The Department of Defense (DOD) has repeatedly delivered the most capable weapon systems in the world, but the process used to manage the acquisition of these systems has been characterized by organizations both internal and external to DOD as one that is inefficient, cumbersome, and bureaucratic. As of December 2014, DOD’s portfolio of major defense acquisition programs included 78 programs with a total estimated acquisition cost of roughly $1.4 trillion.
In DOD’s acquisition process, weapon system programs typically proceed through three major milestones—A, B, and C—where program offices provide information to the milestone decision authority in order to make a decision on whether the program is ready to transition to the next acquisition phase. The milestones normally represent transition points in the overall acquisition process where there is a marked increase in the resources required for the program. Statutes and DOD policy require the documentation of specific information—known as information requirements—on major defense acquisition programs at each acquisition milestone.
DOD’s acquisition process is managed and supported by officials at different hierarchical levels. Weapon system program managers typically report to program executive officers in each military service, who are charged with overseeing the execution of a portfolio of related systems such as fighter aircraft or ships. Program executive officers, in turn, typically report to a military service acquisition executive, who reports to the defense acquisition executive. As part of the milestone decision process, programs are reviewed at each level before reaching the milestone decision authority, who is responsible for making decisions at major program milestones.
Major defense acquisition programs are those identified by DOD with a dollar value for all increments estimated to require eventual total expenditures for research, development, test, and evaluation of more than $480 million or for procurement of more than $2.79 billion in fiscal year 2014 constant dollars.
Milestone A is the decision for an acquisition program to enter into the technology maturation and risk reduction phase; Milestone B is the decision to enter the engineering and manufacturing development phase; and Milestone C is the decision to enter the production and deployment phase.
For a February 2015 report, GAO surveyed 24 weapon acquisition programs and found that, on average, they spent over 2 years completing up to 49 information requirements for their most recent milestone decision. This includes the time for the program office to develop the documentation and for various stakeholders to review and approve the documentation. A primary reason it takes over 2 years to complete the information required for a milestone decision is the large number of stakeholders that review the documents at the many organizational levels above the program office. At the same time, most program managers considered these reviews to add high value to only 10 percent of the documents.
DOD’s review process can be duplicative in nature, with many organizational levels and offices. The information and documentation required at milestones can be reviewed by as many as eight different organizational levels before a decision is reached on whether a program is ready for the next acquisition phase. In general, the information is reviewed at each level to gain approval before the program provides the information to the next level. This is done serially, which takes more time. Eventually, the milestone decision authority and other senior executives review the information and determine whether the program is ready to proceed to the next acquisition phase.
Many different functional organizations within each level review the information before the document is approved. The number of organizations conducting reviews varies depending on the information included in each document. A few documents that include a wide breadth of information can be reviewed by many offices at each level. For example, Air Force acquisition strategies, which on average took over 12 months to complete for the programs GAO surveyed, can be reviewed by 56 offices, some more than once, before being approved.
In contrast, some DOD classified programs and five commercial firms GAO visited use streamlined methods to provide input needed for milestone decisions with fewer documents and reviews. Several past DOD programs, like the F-16 and F-117 aircraft programs, were managed successfully with a more streamlined approach, and DOD is currently using a more streamlined milestone decision process for some classified programs. Commercial companies GAO examined—Boeing, Caterpillar, Cummins, Honda, and Motorola Solutions—also use processes that minimize the levels of review resulting in a quicker, more efficient milestone decision process. The figure below compares the review levels of DOD’s traditional programs to the streamlined review process used for some classified programs.
Comparison of Review Levels for DOD Traditional and Classified Programs
The need to document information about essential aspects of a program and for an appropriate level of review and approval is legitimate. According to federal internal control standards, agencies should develop effective and efficient processes to ensure that actions are taken to address requirements, such as in this case, completing the information required to aid in milestone decisions. However, over time, the process has become bloated, time-consuming, and cumbersome to complete. If the information requirements and associated reviews are not providing value and are not clearly linked with the key issues facing weapon system acquisitions today, inefficiencies will likely remain. Establishing an efficient process for documentation and oversight is a key internal control to avoid wasteful spending.
To help improve DOD’s milestone decision process, GAO recommended in February 2015 that the Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology, and Logistics in collaboration with the military service acquisition executives, program executive officers, and program managers to take the following action:
Taking this action will help DOD reduce the duplication embedded in its milestone decision process and improve the efficiency of its major weapon system acquisition programs, which should help the department avoid wasteful spending. GAO could not estimate the potential financial benefits of this action because data are not available to measure the costs of the current or streamlined review processes.
The information contained in this analysis is based on findings from the product listed in the related GAO product section. To perform this work, GAO examined the levels of review and information requirements that are part of DOD’s milestone decision process. GAO surveyed 24 program managers and 40 other DOD officials on the value and the time to complete milestone documentation. For 15 programs, GAO gathered data on the time to complete the entire milestone decision process. GAO discussed with DOD officials the factors that lead to inefficiencies. GAO also examined practices used by some classified DOD programs and five commercial firms generally recognized as leaders in product development.
Table 1 in appendix V shows the estimated acquisition costs associated with major weapons systems.
In commenting on the February 2015 report on which this analysis is based, DOD agreed with our recommendations and reported that efforts are under way, although not yet fully implemented, to address the recommendations.
GAO provided a draft of this report section to the Department of Defense for review and comment. The department did not provide comments on this report section.
For additional information about this area, contact Michael J. Sullivan at (202) 512-4841 or email@example.com.
The acquisition programs GAO surveyed spent, on average, over 2 years completing numerous information requirements for their most recent milestone decision, yet acquisition officials considered only about half of the requirements as high value. The requirements, in total, averaged 5,600 staff days to document.Average Time 24 DOD Programs Needed to Complete Information Requirements Grouped by the V...