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This is GAO s annual assessment of DOD weapon system acquisitions, an area that is on GAO s High-Risk List. DOD and Congress have taken meaningful steps to improve the acquisition of major weapon systems, yet many programs are still falling short of cost and schedule estimates. Moreover, GAO has emphasized the importance of completing developmental testing before programs enter production and pointed out risks associated with such concurrent testing and production. With expected budgetary pressures, DOD cannot afford to miss opportunities to address inefficiencies in these programs to free up resources for higher priority needs. This report responds to a mandate in the joint explanatory statement to the DOD Appropriations Act, 2009. It includes observations on (1) the cost and schedule performance of DOD s 2013 portfolio of 80 major defense acquisition programs; (2) the knowledge attained at key junctures in the acquisition process for 38 programs that were in development or early production; and (3) key acquisition reform initiatives and program concurrency. To develop the observations in this report, GAO analyzed cost, schedule, and quantity data from DOD s Selected Acquisition Reports. GAO also collected data from program offices on technology, design, and manufacturing knowledge; the use of knowledge-based acquisition practices; and the implementation of acquisition reforms and initiatives. In commenting on a draft of this report, DOD cited its commitment to acquisition excellence and its positive effect on programs., Report to Congressional Committees

This is GAO s annual assessment of DOD weapon system acquisitions, an area that has been on GAO s high-risk list for more than 20 years. The report responds to the mandate in the joint explanatory statement to the DOD Appropriations Act, 2009. It includes observations on (1) the cost and schedule performance of DOD s 2012 portfolio of 86 major defense acquisition programs, including the Missile Defense Agency s Ballistic Missile Defense System; (2) the knowledge attained at key junctures in the acquisition process for 40 major defense acquisition programs that were selected because they were in development or early production; and (3) key acquisition reform initiatives and program concurrency. Major defense acquisition programs are DOD s costliest weapon system development and procurement programs. To develop the observations, GAO analyzed cost, schedule, and quantity data from DOD s Selected Acquisition Reports and collected data from program offices on technology, design, and manufacturing knowledge; the use of knowledge-based acquisition practices; and the implementation of DOD s acquisition policy and acquisition reforms. In commenting on a draft of this report, DOD agreed that the cost reductions in its portfolio over the past year were largely due to exiting programs and reductions in procurement quantities. However, DOD stated that the metrics used did not adequately address program performance or answer the questions of when, why, and how changes occurred. GAO believes the report addresses these concerns., Report to Congressional Committees.

In July 2007, the USD (AT&L) established CSBs for every current and future major defense acquisition program in development as a measure to limit requirements change and avoid cost increases. The CSBs were to have a broad membership, including senior representatives from the offices of USD (AT&L) and Joint Staff. CSBs were intended to review all requirements and significant technical configuration changes with the potential to adversely affect the program. The USD (AT&L) directed that these changes should generally be rejected or deferred unless funds and schedule adjustments could be identified to mitigate their effects. In addition, program managers were asked to identify options to reduce program cost or moderate requirements, referred to as "descoping" options, on a roughly annual basis. USD (AT&L) also instructed that, while policy would be to keep within planned costs as much as possible even at the expense of scope and content, all expected increases in program costs must be budgeted at the absolute earliest opportunity. USD (AT&L) incorporated CSBs into DOD's primary acquisition policy- DOD Instruction 5000.02-in December 2008.

The Deepwater Program-the largest acquisition program in the Coast Guard's history-began in the late 1990s as an effort to recapitalize the Coast Guard's operational fleet. The program now includes projects to build or modernize five classes each of ships and aircraft, and procurement of other capabilities such as improved command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) and unmanned aircraft. Recognizing that it did not have in place a workforce with the experience and depth to manage the acquisition, the Coast Guard contracted with Integrated Coast Guard Systems (ICGS) in June 2002 as a systems integrator for Deepwater. After a series of programmatic failures, the Commandant acknowledged in April 2007 that the Coast Guard had relied too heavily on contractors to do the work of the government and that government and industry had failed to control costs. He announced several major changes to the acquisition approach for Deepwater, the key one being that the Coast Guard would take over the role of systems integrator from ICGS, with future work on individual assets to be potentially bid competitively outside of the existing contract. In May 2007, soon after this announcement, the Department of Homeland Security (DHS) approved an acquisition program baseline of $24.2 billion for the Deepwater Program. In response to a direction in the Senate report accompanying the Department of Homeland Security Appropriations Bill, 2009, and discussions with your staff, we (1) evaluated Coast Guard efforts to manage the Deepwater Program at both the overall system and asset levels; (2) assessed changes in cost, schedules, and capabilities from the 2007 baseline; and (3) identified Coast Guard efforts to build its acquisition workforce to manage this multibillion dollar program. This report updates information contained in our April 2009 testimony to the Homeland Security Subcommittee of the House Appropriations Committee.

The Joint Strike Fighter (JSF) is the Department of Defense's (DoD) most expensive aircraft acquisition program. DoD is expected to develop, procure, and maintain 2,443 aircraft at a cost of more than $950 billion. DoD plans for the JSF to replace or complement several types of aircraft in the Air Force, Navy, and Marine Corps. Given the program's cost and importance, it is critical that decisions are made within this program to maximize its benefit to the nation. This testimony highlights a number of those decisions and impacts. The testimony does the following: (1) discusses emerging risks to the overall program, and (2) updates information for GAO's cost analysis of last year regarding sole-source and competitive scenarios for acquisition and sustainment of the JSF engine. Information on the overall program is from GAO's mandated annual report, also issued today. GAO tracked annual cost and schedule changes, reasons for changes, decisions affecting development, and compared DoD cost estimating methodologies to best practices. For the two engines, GAO updated cost data from last year's testimony and made new projections. This testimony does not have recommendations, but GAO's mandated report recommends revisiting the mid-course plan and improving cost estimates. DoD substantially agreed., Testimony before the Subcommittees on Air and Land Forces, and Seapower and Expeditionary Forces, Committee on Armed Services, House of Representatives.