Defense Acquisitions
Status of the Expeditionary Fire Support System Gao ID: GAO-08-331R December 21, 2007The United States Marine Corps and the Special Operations Command determined in 1999 that there was a need for a weapon system that could be carried inside the V-22 Osprey and deployed to support assault operations. The Expeditionary Fire Support System (EFSS), which consists of a vehicle that tows a 120 mm mortar and another vehicle that tows an ammunition trailer, is one of the systems now being developed to meet this need. In June 2005, the Marine Corps approved low-rate initial production of 6 EFSS units--each unit made up of two vehicles, a mortar and ammunition trailer. From May to July 2007, the Marine Corps Operational Test and Evaluation Activity, the independent test agency for the Marines, conducted initial operational testing and evaluation of the EFSS using refurbished developmental prototypes. The program office began receiving the low-rate production mortars in late October 2007 and is now going through the acceptance process. The delivery of the low-rate production vehicles to the government was delayed until mid-November 2007 so that problems identified during the summer 2007 operational test could be fixed. The EFSS full-rate production decision was initially scheduled for September 13, 2007, but has since been delayed.
The EFSS met all of its key performance parameters and 13 of 14 critical requirements during the operational test. The only critical requirement not met was the mortars' maximum rate of fire. The EFSS also experienced several safety, performance and reliability problems during testing, which led the test activity to conclude that the EFSS was operationally effective with limitations and operationally suitable with limitations. Testing identified safety issues, including potential injury to a crew member riding in the ammunition support vehicle's rear seat; performance issues, including how fast the weapon can be fired and moved, and the vehicle's equipment-carrying capacity; and reliability issues, including mechanical failures, such as the inability to sufficiently cool the engine and vehicle-starting problems at altitude. Also, because of delays getting test assets, cold weather testing that was planned for February 2007 was not conducted. Recently, the program office discovered a problem with the primer for the propellant section of the mortar's ammunition. If this problem is not resolved in time, the cold weather testing could be missed again. The Marine Corps is working on a number of design changes to address the safety, performance and reliability problems identified to date. In response to the concerns you expressed to the Marine Corps on September 12, 2007, the Marine Corps delayed the EFSS full-rate production decision until after the safety, performance, and reliability shortfalls are shown to be corrected in testing planned for this winter, which will culminate with follow-on operational testing of production units in early 2008. The Marine Corps also approved additional limited production of six EFSS systems. This plan does not commit the government to any additional purchases, but allows the program office to obligate the fiscal year 2007 funding it had intended to use for full-rate production. According to the program office, the scope of follow-on testing has doubled from the previous plan and the test and evaluation master plan is being revised accordingly. Since the original acquisition program cost and schedule estimate was approved in 2004, costs have increased by $15.5 million and the schedule has been extended by nearly 2 years. According to the program office, the cost growth is because of the additional scope of testing, the costs associated with ensuring the ammunition complies with safety requirements, and changes to the vehicle performance requirements. The program has also experienced major schedule delays because the Marine Corps was optimistic in its belief that using commercial off-the-shelf systems with some modifications could provide a solution to meet the need for an internally transportable system. Greater-than-anticipated design changes, coupled with the recent decisions to conduct additional testing, resulted in the deferral of the EFSS's initial operational capability from June 2006 to spring 2008. Because of the additional developmental work, the Marine Corps assumed more risk on the low-rate initial production option, which was changed from firm fixed price to cost reimbursable. Recently the Marine Corps authorized additional limited production before reaching agreement on the scope and price--an arrangement that can make it more difficult to control costs.
GAO-08-331R, Defense Acquisitions: Status of the Expeditionary Fire Support System
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United States Government Accountability Office:
Washington, DC 20548:
December 21, 2007:
The Honorable Carl Levin:
Chairman:
Committee on Armed Services:
United States Senate:
Subject: Defense Acquisitions: Status of the Expeditionary Fire Support
System:
The United States Marine Corps and the Special Operations Command
determined in 1999 that there was a need for a weapon system that could
be carried inside the V-22 Osprey and deployed to support assault
operations. The Expeditionary Fire Support System (EFSS), which
consists of a vehicle that tows a 120 mm mortar and another vehicle
that tows an ammunition trailer, is one of the systems now being
developed to meet this need.
