Defense Acquisitions
Missile Defense Agency Fields Initial Capability but Falls Short of Original Goals Gao ID: GAO-06-327 March 15, 2006The Department of Defense (DOD) has spent nearly $90 billion since 1985 to develop a Ballistic Missile Defense System (BMDS). In the next 6 years, the Missile Defense Agency (MDA), the developer, plans to invest about $58 billion more. MDA's overall goal is to produce a system that is capable of defeating enemy missiles launched from any range during any phase of their flight. MDA's approach is to field new capabilities in 2-year blocks. The first--Block 2004--was to provide some protection by December 2005 against attacks out of North Korea and the Middle East. Congress requires GAO to assess MDA's progress annually. This year's report assesses (1) MDA's progress during fiscal year 2005 and (2) whether capabilities fielded under Block 2004 met goals. To the extent goals were not met, GAO identifies reasons for shortfalls and discusses corrective actions that should be taken.
MDA made good progress during fiscal year 2005 in the development and fielding of two of the seven elements reviewed. Most of the others encountered problems that slowed progress. Meanwhile, contractors for the seven elements exceeded their fiscal year budget by about $458 million, or about 14 percent, most of which was attributable to cost overruns in developing the Ground-based Midcourse Defense (GMD) element. Accelerating Block 2004 allowed MDA to successfully field missile defense assets faster than planned. But, MDA delivered fewer quantities than planned and exceeded the cost goal of $6.7 billion by about $1 billion. The increased cost is primarily the added cost of sustaining fielded assets. However, the increase would have been greater if some development and other activities had not been deferred into Block 2006. Also, MDA has been unable to verify actual system performance because of flight test delays. Time pressures caused MDA to stray from a knowledge-based acquisition strategy. Key aspects of product knowledge, such as technology maturity, are proven in a knowledge-based strategy before committing to more development. MDA followed a knowledge-based strategy with elements not being fielded, such as Airborne Laser and Kinetic Energy Interceptor. But it allowed the GMD program to concurrently mature technology, complete design activities, and produce and field assets before end-to-end testing of the system--all at the expense of cost, quantity, and performance goals. For example, the performance of some GMD interceptors is questionable because the program was inattentive to quality assurance. If the block approach continues to feature concurrency as a means of acceleration, MDA's approach may not be affordable for the considerable amount of capability that is yet to be developed and fielded. MDA has unusual flexibility to modify its strategies and goals, make trade-offs, and report on its progress. For example, MDA's Director may determine when cost variations are significant enough to report to Congress. MDA is taking actions to strengthen quality control. These actions are notable, but they do not address the schedule-induced pressures of fielding or enhancing a capability in a 2-year time frame or the need to fully implement a knowledge-based acquisition approach.
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-06-327, Defense Acquisitions: Missile Defense Agency Fields Initial Capability but Falls Short of Original Goals
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
March 2006:
Defense Acquisitions:
Missile Defense Agency Fields Initial Capability but Falls Short of
Original Goals:
GAO-06-327:
GAO Highlights:
Highlights of GAO-06-327, a report to congressional committees:
Why GAO Did This Study:
The Department of Defense (DOD) has spent nearly $90 billion since 1985
to develop a Ballistic Missile Defense System (BMDS). In the next 6
years, the Missile Defense Agency (MDA), the developer, plans to invest
about $58 billion more. MDA‘s overall goal is to produce a system that
is capable of defeating enemy missiles launched from any range during
any phase of their flight. MDA‘s approach is to field new capabilities
in 2-year blocks. The first”Block 2004”was to provide some protection
by December 2005 against attacks out of North Korea and the Middle
East.
Congress requires GAO to assess MDA‘s progress annually. This year‘s
report assesses (1) MDA‘s progress during fiscal year 2005 and (2)
whether capabilities fielded under Block 2004 met goals. To the extent
goals were not met, GAO identifies reasons for shortfalls and discusses
corrective actions that should be taken.
What GAO Found:
MDA made good progress during fiscal year 2005 in the development and
fielding of two of the seven elements reviewed. Most of the others
encountered problems that slowed progress. Meanwhile, contractors for
the seven elements exceeded their fiscal year budget by about $458
million, or about 14 percent, most of which was attributable to cost
overruns in developing the Ground-based Midcourse Defense (GMD)
element.
Accelerating Block 2004 allowed MDA to successfully field missile
defense assets faster than planned. But, MDA delivered fewer quantities
than planned and exceeded the cost goal of $6.7 billion by about $1
billion. The increased cost is primarily the added cost of sustaining
fielded assets. However, the increase would have been greater if some
development and other activities had not been deferred into Block 2006.
Also, MDA has been unable to verify actual system performance because
of flight test delays.
Block 2004 Goals, as of February 2003, Compared with Fielded Assets, as
of December 2005
[See PDF for image]
[End of table]
Time pressures caused MDA to stray from a knowledge-based acquisition
strategy. Key aspects of product knowledge, such as technology
maturity, are proven in a knowledge-based strategy before committing to
more development. MDA followed a knowledge-based strategy with elements
not being fielded, such as Airborne Laser and Kinetic Energy
Interceptor. But it allowed the GMD program to concurrently mature
technology, complete design activities, and produce and field assets
before end-to-end testing of the system”all at the expense of cost,
quantity, and performance goals. For example, the performance of some
GMD interceptors is questionable because the program was inattentive to
quality assurance. If the block approach continues to feature
concurrency as a means of acceleration, MDA‘s approach may not be
affordable for the considerable amount of capability that is yet to be
developed and fielded. MDA has unusual flexibility to modify its
strategies and goals, make trade-offs, and report on its progress. For
example, MDA‘s Director may determine when cost variations are
significant enough to report to Congress.
MDA is taking actions to strengthen quality control. These actions are
notable, but they do not address the schedule-induced pressures of
fielding or enhancing a capability in a 2-year time frame or the need
to fully implement a knowledge-based acquisition approach.
What GAO Recommends:
To better ensure the success of future development efforts, GAO
recommends that MDA implement a knowledge-based acquisition strategy
for future missile defense efforts, assess whether such a strategy is
compatible with a 2-year block strategy, and adopt more transparent
criteria for reporting significant departures from plans. DOD did not
agree to take any of the actions we recommended.
www.gao.gov/cgi-bin/getrpt?GAO-06-327.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Paul L. Francis at (202)
512-4841 or francisp@gao.gov.
[End of section]
Contents:
Letter:
Results In Brief:
Background:
MDA Makes Progress During Fiscal Year 2005, but Some Activities Not
Completed as Planned:
Block 2004 Delivers Assets Faster, but With Unverified Performance:
Schedule Pressures Caused Management to Stray from Knowledge-Based
Practices:
MDA Is Taking Several Corrective Actions:
Conclusions:
Recommendations for Executive Actions:
Agency Comments and Our Evaluation:
Appendix I: Comments from the Department of Defense:
Appendix II: Block 2004 Element Assessments:
Appendix III: An Assessment of BMDS Prime Contractors' Cost and
Schedule Performance:
Appendix IV: MDA'S Audit of GMD Interceptor Contractors:
Appendix V: Integrated Management Plan:
Appendix VI: Scope and Methodology:
Appendix VII: GAO Contact and Staff Acknowledgment:
Tables:
Table 1: BMDS Elements:
Table 2: Prime Contractor Fiscal Year 2005 and Cumulative Cost and
Schedule Performance:
Table 3: Evolution of Block 2004 Quantity Goals versus Fielded Assets:
Table 4: Composition of the Block 2004 Fielded Configuration Cost Goal,
February 2003:
Table 5: Composition of the Block 2004 Fielded Configuration Cost Goal,
February 2004:
Table 6: Expected Cost of Block 2004 Fielded Capability, Including
Initial Sustainment:
Table 7: C2BMC Risk Areas:
Table 8: Airborne Laser Technical Issues and Their Potential Impact on
Program:
Figures:
Figure 1: Components of the GMD Element:
Figure 2: Aegis BMD Weapon System Fiscal Year 2005 Cost and Schedule
Performance:
Figure 3: Standard Missile 3 Fiscal Year 2005 Cost and Schedule
Performance:
Figure 4: Airborne Laser Fiscal Year 2005 Cost and Schedule
Performance:
Figure 5: Ground-based Midcourse Defense Fiscal Year 2005 Cost and
Schedule Performance:
Figure 6: Space Tracking and Surveillance System Fiscal Year 2005 Cost
and Schedule Performance:
Figure 7: Terminal High Altitude Area Defense Fiscal Year 2005 Cost and
Schedule Performance:
Abbreviations:
ABL: Airborne Laser:
ASIC: application-specific integrated circuit:
BMDS: Ballistic Missile Defense System:
CPR: Contract Performance Report:
C2BMC: Command, Control, Battle Management, and Communications:
DCMA: Defense Contract Management Agency:
DOD: Department of Defense:
DOT&E: Director, Operational Test and Evaluation:
EKV: exoatmospheric kill vehicle:
FBX-T: Forward-Based X-Band Transportable:
FM: Flight Mission:
FTM: Flight Test Mission:
GMD: Ground-Based Midcourse Defense:
ICBM: intercontinental ballistic missile:
IFT: integrated flight test:
KEI: Kinetic Energy Interceptor:
MAIP: Mission Assurance Implementation Plan:
MAP: Missile Defense System Assurance Provisions:
MDA: Missile Defense System:
NASA: National Aeronautics and Space Administration:
NFIRE: Near Field Infrared Experiment:
SAR: Selected Acquisition Report:
SBX: Sea-Based X-Band:
SDACS: Solid Divert and Attitude Control System:
SM-3: Standard Missile-3:
SBIRS: Space-Based Infrared System:
STSS: Space tracking and Surveillance System:
THAAD: Terminal High Altitude Area Defense:
United States Government Accountability Office:
Washington, DC 20548:
March 15, 2006:
For nearly 50 years, the Department of Defense (DOD) has been spending
money to develop a missile defense system capable of protecting the
U.S. homeland and U.S. deployed forces from ballistic missile attacks.
Since 1985, DOD has spent almost $90 billion for this purpose, and it
plans to invest an additional $58 billion, or about 14 percent of its
research and development budget, over the next 6 years. The Ballistic
Missile Defense System (BMDS) under development includes a diverse
collection of land-, air-, sea-, and space-based assets located around
the globe and founded on cutting-edge technology. The Missile Defense
Agency (MDA)--the component within DOD responsible for managing the
development of the various missile defense programs--originally focused
on developing a test bed in which the design of the various BMDS assets
could be matured and demonstrated. However, in 2002, the President
directed MDA to begin fielding an initial BMDS capability in the 2004
and 2005 time frame.
MDA is currently developing eight BMDS elements: Ground-Based Midcourse
Defense (GMD); Aegis Ballistic Missile Defense (Aegis BMD); Command,
Control, Battle Management, and Communications (C2BMC); Airborne Laser
(ABL); Kinetic Energy Interceptors (KEI); Space Tracking and
Surveillance System (STSS); Terminal High Altitude Area Defense
(THAAD); and BMDS Sensors.[Footnote 1] MDA has adopted an evolutionary
acquisition approach in which the BMDS will be developed and fielded in
2-year blocks. The first block, known as Block 2004, ended on December
31, 2005. The block fielded an initial capability that includes initial
versions of GMD; Aegis BMD; Patriot Advanced Capability-3; and the
Command, Control, Battle Management, and Communications elements. This
capability is designed to provide limited protection of the United
States from ballistic missile attacks out of North Korea and the Middle
East and protection of U.S. forces and critical assets from short-and
medium-range ballistic missiles. Future blocks are expected to enhance
this capability. Over time, MDA expects its block approach to produce
an overarching BMDS capable of protecting the United States, deployed
forces, friends, and allies from ballistic missile attacks of all
ranges.
To facilitate oversight of the ballistic missile defense program, the
Defense Authorization Acts for fiscal years 2002 and 2005 mandated that
we prepare annual assessments of MDA's ongoing progress.[Footnote 2] To
date, we have delivered assessments covering fiscal years 2003 and 2004
to Congress.[Footnote 3] Because our assessment of MDA's fiscal year
2005 progress was ongoing when Block 2004 ended, we were also able to
make observations about the outcome of the block. Specifically, this
report:
1. assesses the progress MDA made during fiscal year 2005 toward the
fiscal year plans of work established by seven of the BMDS elements;
2. compares the fielded Block 2004 capability with the quantity, cost,
and performance goals established for that capability;
3. identifies reasons why the fielded capability fell short of goals;
and:
4. discusses corrective actions being taken by MDA.
To address our objectives, we looked at the accomplishments of seven
BMDS elements--GMD, Aegis BMD, C2BMC, ABL, KEI, STSS, and THAAD. These
elements collectively account for about 73 percent of MDA's research
and development budget. For each element, we examined documents such as
System Element Reviews, test plans and reports, production plans, and
Contract Performance Reports. We also interviewed officials within each
element program office and within MDA functional offices, such as the
Office of Safety, Quality, and Mission Assurance. In addition, we
discussed each element's test program and the results of tests with
DOD's Office of the Director, Operational Test and Evaluation (DOT&E).
We performed our work from May 2005 to March 2006 in accordance with
generally accepted government auditing standards. Additional details of
our scope and methodology can be found in appendix VI.
Results in Brief:
MDA made progress in fiscal year 2005 on seven elements of the BMDS
program, but it did not complete all of the activities scheduled. By
September 30, 2005, MDA planned to develop improved C2BMC software,
field eight Aegis BMD missiles, upgrade seven Aegis destroyers and two
Aegis cruisers for the missile defense mission, emplace 10 GMD
interceptors, and conduct nine flight tests to demonstrate the
performance of various components and elements of the BMDS. At the end
of September, MDA had completed development, but not testing, of
improvements to the C2BMC, delivered all eight Aegis BMD missiles,
delivered 4 of 10 GMD interceptors, upgraded six of seven Aegis
destroyers and two Aegis cruisers, and successfully completed two of
nine flight tests. Two additional tests were completed by the end of
calendar year 2005. Some activities that would have furthered the
development of elements planned for later blocks, such as the THAAD
element, slipped into fiscal year 2006, which could potentially delay
the elements scheduled integration into the BMDS. Although MDA did not
complete all work scheduled during the fiscal year, most of MDA's prime
contractors reported that the accomplished work cost more than
expected. Collectively, the contractors overran their fiscal year 2005
budgets by about $458 million, or about 14 percent, with the GMD
contractor accounting for most--over $365 million--of the overrun. The
GMD contractor alone overran its fiscal year budget by 25 percent.
By December 31, 2005, when Block 2004 officially ended, MDA had
delivered an initial missile defense capability--composed of the GMD,
Aegis BMD, C2BMC elements--to the field faster than it had originally
planned. While it fielded assets, MDA did not meet its quantity, cost,
or performance goals. Block 2004 delivered fewer components than
planned, cost more than anticipated, and its performance is unverified.
Compared to its original goals set in 2003, MDA fielded 10 fewer GMD
interceptors than planned, two fewer radars, 11 fewer Aegis BMD
missiles, and six fewer Aegis ships. Despite some work being deferred
to Block 2006, MDA expected the cumulative cost of developing and
fielding the components to be about $7.7 billion, or about $1 billion
more than originally expected. The $7.7 billion cost represents the
added cost of sustaining fielded assets as well as cost reductions from
the deferral of some Block 2004 characterization and verification
activities into Block 2006. Although it has successfully tested various
functions of the BMDS engagement--such as launch detection, tracking,
interceptor launch, and intercept--MDA cannot estimate the performance
capability of the Block 2004 assets because it has not successfully
completed an end-to-end test of the GMD element using production
representative hardware. Doubts about the rigor of quality control
procedures have also raised additional questions about the performance
of fielded GMD interceptors.
Management compromises made to accelerate fielding prevented MDA from
meeting its Block 2004 goals. In 2002, MDA adopted an acquisition
strategy that includes many of the knowledge-based practices that
enable leading commercial developers to field sophisticated products on
time and within budget. Had MDA followed its original plan, the GMD
program would have moved through a sequence of eight events that
included assessing the maturity of critical technology, designing the
element, and demonstrating the stability of the element's design in an
end-to-end test using production-representative components--all before
making a decision to produce and field the element. At the end of each
block, MDA could have determined whether to continue development in the
next block; transfer all or part of the capability to a military
service for operation, production, and sustainment; or terminate the
development effort completely. However, to place a capability in the
field quickly, MDA allowed the GMD program to accept significant risk
by condensing its acquisition cycle. GMD concurrently matured
technology, designed the element, tested the design, and produced and
fielded the system, even though the stability of the element's design
had not been demonstrated in an end-to-end test and production
processes were not mature. Quality control problems occurred when the
program was accelerated. According to MDA's own audits, the
interceptor's design requirements were unclear and sometimes
incomplete, design changes were poorly controlled, and the
interceptor's design resulted in uncertain reliability and service
life. MDA does have unique flexibility to make changes to its strategy-
-including revising its goals or making trade-offs among the seven BMDS
elements--without necessarily having to seek prior approval from a
higher-level DOD acquisition executive, as most other major acquisition
programs are required to do. DOD acquisition regulations have been
effectively deferred for MDA, and although the Director confers with
the warfighter to define the performance of the BMDS, MDA works with
flexible performance, cost, and quantity goals that can be changed if
they are not achievable with the time or money available. In addition,
there are no criteria to identify which variances are significant
enough to be reported to Congress or when they should be reported. For
example, the Director, by statute, may decide whether a cost variation
is significant enough to be reported to Congress.
MDA is taking several actions to address overall quality control
weaknesses in the BMDS program. Some are simple, such as having the
Director for Safety, Quality, and Mission Assurance report directly to
MDA's Director and establishing toll-free telephone numbers to report
problems. MDA is also taking actions to make contractors aware of the
emphasis being placed on product quality. For example, contract award
fees will be based, in part, on the contractor's implementation of good
quality control procedures and industry best practices. Contracts are
also being modified to implement mission assurance provisions that
promote process improvements, which are expected to reduce costs,
improve productivity, and enhance safety, quality, and mission
assurance. MDA is also placing renewed emphasis on surveillance
activities by placing MDA Safety, Quality, and Mission Assurance
personnel in major contractors' facilities; giving the Office of
Safety, Quality, and Mission Assurance unfettered access to all MDA
contractor operations, activities, and documentation; and strengthening
the quality assurance role of the Defense Contract Management Agency.
In addition, MDA also examined the test strategy of the troubled GMD
program and laid out an approach that increases the role of ground
testing, progressively increases the complexity and realism of flight
tests, and ensures that progress through the test process is based on
having requisite knowledge.
While we believe that MDA is taking many of the actions needed to
correct problems within the BMDS program, we believe that others are
needed. We are making recommendations to the Secretary of Defense to
ensure that all of the BMDS elements are put back on a knowledge-based
path and to provide a more transparent basis for reporting changes from
the plan. DOD partially concurred with our recommendations that MDA
direct all of its programs to adapt a knowledge-based acquisition
strategy and to assess whether the agency's plan to improve the BMDS in
2-year blocks is compatible with such a strategy. DOD stated that MDA's
use of knowledge points remains consistent with DOD acquisition
regulations while providing MDA's Director with the flexibility to
determine the regulation's applicability to the BMDS block development
concept. In its comments, DOD also stated that it believes that MDA's
block goals are compatible with a knowledge-based strategy because
knowledge points are used to establish block goals and make adjustments
to the block when necessary. DOD did not concur with our third
recommendation, that MDA adopt more transparent criteria for
identifying and reporting significant changes in quantities, cost, or
performance, because it believes that current reporting requirements
and reviews offer an adequate level of oversight.
Background:
A weapon system for ballistic missile defense, even a rudimentary one,
requires the coordinated operation of a diverse collection of
components. For example, the initial capability emplaced in 2004
employs early-warning satellites for launch detection, ground-based
radars in California and Alaska, and sea-based Aegis radars in the Sea
of Japan for surveillance and tracking of enemy missiles, interceptors
at launch sites in Alaska and California to engage and destroy incoming
warheads, and command and control nodes in Alaska and Colorado to
orchestrate the mission.
A typical scenario to engage an intercontinental ballistic missile
(ICBM) would unfold as follows:
* Infrared sensors aboard early-warning satellites detect the hot plume
of a missile launch and alert the command authority of a possible
attack.
* Upon receiving the alert, land-or sea-based radars are directed to
track the various objects released from the missile and, if so
designed, to identify the warhead from among spent rocket motors,
decoys, and debris.
* When the trajectory of the missile's warhead has been adequately
established, an interceptor--consisting of a "kill vehicle" mounted
atop a booster--is launched to engage the threat. The interceptor
boosts itself toward a predicted intercept point and releases the kill
vehicle.
