In December 2005, DOD issued a report on the study of its mobility  capabilities. The MCS determined that the projected  mobility capabilities are adequate to achieve U.S. objectives with an  acceptable level of risk during the period from fiscal years 2007 through  2013; that is, the current U.S. inventory of aircraft, ships, prepositioned  assets, and other capabilities are sufficient, in conjunction with host  nation support. In September 2006, we reported that DOD’s  conclusions were based, in some instances, on incomplete data and  inadequate modeling and metrics that did not fully measure stress on the  transportation system, and that, in some cases, MCS results were  incomplete, unclear, or contingent on further study, making it difficult to  identify findings and evaluate evidence. It is not clear how the analyses  done for the study supported DOD’s conclusions, and we suggested that  decision makers exercise caution in using the results of this study to make  programmatic decisions. Relevant generally  accepted research standards require that conclusions be supported by  analyses. The MCS report also made recommendations to conduct further studies,  develop plans and strategies, and improve data collection and mobility  models. Contrary to  mandatory Air Force implementing guidance, however, the Air Force  proposal for a replacement refueling aircraft, the KC-X tanker, included a  passenger and cargo capability without analyses identifying an associated  gap, shortfall, or redundant capability. Without sound analyses, the Air Force may be at risk of  spending several billion dollars unnecessarily for a capability that may not  be needed to meet a gap or shortfall. Considering the requirement for analyses  that separate needs from wants and the risk of unnecessary expenditures  in this multi-year multi-billion dollar acquisition program, we continue to  believe that our recommendation has merit and that the analyses required  by mandatory guidance are necessary to inform the decision that begins  the acquisition. We  recommended that the Secretary of Defense require that future studies and  analyses of replacement airlift and tanker aircraft consider accomplishing  the missions with a dual-use aircraft. Success for acquisitions requires sound decisions  to ensure that program investments are getting promised returns—on time  deliveries to the field, predictable costs, and sufficient capability. Outcomes of Certain Airlift Programs

We assessed four airlift programs as part of our annual assessment of  DOD’s major acquisition programs and each has experienced cost growth  and schedule delays. DOD estimates it  will need over $12 billion between 2007 and 2013 to develop, modify, or  procure these aircraft. The Air Force’s C-5 Reliability Enhancement and Reengining Program  (RERP) is intended to enhance the reliability, maintainability, and  availability of the C-5 through engine replacements and modifications to  subsystems such as the electrical and fuel subsystems. The airlift systems we  reviewed were not immune to this condition and have experienced  unnecessary cost growth and schedule delays as a result. Some of the  causes to problems encountered include    Failing to fully analyze the resources needed to integrate proven  commercial technologies and subsystems into a military system before  initiating development. Not achieving a stable design before beginning system demonstration  phase resulting in costly design changes and rework. Failing to demonstrate the aircraft would work as required before making  large production investments. Even today, 4 years after production was initiated,  performance concerns remain with the C-5 AMP. Program  officials plan to address the deficiencies as part of a C-130J modernization  effort. Success over the long  term will depend on following knowledge-based acquisition practices as  well as DOD leadership’s commitment to improving outcomes. GAO-06-391. Defense Acquisitions: DOD Faces Challenges in Implementing Best  Practices.
Why GAO Did This Study

The Department of Defense (DOD) has continuing efforts to modernize its airlift and tanker fleets by investing billions of dollars to modify legacy airlift systems, such as the C-5 and C-130, and procure new aircraft, such as a tanker replacement. Acquisition has been on GAO's list as a high risk area since 1990. GAO has reported that elements contributing to a sound business case for an acquisition are missing or incomplete as DOD and the services attempt to acquire new capabilities. Those elements include firm requirements, mature technologies, a knowledge-based acquisition strategy, a realistic cost estimate, and sufficient funding. Acquisition problems that include failure to limit cost growth, schedule delays, and quantity reductions persist, but fiscal realities will not allow budgets to accommodate these problems any longer. Today's testimony addresses (1) the analyses supporting the Department of Defense's (DOD) mobility capabilities and requirements and (2) actions that are needed to improve the outcomes of weapon system acquisitions. For this testimony, GAO drew from issued reports, containing statements of the scope and methodology used, as well as recently completed work not yet reported. GAO's work was performed in accordance with generally accepted government auditing standards.

What GAO Found

Past GAO reports, including two recently issued, raise concerns about the quality of analyses underpinning the programmatic decision-making surrounding DOD's airlift requirements. In September 2006, GAO issued our report (GAO-06-938) on DOD's Mobility Capabilities Study (MCS). The MCS determined that the projected mobility capabilities are adequate to achieve U.S. objectives with an acceptable level of risk during the period from fiscal years 2007 through 2013; that is, the current U.S. inventory of aircraft, ships, prepositioned assets, and other capabilities are sufficient, in conjunction with host nation support. GAO's report stated that conclusions of the MCS were based on incomplete data and inadequate modeling and metrics that did not fully measure stress on the transportation system. GAO further observed that the MCS results were incomplete, unclear, or contingent on further study, making it difficult to identify findings and evaluate evidence. It was not clear how the analyses done for the study support DOD's conclusions and GAO suggested that decision makers exercise caution in using the results of this study to make programmatic decisions. In March 2007, GAO reported (GAO-07-367R) on the lack of mandatory analyses to support a passenger and cargo capability for the new replacement refueling aircraft, the KC-X tanker. Contrary to mandatory Air Force implementing guidance, the Air Force proposed a capability without analyses identifying an associated gap, shortfall, or redundancy. GAO believes that without sound analyses, the Air Force may be at risk of spending several billion dollars unnecessarily for a capability that may not be needed to meet a gap or shortfall and made recommendations to the Secretary of Defense that included conducting the requiring analyses necessary to establish capabilities. Successful acquisition programs make sound decisions based on critical product knowledge to ensure that program investments are getting promised returns--on time delivery, within estimated costs, and with expected capabilities. However, GAO has shown in its work that DOD practices diverge from best development practices intended to produce good outcomes and, as a result, have experienced significant cost growth and schedule delays. DOD expects to invest over $12 billion in new and improved capabilities in four airlift programs discussed in this testimony between now and 2013--C-5 Avionics Modernization Program, C-5 Reliability Enhancement and Reengining Program, C-130 Avionics Modernization Program, and the C-130J acquisition program. GAO found that all four programs failed at basic systems engineering practices to 1) fully analyze the resources needed to integrate proven commercial technologies, 2) achieve a stable design before beginning system demonstration, and 3) demonstrate the aircraft would work as required before making large production investments.