DOD's Industrial Modernization Incentives Program: An Evolving Program Needing Policy and Management Improvement
NSIAD-85-131
Published: Sep 06, 1985. Publicly Released: Sep 06, 1985.
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Highlights
GAO reviewed the adequacy of the Department of Defense's (DOD) Industrial Modernization Incentives Program (IMIP) test and resulting draft guidance. Through IMIP, DOD provides contractors incentives to invest in capital equipment and manufacturing processes in order to lower costs of weapons systems and improve the industrial base. The Deputy Secretary of Defense established a steering group to direct and monitor a test of IMIP and develop program policy and guidance based on an assessment of the services' experience.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should establish an IMIP reporting system that, at a minimum, collects data in both discounted and then-year dollars on gross benefits and government costs. |
Closed – Implemented
Changes were made in IMIP policy documents to strengthen visibility and ensure consistency in reporting. Also, annual status reports will be structured in accordance with GAO recommendations.
|
| Department of Defense | The Secretary of Defense should develop guidance specifying how and when IMIP benefit projections should be included in weapon system program cost estimates and budgets. |
Closed – Implemented
The IMIP guide contains guidance on how to track and measure cost savings.
|
| Department of Defense | The Secretary of Defense should direct the IMIP steering group to: (1) expand the review of experience gained during the test and, to the extent possible, clarify draft policy and guidance; and (2) monitor the continuing implementation of IMIP after the test and revise policy and guidance based on these evaluations. |
Closed – Implemented
The IMIP steering group was retained to address issues identified in this report.
|
| Department of Defense | The Secretary of Defense should review the IMIP planning and programming process in each service to ensure that the processes contain adequate structure to ensure IMIP efforts are directed toward those areas with the greatest potential benefits. |
Closed – Implemented
Annual service status reports, development of defense guidance, and greater industrial analysis have been implemented.
|
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Topics
Defense cost controlInvestmentsProgram managementWeapons systemsMilitary forcesSubcontractorsContract optionsCost estimatesProfitsInflation