* The kill vehicle uses its onboard sensors and divert thrusters to
detect, identify, and steer itself into the warhead. With a combined
closing speed on the order of 10 kilometers per second (22,000 miles
per hour), the warhead is destroyed through a "hit-to-kill" collision
with the kill vehicle above the atmosphere.
To develop a system capable of carrying out such an engagement, MDA is
executing an evolutionary acquisition strategy in which the development
of missile defense capabilities is organized in 2-year increments known
as blocks. In 2001, when it adopted the block strategy, MDA planned to
construct a test bed in which new sensors, weapon projects, and
enhancements to existing capabilities could be matured. When assets
were considered mature, MDA planned to integrate them into the BMDS to
increase the system's capability to respond to the evolving threat.
However, with the President's directive to begin fielding an initial
BMDS capability beginning in 2004, MDA switched its emphasis from
developing a test bed to developing and fielding an operational
capability.
MDA is completing its Block 2004 program of work. The associated
military capability of this block is primarily one for defending the
United States against ICBM attacks from North Korea and the Middle
East, although the block increases the United States' ability to engage
short-and medium-range ballistic missiles.[Footnote 4] Block 2004 is
built around the GMD element, augmented by shipboard Aegis BMD radars
and missiles, and integrated by the system-level C2BMC element. In
addition, MDA attempted to accelerate the fielding of the Forward-Based
X-Band-Transportable (FBX-T) radar into Block 2004. This radar, being
developed by the Sensors Program Office, was originally intended for
operation during Block 2006.
MDA is also carrying out an extensive research and development effort
to expand its current operational capability into future blocks. During
fiscal year 2005, MDA funded the development of four other major BMDS
elements in addition to the four elements that were to be fielded as
part of the Block 2004 BMDS. These elements are the ABL, KEI, STSS, and
THAAD. MDA expects to field a limited THAAD capability during Block
2008. The other elements, which are primarily in technology
development, will likely be fielded in later blocks. Table 1 provides a
brief description of all elements being developed by MDA. More
information about them is provided in appendix II.
Table 1: BMDS Elements:
Element: Ground-based Midcourse Defense;
Missile defense role: GMD is a ground-based missile defense system
designed to destroy ICBMs during the midcourse phase of their flight.
Its mission is to protect the U.S. homeland against ballistic missile
attacks from North Korea and the Middle East. GMD is part of the
initial capability fielded in 2004-2005 with an inventory of 10
interceptors. MDA plans to field 26 additional interceptors in Alaska
and California through 2010.
Element: Aegis Ballistic Missile Defense;
Missile defense role: Aegis BMD is a ship-based missile defense system
designed to destroy short- and medium-range ballistic missiles during
the midcourse phase of their flight. Its mission is twofold: to protect
deployed U.S. forces, allies, and friends against ballistic missile
attacks and to serve as a forward-deployed BMDS sensor, especially in
support of the GMD mission. MDA has plans to deliver about 100 Aegis
BMD missiles--the Standard Missile 3--and to upgrade 18 ships for the
BMD mission by the end of 2011.
Element: Command, Control, Battle Management, and Communications;
Missile defense role: C2BMC is the integrating and controlling element
of the BMDS. During 2004-2005, C2BMC's role is to provide deliberate
planning, situational awareness, sensor management and control of the
Forward-Based X-Band-Transportable (FBX-T) radar, and network support
for fire control and situational awareness.
Element: BMDS Sensors;
Missile defense role: MDA is developing various stand-alone radars for
fielding. In particular, MDA is leveraging the THAAD radar's hardware
design and modifying existing software to develop the FBX-T. MDA
expects to emplace the first FBX-T in Japan to augment existing BMD
surveillance and tracking capabilities.
Element: Airborne Laser;
Missile defense role: ABL is an air-based missile defense system
designed to destroy all classes of ballistic missiles during their
boost phase of flight. ABL employs a high-energy chemical laser to
rupture a missile's motor casing, causing the missile to lose thrust or
flight control. MDA plans to demonstrate proof of concept in a system
demonstration no earlier than 2008. The fielding of a militarily useful
ABL capability is not planned through 2011.
Element: Kinetic Energy Interceptors;
Missile defense role: KEI is a land-based missile defense system
designed to destroy medium, intermediate, and intercontinental
ballistic missiles during the boost phase and all parts of the
midcourse phase of their flight. The agency expects to demonstrate
defensive capability through flight testing during 2012-2015. This
capability could be expanded to sea-basing in subsequent blocks.
Element: Space Tracking and Surveillance System;
Missile defense role: The Block 2006 STSS consists of a constellation
of two demonstration satellites. MDA intends to use these satellites
for testing missile warning and tracking capabilities in the 2007-2009
time frame. If the demonstration satellites perform successfully, MDA
plans an operational capability of next-generation satellites that will
be available in the next decade.
Element: Terminal High Altitude Area Defense;
Missile defense role: THAAD is a ground-based missile defense system
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. MDA plans to field
a fire unit, including 24 missiles, in 2009 and a second unit in 2010.
Sources: MDA (data); GAO (presentation).
Note: The Patriot Advanced Capability-3 system is also part of the
BMDS, but it is not included in the table because management
responsibility for this element has been transferred to the Army.
[End of table]
Since 2002, missile defense has been seen as a national priority and
has been funded nearly at requested levels. However, DOD's Program
Budget Decision of December 2004 called for MDA to plan for a $5
billion reduction in funding over fiscal years 2006-2011. In addition,
MDA will continue to compete with hundreds of existing and planned
technology development and acquisition programs for research,
development, and evaluation funding. Cost growth of existing weapon
programs is also likely to affect MDA's share of future DOD budgets.
MDA Made Progress during Fiscal Year 2005, but Some Activities Were Not
Completed as Planned:
MDA made progress during fiscal year 2005 in carrying out the fiscal
year plans of work established by the seven BMDS elements, but it was
not able to field all planned components or conduct all scheduled
tests. Also, some activities that would have furthered the development
of elements planned for later blocks slipped into fiscal year 2006,
possibly delaying the elements' scheduled integration into the BMDS. In
addition, although MDA did not complete all work scheduled during the
fiscal year, most of MDA's prime contractors reported that the work
accomplished cost more than expected.
During fiscal year 2005, MDA intended to improve the C2BMC, field eight
Standard Missile-3 (SM-3) missiles, make seven Aegis destroyers capable
of performing long-range surveillance and tracking, upgrade two Aegis
cruisers with a missile defense contingency engagement capability,
upgrade two radars (Beale and Fylingdales early warning radars), and
deliver and emplace 10 GMD interceptors. In addition, MDA planned a
number of flight tests--six GMD flight tests, four of which Aegis BMD
would participate in to detect and track ICBM targets, and three Aegis
BMD intercept tests.
Good Progress Made in the C2BMC and Aegis Elements:
The C2BMC program completed most activities required to provide
situational awareness of the missile defense battle. The C2BMC element,
whose development is in its early stages, is initially expected to
monitor the operational status of each BMDS component and display
threat information, such as missile trajectories and impact points. In
2005, the program installed C2BMC suites (communications software and
hardware) at U.S. Strategic Command, U. S. Northern Command, and U.S.
Pacific Command. The additions at U.S. Strategic Command and U.S.
Northern Command provide redundant capability and more flexibility to
test, exercise, and maintain the C2BMC. MDA also planned to install a
Web browser in the United Kingdom, to provide situational awareness for
the British government. However, the Web browser will not be
operational until 2006 because DOD did not complete final policy
agreements as scheduled.
Development of two C2BMC software upgrades was also completed during
the fiscal year. The first upgrade gave C2BMC the ability to display
GMD assets on the user's computer monitors, improved the user's ability
to call up BMDS information, reduced the time to transfer force-level
planning files, and installed the software and hardware necessary to
provide an operational capability at U.S. Pacific Command. The final
decision to make the U.S. Pacific Command suite operational has not yet
been made, but a decision is expected in March 2006. Completion of the
second upgrade was a little behind schedule, but it was completed by
the first quarter of calendar year 2006. Development of the upgrade,
known as Spiral 4.5, was completed by the end of September 2005, but
all testing is not expected to be completed until the end of March
2006. Spiral 4.5 gives C2BMC the capability to receive, distribute, and
display information developed by three new sensors--the FBX-T and Sea-
Based X-Band (SBX) radars and the Fylingdales upgraded early warning
radar. It also improves the consistency between the data displayed by
the C2BMC and the GMD fire control monitors, both of which receive
information directly from various sensors.
The Aegis BMD program made good progress in developing and delivering
missiles and upgrading Aegis ships for the missile defense mission. To
increase the United States' capability to defend against short-and
medium-range ballistic missiles, the program produced and delivered
eight Standard Missile-3s--the "bullet" for the Aegis BMD element.
These missiles will be launched from Aegis cruisers, two of which were
upgraded in fiscal year 2005 to enable them to perform their engagement
and long-range surveillance and tracking missions. Six destroyers,
whose ballistic missile defense mission is to provide long-range
surveillance and tracking of ICBMs for the GMD element, were also
upgraded in fiscal year 2005. The program was unable to upgrade a
seventh destroyer during the fiscal year as scheduled--although assets
required to proceed with the upgrade were in place--because the Navy
had scheduled the ship for other activities. However, the destroyer was
upgraded before the end of Block 2004.
GMD Program Makes Less Progress:
Although the GMD program made progress during fiscal year 2005, it did
not meet all expectations. The GMD program had planned to field 10
additional interceptors during the fiscal year, but actually fielded 4.
Two additional GMD interceptors were delivered and fielded at Fort
Greely, Alaska, and the first 2 interceptors were emplaced at
Vandenberg Air Force Base, California. The 2 interceptors installed at
Vandenberg provide a redundant launch site and a better intercept
trajectory against some ICBM threats. MDA also upgraded two early
warning radars--one at Beale Air Force Base, California, and another at
Fylingdales in the United Kingdom. In some scenarios, each of these
radars will act as the primary fire control radar for the GMD element.
Interceptor production slowed as the year progressed primarily because
technical problems were discovered, mostly in the interceptor's
exoatmospheric kill vehicle (EKV). MDA officials explained that these
problems were traced back to poor oversight of subcontractors, too few
qualification tests, and other quality assurance issues. By the end of
the fiscal year, the program had reduced its fiscal year plan for
fielding interceptors from 10 to 6 so that additional interceptors
could be made available for ground tests, but the contractor was only
able to emplace the 2 interceptors at Fort Greely and the 2 at
Vandenburg Air Force Base.
Two of Nine Flight Tests Successfully Completed:
The GMD and Aegis BMD programs also planned to conduct a number of
flight tests during the fiscal year. The GMD program planned three
nonintercept and three intercept flight tests. However, the program was
able to successfully complete only one of the nonintercept flight tests
and none of the intercept tests. The successful nonintercept test
demonstrated that the upgraded Cobra Dane radar could detect and track
a target of opportunity. However, a second nonintercept flight test
that would have examined upgrades to the Beale upgraded early warning
radar was delayed, when GMD's test plan was restructured to make it
less concurrent. Also, the other nonintercept test (integrated flight
test [IFT]-13C) that was to demonstrate operational aspects of the
fielded configuration of GMD's interceptor could not be completed
because the interceptor failed to launch. Of the three planned
intercept tests, the program conducted one (IFT-14). However, this test
was also aborted when the interceptor failed to launch.[Footnote 5] MDA
planned two other intercept tests, but the tests did not take place
because MDA restructured GMD's test plan after the interceptor failures
to implement a less risky test strategy. The first test in the
restructured plan--which was a nonintercept test to assess the
interceptor's operation in space--was successfully completed in
December 2005.
The Aegis BMD Program Office planned to participate in four of the GMD
tests during fiscal year 2005. Aegis BMD did not participate in any of
these tests because weather conditions prevented the ship from
participating in one test, the ship was unavailable during another, and
GMD's test plan was restructured, causing two tests to be canceled.
In addition to participating in GMD tests, the Aegis BMD program
planned three intercept tests during fiscal year 2005. However, only
one test was conducted. The program delayed the two other tests because
of budgetary constraints and technical problems. MDA completed one of
the delayed tests in the first quarter of fiscal year 2006 and canceled
the second delayed test because most of its objectives had been
accomplished in the completed test. In the fiscal year 2006 test, an SM-
3 missile successfully engaged a separating target, that is, a target
whose warhead separates from its booster. In defeating this target, the
program demonstrated that the Aegis BMD element has a capability
against a more advanced threat than the nonseparating targets included
in earlier tests.
Developmental Elements Progress but Experience Some Setbacks:
MDA made progress in developing the four elements that are expected to
enhance the BMDS during future blocks--THAAD, ABL, STSS, and KEI--but
some planned activities fell behind schedule. The THAAD Program Office
completed numerous ground and component qualification tests that led to
a successful first flight test in the first quarter of fiscal year
2006. The program also worked to solve technical problems that could
have affected the success of the first flight tests. The ABL program
completed the first major milestones of its restructured program--First
Flight and First Light, completed scheduled activities associated with
a series of Beam Control/Fire Control low-power passive flight tests,
and began integrating the full Beam Control/Fire Control with other
laser systems aboard the aircraft.[Footnote 6] The STSS program tested
and integrated spacecraft components for the demonstration satellites
that the program expects to launch and began testing the first
satellite's payload. The KEI program completed the construction of a
shelter to house prototype fire control and communications equipment
and conducted several demonstrations during which the prototype
equipment collected data from overhead nonimaging infrared satellites
in a timeline that, according to program officials, proves a boost
phase intercept is possible. In addition, the program completed studies
of communications equipment--which uplinks information from KEI's fire
control and communications component to its interceptor--that allowed
the program to optimize the equipment's design to operate in a nuclear
environment or against jamming threats.
However, all four programs experienced some setbacks. The THAAD program
delayed the start of flight tests until the first quarter of fiscal
year 2006. The ABL Program Office did not complete laboratory testing
of the element's high-energy laser in September 2005, as planned, and
the STSS Program Office rescheduled tests of the first satellite's
payload until the second quarter of fiscal year 2006. The fourth
element, KEI, also delayed some activities related to its Near Field
Infrared Experiment (NFIRE), which is being conducted to gather data on
the risk in identifying the body of a missile from the plume of hot
exhaust gases that can obscure the body while the missile is boosting.
The THAAD Program Office expected to begin flight tests in June 2005.
However, the first test was delayed until November 2005 because of
unexpected integration problems. For example, one delay was caused by a
tear in a filter in the missile's divert attitude control system.
Program officials expect to recover the test schedule and conduct 14
flight tests before turning the first THAAD fire unit over to the Army
in 2009 for operational use and testing. However, the test schedule is
aggressive, requiring as many as 5 tests in some years. To complete all
tests as planned, the officials told us that there can be no test
failures.
The Airborne Laser Program Office planned to complete tests of the
element's high-energy laser by September 30, 2005. The laser is a
component of the ABL prototype that will be used to demonstrate the
element's lethality as early as the 2008 time frame. Prior to
installing the laser on the prototype aircraft, the program tested the
laser in its System Integration Laboratory at Edwards Air Force Base.
Program officials expected the tests, which began in November 2004, to
be completed by the end of fiscal year 2005. During this time frame,
officials wanted to demonstrate that the laser could generate 100
percent of its design power and that it could repeatedly operate at
that power for periods of about 10 seconds. As of October 2005, the
laser had produced 83 percent of the power it is designed to generate
and was able to operate for periods of about 5 ¼ seconds. After solving
technical problems with the laser's abort system and completing the
planned installation of an ammonia cooling system, the program was
able, in December 2005, to extend the laser's operating time to more
than 10 seconds. Although the laser has not reached 100 percent of its
design power, officials told us that the 83 percent obtained thus far
is sufficient to achieve 95 percent of maximum lethal range against all
classes of ballistic missiles. The ABL Program Manager originally told
us that he expected the laser to remain in the system integration
laboratory until it produced 100 percent of its design power.
Nonetheless, on December 9, 2005, MDA's Director gave the ABL program
permission to disassemble the System Integration Laboratory and install
the laser on the aircraft. Program officials told us that they would
continue to test the laser, when the aircraft is on the ground, in an
attempt to demonstrate that the laser can produce 100 percent of its
design power.
During fiscal year 2005, the STSS program intended to integrate and
test the spacecraft for two demonstration satellites and integrate and
test the sensor payload, which includes surveillance and tracking
sensors, for the first of the two satellites. The program is
constructing the demonstration satellites from hardware developed by
the Space-Based Infrared System-Low program before it was canceled in
1999 and plans to launch the satellites in fiscal year 2007, after all
hardware has been integrated and tested. The program did not complete
the payload integration and test activities in fiscal year 2005, as
planned, because thermal vacuum testing is taking longer than
expected.[Footnote 7] Hardware issues have emerged as the payload is
being tested in a vacuum and at cold temperatures for the first time.
For example, in a vacuum, the sensors' optics did not cool to the
desired temperature and the power supply to the acquisition sensor's
signal processor failed. The program office believes that repairs will
correct the problems, but program officials are in the process of
deciding whether further tests must be completed after the repairs are
made and before the sensor payload is placed aboard the satellite.
As part of its fiscal year 2005 activities, the KEI program intended to
complete a number of tasks that would have enabled it to conduct the
NFIRE experiment. The experiment places sensors aboard a satellite that
will be launched into space, where the sensors will observe and collect
infrared imagery of boosting intercontinental ballistic missiles. In
fiscal year 2005, the KEI program expected to calibrate and deliver the
sensor payload, complete the space vehicle integration and acceptance
test, procure targets, and certify mission operation readiness.
However, anomalies in the sensor payload delayed the delivery of the
payload, in turn delaying the remaining activities. The day-to-day
management of all NFIRE activities has since been transferred to the
STSS program, which has extensive experience with the development of
satellites. STSS officials told us that they do not expect the fiscal
year 2005 delays to affect the experiment's launch date.
Completed Work Cost More than Expected:
Although MDA was unable to complete all activities during fiscal year
2005 as planned, the completed work cost more than expected.
Collectively, prime contractors for the various elements overran their
budgets by about $458 million, or about 14 percent, with GMD accounting
for approximately 80 percent of the collective overrun. Although the
GMD contractor experienced the largest overrun, exceeding its fiscal
year 2005 budget by approximately 25 percent, it is notable that the
ABL contractor overran its fiscal year budget. The ABL contract had
been restructured in 2004 to provide a more realistic cost estimate for
the work planned. It is also noteworthy that continuing cost growth in
the development of the THAAD missile caused the contractor to overrun
its fiscal year budget for the first time since the contract was
awarded.
Table 2 contains our analysis of the contractor's cost and schedule
performance in fiscal year 2005 and the potential overrun or underrun
of each contract at completion. All estimates of the contracts' costs
at completion are based on the contractors' performance through fiscal
year 2005. Collectively, the six contracts, for which data were
available to estimate a cost at completion, could overrun their budgets
by about $1.3 billion to $2.1 billion. It should be noted that the cost
variance at completion projected for most of the contracts is based on
more than one block of work. For example, the STSS contract covers the
contractor's work on Block 2006 and Block 2010. Appendix III provides
further details regarding the performance of the prime contractors for
the seven elements shown in the table.
Table 2: Prime Contractor Fiscal Year 2005 and Cumulative Cost and
Schedule Performance:
BMDS Element: ABL;
FY 05 cost variance: ($29.6);
FY 05 schedule variance: ($22.0);
Cumulative cost variance: ($23.1);
Cumulative schedule variance: ($23.6);
Percentage of contract completed: 69%;
Estimated contract underrun/overrun: Overrun: $43.8 to $231.7.
BMDS Element: GMD;
FY 05 cost variance: ($365.1);
FY 05 schedule variance: ($38.9);
Cumulative cost variance: ($713.1);
Cumulative schedule variance: ($227.9);
Percentage of contract completed: 75%;
Estimated contract underrun/overrun: Overrun: $1,042 to $1,360.
BMDS Element: Aegis BMD (Weapon System);
FY 05 cost variance: $2.6;
FY 05 schedule variance: $2.0;
Cumulative cost variance: $6.1;
Cumulative schedule variance: 0;
Percentage of contract completed: 67%;
Estimated contract underrun/overrun: Underrun: $7.1 to $12.5.
BMDS Element: Aegis BMD(SM-3)[A];
FY 05 cost variance: $10.9;
FY 05 schedule variance: ($9.6);
Cumulative cost variance: $10.9;
Cumulative schedule variance: ($9.6);
Percentage of contract completed: 74%;
Estimated contract underrun/overrun: Underrun: $11.5 to $17.8.
BMDS Element: THAAD;
FY 05 cost variance: ($19.0);
FY 05 schedule variance: ($4.6);
Cumulative cost variance: ($15.0);
Cumulative schedule variance: $10.1;
Percentage of contract completed: 72%;
Estimated contract underrun/overrun: Overrun: $16.9 to $48.2.
