I am stunned and horrified by the General Accounting Office report on Defense Acquisitions (205 page report here). The short story is that the DOD overspent its weapons budget by $295 BILLION. This is the weapons development budget only, and the GAO only looked at 72 out of 95 systems. Who knows how much they actually overspent.
From the report:
Of the 72 programs GAO assessed this year, none of them had proceeded through system development meeting the best practices standards for mature technologies, stable design, or mature production processes by critical junctures of the program, each of which are essential for achieving planned cost, schedule, and performance outcomes.The GAO started this monitoring in 2000. At that point development cost overruns were 6 %. In 2007 that had increased to 26%. In other words, it is getting worse every year. Further, since 200, the DOD has more than doubled it "investments" in planned systems from "$790 billion to $1.6 trillion." Please excuse me while I choke on those figures. In 2000, the actual figures averaged in at 27% over estimates. By 2005 that had increased to 33%. By 2007 the DoD was 40% over estimates (page 2). The average schedule delay has increased from 16 months in 2007 to 21 months in 2007. You have to shake your head at the wag your finger tone of the GAO introduction:
The current DOD leadership has recently established initiatives designed to change the strategic environment at the weapon acquisition portfolio level. These initiatives reflect sound business concepts and could lead to better outcomes if implemented fully and correctly. However, policy without practice is not uncommon within the Department and the upcoming change in administration presents challenges in advancing progress through sustained implementation of best practices, as well as addressing new issues that may emerge.The DOD is supposed to be following a "knowledge point" system. Point 1 - "Resources and needs match.." Point 2 - "Product design is stable." Point 3 - "Production processes are mature. This point is achieved when it has been demonstrated that the company can manufacture the product within cost, schedule, and quality targets." Of the systems that responded (since obviously at least 23 programs couldn't be bothered with responding to oversight requirements), 12% met point 1; 4% met point 2; and ... 0% met point 3. If the costs of these issues were not so huge, then the situation would be laughable. However, weapons systems development comes out of the discretionary budget. It is in direct competition with infrastructure, health, education, environment, the Centers for Disease Control (etc.) budgets. That $295 BILLION (plus) cost overrun is money that did not go to other critical needs. This cost also does not reflect the over $150 billion for the Iraq occupation. Nor is it part of standard military costs (troop pay and support). Even without the mortgage/credit crisis, these types of costs would drive any economy into the ground. This makes me angry. Every year, the DOD is over budget - not just by a little bit, but by hundreds of billions of dollars. They essentially have no internal accounting system as far as anyone can tell. They operate as if they had a blank check. This is not acceptable. Yet year after year they cruise along spending money as if it drops like manna from heaven. Congress needs to shut this down - now.
