Weapons Acquisition: DOD Should Strengthen Policies for Assessing Technical Data Needs to Support Weapon Systems
Published: 2006-07-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: A critical element in the life cycle of a weapon system is the availability of the item's technical data--recorded information used to define a design and to produce, support, maintain, or operate the item. Because a weapon system may remain in the defense inventory for decades following initial acquisition, technical data decisions made during acquisition can have far-reaching implications over its life cycle. In August 2004, GAO recommended that the Department of Defense (DOD) consider requiring program offices to develop acquisition strategies that provide for future delivery of technical data should the need arise to select an alternative source for logistics support or to offer the work out for competition. For this review, GAO (1) evaluated how sustainment plans for Army and Air Force weapon systems had been affected by technical data rights and (2) examined requirements for obtaining technical data rights under current DOD acquisition policies.
section_title: What GAO Found
paragraphs: The Army and the Air Force have encountered limitations in their sustainment plans for some fielded weapon systems because they lacked needed technical data rights. The lack of technical data rights has limited the services' flexibility to make changes to sustainment plans that are aimed at achieving cost savings and meeting legislative requirements regarding depot maintenance capabilities. GAO identified seven weapon system programs that encountered such limitations--C-17, F-22, and C-130J aircraft, Up-armored High-Mobility Multipurpose Wheeled Vehicle, Stryker family of vehicles, Airborne Warning and Control System aircraft, and M4 carbine. Although the circumstances surrounding each case were unique, earlier decisions made on technical data rights during system acquisition were cited as a primary reason for the limitations subsequently encountered. As a result of the limitations encountered, the services had to alter their plans for developing maintenance capability at public depots, developing new sources of supply to increase production, or soliciting competitive offers for the acquisition of spare parts and components to reduce sustainment costs. For example, the Air Force identified a need to develop a core maintenance capability for the C-17 at government depots to ensure it had the ability to support national defense emergencies, but it lacked the requisite technical data rights. To mitigate this limitation, the Air Force is seeking to form partnerships with C-17 sub-vendors. However, according to Air Force officials, some sub-vendors have declined to provide the needed technical data needed to develop core capability. Although GAO did not assess the rationale for the decisions made on technical data rights during system acquisition, several factors, such as the extent the system incorporates technology that was not developed with government funding and the potential for changes in the technical data over the weapon system's life cycle, may complicate program managers' decisions. Current DOD acquisition policies do not specifically address long-term technical data rights for weapon system sustainment. For example, DOD's policies do not require program managers to assess long-term needs for technical data rights to support weapon systems and, correspondingly, to develop acquisition strategies that address those needs. DOD, as part of the department's acquisition reforms and performance-based strategies, has deemphasized the acquisition of technical data rights. Although GAO has recommended that DOD emphasize the need for technical data rights, DOD has not implemented these recommendations. The Army and the Air Force have recognized weaknesses in their approaches to assessing and securing technical data rights and have begun to address these weaknesses by developing more structured approaches. However, DOD acquisition policies do not facilitate these efforts. Unless DOD assesses and secures its rights for the use of technical data early in the weapon system acquisition process when it has the greatest leverage to negotiate, DOD may face later challenges in sustaining weapon systems over their life cycle.

section_title: Letter
paragraphs: A critical element in the life cycle of a weapon system is the availability of  the item’s technical data—that is, recorded information used to define a  design and to produce, support, maintain, or operate the item.  The  Department of Defense (DOD) negotiates its rights to weapon system  technical data when it contracts with defense equipment manufacturers.   During the acquisition process, DOD determines what technical data rights  it requires from the manufacturer in order to meet its future weapon  support needs.  Because a weapon system may remain in the defense  inventory for decades following initial acquisition, decisions made at the  time of acquisition can have far-reaching implications for weapon system  support over the system’s life cycle, and the failure to negotiate adequate  technical data rights may impede the government’s ability to sustain the  weapon system.  For example, DOD would need technical data rights to  develop new sources of supply, to recompete follow-on procurements of  equipment, or to develop depot-level maintenance capabilities.  In an  August 2004 report, we recommended that DOD consider requiring  program offices to develop acquisition strategies that provide for a future  delivery of technical data should the need arise to select an alternative  source for logistics support or to offer the work out for competition.  DOD  concurred with our recommendation.
This report responds to a provision in a House Report for the fiscal year  2006 Defense Authorization Bill that we follow up on our August 2004  report and review DOD’s technical data policies affecting the sustainment  of fielded weapon systems, as well as other issues related to technical data.   In February 2006, we briefed your offices on our preliminary observations  (see app. I). This report updates and expands on the information in that  briefing and provides recommendations to the Secretary of Defense.   Specifically, our objectives were to (1) evaluate how Army and Air Force  sustainment plans for fielded weapon systems had been affected by  technical data rights and (2) examine requirements for obtaining technical  data rights under current DOD acquisition policies.  The House Report also  asked us to review the military services’ access to technical data to support  field maintenance of weapon systems and to examine the costs for gaining  such access.  These issues are addressed in appendix I.
To conduct our review, we met with Army and Air Force acquisition and  logistics officials to identify sustainment plans for fielded weapon systems  that may have been affected by the technical data rights available to the  government.  We discussed, and obtained supporting documentation on,  the circumstances surrounding these cases, the extent that a lack of  technical data rights for these systems was a factor, and the effect on the  systems’ sustainment plans.  We did not assess the rationale for the  decisions made on technical data rights during system acquisition, nor did  we determine the extent that program offices complied with acquisition  policies regarding technical data that existed at the time of the acquisition.   We analyzed current DOD acquisition policies and guidance, interviewed  DOD and service officials, and collected DOD correspondence addressing  our August 2004 recommendation.   We met with Army and Air Force  logistics officials to obtain information on their efforts to review  acquisition policies and practices regarding technical data rights.  We  determined that the data used were sufficiently reliable for our purposes.   We conducted our review from October 2005 through May 2006 in  accordance with generally accepted government auditing standards.
