ASSESSING THE RELIABILITY OF THE FUTURE YEARS DEFENSE PROGRAM AND BUILDING A FORECAST
Abstract
The future direction of U.S. defense spending is a key point of interest for many policymakers, academics, and industry leaders. Almost every year, DoD releases its Future Years Defense Program (FYDP). The FYDP is a five-year spending plan. In many ways, it is a valuable planning tool. It helps Congress identify DoD spending priorities, and the degree to which these spending priorities align with the U.S. national security strategy. It helps the U.S. defense industry understand where DoD plans to invest and thereby allows companies within the industry to align themselves with current priorities. It helps scholars identify trends and do research on major capital-intensive projects, which can be used to inform future projects, both defense and nondefense. It helps U.S. citizens identify how the government plans to spend their taxpayers’ dollars. However, the FYDP has several major drawbacks for these stakeholders. For one, the way that the FYDP is released makes it difficult to quickly and accurately assess budget trends. This is because the FYDP is released in hundreds of PDFs through separate justification books, and not as a centralized database or even in summary documents. Second, and partly because the FYDP is so difficult to analyze, stakeholders either struggle to or cannot evaluate which investment plans are likely to materialize and which are not. Without analysis, it is difficult to tell the difference between a figure reliably reported for years and an uninformative placeholder. It is also difficult to assess the reliability of the FYDP at a higher level. Put simply, the current system provides valuable insight into DoD spending plans at a granular level, but not the reliability of these plans. Therefore, it is difficult to measure to what degree these spending plans are an accurate indicator of future spending. This project aims to measure this through targeted analysis. The proposed research effort would proceed in three stages. In the first stage, the study team will build the dataset by scraping projections and spending numbers from budget justification books from the DoD Comptroller’s office. In the second stage, the study team will begin to assess the reliability of FYDP projections. The basic approach to this stage is simple: compare actual spending to both enacted spending and FYDP projections. And then, evaluate the reliability of projections as an indicator of actual spending. The third stage will focus on developing a forecast. Once we have a measure of reliability for the overall FYDP, as well as various subcategories, the study team will be able to develop adjusted FYDP projections.
Document Details
- Document Type
- DoD Grant Award
- Publication Date
- Nov 01, 2021
- Source ID
- HQ00341910010
Entities
People
- Andrew Hunter
Organizations
- Center for Strategic and International Studies
- Office of the Secretary of Defense
- Washington Headquarters Services