Missile Defense
Actions Are Needed to Enhance Testing and Accountability Gao ID: GAO-04-409 April 23, 2004The Department of Defense (DOD) has treated ballistic missile defense as a priority since the mid-1980s and has invested tens of billions of dollars to research and develop such capabilities. In 2002 two key events transformed DOD's approach in this area: (1) the Secretary of Defense consolidated existing missile defense elements into a single acquisition program and placed them under the management of the Missile Defense Agency (MDA) and (2) the President directed MDA to begin fielding an initial configuration, or block, of missile defense capabilities in 2004. MDA estimates it will need $53 billion between fiscal years 2004 and 2009 to continue the development, fielding, and evolution of ballistic missile defenses. To fulfill a congressional mandate, GAO assessed the extent to which MDA achieved program goals in fiscal year 2003. While conducting this review, GAO also observed shortcomings in how MDA defines its goals.
MDA accomplished many activities in fiscal year 2003--such as software development, ground and flight testing, and the construction of facilities at Fort Greely, Alaska--leading up to the fielding of the initial block of the Ballistic Missile Defense System. During this time, however, MDA experienced schedule delays and testing setbacks, resulting in the fielding of fewer components than planned in the 2004-2005 time frame. For example, delays in interceptor development and delivery have caused flight tests (intercept attempts) of the Ground-based Midcourse Defense (GMD) element to slip over 10 months. In flight tests conducted during fiscal year 2003, MDA achieved a 50 percent success rate in intercepting target missiles. While MDA is increasing the operational realism of its developmental flight tests--e.g., employing an operational crew during its late 2003 ship-based intercept attempt--the GMD element has not been tested under unscripted, operationally realistic conditions. Therefore, MDA faces the challenge of demonstrating whether the capabilities being fielded, consisting primarily of the GMD element, will perform as intended when the system becomes operational in 2004. Finally, MDA's cost performance during fiscal year 2003 was mixed. The prime contractors of four system elements completed work at or near budgeted costs during this time, but prime contractors for two system elements overran budgeted costs by a total of about $380 million. GAO found that program goals do not serve as a reliable and complete baseline for accountability purposes and investment decision making because they can vary year to year, do not include all costs, and are based on assumptions about performance not explicitly stated. For example, between its budget requests for fiscal years 2004 and 2005, MDA revised its estimated cost for the first fielded block of missile defense capability. This first block is costing $1.12 billion more and consists of fewer fielded components than that planned a year earlier. In addition, MDA's acquisition reports for Congress do not include life-cycle costs, which normally provide explicit estimates for inventory procurement, military construction, operations, and maintenance. Finally, MDA does not explain some critical assumptions-- such as an enemy's type and number of decoys--underlying its performance goals. As a result, decision makers in DOD and Congress do not have a full understanding of the overall cost of developing and fielding the Ballistic Missile Defense System and what the system's true capabilities will be.
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-04-409, Missile Defense: Actions Are Needed to Enhance Testing and Accountability
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[Note: Footnotes in the body of this report are numbered consecutively
from 1-27. Footnotes in the appendices are numbered consecutively from
1-50.]
Report to Congressional Committees:
April 2004:
MISSILE DEFENSE:
Actions Are Needed to Enhance Testing and Accountability:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-409]:
GAO Highlights:
Highlights of GAO-04-409, a report to congressional committees
Why GAO Did This Study:
The Department of Defense (DOD) has treated ballistic missile defense
as a priority since the mid-1980s and has invested tens of billions of
dollars to research and develop such capabilities. In 2002 two key
events transformed DOD‘s approach in this area: (1) the Secretary of
Defense consolidated existing missile defense elements into a single
acquisition program and placed them under the management of the
Missile Defense Agency (MDA) and (2) the President directed MDA to
begin fielding an initial configuration, or block, of missile defense
capabilities in 2004. MDA estimates it will need $53 billion between
fiscal years 2004 and 2009 to continue the development, fielding, and
evolution of ballistic missile defenses.
To fulfill a congressional mandate, GAO assessed the extent to which
MDA achieved program goals in fiscal year 2003. While conducting this
review, GAO also observed shortcomings in how MDA defines its goals.
What GAO Found:
MDA accomplished many activities in fiscal year 2003”such as software
development, ground and flight testing, and the construction of
facilities at Fort Greely, Alaska”leading up to the fielding of the
initial block of the Ballistic Missile Defense System. During this
time, however, MDA experienced schedule delays and testing setbacks,
resulting in the fielding of fewer components than planned in the 2004-
2005 time frame. For example, delays in interceptor development and
delivery have caused flight tests (intercept attempts) of the Ground-
based Midcourse Defense (GMD) element to slip over 10 months. In flight
tests conducted during fiscal year 2003, MDA achieved a 50 percent success rate in intercepting target missiles. While MDA is increasing the operational realism of its developmental flight tests”e.g., employing an operational crew during its late 2003 ship-based intercept attempt”the GMD element has not been tested under unscripted, operationally realistic conditions. Therefore, MDA faces the challenge of demonstrating whether the capabilities being fielded, consisting primarily of the GMD element, will perform as intended when the system becomes operational in 2004. Finally, MDA‘s cost performance during fiscal year 2003 was mixed. The prime contractors of four system elements completed work at or near budgeted costs during this time, but prime contractors for two system elements overran budgeted costs by a total of about $380 million.
GAO found that program goals do not serve as a reliable and complete
baseline for accountability purposes and investment decision making
because they can vary year to year, do not include all costs, and are
based on assumptions about performance not explicitly stated. For
example, between its budget requests for fiscal years 2004 and 2005,
MDA revised its estimated cost for the first fielded block of missile
defense capability. This first block is costing $1.12 billion more and
consists of fewer fielded components than that planned a year earlier.
In addition, MDA‘s acquisition reports for Congress do not include
life-cycle costs, which normally provide explicit estimates for
inventory procurement, military construction, operations, and
maintenance. Finally, MDA does not explain some critical assumptions”
such as an enemy‘s type and number of decoys”underlying its
performance goals. As a result, decision makers in DOD and Congress do
not have a full understanding of the overall cost of developing and
fielding the Ballistic Missile Defense System and what the system‘s
true capabilities will be.
Elements of MDA‘s Ballistic Missile Defense System:
[See PDF for image]
[End of figure]
What GAO Recommends:
GAO recommends that DOD carry out independent, operationally realistic
testing of each block being fielded. GAO also recommends that MDA set
cost, schedule, and performance baselines for each block being
fielded. DOD agreed to establish these baselines but stated that
formal operational testing is not required before entry into full rate
production.
www.gao.gov/cgi-bin/getrpt?GAO-04-409.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robert E. Levin at (202)
512-4841 or levinr@gao.gov.
[End of section]
Contents:
Letter:
Scope and Methodology:
Results in Brief:
Background:
Assessment of Progress and Key Risks:
Observations on the Usefulness of MDA Program Goals for Conducting
Oversight:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Comments from the Department of Defense:
Appendix II: Summary:
Appendix II: Aegis Ballistic Missile Defense:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Progress Assessment: Performance:
Progress Assessment: Cost:
Program Risks:
Appendix III: Summary:
Appendix III: Airborne Laser:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Progress Assessment: Performance:
Progress Assessment: Cost:
Program Risks:
Appendix IV: Summary:
Appendix IV: Command, Control, Battle Management, and Communications:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Progress Assessment: Performance:
Progress Assessment: Cost:
Program Risks:
Appendix V: Summary:
Appendix V: Ground-based Midcourse Defense:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Progress Assessment: Performance:
Progress Assessment: Cost:
Program Risks:
Appendix VI: Summary:
Appendix VI: Kinetic Energy Interceptors:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Program Assessment: Performance:
Program Assessment: Cost:
Program Risks:
Conclusion:
Recommendation for Executive Action:
Appendix VII: Summary:
Appendix VII: Space Tracking and Surveillance System:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Progress Assessment: Performance:
Progress Assessment: Cost:
Program Risks:
Appendix VIII: Summary:
Appendix VIII: Theater High Altitude Area Defense:
Background: Element Description:
Background: History:
Background: Developmental Phases:
Progress Assessment: Schedule:
Progress Assessment: Performance:
Program Assessment: Cost:
Program Risks:
Appendix IX: Fiscal Year 2002 Assessment:
Appendix X: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: BMDS Elements:
Table 2: MDA Block 2004 Defensive Capability Goals:
Table 3: BMDS-wide Block 2004 Program Goals:
Table 4: GMD-Related Block 2004 Program Goals:
Table 5: Aegis BMD-Related Block 2004 Program Goals:
Table 6: C2BMC-Related Block 2004 Program Goals:
Table 7: Prime Contractor Cost and Schedule Performance in Fiscal Year
2003:
Table 8: BMDS Performance Metrics:
Table 9: Planned Aegis Ship Availability for the BMD Mission (Block
2004):
Table 10: Missile-Related Activities, Fiscal Year 2003:
Table 11: SM-3 Missiles Delivered, Expended, and in Inventory:
Table 12: Aegis BMD Ground Tests:
Table 13: Aegis BMD Flight Tests:
Table 14: Aegis BMD Planned Cost:
Table 15: ABL Program Hardware Deliveries, Fiscal Year 2003:
Table 16: ABL Program Test Events, Fiscal Year 2003:
Table 17: ABL Planned Cost:
Table 18: Block 2004 C2BMC Activities--Develop, Test, Verify Software:
Table 19: Block 2004 C2BMC Activities--Communications and Integration:
Table 20: C2BMC Planned Cost:
Table 21: Progress of Major GMD Construction Projects:
Table 22: GMD Flight and Booster Tests, Fiscal Year 2003:
Table 23: Block 2004 Flight Test Program Leading to IDO--Schedule
Delays:
Table 24: GMD Planned Costs:
Table 25: Cost of Block 2004 GMD Defensive Capability:
Table 26: KEI Planned Cost:
Table 27: Block 2006 STSS Activities--Testing Hardware Components:
Table 28: Block 2006 STSS Activities--Software Development:
Table 29: Planned Annual Cost:
Table 30: Block 2004 THAAD Activities--Contract Alignment:
Table 31: Block 2004 THAAD Activities--Component Design Reviews:
Table 32: Block 2004 THAAD Activities--Element Design Reviews:
Table 33: Block 2004 THAAD Activities--Ground Testing:
Table 34: Block 2004 THAAD Activities--Flight Testing:
Table 35: THAAD Planned Cost:
Figures:
Figure 1: Phases of a Ballistic Missile's Trajectory:
Figure 2: Fiscal Year 2003 Cost Performance (SM-3 Contract Only):
Figure 3: Fiscal Year 2003 Schedule Performance (SM-3 Contract Only):
Figure 4: Fiscal Year 2003 Cost Performance:
Figure 5: Fiscal Year 2003 Schedule Performance:
Figure 6: Fiscal Year 2003 Cost and Schedule Performance:
Figure 7: GMD Element:
Figure 8: Fiscal Year 2003 Cost and Schedule Performance:
Figure 9: Fiscal Year 2003 Cost Performance:
Figure 10: Fiscal Year 2003 Schedule Performance:
Figure 11: Fiscal Year 2003 Cost and Schedule Performance:
Abbreviations:
ABL: Airborne Laser:
Aegis BMD: Aegis Ballistic Missile Defense:
AFB: Air Force Base:
ALI: Aegis LEAP Intercept:
ARS: Active Ranger System:
BC/FC: Beam Control/Fire Control:
BILL: Beacon Illuminator Laser:
BMC2: Battle Management, Command and Control:
BMDS: Ballistic Missile Defense System:
BV: Booster Validation:
C2BMC: Command, Control, Battle Management, and Communications:
CDR: Critical Design Review:
COIL: Chemical Oxygen-Iodine Laser:
CONOPS: Concept of Operations:
CONUS: Continental United States:
CSD: Chemical Systems Division:
CTF: Control Test Flight:
DACS: Divert and Attitude Control System:
DOD: Department of Defense:
DOT&E: Director, Operational Test and Evaluation:
DRR: Design Readiness Review:
EKV: Exoatmospheric Kill Vehicle:
EMD: Engineering and Manufacturing Development:
EVMS: Earned Value Management System:
FM: Flight Mission:
FT: Flight Test:
FY: Fiscal Year:
GAO: General Accounting Office:
GBI: Ground Based Interceptor:
GMD: Ground-based Midcourse Defense:
ICBM: Intercontinental Ballistic Missile:
IDO: Initial Defensive Operations:
IFICS: In-Flight Interceptor Communications System:
IFT: Integrated Flight Test:
IMP: Integrated Master Plan:
IMS: Integrated Master Schedule:
IOC: Initial Operational Capability:
JNIC: Joint National Integration Center:
KEI: Kinetic Energy Interceptors:
LEAP: Lightweight Exoatmospheric Projectile:
LRIP: Low-Rate Initial Production:
MDA: Missile Defense Agency:
MDNT: Missile Defense National Team:
NFIRE: Near Field Infrared Experiment:
NMD: National Missile Defense:
OSC: Orbital Sciences Corporation:
OTA: Other Transaction Agreement:
PD&RR: Program Definition and Risk Reduction:
PDR: Preliminary Design Review:
PMRF: Pacific Missile Range Facility:
POET: Phase One Engineering Team:
RDT&E: Research, Development, Testing, and Evaluation:
SAR: Selected Acquisition Report:
SBIRS: Space-Based Infrared System:
SBX: Sea-Based X-band Radar:
SCF: Seeker Characterization Flight:
SDACS: Solid Divert and Attitude Control System:
SDD: System Development and Demonstration:
SIL: System Integration Laboratory:
SM: Standard Missile:
STSS: Space Tracking and Surveillance System:
TILL: Target Illuminator Laser:
THAAD: Theater High Altitude Area Defense:
TPM: Technical Performance Measure:
USNORTHCOM: U.S. Northern Command:
USPACOM: U.S. Pacific Command:
USSTRATCOM: U.S. Strategic Command:
WSMR: White Sands Missle Range;
Letter April 23, 2004:
Congressional Committees:
The Department of Defense (DOD) has been making significant investments
in the development of ballistic missile defenses for decades. From
1985, when the Strategic Defense Initiative was launched, through 2003,
DOD spent tens of billions of dollars to research and develop these
capabilities. It estimates that it will need $53 billion between fiscal
years 2004 and 2009 to continue the development, fielding, and
evolution of ballistic missile defenses.
During the past 2 years, DOD significantly transformed the approach it
takes in acquiring ballistic missile defenses. In January 2002, the
Secretary of Defense refocused the ballistic missile defense program
into a broad-based research and development effort managed by the
Missile Defense Agency (MDA). The Secretary granted MDA flexibility to
employ a "capability-based," evolutionary approach for the development
of these defenses. Under this new approach, MDA defines, develops, and
fields operational capabilities--in 2-year blocks--of a single,
multilayered, overarching system referred to as the Ballistic Missile
Defense System (BMDS). The system has no fixed design or final
architecture. The Secretary of Defense also gave MDA management
responsibility over the existing ballistic missile defense programs
already under development by the military services. These programs,
which were previously recognized by DOD as major defense acquisition
programs, are now considered "elements" of the BMDS. (See table 1 for a
description of BMDS elements under development.):
In December 2002, the President directed DOD to begin fielding an
initial set of missile defense capabilities in 2004. In accordance with
the President's direction, MDA is readying a defensive capability for
operation, called Initial Defensive Operations (IDO), by September 30,
2004. IDO is expected to provide the United States protection against
limited long-range ballistic missile attacks from Northeast Asia. MDA
will enhance this capability to complete the first increment of the
BMDS--known as the Block 2004 defensive capability--by the end of
December 2005. This capability is expected to provide additional
protection from ballistic missiles launched from the Middle East.
The National Defense Authorization Act for Fiscal Year 2002[Footnote 1]
directed DOD to establish schedule, testing, performance, and cost
goals for its ballistic missile defense programs for the years covered
by the Future Years Defense Plan.[Footnote 2] The act also directed us
to assess, at the conclusion of each of fiscal years 2002 and 2003, the
extent to which MDA achieved the goals it established.[Footnote 3]
Because the agency had not established goals in fiscal year 2002, we
were unable to assess its progress for that year.[Footnote 4] However,
MDA did establish schedule, testing, performance, and cost goals for
its Block 2004 program and submitted them to Congress in February 2003
with its fiscal year 2004 budget and in April 2003 with its Selected
Acquisition Report for the BMDS.[Footnote 5] The goals describe the
composition of the block configuration under development; provide the
costs and schedule associated with developing, testing, and fielding
the Block 2004 BMDS; and summarize the performance capabilities that
MDA expects to achieve with the Block 2004 defensive capability.
To fulfill the congressional mandate in the Authorization Act, we
addressed the following question in this report: To what extent has MDA
and its elements progressed in achieving stated goals through their
fiscal year 2003 activities? While conducting this review, we observed
shortcomings in how MDA defines its Block 2004 program goals. Our
report includes these observations and our recommendations for
improvement.
Scope and Methodology:
We assessed MDA's progress made during fiscal year 2003 toward its
Block 2004 program goals by reviewing the progress of individual BMDS
elements, because MDA program goals are ultimately derived from
element-level efforts. We selected seven elements for our review on the
basis of congressional interest and because they account for about 70
to 75 percent of the cumulative research and development funds MDA
budgeted for fiscal years 2002 through 2009. We compared each element's
actual cost, completed activities, demonstrated performance, and test
results with their internal fiscal year 2003 cost, schedule,
performance, and testing goals.
To assess progress toward program schedule goals, we examined, for each
element, prime contractor Cost Performance Reports, the Defense
Contract Management Agency's analyses of these reports, System Element
Reviews, and other agency documents to determine whether key activities
scheduled for the fiscal year were accomplished as planned. We also
developed a data collection instrument to gather additional, detailed
information on completed program activities, including tests, design
reviews, prime contracts, and estimates of element performance.
Because MDA allocates a large percentage of its budget to fund prime
contractors that develop system elements, and because MDA's cost goal
did not apply to fiscal year 2003 expenditures, we limited our review
of cost-related matters to assessments of prime contractor cost
performance. To make these assessments, we applied earned value
analysis techniques to data captured in contractor Cost Performance
Reports. We compared the cost of work completed with the budgeted costs
for scheduled work for the fiscal year 2003 period. Results were
presented in graphical form to determine fiscal year 2003 trends. We
also used data from the reports to project the likely costs at the
completion of prime contracts through established earned value
formulas.
We also analyzed data related to system effectiveness provided by MDA,
focusing on the Ground-based Midcourse Defense and Aegis Ballistic
Missile Defense elements--the weapon components of the Block 2004
defensive capability. We supplemented this information by holding
discussions with, and attending overview briefings presented by,
various program office officials. Furthermore, we interviewed officials
within DOD's office of the Director, Operational Test and Evaluation,
to learn more about the adequacy of element test programs and the
operational capability demonstrated by them to date.
As we reviewed documents and held discussions with agency officials, we
looked for evidence of key cost, schedule, and technical risks. We
identified key risks as those for which we found evidence of problems
or significant uncertainties that could negatively affect MDA's ability
to develop, demonstrate, and field a militarily useful capability
within schedule and cost estimates.
During our review, we observed shortcomings in how MDA defines its
goals that could make oversight by external decision makers more
difficult. To pursue this matter, we examined how MDA reported its
goals by reviewing MDA budget submission statements that were submitted
for fiscal years 2004 and 2005. In addition, to gain insight into the
formulation of the goals, we held numerous discussions with MDA
officials and reviewed acquisition documents such as MDA's Integrated
Master Plan, Integrated Program Plan, and System Integration Strategy.
Our work was primarily performed at MDA headquarters, Arlington,
Virginia; Aegis Ballistic Missile Defense Program Office, Arlington,
Virginia; Airborne Laser Program Office, Albuquerque, New Mexico;
Command, Control, Battle Management, and Communications Program Office,
Arlington, Virginia; Ground-based Midcourse Defense Program Office,
Arlington, Virginia; Kinetic Energy Interceptors Program Office,
Arlington, Virginia; Space Tracking and Surveillance System Program
Office, Los Angeles, California; and the Theater High Altitude Area
Defense Project Office, Huntsville, Alabama. We also visited the office
of the Director, Operational Test and Evaluation, Arlington, Virginia.
We conducted our review from June 2003 through April 2004 in accordance
with generally accepted government auditing standards.
Results in Brief:
MDA completed many activities in fiscal year 2003--such as software
development, ground and flight testing, and facility construction at
various BMDS sites--leading to the planned initial fielding of the BMDS
by September 2004. During this time, however, MDA experienced
significant schedule delays, conducted little testing of the integrated
BMDS, and incurred cost overruns. Also, as a result of testing
shortfalls, the predicted effectiveness of the Block 2004 system will
be largely unproven. Furthermore, between its budget requests for
fiscal years 2004 and 2005, MDA revised the goals for its first fielded
block of missile defense capability by increasing costs by $1.12
billion and decreasing the number of fielded components.
Our overall assessment of MDA's progress in fiscal year 2003 toward
meeting its schedule, testing, performance, and cost goals is discussed
below. Key risks associated with the development and fielding of system
elements are summarized as well.
* Schedule and testing. Primary system elements that make up the
fielded Block 2004 defensive capability--Ground-based Midcourse
Defense (GMD) and Aegis Ballistic Missile Defense (BMD)--are executing
aggressive schedules to meet the fielding dates prescribed under the
President's directive. These elements completed a number of activities
that MDA expects will lead to the achievement of its program goals. For
example, construction activities for facilities at Fort Greely, Alaska,
and other GMD sites were completed on or ahead of schedule. However,
based on progress made in fiscal year 2003, the actual defensive system
to be fielded by September 2004 will have fewer components than
planned. For example, we found that MDA will not meet its upper-end
goal of fielding 10 GMD interceptors by September 2004. In addition,
the agency will be hard-pressed to achieve its goal of producing and
delivering an inventory of 20 GMD interceptors by December 2005,
because GMD contractors have yet to meet the planned production rate.
MDA completed many activities toward the completion of the BMDS Test
Bed, the venue in which system elements are integrated and tested.
However, some element-level testing did not progress as planned. During
fiscal year 2003, MDA achieved a 50-percent success rate on hit-to-kill
intercepts--one success out of two attempts for each of the GMD and
Aegis BMD elements. Also during this time period, delays in GMD
interceptor development and delivery caused flight tests (intercept
attempts) leading up to IDO to slip 10 months or more. Furthermore,
unanticipated problems in system-integration efforts caused key
Airborne Laser (ABL) demonstration events to slip over a year.
* Performance. MDA predicts with confidence that the September 2004
defensive capability will provide protection of the United States
against limited attacks from Northeast Asia. However, testing in 2003
did little to demonstrate the predicted effectiveness of the system's
capability to defeat ballistic missiles as an integrated system. None
of the components of the defensive capability have yet to be flight
tested in their fielded configuration (i.e., using production-
representative hardware).
* Cost. We assessed prime contractor cost performance for six BMDS
elements funded under the Block 2004 program. Four of the six elements
completed fiscal year 2003 work at or near budgeted costs. However,
work on ABL and GMD cost much more than budgeted. The ABL contractor
overran budgeted costs by $242 million and the GMD contractor by $138
million.
* Key risks. Our analysis of fiscal year 2003 activities indicates
there are key risks associated with the development and fielding of
elements of the Block 2004 program. For example, significant
uncertainty remains about how much more time and money are required to
complete ABL integration activities and whether ABL can be proven to
work effectively. MDA recently announced that a new contract structure
is being implemented to more efficiently demonstrate the technology.
Also, as a result of testing shortfalls and the limited time available
to test the BMDS being fielded, system effectiveness will be largely
unproven when the initial capability goes on alert at the end of
September 2004. Delays in flight testing presented MDA with limited
opportunities to demonstrate the operation of hardware and software
being fielded and to resolve any problems that may be uncovered during
flight testing before September 2004. In addition, although MDA is
attempting to make flight tests as realistic as possible, these tests
will not be conducted under the unscripted conditions that characterize
operational testing. Independent, operational testing through an
operational test agent outside of the program being developed, and
through the input of DOD's independent operational test and evaluation
office, is intended to demonstrate objectively how capable a system
truly is and whether the warfighter can trust it to be suitable and
effective.
During our review, we observed shortcomings in how MDA defines its
Block 2004 program goals. As discussed below, program goals do not
serve as a reliable and complete baseline for oversight and investment
decision-making because they can vary year-to-year, do not include
life-cycle costs, and are based on assumptions about performance not
explicitly stated.
* Variable program goals. MDA's methodology for establishing program
goals--both cost and block content--allows for variations from one year
to the next. MDA recognized that the first BMDS block will cost more
and deliver fewer fielded components than originally planned. As
reported in DOD budget submissions for fiscal years 2004 and 2005, the
Block 2004 cost goal increased from $6.24 billion to $7.36 billion, the
Aegis BMD interceptor inventory decreased from 20 to 9, the number of
Aegis BMD ships upgraded for the long-range surveillance and tracking
mission decreased from 15 to 10, and the potential operational use of
ABL and the sea-based radar[Footnote 6] as sensors is no longer part of
Block 2004. The variability weakens accountability because the goals
cannot serve as a reliable baseline for measuring cost, schedule, and
performance status over time.
* Reporting life-cycle costs. DOD categorizes the BMDS as a Research,
Development, Testing, and Evaluation (RDT&E)-only program costing $53
billion between fiscal years 2004 and 2009. Accordingly, the BMDS
Selected Acquisition Report does not specify costs for procurement,
military construction, and operations and maintenance that are part of
a full life-cycle cost estimate. Given the imminent fielding of a
missile defense capability, procurement of inventory, and funding of
operation and sustainment costs, this Selected Acquisition Report
provides an incomplete cost picture to decision makers in DOD and
Congress. MDA officials told us that they are working to include life-
cycle cost estimates in future Selected Acquisition Reports for the
BMDS.
* Assumptions about performance. BMDS performance goals, such as the
probability of engagement success, are based on assumptions regarding
the system's capability against certain threats under various
engagement conditions. Neither the engagement conditions nor critical
assumptions about the threat--such as the enemy's type and number of
decoys--used in establishing these goals are explicitly stated as part
of MDA's program goals. Without these implicit assumptions being
explained, the operational capability of the fielded system is
difficult to fully understand.
To more independently test the BMDS and give the warfighter greater
confidence that the system will perform as intended, we are
recommending that independent, operationally realistic testing and
evaluation be conducted for each BMDS block configuration being
fielded. Also, to enhance accountability and the ability of decision
makers in Congress and DOD to provide oversight, we are recommending
that cost, schedule, and performance baselines, including full life-
cycle costs, be established for each block configuration being fielded
and that year-to-year variations in baselines be explained. DOD
concurred with our recommendations regarding cost, schedule, and
performance baselines but non-concurred with our recommendations for
operational testing.
In commenting on the draft report, DOD stated that there is no
statutory requirement to conduct operational testing of developmental
items and that it will conduct formal operational test and evaluation
when an element of the BMDS matures and transitions from MDA to a
military service and before entry into full-rate production. We retain
our recommendation that DOD conduct independent, operational testing of
block configurations being fielded. Given that inventory is being
procured and the system is being fielded, decision makers considering
further investments in the system should have an independent, objective
assessment of whether the fielded system can be trusted to perform as
intended.
Background:
MDA has the mission to develop and field a Ballistic Missile Defense
System capable of defeating ballistic missiles of all ranges in all
phases of flight. In particular, the system is intended to defend the
U.S. homeland against intercontinental ballistic missile
(ICBM)[Footnote 7] attacks and to protect deployed U.S. armed forces,
which are operating in or near hostile territories, against short-and
medium-range ballistic missiles. Additionally, the BMDS is to evolve
into a system that is capable of defending friends and allies of the
United States. Figure 1 depicts the three phases of a missile's flight
during which the BMDS is designed to engage it.
Figure 1: Phases of a Ballistic Missile's Trajectory:
[See PDF for image]
[End of figure]
Much of the operational capability of the Block 2004 BMDS results from
capabilities developed in legacy programs. These include the GMD, Aegis
BMD, and Patriot elements. Existing space-based sensors would also be
available, including Defense Support Program satellites, for the early
warning of missile launches. The Block 2004 BMDS can be viewed as a
collection of semi-autonomous missile defense systems interconnected
and coordinated through the Command, Control, Battle Management, and
Communications (C2BMC) element. Functional pieces of system elements,
such as radars or interceptors, are referred to as "components.":
Block 2004 program goals involve developmental activities of five MDA
elements: Aegis BMD, ABL, C2BMC, GMD, and Theater High Altitude Area
Defense (THAAD).[Footnote 8] As indicated above, three of these five
elements--GMD, Aegis BMD, and C2BMC--comprise the Block 2004 defensive
capability that is currently being fielded. MDA is also funding the
development of two other elements--Space Tracking and Surveillance
System (STSS) and Kinetic Energy Interceptors (KEI)--but these elements
are part of future blocks of the MDA missile defense program.
Table 1 provides a brief description of these seven elements.[Footnote
9] More complete descriptions of these elements are provided in the
appendixes of this report.
Table 1: BMDS Elements:
Element: Aegis Ballistic Missile Defense;
Missile defense role: A ship- based element designed to destroy short-
and medium-range ballistic missiles during the midcourse phase of
flight. The element's mission is to defend deployed U.S. forces and to
perform early tracking of long- range ballistic missiles in support of
the GMD mission. It is planned to be operational in Block 2004.
Element: Airborne Laser;
Missile defense role: An air-based element designed to destroy all
classes of ballistic missiles during the boost phase of flight.
Element: Command, Control, Battle Management, and Communications;
Missile defense role: MDA plans to make this the integrating and
controlling element of the BMDS. It is planned to be operational in
Block 2004.
Element: Ground-based Midcourse Defense;
Missile defense role: A ground-based element designed to destroy long-
range ballistic missiles during the midcourse phase of flight. Its
mission is to defend the U.S. homeland when it becomes operational in
Block 2004.
Element: Kinetic Energy Interceptors;
Missile defense role: A land- based element designed to destroy long-
range ballistic missiles during the boost and ascent phases of flight.
Its capability is expected to be available in Block 2010.
Element: Space Tracking and Surveillance System;
Missile defense role: Envisioned as a constellation of satellites for
missile warning and tracking, STSS satellites are intended to support
the missile defense mission. Any real operational capability of next-
generation satellites will not be available until the next decade.
Element: Theater High Altitude Area Defense;
Missile defense role: A ground-based element designed to destroy short-
and medium-range ballistic missiles during the late-midcourse and
terminal phases of flight. Its mission is to defend deployed U.S.
forces and population centers. It is planned to be operational in
Block 2008.
Sources: MDA (data); GAO (presentation).
[End of table]
During Block 2006, MDA will focus on fielding additional hardware and
enhancing the performance of the BMDS. For example, MDA plans to field
additional GMD interceptors at Fort Greely, add new radars that can be
deployed overseas, and incorporate enhanced battle management
capabilities into the C2BMC element.
