Defense Acquisitions
Despite Restructuring, SBIRS High Program Remains at Risk of Cost and Schedule Overruns Gao ID: GAO-04-48 October 31, 2003In 1996, the Department of Defense (DOD) initiated the Space-Based Infrared System (SBIRS) to provide greater long-range ballistic missile detection capabilities than its current system. The initial SBIRS architecture included "High" and "Low" orbiting space-based components and ground processing segments. SBIRS has been technically challenging, and in October 2001, SBIRS Low was transferred from the Air Force to the Missile Defense Agency. The Air Force expected to field SBIRS High by 2004, but numerous problems have led to schedule overruns. In the fall of 2001, DOD identified potential cost growth of $2 billion. To determine the causes of the significant cost growth, DOD convened an Independent Review Team. In August 2002, the Air Force restructured the program to address the findings of the team's assessment. Our report (1) describes the key elements of the restructured program and (2) identifies problems and potential risks still facing the program.
In an effort to get the SBIRS High program on track, the most recent program restructuring provided contractor incentives and oversight measures, as recommended by the Independent Review Team. Under the current contract, the prime contractor's award fees are now tied to the incremental delivery of specific system capabilities. DOD also modified the contract to prescribe tighter management controls, improve reporting of contractor information, and add formal review processes by DOD management. This increased oversight is intended, in part, to minimize further changes in requirements and improve management of software development, both of which have been particularly problematic. The restructuring also added funding and other resources to the program and extended the scheduled delivery of certain components. At the time of the restructuring, the Air Force believed the modified contract established an executable schedule, a realistic set of requirements, and adequate funding. However, the restructuring did not fully address some long-standing problems identified by the Independent Review Team. As a result, the program continues to be at substantial risk of cost and schedule increases. Key among the problems is the program's history of moving forward without sufficient knowledge to ensure that the product design is stable and meets performance requirements and that adequate resources are available. For example, a year before the restructuring, the program passed its critical design review with only 50 percent of its design drawings completed, compared to 90 percent as recommended by best practices. Consequently, several design modifications were necessary, including 39 to the first of two infrared sensors to reduce excessive noise created by electromagnetic interference--a threat to the host satellite's functionality--delaying delivery of the sensor by 10 months or more. Software development underlies most of the top 10 program risks, according to the contractor and the SBIRS High Program Office. For example, testing of the first infrared sensor revealed several deficiencies in the flight software involving the sensor's ability to maintain earth coverage and track missiles while orbiting the earth. Program officials stated that they are coordinating the delivery of the first sensor with the delivery of the host satellite to mitigate any schedule impacts, but they agreed that these delays put the remaining SBIRS High schedule at risk.
RecommendationsOur 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.
Director: Team: Phone:GAO-04-48, Defense Acquisitions: Despite Restructuring, SBIRS High Program Remains at Risk of Cost and Schedule Overruns
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Report to the Subcommittee on Strategic Forces, Committee on Armed
Services, U.S. Senate:
United States General Accounting Office:
GAO:
October 2003:
Defense Acquisitions:
Despite Restructuring, SBIRS High Program Remains at Risk of Cost and
Schedule Overruns:
GAO-04-48:
GAO Highlights:
Highlights of GAO-04-48, a report to the Subcommittee on Strategic
Forces, Committee on Armed Services, U.S. Senate
Why GAO Did This Study:
In 1996, the Department of Defense (DOD) initiated the Space-Based
Infrared System (SBIRS) to provide greater long-range ballistic
missile detection capabilities than its current system. The initial
SBIRS architecture included ’High“ and ’Low“ orbiting space-based
components and ground processing segments.
SBIRS has been technically challenging, and in October 2001, SBIRS Low
was transferred from the Air Force to the Missile Defense Agency. The
Air Force expected to field SBIRS High by 2004, but numerous problems
have led to schedule overruns. In the fall of 2001, DOD identified
potential cost growth of $2 billion.
To determine the causes of the significant cost growth, DOD convened
an Independent Review Team. In August 2002, the Air Force restructured
the program to address the findings of the team‘s assessment. Our
report (1) describes the key elements of the restructured program and
(2) identifies problems and potential risks still facing the program.
What GAO Found:
In an effort to get the SBIRS High program on track, the most recent
program restructuring provided contractor incentives and oversight
measures, as recommended by the Independent Review Team. Under the
current contract, the prime contractor‘s award fees are now tied to
the incremental delivery of specific system capabilities. DOD also
modified the contract to prescribe tighter management controls,
improve reporting of contractor information, and add formal review
processes by DOD management. This increased oversight is intended, in
part, to minimize further changes in requirements and improve
management of software development, both of which have been
particularly problematic. The restructuring also added funding and
other resources to the program and extended the scheduled delivery of
certain components. At the time of the restructuring, the Air Force
believed the modified contract established an executable schedule, a
realistic set of requirements, and adequate funding.
However, the restructuring did not fully address some long-standing
problems identified by the Independent Review Team. As a result, the
program continues to be at substantial risk of cost and schedule
increases. Key among the problems is the program‘s history of moving
forward without sufficient knowledge to ensure that the product design
is stable and meets performance requirements and that adequate
resources are available. For example, a year before the restructuring,
the program passed its critical design review with only 50 percent of
its design drawings completed, compared to 90 percent as recommended
by best practices. Consequently, several design modifications were
necessary, including 39 to the first of two infrared sensors to reduce
excessive noise created by electromagnetic interference”a threat to
the host satellite‘s functionality”delaying delivery of the sensor by
10 months or more. Software development underlies most of the top 10
program risks, according to the contractor and the SBIRS High Program
Office. For example, testing of the first infrared sensor revealed
several deficiencies in the flight software involving the sensor‘s
ability to maintain earth coverage and track missiles while orbiting
the earth. Program officials stated that they are coordinating the
delivery of the first sensor with the delivery of the host satellite
to mitigate any schedule impacts, but they agreed that these delays
put the remaining SBIRS High schedule at risk.
What GAO Recommends:
GAO is recommending that DOD convene a task force to assess the
restructured program with an emphasis on providing concrete guidance
for the program to address its underlying problems. DOD agrees that
another review of the program is warranted.
www.gao.gov/cgi-bin/getrpt?GAO-04-48.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Robert Levin at (202)
512-4841 or levinr@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Restructured Program Focused on Contract Management and Program
Oversight:
Restructuring Did Not Address Long-Standing Problems That Put the
Program at Risk:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Scope and Methodology:
Appendix I: Comments from the Department of Defense:
Appendix II: SBIRS High Performance in Mission Areas:
Appendix III: Key Events in the SBIRS High Program:
Appendix IV: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Nunn-McCurdy Criteria and DOD's Supporting Information for
SBIRS High Certification, May 2002:
Table 2: Effectivities and Their Utilities in Relation to SBIRS
High Launch/Delivery Dates:
Figure:
Figure 1: Space-Based Infrared System Description:
Abbreviations:
CMMI: Capability Maturity Model Integration:
DCMA: Defense Contract Management Agency:
DOD: Department of Defense:
DSP: Defense Support Program:
EMI: electromagnetic interference:
EVMS: Earned Value Management System:
GEO: geosynchronous earth orbit:
HEO: highly elliptical orbit:
IRT: Independent Review Team:
ITW/AA: integrated tactical warning/attack assessment:
LEO: low earth orbit:
M3P: multimission mobile processor:
MCS: mission control station:
ORD: operational requirements document:
OSD: Office of the Secretary of Defense:
SBIRS: Space-Based Infrared System:
TES: theater event system:
TSPR: Total Systems Performance Responsibility:
USD (AT&L): Under Secretary of Defense for Acquisition, Technology, and
Logistics:
United States General Accounting Office:
Washington, DC 20548:
October 31, 2003:
The Honorable Wayne Allard:
Chairman:
The Honorable Bill Nelson:
Ranking Minority Member:
Subcommittee on Strategic Forces:
Committee on Armed Services:
United States Senate:
Since the early 1980s, the Department of Defense (DOD) has initiated
several long-range ballistic missile detection programs aimed at
providing greater capabilities than the Defense Support Program (DSP),
the currently operating strategic-surveillance and early warning
satellite system.[Footnote 1] In 1996, DOD initiated the most recent of
these efforts: the Space-Based Infrared System (SBIRS). SBIRS has
proven to be a technically challenging program, intended to combine all
military infrared surveillance requirements into a single, integrated
system, or "system of systems," to provide accurate and timely warning
and tracking of a ballistic missile attack. The initial SBIRS
architecture included "High" and "Low" orbiting space-based
components[Footnote 2] and ground processing segments. In October 2001,
the Low component was transferred from the Air Force to the Missile
Defense Agency and in 2002 was renamed the Space Tracking and
Surveillance System.[Footnote 3] The Air Force continues to develop
SBIRS High and its related ground segment--now one of DOD's highest
priority space programs--as an upgrade and eventual replacement for
DSP.
