readiness by taking critical systems out of action, and has
also impacted safety resulting in fatal accidents due to the
degradation of equipment.[Footnote 9]
Corrosion affects all military assets and is defined as the unintended
destruction or deterioration of material due to interaction with the
environment. It includes such varied forms as rusting; pitting;
galvanic reaction; calcium or other mineral buildup; degradation due
to ultraviolet light exposure; and mold, mildew, or other organic
decay.
Corrosion Office funds DOD-wide CPC activities and projects:
DOD began targeting funding toward corrosion prevention and control
(CPC) in fiscal year (FY) 2006 when DOD established a separate program
funding element for Research, Development, Test and Evaluation and a
separate corrosion line item within an existing program element for
Operation and Maintenance.
The budget request, requirements, and shortfalls contained in the FY
2012 DOD corrosion report reflect this program funding element and
line item. According to Corrosion Office officials, the budget
request, requirements, and shortfalls contained in the FY 2012 DOD
corrosion report represent only a portion of DOD's total CPC
requirements and requested funding for CPC efforts.
The Corrosion Office manages the CPC program element and line item.
The funding goes toward DOD-wide CPC activities and projects proposed
by the Military Departments. The Corrosion Office defines activities
and projects as follows:
* Activities are essential to the success and institutionalization of
the corrosion program within DOD. The Corrosion Office identifies
these as "required activities." Examples include:
- conducting cost-of-corrosion studies and,
- identifying and updating corrosion-related specifications and
standards.
* Projects are Military Department technology demonstration projects
for both weapon systems and infrastructure that the Corrosion Office
identifies as acceptable for funding, if funding is available. For
most accepted project proposals, the Military Departments supplement
the Corrosion Office's funding, which is generally up to $500,000 per
project. Examples include:
- dehumidfication of PATRIOT missile equipment and,
- corrosion protection for bulk fuel storage tank bottoms.
Corrosion Office develops its CPC budget request:
As we reported in 2010, the Corrosion Office uses a multistep process
to develop its CPC budget request.[Footnote 10] The Corrosion Office:
* Asks the Military Departments, in the fall, to submit preliminary
project proposals for the future fiscal year. These preliminary
project proposals only specify the title and estimated cost for each
proposal.
* Reduces the total estimated cost of preliminary project proposals by
37 percent, to reflect the percentage of actual project proposals the
Corrosion Office has determined historically to be acceptable for
funding based on established project selection criteria.
* Estimates funding needed for activities and adds this to the
adjusted total estimated cost of preliminary project proposals to
identify total estimated CPC funding requirements for activities and
preliminary project proposals.
* Reduces the total estimated CPC funding requirements for activities
and preliminary project proposals to reflect the estimated costs of
funding only the highest priority activities and projects. Corrosion
Office officials explained that they make this adjustment because the
Director of the Corrosion Office has determined that based on past
experience, a request for the total estimated CPC activity
requirements and preliminary project proposals is unlikely to be
approved. For example, historically, AT&L has not approved the full
request citing global commitments, constrained budgets, and
competing requirements.
* Submits the CPC budget request to AT&L.
DOD's corrosion report to Congress was mandated to contain four types
of information in prior years:
Since FY 2009, the Secretary of Defense has been mandated to annually
submit, with defense budget materials, a corrosion funding report with
information on these elements:[Footnote 11]
* Funding requirements for the long-term strategy to reduce corrosion
and its effects.
* The return on investment (ROI) that would be achieved by
implementing the strategy.
* The funds requested in the budget compared to the funding
requirements.
* An explanation if the funding requirements are not fully funded in
the budget.
DOD's corrosion report to Congress is now mandated to contain three
additional or revised types of information:
The Ike Skelton National Defense Authorization Act for Fiscal Year
2011 increased the information mandated in the DOD corrosion report.
[Footnote 12] The new and expanded elements are:
* For the fiscal year covered by the report and the preceding fiscal
year, the funds requested in the budget compared to the funding
requirements.[Footnote 13]
* For the fiscal year covered by the report and the preceding fiscal
year, the amount of funds requested in the budget for each project or
activity in the long-term strategy compared to the funding
requirements for the project or activity.
* In an annex, a copy of the most recent annual report submitted by
the corrosion control and prevention executive of each Military
Department to the Secretary of Defense.[Footnote 14] Each Military
Department report is required to include[Footnote 15] recommendations
pertaining to the Military Department's CPC program, including
corrosion-related funding levels required to carry out all of the
duties of the corrosion control and prevention executive.