The Scope and Methodology section contains more detailed information  about the work we performed.
subsections: section_title: Background
paragraphs: In recent years, DOD has taken steps to improve its processes for acquiring  and sustaining weapon systems.  As part of these improvements, program  managers are now responsible for the total life-cycle management of a  weapon system, to include the sustainment of the system.  In addition,  DOD has directed weapon system program managers to develop  acquisition strategies that maximize competition, innovation, and  interoperability and the use of commercial, rather than military-unique, items to reduce costs.  Within the area of weapon system sustainment,  DOD is pursuing the use of performance-based logistics as the preferred  support strategy for its weapon systems. Performance-based logistics, a  variation on other contractor logistics support strategies calling for the  long-term support of weapon systems, involves defining a level of  performance that the weapon system is to achieve over a period of time at a  fixed cost to the government.
Technical data rights can affect DOD’s plans to sustain weapon systems  throughout their life cycle.  For example, DOD would need technical data  rights if it opts to reduce spare parts costs by developing new sources of  supply, to meet wartime surge requirements by contracting with additional  equipment suppliers, or to reduce system acquisition costs by recompeting  follow-on procurements of the equipment.  In addition, DOD may need to  develop depot-level maintenance capabilities for its weapon systems at  government depots in order to meet legislative requirements.  DOD is  required under 10 U.S.C. 2464 to identify and maintain within government- owned and government-operated facilities a core logistics capability,  including the equipment, personnel, and technical competence identified as  necessary for national defense emergencies and contingencies. Under   10 U.S.C. 2466, not more than 50 percent of the funds made available in a  fiscal year to a military department or defense agency for depot-level repair  and maintenance can be used to contract for performance by nonfederal  personnel.  These provisions can limit the amount of depot-level  maintenance that can be performed by contractors.  Finally, DOD would  also need technical data rights for a weapon system should a contractor fail  to perform, including a contractor working under a performance-based  logistics arrangement.  DOD has referred to this contingency as an “exit  strategy.”
section_title: Army and Air Force Encountered Limitations in Their Sustainment Plans for Some Fielded Weapon Systems
paragraphs: The Army and the Air Force have encountered limitations in their  sustainment plans for some fielded weapon systems because they lacked  needed technical data rights.  The lack of technical data rights has limited  the services’ flexibility to make changes to sustainment plans that are  aimed at achieving cost savings and meeting legislative requirements  regarding depot maintenance capabilities.  During our review we identified  seven weapon system programs where these military services encountered  limitations in their sustainment plans. Although the circumstances  surrounding each case were unique, earlier decisions made on technical  data rights during system acquisition were cited as a primary reason for the  limitations subsequently encountered.  As a result, the services had to alter  their plans for developing maintenance capability at public depots, new  sources of supply to increase production, or competitive offers for the  acquisition of spare parts and components to reduce sustainment costs.  In  at least three of the cases, the military service made attempts to obtain  needed technical data subsequent to the system acquisition but found that  the equipment manufacturer declined to provide the data or that acquiring  the data would be too expensive.  We did not assess the rationale for the  decisions made on technical data rights during the acquisition of these  systems.
The seven weapon system programs we identified where a lack of technical  data rights affected the implementation of sustainment plans are  summarized below:  C-17 aircraft: When the Air Force began acquisition of the C-17 aircraft,  it did not acquire technical data rights needed to support maintenance  of the aircraft at public depots.  According to a program official, the Air  Force did not consider the aircraft’s depot maintenance workload as  necessary to support DOD’s depot maintenance core capability.   Subsequently, however, the Air Force’s 2001 depot maintenance core  assessment identified the C-17 aircraft workload as necessary to  support core capability.  The Air Force determined that it did not have  the technical data rights needed to perform the required maintenance.   According to C-17 program officials, the C-17 prime contractor did not  acquire data rights for C-17 components provided by sub-vendors and  consequently was not able to provide the needed data rights to the Air  Force.  The prime contractor has encouraged its sub-vendors to  cooperate with the Air Force in establishing partnerships to accomplish  the needed core depot maintenance.   Under these partnerships, Air  Force depots would provide the facilities and labor needed to perform  the core depot maintenance work, and the sub-vendor would provide  the required technical data.  According to Air Force officials, there are  some instances where the sub-vendor is unwilling to provide the needed  technical data.  For example, in the case of the C-17’s inertial navigation  unit, the sub-vendor maintains that the inertial navigation unit is a  commercial derivative item and the technical data needed to repair the  item are proprietary.  As of April 18, 2006, the sub-vendor was declining  to provide the technical data needed to the Air Force.  Without the rights  to the technical data or a partnership with the sub-vendor, the Air Force  cannot develop a core maintenance capability for this equipment item.
F-22 aircraft:  The acquisition of the Air Force’s F-22 aircraft did not  include all of the technical data needed for establishing required core  capability workload at Air Force depots.  Early in the F-22 aircraft’s  acquisition, the Air Force planned to use contractors to provide needed  depot-level maintenance and therefore decided not to acquire some  technical data rights from sub-vendors in order to reduce the aircraft’s  acquisition cost.  Subsequently, however, the Air Force determined that  portions of the F-22 workload were needed to satisfy core depot  maintenance requirements.  The Air Force is currently negotiating  contracts for the technical data rights needed to develop depot-level  maintenance capability.  While the Air Force has negotiated contracts to  acquire technical data for four F-22 aircraft components, F-22 program  officials expressed concern that it may become difficult to successfully  negotiate rights to all components.
