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Testimony:



Before the Subcommittee on Readiness and Management Support, Committee 

on Armed Services, United States Senate:



United States General Accounting Office:



GAO:



For Release on Delivery Expected at 9:30 a.m. EST:



Wednesday, March 19, 2003:



SOURCING AND ACQUISITION:



Challenges Facing the Department of Defense:



Statement of David M. Walker 

Comptroller General of the United States:



GAO-03-574T:



Chairman Ensign, Ranking Member Akaka, and Members of the Subcommittee:



I am pleased to be here today to participate in the Subcommitteeís 

hearing on the acquisition and sourcing practices of the Department of 

Defense (DOD). Todayís hearing occurs at a critical time--with DOD on 

the brink of operations in Iraq while seeking to respond to changes in 

security threats and still meeting the challenge of transforming the 

military.



DOD spends an average of $150 billion annually on acquisitions that 

support these and other missions. Moreover, this investment is expected 

to grow considerably in the future as DOD works to keep legacy systems 

while investing in future capabilities such as unmanned aircraft, 

satellite networks, and information and communications systems.



Such demands clearly require DOD to be as efficient and effective as 

possible in obtaining the systems, services, and equipment it needs to 

carry out its mission. But our reviews continue to show that DOD is not 

carrying out acquisitions cost-effectively and that the acquisitions 

themselves are not always achieving DODís objectives. Pervasive 

problems persist regarding high-risk acquisition strategies and 

unrealistic cost, schedule, and performance estimates.



My testimony today will focus on two aspects fundamental to successful 

acquisitions in DOD.



* The first is the implementation of sound policies for making sourcing 

decisions. Last April, the congressionally chartered Commercial 

Activities Panel, which I chaired, and on which I was privileged to 

serve along with my fellow panelists here today, Angela Styles and Pete 

Aldridge, made a number of recommendations for improving the policies 

and procedures governing the competitive sourcing of commercial 

activities. I welcome this opportunity to discuss the work of the Panel 

and the progress to date in implementing its recommendations. These 

recommendations should lay a good foundation for improving sourcing 

decisions within DOD.



* The second is the adoption of best practices. DOD itself recognizes 

the need to ensure that it can match its needs to its resources and to 

follow a knowledge-based acquisition process. It is seeking to adopt 

practices that have proven successful in the commercial sector in the 

procurement of both systems and services. It also recognizes the need 

to reshape its acquisition workforce to meet growing demands. Yet it 

still faces a considerable challenge in putting these practices to work 

and instituting the cultural changes needed for their success. I would 

like to recognize the Subcommitteeís leadership in sponsoring the work 

on the best practices used by leading commercial firms in acquiring 

services, information technology, and major systems, and in working to 

get them accepted within DOD.



Before I begin my testimony, I would like to note that the environment 

in which these changes must be made is a challenging one--not just for 

DOD, but for other agencies as well. It consists of new and changing 

security threats, the publicís growing expectations for demonstrable 

results, demographic changes, rapidly evolving science and technology, 

and serious and growing fiscal constraints. All of these challenges 

demand that the federal government engage in a fundamental review of 

its mission and priorities and to consider the long-term impact of the 

decisions it makes today. The recommendations and practices I will be 

discussing today, however, should position DOD to meet these broader 

challenges since they focus on taking a more knowledge-based, and 

longer-term approach to acquisitions. And they have proved successful 

in reducing costs.



Improving Sourcing Decisions:



Government agencies increasingly are relying on services to accomplish 

their missions. The Department of Defense now spends more than half its 

contracting dollars acquiring services, about $77 billion in fiscal 

year 2001, the latest year for which complete data are available. In 

addition, the Department reports that it has over 400,000 employees 

performing commercial-type services. Determining whether to obtain 

required services using federal employees or through contracts with the 

private sector is an important economic and strategic decision. In 

fact, competitive sourcing is a key component of the Presidentís 

Management Agenda. But historically, the process for determining 

whether the public or the private sector should perform services needed 

by federal agencies - set forth in Office of Management and Budget 

(OMB) Circular A-76 --has been difficult to implement. The impact such 

decisions have on the federal workforce has been profound, and there 

have been concerns in both the public and private sectors concerning 

the fairness of the process and the extent to which there is a ďlevel 

playing fieldĒ for conducting public-private competitions.



