This testimony discusses our first annual report to Congress responding to the statutory requirement that GAO identify federal programs, agencies, offices, and initiatives--either within departments or governmentwide--that have duplicative goals or activities. This work can help inform government policymakers as they address the rapidly building fiscal pressures facing our national government. Our simulations of the federal government's fiscal outlook show continually increasing levels of debt that are unsustainable over time, absent changes in the federal government's current fiscal policies. Since the end of the recent recession, the gross domestic product has grown slowly, and unemployment has remained at a high level. While the economy is still recovering and in need of careful attention, widespread agreement exists on the need to look not only at the near term but also at steps that begin to change the long-term fiscal path as soon as possible. With the passage of time, the window to address the fiscal challenge narrows and the magnitude of the required changes grows. This testimony is based on our March 2011 report and provides an overview of federal programs or functional areas where unnecessary duplication, overlap, or fragmentation exists and where there are other opportunities for potential cost savings or enhanced revenues. In that report, we identified 81 areas for consideration--34 areas of potential duplication, overlap, or fragmentation and 47 additional areas describing other opportunities for agencies or Congress to consider taking action that could either reduce the cost of government operations or enhance revenue collections for the Treasury. The 81 areas span a range of federal government missions such as agriculture, defense, economic development, energy, general government, health, homeland security, international affairs, and social services. Within and across these missions, the report touches on hundreds of federal programs, affecting virtually all major federal departments and agencies. The testimony highlights (1) some examples from our March report; (2) needed improvements in the federal government's management and investment in information technology (IT); and (3) opportunities for achieving significant cost savings through improvements in government contracting.

A few examples of duplication: (1) Teacher quality programs: In fiscal year 2009, the federal government spent over $4 billion specifically to improve the quality of our nation's 3 million teachers through numerous programs across the government. Federal efforts to improve teacher quality have led to the creation and expansion of a variety of programs across the federal government, however, there is no governmentwide strategy to minimize fragmentation, overlap, or duplication among these many programs. (2) Military health system: The Department of Defense's (DOD) Military Health System (MHS) costs have more than doubled from $19 billion in fiscal year 2001 to $49 billion in 2010 and are expected to increase to over $62 billion by 2015. The responsibilities and authorities for the MHS are distributed among several organizations within DOD with no central command authority or single entity accountable for minimizing costs and achieving efficiencies. Under the MHS's current command structure, the Office of the Assistant Secretary of Defense for Health Affairs, the Army, the Navy, and the Air Force each has its own headquarters and associated support functions. (3) Employment and training programs: In fiscal year 2009, 47 federally funded employment and training programs spent about $18 billion to provide services, such as job search and job counseling, to program participants. Most of these programs are administered by the Departments of Labor, Education, and Health and Human Services (HHS). Forty-four of the 47 programs we identified, including those with broader missions such as multipurpose block grants, overlap with at least one other program in that they provide at least one similar service to a similar population. (4) Surface transportation: The Department of Transportation (DOT) currently administers scores of surface transportation programs costing over $58 billion annually. The current federal approach to surface transportation was established in 1956 to build the Interstate Highway System, but has not evolved to reflect current national priorities and concerns. Over the years, in response to changing transportation, environmental, and societal goals, federal surface transportation programs grew in number and complexity to encompass broader goals, more programs, and a variety of program approaches and grant structures. (5) DOD-VA Electronic Health Record Systems: Although they have identified many common health care business needs, DOD and the Department of Veterans Affairs (VA) have spent large sums of money to develop and operate separate electronic health record systems that each department relies on to create and manage patient health information. The federal government's expenditures on IT could be reduced by, among other things, consolidating federal data centers, improving investment management and oversight, and using enterprise architectures as a tool for organizational transformation. Each year the federal government spends billions of dollars on IT investments; federal spending on IT has risen to an estimated $79 billion for fiscal year 2011. In recent years, as federal agencies modernized their operations, put more of their services online, and increased their information security profiles they have demanded more computing power and data storage resources. The federal government spent about $535 billion in fiscal year 2010 acquiring the goods and services agencies need to carry out their missions. Areas where improvements could be made to realize significant savings: (1) minimizing unnecessary duplication among interagency contracts, (2) achieving more competition in the award of contracts, (3) using award fees more appropriately to promote improved contractor performance, and (4) leveraging the government's vast buying power through expanded use of strategic sourcing.

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