GAO: Costs, delays seen in weapons programs

With both Congress and the Defense Department eying cuts to large military weapons acquisitions, the Government Accountability Office threw fuel on the fire with a recent annual report that showed continuing high development costs and delays in many of the DOD’s major programs.

Research and development costs were 42 percent higher than originally estimated for the 2008 portfolio of 96 programs, and the average delay in delivering initial capabilities had increased to almost two years, the GAO said in the report released March 30.

Just 10 programs make up over half of the DOD portfolio. The total estimated development cost for them has grown by just under a third compared to initial estimates, from about $134 billion to over $177 billion.

Taken as a whole, the GAO said, total program acquisition unit costs on the programs have grown significantly. The two largest programs – the DOD’s Joint Strike Fighter and the Army’s Future Combat Systems – still represent significant future cost risk “and will dominate the portfolio for years.”

“Since these programs consume such a large portion of the funding that DOD spends on research and development and procurement,” the GAO said, “their performance also affects other major weapon acquisitions, smaller acquisition programs, and DOD’s ability to fund and acquire other supplies and equipment.”

The FCS program, which is a linchpin of the military’s plans for net-centric warfare, has become a particular target for potential cuts. Its initial estimated cost of just under $90 billion has since ballooned to nearly $130 billion, a 45 percent increase.

After almost six years of development, the Army has spent more than half of its planned development funds for FCS, the GAO pointed out, and many of the 50 or so complementary systems it has to interoperate with to meet performance objectives are themselves still being developed.

If those complementary systems cannot meet FCS requirements, then the FCS program may need to change its design or sacrifice capabilities, the GAO said, adding that the DOD has already instructed the Army to prepare an alternative acquisition strategy that involves a more incremental approach to FCS development.

Delays with other programs would also cause similar interactive angst. The Navy’s Mobile User Objective System, for example, is a key satellite communication system that will increase narrowband communications capabilities for users worldwide. But delays to the Joint Tactical Radio System, a set of software-defined radios and itself an FCS spinoff, could mean these advanced MUOS capabilities will be drastically underused, at least initially.

John Young, the Pentagon’s acquisition chief in the Bush administration, tried to throw some cold water on the GAO’s findings in his comments on the report. Much of the increase in costs can be attributed to older programs that were initiated many years ago, he said, while newer programs that began under improved acquisition processes do not show the same cost spurts.

Also, he said, recently developed acquisition metrics that weren’t included in the GAO report will provide for a better assessment of the portfolio and program policies in the future.

Nevertheless, change seems inevitable. Just a week before the GAO published its report, Ashton Carter, who will take over from Young for the Obama administration, told the Senate Armed Services Committee that he will work to keep immature technologies from moving through the procurement system, and that he would demand more realistic cost assessments.

He promised a program-by-program review to find out why programs had gone so far over cost estimates and had dropped so far behind schedule, and warned that troubled programs could be cut.