[End of Background section]
Objectives:
As mandated,[Footnote 16] we analyzed DOD's CPC budget request and
its accompanying corrosion report for FY 2012. Our objectives were to:
1. determine the extent to which DOD's corrosion report addressed the
mandated requirements;
2. assess the extent to which the CPC budget request met total
estimated CPC funding requirements for activities and preliminary
project proposals as stated in the FY 2012 DOD corrosion report, and;
3. calculate the potential cost avoidance for DOD's CPC budget request
and reported budget shortfall identified in the FY 2012 DOD corrosion
report.
[End of Objectives section]
Scope and Methodology:
To conduct this work, we analyzed data on DOD's CPC budget request and
DOD's corrosion strategy; Corrosion Office-estimated CPC activity
requirements and preliminary and actual project proposals; and other
pertinent documents. In addition, we interviewed Corrosion Office and
Military Department officials to obtain information on DOD's process
for developing the CPC budget request, the FY 2012 DOD corrosion
report, and the estimated ROIs used to calculate potential cost
avoidance for DOD's CPC budget request and reported budget shortfall.
To determine the extent to which the DOD and Military Department
reports addressed the mandated requirements, we:
* assessed the DOD and Military Department reports against the
mandated requirements using qualitative content analyses;
* independently reviewed the reports using two analysts, compared and
reconciled their observations, and recorded the analysts consensus
observations; and;
* discussed our preliminary analyses with Corrosion Office and
Military Department officials to seek additional information in those
cases where we determined that a report did not meet the mandated
requirements.
* We considered the element addressed when the report explicitly
discussed all parts of the element and not addressed when the report
did not explicitly address any part of the mandated element.
To assess the extent to which the CPC budget request met total
estimated CPC funding requirements for activities and preliminary
project proposals, we compared the CPC budget request to the reported
CPC activity requirements and preliminary project proposals.
To calculate the potential cost avoidance for DOD's CPC budget request
and reported budget shortfall identified in the FY 2012 DOD corrosion
report, we multiplied the CPC budget request and reported budget
shortfall by the relevant estimated ROIs for activity requirements and
project proposals provided by the Corrosion Office.
As in prior years, we did not independently validate the Corrosion
Office's estimated CPC activity requirements, project proposals, or
estimated ROIs. Instead, we relied on data provided by the Corrosion
Office after assessing the general reliability of the data by cross-
checking the with other data sets and interviewing the officials
responsible for the data collection. We found the data to be
sufficiently reliable for the purposes of (1) presenting budget
requirements, funding requested, and shortfall data as stated in DOD's
FY 2012 corrosion report and (2) calculating potential cost avoidance
based on these data and estimated ROI information provided by
Corrosion Office officials.
We conducted this audit from January 2011 through April 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of Scope and Methodology section]
Summary:
Objective 1:
Objective 1: Of the six mandated elements, DOD's corrosion report
addressed five elements and did not address one element.
* DOD's corrosion report addressed elements such as ROI and the
mandate to include the Military Departments' annual corrosion reports
in an annex. DOD's corrosion report also addressed funding
requirements for a long-term strategy, for the current and previous
fiscal year; the funds requested in the budget compared to the funding
requirements; and an explanation of the difference.
* DOD's corrosion report did not include, for the current and previous
fiscal year, the amount of funds requested in the budget compared to
the funding requirements for each project or activity in the strategy.
Corrosion Office officials stated that they did not have enough time
to incorporate this newly required information into the report.
* The Military Departments' reports included recommendations
pertaining to the CPC program, but did not include the funding levels
required to carry out all duties of the corrosion control and
prevention executives. According to Military Department officials,
this is because it is difficult for the Military Departments to
develop comprehensive estimates of their departmentwide corrosion
costs. Without such estimates, they are unable to recommend the
funding levels needed to carry out the executives' duties.
* Without all of the required information, DOD senior leaders and
Congress may face challenges in assessing the levels of funding needed
to effectively and cost efficiently prevent and control corrosion.
Objectives 2 and 3 and Recommendations:
Objective 2: DOD reported that the FY 2012 total estimated CPC funding
requirement for all CPC activities and preliminary project proposals
is $43.2 million. Of this total, DOD requested $11.1 million in its FY
2012 budget. Therefore, DOD's reported budget shortfall is about $32.1
million. However, the actual shortfall is less than the reported
budget shortfall because the Corrosion Office develops its estimated
CPC funding requirement based on the Military Departments' preliminary
project proposals, which have historically exceeded the number of
actual project proposals later submitted for funding.
