Climate Resilience: Actions Needed to Ensure DOD Considers Climate Risks to Contractors as Part of Acquisition, Supply, and Risk Assessment
Fast Facts
The Department of Defense relies on contracted goods and services to carry out missions. Since 2010, DOD has identified climate change as a threat to its operations and installations.
Climate effects can damage infrastructure—for example, flooding can damage roads or electrical infrastructure—in turn delaying critical goods like food or services like information technology. However, DOD hasn’t routinely assessed how climate change or extreme weather risks could affect its contractors and its access to goods and services.
We recommended, among other things, incorporating climate resilience into military acquisition and supply guidance.
Road washed out from flooding at Fort Irwin
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Highlights
What GAO Found
The Department of Defense (DOD) has not routinely assessed climate-related risks faced by its contractors as part of its acquisition and supply processes, through which DOD obtains contracted goods and services. DOD's acquisition process includes long-term planning activities such as life-cycle sustainment planning. Its supply chain process includes steps to identify and assess potential disruptions, such as severe storms affecting transportation or energy systems, in order to mitigate risk. However, these processes in general do not systematically identify and consider climate-related risks to materiel acquisition and supply or the acquisition of weapon systems, according to Office of the Secretary of Defense (OSD) and military department officials. DOD's climate change adaptation directive indicates that OSD and the military departments should include climate considerations in acquisition and supply and integrate those considerations into relevant policy and guidance.
However, GAO's review of DOD and military department guidance on acquisition and supply found that the guidance did not implement DOD's climate change directive by including consideration of climate change or extreme weather. Until DOD and the military departments include these considerations in their guidance on acquisition and supply chain processes, they risk continuing to develop acquisition strategies and managing supply chains without building climate resilience into these processes and potentially jeopardizing their missions.
DOD guidance requires consideration of climate-related risks as part of the mission assurance process, when appropriate. However, GAO found that the department has not assessed risks—including those associated with climate change or extreme weather—to commercially owned facilities, which can support DOD installations as well as weapon systems, as part of this process. Assessing risks to commercial facilities has been a longstanding challenge for DOD, with the department noting in 2012 that it had paid inadequate attention to challenges outside of DOD-owned facilities and citing a limited understanding of supply chain risks as a pervasive problem. DOD's mission assurance guidance includes minimum requirements for assessments of certain non-DOD-owned facilities, such as completion of an all-hazards threat assessment. However, DOD officials stated that they had not conducted such assessments.
The officials noted that DOD is limited in its ability to conduct such assessments, as it does not have the same access to commercial facilities as it does to its own facilities. While DOD officials stated that they are exploring alternative ways of assessing risks to commercial facilities, they noted that these efforts are in the early stages. Without determining what approaches may be feasible for assessing risks to commercial facilities as part of the mission assurance process and issuing or updating guidance accordingly, DOD may not fully evaluate the risks to critical commercial facilities as part of the mission assurance process, leaving gaps in its knowledge of potential risks—to include climate and weather-related risks—to its ability to fulfill key missions dependent on such facilities.
Why GAO Did This Study
Since 2010, DOD has identified climate change as a threat to its operations and installations. The department relies on contracted goods and services for its mission and installations. Climate change is projected to have broad effects that could affect DOD's supply chains, and any associated risks to contractors can have an impact on DOD. One way DOD assesses risk to its missions is through mission assurance, which is a process to protect or ensure the function of capabilities and assets critical to its missions.
GAO was asked to review potential threats to national security from the effects of climate change on defense contractors. GAO examined the extent to which DOD assesses the potential effects on its operations from climate change and extreme weather risks faced by its contractors through the department's (1) acquisition and supply processes, and (2) mission assurance process. GAO reviewed DOD acquisition, supply, and mission assurance documents and interviewed relevant DOD officials and contractor representatives.
