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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

April 2014: 

Ballistic Missile Defense: 

Actions Needed to Address Implementation Issues and Estimate Long-Term 
Costs for European Capabilities: 

GAO-14-314: 

GAO Highlights: 

Highlights of GAO-14-314, a report to congressional requesters. 

Why GAO Did This Study: 

Since 2002, DOD has spent over $98 billion developing a ballistic 
missile defense system to protect the United States, U.S. forces, and 
allies against inbound threat missiles. In December 2011, DOD deployed 
the initial phase of a revised approach for Europe, with increased 
capabilities to be deployed in later phases. GAO has reported on 
potential risks to DOD's implementation caused by the lack of a 
coordinated management approach and an absence of life-cycle cost
estimates. Given DOD's BMD investment and revised approach, GAO was 
asked to review EPAA's implementation. GAO evaluated the extent to 
which DOD (1) identified and planned to resolve implementation issues 
before deploying BMD capabilities to Europe; and (2) estimated the 
long-term costs to operate and support BMD elements in Europe. GAO 
reviewed DOD instructions, manuals, and other documents on the 
acceptance process and the status of operating and support cost 
estimates that have been developed to-date, and interviewed cognizant 
officials. 

What GAO Found: 

The Department of Defense (DOD) met the presidentially announced time 
frame to deploy initial ballistic missile defense (BMD) capabilities 
in Europe under the European Phased Adaptive Approach (EPAA) but did 
not fully identify and plan to resolve implementation issues before 
deployment. As a result, DOD experienced implementation issues, such 
as incomplete construction of housing facilities for soldiers arriving 
at the EPAA radar site in Turkey and incomplete implementing 
arrangements defining how to operate with allies when certain BMD 
elements arrived in the host country. U.S. Strategic Command, in 
coordination with other combatant commands, developed criteria to assess
whether a BMD capability is ready for operational use to ensure that BMD
capabilities can be used as intended when they are delivered. However, 
the assessment criteria used during this process focused on 
effectiveness, suitability, and interoperability areas—-such as 
whether BMD elements can work together to track ballistic missile 
threats—-and did not explicitly require DOD to comprehensively 
identify and plan to resolve implementation issues prior to
deploying these capabilities. DOD plans to continue to use its 
existing process to accept BMD capabilities planned for Europe in the 
future. Without identifying and planning to resolve implementation 
issues before deployment, DOD risks continuing to encounter 
implementation issues after it deploys additional BMD capabilities in 
Europe, which may lead to significant delays and inefficiencies. 

DOD has estimated the long-term operating and support cost estimates 
for some but not all BMD elements in Europe, and existing estimates 
could change. Specifically, initial estimates indicate these costs 
could total several billion dollars over the elements' lifetime, but 
key decisions that have not been made are likely to change these 
estimates. Also, DOD has not developed a comprehensive estimate for a 
key element—Aegis Ashore. In prior work developing cost-estimating 
best practices, GAO concluded that cost estimates can assist decision 
makers in budget development and are necessary for evaluating resource
requirements at key decision points and effectively allocating 
resources. Office of Management and Budget guidance also emphasizes 
that agencies should plan for operations and maintenance of capital 
assets. In 2012, the Army and the Missile Defense Agency (MDA) 
estimated the lifetime operating and support costs for two BMD 
elements, a forward-based radar and terminal high-altitude air
defense batteries. However, DOD has not completed business-case 
analyses for them, which would underpin a decision on long-term 
support strategies, and has not decided where to station the terminal-
defense battery. In addition, MDA and the Navy have separately begun 
to identify some costs but have not developed a comprehensive joint 
estimate of lifetime operating and support costs for the two planned 
Aegis Ashore sites. Although MDA and the services agreed to jointly
develop estimates of lifetime operating and support costs, there is no 
explicit requirement to complete business-case analyses to support a 
decision on long-term product support, and jointly develop cost 
estimates, before deploying BMD elements in Europe. However, without 
completed business-case analyses and up-to-date operating and support 
cost estimates, DOD and decision makers are limited in their ability 
to develop sound budgets and identify the resources needed over the 
long term to operate and support BMD elements in Europe. 

What GAO Recommends: 

GAO recommends that DOD identify and plan to resolve implementation
issues prior to deploying and operating BMD elements and require and 
set a deadline for completing business-case analyses and joint cost 
estimates for all BMD elements in Europe. DOD agreed with three 
recommendations and partially agreed with one, expressing concern 
about the proper entities for resolving implementation issues. GAO
believes that the recommendation can be implemented through 
collaboration as discussed further in this report. 

View [hyperlink, http://www.gao.gov/products/GAO-14-314]. For more 
information, contact John Pendleton at (404) 679-1816 or 
pendletonj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

DOD Met EPAA Phase One Deployment Time Frame, but Its Warfighter 
Acceptance Process Does Not Fully Identify and Plan to Resolve 
Implementation Issues: 

DOD Lacks a Complete Understanding of the Long-Term Operating and 
Support Costs for BMD Elements in Europe: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: U.S. Ballistic Missile Defense (BMD) Capabilities 
Available by European Phased Adaptive Approach (EPAA) Phase: 

Appendix III: Key Department of Defense (DOD) Stakeholders Involved in 
Planning and Implementing the European Phased Adaptive Approach: 

Appendix IV: Comments from the Department of Defense: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Figures: 

Figure 1: European Phased Adaptive Approach Time Frames and Elements: 

Figure 2: U.S. Ballistic Missile Defense (BMD) Capabilities Available 
by European Phased Adaptive Approach (EPAA) Phase: 

Abbreviations: 

BMD: Ballistic Missile Defense: 

DOD: Department of Defense: 

EPAA: European Phased Adaptive Approach: 

MDA: Missile Defense Agency: 

NATO: North Atlantic Treaty Organization: 

THAAD: Terminal High Altitude Area Defense: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

April 11, 2014: 

The Honorable Mike Rogers: 
Chairman: 
Subcommittee on Strategic Forces: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Mike Turner: 
House of Representatives: 

Since 2002, the Department of Defense (DOD) has spent over $98 billion 
to develop a ballistic missile defense (BMD) system intended to defend 
the United States, U.S. forces, and allies around the world against 
inbound threat missiles. In 2009, the President announced a revised 
approach for BMD in Europe called the European Phased Adaptive 
Approach (EPAA). This approach is to include ships, land-based radars 
and interceptors, and a communications network, to be implemented in 
phases of increasing capabilities beginning in 2011. EPAA is intended 
to be a flexible and cost-effective way to address short-, medium-, 
and intermediate-range ballistic missile threats from Iran. EPAA 
replaced a prior plan to defend both Europe and the United States from 
longer-range ballistic missiles by deploying a radar in the Czech 
Republic and ground-based intercontinental missile interceptors in 
Poland. 

We have issued numerous reports over the last 10 years on development, 
acquisition, and plans for operating ballistic missile defense 
capabilities. In 2010 and 2011, we reported that DOD's efforts to 
establish EPAA lacked clear guidance and an integrated schedule, which 
could result in decreased performance and increased costs, and that 
DOD had not fully implemented a management process to synchronize EPAA 
acquisition activities and ensure transparency and accountability. 
[Footnote 1] DOD generally agreed with our recommendations to provide 
guidance on EPAA that describes desired end states, develop an 
integrated EPAA schedule, and adopt BMD performance metrics for 
durability and effectiveness, but has not yet taken any actions. Given 
the resources dedicated to BMD and the revised approach, you asked us 
to review EPAA's implementation. For this report, we assessed the 
extent to which DOD has (1) identified and planned to resolve 
implementation issues before deploying BMD capabilities to Europe; and 
(2) estimated the long-term costs to operate and support BMD elements 
in Europe. 

