Space Acquisitions
Actions Needed to Expand and Sustain Use of Best Practices Gao ID: GAO-07-730T April 19, 2007DOD's space system acquisitions have experienced problems over the past several decades that have driven up costs by hundreds of millions, even billions of dollars, stretched schedules by years, and increased performance risks. DOD has recognized the need to change its approach to developing space systems and is attempting to instill best practices in new efforts. GAO was asked to testify on its findings on space acquisitions problems and steps needed to sustain and expand the use of best practices. In preparing this testimony, GAO relied on its detailed reviews of space programs as well as cross-cutting work on cost estimating and best practices. GAO does not make recommendations in this testimony. However, GAO has made recommendations on steps DOD can take to ensure better outcomes for its space acquisitions programs. These include developing an overall investment strategy for acquisition programs, addressing human capital and other shortfalls in capacity, and revising policies supporting space to incorporate best practices.
The majority of major acquisition programs in DOD's space portfolio have experienced problems during the past two decades that have driven up cost and schedules and increased technical risks. At times, cost growth has come close to or exceeded 100-percent, causing DOD to nearly double its investment in the face of technical and other problems without realizing a better return on investment. Along with the increases, many programs are experiencing significant schedule delays--as much as 6 years--postponing delivery of promised capabilities to the warfighter. Outcomes have been so disappointing in some cases that DOD has had to go back to the drawing board to consider new ways to achieve the same, or less, capability. GAO's reviews of space acquisitions this year found that some ongoing programs--for example, the Advanced Extremely High Frequency satellite program and the Wideband Global SATCOM program--have been able to work through the bulk of technical problems they were facing and are on track to meet revised targets, albeit at higher costs and with delayed capability. Others, however, including the Space-Based Infrared System High program, the Global Positioning System IIF, and the National Polar-orbiting Operational Environmental Satellite System, continue to face setbacks and further risks. In recognizing the need to reform space acquisitions, DOD has taken steps to instill best practices in two new major space efforts--the Transformational Satellite Communications System (TSAT) and the Space Radar program--which are expected to be among the most complex and costly space programs ever. For these programs, DOD has taken steps to separate technology discovery from acquisition, establish an incremental path toward meeting user needs, obtain agreements on requirements before program start, and use quantifiable data and demonstrable knowledge to make decisions to move to next phases. If these actions can be sustained, DOD will greatly reduce technical risks, although not completely. There is still significant inherent risk associated with integrating critical technologies on board the satellites and with developing the software needed to achieve the capabilities of the satellites. Moreover, sustaining these reforms on these two programs and expanding them to others will not be easy. Like all weapons programs, space programs continue to face funding pressures that have encouraged too much optimism. DOD has not prioritized its programs for funding even though its investment for all major space acquisitions is expected to increase about 46 percent in the next 3 years. It is likely to continue to face cost overruns on problematic programs, and it wants to undertake other major new efforts in addition to Space Radar and TSAT. In addition, new programs are being undertaken as DOD is addressing shortfalls in critical technical, business, and program management skills. In other words, DOD may not be able to obtain the right skills and experience to manage all of the new efforts.
GAO-07-730T, Space Acquisitions: Actions Needed to Expand and Sustain Use of Best Practices
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Testimony before the Subcommittee on Strategic Forces, Senate Committee
on Armed Services:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:30 p.m. EDT:
Thursday, April 19, 2007:
Space Acquisitions:
Actions Needed to Expand and Sustain Use of Best Practices:
Statement of Cristina T. Chaplain, Director:
Acquisition and Sourcing Management Team:
GAO-07-730T:
GAO Highlights:
Highlights of GAO-07-730T, a testimony before the Subcommittee on
Strategic Forces, Senate Committee on Armed Services
Why GAO Did This Study:
DOD‘s space system acquisitions have experienced problems over the past
several decades that have driven up costs by hundreds of millions, even
billions of dollars, stretched schedules by years, and increased
performance risks. DOD has recognized the need to change its approach
to developing space systems and is attempting to instill best practices
in new efforts. GAO was asked to testify on its findings on space
acquisitions problems and steps needed to sustain and expand the use of
best practices. In preparing this testimony, GAO relied on its detailed
reviews of space programs as well as cross-cutting work on cost
estimating and best practices.
GAO does not make recommendations in this testimony. However, GAO has
made recommendations on steps DOD can take to ensure better outcomes
for its space acquisitions programs. These include developing an
overall investment strategy for acquisition programs, addressing human
capital and other shortfalls in capacity, and revising policies
supporting space to incorporate best practices.
What GAO Found:
The majority of major acquisition programs in DOD‘s space portfolio
have experienced problems during the past two decades that have driven
up cost and schedules and increased technical risks. At times, cost
growth has come close to or exceeded 100-percent, causing DOD to nearly
double its investment in the face of technical and other problems
without realizing a better return on investment. Along with the
increases, many programs are experiencing significant schedule
delays”as much as 6 years”postponing delivery of promised capabilities
to the warfighter. Outcomes have been so disappointing in some cases
that DOD has had to go back to the drawing board to consider new ways
to achieve the same, or less, capability.
GAO‘s reviews of space acquisitions this year found that some ongoing
programs”for example, the Advanced Extremely High Frequency satellite
program and the Wideband Global SATCOM program”have been able to work
through the bulk of technical problems they were facing and are on
track to meet revised targets, albeit at higher costs and with delayed
capability. Others, however, including the Space-Based Infrared System
High program, the Global Positioning System IIF, and the National Polar-
orbiting Operational Environmental Satellite System, continue to face
setbacks and further risks.
In recognizing the need to reform space acquisitions, DOD has taken
steps to instill best practices in two new major space efforts”the
Transformational Satellite Communications System (TSAT) and the Space
Radar program”which are expected to be among the most complex and
costly space programs ever. For these programs, DOD has taken steps to
separate technology discovery from acquisition, establish an
incremental path toward meeting user needs, obtain agreements on
requirements before program start, and use quantifiable data and
demonstrable knowledge to make decisions to move to next phases. If
these actions can be sustained, DOD will greatly reduce technical
risks, although not completely. There is still significant inherent
risk associated with integrating critical technologies on board the
satellites and with developing the software needed to achieve the
capabilities of the satellites.
Moreover, sustaining these reforms on these two programs and expanding
them to others will not be easy. Like all weapons programs, space
programs continue to face funding pressures that have encouraged too
much optimism. DOD has not prioritized its programs for funding even
though its investment for all major space acquisitions is expected to
increase about 46 percent in the next 3 years. It is likely to continue
to face cost overruns on problematic programs, and it wants to
undertake other major new efforts in addition to Space Radar and TSAT.
