Space Acquisitions
Stronger Development Practices and Investment Planning Needed to Address Continuing Problems Gao ID: GAO-05-891T July 12, 2005GAO was asked to testify on problems relating to the Department of Defense's (DOD) space system acquisitions. In doing so, we drew on our previous reports related to the causes of acquisition problems, underlying incentives and pressures, and potential solutions.
Our work on the acquisition of space-based capabilities over the last several years has been conducted on two levels. First, we have reviewed most of the major space system acquisitions to determine their status at different points in time. The results are discouraging--systems cost more and take much longer to acquire than promised when initially approved. In some cases, the justification or business case for the system when initially approved is far different from the current status, so DOD has had to re-assess the need to acquire that particular system and the soundness of its acquisition strategy. Second, we have analyzed the common and causal factors for these poor acquisition outcomes. Overall, we have found that DOD has been unable to match resources (technology, time, money) to requirements before beginning individual programs, setting the stage for technical and other problems, which lead to cost and schedule increases. Specifically, (1) requirements for what the satellite needed to do and how well it must perform are not adequately defined at the beginning of a program or are changed significantly once the program has begun; (2) technologies are not mature enough to be included in product development; and (3) cost estimates are unreliable--largely because requirements have not been fully defined and because programs start with many unknowns about technologies. We also have reported on cross-cutting factors that make it more difficult for DOD to achieve a match between resources and requirements for space acquisitions. These include: a diverse array of organizations with competing interests; a desire to satisfy all requirements in a single step, regardless of the design or technology challenge; and a tendency for acquisition programs to take on technology development that should occur within the S&T environment. On a broader scale, DOD starts more programs than it can afford in the long run, forcing programs to underestimate costs and over promise capability. As a result, there is pressure to suppress bad news about programs, which could endanger funding and support, as well as to skip testing because of its high cost. One key to success is closing the gaps between available technologies and customer needs before beginning an acquisition program. This puts programs in a better position to succeed because they can focus on design, system integration, and manufacturing. DOD has recently revised its space acquisition policy, in part to attain more knowledge about technologies before starting an acquisition program. However, we remain concerned that the policy still allows programs to begin before demonstrating technologies in an operational or simulated environment.
GAO-05-891T, Space Acquisitions: Stronger Development Practices and Investment Planning Needed to Address Continuing Problems
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United States Government Accountability Office:
GAO:
Testimony:
Before the Strategic Forces Subcommittee, Committee on Armed Services,
U.S. House of Representatives:
For Release on Delivery:
Expected at 1:00 p.m. EDT Tuesday, July 12, 2005:
Space Acquisitions:
Stronger Development Practices and Investment Planning Needed to
Address Continuing Problems:
Statement of Robert E. Levin, Director, Acquisition and Sourcing
Management:
GAO-05-891T:
GAO Highlights:
Highlights of GAO-05-891T, a report to Strategic Forces Subcommittee of
the Committee on Armed Services, U.S. House of Representatives:
Why GAO Did This Study:
GAO was asked to testify on problems relating to the Department of
Defense‘s (DOD) space system acquisitions. In doing so, we drew on our
previous reports related to the causes of acquisition problems,
underlying incentives and pressures, and potential solutions.
What GAO Found:
Our work on the acquisition of space-based capabilities over the last
several years has been conducted on two levels. First, we have reviewed
most of the major space system acquisitions to determine their status
at different points in time. The results are discouraging”systems cost
more and take much longer to acquire than promised when initially
approved. In some cases, the justification or business case for the
system when initially approved is far different from the current
status, so DOD has had to re-assess the need to acquire that particular
system and the soundness of its acquisition strategy.
Second, we have analyzed the common and causal factors for these poor
acquisition outcomes. Overall, we have found that DOD has been unable
to match resources (technology, time, money) to requirements before
beginning individual programs, setting the stage for technical and
other problems, which lead to cost and schedule increases.
Specifically:
* Requirements for what the satellite needed to do and how well it must
perform are not adequately defined at the beginning of a program or are
changed significantly once the program has begun.
* Technologies are not mature enough to be included in product
development.
* Cost estimates are unreliable”largely because requirements have not
been fully defined and because programs start with many unknowns about
technologies.