C-130J aircraft:  The Air Force purchased the C-130J aircraft as a  commercial item and, as such, did not obtain technical data rights  needed to competitively purchase C-130J-unique spare parts and  components or to perform depot-level maintenance core workload.   The C-130J shares many common components with earlier versions of  the C-130 for which the government has established DOD and  contractor repair sources. In 2004, the DOD Inspector General reported  that the Air Force’s use of a commercial item acquisition strategy was unjustified to acquire the C-130J aircraft.  In response to the Inspector  General’s findings and added congressional interest, the Air Force is  converting its C-130J acquisition to traditional defense system  acquisition and sustainment contracts.   However, because the Air Force  did not acquire the necessary technical data during the acquisition  process, it has less leverage to negotiate rights to data. In 2005, the Air  Force approached the aircraft manufacturer to purchase technical data  rights for C-130J-unique components, but the aircraft manufacturer  declined to sell the data rights.  Because of its lack of the needed  technical data, the Air Force is planning to establish partnerships with  C-130J sub-vendors that have technical data rights to components of the  C-130J.  Under these partnerships, Air Force depots would provide the  facilities and labor needed to perform the core depot maintenance work,  and the sub-vendors would provide the required technical data. C-130J  program officials expressed concerns that in some instances sub- vendors may not be willing to partner.  The Air Force currently expects  to develop approximately 90 partnerships with as many different  vendors on approximately 300 C-130J core candidate components.  Program officials expressed concern about the proliferation of  partnerships and said the Air Force will incur additional costs to  develop, manage, and monitor these partnerships, but they had not  determined what these costs will be.
Up-armored High-Mobility Multipurpose Wheeled Vehicles: When the  Army first developed the up-armored HMMWV in 1993, it did not  purchase the technical data necessary to develop new sources of supply  to increase production.  Army officials anticipated fielding these  vehicles to a limited number of Army units for reconnaissance and  peacekeeping purposes.   At that time, the Army did not obtain technical  data required for the manufacture of up-armor HMMWVs.  With the  increasing threat of improvised explosive devices during operations in  Iraq, demand for up-armored HMMWVs increased substantially, from  1,407 vehicles in August 2003 to 8,105 vehicles by September 2004.   According to Army officials, the manufacturer declined to sell the rights  to the technical data package.  Because of the lack of technical data  rights to produce up-armored HMMWVs, program officials explained  they were unable to rapidly contract with alternate suppliers to meet the  wartime surge requirement.
Stryker family of vehicles: When acquiring the Stryker, the Army did not  obtain technical data rights needed to develop competitive offers for the  acquisition of spare parts and components.  Following the initial  acquisition, the program office analyzed alternatives to the interim  contractor support strategy for the weapon system and attempted to  acquire rights to the manufacturer’s technical data package.  The  technical data package describes the parts and equipment in sufficient  technical detail to allow the Army to use competition to lower the cost  of parts.  The contractor declined to sell the Stryker’s technical data  package to the Army.  Further, according to an Army Audit Agency  report, the project office stated that the cost of the technical data, even  if available, would most likely be prohibitively expensive at this point in  the Stryker’s fielding and would likely offset any cost savings resulting  from competition.
Airborne Warning and Control System aircraft:  The Air Force lacked  technical data for the AWACS needed to develop competitive offers for  the purchase of certain spare parts.  When the Air Force recently  purchased cowlings (metal engine coverings) for the AWACS, it did so  on a noncompetitive, sole-source basis.  The Defense Contract  Management Agency recommended that the cowlings be competed  because the original equipment manufacturer’s proposed price was not  fair and reasonable and because another potential source for the part  was available.  Despite the recommendation, however, the Air Force  said it lacked the technical data to compete the purchase.  We noted that  while the Air Force and the original equipment supplier have a contract  that could allow the Air Force to order technical drawings for the  purpose of purchasing replenishment spare parts, the contractor had  not always delivered such data based on uncertainties concerning the  Air Force’s rights to the data.
M4 carbine:  When the Army purchased its new M4 carbine, it did not  acquire the technical data rights necessary to recompete follow-on  purchases of the carbine.  The M4 carbine is a derivative of the M16 rifle  and shares 80 percent of its parts with the M16.  However, because the  remaining 20 percent of parts were funded by the developer, the Army  did not have all the rights needed to compete subsequent manufacture  of the M4.  The Army estimated that the unit cost is about twice as much  for the M4 compared with the M16, despite increases in procurement  quantities for the M4 and the large commonality of parts.  According to  Army officials, having the technical data rights for the M16 allowed the  Army to recompete the procurement of the rifle, resulting in a  significantly decreased unit procurement cost.
Although we did not assess the rationale for the decisions made on  technical data rights during the acquisition of these systems, several  factors may complicate program managers’ decisions on long-term  technical data rights for weapon systems.  These factors include the  following:  The contractor’s interests in protecting its intellectual property rights.
Because contractors need to protect their intellectual property from  uncompensated use, they often resist including contract clauses that  provide technical data rights to the government.
The extent to which the system being acquired incorporates technology  that was not developed with government funding.  According to DOD’s  acquisition guidance, the government’s funding of weapon system  development determines the government’s rights to technical data.   Weapon systems are frequently developed with some mix of contractor  and government funding, which may present challenges to DOD in  negotiating technical data rights with the contractor.
The potential for changes in the technical data over the weapon system’s  life cycle.  The technical data for a weapon system may change over its  life cycle, first as the system’s technology matures and later as the  system undergoes modifications and upgrades to incorporate new  technologies and capabilities.  The potential for changes in technical  data present challenges concerning when the government should take  delivery of technical data, the format used to maintain technical data,  and whether the data should be retained in a government or contractor  repository.
The extent to which the long-term sustainment strategy may require  rights to technical data versus access to the data.  According to Army  officials, access to contractor technical data is sometimes presented as  an alternative to the government taking delivery of the data.  These  officials noted that while access to technical data may allow for  oversight of the contractor and may reduce the program manager’s data  management costs, it may not provide the government with rights to use  the technical data should a change in the sustainment plan become  necessary.
The numerous funding and capability trade-offs program managers face  during the acquisition of a weapon system.  Program managers are  frequently under pressure to spend limited acquisition dollars on  increased weapon system capability or increased numbers of systems,  rather than pursuing technical data rights.
