Defense Business Operating Fund: Description and Implementation Issues

The Defense Business Operating Fund initiative in the Department of Defense (DoD) consolidates existing industrial and stock funds. This initiative is intended to enhance the departmental management of an estimated $81 billion sale of goods and services in fiscal year 1993. Revolving funds have a long history in the department. This article examines the role of revolving funds and their performance in DoD. The potential benefits of consolidation of funds are discussed. Emphasis is given to budgetary, management, and accounting changes intended to enhance management of the funds. The effect of implementation issues on the realization of potential benefits is also explored.