In June 2005, the Marine Corps approved low-rate initial production of
6 EFSS units--each unit made up of two vehicles, a mortar and
ammunition trailer. From May to July 2007, the Marine Corps Operational
Test and Evaluation Activity, the independent test agency for the
Marines, conducted initial operational testing and evaluation of the
EFSS using refurbished developmental prototypes. The program office
began receiving the low-rate production mortars in late October 2007
and is now going through the acceptance process. The delivery of the
low-rate production vehicles to the government was delayed until mid-
November 2007 so that problems identified during the summer 2007
operational test could be fixed. The EFSS full-rate production decision
was initially scheduled for September 13, 2007, but has since been
delayed.
As you requested, we reviewed the EFSS program and we provided a
briefing to your office on September 12, 2007. This correspondence
summarizes that briefing and incorporates additional information on
program changes made through December 2007. Specifically, we reviewed
(1) whether the EFSS design is meeting its key performance parameters
and other critical requirements, (2) plans to overcome any identified
performance shortfalls, and (3) how the current cost and schedule
estimates compare to those estimated at contract award.
Results In Brief:
The EFSS met all of its key performance parameters and 13 of 14
critical requirements during the operational test. The only critical
requirement not met was the mortars' maximum rate of fire. The EFSS
also experienced several safety, performance and reliability problems
during testing, which led the test activity to conclude that the EFSS
was operationally effective with limitations and operationally suitable
with limitations. Testing identified:
* safety issues, including potential injury to a crew member riding in
the ammunition support vehicle's rear seat;
* performance issues, including how fast the weapon can be fired and
moved, and the vehicle's equipment-carrying capacity; and:
* reliability issues, including mechanical failures, such as the
inability to sufficiently cool the engine and vehicle-starting problems
at altitude.
Also, because of delays getting test assets, because ofcold weather
testing that was planned for February 2007 was not conducted. Recently,
the program office discovered a problem with the primer for the
propellant section of the mortar's ammunition. If this problem is not
resolved in time, the cold weather testing could be missed again.
The Marine Corps is working on a number of design changes to address
the safety, performance and reliability problems identified to date. In
response to the concerns you expressed to the Marine Corps on September
12, 2007, the Marine Corps delayed the EFSS full-rate production
decision until after the safety, performance, and reliability
shortfalls are shown to be corrected in testing planned for this
winter, which will culminate with follow-on operational testing of
production units in early 2008. The Marine Corps also approved
additional limited production of six EFSS systems. This plan does not
commit the government to any additional purchases, but allows the
program office to obligate the fiscal year 2007 funding it had intended
to use for full-rate production. According to the program office, the
scope of follow-on testing has doubled from the previous plan and the
test and evaluation master plan is being revised accordingly.
Since the original acquisition program cost and schedule estimate was
approved in 2004, costs have increased by $15.5 million and the
schedule has been extended by nearly 2 years. According to the program
office, the cost growth is because of the activities planned additional
scope of testing, the costs associated with ensuring the ammunition
complies with safety requirements, and changes to the vehicle
performance requirements. The program has also experienced major
schedule delays because the Marine Corps was optimistic in its belief
that using commercial off-the-shelf systems with some modifications
could provide a solution to meet the need for an internally
transportable system. Greater-than-anticipated design changes, coupled
with the recent decisions to conduct additional testing, resulted in
the deferral of the EFSS's initial operational capability from June
2006 to spring 2008. Because of the additional developmental work, the
Marine Corps assumed more risk on the low-rate initial production
option, which was changed from firm fixed price to cost reimbursable.
Recently the Marine Corps authorized additional limited production
before reaching agreement on the scope and price--an arrangement that
can make it more difficult to control costs.
Background:
The EFSS consists of two prime mover vehicles, a 120-mm mortar, an
ammunition trailer, digitized fire direction equipment (used to orient
the weapon and compute firing data), a basic load of 34 rounds of
ammunition and crew. The EFSS supports Marine operational maneuver from
the sea and requires at least two MV-22 Osprey or two CH-53E sorties to
deploy--one sortie to transport the vehicle and the 120-mm mortar,
[Footnote 1] and another sortie to carry the second vehicle and the
ammunition trailer. A crew of five Marines is also divided between the
two sorties.
During the early stages of the program, the program officials for the
EFSS and for the Internally Transportable Vehicle worked closely to
locate a single vehicle platform to fulfill the needs of both programs.
