DOD acquisition practices suffered cost overruns in the billions of dollars
Washington Post
By Dana Hedgpeth
Washington Post Staff Writer
Saturday, February 2, 2008; Page D01

The Defense Department's major weapons programs have suffered cost overruns in the billions of dollars, years-long delays and quality shortfalls because of poor acquisition practices by the department, according to a report released yesterday by the Government Accountability Office.

The GAO warned that the cost of designing and developing weapons systems could "continue to exceed estimates by billions of dollars" if the Defense Department doesn't improve its acquisition practices.

The report, which focused on 11 troubled weapons programs, said contractors had "poor practices" for systems engineering and relied on "immature designs, inadequate testing, defective parts and inadequate manufacturing controls."

The report said the Defense Department did not provide effective oversight as projects were being developed, and often entered into weapons-development contracts before engineering of the project had been analyzed, driving up costs.

In addition, the report said, the Pentagon often pays the cost of the contractors' mistakes, providing the companies with little incentive to perform higher-quality work. "Risk," the report said, "is not borne by the prime contractor, but by DOD.

"Contractors have little incentive to utilize the best systems engineering, manufacturing, and supplier quality practices to control costs," according to the report, which was compiled by Michael Sullivan, director of the GAO's acquisition and sourcing management.

The GAO also said that because the Pentagon often "sets overly optimistic requirements for new weapon systems that require new and unproven technologies, development cycles can take up to 15 years."

The weapon systems programs profiled in the report included General Dynamics' Expeditionary Fighting Vehicle, an amphibious vehicle designed to transport troops from ships to land. It had such problems with its quality that it was delayed four years at a cost of $750 million.

The report also looked at Lockheed Martin's F-22A Raptor fighter plane, which was grounded during testing after cracks were found in its canopy that stemmed from manufacturing problems. Another program, the Wideband Global SATCOM communications satellite, developed by Boeing Integrated Defense Systems, was 15 months late because a supplier installed fasteners incorrectly, and would cost $10 million to fix.

Northrop Grumman's LPD 17 ship had faulty welds on piping in its hydraulics. "Had the problem not been discovered," the report said, "and weld failure had occurred, the crew and the ship could have been endangered." The ship's manufacturing problems added $846 million to the project's cost and delayed it by three years, according to the report.

GAO officials said they met with six of the Pentagon's largest contractors -- BAE Systems, Boeing, General Dynamics, Lockheed Martin, Northrop Grumman and Sikorsky Aircraft -- to discuss the practices they use to build their weapons systems.

A spokesman for Lockheed Martin said that "the issues identified by the GAO are a snapshot in time. They go back to 2005 and 2006, and all of the issues have been resolved."

"We took the issues to our customers and worked closely with our government partners to identify the root cause of the issues and implement a path to recovery," said the spokesman, Tom Jurkowsky, who added that the F-22 "is performing in extraordinary ways beyond anyone's expectations."

Doug Kennett, a Boeing spokesman, said the satellite program is "on track now after having difficulties earlier."

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