Report No. DODIG-2013-131 U.S. Department of Defense InspectorSEPTEMBER 16, 2013 General Army Requirement To Acquire Individual Carbine Not Justified INTEGRITY EFFICIENCY ACCOUNTABILITY EXCELLENCE INTEGRITY EFFICIENCY ACCOUNTABILITY EXCELLENCE Mission Our mission is to provide independent, relevant, and timely oversight of the Department of Defense that: supports the warfighter; promotes accountability, integrity, and efficiency; advises the Secretary of Defense and Congress; and informs the public. Vision Our vision is to be a model oversight organization in the federal government by leading change, speaking truth, and promoting excellence; a diverse organization, working together as one professional team, recognized as leaders in our field. Fraud, Waste and Abuse HOTLINE 1.800.424.9098 • www.dodig.mil/hotline For more information about whistleblower protection, please see the inside back cover. Army Requirement To Acquire Individual Carbine NotResults Justified in Brief September 16, 2013 Finding Continued Objective Army (Acquisition, Logistics and Technology) that detailed our concerns with IC product office officials obligating $420,000 We initiated this audit to determine whether to award contracts to initiate the Phase III of the IC source the Army justified its competition to acquire selection process. a new Individual Carbine (IC) weapon and whether the Army was implementing an On March 29, 2013, the Assistant Secretary responded to our effective acquisition strategy. memorandum. The Assistant Secretary stated that the Army Finding appreciated the opportunity to respond; however, while the Army was assessing the DoD IG findings, the integrity and sensitive nature of the IC source selection process did not allow the Army The Army Deputy Chief of Staff, G-3/5/7, did to address our findings in its response. The Assistant Secretary not justify the requirement for a new carbine. further stated the Army would not award Phase III contracts This occurred because the Army Deputy Chief until it adequately addressed our findings. of Staff, G-3/5/7, did not follow the Small Recommendations Arms Capabilities Based Assessment findings and recommendations, and inappropriately approved and validated the requirements The Assistant Secretary of the Army (Acquisition, Logistics and document used to support the establishment Technology) should terminate the Individual Carbine competition of the individual carbine program. As a and eliminate funding the Individual Carbine program. Also, the result, the Army wasted about $14 million on Army Deputy Chief of Staff, G-3/5/7, should validate the quantity a competition to identify a source to supply of M4 carbines needed. If the Army concludes that additional new carbines it does not need. In addition, M4 carbines are needed, then the Army should hold a the Army plans to spend $2.52 billion over a competition to acquire them. Furthermore, the Assistant Secretary 20-year life cycle to procure and maintain of the Army (Financial Management and Comptroller) should 501,289 carbines that its own analysis reprogram the $382 million in procurement and research, suggests can be delayed for another 10 years development, test, and evaluation funding currently allocated with no impact on readiness. to acquire carbines across the FY 2013 to FY 2018 Future Years Defense Program, adjusted by validated M4 carbines needed. We identified potential monetary benefits Comments of $2.52 billion, $382 million of funds to put to better use ($375 million in procurement funding and $7 million in research, Although the Assistant Secretary of the Army (Financial development, test, and evaluation funding) Management and Comptroller), the Assistant Secretary of the and $2.14 billion in cost avoidance after Army (Acquisition, Logistics and Technology), and the Army FY 2018 if the program is terminated. Deputy Chief of Staff, G 3/5/7, did not state whether they agreed or disagreed with our recommendations, their responses met On December 28, 2012, we issued a quick reaction the intent of our recommendations. memorandum to the Assistant Secretary of the Visit us on the web at www.dodig.mil i DODIG-2013-131 (Project No. D2012-D000AE-0196.000) │ Recommendations Table Recommendations No Additional Management Requiring Comment Comments Required Assistant Secretary of the Army (Financial Management and Comptroller) 3 Assistant Secretary of the Army (Acquisition, Logistics and Technology) 1 Army Deputy Chief of Staff, G-3/5/7 2 ii │ DODIG-2013-131 (Project No. D2012-D000AE-0196.000) INSPECTOR GENERAL DEPARTMENT OF DEFENSE 4800 MARK CENTER DRIVE ALEXANDRIA, VIRGINIA 22350-1500 September 16, 2013 MEMORANDUM FOR THE AUDITOR GENERAL, DEPARTMENT OF THE ARMY SUBJECT: Army Requirement To Acquire Individual Carbine Not