Defense Acquisitions: Issues Concerning Airlift and Tanker Programs
Published: 2007-03-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense (DOD) has continuing efforts to modernize its airlift and tanker fleets by investing billions of dollars to modify legacy airlift systems, such as the C-5 and C-130, and procure new aircraft, such as a tanker replacement. Acquisition has been on GAO's list as a high risk area since 1990. GAO has reported that elements contributing to a sound business case for an acquisition are missing or incomplete as DOD and the services attempt to acquire new capabilities. Those elements include firm requirements, mature technologies, a knowledge-based acquisition strategy, a realistic cost estimate, and sufficient funding. Acquisition problems that include failure to limit cost growth, schedule delays, and quantity reductions persist, but fiscal realities will not allow budgets to accommodate these problems any longer. Today's testimony addresses (1) the analyses supporting the Department of Defense's (DOD) mobility capabilities and requirements and (2) actions that are needed to improve the outcomes of weapon system acquisitions. For this testimony, GAO drew from issued reports, containing statements of the scope and methodology used, as well as recently completed work not yet reported. GAO's work was performed in accordance with generally accepted government auditing standards.
section_title: What GAO Found
paragraphs: Past GAO reports, including two recently issued, raise concerns about the quality of analyses underpinning the programmatic decision-making surrounding DOD's airlift requirements. In September 2006, GAO issued our report (GAO-06-938) on DOD's Mobility Capabilities Study (MCS). The MCS determined that the projected mobility capabilities are adequate to achieve U.S. objectives with an acceptable level of risk during the period from fiscal years 2007 through 2013; that is, the current U.S. inventory of aircraft, ships, prepositioned assets, and other capabilities are sufficient, in conjunction with host nation support. GAO's report stated that conclusions of the MCS were based on incomplete data and inadequate modeling and metrics that did not fully measure stress on the transportation system. GAO further observed that the MCS results were incomplete, unclear, or contingent on further study, making it difficult to identify findings and evaluate evidence. It was not clear how the analyses done for the study support DOD's conclusions and GAO suggested that decision makers exercise caution in using the results of this study to make programmatic decisions. In March 2007, GAO reported (GAO-07-367R) on the lack of mandatory analyses to support a passenger and cargo capability for the new replacement refueling aircraft, the KC-X tanker. Contrary to mandatory Air Force implementing guidance, the Air Force proposed a capability without analyses identifying an associated gap, shortfall, or redundancy. GAO believes that without sound analyses, the Air Force may be at risk of spending several billion dollars unnecessarily for a capability that may not be needed to meet a gap or shortfall and made recommendations to the Secretary of Defense that included conducting the requiring analyses necessary to establish capabilities. Successful acquisition programs make sound decisions based on critical product knowledge to ensure that program investments are getting promised returns--on time delivery, within estimated costs, and with expected capabilities. However, GAO has shown in its work that DOD practices diverge from best development practices intended to produce good outcomes and, as a result, have experienced significant cost growth and schedule delays. DOD expects to invest over $12 billion in new and improved capabilities in four airlift programs discussed in this testimony between now and 2013--C-5 Avionics Modernization Program, C-5 Reliability Enhancement and Reengining Program, C-130 Avionics Modernization Program, and the C-130J acquisition program. GAO found that all four programs failed at basic systems engineering practices to 1) fully analyze the resources needed to integrate proven commercial technologies, 2) achieve a stable design before beginning system demonstration, and 3) demonstrate the aircraft would work as required before making large production investments.

section_title: Letter
paragraphs: We are pleased to be here to discuss the development of aircraft program  requirements and issues related to the acquisition process. We recently  issued our report on high risk areas in the federal government, which lists  DOD’s acquisition process as one longstanding area of concern.  Acquisition has been on this list since 1990. As we have reported, DOD  knows what to do to achieve more successful outcomes, but finds it  difficult to apply the necessary discipline and controls or assign much  needed accountability. DOD has not been employing a knowledge-based  development approach and business cases have not measured up. DOD  has just begun piloting some corrective actions, so the proof of actual  implementation may be years away. These initiatives also may not  necessarily be applied to programs already under way.
