Missile Development

The Tri-Service Standoff Attack Missile (TSSAM) program--a $13.7 billion effort to develop and acquire a stealthy, conventional, medium-range cruise missile--has been plagued by significant technical problems, cost growth, and schedule delays. In May 1994, the Defense Department began restructuring the program after a series of flight test failures and unresolved technical problems. On December 9, 1994, the Secretary of Defense announced plans to cancel the program because of significant development difficulties and growth in the expected unit cost for each missile. This report provides pertinent information on the history and status of the TSSAM program at the time of the Secretary's announcement for use by Congress as it reviews the termination decision.

GAO found that: (1) unsuccessful flight test results, particularly over the last 2 years, made attainment of TSSAM's very high reliability requirement questionable; (2) the program office and Northrop initiated a reliability improvement program to address this concern, but demonstration of whether problems had been resolved would have taken several years; (3) the acquisition of more test missiles would have added nearly $300 million to the program's estimated development cost but provided little, if any, assurance of TSSAM performance and reliability before the critical early production decisions; (4) buying these test missiles in fiscal year 1995 would have been premature; (5) the 1994 reviews of cost reduction measures and alternative systems could have resulted in major design changes or, as the Secretary of Defense recommended, a decision to terminate the program; (6) the total TSSAM program cost increased from an estimated $8.9 billion in 1986 to $13.7 billion in 1994, and the total number of missiles to be produced decreased by over 50 percent; (7) during the same period, estimated procurement unit costs increased from $728,000 to over $2 million; (8) TSSAM's increasing cost was a factor that convinced the Army to end its participation in the program in February 1994 and had been driving the Navy and the Air Force to reconsider whether they could still afford TSSAM; (9) to address the services' concerns over TSSAM's high cost, DOD directed the Air Force in September 1994 to conduct an analysis of TSSAM's estimated production costs to identify measures that would reduce costs by up to 50 percent; (10) declining budgets and changes in threat had prompted the services to consider alternative systems; (11) DOD's March 1994 Cost and Operational Effectiveness Analysis concluded that TSSAM was the most cost-effective weapon among several alternatives, principally because of its success in high-threat situations; and (12) however, the analysis showed some alternative weapon systems performed well in less demanding situations and might be adequate to meet existing national security requirements.