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Project on Government Oversight

GAO: Bad Problems Worsen with Pentagon Programs

Related Content: Wasteful Defense Spending
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March 31, 2008

From POGO's blog:

Today, Congress' investigative arm, the Government Accountability Office, released its annual assessment of major defense programs (pdf) -- and the findings, though dismal, are largely unsurprising.  What is surprising is that somehow many of the already bad problems are even worse than in previous years.

But first, why should the public, Congress and media pay attention?  The GAO's report very early on makes the answer clear.

DOD's investment in weapon systems represents one of the largest discretionary items in the budget. While overall discretionary funding is declining, DOD’s budget continues to demand a larger portion of what is available, thereby leaving a smaller percentage for other activities. DOD’s investment in weapon acquisition programs is now at its highest level in two decades. The department expects to invest about $900 billion (fiscal year 2008 dollars) over the next 5 years on development and procurement with more than $335 billion, or 37 percent, going specifically for new major weapon systems. Every dollar spent inefficiently in developing and procuring weapon systems is less money available for many other internal and external budget priorities—such as the global war on terror and growing entitlement programs. These inefficiencies also often result in the delivery of less capability than initially planned, either in the form of fewer quantities or delayed delivery to the warfighter.

Unfortunately, our review this year indicates that cost and schedule outcomes for major weapon programs are not improving over the 6 years we have been issuing this report. Although well-conceived acquisition policy changes occurred in 2003 that reflect many best practices we have reported on in the past, these significant policy changes have not yet translated into best practices on individual programs. Flagship acquisitions, as well as many other top priorities in each of the services, continue to cost significantly more, take longer to produce, and deliver less than was promised. [emphasis added]

Here are some of the tables and charts which show some of the worsening trends:

GAO 1

 

The table above shows that the major defense programs the GAO has reviewed are, on average, growing in total acquisition cost and increasingly facing longer schedule delays.

GAO 3

 

The chart above shows that defense programs still do not produce stable engineering plans at early enough stages before serious money is sunk into the programs, a milestone many would call a "point of no return," AKA the production decision (in many ways, the de facto point of no return exists from the beginning, thus the Ernie Fitzgerald quote:  "There are only two phases to these programs...Too early to tell. And too late to stop.").  Serious engineering drawing are supposed to be produced at very early stages of a program (when development starts), not when production is about to start.  According to the GAO:

Over half of the programs in our assessment did not even have mature technologies at the design review (knowledge that actually should have been achieved before system development start). Also less than one-quarter of the programs that provided data on drawings released at the design review reached the best practices standard of 90 percent, which is a smaller share than programs in our 2005 assessment (see fig. 5). Knowing that a product’s design is stable before system demonstration reduces the risk of costly design changes occurring during the manufacturing of production representative prototypes—when investments in acquisitions become more significant. Even by the beginning of production, more than a third of the programs that had entered this phase still had not released 90 percent of their engineering drawings.

GAO detailed the cost consequences of not having a stable design early on in some major defense programs' development contracts.

GAO 4

 

In addition to finding that defense weapons programs are not run well and tens of billions of our dollars are inefficiently spent, the GAO took a look at the workforce of 52 of the Defense Department's program offices for these weapon programs.  Turns out contractors now make up about half the Pentagon's workforce at these 52 offices. 

GAO 2

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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