Originally, SBIRS High was expected to be fielded between 1999 and
2004, under a research and development contract with an estimated value
of $1.8 billion. However, since the program began, it has encountered a
number of problems, including immature technologies and changing
requirements, that have resulted in cost and schedule overruns. In the
fall of 2001, DOD identified cost growth of at least $2 billion, which,
because it exceeded a statutory threshold, triggered a Nunn-McCurdy
review and certification of the program as required by law.[Footnote 4]
To determine the underlying causes of the significant cost growth, DOD
convened an Independent Review Team (IRT), and in August 2002, the
Air Force restructured the program to address the findings of the IRT
assessment. Currently, the amount under contract for the SBIRS High
program is $4.4 billion. Concerned that cost, schedule, and performance
problems may persist, you asked us to (1) describe the key elements of
the restructured program and (2) identify problems and potential risks
still facing the program.
Results in Brief:
In an effort to get the SBIRS High program on track, the most recent
program restructuring provided additional resources, contractor
incentives, and oversight measures. DOD modified its contract with
Lockheed Martin Space Systems Company,[Footnote 5] the prime
contractor, to prescribe tighter management controls, improve reporting
of contractor information, and add formal review processes by DOD
management. This increased oversight is intended, in part, to minimize
further changes in requirements and improve management of software
development, both of which have been particularly problematic in the
development of SBIRS High. Additionally, Lockheed Martin's award fees
have been tied to the incremental delivery of specific system
capabilities. At the time of the restructuring, the Air Force believed
the contract, as modified, established an executable schedule, a
realistic set of requirements, and adequate funding to address the
underlying factors that led to the cost growth and Nunn-McCurdy review.
While the restructuring implemented a number of needed management
changes, it did not fully address some long-standing problems in the
development of SBIRS High identified by the IRT. As a result, the
program continues to be at substantial risk of cost and schedule
increases. Key among the problems is the program's history of moving
forward with system development before requirements are set and
sufficient knowledge is gained. For example, a year before the
restructuring, the program passed its critical design review with only
50 percent of its design drawings completed, compared to 90 percent as
recommended by the best practices that we have found characterize
successful programs. Consequently, several design modifications have
been necessary, including 39 modifications to the first of two infrared
sensors to reduce excessive noise created by electromagnetic
interference--a threat to the host satellite's functionality--delaying
delivery of the sensor by 10 months. Software development also remains
problematic. For example, Defense Contract Management Agency (DCMA)
officials report that testing of the first infrared sensor in May 2003
revealed several deficiencies in the flight software involving the
sensor's ability to maintain earth coverage and track missiles while
orbiting the earth. According to the contractor and SBIRS High Program
Office, software development underlies most of the top 10 program
risks. Moreover, delays in the development of the first sensor have had
a cascading effect. For example, the continuing design and software
development work on the first sensor is now competing for staff and
other resources that were scheduled to be used for follow-on
developmental tasks. Program officials stated that they are
coordinating the delivery of the first sensor with the delivery of the
host satellite to mitigate any schedule impacts, but they agreed that
these delays put the remaining SBIRS High schedule at risk.
We are recommending that DOD reassess the SBIRS High program with the
aim of making the best decisions for proceeding with the procurement of
a system that meets this nation's need for strategic surveillance and
early warning satellite data. DOD agrees that a thorough review of the
SBIRS High program is warranted but would like the flexibility to
consider other approaches before making a final decision on assigning
responsibilities for conducting a review. (DOD's comments are reprinted
in app. I.) We agreed and modified our recommendations accordingly.
Background:
SBIRS High Program Description:
SBIRS High is designed to contribute to four defense mission areas:
missile warning, missile defense, technical intelligence, and battle-
space characterization. (See app. II for a description of the program's
contribution to each.) SBIRS High is intended to replace the DSP
satellite constellation, which has provided early missile warning
information for more than 30 years, and to provide better and more
timely data to the Unified Combatant Commanders, U.S. deployed forces,
U.S. military strategists, and U.S. allies.
As currently planned, SBIRS High will be comprised of four satellites
in geosynchronous earth orbit (GEO), two infrared sensors that are to
be placed on separate host satellites in highly elliptical orbit
(HEO)[Footnote 6]--known as "HEO sensors"--and a ground segment for
mission processing and control. These elements are illustrated in
figure 1. The Air Force plans to acquire a fifth GEO satellite to serve
as a spare that would be launched when needed.
Figure 1: Space-Based Infrared System Description:
[See PDF for image]
[A] Once a product decision is made, the operational constellation will
consist of 20 plus satellites for continuous coverage.
[End of figure]
SBIRS High is intended to provide taskable sensors with improved
sensitivity and revisit rate allowing them to see dimmer objects and
provide more accurate estimates of missile launch and impact point than
the sensors in the existing satellite constellation. SBIRS High sensors
are also expected to view particular areas of interest and to revisit
multiple areas of interest as directed by ground controllers. In
addition to covering the shortwave infrared spectrum like their
predecessor, SBIRS High sensors are also expected to cover midwave
infrared bands and see-to-the-ground bands[Footnote 7] allowing them to
perform a broad set of missions.
SBIRS High is being developed in two increments. Increment 1, which
achieved initial operational capability in December 2001, consolidated
DSP and Attack and Launch Early Reporting to Theater ground stations
into a single mission control station, which is currently operating
using DSP data. Through spiral development,[Footnote 8] Increment 2
(now in the systems design and development phase) will develop the HEO
sensors and first two GEO satellites and will upgrade Increment 1
hardware and software to operate and process data from the HEO and GEO
elements. The remaining three GEO satellites are to be procured at some
future date.
Past Problems:
Since the SBIRS program's inception in 1996, it has been burdened by
immature technologies, unclear requirements, unstable funding,
underestimated software complexity, and other problems that have
resulted in mounting cost overruns and delays. In addition, the program
has been restructured several times. Most notably, in 1998, the SBIRS
High Program Office had to restructure the program around an Air Force
directive to delay the GEO satellite launches by 2 years in order to
fund other DOD priorities. This contributed to program instability
since the contractor had to stop and restart activities and devise
interim solutions that would not otherwise have been required. In early
2001, there were growing cost and schedule variances and a related
decrease in contractor management reserve funding. Primary drivers of
these problems were technical issues with the HEO sensors and
associated test failures.
