United States Government Accountability Office

GAO Testimony 

Before the Committee on Oversight and 

Government Reform and the 

Subcommittee on National Security and 

Foreign Affairs, House of Representatives

DEFENSE ACQUISITIONS

Results of Annual 

Assessment of DOD 

Weapon Programs 

Statement of Michael J. Sullivan, Director 

Acquisition and Sourcing Management 

For Release on Delivery

Expected at 10:00 a.m. EDT 

Tuesday, April 29, 2008

 

GAO-08-674T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 29, 2008

DEFENSE ACQUISITIONS

Results of Annual Assessment of DOD Weapon 

Programs

Highlights of GAO-08-674T, a testimony 

before the Committee on Oversight and 

Government Reform and the 

Subcommittee on National Security and 

Foreign Affairs, House of Representatives

DOD’s investment in weapon 

systems represents one of the 

largest discretionary items in the 

budget. The department expects to

invest about $900 billion (fiscal

year 2008 dollars) over the next

5 years on development and 

procurement with more than 

$335 billion invested specifically in 

major defense acquisition 

programs. Every dollar spent 

inefficiently in acquiring weapon

systems is less money available for 

other budget priorities—such as 

the global war on terror and 

growing entitlement programs. 

This testimony focuses on (1) the

overall performance of DOD’s 

weapon system investment 

portfolio; (2) our assessment of 

72 weapon programs against best 

practices standards for successful

product developments; and (3) 

potential solutions and recent DOD 

actions to improve weapon

program outcomes. It is based on 

GAO-08-467SP, which included our 

analysis of broad trends in the 

performance of the programs in 

DOD’s weapon acquisition 

portfolio and our assessment of 

72 defense programs, and 

recommendations made in past

GAO reports.

DOD was provided a draft of 

GAO-08-467SP and had no

comments on the overall report,

but did provide technical 

comments on individual

assessments. The comments, along 

with the agency comments 

received on the individual

assessments, were included as

appropriate. 

We recently released our sixth annual assessment of selected DOD weapon 

programs. The assessment indicates that cost and schedule outcomes for 

major weapon programs are not improving. Although well-conceived 

acquisition policy changes occurred in 2003 that reflect many best practices

we have reported on in the past, these policy changes have not yet translated 

into practice at the program level. 

Analysis of DOD Major Defense Acquisition Program Portfolios (fiscal year [FY] 2008 dollars) 

 FY 2000 

Portfolio 

FY 2005 

Portfolio

FY 2007 

Portfolio

Portfolio size

Number of programs 75 91 95

Total planned commitments $790 Billion $1.5 Trillion $1.6 Trillion

Commitments outstanding $380 Billion $887 Billion $858 Billion

Portfolio performance 

Change in total acquisition cost from first estimate 6 percent 18 percent 26 percent

Estimated total acquisition cost growth $42 Billion $202 Billion $295 Billion

Share of programs with 25 percent or more increase 

in program acquisition unit cost 37 percent 44 percent 44 percent

Average schedule delay in delivering initial 

capabilities 16 months 17 months 21 months

Source: GAO analysis of DOD data. 

None of the weapon programs we assessed this year had proceeded through 

system development meeting the best practices standards for mature 

technologies, stable design, and mature production processes—all 

prerequisites for achieving planned cost, schedule, and performance 

outcomes. In addition, only a small percentage of programs used two key 

systems engineering tools—preliminary design reviews and prototypes to 

demonstrate the maturity of the product’s design by critical junctures. This

lack of disciplined systems engineering affects DOD’s ability to develop 

sound, executable business cases for programs. 

Our work shows that acquisition problems will likely persist until DOD 

provides a better foundation for buying the right things, the right way. This 

involves making tough decisions as to which programs should be pursued, 

and more importantly, not pursued; making sure programs are executable; 

locking in requirements before programs are ever started; and making it clear

who is responsible for what and holding people accountable when 

responsibilities are not fulfilled. Moreover, the environment and incentives 

that lead DOD and the military services to overpromise on capability and 

underestimate costs in order to sell new programs and capture funding will 

need to change. Based in part on GAO recommendations and congressional 

direction, DOD has begun several initiatives that, if adopted and implemented 

properly, could provide a foundation for establishing sound, knowledge-based 

business cases for individual acquisition programs and improving outcomes. 

To view the full product, including the scope 

and methodology, click on GAO-08-674T. 

For more information, contact Michael J. 

Sullivan at (202) 512-4841 or 

sullivanm@gao.gov. 
Mr. Chairmen and Members of the Committee and Subcommittee: 

I am pleased to be here today to discuss the Department of Defense’s 

(DOD) management of its weapon system acquisitions—an area that has 

been part of GAO’s high risk list since 1990. We have recently released our 

sixth annual assessment of selected DOD weapon programs. The 

assessment indicates that cost and schedule outcomes for the DOD’s 

major weapon system programs are not improving. 

Continuing poor acquisition outcomes have implications for DOD and the 

government as a whole. DOD’s investment in weapon systems represents 

one of the largest discretionary items in the budget. While overall 

discretionary funding is declining, DOD’s budget continues to demand a 

larger portion of what is available, thereby leaving a smaller percentage

for other activities. Investment in weapon acquisition programs is now at 

its highest level in two decades. The department expects to invest about 

$900 billion (fiscal year 2008 dollars) over the next 5 years on development 

and procurement with more than $335 billion invested specifically in 

major defense acquisition programs. Every dollar spent inefficiently in

acquiring weapon systems is less money available for other budget 

priorities—such as the global war on terror and growing entitlement 

programs. 