For Blocks 2008 and 2010, MDA plans to augment the Block 2006
capability with boost phase capabilities being developed in the ABL and
KEI programs. Additionally, MDA plans to field the THAAD element for
protecting deployed U.S. forces against short-and medium-range
ballistic missiles.
According to MDA officials, the integrated BMDS offers more than simply
the deployment of individual, autonomous elements. A synergy results
from information sharing and enhanced command and control, yielding a
layered defense with multiple shot opportunities. This preserves
interceptor inventory and increases the opportunities to engage
ballistic missiles.
MDA Block 2004 Program Goals:
MDA developed overarching goals for the development and fielding of the
Block 2004 BMDS.[Footnote 10] The goals describe the composition of
Block 2004; provide the costs and schedule associated with its
development, testing, and fielding; and summarize its performance
capabilities. As part of MDA's Statement of Goals, MDA also identified
and scheduled a number of events that must be completed by individual
program elements in 2004 and 2005 if the goals are to be achieved.
At the core of MDA's Block 2004 program goals is the continued
development and testing of ABL, Aegis BMD, C2BMC, GMD, and THAAD. These
goals are referred to as "Block 2004 Development Goals" and identify
the developmental areas MDA is funding during the Block 2004 time
frame, that is, during calendar years 2004 and 2005. MDA also
established a complementary set of goals--referred to as Block 2004
"Operational Alert Configuration"Goals[Footnote 11]--in response to
the President's December 2002 direction to begin fielding a ballistic
missile defense capability. These fielding goals build directly upon
the development goals and identify the operational missile defense
capability that MDA expects to deliver by the end of December 2005.
The Block 2004 cost goal covers budgeted costs for development and
fielding during calendar years 2004-2005. When MDA submitted its fiscal
year 2004 budget in February 2003, MDA declared that its Block 2004
cost goal was $6.24 billion. However, MDA recently revised its Block
2004 cost goal with the submission of its fiscal year 2005 budget in
February 2004. The revision reflects updated developmental costs and an
update to the additional costs associated with the initial fielding.
MDA's Block 2004 cost goal is now $7.36 billion.
The missile defense capability of Block 2004 is primarily one for
defending the United States against long-range ballistic missile
attacks. As summarized in table 2, it is built around the GMD element,
augmented by Aegis BMD radars, and integrated by the C2BMC element. The
Block 2004 BMDS also contains the Patriot PAC-3 element for point
defense of deployed U.S. armed forces against short-and medium-range
ballistic missiles. Because MDA no longer has funding or management
responsibility over Patriot, an assessment of progress made by the Army
in fiscal year 2003 toward delivering the listed capability was not
addressed in this review. Patriot-specific goals are, therefore, not
listed in the table.
Table 2: MDA Block 2004 Defensive Capability Goals:
BMDS element: GMD; IDO[A] (Sept. 30, 2004):
* Up to 10 interceptors;
* Upgraded Cobra Dane radar;
* 1 upgraded early warning radar;
* Fire control nodes;
Block 2004 (Dec. 31, 2005):
* 20 interceptors;
* Upgraded Cobra Dane radar;
* 2 upgraded early warning radars;
* Fire control nodes;
Functionality: Defend the U.S. homeland against ICBM attacks.
BMDS element: Aegis BMD; IDO[A] (Sept. 30, 2004):
* 5 missiles[B];
* 3 Aegis destroyers (long-range surveillance and tracking only);
* 1 Aegis cruiser;
Block 2004 (Dec. 31, 2005):
* 9 missiles;
* 10 Aegis destroyers (long-range surveillance & tracking only);
* 3 Aegis cruisers;
Functionality: Sea-based defense against short-and medium- range
ballistic missiles; early tracking of ICBMs to support the GMD mission.
BMDS element: C2BMC; IDO[A] (Sept. 30, 2004):
* Software Build 4.3;
* Suites (command centers) and supporting hardware at various
locations;
Block 2004 (Dec. 31, 2005):
* Software Build 4.5;
* Suites (command centers) and supporting hardware at various
locations;
Functionality: Integrating and controlling element of the BMDS.
Sources: MDA (data); GAO (presentation).
[A] Defensive capability goals associated with IDO are not formally
documented. The goals listed were derived from element-level documents
and from discussions with MDA officials.
[B] An intercept capability by Aegis BMD is not part of the September
2004 IDO.
[End of table]
Assessment of Progress and Key Risks:
In this section, we summarize our assessment of MDA's progress in
fiscal year 2003 toward achieving Block 2004 program goals. Key risks
associated with developing and fielding system elements are summarized,
as well. Detailed evaluations of element progress and risks are given
in the appendixes of this report.
Schedule and Testing Assessment: Many Activities Completed, but Slips
Have Occurred:
MDA identified a number of events that must be completed to meet Block
2004 program goals. These activities, which are part of MDA's program
goals, are ultimately derived from element-level efforts and, in
general, have completion dates in calendar years 2004 or 2005 to
coincide with the start of defensive operations. Progress made toward
achieving Block 2004 goals, relative to these defining events, is
summarized in tables 3 through 6.
Table 3: BMDS-wide Block 2004 Program Goals:
Event: Establish Block 2004 BMDS Configuration (Required date: 2Q FY
2003[A]);
Progress assessment: As part of its block planning process, MDA defines
the BMDS capabilities that can be realistically promised for delivery
within the established block schedule and budget. The design of block
capabilities follows an iterative approach under which a number of
possible block alternatives--candidate BMDS capabilities that satisfy
specific objectives and goals--are developed and assessed. This event
was accomplished in fiscal year 2003 with the delivery of the "Block
2004 Configuration Definition" and Version 1.6 of the Block 2004
architecture.
Event: Stand up Block 2004 BMDS Test Bed (Expected date: 4Q FY 2004);
Progress assessment: MDA made significant progress toward the
completion of the BMDS Test Bed, the venue in which system elements
are integrated and tested. Many of the GMD activities completed in
fiscal year 2003 for the development of the operational BMDS also
pertain to the construction of Test Bed infrastructure at various GMD
sites. The largest construction effort is at Fort Greely, where
missile silos and supporting facilities are being built. All
construction activities for Block 2004 are on, or ahead of, schedule.
Event: Complete verification testing (Expected date: 4Q FY 2005);
Progress assessment: MDA intends to verify that all elements and
components of the Block 2004 architecture have been sufficiently
tested. Although GMD and Aegis BMD each conducted two flight tests
during fiscal year 2003--each achieved one intercept out of two
attempts--element-level testing did not progress as planned. GMD flight
tests (intercept attempts) leading up to IDO have slipped 10 months,
largely a consequence of delays in interceptor development and
delivery. Accordingly, the test schedule leading up to the September
2004 IDO has been severely compressed, limiting MDA's opportunity to
characterize GMD's performance prior to the initial fielding.
Sources: MDA (data); GAO (presentation).
Note: FY = fiscal year.
[A] We use the notation "2Q FY 2003" to mean the second quarter of
fiscal year 2003 and an identical format for other time periods.
[End of table]
Table 4: GMD-Related Block 2004 Program Goals:
Event: Complete 1st Ground Based Interceptor (GBI) installation in
Alaska and California (Expected date: 4Q FY 2004);
Progress assessment: The GMD program had been working to deliver and
install up to 10 interceptors at Fort. Greely, Alaska, and Vandenberg
Air Force Base, California, for the September 2004 defensive
capability. Many site preparation activities have been accomplished,
including the construction of facilities and interceptor silos at Fort
Greely. However, as highlighted in the GMD appendix, we found that MDA
will not be able to field its upper-end goal of 10 GMD interceptors by
September 2004. Rather, MDA expects to field 5 interceptors by
September 2004 and complete the goal of 10 interceptors by February
2005.
Event: Complete 2nd GBI installation in Alaska (Expected date: 4Q FY
2005);
Progress assessment: The GMD program aims to increase its inventory of
interceptors for the Block 2004 defensive capability to 20 by December
2005. The production and delivery of all 20 interceptors by the end of
Block 2004 is uncertain--GMD contractors have not demonstrated they can
meet the increased production rate. In particular, the production rate
for the GMD kill vehicle must increase by 50 percent.
Event: Complete upgrade of early warning radars (Expected date: 4Q FY
2005);
Progress assessment: The GMD program is upgrading two early warning
radars--one at Beale Air Force Base, California, and another at
Fylingdales Airbase in England--to enable the radars to more
accurately track launched missiles for the planning of intercept
engagements. The upgrades consist of hardware and software
improvements. The completion of the Beale upgrade is on track for
meeting the September 2004 IDO date. MDA has not yet begun upgrading
the early warning radar at Fylingdales.
Event: Complete sea-based X-band (SBX) radar (Expected date: 1Q FY
2006);
Progress assessment: The GMD program office is managing the
development of a sea-based X-band radar to be first tested by the end
of Block 2004. During fiscal year 2003, MDA initiated the acquisition
of SBX components, including its sea-based platform. MDA program
officials stated that the SBX will be fielded as a test asset at the
end of Block 2004 (December 2005), and budget documentation indicates
that it will be placed on alert as an operational asset during Block
2006.
[End of table]
Sources: MDA (data); GAO (presentation).
Table 5: Aegis BMD-Related Block 2004 Program Goals:
Event: Complete surveillance and tracking upgrade of up to 9 Aegis BMD
destroyers (Expected date: 3Q FY 2004);
Progress assessment: Aegis BMD will be used as a forward-deployed
sensor to provide surveillance and early tracking of long-range
ballistic missiles to support the GMD mission. This is being
accomplished through the improvement of Aegis BMD software. By
September 2004, MDA expects to have upgraded three destroyers for this
role rather than its goal of 9. Aegis destroyers for this role have
been identified and are scheduled for modification.
Event: Complete upgrade of up to 6 additional Aegis BMD destroyers
(Expected date: Block 2006);
Progress assessment: The Aegis BMD program had been working to complete
the upgrade of a total of 15 Aegis destroyers by December 2005 to
provide surveillance and early tracking of long-range ballistic
missiles in support of the GMD mission. Aegis destroyers for this role
have been identified and are scheduled for modification. However, MDA
has altered this goal and now plans to upgrade a total of 10
destroyers during Block 2004 and the remaining 5 during Block 2006.
Event: Deliver up to 20 Standard Missile (SM)-3 missiles (Expected
date: 4Q FY 2005);
Progress assessment: MDA had plans to deliver and install up to 20
Aegis BMD missiles--the SM-3--on Navy cruisers by December 2005.
Although MDA completed an associated design review and initiated
planning for production, it altered this goal and now plans to field 9
missiles.
Event: Complete upgrade of 3 Aegis BMD cruisers with engagement
capability (Expected date: 4Q FY 2005);
Progress assessment: MDA is planning to field three Aegis cruisers,
with an inventory of SM-3 missiles, for defense against short-and
medium-range ballistic missiles. This requires physical modification to
the ships as well as software upgrades for the engagement role. Aegis
cruisers for this role have been identified and are scheduled for
modification.
[End of table]
Sources: MDA (data); GAO (presentation).
Table 6: C2BMC-Related Block 2004 Program Goals:
Event: Complete C2BMC operational suites (Expected date: 4Q FY2005);
Progress assessment: The C2BMC program faces a tight schedule to get
the BMDS on alert by the end of September 2004 for IDO. Our analysis
shows, however, that it is on track for delivering the software build
planned for this capability. The program also is continuing with
integration activities and is completing activities needed to make the
BMDS operational.
Sources: MDA (data); GAO (presentation).
[End of table]
Performance Assessment: Effectiveness of System's Operational
Capability Remains Largely Unproven:
MDA reports that performance indicators associated with Block 2004
elements are generally on track for meeting expectations. This
methodology leads MDA to predict with confidence that the September
2004 defensive capability will provide full coverage of the United
States against limited attacks from Northeast Asia.
However, testing in 2003 did little to demonstrate the predicted
effectiveness of the system's capability, as an integrated system, to
defeat ballistic missiles. Without sufficient test data to anchor MDA's
analyses, models, and simulations, the predicted effectiveness of the
system will remain largely unproven when IDO is available in September
2004. As discussed below, the uncertainty stems from a lack of system-
level testing--using production-representative hardware under
operationally realistic conditions--of the Aegis BMD and GMD elements
and the highly scripted nature of developmental tests to date.
The GMD program, which comprises the largest portion of the Block 2004
defensive capability, has demonstrated the capability to intercept
target warheads in flight tests over the past 5 years. In fact, the
program has achieved five successful intercepts out of eight attempts.
However, because of range limitations, these flight tests were
developmental in nature and, accordingly, engagement conditions were
repetitive and scripted. Furthermore, as noted in our recent reports on
missile defense, none of GMD's components of the defensive capability
have been flight tested in their fielded configuration (i.e., with
production-representative hardware).[Footnote 12] For example, the GMD
interceptor--booster and kill vehicle--will not be tested in its Block
2004 configuration until the next intercept attempt, which the GMD
program office plans to conduct in the fourth quarter of fiscal year
2004. This intercept attempt will also test, for the first time, battle
management software that will be part of the September 2004 defensive
capability. Finally, MDA does not plan to demonstrate the operation of
the critical GMD radar, called Cobra Dane, in flight tests before
fielding IDO.
Similarly, the Aegis BMD program has demonstrated the capability to
intercept a non-separating target through its successes in four out of
five attempts. These successes are noteworthy, given the difficulty of
achieving hit-to-kill intercepts. In his fiscal year 2002 report, DOD's
Director, Operational Test and Evaluation (DOT&E)[Footnote 13] noted
the successes but pointed out that the flight tests were developmental
in nature and neither operationally realistic nor intended to be so.
Test scenarios and target "presentation"[Footnote 14] were simple
compared with those expected to be encountered during an operational
engagement. While MDA is increasing the operational realism of its
developmental flight tests--e.g., the Aegis Ballistic Missile Defense
element employed an operational crew during its December 2003 intercept
attempt--tests completed to date are highly scripted.
Cost Assessment: Prime Contractor Fiscal Year 2003 Performance Mixed:
We used contractor Cost Performance Reports to assess the prime
contractors' progress toward MDA's cost and schedule goals during
fiscal year 2003. The government routinely uses such reports to
independently evaluate these aspects of the prime contractors'
performance. Generally, the reports detail deviations in cost and
schedule relative to expectations established under the contract.
Contractors refer to deviations as "variances." Positive variances--
activities costing less or completed ahead of schedule--are generally
considered as good news and negative variances--activities costing more
or falling behind schedule--as bad news. We addressed cost performance
at the element level because the agency does not generate a single,
overarching cost performance report for its contracts. Our detailed
findings are presented in the element appendixes of the report.
As shown in table 7, the Aegis BMD, C2BMC, STSS, and THAAD prime
contractors performed work in fiscal year 2003 at or near budgeted
costs. However, work completed in the ABL and GMD programs cost more
than budgeted. The ABL prime contractor overran its budgeted cost by
approximately $242 million, and the GMD prime contractor's work cost
about $138 million more than expected.
Table 7: Prime Contractor Cost and Schedule Performance in Fiscal Year
2003:
Dollars in millions.
BMDS element: ABL;
Cost variance: $$(242);
Schedule variance[A]: $$(28);
Comments: The underestimated complexity of integrating ABL
subcomponents into a flightworthy configuration was responsible for the
majority of the cost overruns on the ABL Block 2004 contract.
Aegis BMD;
Cost variance: $7.4;
Schedule variance[A]: $0.8;
Comments: The prime contractor's cost and schedule performance
reported here reflects that of only the contractor for the Aegis BMD
interceptor (SM-3) and not of the entire Aegis BMD element. We note,
in addition, that the cost and schedule variances do not account for
overruns incurred from developmental problems with the interceptor's
divert system. These efforts were removed from the SM-3 contract and
not reported in the cost performance reports we received from MDA.
BMDS element: C2BMC;
Cost variance: $5.3;
Schedule variance[A]: $(0.4);
Comments: C2BMC work on the prime contract during fiscal year 2003 was
completed under budget.
BMDS element: GMD;
Cost variance: $(138);
Schedule variance[A]: $(50.9);
Comments: Developmental and delivery problems with the interceptor were
the leading contributor to cost overruns and schedule slips during
fiscal year 2003.
BMDS element: KEI;
Cost variance: $N/A;
Schedule variance[A]: $N/A;
Comments: Because the prime contract was awarded in December 2003
(fiscal year 2004), no fiscal year 2003 data existed for an assessment
of the contractor's cost and schedule performance.
BMDS element: STSS;
Cost variance: $(1.0);
Schedule variance[A]: $(6.1);
Comments: Contractor cost and schedule performance steadily declined
during fiscal year 2003 and into fiscal year 2004. In October 2003
alone, the prime contractor exceeded its budget by $3 million.
BMDS element: THAAD;
Cost variance: $(12.0);
Schedule variance[A]: $(12.2);
Comments: The contractor's positive cost and schedule variance eroded
somewhat during fiscal year 2003, which was driven by the missile
component but offset by other THAAD components. With 49 percent of the
THAAD contract completed, the prime contractor is, overall, under
budget and ahead of schedule.
Sources: Contractors (data); GAO (analysis).
Note: Negative variances are shown with parentheses around the dollar
amounts of the variances.
[A] "Schedule variance" represents the value of planned work by which
the prime contractor is behind schedule.
[End of table]
MDA Faces Many Key Risks in Developing and Fielding BMDS Elements:
Our analysis of fiscal year 2003 activities indicates that there are
key risks associated with developing and fielding BMDS elements. Key
risks are those for which we found evidence of problems or significant
uncertainties that could negatively affect MDA's ability to develop,
demonstrate, and field a militarily useful capability within schedule
and cost estimates. Key risks associated with BMDS elements expected to
be fielded during Block 2004--Aegis BMD, GMD, and C2BMC--are
exacerbated by the tight schedule to meet the September 2004 date for
IDO.
Element-specific risks are summarized below. A more complete discussion
of these risks can be found in the appendixes of this report.
ABL. The complexity and magnitude of integration activities to deliver
a working system for the shoot-down demonstration have been
substantially underestimated. Accordingly, the program continues to be
at risk for additional cost growth and schedule slips. We also found
that the uncertainty regarding the element's ability to control
environmental vibration on the laser beam--jitter--is a serious
performance risk for the Block 2004 aircraft. Furthermore, we note that
weight distribution across the airplane may be a key risk for future
blocks.
Aegis BMD. The program office is under a tight deadline to complete the
development and testing of long-range surveillance and tracking
software by the September 2004 date for IDO. By September, this
software will not have been field-tested, and hence, its performance
will be uncertain. However, program officials acknowledged that the
greatest performance risk to the Aegis BMD program pertains to its
interceptor's divert system, the subsystem that generates "divert
pulses" to control the orientation and direction of the interceptor's
kill vehicle. Program officials do not expect to implement any design
changes to the divert system for the first set of five missiles being
procured. Even with a reduced divert capability, program officials
affirm that the missile's performance is adequate for Block 2004
threats. Finally, there are also questions about the contractor's
readiness to produce interceptors.
C2BMC. The C2BMC is tracking and mitigating key BMDS-specific risks
pertaining to the fielding of the initial capability by September 2004
and the Block 2004 defensive capability by December 2005. Notably,
development of the C2BMC element is proceeding concurrently with the
development of other BMDS elements, and changes in one element's
design--especially in how that element interfaces with the C2BMC
element--could cause temporary incompatibilities during Block 2004
integration that could delay fielding. In addition, the BMDS concept of
operations continues to evolve, leading to uncertainties about how the
C2BMC element will be operated. Finally, uncertainty regarding the
reliability of communications links with the Aegis BMD element
threatens to degrade overall system performance.
GMD. The GMD program faces significant testing and performance risks
that are magnified by the tight schedule to meet the September 2004
date for IDO. Specifically, delays in flight testing--caused by delays
in GMD interceptor development and delivery--have left the program with
only limited opportunities before IDO to demonstrate the performance of
fielded components and to resolve any problems uncovered during flight
testing. In addition, uncertainty with the readiness of interceptor
production could prevent MDA from meeting its program goal of fielding
20 interceptors by December 2005. Finally, an unresolved technical
issue with the kill vehicle adds uncertainty to element performance.
KEI. From discussions with program officials, we found that KEI
software costs could be underestimated, putting the program at risk for
cost growth. The program office also acknowledges that it faces
challenges in developing the first operational boost phase intercept
capability that employs hit-to-kill concepts.
STSS. The STSS program is on track for completing activities leading to
the launch of the two demonstration satellites in 2007, provided that
unforeseen problems do not arise during the process of (1) testing,
assembling, and integrating hardware components of the satellites,
which have been in storage for 4 years, and (2) developing software and
integrating software and hardware--areas that historically have been
responsible for negatively affecting a program's schedule.
THAAD. The THAAD program office is on track to develop, demonstrate,
and field the Block 2008 THAAD element within schedule and cost
estimates, provided that the contractor performs as efficiently as it
has in the past.
One risk area that covers the entire BMDS for Block 2004 (and future
blocks) is whether the capabilities being developed and fielded will
work as intended. As discussed above, testing to date has done little
to demonstrate system effectiveness, because production-representative
hardware is still being developed and has yet to be flight tested.
Furthermore, tests to date have been developmental in nature and,
accordingly, engagement conditions were repetitive and scripted. In the
future, MDA is taking a number of actions to increase testing
complexity and realism. However, it has no plans to conduct operational
testing on the IDO or Block 2004 configurations being fielded.
An operational test assesses the effectiveness of the system against
the known threat and its suitability in an environment that mimics
expected use. U.S. law requires that such tests be carried out on major
defense acquisition programs under the oversight and with the approval
of DOT&E.[Footnote 15] The law requires that DOT&E report test results
to the Secretary of Defense and congressional defense committees before
a full-rate production decision is made.[Footnote 16] As the principal
operational test and evaluation official within DOD, DOT&E is
independent of program offices and reports directly to the
Secretary.[Footnote 17]
In establishing MDA, the Secretary of Defense specified that when a
decision is made to transition a block configuration to a military
service for procurement and operations, an operational test agent would
be designated.[Footnote 18] The Secretary specified further that an
operational test and evaluation would be conducted at the end of the
transition stage. In fielding IDO and the Block 2004 configuration, no
decision is being made to transition the block configuration to a
service. Thus, no operational test agent is being designated and no
operational test and evaluation is planned. Furthermore, the fielding
of IDO and the Block 2004 configuration is not connected to a full-rate
production decision that would clearly trigger statutory operational
testing requirements.
MDA plans to incorporate both developmental and operational test
requirements in integrated flight tests. It will also conduct
operational assessments that involve the warfighter. Nonetheless,
because these tests are scripted by MDA, they do not provide the
opportunity for an independent assessment of how the equipment and its
operators will function under unscripted, unforeseen conditions. An
independent and objective assessment would, instead, involve having an
independent operational test agent plan and manage tests that
demonstrate operational effectiveness and suitability and having DOT&E
approve the test plans and report its assessment of the test results to
the Secretary and Congress. Such independent, operationally realistic
testing of a missile defense capability being fielded for operational
purposes, which meets the statutory definition of "operational test and
evaluation,"[Footnote 19] would not be considered a developmental test
and evaluation for which DOT&E is precluded from being assigned
responsibility.[Footnote 20]
Observations on the Usefulness of MDA Program Goals for Conducting
Oversight:
MDA revised its program goals in February 2004 to reflect that the
first BMDS block--Block 2004--will cost $1.12 billion more but consist
of fewer fielded components than originally planned. Despite these
revisions, we observed shortcomings in how MDA defines its goals.
Specifically, the goals do not provide a reliable and complete baseline
for accountability purposes and investment decision making because they
can vary year to year, do not include life-cycle costs, and are based
on assumptions about performance not explicitly stated.
Program Cost and Content Goals Vary Year-to-Year:
MDA's program goals can vary from year to year. The Block 2004 cost
goal of $7.36 billion is actually a budget allocation for program
activities associated with the block's development and fielding. The
flexibility available in its acquisition strategy allows MDA to request
additional funding for the second year of a block or defer or cancel
program activities if the budget allocation is not sufficient to
deliver the BMDS as planned. Because the budget (i.e., the cost goal)
and program content are subject to change over the 2-year block period,
the goal cannot serve as a reliable baseline for measuring cost,
schedule, and performance status over time.
A comparison of MDA's fiscal year 2004 and 2005 budget submissions
illustrates how the cost goal and the program content can vary from
year to year. In fiscal year 2004, MDA's cost goal for Block 2004 was
$6.24 billion. When MDA submitted its fiscal year 2005 budget, the
Block 2004 cost goal had increased to $7.36 billion. Additionally,
Aegis BMD interceptor inventory decreased from 20 to 9, the number of
Aegis BMD destroyers upgraded for the long-range surveillance and
tracking mission decreased from 15 to 10, and the potential operational
use of ABL and the sea-based X-band radar as sensors is no longer part
of Block 2004.
The 2004 and 2005 budget submissions also presented changes in cost
estimates for Blocks 2006, 2008, and 2010. Estimated costs for Block
2006 increased by $4.73 billion, which is largely attributed to an
increase in planned GMD funding by $2.23 billion for fiscal years 2005
through 2007. Estimated costs for Block 2008 decreased by $8.33
billion, from $16.27 billion to $7.93 billion. The decrease results
largely from MDA's deferring KEI development to future blocks, which
alone reduces estimated KEI costs for Block 2008 by $7.23 billion.
Finally, estimated costs for Block 2010 increased by approximately
$3.42 billion, of which $2.89 billion for the KEI program contributes
to the increase.
MDA program officials acknowledged the increase in the Block 2004 cost
goal but indicated that it should be seen as an adjustment resulting
from internal realignments of funds over the fiscal years 2004-2009
Future Years Defense Plan. For example, as noted above, a significant
portion of funds originally allocated to Block 2008 was redistributed
to Blocks 2004, 2006, and 2010. Overall, between its 2004 and 2005
budget submissions, MDA's fiscal years 2004-2009 budget increased by
about $3.23 billion, an increase of 6.5 percent. Program officials also
noted that MDA's budget increase is the direct result of additional
funds being planned for fielding, as opposed to an increase in funding
for research and development.
While such flexibility is commonly seen with concept and technology
development efforts, the Secretary of a military department is required
by law to establish cost, schedule, and performance baselines for major
defense acquisition programs entering the System Development and
Demonstration (SDD)[Footnote 21] phase of the acquisition
cycle.[Footnote 22] The program manager is required to report
deviations from established baselines to senior DOD management. The
baseline description also forms the basis of regular reporting to
Congress on the status of the program through the Selected Acquisition
Reports, including significant cost overruns.[Footnote 23]
In establishing MDA in January 2002, the Secretary of Defense directed
that BMDS elements enter the standard acquisition process at the
Production and Deployment phase, which follows SDD. MDA has not
addressed when, how, and if the BMDS, its block configurations, or its
program elements will enter SDD--the typical initiation of an
acquisition program. Accordingly, the agency has not established
baseline descriptions for its block configurations that can be used to
reliably measure the progress of the BMDS during development and for
consistently reporting to Congress and senior DOD management on the
cost, schedule, and performance status of the program.
Limited Reporting to Congress on Life-Cycle Costs:
Congressional decision makers have traditionally used Selected
Acquisition Reports to oversee the acquisition of weapon systems
programs. Accordingly, MDA produces a Selected Acquisition Report
annually, but because the missile defense program is not treated as
being in the SDD phase of acquisition, reporting is limited. Programs
that have not begun the SDD phase are not required to report life-cycle
cost estimates, including all costs for procurement, military
construction, and operations and maintenance, in the Selected
Acquisition Report.[Footnote 24]
Life-cycle cost estimates are important because an investment in a
weapon system has ramifications beyond developing and procuring an
inventory. Once operational, the system requires resources to ensure
its continued operation, maintenance, and sustainment. For example,
operators and maintenance personnel must be available to keep the
system on alert and ready to perform its mission. Such costs--which MDA
refers to as "operations and sustainment" costs--have been under review
by MDA since 2003.
Original MDA estimates for operations and sustainment costs across the
Future Years Defense Plan (fiscal years 2004-2009) ranged from $1.9
billion to $3.5 billion. However, during the fall of 2003, MDA worked
with the military services to better define requirements, which lowered
the estimates while still maintaining acceptable levels of readiness
and alert. Since there is no precedent for estimating what the actual
contractor logistical services costs might be, MDA agreed to fund the
GMD contractor for these costs for fiscal years 2005 and 2006 and begin
aggregating actual costs. MDA estimates that contractor logistical
services will cost approximately $105 million in fiscal year 2005.
We note, in addition, that Congress expressed specific interest in
obtaining life-cycle cost information for missile defense programs
entering Engineering and Manufacturing Development (EMD), otherwise
known as SDD. Specifically, Congress required MDA, with its statement
of goals, to provide an annual program plan for each missile defense
program that enters EMD.[Footnote 25] Section 232(b) of the act
further specified that each program plan is to include a funding
profile (estimating significant research and development, procurement,
and construction), together with the estimated total life-cycle costs
of the program. During the period covered by our review, MDA did not
provide any program plans detailing life-cycle costs.
MDA officials told us that the agency is working to better define its
operations and sustainment costs and include total life-cycle costs in
future Selected Acquisition Reports to Congress. They recognized that
an understanding of total life-cycle costs for elements being fielded
would help the military services plan their future budgets for
procurement and operations and sustainment. However, MDA has not
committed to when those reports would include total life-cycle costs.
Some Assumptions about Performance in Block 2004 Goals Are Unstated:
BMDS performance goals are based on assumptions regarding the system's
capability against threats under a variety of engagement
conditions.[Footnote 26] However, critical assumptions used in
establishing these goals--such as the type and number of decoys--are
not clearly explained. Without knowing these implicit assumptions, an
understanding of the operational capability of the fielded system is
incomplete.
As defined in table 8, MDA utilizes three performance metrics--
probability of engagement success, defended area, and launch area
denied--for measuring the capability of the Block 2004 BMDS to engage
and negate ballistic missile attacks.
Table 8: BMDS Performance Metrics:
Performance metric: Probability of engagement success (PES);
Definition: The probability that the BMDS hits, damages, and kills a
booster, bus, or warhead in a ballistic missile attack. PES is derived
from the probabilities associated with missile defense functions such
as detection, track, discrimination, and hit-to-kill.
Performance metric: Defended area;
Definition: The areas for which BMDS can provide protection. As a
metric, it is generally represented as a map of the area that can be
defended with at least one intercept opportunity when the attack is by
ballistic missiles launched from a specified launch area.
Performance metric: Launch area denied;
Definition: The launch area of those ballistic missiles capable of
reaching defended areas and which the BMDS can engage; i.e., the area
from which an enemy cannot attack without being engaged by the BMDS.
Source: Missile Defense Agency.
