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Congress extends deadline to replace Pentagon oversight reports

The Defense Department will get two more years to devise a new system for reporting weapons' costs

The Pentagon hopes to phase out its Selected Acquisition Reports, which have revealed cost overruns in weapons like the Navy's Littoral Combat Ship.
The Pentagon hopes to phase out its Selected Acquisition Reports, which have revealed cost overruns in weapons like the Navy's Littoral Combat Ship. (Lockheed Martin via Getty Images)

The defense authorization measure that the Senate cleared last week would end, starting in fiscal 2023, a requirement for the Pentagon to file certain public reports about more than $2 trillion worth of major weapons.

It’s a unique class of documents that experts say has improved oversight of such spending for more than half a century. The fiscal 2020 National Defense Authorization Act had required that the documents, called Selected Acquisition Reports, be terminated after fiscal 2021. The new fiscal 2022 NDAA retains the termination mandate but extends the deadline by two years.

Meanwhile, the Pentagon is working on a replacement reporting system that would make the information available in a database in real time instead of in quarterly or annual reports. But the new system is not yet ready, and its proposed elements are not clear to the congressional Armed Services committees, whose new NDAA requires reports from the Pentagon about the forthcoming system.

The SARs, as the reports are called, provide information on the degree to which the Pentagon’s most expensive weapons programs are meeting cost, schedule and technical performance objectives.

Because the current reports, which date back to 1968, have been invaluable to congressional aides, defense experts, auditors and reporters, many support continuing them as is. Virtually everyone agrees, however, that if they are to be replaced, it must be by a system that is as good or better at keeping track of how officials are doing at meeting commitments to deliver hundreds of billions of dollars worth of weapons on time and on budget.

The SARs regularly reveal problems in weapons programs that Defense Department officials had not previously volunteered to divulge. In recent years, the documents showed growth in costs for programs such as the F-22 and F-35 fighter jets, the Airborne Laser antimissile program and the Navy’s Littoral Combat Ships, among many others.

The SARs represent “the best information available to the public about the real costs of our weapons systems and are the only basis for independent assessments of cost growth across the Defense Department’s portfolio,” said Mandy Smithberger, a defense analyst at the Project on Government Oversight, a watchdog group, which favors retaining the SARs.

The fiscal 2020 NDAA simply repealed the SARs, effective in fiscal 2021, whether a replacement is ready or not. The new NDAA just extends that deadline.

President Joe Biden is expected to sign the fiscal 2022 NDAA into law in the coming days.  

Earlier this month, when House and Senate Armed Services panel members finished writing that bill behind closed doors, they did not include a provision from Rep. Sara Jacobs, D-Calif., that was in the House’s version that struck the fiscal 2020 abolition of the SARs — restoring the requirement for the reports. 

Transparency issue

While the SARs have been valuable to policymakers in Congress and inside the Pentagon, many of them now want to replace the longstanding reports. 

The Pentagon’s recently rewritten acquisition rules provide for different degrees of oversight for different kinds of programs, and so department officials want reporting on program performance to also be more varied and tailorable.

What’s more, many policymakers would like the reports to be available in real time instead of only periodically, which now makes the SARs lagging indicators of program status, supporters of the change say. And incorporating the information in a new database could enable new forms of analytics, they say.

The goal of changing the system is to enhance it “to ensure transparency,” a Senate Armed Services Committee aide said.

The Pentagon has different acquisition “pathways” now, with reduced requirements for some programs to report their cost and schedule information inside the department. The objective of the new approach is to streamline bureaucracy in cases where weapons need to be fielded faster.

But the more tailored reporting process that the Pentagon is developing is far from complete, said Shelby Oakley, director of contracting and national security acquisitions at the Government Accountability Office, in April testimony before a Senate Armed Services subcommittee.

The Senate Armed Services Committee report accompanying its version of the NDAA, which never passed the Senate because of an unrelated dispute over amendments, reveals that senators back the new system but do not want to jettison the current one without knowing the replacement is fully operational.

“However, until these efforts are fully developed and implemented, the committee believes the requirement for Selected Acquisition Reports should be maintained to ensure the Congress continues to receive critical information about the cost, schedule, performance, and other challenges of the Department of Defense’s largest acquisition programs,” the Senate panel’s report said.

Paperwork reduction push

The Pentagon told Congress this summer it is not providing SARs this year and justified it on the grounds that, because the fiscal 2022 budget request did not include projections for future spending, the reports could not be complete.

The SARs have been targeted for years by those in Washington who believe the Pentagon is required to complete too many reports for Congress. Former Defense Secretary Donald Rumsfeld, for example, tried to do away with the SAR reports in 2004.

In a letter to Armed Services leaders back then, Danielle Brian, POGO’s executive director, warned of the dire consequences of doing away with the reports.

“Their elimination would deal a serious blow against open government,” Brian wrote. “For instance, the latest round of SARs revealed a disturbing story of out-of-control weapons systems unit cost escalation for programs ranging from the F/A-22 tactical fighter to the Comanche helicopter. This important information could have been kept out of the public debate were it not for the SARs.”

The GAO’s Oakley warned the Senate subcommittee in April that much depends on the development of new ways to track weapon program performance.

“Not making meaningful changes to focus oversight on the most important aspects of program performance could have reverberating effects for decades to come if critical programs continue to deliver disappointing results,” Oakley said.

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