DOD has continuing efforts to modernize its airlift and tanker fleets by  investing billions of dollars to modify legacy airlift systems, such as the C- 5 and C-130, and procure new aircraft, such as the KC-X replacement  tanker. We have reported in the past that a sound business case for an  acquisition contains firm requirements, mature technologies, a knowledge- based acquisition strategy, a realistic cost estimate, and sufficient funding.  However, we have found many of these elements are missing or  incomplete as DOD and the services attempt to acquire new capabilities.  Persistent acquisition problems include failure to identify needs versus  wants and to limit cost growth, schedule delays, and quantity reductions,  but fiscal realities will not allow budgets to accommodate these problems  any longer.
Today I will highlight for you some issues related to the analyses  supporting the Department of Defense’s (DOD) mobility capabilities and  requirements and Mike Sullivan will discuss actions that are needed to  improve the outcomes of weapon system acquisitions. For this testimony,  we drew from issued reports, which contain statements of the scope and  methodology used, as well as recently completed work not yet reported.  Our work was performed in accordance with generally accepted  government auditing standards.
subsections: section_title: Background
paragraphs: DOD must be capable of rapidly deploying armed forces to respond to  contingency and humanitarian operations around the world. Airlift and  tanker aircraft play a vital role in providing this capability. Over the past  25 years, DOD has invested almost $141 billion to develop, procure, and  modify its airlift and tanker forces with an additional investment planned  for fiscal years 2007 through 2011 of $32 billion. Recent annual funding  levels are at the highest levels in two decades. (See figure 1.)
In December 2005, DOD issued a report on the study of its mobility  capabilities. The goal of this Mobility Capabilities Study was to identify  and quantify the mobility capabilities needed to support U.S. strategic  objectives into the next decade. The MCS determined that the projected  mobility capabilities are adequate to achieve U.S. objectives with an  acceptable level of risk during the period from fiscal years 2007 through  2013; that is, the current U.S. inventory of aircraft, ships, prepositioned  assets, and other capabilities are sufficient, in conjunction with host  nation support. The MCS emphasized that continued investment in the  mobility system, in line with current departmental priorities and planned  spending, is required to maintain these capabilities in the future. This  includes, for example, fully funding Army prepositioned assets as planned  and completing a planned reengineering of the C-5 aircraft.
In our previous reports concerning acquisition outcomes and best  practices, we have noted the importance of matching warfighter  requirements with available resources, a responsibility shared by the  requirements and acquisition communities in DOD. As described in Air  Force implementing guidance, there is within DOD a distinct separation  between the requirements authority and acquisition authority. Under this  guidance, this separation requires early and continued collaboration  between both communities.
section_title: Analyses Used to Determine Mobility and Tanker Capabilities Were Inadequate
paragraphs: Analyses done for the MCS contained methodological limitations that  create concerns about the adequacy and completeness of the study and  decision makers approving the KC-X tanker proposal lacked required  analyses identifying need and associated risk for a passenger and cargo  capability.
subsections: section_title: Mobility Capabilities Study Limitations Raise Questions about Adequacy and Completeness
paragraphs: While DOD used an innovative approach in conducting the study and  acknowledged some methodological limitations in its report, it did not  fully disclose how these limitations could affect the MCS conclusions and  recommendations. In September 2006, we reported that DOD’s  conclusions were based, in some instances, on incomplete data and  inadequate modeling and metrics that did not fully measure stress on the  transportation system, and that, in some cases, MCS results were  incomplete, unclear, or contingent on further study, making it difficult to  identify findings and evaluate evidence. It is not clear how the analyses  done for the study supported DOD’s conclusions, and we suggested that  decision makers exercise caution in using the results of this study to make  programmatic decisions.
