From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Big Bite: Department of Defense Key Mission Challenges 

Description: The United States faces a complex national security
environment. How has over a decade of warfare impacted our military's
readiness to face new and evolving threats? We take a look at this and a
host of other challenges facing the Department of Defense in this
longer-form podcast.

Related GAO Work: GAO-17-369: Department of Defense: Actions Needed to
Address Five Key Mission Challenges

Released: June 2017

[ Background Music ]

[ Sarah Kaczmarek: ] And so, that's another area where DOD could take a
more comprehensive look to see if other service members may have felt
the same way.

[ Cathy Berrick: ] There's an increased urgency right now for DOD to
address these challenges that they're facing.

[ Sarah Kaczmarek: ] This is the Watch Dog Report, Big Bite Edition.
We'll really sink our teeth into our nonpartisan reports on federal
spending and ways to make the government work better. I'm Sarah
Kaczmarek. So, the military services today are generally smaller and
less combat ready than they have been in many years. According to the
Department of Defense, each service has been forced to cut items like
training, maintenance, and modernizing their equipment. In this edition,
we're diving into GAO's recent comprehensive report to Congress on DOD.
Now, we've issued hundreds of reports in the past on slices of DOD's
operations, but this is the first GAO report that really brings it all
together. We'll talk about the bigger picture of whether DOD is ready to
confront new and evolving threats.

[ Cathy Berrick: ] I mean, when you look at the military, they really
have been stretched with over a decade of war, and they're in a posture,
right now, of trying to recover readiness to prepare for current and
future contingencies.

[ Sarah Kaczmarek: ] So, that's Cathy Berrick, Managing Director of
GAO's Defense Capabilities and Management team. Her team led GAO's
independent investigation into the Department of Defense's mission
challenges. Cathy went on to tell me about why training and modernizing
equipment are just a key part of solving this puzzle.

[ Cathy Berrick: ] One key element of this, in order to restore
readiness, is training. When you look at the operations that our
military has been engaged in over the past decade, it's largely been
counter insurgency operations. What's important now is for DOD to focus
on what's called full spectrum training where they train for the full
range of missions that they may encounter. So, they need time to be able
to do that.

[ Sarah Kaczmarek: ] So, you talked about personnel, what about the
equipment side of this?

[ Cathy Berrick: ] Yeah, equipment is also an area that needs some
significant attention. Just to give you the Navy as an example. Because
of operational demands, the Navy has put their ships in deployment for
longer periods of time, and they've also had to either reduce or defer
scheduled maintenance on those ships. So, what happens is the need for
maintenance has built up over time, and ships are breaking down more.
They need to be in maintenance for even longer periods of time because
of those delays, and that's really affected the Navy's readiness.

[ Sarah Kaczmarek: ] And this can't be something that just the Navy is
facing. What about, say, the Air Force?

[ Cathy Berrick: ] So, the Air Force, not only do they have constant
operational demands, but they also have an aging fleet. And, they
haven't been able to modernize that fleet, and they also have fewer
aircraft to fly. Now, the Air Force has come up with a plan for
rebuilding readiness, but they're saying it's going to take over a
decade to achieve and even some think that's ambitious. But, they said,
that's all predicated on the fact that they get the funding that they
need and that there's a slowing of operations. And, we all know that
those two factors are largely beyond the Department's control.

[ Sarah Kaczmarek: ] DOD's almost $600 billion budget accounts for about
half of the federal government's discretionary spending, and its costs
are significant and growing. That got me thinking. How can the
Department of Defense make sure it's spending its money appropriately?

[ Cathy Berrick: ] This is really a huge challenge for the Department
that they're trying to get their hands around, but it's incredibly
important, especially when you consider what I was mentioning about the
need to build readiness levels for the military given over a decade of
war. And, also, the need to really modernize their equipment for future
wars.

[ Sarah Kaczmarek: ] Who's auditing their books, and how's that turning
out?

