The Pentagon's sweeping Defense Reform Initiative has yet to yield billions of dollars in expected savings, according to a new General Accounting Office report.
The Defense Reform Initiative is Defense Secretary William Cohen's sweeping plan to modernize Defense business practices by outsourcing hundreds of thousands jobs, eliminating unneeded facilities and processes and adopting commercial-sector practices like electronic commerce. The initiatives are expected to free up billions of dollars for buying new weapon systems.
While DoD has made some progress on the reforms, "widespread savings have not been achieved, primarily because most individual initiatives are long-term efforts that require significant up-front investments to implement," GAO said in a July 25 report, "Defense Management: Actions Needed to Sustain Reform Initiatives and Achieve Greater Results" (NSIAD-00-72).
GAO rated DoD progress on several specific reforms. Those "completed or likely to be completed on schedule" are organizational streamlining, military pay increases, use of purchase cards and performance contracts, Defense Information System Agency center consolidations and demolition and disposal of existing facilities.
Initiatives rated "making some progress but behind schedule" are competitive sourcing, paperless contracting, travel reengineering, electronic malls and household goods transportation reform.
GAO found DoD will require "many years" to fully implement acquisition, financial management and logistics reform.
Barriers to reform include the size of DoD, technical problems in linking old and new systems, and employee opposition to reforms that they believe could cost them their jobs.
Also, GAO said the Pentagon must do a better job in managing the reforms by creating overarching goals and an investment strategy.
Stan Soloway, deputy undersecretary of Defense for reform, responded that DoD has put performance goals and scorecards in place to ensure goals are being measured and met.
"We believe real progress, is in fact, being made, but also agree that the pace of reform must increase," Soloway said.