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Report to Congressional Committees: 

United States Government Accountability Office: 

GAO: 

March 2006: 

Defense Acquisitions: 

Improved Business Case Is Needed for Future Combat System's Successful 
Outcome: 

GAO-06-367: 

GAO Highlights: 

Highlights of GAO-06-367, a report to congressional committees: 

Why GAO Did This Study: 

The Department of Defense (DOD) anticipates that the Future Combat 
System (FCS) will modernize the U.S. Army’s ability to move, shoot, and 
communicate on the battlefield. It is an impressive concept that is the 
product of holistic, non-traditional thinking. The Army describes FCS 
as one of the most complex weapon acquisition programs ever executed 
because it involves developing and integrating a family of 18 systems 
and an information network. Army leadership started the program early 
as part of its effort to change Army culture and believes that the 
program risks are manageable. 

GAO is required by law to review the program annually. In this report, 
GAO analyzes FCS’s acquisition business case and assesses requirements 
stability, technology maturity, soundness of the acquisition strategy, 
and reasonableness and affordability of program costs. 

What GAO Found: 

The FCS entered the development phase in 2003 and has not yet reached 
the level of knowledge it should have attained in the pre-development 
stage. The elements of a sound business case—firm requirements, mature 
technologies, a knowledge-based acquisition strategy, a realistic cost 
estimate, and sufficient funding—are still not demonstrably present. 
The Army will continue building basic knowledge in areas such as 
requirements and technologies for several more years. 

Requirements stability. The Army has reached agreement on FCS system of 
systems requirements—about 11,500—that help define how FCS units are 
expected to work as a whole. But the Army must continue to work out the 
technical feasibility and expected costs of the requirements for 
individual FCS systems. These requirements may not be completely 
stabilized until 2008. Until then, the Army expects the system-level 
requirements to change and to make trade-offs to offset technical risks 
and cost. 

Technology maturity. None of FCS’s 49 critical technologies was at a 
level of maturity recommended by DOD policy at the start of a program. 
Some technologies may not reach full maturity until after production 
starts. Not having firm requirements matched with mature technologies 
at the start of development is a key indicator of program risk. Also, 
the Army is depending on 52 complementary programs, each of which is 
essential for FCS to perform as intended. Some of these programs have 
significant technical challenges; some do not have the funding needed 
to complete development. 

Soundness of acquisition strategy for design and production. The 
current acquisition strategy for FCS is improved over the original 
strategy but still calls for maturing technologies, designing systems, 
and preparing for production at the same time. Even if requirements and 
technologies proceed without incident, FCS design and production 
process maturity will not be demonstrated until after the production 
decision is made. Although production representative prototypes will 
not be available, the Army plans to test all FCS systems before 
committing to production. If problems are discovered in testing at that 
stage, they will be very expensive to correct. 

Reasonableness and affordability of program costs. The estimated cost 
of the FCS program now stands at $160.7 billion, a 76 percent increase 
since program start. This is a better estimate than the original, as it 
embodies a more realistic schedule and scope. Including the total 
investment for the 52 essential complementary programs, the FCS program 
cost estimate would reach the $200 billion range. The Army has taken 
steps it believes will control FCS costs. Yet, the current level of 
knowledge about FCS is low, which makes it difficult to have a solid 
basis for cost projections. FCS’s long-term affordability depends on 
the accuracy of cost estimates, an increased level of procurement 
funding, and the level of competing demands. 

What GAO Recommends: 

In order to improve the FCS’s business case, GAO is making 
recommendations to the Secretary of Defense that involve setting clear 
expectations for progress and evaluating that progress by 2008. DOD 
partially concurred with our recommendations. This report also contains 
matters for congressional consideration to ensure FCS has a sound 
business case before future funding commitments are made. 

www.gao.gov/cgi-bin/getrpt?GAO-06-367. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Paul L. Francis at (202) 
512-4841 or francisp@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Army Has Made Progress but Feasibility and Affordability of System- 
level Requirements Remain Uncertain: 

FCS Success Hinges on Numerous Undemonstrated Technologies and 
Complementary Programs: 

FCS Acquisition Strategy Will Demonstrate Design Maturity After 
Production Begins: 

As FCS's Higher Costs Are Recognized, Funding Availability Becomes a 
Greater Challenge: 

Conclusions: 

Recommendations for Executive Action: 

Matters for Congressional Consideration: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: Critical Technologies' Current Status and Projections for 
Reaching Technology Readiness Level 6 (TRL 6): 

Appendix IV: Technology Readiness Levels: 

Related GAO Products: 

Tables: 

Table 1: Number of FCS Critical Technologies Sorted by TRLs: 

Table 2: Comparison of Original Cost Estimate and Current Cost Estimate 
for FCS Program (in billions of then-year dollars): 

Table 3: Annual and Cumulative FCS Funding and Planned Events and 
Achievements: 

Figures: 

Figure 1: FCS's Core Systems: 

Figure 2: Flow of FCS's Overarching Requirements to System-level 
Requirements: 

Figure 3: Comparison of Projected Dates for Technology Maturity: 

Figure 4: FCS Acquisition Compared with Commercial Best Practices' 
Approach: 

Figure 5: Comparison of Original Cost Estimate and Current Cost 
Estimate for FCS Program between Fiscal Years 2003 and 2026 (in 
millions of then-year dollars): 

Figure 6: Comparison of FCS Budget with Total Army Procurement Budget 
(in billions of then-year dollars): 

Abbreviations: 

DOD: Department of Defense: 

FCS: Future Combat System: 

JTRS: Joint Tactical Radio System: 

TRL: technology readiness level: 

WIN-T: Warfighter Information Network-Tactical: 

[End of section] 

United States Government Accountability Office: 

Washington, DC 20548: 

March 14, 2006: 

Congressional Committees: 

The Department of the Army (Army) is in the midst of transforming 
itself into a lighter, more agile, and more capable combat force that 
will be better equipped to meet the defense challenges of the future. 
One of the centerpieces of the Army's transformation is the Future 
Combat System (FCS), a weapon systems acquisition program that embraces 
a new concept of operations, new technologies, and a new information 
network of numerous ground and air vehicles, sensors, and munitions. 
The Army itself calls this the "greatest technology and integration 
challenge the Army has ever undertaken." The FCS concept demonstrates 
the Army's desire to be proactive in preparing for the changing scope 
of modern warfare. When factoring in other Army programs needed to 
deliver FCS's full capability, the total investment costs are on the 
order of $200 billion. Spending of this magnitude has drawn attention 
in Congress because the nation is facing a large and growing deficit. 
Fiscal realities are putting pressure on the Army and the rest of the 
Department of Defense (DOD) to take a hard look at how it is managing 
its resources for weapon acquisition programs, such as FCS. 

Given the Army's challenges to date and the cost and scope of the FCS 
program, the National Defense Authorization Act for Fiscal Year 2006 
requires GAO to report annually on the product development phase of the 
FCS's acquisition. Congressional Committees and GAO agreed that this 
report should analyze FCS against the basic elements of an acquisition 
business case, namely: (1) firmness of requirements, (2) maturity of 
critical technologies, (3) soundness of the acquisition strategy as it 
relates to design and production, and (4) reasonableness and 
affordability of program costs. 

In conducting our work, we have contacted numerous DOD and Army 
offices. We reviewed many documents pertaining to the FCS program, 
attended meetings at which DOD and Army officials reviewed program 
progress, and we held discussions with key DOD and Army officials on 
various aspects of the program. Officials from DOD and the Army have 
provided us access to sufficient information to make informed judgments 
on the matters in this report. In addition, we drew from our large body 
of past work on weapon systems acquisition practices. We reviewed DOD's 
acquisition policy, the experiences of successful and unsuccessful DOD 
programs, and the best acquisition practices of leading commercial 
firms. We performed our work from June 2005 to March 2006 in accordance 
with generally accepted government auditing standards. Appendix I 
further discusses our scope and methodology. 

Results in Brief: 

Today, about one-third of the way and $4.7 billion through FCS's 
development, the Army does not yet have the level of knowledge--such as 
firm requirements and mature technologies--it needed three years ago 
when it began product development. Army leadership started the program 
early as part of an overall effort to change the culture of the Army 
and believes that the risks in the program are manageable. While 
progress has been made and efforts are continuing in the requirements 
and technologies areas, the Army has not yet fulfilled the basic 
elements of a sound business case for a weapon system acquisition, 
including firm requirements, mature technologies, a sound strategy for 
attaining design and production maturity, realistic program cost 
estimates, and sufficient funding. 

The Army has made significant progress defining the initial FCS system 
of systems requirements, having reached agreement on nearly 11,500. 
However, FCS requirements are not yet matched with program resources 
because the Army still faces the daunting task of defining about 90,000 
more requirements for FCS's 18 individual systems. Although firm 
requirements should have been established at the start of the program, 
the process of setting and refining FCS system-level requirements may 
not be complete until 2008. The initial system-level requirements 
defined to date are likely to change as technical feasibility and 
expected costs of the system-level requirements become clearer. The 
Army plans to trade off system requirements to offset technical risks 
and cost, but this flexibility is not unlimited as FCS overall 
capabilities are still expected to be as good as or better than those 
of the current Army forces in terms of lethality, survivability, 
responsiveness, and sustainability. 

None of the FCS's 49 critical technologies were at an acceptable level 
of maturity[Footnote 1] when the product development began. Since the 
FCS program began, projected dates for maturing critical technologies 
have slipped, and some technologies are not expected to mature until 
very late--well into the design phases of the program and possibly into 
production. Other challenges have arisen as well. Several of 52 
complementary systems considered essential to FCS may not be able to 
complete development when needed. Some of these programs have not yet 
been fully funded, and others are facing their own technical 
challenges. For example, the Joint Tactical Radio System could be a 
deciding factor in FCS's overall success, but it is being restructured 
because of significant development problems. 

The FCS acquisition strategy is not knowledge-based: the strategy calls 
for maturing technologies, designing systems, and preparing for 
production concurrently. Even if requirements definition and technology 
maturity proceed without incident, FCS design and production maturity 
will not be demonstrated under the current acquisition strategy until 
after the production decision is made. At this point, the critical 
design review is planned for the seventh year in a nine-year 
development, leaving little time to demonstrate the design will work as 
intended before the scheduled decision to begin production. In fact, 
the Army does not plan to build and test production-representative 
prototypes before committing to low-rate initial production. Design 
integration promises to be a major challenge, particularly for FCS's 
manned ground vehicles, which have been likened in sophistication to 
fighter aircraft. The late accumulation of design and production 
knowledge called for by the FCS acquisition strategy increases the 
likelihood that problems will be discovered in late development and 
early production, when the costs of fixes will be very high. 

The low level of knowledge available today on requirements and 
technologies makes FCS cost projections very uncertain. Costs of the 
FCS program are estimated at $160.7 billion--an increase of 76 percent 
since the program began. The growth is attributable, in part, to the 
restructuring that increased the program's scope and extended the 
development schedule by four years. The projected costs also rose as 
program managers attained more knowledge about system of systems 
requirements. While the latest estimate may be better than earlier 
estimates, the essential complementary programs are not included. 
Including the costs of these programs would bring the required total 
investment to the $200 billion range. DOD has not yet prepared an 
independent estimate to validate the Army's current cost estimate. The 
Army is taking steps to control the costs of the program, but these 
steps may require changing or eliminating some requirements. The long- 
term affordability of FCS depends on the soundness of several key 
assumptions, including the accuracy of the cost estimate, the overall 
level of development and procurement funding available to the Army, and 
the level of competing demands. 

We are making several recommendations to the Secretary of Defense to 
take a number of actions, prior to DOD's long-term commitment to the 
program, to improve the FCS business case and establish knowledge-based 
measures to guide oversight of FCS progress. DOD concurred with the 
intent of our recommendations; however, it did not agree to limit its 
commitment to the FCS program or to do much beyond what it had already 
planned to do. As a result, this report also contains matters for 
congressional consideration to ensure FCS has a sound business case 
before future funding commitments are made. 

Background: 

The FCS concept is part of a pervasive change toward what the Army 
refers to as the Future Force. The Army is reorganizing its current 
forces into modular brigade combat teams, meaning troops can be 
deployed on different rotational cycles as a single team or as a 
cluster of teams. The Future Force is designed to transform the Army 
into a more rapidly deployable and responsive force and enables the 
Army to move away from the large division-centric structure of the 
past. Each FCS brigade combat team is expected to be highly survivable 
and the most lethal brigade-sized unit the Army has ever fielded. The 
Army expects FCS-equipped brigade combat teams to provide significant 
warfighting capabilities to DOD's overall joint military operations. 
The Army is implementing its transformation plans at a time when 
current U.S. ground forces are playing a critical role in the ongoing 
conflicts in Iraq and Afghanistan. 

The FCS family of weapons includes 18 manned and unmanned ground 
vehicles, air vehicles, sensors, and munitions that will be linked by 
an information network. The systems include: 

* eight new types of manned ground vehicles to replace current tanks, 
infantry carriers, and self-propelled howitzers; 

* four classes of unmanned aerial vehicles; 

* several unmanned ground vehicles; and: 

* an attack missile. 