We also have reported on cross-cutting factors that make it more
difficult for DOD to achieve a match between resources and requirements
for space acquisitions. These include: a diverse array of organizations
with competing interests; a desire to satisfy all requirements in a
single step, regardless of the design or technology challenge; and a
tendency for acquisition programs to take on technology development
that should occur within the S&T environment. On a broader scale, DOD
starts more programs than it can afford in the long run, forcing
programs to underestimate costs and over promise capability. As a
result, there is pressure to suppress bad news about programs, which
could endanger funding and support, as well as to skip testing because
of its high cost.
One key to success is closing the gaps between available technologies
and customer needs before beginning an acquisition program. This puts
programs in a better position to succeed because they can focus on
design, system integration, and manufacturing. DOD has recently revised
its space acquisition policy, in part to attain more knowledge about
technologies before starting an acquisition. However, we remain
concerned that the policy still allows programs to begin before
demonstrating technologies in an operational or simulated environment.
What GAO Recommends:
DOD has attempted to address its problems in space system acquisitions,
but, as our reports have indicated, there is still a critical need to
adopt practices that would assure DOD:
* Separates technology development from acquisition;
* Adopts evolutionary approaches that pursue incremental increases in
capability; and
* Guides program start decisions with investment strategies that
identify (1) overall capabilities and how to achieve them, that is,
what role space will play versus other air-, sea-, and land-based
assets and (2) priorities for funding.
www.gao.gov/cgi-bin/getrpt?GAO-05-891T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robert E. Levin at (202)
512-3519 or levinr@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss DOD's efforts to acquire space-
based capabilities. In fiscal year 2006 alone, DOD plans to spend
almost $20 billion to develop and procure satellites and other space
systems. Our work on the acquisition of space-based capabilities over
the last several years has been conducted on two levels. Mrst, we have
reviewed most of the major space system acquisitions to determine their
status at different points in time. The results are discouraging-
systems cost more and take much longer to acquire than promised when
initially approved. In some cases, the justification or business case
for the system when initially approved is far different from the
current status, so DOD has had to re-assess the need to acquire that
particular system and the soundness of its acquisition strategy.
Second, we have analyzed space system acquisitions to identify the
common and causal factors for these poor outcomes. Overall, we have
found that DOD has been unable to match resources (technology, time,
and money) to requirements before beginning individual programs,
setting the stage for technical and other problems, which lead to cost
and schedule increases. Moreover, on a broader scale, DOD starts more
programs than it can afford, creating a set of incentives and pressures
that invariably have negative effects on individual programs and the
larger investment portfolio. Our recommendations have been focused on
getting modifications to the space acquisition policy to ensure that
decisions are more knowledge-based and holding decision makers
accountable. Here the results are mixed. We have seen some positive
changes to the policy, such as a greater emphasis on attaining
knowledge about technologies, but we remain concerned that the policy
still allows programs to begin before those technologies are actually
demonstrated in an operational or simulated environment.
My testimony today describes the condition we have found in our system-
focused reviews and lays out the problems across systems and the
changes that need to be made if DOD is to break the cycle of
acquisition problems. Let me start by recognizing that developing
satellites is a very complex task and one which does differ from other
military systems. However, we have not been convinced that those
differences merit distinction in how system development and production
are approached. Nor should those differences ever excuse the Department
from achieving the outcomes it promises when requesting and receiving
funding.
Problems Affecting Space System Acquisitions Persist:
For decades, space acquisition programs have been encountering large
cost increases and schedule delays. As a result, DOD has been unable to
deliver capabilities as promised. This past year alone, for example,
costs have continued to climb on the Space Based Infrared System High
(SBIRS-High) program-triggering another Nunn-McCurdy[Footnote 1] review
and certification of the program and pushing DOD's investment in this
critical missile warning system to over $9.9 billion, from the initial
$3.9 billion estimate made 9 years ago. At the same time, programs
focused on developing new communications satellites are facing cost
increases and schedule delays, the National Polar-orbiting Operational
Environmental Satellite System has been restructured and is facing cost
increases and schedule delays, and unit cost increases for launch
vehicles have now increased by 81 percent since 2002 due to erroneous
assumptions about the commercial launch market upon which the program's
business case was based.
