We determined whether the Joint Requirements Oversight Council (JROC) properly validated procurement quantities for Major Defense Acquisition Programs (MDAPs).
We performed this audit because the DoD Office of Inspector General previously reported in three reports that the Army, Navy, and Air Force could not support or justify the need for procurement quantities of the Warfighter Information Network‑Tactical Increment 2, the CH‑53K Heavy Lift Helicopter, or the MQ‑9 Reaper, respectively. The deficiencies identified in the three prior reports demonstrated that the DoD may waste billions of dollars on excess quantities for weapon systems. Therefore, we conducted this audit to review JROC’s procedures for evaluating procurement quantities for MDAPs.
An MDAP is an acquisition program that is designated by the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]) or has an estimated total cost of more than $480 million for research, development, test, and evaluation or $2.79 billion for procurement. We nonstatistically selected the Navy’s Littoral Combat Ship, the Air Force’s KC‑46A Tanker Modernization, and the Army’s Joint Air‑to‑Ground Missile to review the JROC process for validating requirements documents.
The Military Services develop capability requirements documents and submit the documents to JROC for validation. Validation is the review and approval of capability requirements documents by a designated validation authority. The JROC Charter outlines and defines the participants in the JROC validation process. JROC is chaired by the Vice Chairman, Joint Chiefs of Staff, and consists of generals and admirals from the Military Services and combatant commands.
In 2013, the law was amended and required JROC to assist the Chairman of the Joint Chiefs of Staff by ensuring appropriate tradeoffs were made among life‑cycle cost, schedule, performance, and procurement quantity when establishing and approving joint military requirements. This was the first time the law included specific reference to procurement quantity in the JROC responsibilities.
During the audit, Public Law 114‑328, “The National Defense Authorization Act for Fiscal Year 2017,” December 23, 2016, amended 10 U.S.C. § 181 (2013) and revised the responsibilities of JROC. As amended, 10 U.S.C. § 181 (2017) transfers JROC’s responsibilities for ensuring appropriate tradeoffs among life‑cycle cost, schedule, performance, and procurement quantity to a new investment review process the Secretary of Defense is required to establish for MDAPs that reach Milestone A after October 1, 2017. DoD Instruction 5000.02, “Operation of the Defense Acquisition System,” January 7, 2015, defines acquisition Milestone A as an acquisition investment decision to pursue specific product or design concepts, and to commit resources to develop technology and reduce risks before committing resources for system development.
JROC officials accepted MDAP procurement quantities that were included in requirements documents provided by Military Service acquisition officials but did not obtain input and reviews for procurement quantity from officials within the Office of the Secretary of Defense when validating requirements documents. This occurred because Joint Capabilities Integration and Development System guidance does not define JROC roles and methods for assessing and reviewing procurement quantity. As a result, JROC officials could not ensure that appropriate tradeoffs were made between life‑cycle cost, schedule, performance, and procurement quantity in accordance with 10 U.S.C. § 181 (2013).
Additionally, JROC officials may validate requirements documents with inaccurate procurement quantities for programs that reached, or will reach, Milestone A on or before October 1, 2017, which could result in the Military Services buying more weapon systems than necessary and wasting billions of dollars. As of March2017, JROC was validating requirements documents for 13 MDAPs with estimated total costs exceeding $140 billion.
We recommend the Vice Chairman of the Joint Chiefs of Staff identify the MDAPs that have reached, or will reach, Milestone A on or before October 1, 2017, and will not be affected by the new investment review process required by the FY 2017 change to 10 U.S.C. § 181.
For these programs, we recommend that the Vice Chairman of the Joint Chiefs of Staff:
- establish a practice within JROC to consistently evaluate procurement quantity submitted by sponsors and execute procedures to assess the validity and accuracy of the procurement quantity submitted by sponsors;
- require subordinate boards to obtain input and reviews from advisors and stakeholders to assess and review procurement quantity;
- establish expectations for stakeholders and advisors, particularly the Under Secretary of Defense for Acquisition, Technology, and Logistics and the Director, Cost Assessment and Program Evaluation, to assist JROC in evaluating procurement quantity throughout the validation process; and
- document and maintain the methodology for evaluating procurement quantity for each validation decision.
We also recommend that the Deputy Secretary of Defense and the Vice Chairman of the Joint Chiefs of Staff, for MDAPs that reach Milestone A after October 1, 2017:
- clearly define the roles and responsibilities for supporting the new investment review process required by the FY 2017 change to 10 U.S.C. § 181 in ensuring appropriate tradeoffs are made among life‑cycle cost, schedule, performance, and procurement quantity when developing recommendations for program costs;
- clearly define the roles for assessing, reviewing, and analyzing procurement quantity;
- develop and implement oversight procedures and accountable methods to ensure that procurement quantity is evaluated;
- establish expectations and accountability for the Director, Cost Assessment and Program Evaluation, in ensuring appropriate tradeoffs are made among life‑cycle cost, schedule, performance, and procurement quantity.
Management Comments and Our Response
The Vice Chairman of the Joint Chiefs of Staff provided comments on the finding and stated that requirements oversight is a complex process that includes participation of leaders across the DoD. The Vice Chairman also stated that JROC does not assess nor establish procurement quantities in isolation but rather considers them in the entire context between cost, schedule, performance and procurement quantity to determine the most effective means to satisfy the capability need.
The Vice Chairman stated the Joint Staff believes the report was written without a complete understanding of the validation process; contained several misleading statements that implied the JROC process resulted in wasteful spending; and included technical errors in its discussion of several MDAPs.
We agree with the Vice Chairman that requirements oversight is a complex process that includes participation of leaders across the DoD. Overall, however, we found a lack of evidence revealing actual consideration by JROC of procurement quantity. We found no instances where JROC obtained input for procurement quantity from stakeholders and advisors. JROC is the final validation authority on requirements documents that link warfighter needs, acquisition, and funding activities.
We concluded that the JROC process for validating procurement quantities may result in inaccurate procurement quantities. Based on the dollar values of the programs we reviewed in this and the previous DoD OIG audit reports we identified, we consider it reasonable to have stated that if JROC validated a requirements document for an MDAP with an inaccurate procurement quantity, billions of dollars could be wasted.
The Vice Chairman’s response accepted the recommendations, but did not address the recommendations, or identify a completion date; therefore, the recommendations are unresolved and remain open. We request the Deputy Secretary of Defense and Vice Chairman of the Joint Chiefs of Staff, specifically address the recommendations by October 6, 2017.
Three versions of section 181 in title 10 of the United States Code (U.S.C.) are relevant to this audit. According to 10 U.S.C § 181 (2007), JROC is required to assist the Chairman of the Joint Chiefs of Staff in identifying, assessing, and approving joint military requirements. Joint military requirements are the capabilities necessary to fill or prevent a gap in a DoD core mission area, and requirements documents must describe the quantities of assets required to attain the capability requirements. Therefore, under 10 U.S.C § 181 (2007), JROC has had a duty to assess and review procurement quantity as part of its validation of MDAPs since 2007.
This report is a result of Project No. D2016-D000AU-0118.000.