My statement today focuses on (1) the overall performance of DOD’s 

weapon system investment portfolio; (2) our assessment of 72 weapon 

programs against best practices standards for successful product 

developments; and (3) potential solutions and recent DOD actions to 

improve weapon program outcomes. It is drawn mostly from our annual 

assessment of selected DOD weapon programs, as well as 

recommendations made in past GAO reports. Our assessment provided 

information on 72 individual weapon programs and analyzed overall trends 

in DOD acquisition outcomes. The programs assessed—most of which are 

considered major acquisitions by DOD—were selected using several 

factors: high dollar value, acquisition stage, and congressional interest.1

 

We conducted this performance audit from June 2007 to March 2008 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

 1

 Major defense acquisition programs (MDAP) are those identified by DOD that require

eventual total research, development, test, and evaluation (RDT&E) expenditures of more 

than $365 million or $2.19 billion for procurement in fiscal year 2000 constant dollars. 

Page 1 GAO-08-674T 
appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

Since fiscal year 2000, DOD significantly increased the number of major 

defense acquisition programs and its overall investment in them. During 

this same time period, acquisition outcomes have not improved. Based on

our analysis, total acquisition costs for the fiscal year 2007 portfolio of 

major defense acquisition programs increased 26 percent and

development costs increased by 40 percent from first estimates—both of 

which are higher than the corresponding increases in DOD’s fiscal year 

2000 portfolio. In most cases, programs also failed to deliver capabilities 

when promised—often forcing warfighters to spend additional funds on 

maintaining legacy systems. Our analysis shows that current programs are 

experiencing, on average, a 21-month delay in delivering initial capabilities 

to the warfighter, a 5-month increase over fiscal year 2000 programs. 

Summary 

At the program level, none of the weapon programs we assessed had 

proceeded through system development meeting the best practices 

standards for mature technologies, stable design, and mature production 

processes—all prerequisites for achieving planned cost, schedule, and

performance outcomes.2

 In addition, only a small percentage of programs 

used two key systems engineering tools—preliminary design reviews and 

prototypes to demonstrate the maturity of the product’s design by critical 

junctures. This lack of disciplined systems engineering, especially prior to

starting system development, affects DOD’s ability to develop sound 

business cases for programs and can contribute to contract cost increases

and long development cycle times. In addition, we found four factors that 

have the potential to impact acquisition outcomes on individual programs: 

(1) unsettled requirements in acquisition programs can create significant 

turbulence including increased cost growth; (2) frequent program manager 

turnover during system development challenges continuity and 

accountability; (3) extensive reliance on contractors to perform roles that 

have in the past been performed by government employees raises 

questions about whether DOD has the appropriate mix of staff and 

 2

 Not all 72 programs in this year’s assessment provided information for every knowledge 

point or had proceeded through system development. Details of our scope and 

methodology can be found in GAO-08-467SP.

Page 2 GAO-08-674T 
capabilities within its workforce to effectively manage programs; and 

(4) difficulty managing software, as evidenced by changes to the amount 

of software that needs to be developed, indicates the potential for cost and

schedule problems. 

There is some reason for optimism. Based in part on GAO 

recommendations and congressional direction, DOD has begun to develop

several initiatives that, if adopted and implemented properly, could 

provide a foundation for establishing sound, knowledge-based business 

cases for individual acquisition programs and improving program 

outcomes. For example, a new concept decision review initiative, 

acquisition approaches based on capability need dates, a move to require 

more prototyping early in programs, and the establishment of review 

boards to monitor weapon system configuration changes are all designed

to enable key department leaders to make informed decisions well ahead 

of a program’s start. If implemented properly, these initiatives can help 

establish a more balanced mix of programs in which to invest, establish 

manageable business cases for individual programs, and empower and 

hold accountable program managers to deliver weapons less expensively 

and on-time. However, improving acquisition outcomes will also require a 

change in the environment and incentives that lead DOD and the military 

services to overpromise capabilities and underestimate costs in order to 

sell new programs and capture the funding needed to start and sustain 

them. 

DOD is not receiving expected returns on its large investment in weapon 

systems. While it is committing substantially more investment dollars to 

develop and procure new weapon systems, our analysis shows that the 

2007 portfolio of major defense acquisition programs is experiencing 

greater cost growth and schedule delays than programs in fiscal years 2000 

and 2005.3

 For example, as shown in table 1, total acquisition costs for 

2007 programs have increased 26 percent from first estimates, whereas 

programs in fiscal year 2000 had increased by 6 percent. Total RDT&E 

costs for programs in 2007 have increased by 40 percent from first 

estimates, compared to 27 percent for programs in 2000. The story is no 

better when expressed in unit costs. Based on our analysis for the 2007 

DOD’s Major 

Acquisition Programs 

Continue to 

Experience 

Significant Cost

Growth and Schedule 

Delays 

 3

 Our analysis in this area reflects comparisons of performance for programs meeting 

DOD’s criteria for being a major defense acquisition program in fiscal year 2007 and 

programs meeting the same criteria in fiscal years 2005 and 2000. The analysis does not

include all the same systems in all 3 years. 

Page 3 GAO-08-674T 
portfolio, 44 percent of DOD’s major defense acquisition programs are 

paying at least 25 percent more per unit than originally expected. The 

percentage of programs experiencing a 25 percent or more increase in 

program acquisition unit costs in fiscal year 2000 was 37 percent. 