At a fundamental level, the FCS concept is to replace mass with 
superior information--that is, to see and hit the enemy first rather 
than to rely on heavy armor to withstand a hit. This solution attempts 
to address the mismatch that has posed a dilemma to the Army for 
decades. The Army's heavy forces had the necessary firepower but 
required extensive support and too much time to deploy. Its light 
forces could deploy rapidly but lacked firepower. If the Future Force 
becomes a reality, then the Army would be better organized, staffed, 
equipped, and trained for prompt and sustained land combat. This is 
expected to translate into a force that is responsive, technologically 
advanced, and versatile. These qualities are intended to ensure the 
Future Force's long-term dominance over evolving, sophisticated 
threats. The Future Force is to be offensively oriented and will employ 
revolutionary concepts of operations, enabled by new technology. The 
Army envisions a new way of fighting that depends on networking the 
force, which involves linking people, platforms, weapons, and sensors 
seamlessly together in a system of systems. 

Figure 1: FCS's Core Systems: 

[See PDF for image] 

[End of figure] 

If successful, the FCS system of systems concept will leverage 
individual capabilities of weapons and platforms and will facilitate 
interoperability and open system designs. This would be a significant 
improvement over the traditional approach of building superior 
individual weapons that must be retrofitted and netted together after 
the fact. This transformation, in terms of both operations and 
equipment, is under way with the full cooperation of the Army 
warfighter community. In fact, the development and acquisition of FCS 
is being accomplished using a uniquely collaborative relationship 
between the Army's developers, the participating contractors, and the 
warfighter community. 

The Army has employed a management approach that centers on a lead 
systems integrator. Although there is no complete consensus on the 
definition of a lead systems integrator, those we are aware of appear 
to be prime contractors with increased program management 
responsibilities. These responsibilities have included greater 
involvement in requirements development, design, and source selection 
of major system and subsystem subcontractors. Boeing is the lead 
systems integrator for the FCS system development and demonstration 
phase of acquisition. The FCS lead systems integrator acts on behalf of 
the Army to optimize the FCS capability, maximize competition, ensure 
interoperability, and maintain commonality in order to reduce life 
cycle costs. The Army advised us that it did not believe it had the 
resources or flexibility to use its traditional acquisition process to 
field a program as complex as FCS under the aggressive timeline 
established by the then-Army Chief of Staff. The Army will maintain 
oversight and final approval of the lead systems integrator's 
subcontracting and competition plans. 

FCS Restructures the Program and Changes Contracting Approach: 

As a key element of its efforts to transform itself, the Army has 
recognized FCS from its outset as the greatest technology and 
integration challenge it has ever undertaken. In May 2003, DOD approved 
the FCS program to begin the system development and demonstration 
phase, a milestone that ideally marks the completion of technology 
development and the start of product development. However, FCS's entry 
into this phase was premature given that the program had failed to 
satisfy basic tenets of DOD acquisition policy. We have reported that, 
as FCS started product development, it did not have mature technologies 
or adequately defined requirements. 

Responding to direction from the Army Chief of Staff, the Army 
announced in July 2004 its plans to restructure the FCS program. The 
Army added four years to develop and mature the manned ground vehicles, 
added more demonstrations and experiments, and established an 
evaluation unit to demonstrate FCS capabilities. The restructuring 
reintroduced four systems that previously had been left unfunded, 
raising the total number of FCS-related systems to 18. The restructure 
also included plans to spin off mature FCS capabilities as they become 
available to current force units. With the restructuring, the FCS 
program now plans to achieve initial operational capability in fiscal 
year 2015 and full operational capability in fiscal year 2017. FCS low- 
rate production is expected to start in fiscal year 2012, and full-rate 
production in fiscal year 2016. The Army intends to continue FCS 
procurement through fiscal year 2025, eventually equipping 15 brigade 
combat teams. 

The restructuring was not the only major modification to the FCS 
program. Because of congressional concerns that the Army's contracting 
approach incorporated insufficient safeguards to protect the 
government's interests, the Army is preparing a new contract that is to 
be completed and finalized in March 2006 and is based on the Federal 
Acquisition Regulation, which governs acquisitions within the federal 
government. The new contract will incorporate standard Federal 
Acquisition Regulation clauses such as those relating to procurement 
integrity, Truth in Negotiations, and Cost Accounting Standards. 
Previously, the lead systems integrator had been performing FCS work 
for the Army under a contractual instrument called an "other 
transaction agreement" that was not subject to the Federal Acquisition 
Regulation. The other transaction agreement gave the Army considerable 
flexibility to negotiate the terms and conditions for contractors 
involved in FCS development. The Army's purpose for using such an 
agreement was to encourage innovation and to use its wide latitude in 
tailoring business, organizational, and technical relationships to 
achieve the program goals. In April 2005, the Army decided to 
incorporate into its agreement the procurement integrity, Truth in 
Negotiations, and Cost Accounting Standards clauses from the 
regulation. 

After the Congress raised questions about the Army using an other 
transaction agreement for the development of a program as large and 
risky as FCS and about the Army's choice not to include standard 
Federal Acquisition Regulation clauses in the agreement, the Secretary 
of the Army directed that the other transaction agreement be converted 
to a Federal Acquisition Regulation-based contract.[Footnote 2] All of 
the work performed under the product development phase as of September 
2005 will be accounted for under the prior other transaction agreement, 
and all work after September 2005 will be performed under the new 
contract. The Army expects the content of the program--its statement of 
work--will remain largely the same, and it does not expect the cost, 
schedule, and performance of the overall development effort to change 
materially. 

Elements of a Business Case: 

We have frequently reported on the importance of using a solid, 
executable business case before committing resources to a new product 
development effort. In the case of DOD, a business case should be based 
on DOD acquisition policy and lessons learned from leading commercial 
firms and successful DOD programs. The business case in its simplest 
form is demonstrated evidence that (1) the warfighter's needs are valid 
and that they can best be met with the chosen concept, and (2) the 
chosen concept can be developed and produced within existing resources--
that is, proven technologies, design knowledge, adequate funding, and 
adequate time to deliver the product when it is needed. A program 
should not go forward into product development unless a sound business 
case can be made. If the business case measures up, the organization 
commits to the development of the product, including making the 
financial investment. 

At the heart of a business case is this knowledge-based approach to 
product development that is both a best practice among leading 
commercial firms and the approach preferred by DOD in its acquisition 
regulations. For a program to deliver a successful product within 
available resources, managers should demonstrate high levels of 
knowledge before significant commitments are made. In essence, 
knowledge supplants risk over time. This building of knowledge can be 
described as three levels or knowledge points that should be attained 
over the course of a program: 

* First, at program start, the customer's needs should match the 
developer's available resources--mature technologies, time, and 
funding. An indication of this match is the demonstrated maturity of 
the technologies needed to meet customer needs. The ability of the 
government acquisition workforce to properly manage the effort should 
also be an important consideration at program start. 

* Second, about midway through development, the product's design should 
be stable and demonstrate that it is capable of meeting performance 
requirements. The critical design review is the vehicle for making this 
determination and generally signifies the point at which the program is 
ready to start building production-representative prototypes. 

* Third, by the time of the production decision, the product must be 
shown to be producible within cost, schedule, and quality targets and 
have demonstrated its reliability. It is also the point at which the 
design must demonstrate that it performs as needed through realistic 
system-level testing. 

The three knowledge points are related in that a delay in attaining one 
delays the points that follow. Thus, if the technologies needed to meet 
requirements are not mature, design and production maturity will be 
delayed. On the successful commercial and defense programs we have 
reviewed, managers were careful to conduct development of technology 
separately from and ahead of the development of the product. For this 
reason, the first knowledge point is the most important for improving 
the chances of developing a weapon system within cost and schedule 
estimates. DOD's acquisition policy has adopted the knowledge-based 
approach to acquisitions. DOD policy requires program managers to 
provide knowledge about certain aspects of a system at key points in 
the acquisition process. Program managers are also required to reduce 
integration risk and demonstrate product design prior to the design 
readiness review and to reduce manufacturing risk and demonstrate 
producibility prior to full-rate production. 

The FCS program is about one-third of the way into its scheduled 
product development. At this stage, it should have attained knowledge 
point one, with a strategy for attaining knowledge points two and 
three. Accordingly, we analyze the FCS business case first as it 
pertains to firming requirements and maturing technologies, which 
indicate progress against the first knowledge point. We then analyze 
FCS's strategy for attaining design and production maturity. Finally, 
we analyze the costs and funding estimates made to execute the FCS 
business case. 

Army Has Made Progress but Feasibility and Affordability of System- 
level Requirements Remain Uncertain: 

The Army has made significant progress defining FCS's system of systems 
requirements, particularly when taking into account the daunting number 
of requirements involved--nearly 11,500--at this level. Yet system- 
level requirements are not yet stabilized and will continue to change, 
postponing the needed match between requirements and resources. Now, 
the Army and its contractors are working to complete the definition of 
system-level requirements, and the challenge is in determining if those 
requirements are technically feasible and affordable. Army officials 
say it is almost certain that some FCS system-level requirements will 
have to be modified, reduced, or eliminated; the only uncertainty is by 
how much. We have previously reported that unstable requirements can 
lead to cost, schedule, and performance shortfalls. Once the Army gains 
a better understanding of the technical feasibility and affordability 
of the system-level requirements, trade-offs between the developer and 
the warfighter will have to be made, and the ripple effect of such 
trade-offs on key program goals will have to be reassessed. 

Army Has Largely Completed the Definition of FCS System of Systems 
Requirements: 

The Army has completed an FCS operational requirements document, a 
mandatory step in the DOD acquisition process. This document outlines 
552 requirements intended to meet the warfighter's needs and discusses 
the characteristics needed for the FCS-equipped brigade combat teams to 
achieve the Army's desired tactical concepts and capabilities.[Footnote 
3] FCS is described in this document as a family of systems comprising 
advanced, networked air-and ground-based maneuver, maneuver support, 
and sustainment systems. The program has seven key performance 
parameters: network-ready, networked battle command, networked 
lethality, transportability, sustainability/reliability, training, and 
survivability. In simpler terms, the Army has stated that the FCS- 
equipped brigade combat teams must be as good as or better than current 
Army forces in terms of lethality, responsiveness, sustainability, and 
survivability. Since the FCS program started in May 2003, the Army and 
the lead systems integrator have been working to translate those 
warfighter requirements first into system of systems requirements at 
the FCS level. Having this information in hand gives the Army a good 
understanding of what FCS brigade combat teams should be capable of, 
but more detailed knowledge is needed for each of the 18 individual 
systems. Now, the Army and the lead systems integrator are delving much 
deeper and more precisely to translate system of systems requirements 
into more specific requirements for individual systems within FCS. 
Figure 2 illustrates how the requirements laid out in the operational 
requirements document flow down to the FCS's system of systems and 
later to the individual system level. 

Figure 2: Flow of FCS's Overarching Requirements to System-level 
Requirements: 

[See PDF for image] 

[End of figure] 

During the requirements definition process, the Army, its lead systems 
integrator, and other contractors provided feedback on the feasibility 
of the requirements being proposed. The feedback sometimes resulted in 
several rounds of negotiations and trade-offs before requirements could 
be finalized. For example, the Army has invested much time and effort 
in deciding how best to meet the FCS transportability requirements 
while continuing to meet its lethality and survivability requirements. 
A series of design concepts were used to examine the possibilities, and 
the Army and the lead systems integrator have conducted numerous design 
trade studies. Since program start, the Army has made a number of 
design trade-offs that have been incorporated into the current design 
concepts. For example, the current manned ground vehicle design 
concepts feature a basic, lightly armored vehicle (each weighing about 
19 tons) and additional armor (bringing the total vehicle weight up to 
about 24 tons). This trade-off was intended to achieve an acceptable 
level of survivability while maintaining a limited capability for the 
vehicles to be transported on the C-130 Hercules air lifter. The Army 
also decided to accept a higher weight to achieve the lethality of the 
120-mm cannon for the mounted combat system. Finally, the Army decided 
to accept a reduction in range inherent in the lighter weight 38- 
caliber 155-mm cannon for the non-line-of-sight cannon vehicle. 

In August 2005, the Army and the lead systems integrator conducted the 
System of Systems Functional Review, which is a multi-disciplined 
technical review used to ensure that a system can proceed into 
preliminary design. The review is conducted to ensure that all system 
of systems requirements have been defined and are consistent with 
program budget, schedule, risk, and other constraints. The Army and the 
lead systems integrator demonstrated that they had (1) essentially 
completed the definition of the system of systems level requirements, 
(2) established the functional baseline for the program, and (3) made 
an initial allocation of functional requirements down to the individual 
FCS system level. As shown in figure 2 above, at the system of systems 
level, there are about 11,500 requirements. The Army anticipates that 
there eventually could be eight times the number of requirements at the 
FCS system level, or roughly 90,000 requirements. 