In addition, new programs are being undertaken as DOD is addressing
shortfalls in critical technical, business, and program management
skills. In other words, DOD may not be able to obtain the right skills
and experience to manage all of the new efforts.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-730T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Cristina Chaplain at
(202) 512-4841 or chaplainc@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the Department of Defense's
(DOD) space acquisitions. Each year, DOD spends billions to acquire
space-based capabilities to support current military and other
government operations as well as to enable DOD to transform the way it
collects and disseminates information, gathers data on adversaries, and
attacks targets. In fiscal year 2008 alone, DOD expects to spend over
$22 billion dollars to develop and procure satellites and other space
systems, including nearly $10 billion on selected major space
systems.[Footnote 1] Despite its growing investment in space, however,
DOD's space system acquisitions have experienced problems over the past
several decades that have driven up costs by hundreds of millions, even
billions of dollars; stretched schedules by years; and increased
performance risks. In some cases, capabilities have not been delivered
to the warfighter after decades of development.
In view of these problems, the Air Force, DOD's primary space system
acquirer, has been attempting to instill best practices in two newer
space programs--Space Radar and the Transformational Satellite
Communications System (TSAT). These steps can help better position the
two programs for success, but they will not work without adhering to
commitments to delay milestone decisions if there are still gaps
between requirements and resources, and to use more robust tools to
analyze risks, costs, and schedule. Moreover, other space programs--new
and old--are still facing setbacks, reflecting problems in technology
development or design, problems in managing contractors, and more
broadly, funding shifts needed to sustain the larger space portfolio.
Such setbacks--common among all weapons acquisitions--continue to
hamper the Air Force's ability to provide resources and support needed
to deliver capabilities within cost, schedule, and performance targets.
My testimony today will highlight our findings on space acquisitions as
well as actions needed to address persistent acquisition problems and
to build on best practice approaches being adopted in Space Radar and
TSAT.
Space Acquisitions Continue to Face Cost and Schedule Increases:
The majority of major acquisition programs in DOD's space portfolio
have experienced problems during the past two decades that have driven
up cost and schedules and increased technical risks. Several programs
have been restructured by DOD in the face of delays and cost growth. At
times, cost growth has come close to or exceeded 100 percent, causing
DOD to nearly double its investment in the face of technical and other
problems without realizing a better return on investment. Along with
the increases, many programs are experiencing significant schedule
delays--as much as 6 years--postponing delivery of promised
capabilities to the warfighter. Outcomes have been so disappointing in
some cases that DOD has had to go back to the drawing board to consider
new ways to achieve the same, or less, capability. Some programs have
been able to work through the bulk of technical problems they were
facing and are on track to meet revised targets, albeit at higher costs
and with delayed deliveries. Others, however, continue to face
setbacks.
The following chart compares original cost estimates and current cost
estimates for the broader portfolio of major space acquisitions for
fiscal years 2007 through 2012. The wider the gap between original and
current estimates, the fewer dollars DOD has available to invest in new
programs.
Figure 1: Comparison between Original Cost Estimates and Current Cost
Estimates for Selected Major Space Acquisition Programs[A] for Fiscal
Years 2007 through 2012:
[See PDF for image]
Source: GAO analysis of DOD data.
[A] Includes: Advanced Extremely High Frequency (AEHF) satellites,
Evolved Expendable Launch Vehicle (EELV), Global Broadcast Service
(GBS), Global Positioning System II (GPS) , Mobile User Objective
System (MUOS), National Polar-orbiting Operational Environmental
Satellite System (NPOESS), Space Based Infrared System (SBIRS)High, and
Wideband Global SATCOM (WGS).
[End of figure]
The next two figures reflect differences in unit costs and total costs
for satellites from the time the programs officially began to their
most recent cost estimate. As the second figure notes, in several
cases, DOD has had to cut back on quantity and capability in the face
of escalating costs. For example, two satellites and four instruments
were deleted from National Polar-orbiting Operational Environmental
Satellite System (NPOESS) and four sensors are expected to have fewer
capabilities. This will reduce some planned capabilities for NPOESS as
well as planned coverage. Likewise, the Space Based Infrared System
(SBIRS) High missile detection program deferred capabilities, such as
mobile data processors for the Air Force and the Army and a fully
compliant backup mission control facility, and it pushed off a decision
to procure the third and fourth satellites, which will not meet SBIRS
High requirements for coverage. Despite such measures, unit costs for
both programs are still considerably higher than originally promised.
In addition to SBIRS High and NPOESS, the programs featured in the
figures include the Advanced Extremely High Frequency (AEHF)
satellites, the Wideband Global SATCOM (WGS) and the Mobile User
Objective System (MUOS), which are all communications satellites, and
the Global Positioning System (GPS) II.
Figure 2: Differences in Unit Life Cycle Cost from Key Decision Point
(KDP) B (Program Start) and Most Recent Estimate:
[See PDF for image]
Source: GAO analysis of DOD data.
[End of figure]
Figure 3: Differences in Total Program Costs from Key Decision Point
(KDP) B and Most Recent Estimate:
[See PDF for image]
Source: GAO analysis of DOD data.
[End of figure]
The next chart highlights the additional estimated months needed to
complete programs. These additional months represent time not
anticipated at the programs' start dates. Generally, the further
schedules slip, the more DOD is at risk of not sustaining current
capabilities. For this reason, DOD began an alternative infrared system
effort, known as the Alternative Infrared Satellite System (AIRSS), to
run in parallel with the SBIRS High program.
Figure 4: Additional Months Needed since Program Start:
[See PDF for image]
Source: GAO analysis of DOD data.
[End of figure]
Some programs, such as AEHF and WGS, have worked through the bulk of
technical and other problems that were causing large schedule increases
and cost delays. For example, the AEHF program, which has been in the
final stages of development for almost 3 years, resolved issues related
to its cryptographic equipment and is on track to meet a revised date
for first launch. The WGS program completed rework on improperly
installed fasteners, and contractors have redesigned computers to
rectify data transmission errors. The program expects a first launch in
June 2007. As noted in our figures, the MUOS program, which began more
recently than AEHF and WGS, is generally meeting its targets, though it
has yet to enter into the more difficult stages of satellite
production, integration and test.
By contrast, the SBIRS High program still faces considerable risks.
Recent GAO work for this subcommittee, for example, shows that the
program is diverging from cost and schedule targets just months after
rebaselining due to problems related to assembly, integration, and
testing and that the contractor's estimates for addressing these issues
are overly optimistic. Defense Contract Management Agency reports also
show that software development efforts are behind schedule--by as much
as 32 percent. In addition, the contractor has already spent about 28
percent, or $66 million, of its management reserve from April 2006 to
November 2006. This reserve is designed to last until 2012, but at the
current rate, is likely to be depleted by May 2008. If this trend
continues, $500 million in additional reserve will be needed. As noted
earlier, DOD initiated an alternative effort--AIRSS--to ensure it would
have continued capabilities. However, we have questions as to whether
AIRSS is being pursued as a "plan B" program, as originally envisioned.
