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Department of Defense's Overseas Contingency Operations Funding 
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2010. 

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GAO-10-889R: 

United States Government Accountability Office: 
Washington, DC 20548: 

July 6, 2010: 

Congressional Committees: 

Subject: Overseas Contingency Operations: Comparison of the Department 
of Defense's Overseas Contingency Operations Funding Requests for 
Fiscal Years 2010 and 2011: 

This report formally transmits the enclosed briefing on work performed 
under the authority of the Comptroller General to conduct evaluations 
on his own initiative. 

We are sending copies of this report to the appropriate congressional 
committees. We are also sending copies to the Secretary of Defense and 
the Under Secretary of Defense (Comptroller) and the Secretaries of 
the Army, Air Force, and Navy. 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 any questions concerning this report, 
please contact Sharon L. Pickup at (202) 512-9619 or pickups@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. 

Key contributors to this report include Ann Borseth, Assistant 
Director; Robert Brown; Sari Knoop; Brian Mateja; Lonnie McAllister 
II; and Richard Powelson. 

Signed by: 

Sharon L. Pickup:
Director:
Defense Capabilities and Management: 

Enclosure: 

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 Ike Skelton:
Chairman:
The Honorable Howard McKeon:
Ranking Member:
Committee on Armed Services:
House of Representatives: 

The Honorable Norman D. Dicks:
Chairman:
The Honorable C. W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives: 

[End of section] 

Enclosure: 

Briefing for Congressional Staff: 

Comparison of the Department of Defense's Overseas Contingency 
Operations Funding Requests for Fiscal Year 2010 and Fiscal Year 2011: 

June 28, 2010: 

Overview: 
* Introduction; 
* Scope and Methodology; 
* Background; 
* Objectives. 

Introduction: 

Since the September 11, 2001, terrorist attacks, the Department of 
Defense (DOD) has been engaged in domestic and overseas military 
operations in support of overseas contingency operations (OCO). 

These operations include Operation Iraqi Freedom, which focuses 
principally on Iraq, and Operation Enduring Freedom, which focuses 
principally on Afghanistan, but also include operations in the Horn of 
Africa, the Philippines, and elsewhere. 

Obtaining an accurate picture of OCO costs is of critical importance 
given the need to evaluate trade-offs and make more effective use of 
defense dollars in light of the nation's long-term fiscal challenges. 
In the past, we have reported on the need for DOD to become more 
disciplined in its approach to developing plans and budgets, including 
building more OCO costs into the base defense budget. 

In February 2009, the Office of Management and Budget (OMB), in 
coordination with the Office of the Secretary of Defense (OSD), 
developed new guidance for use when constructing the initial fiscal 
year 2010 OCO funding request that more narrowly defined what should 
be considered an OCO funding need. (See next slide.) 

The guidance remained in effect for building the fiscal year 2010 OCO
supplemental request and the fiscal year 2011 OCO budget request. 

The guidance identified such things as geographical restrictions on 
where OCO funding could be used, identified obligation time frames for 
procurement and research, development, test, and evaluation (RDT&E) 
funding, excluded the use of OCO funding for end strength increases 
beyond those in the base budget, and ended the use of OCO funding to 
support family services at home stations. 

Introduction: OMB Revised Criteria for Development of DOD's Fiscal 
Year 2010 OCO Funding Request: 

Compared to fiscal year 2009 OCO funding guidance, significant changes 
include the following: 

Table: 

Area: Geographic theater of operations; 
Fiscal year 2010 OCO funding guidance: Includes U.S. Central Command, 
the Horn of Africa, the Indian Ocean and the Philippines, among others; 
Fiscal year 2009 OCO funding guidance: Does not specify locations, 
which allowed for funding for such items as home station needs to 
support contingency operations. 

Area: Equipment; 
Fiscal year 2010 OCO funding guidance: Specifies stricter definitions 
of replacement, repair, modification and procurement of equipment. New 
criteria specify a 12-month time frame for obligating funds; 
Fiscal year 2009 OCO funding guidance: Does not specify obligation 
time frames other than that legislatively defined for the type of 
appropriation funding. 

