Defense Acquisitions:

Better Approach Needed to Account for Number, Cost, and Performance of Non-Major Programs

GAO-15-188: Published: Mar 2, 2015. Publicly Released: Mar 2, 2015.

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What GAO Found

The Department of Defense (DOD) could not provide sufficiently reliable data for GAO to determine the number, total cost, or performance of DOD's current acquisition category (ACAT) II and III programs. These non-major programs range from a multibillion dollar aircraft radar modernization program to soldier clothing and protective equipment programs in the tens of millions of dollars. GAO found that the accuracy, completeness, and consistency of DOD's data on these programs were undermined by widespread data entry issues, missing data, and inconsistent identification of current ACAT II and III programs. See the figure below for selected data reliability issues GAO identified.

Two Most Frequent Reliability Issues Identified by GAO in DOD-Reported Data for Acquisition Category (ACAT) II and III Programs

 

Two Most Frequent Reliability Issues Identified by GAO in DOD-Reported Data for Acquisition Category (ACAT) II and III Programs

DOD components are taking steps to improve ACAT II and III data, but these steps do not fully address the problems GAO identified. For example, the components have not established systematic processes to perform data quality tests and assess the results to help identify problems for further review. These types of tests and assessments can be an important step in determining whether data can be used for its intended purposes. Additionally, DOD lacks metrics to assess ACAT II and III cost and schedule performance trends across programs and in some cases was missing baseline cost and schedule data to measure performance. Having timely and reliable cost, schedule, and performance data on smaller acquisition programs is critical to ensuring that DOD and its components can account for how they are spending their money and how well they are spending it. Reliable data are also essential for effective oversight and bringing the right oversight resources to bear when programs approach the cost threshold to become a major defense acquisition program due to cost growth.

Thirteen of the 15 ACAT II or III programs GAO reviewed in-depth had exceeded their original cost or schedule targets. Program officials from ACAT II and III programs GAO reviewed cited changing performance requirements, testing issues, quantity changes, and flaws in original cost estimates, among other factors, as the reasons for cost and schedule growth. GAO has previously found that similar factors affect the performance of major acquisition programs.

Why GAO Did This Study

DOD requested $168 billion in fiscal year 2014 to develop, test, and acquire weapon systems and other products and equipment. About 40 percent of that total is for major defense acquisition programs or ACAT I programs. DOD also invests in other, non-major ACAT II and III programs that are generally less costly at the individual program level. These programs typically have fewer reporting requirements and are overseen at lower organizational levels than ACAT I programs, although they may have annual funding needs that are just as significant.

GAO was asked to examine ACAT II and III programs. This report addresses, among other issues, (1) the extent to which information is available on the number, cost, and performance of ACAT II and III programs and (2) factors that affected the performance of selected ACAT II and III programs. GAO collected program and cost data on current ACAT II and III programs from five DOD components. GAO also selected a non-generalizable sample of 15 programs based on program cost and other criteria and reviewed documentation and interviewed officials about program performance.

What GAO Recommends

GAO recommends that DOD establish guidelines on what constitutes a current ACAT II and III program, take steps to improve data reliability, and determine how to measure cost and schedule performance. DOD partially concurred with the recommendations and described actions it plans to take. However, as discussed in the report, DOD's planned actions may not fully address the issues that GAO identified.