Taken together, these problems have had a dramatic impact on DOD's
overall space portfolio. DOD has had to shift scarce resources to
poorly performing programs and has pushed off starting a new version of
the Global Positioning System (forcing costs to increase for the
current version under development). Cost increases have also kept DOD
from investing more in science and technology efforts that support
space. We reported recently, for example, that funding for testing of
space technologies has declined in recent years. It is also important
to note that, for some programs, DOD is spending considerable sums of
money-in addition to what was planned or long after it had originally
anticipated-thus posing additional pressures on its overall investment
portfolio. DOD originally planned to complete expenditures for SBIRS-
High in fiscal year 2006, for example, but currently it plans to spend
about $3.4 billion in fiscal years 2007 through 2013.
At the same time DOD is facing these problems, it is attempting to
undertake new efforts-including the Transformational Satellite
Communications System (TSAT) program and Space Radar program-which are
expected to be among the most expensive and complex ever, and which DOD
is heavily relying on in its efforts to fundamentally transform how
military operations are conducted. In fact, many other weapon systems
will be interfaced with these satellites and highly dependent on them
for their own success.
Figure 1 shows the percent increase in total cost from the initial
estimate to its most recent, for current major space system
acquisitions. Systems that have incurred particularly significant cost
increases include the SBIRS-High and the Global Broadcasting System. In
addition, relatively newer programs such as the Evolved Expendable
Launch Vehicle (EELV), Advanced Extremely High Frequency (AEHF)
satellite and the Wideband Gapfiller communication satellites have also
been experiencing cost increases. In general, the longer a system has
been in development, the greater the amount of its cost growth. In
addition, nearly all of the programs have also experienced significant
schedule delays as well.
Figure 1: Percent Increase in Program Cost from Initial Estimate to the
Current Estimate (for major space system acquisitions underway):
[See PDF for image]
Source: Department of Defense's Selected Acquisition Reports.
[End of figure]
As figure 2 illustrates, there is a vast difference between DOD's
budgeting plans and the reality of the cost of its space systems. Over
the next 10 years, space systems, each year, on average, will cost DOD
in excess of $1.5 billion more than it had originally planned.
Moreover, the sum of the percentage cost increases represents an
additional $20 billion over the combined lives of the programs above.
This means there is $1.5 billion less that DOD has to spend on other
priorities annually and tens of billions less available for DOD's
overall weapons portfolio over time. It is not clear how DOD's budget
will accommodate these additional costs.
Figure 2: Comparison between Original Cost Estimates and Current Cost
Estimates for Major Space Systems Acquisitions Underway:
[See PDF for image]
Source: Department of Defense's Selected Acquisition Reports.
[End of figure]
In Table 1 below, we highlight recent findings from our reports. As the
table notes, many programs are still addressing past mistakes in
acquisition approaches and contractor oversight as well as technical,
design, and manufacturing problems.
Table 1: Highlights of Recent Findings:
Program: Advanced Extremely High Frequency Satellites (AEHF):
Recent findings: Unit cost has increased by more than 50 percent. In
2004, the program experienced cost increases of more than 15 percent,
which required a Nunn-McCurdy notification to Congress. Schedule
slippages for launching this communication system have now stretched to
over 3 years. Our reports have attributed cost increases most recently
to production problems and changing security requirements. Earlier cost
increases were attributed, in part, to a rush to start the program,
changing requirements, and a lack of funding to support an overly
optimistic schedule.
Program: Evolved Expendable Launch Vehicle (EELV):
Recent findings:
Unit cost increases (for launch vehicles) have increased by 81 percent.
In 2004, this program experienced cost increases of more than 25
percent, which triggered statutory requirements to reassess and
recertify the program. Our reports have found that a chief reason for
cost increases is a decline in the commercial launch market upon which
the program's business case was based as well as a reduction in
anticipated launches. Recently, the two primary contractors-Boeing
Launch Services, Inc. and Lockheed Martin Space Systems Company-agreed
to form a joint venture to combine production, engineering, test, and
launch operations for U.S. government launches. It is argued that this
will help reduce costs while enabling the government to retain two
launch systems.