BMDS Element: C2BMC;
FY 05 cost variance: $1.0;
FY 05 schedule variance: $6.4;
Cumulative cost variance: $1.7;
Cumulative schedule variance: ($0.9);
Percentage of contract completed: 87%;
Estimated contract underrun/overrun: Underrun: $1.8 to $2.4.
BMDS Element: KEI;
FY 05 cost variance: $3.0;
FY 05 schedule variance: ($3.9);
Cumulative cost variance: $3.0;
Cumulative schedule variance: ($5.9);
Percentage of contract completed: 4%;
Estimated contract underrun/overrun: [B].
BMDS Element: STSS;
FY 05 cost variance: ($61.5);
FY 05 schedule variance: $6.8;
Cumulative cost variance: ($96.9);
Cumulative schedule variance: ($20.3);
Percentage of contract completed: 65%;
Estimated contract underrun/overrun: Overrun: $248.3 to $479.4[C].
Source: Contractors (data); GAO (analysis).
Note: Negative variances are shown with parentheses around the dollar
amounts.
[A] Contract performance reporting data for the Aegis BMD SM-3 element
were not available prior to fiscal year 2005. Therefore, cumulative and
fiscal year 2005 values are the same.
[B] We could not estimate the likely outcome of the KEI contract at
completion because a trend cannot be predicted with only 4 percent of
the contract complete.
[C] The overrun projected for STSS is based on the contractor's
performance through fiscal year 2005 in carrying out both Block 2006
and Block 2010 work. The STSS Program Office noted that considering the
contractor's performance on Block 2006 alone, a contract overrun of $80
million to $120 million is anticipated. In addition, program officials
told us that the prime contractor's Block 2006 performance has been
affected by the poor performance of a subcontractor whose work effort
will be completed in fiscal year 2006. All remaining work will be
performed by the prime contractor, whose performance has been
significantly better.
[End of table]
About $240 million of the GMD overrun can be traced to the interceptor,
with the EKV accounting for more than 42 percent, or $102 million, of
that amount. The EKV's cost growth was caused by poor quality control
procedures and technical problems during development, testing, and
production. The interceptor's cost also grew when the contractor had to
bring a new supplier online to produce the motors for the BV+ booster,
one of the two boosters being developed to carry the EKV into space. A
new supplier was needed because explosions at the old supplier's plant
prevented it from delivering the motors.
As of September 30, 2005, the SBX radar, which is also being developed
by the GMD program, had also overrun its fiscal year budget by about
$55 million. The cost of developing this component increased when
numerous unplanned changes were made to the platform that holds the
radar, subcontractor costs could not be negotiated at the expected
price, and additional efforts were required to ensure a functional
radome.[Footnote 8]
The ABL prime contractor also experienced cost growth during fiscal
year 2005, even though the ABL contract had been restructured in 2004.
This action provided a more realistic budget and schedule for remaining
contract activities leading up to a 2008 ABL lethality demonstration.
With the restructure, the contractor was no longer required to report
past cost and schedule growth. However, in fiscal year 2005, the
contractor once again reported that ABL's cost was growing and that
some work had been delayed. Cost grew and schedules slipped as the
contractor made software changes to address problems identified during
tests of the Beam Control/Fire Control, modified the laser's abort
system so that it would not shut down the operation of the laser
prematurely, and reprioritized activities throughout the program. Other
costs were attributable to problems with ABL's Active Ranger System and
Beacon Illuminator Laser.[Footnote 9] For example, the contractor's
cost grew when it redesigned and replaced contaminated, damaged, and
inefficient optics in the commercial off-the-shelf Active Ranger
System. In addition, the contractor incurred additional cost because
numerous faults in the power supply for the Beacon Illuminator Laser
forced changes in circuit cards and circuit boards.
For the first time since the THAAD contract was awarded, in 2000, the
cost of the work being performed in a given fiscal year was greater
than the funds budgeted for that work. The THAAD Program Office
attributed the contractor's overrun to unanticipated missile
integration problems. For example, the Flight Termination Assembly,
which is responsible for terminating a THAAD missile in flight, failed
qualification tests that in turn delayed qualification of the next
larger assembly. In another instance, work was delayed while engineers
determined why telemetry equipment, which is placed aboard a test
missile to report the missile's condition in flight, sent corrupted
data to the test station. Program officials told us that the program
solved all known problems that could have prevented a successful first
flight test. However, the officials said that the missile still has
telemetry problems that prevent the test station from collecting all of
the data that will be generated in the third flight test. Program
officials expect to find solutions for these problems prior to the
third test.
Block 2004 Delivers Assets Faster, but with Unverified Performance:
MDA succeeded in fielding an initial missile defense capability by the
end of fiscal year 2004 and in improving that capability by December
31, 2005, when Block 2004 ended. However, the block included fewer
components than planned, cost more than anticipated, and its
performance is unverified. In February 2003, MDA forwarded to Congress
the goals that it had established for the initial BMDS capability that
it planned to develop and field during Block 2004. The goals included
the quantity of components that would compose the block, the cost of
developing and producing those components, and the performance that the
initial BMDS capability was to deliver. However, over the course of the
block, MDA progressively reduced the number of components that it
expected to field and increased its cost goal, primarily to recognize
the cost of sustaining fielded assets. Even with changes, MDA was
unable to meet its quantity goals, and MDA is reporting that the cost
of Block 2004 will be greater than expected because of additional
sustainment costs. However, the Block 2004 cost being reported by MDA
does not include the cost of some activities that must still be
completed. MDA did not change its performance expectations for the
block.
Significantly Fewer Block 2004 Assets Fielded than Planned:
Between 2003 and mid-2005, MDA progressively decreased the number of
components it planned to field as part of the Block 2004 capability.
However, even with the reductions, MDA was unable to deliver all
components planned. Table 3 illustrates the evolution of MDA's quantity
goals and compares those goals with the number of assets fielded.
Table 3: Evolution of Block 2004 Quantity Goals versus Fielded Assets:
BMDS Element: GMD Interceptors;
Goal as of Feb. 2003:
* Up to 20;
Goal as of Feb. 2004:
* 20;
Goal as of Feb. 2005:
* 18;
Goal as of mid-2005:
* 14;
Assets available for operational use as of Dec. 31, 2005:
* 10.
BMDS Element: Radars;
Goal as of Feb. 2003:
* Cobra Dane;
* 2 Upgraded early warning radar (UEWR)[A];
* Sea-Based X-Band Radar;
Goal as of Feb. 2004:
* Cobra Dane;
* 2 UEWR;
Goal as of Feb. 2005:
* Cobra Dane;
* 2 UEWR;
* Sea-Based X-Band Radar;
* Forward-Based X-Band- Transportable Radar[B];
Goal as of mid-2005:
* Cobra Dane;
* 2 UEWR;
* Sea-Based X-Band Radar;
* Forward-Based X-Band-Transportable Radar[B];
Assets available for operational use as of Dec. 31, 2005:
* Cobra Dane;
* 1 UEWR.
BMDS Element: Aegis BMD SM-3 Missiles;
Goal as of Feb. 2003:
* Up to 20;
Goal as of Feb. 2004:
* 9;
Goal as of Feb. 2005:
* 8;
Goal as of mid-2005:
* 8;
Assets available for operational use as of Dec. 31, 2005:
* 9[C].
BMDS Element: Aegis BMD ships;
Goal as of Feb. 2003:
* 15 destroyers[D];
* 3 cruisers;
Goal as of Feb. 2004:
* 10 destroyers;
* 3 cruisers;
Goal as of Feb. 2005:
* 10 destroyers;
* 2 cruisers;
Goal as of mid-2005:
* 10 destroyers;
* 2 cruisers;
Assets available for operational use as of Dec. 31, 2005:
* 10 destroyers;
* 2 cruisers.
Sources: MDA (data); GAO (analysis).
[A] Upgraded early warning radars are located at Beale Air Force Base,
California, and Fylingdales Air Base, United Kingdom.
[B] The FBX-T was originally planned as a Block 2006 asset, but MDA
accelerated it to make it available in 2005.
[C] The Aegis BMD program planned to field eight SM-3 missiles even
though more than eight missiles were to be produced. The program was
able to field nine SM-3 missiles because one that was planned for
testing was diverted to operational use when it was no longer needed
for test purposes.
[D] The Aegis BMD Program Office told us that the goal of upgrading 15
destroyers was based on a capability-defined block, that is, a block
that ended when the final ship was upgraded.
[End of table]
By mid-2005, MDA had reduced its February 2003 goal for operational GMD
interceptors from 20 to 14. The first reduction occurred when MDA
recognized that an explosion at a subcontractor's facility would reduce
the number of boosters available for interceptors slated for
fielding.[Footnote 10] Although MDA was developing an alternate source
for boosters, the second developer could not produce all of the
boosters needed to field 20 interceptors. Therefore, MDA decided two
interceptors would be diverted for testing. One was used in ground
testing, and the second, which will not be built until calendar year
2006, will be used in a flight test. In mid-2005, after two
unsuccessful flight tests, the GMD Program Office reduced its goal for
operational interceptors further--from 18 to 14--to set aside more
interceptors for ground tests. The test missiles will be assembled in a
later block.
Even with the reductions, MDA failed to meet its quantity goals. By the
end of Block 2004, MDA had delivered 10 GMD interceptors. Production
slowed as the program addressed technical issues and quality control
problems discovered during testing and in quality control audits.
Further, GMD program officials also told us that the SBX radar will not
be operational until 2006 because funds that were to be used to
integrate the radar into the BMDS were used to cover some of the cost
of the restructured test program.
MDA was also unable to place the FBX-T radar and the Fylingdales
upgraded early warning radar in operation before the end of the block.
While MDA did not formally add the FBX-T to its Block 2004 Statement of
Goals, agency officials told congressional committees that they were
developing this radar and expected to have it fully operational by the
end of the block. MDA was able to accelerate this capability by 1 full
year and to ready the radar for deployment within Block 2004. However,
negotiations with Japan, the host nation for the radar, were not
completed by December 2005, and site preparation, which will commence
once negotiations are complete, is expected to take 8 to 9 months. Full
functionality of the Fylingdales upgraded early warning radar was also
delayed. MDA used the funds that were needed to make the radar fully
functional to cover part of the cost of the restructured GMD test
program.
Over time, MDA also altered the number of SM-3 missiles that it planned
to procure. MDA's goal of producing up to 20 missiles was never reached
because of fiscal constraints and missile parts availability. MDA set
aside funding for 11 SM-3 missiles, 9 of which were to be made
available for operational use. Program officials told us that had MDA
funded more than 11 missiles it would have been necessary to restart
some component production lines, which had been closed. Reopening these
lines would have caused the additional components to be expensive.
Also, the production lines could not have produced the components in a
time frame that would have allowed the Aegis BMD program to meet the
President's directed fielding date. In December 2004, MDA further
reduced its operational goal for SM-3 missiles from 9 to 8 in response
to a DOD reduction in MDA's fiscal year 2005 budget request. However,
by the end of 2005, MDA was able to make 9 missiles available for
operational use because 1 missile that the Aegis BMD program expected
to use for testing was not needed for that purpose.
MDA's February 2003 Statement of Goals also included the planned
upgrade of 15 destroyers and three cruisers for the missile defense
mission. However, the Aegis BMD Program Office told us that the
established goals were based on a capability-defined block, that is, a
block that ended when the final ship was upgraded. In February 2004,
MDA corrected Aegis BMD goals to take into account the agency's
definition of a block as a 2-year time period. In making this
correction, MDA reduced the number of destroyers to be delivered during
Block 2004 from 15 to 10. By February 2005, budgetary constraints also
caused MDA to reduce its planned Block 2004 upgrade of cruisers from
three to two.
Block 2004 Cost Is Understated:
MDA is reporting that the cost of Block 2004 will exceed the cost goals
established in 2003 and 2004, but the reported cost does not include
the cost of Block 2004 activities that have been deferred until Block
2006. In February 2003, when it sent its Statement of Goals for Block
2004 to Congress, MDA estimated that in addition to the funds received
in 2002, the agency would need $5.5 billion more, or a total of about
$6.7 billion, to field this capability. Table 4 shows how MDA estimated
those funds would be used. A year later, in 2004, the goal had
increased to approximately $7 billion. However, the expected cost of
the capability is now about $7.7 billion, or around $600 million more
than the revised goal and $1 billion, or about 15 percent, more than
the original Block 2004 goal. MDA primarily attributes Block 2004's
increased cost to the sustainment of fielded assets, which officials
told us they could not fully estimate until they prepared their fiscal
year 2006 budget request. However, the $7.7 billion cost does not
include some work planned for Block 2004, which the contractor could
not complete before December 31, 2005. According to GMD officials, this
work has been deferred until Block 2006 and its cost will be recognized
as part of that block's cost.
Table 4: Composition of the Block 2004 Fielded Configuration Cost Goal,
February 2003:
Dollars in millions.
C2BMC;
FY 2002: $21;
FY 2003: $80;
FY 2004: $114;
FY 2005: $79;
FY 2006: 0;
Total: $294.
Hercules Block 2004 Joint Warfighter Support;
FY 2002: 0;
FY 2003: 0;
FY 2004: $18;
FY 2005: $27;
FY 2006: 0;
Total: $45.
Test and Evaluation Block 2004;
FY 2002: $47;
FY 2003: $57;
FY 2004: $37;
FY 2005: $33;
FY 2006: 0;
Total: $174.
Targets and Countermeasures;
FY 2002: $75;
FY 2003: $104;
FY 2004: $197;
FY 2005: $170;
FY 2006: 0;
Total: $546.
GMD Test Bed Block 2004;
FY 2002: $636;
FY 2003: $452;
FY 2004: $1,205;
FY 2005: $868;
FY 2006: 0;
Total: $3,161.
Aegis BMD Test Bed Block 2004;
FY 2002: $413;
FY 2003: $440;
FY 2004: $648;
FY 2005: $894;
FY 2006: $98;
Total: $2,493.
Total;
FY 2002: $1,192;
FY 2003: $1,133;
FY 2004: $2,219;
FY 2005: $2,071;
FY 2006: $98;
Total: $6,713[A].
Source: MDA budget submission, February 2003.
[A] The total cost goal for Block 2004 includes MDA's actual costs for
fiscal year 2002 and its cost goals for 2003 through the first quarter
of fiscal year 2006, which corresponds to the end of Block 2004.
[End of table]
The Aegis BMD element was the only element of the BMDS program that
estimated it would need funds during the first quarter of 2006 to
complete Block 2004 fielding. GMD and C2BMC predicted that all work
related to fielding the Block 2004 capability would be completed by
September 30, 2005, when MDA expected to place a limited defensive
operational capability on alert.
In February 2004, MDA revised its estimated cost for fielding a Block
2004 capability to a little over $7 billion, or about $332 million more
than originally projected. Table 5 presents the changes in the
composition of the goal.
Table 5: Composition of the Block 2004 Fielded Configuration Cost Goal,
February 2004:
Program element: C2BMC; FY 2002: $21;
FY 2003: $71;
FY 2004: $117;
FY 2005: $154;
FY 2006: 0;
Total: $363.
Program element: Hercules Block 2004 Joint Warfighter Support;
FY 2002: 0;
FY 2003: 0;
FY 2004: $18;
FY 2005: 0;
FY 2006: 0;
Total: $18.
Program element: Test and Evaluation Block 2004;
FY 2002: $47;
FY 2003: $46;
FY 2004: $37;
FY 2005: $39;
FY 2006: 0;
Total: $169.
Program element: Targets and Countermeasures;
FY 2002: $75;
FY 2003: $95;
FY 2004: $224;
FY 2005: $233;
FY 2006: 0;
Total: $627.
Program element: GMD Test Bed Block 2004;
FY 2002: $636;
FY 2003: $397;
FY 2004: $1343;
FY 2005: $861;
FY 2006: 0;
Total: $3,237.
Program element: Aegis BMD Test Bed Block 2004;
FY 2002: $413;
FY 2003: $433;
FY 2004: $641;
FY 2005: $966;
FY 2006: $178;
Total: $2,631.
Total;
FY 2002: $1,192;
FY 2003: $1,042;
FY 2004: $2,380;
FY 2005: $2,253;
FY 2006: $178;
Total: $7,045.
Source: MDA Budget estimate submission, February 2004.
[End of table]
The cost of fielding the Block 2004 capability will be about $939
million more than the originally estimated cost of $6.7 billion and
approximately $607 million more than the revised cost goal of $7
billion. Officials primarily attribute the increased cost to MDA's
sustainment of fielded assets. However, the Block 2004 cost that MDA is
reporting does not include work that the contractor was unable to
complete within the block's time frame. Program officials told us that
in fiscal year 2006 the contractor will conduct additional Block 2004
development and deployment efforts. This will be followed in fiscal
year 2007 with work needed to characterize and verify the Block 2004
fielded elements. The officials said that Block 2006 funds will be used
to pay for these activities.
Table 6 shows the actual cost incurred between October 1, 2002, and
December 31, 2005, for the Block 2004 fielded capability and the
sustainment cost expected to be incurred in fiscal years 2006 and 2007.
It should be noted that this is not the full cost of the initial
capability because DOD began to spend funds to develop the current
missile defense capability in 1995, and as noted above, additional
Block 2004 work will be completed and funded during Block 2006.
[Footnote 11]
Table 6: Expected Cost of Block 2004 Fielded Capability, Including
Initial Sustainment:
Dollars in millions.
Program element: C2BMC;
FY 2002: $21;
FY 2003: $80;
FY 2004: $92;
FY 2005: $154;
FY 2006: $23;
FY 2007: $16;
Total: $386.
Program element: Hercules Block 2004 Joint Warfighter Support;
FY 2002: 0;
FY 2003: 0;
FY 2004: $5;
FY 2005: 0;
FY 2006: 0;
FY 2007: 0;
Total: $5.
Program element: Test and Evaluation Block 2004;
FY 2002: $47;
FY 2003: $57;
FY 2004: $41;
FY 2005: $143;
FY 2006: 0;
FY 2007: 0;
Total: $288.
Program element: Targets and Countermeasures;
FY 2002: $75;
FY 2003: $104;
FY 2004: $183;
FY 2005: $176;
FY 2006: 0;
FY 2007: 0;
Total: $538.
Program element: GMD;
FY 2002: $636;
FY 2003: $369;
FY 2004: $1,357;
FY 2005: $955;
FY 2006: $279;
FY 2007: $375;
Total: $3,971.
Program element: Aegis BMD;
FY 2002: $413;
FY 2003: $386;
FY 2004: $606;
FY 2005: $943;
FY 2006: $101;
FY 2007: $15;
Total: $2,464.
Total;
FY 2002: $1,192;
FY 2003: $996;
FY 2004: $2,284;
FY 2005: $2,371;
FY 2006: $404;
FY 2007: $406;
Total: $7,652.
Source: MDA.
Note: According to MDA officials, all cost incurred in fiscal years
2006 and 2007 are for the sustainment of fielded assets.
[End of table]
BMDS Performance Is Unverified:
Because test data are not available to anchor simulations that MDA uses
to predict BMDS performance, the capability of Block 2004 cannot be
verified. MDA has conducted a variety of tests that suggest Block 2004
offers some protection against ballistic missile attacks. However, MDA
cannot be sure how well the BMDS will perform against ICBMs because
tests needed to characterize the system's performance have not yet been
conducted. Test officials have also suggested that to fully
characterize the BMDS's ability to defeat short-and medium-range
ballistic missile threats, more tests of Aegis BMD are needed.
Additionally, the performance of emplaced GMD interceptors is uncertain
because inadequate mission assurance/quality control procedures may
have allowed less reliable or inappropriate parts to be incorporated
into the manufacturing process.
In February 2003, MDA set performance goals[Footnote 12] for Block 2004
that included a numerical goal for the probability of a successful BMDS
engagement, a defined area from which the BMDS would prevent an enemy
from launching a ballistic missile, and a defined area that the BMDS
would protect from ballistic missile attacks.[Footnote 13] MDA did not
alter Block 2004 performance goals, despite its actions on quantity and
cost goals.
A combination of tests and simulations is necessary to demonstrate
whether the Block 2004 capability can meet its performance goals.
Because it does not always conduct a sufficient number of tests to
compute statistical probabilities of performance, MDA uses models and
simulations to measure the probability that the BMDS will perform as
designed. By employing digital simulations, estimates of system
effectiveness are obtained over a wide range of conditions, scenarios,
and system architectures. However, to ensure that models underlying
these simulations are reflective of real-world operation, the models
must be anchored by data collected during both ground and flight tests.
