DOD Weapon Systems Acquisition
View the 2019 Report
In April 2018, we reported that the DOD expects to invest $1.66 trillion in total to develop and procure its portfolio of 86 major defense acquisition programs. Congress and DOD have long sought to improve how major weapon systems are acquired, yet many DOD programs continue to fall short of cost, schedule, and performance goals. Consequently, DOD often pays more than anticipated, buys less than expected, and, in some cases, delivers fewer capabilities to the warfighter. We added this area to our High-Risk List in 1990.
Given substantial defense modernization and recapitalization needs, DOD must get better returns on its weapon system investments and find ways to deliver capabilities to the warfighter on time and within budget.
Since our 2017 High-Risk Report, our assessment of DOD’s performance against our five criteria remains unchanged.
Leadership commitment: met. DOD has implemented reforms in its acquisition policies and undertaken initiatives aimed at improving program outcomes. DOD’s reforms included a 2015 update of its acquisition instruction and a series of Better Buying Power initiatives implemented between 2010 and 2015. The Office of the Under Secretary of Defense for Acquisition, Technology and Logistics led these efforts; however, in response to congressional direction, DOD dissolved this office in February 2018. Since then, DOD has developed a new organizational structure that refocuses the Office of the Secretary of Defense’s principal role from program oversight to one intended to ensure that major DOD investments produce integrated, technically superior capability that consistently outpaces global threats.
Within this structure, the new Under Secretary of Defense for Acquisition and Sustainment has retained milestone decision authority over 11 major defense acquisition programs, including the F-35 Lightning II Joint Strike Fighter—DOD’s most expensive program. Service acquisition executives in each of the three military departments are authorized to make milestone decisions for all other current, major defense acquisition programs. Although DOD’s executives share a collective commitment to improve program performance, specifics about the new organizational structure have not been fully determined.
Capacity: partially met. In February 2018, we reported that the military services aligned extensively with 4 of the 10 key practices leading organizations use to select, train, mentor, and retain program managers. We recommended that the military services improve practices that do not align extensively with leading practices, incorporate lessons learned from the Army’s experience with the Civilian Acquisition Workforce Personnel Demonstration Project, and make greater use of existing financial awards for good performance. DOD officials agreed with the recommendations and have identified its plans to implement them.
Action plan: partially met. DOD reported to Congress in August 2017 that the department was at risk of not being able to acquire and sustain major weapon systems at sufficient levels due to increasing costs. To counter this risk, DOD’s new position of Under Secretary of Defense for Acquisition and Sustainment is to focus on major defense acquisition program performance and on reducing costs to free up resources for further investment. Although DOD has not yet identified a plan with specific goals or performance measures, its Better Buying Power initiatives address several steps DOD can take across its acquisition portfolio to achieve better results. These initiatives include measures such as setting and enforcing affordability constraints, instituting a long-term investment plan for portfolios of weapon systems, implementing “should cost” management to control contract costs, and eliminating redundancies within portfolios. The initiatives also emphasize the need to adequately grow and train the acquisition workforce.
Monitoring: partially met. In December 2008, GAO, DOD, and the Office of Management and Budget agreed on a set of metrics to measure DOD program cost growth over time. We have reported on those metrics since 2011; however, DOD no longer agrees with their use. In July 2018, GAO and DOD initiated discussions, which will continue in 2019, to develop a new set of metrics. DOD is also generally required under statute to submit selected acquisition reports to Congress that detail the cost, schedule, and performance status of individual major defense acquisition programs. DOD generally prepares these reports annually in conjunction with submission of the President’s Budget. Further, from 2013 to 2016, DOD assessed and reported publicly on performance across its full portfolio of programs. DOD has not issued the portfolio reports since 2016, relying instead on its selected acquisition reports to provide information to Congress.
Demonstrated progress: partially met. In fiscal year 2017, we analyzed the cost growth of weapon systems in development since 2009, when DOD began implementing major acquisition reforms. We compared that to cost growth over the 10-years prior to acquisition reform and reported a 75 percent reduction in cost growth that totaled $36 billion. Similarly, we reported in April 2018 that DOD programs initiated since 2010 had better cost performance between 2016 and 2017 than the rest of the portfolio—an estimated $5.6 billion decrease versus a $60.3 billion increase. At the same time, we reported that most DOD programs continue to not fully implement knowledge-based acquisition practices, which increases the risk of undesirable cost and schedule outcomes.
Over the years since we added this area to our High-Risk List, we have made numerous recommendations related to this high-risk issue. As of November 2018, 88 recommendations remain open, 43 of which we made since the last high-risk update in February 2017. To improve its performance in the above areas, DOD should implement our recommendations on (1) knowledge-based acquisition practices, (2) defined cost and schedule goals, and (3) more extensive alignment with commercial practices on hiring and retaining quality program managers. Further, DOD should address our related open priority recommendations, which call for DOD to:
- Prepare cost and funding summaries for each individual ship in the Ford-class aircraft carrier program (CVN 78) within Selected Acquisition Reports.
- Track the costs to correct defects after ship delivery to help determine cases in which warranties could contribute to improvements in the cost and quality of Navy ships.
- Revise the Navy’s ship delivery policy to clarify what types of deficiencies need to be corrected, what capabilities must be achieved, and when. The Navy should also clearly define what constitutes a complete ship and when that status should be achieved.
- Require the Missile Defense Agency to make its cost estimates more comprehensive, to stabilize its element and program baselines by better understanding requirements before setting a baseline, and—once a baseline is set—to track revisions to enable meaningful comparisons over time.
- Establish a pilot program involving several current or new major defense acquisition programs to test, on a broad scale, different streamlined approaches for providing decision makers with only the most essential information needed to make decisions at each milestone throughout the acquisition process.
- Implement leading practices for managing science and technology programs by defining the appropriate mix of innovative, breakthrough technologies and more moderate, incremental technology enhancements; assessing whether that mix is achieved; using existing flexibilities to more quickly initiate or discontinue projects in response to the rapid pace of innovation; incorporating acquisition stakeholders into technology development programs; and promoting advanced prototyping of breakthrough technologies.
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- Shelby Oakley
- Director, Contracting and National Security Acquisitions
- oakleys@gao.gov
- (202) 512-4841
