Missile Defense
Actions Needed to Improve Planning and Cost Estimates for Long-Term Support of Ballistic Missile Defense Gao ID: GAO-08-1068 September 25, 2008The Department of Defense (DOD) has spent a total of over $115 billion since the mid-1980s to develop a Ballistic Missile Defense System (BMDS) comprised of land, air, and sea-based elements--such as missiles and radars--working together as an integrated system. Since the cost to operate and support a weapon system usually accounts for most of a system's lifetime costs, the resources needed to fund BMDS could be significant as DOD fields an increasing number of BMDS elements. In 2005, DOD began planning to transition responsibility for supporting BMDS elements from the Missile Defense Agency (MDA) to the services. GAO was asked to assess the extent to which DOD has (1) planned to support BMDS elements over the long-term, and (2) identified long-term operation and support costs. To do so, GAO analyzed 7 BMDS elements that will be fielded by 2015, compared DOD's plans and cost estimates to DOD and GAO key principles, and assessed the extent to which MDA and the services have agreed on responsibilities for supporting and funding BMDS elements.
DOD has taken some initial steps to plan for BMDS support, but efforts to date are incomplete, and difficulties in transitioning responsibilities from MDA to the services have complicated long-term planning. DOD key principles for weapon system life-cycle management stress the importance of completing support plans that cover a system's expected useful life before it is fielded. Although MDA has developed some policies and guidance for BMDS support planning, it has not developed support plans for three of the seven elements that GAO examined, and MDA has not completed an overall support plan for the integrated system. DOD's long-term support planning for BMDS is incomplete because it has not established a standard process clearly specifying what support planning should be completed before fielding or how to transition the responsibility for supporting BMDS elements from MDA to the services. For five of the seven elements GAO examined, MDA and the services have been unable to reach agreement on who will be responsible for providing support after 2013. DOD has drafted a proposal for BMDS management that DOD officials have stated is intended, in part, to address these issues. However, the draft proposal lacks important details, and it is not clear when it is expected to be approved and implemented. Without a standardized process for long-term support planning, uncertainty will persist regarding how the elements will be supported over the long term. DOD's recent efforts to develop operation and support cost estimates for BMDS elements have limitations and are not transparent for DOD and congressional decision makers. DOD and GAO key principles for cost estimating state that complete, credible, and independently verified cost estimates are important to support preparation of budget submissions over the short term as well as for assessing the long-term affordability of a program. DOD has started to develop operation and support cost estimates for the seven elements GAO examined, but those efforts are not yet complete and have limitations. First, the estimates are likely to change since DOD is still determining key assumptions. Second, DOD does not plan to have the estimates independently verified. Furthermore, the Future Years Defense Program, DOD's 6-year spending plan, does not fully reflect BMDS operation and support costs. DOD has not yet clearly identified BMDS operation and support costs because the department has not required that these costs are to be developed, validated, and reviewed, and it has not specified when this should be done or who is responsible for doing so. Although DOD's draft proposal for managing BMDS contains some funding suggestions, it does not address the operation and support cost limitations GAO identified. Without a requirement to develop and validate BMDS operation and support cost estimates, DOD will have difficulty preparing credible budget requests and assessing the affordability of BMDS over the long term.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-08-1068, Missile Defense: Actions Needed to Improve Planning and Cost Estimates for Long-Term Support of Ballistic Missile Defense
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Report to the Subcommittee on Strategic Forces, Committee on Armed
Services, House of Representatives:
United States Government Accountability Office:
GAO:
September 2008:
Missile Defense:
Actions Needed to Improve Planning and Cost Estimates for Long-Term
Support of Ballistic Missile Defense:
GAO-08-1068:
GAO Highlights:
Highlights of GAO-08-1068, a report to the Subcommittee on Strategic
Forces, Committee on Armed Services, House of Representatives.
Why GAO Did This Study:
The Department of Defense (DOD) has spent a total of over $115 billion
since the mid-1980s to develop a Ballistic Missile Defense System
(BMDS) comprised of land, air, and sea-based elements”such as missiles
and radars”working together as an integrated system. Since the cost to
operate and support a weapon system usually accounts for most of a
system‘s lifetime costs, the resources needed to fund BMDS could be
significant as DOD fields an increasing number of BMDS elements. In
2005, DOD began planning to transition responsibility for supporting
BMDS elements from the Missile Defense Agency (MDA) to the services.
GAO was asked to assess the extent to which DOD has (1) planned to
support BMDS elements over the long-term, and (2) identified long-term
operation and support costs. To do so, GAO analyzed 7 BMDS elements
that will be fielded by 2015, compared DOD‘s plans and cost estimates
to DOD and GAO key principles, and assessed the extent to which MDA and
the services have agreed on responsibilities for supporting and funding
BMDS elements.
What GAO Found:
DOD has taken some initial steps to plan for BMDS support, but efforts
to date are incomplete, and difficulties in transitioning
responsibilities from MDA to the services have complicated long-term
planning. DOD key principles for weapon system life-cycle management
stress the importance of completing support plans that cover a system‘s
expected useful life before it is fielded. Although MDA has developed
some policies and guidance for BMDS support planning, it has not
developed support plans for three of the seven elements that GAO
examined, and MDA has not completed an overall support plan for the
integrated system. DOD‘s long-term support planning for BMDS is
incomplete because it has not established a standard process clearly
specifying what support planning should be completed before fielding or
how to transition the responsibility for supporting BMDS elements from
MDA to the services. For five of the seven elements GAO examined, MDA
and the services have been unable to reach agreement on who will be
responsible for providing support after 2013. DOD has drafted a
proposal for BMDS management that DOD officials have stated is
intended, in part, to address these issues. However, the draft proposal
lacks important details, and it is not clear when it is expected to be
approved and implemented. Without a standardized process for long-term
support planning, uncertainty will persist regarding how the elements
will be supported over the long term.
DOD‘s recent efforts to develop operation and support cost estimates
for BMDS elements have limitations and are not transparent for DOD and
congressional decision makers. DOD and GAO key principles for cost
estimating state that complete, credible, and independently verified
cost estimates are important to support preparation of budget
submissions over the short term as well as for assessing the long-term
affordability of a program. DOD has started to develop operation and
support cost estimates for the seven elements GAO examined, but those
efforts are not yet complete and have limitations. First, the estimates
are likely to change since DOD is still determining key assumptions.
Second, DOD does not plan to have the estimates independently verified.
Furthermore, the Future Years Defense Program, DOD‘s 6-year spending
plan, does not fully reflect BMDS operation and support costs. DOD has
not yet clearly identified BMDS operation and support costs because the
department has not required that these costs are to be developed,
validated, and reviewed, and it has not specified when this should be
done or who is responsible for doing so. Although DOD‘s draft proposal
for managing BMDS contains some funding suggestions, it does not
address the operation and support cost limitations GAO identified.
Without a requirement to develop and validate BMDS operation and
support cost estimates, DOD will have difficulty preparing credible
budget requests and assessing the affordability of BMDS over the long
term.
What GAO Recommends:
GAO recommends that DOD establish a standard process for long-term BMDS
support planning and establish a requirement to estimate BMDS operation
and support costs. In response, DOD generally agreed stating that its
draft proposal for managing BMDS is intended to handle these issues.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1068]. For more
information, contact John Pendleton at (404) 679-1816 or
pendletonj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
DOD Has Taken Some Initial Steps to Plan for Support of BMDS, but
Planning to Date Is Incomplete and Complicated by Difficulties in
Transitioning Support Responsibilities to the Services:
Despite Recent Efforts, Operation and Support Cost Estimates for BMDS
Elements Have Limitations and Are Not Transparent:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: List of Selected Ballistic Missile Defense Elements, the Lead
Service, and When the Element Was or Is Planned to Be Fielded:
Table 2: Status of Agreements and Support Plans for Long-term Support
and Life-Cycle Management of BMDS Elements:
Table 3: Status of Joint Cost Estimates and Plans for Independent
Verification of Operation and Support Cost Estimates:
Table 4: Agreement on Responsibility for Funding Operation and Support
Costs after 2013:
Figure:
Figure 1: Timeline Comparing When Four Elements Were Fielded with
Support Plan Completion:
Abbreviations:
BMDS: Ballistic Missile Defense System:
DOD: Department of Defense:
FYDP: Future Years Defense Program:
MDA: Missile Defense Agency:
USD (AT&L): Under Secretary of Defense for Acquisition, Technology, and
Logistics:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 25, 2008:
The Honorable Ellen O. Tauscher:
Chairman:
The Honorable Terry Everett:
Ranking Member:
Subcommittee on Strategic Forces:
Committee on Armed Services:
House of Representatives:
The Department of Defense (DOD) has spent about $57 billion to develop
the Ballistic Missile Defense System (BMDS) since the Missile Defense
Agency (MDA) was created in 2002, and a total of over $115 billion
since the mid-1980s. The BMDS is intended to be ultimately comprised of
land, air, and sea-based elements--such as missiles and radars--working
together as an integrated, layered system capable of defeating
ballistic missiles of all ranges and in all phases of flight. DOD plans
to field an increasing number of BMDS elements over the next several
years, and since the cost to operate and support a weapon system
traditionally accounts for over 70 percent of the total cost over the
system's lifetime, the resources needed to operate and support BMDS
could be significant over time. Furthermore, in order to meet the
President's goal of fielding an initial ballistic missile defense
capability in 2004, the Secretary of Defense granted MDA a significant
amount of funding and decision-making flexibility by exempting it from
traditional weapon system development regulations, but our prior work
has shown that this flexibility has come at the cost of transparency
and accountability and has made oversight more challenging.[Footnote 1]
Although MDA has programmed approximately $800 million annually over
fiscal years 2008 through 2013 to operate and support the BMDS
elements, we previously reported that DOD has not included all known
BMDS operating and support costs in its budget[Footnote 2] and that
BMDS operation and support costs are not identified and aggregated in
the Future Years Defense Program, which is one of the principal sources
of DOD budget information available to senior DOD leadership and
Congress.[Footnote 3]
In developing an integrated BMDS, DOD's intention was for MDA to
develop BMDS elements and then transition the elements to the services
which would operate and support them. In 2005, DOD began planning to
transition responsibility for supporting BMDS elements from MDA to the
services, which involves providing a ballistic missile defense element
to a "lead" military service. Each lead service is responsible for
providing personnel, force protection, operations and support, and for
developing doctrine, organizations, and facilities requirements. The
transition process also involves lead services beginning to assume
responsibility for operating, supporting, and funding BMDS elements,
necessitating negotiations between MDA and each lead service over which
organization will provide and pay for each element's operating and
support costs in specific years. DOD has developed a transition plan
that covers the BMDS elements and is intended to guide the transition
of roles and responsibilities from MDA to the services, document the
status of agreements on cost sharing, and serve as a basis for
preparing budget submissions. Another purpose of this transition plan
is to highlight critical issues that are of executive interest for the
overall BMDS, such as the critical issues of how BMDS elements will be
managed over their life cycle, and how operation and support costs will
be shared between MDA and the services.
Since traditional oversight mechanisms are not applied to BMDS, DOD has
created various high-level groups to advise the Deputy Secretary of
Defense on ballistic missile defense issues. Most recently, DOD created
a new Missile Defense Executive Board in 2007 to recommend and oversee
implementation of strategic policies, plans, program priorities, and
investment options. The Board is developing a draft proposal for how to
improve management of BMDS elements over their life cycle including
transition of support responsibilities and how to fund operation and
support costs.
We reported earlier this year that DOD's transition efforts have, to
date, been arduous and time-consuming.[Footnote 4] Also, the House
Armed Services Committee has expressed concern about the apparent
reluctance of the services to assume responsibility for acquiring,
fielding, and sustaining missile defense capabilities.[Footnote 5]
Considering the extensive advance planning required to establish and
operate BMDS elements and potential effects on future resource needs,
we were asked to examine DOD's plans for preparing to operate and
support BMDS elements, including planning to transition BMDS elements
to the services. Accordingly, we assessed the extent to which DOD has
(1) planned for support of BMDS elements over the long term; and (2)
identified the long-term operation and support costs for the BMDS
elements it plans to field. For both objectives, we analyzed planning
and cost data for the seven BMDS elements that are already fielded or
planned for fielding by 2015. We also reviewed DOD policies and
guidance that establish DOD's overall approach for preparing to operate
and support weapon systems and ballistic missile defense. To assess the
extent to which DOD has planned for support of BMDS elements, we
compared the planning that had been done, including the extent to which
MDA and the services have agreed on responsibilities for supporting
BMDS elements, with DOD key principles[Footnote 6] for life-cycle
management to determine what aspects may be missing that could hinder
transition of responsibility for support of BMDS elements from MDA to
the services and hinder the ability to provide long-term support.