Area: RDT&E; 
Fiscal year 2010 OCO funding guidance: Funding for research and 
development must be for projects required for combat operations in the 
theater that can be delivered in 12 months; 
Fiscal year 2009 OCO funding guidance: No time frame restrictions. 

Area: Personnel; 
Fiscal year 2010 OCO funding guidance: Excludes pay and allowances for 
end strength above level requested in budget; 
Fiscal year 2009 OCO funding guidance: Included. 

Area: Family support Initiatives; 
Fiscal year 2010 OCO funding guidance: Excludes family support 
initiatives that would endure after U.S. forces redeploy to home 
stations; 
Fiscal year 2009 OCO funding guidance: Included. 

Area: Base realignment and closure	
Fiscal year 2010 OCO funding guidance: Excluded; 
Fiscal year 2009 OCO funding guidance: Included. 

Source: GAO analysis of DOD data. 

[End of table] 

Figure: Funding Available to DOD for OCO (Fiscal Years 2001 through 
2010) and DOD's Fiscal Year 2010 and Fiscal Year 2011 OCO Requests: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2001; 
Supplemental appropriation: $16 billion. 

Fiscal year: 2002; 
Supplemental appropriation: $13 billion. 

Fiscal year: 2003; 
Supplemental appropriation: $63 billion. 

Fiscal year: 2004; 
Supplemental appropriation: $61 billion. 

Fiscal year: 2005; 
Supplemental appropriation: $25 billion; 
Title IX: $70 billion; 
Total: $95 billion. 

Fiscal year: 2006; 
Supplemental appropriation: $60 billion; 
Title IX: $48 billion; 
Total: $108 billion. 

Fiscal year: 2007; 
Supplemental appropriation: $70 billion; 
Title IX: $86 billion; 
Total: $156 billion. 

Fiscal year: 2008; 
Supplemental appropriation: $87 billion; 
Title IX: $81 billion; 
Total: $168 billion. 

Fiscal year: 2009; 
Supplemental appropriation: $66 billion; 
Title IX: $71 billion; 
Total: $138 billion. 

Fiscal year: 2010; 
Title IX: $125 billion; 
Current supplemental request: $33 billion; 
Total: $158 billion. 

Fiscal year: 2011; 
Fiscal year 2011 OCO request: $159 billion. 

Source: DOD. 

Note: Numbers may not add due to rounding. 

Note: From fiscal year 2001 through fiscal year 2010, Congress 
provided funds to DOD in supplemental appropriations and Title IX of 
DOD's regular annual appropriation. These appropriations included 
funds that could be used for OCO. Except for the current requested 
amounts, the figures reflect DOD's calculations of amounts available 
for OCO based on excluding funds that were appropriated for specific 
purposes, such as hurricane assistance. 

[End of figure] 

Objectives: 

Under the Comptroller General's authority, GAO evaluated: 

1. The fiscal year 2011 OCO budget request by comparing it to the
fiscal year 2010 OCO appropriation and the fiscal year 2010 OCO 
supplemental request. 

2. The assumptions DOD used to create the fiscal year 2010 OCO 
supplemental request and the fiscal year 2011 OCO budget request. 

3. The extent to which the assumptions used for creating the
fiscal year 2010 OCO supplemental request and the fiscal year 2011 OCO 
budget request are sensitive to operational changes. 

4. The extent to which DOD moved certain costs of ongoing contingency 
operations from its OCO budget request into its base budget request. 

Scope and Methodology: 
To achieve our objectives, we: 

* Analyzed DOD's fiscal year 2010 OCO appropriation, the fiscal year 
2010 OCO supplemental request, and the fiscal year 2011 OCO budget 
request. 

* Reviewed the Joint Staff's planning assumptions used to develop the 
fiscal year 2010 OCO supplemental request and the fiscal year 2011 OCO 
budget request. 

* Reviewed OMB's Criteria for War/Overseas Contingency Operations 
Funding Requests. 

* Interviewed officials from the Under Secretary of Defense
(Comptroller), the Joint Staff, and the military services. 

