Defense Business Operations Fund: Improved Pricing Practices and Financial Reports Are Needed to Set Accurate Prices
Abstract
The conference report accompanying the National Defense Authorization Act for Fiscal Year 1994 (House Report 103-357) requires that we report to the congressional Defense committees on the Department of Defense's (DOD) process for developing the prices that the Defense Business Operations Fund will charge its customers. This report (1) describes the process used to develop the Fund's fiscal year 1995 prices, (2) identifies major reasons Fund prices have increased, (3) identifies major reasons the Fund has continued to incur operating losses, and (4) provides information on the adequacy of the Fund's budget and financial reports. Our scope and methodology are discussed in appendix I. As discussed in this report and illustrated in appendixes II and III, the quantitative financial information used in this report on the Fund's operating results was produced from DOD's systems. DOD has acknowledged that this information is not totally reliable. As agreed with the congressional Defense committees, we limited the scope of our review to depot maintenance and supply management operations, the Fund's largest business areas. DOD estimates that these two business areas will account for about $51 billion, or 66 percent, of the Funds estimated revenue of $77 billion in fiscal year 1995.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 1994
- Accession Number
- AD1179138
Entities
People
- Darby W. Smith
- David O. Nellemann
- Eddie W. Uyekawa
- Gregory E. Pugnetti
- Karl J. Gustafson
- Ron L. Tobias
- William A. Hill
Organizations
- Federal Government of the United States