Recommendations of the Commercial Activities Panel:



It was against this backdrop that the Congress enacted Section 832 of 

the Defense Authorization Act for fiscal year 2001, which mandated that 

I establish a panel of experts to study the process used by the 

government to make sourcing decisions. Given the importance of this 

issue, I elected to chair this Panel myself and ensured that it was 

comprised of highly qualified and empowered representatives from the 

groups specified in the Act and other knowledgeable individuals.



The Commercial Activities Panel conducted a yearlong study, and heard 

repeatedly about the importance of competition and its central role in 

fostering economy, efficiency, and continuous performance improvement. 

The Panel held eleven meetings, including three public hearings in 

Washington, D.C.; Indianapolis, Indiana; and San Antonio, Texas. In 

these hearings, Panelists heard first-hand both about the current 

process, primarily the cost comparison process conducted under Circular 

A-76, as well as alternatives to that process. Panel staff conducted an 

extensive amount of additional research, review, and analysis in order 

to supplement and evaluate the public testimony. Recognizing that our 

mission was a challenging, complex, and controversial one, the Panel 

agreed that a supermajority of two-thirds of the Panel members would 

have to vote for any finding or proposal in order for it to be adopted 

by the Panel. Importantly, the Panel unanimously agreed upon a set of 

principles to guide all sourcing decisions:



The Panel believes that federal sourcing policy should:



1. Support agency missions, goals, and objectives.



2. Be consistent with human capital practices designed to attract, 

motivate, retain, and reward a high-performing federal workforce.



3. Recognize that inherently governmental and certain other functions 

should be performed by federal workers.



4. Create incentives and processes to foster high-performing, 
efficient, 

and effective organizations throughout the federal government.



5. Be based on a clear, transparent, and consistently applied process.



6. Avoid arbitrary full-time equivalent or other arbitrary numerical 

goals.



7 .Establish a process that, for activities that may be performed by 

either the public or the private sector, would permit public and 

private sources to participate in competitions for work currently 

performed in-house, work currently contracted to the private sector, 

and new work, consistent with these guiding principles.



8. Ensure that, when competitions are held, they are conducted as 
fairly, 

effectively, and efficiently as possible.



9. Ensure that competitions involve a process that considers both 
quality 

and cost factors.



10. Provide for accountability in connection with all sourcing 
decisions.



In addition, a supermajority of the Panel agreed on a package of 

additional recommendations. Chief among these was a recommendation that 

public-private competitions be conducted using the framework of the 

Federal Acquisition Regulation (FAR). Although a minority of the Panel 

did not support the package of additional recommendations, some of 

these Panelists indicated that they supported one or more elements of 

the package, such as the recommendation to encourage high-performing 

organizations throughout the government. Importantly, there was a good 

faith effort to maximize agreement and minimize differences among 

Panelists. In fact, changes were made even when it was clear that some 

Panelists seeking changes were highly unlikely to vote for the 

supplemental package of recommendations. As a result, on the basis of 

Panel meetings and my personal discussions with Panel members at the 

end of our deliberative process, the major differences among Panelists 

were few in number and philosophical in nature. Specifically, 

disagreement centered primarily on (1) the recommendation related to 

the role of cost in the new FAR-type process and (2) the number of 

times the Congress should be required to act on the new integrated 

process, including whether the Congress should specifically authorize a 

pilot program that tests that process for a specific time period.



The Administrationís Proposed Changes:



As part of the administrationís efforts to implement the 

recommendations of the Commercial Activities Panel, OMB published 

proposed changes to Circular A-76 for public comment in November 2002. 

The administration is now considering the comments received as it 

finalizes the revisions to the Circular.



I provided comments on the proposal to the Director of OMB this past 

January. My assessment of the proposed revision concluded that in many 

ways it is consistent with the sourcing principles and recommendations 

adopted by the Commercial Activities Panel. In particular, the proposal 

stresses the use of competition in making sourcing decisions and, 

through reliance on procedures contained in the FAR, should result in a 

more transparent, expeditious, and consistently applied competitive 

process. The proposal should promote sourcing decisions that reflect 

the best overall value to the agencies, rather than just the lowest 

cost. Importantly, the proposed revision also should result in greater 

accountability for performance, regardless of the service provider 

selected. Of course, successful implementation will require that 

adequate resources and technical support be made available to federal 

employees.



