Weapons Acquisition
DOD Should Strengthen Policies for Assessing Technical Data Needs to Support Weapon Systems Gao ID: GAO-06-839 July 14, 2006A critical element in the life cycle of a weapon system is the availability of the item's technical data--recorded information used to define a design and to produce, support, maintain, or operate the item. Because a weapon system may remain in the defense inventory for decades following initial acquisition, technical data decisions made during acquisition can have far-reaching implications over its life cycle. In August 2004, GAO recommended that the Department of Defense (DOD) consider requiring program offices to develop acquisition strategies that provide for future delivery of technical data should the need arise to select an alternative source for logistics support or to offer the work out for competition. For this review, GAO (1) evaluated how sustainment plans for Army and Air Force weapon systems had been affected by technical data rights and (2) examined requirements for obtaining technical data rights under current DOD acquisition policies.
The Army and the Air Force have encountered limitations in their sustainment plans for some fielded weapon systems because they lacked needed technical data rights. The lack of technical data rights has limited the services' flexibility to make changes to sustainment plans that are aimed at achieving cost savings and meeting legislative requirements regarding depot maintenance capabilities. GAO identified seven weapon system programs that encountered such limitations--C-17, F-22, and C-130J aircraft, Up-armored High-Mobility Multipurpose Wheeled Vehicle, Stryker family of vehicles, Airborne Warning and Control System aircraft, and M4 carbine. Although the circumstances surrounding each case were unique, earlier decisions made on technical data rights during system acquisition were cited as a primary reason for the limitations subsequently encountered. As a result of the limitations encountered, the services had to alter their plans for developing maintenance capability at public depots, developing new sources of supply to increase production, or soliciting competitive offers for the acquisition of spare parts and components to reduce sustainment costs. For example, the Air Force identified a need to develop a core maintenance capability for the C-17 at government depots to ensure it had the ability to support national defense emergencies, but it lacked the requisite technical data rights. To mitigate this limitation, the Air Force is seeking to form partnerships with C-17 sub-vendors. However, according to Air Force officials, some sub-vendors have declined to provide the needed technical data needed to develop core capability. Although GAO did not assess the rationale for the decisions made on technical data rights during system acquisition, several factors, such as the extent the system incorporates technology that was not developed with government funding and the potential for changes in the technical data over the weapon system's life cycle, may complicate program managers' decisions. Current DOD acquisition policies do not specifically address long-term technical data rights for weapon system sustainment. For example, DOD's policies do not require program managers to assess long-term needs for technical data rights to support weapon systems and, correspondingly, to develop acquisition strategies that address those needs. DOD, as part of the department's acquisition reforms and performance-based strategies, has deemphasized the acquisition of technical data rights. Although GAO has recommended that DOD emphasize the need for technical data rights, DOD has not implemented these recommendations. The Army and the Air Force have recognized weaknesses in their approaches to assessing and securing technical data rights and have begun to address these weaknesses by developing more structured approaches. However, DOD acquisition policies do not facilitate these efforts. Unless DOD assesses and secures its rights for the use of technical data early in the weapon system acquisition process when it has the greatest leverage to negotiate, DOD may face later challenges in sustaining weapon systems over their life cycle.
RecommendationsOur 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: Team: Phone:GAO-06-839, Weapons Acquisition: DOD Should Strengthen Policies for Assessing Technical Data Needs to Support Weapon Systems
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Report to Congressional Committees:
July 2006:
Weapons Acquisition:
DOD Should Strengthen Policies for Assessing Technical Data Needs to
Support Weapon Systems:
GAO-06-839:
GAO Highlights:
Highlights of GAO-06-839, a report to congressional committees
Why GAO Did This Study:
A critical element in the life cycle of a weapon system is the
availability of the item‘s technical data”recorded information used to
define a design and to produce, support, maintain, or operate the item.
Because a weapon system may remain in the defense inventory for decades
following initial acquisition, technical data decisions made during
acquisition can have far-reaching implications over its life cycle. In
August 2004, GAO recommended that the Department of Defense (DOD)
consider requiring program offices to develop acquisition strategies
that provide for future delivery of technical data should the need
arise to select an alternative source for logistics support or to offer
the work out for competition. For this review, GAO (1) evaluated how
sustainment plans for Army and Air Force weapon systems had been
affected by technical data rights and (2) examined requirements for
obtaining technical data rights under current DOD acquisition policies.
What GAO Found:
The Army and the Air Force have encountered limitations in their
sustainment plans for some fielded weapon systems because they lacked
needed technical data rights. The lack of technical data rights has
limited the services‘ flexibility to make changes to sustainment plans
that are aimed at achieving cost savings and meeting legislative
requirements regarding depot maintenance capabilities. GAO identified
seven weapon system programs that encountered such limitations”C-17, F-
22, and C-130J aircraft, Up-armored High-Mobility Multipurpose Wheeled
Vehicle, Stryker family of vehicles, Airborne Warning and Control
System aircraft, and M4 carbine. Although the circumstances surrounding
each case were unique, earlier decisions made on technical data rights
during system acquisition were cited as a primary reason for the
limitations subsequently encountered. As a result of the limitations
encountered, the services had to alter their plans for developing
maintenance capability at public depots, developing new sources of
supply to increase production, or soliciting competitive offers for the
acquisition of spare parts and components to reduce sustainment costs.
For example, the Air Force identified a need to develop a core
maintenance capability for the C-17 at government depots to ensure it
had the ability to support national defense emergencies, but it lacked
the requisite technical data rights. To mitigate this limitation, the
Air Force is seeking to form partnerships with C-17 sub-vendors.
However, according to Air Force officials, some sub-vendors have
declined to provide the needed technical data needed to develop core
capability. Although GAO did not assess the rationale for the decisions
made on technical data rights during system acquisition, several
factors, such as the extent the system incorporates technology that was
not developed with government funding and the potential for changes in
the technical data over the weapon system‘s life cycle, may complicate
program managers‘ decisions.
Current DOD acquisition policies do not specifically address long-term
technical data rights for weapon system sustainment. For example, DOD‘s
policies do not require program managers to assess long-term needs for
technical data rights to support weapon systems and, correspondingly,
to develop acquisition strategies that address those needs. DOD, as
part of the department‘s acquisition reforms and performance-based
strategies, has deemphasized the acquisition of technical data rights.
Although GAO has recommended that DOD emphasize the need for technical
data rights, DOD has not implemented these recommendations. The Army
and the Air Force have recognized weaknesses in their approaches to
assessing and securing technical data rights and have begun to address
these weaknesses by developing more structured approaches. However, DOD
acquisition policies do not facilitate these efforts. Unless DOD
assesses and secures its rights for the use of technical data early in
the weapon system acquisition process when it has the greatest leverage
to negotiate, DOD may face later challenges in sustaining weapon
systems over their life cycle.
What GAO Recommends:
To ensure that DOD can support sustainment plans for weapon systems
throughout their life cycle, including revisions to these plans aimed
at achieving cost savings and complying with legislative requirements,
GAO recommends improvements in DOD‘s acquisition policies regarding the
acquisition of technical data. DOD concurred with GAO‘s
recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-839].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact William M. Solis at (202)
512-5140 or solisw@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Army and Air Force Encountered Limitations in Their Sustainment Plans
for Some Fielded Weapon Systems:
DOD Acquisition Policies Do Not Specifically Address Long-term Needs
for Technical Data Rights:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Scope and Methodology:
Appendixes:
Appendix I: GAO's Preliminary Observations on the Department of
Defense's Acquisition of Technical Data to Support Weapons Systems:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contact and Staff Acknowledgments:
Abbreviations:
AWACS: Airborne Warning and Control System:
DAPWG: Defense Acquisition Policy Working Group:
DOD: Department of Defense:
HMMWV: High-Mobility Multipurpose Wheeled Vehicle:
NAVAIR: Naval Aviation Systems Command:
NAVSEA: Naval Sea Systems Command:
OSD: Office of the Secretary of Defense:
SSTS : sustainment systems technical support:
TACOM: Tank-automotive and Armaments Command:
USD/ATL: Under Secretary of Defense (Acquisition, Technology, and
Logistics):
July 14, 2006:
The Honorable John Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Duncan L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
A critical element in the life cycle of a weapon system is the
availability of the item's technical data--that is, recorded
information used to define a design and to produce, support, maintain,
or operate the item.[Footnote 1] The Department of Defense (DOD)
negotiates its rights to weapon system technical data when it contracts
with defense equipment manufacturers. During the acquisition process,
DOD determines what technical data rights it requires from the
manufacturer in order to meet its future weapon support needs. Because
a weapon system may remain in the defense inventory for decades
following initial acquisition, decisions made at the time of
acquisition can have far-reaching implications for weapon system
support over the system's life cycle, and the failure to negotiate
adequate technical data rights may impede the government's ability to
sustain the weapon system. For example, DOD would need technical data
rights to develop new sources of supply, to recompete follow-on
procurements of equipment, or to develop depot-level maintenance
capabilities. In an August 2004 report,[Footnote 2] we recommended that
DOD consider requiring program offices to develop acquisition
strategies that provide for a future delivery of technical data should
the need arise to select an alternative source for logistics support or
to offer the work out for competition. DOD concurred with our
recommendation.
