GAO releases latest report on how government can cut waste, save billions

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Like a diabetic binging on jelly doughnuts, sometimes it seems the government can’t stop itself from wasting billions and billions on overlapping or duplicative programs – and from just plain inefficient approaches. For 10 years the Government Accountability Office has been pointing out these efforts and making recommendations to improve things. Its latest version is just out. The GAO’s director of strategic issues, Jessica Lucas-Judy, joined Federal Drive with Tom Temin for some highlights.

Interview transcript:

Tom Temin: We should start, I guess, by saying it’s not all bad news. I think early on in the report, you point out that agencies have made progress on many, many of the recommendations that have come up in prior years, correct?

Jessica Lucas-Judy: That’s correct. Yes, there’s quite a bit of good news in this year’s report. As you mentioned, this is our 10th in the series. And every year we report on new ways to better manage fragmentation, overlap or duplication in federal programs, basically ways to make the programs work more effectively or more efficiently. And then we also identify a number of ways that the government could save money or increase the revenue that it’s collecting. And in this year’s report, in particular, we talk about the more than 900 actions from our first nine reports; we go and we follow up on all of them. And what we found is that about 80% of them, or almost 80% of them have been partially addressed or fully addressed. And that’s resulted in about $429 billion in savings so far.

Tom Temin: All right, and on some of the things that have come up this year, I mean, there’s really a hierarchy here. Some of them can save tens of billions of dollars, like the Energy Department’s treatment of Hanford’s low-activity waste, which is, you know, pretty arcane in terms of what the government is doing, but it’s one of the biggest annual savings you’ve got, and also the advanced technology vehicles manufacturing loan program. I have to confess I’ve never even heard of that one. So what are a couple of the big ones this year that could save the most money?

Jessica Lucas-Judy: One of the ones is actually an area that we’ve reported on the past, on Navy shipbuilding. But this year, we’re talking about a report that we issued relatively recently in March 2020, where we found that we were looking at the Navy’s sustainment practices. So it’s not just the amount of money that’s required to build a ship like an aircraft carrier, or a destroyer, or a submarine. But you have to factor in what it costs to actually keep the ship going. Just like if you buy a car, you don’t expect it to break down as soon as you drive off the lot, right? That would be a lemon. So it’s the same thing with the ship, you want to make sure that all the systems are functioning the way that they’re designed to, so you can actually use the ship. And that contributes a lot to the cost. And what we found was that there were a number of problems with some of the systems in the ships, and these were known problems. And the Navy had to go back and pay to fix them after the fact because they weren’t being addressed in the beginning and that included things like plumbing, like the toilets not flushing properly. And when you’re talking about a ship, it has to be able to go for a month. At sea, that’s a major problem. And so, fixing these problems cost the Navy about $4 billion. And then we also found that they weren’t estimating the costs of sustainment accurately. And for the six programs that we looked at, they underestimated the sustainment costs by about $130 billion. So we made 12 recommendations to help improve the way that the Navy treats sustainment as part of its acquisition process.

Tom Temin: Sure. Notwithstanding that you can’t have 3,000 soldiers tinkling over the side of the ship every time they’ve got to go, it seems like this has its roots in the way contracting and the arrangements with contractors are designed from the outset, that is to say, a quality issue should be the contractor’s responsibility, whereas actual long-term maintenance might be properly the Navy’s.

Jessica Lucas-Judy: Exactly. That’s something–defense, in general, is a place that we have recognized and realized a lot of cost savings over the past 10 years. Just one example is just in making some improvements in weapon systems acquisition that’s saved the government about $180 billion so far. And we have other recommendations to continue to improve that.

Tom Temin: We’re speaking with Jessica Lucas-Judy. She is director of strategic issues at the GAO. And, maybe, let’s step back a moment and do some definitions because you have specific ways of looking at three issues: fragmentation, overlap and duplication. And they’re not all the same problem, even though they all cost money.

