The Department of Defense (DoD) is making significant progress to meet savings goals under very trying fiscal and economic conditions, according to DoD Comptroller Bob Hale. Testifying before the House Committee on Oversight and Government Reform, Hale said DoD “owes it to the taxpayers to make the most out of every dollar they entrust to us.”
Hale told the committee that efficiency initiatives in the FY012 budget will save $150 billion over FY2012-16. Initiatives in the FY2013 budget will save another $60 billion over the next five years. Although he did not reveal any specifics about the FY2014 budget (expected to go to Congress in early April), Hale assured the committee that “DoD will again propose a substantial package of initiatives aimed at improving efficiency.”
While many call these savings initiatives “efficiencies,” Hale said they would be better described as “efforts to make more disciplined use of resources.”
Hale then provided an overview of DoD’s savings initiatives that have terminated weapon programs, eliminated lower-priority programs, and improved business practices.
Programs were ended or restructured because procurement needs had been met or programs could not justify their expense, he said. Over 20 weapons programs have been ended or restructured during the past several years, Hale said. Termination examples include the second engine for the Joint Strike Fighter, the Navy’s DDG-1000 ship program, the Air Force T-ST satellite, the Army’s Future Combat System (FCS) and the Marine Corps Expeditionary Fighting vehicle.
Hale pointed out that DoD eliminated the Joint Forces Command, the Navy disestablished the Second Fleet Headquarters, the Air Force consolidated two Air Operations Centers in Europe, and the Army is consolidating six installation management command HQ into four.
The Military Services have also introduced efficiency initiatives that have reduced costs. These, he said, include fuel saving initiatives, contract consolidations to get better prices, and shipping cost reductions.
Hale appealed to the committee for congressional support for the Department's savings proposals. He identified several instances where Congress has rejected proposals that involve billions of dollars: terminating the Global Hawk Block 30 and eliminating some Navy ships and Air Force aircraft. He said he hoped that Congress will revisit these decisions.
DoD is also moving forward in its efforts to improve its financial controls and processes, he said. The Financial Improvement and Audit Readiness (FIAR) plan will yield audit-ready financial statements and improper payments continue to decline, he emphasized. DoD's improper payments error rate in FY2012 was less than one percent, while the government-wide rate was four percent.
Even so, Hale said the significant savings DoD has achieved and is proposing will not enable DoD to avoid the disastrous effects of the almost $46 billion in cuts required by sequestration.