Rather than seek to maintain continuity of operations, the program is
focused on advancing capabilities because program managers believe
there are no viable alternatives. We also found that there was
disagreement among DOD stakeholders as to whether there were
alternatives or not, and there was concern that the AIRSS schedule may
be too compressed. Our analysis also found that there was a high degree
of concurrency in the program's schedule, which may be limiting DOD's
ability to gain knowledge from planned demonstrations and increased the
potential for costly rework further in the program.
The GPS Block IIF program is also at a high risk of cost increases and
schedule delays. Since our last annual assessment of the GPS Block IIF
program, the program has revised its acquisition program baseline to
account for cost increases and schedule delays, and requested an
additional $151 million to cover these costs. The number of IIF
satellites to be procured was reduced from 19 to 12. Further, the
launch date of the first IIF satellite continues to slip. The original
baseline showed an initial launch availability date of December 2006,
but DOD's current baseline shows July 2009--a slip of about 2.5 years.
The program also learned that the contractor's earned value management
reporting system was not accurately reporting cost and schedule
performance data. A DOD report also recently found that development of
user equipment has not been synchronized with the development of
satellites and control system, increasing the risk of substantial
delays in realistic operational testing and fielding of capabilities.
GPS is taking measures to address these problems. For example, this
year, it did not award its contractor $21.4 million in award fees. In
December 2005, GAO recommended that DOD improve its use of award fees
for all weapon system contracts by specifically tying them to
acquisition outcomes. A review of a sample of programs, including SBIRS
High, found that this was generally not done.
The NPOESS program is also still at risk of more cost increases and
schedule delays. In June 2006, DOD certified the NPOESS program to
Congress, and with agreement from its program partners, DOD
restructured the program. Now the NPOESS program acquisition costs are
estimated to be about $11.5 billion--an increase of about $3 billion
over the prior cost estimate. Before the contract was awarded, in 2002,
the life cycle cost for the program was estimated to be $6.5 billion
over the 24-year period from the inception of the program in 1995
through 2018. The delivery of the first two NPOESS satellites has been
delayed by roughly 4 and 5 years, and as noted earlier, the number of
satellites to be produced has been reduced from six to four. In
addition, the number of instruments was reduced from 13 (10 sensors and
3 subsystems) to 9 instruments (7 sensors and 2 subsystems), and 4 of
the remaining sensors will have fewer capabilities. The NPOESS program
will incorporate any number of the deleted instruments if additional
funding is provided from outside the NPOESS program. The program
restructure will result in reduced satellite data collection coverage,
requiring dependence on a European weather satellite for coverage
during midmorning hours. Although the program has reduced the number of
satellites it will produce, the cost per satellite is more than 150
percent above the original approved program baseline. The NPOESS
program is now updating the cost, schedule, performance baselines and
acquisition strategy, and coordinating the changes with the three
agencies. The program expects these documents to be approved later this
year. While work is continuing on key sensors, the program still faces
potential problems in their development.
The Space Based Space Surveillance System (SBSS) system--not featured
on the charts above because it is not yet a formal acquisition program-
-is also encountering problems. The SBSS system is to replace an aging
sensor on an orbiting research and development satellite and improve
the timeliness of data on objects in geosynchronous orbit. As currently
planned, the initial block will consist of a single satellite and
associated command, control, communications, and computer equipment.
Subsequent SBSS efforts will focus on building a larger constellation
of satellites to provide worldwide space surveillance of smaller
objects in shorter timelines. In late 2005, an independent review team
found that the program's baseline was not executable; that the
assembly, integration, and test plan was risky; and that the
requirements were overstated. The SBSS program was restructured in
early 2006 due to cost growth and schedule delays. The restructuring
increased funding and schedule margin; streamlined the assembly,
integration, and test plan; and relaxed requirements. The launch of the
initial satellite was delayed to April 2009--a delay of about 18
months. Cost growth due to the restructure is about $130 million over
initial estimates.
Last, additional cost increases are expected for the Evolved Expendable
Launch Vehicle (EELV) program, but for reasons that are different than
the ones being experienced on the satellite programs. In recent years,
program cost has risen 79 percent, with a cost per unit increase of 135
percent. A chief reason for cost increases is a decline in the
commercial launch market upon which the program's business case was
based. Cost increases are also a result of additional program scope,
including mission assurance, assured access to space, and earned value
management systems reporting. In addition, satellite vehicle weight
growth and satellite launch delays have contributed to cost increases.
In December 2006, Boeing and Lockheed Martin initiated a joint venture
(United Launch Alliance, or ULA) that will combine the production,
engineering, test, and launch operations associated with U.S.
government launches of Boeing Delta and Lockheed Martin Atlas rockets.
Though the EELV program office expects long-term savings to be achieved
through this arrangement, the cost per launch under a recently
negotiated Buy III acquisition strategy will be higher than under Buy
I. According to the Air Force, this is because the contractors will
incur additional costs to allow the government to perform the necessary
oversight not required under Buy I. (Exact estimates of the new cost
per launch have not been finalized by the program office yet.) Under
the new strategy, EELV will be transitioning from a fixed-price
arrangement, where launches were essentially procured as a service, to
a combination of a cost-plus and fixed-price contracts. The arrangement
will allow the government to exercise more oversight and to incentivize
contractors through the use of award fees. But to realize these
benefits, the Air Force will need to ensure it has resources (skills,
expertise, and tools) to begin accumulating and analyzing detailed
cost, schedule, performance, design, and technical data. In addition,
it will be important to assess progress in achieving longer-term
savings envisioned under ULA as well as to ensure that the combined
assets of the contractors are adequately protected.
Underlying Reasons for Cost and Schedule Growth:
Our past work has identified a number of causes behind the cost growth
and related problems, but several consistently stand out. First, on a
broad scale, DOD starts more weapon programs than it can afford,
creating a competition for funding that encourages low cost estimating,
optimistic scheduling, overpromising, suppressing of bad news, and, for
space programs, forsaking the opportunity to identify and assess
potentially better alternatives. Programs focus on advocacy at the
expense of realism and sound management. Invariably, with too many
programs in its portfolio, DOD is forced to continually shift funds to
and from programs--particularly as programs experience problems that
require additional time and money to address. Such shifts, in turn,
have had costly, reverberating effects.
Figure 5 illustrates the negative cycle of incentives that come when
programs compete for funding. Table 1 highlights specific areas where
we found the original cost estimates of programs to be optimistic in
their assumptions.
Figure 5: Pressures Associated when Too Many Programs Are Competing for
Funding:
[See PDF for image]
Source: GAO.