There are several areas, however, where the proposed revisions to the 

Circular are not consistent with the principles or recommendations of 

the Commercial Activities Panel. Specifically, these include the 

absence of a link between sourcing policy and agency missions, 

unnecessarily complicated source selection procedures, certain 

unrealistic time frames, and insufficient guidance on calculating 

savings. I am confident that the administration is carefully 

considering these and other comments on the proposal, and look forward 

to reviewing the final product.



One area of particular importance for all affected parties is how the 

governmentís sourcing policies are implemented. In this regard, one of 

the Panelís sourcing principles was that the government should avoid 

arbitrary numerical or full-time equivalent (FTE) goals. This principle 

is based on the concept that the success of government programs should 

be measured by the results achieved in terms of providing value to the 

taxpayer, not the size of the in-house or contractor workforce. 

Although the proposed revision of the Circular contains no numerical 

targets or goals for competitive sourcing, this has been a 

controversial area in the past. It has been our view that the 

administration needs to avoid arbitrary targets or quotas, or any goal 

that is not based on considered research and analysis. Congress 

recently put this principle into legislation; a provision in the recent 

consolidated appropriations legislation requires sourcing goals and 

targets to be ďbased on considered research and sound analysis of past 

activitiesĒ. [Footnote 1]



DODís Competitive Sourcing Agenda:



DOD has been at the forefront of federal agencies in using the A-76 

process in recent years. After several years of limited use of Circular 

A-76, the deputy secretary of defense gave renewed emphasis to the A-76 

program in August 1995 when he directed the services to make 

outsourcing of support activities a priority in an effort to reduce 

operating costs and free up funds to meet other priority needs. This 

effort was subsequently incorporated as a major component of the 

Defense Reform Initiative, and the program became known as competitive 

sourcing--in recognition of the fact that either the public or the 

private sector could win the competitions.



Recently, DODís A-76 study goals have increased because of the 

Presidentís Management Agenda, which includes competitive sourcing as 

one of its five key government-wide initiatives.[Footnote 2] Under that 

program, OMB directed agencies to directly convert or complete A-76 

competitions on 15 percent of their 2000 Federal Activities Inventory 

Reform (FAIR) Act inventories by the end of fiscal year 2003, with the 

ultimate goal of competing 50 percent of the FAIR Act positions. 

However, we understand that this broader goal may be subject to 

negotiations between DOD and OMB. DODís ongoing A-76 efforts should 

permit it to meet OMBís goal for 2003. However, a greater challenge 

remains for DOD to complete studies on an additional 158,000 positions 

in the out-years (FY 2004 through FY 2009). This is double what DOD has 

been able to accomplish in the past over a similar timeframe. For 

example, DOD completed studies on 71,000 positions between fiscal years 

1997 and 2002, and found it increasingly difficult to identify study 

candidates over time. DOD hopes to be able to meet this larger goal 

through a combination of A-76 competitions and other alternatives.



DODís experience with competitive sourcing since 1996 contains 

important lessons for civilian agencies as they implement their own 

sourcing initiatives. As we have tracked DODís progress in implementing 

its A-76 program since the mid to late 1990s, we have identified a 

number of challenges and concerns with the program. They include (1) 

the time required to complete the studies, (2) the resources required 

to conduct and implement the studies, (3) selecting and grouping 

positions to compete, and (4) developing and maintaining reliable 

estimates of projected savings expected from the competitions.



The Department Can Benefit From Adopting Best Practices:



At the request of this Subcommittee, GAO has conducted a number of 

engagements to identify best practices in the commercial sector for 

addressing the sourcing and acquisition challenges facing the 

Department. We believe the Department could significantly improve its 

performance in a number of areas by adopting some of the best practices 

we have identified.



Information Technology Outsourcing:



For example, we reviewed the practices used by leading companies 

involved in outsourcing certain information technology (IT) functions. 

In November 2001, we issued a guide on outsourcing IT services that 

provides a generic framework of practices from leading commercial 

organizations that can improve purchasing decisions and manage the 

resulting government/provider relationship.[Footnote 3]



At the further request of this Subcommittee, we have been reviewing the 

extent to which selected DOD projects are using leading commercial 

practices laid out in our November 2001 guide. We have shared our draft 

report with this Subcommittee, which is currently with DOD for comment. 

In brief, we found that the five projects in our review were generally 

implementing these practices. This is a positive sign because although 

implementing these practices does not guarantee the success of an 

outsourcing project, our November 2001 study reflected a consensus view 

that these practices were the most critical to success.[Footnote 4] 

Accordingly, application of these practices increases the probability 

of a successful outsourcing project.