[Footnote 7] To assess whether DOD has identified the operation and
support costs to operate and support the BMDS elements it plans to
field, we compared the method DOD used in developing its operation and
support cost estimates with key principles for developing accurate and
reliable cost estimates[Footnote 8] and assessed the extent to which
MDA and the services have or have not agreed on which organization is
responsible for funding operation and support of BMDS elements. We
discussed the results of our analyses on both objectives with DOD
officials. We conducted this performance audit from August 2007 through
September 2008 in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
See appendix I for a more complete description of our scope and
methodology.
Results in Brief:
DOD has taken some initial steps to plan for BMDS support, but efforts
to date are incomplete, and difficulties in transitioning support
responsibilities from MDA to the services have complicated long-term
planning. DOD key principles for weapon system life-cycle management
stress the importance of completing support plans that cover a system's
expected useful life before it is fielded. Although MDA has developed
some policies and guidance for BMDS support planning, it has not
developed support plans for three of the seven elements we examined and
MDA has not completed an overall support plan for the integrated
system. As a result, MDA has been unable to conduct a support readiness
assessment of the overall, integrated ballistic missile defense system
as its policy intends. DOD's long-term support planning for BMDS is
incomplete because it has not developed and instituted a standard
process that clearly specifies what support planning should be
completed before elements are fielded, identifies which organization is
responsible for life-cycle management, involves the services, and
specifies how to transition support responsibilities from MDA to the
services. For example, MDA and the services have not routinely worked
together on support planning, although a DOD directive states that MDA
and the services shall work together to develop support and transition
plans, and MDA has used inconsistent methods for negotiating
transitions with the services. Moreover, MDA and the services have
generally not agreed which organization should be responsible for life-
cycle management. As a result, for five of the seven elements we
examined, MDA and the services have been unable to reach agreement on
which organization will be responsible for providing support after
2013. DOD has drafted a proposal for BMDS management that DOD officials
have stated is intended, in part, to address these issues. However, the
draft proposal lacks important details such as which organization is
responsible for long-term support planning, when such plans should be
completed, and who is accountable for ensuring such planning is
completed, and it is not clear when this draft proposal is expected to
be approved and implemented. Without a clear, agreed upon process for
long-term support planning, including guidance for negotiating
transition of the support responsibility from MDA to the services,
uncertainty will persist regarding how the elements will be supported
after 2013 and over the long term, and DOD will be unable to take
advantage of lessons learned from the transition of successive
elements. In order to improve long-term support planning for BMDS
elements, we are recommending that DOD establish a standard process,
based on key principles for life-cycle management, for long-term
support planning.
DOD's recent efforts to develop operation and support cost estimates
for BMDS elements have limitations and are not transparent for DOD and
congressional decision-makers. DOD and GAO key principles for preparing
cost estimates state that complete, credible, and independently
verified cost estimates are important to support preparation of budget
submissions over the short term as well as for assessing the long-term
affordability of the program. Although DOD has started to develop
operation and support cost estimates for all seven of the BMDS elements
we examined, those efforts have limitations. First, the estimates are
not yet complete and are likely to change over time, perhaps
significantly since MDA and the services are still determining key
assumptions, such as how support will be provided--by contractor, the
service, or a combination of the two--and where some elements may be
fielded and operated. Second, DOD does not plan to have its operation
and support cost estimates independently verified, although doing so is
a key principle for developing a credible estimate. Furthermore, the
Future Years Defense Program (FYDP), DOD's 6-year spending plan, does
not fully reflect BMDS operation and support costs that are expected to
be incurred--and these are likely to be significant since operation and
supports costs are typically over 70 percent of a system's total
lifetime cost. DOD has not clearly identified BMDS operation and
support costs because the department has not required that these costs
are to be developed, validated, and reviewed, and it has not specified
when this should be done or identified which organization is
responsible for doing so. DOD has drafted a proposal for the overall
management of BMDS, which contains some funding suggestions, but the
draft proposal lacks important details and does not address the
operation and support cost limitations we identified. Without requiring
development and validation of BMDS operation and support cost
estimates, DOD will have difficulty preparing credible budget requests
and assessing the affordability of BMDS over time. To increase
transparency and improve fiscal stewardship of DOD resources for BMDS,
we are recommending that DOD establish a requirement to estimate BMDS
operation and support costs.
In written comments on a draft of this report, DOD concurred with one
and partially concurred with five recommendations. DOD partially
concurred with the three actions we recommended to improve long-term
support planning for BMDS elements. DOD concurred with one and
partially concurred with two of the actions we recommended to require
DOD to estimate BMDS operation and support costs. In general, DOD
stated that its draft proposal is intended to address these issues.
However, as we point out in our report, DOD's draft proposal lacks
specific details and does not fully address the limitations we found.
For example, DOD's draft proposal does not specify when support plans
should be completed or specify when operation and support cost
estimates are to be developed, validated, and reviewed. By implementing
our recommendations to improve support planning, DOD would be better
positioned to reduce uncertainty regarding how the elements will be
supported over the long term and improve the transition of support
responsibility from MDA to the services. Also, we continue to believe
that DOD should take additional actions to implement our
recommendations so that it will be in a better position to prepare
credible budget requests and assess the affordability of BMDS over
time. The department's comments are reprinted in appendix II.
Background:
The Missile Defense Agency plans to develop and field ballistic missile
defense elements in increments called "blocks," with each block
providing increasing levels of capability over the previous block.
[Footnote 9] In doing so, MDA's charter states that MDA is responsible
for assuring the supportability of the system and for developing plans
with the services for BMDS elements early enough to support effective
transition.
Life-Cycle Management:
DOD policy[Footnote 10] calls for new weapon systems be managed using a
life-cycle management approach, which should include all activities for
acquiring, developing, producing, fielding, supporting, and disposing
of a weapon system over its expected lifetime. In addition, each
service is responsible for developing force structure to organize units
to accomplish missions using the new system. Life-cycle management is
to consider how the new system will be supported over its expected
useful life because system engineering and design can have a
significant effect on operations and support costs. Typically, support
planning[Footnote 11] begins early in development as DOD begins
exploring concepts for a new weapon system and the support strategy is
developed as the system is developed and completed before fielding.
However, the DOD Inspector General reported in 2006 that MDA had not
planned fully for system sustainment and had not developed a complete
integrated logistics support plan. The report concluded that without
improving its processes, including support planning, MDA faces
increased risk in successfully integrating elements into a single
system that will meet U.S. requirements for ballistic missile defense.
[Footnote 12]
A life-cycle cost estimate includes all costs associated with a weapon
system's research and development, investment, military construction,
operations and support,[Footnote 13] and disposal. Since operation and
support costs historically are the largest portion (over 70 percent) of
a weapon system's costs over its life, these costs can significantly
affect development of a life-cycle cost estimate and were the focus of
our analysis of DOD's cost estimates. DOD usually prepares an
independent life-cycle cost estimate for major weapons systems, and
these estimates typically form the basis for budget submissions. Using
a life-cycle cost estimate helps support the budget process by
providing estimates of the funding required to execute a program and
can help assess whether resources are adequate to support the program.
A key step in assuring the credibility of the estimate is acquiring an
independent cost estimate by an entity separate from those connected to
the program. Independent estimates tend to be higher and more accurate
than estimates developed by a system's program office since independent
estimators may be more objective and less likely to use optimistic
assumptions.[Footnote 14]
Transition Planning:
In its 2007 transition plan, DOD recognized that as much time as
possible--72 months or more--should be allotted to transition a BMDS
element from MDA to a military service.[Footnote 15] The transition
process may, for some elements, end at a point that DOD calls transfer-
-which is the reassignment of the MDA program office responsibilities
to a service.[Footnote 16] According to MDA and Office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics
officials, not all BMDS elements will ultimately transfer; the decision
to do so will be made on a case-by-case basis and the conditions under
which this may happen have not yet been specifically identified for
each element. MDA's 2004 charter states that the agency shall develop
plans in conjunction with the services for BMDS elements during
transition.[Footnote 17] The transition plan covers some overarching
issues and contains separate sections for each BMDS element. For
example, the transition plan includes some discussion for each element
of various topics such as doctrine, organization, training, materiel,
facilities, security, support strategies, and funding. DOD approved the
first transition plan in September 2006 and approved the second plan in
February 2008. DOD intends for its plan to guide the transition of
roles and responsibilities from MDA to the services and serve as a
basis for preparing budget submissions. Another purpose of DOD's
transition plan is to highlight critical issues that are of executive
interest for the overall BMDS. For example, the latest plan included a
critical issue of how BMDS capabilities will be managed over their life
cycle and another critical issue is how operation and support costs
will be shared between MDA and the services. Table 1 below shows the
BMDS elements, when they were or are planned to be fielded, and which
service has been designated as the lead for each element.
Table 1: List of Selected Ballistic Missile Defense Elements, the Lead
Service, and When the Element Was or Is Planned to Be Fielded1:
BMDS element: Ground-based Midcourse Defense;
Element description: This element is designed to protect the U.S.
homeland against incoming ballistic missiles launched from Northeast
Asia and the Middle East;
Lead service: Army;
Date lead service designated: October 2006;
Date element initially fielded or planned to be fielded: September
2004.
BMDS element: Aegis Ballistic Missile Defense;
Element description: This ship-based element is designed to protect
deployed U.S. forces, allies, and friends against ballistic missile
attacks and to serve as a forward-deployed sensor, especially in
support of the ground-based mission;
Lead service: Navy;
Date lead service designated: October 2006;
Date element initially fielded or planned to be fielded: September 2004
(for surveillance and track function); December 2005 for Standard
Missile -3.
BMDS element: Upgraded Early Warning Radar;
Element description: This sensor is designed to provide updated
midcourse missile tracking data to the ground-based element;
Lead service: Air Force;
Date lead service designated: October 2006;
Date element initially fielded or planned to be fielded: December 2004
for first radar. Others in December 2007, and December 2009.
BMDS element: AN/TPY-2 Radar (forward-based);
Element description: This transportable, land-based X-band radar will
be forward-based to provide additional advance warning of ballistic
missile launches;
Lead service: Army;
Date lead service designated: February 2006;
Date element initially fielded or planned to be fielded: June 2006 for
first radar. Others in fiscal years 2009 and 2011.
BMDS element: Cobra Dane;
Element description: This sensor is designed to provide updated
midcourse missile tracking data to the ground-based element;
Lead service: Air Force;
Date lead service designated: February 2006;
Date element initially fielded or planned to be fielded: October 2004.
BMDS element: Sea-based X-Band Radar;
Element description: This radar, built on a moveable sea platform, will
improve the ability to acquire, track, and discriminate decoys during
the midcourse of flight;
Lead service: Navy nominated[2];
Date lead service designated: March 2007;
Date element initially fielded or planned to be fielded: February 2007.
BMDS element: Terminal High-Altitude Area Defense;
Element description: This ground-based element is designed to defend
deployed U.S. forces and population centers against short and medium
range ballistic missiles;
Lead service: Army;
Date lead service designated: October 2006;
Date element initially fielded or planned to be fielded: November 2010
for first fire unit. Others in fiscal years 2013 and 2014.
BMDS element: European Interceptor Site;
Element description: This element is designed to protect the U.S.
homeland, allies, and friends against incoming ballistic missiles
launched from the Middle East;
Lead service: Army;
Date lead service designated: October 2006;
Date element initially fielded or planned to be fielded: 2012.
BMDS element: European Midcourse Radar;
Element description: This land-based X-band radar will be forward-based
to provide tracking data to the European Interceptor Site;
Lead service: Air Force;
Date lead service designated: August 2007;
Date element initially fielded or planned to be fielded: 2012.
