Defense Acquisitions: Observations on Whether the Military Service Chiefs' Role in Managing and Overseeing Major Weapon Programs Should Be Expanded
Published: 2014-05-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Nearly three decades ago, Congress enacted the Goldwater-Nichols Department of Defense Reorganization Act. As GAO has found, the act sought to strengthen civilian control over the acquisition function in DOD and establish a more streamlined chain of command for developing and procuring weapon systems. The reporting chain, which remains in effect today, runs upward from a program manager, through a program executive officer, to a service acquisition executive, and to the defense acquisition executive.
Many acquisition reform studies have identified a need for increased accountability in DOD's acquisition management chain of command. The Senate Armed Services Committee Report accompanying the National Defense Authorization Act for Fiscal Year 2014 mandated that GAO review DOD's acquisition chain of command. This report examines (1) findings and recommendations made by studies that assessed the role of the military service chiefs; and (2) how current DOD and military department policies define the roles and responsibilities of the service chiefs in acquisition management.
To do this work, GAO analyzed the findings and recommendations of six studies that discuss DOD acquisition chain of command issues and interviewed authors from the three most recently published studies. GAO also analyzed DOD and military department acquisition and requirements policies and guidance, and interviewed DOD officials.
section_title: What GAO Found
paragraphs: Five of the six studies GAO reviewed recommended an expanded role for the military service chiefs in acquisition management, often citing this as a means to improve the integration of the requirements and acquisition processes that support a weapon system's development. Three studies expressed concerns that the services have gone too far in their implementation of the Goldwater-Nichols Act and removed the service chiefs from the acquisition process. However, the studies provided little evidence or support that such a change would in fact improve program outcomes. Studies varied on the degree to which and ways in which service chiefs should be involved in the acquisition process. While two studies advocated strengthening service chief's roles and responsibilities within the current structure, three studies called for changing the current chain of command structure by making adjustments such as inserting the service chiefs above program executive officers. Authors GAO interviewed were uncertain what effect incorporating the chiefs of staff into the acquisition chain of command would have on individual programs. These authors noted that service chief involvement does not guarantee success for a weapon system program and, in fact, pointed to examples of past programs that had significant service chief involvement, but poor outcomes. Finally, the authors we interviewed agreed that strong leadership is essential to acquisition success, but all six studies identified other factors that need to be addressed in acquisition programs such as unrealistic and changing requirements, optimistic cost and schedule estimates, and issues with the current budgeting process.
DOD and military department policies provide the service chiefs multiple opportunities to be involved in the management and oversight of major defense acquisition programs. Although responsibility and authority differ for the two distinct processes of requirements and acquisitions, multiple reviews, milestone decision points, and mechanisms are in place for these two processes to work together in planning and executing programs. Within each military department, the service chiefs and their staffs lead the development of operational requirements and are supported by acquisition officials to help ensure that requirements are feasible and affordable. Similarly, as acquisition programs progress through key phases of planning, development, and production, opportunities exist for continued chief of staff involvement beyond requirements development. For example, the offices of the service chiefs participate in senior-level acquisition review boards that assess proposed programs and advise the service acquisition executive at key milestone decision points. Once a program has been established and development has begun, additional opportunities remain for service chiefs to monitor progress and help resolve any issues that may occur. For example, military departments are required to hold annual configuration steering board meetings to discuss tradeoffs between requirements and cost and schedule delays.
section_title: What GAO Recommends
paragraphs: GAO is not making recommendations.

section_title: Letter
paragraphs: Poor acquisition outcomes in major weapon system programs have been  a recurring problem for decades in the Department of Defense (DOD).  Programs too often have not delivered required capabilities when needed  at expected costs. We have found that many problems can be traced to a  culture in which the military services begin programs with unrealistic  requirements, immature technologies, overly optimistic cost and schedule  estimates, and the absence of disciplined systems engineering. Congress  and DOD have continually explored ways to improve acquisition  outcomes, including actions like the Weapon Systems Acquisition Reform  Act of 2009 and the department’s own “Better Buying Power” initiatives.