As measured against relevant generally accepted research standards, we  identified limitations in the MCS study and report that raise questions.  Among our findings    Aspects of modeling and data were inadequate in some areas because data  were lacking and some of the models used could not simulate all relevant  aspects of the missions. The report did not explain how these limitations  could affect the study results or what the effect on the projected mobility  capabilities might be. Relevant research standards require that models  used are adequate for the intended purpose and represent a complete  range of conditions, and also that data used are properly generated and  complete. For example, the MCS modeled hypothetical homeland defense  missions rather than missions for homeland defense demands from a well- defined and approved concept of operations for homeland defense  because the specific details of the missions were still being determined,  and DOD acknowledged that the data used may be incomplete. The MCS  also was unable to model the flexible deterrent options/deployment order  process to move units and equipment into theater due to lack of data, but  the study assumed a robust use of this process, which in one scenario  accounted for approximately 60 percent of the airlift prior to beginning  combat operations. In addition, the MCS report contains more than 80  references to the need for improved modeling, and 12 of these references  call for additional data or other refinements. Additionally, the MCS  modeled the year 2012 to determine the transportation capabilities needed  for the years 2007 through 2013. The year 2012 did not place as much  demand for mobility assets in support of smaller military operations, such  as peacekeeping, as other years. However, DOD officials considered  2012—the year modeled—as “most likely” to occur and stated that  statistically it was not different from other years in the 2007 to 2013 period  even though the number of smaller military operations is the least of any  of the years reviewed.
As I mentioned, we have reported before on the lack of data available for  analysis that could benefit decision makers. In September 2005, we  reported that the Air Force captured data on short tons transported but  did not systematically collect and analyze information on operational  factors, such as weather and runway length, that impact how much can be  loaded on individual missions. Therefore, Air Force officials could not  know how often it met its secondary goal to use aircraft capacity as  efficiently as possible. Without this information, Air Mobility Command  officials do not know the extent to which opportunities exist to use  aircraft more efficiently and whether operational tempo, cost, and wear  and tear on aircraft could be reduced. In addition, DOD officials do not  have the benefit of such analysis to determine future airlift requirements  for planning purposes.
While the MCS concluded that combined U.S. and host nation  transportation assets were adequate to meet U.S. objectives with  acceptable risk, the report, in describing the use of warfighting metrics in  its analyses, does not provide a clear understanding of the direct  relationship of warfighting objectives to transportation capabilities.  Acknowledging this point, the report stated that further analysis is  required to understand the operational impact of increased or decreased  strategic lift on achieving warfighting objectives. Relevant generally  accepted research standards require that conclusions be supported by  analyses. The use of warfighting metrics is a measure to determine  whether combat tasks, such as achieving air superiority, are achieved.  However, they do not measure whether appropriate personnel, supplies,  and equipment arrived in accordance with timelines. As a result, we could  not determine how the study concluded that planned transportation assets  were adequate because the study did not contain a transparent analysis to  support its conclusion or a clear roadmap in the report to help decision  makers understand what that conclusion meant in terms of type and  number of mobility assets needed. Previous DOD mobility studies  primarily used mobility metrics, which measured success in terms of tons  of equipment and personnel moved per day to accomplish military  objectives. The use of both warfighting and mobility metrics to measure  success would allow decision makers to know whether combat tasks were  achieved and how much strategic transportation is needed to accomplish  those tasks.  In some cases, the MCS results were incomplete, unclear, or contingent on  further study, making it difficult to identify findings and evaluate evidence.  Relevant research standards require results to be presented in a complete,  accurate, and relevant manner. For example, the report contains several  recommendations for further studies and assessments, five of which are  under way. However, at the time of our report, DOD had no plans to report  the effect of these studies on the MCS results after the studies are  complete. In addition, the report contains qualified information that is not  presented clearly, such as varying assessments of intratheater assets in  three different places in the report. The lack of clarity and conciseness of  the reported results can limit the study’s usefulness to decision makers  and stakeholders.