Objective 3: Using DOD's estimated ROIs, if the amount requested in
the FY 2012 budget is funded, the potential cost avoidance could be
about $291.8 million. By applying DOD's estimated ROIs to the reported
budget shortfall identified in its corrosion report, DOD may be
missing an opportunity for additional cost avoidance totaling around
$721.4 million by not funding all of its estimated CPC activity
requirements and preliminary project proposals. The accuracy of these
calculations is contingent on the accuracy of the estimated ROIs which
have not been validated. Moreover, due to historical differences
between the number of preliminary project proposals and actual project
proposals, the actual shortfall-”and therefore the potential cost
avoidance-”could be less.
Recommendations for Executive Action: We are making recommendations to
help ensure that DOD and Military Department reports provide needed
information. DOD concurred with our recommendations.
[End of Summary section]
Objective 1: Extent report addressed elements:
DOD's corrosion report addressed five of six mandated elements:
DOD's corrosion report addressed five of the six mandated elements:
* Funding requirements for long-term strategy-”Addressed: Provided in
the report.
* ROIs from implementing strategy-”Addressed: Provided ROI estimates
in the report. As we reported in December 2010, actual ROIs for funded
projects will not be available until around 5 years after a project is
started.[Footnote 17]
* Current and previous fiscal year funds requested compared to funding
requirements-”Addressed: Provided in the report.
* Explanation if funding requirements not fully included in the budget
request”-Addressed: Provided in the report.
* An annex with the Military Departments' reports”-Addressed: Provided
in the report.
DOD's corrosion report did not address one mandated element:
* Current and previous fiscal year amount of funds requested in the
budget compared to the funding requirements for each project or
activity-”Did not address: The report contains the CPC budget request
for the current and previous fiscal year and identifies the total
estimated CPC funding requirements for activities and preliminary
project proposals for the long-term strategy, but the report does not
list the funding amounts for each activity and project in the strategy.
Military Departments' reports addressed one of two requirements:
In the annex to DOD's corrosion report, each Military Department
report addressed one of two requirements:
* Recommendations pertaining to the CPC program, including corrosion
related funding levels required to carry out all of the duties of the
corrosion control and prevention executive”-Addressed one of two
requirements: Each Military Department report contains recommendations
pertaining to the CPC program. Although each Military Department
report provides an overview of its CPC efforts and discusses funding
for some of the efforts, none of the Military Department reports
recommended the level of funding needed to carry out the duties of the
corrosion control and prevention executive. For example:
- The Army report identified the total amount of its FY 2010
departmentwide CPC expenditures, but the report did not specify how
much was needed to carry out the Army corrosion control and prevention
executive's duties, which are distinct from individual projects.
- The Navy report discussed the total amount it anticipated could be
spent by the Navy and Corrosion Office for CPC projects in FY 2011,
but the report did not identify a level of funding needed to carry out
the Navy corrosion control and prevention executive's duties, which
are distinct from individual projects.
- The Air Force report identified the FY 2012 funding requested from
the Corrosion Office for CPC projects, but the report did not identify
a level of funding needed to carry out the Air Force corrosion control
and prevention executive's duties, which are distinct from individual
projects.
Reasons reports did not address certain elements:
According to Corrosion Office and Military Department officials, there
are a variety of reasons that the reports do not contain all of the
required information.
* Corrosion Office officials explained that the requirement for new
information came into effect in January 2011, and that they did not
have enough time to incorporate all of the newly required information
into DOD's corrosion report. Corrosion Office officials said that they
plan to include the additional element in future reports.
* Military Department officials explained that they were unable to
include funding levels required to carry out all duties of the
corrosion control and prevention executives because the Military
Departments lacked comprehensive estimates for the cost of their own
departmentwide CPC efforts. According to Military Department
officials, they are in the process of developing comprehensive
estimates for their CPC efforts.
Because neither DOD's nor the Military Departments' reports provided
all of the required information, DOD senior leaders and Congress may
not have all of the information needed to exercise their oversight
responsibilities, such as determining the funding needed to cost
effectively prevent and mitigate corrosion's negative effects.
