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

Letter

Background

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.

Studies Recommended Expanding Service Chiefs Role in Acquisition to Varying Degrees, but Potential Effect on Improving Acquisition Outcomes Is Unclear

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.

DOD and Military Department Policies Provide Service Chiefs Multiple Opportunities for Involvement in Oversight and Management of Acquisitions

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.

Requirements Development within the Military Departments

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.

Acquisition Planning and Execution within the Military Departments

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.

Concluding Observations

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.

Agency Comments

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.

Appendix I: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

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.