From the U.S. Government Accountability Office, www.gao.gov Transcript for: Department of Defense Quick Look Description: Audio Interview by GAO staff with Michael Sullivan, Director, Acquisition and Sourcing Management Related GAO Work: GAO-15-342SP: Defense Acquisitions: Assessments of Selected Weapon Programs Released: May 2015 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's May 2015. 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 led by Mike Sullivan, a director in GAO's Acquisition and Sourcing Management team, recently completed this year's review. GAO's Jacques Arsenault sat down with Mike to talk about what they found. [ Jacques Arsenault: ] GAO assesses DOD's major weapon system acquisitions every year. Can you give me some examples of what these types of systems are? [ Mike Sullivan: ] These are what you think of when you think of our military, right? The Navy. The Army. The Marines. The Air Force. Our ability to stretch power all over the globe. So it's things like fighter aircraft, Joint Strike Fighters, the biggest program we have right now. We have a very big program right now for tanker, aircraft, ships, aircraft carriers, submarines, ground vehicles for the Army that would include things like the MRAP, a big armored vehicle that they used over in Iraq. It's what you would think of when you think about us going to war. [ Jacques Arsenault: ] What are some of the key challenges that DOD has historically faced in acquisition programs? [ Mike Sullivan: ] The biggest challenge that the department has-- it's that they have to balance national security needs against taxpayer dollars. So, to keep us safe and to keep our nation secure, they have to give the war fighter exactly what he or she needs to get the job done out there against threats that are constantly evolving. And they need to do that within the budgets that the Congress passes for them. They also are challenged in that they have three processes that have to come together to make sure a weapons system can be developed and procured properly. The first one is the requirement setting process, and that generally comes from the military services. They're out in the field. They know what they need so they write requirements for capabilities. There's a budgeting process that has to, of course, put the money in to make sure those requirements can be met. And then there's an acquisition process that basically oversees the product development. So that's like the industrial base of actually building it. So if you think about those three processes, you can see very clearly that they should be very integrated, and they should be able to communicate very freely with each other and be able to make the trades that are necessary to make everything work. [ Jacques Arsenault: ] So then, let me ask you, are there any changes that you found in this year's quick look? [ Mike Sullivan: ] First of all, year-over-year, it's probably important to note that there were five of these big acquisition programs that exited the portfolio. So that's programs that are retiring or getting out of production and programs coming in. So there's the Super Hornet, which was a big program that exited the process. And there's another program that exited called the Family of Medium Tactical Vehicles, which was an Army program that built a number of different size trucks and transport things. They both left and the two of those were $79 billion. There were three other smaller programs, a trainer aircraft that was to train fighter pilots, a light utility helicopter, and a satellite known as Navstar GPS also exited. They were worth about 18 billion. Three entered, The Littoral Combat Ship, the F-22 Modernization Program actually became a major defense acquisition program, and the program that's building an air and missile defense radar. Another change this year that we noticed is every year for the last 4 or 5 years, we've been checking on buying power. We have a metric that kind of determines whether or not the department is getting bang for the buck on the quantities that they buy. So if the program is getting more efficient and they're not adding quantities or anything in the unit cost, for example, of an F-22 or a JSF, goes down, that means that they're gaining buying power. If it goes up, it means that they're being less efficient and they're losing buying power. This year, for the first time in, I want to say three maybe 4 years, we saw a tick down in buying power, but we want to keep an eye on that. And most importantly, I think, rather than year-over-year the trend is the big change that we see. At its peak, this portfolio was something over $1.7 trillion, probably approaching 1.8 trillion. I think that was in 2010. Today, that's down to $1.4 trillion and 78 programs. [ Jacques Arsenault: ] And finally, for taxpayers and policymakers, what would you say is the bottom line of this report? [ Mike Sullivan: ] You know, I think the bottom line this year, if I had to use two words it would be momentum and leadership. What we have seen in the last 3 or 4 years, doing this quick look, is improvement. That's come a lot from the better buying power initiatives that the Pentagon's leadership has put in place and has really stuck to and is trying to change the culture with, quite frankly. And we also saw, 5 years ago, some legislation that the Congress passed, the Weapon Systems Acquisition Reform Act. So those two things continue, and we think they’re still pretty strong. We've said in, already, that there's not a lot of legislation left to do. The department just has to continue with the momentum. [ Background Music ] [ Narrator: ] To learn more, visit GAO.gov and be sure to tune in to the next episode of GAO's Watchdog Report for more from the congressional watchdog, the U.S. Government Accountability Office.