[End of figure]
Table 1: Areas where Space Programs Were Too Optimistic in Their Cost
Estimate Assumptions:
Optimistic assumptions: Industrial base would remain constant and
available;
Space programs affected: AEHF: [Empty];
Space programs affected: EELV: X;
Space programs affected: GPS IIF: X;
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: X.
Optimistic assumptions: Technology would be mature enough when needed;
Space programs affected: AEHF: X;
Space programs affected: EELV: [Empty];
Space programs affected: GPS IIF: X;
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: X.
Optimistic assumptions: Acquisition reform efforts (implemented via
Total System Performance Responsibility policy) would reduce cost and
schedule;
Space programs affected: AEHF: [Empty];
Space programs affected: EELV: X;
Space programs affected: GPS IIF: X;
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: [Empty].
Optimistic assumptions: Savings would occur from experience on heritage
systems;
Space programs affected: AEHF: X;
Space programs affected: EELV: [Empty];
Space programs affected: GPS IIF: [Empty];
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: X.
Optimistic assumptions: No weight growth would occur;
Space programs affected: AEHF: X;
Space programs affected: EELV: [Empty];
Space programs affected: GPS IIF: [Empty];
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: X.
Optimistic assumptions: Funding stream would be stable;
Space programs affected: AEHF: X;
Space programs affected: EELV: [Empty];
Space programs affected: GPS IIF: X;
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: [Empty].
Optimistic assumptions: An aggressive schedule could be met;
Space programs affected: AEHF: X;
Space programs affected: EELV: [Empty];
Space programs affected: GPS IIF: [Empty];
Space programs affected: NPOESS: X;
Space programs affected: SBIRS: X;
Space programs affected: WGS: X.
Optimistic assumptions: No growth in requirements;
Space programs affected: AEHF: X;
Space programs affected: EELV: [Empty];
Space programs affected: GPS IIF: X;
Space programs affected: NPOESS: [Empty];
Space programs affected: SBIRS: X;
Space programs affected: WGS: [Empty].
Source: GAO analysis.
Note: This table was developed as part of a larger review on DOD's
space cost-estimating function. Information was derived from
discussions with program and contractor officials and GAO analysis. In
some cases, programs may have ultimately experienced problems related
to one of the categories, but we did not have evidence to show that the
original assumptions were optimistic.[Footnote 2]
[End of table]
Second, as we have previously testified and reported, DOD has tended to
start its programs too early, that is before it has the assurance that
the capabilities it is pursuing can be achieved within available
resources and time constraints. This tendency is caused largely by the
funding process, since acquisition programs attract more dollars than
efforts concentrating solely on proving technologies. Nevertheless,
when DOD chooses to extend technology invention into acquisition,
programs experience technical problems that require large amounts of
time and money to fix. Moreover, when the approach is followed, cost
estimators are not well positioned to develop accurate cost estimates
because there are too many unknowns. Put more simply, there is no way
to estimate how long it would take to design, develop, and build a
satellite system when critical technologies planned for that system are
still in relatively early stages of discovery and invention.
A companion problem for space systems is that programs have
historically attempted to satisfy all requirements in a single step,
regardless of the design challenge or the maturity of the technologies
necessary to achieve the full capability. Increasingly, DOD has
preferred to make fewer but heavier, larger, and more complex
satellites that perform a multitude of missions rather than larger
constellations of smaller, less complex satellites that gradually
increase in sophistication. This has stretched technology challenges
beyond current capabilities in some cases and vastly increased the
complexities related to software--a problem that affected SBIRS High
and AEHF, for example.
In addition, several of the space programs discussed above began in the
late 1990s, when DOD structured contracts in a way that reduced
government oversight and shifted key decision-making responsibility
onto contractors. This approach--known as Total System Performance
Responsibility, or TSPR--was intended to facilitate acquisition reform
and enable DOD to streamline a cumbersome acquisition process and
leverage innovation and management expertise from the private sector.
However, DOD later found that this approach magnified problems related
to requirements creep and poor contractor performance. In addition,
under TSPR, the government decided not to obtain certain cost data, a
decision that resulted in the government having even less oversight of
the programs and limited information from which to manage the programs.
Further, the reduction in government oversight and involvement led to
major reductions in various government capabilities, including cost-
estimating and systems-engineering staff. The loss of cost-estimating
and systems-engineering staff in turn led to a lack of technical data
needed to develop sound cost estimates.
DOD Is Implementing Best Practices on Two New Efforts:
Over the past decade, GAO has examined successful organizations in the
commercial sector to identify best practices that can be applied to
space and weapon system acquisitions. This work has identified a number
of practices, which we have recommended that DOD adopt. Generally, we
have recommended that DOD separate technology discovery from
acquisition, follow an incremental path toward meeting user needs,
match resources and requirements at program start, and use quantifiable
data and demonstrable knowledge to make decisions to move to next
phases. DOD is making efforts to instill these practices on two
programs reviewed this year: the Transformational Satellite
Communications System and the Space Radar program. Specifically:
² Successful organizations we have studied ensure that technologies are
mature, that is, proven to work as intended before program start. Both
TSAT and Space Radar are attempting to do this. According to their
plans, critical technologies should reach at least a Technology
Readiness Level (TRL) 6 by program start, meaning the technologies have
been tested in a relevant environment. This stands in sharp contrast to
previous programs, which have started with immature technologies, such
as SBIRS and NPOESS, and it reflects the implementation of a "back to
basics" policy advocated this past year by the Under Secretary of the
Air Force. If these programs adhere to the TRL 6 criteria, they will
greatly reduce the risk of encountering costly technical delays, though
not completely. There are still significant inherent risks associated
with integrating critical technologies and with developing the software
needed to realize the benefits of the technologies. Moreover, the best
practice programs we have studied strive for a TRL 7, where the
technology has been tested in an operational environment, that is,
space.
² Successful organizations defer more ambitious technology efforts to
corporate research departments (equivalent to science and technology
(S&T) organizations in DOD) until they are ready to be added to future
increments. Both programs have deferred more ambitious technology
development efforts to the science and technology environment. TSAT,
for example, deferred the wide-field of view multi-access laser
communication technology, and is contributing about $16.7 million for
"off-line" maturation of this technology that could be inserted into
future increments. It has laid out incremental advances in other
capabilities over two increments. Space Radar has deferred lithium-ion
batteries, more efficient solar cells, and onboard processing for its
first increment, and like TSAT, is contributing toward their
development by S&T organizations. At this time, Space Radar has not
defined details of an increment beyond the first one.