* We conducted our review from February 2010 to June 2010 in 
accordance with all sections of GAO's Quality Control Assurance 
Framework that are relevant to our objectives. The framework requires 
that we plan and perform the engagement to obtain sufficient and 
appropriate evidence to meet our stated objectives and to discuss any 
limitations in our work. We believe that the information and data 
obtained, and the analysis conducted, provide a reasonable basis for 
our findings and conclusions in this product. 

* DOD reviewed a draft of this briefing and provided technical 
comments, which we incorporated. 

Table: Objective 1: Comparison of Fiscal Years 2010 and 2011 Requests 
by Functional Area: 

Functional area: Force Protection; 
Fiscal year 2010: OCO funds available: $15.2 billion; 
Fiscal year 2010: OCO supplemental request: $3.3 billion; 
Fiscal year 2010: Total: $18.5 billion; 
Fiscal year 2011 OCO request: $12.0 billion; 
Difference between fiscal years: -$6.5 billion. 

Functional area: Operations; 
Fiscal year 2010: OCO funds available: $74.5 billion; 
Fiscal year 2010: OCO supplemental request: $19.0 billion; 
Fiscal year 2010: Total: $93.5 billion; 
Fiscal year 2011 OCO request: $89.4 billion; 
Difference between fiscal years: -$4.1 billion. 

Functional area: Baseline Fuel; 
Fiscal year 2010: OCO funds available: $0.0; 
Fiscal year 2010: OCO supplemental request: $2.0 billion; 
Fiscal year 2010: Total: $2.0 billion; 
Fiscal year 2011 OCO request: $0.0; 
Difference between fiscal years: -$2.0 billion. 

Functional area: Military Construction; 
Fiscal year 2010: OCO funds available: $1.4 billion; 
Fiscal year 2010: OCO supplemental request: $0.5 billion; 
Fiscal year 2010: Total: $1.9 billion; 
Fiscal year 2011 OCO request: $1.2 billion; 
Difference between fiscal years: -$0.7 billion. 

Functional area: Temporary Navy End Strength; 
Fiscal year 2010: OCO funds available: $0.4 billion; 
Fiscal year 2010: OCO supplemental request: $0.0; 
Fiscal year 2010: Total: $0.4 billion; 
Fiscal year 2011 OCO request: $0.5 billion; 
Difference between fiscal years: $0.1 billion. 

Functional area: Coalition Support; 
Fiscal year 2010: OCO funds available: $1.9 billion; 
Fiscal year 2010: OCO supplemental request: $0.0; 
Fiscal year 2010: Total: $1.9 billion; 
Fiscal year 2011 OCO request: $2.0 billion; 
Difference between fiscal years: $0.1 billion. 

Functional area: Commander's Emergency Response Program; 
Fiscal year 2010: OCO funds available: $1.2 billion; 
Fiscal year 2010: OCO supplemental request: $0.0; 
Fiscal year 2010: Total: $1.2 billion; 
Fiscal year 2011 OCO request: $1.3 billion; 
Difference between fiscal years: $0.1 billion. 

Functional area: Non-DOD Classified; 
Fiscal year 2010: OCO funds available: $4.1 billion; 
Fiscal year 2010: OCO supplemental request: $1.2 billion; 
Fiscal year 2010: Total: $5.3 billion; 
Fiscal year 2011 OCO request: $5.6 billion; 
Difference between fiscal years: $0.3 billion. 

Functional area: Iraq Security Forces; 
Fiscal year 2010: OCO funds available: $0.0; 
Fiscal year 2010: OCO supplemental request: $1.0 billion; 
Fiscal year 2010: Total: $1.0 billion; 
Fiscal year 2011 OCO request: $2.0 billion; 
Difference between fiscal years: $1.0 billion. 

Functional area: IED Defeat; 
Fiscal year 2010: OCO funds available: $1.8 billion; 
Fiscal year 2010: OCO supplemental request: $0.4 billion; 
Fiscal year 2010: Total: $2.2 billion; 
Fiscal year 2011 OCO request: $3.3 billion; 
Difference between fiscal years: $1.1 billion. 