To assess the extent to which DOD has identified and planned to 
resolve implementation issues before deploying BMD capabilities to 
Europe, we reviewed the U.S. Strategic Command document titled 
Ballistic Missile Defense System (BMDS) Warfighter Capability 
Acceptance.[Footnote 2] This document described the goal of the 
warfighter acceptance process, which is, in essence, to ensure that 
capabilities can be used as intended when they are delivered, and 
culminates in formal acceptance of BMD capabilities by U.S. Strategic 
Command. We also reviewed key documents, such as the Chairman of the 
Joint Chiefs of Staff Instruction titled Policy Guidance for Ballistic 
Missile Defense Operations and the Joint Staff Publication on 
Countering Air and Missile Threats, which describe DOD's BMD guidance 
and responsibilities of various organizations. We also met with 
officials from the Office of the Secretary of Defense, the Joint 
Staff, U.S. European Command and its military service components, and 
U.S. Strategic Command to understand how DOD's acceptance process was 
implemented. In addition, we reviewed after action-reports and 
briefings from the Army and Air Force that described implementation 
challenges experienced during the deployment of BMD elements to Europe 
and other regions, and provided an assessment of lessons learned for 
future BMD element deployments. 

To assess the extent to which DOD has estimated the long-term costs to 
operate and support BMD elements in Europe, we first reviewed 
agreements and their annexes between the Missile Defense Agency (MDA) 
and the Army and between MDA and the Navy regarding how these 
organizations would work together to manage the BMD elements, 
including information on how they would jointly develop cost 
estimates. To determine the general purpose for estimating long-term 
costs, we identified and reviewed documents containing best practices 
for determining high-quality cost estimates from the Office of 
Management and Budget and the GAO Cost Estimating and Assessment 
Guide. Specifically, we determined that cost estimates can assist 
decision makers in budget development and are necessary for evaluating 
resource requirements at key decision points and effectively 
allocating resources. In addition, we reviewed the Army's regulation 
on Integrated Logistic Support, which includes guidance on business-
case analysis, and is referenced in the agreement annexes between MDA 
and the Army, to identify DOD criteria for conducting business-case 
analyses to assess alternatives for providing long-term support. We 
then reviewed documentation of estimates developed by MDA and the 
services for BMD elements designated for EPAA, as well as elements 
that DOD could deploy to support EPAA. Finally, we met with DOD 
officials from MDA, and various Navy, Army, and Air Force offices, to 
identify key decisions that could affect the estimates. 

We conducted this performance audit from December 2012 to April 2014 
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. Further 
details on our objectives, scope, and methodology can be found in 
appendix I. 

Background: 

EPAA Capabilities and Time Frames: 

In September 2009, the President announced a revised approach to 
missile defense in Europe called EPAA, which consists of phases of 
increasing capability to be deployed in the 2011, 2015, and 2018 time 
frames. EPAA serves as the U.S. contribution to the North Atlantic 
Treaty Organization's (NATO) mission to protect alliance populations, 
territory, and forces against ballistic missile threats. As originally 
announced, EPAA included a fourth phase that was expected to add U.S. 
homeland defense and expanded regional defense in the 2020 time frame. 
In March 2013, the Secretary of Defense canceled Phase Four, due, in 
part, to development delays with a key element of this phase. 

In 2011, DOD deployed BMD elements to meet the President's announced 
time frame for the first phase of EPAA. This provided capability 
against short-and medium-range threats and included: Aegis BMD-capable 
ships with the Standard Missile-3 Block IA interceptor stationed in 
the Mediterranean; an Army Navy/Transportable Radar that is forward-
based in Turkey; and a Command, Control, Battle Management and 
Communications system deployed to an Air Force base in Germany. 
[Footnote 3] DOD is in the process of preparing for the second phase 
of EPAA scheduled for implementation in December 2015. The second 
phase will include Aegis Ashore based in Romania to provide additional 
capability against short- and medium-range threats with a more 
advanced interceptor.[Footnote 4] The third phase of EPAA is scheduled 
for late 2018 and will include Aegis Ashore based in Poland to provide 
capability against medium- and intermediate-range threats. 
Additionally, although Patriot and Terminal High Altitude Area Defense 
(THAAD) batteries were not BMD elements originally announced as part 
of the revised approach to missile defense in Europe, DOD officials 
stated that both elements could deploy to support EPAA as needed, 
independent of the EPAA phases.[Footnote 5] Figure 1 summarizes DOD's 
proposed time frames and BMD elements for the three phases of EPAA. 
Figure 2 graphically displays increasing U.S. BMD capabilities 
introduced in each EPAA phase. 

Figure 1: European Phased Adaptive Approach Time Frames and Elements: 

[Refer to PDF for image: illustration with 11 photographs] 

Phase I (December 2011): 
* Aegis BMD with Standard Missile-3 Block IA to intercept short- and 
medium-range threats; 
* Forward-based Army Navy/Transportable Radar; 
* Command, Control, Battle Management, and Communications Air 
Operations Center Ramstein. 

Phase II (December 2015): 
* Aegis BMD with Standard Missile-3 Block IB to intercept short- and 
medium-range threats; 
* Aegis Ashore, Romania; 
* Command, Control, Battle Management, and Communications updates. 

Phase III (Late 2018): 
* Aegis BMD with Standard Missile-3 Block IIA to intercept medium- and 
intermediate-range threats; 
* Aegis Ashore, Poland and Romania; 
* Command, Control, Battle Management, and Communications updates. 

Elements that could be deployed to support EPAA: 
* Patriot; 
* Terminal High Altitude Area Defense (THAAD). 

BMD: Ballistic missile defense; 
EPAA: European Phased Adaptive Approach. 

Source: GAO analysis of DOD documents (data); Missile Defense Agency 
and U.S. Air Force (images). 

[End of figure] 

Figure 2: U.S. Ballistic Missile Defense (BMD) Capabilities Available 
by European Phased Adaptive Approach (EPAA) Phase: 

[Refer to PDF for image: interactive map] 

Interactivity instructions: Roll over a phase to see more information. 
See appendix II for the noninteractive, printer-friendly version. 

Source: GAO analysis of DOD documents. 

[End of figure] 

BMD and EPAA Roles and Responsibilities: 

A number of stakeholders within DOD have roles and responsibilities in 
developing, building, deploying, and managing resources for BMD, 
including MDA, combatant commands, the services, and other 
organizations. MDA is responsible for the development, acquisition, 
and testing of BMD system elements in close collaboration with the 
warfighter community and testing organizations.[Footnote 6] The 
combatant commands mainly involved in EPAA implementation are U.S. 
Strategic Command and U.S. European Command. U.S. Strategic Command's 
responsibilities include synchronizing planning for global missile 
defense in coordination with other combatant commands, the services, 
MDA, and appropriate agencies, while U.S. European Command has 
operational control over BMD elements located within its area of 
responsibility and collaborates with the services that would employ 
the BMD elements during combat. See appendix III for a summary of key 
stakeholders across DOD that are involved in the implementation of 
EPAA. 

