GAO finds poor management puts Army program at risk

The Army's poor management of a program valued at as much as $200 billion could threaten its plan to transform itself into a flexible, more efficient fighting force capable of battling a wide range of enemies, GAO investigators concluded in a study to be released Tuesday.

The sprawling Future Combat Systems program and its complementary technologies also are at risk of more cost increases and schedule delays because the Army lacks a solid business plan to execute the biggest technology effort in its history, according to portions of the GAO report obtained by CongressDaily.

Nearly three years after the Defense Department gave the Army the green light to proceed with the development stage of the program, FCS still lacks firm requirements, mature technologies, a realistic cost estimate and sufficient funding, GAO concluded.

"FCS has all the markers for risks that would be difficult to accept for any single system," the GAO report said. "They are even more daunting in the case of FCS, not only because of their multiplicity, but because FCS represents a new concept of operations predicated on technological breakthroughs."

Senior GAO officials are expected to release their report today at a fiscal 2007 budget hearing the House Armed Services Tactical Air and Land Subcommittee has scheduled on Army and Marine Corps programs.

In its report, GAO acknowledged the Army has made several changes to improve its plan for FCS, which includes 18 manned and unmanned vehicles tied together by a complex electronic network.

But the Army is still a "long way from having the level of knowledge it should have had before starting product development," which the service began in 2003, according to the report.

The GAO report said it has issued several recommendations to the Defense Department detailing specific steps the Pentagon should take before launching a major program review scheduled for 2008. During the review, the department should determine whether the Army should continue with the program, GAO said.

"As DOD proceeds with its decisions, it must preserve its ability to change course on acquiring FCS capabilities to guard against a situation in which FCS will have to be acquired at any cost," the GAO report said.

The department agreed with the intent of the GAO recommendations, but it did not back away from its commitment to FCS or its current plans for development and procurement.

"This concerns us," GAO responded in the report.

As a result, GAO wants Congress to take steps to solidify the business plan for FCS before making any future commitments to fund the program.

The expensive program has long been a concern of lawmakers, who have repeatedly questioned the program's management and soaring costs. At a Senate hearing last month, Army officials said the rising cost was not caused by mismanagement, but by changes in Army requirements and attempts to field new technologies ahead of schedule.

Initially, the Army estimated the program would cost $92 billion. Now, the price tag ranges between the Army's last figure of $161 billion and a GAO forecast at last month's Senate hearing that costs could reach $200 billion.

"FCS will be competing for significant funds at a time when federal fiscal imbalances are exerting great pressures on discretionary spending," the latest GAO report said. "FCS and other programs must be executable within projected resources."

The Army plans to field pieces of FCS in increments as the individual technologies become available. By 2025, the service plans to buy 15 brigades' worth of FCS equipment.