Weapon Systems: Concurrency in the Acquisition Process

Published by the Government Accountability Office on 1990-05-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                    United States General Accounting Offme

For Release          WEAPONSYSTEMS:         Concurrency    in the Acquisition
on Delivery
Expected at          Process
9:OO a.m.
May 17, 1990


                     Statement    of
                     Frank C. Conahan,       Assistant    Comptroller      General
                     National    Security    and International       Affairs
                     Before the
                     Committee on Armed Services
                     United States Senate

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Hr. Chairman and Members of the Committee:

I am pleased to be here today to discuss our views on concurrency
in the acquisition      of weapon systems.       Concurrency can be used to
expedite the development and production           of weapon systems.
Eowever, our work on several systems has illustrated             that rushing
into production     before critical     tests are successfully      completed
have resulted     in the purchases of systems that do not perform as
intended.      We believe that the Department of Defense (DOD) can no
longer afford to concurrently         develop and produce high cost
systems    without knowing early in the process whether the desired
capability     can be demonstrated.       We also believe that the recent
changes in the national      security     environment mean that we can
wait until we better know whether weapon systems work before we
commit large sums of money to procure them.


Concurrency     is broadly defined as the overlap between the
development     and production  phases of an acquisition       program.
More specifically,      it means that for a given weapon system,           some
parts or subsystems are being developed while others are being
produced.     It also means that some parts or subsystems are being
developed and produced at the same time.          When subsystems       in
development are especially       important  to the overall     effectiveness
of a weapon system, or are technologically         complex, the risks
associated with concurrency       increase.   The growing dependency of
weapon systems on software is perhaps the best illustration                of
these kinds of risks.

From whatever perspective         (system or subsystem)        one views
concurrency,      the best way to reduce risk in a system’s
acquisition     is to get early indications,          before production,    of
whether a system will       perform    as intended.       Early operational
testing     is a key internal     control   to ensure     that decisionmakers
have the best information       available on a weapon system's
performance to minimize risks of buying costly and ineffective
systems.      Determining   if systems work after production     starts can
significantly      increase the cost of such systems     if major problems
are discovered as a result of the testing        process.    Also, you may
end up with less than was desired at the outset         of the program.

The extent of operational    testing     before the production      decision
is generally   the way the Congressional       Budget Office (CBO), and
more recently,    DOD have measured the degree of concurrency in
major weapons systems.     A non-concurrent      system, by their
measurements, is one in which planned operational           testing   has
occurred before the production      decision.     And a highly concurrent
system is one in which little      or no operational     testing    has
occurred before the production       decision.


Deciding to procure numerous, expensive,       and concurrent   systems
over the last decade has created a predicament.          Weapon systems
currently     in development or production   are expected to cost over
$1 trillion.      The growing cost of many of these systems,     some
with uncertain     or unproven capabilities,    together with changes in
the national     security  environment has presented us with tough
policy choices: to stretchout,       reduce or cancel some of these
systems will have an economic impact in localities         where they are
built,     but not to do so is to continue costly development of
systems that may not be able to perform their missions.          These
kinds of choices must be avoided in the future.

Over the years, our work has demonstrated the importance of          '
identifying  the risks associated with concurrency.      we have
reviewed programs with planned concurrency as well as those that
have become concurrent  because production decisions     were made
prior to the accomplishment of significant   operational    testing.

Recently the Under Secretary of Defense for Acquisition            issued    a
report that found 6 of 34 major weapon systems to be "highly
concurrent"    because  operational     testing    began after the initial
production   decision.      Twenty-five      other systems had lesser
degrees of concurrency,      including     eleven judged to be
-moderately”    concurrent.     The six are the B-2, the Peacekeeper
Rail Garrison,     the Seawolf attack submarine (SSN-211, and its
combat system the AN/BSY-2, the C-17A, and the Trident D5

I would like to briefly    summarize some of the problems we have
identified  concerning 5 of the 6 systems       termed highly concurrent
by the Under Secretary.     In our reports we have discussed the
risks associated with producing a system,         or part of a system,
before it is operationally     tested.     I would like also to discuss
another highly concurrent     program--the    DDG-51 destroyer--that   the
Under Secretary did not identify.