Functional area: Temporary Army End Strength; 
Fiscal year 2010: OCO funds available: $1.0 billion; 
Fiscal year 2010: OCO supplemental request: $0.0; 
Fiscal year 2010: Total: $1.0 billion; 
Fiscal year 2011 OCO request: $2.1 billion; 
Difference between fiscal years: $1.1 billion. 

Functional area: Military Intelligence Program; 
Fiscal year 2010: OCO funds available: $4.6 billion; 
Fiscal year 2010: OCO supplemental request: $1.3 billion; 
Fiscal year 2010: Total: $5.9 billion; 
Fiscal year 2011 OCO request: $7.0 billion; 
Difference between fiscal years: $1.1 billion. 

Functional area: Afghanistan Security Forces; 
Fiscal year 2010: OCO funds available: $6.6 billion; 
Fiscal year 2010: OCO supplemental request: $2.6 billion; 
Fiscal year 2010: Total: $9.2 billion; 
Fiscal year 2011 OCO request: $11.6 billion; 
Difference between fiscal years: $2.4 billion. 

Functional area: Reconstruction/Reset; 
Fiscal year 2010: OCO funds available: $17.0 billion; 
Fiscal year 2010: OCO supplemental request: $1.7 billion; 
Fiscal year 2010: Total: $18.7 billion; 
Fiscal year 2011 OCO request: $21.3 billion; 
Difference between fiscal years: $2.6 billion. 

Functional area: Totals; 
Fiscal year 2010: OCO funds available: $129.6 billion; 
Fiscal year 2010: OCO supplemental request: $33.0 billion; 
Fiscal year 2010: Total: $162.6 billion; 
Fiscal year 2011 OCO request: $159.3 billion; 
Difference between fiscal years: -$3.3 billion. 

Source: DOD.						 

Note: Numbers may not add to totals due to rounding. 

[End of table] 
	
Table: Objective 1: Comparison of Fiscal Years 2010 and 2011 Requests 
by Appropriation Account: 

Account: Military personnel; 
Fiscal year 2010: OCO funds available: $15.0 billion; 
Fiscal year 2010: OCO supplemental request: $1.9 billion; 
Fiscal year 2010: Total: $16.9 billion; 
Fiscal year 2011 OCO request: $15.3 billion; 
Difference between fiscal years: -$1.6 billion. 

Account: Operation and maintenance; 
Fiscal year 2010: OCO funds available: $87.7 billion; 
Fiscal year 2010: OCO supplemental request: $24.5 billion; 
Fiscal year 2010: Total: $112.2 billion; 
Fiscal year 2011 OCO request: $117.1 billion; 
Difference between fiscal years: $4.9 billion. 

Account: Procurement; 
Fiscal year 2010: OCO funds available: $24.9 billion; 
Fiscal year 2010: OCO supplemental request: $4.8 billion; 
Fiscal year 2010: Total: $29.7 billion; 
Fiscal year 2011 OCO request: $24.6 billion; 
Difference between fiscal years: -$5.1 billion. 

Account: RDT&E; 
Fiscal year 2010: OCO funds available: $0.3 billion; 
Fiscal year 2010: OCO supplemental request: $0.3 billion; 
Fiscal year 2010: Total: $0.5 billion; 
Fiscal year 2011 OCO request: $0.6 billion; 
Difference between fiscal years: $0.1 billion. 

Account: Revolving and management funds; 
Fiscal year 2010: OCO funds available: $0.4 billion; 
Fiscal year 2010: OCO supplemental request: $1.0 billion; 
Fiscal year 2010: Total: $1.4 billion; 
Fiscal year 2011 OCO request: $0.5 billion; 
Difference between fiscal years: -$0.9 billion. 

Account: Military construction; 
Fiscal year 2010: OCO funds available: $1.4 billion; 
Fiscal year 2010: OCO supplemental request: $0.5 billion; 
Fiscal year 2010: Total: $1.9 billion; 
Fiscal year 2011 OCO request: $1.2 billion; 
Difference between fiscal years: -$0.7 billion. 