These and other reforms have emphasized sound management  practices, such as realistic cost estimating, prototyping, and systems  engineering. Our work has shown that when these practices are properly  implemented, they have a positive effect on individual acquisition  programs. However, all too often we have found that there is a lack of  discipline and accountability in planning and executing acquisition  programs, which leads to poor outcomes.
Many acquisition reform studies in the past have identified the need for  increased accountability in the DOD acquisition management chain of  command. Citing a recommendation made by the independent panel  review of the 2010 Quadrennial Defense Review to improve DOD’s in-line  management process for acquisition programs, the Senate Armed  Services Committee Report to accompany the National Defense  Authorization Act for Fiscal Year 2014 mandated GAO to review the  department’s acquisition chain of command. This report examines: (1)  the findings and recommendations made by studies that assessed the  role of military service chiefs in the DOD acquisition chain of command;  and (2) how current DOD and military department policies define the roles  and responsibilities of the military service chiefs in the management and  oversight of major defense acquisition programs.
In order to examine the findings and recommendations made by studies  that assessed the role of the military service chiefs in the DOD acquisition  chain of command, we first reviewed available literature on acquisition  reform and identified six studies published in the last decade that  discussed acquisition chain of command issues in DOD. We reviewed the  following six studies:
Business Executives for National Security: Getting to Best: Reforming  the Defense Acquisition Enterprise (2009)
Center for Strategic and International Studies: Beyond Goldwater- Nichols: U.S. Government and Defense Reform for a New Strategic  Era Phase II (2005)
Defense Business Board: Linking and Streamlining the Defense  Requirements, Acquisition, and Budget Processes (2012)
Panel of the Defense Acquisition Performance Assessment Project:  Defense Acquisition Performance Assessment Report (2006)
RAND: The Perfect Storm: The Goldwater-Nichols Act and Its Effect  on Navy Acquisition (2010)
United States Institute of Peace: The Final Report of the Quadrennial  Defense Review Independent Panel (2010)
We summarized and analyzed the studies’ findings and recommendations  to determine common themes and variations among the studies. We also  interviewed authors from the three most recently published studies—the  Defense Business Board, RAND, and Quadrennial Defense Review  Independent Panel studies—to gain further insight into the basis of  findings and recommendations.
To examine how current DOD and military department policies define the  roles and responsibilities of the military service chiefs in acquisition  management, we reviewed DOD and military department acquisition and  requirements policies, guidance, and other relevant documents. In  addition, we interviewed DOD and service level acquisition officials as  well as officials from the service chief offices within the military  departments to gain further insight into how these policies are carried out.  Further, we submitted questions to each of the service’s chiefs to obtain  their views on the current acquisition chain of command. As our focus for  this work was on the content of DOD policy, we did not assess the extent  to which the service chiefs are involved and able to influence individual  programs.
We conducted this performance audit from March 2014 through May  2014 in accordance with generally accepted government auditing  standards. Those standards required that we plan and perform the audit  to obtain sufficient, appropriate evidence to provide a reasonable basis  for our findings and conclusions based on our audit objectives. We  believe that evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The Packard Commission, tasked by President Reagan to review defense  management and organization, made a number of recommendations to  improve the way DOD acquires weapon systems, including the need to  establish “unambiguous authority for overall acquisition policy, clear  accountability for acquisition execution, and plain lines of command for  those with program management responsibilities.” Following the  commission’s recommendations, the Goldwater-Nichols Department of  Defense Reorganization Act of 1986 was enacted.the Act created the position of the Under Secretary of Defense for  Acquisition, now known as Under Secretary of Defense for Acquisition,  Technology, and Logistics (USD(AT&L)); established the military  departments as the force providers to the combatant commanders; and  mandated responsibility for acquisition to each respective military  department. In addition, the Goldwater-Nichols Act directed each   Among other things,  secretary to establish or designate a single office or other entity within  each department to conduct the acquisition function. Prior to the act, the  military departments often had offices in both the secretariat and the  service chief organizations that had responsibilities for the management  of the acquisition function. As we previously found, the act sought to  eliminate parallel or duplicate organizations that might have existed, and  strengthen civilian control by placing the single acquisition office in the  secretariats. Also, the President issued a directive that directed  implementation of another Packard Commission recommendation, to  establish a more streamlined acquisition chain of command in DOD. The  reporting chain, which remains in place today, runs upward from a  program manager, through a program executive officer (PEO), to the  service acquisition executive (SAE), and to the defense acquisition  executive (DAE), which is USD (AT&L). Figure 1 provides an overview of  the current acquisition chain of command in DOD and the military  departments.
