As his days in office dwindle, the Pentagon’s acquisition czar John Young has issued a five-page memo slamming the latest GAO criticism of Pentagon acquisition, calling it "misleading, out-of-date and largely irrelevant to the current management of DoD programs."
In fact, Young argues, the acquisition system is not "broken," as so many politicians and commentators have claimed recently. Instead, much of the cost and schedule growth has come from "outside factors.” What are they? Young points to requirements changes and the budget process.
GAO concluded that 96 programs are responsible for an amazing $298 billion in cost overruns in 2008. That compares to 77 programs that had a still very impressive overrun of $183 billion in 2003.
The truth, Young avers, is that most of the programs that are over budget and behind schedule are older programs over which the current DoD management has had relatively little control. He also accuses GAO of comparing apples and oranges by not comparing the same programs in the two time periods.
He adds a detailed breakdown of the increased costs:
* $95.7 billion of the increase arose from the very simple act of buying more stuff than was previously planned for 18 programs.
* $72.2 billion derives from nine programs where quantities were cut or schedules were drawn out.
* Another $57 billion in 39 programs arose from cost growth in programs that grew less than 10 percent over their baseline. Young argued that this cost growth was largely caused by changes in the number of units bought and actually reflected "good unit cost control" in the face of program changes.
Taken together, those accounted for 40 percent of the cost growth, Young notes. Another $166.6 billion came from 28 programs which simply grew too much. The main villains here: "excessively low initial cost estimates, fluid requirements, optimistic schedules and assumptions, excessive application of government certification standards, initiation of development with immature design or technology, and poor performance by government and industry teams."
Of the 96 programs, Young goes on, eight accounted for 79.9 of the cost growth. The evil eight (our phrase, not his) are: DDG 51, Future Combat System, Joint Strike Fighter, V-22, C-17, Virginia Class subs, C-130J and the Family of Medium Tactical Vehicles (FMTV). Six of those programs were started in or before 1996, Young writes. Perhaps his most disturbing conclusion is that most of the cost increases here (excepting DDG 51 and C-130J) occurred because "the entire national enterprise -- acquisition, requirements, budgeting and funding, and industry performed poorly..." causing the nation to spend $160.5 billion it had not planned for.