[End of table]
MDA assigned values to its performance metrics to communicate the
defensive capability of the Block 2004 system against ballistic missile
attacks but did not explain the assumptions underlying those
values.[Footnote 27] For example, although the probability of
engagement success is affected by adversary parameters--trajectory,
decoys, and warhead type--as well as the performance and orchestration
of the defense elements, we found that these factors are not explicitly
defined and provided in MDA's Statement of Goals. Because threat
characteristics such as countermeasure sophistication and warhead
dynamics all factor into the determination of the performance metrics,
knowledge of these assumptions is vital to understanding the true
capability of the system.
Conclusions:
MDA's new acquisition strategy for acquiring ballistic missile defenses
is designed to give MDA greater flexibility so it can, for example,
more easily develop and introduce new technologies to address evolving
threats. However, having such flexibility does not diminish the
importance of ensuring accountability over the substantial investments
in missile defense. In exercising their oversight and funding
responsibilities, decision makers in Congress and DOD would benefit
from having more information about the expected performance and costs
of the BMDS.
Although MDA is executing a test program that aims, over time, to make
its tests more complex and realistic, the agency has no plans to
incorporate unscripted conditions found in operational testing. If
independent, operationally realistic testing of block configurations
being fielded were conducted and DOT&E approved, assessed, and reported
on this testing, decision makers in Congress and DOD would have greater
assurance that the fielded BMDS is an effective system when considering
further investments in the system. With its statutorily based
independence, DOT&E is in the best position to determine whether a
weapon system can be trusted to work as intended when placed in the
hands of the warfighter and to report operational test results
objectively. We recognize that MDA may not have time before fielding
IDO or Block 2004 to plan and carry out such testing. However, the
agency should have the opportunity to conduct operational realistic
testing of the Block 2004 configuration, once it is fielded.
Notwithstanding that interceptor inventory is being procured,
operations and sustainment costs are being funded, and the IDO system
is nearing the time when it will be fielded, MDA has not treated the
development and deployment of this capability as an acquisition program
(i.e., one that has entered the SDD phase) subject to reporting program
status (from the baseline) and life-cycle cost information that
Congress traditionally receives for its oversight responsibilities.
Accordingly, accountability would be strengthened if MDA provided
Congress with the program status and life-cycle cost information that
is typically associated with SDD status. Such actions would also help
the military services with their future budgeting for procurement and
operations and sustainment costs. MDA officials told us that the agency
is working toward including life-cycle cost information in these
reports. Follow-through is needed.
Another means for MDA to strengthen accountability is through an
improved definition of BMDS program goals and explanation of changes
using the current reporting mechanisms. The Selected Acquisition
Reports and MDA budget submissions would be much more useful for
oversight and investment decision making if program goals for block
configurations being fielded reflect program baselines that do not vary
year-to-year; year-to-year changes in estimates are fully explained;
full life-cycle costs for block configurations being fielded are
presented; and assumptions behind performance goals are explicitly
stated.
Recommendations for Executive Action:
To provide increased confidence that a fielded block of the BMDS will
perform as intended when placed in the hands of the warfighter and that
further investments to improve the BMDS through block upgrades are
warranted, we recommend that the Secretary of Defense take the
following three actions:
* direct the Director, MDA, to prepare for independent, operationally
realistic testing and evaluation for each BMDS block configuration
being fielded and appoint an independent operational test agent to plan
and conduct those tests;
* assign DOT&E responsibility for approving such test plans; and:
* direct DOT&E to report its evaluation of the results of such tests to
the Secretary and the congressional defense committees.
To provide decision makers in DOD and Congress with a reliable and
complete basis for carrying out oversight of the BMDS program, we
recommend that the Secretary of Defense take the following two actions:
* direct the Director, MDA, to establish cost, schedule, and
performance baselines (including full life-cycle costs) for each block
configuration of the BMDS being fielded and:
* direct the Director, MDA, to explain year-to-year variations from the
baselines in the Selected Acquisition Report to Congress.
Agency Comments and Our Evaluation:
DOD's comments on our draft report are reprinted in appendix I. DOD did
not concur with our three recommendations on operational testing and
evaluation but concurred with our two recommendations regarding cost,
schedule, and performance baselines.
In not concurring with our first recommendation, DOD stated that there
is no statutory requirement for it to operationally test developmental
items. That is, DOD is required only to operationally test a major
defense acquisition program such as the ballistic missile defense
system to assist in the decision as to whether to enter full-rate
production. However, because of the capability-based structure under
which MDA is operating, the decision to enter full-rate production will
not be made in the foreseeable future and, in fact, may never occur.
Given that significant resources have already been expended to procure
inventory and field the system, and given that decision makers are
continually being asked to invest further in the system, we believe DOD
should provide evidence from independent, objective testing that the
system will protect the United States as intended in an operationally
representative environment.
In not concurring with our first recommendation, DOD also stated that
MDA is attempting to incorporate operational test objectives into
developmental tests. For example, MDA conducted an Aegis BMD intercept
test in December 2003 that included some conditions likely to be
encountered during an armed conflict. However, as noted in our recent
report on missile defense testing, MDA has not yet begun to incorporate
operational realism on tests of the GMD element, which provides the
bulk of the initial BMDS capability. GMD flight tests leading up to IDO
are constrained by range limitations, are developmental in nature and,
accordingly, are executed with engagement conditions that are
repetitive and scripted. It is unlikely that MDA will be able to make
developmental tests completely operationally realistic. Developmental
tests are, by definition, conducted under controlled conditions so that
the cause of design problems can be more easily identified and fixed
and the achievement of technical performance specifications can be
verified. Additionally, because operational test conditions are more
stressing, operational testing provides an opportunity to identify
problems or deficiencies that might not be revealed in developmental
tests but need to be addressed in subsequent BMDS blocks.
In not concurring with our second recommendation, DOD stated that DOT&E
already has statutory responsibility for reviewing and approving
operational test plans but is prohibited from approving plans for
developmental testing. However, our recommendation is based on our view
that the block configurations being fielded should be operationally
tested. These tests would not be the developmental tests for which
DOT&E is prohibited from approving. Because of its independence from
the program, we believe DOT&E is in the best position to approve the
plans for, and evaluate the results of, operational tests that are not
required by statute-tests of block configurations being fielded that do
not involve a full-rate production decision.
DOD also did not concur with our third recommendation that DOT&E report
the results of operational tests to the Secretary of Defense and to
Congress. In responding to this recommendation, DOD cited the existing
statutory reporting requirements for DOT&E, under which it has assessed
the MDA test program. However, for the reasons cited above, we continue
to believe that operational tests of the BMDS configurations being
fielded are needed. The statutory requirement for operational testing
and for DOT&E's reporting responsibilities is not clearly triggered by
the fielding of block configurations that do not involve a full-rate
production decision. Also, although we recognize that DOT&E is
providing an annual assessment of the BMDS to defense committees each
year, we believe this assessment is limited. It is based on
developmental tests that, because of their scripted nature, do not
provide optimal conditions for assessing the system's readiness for
operational use.
DOD also provided technical comments to this report, which we
considered and implemented, as appropriate.
We are sending copies of this report to the Secretary of Defense and to
the Director, Missile Defense Agency. 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 [Hyperlink, http://www.gao.gov].
If you or your staff have any questions concerning this report, please
contact me at (202) 512-4841. The major contributors to this report are
listed in appendix X.
Signed by:
Robert E. Levin, Director, Acquisition and Sourcing Management:
List of Congressional Committees:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Ted Stevens Chairman:
The Honorable Daniel K. Inouye:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Duncan Hunter Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable Jerry Lewis Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendixes:
Appendix I: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
3000 DEFENSE PENTAGON
WASHINGTON, DC 20301-3000:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
Mr. Robert E. Levin:
Director, Acquisition and Sourcing Management
U. S. General Accounting Office:
441 G. Street, N.W.
Washington, DC 20548:
9 APR 2004:
Dear Mr Levin:
This is the Department of Defense's (DoD's) response to the GAO Draft
Report, "MISSILE DEFENSE: Actions Are Needed to Enhance Testing and
Accountability," dated March 9, 2004 (GAO Code 120252/GAO-04-409).
The DoD has reviewed the draft report. We do not concur with
recommendations 1, 2, and 3, and concur with recommendations 4 and 5.
Specific comments on each recommendation are enclosed. We also
recommend some factual corrections. My action officers for this effort
are COL Enrique Ramos, (703) 695-2680, enrique.ramos@osd.mil, and Lt
Col Mark Arbogast, (703) 695-7328, mark.arbogast@osd.mil.
We appreciate the opportunity to comment on the draft report.
Sincerely,
Signed for:
Glenn F. Lamartin, Director:
Strategic and Tactical Systems:
Attachment:
GAO DRAFT REPORT - DATED MARCH 9, 2004 GAO CODE 120252/GAO-04-409:
"MISSILE DEFENSE Actions Are Needed to Enhance Testing and
Accountability":
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct Director, MDA, to prepare for independent, operationally
realistic testing and evaluation for each BMDS block configuration
being fielded and appoint an independent operational test agent to plan
and manage those tests. (p. 28/GAO Draft Report):
DOD RESPONSE: Non-Concur - Contingent upon the receipt of legislative
authority to acquire developmental items for fielding, the Missile
Defense Agency (MDA) will begin to field developmental blocks of the
Ballistic Missile Defense System (BMDS) as soon as technologically
possible, based on evidence of capabilities established through
developmental testing. Although there is no statutory requirement to
conduct operational testing with respect to developmental items, the
Director, Operational Test and Evaluation (DOT&E), and the Service
Operational Test Agencies' combined test teams are working with MDA and
the prime contractors to combine operational testing objectives in test
planning as systems mature. In accordance with section 2399 of title
10, United States Code, formal operational test and evaluation will be
executed by a Service when an element of BMDS matures and transitions
from MDA to the Service, and prior to entry into full-rate production.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
assign DOT&E responsibility for approving such test plans. (p. 28/Draft
Report):
DOD RESPONSE: Non-Concur - Pursuant to section 139 of title 10, United
States Code, DOT&E already has the statutory responsibility to review
and approve operational test plans, but is prohibited from approving
plans for developmental testing. DOT&E currently reviews the
operational objectives for combined developmental testing / operational
testing events and approves operational aspects of these test plans.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct DOT&E to report its evaluation of the results of such tests to
the Secretary and the Congressional defense committees. (p. 28/Draft
Report):
DOD RESPONSE: Non-Concur - DOT&E's reporting responsibilities are
already established in statute. Section 139 of title 10, United States
Code, requires that DOT&E submit an annual report, to the Secretary of
Defense, Under Secretary of Defense (Acquisition, Technology and
Logistics) and the Congress, on the adequacy of the Department's
operational test and evaluation activities during the previous fiscal
year. Section 2399 of title 10 requires that DOT&E submit a report, to
the Secretary of Defense and the congressional defense committees prior
to a decision to proceed beyond low-rate initial production, as to
whether items or components tested during operational testing for a
major defense acquisition program are effective and suitable for
combat. Section 2366 of title 10 requires that the Secretary of Defense
report, to the congressional defense committees prior to the decision
to proceed beyond low-rate initial production, regarding the results of
realistic survivability testing with respect to a major defense
acquisition program. Section 232 of the National Defense Authorization
Act for Fiscal Year 2002 imposes additional reporting requirements
unique to ballistic missile defense. Specifically, section 232 requires
that the Secretary of Defense submit an annual program plan, including
a schedule of testing activities, to the congressional defense
committees, and that DOT&E provide an annual assessment of MDA's test
program during the preceding fiscal year, also to the congressional
defense committees. As discussed above in the DOD Response to
Recommendation 1, contingent upon receipt of legislative authority, MDA
will begin to field blocks of the BMDS based on developmental testing,
and formal operational test and evaluation will be executed by a
Service when an element of BMDS transitions from MDA to the Service.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
direct the Director, MDA to establish cost, schedule, and performance
baselines (including full lifecycle costs) for each block configuration
of the BMDS being fielded. (p. 29/Draft Report):
DOD RESPONSE: Concur - The Department agrees with this recommendation
regarding establishing cost, schedule, and performance baselines for
each block configuration of the BMDS being fielded. Each year, in fact,
MDA reviews and revises its goals based on the progress of development,
in consultation with the missile defense oversight structure currently
in place.
RECOMMENDATION 5: The GAO recommended that the Secretary of Defense
direct the Director, MDA to explain year-to-year variations from the
baselines in the Selected Acquisition Report to Congress. (p. 29/Draft
Report):
DOD RESPONSE: Concur - The Department agrees with this recommendation.
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix II Summary:
Aegis Ballistic Missile Defense:
Program Description:
The Aegis Ballistic Missile Defense (Aegis BMD) element is designed to
protect U.S. deployed forces and critical assets from short-and medium-
range ballistic missile attacks. It will be fielded as part of the
Block 2004 Ballistic Missile Defense System to engage enemy missiles in
the midcourse phase of flight. Additionally, it will act as a forward-
deployed sensor for surveillance and early tracking of long-range
ballistic missiles. To provide these capabilities, the Missile Defense
Agency (MDA) is adding new features to existing functionality offered
by Navy ships.
The Department of Defense (DOD) budgeted about $4.8 billion for Aegis
BMD development and fielding during fiscal years 2004 through 2009.
Earlier, DOD expended approximately $2.9 billion between fiscal years
1996 and 2003 for related developmental efforts.
Fiscal Year 2003 Progress Assessment:
The Aegis BMD element generally completed work planned for fiscal year
2003 on schedule. However, the program faces risks that include the
uncertainty of software performance for the initial surveillance and
tracking capability, questions about the contractor's readiness to
produce interceptors, and concerns about the interceptor's divert
system.
Schedule: In fiscal year 2003, the program office initiated software
upgrades to enable Aegis ships to perform the ballistic missile defense
mission, began a series of activities related to producing and
delivering the Aegis BMD interceptor, and conducted ground and flight
tests to verify Aegis BMD performance. Although the program suffered
its first failed intercept attempt in June 2003, overall, four of five
intercept attempts conducted by the Aegis BMD program have been
successful.
Performance: The Aegis BMD element demonstrated the capability to
intercept a non-separating target, that is, a target whose warhead has
not separated from the booster. However, we were unable to fully assess
progress in achieving performance goals during fiscal year 2003,
because the program office began reporting performance indicators in
calendar year 2004.
Cost: Our analysis of prime contractor cost performance reports shows
that the interceptor contractor completed fiscal year 2003 work at
slightly less cost than budgeted. However, we were unable to determine
how work progressed on the interceptor's high-risk divert system--the
component causing the greatest performance risk to the program--because
that work was not reported in cost performance reports. Additionally,
we could not readily assess cost and schedule performance of other
Aegis BMD components associated with missile defense, because cost
performance reports were not in a form we could use for our analysis,
and these efforts did not undergo an integrated baseline review.
Risks: Program officials are working under a tight schedule to complete
the development and testing of software intended to enhance
surveillance and tracking functions. Officials said there is inadequate
time to flight test these new functions before September 2004.
Moreover, they share our assessment that the greatest performance risk
to the Aegis BMD program pertains to development of the interceptor's
divert system that steers the interceptor into the target. During a
flight test in June 2003, subassemblies of the divert system failed,
and the target was not intercepted. Program officials do not expect to
implement any design changes to the divert system for the first set of
five missiles being procured. Even with a reduced divert capability,
program officials affirm that the missile's performance is adequate for
Block 2004 threats. Finally, program officials share our concern that
missile production and delivery is a program risk.
Appendix II: Aegis Ballistic Missile Defense:
Background: Element Description:
The Aegis Ballistic Missile Defense (Aegis BMD) element is a sea-based
missile defense system that builds on the existing capabilities of
Aegis-equipped Navy cruisers and destroyers. Aegis BMD is being
designed to protect deployed U.S. armed forces and critical assets from
short-and medium-range ballistic missile attacks. Key capabilities
include the shipboard AN/SPY-1 radar, hit-to-kill
interceptors,[Footnote 1] and command and control systems to detect,
track, and destroy enemy warheads in the midcourse phase of flight.
Aegis BMD is also expected to be used as a forward-deployed sensor that
provides surveillance and early tracking of long-range ballistic
missiles to support the Ground-based Midcourse Defense (GMD) mission.
The program office is enhancing the existing Aegis Weapon System and
Standard Missile (SM) currently installed on Navy cruisers and
destroyers. The Aegis Weapon System was originally developed to protect
U.S. Navy ships from air, surface, and subsurface threats. Planned
hardware and software upgrades to the Aegis Weapon System will provide
for enhanced tracking and target discrimination, which are functions
needed to carry out the missile defense mission. The Aegis BMD
interceptor, referred to as SM-3, is a solid propellant, four-stage,
hit-to-kill missile designed to intercept ballistic missiles above the
atmosphere. SM-3 makes use of the existing SM-2 propulsion stack
(booster and dual thrust rocket motor) for the first and second stages.
A third-stage rocket motor and a kinetic warhead (a hit-to-kill warhead
known as the "kill vehicle") complete SM-3.
The first increment of the Aegis BMD element is expected to deliver an
operational capability in the 2004-2005 time frame as an interoperable
element of the Ballistic Missile Defense System (BMDS). Known as Block
2004, this increment will inaugurate Aegis BMD's dual role for the
missile defense mission. First, the element will be used as a forward-
deployed sensor for the surveillance and tracking of long-range
ballistic missiles, and second, it will be used to engage and intercept
short-and medium-range ballistic missiles. According to program
officials, Block 2004 is being rolled out in three phases:
* Initial fielding of the surveillance and tracking capability. By
September 2004, the Missile Defense Agency (MDA) aims to upgrade three
destroyers to be capable of performing the surveillance and tracking
function in support of the GMD mission.
* Initial fielding of an intercept capability. By April 2005, two
upgraded cruisers with an inventory of five interceptors are expected
to be available for engaging short-and medium-range ballistic missiles.
* Completion of Block 2004 upgrades of 13 Aegis-equipped ships. By the
end of December 2005, MDA aims to have a total of 10 Aegis destroyers
available for performing the long-range surveillance and tracking
function.[Footnote 2] In addition, MDA is planning to place up to 10
interceptors on three upgraded cruisers for the engagement role.
Background: History:
The Aegis BMD program evolved from efforts in the 1990s to demonstrate
the feasibility of a missile defense capability from a ship-based
platform. The first demonstration of that concept was the Navy's
Lightweight Exoatmospheric Projectile (LEAP) program, which consisted
of four flight tests conducted from 1993 through 1995. The LEAP program
successfully married a lightweight exoatmospheric projectile--the kill
vehicle--to an existing surface-to-air missile to show that the
resulting interceptor could be launched from a ship.
Subsequent to this demonstration, in fiscal year 1996, the Navy and the
Ballistic Missile Defense Organization[Footnote 3] initiated the Navy
Theater Wide missile defense program, the predecessor to Aegis BMD.
Plans called for deploying the first increment of the Navy Theater Wide
program--essentially the current Aegis BMD program--in 2010 and a final
increment with an upgraded missile at a later, undefined date.
The Navy Theater Wide program included an associated effort, the Aegis
LEAP Intercept (ALI) program, as a follow-on flight demonstration
effort to the earlier LEAP project. The ALI program consisted of a
series of flight tests that culminated in 2002 with two successful
intercepts using an early version of the SM-3 missile. The ALI program
is the basis for the Aegis BMD Block 2004 program.
Background: Developmental Phases:
Aegis BMD development and fielding is proceeding in a series of planned
2-year blocks known as Blocks 2004, 2006, and 2008. Furthermore,
funding has been planned for Block 2010, but the configuration of this
block has not been defined by MDA.
Block 2004. Block 2004 is the first fielded increment to protect
deployed U.S. forces and other assets from short-and medium-range
ballistic missile attacks. Aegis BMD will also be used as a forward-
deployed sensor to provide surveillance and early tracking of long-
range ballistic missiles to support the GMD mission.
Block 2006. The Aegis BMD Block 2006 configuration builds on the Block
2004 capability. MDA plans to add the capability to defeat long-range
ballistic missiles with limited countermeasures, to increase Aegis
BMD's role as a remote sensor, and to assess emerging technologies for
the element's missile.
Block 2008. The Aegis BMD Block 2008 configuration will incorporate
enhancements to the AN/SPY-1 radar that are expected to improve the
radar's discrimination and command and control functionality so that
the element can engage multiple threats simultaneously.
Progress Assessment: Schedule:
The Aegis BMD element generally completed work planned for fiscal year
2003 on schedule. Achievements included initiating Aegis Weapon System
upgrades on existing ships, beginning activities for the production and
delivery of SM-3 missiles, and accomplishing test events. However,
problems that arose with the divert system onboard the interceptor's
kill vehicle during flight-testing have affected future test events
causing delays and the modification of test plans.
Aegis Weapon System Software Upgrades:
Fiscal Year 2003 Activities Completed on Schedule:
Aegis BMD program officials told us that they expect to eventually
modify 18 Aegis ships with enhanced surveillance, tracking, and
intercept functions to make them capable of performing the BMD mission.
These upgrades will improve the capability of the element's AN/SPY-1
radar to identify the true target (discriminate), enable accurate
tracking of long-range ballistic missiles in support of GMD operations,
plan engagements, and launch an SM-3 missile to engage a ballistic
missile threat. To achieve this enhanced functionality, the Aegis BMD
program office is upgrading the Aegis Weapon System of designated ships
through a series of software builds or computer programs referred to as
CP3.0E, CP3.0, and CP3.1.
Aegis BMD program officials stated that they originally planned two
software builds--CP3.0 and CP3.1--as incremental increases to the Block
2004 capability through the end of 2005. The program expected that the
CP3.1 software build, once developed and installed on Aegis ships,
would enhance the existing combat system so that upgraded ships could
perform the BMD mission. However, in response to the Presidential
Directive to begin fielding a set of missile defensive capabilities in
2004, the Aegis BMD element began the development of an early, interim
build referred to as "CP3.0E." Several software development activities
completed in fiscal year 2003 pertain to this build. CP3.0E is to be
installed in one or more destroyers by September 2004, but it will
enable these destroyers only to surveil and track enemy ballistic
missiles. The ships will not be capable of launching interceptors to
engage those missiles. According to program documentation, when CP3.0E
is installed on ships at sea by September 2004, the program office will
have achieved initial defensive operations for the Aegis BMD Block 2004
surveillance and tracking mission.
MDA expects CP3.0, the next software build, to augment the surveillance
and tracking capability of CP3.0E with an initial engagement capability
for Aegis cruisers. The availability of CP3.0 on ships at sea by April
2005[Footnote 4] enables initial defensive operations for the Aegis BMD
Block 2004 engagement mission. Although CP3.0 allows ships to launch
SM-3 missiles, this capability applies only to Aegis cruisers and not
to Aegis destroyers. The capability to intercept short-or medium-range
ballistic missiles is limited to the single cruiser that will be
available in April 2005. The third version of the computer program--
CP3.1--adds ship defense and planning support for cruisers. MDA intends
for CP3.1 to be installed by December 2005, and it is the last software
upgrade planned for the Block 2004 time frame.
In fiscal year 2003, the program office conducted activities related to
the development of the CP3.0E and CP3.0 software builds. All activities
occurred within the expected schedule. The major event for CP3.0E was
the July 2003 In Process Review. This review ensured that CP3.0E
development and installation were on track to occur as planned. The
CP3.0 System Design Disclosure, which occurred in March 2003, defined
the design of CP3.0 and allowed the program office to proceed with the
development of this software build. The program expects to continue
developing CP3.0 and CP3.1 in fiscal year 2004 and to install CP3.0E on
designated ships.
As software builds are completed and installed, Navy cruisers and
destroyers will become available to perform their expected missions. As
indicated by program officials, Table 9 summarizes the availability of
Aegis ships for the BMD mission in the Block 2004 time frame.
Table 9: Planned Aegis Ship Availability for the BMD Mission (Block
2004):
Ship Function: Destroyers; Capable only of surveillance and tracking
(no engagement capability);
September 2004: 3[B];
December 2004: 5;
April 2005: 9;
December 2005: 10[C];
Ship Function: Cruisers[A]
Capable of surveillance, tracking, and engagement;
September 2004: 0;
December 2004: 1;
April 2005: 2;
December 2005: 3;
Total destroyers and cruisers available for BMD mission:
September 2004: 3;
December 2004: 6;
April 2005: 11;
December 2005: 13;
Source: Missile Defense Agency.
[A] Total number of Aegis cruisers includes one being used as a test
ship.
[B] One of the three surveillance and tracking ships will be delivered
in October 2004.
[C] 15 long-range surveillance and tracking "equipment sets" will be
available at this time, but installations may not be completed owing to
the ships' operational schedules. The remaining 5 upgrades are planned
for the Block 2006 time frame.
[End of table]
SM-3 Missile Development and Delivery:
Progress Being Made but Challenges Remain:
In fiscal year 2003, the Aegis BMD program office undertook a series of
missile-related activities to begin procuring missiles for delivery in
fiscal year 2004. The Aegis BMD element is developing evolving
configurations of the SM-3 missile. The SM-3 "Block 0" configuration,
which is used in Block 2004 flight-testing, is capable of intercepting
simple non-separating targets. The "Block I" SM-3 configuration will be
fielded as part of the BMDS Block 2004 defensive capability and
provides a rudimentary target discrimination capability. Subsequent SM-
3 configurations beyond Block I will not be available until calendar
year 2006. Table 10 lists those activities and their respective
completion dates.
Table 10: Missile-Related Activities (Fiscal Year 2003):
Activity; Purpose; Date Completed.
Activity: SM-3 Block I Critical Design Review;
Purpose: Assess maturity of Block I;
Date completed: May 2003.
Activity: SM-3 Block I Design Verification Tests;
Purpose: Verify design of Block I missiles;
Date completed: Ongoing.
Activity: SM-3 Block I Production In Process Review;
Purpose: Assess Block I production readiness;
Date completed: Sept. 2003.
Activity: SM-3 Nosecone Critical Design Review;
Purpose: Assess maturity of missile nosecone;
Date completed: Oct. 2003.
Source: Missile Defense Agency.
[End of table]
The missile-related activities shown in Table 10 occurred as planned,
with the exception of the missile nosecone critical design review.
Program officials stated that a delay of less than 3 months occurred
because the testing facility was not available as originally planned.
Table 11 summarizes the delivery of SM-3 missiles in the Block 2004
time frame.
Table 11: SM-3 Missiles Delivered, Expended, and in Inventory:
Missile delivery: Block 0 missile: Delivered;
Up to Sept. 2004: 3;
Sept. 2004 - Dec. 2004: 0;
Dec. 2004 - Apr. 2005: 0;
Apr. 2005 - Dec. 2005: 0;
Total missiles (Block 2004): 3
Missile delivery: Block 0 missile: Expended;
Up to Sept. 2004: 3;
Sept. 2004 - Dec. 2004: 0;
Dec. 2004 - Apr. 2005: 0;
Apr. 2005 - Dec. 2005: 0;
Total missiles (Block 2004): 3
Missile delivery: Block 0 missile: Inventory;
Up to Sept. 2004: 0;
Sept. 2004 - Dec. 2004: 0;
Dec. 2004 - Apr. 2005: 0;
Apr. 2005 - Dec. 2005: 0;
Total missiles (Block 2004): 0
Missile delivery: Block I missile: Delivered;
Up to Sept. 2004: 5;
Sept. 2004 - Dec. 2004: 0;
Dec. 2004 - Apr. 2005: 2;
Apr. 2005 - Dec. 2005: 4-7;
Total missiles (Block 2004): 11-14.
Missile delivery: Block I missile: Expended;
Up to Sept. 2004: 0;
Sept. 2004 - Dec. 2004: 0;
Dec. 2004 - Apr. 2005: 2;
Apr. 2005 - Dec. 2005: 1;
Total missiles (Block 2004): 3
Missile delivery: Block I missile: Inventory;
Up to Sept. 2004: 5;
Sept. 2004 - Dec. 2004: 0;
Dec. 2004 - Apr. 2005: 0;
Apr. 2005 - Dec. 2005: 3-6;
Total missiles (Block 2004): 8-11.
Source: Missile Defense Agency.
Note: Inventory is delivered minus expended.
[End of table]
Testing:
Ground and Flight Testing Conducted with Mixed Results:
The Aegis BMD program conducts both ground-and flight-testing to
validate Aegis BMD's performance. The program office expects flight-
testing to progressively demonstrate the element's capability to engage
ballistic missile targets under increasingly complex conditions. Since
1999, the program conducted three flight tests (non-intercept attempts)
to demonstrate basic missile functionality, such as booster performance
and stage separation. During this same time frame, there have also been
five intercept flight tests using the SM-3 missile. Of the five
attempts, four were successful intercepts.
Ground Testing:
Ground testing provides the opportunity to validate the flight-
worthiness of Aegis BMD subcomponents on the ground before they are
used in flight tests. In fiscal year 2003, ground-testing activities
focused on the SM-3 missile and a redesigned subcomponent of the
missile's divert system--the Solid Divert and Attitude Control System
(SDACS). This subcomponent is a collection of solid-fuel thrusters used
to steer the kill vehicle into its designated target. Ground tests of
the SDACS were conducted to verify its readiness for flight-testing.
When the SDACS ground test program demonstrated good performance with
the simpler, more producible SDACS design, the Aegis BMD program office
gave approval for its use in flight mission 5 (FM-5). Despite of
successful ground testing, the SDACS subcomponent did not perform as
desired in flight. The program office is investigating the cause of the
failure, but a resolution is not expected until sometime in early 2004.
As indicated by program officials, Table 12 shows key ground tests
planned for fiscal year 2003.
Table 12: Aegis BMD Ground Tests:
Test event: SDACS Monolithic Developmental Unit 1;
Scheduled date: Feb. 2003;
Objectives: Validate design of new SDACS;
Outcome: Objectives achieved.
Test event: SDACS Monolithic Developmental Unit 2;
Scheduled date: May 2003;
Objectives: Validate design of new SDACS;
Outcome: Objectives achieved.
Test event: SDACS qualification;
Scheduled date: June 2003;
Objectives: Confirm readiness of new SDACS for use in FM-5;
Outcome: Objectives achieved.
Test event: Third stage rocket motor qualification;
Scheduled date: Sept. 2003;
Objectives: Validate material replacements and design changes in the
rocket motor;
Outcome: Not performed owing to safety shutdown of test lab.
Source: Missile Defense Agency.
[End of table]
Program officials stated that the only ground test that was scheduled
to occur in fiscal year 2003, but did not, was the qualification
testing of the third-stage rocket motor. The officials told us that the
test could not be performed as scheduled, because a safety shutdown at
the test facility occurred because of an explosion in another test area
at that facility. They noted that modifications are being made to
prevent similar incidents. Repairs are expected to continue well into
the second quarter of fiscal year 2004, after which rocket motor
testing can be resumed.
Flight Testing:
The program office conducted three flight missions--FM-4, FM-5, and FM-
6--in fiscal year and calendar year 2003. With the exception of FM-5,
these tests proceeded as planned. FM-4, which occurred in November
2002, marked the start of the Aegis BMD Block 2004 flight test phase.