Recommendations
GAO is making six recommendations, including that DOD incorporate climate adaptation into its acquisition and supply guidance and issue or update guidance on mission assurance-related assessments for commercial facilities. DOD concurred with three recommendations and partially concurred with three. GAO continues to believe that DOD should fully implement its recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment implements DOD Directive 4715.21 on climate change adaptation and resilience by updating, as appropriate, relevant DOD guidance related to acquisition and supply processes to incorporate the directive's provisions pertaining to those processes. In doing so, the Under Secretary of Defense for Acquisition and Sustainment should consider providing guidance as to how departmental officials may leverage already existing information regarding private companies. (Recommendation 1) |
As of April 2023, DOD had completed its review of relevant guidance related to supply processes to incorporate relevant provisions of DOD's Directive on Climate Change Adaptation and Resilience (DOD Directive 4715.21). Specifically, DOD updated its instruction and manual on Supply Chain Materiel Management (DOD Manual 4140.01 and DOD Instruction 4140.01) and its instruction on Diminishing Manufacturing Sources and Material Shortages Management (DOD Instruction 4245.15) to reflect DOD Directive 4715.21. In addition, DOD is updating its Supply Chain Risk Management (SCRM)-related policies to require all DOD Components to account for climate change adaptation as part of its overall SCRM program. To date, DOD has updated DOD Manual 4140.01, which requires that all DOD Components integrate the risks climate change pose to logistics infrastructure, materiel acquisition and supply, key transportation modes and routes, and storage and stockpile activities into SCRM actions in accordance with DOD Directive 4715.21. DOD plans to update additional SCRM-related issuances with the same language and definition as they come up for renewal. In November 2022, the Assistant Secretary of Defense for Sustainment issued a memo outlining the incorporation of climate change into the department's SCRM policies. The department developed a SCRM Taxonomy that includes 124 different supply chain risks, with climate-related supply chain risk falling under the Environmental major risk category. The department was working to develop an overarching SCRM policy Instruction for the Department, with an estimated completion in fiscal year 2024. This guidance will codify the SCRM taxonomy and its use in policy. In addition, the DOD components were working to incorporate the taxonomy into their supply chain risk business processes. While DOD's efforts largely meet the intent of our recommendation related to supply and will be formalized with DOD's development of the SCRM Taxonomy, it does not fully address changes specific to the acquisition process. As of August 2024, DOD had not provided additional information in response to our request for clarification specific to the acquisition process or provided any additional updates on efforts to implement this recommendation. As such, we will continue to monitor the status of this recommendation.
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| Department of the Army | The Secretary of the Army should implement DOD Directive 4715.21 on climate change adaptation and resilience by updating, as appropriate, relevant Department of the Army guidance related to acquisition and supply processes to incorporate the directive's provisions pertaining to those processes. In doing so, the Secretary of the Army should consider providing guidance as to how departmental officials may leverage already existing information regarding private companies. (Recommendation 2) |
DOD concurred with this recommendation. In its response, the department noted that upon updates to DOD's climate adaptation directive and other applicable DOD or federal regulations, the Army would update its guidance related to acquisition and supply as appropriate. However, DOD noted that it does not plan to update its acquisition guidance in response to our recommendation that DOD do so. In January 2021, DOD officials stated that the Army would complete a review of its relevant guidance in March 2021, and if appropriate, update any relevant guidance by March 2022. As of August 2024, DOD had not provided GAO with any further updates on the status of this recommendation. We will continue to monitor Army actions to implement this recommendation.
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| Department of the Navy | The Secretary of the Navy should implement DOD Directive 4715.21 on climate change adaptation and resilience by updating, as appropriate, relevant Department of the Navy guidance related to acquisition and supply processes to incorporate the directive's provisions pertaining to those processes. In doing so, the Secretary of the Navy should consider providing guidance as to how departmental officials may leverage already existing information regarding private companies. (Recommendation 3) |
In April 2023, Department of the Navy officials noted that the Navy assessed climate-related requirements during the April 2022 revision of SECNAVINST 5000.2G, which implements DOD policy covering the DOD acquisition system and adaption acquisition framework. Officials noted that the Department of the Navy's acquisition policy assessment considered current climate-related legislative requirements covered in Public Law 116-260 Section 103, American Innovation and Manufacturing (AIM) Act, which implements policy necessary to support acquisition program planning and management of transitions to future non-hydrofluorocarbons alternatives when compliant and alternatives and replacements have been tested, certified, and approved for these applications. The assessment also considered applicable DOD directives and instructions for climate-related policy. In accordance with SECNAVINST 5000.2G, the updated guidance notes that the Department of the Navy acquisition programs will comply with all statutory requirements. In addition, Navy officials noted that three open Federal Acquisition Regulation (FAR) cases related to climate change and the acquisition process may impact existing DOD and Department of the Navy policy and regulations when implemented. Navy officials noted that once these rules become final, the Navy will comply with the new requirements and assess the need for agency-specific supplemental guidance. Specific to supply-related policies, Navy officials noted that they would implement DOD's supply chain risk management (SCRM) Taxonomy, which includes climate-related supply chain risks as a major risk category. Officials noted that additional implementing guidance likely would not be required. Once DOD completes its review and update of relevant DOD guidance related to acquisition and supply processes to incorporate provisions from DOD's climate change directive pertaining to those processes, we will revisit the status of this recommendation and update actions and progress accordingly. As of August 2024, DOD had not provided us with any additional updates on the status of efforts to implement this recommendation.