In November 2001, the Assistant Secretary of the Air Force
(Acquisition) and the Executive Vice President of Lockheed Martin Space
Systems Company formed the IRT--comprised of various specialists in
acquisition, operations, engineering, and business management from
industry and the federal government--to conduct a comprehensive,
independent review of the SBIRS High program. In February 2002, the IRT
issued a candid and critical report identifying three primary causes
that led to the significant cost growth:
* The program was too immature to enter the system design and
development phase. Program activation was based on faulty and overly
optimistic assumptions about software reuse and productivity levels,
the benefits of commercial practices, management stability, and the
level of understanding of requirements.
* The complexity of developing engineering solutions to meet system
requirements was not well understood by program and contracting
officials. The systems integration effort was significantly
underestimated in terms of complexity and the associated impacts. In
addition, the requirements refinement process was ad hoc, creating
uncertainty on the status of program priorities and affecting cost and
schedule.
* Breakdown in execution and management. Overly optimistic assumptions
and unclear requirements eventually overwhelmed government and
contractor management. The 2-year delay of the GEO satellite launches,
which occurred in 1998, contributed to management instability and was a
factor in the Program Office and the contractor having to spend 25 of
the first 60 months of the contract on replanning activities.
The IRT also made a number of recommendations to address these
problems. These included establishing accurate baselines for cost,
schedule, and technology; revising the contract fee structure; and
redefining Program Office and contractor management roles and
responsibilities.
Nunn-McCurdy Breach and Certification:
A preliminary effort to capture a realistic estimate of total program
costs conducted in the fall of 2001 suggested potential cost growth in
excess of $2 billion, or a 70-percent program acquisition unit cost
increase. A major defense acquisition program that incurs a unit cost
growth of at least 25 percent in the acquisition program baseline
triggers a statutory requirement that the Secretary of Defense[Footnote
9] certify to the Congress that four criteria have been met in order to
continue the program--a process known as Nunn-McCurdy.[Footnote 10] See
table 1 for a list of the criteria and the information DOD used to
support certification for the SBIRS High program.
Table 1: Nunn-McCurdy Criteria and DOD's Supporting Information for
SBIRS High Certification, May 2002:
Criteria: System is essential to national security.; DOD supporting
information: U.S. Strategic Command is required to maintain space and
missile warning/defense resources and to provide the President and
military leaders with missile warning and defense information; the
Joint Requirements Oversight Council revalidated the SBIRS Operational
Requirements Document in January 2002; SBIRS High is needed to replace
DSP.
Criteria: There are no alternatives that will provide equal or greater
military capability at less cost.; DOD supporting information: Many
alternatives were reviewed but none could provide equal or greater
military capability at the same cost as SBIRS High. Additionally, all
alternatives had greater technical and schedule risk.
Criteria: New cost estimates are reasonable.; DOD supporting
information: Cost estimates from various entities, including Lockheed
Martin, the SBIRS High Program Office, and the Air Force Cost Analysis
Agency, were close and the engineering manufacturing development
estimate was mature, had high fidelity, and appeared reasonable.
Criteria: Program management is adequate to manage and control costs.;
DOD supporting information: The contractor has established an effective
organization and instituted positive changes.
[End of table]
Source: U.S. Air Force.
Based on the information submitted to the Under Secretary of Defense
for Acquisition, Technology, and Logistics (USD (AT&L)), the SBIRS High
program was officially certified on May 2, 2002, with the contingencies
that the Air Force fully fund the program to the cost estimate
developed by the Office of the Secretary of Defense (OSD) and to
reestablish a baseline to OSD's schedule for the GEO satellites. USD
(AT&L) also directed that a revised acquisition strategy and program
baseline be approved by the end of August 2002. These revisions and the
new contract with Lockheed Martin Space Systems Company represent the
most recent program restructuring. (App. III provides a chronology of
key events in the development of SBIRS High.):
Restructured Program Focused on Contract Management and Program
Oversight:
In August 2002, the SBIRS High program was restructured to address a
number of the problems that led to the Nunn-McCurdy breach. In
implementing changes, the Air Force relied heavily on the findings and
recommendations of the IRT. The restructuring increased program
oversight and provided additional resources as well as incentives
intended to improve contractor performance.
As part of the program's recertification after the Nunn-McCurdy breach,
USD (AT&L) directed the Air Force to reestablish a baseline for the
program's cost and schedule estimates. The value of the restructured
development contract increased by $2 billion to $4.4 billion. The first
GEO satellite (GEO 1) launch was replanned from September 2004 to
October 2006 and the GEO 2 launch from September 2005 to October 2007.
The procurement start of GEO satellites 3 through 5 was replanned from
fiscal year 2004 to fiscal year 2006. The SBIRS High budget for fiscal
years 2006 and 2007 has identified funding for GEO satellites 3 through
5 totaling $1.3 billion--these satellites are not yet on contract. In
addition to increased funding, the restructuring added 656 staff to the
program--including increased staff for software development--bringing
the total number of personnel to 2,305 by June 2003.
Under the restructuring, DOD's contract with Lockheed Martin
was modified from a cost-plus-award fee structure to a cost-plus-
award-and-incentive fee structure. The objective of this change was to
encourage timely delivery of accepted capabilities by providing the
incentive of the full potential profit or fee for the contractor. At
the time of the restructuring, the Air Force believed the modified
contract established an executable schedule, a realistic set of
requirements, and adequate funding, and addressed the underlying
factors that led to the Nunn-McCurdy breach.
The restructured contract was planned around 10 "effectivities"--
milestones at which an incremental system capability is delivered by
the developer and accepted by the operator as shown in table 2.
Delivery of these effectivities is tied to the contractor's award and
incentive fees. Lockheed Martin met the first effectivity and was
awarded 100 percent of its fee (about $1.4 million).
Table 2: Effectivities and Their Utilities in Relation to SBIRS
High Launch/Delivery Dates:
Effectivity: 1; Event: Interim mission control station (MCS) backup-1
system certification; Milestone date: Oct. 2002 (completed);
Operational and military utility: Provides an interim catastrophic
peacetime backup capability for the Increment 1 MCS at another
location.
Event: HEO 1 delivery; Milestone date: Feb.
2003 (delayed); Operational and military utility:
[Empty].
Effectivity: 2; Event: Integrated training suite; Milestone date: Sept.
2003 (completed); Operational and military utility: Provides the
ability to train the integrated SBIRS High missions; provides better-
trained crew members, crew coordination, and utilization of training
resources.
Event: HEO 2 delivery; Milestone date: Jan.
2004 (delayed); Operational and military utility:
[Empty].
Effectivity: 3; Event: HEO message certification; Milestone date: Nov.
2004 (delayed to Apr. 2005); Operational and military utility: Provides
an interim test center for HEO launch and early on-orbit testing
operations; would signify interim operations of the HEO sensor; missile
warning and missile tracking information would be reported to MCS; both
real time and off-line technical intelligence data gathering would be
performed.
Effectivity: 4; Event: DSP multimission mobile processor (M3P) theater
event system (TES) certification; Milestone date: Apr. 2005;
Operational and military utility: Improves maintainability and
supportability; sustains theater performance.
Event: GEO 1 launch; Milestone date: Oct.
2006; Operational and military utility: [Empty].
Effectivity: 5; Event: GEO message certification; Milestone date: Aug.
2007; Operational and military utility: Provides an interim test center
for GEO launch and early on-orbit testing operations; GEO scanner-only
mono-track event data released to MCS; increases capabilities to better
meet the technical intelligence mission.
Event: GEO 2 launch; Milestone date: Oct.
2007; Operational and military utility: [Empty].
Effectivity: 6; Event: GEO Air Force M3P survivable/endurable
integrated tactical warning/attack assessment (ITW/AA) system
certification; Milestone date: Oct. 2008; Operational and military
utility: Fuses available DSP, HEO sensor, and GEO satellite infrared
data to detect events and generate reports; improves Increment 2
detection, reporting, and accuracy of missile events (where M3Ps are
deployed) and battle-space characterization capability.
