DOD officials cited  various reasons why compiling and reporting on this information may not  be feasible. Since initiating its initial round of initiatives for fiscal year 2012, DOD has  continued to identify and implement efficiency initiatives. Specifically,  DOD issued written guidance that standardizes and expands the type of  information on efficiency initiatives that the military departments and  SOCOM are expected to report, which may improve visibility on the  progress and risks in implementation for DOD decision makers. In contrast to the way they reported before, the military  departments and SOCOM were now expected to report consistently and  provide the status of their efficiency initiatives, including summary  information related to (1) whether original net savings projections across  the Future Years Defense Program are being met, (2) risks to  program(s), mission(s), or resources associated with the efficiency  initiative (characterized as “low”, “medium”, or “high” risk), and (3) any  risks to “milestones” or the implementation status of the efficiency  initiative (e.g., characterized as “on track,” “off track but can meet major  milestones,” or “off track and cannot meet major milestones”). Only in  instances where the military departments and SOCOM identified  programs that were not achieving original net savings estimates or where  program or milestone risk had been identified, the guidance requires  further detail, including how implementation would be achieved. In reviewing the military departments’ and SOCOM’s February 2013 and  March 2013 reports, we observed that, consistent with the  aforementioned February 2013 guidance, the military departments and  SOCOM reported details associated with only those efficiency initiatives  that were not achieving original net savings estimates or where program  or milestone risk had been identified. Prior to the February 2013  guidance, some departments and SOCOM had previously chosen to  report on all their initiatives. In reviewing the reports developed by the  military departments and SOCOM in February 2013 and March 2013, we  observed that information on all initiatives was now unavailable to DOD  decision makers, thus hindering their ability to assess implementation  progress across the full range of efficiencies. While obtaining this broader set of information, DOD stated in its written  comments on a draft of this report, provided on January 6, 2014, that it  will narrow the scope of efficiency initiatives that will be tracked due to the  period of constrained resources it is experiencing. As a result, we continue to believe  that our prior recommendation in our December 2012 report has merit  and should be implemented. Military Departments and SOCOM Vary in the Extent and Nature of Their Efforts to Evaluate the Impact of Their Efficiency Initiatives

The military departments and SOCOM have taken steps to evaluate  some of their efficiency initiatives, such as establishing performance  measures and collecting performance data. However, these efforts have  largely occurred on an ad hoc basis and vary by efficiency initiative  because DOD has not established a requirement for performing such  evaluations. As a result, DOD lacks a systematic basis for evaluating the  impact of its efficiency initiatives on improving program efficiency or  effectiveness. In setting forth the initial efficiency initiatives, the Secretary of Defense  intended for DOD to improve the effectiveness and efficiency of its  programs and activities. The Secretary also directed that any efficiency  initiative must be specific, actionable, and measurable. As previously discussed, the Comptroller’s October 2013 guidance  provides direction on how the military departments and SOCOM are to  approach reporting on the status of their efficiency initiatives, but does not  require them to develop approaches for evaluating the impact of initiatives  on achieving desired outcomes. In practice, we found that the military  departments and SOCOM varied in the extent to which they evaluated  individual efficiency initiatives, including whether they had established  measures or indicators to gauge the impact on program efficiency or  effectiveness beyond savings. Recommendation for Executive Action

To enhance DOD’s ability to determine whether its efficiency initiatives  are having the desired effect of improving efficiency and effectiveness, we  recommend that the Secretary of Defense require the military  departments and SOCOM to develop approaches for evaluating the  impact of their efficiency initiatives, such as establishing performance  measures or other indicators, collecting related performance information,  and using this information to measure progress in achieving intended  outcomes associated with their initiatives until implemented. Appendix I: Scope and Methodology

To determine the progress DOD has made in adjusting its approach to  tracking and reporting on the implementation of its efficiency initiatives  since we last reported in December 2012 and to assess the extent to  which DOD is evaluating the impact of its efficiency initiatives on DOD  programs and activities, we reviewed guidance and documentation issued  at the department-wide level as well as within the military departments  and SOCOM.
Why GAO Did This Study