Both vehicles share the same basic configuration, chassis, suspension,
and the need to fit inside a V-22. The programs proceeded with an
approach using non-developmental items and integrating commercially
available components onto a common chassis. Because of their common
design goals, the Marine Corps consolidated EFSS and the Internally
Transportable Vehicle into a single contract. This allowed the Marine
Corps to take advantage of common contract execution, fewer government
personnel, and mutuality of vehicle design with anticipated subsequent
cost and schedule savings. The Marine Corps also believed that the
combined production of over 600 systems[Footnote 2] would translate to
a lower unit cost, because of economies of scale.
On November 10, 2004, following a competition, the Marines awarded a
$12 million contract[Footnote 3] with a hybrid structure including both
firm fixed price and cost plus award fee line items for both EFSS and
the Internally Transportable Vehicle to one prime contractor, General
Dynamics Ordnance and Tactical Systems. As of November 10, 2004, the
contract price was valued at $296 million. Both programs have separate
line items in the budget, and once fielded, EFSS and the Internally
Transportable Vehicle will be managed as separate programs for the life
cycle of the systems.
In 2007, the EFSS received internal and external flight certification
for both the MV-22 and the CH-53E aircraft. In July 2007, the
operational test for EFSS was completed, and in August 2007 the
production baseline for EFSS was approved. Table 1 lists significant
program events.
Table 1: Major Program Events:
Key events: Milestone B - Program start;
Started: [Empty];
Completed: Nov. 2004.
Key events: Milestone C: Conditional approval for low-rate initial
production;
Started: [Empty];
Completed: June 2005.
Key events: EFSS developmental testing - I;
Started: Mar. 13, 2006;
Completed: Mar. 18, 2006.
Key events: LRIP contract award;
Started: [Empty];
Completed: Sept. 2006.
Key events: EFSS internal flight certification issued;
Started: [Empty];
Completed: May 2007.
Key events: EFSS developmental testing - II;
Started: May 14, 2007;
Completed: May 25, 2007.
Key events: EFSS external flight certification issued;
Started: [Empty];
Completed: June 2007.
Key events: EFSS operational test and evaluation;
Started: May 30, 2007;
Completed: July 11, 2007.
Key events: EFSS production baseline established; production readiness
review completed;
Started: [Empty];
Completed: August 31, 2007.
Key events: Marines approve procurement of 6 production EFSS. This
effort does not commit the government to additional units;
Started: [Empty];
Completed: September 21, 2007.
Key events: EFSS low-rate initial production units delivered;
Started: [Empty];
Completed: October - November 2007.
Key events: EFSS follow-on operational test & evaluation (including
cold weather testing);
Proposed: February 2008; - March 2008.
Key events: Full-rate production;
Proposed: Spring 2008.
Key events: EFSS initial operational capability; Proposed: Spring 2008.
Key events: EFSS full operational capability; Proposed: Fiscal year
2010.
Source: U.S. Marine Corps.
[End of table]
EFSS Meets Most Requirements, but Experienced Safety, Performance and
Reliability Problems:
According to Marine Corps Operational Test and Evaluation officials,
EFSS met all of its tested key performance parameters as well as met 13
of 14 critical requirements, but also experienced several safety,
performance and reliability problems during operational testing. The
Marine Corps Operational Test and Evaluation Activity conducted the
EFSS' initial operational testing and evaluation in three phases
(amphibious, desert, and high altitude) to determine whether the system
is operationally effective and operationally suitable.
The EFSS most critical requirements are expressed in two levels. At the
top are four overarching key performance parameters that are considered
essential for effective military capability. See table 2.
Table 2: Key Performance Parameters:
Key Performance Parameter: Transportability;
Requirement: 110 nautical mile lift internal to CH-53E and MV-22
(threshold=objective).
Key Performance Parameter: Fire Range;
Requirement: Unassisted indirect fire maximum range for standard high
explosive projectile at least 7 km (threshold), 14 km (objective).
Key Performance Parameter: Range Error;
Requirement: Achieve range error probable of 0.6% of range (threshold),
0.3% of range (objective) and a deflection error probable of 0.6% of
range (threshold), 0.1% of range (objective) for high explosive at two-
thirds of maximum range.
Key Performance Parameter: Net Ready;
Requirement: Data system should interface with specified DOD networks.
Source: U.S. Marine Corps.
Note: The threshold value is the minimum acceptable performance
requirement to satisfy a need. The objective value is what is desired
by the user.