FM-4's primary test objective was to verify an ascent phase intercept
against a non-separating ballistic missile target using the Block 0 SM-
3 missile, and the objective was achieved. FM-5 had objectives similar
to those of FM-4, viz., to intercept an ascending non-separating
target. The test also was to demonstrate the operation of the
redesigned SDACS in flight. In the end, FM-5 did not achieve an
intercept because the SDACS did not perform as expected.[Footnote 5]
FM-6, a third test with objectives similar to those of FM-5, occurred
later in calendar year 2003. Because of technical issues that arose in
FM-5, the program office delayed FM-6 from September 2003 to December
2003 and modified the test plan. In particular, the program omitted its
plan to exercise the full functionality of the newly designed SDACS,
which failed during FM-5. Table 13 provides a summary of the flight
tests.
Table 13: Aegis BMD Flight Tests:
Test event: FM-4;
Completed date: Nov. 2002;
Objectives: Ascent-phase intercept;
Outcome: Intercept achieved.
Test event: FM-5;
Completed date: June 2003;
Objectives: Ascent-phase intercept; demonstration of new SDACS;
Outcome: Intercept not achieved.
Test event: FM-6;
Completed date: Dec. 2003;
Objectives: Ascent-phase intercept; demonstration of connectivity
with BMDS;
Outcome: Intercept achieved; FM-6 originally scheduled for Sept. 2003.
Sources: MDA (data); GAO (analysis).
[End of table]
Progress Assessment: Performance:
Operational Performance of Aegis BMD Remains Uncertain:
The Aegis BMD program has demonstrated the capability to intercept a
non-separating target through its successes in FM-2, FM-3, FM-4, and
FM-6. These successes are noteworthy, given the difficulty of "hit-to-
kill" intercepts. DOT&E's fiscal year 2002 Report to Congress noted the
successes but pointed out that the flight tests were developmental in
nature and neither operationally realistic nor intended to be so. Test
scenarios and target "presentation"[Footnote 6] were simple compared
with those expected to be encountered during an operational engagement.
Furthermore, separating targets,[Footnote 7] which pose a particular
challenge to the Aegis BMD element, will not be assessed until FM-8 is
conducted in 2005. While MDA is increasing the operational realism of
its developmental flight tests--e.g., the Aegis Ballistic Missile
Defense program employed an operational crew in FM-6--tests completed
to date are highly scripted.
The Aegis BMD program developed a set of performance indicators that
provides a top-level characterization of element effectiveness. We were
unable to fully assess progress in achieving performance goals during
fiscal year 2003, because the program office began reporting
performance indicators in calendar year 2004.
Progress Assessment: Cost:
DOD expects to invest about $4.8 billion in Aegis BMD research and
development from fiscal year 2004 through 2009. This is in addition to
the $2.9 billion invested from fiscal year 1996 through 2003.
The program uses most of the funds it receives to fund the element's
prime contract. In fiscal year 2003, the contractor completed all
development work slightly under cost and ahead of schedule. However,
because of early development problems with the SM-3 missile, the
contractor incurred a cumulative cost overrun of about $39 million at
the contract's completion in August 2003.
Program Cost:
Aegis BMD Program Costing Approximately $800 Million per Year:
Aegis BMD costs for the next 6 fiscal years are expected to be around
$4.8 billion. This includes funds for Blocks 2004, 2006, and 2008 as
well as portions of Block 2010. Also included is cooperative work
between the United States and Japan on SM-3 component development.
Table 14 shows the expected costs of the program by fiscal year through
2009, the last year for which MDA published its funding plans.
Table 14: Aegis BMD Planned Cost:
Dollars in millions of then-year dollars:
Block: Block 2004;
Fiscal Year 2004: $641;
Fiscal Year 2005: $966;
Fiscal Year 2006: $178;
Fiscal Year 2007: $0;
Fiscal Year 2008: $0;
Fiscal Year 2009: $0;
Total: $1,785.00
Block: Block 2006;
Fiscal Year 2004: 24;
Fiscal Year 2005: 106;
Fiscal Year 2006: 675;
Fiscal Year 2007: 776;
Fiscal Year 2008: 50;
Fiscal Year 2009: 0;
Total: 1,631.00
Block: Block 2008;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Fiscal Year 2006: 20;
Fiscal Year 2007: 145;
Fiscal Year 2008: 534;
Fiscal Year 2009: 435;
Total: 1,134.00
Block: Block 2010;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Fiscal Year 2006: 0;
Fiscal Year 2007: 8;
Fiscal Year 2008: 30;
Fiscal Year 2009: 94;
Total: 132
Block: Cooperative;
Fiscal Year 2004: 53;
Fiscal Year 2005: 72;
Fiscal Year 2006: 25;
Fiscal Year 2007: 0;
Fiscal Year 2008: 0;
Fiscal Year 2009: 0;
Total: 150
Total;
Fiscal Year 2004: $718;
Fiscal Year 2005: $1,144;
Fiscal Year 2006: $898;
Fiscal Year 2007: $929;
Fiscal Year 2008: $614;
Fiscal Year 2009: $529;
Total: $4,832.00
Source: Missile Defense Agency.
[End of table]
In fiscal years 2002 and 2003, MDA expended $446.5 million and $384.3
million, respectively, to develop the Aegis BMD element. Including
these funds, the Navy and MDA have expended approximately $2.9 billion
to develop a sea-based missile defense capability since the Navy
Theater Wide program began.
Prime Contractor Fiscal Year 2003 Cost and Schedule Performance:
Performance Improved, but Cost Overruns on the Missile Remain:
The prime contract consumes the bulk of the program's budget: about 84
percent of the Block 2004 budget supports the prime contractor team and
16 percent supports government efforts. Up until 2003, seven separate
contracts covered the development of element components--the Aegis
Weapon System, the Vertical Launch System, and the SM-3 missile. Late
in the fiscal year, MDA awarded new contracts and reduced the number of
contracts to two, an Aegis Weapon System contract and an SM-3 contract.
The Aegis Weapon System contract covers all Block 2004 activities. It
also provides for initial future block definition activities for Blocks
2006, 2008, and 2010. The SM-3 contract is similarly structured.
We used contractor Cost Performance Reports to evaluate the cost and
schedule performance of the SM-3 contractor. The government routinely
uses these reports to independently evaluate prime contractor
performance relative to cost and schedule. Generally, the reports
detail deviations in cost and schedule relative to expectations
established under the contract. Contractors refer to deviations as
"variances." Positive variances--activities costing less or completed
ahead of schedule--are generally considered as good news and negative
variances--activities costing more or falling behind schedule--as bad
news. According to the Aegis BMD program office, contractors produce
Cost Performance Reports for the various components of the Aegis BMD
element, such as the Aegis Weapon System and the SM-3 missile. However,
we were able to assess cost and schedule performance only for the SM-3
missile. Cost Performance Reports associated with missile-defense
activities for the other components were not in a form we could use for
our analysis, and these efforts did not undergo an integrated baseline
review. In the future, the new contracts will provide Cost Performance
Reports for both the Aegis Weapon System and SM-3 missile.
The SM-3 development contract accounts for approximately 50 percent of
Aegis BMD Block 2004 development costs. Our analysis of SM-3 missile
Cost Performance Reports shows that the contractor generally improved
its cost and schedule performance throughout fiscal year 2003. During
this time, the SM-3 missile contractor spent $7.4 million less than
originally budgeted and completed planned work slightly ahead of
schedule. In addition, in fiscal year 2003, work efforts on major
components of the SM-3 were completed generally within their estimated
budget and slightly ahead of schedule. The contractor's improved
performance in fiscal year 2003 resulted, in part, because in March
2003 the program removed the majority of the SDACS work from the SM-3
contract. As a result, the contractor was no longer required to
incorporate SDACS activities, which had been the primary cause of prior
cost and schedule growth, when providing Cost Performance Reports.
Despite improved performance in fiscal year 2003, the contractor
continued to carry a negative cost and schedule variance from problems
that occurred in prior years. As Figures 2 and 3 illustrate, the SM-3
contractor entered fiscal year 2003 with cost overruns of approximately
$46 million and with uncompleted work valued at $4.6 million. By August
2003, however, the contractor reduced its cost overrun and improved its
schedule performance. At its completion, the SM-3 contract exceeded its
budget by $39 million. According to the contractor, technical problems
with the development of the SDACS, kill vehicle, rocket motor, and
guidance section, as well as failures during flight and ground tests,
were responsible for the majority of the cost overrun on the SM-3
contract.
Figure 2: Fiscal Year 2003 Cost Performance (SM-3 Contract Only):
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
Note: Contract ended in August 2003; therefore, there is no reported
September 2003 cost variance.
[End of figure]
Figure 3: Fiscal Year 2003 Schedule Performance (SM-3 Contract Only):
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
Note: Contract ended in August 2003; therefore, there is no reported
September 2003 schedule variance.
[End of figure]
Program officials told us that the majority of the technical problems
associated with SM-3's development, with the exception of the SDACS,
have been resolved. The officials said that they do not expect these
issues to cause negative variances on the new missile contract.
However, technical problems associated with the SDACS could continue to
affect cost and schedule performance on the new missile contract.
Program Risks:
Based on our assessment of fiscal year 2003 activities, we found that
the Aegis BMD program faces key risks in fielding the planned initial
capability by September 2004 and the Block 2004 defensive capability by
December 2005. These risks include the uncertainty of CP3.0E software
performance at the time of initial fielding, questions about the
contractor's readiness to produce interceptors, and concerns about
SDACS development.
Uncertainty of CP3.0E Software Performance:
Program officials are concerned with the inability to test the CP3.0E
software in an operational environment (e.g., during a flight test)
before September 30, 2004, when the element is fielded for its
surveillance and tracking role. Officials told us that there is not
adequate time to test the new surveillance and tracking functionality
before initial defensive operations are declared, but risk reduction
efforts (such as testing earlier builds of the software) are in place
to minimize potential problems. Although the risk reduction efforts
under way would not validate the full functionality of CP3.0E, the
officials expect that these efforts will provide increased confidence
that the CP3.0E software will perform as desired at the time of initial
defensive operations.
They noted that the need to deliver and install CP3.0E before September
30, 2004, was driving much of the schedule risk. Should the CP3.0E
effort fall behind schedule, the program would need to compress its
schedule to meet the deadline for initial defensive operations (IDO).
Research pertaining to estimating the level of effort in developing
software, however, has shown that when schedules are compressed, the
quality of the software effort can be compromised.
Contractor's Readiness to Produce Interceptors:
We found that missile production and delivery is a key program risk;
program officials concurred with our assessment. They indicated that
current MDA plans call for the delivery of 11 to 14 SM-3 missiles by
the end of 2005.[Footnote 8] Program officials also stated that the
first five missiles are being produced at the contractor's research and
development facility. Highly trained technical engineers, with
manufacturing observers, are building these developmental missiles.
Future production missiles will be built by manufacturing labor with
engineering oversight as needed. A transition to this production is
planned but will not occur until production begins on the next set of
12 missiles.
Concerns about SDACS Development:
We found that the greatest performance risk to the Aegis BMD program
pertains to the development of the SDACS, the subsystem that generates
divert pulses to control the orientation and heading of the
interceptor's kill vehicle; program officials agreed with our
assessment. Ground tests conducted in 2002 revealed problems with the
initial SDACS design, specifically with the subassemblies supporting
the operation of the divert pulses. To find a solution to these
problems, MDA in 2002 pursued multiple designs for the SDACS
subassemblies of the kill vehicle, intending to use the most promising
for the program. On the basis of ground test results, MDA selected a
single-piece variation of the original design (referred to as the
"Monolithic Design"). This design employs a multi-pulse concept whereby
(1) a sustain-mode is used to provide low-energy divert and attitude
control of the kill vehicle and (2) an energetic pulse-mode is
available for maximum divert capability.
When the Monolithic SDACS design with its sustain-and pulse-mode divert
capability proved successful in ground testing, the program planned to
flight-test it during FM-5. However, during FM-5, the subassemblies
supporting the energetic pulse-mode failed, causing the kill vehicle to
be less maneuverable. Program officials stated that they are
investigating the failure and believe that the "diverter ball," which
acts as a valve to control the pulse, caused it. Incorporating the
high-energy pulse into the SDACS increased internal operating
pressures, and under the thermal stress, the protective coating of the
diverter ball cracked, disabling normal SDACS operation.
Aegis BMD program officials stated that they do not expect to implement
any design changes related to pulse-mode divert capability in 2004.
Nonetheless, MDA is moving ahead with the procurement of 5 of the 20
Block 2004 missiles utilizing the Monolithic SDACS with reduced divert
capability. According to program officials, these less-capable missiles
provide a credible defense against a large population of the threat and
can be retrofitted to support pulse-mode operations upon the completion
of design updates and testing.
Without the energetic pulse-mode, performance against certain threats
is limited, because the kill vehicle has less divert capability to
compensate for initial targeting errors. This degradation is threat-
dependent, that is, not significant for non-separating targets because
the kill vehicle typically does not have to radically change course to
engage a warhead attached to the booster tank. However, separating
threats under specific scenarios may be problematic. The kill vehicle
may need to expend additional energy to change course and engage a
warhead that is physically separated from its booster tank.
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix III Summary:
Airborne Laser:
Program Description:
The Airborne Laser (ABL) is being developed to shoot down enemy
missiles during the boost phase of flight. Installed onboard a Boeing
747 aircraft, ABL is designed to use a high-energy chemical laser to
rupture the enemy missile's motor casing, causing the missile to lose
thrust or flight control. As part of its Block 2004 effort, the Missile
Defense Agency (MDA) plans to demonstrate the feasibility of using the
prototype ABL aircraft to shoot down a short-range ballistic missile.
This event is referred to as the lethal demonstration.
The Department of Defense (DOD) budgeted about $3.1 billion for ABL
development during fiscal years 2004 through 2009. Earlier, the Air
Force invested approximately $1 billion from 1996 through 2001, and MDA
expended about $1 billion in 2002 and 2003 for related developmental
efforts.
Fiscal Year 2003 Progress Assessment:
Activities in fiscal year 2003 progressed much more slowly and were
more costly than anticipated. Nearly all hardware deliveries,
integration activities, and test events slipped. The program's
underestimation of the complexity of integrating ABL subcomponents into
a working system, in particular, resulted in significant cost growth
and delays during fiscal year 2003.
Schedule: The ABL program continued with the development of the
prototype aircraft, but as noted above, fiscal year 2003 activities
progressed more slowly than anticipated. For example, four of six key
test events were either deferred indefinitely or delayed over a year.
Furthermore, quality issues and difficulty with integration activities
resulted in the slip of a critical test milestone--the demonstration of
individual laser modules linked together to form a single laser beam,
known as "First Light." At the end of fiscal year 2003, the expected
date for this demonstration was March 2004, but the event continues to
slip. As a consequence of the test delays, the lethal demonstration
continues to be pushed back.
Performance: At this stage of ABL development--before the laser has
been operated at full power or critical technologies have been
demonstrated in flight tests--any assessment of effectiveness is
questionable. However, performance indicators used by the program
office to monitor performance indicate that 9 of 12 of the indicators
are at risk in achieving Block 2004 goals.
Cost: Our analysis of prime contractor cost performance reports
indicates that ABL cost performance deteriorated throughout fiscal year
2003. The contractor overran budgeted costs by $242 million and could
not finish $28 million worth of work as planned. The underestimated
complexity of integrating ABL subcomponents into a working system was
the primary driver for the cost growth.
Risks: Our analysis indicates that the complexity and magnitude of
integration activities--delivering a working system for the lethal
demonstration--have been substantially underestimated. Accordingly,
the program continues to be at risk for cost growth and schedule slips.
In addition, a major performance risk for ABL Block 2004 involves
controlling and stabilizing the high-energy laser beam so that
vibration does not degrade the beam's aimpoint. Program officials
stated that they are working to resolve this issue but cannot
demonstrate final resolution before flight testing in 2005.
Appendix III: Airborne Laser:
Background: Element Description:
The Airborne Laser (ABL) element is a missile defense system designed
to shoot down enemy missiles during the boost phase of flight, the
period after launch when the missile is powered by its boosters. As an
element of the Missile Defense Agency's (MDA's) Boost Defense
Segment,[Footnote 9] ABL is expected to engage enemy ballistic missiles
early in their trajectory before warheads and countermeasures can be
released. ABL plans to use a high-energy chemical laser to defeat enemy
missiles by rupturing a missile's motor casing, causing the missile to
lose thrust or flight control. ABL's goal is to prevent the delivery of
the missile's warhead to its intended target.
ABL was initially conceived as a theater system to defeat short-and
medium-range ballistic missiles. However, its role has been expanded to
include the full range of ballistic missile threats, including
intercontinental ballistic missiles (ICBMs).[Footnote 10] In addition,
ABL could be used as a forward-deployed sensor to provide accurate
launch point, impact point, and trajectory data of enemy missiles to
the overarching Ballistic Missile Defense System (BMDS) in support of
engagements by other MDA elements.
The ABL element consists of the following three major components
integrated onboard a highly modified Boeing 747 aircraft.[Footnote 11]
In addition, ground support infrastructure for chemical storage,
mixing, and handling is a necessary component of the element.
* High-energy chemical oxygen-iodine laser (COIL). The laser, which
generates energy through chemical reactions, consists of six laser
modules linked together to produce megawatt levels of power. By using a
defensive weapon that incorporates the speed of light, ABL can destroy
missiles more quickly, giving it a significant advantage over
conventional boost-phase interceptors.
* Beam control/fire control (BC/FC). The BC/FC component's primary
mission is to maintain the beam's quality as it travels through the
aircraft and atmosphere. Through tracking and stabilization, the BC/FC
ensures that the laser's energy is focused on a targeted spot of the
enemy missile.
* Battle management/command and control (BMC2). The BMC2 component is
expected to plan and execute the element's defensive engagements. It is
being designed to work autonomously using its own sensors for launch
detection, but it could also receive early warning data from other
external sensors.
Background: History:
ABL's current development is based on more than 25 years of scientific
research in the Departments of Defense and Energy. The program evolved
primarily from airborne laser laboratory research, which developed
applications for high-energy lasers. The laboratory's research
culminated in a demonstration showing that a low-power, short-range
laser was capable of destroying a short-range, air-to-air missile.
In 1996, the Air Force initiated the Airborne Laser program to develop
a defensive system that could destroy enemy missiles from a distance of
several hundred kilometers. Developmental testing for the program was
expected to conclude in 2003 with an attempt to shoot down a short-
range ballistic missile target. However, in 2002, management authority
and funding responsibility transferred from the Air Force to MDA. In
accordance with MDA planning, the Airborne Laser program restructured
its acquisition strategy to conform to a capability-based approach.
Background: Developmental Phases:
ABL development is proceeding in a series of planned 2-year blocks. The
near-term blocks are known as Blocks 2004, 2006, and 2008. Other blocks
may follow, but on the basis of recent budget documentation, MDA has
not yet defined their content. [Footnote 12]
Block 2004. The overall Block 2004 goal is to demonstrate the
feasibility of the prototype ABL aircraft to defeat--via directed laser
energy--a short-range, threat-representative ballistic missile. This
concluding test event generally is referred to as the lethal shoot-down
demonstration. MDA has no plans to deliver an ABL contingency
capability in the Block 2004 time frame.
Block 2006. The Block 2006 ABL program makes use of the Block 2004
aircraft, but the block's focus is on testing, interoperability with
the BMDS, and increased supportability for an emergency operational
capability.
Block 2008. The program expects to procure a second, upgraded ABL
aircraft in the Block 2008 time frame. It will incorporate upgrades for
enhanced lethality and increased operational suitability. Block 2008
will also focus on making ABL more affordable.
Progress Assessment: Schedule:
During fiscal year 2003, the ABL program planned to complete a series
of activities in preparation for Block 2004. Although the program made
some progress, planned activities progressed much more slowly than
anticipated. These activities included the following:
* designing, fabricating, and delivering subcomponent hardware critical
to the operation of the ABL element (hardware delivery);
* integrating and testing subcomponents as functioning components; and:
* completing a test milestone referred to as "First Light," the first
demonstration--in a ground-test facility--of the integration of six
individual laser modules to produce a single beam of laser energy.
Hardware Delivery:
Delays Affect Entire Program:
ABL contractors delivered critical ABL element hardware during fiscal
year 2003, including subcomponents of the BC/FC component. However, in
each case, hardware delivery was originally scheduled for the end of
fiscal year 2002. (See table 15.) Because these hardware deliveries
were delayed, the schedule for subsequent integration and demonstration
activities was also affected.
Table 15: ABL Program Hardware Deliveries (Fiscal Year 2003):
Hardware delivery: Delivery of Active Ranger System (ARS)[A];
Scheduled date: Sept. 2002;
Completion date: Feb. 2003.
Hardware delivery: Delivery of Target Illuminator Laser (TILL)[B];
Scheduled date: Aug. 2002;
Completion date: Nov. 2002.
Hardware delivery: Delivery of Beacon Illuminator Laser (BILL)[C];
Scheduled date: Aug. 2002;
Completion date: Nov. 2002.
Hardware delivery: Final Delivery of High-Energy Laser Modules;
Scheduled date: Sept. 2002;
Completion date: Apr. 2003.
Source: Missile Defense Agency.
[A] The Active Ranger System is the laser that sits atop the aircraft
and provides preliminary range and tracking data of a target missile.
[B] The Target Illuminator Laser is the laser that sweeps, locks, and
determines the aimpoint on the target.
[C] The Beacon Illuminator Laser is the laser that bounces a beam off
the target missile back to the aircraft and thus measures the amount of
atmospheric disturbance between the aircraft and the target.
[End of table]
Integration and Testing:
Key Test Events Delayed More Than a Year:
Table 16 summarizes the status of major Block 2004 ABL test events,
scheduled sometime during fiscal year 2003. As illustrated, four of the
six test events were either deferred or delayed over a year due to late
hardware and software availability, subcomponent test failures, and
numerous design flaws. Consequently, the lethal demonstration--the
focus of Block 2004 development--has been delayed until February 2005
at the earliest. Other than the surveillance and tracking tests, which
were conducted in flight and have been completed, all scheduled testing
listed in table 16 will be performed in ground facilities, such as the
System Integration Laboratory (SIL) at Edwards Air Force Base,
California.
Table 16: ABL Program Test Events (Fiscal Year 2003):
Test event: Surveillance flight tests;
(6 tests total);
Scheduled date: N/A;
Completion date: July 2002 -;
Event description: Jan. 2003;
Track of fighter aircraft and Lance missile using infrared sensors.
Test event: Participation in GMD flight test (IFT-10);
Scheduled date: Dec. 2002;
Completion date: Dec. 2002;
Event description: Tracked boosting target, which was launched from
Vandenberg AFB, using onboard infrared sensors.
Test event: ARS ground and flight test;
Scheduled date: Dec. 2002;
Completion date: Deferred to;
Event description: 3Q FY 2005;
Tests of ABL tracking and ranging capabilities.
Test event: BC/FC End-to-End Demonstration;
Scheduled date: Feb. 2003;
Completion date: Mar. 2004;
Event description: First test of the fully integrated BC/FC component.
Test event: First Light;
Scheduled date: Feb. 2003;
Completion date: As of Mar. 2004, new test date has not been
established;
Event description: First demonstration of 6-module laser operation at
SIL.
Test event: Full-duration laser operation;
Scheduled date: Mar. 2003;
Completion date: (After First Light);
Event description: Demonstration of 6-module laser operation at SIL
under conditions (time and power) required for shoot-down.
Source: Missile Defense Agency.
Note: Test dates current as of December 2003.
[End of table]
Completion of Test Milestone:
Demonstration of "First Light" Continues to Slip:
The Director, MDA, has made the achievement of Block 2004's "First
Light"--to prove that individual laser modules can be successfully
integrated and operated to generate a single laser beam--a decisive
event for the ABL program. In April 2003 testimony before the Senate
Appropriations Committee, Subcommittee on Defense, the Director stated
that his confidence in meeting the schedule goal for the lethality
demonstration would increase tremendously if "First Light" occurred in
2003. "First Light" did not occur in February 2003 as scheduled and
slipped throughout the fiscal year. As of March 2004, the test event
had not been rescheduled. Numerous and continuing issues have caused
the event to slip, including supply, quality, and technical problems.
For example, specialized valves have been recalled twice, laser fluid
management software has been delayed due to inadequate definition of
requirements, and improperly cleaned plumbing and material issues have
required over 3,000 hours of unplanned work. In addition, delays in
hardware delivery occurred in almost every month of fiscal year 2003.
As a result of the slip in "First Light," the program office did not
exercise a contract option to acquire the Block 2008 aircraft. The
office expected to exercise the option and make the first payment to
the contractor, $30 million of the $170 million total, during the
fourth quarter of fiscal year 2003. The remaining payments of $40
million and $100 million were scheduled for fiscal years 2004 and 2005,
respectively. Because this test event continues to slip, program
officials do not know when they will initiate the acquisition of the
second aircraft.
Progress Assessment: Performance:
Quantitative assessments of ABL effectiveness for boost-phase defense
are necessarily based on end-to-end simulations of ABL operation,
because the element has yet to be demonstrated in flight. At this stage
of development--before the laser has been operated at full power or
flown to examine the jitter issue--any assessment of element
effectiveness is necessarily questionable. Nonetheless, the program
office monitors performance indicators to determine whether the element
is on track in meeting operational performance goals. Based on data
provided to us by MDA, 9 of 12 performance indicators point to some
risk in achieving Block 2004 goals. One indicator in particular,
pertaining to the technology of managing "jitter," was identified as a
risk item by the program office early on and continues to be monitored.
This issue is discussed in more detail later in this appendix.
Progress Assessment: Cost:
The cost of the ABL program continues to grow. MDA expects to invest
about $3.1 billion from fiscal year 2004 through 2009 in the element's
development. This is in addition to the approximately $2 billion
invested from the program's initiation in 1996 through fiscal year
2003.
The program uses most of the funds it receives to fund the element's
prime contract. However, in fiscal year 2003, the contractor overran
its budgeted costs by $242 million.
Total Program Cost:
ABL Program Costing Approximately $510 Million per Year:
ABL program costs for the next 6 fiscal years are expected to be around
$3.1 billion. This covers research and development efforts for Blocks
2004, 2006, and 2008. Table 17 shows the expected costs of the program
by fiscal year through 2009, the last year for which MDA published its
funding plans.
Table 17: ABL Planned Cost:
Dollars in millions of then-year dollars:
Block: Block 2004;
Fiscal Year 2004: $603;
Fiscal Year 2005: $474;
Fiscal Year 2006: $0;
Fiscal Year 2007: $0;
Fiscal Year 2008: $0;
Fiscal Year 2009: $0;
Total: $1,077.00
Block: Block 2006;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Fiscal Year 2006: 533;
Fiscal Year 2007: 587;
Fiscal Year 2008: 0;
Fiscal Year 2009: 0;
Total: 1,120.00
Block: Block 2008;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Fiscal Year 2006: 0;
Fiscal Year 2007: 0;
Fiscal Year 2008: 445;
Fiscal Year 2009: 425;
Total: 870
Total;
Fiscal Year 2004: $603;
Fiscal Year 2005: $474;
Fiscal Year 2006: $533;
Fiscal Year 2007: $587;
Fiscal Year 2008: $445;
Fiscal Year 2009: $425;
Total: $3,067.00
Source: Missile Defense Agency.
[End of table]
ABL costs from 1996 through fiscal year 2001 were Air Force costs that
were not broken out by block but totaled a little over $1 billion.
During that time, the greatest amount expended on the program in a
given fiscal year was $311.4 million in fiscal year 2000.
When the ABL program transitioned to MDA in fiscal year 2002, the
conversion to a more robust development program increased projected
costs. The planned budget increased to approximately $465 million and
$585 million in fiscal years 2002 and 2003, respectively. Program
officials stated that they have also implemented a more robust
developmental staff in response to numerous test failures, quality
problems and complex engineering issues, all of which caused annual
costs to increase after ABL's transition to MDA.
Prime Contractor Fiscal Year 2003 Cost and Schedule Performance:
Significant Cost Growth and Schedule Slips:
The government routinely uses contractor Cost Performance Reports to
independently evaluate prime contractor performance relative to cost
and schedule. Generally, the reports detail deviations in cost and
schedule relative to expectations established under the contract.
Contractors refer to deviations as "variances." Positive variances--
activities costing less or completed ahead of schedule--are generally
considered as good news and negative variances--activities costing more
or falling behind schedule--as bad news.
Our analysis of contractor Cost Performance Reports indicates that ABL
cost and schedule performance deteriorated throughout fiscal year 2003.
In fiscal year 2003 alone, the ABL program incurred cost overruns of
$242 million, which resulted primarily from integration and testing
issues. Program officials indicated that it has taken longer to
fabricate plumbing, install hardware, and conduct system checkouts.
Furthermore, hardware that did not perform as expected and safety
preparedness tended to slow down the program. In short, initial
estimates of integration-related activities were substantially
underestimated. Our analysis shows that these problems contributed to
more than 80 percent of the overall cost overrun. The same analysis
indicates that the contractor could not finish $28 million of work as
planned during the same period of time.
Finally, based on the contractor's cost and schedule performance in
fiscal year 2003, we estimate that the current ABL contract will
overrun its budget by between $431 million and $942 million.
Figures 4 and 5 show the contractor's performance in fiscal year 2003.
The negative variances indicate that the ABL program is exceeding its
budgeted costs and is not completing scheduled work as planned.
Figure 4: Fiscal Year 2003 Cost Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
Figure 5: Fiscal Year 2003 Schedule Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
The element's largest contract, known as the Block 2004 prime contract,
covered a period of performance from November 1996 until about 6 months
after the lethal demonstration when it was awarded. However, the
program office recently announced that it will close-out this contract,
valued at approximately $2.2 billion, and award, in increments, follow-
on contracts for the remaining Block 2004 work. The program manager
told us that by awarding the remaining work in about one-year
increments, the contractor should be able to establish more accurate
cost and schedule estimates. In addition, the new contract structure is
expected to encourage the contractor to gain knowledge from near-term
tests, rather than concentrating on the longer-term goal of conducting
the lethal demonstration.
Program Risks:
Based on our assessment of fiscal year 2003 activities, we found that
the complexity and magnitude of integration activities--to deliver a
working system for the lethal shoot-down demonstration--has been
substantially underestimated. Accordingly, the program continues to be
at risk for cost growth and schedule slips. We also found that the
uncertainty regarding the element's ability to control environmental
vibration on the laser beam--jitter--is a serious performance risk for
the Block 2004 program. Finally, we found that weight distribution
across the airplane may be a key risk for future blocks.
Jitter as Major Performance Risk:
The major performance risk for Block 2004 involves controlling and
stabilizing the high-energy laser beam so that vibration unique to the
aircraft environment does not degrade beam aimpoint. Reducing this so-
called jitter is crucial if the laser beam is to impart enough energy
on a fixed spot of the target to rupture the missile's motor casing.
