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Report to the Subcommittee on Strategic Forces, Committee on Armed 
Services, House of Representatives: 

United States Government Accountability Office: 
GAO: 

September 2008: 

Missile Defense: 

Actions Needed to Improve Planning and Cost Estimates for Long-Term 
Support of Ballistic Missile Defense: 

GAO-08-1068: 

GAO Highlights: 

Highlights of GAO-08-1068, a report to the Subcommittee on Strategic 
Forces, Committee on Armed Services, House of Representatives. 

Why GAO Did This Study: 

The Department of Defense (DOD) has spent a total of over $115 billion 
since the mid-1980s to develop a Ballistic Missile Defense System 
(BMDS) comprised of land, air, and sea-based elementsósuch as missiles 
and radarsóworking together as an integrated system. Since the cost to 
operate and support a weapon system usually accounts for most of a 
systemís lifetime costs, the resources needed to fund BMDS could be 
significant as DOD fields an increasing number of BMDS elements. In 
2005, DOD began planning to transition responsibility for supporting 
BMDS elements from the Missile Defense Agency (MDA) to the services. 

GAO was asked to assess the extent to which DOD has (1) planned to 
support BMDS elements over the long-term, and (2) identified long-term 
operation and support costs. To do so, GAO analyzed 7 BMDS elements 
that will be fielded by 2015, compared DODís plans and cost estimates 
to DOD and GAO key principles, and assessed the extent to which MDA and 
the services have agreed on responsibilities for supporting and funding 
BMDS elements. 

What GAO Found: 

DOD has taken some initial steps to plan for BMDS support, but efforts 
to date are incomplete, and difficulties in transitioning 
responsibilities from MDA to the services have complicated long-term 
planning. DOD key principles for weapon system life-cycle management 
stress the importance of completing support plans that cover a systemís 
expected useful life before it is fielded. Although MDA has developed 
some policies and guidance for BMDS support planning, it has not 
developed support plans for three of the seven elements that GAO 
examined, and MDA has not completed an overall support plan for the 
integrated system. DODís long-term support planning for BMDS is 
incomplete because it has not established a standard process clearly 
specifying what support planning should be completed before fielding or 
how to transition the responsibility for supporting BMDS elements from 
MDA to the services. For five of the seven elements GAO examined, MDA 
and the services have been unable to reach agreement on who will be 
responsible for providing support after 2013. DOD has drafted a 
proposal for BMDS management that DOD officials have stated is 
intended, in part, to address these issues. However, the draft proposal 
lacks important details, and it is not clear when it is expected to be 
approved and implemented. Without a standardized process for long-term 
support planning, uncertainty will persist regarding how the elements 
will be supported over the long term. 

DODís recent efforts to develop operation and support cost estimates 
for BMDS elements have limitations and are not transparent for DOD and 
congressional decision makers. DOD and GAO key principles for cost 
estimating state that complete, credible, and independently verified 
cost estimates are important to support preparation of budget 
submissions over the short term as well as for assessing the long-term 
affordability of a program. DOD has started to develop operation and 
support cost estimates for the seven elements GAO examined, but those 
efforts are not yet complete and have limitations. First, the estimates 
are likely to change since DOD is still determining key assumptions. 
Second, DOD does not plan to have the estimates independently verified. 
Furthermore, the Future Years Defense Program, DODís 6-year spending 
plan, does not fully reflect BMDS operation and support costs. DOD has 
not yet clearly identified BMDS operation and support costs because the 
department has not required that these costs are to be developed, 
validated, and reviewed, and it has not specified when this should be 
done or who is responsible for doing so. Although DODís draft proposal 
for managing BMDS contains some funding suggestions, it does not 
address the operation and support cost limitations GAO identified. 
Without a requirement to develop and validate BMDS operation and 
support cost estimates, DOD will have difficulty preparing credible 
budget requests and assessing the affordability of BMDS over the long 
term. 

What GAO Recommends: 

GAO recommends that DOD establish a standard process for long-term BMDS 
support planning and establish a requirement to estimate BMDS operation 
and support costs. In response, DOD generally agreed stating that its 
draft proposal for managing BMDS is intended to handle these issues. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1068]. For more 
information, contact John Pendleton at (404) 679-1816 or 
pendletonj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

DOD Has Taken Some Initial Steps to Plan for Support of BMDS, but 
Planning to Date Is Incomplete and Complicated by Difficulties in 
Transitioning Support Responsibilities to the Services: 

Despite Recent Efforts, Operation and Support Cost Estimates for BMDS 
Elements Have Limitations and Are Not Transparent: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: List of Selected Ballistic Missile Defense Elements, the Lead 
Service, and When the Element Was or Is Planned to Be Fielded: 

Table 2: Status of Agreements and Support Plans for Long-term Support 
and Life-Cycle Management of BMDS Elements: 

Table 3: Status of Joint Cost Estimates and Plans for Independent 
Verification of Operation and Support Cost Estimates: 

Table 4: Agreement on Responsibility for Funding Operation and Support 
Costs after 2013: 

Figure: 

Figure 1: Timeline Comparing When Four Elements Were Fielded with 
Support Plan Completion: 

Abbreviations: 

BMDS: Ballistic Missile Defense System: 

DOD: Department of Defense: 

FYDP: Future Years Defense Program: 

MDA: Missile Defense Agency: 

USD (AT&L): Under Secretary of Defense for Acquisition, Technology, and 
Logistics: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

September 25, 2008: 

The Honorable Ellen O. Tauscher: 
Chairman: 
The Honorable Terry Everett: 
Ranking Member: 
Subcommittee on Strategic Forces: 
Committee on Armed Services: 
House of Representatives: 

The Department of Defense (DOD) has spent about $57 billion to develop 
the Ballistic Missile Defense System (BMDS) since the Missile Defense 
Agency (MDA) was created in 2002, and a total of over $115 billion 
since the mid-1980s. The BMDS is intended to be ultimately comprised of 
land, air, and sea-based elements--such as missiles and radars--working 
together as an integrated, layered system capable of defeating 
ballistic missiles of all ranges and in all phases of flight. DOD plans 
to field an increasing number of BMDS elements over the next several 
years, and since the cost to operate and support a weapon system 
traditionally accounts for over 70 percent of the total cost over the 
system's lifetime, the resources needed to operate and support BMDS 
could be significant over time. Furthermore, in order to meet the 
President's goal of fielding an initial ballistic missile defense 
capability in 2004, the Secretary of Defense granted MDA a significant 
amount of funding and decision-making flexibility by exempting it from 
traditional weapon system development regulations, but our prior work 
has shown that this flexibility has come at the cost of transparency 
and accountability and has made oversight more challenging.[Footnote 1] 
Although MDA has programmed approximately $800 million annually over 
fiscal years 2008 through 2013 to operate and support the BMDS 
elements, we previously reported that DOD has not included all known 
BMDS operating and support costs in its budget[Footnote 2] and that 
BMDS operation and support costs are not identified and aggregated in 
the Future Years Defense Program, which is one of the principal sources 
of DOD budget information available to senior DOD leadership and 
Congress.[Footnote 3] 

In developing an integrated BMDS, DOD's intention was for MDA to 
develop BMDS elements and then transition the elements to the services 
which would operate and support them. In 2005, DOD began planning to 
transition responsibility for supporting BMDS elements from MDA to the 
services, which involves providing a ballistic missile defense element 
to a "lead" military service. Each lead service is responsible for 
providing personnel, force protection, operations and support, and for 
developing doctrine, organizations, and facilities requirements. The 
transition process also involves lead services beginning to assume 
responsibility for operating, supporting, and funding BMDS elements, 
necessitating negotiations between MDA and each lead service over which 
organization will provide and pay for each element's operating and 
support costs in specific years. DOD has developed a transition plan 
that covers the BMDS elements and is intended to guide the transition 
of roles and responsibilities from MDA to the services, document the 
status of agreements on cost sharing, and serve as a basis for 
preparing budget submissions. Another purpose of this transition plan 
is to highlight critical issues that are of executive interest for the 
overall BMDS, such as the critical issues of how BMDS elements will be 
managed over their life cycle, and how operation and support costs will 
be shared between MDA and the services. 

Since traditional oversight mechanisms are not applied to BMDS, DOD has 
created various high-level groups to advise the Deputy Secretary of 
Defense on ballistic missile defense issues. Most recently, DOD created 
a new Missile Defense Executive Board in 2007 to recommend and oversee 
implementation of strategic policies, plans, program priorities, and 
investment options. The Board is developing a draft proposal for how to 
improve management of BMDS elements over their life cycle including 
transition of support responsibilities and how to fund operation and 
support costs. 

We reported earlier this year that DOD's transition efforts have, to 
date, been arduous and time-consuming.[Footnote 4] Also, the House 
Armed Services Committee has expressed concern about the apparent 
reluctance of the services to assume responsibility for acquiring, 
fielding, and sustaining missile defense capabilities.[Footnote 5] 
Considering the extensive advance planning required to establish and 
operate BMDS elements and potential effects on future resource needs, 
we were asked to examine DOD's plans for preparing to operate and 
support BMDS elements, including planning to transition BMDS elements 
to the services. Accordingly, we assessed the extent to which DOD has 
(1) planned for support of BMDS elements over the long term; and (2) 
identified the long-term operation and support costs for the BMDS 
elements it plans to field. For both objectives, we analyzed planning 
and cost data for the seven BMDS elements that are already fielded or 
planned for fielding by 2015. We also reviewed DOD policies and 
guidance that establish DOD's overall approach for preparing to operate 
and support weapon systems and ballistic missile defense. To assess the 
extent to which DOD has planned for support of BMDS elements, we 
compared the planning that had been done, including the extent to which 
MDA and the services have agreed on responsibilities for supporting 
BMDS elements, with DOD key principles[Footnote 6] for life-cycle 
management to determine what aspects may be missing that could hinder 
transition of responsibility for support of BMDS elements from MDA to 
the services and hinder the ability to provide long-term support. 
[Footnote 7] To assess whether DOD has identified the operation and 
support costs to operate and support the BMDS elements it plans to 
field, we compared the method DOD used in developing its operation and 
support cost estimates with key principles for developing accurate and 
reliable cost estimates[Footnote 8] and assessed the extent to which 
MDA and the services have or have not agreed on which organization is 
responsible for funding operation and support of BMDS elements. We 
discussed the results of our analyses on both objectives with DOD 
officials. We conducted this performance audit from August 2007 through 
September 2008 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 
See appendix I for a more complete description of our scope and 
methodology. 

Results in Brief: 

DOD has taken some initial steps to plan for BMDS support, but efforts 
to date are incomplete, and difficulties in transitioning support 
responsibilities from MDA to the services have complicated long-term 
planning. DOD key principles for weapon system life-cycle management 
stress the importance of completing support plans that cover a system's 
expected useful life before it is fielded. Although MDA has developed 
some policies and guidance for BMDS support planning, it has not 
developed support plans for three of the seven elements we examined and 
MDA has not completed an overall support plan for the integrated 
system. As a result, MDA has been unable to conduct a support readiness 
assessment of the overall, integrated ballistic missile defense system 
as its policy intends. DOD's long-term support planning for BMDS is 
incomplete because it has not developed and instituted a standard 
process that clearly specifies what support planning should be 
completed before elements are fielded, identifies which organization is 
responsible for life-cycle management, involves the services, and 
specifies how to transition support responsibilities from MDA to the 
services. For example, MDA and the services have not routinely worked 
together on support planning, although a DOD directive states that MDA 
and the services shall work together to develop support and transition 
plans, and MDA has used inconsistent methods for negotiating 
transitions with the services. Moreover, MDA and the services have 
generally not agreed which organization should be responsible for life- 
cycle management. As a result, for five of the seven elements we 
examined, MDA and the services have been unable to reach agreement on 
which organization will be responsible for providing support after 
2013. DOD has drafted a proposal for BMDS management that DOD officials 
have stated is intended, in part, to address these issues. However, the 
draft proposal lacks important details such as which organization is 
responsible for long-term support planning, when such plans should be 
completed, and who is accountable for ensuring such planning is 
completed, and it is not clear when this draft proposal is expected to 
be approved and implemented. Without a clear, agreed upon process for 
long-term support planning, including guidance for negotiating 
transition of the support responsibility from MDA to the services, 
uncertainty will persist regarding how the elements will be supported 
after 2013 and over the long term, and DOD will be unable to take 
advantage of lessons learned from the transition of successive 
elements. In order to improve long-term support planning for BMDS 
elements, we are recommending that DOD establish a standard process, 
based on key principles for life-cycle management, for long-term 
support planning. 