For the System of Systems Functional Review, the Army prepared a number 
of performance evaluations, including assessments of the entire brigade 
combat team's capabilities as well as more focused evaluations of 
individual FCS design concepts or requirements. The Army is conducting 
performance evaluations while continuing to evaluate requirement trade- 
offs and refine system-level requirements. These evaluations will be 
valuable in understanding the impact of individual requirement trade- 
off decisions on FCS capabilities as well as the Army's pledge that FCS 
would be as good as or better than the current Army forces in terms of 
lethality, survivability, responsiveness and sustainability. 

FCS System-Level Requirements Are Not Yet Firm: 

The Army deserves credit for having decided on so many requirements at 
the system of systems level and for beginning the process allocating 
functional requirements to the individual system level. However, 
according to DOD policy and best practices, requirements should be 
firmed up at the beginning of the product development phase. System 
requirements--how big, how heavy, how fast, how strong--can each be 
expressed in multiple ways. In deciding how best to address those 
system-level requirements, trade-offs may be necessary. Ideally, 
solutions go through a prioritization and refinement process before 
final decisions can be agreed upon. But continuing to define and refine 
system-level requirements three years after product development began 
creates a real challenge for the other elements of the FCS business 
case. 

Signs of instability in FCS system-level requirements are already 
evident. At the System of Systems Functional Review, an initial 
assessment was made of the technical feasibility of the functional 
requirements allocated to the individual FCS systems. While many are 
expected to be achievable, there would be technical risk in the full 
achievement of some system-level requirements including: 

* mine detection; 

* automatic target recognition for weapon terminal guidance; 

* real-time battle damage assessment; 

* chemical and radiation detection; 

* weapon self-loading for some of the unmanned ground vehicles; 

* manned ground vehicle countermine capabilities; 

* safe operation of unmanned ground vehicles; 

* network latency, quality of service, and intrusion detection; 

* improvised explosive device detection and suppression; 

* reliability, availability, maintainability, and testing; 

* unmanned air vehicle size and weight; 

* hidden target detection; and: 

* sensor data fusion. 

The Army's System of Systems Functional Review also underscored how 
critical the FCS information network is to the achieving of many of 
FCS's requirements. For example, FCS survivability depends on the 
brigade-wide availability of network-based situational awareness plus 
the inherent survivability of the FCS platforms. There is hardly any 
aspect of FCS functionality that is not predicated on the network, and 
for many key functions, the network is essential. As we will discuss 
later in this report, there is considerable technical uncertainty 
surrounding several key aspects of the FCS network. 

In the coming months, FCS teams working on individual systems will 
continue to evaluate the technical feasibility of addressing the 
allocated requirements within their current design concepts. Program 
officials also will be conducting functional reviews at the system 
level. According to Army officials, it is almost certain that some of 
the FCS system-level requirements will have to be changed; it is only 
uncertain by how much. The Army does have the ability to reallocate a 
requirement from one system to another. The Army plans to evaluate its 
progress in defining and refining FCS system-level requirements at the 
August 2006 initial preliminary design review, which signals the start 
of the systems engineering process as well as the beginning of 
preliminary design work. However, the Army may not have a stabilized 
set of technically feasible and affordable system-level requirements 
until 2008. 

Concurrently, the system-level teams will be evaluating the 
affordability of fully developing and producing each of the FCS systems 
and platforms to meet the allocated requirements. The Army has stated 
it will not exceed the target cost of $20.9 billion for the lead 
systems integrator's development contract and will attempt to produce 
the FCS systems and platforms within specific procurement cost targets. 
Key FCS program officials have indicated to us that additional system- 
level requirements changes will be needed to meet these targets. 

Applying the discipline of affordability is a good step, but it can 
make the requirement definition process more difficult. For example, to 
meet the weight goals for the manned ground vehicles, the Army expects 
to use advanced, light weight materials, such as ceramics, rather than 
traditional steel for armor protection. However, these materials are 
expected to be much more costly to produce than steel. To meet the 
individual manned ground vehicle's survivability requirements, each 
vehicle will have to be equipped for detection avoidance, target 
acquisition avoidance, hit avoidance, ballistic protection, and kill 
avoidance. Further, each manned ground vehicle would have to carry 
sensors that can detect, classify, recognize, identify, and locate 
enemy combatants. All of these capabilities will add to the cost of 
developing and producing the manned ground vehicles. Finally, the FCS 
concept depends, among other things, on the capabilities of the 
unmanned ground vehicles and unmanned air vehicles to enhance the 
survivability of the rest of the brigade combat team. However, a high 
number of unmanned ground vehicles and unmanned air vehicles themselves 
are expected to be lost to enemy fire. In the end, the Army may have to 
either provide additional unmanned ground vehicles and/or unmanned air 
vehicles or risk the loss of even more valuable manned ground vehicles 
and soldiers. Either option would involve additional costs. 

Cumulative Effects of Individual Requirement Trade-Offs Must Be 
Measured: 

Since the start of the program, the Army has already made some 
requirements trade-offs. The Army realizes that the ripple effects of 
requirements trade-offs on the anticipated FCS capabilities will need 
to be thoroughly assessed to determine if the fundamental tenets of the 
program--such as being as lethal and survivable as the current Army 
force--are still intact. For example, in deciding to maintain a 
requirement for the manned ground vehicles to be transportable on C-130 
aircraft, the Army determined that the vehicles could still meet their 
survivability and lethality requirements while meeting the size and 
weight restrictions needed to be compatible with the C-130 operating 
limitations. This solution involves, in part, the use of additional 
armor that would be put on the vehicle after it had been flown by a C- 
130 to its new operating location. The Army made this decision with the 
knowledge that the C-130 aircraft's capability to transport the FCS 
vehicles would be very limited and that the solution would require more 
C-130s to transport vehicles than previously planned. Also, as we 
pointed out in our March 2005 testimony, the development and 
integration of manned ground vehicle technologies was made vastly more 
difficult by the Army's decision to retain the C-130 transportability 
requirement. As the FCS development effort proceeds, the Army will have 
to regularly assess whether the manned ground vehicles will still be 
able to meet their lethality, survivability, and other requirements as 
well as the assumed operational value of maintaining the C-130 
transportability requirement. Decision makers need to be kept informed 
on the status of the program's basic tenets, such as FCS capabilities 
being as good as or better than those of current Army forces. 

As the technical feasibility and affordability of requirements are 
better understood, additional FCS requirements trade-offs will have to 
be made and their ripple effects identified. For example, if the 
requirements for FCS missile and munition terminal guidance are changed 
due to feasibility or cost issues, that may not have an impact only on 
lethality, but also on overall FCS survivability because the Army 
maintains that FCS survivability will be enhanced if it is able to see 
first and kill first. Also, if the FCS weapon terminal guidance 
requirements are changed, the brigade combat teams may have to carry 
and use more weapons than expected, which would have an impact on the 
team's sustainability. As another example, if the FCS countermine 
requirements are changed, then FCS manned ground vehicles may be less 
survivable and mobile. The Army may have to add additional armor to the 
manned ground vehicles, directly affecting their weight and impacting 
their transportability and sustainability. Finally, if the reliability, 
availability, maintainability, and testing requirements are adjusted, 
the brigade combat teams may have to carry more spare parts and use 
more maintenance personnel than originally anticipated. 

The Army is aiming to field FCS systems and platforms that meet all of 
its minimally acceptable threshold requirements, but according to 
program officials, that may not be possible for all requirements. 
Further, it is unclear at this point if the resulting set of system- 
level requirements will yield an overall FCS capability that will be 
acceptable to the Army as a whole and its user representative, the 
Training and Doctrine Command. The Training and Doctrine Command has 
had extensive involvement in the program to date and would have to 
approve any major changes in FCS requirements. At the System of Systems 
Functional Review, the Training and Doctrine Command representatives 
pledged their continuing cooperation in the process but also vowed to 
appeal to the Army leadership if the FCS design concepts do not provide 
sufficient capabilities to meet their wartime needs. 

FCS Success Hinges on Numerous Undemonstrated Technologies and 
Complementary Programs: 

According to the latest independent assessment,[Footnote 4] the Army 
has not fully matured any of the technologies critical to FCS's 
success. Some of FCS's critical technologies may not reach a high level 
of maturity until the final major phase of acquisition, the start of 
production. The Army considers a lower level of demonstration as 
acceptable maturity, but even against this standard, only one-third of 
the technologies are mature. We have reported that proceeding into 
product development without demonstrating mature technologies increases 
the risk of cost growth and schedule delays throughout the life of the 
program. The Army is also facing challenges with several of the 
complementary programs considered essential for meeting FCS's 
requirements. Some complementary programs are experiencing technology 
difficulties, and some have not been fully funded. These difficulties 
underscore the gap between requirements and available resources that 
must be closed if the FCS business case is to be executable. 

Critical Technologies Are a Long Way from Reaching Maturity: 

Technology readiness levels (TRL) are measures pioneered by the 
National Aeronautics and Space Administration and adopted by DOD to 
determine whether technologies were sufficiently mature to be 
incorporated into a weapon system. Our prior work has found TRLs to be 
a valuable decision-making tool because they can presage the likely 
consequences of incorporating a technology at a given level of maturity 
into a product development. The maturity level of a technology can 
range from paper studies (level 1), to prototypes that can be tested in 
a realistic environment (level 7), to an actual system that has proven 
itself in mission operations (level 9). The definitions of each TRL can 
be found in appendix IV. According to DOD acquisition policy, a 
technology should have been demonstrated in a relevant environment (TRL 
6) or, preferably, in an operational environment (TRL 7) to be 
considered mature enough to use for product development in systems 
integration. Best practices of leading commercial firms and successful 
DOD programs have shown that critical technologies should be mature to 
at least a TRL 7 before the start of product development. 

In the case of the FCS program, the latest independent technology 
assessment shows that none of the critical technologies are at TRL 7, 
and only 18 of the 49 technologies currently rated have demonstrated 
TRL 6. None of the critical technologies may reach TRL 7 until the 
production decision in fiscal year 2012, according to Army officials. 
Five technologies that the Army previously considered to be critical to 
FCS are no longer being monitored for technology maturity, although 
those technologies continue to be under development by either the Army 
or another military service. Table 1 sorts FCS's critical technologies 
according to readiness levels, and their progression over the last two 
years. 

Table 1: Number of FCS Critical Technologies Sorted by TRLs: 

TRL: TRL 7 and higher; 
Critical technology assessment as of April 2003: 1; 
Critical technology assessment as of April 2005: 0. 

TRL: TRL 6; 
Critical technology assessment as of April 2003: 7; 
Critical technology assessment as of April 2005: 18. 

TRL: TRL 5 and lower; 
Critical technology assessment as of April 2003: 24; 
Critical technology assessment as of April 2005: 31. 

TRL: Total; 
Critical technology assessment as of April 2003: 32; 
Critical technology assessment as of April 2005: 49. 

Source: U.S. Army (data); GAO (analysis and presentation): 

Note: The April 2003 assessment was organized into 31 technology areas, 
one of which had two different TRL ratings for separate technologies. 
For the April 2005 assessment, the original 31 technology areas were 
subdivided into 54 individual technologies. Five of the original 
technologies are no longer being tracked, leaving a total of 49. 

[End of table] 

Projected dates for FCS technologies to reach TRL 6 have slipped 
significantly since the start of the program, as shown in figure 3. 

Figure 3: Comparison of Projected Dates for Technology Maturity: 

[See PDF for image] 

[End of figure] 

In the 2003 technology assessment, 87 percent of FCS's critical 
technologies were projected to be mature to a TRL 6 by 2005. In April 
2005, 31 percent of the technologies were expected to mature to a TRL 6 
by 2005, and all technologies are not expected to be mature to that 
level until 2009. Several key technologies have slipped. For example, 
to meet FCS survivability and sustainability requirements, the Army 
requires High Density Packaged Power, a technology designed to provide 
high-output, constant-level, stored power to the FCS manned ground 
vehicles. This technology was originally projected to reach TRL 6 
maturity by fiscal year 2003. In the latest assessment, however, that 
date slipped nearly five years to fiscal year 2008. Another technology, 
Quality of Service Algorithms, which are protocols implemented in 
network software and used to determine how information is moved and 
tracked to users, was originally expected to reach TRL 6 by fiscal year 
2004, but now projected maturity has slipped three years. The Army 
originally anticipated the Lightweight Hull and Vehicle Armor to reach 
TRL 6 by fiscal year 2003; however, this has been delayed by five 
years. Appendix III lists all 54 critical technologies, their current 
TRL status, and the projected date for reaching TRL 6. 

