Interim Observations on Review of DOD's Manufacturing Technology Program

In response to a congressional request, GAO provided interim observations on the management of the Department of Defense's (DOD) Manufacturing Technology (MT) Program and described its relationship to other DOD productivity programs.

GAO found that the Office of the Secretary of Defense and the military services have taken several actions to improve the management of the program since GAO issued a report disclosing weaknesses in program management. However, further management improvements may be warranted in some areas. DOD disagreed with a GAO recommendation to ensure that the services prioritize projects to achieve primary program goals. DOD asserted that funding should be permitted for MT projects that go beyond the primary aims of cost reduction and productivity enhancement. DOD also disagreed with a GAO recommendation to devise and institute a consistent project ranking system. DOD asserted that a consolidated project ranking system would not improve the project selection process because the program is funded from various appropriations and funds are not transferred between appropriations. GAO disagreed with these assertions stating that: (1) the program objectives are distorted by funding some types of projects; and (2) the second recommendation would not involve any transfer of funds. DOD concurred with five other GAO recommendations and asserted that strengthening centralized program managment within each service would provide a positive response to most of the GAO recommendations. GAO stated that the Industrial Modernization Incentives Program, if successful, could increase the likelihood that the results of some MT projects will be used in actual production. In addition, GAO found significant differences between the Productivity Enhancing Capital Investment Program and the MT program.