Table 1: Analysis of DOD Major Defense Acquisition Program Portfolios

Fiscal year 2008 dollars 

Fiscal year

2000 portfolio 2005 portfolio 2007 portfolio

Portfolio size 

Number of programs 75 91 95

Total planned commitments $790 Billion $1.5 Trillion $1.6 Trillion

Commitments outstanding $380 Billion $887 Billion $858 Billion

Portfolio performance 

Change to total RDT&E costs 

from first estimate 

27 percent 33 percent 40 percent

Change in total acquisition cost 

from first estimate 

6 percent 18 percent 26 percent

Estimated total acquisition cost 

growth 

$42 Billion $202 Billion $295 Billion

Share of programs with 25 

percent or more increase in 

program acquisition unit cost 

37 percent 44 percent 44 percent

Average schedule delay in

delivering initial capabilities 

16 months 17 months 21 months

Source: GAO analysis of DOD data. 

Note: Data were obtained from DOD’s Selected Acquisition Reports (dated December 1999, 2004, 

and 2006) or, in a few cases, data were obtained directly from program offices. Number of programs 

reflects the programs with Selected Acquisition Reports. In our analysis we have broken a few 

Selected Acquisition Report programs (such as Missile Defense Agency systems) into smaller 

elements or programs. Not all programs had comparative cost and schedule data, and these

programs were excluded from the analysis where appropriate. Also, data do not include full costs of 

developing Missile Defense Agency systems. 

The consequence of cost growth is reduced buying power, which can

represent significant opportunity costs for DOD. In other words, every 

dollar spent on inefficiencies in acquiring one weapon system is less 

money available for other priorities and programs. Total acquisition cost 

for the current portfolio of major programs under development or in 

production has grown by nearly $300 billion over initial estimates. As 

program costs increase, DOD must request more funding to cover the 

overruns, make trade-offs with existing programs, delay the start of new 

programs, or take funds from other accounts. 

Page 4 GAO-08-674T 
Just as importantly, DOD has already missed fielding dates for many 

programs and many others are behind schedule. Because of program 

delays, warfighters often have to operate costly legacy systems longer than

expected, find alternatives to fill capability gaps, or go without the 

capability. The warfighter’s urgent need for the new weapon system is 

often cited when the case is first made for developing and producing the 

system. However, on average, the current portfolio of programs has 

experienced a 21-month delay in delivering initial operational capability to 

the warfighter and, in fact, 14 percent are more than 4 years late. 

In assessing the 72 weapon programs, we found no evidence of

widespread adoption of a knowledge-based acquisition process within 

DOD despite polices to the contrary. Reconciling this discrepancy 

between policy and practice is essential for getting better outcomes for 

DOD programs. The majority of programs in our assessment this year 

proceeded with lower levels of knowledge at critical junctures and 

attained key elements of product knowledge later in development than 

expected under best practices (see fig. 1). This exposes programs to 

significant and unnecessary technology, design, and production risks, and 

ultimately leads to cost growth and schedule delays. The building of 

knowledge over a product’s development is cumulative, as one knowledge 

point builds on the next, and failure to capture key product knowledge can

lead to problems that eventually cascade and become magnified 

throughout product development and production. 

DOD Weapon System 

Programs Continue to 

Move Forward 

Without Proper 

Knowledge about 

Requirements, 

Technology, Design, 

and Manufacturing 

Processes 

Page 5 GAO-08-674T 
Figure 1: Knowledge Achievement for Weapon System Programs in 2008 

Assessment at Key Junctures 

Source: GAO analysis of DOD data.

Key 

junctures

Best 

practices

DOD 

outcomesa 12 percent 

of programs

Development start

Knowledge point 1

Mature all critical 

technologies

Knowledge point 2

Achieve knowledge point 

1 on time and complete 

90 percent of engineering 

drawings

Knowledge point 3

Achieve knowledge points

1 and 2 on time, and have all 

critical processes under 

statistical control

Design review Production start

4 percent of 

programs

0 percent of 

programsb

a

Not all programs provided information for each knowledge point or had passed through all three key 

junctures. 

b

In our assessment of two programs, the Light Utility Helicopter and the Joint Cargo Aircraft, are 

depicted as meeting all three knowledge points when they began at production start. We excluded 

these two programs from our analysis because they were based on commercially available products

and we did not assess their knowledge attainment with our best practices metrics. 

Programs Begin without 

Matching Product 

Requirements with 

Available Resources 

Very few of the programs we assessed started system development with 

evidence that the proposed solution was based on mature technologies 

and proven design features. As a result, programs are still working to 

mature technologies during system development and production, which 

causes significantly higher cost growth than programs that start 

development with mature technologies. Only 12 percent of the programs in 

our assessment demonstrated all of their critical technologies as fully 

mature at the start of system development and they have had much better 

outcomes than the others. For those programs in our assessment with 

immature technologies at development start, total RDT&E costs grew by 

44 percent more than for programs that began with mature technologies. 

More often than not, programs were still maturing technologies late into 

development and even into production. 

In addition to ensuring that technologies are mature, best practices for 

product development suggest that the developer should have delivered a 

preliminary design of the proposed weapon system based on a robust 

systems engineering process before committing to system development. 

