DOD Has Implemented Most of the Fundamental Reform Act Provisions and Is Strengthening Acquisition Activities

DOD has implemented most of the fundamental Reform Act provisions as  required and is taking additional steps to strengthen acquisition reviews,  policies, and capabilities. DOD Is Continuing to Implement Reform Act Provisions

The offices established as a result of the Reform Act—SE, DT&E, CAPE,  and PARCA—are continuing to make progress in implementing four  fundamental Reform Act provisions aimed at strengthening acquisition  outcomes and oversight of weapon acquisition programs. The team, which included an  SE official, raised concerns about the program’s high number of  mandatory requirements and the risks associated with the 7-year  schedule. To mitigate program risks, the Army reduced the number of  performance requirements by about 25 percent and prioritized the  others, giving competing contractors flexibility in addressing some  performance requirements. Program Cost and Schedule Estimates Are Becoming More Realistic

By establishing a new cost assessment and program evaluation office  and requiring this office to scrutinize program cost and schedule  estimates beginning at Milestone A, CAPE officials believe that the  Reform Act has helped infuse more realism in cost estimates and  promote earlier discussions about affordability. Joint Light Tactical Vehicle: The DT&E office helped this program  develop a more realistic reliability growth plan prior to Milestone B. Challenges Exist That Could Limit the Reform Act’s Ability to Influence Systemic Change

While DOD has taken steps to implement most of the fundamental  Reform Act provisions, some key efforts to date have been primarily  focused on DOD’s largest major defense acquisition programs. We grouped  these challenges into five general categories: (1) organizational capability  constraints; (2) need for additional guidance on cost estimating and  Reform Act implementation; (3) uncertainty about the sufficiency of  service level systems engineering and developmental testing resources;  (4) limited dissemination of lessons learned; and (5) cultural barriers. However, officials from the Ground Combat Vehicle program  were unclear as to when and what type of prototype to use. DOD faces several challenges that must be  addressed to get lasting change—organizational capability constraints,  the need for additional cost estimating and implementation guidance, the  possibility of insufficient systems engineering and developmental testing  resources, limited dissemination of lessons learned, and cultural barriers  between OSD and the services. However, they may require more resources, which have been difficult to  obtain. OSD will need  to continue monitoring the services’ efforts. Breaking down cultural resistance to change will take more cooperation  between the Under Secretary for Acquisition, Technology and Logistics  and other OSD offices, and service acquisition executives to address, as  well as continuity of leadership. Recommendations for Executive Action

We recommend that the Secretary of Defense take the following four  actions to enable systemic change across the entire portfolio of weapon  acquisition programs: direct the Director of Cost Assessment and Program Evaluation to  issue guidance for estimating weapon acquisition program costs at  Milestone A and operating and support costs throughout the  acquisition life cycle by the end of fiscal year 2013 and ensure that the  office prioritizes its resources accordingly to accomplish this task; designate responsibility for providing advice and guidance to program  offices on competitive prototyping and preliminary design reviews to  the appropriate organization within the Office of the Under Secretary  of Defense for Acquisition, Technology and Logistics and ensure that  the guidance is developed. The office(s) designated would be the  focal point for addressing program office issues related to the practical  implementation of these Reform Act provisions, such as the type of  competitive prototyping to use, the timing and benefits of holding  preliminary design reviews prior to milestone B, and if a preliminary  design review should be held after milestone B; direct the Deputy Assistant Secretaries of Defense for Systems  Engineering and Developmental Test and Evaluation to assess and  include in their annual report to the Congress beginning with the  report on fiscal year 2012 activities: the extent to which the office can perform their required activities  with allocated resources;  the impact budget cuts are having on the military services total  workforce (civilians, military, and contractors) and ability to meet  program office needs; and progress the services have made filling leadership positions, such  as chief engineers at the service level and technical leads for  systems engineering and developmental testing at the program  office level; direct the Director of Performance Assessments and Root Cause  Analyses to make lessons learned collected during its root cause  analysis evaluations available to the acquisition workforce and ensure  that the office prioritizes its resources accordingly. DOD partially concurred with our third recommendation. Appendix I: Objectives, Scope, and Methodology