Within DOD, three key acquisition decision-support processes influence  the planning and execution of weapon system programs—requirements  determination, resource allocation, and the acquisition management  system. Each process is managed and overseen by different  organizations and leaders within DOD and the military departments. At  the DOD level, USD(AT&L) is responsible for the acquisition function and  is the milestone decision authority (MDA) for major defense acquisition  programs,implementing the requirements process, and the Under Secretary of  Defense (Comptroller) is responsible for the resource process. Within the  military departments, where programs are largely planned and executed,  the service acquisition executive is responsible for the acquisition  process, while the service chief offices have primary responsibility for the  requirements and resourcing processes.   whereas the Joint Chiefs of Staff are responsible for  Interim DOD Instruction 5000.02—the department’s primary acquisition  policy instruction that guides the acquisition process—states that the  acquisition, requirements, and resource processes are closely related and  “must operate simultaneously with full cooperation and in close   Further, this instruction states that adjustments may have  coordination.” to be made to keep these three processes aligned throughout the course  of a program lifecycle. Similarly, the Chairman of the Joint Chiefs of Staff  Instruction 3170.01H, the department’s primary policy guiding capability  requirements development, emphasizes that the three processes “must  work in concert to ensure consistent decisionmaking while delivering   In recent  timely and cost effective capability solutions to the warfighters.”years, Congress and DOD have taken steps to strengthen the integration  of the acquisition and requirements processes. For example, the  department has added new decision points and reviews for weapon  programs as they progress through the acquisition process. Additionally,  USD (AT&L) now serves as an advisor to the council that reviews  requirements for major weapon programs.
section_title: Studies Recommended Expanding Service Chiefs Role in Acquisition to Varying Degrees, but Potential Effect on Improving Acquisition Outcomes Is Unclear
paragraphs: Five of the six studies we reviewed recommended an expanded role for  the service chiefs in acquisitions, often citing this as a means to improve  the integration of the acquisition, requirements, and resourcing  processes, as well as improve authority and accountability for DOD  acquisition programs. Three of the studies noted that increased  involvement of the service chiefs would help facilitate cost, schedule, and  requirements trade-off decisions during program planning, and may result  in more affordable and executable acquisition programs. Also, three of  the studies expressed concerns that the service chiefs are not sufficiently  involved because the services had gone too far in their implementation of  the Goldwater-Nichols Act and removed the service chiefs from the  acquisition decision process. Although the Goldwater-Nichols Act directed  each military department secretary to establish a single office within their  department, now known as the service acquisition executive, to conduct  the acquisition function, the act did not preclude the service chiefs from  actively participating in acquisitions. The same three studies stated that  implementation of the act may have contributed to fragmentation among  the requirements, resources, and acquisition processes. GAO has  previously found that these processes are fragmented, making it difficult  for the department to achieve a balanced mix of weapon systems that are  affordable and feasible and provide the best military value to the  warfighter. Furthermore, we found that because the processes are led  by different organizations, it is difficult to hold any one person or  organization accountable for saying “no” to a proposed program or for  ensuring that the department’s portfolio of programs is balanced. The  following table summarizes the findings and recommendations of the  studies included in our review that are related to acquisition management  and oversight.