MDA has completed simulations, ground tests, and flight tests that
demonstrate various functions of the BMDS engagement, such as launch
detection, tracking, interceptor launch, and intercept. However, it has
not successfully completed an end-to-end flight test of the GMD
element--the centerpiece of the BMDS--using production-representative
components. In the absence of these data, MDA's assessment of GMD's
Block 2004 performance is based on data derived from a number of
sources, including design specifications, output from high-fidelity
simulations, and integrated ground tests of various components.
Officials in DOD's Office of Operational Test and Evaluation told us
that MDA's computer-based assessments are appropriate for a
developmental program but could present difficulties in interpreting
results for operational considerations.
During fiscal year 2005, MDA planned four integrated flight tests to
demonstrate the ability of the Block 2004 BMDS against ICBMs. Together
these tests were to assess the ability of different radars to detect
and track targets for the GMD element, the ability of GMD's fire
control system to formulate a firing solution from each radar's data,
and the interceptor's ability to hit and kill the target. Two of these
tests were initiated. However, both tests were aborted because, in
each, the GMD interceptor failed to launch. MDA postponed and has not
rescheduled the third and fourth tests because, after the test
failures, MDA decided to restructure its test program to make it less
concurrent.
MDA's cancellation of the third flight test was particularly
problematic because it prevented MDA from exercising Aegis BMD's long-
range surveillance and tracking capability in a manner consistent with
an actual defensive mission. The Aegis BMD Program Office told us that
Aegis BMD can adequately perform detection and tracking for the GMD
element because in one test Aegis BMD demonstrated the ability to track
a real target and in another test the ability to communicate track data
to GMD's fire control. However, DOT&E officials told us that having
Aegis BMD perform long-range surveillance and tracking in real time
would determine the degree to which errors are introduced when these
activities are combined.
MDA also planned to have the third test fulfill a congressional mandate
to test the Block 2004 configuration in an operationally realistic
manner. For the first time, a test would have included production-
representative GMD hardware and software operated by sailors and
soldiers. All successful GMD intercepts, to date, have used surrogate
and prototype components.
Test Officials Suggest Further Aegis BMD Characterization Tests Are
Needed:
DOT&E officials suggested that further tests are needed to fully
characterize Aegis BMD's capability against ballistic missiles. The
officials told us that Aegis BMD is making good progress in
incorporating operational realism into its flight tests. Operational
crews execute the intercept flight missions without advance notice of
launch time. However, in early tests, ship position with respect to the
target's trajectory is still controlled to increase the probability of
intercept. In addition, the tests have been constrained by sea states,
time of day, weather, target dynamics, and the need to baseline Aegis
BMD's performance and concept of operations. The officials are
recommending that in future tests Aegis BMD's tactical mission planner
should dictate the ship's position and the sectors that its radar
searches, rather than the program scripting the ship's locations and
its radar's search sectors.
Aegis program officials explained that the need to baseline Aegis BMD's
performance has indeed affected the ship's position during tests. An
intercept attempt in February 2005, for example, that tested a specific
burn sequence for the missile's booster required the ship be placed
close to the target track. Yet another test, in November 2005, placed
the ship relatively far from the target track. The officials emphasized
that in both tests Aegis BMD performed successfully.
Quality Control Issues Raise Additional Performance Questions:
Even if MDA had successfully completed flight tests needed to anchor
the models and simulations used to predict the performance of the
initial BMDS capability, the performance of some emplaced GMD
interceptors would still be uncertain. GMD officials told us that
before emplacing interceptors at Fort Greely and at Vandenberg Air
Force Base for operational use, the interceptors undergo various tests.
However, quality control procedures may not have been rigorous enough
to ensure that unreliable parts or parts that were inappropriate for
space applications would be removed from the manufacturing process. Two
unsuccessful flight tests have been traced to poor quality control
procedures. GMD officials have recommended that MDA remove the first
nine interceptors emplaced at Fort Greely and Vandenberg Air Force
Base, as the interceptors are scheduled for upgrades, so that any parts
that tests have shown may not be adequately reliable or appropriate for
use in space can be replaced.
One of the two test failures (IFT-10) occurred in December 2002 when
the EKV could not separate from its booster. A team of engineers that
investigated the test failure found that an open circuit occurred in
one part of the interceptor's Laser Firing Unit, which disconnects the
EKV from the booster. The open circuit was caused by a broken pin in an
application-specific integrated circuit (ASIC) that controlled one
aspect of the EKV/booster separation. The pin was fatigued during
flight vibration. According to the test report, the ASIC's design did
not allow for variations in the assembly process and the contractor did
not lay out an adequate process to uniformly produce the part.
Additionally, the contractor did not adequately test to identify the
problem. In earlier tests, the board on which the ASIC was mounted was
stabilized with a foam material so that the board was not as affected
by the severe vibrations that occur at launch. However, to improve
producibility and reliability, the foam was removed prior to IFT-8.
The second flight test (IFT-14) failure occurred in fiscal year 2005.
The interceptor in this test failed to launch because two of the three
arms that support the interceptor within its silo did not fully retract
and lock. MDA's investigation into the test failure found that the arms
could not retract because the surface of one part was significantly
corroded, and crush blocks, which absorb the impact of the arms as they
retract and lock into position, were an earlier design that required
more force to crush. MDA's Deputy Director for Technology and
Engineering pointed out that the corroded part was subjected to a more
severe environment than it was designed to withstand. However,
officials in the Office of Safety, Quality, and Mission Assurance told
us that if simple quality assurance procedures had been in place, the
corroded part would have been detected and the earlier design of the
crush blocks would not have been installed.
The GMD program considered four options for dealing with the first nine
interceptors emplaced for operational use (seven at Fort Greely and two
at Vandenberg Air Force Base). The options included (1) leaving the
interceptors in their silos and accepting them as is; (2) using the
interceptors in reliability tests; (3) over time, returning the
interceptors to the contractor's facility for disassembly and
remanufacture; or (4) a combination of the other options. GMD program
officials recently told us that their recommendation to MDA is to
replace questionable parts when the interceptors are upgraded in fiscal
year 2007. The officials said to replace the parts, the interceptors
will be removed from their silos.
Schedule Pressures Caused Management to Stray from Knowledge-Based
Practices:
The problems encountered during Block 2004, which ultimately prevented
MDA from achieving all of its goals for the block, were brought about
by management compromises. Time pressures caused MDA to stray from a
knowledge-based acquisition strategy, allowing the GMD program to
condense its acquisition cycle at the expense of cost, quantity, and
performance goals. DOD has given MDA the flexibility to make such
changes.
GMD Program Sacrificed Knowledge-Based Approach to Accelerate Schedule:
MDA programs follow a structured acquisition plan called the Integrated
Management Plan that is meant to guide the development of elements and
components, as well as their integration into the BMDS. If the plan,
which includes eight events, is completed in an orderly manner, it will
increase the likelihood that programs will attain knowledge at
appropriate points in the acquisition cycle. Successful developers have
found that attaining certain knowledge at specific points decreases the
likelihood of cost growth, schedule slips, or degraded performance.
However, because MDA's plan allows early deployment of a capability
well before the eight events are completed, programs may gain knowledge
too late in the process to prevent such problems. MDA officials told us
that because the agency was directed to field a capability earlier than
planned, it accepted additional risks. The risks were greatest in the
GMD program that concurrently matured technology, designed the system,
and produced and fielded operational assets as it attempted to meet its
Block 2004 fielding dates.
A primary tenet of a knowledge-based approach to product development is
to demonstrate the maturity of critical technologies before starting
product development and to demonstrate design maturity and production
process maturity before committing to production and fielding. MDA's
Integrated Management Plan provided for this orderly progression
through the acquisition cycle. At Event 1, an assessment of all
technology critical to the system's design was to be completed. By the
end of Event 2, design work was to be finished, and at the end of Event
4, the design was to be demonstrated in developmental tests. By the
close of Event 5, an assessment of the element's operational capability
would be complete and MDA would decide whether the element was ready to
be handed over to a military service for production, operation, and
sustainment or whether the element should be developed further.
However, the Integrated Management Plan also allows a program to depart
from a knowledge-based acquisition strategy if a decision is made to
field all or part of a capability early. At the end of each event from
Event 3 on, MDA may elect to accelerate fielding of all or part of a
capability by simultaneously completing all phases of the acquisition
cycle. That is, a program can concurrently mature technology, design
its system, and produce and field assets for operational use--which is
contrary to a knowledge-based acquisition strategy. According to MDA
officials, GMD was at Event 3--the point at which a pilot production
line produced its first components and the components' functionality
had been tested--when the presidential decision was made to deploy an
early capability. MDA's Integrated Management Plan is presented in
appendix IV.
Until the President's directive, the GMD program was focused on
developing a test bed. If GMD had serially progressed through all eight
events of the Integrated Management Plan, components would have been
matured and demonstrated in the test bed. At the end of Block 2004, MDA
could have (1) transferred GMD to a military service for production,
operation, and sustainment; (2) developed GMD further in a subsequent
block; or (3) terminated the program altogether. However, to field
early, the GMD program condensed its Block 2004 acquisition cycle. The
program attempted to simultaneously demonstrate technology, design an
integrated GMD element, and produce and emplace assets for operational
use--all within 2 years of the President's directive.
The GMD program fielded an initial capability in 2004 and 2005, as it
was directed to do. However, there were consequences of the accelerated
schedule. The fielding schedule for some GMD components slipped, and
the program could not complete an end-to-end test needed to verify
GMD's performance. Production and fielding of GMD interceptors was
slowed by technical problems and the program's need to address quality
control issues. To address these issues, the program restructured its
test plan at a cost of about $115 million; but it funded the plan at
the expense of making the Sea-Based X-Band and Fylingdales upgraded
early warning radars operational. Block 2006 funds will now be used to
complete these Block 2004 activities.
Other BMDS elements, whose fielding was not planned as part of Block
2004, are currently following a knowledge-based acquisition strategy.
For example, the ABL program is concentrating on maturing technologies
critical to the element's design by designing a prototype. If the
prototype successfully demonstrates its lethality in a demonstration
planned no earlier than 2008, it will become the basis for the design
of an operational capability. Similar to ABL, the KEI program is also
concentrating on demonstrating technologies critical to its design. If
these demonstrations are successful, they could be incorporated into
KEI's design.
GMD Management Became Inattentive to Quality Control Risks:
GMD officials told us that in the process of accelerating GMD's
schedule they became inattentive to weaknesses in the program's quality
control procedures. The GMD program had realized for some time that its
quality controls needed to be strengthened. However, the program's
accelerated schedule left little time to address the problems. The
extent of the weaknesses was documented in 2005 when MDA's Office of
Safety, Quality, and Mission Assurance conducted audits of the
contractor developing the interceptor's EKV and the Orbital Boost
Vehicle.
In its audit of the EKV contractor, the MDA auditors found evidence
that:
* The prime contractor did not correctly communicate all essential EKV
requirements to its subcontractor and the subcontractor did not
communicate complete and correct requirements to its suppliers.
* The EKV subcontractor did not exercise good configuration control.
* The reliability of the EKV's design cannot be determined, and any
estimates of its serviceable life are likely unsupportable.
* The contractor has no written policy involving qualification testing
and does not require that its EKV subcontractor follow requirements
established by industry, civilian, and military users of space and
launch vehicles.
* The contractor's production processes are immature, and the
contractor cannot build a consistent and reliable product.
More details on MDA's audit of the EKV contractor can be found in
appendix IV.
Similarly, the auditors found that the contractor producing the Orbital
Boost Vehicle needed to improve quality control processes and adherence
to those processes. According to deficiency reports, the contractor did
not always, among other things, flow down requirements properly;
practice good configuration management to ensure that the booster met
form, fit, and function requirements; implement effective environmental
stress screening; or have an approved parts, material, and processes
management plan.
Ironically, the pitfalls that result from an accelerated fielding had
already been learned in the THAAD program. In 2000, we reported that
pressure on the THAAD program to meet an early fielding date nearly
resulted in the program's cancellation in 1998.[Footnote 14] When
flight testing began, in 1995, the THAAD missile experienced numerous
problems. Eight of the first nine flight tests revealed problems with
software errors, booster separation, seeker electronics, flight
controls, electrical short circuits, foreign object damage, and loss of
telemetry. According to several expert reviews from both inside and
outside the Army, the causes of early THAAD flight test failures
included inadequate ground testing, poor test planning, and
shortcomings in preflight reviews. One study noted that failures were
found in subsystems usually considered low-risk. Subsequently, the
THAAD program manager adopted a knowledge-based strategy, which led to
successes in later tests.
MDA Has Flexibility in Making and Reporting Program Changes:
Compared with other DOD programs, MDA has greater latitude to make
changes to the BMDS program without seeking the approval of high-level
acquisition executives outside the program. In early 2002, DOD allowed
MDA to effectively defer the application of DOD acquisition regulations
to the BMDS program until a decision is made to transfer a BMDS
capability to a military service for production, operation, and
sustainment. This allows MDA to make program changes without asking for
prior approval.[Footnote 15] For example, MDA has the flexibility to
make trade-offs between BMDS elements. That is, the MDA Director can
decide to accelerate one element while slowing another down. That is
not to say that DOD and Congress are not kept informed of MDA's
progress or changes, but that the MDA Director, by statute, has the
discretion to determine which variations are significant enough to be
reported. Accountability has thus become broadly applied as to mean
delivering some capability within funding allocations.
Under DOD's acquisition regulations, each BMDS element would likely
have met the definition of a major acquisition program. Major
acquisition programs are required by statute (10 U.S.C. § 2435) to
develop a program baseline when the program begins system development
and demonstration. The baseline, which includes cost and schedule
estimates and formal performance requirements developed by the
warfighter, is considered the initial business case for the acquisition
effort. Once a baseline is approved, major acquisition programs are
required to operate within the baseline or to obtain approval from a
high-level acquisition executive outside the program to make cost,
schedule, or performance changes.[Footnote 16] Changes in any of these
baseline parameters would reflect a change in the program's business
case. Approved programs also report program status measured against the
baseline and any baseline changes to Congress in an annual Selected
Acquisition Report (SAR). Congress has also established criteria to
identify significant variations in a weapon system's cost or schedule
and requires that those changes be reported more often, in a quarterly
SAR.[Footnote 17]
MDA is not yet required to have an approved program baseline as defined
by 10 U.S.C. § 2435 for either the BMDS or its elements.[Footnote 18]
Instead MDA develops more flexible cost and quantity goals and
capability-based performance objectives. MDA has a separate statutory
requirement to establish and report cost, schedule, and performance
baselines for block configurations of the BMDS being fielded.[Footnote
19] But these baselines are more flexible than the rigid baselines
required of other acquisition programs that DOD and Congress use in
performing program oversight. While MDA reports its cost, quantity, and
performance information to Congress in an annual Selected Acquisition
Report, it is free to revise its goals and objectives, as it did during
Block 2004, if they are not achievable with the time or funds
available.[Footnote 20] MDA is also required by statute to report
significant variations from the baselines in its annual SAR.[Footnote
21] However, there are no criteria to identify which variations are
significant enough to report. Instead, MDA's Director, by statute, has
the discretion to determine which variations will be reported. For
example, the Director decides whether to report that activities that
Congress funded in one block are being deferred to a later block and
will be paid for with the latter block's funding.
MDA Is Taking Several Corrective Actions:
MDA has begun to address the quality control weaknesses in the BMDS
program. Some actions are as simple as revising reporting lines so that
MDA's Chief of Safety, Quality, and Mission Assurance reports directly
to MDA's Director and Deputy Director and establishing toll-free
telephone numbers for the report of safety and quality issues. MDA is
also renegotiating some aspects of its prime contracts to revise the
award fee determination process in an effort to place more emphasis on
quality control and the implementation of industry best practices, and
adding mission assurance provisions to contracts that promote process
improvements, improve productivity, and enhance safety, quality, and
mission assurance. Furthermore, MDA is placing more emphasis on the
definition and correction of quality control weaknesses by conducting
audits of major contractors and subcontractors. It has also renewed the
emphasis on the role of the Defense Contract Management Agency in
performing quality assurance functions in support of MDA programs.
Finally, MDA has adopted a more conservative test approach for the GMD
program that includes increased ground tests and an incremental
approach to flight testing. However, the actions have not gone so far
as to ensure that all BMDS programs implement knowledge-based practices
or to ensure that the activities planned to develop, demonstrate, and
produce the capabilities intended for future blocks are achievable
within the block time frames without resorting to a concurrent
schedule.
Contracts to Reflect the Importance of Good Quality Assurance Strategy:
MDA plans to revise prime contracts to reflect the importance of good
quality assurance procedures and the contractor's implementation of
industry best practices. GMD officials told us that in fiscal year 2005
award fee on the GMD contract was partially based on a good quality
control program. The officials said that of the $407 million award fee
available for the period running from October 1, 2004, through
September 30, 2005, $9 million was based on the contractor's
implementation of good quality assurance and supplier management
procedures. In November 2005, MDA awarded the contractor $2.1 million
of the $9 million set aside for the implementation of quality assurance
procedures. MDA officials also told us that in fiscal year 2006, the
overarching criteria for the entire award fee pool of $302 million will
be the contractor's implementation and adherence to industry standards
and best practices.
MDA also expects to modify prime contracts to incorporate a document
referred to as MDA Assurance Provisions (MAP). All prime contracts are
to include MAP standards, but not all contracts have been modified
because MDA and some contractors have not reached agreement on the cost
of implementing the MAP. For example, the GMD prime contractor
estimates that implementation costs will be somewhere around $280
million. However, officials in MDA's Office of Safety, Quality, and
Mission Assurance told us that at least one contractor has agreed to
implement the MAP at no additional cost.
The MAP provides a measurable, standardized set of safety, quality, and
mission assurance requirements to be applied to developers for mission-
and safety-critical items in support of evolutionary acquisition and
deployment of MDA systems.[Footnote 22] For example, the document
includes standards regarding the collection and reporting of foreign
object damage and debris incidents, a requirement for working-level
peer reviews throughout design and development to identify and resolve
technical issues and concerns prior to formal system-level reviews, and
a requirement for ensuring that commercial off-the-shelf items meet all
functional and interface requirements and are qualified to operate in
their intended environment.
In addition to requiring contractors to abide by MAP standards, MDA
also requires each BMDS element program office to compare its mission
assurance plan with the MAP. As a result of the comparison, the program
is expected to identify critical mission assurance needs that are not
being met. The results are catalogued in a Mission Assurance
Implementation Plan (MAIP), which element program directors are
accountable for implementing. Each element is to continuously assess
MAIP execution so that feedback can be used to improve both the MAP and
the MAIP.
MDA Renews Emphasis on Contractor Surveillance:
So that the quality assurance weaknesses in the BMDS program are
accurately defined, the MDA Director also gave the Office of Safety,
Quality, and Mission Assurance unfettered access to all MDA contractor
operations, activities, and documentation. Under this authority, MDA
quality personnel have been placed in each prime contractor facility to
monitor the contractor's quality procedures, and the office is auditing
major contracts to identify quality assurance deficiencies and areas
where procedures can be improved. As of November 2005, the office had
completed audits of the Aegis BMD SM-3, GMD EKV, and Orbital Sciences
Corporation booster, and THAAD contracts.
MDA is also placing a renewed emphasis on the Defense Contract
Management Agency's (DCMA) quality assurance role. In a May 2005
delegation letter, MDA directed DCMA to:
* perform quality assurance surveillance activities in accordance with
DCMA policies and directives;
* ensure that mandatory government inspections authorized by MDA are
incorporated into the contractor's manufacturing process plans and/or
critical suppliers' plans;
* report mandatory government inspection test results, missed
inspections, and requests for permission to waive inspections to MDA's
Office of Safety, Quality, and Mission Assurance for that office's
approval; and:
* support technical surveillance activities by carrying out such duties
as participating in mission critical item and component Material Review
Boards and providing insight and recommendations on engineering change
proposals, requests for waivers, employee training, and the
contractor's critical manufacturing processes.
MDA Restructures GMD's Test Plan:
In 2005, the MDA Director established a new position--Director, Mission
Readiness--whose primary focus during fiscal year 2005 was to examine
the Ground-Based Midcourse Defense test program. To assist in this
examination, a small, highly experienced Mission Readiness Task Force
was established. The goals of the task force were to establish
confidence in GMD's ability to reliably hit its target, establish
credibility in setting and meeting test event dates, build increasing
levels of operationally realistic test procedures and scenarios, raise
confidence in successful outcomes of flight missions, and conduct the
next flight test as soon as practical within acceptable risk bounds.
To meet these goals, the task force recommended a knowledge-based
flight readiness process and flight test program. Before a test is
held, the GMD program presents evidence that all components are ready
for test. Program officials explained that senior executives from all
key stakeholder organizations review the evidence and make a
recommendation to the MDA Director as to whether the test event should
proceed. GMD's test plan has also been restructured to place more
emphasis on successful ground tests prior to each flight test.