[End of table]
The second level of requirements, critical requirements, address
transportability, lethality, and technical fire direction. See table 3,
EFSS critical requirements.
Table 3: Critical Requirements:
Requirement type: Transportability and mobility;
Critical requirement details:
* Unload time of 5 minutes (threshold) and 3 minutes (objective) for
external lift;
* Embarkation time between 10 and 20 minutes (threshold) and between 5
and 10 minutes (objective) for internal lift;
* Debarkation time between 5 and 10 minutes (threshold) and between 3
and 5 minutes (objective) for internal lift;
* Ability to transport the crew, crew personal equipment, section
equipment, and basic load of ammunition (threshold=objective);
* Average off-road speed of 5 mph;
* Average unimproved road speed of 10 mph;
* Transportable by US C-130 aircraft and larger (threshold=objective)
without disassembly or modification;
* Transportable by all US Navy amphibious ships, Military Sealift
Command ships and contracted cargo ships (threshold=objective).
Requirement type: Lethality;
Critical requirement details:
* Capable of firing ordnance of 105mm in diameter or larger
(threshold=objective);
* Capable of firing a variety of specified existing ammunitions types;
* Maximum rate of fire of 4 rounds per minute (threshold), 16 rounds
per minute (objective) for one minute for all specified ammunition
types;
* Sustained rate of fire of 2 rounds per minute (threshold), 6 rounds
per minute (objective) for all ammunition types.
Requirement type: Technical fire direction;
Critical requirement details:
* Capable of determining ballistic solutions (threshold=objective);
* Permit the crew to manually enter/edit all technical fire control
data (threshold=objective).
Source: U.S. Marine Corps.
[End of table]
Of the 14 critical requirements, one was changed after contract award
in 2004. The sustained rate of fire was reduced from four rounds per
minute to two rounds per minute. The program office attributed this
change to a typographical error found in the requirements
documentation. Additional changes were to noncritical requirements
including:
* an increase in the time allowed for some mortar timed events;
* added improved on-road speed of 35 miles per hour; and:
* a decrease in the basic ammunition load from 50 to 100 rounds of
munitions to 34 rounds.[Footnote 4]
Currently, there is no armor requirement for the vehicles, but the
Marines are developing both a permanent and an add-on armor kit that
will enhance survivability.[Footnote 5]
In September 2007, the test activity concluded that the EFSS was
operationally effective with limitations and operationally suitable
with limitations. The system met its vertical-transport, maximum-range,
and accuracy key performance parameters. The test activity determined
that the information-exchange key performance parameter did not require
testing because this communication component had been previously
tested. The system also met 13 of 14 critical requirements. It did not
meet the critical requirement related to maximum rate of fire. The
system also did not meet some noncritical requirements for timed
events, which involve rate of fire, first round response, shift out of
traverse, and emplacement and displacement. Although required times
were achieved on occasion, the preponderance of observed times took
longer than required. In addition, the test activity found that the
EFSS vehicles were capable of carrying all required equipment, but not
securely. Other performance, safety, reliability issues, as well as
mechanical failures were identified, as summarized in table 4.
Table 4: Factors Limiting EFSS Capability:
Performance shortfall: Safety;
Impact on program: Issues related to ammunition trailer and its
inability to be towed safely pose a risk of injury to the crew member
riding in rear seat of vehicle. Three incidents involving the trailer
occurred during the EFSS operational test.
Performance shortfall: Performance;
Impact on program: Measures associated with timed events and the
inability of the vehicle to securely carry all required equipment
impact performance. Also, issues involving the mortar sight's being
difficult for operators to use and problems using the shock mount were
documented.
Performance shortfall: Reliability;
Impact on program: The mortar's mean rounds between operational mission
failure did not meet the threshold. The reliability requirements are
separate for the mortar and the vehicles:
* The transport barrel clamps were not stout enough to prevent the
mortar tube from rotating. This contributed to brake damage on one
mortar during movement;
* Each prime mover vehicle's physical configuration was different. This
prevented the test team from interchanging parts on several occasions.
Performance shortfall: Mechanical failures;
Impact on program:
* The compressor for the air ride system and Central Tire Inflation
System was not robust enough to support all the air powered systems on
the vehicle;
* The cooling system was not able to cool the engine and transmission
sufficiently during operations;
* The vehicles had difficulty starting at altitude.
