Performance of the Defense Acquisition System - 2013 Annual Report - 28 June 2013

While the United States achieves its national security missions by equipping its military forces with the best weapons systems in the world, questions continue about the performance of the defense acquisition system. How effective is it? How can that effectiveness be objectively measured? Can we use those measures to affect behaviors with appropriate incentives or determine which policies and procedures improve results and which turn out to be misguided? Answering these questions requires more than opinion. It requires analysis of unbiased data to discover insights into underlying effects. These, in turn, will inform better policy and programmatic decisions. This is the first in a series of planned annual reports on the performance of the defense acquisition system-its programs, institutions, workforce, managers, executives, and industrial partners.By using objective data and analysis to measure performance, these reports will identify underlying drivers and inform future decisions on programs, policies, and processes. This first report focuses primarily on performance related to Major Defense Acquisition Programs (MDAPs). The report focuses on more in-depth indicators of system outcomes, particularly with respect to cost and schedule, and does so by looking at various institutional trends. -How does the portfolio of major programs perform over time? What has changed, how, and by how much? -Are there differences associated with leadership? -Are there differences among DoD organizations? -Are there differences among our industrial partners? This report also reflects results to date from the compliance of the Department of Defense (DoD) with the Improve Acquisition Act of 2010 on performance assessments of the defense acquisition system. While similarly motivated, our efforts will go beyond the specifics of this act to seek additional insights for improving the performance of the defense acquisition system. In addition, this study will be used in part to fulfill a recent request from the Office of Management and Budget for an evidence-based analytic study on acquisition performance. Readily available data allowed us to provide historical baselines on acquisition performance and some initial insights into whether performance has, or has not, improved recently. They also demonstrate that it can take many years to see the results of new policies, making it even more important to test and inform those policies. Although existing data can be effectively leveraged to improve our understanding, a lesson learned is that gaps remain; therefore, I initiated a strategic initiative to identify those key data gaps and begin selective collection of new data for future analysis. That work will continue, and will inform future reports. Since this initial report focuses primarily on analyzing MDAP development and early production information, it cannot be considered a complete picture of the entire acquisition system. Future reports will delve into areas such as contracting, acquisition of services, technology development, industrial base concerns, etc. Value obtained in acquisition is a balance of costs, benefits, and prudent risks. Risks are a fact of life in acquiring the kinds of products our warfighters need, and these risks must be objectively managed. Additionally, demands and threats do change in both the short and long term, so the acquisition system must be able to respond. In some cases, cost growth results from prudent changes in quantity or capability of acquired systems. Our ultimate measure of performance is providing effective systems to the warfighter that are suitable for fielding, at costs that are affordable, while ensuring taxpayers' money is spent as productively as possible. Only through rigorous analysis and clear reporting will we be able to separate and account for acceptable and unacceptable types of cost growth, informing our discussions within DoD, with Congress, our Allies, and the America