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Tuesday, November 29, 2022

GAO: DoD Must Weigh Climate Risks to Contractors as Part of Acquisition, Supply, and Risk Assessment

The Department of Defense relies on contracted goods and services to carry out missions. Since 2010, DOD has identified climate change as a threat to its operations and installations.

Climate effects can damage infrastructure—for example, flooding can damage roads or electrical infrastructure—in turn delaying critical goods like food or services like information technology. However, DOD hasn’t routinely assessed how climate change or extreme weather risks could affect its contractors and its access to goods and services.

The Government Accountability Office recommended, among other things, incorporating climate resilience into military acquisition and supply guidance.

The Department of Defense (DOD) has not routinely assessed climate-related risks faced by its contractors as part of its acquisition and supply processes, through which DOD obtains contracted goods and services. DOD’s acquisition process includes long-term planning activities such as life-cycle sustainment planning. Its supply chain process includes steps to identify and assess potential disruptions, such as severe storms affecting transportation or energy systems, in order to mitigate risk. However, these processes in general do not systematically identify and consider climate-related risks to materiel acquisition and supply or the acquisition of weapon systems, according to Office of the Secretary of Defense (OSD) and military department officials. DOD’s climate change adaptation directive indicates that OSD and the military departments should include climate considerations in acquisition and supply and integrate those considerations into relevant policy and guidance.

However, GAO’s review of DOD and military department guidance on acquisition and supply found that the guidance did not implement DOD’s climate change directive by including consideration of climate change or extreme weather. Until DOD and the military departments include these considerations in their guidance on acquisition and supply chain processes, they risk continuing to develop acquisition strategies and managing supply chains without building climate resilience into these processes and potentially jeopardizing their missions.

DOD guidance requires consideration of climate-related risks as part of the mission assurance process, when appropriate. However, GAO found that the department has not assessed risks—including those associated with climate change or extreme weather—to commercially owned facilities, which can support DOD installations as well as weapon systems, as part of this process. Assessing risks to commercial facilities has been a longstanding challenge for DOD, with the department noting in 2012 that it had paid inadequate attention to challenges outside of DOD-owned facilities and citing a limited understanding of supply chain risks as a pervasive problem. DOD’s mission assurance guidance includes minimum requirements for assessments of certain non-DOD-owned facilities, such as completion of an all-hazards threat assessment. However, DOD officials stated that they had not conducted such assessments.

The officials noted that DOD is limited in its ability to conduct such assessments, as it does not have the same access to commercial facilities as it does to its own facilities. While DOD officials stated that they are exploring alternative ways of assessing risks to commercial facilities, they noted that these efforts are in the early stages. Without determining what approaches may be feasible for assessing risks to commercial facilities as part of the mission assurance process and issuing or updating guidance accordingly, DOD may not fully evaluate the risks to critical commercial facilities as part of the mission assurance process, leaving gaps in its knowledge of potential risks—to include climate and weather-related risks—to its ability to fulfill key missions dependent on such facilities.

GAO is making six recommendations, including that DOD incorporate climate adaptation into its acquisition and supply guidance and issue or update guidance on mission assurance-related assessments for commercial facilities. DOD concurred with three recommendations and partially concurred with three. GAO continues to believe that DOD should fully implement its recommendations.

Read the GAO report

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