Performance shortfall: Other issues & test limitations;
Impact on program:
* Due to delays in getting test assets, cold weather testing that was
planned for February 2007 was not conducted;
* Testing was not executed in extreme cold, high humidity, or extreme
heat (up to 125 degrees Fahrenheit ). EFSS was tested at temperatures
of up to 115 degrees.
Source: Marine Corps Operational Test and Evaluation Activity and EFSS
program office.
[End of table]
In addition to the issues identified during operational testing, the
program office recently determined that there is a design issue with
primer for the propellant of the mortar round that could affect the
insensitive munition certification--essentially, the primer in the tail
of the mortar ignites the propellant.[Footnote 6] One aspect of the
insensitive munition testing is a drop test of the mortar to ensure it
does not go off in case the munition is mishandled. The United States
successfully drop tested the round 9.3 feet onto a steel plate while
the mortar was at 125 degrees Fahrenheit. France uses the same mortar
round and tested it at a 9.3 feet drop at 160 degrees Fahrenheit. The
primer ignited the propellant, which burned but the round did not
explode. According to the program office, the design has been changed
and the solution completed retesting for insensitive munition
certification on December 12th, in time to conduct cold weather testing
now scheduled to occur early in 2008. Data analysis of the test results
is ongoing.
In light of the limitations identified during operational testing and
the system's limited armor protection, the Director of the Marine Corps
Operational Test and Evaluation Activity described the EFSS as a
"niche" capability. The system is intended to accompany Marines on foot
and travel cross-country. According to the Director, as long as the
EFSS is used within these strict operating limits, the system can be
used safely. Test activity officials also indicated that EFSS provides
a capability not currently fielded in the operating forces. A Marine
Corps Operational Test and Evaluation official indicated that although
EFSS' limited armor protection will still persist because the system
has to fit in an MV-22, other problemsThe Marine Corps Operational Test
Activity recommended prior to fielding the system, that safety,
performance, and reliability issues should be addressed, that
developmental testing should be completed, and that follow-on
operational test and evaluation, including cold weather testing, should
be conducted.
Full-Rate Production Decision Delayed until Completion of Follow-On
Testing:
In response to the concerns you expressed on September 12, 2007, the
Marine Corps delayed the planned September 13, 2007, EFSS full-rate
production decision until spring 2008. The EFSS program office is now
working to address performance shortfalls by testing fixes in
developmental testing and verifying those fixes in follow-on testing
planned for this winter and spring 2008.
Initially, the program office sought approval to enter into full-rate
production by fielding one EFSS battery out of a production buy of 66
units.[Footnote 7] The program office wanted to field one battery and
get approval for full-rate production based on addressing outstanding
performance, safety, and testing issues. On September 12, 2007, we
briefed your staff that, as initially planned, the full-rate production
decision would be made before the first production quantities had been
delivered or tested, fixes to the problems discovered in operational
testing were proven, and cold weather performance could be tested.
Since our briefing, the Marine Corps approved additional limited
production of six EFSS units to field one artillery battery.[Footnote
8] This plan does not commit the government to any additional
purchases, but allows the program office to obligate the fiscal year
2007 funding it had intended to use for full-rate production. The
Marine Corps plans to address the limitations the test activity
identified by (1) collaborating with the testers and revising the EFSS
Test and Evaluation Master Plan, (2) addressing performance shortfalls,
and (3) conducting follow-on operational testing on production units in
the February-March 2008 time frame. According to Marine Corps
Operational Test and Evaluation Activity officials, they will conduct
the follow-on test (which includes durability and cold weather events).
The Director of the Marine Corps Operational Test and Evaluation
Activity described the plan as an unusual commitment of resources
beyond the initial operational test and evaluation event. He noted that
normally in non-major acquisition programs such as the EFSS program,
the testing activity does not retest and evaluate fixes for
deficiencies it identified during operational testing. Normally, test
activity staff return to verify the program office's fixes once they
are in place. For EFSS, the test activity reached an agreement with the
program office to update the Test and Evaluation Master Plan. This
update includes additional combined developmental and operational
testing followed by the testers verifying that the fixes work during
the follow-on operational test and evaluation event.