Program: Mobile User Objective System (MUGS):
Recent findings: This is a relatively new effort: No significant cost
increases or schedule delays are reported. However, we reported this
year that early procurement of long lead items before achieving a
stable design for this Navy communications system could lead to cost
increases and the program's development schedule remains compressed-
posing risks should software development or other technical or design
problems be encountered.
Program: Navstar Global Positioning System II (GPS II):
Recent findings: Total costs of the GPS II modernization program have
increased by over 20 percent. This is largely due to DOD's decision to
delay the start of the follow-on GPS III program. Specifically, the
delay will require DOD to buy additional GPS IIF satellites-so far at
least 7 more than the program had planned. The launch of the first IIR-
M satellite has been delayed at least 7 months due to production
problems.
Program: National Polar-orbiting Operational Environmental Satellite
System (NPOESS):
Recent findings: Costs have increased by roughly 10 percent due to
changes to the contract, increased program management costs, and
increased funds needed to mitigate risks. The program office reported
that the increases include costs associated with extending the
development schedule and increased sensor costs.
Program: Space Based Infrared System High (SBIRS-High).
Recent findings: This missile warning program has experienced schedule
slips of at least 6 years and cost increases that have triggered
legislative requirements to reassess and recertify the program several
times-most recently this spring. While DOD's total program cost
estimate was about $3.9 billion, it is now $9.9 billion-nearly a 150
percent unit cost increase. Our reviews have attributed past problems
to an acquisition approach that decreased oversight of contractors,
technology challenges, and software development problems. DOD is
currently reexamining this program, potential alternatives, and cost
estimates.
Program: Space Tracking and Surveillance System (STSS):
Recent findings: This is a relatively new effort: No major reported
cost increases or schedule delays. The initial increment of this
program, which started in 2002, is composed of two demonstration
satellites that were built under the previous Space Based Infrared
System-Low (SBIRS-Low) program. SBIRS-Low had incurred cost increases
and schedule delays and other problems that were so severe, DOD
abandoned the effort. The STSS program has experienced system quality
and system engineering problems with the payload, however, the program
office still expects early delivery and launch of the satellites.
Program: Space Radar.
Recent findings: This is a relatively new effort with no reported cost
increases or schedule delays. We reported last year that DOD was not on
a path that would enable it to accumulate knowledge and had not
formalized agreement on requirements needed to start this technically
complex and potentially very costly effort. Congress directed DOD to
keep space radar efforts in technology development so that it would
accumulate critical knowledge. In January 2005, DOD restructured this
effort, focusing on developing smaller, demonstrator satellites,
strengthening its partnership with the intelligence community, and
revising its acquisition strategy.
Program: Transformational Satellite Communications System (TSAT):
Recent findings: This is a relatively new effort focused on developing
much more robust communication satellites. It entered the formal
acquisition phase in 2004 with only one of seven critical technologies
mature. Due to concerns about the risks such an approach poses,
Congress reduced funds and directed that the program focus on
technology development before proceeding further with acquisition
activities. Although the program started the acquisition program and
established its acquisition program baseline with immature critical
technologies, the program director told us that the system development
contract will not be awarded until critical technologies are mature.
Program: Wideband Gapfiller Satellites (WGS):
Recent findings: Costs have increased since 2000 and DOD now
anticipates buying two additional satellites. The launch of the first
satellite has been delayed by almost 2 years. This program involves the
purchase of commercial communications satellites for DOD purposes.
However, we reported that the program encountered design, integration,
and manufacturing problems due largely to the fact that the program was
not able to leverage expertise from the commercial sector. This was
because there was less than anticipated demand for the commercial
satellite. Conflicts in scheduling for the launch pad also contributed
to the schedule delay.
Source: GAO analysis of DOD data and previous GAO reports.
[End of table]
Causes of Space System Acquisition Problems:
We have analyzed the range of space-based acquisitions over the last
several years to identify the common and causal factors for these poor
acquisition outcomes. Overall, we have found that DOD has been unable
to match resources (technology, time, and money) to requirements before
beginning individual programs, setting the stage for technical and
other problems, which lead to cost and schedule increases. Moreover, on
a broader scale, DOD starts more programs than it can afford, creating
a set of incentives and pressures that invariably have negative effects
on individual programs and the larger investment portfolio.