The long life cycle of many weapon systems. With weapon systems  staying in DOD’s inventory for longer periods—up to 40 years, it may be  difficult for the program manager to plan for future contingencies such  as modifications and upgrades, spare parts obsolescence, diminishing  manufacturing support, and diminishing maintenance support.
section_title: DOD Acquisition Policies Do Not Specifically Address Long-term Needs for Technical Data Rights
paragraphs: DOD’s acquisition policies do not specifically address long-term needs for  technical data rights to sustain weapon systems over their life cycle, and in  the absence of a DOD-wide policy, the Army and the Air Force are working  independently to develop structured approaches for defining technical data  requirements and securing rights to those data.  DOD’s current acquisition  policies do not specifically require program managers to assess long-term  needs for technical data rights to support weapon systems and,  correspondingly, to develop acquisition strategies that address those needs.   DOD guidance and policy changes, as part of the department’s acquisition  reforms and performance-based strategies, have deemphasized the  acquisition of technical data rights.  DOD concurred with but has not  implemented our August 2004 recommendation for developing technical  data acquisition strategies, although it has recently reiterated its intent to  do so.  Army and Air Force logistics officials are working independently to  develop structured approaches for determining technical data rights  requirements and securing long-term rights for use of those data.  Logistics  officials told us that their efforts would benefit from having a DOD policy  that specifically addresses long-term technical data needs for weapon  system sustainment.
subsections: section_title: DOD Acquisition Policies Do Not Specifically Require Program Managers to Assess Long-term Needs for Technical Data Rights or Develop Corresponding Acquisition Strategies
paragraphs: Current DOD acquisition policies do not specifically require program  managers to assess long-term needs for technical data rights to sustain  weapon systems, and, correspondingly, to develop acquisition strategies  that address those needs.  DOD Directive 5000.1, the agency’s policy  underlying the defense acquisition framework, designates program  managers as the persons with responsibility and authority for  accomplishing acquisition program objectives for development,  production, and sustainment to meet the users’ operational needs.  The  directive, however, does not provide specific guidance as to what factors  program managers should consider in developing a strategy to sustain the  weapon system, including considerations regarding technical data.  DOD  Instruction 5000.2, the agency’s policy for implementing DOD Directive  5000.1, requires program managers to ensure the development of a flexible  strategy to sustain a program so that the strategy may evolve throughout  the weapon system’s life cycle.  In addition, DOD provides non-mandatory  guidebooks to assist program managers with acquisition and product  support. However, DOD acquisition policy does not specifically direct the  program manager, when acquiring a weapon system, to define the  government’s requirements for technical data rights, an important aspect of  a flexible sustainment strategy.
DOD guidance and policy changes, as part of the department’s acquisition  reforms and performance-based strategies, have deemphasized the  acquisition of technical data rights.  For example, a 2001 memorandum  signed by DOD’s senior acquisition official stated that the use of  performance-based acquisition strategies may obviate the need for data or  rights. Also in 2001, DOD issued guidance on negotiating intellectual  property rights and stated that program officials should seek to establish  performance-based requirements that enhance long-term competitive interests, in lieu of acquiring detailed design data and data rights. In a  May 2003 revision of its acquisition policy, DOD eliminated a requirement  for program managers to provide for long-term access to technical data and  required them to develop performance-based logistics strategies.
Even prior to the May 2003 revision of DOD’s acquisition policy, we had  raised concerns about whether DOD placed sufficient emphasis on  obtaining technical data during the acquisition process.  We reported in  2002 that DOD program offices had often failed to place adequate emphasis  on obtaining needed technical data during the acquisition process.  We  recommended that DOD emphasize the importance of obtaining technical  data and consider including a priced option for the purchase of technical  data when considering proposals for new weapon systems or modifications  to existing systems.  While DOD concurred with the recommendation, it  subsequently made revisions to its acquisition policies in May 2003, as  noted above, that eliminated the prior requirement for the program  manager to provide for long-term access to data.
DOD also has not implemented a prior recommendation we made for  developing technical data acquisition strategies, although it has recently  reiterated its intent to do so.  In August 2004, we reported that adoption of  performance-based logistics at the weapon system platform level may be  influencing program managers to provide for access only to technical data  necessary to manage the performance-based contract during the  acquisition phase—and not to provide a strategy for the future delivery of  technical data in case the performance-based arrangement failed.  We  recommended that DOD consider requiring program offices to develop  acquisition strategies that provide for a future delivery of sufficient  technical data should the need arise to select an alternative source or to  offer the work out for competition.  In response to our recommendation,  DOD concurred that technical, product, and logistics data should be  acquired by the program manager to support the development, production,  operation, sustainment, improvement, demilitarization, and disposal of a  weapon system.  Furthermore, the department recognized the need to take  steps to stress the importance of technical data by its stated intent to  include a requirement in DOD’s acquisition policies (DOD Directive 5000.1  and DOD Instruction 5000.2) for the program managers to establish a data  management strategy that requires access to the minimum data necessary  to sustain the fielded system; to recompete or reconstitute sustainment, if  necessary, to promote real time access to data; and to provide for the  availability of high-quality data at the point of need for the intended user.   In the case of performance-based arrangements, that would include  acquiring the appropriate technical data needed to support an exit strategy  should the arrangement fail or become too expensive.  Despite DOD’s  concurrence with our recommendation, however, efforts to implement  these changes have been delayed.
section_title: Army and Air Force Are Working to Develop Structured Approaches for Assessing Technical Data Needs and Securing Long- term Rights to Those Data
paragraphs: Army and Air Force logistics officials are independently developing  structured approaches for determining when and how in the acquisition  process the service should assess its requirements for technical data and  secure its long-term rights for use of those data.  The aim of these efforts is  to ensure future sustainment needs of weapon systems are adequately  considered and supported early during the acquisition process. Logistics  officials from each service told us that their efforts would benefit from  having a DOD policy that specifically addresses long-term technical data  needs for weapon system sustainment.  In the absence of a mandatory DOD  requirement to address technical data, service officials said, program  managers may not fully consider and incorporate long-term requirements  for technical data rights during system acquisition.