² Successful organizations extensively research and define requirements
before program start to ensure that they are achievable, given
available resources, and that they do not define requirements after
starting programs. Both programs have also employed systems engineers
to help determine achievability of requirements. The TSAT program has
reached agreement on requirements with its users--primarily in terms of
what will be included in the first several blocks of the program and
what will not be included. The Space Radar program has instituted
several processes designed to achieve consensus on requirements across
a range of diverse users. It still needs to formalize agreements
related to these processes and also identify key performance
parameters. This is important because Space Radar is to be shared by
the military and intelligence communities--each with different specific
needs for the system and very specific roles and responsibilities with
regard to the data being produced by Space Radar and its users. It has
been reported recently that conflicts in roles and responsibilities
have arisen on dissemination of data being produced by a small tactical
satellite (TacSat 2) recently launched by DOD for use by military
commanders.
It remains to be seen whether TSAT and Space Radar will take additional
steps that successful organizations take to position programs for
success. For example:
² The organizations we have studied do not go ahead with program start
milestone decisions if there are still gaps between requirements and
resources. TSAT and Space Radar have indicated that they intend to do
the same, but there are external pressures on both programs to provide
needed capabilities.
² The organizations we have studied hold program managers accountable
for their estimates and require program managers to stay with a project
to its end. We have made recommendations to DOD to instill similar
practices departmentwide, but these have yet to be implemented.
Further, there are still incentives in place to keep program managers'
tenures relatively short. Promotions, for example, often depend on
having varied management experience rather than sustained
responsibility for one program.
² The organizations we studied have developed common templates and
tools to support data gathering and analysis and maintain databases of
historical costs, schedule, quality, test, and performance data. Cost
estimates themselves are continually monitored and regularly updated
through a series of gates or milestone decisions that demand programs
assess readiness and remaining risk within key sectors of the program
as well as overall cost and schedules. We saw indications that TSAT and
Space Radar were using more robust tools to analyze risks, costs, and
schedule than programs have done in the past. However, it remains to be
seen how these practices will be reflected in official cost estimates.
In the past, we have found space program estimates were simply too
optimistic and that independent estimates produced by DOD's Cost
Analysis Improvement Group were not being used. DOD agreed with our
findings and asserted it was taking actions to address them.
Actions Needed to Sustain Commitment to Improvements:
The Air Force's continued efforts to instill best practices on Space
Radar and TSAT are good first steps toward addressing acquisition
problems in the space portfolio. They represent significant shifts in
thinking about how space systems should be developed as well as
commitment from senior leadership. But sustaining these reforms will
not be easy. The programs are not immune to funding pressures that have
encouraged too much optimism. They are also being undertaken as DOD is
addressing shortfalls in critical technical, business, and program
management skills. Further, processes and policies key to sustainment
and broader use of best practices have not been changed to further
reflect the kinds of changes taking place on Space Radar and TSAT.
First, new programs still must compete for limited funding. As DOD
seeks to fund Space Radar and TSAT, it will be (1) undertaking other
new, costly efforts, including GPS III, SBSS, and AIRSS; (2) addressing
cost overruns associated with programs like SBIRS High and GPS; and (3)
facing increased pressures to increase investments in assets designed
to protect space systems. In total, these efforts will increase DOD's
investment for all major space acquisitions from $6.31 billion to $9.22
billion, or about 46 percent over the next 3 years. More may be needed
if technical, software, and other problems on current programs worsen.
At the same time, investment needs for other weapon systems are also on
the rise, while long-term budget forecasts indicate that considerably
fewer dollars will be available for discretionary spending in coming
years rather than more.
In prior reports, we have stated that as long as too many programs
compete for too few dollars in DOD, programs will be incentivized to
produce optimistic estimates and suppress bad news. They will view
success as securing the next installment of funds versus delivering
capability within cost and schedule goals. We have recommended that DOD
guide its decisions to start space and other weapons acquisition
programs with an overall investment strategy that would identify
priorities for funding so that space systems that are expected to play
a critical role in transformation, such as Space Radar and TSAT, could
be prioritized along with other legacy and transformational systems.
Let me take a moment to illustrate why an investment strategy is
critical. We have reported in the past that DOD and the Air Force have
waited too long to establish priorities or make trade-off decisions. We
have also reported that frequent funding shifts have hurt programs that
were performing well or further damaged troubled programs. We have also
reported cases where DOD and the Air Force have walked away from
opportunities to save costs in lot buys or leverage knowledge already
gained in legacy programs in favor of starting new programs that
promise much more advanced capability but have little knowledge to back
up that promise. Today, DOD is on track to cut short the AEHF program
in order to pursue TSAT. It has stated it may also do the same for
SBIRS to pursue AIRSS. In both cases, DOD would be forgoing savings
that it had already negotiated for lot buys and in effect, paying
significantly more for nonrecurring engineering. While these decisions
have the potential to enable DOD to obtain advanced capability sooner
(provided best practices are followed on the new programs), they should
have been made much earlier and more strategically in order to stem
investment losses.
DOD's own reports recognize that investment planning needs to be
instilled in weapon acquisitions. A February 2007 report, in response
to a requirement in the John Warner National Defense Authorization Act
for Fiscal Year 2007, outlines steps that DOD is taking to better
prioritize and fund programs.[Footnote 3] The initiatives include (1)
establishing a new concept decision review to provide decision makers
with an early opportunity to evaluate trade-offs among alternative
approaches to meeting a capability need, (2) testing portfolio
management approaches in selected capability areas to facilitate more
strategic choices about how to allocate resources across programs, and
(3) capital budgeting as a potential means to stabilize program
funding. While these developments are promising, we recently reported
that such initiatives do not fundamentally change DOD's existing
service-centric framework for making weapon system investment
decisions.[Footnote 4] Moreover, it will take some time to determine
their success in enabling more effective funding prioritization.
Second, space programs are facing capacity shortfalls. These include
shortages of staff with science and engineering backgrounds as well as
staff with program management and cost estimating experience. During
our review this year, the TSAT program cited shortages of space
acquisition personnel as a key challenge that increases risk for the
program. Due to broader Air Force cuts in workforce, the program did
not expect to be able to fill technical positions needed to accompany
plans to ramp up spending. During our review of DOD's space cost
estimating function, Air Force space cost estimating organizations and
program offices said that they believed their cost-estimating resources
were inadequate to do a good job of accurately predicting costs.
