Summary

GAO and the Defense Department (DOD) fully agree that the concepts and goals of the Defense Business Operations Fund are worthwhile. Applying businesslike management practices should substantially improve DOD's $81 billion operations under the Fund. Achieving these benefits will be difficult and time consuming, however. A favorable outcome is by no means certain. DOD must adopt workable policies that are fully consistent with businesslike practices. Existing systems used to manage and control resources must be substantially upgraded and effective new systems developed and implemented. If these steps are not taken quickly, the business concepts of the Fund may be discredited, jeopardizing this fundamental change in DOD management. Further, the sooner these steps are taken, the sooner the cost-saving potential of the Fund will be realized. In GAO's view, progress to date has been slow. Key policies and systems have not been developed as rapidly as they should have been. At this point, DOD top management needs to ensure that enough expertise and resources are being applied and that the efforts of the organizations involved are properly supported and coordinated.