According to the program office, the scope of follow-on testing has
doubled from the previous plan. In the area of safety, a roll cage and
an improved trailer tongue, or hitch, are being tested.[Footnote 9] In
addition, the program office is experimenting with different settings
on the brakes, and is lowering the ammunition trailer's tire pressure
to reduce bouncing. Regarding mechanical failure and reliability, the
program office believes it has identified the fixes for all of the
mechanical failures listed in table 4 and made several other design
changes. For example, to address the cooling deficiency, a lower
gearing is used that reduces the load on the engine and consequently
the engine's cooling needs. Overall vehicle weight was reduced and is
better centered. To address the high altitude starting problem, the
existing glow plugs were replaced with a higher temperature glow
plug.[Footnote 10] Also, an intake air heater and controller were added
to pre-heat the intake air in low ambient air temperatures. Changes
were also made to the lower control arm to improve manufacturability.
The lower control-arm design change reduced the number of pieces for
the steel arm from 23 to 15 pieces. This reduces manufacturing time,
labor, and ultimately allows reduced long-term production and life-
cycle costs.
Program Cost Growth and Delays Resulted Primarily from Underestimated
Development Effort:
Since the original acquisition-program cost-and-schedule estimate was
approved in 2004, the cost has increased $15.5 million and the schedule
has been extended by nearly 2 years. The EFSS required more development
than the Marine Corps expected, which resulted in some cost growth, a
significant contract delay, delayed production deliveries, and less
information at decision points.
Cost Increases Related to Program Scope:
The total program cost increased from $675.7 million in 2004 to $691.2
million in 2007 (in fiscal year 2004 dollars). The cost growth of $15.5
million was all in research and development, which increased from $47.5
million to $63.0 million. According to the program office, cost growth
is driven by three factors. First, funding that was added for future
development will instead be used for the cost increase associated with
the increased scope of ongoing developmental testing and follow-on
testing.[Footnote 11] Second, funding was added for the costs
associated with ensuring the ammunition is compliant with "insensitive
munition" requirements that had not been included in the first approved
program baseline. And third, changes made to the performance
capabilities of the vehicles, such as an increase in on-road speed from
10 to 35 miles per hour, required some additional development funding.
The program office is also considering whether to combine the 2009 and
2010 planned procurements of 48 systems into fiscal year 2009 to
achieve economy of scales savings.
According to the program office, each EFSS will cost in the range of
$570,000 to $680,000 in base year 2004 procurement dollars. The
procurement unit cost calculation excludes the engineering, program
management, logistics planning, spares, and cost of 20 years of
ammunition currently projected at $501.7 million to $548.3 million.
However, the program office is concerned that recent unfavorable
exchange rate changes could increase the unit cost of the systems,
driven by the cost of the French-built mortar.
Original Schedule Proved Optimistic:
The program has experienced major schedule delays because the Marine
Corps was optimistic in its belief that using commercial off-the-shelf
systems with some modifications could provide a solution to meet the
need for an internally transportable system. The EFSS program's 2005
risk management plan notes the EFSS schedule is aggressive with little
flexibility to accommodate schedule slips. According to the program
office, the schedule was driven by the first deployment date for the
first equipped Marine Expeditonary Unit aboard the MV-22. Also,
according to the program manager, a compressed development and test
schedule was chosen to help save on ammunition cost (by combining pre-
operational test work up with some training events, thereby using fewer
rounds of ammunition). The program office also thought it could meet
the EFSS requirements by using a mostly commercial-off-the-shelf
system, but meeting the MV-22 transportability key performance
parameter required more development than anticipated.
The ambitiousness of the development schedule was evident when the
Marine Corps made a production decision in June 2005, before the
development scope was fully recognized. [Footnote 12] Partly because of
the additional development scope that had to be negotiated, it took
over a year to exercise the production option. The Marine Corps
exercised the low-rate initial production option in September 2006, and
at the same time the government assumed more development risk because
it changed the option type from firm fixed price as originally awarded
in the contract to cost reimbursable. The selection of contract type is
generally a matter of risk allocation: fixed-price contracts place the
risks associated with performing the contract on the contractor; cost
reimbursement-type contracts place minimal risk on the contractor. The
risk associated with performance shifts between the parties depending
on the type of contract selected. The shift in contract type was done,
according to the program office, because the design remained extremely
uncertain and more developmental work was needed than originally
anticipated.[Footnote 13]
Many changes have had to be incorporated into the design so the system
would meet the MV-22 cabin size and weight restrictions because the
internal MV-22 transportability requirement affects the wheel weight,
vehicle balance, and vehicle dimensions. In addition, the issues that
arose early in development involving the vehicle's axle, hub assembly,
driveshaft, chassis and electrical system have been addressed in
response to an earlier operational assessment on the internally
transportable vehicle program. These design changes were incorporated
into the EFSS development vehicles while they were being delivered to
the government. The program office subsequently used them for
operational testing. Program officials informed us that production
deliveries were delayed partly because the contractor's efforts were
diverted to refurbishing the prototypes for testing. As a result of the
introduction of design changes onto refurbished development vehicles,
the operational test vehicles had different physical configurations.
