Acquisition Requirements

Several efforts are underway to overhaul the Pentagon's acquisition system. Widespread support exists for streamlining the defense acquisition process to ease the administrative burden on the Defense Department and its contractors and to integrate the defense and commercial sectors of industry. GAO, which strongly supports acquisition reform, recently visited eight contractors and talked to experts and trade associations about this issue. This report discusses (1) how the eight contractors integrate or separate their structures and operations to do business with the defense and commercial structures and (2) whether these structures and operations are caused or influenced by defense acquisition laws, regulations, practices, and specifications.

GAO found that: (1) in the companies studied, there are varying degrees of integration in their administrative, research and development, and production activities; (2) all but one of the companies either separated their defense and commercial administrative operations or assigned additional people to comply with DOD acquisition requirements; (3) the companies integrate production for defense and commercial customers when warranted by product similarity; (4) defense and commercial research and development operations are integrated to varying degrees; and (5) although acquisition requirements seem to have the greatest effect on administrative structures and operations, other economic factors can greatly affect how a company structures production or otherwise does business.