Defense Acquisitions: DOD Management Approach and Processes Not Well-Suited to Support Development of Global Information Grid
Published: 2006-01-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Department of Defense (DOD) officials currently estimate that the department will spend approximately $34 billion through 2011 to develop the core network of the Global Information Grid (GIG), a large and complex undertaking intended to provide on-demand and real-time data and information to the warfighter. DOD views the GIG as the cornerstone of information superiority, a key enabler of network-centric warfare, and a pillar of defense transformation. A high degree of coordination and cooperation is needed to make the GIG a reality. In prior work GAO found that enforcing investment decisions across the military services and assuring management attention and oversight of the GIG effort were key management challenges facing DOD. This report assesses (1) the management approach that DOD is using to develop the GIG and (2) whether DOD's three major decision-making processes support the development of a crosscutting, departmentwide investment, such as the GIG.
section_title: What GAO Found
paragraphs: DOD's management approach for the GIG--in which no one entity is clearly in charge or accountable for results--is not optimized to enforce investment decisions across the department. The DOD Chief Information Officer has lead responsibility for the GIG development effort, but this office has less influence on investment and program decisions than the military services and defense agencies, which determine investment priorities and manage program development efforts. Consequently, the services and defense agencies have relative freedom to invest or not invest in the types of joint, net-centric systems that are consistent with GIG objectives. Without a management approach optimized to enforce departmentwide investment decisions, DOD is at risk of not knowing whether the GIG is being developed within cost and schedule, whether risks are being adequately mitigated, or whether the GIG will provide a worthwhile return on DOD's investment. The department's three major decision-making processes are not structured to support crosscutting, departmentwide development efforts such as the GIG. In some significant respects, the department's processes for setting requirements, allocating resources, and managing acquisitions encourage investing in systems on an individual service and defense agency basis. While the department has developed a new process for determining requirements, the framework to assess capability needs is still evolving; the new process is not yet identifying shortfalls and gaps in joint military capabilities on a departmentwide basis; and requirements-setting continues to be driven by service perspectives. In addition, the resource allocation process is structured in terms of individual service programs and outdated mission areas instead of crosscutting capabilities such as net-centricity, and it is not flexible enough to quickly accommodate requirements resulting from lessons learned or from rapidly emerging technologies. Also, the process for managing acquisitions is unsuited to developing a system of interdependent systems such as the GIG, and DOD has struggled to achieve service buy-in on joint-service development programs to address interoperability problems. Finally, the lack of integration among these three processes makes it difficult to ensure that development efforts are affordable and technically feasible.

section_title: Letter
paragraphs: Despite recent progress by the Department of Defense (DOD), military  operations continue to be hampered by command, control, and  communications systems that lack the ability to interoperate. While DOD  has been able to patch together disparate systems and networks to  facilitate communications on the battlefield, retrofitting systems after they  have already been fielded can be inefficient and is not sufficient to meet  DOD’s stated goal of achieving a networked force where soldiers, weapon  systems, platforms, and sensors are closely linked and able to operate  seamlessly together. DOD believes it can solve these interoperability  problems and achieve a networked force by developing the Global  Information Grid (GIG). The GIG is a large and complex set of programs  and initiatives intended to provide an Internet-like capability allowing  users at virtually any location to access data on demand, share information  in real time, collaborate in decision making regardless of which military  service produced which weapon system, and have greater joint command  of a battle situation.
DOD began investing in the GIG in the late 1990s. We reported in 2004 that  DOD planned to spend at least $21 billion through 2010 to develop a core  network for the GIG. Today, DOD officials estimate that the GIG  infrastructure will cost approximately $34 billion through 2011. DOD’s  investment in the GIG will extend far beyond development of the core  network, as DOD also intends to integrate the majority of its existing and  planned weapon systems, information technology systems, and other  related systems into the GIG over the long term. Accomplishing these  objectives involves developing and advancing new technologies, reaching  consensus on common standards and requirements, aligning systems with  the attributes of the GIG, and assessing whether the GIG is providing a  worthwhile return on investment.
In prior work, we identified management and investment challenges,  operational challenges, and technical challenges DOD faces in  implementing the GIG. We found that enforcing investment decisions  across the military services and assuring management attention and  oversight were key challenges facing DOD. In this report, conducted under  the authority of the Comptroller General, we further examine management  challenges by (1) assessing the management approach that DOD is using  to develop the GIG and (2) addressing whether DOD’s three major  decision-making processes support the development of a crosscutting,  departmentwide investment, such as the GIG. These major decision- making processes are the Joint Capabilities Integration and Development  System, which DOD uses to identify, assess, and prioritize military  capability needs; the Planning, Programming, Budgeting, and Execution  process, which guides how DOD allocates resources; and the Defense  Acquisition System, which governs how DOD acquires weapon and  information technology systems.  We are addressing this report to you  because we believe it will be of interest to your committees as you  consider DOD’s requests to authorize and appropriate funds for  developing the GIG.
