DOD Needs To Provide More Credible Weapon Systems Cost Estimates to the Congress

In response to a congressional request, GAO reviewed the Department of Defense's (DOD) cost estimating process on seven selected weapon systems. GAO noted that, while its sample does not permit a projection of the results servicewide or DOD-wide, the cases do illustrate the types of problems that have hampered effective cost estimating for weapon systems.

GAO found that, while DOD has initiated efforts to improve cost estimating and reporting, the estimating process could be further improved with better guidance, assumptions, and methodologies. In particular, GAO noted that some guidance provided in DOD and service instructions is vague and conflicting and that guidance is not always strictly implemented to ensure that estimates are properly structured, documented, and developed. In addition, while DOD instructions call for the use of realistic factors and assumptions, management's efforts to keep cost estimates as low as possible sometimes lead to optimistic estimates. GAO also believes that the recommendations of independent estimators should be thoroughly considered and that the reasons for not accepting such estimates should be documented. Finally, GAO stated that DOD reports to Congress on the cost, schedule, and performance of major weapon systems could be improved by expeditiously recognizing total anticipated program costs and reflecting them in the reports.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Paul F. Math Team: General Accounting Office: National Security and International Affairs Division Phone: (202) 512-4587