Match Between Resources and Requirements Seldom Achieved at the Start
of Acquisition Program:
Our past work has shown that space programs have typically not achieved
a match between requirements and resources at program start. In other
words, the programs did not have the level of knowledge needed to
assure that they could be completed within expected cost and schedule
estimates.
Specifically:
* Requirements for what the satellite needed to do and how well it must
perform are not adequately defined at the beginning of a program or are
changed significantly once the program has begun.
* Technologies are not mature enough to be included in product
development.
* Cost estimates are unreliable-largely because requirements have not
been fully defined and because programs start with many unknowns about
technologies.
There are a range of other resource gaps that DOD faces when it begins
new space acquisitions. For example, we have reported on deficiencies
within the space acquisition workforce, contracting strategies that
support acquisitions, contractor capabilities, as well as funding
available for testing of space technologies. Nevertheless, unstable
requirements and immature technologies are the most significant
contributors to cost and schedule increases, and not just for space
acquisitions but all DOD weapons acquisitions.
We also have reported on cross-cutting factors that make it more
difficult for DOD to achieve a match between resources and requirements
for space acquisitions. First, space systems may suffer from more
requirements pressures than other weapon systems because there is
usually a very broad constituency-contractors, military services,
civilian users, administrations, and Congress-behind each satellite
program. This creates challenges in making tough tradeoff decisions.
The Global Positioning System, for example, not only serves military
users but also serves civilians, supports various key economic sectors
such as transportation and communications, and is used by allies. As a
result, when starting these new systems, space program managers can
expect to be inundated with competing demands-not just among military
users-but also among civilian and industry users.
Second, space acquisition programs have historically attempted to
satisfy all requirements in a single step, regardless of the design
challenge or the maturity of technologies to achieve the full
capability. There is a variety of reasons for this, including a desire
to include the most advanced technologies onboard satellites,
particularly in view of the length of time it takes to develop space
systems. However, this approach invariably increases the technology
challenges facing programs, and thus, the risk that costly problems
will be encountered.
Third, there is a tendency among space system acquisition programs to
take on technology development that should occur within the science and
technology (S&T) environment. Reasons for this include the greater
ability to secure funding for costly technology development within an
acquisition program versus a science and technology program, a belief
among the acquisition community that labs in charge of developing space
technologies do not adequately understand their needs, as well as
communication gaps between the S&T and acquisition communities.
Nevertheless, our work has continually shown that allowing technology
development to carry over into product development increases the risk
that significant problems will be discovered late in development.
Addressing such problems may require more time, money, and effort to
fix because they may require more extensive retrofitting and redesign
as well as testing. Moreover, when there are many unknowns about
critical technologies, a program cannot reliably estimate what
resources will be needed to complete a program-leaving DOD and the
Congress in a position of committing to large investments without
knowing how much they will truly cost or how long it will actually take
for capabilities to be delivered.
DOD Starts More Programs than It Can Afford in the Long Run:
There is a widespread belief among DOD and other officials involved
with space programs that DOD starts more programs than it can afford in
the long run, forcing programs to underestimate costs and over-promise
capability and creating a host of negative incentives and pressures.
Specifically, officials we have spoken with cited the following.
* Because programs are funded annually and priorities have not been
established, competition for funding continues over time, forcing
programs to view success as the ability to secure the next installment
rather than the end goal of delivering capabilities when and as
promised.
* Concurrently, when faced with lower budgets, senior executives within
the Office of the Secretary of Defense and the Air Force would rather
make across-the-board cuts to all space programs than hard decisions as
to which ones to keep and which ones to cancel or cut back.
* Having to continually "sell" a program creates incentives to suppress
bad news about a program's status and avoid activities that uncover bad
news.
* When combined with the high cost of launching demonstrators into
space, the competition for funding often encourages programs to avoid
testing technologies in space before acquisition programs are started.
