Developing Affordable Plans and Budgets to Accomplish Missions

In light of the nation's fiscal imbalance, DOD will face competing demands for resources as it continues to support ongoing operations and prepare for future threats. Because of limitations in its approach to planning and budgeting, DOD faces a number of challenges in prioritizing needs and developing realistic plans and budgets:

• DOD's current approach to planning and budgeting is based on overly optimistic planning assumptions and lacks a strategic, risk-based framework for determining priorities and making investment decisions. As a result, it continues to experience a mismatch between programs and budgets and does not fully consider long-term resource implications and the opportunity cost of selecting one alternative over another.

  Full Report of GAO-06-13 (PDF), Highlights of GAO-08-619 (PDF), and Highlights of GAO-09-663T (PDF)

• For several years, DOD has included certain costs in its funding requests for contingency operations that are for longer--term needs, such as troop strength increases, or costs that were not directly attributable to a specific operation, such as for Navy forward presence missions. This approach has made it difficult to distinguish between incremental costs to support specific contingency operations and longer -term costs typically associated with DOD's baseline budget. We have recommended that DOD move these types of costs into its base budget, and restrict its contingency operations funding requests to incremental costs. Based on new guidance issued by the Office of Management and Budget, DOD, in its fiscal year 2010 budget submission, moved some additional costs to its base request, but continues to include some longer term costs in its contingency operations request.

  Highlights of GAO-08-68 (PDF)

• DOD often does not commit to full funding of its major weapon systems, despite the department's policy to do so. To compensate for shortfalls in its investment strategy, DOD makes unplanned and inefficient funding adjustments, like moving money from one program to another, deferring costs into the future, or reducing procurement quantities.

  Full Report of GAO-08-619 (PDF), Highlights of GAO-09-663T (PDF), and Highlights of GAO-09-326SP (PDF)

^ Back to topWhat Needs to Be Done

DOD needs to take certain actions to improve its approach to planning and budgeting:

• DOD needs to transform its investment decision making from a traditional stove-piped approach to a more joint and strategic, risk-based approach. This reform would fully link strategic goals to plans and budgets; assess the values and risks of various courses of actions as a tool for re-examining defense programs, setting priorities, and allocating resources; and use performance measures to assess outcomes.

  Highlights of GAO-06-13 (PDF), Highlights of GAO-08-619 (PDF)

• DOD needs to develop and implement a strategy to bring the department's current portfolio into balance by aligning the number of programs and the cost and schedule of those programs with available resources.

  Highlights of GAO-08-619 (PDF), Highlights of GAO-09-663T (PDF), Highlights of GAO-09-326SP (PDF)

• DOD needs to continue to refine its definition of incremental costs attributable to specific contingency operations, and develop a plan and timetable to evaluate whether costs not directly attributable to a specific contingency operation should continue to be funded outside of its base budget.

  Highlights of GAO-08-68 (PDF), Highlights of GAO-09-302 (PDF)

^ Back to topKey Reports

Defense Acquisitions

Global War on Terrorism

Defense Acquisitions

Defense Management

Defense Management

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