Account: Family housing; 
Fiscal year 2010: OCO funds available: $0.0; 
Fiscal year 2010: OCO supplemental request: $0.0; 
Fiscal year 2010: Total: $0.0; 
Fiscal year 2011 OCO request: $0.0; 
Difference between fiscal years: $0.0. 

Account: Total; 
Fiscal year 2010: OCO funds available: $129.6 billion; 
Fiscal year 2010: OCO supplemental request: $33.0 billion; 
Fiscal year 2010: Total: $162.7 billion; 
Fiscal year 2011 OCO request: $159.3 billion; 
Difference between fiscal years: -$3.3 billion. 

Source: DOD. 
					
Note: Numbers may not add to totals due to rounding. 

[End of table] 

Fiscal year 2011 functional area increases: 

* $2.6 billion for reconstitution and reset of equipment; 
- This investment takes into account depot capacity, equipment 
rotations, and the ability to execute funds within 1 year, as required 
by OMB guidance.
- Officials note that this amount includes an investment in the long-
term requirement for resetting equipment redeploying from overseas to 
inventory.
- GAO has an ongoing engagement reviewing the coordination of the 
reset and reconstitution plans with operational plans. 

* $1.2 billion for temporary end strength increase: 
- The Army requested $2.1 billion (an increase of $1.1 billion over 
the fiscal year 2010 request) in both Operation and Maintenance and 
Military Personnel appropriations for an additional 22,000 temporary 
troops over its planned end strength of 547,400.
- The Navy requested $467 million for an additional 4,400 temporary 
members over its planned end strength of 324,300 to leave their 
assigned units or commands and deploy individually or with a small 
group to support OCO requirements.
- OMB guidance specifically excludes pay and allowances for permanent 
end strength above the level requested in base budget; however, OMB 
and DOD see these Army and Navy increases as OCO costs because they 
are temporary and related to ongoing operations. 

Fiscal year 2011 functional area decreases: 

* $6.5 billion for force protection: 
- In fiscal year 2010, OSD reprogrammed approximately $5 billion from 
the Overseas Contingency Operations Transfer Fund to the Mine 
Resistant Ambush Protected (MRAP) Vehicle Fund for MRAP procurement.
- In the fiscal year 2010 DOD appropriation, Congress provided DOD 
with about $825 million more than it requested for MRAP vehicles.
- Officials stated that these actions allowed them to achieve the 
program objective for MRAP vehicles earlier than originally planned.
- Despite the overall decrease, the fiscal year 2011 request includes 
approximately $3.4 billion for sustainment of vehicles in U.S. Central 
Command theater, retrofit of existing vehicles, and testing. 

* $2.0 billion for baseline fuel: 
- DOD requested $2 billion in the fiscal year 2010 supplemental 
request to cover a onetime shortfall in the fiscal year 2010 baseline 
fuel requirements and an additional $869 million associated with OCO-
related fuel needs.
- Officials believe that they have requested enough in the fiscal year 
2011 OCO request for fuel to support planned overseas requirements. 

[End of Objective 1] 

Objective 2: Assumptions Used to Develop Requests: 

The Joint Staff provided force flow structure and projections for use 
in developing the fiscal year 2010 OCO supplemental request and fiscal 
year 2011 OCO budget request. 

For the fiscal year 2010 OCO supplemental request, the Joint Staff 
finalized the plan for 30,000 troop increase for Afghanistan in 
December 2009. The final plan was developed after President Obama and 
General McChrystal agreed on strategy and timing. 

For the fiscal year 2011 OCO budget request, the Joint Staff developed 
the force flow projections in February 2009, refined the projections 
in June 2009, and finalized them and provided them to the services in 
December 2009. 

The fiscal year 2010 supplemental request assumes an average deployed 
troop strength of 184,000 (100,000 in Iraq and 84,000 in Afghanistan). 

* This is a decrease in Iraq of about 41,000 troops from fiscal year 
2009 levels. 