Technology and Integration Challenges for Manned Ground Vehicles: 

FCS features eight types of manned ground vehicles, each requiring the 
development of numerous technologies that must be brought together in 
an integrated design to deliver required capabilities. The Mounted 
Combat System will require a newly developed lightweight weapon for 
lethality; a hybrid electric drive system and a high-density engine for 
mobility; advanced armors, an active protection system, and advanced 
signature management systems for survivability; and the Joint Tactical 
Radio System with the wideband networking waveform for communications 
and network connectivity. FCS manned ground vehicles are expected to be 
revolutionary, not only because of their proposed capabilities but also 
in terms of their size and weight. They have been likened in complexity 
to fighter aircraft. Under other circumstances, each of the eight 
manned ground systems would be a major defense acquisition program in 
its own right. 

Since 2003, the Army has been working to develop a series of design 
concepts and is currently evaluating the technical feasibility and 
affordability of the system-level requirements that have been allocated 
to each of the eight vehicles. By August 2006, the Army expects to 
decide which of those requirements will be pursued in the preliminary 
design, and which ones will have to be changed or deleted. Among many 
others, the achievement of the following manned ground vehicles 
requirements have been identified as involving technical and design 
challenges: 

* engine, 

* silent watch (which relates to battery capacity), 

* 14.5-mm survivability, 

* signature management, 

* lightweight track, and: 

* power distribution. 

As we noted earlier, several critical technologies are not projected to 
mature to a TRL 6 until fiscal year 2008 or 2009, at or around the 
point when the program should be starting detailed designs for each 
vehicle. Further, it should be noted that the step to mature 
technologies from a TRL 6 to a TRL 7 is often difficult and 
unpredictable. All told, the Army is unlikely to be able to match 
requirements with technical and design solutions until at least fiscal 
year 2008. 

In addition, manned ground vehicles face several technology and 
integration challenges. 

* The Active Protection System is expected to protect manned ground 
vehicles by sensing and destroying such threats as incoming tank rounds 
and rocket-propelled grenades. However, technology assessments have 
recognized that (1) it may not be possible to have a single, integrated 
active protection system that protects against all threats, (2) the 
Threat Warning System, a technology used to detect and track incoming 
threats at extended ranges, will not be mature to TRL 6 until fiscal 
2009, (3) the part of the system to defeat kinetic energy threats will 
require significant effort from the science and technology 
community,[Footnote 5] and (4) protection technology may have limited 
utility in urban environments due to collateral effects. 

* The Army is considering integrating an electromagnetic armor as a 
defense layer for manned ground vehicles. However, electromagnetic 
armor is still an immature technology and poses integration issues, 
including requiring a large amount of power storage capability that may 
not be possible within vehicle design and weight constraints. Component 
maturation and size reduction will be needed to keep electromagnetic 
armor as a viable survivability approach. 

* The integration of the 120-mm cannon on the Mounted Combat System 
vehicle poses design challenges. While the lightweight 120-mm cannon 
has achieved TRL 6 maturity that meets baseline requirements for the 
gun, this testing was conducted on a stationary hardstand and not on a 
turret or vehicle prototype. Those tests are planned for fiscal years 
2007 and 2009, respectively. Realistic testing is important because 
program officials cannot be certain whether the turret and vehicle 
design will be able to withstand the gun blast without damage to the 
vehicle. 

* The integration of the Lightweight Hull and Vehicle Armor in manned 
ground vehicles may also prove to be difficult, and there is a risk 
that the proposed lightweight armor will not satisfy transportability 
requirements while providing adequate protection. The design and 
integration issues must be addressed by large-scale ballistic testing, 
particularly for the cutting-edge ceramic armors being considered. 

* Mine protection technology, intended to protect manned ground 
vehicles and occupants from mine blast, is still immature and has 
significant challenges that include blast armor development, armor 
repair, and structural and weight integration. Because of its immature 
status, the program is considering alternatives for its development. 

The acceptable resolution of at least some of these issues--such as 
those involving the active protection system, lightweight hull and 
armor, and mine protection--may be important enough that they represent 
"go/no go" markers in the development of manned ground vehicles. For 
example, if the active protection system technology and integration 
issues cannot be acceptably resolved and its capabilities may be less 
than needed, it is unclear if the FCS program will be able to complete 
the detailed designs of the manned ground vehicles and meet the 
expectations for critical design review. 

To meet the program's goal to have manned ground vehicle prototypes 
available in late fiscal year 2010 or early fiscal year 2011, their 
fabrication would probably have to start well before design stability 
is achieved. If technology and integration issues identified to date 
are not resolved by that point, it is questionable whether the level of 
system integration that may be available for the prototype designs and 
if their demonstration will be able to yield acceptable results. 

Many Complementary Programs Are at Risk: 

The FCS program may have to interoperate or integrate with as many as 
170 programs, some of which are in development and many are currently 
fielded programs. Many complementary programs are not being developed 
exclusively for FCS and are outside the direct control of the FCS 
program. Because of the complementary programs' importance to FCS, the 
Army closely monitors how well those efforts will synchronize with the 
FCS program. Of all the complementary programs, 52 are considered 
essential to meeting FCS key performance parameters. However, many of 
these programs have technical or funding problems and generally have 
uncertain futures. 

FCS Information Network Depends on Complementary Programs: 

We reported in June 2005 that two key systems of the FCS network, the 
Joint Tactical Radio System (JTRS) and Warfighter Information Network- 
Tactical (WIN-T), were struggling to meet ambitious user requirements, 
steep technical challenges, and aggressive schedules, which raised 
uncertainty about the ability of the FCS network to perform as intended 
and threatened the schedule for fielding Future Force 
capabilities.[Footnote 6] We recommended that the Secretary of Defense 
establish low-risk schedules for JTRS and WIN-T and synchronize the FCS 
schedule with a demonstration of JTRS and WIN-T capabilities. DOD 
generally concurred and indicated it has begun taking action to address 
our recommendations. Since our report, JTRS has been undergoing a major 
restructuring to reduce technical and programmatic risks. In addition, 
WIN-T is being rebaselined to address the Army's recent shift in focus 
to meet both near-and future-term requirements, as well as to better 
synchronize with FCS. The results of the JTRS and WIN-T program 
restructurings are not expected to be completed and approved until 
later this year, however; preliminary indications are that the programs 
will focus on delivering incremental capabilities to support the needs 
of FCS and other users. 

JTRS: 

JTRS is a family of software-based radios that is to provide the high 
capacity, high-speed information link to vehicles, weapons, aircraft, 
and soldiers. The JTRS program to develop radios for ground vehicles 
and helicopters--referred to as Cluster 1--began product development in 
June 2002 with an aggressive schedule, immature technologies, and lack 
of clearly defined and stable requirements. The Army has not been able 
to mature the technologies needed to provide radios that both generate 
sufficient power as well as meet platform size and weight constraints. 
In addition, the radio design is not sufficient to meet security 
requirements for operating in an open network environment. These 
factors have contributed to significant cost and schedule problems. In 
early 2005, the Office of the Secretary of Defense directed the Army to 
stop work on portions of the Cluster 1 development and have a newly 
established JTRS Joint Program Executive Office[Footnote 7] conduct an 
assessment of the program and develop options for restructuring the 
program. 

A second JTRS program--referred to as Cluster 5--to develop different 
variants of small radios that will be carried by soldiers and be 
embedded in several FCS core systems, also entered product development 
with immature technologies and a lack of well-defined requirements. 
Since the program began in 2004, it has faced significant technical 
challenges due to the small size, weight, power, and large data 
processing requirements for the radios. As a result, the Army 
recognized in 2005 that the Cluster 5 program was not sufficiently 
synchronized with the FCS program and it began assessing the 
feasibility of accelerating the development of some of the small form 
Cluster 5 radios. However, in light of the problems encountered with 
the Cluster 1 program, DOD directed the JTRS Joint Program Executive 
Office to conduct a broad assessment of all the JTRS components and 
identify more well defined and executable increments for Cluster 5. 

In December 2005, DOD approved a preliminary plan for restructuring the 
JTRS program, including Clusters 1 and 5. Details of the restructuring, 
however, are still to be worked out and the new program is not expected 
to be formally approved by DOD until late 2006. According to JTRS Joint 
Program Executive Office officials, the proposed program will address 
many of the concerns we raised in our July 2005 report and be 
structured to deliver capabilities in increments rather than all at 
once. The first increment is intended to support the FCS schedule. 
However, there are still cost, schedule, and technical risks associated 
with the planned delivery of increment one capabilities, and therefore 
it is unclear whether the capabilities will be available in time for 
the first spin-out of FCS capabilities to current forces in 2008. 

WIN-T: 

The WIN-T program is intended to provide an integrated communications 
network to connect Army units on the move with higher levels of command 
and provide the Army's tactical extension to the Global Information 
Grid, a separate, DOD-wide networked force. The WIN-T program began 
with an aggressive acquisition schedule and entered product development 
with only three of its 12 critical technologies close to full maturity. 
The program office expects that all 12 critical technologies 
demonstrated during a November 2005 developmental test/operational test 
event will be assessed as close to fully mature. In August 2005, the 
Department of the Army conducted a study which explored options for 
better synchronizing three of its major system development efforts-- 
FCS, JTRS, and WIN-T. As a result of this study, the WIN-T program will 
be rebaselined to meet emerging requirements. A new WIN-T capability 
development document will support the rebaselining of the program and 
is currently under review. A milestone B reexamination to rebaseline 
the program is planned for July 2006, and a new date for the WIN-T 
production decision will be established then. 

The restructuring of the JTRS and WIN-T programs and the success in 
developing these capabilities could well be deciding factors in the 
overall success of the FCS program. If JTRS and WIN-T do not work as 
intended, there will not be sufficient battlefield information for the 
FCS units to operate effectively. Because the network is so crucial to 
the overall success of FCS, we have suggested that its development and 
demonstration should precede major commitments to other elements of the 
FCS program, particularly the manned ground vehicles. However, the Army 
has admitted that the development of the network is several years 
behind the development of other elements of the FCS program. 

Funding Issues Cloud Future of Other Complementary Programs: 

The future of other complementary programs is in doubt primarily 
because of funding issues. The Compact Kinetic Energy Missile was to 
provide superior lethality against current tanks, bunkers, buildings, 
and future threat armor. The Joint Common Missile was to provide line- 
of-sight and beyond-line-of-sight capabilities and could be employed in 
a fire-and-forget mode or a precision attack mode. The Army has not yet 
decided if it will fund the full development of the Compact Kinetic 
Energy Missile. In December 2004, a DOD program budget decision deleted 
all procurement funding for the Joint Common Missile.[Footnote 8] The 
absence of these systems could reduce the brigade combat teams' ability 
to fight at stand off ranges, thereby reducing lethality and the 
ability to dictate the terms of the engagement. The Mid-Range Munition 
is to provide beyond-line-of-sight precision munitions for the mounted 
combat system, but its development is unfunded after fiscal year 2007. 
Elimination of the Mid-Range Munition would compromise the beyond-line- 
of-sight capability--which is a FCS threshold operational requirement-
-as well as the Army's ability to shape the battle space and dictate 
the terms of the engagement. The Precision Guidance Kit is a technology 
for projectiles that provides greater accuracy at extended ranges, but 
the development of this technology is partially unfunded. If this 
technology is not available for FCS, then long-range projectiles would 
be less accurate, reducing their effectiveness and requiring additional 
rounds to be fired at the threat. As a result, the brigade combat team 
may need to carry additional munitions, an outcome that imposes a 
logistical and transportability burden. The Army also concedes that 
there is no funding to develop the following munitions needed to meet 
selected requirements: Advanced Kinetic Energy munition, Advance Multi- 
Purpose Munition, Javelin Block II missile, Loitering Attack Missile, 
and non-lethal munitions. 

Recognizing the multiple issues surrounding complementary programs, the 
Army is reassessing its list of 52 essential programs. When that list 
is finalized in the coming months, the Army will have to determine how 
to replace any capabilities eliminated from the list. As with 
requirements, the cumulative effects of changes in technologies and 
complementary programs on overall FCS capabilities are important to 
measure. The Army's inability to fund all essential complementary 
programs raises concerns about the gap between requirements and 
resources. 

FCS Acquisition Strategy Will Demonstrate Design Maturity After 
Production Begins: 

The knowledge deficits for requirements and technologies have created 
enormous challenges for devising an acquisition strategy that can 
demonstrate the maturity of design and production processes. Even if 
requirements setting and technology maturity proceed without incident, 
FCS design and production maturity will still not be demonstrated until 
after the production decision is made. Production is the most expensive 
phase in which to resolve design or other problems. Several efforts 
within the FCS program are facing significant problems that may 
eventually involve reductions in promised capabilities and may lead to 
cost overruns and schedule delays. 

FCS Acquisition Strategy Involves Concurrent Development and Is Not 
Knowledge-Based: 

The Army's acquisition strategy for FCS does not reflect a knowledge- 
based approach. Figure 4 shows how the Army's strategy for acquiring 
FCS involves concurrent development, design reviews that occur late, 
and other issues that are out of alignment with the knowledge-based 
approach outlined in DOD policy. 

