Implications of DOD Funds Execution Policy for Acquisition Program Management

April, 2014
IDA document: P-5164
FFRDC: Systems and Analyses Center
Type: Documents
Division: Strategy, Forces and Resources Division
Kathleen M. Conley, James R. Dominy, R. Royce Kneece, Jr., Jay Mandelbaum, Susan K. Whitehead See more authors
This publication examines the causes of under-execution of funds in Department of Defense (DOD) investment programs. It also investigates the institutional responses to instances of under-execution and the effects of those responses on program performance. A previous study conducted by the Defense Acquisition University in 2012 identified several possible causes of under-execution based upon the results of a survey of acquisition and financial managers. The Institute for Defense Analyses (IDA) team constructed a database of first year execution data for DOD investment budget line items from 2006 to 2013. These data show that there has been a consistent downward trend in funds execution rates for procurement obligations since 2006 and Research, Development, Test and Evaluation (RDT&E) disbursements since 2009. The research team also interviewed key officials in the Office of the Secretary of Defense, Military Service staffs, program executive offices, and program and contracting offices. These interviews and other supporting data indicate that the current acquisition, financial management, and contracting systems are designed to be flexible. However, program officials report that implementation can be rigid, reflecting overly risk-averse management of the acquisition process. Several best practices are identified and improvements are recommended.