This process should allow the developer—the contractor responsible for 

Page 6 GAO-08-674T 
designing the weapon system—to analyze the customer’s expectations for

the product and identify gaps between resources and those expectations, 

which then can be addressed through additional investments, alternate 

designs, and ultimately trade-offs. Only ten percent of the programs in our 

assessment had completed their preliminary design review prior to 

committing to system development. The other 90 percent averaged about

2 1/2 years into system development before the review was completed or 

planned to be completed. Programs like the Aerial Common Sensor and 

Joint Strike Fighter did not deliver a sound preliminary design at system 

development start and discovered problems early in their design activities 

that required substantial resources be added to the programs or, in the 

case of Aerial Common Sensor, termination of the system development 

contract. 

Programs Continue to 

Move into System 

Demonstration and 

Production without 

Achieving Design Stability 

Knowing that a product’s design is stable before system demonstration 

reduces the risk of costly design changes occurring during the 

manufacturing of production representative prototypes—when 

investments in acquisitions become much more significant. Only a small 

portion of the programs in our assessment that have held a design review 

captured the necessary knowledge to ensure that they had mature 

technologies at system development start and a stable system design 

before entering the more costly system demonstration phase of 

development. Over half of the programs in our assessment did not even 

have mature technologies at the design review (knowledge that actually 

should have been achieved before system development start). Also, less 

than one-quarter of the programs that provided data on drawings released 

at the design review reached the best practices standard of 90 percent. We

have found that programs moving forward into system demonstration with 

low levels of design stability are more likely than other programs to 

encounter costly design changes and parts shortages that in turn caused 

labor inefficiencies, schedule delays, and quality problems. Even by the 

beginning of production, more than a third of the programs that had 

entered this phase still had not released 90 percent of their engineering 

drawings. 

In addition, we found that over 80 percent of the programs providing data

did not or did not plan to demonstrate the successful integration of the key 

subsystems and components needed for the product through an 

integration laboratory, or better yet, through testing an early system 

prototype by the design review. For example, the Navy’s E-2D Advanced 

Hawkeye moved past the design review and entered systems 

demonstration without fully proving—through the use of an integration lab 

Page 7 GAO-08-674T 
or prototype—that the design could be successfully integrated. The 

program did not have all the components operational in a systems 

integration lab until almost 2 years after the design review. While the 

program estimated it had released 90 percent of the drawings needed for 

the system by the design review, as it was conducting system integration 

activities, it discovered that it needed substantially more drawings. This 

increase means that the program really had completed only 53 percent of

the drawings prior to the review, making it difficult to ensure the design 

was stable. 

Programs Enter 

Production without 

Demonstrating Acceptable 

Manufacturing Processes 

and Weapon System 

Performance 

In addition to lacking mature technologies and design stability, most 

programs have not or do not plan to capture critical manufacturing and 

testing knowledge before entering production. This knowledge ensures 

that the product will work as intended and can be manufactured efficiently 

to meet cost, schedule, and quality targets. Of the 26 programs in our 

assessment that have had production decisions, none provided data 

showing that they had all their critical manufacturing processes in 

statistical control by the time they entered into the production phase.4

 In 

fact, only 3 of these programs indicated that they had even identified the

key product characteristics or associated critical manufacturing 

processes—key initial steps to ensuring critical production elements are 

stable and in control. Failing to capture key manufacturing knowledge 

before producing the product can lead to inefficiencies and quality 

problems. For example, the Wideband Global SATCOM program 

encountered cost and schedule delays because contractor personnel 

installed fasteners incorrectly. Discovery of the problem resulted in 

extensive inspection and rework to correct the deficiencies, contributing 

to a 15-month schedule delay. 

In addition to demonstrating that the product can be built efficiently, our 

work has shown that production and post-production costs are minimized 

when a fully integrated, capable prototype is demonstrated to show it will 

work as intended and in a reliable manner. We found that many programs 

are susceptible to discovering costly problems late in development, when 

 4

 We have excluded two programs from this calculation, Light Utility Helicopter and Joint

Cargo Aircraft. While we have assessed these programs as having mature manufacturing 

processes, this is because they are commercial acquisitions, not because processes were 

demonstrated to be in statistical control. Also, the Multifunctional Information Distribution 

System (MIDS) program indicates that its two critical processes are in statistical control 

but it has not formally entered the production phase. 

Page 8 GAO-08-674T 
the more complex software and advanced capabilities are tested. Of the 

33 programs that provided us data about the overlap between system 

development and production, almost three-quarters still had or planned to 

have system demonstration activities left to complete after production had 

begun. For 9 programs, the amount of system development work 

remaining was estimated to be over 4 years. This practice of beginning 

production before successfully demonstrating that the weapon system will 

work as intended increases the potential for discovering costly design 

changes that ripple through production into products already fielded. 

Forty programs we assessed provided us information on when they had or

planned to have tested a fully configured, integrated production 

representative article (i.e., prototype) in the intended environment. Of 

these, 62 percent reported that they did not conduct or do not plan to 

conduct that test before a production decision. We also found examples 

where product reliability is not being demonstrated in a timely fashion. 

Making design changes to achieve reliability requirements after production 

begins is inefficient and costly. For example, despite being more than 5 

years past the production decision, the Air Force’s Joint Air-to-Surface 

Standoff Missile experienced four failures during four flight tests in 2007, 

resulting in an overall missile reliability rate of less than 

60 percent. The failures halted procurement of new missiles by the Air 

Force until the problems could be resolved. 