DOD's recent efforts to develop operation and support cost estimates 
for BMDS elements have limitations and are not transparent for DOD and 
congressional decision-makers. DOD and GAO key principles for preparing 
cost estimates state that complete, credible, and independently 
verified cost estimates are important to support preparation of budget 
submissions over the short term as well as for assessing the long-term 
affordability of the program. Although DOD has started to develop 
operation and support cost estimates for all seven of the BMDS elements 
we examined, those efforts have limitations. First, the estimates are 
not yet complete and are likely to change over time, perhaps 
significantly since MDA and the services are still determining key 
assumptions, such as how support will be provided--by contractor, the 
service, or a combination of the two--and where some elements may be 
fielded and operated. Second, DOD does not plan to have its operation 
and support cost estimates independently verified, although doing so is 
a key principle for developing a credible estimate. Furthermore, the 
Future Years Defense Program (FYDP), DOD's 6-year spending plan, does 
not fully reflect BMDS operation and support costs that are expected to 
be incurred--and these are likely to be significant since operation and 
supports costs are typically over 70 percent of a system's total 
lifetime cost. DOD has not clearly identified BMDS operation and 
support costs because the department has not required that these costs 
are to be developed, validated, and reviewed, and it has not specified 
when this should be done or identified which organization is 
responsible for doing so. DOD has drafted a proposal for the overall 
management of BMDS, which contains some funding suggestions, but the 
draft proposal lacks important details and does not address the 
operation and support cost limitations we identified. Without requiring 
development and validation of BMDS operation and support cost 
estimates, DOD will have difficulty preparing credible budget requests 
and assessing the affordability of BMDS over time. To increase 
transparency and improve fiscal stewardship of DOD resources for BMDS, 
we are recommending that DOD establish a requirement to estimate BMDS 
operation and support costs. 

In written comments on a draft of this report, DOD concurred with one 
and partially concurred with five recommendations. DOD partially 
concurred with the three actions we recommended to improve long-term 
support planning for BMDS elements. DOD concurred with one and 
partially concurred with two of the actions we recommended to require 
DOD to estimate BMDS operation and support costs. In general, DOD 
stated that its draft proposal is intended to address these issues. 
However, as we point out in our report, DOD's draft proposal lacks 
specific details and does not fully address the limitations we found. 
For example, DOD's draft proposal does not specify when support plans 
should be completed or specify when operation and support cost 
estimates are to be developed, validated, and reviewed. By implementing 
our recommendations to improve support planning, DOD would be better 
positioned to reduce uncertainty regarding how the elements will be 
supported over the long term and improve the transition of support 
responsibility from MDA to the services. Also, we continue to believe 
that DOD should take additional actions to implement our 
recommendations so that it will be in a better position to prepare 
credible budget requests and assess the affordability of BMDS over 
time. The department's comments are reprinted in appendix II. 

Background: 

The Missile Defense Agency plans to develop and field ballistic missile 
defense elements in increments called "blocks," with each block 
providing increasing levels of capability over the previous block. 
[Footnote 9] In doing so, MDA's charter states that MDA is responsible 
for assuring the supportability of the system and for developing plans 
with the services for BMDS elements early enough to support effective 
transition. 

Life-Cycle Management: 

DOD policy[Footnote 10] calls for new weapon systems be managed using a 
life-cycle management approach, which should include all activities for 
acquiring, developing, producing, fielding, supporting, and disposing 
of a weapon system over its expected lifetime. In addition, each 
service is responsible for developing force structure to organize units 
to accomplish missions using the new system. Life-cycle management is 
to consider how the new system will be supported over its expected 
useful life because system engineering and design can have a 
significant effect on operations and support costs. Typically, support 
planning[Footnote 11] begins early in development as DOD begins 
exploring concepts for a new weapon system and the support strategy is 
developed as the system is developed and completed before fielding. 
However, the DOD Inspector General reported in 2006 that MDA had not 
planned fully for system sustainment and had not developed a complete 
integrated logistics support plan. The report concluded that without 
improving its processes, including support planning, MDA faces 
increased risk in successfully integrating elements into a single 
system that will meet U.S. requirements for ballistic missile defense. 
[Footnote 12] 

A life-cycle cost estimate includes all costs associated with a weapon 
system's research and development, investment, military construction, 
operations and support,[Footnote 13] and disposal. Since operation and 
support costs historically are the largest portion (over 70 percent) of 
a weapon system's costs over its life, these costs can significantly 
affect development of a life-cycle cost estimate and were the focus of 
our analysis of DOD's cost estimates. DOD usually prepares an 
independent life-cycle cost estimate for major weapons systems, and 
these estimates typically form the basis for budget submissions. Using 
a life-cycle cost estimate helps support the budget process by 
providing estimates of the funding required to execute a program and 
can help assess whether resources are adequate to support the program. 
A key step in assuring the credibility of the estimate is acquiring an 
independent cost estimate by an entity separate from those connected to 
the program. Independent estimates tend to be higher and more accurate 
than estimates developed by a system's program office since independent 
estimators may be more objective and less likely to use optimistic 
assumptions.[Footnote 14] 

Transition Planning: 

In its 2007 transition plan, DOD recognized that as much time as 
possible--72 months or more--should be allotted to transition a BMDS 
element from MDA to a military service.[Footnote 15] The transition 
process may, for some elements, end at a point that DOD calls transfer-
-which is the reassignment of the MDA program office responsibilities 
to a service.[Footnote 16] According to MDA and Office of the Under 
Secretary of Defense for Acquisition, Technology, and Logistics 
officials, not all BMDS elements will ultimately transfer; the decision 
to do so will be made on a case-by-case basis and the conditions under 
which this may happen have not yet been specifically identified for 
each element. MDA's 2004 charter states that the agency shall develop 
plans in conjunction with the services for BMDS elements during 
transition.[Footnote 17] The transition plan covers some overarching 
issues and contains separate sections for each BMDS element. For 
example, the transition plan includes some discussion for each element 
of various topics such as doctrine, organization, training, materiel, 
facilities, security, support strategies, and funding. DOD approved the 
first transition plan in September 2006 and approved the second plan in 
February 2008. DOD intends for its plan to guide the transition of 
roles and responsibilities from MDA to the services and serve as a 
basis for preparing budget submissions. Another purpose of DOD's 
transition plan is to highlight critical issues that are of executive 
interest for the overall BMDS. For example, the latest plan included a 
critical issue of how BMDS capabilities will be managed over their life 
cycle and another critical issue is how operation and support costs 
will be shared between MDA and the services. Table 1 below shows the 
BMDS elements, when they were or are planned to be fielded, and which 
service has been designated as the lead for each element. 

Table 1: List of Selected Ballistic Missile Defense Elements, the Lead 
Service, and When the Element Was or Is Planned to Be Fielded1: 

BMDS element: Ground-based Midcourse Defense; 
Element description: This element is designed to protect the U.S. 
homeland against incoming ballistic missiles launched from Northeast 
Asia and the Middle East; 
Lead service: Army; 
Date lead service designated: October 2006; 
Date element initially fielded or planned to be fielded: September 
2004. 

BMDS element: Aegis Ballistic Missile Defense; 
Element description: This ship-based element is designed to protect 
deployed U.S. forces, allies, and friends against ballistic missile 
attacks and to serve as a forward-deployed sensor, especially in 
support of the ground-based mission; 
Lead service: Navy; 
Date lead service designated: October 2006; 
Date element initially fielded or planned to be fielded: September 2004 
(for surveillance and track function); December 2005 for Standard 
Missile -3. 

BMDS element: Upgraded Early Warning Radar; 
Element description: This sensor is designed to provide updated 
midcourse missile tracking data to the ground-based element; 
Lead service: Air Force; 
Date lead service designated: October 2006; 
Date element initially fielded or planned to be fielded: December 2004 
for first radar. Others in December 2007, and December 2009. 

BMDS element: AN/TPY-2 Radar (forward-based); 
Element description: This transportable, land-based X-band radar will 
be forward-based to provide additional advance warning of ballistic 
missile launches; 
Lead service: Army; 
Date lead service designated: February 2006; 
Date element initially fielded or planned to be fielded: June 2006 for 
first radar. Others in fiscal years 2009 and 2011. 

BMDS element: Cobra Dane; 
Element description: This sensor is designed to provide updated 
midcourse missile tracking data to the ground-based element; 
Lead service: Air Force; 
Date lead service designated: February 2006; 
Date element initially fielded or planned to be fielded: October 2004. 

BMDS element: Sea-based X-Band Radar; 
Element description: This radar, built on a moveable sea platform, will 
improve the ability to acquire, track, and discriminate decoys during 
the midcourse of flight; 
Lead service: Navy nominated[2]; 
Date lead service designated: March 2007; 
Date element initially fielded or planned to be fielded: February 2007. 

BMDS element: Terminal High-Altitude Area Defense; 
Element description: This ground-based element is designed to defend 
deployed U.S. forces and population centers against short and medium 
range ballistic missiles; 
Lead service: Army; 
Date lead service designated: October 2006; 
Date element initially fielded or planned to be fielded: November 2010 
for first fire unit. Others in fiscal years 2013 and 2014. 

BMDS element: European Interceptor Site; 
Element description: This element is designed to protect the U.S. 
homeland, allies, and friends against incoming ballistic missiles 
launched from the Middle East; 
Lead service: Army; 
Date lead service designated: October 2006; 
Date element initially fielded or planned to be fielded: 2012. 

BMDS element: European Midcourse Radar; 
Element description: This land-based X-band radar will be forward-based 
to provide tracking data to the European Interceptor Site; 
Lead service: Air Force; 
Date lead service designated: August 2007; 
Date element initially fielded or planned to be fielded: 2012. 

BMDS element: Adjunct Sensor; 
Element description: This sensor may provide additional tracking data 
to supplement that of the AN/TPY-2 radars; 
Lead service: unknown; 
Date lead service designated: n/a; 
Date element initially fielded or planned to be fielded: 2013. 

Source: GAO summary of DOD information. 

[1] The table does not include those elements that are not scheduled to 
be fielded by 2015 such as the Airborne Laser or Space Tracking and 
Surveillance System. Also, the table does not include the Patriot 
Advanced Capability-3 because it transferred to the Army in March 2003. 

[2] According to officials in the Office of the Under Secretary of 
Defense for Acquisition, Technology, and Logistics, the Navy has not 
yet been officially designated as the lead service for this radar. 
However, the Navy and MDA have been negotiating management, operations, 
support, and funding responsibilities. 

[End of table] 

Oversight: 

Since BMDS development does not have to follow DOD's traditional 
development and requirements processes, oversight of BMDS has evolved 
over the years. Although the Director of the Missile Defense Agency 
reports to the Office of the Under Secretary of Defense for 
Acquisition, Technology, and Logistics, senior-level groups have been 
formed to provide the Under Secretary advice on the BMDS program. In 
2002, the Secretary of Defense established a group of senior DOD 
officials to advise the Director of the Missile Defense Agency and the 
Under Secretary of Defense for Acquisition, Technology, and Logistics 
to support decision-making on the ballistic missile defense program and 
make recommendations on policy, operations, acquisition, and resource 
matters that affect the overall BMDS. In March 2007, DOD replaced this 
group with a new Missile Defense Executive Board to recommend and 
oversee implementation of strategic policies and plans, program 
priorities, and investment options. The Board is supported by four 
standing committees, one of which is to oversee transition from MDA to 
the services and provide oversight for system operation and support. In 
carrying out its duties, the Board is developing a draft proposal for 
improving BMDS life-cycle management including a funding strategy. 
DOD's intention is that this draft proposal will address program 
planning, including funding for operations and maintenance, long-term 
support planning, and how to improve the transition of elements from 
MDA to the services. Finally, various other formal and informal groups 
have emerged that participate in the BMDS development and fielding 
process. For example, there are element-specific working groups that 
discuss transition issues such as the one devoted to negotiating an 
agreement between the Navy and MDA for the sea-based radar. Other 
groups have emerged to provide a forum for updating service leadership 
on the status of BMDS issues, discussing issues related to logistics 
and support, and identifying planning that needs to be done for 
European ballistic missile defense. 