[ Cathy Berrick: ] It's not turning out very well. DOD is also one of
the few federal agencies that can't accurately account for its finances,
and they can't undergo a financial audit. The reason that's important is
because to manage a department, especially the one the size of DOD,
leadership really needs to have good financial information to make
decisions. And without it, it really has an effect on their ability to
meet their missions.

[ Sarah Kaczmarek: ] And, I know, based on other work GAO has done in
this area that acquisition is also a challenge for the Department when
it comes to their budget.

[ Cathy Berrick: ] It's a big challenge, and it represents such a
significant portion of DOD's budget. In that area, we found that DOD
hasn't always implemented best practices when acquiring major weapon
systems. So, as a result of that, there's been cost increases. There's
also been schedule delays, and there's even been cases where the
equipment doesn't meet the warfighter's needs.

[ Sarah Kaczmarek: ] And, what about the cost of maintaining military
bases?

[ Cathy Berrick: ] Yeah, it's significant. DOD has over 500 military
bases worldwide, and there's a significant price tag that goes with
those. At the same time, DOD is reporting that they have about 20
percent excess infrastructure across all of its facilities, and that's a
problem because it costs money to maintain those buildings.

[ Sarah Kaczmarek: ] So, we're in a bit of an uncertain budget
environment. If DOD were to see an increase in its budget, how does that
change this discussion?

[ Cathy Berrick: ] It doesn't change it all that much. As you know, the
President is proposing an increase in defense spending, but even with
this increase, DOD is still going to face major affordability
challenges.

[ Background Music ]

[ Sarah Kaczmarek: ] So, while the Department of Defense works to
control its costs and better manage its finances, it also needs to
expand its cyber capabilities. The cyber threats the nation faces right
now are significant and growing. In fact, the former Director of
National Intelligence, James Clapper, identified cyber threats as first
among many strategic threats the United States faces, even surpassing
terrorism. Up next, Cathy talks about how DOD is working to protect the
country from cyber threats.

[ Cathy Berrick: ] One of the things that we've looked at is that DOD
and the whole government really needs to do a better job at protecting
its cyber capabilities and also ensuring that if there is a cyber
attack, they can continue operations. Another area that we found at DOD
was that they can do a better job having more visibility over the cyber
resources that they have available to them.

[ Sarah Kaczmarek: ] So, more visibility of the cyber resources--what
exactly does that mean?

[ Cathy Berrick: ] Well, obviously, DOD has many resources available to
it within the Department and the military services, but in addition to
that, the National Guard actually has a number of cyber resources in
terms of cyber units and other equipment that should the event of a
cyber attack, DOD could draw on those resources to assist them. And, in
some cases, they're significant.

[ Sarah Kaczmarek: ] We've recently seen in the news about possible
leaks of CIA cyber espionage methods. Does DOD also need to worry about
potential leaks in the method that it's using?

[ Cathy Berrick: ] I mean, I think if you think back to 2010 and since,
there's been some significant examples of where the country's national
security has been compromised by the release of classified information.
One of the things that happened subsequent to those events was that the
federal government set up a task force to try to position the federal
government to prepare and prevent these types of incidents from
happening. And, they issued a number of best practices along with that.

[ Sarah Kaczmarek: ] And so, has DOD been implementing these best
practices?

[ Cathy Berrick: ] Yeah. The good news is that they have implemented
some, especially related to training and developing a cyber workforce.
But, there's more work that they need to do and other recommendations
that they need to implement.

[ Background Music ]

[ Sarah Kaczmarek: ] Okay. Did you know the Department of Defense is
spending nearly $180 billion on pay and benefits for its military
personnel and another $70 billion for its civilian employees in fiscal
year 2017 alone? That represents about half of DOD's budget. After the
break, Cathy talks about why human capital issues are hard for DOD to
resolve.

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[ Background Music ]

[ Sarah Kaczmarek: ] All right. If half of DOD's budget is payroll,
people must be very important to the Department's mission. I had to ask
Cathy, why is better personnel management a key factor to DOD's success?

[ Cathy Berrick: ] DOD's workforce is really made of three categories of
people. Of course, you have the military. You also have a large civilian
workforce at DOD, and there's also a large contractor workforce. One of
the things that we found is that DOD really needs to step back and look
at the combination of that workforce and make decisions about whether
it's the right mix.