According to Army and Air Force officials, their reviews of current policies  and practices indicate that it is during the development of the solicitation  and the subsequent negotiation of a proposed contract that the government is in the best position to secure required technical data rights.  This point  in the acquisition process is likely to present the greatest degree of  competitive pressure, and the weapon system program office can consider  technical data as a criterion for evaluating proposals and selecting a  contractor.   In addition, the Air Force is pursuing the use of priced options  negotiated in contracts for new weapon systems or modifications to  existing systems.  A priced option retains the option for acquiring technical  data rights at some point later in the weapon system’s life cycle.  According  to Air Force officials, priced options for technical data may ensure the  government’s rights to the data and control the cost of technical data in the  future.  The Air Force is attempting to incorporate priced options for  technical data in two new weapon system acquisitions.  We have previously  recommended that DOD require the military services to consider the merits  of including a priced option for the purchase of technical data when  proposals for new weapon systems or modifications to existing systems are  being considered.
subsections: section_title: Army Technical Data Efforts
paragraphs: The Army established a working group in March 2005 to serve as a forum  for determining requirements for and resolving issues associated with the  management and use of technical data.  One task of the working group is  to develop a structured process for determining what technical data are  needed for any given system. Another task is to clarify technical data policy  and reconcile the best practices of acquisition reform with the need for  technical data rights in support of weapon system acquisition and  sustainment.  The group is also reviewing pertinent federal and DOD policy  and guidance, as well as instruction materials used by the Defense  Acquisition University for acquisition career training, with the aim of  identifying ambiguities or inconsistencies. This effort focuses on areas of  the acquisition process where technical data and acquisition intersect, such  as systems engineering, configuration management, data management,  contracting, logistics, and financial management.  Some anticipated  products from the group include the following proposed items:  changes to integrate and clarify policy on technical data and weapon   draft instruction material to better define and explain the value of  technical data rights and the uses of technical data throughout the  weapon system life cycle, and  a comprehensive primer to provide the acquisition professional a guide  for ensuring that there is a contract link between weapon system  acquisition and sustainment strategies on the one hand and the  technical data strategy on the other.
According to members of the working group, if the government’s rights  have not been protected in the contract, then it may be necessary to  negotiate the rights to use the data at a later date, which could be cost- prohibitive. Army Materiel Command officials told us that having a DOD  policy on when and how in the acquisition process technical data rights  should be addressed would help them as they revise their policy and  guidance.  The product data working group plans to complete its  preliminary work by the end of fiscal year 2006.
In January 2006, the U.S. Army’s Tank-automotive and Armaments  Command completed a study evaluating the importance of technical data  over the life cycle of a weapon system, with particular emphasis on  sustainment.  While the Army had not yet approved and released the final  report, members of the study team indicated the following:  Previous DOD guidance on the data rights required for performance- based logistics contracts has been ambiguous and open to  misinterpretation. This ambiguity has resulted in many programs’ not  acquiring rights to technical data for long-term weapon system  sustainment.  Lack of technical data rights leads to risks associated with  the inability to broaden the industrial base to support Global War on  Terrorism surge requirements.
The current process to identify the government’s technical data rights is  ad hoc and unstructured.
The government’s rights to technical data are independent of the  logistics support strategy—whether government (organic) support,  traditional contract logistics support, or performance-based logistics.
According to team members, potential recommendations from the study  are to establish a new policy requiring the program manager to complete a  technical data rights decision matrix and to weigh the cost of acquiring  technical data against program risk.  The technical data rights should be  negotiated as early as possible in the contracting process and ideally  should be used as a source selection factor.  The study team further states  that the government should ensure that rights to use the data are secured in  the system development and demonstration contract.
section_title: Air Force Technical Data Efforts
paragraphs: Air Force officials are currently reviewing and developing proposed  changes to weapon system acquisition and support policies to require that  sustainment support and technical data rights decisions be made early in  weapon system acquisition. These efforts are part of the Air Force Materiel  Command’s product support campaign, an effort to better integrate the  activities of the service’s acquisition and logistics communities.  Air Force  officials involved with the campaign said their efforts could be facilitated if  DOD’s acquisition policy were revised to more clearly direct program  managers when and how they are to define and secure the government’s  data rights during weapon system acquisition.  The campaign’s policy focus  team is working on the efforts that would provide a more structured  approach to early determination of the government’s technical data rights:  revised polices to require that sustainment support decisions be made  and technical data rights be defined during the technology phase of  acquisition but prior to system development and demonstration;  a standard template for contract solicitations, to be used to guide the  acquisition workforce in securing technical data rights;  contract language to include a priced option for the delivery of technical  data and rights for use of data, which would be negotiated and included  as part of the system development and demonstration solicitation; and  an independent logistics assessment process, to provide an objective  review of the acquisition program office’s sustainment support plans  before major milestone decisions.
In May 2006, the Secretary of the Air Force directed that the acquisition of  technical data and associated rights be addressed specifically in all  acquisition strategy plans, reviews, and associated planning documents for  major weapon system programs and subsequent source selections.  The  Secretary stated these actions are needed to address challenges in meeting  legislative requirements to maintain a core logistics capability and to limit  the percentage of depot maintenance funds expended for contractor  performance.  The competitive source selection process, according to the  Secretary, provides the best opportunity to address technical data  requirements while at the same time brokering the best deal for the  government in regard to future weapon systems sustainment.
section_title: Conclusions
paragraphs: Under current DOD acquisition policies, the military services lack  assurance that they will have the technical data rights needed to sustain  weapon systems throughout their life cycle.  We have previously made  recommendations that DOD enhance its policies regarding technical data.   DOD has concurred with these recommendations but has not implemented  them.  In fact, DOD has de-emphasized the acquisition of technical data  rights as part of the department’s acquisition reforms and performance- based strategies.  Our current work, however, shows that the services face  limitations in their sustainment plans for some fielded weapon systems due  to a lack of needed technical data rights.  Furthermore, program managers  face numerous challenges in making decisions on technical data rights— decisions that have long-term implications for the life-cycle sustainment of  weapon systems.  Army and Air Force logistics officials have recognized  weaknesses in their approaches to assessing and securing technical data  rights, and each service has begun to address these weaknesses by  developing more structured approaches.  However, current DOD  acquisition policies do not facilitate these efforts.  Unless DOD assesses  and secures its rights for the use of technical data early in the weapon  system acquisition process when it has the greatest leverage to negotiate,  DOD may face later challenges in developing sustainment plans or  changing these plans as necessary over the life cycle of its weapon systems.   Delaying action in acquiring technical data rights can make these data cost- prohibitive or difficult to obtain later in the weapon system life cycle, and  can impede DOD’s ability to comply with legislative requirements, such as  core capability requirements.