One major source of anticipated program costs available to Congress is 
the Future Years Defense Program (FYDP). The FYDP provides information 
on DOD's current and planned budget requests. It is one of DOD's 
principal tools to manage the spending for its capabilities and is 
available to help inform DOD and Congress about spending plans for a 6- 
year time period and to make resource decisions in light of competing 
priorities. The FYDP is a report that resides in an automated database, 
which is updated and published to coincide with DOD's annual budget 
submission to Congress. The current FYDP, submitted with DOD's fiscal 
year 2008 budget, included data through fiscal year 2013. Likewise, the 
FYDP that will be submitted with DOD's fiscal year 2010 budget will 
include data through fiscal year 2015. 

This report is one in a series of reports we have issued on ballistic 
missile defense (see the list of Related GAO Products at the end of 
this report). Most recently, we found that DOD lacks a sound process 
for identifying and addressing the overall priorities of the combatant 
commands when developing ballistic missile defense capabilities. 
[Footnote 18] We reported in May 2006 that DOD had not established the 
criteria that must be met before BMDS can be declared operational. 
[Footnote 19] Also, in April 2007, we found that DOD and congressional 
decision-makers could benefit from more complete information to assess 
basing, support, infrastructure, budget requests, and DOD spending 
plans when considering BMDS program and investment decisions.[Footnote 
20] Also, we issue an annual assessment of DOD's progress in developing 
BMDS, and in March 2008, we reported that the high level of investment 
MDA plans to make in technology development warrants some mechanism for 
reconciling the cost of these efforts with the program's progress. 
[Footnote 21] 

DOD Has Taken Some Initial Steps to Plan for Support of BMDS, but 
Planning to Date Is Incomplete and Complicated by Difficulties in 
Transitioning Support Responsibilities to the Services: 

DOD has taken some initial steps to plan for BMDS support, but planning 
efforts to date are incomplete. In addition, long-term support planning 
has been complicated by difficulties in transitioning responsibility 
for providing support from MDA to the services. While DOD has drafted a 
proposal for BMDS management that DOD officials have stated is 
intended, in part, to address this issue, the draft proposal lacks 
important details. DOD's long-term support planning for BMDS is 
incomplete because DOD has not developed and instituted a standard 
process that clearly specifies what support planning should be 
completed before elements are fielded, identifies which organization is 
responsible for life-cycle management, involves the services, and 
specifies how to transition support responsibilities from MDA to the 
services. Without such an established process that is enforced, DOD 
faces uncertainty over how BMDS elements will be supported over the 
long term and will be limited in its ability to improve support 
planning for future BMDS elements. 

MDA Has Developed Some Guidance for BMDS Support Planning but Efforts 
to Date Are Incomplete: 

While MDA has developed some guidance for developing support plans for 
BMDS elements and the overall system, based on Presidential and 
Secretary of Defense direction, MDA has focused on fielding a defensive 
ballistic missile capability as soon as practical. In 2005, MDA issued 
an Integrated Program Policy and a companion Implementation Guide, 
[Footnote 22] which directed MDA's BMDS element offices to develop 
support plans for each element, as well as develop an integrated 
support plan for the entire system, update these plans every 2 years, 
and complete an assessment of readiness of the integrated plan to 
support operations of the overall BMDS. 

Nevertheless, planning efforts are incomplete. According to officials, 
as of August 2008, three of the seven elements we examined, the forward-
based radar, the sea-based radar, and the European radar, do not have 
support plans in place. Additionally, a fourth element, the Ground-
based Midcourse Defense element, has a plan that was initially 
completed in 2005, but the plan is now out of date, does not reflect 
the current configuration of the element, and it is therefore currently 
being updated. 

MDA has also issued a sustainment directive which states that support 
planning should be completed as elements move through various 
development phases.[Footnote 23] MDA's directive specifies four phases 
with associated criteria that should be completed before exiting a 
phase to ensure, in part, effective long-term support of BMDS elements. 
Accordingly, initial support plans for a BMDS element should be 
completed before an element progresses from the programming and 
planning phase to the program execution phase and before the final 
deployment phase when an element is fielded. However, two of the 
elements we examined did not have support plans, even though they had 
progressed to a subsequent phase of development. One of these elements, 
the sea-based radar, has been categorized by MDA officials as being in 
the program execution phase, but officials stated that currently there 
is no support plan for this element and MDA has just recently begun to 
develop one. In addition, MDA officials told us that portions of the 
forward-based radar's development are described as being in the 
deployment phase since the element has been fielded, but as of August 
2008, there was no support plan for the radar and officials told us a 
plan would be completed by the end of the year. MDA officials recognize 
that past efforts in support planning have been incomplete. In 
response, MDA is proposing forming a logistics directorate, but it is 
not clear what the roles and responsibilities of this group will be or 
how soon the group will be fully staffed. 

Incomplete support planning is not a new issue. In 2006, DOD's 
Inspector General reported[Footnote 24] that MDA had not developed an 
overall, integrated, BMDS-wide support plan, but had developed a 
summary document containing only general support planning information 
for four elements. The DOD Inspector General's report concluded that 
without improving support planning, MDA faced increased risk in 
successfully integrating elements into a single system that will meet 
U.S. requirements. In 2006, MDA revised the document to include 
information on a total of 8 elements, but the document still did not 
contain more than high-level information on how each individual element 
would be supported and did not contain specific detail for how support 
would be managed across the integrated system. As of August 2008, MDA 
still had not developed an overall, integrated, BMDS-wide support plan. 
Without current support plans for every element and an integrated, 
system-wide support plan, MDA will be unable to conduct a support 
readiness assessment of the overall, integrated ballistic missile 
defense system as directed by its guidance. As a result, MDA cannot 
ensure that the integrated system has appropriate plans in place to 
support operations. 

DOD's Support Planning for BMDS Has Not Followed Key Principles: 

DOD's planning to support BMDS over the long term has not followed 
DOD's key principles of weapon system life-cycle management. Although 
BMDS is not required to follow traditional weapon system life-cycle 
management processes, MDA's charter states that BMDS will be managed 
consistent with the principles of the traditional weapon system process 
and that the office of the Under Secretary of Defense for Acquisition, 
Technology, and Logistics (USD (AT&L)) and MDA will determine which 
principles will be applied to the management of BMDS. However, USD 
(AT&L) and MDA have not determined and communicated to the services 
which parts of the usual life-cycle management processes apply to each 
element. Our prior work has shown that organizations should have 
defined guidance for planning and should communicate this guidance to 
stakeholders.[Footnote 25] 

While DOD's key principles of weapon system life-cycle management state 
that support plans should be completed before a system is fielded, DOD 
has fielded BMDS elements before developing support plans. Of the 
elements we examined, three of the five elements that had been fielded 
as of August 2008 did not have support plans in place before the 
element was fielded. MDA fielded the Ground-based Midcourse Defense 
element in 2004 for limited defensive operations, but a support plan 
was not developed until 2005 and, officials said, it is now out of 
date. Similarly, MDA fielded a forward-based radar in Japan in 2006, 
but as of August 2008, the element still did not have a support plan. 
Finally, as of August 2008, MDA has not completed a support plan for 
the sea-based radar, even though the element was fielded in 2007 and is 
available for emergency use. Figure 1 below shows, for selected 
elements, a comparison of when the element was fielded to when the 
element's support plan was, or is expected to be, completed. 

Figure 1: Timeline Comparing When Four Elements Were Fielded with 
Support Plan Completion: 

[See PDF for image] 

This figure is a timeline comparing when four elements were fielded 
with support plan completion, as follows: 

Calendar year: 2004; 
Upgraded Early Warning Radar: December: Support plan drafted; Element 
fielded at Beale, California; 
Forward-Based X-Band Radar (AN/TPY-2): [Empty]; 
Sea-Based X-Band Radar: [Empty]; 
Terminal High Altitude Area Defense: [Empty]. 

Calendar year: 2005; 
Upgraded Early Warning Radar: [Empty]; 
Forward-Based X-Band Radar (AN/TPY-2): [Empty]; 
Sea-Based X-Band Radar: [Empty]; 
Terminal High Altitude Area Defense: [Empty]. 

Calendar year: 2006; 
Upgraded Early Warning Radar: October: Air Force named lead service; 
Forward-Based X-Band Radar (AN/TPY-2): February: Army named lead 
service; June: Element fielded in Japan; 
Sea-Based X-Band Radar: [Empty]; 
Terminal High Altitude Area Defense: February: Current support plan 
done with Army input; October: Army named lead service. 

Calendar year: 2007; 
Upgraded Early Warning Radar: December: Element fielded at Fylingdales, 
United Kingdom; 
Forward-Based X-Band Radar (AN/TPY-2): [Empty]; 
Sea-Based X-Band Radar: February: Element fielded in Alaska for 
emergency use; March: Navy nominated to be lead service; 
Terminal High Altitude Area Defense: [Empty]. 

Calendar year: 2008; 
Upgraded Early Warning Radar: August: Support information has been 
incorporated in 2007 transition plan; 
Forward-Based X-Band Radar (AN/TPY-2): August: Support plan not yet 
complete; 
Sea-Based X-Band Radar: August: Support plan not yet complete; 
Terminal High Altitude Area Defense: August: Analysis of support 
options ongoing. 

Calendar year: 2009; 
Upgraded Early Warning Radar: December: Estimated fielding of element 
at Thule, Greenland; 
Forward-Based X-Band Radar (AN/TPY-2): [Empty]; 
Sea-Based X-Band Radar: [Empty]; 
Terminal High Altitude Area Defense: [Empty]. 

Calendar year: 2010; 
Upgraded Early Warning Radar: [Empty]; 
Forward-Based X-Band Radar (AN/TPY-2): [Empty]; 
Sea-Based X-Band Radar: [Empty]; 
Terminal High Altitude Area Defense: November: Expected fielding of 
first unit at Ft. Bliss, Texas. 

Source: GAO analysis of DOD information. 

[End of figure] 

MDA's support planning may not cover the elements' expected useful 
life. Typically, weapon system developers are expected to develop 
support plans that provide detail for support that will be provided 
throughout a system's life cycle. MDA officials told us that, in 
general, BMDS elements have an expected useful life of 20 years. 
However, MDA's sustainment directive only applies until support 
responsibilities for an element have transitioned from MDA to the lead 
service. In general, MDA has agreed to support BMDS elements via 
contractors through 2013. However, Army and Navy officials told us that 
in some cases, they may prefer to perform some support functions within 
their organization and have begun some efforts to determine to what 
extent that should be done. For example, the Terminal High Altitude 
Area Defense (THAAD) element support plan assumes contractor-provided 
support, but Army officials told us that MDA and the Army are currently 
conducting an analysis of support options for THAAD, including 
contractor-or service-provided or a mix of the two. Depending on 
results of analyses of support options, BMDS support planning for some 
elements may change, making it difficult for DOD to consolidate element 
support planning into an overall, integrated system support plan. 

Difficulties in Transitioning BMDS Elements from MDA to the Services 
Complicate Long-term Support Planning: 

DOD has experienced difficulties in long-term support planning because 
DOD has not developed and instituted a standard process that clearly 
specifies what support planning should be completed before elements are 
fielded, identifies which organization is responsible for life-cycle 
management, involves the services, and specifies how to transition 
support responsibilities from MDA to the services. Until DOD takes 
action to do so, DOD will be unable to ensure that individual elements 
will be sustained after 2013. Also, without such a standard process, 
DOD's long-term support planning for BMDS has been faced with a number 
of challenges. 

The first challenge affecting long-term support planning is that MDA 
and the services have not agreed on which organization should be 
responsible for long-term life-cycle management responsibilities, 
including developing long-term support plans. DOD policy and guidance 
state that the program manager is responsible for life-cycle management 
activities, including developing support plans, and is the single point 
of accountability for sustainment of a weapon system throughout its 
life. Additionally, our prior work has shown that establishing clear 
roles and responsibilities can improve outcomes by identifying who is 
accountable for various activities. However, in negotiating transition 
for some BMDS elements, MDA and the services disagree over which 
organization will be responsible for performing life-cycle management 
responsibilities, such as providing and planning for support over the 
long term. As a result, for five of the seven elements we examined, MDA 
and the services have been unable to reach agreement on who will be 
responsible for providing support and how these elements will be 
supported after 2013, even though MDA officials have stated that most 
elements are expected to have a useful life of 20 years. For example, 
MDA hopes to have the Army assume support responsibilities after 2013 
for the Terminal High Altitude Area Defense element, the forward-based 
radar, and the Ground-based Midcourse Defense element. However, Army 
officials stated that they have not agreed to take over support of 
these elements at that time. Moreover, Navy officials stated that all 
life-cycle issues have to be considered to prevent the emergence of 
unplanned, future costs and intend to have the responsibilities for 
life-cycle support of the sea-based radar understood and apportioned 
between MDA and the Navy and documented prior to the formal transfer of 
the element. Table 2 below shows, by element, whether there is 
agreement on who provides support after 2013 and on who should be 
responsible for life-cycle management, and the status of support 
planning. 

