1). DOD Created Requirements to Document Long-Term Technical-Data Needs

DOD updated its acquisition and procurement policies, in a manner that  reflects a 2007 legislative provision and our 2006 recommendations, to  require that acquisition program managers document their long-term  technical-data needs. According to DOD officials, these policy updates do  not change the requirements program managers must follow that to decide  what technical data or technical-data rights to acquire for their systems. Together these policy changes  required that strategies and plans for major acquisition programs:  1.  assess the data required to design, manufacture, and sustain the  system as well as to support re-competition for production,  sustainment, or upgrade;  2.  address the merits of including a priced contract option for future  delivery of data not initially acquired;  3.  consider the contractor’s responsibility to verify any assertion of  restricted use and release of data; and  4.  address the potential for changes in the sustainment plan over the life  cycle of the weapon system or subsystem. These policies require programs to  document (1) an assessment of technical-data requirements, (2) the merits  of a priced-contract option, (3) the contractor’s responsibility to verify  assertions of limited data rights, and (4) the potential for changes in the  system’s sustainment plan. However, none of the programs addressed all four of the requirements in  its documentation, and two did not address any of the requirements. The strategy for the Navy Multiband Terminal stated that the program  manager had “assessed the long-term technical-data needs” of the  system and “established acquisition strategies that provide for  technical data” and “associated license rights needed to sustain [the  systems] over their life cycle and allow for competitive procurement of  future terminals.”
The three strategies that did not address the requirement did not  identify any required data. Each of the three strategies noted that  the program planned to include a clause in its contracts that identifies the  contractor’s responsibility to provide sufficient information to the  government’s contracting officers to enable them to evaluate the  contractor’s assertions. DOD Issued Guides to Improve Technical- Data Decision Making, but Technical-Data Policy Requirements Remain Unclear

		DOD and Military Departments Issued Guides to Improve Program Managers’ Technical-Data-Related Decisions

OSD and each military department have issued several guides for program  managers that elaborate on the requirements in DOD policy for conducting  and documenting assessments of long-term technical-data needs. Revised Technical-Data Policy Requirements Are Unclear

We found that the revisions to DOD’s acquisition and procurement  policies, which require acquisition program managers to document their  long-term technical-data needs, are unclear. 2). Ambiguity in the revised policies results in limits to department decision  makers’ ability to exercise effective internal control in their reviews of  acquisition documentation. OSD Requires a Business-Case Analysis for Technical-Data Decisions, but Has Not Issued Instructions on How to Conduct the Analysis

OSD recently added a requirement that program managers conduct a  business-case analysis as part of their assessment to determine the long- term technical-data needs for their systems; however, DOD has not issued  policy or other internal controls that describe how to conduct this  analysis. Previous GAO Review Found Business-Case Analyses Were Inconsistently Completed

We have previously reported that the military services inconsistently  completed similar business-case analyses when DOD had not issued  instructions on how to conduct them. DOD partially agreed with our  recommendation. In addition, because OSD has not issued policy instructing  program managers on how to report on the results of these analyses,  program managers may not provide the information that senior leaders in  DOD and the military departments need in order to decide whether to  approve the acquisition programs at major milestones in the acquisition  process. Technical-data decisions can be costly, with some prime  contractors quoting a price in excess of $1 billion for technical-data  packages. Recommendations for Executive Action

To establish effective internal controls over technical-data policies that  improve DOD’s ability to efficiently and cost-effectively acquire and  sustain weapon systems over their life cycles, we recommend that the  Secretary of Defense direct the Under Secretary of Defense for  Acquisition, Technology and Logistics to take the following two actions:  Issue updates to the acquisition and procurement policies that clarify  requirements for documenting long-term technical-data requirements in  program acquisition strategies and acquisition plans. To evaluate the extent to which selected defense acquisition programs  adhered to the updated requirements in DOD policy to document their  systems’ long-term technical-data needs, we selected a non-generalizable  sample of 12 acquisition programs from a population of about 50  programs.
Why GAO Did This Study

Some of the Department of Defense's (DOD) weapon systems remain in the inventory for decades. Therefore, decisions that program officials make during the acquisition process to acquire or not acquire rights to technical data, which may cost $1 billion, can have far-reaching implications for DOD's ability to sustain and competitively procure parts and services for those systems. DOD needs access to technical data to control costs, maintain flexibility in acquisition and sustainment, and maintain and operate systems. In response to a congressional request, GAO reviewed the extent to which: (1) DOD has updated its acquisition and procurement policies to reflect a 2007 law and 2006 GAO recommendations; (2) selected acquisition programs adhered to requirements to document technical-data needs; and (3) DOD took actions to improve technical-data decisions by program managers. GAO interviewed DOD officials, reviewed acquisition strategies and acquisition plans from 12 programs, and compared those documents to relevant DOD policies.

What GAO Found

DOD updated its acquisition and procurement policies to require that acquisition program managers document their long-term technical-data needs in a manner that reflects a 2007 law and GAO's 2006 recommendations. Together these policies require documentation of: (1) an assessment of technical-data requirements, (2) the merits of a "priced-contract option" that enables DOD to obtain additional technical data that it did not acquire in its initial contract, (3) the contractor's responsibility to verify its assertions of limits to DOD's ability to use the technical data, and (4) the potential for changes in the system's sustainment plan. According to DOD officials, these policy updates do not require changes to the way program managers assess technical-data needs. Sampled acquisition programs partially addressed the four updated technical-data-documentation requirements. Ten of the 12 programs GAO reviewed addressed at least 1 of the 4 requirements in their acquisition strategies and acquisition plans; however, none of the programs addressed all 4 of the requirements. Specifically, 9 of the 12 strategies documented an assessment of their technical-data requirements. For example, the strategy for a Navy communications system stated that the program planned to obtain technical data and associated rights to sustain the system over its life cycle and allow for competitive procurement of future systems. In contrast, 3 of the 12 strategies documented the contractor's responsibility to verify its assertions of limits to DOD's ability to use the technical data. Each of the three strategies noted that the program planned to include a clause in its contracts that identifies the contractor's responsibilities. DOD has issued guides--that are voluntary for the program managers to use--to improve technical-data decision-making. These guides may help program managers with decisions and documentation on technical data. However, DOD technical-data policies remain unclear. Effective internal controls help organizations implement their directives. GAO found that, because DOD has not issued clarifications to its policy, DOD policies that require documentation of long-term technical-data needs are unclear. As a result, acquisition strategies have not always documented required information on technical data--a point the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics recently emphasized. Because of the ambiguity in the policies, DOD's ability to implement effective internal control over those policies is limited. Moreover, DOD recently added a requirement that program managers conduct a business-case analysis for systems' long-term technical-data needs. However, DOD has not issued policy or other internal controls that describe how to conduct this analysis. GAO has previously reported that the military services inconsistently completed similar business-case analyses because DOD had not issued instructions on how to conduct them. Without instructions that describe how to conduct the business-case analysis, senior acquisition decision makers may not receive the information they need to decide whether to approve programs at major milestones in the acquisition process.

What GAO Recommends

GAO recommends that DOD (1) update policies to clarify its technical-data documentation requirements and (2) instruct program managers on the elements to include and the information to report for technical-data business-case analyses. DOD concurred with GAO's recommendations.