According to MDA program officials, part of the evidence for proceeding
from one flight test to another is success in the preceding ground and
flight tests.
The first flight tests have simple objectives. For example, flight test
1, conducted in December 2005, demonstrated the successful launch of
the GMD interceptor and the separation of the EKV from its booster. By
flight test 4, MDA expects to be ready to demonstrate that the GMD
system is capable of hitting an operationally representative target.
Tests that follow will become progressively more difficult.
Corrective Actions May Not Alleviate Pressures Associated with Schedule-
Driven Block Approach:
Although MDA is taking many actions to address quality assurance
problems, it has not taken any steps to ensure that all elements follow
a knowledge-based acquisition strategy or to ensure that the time is
available to follow such a strategy. For example, a number of
activities planned for the GMD element during Block 2004 have been
deferred to Block 2006. Also, developmental efforts for other elements
did not progress as planned, leaving more work to be completed during
Block 2006 and, perhaps, later blocks.
Conclusions:
Missile defense is one of the largest weapon system investments DOD is
making. To date, around $90 billion has been spent, and over the next 6
years, DOD expects that it will need about $58 billion more to enhance
the BMDS. Beyond that, more funding will be required if DOD is to reach
its ultimate goal of developing a system capable of countering
ballistic missile launches from any range during all phases of flight.
By driving to a fielding date during Block 2004, MDA placed assets in
the field faster than originally planned. However, in doing so, MDA
strayed from the knowledge-based approach that allows successful
developers to deliver, within budget, a product whose performance has
been demonstrated. Instead, MDA fielded assets before their capability
was known. In addition, the full cost of this capability is not
transparent to decision makers because MDA has deferred the cost of
some Block 2004 activities into the next block.
The fielding of the Block 2004 capability provides an opportunity for
DOD to take stock of the approach it has taken thus far on missile
defense and determine whether changes are warranted for its approach to
future blocks. We believe they are. The concurrent development approach
dictated by the directed fielding date and enabled by considerable
flexibility to lower goals and defer capability has resulted in
delivering fewer assets than planned. Accountability has been very
broadly applied as to mean delivering some capability within funding
allocations. While recognizing this approach did successfully
accelerate fielding, to the extent it continues to feature concurrency
as a means for acceleration, it may not be affordable for the
considerable amount of capability that is yet to be developed and
fielded. While the effects of this approach were perhaps most keenly
felt with the Block 2004 capability, signs of its continuance can be
seen in the developmental activities that were deferred during fiscal
year 2005.
It is possible for MDA to return to a knowledge-based approach to
development while still fielding capability in blocks. To its credit,
MDA instituted its own audits and is heeding the results of those
audits in taking a number of steps to correct the quality assurance and
testing problems encountered thus far. Yet these corrective actions
have not gone far enough to put all of the BMDS elements on a knowledge-
based approach to development and fielding. MDA's experience during
Block 2004 shows that it may not always be possible to deliver a
capability in a 2-year time frame. Clearly, a block or stepped approach
to fielding a new system is preferable to attempting a single step to
full capability. However, a primary tenet of a knowledge-based
acquisition strategy is that a program should be event-rather than
schedule-driven. This philosophy is consistent with the evolutionary
acquisition approach preferred by DOD in its acquisition regulations.
It also provides a better basis for holding MDA accountable for what it
can deliver within estimated resources.
Recommendations for Executive Action:
To better ensure the success of future MDA development efforts, we
recommend that the Secretary of Defense direct the Director, MDA, to
take the following three actions.
* Direct all BMDS elements to implement a knowledge-based acquisition
strategy that provides for demonstrating knowledge points for major
events or steps leading up to those events. These knowledge points
should be consistent with those called for in DOD's acquisition
regulations. For example, markers could be established that would
demonstrate that programs have the knowledge to meet design review
standards and are ready to hold those reviews.
* Assess whether the current 2-year block strategy is compatible with
the knowledge-based development strategy recommended above. If not, the
Secretary should develop event-driven time frames for future blocks.
Events could represent demonstrated increases in capability, such as
the addition of software upgrades, stand-alone components, or elements.
* Adopt more transparent criteria for identifying and reporting on
significant changes in each element's quantities, cost, or performance,
such as those that are found in DOD's acquisition regulations. Coupled
with a more knowledge-based acquisition strategy, such criteria would
enable MDA to be more accountable for delivering promised capability
within estimated resources.
Agency Comments and Our Evaluation:
DOD's comments on our draft report are reprinted in appendix I. DOD
partially concurred with our first recommendation. DOD stated that MDA
has implemented a knowledge-based acquisition strategy that relies upon
discrete activities to produce data that can be used to judge an
element's progress. DOD noted that unlike the knowledge points
discussed in DOD acquisition regulations, the knowledge points used by
MDA are discrete points, not reviews. According to DOD, MDA's strategy
is consistent with the principles of DOD acquisition regulations while
providing MDA's Director with the flexibility to determine their
applicability to the BMDS block development concept. We agree that
knowledge is obtained through discrete events, such as a successful
test or the completion of a cost/benefit analysis, but we define
knowledge points as meaning more than discrete events. Rather,
knowledge must be looked at in the aggregate. For example, the
knowledge gained from a number of discrete events must be considered
collectively to confirm that the design of a system is stable. It is
these aggregations that we consider to be the knowledge points that
should form the basis for investment decisions. For example, the GMD
program's successful demonstration of various functions of the BMDS
engagement may have been sufficient to continue funding of the
element's development, but the discrete events were not sufficient to
demonstrate that the element's design and production processes were
sufficiently mature to begin production and fielding. We also note that
the knowledge points discussed in DOD acquisition regulations do
represent measurable, demonstrated knowledge, such as technology and
design maturity, that then become the basis for reviews. They are not
the reviews themselves, as reviews can take place regardless of the
level of knowledge available.
DOD also partially concurred with our recommendation that MDA assess
whether the 2-year block strategy is compatible with a knowledge-based
acquisition strategy. DOD stated that MDA uses knowledge points to
establish block goals and makes adjustments to those goals when
necessary. DOD noted that the 2-year block strategy is compatible with
this approach. We have not seen the decisions made on Block 2004 as
being consistent with knowledge points. During Block 2004, MDA allowed
the GMD program to complete all phases of the acquisition cycle--
technology development, product design, production, and fielding--
simultaneously to enable the program to field a capability within the 2-
year time frame. If MDA is to be truly knowledge-based, it must be
dedicated to taking the time to gather the knowledge needed to be
successful in the next acquisition phase. Because MDA did not follow
this strategy in Block 2004, we still believe that MDA should assess
future blocks to determine whether those blocks can be developed within
the 2-year time frame without resorting to a concurrent schedule.
DOD did not concur with our third recommendation to adopt more
transparent criteria for identifying and reporting program changes. In
responding to this recommendation, DOD responded that MDA in 2005, by
statute, began submitting fielding baselines to Congress and must
report significant cost, schedule, or performance variances to these
baselines in future reports. DOD believes that these reports and the
quarterly reviews conducted by DOD staff provide an adequate level of
oversight. We agree that MDA is required to report significant
variances to established baselines to Congress and that MDA keeps DOD
informed about the Ballistic Missile Defense program. However, given
the management flexibilities accorded MDA and the large amount of
resources (more than $50 billion) that DOD currently plans for missile
defense, more transparent criteria is needed for better program
management and oversight.
DOD provided technical comments to our draft report, which we
considered and incorporated as appropriate. In its technical comments,
for example, DOD expressed concern that our draft report measured Block
2004 against goals established in February 2003 rather than the fielded
baseline goals established in 2005. We chose the 2003 goals as a
baseline because the goals were MDA's official notification to Congress
of the agency's expectations for the block. In addition, goals are
meant to be a result that an organization strives to achieve. If goals
are changed over time to more closely reflect actual performance, they
lose their validity. We have included in the report a discussion of the
changes that MDA made in its Block 2004 goals from 2003 through 2005
and the reasons for those changes.
We are sending copies of this report to the Secretary of Defense and to
the Director, MDA. We will make copies available to others upon
request. In addition, the report will be available at no charge on the
GAO Web site at http://www.gao.gov.
If you, or your staff, have any questions concerning this report,
please contact me at (202) 512-4841. Contact points for our offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. The major contributors to this report are listed
in appendix VII.
Signed by:
Paul Francis:
Director, Acquisition and Sourcing Management:
List of Congressional Committees:
The Honorable John 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 L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable C.W. Bill Young:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:
3000 DEFENSE PENTAGON:
WASHINGTON, DC 20301-3000:
Mr. Paul Francis:
Director, Acquisition and Sourcing Management:
U. S. Government Accountability Office:
441 G. Street, N.W.:
Washington, DC 20548:
Dear Mr. Francis:
This is the Department of Defense (DoD) response to the GAO Draft
Report, "MISSILE DEFENSE: Missile Defense Agency Fields Initial
Capability But Falls Short of Goals," dated February 2, 2006 (GAO Code
120442/GAO-06-327).
The DoD partially concurs with the draft report's recommendations. The
rationale for our position is included in the enclosure. I submitted
separately a list of technical and factual errors for your
consideration.
We appreciate the opportunity to comment on the draft report. For
further questions concerning this report, please contact COL Fred
Coppola, (703) 695-7329, fred.coppola@Osd.mil.
Sincerely,
Signed by:
Mark D. Schieffer:
Acting Director:
Defense Systems:
Enclosure: As stated:
GAO DRAFT REPORT DATED FEBRUARY 2, 2006 GAO-06-327 (GAO CODE 120442):
"MISSILE DEFENSE: Missile Defense Agency Fields Initial Capability But
Falls Short of Goals"
DEPARTMENT OF DEFENSE COMMENTS TO THE GAO RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Director, MDA to direct all BMDS elements to implement a
knowledge-based acquisition strategy that provides for demonstrating
knowledge points for major events or steps leading up to those events.
These knowledge points should be consistent with those called for in
DOD's acquisition regulations. For example, markers could be
established that would demonstrate that programs have the knowledge to
meet design review standards and are ready to hold those reviews.
DOD RESPONSE: Partially concur. Consistent with DOD acquisition
regulations, MDA has implemented a knowledge-based acquisition strategy
to demonstrate knowledge points for major events. MDA establishes
knowledge points for its programs. Unlike knowledge points discussed in
DOD acquisition regulations, the knowledge points used by MDA are not
reviews, but discrete activities that produce data on program progress.
This approach is consistent with the MDA Charter that requires MDA to
manage the BMDS consistent with the principles of DoD acquisition
regulations, but provides the Director the flexibility to determine
their applicability to the BMDS Block development concept. This
approach is fundamental to how MDA executes its development program
because it enables decisions to be made based on what we will and will
not fund based upon the proven success of each program element. The
Department sees no need for the Secretary to provide additional
direction to the Director, MDA on the subject.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Director, MDA to assess whether the current 2-year block
strategy is compatible with the knowledge-based development strategy
recommended above. If not, the Secretary should develop event-driven
timeframes for future blocks. Events could represent demonstrated
increases in capability, such as the addition of software upgrades,
stand-alone components, or elements.
DOD RESPONSE: Partially concur. MDA uses knowledge points to establish
block goals and makes adjustments to these block goals when necessary.
The 2-year block strategy is compatible with this approach. The
Department sees no need for the Secretary to provide additional
direction to MDA on the subject.
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct the Director, MDA to adopt more transparent criteria for
identifying and reporting on significant changes in each element's
quantities, cost, or performance, such as those that are found in DOD's
acquisition regulations. Coupled with a more knowledge-based
acquisition strategy, such criteria would enable MDA to be more
accountable for delivering promised capability within estimated
resources.
DOD RESPONSE: Non-concur. MDA in 2005, by statute, submitted fielding
baselines to Congress and must now report significant cost, schedule,
or performance variances in their Selected Acquisition Report and
update Congress on baseline changes. In addition, the USD(AT&L)
conducts quarterly formal reviews of the Ballistic Missile Defense
program, along with other Office of the Secretary of Defense staff. The
Department believes that these reviews are consistent with other
defense programs and are sufficient to provide an adequate level of
oversight on significant program changes.
[End of section]
Appendix II: Block 2004 Element Assessments:
The Missile Defense Agency (MDA) developed and fielded in Block 2004
three Ballistic Missile Defense System (BMDS) elements for operational
use in the event of an emergency. These elements are the Aegis
Ballistic Missile Defense (Aegis BMD); Ground-Based Midcourse Defense
(GMD); and the Command, Control, Battle Management, and Communications
(C2BMC) elements. MDA also attempted to accelerate the fielding of the
Forward-Based X-Band Transportable (FBX-T) radar being developed by the
Sensors Program Office into Block 2004. Although the agency was able to
complete the radar's development, DOD did not complete negotiations
with Japan, the host nation, in time to make the FBX-T operational
during the block.
During Block 2004, MDA also carried out development efforts for other
elements that are expected to be incorporated into the BMDS during
later blocks to enhance the system's capability. These elements include
the Airborne Laser (ABL), Kinetic Energy Interceptor (KEI), Terminal
High Altitude Area Defense (THAAD), and Space Tracking and Surveillance
System (STSS). Development of the THAAD element, which is being
designed to attack short-and medium-range ballistic missiles during the
terminal stage of their flight, is further along than the other
developmental elements, and MDA expects to make one THAAD fire unit
available for operational use in fiscal year 2009. The other three
developmental elements are at an early stage. The ABL element, which is
to attack missiles during the boost phase of their flight, is
developing a prototype to demonstrate technologies critical to the
system's design. MDA expects to demonstrate the technologies no earlier
than 2008, when the program will test the element's lethality against a
short-range ballistic missile. Similarly, the KEI program's work during
Block 2004 is focused on technology demonstration. MDA will assess
KEI's progress in 2008 and decide the future of its effort to develop a
mobile, multi-use system capable of intercepting ballistic missiles
during the boost and midcourse phases of flight. During Block 2004, the
STSS program readied demonstration satellite and sensor hardware for
launch. MDA expects the STSS to provide surveillance and tracking of
enemy ballistic missiles for other BMDS elements. If the two STSS
satellites being launched in 2007 successfully demonstrate this
function, a constellation of STSS satellites could be launched
beginning in 2013.
Aegis BMD:
The Aegis BMD element is a sea-based missile defense system designed to
defeat short-and medium-range ballistic missiles in the midcourse phase
of flight. Its mission is to protect deployed U.S. forces, allies, and
friends from such attacks, and to employ its shipboard radar as a
forward-deployed Ballistic Missile Defense System sensor to support
intercontinental ballistic missile (ICBM) engagements.[Footnote 23]
The Aegis BMD element builds upon the existing capabilities of Aegis-
equipped Navy cruisers and destroyers. Planned hardware and software
upgrades to these ships will enable them to carry out the missile
defense mission in addition to their current role of protecting U.S.
Navy ships from air, surface, and subsurface threats. The program is
also developing the Standard Missile-3 (SM-3)--the system's "bullet"--
which is designed to destroy enemy warheads through hit-to-kill
collisions above the atmosphere. The SM-3 is composed of a kinetic
warhead (kill vehicle) mounted atop a three-stage booster.
Program Accomplishes Fielding Plan:
The program fielded Block 2004 assets mostly on schedule. Nine (Block
I) SM-3 missiles were ready for operational use by December 2005, as
planned. In addition, two Aegis BMD cruisers received system upgrades
making them capable of launching missiles to engage ballistic missile
targets. Ten Aegis BMD destroyers were equipped with long-range
surveillance and tracking software during Block 2004.
Test Results Are Good, but Further Tests Are Needed:
Aegis BMD conducted the most realistic tests of all the BMDS elements,
but further tests are needed to fully characterize the element's
missile defense performance. The program has successfully tested Aegis
BMD's engagement capability in six intercept attempts since 1999 using
variants of the SM-3 missile. One of these successful intercepts,
Flight Test Mission (FTM) 04-1, was conducted in fiscal year 2005.
Operational test officials reported that the test incorporated many
operational characteristics. For example, the warfighter had no
preknowledge of the target launch time, the target was representative
of a real-world threat, and the fielded missile configuration was used.
However, the officials said that in early tests, including FTM 04-1,
ship position with respect to the target's trajectory was controlled to
increase the probability of intercept. The officials are recommending
that in future tests Aegis BMD's tactical mission planner should
dictate the ship's position and the sectors that its radar searches,
rather than the program scripting the ship's locations and its radar's
search sectors.
Additional tests are also needed to demonstrate that the program has
resolved problems that limit the SM-3 missile's ability to divert to
its target. Although the current configuration is adequate for the
current threat, the missile will require more divert capability if it
is to hit more complex targets and targets with more challenging
trajectories than were seen in early tests. For example, the missile's
Solid Divert and Attitude Control System (SDACS) needs to operate in a
pulse mode, rather than its current sustain mode, to increase the
missile's ability to maneuver toward its target. Performance problems
with the SDACS's pulse mode of operation were first noticed in a June
2003 flight test, Flight Mission (FM)-5, and have remained a concern to
the program. Program officials modified the SDACS's design in fiscal
year 2005, and they believe that the root cause of the problem is
understood. However, ground and flight tests, planned for fiscal year
2006, are needed to verify that the SDACS will perform as designed. If
the tests are successful, the pulsed SDACS could be incorporated into
the missile in fiscal year 2007. Although the earliest fielded missiles
will not be capable of pulse mode operation, which will reduce their
divert capability, program officials believe that these missiles will
provide a credible defense against a large population of the threat. A
test (FTM 04-2) successfully conducted in November 2005 against a
"separating" target--a target whose warhead separates from its booster
rocket--also showed that the SM-3 has some capability against a more
advanced target than the nonseparating targets used in prior tests.
The program has also flight-tested Aegis BMD's long-range surveillance
and tracking capability, but further verification of fielded system
upgrades is needed. In fiscal year 2005, the program successfully used
the system upgrade (Ballistic Missile Defense 3.0E) to track live ICBM
targets of opportunity in two separate events. However, because GMD did
not participate in these tests, track data developed from the live
target were not used to formulate a task plan for a GMD interceptor, as
it would need to do in an actual defensive mission. Although track data
have been passed to the fire control unit in a separate event, this has
not been demonstrated in real time. MDA expected to test Aegis BMD's
long-range surveillance and tracking capability in several fiscal year
2005 flight tests, but it was unable to do so, mostly because of delays
in the GMD test program. Aegis BMD was unable to participate in
Integrated Flight Test (IFT)-13C because of weather conditions and in
IFT-14 because of fleet scheduling conflicts. Other GMD tests were put
on hold and later folded into a new test schedule to begin in fiscal
year 2006. MDA has not yet rescheduled a GMD flight test that uses
Aegis BMD in its long-range surveillance and tracking role.
Ground-Based Midcourse Defense:
The GMD element is a missile defense system being developed to protect
the United States against ICBM attacks launched from Northeast Asia and
the Middle East. The GMD element relies on a broad array of components,
including (1) space-and ground-based sensors to provide early warning
of missile launches, (2) ground-and sea-based radars to track and
identify threatening objects, (3) ground-based interceptors to destroy
enemy missiles through hit-to-kill impacts above the atmosphere, and
(4) fire control and communications nodes for battle management and
execution of the GMD mission. Figure 1 illustrates the various GMD
components, which are situated at several locations within and outside
the United States.
Figure 1: Components of the GMD Element:
[See PDF for image]
[End of figure]
Progress during Block Falls Short of Expectations:
GMD's progress toward meeting Block 2004 goals was less than expected.
Silos and other construction at GMD facilities were completed on
schedule, but the program was unable to meet its fielding goals for
ground-based interceptors. Most of the GMD radars are fielded and could
be used for defensive operations if needed. However, some radar
upgrades were delayed, and none of the radars have been tested in
integrated flight tests. In addition, an operational flight test and
other key tests needed to characterize GMD's performance were delayed
into fiscal year 2006.
Program Did Not Meet Scheduled Deliveries:
The infrastructure for the missile defense complex is complete, but MDA
was unable to deliver almost half of the interceptors initially planned
for the Block 2004 inventory. MDA completed, on schedule, construction
of all facilities needed to place the GMD system on alert, including
the construction of the first missile field at the missile defense
complex at Fort Greely, Alaska. However, the GMD program emplaced only
10 of the 20 interceptors originally planned for Block 2004. In fiscal
year 2004, the program designated 2 of the 20 interceptors as test
assets after an explosion at a plant producing motors for the
interceptor's booster caused the interceptor's delivery schedule to
slip. In fiscal year 2005, the program diverted 4 more interceptors to
the test program in response to a MDA task force recommendation for a
revised test plan. According to GMD officials, delivery of five of the
six test assets and the remaining four missiles for operational use
were delayed beyond December 2005.