* Original fiscal year 2010 OCO budget request included funding for a 
troop increase from 44,000 to 68,000 troops in Afghanistan. 

* The fiscal year 2010 OCO supplemental request includes funding to 
increase total troop level to 98,000 in Afghanistan by September 30, 
2010. 

The fiscal year 2011 OCO budget request supports an average deployed 
troop strength of 145,000 (43,000 in Iraq, 98,000 in Afghanistan, and 
4,000 enablers providing support). 

In addition, both requests fund in-theater support (e.g. in Kuwait and 
Qatar) and in-CONUS mobilization troop levels (110,700 in fiscal year 
2010 and 103,200 in fiscal year 2011). 

[End of Objective 2] 

Objective 3: Sensitivity to Operational Changes: 

Officials identified areas where operational changes during the 
execution year could affect DOD's fiscal year 2011 planned funding 
requirements. 

* Deployed troop levels: 
- The OCO budget was developed by factoring in the gradual decrease of 
troops in Iraq and a troop increase in Afghanistan during fiscal year 
2011.
- Any changes in the planned deployment and redeployment schedules to 
react to operational requirements could affect the adequacy of the 
funding.
- Service contracts in theater could be affected if actual force 
levels differ from those planned.
- Our analysis of planned unit deployment and redeployment schedules 
for Iraq shows that potential exists for a change in timing or 
quantity of redeployments, which could affect the adequacy of funding 
to cover the expense of conducting operations in Iraq. 

* Operational tempo: 
- The Joint Staff provides the services with planned operational tempo 
projections that are used to develop contingency costs.
- Any change in operational tempo from the assumed level could affect 
the adequacy of the funding. 

* Active and reserve component mix: 
- Services are provided with planning estimates on reserve component 
and active component split for the year.
- The global force management process, which actually assigns units to 
an operation, does not occur until after the budget estimate is 
established.
- Reserve component units require more and different funding than 
compared to active component units because of their mobilization 
requirements.
- Actual deployment plans for fiscal years 2010 and 2011 do not match 
the active/reserve mix assumptions used to develop the budget requests 
and therefore execution could vary from the budgeted amounts. 

Some construction projects have changed since their inclusion in the 
original fiscal year 2010 and fiscal year 2011 requests. 

* OSD identified $13.5 million in projects from the fiscal year 2010 
supplemental request that have been accelerated and funded with 
contingency construction authority because of pressing requirements 
(10 U.S.0 § 2808). 

* OSD has identified $58.3 million in construction projects from the 
fiscal year 2011 request that will be accelerated using contingency 
construction authority. 

* Officials also identified a $23 million project in the fiscal year 
2011 request that was planned to be funded through the Afghanistan 
Security Forces Fund and therefore does not require Military 
Construction funding. 

* Officials have also planned to increase funding for nine other 
planned construction projects in fiscal year 2011 by about $85 million. 

[End of Objective 3] 

Objective 4: Costs Moved from OCO Budget Request to Base Budget 
Request: 

OSD Comptroller has identified about $1.4 billion removed from the 
fiscal year 2011 OCO request based on OMB guidance. 

Of this amount, officials report that $679 million was added to the 
services' base budget request with an increase to the top line and 
$754 million was absorbed in the planned budget with no increase. 

Prior GAO work has recommended that DOD shift certain contingency 
costs into the annual base budget to allow for prioritization and 
trade-offs among DOD's needs. 

Table: 

Cost category: Navy Operations Tempo; 
Amount: $471 million. 

Cost category: Air Force Flying Hours; 
Amount: $283 million. 

Cost category: Service Member and Family Support; 
Amount: $247 million. 

Cost category: Military Intelligence Programs Initiative; 
Amount: $243 million. 

Cost category: Special Operations Command: Operations Tempo and C4I 
Enablers; 
Amount: $114 million. 

Cost category: Afghanistan — Pakistan Intelligence Center of 
Excellence; 
Amount: $75 million. 

Cost category: Total; 
Amount: $1,433 million. 

Source: DOD. 

[End of Objective 4] 

[End of briefing slides] 

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