Table 2: Status of Agreements and Support Plans for Long-term Support 
and Life-cycle Management of BMDS Elements: 

Element: Ground-Based Midcourse Defense; 
Lead service: Army; 
Agreement on support after 2013 and life-cycle management 
responsibilities: No; 
Status of element support plan development: Boeing developed a support 
plan in 2005, but it did not include Army input. MDA officials said the 
2005 plan is out of date and they are drafting a new version and plan 
to include Army input. 

Element: AN/TPY-2 (forward-based); 
Lead service: Army; 
Agreement on support after 2013 and life-cycle management 
responsibilities: No; 
Status of element support plan development: MDA officials say they are 
drafting a plan, but the Army's involvement is to be determined. 

Element: Terminal High Altitude Area Defense; (THAAD); 
Lead service: Army; 
Agreement on support after 2013 and life-cycle management 
responsibilities: No; 
Status of element support plan development: The most recent version of 
the element support plan is dated February 2006, included Army input, 
and was signed by both MDA's THAAD office and Army THAAD commanders. 

Element: Aegis Ballistic Missile Defense; 
Lead service: Navy; 
Agreement on support after 2013 and life-cycle management 
responsibilities: Yes; 
Status of element support plan development: No separate support plan 
for Aegis BMD exists. The element relies on the Navy's existing Aegis 
operations and logistics support infrastructure. 

Element: Sea-Based X-Band Radar; 
Lead service: Navy nominated; 
Agreement on support after 2013 and life-cycle management 
responsibilities: No; 
Status of element support plan development: MDA officials said they 
plan to draft one by the end of calendar year 2008, but the Navy's 
involvement is to be determined. 

Element: Upgraded Early Warning Radar; 
Lead service: Air Force; 
Agreement on support after 2013 and life-cycle management 
responsibilities: Yes; 
Status of element support plan development: The Air Force drafted a 
support plan in 2004, but the strategy has since been incorporated into 
the annual transition plan. 

Element: European Midcourse Radar; 
Lead service: Air Force; 
Agreement on support after 2013 and life-cycle management 
responsibilities: No; 
Status of element support plan development: MDA and the Air Force are 
planning to have the contractor develop a support plan. 

Source: GAO summary of DOD information. 

[End of table] 

Second, although DOD has designated a lead service to assume support 
responsibilities for most BMDS elements that have been or will be 
fielded by 2015, MDA and the services have not consistently worked 
together to develop plans to transition responsibility for long-term 
support. A DOD directive states that lead services, who will assume 
support responsibilities for BMDS, should work with MDA to develop 
transition and support plans.[Footnote 26] However, there was little or 
no service input in developing transition plans for three of the seven 
elements we examined--the ground-based element, sea-based radar, and 
the European radar. The services have been involved in support planning 
for ballistic missile defense capabilities added to already existing, 
legacy systems, but not routinely involved in support planning for 
newer elements. For example, MDA officials told us the Air Force was 
involved in support planning for the Upgraded Early Warning Radar since 
a ballistic missile defense capability was added to an existing Air 
Force radar. Similarly, the Navy included support planning for the 
Aegis Ballistic Missile Defense element in its existing support for 
Aegis ships. For non-legacy elements, however, services have either not 
been involved in support planning at all or have not been involved 
"early" enough to influence design decisions that may affect how an 
element is to be supported. For example, after the 2004 fielding of the 
ground-based element, the contractor developed a support plan for the 
element, but MDA and Army officials told us that since the plan was 
developed before the Army was named lead service, the plan had little 
to no Army input. Further, the Army stated that it is reluctant to 
assume responsibility for support contracts involving design decisions 
made without Army involvement. Also, Army officials said that it would 
have been helpful if they had input into facilities and security design 
decisions for the forward-based radar that were made before they were 
named lead service. 

Third, MDA and the services use methods to negotiate transition of 
support responsibilities from MDA to the services that are 
inconsistent, resulting in confusion over which method is authoritative 
and binding. Our prior work has shown that it is important for 
organizations to provide clear and complete guidance to their 
subordinate organizations.[Footnote 27] According to our analysis of 
the transition plan and what DOD officials have told us, it is unclear 
whether the transition plan is binding on the parties, and the plan 
does not provide specific guidance to the services or MDA for how to 
transition support responsibilities of individual elements. As a 
result, the transition plan is not the preferred forum for negotiating 
transition for all elements. For example, Air Force officials told us 
that they prefer using the transition plan as their negotiation forum 
because it identifies open issues unique to each element, and documents 
what MDA and the Air Force will do in specific years. In contrast, Navy 
officials told us that they prefer to use a memorandum of agreement to 
document transition agreements for each element that is signed by MDA 
and Navy leaders since it can take several months for the transition 
plan to be approved. As a result of the transition plan timing, Navy 
officials told us that the transition plan may not always reflect the 
Navy's views, particularly for new elements such as the sea-based 
radar. Without a clear agreement on how to negotiate transition of 
support responsibilities, MDA has proposed that each service have a 
memorandum of agreement that would provide a strategic overview of how 
BMDS elements will transition from MDA to a service. These service 
memoranda of agreement would be supplemented by an element-specific 
transition plan that would provide a detailed, tactical view and 
specify when and how responsibilities, such as support, will transition 
from MDA to the service. However, DOD has not documented that this 
approach is the preferred method. As a result, transition of support 
responsibilities seems to occur ad hoc, element by element, with no 
standard process. Further, DOD will not be able to take advantage of 
lessons learned from one transition effort to the next without a 
consistent, documented process for how support responsibilities are 
transitioned from MDA to the services. 

DOD Is Developing a Draft Proposal for Managing BMDS, but the Draft 
Proposal Lacks Important Details: 

The Missile Defense Executive Board is developing a proposal to improve 
management of BMDS elements, in part, to address support and transition 
issues. DOD created the Missile Defense Executive Board in 2007 to 
recommend and oversee implementation of strategic policies, plans, 
program priorities, and investment options for BMDS. The draft proposal 
states that BMDS should be managed as a portfolio to ensure major 
decisions take into account the BMDS life-cycle and include all major 
stakeholders. The proposed portfolio management suggests defense-wide 
funding for research and development, procurement, operation and 
support, and military construction. Finally, the draft proposal states 
that the responsibilities of DOD stakeholders in BMDS life-cycle 
management should be clarified. As the Board's Chair, the office of USD 
(AT&L) has taken the lead in developing this draft proposal. USD (AT&L) 
officials explained that this draft proposal is intended to bridge the 
gap that exists between the traditional life-cycle system management 
processes and how BMDS is currently being fielded and managed. This 
process is also intended to: identify which principles of traditional 
life-cycle system management should be applied to BMDS, such as 
milestone reviews and support planning; specify how to transition 
responsibility for support from MDA to the services; and explain when a 
lead service should become involved. 

However, the draft proposal is very general and lacks important 
details. In particular, the draft proposal does not specify the role or 
timing for service involvement in developing support plans for 
elements, that support plans are to cover the elements' expected life, 
be completed before fielding, how MDA and the services should negotiate 
transition of responsibility for providing support of BMDS elements, or 
when the draft proposal is expected to be approved and implemented. 
Also, MDA and USD (AT&L) officials told us that the draft proposal 
would not require discussions about life-cycle management for elements 
until the element has a lead service--which makes it difficult for the 
lead service to provide input into support decisions. 

Despite Recent Efforts, Operation and Support Cost Estimates for BMDS 
Elements Have Limitations and Are Not Transparent: 

DOD's recent efforts to develop operation and support cost estimates 
for BMDS elements have limitations and are not transparent for DOD and 
congressional decision-makers. Although DOD has started to develop 
operation and support cost estimates for BMDS elements, the estimates 
are not complete and have limitations. Furthermore, BMDS operation and 
support costs are not transparent in the Future Years Defense Program 
(FYDP). DOD has not yet clearly identified BMDS operation and support 
costs because the department has not required that these costs are to 
be developed, validated, and reviewed according to key principles for 
cost estimating, and it has not specified when this should be done or 
identified who is responsible for doing so. DOD has developed a draft 
proposal for the overall management of BMDS, but the draft proposal 
lacks important details and does not address the limitations we 
identified. Without a requirement to develop operation and support cost 
estimates, DOD and the services will have difficulty preparing credible 
and transparent budget requests and face unknown financial obligations 
over the long term, thus hindering decision-makers' ability to make 
informed tradeoffs among competing priorities both across BMDS elements 
and across the department. 

DOD Is Developing Some BMDS Operation and Support Cost Estimates, but 
Efforts Are Not Yet Complete: 

DOD is developing operation and support cost estimates for all seven of 
the BMDS elements we examined, which it intended to use in preparing 
its fiscal year 2010 through 2015 spending plan and to facilitate 
transition of funding responsibilities from MDA to the services. 
[Footnote 28] Thus far, MDA and the services have jointly developed and 
agreed on cost estimates for only two of the seven elements we 
examined--the Aegis ballistic missile defense and the Upgraded Early 
Warning Radar. MDA and the services have not yet completed the joint 
estimates for operation and support costs for the remaining five 
elements. The status of each of these remaining efforts is summarized 
below. 

* Army--Ground-based Midcourse Defense, Terminal High Altitude Area 
Defense, and the forward-based radar: As of July 2008, MDA and the Army 
had not completed operation and support cost estimates for these three 
elements. MDA initially planned to complete the estimates by February 
2008. The Army and MDA have agreed on the methodologies for developing 
operation and cost estimates. However, Army officials stated that, as 
of July 2008, the estimates are not complete because some of the 
assumptions may change and the estimates have not been reviewed and 
approved by the Army Cost Review Board. For example, an Army cost 
estimator told us that the estimate for the forward-based radar is not 
complete because many of the major assumptions that will drive costs, 
such as physical site location, infrastructure, and security 
requirements, remain undetermined. 

* Air Force--European radar: The Air Force and MDA began to develop a 
joint estimate for the European radar in August 2008 and plan to update 
the estimate as assumptions are refined. However, since all base 
operating support requirements are not finalized, the Air Force 
spending plan for fiscal years 2010 through 2015, which is due to the 
Office of the Under Secretary of Defense (Comptroller) in August 2008, 
may not include all the operation and support costs for the European 
radar. 

* Navy--Sea-based radar: The Navy and MDA plan to develop a joint 
estimate in fiscal year 2009. However, MDA and the Navy have separately 
developed operation and support cost estimates for this element. Using 
their separate estimates, MDA and Navy officials met to discuss the 
differences. According to MDA and Navy cost estimators, the Navy's 
estimate was approximately $10 million a year higher than MDA's, but 
MDA officials agreed that the Navy's estimated platform maintenance 
costs were more accurate. The resulting cost estimate is intended to 
support a cost-sharing agreement between MDA and the Navy which, as of 
August 2008, had not been finalized. 

MDA and some service officials told us that the longer it takes to 
finish the estimates and agree on funding responsibilities, the less 
likely it is that these estimates will be reflected in the spending 
plans for fiscal years 2010 through 2015, which are currently under 
development. MDA officials have stated that their intention is to 
update these estimates annually, beginning in October 2009; however, as 
of August 2008, there were no signed agreements or requirements for the 
agency to do so. 

Ongoing Efforts to Develop Operation and Support Cost Estimates Have 
Limitations: 

MDA and the services are beginning to estimate BMDS operation and 
support costs, but these efforts have limitations. First, the initial 
estimates are not yet complete and are likely to change over time, 
perhaps significantly, since MDA and the services are still determining 
key assumptions, such as how support will be provided--by contractor, 
the service, or a combination of the two--and where some elements may 
be fielded and operated. DOD and GAO key principles for preparing cost 
estimates state that complete and credible cost estimates are important 
to support preparation of budget submissions over the short term as 
well as to assess the long-term affordability of the program. 