This report responds to a provision in a House Report for the fiscal
year 2006 Defense Authorization Bill[Footnote 3] that we follow up on
our August 2004 report and review DOD's technical data policies
affecting the sustainment of fielded weapon systems, as well as other
issues related to technical data. In February 2006, we briefed your
offices on our preliminary observations (see app. I). This report
updates and expands on the information in that briefing and provides
recommendations to the Secretary of Defense. Specifically, our
objectives were to (1) evaluate how Army and Air Force sustainment
plans for fielded weapon systems had been affected by technical data
rights and (2) examine requirements for obtaining technical data rights
under current DOD acquisition policies. The House Report also asked us
to review the military services' access to technical data to support
field maintenance of weapon systems and to examine the costs for
gaining such access. These issues are addressed in appendix I.
To conduct our review, we met with Army and Air Force acquisition and
logistics officials to identify sustainment plans for fielded weapon
systems that may have been affected by the technical data rights
available to the government. We discussed, and obtained supporting
documentation on, the circumstances surrounding these cases, the extent
that a lack of technical data rights for these systems was a factor,
and the effect on the systems' sustainment plans. We did not assess the
rationale for the decisions made on technical data rights during system
acquisition, nor did we determine the extent that program offices
complied with acquisition policies regarding technical data that
existed at the time of the acquisition. We analyzed current DOD
acquisition policies and guidance, interviewed DOD and service
officials, and collected DOD correspondence addressing our August 2004
recommendation. We met with Army and Air Force logistics officials to
obtain information on their efforts to review acquisition policies and
practices regarding technical data rights. We determined that the data
used were sufficiently reliable for our purposes. We conducted our
review from October 2005 through May 2006 in accordance with generally
accepted government auditing standards. The Scope and Methodology
section contains more detailed information about the work we performed.
Results in Brief:
The Army and the Air Force have encountered limitations in their
sustainment plans for some fielded weapon systems because they lacked
needed technical data rights. The lack of technical data rights has
limited the services' flexibility to make changes to sustainment plans
that are aimed at achieving cost savings and meeting legislative
requirements regarding depot maintenance capabilities. During our
review we identified seven Army and Air Force weapon system programs
where these military services encountered limitations in implementing
revisions to sustainment plans--C-17 aircraft, F-22 aircraft, C-130J
aircraft, Up-armored High-Mobility Multipurpose Wheeled Vehicle
(HMMWV), Stryker family of vehicles, Airborne Warning and Control
System (AWACS) aircraft, and M4 carbine. Although the circumstances
surrounding each case were unique, earlier decisions made on technical
data rights during system acquisition were cited as a primary reason
for the limitations subsequently encountered. As a result of the
limitations encountered due to the lack of technical data rights, the
services had to alter their plans for developing maintenance capability
at public depots, new sources of supply to increase production, or
competitive offers for the acquisition of spare parts and components to
reduce sustainment costs. For example, the Air Force identified a need
to develop a capability to perform maintenance on the C-17 at
government depots but lacked the requisite technical data rights.
Consequently, the Air Force is seeking to form partnerships with C-17
sub-vendors to develop its depot maintenance capability. Its efforts to
form these partnerships have had mixed results, according to Air Force
officials, because some sub-vendors have declined to provide the needed
technical data. Although we did not assess the rationale for the
decisions made on technical data rights during the acquisition of these
seven systems, there are several factors that may complicate program
managers' decisions regarding technical data rights. These factors
include the contractors' interests in protecting their intellectual
property rights, the extent the system being acquired incorporates
technology that was not developed with government funding, the
potential for changes in the technical data over the weapon system's
life cycle, the extent to which long-term sustainment strategies may
require rights to technical data versus access to the data, the
numerous funding and capability trade-offs program managers face during
the acquisition of a weapon system, the long life cycle of many weapon
systems, and changes in DOD policies regarding the acquisition of
technical data and the implementation of performance-based logistics.
Despite the challenges faced by program managers in determining long-
term needs for technical data rights and the implications of their
decisions for weapon system sustainment, current DOD acquisition
policies do not specifically address long-term technical data rights
for weapon system sustainment. For example, DOD's current acquisition
policies do not require program managers to assess long-term needs for
technical data rights to support weapon systems and, correspondingly,
to develop acquisition strategies that address those needs. DOD
guidance and policy changes, as part of the department's acquisition
reforms and performance-based strategies, have deemphasized the
acquisition of technical data rights. DOD also has not implemented our
August 2004 recommendation for developing technical data acquisition
strategies, although it has recently reiterated its intent to do so. In
the absence of a DOD-wide policy on technical data rights, the Army and
the Air Force are working independently to develop structured
approaches for assessing technical data requirements and securing
rights to these data. Their efforts, as well as our prior and current
work, show that it is during the development of the solicitation and
the subsequent negotiation of a proposed contract that the government
is in the best position to negotiate and secure required technical data
rights. In addition, the Air Force is pursuing the use of priced
options--negotiated in weapon system acquisition contracts--to retain
the option for acquiring technical data rights at some point later in
the weapon system's life cycle. Army and Air Force logistics officials
told us that their efforts would benefit from having a DOD policy that
specifically addresses long-term needs for technical data rights
supporting weapon system sustainment.
To ensure that DOD can support sustainment plans for weapon systems
throughout their life cycle, we are recommending improvements in DOD's
acquisition policies regarding the acquisition of technical data. In
commenting on a draft of this report, DOD concurred with our report and
recommendations. DOD's response is included in appendix II.
Background:
In recent years, DOD has taken steps to improve its processes for
acquiring and sustaining weapon systems. As part of these improvements,
program managers are now responsible for the total life-cycle
management of a weapon system, to include the sustainment of the
system. In addition, DOD has directed weapon system program managers to
develop acquisition strategies that maximize competition, innovation,
and interoperability and the use of commercial, rather than military-
unique, items to reduce costs.[Footnote 4] Within the area of weapon
system sustainment, DOD is pursuing the use of performance-based
logistics as the preferred support strategy for its weapon systems.
Performance- based logistics, a variation on other contractor logistics
support strategies calling for the long-term support of weapon systems,
involves defining a level of performance that the weapon system is to
achieve over a period of time at a fixed cost to the government.
Technical data rights can affect DOD's plans to sustain weapon systems
throughout their life cycle. For example, DOD would need technical data
rights if it opts to reduce spare parts costs by developing new sources
of supply, to meet wartime surge requirements by contracting with
additional equipment suppliers, or to reduce system acquisition costs
by recompeting follow-on procurements of the equipment. In addition,
DOD may need to develop depot-level maintenance capabilities for its
weapon systems at government depots in order to meet legislative
requirements. DOD is required under 10 U.S.C. 2464 to identify and
maintain within government-owned and government-operated facilities a
core logistics capability, including the equipment, personnel, and
technical competence identified as necessary for national defense
emergencies and contingencies. Under 10 U.S.C. 2466, not more than 50
percent of the funds made available in a fiscal year to a military
department or defense agency for depot-level repair and maintenance can
be used to contract for performance by nonfederal personnel. These
provisions can limit the amount of depot-level maintenance that can be
performed by contractors. Finally, DOD would also need technical data
rights for a weapon system should a contractor fail to perform,
including a contractor working under a performance-based logistics
arrangement. DOD has referred to this contingency as an "exit
strategy."
