DOD Budget:

Evaluation of Defense Science Board Report on Funding Shortfalls

NSIAD-94-139: Published: Apr 20, 1994. Publicly Released: Apr 20, 1994.

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Pursuant to a congressional request, GAO reviewed the Defense Science Board Task Force's report on the fiscal years 1994 through 1999 Future Years Defense Program.

GAO found that: (1) the task force's estimated savings from defense management report decisions (DMRD) could be overstated by $9 billion to $11 billion; (2) the funding shortfalls are a result of delayed DMRD implementation plans and unreasonable cost savings estimates; (3) the services and defense agencies could absorb some funding shortfalls without affecting their combat readiness; (4) the task force's estimated funding shortfall for weapons systems acquisition could be unreasonably low because the Department of Defense (DOD) has overstated the effectiveness of its cost control initiatives and has historically experienced cost overruns and project delays; (5) the task force may have substantially underestimated environmental cleanup and compliance costs because future cost increases could not be quantified; (6) DOD environmentally-related shortfalls could range between $5.1 billion to about $8.8 billion; (7) the task force's defense health care shortfall estimate was not reliable because the methodology used to calculate the shortfall was unclear; (8) the task force's estimated shortfall for operation and maintenance costs could be significantly understated because future projected savings are overly optimistic; and (9) although DOD agrees with most of the task force's findings, there are several areas that need correction or clarification.

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