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  • GAO Audits Pentagon Program Cost Growths
    Posted by Michael Bruno 10:24 PM on Mar 29, 2011

    Despite widely recognized moves by U.S. Defense Secretary Robert Gates, starting in 2009, to reign in program mismanagement and spending largesse, 80% of major defense acquisition programs (MDAPs) have experienced increased unit costs from initial estimates, further cutting the Defense Department’s buying ability, the U.S. Government Accountability Office said Tuesday in an annual assessment of MDAPs.

    According to GAO, the majority of cost growth materialized after programs entered production, meaning they continued to experience significant changes well after the programs and their costs should have stabilized. More than half of the portfolio’s total cost growth has been driven by 10 of the largest programs, all in production, starting with the Lockheed Martin Joint Strike Fighter, which accounts for $34 billion in cost growth.

    Incidentally, the latest MDAP report was issued the same day as a Senate subcommittee investigated defense cost growth, and received another new GAO report on trends in related Nunn-McCurdy cost breaches. The auditors found that, based on Pentagon data, there have been 74 Nunn-McCurdy breaches since 1997, involving 47 MDAPs. The Air Force was the worst violator by armed service, with nearly as many Nunn-McCurdy breaches (29) as MDAPs in development between 1997 and 2009 (36). By type, aircraft, satellites and helicopters across the Defense Department made up the predominant offenders.

    Three years ago the GAO famously said total cost growth in MDAPs had increased exponentially over the last decade - and the latest update was no less grim. GAO said growth has now risen to $402 billion through fiscal 2010, which includes $70 billion in new weapon system cost overruns in just two years.

    "These trends in Nunn-McCurdy breaches tell us that too many of our weapon systems have costs that are spiraling out of control," declared Sen. Tom Carper (D-Del.), chairman of the Senate federal financial management subcommittee.

    Tags: os99, MDAPs, GAO

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