The Defense Department's failure to act or delayed response on the recommendations of its own internal watchdog may result in lost savings of at least $33.6 billion, the Pentagon's Inspector General's office said Thursday.
The 450-page report reviewed the DoD's responses to 288 IG audits and evaluations going back to 2006 on programs ranging from the F-35 Joint Strike Fighter and cyber security to barracks renovation and truck maintenance.
As of March 31, there were a total 1,298 recommendations to which DoD or its sub-components had either failed to respond or taken action to correct, the office of Acting Inspector General Glenn Fine said.
"Of the 1,298 open recommendations, 58 have associated potential monetary benefits," the report said. "If the DoD Components implemented all 58 recommendations, DoD could save $33.6 billion."
The report identified two programs that could have achieved major savings by following the IG's recommendations:
- The CH-53K helicopter for the Marine Corps. The IG recommended capping CH-53K procurements at 156, which was 44 less than the Corps requested. Capping at 156 would save $22.2 billion, the IG said.
- The MQ-9 Reaper drone for the Air Force. The IG's report said that unnecessary increased procurements cost $8.8 billion.
Of the open and unresolved recommendations, 832 have been pending for more than a year, including 109 for more than three years and two for more than 10 years, the IG's report said.
The report also indicated that the potential savings could be much higher, but many of the audits and evaluations were classified and, in some cases, management responses were heavily redacted.
The report went into detail on numerous open recommendations and management's response from the office of the secretary of defense, down through the individual services and the combatant commands, but much of the reports on the F-35 Joint Strike Fighter program and cyber security were redacted.
A March 2015 IG report titled "F-35 Lightning II Program Quality Assurance and Corrective Action Evaluation" found 57 "non-conformities" in the F-35 program and said managers "did not ensure that the program made sufficient progress toward full compliance" with the National Defense Authorization Act.
The sections of the report on F-35 management's response and implementation of the recommendations of the IG report were blacked out.
Even the title of an IG report on Cyber Command and cyber security was blacked out, and the full report was classified. Other reports by the IG criticized a tendency to "over-classify" by DoD.
The report also broke down the open recommendations into 10 "functional areas," ranging from acquisitions and contractor oversight to the health and morale of the force.
On intelligence, there were 135 open recommendations on issues such as over-classification of national security information; U.S. intelligence sharing with coalition partners; protection and evacuation of U.S. embassies and U.S. citizens; intelligence training for Afghan forces; and DoD personnel security clearance processing.
For health and morale, the IG's report said there were 14 open recommendations related to issues such as health care costs; DoD Suicide Event Report data quality assessment; the Rights of Conscience protection for service members and their chaplains; retirement home inspections; and delinquent medical service claims.
One example cited by the IG's report on health care was the failure to negotiate rates for overseas health care. An April 2014 audit by the IG found that Tricare Management Activity was paying whatever was billed by the Tricare Overseas Program contractor, rather than negotiating rates.
As a result, Tricare Overseas payments increased from $21.1 million in fiscal 2009 to $63.8 million in fiscal 2012, a 203 percent increase, the IG's report said.
In the bland language of the bureaucracy, the report said that "timely implementation of agreed-upon corrective actions is critical for DoD Components to improve the efficiency and effectiveness of DoD programs and operations, as well as to achieve integrity and accountability goals, reduce costs, manage risks, realize monetary benefits, and improve management processes."
The IG's report also cited the Office of Management and Budget's "Circular A-50 Revised," which requires the targeted agency to respond within a maximum of six months after issuance of a final report.
When there is disagreement about a recommendation, the deputy secretary of defense is supposed to resolve it, according to the IG.
-- Richard Sisk can be reached at Richard.Sisk@Military.com.