Justified (Report No. DODIG-2013-131) We are providing this report for your information and use. We determined the Army did not justify the need for a new carbine, and as a result, wasted about $14 million on a competition to identify a source to supply new carbines it does not need. In addition, the Army plans to spend $2.52 billion over a 20-year life cycle to procure and maintain 501,289 carbines that its own analysis states can be delayed for another 10 years with no impact to readiness. During the audit we identified potential monetary benefits of $2.52 billion, $382 million of funds to put to better use and $2.14 billion in cost avoidance after FY 2018 if the program is terminated. We considered management comments on a draft of this report when preparing the final report. Comments from the Assistant Secretary of the Army (Financial Management and Comptroller), the Assistant Secretary of the Army (Acquisition, Logistics and Technology), and the Army Deputy Chief of Staff, G-3/5/7, conformed to the requirements of DoD Directive 7650.3; therefore, we do not require additional comments. We appreciate the courtesies extended to the staff. Please direct questions to me at (703) 604-8905 (DSN 664-8905). Amy J. Frontz Principal Assistant Inspector General for Auditing iii DODIG-2013-131 │ Contents Introduction Objective _________________________________________________________________________________________1 Background ______________________________________________________________________________________1 Army Previously Concluded That the Introduction of New Carbine Without Significantly Improved Performance Was Unacceptable ___________________________________________________1 Army Executes Dual Path Strategy for Next Generation of Army Service Rifles ____________2 Program Management __________________________________________________________________________4 Finding.Review of Internal Army Controls Strategy ____________________________________________________________________ To Acquire 5 Individual Carbines Not Supported ____________________________________6 Policy on Identifying and Validating Capability Requirements ______________________________6 Small Arms Capabilities Based Assessment Did Not Identify the Need for a New Carbine ____________________________________________________________________7 Army Inappropriately Approved and Validated the Individual Carbine Capability Development Document ___________________________________________________________8 Army Initiated Program To Acquire an Improved Carbine That Was Not Needed _______ 10 Army Organizations Recommend Suspending the Individual Carbine Competition and Source Selection Efforts __________________________________________________ 11 Conclusion _____________________________________________________________________________________ 14 AppendixesRecommendations, Management Comments, and Our Response _________________________ 15 Appendix A. Scope and Methodology ______________________________________________________ 18 Prior Coverage on Individual Carbine ____________________________________________________ 19 Appendix B. M16 Rifle and M4 Carbine Family of Weapons ______________________________ 20 Appendix C. Timeline of Key Events ________________________________________________________ 22 Appendix D. Chronology, Key Events, and Activities _______________________________________ 23 Appendix E. Quick Reaction Memorandum and Response ________________________________ 25 Appendix F. Summary of Potential Monetary Benefits ____________________________________ 32 iv │ DODIG-2013-131 Contents (cont’d) Management Comments Assistant Secretary of the Army (Financial Management and Comptroller) Comments ______________________________________________________________________ 33 Assistant Secretary of the Army (Acquisition, Logistics and Technology) Comments ______________________________________________________________________ 34 AcronymsArmy Deputy Chief and of Staff, Abbreviations G-3/5/7, Comments ___________________________________________ 35 _____________________________________________ 36 v DODIG-2013-131 │ Introduction Introduction Objective The audit objective was to evaluate the Army’s requirements and acquisition strategy for improving the Individual Carbine (IC) weapon. Specifically, the audit evaluated whether the Army justified its competition to acquire a new IC weapon and whether the Army was implementing an effective acquisition strategy. See Appendix A for a discussion of the audit scope and methodology and prior coverage. Background The IC program is an Acquisition Category II major system program that entered the Engineering and Manufacturing Development phase of the acquisition process on April 7, 2011. The IC program was designated as an Army