MDA has two radars ready for operation, Cobra Dane and the Beale
upgraded early warning radar. However, tests have identified a Cobra
Dane shortcoming, and neither radar's capability has been verified in
system-level flight tests. The Cobra Dane radar has been ready for
limited defensive operations since September 2004. It has participated
in ground tests and successfully tracked several targets of
opportunity. Because the radar's location prevents it from
participating in integrated flight tests, an air-launched target was
used in a September 2005 flight test (FT 04-5). The test was designed
to assess the radar's ability to transmit track data, in real time, to
the missile defense fire control system. Cobra Dane performed as
expected in these test events, but officials in the office of the
Director, Operational Test and Evaluation (DOT&E) are concerned that
the radar's software, as currently written, could cause the GMD element
to waste inventory. The Beale radar is also ready to conduct the
missile defense mission, but software deficiencies and lack of testing
are still a concern. While Beale radar hardware and communications
upgrades are complete, software deficiencies caused software upgrades
planned for Block 2004 to fall slightly behind schedule. The program
planned to resolve the deficiencies, which could cause some degradation
in the radar's performance, in early 2006. However, officials consider
Beale ready to perform its basic missile defense mission should the
BMDS be placed on alert prior to the resolution of the deficiencies
because the radar has successfully tracked several targets of
opportunity. A test to certify all radar upgrades is currently
scheduled for fiscal year 2006. In early fiscal year 2007, MDA also
plans to test Beale's operational capability as the fire control radar
in an intercept attempt. In this test, for the first time, Beale will
track a live target and provide track data to the GMD fire control
component that will use the data to develop a weapon system task plan.
Full functionality of two additional early warning radars was delayed
into later blocks. Fylingdales upgraded early warning radar was delayed
slightly to cover some of the cost of additional flight tests added to
the GMD program. Its missile defense capability will be available in
early Block 2006, after a distributed ground test scheduled for the
second quarter of fiscal year 2006. Full radar functionality, which
will allow the radar to perform both its missile defense mission and
its legacy Air Force mission, is expected in October 2006. Likewise,
deployment of the Thule upgraded early warning radar, which MDA had
planned to upgrade incrementally, was postponed to Block 2008 so that
the radar could be fully upgraded before taking on its missile defense
mission.
The Sea-Based X-Band radar (SBX) is also slightly behind schedule.
Additional funding needs for new flight tests prevented the GMD program
from integrating the Sea-Based X-Band radar into the BMDS by December
31, 2005, as planned. The radar is able to track targets but will not
be able to pass track data to the fire control center until it is
integrated with the GMD system during the distributed ground test
scheduled for April 2006. The radar is expected to be transported to
its home port at Adak, Alaska, by the third quarter of calendar year
2006 where it will be available in the event of an emergency. However,
MDA does not plan to verify the performance of the radar in a system-
level flight test until late in 2007.
GMD Unable to Carry Out Flight Test Plan:
The GMD program was unable to demonstrate the Block 2004 GMD system in
flight tests. The program attempted two integrated flight tests in
fiscal year 2005, IFT-13C in December 2004 and IFT-14 in February 2005.
In both tests, interceptors failed to launch from their silos. In IFT-
13C, a timing problem with the interceptor's flight computer caused the
interceptor to abort its launch. In IFT-14, the first intercept attempt
since 2002, the interceptor was unable to lift off because the arms
inside the silo failed to fully retract and lock out of the way.
Program officials traced the root cause of this failure to poor quality
control procedures.
In response to these test failures, MDA delayed upcoming plans for
future tests and chartered the Mission Readiness Task Force to review
the program and propose changes. The task force found that MDA's
problems were primarily linked to inadequate quality assurance
processes. An independent review team attributed these problems to the
urgency of the fielding schedule, which drove decision making and
program planning. The task force provided guidance for improving the
test program by significantly restructuring the focus of upcoming test
events. MDA adopted the recommended test strategy at an additional cost
of $115 million.
Although early tests in the restructured plan have simple objectives,
the tests get progressively more difficult, and DOT&E is concerned that
MDA cannot meet its schedule to conduct the first four tests between
November 2005 and November 2006. The first flight test (FT-1) was
successfully conducted in December 2005, 1 month later than planned.
The objective of the test was not to intercept a live target, but to
verify that an interceptor, representative of the configuration being
fielded, could be successfully launched and to evaluate its booster's
delivery performance. The next intercept attempt, FT-4, is not
scheduled until late calendar year 2006.
One consequence of restructuring the GMD test program was MDA's
inability to fulfill the statutory mandate that required DOD to conduct
an operationally realistic test of the BMDS by October 1, 2005. MDA had
planned to conduct this test in the third quarter of fiscal year 2005.
However, after the two flight test failures, the task force recommended
that MDA spend additional time addressing mission readiness before
attempting an operational test of the BMD system. FT-4, scheduled for
November 2006, is the first test that has the potential to fulfill the
mandated objectives. FT-4 is planned as an intercept attempt using the
Beale radar as the fire control radar. This will be the GMD program's
first intercept attempt to use a nonsurrogate fire control radar.
Program Proves GMD Concept, but Not Its Design:
While the GMD program has proved the concept of destroying ICBMs during
the midcourse of their flight, the program has not proved GMD's design
will deliver the performance desired. The GMD program, the centerpiece
of the BMDS Block 2004 defensive capability, has demonstrated its
ability to intercept target warheads in flight tests since 1999. The
program has conducted five successful intercept attempts, the last one
in 2002. While the program maintains that each piece of the engagement
sequence has been demonstrated by flight and ground tests, the program
has been unable to verify that the integrated system, using production-
representative components, will work in an end-to-end operation. Until
further testing is done, MDA will not know for sure that the integrated
system using operational interceptors and fire control radars will
perform as expected, or that technical problems with the kill vehicle
and its booster have been fixed.
Quality control weaknesses also raise concerns about the performance of
GMD interceptors. Quality control procedures may not have been rigorous
enough to ensure that unreliable parts, or parts that were
inappropriate for space applications, would be removed from the
manufacturing process. For example, a leak in an attitude control
system regulator was traced to unauthorized rework. Although production
has slowed as the program introduces initiatives to strengthen quality
controls, interceptors are still being emplaced in silos before all
initiatives are in place. Additionally, the first nine interceptors
emplaced for operational use--seven at Fort Greely and two at
Vandenberg Air Force Base--could include questionable parts that were
not detected during the interceptor's acceptance tests. Program
officials told us that they are recommending that such parts be
replaced in 2007, when the interceptors are scheduled to be upgraded.
Making the replacements will require that the interceptors be removed
from their silos.
Command, Control, Battle Management, and Communications:
The C2BMC element is being developed as the integrating and controlling
entity of the BMDS. Leveraging existing infrastructure, it is initially
designed to provide connectivity between the various BMDS components
and in later blocks will manage their operations as part of an
integrated, layered missile defense system. Over time, C2BMC will not
only provide planning tools to assist the command structure in
formulating defensive actions, it will also generate detailed
instructions for executing various missile defense functions, such as
tracking enemy missiles, discriminating the warhead from decoys and
associated objects, and directing the launch of interceptors. It will
also manage the exchange and dissemination of information necessary for
carrying out the missile defense mission.
The Block 2004 C2BMC element provides situational awareness by
monitoring the operational status of each BMDS component, and it
displays threat information such as missile trajectories and impact
points. When the FBX-T becomes operational, C2BMC will also provide
sensor control, sensor tasking, and sensor monitoring of the radar and
forward the data to GMD.
The incorporation of battle management capabilities into the C2BMC
element begins with Block 2006. In the 2006-2007 time frame, the
element is expected to track a ballistic missile threat throughout its
entire trajectory and select the appropriate element to engage the
threat. For example, the Block 2006 C2BMC configuration would be able
to generate a single, precise track from multiple radars and transmit
it to the other elements. This allows elements to launch interceptors
earlier, providing more opportunity to engage incoming ballistic
missiles.
Block 2006 is also expected to enhance C2BMC's communications with each
BMDS component. C2BMC program officials will work to establish
communications with all elements of the BMDS, overcome limitations of
legacy satellite communications protocols, and establish redundant
communications links to enhance robustness. Such upgrades will improve
operational availability and situational awareness.
Most Block 2004 Activities Completed on Schedule:
The C2BMC team executed all of its planned fiscal year 2005 activities
as scheduled and nearly all of the activities needed to complete the
Block 2004 capability. Program officials completed software development
and testing, and integration activities, and enhanced the system's
robustness. Additional suites were also installed at command centers to
provide the warfighter with the capability to plan and monitor the
missile defense mission. [Footnote 24] A number of activities in
preparation for Block 2006 were also completed during fiscal year 2005.
For example, design and planning requirements for Block 2006 software
upgrades (Spirals 6.1 and 6.2), along with a Block 2006 system
requirements review, were completed in June and July of 2005
respectively.
During fiscal year 2005, program officials completed the development of
the final two upgrades (Spirals 4.4 and 4.5) to Block 2004 C2BMC
element software. The first upgrade (Spiral 4.4) added the ability to
display GMD assets on users' computer monitors, improved the user's
ability to call up BMDS information, and reduced the time to transfer
force-level planning files. The second upgrade (Spiral 4.5) gave C2BMC
the capability to receive, distribute, and display information
developed by three new sensors--the Forward-Based X-Band and Sea-Based
X-Band radars and the Fylingdales upgraded early warning radar. It also
improved the consistency between the data displayed by the C2BMC and
the GMD fire control monitor, which also receives information directly
from various sensors.
The program office installed a suite at the U.S. Pacific Command during
fiscal year 2005, and it is waiting on policy agreements to turn on a
Web browser--providing summary screens of the unfolding battle--in the
United Kingdom. Additionally, second suites were added at the U.S.
Strategic Command (STRATCOM) and the U.S. Northern Command (NORTHCOM)
to allow for concurrent operations and system upgrades as well as to
make the C2BMC a more robust system.
The C2BMC program also completed most of the activities needed to
verify its Block 2004 capability. In August 2005, the program completed
testing that proved the readiness of Spiral 4.4 software for
operations. The program also participated in demonstrations with other
elements to practice transitioning the BMDS to alert. By the end of
Block 2004, the final software upgrade (Spiral 4.5) was tested to
verify that the C2BMC could interface with each BMDS element and that
the improved software was ready for operational use. However, further
testing is needed to verify that Spiral 4.5 can provide planning and
situational awareness at U.S. Northern Command, U.S. Strategic Command,
U.S. Pacific Command, and the Department of Defense's Cheyenne Mountain
Operations Center. Program officials told us that they expect to
complete the verification tests by the end of March 2006.
Performance Mostly on Track:
The C2BMC program successfully demonstrated its ability to maintain
situational awareness during several ground-and flight-testing
activities. Program officials were able to monitor the operational
status of BMDS components and display threat information, such as
missile trajectories and impact points. However, during tests, program
officials discovered three primary risk items that have the potential
to affect C2BMC's performance. Table 7 identifies these risks, the
possible impact on program performance, and the actions being taken to
address each.
Table 7: C2BMC Risk Areas:
Program risks: Track association from multiple new Block 2004 sensors;
Impact of risk: Significant risk[A]: If the sensor tracks are
unidentified, the situational awareness displays are degraded by
overstating or understating the number of lethal objects impacting in a
certain region;
Corrective actions:
* Implemented improvements to algorithms to handle new Block 2004
sensors--initial testing results are meeting requirements;
* Continue to participate in and analyze results of various live and
simulated tests with the other MDA elements.
Program risks: High-availability communications network equipment
design;
Impact of risk: Extensive risk[B]: If high-availability design does not
function properly, the reliability of the second set of communications
network equipment at each controlling command and regional gateway is
degraded;
Corrective actions:
* First network nodes have been upgraded with high-availability system--
nodes have been tested and are operating as designed.
Program risks: Integration of new Block 2004 interfaces (Ground-based
Midcourse Fire Control and FBX-T);
Impact of risk: Significant risk: If C2BMC cannot transmit or receive
messages from GFC and FBX-T, then ability to control FBX-T radar,
forward track messages from FBX-T to GFC, and display GFC sensor track
data, engagement data, and health and status data is degraded;
Corrective actions:
* Developed interface documents to allocate functionality, define work,
and clearly articulate interfaces;
* Holding weekly technical interchange meetings to identify and resolve
issues;
* Completed pair-wise testing, as well as integration testing to
identify and resolve problems quickly.
Source: MDA (data); GAO (analysis).
[A] Significant risk: can meet requirements with about a month's time
or cost to develop work-arounds or alternatives.
[B] Extensive risk: severe issues and items that cause program
officials to be unable to meet requirements without about a quarter of
a year 's time or cost to develop alternatives.
[End of table]
Terminal High Altitude Area Defense:
The THAAD element is being developed as a mobile, ground-based missile
defense system to protect forward-deployed military forces, population
centers, and civilian assets from short-and medium-range ballistic
missile attacks. A THAAD unit consists of a THAAD fire control
component for controlling and executing a defensive mission, truck-
mounted launchers, ground-based radars, interceptor missiles, and
ground support equipment. The THAAD missile is composed of a kill
vehicle mounted atop a single-stage booster and is designed to destroy
enemy warheads through hit-to-kill collisions.
Assessment of Element Progress:
The THAAD program is not expected to deliver an initial capability
until 2009, when a fire unit and 24 missiles will be handed over to the
Army for concurrent test and operation. Fiscal year 2005 activities
focused on developing and ground-testing THAAD components in
preparation for the initiation of THAAD's flight test program. While
several of these preparatory activities were completed on schedule,
others were deferred, causing a further delay in the flight test
program. According to program officials, unanticipated missile
integration issues caused the delay.
Integration Problems Delay Flight Tests:
During fiscal year 2005, the THAAD program accomplished several key
activities in preparation for flight tests, but flight tests began
later in the block than planned. Program officials successfully
integrated software upgrades into the launcher and radar and completed
missile qualification tests that lead to flight readiness
certification. However, a flight test delay that we reported last year
has lengthened. [Footnote 25] Two explosions in the summer of 2003 at a
subcontractor's propellant mixing facility delayed the start of flight
testing from December 2004 to March 2005 and led to revisions of the
program's flight test plan. However, because of unanticipated
integration issues, the first flight test, which validated missile
performance in a high endoatmospheric flight environment, was further
delayed from March to November 2005.[Footnote 26] The delay occurred
because program officials found problems with THAAD's Laser Initiated
Ordnance System and its telemetry system during ground tests and
assembly operations.[Footnote 27] The discovery of these problems
delayed other ground tests and the assembly of the THAAD missile being
manufactured for the first THAAD flight test.
Tests identified two problems in the Laser Initiated Ordnance System. A
design issue caused one subcomponent to fail during testing, delaying
the Laser Initiated Ordnance System's qualification test. Also, during
assembly operations, the program identified a change in the Laser
Initiated Ordnance System's power output that required the program to
improve the design robustness of a fiber optic cable assembly.
Additional qualification testing was then required to obtain range
safety approval. Both of these problems, which were discovered during
ground and qualification tests, were solved, but not before they
affected the flight test schedule.
The program also identified a problem with the missile's telemetry
system, which transmits flight test data to ground stations for
observation during testing. During integration testing, transmission
errors occurred between the missile's telemetry system and the ground
test station. Program officials told us that a solution was found that
eliminated transmission errors in the first flight test. However, the
telemetry system is not providing as much information as wanted in one
mode of operation. According to the officials, this does not present a
problem until flight test 3, which is scheduled for July 2006, and a
solution is expected by that time.
The THAAD program also had to address a number of range safety
requirements prior to the initiation of flight testing. In September,
the officials told us that they had addressed all requirements related
to the first flight test, which did not involve an intercept attempt,
and the majority of the requirements related to the second flight test.
Officials do not expect any range safety requirements to delay future
flight tests.
THAAD program officials plan to conduct 14 more flight tests between
April 2006 and December 2008. To complete these tests prior to handing
the first THAAD fire unit over to the Army for concurrent operation and
tests in 2009, the program will have to successfully conduct as many as
5 flight tests in each fiscal year. Program officials told us that if
all tests are successful, they can meet this schedule. However, a
failure will cause delays.
THAAD's Performance Remains Uncertain:
THAAD's performance and effectiveness remain uncertain until the
program conducts flight tests with updated hardware and software. Data
from flight testing are needed to anchor simulations of THAAD's
performance and to more confidently predict the element's
effectiveness.
Airborne Laser:
The 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's rocket motors are thrusting. The concept
involves the coordinated operation of a high-energy laser and a beam
control system that focuses the laser on a target missile. By rupturing
the missile's fuel or oxidizer tank, the laser causes the missile to
lose thrust or flight control, and the missile cannot reach its
intended target.
The ABL element consists of three major components integrated onboard a
highly modified Boeing 747 aircraft--a high-energy chemical oxygen-
iodine laser; a beam control/fire control component to focus the
laser's energy on a targeted spot of the enemy missile; and a battle
management/command control, computers, communications, and intelligence
component to plan and execute the element's defensive engagements. In
addition, the element includes ground support infrastructure for
storing, mixing, and handling chemicals used in the laser.
Most Fiscal Year 2005 Activities Completed on Schedule:
Commensurate with its fiscal year 2004 restructuring effort, the ABL
program continued to focus on near-term milestones. By accomplishing
its near-term goals, the program expects to increase confidence in its
longer-term program objectives of demonstrating ABL's lethality against
a short-range ballistic missile target.[Footnote 28] During fiscal year
2005, the program focused its efforts on testing ABL's Beam
Control/Fire Control and its high-energy laser. Nearly all activities
related to these milestones were completed on schedule. Program
officials noted that the program's progress over the past 18 months
caused Congress to appropriate an additional $7 million for ABL's
fiscal year 2006 budget.
Both First Flight and First Light--the first major milestones of the
restructured program--were achieved during the first quarter of fiscal
year 2005.[Footnote 29] First Flight was the first of a series of
planned flight tests with the Beam Control/Fire Control segment. The
test demonstrated that all necessary design, safety, and verification
activities to ensure flight worthiness had been completed. It also
began the process of expanding the flight envelope--types and
combinations of flight conditions--in which ABL can operate. The
program also completed scheduled activities associated with a series of
Beam Control/Fire Control low-power passive flight tests.[Footnote 30]
The program is currently integrating the full Beam Control/Fire Control
with the Beacon Illuminator Laser, which helps mitigate the effects of
the atmosphere on the laser beam's quality and with the Tracking
Illuminator Laser, which helps focus the laser beam on its target. Once
integration is complete, the program plans to conduct a series of
active flight tests planned for summer 2006.[Footnote 31]
First Light, which integrated six individual laser modules to
demonstrate that the combined modules can produce a single beam of
laser energy, was completed in November 2004. Further tests to extend
the duration of the laser's operation were scheduled for completion in
September 2005. However, the tests were not completed until fiscal year
2006.
The program plans to conduct its lethality demonstration--a flight test
in which the ABL aircraft will attempt to shoot down a short-range
ballistic missile--no earlier than 2008. If this test is successful,
MDA believes it will prove the concept of using directed energy for
missile defense.
Program Moves Forward with Testing:
As previously noted, the ABL's fiscal year 2005 test program was
centered on its Beam Control/Fire Control passive flight test series
and its high-energy laser ground tests. The flight test series included
28 tests that enabled the program to:
* demonstrate the performance of the aircraft's turret, laser optics,
and initial integration of Beam Control/Fire Control software;
* verify the structural performance of the Active Ranger System--a
system that helps ABL predict a missile's launch point;
* complete flights under various combinations of flight conditions;
* collect data critical for readying the aircraft for laser
installation; and:
* demonstrate the performance of Link-16--a communications component
that ABL uses to interact with other elements of the BMDS.
The demonstration of First Light proved that individual laser modules,
which have the fit and function needed to be placed on the aircraft,
could be successfully integrated to produce a single laser beam for a
fraction of a second. The program planned a series of tests during
fiscal year 2005 that would gradually increase the length and power of
the laser's operation. However, problems encountered during testing
limited the duration of lasing to less than 1 second and affected the
program's ability to determine the laser's maximum power output.
Program officials told us that two of the laser's individual laser
modules experienced alignment issues that prompted the system to shut
down prior to completing extended lase times. The alignment problem was
rectified and the program was able to conduct additional tests at
longer durations. Over the fiscal year, the program operated the high-
energy laser 51 times for a total of 23.5 seconds, with the longest
duration being 5.25 seconds. On December 6, 2005, the program conducted
a longer-duration test of the high-energy laser and was able to sustain
the beam for more than 10 seconds. The ABL also produced approximately
83 percent of its design power.