To assess DOD’s management approach for the GIG and the extent to  which the department’s primary decision-making processes support the  GIG, we collected and reviewed (1) related legislation, directives,  instructions, and guidance; (2) DOD policies and guidance related to the  GIG and network-centric (or “net-centric”) governance; and (3)  programmatic and technical documents pertaining to core GIG systems.  We also conducted a review of relevant literature, analyzing studies on  net-centric warfare, systems interoperability, and DOD management and  investment decision making. These studies were collected from defense  and public policy research databases as well as the online collections of  DOD organizations (such as the Defense Science Board and the Joint  C4ISR Decision Support Center), individual think tanks, and congressional  agencies. We also drew upon previous GAO reports on defense  acquisition, information technology investments, and interoperability  issues. We conducted interviews with and received briefings from officials  with a number of DOD organizations (including the Office of the Secretary  of Defense; the Joint Staff; and the three military services—the  Departments of the Air Force, the Army, and the Navy) that have  responsibility for achieving the GIG. We also interviewed several subject  matter experts from academic, think tank, or consulting organizations who  have senior-level DOD experience or who have recently written on the  operation of DOD and its key decision-making processes. Additional  information on our scope and methodology is in appendix I. We conducted  our work from December 2004 through January 2006 in accordance with  generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: DOD has increasingly emphasized joint military operations where, to the  extent possible, service components are closely aligned and employed as a  single joint force. To function effectively as a joint force, DOD has come to  recognize the vital role of achieving information superiority over its  adversaries by having better access to, and greater ability to share,  information across the battlefield. In the late 1990s, the department began  to articulate a vision for network-centric (or “net-centric”) warfare in  which networking military forces improves information sharing and  collaboration, which leads to enhanced situational awareness. Enhanced  situational awareness enables more rapid, effective decisionmaking, which  in turn enables improved efficiency and speed of execution and results in  dramatically increased combat power and mission effectiveness.
A high degree of interoperability is required to achieve battlefield  information superiority. DOD defines interoperability as the ability of  systems, units, or forces to exchange data, information, materiel, and  services to enable them to operate effectively together. A lack of  interoperability can make it difficult to hit time-critical targets and  distinguish “friend” from “foe.” Figure 1 shows a scenario in which a sea- based system and a land-based system are tracking aircraft and are unable  to integrate their views of a battlefield. This lack of interoperability can  delay U.S. military response or contribute to a lethal mistake involving  U.S. personnel and equipment.
DOD has recognized that interoperable systems are critical to conducting  joint military operations and that patching systems after the fact to  improve communications is inefficient, and the department has  established policies to promote systems interoperability. However, GAO  and DOD’s Inspector General have reported in the past that these efforts  have not been very effective. For example, in the first of a series of reports  beginning in 2002, DOD’s Inspector General found that policies governing  systems interoperability were inconsistent and that without consistent  guidance the department was at risk of developing systems that lack the  ability to fully interoperate. In 2003, we found that DOD’s process for  certifying systems interoperability did not work effectively for ground- surface-based intelligence processing systems. In addition, DOD officials  have said that added emphasis on joint operations and reliance on  information technology creates an increasing requirement for more  systems to exchange information, which in turn makes achieving  interoperability among systems increasingly complex.
DOD views the GIG as the cornerstone of information superiority, a key  enabler of net-centric warfare, and a pillar of defense transformation. DOD  defines the GIG as the globally interconnected, end-to-end set of  information capabilities, associated processes, and personnel for  collecting, processing, storing, disseminating, and managing information.  The GIG’s many systems are expected to make up a secure, reliable  network to enable users to access and share information at virtually any  location and at anytime. Communications satellites, next-generation  radios, and a military installations-based network with significantly  expanded bandwidth will pave the way for a new paradigm in which DOD  expects to achieve information superiority over adversaries, much the  same way as the Internet has transformed industry and society on a global  scale. Rather than striving for interoperability through efforts to establish  direct information exchanges between individual systems, the focus of the  new paradigm will be to ensure that all systems can connect to the  network based on common standards and protocols. Figure 2 shows a  general depiction of how DOD enables data exchanges in systems that  lack the necessary connections and how DOD expects the GIG to break  through such limitations.
DOD has adopted a two-pronged approach to realizing the GIG: (1) invest  in a set of new systems and capabilities to build a core infrastructure for  the eventual GIG network (an overview of the five major acquisitions  related to the GIG’s core network are listed in app. III) and (2) populate  the network with weapon and information systems that are able to  connect when the core network infrastructure becomes available.
section_title: DOD’s Management Approach for the GIG Is Not Optimized to Make Departmentwide Investment Decisions
paragraphs: The effort to make the GIG a reality represents a different, inherently joint  type of development challenge that requires a high degree of coordination  and cooperation, but DOD is using a management approach that is not  optimized for this type of challenge. Responsibility for developing and  implementing the GIG resides with numerous entities, with no one entity  clearly in charge or accountable for investment decisions. Because the  GIG will comprise a system of interdependent systems, it needs clearly  identified leadership that has the authority to enforce decisions that cut  across organizational lines. Without a management approach optimized to  enforce investment decisions across the department, DOD is at risk of  continuing to develop and acquire systems in a stovepiped and  uncoordinated manner and of not knowing whether the GIG is being  developed within cost and schedule, whether risks are being adequately  mitigated, and whether the GIG will provide a worthwhile return on DOD’s  investment. Consequently, interoperability problems could continue to  hamper DOD in fielding a joint, net-centric force.
Development of the GIG is essentially a shared responsibility in DOD, with  no single entity both equipped with authority to make investment  decisions and held accountable for results. For example, as laid out in  policy directives, DOD’s Chief Information Officer has overall  responsibility for leadership and direction of the GIG. This includes  developing, maintaining, and enforcing compliance with the GIG  architecture; advising DOD leadership on GIG requirements; providing  enterprisewide oversight of the development, integration, and  implementation of the GIG; monitoring and evaluating the performance of  information technology and national security system programs; and  advising the Secretary of Defense and the heads of DOD components on  whether to continue, modify, or terminate such programs. However, the  Office of the Chief Information Officer generally has less influence on  investment and program decisions than the services and defense agencies,  which determine investment priorities and manage program development  efforts. Consequently, the services and defense agencies have relative  freedom to invest or not invest in the types of joint, net-centric systems  that are consistent with GIG objectives. The end result of this shared  responsibility is that neither the CIO nor the military services and defense  agencies can be held fully accountable for the department’s success or  failure in developing the GIG.