[ Sarah Kaczmarek: ] And, what about pay? Is everybody paid the same
way?

[ Cathy Berrick: ] No, they're not, and there's actually a very complex
patchwork of pay and benefits that DOD has in place that, in particular
for uniform service members, that's really evolved over the years. So,
we did some work recently looking at one category of these pays called
special and incentive pays, and we found that there were actually some
cases where service members, and they were actually Navy sailors, who
said that they valued additional shore time over some of these increased
pays that they were getting.

[ Sarah Kaczmarek: ] So, they wanted things that were, kind of a
non-financial benefit.

[ Cathy Berrick: ] Exactly. Exactly.

[ Sarah Kaczmarek: ] And so, that's another area where DOD could take a
more comprehensive look to see if other service members, maybe, felt the
same way.

[ Cathy Berrick: ] Yeah. Exactly. Some of their special pays are not
tied to performance. So, for example, if they're trying to recruit
people into a certain field where it's hard to get folks interested in
working, they'll pay some of these incentive pays to retain them. But,
they could, theoretically, be paying additional money to keep on board
someone that's not performing at the level they think they should.

[ Sarah Kaczmarek: ] So, when you were talking before about, you know,
they need to recruit more people to work on cyber security issues, this
could be a way that they incentivize them to do that, but they're not
tying it to how well that person might actually be doing their job?

[ Cathy Berrick: ] Yeah. Not holistically. Again, there's some services
that do that. Others do not.

[ Background Music ]

[ Sarah Kaczmarek: ] This report isn't making any new recommendations.
Of course, it builds on previous GAO reports with recommendations that
could significantly improve DOD's operations. I knew Cathy could help me
put this report in context and help highlight key recommendations DOD
still needs to address.

[ Cathy Berrick: ] Just since 2006, we've made over 3,000
recommendations to DOD, and that doesn't include recommendations that
we've made that were classified or sensitive. Those are our public
recommendations. Of those, DOD's implemented about 65 percent of them,
which means there's still about 1,100 open recommendations that we think
DOD needs to implement.

[ Sarah Kaczmarek: ] And, how does this compare to the rest of the
government and other federal agencies?

[ Cathy Berrick: ] DOD is actually lagging behind the rest of the
federal government in implementing GAO recommendations. So, I mention
DOD has a 65 percent implementation rate. The rest actually averages a
73 percent implementation rate.

[ Sarah Kaczmarek: ] So, that's a lot of open recommendations. Has DOD
made progress?

[ Cathy Berrick: ] Yeah, they've definitely made progress, and I know
when you see 1,100 open recommendations, that's a question that pops
into your mind. And, these, admittedly are some very difficult
challenges that are going to take time to address and implement.

[ Sarah Kaczmarek: ] So, we've certainly unpacked a lot here today.
Cathy, what do you see as the bottom line of this report?

[ Cathy Berrick: ] I think the bottom line is really that there's an
increased urgency right now for DOD to address these challenges that
they're facing and that we've talked about today. They've got some
fundamental questions that they need to address in the coming years
including affordability questions about what they can afford. Also,
including questions about how they're going to build readiness and
support that. And then, finally, how they're going to modernize for the
future. And, I really think they're at a crossroads in terms of having
to make these difficult decisions. We think that by implementing
recommendations that we've made over the years, we can help DOD address
some of these issues, and we hope that they take us up on that and move
forward in implementing them.

[ Sarah Kaczmarek: ] We've certainly spotlighted a lot of important
areas and challenges for the Department and the Administration. Cathy,
thank you so much for taking the time to talk with me today.

[ Cathy Berrick: ] Thanks, Sarah. My pleasure.

[ Background Music ]

[ Sarah Kaczmarek: ] Thanks for listening to another Watch Dog Report,
Big Bite Edition podcast. If you'd like to hear more podcasts like this
or if you want to send us a question or a comment, shoot us an email at
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The Watch Dog Report Big Bite is a production of GAO's Office of Public
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