Absence of Disciplined 

Systems Engineering 

Practices Leads to 

Unexecutable Business 

Cases 

DOD’s poor acquisition outcomes stem from the absence of knowledge 

that disciplined systems engineering practices can bring to decision 

makers prior to beginning a program. Systems engineering is a process 

that translates customer needs into specific product requirements for 

which requisite technological, software, engineering, and production 

capabilities can be identified. These activities include requirements 

analysis, design, and testing in order to ensure that the product’s 

requirements are achievable given available resources. Early systems 

engineering provides knowledge that enables a developer to identify and

resolve gaps before product development begins. Consequently, 

establishing a sound acquisition program with an executable business case 

depends on determining achievable requirements based on systems 

engineering that are agreed to by both the acquirer and developer before a 

program’s initiation. We have recently reported on the impact that poor 

systems engineering practices have had on several programs such as the 

Page 9 GAO-08-674T 
Global Hawk Unmanned Aircraft System, F-22A, Expeditionary Fighting 

Vehicle, Joint Air-to-Surface Standoff Missile and others.5

When early systems engineering, specifically requirements analysis, is not 

performed, increased cost risk to the government and long development 

cycle times can be the result. DOD awards cost reimbursement type 

contracts for the development of major weapon systems because of the 

risk and uncertainty involved with its programs.6

 Because the government 

often does not perform the necessary systems engineering analysis before

a contract is signed to determine whether a match exists between 

requirements and available resources, significant contract cost increases 

can occur as the scope of the requirements change or becomes better 

understood by the government and contractor. Another potential 

consequence of the lack of requirements analysis is unpredictable cycle 

times. Requirements that are limited and well-understood contribute to 

shorter, more predictable cycle times. Long cycle times promote 

instability, especially considering DOD’s tendency to have changing 

requirements and program manager turnover. On the other hand, timedefined developments can allow for more frequent assimilation of new 

technologies into weapon systems and speed new capabilities to the 

warfighter. In fact, DOD itself suggests that system development should be

limited to about 5 years. 

Additional Factors Can 

Contribute to Poor 

Weapon Program 

Outcomes 

This year, we gathered new data focused on other factors we believe could 

have a significant influence on DOD’s ability to improve cost and schedule 

outcomes. These factors were changes to requirements after development 

began, the length of program managers’ tenure, reliance on contractors for 

program support, and difficulty managing software development. 

Foremost, several DOD programs in our assessment incurred requirement 

changes after the start of system development and experienced cost 

 5

 GAO, Best Practices: Increased Focus on Requirements and Oversight Needed to 

Improve DOD’s Acquisition Environment and Weapon System Quality, GAO-08-294 

(Washington D.C.: Feb. 1, 2008). 

6

 In contrast, a firm-fixed price contract provides for a pre-established price, and places

more risk and responsibility for costs and resulting profit or loss on the contractor and 

provides more incentive for efficient and economical performance. With either a cost

reimbursement or firm-fixed price type contract, if the government changes the 

requirements after performance has begun, which then causes a price or cost increase to 

the contractor, the government must pay for these changes. 

Page 10 GAO-08-674T 
increases. Among the 46 programs we surveyed, RDT&E costs increased 

by 11 percent over initial estimates for programs that have not had 

requirements changes, while they increased 72 percent among those that 

had requirements changes (see fig. 2).

7

Figure 2: Average RDT&E Cost Growth for Programs since Initial Estimates 

0

20

40

60

80

Programs

with

requirements

changes

Programs

without

requirements

changes

Source: GAO analysis of DOD data.

Percent

11

72

At the same time, DOD’s practice of frequently changing program 

managers during a program’s development makes it difficult to hold them 

accountable for the business cases that they are entrusted to manage and

deliver. Our analysis indicates that for 39 major acquisition programs 

started since March 2001, the average time in system development was 

about 37 months. The average tenure for program managers on those 

programs during that time was about 17 months—less than half of what is 

required by DOD policy. 

 7

 This average does not include the C-130 J program because of its extreme RDT&E cost 

growth. The average including C-130 J is 210 percent.

Page 11 GAO-08-674T 
We also found that DOD is relying more on contractors to support the 

management and oversight of weapon system acquisitions and contracts.

For 52 DOD programs that provided information, about 48 percent of the 

program office staff was composed of individuals outside of DOD (see 

table 2). In a prior review of space acquisition programs, we found that 

8 of 13 cost-estimating organizations and program offices believed the 

number of cost estimators was inadequate and we found that 10 of those 

offices had more contractor personnel preparing cost estimates than 

government personnel. We also found examples during this year’s 

assessment where the program offices expressed concerns about having 

inadequate personnel to conduct their program office roles. 

Table 2: Program Office Staffing Composition for 52 DOD Programs 

Percentage of staff 

Program 

management 

Administrative 

support

Business 

functions

Engineering

 and technical Other Total

Government 70 39 64 48 45 52

Support contractors 22 60 35 34 55 36

Other non-governmenta8 1 1 18 1 12

Total non-government 30 61 36 52 56 48

Source: GAO analysis of DOD data. 

Note: Table may not add due to rounding. 

a

Other includes federally funded research and development centers, universities, and affiliates.

Finally, as programs rely more heavily on software to perform critical 

functions for weapon systems, we found that a large number of programs 

are encountering difficulties in managing their software development. 

Roughly half of the programs that provided us software data had at least a 

25 percent growth in their expected lines of code—a key metric used by 

leading software developers—since system development started. For 

example, software requirements were not well understood on the Future 

Combat Systems when the program began; and as the program moves 

toward preliminary design activities, the number of lines of software code 

has nearly tripled. Changes to the lines of code needed can indicate 

potential cost and schedule problems. 

