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GAO examines flexibilities intended to speed up DOD R&D

July 27, 2023

The Department of Defense (DOD) receives about $95 billion annually to support research and development efforts. But some members of Congress feared that requesting and allocating those funds took too long. It usually takes two years, which hinders response to evolving threats. The Senate addressed this issue in the Senate Report on the National Defense Authorization Act for Fiscal Year 2022, calling for the U.S. Government Accountability Office (GAO) to review DOD research funding flexibilities. GAO reports that service officials responsible for R&D efforts were not familiar with all of the flexibilities available to them.

GAO reviewed U.S. Code, relevant legislation, and DOD documents to identify flexibilities. They selected a nongeneralizable sample of five flexibilities to provide variation in what they allowed DOD to do. They also selected 25 activities as illustrative examples and to assess their use. GAO interviewed DOD and military department officials to gather data.

At least 26 authorities related to budgeting and financial management allowed DOD flexibility in its use of funds to support research and development (R&D), innovation, and modernization activities during fiscal years 2017 through 2021. For example, one flexibility allows lab directors to use a small part of lab funds to support early research. But DOD had not communicated this information across the department, limiting its use. DOD also does not maintain centralized information on flexibilities, which DOD and military department officials said they would find useful. Army, Navy, and Air Force officials responsible for R&D efforts said they were generally familiar with the five selected flexibilities GAO reviewed but not others. Responsibility for implementation is dispersed among organizations.

DOD used the five flexibilities GAO reviewed to speed up R&D efforts. For fiscal years 2017 through 2021, DOD reported making about $4.5 billion available to begin research, construct test centers, and support technology and software development, among other efforts related to these flexibilities.

The software-related pilot flexibility that GAO reviewed did not meet leading practices for pilot program design. During the pilot, DOD learned it could only collect the data as planned from some participating programs. DOD is updating its methodology but still needs to update its evaluation plan for assessing the effectiveness of the pilot. Without implementing such a plan, DOD and Congress will be unable to determine whether to make the pilot permanent.

GAO is making three recommendations to DOD to (1) designate an organization responsible for collecting information about available flexibilities and ensure it shares this information, (2) develop guidance for the lab modernization flexibility, and (3) implement an evaluation plan for the software pilot. DOD concurred with all three recommendations.

Download the full GAO report here.

gao, dod, r&d