BMDS element: Adjunct Sensor;
Element description: This sensor may provide additional tracking data
to supplement that of the AN/TPY-2 radars;
Lead service: unknown;
Date lead service designated: n/a;
Date element initially fielded or planned to be fielded: 2013.
Source: GAO summary of DOD information.
[1] The table does not include those elements that are not scheduled to
be fielded by 2015 such as the Airborne Laser or Space Tracking and
Surveillance System. Also, the table does not include the Patriot
Advanced Capability-3 because it transferred to the Army in March 2003.
[2] According to officials in the Office of the Under Secretary of
Defense for Acquisition, Technology, and Logistics, the Navy has not
yet been officially designated as the lead service for this radar.
However, the Navy and MDA have been negotiating management, operations,
support, and funding responsibilities.
[End of table]
Oversight:
Since BMDS development does not have to follow DOD's traditional
development and requirements processes, oversight of BMDS has evolved
over the years. Although the Director of the Missile Defense Agency
reports to the Office of the Under Secretary of Defense for
Acquisition, Technology, and Logistics, senior-level groups have been
formed to provide the Under Secretary advice on the BMDS program. In
2002, the Secretary of Defense established a group of senior DOD
officials to advise the Director of the Missile Defense Agency and the
Under Secretary of Defense for Acquisition, Technology, and Logistics
to support decision-making on the ballistic missile defense program and
make recommendations on policy, operations, acquisition, and resource
matters that affect the overall BMDS. In March 2007, DOD replaced this
group with a new Missile Defense Executive Board to recommend and
oversee implementation of strategic policies and plans, program
priorities, and investment options. The Board is supported by four
standing committees, one of which is to oversee transition from MDA to
the services and provide oversight for system operation and support. In
carrying out its duties, the Board is developing a draft proposal for
improving BMDS life-cycle management including a funding strategy.
DOD's intention is that this draft proposal will address program
planning, including funding for operations and maintenance, long-term
support planning, and how to improve the transition of elements from
MDA to the services. Finally, various other formal and informal groups
have emerged that participate in the BMDS development and fielding
process. For example, there are element-specific working groups that
discuss transition issues such as the one devoted to negotiating an
agreement between the Navy and MDA for the sea-based radar. Other
groups have emerged to provide a forum for updating service leadership
on the status of BMDS issues, discussing issues related to logistics
and support, and identifying planning that needs to be done for
European ballistic missile defense.
One major source of anticipated program costs available to Congress is
the Future Years Defense Program (FYDP). The FYDP provides information
on DOD's current and planned budget requests. It is one of DOD's
principal tools to manage the spending for its capabilities and is
available to help inform DOD and Congress about spending plans for a 6-
year time period and to make resource decisions in light of competing
priorities. The FYDP is a report that resides in an automated database,
which is updated and published to coincide with DOD's annual budget
submission to Congress. The current FYDP, submitted with DOD's fiscal
year 2008 budget, included data through fiscal year 2013. Likewise, the
FYDP that will be submitted with DOD's fiscal year 2010 budget will
include data through fiscal year 2015.
This report is one in a series of reports we have issued on ballistic
missile defense (see the list of Related GAO Products at the end of
this report). Most recently, we found that DOD lacks a sound process
for identifying and addressing the overall priorities of the combatant
commands when developing ballistic missile defense capabilities.
[Footnote 18] We reported in May 2006 that DOD had not established the
criteria that must be met before BMDS can be declared operational.
[Footnote 19] Also, in April 2007, we found that DOD and congressional
decision-makers could benefit from more complete information to assess
basing, support, infrastructure, budget requests, and DOD spending
plans when considering BMDS program and investment decisions.[Footnote
20] Also, we issue an annual assessment of DOD's progress in developing
BMDS, and in March 2008, we reported that the high level of investment
MDA plans to make in technology development warrants some mechanism for
reconciling the cost of these efforts with the program's progress.
[Footnote 21]
DOD Has Taken Some Initial Steps to Plan for Support of BMDS, but
Planning to Date Is Incomplete and Complicated by Difficulties in
Transitioning Support Responsibilities to the Services:
DOD has taken some initial steps to plan for BMDS support, but planning
efforts to date are incomplete. In addition, long-term support planning
has been complicated by difficulties in transitioning responsibility
for providing support from MDA to the services. While DOD has drafted a
proposal for BMDS management that DOD officials have stated is
intended, in part, to address this issue, the draft proposal lacks
important details. DOD's long-term support planning for BMDS is
incomplete because DOD has not developed and instituted a standard
process that clearly specifies what support planning should be
completed before elements are fielded, identifies which organization is
responsible for life-cycle management, involves the services, and
specifies how to transition support responsibilities from MDA to the
services. Without such an established process that is enforced, DOD
faces uncertainty over how BMDS elements will be supported over the
long term and will be limited in its ability to improve support
planning for future BMDS elements.
MDA Has Developed Some Guidance for BMDS Support Planning but Efforts
to Date Are Incomplete:
While MDA has developed some guidance for developing support plans for
BMDS elements and the overall system, based on Presidential and
Secretary of Defense direction, MDA has focused on fielding a defensive
ballistic missile capability as soon as practical. In 2005, MDA issued
an Integrated Program Policy and a companion Implementation Guide,
[Footnote 22] which directed MDA's BMDS element offices to develop
support plans for each element, as well as develop an integrated
support plan for the entire system, update these plans every 2 years,
and complete an assessment of readiness of the integrated plan to
support operations of the overall BMDS.
Nevertheless, planning efforts are incomplete. According to officials,
as of August 2008, three of the seven elements we examined, the forward-
based radar, the sea-based radar, and the European radar, do not have
support plans in place. Additionally, a fourth element, the Ground-
based Midcourse Defense element, has a plan that was initially
completed in 2005, but the plan is now out of date, does not reflect
the current configuration of the element, and it is therefore currently
being updated.
MDA has also issued a sustainment directive which states that support
planning should be completed as elements move through various
development phases.[Footnote 23] MDA's directive specifies four phases
with associated criteria that should be completed before exiting a
phase to ensure, in part, effective long-term support of BMDS elements.
Accordingly, initial support plans for a BMDS element should be
completed before an element progresses from the programming and
planning phase to the program execution phase and before the final
deployment phase when an element is fielded. However, two of the
elements we examined did not have support plans, even though they had
progressed to a subsequent phase of development. One of these elements,
the sea-based radar, has been categorized by MDA officials as being in
the program execution phase, but officials stated that currently there
is no support plan for this element and MDA has just recently begun to
develop one. In addition, MDA officials told us that portions of the
forward-based radar's development are described as being in the
deployment phase since the element has been fielded, but as of August
2008, there was no support plan for the radar and officials told us a
plan would be completed by the end of the year. MDA officials recognize
that past efforts in support planning have been incomplete. In
response, MDA is proposing forming a logistics directorate, but it is
not clear what the roles and responsibilities of this group will be or
how soon the group will be fully staffed.
Incomplete support planning is not a new issue. In 2006, DOD's
Inspector General reported[Footnote 24] that MDA had not developed an
overall, integrated, BMDS-wide support plan, but had developed a
summary document containing only general support planning information
for four elements. The DOD Inspector General's report concluded that
without improving support planning, MDA faced increased risk in
successfully integrating elements into a single system that will meet
U.S. requirements. In 2006, MDA revised the document to include
information on a total of 8 elements, but the document still did not
contain more than high-level information on how each individual element
would be supported and did not contain specific detail for how support
would be managed across the integrated system. As of August 2008, MDA
still had not developed an overall, integrated, BMDS-wide support plan.
Without current support plans for every element and an integrated,
system-wide support plan, MDA will be unable to conduct a support
readiness assessment of the overall, integrated ballistic missile
defense system as directed by its guidance. As a result, MDA cannot
ensure that the integrated system has appropriate plans in place to
support operations.
DOD's Support Planning for BMDS Has Not Followed Key Principles:
DOD's planning to support BMDS over the long term has not followed
DOD's key principles of weapon system life-cycle management. Although
BMDS is not required to follow traditional weapon system life-cycle
management processes, MDA's charter states that BMDS will be managed
consistent with the principles of the traditional weapon system process
and that the office of the Under Secretary of Defense for Acquisition,
Technology, and Logistics (USD (AT&L)) and MDA will determine which
principles will be applied to the management of BMDS. However, USD
(AT&L) and MDA have not determined and communicated to the services
which parts of the usual life-cycle management processes apply to each
element. Our prior work has shown that organizations should have
defined guidance for planning and should communicate this guidance to
stakeholders.[Footnote 25]
While DOD's key principles of weapon system life-cycle management state
that support plans should be completed before a system is fielded, DOD
has fielded BMDS elements before developing support plans. Of the
elements we examined, three of the five elements that had been fielded
as of August 2008 did not have support plans in place before the
element was fielded. MDA fielded the Ground-based Midcourse Defense
element in 2004 for limited defensive operations, but a support plan
was not developed until 2005 and, officials said, it is now out of
date. Similarly, MDA fielded a forward-based radar in Japan in 2006,
but as of August 2008, the element still did not have a support plan.
Finally, as of August 2008, MDA has not completed a support plan for
the sea-based radar, even though the element was fielded in 2007 and is
available for emergency use. Figure 1 below shows, for selected
elements, a comparison of when the element was fielded to when the
element's support plan was, or is expected to be, completed.
Figure 1: Timeline Comparing When Four Elements Were Fielded with
Support Plan Completion:
[See PDF for image]
This figure is a timeline comparing when four elements were fielded
with support plan completion, as follows:
Calendar year: 2004;
Upgraded Early Warning Radar: December: Support plan drafted; Element
fielded at Beale, California;
Forward-Based X-Band Radar (AN/TPY-2): [Empty];
Sea-Based X-Band Radar: [Empty];
Terminal High Altitude Area Defense: [Empty].
Calendar year: 2005;
Upgraded Early Warning Radar: [Empty];
Forward-Based X-Band Radar (AN/TPY-2): [Empty];
Sea-Based X-Band Radar: [Empty];
Terminal High Altitude Area Defense: [Empty].
Calendar year: 2006;
Upgraded Early Warning Radar: October: Air Force named lead service;
Forward-Based X-Band Radar (AN/TPY-2): February: Army named lead
service; June: Element fielded in Japan;
Sea-Based X-Band Radar: [Empty];
Terminal High Altitude Area Defense: February: Current support plan
done with Army input; October: Army named lead service.
Calendar year: 2007;
Upgraded Early Warning Radar: December: Element fielded at Fylingdales,
United Kingdom;
Forward-Based X-Band Radar (AN/TPY-2): [Empty];
Sea-Based X-Band Radar: February: Element fielded in Alaska for
emergency use; March: Navy nominated to be lead service;
Terminal High Altitude Area Defense: [Empty].
Calendar year: 2008;
Upgraded Early Warning Radar: August: Support information has been
incorporated in 2007 transition plan;
Forward-Based X-Band Radar (AN/TPY-2): August: Support plan not yet
complete;
Sea-Based X-Band Radar: August: Support plan not yet complete;
Terminal High Altitude Area Defense: August: Analysis of support
options ongoing.
Calendar year: 2009;
Upgraded Early Warning Radar: December: Estimated fielding of element
at Thule, Greenland;
Forward-Based X-Band Radar (AN/TPY-2): [Empty];
Sea-Based X-Band Radar: [Empty];
Terminal High Altitude Area Defense: [Empty].
Calendar year: 2010;
Upgraded Early Warning Radar: [Empty];
Forward-Based X-Band Radar (AN/TPY-2): [Empty];
Sea-Based X-Band Radar: [Empty];
Terminal High Altitude Area Defense: November: Expected fielding of
first unit at Ft. Bliss, Texas.
Source: GAO analysis of DOD information.
[End of figure]
MDA's support planning may not cover the elements' expected useful
life. Typically, weapon system developers are expected to develop
support plans that provide detail for support that will be provided
throughout a system's life cycle. MDA officials told us that, in
general, BMDS elements have an expected useful life of 20 years.