As discussed earlier in this report, MDA and the services have not 
completed long-term support planning and they are still in the process 
of determining where some BMDS elements will be fielded and operated. 
DOD and GAO key principles for developing accurate and reliable cost 
estimates recommend that all assumptions that can profoundly influence 
cost should be identified before calculating the estimate.[Footnote 29] 
However, MDA and the services have not determined how some of the 
elements will be supported over the long term, which will affect 
operation and support costs, such as maintenance, base operating 
support, and facilities. For instance, during research, development, 
and fielding, MDA is using contractors to support the BMDS elements. 
However, after the elements transition from MDA to the services, the 
services may decide to support the elements using their own military 
personnel and facilities or possibly a combination of contractor 
support and military service support. For example, if the Army used its 
own operation and support personnel, the cost estimate could increase, 
since Army would require facilities costing about $138 million for 41 
different buildings. 

Further, assumptions about where two of the BMDS elements will be 
fielded and operated could change which, when finalized, could affect 
key assumptions and the resulting cost estimate. An official in the 
Office of the Secretary of Defense, Cost Analysis Improvement Group, 
stated that any ambiguity in the estimate's assumptions lowers the 
quality of the estimate and creates uncertainty about the results. For 
example, the Navy and MDA have not determined the amount of time the 
sea-based radar will spend on location in Adak, Alaska, in transit, and 
at sea. The greater use of fuel alone for increased time spent in- 
transit could significantly affect the operation and support cost 
estimate for the sea-based radar. Also, in developing the cost estimate 
for the Terminal High Altitude Area Defense, MDA and Army assumed 
peacetime operations with all of the units to be located at one site 
within the continental United States. However, if the Army decides to 
forward deploy one or more of the units for peacetime rotations, as is 
done for other similar weapon systems such as the Patriot system, the 
cost estimate could change significantly. Also, additional 
infrastructure and operation and support costs may be incurred if the 
Army decides to base the Terminal High Altitude Area Defense units at 
more than one site within the United States. 

The second major limitation to DOD's cost estimates is that DOD does 
not plan to have the operation and support cost estimates for all the 
elements independently verified. DOD and GAO key principles for cost 
estimating state that independent verification of cost estimates is 
necessary to assure accuracy, completeness, and reliability. In typical 
weapon system development, cost estimates--including estimates for 
operation and support costs--are developed, independently validated, 
and reviewed by senior DOD leadership before a system is fielded. 
However, since MDA is exempt from traditional DOD weapon system 
development processes, there is no requirement for independent cost 
estimates, and DOD's Cost Analysis Improvement Group prepares 
independent cost estimates only at MDA's request. As of August 2008, 
MDA had requested only independent estimates of operation and support 
costs for two of the seven BMDS elements we reviewed. The Cost Analysis 
Improvement Group completed an estimate for Aegis ballistic missile 
defense in 2006 and is currently developing an estimate, including 
operation and support costs, for the European radar and interceptor 
site. Independently validated cost estimates are especially important 
to formulating budget submissions and DOD's 6-year spending plan, the 
FYDP, which is submitted to Congress, since, historically, cost 
estimates created by program offices are lower than those that are 
created independently. 

Nevertheless, MDA and Cost Analysis Improvement Group officials have 
stated that there is no firm schedule or agreement to develop 
independent operation and support estimates for any of the other five 
BMDS elements we reviewed, including those that are already fielded, 
such as the forward-based radar, or will soon be fielded, such as the 
Terminal High Altitude Area defense element. However, even though the 
Army Cost Review Board[Footnote 30] will be reviewing the operation and 
support cost estimates for the Army's three elements, these reviews do 
not constitute an independently developed cost estimate. MDA officials 
have stated that their priority is for the Cost Analysis Improvement 
Group to develop independent cost estimates for the research, 
development, and procurement costs of BMDS blocks, and this effort will 
not include independently estimating operation and support costs. MDA 
officials stated that they intend to ask the Cost Analysis Improvement 
Group to begin working on independent operation and support cost 
estimates after the block estimates are completed. However, MDA 
officials also acknowledged that there is no requirement for 
independent validation of operation and support estimates and the Cost 
Analysis Improvement Group would not begin its work on operation and 
support cost estimates until at least late 2009. Without credible long- 
term operation and support cost estimates, DOD and the services face 
unknown financial obligations for supporting BMDS fielding plans which 
will hinder budget preparation and assessment of long-term 
affordability. Table 3 below shows whether the joint operation and 
support cost estimates have been completed, whether the cost estimates 
will be independently verified, and the status of the joint estimates. 

Table 3: Status of Joint Cost Estimates and Plans for Independent 
Verification of Operation and Support Cost Estimates: 

Element: Aegis Ballistic Missile Defense; 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: Yes; 
Joint operation and support cost estimate completed?: Yes; 
Status of joint operation and support cost estimate: MDA and the Navy 
agreed on the operation and support costs through a Memorandum of 
Agreement. 

Element: Ground-based Midcourse Defense; 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: No; 
Joint operation and support cost estimate completed?: No; 
Status of joint operation and support cost estimate: In Process--Joint 
MDA/Army estimate has not been reviewed and approved by the Army Cost 
Review Board. 

Element: Terminal High Altitude Area Defense; 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: No; 
Joint operation and support cost estimate completed?: No; 
Status of joint operation and support cost estimate: In Process--Joint 
MDA/Army estimate has not been reviewed and approved by the Army Cost 
Review Board. 

Element: AN/TPY-2 (forward-based); 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: No; 
Joint operation and support cost estimate completed?: No; 
Status of joint operation and support cost estimate: In Process--Joint 
MDA/Army estimate has not been reviewed and approved by the Army Cost 
Review Board. 

Element: Sea-based Radar; 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: No; 
Joint operation and support cost estimate completed?: No joint 
estimate, but MDA and the Navy developed separate estimates; 
Status of joint operation and support cost estimate: MDA and the Navy 
prepared separate estimates, met to discuss differences, and agreed on 
the results. The Navy and MDA plan to develop a joint cost estimate in 
2009. 

Element: Upgraded Early Warning Radar; 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: No; 
Joint operation and support cost estimate completed?: Yes; 
Status of joint operation and support cost estimate: MDA and the Air 
Force jointly agree on cost estimates through the transition plan. 

Element: European Midcourse Radar; 
Independent verification of the cost estimate by the Cost Analysis 
Improvement Group?: Yes, in process; 
Joint operation and support cost estimate completed?: No; 
Status of joint operation and support cost estimate: The Air Force and 
MDA began to develop a joint estimate for the European radar in August 
2008. 

Source: GAO summary of DOD information. 

[End of table] 

BMDS Operation and Support Costs Are Not Transparent in DOD's Future 
Years Defense Program: 

The cost to operate and support the BMDS elements is not transparent in 
the FYDP and, as a result, DOD may have difficulty communicating to 
congressional decision-makers how much it will cost over time to 
support DOD's fielding plans. For example, the FYDP, DOD's 6-year 
spending plan, does not fully reflect BMDS operation and support costs 
that are expected to be incurred--and these are likely to be 
significant since operation and support costs are typically over 70 
percent of a system's total lifetime costs. Key principles for 
estimating program costs note that credible cost estimates are the 
basis for establishing and defending spending plans. We and DOD have 
repeatedly recognized the need to link resources to capabilities to 
facilitate DOD's decision-making and congressional oversight. However, 
four factors hinder the visibility of BMDS operation and support costs 
in the FYDP. 

First, for five of the seven elements we examined, MDA and the services 
have not yet agreed on which organization is responsible for funding 
operation and support costs after fiscal year 2013, as shown in Table 4 
below. 

Table 4: Agreement on Responsibility for Funding Operation and Support 
Costs after 2013: 

Element: Aegis Ballistic Missile Defense; Agreement on responsibility 
for funding operation and support costs after 2013?: Yes. 

Element: Ground-based Midcourse Defense; 
Agreement on responsibility for funding operation and support costs 
after 2013?: No. 

Element: Terminal High Altitude Area Defense; 
Agreement on responsibility for funding operation and support costs 
after 2013?: No. 

Element: AN/TPY-2 (forward-based); 
Agreement on responsibility for funding operation and support costs 
after 2013?: No. 

Element: Sea-based X-Band Radar; 
Agreement on responsibility for funding operation and support costs 
after 2013?: No. 

Element: Upgraded Early Warning Radar; 
Agreement on responsibility for funding operation and support costs 
after 2013?: Yes. 

Element: European Midcourse Radar; 
Agreement on responsibility for funding operation and support costs 
after 2013?: No. 

Source: GAO summary of DOD information. 

[End of table] 

As a result, all of the BMDS operation and support costs will not be 
reflected in the FYDP for fiscal years 2010 through 2015, which is 
currently under development. For example, the Army and MDA are still 
negotiating memoranda of agreements for the Ground-based Midcourse 
Defense element, Terminal High Altitude Area Defense, and forward-based 
radar that are intended, in part, to specify which organization is to 
fund operation and support costs in which fiscal years. One Army 
official estimated that it could take up to 18 months for these 
agreements to be signed. Hence, the Army will not be including all the 
costs in its budget for fiscal years 2010 through 2015 other than what 
the Army has already agreed to fund, such as security for the first 
forward-based radar at Shariki, Japan and some base support costs at 
Ft. Greely, Alaska. Also, MDA has not yet reached agreement with the 
Navy and the Air Force on which organization will fund operation and 
support costs for the sea-based radar and the European radar, 
respectively. The extent to which the FYDP for fiscal years 2010 
through 2015 will include all of the operation and support costs that 
might be incurred for these elements is unclear. 

The second factor that hinders visibility of BMDS operation and support 
costs is that DOD's transition plan, which is intended to reflect the 
most current cost agreements between MDA and the services, has not been 
completed in time for the services to use as they prepare their budgets 
and spending plans. The 2006 transition plan was approved in September 
2006 and was intended to support the development of the budget and 
spending plan for fiscal years 2008 through 2013, but the services were 
required to submit their budgets to DOD in August 2006, which allowed 
no time for the services to alter their budget submissions accordingly. 
Similarly, the 2007 transition plan was originally intended to 
influence development of the fiscal year 2008 budget, but it was not 
approved until February 2008--too late to support development of the 
fiscal year 2008 budget. In commenting on the 2007 transition plan, the 
Army stated that the plan was not the basis for the Army's budget 
submission. Consequently, the transition plan has not been effective in 
assisting development of the services' budget and FYDP spending plans. 

The third factor that hinders transparency is that DOD does not clearly 
identify and aggregate BMDS operation and support costs in the FYDP. We 
previously reported that there is no FYDP structure to identify and 
aggregate ballistic missile defense operational costs. In 2006, we 
recommended that DOD develop a structure within the FYDP to identify 
all ballistic missile defense operational costs.[Footnote 31] However, 
as of August 2008, according to an official in the Office of the Under 
Secretary of Defense (Comptroller), DOD has not adjusted the FYDP 
structure to allow identification and aggregation of ballistic missile 
defense operation and support costs. 

Fourth, as the services develop their spending plans, funding BMDS 
operation and support costs will compete with other service priorities. 
Service officials stated that BMDS operation and support costs will 
have to come out of their operation and maintenance budgets, which fund 
the training, supply, and equipment maintenance of military units, as 
well as the administrative and facilities infrastructure of military 
bases. Priorities within this fund are highly competitive and BMDS 
operation and support would have to compete against all other service 
operation and maintenance priorities. It is therefore unclear how much 
of the operation and support costs will ultimately be reflected in the 
services' budget submissions and spending plans, and DOD faces a risk 
that operation and support for BMDS will be funded unevenly across 
elements. 

DOD Has Not Required That Operation and Support Cost Estimates Be 
Developed: 

DOD has not yet clearly identified BMDS operation and support costs 
because the department has not required that these costs be developed, 
validated, and reviewed, and it has not specified when this should be 
done or identified who is responsible for doing so. Without such a 
requirement, DOD's operation and support cost estimates will continue 
to have limitations and will not be transparent in the FYDP. As a 
result, DOD will have difficulty preparing credible budget requests and 
estimating long-term costs, which are important in assessing 
affordability over time. 