Army and Air Force Encountered Limitations in Their Sustainment Plans
for Some Fielded Weapon Systems:
The Army and the Air Force have encountered limitations in their
sustainment plans for some fielded weapon systems because they lacked
needed technical data rights. The lack of technical data rights has
limited the services' flexibility to make changes to sustainment plans
that are aimed at achieving cost savings and meeting legislative
requirements regarding depot maintenance capabilities. During our
review we identified seven weapon system programs where these military
services encountered limitations in their sustainment plans. Although
the circumstances surrounding each case were unique, earlier decisions
made on technical data rights during system acquisition were cited as a
primary reason for the limitations subsequently encountered. As a
result, the services had to alter their plans for developing
maintenance capability at public depots, new sources of supply to
increase production, or competitive offers for the acquisition of spare
parts and components to reduce sustainment costs. In at least three of
the cases, the military service made attempts to obtain needed
technical data subsequent to the system acquisition but found that the
equipment manufacturer declined to provide the data or that acquiring
the data would be too expensive. We did not assess the rationale for
the decisions made on technical data rights during the acquisition of
these systems.
The seven weapon system programs we identified where a lack of
technical data rights affected the implementation of sustainment plans
are summarized below:
* C-17 aircraft: When the Air Force began acquisition of the C-17
aircraft, it did not acquire technical data rights needed to support
maintenance of the aircraft at public depots. According to a program
official, the Air Force did not consider the aircraft's depot
maintenance workload as necessary to support DOD's depot maintenance
core capability. Subsequently, however, the Air Force's 2001 depot
maintenance core assessment identified the C-17 aircraft workload as
necessary to support core capability. The Air Force determined that it
did not have the technical data rights needed to perform the required
maintenance. According to C-17 program officials, the C-17 prime
contractor did not acquire data rights for C-17 components provided by
sub-vendors and consequently was not able to provide the needed data
rights to the Air Force. The prime contractor has encouraged its sub-
vendors to cooperate with the Air Force in establishing partnerships to
accomplish the needed core depot maintenance. Under these partnerships,
Air Force depots would provide the facilities and labor needed to
perform the core depot maintenance work, and the sub-vendor would
provide the required technical data. According to Air Force officials,
there are some instances where the sub-vendor is unwilling to provide
the needed technical data. For example, in the case of the C-17's
inertial navigation unit, the sub-vendor maintains that the inertial
navigation unit is a commercial derivative item and the technical data
needed to repair the item are proprietary. As of April 18, 2006, the
sub-vendor was declining to provide the technical data needed to the
Air Force. Without the rights to the technical data or a partnership
with the sub-vendor, the Air Force cannot develop a core maintenance
capability for this equipment item.
* F-22 aircraft: The acquisition of the Air Force's F-22 aircraft did
not include all of the technical data needed for establishing required
core capability workload at Air Force depots. Early in the F-22
aircraft's acquisition, the Air Force planned to use contractors to
provide needed depot-level maintenance and therefore decided not to
acquire some technical data rights from sub-vendors in order to reduce
the aircraft's acquisition cost. Subsequently, however, the Air Force
determined that portions of the F-22 workload were needed to satisfy
core depot maintenance requirements. The Air Force is currently
negotiating contracts for the technical data rights needed to develop
depot-level maintenance capability. While the Air Force has negotiated
contracts to acquire technical data for four F-22 aircraft components,
F-22 program officials expressed concern that it may become difficult
to successfully negotiate rights to all components.
* C-130J aircraft: The Air Force purchased the C-130J aircraft as a
commercial item and, as such, did not obtain technical data rights
needed to competitively purchase C-130J-unique spare parts and
components or to perform depot-level maintenance core
workload.[Footnote 5] The C-130J shares many common components with
earlier versions of the C-130 for which the government has established
DOD and contractor repair sources. In 2004, the DOD Inspector General
reported that the Air Force's use of a commercial item acquisition
strategy was unjustified to acquire the C-130J aircraft.[Footnote 6] In
response to the Inspector General's findings and added congressional
interest, the Air Force is converting its C-130J acquisition to
traditional defense system acquisition and sustainment contracts.
However, because the Air Force did not acquire the necessary technical
data during the acquisition process, it has less leverage to negotiate
rights to data. In 2005, the Air Force approached the aircraft
manufacturer to purchase technical data rights for C-130J-unique
components, but the aircraft manufacturer declined to sell the data
rights. Because of its lack of the needed technical data, the Air Force
is planning to establish partnerships with C-130J sub-vendors that have
technical data rights to components of the C-130J. Under these
partnerships, Air Force depots would provide the facilities and labor
needed to perform the core depot maintenance work, and the sub-vendors
would provide the required technical data. C-130J program officials
expressed concerns that in some instances sub-vendors may not be
willing to partner. The Air Force currently expects to develop
approximately 90 partnerships with as many different vendors on
approximately 300 C-130J core candidate components. Program officials
expressed concern about the proliferation of partnerships and said the
Air Force will incur additional costs to develop, manage, and monitor
these partnerships, but they had not determined what these costs will
be.
* Up-armored High-Mobility Multipurpose Wheeled Vehicles: When the Army
first developed the up-armored HMMWV in 1993, it did not purchase the
technical data necessary to develop new sources of supply to increase
production. Army officials anticipated fielding these vehicles to a
limited number of Army units for reconnaissance and peacekeeping
purposes. At that time, the Army did not obtain technical data required
for the manufacture of up-armor HMMWVs. With the increasing threat of
improvised explosive devices during operations in Iraq, demand for up-
armored HMMWVs increased substantially, from 1,407 vehicles in August
2003 to 8,105 vehicles by September 2004. According to Army officials,
the manufacturer declined to sell the rights to the technical data
package. Because of the lack of technical data rights to produce up-
armored HMMWVs, program officials explained they were unable to rapidly
contract with alternate suppliers to meet the wartime surge
requirement.
* Stryker family of vehicles: When acquiring the Stryker, the Army did
not obtain technical data rights needed to develop competitive offers
for the acquisition of spare parts and components. Following the
initial acquisition, the program office analyzed alternatives to the
interim contractor support strategy for the weapon system and attempted
to acquire rights to the manufacturer's technical data package. The
technical data package describes the parts and equipment in sufficient
technical detail to allow the Army to use competition to lower the cost
of parts. The contractor declined to sell the Stryker's technical data
package to the Army. Further, according to an Army Audit Agency report,
the project office stated that the cost of the technical data, even if
available, would most likely be prohibitively expensive at this point
in the Stryker's fielding and would likely offset any cost savings
resulting from competition.[Footnote 7]
* Airborne Warning and Control System aircraft: The Air Force lacked
technical data for the AWACS needed to develop competitive offers for
the purchase of certain spare parts. When the Air Force recently
purchased cowlings (metal engine coverings) for the AWACS, it did so on
a noncompetitive, sole-source basis. The Defense Contract Management
Agency recommended that the cowlings be competed because the original
equipment manufacturer's proposed price was not fair and reasonable and
because another potential source for the part was available. Despite
the recommendation, however, the Air Force said it lacked the technical
data to compete the purchase. We noted that while the Air Force and the
original equipment supplier have a contract that could allow the Air
Force to order technical drawings for the purpose of purchasing
replenishment spare parts, the contractor had not always delivered such
data based on uncertainties concerning the Air Force's rights to the
data.[Footnote 8]
* M4 carbine: When the Army purchased its new M4 carbine, it did not
acquire the technical data rights necessary to recompete follow-on
purchases of the carbine. The M4 carbine is a derivative of the M16
rifle and shares 80 percent of its parts with the M16. However, because
the remaining 20 percent of parts were funded by the developer, the
Army did not have all the rights needed to compete subsequent
manufacture of the M4. The Army estimated that the unit cost is about
twice as much for the M4 compared with the M16, despite increases in
procurement quantities for the M4 and the large commonality of parts.
According to Army officials, having the technical data rights for the
M16 allowed the Army to recompete the procurement of the rifle,
resulting in a significantly decreased unit procurement cost.
Although we did not assess the rationale for the decisions made on
technical data rights during the acquisition of these systems, several
factors may complicate program managers' decisions on long-term
technical data rights for weapon systems. These factors include the
following:
* The contractor's interests in protecting its intellectual property
rights. Because contractors need to protect their intellectual property
from uncompensated use, they often resist including contract clauses
that provide technical data rights to the government.
