Future Years Defense Program:

Optimistic Estimates Lead to Billions in Overprogramming

T-NSIAD-95-83: Published: Jan 19, 1995. Publicly Released: Jan 19, 1995.

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GAO discussed the Department of Defense's (DOD) Future Years Defense Program (FYDP). GAO noted that: (1) FYDP estimates for 1995 through 1999 could exceed $150 billion; (2) FYDP overprogramming is a result of negative adjustments, overly optimistic savings, and understated costs; (3) the current FYDP exceeds the Administration's fiscal year 1995 budget submission by $21.6 billion due to undistributed future negative adjustments; (4) DOD use of negative adjustments to offset overprogramming costs is not consistent with congressional intent; (5) DOD should not use negative adjustments to bring its programs, projects, and resources in conformance with the President's budget; (6) DOD has substantially overestimated future savings from base closings and proposed management improvements; (7) DOD cost estimates for weapons systems development and procurement, environmental remediation, pay raises, and peacekeeping operations could be understated by $112 billion; (8) the Administration plans to increase defense spending by $25 billion and DOD plans to terminate or delay some major acquisition programs between 1996 and 2001; and (9) overoptimistic DOD budget assumptions have resulted in program instability, delays, and terminations.

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