Currently, jitter control is developed and tested in a laboratory
environment and is the least mature of ABL's critical technologies.
Program officials told us that they are improving jitter analysis tools
and even considering potential hardware design changes to reduce the
level of vibration. They also noted that final tuning and resolution of
the jitter issue would not be demonstrated before flight testing is
conducted in 2005.
Weight Distribution:
If future blocks require additional laser modules to increase ABL's
military utility, weight distribution across the aircraft's frame may
become a key issue. The program office recognizes this problem and has
initiated a weight-reduction and weight-redistribution effort that
includes component redesign and composite materials. The program office
is also studying a possible redesign of the aircraft frame that would
allow laser modules to be moved forward to relieve stress on the
airframe.
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix IV Summary:
Command, Control, Battle Management, and Communications:
Program Description:
The Command, Control, Battle Management, and Communications (C2BMC)
element is the integrating and controlling element of the Ballistic
Missile Defense System (BMDS). It is designed to link all system
elements, manage real-time battle information for the warfighter, and
coordinate element operation to counter ballistic missile attacks in
all phases of flight.
Fiscal Year 2003 Progress Assessment:
The C2BMC program is working toward the delivery of a limited
capability by September 2004 followed by an upgrade in defensive
capabilities by the end of 2005.
The Department of Defense (DOD) budgeted about $1.3 billion for C2BMC
development during fiscal years 2004 through 2009. Earlier, MDA
expended $165 million in fiscal years 2002 and 2003 for element
development.
The C2BMC team executed the program within budget but slightly behind
schedule in fiscal year 2003. Important activities, such as the
completion of software testing and operator training, are continuing in
fiscal year 2004 to ready the element for initial defensive operations
(IDO) by September 2004.
Schedule: The C2BMC program is on track to deliver the software needed
for the September 2004 defensive capability. However, the program faces
a tight schedule to complete software development and testing. Other
activities, such as training, also are being completed to make the
system operational. The program office indicated that all such
activities are on track for timely completion.
Performance: The program office predicts that key indicators of C2BMC
operational performance will meet established requirements when the
element comes online in September 2004. Tests, which began in September
2003, will determine if C2BMC's technical objectives are being
achieved. Test results beyond fiscal year 2003 have been positive thus
far.
Cost: Our analysis of the prime contractor's cost performance reports
shows that the contractor completed planned work under budget but
slightly behind schedule. Specifically, the contractor under-ran
budgeted costs by $5.3 million in fiscal year 2003 because of a slower
than anticipated increase in staffing needed for the new IDO
requirements.
Key risks: The C2BMC is tracking and mitigating key BMDS-specific risks
pertaining to the fielding of the initial capability by September 2004
and the Block 2004 defensive capability by December 2005. Notably,
development of the C2BMC element is proceeding concurrently with the
development of other elements in the BMDS. Changes in one element's
design--especially in how that element interfaces with the C2BMC
element--could delay C2BMC development and fielding. In addition, the
BMDS concept of operations continues to evolve, leading to
uncertainties about how the C2BMC element will be operated. Finally,
the uncertainty regarding the reliability of communications links with
the Aegis BMD element threatens to degrade overall system performance.
In spite of these communications problems, the existing capability is
sufficient to support IDO performance goals.
[End of section]
Appendix IV: Command, Control, Battle Management, and Communications:
Background: Element Description:
The Command, Control, Battle Management, and Communications (C2BMC)
element is being developed as the overall integrator of the Ballistic
Missile Defense System (BMDS). Its objective is to tie together all
system elements--such as GMD and Aegis BMD--so that system
effectiveness is enhanced beyond that achieved by stand-alone systems.
Unlike other system elements, C2BMC has neither a sensor nor weapon.
Rather, it is primarily a software system housed in command centers or
suites.[Footnote 13]
The C2BMC program is working to deliver a limited operational
capability in the 2004-2005 time frame. The principal function of the
first increment, Block 2004, is to provide situational awareness to
certain combatant commanders and others--through the dissemination of,
for example, early warning data--enabling them to monitor a missile
defense battle as it unfolds. It also will provide certain combatant
commanders with the ability to perform missile defense planning.
However, battle management functions like centralized weapons
allocation--such as determining the number and timing of interceptor
launches--will not be part of the Block 2004 capability but is expected
to be part of future C2BMC blocks.
Over time, the C2BMC element will be enhanced to provide overarching
control and execution of missile defense engagements with the aim of
implementing "layered defense" through the collective use of individual
BMDS elements. As the name indicates, C2BMC is comprised of three major
components:
* Command and control. The command and control component is designed to
plan, control, and monitor missile defense activities. When fielded,
the command and control component provides warfighting aids needed by
the command structure to formulate and implement informed decisions. In
particular, the component is meant to quickly re-plan and adapt the
element to changing mission requirements.
* Battle management. The role of the battle management component is to
formulate and coordinate the various missile defense functions--
surveillance, detection, tracking, classification, engagement, and
kill assessment--needed to execute the ballistic mission defense
mission. The planned battle management will direct the operation of
various BMDS elements and components, consistent with pre-established
rules of engagement,[Footnote 14] based upon data received from system
sensors.
* Communications. Communication is a key enabler for the integration of
the BMDS. The objective of systems communications is to manage and
achieve the dissemination of information necessary to perform the
battle management and command and control objectives.
The C2BMC program is following the MDA capability-based acquisition
approach that emphasizes testing, spiral development, and evolutionary
acquisition through the use of 2-year capability blocks. Within these
blocks, MDA expects to evolve the C2BMC element through a series of
software upgrades known as "spirals," each of which increases the
element's capability to perform the ballistic missile defense mission.
Background: History:
MDA initiated the C2BMC program in 2002 as a new element of the BMDS.
Program officials indicated that Block 2004 C2BMC software is based on
the Air Force's Combatant Commander's Integrated Command and Control
System, the Air Force's Joint Defensive Planner software, and GMD-
developed fire control (battle management) software.
Background: Developmental Phases:
C2BMC development efforts are aligned according to Block 2004, Block
2006, and beyond.
Block 2004. The Block 2004 defensive capability is being rolled out in
two phases: initial defensive operations (IDO) and the Block 2004
defensive capability. By September 2004 when IDO is available, C2BMC
will provide situational awareness, planning capabilities, and
communications "backbone" to allow warfighters to monitor the ballistic
missile defense battle. The software build associated with IDO's
defensive capability is referred to as "Spiral 4.3." MDA is working
with combatant commanders to define the capabilities of "Spiral 4.5"--
the final version of the Block 2004 defensive capability that is
expected to be fielded by December 2005--which will be an enhancement
of the IDO C2BMC capability defined by Spiral 4.3. MDA is also
activating C2BMC suites at U.S. Strategic Command (USSTRATCOM), U.S.
Northern Command (USNORTHCOM),[Footnote 15] U.S. Pacific Command
(USPACOM), and other locations including the National Capital Region.
Block 2006. The incorporation of battle management capabilities in the
C2BMC element begins with Block 2006. The element will provide real-
time battle management to fuse available sensor information, track the
threat throughout its entire trajectory, and select the appropriate
elements to engage the threat. For example, the C2BMC battle manager
may use radars across multiple elements to generate a single track of
the threat and direct GMD to launch interceptors. Additional C2BMC
sites will also be activated during this time frame.
C2BMC's long-term objective is to tie all BMDS elements and sensors
into a distributed, worldwide, integrated, and layered missile defense
system.
Progress Assessment: Schedule:
The C2BMC program deputy director indicated that the program is on
schedule to meet IDO and Block 2004 expectations, that is, to have the
BMDS on alert by the end of September 2004 for IDO and upgraded by the
end of December 2005. To achieve this goal, the C2BMC element is:
* developing, testing, and verifying Block 2004 C2BMC software
(Software delivery);
* integrating the C2BMC element into the BMDS and incorporating
communications upgrades; and:
* making the BMDS operational, including warfighter Concept of
Operations (CONOPS),[Footnote 16] warfighter training, and activating
C2BMC sites.
C2BMC Software Delivery:
IDO Software Development Completed, but Testing and Verification
Continues:
Table 18 summarizes the principal activities pertaining to the
development and testing of the first three spirals of Block 2004 C2BMC
element software. The development of Spiral 4.3 in nearly completed,
and BMDS-level testing (Cycle-3 testing[Footnote 17] and Cycle-4
testing[Footnote 18]) of this spiral will be conducted to some extent
before IDO, e.g., during GMD integrated flight tests and war games.
Table 18: Block 2004 C2BMC Activities--Develop, Test, Verify Software:
Software build: Spiral 4.1;
Activity: Development;
Actual/Anticipated completion date: Mar. 2003;
Software build: Spiral 4.1;
Activity: Testing;
Actual/Anticipated completion date: Oct. 2003.
Comments: Development and testing completed. Functional and performance
testing successful. Spiral 4.1 will be used in Missile Defense
Integration Exercise 03 for verification.[A].
Software build: Spiral 4.2;
Activity: Development;
Actual/Anticipated completion date: Sept. 2003;
Software build: Spiral 4.2;
Activity: Testing;
Actual/Anticipated completion date: Jan. 2004 (Cycle 3).
Comments: Development of Spiral 4.2 completed and delivered for system
testing. Spiral 4.2 expected to be used in Integrated Missile Defense
War Game 03-2 and Missile Defense Integration Exercise 04a for
verification.[B].
Software build: Spiral 4.3;
Activity: Development;
Actual/Anticipated completion date: May 2004;
Software build: Spiral 4.3;
Activity: Testing;
Actual/Anticipated completion date: July 2004 (Cycle 3);
Comments: Block 2004 (IDO Focus) Capability Specification delivered.
"Build Plan" and "Spiral Content Agreement" completed.
Software build: Spiral 4.3;
Activity: Testing;
Actual/Anticipated completion date: Dec. 2004 (Cycle 4).
Source: Missile Defense Agency.
[A] Missile Defense Integration Exercise: Conducted to characterize
the degree of integration and interoperability between BMDS elements
to operate as a single system.
[B] Integrated Missile Defense War Game: Conducted to allow the User
community to gain insight and provide feedback on operational issues.
[End of table]
The program's Spiral Engineering Team has not fully defined the
capabilities planned for Spirals 4.4 and 4.5, the software builds
leading up to the Block 2004 defensive capability of December 2005. The
team expects to complete the definitions of the Spirals 4.4 and 4.5 in
March 2004 and July 2004, respectively.
Communications and Integration:
Activities Completed as Planned:
The C2BMC element is upgrading existing communications systems and
developing capabilities to allow all BMDS components to exchange data,
including command and control orders. Table 19 summarizes the principal
activities completed in fiscal year 2003 pertaining to C2BMC's role in
system integration and communications. These activities were generally
completed on time.
Table 19: Block 2004 C2BMC Activities--Communications and Integration:
Activity: Approval of Block 2004 Network Design;
Date completed: Nov. 2002.
Activity: Completion of Block 2004 Communications Network baseline;
Date completed: June 2003.
Activity: Approval of all element Interface Control Specifications[A];
Date completed: June 2003.
Activity: Successful demonstration of initial Aegis-Regional Gateway-
C2BMC connectivity;
Date completed: July 2003.
Activity: Completion of draft C2BMC-GMD Element Interface Description
Document[B];
Date completed: Aug. 2003.
Activity: Completion of draft C2BMC-Aegis BMD Element Interface
Description Document;
Date completed: Feb. 2004.
Source: Missile Defense Agency.
[A] An element Interface Control Specification between the C2BMC suite
and external elements defines the functional, informational, and
physical requirements for the interfaces between the C2BMC suite and
that part of the external element interface adapted to establish
message passing and protocol compatibility between two elements.
[B] The Element Interface Description Document is developed to provide
the detail needed to support implementation of the interface between
the C2BMC and a given element:
[End of table]
Operational Capability:
Program Taking Steps to Make BMDS Operational:
A variety of activities needed if the C2BMC is to deliver an
operational BMDS have been completed or are ongoing. These activities
include site activation, which is required before the C2BMC suites are
built; the warfighter developing a CONOPS; and training military
operators for conducting ballistic missile defense missions.
* Site activation. Full site surveys have been conducted, site
installation plans have been signed, and equipment has been ordered for
USSTRATCOM, USNORTHCOM, and USPACOM. This also has been done for one
National Capital Region site. Equipment installation will begin at the
end of March 2004 and continue throughout the summer.
* CONOPS. A conference to write a CONOPS was held in November 2003.
* Training. Full operator training is scheduled to begin at USNORTHCOM
in June 2004, USSTRATCOM in June 2004, and USPACOM in July 2004.
Training for the National Capital Region site is also expected to begin
in July 2004. Part of the system-level training is participation in
Integrated Missile Defense War Games.
Progress Assessment: Performance:
Spiral tests for each software build will determine if C2BMC's
technical objectives are being achieved. These tests are expected to
indicate if the program needs to make adjustments, such as adding
personnel to work on identified problems. The program office predicts,
and planned fiscal year 2004 testing is expected to verify, that all
top-level C2BMC performance indicators will meet operational
performance goals when the IDO capability comes online in September
2004.
Progress Assessment: Cost:
MDA expects to invest about $1.3 billion from fiscal year 2004 through
2009 in the development and enhancement of the C2BMC element. This is
in addition to the $165.4 million expended in fiscal years 2002 and
2003.
The program uses most of the funds it receives to fund the element's
prime contract. During fiscal year 2003, the contractor completed
planned work slightly behind schedule, but the work cost less than
projected.
Total Program Cost:
C2BMC Program Costing Approximately $220 Million per Year:
The C2BMC program's planned costs for the next 6 fiscal years are
expected to be around $1.3 billion. This includes costs for Blocks
2004, 2006, and Block 2008. In addition, the program expended $68.0
million and $97.4 million in fiscal years 2002 and 2003, respectively.
Table 20 shows expected C2BMC program costs by fiscal year through
2009, the last year for which MDA published its funding plans.
Table 20: C2BMC Planned Cost:
Dollars in Millions of then-year dollars:
Block: Block 2004;
Fiscal Year 2004: $116.5;
Fiscal Year 2005: $154.0;
Fiscal Year 2006: $0;
Fiscal Year 2007: $0;
Fiscal Year 2008: $0;
Fiscal Year 2009: $0;
Total: $270.5.
Block: Block 2006;
Fiscal Year 2004: 26.7;
Fiscal Year 2005: 58.2;
Fiscal Year 2006: 186.4;
Fiscal Year 2007: 200.1;
Fiscal Year 2008: 0;
Fiscal Year 2009: 0;
Total: 471.4.
Block: Block 2008;
Fiscal Year 2004: 0.4;
Fiscal Year 2005: 10.8;
Fiscal Year 2006: 33.9;
Fiscal Year 2007: 40.4;
Fiscal Year 2008: 242.7;
Fiscal Year 2009: 246.3;
Total: 574.5.
Total;
Fiscal Year 2004: $143.6;
Fiscal Year 2005: $223.0;
Fiscal Year 2006: $220.3;
Fiscal Year 2007: $240.5;
Fiscal Year 2008: $242.7;
Fiscal Year 2009: $246.3;
Total: $1,316.4.
Source: Missile Defense Agency.
[End of table]
Prime Contractor Fiscal Year 2003 Cost and Schedule Performance:
Efficient:
The prime contract consumes the bulk of the program's budget: about 97
percent of the Block 2004 budget supports the prime contractor team and
3 percent supports government efforts. The prime contract is an Other
Transaction Agreement (OTA),[Footnote 19] which functions much like a
prime contract. Through an OTA, the C2BMC element is able to take
advantage of more collaborative relationships between industry, the
government, Federally Funded Research and Development Centers, and
University Affiliated Research Centers. The C2BMC Missile Defense
National Team (MDNT), for which Lockheed Martin Mission Systems serves
as the industry lead, is developing and fielding the C2BMC element of
the BMDS.
The government routinely uses contractor Cost Performance Reports to
independently evaluate the prime contractor's performance relative to
cost and schedule. Generally, the reports detail deviations in cost and
schedule relative to expectations established under the contract.
Contractors refer to deviations as "variances." Positive variances--
activities costing less or completed ahead of schedule--are generally
considered as good news and negative variances--activities costing more
or falling behind schedule--as bad news.
In fiscal year 2003, the program expended $97.4 million for all efforts
associated with the development of the C2BMC element. Our analysis of
contractor Cost Performance Reports indicates that C2BMC's efforts are
being completed with "cost efficiency." That is, C2BMC work is costing
slightly less than estimated. Specifically, there was a $5.3 million
cost under-run incurred during fiscal year 2003. (See figure 6.) During
this time, the contract also had an average cumulative Cost Performance
Index of 1.04, meaning that for every budgeted dollar spent to
accomplish scheduled work, the contractor actually completed $1.04
worth of scheduled work.
Figure 6: Fiscal Year 2003 Cost and Schedule Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
However, contractor Cost Performance Reports showed that work is
slightly behind schedule. According to program officials, understaffing
is the primary reason for any schedule delays. The combination of a
government-directed hiring slowdown and the limited numbers of highly
qualified personnel in the areas of command, control, battle
management, and communications available to work on the program
resulted in a slower than anticipated increase in staffing.
To ensure that information reported in Cost Performance Reports can be
relied upon, programs generally conduct Integrated Baseline Reviews of
the prime contract. The review verifies that the contractor's
performance measurement baseline,[Footnote 20] against which the
contractor measures its cost and schedule performance, includes the
work directed by the contract. It also verifies that the budget and
schedule attached to each work task are accurate, that contractor
personnel understand the work task and have been adequately trained to
make performance measurements, and it ensures that risks have been
properly identified. According to DOD guidance, a review should be
conducted within 6 months of the award of a new contract or major
change to an existing contract.
Although our analysis of C2BMC Cost Performance Reports has not shown
any significant cost or schedule variances, an Integrated Baseline
Review was not conducted for the Other Transaction Agreement on which
we reported the contractor's cost and schedule performance. According
to C2BMC contract officials, the technical baseline was re-established,
and budgets and schedules were realigned to reflect changes in mission
priorities, namely, to have the element ready and available for IDO.
Integrated Baseline Reviews are planned for the future.
Program Risks:
The C2BMC is tracking and mitigating key BMDS-specific risks pertaining
to the fielding of the initial capability by September 2004 and the
Block 2004 defensive capability by December 2005. These risks pertain
to the integration of C2BMC with other system elements, the continuing
evolution of the BMDS CONOPS, and the unreliability of a communications
link for the Aegis BMD element.
Integration:
Development of the C2BMC element is proceeding concurrently with the
development of other system elements, such as GMD and Aegis BMD.
Changes in one element's design, especially with how it interfaces with
the C2BMC element, could result in temporary incompatibilities during
Block 2004 integration. The potential consequences include delays in
C2BMC development and fielding, increased costs, and reduced software
quality. The program office is tracking this item as a key BMDS-level
risk and devoting resources to prevent the realization of integration
incompatibilities.
Evolving CONOPS:
Changes in the roles and responsibilities of combatant commanders for
the missile defense mission are leading to uncertainties in the BMDS
concept of operations. This affects how the warfighter prepares,
through training and other procedures, to operate the C2BMC element
once it becomes operational. The C2BMC program office acknowledges this
risk and has efforts under way to address it. For example, the office
is actively engaging military users in exercises and war games to
provide the users with an opportunity to recognize their needs in an
operational environment so that they may better define CONOPS
requirements.
Communications:
Uncertainty regarding the reliability of communications links with the
Aegis BMD element, a system-level risk tracked by the C2BMC program
office, threatens to degrade overall system performance. Nonetheless,
program officials told us that the existing capability is sufficient to
support IDO performance goals and that MDA plans to enhance Block
2004's performance by upgrading existing communication
components.[Footnote 21]
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix V Summary:
Ground-based Midcourse Defense:
Program Description:
The Ground-based Midcourse Defense (GMD) element is a missile defense
system being developed to protect the United States against long-range
ballistic missile attacks. During the 2004-2005 time frame, the GMD
program office plans to deliver an operational capability that provides
protection against limited ballistic missiles attacks from Northeast
Asia and the Middle East.
The GMD program is expected to deliver an initial capability by the end
of September 2004, which is known as Initial Defensive Operations
(IDO). By the end of calendar year 2005, MDA plans to have augmented
the IDO capability with additional interceptors and radars.
The Department of Defense (DOD) budgeted about $12.9 billion for GMD's
development and fielding during fiscal years 2004 through 2009.
Earlier, DOD expended about $12.4 billion between fiscal years 1996 and
2003 for related research and development.
Fiscal Year 2003 Progress Assessment:
The GMD program completed many planned activities that are expected to
lead to the September 2004 initial capability known as IDO. The delay
in the development and delivery of GMD interceptors, however, has
caused flight tests (intercept attempts) leading to IDO to slip 10
months. These problems also resulted in the growth of program costs.
Schedule: Site preparation, including construction of missile silos and
facilities at Fort Greely, Alaska, and Vandenberg Air Force Base,
California, is on schedule. Activities to upgrade existing radars are
also on track. However, the program has been challenged by
developmental and production issues with the interceptor--comprising a
booster and kill vehicle--and will not meet MDA's upper-end goal of
delivering and fielding 10 interceptors by September 2004.
Performance: GMD has demonstrated the ability to destroy target
warheads through "hit-to-kill" intercepts in past flight tests. These
flight tests, however, were developmental in nature--the element has
yet to be tested under operationally realistic conditions. Moreover, as
noted above, the flight test program leading up to IDO has been
compressed. As a result, MDA has a limited opportunity to characterize
GMD's performance before initial fielding. Nonetheless, the program
office contends that GMD is on track to meet operational performance
goals.
Cost: Our analysis of the prime contractor's cost performance reports
shows that the contractor overran its budgeted costs in fiscal year
2003 by $138 million and was unable to complete $51 million worth of
scheduled work. Developmental issues with the interceptor's booster and
kill vehicle have been the leading cause of cost overruns and schedule
slips; for example, the interceptor's development cost $127 million
more in fiscal year 2003 than the contractor budgeted.
Risks: GMD faces significant testing and performance risks, which are
exacerbated by an optimistic schedule to meet the September 2004
deadline for fielding the initial capability. Specifically, delays in
flight testing have left the program with only limited opportunities to
demonstrate the performance of fielded components and to resolve any
problems uncovered during flight testing prior to September 2004.
Uncertainty with the readiness of interceptor production could prevent
MDA from meeting its program goal of fielding 20 interceptors by the
end of 2005. Finally, an unresolved technical issue with the kill
vehicle adds uncertainty to the element's performance.
Appendix V: Ground-based Midcourse Defense:
Background: Element Description:
The Ground-based Midcourse Defense (GMD) program expects to deliver an
operational capability in the 2004-2005 time frame as an interoperable
element of the Ballistic Missile Defense System (BMDS). The first
increment of the GMD element, known as Block 2004, is being fielded in
two major phases:
* Initial Defensive Operations (IDO). GMD is expected to deliver an
initial capability by the end of September 2004. The principal
components include a maximum of 10 interceptors (6 at Fort Greely,
Alaska, and 4 at Vandenberg Air Force Base, California); GMD fire
control nodes for battle management and execution at Fort Greely and
Schriever Air Force Base, Colorado; an upgraded Cobra Dane radar at
Eareckson Air Station, Alaska; and an upgraded early-warning radar at
Beale Air Force Base, California. With this initial capability, MDA
expects to provide the United States with protection against a limited
ballistic missile attack launched from Northeast Asia.
* Block 2004 Defensive Capability. By the end of calendar year 2005,
MDA plans to augment the IDO capability by installing additional
interceptors at Fort Greely and Vandenberg Air Force Base (for a total
of 20), deploying a sea-based X-band radar, and upgrading the early-
warning radar at Fylingdales, England. These enhancements are expected
to provide additional protection from intercontinental ballistic
missiles (ICBMs) launched from the Middle East.
Figure 7 illustrates the Block 2004 GMD components, which are situated
at several locations within and outside of the United States.
Figure 7: GMD Element:
[See PDF for image]
Sources: MDA (data); GAO (presentation).
[End of figure]
Background: History:
The GMD element can be traced back to the mid-1980s, when the
Department of Defense (DOD) conducted experiments designed to
demonstrate the feasibility of employing hit-to-kill technology--the
ability to destroy a missile through a direct collision--for missile
defense. During the early 1990s, a technology readiness program
continued the development of interceptor technology. These efforts
culminated in the establishment of the National Missile Defense (NMD)
program in 1996 to develop and field a national missile defense system
as a major defense acquisition program.
The NMD program office's mission was to develop a system that could
protect the United States from ICBM attacks and to be in a position to
deploy the system by 2005,[Footnote 22] if the threat warranted. The
system was to consist of space-and ground-based sensors, early-warning
radars, hit-to-kill interceptors, and battle management components. The
current GMD program is based directly on research and development
conducted by the NMD program. GMD is now one "element" of the
overarching BMDS, which is funded and managed by the Missile Defense
Agency (MDA).
Background: Developmental Phases:
GMD's development and fielding are proceeding in a series of planned 2-
year blocks. The near-term blocks are known as Blocks 2004 and 2006.
The developmental efforts of each block incrementally increase element
capability by maturing the hardware's design and upgrading software.
Block 2004. During Block 2004, MDA expects to field a basic hit-to-kill
capability that can be enhanced in later blocks. Originally, the
program's Block 2004 focus was on development and testing. However, the
December 2002 directive by the President to begin fielding a missile
defense system in 2004 affected the program's Block 2004 direction.
According to program office officials, this change resulted in GMD's
shifting to a more production-oriented program, accelerating activities
to make the element operational.
Block 2006. Block 2006 is focused on improving and enhancing the Block
2004 GMD capability. The program expects to improve existing
capabilities, field additional interceptors, and conduct tests to
demonstrate performance against more complex missile threats and
environments. It also expects to upgrade the early-warning radar
located at Thule Airbase, Greenland, for expanded sensor coverage.
Progress Assessment: Schedule:
The GMD program completed many of the activities planned for fiscal
year 2003. For example, the program accomplished non-technical
activities such as site preparation and facility construction at many
locations, especially at Fort Greely, on or ahead of schedule.
Similarly, activities leading to the development and delivery of the
element's battle management component and of radars that the element
depends upon to detect and track targets were generally completed on
schedule. However, delays in the development and delivery of the GMD
interceptor--particularly due to one of its two boosters--caused
intercept attempts leading up to IDO to slip 10 months or more.
Construction of GMD Element Facilities:
on Track to Support Initial Deployment:
Many of the GMD activities completed in fiscal year 2003 pertain to the
construction of infrastructure--missile silos, buildings, and other
facilities--at GMD's various sites. The largest construction effort is
at Fort Greely, where missile silos and supporting facilities are being
built. Additional construction activities are occurring at Eareckson
Air Base and at Vandenberg Air Force Base (AFB), where four missile
silos are being modified. According to MDA, all construction activities
are on or ahead of schedule. Table 21 summarizes the major construction
activities undertaken in fiscal year 2003 and their estimated
completion dates.
Table 21: Progress of Major GMD Construction Projects:
Activity: Interceptor Silo Construction/Modification;
Location: Fort Greely;
Completion Date: Feb. 2004;
Status: Completed.
Activity: Interceptor Silo Construction/Modification;
Location: Vandenberg AFB;
Completion Date: Apr. 2004;
Status: On schedule.
Activity: Readiness and Control Building;
Location: Fort Greely;
Completion Date: Nov. 2003;
Status: Completed.
Activity: Mechanical Electrical Building;
Location: Fort Greely;
Completion Date: July 2003;
Status: Completed.
Activity: Power Plant Upgrade;
Location: Fort Greely;
Completion Date: Oct. 2003;
Status: Completed.
Activity: Entry Control Station;
Location: Fort Greely;
Completion Date: Nov. 2003;
Status: Completed.
Activity: Missile Assembly Building;
Location: Fort Greely;
Completion Date: Jan. 2004;
Status: Completed.
Activity: Perimeter Security;
Location: Fort Greely;
Completion Date: Mar. 2004;
Status: Completed.
Source: Missile Defense Agency.
[End of table]
GMD Component Development:
Progress Made, but Interceptor Development Is Problematic:
In fiscal year 2003, the GMD program focused on the development of its
Block 2004 components: (1) GMD fire control nodes and communications
network, (2) upgraded early-warning radars, (3) Cobra Dane radar, (4)
sea-based X-band radar, and (5) ground-based interceptors. Many of the
activities planned for fiscal year 2003, such as hardware delivery, did
not culminate in 2003. Rather, the completion dates are scheduled in
fiscal years 2004 or 2005 to coincide with the start of defensive
operations.
GMD Fire Control Component:
Development on Track:
The fire control component[Footnote 23] integrates and controls the
other components of the GMD element. With input from operators, the
fire control software plans engagements and directs GMD components,
such as its radars and interceptor, to carry out a mission to destroy
enemy ballistic missiles. The in-flight interceptor communications
system (IFICS), which is part of the fire control component, enables
the fire control component to communicate with the kill vehicle while
it is en route to engage a threat.
According to contractor reports, the GMD fire control component effort
is proceeding on schedule and is expected to be ready for IDO. For
example, the installation of equipment for the communication networks
and the fire control nodes are on schedule. Additionally, the program
completed the installation of a fiber optic ring--the so-called
CONUS[Footnote 24] Ring--that connects all the command, control, and
communication networks of the GMD element.
Upgraded Early Warning Radars:
Development on Track:
The early warning radar is an upgraded version of existing UHF-band
surveillance radars used by the Air Force for strategic warning and
attack assessment. For Block 2004, the GMD program is upgrading two
early warning radars--one at Beale AFB and another at Fylingdales
Airbase--to enable the radars to more accurately track enemy missiles.
The upgrades include improvements to both the hardware and software.
Fiscal year 2003 activities related to upgrading the early warning
radar at Beale AFB included:
* developing and testing software;
* acquiring radar hardware and data processors;
* completing the design of and constructing the Beale facility; and:
* supporting flight, ground, and radar certification tests.
According to program office documentation, the completion of the Beale
upgrade is on track for meeting the September 2004 IDO date, even
though software development fell behind schedule in fiscal year 2003.
Program officials stated that they have not yet begun upgrading the
early warning radar at Fylingdales, which they expect to complete by
December 2005.
Cobra Dane Radar:
Development On Track:
The Cobra Dane radar, located at Eareckson Air Station on Shemya
Island, Alaska, is currently being used to collect data on ICBM test
launches out of Russia. Cobra Dane's surveillance mission does not
require real-time communications and data-processing capabilities;
therefore, it is being upgraded to be capable of performing the missile
defense mission as part of the Block 2004 architecture. Once upgraded,
Cobra Dane is expected to operate much like the upgraded early warning
radar at Beale AFB. Although its hardware needs only minor improvement,
Cobra Dane's mission software is being revised for its new application.
The program plans to use existing software and develop new software to
integrate Cobra Dane into the GMD architecture. It is also modifying
the Cobra Dane facility to accommodate enhanced communication
functions.