Our Prior Work on BMD: 

In previous reports on BMD, we have identified challenges associated 
with MDA's BMD efforts and DOD's broader approach to BMD planning, 
implementation, and oversight. In an April 2013 report, we found that 
MDA's cost baselines were not useful for decision makers to gauge 
progress because they did not include operating and support costs from 
the military services and thus were not sufficiently comprehensive. 
[Footnote 7] Although MDA reports some operating and support costs in 
its annual accountability report, we have found that this report does 
not include services' costs.[Footnote 8] DOD partially agreed with our 
recommendation to include in its resource baseline cost estimates all 
life-cycle costs including operating and support costs. Subsequently, 
as we found during this review, MDA is working with the services to 
jointly develop estimates of operating and support costs for two BMD 
elements. Further, we reported in 2011 that DOD had not developed a 
life-cycle cost estimate for BMD in Europe because the department 
considers EPAA an approach--not a program--that is flexible and would 
change over time.[Footnote 9] At that time, we recommended that DOD 
develop an EPAA life-cycle cost estimate which would allow the 
department to assess whether its plans were affordable. DOD responded 
that a more-effective approach would be to prepare element-specific 
cost estimates.[Footnote 10] 

In a January 2011 report, we reported that, though DOD initiated 
multiple simultaneous efforts to implement EPAA, it faced key 
management challenges that could result in inefficient planning and 
execution, limited oversight, and increased cost and performance 
risks. We also reported that DOD faced planning challenges because the 
BMD system's desired performance was not defined using operationally 
relevant quantifiable metrics--such as how long and how well it can 
defend--that would provide the combatant commands with needed 
visibility into the operational capabilities and limitations of the 
BMD system they intended to employ.[Footnote 11] As noted earlier, DOD 
generally agreed with our recommendations to provide guidance on EPAA 
that describes desired end states, develop an integrated EPAA 
schedule, and adopt BMD performance metrics for durability and 
effectiveness but to date has not taken any action. In a September 
2009 report, DOD generally agreed with our recommendations to perform 
a comprehensive analysis identifying its requirements for BMD elements 
and require the establishment of operational units before making 
elements available for use.[Footnote 12] In response, DOD completed an 
analysis of BMD requirements which, according to DOD officials, 
informed the Army's process for fielding BMD elements with operational 
units. For additional GAO reports on BMD, see the Related GAO Products 
section at the end of this report. 

DOD Met EPAA Phase One Deployment Time Frame, but Its Warfighter 
Acceptance Process Does Not Fully Identify and Plan to Resolve 
Implementation Issues: 

DOD met the presidentially announced time frame to deploy EPAA Phase 
One capabilities to Europe when DOD positioned EPAA elements in the 
region, and MDA declared EPAA Phase One architecture to be technically 
capable in December 2011.[Footnote 13] According to DOD officials, the 
BMD capabilities were in place and could have been used if needed. 
U.S. Strategic Command, through its warfighter operational readiness 
and acceptance process, used an established set of criteria to assess 
EPAA Phase One capabilities and formally accepted the EPAA Phase One 
architecture into the global BMD system in April 2012. However, DOD 
experienced implementation issues deploying BMD capabilities in 
Europe, such as incomplete construction of infrastructure, including 
housing and dining facilities, for soldiers arriving at the EPAA 
forward-based radar site and incomplete implementing arrangements 
defining how DOD would operate with allies when certain BMD elements 
arrived in the host country.[Footnote 14] DOD's existing warfighter 
acceptance process does not explicitly require the combatant commands, 
the services, and MDA to comprehensively identify and develop a plan 
to resolve such issues before deploying BMD capabilities. Without 
taking steps to resolve implementation issues prior to deployment, DOD 
risks encountering similar challenges as it deploys additional BMD 
capabilities to Europe. 

DOD Used Its Warfighter Acceptance Process and Criteria to Assess EPAA 
Phase One Capabilities: 

DOD's warfighter acceptance process and criteria were used to accept 
EPAA Phase One capabilities. The manual guiding the process for 
warfighter acceptance of BMD capabilities indicates that the end state 
of acceptance is crew knowledge and doctrine, tactics, techniques, and 
procedures that reflect the reality of the fielded system or ensure 
that the warfighter can fight with and optimize MDA-delivered BMD 
capabilities.[Footnote 15] In essence, the goal of the warfighter 
acceptance process is to ensure that capabilities can be used as 
intended when they are delivered. This process--separate from but a 
companion to MDA's process for technical capability declaration 
[Footnote 16]--informs MDA's testing so that the warfighter 
understands the elements' capabilities and limitations and can more 
effectively employ BMD capabilities. In addition, the U.S. Strategic 
Command, in coordination with other combatant commands, develops 
criteria to assist in the determination of whether to officially 
accept an element for operational use by the combatant commands. 
[Footnote 17] The criteria used during the warfighter acceptance 
process focuses primarily on areas such as effectiveness, suitability, 
and interoperability.[Footnote 18] For example, one of the acceptance 
criteria used to assess initial EPAA capabilities was the extent to 
which the forward-based radar[Footnote 19] and Aegis BMD ship were 
capable of searching for and tracking ballistic missile threats. By 
comparing these acceptance criteria against BMD test results, U.S. 
European Command and the services were able to better understand the 
capabilities, limitations, and risks of initial EPAA BMD elements and 
developed their plans, tactics, and procedures accordingly. 

In addition to using acceptance criteria, U.S. European Command 
conducted a separate BMD exercise in Europe with servicemembers 
operating actual BMD elements to demonstrate the performance of 
initial EPAA capabilities within the region. Using the results, U.S. 
European Command and U.S. Strategic Command coordinated to identify 
technical improvements that could be made, and U.S. Strategic Command 
accepted the EPAA Phase One architecture into the global BMD system in 
April 2012.[Footnote 20] After acceptance, U.S. European Command also 
conducted a subsequent BMD exercise in May 2013 with U.S. and NATO 
servicemembers to demonstrate interoperability of initial EPAA 
capabilities with NATO BMD capabilities. 

DOD's Warfighter Acceptance Process Did Not Fully Identify and Resolve 
Warfighter Implementation Issues before Deploying BMD Elements: 

As discussed above, DOD used its warfighter acceptance process to 
assess BMD elements dedicated to Phase One of EPAA. However, though 
the goal of the warfighter acceptance process is, in essence, to 
ensure that capabilities can be used as intended when they are 
delivered, this process did not explicitly require the combatant 
commands, the services, and MDA to comprehensively identify and 
develop plans for resolving various implementation issues prior to 
deploying these and other supporting elements to Europe. As a result, 
DOD experienced three implementation issues related to deploying BMD 
capabilities to Europe. These included: (1) incomplete infrastructure, 
such as housing and dining facilities, for soldiers arriving at the 
forward-based radar site in Turkey; (2) lack of defined policies and 
procedures for sharing BMD radar data across geographic combatant 
commands; (3) and incomplete implementing arrangements and tactics, 
techniques, and procedures with allies. 

* Incomplete facilities in Turkey: DOD deployed the forward-based 
radar to Turkey in December 2011 before completing construction of 
infrastructure, such as permanent housing, dining, and other 
facilities for soldiers arriving on the site. According to officials, 
construction could not be completed prior to deploying the forward-
based radar due to compressed deadlines in order to meet the 
presidentially announced time frame. As a result, Army officials 
stated that soldiers arrived at the remote mountain-top radar site in 
winter conditions, and their tent-based expeditionary facilities--
though climate controlled and equipped with latrines, showers, and 
other basic facilities--were initially unable to withstand the 
conditions. Also, at the time, roads leading to the nearest town were 
not well-maintained, which created safety challenges and made access 
to nearby services less efficient. The Army made some improvements 
after the 2011-2012 winter season, such as replacing the expeditionary 
facilities with those typically used in Alaska in order to better suit 
the wintery conditions, but construction of longer-term infrastructure 
will not begin until mid-2014. Until the permanent facilities are 
completed, soldiers deployed to the site may continue to face 
difficult conditions. Further, without a process that accounts for 
implementation issues such as this, DOD may encounter similar 
challenges as it deploys additional capabilities to the region. 