However, MDA's sustainment directive only applies until support
responsibilities for an element have transitioned from MDA to the lead
service. In general, MDA has agreed to support BMDS elements via
contractors through 2013. However, Army and Navy officials told us that
in some cases, they may prefer to perform some support functions within
their organization and have begun some efforts to determine to what
extent that should be done. For example, the Terminal High Altitude
Area Defense (THAAD) element support plan assumes contractor-provided
support, but Army officials told us that MDA and the Army are currently
conducting an analysis of support options for THAAD, including
contractor-or service-provided or a mix of the two. Depending on
results of analyses of support options, BMDS support planning for some
elements may change, making it difficult for DOD to consolidate element
support planning into an overall, integrated system support plan.
Difficulties in Transitioning BMDS Elements from MDA to the Services
Complicate Long-term Support Planning:
DOD has experienced difficulties in long-term support planning because
DOD has not developed and instituted a standard process that clearly
specifies what support planning should be completed before elements are
fielded, identifies which organization is responsible for life-cycle
management, involves the services, and specifies how to transition
support responsibilities from MDA to the services. Until DOD takes
action to do so, DOD will be unable to ensure that individual elements
will be sustained after 2013. Also, without such a standard process,
DOD's long-term support planning for BMDS has been faced with a number
of challenges.
The first challenge affecting long-term support planning is that MDA
and the services have not agreed on which organization should be
responsible for long-term life-cycle management responsibilities,
including developing long-term support plans. DOD policy and guidance
state that the program manager is responsible for life-cycle management
activities, including developing support plans, and is the single point
of accountability for sustainment of a weapon system throughout its
life. Additionally, our prior work has shown that establishing clear
roles and responsibilities can improve outcomes by identifying who is
accountable for various activities. However, in negotiating transition
for some BMDS elements, MDA and the services disagree over which
organization will be responsible for performing life-cycle management
responsibilities, such as providing and planning for support over the
long term. As a result, for five of the seven elements we examined, MDA
and the services have been unable to reach agreement on who will be
responsible for providing support and how these elements will be
supported after 2013, even though MDA officials have stated that most
elements are expected to have a useful life of 20 years. For example,
MDA hopes to have the Army assume support responsibilities after 2013
for the Terminal High Altitude Area Defense element, the forward-based
radar, and the Ground-based Midcourse Defense element. However, Army
officials stated that they have not agreed to take over support of
these elements at that time. Moreover, Navy officials stated that all
life-cycle issues have to be considered to prevent the emergence of
unplanned, future costs and intend to have the responsibilities for
life-cycle support of the sea-based radar understood and apportioned
between MDA and the Navy and documented prior to the formal transfer of
the element. Table 2 below shows, by element, whether there is
agreement on who provides support after 2013 and on who should be
responsible for life-cycle management, and the status of support
planning.
Table 2: Status of Agreements and Support Plans for Long-term Support
and Life-cycle Management of BMDS Elements:
Element: Ground-Based Midcourse Defense;
Lead service: Army;
Agreement on support after 2013 and life-cycle management
responsibilities: No;
Status of element support plan development: Boeing developed a support
plan in 2005, but it did not include Army input. MDA officials said the
2005 plan is out of date and they are drafting a new version and plan
to include Army input.
Element: AN/TPY-2 (forward-based);
Lead service: Army;
Agreement on support after 2013 and life-cycle management
responsibilities: No;
Status of element support plan development: MDA officials say they are
drafting a plan, but the Army's involvement is to be determined.
Element: Terminal High Altitude Area Defense; (THAAD);
Lead service: Army;
Agreement on support after 2013 and life-cycle management
responsibilities: No;
Status of element support plan development: The most recent version of
the element support plan is dated February 2006, included Army input,
and was signed by both MDA's THAAD office and Army THAAD commanders.
Element: Aegis Ballistic Missile Defense;
Lead service: Navy;
Agreement on support after 2013 and life-cycle management
responsibilities: Yes;
Status of element support plan development: No separate support plan
for Aegis BMD exists. The element relies on the Navy's existing Aegis
operations and logistics support infrastructure.
Element: Sea-Based X-Band Radar;
Lead service: Navy nominated;
Agreement on support after 2013 and life-cycle management
responsibilities: No;
Status of element support plan development: MDA officials said they
plan to draft one by the end of calendar year 2008, but the Navy's
involvement is to be determined.
Element: Upgraded Early Warning Radar;
Lead service: Air Force;
Agreement on support after 2013 and life-cycle management
responsibilities: Yes;
Status of element support plan development: The Air Force drafted a
support plan in 2004, but the strategy has since been incorporated into
the annual transition plan.
Element: European Midcourse Radar;
Lead service: Air Force;
Agreement on support after 2013 and life-cycle management
responsibilities: No;
Status of element support plan development: MDA and the Air Force are
planning to have the contractor develop a support plan.
Source: GAO summary of DOD information.
[End of table]
Second, although DOD has designated a lead service to assume support
responsibilities for most BMDS elements that have been or will be
fielded by 2015, MDA and the services have not consistently worked
together to develop plans to transition responsibility for long-term
support. A DOD directive states that lead services, who will assume
support responsibilities for BMDS, should work with MDA to develop
transition and support plans.[Footnote 26] However, there was little or
no service input in developing transition plans for three of the seven
elements we examined--the ground-based element, sea-based radar, and
the European radar. The services have been involved in support planning
for ballistic missile defense capabilities added to already existing,
legacy systems, but not routinely involved in support planning for
newer elements. For example, MDA officials told us the Air Force was
involved in support planning for the Upgraded Early Warning Radar since
a ballistic missile defense capability was added to an existing Air
Force radar. Similarly, the Navy included support planning for the
Aegis Ballistic Missile Defense element in its existing support for
Aegis ships. For non-legacy elements, however, services have either not
been involved in support planning at all or have not been involved
"early" enough to influence design decisions that may affect how an
element is to be supported. For example, after the 2004 fielding of the
ground-based element, the contractor developed a support plan for the
element, but MDA and Army officials told us that since the plan was
developed before the Army was named lead service, the plan had little
to no Army input. Further, the Army stated that it is reluctant to
assume responsibility for support contracts involving design decisions
made without Army involvement. Also, Army officials said that it would
have been helpful if they had input into facilities and security design
decisions for the forward-based radar that were made before they were
named lead service.
Third, MDA and the services use methods to negotiate transition of
support responsibilities from MDA to the services that are
inconsistent, resulting in confusion over which method is authoritative
and binding. Our prior work has shown that it is important for
organizations to provide clear and complete guidance to their
subordinate organizations.[Footnote 27] According to our analysis of
the transition plan and what DOD officials have told us, it is unclear
whether the transition plan is binding on the parties, and the plan
does not provide specific guidance to the services or MDA for how to
transition support responsibilities of individual elements. As a
result, the transition plan is not the preferred forum for negotiating
transition for all elements. For example, Air Force officials told us
that they prefer using the transition plan as their negotiation forum
because it identifies open issues unique to each element, and documents
what MDA and the Air Force will do in specific years. In contrast, Navy
officials told us that they prefer to use a memorandum of agreement to
document transition agreements for each element that is signed by MDA
and Navy leaders since it can take several months for the transition
plan to be approved. As a result of the transition plan timing, Navy
officials told us that the transition plan may not always reflect the
Navy's views, particularly for new elements such as the sea-based
radar. Without a clear agreement on how to negotiate transition of
support responsibilities, MDA has proposed that each service have a
memorandum of agreement that would provide a strategic overview of how
BMDS elements will transition from MDA to a service. These service
memoranda of agreement would be supplemented by an element-specific
transition plan that would provide a detailed, tactical view and
specify when and how responsibilities, such as support, will transition
from MDA to the service. However, DOD has not documented that this
approach is the preferred method. As a result, transition of support
responsibilities seems to occur ad hoc, element by element, with no
standard process. Further, DOD will not be able to take advantage of
lessons learned from one transition effort to the next without a
consistent, documented process for how support responsibilities are
transitioned from MDA to the services.
DOD Is Developing a Draft Proposal for Managing BMDS, but the Draft
Proposal Lacks Important Details:
The Missile Defense Executive Board is developing a proposal to improve
management of BMDS elements, in part, to address support and transition
issues. DOD created the Missile Defense Executive Board in 2007 to
recommend and oversee implementation of strategic policies, plans,
program priorities, and investment options for BMDS. The draft proposal
states that BMDS should be managed as a portfolio to ensure major
decisions take into account the BMDS life-cycle and include all major
stakeholders. The proposed portfolio management suggests defense-wide
funding for research and development, procurement, operation and
support, and military construction. Finally, the draft proposal states
that the responsibilities of DOD stakeholders in BMDS life-cycle
management should be clarified. As the Board's Chair, the office of USD
(AT&L) has taken the lead in developing this draft proposal. USD (AT&L)
officials explained that this draft proposal is intended to bridge the
gap that exists between the traditional life-cycle system management
processes and how BMDS is currently being fielded and managed. This
process is also intended to: identify which principles of traditional
life-cycle system management should be applied to BMDS, such as
milestone reviews and support planning; specify how to transition
responsibility for support from MDA to the services; and explain when a
lead service should become involved.
However, the draft proposal is very general and lacks important
details. In particular, the draft proposal does not specify the role or
timing for service involvement in developing support plans for
elements, that support plans are to cover the elements' expected life,
be completed before fielding, how MDA and the services should negotiate
transition of responsibility for providing support of BMDS elements, or
when the draft proposal is expected to be approved and implemented.
Also, MDA and USD (AT&L) officials told us that the draft proposal
would not require discussions about life-cycle management for elements
until the element has a lead service--which makes it difficult for the
lead service to provide input into support decisions.
Despite Recent Efforts, Operation and Support Cost Estimates for BMDS
Elements Have Limitations and Are Not Transparent:
DOD's recent efforts to develop operation and support cost estimates
for BMDS elements have limitations and are not transparent for DOD and
congressional decision-makers. Although DOD has started to develop
operation and support cost estimates for BMDS elements, the estimates
are not complete and have limitations. Furthermore, BMDS operation and
support costs are not transparent in the Future Years Defense Program
(FYDP). DOD has not yet clearly identified BMDS operation and support
costs because the department has not required that these costs are to
be developed, validated, and reviewed according to key principles for
cost estimating, and it has not specified when this should be done or
identified who is responsible for doing so. DOD has developed a draft
proposal for the overall management of BMDS, but the draft proposal
lacks important details and does not address the limitations we
identified. Without a requirement to develop operation and support cost
estimates, DOD and the services will have difficulty preparing credible
and transparent budget requests and face unknown financial obligations
over the long term, thus hindering decision-makers' ability to make
informed tradeoffs among competing priorities both across BMDS elements
and across the department.
DOD Is Developing Some BMDS Operation and Support Cost Estimates, but
Efforts Are Not Yet Complete:
DOD is developing operation and support cost estimates for all seven of
the BMDS elements we examined, which it intended to use in preparing
its fiscal year 2010 through 2015 spending plan and to facilitate
transition of funding responsibilities from MDA to the services.
[Footnote 28] Thus far, MDA and the services have jointly developed and
agreed on cost estimates for only two of the seven elements we
examined--the Aegis ballistic missile defense and the Upgraded Early
Warning Radar. MDA and the services have not yet completed the joint
estimates for operation and support costs for the remaining five
elements. The status of each of these remaining efforts is summarized
below.
* Army--Ground-based Midcourse Defense, Terminal High Altitude Area
Defense, and the forward-based radar: As of July 2008, MDA and the Army
had not completed operation and support cost estimates for these three
elements. MDA initially planned to complete the estimates by February
2008. The Army and MDA have agreed on the methodologies for developing
operation and cost estimates. However, Army officials stated that, as
of July 2008, the estimates are not complete because some of the
assumptions may change and the estimates have not been reviewed and
approved by the Army Cost Review Board. For example, an Army cost
estimator told us that the estimate for the forward-based radar is not
complete because many of the major assumptions that will drive costs,
such as physical site location, infrastructure, and security
requirements, remain undetermined.
* Air Force--European radar: The Air Force and MDA began to develop a
joint estimate for the European radar in August 2008 and plan to update
the estimate as assumptions are refined. However, since all base
operating support requirements are not finalized, the Air Force
spending plan for fiscal years 2010 through 2015, which is due to the
Office of the Under Secretary of Defense (Comptroller) in August 2008,
may not include all the operation and support costs for the European
radar.