Ideally, the preliminary design review occurs at or near the start of 
product development. Activities leading up to the preliminary design 
review include, among others, translating system requirements into 
design specifics. Doing so can help reveal key technical and 
engineering challenges and can help determine if a mismatch exists 
between what the customer wants and what the product developer can 
deliver. Scheduling the preliminary design review early in product 
development is intended to help stabilize cost, schedule, and 
performance expectations. The critical design review ideally occurs 
midway into the product development phase. The critical design review 
should confirm that the system design performs as expected and is 
stable enough to build production-representative prototypes for 
testing. The building of production-representative prototypes helps 
decision makers confirm that the system can be produced and 
manufactured within cost, schedule, and quality targets. According to 
the knowledge-based approach, a high percentage of design drawings 
should be completed and released to manufacturing at critical design 
review. The period leading up to critical design review is referred to 
as system integration, when individual components of a system are 
brought together, and the period after the review is called system 
demonstration, when the system as a whole demonstrates its reliability 
as well as its ability to work in the intended environment. 

The Army has scheduled the preliminary design review in fiscal year 
2008, about five years after the start of product development. The 
critical design review is scheduled in fiscal year 2010, just two years 
after the scheduled preliminary design review and the planned start of 
detailed design.[Footnote 9] This is not to suggest that the two design 
reviews for the FCS could have been scheduled earlier but rather that 
commitments to production are scheduled too soon afterward. The timing 
of the design reviews is indicative of how late knowledge will be 
attained in the program, assuming all goes according to plan. The 
critical design review is scheduled just two years before the initial 
FCS production decision in fiscal year 2012, leaving little time for 
product demonstration and correction of any issues that are identified 
at that time. The Army is planning to have prototypes of all FCS 
systems available for testing prior to low-rate initial production. For 
example, manned ground vehicle prototypes are expected to be available 
in late 2010 and early 2011 for developmental and qualification 
testing. However, these prototypes are not expected to be production- 
representative prototypes and may not be fully integrated. Whereas the 
testing of fully integrated, production-representative prototypes 
demonstrate design maturity and their fabrication can demonstrate 
production process maturity, neither of these knowledge points will be 
attained until after the production decision is made. 

Figure 4: FCS Acquisition Compared with Commercial Best Practices' 
Approach: 

[See PDF for image] 

[End of figure] 

The FCS program is thus susceptible to late-cycle churn, a condition 
that we reported on in 2000.[Footnote 10] Late cycle churn is a phrase 
private industry has used to describe the efforts to fix a significant 
problem that is discovered late in a product's development. Churn 
refers to the additional--and unanticipated--time, money, and effort 
that must be invested to overcome problems discovered through testing. 
Problems are most serious when they delay product delivery, increase 
product cost, or "escape" to the customer. The discovery of problems in 
testing conducted late in development is a fairly common occurrence on 
DOD programs, as is the attendant late cycle churn. Often, tests of a 
full system, such as launching a missile or flying an aircraft, become 
the vehicles for discovering problems that could have been found out 
earlier and corrected less expensively. When significant problems are 
revealed late in a weapon system's development, the reaction--or churn-
-can take several forms: extending schedules to increase the investment 
in more prototypes and testing, terminating the program, or redesigning 
and modifying weapons that have already made it to the field. While DOD 
has found it acceptable to accommodate such problems over the years, 
this will be a difficult proposition for the FCS given the magnitude of 
its cost in an increasingly competitive environment for investment 
funds. 

The Army is proceeding with its plans to mitigate FCS risks using 
modeling, simulation, emulation, and system integration laboratories. 
This approach is a necessary aspect of the Army acquisition strategy 
and is designed to reduce the dependence on late testing to gain 
valuable insights about many aspects of FCS development, including 
design progress. However, on a first-of-a-kind system--like FCS--that 
represents a radical departure from current systems and warfighting 
concepts, actual testing of all the components integrated together is 
the final proof that the FCS system of systems concept works both as 
predicted and as needed. 

As FCS's Higher Costs Are Recognized, Funding Availability Becomes a 
Greater Challenge: 

The total cost for the FCS program, now estimated at $160.7 billion 
(then-year dollars), has climbed 76 percent from the Army's first 
estimate. Because uncertainties remain regarding FCS's system-level 
requirements and the Army faces significant challenges in technology 
and design maturity, we believe the Army's latest cost estimate still 
lacks a firm knowledge base. Furthermore, this latest estimate does not 
include complementary programs that are essential for FCS to perform as 
intended, or the necessary funding for spin-outs. The Army has taken 
some steps to help manage the growing cost of FCS, including 
establishing cost ceilings or targets for development and production. 
However, program officials told us that setting cost limits may result 
in accepting lower capabilities. As FCS's higher costs are recognized, 
it remains unclear whether the Army will have the ability to fully fund 
the planned annual procurement costs for the FCS current program of 
record. FCS affordability depends on the accuracy of the cost estimate, 
the overall level of development and procurement funding available to 
the Army, and the level of competing demands. 

FCS Costs Have Increased as Army Attains More Information, but Firm 
Knowledge Base Still Lacking: 

At the start of product development, FCS program officials estimated 
that the program would require about $20 billion in then-year dollars 
for research, development, testing, and evaluation and about $72 
billion to procure the FCS systems to equip 15 brigade combat teams. At 
that time, program officials could only derive the cost estimate on the 
basis of what they knew then--requirements were still undefined and 
technologies were immature. The total FCS program is now expected to 
cost $160.7 billion in then-year dollars, a 76 percent increase. Table 
2 summarizes the growth of the FCS cost estimate. 

Table 2: Comparison of Original Cost Estimate and Current Cost Estimate 
for FCS Program (in billions of then-year dollars): 

Research, development, testing, and evaluation; 
Original estimate: $19.6; 
Revised estimate (as of 1/2006): $30.5; 
Percentage increase: 56%. 

Procurement; 
Original estimate: $71.8; 
Revised estimate (as of 1/2006): $130.2; 
Percentage increase: 81%. 

Total; 
Original estimate: $91.4; 
Revised estimate (as of 1/2006): $160.7; 
Percentage increase: 76%. 

Source: Army (data); GAO (analysis and presentation). 

[End of table] 

According to the Army, the current cost estimate is more realistic, 
better informed, and based on a more reasonable schedule. The estimate 
accounts for the restructure of the FCS program and its increased 
scope, the four-year extension to the product development schedule, the 
reintroduction of four systems that had been previously deferred, and 
the addition of a spin-out concept whereby mature FCS capabilities 
would be provided, as they become available, to current Army forces. 
Under the original estimate, the program planned to acquire enough FCS 
equipment for an average of two brigade combat teams per year and to 
equip all 15 by fiscal year 2020. Army officials told us that the 
current cost estimate incorporates the lengthened development schedule 
and a more realistic procurement plan under which the program will 
procure 1.5 brigade combat teams per year (versus two per year in the 
original cost estimate), reaching 15 complete brigade combat teams by 
fiscal year 2025. This cost estimate has also benefited from progress 
made in defining the FCS system of systems requirements. 

Figure 5 compares the funding profiles for the original program and for 
the latest restructured program. 

Figure 5: Comparison of Original Cost Estimate and Current Cost 
Estimate for FCS Program between Fiscal Years 2003 and 2026 (in 
millions of then-year dollars): 

[See PDF for image] 

[End of figure] 

The current FCS funding profile is lower than the original through 
fiscal year 2013, but is substantially higher than the original after 
fiscal year 2013. Stretching out FCS development by four years freed up 
about $9 billion in funding through fiscal year 2011 for allocation to 
other Army initiatives. Originally, FCS annual funding was not to 
exceed $10 billion in any one year. Now, the cost estimate is expected 
to exceed $10 billion in each of nine years. While it is a more 
accurate reflection of program costs than the original estimate, the 
latest estimate is still based on a low level of knowledge about 
whether FCS will work as intended. Also, the latest cost estimate has 
not yet been independently validated, as called for by DOD's 
acquisition policy. The Cost Analysis Improvement Group will not 
provide its updated independent estimate until spring 2006, for the 
planned Defense Acquisition Board review of the FCS program in May 
2006. 

The latest cost estimate does not include all the costs that will be 
needed to field FCS capabilities. For instance, the costs of the 52 
essential complementary programs are separate, and some of those costs 
could be substantial. For example, the costs of the Joint Tactical 
Radio System Clusters 1 and 5 programs were expected to be about $32.6 
billion (then-year dollars).[Footnote 11] Some complementary programs, 
such as the Mid-Range Munition and Javelin Block II, are currently not 
funded for their full development. These and other unfunded programs 
would have to compete for already tight funding. Furthermore, program 
officials told us the procurement of the spin-outs from the FCS program 
to current Army forces is not yet entirely funded. Procuring the FCS 
items expected to be spun out to current forces is expected to cost 
about $19 billion, and the needed installation kits may add another $4 
billion. Adding these items to the FCS cost estimate brings the total 
required investment from the Army to the $200 billion range. 

The Army is planning to make substantial financial investments in the 
FCS program before key knowledge is gained on requirements, 
technologies, system designs, and system performance. Table 3 shows the 
annual and cumulative funding and the level of knowledge to be attained 
each fiscal year. 

Table 3: Annual and Cumulative FCS Funding and Planned Events and 
Achievements: 

Fiscal year: 2003; 
Percentage of funding spent to date: 0.5; Annual research, development, 
testing, and evaluation funding (in millions of dollars): 158.9; 
Cumulative research, development, testing, and evaluation funding (in 
millions of dollars): 158.9; Planned events and achievements: Start of 
product development. 

Fiscal year: 2004; 
Percentage of funding spent to date: 5.9; Annual research, development, 
testing, and evaluation funding (in millions of dollars): 1,637.3; 
Cumulative research, development, testing, and evaluation funding (in 
millions of dollars): 1,796.2; Planned events and achievements: Program 
restructured. 

Fiscal year: 2005; 
Percentage of funding spent to date: 15.5; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
2,929.9; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 4,726.1; Planned events and 
achievements: System of Systems Functional Review; system of systems 
requirements stabilized; cost estimate updated. 

Fiscal year: 2006; 
Percentage of funding spent to date: 26.7; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
3,398.4; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 8,124.5; Planned events and 
achievements: Initial preliminary design review; initial system-level 
requirements. 

Fiscal year: 2007; 
Percentage of funding spent to date: 38.7; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
3,669.4; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 11,793.9; Planned events and 
achievements: [Empty]. 

Fiscal year: 2008; 
Percentage of funding spent to date: 50.7; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
3,655.6; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 15,449.5; Planned events and 
achievements: Preliminary design review; most technologies reach TRL 6; 
initial critical design review; final system-level requirements. 

Fiscal year: 2009; 
Percentage of funding spent to date: 61.9; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
3,419.2; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 18,868.7; Planned events and 
achievements: All technologies reach TRL 6. 

Fiscal year: 2010; 
Percentage of funding spent to date: 72.6; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
3,256.0; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 22,124.7; Planned events and 
achievements: Critical design review; limited user test 2; some 
prototypes available. 

Fiscal year: 2011; 
Percentage of funding spent to date: 81.8; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
2,799.9; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 24,924.6; Planned events and 
achievements: Design readiness review; all system prototypes available. 

Fiscal year: 2012; 
Percentage of funding spent to date: 88.2; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
1,952.3; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 26,876.9; Planned events and 
achievements: Technologies reach full TRL 7 maturity; initial 
production decision; limited user test 3; initial system of systems 
demonstration. 

Fiscal year: 2013; 
Percentage of funding spent to date: 92.9; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
1,410.8; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 28,287.7; Planned events and 
achievements: [Empty]. 

Fiscal year: 2014; 
Percentage of funding spent to date: 96.7; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
1,167.3; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 29,455; Planned events and 
achievements: Limited user test 4; full system of systems 
demonstration; fielding start brigade combat teams. 

Fiscal year: 2015; 
Percentage of funding spent to date: 99.6; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
901.7; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): 30,356.7; Planned events and 
achievements: Initial operational capability. 

Fiscal year: 2016; 
Percentage of funding spent to date: 100; Annual research, development, 
testing, and evaluation funding (in millions of dollars): 108.3; 
Cumulative research, development, testing, and evaluation funding (in 
millions of dollars): 30,465; Planned events and achievements: Initial 
operational test and evaluation; full- rate production decision. 

Fiscal year: 2017; 
Percentage of funding spent to date: [Empty]; Annual research, 
development, testing, and evaluation funding (in millions of dollars): 
[Empty]; Cumulative research, development, testing, and evaluation 
funding (in millions of dollars): [Empty]; Planned events and 
achievements: Full operational capability. 

[End of table] 

Source: U.S. Army (data); GAO (analyst and presentation): 

Through fiscal year 2006, about $8 billion will have been spent on FCS 
development efforts. However, many pre-development activities, such as 
requirements definition and technology development, were slated for 
this period. About one-half of FCS's development funding, or about $15 
billion, will be spent by the time most critical technologies are 
mature to TRL 6 and the preliminary design review is conducted. About 
$22 billion, or over 70 percent of the total funding, will be spent by 
the expected time of the critical design review. Further, about 88 
percent will have been spent before an initial demonstration of FCS 
capabilities is accomplished. 