[End of Objective 1 section]
Objective 2: Extent request meets reported needs:
DOD reports budget shortfall of $32.1 million:
DOD's corrosion report showed that the total estimated CPC funding
requirements for activities and preliminary project proposals for FY
2012 is about $43.2 million, but the FY 2012 CPC budget request was
about $11.1 million. Therefore, DOD's reported budget shortfall is
about $32.1 million ($4.7 million for required activities and $27.4
million for preliminary project proposals). Table 1 shows these data
and corresponding data for 3 prior years.
Table 1: DOD's Reported CPC Funding Requirements for Activities and
Preliminary Project Proposals, Budget Requests, and Budget Shortfalls,
Fiscal Years 2009 to 2012:
Fiscal year: 2009;
Activities: $3.4 million;
Preliminary project proposals: $28.5 million;
Sum of activities and preliminary project proposals: $32.0 million;
CPC budget request: $14.2 million;
Reported budget shortfall[A]: $17.8 million.
Fiscal year: 2010;
Activities: $6.2 million;
Preliminary project proposals: $21.5 million;
Sum of activities and preliminary project proposals: $27.7 million;
CPC budget request: $13.1 million;
Reported budget shortfall[A]: $14.5 million.
Fiscal year: 2011;
Activities: $6.5 million;
Preliminary project proposals: $40.6 million;
Sum of activities and preliminary project proposals: $47.0 million;
CPC budget request: $12.0 million;
Reported budget shortfall[A]: $35.1 million.
Fiscal year: 2012;
Activities: $8.3 million;
Preliminary project proposals: $34.9 million;
Sum of activities and preliminary project proposals: $43.2 million;
CPC budget request: $11.1 million;
Reported budget shortfall[A]: $32.1 million.
Source: GAO analysis of DOD data.
[A] The reported budget shortfall is the total estimated CPC funding
requirements for activities and preliminary project proposals minus
the CPC budget request. Totals for a fiscal year may not add due to
rounding.
[End of table]
Actual shortfall is likely to be less than the reported shortfall:
The actual shortfall is likely to be less than the reported budget
shortfall shown in table 1. Historically, the Military Departments
have submitted fewer actual project proposals than preliminary project
proposals. Therefore, even if the estimated project cost for every
actual project proposal is the same as the estimate contained in the
earlier preliminary project proposal, the total "required" funding
would decrease between the fall and spring submissions because the
Military Departments have dropped some of their proposed projects. For
example:
* In the fall of 2009, the Military Departments submitted 173
preliminary project proposals to the Corrosion Office.
* The Corrosion Office used the estimated costs from the 173 proposals
to develop the total estimated cost of preliminary project proposals
as reported in DOD's corrosion report.
* In the spring of 2010, the Military Departments submitted 81 actual
project proposals (a reduction of 92 proposals) to the Corrosion
Office. Actual project proposals are detailed proposals that consider
factors such as the availability of matching funding from the Military
Departments and testing assets.
* For each of the past 3 years, the number of preliminary project
proposals and the total budget needed to fund all of the preliminary
project proposals have exceeded the number of actual project proposals
and the total budget needed to fund the actual project proposals later
submitted by the Military Departments (see table 2).
As a result, the funding required for actual project proposals and
the budget shortfall are likely to be somewhat less than the amounts
reported to Congress.
Number of Military Department projects higher in fall than in spring:
From FY 2009 to FY 2011, the number of Military Department preliminary
project proposals submitted to the Corrosion Office in the fall were
about twice the number of actual project proposals submitted to the
Corrosion Office in the spring (see table 2).
Table 2: Difference between the Number of Preliminary and Actual
Project Proposals Submitted by the Military Departments to the
Corrosion Office, Fiscal Years 2009 to 2012:
Fiscal year: 2009;
Number of preliminary project proposals: 116;
Budget needed to fund preliminary project proposals: $47.6 million;
Number of actual project proposals: 60;
Budget needed to fund actual project proposals: $19.7 million;
Decrease in proposals: number: 56;
Decrease in proposals: percent: 48%;
Decrease in budget: amount: $27.9 million.
Fiscal year: 2010;
Number of preliminary project proposals: 119;
Budget needed to fund preliminary project proposals: $35.8 million;
Number of actual project proposals: 66;
Budget needed to fund actual project proposals: $20.8 million;
Decrease in proposals: number: 53;
Decrease in proposals: percent: 45%;
Decrease in budget: amount: $15.0 million.