In February of this year, I testified           before the Rouse Armed
Services Committee that it would be prudent to reduce the pace of
funding and production       for the B-2 until      critical  performance
elements of the aircraft,         such as its integrated     offensive   and
defensive avionics,      were adequately demonstrated.1          Under the DOD
acquisition     plan, 31 B-2 aircraft      would be on order and over $48
billion    would be appropriated      before anyone knows whether this
airplane    will do its job.       As you know, Secretary of Defense
Cheney recently      announced his intention       to buy 75 rather than 132
stealth    bombers.    Under Secretary Cheney's plan, the fiscal          year
1991 buy is reduced from 5 to 2 aircraft             and the 1992 buy from 10
to 6 aircraft.       As a result,    25 rather than 31 B-2s will be on

'Strateqic  Bombers: B-2 Program Status        and Current    Issues,
  (GAO/NSIAD-90-120, February 22, 1990).
order before testing   is completed.  We remain concerned, however,
that production  of this plane is continuing   without adequate
assurance that it can perform its mission.

In our December 1989 report on the Rail Garrison for the Peace
Keeper missile we stated that at the time the initial               production
decision was scheduled, no operational           test and evaluation      of the
complete weapon system (including         the missiles      and rail launch
cars) would have been conducted.2          Additionally,       the Air Force
plans to purchase about 73 percent of the launch cars before
operational     testing  is completed.      Such a large purchase would,
in effect,    amount to full-rate     production     without any operational
test or evaluation      of the complete system.          In the same report,
we recommended that the Secretary of Defense delay the production
start-up    decision until    the Air Force has conducted some
operational     test and evaluation    of the complete weapon system.

In April 1990, we reported that as many as 15 of 29 planned SSN-
21's, worth more than $21 billion,    are to be on contract or under
construction  before the first   ship is available for operational

The AN/B%-2 is crucial    to the performance of the SSN-21's
mission and one of the most technically     challenging    and complex
software development efforts    for a submarine which will require
up to 800 personnel to develop and integrate        about 3.2 million
lines of computer code. Timely operational        test and evaluation
on critical subsystems  such   as the AN/BSY-2 should be conducted.
We reported that the Navy cannot demonstrate the AN/BSY-2 combat

2Rai.l Garrison Production Decision and Launch Car Acquisition
 Should be Delayed, (GAO/NSIAD-90-19, December Y, 1989).

3Status of SSN-21 Ship Construction         Program,    (GAO/NSIAD-90-163,
 April 19, 1990).

 system’s     potential   for improved effectiveness      over prior systems
 until    it is operationally    tested.4     such tests are scheduled for
 two years after the delivery        of the first    system.   Problems
 encountered during such tests could require redesign and/or
 configuration       changes to SSN-21s delivered     and under
 construe   t ion, which could further     delay deliveries    and increase
 costs.     And this has already occurred.

  In our August 1989 report on the C-17 airlift               aircraft      we ehowed
  that concurrent    development and low-rate        initial      production         will
 overlap from 1988 to 1992.5            Before the scheduled first            flight      of
  the development aircraft         in 1990, 12 production        aircraft       were
-planned to be on contract.            By the end of the flight          test
  prwram, 9 production        aircraft    were planned to have been
 delivered,     and assembly of the 18th aircraft            was scheduled to
  have begun.     We further     noted that the Air Force must resolve
  assembly and avionics development problems and manage the
  program's concurrent       schedule to avoid delays that would increase
  the likelihood    that key milestones        would not be met.

 The DOD Inspector General report on the C-17A in April 1989
 suggested that the low rate initial        production      was tantamount to
 a full-rate    production    decision.   As a result,      several C-17As
 would have been produced before operational           testing     was
 completed.     Although Secretary of Defense Cheney recently            decided
 to cut the C-17 aircraft       procurement from 210 to 120 transports,
 we are still     concerned over delays in the flight          test program and
 the production     of aircraft    before completion     of initial
 operational    test and evaluation.

