Massive programs like the F-35 fighter plane drive the vast majority of Pentagon spending, while procurement spending across the rest of the Defense Department decreased from last year, according to a Government Accountability Office report.
GAO yearly review of weapons programs found that 10 large programs accounted for 65 percent of DOD’s $1.6 trillion in acquisition spending last year. In addition to the F-35, these programs include the F-22 fighter, the Navy’s Destroyer warship, the nuclear powered Virginia-class submarines, and the Trident II missile.
The rest of the Pentagon’s 76 programs made up the remaining 45 percent of acquisition spending. DOD also eliminated 10 programs in the last year, lowering costs.
The report represents a rare piece of good news on the defense-spending front. GAO found that the Pentagon had trimmed some of its excess fat in the past year, continuing a five-year downsizing trend. It also comes as sequestration cuts are implemented in the coming weeks.
“Our analysis shows that the size and estimated cost of DOD’s portfolio of major defense acquisition programs decreased by 10 programs and more than $152 billion from 2011 to 2012 as more programs exited the portfolio than entered,” GAO said. “In addition, our assessment of the 86 programs that make up the 2012 portfolio found that those programs reported a net cost decrease over the past year.”
According to the report, savings are coming because DOD is getting leaner. In addition to eliminating 10 programs, the Pentagon has also restructured existing programs in ways that allow the program to save through smarter spending and streamlined operations.
The Pentagon even managed to cut spending in its massive weapons programs. “Nearly all of the 10 largest programs in the portfolio with program baselines reported reductions in total estimated cost,” the report noted. Total savings are $5 billion.
In addition, the accountability office found that the Pentagon has improved cost controls. Only 15 percent of programs spent more money than they expected to a year ago, down from 40 percent in 2011.
But the news is not all good. GAO warned of pervasive cost-creep across DOD programs. Forty percent of all spending was not represented in original budget plans, meaning nearly half of all DOD programs are spending more than they initially planned.
“We found that $393 billion of the portfolio’s remaining cost was anticipated when the programs established their first full estimates while $271 billion was not,” GAO found.