Event: GEO 3 launch; Milestone date: Jan.
2009 (rescheduled to Sept. 2010); Operational and military utility:
[Empty].
Effectivity: 7; Event: Interim MCS backup-2 multisatellite system
certification; Milestone date: Jan. 2009; Operational and military
utility: First opportunity at a fixed site to provide multisatellite
fusion capability for DSP, HEO, and GEO; improves tactical parameters,
such as location of launch point, impact area, and state vector
accuracy.
Effectivity: 8; Event: MCS-2 system certification; Milestone date: Oct.
2009; Operational and military utility: Fully integrates MCS
operations; improves accuracy and detection of events for war-fighting
operations.
Event: GEO 4 launch; Milestone date: Jan.
2010 (rescheduled to Sept. 2011); Operational and military utility:
[Empty].
Effectivity: 9; Event: GEO Army M3P survivable/endurable ITWW/AA system
and TES certification; Milestone date: Apr. 2010; Operational and
military utility: Improves detection and reporting of infrared events;
fuses DSP, HEO, and GEO track data relayed from MCS and the interim
backup; improves tactical parameters from in-theater assets, such as
launch point, impact area, and state vector accuracy.
Effectivity: 10; Event: Increment 2 complete; Milestone date: Apr.
2010; Operational and military utility: Concludes the Increment 2
development and deployment of the SBIRS High full constellation;
additional follow-on GEO satellites provide multitheater/worldwide
coverage.
Source: U.S. Air Force.
[End of table]
The restructured contract also prescribed tighter management controls,
improved reporting of contractor information, and added formal review
processes. For example, the modified contract removed Total Systems
Performance Responsibility (TSPR)[Footnote 11] from the contractor,
transferring more oversight back to the government because, according
to the IRT, this concept was not properly understood or implemented
within the SBIRS High program. This was evidenced by the numerous
instances where the contractor was asked by program participants to
accomplish work under TSPR guidelines without going through the
appropriate management processes. In addition, since requirements were
not prioritized or well-defined below the Operational Requirements
Document (ORD) level, the contractor's refinement of requirements was
ad hoc, creating uncertainty on the status of program priorities and
impacting cost and schedule.
The restructuring also modified the program's use of DOD's Earned Value
Management System (EVMS).[Footnote 12] Specifically, Lockheed Martin
and its subcontractors standardized EVMS procedures in an effort to
provide more accurate and up-to-date reporting on the status of the
program. In addition, an EVMS oversight team was established to focus
on process improvements, and Lockheed Martin and its subcontractors
developed a surveillance plan to review the EVMS data. The contractor
is now monitoring EVMS data more closely through monthly meetings and
reviews of specific cost accounts. Changes to the reporting of EMVS
data also help identify risks more effectively.
The contractor and SBIRS High Program Office have also increased
oversight and established a more formal risk management process within
the restructuring. For example, the prime contractor placed three vice
presidents in charge of the program as program director, deputy for
ground segment development, and deputy for systems integration. In
addition, the Air Force established a program management board
consisting of high-level Air Force officials to prevent uncontrolled
changes in the SBIRS High program. Risks are now monitored and reported
during weekly risk management meetings. On a monthly basis, these risks
are also discussed with government and contractor senior management.
Finally, program officials reported that Lockheed Martin has employed
a more structured software development process that focuses on
building the software in increments, thereby helping to spread out
risks. A vice president is now overseeing the ground segment
development, including software development. Further, Lockheed Martin
has reorganized the ground software development group under its
Management and Data Systems, which is known for its software expertise.
This component of Lockheed Martin achieved a Capability Maturity Model
Integration (CMMI) level 5--the highest rating--for its software
management and procedures.[Footnote 13] The ground software group does
not have a formal CMMI rating--Lockheed Martin Management and Data
Systems was brought in to help improve this group's processes.
Restructuring Did Not Address Long-Standing Problems That Put the
Program at Risk:
While the new oversight processes under the restructured program
should help managers identify and address problems as they arise, the
restructuring does not fully account for earlier program decisions made
without sufficient systems engineering and design knowledge. As a
result, the program continues to experience problems and risks related
to changing requirements, design instability, and software development
concerns. In particular, design problems have delayed the delivery of
the first HEO sensor (HEO 1). Because development of the GEO satellites
and possible additional HEO sensors are tied to the completion of HEO
1, the schedules for the subsequent components could slip, continuing
to put the program at significant risk of cost and schedule overruns.
Requirements Modifications Continue:
As we reported in June 2003, the majority of DOD satellite programs
that GAO has reviewed over the past 2 decades, including SBIRS, have
cost more than expected and have taken longer to develop and launch
than planned because performance requirements were not adequately
defined at the beginning of the program or were changed significantly
once the program had already begun.[Footnote 14] The numerous changes
to the SBIRS High requirements contributed to the cost and schedule
overruns early in the program. Although a more defined requirements
management process is now in place, changes to both the operational
requirements and the contract are being proposed that could impact the
program's cost and schedule.
Before the restructuring, a total of 94 requirements changes were made
to the SBIRS High program--16 of which were added after the
critical design review in August 2001.[Footnote 15] The effect that
these changes may continue to have on the program was not addressed in
the August 2002 restructuring efforts. Since restructuring, an Air
Force program management board--which was established to oversee
requirements changes and help ensure appropriate use of funds--has
approved 34 actions that will require contract modifications. If
funded, these changes, identified as "urgent and compelling,"[Footnote
16] would total $203.8 million and come from the Program Manager's
discretionary funds (also known as management reserve) or be paid by
the user who needs the new capability. The majority of these dollars
would be used to cover the following four changes:
* earlier implementation of HEO mission processing in the mission
control station at an estimated cost of $15 million,
* full implementation of the mission management component of HEO for
the technical intelligence community at an estimated cost of
$33 million,
* implementation and fielding of an operational mission control station
backup to meet Increment 1 ITW/AA requirements in fiscal year 2006 at
an estimated cost of $97 million, and:
* the Army's implementation of a capability for DSP M3Ps to receive and
process HEO tracking data at an estimated cost of $27 million.
In addition to these pending changes, the Air Force is considering
acquiring a third and possibly a fourth HEO sensor and accelerating the
procurement schedule for GEO satellites 3 through 5.[Footnote 17] If
procured together, the estimated cost (including integration and
testing) is $283 million for the third HEO sensor and $238 million for
the fourth HEO sensor. The funding for these sensors has yet to be
determined. The potential acceleration of the acquisition of GEO
satellites 3 through 5 is similarly placing added pressures on the
program. Plans to accelerate the acquisition of these GEO satellites is
in response to a recent concern by the Senate Armed Services
Committee[Footnote 18] that an Air Force decision to delay the
acquisition of satellites 3 through 5 would create a 3-year gap between
the launch of the second and third satellites. As a result, the
committee directed the Air Force to develop a plan to reduce the
production gap in the SBIRS High program from 2 years to 1. The
committee also directed the Air Force to assess the program's
technical, schedule, and cost risks associated with a 2-year delay,
compare the operational risk of a 1-year delay with a 2-year delay, and
describe steps to mitigate the impact of a 1-year production gap.
In April 2002, a group comprised of DOD subject matter experts reviewed
the SBIRS High requirements and concluded that four operational
requirements will not fully be met by the current design under certain
scenarios. While these requirements are only 4 of 140, they are
important to the system's overall missile defense and warning
capability:
* threat typing--the ability to identify a certain type of missile
launched under certain scenarios;
* impact point prediction--the ability to predict where a particularly
stressing theater-class missile will hit the earth;
* theater state vector velocity--the ability to track the path of a
particularly stressing theater-class missile; and:
* strategic raid count--the ability to count and discriminate the
number of true incoming missiles for a certain scenario.
