GAO: Delays, costs still problems at DOD

With Congress and the Defense Department considering cuts to large military weapons acquisitions, the Government Accountability Office has weighed in with a recent report that cites continuing high development costs and delays in many of DOD’s programs, including major information technology and communications systems.

Research and development costs were 42 percent higher than originally estimated for the 2008 portfolio of 96 programs, and the average delay in delivering initial capabilities had increased to almost two years, GAO said in a report released March 30.

Ten programs make up more than half of DOD’s portfolio. Their total estimated development cost has grown by about a third compared with initial estimates — from about $134 billion to more than $177 billion, GAO said.

The agency also said DOD’s total program acquisition unit costs have grown significantly. The two largest programs — the Joint Strike Fighter and the Army’s Future Combat Systems (FCS) — represent significant future cost risks “and will dominate the portfolio for years.”

“Since these programs consume such a large portion of the funding that DOD spends on research and development and procurement, their performance also affects other major weapon acquisitions, smaller acquisition programs, and DOD’s ability to fund and acquire other supplies and equipment,” the GAO report states.

The FCS program, a linchpin of the military’s plans for network-centric warfare, has become a particular target for potential cuts. Its initial estimated cost of just under $90 billion has since ballooned to nearly $130 billion, a 45 percent increase, GAO said.

After almost six years of development, the Army has spent more than half of its planned development funds for FCS, and many of the 50 or so systems it must interoperate with are still being developed, the report states.

If those complementary systems cannot meet FCS requirements, the program might need to change its design or sacrifice capabilities. DOD has already instructed the Army to prepare an alternative acquisition strategy that involves a more incremental approach to development, the report states.

Delays with other programs would also cause similar interactive problems. The Navy’s Mobile User Objective System (MUOS) is a satellite communication system that will increase narrowband communications capabilities for users worldwide. However, delays to the Joint Tactical Radio System, a set of software-defined radios and an FCS spin-off, could mean that the advanced MUOS capabilities will be drastically underused, at least initially, GAO said.

John Young, undersecretary of Defense for acquisition, technology and logistics, said in commenting on the report that much of the increase in costs can be attributed to older programs started years ago. Newer programs that began under improved acquisition processes do not show the same cost spurts.

Meanwhile, a week before GAO published its report, Ashton Carter, the Obama administration’s nominee to take over Young’s position, told the Senate Armed Services Committee that he would work to keep immature technologies from moving through the procurement system and would demand more realistic cost assessments.

Carter promised a program-by-program review to find out why some projects had vastly exceeded cost estimates and dropped so far behind schedule. He warned that troubled programs could be cut.