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We are pleased to be here today to discuss issues facing the Department of Defense (DOD) in its acquisition of weapon systems, related spare parts, and other goods and services. In response to the many changes that have been witnessed in the defense acquisition environment over the last few years, DOD has begun broad-based changes to its acquisition and contracting processes. However, weapon programs continue to have questionable requirements; unrealistic cost, schedule, and performance estimates; and strategies that begin production before adequate testing has been completed. This discussion of acquisition issues is well-timed, as DOD implements plans to increase its procurement budget to $60 billion in fiscal year 2001-a 40-percent increase over last fiscal year's budget. My testimony focuses on a different approach to improving weapon acquisition outcomes based on best commercial practices and an understanding of the acquisition culture. My testimony also includes some observations on (1) DOD'S management of its acquisition workforce and organization, (2) DOD'S experience with commercial pricing of spare parts, (3) the effectiveness of DOD'S mentor-protege pilot program, and (4) federal agencies' use of multiple award task- and delivery-order contracts.
Since 1990, the DoD mgmt. of major weapon system acquisitions has been designated a high-risk area. DoD has taken some action to improve acquisition outcomes, but its weapons programs continue to take longer, cost more, and deliver fewer capabilities than originally planned. Over the next 5 years, DoD plans to invest about $900 billion to develop and procure weapons systems -- the highest level of investment in two decades. This testimony describes DoD¿s current weapons system investment portfolio, the problems that contribute to cost and schedule increases, and the potential impacts of recent legislative initiatives and DoD actions aimed at improving outcomes. Charts and tables.
To use public funds effectively, the gov¿t. must meet the demands of today's changing world by employing effective mgmt. practices and processes, including the measurement of gov¿t. program performance. Legislators, gov¿t. officials, and the public want to know whether gov¿t. programs are achieving their goals and what their costs are. To make those evaluations, reliable cost information is required and fed. standards have been issued for the cost accounting that is needed to prepare that information. This Cost Guide has been developed in order to establish a consistent methodology that is based on best practices and that can be used across the fed. gov¿t. for developing, managing, and evaluating capital program cost estimates. Illustrations.
This is a print on demand edition of a hard to find publication. In FY 2009, DoD spent nearly $384 billion on contracts. This investment, representing over 70% of total gov¿t. contract spending, highlights the great need to better manage risk in acquisitions. But DoD has not always managed risks effectively: major systems continue to take longer to develop, cost more, and deliver fewer quantities and capabilities than originally planned. In addition, poorly managed growth in services spending has contributed to disappointing program outcomes. This testimony focuses on: (1) planning of DoD's acquisitions; (2) contract types and the award process, incl. bid protests; (3) outcomes of major acquisition programs; and (4) acquisition and contractor workforce mgmt. It also highlights relevant reforms in each area.
Compares quality mgmt. practices used by the DoD & its contractors to those used by leading commercial co¿s. & made suggestions for improvement. The report: determined the impact of quality problems on selected weapon systems & prime contractor practices that contributed to the problems; identified commercial practices that can be used to improve DoD weapon systems; identified problems that DoD must overcome; & identified recent DoD initiatives that could improve quality. The author examined 11 DoD weapon systems with known quality problems & met with quality officials from DoD, defense prime contractors, & 5 leading commercial co¿s. that produce complex products &/or are recognized for quality products. Illus.
The past two years have seen the Congress and the DoD take meaningful steps towards addressing long-standing weapon acquisition issues -- an area that has been on the high risk list since 1990. This testimony focuses on the progress DoD has made in improving the planning and execution of its weapon acquisition programs and the potential for recent acquisition reforms to improve program outcomes. The testimony includes observations about: (1) DoD's efforts to manage its portfolio of major defense acquisition programs; (2) the knowledge attained at key junctures of a subset of 42 weapon programs from the 2009 portfolio; (3) other factors that can affect program execution; and (4) DoD's implementation of recent acquisition reforms. Illus.
The DoD expects the cost to develop and procure the major weapon systems in its portfolio to total $1.6 trill. With increased competition for funding within DoD and across the fed. gov¿t., effectively managing these acquisitions is critical. Yet DoD programs often experience poor outcomes -- like increased costs and delayed fielding of needed capabilities. In 2006, a report was issued on DoD¿s processes for identifying needs and allocating resources for its weapon system programs. In 2007, it was reported that DoD consistently commits to more programs than it can support. This report assesses DoD¿s funding approach, identifies factors that influence the effectiveness of this approach, and identifies practices that could help improve DoD¿s approach.