Jessica Lucas-Judy: Right, they can cost money. And as I said, it’s really about making the programs more effective because just having duplication or overlap, or fragmentation, by itself doesn’t necessarily mean that there’s a problem. Sometimes you want some redundancy in the system, you want to make sure that there’s backup or you might need a lot of different programs that have similar purposes to make sure that nobody’s falling through the cracks that you’re serving everybody who needs to be served. So what we do is we’re looking for where there’s a bad effect. So, duplication’s pretty self explanatory. That’s where you have programs that are doing the same thing for the same people for the same purposes. Overlap is where they’re trying to serve maybe similar types of populations. And then fragmentation is where agencies are working towards similar goals. But there might be different roles and responsibilities. And maybe those roles and responsibilities aren’t as clear as they should be, or the progress that they’re trying to achieve, the goals that they’re trying to achieve aren’t the same across all the agencies, and so it’s difficult to know if they’re actually getting where they need to be. So those are some of the types of things that we look for in our reviews and where we make recommendations.

Tom Temin: And one of the initiatives that seems to get to a lot of those problems is federal shared services, and in one form or another, that idea of sharing back-office functions such as in IT have — I think it dates back to the George W. Bush administration — that idea and yet it comes up again that it could save many, many more billions over the next 10 years or so.

Jessica Lucas-Judy: Right. So that’s another place where we have several different areas that we’ve looked at in this report, some of them having to do with shared services like payroll or other support functions and where the government could work together more effectively and more efficiently to get some kinds of economies of scale in those services. Then we also look at data centers and their requirements for agencies as more and more information is going online, more things are virtual, you got to have places to store all those amounts of data. And what was happening is agencies were creating their own data centers for storage, and they didn’t necessarily need them all, or they were having to let different contracts and with different terms of service. So there’s requirements for agencies to try to consolidate their data centers wherever possible: again, looking for efficiencies, looking for economies of scale, and they’ve made a lot of progress, but there’s still tens of billions of dollars more that potentially could be saved in that area.

Tom Temin: And then there are areas where it may not save money but could improve effectiveness and, really, national security and national competitiveness. The one I’m looking at is federal research, where you say implementing leading practices for collaboration and so on, to ultimately maintain U.S. competitiveness in two pretty important areas: quantum computing and synthetic biology. So that wasn’t a money savings, but rather, “Let’s do things better” type of recommendation.

Jessica Lucas-Judy: Exactly. So there you know, you have different agencies that are working towards doing this research. It’s very important research, but they again, be clear about how they’re working towards similar goals, measuring progress, sharing information. There’s another one in this year’s report about actually making the results of that and the types of research that are funded by public dollars making that information available publicly. And agencies had different ways of doing that and different standards for doing so. So we thought it was important that they work together and, again, work toward the common goals so they can share that information and make better use of it.

Tom Temin: And what about some of those very specific ideas? That is to say, the DOE’s treatment of Hanford’s low-activity waste, where there could be tens of billions of dollars in savings from a single place?

Jessica Lucas-Judy: Right. And there, there are certain requirements about how they treat the waste. Obviously, it’s very important to do it right. But what we found is if they had a little bit more flexibility, similar flexibility that they have in some of their other locations, for classifying some of that waste and treating it appropriately, they could potentially treat the waste at a lower cost, and potentially do it more quickly, which we think would also improve safety. So it’s both a cost savings issue and and a safety issue as well.

Tom Temin: And even though GAO has done this every year for 10 years and will continue to, we presume, does it pretty much, in your view, make at least some members of Congress and some agency heads stop and take a look each year and see what’s in here?

Jessica Lucas-Judy: Exactly. That’s one of the reasons that we like this report so much. It’s taking the work that GAO’s done over the past year in a whole range of different areas: health care, Veterans Affairs, energy, defense, tax issues, education, putting it all together in one place and making it, we hope, easier for our congressional clients, members of the public, for the agencies that we audit, to be able to see some of the actions that they could take that could have a big impact. We also put our information on our website @gao.gov. We have an online action tracker, where people can look through all of the recommendations that we’ve made in our 10 reports, check the status. There’s a downloadable spreadsheet, so if you’re really into data, you can manipulate the data, you can sort it by topic, by agency, really get a sense of what the progress is that’s been made and what still needs to be done.

Tom Temin: Alright folks, no place to hide now. Jessica Lucas-Judy is director of strategic issues at the Government Accountability Office. As always, thanks so much.

Jessica Lucas-Judy: Thank you. It’s a pleasure.

Read the report here.

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