* The extent to which the system being acquired incorporates technology
that was not developed with government funding. According to DOD's
acquisition guidance,[Footnote 9] the government's funding of weapon
system development determines the government's rights to technical
data. Weapon systems are frequently developed with some mix of
contractor and government funding, which may present challenges to DOD
in negotiating technical data rights with the contractor.
* The potential for changes in the technical data over the weapon
system's life cycle. The technical data for a weapon system may change
over its life cycle, first as the system's technology matures and later
as the system undergoes modifications and upgrades to incorporate new
technologies and capabilities. The potential for changes in technical
data present challenges concerning when the government should take
delivery of technical data, the format used to maintain technical data,
and whether the data should be retained in a government or contractor
repository.
* The extent to which the long-term sustainment strategy may require
rights to technical data versus access to the data. According to Army
officials, access to contractor technical data is sometimes presented
as an alternative to the government taking delivery of the data. These
officials noted that while access to technical data may allow for
oversight of the contractor and may reduce the program manager's data
management costs, it may not provide the government with rights to use
the technical data should a change in the sustainment plan become
necessary.
* The numerous funding and capability trade-offs program managers face
during the acquisition of a weapon system. Program managers are
frequently under pressure to spend limited acquisition dollars on
increased weapon system capability or increased numbers of systems,
rather than pursuing technical data rights.
* The long life cycle of many weapon systems. With weapon systems
staying in DOD's inventory for longer periods--up to 40 years, it may
be difficult for the program manager to plan for future contingencies
such as modifications and upgrades, spare parts obsolescence,
diminishing manufacturing support, and diminishing maintenance support.
DOD Acquisition Policies Do Not Specifically Address Long-term Needs
for Technical Data Rights:
DOD's acquisition policies do not specifically address long-term needs
for technical data rights to sustain weapon systems over their life
cycle, and in the absence of a DOD-wide policy, the Army and the Air
Force are working independently to develop structured approaches for
defining technical data requirements and securing rights to those data.
DOD's current acquisition policies do not specifically require program
managers to assess long-term needs for technical data rights to support
weapon systems and, correspondingly, to develop acquisition strategies
that address those needs. DOD guidance and policy changes, as part of
the department's acquisition reforms and performance-based strategies,
have deemphasized the acquisition of technical data rights. DOD
concurred with but has not implemented our August 2004 recommendation
for developing technical data acquisition strategies, although it has
recently reiterated its intent to do so. Army and Air Force logistics
officials are working independently to develop structured approaches
for determining technical data rights requirements and securing long-
term rights for use of those data. Logistics officials told us that
their efforts would benefit from having a DOD policy that specifically
addresses long-term technical data needs for weapon system sustainment.
DOD Acquisition Policies Do Not Specifically Require Program Managers
to Assess Long-term Needs for Technical Data Rights or Develop
Corresponding Acquisition Strategies:
Current DOD acquisition policies do not specifically require program
managers to assess long-term needs for technical data rights to sustain
weapon systems, and, correspondingly, to develop acquisition strategies
that address those needs. DOD Directive 5000.1, the agency's policy
underlying the defense acquisition framework, designates program
managers as the persons with responsibility and authority for
accomplishing acquisition program objectives for development,
production, and sustainment to meet the users' operational
needs.[Footnote 10] The directive, however, does not provide specific
guidance as to what factors program managers should consider in
developing a strategy to sustain the weapon system, including
considerations regarding technical data. DOD Instruction 5000.2, the
agency's policy for implementing DOD Directive 5000.1, requires program
managers to ensure the development of a flexible strategy to sustain a
program so that the strategy may evolve throughout the weapon system's
life cycle.[Footnote 11] In addition, DOD provides non-mandatory
guidebooks to assist program managers with acquisition and product
support. However, DOD acquisition policy does not specifically direct
the program manager, when acquiring a weapon system, to define the
government's requirements for technical data rights, an important
aspect of a flexible sustainment strategy.
DOD guidance and policy changes, as part of the department's
acquisition reforms and performance-based strategies, have deemphasized
the acquisition of technical data rights. For example, a 2001
memorandum signed by DOD's senior acquisition official stated that the
use of performance-based acquisition strategies may obviate the need
for data or rights.[Footnote 12] Also in 2001, DOD issued guidance on
negotiating intellectual property rights and stated that program
officials should seek to establish performance-based requirements that
enhance long-term competitive interests, in lieu of acquiring detailed
design data and data rights.[Footnote 13] In a May 2003 revision of its
acquisition policy, DOD eliminated a requirement for program managers
to provide for long- term access to technical data and required them to
develop performance- based logistics strategies.[Footnote 14]
Even prior to the May 2003 revision of DOD's acquisition policy, we had
raised concerns about whether DOD placed sufficient emphasis on
obtaining technical data during the acquisition process. We reported in
2002 that DOD program offices had often failed to place adequate
emphasis on obtaining needed technical data during the acquisition
process.[Footnote 15] We recommended that DOD emphasize the importance
of obtaining technical data and consider including a priced option for
the purchase of technical data when considering proposals for new
weapon systems or modifications to existing systems. While DOD
concurred with the recommendation, it subsequently made revisions to
its acquisition policies in May 2003, as noted above, that eliminated
the prior requirement for the program manager to provide for long-term
access to data.
DOD also has not implemented a prior recommendation we made for
developing technical data acquisition strategies, although it has
recently reiterated its intent to do so. In August 2004, we reported
that adoption of performance-based logistics at the weapon system
platform level may be influencing program managers to provide for
access only to technical data necessary to manage the performance-based
contract during the acquisition phase--and not to provide a strategy
for the future delivery of technical data in case the performance-based
arrangement failed.[Footnote 16] We recommended that DOD consider
requiring program offices to develop acquisition strategies that
provide for a future delivery of sufficient technical data should the
need arise to select an alternative source or to offer the work out for
competition. In response to our recommendation, DOD concurred that
technical, product, and logistics data should be acquired by the
program manager to support the development, production, operation,
sustainment, improvement, demilitarization, and disposal of a weapon
system. Furthermore, the department recognized the need to take steps
to stress the importance of technical data by its stated intent to
include a requirement in DOD's acquisition policies (DOD Directive
5000.1 and DOD Instruction 5000.2) for the program managers to
establish a data management strategy that requires access to the
minimum data necessary to sustain the fielded system; to recompete or
reconstitute sustainment, if necessary, to promote real time access to
data; and to provide for the availability of high-quality data at the
point of need for the intended user. In the case of performance-based
arrangements, that would include acquiring the appropriate technical
data needed to support an exit strategy should the arrangement fail or
become too expensive. Despite DOD's concurrence with our
recommendation, however, efforts to implement these changes have been
delayed.
Army and Air Force Are Working to Develop Structured Approaches for
Assessing Technical Data Needs and Securing Long-term Rights to Those
Data:
Army and Air Force logistics officials are independently developing
structured approaches for determining when and how in the acquisition
process the service should assess its requirements for technical data
and secure its long-term rights for use of those data. The aim of these
efforts is to ensure future sustainment needs of weapon systems are
adequately considered and supported early during the acquisition
process. Logistics officials from each service told us that their
efforts would benefit from having a DOD policy that specifically
addresses long-term technical data needs for weapon system sustainment.
In the absence of a mandatory DOD requirement to address technical
data, service officials said, program managers may not fully consider
and incorporate long-term requirements for technical data rights during
system acquisition.