As mentioned earlier in this report, DOD's Missile Defense Executive 
Board is developing a draft proposal for the overall management of 
BMDS, which is intended to include an approach for managing and funding 
operation and support; however, the draft proposal is not well defined. 
The draft proposal suggests funding operation and support costs from a 
defense-wide account which, in theory, would allow these costs to be 
clearly identified and would alleviate the pressure on the services' 
budgets to fund operation and support for BMDS. However, this proposal 
as drafted to date does not fully address the operation and support 
cost limitations identified in this report. Specifically, the draft 
proposal to date is not well defined, and the explicit process 
detailing how it would work has not been developed. Among other things, 
the draft proposal does not specify how MDA and the services will 
jointly determine the amount of operation and support funding that is 
needed; when and how operation and support cost estimates are to be 
developed, validated, and reviewed; or who should be responsible for 
doing so. Also, the draft proposal does not include a requirement for 
senior level review of cost estimates where the cost drivers and 
differences between the program estimates and independent estimates 
could be reviewed and explained. In typical weapon system programs, the 
program office estimate and the independent estimate are reviewed by 
senior DOD leaders[Footnote 32] and differences explained. Finally, it 
is not clear when the draft proposal will be approved or implemented. 
As a result, there is little likelihood that the upcoming DOD spending 
plan for fiscal years 2010 through 2015 will contain significant 
improvements in the visibility of BMDS operation and support costs. 

Conclusions: 

Although DOD has taken some initial steps to plan for support of BMDS 
elements, without a clearly defined process for long-term support 
planning, DOD is not poised to effectively manage the transition of 
BMDS support responsibilities from MDA to the services or to plan for 
their support over the long term. This will become increasingly 
important in years to come as more elements are fielded and operation 
and support costs begin to increase. Further, if the lead service is 
not actively involved early enough to influence support planning, the 
services may have little time to prepare to assume responsibility for 
the elements and could risk being unable to provide support for an 
element in the short term, particularly for new elements that did not 
originate in a service, such as the adjunct sensor. At the same time, 
DOD may face difficulties determining how the overall BMDS and 
individual elements will be sustained over the long term. MDA is not 
required to follow all of DOD's traditional life-cycle management 
processes for weapon system programs. However, unless DOD takes action-
-either via the Missile Defense Executive Board's draft proposal or by 
some other means--to establish when support planning that covers the 
element's expected life and involves the services is to be completed, 
to specify who is responsible for life-cycle management and specify 
what this entails, and to establish accountability for ensuring these 
steps are completed, Congress will lack assurance that key decisions 
have been made that involve the services for which organization is 
responsible for providing support and how that support will be provided 
over the long term. Further, as Congress considers requests to fund 
operation and support for BMDS elements, in the face of many competing 
priorities, decision-makers may lack confidence that DOD has plans in 
place to assure the overall long-term supportability of this complex 
and costly system. 

As one of DOD's largest weapon system investments, BMDS could easily 
incur billions of dollars in operation and support costs over time. 
Operation and support typically comprises over 70 percent of a weapon 
system's total cost over its life. It is therefore critical that DOD 
and congressional decision-makers have complete, credible, and 
transparent cost information with which to evaluate budget requests in 
the near term and to evaluate whether fielding plans are affordable 
over the long term as an increasing number of BMDS elements are 
fielded. Given the program's limited transparency to date, Congress is 
already limited in its ability to evaluate the near-and long-term 
budget implications of decisions already made to develop and field BMDS 
elements. Until DOD develops accurate, realistic, and transparent cost 
estimates according to key principles, including independent 
verification, its estimates will continue to lack the credibility 
necessary for building budget submissions and spending plans. Also, 
since MDA and the services have, in general, not reached agreement on 
who will pay for operation and support after 2013, and since BMDS will 
compete with other service priorities, there is a risk that operation 
and support funding for BMDS elements will vary from element to 
element. Until DOD requires that credible estimates be developed and 
until DOD specifies how BMDS operation and support funds will be 
prioritized, allocated, and distributed, the department risks being 
unable to clearly identify and align operation and support cost with 
fielding plans or to assure that funds are available for the operation 
and support of the missile defense elements over the long term. 
Further, the department will continue to lack internal controls to 
manage and oversee a significant number of federal dollars. Moreover, 
DOD and the services face unknown financial obligations to support BMDS 
elements over the long term. Finally, decision-makers inside and 
outside DOD will not have a sound basis with which to make difficult 
funding tradeoffs among competing priorities both across BMDS elements 
and across the department. 

Recommendations for Executive Action: 

We recommend that the Secretary of Defense take the following six 
actions: 

To improve planning to support BMDS elements, including planning for 
the transition of support responsibilities from MDA to the services, we 
recommend that the Secretary of Defense direct the Under Secretary of 
Defense for Acquisition, Technology, and Logistics, establish a 
standard process for long-term support planning that adheres to key 
principles for life-cycle management, including: 

* establishing timelines for planning that must be completed before 
each element is fielded, such as naming a lead service, involving 
services in support and transition planning, and deciding when support 
responsibilities will be transitioned to the services; 

* requiring active lead service participation in developing long-term 
support plans and designating what support planning should be completed 
before elements are fielded; and: 

* specifying which organization is responsible for life-cycle 
management and identifying steps for oversight to identify who is 
accountable for ensuring these actions are accomplished. 

To increase transparency and improve fiscal stewardship of DOD 
resources for BMDS, we recommend that the Secretary of Defense direct 
the Under Secretary of Defense for Acquisition, Technology, and 
Logistics, to establish a requirement to estimate BMDS operation and 
support costs including: 

* detailing when credible estimates are to be developed, updated, and 
reviewed; specifying criteria for prioritizing, allocating, and 
distributing funds; and clearly identifying who is responsible for 
oversight of this process; 

* requiring periodic independent validation of operation and support 
costs for each BMDS element; and: 

* using the independently validated estimates to support preparation of 
complete and credible budget submissions and DOD's spending plan and to 
assess the long-term affordability of the integrated system and 
individual elements for informing key trade-off decisions. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, DOD concurred with one 
and partially concurred with five recommended actions. The department's 
comments are reprinted in their entirety in appendix II. DOD also 
provided technical comments, which we have incorporated as appropriate. 

DOD partially concurred with our three recommendations to improve long- 
term support planning for BMDS elements. First, DOD partially concurred 
with our recommendation that the Under Secretary of Defense for 
Acquisition, Technology, and Logistics (USD (AT&L)) establish timelines 
for planning that must be completed before each element is fielded, 
such as naming a lead service, involving services in support and 
transition planning, and deciding when support responsibilities will be 
transitioned to the services. In its comments, DOD stated that the new 
BMDS life-cycle management process provides for service participation 
in annual MDA planning and programming. DOD further stated that through 
this process, timelines for transition of BMDS elements from MDA to the 
services after initial fielding will be executable within reasonable 
periods of time following initial fielding. DOD also stated that 
tailored negotiations between MDA and the services would be better than 
establishing uniform timelines and the Missile Defense Executive Board 
would step in if issues cannot be resolved in a timely fashion. 
However, USD (AT&L) officials told us that, as of September 15, 2008, 
the proposed BMDS life-cycle management process is a proposal and has 
not yet been implemented. Moreover, the draft proposal does not specify 
the role or timing for service involvement in developing support plans 
for elements. Regarding DOD's preference not to establish uniform 
timelines, we believe that key steps in completing support planning can 
be condition-based rather than calendar-based. For example, we point 
out in our report that MDA's own sustainment directive specifies what 
criteria, including support planning, should be completed before an 
element moves to a subsequent development phase. Also, while the 
Missile Defense Executive Board may step in to resolve issues, the 
Board is a new organization and it is not clear what criteria the Board 
would use to determine whether intervention is needed, specifically in 
the absence of specific guidance outlining how the process should work. 
Our recommendation would provide some needed structure and specificity 
that the draft proposal currently lacks; unless DOD takes action to 
implement this recommendation, transition of support responsibilities 
may continue in an ad hoc manner, and DOD may not be able to take 
advantage of lessons learned from one transition effort to the next. 

Second, DOD partially agreed with our recommendation that USD (AT&L) 
require active lead service participation in developing long-term 
support plans and designate what support planning should be completed 
before elements are fielded. DOD agreed that it is better to put long- 
term support plans into effect before BMDS elements are fielded, but 
said that fielding of an element should not be delayed because of 
incomplete support planning. DOD stated that once a lead service is 
designated, the element enters into the transition phase, memoranda of 
agreement are established, and an assessment is made by the department 
to determine when the element transfer is appropriate. As stated in our 
report, however, DOD has not documented that establishing memoranda of 
agreement is the preferred method of negotiating transition of 
responsibilities from MDA to the services. DOD also stated that by 
initiating its proposed life-cycle management process, the department 
intends to ensure that the services are active participants in long- 
term support planning. However, we point out in our report that several 
elements were fielded before support plans were completed and some, 
like the forward-based radar, still do not have a support plan more 
than 2 years after fielding. Also, we point out that DOD's draft 
proposal for life-cycle management lacks important details such as when 
support plans are to be completed, and how MDA and the services should 
negotiate transition of responsibility for providing support. Further 
it is not clear when this draft proposal might be approved and 
implemented. Therefore, without specifying active service participation 
in developing long-term support plans and when these should be 
completed, DOD is likely to face continued difficulty in transitioning 
support responsibilities from MDA to the services and uncertainty will 
persist regarding how elements will be supported over the long term. 

Third, DOD partially agreed with our recommendation that USD (AT&L) 
specify which organization is responsible for life-cycle management and 
identify steps for oversight to identify who is accountable for 
ensuring these actions are accomplished. DOD stated that USD (AT&L) is 
responsible for initiating lead service designations and expects that 
the proposed life-cycle management process will ensure service 
involvement. DOD further stated that the Missile Defense Executive 
Board is chartered for providing oversight. However, we point out in 
our report that MDA and the services disagree over which organization 
will be responsible for performing life-cycle management 
responsibilities, such as providing and planning for support over the 
long term. Further, even though the Missile Defense Executive Board may 
provide some oversight, the proposed management process developed by 
this Board does not specify the role or timing for service involvement 
in developing support plans for elements, or that support plans are to 
cover the elements' expected life and be completed before fielding, or 
how MDA and the services should negotiate transition of responsibility 
for providing support of BMDS elements. Our prior work has shown that 
establishing clear roles and responsibilities can improve outcomes by 
identifying who is accountable for various activities. Therefore, 
without specifically designating life-cycle management responsibilities 
and specifying what these responsibilities entail, DOD may continue to 
face challenges it its ability to transition responsibility for 
providing support from MDA to the services and will be limited in its 
ability to improve long-term support planning for future BMDS elements. 

DOD concurred with one and partially concurred with two of our 
recommendations to establish a requirement to estimate BMDS operation 
and support costs. DOD agreed with our recommendation that USD (AT&L) 
require periodic independent validation of operation and support costs 
for each BMDS element. In its comments, DOD stated that periodic 
independent estimates of operation and support costs for BMDS elements 
are desirable. DOD also stated that the current arrangement between its 
Cost Analysis Improvement Group and MDA provides for independent cost 
estimates based on the MDA Director's priorities and that additional 
direction from the Under Secretary on the timing and frequency of 
independent cost estimates could facilitate planning for and executing 
these estimates. Although DOD agreed with this recommendation, its 
response did not indicate when it would implement the recommendation. 
Since independent verification of cost estimates is necessary to assure 
accuracy, completeness, and reliability, we encourage DOD to implement 
this recommendation as soon as possible. Without credible long-term 
operation and support cost estimates, DOD and the services face unknown 
financial obligations for supporting BMDS fielding plans, which will 
hinder assessing long-term affordability. 

DOD partially agreed with our recommendation that the Secretary of 
Defense direct USD (AT&L) to detail when credible estimates are to be 
developed, updated, and reviewed; specify criteria for prioritizing, 
allocating, and distributing funds; and clearly identify who is 
responsible for oversight of this process. In its comments, DOD stated 
that it does not require specific direction from the Under Secretary at 
this time. However, we reported that DOD has not clearly identified 
operation and support costs because the department has not required 
that these costs be developed, validated, and reviewed. Therefore, we 
continue to believe that, in the absence of a clear requirement for 
estimating long-term operation and support costs, direction from senior 
DOD leadership is needed. DOD also stated in its comments that it 
remains confident its proposed BMDS life-cycle management process and 
the efforts of the Missile Defense Executive Board will be successful 
in ensuring that decision-makers have complete, credible, and 
transparent cost information before the services assume and/or fund any 
responsibilities transitioned to them. However, as we reported, the 
BMDS draft proposal for the life-cycle management process is not well 
defined and does not specify when and how operation and support cost 
estimates are to be developed, validated, and reviewed or who should be 
responsible for doing so. Also, we reported that it is not clear when 
the draft proposal will be approved or implemented and DOD's comments 
did not provide us with a schedule or time frame for taking action. 
Without taking specific action on this recommendation, it is not clear 
who will be responsible for ensuring credible operation and support 
estimates are developed or how these funds will be managed. Further, 
decision-makers inside and outside DOD will not have a sound basis with 
which to make difficult funding tradeoffs among competing priorities 
both across BMDS elements and across the department. 