Although the ABL has not reached 100 percent of its design power,
program officials told us that the 83 percent power is sufficient to
achieve 95 percent of maximum lethal range against all classes of
ballistic missiles. Prior to the longer-duration test, program
officials told us that the laser would not be installed on the aircraft
until it produced 100 percent of its specified power. However, on
December 9, 2005, the Director, MDA, gave the program permission to
disassemble the System Integration Laboratory and begin installation of
the laser on the aircraft. Program officials said that the program will
continue to test the laser when the aircraft is on the ground in an
effort to demonstrate that the laser can produce 100 percent of its
design power.
Jitter Continues to Threaten ABL Performance:
The program continues to characterize jitter as a risk to the ABL
system's overall performance. Jitter is a phenomenon pertaining to the
technology of controlling and stabilizing the high-energy laser beam so
that vibration unique to the aircraft does not degrade the laser's aim
point. Jitter control is crucial to the operation of the laser because
the laser beam must be stable enough to focus sufficient energy on a
fixed spot of the target missile to rupture its fuel or oxidizer tank.
Program officials told us that they will not be fully confident that
jitter can be controlled until it is demonstrated in an operational
environment during the lethality demonstration, but data on the two
major components that cause jitter were collected in ABL's System
Integration Laboratory. These data were fed into simulations and models
that help the program understand the effects of jitter and how
components can be designed to reduce jitter. According to program
officials, data obtained during recent laser and flight tests increased
the program's understanding of the phenomenon.
Kinetic Energy Interceptor:
The KEI element is being designed as a mobile, multi-use land-based
system designed to destroy medium, intermediate, and intercontinental
ballistic missiles during boost and all midcourse phases of flight. MDA
originally planned to develop KEI to defeat threat missiles during the
boost phase of their flight. However, in 2005 MDA directed the KEI
program to incorporate the capability to engage missiles during both
the ascent and the descent portions of the midcourse phase of flight,
as well as the boost phase.
The KEI program is currently focused on developing a mobile, land-based
system that according to program officials is expected to be available
in the Block 2014 time frame. The land-based system will be a
deployable unit consisting of a fire control and communications unit,
mobile launchers, and interceptors. The KEI element has no sensor
component, such as radars, for detecting and tracking boosting
missiles. Instead, it will rely on external ballistic missile defense
system sensors, such as space-based infrared sensors and forward-
deployed radars.
A sea-based capability is planned in subsequent blocks. Preliminary
work will also begin on a space-based interceptor in fiscal year 2008.
If MDA should decide to go forward with a space-based interceptor, it
would not be deployed until the next decade.
KEI Progresses Slowly:
Although the KEI program completed many planned activities on schedule,
the program continued to progress slower than anticipated. KEI
officials were forced to replan several activities and reduce the scope
of others after both Congress and MDA reduced program funding.
The activities completed during the fiscal year included constructing a
shelter to house prototype fire control and communications equipment
and conducting several demonstrations. According to program officials,
the demonstrations showed the prototype equipment could collect data
from overhead nonimaging infrared satellites in a time frame that would
make a boost phase intercept possible. In addition, the program
completed studies that allowed it to optimize the design of
communications equipment that uplinks information from KEI's fire
control and communications component to its interceptor so that there
is a decreased likelihood that communications will be jammed. The
studies also allowed the program to optimize the equipment's design to
operate in a nuclear environment.
Other activities scheduled to be completed during fiscal year 2004 were
deferred into fiscal year 2005 and have now been further delayed. For
example, the System Requirements Review, which documents mission
objectives, identifies critical components, and establishes a program
plan, was delayed from fiscal year 2004 to 2005 and then to fiscal year
2007. Program officials noted that funding shortfalls also forced the
program to eliminate some of its initial risk reduction activities. For
instance, the program originally planned to develop a two-color seeker,
which would aid in plume-to-hardbody handover.[Footnote 32] However,
because of a reduced program budget, program officials now plan to take
advantage of the Aegis Ballistic Missile Defense program's development
of a two-color seeker and to work on a KEI-specific two-color seeker
later in the program.
NFIRE Management Transferred To STSS:
In fiscal year 2005, the KEI program office planned to continue work on
its Near Field Infrared Experiment (NFIRE), an experimental satellite
that will collect infrared imagery of boosting intercontinental
ballistic missiles. In 2004, the KEI program office signed a memorandum
of agreement and transitioned day-to-day management and execution of
NFIRE to the Space Tracking and Surveillance System program. The STSS
Program Office has experience with satellite development and can
leverage its resources to manage the experiment. STSS expects to launch
NFIRE in September 2006, the launch date established by the KEI Program
Office.
Too Early to Assess KEI's Performance:
At this early stage of element development, data are not available to
evaluate element performance. However, the program office identified
areas of high risk that could affect performance.[Footnote 33] The
interceptor's booster motors, which demand high performance for KEI
engagements, and the algorithm enabling the kill vehicle to identify a
target missile's body from its luminous exhaust plume, are high-risk
technologies. Initially, program officials were focused on designing
KEI and maturing these technologies concurrently. However, the program
has adopted an approach that lets it proceed with less risk. KEI is now
focused on maturing the high-risk technologies before integrating them
into the land-based capability.
Contract Extended despite Uncertain Future:
In 2008, KEI is scheduled to participate in its first booster flight
test. According to program officials, at that time a decision will be
made on the program's future. In spite of program uncertainties,
program officials are working to extend the prime contract. Currently,
KEI's contract, which was awarded in December 2003, has a term that
extends through January 2012 (98 months). Program officials are now
working to extend this period until September 2015 (143 months).
Space Tracking and Surveillance System:
MDA is developing STSS as a space-based sensor element of the BMDS. It
is currently working on the first increment of STSS, which is focused
on the preparation and launch of two technology demonstration
satellites partially built under the former Space-Based Infrared System-
Low (SBIRS-Low) program.[Footnote 34] Each satellite making up the
program's "space segment" includes a space vehicle and a payload of two
infrared sensors--an acquisition sensor to watch for the bright plumes
(hot exhaust gas) of boosting missiles, and a tracking sensor to follow
the missile through midcourse and reentry. The STSS element also has
supporting ground infrastructure, known as the ground segment, which
includes a ground station and mission software to support the
processing and communication of data from the satellites to the BMDS.
MDA plans to launch these satellites in 2007, in tandem, in an effort
to assess how well they perform surveillance and tracking 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. The first operational constellation of
satellites is expected to be available in the 2012 time frame.
Progress on Demonstration Satellites Slows:
The STSS program accomplished many of the activities planned for
completion in fiscal year 2005. Both spacecraft buses have been
integrated and tested, the first of two ground software builds has
successfully completed acceptance testing, and the second software
build is progressing on schedule. However, one key activity, delivering
the payload for the first satellite, was delayed because of problems in
testing of the payload. By contract, the payload for the first
satellite was supposed to be delivered in January 2005, but delivery
has been delayed twice, with the last delaying delivery until early
2006. The delays are affecting scheduled work on the second satellite's
payload, potentially delaying the satellites' launch date.
During our last assessment of STSS, the program office expected the
satellites to be launched in February 2007, earlier than the contract
date of July 2007. However, the more recent problems and delays may
result in the launch being later than February 2007, but still before
the required launch date of July 2007. The program office is so
confident that it will launch on time that it has placed an order
through the National Aeronautics and Space Administration (NASA) for
the Delta II launch vehicle, with a requested launch date during the
second quarter of fiscal year 2007.
Vacuum Tests Delay Delivery of Payload:
The first satellite payload is being delayed because problems occurred
during thermal vacuum testing. Hardware issues emerged when the payload
was tested in a vacuum and at cold temperatures for the first time.
Although the significance of the problems is not yet clear, repairs
will have to be made. The program office and contractors plan to make
the repairs and then decide if further testing is needed to ensure that
all problems have been corrected. Several options for testing the
payload are being considered. They include (1) retesting the payload in
the thermal vacuum chamber without making repairs; (2) taking the
payload out of the chamber, completing the repairs, and then retesting;
(3) taking the payload out of the chamber and conducting tests at
ambient (room) temperatures; or (4) shipping the payload as is to the
prime contractor for retest at the contractor's facility. However, if
the program decides to return the payload to the contractor's facility,
the contractor could not test as specifically as could be done in the
vacuum chamber, making it challenging to isolate problems. If further
testing is completed before returning the payload to the prime
contractor, several weeks will be added to the schedule because the
payload will have to be removed from the vacuum chamber, disassembled,
repaired, reassembled, and placed back in the chamber. The chamber will
then have to be returned to the right vacuum and temperature conditions
and the payload retested.
The program office is having an independent team review the situation
with the first payload to determine how much more testing should be
conducted. The program manager does not believe any of the thermal
vacuum testing problems are mission assurance or performance issues.
In addition to the thermal vacuum issues, integration issues have been
discovered as the subcontractor continues to integrate and test the
payload at successively higher levels of integration. The payload
ambient-level testing took nearly 3 months longer than expected to
complete. This was due to the large number of software and hardware
integration issues discovered when the flight hardware and software
were tested together for the first time. Most software issues are due
to the configuration differences between the pathfinder hardware that
served as the test bed for the payload software and the actual flight
hardware.
Program Continues to Address Quality Problems:
The quality and workmanship problems with the payload subcontractor
have continued to persist. These problems have been ongoing for the
last 2 years and have contributed to a schedule delay in delivering the
payload. According to program officials, the quality and workmanship
problems are the result of the subcontractor's lack of experience.
Examples of the quality and workmanship issues include the initial
failure of the second satellite's track sensor during vibration
testing. The failure occurred because fasteners were not tightened
according to specifications and because payload cables were poorly
manufactured by a third-tier vendor. Although neither of these issues
resulted in damage to the flight hardware, both have taken substantial
management attention and considerable effort to correct. In response to
the quality and workmanship issues, quality control at the
subcontractor's site has undergone significant restructuring. In
addition, the prime contractor's on-site quality organization at the
subcontractor's site stepped up its inspection and supervision of all
processes and is providing mentoring. A reeducation effort was also
undertaken to ensure that all personnel on the program knew and
understood the program instructions.
The program office expects that the quality improvements the payload
subcontractor has implemented will reduce the probability of additional
quality-related issues in the future. According to the program office,
the integration issues that have been discovered are not unusual for a
first-time integration effort, but are taking more time than planned to
work through. However, the second satellite's hardware is consistently
moving through integration and testing much more efficiently than the
first satellite's hardware.
[End of section]
Appendix III: An Assessment of BMDS Prime Contractors' Cost and
Schedule Performance:
Prime contractors typically receive most of the funds that MDA requests
from Congress each fiscal year to develop elements of the BMDS. To
determine if it is receiving a dollar of value for each dollar it
spends, each BMDS program office requires its prime contractor to
provide monthly reports detailing cost and schedule performance. In
these reports, which are known as Contract Performance Reports (CPR),
the prime contractor makes comparisons that inform the program as to
whether the contractor is completing work at the cost budgeted and
whether the work scheduled is being completed on time.[Footnote 35] If
the contractor does not spend all funds budgeted or completes more work
than planned, the CPR shows positive cost and/or schedule variances.
Similarly, if the contractor spends more than planned or cannot
complete all of the work scheduled, the CPR shows negative cost and/or
schedule variances. Using data from the CPR, a program manager can
assess trends in cost and schedule performance, information that is
useful because trends tend to persist. Studies have shown that once a
contract is 15 percent complete, performance metrics are indicative of
the contract's final outcome.
We used CPR data to assess the fiscal year 2005 cost and schedule
performance of prime contractors for seven BMDS elements. When
possible, we also predicted the likely cost of each prime contract at
completion. Our predictions of final contract cost are based on the
assumption that the contractor will continue to perform in the future
as it has in the past. An assessment of each element is provided in
this appendix.
Aegis BMD Contractors Deliver Good Performance:
The Aegis BMD program has a prime contract for each of its two major
components--the Aegis BMD Weapon System and the Standard Missile-3.
During fiscal year 2005, both contractors completed most of their
planned activities on time and at or less than budgeted costs. Based on
the weapon system contractor's performance through fiscal year 2005,
the contractor could underrun the budgeted cost of the contract by
about $7.1 million to $12.5 million, while the SM-3 contractor could
underrun its budgeted costs for the contract by about $11.5 million to
$17.8 million.
Aegis BMD Weapon System Contractor Mostly on Track:
Weapon System CPRs show that the contractor underran its budgeted costs
for the prime contract and was able to complete all of its planned work
on schedule. The weapon system contract's cumulative cost and schedule
variances--variances that take into account all work completed on the
contract since its award--are highlighted in figure 2.
Figure 2: Aegis BMD Weapon System Fiscal Year 2005 Cost and Schedule
Performance:
[See PDF for image]
[End of figure]
According to program officials, the minimal schedule variance during
the fiscal year was driven by ship availability and changing test event
schedules. Additionally, the contractor incurred a $6 million positive
cost variance as a result of underruns for Block 2004 and Block 2006
efforts. In September 2005, work tasks were replanned for the Block
2004 completion effort to reflect funding impacts.
Standard Missile-3 Contractor's Cost Performance Is Mostly Good:
The prime contractor for the SM-3 missile component performed within
its budgeted costs, but was slightly behind schedule. By the end of
fiscal year 2005, the contractor reported a positive cost variance of
$10.9 million and a negative schedule variance of $9.6 million. Figure
3 illustrates the cumulative cost and schedule performance for the SM-
3 prime contractor.
Figure 3: Standard Missile 3 Fiscal Year 2005 Cost and Schedule
Performance:
[See PDF for image]
[End of figure]
Our analysis of CPR data shows that the contractor spent less than
budgeted because it did not need all staff originally planned to
conduct test events; these events were delayed because of ship
availability and fleet priorities. Program officials told us that the
tests were rescheduled when the contractor was unable to meet the
planned test dates. The funds budgeted for these tests will be used to
conduct the tests at the rescheduled dates.
The delayed test events also caused the contractor to fall slightly
behind schedule. In addition, the contractor could not complete some
planned work because hardware deliveries were late, delaying related
integration activities. Despite these delays, the program asserts that
the contractor has met most of its contractual delivery dates thus far,
and the program expects the contractor to meet future delivery
obligations.
Despite Restructure, ABL Contractor Experiences Cost and Schedule
Growth:
Our analysis of ABL CPRs indicates that the prime contractor's cost and
schedule performance declined during fiscal year 2005 despite the
program's restructuring efforts in the spring of 2004. The program
restructured the contract to give the contractor a more realistic
budget and schedule to do work that is needed to get ready for and
complete a lethality demonstration of the ABL element. Despite these
adjustments, the contractor was unable to complete fiscal year 2005
activities within budget or on schedule. As illustrated in figure 4,
the ABL contractor incurred a negative cost variance of $23.1 million
and a negative schedule variance of $23.6 million during fiscal year
2005.
Figure 4: Airborne Laser Fiscal Year 2005 Cost and Schedule
Performance:
[See PDF for image]
Note: As agreed to by both the contractor and the ABL System Program
Office, August 2005 CPR data included actual costs only. Therefore, the
data point for August 2005 is not included.
[End of figure]
The program planned to complete two major activities during fiscal year
2005--passive flight tests of ABL's Beam Control/Fire Control component
and duration tests of the system's high-energy laser. [Footnote 36]
However, technical challenges associated with these activities
increased costs and delayed scheduled work. Changes had to be made to
Beam Control/Fire Control software, and additional work was needed on
the Beam Control/Fire Control Hard Wire Abort System to support test
activities. In addition, the program also reprioritized activities
throughout the program. Furthermore, the contractor informed the ABL
program office that negative cost variances caused by technical
problems related to the element's Active Ranger System and Beacon
Illuminator Laser components cannot be recovered.[Footnote 37] These
problems and their potential impact on the program are outlined in
table 8.
Table 8: Airborne Laser Technical Issues and Their Potential Impact on
Program:
Component: Active Ranger System (ARS);
Technical issue:
* Laser range receiver cannot consistently perform as expected;
* Contaminated, damaged, and inefficient optics must be redesigned and
replaced;
* The ARS does not meet all design requirements;
Potential impact:
* Schedule delays--the program currently anticipates that the ARS will
not be delivered until after ABL's lethal demonstration, which is
scheduled to be completed no earlier than 2008. According to program
officials, the ARS is not required for lethal demonstration;
* Decrease in expected performance--without the ARS, the ABL has
reduced ability to estimate missile launch and impact points. ABL's
ability to respond to simultaneous missiles may also be reduced.
Component: Beacon Illuminator Laser;
Technical issue:
* Rapid prototyping led to numerous faults in power supplies;
Potential impact:
* Delays in completing performance testing of the component.
Source: MDA.
[End of table]
According to program officials, the late delivery of the Active Ranger
System will not affect ABL's planned 2008 lethality demonstration
because the test will not require ABL to estimate the target missile's
launch or impact point. Neither will the test include more than one
target. However, the delay could affect the contract's schedule and
cost because planned work related to the Active Ranger System may not
be completed and the cost of unplanned work needed to resolve the
technical problems was not included in the contractor's budget.
Despite program challenges, program officials noted that the contractor
still believes it can complete the contract within the current contract
ceiling. However, based on our analysis of the program's fiscal year
2005 performance, we estimate a contract overrun of between $43.8
million and $231.7 million.
Lack of Reporting Limits Knowledge of C2BMC Contractor's Performance:
Our analysis of the performance of the contractor developing the C2BMC
element was limited because the program did not deliver CPRs for 6
months during fiscal year 2005. Program officials cited the dynamics of
the program as the primary reason for the suspension. In 2004, the
C2BMC program office directed the contractor to add requirements to
integrate a Forward-Based X-band--Transportable radar into the
program's architecture, adjust its schedule to absorb funding
reductions, and make several high-priority engineering changes. The
contractor was unable to update its work plan and realign its budget
quickly enough to reflect these changes. Without changes, CPRs would
have compared the work under way with an outdated schedule and budget
and would not have reflected the contractor's true performance. The
contractor completed all activities needed to replan its work in May
2005 and began to deliver CPRs in June 2005. By the close of fiscal
year 2005, the contractor reported that it was performing work within
budget and slightly behind schedule. The cumulative cost and schedule
variances for the contract were approximately positive $1.7 million and
negative $0.9 million, respectively. Our analysis shows that based on
its performance so far, the contractor should be able to complete all
scheduled contract work within the contract's negotiated cost.
GMD Contractor's Performance Continues to Decline:
The GMD prime contractor's cost and schedule performance continued to
erode during fiscal year 2005. By September 2005, the cumulative cost
of all work completed was $713 million more than expected, and the
contractor had incurred a cumulative negative schedule variance of $228
million. In fiscal year 2005 alone, work cost about $365 million more
than budgeted. Furthermore, CPRs show that the contractor incurred a
negative schedule variance of approximately $39 million during the
fiscal year. However, officials in MDA's Office of Business Management
told us that the schedule variance does not capture some work planned
for fiscal year 2005 that was deferred. The officials said that if the
contractor deferred fiscal year 2005 work to another fiscal year before
the work was begun, the CPR would not show that the contractor was
behind schedule in completing that work.
Judging from the contractor's cost and schedule performance in fiscal
year 2005, we estimate that at the contract's completion, the
contractor will have overrun the budgeted cost of the contract by
between $1.0 billion and $1.4 billion. Figure 5 shows the unfavorable
trend in GMD fiscal year 2005 performance.
Figure 5: Ground-based Midcourse Defense Fiscal Year 2005 Cost and
Schedule Performance:
[See PDF for image]
[End of figure]
Developmental issues with the interceptor continue to be the leading
contributor to cost overruns and schedule slips for the GMD program.
Interceptor-related work cost $240 million more than budgeted in fiscal
year 2005, with the kill vehicle accounting for more than 42 percent of
this overrun. Poor quality control has led to a number of technical
problems with the kill vehicle--such as foreign object debris in wiring
harnesses and leaks in thermal batteries--that have increased manpower
and rework costs. Additionally, the contractor for the BV+ booster
incurred increased costs as a result of inefficiencies related to its
transition to a new supplier. New requirements and redesign efforts
related to the BV+ booster also contributed to the prime contractor's
negative cost performance.
The program's schedule variance grew as flight and ground tests were
delayed. During fiscal year 2005, several flight tests were deferred
after the interceptors in two flight tests failed to launch. The GMD
program has restructured its test plan, and the first flight test was
successfully conducted in December 2005. Program officials noted that
the contractor expects to reduce its schedule variance in fiscal year
2006. However, the program's negative performance forced the program to
restructure its future work efforts and extend its prime contract by 1
year.