Fiscal year: 2011;
Number of preliminary project proposals: 173;
Budget needed to fund preliminary project proposals: $64.4 million;
Number of actual project proposals: 81;
Budget needed to fund actual project proposals: $23.5 million;
Decrease in proposals: number: 92;
Decrease in proposals: percent: 53%;
Decrease in budget: amount: $40.9 million.
Fiscal year: 2012;
Number of preliminary project proposals: 157;
Budget needed to fund preliminary project proposals: $55.4 million;
Numberof actual project proposals: Not available[A];
Budget needed to fund actual project proposals: Not available;
Decrease in proposals: number: Not available;
Decrease in proposals: percent: Not available;
Decrease in budget: amount: Not available.
Source: GAO analysis of DOD data.
[A] Information on FY 2012 actual project proposals is not yet
available because the Military Departments will submit their actual
project proposals in spring 2011.
[End of table]
Reasons Military Departments submit fewer actual project proposals:
The reason the number of actual project proposals submitted in the
spring is smaller than the number of preliminary project proposals
submitted in the fall is that the Military Departments are sometimes
unable to plan for changing project variables (e.g., the availability
of Military Departments' funding or testing assets).
Corrosion Office officials provided examples of how changes in key
variables can result in the Military Departments submitting a
preliminary project proposal in the fall but not submitting that
proposal as an actual project proposal in the spring. For example:
* If the Military Department plans to provide funding in the fall, but
is unable to provide funding in the spring, staff may be shifted to
other funded projects.
* Many projects require technology demonstrations to be performed on
testing assets, such as a weapon system. However, due to deployments,
a weapons system's availability may change between the fall and
spring, and the weapon system may no longer be available when the
project is planned to begin.
* Some preliminary project proposals are not developed into actual
project proposals because interim discussions between the Military
Departments and the Corrosion Office identify factors that suggest the
proposal is unlikely to receive Corrosion Office matching funds.
[End of Objective 2 section]
Objective 3: Potential cost avoidance:
Military Departments required to estimate ROIs:
As part of the project selection process, the Corrosion Office
requires that an estimated ROI cost-benefit analysis be submitted for
each actual project proposal.
The estimated ROI is the ratio of the present value of benefits to the
present value of the actual project proposal's total cost. The total
cost for each project is based on both the funding requested from the
Corrosion Office and the funding provided by the Military Department.
* Corrosion Office guidance uses a 7 percent annual discount rate to
estimate the present value of benefits and costs. According to
Corrosion Office officials, this is a conservative estimate to avoid
overstating the project's eventual ROI.
* Estimated ROI analyses and estimated savings vary for each actual
project proposal submitted by the Military Departments. As we reported
in 2010, ROI validations are not available until around 5 years after
a project is started.[Footnote 18]
Corrosion Office officials informed us that a Military Department
point of contact estimates the ROI that is included in the actual
project proposal.
* In the Army and Navy, the corrosion control and prevention executive
reviews the actual project proposal”-including the estimated ROI-”
before the materials are submitted to the Corrosion Office.
* Air Force officials explained that currently the corrosion control
and prevention executive does not review the actual project proposals
before submission, but will take on a more significant oversight role
in the future.
FY 2012 request could result in cost avoidance of about $291.8 million:
Corrosion Office officials provided us estimated ROIs of 38:1 for all
accepted projects, 26:1 for all other projects, and 2:1 for all
activities, based on cumulative 7-year averages.
* The 6-year average for accepted projects that the Corrosion Office
provided to us in 2010 was an estimated 47:1.[Footnote 19] This means
that the current average of 38:1 is $9 less for each $1 invested by
the Corrosion Office and the Military Departments.
* The 6-year and 7-year average estimated ROIs for CPC activities were
both 2:1.
If the Military Departments' 7-year average estimated ROIs are
accurate,
* the $11.1 million identified in the FY 2012 CPC budget request ($3.6
million for activities and $7.5 million for preliminary project
proposals), could”if approved”result in a potential cost avoidance of
about $291.8 million, and;
* if the CPC activity requirements and preliminary project proposals
identified in the $32.1 million reported budget shortfall ($4.7
million for all other activities and $27.4 million for all other
preliminary project proposals) were funded, the potential total cost
avoidance could be about $721.4 million.
The accuracy of these calculations is contingent on the accuracy of
the estimated ROIs, which have not been validated. Moreover, as we
explained earlier, DOD's reported funding requirements for preliminary
project proposals may exceed the funding required for actual project
proposals. Therefore, the cost avoidance that could result from
funding the reported budget shortfall could be less than $721.4
million.
