Department of Defense

Key Reports

The Department of Defense's (DOD) mission is to defend the United States from attack upon its territory and to secure its interests abroad. With an annual appropriation of about $513 billion in fiscal year 2009, and additional funding of about $893 billion in the past several years to support overseas military operations, DOD has been entrusted with more of the taxpayers' dollars than any other federal agency.

Given its size and mission, it is also the largest and most complex organization to manage in the world. As such, DOD faces a number of management challenges and underlying fiscal pressures to meet the demands of the current security environment and future threats and to achieve greater efficiency within its organization.
Overall, DOD continues to experience a mismatch between its programs and budgets due to the use of overly optimistic planning assumptions and the lack of a strategic approach to investment decision making. As a result, it has too many programs for the available dollars, which often leads to program instability, costly program stretch-outs, and program termination. The current administration has emphasized the need for greater transparency and fiscal discipline, and has taken some positive steps. For example, Secretary Gates, in developing DOD's fiscal year 2010 budget submission, adjusted or terminated programs, indicating a willingness to reevaluate programs and make the hard decisions to eliminate programs or take other corrective action on those that are not performing well.
Since the terrorist attacks of September 11, 2001 (9/11), U.S. forces have operated at a high pace and gained considerable combat experience. Yet, extended operations in Iraq and Afghanistan have taken a toll on readiness, especially in the Army and Marine Corps. Rebuilding readiness is a costly and complex effort but will be even more challenging because, at the same time, DOD is pursuing broad-based initiatives to reshape and grow the size of the force, as well as modernize and transform capabilities. It is also experiencing rising personnel costs for pay and benefits, and health care, as well as significant growth in the costs of its weapon systems programs.
DOD spends billions of dollars to sustain key business operations intended to support the warfighter, including systems and processes related to the management of contracts, finances, the supply chain, support infrastructure, and weapon systems acquisition. While DOD's top management has demonstrated a commitment to transforming business operations and has initiated a number of reforms to address long-standing weaknesses, significant inefficiencies remain. For example, DOD bears sole responsibility for eight defense specific areas on GAO's list of 30 high risk government operations and shares responsibility for seven government-wide high risk areas-- all of which are related to business operations.