Missile Defense

The Pentagon is developing a national missile defense program to shield the United States from a ballistic missile attack from "rogue" nations, such as North Korea and Iran. Following a departmental review by the end of July 2000, the administration plans to decide on whether to deploy the system. To reduce risks, the Defense Department (DOD) has, since GAO's 1998 report (GAO/NSIAD-98-153), delayed initial fielding of the national missile defense system from fiscal year 2003 to 2005; postponed decisions on the production of radars and interceptors, and boosted funding for testing. Even with the changes, however, significant performance and schedule risks persist. Developing a highly reliable hit-to-kill capability is a difficult technical challenge. Only three of the 19 planned intercept attempts are scheduled before the July 2000 deployment review. None of these attempts will expose the interceptor kill vehicle to the higher acceleration and vibration loans of the much faster, actual system booster. Because the program has a very aggressive schedule, it is vulnerable to delays. DOD has instituted several cost-control measures, including a process called "cost as an independent variable," which sets realistic cost objectives and trades off the system's performance and schedule to control costs. After incorporating cost savings from these measures, program officials estimated that the approved program would cost $36.2 billion over the life of the Capability I system--or about $7.5 billion more than the 1999 estimate. The cost rose mostly because of the decision to increase the number of interceptors and add flight tests, ground-test equipment, and a more capable radar facility. Costs are likely to increase further because of the vulnerability to schedule delays. Program officials estimate that each month of delay would increase program costs by $124 million.

GAO noted that: (1) to reduce risks, the Department of Defense (DOD) has delayed initial fielding of the National Missile Defense system from fiscal year 2003 to 2005, delayed program decisions on the production of radars and interceptors, and increased funding for testing; (2) even with these programmatic changes, significant performance and schedule risks remain for several reasons; (3) developing a highly reliable hit-to-kill capability is a difficult technical challenge; (4) in various missile defense programs, this capability has been demonstrated in about 30 percent of the attempted intercepts outside the atmosphere; (5) only 3 of the 19 planned intercept attempts are scheduled prior to the July 2000 deployment readiness review; (6) none of these attempts will expose the interceptor kill vehicle to the higher acceleration and vibration loads of the much faster, actual system booster; (7) because the program has a very aggressive schedule, it is vulnerable to delays; (8) compared to the 15 years estimated to develop and field another missile defense system called the Theater High Altitude Area Defense system, the schedule to develop and field the National Missile Defense system covers only 8 years; (9) DOD told Congress last October that the development and deployment schedule was compressed by at least 4 years because of the seriousness of the emerging missile threat from rogue nations; (10) to control costs, DOD has implemented several measures, including a process called "cost as an independent variable," which sets realistic cost objectives and trades off the system's performance and schedule to control costs; (11) officials estimate that the savings from this process include $4.3 billion from early trade studies conducted by the prime contractor on alternative mixes of radars and interceptor locations; (12) after incorporating the expected cost savings from these measures, the National Missile Defense program office estimated that the approved program would cost $36.2 billion over the life of the Capability I system or about $7.5 billion more than its 1999 estimate; (13) the cost increased mostly because of the decision to increase the number of interceptors and add flight tests, ground-test equipment, and a more capable radar facility; and (14) using current spending rates the program office estimates that each month of delay would increase program costs by $124 million.