Our previous reports have found that these pressures are long-standing
and common to weapon acquisitions, not just space acquisitions. The
competition within DOD to win funding and get approval to start a new
program is intense, creating strong incentives to make a weapon system
stand out from existing or alternative systems. Moreover, overall DOD
funding constraints put a high priority on appearing affordable, making
it important for program sponsors to provide cost estimates that will
fit within the funding constraints. Instead of forcing trade-offs,
challenging performance requirements-when coupled with other
constraints, such as cost or the weight of the satellite-can drive
product developers to pursue exotic solutions and technologies that, in
theory, can do it all.
Keys to Overcoming Space Acquisition Problems:
Our work has shown that fundamental changes are necessary to stem cost
and schedule increases and enable DOD to field new capabilities more
efficiently and effectively. The following actions, in particular,
would assure that DOD can match resources to requirements before its
starts new programs and that it has an investment strategy in place
that would prevent it from starting more programs than it can afford.
Specifically, to better match resources to requirements, DOD should do
the following.
* Implement processes and policies that stabilize requirements. Our
reports over the years as well as many DOD studies have pointed to a
need to stabilize requirements for all weapons system development. In
response, the Office of the Secretary of Defense has taken steps to
strengthen requirements setting department-wide, principally by
establishing its new Joint Capabilities Integration and Development
System (JCIDS). JCIDS is focused on achieving greater across-the-board
agreement up front on what capabilities need to be achieved and how
they are to be achieved. Because this system is relatively new, it is
too early to determine whether it is addressing requirements setting
problems within DOD. The Air Force has also taken measures to
strengthen requirements setting for key systems such as SBIRS-High and
Space Radar, including instituting high-level boards to approve of new
requirements and processes that ensure the right officials are
involved. However, we reported on Space Radar in July 2004 that even
these changes were not ensuring that the intelligence community-a major
stakeholder in Space Radar-was in agreement with requirements and that
all stakeholders would be held accountable for their agreements. DOD is
now working on strengthening its partnership within the Space Radar
program to avoid this problem.
* Separate technology development from acquisition. We have previously
reported that DOD's practice of taking on technology development
concurrently with product development stands in sharp contrast to that
followed by successful programs and the approach recommended by DOD's
acquisition policy for weapon systems. Successful programs will not
commit to undertaking product development unless they have a high
confidence that they have achieved a match between what the customer
wants and what the program can deliver. Technologies that are not
mature continue to be developed in an environment that is focused
solely on technology development. Another key to success is employing
the technique of systems engineering to close the gaps between
available technologies and customer needs before committing to new
product development. This puts programs in a better position to succeed
because they can focus on design, system integration, and
manufacturing. DOD has made some efforts to address this problem. For
example, it has recently revised its space acquisition policy, in part
to encourage programs to attain more knowledge about technologies
before starting. It has developed a strategy for space S&T to help
strengthen partnerships between the acquisition and S&T communities and
assure they are working toward common goals. It has strengthened its
systems engineering capabilities. Department-wide, DOD has expanded the
authorities of its Director of Defense Research and Engineering (DDR&E)
to help keep technology development out of acquisition programs and
within the S&T communities. However, we remain concerned that these
measures will not be sufficient. The space acquisition policy, for
example, still allows programs to begin before demonstrating
technologies in an operational or simulated environment. Moreover, DOD
is still approving new programs like TSAT even when many of their
critical technologies are still immature. In fact, in our 2005
department-wide assessment of selected major weapon programs, we found
that only 15 percent of the programs we assessed began system
development having demonstrated all of their technologies mature.
* Adopt an evolutionary development approach for its space systems,
that is, pursue incremental increases in capability versus significant
leaps. Our examinations of best practices have found that this approach
can decrease time and cost for development because it closes gaps in
unknowns. DOD's space acquisition policy states its preference for
evolutionary development, and DOD pursued evolutionary approaches in
the past with GPS. But, more often, it has attempted to achieve
significant leaps in capability in one step. Moreover, DOD officials
have told us that they are pursuing evolutionary development for space
systems, when, in fact, they are beginning programs by challenging
program managers to achieve significant leaps in capability with the
intention of abandoning those efforts later in the development cycle
should too many problems be encountered. This is not a true
evolutionary approach, as it still leaves DOD facing increased
technical challenges at the beginning of a program and thus, increased
risks, and it raises expectations on the part of stakeholders who may
be unwilling to accept less capability later on.