More broadly, another result of this environment of shared responsibility  is that the various offices and programs that are managing initiatives  related to the GIG do so in a disparate manner. For example, a 2002 DOD  study found that there was little unity of effort among the 80 separate  initiatives and actions under way associated with joint command and  control. The next year, DOD’s Defense Science Board reported that joint  warfighting needs—such as joint battle management and joint intelligence,  surveillance, and reconnaissance—are “neglected or spread in an  uncoordinated fashion across multiple service and defense agency  programs.” In 2004, the DOD Inspector General found that DOD lacked a  strategy to integrate its net-centric initiatives, including clearly defined  net-centric goals and organizational roles and responsibilities. In  responding to this study, DOD’s Deputy Chief Information Officer (CIO)  indicated that improvements could be made in the department’s guidance  and approach to achieving net-centric goals, but that elements of a  strategic plan have been or are being developed. However, according to  the study, management comments from other DOD entities “clearly  illustrate that DoD components needed leadership and strategic guidance  and were unaware that the… had the lead for network-centric  concepts.”  The study also found that there was a lack of common  understanding across DOD of what constitutes net-centric warfare—of  which the GIG is a key enabler. Officials we interviewed in the Office of  the Chief Information Officer stated that there is also a lack of common  understanding throughout DOD about what is included in the GIG. DOD’s  management approach to realizing joint, interoperable capabilities puts  DOD at risk of duplicated efforts and suboptimal investment outcomes for  command, control, and communications systems.
Almost 20 years ago, we identified DOD’s decentralized management  structure and the absence of an effective central enforcement authority for  joint interoperability as two causes for joint command, control, and  communications interoperability problems experienced in past military  operations. We concluded that solving the interoperability problem would  require “a great deal” of cooperation among the services and a willingness  among them to pursue interoperability even when it conflicts with their  traditional practices. In 1993, we found DOD had not made significant  progress in improving on this situation. We recommended that DOD  establish a joint program office with directive authority and funding  controls for acquiring command, control, and communications systems  and that DOD consolidate responsibility for interoperability in U.S.  Atlantic Command (now U.S. Joint Forces Command). DOD responded  that our recommendations would unnecessarily complicate DOD  management, and DOD stated that planned and recently implemented  policy, procedural, and organizational changes intended to address the  problem needed time to take effect.
In recent years, however, DOD has recognized that its approach to  developing and fielding command, control, and communications systems  was somewhat disjointed. In an effort to improve the situation, DOD  tasked Joint Forces Command in 2003 to lead the development of  advanced, integrated joint battle management command and control  (JBMC2) capabilities departmentwide. While Joint Forces Command was  given responsibilities to lead this effort, it does not control the resources  for materiel solutions, and the command may not have sufficient influence  over the services’ resource decisions to ensure the assessment framework  it has developed for improving JBMC2 capabilities will be executed  effectively. The framework for specific mission areas within JBMC2 will  begin to be implemented in 2006, but formal agreements involving  resourcing and level of service participation in these assessments have  not yet been worked out. In addition, in 2004, the Joint Staff initiated the  Net-Centric Operating Environment project in part to improve  coordination of the GIG core network systems currently under  development. The Joint Staff has proposed options to establish a stronger  joint management structure for these systems, such as placing them under  a single acquisition authority, and this analysis is being considered as part  of DOD’s Quadrennial Defense Review effort. In the meantime, a study  released in 2005 by the Center for Strategic and International Studies, a  bipartisan think tank, reiterates the need for DOD to instill a greater joint  focus in its management approach to achieving systems interoperability by  transferring budget and acquisition authority for joint command, control,  and communications from the services to a single joint entity.
In the broader context of defense transformation—of which the GIG is a  key component—we have pressed DOD to adopt a more centralized  management approach to integrate and improve its business processes,  human capital, and military capabilities. In 2004, we reported that no one  person or entity had overarching and ongoing leadership responsibilities  or accountability for the department’s transformation efforts, and we  recommended that DOD establish clear leadership and a formal  crosscutting transformation team with the responsibility for overseeing  and integrating DOD’s transformation strategy and the authority to  perform these responsibilities. DOD disagreed with our recommendations,  indicating that the Secretary of Defense provides the leadership needed  and that a crosscutting transformation team would represent an unneeded  and confusing bureaucratic layer. However, we pointed out that (1) the  day-to-day demands placed on the Secretary of Defense make it difficult  for him to personally maintain the oversight, focus, and momentum  needed to sustain transformation efforts and (2) that without a  crosscutting team, DOD has no routine vehicle for maintaining a continued  focus on transformation goals and no mechanism for resolving  implementation issues that may arise. Similarly, to address problems DOD  has long faced in managing its business systems and to guide the  department’s business transformation efforts, we have proposed that DOD  establish a more centralized management structure to control the  allocation and execution of funds for DOD business systems. Specifically,  due to the complexity and long-term nature of business transformation  efforts, we reported that strong and sustained executive leadership is  needed if DOD is to succeed. We believe one way to ensure strong,  sustained leadership for DOD’s business management reform efforts  would be to create a full-time, senior executive position for a chief  management official, who would serve as the Deputy Secretary of Defense  for Management. This position would serve as a strategic integrator to  elevate and institutionalize the attention essential for addressing key  stewardship responsibilities, such as strategic planning, enterprise  architecture development and implementation, information technology  (IT), and financial management, while facilitating the overall business  management transformation within DOD. DOD’s position has been that the  Deputy Secretary of Defense has the requisite position, authority, and  purview to perform the functions of a Chief Management Officer. Although  DOD has recently begun taking some positive steps to transform the  department’s business operations, including establishing the Business  Transformation Agency in 2005, we continue to believe that a Chief  Management Officer position may better ensure that overall business  transformation is implemented and sustained.