Because of the decline in in-house cost-estimating resources, space
program offices and Air Force cost-estimating organizations are now
more dependent on support contractors. At 11 of 13 program offices we
informally surveyed, contractors accounted for 64 percent of cost-
estimating personnel. This reliance raised questions from the cost-
estimating community about whether numbers and qualifications of
government personnel were sufficient to provide oversight of and
insight into contractor cost estimates. In addition to technical and
cost estimating skills, DOD and GAO studies have also pointed to
capacity shortfalls in program management. According to DOD's Young
Panel report, government capabilities to lead and manage the space
acquisition process have seriously eroded, in part because of actions
taken in the acquisition reform environment of the 1990s. During our
2005 review of program management, we surveyed DOD's major weapon
system program managers and interviewed program executive officers, who
similarly pointed to critical skill shortages in program management,
systems engineering, and software development. The Air Force and DOD
recognize these shortfalls and are taking actions to address them, but
these will take time to implement. It is important that in the interim,
the Air Force identify and take steps to grow or retain skill sets that
should be organic, such as highly specialized knowledge of certain
military space technologies. During both our cost estimating and space
system reviews, program officials noted that it can take several years
for new technical staff to build knowledge and skills unique to
military space.
Our past work has also pointed to capacity shortfalls that go beyond
workforce. For example, in 2006, we reported that cost estimation data
and databases are incomplete, insufficient, and outdated. And in our
testimony last year, we pointed to limited opportunities and funding
for space technologies, and the lack of low-cost launch vehicles. It is
our understanding that the Air Force and DOD are working to address all
of these shortfalls. Budget plans show, for example, an increase of
nearly $11 million in funding for the space test program beginning in
2009--about 23 percent.
Last, policies that surround space acquisition need to be further
revised to ensure best practices are instilled and sustained. For
example, DOD's space acquisition policy does not require that programs
such as TSAT and Space Radar achieve a TRL 6 or higher for key
technologies before being formally started (KDP B). Instead, it is
suggested that TRL 6 be achieved at preliminary decision review (KDP C)
or soon after. Given that there are many pressures and incentives that
are driving space and other weapon programs to begin too early and to
drive for dramatic rather than incremental leaps in capability, DOD
needs acquisition policies that ensure programs have the knowledge they
need to make investment decisions and that DOD and Congress have a more
accurate picture of how long and how much it will take to get the
capability that is being promised. In addition, although the policy
requires that independent cost estimates be prepared by bodies outside
the acquisition chain of command, it does not require that they be
relied upon to develop program budgets. Officials within the space cost
estimating community also believed that the policy was unclear in
defining roles and responsibilities for cost estimators. We continue to
recommend changes be made to the policy--not only to further ingrain
the shift in thinking about how space systems should be developed, but
to ensure that the changes current leaders are trying to make can be
sustained beyond their tenure.
In closing, we support efforts to instill best practices on programs
like Space Radar and TSAT. They are critical to enabling DOD to break
the cycle of space acquisition problems by matching resources to
requirements before program start. We encourage DOD to build on this
momentum by extending a best practice approach to its entire space
portfolio. For newer efforts, such as AIRSS, this means reexamining
requirements and alternative means of satisfying those requirements and
clarifying the true purpose of the program. For current programs, such
as SBIRS, this means continuing to track risks and dedicating resources
necessary to mitigate those risks, leveraging management tools such as
earned value management analyses, and finding ways to incentivize
contractors to perform well. For the broader portfolio, this means
ensuring programs have all the right resources to enable success. These
include adequate levels of funding accompanied by short-and long-term
investment plans, adequate skills and capabilities, as well as data,
policy, and processes, accountability and leadership support.
[End of section]
Appendix I: Scope and Methodology:
In preparing for this testimony, we relied on previously issued GAO
reports on assessments of individual space programs, common problems
affecting space system acquisitions, and DOD's space acquisition
policy. We also relied on our best practices studies, which have
examined pressures and incentives affecting space system acquisition
programs, the optimal levels of knowledge needed to successfully
execute programs, and complementary management practices and processes
that have helped commercial and DOD programs to reduce costs and cycle
time. In addition, we analyzed DOD's Selected Acquisition Reports to
assess cost increases and investment trends. We conducted our review
between March 19 and April 13, 2007 in accordance with generally
accepted government auditing standards.
[End of section]
Appendix II: Contacts and Acknowledgments:
For in information, please contact Cristina Chaplain at 202-512-4841 or
chaplainc@gao.gov. Individuals making contributions to this testimony
include, Art Gallegos, Jeff Barron, Tony Beckham, Noah Bleicher, Greg
Campbell, Maricela Cherveny, Claire Cyrnak, Jean Harker, and Rich
Horiuchi.
[End of section]
Appendix III:
Table 2: Highlights of Recent Findings for Current and Planned Space
Programs:
Current programs.
Description: Space Based Infrared System High (SBIRS-High): Ballistic
missile detection system being developed by the Air Force to replace
its legacy detection system; Development; Start: October 1996[A];
Recent findings: With unit cost increases of more than 315 percent, the
program has undergone four Nunn-McCurdy reviews. Total program costs
have increased from $4 billion to more than $10 billion. The launch
schedule has slipped at least 6 years; the first satellite is currently
scheduled to launch not earlier than October 2008. Several program
elements that were problematic before the restructure continue to pose
risks for the program. SBIRS High faces challenges in software
development and remains at risk of failing to meet cost and schedule
goals. The total program cost is still not accounted for, in part
because of deferred capabilities, and the contractor management reserve
funds are not sustainable at the current rate of expenditure. In all
likelihood, management reserve dollars will need to be increased. DOD
officials recently began efforts to develop a viable competing
capability in parallel with the SBIRS High program, known as the
Alternative Infrared Satellite System (AIRSS). AIRSS is being designed
in part to provide an alternative to the SBIRS GEO 3 satellite. DOD
awarded contracts to Raytheon and Science Applications International
Corporation for sensor assembly development for AIRSS.
Description: Global Broadcast Service (GBS): Part of the overall
military satellite communication architecture developed by the Air
Force for one-way transmission of video, imagery, and other high-
bandwidth information to the warfighter; Development; Start: November
1997;
Recent findings: Program funding increased by over $100 million for
fiscal years 2008 through 2013 as a result of a decision to implement a
new GBS architecture. The new architecture is to be implemented
beginning in fiscal year 2008, and will use existing defense programs
and computing centers to host GBS broadcast content. A revised
acquisition program baseline is being developed to address the unit
cost increase. GBS currently uses broadcast payloads on two Ultra- High
Frequency Follow-on (UFO) satellites and three leased commercial
satellite transponders, and starting in fiscal year 2008, the
constellation of five Wideband Global SATCOM (WGS) satellites will also
carry GBS.
Description: Evolved Expendable Launch Vehicle (EELV): Acquisition of
commercial launch services and associated infrastructure from two
competitive families of launch vehicles; Development; Start: October
1998;
Recent findings: The program cost has risen 79 percent, with a cost per
unit increase of 135 percent, and triggered a Nunn-McCurdy breach. A
chief reason for cost increases is a decline in the commercial launch
market upon which the program's business case was based. In December
2006, Boeing and Lockheed Martin initiated a joint venture (United
Launch Alliance, or ULA) that will combine the production, engineering,
test, and launch operations associated with U.S. government launches of
Boeing Delta and Lockheed Martin Atlas rockets. The EELV program office
is budgeting for ULA savings (estimated at $150 million per year) that
are to appear starting in fiscal year 2011. The cost per launch under
the new Buy III acquisition strategy will likely be higher than under
Buy I because the contractors will incur additional costs to allow the
government to perform the necessary oversight not required under Buy I.
