Summary: The Pentagon considers acquisition reform (lowering the cost of acquiring weapon systems) to be one of its highest priorities. In an era of shrinking military budgets, the Defense Department (DOD) plans to use the savings from acquisition reform to pay for forces modernization. DOD established a reinvention laboratory in September 1994 to help reduce nonvalue added oversight requirements, thereby lowering contractors' compliance costs and the government's oversight costs. Overall, the reinvention laboratory has made only limited progress in reducing the cost of contractors' compliance with government regulations and oversight requirements. In particular, laboratory participants reported little success in addressing nine of the top 10 cost drivers. DOD officials said that the reinvention laboratory tended to receive little top-level support from elsewhere in DOD. Other factors that limited various projects included statutory and non-DOD regulatory requirements, disagreements between DOD and contractors over the value of some oversight requirements, and difficulties coordinating and obtaining approval for proposed changes that involved multiple customers. These results, however, should not deter DOD from continuing its efforts to reduce nonvalue added oversight requirements. Sustained support from DOD leadership is essential. From a budgetary perspective, the laboratory results underscore the need for caution in estimating cost savings from oversight reform.