section_title: Recommendations for Executive Action
paragraphs: To ensure that DOD can support sustainment plans for weapon systems  throughout their life cycle, we recommend that the Secretary of Defense  direct the Under Secretary of Defense (Acquisition, Technology, and  Logistics) to specifically require program managers to assess long-term  technical data needs and establish corresponding acquisition strategies  that provide for technical data rights needed to sustain weapon systems  over their life cycle.  These assessments and corresponding acquisition  strategies should  be developed prior to issuance of the contract solicitation;  address the merits of including a priced contract option for the future  delivery of technical data;  address the potential for changes in the sustainment plan over the  weapon system’s life cycle, which may include the development of  maintenance capability at public depots, the development of new  sources of supply to increase production, or the solicitation of  competitive offers for the acquisition of spare parts and components;  and  apply to weapon systems that are to be supported by performance- based logistics arrangements as well as to weapon systems that are to  be supported by other sustainment approaches.
We also recommend that the Secretary of Defense direct the Under  Secretary of Defense (Acquisition, Technology, and Logistics) to  incorporate these policy changes into DOD Directive 5000.1 and DOD  Instruction 5000.2 when they are next updated.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on a draft of this report, DOD concurred with our report  and recommendations.  DOD stated that the requirement for program  managers to assess long-term technical data needs and establish  corresponding strategies will be incorporated into DOD Instruction 5000.2  when it is next updated.  If DOD updates its acquisition policy as stated, we  believe this action will meet the intent of our recommendations.  DOD’s  response is included in appendix II.
section_title: Scope and Methodology
paragraphs: We conducted work at the Office of the Secretary of Defense, the Army, the  Navy, and the Air Force.  The specific offices and commands we visited are  listed in the attached briefing slides contained in appendix I.
To identify sustainment plans for fielded weapon systems that may have  been affected by the technical data rights available to the government, we  met with Army and Air Force acquisition and logistics officials responsible  for 11 weapon systems.  We did not identify technical data issues affecting  sustainment for three of these systems and excluded these systems from  our subsequent review.  We also excluded a weapon system—the Buffalo  mine-protected route clearing equipment—that was acquired under the  Army’s rapid fielding initiative to meet emergency needs.  For the other  seven weapon system programs—the C-17 aircraft, F-22 aircraft, C-130J  aircraft, Up-armored High-Mobility Multipurpose Wheeled Vehicle, Stryker  family of vehicles, Airborne Warning and Control System aircraft, and M4  carbine—we obtained information on the service’s requirement for rights  to use the data, their success in obtaining data rights from the  manufacturer, and the effect that a lack of data rights had on system  sustainment plans. We did not assess the rationale for the decisions made  on technical data rights during system acquisition, nor did we determine  the extent that program offices complied with acquisition policies  regarding technical data that existed at the time of the acquisition.   However, we collected comments from acquisition and logistics personnel  on the factors that complicate program managers’ decisions on long-term  technical data rights for weapon systems.
To examine the requirements for obtaining technical data rights under  current DOD acquisition policies, we analyzed current DOD acquisition  policies.   Our review encompassed DOD-wide policies, including DOD  Directive 5000.1 and DOD Instruction 5000.2, as well as service-specific  policies.  We discussed these policies with DOD and service officials  responsible for developing acquisition and logistics policies, preparing  system acquisition strategies, and implementing sustainment plans to  obtain their views on the importance of considering technical data  requirements during the acquisition process.  To determine DOD’s plans to  revise acquisition policy in response to a previous recommendation we  made on technical data, we reviewed DOD correspondence and met with  officials at the Office of the Under Secretary of Defense (Acquisition,  Technology, and Logistics).
We also met with Army and Air Force logistics officials to obtain  information on their efforts to assess acquisition policies and make  appropriate changes that would provide a structured process for assessing  and securing government rights to technical data early in weapon system  acquisition.  We interviewed Army officials leading the Army Material  Command’s Product Data Engineering Working Group and Air Force  officials addressing acquisition and logistics policies as part of the Air  Force Material Command’s Product Support Campaign.  We also reviewed  available documentation on the objectives and potential outcomes of these  initiatives.
We are sending copies of this report to the Secretary of Defense and to the  Secretaries of the military services.  Copies of this report will be made  available to others upon request.  In addition, the report will be available at  no charge on our Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-5140 or solisw@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 III.
section_title: GAO’s Preliminary Observations on the Department of Defense’s Acquisition of Technical Data to Support Weapons Systems
subsections: section_title: Introduction
subsections: section_title: • The House Committee on Armed Services asked whether DOD policies limit
paragraphs: the services from purchasing technical data when acquiring new weapons  systems, and thereby increase the systems’ life-cycle sustainment costs and  delay the repair of mission-essential items.
The Committee requested in H.R. 109-89 that GAO review the services’  technical data policies and practices affecting life-cycle costs and availability  of weapons systems.
GAO previously examined this issue in a report on performance-based  logistics (GAO-04-715, August 2004) and recommended policy changes for  DOD. Specifically, DOD should: “consider requiring program offices, during weapon system acquisition, to  develop acquisition strategies that provide for a future delivery of sufficient  technical data to enable the program office to select an alternative  source—public or private—or to offer the work out for competition if the  performance-based arrangement fails or becomes prohibitively expensive.”
section_title: Objectives
paragraphs: GAO will analyze and report on the following:   To what extent DOD policies limit the services from purchasing technical  data when acquiring new weapons systems;  The status of DOD’s plans to revise acquisition policy in response to the  previous GAO recommendation on technical data;   The costs for obtaining access in order to view, modify, or distribute  technical data relating to the sustainment of procured systems; and  The amount of time required to reach back to the system manufacturer for  technical data and what impact, if any, that delay has on repairing or  modifying fielded systems.
section_title: Synopsis of Observations
subsections: section_title: Under DOD policy, program managers are not limited from obtaining tech
paragraphs: data rights during acquisition– but neither are they required to do so.