According to program officials, the first production vehicles were
delivered in mid-November 2007, 4 months after operational testing
ended.
The test schedule also allowed no time to fix problems identified
during EFSS developmental test phase II. This test phase ended about 5
days before operational testing began. There was no time allotted to
analyze development test results and make changes to the systems used
in operational testing, to incorporate solutions into production
representative assets, as is normally done before operational testing.
As a result, operational testing bore more burden of discovery than
normal. The timed events EFSS failed to meet in operational testing
were the same timed events it could not meet in development test phase
II. Ultimately, EFSS's initial operational capability has been delayed
from June 2006 to spring 2008 because of the developmental and
operational test problems. This delay has not decoupled the EFSS
schedule from the first Marine Expeditionary Unit deployment with V-
22s, which is currently projected to take place in the fall of 2008,
because that deployment was delayed.
In light of the decision to delay the full-rate production decision,
the Marine Corps is negotiating a second buy of six EFSS units as a
firm-fixed price option to the original contract. However, until a
final agreement is reached on the scope and price, the program office
exercised an undefinitized option. Exercise of an undefinitized option
authorizes work before reaching agreement on the terms and conditions
for the work. According to the EFSS program manager, because of delays
in the program because of design changes, operational pressure to be
available for the first marine expeditionary unit's deployment using
the V-22, as well as the time needed for the Defense Contract
Management Agency to audit proposed part prices and labor and other
rates, they have gone forward with exercising an undefinitized option.
We have previously reported that undefinitized contracts put the
government at risk because they provide little incentive for the
contractor to control cost until the terms of the work are finalized or
definitized.[Footnote 14] In addition, the government does not have
much bargaining power over the work done during the undefinitized
period. The program office expects to have a definitized option between
December 2007 and January 2008.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Defense and it
chose to provide technical comments, which were incorporated as
appropriate.
Scope and Methodology:
We focused our review efforts on the EFSS program, although it shares
contract solicitation and execution with the Internally Transportable
Vehicle program.
To determine whether the current EFSS met its key performance
parameters and other critical requirements, we first assessed whether
any requirements had changed by comparing the program's requirements
documented in the 2004 Capabilities Development Document with
subsequent revisions; we also reviewed the integrated performance
specification and the requirements traceability matrix. We discussed
identified requirements changes with the EFSS program office--Marine
Corps Systems Command, Product Group 14 (Armor and Fire Support
Systems)--located at Quantico, Va. We also discussed changes in
requirements with a representative from the Marine Corps Combat
Development Command, the organization responsible for establishing the
EFSS requirements. We obtained and analyzed the results of major test
events, including EFSS developmental test phases I and II, ITV
operational assessment, and EFSS operational test. We discussed the
test results with the EFSS tester, the Marine Corps Operational Test &
Evaluation Activity, also located at Quantico, Va. We interviewed the
program office staff, including the program manager and lead engineer
and Marine Corps Operational Test & EvaluationActivity staff, including
the Director and the Fire Support Operational Test Project Officer and
discussed the performance shortfalls documented in the test reports.
To identify the Marine Corps's plans to address performance shortfalls,
we reviewed the plans listed in the proposed acquisition decision
memorandum for the full-rate production decision planned in September
2007. We discussed the program office's plans to address the problems
discovered in developmental and operational testing with program and
test officials. We interviewed program officials and discussed the
advantages and disadvantages of conditionally moving forward with this
decision. After the Marine Corps decided to postpone the EFSS full-rate
production decision, we discussed the impact this delay has on the
overall program and the schedule for testing the planned EFSS fixes as
well as the cold weather testing.
