From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Reviewing DOD’s Portfolio of Major Weapon Programs

Description: Audio interview by GAO staff with Michael Sullivan,
Director, Acquisition and Sourcing Management

Related GAO Work: GAO-13-294SP: Defense Acquisitions: Assessments of
Selected Weapon Programs

Released: March 2013

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[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's March
2013. Each year, GAO reviews the Department of Defense's portfolio of
major weapon system acquisitions, an area that has been on GAO's High
Risk List for more than 20 years. A team lead by Mike Sullivan, a
director in GAO's Acquisition and Sourcing Management team, recently
completed this year's review. GAO's Jeremy Cluchey sat down with Mike to
talk about what they found.

[ Jeremy Cluchey: ] Why does GAO assess DOD's Weapon System acquisition?

[ Mike Sullivan: ] Well, the major weapon systems in DOD have been on
GAO's High Risk List—a  list we started more than 20 years ago since the
beginning—and there's probably a number of reasons. Number one is the
high dollar value attached to those programs. And in addition, they're
very risky programs by their nature. This is our 11th year to do the
quick look and it kind of came out of a series of acquisition reforms
and best practices work that we had done in the past. Around 2000 or so,
we had accumulated enough knowledge about how to impact the weapon
systems area—product development, best practices, and things like that.

[ Jeremy Cluchey: ] In this most recent version of the quick look, you
look at DOD's portfolio as it currently stands. Can you talk about that
portfolio and what some of the biggest projects are?

[ Mike Sullivan: ] Yeah. The portfolio—there’s 86 major weapon system
programs in there. These are the biggest programs in the Department of
Defense's arsenal, if you will. This year that portfolio, when you take
a look at the total cost to develop and acquire all of those 86 weapon
systems, the portfolio stands at about $1.6 trillion. That's down from
last year when it was about $1.75 trillion. I know that's an awful lot
of money. That's one of the reasons we keep track of this. And in
addition to that, the number of programs has decreased from 96 last year
to 86 this year. Now some of the big programs, the biggest of all is the
F-35 Lightning II Fighter Program which most people—we just issued a
report on that and that's the biggest acquisition program in the
department's history, so that's' the biggest one. There's the
Virginia-Class Sub, the DDG-51 Destroyer for the Navy is one of the
bigger ones, the Air Force has the Tanker Program now—it’s very big.
Those are all in the top 10.

[ Jeremy Cluchey: ] Your team also looked at how these programs are
being managed, including the knowledge that's gained and reform
initiatives that are being taken on. What did you find there?

[ Mike Sullivan: ] I think what we're finding—the last couple of years
we've done this, we're finding kind of a positive trend actually in the
number of programs, the cost, and also in the knowledge that they're
gaining at key junctures in their development processes. So this year,
you know we measure this at three distinct points—we measure it at the
beginning of program where they should have technology maturity. And I
believe this year we looked at programs in that area that are coming
into beginning—programs that are beginning their acquisition process and
found that the newer programs are—have a much better understanding of
their technologies than they have in the past, so that was a good trend.
The second knowledge point that we like to look at is design knowledge
which usually takes place about midway through the program. And that one
is not quite as clear as the first one. I think about 1/3 of the
programs that we looked at this year had a stable design and had good
design knowledge about midway through the program. That's up from past
years, but still not really great. And then the third knowledge point we
look at is whether or not they have knowledge of their manufacturing
processes so they can ramp up to a full-rate production. And that, while
there has been some slight improvement, they're still lacking in that
too.

[ Jeremy Cluchey: ] Finally, defense spending on these major weapon
acquisition programs is clearly a very large piece of the federal budget
pie. For taxpayers interested in this area of government spending,
what's the bottom line here?

[ Mike Sullivan: ] Well the bottom line is that there's an awful lot of
money invested in this area. Taxpayers need to be concerned. If you
think about the Department of Defense's budget, its half of the
discretionary budget that we talk about every year. And then if you
think about the inside of that, maybe a third of that money is spent on
these acquisitions. So you're talking year-in/year-out anywhere between
$150-$ 200 billion of taxpayer money being invested in these programs.
Yeah, and on one side it's very important to our country to maintain our
security in a really unstable world. On the other side, it costs an
awful lot of money and we should always be looking for efficiencies
there.

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