In May 2009, Congress passed the Weapon Systems Acquisition Reform Act of 2009 (Reform Act) in an effort to improve the way weapon systems are acquired and avoid further cost overruns on such programs. When signing the Reform Act into law, the President stated that its purpose was to limit weapon system cost overruns and that it would strengthen oversight and accountability by appointing officials who will closely monitor the weapons systems acquisition process to ensure that costs are controlled. Four offices were established as a result of the Reform Act: SE, DT&E, CAPE and PARCA. The SE and CAPE offices existed under other organizational titles prior to the Reform Act. Staffing levels, following the Reform Act, remained relatively stable for both of these offices, but some reorganization was necessary to reflect new Reform Act responsibilities. The DT&E and PARCA offices were newly established. The key roles and responsibilities of these four offices as outlined in the Reform Act are explained below: Each of the offices has varying levels of interaction with defense acquisition programs. For example, the SE and DT&E offices have ongoing interaction with acquisition programs throughout development in the form of program reviews, working group activities, and other program meetings. They also coordinate program documents in preparation for major milestone reviews. CAPE issues guidance to programs on how to conduct an analysis of alternatives at the beginning of the acquisition process. The office approves the analysis of alternative study plan that is developed based on its guidance. It then develops independent cost estimates for major milestone reviews and in the event that an acquisition program experiences a Nunn-McCurdy breach. According to PARCA, it assesses all major defense acquisition programs at least once per quarter or when requested by the Under Secretary of Defense for Acquisition, Technology and Logistics, and disseminates this information to senior leaders. The office also interacts with specific programs if they experience a Nunn-McCurdy breach. In these cases, the office assesses program performance not less than semi-annually until 1 year after it receives a new milestone approval. In addition to the new organizational requirements, the Reform Act requires DOD to ensure that the acquisition strategy for major defense acquisition programs includes measures to ensure competition or the option of competition throughout the program life cycle. This could include strategies such as maintaining two sources for a system (dual-sourcing) and breaking requirements for supplies or services previously provided or performed under a single contract into separate smaller contracts (unbundling of contracts). Major defense acquisition programs are also required to provide for competitive prototyping—where two or more competing teams produce prototypes before a design is selected for further development—prior to Milestone B unless a waiver is properly granted by the milestone decision authority, and to meet the following Milestone B certification requirements, including: Appropriate trade-offs among cost, schedule, and performance objectives have been made to ensure the program is affordable; A preliminary design review and formal post-preliminary design review assessment have been conducted and on the basis of such assessment the program demonstrates a high likelihood of accomplishing its intended mission; Technology has been demonstrated in a relevant environment on the basis of an independent review and assessment by the Assistant Secretary of Defense for Research and Engineering; Reasonable cost and schedule estimates have been developed to execute, with concurrence of the Director of CAPE, the program’s product development and production plan; Funding is available to execute the program’s product development DOD has completed an analysis of alternatives with respect to the The Joint Requirements Oversight Council has approved program requirements, including an analysis of the operational requirements. The Reform Act also requires the Joint Requirements Oversight Council to ensure trade-offs among cost, schedule, and performance objectives are considered for joint military requirements. GAO previously reported that the Council considered trade-offs made by the military services before validating requirements, but the military services did not consistently provide high-quality resource estimates to the Council for proposed programs in fiscal year 2010. We also found that the Council did not prioritize requirements, consider redundancies across proposed programs, or prioritize and analyze capability gaps in a consistent manner. DOD has implemented most of the fundamental Reform Act provisions as required and is taking additional steps to strengthen acquisition reviews, policies, and capabilities. Offices established as a result of the Reform Act are continuing to issue policies, review and approve relevant acquisition documents, monitor weapon acquisition program activities, and develop performance measures. In addition, all four of the major defense acquisition programs we reviewed that had not started development when we selected our case studies plan to implement Reform Act provisions regarding preliminary design reviews, competitive prototyping, and competition. Also, some provisions, such as issuance of guidance on estimating operating and support costs, by the CAPE, are still in the process of being completed. Finally, we found that the Under Secretary of Defense for Acquisition, Technology and Logistics has revised the defense acquisition review process to consider additional knowledge collected on programs earlier and efforts are being made to strengthen acquisition policies and capabilities. The offices established as