In fiscal year 2003, the GMD program:
* began hardware installation,
* completed software development--testing is continuing, and:
* finished the modification of the Cobra Dane facility.
In general, the program made significant progress in upgrading the
Cobra Dane radar during fiscal year 2003. According to program office
documentation and our analysis of GMD's master schedule, Cobra Dane is
on track for meeting the September 2004 IDO date.
Sea-Based X-Band Radar:
Development on Track:
The GMD program office is managing the development of a sea-based X-
band radar (SBX) to be delivered and integrated into the BMDS by the
end of Block 2004. SBX will consist of an X-band radar--much like the
one located at Reagan Test Site that has been used in past flight
tests--positioned on a sea-based platform, similar to those used for
offshore oil drilling. The radar is designed to track enemy missiles
with high accuracy; discriminate warheads from decoys and other
objects; and if the intercept occurs within SBX coverage, assess
whether it was successful.
In fiscal year 2003, MDA initiated the acquisition of various SBX
components, including the sea platform, operations and support
equipment for the platform, the radar structure, and electronic
components. In addition, design and development have continued on the
X-Band radar to be positioned on the platform. MDA program officials
stated that the SBX will be fielded as a test asset by the end of Block
2004 (December 2005), and MDA budget documentation indicates that it
will be placed on alert as an operational asset during Block 2006.
Modification of the platform and production of the SBX antenna is on
schedule, and electronics production is ahead of schedule.
Ground-Based Interceptor:
Development and Production Issues Delay GMD Program:
The ground-based interceptor--the weapon component of the GMD element-
-consists of a kill vehicle[Footnote 25] mounted atop a three-stage
booster. The booster, which is essentially an ICBM-class missile,
delivers and deploys the kill vehicle into a trajectory to engage the
threat. Once deployed, the kill vehicle uses its onboard guidance,
navigation, and control subsystem to detect, track, and steer itself
into the enemy warhead, destroying it above the atmosphere through a
hit-to-kill collision.
In fiscal year 2003, the program focused on the development and testing
of boosters that will be produced for flight tests, IDO, and the Block
2004 inventory. Booster development actually began in 1998, but because
of difficulty encountered by the prime contractor, MDA adopted a dual-
booster approach as part of a risk reduction strategy. The development
of the booster was transferred to Lockheed Martin, which is developing
a variant of the original booster. The variant is referred to as "BV+."
MDA also authorized the GMD prime contractor to award Orbital Sciences
Corporation (OSC) a contract to produce a second booster that is known
as the "OSC booster.":
On the basis of our review of fiscal year 2003 activities, booster
development and production represent major challenges for the GMD
program in meeting its Block 2004 goals, as shown below:
* Technical. For the most part, the OSC booster has not experienced
technical issues preventing it from being tested and produced. However,
the BV+ booster has had problems with its first stage attitude control
system. In addition, GMD program officials stated that the BV+ booster
is experiencing quality-related problems with its flight computers.
* Testing. The OSC booster successfully demonstrated the performance
needed for the GMD mission through a series of flight tests.[Footnote
26] Beginning with integrated flight test 14, which is scheduled for 4Q
FY 2004,[Footnote 27] the OSC booster will be used in all intercept
attempts for the remainder of Block 2004. The Lockheed BV+ booster,
however, was flight tested in its new configuration in January 2004
after an 11-month slip. According to MDA officials, its use in flight
testing and fielding has been deferred to the end of fiscal year 2005.
* Production. Because delayed test events are often indicative of
development problems, these delays increase the uncertainty of whether
the contractors will be able to meet their production goals for IDO and
Block 2004. Additionally, accidents at a subcontractor's facility have
jeopardized the delivery of Lockheed BV+ boosters for GMD's initial
deployment. The production facility responsible for propellant mixing
for the BV+ upper-stage motors was temporarily shut down following two
separate explosions. As a result, MDA is accelerating the production of
OSC boosters to compensate for the undelivered Lockheed BV+ boosters.
It is unclear, however, whether OSC has the capacity to produce the
additional boosters necessary for IDO.
Kill vehicle development is proceeding in parallel with development of
the boosters. In fiscal year 2003, the program focused on developing
and producing kill vehicles for flight tests scheduled in fiscal year
2004. Similar production-representative articles will be deployed as
part of the IDO and the Block 2004 defensive capability. Kill vehicle
development and production, however, represent challenges for the GMD
program in meeting its Block 2004 goals. For example, the contractor
has yet to demonstrate that it can increase the production rate of kill
vehicles by 50 percent.
As a result of developmental and production issues with the kill
vehicle and boosters, the GMD program likely will not be able to meet
its goal of delivering 20 interceptors required for the Block 2004
inventory or its upper-end goal of delivering 10 interceptors for IDO.
Program documentation indicates that 5, rather than 10, interceptors
will be fielded when IDO is declared at the end of September 2004; MDA
expects that it will not have 10 interceptors until February 2005. MDA
officials did not provide us with a schedule of interceptor deliveries
for the remaining 10 interceptors that are to be fielded by the end of
Block 2004 (December 2005).
GMD Testing:
Flight Test Program Plagued with Schedule Slips:
The GMD program conducts a variety of tests, the most visible being
flight test events. Flight tests may be conducted at the component
level. For example, the program has planned and conducted booster
validation (BV) flight tests to ensure proper operation of GMD's two
booster designs. However, integrated flight tests[Footnote 28] (IFTs)
are most reflective of the environment in which the various components
will be required to operate as an integrated element.
During fiscal year 2003, the GMD program office conducted four flight
test events: IFT-9, IFT-10, a demonstration flight of the OSC Taurus
missile, and one of two booster validation tests (BV-6). A summary of
information pertaining to these key flight test events is provided in
table 22.
Table 22: GMD Flight and Booster Tests, Fiscal Year 2003:
Test event: IFT-9;
Date: Oct. 14, 2002;
Description: Intercept attempt as part of an integrated flight test;
Outcome: Successful intercept.
Test event: IFT-10;
Date: Dec. 15, 2002;
Description: Intercept attempt as part of an integrated flight test;
Outcome: Failed intercept attempt--kill vehicle did not separate from
surrogate booster.
Test event: OSC demo;
Date: Feb. 6, 2003;
Description: Demonstration of OSC Taurus missile (precursor to OSC
boost vehicle);
Outcome: Successful demonstration--all objectives achieved.
Test event: BV-6;
Date: Aug. 16, 2003;
Description: Demonstration of OSC boost vehicle of the configuration
to be fielded;
Outcome: Successful demonstration--all objectives achieved.
Source: Missile Defense Agency.
[End of table]
Of the two intercept tests conducted (IFT-9 and IFT-10), IFT-9
succeeded in intercepting the target while IFT-10 did not.
Additionally, both OSC booster tests (OSC demo and BV-6) achieved their
booster-related objectives. The table, however, does not reflect the
extent of delays on the entire GMD flight test program caused by fiscal
year 2003 developmental and delivery issues of the interceptor. As
shown in table 23 below, the Block 2004 flight test program leading up
to IDO (September 2004)--consisting of booster validation tests and
integrated flight tests--has slipped throughout fiscal years 2003 and
2004. As a result, the test schedule leading up to IDO has become
compressed. Indeed, the last integrated flight test to be conducted
before IDO is declared, IFT-14, is scheduled to occur 1-2 months before
this date; originally, the program had scheduled IFT-14 to occur 12
months before IDO and IFT-15 to occur 10 months before IDO. As a
result, MDA has limited its opportunity to validate models and
simulations of the interceptor's expected performance, which, in turn,
reduces its ability to confidently characterize GMD's performance prior
to the initial fielding.
Table 23: Block 2004 Flight Test Program Leading to IDO--Schedule
Delays:
Test event;
Completed test events: IFT-9 (Intercept attempt);
Original date: Aug. 2002;
Actual/updated date: Oct. 14, 2002;
Delay (months): 2
Test event;
Completed test events: IFT-10 (Intercept attempt);
Original date: Dec. 15, 2002;
Actual/updated date: Dec. 11, 2002;
Delay (months): 0.
Test event;
Completed test events: OSC demo;
Original date: Jan. 31, 2003;
Actual/updated date: Feb. 6, 2003;
Delay (months): 0.
Test event;
Completed test events: BV-6 (OSC booster test);
Original date: Apr. 30, 2003;
Actual/updated date: Aug. 16, 2003;
Delay (months): 3.5.
Test event;
Completed test events: BV-5 (BV+ booster test);
Original date: Feb. 20, 2003;
Actual/updated date: Jan. 9, 2004;
Delay (months): 11.
Test event;
Completed test events: IFT-13B (OSC booster test);
Original date: July 15, 2003;
Actual/updated date: Jan. 26, 2004;
Delay (months): 6.
Test event;
Scheduled test events: IFT-13A (BV+ booster test);
Original date: May 2003;
Actual/updated date: 4Q FY 2005[A];
Delay (months): 26+.
Test event;
Scheduled test events: IFT-13C (Kill vehicle fly-by);
Original date: Mar. 2004
Actual/updated date: 3Q FY 2004;
Delay (months): 3.
Test event;
Scheduled test events: IFT-14 (intercept attempt);
Original date: Oct. 2003;
Actual/updated date: 4Q FY 2004;
Delay (months): 10.
Test event;
Scheduled test events: IFT-15 (intercept attempt);
Original date: Dec. 2003
Actual/updated date: FY 2005 (Schedule being reassessed);
Delay (months): 10+
Source: Missile Defense Agency.
Note: Test schedule as of April 2004.
[A] We use the notation "4Q FY 2005" to mean the fourth quarter of
fiscal year 2005 and an identical format for other time periods.
[End of table]
Progress Assessment: Performance:
Operational Performance of GMD Remains Uncertain:
The GMD program, which is the primary portion of the Block 2004
defensive capability, has demonstrated the capability to intercept
target warheads in flight tests since 1999. In fact, the program has
achieved five successful intercepts out of eight attempts. However,
because of range limitations, these flight tests were developmental in
nature, and engagement conditions were limited to those with low
closing velocities and short interceptor fly-out ranges.
As noted in our recent report, none of the GMD components included in
the initial defensive capability have been flight tested in their
fielded configuration (i.e., with production-representative software
and hardware).[Footnote 29] For example, the GMD interceptor--booster
and kill vehicle--will not be tested in its Block 2004 configuration
until the next intercept attempt, IFT-14, which the GMD program office
plans to conduct in 4Q FY 2004. IFT-14 will also test, for the first
time, battle management software that will be part of the September
2004 defensive capability. Finally, MDA does not plan to demonstrate
the operation of the critical GMD radar, called Cobra Dane, in flight
tests before IDO. Therefore, as noted in the Director, Operational Test
and Evaluation (DOT&E) Fiscal Year 2003 Annual Report to Congress,
assessments of operational effectiveness will be based on theoretical
performance characteristics. Nonetheless, the program office told us
that performance indicators predict that GMD is on track to meet
operational performance goals.
Progress Assessment: Cost:
DOD budgeted about $12.8 billion during fiscal years 2004 through 2009
for research, development, and fielding of the GMD element. This is in
addition to the $12.4 billion already expended between fiscal years
1996 and 2003.
Most of the program's budget is allocated to fund the element's prime
contract. In fiscal year 2003, the contractor overran its budgeted
costs by $138 million and was unable to complete $51 million worth of
work.
Total Program Cost:
GMD Program Costing Approximately $2 Billion per Year:
MDA estimates that the GMD program will need approximately $12.8
billion over 6 fiscal years to continue developmental and fielding
activities associated with Blocks 2004, 2006, and 2008. Table 24 shows
the planned costs of the program by fiscal year through 2009, the last
year for which MDA published its funding plans.
Table 24: GMD Planned Costs:
Dollars in billions of then-year costs:
Block: Block 2004;
Fiscal Year 2004: $1.34;
Fiscal Year 2005: $0.86;
Fiscal Year 2006: $0;
Fiscal Year 2007: $0;
Fiscal Year 2008: $0;
Fiscal Year 2009: $0;
Total: $2.20.
Block: Block 2006;
Fiscal Year 2004: 1.59;
Fiscal Year 2005: 2.33;
Fiscal Year 2006: 2.13;
Fiscal Year 2007: 2.11;
Fiscal Year 2008: 0;
Fiscal Year 2009: 0;
Total: 8.16.
Block: Block 2008;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Fiscal Year 2006: 0;
Fiscal Year 2007: 0;
Fiscal Year 2008: 1.24;
Fiscal Year 2009: 1.24;
Total: 2.47.
Total;
Fiscal Year 2004: $2.93;
Fiscal Year 2005: $3.19;
Fiscal Year 2006: $2.13;
Fiscal Year 2007: $2.11;
Fiscal Year 2008: $1.24;
Fiscal Year 2009: $1.24;
Total: $12.84.
Source: Missile Defense Agency.
Note: Numbers may not add exactly because of rounding.
[End of table]
The budget given in table 24 does not capture the full cost of the
Block 2004 GMD capability, which we estimate is approximately $18.49
billion.[Footnote 30] As shown in table 25, our estimate includes the
following:
* Developmental costs of approximately $12.37 billion, which cover
funding from 1996 through 2003. Between 1996 and 2001, DOD expended
$6.81 billion to develop the National Missile Defense program. The
knowledge, software, and hardware gained from this program directly
contribute to the development of the Block 2004 GMD element. In
addition, $5.56 billion was expended in fiscal years 2002 and 2003 for
the Block 2004 development of the GMD element.
* Block 2004 activities, scheduled for fiscal years 2004 and 2005,
which are budgeted at $2.20 billion.
* Block 2006 funds amounting to $3.92 billion that are supporting
activities planned for fiscal years 2004 and 2005. When the GMD program
allocated its expected budget to planned blocks, it allocated funds
earmarked to support Block 2004 activities to the Block 2006 budget.
For example, the cost of flight tests conducted during Block 2004 was
accounted for in the Block 2006 budget.
Table 25: Cost of Block 2004 GMD Defensive Capability:
Dollars in billions of then-year dollars:
Sunk costs;
Fiscal Year 1996-2001: $6.81;
Fiscal Year 2002: $0;
Fiscal Year 2003: $0;
Fiscal Year 2004: $0;
Fiscal Year 2005: $0;
Total: $6.81.
GMD Block 2004 Test Bed[A];
Fiscal Year 1996-2001: 0;
Fiscal Year 2002: 3.07;
Fiscal Year 2003: 2.49;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Total: 5.56.
GMD Block 2004 Test Bed/Initial Defensive Capability;
Fiscal Year 1996-2001: 0;
Fiscal Year 2002: 0;
Fiscal Year 2003: 0;
Fiscal Year 2004: 1.34;
Fiscal Year 2005: 0.86;
Total: 2.20.
GMD Block 2004/2006 development;
Fiscal Year 1996-2001: 0;
Fiscal Year 2002: 0;
Fiscal Year 2003: 0;
Fiscal Year 2004: 1.59;
Fiscal Year 2005: 2.33;
Total: 3.92.
Total;
Fiscal Year 1996-2001: $6.81;
Fiscal Year 2002: $3.07;
Fiscal Year 2003: $2.49;
Fiscal Year 2004: $2.93;
Fiscal Year 2005: $3.19;
Total: $18.49.
Source: Missile Defense Agency.
[A] This cost represents funding for both Program Elements 3011 and
3012, "Block 2004 Test Bed" and "GMD Development and Test Bed
Upgrades," respectively. Beginning in fiscal year 2004, these Program
Elements were changed to "GMD Test Bed Block 2004" and "GMD Test Bed
Block 2006.":
[End of table]
Prime Contractor Fiscal Year 2003 Cost and Schedule Performance:
Budgeted Costs Exceeded by $138 Million:
GMD's prime contract consumes the bulk of the program's budget. For
example, about 80 percent of the fiscal year 2004-2009 budget is
allocated to the prime contractor team and 20 percent to the
government. The January 2001 GMD contract, which ends in fiscal year
2007, covers activities performed in Block 2004 and Block 2006. It was
awarded prior to major changes in the missile defense program and,
accordingly, the block approach and the procurement of interceptors for
a defensive capability were not part of the original contract.
We used Cost Performance Reports to assess the prime contractor's cost
and schedule performance during fiscal year 2003. The government
routinely uses such reports to independently evaluate these aspects of
the prime contractor's performance. Generally, the reports detail
deviations in cost and schedule relative to expectations established
under contract. Contractors refer to deviations as "variances."
Positive variances--activities costing less or completed ahead of
schedule--are generally considered as good news and negative variances-
-activities costing more or falling behind schedule--as bad news.
According to our analysis, the contractor's cost performance in fiscal
year 2003 has steadily declined but schedule performance has been
mixed. As shown below in figure 8, the GMD contractor exceeded its
budgeted costs by approximately $138 million, which equates to 7.1
percent of the contract value over the fiscal year. The contractor also
was unable to complete $51 million worth of scheduled work; most of the
decline occurred during the second half of the fiscal year.
Figure 8. Fiscal Year 2003 Cost and Schedule Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
Developmental issues with the interceptor have been the leading
contributor to fiscal year 2003 cost overruns and schedule slips. Our
analysis shows that the development of the GMD interceptor cost $127.2
million more in fiscal year 2003 than budgeted, and that the kill
vehicle accounted for approximately 25 percent of this overrun.
Moreover, booster development resulted in a $38 million cost overrun;
the Lockheed BV+ booster was responsible for 52 percent of all of the
interceptor's unfinished work.
Based on the contractor's cost and schedule performance in fiscal year
2003, we estimate that the current GMD contract--which ends in
September 2007--will overrun its budget by between $237 million to $467
million, of which approximately 84 percent arising from the interceptor
component. The contractor, in contrast, estimates no cost overrun at
completion of the GMD contract. The contractor bases this assumption on
the planned availability of $63 million in management reserve funds to
offset cumulative cost overruns of approximately $128 million.[Footnote
31] The intended purpose of management reserve funds, however, is not
to offset cost overruns; rather, management reserves are a part of the
total project budget that should be used to fund undefined, but
anticipated, work. Although programs may use management reserves to
offset cost variances, most programs wait until the work is almost
completed prior to allocating these funds. The GMD contractor, in
contrast, has completed only about 50 percent of the work directed by
the program office. Program officials stated that the contractor is
investigating sources of potential savings to offset interceptor cost
overruns.
The cumulative schedule variance as of September 2003 was $128 million
behind schedule. Therefore, to finish within budget and schedule, the
contractor will have to improve its efficiency. According to our
analysis, the GMD contractor has, effectively, been delivering $0.95
worth of scheduled work for every budgeted dollar that was spent to
accomplish that scheduled work during fiscal year 2003. In order to
complete all scheduled work at the budgeted cost, the GMD contractor
will have to complete $1.01 worth of scheduled work for every dollar
that will be spent to accomplish that scheduled work.
Program Risks:
On the basis of our assessment of fiscal year 2003 activities, we found
that the GMD program faces key risks in fielding the planned initial
capability by September 2004 and the Block 2004 defensive capability by
December 2005. These risks include readiness of interceptor production
for the September 2004 IDO, limited testing before the system becomes
operational, and a technical risk associated with the kill vehicle.
Contractor's Readiness to Produce Interceptors:
The principal components of the GMD interceptor--the booster and kill
vehicle--are at risk for falling short of production goals. The GMD
program office had intended to field both BV+ and OSC boosters as part
of the September 2004 IDO. However, developmental setbacks and supplier
issues associated with the Lockheed BV+ booster have forced MDA to rely
solely on the OSC booster for IDO. OSC's readiness to produce the
additional boosters in the time remaining for IDO has not been
established. Kill vehicle production is uncertain, as well. The
contractor has yet to demonstrate that it can increase the production
rate of kill vehicles by 50 percent--from 8 to 12 kill vehicles per
year.
GMD program officials characterized the schedule to meet the September
2004 deadline for initial operations as extremely aggressive, with no
margin for delay. Should interceptor production fall behind, the
program will either have to field fewer interceptors than planned or
delay planned fielding dates.
Limited Testing Before IDO:
The GMD test program has been in a state of flux. The test program
under the National Missile Defense program scheduled 16 integrated
flight tests (intercept attempts) to be carried out between fiscal
years 1999 and 2004. The current GMD test program, however, consists of
10 intercept attempts over the same time period. The change stems from
the cancellation of IFT-11, IFT-12, and IFT-16; the conversion of IFT-
13 to boost validation tests (IFT-13A and IFT-13B); and the delay of
IFT-17 and IFT-18 into fiscal year 2005.
MDA had scheduled two flight tests--IFT-14 and IFT-15--to be conducted
before September 2004, but only IFT-14 is now planned before then. IFT-
14 is particularly relevant because it is planned to utilize
production-representative hardware and operational software for the
first time in an intercept attempt. The following firsts are expected
to occur in IFT-14, which is scheduled for 4Q FY 2004:
* The new OSC booster will be used--all previous tests employed
surrogate boosters.
* A production-representative kill vehicle, which incorporates new
hardware and discrimination software, will be tested.
* A new, operational build of the fire control (battle management)
software will be used to control the GMD engagement.
While MDA will gain some confidence from the successful execution of
IFT-14, this test provides only a single opportunity to demonstrate the
components to be fielded as part of IDO and to resolve any problems
uncovered during flight testing.
The previous test program for the NMD system, the predecessor to GMD,
also called for operational testing by the military services, a
statutory requirement to characterize operational effectiveness and
suitability of a deployed system for use by the warfighter. MDA does
not plan to operationally test the GMD element before it is available
for IDO or Block 2004. The fielding is not connected with a full-rate
production decision that would clearly trigger statutory operational
testing requirements. The Combined Test Force, a group of users and
developers, plans tests to incorporate both developmental and
operational test requirements in the test program. In addition, MDA is
introducing some elements of operational testing into developmental
tests, such as soldier participation during some developmental tests.
However, GMD's current test program does not include flight tests
conducted under the unrehearsed and unscripted conditions
characteristic of operational testing.
Technical Risk of the Kill Vehicle:
A technical problem in the kill vehicle observed in earlier flight
tests could affect the operational effectiveness of the GMD element.
Although the program office indicated that the so-called "track gate
anomaly" issue has been resolved, theories of and solutions for the
anomaly have not been verified in flight. The next attempt for
verification will occur in integrated flight test 13C (IFT-13C), which
is scheduled for 3Q FY 2004.[Footnote 32]
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix VI Summary:
Kinetic Energy Interceptors:
Program Description:
The Kinetic Energy Interceptors (KEI) element is a new Missile Defense
Agency (MDA) program in its early stage of development. The program is
building on existing missile defense technology to develop an
interceptor capable of destroying long-range ballistic missiles during
the boost phase of flight--the period after launch when rocket motors
are thrusting. KEI also provides the opportunity to engage an enemy
missile in the early-ascent phase, the period after booster burnout
before warheads are released. MDA expects to have an initial land-based
capability in the 2010-11 time frame, followed by a sea-based
capability during 2012-13.
The Department of Defense (DOD) budgeted about $7.9 billion for
KEI development during fiscal years 2004 through 2009. About $91.5
million was invested in KEI's immediate predecessor program in fiscal
year 2003.
Fiscal Year 2003 Progress Assessment:
KEI program activities in fiscal year 2003 primarily revolved around
the selection of a prime contractor for KEI's development and testing.
The program also continued with experimental work geared toward
collecting the data of boosting missiles.
Schedule: In December 2003, MDA awarded Northrop Grumman a $4.6 billion
prime contract to develop and test the KEI element over the next 8
years. The award follows an 8-month concept design effort between
competing contractor teams, each of which was awarded $10 million
contracts to design concepts for KEI. In addition to contractual and
source-selection activities completed in 2003, the KEI program office
continued with activities designed to reduce technical risks in
developing the KEI interceptor. In particular, the program office
continued with technical work pertaining to an experiment for
collecting data on boosting missiles, known as the Near Field Infrared
Experiment. This work is expected to culminate with a satellite launch
during the fall of 2005.
Performance: Because this element is still in its infancy, data are not
yet available to make a performance assessment.
Cost: According to the KEI program manager, the prime contract
incorporates various innovative acquisition initiatives, which are
expected to encourage the contractor to develop a quality product on
time and within the initially proposed price. Because the prime
contract was awarded in December 2003 (fiscal year 2004), no fiscal
year 2003 data existed for an assessment of the contractor's cost and
schedule performance.
Key risks: The program office acknowledges that it faces general
challenges in developing the first capability that uses a missile to
destroy another missile in the boost phase of flight. From discussions
with program officials, we also found that KEI software costs could be
underestimated, putting the program at risk for cost growth and
schedule delays.
Appendix VI: Kinetic Energy Interceptors:
Background: Element Description:
The Kinetic Energy Interceptors (KEI) element is a missile defense
system designed to destroy ballistic missiles during the boost phase of
flight, the period after launch when a missile's rocket motors are
thrusting. KEI also provides the opportunity to engage enemy missiles
in the early-ascent phase, the period after booster burnout before the
missile can release warheads and countermeasures. Initially, the
program is focused on developing a mobile, land-based system--to be
available in the Block 2010 time frame--that counters long-range
ballistic missile threats. Subsequent efforts will include sea-and
space-based efforts that provide protection against all classes of
ballistic missile threats.
The land-based system will be a deployable unit consisting of a command
and control / battle management unit, mobile launchers, and
interceptors. Program officials noted that because the KEI element has
no sensor component such as radars, it would rely on Ballistic Missile
Defense System (BMDS) sensors (space-based infrared sensors and
forward-deployed radars) for detection and tracking functions. Like
other existing hit-to-kill interceptors, the KEI interceptor is
comprised of a booster and kill vehicle. The kill vehicle is expected
to employ an infrared seeker derived from the Aegis BMD program and
divert thrusters, which provide terminal guidance and control, derived
from the Ground-based Midcourse Defense (GMD) program.
Background: History:
In the summer of 2002, the Defense Science Board recommended that the
Missile Defense Agency (MDA) initiate a program to develop a boost/
ascent-phase interceptor capable of countering intermediate-and long-
range ballistic missile threats. Work in this area was initiated in
fiscal year 2003 under the Kinetic Energy Boost program as part of
MDA's Boost Defense Segment. Beginning with fiscal year 2004, this
program has been budgeted under a new MDA area known as BMDS
Interceptors, which includes the KEI element.
Background: Developmental Phases:
KEI's development is proceeding in a series of planned two-year blocks
known as Blocks 2010, 2012, and 2014. Concurrently, the KEI program is
conducting risk mitigation projects to determine whether a space-based
platform, from which interceptors could be launched, is feasible and
affordable. Other blocks may follow, but on the basis of recent budget
documentation, MDA has not yet defined their content.
Block 2010: The KEI program entered the Development and Test Phase in
December 2003, after MDA selected Northrop Grumman as the prime
contractor. The contractor has begun development activities leading to
a Block 2010 capability, the first increment of land-based interceptors
capable of destroying ballistic missiles during the boost or early-
ascent phases of flight. MDA envisions that these first-generation
interceptors will be built and launched from trucks that can be driven
up close to the border of the threatening nation.
Block 2012: This block increment expands KEI's Block 2010 capabilities
to include the capability to launch interceptors from sea-based
platforms such as Aegis cruisers or submarines. A study is under way to
select the platforms. The Block 2012 sea-based capability will use the
interceptor developed for Block 2010.
Block 2014: During this block, the interceptor is expected to evolve
into a new, multiuse interceptor capable of performing boost, early-
ascent, and midcourse-phase intercepts from platforms on land or sea.
Progress Assessment: Schedule:
The KEI program office's activities in fiscal year 2003 primarily
revolved around the selection of a prime contractor for KEI development
and testing. Activities involving the Near Field Infrared Experiment
(NFIRE), which focus on reducing technical risk through experiments
that collect data on the plume of boosting missiles, were also carried
out in fiscal year 2003.
Prime Contract Awarded to Northrop Grumman:
In March 2003, two KEI concept design contracts worth $10 million each
were awarded to competing teams headed by Northrop Grumman and Lockheed
Martin. These contracts preceded MDA's selection of Northrop Grumman in
December 2003 as the element's prime contractor.
The Northrop Grumman $4.6 billion cost plus award fee contract employs
a unique acquisition strategy that places mission assurance--the
successful operation of the element to perform its mission--as a
program priority. To implement this strategy, MDA based its source
selection decision on the extent to which the contractor's past
performance produced successful results on programs of similar
complexity, as well as on the performance of the proposed design. MDA
also built incentives into the contract that require the prime
contractor to achieve mission assurance through a disciplined execution
of quality processes. For example, the contractor earns an award fee
only if flight-tests are successful and the percentage of the award fee
earned is determined by whether the tests are conducted on schedule.
Experimental Activities Under Way:
NFIRE, scheduled for a fall 2005 launch, is being funded under the KEI
program as a risk-reduction activity to collect phenomenology data on
boosting missiles. The experiment consists of launching an experimental
satellite that is designed to record infrared imagery of a ballistic
missile's plume and the body of the missile itself. Data from NFIRE
will help MDA develop algorithms and assess its kill vehicle design for
boost-phase missile defenses.
In addition to NFIRE, the KEI program is working on a variety of risk
reduction activities. For example, work is being done in support of
space-based KEI development, including miniaturization, weight
reduction, and producibility of satellite and interceptor
subcomponents.
Program Assessment: Performance:
At this early stage of element development, data are not available to
make a performance assessment.
Program Assessment: Cost:
MDA expects to invest about $7.9 billion from fiscal year 2004 through
2009 to develop the KEI element. This is in addition to the
approximately $91.5 million invested in the program's immediate
predecessor, the Kinetic Energy Boost program.
According to the KEI Program Manager, the program is incorporating
various innovative acquisition initiatives into the KEI development and
testing contract. He told us that these initiatives are expected to
encourage the contractor to develop a quality product on time and
within the initially proposed price.
Because the prime contract was awarded in December 2003 (fiscal year
2004), no fiscal year 2003 data existed for an assessment of the
contractor's cost and schedule performance.
Total Program Cost:
KEI Program Costing Approximately $1.3 Billion per Year:
The KEI program's planned costs for the next 6 fiscal years are
expected to be around $7.9 billion. This covers land-and sea-based KEI
development, ground-based risk mitigation projects to determine the
feasibility of a space-based platform, and international cooperation
projects. Of the $7.9 billion, approximately $4.8 billion is allocated
to the land-based capability. Table 26 shows the expected costs of the
program by fiscal year through 2009, the last year for which MDA
published its funding plans.
Table 26: KEI Planned Cost:
Dollars in Millions of then-year dollars:
Block: Block 2010;
Fiscal Year 2004: $112;
Fiscal Year 2005: $451;
Fiscal Year 2006: $971;
Fiscal Year 2007: $1,275;
Fiscal Year 2008: $1,215;
Fiscal Year 2009: $670;
Total: $4,583.00
Block: Block 2012;
Fiscal Year 2004: 0;
Fiscal Year 2005: 47;
Fiscal Year 2006: 131;
Fiscal Year 2007: 422;
Fiscal Year 2008: 947;
Fiscal Year 2009: 1,739;
Total: 3,286.00
Total;
Fiscal Year 2004: $112;
Fiscal Year 2005: $498;
Fiscal Year 2006: $1,102;
Fiscal Year 2007: $1,697;
Fiscal Year 2008: $2,162;
Fiscal Year 2009: $2,409;
Total: $7,869.00
Source: Missile Defense Agency.
