Weapons Acquisition: Low-Rate Initial Production Used to Buy Weapon Systems Prematurely

Highlights

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) use of low-rate initial production (LRIP) in its systems acquisition programs, focusing on whether: (1) DOD LRIP practices result in the production of adequate systems; and (2) the legislation underlying LRIP policies is adequate.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
Congress should legislatively mandate: (1) that certain OT&E requirements be met before LRIP may start; and (2) specific limits on the number of units allowed to be produced during LRIP. Specifically, Congress may wish to require that all defense acquisition programs (major and nonmajor) conduct enough realistic testing on the entire system or key subsystems to ensure that its key performance parameters are met before LRIP is permitted to start.	Closed – Implemented	Congress has instituted a limit on the number of units to be produced during LRIP. If the LRIP quantity exceeds 10 percent of the total program quantity, the Secretary of Defense is required to explain the reasons for the quantity. However, Congress has not mandated that programs conduct operational testing before starting LRIP.
Congress may wish to: (1) specify a percentage (10 percent, for example) of a system's total procurement beyond which a program may not proceed during LRIP; and (2) amend 10 U.S.C. 2400, by deleting subsection (b)(3), to preclude the use of LRIP authority to ramp-up the production rate prior to the successful completion of OT&E.	Closed – Not Implemented	Congress took no action on the recommendation.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	The Secretary of Defense should revise DOD acquisition policies to require that, before entry into LRIP, programs (with the exception of ships, satellites, and those other programs that involve inherent fabrication complexity, small procurement quantities, high unit costs, and long unit production periods) plan, buy prototypes for, and conduct enough realistic testing for the services' independent testing agency or the Director, OT&E, to be able to certify to the decision authority that the: (1) system's developmental testing is essentially complete and the basic results of that testing have been validated in an operational environment; (2) system has clearly shown that it can meet the key parameters among its minimum acceptable performance requirements; (3) system has clearly demonstrated the potential to fully meet all of its minimum acceptable requirements for performance and suitability without major or costly design changes; and (4) system should be able to readily complete its remaining OT&E in time to support the planned full-rate production decision.	Closed – Implemented Although DOD stated that it would consider adopting portions of the recommendation when it revised its acquisition policies and procedures, the revision promulgated in early 1996 did not contain any requirement or suggestion to conduct some operational testing before starting low-rate initial production.
Department of Defense	The Secretary of Defense should revise DOD acquisition policies to require that those programs excluded from the requirement to test prototypes instead test all key subsystems in an operational environment before entry into LRIP.	Closed – Not Implemented DOD rejected this recommendation and stated that it was not reasonable or cost-effective to require that all key subsystems be tested in an operational environment before LRIP.
Department of Defense	The Secretary of Defense should revise DOD acquisition policies to adopt the recommendations made by the DOD Inspector General regarding controls over the start and continuation of LRIP such as: (1) providing guidance on the specific minimum required program accomplishments for entry into and continuation of LRIP; and (2) requiring that program-specific exit criteria be established for entry into and continuation of LRIP.	Closed – Implemented DOD's revised acquisition policies and procedures address, in a general way, the need for exit criteria to be established for entry into LRIP. However, no guidance was provided regarding minimum program accomplishments before starting LRIP. Requirements or guidelines for continuing LRIP were not addressed at all.
Department of Defense	The Secretary of Defense should work with the service secretaries to ensure that these policies are implemented for the acquisition of both major and nonmajor systems.	Closed – Implemented DOD's revised policies and procedures do not address the intent of the recommendations for either major or nonmajor systems.

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