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Highlights

Department of Defense (DOD) weapon programs often experience significant cost and schedule problems because they are allowed to start with too many technical unknowns and not enough knowledge about the development and production risks they entail. GAO was asked to review the department's Analysis of Alternatives (AOA) process--a key first step in the acquisition process intended to assess the operational effectiveness, costs, and risks of alternative weapon system solutions for addressing a validated warfighting need. This report (1) examines whether AOAs have been effective in identifying the most promising options and providing a sound rationale for weapon program initiation, (2) determines what factors have affected the scope and quality of AOAs, and (3) assesses whether recent DOD policy changes will enhance the effectiveness of AOAs. To meet these objectives, GAO efforts included collecting information on AOAs from 32 major defense acquisition programs, reviewing guidance and other documents, and interviewing subject matter experts.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense 1. To further strengthen the effectiveness of AOAs in helping DOD establish sound business cases for major weapon programs, the Secretary of Defense should establish specific criteria and guidance for how AOAs should be conducted, including how technical and other programmatic risks should be assessed and compared.
Closed - Implemented
In providing comments on this report, the agency concurred with this recommendation and indicated that the role of the analysis of alternatives (AOA) had been codified in revisions to the department's acquisition policy in December 2008. Subsequently, the Weapon Systems Acquisition Reform Act of 2009, specified that the Director of Cost Assessment and Program Evaluation (DCAPE) is responsible for leading the development of study guidance for AoAs. DOD clarified the functions and responsibilities of the DCAPE in a policy directive in 2012 (DODD 5105.84, May 11, 2012), including authority to guide and assess AoAs in support of military acquisition program decisions. Specifically, DCAPE is responsible for ensuring that AoAs consider trade-offs among effectiveness, suitability, and costs of alternatives, by (a) developing AoA study guidance for major defense acquisition programs, (b) approving AoA study plans for each program, and (c) evaluating the adequacy of each AoA conducted, to include a determination on whether the analysis is consistent with the AoA guidance. This broad policy guidance should contribute to improvements in the conduct of AOAs, however, GAO has not assessed the nature and extent of DCAPE's guidance for specific AOAs.
Department of Defense 2. To further strengthen the effectiveness of AOAs in helping DOD establish sound business cases for major weapon programs, the Secretary of Defense should ensure that AOAs are completed and approved before program requirements--key performance parameters and attributes--are finalized and approved.
Closed - Implemented
In providing comments on this report, the agency concurred with this recommendation. DOD revised its acquisition policy for weapon system programs in December 2008. One key element of the revised policy is that an AOA is required to be completed before the initiation of weapon system development. In addition, DOD is required by legislation to certify to Congress, among other things, that an AOA was completed before program initiation. GAO has tracked a number of future major defense acquisition programs as part of its annual assessment of selected weapon system programs (GAO-13-294SP) to gain insights into the implementation of recent acquisition reform initiatives. GAO has found that many of these future programs appear to have conducted AOAs prior to the start of system development and formal program initiation.

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