For more information, contact Mike Sullivan at (202) 512-4841 or sullivanm@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: DOD partially concurred with our recommendation and stated that it planned to review existing policy to see if revisions were needed. Since that time, DOD has taken some steps to implement this recommendation, but has not established department-wide guidelines as we recommended. Starting in September 2018, DOD began providing the military departments with a capability to identify ACAT II and III programs using the Defense Acquisition Visibility Environment (DAVE) system. The DAVE system is now considered to be a trusted source for ACAT II and III program data. DOD, in consultation with the military departments, established standard data elements for collection across ACAT II and III programs for inclusion in DAVE, but the military departments determine individually what constitutes a "current" program and the types of programs that do not require ACAT designations. As of August 2019, the Army and Navy have established guidance regarding what constitutes an active ACAT II or III program for reporting purposes.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in consultation with DOD components, to establish guidelines on what constitutes a "current" ACAT II or III program for reporting purposes; the types of programs, if any, that do not require ACAT designations; and whether the rules for identifying current MDAPs would be appropriate for ACAT II and III programs.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: DOD partially concurred with our recommendation and stated that it planned to review existing policy to see if revisions were needed. DOD has taken steps to implement this recommendation, but has yet to determine at the department level what metrics should be collected on ACAT II and III cost and schedule performance as we recommended. DOD determined that the use of the Defense Acquisition Visibility Environment (DAVE) system, which is closely related to DAMIR, was appropriate to collect information on ACAT II and III programs and has made that system available to the military departments. Specifically, DOD provided the military departments with the capability to identify ACAT II and III programs in DAVE/DAMIR in September 2018 and made the DAVE/DAMIR Acquisition Program Baseline (APB) workflow tool for cost and schedule data collection available for components' use in April 2019. However, according to officials from the Office of the Under Secretary of Defense for Acquisition and Sustainment, the military departments are responsible for individually determining what cost and schedule metrics to collect and monitor for ACAT II and III programs. According to December 2018 Army guidance, the Army will require all ACAT II and III programs use DOD's APB tool by the end of fiscal year 2019 to capture baseline cost, schedule, and performance parameters for ACAT II and III programs. According to Navy officials, the Navy is developing an APB tool in its for a future update of its acquisition information system that will collect APB cost and schedule information for ACAT II and III programs.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in consultation with DOD components, to determine what metrics should be used and what data should be collected on ACAT II and III programs to measure cost and schedule performance; and whether the use of DAMIR and the MDAP selected acquisition report format may be appropriate for collecting data on ACAT II and III programs.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: DOD partially concurred with our recommendation and stated that it would direct DOD components to evaluate data on ACAT II and III programs and report back on the reliability of the data and plans to improve it. In September 2015, the Assistant Secretary of Defense directed the military departments and DOD components to assess the reliability of ACAT II and III data, but in July 2018, the Office of the Under Secretary of Defense for Acquisition & Sustainment confirmed that based on the results of the assessments reported by the components, it does not plan to take any additional action to implement this recommendation. Since that time, as of September 2018, DOD began providing standard data elements and definitions of those elements that it collects for ACAT II and III program identification in order to improve the consistency of data. However, officials from the Office of the Under Secretary of Defense for Acquisition and Sustainment stated that it is still up to the military departments to ensure the accuracy of data entered.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Secretaries of the Air Force, Army, and Navy and the Commander of SOCOM to assess the reliability of data collected on ACAT II and III programs and work with PEOs to develop a strategy to improve procedures for the entry and maintenance of data.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: DOD partially concurred with our recommendation and stated that it would direct DOD components to evaluate data on ACAT II and III programs and report back plans to improve it. In September 2015, the Office of the Assistant Secretary of Defense for Acquisition requested that DOD components provide an update on their plans to improve the availability and quality of ACAT II and III data. In July 2018, the Office of the Under Secretary of Defense for Acquisition & Sustainment confirmed that based on an assessment of the information reported by the components, it does not plan to take any additional action to implement this recommendation. Officials from the Office of the Under Secretary of Defense for Acquisition & Sustainment reiterated in August 2019 that while DOD now provides a department-wide system to be used for collecting basic program data for ACAT II and III programs, it remains the responsibility of the military departments to enter complete and accurate data.

    Recommendation: To improve DOD's ability to collect and maintain reliable data on its acquisitions, the Secretary of Defense should direct the Secretaries of the Air Force, Army, and Navy and the Commander of SOCOM to develop implementation plans to coordinate and execute component initiatives to improve data on ACAT II and III programs.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: DOD partially concurred with our recommendation and stated that the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics would issue guidance to DOD components related to APB requirements for ACAT II and III programs. DOD has taken some steps related to this recommendation. In September 2015, the Office of the Assistant Secretary of Defense for Acquisition requested that DOD components review their mechanisms for establishing and enforcing the APB requirements for all ACAT II and III programs. In July 2018, the Office of the Under Secretary of Defense for Acquisition & Sustainment confirmed that, based on the results of these reviews, it does not plans to take any action to implement this recommendation. However, in 2019, DOD made its DAVE/DAMIR APB workflow tool available for military department use, and the Air Force elected to use the tool to create and track APBs for ACAT II and III programs.

    Recommendation: To help ensure compliance with relevant provisions of DOD acquisition policy with the purpose of improving DOD's ability to provide oversight for ACAT II and III programs, including those programs that may become MDAPs, the Secretary of Defense should direct the Secretary of the Air Force and Commander of SOCOM to establish a mechanism to ensure compliance with APB requirements in DOD policy.

    Agency Affected: Department of Defense

  6. Status: Open

    Comments: DOD partially concurred with our recommendation and stated that the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics would issue guidance to DOD components related to notification requirements for programs approaching ACAT I cost thresholds. The Army and Navy have reiterated existing guidance and the Air Force is evaluating additional actions it might take to improve its notification procedures. The Office of the Under Secretary of Defense for Acquisition & Sustainment confirmed in July 2018 that it does not plan to take additional actions to implement this recommendation, and as of August 2019, that office has not directed DOD components to improve their processes as we recommended.

    Recommendation: To help ensure compliance with relevant provisions of DOD acquisition policy with the purpose of improving DOD's ability to provide oversight for ACAT II and III programs, including those programs that may become MDAPs, the Secretary of Defense should direct the Secretaries of the Air Force, Army, and Navy to improve component procedures for notifying the Defense Acquisition Executive of programs with a cost estimate within 10 percent of ACAT I cost thresholds.

    Agency Affected: Department of Defense

 

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