[End of table]
The immediate predecessor of the KEI element, Kinetic Energy Boost, was
funded in fiscal year 2003 under the Boost Defense Segment[Footnote 33]
and had a budget of $91.5 million.
Program Acquisition Initiatives:
The prime contract awarded in December 2003 was based on a number of
innovative acquisition strategies. First, the program gave competing
contractors flexibility to design a system that met only one broad
requirement--that the KEI element be capable of reliably intercepting
missiles in their boost/ascent phase. MDA did not set cost or schedule
requirements or specify how the contractors should design the system.
Second, upon award of the development contract, the program locked the
winning contractor into firm, fixed-price commitments for the
production of a limited number of interceptor, launcher, and battle-
management components. Third, the program office included an option in
the contract for a commercial type "bumper-to-bumper warranty."
Finally, the contract stipulates that the contractor earns an award fee
only if flight tests are successful. Additionally, the fee is reduced
if the tests are not conducted on schedule. The Program Manager told us
that the program's goal was to provide the contractor with incentives
to develop a quality product on schedule and at the originally proposed
price.
Additionally, consistent with the MDA acquisition approach, the KEI
program plans to conduct annual continuation reviews to determine if
the KEI program and its prime contract should continue. These reviews
focus on contractor performance and external conditions, such as
potential threats or MDA's funding priorities.
One initiative of the program's acquisition strategy is the inclusion
in Northrop Grumman's development contract of a firm, fixed unit
production price for all of the element's components--launcher,
interceptor, and battle management. This initiative is unique because
the production price was agreed upon before the contractor developed
the component's design and because the price was a factor in MDA's
choice of Northrop Grumman as the KEI prime contractor. Program
officials believe that the government benefited from this strategy,
because competition encouraged Northrop Grumman and Lockheed Martin,
which were competing for the contract, to offer MDA their best
production price.
According to program officials, Northrop Grumman could ask for a price
increase, should it find, when production begins, that it cannot
produce the components at the agreed-upon price. However, the price
increase would come with a cost to the contractor. Northrop Grumman
would have to provide data to support the new price, which would be
time-consuming, and therefore, costly.
Although this initiative appears to be beneficial to MDA, the agency
could find when it reaches the production phase that it has not
budgeted sufficient funds to support the production program. According
to a study conducted by the Institute for Defense Analyses, requiring a
binding price commitment during the development phase of an acquisition
program provides the contractor with a significant incentive to
underestimate production costs. The study goes on to explain that
because of a similar initiative in the 1960s, a statistically
significant number of contractors experienced production costs much
greater than the firm fixed price agreed upon. Furthermore, the former
head of the Defense Department's independent cost estimating office
stated that the only time it makes sense to request a fixed production
unit price at this point in a weapon system's development is when the
weapon is a low-technology project whose requirements and funding are
stable. These criteria do not apply to KEI. Rather, the KEI contractor
is being asked to develop a technologically advanced system associated
with the challenging mission of boost phase intercepts.
Program Risks:
The program office acknowledges that it faces challenges in developing
the first operational boost phase intercept capability that employs
hit-to-kill concepts. In addition, from discussions with program
officials, we found that KEI's software costs could be underestimated,
putting the program at risk for cost growth and schedule delays.
Technical Challenges:
The scientific and missile defense communities recognize that the boost
phase intercept mission is technically and operationally challenging,
particularly because of the short timeline involved with engaging a
boosting missile. For example, in its July 2003 report on boost phase
intercept systems,[Footnote 34] the American Physical Society concluded
that boost-phase defense of the entire United States against solid-
propellant ICBMs is unlikely to be practical when all factors are
considered, no matter where or how interceptors are based. According to
the report, even with optimistic assumptions, a terrestrial-based
system would require very large interceptors with extremely high speeds
and accelerations to defeat a solid-propellant ICBM launched from even
a small country such as North Korea.
Furthermore, a scientific study on boost-phase defense commissioned by
MDA[Footnote 35] focused on selected issues of high risk, including
methods for early launch detection of missile launches, interceptor
divert requirements, and discrimination of the missile's body from its
luminous exhaust plume.[Footnote 36] The study concluded that there are
no fundamental reasons why an interceptor cannot hit a boosting target
with sufficient accuracy to kill the warhead. However, the study
identified several challenges, including understanding the plume
phenomenology well enough to have confidence in the appropriate sensor
combination chosen for the interceptor. Both studies highlighted the
short timeline that the boost-phase system will have to detect and hit
an enemy missile as a key area of concern.
Software Costs:
The KEI Program Office is uncertain of whether the negotiated cost of
the prime contract includes sufficient funds to complete software
development for the various KEI components, including the battle-
management, interceptor, and launcher components. Northrop Grumman
based its estimates of software development on comparisons with similar
systems--such as GMD and Aegis BMD--and on a projection that existing
software could be reused. MDA officials from the program office told us
that they were somewhat concerned that Northrop Grumman underestimated
the amount of software it could reuse from the GMD program for the KEI
program.
Software growth in weapon systems programs has traditionally been
problematic. Historically, a contractor must develop twice as many
lines of software code for the weapon system as it initially estimated.
This growth has occurred when contractors underestimate the effort,
make invalid assumptions regarding the extent to which existing
software code can be reused, and make unrealistic assumptions about how
quickly software can be produced. If software growth in the KEI program
increases at the historical rate, the amount of software needed by the
element will likely exceed the contractor's initial estimate of 1
million lines of code, causing cost increases and schedule delays.
According to program officials, MDA discussions with Northrop Grumman
resulted in a reduction of its estimate of the amount of existing
software code that could be reused in the KEI element. However, the
officials told us that the program is still concerned that the
contractor's estimate is optimistic.
Software estimates typically include an analysis of uncertainty, which
indicate the reliability of the contractor's estimates for the software
development effort. KEI program officials noted that the contractor
performed an uncertainty analysis for the interceptor component but not
for the battle management component that includes the bulk of the KEI
software code.
Conclusion:
If the KEI contractor cannot develop the software within the negotiated
cost of the KEI contract, MDA could find itself in the position of
having to locate funds to cover cost overruns. MDA would benefit from
quickly recognizing this funding shortfall because, with time, it might
be able to locate funding without causing significant perturbations in
the KEI or other element's programs. Also, if additional funding were
needed, making the funds available to the contractor early in the
development effort would allow the contractor to increase personnel so
that the effort would not fall behind schedule. Completing uncertainty
analyses for all components of the KEI element is the best means of
determining if such a funding shortfall is likely.
Recommendation for Executive Action:
We recommend that MDA analyze the degree of risk associated with the
KEI software components by performing an uncertainty analysis that
quantifies the reliability of the proposed estimates.
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix VII Summary:
Space Tracking and Surveillance System:
Program Description:
The Space Tracking and Surveillance System (STSS) will eventually
comprise a constellation of low-orbiting satellites used to detect and
track enemy missiles throughout all phases of flight. The Missile
Defense Agency (MDA) manages STSS, which replaces the Air Force's
Space-Based Infrared System-Low (SBIRS-Low) program. The STSS program
office is preparing to launch in 2007 two demonstration satellites that
were built under the SBIRS-Low program. After launch, MDA plans to
assess how well these demonstration satellites perform missile defense
surveillance functions. On the basis of this assessment, the agency
will determine capabilities and goals for next-generation STSS
satellites.
The Department of Defense (DOD) budgeted about $4.15 billion for STSS's
development during fiscal years 2004 through 2009. Earlier, MDA
expended about $540 million in fiscal years 2002 and 2003. In addition,
from program initiation through 1999, the SBIRS-Low program invested
$686 million to develop the demonstration satellites that are now part
of the STSS program.
Fiscal Year 2003 Progress Assessment:
The STSS program office completed most activities on time and slightly
over budget during fiscal year 2003. However, cost and schedule
performance could potentially slip because of unforeseen problems
arising during the process of preparing the satellites for launch.
Schedule: Program activities completed in fiscal year 2003 were focused
on the ground testing of existing hardware rather than on the design
and development of future STSS satellites. Equipment built for the
SBIRS-Low program was retrieved from storage and tested to determine
whether individual components were still in good working order. Testing
of the first demonstration satellite's hardware--the spacecraft itself
and infrared sensors--was completed on time, and testing of the second
satellite is to be completed by August 2004, slightly behind schedule.
Software development activities also have been completed. However, STSS
program officials are closely monitoring the development of software
for the satellites' sensors because software requirements have not been
finalized.
Performance: STSS's indicators show that the program is on track for
meeting performance requirements.
Cost: Our analysis of prime contractor cost performance reports shows
that the contractor completed work in fiscal year 2003 at slightly more
cost than budgeted. Specifically, the contractor overran budgeted costs
by less than $1 million and could not complete about $6.4 million worth
of work. Because of changes made to the contract during this time, more
data are needed to determine whether the entire contract will exceed
its projected cost and schedule. The contractor reported that sensor-
related issues are among the problems that contributed to the cost
overrun and schedule delays. These problems, the contractor said, could
jeopardize the overall delivery of the satellites.
Risks: On the basis of our assessment of fiscal year 2003 activities,
we did not identify any evidence that the STSS program will be unable
to launch the two demonstration satellites in 2007. However, MDA
identified a number of risk areas that have the potential to increase
the program's cost and delay the 2007 launch of these satellites.
Unforeseen problems could arise during the testing, assembling, and
integration of hardware components of the satellites, which had been in
storage for 4 years. Officials cannot predict which components will be
found in nonworking order or the costs associated with fixing them.
Also, software development and software and hardware integration are
areas that historically have been responsible for affecting a program's
schedule.
Appendix VII: Space Tracking and Surveillance System:
Background: Element Description:
The Space Tracking and Surveillance System (STSS) is being developed as
an integrated element of the Ballistic Missile Defense System (BMDS).
The Missile Defense Agency (MDA) envisions that the STSS element will
be comprised of a constellation of low-orbiting satellites to detect
and track enemy missiles throughout all phases of flight--from launch
through midcourse and into reentry. Any real operational capability,
however, would not be realized until the next decade.
The STSS program is currently working on the first increment of the
STSS element, known as Block 2006. Schedule and technical performance
objectives for the Block 2006 element are detailed in the MDA
Director's Guidance, which directs the STSS program office to prepare
and launch two demonstration satellites that were partially built under
the Air Force's Space-Based Infrared System-Low (SBIRS-Low) program.
The two satellites each contain two infrared sensors, one that would
acquire targets by watching for bright missile plumes during the boost
phase (an acquisition sensor), and one that would track the missile
through midcourse and reentry (a tracking sensor). MDA plans to launch
these satellites in 2007, in tandem, in an effort to assess how well
they perform the missile defense surveillance and detection functions.
Using data collected by the satellites, MDA will determine what
capabilities are needed, and what goals should be set, for the next-
generation of STSS satellites.
Background: History:
Over the past two decades, the Department of Defense (DOD) initiated a
number of programs and spent several billion dollars trying to develop
a system for tracking missiles from space. Owing partially to the
technical challenges associated with building such a system, DOD did
not successfully launch any satellites or demonstrate any space-based
midcourse tracking capabilities. Program managers did not fully
understand the challenges in developing these systems and, accordingly,
schedules were overly optimistic and program funding was set too low.
For example, sensors aboard the satellites must be able to track
deployed warheads in the midcourse phase of flight in contrast to the
bright plume of boosting missiles. To perform this mission, onboard
sensors must be cooled to low temperatures for long periods of time and
be able to withstand the harsh environmental conditions of space.
The last program under development for detecting and tracking missiles
from low-earth orbits in space[Footnote 37] was SBIRS-Low, which DOD
established in 1996 to support national and theater missile defense.
Its mission was to track missile complexes over their entire flights
and to discriminate warheads from decoys. The SBIRS-Low program
experienced cost, schedule, and performance shortfalls. As a result,
DOD cancelled the accompanying technology program in 1999--the two-
satellite Flight Demonstration System--and put the partially
constructed equipment into storage.
In October 2000, Congress directed the Air Force to transfer the SBIRS-
Low program to the Ballistic Missile Defense Organization (now MDA).
When MDA inherited SBIRS-Low, the agency decided to make use of the
equipment that was partially built under the SBIRS-Low technology
program by completing the assembly of the equipment and launching the
two satellites in 2007 to coincide with broader missile defense tests.
At the end of 2002, the SBIRS-Low program became STSS.
Background: Developmental Phases:
STSS's development is proceeding in a series of planned 2-year blocks.
Near-term blocks are known as Blocks 2006, 2008, and 2010. Other blocks
may follow, but on the basis of recent budget documentation, MDA has
not yet defined their content.
Block 2006. Block 2006 involves the assembly, integration, testing, and
launch of two demonstration satellites in 2007, as described above.
Block 2008. Block 2008 is primarily an upgrade of Block 2006 ground
stations, which are used to collect and analyze data from Block 2006
satellites. The software upgrades will benefit both the demonstration
satellites as well as future satellites.
Block 2010. The Block 2010 program is essentially a new phase of STSS
development. Building upon lessons learned from the previous
development efforts and blocks, Block 2010 involves the design and
development of new-generation satellites, which are expected to include
more robust technologies. MDA plans to launch the first of these in
2011.
Progress Assessment: Schedule:
The STSS program office has completed most activities planned for
fiscal year 2003. According to the program office, the contractor has
been performing to an accelerated delivery schedule, and activities
associated with testing and completing the two satellites have
proceeded with fewer problems than anticipated. About 30 percent of
Block 2006 activities have been completed, but the fiscal year 2003
activities were generally simple. For example, they involved taking the
equipment out of storage and performing individual component testing to
determine whether any degradation in the equipment had occurred over
time. The program still has many more tasks before the satellites will
be ready for launch, such as completing software development and
integration activities.
Block 2006 activities achieved during fiscal year 2003 can be divided
into three categories. Specifically, the STSS program office worked to:
* test hardware components of existing satellites;
* develop satellite software, as needed, not developed under the
previous program; and:
* prepare for a design review to be held in early fiscal year 2004 to
ensure the design's adequacy to support its BMDS mission.
Testing of Existing Hardware:
Most Activities Proceeding as Planned:
At the beginning of the STSS program in 2002, MDA retrieved from
storage the satellite components that were partially constructed under
the SBIRS-Low program. STSS contractors retrieved these legacy
components and are in the process of testing the satellite spacecraft
(the space platform) and its payload (infrared sensors and supporting
subsystems) to ensure that this hardware is still in working order.
Testing of the first satellite's components is complete: sensor
hardware testing began in November 2002 and was completed in October
2003; the spacecraft's hardware testing began in May 2003 and was
completed in September 2003.
Part of the testing of the component hardware of the second satellite
is proceeding as planned. Although there was a delay in the start of
the spacecraft testing, the second satellite's component testing
remained on schedule. For example, STSS contractors have visually
inspected the satellite's spacecraft hardware. Spacecraft hardware
testing was originally scheduled to begin in September 2003 and be
completed in November 2003. However, it did not begin until November
2003 and is now scheduled to be completed in May 2004. Payload hardware
testing began in December 2003 but will not be finished until August
2004. Table 27 summarizes the activities and completion dates
associated with hardware testing.
Table 27: Block 2006 STSS Activities--Testing Hardware Components:
Test activity: Payload Flight 1 hardware testing;
Actual/planned completion date: Oct. 2003;
Comments: Completed on schedule.
Test activity: Spacecraft Flight 1 hardware testing;
Actual/planned completion date: Sept. 2003;
Comments: Completed on schedule.
Test activity: Payload Flight 2 hardware testing;
Actual/planned completion date: Aug. 2004;
Comments: Ongoing.
Test activity: Spacecraft Flight 2 hardware testing;
Actual/planned completion date: May 2004;
Comments: Ongoing.
Source: Missile Defense Agency.
[End of table]
Software Development Slightly Behind Schedule And More Challenging
Efforts Remain:
Table 28 summarizes the principal software development activities
completed in fiscal year 2003 pertaining to software development for
the spacecraft and for the ground segments.
Table 28: Block 2006 STSS Activities--Software Development:
Activity: Ground Segment Requirements Definition;
Date completed: Dec. 2002;
Comments: Completed ahead of schedule.
Activity: Spacecraft Flight Software (Build 3);
Date completed: Jan. 2003;
Comments: Completed on schedule.
Activity: Spacecraft Flight Software Integration and Test (Build 3);
Date completed: Mar. 2003;
Comments: Completed on schedule.
Activity: Ground Design (Build 1);
Date completed: Mar. 2003;
Comments: Completed 2 weeks late.
Activity: Spacecraft Flight Software (Build 4);
Date completed: Dec. 2003;
Comments: Completed 4 months late.
Source: Missile Defense Agency.
[End of table]
Most activities completed to date have finished at or slightly behind
schedule. However, the STSS program office is closely tracking the
development of payload software, because there is significant cost,
schedule, and performance risk associated with the effort. In
particular, the program office has not fully established software
requirements. Studies have shown that when operational needs are not
well defined, the associated software effort tends to grow, resulting
in large cost overruns, schedule slips, and reduced functionality.
These risks are compounded by the fact that software from the SBIRS-Low
program was not completed or sufficiently documented. STSS program
officials are concerned that the extent of software reuse might have
been optimistic and, consequently, software development costs could be
more than double the originally proposed cost.
Design Review Successfully Conducted:
The STSS program office conducted a single design review in fiscal year
2003--the System Preliminary Design Review. According to the program
office, although it was delayed by 1 month, the outcome was successful.
During the latter part of fiscal year 2003, the program office began
preparing for the System Critical Design Review, which was successfully
completed early in fiscal year 2004.
Progress Assessment: Performance:
The Block 2006 STSS satellites are built from legacy hardware and will
be used as technology demonstrators (rather than for operational
missions). The program considers that demonstration of STSS
functionality as more critical than the demonstration of STSS
effectiveness in performing the functions. The rationale is to keep
costs within budget, especially for satellites that have an in-orbit
life of 18 to 24 months. Nonetheless, data provided to us by MDA
indicate that all STSS performance indicators, with the exception of
the one pertaining to the visible sensor, are on track for meeting
their respective requirements.
Progress Assessment: Cost:
MDA expects to invest about $4.15 billion from fiscal year 2004 through
2009 in the element's development. This is in addition to the
approximately $1.2 billion invested in the SBIRS-Low program from the
program's initiation in 1996 through fiscal year 1999 and in the STSS
element from 2002 through 2003.
In fiscal year 2003, the contractor reported that its work cost
slightly more than budgeted and that it was somewhat behind schedule.
We were unable to make an independent assessment of the contractor's
cost and schedule performance because of contract changes. The
contractor was working toward a single-launch (tandem launch) strategy
while measuring performance against a two-launch strategy. Also, the
contractor was reporting against an accelerated schedule that was not
required by the contract.
Total Program Cost:
STSS Program Costing Approximately $700 Million per Year:
STSS's costs for the next 6 fiscal years are expected to be
approximately $4.15 billion. These funds will finance activities for
Block 2006, Block 2008, and the development of new-generation
satellites planned for Block 2010. Table 29 shows the expected costs of
the program by fiscal year through 2009, the most recent year for which
MDA published its funding plans.
Table 29: Planned Annual Cost in Millions (Then-Year):
Block: Block 2006;
Fiscal Year 2004: $267;
Fiscal Year 2005: $274;
Fiscal Year 2006: $260;
Fiscal Year 2007: $183;
Fiscal Year 2008: $47;
Fiscal Year 2009: $52;
Total: $1,082.00
Block: Block 2008;
Fiscal Year 2004: 0;
Fiscal Year 2005: 0;
Fiscal Year 2006: 0;
Fiscal Year 2007: 25;
Fiscal Year 2008: 30;
Fiscal Year 2009: 20;
Total: 74
Block: Block 2010;
Fiscal Year 2004: 22;
Fiscal Year 2005: 48;
Fiscal Year 2006: 254;
Fiscal Year 2007: 637;
Fiscal Year 2008: 920;
Fiscal Year 2009: 1,113;
Total: 2,994.00
Total;
Fiscal Year 2004: $289;
Fiscal Year 2005: $322;
Fiscal Year 2006: $513;
Fiscal Year 2007: $845;
Fiscal Year 2008: $997;
Fiscal Year 2009: $1,184;
Total: $4,150.00
Source: Missile Defense Agency.
Note: Numbers may not add exactly because of rounding.
[End of table]
Prior to fiscal year 2004, MDA spent approximately $250 million and
$294 million in fiscal years 2002 and 2003, respectively, for this
program. Furthermore, the SBIRS-Low program invested $686 million to
develop the demonstration satellites that are now part of the STSS
program.
Prime Contractor Cost and Schedule Performance:
Contractor Reports Declining Cost and Schedule Performance:
In fiscal year 2003, the contractor reported that its work cost
slightly more than budgeted and that it was somewhat behind schedule.
Although the contractor's cost performance was positive through the
first half of fiscal year 2003, it began to decline in March 2003 and
continues to do so. Schedule performance began to decline in December
2002 and continued throughout fiscal year 2003.
The government routinely uses contractor Cost Performance Reports to
independently evaluate prime contractor performance relative to cost
and schedule. Generally, the reports detail deviations in cost and
schedule relative to expectations established under the contract.
Contractors refer to deviations as "variances." Positive variances--
activities costing less or completed ahead of schedule--are generally
considered as good news and negative variances--activities costing more
or falling behind schedule--as bad news.
Figures 9 and 10 show the STSS contractor's cost and schedule
performance during fiscal year 2003. According to Cost Performance
Reports, work completed during fiscal year 2003 cost about $1 million
more than estimated--as indicated by the September 2003 data point--and
the contractor could not complete about $6.1 million worth of the work
scheduled for the same time period.
Figure 9: Fiscal Year 2003 Cost Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
Figure 10: Fiscal Year 2003 Schedule Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
Because of contract changes, we could not fully rely upon the data
reported in the contractor's Cost Performance Reports to make our own
analysis of the STSS contractor's cost and schedule performance. In
April 2003, the STSS program office altered its launch strategy in
response to funding cuts. Rather than carrying out two separate
launches, the program decided to launch the two satellites in tandem,
which means one launch vehicle will place both satellites into orbit.
The STSS program office notified the contractor in April 2003 of the
change, but the contractor did not formally adjust its performance
measurement baseline[Footnote 38] to reflect the tandem launch until
September 2003. According to the program office, the tandem launch
resulted in minimal changes to the contract's overall cost and
schedule. However, officials told us that it did result in changes in
the content, budget, and schedule of individual work tasks. Therefore,
throughout most of fiscal year 2003, the contractor was completing work
tasks for the tandem launch. However, the contractor's cost and
schedule performance was being measured against work tasks reflected in
the two-launch strategy. Because the baseline that the contractor used
to measure its performance during most of fiscal year 2003 did not
always reflect the actual work being done, Cost Performance Reports for
April through September may not provide a clear picture of the
contractor's cost and schedule performance. In September 2003, the
contractor adjusted the contract's work tasks, along with their budgets
and schedules, to reflect the change to a tandem launch.
Another factor complicating our analysis is that the contractor
established a performance measurement baseline on the basis of an
accelerated schedule for completing the work. The contractor did this
in response to a unique cost-control incentive in the STSS Award Fee
plan. The plan allows the contractor to earn up to 50 percent of a
potential cost under-run if it can deliver the two satellites (1) up to
6 months early, (2) for less than the negotiated cost, and (3) meeting
all orbit performance requirements. As a direct result of this
incentive, the contractor elected to implement a performance
measurement baseline that reflected a 6-month accelerated schedule.
This means that the contractor might be performing work on a schedule
that would allow it to complete all work by the end of the contract,
but Cost Performance Reports could show that work was falling behind
schedule.
All cost and schedule performance data for fiscal year 2003, as
reported by the contractor, are illustrated in Figures 9 and 10. We
adjusted schedule data to reflect the accelerated schedule, but we
could not adjust cost or schedule data to account for the change to a
tandem launch. Because we could not make these adjustments, we also
included Cost Performance Report data for October 2003 in the figures.
The October report is the first report the contractor issued after
adjusting its performance measurement baseline to account for the
tandem launch. In our opinion, the October report is a better indicator
of the contractor's performance. However, we note that further data are
needed before an estimate can be made of whether the cost and schedule
of the entire contract are likely to be more than projected.
In October 2003, the STSS contractor reported a cumulative cost overrun
of approximately $3 million. It attributed this overrun to sensor
issues, sensor payload test plan inefficiencies, more costly custom
interface assembly, and tasks being more complex than planned. Also in
October, the contractor reported it was approximately $11 million
behind schedule. In our opinion, this might have an unfavorable impact
on the program, because additional funding may be needed to make up the
lost schedule. The contractor reported that schedule delays were
attributed to sensor-testing problems with flight hardware, payload
test procedures taking longer than expected, rigorous Failure Review
Board reviews, and problems with the sensor-and payload-tracking
algorithms. The contractor reported that these problems could
jeopardize the overall delivery of the satellites.
Program Risks:
On the basis of our assessment of fiscal year 2003 activities, we did
not identify any evidence that the STSS program would be unable to
launch the two demonstration satellites in 2007. However, MDA
identified a number of areas that have the potential to increase the
program's cost and delay the 2007 launch of these satellites. We
recognize that unforeseen problems could be discovered through testing,
assembling, and integrating the hardware and software components of the
satellites. MDA cannot predict which components will be found in
nonworking order or the costs associated with fixing them. A related
issue is the availability of original suppliers. Because the equipment
was in storage for several years, the original equipment manufacturers
may not offer maintenance for some of the parts considered obsolete. If
replacement parts are needed as a result of failures or redesigns, this
could create schedule delays for the program. Finally, the STSS program
has also identified a number of activities that have the potential to
affect the program's schedule, including completing software
development and related integration activities.
[End of section]
An Element of the Ballistic Missile Defense System:
Appendix VIII Summary:
Theater High Altitude Area Defense:
Program Description:
The Theater High Altitude Area Defense (THAAD) element is a ground-
based missile defense system designed to protect deployed military
forces and civilian population centers from short-and medium-range
ballistic missile attacks. THAAD engages ballistic missiles during the
late-midcourse and terminal phases of flight, that is, before or after
the warhead reenters the atmosphere. The THAAD program expects to field
an operational capability consisting of tens of missiles during the
2008-09 time frame.
The Department of Defense (DOD) budgeted about $4.3 billion for THAAD's
development during fiscal years 2004 through 2009. Earlier, DOD
expended about $6.5 billion between the program's inception in 1992 and
2003 for related developmental efforts.
Fiscal Year 2003 Progress Assessment:
THAAD's prime contractor performed less efficiently in fiscal year 2003
than in previous years. However, the contractor is, overall, under
budget and ahead of schedule. Our analysis indicates that missile
development was the principal cause of the decline in the contractor's
cost and schedule performance during fiscal year 2003.
Schedule: Because THAAD previously was under Army management, the
current program office re-planned THAAD's primary research and
development contract to accommodate the Missile Defense Agency's
(MDA's) acquisition approach. The office also completed Block 2004
design reviews largely on schedule. In addition, the program conducted
ground tests in preparation for initial flight testing, which is
scheduled to begin at the end of 2004. However, explosions that
occurred in 2003 at a propellant mixing facility could jeopardize
deliveries of THAAD boosters and already have delayed the first flight
test--a non-intercept test scheduled for the first quarter of fiscal
year 2005--up to 3 months. Nevertheless, the program office expects to
maintain the schedule for the first intercept attempt, currently
scheduled for the fourth quarter of fiscal year 2005.
Performance: The program office told us that key indicators show that
THAAD is on track to meet operational performance goals. However, data
from flight testing are necessary to anchor end-to-end simulations of
THAAD operations to confidently predict the element's effectiveness.
Cost: Our analysis of prime contractor cost performance reports shows
that the contractor's positive cost and schedule variance were somewhat
eroded during fiscal year 2003, which was driven by the missile
component but offset by other THAAD components. With 49 percent of the
THAAD contract completed, the prime contractor is, overall, under
budget and ahead of schedule.
Risks: On the basis of our assessment of fiscal year 2003 activities,
we did not find evidence of key risks that could affect MDA's ability
to develop, demonstrate, and field the THAAD element during the 2008-
2009 time frame within scheduled and cost estimates. However, it is too
early to state with confidence whether the element will or will not be
ready for integration into the Ballistic Missile Defense System during
this time.
Appendix VIII: Theater High Altitude Area Defense:
Background: Element Description:
The Theater High Altitude Area Defense (THAAD) element[Footnote 39] is
a ground-based missile defense system being developed to protect
forward-deployed military forces, population centers, and civilian
assets from short-and medium-range ballistic missile attacks. As an
element of the Missile Defense Agency's (MDA's) Terminal Defense
Segment, THAAD would provide the opportunity to engage ballistic
missiles--outside or inside the earth's atmosphere--that were not
destroyed earlier in the boost or midcourse phases of flight by other
planned Ballistic Missile Defense System (BMDS) elements, such as Aegis
BMD.
A THAAD unit consists of a command and control / battle management
component for controlling and executing a mission, truck-mounted
launchers, interceptors,[Footnote 40] an X-band radar, and ground
support equipment. The THAAD interceptor is comprised of a single-stage
booster and kill vehicle, which destroys enemy warheads through hit-to-
kill collisions. The THAAD radar is a solid-state, phased-array, X-band
radar that performs search, track, discrimination, and other fire-
control functions. The THAAD radar also sends updated target
information to the kill vehicle while in-flight.
Background: History:
The THAAD demonstration program[Footnote 41] began in 1992 but was
plagued by a string of flight-test failures from 1995 to 1999. As noted
in an earlier report, THAAD's early failures were caused by a
combination of a compressed test schedule and quality control
problems.[Footnote 42] Also, as reported in the Director, Operational
Test and Evaluation (DOT&E) Fiscal Year 1999 Annual Report to Congress,
the sense of urgency to deploy a prototype system resulted in an overly
optimistic development schedule. Rather than being event driven--
proceeding with development only after technical milestones were met--
the program tried to keep pace with the planned schedule. Schedule
forces and budget cuts contributed to deficient manufacturing
processes, quality control, product assurance, and ground-testing
procedures, which in turn, resulted in poor design, lack of quality,
and failed flight tests. The ultimate result was a schedule slip of 6
years for the deployment of the objective THAAD system.
After devoting substantial time to pretest activities, the THAAD
program conducted two successful flight tests in 1999. The program then
transitioned to the product development phase[Footnote 43] of
acquisition, in which developmental activities shifted from technology
development and demonstration to missile redesign and engineering. The
Department of Defense (DOD) transferred the THAAD program from the Army
to the Ballistic Missile Defense Organization (now MDA) on October 1,
2001.
