Weapons Acquisition Reform:

Reform Act Is Helping DOD Acquisition Programs Reduce Risk, but Implementation Challenges Remain

GAO-13-103: Published: Dec 14, 2012. Publicly Released: Dec 14, 2012.

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What GAO Found

The Department of Defense (DOD) has taken steps to implement fundamental Weapon Systems Acquisition Reform Act of 2009 (Reform Act) provisions, including those for approving acquisition strategies and better monitoring weapon acquisition programs. DOD is also continuing to take additional steps to strengthen policies and capabilities. Some provisions, such as issuing guidance for estimating operating and support costs, are being implemented.

GAO's analysis of 11 weapon acquisition programs showed the Reform Act has reinforced early attention to requirements, cost and schedule estimates, testing, and reliability. For example, prior to starting development, an independent review team raised concerns about the Ground Combat Vehicle program's many requirements and the risks associated with its 7-year schedule. Subsequently, the Army reduced the number of requirements by about 25 percent and prioritized them, giving contractors more flexibility in designing solutions. In addition, the developmental test and evaluation office--resulting from the Reform Act--used test results to help the Joint Light Tactical Vehicle program develop a more realistic reliability goal and a better approach to reach it.

While DOD has taken steps to implement most of the fundamental Reform Act provisions, some key efforts to date have been primarily focused on DOD's largest weapon acquisition programs. DOD faces five challenges--organizational capability constraints, the need for additional guidance on cost estimating and Reform Act implementation, the uncertainty about the sufficiency of systems engineering and developmental testing resources, limited dissemination of lessons learned, and cultural barriers between the Office of the Secretary of Defense (OSD) and the military services--that limit its ability to broaden the Reform Act's influence to more programs. Service officials believe additional guidance is needed to improve their cost estimates and other implementation efforts. They also believe that lessons learned from programs that experience significant cost and schedule increases should be shared more broadly within the acquisition community. These challenges seem straightforward to address, but they may require more resources, which have been difficult to obtain. Ensuring the services have key leaders and staff dedicated to systems engineering and developmental testing activities, such as chief engineers at the service level and technical leads on programs, as well as breaking down cultural barriers are more difficult to address. They will require continued monitoring and attention by the Under Secretary for Acquisition, Technology and Logistics, service acquisition executives, and offices established as a result of the Reform Act to address.

Why GAO Did This Study

For the past 3 years, DOD has been implementing the Reform Act requirements which are aimed at helping weapon acquisition programs establish a solid foundation from the start. This helps to prevent cost growth, thus helping the Defense dollar go further. This is the third in a series of GAO reports on the Reform Act.

GAO was asked to determine (1) DOD's progress in implementing Reform Act provisions; (2) the impact the Reform Act has had on specific acquisition programs; and (3) challenges remaining. To do this, GAO analyzed documents and interviewed officials from the four OSD offices created as a result of the Reform Act, other DOD offices, the military services, and 11 weapon acquisition programs we chose as case studies. Case study programs were selected based on their development status and interaction with the four OSD offices. Results cannot be generalized to all DOD weapon acquisition programs.

What GAO Recommends

GAO recommends DOD develop additional cost estimating and Reform Act implementation guidance; make lessons learned available to the acquisition community; and assess the adequacy of the military services' systems engineering and developmental testing workforce. DOD generally concurred with the recommendations. GAO clarified one recommendation to make it clear that DOD needs to designate an office(s) within the Acquisition, Technology and Logistics organization to provide practical Reform Act implementation guidance to program offices.

For more information, contact Michael J. Sullivan at (202) 512-4841 or sullivanm@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To enable systemic change across the entire portfolio of weapon acquisition programs, the Secretary of Defense should direct the Director of Cost Assessment and Program Evaluation to issue guidance for estimating weapon acquisition program costs at Milestone A and operating and support costs throughout the acquisition life cycle by the end of fiscal year 2013 and ensure that the office prioritizes its resources accordingly to accomplish this task.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DOD partially concurred with this recommendation and is taking implementation actions. DOD's Office of Cost Assessment and Program Evaluation (CAPE) is in the process of updating its guidance for cost estimation, including guidance for estimating major defense acquisition program cost at Milestone A and operating and support cost through the acquisition lifecycle. Specifically, CAPE is currently developing drafts of both an updated DOD 5000.04-M, "Cost Analysis Guidance and Procedures," which contains guidance for cost estimation at Miletone A, and an updated Operating and Support Cost Estimating Guide.