Our work shows that acquisition problems will likely persist until DOD 

provides a better foundation for buying the right things, the right way. This

involves (1) maintaining the right mix of programs to invest in by making

better decisions as to which programs should be pursued given existing 

The Way Forward: 

Potential Solutions 

Page 12 GAO-08-674T 
and expected funding and, more importantly, deciding which programs 

should not be pursued; (2) ensuring that programs that are started are 

executable by matching requirements with resources and locking in those 

requirements; and (3) making it clear that programs will then be executed 

based on knowledge and holding program managers responsible for that 

execution. We have made similar recommendations in past GAO reports. 

These changes will not be easy to make. They will require DOD to 

reexamine not only its acquisition process, but its requirement setting and 

funding processes as well. They will also require DOD to change how it 

views program success, and what is necessary to achieve success. This 

includes changing the environment and incentives that lead DOD and the 

military services to overpromise on capability and underestimate costs in 

order to sell new programs and capture the funding needed to start and 

sustain them. Finally, none of this will be achieved without a true 

partnership among the department, the military services, the Congress, 

and the defense industry. All of us must embrace the idea of change and 

work diligently to implement it. 

Buy the Right Things: 

Develop and Implement an 

Investment Strategy 

The first, and most important, step toward improving acquisition 

outcomes is implementing a new DOD-wide investment strategy for 

weapon systems. We have reported that DOD should develop an 

overarching strategy and decision-making processes that prioritize 

programs based on a balanced match between customer needs and 

available department resources---that is the dollars, technologies, time, 

and people needed to achieve these capabilities. We also recommended 

that capabilities not designated as a priority should be set out separately

as desirable but not funded unless resources were both available and 

sustainable. This means that the decision makers responsible for weapon 

system requirements, funding, and acquisition execution must establish an 

investment strategy in concert. 

DOD’s Under Secretary of Defense for Acquisition, Technology and 

Logistics—DOD’s corporate leader for acquisition—should develop this 

strategy in concert with other senior leaders, for example, combatant 

commanders who would provide input on user needs; DOD’s comptroller 

and science and technology leaders, who would provide input on available 

resources; and acquisition executives from the military services, who 

could propose solutions. Finally, once priority decisions are made, 

Congress will need to enforce discipline through its legislative and 

oversight mechanisms. 

Page 13 GAO-08-674T 
Table 3: Key Actions for Developing an Investment Strategy for Acquiring New

Systems 

Who 

Under Secretary of Defense for Acquisition, Technology and Logistics in

concert with other senior officials 

Action Analyze customer needs vs. wants based on available technology and available 

resources 

Compare analysis to DOD’s long-term vision

Determine priorities for acquisitions based on this comparison

Separate other programs as “desirable,” resources permitting 

Enforce funding for priorities annually; measure success against the plan 

Source: GAO.

Buy the Right Way: Ensure 

Individual Programs Are 

Executable 

Once DOD has prioritized capabilities, it should work vigorously to make 

sure each new program is executable before the acquisition begins. More 

specifically, this means assuring requirements for specific weapon systems 

are clearly defined and achievable given available resources and that all 

alternatives have been considered. System requirements should be agreed

to by service acquisition executives as well as combatant commanders. 

Once programs begin, requirements should not change without assessing 

their potential disruption to the program and assuring that they can be

accommodated within time and funding constraints. In addition, DOD 

should prove that technologies can work as intended before including 

them in acquisition programs. More ambitious technology development 

efforts should be assigned to the science and technology community until 

they are ready to be added to future generations of the product. DOD 

should also require the use of independent cost estimates as a basis for 

budgeting funds. Our work over the past 10 years has consistently shown 

when these basic steps are taken, programs are better positioned to be 

executed within cost and schedule. 

To keep programs executable, DOD should demand that all go/no-go 

decisions be based on quantifiable data and demonstrated knowledge. 

These data should cover critical program facets such as cost, schedule, 

technology readiness, design readiness, production readiness, and 

relationships with suppliers. Development should not be allowed to 

proceed until certain knowledge thresholds are met—for example, a high 

percentage of engineering drawings completed at critical design review. 

DOD’s current policies encourage these sorts of metrics to be used as a 

basis for decision making, but they do not demand it. DOD should also 

place boundaries on the time allowed for system development. 

Page 14 GAO-08-674T 
Table 4: Key Actions for Making Sure Programs Are Executable 

Who Military services and joint developers with support from USD AT&L 

Action • Keep technology discovery/invention out of acquisition programs 

• Follow an incremental path toward meeting user needs; assure all 

alternatives are considered

• Ensure system requirements are agreed to by service acquisition executives 

and warfighters and that no additional requirements are added during

execution 

• Use systems engineering to close gaps between requirements and 

resources prior to launching the development process 

• Require the use of independent cost estimates as a basis for budgeting 

funds; update cost estimates annually and track against the original baseline 

estimate 

• Encourage the use of earned value data at each systems engineering 

technical review in order to track program progress against original baseline 

estimates 

• Use quantifiable data and demonstrable knowledge to make decisions to

move to next phases 

• Employ additional management reviews when deviations of cost or schedule

exceed 10 percent against baseline estimates. 

• Place boundaries on time allowed for specific phases of development 

Source: GAO.