The MCS report also made recommendations to conduct further studies,  develop plans and strategies, and improve data collection and mobility  models. In fact, DOD officials told us at the time that a Mobility  Capabilities Study-2006 was underway, as well as studies on intratheater  lift, aerial refueling, and other mobility issues. However, unless DOD  addresses the concerns I just outlined for you, decision makers may be  unable to clearly understand the operational implications of the study  results and make fully informed programmatic investment decisions  concerning mobility capabilities. Also, some of the underlying  assumptions used in the MCS have now changed significantly, such as the  assumption that Army prepositioned equipment is in place and fully  funded, which will no longer be the case. Therefore, the MCS analyses and  results, which would be the starting point for any new studies, may no  longer be relevant.
section_title: Mandatory Analyses Done to Support Passenger and Cargo Capabilities in the KC-X Tanker Were Incomplete
paragraphs: Mandatory Air Force policy requires Air Force organizations to use a  formal capabilities-based approach to identify, evaluate, develop, field,  and sustain capabilities that compete for limited resources. Contrary to  mandatory Air Force implementing guidance, however, the Air Force  proposal for a replacement refueling aircraft, the KC-X tanker, included a  passenger and cargo capability without analyses identifying an associated  gap, shortfall, or redundant capability. According to mandatory Air Force  implementing guidance, analyses supporting the decision-making process  should assess a capability based on the effects it seeks to generate and the  associated operational risk of not having it. In this case, the supporting  analyses determined neither need nor risk with regard to a passenger and  cargo capability. Air Force officials could not provide supporting  information sufficient to explain this discrepancy between the analyses  and their proposal. Without sound analyses, the Air Force may be at risk of  spending several billion dollars unnecessarily for a capability that may not  be needed to meet a gap or shortfall.
Military decision makers approved the passenger and cargo capability as a  requirement although supporting analyses identified no need or associated  risk. Mandatory Air Force implementing guidance states that senior  leaders must use the documented results of analyses to confirm the  identified capability requirement. The Air Force Requirements for  Operational Capabilities Council validated, and the Chairman of the Joint  Chiefs of Staff’s Joint Requirements Oversight Council validated and  approved, KCX tanker proposal with a passenger and cargo capability.  Following the approvals of the oversight councils, DOD plans to solicit  proposals and award a contract for the KC-X tanker late in fiscal year  2007. At this time, the Under Secretary of Defense for Acquisition,  Technology and Logistics, who supervises DOD acquisition, must certify,  as Milestone Decision Authority for the proposed tanker acquisition, that,  among other things, the Joint Requirements Oversight Council has  accomplished its statutory duties and that the proposed program is in  compliance with DOD policies and regulations. However, the absence of  analyses identifying a capability gap, shortfall, or redundancy, and the  Joint Requirements Oversight Council approval of the program without  these analyses is contrary to policy and implementing guidance and could  preclude certification of the program by the Under Secretary. Absent this  certification, the acquisition program for the KC-X tanker cannot begin.
In this report, we recommended that the Secretary of Defense direct the  Secretary of the Air Force to accomplish the required analyses to evaluate  the proposed passenger and cargo capability so as to determine if there is  a gap, shortfall, or redundancy, assess the associated risk, and then submit  such documentation to the Joint Requirements Oversight Council for  validation. We also recommended that, once these analyses are completed,  the Secretary of Defense direct the Chairman, Joint Chiefs of Staff, to  formally notify the Under Secretary of Defense for Acquisition,  Technology and Logistics that such analyses have been completed as  required prior to certification of the program to Congress.
DOD disagreed with our first recommendation to accomplish the required  analyses. In its comments, DOD stated that through the Joint Capabilities  Integration and Development System process, the Air Force presented  analysis and rationale for the passenger and cargo capability. DOD further  stated that its Joint Requirements Oversight Council and the Air Force  concluded that the analysis was sufficient justification for the capability  and the Joint Requirements Oversight Council validated the requirement.  However, as our report points out, DOD did not perform the required  analyses and failed to identify a gap, shortfall, or redundancy for the  passenger and cargo capability. Considering the requirement for analyses  that separate needs from wants and the risk of unnecessary expenditures  in this multi-year multi-billion dollar acquisition program, we continue to  believe that our recommendation has merit and that the analyses required  by mandatory guidance are necessary to inform the decision that begins  the acquisition.