* Lack of defined policies and procedures for sharing BMD radar data 
across geographic combatant commands: Sharing BMD element data, such 
as radar data, can improve missile defense performance, but DOD 
accepted its most-recently deployed forward-based radar before 
finalizing policies and procedures that address potential overlapping 
operational priorities across geographic combatant commands. 
Subsequent to its deployment of a forward-based radar for EPAA in 
2011, DOD deployed another forward-based radar in the operational area 
of U.S. Central Command in 2013. DOD had begun discussions on the 
benefits and drawbacks of sharing radar data, but the most-recent 
deployment proceeded without a decision for how to address these 
issues, even though both regions face a common threat. According to 
officials, the first priority for deploying each radar was to support 
separate missions in their respective areas of responsibility, and a 
decision to use one radar to support the other radar was a secondary 
priority and thus did not require resolution prior to deployment. 
However, officials also stated that sharing radar data between the 
recently deployed radar with the EPAA forward-based radar could 
benefit missile defense in Europe and potentially increase operational 
effectiveness across both geographic combatant commands. DOD guidance 
states that U.S. Strategic Command is responsible for synchronizing 
global missile defense planning in coordination with the combatant 
commands, services, MDA, and appropriate agencies.[Footnote 21] 
Guidance further indicates that U.S. Strategic Command, working with 
the geographic combatant commands, integrates and synchronizes various 
BMD elements, such as radars.[Footnote 22] However, the warfighter 
acceptance process did not explicitly require a comprehensive 
assessment of whether policies and procedures for sharing BMD radar 
data are defined. The combatant commands, including U.S. European 
Command, have made progress on addressing this implementation issue. 
For example, since deployment, U.S. European Command, in coordination 
with U.S. Strategic Command, has requested technical analysis from MDA 
in order to determine the extent to which the radars can share 
information. In addition to the technical analysis, U.S. European 
Command officials stated that DOD has held several senior-level 
meetings to discuss policies and procedures for addressing potential 
overlapping operational priorities and to discuss possible 
consequences that might occur if the radars are integrated. As a 
result of not completing such policies and procedures prior to 
accepting BMD capabilities, DOD continues to operate these radars 
separately and may face difficulty in sharing the radar data across 
geographic combatant commands, thus affecting efficient BMD operations 
in Europe. 

* Incomplete implementing arrangements and procedures for working with 
allies: DOD's experience delivering Patriot batteries to Turkey in 
early 2013 demonstrates some of the difficulties the warfighter could 
encounter by not finalizing implementing arrangements and tactics, 
techniques, and procedures with allies prior to deployment. DOD 
deployed Patriot batteries to Turkey as part of a NATO mission to 
support the country's air defense, but this action was not part of 
EPAA's first phase. However, U.S. European Command officials indicated 
that it shaped this deployment to be similar to future U.S. 
deployments of Patriot batteries to Europe, and interoperability with 
NATO is a key aspect of EPAA. However, according to Army officials, 
host-nation implementing arrangements had not been finalized before 
the Patriot batteries arrived in Turkey, resulting in the equipment 
remaining at an airfield for several weeks before it could be deployed 
for operations. In addition, according to Army officials, foreign 
disclosure issues were not resolved by the time Patriot batteries 
arrived in Turkey, and initially there were limitations on what 
intelligence information could be shared with non-U.S. forces. 
Further, according to Army officials, soldiers had to receive 
supplemental training to perform the NATO mission, including using 
NATO tactics, techniques, and procedures, which can differ from those 
of the United States. According to officials, DOD was aware of these 
issues but could not address them prior to deploying Patriot batteries 
to Turkey due to the need to address threats there. Further, officials 
stated they must also adhere to certain political and host-nation 
decisions that can affect their ability to address all implementation 
issues before deployment. Nonetheless, the warfighter acceptance 
process did not explicitly require a comprehensive assessment of 
whether these implementing arrangements and procedures were completed 
prior to deployment. By not completing implementing arrangements and 
procedures for how to work with allies before deployment, Army 
officials stated that they spent extensive time working with allies to 
resolve these implementation issues, which put a strain on Army's 
limited existing resources. 

DOD's Process for Accepting New BMD Capabilities Could Result in 
Future Implementation Challenges: 

DOD recognizes that it has encountered previous implementation 
challenges related to deploying BMD capabilities to Europe and is 
taking steps to address them, but these efforts may not prevent future 
problems. According to U.S. European Command officials, one step they 
have taken is to establish a synchronization board that tracks EPAA 
implementation, but this board has focused more on Aegis Ashore than 
on potential Patriot or THAAD battery deployments. Additionally, the 
Navy, in coordination with MDA and U.S. European Command, is tracking 
the development and deployment of the Aegis Ashore weapon systems and 
facilities. However, these efforts are not part of DOD's warfighter 
acceptance process, which means that issues raised through these 
efforts would not necessarily be addressed prior to accepting or 
deploying additional EPAA capabilities. Also, the acceptance criteria 
used to assess BMD elements in areas such as effectiveness, 
suitability, and interoperability do not include a detailed 
identification of potential implementation issues that may affect 
operational performance. Further, DOD officials said that they plan to 
use the existing acceptance process to accept and deploy future EPAA 
capabilities, but may not for other BMD elements that could support 
BMD operations in Europe, such as THAAD. In using the existing 
process, which does not explicitly require a comprehensive assessment 
of various implementation issues prior to deployment, DOD may deploy 
future BMD capabilities without identifying or developing a plan to 
resolve implementation issues, such as incomplete host-nation 
implementing arrangements for Aegis Ashore radar operations. 

One of the more-difficult challenges facing DOD is completing 
implementing arrangements for access to frequencies that Aegis Ashore 
is designed to use. We have previously reported on issues related to 
frequency access for Aegis Ashore.[Footnote 23] The two Aegis Ashore 
elements dedicated to EPAA Phases Two and Three--which are expected to 
operate in Romania and Poland by 2015 and 2018 respectively--have 
radars that DOD has designed to use a certain range of frequencies for 
full operations, including maintenance, periodic testing of equipment, 
and training of crews. However, according to U.S. European Command 
officials, some of the frequencies Aegis Ashore is designed to use are 
reserved for civil use, such as commercial and cell phone services. 
[Footnote 24] Accordingly, U.S. European Command officials stated that 
resolving frequency access issues and completing the implementing 
arrangements for U.S. radars takes time and must be initiated early in 
the planning process to allow time for completion before DOD deploys 
Aegis Ashore in Romania. According to U.S. European Command officials, 
in 2013, DOD and Romanian officials worked together to agree on 
frequencies available for Aegis Ashore operations so that both the 
radar and the commercial and cell phone services can coexist, with 
restrictions, by early 2015. In Poland, however, resolving frequency 
range access issues is more complex, according to DOD officials. 
Specifically, the frequency range is more congested in central Europe, 
which increases the potential for cross-border interference with 
neighboring countries. In addition, according to U.S. European Command 
officials, Poland is in the process of issuing new commercial licenses 
for frequencies within its civil frequency range that overlap with 
those Aegis Ashore is designed to use. This process may affect the 
time frame for resolving Aegis Ashore's access to these frequencies. 
DOD officials stated that they plan to work closely with their Polish 
counterparts to resolve these issues prior to the planned deployment 
of Aegis Ashore in 2018. According to DOD officials, construction of 
Aegis Ashore can proceed without these issues being resolved. However, 
the extent to which the radar could be used to train, maintain, and 
test the capabilities may be limited. As a result, the current 
warfighter acceptance process, with its focus on meeting operational 
needs based on criteria that do not comprehensively include potential 
implementation issues, may not ensure that radar capabilities can be 
fully used once deployed. 