Military Departments' ROI validations incomplete:
The DOD Corrosion Prevention and Mitigation Strategic Plan notes that
follow-on reviews of completed projects are required and are to focus
on validating the completed project's ROI.
As we reported in December 2010,[Footnote 20] the Military Departments
have completed about one-third of their required ROI validations for
projects funded in FY 2005, but completion of the remaining projects'
validations for that year is behind schedule.
* We reported that the Military Departments had completed the ROI
validation for 10 of the 28 implemented projects funded in FY 2005.
[Footnote 21]
* As of March 2011, the Military Departments had completed one
additional ROI validation.
According to Military Department officials, ROI validations are not
completed because CPC funding is awarded for the 2-year project
implementation period only, and the Military Departments typically do
not have funds remaining for validating ROIs after the projects are
completed.
If the ROI validations of finished projects are not completed, the
Corrosion Office will not have needed data to determine how to best
invest limited CPC funds.
We recommended in December 2010 that the Corrosion Office coordinate
with the Military Departments' corrosion control and prevention
executives to complete their ROI validations. DOD concurred with this
recommendation. In March 2011, Corrosion Office officials outlined the
steps they plan to take to implement this recommendation, which
include assisting the Military Departments in documenting and
estimating the ROIs and, when needed, providing funds to complete ROI
validations.
[End of Objective 3 section]
Conclusions:
The DOD corrosion report accompanying its FY 2012 CPC budget request
for activities and projects again provided Congress with the types of
mandated information that it has used in prior years to address prior
mandated requirements for information. However, DOD's corrosion report
did not provide all of the additional information mandated in recently
enacted legislation.
The Military Departments' reports also provided some mandated
information but did not fully address all requirements for information
first mandated in fiscal year 2009.
With a full year to gather and prepare the information for next year's
annual report on proposed DOD-wide CPC projects and activities, DOD
and the Military Departments should be better positioned to address
all the information needs of Congress, as well as the needs of senior
DOD officials.
Providing all of the required information and working with the
Military Departments to validate the ROIs would give DOD leaders and
Congress needed information to better determine the size of the
Corrosion Office's budget.
[End of Conclusions section]
Recommendations for Executive Action:
To ensure that Congress has all of the information it needs to
exercise its oversight responsibilities, we recommend that the
Secretary of Defense take the following two actions:
* Direct the Under Secretary of Defense for Acquisition, Technology
and Logistics to include all required elements in DOD's future
corrosion reports.
* Direct the Secretary of each Military Department to provide the
required information on funding levels necessary to carry out all
duties of the corrosion control and prevention executive. As the
Military Departments develop the elements needed to provide the full
funding levels, they should include the information on these elements
in their annual reports.
[End of Recommendations for Executive Action section]
Agency Comments and Our Evaluation:
In its written comments, DOD concurred with both recommendations.
* DOD concurred that it should include all required elements in DOD's
future corrosion reports. DOD stated that the report, as submitted,
provides Congress with all the information it needs to exercise its
oversight responsibilities. DOD also commented that budgets for both
activities and projects were provided and that activities are being
executed in accordance with the DOD Corrosion Prevention and
Mitigation Strategic Plan. However, as we stated earlier, DOD's
corrosion report did not include, for the current and previous fiscal
year, the amount of funds requested in the budget compared to the
funding requirements for each project or activity in the strategy.
Therefore, DOD should include this information in its FY 2013 report.
* DOD concurred that it should provide the required information on
funding levels necessary to carry out all duties of the corrosion
control and prevention executive and that as the Military Departments
develop the elements needed to provide the full funding levels, they
should include the information on these elements in their annual
reports. DOD commented that it will, in future reports, provide the
required information on funding levels necessary to carry out all
duties of the corrosion control and prevention executive, as described
in DOD guidance. DOD stated that these funding levels will not include
the entire Military Departments' CPC funding requirements because
neither the Corrosion Office nor the Military Department corrosion
control and prevention executives have oversight or control of the
entire CPC budgets.
We continue to believe that DOD leaders and Congress need all of the
required information to exercise their oversight responsibilities.
Because neither DOD's nor the Military Departments' reports provided
all of the required information, DOD leaders and Congress may not be
able to determine the size of the Corrosion Office's budget needed to
cost effectively prevent and mitigate corrosion's negative effects.