* Address other resource shortfalls. As noted earlier, our reports have
identified other resource gaps that should be addressed by DOD. For
example, DOD S&T officials cited shortages of staff with science and
engineering backgrounds and had more concerns about the future since
their workforces were reaching retirement age. Officials who oversee
programs cited deficiencies in the program manager workforce-
particularly when it comes to experience and knowledge in dealing with
contractors. In addition, funding for testing space technologies has
decreased, cost to launch experiments have increased, and opportunities
for testing have been reduced with the loss of the space shuttle, which
had been partially used for DOD-related technology experiments. DOD
concurred with our recommendation that it develop plans for addressing
these shortages. The Congress has also called on DOD to strengthen its
efforts to revitalize its space workforce, and we are undertaking a
review for your committee on progress being made by the DOD.
DOD should also guide its decisions to start acquisition programs with
an overall investment strategy. Our recent reports on space and other
weapon systems have suggested that having a department-wide investment
strategy for weapon systems would help reduce pressures facing
acquisition programs. For space in particular, a strategy would help
DOD rebalance its investments in acquisition programs as it continues
to contend with cost increases from its programs. Moreover, it would
also help DOD balance investments between S&T and acquisition. This is
particularly important since DOD is undertaking a range of initiatives-
collectively known as operationally responsive space-designed to
facilitate evolutionary development, more testing of technologies
before acquisition, and ultimately, enable DOD to deliver space-based
capabilities to the warfighter much faster and cheaper.
Critical components of an investment strategy would include identifying
overall capabilities and how to achieve them, that is, what role space
will play versus other air-, sea-, and land-based assets; identifying
priorities for funding; and implementing mechanisms that would enforce
the strategy. While DOD has made revisions to its requirements-setting
and budgeting processes to strengthen investment planning, it is
unclear as to how these changes will be implemented over time and
whether they can serve as a foundation for direction of space S&T and
acquisition investments.
In conclusion, there is no question that space acquisition programs are
encountering cost increases and schedule delays that are having
negative effects-both in terms of DOD's ability to deliver current
capabilities as well as its ability to deliver future capabilities.
Many of these problems are rooted in past mistakes and their impact
will be felt for years to come. Nevertheless, it is exceedingly
important that DOD takes whatever midcourse corrections it can and
ensures it has a foundation in place that puts acquisition programs on
a better path, particularly since DOD is counting on its future space
programs to play an increasingly critical role in national security and
military operations. At this juncture, DOD must still adopt practices
that better match resources to requirements before starting its
acquisition programs and decide exactly what role space will play in
achieving future desired capabilities and what programs merit the
highest priorities. At the same time, DOD must continue its efforts to
assure it has the right resources to carry out increasingly technically
challenging programs-including workforce, funds for testing, less
costly and more responsive launch systems, and standardized components-
and that it continue to seek ways to deliver capability much more
efficiently and effectively. All of these changes will not be easy to
undertake. They require significant shifts in thinking about how space
systems should be developed; changes in incentives and perceptions; as
well as further policy and process changes. As a result, these efforts
will require strong and sustained commitment from senior executives and
encouragement from the Congress.
Mr. Chairman and Members of the Subcommittee, this concludes my
statement. I would be happy to respond to any questions that you or
other members of the Subcommittee may have.
Scope and Methodology:
In preparing for this testimony, we relied on previously issued GAO
reports on assessments of individual space programs, incentives and
pressures that drive space system acquisition problems, common problems
affecting space system acquisitions, space science and technology, and
DOD's space acquisition policy, as well as our reports on best
practices for weapon systems development. We also analyzed DOD's
Selected Acquisition Reports to assess cost increases and investment
trends. We conducted our review between June 23 and July 12, 2005 in
accordance with generally accepted government auditing standards.
Contacts and Acknowledgements:
For future information, please contact Bob Levin at 202-512-4841 or
levinr@gao.gov. Individuals making contributions to this testimony
include Acknowledgments Cristina Chaplain, Maricela Cherveny, Art
Gallegos, Jean Harker, John Krump, and Nancy Rothlisberger.
(120472):
FOOTNOTES
[1] 10 U.S.C § 2433.
