The Department of Defense spent about 90 billion dollars in fiscal year 2002 to purchase services. How can the agency save significant amounts of money when it spends this vast sum?
DOD and the military departments have a management structure for reviewing individual services acquisitions of $500 million or more, but that approach does not provide a departmentwide assessment of how spending for services could be more effective. According to GAO, DoD needs to put more emphasis on developing a strategic orientation by setting performance goals, including savings goals, and ensuring accountability within the agency for achieving these goals.
(DOD) spending on service contracts approaches $100 billion annually. Recent legislation directs DOD to manage its services procurement more effectively.
DoD is developing an automated system to analyze spending within the agency. Each service agency is pursuing its own intiatives to save money but there is no agency-wide plan to coordinate these activities. Not surprisingly, GAO recommends that DoD look at the problem from a wider perspective and develop such an agency-wide plan.
You can download the GAO report from the link on the left hand side of this page.