The contractors will incur additional costs due to added program scope
(mission assurance, assured access to space, and earned value
management systems reporting) and necessary government oversight not
required under Buy I. The program office is revising the life cycle
cost estimate and acquisition program baseline to reflect the
transition from Milestone II to Milestone III (production) and
incorporate the Buy III strategy and contract structure. The expected
completion is summer 2007.
Description: Global Positioning System (GPS) Modernization: A space-
based radio-positioning system that nominally consists of a 24-
satellite constellation providing navigation and timing data to
military and civilian users worldwide; Development; Start: February
2000;
Recent findings: Total costs of the GPS II modernization program have
increased by over 20 percent, largely due to adding requirements after
the contract award and using a contracting approach that gave the
contractor for the IIF satellites and control system full
responsibility for the life cycle of the program and allowed parallel
development and production efforts. The program requested approximately
$151 million in funds to be reprogrammed this year and did not award
the contractor $21.4 million in 2006 available award fees. The first
IIF satellite available for launch date has slipped about 2.5 years.
The original program baseline had the available for launch date of
December 2006, but DOD's recent approval of a revised baseline now
shows July 2009 as the latest available date. That baseline also calls
for the procurement of only 12 IIF satellites, rather than the planned
19. The reduced number of IIF satellites and a possible increase in
reprogrammed funding will increase unit cost.
Description: Wideband Global SATCOM (WGS): Previously known as Wideband
Gapfiller Satellites and originally conceived to augment the near-term
bandwidth gap in warfighter communications needs. The Air Force is
considering a three-block approach for fielding WGS, which is to
provide high data-rate military satellite communication services. Block
1 includes the first three satellites; Development; Start: November
2000;
Recent findings: Total program costs have increased by more than 80
percent--increasing from $1.10 billion in late 2000 to $2.01 billion in
2005 and reflect the purchase of two additional satellites. In October
2006, the Air Force awarded a $1.07 billion fixed price incentive fee
with firm target contract to Boeing Satellite Systems for developing
the Block 2 WGS satellites, or satellites 4 and 5, with an unfunded
option for WGS 6. Satellites 4 and 5 will have enhanced capacity for
supporting airborne intelligence, surveillance, and reconnaissance
users and will complete the currently planned WGS constellation. The
program has made progress in integrating and testing the first
satellite. For example, rework on improperly installed fasteners is
complete, and the contractor redesigned computers to correct data
transmission errors. The program office conducted low-level signal
testing associated with satellite launch and completed interoperability
testing on the first satellite, in preparation for a June 2007 launch.
Description: Advanced Extremely High Frequency (AEHF): Communications
satellite system being developed by the Air Force to replace its legacy
protected communications satellites; Development; Start: September
2001;
Recent findings: Unit cost has increased by 78 percent. In 2004, the
program experienced cost increases of more than 15 percent, which
required a Nunn-McCurdy notification to Congress. The program was
restructured in 2004 when key cryptographic equipment was not delivered
to the payload contractor in time to meet the launch schedule. Although
the AEHF program has overcome hurdles that plagued the program through
development, it still has to complete first-time integration and
testing of a very complex satellite. The program expects to conduct
thermal vacuum testing in the fall of 2007. Current plans are to meet
full operational capability with three AEHF satellites and the first
Transformational Satellite Communication System (TSAT) satellite.
Description: Space Tracking and Surveillance System (STSS): Two
satellites to be launched in 2007 as technology demonstrations for
missile defense tests to assess whether missiles can be effectively
tracked from space; Development; Start: Restructured April 2002;
Recent findings: Total program costs have increased by 35 percent due
to the addition of funds for designing and developing the program's
operational constellation. As of 2006, total program cost is estimated
at almost $4.7 billion. The initial increment of this program, which
started in 2002, is composed of two demonstration satellites that were
built under the previous Space Based Infrared System-Low (SBIRS-Low)
program. SBIRS-Low had incurred cost increases and schedule delays and
other problems that were so severe, DOD abandoned the effort. The
program office completed thermal vacuum testing on the first
demonstration satellite's space vehicle. Test results show performance
of the integrated space vehicle within specifications. However, the
STSS program has experienced quality issues at the payload
subcontractor, and technical difficulties encountered by the prime
contractor during payload integration and testing contributed to STSS's
unfavorable cost and schedule variances of $163.7 million and $104.4
million respectively. A portion of the unfavorable cost and schedule
variance is related to work that does not contribute to the
demonstration satellite effort. The program office expects to launch
both satellites in 2007. The Missile Defense Agency (MDA) plans to
initiate an effort to build the next generation of satellites, and the
program office intends to award a contract for the follow-on
constellation in the fall. If the contract is awarded in the fall, the
follow-on satellites are to be launched in 2016 or 2017, resulting in a
potential coverage gap of 5 to 6 years.
Description: National Polar-orbiting Operational Environmental
Satellite System (NPOESS): Weather and environmental monitoring
satellites being developed by the National Oceanic and Atmospheric
Administration, the National Aeronautics and Space Administration, and
DOD to replace those in use by the agencies; Development; Start: August
2002;
Recent findings: Unit costs increased by about 34 percent, triggering a
Nunn-McCurdy review in January 2006. The revised program acquisition
cost estimate is about $11.5 billion despite the reduction of total
satellites. As part of the mandatory certification process, the program
was restructured and will only include the development of four
satellites, down from six, and the deletion of a critical sensor.
However, the program now includes the development of a competition for
a new replacement sensor that will coincide with the second
developmental satellite. The launch of the first satellite has been
delayed by at least 45 months from contract award, and is now planned
for early 2013.
Description: Mobile User Objective System (MUOS): Navy effort to
develop a family of unprotected, narrow-band satellites that can
support mobile and fixed-site users worldwide; Development; Start:
September 2004;
Recent findings: In June 2004, DOD delayed the first MUOS satellite
launch by 1 year to fiscal year 2010 due to a delay in awarding the
development contract and to mitigate schedule risk. MUOS development
has become time-critical due to the failures of two UHF Follow-On
satellites, one in June 2005 and another in September 2006. In June
2008, narrow-band communications capabilities are expected to drop
below those required and may remain degraded until the first MUOS
satellite is available for operations in March 2010. According to the
program manager, accelerating the MUOS schedule is not an option
because of the production, integration and test activities that must
take place prior to launch. DOD is examining options for addressing a
communications capability gap. Additionally, development problems
encountered under the Joint Tactical Radio System (JTRS) program have
resulted in deferrals of requirements and the increased risk of
underutilization of MUOS capabilities until MUOS- compliant JTRS
terminals are fielded. According to the program office, MUOS must
maintain its schedule each spacecraft will help mitigate the UFO
availability gap until JTRS terminals are fielded.