section_title: DOD’s Key Decision- Making Processes Are Not Designed to Support Investments in Crosscutting Efforts Such as the GIG
paragraphs: DOD’s major decision-making processes are not structured to support  crosscutting, departmentwide efforts such as the GIG. In some significant  respects, the processes remain configured for investing in weapon and  information systems on an individual service and defense agency basis. In  addition, the department’s new process for determining requirements is  still evolving, and it is not yet identifying shortfalls and gaps in joint  military capabilities on a departmentwide basis. The resource allocation  process remains structured in terms of individual service programs and  outdated mission areas instead of crosscutting capabilities such as net- centricity, and it is inflexible in terms of accommodating emerging near- term requirements and rapidly advancing technologies. DOD’s acquisition  process continues to move programs forward without sufficient  knowledge that their technologies can work as intended; consequently,  systems cost more and take longer to develop than originally planned and  deliver less capability than initially promised. In addition, the acquisition  process is not well suited to managing interdependencies among programs  and fostering joint-service cooperation in development of weapon and  information systems. Finally, the lack of integration among the three  processes makes it difficult to ensure that development efforts are  affordable and technically feasible.
The three processes assessed in this report are the Joint Capabilities  Integration and Development System (JCIDS); the Planning, Programming,  Budgeting, and Execution (PPBE) process; and the Defense Acquisition  System.
subsections: section_title: JCIDS Process Not Yet Providing Departmentwide Assessment of Military Requirements
paragraphs: Implemented in 2003, JCIDS is intended to enhance the process DOD  uses to identify, assess, and prioritize joint military requirements, but  service perspectives continue to drive requirements setting, a condition  that has tended to impede the development of interoperable systems in the  past. JCIDS is not yet identifying shortfalls and gaps in existing and  projected joint military capabilities on a departmentwide basis, and the  analytical framework that underpins JCIDS (capability-based assessments)  is still evolving. Without crosscutting, department-level assessments, DOD  is limited in its ability to develop a departmentwide investment strategy to  support development of the net-centric systems critical to the GIG.
JCIDS replaced the approximately 30-year-old Requirements Generation  System, which DOD states frequently resulted in systems that were service  rather than joint-focused, programs that duplicated each other, and  systems that were not interoperable. Under this process, requirements  were often developed by the services as stand-alone solutions to counter  specific threats and scenarios. In contrast, JCIDS is designed to identify  the broad set of capabilities that may be required to address the security  environment of the 21st century. In addition, requirements under the  JCIDS’ approach are intended to be developed from the “top-down,” that  is, starting with the national military strategy, whereas the former process  was “bottom up,” with requirements growing out of the individual services’  unique strategic visions and lacking clear linkage to the national military  strategy. The Joint Requirements Oversight Council (JROC) has overall  responsibility for JCIDS and is supported by eight Functional Capabilities  Boards, which lead the capabilities-based assessment process.
The requirements process remains service-focused to a significant extent.  For example, the four members of the Joint Requirements Oversight  Council are the services’ Vice Chiefs of Staff and the Assistant  Commandant of the Marine Corps, an arrangement some studies contend  grants too much influence to the services in setting requirements. The  services are force providers—they supply the forces and develop the  systems for military operations—but combatant commanders conduct  joint military operations and thus represent the demand side of the  requirements process. Combatant commanders are not, however,  members of the Joint Requirements Oversight Council, and analyses  conducted both prior to and following the implementation of JCIDS  recommend either replacing the current members with representatives  from the combatant commands or enlarging the Council to include such  representatives. DOD has included representatives from the combatant  commands on the Functional Capabilities Boards, along with  representatives from nine other organizations (under the former  requirements process, only representatives from the military services and  the Defense Intelligence Agency served in a similar capacity). DOD  officials indicate, however, that combatant commander participation on  the boards is in reality limited and of ongoing concern, and a July 2005  Joint Forces Command briefing indicates that, so far, the combatant  commands’ requirements do not drive the requirements process. In May  2005, DOD introduced a new mechanism for the combatant commands to  identify capability gaps, and a DOD official told us the combatant  commands are embracing this opportunity. However, the official also  indicated that much requirements setting continues to be driven by the  services at this point and that it is unclear how the services will respond to  this type of input from the combatant commands.
The JCIDS process is still evolving. A key enabler for capability  assessments under JCIDS are joint concepts, which are visualizations of  future operations that describe how a commander might employ  capabilities to achieve desired effects and objectives. The majority of the  joint concepts have completed an initial phase of development, but they  continue to be evaluated and revised. These concepts are intended to  describe future capability needs in sufficient detail to conduct a  capabilities-based assessment, which is the methodology through which  capability gaps and excesses are identified. A Joint Staff official states that  capability-based assessment continues to be refined daily and has yet to  produce a common framework or set of rules. At present, it can take  several years to conduct a capabilities-based assessment under JCIDS,  which is too slow according to a Joint Staff official associated with the  process. However, the biggest challenge posed by a change such as JCIDS  may be a cultural one: Joint Staff officials stated that the services are  struggling with JCIDS, and the officials observed that the new process  requires the services to change their behavior and think in a joint way.