* Navy--Sea-based radar: The Navy and MDA plan to develop a joint
estimate in fiscal year 2009. However, MDA and the Navy have separately
developed operation and support cost estimates for this element. Using
their separate estimates, MDA and Navy officials met to discuss the
differences. According to MDA and Navy cost estimators, the Navy's
estimate was approximately $10 million a year higher than MDA's, but
MDA officials agreed that the Navy's estimated platform maintenance
costs were more accurate. The resulting cost estimate is intended to
support a cost-sharing agreement between MDA and the Navy which, as of
August 2008, had not been finalized.
MDA and some service officials told us that the longer it takes to
finish the estimates and agree on funding responsibilities, the less
likely it is that these estimates will be reflected in the spending
plans for fiscal years 2010 through 2015, which are currently under
development. MDA officials have stated that their intention is to
update these estimates annually, beginning in October 2009; however, as
of August 2008, there were no signed agreements or requirements for the
agency to do so.
Ongoing Efforts to Develop Operation and Support Cost Estimates Have
Limitations:
MDA and the services are beginning to estimate BMDS operation and
support costs, but these efforts have limitations. First, the initial
estimates are not yet complete and are likely to change over time,
perhaps significantly, since MDA and the services are still determining
key assumptions, such as how support will be provided--by contractor,
the service, or a combination of the two--and where some elements may
be fielded and operated. DOD and GAO key principles for preparing cost
estimates state that complete and credible cost estimates are important
to support preparation of budget submissions over the short term as
well as to assess the long-term affordability of the program.
As discussed earlier in this report, MDA and the services have not
completed long-term support planning and they are still in the process
of determining where some BMDS elements will be fielded and operated.
DOD and GAO key principles for developing accurate and reliable cost
estimates recommend that all assumptions that can profoundly influence
cost should be identified before calculating the estimate.[Footnote 29]
However, MDA and the services have not determined how some of the
elements will be supported over the long term, which will affect
operation and support costs, such as maintenance, base operating
support, and facilities. For instance, during research, development,
and fielding, MDA is using contractors to support the BMDS elements.
However, after the elements transition from MDA to the services, the
services may decide to support the elements using their own military
personnel and facilities or possibly a combination of contractor
support and military service support. For example, if the Army used its
own operation and support personnel, the cost estimate could increase,
since Army would require facilities costing about $138 million for 41
different buildings.
Further, assumptions about where two of the BMDS elements will be
fielded and operated could change which, when finalized, could affect
key assumptions and the resulting cost estimate. An official in the
Office of the Secretary of Defense, Cost Analysis Improvement Group,
stated that any ambiguity in the estimate's assumptions lowers the
quality of the estimate and creates uncertainty about the results. For
example, the Navy and MDA have not determined the amount of time the
sea-based radar will spend on location in Adak, Alaska, in transit, and
at sea. The greater use of fuel alone for increased time spent in-
transit could significantly affect the operation and support cost
estimate for the sea-based radar. Also, in developing the cost estimate
for the Terminal High Altitude Area Defense, MDA and Army assumed
peacetime operations with all of the units to be located at one site
within the continental United States. However, if the Army decides to
forward deploy one or more of the units for peacetime rotations, as is
done for other similar weapon systems such as the Patriot system, the
cost estimate could change significantly. Also, additional
infrastructure and operation and support costs may be incurred if the
Army decides to base the Terminal High Altitude Area Defense units at
more than one site within the United States.
The second major limitation to DOD's cost estimates is that DOD does
not plan to have the operation and support cost estimates for all the
elements independently verified. DOD and GAO key principles for cost
estimating state that independent verification of cost estimates is
necessary to assure accuracy, completeness, and reliability. In typical
weapon system development, cost estimates--including estimates for
operation and support costs--are developed, independently validated,
and reviewed by senior DOD leadership before a system is fielded.
However, since MDA is exempt from traditional DOD weapon system
development processes, there is no requirement for independent cost
estimates, and DOD's Cost Analysis Improvement Group prepares
independent cost estimates only at MDA's request. As of August 2008,
MDA had requested only independent estimates of operation and support
costs for two of the seven BMDS elements we reviewed. The Cost Analysis
Improvement Group completed an estimate for Aegis ballistic missile
defense in 2006 and is currently developing an estimate, including
operation and support costs, for the European radar and interceptor
site. Independently validated cost estimates are especially important
to formulating budget submissions and DOD's 6-year spending plan, the
FYDP, which is submitted to Congress, since, historically, cost
estimates created by program offices are lower than those that are
created independently.
Nevertheless, MDA and Cost Analysis Improvement Group officials have
stated that there is no firm schedule or agreement to develop
independent operation and support estimates for any of the other five
BMDS elements we reviewed, including those that are already fielded,
such as the forward-based radar, or will soon be fielded, such as the
Terminal High Altitude Area defense element. However, even though the
Army Cost Review Board[Footnote 30] will be reviewing the operation and
support cost estimates for the Army's three elements, these reviews do
not constitute an independently developed cost estimate. MDA officials
have stated that their priority is for the Cost Analysis Improvement
Group to develop independent cost estimates for the research,
development, and procurement costs of BMDS blocks, and this effort will
not include independently estimating operation and support costs. MDA
officials stated that they intend to ask the Cost Analysis Improvement
Group to begin working on independent operation and support cost
estimates after the block estimates are completed. However, MDA
officials also acknowledged that there is no requirement for
independent validation of operation and support estimates and the Cost
Analysis Improvement Group would not begin its work on operation and
support cost estimates until at least late 2009. Without credible long-
term operation and support cost estimates, DOD and the services face
unknown financial obligations for supporting BMDS fielding plans which
will hinder budget preparation and assessment of long-term
affordability. Table 3 below shows whether the joint operation and
support cost estimates have been completed, whether the cost estimates
will be independently verified, and the status of the joint estimates.
Table 3: Status of Joint Cost Estimates and Plans for Independent
Verification of Operation and Support Cost Estimates:
Element: Aegis Ballistic Missile Defense;
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: Yes;
Joint operation and support cost estimate completed?: Yes;
Status of joint operation and support cost estimate: MDA and the Navy
agreed on the operation and support costs through a Memorandum of
Agreement.
Element: Ground-based Midcourse Defense;
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: No;
Joint operation and support cost estimate completed?: No;
Status of joint operation and support cost estimate: In Process--Joint
MDA/Army estimate has not been reviewed and approved by the Army Cost
Review Board.
Element: Terminal High Altitude Area Defense;
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: No;
Joint operation and support cost estimate completed?: No;
Status of joint operation and support cost estimate: In Process--Joint
MDA/Army estimate has not been reviewed and approved by the Army Cost
Review Board.
Element: AN/TPY-2 (forward-based);
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: No;
Joint operation and support cost estimate completed?: No;
Status of joint operation and support cost estimate: In Process--Joint
MDA/Army estimate has not been reviewed and approved by the Army Cost
Review Board.
Element: Sea-based Radar;
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: No;
Joint operation and support cost estimate completed?: No joint
estimate, but MDA and the Navy developed separate estimates;
Status of joint operation and support cost estimate: MDA and the Navy
prepared separate estimates, met to discuss differences, and agreed on
the results. The Navy and MDA plan to develop a joint cost estimate in
2009.
Element: Upgraded Early Warning Radar;
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: No;
Joint operation and support cost estimate completed?: Yes;
Status of joint operation and support cost estimate: MDA and the Air
Force jointly agree on cost estimates through the transition plan.
Element: European Midcourse Radar;
Independent verification of the cost estimate by the Cost Analysis
Improvement Group?: Yes, in process;
Joint operation and support cost estimate completed?: No;
Status of joint operation and support cost estimate: The Air Force and
MDA began to develop a joint estimate for the European radar in August
2008.
Source: GAO summary of DOD information.
[End of table]
BMDS Operation and Support Costs Are Not Transparent in DOD's Future
Years Defense Program:
The cost to operate and support the BMDS elements is not transparent in
the FYDP and, as a result, DOD may have difficulty communicating to
congressional decision-makers how much it will cost over time to
support DOD's fielding plans. For example, the FYDP, DOD's 6-year
spending plan, does not fully reflect BMDS operation and support costs
that are expected to be incurred--and these are likely to be
significant since operation and support costs are typically over 70
percent of a system's total lifetime costs. Key principles for
estimating program costs note that credible cost estimates are the
basis for establishing and defending spending plans. We and DOD have
repeatedly recognized the need to link resources to capabilities to
facilitate DOD's decision-making and congressional oversight. However,
four factors hinder the visibility of BMDS operation and support costs
in the FYDP.
First, for five of the seven elements we examined, MDA and the services
have not yet agreed on which organization is responsible for funding
operation and support costs after fiscal year 2013, as shown in Table 4
below.
Table 4: Agreement on Responsibility for Funding Operation and Support
Costs after 2013:
Element: Aegis Ballistic Missile Defense; Agreement on responsibility
for funding operation and support costs after 2013?: Yes.
Element: Ground-based Midcourse Defense;
Agreement on responsibility for funding operation and support costs
after 2013?: No.
Element: Terminal High Altitude Area Defense;
Agreement on responsibility for funding operation and support costs
after 2013?: No.
Element: AN/TPY-2 (forward-based);
Agreement on responsibility for funding operation and support costs
after 2013?: No.
Element: Sea-based X-Band Radar;
Agreement on responsibility for funding operation and support costs
after 2013?: No.
Element: Upgraded Early Warning Radar;
Agreement on responsibility for funding operation and support costs
after 2013?: Yes.
Element: European Midcourse Radar;
Agreement on responsibility for funding operation and support costs
after 2013?: No.
Source: GAO summary of DOD information.
[End of table]
As a result, all of the BMDS operation and support costs will not be
reflected in the FYDP for fiscal years 2010 through 2015, which is
currently under development. For example, the Army and MDA are still
negotiating memoranda of agreements for the Ground-based Midcourse
Defense element, Terminal High Altitude Area Defense, and forward-based
radar that are intended, in part, to specify which organization is to
fund operation and support costs in which fiscal years. One Army
official estimated that it could take up to 18 months for these
agreements to be signed. Hence, the Army will not be including all the
costs in its budget for fiscal years 2010 through 2015 other than what
the Army has already agreed to fund, such as security for the first
forward-based radar at Shariki, Japan and some base support costs at
Ft. Greely, Alaska. Also, MDA has not yet reached agreement with the
Navy and the Air Force on which organization will fund operation and
support costs for the sea-based radar and the European radar,
respectively. The extent to which the FYDP for fiscal years 2010
through 2015 will include all of the operation and support costs that
might be incurred for these elements is unclear.
The second factor that hinders visibility of BMDS operation and support
costs is that DOD's transition plan, which is intended to reflect the
most current cost agreements between MDA and the services, has not been
completed in time for the services to use as they prepare their budgets
and spending plans. The 2006 transition plan was approved in September
2006 and was intended to support the development of the budget and
spending plan for fiscal years 2008 through 2013, but the services were
required to submit their budgets to DOD in August 2006, which allowed
no time for the services to alter their budget submissions accordingly.
Similarly, the 2007 transition plan was originally intended to
influence development of the fiscal year 2008 budget, but it was not
approved until February 2008--too late to support development of the
fiscal year 2008 budget. In commenting on the 2007 transition plan, the
Army stated that the plan was not the basis for the Army's budget
submission. Consequently, the transition plan has not been effective in
assisting development of the services' budget and FYDP spending plans.
The third factor that hinders transparency is that DOD does not clearly
identify and aggregate BMDS operation and support costs in the FYDP. We
previously reported that there is no FYDP structure to identify and
aggregate ballistic missile defense operational costs. In 2006, we
recommended that DOD develop a structure within the FYDP to identify
all ballistic missile defense operational costs.[Footnote 31] However,
as of August 2008, according to an official in the Office of the Under
Secretary of Defense (Comptroller), DOD has not adjusted the FYDP
structure to allow identification and aggregation of ballistic missile
defense operation and support costs.
Fourth, as the services develop their spending plans, funding BMDS
operation and support costs will compete with other service priorities.
Service officials stated that BMDS operation and support costs will
have to come out of their operation and maintenance budgets, which fund
the training, supply, and equipment maintenance of military units, as
well as the administrative and facilities infrastructure of military
bases. Priorities within this fund are highly competitive and BMDS
operation and support would have to compete against all other service
operation and maintenance priorities. It is therefore unclear how much
of the operation and support costs will ultimately be reflected in the
services' budget submissions and spending plans, and DOD faces a risk
that operation and support for BMDS will be funded unevenly across
elements.