Program officials said that these four requirements were poorly
written, defined, or described in the ORD and that efforts are underway
to rewrite, seek waivers, or clarify them and negotiate deviations with
users.
Design and System Integration Continue to Be Unstable:
Achieving a stable design before entering product demonstration is
critical to maintaining cost and schedule goals.[Footnote 19] However,
at the SBIRS High critical design review--1 year before the
restructuring--only 50 percent of design drawings were complete,
compared to 90 percent as recommended by best practices.[Footnote 20]
In addition, the IRT report found that the program did not invest
enough time and resources in basic systems engineering analysis.
Despite these problems, the program passed the critical design review.
As a result, persistent problems with and changes to the design--
especially of HEO 1--continue to impact the program's cost and
schedule.
The HEO 1 sensor is the first major deliverable for Increment 2 and the
only near-term deliverable to measure the program's progress. As a part
of the restructuring, the delivery of this sensor to the host satellite
was delayed from its original date in February 2002 to February 2003.
At that time, program officials were confident of meeting the new
delivery date. However, significant deficiencies were revealed during
systems tests in November 2002 making it apparent that the February
2003 date would not be met, and delivery was postponed another 2
months. At this writing, the first HEO sensor has yet to be delivered.
In May 2003, the Program Director reported that the delays were due to
a series of design deficiencies. For example, the design to control the
sensor's electromagnetic interference (EMI) was inadequate.[Footnote
21] Specifically, Lockheed Martin identified 148 offending EMI
frequencies that exceeded the tolerances established by the host
satellite. These excessive frequencies could interfere with the
operations of the host satellite and jeopardize its mission. Thirty-
nine design modifications to the HEO sensor were made, which eliminated
80 percent of these noise conditions. However, the final EMI test,
completed in early July 2003, identified seven remaining EMI
frequencies that were not within tolerance--two of which appear to be
attributable to the HEO sensor. Since the problems cannot be resolved
and there is no expected impact on performance, the Program Director
requested waivers for the offending frequencies to allow the sensor to
be integrated onto the host satellite. According to a program official,
the waivers have been approved and the first HEO sensor is now expected
to be delivered on December 6, 2003, provided no additional testing is
needed.
The Program Director reported that the HEO 1 design problems were
attributable to weaknesses in earlier program management processes.
Under these processes, the program tried to achieve efficiencies by
cutting back on detailed design analyses and component testing. The
exact costs associated with these weaknesses are unclear. Our
independent estimate--using data from the contractor's June 2003 cost
performance report--indicates that the development of HEO 1 will
overrun the contract amount at completion by about $25 million to
$54 million, and that additional costs associated with HEO 2 rework
would be between $20 million and $80 million.[Footnote 22] The Program
Office is currently assessing estimates of total cost impact.
Since the critical design review in August 2001, the Air Force also
determined that two late design changes to the GEO satellites were
necessary to improve the program's chances of success. In January 2003,
the Air Force directed the contractor to replace the 80 ampere-hour
battery with a 100 ampere-hour battery to improve the satellites'
operational reliability. Program officials estimate that the new
battery will cost about $15 million, but the June 2003 cost performance
report shows that the contractor is having difficulty assessing and
establishing specifications for the battery, which has resulted in
schedule delays and could result in even greater costs. The second
design change to the GEO satellites is to resolve a power deficiency by
modifying the solar cell panel. The expected cost of this change has
not yet been determined.
In April 2002, 4 months before the restructuring, a report prepared by
subject matter experts determined that while there were no significant
technical barriers to eventually meeting the key requirements for SBIRS
High, technology integration was a high risk owing to insufficient
time. In restructuring the program, the Air Force implemented earlier
integration and testing activities to mitigate this risk. However, we
found that these mitigation measures may not be sufficient to avoid
delays. For example, as of June 2003, the contractor has completed
about 58 percent of the GEO sensor integration, assembly, test and
checkout work, but it is still behind schedule with about $2 million of
the planned work not yet accomplished.
Software Development Is Still High Risk:
The development of software for the HEO sensors and GEO satellites
(known as "flight" software) and the ground facility was a major factor
that led to the Nunn-McCurdy breach. Despite the restructuring, the
contractor and Program Office continue to report that software
development underlies most of the top 10 program risks. Flight and
ground software have already experienced difficulties, delaying
delivery and putting program accomplishments at further risk.
Most of the software for SBIRS High is for the ground stations to
operate and command the satellites, process and display missile warning
data, and perform mission management functions. Additional flight
software is being developed for the HEO sensors and GEO satellites to
control the infrared sensors and optical telescope and to process
infrared data onboard the satellite.[Footnote 23] Another set of
software elements will be used to test and simulate the performance of
the SBIRS High system before it is put into operation. According to
Lockheed Martin officials, the risks associated with the development of
these software elements would be minimal because the majority of the
software would be reused and modified.[Footnote 24]
However, the risk associated with software development and reuse in
Increment 1 was underestimated, which led to significant delays and
cost overruns. This problem was not fully addressed by the
restructuring and the time needed to develop the software continues to
be underestimated. For example, in the current phase (Increment 2),
delivery of the HEO flight software has been delayed because software
item qualification testing--which was completed in May 2003 after a 3-
month delay--revealed three deficiencies. One deficiency involved the
HEO sensor's ability to maintain earth coverage and track missiles
while orbiting the earth. Delivery of the HEO ground software has also
been delayed, and according to a program official, did not meet a
revised delivery date of August 2003 because several ground software
issues must still be resolved. While the problems encountered with the
development of the flight and ground software have only resulted in
delays of a few months, the delays signal weaknesses that could put the
program at further risk of cost and schedule overruns.
The remaining computer memory margin on the onboard satellites is also
a concern. The SBIRS High program requirements mandate that the memory
margin be at least 50 percent. This is to ensure there is sufficient
remaining memory to accommodate future software code growth. However,
inefficient coding for onboard satellite operations has resulted in an
estimated current memory margin of 35 percent. Since rewriting the code
would be too costly to the program, Lockheed Martin is requesting a
waiver from this requirement to allow the 35-percent margin.
According to DCMA officials, the HEO software delays are the result of
an overly aggressive software development schedule and a lack of
management's understanding of the complexity of the software task.
A program official stated the contractor's software productivity and
efficiency metrics have recently begun to reflect a negative trend in
the program due to the delays in software development and increases in
software defects. These officials stated that the program suffered from
a lack of skilled computer personnel with infrared space systems
knowledge. After the August 2002 restructuring, DCMA officials stated
that Lockheed Martin committed more personnel and approved overtime
when necessary to achieve schedules and has been cooperative in making
changes recommended by DCMA and the SBIRS High Program Office. Although
these actions should improve the schedule status, they will have a
negative cost impact because of the additional resources that will need
to be committed to recover and meet the program's future schedule.
HEO Delays Affect the Total SBIRS High Program:
Delays in the development and delivery of the HEO 1 sensor will likely
have long-term consequences for the remainder of the program. According
to DOD officials, until tasks leading to HEO message certification are
complete, the program will not have "turned the corner" to achieving
its objectives. However, some schedule milestones for these tasks have
begun to slip due to problems in developing the HEO 1 sensor. As a
result, the HEO message certification milestone, scheduled for November
2004, will slip 5 months or more.
Program officials stated that they are coordinating the delivery of
HEO 1 and the host satellite to mitigate any schedule impacts, but they
agreed that these delays put the remaining SBIRS High schedule at risk.