JCIDS is not yet functioning as envisioned to define gaps and  redundancies in existing and future military capabilities across the  department and to identify solutions to improve joint capabilities. At this  point, requirements continue to be defined largely from the “bottom up”— by the services—although DOD uses the JCIDS framework to assess the  services’ proposals and push a joint perspective. The importance of  defining capability needs and solutions from a crosscutting, department- level perspective was highlighted in a prominent 2004 study chartered by  the Secretary of Defense, which stated that “a service focus does not  provide an accurate picture of joint needs, nor does it provide a consistent  view of priorities and acceptable risks across DOD.”  The study observed  that the analytical capability for determining requirements largely resides  in the military services, and it recommended that analyses of both joint  needs and solutions to meet those needs be conducted at the department- level (in collaboration with the combatant commands, Joint Staff, defense  agencies, services, and Office of the Secretary of Defense).
section_title: Resource Allocation Process Does Not Support Crosscutting Investments
paragraphs: The resource allocation process is not structured to facilitate investments  in crosscutting capabilities such as the GIG. Unlike JCIDS, the resource  allocation process is structured in terms of individual service and defense  agency programs rather than in terms of joint capability areas, such as net- centricity. In this structure, the military services have come to dominate in  the development of the DOD budget, designing their programs and budgets  based more on individual, service-focused systems than on crosscutting  capabilities with broad joint utility. In part, this situation reflects the  persistence of a service-centric culture rooted in the services’  interpretation of their Title 10 authority to organize, train, and equip  military forces. This resource allocation culture has contributed to DOD’s  interoperability problems and made it difficult to capitalize on rapid  advancements in information technology that can improve joint  operational effectiveness.
The predecessor to PPBE was the Planning, Programming, and Budgeting  System (PPBS), established in the early 1960s to be DOD’s central  strategic planning, program development, and resource allocation  decision-making process. DOD expected the system to align the  department’s investments in defense programs with overarching national  security objectives and military strategy, integrating the previously  unrelated programs and budgets of the military services into a coherent  program and budget for DOD as a whole. One of the central products of  this system was the multiyear Five Year Defense Plan (FYDP), which the  Secretary of Defense could use to assess each military service’s  contribution to DOD’s overall capability in crosscutting mission areas,  termed as Major Force Programs. By categorizing service programs into a  structure of Major Force Programs, the FYDP was intended to give the  Secretary of Defense visibility over the totality of DOD’s capabilities, and  thus enable the Secretary to make trade-off decisions among service  investments in support of overall DOD objectives. The PPBS process fell  short of these expectations in several respects:    The services and defense agencies tended to receive the Secretary’s  planning guidance after they had begun preparing their proposed  programs and budgets, and the guidance has been criticized for not  clearly articulating DOD funding priorities, reflecting resource  constraints, containing performance measures, or providing enough  detail to be useful. Together, these factors contributed to the services’  latitude to define their own investment priorities independent of the  Secretary’s stated objectives.
The Office of the Secretary of Defense reviews of the services’ program  and budget submissions occurred late in the process. As a result,  opportunities to build joint priorities (such as interoperable systems)  into the services’ program and budget submissions were limited, and  joint initiatives were often addressed late in the process when it was  more difficult to make changes.
PPBS was structured to allocate resources to meet longer-term, more  predictable needs, which made it difficult to accommodate (1) near- term requirements such as those identified by combatant commanders  based on lessons learned from recent or ongoing military operations  and (2) rapidly advancing technologies. For example, commercially  developed information technology tends to advance quickly, and it has  been difficult to plan for advances in these technologies through the  normal planning and budget process.
PPBS was not well integrated with the requirements determination and  acquisitions processes to ensure that development efforts were  affordable and technically feasible. For example, more acquisition  programs are started than DOD can afford, with the result that many  programs must compete for funding. This situation in turn creates  incentives to produce overly optimistic cost and schedule estimates  and to over promise capability.
The Major Force Programs that comprise the FYDP have changed little  since the inception of PPBS in the early 1960s, despite changes in the  operational environment and the emergence of strategic objectives  such as the GIG. Some observers have recommended that the major  program areas be substantially reconfigured to focus service programs  on transformation initiatives, including creating a Major Force Program  dedicated to C4ISR programs. In prior work, GAO also found that the  FYDP did not provide visibility over some high-priority items, including  information technology. Information technology investments as an  area of funding are difficult to identify in the DOD budget, and the  Office of the Secretary of Defense reports separately to Congress and  OMB on DOD’s information technology expenditures. However, we  have found material inconsistencies, inaccuracies, or omissions that  limit the reliability of this reporting effort.
In an effort to streamline the process and make it more efficient, DOD  revised PPBS in 2001 to make department-level reviews of service and  defense agency programs and budgets concurrent rather than sequential.  In 2003 DOD further revised the process to increase its effectiveness and  emphasize budget execution by requiring a full budget development cycle  every other year rather than every year. DOD named the revised process  the Planning, Programming, Budgeting and Execution process. These  recent changes have not addressed some of the characteristics of the  process that in the past made it difficult to address joint needs—such as  systems interoperability:    The services and defense agencies continue to have control over  resources for command, control, and communications systems critical  to the GIG, a condition that has in the past fostered development of  service-specific systems with limited interoperability. As a DOD-wide  interoperability solution, however, the GIG represents a different type  of development challenge that requires a more cooperative, joint  investment approach than has been typical of DOD in the past. If those  who are responsible and accountable for the success of the GIG do not  have control over resources, the department may continue to employ a  stovepiped approach to investing in systems, and thus fail to  fundamentally improve interoperability outcomes.