Acquiring Information Technology Systems:



Since the 1990ís, DOD has spent billions of dollars each year 

attempting to leverage the vast power of modern technology to replace 

outdated ways of doing business. However, the Department has had 

limited success in modernizing its information technology environment, 

and we have designated DODís systems modernization as high risk since 

1995.[Footnote 5] A major reason for this designation is DODís 

inconsistent use of best practices for acquiring IT systems.



We have categorized IT system acquisition practices into three groups 

and apply leading practices, as appropriate, in our evaluations of 

systems acquisitions within DOD. A brief description of the three 

categories and what we have found at DOD follows:



Acquisition of systems in accordance with mature processes. Our work 

shows that DODís implementation of mature acquisition management 

processes is uneven, as are its proactive efforts to improve these 

processes. For example, our review of the Defense Logistics Agencyís 

system acquisition processes showed that one major system was following 

mature processes, while another was not.[Footnote 6] We made 

recommendations to correct these weaknesses, and DOD has generally 

concurred.



There are also published best practices for acquiring systems that are 

built from commercial components. Generally, these practices advocate 

an acquisition approach that is not driven primarily by system 

requirements, but rather an approach that proactively manages the 

tradeoff among various acquisition issues, such as the organizationís 

system requirements and the commercially available system components. 

Accordingly, we have ongoing and planned work at a number of federal 

agencies, including DOD, which includes determining whether these 

practices are being employed.



Use of an enterprise architecture to guide and constrain system 

acquisitions. Effectively managing a large and complex endeavor 

requires, among other things, a well-defined and enforced blueprint for 

operational and other technological change, commonly referred to as an 

enterprise architecture. In May 2001, we reported that DOD had neither 

an enterprise architecture for its financial and financial-related 

business operations, nor the management structure, processes, and 

controls in place to effectively develop and implement one.[Footnote 7] 

In addition, the National Defense Authorization Act for Fiscal Year 

2003 required DOD to develop such an architecture by May 1, 2003, along 

with a transition plan for its implementation. At the request of this 

Subcommittee, we reported last month that DOD had taken a number of 

steps to address this issue, such as establishing a program office 

responsible for managing the enterprise architecture effort.[Footnote 

8] However, the Department had yet to implement some of the 

recommendations from our May 2001 report and commercial leading 

practices for developing and implementing architectures. Accordingly, 

we made additional recommendations related to DODís architecture 

effort, with which DOD concurred.



Acquiring systems in a series of economically justified incremental 

builds. Both federal law and guidance advocate the use of incremental 

investment management[Footnote 9] when acquiring or developing large 

systems.[Footnote 10] Using these system investment practices helps to 

prevent discovering too late that a given acquisition/development 

effort is not cost beneficial. We have previously reported that certain 

DOD system acquisitions were not utilizing incremental management best 

practices or were just beginning to do so. For example, in July 2001 we 

reported that although DOD had divided its multi-year, billion-dollar 

Standard Procurement System into a series of incremental releases, it 

had not treated each of these increments as a separate investment 

decision.[Footnote 11]



Acquiring Services:



With respect to services acquisitions generally, we found that the 

experiences of leading private-sector companies to reengineer their 

approach to acquiring services offer DOD both valuable insights and a 

general framework that could serve to guide DODís efforts. In January 

2002, we reported that our work at six leading companies found that 

each had reengineered its approach to acquiring services to stay 

competitive, reduce costs, and improve service levels. These changes 

generally began with a corporate decision to pursue a strategic 

approach to acquiring services. Taking a strategic approach involve a 

range of activities from developing a better picture of what a company 

was spending on services to taking an enterprise-wide approach to 

procuring services and developing new ways of doing business. Pursuing 

such an approach clearly paid off, as the companies found that they 

could save millions of dollars and improve the quality of services 

received.



DOD already has in place certain elements critical to taking a 

strategic approach, such as the commitment by senior DOD leadership to 

improve practices for acquiring services and to adopt best commercial 

practices. Moreover, the fiscal year 2002 national defense 

authorization legislation directs DOD to improve its management and 

oversight of services acquisitions. To implement these requirements, 

DOD issued new policy in May 2002 that was intended to elevate major 

purchases of services to the same level of importance as purchases of 

major defense systems. The Department still faces a long journey, 

however, as it begins to take on the more difficult tasks of developing 

a reliable and accurate picture of service spending across DOD.