To determine how the current cost and schedule estimate compares to
those estimated at contract award, we reviewed the contract, life-cycle
cost estimates and compared the 2004 approved acquisition program
baseline to the current one. We met with program office officials,
including the contracting officer and his staff, to discuss, and where
possible document, the reasons for any changes in the estimates and
their overall impact on the program. We did not determine the
appropriateness of the change in LRIP option type from firm fixed price
to cost reimburseable, which was exercised in September 2006.
We conducted our review from July 31, 2007 to December 21, 2007, in
accordance with generally accepted government auditing standards.
As agreed with your office, unless you announce its contents earlier,
we will not distribute this report further until 6 days from its date.
At that time, we will send copies to the Secretary of Defense, the
Commandant of the Marine Corps, and interested congressional
committees. We will also make copies available to others upon request.
In addition, the report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov]. If you or your staff have any
questions concerning this report, please contact me at (202) 512-4841.
Key contributors to this assignment are David Best, Bonita Oden, Laura
Holliday, and Greg Campbell.
Signed by:
Paul Francis:
Director:
Acquisition and Sourcing Management:
[End of section]
Footnotes:
[1] This 120 mm mortar's interior is rifled, with a pre-engraved
driving band that imparts rotation to the shell. More than 1000 units
have been produced and have been in service with 24 armed forces in 22
countries, for over 10 years. The EFSS mortar tube can fire both rifled
and smooth bore ammunition. EFSS is using rifled rounds produced by a
French firm.
[2] The ITV acquisition objective increased to approximately 700
vehicles; the EFSS total buy is expected to be 70, including 4
developmental systems.
[3] The indefinite-delivery/indefinite-quantity contract allows for a
certain amount of contract process streamlining. This type of contract
provides for an indefinite quantity of supplies or services during a
fixed period of time. The government places delivery orders (for
supplies) or task orders (for services) against a basic contract for
individual requirements. Minimum and maximum quantity limits are
specified in the basic contract either as number of units or as dollar
values. The Government uses this kind of contract when it cannot
predetermine, above a specified minimum, the precise quantities of
supplies or services that the government will require during the
contract period.
[4] This was included as a concept of employment in the Capabilities
Development Document, stating: "The basic load can be between 50 and
100 rounds of various munitions or a mix of munitions that can be
adequately transported by the EFSS prime and ammunition movers." In
other words, the 50 to 100 EFSS ammunition basic load (per section) was
a concept of employment and not a Marine Corps Combat Development
Command requirement. The basic load of ammunition is now required to be
34 rounds per EFSS.
[5] Congress has provided procurement funding for armor protection.
[6] An insensitive munition is one that will not detonate under any
condition as other than its intended mission to destroy a target.
Section 2389, Title 10 of the U.S. Code provides that the Secretary of
Defense shall ensure, to the extent practicable, that insensitive
munitions under development or procurement are safe throughout
development and fielding when subjected to unplanned stimuli. DOD
Directive 5000.1 (Jan. 2003) states all systems containing energetics
shall comply with insensitive munitions criteria.
[7] An EFSS battery consists of six rifled towed mortars, 12 prime
movers (vehicles), six ammunition trailers, five Battery Support
Vehicles, ammunition suite, and support package.
[8] These systems are in addition to the six low-rate initial
production systems purchased with fiscal year 2006 funding.
[9] The program office extended the trailer hitch to improve trailer
stability and safety.
[10] A glowplug is a heating device used to aid starting diesel
engines.
[11] According to the program manager, they are deferring developmental
efforts that had been added in 2012 and 2013 to improve the digitized
fire direction center equipment and provide it with software digital
capability, upgrade the precision extended range munition, and enhance
the insensitive munition (IM) illumination capability.
[12] According to EFSS program officials, the scheduled was designed to
meet an initial operational capability that coincided with the first
Marine Expeditionary Unit deployment using the MV-22 and help save on
ammunition cost (by combining pre-operational test work up with some
training events; thereby using fewer rounds of ammunition).
[13] The program office uses a hybrid contract structure covering both
EFSS and the Internally Transportable Vehicle and includes logistics
support, systems development, and ammunition as cost plus award fee
lines, production options as firm fixed price lines, and an indefinite
delivery/indefinite quantity line for the Internally Transportable
Vehicles.
[14] GAO, Defense Acquisitions: Success of Advanced SEAL Delivery
System Hinges on Establishing a Sound Contracting Strategy and
Performance Criteria, GAO -07-745, (Washington D.C.: May 24, 2007).
[End of section]
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