In addition, DOD may choose to forward station or deploy Patriot and 
THAAD batteries to supplement EPAA or NATO operations. U.S. Strategic 
Command officials stated that the warfighter acceptance process will 
not be applied to Patriot batteries, and they have not yet decided 
whether the process will be applied to THAAD batteries. Nonetheless, 
it is important that the warfighter be prepared to operate the 
batteries and that implementing arrangements be in place. As with the 
Aegis Ashore radar, if DOD forward-stationed a THAAD battery to 
Europe, it may need to negotiate implementing arrangements for the 
THAAD radar to access frequency ranges for periodic testing, 
maintenance, and training to support BMD operations. Also, if Patriot 
batteries were sent to Europe, DOD may need to negotiate implementing 
arrangements and coordinate tactics, techniques, and procedures with 
allies as it did for the Patriot deployment to Turkey. Since DOD's 
experience has shown that it may require considerable time in order to 
develop necessary implementing arrangements, it would be important for 
these types of issues to be identified as soon as possible. Unless DOD 
comprehensively identifies and develops a plan to resolve 
implementation issues for elements that may deploy to support BMD 
operations in Europe, DOD risks experiencing challenges that may 
affect the warfighter's ability to fully utilize the systems as 
designed. 

DOD has encountered various implementation issues when deploying BMD 
capabilities in Europe and risks encountering similar issues in the 
future, because there is no explicit requirement within the warfighter 
acceptance process to ensure that these types of issues are 
comprehensively identified before the capabilities are deployed. The 
current warfighter acceptance process does not produce an integrated, 
holistic identification of implementation issues and, as a result, DOD 
does not identify and develop a plan to resolve them before BMD 
capabilities are deployed. Instead, responsibilities are diffused 
across several organizations. For example, U.S. Strategic Command 
officials view their role as ensuring that EPAA capabilities function 
within the BMD system worldwide, which includes BMD elements that are 
not among those dedicated to EPAA. U.S. European Command is 
responsible for conducting BMD operations in its area of 
responsibility. The services operate individual BMD elements and 
provide the manpower and training necessary to do so. Although U.S. 
Strategic Command considers input from U.S. European Command and the 
services when defining acceptance criteria, the criteria used to-date 
do not fully assess the extent to which implementation issues may 
affect operational performance, for instance by limiting the available 
frequencies for radar use in a particular country or region. As a 
result, DOD will likely continue to face implementation issues unless 
a more holistic, integrated view is taken to identify and plan to 
resolve these issues before BMD capabilities are deployed in Europe, 
which may result in less-efficient BMD operations. 

DOD Lacks a Complete Understanding of the Long-Term Operating and 
Support Costs for BMD Elements in Europe: 

DOD has estimated the long-term operating and support costs for some, 
but not all, BMD elements in Europe. Initial estimates indicate that 
these costs could total several billion dollars over the elements' 
lifetime, but these estimates do not provide a complete picture of the 
likely costs. For example, key decisions that have not yet been made--
such as what long-term support strategies to adopt and where to 
forward-station some BMD elements--are likely to change the estimates 
for THAAD and the forward-based radar. In addition, DOD has not 
developed a comprehensive, joint estimate of operating and support 
costs for the two planned Aegis Ashore sites. The lack of complete, 
long-term operating and support cost estimates for the BMD elements 
could hinder DOD's ability to develop budgets and allocate resources 
for BMD operations in Europe. 

Initial Operating and Support Cost Estimates for THAAD and the Forward-
Based Radar Are Likely to Change: 

DOD developed initial estimates of operating and support costs for 
THAAD and the forward-based radar--both of which are ultimately to be 
managed by the Army--but these estimates are likely to change as these 
programs mature and DOD completes business-case analyses[Footnote 25] 
and makes key decisions, such as what their long-term support 
strategies will be and where to forward-station these elements. The 
Army and MDA have signed a memorandum of agreement and several annexes 
since 2009 outlining how the two organizations are to manage 
responsibilities for BMD elements, which includes jointly estimating 
operating and support costs.[Footnote 26] In addition, the element-
specific annexes direct the development of business-case analyses as 
part of determining the long-term support strategy for these elements. 
[Footnote 27] Further, Army guidance, which is referenced in the 
annexes, similarly directs the use of business-case analyses as part 
of selecting the product-support strategy.[Footnote 28] 

In January 2012, the Army and MDA estimated that the EPAA forward-
based radar would cost $61 million in fiscal year 2014 and $1.2 
billion in then-year dollars over its 20-year life. However, this 
estimate assumes continued contractor support throughout the life of 
the forward-based radar. Even though forward-based radars have been 
deployed since 2006, DOD has not yet completed a business-case 
analysis as part of determining the long-term support as described in 
an Army regulation and in the forward-based radar annex, which is to 
include an assessment of alternatives to contractor-provided support 
over the lifetime of this element. In addition, the Army has made 
changes to reduce operating and support costs for the forward-based 
radar, but these changes are not reflected in the $1.2 billion 
lifetime cost estimate previously cited. Army officials stated that 
the Army and MDA met in November 2013 to begin developing the business-
case analysis for the radar, which they intend to complete in fiscal 
year 2015. However, the annex does not include an explicit requirement 
that this analysis be completed by a specific time. Also, MDA and Army 
officials said that completion of this analysis to inform a decision 
on a long-term support strategy will, in turn, provide information for 
updating the operating and support cost estimates for the forward-
based radar. 

In December 2012, the Army and MDA estimated operating and support 
costs for six THAAD batteries for 20 years, totaling $6.5 billion in 
then-year dollars.[Footnote 29] This estimate also assumes continued 
contractor support throughout the life of THAAD. Even though the first 
two THAAD batteries have been available since early 2012, DOD has not 
yet completed a business-case analysis as part of determining the long-
term support strategy, as provided for in the annex, which is to 
include an assessment of alternatives to contractor-provided support 
over the lifetime of THAAD. Specifically, MDA conducted an initial 
THAAD business-case analysis, which it provided to the Army for 
comment. The Army did not agree with the analysis because it was not 
done in accordance with Army regulations. As the Army and MDA work 
through these disagreements, the THAAD business-case analysis remains 
incomplete as of December 2013, and there is no firm deadline to 
complete the analysis. Completion of this analysis to inform a 
decision on a long-term support strategy will, in turn, provide 
information for updating the operating and support cost estimates for 
the THAAD. 

In addition, the estimate of operating and support costs for THAAD 
assumed that all six batteries would be located in the United States. 
However, DOD officials stated that they are examining options for 
forward-stationing some THAAD batteries overseas. Doing so would 
likely increase operating and support costs due to higher operational 
tempo, contractors that are deployed with the system, additional 
needed security, life-support facilities such as barracks and a mess 
hall, and site preparation for the equipment. For example, MDA 
recently estimated that operating and support costs for one THAAD 
battery in Guam could be $11 million higher annually than if the 
battery was located in the continental United States. However, this 
estimate does not include costs for military personnel, fuel, site 
activation, transportation, or some contractor costs. Further, costs 
could be even higher if an element is located at an austere location 
due to additional costs for site preparation, security, 
transportation, and some contractor costs. 

