US Government Accountability Office GAO

Programs we surveyed spent on average over 2 years completing the steps necessary to document up to 49 information requirements for their most recent acquisition milestone. This includes the time for the program office to develop the documentation and for various stakeholders to review and approve the documentation. These 49 information requirements also took, in total, on average 5,600 staff days for programs to document. However, on average, almost half of these requirements, 24 of the 49, were not highly valued by the acquisition officials we surveyed. Four major defense acquisition programs we examined illustrate the challenges in completing the milestone decision process.

The Director, Cost Assessment and Program Evaluation office is responsible for developing independent cost estimates for major defense acquisition programs. Programs fulfill these requirements in fewer than 49 documents, as some documents contain information to meet multiple requirements and some requirements may not apply to all programs. For example, space programs have to complete an Orbital Debris Mitigation Risk Report that is not required for non-space programs.

In 2013, the Under Secretary for Acquisition, Technology and Logistics asked the service acquisition executives to identify programs where the milestone decision authority could be potentially delegated from the Office of the Secretary of Defense to a lower level. Delegation to the lower level also reduces the number of levels of review and reviewers. The services identified 18 programs: 7 programs from the Air Force; 5 programs from the Navy; and 6 programs from the Army. In September 2014 the Under Secretary of Defense for Acquisition, Technology and Logistics delegated the authority to act as the milestone decision authority to the Secretary of the Air Force for 3 programs, the Secretary of the Navy for 1 program, and the Secretary of the Army for 1 program.

Information requirements considered high value by stakeholders include a program’s acquisition strategy, sustainment plan, and information related to planned technologies, cost, and testing. Several senior acquisition officials we met with considered many of these requirements as critical to the program’s business case

Information requirements valued the least (less than moderate value), on the other hand, include such documentation as the benefit analysis and determination for potentially bundling contract requirements; the Clinger-Cohen certification for information technology investments; the corrosion prevention control plan to assess the impact of corrosion on cost, availability, and safety of equipment; the item unique identification implementation plan for managing assets; and the replaced system sustainment plan for documenting the estimated cost to sustain a system until the new program is fielded. One service acquisition executive, for example, stated that program managers should not have to develop an item unique identification implementation plan because government contractors put the unique identification numbers on parts. Another senior official stated that the Clinger-Cohen Act requirements are geared towards the acquisition environment of the 1990s. This official believes the requirements should be updated to reflect the current environment for procuring information systems.

The program managers considered the value added to 10 percent of the documentation to be high. However, for the remaining 90 percent of the documents, the officials believed the reviews did not add high value—61 percent were moderate and 29 percent less than moderate. Figure 7 provides a summary of the program offices’ assessment.

The companies prepared documents similar to those of DOD such as development, test, engineering, and manufacturing plans. Officials at Motorola Solutions, Cummins, and Boeing stated that most documents are prepared and approved by functional managers assigned to the program office core team. Programs prepare an integrated document that summarizes key program information for the decision makers to review and approve.

Honda has established an environment that encourages frequent, direct interaction between program participants.

The need to document information about essential aspects of a program and for an appropriate level of review and approval is legitimate. However, over time, the outcomes of weapon system programs have proven resistant to the oversight process. At the same time, the process has become bloated, time-consuming, and cumbersome to complete. The challenge is to find the right balance between having an effective oversight process and the competing demands such a process places on program management. Meeting the challenge will depend on DOD’s ability to identify the key problem areas in weapon system acquisitions and the associated root causes that exist today and whether information requirements and reviews are linked to addressing these problems. As we have noted in prior work, the most important information requirements—those that enable a program to establish a sound business case—include well-defined requirements, reasonable life-cycle cost estimates, and a knowledge-based acquisition plan. If information requirements and reviews are not clearly linked with the elements of a sound business case and/or the key issues facing acquisitions today, then they can be streamlined or even eliminated. If they are linked, but are not working well, then they warrant re-thinking. While the data support that change is needed, change does not mean weakening oversight, as unsatisfactory outcomes from acquisition programs may persist. Rather, the goal of change is to perform effective oversight more efficiently, and to recognize problems or incentives that require remedies and not just more information requirements.

Commercial managers are incentivized to raise issues early and seek help if needed. They know if the program fails, everyone involved fails because market opportunity is missed and business revenues will be impacted. Commercial product development cycle times are relatively short (less than 5 years), making it easier to minimize management turnover and to maintain accountability. DOD’s acquisitions occur in a different environment in which cycle times are long (10 to 15 years), management turnover is frequent, accountability is elusive, and cost and schedules are not constrained by market forces. Seen in this light, DOD must have an oversight process that substitutes discipline for commercial market incentives. Several industry officials stated that companies often add oversight levels or reviews as a first reaction after failures or problems occur. However, the officials further stated that this does not solve the root problems and often it makes the process less efficient. Two companies we visited highlighted an inspection-intensive oversight process they implemented as a deliberate attempt to address problems that had occurred but found that it led to an adversarial environment and an inefficient process. Both companies eventually abandoned this approach and replaced it with an approach where program officials are incentivized to reach out to recognized experts within the company for assistance when needed.

A few program officials told us that trying to tailor by obtaining waivers for milestone requirements involves significant time and effort, and that it is often easier to simply complete the requirements rather than try to obtain waivers. While we did not examine the overall use of tailoring by DOD programs during our review, we examined two programs that attempted tailored documentation and reviews, but in the end, neither was able to make significant changes. Specifically, the F-22 Increment 3.2B program told us they requested waivers for 17 requirements, but ultimately only 2 were waived. In addition, the Long Range Strike–Bomber, in direction provided by the former Secretary of Defense, was to be managed with a streamlined approach. The program was initially allowed the flexibility to tailor many of the needed documents and reviews. However, over time, these flexibilities have been scaled back.