DoD weapons programs show real need for improvement
With Congress still debating the nearly $750 billion Defense appropriations bill for the next fiscal year, it's worth remembering a Government Accountability Office review of DoD spending on major weapons programs. It turns out, Uncle Sam has been very lax in how it spends taxpayers money -- even after going through a series of fixes a few years ago to make sure those resources were used more effectively:
In the past few years, we found that newer programs seemed to be doing a better job staying within budget estimates than programs had in the past. However, in this year’s assessment, we found that this trend was slipping for DOD’s major programs.
Most troubling is that DOD’s newer programs—those started after major acquisition reforms were adopted in 2010 to limit cost increases—now show overall recent cost growth.
The trouble doesn't end there:
One of the primary drivers of the overall cost increase in the portfolio is that programs in this year’s portfolio are about 4 months older than last year and nearly 3 years older than in 2012. This is partly because DOD increased quantities of older systems and introduced new capabilities and upgrades by adding on to existing programs (such as with the F-35 Lightning II Joint Strike Fighter and the Virginia Class Submarine)—making these programs longer and costlier on average—instead of starting new ones.
However, this approach runs counter to a best practice—new capabilities should be structured as separate acquisition programs in order to improve transparency and accountability.
Additionally, DOD’s contracts are often awarded without full and open competition. We found that DOD did not compete 67% of its major contracts. It also awarded 47% of its contracts to 5 corporations. A competitive environment saves money, which could mean the department is overpaying for goods and services.
DOD has room to reverse the negative cost trends through strong leadership and insistence that programs implement knowledge-based best practices. However, this need for effective leadership comes at a time when DOD is making widespread reforms to how it oversees acquisition programs.
At the direction of Congress, DOD has decentralized oversight of its programs in an effort to speed up its processes. Oversight is now primarily the responsibility of the Army, Navy, and Air Force, and it is therefore up to the military services to ensure that programs implement knowledge-based best practices