DOD Has Not Required That Operation and Support Cost Estimates Be
Developed:
DOD has not yet clearly identified BMDS operation and support costs
because the department has not required that these costs be developed,
validated, and reviewed, and it has not specified when this should be
done or identified who is responsible for doing so. Without such a
requirement, DOD's operation and support cost estimates will continue
to have limitations and will not be transparent in the FYDP. As a
result, DOD will have difficulty preparing credible budget requests and
estimating long-term costs, which are important in assessing
affordability over time.
As mentioned earlier in this report, DOD's Missile Defense Executive
Board is developing a draft proposal for the overall management of
BMDS, which is intended to include an approach for managing and funding
operation and support; however, the draft proposal is not well defined.
The draft proposal suggests funding operation and support costs from a
defense-wide account which, in theory, would allow these costs to be
clearly identified and would alleviate the pressure on the services'
budgets to fund operation and support for BMDS. However, this proposal
as drafted to date does not fully address the operation and support
cost limitations identified in this report. Specifically, the draft
proposal to date is not well defined, and the explicit process
detailing how it would work has not been developed. Among other things,
the draft proposal does not specify how MDA and the services will
jointly determine the amount of operation and support funding that is
needed; when and how operation and support cost estimates are to be
developed, validated, and reviewed; or who should be responsible for
doing so. Also, the draft proposal does not include a requirement for
senior level review of cost estimates where the cost drivers and
differences between the program estimates and independent estimates
could be reviewed and explained. In typical weapon system programs, the
program office estimate and the independent estimate are reviewed by
senior DOD leaders[Footnote 32] and differences explained. Finally, it
is not clear when the draft proposal will be approved or implemented.
As a result, there is little likelihood that the upcoming DOD spending
plan for fiscal years 2010 through 2015 will contain significant
improvements in the visibility of BMDS operation and support costs.
Conclusions:
Although DOD has taken some initial steps to plan for support of BMDS
elements, without a clearly defined process for long-term support
planning, DOD is not poised to effectively manage the transition of
BMDS support responsibilities from MDA to the services or to plan for
their support over the long term. This will become increasingly
important in years to come as more elements are fielded and operation
and support costs begin to increase. Further, if the lead service is
not actively involved early enough to influence support planning, the
services may have little time to prepare to assume responsibility for
the elements and could risk being unable to provide support for an
element in the short term, particularly for new elements that did not
originate in a service, such as the adjunct sensor. At the same time,
DOD may face difficulties determining how the overall BMDS and
individual elements will be sustained over the long term. MDA is not
required to follow all of DOD's traditional life-cycle management
processes for weapon system programs. However, unless DOD takes action-
-either via the Missile Defense Executive Board's draft proposal or by
some other means--to establish when support planning that covers the
element's expected life and involves the services is to be completed,
to specify who is responsible for life-cycle management and specify
what this entails, and to establish accountability for ensuring these
steps are completed, Congress will lack assurance that key decisions
have been made that involve the services for which organization is
responsible for providing support and how that support will be provided
over the long term. Further, as Congress considers requests to fund
operation and support for BMDS elements, in the face of many competing
priorities, decision-makers may lack confidence that DOD has plans in
place to assure the overall long-term supportability of this complex
and costly system.
As one of DOD's largest weapon system investments, BMDS could easily
incur billions of dollars in operation and support costs over time.
Operation and support typically comprises over 70 percent of a weapon
system's total cost over its life. It is therefore critical that DOD
and congressional decision-makers have complete, credible, and
transparent cost information with which to evaluate budget requests in
the near term and to evaluate whether fielding plans are affordable
over the long term as an increasing number of BMDS elements are
fielded. Given the program's limited transparency to date, Congress is
already limited in its ability to evaluate the near-and long-term
budget implications of decisions already made to develop and field BMDS
elements. Until DOD develops accurate, realistic, and transparent cost
estimates according to key principles, including independent
verification, its estimates will continue to lack the credibility
necessary for building budget submissions and spending plans. Also,
since MDA and the services have, in general, not reached agreement on
who will pay for operation and support after 2013, and since BMDS will
compete with other service priorities, there is a risk that operation
and support funding for BMDS elements will vary from element to
element. Until DOD requires that credible estimates be developed and
until DOD specifies how BMDS operation and support funds will be
prioritized, allocated, and distributed, the department risks being
unable to clearly identify and align operation and support cost with
fielding plans or to assure that funds are available for the operation
and support of the missile defense elements over the long term.
Further, the department will continue to lack internal controls to
manage and oversee a significant number of federal dollars. Moreover,
DOD and the services face unknown financial obligations to support BMDS
elements over the long term. Finally, decision-makers inside and
outside DOD will not have a sound basis with which to make difficult
funding tradeoffs among competing priorities both across BMDS elements
and across the department.
Recommendations for Executive Action:
We recommend that the Secretary of Defense take the following six
actions:
To improve planning to support BMDS elements, including planning for
the transition of support responsibilities from MDA to the services, we
recommend that the Secretary of Defense direct the Under Secretary of
Defense for Acquisition, Technology, and Logistics, establish a
standard process for long-term support planning that adheres to key
principles for life-cycle management, including:
* establishing timelines for planning that must be completed before
each element is fielded, such as naming a lead service, involving
services in support and transition planning, and deciding when support
responsibilities will be transitioned to the services;
* requiring active lead service participation in developing long-term
support plans and designating what support planning should be completed
before elements are fielded; and:
* specifying which organization is responsible for life-cycle
management and identifying steps for oversight to identify who is
accountable for ensuring these actions are accomplished.
To increase transparency and improve fiscal stewardship of DOD
resources for BMDS, we recommend that the Secretary of Defense direct
the Under Secretary of Defense for Acquisition, Technology, and
Logistics, to establish a requirement to estimate BMDS operation and
support costs including:
* detailing when credible estimates are to be developed, updated, and
reviewed; specifying criteria for prioritizing, allocating, and
distributing funds; and clearly identifying who is responsible for
oversight of this process;
* requiring periodic independent validation of operation and support
costs for each BMDS element; and:
* using the independently validated estimates to support preparation of
complete and credible budget submissions and DOD's spending plan and to
assess the long-term affordability of the integrated system and
individual elements for informing key trade-off decisions.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with one
and partially concurred with five recommended actions. The department's
comments are reprinted in their entirety in appendix II. DOD also
provided technical comments, which we have incorporated as appropriate.
DOD partially concurred with our three recommendations to improve long-
term support planning for BMDS elements. First, DOD partially concurred
with our recommendation that the Under Secretary of Defense for
Acquisition, Technology, and Logistics (USD (AT&L)) establish timelines
for planning that must be completed before each element is fielded,
such as naming a lead service, involving services in support and
transition planning, and deciding when support responsibilities will be
transitioned to the services. In its comments, DOD stated that the new
BMDS life-cycle management process provides for service participation
in annual MDA planning and programming. DOD further stated that through
this process, timelines for transition of BMDS elements from MDA to the
services after initial fielding will be executable within reasonable
periods of time following initial fielding. DOD also stated that
tailored negotiations between MDA and the services would be better than
establishing uniform timelines and the Missile Defense Executive Board
would step in if issues cannot be resolved in a timely fashion.
However, USD (AT&L) officials told us that, as of September 15, 2008,
the proposed BMDS life-cycle management process is a proposal and has
not yet been implemented. Moreover, the draft proposal does not specify
the role or timing for service involvement in developing support plans
for elements. Regarding DOD's preference not to establish uniform
timelines, we believe that key steps in completing support planning can
be condition-based rather than calendar-based. For example, we point
out in our report that MDA's own sustainment directive specifies what
criteria, including support planning, should be completed before an
element moves to a subsequent development phase. Also, while the
Missile Defense Executive Board may step in to resolve issues, the
Board is a new organization and it is not clear what criteria the Board
would use to determine whether intervention is needed, specifically in
the absence of specific guidance outlining how the process should work.
Our recommendation would provide some needed structure and specificity
that the draft proposal currently lacks; unless DOD takes action to
implement this recommendation, transition of support responsibilities
may continue in an ad hoc manner, and DOD may not be able to take
advantage of lessons learned from one transition effort to the next.
Second, DOD partially agreed with our recommendation that USD (AT&L)
require active lead service participation in developing long-term
support plans and designate what support planning should be completed
before elements are fielded. DOD agreed that it is better to put long-
term support plans into effect before BMDS elements are fielded, but
said that fielding of an element should not be delayed because of
incomplete support planning. DOD stated that once a lead service is
designated, the element enters into the transition phase, memoranda of
agreement are established, and an assessment is made by the department
to determine when the element transfer is appropriate. As stated in our
report, however, DOD has not documented that establishing memoranda of
agreement is the preferred method of negotiating transition of
responsibilities from MDA to the services. DOD also stated that by
initiating its proposed life-cycle management process, the department
intends to ensure that the services are active participants in long-
term support planning. However, we point out in our report that several
elements were fielded before support plans were completed and some,
like the forward-based radar, still do not have a support plan more
than 2 years after fielding. Also, we point out that DOD's draft
proposal for life-cycle management lacks important details such as when
support plans are to be completed, and how MDA and the services should
negotiate transition of responsibility for providing support. Further
it is not clear when this draft proposal might be approved and
implemented. Therefore, without specifying active service participation
in developing long-term support plans and when these should be
completed, DOD is likely to face continued difficulty in transitioning
support responsibilities from MDA to the services and uncertainty will
persist regarding how elements will be supported over the long term.
Third, DOD partially agreed with our recommendation that USD (AT&L)
specify which organization is responsible for life-cycle management and
identify steps for oversight to identify who is accountable for
ensuring these actions are accomplished. DOD stated that USD (AT&L) is
responsible for initiating lead service designations and expects that
the proposed life-cycle management process will ensure service
involvement. DOD further stated that the Missile Defense Executive
Board is chartered for providing oversight. However, we point out in
our report that MDA and the services disagree over which organization
will be responsible for performing life-cycle management
responsibilities, such as providing and planning for support over the
long term. Further, even though the Missile Defense Executive Board may
provide some oversight, the proposed management process developed by
this Board does not specify the role or timing for service involvement
in developing support plans for elements, or that support plans are to
cover the elements' expected life and be completed before fielding, or
how MDA and the services should negotiate transition of responsibility
for providing support of BMDS elements. Our prior work has shown that
establishing clear roles and responsibilities can improve outcomes by
identifying who is accountable for various activities. Therefore,
without specifically designating life-cycle management responsibilities
and specifying what these responsibilities entail, DOD may continue to
face challenges it its ability to transition responsibility for
providing support from MDA to the services and will be limited in its
ability to improve long-term support planning for future BMDS elements.
DOD concurred with one and partially concurred with two of our
recommendations to establish a requirement to estimate BMDS operation
and support costs. DOD agreed with our recommendation that USD (AT&L)
require periodic independent validation of operation and support costs
for each BMDS element. In its comments, DOD stated that periodic
independent estimates of operation and support costs for BMDS elements
are desirable. DOD also stated that the current arrangement between its
Cost Analysis Improvement Group and MDA provides for independent cost
estimates based on the MDA Director's priorities and that additional
direction from the Under Secretary on the timing and frequency of
independent cost estimates could facilitate planning for and executing
these estimates. Although DOD agreed with this recommendation, its
response did not indicate when it would implement the recommendation.
Since independent verification of cost estimates is necessary to assure
accuracy, completeness, and reliability, we encourage DOD to implement
this recommendation as soon as possible. Without credible long-term
operation and support cost estimates, DOD and the services face unknown
financial obligations for supporting BMDS fielding plans, which will
hinder assessing long-term affordability.