DOD Has Not Developed a Comprehensive Joint Estimate of Operating and 
Support Costs for Aegis Ashore: 

MDA and the Navy have not developed a comprehensive, joint estimate of 
the operating and support costs for the two European Aegis Ashore 
sites over their expected 25-year life span, and it is unclear when 
such an estimate will be completed. The Navy and MDA completed an 
annex to a memorandum of agreement in August 2012 describing how they 
are to jointly manage Aegis Ashore, which notes that the two 
organizations will collaborate on cost estimating and budget planning. 
[Footnote 30] Under the annex, MDA responsibilities include providing 
funding for construction of certain mission-essential facilities and 
the operations and support of aspects of the Aegis weapon system 
through fiscal year 2017. The Navy responsibilities include providing 
funding for construction and operations and sustainment of housing and 
quality-of-life facilities, as well as the training facility, which is 
located in the United States. The Navy will be responsible for all 
Aegis Ashore operating and support costs at the two planned sites 
beginning in fiscal year 2018. Although the Navy and MDA have agreed 
to jointly develop cost estimates, and officials from the Navy and MDA 
have stated these estimates will focus on operating and support costs, 
their August 2012 memorandum of agreement does not include a clear 
deadline for first completing a joint cost estimate.[Footnote 31] This 
estimate would enable MDA and the Navy to more-accurately budget for 
their respective share of the costs. 

Although MDA and the Navy have not developed a comprehensive joint 
estimate, they have individually begun to identify some costs. 
Specifically, the Navy has estimated $155 million will be required for 
manning, operating, and supporting the base facilities from fiscal 
year 2014 through fiscal year 2018. MDA has reported in its 2013 
Ballistic Missile Defense System Accountability Report that operating 
and support costs for the Aegis Ashore test facility and the two 
European sites may total $82 million through fiscal year 2018, but 
this does not include operating and support costs for the entire 
expected 25-year life. In addition, MDA officials stated that their 
estimate does not include costs for base facilities, military 
personnel, or other Navy costs and, therefore, cautioned against 
combining both Navy and MDA's individual estimates in order to 
approximate total Aegis Ashore operating and support costs. By fiscal 
year 2018, the Navy will assume responsibility for all operating and 
support costs for the Aegis Ashore sites in Romania and Poland. 
However, without a comprehensive, joint estimate of the lifetime 
operating and support costs for the two Aegis Ashore sites that is 
updated as key program decisions are made, it will be difficult for 
the Navy to develop accurate budgets for operating and supporting this 
element of EPAA. 

More-Comprehensive Cost Estimates Can Aid Budget Development: 

We and the Office of Management and Budget have reported that cost 
estimates are important to support budget development. Specifically, 
cost estimates can assist decision makers in budget development and 
are necessary for evaluating resource requirements at key decision 
points and effectively allocating resources.[Footnote 32] In addition, 
Office of Management and Budget guidance containing principles for 
capital asset acquisitions emphasizes that government agencies should 
understand all costs in advance of proposing acquisitions in the 
budget, and notes that agencies should plan for operations and 
maintenance of capital assets.[Footnote 33] Further, it is important 
to fully identify operating and support costs since these costs can be 
up to 70 percent of a weapon system's lifetime costs. Major defense 
acquisition programs within DOD generally follow an acquisition 
process that includes steps in which cost estimates are developed, 
including operating and support costs. Due to the acquisition 
flexibilities MDA has been granted, application of this process has 
been deferred and MDA follows a separate process for development and 
acquisition.[Footnote 34] Nonetheless, DOD has not required completed 
operating and support cost estimates prior to introducing BMD 
capabilities in Europe. In addition, existing memorandums of agreement 
and related annexes between MDA and the services, while they require 
the completion of business-case analyses for the forward-based radar 
and THAAD, do not clearly require that these analyses be completed in 
a timely manner to support a decision on long-term support strategies 
before introducing capabilities. Similarly, these memorandums of 
agreement also do not clearly require developing estimates in a timely 
manner, such as before capabilities are introduced, or updating those 
estimates to support budget development after long-term support 
strategies or other key program decisions--such as whether to forward-
station certain elements overseas--are made.[Footnote 35] The lack of 
an estimate and subsequent updates could limit decision makers' 
ability to identify the resources that will be needed over the long 
term to support the planned investment in the system's capabilities. 

Conclusions: 

DOD has made a substantial investment in BMD, and its initial 
deployment of capabilities for EPAA proceeded in line with the 
President's announced timelines. However, the rapid fielding of EPAA 
has resulted in challenges that, unless DOD takes action, are likely 
to continue as DOD implements additional capabilities. By not fully 
identifying and planning to resolve implementation issues in its 
acceptance process to-date, U.S. Strategic Command, U.S. European 
Command, and the services have had to rush to secure and emplace the 
resources needed to support the capabilities it has already deployed. 
Without identifying the resources, implementing arrangements, 
infrastructure, and other items that need to be in place before 
deploying additional EPAA capabilities, DOD may continue to face 
challenges in operating BMD elements as it moves forward with the 
future phases of EPAA. In addition, if DOD does not also take action 
to identify and plan to resolve these types of implementation issues 
for all current and future BMD capabilities that could support BMD 
operations in Europe, DOD is likely to experience additional 
implementation challenges. 

Similarly, the department's commitment to EPAA implementation has 
proceeded without a full understanding of the related long-term 
operating and support costs, thereby lessening assurance of the 
approach's sustainability through all phases. Although the services 
and MDA have begun to estimate operating and support costs, there are 
no firm deadlines for completing and revising estimates as the 
programs mature and key decisions are made, such as completing 
business-case analyses to support decisions on long-term support 
strategies or where the BMD capabilities may be forward-stationed. 
Making such decisions and updating the estimates accordingly would 
enable the services and MDA to more-accurately develop budgets for 
their respective share of the costs. Further, the lack of a 
comprehensive, joint estimate of operating and support costs for Aegis 
Ashore can make it difficult for the Navy and MDA to develop budgets 
to cover these costs. Without completed and updated estimates for the 
long-term operating and support costs of BMD elements in Europe, the 
department and congressional decision makers may not be fully aware of 
the resources that will be needed over time to support DOD's 
commitment of providing BMD capabilities to Europe. 

Recommendations for Executive Action: 

To improve DOD's ability to identify and resolve implementation issues 
and to improve budgeting for long-term operating and support costs of 
BMD elements in Europe, we recommend that the Secretary of Defense 
take the following four actions. 

* To ensure that BMD capabilities can be used as intended when they 
are delivered, in coordination with the Chairman of the Joint Chiefs 
of Staff, direct U.S. Strategic Command to identify and develop a plan 
to resolve implementation issues prior to deploying and operating 
future BMD capabilities in Europe. U.S. Strategic Command should work 
in consultation with U.S. European Command and the services to resolve 
implementation issues such as infrastructure, resolving policies and 
procedures to address potential overlapping operational priorities if 
radars are integrated across geographic combatant commands, completing 
host-nation implementing arrangements, and any other key 
implementation issues. 

To identify resources needed to support its plans for providing BMD 
capabilities in Europe and to support budget development, direct the 
Under Secretary of Defense for Acquisition, Technology and Logistics 
to require and set a deadline for the following three actions: 

* completing a business-case analysis for the forward-based radar to 
support a decision on the long-term support strategy, and updating the 
joint MDA and Army estimate for long-term operating and support costs 
after a decision on the support strategy is made; 

* completing a business-case analysis for THAAD to support a decision 
on the long-term support strategy, and updating the joint MDA and Army 
long-term operating and support cost estimate after this and other key 
program decisions, such as where the THAAD batteries are likely to be 
forward-stationed, are made; and: 

* completing a joint MDA and Navy estimate of the long-term operating 
and support costs for the Aegis Ashore two sites, and updating the 
estimates after key program decisions are made. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to DOD and the Department of State 
for review and comment. DOD provided written comments, which are 
reproduced in appendix IV, and the Department of State did not provide 
written comments on the report. In its comments, DOD partially agreed 
with one recommendation and agreed with three other recommendations. 
Also, DOD completed a security review of this report and determined 
that its contents were unclassified and contained no sensitive 
information. DOD and the Department of State provided technical 
comments, which we incorporated as appropriate. 