Army Has Taken Steps to Control FCS Program Costs: 

The Army has taken several steps to help manage the growing cost of 
FCS. Program officials told us they have budgeted for development risk 
by building a total of $5 billion into the FCS cost estimates to cover 
risk. Also, program officials have said that they will not exceed the 
$20.9 billion cost ceiling of the lead systems integrator's development 
contract, but may have to modify, reduce, or delete FCS requirements to 
stay within this target. For example, the Army has prioritized each of 
the FCS requirements. If one or more of the highest priority 
requirements ultimately cost more to develop than anticipated, the Army 
plans to modify, reduce, or delete a lower priority requirement. In 
addition to the ceiling on FCS development costs, the Army says it will 
focus on reducing the average unit production cost of the FCS brigade 
combat teams. To do this, the Army is evaluating and improving 
producibility of designs early in the program and has given the 
contractor incentives to reduce the unit costs. 

The Army monitors the FCS program's development progress through its 
earned value management system. This is a tool by which the program 
manager can monitor the technical, schedule, and cost parameters of the 
contract. As the program proceeds, the Army and the lead systems 
integrator can determine the status of each portion and can take 
corrective actions as problems occur. While the earned value system 
currently shows that the program slightly exceeds schedule expectations 
and is below estimated cost against the restructured baseline, program 
officials said it is too early to broadly interpret these data in light 
of the recent rebaseline of the program. At this point, the Army 
believes that the data are not yet mature enough to develop trends and 
make predictions. 

In addition, the Deputy Secretary of Defense, in early fiscal year 
2006, asked each military service to provide additional adjustments to 
their projected budgets. The Army, in particular, was asked to decrease 
its budget by $11.7 billion from fiscal year 2007 to 2011. At this 
point, the FCS funding profile has not been affected. 

Future Funding May Not Be Sufficient to Cover Projected FCS Procurement 
Costs: 

The affordability of the FCS program depends on several key 
assumptions. First, the program must proceed without exceeding its 
currently projected costs. Second, the Army's annual procurement budget 
is expected to grow, from about $11 billion (then-year dollars) in 
fiscal year 2006 to at least $20 billion in future years. The Army's 
projected budget also includes $5 billion per year from fiscal year 
2007 through 2011 for its initiative to convert current Army forces to 
modular units. The Army is counting on its modularity initiative for 
brigade combat teams to be completed by fiscal year 2014, just as FCS 
procurement dollars begin to ramp up. However, recent GAO work[Footnote 
12] has indicated that modularity efforts to date have exceeded 
original estimates and remain likely to further exceed current cost 
estimates. Army officials further told us that they expect to rely on 
supplemental funding for the war on terrorism and Operation Iraqi 
Freedom for the duration of those efforts plus two additional years. 
Within that supplemental funding, about $4 billion per year is 
projected to be needed to refurbish Army equipment used in Iraq and 
Afghanistan. The Army also assumes that (1) it will realize savings of 
about $5 billion per year from fiscal year 2005 through 2011 from 
business process engineering and (2) Congress will continue to provide 
additional annual funding of about $3 billion for higher Army troop 
levels. 

Figure 6 compares the projected FCS budget with the funds the Army 
projects for its total procurement budget. 

Figure 6: Comparison of FCS Budget with Total Army Procurement Budget 
(in billions of then-year dollars): 

[See PDF for image] 

[End of figure] 

The Army's annual procurement budget--not including funds specifically 
allocated for the modularity initiative--is expected to grow from about 
$11 billion in fiscal year 2006 to at least $20 billion by fiscal year 
2011. Even if this optimistic projection comes to pass, FCS annual 
procurement costs will dominate the Army procurement funding. If the 
Army budget remains at fiscal year 2011 levels, FCS procurement will 
represent about 60-70 percent of Army procurement from fiscal years 
2014 to 2022. With the remainder, the Army will have to address current 
force upgrades, including spin-outs from FCS, the procurement of FCS 
complementary programs, aviation procurement, trucks, ammunition, and 
other equipment. Further, FCS will have to compete for funding with 
other Army "big-ticket" items, such as missile defense systems and the 
future heavy lift helicopter. 

The large annual procurement costs for FCS are expected to begin in 
fiscal year 2012, which is beyond the current Future Years Defense Plan 
period (fiscal years 2006-2011). This situation is typically called a 
funding bow wave. The term bow wave is used to describe a requirement 
for more funds just beyond the years covered in the current defense 
plan that are subject to funding constraints. As it prepares the next 
defense plan, the Army will face the challenge of allocating sufficient 
funding to meet the increasing needs for FCS procurement in fiscal 
years 2012 and 2013. According to an Army official, if all the needed 
funding cannot be identified, the Army will consider reducing the FCS 
procurement rate or delaying or reducing items to be spun out to 
current Army forces. However, reducing the procurement rate would 
increase the FCS unit costs and extend the time needed to deploy FCS- 
equipped brigade combat teams. 

Conclusions: 

The critical role played by U.S. ground combat forces is underscored 
today in Operation Iraqi Freedom and the global war of terrorism. That 
the Army should ensure its forces are well equipped with the 
capabilities they will need in the coming years is unquestioned. 
Moreover, the top-level goals the Army has set for its future force 
seem inarguable: to be as lethal and survivable as the current force, 
but significantly more sustainable and mobile. However, the Army's 
approach to meeting these needs--embodied in the FCS and complementary 
systems--does raise questions. 

On the one hand, the FCS is the result of the Army leadership's taking 
a hard look at how it wants its forces to fight in the future. Army 
leadership has had the courage to break with tradition on FCS; it would 
have likely been much easier to win support for successor vehicles to 
the Abrams and Bradley. Perhaps the most compelling aspect of the FCS 
solution is the fact that the Army defined the larger context within 
which it wants its new assets and capabilities to work, including 
command and organizational changes. This holistic approach will 
facilitate designing individual systems to operate together in a way 
that has not been done in the past. In this sense, FCS is being 
designed to be much more than the sum of its individual parts. 

On the other hand, FCS does not present a good business case for an 
acquisition program. It is necessary that a major new investment like 
FCS have a compelling, well-thought out concept, but this alone is not 
sufficient. FCS began product development prematurely in 2003, and 
today is a long way from having the level of knowledge it should have 
had before committing resources to a new product development effort. 
The elements of a sound business case--firm requirements, mature 
technologies, a knowledge-based acquisition strategy, a realistic cost 
estimate, and sufficient funding--are not present. FCS has all the 
indicators for risks that would be difficult to accept for any single 
system. They are even more daunting in the case of FCS not only because 
of their multiplicity, but because FCS represents a new concept of 
operations that is predicated on technological breakthroughs. Thus, 
technical problems, which accompany immaturity, not only pose 
traditional risks to cost, schedule, and performance; they pose risks 
to the new fighting concepts envisioned by the Army. 

The Army sees the foregoing as risk-averse thinking. The Army does not 
see immature technologies as an unacceptable risk, but as a "just in 
time" approach that is necessary to guard against technological 
obsolescence. The Army believes FCS technologies will mature 
predictably when needed and that they must have much latitude to make 
trade-offs across systems in case they do not mature. Similarly, the 
Army has set cost limitations for FCS and is prepared to make trade- 
offs in capability to offset future cost growth. Also, the Army is 
confident that advances in modeling and simulation reduce the reliance 
on physical testing to demonstrate performance. 

It is possible that the Army's strategy for acquiring FCS could succeed 
as planned. But counting on it would require suspending credence in the 
lessons learned on other programs as well as the best practices of 
successful programs. Committing to the strategy also means setting 
aside DOD's acquisition policies--which espouse an evolutionary, 
knowledge-based approach--for an entire generation of Army 
acquisitions. The Army has made important progress on setting FCS 
system of systems requirements and making key decisions, such as 
vehicle weights. But its progress thus far seems to have done more to 
confirm risk than to have refuted it; setting system-level requirements 
and maturing technologies have proven difficult and are taking longer 
than planned. 

In making decisions to commit additional resources to acquiring the 
capabilities represented by FCS, DOD must recognize the immaturity of 
the program and the amount of discovery that lies ahead. It is not a 
certainty that FCS will work and enable the concept of operations the 
Army envisions. A full commitment to the Army's strategy for acquiring 
FCS is not yet warranted because the Army has not demonstrated 
sufficient knowledge to provide confidence that it can deliver a fully 
capable FCS within projected costs and time frames. Based on the Army's 
plans, there should be sufficient progress on system-level requirements 
definition and technology development by the time of its preliminary 
design review in 2008 to realistically assess whether the program's 
goals are achievable and at what cost. As DOD proceeds with its 
decisions, it must preserve its ability to change course on acquiring 
FCS capabilities to guard against a situation in which FCS will have to 
be acquired at any cost. It must also be able to hold the Army 
accountable for delivering FCS within budgeted resources. In this vein, 
options are available to frame FCS capabilities around a business case 
that comports with acquisition policies and best practices and to 
minimize risk within the current acquisition strategy. Alternatives to 
the current FCS acquisition strategy must also be kept viable in the 
event that desired capabilities prove unattainable. 

Recommendations for Executive Action: 

We recommend that the Secretary of Defense limit DOD's commitment to 
the FCS product development phase and eventual production until a sound 
business case that is consistent with DOD acquisition policy and best 
practices can be clearly demonstrated. 

We also recommend that the Secretary of Defense lay the groundwork for 
the Army's development of a sound FCS business case by tasking the 
spring 2006 Defense Acquisition Board to do the following: 

* Revaluate the FCS business case--including requirements, 
technologies, complementary programs, acquisition strategy, cost, and 
funding availability--in light of its own acquisition policies. In its 
reevaluation, the board should (1) assess both the program's prospects 
for success and the consequences of not delivering desired capability 
within budgeted resources and (2) ensure that the Army has a 
disciplined way to measure and assess the cumulative effects of 
individual requirements, technology, design, and cost changes on the 
primary FCS characteristics of lethality, survivability, 
responsiveness, and sustainability. 

* If the business case for FCS is found not to be executable, determine 
whether investments in FCS design-and production-related activities 
should be curbed until system-level requirements are firm and 
technologies are mature. 

* If the deficiencies in the FCS business case are judged to be 
recoverable, establish the incremental markers that are needed to 
demonstrate that FCS is proceeding on a knowledge-based approach and to 
hold the Army accountable, through periodic reporting or other means, 
for achieving those markers. The markers should include, but not be 
limited to: 

* the schedules for all critical technologies to realistically progress 
through TRL 7; 

* waypoints and criteria for reaching a set of system-level 
requirements that are both technically feasible and affordable; 

* the schedule and funding availability for developing essential 
complementary programs; 

* waypoints and criteria to be used to lead up to and complete the 
preliminary and critical design reviews; 

* waypoints and criteria to be used to lead up to and complete testing 
of fully integrated prototypes of all FCS systems, including the 
network; and: 

* waypoints and criteria to be used to demonstrate that key production 
processes are in statistical control. 

We recommend that the Secretary of Defense reassess the FCS cost 
estimate and funding availability based on the independent cost 
estimate and any program changes to improve its business case. 

Finally, we recommend that the Secretary of Defense establish a 
milestone review by the Defense Acquisition Board following the Army's 
preliminary design review scheduled for 2008. This should be a go/no-go 
review of the FCS program that is based on (1) the program's ability to 
demonstrate whether it is meeting the knowledge markers outlined above 
at times consistent with DOD policy and best practices and (2) whether 
the funds can still be made available to afford its costs. 

Matters for Congressional Consideration: 

Based on its response to our report, it does not appear that DOD plans 
to assess the FCS business case against best practices or its own 
policies. Nor has DOD agreed to hold a go/no-go milestone review in 
2008 based on the preliminary design review. Congress will likely be 
asked to approve fiscal years 2008 and 2009 funding requests before the 
FCS business case is adequately demonstrated. In light of DOD's 
response, the Congress should consider directing the Secretary of 
Defense to: 

* Report on the results of the May 2006 Defense Acquisition Board's 
review of the FCS program business case in the areas of requirements, 
technologies, acquisition strategy, cost, and funding. 

* Direct DOD to conduct and report the results of a milestone review in 
2008, following the preliminary design review, that will be a go/no-go 
review of the FCS program that is based on its demonstration of a sound 
business case. 

The Congress should also consider restricting annual appropriations for 
fiscal years 2008 and 2009 for the FCS program until definitive 
progress in establishing a sound business case is demonstrated in terms 
of firm requirements, mature technologies, a knowledge-based 
acquisition strategy, a realistic cost estimate, and sufficient 
funding. Importantly, the Army must provide sufficient evidence that 
FCS will work. 