To further ensure that programs are executable, DOD should pursue an 

evolutionary path toward meeting user needs rather than attempting to 

satisfy all needs in a single step. This approach has been consistently used 

by successful commercial companies we have visited over the past decade 

because it provides program managers with more achievable

requirements, which, in turn, facilitate shorter cycle times. With shorter 

cycle times, the companies we have studied have also been able to assure 

that program managers and senior leaders stay with programs throughout 

the duration of a program. 

DOD has policies that encourage evolutionary development, but programs 

often favor pursuing more revolutionary, exotic solutions that will attract 

funds and support. The department and, more importantly, the military 

services, tend to view success as capturing the funding needed to start and 

sustain a development program. In order to do this, they must overpromise 

capability and underestimate cost. In order for DOD to move forward, this 

view of success must change. World-class commercial firms identify 

success as developing products within cost estimates and delivering them 

on time in order to survive in the marketplace. This forces incremental, 

knowledge-based product development programs that improve capability 

as new technologies are matured. 

Page 15 GAO-08-674T 
To strengthen accountability, DOD must also clearly delineate 

responsibilities among those who have a role in deciding what to buy as 

well as those who have role in executing, revising, and terminating 

programs. Within this context, rewards and incentives must be altered so 

that success can be viewed as delivering needed capability at the right 

price and the right time, rather than attracting and retaining support for 

numerous new and ongoing programs. 

Hold People Accountable 

To enable accountability to be exercised at the program level once a 

program begins, DOD will need to (1) match program manager tenure with 

development or the delivery of a product; (2) tailor career paths and 

performance management systems to incentivize longer tenures; 

(3) strengthen training and career paths as needed to ensure program 

managers have the right qualifications for run the programs they are 

assigned to; (4) empower program managers to execute their programs, 

including an examination of whether and how much additional authority 

can be provided over funding, staffing, and approving requirements 

proposed after the start of a program; and (5) develop and provide 

automated tools to enhance management and oversight as well as to 

reduce the time required to prepare status information. 

DOD also should hold contractors accountable for results. As we have 

recommended, this means structuring contracts so that incentives actually 

motivate contractors to achieve desired acquisition outcomes and 

withholding fees when those goals are not met. 

Table 5: Key Actions for Accountability 

Who The Secretary of Defense and military service secretaries 

Actions Make it clear who is accountable on a program for what, including program 

managers, their leaders, stakeholders, and contractors 

Hold people accountable when these responsibilities are not met 

Require program managers and others, as appropriate, to stay with programs 

until a product is delivered or for system design and demonstration 

Empower program managers to execute their programs so that they can be

accountable; strengthen training and career paths as needed to ensure that 

qualified program managers are being assigned 

Improve the use of fees in order to hold contractors accountable 

Source: GAO.

Page 16 GAO-08-674T 
DOD has taken actions related to some of these steps. Based in part on 

GAO recommendations and congressional direction, DOD has recently 

begun to develop several initiatives that, if adopted and implemented 

properly, could provide a foundation for establishing sound, knowledgebased business cases for individual acquisition programs and improving 

program outcomes. For example, DOD is experimenting with a new 

concept decision review, different acquisition approaches according to 

expected fielding times, and panels to review weapon system 

configuration changes that could adversely affect program cost and 

schedule. In addition, in September 2007 the Office of the Under Secretary 

of Defense for Acquisition, Technology and Logistics issued a policy 

memorandum to ensure weapon acquisition programs were able to 

demonstrate key knowledge elements that could inform future 

development and budget decisions. This policy directed pending and 

future programs to include acquisition strategies and funding that provide 

for two or more competing contractors to develop technically mature 

prototypes through system development start (knowledge point 1), with 

the hope of reducing technical risk, validating designs and cost estimates, 

evaluating manufacturing processes, and refining requirements. Each of

the initiatives is designed to enable more informed decisions by key 

department leaders well ahead of a program’s start, decisions that provide 

a closer match between each program’s requirements and the 

department’s resources. 

Recent DOD Actions 

Provide Opportunities for 

Improvement 

DOD also plans to implement new practices similar to past GAO 

recommendations that are intended to provide program managers more 

incentives, support, and stability. The department acknowledges that any 

actions taken to improve accountability must be based on a foundation 

whereby program managers can launch and manage programs toward 

greater performance, rather than focusing on maintaining support and 

funding for individual programs. DOD acquisition leaders have told us that 

any improvements to program managers’ performance hinge on the 

success of the department’s initiatives. 

In addition, DOD has taken actions to strengthen the link between award 

and incentive fees with desired program outcomes, which has the 

potential to increase the accountability of DOD programs for fees paid and 

of contractors for results achieved. 

Page 17 GAO-08-674T 
In closing, the past year has seen several new proposed approaches to 

improve the way DOD buys weapons. These approaches have come from 

within the department, from highly credible commissions established by 

the department, and from GAO. They are based on solid principles. If they 

are to produce better results, however, they must heed the lessons 

taught—but perhaps not learned—by various past studies and by DOD’s 

acquisition history itself. Specifically, DOD must do a better job of 

prioritizing its needs in the context of the nation’s greater fiscal 

challenges. It must become more disciplined in managing the mix of 

programs to meet available funds. If everything is a priority, nothing is a 

priority. 

Concluding 

Observations 

Policy must also be manifested in decisions on individual programs or 

reform will be blunted. DOD’s current acquisition policy is a case in point. 

