US GAO report criticises DoD over funding for FCS, WIN-T etc
Peter Donaldson, Editor
The US Government Accountability Office today released a highly critical report on the Department of Defense’s acquisition and funding procedures in which the Future Combat Systems (FCS) and the Warfighter Information Network-Tactical (WIN-T) were among five major programmes picked out to illustrate some general problems. What follows is a selection of quotes that apply to FCS and WIN-T, but that are also indicative of issues affecting other major programmes the GAO studied at the behest of the Senate Armed Services Committee including the Multi-Mission Maritime Aircraft, the Joint Strike Fighter and Global Hawk.
The GAO report entitled ‘A Knowledge-Based Funding Approach Could Improve Major Weapon System Program Outcomes’ says:
· ‘DoD often does not commit full funding to develop its major weapon systems when they are initiated, despite the department’s policy to do so. For a majority of the weapon system programs GAO reviewed, costs have exceeded the funding levels initially planned for and reflected in the Future Years Defense Program (FYDP)—DoD’s investment strategy. To compensate for these shortfalls, DoD makes unplanned and inefficient funding adjustments, like moving money from one program to another, deferring costs into the future, or reducing procurement quantities.’
· ‘For example, at the start of [FCS] development in 2003, the initial approved cost estimate for the development portion of the FCS program was about $20 billion, of which $13 billion was needed within the 2003 FYDP time frame—that is for fiscal years 2003 through 2007. However, at that time the 2003 FYDP only contained $5 billion for FCS development. This means that the department had only committed to fund 25 percent of FCS’s estimated development cost when the program started, and only 39 percent of the funding needed in its first 5 years.’
· ‘The estimated lines of code needed to support FCS’s software development are almost three times original assumptions—from 32 million to 95 million lines of code—leading to an increase in software development costs that now approaches $8 billion. A 2007 IDA report also identified significant additional unquantifiable cost risk due to immature technologies, dependencies on complementary programs,concurrent experimentation and development, and the overall complexity and synchronization of FCS development activities.’
· ‘FCS was expected to be a 7.5-year development effort but is now a 12-year program and will likely be extended again. Unconstrained and lengthy cycle times promote program funding instability—especially when considering DOD’s tendency to change requirements and funding as well as frequent changes in leadership.’
· ‘…initial development cost estimates for the Army’s WIN-T communications system were understated by at least $1.3 billion, or nearly 160 percent, in part because the estimates assumed that commercial-off-the-shelf radio technology would be available. This assumption proved to be wrong.’
· ‘by the third year of the WIN-T program, the program’s cost estimate, and therefore funding needs, had increased 72 percent because requirements were unstable and critical technologies were not ready, creating a 26 percent shortfall in the FYDP.’
· ‘Similarly, the Army initially estimated that WIN-T development would cost $338 million, but the development program is now expected to cost over $2.0 billion, or $1.7 billion more than initially estimated.’
· ‘The service’s original estimate for the WIN-T program of $338 million was revised prior to Milestone B to align with the CAIG estimate.’
· ‘The Army assumed that the radios and software needed to support the WIN-T system would be commercially available. However, once system development started, the Army learned that the radios and software would require significantly more development and integration than initially anticipated. Further, the Army assumed that WIN-T would be able to meet its portion of the FCS program requirements. However, subsequent changes in the FCS requirements contributed to the need to restructure the WIN-T program.’
The GAO recommended that the Secretary of Defense take the following three actions:
1. ‘Develop and implement a strategy to bring the department’s current portfolio into balance by aligning the number of programs and the cost and schedule of those programs with available resources. In developing and implementing a strategy, the department should determine ways to prioritize needs and identify whether the budget and the FYDP should be increased to more accurately reflect the actual costs of current programs or whether the portfolio of current programs should be reduced and lower-priority programs terminated to match available resources.’
2. ‘Require that all new programs have manageable development cycles, realistic cost estimates, and have planned and programmed full funding for the entire development cycle.’
3. ‘Require all cost estimates submitted for funding a program at milestone decisions to be reported as a range of likely costs and reflect the associated levels of risk and uncertainty. At Milestone A, require estimates that allow for a wide range of likely costs. At Milestone B, require estimates that, based on knowledge gained, are more precise—in line with best practice standards.’
GAO also summarised the DoD’s response thus:
· ‘DOD believes that current policies and initiatives sufficiently address the first two recommendations, and did not concur with the third.’