DOD partially agreed with our recommendation that U.S. Strategic 
Command, in consultation with U.S. European Command and the services, 
identify and develop a plan to resolve implementation issues prior to 
deploying and operating future BMD capabilities in Europe. In its 
comments, DOD stated that U.S. Strategic Command does not have the 
authority or mission to resolve implementation issues, but the 
services and MDA will work to identify and resolve implementation 
issues for future BMD capabilities in Europe. DOD further stated that 
U.S. Strategic Command will also work in consultation with U.S. 
European Command and the services to resolve integrated air and 
missile defense requirements and warfighter acceptance criteria, 
validate element performance and system integration, and advise cross 
global combatant command capability optimization/sharing as part of 
its global missile defense role. We understand that U.S. Strategic 
Command may not have the authority to directly resolve all 
implementation issues. However, it does have a role in integrating 
capabilities across combatant commands, as we discuss in this report. 

In addition, our recommendation does not state that U.S. Strategic 
Command should resolve all implementation issues prior to deploying 
capabilities, but rather that it identify and develop a plan to 
resolve implementation issues prior to deployment and to do so in 
consultation with U.S. European Command and the services. As we note 
in the report, the acceptance criteria used to-date focuses on 
effectiveness, suitability, and interoperability; however, the manual 
describing the acceptance process indicates that prerequisites for 
credibly assessing operational suitability include assessing whether 
such things as organization, training, or facilities are defined and 
in place for BMD elements. While it may be appropriate for U.S. 
European Command and/or the services to take the lead in resolving 
some implementation issues, such as ensuring proper infrastructure is 
in place, U.S. Strategic Command, in its advocacy and integration 
roles, can help in identifying and planning to resolve some issues, 
such as advising cross-combatant command capability sharing. Further, 
U.S. Strategic Command's warfighter acceptance process is the only 
existing high-level forum where all key BMD stakeholders come together 
to assess operational utility of BMD elements. Therefore, we believe 
that U.S. Strategic Command, in conjunction with U.S. European Command 
and the services, can use its position as the warfighter advocate to 
elevate implementation issues, such as cross-combatant command 
capability sharing and system integration, to ensure that such issues 
are identified and that a plan to resolve them is developed. 

DOD agreed with our recommendation to require and set a deadline for 
completing a business-case analysis for the forward-based radar to 
support a decision on the long-term support strategy, and updating the 
joint MDA and Army estimate for long-term operating and support costs 
after a decision on the support strategy is made. DOD stated that the 
business-case analysis will be delivered in late fiscal year 2015 and 
that the joint cost estimate is updated biennially. The department 
further stated that if the business-case analysis results 
substantially change the underlying assumptions of the joint cost 
estimate, an out-of-cycle joint cost estimate would be conducted. 
Establishing a target date for completing the business-case analysis 
is a positive first step, and we believe that DOD needs to be vigilant 
to ensure that the late fiscal year 2015 date is met in order to be 
fully responsive to the intent of our recommendation. Doing so will 
enable DOD to update operating and support cost estimates, which, in 
turn, can improve budget development. 

DOD agreed with our recommendation to require and set a deadline for 
completing a business-case analysis for THAAD to support a decision on 
the long-term support strategy, and update the joint MDA and Army 
estimate for long-term operating and support costs after this and 
other key program decisions, such as where the THAAD batteries are 
likely to be forward-stationed, are made. DOD stated that THAAD is a 
"surge support" asset for EPAA with no specifically assigned area of 
responsibility, battery quantities, or locations. DOD further stated 
that MDA and the Army will support the decision to deploy THAAD assets 
and any related business-case analysis for projected sites. According 
to an Army official, conducting a business-case analysis to assess a 
weapon system's lifetime support strategy and making stationing 
decisions are two separate, independent decisions although both affect 
operating and support costs. In other words, a business-case analysis 
can be completed and a support strategy decided upon without a 
decision on where the weapon system may be located. The purpose of a 
business-case analysis is to identify the optimum support concept at 
the lowest life-cycle cost, and DOD had previously planned to complete 
a business-case analysis for THAAD by late 2011. We recognized in this 
report that THAAD could deploy to support EPAA as needed and that 
options are being examined for forward-stationing some THAAD batteries 
overseas. We also noted that operating and support costs can account 
for up to 70 percent of a weapon system's lifetime costs and that 
these costs are generally higher when a system is stationed overseas. 
Given that decision makers need to understand and therefore adequately 
budget for THAAD operating and support costs, we believe it is 
important for DOD to set a deadline for completing the business-case 
analysis to support a decision on the long-term support strategy and 
update the joint estimate of lifetime operating and support costs 
accordingly. DOD should also update the cost estimate after other key 
decisions are made, such as where THAAD may be located. Completing 
these actions would meet the intent of our recommendation. 

DOD agreed with our recommendation to complete a joint estimate of the 
long-term operating and support costs for the two Aegis Ashore sites 
and update the estimates after key program decisions are made. 
However, DOD did not set a deadline for completing the estimate, such 
as before introducing these capabilities in Europe--in late fiscal 
year 2015 and 2018--as we also recommended. We noted in the report 
that the operating and support costs will likely be significant and 
that the Navy will be responsible for all Aegis Ashore operating and 
support costs at the two planned sites beginning in fiscal year 2018. 
The lack of a joint estimate of the long-term operating and support 
costs will make it difficult for the Navy to accurately budget for 
these costs and can limit decision makers' ability to identify the 
resources that will be needed over the long term to support DOD's 
planned investment in Aegis Ashore. Therefore, we believe that DOD 
should set a deadline for completing this estimate in order to meet 
the intent of our recommendation. 

We are sending copies of this report to the appropriate congressional 
committees, the Secretary of Defense, the Under Secretary of Defense 
for Acquisition, Technology, and Logistics, the Commanders of the U.S. 
Strategic Command and U.S. European Command, the Secretaries of the 
Army and Navy, the Director of the Missile Defense Agency, and the 
Secretary of State. In addition, this report will be available at no 
charge on GAO's Web site at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (404) 679-1816 or pendletonj@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. Key contributors to this report are 
listed in appendix V. 

Signed by: 

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

[End of section] 

Appendix I: Scope and Methodology: 

During our review of the Department of Defense's (DOD) implementation 
of the European Phased Adaptive Approach (EPAA), we examined relevant 
documentation and met with representatives from numerous agencies and 
offices. To assess the extent to which DOD has identified and planned 
to resolve implementation issues before deploying ballistic missile 
defense (BMD) capabilities to Europe, we reviewed the U.S. Strategic 
Command document titled Ballistic Missile Defense System (BMDS) 
Warfighter Capability Acceptance[Footnote 36]. This document describes 
the goal of the warfighter acceptance process, which is, in essence, 
to ensure that capabilities can be used as intended when they are 
delivered, and culminates in formal acceptance of BMD capabilities by 
U.S. Strategic Command. We also reviewed key documents, such as the 
Chairman of the Joint Chiefs of Staff Instruction 3295.01, Policy 
Guidance for Ballistic Missile Defense Operations, and the Joint Staff 
Publication 3-01, Countering Air and Missile Threats, which describe 
DOD's BMD guidance and responsibilities of various organizations, and 
U.S. Strategic Command's June 2013 Instruction 538-03 on Integrated 
Air and Missile Defense (IAMD) Warfighter Involvement Process (WIP). 
We also met with officials from the Office of the Secretary of 
Defense, the Joint Staff, U.S. European Command and its service 
components, and U.S. Strategic Command to understand how DOD's process 
was implemented. In addition, we reviewed U.S. European Command 
planning documents, briefings on EPAA implementation and results of 
BMD exercises, and minutes from synchronization board meetings to 
identify implementation issues and assess the extent to which these 
issues are related to DOD's acceptance process. 