According to Army and Air Force officials, their reviews of current
policies and practices indicate that it is during the development of
the solicitation and the subsequent negotiation of a proposed contract
that the government is in the best position to secure required
technical data rights.[Footnote 17] This point in the acquisition
process is likely to present the greatest degree of competitive
pressure, and the weapon system program office can consider technical
data as a criterion for evaluating proposals and selecting a
contractor. In addition, the Air Force is pursuing the use of priced
options negotiated in contracts for new weapon systems or modifications
to existing systems. A priced option retains the option for acquiring
technical data rights at some point later in the weapon system's life
cycle. According to Air Force officials, priced options for technical
data may ensure the government's rights to the data and control the
cost of technical data in the future. The Air Force is attempting to
incorporate priced options for technical data in two new weapon system
acquisitions. We have previously recommended that DOD require the
military services to consider the merits of including a priced option
for the purchase of technical data when proposals for new weapon
systems or modifications to existing systems are being
considered.[Footnote 18]
Army Technical Data Efforts:
The Army established a working group in March 2005 to serve as a forum
for determining requirements for and resolving issues associated with
the management and use of technical data.[Footnote 19] One task of the
working group is to develop a structured process for determining what
technical data are needed for any given system. Another task is to
clarify technical data policy and reconcile the best practices of
acquisition reform with the need for technical data rights in support
of weapon system acquisition and sustainment. The group is also
reviewing pertinent federal and DOD policy and guidance, as well as
instruction materials used by the Defense Acquisition University for
acquisition career training, with the aim of identifying ambiguities or
inconsistencies. This effort focuses on areas of the acquisition
process where technical data and acquisition intersect, such as systems
engineering, configuration management, data management, contracting,
logistics, and financial management. Some anticipated products from the
group include the following proposed items:
* changes to integrate and clarify policy on technical data and weapon
system acquisition policy,
* draft instruction material to better define and explain the value of
technical data rights and the uses of technical data throughout the
weapon system life cycle, and:
* a comprehensive primer to provide the acquisition professional a
guide for ensuring that there is a contract link between weapon system
acquisition and sustainment strategies on the one hand and the
technical data strategy on the other.
According to members of the working group, if the government's rights
have not been protected in the contract, then it may be necessary to
negotiate the rights to use the data at a later date, which could be
cost-prohibitive. Army Materiel Command officials told us that having a
DOD policy on when and how in the acquisition process technical data
rights should be addressed would help them as they revise their policy
and guidance. The product data working group plans to complete its
preliminary work by the end of fiscal year 2006.
In January 2006, the U.S. Army's Tank-automotive and Armaments Command
completed a study evaluating the importance of technical data over the
life cycle of a weapon system, with particular emphasis on sustainment.
While the Army had not yet approved and released the final report,
members of the study team indicated the following:
* Previous DOD guidance on the data rights required for performance-
based logistics contracts has been ambiguous and open to
misinterpretation. This ambiguity has resulted in many programs' not
acquiring rights to technical data for long-term weapon system
sustainment. Lack of technical data rights leads to risks associated
with the inability to broaden the industrial base to support Global War
on Terrorism surge requirements.
* The current process to identify the government's technical data
rights is ad hoc and unstructured.
* The government's rights to technical data are independent of the
logistics support strategy--whether government (organic) support,
traditional contract logistics support, or performance-based logistics.
According to team members, potential recommendations from the study are
to establish a new policy requiring the program manager to complete a
technical data rights decision matrix and to weigh the cost of
acquiring technical data against program risk. The technical data
rights should be negotiated as early as possible in the contracting
process and ideally should be used as a source selection factor. The
study team further states that the government should ensure that rights
to use the data are secured in the system development and demonstration
contract.
Air Force Technical Data Efforts:
Air Force officials are currently reviewing and developing proposed
changes to weapon system acquisition and support policies to require
that sustainment support and technical data rights decisions be made
early in weapon system acquisition. These efforts are part of the Air
Force Materiel Command's product support campaign, an effort to better
integrate the activities of the service's acquisition and logistics
communities.[Footnote 20] Air Force officials involved with the
campaign said their efforts could be facilitated if DOD's acquisition
policy were revised to more clearly direct program managers when and
how they are to define and secure the government's data rights during
weapon system acquisition. The campaign's policy focus team is working
on the efforts that would provide a more structured approach to early
determination of the government's technical data rights:
* revised polices to require that sustainment support decisions be made
and technical data rights be defined during the technology phase of
acquisition but prior to system development and demonstration;
* a standard template for contract solicitations, to be used to guide
the acquisition workforce in securing technical data rights;
* contract language to include a priced option for the delivery of
technical data and rights for use of data, which would be negotiated
and included as part of the system development and demonstration
solicitation; and:
* an independent logistics assessment process, to provide an objective
review of the acquisition program office's sustainment support plans
before major milestone decisions.
In May 2006, the Secretary of the Air Force directed that the
acquisition of technical data and associated rights be addressed
specifically in all acquisition strategy plans, reviews, and associated
planning documents for major weapon system programs and subsequent
source selections. The Secretary stated these actions are needed to
address challenges in meeting legislative requirements to maintain a
core logistics capability and to limit the percentage of depot
maintenance funds expended for contractor performance. The competitive
source selection process, according to the Secretary, provides the best
opportunity to address technical data requirements while at the same
time brokering the best deal for the government in regard to future
weapon systems sustainment.
Conclusions:
Under current DOD acquisition policies, the military services lack
assurance that they will have the technical data rights needed to
sustain weapon systems throughout their life cycle. We have previously
made recommendations that DOD enhance its policies regarding technical
data. DOD has concurred with these recommendations but has not
implemented them. In fact, DOD has de-emphasized the acquisition of
technical data rights as part of the department's acquisition reforms
and performance-based strategies. Our current work, however, shows that
the services face limitations in their sustainment plans for some
fielded weapon systems due to a lack of needed technical data rights.
Furthermore, program managers face numerous challenges in making
decisions on technical data rights--decisions that have long-term
implications for the life-cycle sustainment of weapon systems. Army and
Air Force logistics officials have recognized weaknesses in their
approaches to assessing and securing technical data rights, and each
service has begun to address these weaknesses by developing more
structured approaches. However, current DOD acquisition policies do not
facilitate these efforts. Unless DOD assesses and secures its rights
for the use of technical data early in the weapon system acquisition
process when it has the greatest leverage to negotiate, DOD may face
later challenges in developing sustainment plans or changing these
plans as necessary over the life cycle of its weapon systems. Delaying
action in acquiring technical data rights can make these data cost-
prohibitive or difficult to obtain later in the weapon system life
cycle, and can impede DOD's ability to comply with legislative
requirements, such as core capability requirements.
Recommendations for Executive Action:
To ensure that DOD can support sustainment plans for weapon systems
throughout their life cycle, we recommend that the Secretary of Defense
direct the Under Secretary of Defense (Acquisition, Technology, and
Logistics) to specifically require program managers to assess long-term
technical data needs and establish corresponding acquisition strategies
that provide for technical data rights needed to sustain weapon systems
over their life cycle. These assessments and corresponding acquisition
strategies should:
* be developed prior to issuance of the contract solicitation;
* address the merits of including a priced contract option for the
future delivery of technical data;
* address the potential for changes in the sustainment plan over the
weapon system's life cycle, which may include the development of
maintenance capability at public depots, the development of new sources
of supply to increase production, or the solicitation of competitive
offers for the acquisition of spare parts and components; and:
* apply to weapon systems that are to be supported by performance-based
logistics arrangements as well as to weapon systems that are to be
supported by other sustainment approaches.
We also recommend that the Secretary of Defense direct the Under
Secretary of Defense (Acquisition, Technology, and Logistics) to
incorporate these policy changes into DOD Directive 5000.1 and DOD
Instruction 5000.2 when they are next updated.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, DOD concurred with our report
and recommendations. DOD stated that the requirement for program
managers to assess long-term technical data needs and establish
corresponding strategies will be incorporated into DOD Instruction
5000.2 when it is next updated. If DOD updates its acquisition policy
as stated, we believe this action will meet the intent of our
recommendations. DOD's response is included in appendix II.
Scope and Methodology:
We conducted work at the Office of the Secretary of Defense, the Army,
the Navy, and the Air Force. The specific offices and commands we
visited are listed in the attached briefing slides contained in
appendix I.
To identify sustainment plans for fielded weapon systems that may have
been affected by the technical data rights available to the government,
we met with Army and Air Force acquisition and logistics officials
responsible for 11 weapon systems. We did not identify technical data
issues affecting sustainment for three of these systems and excluded
these systems from our subsequent review. We also excluded a weapon
system--the Buffalo mine-protected route clearing equipment--that was
acquired under the Army's rapid fielding initiative to meet emergency
needs. For the other seven weapon system programs--the C-17 aircraft, F-
22 aircraft, C-130J aircraft, Up-armored High-Mobility Multipurpose
Wheeled Vehicle, Stryker family of vehicles, Airborne Warning and
Control System aircraft, and M4 carbine--we obtained information on the
service's requirement for rights to use the data, their success in
obtaining data rights from the manufacturer, and the effect that a lack
of data rights had on system sustainment plans. We did not assess the
rationale for the decisions made on technical data rights during system
acquisition, nor did we determine the extent that program offices
complied with acquisition policies regarding technical data that
existed at the time of the acquisition. However, we collected comments
from acquisition and logistics personnel on the factors that complicate
program managers' decisions on long-term technical data rights for
weapon systems.