DOD agreed with our recommendation to formally notify the Under  Secretary of Defense for Acquisition, Technology and Logistics once the  required analyses have been completed. However, DOD did not offer  assurance that the Air Force would accomplish the required analyses that  evaluate the proposed passenger and cargo capability as we  recommended, and then submit such documentation to the Joint  Requirements Oversight Council for validation. We believe that the time it  could take to accomplish the required analyses and submit the analyses  for revalidation by the Joint Requirements Oversight Council, could delay  the Under Secretary’s certification until just prior to the Milestone B  decision, and may frustrate the congressional oversight that would  otherwise be permitted under section 2366a. We believe that in a program  committing $120 billion over several decades, the review confirming that  needs are justified should occur as far in advance of program initiation as  possible.
In light of the DOD comments on our report, we have put forward a matter  for congressional consideration. Specifically, we are suggesting that  Congress consider requiring  in addition to the certification described by section 2366a of title 10,  United States Code, the Under Secretary of Defense for Acquisitions,  Technology and Logistics make a specific certification that the Air Force  employed a sound, traceable, and repeatable process producing analyses  that determined if there is a gap, shortfall, or redundancy and assessed the  associated risk with regard to passenger and cargo capability for the KC- 135 Recapitalization, and    consistent with service policy, these analyses are made available to the  Joint Requirements Oversight Council prior to the Under Secretary’s  certification of the program pursuant to section 2366a of title 10, United  States Code.  The Air Force intends to replace the fleet of more than 500 tankers and the  Mobility Capabilities Study of 2005 set the requirement for tankers at a  range of between 520 to 640 aircraft. Replacement of this fleet is estimated  to cost a minimum of $72 billion. Compared to a refueling aircraft without  a passenger and cargo capability, the inclusion of the capability is  estimated, according to the Analysis of Alternatives done for the KC-X  tanker, to increase costs by 6 percent. The Joint Requirements Oversight  Council approval of the proposal of a replacement tanker aircraft with the  passenger and cargo capability, without an established need supported by  analyses and without an analysis of risk, could result in an unnecessary  expenditure of at least $4.3 billion by our estimates.
In our August 1996 report, U.S. Combat Air Power: Aging Refueling  Aircraft Are Costly to Maintain and Operate, we recommended  consideration of a dual-use aircraft that could conduct both aerial  refueling and airlift operations as a replacement for the KC-135. We  recommended that the Secretary of Defense require that future studies and  analyses of replacement airlift and tanker aircraft consider accomplishing  the missions with a dual-use aircraft. DOD only partially concurred with  this recommendation, expressing concern at that time about how a dual- use aircraft would be used and whether one mission area might be  degraded to accomplish the second mission. The lack of analyses done to  support the current proposal still does not give DOD officials information  about how a dual-use aircraft would be used or whether the primary  mission of aerial refueling would be degraded.
section_title: Employing Best Practices Can Shape Better Program Outcomes for DOD’s Airlift Acquisitions
paragraphs: Over the past 25 years, DOD has invested more than $140 billion on its  airlift and tanker forces. Success for acquisitions requires sound decisions  to ensure that program investments are getting promised returns—on time  deliveries to the field, predictable costs, and sufficient capability. We have  reviewed four major airlift programs and found they did not meet delivery  schedules and were over cost. These programs did not involve huge  technological leaps but presented significant design challenges to  integrate new systems into the older aircraft. A consistent problem  plaguing the programs was an insufficient job of analyzing the  requirements and resources at the programs’ outset, a key systems  engineering activity. The divergence between these programs’ experience  and best product development practices are contributing factors to their  outcomes.
subsections: section_title: Outcomes of Certain Airlift Programs
paragraphs: We assessed four airlift programs as part of our annual assessment of  DOD’s major acquisition programs and each has experienced cost growth  and schedule delays. Despite being based largely on low technological  risks involving mature systems, these programs have failed to deliver on  the business cases that justified their initial investment. DOD estimates it  will need over $12 billion between 2007 and 2013 to develop, modify, or  procure these aircraft. The specific airlift programs include    The Air Force’s C-5 Avionics Modernization Program (AMP) is intended to  improve the mission capability rate and transport capabilities, as well as  reduce ownership costs by incorporating global air traffic management,  navigation and safety equipment, modern digital equipment, and an all- weather flight control system.