DOD partially agreed with our recommendation that the Secretary of
Defense direct USD (AT&L) to detail when credible estimates are to be
developed, updated, and reviewed; specify criteria for prioritizing,
allocating, and distributing funds; and clearly identify who is
responsible for oversight of this process. In its comments, DOD stated
that it does not require specific direction from the Under Secretary at
this time. However, we reported that DOD has not clearly identified
operation and support costs because the department has not required
that these costs be developed, validated, and reviewed. Therefore, we
continue to believe that, in the absence of a clear requirement for
estimating long-term operation and support costs, direction from senior
DOD leadership is needed. DOD also stated in its comments that it
remains confident its proposed BMDS life-cycle management process and
the efforts of the Missile Defense Executive Board will be successful
in ensuring that decision-makers have complete, credible, and
transparent cost information before the services assume and/or fund any
responsibilities transitioned to them. However, as we reported, the
BMDS draft proposal for the life-cycle management process is not well
defined and does not specify when and how operation and support cost
estimates are to be developed, validated, and reviewed or who should be
responsible for doing so. Also, we reported that it is not clear when
the draft proposal will be approved or implemented and DOD's comments
did not provide us with a schedule or time frame for taking action.
Without taking specific action on this recommendation, it is not clear
who will be responsible for ensuring credible operation and support
estimates are developed or how these funds will be managed. Further,
decision-makers inside and outside DOD will not have a sound basis with
which to make difficult funding tradeoffs among competing priorities
both across BMDS elements and across the department.
Finally, DOD partially agreed with our recommendation that the
Secretary of Defense direct USD (AT&L) to use independently validated
operation and support cost estimates to support preparation of complete
and credible budget submissions and DOD's spending plan and to assess
the long-term affordability of the integrated system and individual
elements for informing key trade-off decisions. In its comments, DOD
agreed that, whenever possible, independent cost estimates should be
used to support its planning, programming, and budgeting decisions, but
stated that the department does not believe that specific direction
from the Under Secretary is needed. We reported that BMDS operation and
support costs are not transparent in DOD's spending plan, the Future
Years Defense Program, and that DOD has not yet completed operation and
support cost estimates for several BMDS elements. Although DOD agreed
that independent cost estimates should be used to support planning,
programming, and budgeting decisions, its draft proposal for the life-
cycle management process does not address this issue. Without specific
direction to use independently validated cost estimates to prepare
budget submissions and spending plans, there is little assurance that
DOD's future spending plans will contain significant improvements in
the credibility of BMDS operation and support costs.
We are sending copies of this report to the Secretary of Defense; the
Director, Missile Defense Agency; Chairman, Joint Chiefs of Staff; and
the Chiefs of Staff and Secretaries of the Army, Navy, and Air Force.
We will make copies available to others upon request. In addition, the
report will be available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions, please call me at (404) 679-
1816. Contact points for our Offices of Congressional Relations and
Public Affairs may be found on the last page of this report. Staff
members who made key contributions to this report are listed in
appendix III.
Signed by:
John H. Pendleton:
Director, Defense Capabilities and Management:
[End of section]
Appendix I: Scope and Methodology:
To determine the extent to which the Department of Defense (DOD) has
(1) planned for the support of Ballistic Missile Defense System (BMDS)
elements over the long term and (2) identified the long-term operation
and support costs for the BMDS elements it plans to field, we conducted
various analyses, reviewed key documentation, and interviewed relevant
DOD officials. During this review, we focused on the seven BMDS
elements that are already fielded or planned for fielding over fiscal
years 2008 through 2015. Since all the BMDS elements are in various
stages of development and transition to a military service, we selected
a nongeneralizable sample to provide illustrative examples of issues
related to both objectives. The illustrative sampling strategy
identifies examples to gain deeper insight, demonstrate consequences,
and provide practical, significant information about the BMDS elements
under a variety of conditions, such as identifying at least one element
that is intended to transition to each of the services, some elements
that are already fielded, and some elements that will be fielded by
2015. As a result, we selected seven BMDS elements: Aegis Ballistic
Missile Defense, Ground-based Midcourse Defense, Terminal High Altitude
Area Defense, AN/TPY-2 (forward-based radar), Sea-based X-band Radar,
Upgraded Early Warning Radar, and European Midcourse Radar.
To assess the extent to which DOD has developed plans for how to
support BMDS elements over the long term, we compared the planning that
had been done with key principles embodied in DOD and Missile Defense
Agency (MDA) policies and guidance[Footnote 33] for life-cycle
management[Footnote 34] to determine what aspects may be missing or
have limited service involvement that could hinder transition of
responsibility for support of BMDS elements from MDA to the services
and hinder the ability to provide long-term support. To do so, we
obtained and assessed relevant documents such as BMDS element support
plans, MDA support documents, DOD guidance for MDA and the Missile
Defense Executive Board, and MDA documents explaining program status
and plans such as the 2007 BMDS Transition and Transfer Plan signed
February 4, 2008. We also discussed the extent of support planning, the
level of service involvement in support and transition planning, and
whether the assignment of life-cycle management responsibilities was
clearly designated with MDA and relevant officials from the Army, Navy,
and Air Force. Further, using DOD briefings, memorandums, and
discussions with DOD officials, we compared the draft Missile Defense
Executive Board draft proposal for BMDS management with the shortfalls
in support planning we identified to determine the extent to which the
draft proposal may address those shortfalls. Finally, we discussed the
results of our comparisons with officials from the Office of the Under
Secretary of Defense for Acquisition, Technology, and Logistics;
Missile Defense Agency; Air Force Headquarters Strategic Plans and
Policy Directorate; U.S. Air Force Space Command; U.S. Army
Headquarters and Space and Missile Defense Command; and the Office of
Naval Operations Theater Air and Missile Defense Branch.
To assess whether DOD has identified the long-term operation and
support costs for the BMDS elements it plans to field, we evaluated how
MDA and the services developed cost estimates and then compared the
method by which those estimates were prepared with key principles
compiled from DOD and GAO sources[Footnote 35] that describe how to
develop accurate and reliable cost estimates to determine their
completeness and the extent to which DOD took steps to assess the
confidence in the estimates. We then discussed the results of our
comparison and the status of the operation and support cost estimates
with officials from the Office of the Deputy Assistant Secretary of the
Army for Cost and Economics; the Naval Center for Cost Analysis; Air
Force Space Command; the Missile Defense Agency; the Office of the
Secretary of Defense Program, Analysis, and Evaluation and its Cost
Analysis Improvement Group, and the Office of the Under Secretary of
Defense for Acquisition, Technology, and Logistics. In addition, we
assessed key documents such as the 2007 Transition and Transfer Plan
and the Aegis memorandum of agreement to determine the extent to which
MDA and the services have or have not agreed to fund operation and
support costs for BMDS elements after 2013 and confirmed our
understanding with MDA and service officials. Furthermore, to follow-up
on our previous recommendation,[Footnote 36] we interviewed an official
in the Office of the Under Secretary of Defense (Comptroller) to
determine whether DOD had taken any action on our recommendation to
develop a structure in the FYDP to identify all ballistic missile
defense operational costs. Finally, using DOD briefings and other
documents, we compared the Missile Defense Executive Board draft
proposal for BMDS management with the shortfalls in estimating and
funding operation and support costs we identified to determine the
extent to which the draft proposal may address those shortfalls. We
discussed our findings with officials from the Office of the Under
Secretary of Defense for Acquisitions, Technology, and Logistics and
the Missile Defense Agency.
Other organizations we visited to gain an understanding of their roles
in support planning and cost estimating included the Joint Staff, U.S.
Strategic Command and its Joint Functional Component Command for
Integrated Missile Defense, and U.S. Northern Command.
We conducted this performance audit from August 2007 through September
2008 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Department of Defense:
Office Of The Under Secretary Of Defense:
Acquisition Technology And Logistics:
3000 Defense Pentagon:
Washington, DC 20301-3000:
Mr. John H. Pendleton:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Pendleton:
This is the Department of Defense (DoD) response to the GAO Draft
Report, GAO-08-1068, "Missile Defense: Actions Needed to Improve
Planning and Cost Estimates for Long-Term Support of Ballistic Missile
Defense," dated August 15, 2008 (GAO Code 351080).
The DoD concurs with one of the six draft report recommendations and
partially concurs with five. The rationales for our positions are
included in the enclosure.
We appreciate the opportunity to comment on the draft report. My point
of contact for this effort is Mr. Greg Hulcher, (703) 695-2680,
greg.hulcher@osd.mil.
Sincerely,
Signed by:
David G. Ahern:
Director:
Portfolio Systems Acquisition:
Enclosure: As stated:
GAO Draft Report - Dated August 15, 2008:
GAO Code 351080/GAO-08-1068:
"Missile Defense: Actions Needed to Improve Planning and Cost
Estimates for Long-Term Support of Ballistic Missile Defense"
Department Of Defense Comments To The Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology and
Logistics to establish timelines for planning that must be completed
before each element is fielded, such as naming a lead Service,
involving Services in support and transition planning, and deciding
when support responsibilities will be transitioned to the Services.
Proposed Response: Partially Concur. Considerable progress has been
made with regards to planning for long-term support of Ballistic
Missile Defense System (BMDS) capabilities. Continued improvement will
be derived from the new BMDS Life Cycle Management Process, as
discussed with GAO representatives. The process provides for Service
participation in annual Missile Defense Agency (MDA) planning and
programming. With the experience and involvement generated by this
process and related activity, timelines for transition and transfer of
BMDS elements to the Services will be substantive and executable within
reasonable periods of time following initial fielding. Rather than
establish uniform timelines, the Department believes the better
approach is to rely on tailored negotiations between MDA and the
Services conducted under oversight from the Missile Defense Executive
Board (MDEB), particular to each BMDS element. The MDEB will step in
when issues such as the allocation of support responsibilities cannot
be resolved in a timely fashion.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology and
Logistics to require active lead Services participation in developing
long-term support plans and designating what support planning should be
completed before elements are fielded.
Proposed Response: Partially Concur. By initiating the BMDS Life Cycle
Management Process, the Department intends to ensure that the Services
are active participants in annual long-term support planning and
budgeting. The current Transition and Transfer plan, directs that once
a lead Service is designated, the element enters into transition phase,
memorandum of agreements are established and an assessment is made by
the Department to determine when the element transfer is appropriate.
While the Department agrees with GAO's view that it is better to put
long-term support plans into effect before BMDS elements/components are
fielded, decisions to deploy BMDS capabilities under the spiral
development approach must take into account considerations, such as the
immediacy of the threat, the warfighter's needs, and the near-term
military utility of the element/component. Therefore, it may be unwise
to slow or delay fielding of BMDS capabilities until every step is
taken to complete operation and support planning.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology and
Logistics to specify which organization is responsible for life-cycle
management and identifying steps for oversight to identify who is
accountable for ensuring these actions are accomplished.
Proposed Response: Partially Concur. USD(AT&L) is responsible for
initialing Lead Service designations for Deputy Secretary of Defense
approval. The Department expects that the BMDS Life Cycle Management
Process will ensure Service involvement early in BMDS element
development and life cycle management planning and budgeting. The MDEB
will assess determinations concerning timing transfer of
responsibilities to the Services for operations and sustainment. As for
providing needed oversight within the Department, the MDEB is already
chartered to carry out this responsibility.
Recommendation 4: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to detail when credible estimates are to be developed,
updated, and reviewed; specifying criteria for prioritizing,
allocating, and distributing funds; and clearly identifying who is
responsible for oversight of this process.
Proposed Response: Partially Concur. The Department does not require
specific direction from the Under Secretary at this point in time. GAO
found in its review that much progress has been made to develop joint
estimates of operation and support costs but more needs to be done. The
Department agrees and remains confident that its improved BMDS Life
Cycle Management Process and the efforts of the MDEB will be successful
in ensuring that decision makers have complete, credible, and
transparent cost information before the Services must assume and/or
fund any responsibilities transitioned to them.
Recommendation 5: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to require periodic independent validation of operation and
support costs for each BMDS element.
Proposed Response: Concur. The Department agrees with GAO that periodic
independent estimates of operation and support costs for BMDS
elements/components are desirable. The current arrangement between the
Cost Analysis Improvement Group
and MDA provided for independent cost estimates based on the MDA
Director's priorities. Additional direction from the Under Secretary on
the timing and frequency of independent cost estimates could facilitate
planning for and executing these estimates.
Recommendation 6: The GAO recommends that the Secretary of Defense
direct the Under Secretary of Defense for Acquisition, Technology, and
Logistics to use the independently validated estimates to support
preparation of complete and credible budget submissions and DoD's
spending plan and to assess the long-term affordability of the
integrated system and individual elements for informing key trade-off
decisions.