In May 2010, the Secretary of Defense announced a department-wide initiative with the goal of achieving efficiencies and reducing excess overhead costs while reinvesting those savings in sustaining DOD's force structure and modernizing its weapons portfolio. The Secretary tasked the military departments and SOCOM to find estimated savings of about $100 billion over the period of fiscal years 2012 to 2016. For fiscal years 2013 and 2014, DOD identified additional efficiency initiatives. The National Defense Authorization Act for Fiscal Year 2012 mandated that GAO assess the extent to which DOD has tracked and realized savings proposed pursuant to the initiative to identify $100 billion in efficiencies. As the second report in response to this mandate, this report addresses 1) DOD's progress in adjusting its approach to tracking and reporting on the implementation of its efficiency initiatives since GAO's December 2012 report, and 2) the extent to which DOD is evaluating the impact of its initiatives. GAO reviewed guidance, and analyzed and discussed information developed after December 2012 with DOD officials.

What GAO Found

The Department of Defense (DOD) has refined its approach for tracking and reporting on the status of efficiency initiatives by establishing specific requirements to standardize and expand the type of information that the military departments (Army, Navy, and Air Force) and U.S. Special Operations Command (SOCOM) report to senior decision makers. Initially, DOD provided general direction through emails, briefings, and training, which gave the military departments and SOCOM flexibility to selectively report on the initiatives that they believed were important, resulting in inconsistencies. For example, prior to February 2013, all but the Navy had chosen to report on all their initiatives. In February 2013, the DOD Comptroller issued written guidance that specified the type of information to be reported, including 1) whether original net savings projections are being met, and 2) any associated program or milestone risks. In instances where original net savings projects were not met or risks were identified, the guidance required further detail such as how implementation would be achieved. As a result, in their March 2013 reports, the military departments and SOCOM only reported details on those initiatives that were not achieving original net savings estimates or where risk had been identified. GAO observed, during this review, that information on all initiatives was now unavailable to DOD decision makers, thus hindering their ability to assess implementation progress across the full range of initiatives. Comptroller officials agreed that such information would enhance DOD's oversight, and in October 2013, the DOD Comptroller issued updated guidance, directing that this information also be reported on initiatives on track to achieve savings or not experiencing risk. The military departments and SOCOM subsequently began submitting reports with this broader set of information.
The military departments and SOCOM have taken steps to evaluate the impact of some of their efficiency initiatives, such as establishing performance measures to assess their impact on achieving desired outcomes. However, this has largely occurred on an ad hoc basis and varies by initiative because DOD has not required such evaluations. As a result, DOD lacks a systematic basis for evaluating whether its various initiatives have improved the efficiency or effectiveness of its programs or activities. In setting forth initiatives, the Secretary of Defense intended for DOD to improve the effectiveness and efficiency of its programs and activities, and that related initiatives should be specific, actionable, and measurable. While DOD has provided direction on how the military departments and SOCOM are to report on implementation status, this direction does not require them to develop approaches for evaluating the impact of their initiatives. In practice, the military departments and SOCOM varied in the extent to which they evaluated initiatives, including whether they had established measures or other indicators to assess outcomes. For example, GAO found instances where the military departments and SOCOM had established measures and assessed progress for some but not all initiatives. Developing a more systematic approach to evaluating the impact of its initiatives could provide DOD with more complete information to assess whether the initiatives are accomplishing desired outcomes, beyond achieving savings, and whether adjustments are needed in the scope of implementing the initiatives.

What GAO Recommends

GAO recommends that DOD establish a requirement for the military departments and SOCOM to develop approaches for evaluating the impact of their efficiency initiatives, such as developing performance measures or other indicators. DOD concurred with GAO's recommendation, and provided additional comments that it will cease tracking initiatives that strictly call for program terminations. GAO believes this to be a reasonable approach.