Defense Acquisitions: Review of Private Industry and Department of Defense Open Systems Experiences

What GAO Found

GAO identified four private sector companies across various industries whose officials discussed examples of how they use an open systems approach in product development—an approach that includes a modular design and open interfaces or connection points based on open standards—to reduce product development time and life-cycle costs, increase competition and innovation, and enable interoperability between systems from different vendors, among other things. For example, major producers in the oil and gas industry use open systems to monitor drilling activities, helping ensure that disparate systems are interoperable, and thereby helping avoid costly drilling mistakes. Iridium, a satellite voice and data services provider, attracted new customers by transitioning from its initial proprietary service offering to one that allows partner companies to access Iridium’s satellite communications network using commercially available modular components with open interfaces. This has promoted innovation and new market opportunities, and enabled Iridium to significantly increase its revenue from satellite communication services. Finally, DreamHammer reduced development costs and time by leveraging available software code for its open interfaces for unmanned vehicle control systems. To achieve successes with open systems, officials GAO interviewed—regardless of the industry sector they represent—highlighted a number of common enablers and practices. These include broad industry support; coordination with independent standards organizations; a long-term commitment to develop, implement, test, and refine standards; technical expertise to identify parts of a system that should be designed with open standards and interfaces; and knowledge sharing across all segments of an enterprise to build support for open systems.

In recent years, the Department of Defense (DOD) has emphasized the benefits of using an open systems approach in weapon acquisition programs, particularly through its 2010 and 2012 Better Buying Power Initiatives. While each of the military services has policies for using open systems in weapon acquisition programs, the Navy leads the way having institutionalized such an approach on several programs from early development. Examples include three unmanned aircraft systems, the P-8 Poseidon maritime patrol aircraft, and the most recent effort to develop a replacement Presidential Helicopter. The Air Force and the Army are beginning to embrace open systems acquisitions as well, albeit in a more ad-hoc fashion, with some programs such as the Air Force's KC-46 Tanker showing promise for future life-cycle cost savings, according to program officials.

Despite the positive developments we identified in this review and our July 2013 report, DOD continues to face a number of challenges to consistently and effectively implement an open systems approach to weapon acquisition. The most difficult challenge is overcoming a general cultural preference within the services for acquiring proprietary systems that puts life-cycle decisions in the hands of the contractors that developed and produced those systems. Those contractors, therefore, benefit from maintaining the status quo for long-term weapon system sustainment. Although new open systems guidance, tools, and training are being developed, DOD is not tracking the extent to which its acquisition program offices are implementing an open systems approach or if the services have the expertise to implement such an approach.

In July 2013, GAO made four recommendations to improve DOD’s implementation of an open systems approach for its weapon acquisition programs, as well as its visibility of open systems implementation and program office expertise, including (1) the Air Force and Army implement their open systems policies, (2) DOD develop metrics to track open systems implementation,  (3) the services report on these metrics, and (4) the services assess and address any gaps in expertise. DOD partially concurred with these recommendations but has not taken steps to implement them. GAO continues to believe the recommendations are applicable.

Why GAO Did This Study

House Committee on Armed Services Report No. 113-102, which accompanied a House bill on the National Defense Authorization Act for Fiscal Year 2014, mandated GAO to provide a briefing on private industry practices for implementing an open systems approach to product development. This briefing addresses (1) industry practices and experiences for implementing an open systems approach during product development, (2) DOD initiatives and experiences for implementing an open systems approach on weapon acquisition programs, and (3) challenges DOD faces in implementing identified open systems practices on weapon system acquisition programs.

To conduct this work, GAO interviewed officials from four private companies (BP, Chevron, DreamHammer, and Iridium), standards organizations and academia, and conducted literature reviews. The companies were selected based on their recent implementation of an open systems approach on a product. GAO reviewed relevant DOD policies, guidance, and handbooks, and interviewed officials from various DOD and military service offices. GAO also discussed challenges private companies and some military programs have overcome to implement an open systems approach.

For more information, contact Michael J. Sullivan at (202) 512-4841 or sullivanm@gao.gov.