Army Futures Command is in the process of establishing its policies,  processes, and functions as well as its relationships with other Army  organizations. It plans to reach full capability by July 2019. The Army has  already identified near-term priorities and realigned over $1 billion in  science and technology funding for long-term modernization. New Organizations Have Generally Applied Leading Practices but the Army Futures Command Has Taken Limited Steps to Fully Apply These Practices

The Army has generally applied leading practices for technology  development and establishing effective cross-functional teams, and has  begun to apply leading practices for mergers and organizational  transformations for the Army Futures Command. However, we are concerned that the Army has plans to mature  technology to a level lower than the threshold recommended by leading  practices before beginning system development. The Army’s choice to start a formal acquisition program at lower levels of  technology maturity raises concerns that are consistent with those we  have raised in the past. For example, almost two decades ago in a  1999 report, we recommended demonstrating technologies in an  operational environment prior to system development and DOD  concurred with that recommendation. Such an approach would be consistent with  leading practices that recommend maturing technologies to a higher  level. However, the command has not yet formalized and  institutionalized its authorities, responsibilities, policies and procedures  nor taken steps to apply these or other leading practices. The Army has taken  positive steps to improve its current modernization efforts and has already  seen some initial successes. Further, the Army lacks a formal plan  to identify and incorporate lessons learned from the cross-functional  teams as Army Futures Command becomes fully operational and could  thereby miss an opportunity to leverage the experience of these teams on  past practices that worked well and those that did not. Appendix I: Objectives, Scope and Methodology

Section 1061 of the National Defense Authorization Act for Fiscal Year  2018 included a provision for GAO to report on the Army’s modernization  strategy. This report assesses (1) the status of the Army’s efforts to  establish new acquisition organizations while balancing near- and long- term modernization; and (2) the extent to which the Army has applied  leading practices to do so. To assess the balance of modernization priorities between near-term and  long-term, we reviewed documentation related to those lines of effort  including:  the 2018 Army Modernization Strategy report—which describes the  rationale behind modernization and the efforts for each priority,  the Strategic Portfolio Analysis Review for Fiscal Year 2020—which is  a part of the budget process to determine priorities, align science and  technology efforts to capabilities, and plan milestones,  the Deputy Under Secretary of the Army and Research and  Development Command Science and Technology Review of October  2017—which describes the science and technology priorities for each  cross-functional team and realigns funding through identifying  opportunities to divest, and
Strategic Capability Roadmaps—which provide a timeline for the  development and fielding of the capabilities being developed by some  of the cross-functional teams. To address the extent to which the Army’s cross-functional team pilots  applied leading practices for technology development, we
Reviewed cross-functional team charters, the 2018 Army  Modernization Strategy report, Fiscal Years 2019 and 2020 Strategic  Portfolio Analysis, the Army’s Fiscal Year 2019 President’s Budget,  and the Army’s October 2017 Science and Technology Review to  identify actions related to the development of near- and long-term  capabilities for the Army’s six modernization priorities that align with  the eight cross-functional teams. To address the extent to which Army Futures Command applied leading  practices for mergers and organizational transformations and  incorporated lessons learned from the cross-functional team pilots, we
Reviewed Headquarters Department of the Army Executive Order  176-18, which established the Army Futures Command, and Army  Directive 2017-33, which established the Modernization Task Force.
Why GAO Did This Study

In order for the Army to maintain its technological edge over potential adversaries, it plans to invest in near- and long-term modernization efforts. However, the Army has struggled with modernization initiatives in the past. For example, the Future Combat System was canceled after a cost of $21 billion and delivery of few new capabilities.
The National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to report on the Army's modernization strategy. This report assesses (1) the status of the Army's near- and long-term modernization efforts; and (2) the extent to which the Army has applied leading practices to these efforts. GAO reviewed Army directives, procedures, and policies; and compared the Army's efforts with leading practices for requirements and technology development, effective cross-functional teams, and mergers and organizational transformations.

What GAO Found

Since 2017, when the Army announced its initiative to update its forces and equipment with improved capabilities—known as modernization—it has
established and assigned eight cross-functional teams to pilot how to address these needs;
established the Army Futures Command as the focal point for modernization efforts, with a four-star general to oversee it; and
realigned over $1 billion in science and technology funding to support modernization efforts within the $7.5 billion expected to be spent over the next 5 years.
To date, the Army has generally applied leading practices identified by GAO to its modernization efforts. For example, the cross-functional team pilots generally applied leading practices for determining requirements and technology development and for establishing effective teams. Similarly, as the Army began the process of establishing the Army Futures Command, it has started to apply the leading practices for mergers and organizational transformations by establishing a clearly defined mission and providing a clear consistent rationale for the command. However, GAO identified other areas where the Army has not fully applied leading practices to its modernization efforts including the following:
Under the modernization effort, the Army plans to begin weapon systems development at a lower level of maturity than what is recommended by leading practices. GAO has raised concerns about this type of practice for almost two decades for other Army acquisitions, because proceeding into weapon systems development at earlier stages of technology maturity raises the risk that the resulting systems could experience cost increases, delivery delays, or failure to deliver desired capabilities. Taking this approach for acquisitions under the modernization effort raises similar concerns for the Army's six prioritized capability needs.
The Army has not developed a plan for capturing the lessons learned from the cross-functional team pilots, and therefore may miss an opportunity to leverage the experience of these teams in applying leading practices.

What GAO Recommends

GAO is making four recommendations, including that the Army follow leading practices for maturing technologies to a higher level than currently planned and develop a plan to capture lessons learned from the cross-functional teams. DOD concurred with all the recommendations.