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

Transcript for: 2019 DOD Weapons Programs Quick Look

Description: We look at the Department of Defense's handling of their
major weapons systems over the past year. 

Related GAO Work: GAO-19-336SP: Weapon Systems Annual Assessment:
Limited Use of Knowledge-Based Practices Continues to Undercut DOD's
Investments

Released: May 2019


[ Background Music ]

[ Shelby Oakley: ] The momentum that we've seen since 2010, that
positive progress, has now stalled.

[ Jacques Arsenault: ] Welcome to GAO's Watchdog Report, your source for
news and information from the U.S. Government Accountability Office. I'm
Jacques Arsenault. Every year, GAO reports on Department of Defense
major weapon system acquisitions, providing a quick look at an area on
GAO's high-risk list. This report updates the status of DOD's major
weapons systems -- think aircraft, ships, and tanks. I'm with Shelby
Oakley, a director in our Contracting and National Security Acquisitions
team, and she's here to talk about this year's update. Thanks for
joining me, Shelby.

[ Shelby Oakley: ] Thanks for having me, Jacques.

[ Jacques Arsenault: ] So, is there any difference in this year's report
from those in prior years?

[ Shelby Oakley: ] Our report this year offers observations on 82 major
weapons programs. These are things like the missiles that the Army
develops, the Columbia-class submarine, or the Navy's new frigate. DOD
expects this portfolio of 82 programs is going to cost about $1.7
trillion. And while this is the most expensive portfolio that we've
reported on since 2011, it's comprised of less programs than in prior
years. As for our findings this year, the biggest difference is that for
the first time, we're reporting declining performance in programs that
have begun since 2010, newer programs. Another big change in our report
this year is that we enhanced our focus on the services and their
individual performance. At the direction of Congress, the Department of
Defense has really delegated responsibility for overseeing these major
weapons investments to the service acquisition executives.

[ Jacques Arsenault: ] So, looking at those changes and the cost growth
for the newer programs, is this based on new issues, or are these kind
of continuations of trends in the past?

[ Shelby Oakley: ] Unfortunately, we are seeing these newer programs
head down paths that we saw as challenging for the older programs, and
specifically what we're talking about here is that these newer programs
are continuing to inconsistently implement what we call knowledge-based
acquisition approaches, having adequate knowledge about your program
before making increasing investments. And it's those steps that really
lead to positive performance. We've been able to link the attainment of
knowledge to positive performance. We also did a new analysis this year
to take a look at DOD's use of competition. You know, competition is one
of the biggest things that can help achieve cost savings for the federal
government. Unfortunately, DOD is not really doing that great a job in
that regard, either. We found that 67 percent of DOD's major development
contracts were not competed. And for those that were, 47 percent of
those contracts went to the same five companies or their subsidiaries.
This could also be one of the contributing factors that we're seeing to
this broader trend of cost growth that we're reporting.

[ Background Music ]

[ Jacques Arsenault: ] So, it sounds like while the collection of DOD
major weapon systems has shrunk this year compared to last year, the
costs associated with this collection are rising due to some of those
things that you talked about. Shelby, how does DOD see its way clear of
this cost growth?

[ Shelby Oakley: ] Fundamentally, what we advocate for is that DOD
implement a knowledge-based acquisition approach so it can assure that
it has the knowledge it needs to have about its programs as increasing
investments are made. That's one way that DOD can be more likely to
achieve positive outcomes for its programs.

[ Jacques Arsenault: ] And finally, what would you say is the bottom
line of this report?

[ Shelby Oakley: ] DOD is really in the midst of a significant change
for how it manages and oversees its most expensive investments, these
major weapons programs. The momentum that we've seen since 2010, that
positive progress, has now stalled. And DOD seems to be at an inflection
point where it's handing over oversight of these programs to the
services who are overseeing programs that they actually manage. These
services, they have the opportunity to ensure that they're making really
informed decisions about the investments that they're making with that
authority. If they don't do that, if they don't make sure that they have
that knowledge, they could be at risk of repeating past mistakes, and
these trends that we're reporting this year could continue.


[ Jacques Arsenault: ] Shelby Oakley is a director in our Contracting
and National Security Acquisitions team, and she was talking about the
annual GAO quick-look report on major weapons systems acquisitions in
the Department of Defense. Thanks for your time, Shelby.

[ Shelby Oakley: ] Thanks for having me.

[ Background Music ]

[ Jacques Arsenault: ] And thanks for listening to the Watchdog Report.
To hear more podcasts, subscribe to us on Apple Podcasts. 

[ Jacques Arsenault: ] For more from the congressional watchdog, the
U.S. Government Accountability Office, visit us at gao.gov.