PPBE is still not sufficiently integrated with the requirements and  acquisition processes. In addition, the requirements determination  process is now structured in terms of capabilities, but the resource  allocation process continues to be structured in terms of individual  service and defense agency programs rather than capability areas (such  as net-centricity). Also, the Major Force Programs established with the  FYDP remain virtually unchanged and no longer adequately reflect the  needs of current and future missions.
The PPBE process is still not flexible enough to quickly accommodate  emerging technologies or requirements resulting from lessons learned.  In recent years, some budgetary flexibility has been created through  such mechanisms as the congressionally established Limited  Acquisition Authority granted to U.S. Joint Forces Command to meet  urgent, unanticipated warfighting needs. However, because there are  no funds budgeted for this authority, the command has faced  challenges in finding funding for projects.
In response to GAO recommendations, DOD has issued a policy and taken  initial steps toward implementing a portfolio-based management approach  to investing in information technology systems. However, DOD was slow  to formalize its policy, and it is too early to assess its effectiveness. DOD  believes that managing its information technology investments by mission- oriented portfolios—a concept emphasized in the commercial sector— will (1) ensure information technology investments support the  department’s vision, mission, and goals; (2) ensure efficient and effective  delivery of capabilities to the warfighter; and (3) maximize the return on  DOD’s investment. However, the DOD directive establishing information  technology portfolio management indicates that portfolio management  processes must work within the bounds of DOD’s three major investment  decision-making processes. Given this guidance and the limitations of the  PPBE process, it is unclear whether portfolio managers would be  sufficiently empowered to meaningfully influence DOD components’  information technology investments.
section_title: Acquisition Process Not Suited to Managing Interdependent Programs
paragraphs: DOD has taken various steps in recent years to improve acquisition  outcomes and focus acquisition decision-making on developing joint, net- centric systems, but the Defense Acquisition System remains essentially  structured to support investments in service-oriented systems. To  effectively develop the GIG and enable net-centric capabilities, the  acquisition process must ensure that programs critical to the GIG not only  achieve desired cost, schedule, and performance objectives, but—because  the programs are interdependent and must work together to deliver a  capability—it must also ensure that their development is closely  synchronized and managed. In addition, to be interoperable, systems must  be developed from a joint perspective and aligned with the architecture,  standards, and data strategies established for the GIG. Further, the  acquisition process must be adaptive to keep pace with the rapid advances  that have taken place with information technology in recent years.
Although DOD produces the best weapons in the world, GAO has found  that the department’s acquisition process has long been beset by problems  that cause weapon systems to cost more, take longer to develop and field,  and deliver less capability than originally envisioned. In recent years, we  recommended that DOD adopt a knowledge-based approach to  acquisitions that reduces risk by attaining high levels of knowledge in  three elements of a new product—technology, design, and production—at  key consecutive junctures in development.
DOD has taken steps in recent years to address these issues. In May 2003,  DOD issued a revised acquisition policy that incorporated knowledge- based and evolutionary acquisition principles employed by leading  commercial companies, with the aim of fostering greater efficiency and  flexibility and reducing risk in the development and acquisition of weapon  systems.  The revised policy requires program managers to reduce risk by  demonstrating attainment of essential knowledge at key program  junctures and establishes as DOD’s preferred strategy developing systems  incrementally, an approach in which the customer may not get the  ultimate capability right away, but the product is available sooner and at a  lower cost. However, we continue to see many programs move forward  with a high degree of risk. For example, programs that are critical to the  GIG, such as the Joint Tactical Radio System (JTRS) and Transformational  Satellite Communications System (TSAT), have progressed without  sufficient knowledge that their technologies could work as intended.  Consequently, these programs have faced cost, schedule, and performance  issues that have complicated DOD’s efforts to deliver these key GIG  components as originally planned.
Under the Defense Acquisition System, programs that are intended to  produce interdependent systems are too often managed independently  rather than as a system of systems. With increased efforts to promote net- centric capabilities, key transformational systems under development  depend on capabilities being provided by other acquisition programs.  However, DOD program management and acquisition oversight tend to  focus on individual programs and not necessarily on synchronizing  multiple programs to deliver interdependent systems at the same time, as  required to achieve the intended capability. This focus has affected some  recent DOD efforts to develop such systems of systems. We recently  reported, for example, that the Army’s effort to develop a high-capacity  communications network for higher-level command units, a program  called the Warfighter Information Network-Tactical (WIN-T), was at risk  because critical capabilities to be provided by other programs—unmanned  aerial vehicles—may not be available when needed (one platform was not  adequately funded for a dedicated communications capability and the  other was still in the concept development phase). In addition, the Army’s  Future Combat Systems program is at risk because its development  schedule is not consistent with the fielding schedules for the Joint Tactical  Radio Systems, on which it is critically dependent.
Although DOD has acknowledged the growing importance of  interoperability and recognizes the corresponding need to improve joint  coordination in acquisitions, the military services continue to develop and  acquire systems that have limited interoperability with other systems on  the battlefield. This condition persists in part because the military services  have traditionally focused on developing and acquiring systems to meet  their own specific missions and have placed relatively less emphasis on  developing and acquiring the types of interoperable systems needed to  meet the demands of joint operations. Consequently, systems have often  been developed to perform service-specific tasks and to support vertical  exchanges of information. Rather than being developed around integrated  architectures and common standards, systems have been designed and  developed using different standards and protocols, and operate in  different portions of the radio-frequency spectrum.
