Federal Manager's Daily Report

DoD does not have a reliable cost savings estimate to support the cost savings it has identified under a budget law, GAO has said.

The fiscal 2016 DoD budget required that the Pentagon achieve at least $10 billion in cost savings from headquarters, administrative and support activities for fiscal 2015-2019 and report on its plans with its budget submissions for fiscal years 2017 through 2019. That law also required GAO to assess those plans.

It said that DoD has produced two separate savings estimates totaling $13.1 billion but that the figures are “unreliable because DoD-provided documentation, when compared with best practices for cost estimates, was not sufficiently detailed to support the estimate.”

It said that one of the estimates was “not auditable” because there was no baseline to compare against, and that parts of the other did not include information on specific actions planned to achieve the claimed savings, GAO said. “Without detailed documentation allowing someone unfamiliar with the program to easily recreate or update the cost savings estimate, the estimate is not reliable and, thus, does not allow for clear tracking of cost savings,” it said.

It said DoD partially concurred with a recommendation to develop reliable cost savings estimates that include detailed information and documentation, but that the department did not address how it intends to carry it out.