Tactical Missile Acquisitions

Understated Technical Risks Leading to Cost and Schedule Overruns Gao ID: NSIAD-91-280 September 17, 1991

Pursuant to a congressional request, GAO examined missile acquisition programs to determine: (1) whether they are meeting their cost and schedule goals; and (2) why some programs fail to meet those goals.

GAO found that: (1) all 12 of the missile systems reviewed experienced cost and schedule overruns; (2) the unit or total acquisition cost estimates for 9 of the 12 systems have increased by 20 percent or more, and the scheduled completion dates for all 12 systems were extended; (3) optimistic planning assumptions by program officials were a common factor underlying major overruns because program offices often develop cost and schedule estimates that do not adequately reflect the risks associated with the program's design, development, and production; (4) Department of Defense (DOD) independent technical risk assessments did not adequately reflect the risks associated with program design, development, and production; (5) DOD recently implemented revised regulations and procedures designed to improve technical risk management; (6) good internal controls are essential to achieving the proper conduct of government business with full accountability and serve as checks and balances against undesired actions; and (7) a 1989 study of weapon system cost and schedule trends found that tactical missiles experienced the highest total growth of any class of systems examined.

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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