DoD’s acquisition and contracting sees little improvement on GAO High-Risk List

The high-risk list, released Wednesday, states efforts to shore up problems with DoD weapons systems acquisition remain “unchanged” since GAO’s last high-...

Despite sweeping legislative and department changes over the past five years, progress on the Defense Department’s systems acquisition and contracting management remain basically stagnant on the Government Accountability Office’s 2019 High-Risk List of areas that are most vulnerable to waste, fraud and abuse.

The list, released Wednesday, states efforts to shore up problems with DoD weapons systems acquisition remain “unchanged” since GAO’s last high-risk list in 2017. GAO made the same assessment of the Pentagon’s contract management issues, though with a few positive caveats.

The two items on the high-risk list account for almost $2 trillion in taxpayer funds — about $1.66 trillion in investments of 86 major weapons systems and $300 billion in annual contracted services for the Pentagon. Both of the items have been on GAO’s high-risk list since the early 1990s.

At the same time, GAO points out that the government’s inability to address climate change is causing national security issues and will cost DoD more money.

Weapons acquisition

GAO’s report states DoD can get better returns on its weapons system investments by “following knowledge-based practices and developing an action plan for performance measures.”

Though Pentagon leadership undertook initiatives aimed at improving program outcomes, DoD demonstrated progress was lackluster in the past two years.

“DoD programs continue to not fully implement knowledge-based acquisition practices, which increases the risk of undesirable cost and schedule outcomes,” the report states.

The military still has not implemented leading practices and lessons to make greater use of existing financial awards for good performance and has only implemented four of 10 key practices to select, train, mentor and retain program managers.

Additionally, DoD has not identified a plan with specific goals or performance measures to implement across its acquisition portfolio to achieve better results.

The report comes as Congress and DoD have been implementing legislation from the past five years to overhaul and unburden the Pentagon’s acquisition process.

In past defense authorization acts, Congress pushed down milestone authority to the individual military service chiefs, made it easier to buy commercial-off-the-self products and completely rearranged the Pentagon’s procurement office.

Even with those changes and new authorities, DoD is still not up to par on acquisition. However, GAO does give DoD and Congress credit for implementing those reforms.

“DoD reported to Congress in August 2017 that the department was at risk of not being able to acquire and sustain major weapon systems at sufficient levels due to increasing cost,” the report states. “To counter this risk, DOD’s new position of undersecretary of defense for acquisition and sustainment is to focus on major defense acquisition program performance and on reducing costs to free up resources for further investment.”

The department also has not had much time to implement the measures. Last March, the military secretaries asked Congress to slow down its reforms so the military would have time to implement past ones.

“There’s some fascinating and interesting tools that we’re using and we are going to use and look forward to using, so thank you for those. I would ask for a stabilization period so that we can digest what we have and have the ability to come back to you if we need more, but right now the knife drawer looks full,” Navy Secretary Richard Spencer told Congress.

Contract management

DoD faces many of the same problems with contract management. Even with congressional changes and authorities, the Pentagon’s improvements are lacking.

Contract management once again has leadership behind it, but DoD still has not implemented ways to improve its acquisition workforce, service acquisitions or operational contract support.

“Over the years since we added this area to our high-risk list, we have made numerous recommendations related to these high-risk issues, 18 of which were made since the last high-risk update in February 2017,” the report states. “As of November 2018, 41 recommendations related to this high-risk area are open.”

While DoD increased its acquisition leadership and bettered training, there is still no framework for the acquisition workforce that identifies key times frames, metrics or projected budgetary requirements associated with key goals or strategic priorities.

DoD still has not developed plans to use an annual inventory of contracted services for workforce and budget decisions, which is statutorily required, and the department still needs to develop metrics to track progress associated with shaping the future of the acquisition workforce.

Climate change

One area gaining particular attention this year from Congress is the affect of climate change on the fiscal exposure of DoD.

Comptroller General Gene Dodaro said climate change is affecting DoD’s operations domestically and internationally.

“DoD needs to have a plan to look ahead as they are building their infrastructure and modernize their infrastructure to build in climate resistance policies and procedures,” Dodaro told members of the Senate Homeland Security and Governmental Affairs Committee Wednesday. “Congress required them to develop a plan and submit it to the Congress, which they did, but many members of the armed services committees weren’t satisfied with the plan. The Defense Department is now back preparing an additional plan.”

GAO will look at that plan when it’s ready and add recommendations.

Dodaro said DoD installations have coastal issues with rising sea levels, and previous storms like Hurricanes Michael and Florence have been very costly to the Pentagon.

He added that since 2005, the government has spent close to half a trillion dollars recovering from disasters.

“The cost of inaction is sort of incalculable, but it’s very high,” Dodaro told the House Oversight and Government Reform Committee. “For every dollar spent on hazard mitigation and resilience building, it will save $6 down the road.”

Dodaro went on to say that with disasters predicted to be more severe and more frequent, the government needs to invest in planning and mitigation.

Additionally, Dodaro said climate change is a national security issue internationally as droughts and disasters affect global migration patterns and socio-economic status of countries.

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