This report examines DOD’s continued implementation of the Weapon  Systems Acquisition Reform Act of 2009 (Reform Act). Specifically, we  examined (1) DOD’s progress in implementing Reform Act provisions;   (2) the impact the Reform Act has had on specific acquisition programs;  and (3) challenges remaining in improving the weapons acquisition  process. To determine the impact the Reform Act has had on specific weapon  acquisition programs, we selected 11 weapon system programs to use as  case studies. Appendix III: Comments from the Department of Defense
Why GAO Did This Study

For the past 3 years, DOD has been implementing the Reform Act requirements which are aimed at helping weapon acquisition programs establish a solid foundation from the start. This helps to prevent cost growth, thus helping the Defense dollar go further. This is the third in a series of GAO reports on the Reform Act.
GAO was asked to determine (1) DOD's progress in implementing Reform Act provisions; (2) the impact the Reform Act has had on specific acquisition programs; and (3) challenges remaining. To do this, GAO analyzed documents and interviewed officials from the four OSD offices created as a result of the Reform Act, other DOD offices, the military services, and 11 weapon acquisition programs we chose as case studies. Case study programs were selected based on their development status and interaction with the four OSD offices. Results cannot be generalized to all DOD weapon acquisition programs.

What GAO Found

The Department of Defense (DOD) has taken steps to implement fundamental Weapon Systems Acquisition Reform Act of 2009 (Reform Act) provisions, including those for approving acquisition strategies and better monitoring weapon acquisition programs. DOD is also continuing to take additional steps to strengthen policies and capabilities. Some provisions, such as issuing guidance for estimating operating and support costs, are being implemented.
GAO's analysis of 11 weapon acquisition programs showed the Reform Act has reinforced early attention to requirements, cost and schedule estimates, testing, and reliability. For example, prior to starting development, an independent review team raised concerns about the Ground Combat Vehicle program's many requirements and the risks associated with its 7-year schedule. Subsequently, the Army reduced the number of requirements by about 25 percent and prioritized them, giving contractors more flexibility in designing solutions. In addition, the developmental test and evaluation office--resulting from the Reform Act--used test results to help the Joint Light Tactical Vehicle program develop a more realistic reliability goal and a better approach to reach it.
While DOD has taken steps to implement most of the fundamental Reform Act provisions, some key efforts to date have been primarily focused on DOD's largest weapon acquisition programs. DOD faces five challenges--organizational capability constraints, the need for additional guidance on cost estimating and Reform Act implementation, the uncertainty about the sufficiency of systems engineering and developmental testing resources, limited dissemination of lessons learned, and cultural barriers between the Office of the Secretary of Defense (OSD) and the military services--that limit its ability to broaden the Reform Act's influence to more programs. Service officials believe additional guidance is needed to improve their cost estimates and other implementation efforts. They also believe that lessons learned from programs that experience significant cost and schedule increases should be shared more broadly within the acquisition community. These challenges seem straightforward to address, but they may require more resources, which have been difficult to obtain. Ensuring the services have key leaders and staff dedicated to systems engineering and developmental testing activities, such as chief engineers at the service level and technical leads on programs, as well as breaking down cultural barriers are more difficult to address. They will require continued monitoring and attention by the Under Secretary for Acquisition, Technology and Logistics, service acquisition executives, and offices established as a result of the Reform Act to address.

What GAO Recommends

GAO recommends DOD develop additional cost estimating and Reform Act implementation guidance; make lessons learned available to the acquisition community; and assess the adequacy of the military services' systems engineering and developmental testing workforce. DOD generally concurred with the recommendations. GAO clarified one recommendation to make it clear that DOD needs to designate an office(s) within the Acquisition, Technology and Logistics organization to provide practical Reform Act implementation guidance to program offices.