To examine the requirements for obtaining technical data rights under
current DOD acquisition policies, we analyzed current DOD acquisition
policies. Our review encompassed DOD-wide policies, including DOD
Directive 5000.1 and DOD Instruction 5000.2, as well as service-
specific policies. We discussed these policies with DOD and service
officials responsible for developing acquisition and logistics
policies, preparing system acquisition strategies, and implementing
sustainment plans to obtain their views on the importance of
considering technical data requirements during the acquisition process.
To determine DOD's plans to revise acquisition policy in response to a
previous recommendation we made on technical data, we reviewed DOD
correspondence and met with officials at the Office of the Under
Secretary of Defense (Acquisition, Technology, and Logistics).
We also met with Army and Air Force logistics officials to obtain
information on their efforts to assess acquisition policies and make
appropriate changes that would provide a structured process for
assessing and securing government rights to technical data early in
weapon system acquisition. We interviewed Army officials leading the
Army Material Command's Product Data Engineering Working Group and Air
Force officials addressing acquisition and logistics policies as part
of the Air Force Material Command's Product Support Campaign. We also
reviewed available documentation on the objectives and potential
outcomes of these initiatives.
We are sending copies of this report to the Secretary of Defense and to
the Secretaries of the military services. Copies of this report will be
made available to others upon request. In addition, the report will be
available at no charge on our Web site at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-5140 or solisw@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix III.
Signed by:
William M. Solis:
Director, Defense Capabilities and Management:
[End of section]
Appendix I: GAO's Preliminary Observations on the Department of
Defense's Acquisition of Technical Data to Support Weapons Systems:
Preliminary Observations on DOD's Acquisition of Technical Data to
Support Weapons Systems:
Briefing for the House Committee on Armed Services:
February 27, 2006:
Introduction:
The House Committee on Armed Services asked whether DOD policies limit
the services from purchasing technical data when acquiring new weapons
systems, and thereby increase the systems' life-cycle sustainment costs
and delay the repair of mission-essential items.
The Committee requested in H. R. 109-89 that GAO review the services'
technical data policies and practices affecting life-cycle costs and
availability of weapons systems.
GAO previously examined this issue in a report on performance-based
logistics (GAO-04-715, August 2004) and recommended policy changes for
DOD. Specifically, DOD should:
"consider requiring program offices, during weapon system acquisition,
to develop acquisition strategies that provide for a future delivery of
sufficient technical data to enable the program office to select an
alternative source-public or private-or to offer the work out for
competition if the performance-based arrangement fails or becomes
prohibitively expensive."
Objectives:
GAO will analyze and report on the following:
To what extent DOD policies limit the services from purchasing
technical data when acquiring new weapons systems;
The status of DOD's plans to revise acquisition policy in response to
the previous GAO recommendation on technical data;
The costs for obtaining access in order to view, modify, or distribute
technical data relating to the sustainment of procured systems; and:
The amount of time required to reach back to the system manufacturer
for technical data and what impact, if any, that delay has on repairing
or modifying fielded systems.
Synopsis of Observations:
Under DOD policy, program managers are not limited from obtaining tech
data rights during acquisition-but neither are they required to do so.
DOD has been slow in responding to our recommendation in GAO-04-715 but
has revised discretionary guidance that addresses tech data rights.
Available budget figures indicate limited cost growth for technical
data supporting fielded weapons systems.
Although information on technical data issues affecting field
maintenance is limited, our review showed maintenance units in
Southwest Asia did not experience systemic problems in obtaining tech
data. Army readiness data we reviewed did not indicate low equipment
readiness rates due to maintenance.
Scope and Methodology:
*OSD USD/ATL, Logistics and Materiel Readiness:
*Army Headquarters:
* Army Materiel Command (AMC), Fort Belvoir, Va.
* Tank-Automotive and Armaments Command (TACOM), Warren, Michigan, and:
Rock Island, III.
* U.S. Army Forces Command (FORSCOM), Fort McPherson, Ga.
* 1st Cavalry Division, Fort Hood, Texas:
Navy Headquarters:
* Naval Aviation Systems Command (NAVAIR), Patuxent River, Md.
* Naval Sea Systems Command (NAVSEA), Washington, D.C.
Air Force Headquarters:
* Air Force Materiel Command (AFMC), Wright-Patterson Air Force Base,
Ohio
* Aeronautical Systems Center (ASC), Wright-Patterson Air Force Base,
Ohio:
To determine the status of DOD's efforts to implement the
recommendation of our prior report, we analyzed DOD and service
acquisition policy and guidance, interviewed DOD and service officials,
and collected DOD correspondence addressing our recommendation.
To determine costs for obtaining access to contractor technical data,
we collected and analyzed operations and maintenance budget data from
the services. Our review focused on costs associated with sustaining
fielded systems.
To determine the impact of maintenance delays that might be caused by
the need to obtain technical data from the manufacturer, we collected
and analyzed non-mission capable reports on equipment managed by the US
Army Tank-Automotive and Armaments Command. We also contacted logistics
assistance representatives to collect information on experiences with
technical data in the field.
We also collected acquisition and logistic support information on 7
Army systems-Abrams, Bradley, HMMWV, M-88, Stryker, mine clearing
equipment, and vehicle armor kits; and 4 Air Force systems-C-17, C-1
30J, F-117, and the F22.
Background:
What Are Technical Data?
Technical data are recorded information of a scientific or technical
nature, regardless of the form or method of the recording. Typically,
technical data refer to:
Technical data packages: All applicable drawings, associated lists,
specifications, standards, performance requirements, quality assurance
provisions, and packaging details necessary to support an acquisition
strategy and ensure the adequacy of item performance.
Technical manuals: Publications that contain instructions for the
installation, operation, maintenance, training, and support of weapons
systems. A maintenance technical manual normally includes maintenance
procedures, parts lists or parts breakdown, and related technical
information or processes.
Why Are Technical Data Important?
The private sector and the government often have important competing
interests in technical data rights.
A company's interest in protecting its intellectual property (IP) from
uncompensated exploitation is of paramount importance-such that they
often resist including the contract clauses providing tech data rights
to government.
The government needs to have adequate rights to support its weapons
systems, including developing repair and maintenance procedures,
selecting alternate repair sources, and procuring spare parts
competitively.
When Are Technical Data Rights Acquired, And How Are These Data
Managed?
Provision for acquiring weapons systems tech data rights, access, and
delivery should be made early in acquisition.
* Tech data rights decisions made during acquisition will affect
government's ability to support weapons systems throughout increasingly
longer life cycles-up to approximately 40 years.
* Delaying action in acquiring technical data rights can make them cost
prohibitive or difficult to obtain.
Technical data are jointly managed and may be stored at either the
government's or contractor's repository.
To what extent do DOD policies limit the services from purchasing
technical data when acquiring new weapons systems?
Under DOD policy, program managers are not limited from obtaining
technical data rights during acquisition-but neither are they required
to do so.
DOD Directive 5000.1 and Instruction 5000.2 provide DOD's overall
acquisition policy. The Defense acquisition guidebook and product
support guide offer additional discretionary guidance.
* 5000.1 "The Defense Acquisition System" -Designates the program
managers as the persons with responsibility and authority for
accomplishing acquisition program objectives for development,
production, and sustainment to meet the users' operational needs.
* 5000.2 "Operation of the Defense Acquisition System" -Instructs
program managers to ensure development of a flexible strategy to
sustain a program so that the strategy may evolve throughout the
weapons system life cycle.
* Discretionary guidebooks-Guide program managers to determine minimum
data needs to support sustainment strategy over life cycle of system.
DOD policy does not require program managers to document their strategy
for ensuring long-term access to tech data over the life cycle of a
weapon system.
Services have adopted different policies regarding technical data.