 4Submarine Combat System:  Technical Challenges Confronting                          Navy's
  Seawolf AN/BSY-2 Development, (GAO/IMTEC-89-35, March 13,                         1989).

 k-17   Faces Schedule, Cost,           and Performance        Challenges,
   (GAO/NSIAD-89-195, August           18,   1989.

And finally     in January 1990 we reported that the DDG-51'8
contractor     has experienced problems in designing and constructing
the lead ship.6       Because of these problems and because      the Navy
has changed the contract's      requirements,     costs have increased
substantially,     and the expected delivery      schedule has slipped
about   17 months   from the original   estimate.

Although the first    follow-on    ship is only    1  percent complete, the
estimated cost to complete it is already          over the ceiling   price
by 11 percent,   according to the contractor,         and by 22 percent,
according to the Navy. In our report on           the DDG-51 program we
recommended that the Secretary of Defense          delay the contract
award for follow-on     ships until he could      provide assurance as to
the development and affordability       of the    program.

In February, 1990, the Navy awarded contracts    for 5 follow-on
ships and now has a total of 12 follow-on   ships under contract.
Furthermore, the Navy could have as many as 17 ships under
construction or awarded before the lead ship has finished      testing
and has been delivered   in February 1991.


In a report issued in June 1985, we identified       the consequences
of DOD's decisions   to start production   on five   concurrent  systems
without having adequately demonstrated whether performance
requirements  were met in a representative    operational
environment.7    For example, with the F/A-l8 aircraft,      expensive

6Navy Shipbuilding:   Cost and Schedule Problems on the DDG-51
 AEGIS Destroyer Program,( NSIAD-90-84, January 17, 1990).
7Production of Some Major Weapon Systems Began With Only Limited
 Operational  Test and Evaluation Results, (GAO/NSIAD-85-68,
 June 19, 1985).

retrofits    were required     on production      models   to correct     problems
identified    during  operational     testing.

As you recently      pointed   out Mr. Chairman,       the story of the B-1B's
defensive   avionics     subsystem is a "classic"          story of the risks
associated     with concurrency.      Production       and development      started
at the same time.        The B-1B did not begin        operational     test and
evaluation   until    3 years after   the October        1981 production
decision.    And, despite      costly attempts    to     fix its critical
avionics   subsystem,      the plane will  not do      what it was expected to

Today we are issuing        a report  to the Secretary         of Defense on the
importance    of planning     and conducting      more timely      operational
testing.3     We found that the military          services     generally     are not
conducting    or planning     to conduct operational         testing     on weapon
systems until      after  production    start-up.       In our examination       of
six weapon systems we found that in four cases, planned
operational     testing   lags behind the actual          or planned initial
production    decision    by one to three years.

Mr. Chairman,    the information      in our report     raises   .3 question
about the wisdom of spending relatively            large sums of money on
weapon systems before        it is determined     whether they will      work.     I
doubt that we can afford        to continue    in this way.      And the
changing national      security   environment     means we don't have to.
Our reports    on the problems of concurrent          weapon systems have led
me to conclude     that the most crucial       problem and greatest        risk is
in the development      of the relevant     software.      Software    development
will  determine    the pace of development        and ultimately     the

8Stratenic  Bombers : B- 1B Cost and Perfomnce               Remain Uncera           >
 (GAO/NSIAD-89-55,   February   3, 1989).
9DOD Needs to Plan and Condu             More Timely Operational         Tests   and
 Evaluations, (GAO/NSIAD-90-::7,           May 17, 1990).

production      of weapons like ships and planes.              If the software
doesn't     work, then the weapon system as a whole is not going to
work the way it should.            This means that we have to have greater
assurance that these highly            complex subsystems which are crucial
to overall      system performance       will   do what they are supposed to do
before committing          large sums of money to procure the overall
system.      If we don't structure        acquisitions     this way, we risk
having systems like B-1Bs sitting             on the runway unable to do the
job they were designed to do.             I think     you would agree that we can
ill   afford    a repetition     of that story.

This concludes my prepared    statement,   Mr. Chairman.         I will   be
happy to answer any questions      you may have.