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| Department of the Air Force | The Secretary of the Air Force should implement DOD Directive 4715.21 on climate change adaptation and resilience by updating, as appropriate, relevant Department of the Air Force guidance related to acquisition and supply processes to incorporate the directive's provisions pertaining to those processes. In doing so, the Secretary of the Air Force should consider providing guidance as to how departmental officials may leverage already existing information regarding private companies. (Recommendation 4) |
DOD concurred with this recommendation. In its response, the department noted that the Air Force will work with the Office of the Under Secretary of Defense for Acquisition and Sustainment and the other military services to develop specific policies that address climate-related risks to DOD contractors. In January 2021, DOD officials stated that the timing to implement this recommendation remained to be determined because it was dependent on implementation of the GAO's first recommendation in this report, for DOD to update its acquisition and supply guidance to incorporate the provisions of DOD's directive on climate change adaptation. As of August 2024, DOD had not provided GAO with any further updates on the status of this recommendation. We will continue to monitor Air Force actions to implement this recommendation.
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| Department of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Policy, in coordination with the Under Secretary of Defense for Acquisition and Sustainment, the Secretaries of the military departments, and any other governmental and private-sector partners, as appropriate, determine what approaches may be feasible in conducting mission assurance related assessments of commercially owned facilities. (Recommendation 5) |
DOD concurred with this recommendation. In its response, the department noted that formal mission assurance assessments are limited in scope in order to provide additional rigor to protect DOD's most critical capabilities. However, the department stated that the Office of the Under Secretary of Defense for Policy would work with the Office of the Under Secretary of Defense for Acquisition and Sustainment's Defense Contract Management Agency to better understand DOD's commercial dependencies. In January 2021, DOD officials stated that they expect to complete implementation of this recommendation by September 1, 2021. However, as of August 2024 DOD had not provided GAO with any further updates on the status of this recommendation. We will continue to monitor DOD actions to implement this recommendation.
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| Department of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Policy, in coordination with the Under Secretary of Defense for Acquisition and Sustainment, the Secretaries of the military departments, and any other governmental and private-sector partners, as appropriate, issue new or update existing guidance, based upon the determination of what approaches may be feasible, to clarify the steps that DOD officials involved in the mission assurance process may take to apply the mission assurance framework to commercially owned facilities, as appropriate, to include consideration of risks related to climate change and extreme weather. (Recommendation 6) |
DOD partially concurred with this recommendation. In its response, the department noted that it concurs with the need to clarify steps that officials may take to apply the mission assurance framework to defense critical infrastructure and critical defense industrial base commercially owned facilities, to include consideration of risks related to climate change and extreme weather. However, the department further noted that it does not concur with doing this for all commercial facilities because conducting such assessments for all commercially owned facilities falls outside the capacity and authority of DOD to conduct mission assurance assessments. However, we had not recommended they conduct such assessments for all commercial facilities. In January 2021, DOD officials stated that they would complete implementation of this recommendation by March 1, 2023. They noted that progress would be dependent on the ability of various internal and external forums to schedule, consider, and approve recommendations; the time needed to update DOD guidance; and the implementation of legislative changes supporting liability protection. As of August 2024, DOD had not provided GAO with any further updates on the status of this recommendation. We will continue to monitor DOD actions to implement this recommendation.
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