The Air Force’s C-5 Reliability Enhancement and Reengining Program  (RERP) is intended to enhance the reliability, maintainability, and  availability of the C-5 through engine replacements and modifications to  subsystems such as the electrical and fuel subsystems. The C-5 aircraft  will require installation of the AMP capabilities before the aircraft engines  can be replaced.
The Air Force’s C-130 Avionics Modernization Program (AMP) is intended  to standardize the cockpit configurations and avionics of different models  of C-130 aircraft by providing such things as communication and  navigational system upgrades, terrain avoidance and warning system, dual  flight management systems, and new data links.
The C-130J, the latest model of the C-130 aircraft series, is designed  primarily for the transport of cargo and personnel within a theater of  operation. Variants of the C-130J are being acquired by the Air Force (e.g.,  Air Mobility Command and Special Operations Command), Marine Corps,  and Coast Guard.
Each of these programs has experienced problems that have impacted  cost and schedule (see table 1). The net effect of the outcomes to date is  that DOD is now paying more to modify or acquire these systems and the  warfighter has had to wait longer than initially planned before new  capability is delivered. For example, the Air Force now expects by 2011 to  have completed the modification of about 135 fewer C-130 airlift aircraft  when compared to its plan 2 years ago.
We anticipate there could be additional cost increases and schedule delays  reported in the future. For example, the C-130 AMP fiscal year 2008 budget  indicates that the total program costs have increased almost $700 million  and planned quantities have been reduced from 434 units to 268 units— nearly doubling the program acquisition unit costs since December 2005.  The program recently notified Congress of a critical Nunn-McCurdy  breach concerning its unit cost increases. The budget also shows the Air  Force plans to fund the modification of 110 C-5 aircraft with AMP  improvements instead of 59 aircraft as stated in last year’s budget.  According to C-5 RERP program officials, total program costs are  expected to increase due to costs with the engine, pylons, and labor.
section_title: Airlift Programs Have Not Captured Critical Product Knowledge at Key Decision Points
paragraphs: Over the last several years, we have undertaken a body of work that  examines weapon acquisition issues from the perspective that draws upon  lessons learned from best commercial practices for product development.  We have found that a key to successful product development is the  formulation of a business case that provides demonstrated evidence that  (1) the warfighter need exists and that it can best be met with the chosen  concept and (2) the concept can be developed and produced within  existing resources—including proven technologies, design knowledge,  adequate funding, and adequate time to deliver the product when needed.  The business case is then executed through an acquisition process that is  anchored in knowledge. Leading firms ensure a high level of knowledge is  achieved at key junctures in development, characterized as knowledge  points described below:    Knowledge point 1: A match must be made between the customer’s  needs and the developer’s available resources—technology, engineering  knowledge, time, and funding—before a program starts.
Knowledge point 2: The product’s design must be stable and must  meet performance requirements before beginning system demonstration.  This is primarily evidenced by the release of 90 percent of the design  drawings by the critical design review and successful system integration.
Knowledge point 3: The product must be producible within cost,  schedule, and quality targets and demonstrated to work as intended before  production begins.
There is a synergy in this process, as the attainment of each successive  knowledge point builds on the preceding one. We have found that if the  knowledge based acquisition concept is not applied, a cascade of negative  effects becomes magnified in the product development and production  phases of an acquisition program leading to cost increases and schedule  delays, poor product quality and reliability, and delays in getting new  capability to the warfighter (see figure 2).
