Observations on Office of Management and Budget Circular A-109--Major System Acquisitions by the Department of Defense

PSAD-79-9: Published: Feb 20, 1979. Publicly Released: Feb 20, 1979.

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The Office of Management and Budget Circular A-109 prescribes policies to guide Federal agencies in managing their major system acquisition programs. The Circular is based on recommendations proposed in December 1972 by the Commission on Government Procurement. Circular A-109 applies to a variety of systems, but this report deals entirely with the Circular's application to defense activities. The Department of Defense (DOD) employs two primary methods in managing and controlling acquisition programs for major weapon systems: (1) the basic planning, programming, and budgeting system used to manage all DOD assets; and (2) the program management guidance for acquiring major weapon systems. GAO reviewed the extent to which DOD is complying with A-109 and the effect it has had on DOD's management. The Deputy Secretary of Defense informed the Office of Management and Budget's Office of Federal Procurement Policy in 1976 that DOD planned to revise a number of DOD directives which relate to system acquisition activities in order to comply with A-109.

Experience with Circular A-109 is too new to permit a complete evaluation of its value in improving the management of defense acquisitions, especially in the "front end" of the acquisition process where needs are determined and solutions identified. It is apparent, however, that DOD and the services have been slow in adopting A-109 guidance in management policies and procedures for major weapon system programs. Implementation of A-109 in DOD has been spotty; the Army and Air Force have been most responsive and have revised their basic directives on system acquisition to reflect the new policies, but the Navy has not given it a high priority. The Office of the Secretary of Defense (OSD) has been taking prolonged reviews of statements of need submitted by the services, and this practice could lead to disenchantment with Circular A-109. OSD has not revised more than two basic directives to comply with A-109. OSD has not extended the Circular's policy to military construction and is only now beginning to extend it to the acquisition of automatic data processing equipment. Additional OSD guidance to the services would be useful on aspects of A-109 such as joint mission analyses and devising a good acquisition strategy applicable to major weapon systems.

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