[End of Agency Comments and Our Evaluation section]
Related GAO Products:
Opportunities to Reduce Potential Duplication in Government Programs,
Save Tax Dollars, and Enhance Revenue. [hyperlink,
http://www.gao.gov/products/GAO-11-318SP]. Washington, D.C.: March 1,
2011.
Defense Management DOD Needs to Monitor and Assess Corrective Actions
Resulting from Its Corrosion Study of the F-35 Joint Strike Fighter.
[hyperlink, http://www.gao.gov/products/GAO-11-171R]. Washington,
D.C.: December 16, 2010.
Defense Management: DOD Has a Rigorous Process to Select Corrosion
Prevention Projects, but Would Benefit from Clearer Guidance and
Validation of Returns on Investment. [hyperlink,
http://www.gao.gov/products/GAO-11-84]. Washington, D.C.: December 8,
2010.
Defense Management: Observations on the Department of Defense's Fiscal
Year 2011 Budget Request for Corrosion Prevention and Control.
[hyperlink, http://www.gao.gov/products/GAO-10-607R]. Washington,
D.C.: April 15, 2010.
Defense Management: Observations on Department of Defense and Military
Service Fiscal Year 2011 Requirements for Corrosion Prevention and
Control. [hyperlink, http://www.gao.gov/products/GAO-10-608R].
Washington, D.C.: April 15, 2010.
Defense Management: Observations on DOD's Fiscal Year 2010 Budget
Request for Corrosion Prevention and Control. [hyperlink,
http://www.gao.gov/products/GAO-09-732R]. Washington, D.C.: June 1,
2009.
Defense Management: Observations on DOD's Analysis of Options for
Improving Corrosion Prevention and Control through Earlier Planning in
the Requirements and Acquisition Processes. [hyperlink,
http://www.gao.gov/products/GAO-09-694R]. Washington, D.C.: May 29.
2009.
Defense Management: Observations on DOD's FY 2009 Budget Request for
Corrosion Prevention and Control. [hyperlink,
http://www.gao.gov/products/GAO-08-663R]. Washington, D.C.: April 15,
2008.
Defense Management: High-Level Leadership Commitment and Actions Are
Needed to Address Corrosion Issues. [hyperlink,
http://www.gao.gov/products/GA0-07-618]. Washington, D.C.: April 30,
2007.
Defense Management: Additional Measures to Reduce Corrosion of
Prepositioned Military Assets Could Achieve Cost Savings. [hyperlink,
http://www.gao.gov/products/GAO-06-709]. Washington, D.C.: June 14,
2006.
Defense Management: Opportunities Exist to Improve Implementation of
DOD's Long-Term Corrosion Strategy. [hyperlink,
http://www.gao.gov/products/GAO-04-640]. Washington, D.C.: June 23,
2004.
Defense Management: Opportunities to Reduce Corrosion Costs and
Increase Readiness. [hyperlink,
http://www.gao.gov/products/GAO-03-753]. Washington, D.C.: July 7,
2003.
Defense Infrastructure: Changes in Funding Priorities and Strategic
Planning Needed to Improve the Condition of Military Facilities.
[hyperlink, http://www.gao.gov/products/GAO-03-274]. Washington, D.C.:
February 19, 2003.
[End of Related GAO Products section]
[End of Enclosure I]
Enclosure II: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
Acquisition, Technology And Logistics:
3000 Defense Pentagon:
Washington, DC 20301-3000:
April 8, 2011:
Mr. Jack Edwards:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Edwards:
This is the Department of Defense (DoD) response to the GAO Draft
Report, GAO-11-490R, "The Department of Defense's Fiscal Year 2012
Corrosion Prevention and Control Budget Request,“ dated April 5, 2011
(GAO Code 351587). Detailed comments on the report recommendations are
enclosed.
Sincerely,
Signed by:
Daniel J. Dunmire:
Director:
DoD Corrosion Policy and Oversight:
Enclosure: As stated:
[End of letter]
GAO Draft Report Dated April 5, 2011:
GAO-11-490R (GAO Code 351587):
"The Department of Defense's Fiscal Year 2012 Corrosion Prevention and
Control Budget Request"
Department Of Defense Comments To The GAO Recommendations:
Recommendation 1: The GAO recommends that the Secretary of
Defense direct the Under Secretary of Defense for Acquisition,
Technology and Logistics to include all required elements in DOD's
future corrosion reports.
