Figure 1.1 illustrates the DOD’s weapon system acquisition process. Also, approval of this phase will often involve a commitment to low-rate initial production (LRIP). Operational test and evaluation (OT&E) is a key internal control to ensure that decisionmakers have objective information available on a weapon system’s performance, to minimize risks of procuring costly and ineffective systems. Specifically, the Senators asked that we determine whether
LRIP policies were resulting in the production of systems with adequate performance capabilities and the legislation underlying the LRIP policies was adequate. As a result, major production commitments are often made during LRIP. Nevertheless, the existing LRIP legislation does not include any specific principles or guidelines on when and how programs should begin LRIP, on the type and amount of testing to be done before LRIP, on how much LRIP can or should be done, or under what circumstances LRIP should be curtailed or stopped. DOD is currently considering what, if any, actions will be taken in light of the DOD-IG’s recommendations. Decisionmakers need verifiable information on system design maturity and where corrective actions are needed before production start-up. In today’s national security environment, there should be very few cases in which an urgent need dictates that DOD start production without assurance that the system will work as intended. Recommendations

We recommend that the Secretary of Defense revise DOD’s acquisition policies in the following ways:
Require that, before entry into LRIP, programs (with the exception of ships, satellites, and those other programs that involve inherent fabrication complexity, small procurement quantities, high unit costs, and long unit production periods) plan, buy prototypes for, and conduct enough realistic testing for the service’s independent testing agency and/or DOT&E to be able to certify to the decision authority that (1) the system’s developmental testing is essentially complete and the basic results of that testing have been validated in an operational environment; (2) the system has clearly shown that it can meet the key parameters among its minimum acceptable performance requirements; (3) the system has clearly demonstrated the potential to fully meet all of its minimum acceptable requirements for performance and suitability without major or costly design changes; and (4) the system should be able to readily complete its remaining OT&E in time to support the planned full-rate production decision.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) use of low-rate initial production (LRIP) in its systems acquisition programs, focusing on whether: (1) DOD LRIP practices result in the production of adequate systems; and (2) the legislation underlying LRIP policies is adequate.

What GAO Found

GAO found that: (1) despite congressional emphasis on the need for operational test and evaluation (OT&E) prior to system production, legislation and DOD policies permit LRIP to start before any OT&E is conducted because there are no specific guidelines on the type and amount of testing required prior to LRIP; (2) the lack of guidelines has resulted in substantial inventories of unsatisfactory weapons that need costly modifications and some deployments of substandard systems to combat forces; (3) correction of system deficiencies in prematurely produced systems lengthens production schedules and increases resource consumption; (4) major production decisions are often made during LRIP; (5) LRIP severely limits Congress' and DOD decisionmakers' options for dealing with deficient systems; (6) DOD needs accurate, independent information on system performance and suitability to minimize the risks of procuring costly and ineffective systems; and (7) in light of the current national security environment, there should not be an urgent need to start LRIP before system capabilities are adequately tested.