Agency Comments and Our Evaluation: 

DOD concurred with the intent of our recommendations but did not agree 
to limit its commitment to the FCS program or to take any action beyond 
what it had already planned to do. DOD stated it is committed to the 
Army's transformation and that effort, and in particular the FCS 
program, requires a disciplined, yet agile, acquisition construct. DOD 
added that the Defense Acquisition Executive has determined that the 
FCS program is based on a viable acquisition strategy. DOD stated that 
it would reevaluate the FCS acquisition strategy and reassess FCS cost 
estimates and funding in the spring 2006 Defense Acquisition Board 
review. DOD also noted that a Defense Acquisition Board review would be 
held for the timeframe (2008) of the FCS preliminary design review, but 
refrained from committing to making it a milestone decision review. 

DOD's response to our draft report did not specifically address our 
findings on the FCS program's lack of a sound business case. DOD was 
also not specific about what criteria or standards for knowledge it 
would use in making its assessments, but referred to the incremental 
markers contained in the FCS acquisition strategy and system 
engineering plan. It is important that these markers reflect standards 
for knowledge that are consistent with best practices and DOD policy. 
Thus far, the FCS program has been judged by its own markers. As we 
have pointed out in this report, these markers have allowed FCS to be 
judged as acceptable despite its falling far short of the markers that 
represent best practices and DOD acquisition policy. For example, the 
low state of technology maturity has not prevented DOD from concluding 
that the FCS strategy is viable. Using the program's markers as a basis 
for future reviews raises the question of whether FCS will continue to 
be held to a lower standard than DOD policy. Over time, as the 
program's markers are adjusted in light of actual performance and more 
money is invested, it will become increasingly difficult for the Army 
and DOD to conclude that program progress is anything other than 
acceptable. 

Regarding a commitment to a milestone review in 2008, we note that, in 
recognition of the fact that the FCS was allowed to proceed into 
Systems Development and Demonstration prematurely, DOD had directed a 
full milestone review update be held in November 2004. However, that 
review has not yet occurred and it now appears that it will not occur. 
Thus, there is no commitment by DOD to review the FCS business case 
(including all elements in addition to the acquisition strategy), 
culminating in a go/no-go decision in 2008 based on the preliminary 
design review. The increased responsibility of making a declarative 
decision adds a higher level of discipline and accountability than a 
review implies. We maintain our position that such a decision is 
warranted. 

It is important to note that Congress will continue to be asked to make 
funding commitments in advance of program events. Specifically, the 
budget request for fiscal year 2008, which will support the preliminary 
design review, will be presented to Congress for approval in January 
2007. Conceivably, the request for the fiscal year 2009 budget, which 
will be presented in January 2008, will also precede the preliminary 
design review. Congress should safeguard itself against a situation in 
which budget decisions could preclude its ability to make adjustments 
to FCS as warranted by actual demonstrated performance against the 
business case. For example, the status of the FCS business case based 
on the knowledge demonstrated in the 2008 preliminary design review 
should be used to guide ensuing program activities and funding 
commitments. Accordingly, we have raised these issues as matters for 
congressional consideration. 

We also received technical comments from DOD which have been addressed 
in the report, as appropriate. 

We are sending copies of this report to the Secretary of Defense; the 
Secretary of the Army; and the Director, Office of Management and 
Budget. Copies will also be made available to others on request. Please 
contact me on (202) 512-4841 if you or your staff has any questions 
concerning this report. Contact points for our Offices of Congressional 
Relations and Public Affairs may be found on the last page of this 
report. Other contributors to this report were Assistant Director 
William R. Graveline, Robert L. Ackley, Lily J. Chin, Noah B. Bleicher, 
Marcus C. Ferguson, Michael J. Hesse, Guisseli Reyes, Lisa R. Simon, 
John P. Swain, and Carrie R. Wilson. 

Signed by: 

Paul L. Francis: 
Director: 
Acquisition and Sourcing Management: 

List of Committees: 

The Honorable John W. Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Ted Stevens: 
Chairman: 
The Honorable Daniel K. Inouye: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
United States Senate: 

The Honorable Duncan L. Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable C. W. Bill Young: 
Chairman: 
The Honorable John P. Murtha: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

To develop the information on the Future Combat System program's 
progress toward meeting established goals, the contribution of critical 
technologies and complementary systems, and the estimates of cost and 
affordability, we interviewed officials of the Office of the Under 
Secretary of Defense (Acquisition, Technology, and Logistics); the Army 
G-8; the Office of the Under Secretary of Defense (Comptroller); the 
Secretary of Defense's Cost Analysis Improvement Group; the Director of 
Operational Test and Evaluation; the Assistant Secretary of the Army 
(Acquisition, Logistics, and Technology); the Army's Training and 
Doctrine Command; Surface Deployment and Distribution Command; the 
Program Manager for the Future Combat System (Brigade Combat Team); the 
Future Combat System Lead Systems Integrator; and LSI One Team 
contractors. We reviewed, among other documents, the Future Combat 
System's Operational Requirements Document, the Acquisition Strategy 
Report, the Baseline Cost Report, the Critical Technology Assessment 
and Technology Risk Mitigation Plans, and the Integrated Master 
Schedule. We attended the FCS System of Systems Functional Review, In- 
Process Reviews, Board of Directors Reviews, and multiple system 
demonstrations. In our assessment of the FCS, we used the knowledge- 
based acquisition practices drawn from our large body of past work as 
well as DOD's acquisition policy and the experiences of other programs. 

We discussed the issues presented in this report with officials from 
the Army and the Secretary of Defense, and made several changes as a 
result. We performed our review from June 2005 to March 2006 in 
accordance with generally accepted auditing standards. 

[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: 

MAR 03 2006: 

Mr. Paul L. Francis: 
Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office: 
Washington, D.C. 20548: 

Dear Mr. Francis: 

This is the Department of Defense (DoD) response to the GAO draft 
report GAO-06-367, "Defense Acquisitions: Improved Business Case is 
Needed for Future Combat Systems' Successful Outcome," dated February 
6, 2006 (GAO Code 120456). 

The report recommends that the Secretary of Defense withhold full 
commitment to Future Combat Systems (FCS) until a sound business case 
is demonstrated. It further recommends the Defense Acquisition Board 
reevaluate the FCS business case and establish incremental knowledge 
markers for assessing FCS progress. 

The Department concurs with the intent of all GAO recommendations. The 
Army's transformation effort, and in particular the FCS program, 
requires a disciplined, yet agile, acquisition construct. The strategy 
to develop and acquire FCS represents the Department's business case 
and includes periodic acquisition reviews by the Department, in 
addition to the milestone reviews called for by DoD acquisition policy. 
The acquisition has been restructured to spin-out mature FCS 
capabilities to the current force, with each spin-out having decision 
points consistent with DoD acquisition policy. Detailed comments on the 
report are enclosed. 

Sincerely, 

Signed by: 

Mark D. Schaeffer: 
Acting Director: 
Defense Systems: 

Enclosure: As stated: 

GAO DRAFT REPORT DATED FEBRUARY 6, 2006 GAO-06-367 (GAO CODE 120456): 

"DEFENSE ACQUISITIONS: IMPROVED BUSINESS CASE IS NEEDED for FUTURE 
COMBAT SYSTEMS' SUCCESSFUL OUTCOME" 

DEPARTMENT OF DEFENSE COMMENTS TO THE GAO RECOMMENDATIONS: 

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
withhold full commitment to the Future Combat System (FCS) product 
development phase and eventual production until a sound business case 
that is consistent with DOD acquisition policy and best practices can 
be clearly demonstrated. (p. 40/GAO Draft Report): 

DOD RESPONSE: Partially Concur. The Department is committed to the 
Army's transformation efforts for expeditious and effective integration 
of emerging capabilities into the current force, while continuing to 
move toward the future land combat vision. This requires a disciplined, 
yet agile, acquisition construct. The FCS acquisition is the Army's 
principal modernization effort. The FCS acquisition strategy, or 
business case in the GAO vernacular, includes regular acquisition 
reviews, in addition to the milestone reviews called for by DoD 
acquisition policy. The acquisition has been restructured to spin-out 
mature FCS capabilities to the current force, with each spin-out having 
decision points consistent with DoD acquisition policy. The periodic 
reviews of the FCS acquisition, by the Defense Acquisition Board and 
the Joint Requirements Oversight Council offers opportunities to inform 
and alter Department acquisition and budget decisions and prioritize 
program efforts. 

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense lay 
the groundwork for a sound FCS business case by tasking the spring 2006 
Defense Acquisition Board to revaluate the FCS business case-including 
requirements, technologies, complementary programs, acquisition 
strategy, cost, and funding availability-in light of its own 
acquisition policies. In its reevaluation, the board should (1) assess 
both the program's prospects for success and the consequences of not 
delivering desired capability within budgeted resources and (2) ensure 
that the Army has a disciplined way to measure and assess the 
cumulative effects of individual requirements, technology, design, and 
cost changes on the primary FCS characteristics of lethality, 
survivability, responsiveness, and sustainability. (p. 40/GAO Draft 
Report): 

DOD RESPONSE: Concur. The FCS acquisition review in spring 2006 will 
reevaluate the FCS acquisition strategy. 

RECOMMENDATION 3: The GAO recommended that if the business case is 
found not to be executable, that the Secretary of Defense lay the 
groundwork for a sound FCS business case by tasking the spring 2006 
Defense Acquisition Board to determine whether investments in FCS 
design-and production-related activities should be curbed until system 
level requirements are firm and technologies are mature. (p. 40/GAO 
Draft Report): 

DOD RESPONSE: Concur. The spring 2006 FCS review will inform 
acquisition decisions and Department budget planning. 

RECOMMENDATION 4: The GAO recommended that if the deficiencies in the 
FCS business case are judged to be recoverable, that the Secretary of 
Defense lay the groundwork for a sound FCS business case by tasking the 
spring 2006 Defense Acquisition Board to establish the incremental 
markers that are needed to demonstrate that FCS is proceeding on a 
knowledge-based approach and to hold the Army accountable, through 
periodic reporting or other means, for achieving those markers. (p. 
40/GAO Draft Report): 

DOD RESPONSE: Concur. The Defense Acquisition Executive has determined 
that the FCS program is based on a viable acquisition strategy. The 
program will be periodically reviewed to assess the program's progress. 
Expectations for incremental markers to demonstrate FCS progress will 
continue to be established and defined in the FCS acquisition strategy 
and the FCS System Engineering Plan and progress towards those markers 
regularly reviewed. 

RECOMMENDATION 5: The GAO recommended that the Secretary of Defense 
reassess the FCS cost estimate and funding availability based on the 
independent cost estimate and any program changes to improve its 
business case. (p. 41/GAO Draft Report): 

DOD RESPONSE: Concur. The FCS acquisition, to include program cost 
estimates and funding, will be reviewed in the spring of 2006 to 
support budget planning and programming. 

RECOMMENDATION 6: The GAO recommended that the Secretary of Defense 
establish a milestone review by the Defense Acquisition Board following 
the Army's preliminary design review scheduled for 2008. This should be 
a go/no-go review of the FCS program that is based on (1) the program's 
ability to demonstrate whether it is meeting the knowledge markers 
outlined above at times consistent with DOD policy and best practices; 
and (2) whether the funds can still be made available to afford its 
costs. (p. 41/GAO Draft Report): 

DOD RESPONSE: Partially concur. An FCS acquisition review, while not a 
milestone review, is planned for the timeframe of the FCS preliminary 
design review. 

[End of section] 

Appendix III: Critical Technologies' Current Status and Projections for 
Reaching Technology Readiness Level 6 (TRL 6): 

FCS Critical Technologies and Associated Key Performance Parameters: 
Network ready: 

Software programmable radio: 

FCS Critical Technologies and Associated Key Performance Parameters: 
1. JTRS Cluster 1; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
2. JTRS Cluster 5; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
3. WIN-T; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

Interface and information exchange: 

FCS Critical Technologies and Associated Key Performance Parameters: 
4. Army, joint, multinational Interface; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
5. WIN-T strategic communication; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
Networked battle command: 

Security systems and algorithms: 

FCS Critical Technologies and Associated Key Performance Parameters: 
6. Cross domain guarding solution; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
7. Intrusion detection--Internet Protocol Network; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
8. Intrusion detection--Waveform; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
9. Mobile ad hoc networking protocols; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
10. Quality of service algorithms; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
11. Unmanned systems relay; 
TRL Ratings: 5; 
TRL 6 Projections: 2006. 

Wideband Waveforms: 

FCS Critical Technologies and Associated Key Performance Parameters: 
12. Wideband waveform--JTRS; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
13. Wideband waveform--Soldier Radio Waveform; 
TRL Ratings: 4; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
14. Advanced man-machine interfaces; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
15. Multi-spectral sensors and seekers; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
16. Decision aids/intelligent agents; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

Combat identification: 

FCS Critical Technologies and Associated Key Performance Parameters: 
17. Air (rotary wing/Unmanned Aerial Vehicle)--to--ground; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
18. Air (fixed wing)--to--ground (interim/robust solutions); 
TRL Ratings: Not rated; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
19. Ground--to--air; 
TRL Ratings: Not rated; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
20. Ground--to--ground (mounted); 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
21. Ground--to--soldier; 
TRL Ratings: Not rated; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
22. Rapid battlespace deconfliction; 
TRL Ratings: 5; 
TRL 6 Projections: 2008. 