Planned programs.
Description: Alternative Infrared Satellite System (AIRSS): The Air
Force's AIRSS effort is to provide a missile warning capability while
also supporting missile defense, battlespace awareness, and technical
intelligence; Planned development start date: Early third quarter
fiscal year 2008;
Recent findings: As a result of the Nunn-McCurdy certification for the
SBIRS High program, the Under Secretary of Defense for Acquisition,
Technology, and Logistics directed the DOD Executive Agent for Space to
plan for a new program for space-based infrared capabilities that will
pursue an approach with acceptable technical risk and can ensure a
launch availability date of fiscal year 2015. However, AIRSS is not
being pursued as a "plan B" for the SBIRS program, as originally
envisioned. Rather than seeking to maintain continuity of operations,
the effort is focused on advancing capabilities under highly compressed
time-frames. There is disagreement within DOD about the likelihood of
meeting the target delivery date of 2015. Results from the on-orbit
demonstration satellite will not be ready in time to fully inform the
development of the first AIRSS satellite, and AIRSS officials plan to
award system contracts before data from key on-orbit testing is
completed. The latest cost estimate for the effort through fiscal year
2013 is over $3.3 billion; there is no full estimate because the system
is still undefined.
Description: GPS III: Next generation of GPS satellites and a new
control system (OCX) is to be acquired using the block approach;
Planned development start date: First quarter of 2008 for satellites
and fiscal year 2007 for OCX;
Recent findings: Initial plans were to develop a new version of GPS
that would add advanced jam-resistant capabilities and provide higher-
quality and more secure navigation capabilities. However, the first
block of GPS III satellites will have baseline capabilities, with a
launch date of 2013 for the first satellite; second and third blocks
will introduce new capabilities. Ongoing cost increases and schedule
delays with the control system for the GPS modernized satellites (IIR-M
and IIF) resulted in reallocating requirements to the OCX. If the first
GPS III does not launch by 2013, constellation sustainment will be at
risk.
Description: Space-Based Space Surveillance (SBSS): Optical sensing
satellites being developed to search, detect, and track objects in
Earth orbit; Planned development start date: Second quarter of fiscal
year 2010;
Recent findings: The SBSS system is to replace an aging sensor on an
orbiting research and development satellite and improve the timeliness
of data on objects in geosynchronous orbit. As currently planned, the
initial block (Block 10) will consist of a single satellite and
associated command, control, communications, and computer equipment.
Subsequent SBSS efforts, referred to as Block 20, will focus on
building a larger constellation of satellites to provide worldwide
space surveillance of smaller objects in shorter timelines. In early
2006, the effort was restructured due to schedule delays and cost
growth on Block 10 development efforts. The restructuring increased
funding and schedule margin; streamlined the assembly, integration, and
test plan; and relaxed requirements. The launch date for the Block 10
satellite has been delayed about 18 months--to April 2009. Cost has
increased by about $130 million over initial estimates.
Description: Space Radar (SR): Satellites being developed to provide
global, persistent, all-weather, day-and -night, intelligence,
reconnaissance, and surveillance capabilities; Planned development
start date: April 2009;
Recent findings: Program estimates for total funding range from $20
billion to $25 billion. In November 2006, the program revised its
critical technologies, and although the technology readiness levels--or
TRLs--are low (between TRL 3 and TRL 4), the program expects critical
technologies to be mature when the product development phase begins in
2009. The program has strived to close knowledge gaps between
requirements and resources in part by following an iterative approach,
but key performance parameters are yet to be finalized. Furthermore,
the program may not have planned enough time for design, integration,
and production activities. For example, program start to initial launch
capability for SR is shorter than what DOD has achieved or estimated
for some other complex satellite systems that have had major replan
activities. Although there is a cost sharing agreement in the FYDP, a
long-term cost-share agreement (beyond FYDP) between DOD and the
intelligence community has not been established, which adds to
uncertainty about DOD's ability to afford expensive programs such as
SR. SR has transferred its fiscal year 2008 budget estimate into the
Defense Reconnaissance Support Activities budget, and it is now
classified.
Description: Transformational Satellite Communications System (TSAT):
Communication satellites being developed by the Air Force to employ
advanced technologies in support of DOD's future communication
architecture; Planned development; Start: First quarter fiscal year
2008;
Recent findings: The latest cost estimate for TSAT is $17.7 billion
(adjusted for inflation), and the launch of the first satellite has
slipped from 2011 to 2015. DOD rescinded approval to begin preliminary
design activities and restructured the program to follow an incremental
development approach. Early tests have revealed challenges in laser
communication and limited analyses of the scalability of TSAT raises
integration risks. Final test results of Phase II testing will not be
available until late fiscal year 2007.The program may not have planned
enough time for networking activities between TSAT and other DOD
systems, and the schedule for the TSAT Mission Operations System
software code development may be too optimistic. Even with TSAT and
other DOD satellites assets, gaps between bandwidth needs and resources
are expected to continue to grow, requiring continued dependence on
commercial bandwidth. Program officials said they will need additional
government personnel to carry out oversight and management functions in
the long run.
Source: GAO analysis of DOD data and previous GAO reports.
[A] The National Security Space Acquisition Policy specifies that key
decision Point B (also referred to as Milestone B by the DOD 5000
series or Development Start by GAO best practice work) is the official
program initiation point when programs submit Selected Acquisition
Reports (SAR) to Congress and develop a formal Acquisition Program
Baseline (APB).
[End of table]
(120644):
FOOTNOTES
[1] Estimates of fiscal year 2008 spending on procurement and research,
development, test and evaluation, are based on DOD's Fiscal Year 2007
Future Years Defense Program (FYDP) plan. The fiscal year 2008 FYDP
plan was not available to us at the time we developed this testimony.
[2] GAO, Space Acquisitions: DOD Needs to Take More Action to Address
Unrealistic Initial Cost Estimates of Space Systems, GAO-07-96,
(Washington, D.C.: Nov. 17, 2006).
[3] Department of Defense, Defense Acquisition Transformation Report to
Congress (Washington, D.C., 2007).
[4] GAO, Best Practices: An Integrated Portfolio Management Approach to
Weapon System Investments Could Improve DOD's Acquisition Outcomes, GAO-
07-388 (Washington, D.C.: March 30, 2007).
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Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548:
Public Affairs:
Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548:
