DOD Weapon Systems Acquisition - High Risk Issue
Congress and DOD have long sought to improve how major weapon systems are acquired, yet many DOD programs fall short of cost, schedule, and performance expectations. This means that DOD pays more than anticipated, can buy less than expected, and, in some cases, delivers less capability to the warfighter.
As stated in the 2017 High Risk Update, top leadership at DOD is committed to improving the way DOD acquires weapon systems. Since this area was added to GAOâ€™s High Risk List in 1990, DOD has made progress in addressing challenges, such as through the Better Buying Power initiatives outlined by the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics since 2010. Although DOD lacks a comprehensive action plan for fully addressing this High Risk area and its root causes, the Better Buying Power initiatives are a step in the right direction, as DOD has prescribed a number of concrete changes. DOD has partially met the criteria for monitoring by issuing a series of annual performance reports on the portfolio of major defense acquisition programs. In 2016, DOD issued the fourth report in this series. Continuing and expanding this series of reports should help DOD measure its progress over time.
DOD has partially met the criteria for capacity by, for example, updating some policies to enable better outcomes and assessing the acquisition workforce. However, concerns remain about whether DOD will fully implement its proposed reforms or continue to track progress in meeting workforce goals, as DOD has, in the past, failed to convert policy into practice. DOD has partially met the criteria for demonstrating progress as it relates to the cost and schedules of its weapon programs. As of March 2017, many DOD programs are making progress in reducing their cost growth, but individual weapon programs are still not conforming to best practices for acquisition, or implementing key acquisition reforms and initiatives that could prevent long-term cost and schedule growth.
While there is still cost and schedule growth in major defense acquisition programs, DOD has made progress in decreasing the amount of cost growth realized in the portfolio as a whole, as shown in the table below.
Note: Some numbers may not sum due to rounding.
aIn addition to research and development and procurement costs, total acquisition cost includes acquisition-related operation and maintenance and system-specific military construction costs.
Additionally, the 19 newest programs in the portfolio decreased their costs by a combined $3.4 billion between 2015 and 2016.
While there were cost improvements in this timeframe, there was also schedule growth. Programs took almost 2 months longer on average to deliver initial capabilities to the warfighter. Performance in DODâ€™s progress in improving program efficiencies was also mixed. For example, although the portfolio increased its buying power by $10.7 billionâ€”meaning that DOD was able to buy more goods and services for the same level of fundingâ€”more programs overall lost buying power (40) than gained or had no change in buying power (38).
DOD's major acquisition programs also showed mixed performance when measured against three cost-growth targets. In particular,
- 78 percent of programs met the threshold for less than 10 percent growth over the past 5 yearsâ€”an improvement over previous assessmentsâ€”yet
- fewer programsâ€”72 percent and 46 percentâ€”met the thresholds for less than 2 percent growth in the past year and less than 15 percent growth since first full estimates, respectively, as compared to a previous assessment (see figure).
Figure: Comparison of the Cost Performance of DOD's 2012-2016 Portfolios
Note: DOD did not issue Selected Acquisition Reports in 2009, which precluded us from having the cost baseline information necessary to assess the 5-year performance of the 2014 portfolio.
Since 2013, Congress has included numerous reforms in the National Defense Authorization Acts (NDAA). For example, Congress has:
- introduced measures to control costs on acquisition programs by requiring DOD to limit the use of cost-type contracts for production, and to open programs to competition at the subcontract level. (2013 NDAA)
- expanded requirements for cost reporting by requiring DOD to include additional cost and schedule estimates in its annual reports to Congress. (2014 NDAA)
- made numerous reforms to the acquisition process including requiring more close involvement of the service chiefs; requiring DOD to report on efforts to streamline the requirements, acquisition, and budgeting processes; stipulating the use and contents of an acquisition strategy; and reducing the number of certifications required for programs at milestone reviews. (2016 NDAA)
- enacted reforms to require modular open system approaches in major programs, further ensure the achievement and reporting of program goals, modify requirements for independent cost estimates, and reorganize the acquisition authority within the Office of the Secretary of Defense. (2017 NDAA)
GAO-18-158: Published: Dec 21, 2017. Publicly Released: Dec 21, 2017.
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GAO-17-333SP: Published: Mar 30, 2017. Publicly Released: Mar 30, 2017.
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GAO-17-317: Published: Feb 15, 2017. Publicly Released: Feb 15, 2017.
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GAO-17-279T: Published: Dec 8, 2016. Publicly Released: Dec 8, 2016.
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GAO-08-619: Published: Jul 2, 2008. Publicly Released: Jul 2, 2008.
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