For example, the continuing HEO 1 sensor and software work is now
competing for staff and other resources dedicated to HEO 2 and GEO
tasks. As a result, the HEO 2 sensor and the first GEO satellite are
unlikely to maintain their current development and launch schedules
already revised under the restructuring. Program officials now estimate
the HEO 2 sensor delivery will be delayed from February 2004 to June
2004--or as much as a year later--to implement more in-depth
modifications to correct EMI problems, as recommended by a technical
review team. According to program officials, the development schedule
for the first GEO satellite has sufficient margin--approximately 300
days--to avoid delays in the first GEO launch. However, delivery and
integration of the GEO flight software--a high-risk effort--did not
begin in August 2003 as scheduled. While DCMA officials report that
they are monitoring Lockheed Martin's progress to maintain the software
development schedule, any delays will affect the entire GEO schedule
and could jeopardize the delivery and launch of the first GEO
satellite.
In an attempt to avoid delays, the program has compressed schedules and
implemented work-around plans. However, in compressing original
schedules, the program creates other risks because the time allotted to
test and analyze the software and to train personnel to operate the
SBIRS High ground processing system has been significantly reduced. In
addition, work-around plans to overcome delays, even if feasible, would
be difficult and costly to accomplish. At the same time, valuable on-
orbit information of the HEO sensor's performance may not be available
in a timely manner for the GEO development efforts. Since HEO and GEO
have common components, including the infrared sensor subsystem, HEO
on-orbit data would improve the knowledge base for GEO development.
Increased cost is also a risk. Although the contractor forecasts that
the contract will be within cost at completion, significant cost
overruns are likely. In analyzing data from the contractor's cost
performance reports from February 2003 through June 2003, we found that
the cumulative cost overrun increased by more than 800 percent, from
approximately $3 million to approximately $31.7 million, due to the
significant overtime worked over a number of months. Moreover, as the
program works to accomplish the almost $40 million worth of planned
work that is behind schedule, the negative cumulative cost variance of
approximately $31.7 million will continue to grow. Specifically, we
predict that at contract completion, the program will have a cost
overrun ranging from roughly $80 million to $432 million. DCMA
similarly predicts significant cost overruns--officials reported an
estimated overrun ranging from $34 million to $210 million at
completion and gave an overall assessment of "red"[Footnote 25] for the
SBIRS High earned value management status.
Finally, as the program works to remedy problems--particularly those
associated with the HEO sensors--management reserves are diminishing.
For fiscal year 2003, reserves have been depleted, and Air Force and
program officials are concerned that fiscal year 2004 reserves are
insufficient to address contingencies. As a result, some planned
development tasks may be delayed to fiscal year 2005.
The Program Director stated that the program is applying lessons
learned from HEO 1 to the HEO 2 sensor, the first GEO satellite, and
other parts of the program. The knowledge gained from correcting
problems on HEO 1 will be necessary if the Air Force decides to procure
additional HEO sensors and accelerate procurement of the third, fourth,
and fifth GEO satellites. The Program Office is also assessing the
overall program impacts from the HEO 1 delay but has yet to complete
the analysis.
Conclusions:
DOD has invested billions of dollars in an effort to develop a system
that will provide greater long-range detection capabilities than DSP,
its current missile tracking system. Yet more than a year after the
most recent restructuring, the SBIRS High program continues to
experience problems that have existed since its inception: cost
overruns, schedule delays, and performance limitations. While the Air
Force has taken a number of actions as recommended by the IRT to
improve program oversight, it has become increasingly evident that the
underlying factors that led to the Nunn-McCurdy breach--particularly
the lack of critical knowledge--continue to cause problems, and
additional cost and schedule slips beyond the revised acquisition
program baseline appear inevitable. Without sufficient knowledge to
ensure that the product design is stable and meets performance
requirements and that adequate resources are available, there is no
assurance that technical problems--such as those experienced with the
HEO 1 sensor--will not surface on other major program components once
they go through systems integration and testing. Moreover, the
inability of the Air Force and its contractor to deliver HEO 1 as
scheduled has put into question whether the restructuring has provided
the right mechanisms to achieve program objectives. If the Air Force
continues to add new requirements and program content while prolonging
efforts to resolve requirements that cannot be met, the program will
remain at risk of not achieving within schedule its intended purpose--
to provide an early warning and tracking system superior to that of
DSP.
Recommendations for Executive Action:
Given the considerable investment yet to come, the Congress and the
Secretary of Defense would benefit from an assessment of whether the
Program Office and contractor are doing everything necessary and
feasible to achieve program objectives and to minimize future cost and
schedule growth and address the underlying factors that are causing
these problems. Therefore, we recommend that the Secretary of Defense
reconvene the IRT or similar independent task force with substantial
program knowledge to provide an assessment of the restructured program
and concrete guidance for addressing the program's underlying problems.
Such a review should include determining whether the:
* SBIRS High development schedule is executable within current cost and
schedule estimates in light of the recent HEO 1 delays and other risks
(such as software development),
* program design is stable and sufficient to meet performance
requirements,
* contractor's software development procedures and practices have
reached at least a CMMI level 3[Footnote 26] in relation to the
Software Engineering Institute's standards,
* appropriate management mechanisms are in place to achieve intended
program objectives, and:
* pending requirements changes should be funded.
We further recommend that the Secretary of Defense put in place a
mechanism for ensuring that the knowledge gained from the assessment is
used to determine whether further programmatic changes are needed to
strengthen oversight, adjust current cost and schedule estimates,
modify contract mechanisms, and address requirements changes.
Agency Comments:
In commenting on a draft of this report, DOD agreed that another
thorough review of the SBIRS High program is warranted, and that the
results of this review should be used to bring about needed program
changes. However, DOD only partially agreed with our recommendations
because it would like the option to consider other approaches for
assigning responsibility for conducting a review. Given the complexity
of this program, we agree that the Secretary of Defense should have
this flexibility. We have modified our recommendations accordingly. DOD
also provided technical comments, which we have incorporated as
appropriate. DOD's written comments--provided by the Deputy Under
Secretary of Defense for Policy, Requirements, and Resources within the
Office of the Under Secretary of Defense for Intelligence--are
reprinted in appendix I.
Scope and Methodology:
To identify the key elements of the restructured SBIRS High program, we
reviewed the program's operational requirements document, acquisition
program baseline, single acquisition management plan, cost analysis
requirements description, technical reports, and status documents; the
restructured contract with Lockheed Martin Space Systems Company; and
Nunn-McCurdy certification documents. We discussed the restructured
program with representatives from the SBIRS High Program Office, Space
and Missile Systems Center, Los Angeles Air Force Base, El Segundo,
California; Secretary of the Air Force, Space Force Enhancement,
Washington, D.C.; Office of the Assistant Secretary of Defense,
Networks and Information Integration, Washington, D.C.; Office of the
Secretary of Defense, Director of Program Analysis and Evaluation,
Washington, D.C.; Lockheed Martin Space Systems Company, Missile and
Space Operations, Sunnyvale, California; and Lockheed Martin Management
and Data Systems, Boulder, Colorado. We also discussed requirements and
mission needs with officials from Air Force Space Command and U.S.
Strategic Command (West), Peterson Air Force Base, Colorado Springs,
Colorado and Air Force Headquarters, Directorate of Operational
Capability Requirements, Space Capability, Arlington, Virginia.
