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Analysis

Axing Pentagon Cost Reports Threatens Acquisition Oversight

(Illustration: Renzo Velez / POGO)

Understanding the true cost of the weapons the military buys is a difficult proposition: Pentagon bean-counters use various accounting tricks to present as rosy a picture as possible to keep the money flowing. Now, understanding the costs will be even more difficult due to a single sentence buried deep within the National Defense Authorization Act for fiscal year 2020. That sentence eliminated the selected acquisition reports, one of the best tools available to see the overall cost of a weapons program.

Selected acquisition reports provide information about a weapon’s total program cost, development and production schedule, performance, and cost breaches. The reports are written by the program manager and submitted to Congress quarterly, with an annual report at the end of each calendar year. Federal law mandates selected acquisition reports for all Pentagon programs with a cost exceeding $300 million (in 1990 dollars).

Without the selected acquisition reports, members of Congress and their staffs will have to wade through mountains of budget documentation and calculate thousands of figures to understand exactly where taxpayer dollars are being spent. Because there are so many ways to calculate the data and because the absence of the reports provides an opportunity for program boosters to undercount costs, the totals that different people come up with could vary widely and differ on a scale of magnitude from the real costs. The selected acquisition reports provide a common picture for everyone, allowing effective oversight of the weapons buying process. The reports also provide a convenient way for the public to check actual data against the deceptive cost figures that appear in defense industry press releases.

Selected acquisition reports showed how the defense industry and the Air Force misled the public when they claimed an F-22 only cost $143 million each when the real figure was more than twice that at $350 million per copy. The reports are also useful to see how individual components in a program can drastically increase costs. The Navy’s failed scheme to reconfigure its littoral combat ships for specific missions is a prime example, as the selected acquisition reports for that program showed that the individual mission modules added $7.6 billion to the total cost.

Then-House Armed Services Committee Chair Mac Thornberry made reducing the number of reports the Pentagon had to submit to Congress a cornerstone of his efforts to streamline the weapons procurement process during his tenure from 2015 to 2019. A panel of defense industry representatives charged by Congress to draft acquisition reform proposals recommended adding automatic sunset provisions for congressional reporting requirements.

The provision terminating the report requirement was slipped into section 830 of the fiscal year 2020 National Defense Authorization Act virtually unnoticed. We’re already seeing reduced reporting. Inside Defense noted last month that the Department of Defense won’t be providing the reports at all this year.

This is not the first time Pentagon leaders have attempted to keep weapon costs hidden from the public by doing away with the selected acquisition reports. An effort led in 2004 by then-Defense Secretary Donald Rumsfeld would have ended the requirement, until public pressure led by POGO put a stop to it.

There is fortunately an effort underway to restore the selected acquisition reports. Representative Sara Jacobs (D-CA) added an amendment to the fiscal year 2022 National Defense Authorization Act to reinstitute the reporting process. The amendment was accepted by the House Armed Services Committee and will now be voted on by the full House as part of the final authorization bill. All members should support this effort so they and the American people can gain a clearer picture of how our money is being spent and hold specific programs accountable when they go over budget or fail to meet their intended purpose.