DOD has had policies in place for several years to improve systems  interoperability, including the designation of interoperability as a key  performance parameter for all systems that exchange information and  required testing for interoperability, but recent military operations have  shown that interoperability problems persist. Recently, DOD has  introduced new initiatives to improve interoperability and focus on the  need for joint, net-centric systems. For example, in 2003, DOD replaced  the requirement for an interoperability key performance parameter with a  net-ready key performance parameter. Whereas the interoperability key  performance parameter sought to ensure a system could exchange  information directly with several other systems, the new net-ready key  performance parameter requires a system to be able to exchange  information with the “network.” In addition, DOD’s Chief Information  Officer launched a net-centric program review effort in 2004, intended to  improve the department’s focus on developing systems with net-centric  attributes. While these efforts represent some commitment by DOD to  improving the interoperability of the systems it develops and acquires,  they may be of limited value unless interdependent programs are managed  more effectively.
One mechanism DOD has used for a relatively longer period of time to  help address the systems interoperability problem is combining similar  service requirements into joint-service development programs in an effort  to ensure closer up-front coordination between services and to realize  economic efficiencies. However, in practice the department has long  struggled to achieve service buy-in, which is essential to joint acquisition  success. For example, in 2003 we reported that the Joint Tactical Radio  System program had difficulty getting the military services to agree on  joint requirements and funding necessary to execute the program. We  further found that the lack of joint-service cooperation on the program  hampered production of necessary program documents such as the  concept of operations and migration plans and that together these factors  caused schedule delays.  In the meantime, the Army made unplanned  purchases of additional legacy radios to meet operational needs. We  recommended that DOD strengthen the joint-program management  structure by establishing centralized program funding, realigning the Joint  Program Office under a different organizational arrangement, and placing  the cluster development programs under the Joint Program Office. In the  fiscal year 2004 National Defense Authorization Act, Congress directed  DOD to take steps consistent with most of our recommendations.  Similarly, DOD’s efforts to develop a Single Integrated Air Picture  capability—whereby airborne tracking information from different sensor  systems can be fused into a single picture—have also encountered joint  management challenges. Although Joint Forces Command was given new  oversight responsibilities in 2003 to promote stronger joint management of  the Single Integrated Air Picture development effort, it has been difficult,  according to officials from Joint Forces Command and the Single  Integrated Air Picture program office, to resolve differences with the  services regarding requirements and funding.
While DOD’s acquisition policy now includes knowledge-based and  evolutionary acquisition principles, the acquisition system operates too  slowly and is too inflexible to keep pace with the rapid development of  communications technologies essential to modern, interoperable  command, control, and communications systems. For example, the  National Research Council found in 1999 that the program management  and oversight processes of the acquisition system operate on metrics  optimized for weapon system acquisitions in which underlying  technologies change more slowly than do the information technologies  essential to modern command, control, and communications systems.  The study concludes that metrics oriented to long acquisition cycles and  full performance capability often do not allow for the timely integration of  commercial technologies into command, control, and communications  systems.  More recently, in a 2002 study, DOD’s Joint C4ISR Decision  Support Center concluded that technology for joint command and control  capabilities progresses by a generation or more before the acquisition  system can field them. The end result of these problems is that the  acquisition system is not sufficiently responsive to warfighter needs for  interoperable systems. DOD entities have developed short-term  interoperability solutions (e.g., a communications network—the Joint  Network Transport Capability—deployed to Iraq in 2004) and invested  supplemental appropriations in legacy (largely commercial off-the-shelf)  command, control, and communications systems urgently needed on the  battlefield (e.g., in fiscal year 2005, Congress appropriated $767 million in  supplemental funds for the legacy SINCGARS radios).
section_title: Conclusion
paragraphs: DOD’s current approach to developing the GIG does not foster the level of  coordination and cooperation needed to make the GIG a reality. DOD’s  management approach for the GIG effort and the department’s decision- making processes contain fundamental structural impediments to success  that recent changes to them have not been able to overcome. In fact, these  vertically-oriented or “stovepiped” ways of doing business have helped  perpetuate the very interoperability problem that the GIG is intended to  overcome. We believe DOD will not be successful in “horizontal” or  crosscutting initiatives such as the GIG unless it substantially changes its  decentralized management approach and the service-centric, poorly  integrated processes it uses to make investment decisions. The stakes are  high. Management inefficiencies that were accepted as the cost of doing  business in the past could jeopardize crosscutting efforts like the GIG  because greater interdependencies among systems will mean that  problems in individual development programs will ripple through to other  programs, having a damaging effect on the overall effort. In addition, the  likelihood of slowed growth and perhaps even reductions in DOD’s future  budgets that may result from the nation’s long-term fiscal imbalance will  limit the department’s ability to mitigate the impact of these problems with  additional budgetary resources. Without significant change in DOD’s  management approach and processes, we believe the department will not  be able to achieve the GIG as envisioned and may have to settle for a  different, more expensive solution farther out in the future than planned.
section_title: Recommendations for Executive Action
paragraphs: To better accommodate the crosscutting nature of the GIG development  effort, we recommend DOD adopt a management approach that will  ensure a joint perspective is taken. In doing so, DOD should   (1) consolidate responsibility, authority, and control over   resources—within the existing management structure or in a new   entity—necessary to enforce investment decisions that cut across  organizational lines and (2) hold the organization accountable for ensuring  the objectives of the GIG are achieved.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD concurred with our  findings and recommendation (DOD’s letter is reprinted in app. II). In  commenting on our recommendation, however, DOD noted that  Department of Defense Directive 5144.1 (May 2, 2005) indicates that the  DOD Chief Information Officer is responsible for integrating information  and related activities and services across the department. While this  directive is intended to help strengthen the department’s management of  investments such as the GIG, we remain concerned that the responsibility,  authority, and accountability for developing the components of the GIG  reside among many organizational entities across the department. DOD  also noted in its comments that Department of Defense Directive 8115.01  (October 10, 2005) establishes policy for managing information technology  by portfolios and that this portfolio approach should provide a critical tool  for improving integration across the department’s major decision support  systems (JCIDS, PPBE, and the Defense Acquisition System). We agree  that the concept of portfolio management holds promise; however, we are  not confident that DOD will be able to effectively implement the policy  unless it substantially changes its decision-making processes and ensures  that portfolio managers are sufficiently empowered to influence DOD  components’ information technology investment decisions.