DoD Response: Concur. However, the DoD believes that the report as
submitted provides the Congress with all of the information it needs
to exercise its oversight responsibilities. Budgets for both
activities and projects were provided. Activities are being executed
in accordance with the DoD Corrosion Prevention and Mitigation
Strategic Plan, dated February 2011. Projects are being executed based
on input from the Military Departments in accordance with an
established process that has been characterized by the GAO as
"rigorous" in report GAO-11-84 dated December 2010.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Secretary of each Military Department to provide the
required information on funding levels necessary to carry out all
duties of the corrosion control and prevention executive. As the
Military Departments develop the elements needed to provide the full
funding levels, they should include the information on these elements
in their annual reports.
DoD Response: Concur. In future reports, DoD will provide funding
levels necessary to execute the duties of the Military Department's
corrosion control and prevention executives as described in DODI
5000.67. These funding levels will not include the entire Military
Departments' corrosion prevention and control funding requirements.
Neither CPO nor the Military Department CCPE's have oversight or
control of the entire corrosion prevention control budgets of DoD per
10 USC 133.
[End of Enclosure II]
Enclosure III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Jack Edwards, (202) 512-8246 or edwardsj@gao.gov.
Staff Acknowledgments:
In addition to the contact named above, Suzanne Wren, Assistant
Director; Amanda Harris; Charles Perdue; Steven Putansu; Michael
Shaughnessy; Chris Turner; and Erik Wilkins-McKee made key
contributions to this report.
[End of Enclosure II]
Footnotes:
[1] Corrosion includes such varied forms as rusting; pitting; galvanic
reaction; calcium or other mineral buildup; degradation due to
ultraviolet light exposure; and mold, mildew, or other organic decay.
[2] See 10 U.S.C. § 2228.
[3] Section 2228(e) was recently amended by section 331 of the Ike
Skelton National Defense Authorization Act for Fiscal Year 2011, Pub.
L. No. 111-383 (2011).
[4] See Pub. L. No. 110-417, § 903 (2008).
[5] See Pub. L. No. 111-383, § 331 (2011) (amending § 2228(e)).
[6] Section 2228(e), amended by Pub. L. No. 111-383, § 331.
[7] Section 2228(e)(2), amended by Pub. L. No. 111-383, § 331(2).
[8] 10 U.S.C. § 2228(a).
[9] GAO, Defense Management: High-Level Leadership Commitment and
Actions Are Needed to Address Corrosion Issues, [hyperlink,
http://www.gao.gov/products/GAO-07-618] (Washington, D.C.: Apr. 30,
2007).
[10] GAO, Defense Management: Observations on the Department of
Defense‘s Fiscal Year 2011 Budget Request for Corrosion Prevention and
Control, [hyperlink, http://www.gao.gov/products/GAO-10-607R]
(Washington, D.C.: Apr. 15, 2010).
[11] 10 U.S.C. 6 2228(e)(1). As indicated in the following slide. the
third element was slightly modified in January 2011.
[12] See Pub. L. No. 111-383, § 331(1), (3) (2011) (amending §
2228(e)).
[13] This element previously existed in the mandate, as indicated on
the previous slide, but was modified in the act.
[14] Section 2228(e)(3), added by Pub. L. No. 111-383, § 331(3). The
annual reports are submitted pursuant to section 903(b)(5) of the
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009,
Pub. L. No. 110-417 (2008).
[15] See Pub. L. No. 110-417, § 903(b)(5).
[16] 10 U.S.C. § 2228(e)(2), amended by Pub. L. No. 111-383, § 331(2).
[17] GAO, Defense Management: DOD Has a Rigorous Process to Select
Corrosion Prevention Projects, but Would Benefit from Clearer Guidance
and Validation of Returns on Investment, [hyperlink,
http://www.gao.gov/products/GAO-11-84] (Washington, D.C.: Dec. 8,
2010).
[18] [hyperlink, http://www.gao.gov/products/GAO-11-84].
[19] [hyperlink, http://www.gao.gov/products/GAO-10-607R].
[20] [hyperlink, http://www.gao.gov/products/GA0-11-84].
[21] For these 10 projects, the average ROI ratio was validated as
12:1, slightly higher than the average estimated ROI of 11:1 for these
projects when they were originally proposed. While the agreement
between the average estimated and validated ROIs is encouraging, the
small number of projects”-overall and by type of project”-does not
allow these findings to be generalized.
[End of section]
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