The studies we reviewed agree that chain of command adjustments are  needed, but their views on the specific role for the service chiefs varied.  For example, one study identified the need for more service chief  involvement throughout the Navy’s acquisition process, but it did not  specify how this should occur. When we talked to the authors of this  study, they stated that the current framework for the acquisition chain of  command does not need to be changed but that the service chief’s  involvement and authority should be enhanced throughout. One way they  suggested doing this was to make the service chief a co-chair with the  service acquisition executive during major program reviews. Similarly,  another study recommended that service chiefs be more engaged and  accountable within the current acquisition process through the  strengthening of partnerships between requirements, acquisition, and  resource leaders. Another study recommended the need for more  authority in an unbroken chain of line management, but provided no  indication as to how the service chief would fit into the new line  management. The other three studies called for changing the current  chain of command structure by making adjustments such as inserting the  service chief over program managers and program executive officers.  Furthermore, GAO assessed a number of acquisition reform proposals  several years ago, including one to modify the service chief’s role in  acquisitions, and found in interviewing multiple experts that there was no  consensus on whether the service chiefs should be added into the direct  line of command for acquisitions.
While studies have advocated for a stronger role for the service chiefs in  the acquisition chain of command, they provide little evidence or support  that this would in fact improve program outcomes. Study authors we  interviewed were unsure of the effects on the acquisition process of more  involvement from the service chiefs. Authors pointed out that the service  chiefs had significant influence on certain programs in the past, but their  involvement did not always result in successful cost, schedule, or  performance outcomes. For example, authors noted significant  involvement of service chiefs in programs such as the Navy’s Littoral  Combat Ship and the Army’s Future Combat System, but these programs  suffered poor outcomes. In both cases, the service chiefs of these  services viewed the programs as vital to their operational capabilities and  needed to be fielded quickly. These programs pursued aggressive  acquisition strategies that pushed the programs through development  with ill-defined requirements and unstable designs, which contributed to  significant cost and schedule increases and, in the case of the Future  Combat System, a cancellation. Further, the authors of one study  believed that including the service chief in the acquisition process may  actually exacerbate current acquisition challenges by creating a break in  the chain of command. Instead, they believe that authority of the current  chain of command needs to be reinforced through appointing  knowledgeable, strong leaders into management positions and limiting  the number of people who can directly influence program managers.  Lastly, although some studies point to acquisition problems resulting from  a lack of service chief involvement following the implementation of the  Goldwater-Nichols Act in the 1980s, DOD experienced acquisition delays  and cost overruns for many years prior to the Goldwater-Nichols Act.
We have reported on poor acquisition outcomes as far back as 1970.
Authors we interviewed all agreed that despite uncertainty about the  effects of an expanded service chief role in management of acquisitions,  strong leadership is key to ensuring programs achieve positive outcomes.  One study identified the F-15 program as an example where leadership  helped bring about positive outcomes. In this case, there was heavy involvement from senior leadership, including the Secretary of Defense,  which resulted in delivering the aircraft to the warfighter on time and  under cost. Leadership directed an incremental approach for the  development of the aircraft based on reasonable requirements and using  relatively mature technologies versus a revolutionary approach using  unrealistic requirements and immature technologies. GAO previously  found that strong leadership is key to stable and successful acquisition  programs. GAO found that stable programs, such as the Air Force’s Small  Diameter Bomb and Navy’s P-8A Poseidon Multi-Maritime Aircraft, were  supported by strong, disciplined leaders who helped foster the planning  and execution of a solid business case for these programs.
Finally, all six of the studies we reviewed suggested that changes to the  chain of command alone will not be sufficient to address all of the  challenges faced by major acquisitions. All of the studies presented  additional recommendations to improve acquisition policy and processes  at the program level to include ensuring: (1) a well trained and  experienced acquisition workforce; (2) sufficient tenure in program  management assignments to allow for continuity in the oversight of  acquisitions; and (3) incentives for attracting and retaining knowledgeable  individuals, including systems engineers. Other studies discussed the  need to fix unrealistic and changing requirements, optimistic cost and    schedule estimates, and issues with the current budgeting process. GAO has also made similar conclusions and recommendations in all of  these same areas. Together, these issues and others contribute to poor  acquisition outcomes.