Kinetic Energy Interceptors:
In March 2005, we reported that plans to restructure the KEI contract
prompted program office officials to suspend CPRs.[Footnote 38] The
contract has since been restructured, and the contractor began
delivering CPRs in March 2005. As of September 2005, the KEI prime
contractor had completed approximately 4 percent of its planned work
and was performing within its budgeted costs, but slightly behind
schedule. The program incurred a positive cost variance of $3.0 million
and a negative schedule variance of $3.9 million during the fiscal
year. Because the contractor has completed a small percentage of the
work required by the contract, the contractor's performance to date
cannot be used to estimate whether the contract can be completed within
its estimated cost.
The KEI program is undergoing several contract modifications to address
additional requirements. In July 2005, the program modified the
contract to require that KEI be capable of intercepting enemy missiles
in the midcourse of their flight. Consequently, the program plans to
extend the prime contract to better align its cost and schedule
objectives with the new work content. Future CPRs will compare the
contractor's performance with the new cost and schedule objectives.
Program officials plan to begin work on the midcourse capability in
fiscal year 2008 and will continue to develop this capability through
the end of the contract, which is expected to be September 2015.
STSS Contractor's Performance Declines:
Our analysis of contractor performance reports shows that the STSS
program continued to experience a decline in contractor performance
during fiscal year 2005. As depicted in figure 6, the contractor
incurred cumulative negative cost and schedule variances of $97 million
and $20 million, respectively. If the contractor's performance
continues to decline, we estimate that at its completion the contract
will exceed budgeted cost by between $248 million and $479 million.
However, program officials noted that more than 90 percent of the
contractor's past performance can be attributed to a subcontractor
whose work will be completed in fiscal year 2006.
Figure 6: Space Tracking and Surveillance System Fiscal Year 2005 Cost
and Schedule Performance:
[See PDF for image]
[End of figure]
Quality issues with the subcontractor were the primary reason that the
STSS prime contractor overran its fiscal year 2005 budget. For example,
poor workmanship caused a satellite's sensor payload to fail a
vibration test because fasteners--designed to hold the sensor steady--
were not tightened according to specifications. Additionally, poor
workmanship at a third-tier vendor led to difficulties in manufacturing
payload cables.
Program officials told us that the prime contractor had to direct
management attention and considerable effort to rectify the effects of
the subcontractor's poor quality control procedures. In addition to
citing quality issues, program officials told us that they continue to
encounter integration-related problems as the program progresses with
testing the payload at successively higher levels of integration.
Program officials noted that the subcontractor has made some
improvements to its quality control program that should minimize future
quality-related problems. For example, the subcontractor instituted an
on-site Quality Assurance Council to develop improvements to the
quality process at all levels of the organization. Additionally,
quality personnel increased the number of inspections and supervision
of all processes to ensure quality control.
Overall Performance of THAAD Contractor Declines:
During fiscal year 2005, the THAAD program incurred cumulative cost
overruns on its prime contract. As of September 2005, the contractor
was overrunning its budgeted costs for the fiscal year by approximately
$19 million, but it was still ahead of schedule. Because the cost
performance of the contractor prior to fiscal year 2005 was positive,
the cumulative overrun through September 2005 was about $15 million.
Figure 7 illustrates the cumulative cost and schedule variances
incurred by the program during the fiscal year. Judging from the
contractor's cost performance to date, we estimate that the contract
could exceed its budgeted cost by about $48 million.
Figure 7: Terminal High Altitude Area Defense Fiscal Year 2005 Cost and
Schedule Performance:
[See PDF for image]
[End of figure]
During fiscal year 2005, the missile component continued to be the lead
cause of the contractor's negative performance. Major factors
contributing to the missile's cost variance include delays in
activating a test facility at the Air Force Research Laboratory,
redesign of faulty valves, performance issues related to vibration and
shock testing, and unplanned hardware fabrication, assembly, and
support costs. Redesign, material growth, and integration issues
related to the missile also contributed to the program's unfavorable
cost performance.
[End of section]
Appendix IV: MDA'S Audit of GMD Interceptor Contractors:
In 2005, MDA's Office of Safety, Quality, and Mission Assurance
conducted audits of the contractor developing the interceptor's
exoatmospheric kill vehicle and the Orbital Boost Vehicle. In its audit
of the EKV contractor, a number of quality control weaknesses were
documented. First, the MDA auditors found evidence that the prime
contractor had not correctly communicated all essential EKV
requirements to its subcontractor and the subcontractor had not
communicated complete and correct requirements to its suppliers. For
example, the prime contractor did not require the EKV contractor to use
space-qualified parts--parts that have been proven to reliably
withstand the harsh environment of space. Similarly, the auditors found
that the subcontractor had not always provided its suppliers with
correct parts, materials, and processes requirements. For example, the
auditors found multiple incidents in which the subcontractor required
one supplier to abide by incorrect or outdated compliance documents.
The audit also identified numerous instances in which the EKV
subcontractor had not exercised good configuration control. In some
cases, drawings did not reflect current changes. In others, assembly
records did not agree with build records. For example, the assembly
record for one component showed that it included a different part from
the one recorded in its build record. In another, the assembly tag
showed that a component was not built in the same configuration shown
in the build record.
Auditors found that the reliability of the EKV's design cannot be
determined and any estimates of its serviceable life are likely
unsupportable. The audit team established that the results from a March
2004 failure modes effects and criticality analysis were not fully used
to influence the design of the EKV and that the contractor has not
planned or performed a reliability demonstration, a maintainability
analysis or demonstration, and does not plan reliability growth
testing. Additionally, major requirements waivers approved on the basis
of a short-term, limited-life mission significantly limit service life
and have not been fully vetted, accepted, and mitigated for longer-term
operational use.
Further, auditors determined that the contractor has no written policy
involving qualification testing and does not require that its EKV
subcontractor follow requirements established by industry, civilian,
and military users of space and launch vehicles. For this reason, tests
of the EKV under thermal vacuum conditions representative of those
found in space are not being conducted. The auditors also identified
numerous issues with EKV shock and vibration testing and found that the
contractor performs no formal qualification or acceptance tests on the
EKV.
Finally, the audit showed that because the contractor's production
processes are immature, the contractor cannot build a consistent and
reliable product. For example, auditors found instances where work
instructions were not followed and a number of deficiencies in the
build books that lay out the plans and processes for manufacturing the
EKV.
Similarly, the auditors found that the contractor producing the Orbital
Boost Vehicle needed to improve quality control processes and adherence
to those processes. According to deficiency reports, the contractor,
did not always, among other things, flow down requirements properly;
practice good configuration management to ensure that the booster met
form, fit, and function requirements; implement effective environmental
stress screening; or have an approved parts, material, and processes
management plan.
[End of section]
Appendix V: Integrated Management Plan:
Event 0 - Block Capability Alternative:
* Block planning process completed:
* Long lead targets, tests and exercises identified:
* Affordability analysis completed:
* Acquisition strategy approved:
* Preliminary block plan approved:
Event 1 - Preliminary block definition:
* Block performance assessments updated:
* Detailed cost estimates/estimates at completions (EAC) available:
* Costs/benefit analysis updated:
* Risks assessed and mitigation programs established:
* Preliminary operational concept and operations architecture drafted:
* Integration test objectives defined:
* Preliminary designs for all elements/components/targets completed:
* Required funding identified for development:
* Integrated master schedule created:
* Preliminary block definition approved:
Event 2 - Final block definition:
* Performance assessments updated:
* Detailed cost estimates/EACs available:
* Risks assessed and mitigation programs updated:
* Military utility characterized and operational concept refined:
* Preliminary integration test plan available:
* Final design for all elements/components/targets completed:
* Funding available for development:
* Integrated master schedule updated:
* Block activation plan available:
* Block definition updated:
Event 3 - First complete development article:
* Detailed cost estimates/EACs available:
* Operational concept defined and operations architecture available:
* Test range and support planning completed:
* Military utility assessment completed:
* First development article/targets built and initial tests completed:
Event 4 - Element/Component development complete:
* Detailed cost estimates/EACs available:
* Block integration test planning completed:
* Element/component/targets development and testing complete:
* Support systems defined:
* Training systems defined:
* Fielding readiness assessed (initial defensive operations):
Event 5 - Interim block integration and capability assessment:
* Detailed cost estimates/EACs available:
* Initial operational characterization completed:
* Interim block capability performance assessment:
* Initial transition planning completed:
Event 6 - Fielding completed:
* Detailed cost estimate/EACs available:
* Transition plans completed and funded:
* Operational characterization and certification completed:
* System/element/component performance assessment completed:
* Support systems planned, budgeted and approved:
* Training systems planned, budgeted and approved:
* Production plans available:
* Updated block definition available:
* Combatant commander and service memorandum of agreements coordinated:
* MDA capability declaration:
Event 7 - Block capability activation:
* Combatant commander planning complete:
* Equipment introduction and checkout:
* Unit level training, qualification, and certification complete:
* Integrated BMDS level training, qualification, and certification
compete:
[End of section]
Appendix VI: Scope and Methodology:
To examine the progress MDA made in fiscal year 2005 toward its Block
2004 goals, we examined the efforts of individual programs that are
developing BMDS elements under the management of MDA, such as the GMD
program. The elements included in our review collectively accounted for
73 percent of MDA's fiscal year 2005 research and development budget
requests. We compared each element's completed activities, test
results, demonstrated performance, and actual cost achieved in fiscal
year 2005 with those planned for fiscal year 2005. In making this
comparison, we examined System Element Reviews, test schedules, test
reports, and MDA briefing charts. To assess each element's progress
toward its cost goals, we reviewed Contract Performance Reports and
Defense Contract Management Agency's analyses of these reports (if
available). We applied established earned value management techniques
to data captured in Contract Performance Reports to determine trends
and used established earned value management formulas to project the
likely costs of prime contracts at completion. We also developed data
collection instruments, which were submitted to MDA and each element
program office, to gather detailed information on completed program
activities, including tests, design reviews, prime contracts, and
estimates of element performance. In addition, we discussed fiscal year
2005 progress with officials in MDA's Business Management Office and
each element program office, as well as the office of DOD's Director,
Operational Test and Evaluation.
To determine whether MDA achieved the quantity, cost, and performance
goals it set for Block 2004 in February 2003, we examined fielding
schedules, System Element Reviews, test reports, budget estimate
submissions, and the U.S. Strategic Command's Military Utility
Assessment. We also held discussions with the Aegis BMD, GMD, and C2BMC
program offices; MDA's Office of Safety, Quality and Assurance; and the
Office of the Director, Operational Test and Evaluation.
We determined the conditions that prevented MDA from achieving its
Block 2004 goals by examining MDA's implementation of its Integrated
Management Plan, the Secretary of Defense 2002 memo establishing the
Ballistic Missile Defense Program, and audits conducted by MDA's Office
of Safety, Quality, and Mission Assurance. We also held discussions
with MDA's Offices of Business Management and Safety, Quality, and
Mission Assurance and the GMD Program Office.
In determining the actions MDA is taking to address problems that
affected the outcome of Block 2004, we reviewed MDA Assurance
Provisions, recommendations of the Mission Return to Flight Task Force,
memorandums of agreement between MDA and the Defense Contract
Management Agency and MDA and the National Aeronautics and Space
Administration, GMD award fee letters, and directives issued by MDA's
Director. We also discussed MDA's plans with members of the Mission
Readiness Task Force and officials in the agency's Office of Safety,
Quality, and Mission Assurance.
To ensure that MDA-generated data used in our assessment are reliable,
we evaluated the agency's management control processes. We discussed
these processes extensively with MDA upper management. In addition, we
confirmed the accuracy of MDA-generated data with multiple sources
within MDA and, when possible, with independent experts. To assess the
validity and reliability of prime contractors' earned value management
systems and reports, we analyzed audit reports prepared by the Defense
Contract Audit Agency. Finally, we assessed MDA's internal accounting
and administrative management controls by reviewing MDA's Federal
Manager's Financial Integrity Report for Fiscal Years 2003, 2004, and
2005.
Our work was performed primarily at MDA headquarters in Arlington,
Virginia. At this location, we met with officials from the Kinetic
Energy Interceptors Program Office; Aegis Ballistic Missile Defense
Program Office; Airborne Laser Program Office; Command, Control, Battle
Management, and Communications Program Office; Business Management
Office; and Office of Safety, Quality, and Mission Assurance. In
addition, we met with officials from the Space Tracking and
Surveillance System Program Office, El Segundo, California; and the
Ground-based Midcourse Defense Program Office and Terminal High
Altitude Area Defense Project Office, Huntsville, Alabama. We also
interviewed officials from the office of the Director, Operational Test
and Evaluation, Arlington, Virginia.
We conducted our review from May 2005 through March 2006 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Paul Francis (202) 512-4841 or FrancisP@gao.gov:
Acknowledgments:
In addition to the individual named above, Barbara Haynes, Assistant
Director, Ivy Hübler, LaTonya Miller, Karen Richey, Adam Vodraska, and
Jonathan Watkins made key contributions to this report.
FOOTNOTES
[1] The BMDS also includes a ninth element, Patriot Advanced Capability-
3 (PAC-3), which has been transferred to the Army for production,
operation, and sustainment. This report does not evaluate PAC-3 because
its initial development is complete and it is now being managed by the
Army. In addition, the report does not separately evaluate the BMDS
Sensors program; but with its assessment of GMD, the report includes an
assessment of MDA's progress in developing and fielding the Forward-
Based X-Band-Transportable (FBX-T) radar, the sensor being developed by
the Sensors Program Office.
[2] The act for 2002 is the National Defense Authorization Act for
Fiscal Year 2002, Pub. L. No. 107-107, section 232. The act for 2005 is
the Ronald W. Reagan National Defense Authorization Act for Fiscal Year
2005, Pub. L. No. 108-375, section 233.
[3] GAO, Missile Defense: Actions Are Needed to Enhance Testing and
Accountability, GAO-04-409 (Washington, D.C.: Apr. 23, 2004); GAO,
Missile Defense: Status of Ballistic Missile Defense Program in 2004,
GAO-05-243 (Washington, D.C.: Mar. 31, 2005).
[4] The Patriot Advanced Capability-3 system, which is managed by the
Army, also provides a capability against short-range ballistic
missiles.
[5] The launch failure was traced back to a quality assurance problem,
which is discussed in more detail later in this report and in appendix
IV.
[6] First Flight was the first of a series of planned flight tests with
the Beam Control/Fire Control segment that demonstrated the completion
of all necessary design, safety, and verification activities to ensure
flight worthiness. It also began the process of expanding the flight
envelope--types and combinations of flight conditions--in which ABL can
operate. First Light refers to the first ground test and demonstration
of the integration of six individual laser modules that produced a
single beam of laser energy. Passive flight tests are conducted without
the use of the Beacon Illuminator Laser (BILL) or the Tracking
Illuminator Laser (TILL). The BILL and TILL are part of the laser beam
control system used to mitigate the effects of the atmosphere on beam
quality and to focus the laser beam on the target. In contrast, active
flight tests include the use of the illuminator lasers.
[7] A thermal vacuum test verifies that the temperature control design
will maintain the spacecraft and all its elements within allowable
flight temperature ranges while operating over the environmental
extremes expected for the mission.
[8] The radome is a domelike shell transparent to radio-frequency
radiation that is used to house a radar antenna.
[9] ABL's Active Ranger System is designed to estimate an enemy
missile's launch and impact point. The Beacon Illuminator Laser
measures atmospheric disturbance so that the high-energy beam can be
shaped, preventing the atmosphere from scattering and weakening the
beam's energy.
[10] The interceptor is composed of a booster that carries an EKV into
space. MDA was developing two sources for boosters. One booster, known
as the BV+, was being produced by Lockheed Martin, and the other by the
Orbital Sciences Corporation (OSC). An explosion at the facility of a
Lockheed Martin subcontractor responsible for producing motors for the
BV+ booster stopped the booster's production until an alternate source
for the motors could be found. The first BV+ booster is expected to be
produced in calendar year 2006.
[11] Although DOD began developing a missile defense capability as
early as 1958, it was not until 1995 that it began development of the
predecessors of the current BMDS elements. DOD launched development of
the Theater Missile Defense system, the predecessor of Aegis BMD, in
1995; National Missile Defense System, GMD's predecessor, in 1996; and
C2BMC in 2002. However, it should be noted that initial versions of
C2BMC build on existing Air Force and GMD fire control software.
[12] Unlike traditional DOD programs, MDA is not developing the BMDS to
meet firm requirements established by the warfighter. Instead, MDA is
using a capabilities-based approach that establishes goals or
objectives that address a threat identified by the range of parameters
within which a threat ballistic missile is likely to operate and that
consider the capability that the U.S. defense industry can
realistically build to address this threat.
[13] The specifics of the performance goals are classified.
[14] GAO, Best Practices: A More Constructive Test Approach Is Key to
Better Weapon System Outcomes, GAO/NSIAD-00-199 (Washington, D.C.: July
31, 2000).
[15] MDA is subject to overall direction and guidance, however, from
the Under Secretary of Defense for Acquisition, Technology, and
Logistics, and the Senior Executive Council, chaired by the Deputy
Secretary of Defense.
[16] For major defense acquisition programs, this executive, known as
the Milestone Decision Authority, is typically the Under Secretary of
Defense for Acquisition, Technology, and Logistics; the component head;
or the component's acquisition executive.
[17] 10 U.S.C. § 2432(b)(2); 10 U.S.C. § 2433(e)(1).
[18] The BMDS as a whole meets the definition of a major acquisition
program and is treated as such. However, MDA does not divide research,
development, test, and evaluation of the BMDS or its elements into the
acquisition phases defined by DOD acquisition regulations, and thus
neither the BMDS nor its elements will enter system development and
demonstration. Accordingly, the baseline required by 10 U.S.C. § 2435
will not be required of the BMDS or its elements until they enter the
formal DOD acquisition cycle (i.e., while being transferred to the
warfighter for production and deployment).
[19] Section 234(e) of the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005 (Pub. L. No. 108-375)
established the requirement for MDA's cost, schedule, and performance
baselines and the reporting of those baselines in the Selected
Acquisition Report.
[20] However, MDA must report any modifications to its cost, schedule,
and performance baselines to the congressional defense committees, with
the rationale for the modification. Pub. L. No. 108-375 § 234(g).
[21] Pub. L. No. 108-375 § 234(f).
[22] Mission-and safety-critical items are those items whose failure
would directly affect system or personnel safety, mission success, or
operational readiness.
[23] The terms "intercontinental ballistic missile" and "long-range
ballistic missile" are used interchangeably. They are, by definition,
ballistic missiles with ranges greater than 5,500 kilometers (3,400
miles).
[24] The C2BMC element includes hardware, such as workstations and
communications equipment.
[25] GAO, Defense Acquisitions: Status of Ballistic Missile Defense
Program in 2004, GAO-05-243 (Washington, D.C.: March 2005).
[26] MDA successfully completed the first THAAD flight test on November
22, 2005.
[27] The Laser Initiated Ordnance System initiates THAAD missile
artillery events such as boost motor ignition, separation, and flight
termination. THAAD's telemetry system transmits flight test data to
ground stations for observation during tests.
[28] In January 2004, MDA restructured the ABL program to focus on near-
term milestones and to improve confidence in longer-term schedule and
cost projections.
[29] "First Light" refers to the first ground test and demonstration of
the integration of six individual laser modules that produced a single
beam of laser energy.
[30] Passive flight tests are conducted without the use of the Beacon
Illuminator Laser (BILL) or the Tracking Illuminator Laser (TILL). The
BILL and TILL are part of the laser-beam control system used to
mitigate the effects of the atmosphere on beam quality and to focus the
laser beam on the target. In contrast, active flight tests include the
use of the illuminator lasers.
[31] Active flight tests include the use of a functioning BILL and
TILL.
[32] "Plume-to-hardbody" handover refers to the identification of the
actual missile from among the plume of hot exhaust gas that obscures
the body of the boosting missile.
[33] "High-risk" means that the program will not meet its objectives
without priority management actions and risk reduction activities.
[34] The two technology demonstration satellites were called the Flight
Demonstration System. The satellites are expected to assume low-earth
orbits at an altitude much less than satellites in geosynchronous
orbit.
[35] In March 2005, DOD directed that CPRs be named Contract
Performance Reports. Formerly, CPRs were known as Cost Performance
Reports.
[36] The Beam Control/Fire Control component's primary function is to
maintain the beam's quality as it travels through the aircraft and into
the atmosphere. Passive flight tests of this component are tests
conducted without ABL lasers that measure atmospheric disturbance and
that track the target.
[37] The Active Ranger System is the laser that sits atop the aircraft
and provides preliminary range and tracking of a target missile. 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.
[38] GAO, Defense Acquisitions: Status of Ballistic Missile Defense
Program in 2004, GAO-05-243 (Washington, D.C.: Mar. 31, 2005).
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