Army's acquisition policy (AR 70-1 and AR 700-127):
* Requires program manager to develop logistics support strategy,
including description of how tech data rights or long-term access to
tech data is to be obtained.
Navy's acquisition policy (SECNAV Instructions 4105.1 A and 5000.2c,
and NAVSO P-3692):
* An independent team is required to assess the adequacy of the program
manager's logistics support plan, including technical data. However,
there is no requirement compelling a system program manager to address
how tech data rights or long-term access to technical data is to be
obtained.
Air Force's acquisition policy (AF policy directives 63-1 and 20-5, and
AF Instructions 63-107 and 63-101):
* Requires program manager to address tech data in a product support
strategy.
The services' continuing efforts to require program managers to develop
tech data requirements early in acquisition process highlight a gap in
DOD policy:
Army:
* Product Data and Engineering Working Group
* TACOM's draft technical data rights study:
Navy:
* Planned revisions to 5000.2c:
* Independent logistics assessment handbook
* Air Force:
Product Support Campaign:
* Developing an independent logistics assessment process:
Service officials responsible for these efforts believe their work
would be facilitated by a DOD policy providing clear direction to the
program managers to develop a tech data strategy early in the
acquisition process.
In the absence of DOD acquisition policy requiring a technical data
strategy, program managers may not adequately consider the need to
acquire technical data rights because:
Program managers are under financial pressure to use available funds to
buy more inventory or capability rather than technical data.
DOD has deemphasized the requirement of acquiring rights to tech data:
* The "use of performance-based acquisition strategies . may obviate
the need for data and/or rights." USD (AT&L) memo on the reform of
intellectual property rights of contractors, Jan. 5, 2001.
"Finally, program officials should seek to establish performance-based
requirements that enhance long-term competitive interests, in lieu of
acquiring detailed design data and data rights." DOD guide to
negotiating intellectual property rights, Oct. 15, 2001.
DOD acquisition policy (revised May 2003) eliminated requirement for
program managers to ensure long-term access to technical data and
required them to develop performance-based logistics strategies.
What is the status of DOD's plans to revise acquisition policy in
response to the previous GAO recommendation on technical data?
DOD has been slow in responding to our recommendation to revise its
technical data acquisition policy.
In August 2004, GAO compared the practices of DOD with those of the
private sector for acquiring new systems. We found that the private
sector typically acquires the technical data for new systems, while DOD
program managers often do not acquire the technical data, opting
instead to buy larger quantities or greater system capability with
available funding.
* GAO recommended that DOD consider requiring program offices to
develop strategies providing for future delivery of technical data to
allow selection of alternate sources or offering work for competition.
* DOD concurred, stating it would update its DOD 5000 regulations to
include this requirement. This change was to be accomplished by the
Defense Acquisition Policy Working Group (DAPWG).
* DOD has been delayed in updating its 5000 regulations due to other
DAPWG priorities (i.e., the Quadrennial Defense Review). DOD recently
reaffirmed its intent to implement our recommendation when DAPWG
returns to updating the 5000 regulations in May 2006.
What are the costs for obtaining access in order to view, modify, or
distribute technical data relating to the sustainment of procured
systems?
There is limited visibility into technical data funding; available
operation and maintenance budget figures for fielded systems indicate
limited cost growth. Most changes that we analyzed for FY06 were due to
a shift from procurement to sustainment funding as systems are fielded.
Budget Requirements for Technical Data:
($ in millions);
Army;
FY04: $11.9;
FY05: $19.1;
FY06: $33.8.
NAVAIR**;
FY04: 10.3;
FY05: 14.0;
FY06: 11.7.
NAVSEA;
FY04: [Empty]*
FY05: [Empty]*
FY06: [Empty]*.
Air Force;
FY04: 63.1;
FY05: 57.7;
FY06: 62.4.
Total;
FY04: $85.2;
FY05: $90.8;
Fy06: $107.9.
* data not available:
** Amounts for FY04 and FY05 are actuals:
Source: Service operations and maintenance budget data.
[End of table]
Tech data budget requirements are often embedded in larger budget
accounts. For example, the Army's sustainment systems tech support
(SSTS) program supports various engineering sustainment requirements,
including tech data. The Army reported a $116 million increase in its
fiscal year 2006 SSTS budget.
* Based on an analysis of the SSTS account by Army officials, only
about $15 million of increase is due to increased technical data
requirements, which resulted primarily from cessation of Abrams Tank
and Bradley Fighting Vehicle upgrade programs.
* Remaining $101 million of the increase is due to programs not
involving technical data requirements, such as obsolescence management
of replacement parts and digitization of maintenance technical manuals.
Even within individual contracts, technical data costs may not be
apparent. According to service contracting officials, some weapon
systems support contracts do not separately price technical data.
Examples are the Air Force's C-1 30J and F117.
Top five fiscal year 2006 technical data cost drivers account for
approximately 60 percent of the Army's $33.8 million requirement.
Top 5 Technical Data Cost Drivers in FY06 for Army Systems ($ in
million):
Army System: Abrams Tank;
Total requirements: FY04: $1.37;
Total requirements: FY05: $2.75;
Total requirements: FY06: $6.76.
Army System: Bradley Fighting Vehicle;
Total requirements: FY04: $0.74;
Total requirements: FY05: $0.80;
Total requirements: FY06: $6.13.
Army System: Tow and Patriot Missiles;
Total requirements: FY04: $2.45;
Total requirements: FY05: $2.41;
Total requirements: FY06: $2.67.
Army System: Hellfire Missile;
Total requirements: FY04: [Empty];
Total requirements: FY05: [Empty];
Total requirements: FY06: $2.48.
Army System: M270 and M270A Launcher;
Total requirements: FY04: [Empty];
Total requirements: FY05: $0.91;
Total requirements: FY06: $2.13.
Source: Army operation and maintenance budget data.
[End of table]
Top five fiscal year 2006 technical data cost drivers account for
approximately 67 percent of NAVAIR's $11.7 million requirement.
Top 5 Technical Data Cost Drivers in FY06 for NAVAIR Systems ($ in
million):
NAVAIR system: AV-8;
Total requirements: FY04*: $1.45;
Total Requirements: FY05*: $2.48;
Total requirements: FY06**: $2.39.
NAVAIR system: F-18 A/D;
Total requirements: FY04*: $0.79;
Total Requirements: FY05*: $2.09;
Total requirements: FY06**: $2.22.
NAVAIR system: H-1;
Total requirements: FY04*: $0.55;
Total Requirements: FY05*: $1.14;
Total requirements: FY06**: $1.56.
NAVAIR system: H-60;
Total requirements: FY04*: $0.75;
Total Requirements: FY05*: $0.83;
Total requirements: FY06**: $0.86.
NAVAIR system: P-3;
Total requirements: FY04*: $0.43;
Total Requirements: FY05*: $1.23;
Total requirements: FY06**: $0.85.
* - Cost data:
** - Budget data:
Source: Navy operation and maintenance budget and cost data.
[End of table]
Top five fiscal year 2006 technical data cost drivers account for
approximately 46 percent of the Air Force's $62.4 million requirement.
Top 5 Technical Data Cost Drivers in FY06 for Air Force Systems ($ in
million):
Air Force system: F-16;
Total requirements: FY04: 9.77;
Total requirements: FY05: 8.50;
Total requirements: FY06: 8.81.
Air Force system: F-15;
Total requirements: FY04: 5.10;
Total requirements: FY05: 5.27;
Total requirements: FY06: 5.53.
Air Force system: C-130;
Total requirements: FY04: 5.50;
Total requirements: FY05: 5.03;
Total requirements: FY06: 4.80.
Air Force system: Combat Rescue and Recovery Aircraft;
Total requirements: FY04: 2.15;
Total requirements: FY05: 2.15;
Total requirements: FY06: 5.10.
Air Force system: B-1b;
Total requirements: FY04: 5.61;
Total requirements: FY05: 4.47;
Total requirements: FY06: 4.63.
Source: Air Force operation and maintenance budget data.
How much time is needed to return to vendor for technical data, and
what impact do delays have on repairing or modifying fielded systems?
Although information on technical data issues affecting field
maintenance is limited, our review showed maintenance units in
Southwest Asia did not experience systemic problems in obtaining tech
data. Army readiness data we reviewed did not indicate low equipment
readiness rates due to maintenance.