Major Weapon Systems Acquisitions:



DOD relies heavily on its major weapons acquisitions to modernize its 

forces and expects to spend on average about $150 billion annually over 

the next 5 years for the research, development and procurement of 

weapon systems. However, its history of acquiring major weapon systems 

all too frequently has been characterized by poor cost, schedule, and 

performance outcomes that have delayed delivery of new capabilities to 

the warfighter and created significant opportunity costs that have 

slowed the Departmentís overall modernization efforts.



Because of the pressures in DODís acquisition environment to get new 

acquisition programs approved and funded, many programs are initiated 

with requirements that make a proposed weapon system stand out from 

others. The systems engineering necessary to identify gaps between 

requirements and resources is often not accomplished until after the 

program is started. In these cases, performance requirements can 

outstrip the resources--technologies, funding, time, and expertise--

available to meet them. This creates a need for immature, fledgling 

technologies that are difficult to develop and usually results in 

unstable and incomplete a product design for which there is 

insufficient time to mature before starting production. Sufficient time 

or effort may not be available during product development to understand 

the productís critical characteristics or to bring key manufacturing 

processes in control to meet cost, schedule, and quality targets. In 

addition, there is not enough emphasis on building in reliability and 

reducing total ownership cost.



Typically, the results of this process are weapons that have superior 

performance, but that create longer-term collateral consequences such 

as:



* Higher acquisition costs that reduce buying power and force tradeoffs 

in other acquisitions,



* Increased costs to operate and support weapon systems at required 

readiness rates,



* Significant delays in getting weapon systems to warfighters,



* Reduced quantities,



* Early obsolescence, and:



* A diminishing supply base for critical parts and components.



DOD understands that it must get better outcomes from its acquisition 

process if it is to modernize its forces quickly within projected 

resources. To that end, it is currently revising acquisition policies 

to emphasize an evolutionary, knowledge-based process that incorporates 

best practices proven by successful companies in developing complex new 

products. We believe the policy changes, while not yet finalized, 

promise to be a good first step in changing DODís acquisition outcomes. 

If implemented properly, programs would face less pressure to deliver 

all of the ultimate capabilities of a weapon system in one ďbig bang.Ē 

The new policy has many positive features. For example, it:



* Separates technology development, which is unpredictable by nature, 

from product development, which requires major investments and is 

delivery-oriented;



* Articulates the concept of a knowledge-based approach, providing 

guidelines for achieving knowledge of technologies prior to beginning 

product development, stability of the systemís design by about midway 

through product development, and control over critical manufacturing 

processes for building a weapon system prior to a production decision;



* Places a greater emphasis on evolutionary product development, which 

provides a more manageable environment for achieving knowledge; and:



* Recognizes the benefits of best practices for product development 

from leading companies in capturing knowledge at critical junctures 

during product development.



While these policy changes represent tangible leadership action for 

getting better weapon system acquisition outcomes, unless the policies 

are implemented through decisions on individual programs, outcomes are 

not likely to change. Both form and substance are essential to getting 

desired outcomes. At a tactical level, we believe the policies could be 

made more explicit in several areas to facilitate such decisions. 

First, the regulations provide little or no controls at key decision 

points of an acquisition program that force a program manager to report 

progress against knowledge-based metrics. Second, the new regulations, 

once approved, may be too general and may no longer provide mandatory 

procedures. Third, the new regulations may not provide adequate 

accountability because they may not require knowledge-based 

deliverables containing evidence of knowledge at key decision points.



At a strategic level, some cultural changes will be necessary to 

translate policy into action. At the very top level, this means DOD 

leadership will have to take control of the investment dollars and to 

say ďnoĒ in some circumstances, if programs are inappropriately 

deviating from sound acquisition policy. In my opinion, programs should 

follow a knowledge-based acquisition policy--one that embraces best 

practices--unless there is a clear and compelling national security 

reason not to. Other cultural changes instrumental to implementing 

change include:



* Keeping key people in place long enough that they can affect 

decisions and be held accountable;



* Providing program offices with the skilled people needed to craft 

acquisition approaches that implement policy and to effectively oversee 

the execution of programs by contractors;



* Realigning responsibilities and funding between science and 

technology organizations and acquisition organizations to enable the 

separation of technology development from product development;



* Bringing discipline to the requirements-setting process by demanding 

a match between requirements and resources;



* Requiring readiness and operating cost as key performance parameters 

prior to beginning an acquisition; and:



* Demanding reliability testing early in design.