    Recommendation: To enable systemic change across the entire portfolio of weapon acquisition programs, the Secretary of Defense should designate responsibility for providing advice and guidance to program offices on competitive prototyping and preliminary design reviews to the appropriate organization within the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics and ensure that the guidance is developed. The office(s) designated would be the focal point for addressing program office issues related to the practical implementation of these Reform Act provisions, such as the type of competitive prototyping to use, the timing and benefits of holding preliminary design reviews prior to milestone B, and if a preliminary design review should be held after milestone B.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: DOD concurred with this recommendation and has taken implementation steps. On April 24, 2013, the Under Secretary of Defense for Acquisition, Technology and Logistics issued a memorandum entitled "Implementation Directive for Better Buying Power 2.0 - Achieving Greater Efficiency and Productivity in Defense Spending." The memorandum directs the Assistant Secretary of Defense (Acquisition) (ASD(A)), with the Assistant Secretary of Defense for Research and Engineering (ASD(R&E)), to codify best practices for technology development phase risk reduction that highlights the life-cycle benefits of competitive prototyping, but reinforces the need for meaningful linkage between prototyping and other risk reduction activities and the product to be developed. On May 8, 2013, Deputy Assistant Secretary of Defense Systems Engineering (DASD(SE)) released an updated Chapter 4 of the Defense Acquisition Guidebook (https://acc.dau.mil/dag4). Section 4.2.4. of the Guidebook, "Technology Development Phase," which contains a discussion of competitive prototyping, its objectives, and recommended strategies. In addition, Section 4.2.12., "Preliminary Design Review", provides guidance to programs regarding planning and execution of the preliminary design review (PDR). A revision to DODI 5000.02 has been drafted and is in review and coordination. Further guidance changes regarding competitive prototyping and PDRs are pending final release of this document.

    Recommendation: To enable systemic change across the entire portfolio of weapon acquisition programs, the Secretary of Defense should direct the Deputy Assistant Secretaries of Defense for Systems Engineering and Developmental Test and Evaluation to assess and include in their annual report to the Congress beginning with the report on fiscal year 2012 activities: (1) the extent to which the office can perform their required activities with allocated resources; (2) the impact budget cuts are having on the military services total workforce (civilians, military, and contractors) and ability to meet program office needs; and (3) progress the services have made filling leadership positions, such as chief engineers at the service level and technical leads for systems engineering and developmental testing at the program office level.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DOD took some steps to implement this recommendation. In March 2013, the Acting Deputy Assistant Secretary for Developmental Test and Evaluation reported to the Congress that the fiscal year 2012 budget provided funding for the responsibilities prescribed by law and assigned in DOD 5134.17, "Deputy Assistant Secretary of Defense for Developmental Test and Evaluation." However, based on staffing of 16 government personnel and 54 contractors, the report states that the office has had to remain selective in its level of oversight of major defense acquisition programs, major automated information system programs, and special interest programs designated by the Under Secretary for Acquisition, Technology and Logistics. Additionally, this report stated that the services have made progress in fiscal year 2012 in designating the Chief Developmental Tester as the key leadership position on major defense acquisition programs and major automated information system programs. The report stated that the number of key leadership positions/Chief Developmental Testers continued to increase during fiscal year 2012 and that a total of 62 have been identified for Army, Navy, Air Force, and other defense components. The report did not contain any information on the impact the budget cuts are having on the military services total workforce and their ability to meet program office needs. In March 2013 the Deputy Assistant Secretary for System Engineering reported to the Congress that he will remain attentive to the impacts of the budget on his organization. The report also stated that a team of stakeholders from the DOD acquisition community is working to define requirements for Key Leadership Positions. Finally, the report stated that the Deputy Assistant Secretary for Systems Engineering has sustained a workforce capable of fulfilling its mission since its establishment in 2009.

    Recommendation: To enable systemic change across the entire portfolio of weapon acquisition programs, the Secretary of Defense should direct the Director of Performance Assessments and Root Cause Analyses to make lessons learned collected during its root cause analysis evaluations available to the acquisition workforce and ensure that the office prioritizes its resources accordingly.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DOD concurred with this recommendation, but has not yet taken implementation actions. According to a Performance Assessment and Root Cause Analysis (PARCA) official, the office is continuing to perform activities the organization had already started when we conducted our review. For example, the Director of PARCA continues to engage acquisition officers in discussions of root cause analyses findings at the Defense Acquisition University (DAU) through its senior management courses. Additionally, the Director continues to brief root cause analyses findings to public and private audiences, commodity commands and industry-government groups such as the National Defense Industrial Association at meetings, conferences, and symposiums. The Director also shares acquisition assessments such as the Performance of the Defense Acquisition System Annual Report are briefed to service acquisition executives. Finally, the Director provides a report to Congress on PARCA's activities undertaken in the previous year. We previously highlighted these activities in our report. No new formal processes have been developed by PARCA that would provide more detailed lessons learned from its root cause analysis evaluations as we recommended.

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