Background: Developmental Phases:
The overarching goal of the THAAD program is to field an operational
capability consisting of tens of missiles during the Block 2008 time
frame. Although THAAD's development is broken out by block--2004, 2006,
and 2008--each is a stepping-stone leading to the Block 2008
capability. The development efforts of each block incrementally
increase element capability by maturing the hardware's design and
upgrading software.
Block 2004. Block 2004 activities are expected to focus on developing
and ground testing THAAD components. These tests lead to the
demonstration of a rudimentary capability--an intercept capability
against a short-range, threat-representative target (Flight Test 5)--at
the end of Block 2004. At the end of the block, the THAAD "missile
inventory" will consist of one spare missile.
Blocks 2006. By the end of Block 2006, the THAAD program will have
conducted six more flight tests, five of which are intercept attempts.
The flight tests scenarios are expected to include intercepts inside
and outside the Earth's atmosphere. One of the five intercept attempts
will be conducted employing a salvo-firing doctrine, that is, two THAAD
interceptors will be launched against a single target.
Blocks 2008. By the end of Block 2008, the THAAD program plans to
demonstrate that the THAAD element is ready for fielding with tactical
missiles, demonstrate that the element can intercept threat-
representative targets (short-range and medium-range ballistic
missiles), and show that THAAD can interoperate with other elements as
part of the BMDS.
Progress Assessment: Schedule:
The THAAD program completed most activities planned for fiscal year
2003, which were focused on contractual activities, design reviews, and
subcomponent-level development and testing, leading up to flight
testing beginning in fiscal year 2005.
Align THAAD with MDA Acquisition Approach:
Completed Slightly Behind Schedule:
During 2003, the THAAD Project Office aligned its primary research and
development contract with MDA's block acquisition approach. For
example, officials re-planned the contract to accommodate MDA's block
strategy for developing missile defense capabilities. Because of
changes in the fiscal year 2003 budget, including a funding cut of $117
million, THAAD completed its contract alignment activities slightly
behind schedule. However, these activities were completed by the first
quarter of fiscal year 2004. Table 30 summarizes the principal
contractual activities planned for fiscal year 2003 and their actual
completion date.
Table 30: Block 2004 THAAD Activities--Contract Alignment:
Activity: Contract re-planning;
Date completed: Nov. 2003;
Comments: Delayed from Aug. 2003.
Activity: Contract negotiations finalized;
Date completed: Dec. 2003;
Comments: Delayed from Oct. 2003.
Source: Missile Defense Agency.
[End of table]
Block 2004 Design Reviews:
Completed Largely on Schedule:
Since 1999, the program has conducted a number of reviews to evaluate
the designs of THAAD's various components and of the element as a
whole. Early reviews, known as Preliminary Design Reviews (PDRs), were
conducted to evaluate the progress, technical adequacy, and risk
resolution of the selected design approach; to determine their
compatibility with the performance and engineering requirements of the
development specification; and to establish the existence and
compatibility of interfaces among other items of equipment facilities,
computer programs, and personnel. Later reviews--Critical Design
Reviews[Footnote 44] (CDRs)--determined that the designs satisfied the
performance and engineering requirements of the development
specification; established the design compatibility between the
component and other items of equipment, facilities, computer programs,
and personnel; assessed the component's producibility and areas of
risk; and reviewed preliminary product specifications.
The program successfully completed two design reviews scheduled in
fiscal year 2003; the THAAD missile was the subject of both of these
reviews. Tables 31 and 32 summarize all principal activities related to
the verification of THAAD's Block 2004 design.
Table 31: Block 2004 THAAD Activities--Component Design Reviews:
Activity;
Radar: PDR;
Date completed: Feb. 1999;
Comments: Completed on schedule.
Activity;
Radar: CDR;
Date completed: Sept. 2001;
Comments: Completed on schedule.
Activity;
C2/BM: PDR;
Date completed: June 2001;
Comments: Completed on schedule.
Activity;
C2/BM: CDR;
Date completed: Aug. 2002;
Comments: Completed on schedule.
Activity;
Launcher: PDR;
Date completed: June 2002;
Comments: Completed on schedule.
Activity;
Launcher: CDR;
Date completed: June 2003;
Comments: Completed on schedule.
Activity;
Missile: PDR;
Date completed: June 2002;
Comments: Delayed from May 2002.
Activity;
Missile: CDR;
Date completed: Sept. 2003;
Comments: Completed on schedule.
Source: Missile Defense Agency.
[End of table]
Table 32: Block 2004 THAAD Activities--Element Design Reviews:
Activity: Block 2004 Element PDR;
Date completed: July 2002;
Comments: Completed on schedule;
Activity: Block 2004 Element CDR (DRR);
Date completed: Dec. 2003;
Comments: Completed on schedule.
Source: Missile Defense Agency.
[End of table]
Ground Testing:
Key Tests Completed in Preparation for Future Flight Testing:
The THAAD program completed a number of ground tests in the fiscal year
2003 time frame. These events are listed in table 33. The program
office characterized these tests as key events in preparation for Block
2004 flight testing.
Table 33: Block 2004 THAAD Activities--Ground Testing:
Major test event: Booster Motor Test;
Date: Sept. 2002;
Comments/Test objectives: Objectives achieved--Static fire of the
THAAD solid propellant booster motor.
Major test event: Radar Transmit/Receive Module Test;
Date: Jan. 2003;
Comments/Test objectives: Objectives achieved-- T/R module
qualification testing.
Major test event: Divert and Attitude Control System (DACS) Thruster
Testing;
Date: Mar. 2003;
Comments/Test objectives: Objectives achieved--First hot fire test of
a DACS thruster.
Major test event: Missile Separation Effects Tests;
Date: Aug. 2003 - Sept. 2003;
Comments/Test objectives: Objectives achieved--Verify structural
integrity and stability of the missile with separation events (booster
separation and shroud separation).
Major test event: Kill Vehicle Destruct Test;
Date: Oct. 2003;
Comments/Test objectives: Objectives achieved--Test of kill vehicle
flight termination system.
Source: Missile Defense Agency.
[End of table]
THAAD Flight Test Program:
The THAAD flight test program consists of 16 flight test events divided
among Blocks 2004, 2006, and 2008. The first two of the five planned
Block 2004 flight tests are referred to as control test flights (CTF)-
-non-intercept tests that focus on how the missile operates under
stressful environmental conditions. The third flight test is a seeker
characterization flight (SCF), which ensures proper functioning of the
seeker in a live intercept environment. This is a non-intercept test as
well, but targets are involved. The fourth test, flight test 4 (FT-4),
is the first intercept attempt at White Sands Missile Range
(WSMR)[Footnote 45] with a configuration--target and engagement
geometry--comparable to the flight tests during the Program Definition
and Risk Reduction phase of development. Block 2004 flight test
activities end with a second intercept attempt (FT-5), conducted at
Pacific Missile Range Facility (PMRF),[Footnote 46] against a threat-
representative target. The program office plans to consume all procured
missiles in flight tests. However, because there will be five flight
tests in Block 2004 and THAAD has plans to procure six test missiles,
one missile will be available as a spare. THAAD program office
officials also noted that test missiles could be used for emergency
operational use, rather than as test assets, if needed. Table 34
summarizes Block 2004 flight test events, including dates and
objectives.
Table 34: Block 2004 THAAD Activities--Flight Testing:
Flight test event: FT-1 (CTF) at WSMR;
Date: 1Q FY 2005;
Objectives: Validate missile performance in a high- endoatmospheric
flight environment;
Objectives: Verify missile integration with WSMR.
Flight test event: FT-2 (CTF) at WSMR;
Date: 2Q FY 2005;
Objectives: Characterize missile performance in a low-endoatmospheric
flight environment;
Objectives: Effects of heat on seeker window;
Objectives: High dynamic pressure fly-out.
Flight test event: FT-3 (SCF) at WSMR;
Date: 3Q FY 2005;
Objectives: Seeker characterization flight against a high-
endoatmospheric target;
Objectives: Verify element integration with WSMR.
Flight test event: FT-4 at WSMR;
Date: 4Q FY 2005;
Objectives: Demonstrate exoatmospheric discrimination and intercept of
a separating target;
Objectives: Demonstrate lethality assessment of recovered debris.
Flight test event: FT-5 at PMRF (Now called FTT-04-01);
Date: 1Q FY 2006;
Objectives: Demonstrate exoatmospheric aimpoint selection and
intercept against a non- separating liquid-fueled target;
Objectives: Demonstrate integration with PMRF.
Source: Missile Defense Agency.
Note: Test schedule as of December 2003:
[End of table]
Flight-test conditions are grouped by block. For example, Block 2004
tests focus on engagements outside the atmosphere (exoatmospheric),
whereas the first intercept attempt inside the atmosphere
(endoatmospheric) occurs in Block 2006. The level and sophistication of
testing achieved to that point defines the capability of the THAAD
element at a given time.
Finally, deliveries of THAAD boosters could be jeopardized by
explosions at Pratt & Whitney's propellant mixing facility[Footnote 47]
that occurred during the summer of 2003. According to updated test
schedules, these incidents have already delayed the first non-intercept
flight test, Control Test Flight 1, by 3 months. However, the program
office expects to maintain the schedule for the first intercept
attempt, FT-4, currently scheduled for the fourth quarter of fiscal
year 2005. To mitigate schedule risk, the program office enlisted
Aerojet as the replacement vendor for Pratt and Whitney's propellant
mix and cast operations. We note that this Pratt & Whitney facility
also provides rocket motors for the Aegis BMD and GMD programs.
Progress Assessment: Performance:
Data collected during element-level flight testing will be used to
"anchor" end-to-end simulations of THAAD operation. Until these
simulations are properly validated and verified, one cannot be
confident of any quantitative assessment of the element's effectiveness
for terminal defense. Nonetheless, the program office told us that all
performance indicators predict that THAAD is on track to meet
operational performance goals.
Program Assessment: Cost:
MDA expects to invest about $4.3 billion from fiscal year 2004 through
2009 in the development and enhancement of the THAAD element. This is
in addition to the $1.47 billion expended in fiscal years 2002 and
2003.
Most of the THAAD budget goes to fund the element's prime contract. The
contractor reported that its fiscal year 2003 work cost slightly more
than budgeted and that it was somewhat behind schedule. Specifically,
the work cost about $12 million more than expected, and the contractor
could not complete approximately $12.2 million of the work scheduled
for the fiscal year.
Program Cost:
THAAD Program Costing Approximately $710 Million per Year:
The program estimates that it will need about $4.3 billion over the
next 6 years to continue THAAD's development. This includes funds for
Blocks 2004, 2006, and Block 2008. Program costs prior to THAAD's
transfer to MDA at the beginning of fiscal year 2002 amounted to
approximately $4.9 billion. In fiscal years 2002 and 2003, the program
expended an additional $1.6 billion, bringing the total investment in
THAAD between the program's inception and 2003 to about $6.5 billion.
Table 35 shows the expected THAAD program costs by fiscal year from
2004 through 2009, the last year for which MDA published its funding
plans.
Table 35: THAAD Planned Cost:
Dollars in millions of then-year dollars:
Block: Block 2004;
Fiscal Year 2004: $687;
Fiscal Year 2005: $593;
Fiscal Year 2006: $154;
Fiscal Year 2007: $0;
Fiscal Year 2008: $0;
Fiscal Year 2009: $0;
Total: $1,434.00
Block: Block 2006;
Fiscal Year 2004: 29;
Fiscal Year 2005: 239;
Fiscal Year 2006: 535;
Fiscal Year 2007: 791;
Fiscal Year 2008: 91;
Fiscal Year 2009: 0;
Total: 1,685.00
Block: Block 2008;
Fiscal Year 2004: 0;
Fiscal Year 2005: 2;
Fiscal Year 2006: 204;
Fiscal Year 2007: 232;
Fiscal Year 2008: 389;
Fiscal Year 2009: 324;
Total: 1,151.00
Total;
Fiscal Year 2004: $716;
Fiscal Year 2005: $834;
Fiscal Year 2006: $893;
Fiscal Year 2007: $1,023;
Fiscal Year 2008: $480;
Fiscal Year 2009: $324;
Total: $4,270.00
Source: Missile Defense Agency.
[End of table]
Prime Contractor Fiscal Year 2003 Cost and Schedule Performance:
Declining Performance Erodes Positive Variances:
The prime contract portion of the THAAD budget consumes the bulk of the
program budget: an average of 70 percent is allocated to the prime
contractor team and 30 percent is allocated to the government for Block
2004 efforts. The contract has undergone re-planning to re-phase the
work according to blocks. As indicated in table 30, the re-planning was
completed in November 2003, and contract negotiations were finalized in
December 2003. THAAD's prime contract is held by Lockheed Martin Space
Systems in Sunnyvale, California; Lockheed also manages the missile's
development.
The government routinely uses contractor Cost Performance Reports to
independently evaluate prime contractor performance relative to cost
and schedule. Generally, the reports detail deviations in cost and
schedule relative to expectations established under the contract.
Contractors refer to deviations as "variances." Positive variances--
activities costing less or completed ahead of schedule--are generally
considered as good news and negative variances--activities costing more
or falling behind schedule--as bad news.
The THAAD prime contract continued to carry a positive cost and
schedule variance during fiscal year 2003. However, as figure 11 shows,
the contractor's positive cost and schedule variance eroded somewhat
during fiscal year 2003: the contractor's work cost about $12.0 million
more than budgeted, and the contractor could not complete approximately
$12.2 million worth of work scheduled during this time. The unfavorable
cost variance was driven by the missile component but partially offset
by other components. However, with 49% of the THAAD contract completed,
the prime contractor is, overall, under budget and ahead of schedule.
Figure 11: Fiscal Year 2003 Cost and Schedule Performance:
[See PDF for image]
Sources: Contractor (data); GAO (analysis).
[End of figure]
The contractor experienced difficulties with missile development, which
accounts for 35 percent of the contract's total cost. In fiscal year
2003, work on missile development cost approximately $11 million more
than budgeted. According to MDA's analysis, propulsion subsystem
development, particularly problems with the development of the Divert
and Attitude Control System, has been the driver for missile
development cost overruns.
The prime contractor estimates that the entire contract will be
completed slightly under budget.[Footnote 48] However, in order to
finish the work effort within budget, the contractor needs to work as
efficiently as it did in the previous fiscal years. In our opinion, the
contractor's estimate is somewhat optimistic, considering the
contractor's trend of declining performance and because approximately 5
years of work remain on this contract. According to our analysis of the
contractor's data, the contractor has been completing, on average,
$0.97 worth of scheduled work for every budgeted dollar spent to
accomplish that scheduled work during fiscal year 2003. On the basis of
this efficiency rate, we estimate that the contract will overrun its
budget at completion by between $23 million and $65 million.
Program Risks:
On the basis of our assessment of fiscal year 2003 activities, we did
not find any evidence of key risks that could affect MDA's ability to
develop, demonstrate, and field the THAAD element within schedule
estimates. However, it is too early to state with confidence whether
the element will or will not be ready for integration into the BMDS
during the Block 2008 time frame, especially since flight testing has
not yet begun. Unsuccessful intercept attempts could delay the program
and increase its cost, as was the case during THAAD's Program
Definition and Risk Reduction phase of the 1990s.
Fiscal Year 2002 Assessment:
Congress, in its fiscal year 2002 National Defense Authorization Act,
directed the Department of Defense (DOD) to establish cost, schedule,
testing, and performance goals for the years covered by the Future
Years Defense Plan. In the act, Congress also directed us to assess the
extent to which the Missile Defense Agency (MDA) achieved these goals
each in fiscal years 2002 and 2003. We were unable to fulfill this
mandate in fiscal year 2002 because MDA had not established such goals.
As an alternative, we began to assess the tools that MDA uses as part
of the agency's management process to monitor cost, schedule, and
performance progress. In February 2003, we briefed the staff of the
Congressional addressees of this report on our initial findings.
However, we were unable to complete this assessment, because some of
the tools were evolving and others had been only partially implemented.
MDA identified four tools it uses to monitor progress: the Integrated
Master Plan (IMP), the Integrated Master Schedule (IMS), the Earned
Value Management System (EVMS), and Technical Performance Measures
(TPM). The IMP[Footnote 49] identifies essential actions that must be
completed to successfully deliver a block of BMDS capability. Between
our review in September 2002 and June 2003, the document remained in
draft form and evolved from a generic checklist of activities into a
template focused on the specific activities needed to deliver a
particular block. In June 2003, MDA amended the draft BMDS IMP to
reflect the President's direction of December 2002 to begin fielding
the Block 2004 system.
Similarly, the IMS was evolving. The purpose of the IMS is to plot the
expected date of activities that must be completed to achieve a block
of capability. MDA altered the IMS because the capability being
developed in Block 2004 changed from the delivery of a test bed to the
delivery of a fielded capability.
The EVMS, which tracks whether the contractor is performing work within
budgeted cost and schedule, was only partially implemented at the time
of our fiscal year 2002 review. Many of the element prime contracts
were being modified to reflect MDA's new block strategy, and the
contractors could not report progress toward Block 2004 until the
contractor could develop a program performance baseline against which
cost and schedule performance could be measured.
Finally, MDA had only partially implemented the tracking of TPMs--
parameters of system, element, and component effectiveness--as part of
its program management process. Specific elements such as GMD had
tracked TPMs, but as noted by program officials, MDA had just begun to
develop system-level TPMs.
[End of section]
Appendix IX: Fiscal Year 2002 Assessment:
The National Defense Authorization Act for Fiscal Year 2003 directed
the Department of Defense (DOD) to establish cost, schedule, testing,
and performance goals for its ballistic missile defense programs for
the years covered by the Future Years Defense Plan. In the act,
Congress also directed us to assess the extent to which the Missile
Defense Agency (MDA) achieved these goals each in fiscal years 2002 and
2003. We were unable to fulfill this mandate in fiscal year 2002
because MDA had not established such goals.
As an alternative, we began to assess the tools that MDA uses as part
of the agency's management process to monitor cost, schedule, and
performance progress. In February 2003, we briefed the staff of the
Congressional addressees of this report on our initial findings.
However, we were unable to complete this assessment, because some of
the tools were evolving and others had been only partially implemented.
MDA identified four tools it uses to monitor progress: the Integrated
Master Plan (IMP), the Integrated Master Schedule (IMS), the Earned
Value Management System (EVMS), and Technical Performance Measures
(TPM). The IMP[Footnote 50] identifies essential actions that must be
completed to successfully deliver a block of BMDS capability. Between
our review in September 2002 and June 2003, the document remained in
draft form and evolved from a generic checklist of activities into a
template focused on the specific activities needed to deliver a
particular block. In June 2003, MDA amended the draft BMDS IMP to
reflect the President's direction of December 2002 to begin fielding
the Block 2004 system.
Similarly, the IMS was evolving. The purpose of the IMS is to plot the
expected date of activities that must be completed to achieve a block
of capability. MDA altered the IMS because the capability being
developed in Block 2004 changed from the delivery of a test bed to the
delivery of a fielded capability.
The EVMS, which tracks whether the contractor is performing work within
budgeted cost and schedule, was only partially implemented at the time
of our fiscal year 2002 review. Many of the element prime contracts
were being modified to reflect MDA's new block strategy, and the
contractors could not report progress toward Block 2004 until the
contractor could develop a program performance baseline against which
cost and schedule performance could be measured.
Finally, MDA had only partially implemented the tracking of TPMs--
parameters of system, element, and component effectiveness--as part of
its program management process. Specific elements such as GMD had
tracked TPMs, but as noted by program officials, MDA had just begun to
develop system-level TPMs.
[End of section]
Appendix X: GAO Contact and Staff Acknowledgments:
GAO Contact:
Barbara Haynes, (256) 922-7500:
Acknowledgments:
In addition to the individual named above, Lily Chin, Tana Davis, Diana
Dinkelacker, David Hand, David Hubbell, Sigrid McGinty, Madhav Panwar,
Karen Richey, Adam Vodraska, Carrie Wilson, and Randy Zounes (Analyst-
in-Charge) made key contributions to this report.
(120252):
FOOTNOTES FROM BODY OF REPORT:
[1] Pub. L. No. 107-107, § 232(c), 10 U.S.C. § 2431 note (Supp. I
2001).
[2] The Future Years Defense Plan is DOD's official document for
summarizing the forces and resources (budget) associated with programs
approved by the Secretary of Defense. The current Future Years Defense
Plan covers fiscal years 2004-2009.
[3] Pub. L. No. 107-107, § 232(g), 10 U.S.C. § 2431 note (Supp. I
2001).
[4] See appendix IX for a discussion of MDA's tools for monitoring
cost, schedule, and performance progress in 2002.
[5] Required by 10 U.S.C. § 2432 (2000 & Supp. I 2001), Selected
Acquisition Reports are submitted regularly for updating the Congress
on a weapon system's cost and developmental progress.
[6] An X-band radar emplaced on a sea-based, mobile platform in the
Pacific will be used in flight testing or as an operational asset for
tracking enemy warheads and discriminating warheads from decoys.
[7] The terms "intercontinental ballistic missile" and "long-range
ballistic missile" are used interchangeably.
[8] MDA recently changed the name of the THAAD element to "Terminal
High Altitude Area Defense."
[9] Our review focused on only those elements managed by MDA. Patriot
PAC-3, which is funded and managed by the Army, is part of the BMDS for
terminal (point) defense against short-and medium-range ballistic
missile attacks.
[10] MDA goals are formally detailed in the agency's budget estimates
and in the top-level MDA document, Block 2004 Statement of Goals.
[11] In budget documentation submitted in February 2003, MDA referred
to these goals as Block 2004 "Initial Defensive Capability" Goals.
[12] U.S. General Accounting Office, Missile Defense: Actions Being
Taken to Address Testing Recommendations but Updated Assessment Needed,
GAO-04-254 (Washington, D.C.: Feb. 26, 2004); U.S. General Accounting
Office, Missile Defense: Additional Knowledge Needed in Developing
System for Intercepting Long-Range Missiles, GAO-03-600 (Washington,
D.C.: Aug. 21, 2003).
[13] DOT&E is responsible for providing independent oversight of
operational test and evaluation of major defense acquisition programs
to verify their operational effectiveness and suitability for combat
use. The Director is the principal operational test and evaluation
official within DOD and advises the Secretary of Defense and Under
Secretary of Defense for Acquisition, Technology and Logistics on
operational test and evaluation. The Director also provides responsible
officials with advice on developmental testing.
[14] The target flew a trajectory so that it presented a large cross
section to the radar.
[15] 10 U.S.C. § 2399 (2000).
[16] Specifically, the law prohibits a program from proceeding beyond
low-rate initial production (LRIP) until initial operational test and
evaluation is completed. LRIP begins the "Production and Deployment"
phase of the acquisition cycle and concludes with a full-rate
production decision review to authorize full-rate production and
deployment.
[17] 10 U.S.C. §139 (2000 & Supp. I 2001).
[18] The Secretary did not specify the operational test agent. The
Army, Navy, and Air Force each have their own operational test agents
who are independent of their program offices.
[19] 10 U.S.C. § 139(a)(2)(A) (2000).
[20] Id. §139(d).
[21] The SDD phase of acquisition was formerly known as Engineering and
Manufacturing Development (EMD). Section 2435 of Title 10, U.S. Code,
prohibits the obligation of funds for a major defense acquisition
program after the program enters SDD without an approved baseline,
unless the Under Secretary of Defense (Acquisition, Technology, and
Logistics) specifically approves the funding.
[22] 10 U.S.C. § 2435 (2000 & Supp. I 2001).
[23] 10 U.S.C. § 2433 (2000).
[24] 10 U.S.C.§ 2432(c)(3)(A). See also 10 U.S.C. § 2434 (2000 & Supp.
I 2001), which establishes the requirement for independent cost
estimates of the full life-cycle cost of a program.
[25] National Defense Authorization Act for Fiscal Year 2002, Pub. L.
No. 107-107, § 232(d), 10 U.S.C. § 2431 note (Supp. I 2001). The act's
definition of EMD has since been revised so that the criteria do not
apply to the "development phase" of a missile program but to
"an acquisition program." National Defense Authorization Act for Fiscal
Year 2004, Pub. L. No. 108-136, § 221(c)(1).
[26] Section 223a(c) of Title 10, U.S. Code, as added by section 223(a)
of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L.
No. 108-136), requires MDA to include, with the performance criteria in
its annual budget justification, a description of the intended
effectiveness of each planned development phase of the BMDS against
foreign adversary capabilities.
[27] The values assigned are not presented in this report because they
are classified.
APPENDIX FOOTNOTES
[1] In this context, the missile defense community uses the terms
"missile" and "interceptor" interchangeably.
[2] Five additional destroyers will be upgraded during Block 2006,
bringing the total of upgraded destroyers to 15, which was MDA's
original Block 2004 goal.
[3] The Ballistic Missile Defense Organization was officially renamed
the Missile Defense Agency in 2002.
[4] CP3.0 will be available for installation on the Aegis cruiser in
December 2004 for testing.
[5] The Aegis BMD program office believes that the root of the failure
can be traced to a defective "diverter ball." This failure is discussed
in more detail later in this appendix.
[6] The target flew a trajectory so that it presented a large cross
section to the radar.
[7] A separating target is one where the warhead separates from the
spent booster of the missile.
[8] Of the 14 missiles, MDA has plans to field 8 to 11.
[9] The Boost Defense Segment includes all elements of the BMDS that
defeat ballistic missiles during the boost phase of flight.
[10] The terms "intercontinental ballistic missile" and "long-range
ballistic missile" are used interchangeably.
[11] These modifications include: the installation of miles of wiring,
grafting large sheets of titanium to the plane's underbelly, and adding
a 12,000-pound turret to house the 1.5-meter telescope through which
the laser beams are fired.
[12] MDA's fiscal year 2005 budget (submitted in February 2004)
indicates that the ABL program is undergoing some form of
restructuring. Also, the program manager stated that the content of
Blocks 2004, 2006, and 2008 would be changing: less focus on an
operational capability and more focus on technology demonstration.
Accordingly, procurement of the second ABL aircraft for Block 2008 has
been deferred indefinitely.
[13] The C2BMC element also consists of supporting hardware, such as
workstations and communications equipment.
[14] Rules of engagements are directives that delineate the
circumstances and limitations under which U.S. forces will initiate
and/or continue combat engagement with other forces encountered.
[15] The USNORTHCOM suite is situated at the Joint National Integration
Center (JNIC), located at Schriever Air Force Base, Colorado.
[16] CONOPS is a broad outline of the manner in which a commander
operates a weapon system.
[17] Cycle-3 testing: Third of four cycles of testing to verify that
C2BMC interfaces with each BMDS element individually.
[18] Cycle-4 testing: Fourth of four cycles of testing to verify
system-level integration. During Cycle 4 testing, the C2BMC element
participates in flight tests planned and conducted by MDA.
[19] An OTA refers to transactions other than contracts, grants, or
cooperative agreements that are entered into under the authority of 10
U.S.C. § 2371 (2000 & Supp. I 2001) in carrying out basic, applied, and
advanced research projects or under the authority of section 845 of the
National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. §
2371 note) for carrying out prototype projects. OTAs generally are not
subject to federal laws and regulations applicable to procurement
contracts.
[20] A performance measurement baseline identifies and defines work
tasks, designates and assigns organizational responsibilities for each
task, schedules the work tasks in accordance with established targets,
and allocates budget to the scheduled work.
[21] Additional details are provided in a classified annex to this
report.
[22] An initial operational capability (IOC) was scheduled for the end
of fiscal year 2005.
[23] The fire control component has historically been referred to as
the command and control, battle management, and communications (BMC3)
component of the GMD element.
[24] CONUS is the acronym for "Continental United States."
[25] The GMD program refers to its kill vehicle as the "exoatmospheric
kill vehicle" (EKV).
[26] Booster performance was demonstrated in booster validation (BV)
test "BV-6" and in integrated flight test "IFT-13B."
[27] We use the notation "3Q FY 2004" to mean the third quarter of
fiscal year 2004 and an identical format for other time periods.
[28] Integrated flight tests are real-world demonstrations of the GMD
element. During an intercept attempt, an interceptor is launched to
engage and intercept a mock warhead above the atmosphere.
[29] U.S. General Accounting Office, Missile Defense: Actions Being
Taken to Address Testing Recommendations, but Updated Assessment
Needed, GAO-04-254 (Washington, D.C.: February 2004).
[30] This figure does not include additional costs needed to support
the operation and sustainment of GMD.
[31] The $128 million overrun pertains to the cumulative cost overrun
incurred from the contract's inception through the end of fiscal year
2003 (September 2003). The $138 million overrun reported in this
section is the overrun incurred during fiscal year 2003 only.
[32] Additional details are provided in a classified annex to this
report.
[33] Program Element 0603883C, "BMD Boost Defense Segment."
[34] Report of the American Physical Society Study Group on Boost-Phase
Intercept Systems for National Missile Defense (July 2003).
[35] Battleson, Kirk, et al., Phase One Engineering Team (POET),
Parameters Affecting Boost Phase Intercept System (February 2002).
[36] Plume-to-hardbody handover.
[37] The satellites were to operate at about 1,350 kilometers above the
earth. By comparison, satellites in geo-synchronous orbit operate at
about 36,000 kilometers.
[38] A performance measurement baseline reflects all of the work tasks
that must be performed to meet contract objectives and the schedule and
budget for performing each task.
[39] MDA recently changed the name of the THAAD element to "Terminal
High Altitude Area Defense."
[40] In this context, the BMD community uses the terms "missile" and
"interceptor" interchangeably.
[41] The demonstration program is known formerly as the "Program
Definition and Risk Reduction" (PD&RR) phase of acquisition.
[42] U.S. General Accounting Office, THAAD Restructure Addresses
Problems But Limits Early Capability, GAO/NSIAD-99-142 (Washington,
D.C.: June 30, 1999).
[43] "Product development" is referred to as the "System Development &
Demonstration" (SDD) phase of acquisition and formerly as "Engineering
& Manufacturing Development" (EMD).
[44] A CDR may also be known as a Design Readiness Review (DRR).
[45] White Sands Missile Range is a U.S. Army missile test range in New
Mexico.
[46] Pacific Missile Range Facility is a U.S. Navy missile test range
in Kauai, Hawaii.
[47] The program office refers to these incidents as "energetic release
incidents." The incidents occurred at Chemical Systems Division (CSD),
a subsidiary of Pratt and Whitney.
[48] In September 2003, the prime contractor estimated that the
contract would be completed approximately $0.7 million below the
budgeted cost.
[49] U.S. General Accounting Office, Knowledge-Based Practices Are
Being Adopted, but Risks Remain, GAO-03-441 (Washington, D.C.: April
30, 2003).
[50] U.S. General Accounting Office, Knowledge-Based Practices Are
Being Adopted, but Risks Remain, GAO-03-441 (Washington, D.C.: April
30, 2003).
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