Ultimately, the success of the new acquisition policy will be seen in 

individual program and resource decisions. Programs that are 

implementing knowledge-based policies in their acquisition approaches 

should be supported and resourced, assuming they are still critical to 

national needs. Conversely, if programs that repeat the approaches of 

the past are approved and funded, past policies--and their outcomes--

will be reinforced.



Acquisition Workforce Challenges:



To effectively implement best practices and properly manage the goods 

and services it purchases each year requires that DOD have the right 

skills and capabilities in its acquisition workforce. This is a 

challenge given decreased staffing levels, increased workloads, and the 

need for new skill sets. Procurement reforms and the ongoing 

technological revolution have placed unprecedented demands on the 

workforce, and contracting personnel are now expected to have a much 

greater knowledge of market conditions, industry trends, and technical 

details of the commodities and services they procure.



In response to these challenges, DOD has made progress in laying a 

foundation for reshaping its acquisition workforce. The agency has 

initiated a substantial long-term strategic planning effort to identify 

the competencies needed for the future and to address what reshaping of 

the workforce will be needed to achieve the desired mix. DOD is 

continuing with an effort to test various human capital innovations and 

has begun making significant changes to its acquisition workforce-

training program. Part of this long-term effort will involve making a 

cultural shift as well as developing better data to manage risk by 

spotlighting areas for attention before crises develop and to identify 

opportunities for improving results.



Conclusion:



The continuing war on terrorism, regional instability, demographic and 

technological changes, as well as the federal governmentís short-and 

long-term budget pressures have created a challenging environment for 

the Department of Defense. It faces a number of difficult missions that 

will put its strategies, personnel, and resources under enormous 

strains. Consequently, it is important for the Department to adopt 

business practices that will enable it to acquire the systems and 

services to allow it to operate effectively in this environment. Doing 

so will help ensure that its resources are used in the most efficient 

manner possible. I am confident that the leadership of the Department 

is committed to that objective. Success over the long term will depend 

on the leadership sustaining its commitment to improving business 

practices through a strategic, integrated, and DOD-wide approach to 

ensure that these efforts achieve their intended results.



Mr. Chairman, this concludes my statement. I will be pleased to respond 

to questions from the Subcommittee.



FOOTNOTES



[1] Consolidated Appropriations Resolution, 2003, P.L. 108-7.



[2] In addition to competitive sourcing, the other initiatives are 

strategic management of human capital, improved financial performance, 

expanded electronic government, and budget and performance integration. 





[3] U.S. General Accounting Office, Information Technology: Leading 

Commercial Practices for Outsourcing of Services, GAO-02-214 

(Washington, D.C.: Nov. 30, 2001).



[4] This consensus view was based on interviews with managers in 

leading commercial organizations, discussions with academic and 

professional authorities, and extensive research on IT acquisition 

practices. 



[5] See U.S. General Accounting Office, High-Risk Series: An Update 

GAO-03-119 (Washington, D.C.: January 2003) for our most recent high-

risk report. 



[6] U.S. General Accounting Office, Information Technology: 

Inconsistent Software Acquisition Processes at the Defense Logistics 

Agency Increase Project Risks (GAO-02-9, Jan. 10, 2002). 



[7] U.S. General Accounting Office, Information Technology: 

Architecture Needed to Guide Modernization of DODís Financial 

Operations, GAO-01-525 (Washington, D.C.: May 17, 2001). 



[8] U.S. General Accounting Office, DOD Business Systems Modernization: 

Improvements to Enterprise Architecture Development and Implementation 

Efforts Needed, GAO-03-458 (Washington, D.C.: Feb. 28, 2003). 



[9] Incremental management involves three fundamental components: (1) 

acquiring a large system in a series of smaller increments; (2) 

individually justifying investment in each separate increment on the 

basis of cost, benefits, and risks; and (3) monitoring actual benefits 

achieved and costs incurred on ongoing increments and applying lessons 

learned to future increments. 



[10] Clinger-Cohen Act of 1996, P.L. 104-106, and Office of Management 

and Budget Circular A-130 (Nov. 30, 2000). 



[11] U.S. General Accounting Office, DOD Systems Modernization: 

Continued Investment in Standard Procurement System Has Not Been 

Justified, GAO-01-682 (Washington, D.C.: July 31, 2001).