Summary

The Defense Reform Initiative represents an important set of measures designed to improve the effectiveness and efficiency of the military's business operations. This report supplements the information contained in an earlier GAO report (GAO/NSIAD-99-87, Apr. 1999) and provides additional information on the performance measures the Defense Department (DOD) has in place to track the progress of the initiative. This report discusses (1) the types of performance measures used to track progress toward achieving the initiative's goals; (2) opportunities to add or improve on existing performance measures, and (3) performance measurement limitations.

GAO noted that: (1) DRI initiatives are assessed largely through output performance measures that provide an indication of the status of implementation; (2) as the Department of Defense (DOD) continues its efforts to reform its business processes, opportunities exist to increase the emphasis on outcome measures that would help it better assess results of the initiatives individually and collectively; (3) however, credible financial and other performance data needed to establish more outcome-oriented measures are not available in some areas; and (4) the fact that DOD does not have adequate cost systems continues to impair its ability to develop reliable cost-based performance measures.