DOD programs often do not capture sufficient knowledge by critical  junctures but decide to move forward regardless. The airlift systems we  reviewed were not immune to this condition and have experienced  unnecessary cost growth and schedule delays as a result. While we do not  have in-depth knowledge on the specific details for these programs, we do  have a broad understanding of the basic underpinnings that led to the  problems. All of the programs were considered low technological risks by  DOD because they planned to rely extensively on proven commercial and  modified off the shelf technology for its new capabilities. However, these  acquisitions have turned out to be more difficult than expected. The  programs did not follow sound systems engineering practices for analyzing  requirements and for ensuring a well integrated design at the right time. As  a result, each program has encountered some difficulty in achieving design  and production maturity as the program moved forward. Some of the  causes to problems encountered include    Failing to fully analyze the resources needed to integrate proven  commercial technologies and subsystems into a military system before  initiating development.
Not achieving a stable design before beginning system demonstration  phase resulting in costly design changes and rework.
Failing to demonstrate the aircraft would work as required before making  large production investments.
In all these instances where appropriate knowledge was not captured  before moving forward, the impact has resulted in a predictable need for  additional resources as shown below in specific airlift programs.
subsections: section_title: C-5 AMP
paragraphs: The C-5 AMP entered production without demonstrating that the system  worked as intended and was reliable. The program entered production just  2 months after flight testing started and ran into significant design  problems while trying to complete development. Problems uncovered  after flight test began required modifications to the aircraft design which  increased by 50 percent the number of engineering drawings needed for  the system. Addressing these problems delayed the initial operational  capability by a year and contributed to the significant growth in the  program’s unit costs. Even today, 4 years after production was initiated,  performance concerns remain with the C-5 AMP. The Director of  Operational Test and Evaluation recently reported that the C-5 AMP is not  operationally suitable because of high component failure rates, inadequate  diagnostics systems, and low reliability rates.
section_title: C-5 RERP
paragraphs: The C-5 RERP did not demonstrate design stability before entering the  system demonstration phase which resulted in rework and schedule  delays. At the time the program entered system demonstration, program  officials believed that they had released 90 percent of the design drawings  but had not successfully demonstrated that the subsystems could be  integrated onto the C-5 aircraft. During system integration activities the  program found that the “pylon/thrust reverser” had to be redesigned to  address overweight conditions and safety concerns. The program’s design  efforts have also been hampered by the fact that its success is dependent  upon the success of the C-5 AMP program. Presently, according to test  officials, the C-5 AMP design is not mature enough to provide a baseline  design for the RERP efforts. These design issues have contributed to an  increase in costs and a 2-year delay in delivering an initial operational  capability.
section_title: C-130 AMP
paragraphs: The C-130 AMP began development in 2001 without a clear understanding  of the resources needed to integrate proven commercial technologies into  a military system. According to the program office, they clearly  underestimated the complexity of the engineering efforts that were needed  to modify the different models of the C-130. At the critical design review  held in 2005—the point that the design is expected to be stable and ready  to begin the system demonstration phase—the program had not proven  that the subsystems and components could be successfully integrated into  the product.Upon integrating the new avionics into the test aircraft,  program officials realized that it had significantly underestimated (by 400  percent) the amount of wiring and the number of harnesses and brackets  needed for the installation. As a result, the design had to be reworked,  delaying the delivery of the test aircraft and increasing costs.
section_title: C-130J
paragraphs: The Air Force procured the C-130J without assurances that the aircraft  would work as intended. Program officials believed the design was mature  when procurement began in 1996, largely because the C-130J evolved from  earlier models and was offered as a commercial item. However, the C- 130J has encountered numerous deficiencies that had to be corrected in  order to meet the minimum warfighter requirements delaying the initial  aircraft delivery to the warfighter by about 1.5 years. DOD testing officials  still report performance issues with the aircraft resulting in it being rated  as partially mission capable. The performance issues involve the aircraft’s  ability to meet its airdrop operations requirements, its effectiveness in  non-permissive threat environments, and maintainability issues. Program  officials plan to address the deficiencies as part of a C-130J modernization  effort.