section_title: DOD and Military Department Policies Provide Service Chiefs Multiple Opportunities for Involvement in Oversight and Management of Acquisitions
paragraphs: DOD and military department requirements and acquisition policies define  several decision points, reviews, and mechanisms in which the service  chiefs or their supporting staff offices can participate in the management  and oversight of acquisition programs. Generally, major defense  acquisition programs go through a series of phases as they progress from  the determination of the need for a new system, through initial planning of  a solution, to system development, and finally production and deployment  of a fielded system. An initial capability requirements document, which is  intended to identify a capability need, drives the early phase of an  acquisition program where potential weapon system solutions are  assessed and then the technologies associated with the specific solution  to be pursued are matured. These activities are intended to lead to a  more refined set of capability requirements, which along with several  other acquisition-related analyses and documents (e.g., acquisition  strategy, cost estimates, and test and evaluation plan), allow for the  formal start of system development and entrance into the engineering and  manufacturing phase of an acquisition. When the system has completed  development and testing, the requirements may be updated and the  system moves into production and eventually to deployment in the field.
As major defense acquisitions programs progress through the  requirements and acquisition processes, there are several key stages  where DOD-level reviews and approvals are required. Capability  requirements documents for these programs are assessed and validated  by the Chairman of the Joint Chiefs of Staff with the advice of the Joint  Requirements Oversight Council (JROC), which is chaired by the Vice  Chairman of the Joint Chiefs of Staff and is comprised of the Vice Chiefs  of Staff of each military service. As major defense acquisition programs  go through the iterative phases of the acquisition process, they are  reviewed by the Defense Acquisition Board, which is chaired by  USD(AT&L) and includes the secretaries of the military departments and  other senior leaders. However, prior to these DOD-level reviews,  programs have requisite reviews and approvals starting at the military  service level where the service acquisition executives and service chiefs  are involved. Military service processes for approving requirements and  acquisitions essentially mirror the DOD process. Figure 2 below provides  a notional depiction of the major phases, milestone decision points, and  reviews involved at both the DOD and military department levels.
subsections: section_title: Requirements Development within the Military Departments
paragraphs: DOD policy states that requirements must be validated before an  acquisition program can start system development. The service chiefs  and their supporting staff offices lead operational requirements  development within each military department and approve associated  documentation prior to JROC reviews at the DOD-level. Each military  department uses a tiered requirements development and approval  process supported by acquisition and other functional offices.  Requirements that are developed for major defense acquisition programs  are reviewed and validated by a senior-level requirement review board  usually chaired by the service or vice chief of staff. Each military  department uses somewhat different approaches and mechanisms within  this tiered process to facilitate stakeholder involvement. For instance,  according to Air Force policy, a high performance team is established at  the outset of an identified capability need and used to develop and refine  requirements during program development and production. The team is  intended to provide a forum for functional stakeholders to develop and  assess program requirements prior to validation. Similarly, Army policy  requires a team approach to developing requirements—integrated  capabilities development teams—which are comprised of personnel from  different functional areas. The Navy revised its requirements and  acquisition processes several years ago into a two-pass, six-gate review  framework, which is intended to strengthen integration between the two  processes. Under the framework, the service chief chairs the first “pass”  of gates which cover the requirements development and materiel solution  analysis phases of a program, and the Navy’s acquisition executive chairs  the second “pass” of gates which comprise system development,  production, and sustainment. According to Navy officials we spoke with,  the service chief and the acquisition executive are both actively involved  in all the gate reviews for major acquisition programs.
section_title: Acquisition Planning and Execution within the Military Departments
paragraphs: Although responsibility and authority for major defense acquisition  programs generally resides with the service or defense acquisition  executives, DOD and military department acquisition policies provide  opportunities for continued service chief involvement beyond  requirements definition, throughout the life cycle of a program. As  programs progress through key phases of the acquisition process,  program managers are often supported by integrated product teams  comprised of stakeholders from several functional areas across the  acquisition, requirements, and resource communities. The teams are  intended to help the program manager plan and execute an acquisition,  as well as identify and resolve issues that may come up along the way.  According to service officials we met with, representatives from the offices  of the service chiefs are usually members of these teams. At milestone  decision points, programs are subject to higher level reviews and  approvals by service level panels and acquisition boards that also include  representatives from the different functional areas. For example, each of  the services has an acquisition review board comprised of senior leaders  that assess programs and advise the service acquisition executive on  milestone decisions. Generally, the service vice chiefs are members of  these boards.
