This morning POGO released a scathing Pentagon report (pdf) that criticizes Lockheed Martin's military aircraft division for failing to follow contractually-required industry standards for managing its multibillion-dollar weapons programs. These industry guidelines are supposed to help contractors and the government spot and manage cost and schedule problems.
The report essentially says the world's largest defense contractor isn't fit to manage billion-dollar weapons programs. Lockheed Martin does “not provide the requisite definition and discipline to properly plan and control complex, multibillion dollar weapon systems acquisition programs,” it states.
The compliance report by the Defense Contract Management Agency (DCMA; pdf), which conducted its review in August 2007, states that Lockheed has been "non-compliant" in 19 of 32 guidelines known as the Earned Value Management System (EVMS).
The DCMA rips Lockheed (LM-Aero, or Lockheed Martin Aeronautical Systems):
These and the other identified deficiencies raise significant concerns regarding LM-Aero management processes and practices and the Company's ability to mitigate emerging cost and schedule issues in a timely manner. Because the accuracy and validity of LM-Aero performance measurement data is suspect, the Department's ability to use EVM data to determine product delivery dates and to develop timely and accurate estimates of program completion costs is adversely impacted.
It was apparent during discussions with LM-Aero CAMs that their involvement in performing their EVM responsibilities was superficial at best. Most CAM functions are being performed, with little management control, by the business operations personnel assigned to Integrated Product Teams (IPT). The result is a serious deterioration of system discipline.
This undisciplined approach to program management and towards the maintenance of the EVMS, will ultimately jeopardize the long-term stability of LM-Aero programs at Fort Worth, Texas facilities and diminishes the purchasing power of the Department.
An earlier GAO report also revealed that on average the 95 major defense programs it reviewed are facing dramatic increases in both acquisition costs and schedule delays. Problems with EVMS contribute to cost and schedule growth.
The DCMA report is likely to be addressed at this morning's Senate Armed Services Committee hearing looking into the acquisition of major weapon systems by the Defense Department.
-- Nick Schwellenbach
UPDATE: Click here to watch a live webcast of the hearing.