Sensor/data fusion and data compression algorithms: 

FCS Critical Technologies and Associated Key Performance Parameters: 
23. Distributed fusion management; 
TRL Ratings: 4; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
24. Level 1 fusion engine; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
25. Data compression algorithms; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
Networked lethality. 26. Dynamic sensor--shooter pairing algorithms and 
fire control; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

Line-of-Sight/Beyond-Line-of-Sight/Non-Line-of-Sight Precision 
Munitions Terminal Guidance: 

FCS Critical Technologies and Associated Key Performance Parameters: 
27. Precision Guided Mortar Munitions precision munitions, terminal 
guidance; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
28. Mid-Range-Munitions precision munitions, terminal guidance; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
29. Excalibur precision munitions, terminal guidance; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
30. Non-Line-of-Sight Launch System, terminal guidance; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

Aided/automatic target recognition: 

FCS Critical Technologies and Associated Key Performance Parameters: 
31. Aided target recognition for reconnaissance, surveillance, and 
target acquisition; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
32. Non-Line-of-Sight Launch System aided target recognition for 
seekers; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
33. Recoil management and lightweight components; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
34. Distributed collaboration of manned/unmanned platforms; 
TRL Ratings: 5; 
TRL 6 Projections: 2006. 

FCS Critical Technologies and Associated Key Performance Parameters: 
35. Rapid battle damage assessment; 
TRL Ratings: Not rated; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
Transportability: 

High-power density/fuel-efficient propulsion: 

FCS Critical Technologies and Associated Key Performance Parameters: 
36. High-power density engine; 
TRL Ratings: 5; 
TRL 6 Projections: 2007. 

FCS Critical Technologies and Associated Key Performance Parameters: 
37. Fuel-efficient hybrid-electric engine; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
Sustainability/reliability. 38. Embedded predictive logistics sensors 
and algorithms; 
TRL Ratings: 5; 
TRL 6 Projections: 2009. 

FCS Critical Technologies and Associated Key Performance Parameters: 
39. Water generation and purification; 
TRL Ratings: Not rated; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
Training: 

FCS Critical Technologies and Associated Key Performance Parameters: 
40. Computer generated forces; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
41. Tactical engagement simulation; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
Survivability: 

Active Protection System: 

FCS Critical Technologies and Associated Key Performance Parameters: 
42. Active Protection System; 
TRL Ratings: 5; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
43. Threat Warning System; 
TRL Ratings: 4-5; 
TRL 6 Projections: 2009. 

FCS Critical Technologies and Associated Key Performance Parameters: 
44. Signature management; 
TRL Ratings: 5-6; 
TRL 6 Projections: 2006. 

FCS Critical Technologies and Associated Key Performance Parameters: 
45. Lightweight hull and vehicle armor; 
TRL Ratings: 5; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
46. Health monitoring and casualty care interventions; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
47. Power distribution and control; 
TRL Ratings: 5; 
TRL 6 Projections: 2006. 

Advanced countermine technology: 

FCS Critical Technologies and Associated Key Performance Parameters: 
48. Mine detection; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
49. Mine neutralization; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
50. Efficient resource allocation; 
TRL Ratings: 6; 
TRL 6 Projections: Not applicable. 

FCS Critical Technologies and Associated Key Performance Parameters: 
51. Protection; 
TRL Ratings: 4; 
TRL 6 Projections: 2008. 

FCS Critical Technologies and Associated Key Performance Parameters: 
52. High-density packaged power; 
TRL Ratings: 5; 
TRL 6 Projections: 2008. 

Class 1 Unmanned Aerial Vehicle propulsion technology: 

FCS Critical Technologies and Associated Key Performance Parameters: 
53. Ducted fan; 
TRL Ratings: 4; 
TRL 6 Projections: 2006. 

FCS Critical Technologies and Associated Key Performance Parameters: 
54. Lightweight heavy fuel engine; 
TRL Ratings: 4; 
TRL 6 Projections: 2007. 

Source: Technology Readiness Assessment Update, Office of the Deputy 
Assistant Secretary of the Army for Research and Technology, April 2005 
(data); GAO (analysis and presentation). 

[End of table] 

[End of section] 

Appendix IV: Technology Readiness Levels: 

Technology Readiness Level: 1. Basic principles observed and reported; 
Description: Lowest level of technology readiness. Scientific research 
begins to be translated into applied research and development. Examples 
might include paper studies of a technology's basic properties; 
Hardware and Software: None (paper studies and analysis); 
Demonstration Environment: None. 

Technology Readiness Level: 2. Technology concept and/or application 
formulated; 
Description: Invention begins. Once basic principles are observed, 
practical applications can be invented. The application is speculative 
and there is no proof or detailed analysis to support the assumption. 
Examples are still limited to paper studies; 
Hardware and Software: None (paper studies and analysis); 
Demonstration Environment: None. 

Technology Readiness Level: 3. Analytical and experimental critical 
function and/or characteristic proof of concept; 
Description: Active research and development is initiated. This 
includes analytical studies; and laboratory studies to physically 
validate analytical predictions of separate elements of the technology. 
Examples include components that are not yet integrated or 
representative; 
Hardware and Software: Analytical studies and demonstration of non-
scale individual components (pieces of subsystem); 
Demonstration Environment: Lab. 

Technology Readiness Level: 4. Component and/or breadboard. Validation 
in laboratory environment; 
Description: Basic technological components are integrated to establish 
that the pieces will work together. This is relatively "low fidelity" 
compared to the eventual system. Examples include integration of "ad 
hoc" hardware in a laboratory; 
Hardware and Software: Low-fidelity breadboard. Integration of non-
scale components to show pieces will work together. Not fully 
functional or form or fit but representative of technically feasible 
approach suitable for flight articles; 
Demonstration Environment: Lab. 

Technology Readiness Level: 5. Component and/or breadboard validation 
in relevant environment; 
Description: Fidelity of breadboard technology increases significantly. 
The basic technological components are integrated with reasonably 
realistic supporting elements so that the technology can be tested in a 
simulated environment. Examples include "high fidelity" laboratory 
Integration of components; 
Hardware and Software: High-fidelity breadboard. Functionally 
equivalent but not necessarily form and/or fit (size, weight, 
materials, etc.) Should be approaching appropriate scale. May include 
integration of several components with reasonably realistic support 
elements/subsystems to demonstrate functionality; 
Demonstration Environment: Lab demonstrating functionality but not form 
and fit. May include flight demonstrating breadboard in surrogate 
aircraft. Technology ready for detailed design studies. 

Technology Readiness Level: 6. System/subsystem model or prototype 
demonstration in a relevant environment; 
Description: Representative model or prototype system, which is well 
beyond the breadboard tested for TRL 5, is tested in a relevant 
environment. Represents a major step up in a technology's demonstrated 
readiness. Examples include testing a prototype in a high-fidelity 
laboratory environment or in simulated operational environment; 
Hardware and Software: Prototype--Should be very close to form, fit, 
and function. Probably includes the integration of many new components 
and realistic supporting elements/subsystems if needed to demonstrate 
full functionality of the subsystem; 
Demonstration Environment: High-fidelity lab demonstration or 
limited/restricted flight demonstration for a relevant environment. 
Integration of technology is well defined. 

Technology Readiness Level: 7. System prototype demonstration in an 
operational environment; 
Description: Prototype near or at planned operational system. 
Represents a major step up from TRL 6, requiring the demonstration of 
an actual system prototype in an operational environment, such as in an 
aircraft, vehicle, or space. Examples include testing the prototype in 
a test bed aircraft; 
Hardware and Software: Prototype. Should be form, fit, and function 
integrated with other key supporting elements/subsystems to demonstrate 
full functionality of subsystem; 
Demonstration Environment: Flight demonstration in representative 
operational environment such as flying test bed or demonstrator 
aircraft. Technology is well substantiated with test data. 

Technology Readiness Level: 8. Actual system completed and "flight 
qualified" through test and demonstration; 
Description: Technology has been proven to work in its final form and 
under expected conditions. In almost all cases, this TRL represents the 
end of true system development. Examples include developmental test and 
evaluation of the system in its intended weapon system to determine if 
it meets design specifications; 
Hardware and Software: Flight-qualified hardware; 
Demonstration Environment: Developmental test and evaluation in the 
actual system application. 

Technology Readiness Level: 9. Actual system "flight proven" through 
successful mission operations; 
Description: Actual application of the technology in its final form and 
under mission conditions, such as those encountered in operational test 
and evaluation. In almost all cases, this is the end of the last "bug 
fixing" aspects of true system development. Examples include using the 
system under operational mission conditions; 
Hardware and Software: Actual system in final form; 
Demonstration Environment: Operational test and evaluation in 
operational mission conditions. 

Source: GAO and its analysis of National Aeronautics and Space 
Administration data. 

[End of table] 

[End of section] 

Related GAO Products: 

Defense Acquisitions: Business Case and Business Arrangements Key for 
Future Combat System's Success, GAO-06-478T. Washington, D.C.: March 1, 
2006. 

DOD Acquisition Outcomes: A Case for Change, GAO-06-257T. Washington, 
D.C.: November 15, 2005. 

Force Structure: Actions Needed to Improve Estimates and Oversight of 
Costs for Transforming Army to a Modular Force, GAO-05-926. Washington, 
D.C.: September 29, 2005. 

Defense Acquisitions: Resolving Development Risks in the Army's 
Networked Communications Capabilities is Key to Fielding Future Force, 
GAO-05-669. Washington, D.C.: June 15, 2005. 

Defense Acquisitions: Future Combat Systems Challenges and Prospects 
for Success, GAO-05-428T. Washington, D.C.: March 16, 2005. 

Defense Acquisitions: Future Combat Systems Challenges and Prospects 
for Success, GAO-05-442T. Washington, D.C.: March 16, 2005. 

NASA's Space Vision: Business Case for Prometheus 1 Needed to Ensure 
Requirements Match Available Resources, GAO-05-242. Washington, D.C.: 
February 28, 2005. 

Defense Acquisitions: The Army's Future Combat Systems' Features, 
Risks, and Alternatives, GAO-04-635T. Washington, D.C.: April 1, 2004. 

Defense Acquisitions: Assessments of Major Weapon Programs, GAO-04-248. 
Washington, D.C.: March 31, 2004. 

Issues Facing the Army's Future Combat Systems Program, GAO-03-1010R. 
Washington, D.C.: August 13, 2003. 

Defense Acquisitions: Army Transformation Faces Weapon Systems 
Challenges, GAO-01-311. Washington, D.C.: May 2001. 

Best Practices: Better Matching of Needs and Resources Will Lead to 
Better Weapon System Outcomes, GAO-01-288. Washington, D.C.: March 8, 
2001. 

[End of section] 

(120456): 

FOOTNOTES 

[1] According to DOD policy, technology maturity means a technology 
must have been demonstrated in a relevant environment (or, preferably, 
in an operational environment) and considered mature enough to use for 
product development in systems integration. 

[2] In Section 212 of the Fiscal Year 2006 Defense Authorization Act, 
the Congress also stipulated that the Secretary of the Army procure the 
FCS through a Federal Acquisition Regulation contract. 

[3] The Army's concept for future warfighting is documented in The 
United States Army Future Combat Force Operational and Organizational 
Plan for the Future Combat System Brigade Combat Team. The FCS 
operational requirements document was derived from the operational and 
organizational plan. 

[4] Technology Readiness Assessment Update, Office of the Deputy 
Assistant Secretary of the Army for Research and Technology, April 2005 

[5] Defeating kinetic energy threats is an objective, not a threshold, 
FCS requirement. 

[6] GAO, Defense Acquisitions: Resolving Development Risks in the 
Army's Networked Communications Capabilities is Key to Fielding Future 
Force. GAO-05-669. (Washington, D.C.: June 15, 2005). 

[7] Joint Program Executive Office was established in February 2005 in 
response to the fiscal year 2004 National Defense Authorization Act 
which directed DOD to strengthen the joint management of all the JTRS 
program components. 

[8] In the fiscal year 2006 defense appropriation act, H.Report 109- 
359, page 372, Congress provided some funding to continue development 
of the Joint Common Missile. 

[9] The 2008 preliminary design review and the 2010 critical design 
review are culminating events; system-level preliminary design reviews 
and critical design reviews will be conducted prior to those dates. 

[10] GAO, Best Practices: A More Constructive Approach is Key to Better 
Weapon System Outcomes, GAO/NSIAD-00-199 (Washington, D.C.: July 31, 
2000). 

[11] The operational assessment of the Joint Tactical Radio System 
functionality has resulted in an ongoing program restructure, which 
could have an impact on the program's costs. 

[12] GAO, Force Structure: Actions Needed to Improve Estimates and 
Oversight of Costs for Transforming Army to a Modular Force. GAO-05-
926. (Washington, D.C.: September 29, 2005). 

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