GAO Blasts Weapons Budget; Cost Overruns Hit $295 Billion
- From: Jack Linthicum <jacklinthicum@xxxxxxxxxxxxx>
- Date: Tue, 1 Apr 2008 03:22:40 -0700 (PDT)
Pic of the LCS launch at the cite.
"The report details such projects as the Navy's $5.2 billion Littoral
Combat Ship, which has had such extensive troubles that the service
expects the cost of its first two ships to exceed their combined
budget of $472 million by more than 100 percent. The Navy canceled
construction of the planned third and fourth ships by Lockheed Martin
and General Dynamics, the prime contractors on the project."
GAO Blasts Weapons Budget
Cost Overruns Hit $295 Billion
By Dana Hedgpeth
Washington Post Staff Writer
Tuesday, April 1, 2008; A01
Government auditors issued a scathing review yesterday of dozens of
the Pentagon's biggest weapons systems, saying ships, aircraft and
satellites are billions of dollars over budget and years behind
schedule.
The Government Accountability Office found that 95 major systems have
exceeded their original budgets by a total of $295 billion, bringing
their total cost to $1.6 trillion, and are delivered almost two years
late on average. In addition, none of the systems that the GAO looked
at had met all of the standards for best management practices during
their development stages.
Auditors said the Defense Department showed few signs of improvement
since the GAO began issuing its annual assessments of selected weapons
systems six years ago. "It's not getting any better by any means,"
said Michael Sullivan, director of the GAO's acquisition and sourcing
team. "It's taking longer and costing more."
Chris Isleib, a Pentagon spokesman, said in a written statement, "We'd
like to look at what GAO has said, and then at the appropriate time
make an informed comment."
The Pentagon has doubled the amount it has committed to new systems,
from $790 billion in 2000 to $1.6 trillion last year, according to the
205-page GAO report. Total acquisition costs in 2007 for major defense
programs increased 26 percent from first estimates. In 2000, 75
programs had cost increases totaling 6 percent. Development costs in
2007 for the systems rose 40 percent from initial projections,
compared with 27 percent in 2000. Current programs are delivered 21
months late on average, five months later than in 2000.
"In most cases, programs also failed to deliver capabilities when
promised -- often forcing war fighters to spend additional funds on
maintaining" existing weapons systems, the report says.
The GAO chose 72 of the 95 systems to examine, based on high-dollar
value and congressional interest. The various systems were at
different stages of the acquisition process over the last year.
The report details such projects as the Navy's $5.2 billion Littoral
Combat Ship, which has had such extensive troubles that the service
expects the cost of its first two ships to exceed their combined
budget of $472 million by more than 100 percent. The Navy canceled
construction of the planned third and fourth ships by Lockheed Martin
and General Dynamics, the prime contractors on the project.
The government is facing higher development costs on eight major
programs, including Lockheed Martin's Joint Strike Fighter and
Boeing's Future Combat Systems, a technology to connect unmanned
aircraft and vehicles. The prices for those two programs have risen 36
percent and 40 percent, respectively, from the initial contracts, the
GAO said, partly because the government wants "new and unproven
technologies" and did not undertake early analysis to make sure its
requirements could be met.
In a statement, Lockheed said that the Joint Strike Fighter "is
performing solidly, making outstanding technical progress in the
context of the most complex aircraft ever built" and that "the bedrock
and the cornerstone" of the F-35 program have been "affordability and
cost containment."
In another case, the initial contract target price of Boeing's program
to modernize avionics in the C-130 cargo plane is expected to
skyrocket 323 percent, to $2 billion. Another Boeing program, for a
radio system, is up 310 percent, to $966 million.
"Boeing's commitment is to deliver on our promises to our military
customers and meeting their requirements in the most cost-effective
way possible," the company said in a statement.
The GAO's Sullivan said the reasons for the cost overruns and delays
are threefold: There are too many programs chasing too few dollars;
technologies are often not mature enough to go into production; and it
takes too long to design, develop and produce a system.
"They're asking for something that they're not sure can be built,
given existing technologies, and that's risky," Sullivan said in an
interview.
Costs of some systems were driven up as much as 72 percent when
changes were made to the program requirements after development of the
system had begun, the report says. Half of the programs studied had 25
percent increases in the expected lines of code in their software.
Steven L. Schooner, co-director of the government procurement law
program at George Washington University, said the GAO's report reveals
the recurring problems the Pentagon faces with its costly
procurements.
"The nature of major weapon systems development is that you have to
expect that the initial estimates, and typically the initial
contracts, are overly optimistic and unrealistic," he said.
"Unfortunately the purchaser -- the government -- typically lacks the
discipline to freeze the configuration such that the contractor has
any reasonable chance of developing what it promised on time and for
the price promised."
Defense Department officials have tried to improve the procurement
process, the GAO said, by doing more planning and review in the early
stages of a contract. But "these significant policy changes have not
yet translated into best practices on individual programs," Gene L.
Dodaro, acting comptroller general of the GAO, wrote in the report.
"Flagship acquisitions, as well as many other top priorities in each
of the services, continue to cost significantly more, take longer to
produce, and deliver less than was promised," Dodaro said. "This is
likely to continue until the overall environment for weapon system
acquisitions changes."
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/31/AR2008033102789.html?hpid=topnews
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