GAO says DoD isn’t cashing in on billions in savings

The Defense Department is missing out on billions of dollars in savings by not addressing some recommendations from the Government Accountability Office, a new ...

A new annual report from the Government Accountability Office found the Defense Department still has not addressed issues that could add up to billions of dollars in savings.

The report also found new areas where DoD was inefficient or duplicative that could save the department millions more.

The report is the sixth annual attempt by GAO to address the government’s imbalance between revenue and spending.

In addition to inefficiencies in DoD, GAO found the Internal Revenue Service and the Department of Health and Human Services could save billions in public referral programs and cutting back on duplicative Medicare coverage.

“Congress and executive branch agencies can act to improve the efficiency and effectiveness of government programs and activities,” the report states. “Opportunities to take action exist in areas where federal programs or activities are fragmented, overlapping, or duplicative.”

One of the biggest savings DoD has let languish dates back to 2013. The department still has not taken advantage of an estimated $4 billion or more in savings by better leveraging its buying power.

GAO states DoD still needs to direct more procurement spending to existing strategically sourced contracts and expand strategic sourcing practices to its highest spending procurement categories.

Another area DoD has not taken advantage of is in the controversial realm of facilities consolidation. Last year, GAO recommended DoD identify unutilized and underutilized facilities for disposal. DoD still has not addressed that critique.

The recommendation moves into the world of Base Realignment and Closure, which is a touchy subject for lawmakers. While lawmakers understand the benefits of closing bases to save money, many are reluctant to close bases in their district for fear of causing economic instability.

A prioritized list of areas that could be closed may help get the ball rolling on the issue.

While the ghosts of past recommendations continue to haunt DoD, the report adds on a handful of new suggestions for the department to work on.

One of the biggest issues pointed out the Pentagon this year is the way the department buys its weapons.

GAO found DoD is not effectively using portfolio management to optimize the more than $1 trillion in total acquisition costs for its 78 major weapons systems.

The report stated if DoD bought weapons with a portfolio-wide approach instead of buying piecemeal it would ensure the procurement was strategy-driven, affordable and balanced for near and far-term needs.

During an April 13 Oversight and Government Reform Committee hearing on the GAO report, DoD’s Deputy Chief Management Officer David Tillotson III said DoD agrees with GAO’s intent to move in the direction of strategic portfolio management, but had differences about the implementation.

Tillotson said the Deputy Defense Secretary and the Vice Chairman of the Joint Chiefs of Staff have conducted strategic portfolio reviews across families of weapons systems for the past three years.

Tillotson did not go into detail as to what differences DoD had with the implementation of GAO’s recommendations.

GAO also found duplicative efforts in the way DoD stores occupational and environmental health data. The data is needed to track and assess service-related health conditions for service members and veterans

GAO stated DoD policy was to blame for the duplication and recommended DoD pick one information system to store the data and revise department policy to reflect the move.

GAO’s recommendation is currently under review by DoD.

It’s not all bad news for the Pentagon, however. The department realized some savings from past GAO reports.

The report stated DoD is saving $1.2 billion annually since complying with the 2011 GAO recommendation to close or realign European facilities after a comprehensive study.

The GAO’s recommendations as a whole have given the government tons of savings.

Over the past five years the government has fully addressed 41 percent of corrective actions recommended by GAO adding up to $125 billion in savings by the year 2025, House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-Utah) said during the hearing.

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