Center for Arms Control and Non-Proliferation

Despite Soaring Budgets, Pentagon's Weapons Acquisitions Process Falters

by Travis Sharp [contact information]

By Travis Sharp and Meghan Warren
June 16, 2008

The past decade has seen incredible growth in the amount of money spent by the United States on its national defense. The U.S. defense budget is now at its highest level, in inflation-adjusted terms, since World War II. When including war costs, defense expenditures have increased 86% since September 2001.

A key reason for skyrocketing costs is the inefficiency of the Department of Defense's weapons acquisitions process. In mid-2008, the Government Accountability Office released three reports examining the problem. All three reports are based on a GAO assessment of 72 weapons programs, none of which satisfied GAO's standards for a successful, efficient program. GAO's analyses serve as a resounding critique of DOD's ineffective and extremely costly acquisitions process.

GAO found that while acquisition costs have gone up 120% in the past fifteen years, the number of new systems has not mirrored that growth. When the military fails to acquire new technologies, it is forced to spend money renovating existing "legacy" systems, which only compounds the problem because then the government must pay to develop and operate both "old" and "new" components that don't work well together.

In the three reports, GAO analyzed a number of factors that have led to DOD's failure to acquire new systems on time and on budget. GAO noted that DOD fails to prioritize which programs it would like to pursue, leading it to develop more unproven technologies than its limited resources can sustain. Reform must begin with careful decision-making; that is, appropriate officials must determine which programs are necessary and, more importantly, which are not. Part of making these decisions involves choosing programs that are practical and well-developed enough to carry out within the allotted budget.

At the heart of the flawed acquisitions process are problems at both the strategic and programmatic levels. Strategically, DOD lacks a uniform process for effectively identifying weapons needs, allocating funds, and procuring weapons systems. This leaves DOD unable to prioritize which projects are the most urgent and practical for military needs.

Programmatically, new weapons systems are often funded and undertaken without sufficient existing knowledge about their requirements, technology, and production processes, a pattern often referred to as "spiral development." In other words, DOD allocates money for programs that have not been fully mapped out, causing them frequently to suffer through cost growth, acquisition delay, and even failure.

Also plaguing the procurement of new systems is frequent turnover of project managers, which undermines continuity and accountability. The increasing use of contractors who, as a result of weak program leadership, have not been provided clear incentives to finish work on schedule and on budget is another worrisome trend.

GAO reported that efforts have been undertaken in order to improve the acquisitions process. It points out, however, that while Congressional mandates and DOD initiatives have begun to remedy the problem (by stipulating that programs meet specific criteria at specific points in production, known as "decision points"), all parties involved in the process must agree on uniform goals and standards. An individual program can implement new standards for production, but if those in charge of determining which programs to pursue continue to allocate funds for poorly-planned weapons systems, costs will continue to skyrocket. Changes must occur at the top as well as the bottom.

The United States is at a key juncture when it comes to weapons procurement. The wear and tear of years of war in Iraq and Afghanistan demand that investments be made to recapitalize, repair, and restore existing platforms and assets. At the same time, the United States must invest in advanced technologies to prepare for future security challenges, such as maintaining the American military edge over potential adversaries and tailoring American responses to terrorist organizations, failed states, and civil wars.

With most analysts predicting defense budget contractions in the years ahead, DOD can only recover from the past and present, while preparing for the future, if it fixes the acquisitions process and starts giving American taxpayers the return-on-investment they deserve. It is up to the next President and the 111th Congress to see that steps are taken right away to ameliorate the crisis in weapons acquisitions.