Procurement

DOD Can Use Economic Production Data More Effectively Gao ID: NSIAD-86-37 January 28, 1986

GAO reviewed the Department of Defense's (DOD) development and use of economic production rate (EPR) information for major weapon systems to assess the level of production, which results in the most effective and efficient use of existing manufacturing plants and facilities.

GAO noted that EPR data are one of several important factors to be considered in making major system procurement decisions, because the comparison of weapon systems unit costs at various alternative production levels provides data which help promote more efficient defense procurement. GAO found that: (1) the military services are inconsistently reporting production data because DOD has neither clearly defined what data should be reported nor established formal, written criteria for selecting weapon systems to include in the reporting process; (2) DOD does not routinely require the services to develop and provide, as part of the budgetary process, unit cost data at various production levels; (3) when the services have reported data for a specific purpose, they have done so inconsistently and on a limited basis; (4) inconsistently developed data limit program comparisons and funding trade-offs; and (5) while some progress has been made, many of the 50 monitored systems were below the minimum EPR in either fiscal year (FY) 1984 or FY 1985.

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.

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