To determine the problems and potential risks relating to cost,
schedule, and performance that are still facing the SBIRS High program,
we reviewed technical reports and program briefings and held
discussions with program and contractor officials regarding ongoing
challenges. To gain an understanding of these challenges, we reviewed
monthly acquisition reports, Air Force Space Command's urgent and
compelling needs lists, the contractor's top program risks lists, and
recent congressional language concerning delivery schedules. To
determine the program's ability to meet cost and schedule projections,
we examined schedule and funding information for developing hardware
and software. We compared information from the SBIRS High Program
Office to other independent reports including those from the IRT, a
commissioned technology review, and DCMA. We also reviewed the report
from the Baseline Update-1, a formal program review, and other program
assessment reports. In addition, we performed our own analysis of cost
and schedule projections using Lockheed Martin's 2003 cost performance
report data. We discussed all of these issues with representatives from
the SBIRS High Program Office; Lockheed Martin Space Systems Company,
Missile and Space Operations; Lockheed Martin Management and Data
Systems; Office of the Secretary of Defense, Director of Operational
Test and Evaluation, Alexandria, Virginia; and the Defense Contract
Management Agency, Sunnyvale, California.
We performed our work from October 2002 through September 2003 in
accordance with generally accepted government auditing standards.
We plan to provide copies of this report to the Secretary of Defense,
the Secretary of the Air Force, and interested congressional
committees. We will make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site
at http://www.gao.gov.
If you or your staff have any questions concerning this report please
contact me at (202) 512-4841 or John Oppenheim at (202) 512-3111.
Key contributors to this report are listed in appendix IV.
R. E. Levin
Director, Acquisition and Sourcing Management:
Signed by R. E. Levin:
[End of section]
Appendix I: Comments from the Department of Defense:
Note: Page numbers in the draft report may differ from those in this
report.
OFFICE OF THE UNDER SECRETARY OF DEFENSE 5000 DEFENSE PENTAGON
WASHINGTON, DC 20301-5000:
October 7, 2003:
INTELLIGENCE:
Mr. Robert E. Levin:
Director, Acquisition and Sourcing Management U.S. General Accounting
Office:
441 G Street, N.W. Washington DC 20548:
Dear Mr. Levin:
This is the Department of Defense (DoD) response to the GAO report,
DEFENSE ACQUISITIONS: Despite Program Restructuring, SBIRS High Remains
at Risk of Cost and Schedule Overruns, dated September 4, 2003 (GAO
Code 120177/GAO-04-48).
The Secretary of Defense will take under advisement the GAO
recommendation that he direct an independent task force to conduct a
review of the program, either by the Secretary of the Air Force as GAO
recommends or through some other mechanism.
Detailed comments on the recommendations and the report are enclosed.
If you have any additional questions, my point of contact for this
report is Mr. Kevin Meiners, (703) 607-0455.
Signed by:
Letitia A. Long:
Deputy Under Secretary of Defense (Policy, Requirements & Resources):
Enclosure:
OSD Comments:
cc: USD(AT&L) USD(C) ASD(NII):
DDR&E GC, DoD DOT&E USecAF D, PA&E JCS/J8:
GAO DRAFT REPORT - DATED SEPTEMBER 4, 2003 GAO CODE 120177/GAO-04-48:
"DEFENSE ACQUISITIONS: Despite Program Restructuring, SBIRS High
Remains at Risk of Cost and Schedule Overruns":
OSD COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Secretary of the Air Force to reconvene the IRT or similar
independent task force with substantial program knowledge to provide an
assessment of the restructured program and concrete guidance for
addressing the program's underlying problems. Such a review should
include determining whether the:
* SBIRS High development schedule is executable within current cost and
schedule estimates in light of the recent HEO 1 delays and other risks
(such as software development);
* program design is stable and sufficient to meet performance
requirements;
* contractor's software development procedures and
practices have reached at least a CMMI level 3 in relation to the
Software Engineering Institute's standards;
* the right management mechanisms are in place to achieve intended
program objectives; and:
* pending requirements changes should be funded. (p. 23/GAO Draft
Report):
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Secretary of the Air Force to put in place a mechanism for
ensuring that the knowledge gained from the assessment is used to
determine whether further programmatic changes are needed to strengthen
oversight, adjust current cost and schedule estimates, modify contract
mechanisms, and address requirements changes. (p. 23/GAO Draft Report):
OSD RESPONSE TO BOTH RECOMMENDATIONS: Partially Concurs. The department
agrees that a thorough review of the SBIRS program is warranted, and
agrees that a comprehensive program assessment will be conducted. The
department also agrees that the results of the review will be used to
determine what programmatic changes are needed and to implement these
changes. Rather than following the specific recommendation to have the
Secretary of the Air Force reconvene an independent task force, the
Secretary of Defense will consider other approaches before a final
decision is made on assigning responsibilities for conducting the
review.
[End of section]
Appendix II: SBIRS High Performance in Mission Areas:
* Missile Warning: SBIRS High is expected to provide reliable,
unambiguous,[Footnote 27] timely, and accurate missile warning
information to the President of the United States, the Secretary of
Defense, Unified Combatant Commanders, and other users. This mission
includes both global and theater requirements to provide strategic and
theater ballistic missile warning in support of passive defense and
force posturing.
* Missile Defense: SBIRS High is expected to provide reliable,
accurate, and timely information to defensive systems. This mission
includes both strategic and theater functional requirements to enable
active missile defense and attack operations against hostile forces.
* Technical Intelligence: SBIRS High is expected to provide reliable,
accurate, and timely infrared target signature and threat performance
data to warfighters, the intelligence community, weapon system
developers, and other users. This data may be used for target
classification and identification templates and algorithm development
for SBIRS High operational missions. SBIRS High also monitors
activities and provides information to policy makers and other users on
observed military tactics, new foreign technology development, arms
control compliance, and proliferation activities.
* Battle-space Characterization: SBIRS High provides reliable,
accurate, and timely data to enhance situational awareness, non-
ballistic missile threat warning, decision support, battle damage
assessment and intelligence information (for land, sea, air, and space)
for the Unified Combatant Commanders, Joint Task Force Commanders, and
other users. Battle-space characterization applies the SBIRS High
product to the immediate need of the warfighters.
[End of section]
Appendix III: Key Events in the SBIRS High Program:
Date: 1994; September; Key events: * OSD issues the Space-Based Warning
Summer Study.
November; Key events: Date1995: * SBIRS is named an Air Force
lead program for acquisition reform.
Date: 1995; January; Key events: * U.S. Space Command SBIRS Capstone
Requirements Document is validated by the Joint Requirements Oversight
Council.
Date: February; Key events: Date: * SBIRS Single Acquisition Management
Plan is approved.
August; Key events: Date1996: * Air Force awards two pre-
engineering and manufacturing development contracts to Hughes and
Lockheed Martin teams.
Date: 1996; April; Key events: * Changes to the SBIRS Capstone
Requirements Document are validated by the Joint Requirements Oversight
Council.
Date: September; Key events: Date: * SBIRS System Threat Assessment
Report is validated.
Date: October; Key events: Date: * SBIRS is authorized to proceed to
milestone II.
Date1997: November; Key events: Date1997: * Air Force awards one
engineering and manufacturing development contract to Lockheed Martin.
Date: 1997; January; Key events: * Construction begins on the Mission
Control Station at Buckley Air Force Base, Colorado.
December; Key events: Date1998: * SBIRS High preliminary
design review is held.
Date: 1998; July; Key events: * SBIRS System Threat Assessment Report
is revalidated.
December; Key events: Date1999: * DOD removes $150 million
from the SBIRS High program to fund other DOD priorities and directs
the delay of the GEO launches by 2 years.
Date: 1999; May; Key events: * Based on the DOD directive, a joint
estimate team reviews the program to determine an attainable and
affordable program restructure.
Date: 2000; June; Key events: * SBIRS System Threat Assessment Report
is revalidated.
Date: 2001; August; Key events: * SBIRS critical design review is
held.
Date: October: December; Key events: Date: October: * SBIRS ground
Increment 1 is certified.
Key events: Date: * Secretary of the Air Force notifies Congress of the
Nunn-McCurdy breach.
