Outsourcing DOD Logistics: Savings Achievable But Defense Science Board's Projections Are Overstated
NSIAD-98-48
Published: Dec 08, 1997. Publicly Released: Dec 08, 1997.
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Highlights
Pursuant to a congressional request, GAO reviewed the basis for the Defense Science Board's (DSB) estimate that the Department of Defense (DOD) could potentially save $6 billion annually by reducing its logistics infrastructure costs within the continental United States, focusing on: (1) the opportunities for logistics infrastructure savings; and (2) DOD's and GAO's analyses of the DSB's projected logistics infrastructure savings.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To aid in achieving the most savings possible, the Secretary of Defense should require the development of a detailed implementation plan for improving the efficiency and effectiveness of DOD's logistics infrastructure, including reengineering, consolidating, outsourcing logistics activities where appropriated, and reducing excess infrastructure. The plan should establish time frames for identifying and evaluating alternative support options and resources, including personnel and funding, for accomplishing the cost-reduction initiatives. |
Closed – Not Implemented
DOD concurred with the intent of GAO's recommendation. However, DOD concluded that a separate plan was not needed because DOD had a number of actions under way that were consistent with GAO's recommendation. Among the actions cited by DOD were the Quadrennial Defense Review, Defense Review Initiative, Omnibus legislative proposals, and the operations of its Defense Depot Maintenance Council. Accordingly, DOD has taken the position that additional action is not needed.
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| Department of Defense | DOD should present the plan to Congress in much the same way it presented its force structure reductions in the Base Force plan and the bottom-up review. This would provide Congress a basis to oversee DOD's plan and would allow the affected parties to see what is going to happen and when. |
Closed – Not Implemented
DOD concurred with the intent of GAO's recommendation. However, DOD concluded that a separate plan was not needed because DOD had a number of actions under way that were consistent with GAO's recommendation. Among the actions cited by DOD were the Quadrennial Defense Review, Defense Review Initiative, Omnibus legislative proposals, and the operations of its Defense Depot Maintenance Council. Accordingly, DOD has taken the position that additional action is not needed.
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Topics
Cost effectiveness analysisDefense cost controlDefense procurementFuture budget projectionsLogisticsMilitary downsizingMilitary inventoriesPrivatizationProgram evaluationReductions in force