section_title: Conclusion
paragraphs: As we said at the beginning, our work shows that acquisition problems will  likely persist until DOD provides a better foundation for buying the right  things the right way. This involves making tough tradeoff decisions as to  which programs should be pursued, and, more importantly, not pursued,  making sure programs are executable, establishing and locking in needed  requirements before programs are ever started, and making it clear who is  responsible for what and holding people accountable when these  responsibilities are not fulfilled. Recognizing this, DOD has tried to  embrace best practices in its policies, as well as taking many other actions.  However, DOD still has trouble distinguishing between wants and needs.  Because of our concerns about the analyses done for both the MCS, which  has broad implications for DOD’s mobility needs, and the KC-X tanker  requirements, we would urge Congress and other decision makers to  exercise caution when making airlift and tanker investment decisions.
DOD will continue to face challenges in modernizing its forces with new  demands on the federal dollar created by changing world conditions.  Consequently, it is incumbent upon DOD to find and adopt best product  development practices that can allow it to manage its weapon system  program in the most efficient and effective way. Success over the long  term will depend on following knowledge-based acquisition practices as  well as DOD leadership’s commitment to improving outcomes.
The four acquisition cases we cite in this testimony are not atypical for all  programs. Even with no major technological invention necessary to meet  the warfighters needs in these cases, acquisition outcomes are not good.  There are consequences to these outcomes. The warfighter does not  receive needed capability on time and the Department and Congress must  spend additional unplanned money to correct mistakes—an expense they  can ill afford. A knowledge-based product development process steeped in  best practices from systems engineering can solve many of these problems  before they start. DOD knows how to do this and, in fact, informs its  acquisition policy with systems engineering rules. It should redouble its  efforts to drive these policies into practice.
Mr. Chairman and members of the Subcommittee, this concludes our  prepared statement. We would be pleased to answer any questions you  may have.
section_title: Contact and Staff Acknowledgements
paragraphs: For further information about this statement, please contact William M.  Solis at 202-512-8365 or Solisw@gao.gov or Michael J. Sullivan at 202-512- 4841 or Sullivanm@gao.gov. Contact points for Offices of Congressional  Relations and Public Affairs may be found on the last page of this  statement.
GAO staff who made major contributions to this testimony include Marie  Ahearn, Ann Borseth, Cheryl Andrew, Claudia Dickey, Mike Hazard,  Matthew Lea, Oscar Mardis, Sean Merrill, Karen Thornton, and Steve  Woods.
section_title: Related GAO Products
paragraphs: Defense Acquisitions: Major Weapon Systems Continue to Experience  Cost and Schedule Problems under DOD’s Revised Policy. GAO-06-368.  Washington, D.C.: April 13, 2006  Defense Acquisitions: Assessments of Selected Major Weapon Programs.  GAO-06-391. Washington, D.C.:March 31, 2006.
DOD Acquisition Outcomes: A Case for Change. GAO-06-257T.  Washington, D.C.: November 15, 2005.
Best Practices: Capturing Design and Manufacturing Knowledge Early  Improves Acquisition Outcomes. GAO-02-701. Washington, D.C.: July 15,  2002.
Defense Acquisitions: DOD Faces Challenges in Implementing Best  Practices. GAO-02-469T. Washington, D.C.: February 27, 2002.
Best Practices: Better Matching of Needs and Resources Will Lead to  Better Weapon System Outcomes. GAO-01-288. Washington, D.C.: March 8,  2001.
Defense Acquisition: Employing Best Practices Can Shape Better  Weapon System Decisions. GAO/T-NSIAD-00-137. Washington, D.C.: April  26, 2000.
Best Practices: Better Management of Technology Development Can  Improve Weapon System Outcomes. GAO/NSIAD-99-162. Washington,  D.C.: July 30, 1999.
Best Practices: Successful Application to Weapon Acquisition Requires  Changes in DOD’s Environment. GAO/NSIAD-98-56. Washington, D.C.:  February 24, 1998.
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