Proposed Response: Partially Concur. The Department agrees that,
whenever possible, independent cost estimates should be used to support
its planning, programming, and budgeting decisions, but the Department
does not believe that specific direction from the Under Secretary is
needed here.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
John H. Pendleton, (404) 679-1816, pendletonj@gao.gov:
Acknowledgments:
In addition to the individual named above, Gwendolyn R. Jaffe and Marie
A. Mak, Assistant Directors; Brenda M. Waterfield; Whitney E. Havens;
Pat L Bohan; Pamela N. Harris; Kasea Hamar; Nicolaas C. Cornelisse; and
Susan C. Ditto made key contributions to this report.
[End of section]
Related GAO Products:
Ballistic Missile Defense: Actions Needed to Improve the Process for
Identifying and Addressing Combatant Command Priorities. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-08-740]. Washington, D.C.: July
31, 2008.
Defense Acquisitions: Progress Made in Fielding Missile Defense, but
Program Is Short of Meeting Goals. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-08-448]. Washington, D.C.: March 14, 2008.
Cost Assessment Guide: Best Practices for Estimating and Managing
Program Costs, Exposure Draft. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-1134SP]. Washington, D.C.: July 2007.
Missile Defense: Actions Needed to Improve Information for Supporting
Future Key Decisions for Boost and Ascent Phase Element. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-430]. Washington, D.C.: April
17, 2007.
Defense Acquisitions: Missile Defense Acquisition Strategy Generates
Results, but Delivers Less at a Higher Cost. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-387]. Washington, D.C.: March
15, 2007.
Defense Management: Actions Needed to Improve Operational Planning and
Visibility of Costs for Ballistic Missile Defense. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-473]. Washington, D.C.: May
31, 2006.
Defense Acquisitions: Missile Defense Agency Fields Initial Capability
but Falls Short of Original Goal. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-327]. Washington, D.C.: March 15, 2006.
Defense Acquisitions: Actions Needed to Ensure Adequate Funding for
Operation and Sustainment of the Ballistic Missile Defense System.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-817]. Washington,
D.C.: September 6, 2005.
Military Transformation: Actions Needed by DOD to More Clearly Identify
New Triad Spending and Develop a Long-term Investment Approach.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-962R]. Washington,
D.C.: August 4, 2005.
Military Transformation: Actions Needed by DOD to More Clearly Identify
New Triad Spending and Develop a Long-term Investment Approach.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-540]. Washington,
D.C.: June 30, 2005.
Defense Acquisitions: Status of Ballistic Missile Defense Program in
2004. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-243].
Washington, D.C.: March 31, 2005.
Future Years Defense Program: Actions Needed to Improve Transparency of
DOD's Projected Resource Needs. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-514]. Washington, D.C.: May 7, 2004.
Missile Defense: Actions Are Needed to Enhance Testing and
Accountability. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-
409]. Washington, D.C.: April 23, 2004.
Missile Defense: Actions Being Taken to Address Testing
Recommendations, but Updated Assessment Needed. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-254]. Washington, D.C.:
February 26, 2004.
Missile Defense: Additional Knowledge Needed in Developing System for
Intercepting Long-Range Missiles. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-03-600]. Washington, D.C.: August 21, 2003.
Missile Defense: Alternate Approaches to Space Tracking and
Surveillance System Need to Be Considered. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-597]. Washington, D.C.: May
23, 2003.
Missile Defense: Knowledge-Based Practices Are Being Adopted, but Risks
Remain. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-441].
Washington, D.C.: April 30, 2003.
Missile Defense: Knowledge-Based Decision Making Needed to Reduce Risks
in Developing Airborne Laser. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-02-631]. Washington, D.C.: July 12, 2002.
Missile Defense: Review of Results and Limitations of an Early National
Missile Defense Flight Test. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-02-124]. Washington, D.C.: February 28, 2002.
Missile Defense: Cost Increases Call for Analysis of How Many New
Patriot Missiles to Buy. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-NSIAD-00-153]. Washington, D.C.: June 29, 2000.
Missile Defense: Schedule for Navy Theater Wide Program Should Be
Revised to Reduce Risk. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/NSIAD-00-121]. Washington, D.C.: May 31, 2000.
[End of section]
Footnotes:
[1] GAO, Defense Acquisitions: Missile Defense Acquisition Strategy
Generates Results, but Delivers Less at a Higher Cost, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-387] (Washington, D.C.: Mar.
15, 2007).
[2] GAO, Defense Acquisitions: Actions Needed to Ensure Adequate
Funding for Operation and Sustainment of the Ballistic Missile Defense
System, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-817]
(Washington, D.C.: Sept. 6, 2005).
[3] GAO, Defense Management: Actions Needed to Improve Operational
Planning and Visibility of Costs for Ballistic Missile Defense,
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-473] (Washington,
D.C.: May 31, 2006).
[4] GAO, Defense Acquisitions: Progress Made in Fielding Missile
Defense, but Program Is Short of Meeting Goals, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-08-448] (Washington, D.C.: Mar.
14, 2008).
[5] H.R. Rep. No. 110-146, 259 (2007).
[6] DOD's key principles are contained in various documents such as:
DOD Directive 5000.1, The Defense Acquisition System (May 12, 2003);
DOD Instruction 5000.2, Operation of the Defense Acquisition System
(May 12, 2003), OSD's Designing and Assessing Supportability in DOD
Weapon Systems (October 24, 2003); DOD's Defense Acquisition Guidebook
(December 20, 2004); MDA's Integrated Program Policy (July 18, 2005)
and associated Implementation Guide (June 2, 2005); and MDA Directive
5010.09, Ballistic Missile Defense System Sustainment (April 13, 2006).
[7] Total life-cycle management is the management of all activities
associated with the acquisition, development, production, fielding,
sustainment, and disposal of a DOD weapon or system across its life
cycle. In this engagement, we focused on the planning for fielding and
sustainment over the expected life of the elements.
[8] GAO, Cost Assessment Guide: Best Practices for Estimating and
Managing Program Costs, Exposure Draft, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP] (Washington, D.C.:
July 2007). Life-cycle costs are the total cost to the government for a
program over its full life, consisting of research and development,
production, operations, maintenance, and disposal costs and are helpful
in assessing whether a system's cost is affordable.
[9] Originally, MDA defined a block as a specific set of ballistic
missile defense capabilities that it intended to field in a 2-year time
period. For example, Block 2004 was defined as specific elements that
MDA intended to field from January 2004 through December 2005. MDA's
new block structure defines a block as fielding elements that address
particular threats. For example, Block 1 is defined as elements to
provide initial defense of the U.S. from North Korea.
[10] DOD Directive 5000.1, The Defense Acquisition System (May 12,
2003); DOD Instruction 5000.2, Operation of the Defense Acquisition
System (May 12, 2003). The MDA Charter states that the MDA Director
shall manage BMDS consistent with the principles of this policy.
[11] DOD uses a variety of terms to refer to many different support
documents--such as supportability strategy or integrated logistics
support plans. Throughout this report, we will generically refer to
these types of documents as "support planning" documents.
[12] Department of Defense, Office of the Inspector General,
Acquisition: System Engineering Planning for the Ballistic Missile
Defense System, D-2006-060 (Washington, D.C.: Mar. 2, 2006).
[13] Operations and support costs are the resources required to operate
and support a weapon system and include maintenance of equipment/
infrastructure, operations of forces, training and readiness, base
operations, personnel, and logistics.
[14] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP].
[15] Department of Defense, Missile Defense Agency, Ballistic Missile
Defense Agency 2007 Transition and Transfer Plan (Washington, D.C.:
Feb. 4, 2008).
[16] Due to the confusion over the terms "transition" and "transfer",
DOD attempted to clarify the distinction in the BMDS 2007 Transition
and Transfer Plan as explained here. Although the terms have sometimes
been used interchangeably, throughout this report we use the term
"transition" to refer to all activities short of a program office
"transfer", consistent with the distinction made in the 2007 plan.
[17] Department of Defense Directive 5134.9, Missile Defense Agency,
(Oct. 9, 2004).
[18] GAO, Ballistic Missile Defense: Actions Needed to Improve the
Process for Identifying and Addressing Combatant Command Priorities,
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-740] (Washington,
D.C.: July 31, 2008).
[19] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-473].
[20] GAO, Missile Defense: Actions Needed to Improve Information for
Supporting Future Key Decisions for Boost and Ascent Phase Elements,
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-430] (Washington,
D.C.: Apr. 17, 2007).
[21] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-448].
[22] Department of Defense, Integrated Program Policy Version 2.0,
Missile Defense Agency (July 18, 2005); Department of Defense,
Ballistic Missile Defense Integrated Program Policy Implementation
Guide Version 2.0, Missile Defense Agency (June 2, 2005).
[23] Department of Defense, Ballistic Missile Defense System
Sustainment, MDA Directive 5010.09, Missile Defense Agency, (April 13,
2006). The MDA sustainment directive lists the four phases as:
capability-based requirements, programming and planning, program
execution, and capability-based deployment.
[24] Department of Defense, Office of the Inspector General,
Acquisition: System Engineering Planning for the Ballistic Missile
Defense System, D-2006-060 (Mar. 2, 2006).
[25] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-03-669] (Washington, D.C.: July
2, 2003).
[26] Department of Defense Directive 5134.9, Missile Defense Agency
(Oct. 9, 2004).
[27] GAO, Military Transformation: Additional Actions Needed by U.S.
Strategic Command to Strengthen Implementation of Its Many Missions and
New Organization, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-
847] (Washington, D.C.: Sept. 8, 2006)
[28] MDA and the services' joint effort to estimate operation and
support costs is separate from MDA's development of cost estimates for
the BMDS blocks. The block estimates will include research,
development, and procurement costs only and will not include operation
and support costs. Also, MDA intends to ask the Cost Analysis
Improvement Group to independently validate the block estimates.
[29] Key principles for developing accurate and reliable cost estimates
are drawn from DOD guidance and our Cost Assessment Guide. DOD, Office
of the Secretary of Defense, Cost Analysis Improvement Group, Operating
and Support Cost-Estimating Guide (May 1992 and October 2007); GAO,
Cost Assessment Guide: Best Practices for Estimating and Managing
Program Costs, Exposure Draft, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-1134SP] (Washington, D.C. July 2, 2007).
[30] The Army Cost Review Board is composed of senior executives from
the Department of the Army. It reviews cost estimates for Army
acquisition programs in order to recommend an Army cost position to the
Army acquisition executive.
[31] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-473].
[32] The Defense Acquisition Board is the senior advisory body to the
Under Secretary of Defense for Acquisition, Technology, and Logistics
for critical acquisition decisions. It conducts reviews of major
acquisition programs at program milestones.
[33] DOD Directive 5000.1, The Defense Acquisition System (May 12,
2003); DOD Instruction 5000.2, Operation of the Defense Acquisition
System (May 12, 2003); Office of the Secretary of Defense, Designing
and Assessing Supportability in DOD Weapon Systems (Oct. 24, 2003);
DOD's Defense Acquisition Guidebook (December 20, 2004); MDA's
Integrated Program Policy (July 18, 2005) and associated Ballistic
Missile Defense Integrated Program Policy Implementation Guide (June 2,
2005); and MDA Directive 5010.09, Ballistic Missile Defense System
Sustainment (Apr. 13, 2006).
[34] Total life-cycle management is the management of all activities
associated with the acquisition, development, production, fielding,
sustainment, and disposal of a DOD weapon or system across its life
cycle. In this engagement, we focused on the planning for fielding and
sustainment over the expected life of the elements.
[35] We used the following DOD and GAO sources for compiling the cost
criteria: DOD, Office of the Secretary of Defense Cost Analysis
Improvement Group, Operating and Support Cost Estimating Guide, May
1992 and October 2007; and GAO, Cost Assessment Guide: Best Practices
for Estimating and Managing Program Costs, Exposure Draft, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP] (Washington, D.C.:
July 2007).
[36] In our prior report, we recommended to the Secretary of Defense to
develop a structure within the FYDP to identify all ballistic missile
defense operational costs. See GAO, Defense Management: Actions Needed
to Improve Operational Planning and Visibility of Costs for Ballistic
Missile Defense, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-
473] (Washington, D.C.: May 31, 2006).
[End of section]
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