Finally, DOD partially agreed with our recommendation that the 
Secretary of Defense direct USD (AT&L) to use independently validated 
operation and support cost estimates to support preparation of complete 
and credible budget submissions and DOD's spending plan and to assess 
the long-term affordability of the integrated system and individual 
elements for informing key trade-off decisions. In its comments, DOD 
agreed that, whenever possible, independent cost estimates should be 
used to support its planning, programming, and budgeting decisions, but 
stated that the department does not believe that specific direction 
from the Under Secretary is needed. We reported that BMDS operation and 
support costs are not transparent in DOD's spending plan, the Future 
Years Defense Program, and that DOD has not yet completed operation and 
support cost estimates for several BMDS elements. Although DOD agreed 
that independent cost estimates should be used to support planning, 
programming, and budgeting decisions, its draft proposal for the life- 
cycle management process does not address this issue. Without specific 
direction to use independently validated cost estimates to prepare 
budget submissions and spending plans, there is little assurance that 
DOD's future spending plans will contain significant improvements in 
the credibility of BMDS operation and support costs. 

We are sending copies of this report to the Secretary of Defense; the 
Director, Missile Defense Agency; Chairman, Joint Chiefs of Staff; and 
the Chiefs of Staff and Secretaries of the Army, Navy, and Air Force. 
We will make copies available to others upon request. In addition, the 
report will be available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions, please call me at (404) 679- 
1816. Contact points for our Offices of Congressional Relations and 
Public Affairs may be found on the last page of this report. Staff 
members who made key contributions to this report are listed in 
appendix III. 

Signed by: 

John H. Pendleton: 
Director, Defense Capabilities and Management: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine the extent to which the Department of Defense (DOD) has 
(1) planned for the support of Ballistic Missile Defense System (BMDS) 
elements over the long term and (2) identified the long-term operation 
and support costs for the BMDS elements it plans to field, we conducted 
various analyses, reviewed key documentation, and interviewed relevant 
DOD officials. During this review, we focused on the seven BMDS 
elements that are already fielded or planned for fielding over fiscal 
years 2008 through 2015. Since all the BMDS elements are in various 
stages of development and transition to a military service, we selected 
a nongeneralizable sample to provide illustrative examples of issues 
related to both objectives. The illustrative sampling strategy 
identifies examples to gain deeper insight, demonstrate consequences, 
and provide practical, significant information about the BMDS elements 
under a variety of conditions, such as identifying at least one element 
that is intended to transition to each of the services, some elements 
that are already fielded, and some elements that will be fielded by 
2015. As a result, we selected seven BMDS elements: Aegis Ballistic 
Missile Defense, Ground-based Midcourse Defense, Terminal High Altitude 
Area Defense, AN/TPY-2 (forward-based radar), Sea-based X-band Radar, 
Upgraded Early Warning Radar, and European Midcourse Radar. 

To assess the extent to which DOD has developed plans for how to 
support BMDS elements over the long term, we compared the planning that 
had been done with key principles embodied in DOD and Missile Defense 
Agency (MDA) policies and guidance[Footnote 33] for life-cycle 
management[Footnote 34] to determine what aspects may be missing or 
have limited service involvement that could hinder transition of 
responsibility for support of BMDS elements from MDA to the services 
and hinder the ability to provide long-term support. To do so, we 
obtained and assessed relevant documents such as BMDS element support 
plans, MDA support documents, DOD guidance for MDA and the Missile 
Defense Executive Board, and MDA documents explaining program status 
and plans such as the 2007 BMDS Transition and Transfer Plan signed 
February 4, 2008. We also discussed the extent of support planning, the 
level of service involvement in support and transition planning, and 
whether the assignment of life-cycle management responsibilities was 
clearly designated with MDA and relevant officials from the Army, Navy, 
and Air Force. Further, using DOD briefings, memorandums, and 
discussions with DOD officials, we compared the draft Missile Defense 
Executive Board draft proposal for BMDS management with the shortfalls 
in support planning we identified to determine the extent to which the 
draft proposal may address those shortfalls. Finally, we discussed the 
results of our comparisons with officials from the Office of the Under 
Secretary of Defense for Acquisition, Technology, and Logistics; 
Missile Defense Agency; Air Force Headquarters Strategic Plans and 
Policy Directorate; U.S. Air Force Space Command; U.S. Army 
Headquarters and Space and Missile Defense Command; and the Office of 
Naval Operations Theater Air and Missile Defense Branch. 

To assess whether DOD has identified the long-term operation and 
support costs for the BMDS elements it plans to field, we evaluated how 
MDA and the services developed cost estimates and then compared the 
method by which those estimates were prepared with key principles 
compiled from DOD and GAO sources[Footnote 35] that describe how to 
develop accurate and reliable cost estimates to determine their 
completeness and the extent to which DOD took steps to assess the 
confidence in the estimates. We then discussed the results of our 
comparison and the status of the operation and support cost estimates 
with officials from the Office of the Deputy Assistant Secretary of the 
Army for Cost and Economics; the Naval Center for Cost Analysis; Air 
Force Space Command; the Missile Defense Agency; the Office of the 
Secretary of Defense Program, Analysis, and Evaluation and its Cost 
Analysis Improvement Group, and the Office of the Under Secretary of 
Defense for Acquisition, Technology, and Logistics. In addition, we 
assessed key documents such as the 2007 Transition and Transfer Plan 
and the Aegis memorandum of agreement to determine the extent to which 
MDA and the services have or have not agreed to fund operation and 
support costs for BMDS elements after 2013 and confirmed our 
understanding with MDA and service officials. Furthermore, to follow-up 
on our previous recommendation,[Footnote 36] we interviewed an official 
in the Office of the Under Secretary of Defense (Comptroller) to 
determine whether DOD had taken any action on our recommendation to 
develop a structure in the FYDP to identify all ballistic missile 
defense operational costs. Finally, using DOD briefings and other 
documents, we compared the Missile Defense Executive Board draft 
proposal for BMDS management with the shortfalls in estimating and 
funding operation and support costs we identified to determine the 
extent to which the draft proposal may address those shortfalls. We 
discussed our findings with officials from the Office of the Under 
Secretary of Defense for Acquisitions, Technology, and Logistics and 
the Missile Defense Agency. 

Other organizations we visited to gain an understanding of their roles 
in support planning and cost estimating included the Joint Staff, U.S. 
Strategic Command and its Joint Functional Component Command for 
Integrated Missile Defense, and U.S. Northern Command. 

We conducted this performance audit from August 2007 through September 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Office Of The Under Secretary Of Defense: 
Acquisition Technology And Logistics: 
3000 Defense Pentagon: 
Washington, DC 20301-3000: 

Mr. John H. Pendleton: 
Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Dear Mr. Pendleton: 

This is the Department of Defense (DoD) response to the GAO Draft 
Report, GAO-08-1068, "Missile Defense: Actions Needed to Improve 
Planning and Cost Estimates for Long-Term Support of Ballistic Missile 
Defense," dated August 15, 2008 (GAO Code 351080). 

The DoD concurs with one of the six draft report recommendations and 
partially concurs with five. The rationales for our positions are 
included in the enclosure. 

We appreciate the opportunity to comment on the draft report. My point 
of contact for this effort is Mr. Greg Hulcher, (703) 695-2680, 
greg.hulcher@osd.mil. 

Sincerely, 

Signed by: 

David G. Ahern: 
Director: 
Portfolio Systems Acquisition: 

Enclosure: As stated: 

GAO Draft Report - Dated August 15, 2008: 
GAO Code 351080/GAO-08-1068: 

"Missile Defense: Actions Needed to Improve Planning and Cost
Estimates for Long-Term Support of Ballistic Missile Defense" 

Department Of Defense Comments To The Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to establish timelines for planning that must be completed 
before each element is fielded, such as naming a lead Service, 
involving Services in support and transition planning, and deciding 
when support responsibilities will be transitioned to the Services. 

Proposed Response: Partially Concur. Considerable progress has been 
made with regards to planning for long-term support of Ballistic 
Missile Defense System (BMDS) capabilities. Continued improvement will 
be derived from the new BMDS Life Cycle Management Process, as 
discussed with GAO representatives. The process provides for Service 
participation in annual Missile Defense Agency (MDA) planning and 
programming. With the experience and involvement generated by this 
process and related activity, timelines for transition and transfer of 
BMDS elements to the Services will be substantive and executable within 
reasonable periods of time following initial fielding. Rather than 
establish uniform timelines, the Department believes the better 
approach is to rely on tailored negotiations between MDA and the 
Services conducted under oversight from the Missile Defense Executive 
Board (MDEB), particular to each BMDS element. The MDEB will step in 
when issues such as the allocation of support responsibilities cannot 
be resolved in a timely fashion. 

Recommendation 2: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to require active lead Services participation in developing 
long-term support plans and designating what support planning should be 
completed before elements are fielded. 

Proposed Response: Partially Concur. By initiating the BMDS Life Cycle 
Management Process, the Department intends to ensure that the Services 
are active participants in annual long-term support planning and 
budgeting. The current Transition and Transfer plan, directs that once 
a lead Service is designated, the element enters into transition phase, 
memorandum of agreements are established and an assessment is made by 
the Department to determine when the element transfer is appropriate. 
While the Department agrees with GAO's view that it is better to put 
long-term support plans into effect before BMDS elements/components are 
fielded, decisions to deploy BMDS capabilities under the spiral 
development approach must take into account considerations, such as the 
immediacy of the threat, the warfighter's needs, and the near-term 
military utility of the element/component. Therefore, it may be unwise 
to slow or delay fielding of BMDS capabilities until every step is 
taken to complete operation and support planning. 

Recommendation 3: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology and 
Logistics to specify which organization is responsible for life-cycle 
management and identifying steps for oversight to identify who is 
accountable for ensuring these actions are accomplished. 

Proposed Response: Partially Concur. USD(AT&L) is responsible for 
initialing Lead Service designations for Deputy Secretary of Defense 
approval. The Department expects that the BMDS Life Cycle Management 
Process will ensure Service involvement early in BMDS element 
development and life cycle management planning and budgeting. The MDEB 
will assess determinations concerning timing transfer of 
responsibilities to the Services for operations and sustainment. As for 
providing needed oversight within the Department, the MDEB is already 
chartered to carry out this responsibility. 

Recommendation 4: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics to detail when credible estimates are to be developed, 
updated, and reviewed; specifying criteria for prioritizing, 
allocating, and distributing funds; and clearly identifying who is 
responsible for oversight of this process. 

Proposed Response: Partially Concur. The Department does not require 
specific direction from the Under Secretary at this point in time. GAO 
found in its review that much progress has been made to develop joint 
estimates of operation and support costs but more needs to be done. The 
Department agrees and remains confident that its improved BMDS Life 
Cycle Management Process and the efforts of the MDEB will be successful 
in ensuring that decision makers have complete, credible, and 
transparent cost information before the Services must assume and/or 
fund any responsibilities transitioned to them. 

Recommendation 5: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics to require periodic independent validation of operation and 
support costs for each BMDS element. 

Proposed Response: Concur. The Department agrees with GAO that periodic 
independent estimates of operation and support costs for BMDS 
elements/components are desirable. The current arrangement between the 
Cost Analysis Improvement Group
and MDA provided for independent cost estimates based on the MDA 
Director's priorities. Additional direction from the Under Secretary on 
the timing and frequency of independent cost estimates could facilitate 
planning for and executing these estimates. 

Recommendation 6: The GAO recommends that the Secretary of Defense 
direct the Under Secretary of Defense for Acquisition, Technology, and 
Logistics to use the independently validated estimates to support 
preparation of complete and credible budget submissions and DoD's 
spending plan and to assess the long-term affordability of the 
integrated system and individual elements for informing key trade-off 
decisions. 

Proposed Response: Partially Concur. The Department agrees that, 
whenever possible, independent cost estimates should be used to support 
its planning, programming, and budgeting decisions, but the Department 
does not believe that specific direction from the Under Secretary is 
needed here. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

John H. Pendleton, (404) 679-1816, pendletonj@gao.gov: 

Acknowledgments: 

In addition to the individual named above, Gwendolyn R. Jaffe and Marie 
A. Mak, Assistant Directors; Brenda M. Waterfield; Whitney E. Havens; 
Pat L Bohan; Pamela N. Harris; Kasea Hamar; Nicolaas C. Cornelisse; and 
Susan C. Ditto made key contributions to this report. 