Logistics assistance representatives' reports indicated instances where
field maintainers initially lacked technical data (e.g., repair
manuals), but these cases were infrequent and subsequently resolved.
Some new equipment items that were rapidly fielded into service lacked
accompanying technical data.
Readiness rates for equipment in Southwest Asia theaters of operations
have not fallen below acceptable levels, except in four minor
instances, according to recent Army data.
Conclusions:
While DOD has issued discretionary guidance that addresses technical
data rights, current DOD policy does not require program managers to
document their strategy for ensuring long-term access to tech data. We
continue to believe that our prior recommendation in GAO-04-715 for DOD
to add a technical data requirement to its acquisition policy is valid.
In the absence of such policy, the government may find itself
unprepared to support its weapons systems over their lifecycle, to
include developing repair and maintenance procedures, selecting
alternate repair sources should existing support fail or become too
expensive, and procuring spare parts competitively. Further, while the
services have initiatives under way to address these shortfalls, the
success of their efforts would be enhanced by clear DOD policy on
developing tech data requirements.
[End of section]
Appendix II: Comments from the Department of Defense:
Deputy Under Secretary Of Defense For Logistics And Materiel Readiness
3500 Defense Pentagon:
Washington, DC 20301-3500:
Jun 29 2000:
Mr. William M. Solis:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Solis:
This is the Department of Defense (DoD) response to the GAO draft
report, "Weapons Acquisition: DoD Should Strengthen Policies for
Assessing Technical Data Needs to Support Weapon Systems," dated June
8, 2006, (GAO Code 350828/GAO-06-839).
The Department concurs with the report and the recommendations. As the
Department has previously agreed, guidance on technical data rights
will be incorporated into DoD Instruction 5000.2 when it is next
updated. Detailed comments on the GAO recommendations are provided in
the attachment. The Department appreciates the opportunity to comment
on the draft report.
Sincerely,
Signed by:
Jack Bell:
Attachment:
As stated:
GAO Draft Report - Dated June 8, 2006 GAO Code 350828/GAO-06-839:
"Weapons Acquisition: DoD Should Strengthen Policies for Assessing
Technical Data Needs to Support Weapon Systems"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommended that the Secretary of Defense,
direct the Under Secretary of Defense (Acquisition, Technology and
Logistics) to specifically require program managers to assess long-term
technical data needs and establish corresponding acquisition strategies
that provide for technical data rights needed to sustain weapon systems
over their life cycle. These assessments and corresponding acquisition
strategies should:
* be developed prior to issuance of the contract solicitation;
* address the merits of including a priced contract option for the
future delivery of technical data;
* address the potential for changes in the sustainment plan over the
weapon system's life cycle, which may include the development of
maintenance capability at public depots, the development of new sources
of supply to increase production, or the solicitation of competitive
offers for the acquisition of spare parts and components; and:
* apply to weapon systems that are to be supported by performance-based
logistics arrangements as well as to weapons systems that are to be
supported by other sustainment approaches. (p. 15/GAO Draft Report):
DOD Response: Concur. The requirement for program managers to assess
long-term technical data needs and establish corresponding acquisition
strategies will be incorporated into DoD Instruction 5000.2 when it is
next updated.
Recommendation 2: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense (Acquisition, Technology and
Logistics) to incorporate these policy changes into DoD Directive
5000.1 and DoD Instruction 5000.2 when they are next updated (p. 15/GAO
Draft Report).
DOD Response: Concur. When next updated, DoD Instruction 5000.2 will
incorporate the requirement for program managers to assess long-term
technical data needs and establish corresponding acquisition
strategies.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
William M. Solis, (202) 512-5140 or solisw@gao.gov:
Acknowledgments:
In addition to the contact named above, Thomas Gosling, Assistant
Director; Larry Junek; Andrew Marek; John Strong; Cheryl Weissman; and
John Wren were major contributors to this report.
(350828):
FOOTNOTES
[1] Section 252.227-7013 of the Defense Federal Acquisition Regulation
Supplement defines technical data as recorded information, regardless
of the form or method of the recording, of scientific or technical
nature, including computer software documentation. Technical data for
weapon systems include drawings, specifications, standards, and other
details necessary to ensure the adequacy of item performance, as well
as manuals that contain instructions for installation, operation,
maintenance, and other actions needed to support weapon systems.
[2] GAO, Defense Management: Opportunities to Enhance the
Implementation of Performance-Based Logistics, GAO-04-715 (Washington,
D.C.: Aug. 16, 2004).
[3] H.R. Rep. No. 109-89 at 302.
[4] DOD Directive 5000.1, The Defense Acquisition System, May 12, 2003.
[5] Federal Acquisition Regulation, Part 12, Sec. 12.211, states,
"Except as provided by agency-specific statutes, the Government shall
acquire only the technical data and the rights in that data customarily
provided to the public with a commercial item or process."
[6] Department of Defense Office of the Inspector General, Acquisition:
Contracting for and Performance of the C-130J Aircraft, D-2004-102
(Arlington, Va.: July 23, 2004).
[7] U.S. Army Audit Agency, Stryker Contract Logistics Support Costs, A-
2006-0028-ALM (Alexandria, Va.: Dec. 6, 2005).
[8] GAO, Contract Management: The Air Force Should Improve How It
Purchases AWACS Spare Parts, GAO-05-169 (Washington, D.C.: Feb. 15,
2005).
[9] Defense Federal Acquisition Regulations Supplement, Section
227.7103-5, Government Rights.
[10] DOD Directive 5000.1.
[11] DOD Instruction 5000.2, Operation of the Defense Acquisition
System, May 12, 2003.
[12] Under Secretary of Defense, Acquisition and Technology; Memorandum
for--Service Acquisition Executives, General Counsel of the Department
of Defense, Deputy Under Secretary of Defense (Acquisition Reform) and
Director, Defense Procurement; Reform of Intellectual Property Rights
of Contractors (Jan. 5, 2001).
[13] Office of the Under Secretary of Defense for Acquisition,
Technology, and Logistics, Intellectual Property: Navigating Through
Commercial Waters (Oct. 15, 2001).
[14] Prior to this May 2003 revision, the program manager, as part of
the acquisition strategy, was required to develop and document a
support strategy for life-cycle sustainment that addressed all
applicable support requirements, to include long-term access to data to
support competitive sourcing decisions. See Office of the Secretary of
Defense, Mandatory Procedures for Major Defense Acquisition Programs
(MDAPS) and Major Automated Information System (MAIS) Acquisition
Programs, DOD 5000.2-R (Apr. 5, 2002).
[15] GAO, Defense Logistics: Opportunities to Improve the Army's and
Navy's Decision-making Process for Weapon System Support, GAO-02-306
(Washington, D.C.: Feb. 28, 2002).
[16] GAO-04-715.
[17] DOD's acquisition process is structured into discrete phases
separated by major decision points (called milestones or decision
reviews), with a number of key activities to provide the basis for
comprehensive management and informed decision making. The number of
phases and decision points are tailored to provide a management
structure for reviewing and approving acquisition programs as they move
from concept refinement to system development and demonstration. In the
acquisition process, a contract solicitation is ultimately used to
communicate the government's requirements.
[18] As discussed earlier, DOD has not incorporated this recommendation
into its acquisition policy. See GAO-02-306.
[19] To focus on Army activities related to the management of
engineering and technical data, product data, and the reduction of
total ownership costs for weapon systems, the Assistant Secretary of
Army for Acquisitions, Logistics and Technology in April 2004 delegated
authority and responsibilities for managing these activities to the
Commander, U.S. Army Materiel Command. In March 2005, the Command's
Deputy Chief of Staff for Operations chartered the product data and
engineering working group, which consists of representatives from Army
headquarters, major commands, program executive officers, and Army
Materiel Command subordinate commands.
[20] The Air Force product support campaign is one of three efforts
that constitute the Air Force Materiel Command's sustainment
transformation initiative. The other two efforts are depot maintenance
transformation and purchasing and supply chain management. The product
support campaign is a partnership among the Air Force Materiel Command,
Headquarters Air Force Acquisition Integration, and Logistics,
Installations and Mission Support to establish six process focus teams
to address information workflow, workforce development, supplier
management, policy, processes, and expectation management.
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