The military departments have all modified their acquisition processes in  recent years, in part to improve integration of requirements and  acquisitions, and plan more affordable and feasible programs. As  described above, the Navy’s two-pass, six-gate framework is intended to  facilitate greater coordination between the requirements and acquisition  communities. Although the Navy acquisition executive chairs a series of  gates that support program technology development and production, the  service chief, or designee, is required to participate in these gate reviews.  In addition, the Air Force recently revised its acquisition policy to  incorporate an integrated life cycle management approach that, according  to officials, has streamlined roles and responsibilities within the  acquisition and systems commands and increased opportunities for  collaboration between the requirements and acquisition communities as a  weapon system is developed. Also, according to officials, the Army is  instituting customized sets of “knowledge point” meetings for certain  acquisition programs, which are to occur before key milestones and  provide a forum to discuss, among other things, tradespace within the  program. Officials believe these meetings will support better integration  and insight needed for making milestone decisions.
Once an acquisition program has been established and enters into  systems development, the military services conduct regular reviews to  monitor the program’s progress in achieving cost, schedule, and  performance targets and to resolve any issues that may occur. These  reviews provide opportunities for stakeholders, such as the offices of the  service chiefs, to gain visibility into programs and weigh in on changes  that may be needed. Major defense acquisition programs, for example,  are required by DOD policy to undergo a defense acquisition executive  summary process, which includes a quarterly assessment. There are  service level reviews that either coincide or supplement these DOD  reviews. In addition, in 2008, Congress required DOD to conduct  configuration steering board reviews of major defense acquisition  programs, to assess requirements and configuration changes that could  adversely affect program cost and schedule. Statute requires that the  boards, which are chaired by the service acquisition executive and  include senior service chief representatives and others, conduct program  reviews at least annually. Should these reviews support a reduction to  formal requirements, then the change would go through the service and  DOD-level requirements process for approval. Further, when a program  is ready to move into production, requirements are generally reviewed  again and reaffirmed by the service chiefs and the JROC through the  requirements process.
section_title: Concluding Observations
paragraphs: Poor acquisition outcomes have been a long-term problem in DOD and  many inter-related factors contribute to this condition. As GAO and other  acquisition experts have previously found, the array of factors include  unrealistic requirements, lack of disciplined systems engineering, overly  optimistic cost and schedule estimates, insufficient acquisition workforce,  and frequent program manager turnover. Changing the culture and  incentives in DOD that cause these factors to be prevalent has been  difficult. The studies we reviewed provide limited evidence that acquisition  problems in DOD are caused by the military service chiefs having too  small a role in managing and overseeing acquisition programs, or that the  problems would be solved by expanding the service chiefs’ role. Existing  policies and processes for planning and executing acquisition programs  provide multiple opportunities for the service chiefs to be involved in  managing acquisition programs and to help ensure programs meet cost,  schedule, and performance targets. Whether the service chiefs are  actively involved and choose to influence programs is not clear. However,  we agree with acquisition studies that the current acquisition process  does not function efficiently or as planned, and that greater discipline and  accountability is needed. While organizational changes can be an  important part of the solution, at this point they should not take  precedence over efforts to improve the acquisition process itself, build a  more robust acquisition workforce, and foster a culture in which incentives  are better aligned with good acquisition practices.
section_title: Agency Comments
paragraphs: We are not making recommendations in this report. We provided a draft  of this product to DOD for comment. The department responded that it did  not have any formal comments on the report. However, DOD provided a  few technical comments which we incorporated into the report, as  appropriate.
We are sending copies of this report to the appropriate congressional  committees and the Secretary of Defense. In addition, the report is  available at no charge on the GAO website at http://www.gao.gov  If you or your staff have any questions about this report, please contact  me at (202) 512-4841 or sullivanm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix I.
section_title: Appendix I: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact name above, individuals making key  contributions to this statement include John Oppenheim, Assistant  Director; Tom Twambly, Megan Porter, Claire Li, Peter Anderson, and  Marie Ahearn.