October; Key events: Date2002: * SBIRS Low is transferred to
Missile Defense Agency.
Date: 2002; January; Key events: * SBIRS ORD is revalidated by the
Joint Requirements Oversight Council for the Nunn-McCurdy review.
Date: February; Key events: Date: * IRT report is issued identifying
the underlying causes for the cost growth that led to the Nunn-McCurdy
breach.
Date: May; Key events: Date: * SBIRS High Acquisition Decision
Memorandum is signed, certifying the program after the Nunn-McCurdy
breach.
Date: August: June; Key events: Date: August: * Revised SBIRS High
Single Acquisition Management Plan is approved.
Key events: Date: * Construction begins on the Mission Control Station
Backup at Schriever Air Force Base, Colorado.
Date: August; Key events: Date: * Revised SBIRS High contract with
Lockheed Martin goes into effect.
Date: September; Key events: Date: * SBIRS High Acquisition Program
Baseline (restructuring) is approved.
November; Key events: Date2003: * Interim Mission Control
Station Backup in Boulder, Colorado, is certified.
Date: 2003; January; Key events: * Air Force Space Command identifies
need for HEO 3 and possibly HEO 4.
Key events: Date: February: * DCMA reports HEO 1 schedule slip.
Key events: Date: * Air Force provides USD (AT&L) with SBIRS High
program assessment.
Date* Air Force provides USD (AT&L) with SBIRS High program
assessment.: February; Key events: DateKey events: * Assistant
Secretary of Defense for Command, Control, Communications, and
Intelligence issues memorandum to Air Force calling for another review
in November 2003.
[End of table]
Source: U.S. Air Force.
[End of section]
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Robert Levin (202) 512-4841 John Oppenheim (202) 512-3111:
Acknowledgments:
In addition to those listed above, Maricela Cherveny, Steve Martinez,
Karen A. Richey, Nancy Rothlisberger, Karen M. Sloan, Hai V. Tran, Dale
M. Yuge, and Randolph S. Zounes made key contributions to this report.
FOOTNOTES
[1] The detection programs DOD initiated were the Advanced Warning
System (early 1980s); the Boost Surveillance and Tracking System (late
1980s); the Follow-On Early Warning System (early 1990s); and the
Alert, Locate, and Report Missiles System (mid-1990s).
[2] The High component has elements in highly elliptical orbit and
geosynchronous earth orbit; the Low component has elements in low earth
orbit.
[3] U.S. General Accounting Office, Missile Defense: Alternate
Approaches to Space Tracking and Surveillance System Need to Be
Considered, GAO-03-597 (Washington, D.C.: May 23, 2003).
[4] 10 U.S.C. § 2433.
[5] An operating unit of the Lockheed Martin Corporation.
[6] A GEO satellite's revolution is synchronized with the earth's
rotation giving it a seemingly stationary position above a fixed point
on the equator. At an altitude of about 22,300 miles above the equator,
three or four strategically spaced satellites can view the entire globe
with the exception of the polar regions. HEO satellites, which linger
over a designated area of the earth, can provide polar coverage.
[7] Midwave infrared bands provide the below-the-horizon launch phase
and missile tracking. See-to-the-ground bands provide below-the-
horizon tracking of slow or static dim targets below 6.2 miles.
[8] Spiral development is an iterative process for developing defined
capabilities within each increment (that is, a desired capability is
identified, but the end-state requirements are not known at program
initiation). This process provides the opportunity for interaction
among the user, tester, and developer. The requirements are refined
through experimentation and risk management; there is continuous
feedback, and the user is provided the best possible capability within
the increment. The requirements for future increments depend on
feedback from users and technology maturation. Each increment may
include a number of spirals.
[9] The Secretary of Defense delegated this responsibility to the Under
Secretary of Defense for Acquisition, Technology, and Logistics.
[10] 10 U.S.C. § 2433. This unit cost reporting mechanism, which also
applies to procurement unit cost for procurement programs, originated
with the Nunn-McCurdy Amendment to the Department of Defense
Authorization Act, 1982. The amendment, as revised, was made permanent
law in the following year's authorization act. Known as Nunn-McCurdy
"breaches," program unit cost increases of 15 percent or more trigger a
requirement for detailed reporting to Congress about the program.
Increases of 25 percent or more also trigger the requirement for
Secretary of Defense certification.
[11] TSPR is a contract condition that obligates the prime contractor
to assume total responsibility for the integration of an entire weapon
system. This is to ensure that the government receives an integrated
system that meets the performance requirements as defined in the system
specifications.
[12] EVMS is a tool used by the program manager to monitor the
technical, schedule, and cost parameters of the contract.
[13] The CMMI rating standards, developed by the Software Engineering
Institute at Carnegie Mellon University, range from 1 through 5. A CMMI
rating of 1, called "performed," means that company's process is
unpredictable, poorly controlled, and reactive. A CMMI rating of 5
indicates that the company's process is at the "optimizing" level,
which focuses on continuous process improvement.
[14] U.S. General Accounting Office, Military Space Operations: Common
Problems and Their Effects on Satellite and Related Acquisitions, GAO-
03-825R (Washington, D.C.: June 2, 2003).
[15] While the requirements in the SBIRS High ORD have not changed, the
contractor has needed clarifications and refinements to understand what
certain requirements entailed. According to Air Force officials, most
of the changes earlier in the program can be attributed to weaknesses
in earlier program management processes under the TSPR model of program
management.
[16] Under the current restructuring, proposed program changes must be
designated as "urgent and compelling"--that is, extremely important to
mission needs and requiring near-term action to meet the need on time.
[17] The acquisition of additional HEO sensors comes as a result of
delays with the Space Tracking and Surveillance System. See GAO-03-597.
[18] According to the Senate Armed Services Committee, a delay in
acquiring GEO satellites 3 through 5 would (1) increase costs because
production lines will have to close and reopen and subcontractors will
have to be requalified, (2) increase technical risk due to a loss of
key personnel and subcontractor base, and (3) increase operational risk
due to the age of the current satellite constellation. See Senate
Report 108-46 accompanying S. 1050, National Defense Authorization Act
for Fiscal Year 2004, at 244-245 (May 13, 2003).
[19] U.S. General Accounting Office, Best Practices: Capturing Design
and Manufacturing Knowledge Early Improves Acquisition Outcomes, GAO-
02-701 (Washington, D.C.: July 15, 2002).
[20] GAO reviews of best practices have found that successful
commercial firms require a high level of knowledge at key junctures
during a product's development and use this knowledge to make informed
investment decisions. These firms place more importance on capturing
specific technology, design, and manufacturing knowledge than on
meeting milestones. Moreover, these firms identify and use specific
criteria to ensure that the program has sufficient knowledge to move
forward. For example, the release of 90 percent or more of the
engineering drawings indicates that the product design is stable and
meets performance requirements.
[21] Two other design problems encountered were associated with the
outer tiles of the spacecraft and the Common Gyro Reference Assembly.
[22] Our analysis was based on the earned value statistics from the
latest available cost performance report. The upper bound of the
estimate is a worst case scenario cost based on the contractor's cost
performance for that month.
[23] Signal processing software is responsible for collecting and
formatting infrared digital data which will be transmitted and further
processed at the ground station.
[24] Software reuse involves previously developed software that is to
be integrated with other new, modified or other reuse software.
[25] A "red" rating is issued for any current negative cost or schedule
variance that is greater than 10 percent.
[26] A CMMI 3, called "defined," means the company's process is
characterized for the organization and is defined.
[27] Unambiguous warning is a valid mission level requirement that, to
date, has been accomplished primarily through dual phenomenology and
human in-the-loop concepts of operations. SBIRS will contribute to but
will not, by itself, provide unambiguous warning.
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