Access to Space

The Defense Department's (DOD) plans to begin production of a costly new fleet of expendable satellite launch vehicles before testing is completed poses a risk of increased costs and schedule delays. Moreover, DOD's lack of contingency plans in the event of unsuccessful flight testing could jeopardize some satellite launch missions. Technical concerns about the launch system have also been raised. The Air Force has identified vehicle propulsion, systems integration, and software as potential problem areas. Vehicle development is less than 25 percent complete, and DOD has about a year to address these risks before proceeding into engineering and manufacturing development, which is scheduled to begin in June 1998. With billions of dollars at stake, risk mitigation is essential. The space industry expects a large international market for commercial satellites, particularly communication satellites, and therefore, for launch vehicles. As a result, DOD's investment in the program will provide the winning contractor with a competitive edge in the international launch vehicle market. DOD may want to consider a cost-sharing contract for the engineering and manufacturing development phase or arrange for the government to recoup part of its investment on the basis of commercial launch vehicle sales.

GAO noted that: (1) reducing the cost of launching satellites into orbit is the paramount objective of the EELV program; (2) however, DOD faces many program risks in making the transition to EELV that could increase costs, cause schedule delays, and possibly jeopardize some satellite schedules and missions; (3) EELV development is less than 25 percent complete, and DOD has about 1 year to address these risks before proceeding into engineering and manufacturing development which is scheduled for June 1998; (4) with several billion dollars at stake, risk mitigation efforts are essential; (5) cost risk is inherent in the current acquisition plan because EELV production could be initiated from 1 to 2 years before the first system development test flight; (6) pursuing such a strategy could result in costly modifications to the production vehicles because historically, most launch systems have had several failures during their early flight period; (7) also, existing satellite programs expect to incur at least $117 million in added costs as a result of the transition to EELV, and these costs are not included in the Office of Secretary of Defense or Air Force cost estimates for the EELV program; (8) there are schedule risks that could seriously affect the EELV program; (9) as currently planned, DOD will purchase the last of its existing expendable launch vehicles before the first EELV system development test flight is scheduled to occur; (10) an unsuccessful test flight, coupled with the expiration of existing vehicle contracts, could create a void in the government's launch capability; (11) DOD has not developed contingency plans to address this potential risk to national security and civil satellite schedules and missions; (12) however, it did indicate that commercial launch vehicles could be used for an emergency procurement in the event of an EELV failure or schedule delay; (13) the Air Force has identified the meeting of launch facility preparation schedules as a significant program risk; (14) in addition, there are technical issues that raise concerns about potential EELV performance; (15) the Air Force has identified vehicle propulsion, systems integration, and software as technical risk areas; (16) the commercial application of EELV poses a unique situation for the government; (17) the space industry expects a large international market for commercial satellites, particularly communication satellites, and therefore for launch vehicles; and (18) as a result, the winning EELV contractor will enjoy an enhanced competitive position in the international launch vehicle market from DOD's investment in EELV.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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