DOD has been slow in responding to our recommendation in GAO-04-715  but has revised discretionary guidance that addresses tech data rights.
Available budget figures indicate limited cost growth for technical data  supporting fielded weapons systems.
Although information on technical data issues affecting field maintenance is  limited, our review showed maintenance units in Southwest Asia did not  experience systemic problems in obtaining tech data. Army readiness data  we reviewed did not indicate low equipment readiness rates due to  maintenance.
section_title: Scope and Methodology
subsections: section_title: Army Headquarters
paragraphs: Army Materiel Command (AMC), Fort Belvoir, Va.  Tank-Automotive and Armaments Command (TACOM), Warren, Michigan, and  Rock Island, Ill.
U.S. Army Forces Command (FORSCOM), Fort McPherson, Ga.  1st Cavalry Division, Fort Hood, Texas   Naval Aviation Systems Command (NAVAIR), Patuxent River, Md.  Naval Sea Systems Command (NAVSEA), Washington, D.C.
section_title: Scope and Methodology (cont.)
subsections: section_title: To determine the status of DOD’s efforts to implement the recommendation of
paragraphs: our prior report, we analyzed DOD and service acquisition policy and guidance,  interviewed DOD and service officials, and collected DOD correspondence  addressing our recommendation.
To determine costs for obtaining access to contractor technical data, we collected  and analyzed operations and maintenance budget data from the services. Our  review focused on costs associated with sustaining fielded systems.
To determine the impact of maintenance delays that might be caused by the need to obtain technical data from the manufacturer, we collected and analyzed  non-mission capable reports on equipment managed by the US Army Tank- Automotive and Armaments Command. We also contacted logistics assistance  representatives to collect information on experiences with technical data in the  field.
We also collected acquisition and logistic support information on 7 Army  systems—Abrams, Bradley, HMMWV, M-88, Stryker, mine clearing equipment,  and vehicle armor kits; and 4 Air Force systems—C-17, C-130J, F-117, and the F22.
section_title: Background
paragraphs: WHAT ARE TECHNICAL DATA?
Technical data are recorded information of a scientific or technical nature,  regardless of the form or method of the recording. Typically, technical data  refer to:  Technical data packages: All applicable drawings, associated lists,  specifications, standards, performance requirements, quality assurance  provisions, and packaging details necessary to support an acquisition  strategy and ensure the adequacy of item performance.
Technical manuals: Publications that contain instructions for the  installation, operation, maintenance, training, and support of weapons  systems. A maintenance technical manual normally includes  maintenance procedures, parts lists or parts breakdown, and related  technical information or processes.
section_title: Background (cont.)
paragraphs: WHY ARE TECHNICAL DATA IMPORTANT?
The private sector and the government often have important competing  interests in technical data rights.
A company’s interest in protecting its intellectual property (IP) from  uncompensated exploitation is of paramount importance—such that  they often resist including the contract clauses providing tech data  rights to government.
The government needs to have adequate rights to support its weapons  systems, including developing repair and maintenance procedures, selecting alternate repair sources, and procuring spare parts  competitively.
section_title: Background (cont.)
paragraphs: WHEN ARE TECHNICAL DATA RIGHTS ACQUIRED, AND HOW ARE  THESE DATA MANAGED?
Provision for acquiring weapons systems tech data rights, access, and  delivery should be made early in acquisition.
Tech data rights decisions made during acquisition will affect  government’s ability to support weapons systems throughout  increasingly longer life cycles—up to approximately 40 years.
Delaying action in acquiring technical data rights can make them cost prohibitive or difficult to obtain.
Technical data are jointly managed and may be stored at either the  government’s or contractor’s repository.
subsections: section_title: To what extent do DOD policies limit the services from purchasing technical data when acquiring new weapons systems?
subsections: section_title: Under DOD policy, program managers are not limited from obtaining technical data rights during acquisition—but neither are they required to do so.
paragraphs: DOD Directive 5000.1 and Instruction 5000.2 provide DOD’s overall acquisition  policy. The Defense acquisition guidebook and product support guide offer  additional discretionary guidance.  5000.1 “The Defense Acquisition System” —Designates the program  managers as the persons with responsibility and authority for accomplishing  acquisition program objectives for development, production, and  sustainment to meet the users’ operational needs.  5000.2 “Operation of the Defense Acquisition System” —Instructs program  managers to ensure development of a flexible strategy to sustain a program  so that the strategy may evolve throughout the weapons system life cycle.
Discretionary guidebooks—Guide program managers to determine minimum  data needs to support sustainment strategy over life cycle of system.
DOD policy does not require program managers to document their strategy for ensuring long-term access to tech data over the life cycle of a weapon system.
section_title: To what extent do DOD policies limit the services from purchasing technical data when acquiring new weapons systems? (cont.)
subsections: section_title: Army’s acquisition policy (AR 70-1 and AR 700–127)
paragraphs: Requires program manager to develop logistics support strategy, including  description of how tech data rights or long-term access to tech data is to be  obtained.
Navy’s acquisition policy (SECNAV Instructions 4105.1A and 5000.2c, and  NAVSO P-3692)
An independent team is required to assess the adequacy of the program  manager’s logistics support plan, including technical data. However, there is  no requirement compelling a system program manager to address how tech  data rights or long-term access to technical data is to be obtained.
