On March 28, the Government Accountability Office (GAO) released its annual assessment of the performance of the Department of Defense (DOD) in purchasing specific new weapons in a cost-efficient manner and reducing the overall cost to the taxpayers of a wide variety of weapons purchases.
This year’s assessment was generally more positive regarding the performance of the weapons programs than in prior years. The assessment covered 86 major acquisition programs, which is down from 96 programs in the portfolio for last year’s assessment. This reduction in the number of programs reduced the cumulative cost of the portfolio by $152 billion.
The GAO also acknowledges that a significant share of the improved performance is because of “more programs exiting than entering the portfolio, as well as reductions in procurement quantities due to program cancellations and restructurings.” This acknowledgment raises an important question about how the GAO arrived at the positive assessment: Was the GAO’s approach for assessing DOD acquisition programs fundamentally skewed?
In attempting to answer this question, it is impossible to avoid the conclusion that the GAO views it as a positive thing that the DOD is simply spending less on acquisition. It is certainly the case that the DOD is facing a declining budget for the acquisition of major weapons. According to the DOD’s National Defense Budget Estimates (NDBE) for fiscal year (FY) 2013, the combined funding for procurement and research and development under last year’s budget request will decline by 35 percent when compared with FY 2008 levels.
The NDBE also does not apply the sequestration reduction that is currently underway. The question largely left unanswered by the GAO’s analysis is whether the U.S. military is becoming weaker as a result of these reductions.
Policymakers, particularly those in Congress, need to keep in mind that with this year’s GAO report on defense acquisitions, as with those from prior years, it is entirely possible that the GAO’s approach itself is skewed. Specifically, it appears that the GAO looks at DOD acquisition from a narrow perspective. This narrow perspective is one that is overwhelmingly focused on cost and that pays very little attention to effects on capabilities. If so, the GAO will inevitably find favor with a DOD approach that dictates the continued acquisition of only existing weapons. This approach all but eliminates technical risk and limits the potential for cost growth. Additionally, if the GAO’s approach is skewed in this way, it is strongly prejudicial against innovation that could lead to the fielding of future weapons technologies.
Cost analysis is a valuable tool in assessing the performance of defense acquisition programs and the defense acquisition system; but it is not the only tool. Assessment tools must also pay attention to the value of innovation and the value of increased investment to achieve better overall military capability.
Due to the GAO’s approach, policymakers can fall into the trap of reversing the cause and effect relationship between the level of investment and enhanced cost performance. This reversal leads to the false conclusion that it is not improved cost performance that leads to lower funding requirements, but that reductions will produce improved cost performance and are always justified. This perspective will result in a technological base for the military that is stagnating, or worse, deteriorating.
Reducing acquisition funding levels at the cost of a stagnating technology base will be a poor choice for the military, and will fail to provide for the common defense.