This report, part of GAO's performance and accountability series, discusses the major management challenges and program risks facing the Department of Defense (DOD). DOD has begun several Department-wide reform initiatives and other actions to improve its key business processes in such areas as financial and information management, weapons systems acquisitions, and logistics reengineering. However, problems continue to plague DOD in several areas, including financial management, information technology, acquisitions, contracts, support infrastructure, and logistics.