We are sending copies of this report to the Secretary of Defense; the  Secretaries of the Air Force, Army, and Navy; the Assistant Secretary of  Defense for Networks and Information Integration; the Under Secretary of  Defense for Acquisition, Technology, and Logistics; the Under Secretary of  Defense (Comptroller); the Director of the Defense Information Systems  Agency; and interested congressional committees. We will provide copies  to others on request. This report will also be available at no charge on  GAO’s Web site at http://www.gao.gov.
If you have any questions about this report or need additional information,  please call me at (202) 512-4841 (sullivanm@gao.gov). Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix V.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the Department of Defense’s (DOD) management approach for  the Global Information Grid (GIG) and the extent to which the  department’s primary decision-making processes support the GIG, we  collected and reviewed (1) related legislation, directives, instructions, and  guidance; (2) DOD policies and guidance related to the GIG and network- centric (or “net-centric”) governance; and (3) programmatic and technical  documents pertaining to core GIG systems. We also conducted a review of  relevant literature, analyzing studies on net-centric warfare, systems  interoperability, and DOD management and investment decision making.  We conducted this literature review by searching several types of  databases using such search terms as Joint Capabilities Integration and  Development System; Planning, Programming, Budgeting, and Execution  process; Defense Acquisition System; interoperability; jointness;  requirements; defense budget; Global Information Grid; etc. The databases  were:  the Defense Technical Information Center (DTIC) database, which  collects thousands of research and development project summaries  from defense organizations;    Policy File, which provides abstracts and full-text articles on public  policy research and analysis from research organizations, think tanks,  university research programs, and publishers; and    Dialog Defense Newsletters, which contains full-text newsletters on  defense companies, products, markets, technologies, and legislation.
We identified related analyses by searching online archives at GAO,  individual think tanks such as RAND, and congressional agencies. We also  individually searched online collections of various DOD organizations,  including the Defense Science Board, the Office of Force Transformation,  the Quadrennial Defense Review, and the Joint C4ISR Decision Support  Center. We examined the selected documents to identify the positions  taken within them regarding the nature and causes of problems related to  interoperability, jointness, and DOD’s decision-making processes. We  placed these results in a series of matrices to identify commonalities in the  literature—such as concerns about organizational structure and the lack  of integration among the three decision-making processes—and we used  this synthesis to develop and support our findings.
In addition, we conducted interviews with and received briefings from  officials with a number of DOD organizations (including the Office of the  Secretary of Defense; the Joint Staff; and the three military services—the  Departments of the Air Force, the Army, and the Navy) that have  responsibility for achieving the GIG. We also interviewed several subject  matter experts (from academic, think tank, or consulting organizations)  who have senior-level DOD experience or who have recently written on  the operation of DOD and its key decision-making processes.
We conducted our work from December  2004 through January 2006 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: Five Major Acquisitions Related to the Core GIG Network and Information Capability
paragraphs: Appendix III: Five Major Acquisitions Related  to the Core GIG Network and Information  Capability To develop satellites to serve as the cornerstone of a new  DOD communications infrastructure and provide high  bandwidth connectivity to the warfighter. Some of the  technologies that TSAT plans to use are laser cross-links,  space-based data processing and Internet routing  systems, and highly agile multibeam/phased array  antennas.
Joint Tactical Radio System (JTRS)  To develop family of software-defined radios to  interoperate with different types of existing radios and  significantly increase voice, data, and video  communications capabilities.
To provide additional bandwidth and information access at  key military installations within the United States and  overseas via a combination of acquiring bandwidth from  commercial providers as well as extending fiber optic  networks to bases and installations that are located away  from commercial networks.
To enable network users to identify, access, send, store,  and protect information. Also to enable DOD to monitor  and manage network performance and problems. Is  expected to require development of new capabilities and  tools for tagging data so it is useful, providing users with  capability to identify relevant information based on content  and allowing users to freely exchange and collaborate on  information.
To enable DOD to protect the network and sensitive  information. To provide information assurance and  encryption support, including cryptography equipment  (e.g., Internet protocol encryptors), firewalls, intrusion  detection systems, etc.
section_title: Appendix IV: Joint Family of Concepts
subsections: section_title: Capstone Concept for Joint Operations
paragraphs: The overarching concept of the joint family of concepts. It broadly  describes how the joint force is expected to operate in the mid- to far- term, reflects enduring national interests derived from strategic guidance,  and identifies the key characteristics of the future joint force.
section_title: Joint Operating Concepts (JOC)
paragraphs: Describe how a Joint Force Commander will accomplish a strategic  mission through the conduct of operational-level military operations  within a campaign.
section_title: Joint Functional Concepts (JFC)
paragraphs: Describe how the future joint force will perform a particular military  function across the full range of military operations.
section_title: Joint Integrating Concepts
paragraphs: Distill JOC- and JFC-derived capabilities into the fundamental tasks,  conditions, and standards of how a joint force commander will integrate  capabilities to generate effects and achieve an objective in 10 to 20 years.
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, staff making key contributions to  this report were John Oppenheim, Assistant Director; Marie Ahearn; Lily  Chin; Joel Christenson; Lauren M. Jones; Ron Schwenn; Jay Tallon; Hai  Tran; and Susan Woodward.