a result of the Reform Act—SE, DT&E, CAPE, and PARCA—are continuing to make progress in implementing four fundamental Reform Act provisions aimed at strengthening acquisition outcomes and oversight of weapon acquisition programs. Specifically, the offices are (1) developing policy and guidance to the military services for conducting work in their respective areas, (2) approving acquisition documents prior to milestone reviews, (3) monitoring and assessing weapon acquisition program activities on a consistent basis, and (4) developing performance measures to assess acquisition program activities. Figure 1 provides the status of DOD efforts to implement the four fundamental provisions. Some offices are still in the process of completing a few of these provisions. For example, CAPE and PARCA are in the process of developing policies and guidance for their respective areas and DT&E is in the process of establishing performance measures that can be used to assess weapon acquisition program activities. The office piloted the performance measures on two major defense acquisition programs and reported that they are currently applying them to over 40 programs. Note that some activities related to approving documents and monitoring or assessing programs require on-going efforts on the part of some of the offices. We also found evidence that major defense acquisition programs are integrating Reform Act provisions in their acquisition strategies. The four weapon acquisition programs we reviewed that had not started development activities when we began our review plan to implement Reform Act provisions related to preliminary design reviews, competitive prototyping, and competition. For example, the Ground Combat Vehicle has two contractors developing competitive prototypes of two key subsystems to support technology development. The program intends to conduct preliminary design reviews on both contractors’ designs prior to Milestone B and to conduct full and open competition through Milestone C. Similarly, according to program officials, the Joint Light Tactical Vehicle program had three contractors develop full-system prototypes during the technology development phase and held preliminary design reviews on each contractor’s design prior to Milestone B. The program plans to continue competition throughout engineering and manufacturing development. None of the four programs in our review received a waiver from Reform Act provisions. OSD is taking additional steps to strengthen the department’s oversight of weapon acquisition programs and guidance for developing the programs. In June 2011, for example, the Under Secretary for Acquisition, Technology and Logistics revised the weapons acquisition review process to consider acquired knowledge on weapon acquisition programs earlier than before. The revised review process includes two new review points. The first new review—the pre-engineering and manufacturing development review—occurs before the release of a final request for proposal for the engineering and manufacturing development phase. The purpose of this new review is to assess each program’s acquisition strategy, request for proposal, and key related planning documents earlier in the process, and to determine whether program plans are affordable, executable, and reflect sound business arrangements. The second new review—the acquisition strategy and request for proposals review and approval—occurs prior to Milestone C, the production decision. The review provides the milestone decision authority an opportunity to review the acquisition strategy and request for proposals for the production and deployment phase prior to Milestone C. Figure 2 illustrates the revised review process. According to the Under Secretary of Defense for Acquisition, Technology and Logistics, who is the authority for making milestone decisions for most major weapon acquisitions, the prior review process did not provide an adequate opportunity for review of program plans prior to release of the final request for proposals—the point at which DOD’s requirements, schedule, planned program content, and available funding should be firm and available for review. Further, the Under Secretary stated that making changes to acquisition strategies and program plans after all bidding activities, proposal evaluation, and source selection are complete is difficult and highly disruptive. DOD is also rewriting the DOD Instruction 5000.02 to include an extensive restructure of acquisition policies according to the Under Secretary of Defense for Acquisition, Technology and Logistics. This update will implement Section 832 of the National Defense Authorization Act for Fiscal Year 2012, which requires DOD to issue guidance on actions to be taken to improve its processes for estimating, managing, and reducing operation and support cost, as well as ensure competition in maintenance and sustainment of subsystems of major weapon systems, among other things. In addition to current policies implementing the Reform Act, officials stated that key provisions from the Reform Act will also be included in the updated instruction. In addition to implementing the provisions of the Reform Act, DOD offices have taken other steps to strengthen acquisition capabilities throughout the department. For example: The SE office, according to DOD officials, led efforts to establish working groups to help the services address systemic reliability issues across the unmanned aircraft and rotary wing portfolios earlier in the process. The office also led several workforce development initiatives to attract and retain a qualified engineering workforce and supported the implementation of legislation requiring each acquisition program office to name a key technical advisor who is responsible for all engineering activities.