[End of section] 

Related GAO Products: 

Ballistic Missile Defense: Actions Needed to Improve the Process for 
Identifying and Addressing Combatant Command Priorities. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-08-740]. Washington, D.C.: July 
31, 2008. 

Defense Acquisitions: Progress Made in Fielding Missile Defense, but 
Program Is Short of Meeting Goals. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-08-448]. Washington, D.C.: March 14, 2008. 

Cost Assessment Guide: Best Practices for Estimating and Managing 
Program Costs, Exposure Draft. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-1134SP]. Washington, D.C.: July 2007. 

Missile Defense: Actions Needed to Improve Information for Supporting 
Future Key Decisions for Boost and Ascent Phase Element. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-430]. Washington, D.C.: April 
17, 2007. 

Defense Acquisitions: Missile Defense Acquisition Strategy Generates 
Results, but Delivers Less at a Higher Cost. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-387]. Washington, D.C.: March 
15, 2007. 

Defense Management: Actions Needed to Improve Operational Planning and 
Visibility of Costs for Ballistic Missile Defense. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-06-473]. Washington, D.C.: May 
31, 2006. 

Defense Acquisitions: Missile Defense Agency Fields Initial Capability 
but Falls Short of Original Goal. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-327]. Washington, D.C.: March 15, 2006. 

Defense Acquisitions: Actions Needed to Ensure Adequate Funding for 
Operation and Sustainment of the Ballistic Missile Defense System. 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-817]. Washington, 
D.C.: September 6, 2005. 

Military Transformation: Actions Needed by DOD to More Clearly Identify 
New Triad Spending and Develop a Long-term Investment Approach. 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-962R]. Washington, 
D.C.: August 4, 2005. 

Military Transformation: Actions Needed by DOD to More Clearly Identify 
New Triad Spending and Develop a Long-term Investment Approach. 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-540]. Washington, 
D.C.: June 30, 2005. 

Defense Acquisitions: Status of Ballistic Missile Defense Program in 
2004. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-243]. 
Washington, D.C.: March 31, 2005. 

Future Years Defense Program: Actions Needed to Improve Transparency of 
DOD's Projected Resource Needs. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-514]. Washington, D.C.: May 7, 2004. 

Missile Defense: Actions Are Needed to Enhance Testing and 
Accountability. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-
409]. Washington, D.C.: April 23, 2004. 

Missile Defense: Actions Being Taken to Address Testing 
Recommendations, but Updated Assessment Needed. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-04-254]. Washington, D.C.: 
February 26, 2004. 

Missile Defense: Additional Knowledge Needed in Developing System for 
Intercepting Long-Range Missiles. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-03-600]. Washington, D.C.: August 21, 2003. 

Missile Defense: Alternate Approaches to Space Tracking and 
Surveillance System Need to Be Considered. [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-03-597]. Washington, D.C.: May 
23, 2003. 

Missile Defense: Knowledge-Based Practices Are Being Adopted, but Risks 
Remain. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-441]. 
Washington, D.C.: April 30, 2003. 

Missile Defense: Knowledge-Based Decision Making Needed to Reduce Risks 
in Developing Airborne Laser. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-02-631]. Washington, D.C.: July 12, 2002. 

Missile Defense: Review of Results and Limitations of an Early National 
Missile Defense Flight Test. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-02-124]. Washington, D.C.: February 28, 2002. 

Missile Defense: Cost Increases Call for Analysis of How Many New 
Patriot Missiles to Buy. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-NSIAD-00-153]. Washington, D.C.: June 29, 2000. 

Missile Defense: Schedule for Navy Theater Wide Program Should Be 
Revised to Reduce Risk. [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/NSIAD-00-121]. Washington, D.C.: May 31, 2000. 

[End of section] 

Footnotes: 

[1] GAO, Defense Acquisitions: Missile Defense Acquisition Strategy 
Generates Results, but Delivers Less at a Higher Cost, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-387] (Washington, D.C.: Mar. 
15, 2007). 

[2] GAO, Defense Acquisitions: Actions Needed to Ensure Adequate 
Funding for Operation and Sustainment of the Ballistic Missile Defense 
System, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-817] 
(Washington, D.C.: Sept. 6, 2005). 

[3] GAO, Defense Management: Actions Needed to Improve Operational 
Planning and Visibility of Costs for Ballistic Missile Defense, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-473] (Washington, 
D.C.: May 31, 2006). 

[4] GAO, Defense Acquisitions: Progress Made in Fielding Missile 
Defense, but Program Is Short of Meeting Goals, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-08-448] (Washington, D.C.: Mar. 
14, 2008). 

[5] H.R. Rep. No. 110-146, 259 (2007). 

[6] DOD's key principles are contained in various documents such as: 
DOD Directive 5000.1, The Defense Acquisition System (May 12, 2003); 
DOD Instruction 5000.2, Operation of the Defense Acquisition System 
(May 12, 2003), OSD's Designing and Assessing Supportability in DOD 
Weapon Systems (October 24, 2003); DOD's Defense Acquisition Guidebook 
(December 20, 2004); MDA's Integrated Program Policy (July 18, 2005) 
and associated Implementation Guide (June 2, 2005); and MDA Directive 
5010.09, Ballistic Missile Defense System Sustainment (April 13, 2006). 

[7] Total life-cycle management is the management of all activities 
associated with the acquisition, development, production, fielding, 
sustainment, and disposal of a DOD weapon or system across its life 
cycle. In this engagement, we focused on the planning for fielding and 
sustainment over the expected life of the elements. 

[8] GAO, Cost Assessment Guide: Best Practices for Estimating and 
Managing Program Costs, Exposure Draft, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP] (Washington, D.C.: 
July 2007). Life-cycle costs are the total cost to the government for a 
program over its full life, consisting of research and development, 
production, operations, maintenance, and disposal costs and are helpful 
in assessing whether a system's cost is affordable. 

[9] Originally, MDA defined a block as a specific set of ballistic 
missile defense capabilities that it intended to field in a 2-year time 
period. For example, Block 2004 was defined as specific elements that 
MDA intended to field from January 2004 through December 2005. MDA's 
new block structure defines a block as fielding elements that address 
particular threats. For example, Block 1 is defined as elements to 
provide initial defense of the U.S. from North Korea. 

[10] DOD Directive 5000.1, The Defense Acquisition System (May 12, 
2003); DOD Instruction 5000.2, Operation of the Defense Acquisition 
System (May 12, 2003). The MDA Charter states that the MDA Director 
shall manage BMDS consistent with the principles of this policy. 

[11] DOD uses a variety of terms to refer to many different support 
documents--such as supportability strategy or integrated logistics 
support plans. Throughout this report, we will generically refer to 
these types of documents as "support planning" documents. 

[12] Department of Defense, Office of the Inspector General, 
Acquisition: System Engineering Planning for the Ballistic Missile 
Defense System, D-2006-060 (Washington, D.C.: Mar. 2, 2006). 

[13] Operations and support costs are the resources required to operate 
and support a weapon system and include maintenance of equipment/ 
infrastructure, operations of forces, training and readiness, base 
operations, personnel, and logistics. 

[14] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP]. 

[15] Department of Defense, Missile Defense Agency, Ballistic Missile 
Defense Agency 2007 Transition and Transfer Plan (Washington, D.C.: 
Feb. 4, 2008). 

[16] Due to the confusion over the terms "transition" and "transfer", 
DOD attempted to clarify the distinction in the BMDS 2007 Transition 
and Transfer Plan as explained here. Although the terms have sometimes 
been used interchangeably, throughout this report we use the term 
"transition" to refer to all activities short of a program office 
"transfer", consistent with the distinction made in the 2007 plan. 

[17] Department of Defense Directive 5134.9, Missile Defense Agency, 
(Oct. 9, 2004). 

[18] GAO, Ballistic Missile Defense: Actions Needed to Improve the 
Process for Identifying and Addressing Combatant Command Priorities, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-740] (Washington, 
D.C.: July 31, 2008). 

[19] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-473]. 

[20] GAO, Missile Defense: Actions Needed to Improve Information for 
Supporting Future Key Decisions for Boost and Ascent Phase Elements, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-430] (Washington, 
D.C.: Apr. 17, 2007). 

[21] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-448]. 

[22] Department of Defense, Integrated Program Policy Version 2.0, 
Missile Defense Agency (July 18, 2005); Department of Defense, 
Ballistic Missile Defense Integrated Program Policy Implementation 
Guide Version 2.0, Missile Defense Agency (June 2, 2005). 

[23] Department of Defense, Ballistic Missile Defense System 
Sustainment, MDA Directive 5010.09, Missile Defense Agency, (April 13, 
2006). The MDA sustainment directive lists the four phases as: 
capability-based requirements, programming and planning, program 
execution, and capability-based deployment. 

[24] Department of Defense, Office of the Inspector General, 
Acquisition: System Engineering Planning for the Ballistic Missile 
Defense System, D-2006-060 (Mar. 2, 2006). 

[25] GAO, Results-Oriented Cultures: Implementation Steps to Assist 
Mergers and Organizational Transformations, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-03-669] (Washington, D.C.: July 
2, 2003). 

[26] Department of Defense Directive 5134.9, Missile Defense Agency 
(Oct. 9, 2004). 

[27] GAO, Military Transformation: Additional Actions Needed by U.S. 
Strategic Command to Strengthen Implementation of Its Many Missions and 
New Organization, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-
847] (Washington, D.C.: Sept. 8, 2006) 

[28] MDA and the services' joint effort to estimate operation and 
support costs is separate from MDA's development of cost estimates for 
the BMDS blocks. The block estimates will include research, 
development, and procurement costs only and will not include operation 
and support costs. Also, MDA intends to ask the Cost Analysis 
Improvement Group to independently validate the block estimates. 

[29] Key principles for developing accurate and reliable cost estimates 
are drawn from DOD guidance and our Cost Assessment Guide. DOD, Office 
of the Secretary of Defense, Cost Analysis Improvement Group, Operating 
and Support Cost-Estimating Guide (May 1992 and October 2007); GAO, 
Cost Assessment Guide: Best Practices for Estimating and Managing 
Program Costs, Exposure Draft, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-1134SP] (Washington, D.C. July 2, 2007). 

[30] The Army Cost Review Board is composed of senior executives from 
the Department of the Army. It reviews cost estimates for Army 
acquisition programs in order to recommend an Army cost position to the 
Army acquisition executive. 

[31] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-473]. 

[32] The Defense Acquisition Board is the senior advisory body to the 
Under Secretary of Defense for Acquisition, Technology, and Logistics 
for critical acquisition decisions. It conducts reviews of major 
acquisition programs at program milestones. 

[33] DOD Directive 5000.1, The Defense Acquisition System (May 12, 
2003); DOD Instruction 5000.2, Operation of the Defense Acquisition 
System (May 12, 2003); Office of the Secretary of Defense, Designing 
and Assessing Supportability in DOD Weapon Systems (Oct. 24, 2003); 
DOD's Defense Acquisition Guidebook (December 20, 2004); MDA's 
Integrated Program Policy (July 18, 2005) and associated Ballistic 
Missile Defense Integrated Program Policy Implementation Guide (June 2, 
2005); and MDA Directive 5010.09, Ballistic Missile Defense System 
Sustainment (Apr. 13, 2006). 

[34] Total life-cycle management is the management of all activities 
associated with the acquisition, development, production, fielding, 
sustainment, and disposal of a DOD weapon or system across its life 
cycle. In this engagement, we focused on the planning for fielding and 
sustainment over the expected life of the elements. 

[35] We used the following DOD and GAO sources for compiling the cost 
criteria: DOD, Office of the Secretary of Defense Cost Analysis 
Improvement Group, Operating and Support Cost Estimating Guide, May 
1992 and October 2007; and GAO, Cost Assessment Guide: Best Practices 
for Estimating and Managing Program Costs, Exposure Draft, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-07-1134SP] (Washington, D.C.: 
July 2007). 

[36] In our prior report, we recommended to the Secretary of Defense to 
develop a structure within the FYDP to identify all ballistic missile 
defense operational costs. See GAO, Defense Management: Actions Needed 
to Improve Operational Planning and Visibility of Costs for Ballistic 
Missile Defense, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-
473] (Washington, D.C.: May 31, 2006). 

[End of section] 

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