Defense Acquisitions: Higher Priority Needed for Army Operating and Support Cost Reduction Efforts
NSIAD-00-197
Published: Sep 29, 2000. Publicly Released: Sep 29, 2000.
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Highlights
Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) efforts to reduce weapon system operating and support costs, focusing on the Army's efforts to reduce: (1) projected operating and support costs for weapon systems under development; and (2) operating and support costs of fielded weapon systems.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To increase the priority of and to provide the mechanisms needed to achieve significant reductions in operating and support costs, the Secretary of Defense should direct the Secretary of the Army to establish operating and support cost requirements for developmental and fielded systems and regularly monitor each system's progress in meeting the requirement. |
Closed – Implemented
In its June 2001 update of its acquisition policies, DOD instructed acquisition and user communities to treat weapon system total ownership cost as a military requirement for each program; develop cost thresholds and objectives; and to reassess those objectives and progress toward achieving them at each milestone. In these revised policies, DOD has significantly increased the priority given to addressing total ownership costs (which includes operating and support costs) issues throughout the acquisition process.
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| Department of Defense | To increase the priority of and to provide the mechanisms needed to achieve significant reductions in operating and support costs, the Secretary of Defense should direct the Secretary of the Army to develop a more complete and accurate accounting of each weapon system's operating and support costs by expanding the Army's current cost data system to include additional cost elements such as software and supply system support costs. |
Closed – Not Implemented
The Army initially responded that, as the lessons and data are gleaned from its Total Ownership Cost initiatives, an alternative to the current accounting approach may be adopted. However, the Army has since reorganized its headquarters' organizations and has transferred the staff and functions of the Total Ownership Cost Directorate to other organizations. GAO does not anticipate any near-term actions to improve the total ownership cost accountings systems or processes.
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| Department of Defense | To increase the priority of and to provide the mechanisms needed to achieve significant reductions in operating and support costs, the Secretary of Defense should direct the Secretary of the Army to promptly provide the necessary funding and staffing to fully establish the Total Ownership Cost Directorate. |
Closed – Not Implemented
Initally, the Army appeared to be poised to provide funding and staffing to fully establish the Total Ownership Cost Directorate. However, pursuant to DOD guidance that the Army reorganize its headquarters staff, all efforts to add more funding and staffing to the Directorate have been deferred. In addition, the functions and personnel of the Directorate have been transferred to another organization within the Army.
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Topics
Army procurementLife cycle costsMilitary aircraftMilitary cost controlWeapons research and developmentWeapons systemsU.S. ArmyCost controlOperating and support costsWeapon systems