The policy supports a knowledge-based, evolutionary approach to 

acquiring new weapons. However, the practice—decisions made on 

individual programs—sacrifices knowledge and realism about what can 

done within the available time and funding in favor of revolutionary 

solutions. 

Reform will not be real unless each weapon system is shown to be both a 

worthwhile investment and a realistic, executable program based on the 

technology, time, and money available. This cannot be done until the 

acquisition environment is changed along with the incentives associated 

with it. DOD and the military services cannot continue to view success 

through the prism of securing the funding needed to start and sustain new 

programs. Success must be defined in terms of delivering the warfighter 

capabilities when needed and as promised and incentives must be aligned 

to encourage a disciplined, knowledge-based approach to achieve this end. 

The upcoming change in administration presents challenges as well as 

opportunities to improve the process and its outcomes through sustained 

implementation of best practices, as well as addressing new issues that 

may emerge. Significant changes will only be possible with greater, and

continued, department level support, including strong and consistent 

vision, direction, and advocacy from DOD leadership, as well as sustained 

oversight and cooperation from the Congress. In addition, all of the 

players involved with acquisitions—the requirements community; the Joint

Chiefs of Staff; the comptroller; the Under Secretary of Defense for 

Acquisition, Technology and Logistics; and perhaps most importantly, the 

military services—must be unified in implementing reforms from top to 

bottom. 

Page 18 GAO-08-674T 
Mr. Chairmen and Members of the Committee and Subcommittee, this 

concludes my statement. I will be happy to take any questions that you 

may have at this time. 

For further questions about this statement, please contact Michael J. 

Sullivan at (202) 512-4841. Individuals making key contributions to this 

statement include Ron Schwenn, Assistant Director; Ridge C. Bowman; 

Quindi C. Franco; Matthew B. Lea; Brian Mullins; Kenneth E. Patton, and 

Alyssa B. Weir. 

Contacts and Staff 

Acknowledgements 

Page 19 GAO-08-674T 
Page 20 GAO-08-674T 

Related GAO Products 

Best Practices: Increased Focus on Requirements and Oversight Needed

to Improve DOD’s Acquisition Environment and Weapon System 

Quality. GAO-08-294. Washington, D.C.: Feb. 1, 2008. 

Defense Acquisitions: Assessments of Selected Weapon Programs. GAO07-406SP. Washington, D.C.: March 30, 2007. 

Best Practices: Stronger Practices Needed to Improve DOD Technology 

Transition Processes. GAO-06-883. Washington, D.C.: September 14, 2006. 

Best Practices: Better Support of Weapon System Program Managers 

Needed to Improve Outcomes. GAO-06-110. Washington, D.C.: November 

1, 2005. 

Defense Acquisitions: Major Weapon Systems Continue to Experience 

Cost and Schedule Problems under DOD’s Revised Policy. GAO-06-368. 

Washington, D.C.: April 13, 2006. 

DOD Acquisition Outcomes: A Case for Change. GAO-06-257T. 

Washington, D.C.: November 15, 2005. 

Defense Acquisitions: Stronger Management Practices Are Needed to 

Improve DOD’s Software-Intensive Weapon Acquisitions. GAO-04-393. 

Washington, D.C.: March 1, 2004. 

Best Practices: Setting Requirements Differently Could Reduce Weapon 

Systems’ Total Ownership Costs. GAO-03-57. Washington, D.C.: February 

11, 2003. 

Defense Acquisitions: Factors Affecting Outcomes of Advanced Concept 

Technology Demonstration. GAO-03-52. Washington, D.C.: December 2, 

2002. 

Best Practices: Capturing Design and Manufacturing Knowledge Early 

Improves Acquisition Outcomes. GAO-02-701. Washington, D.C.: July 15,

2002. 

Defense Acquisitions: DOD Faces Challenges in Implementing Best 

Practices. GAO-02-469T. Washington, D.C.: February 27, 2002.

Best Practices: Better Matching of Needs and Resources Will Lead to 

Better Weapon System Outcomes. GAO-01-288. Washington, D.C.: March 8, 

2001. 
Best Practices: A More Constructive Test Approach Is Key to Better 

Weapon System Outcomes. GAO/NSIAD-00-199. Washington, D.C.: July 31, 

2000. 

Defense Acquisition: Employing Best Practices Can Shape Better 

Weapon System Decisions. GAO/T-NSIAD-00-137. Washington, D.C.: April 

26, 2000. 

Best Practices: DOD Training Can Do More to Help Weapon System 

Programs Implement Best Practices. GAO/NSIAD-99-206. Washington,

D.C.: August 16, 1999. 

Best Practices: Better Management of Technology Development Can 

Improve Weapon System Outcomes. GAO/NSIAD-99-162. Washington, 

D.C.: July 30, 1999. 

Defense Acquisitions: Best Commercial Practices Can Improve Program 

Outcomes. GAO/T-NSIAD-99-116. Washington, D.C.: March 17, 1999. 

Defense Acquisitions: Improved Program Outcomes Are Possible. GAO/TNSIAD-98-123. Washington, D.C.: March 17, 1998.

Best Practices: Successful Application to Weapon Acquisition Requires

Changes in DOD’s Environment. GAO/NSIAD-98-56. Washington, D.C.: 

February 24, 1998. 

Best Practices: Commercial Quality Assurance Practices Offer 

Improvements for DOD. GAO/NSIAD-96-162. Washington, D.C.: August 26, 

1996. 

Page 21 GAO-08-674T (120751) 
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