Air Force’s acquisition policy (AF policy directives 63-1 and 20-5, and AF  Instructions 63-107 and 63-101)
Requires program manager to address tech data in a product support strategy.
section_title: To what extent do DOD policies limit the services from purchasing technical data when acquiring new weapons systems? (cont.)
subsections: section_title: The services’ continuing efforts to require program managers to develop tech data requirements early in acquisition process highlight a gap in DOD policy:
paragraphs: Product Data and Engineering Working Group  TACOM’s draft technical data rights study  Planned revisions to 5000.2c Independent logistics assessment handbook  Air Force  Developing an independent logistics assessment process Service officials responsible for these efforts believe their work would be facilitated  by a DOD policy providing clear direction to the program managers to develop a  tech data strategy early in the acquisition process.
section_title: To what extent do DOD policies limit the services from purchasing technical data when acquiring new weapons systems? (cont.)
subsections: section_title: In the absence of DOD acquisition policy requiring a technical data strategy, program managers may not adequately consider the need to acquire technical data rights because:
paragraphs: Program managers are under financial pressure to use available funds to buy  more inventory or capability rather than technical data.
DOD has deemphasized the requirement of acquiring rights to tech data:  The “use of performance-based acquisition strategies…may obviate the  need for data and/or rights.” USD (AT&L) memo on the reform of  intellectual property rights of contractors, Jan. 5, 2001. “Finally, program officials should seek to establish performance-based  requirements that enhance long-term competitive interests, in lieu of acquiring detailed design data and data rights.” DOD guide to negotiating  intellectual property rights, Oct. 15, 2001.
DOD acquisition policy (revised May 2003) eliminated requirement for program managers to ensure long-term access to technical data and  required them to develop performance-based logistics strategies.
section_title: What is the status of DOD’s plans to revise acquisition policy in response to the previous GAO recommendation on technical data?
paragraphs: DOD has been slow in responding to our recommendation to revise its technical  data acquisition policy.
In August 2004, GAO compared the practices of DOD with those of the private  sector for acquiring new systems. We found that the private sector typically acquires the technical data for new systems, while DOD program managers often do not acquire the technical data, opting instead to buy larger quantities  or greater system capability with available funding.
GAO recommended that DOD consider requiring program offices to develop  strategies providing for future delivery of technical data to allow selection of  alternate sources or offering work for competition.
DOD concurred, stating it would update its DOD 5000 regulations to include  this requirement. This change was to be accomplished by the Defense  Acquisition Policy Working Group (DAPWG).
DOD has been delayed in updating its 5000 regulations due to other  DAPWG priorities (i.e., the Quadrennial Defense Review). DOD recently  reaffirmed its intent to implement our recommendation when DAPWG returns to updating the 5000  regulations in May 2006.
section_title: What are the costs for obtaining access in order to view, modify, or distribute technical data relating to the sustainment of procured systems?
subsections: section_title: There is limited visibility into technical data funding; available operation and maintenance budget figures for fielded systems indicate limited cost growth. Most changes that we analyzed for FY06 were due to a shift from procurement to sustainment funding as systems are fielded.
paragraphs: Budget Requirements for Technical Data ($ in millions)
section_title: What are the costs for obtaining access in order to view, modify, or distribute technical data relating to the sustainment of procured systems? (cont.)
subsections: section_title: Based on an analysis of the SSTS account by Army officials, only about $15
paragraphs: million of increase is due to increased technical data requirements, which  resulted primarily from cessation of Abrams Tank and Bradley Fighting  Vehicle upgrade programs.
Remaining $101 million of the increase is due to programs not involving technical data requirements, such as obsolescence management of  replacement parts and digitization of maintenance technical manuals.
Even within individual contracts, technical data costs may not be apparent.
According to service contracting officials, some weapon systems support contracts do not separately price technical data. Examples are the Air Force’s  C-130J and F117.
section_title: What are the costs for obtaining access in order to view, modify, or distribute technical data relating to the sustainment of procured systems? (cont.)
subsections: section_title: Top five fiscal year 2006 technical data cost drivers account for approximately 60 percent of the Army’s $33.8 million requirement.
section_title: What are the costs for obtaining access in order to view, modify, or distribute technical data relating to the sustainment of procured systems? (cont.)
subsections: section_title: Top five fiscal year 2006 technical data cost drivers account for approximately 67 percent of NAVAIR’s $11.7 million requirement.
section_title: What are the costs for obtaining access in order to view, modify, or distribute technical data relating to the sustainment of procured systems? (cont.)
subsections: section_title: Top five fiscal year 2006 technical data cost drivers account for approximately 46 percent of the Air Force’s $62.4 million requirement.
section_title: How much time is needed to return to vendor for technical data, and what impact do delays have on repairing or modifying fielded systems?
subsections: section_title: Although information on technical data issues affecting field maintenance is limited, our review showed maintenance units in Southwest Asia did not experience systemic problems in obtaining tech data. Army readiness data we reviewed did not indicate low equipment readiness rates due to maintenance.
paragraphs: Logistics assistance representatives’ reports indicated instances where  field maintainers initially lacked technical data (e.g., repair manuals), but  these cases were infrequent and subsequently resolved. Some new  equipment items that were rapidly fielded into service lacked  accompanying technical data.
Readiness rates for equipment in Southwest Asia theaters of operations  have not fallen below acceptable levels, except in four minor instances,  according to recent Army data.
section_title: Conclusions
subsections: section_title: While DOD has issued discretionary guidance that addresses technical data rights, current DOD policy does not require program managers to document their strategy for ensuring long-term access to tech data. We continue to believe that our prior recommendation in GAO-04-715 for DOD to add a technical data requirement to its acquisition policy is valid. In the absence of such policy, the government may find itself unprepared to support its weapons systems over their lifecycle, to include developing repair and maintenance procedures, selecting alternate repair sources should existing support fail or become too expensive, and procuring spare parts competitively. Further, while the services have initiatives under way to address these shortfalls, the success of their efforts would be enhanced by clear DOD policy on developing tech data requirements.
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Thomas Gosling, Assistant  Director; Larry Junek; Andrew Marek; John Strong; Cheryl Weissman; and  John Wren were major contributors to this report.