We also reviewed Navy instructions and documents from the Navy 
Ballistic Missile Defense Enterprise and U.S. Naval Forces Europe to 
understand how the Navy monitors and addresses technical and 
implementation issues related to Aegis Ashore for EPAA Phases Two and 
Three. We reviewed 10th Army Air and Missile Defense Command and 32nd 
Army Air and Missile Defense Command reports and briefings that 
described implementation challenges experienced during the deployment 
of BMD elements to Europe and other regions, and provided an 
assessment of lessons learned for future BMD element deployments. We 
also reviewed documents and briefings from the U.S. Air Forces Europe 
603rd Air Operations Center to understand whether implementation 
issues--such as U.S.-NATO command and control relationships--are 
identified and channeled through U.S. European Command as a part of 
DOD's capability acceptance process. We spoke to senior-level 
officials from the Army, Navy, Air Force, U.S. Strategic Command, U.S. 
European Command, U.S. Army Europe, U.S. Navy Europe, U.S. Air Forces 
Europe, Joint Staff, the Office of the Secretary of Defense, and the 
Missile Defense Agency (MDA) about their participation in the 
acceptance process, including the selection of acceptance criteria to 
assess EPAA Phase One BMD elements, identification and resolution of 
implementation issues prior to accepting EPAA BMD elements, and any 
planned adjustments to the existing process. 

Finally, we spoke to senior-level State Department officials to 
understand their role leading up to the deployment of EPAA Phase One 
capabilities and overall involvement in subsequent EPAA implementation 
efforts. We also spoke to senior-level NATO officials to get their 
perspectives on possible implementation issues related to command and 
control relationships during NATO-led BMD operations and 
interoperability among U.S., NATO, and member-nation BMD systems. 

To assess the extent to which DOD has estimated the long-term costs to 
operate and support BMD elements in Europe, we first reviewed 
agreements and their annexes between MDA and the Army and between MDA 
and the Navy regarding how these organizations are to work together to 
manage the BMD elements, including information on how they are to 
jointly develop cost estimates. We identified and reviewed documents 
containing best practices for determining high-quality cost estimates 
from the Office of Management and Budget and the GAO Cost Estimating 
and Assessment Guide, which indicate that estimating long-term 
operations and support costs assists in budget development and the 
allocation of resources. In addition, we reviewed the Army's 
regulation on Integrated Logistic Support, which includes guidance on 
business-case analysis and is referenced in the agreement annexes 
between MDA and the Army to identify DOD criteria for conducting 
business-case analyses to assess alternatives for providing long-term 
support. We then reviewed documentation of estimates developed by MDA 
and the services for the BMD elements that are part of EPAA or could 
be deployed to support EPAA, which include Aegis Ashore, forward-based 
Army Navy/Transportable Radar, Terminal High Altitude Area Defense 
(THAAD), Command, Control, Battle Management and Communications, 
Patriot, and Aegis BMD-capable ships. We focused our assessment on the 
first three elements, because the services and MDA are sharing the 
operating and support costs for these elements. We assessed the 
documentation of the Army and MDA December 2012 joint estimate of 
operating and support costs for THAAD and the January 2012 joint 
estimate of operating and support costs for the forward-based Army 
Navy/Transportable Radar. We interviewed Army and MDA officials to 
understand the key assumptions underpinning each estimate. 

Further, we examined the key issues that could affect these estimates 
including DOD proposals for locating THAAD units overseas and the lack 
of business-case analyses for supporting a decision on the long-term 
support strategy for each element, which are called for by the BMD 
element agreements between the Army and MDA and by Army guidance 
referenced in those agreements. For Aegis Ashore, we confirmed with 
MDA and Navy officials that the two organizations had not yet jointly 
developed a comprehensive, long-term estimate. We did, however, assess 
Navy and MDA documentation of some Aegis Ashore costs that each 
organization expects to fund over the next 5 years. We did not 
evaluate the quality of the estimates in this review since we reported 
in 2011 that six of MDA's life-cycle cost estimates did not meet the 
characteristics of a high-quality cost estimate.[Footnote 37] Since 
our objective for the current review was to assess the extent to which 
DOD had identified the operating and support costs of BMD elements, 
documenting the existence or absence of estimates was sufficient for 
our purposes. 

We conducted this performance audit from December 2012 to April 2014 
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: U.S. Ballistic Missile Defense (BMD) Capabilities 
Available by European Phased Adaptive Approach (EPAA) Phase: 

[Refer to PDF for image: 3 maps with descriptive information] 

Phase I (December 2011): 

Existing missile defense systems were deployed to defend against 
short- and medium-range ballistic missiles. Phase I focuses on the 
protection of portions of southern Europe by utilizing sea-based Aegis 
missile defense–capable ships and interceptors (Standard Missile-3 
Block IA). This first phase also includes a forward-based radar in 
Turkey. 

* Command, Control, Battle Management, and Communications Air 
Operations Center (C2BMC); 
* Aegis Ballistic Missile Defense ship; 
* Army Navy/Transportable Radar Surveillance (AN/TPY-2) radar. 

Phase II: (December 2015): 

A land-based missile defense capability called Aegis Ashore is to be 
deployed to Romania and will include a more-advanced interceptor 
(Standard Missile-3 Block IB), expanding coverage to additional NATO 
allies. Though not solely dedicated to EPAA, four Aegis missile 
defense-capable ships are also to be forward-homeported in Spain and 
available to support BMD operations, as needed. Other BMD elements 
that are not officially dedicated to EPAA but could be deployed to 
support BMD in Europe are THAAD and Patriot batteries. 

* Command, Control, Battle Management, and Communications Air 
Operations Center (C2BMC); 
* Patriot and Terminal High Altitude Area Defense (THAAD) batteries; 
* 4 Aegis Ballistic Missile Defense ships; 
* Aegis Ashore; 
* Army Navy/Transportable Radar Surveillance (AN/TPY-2) radar. 

Phase III: (Late 2018): 

A land-based missile defense capability called Aegis Ashore is to be 
deployed to Poland and is to include a more advanced interceptor to 
defend against medium- and intermediate-range threats (Standard 
Missile-3 Block IIA) extending coverage to all NATO allies in Europe. 

* Command, Control, Battle Management, and Communications Air 
Operations Center (C2BMC); 
* Patriot and Terminal High Altitude Area Defense (THAAD) batteries; 
* 4 Aegis Ballistic Missile Defense ships; 
* Aegis Ashore (2); 
* Army Navy/Transportable Radar Surveillance (AN/TPY-2) radar. 

Source: GAO analysis of DOD documents. 

[End of figure] 

[End of section] 

Appendix III: Key Department of Defense (DOD) Stakeholders Involved in 
Planning and Implementing the European Phased Adaptive Approach: 

Organization: Under Secretary of Defense for Acquisition, Technology 
and Logistics; 
Primary Role in European Phased Adaptive Approach (EPAA): Provides 
acquisition policy direction, program guidance, and overall management 
oversight of the Missile Defense Agency. Chairs the Missile Defense 
Executive Board, provides program guidance, and makes recommendations 
to the Deputy Secretary of Defense on missile defense issues. 

Organization: Missile Defense Executive Board; 
Primary Role in European Phased Adaptive Approach (EPAA): A senior-
level body that reviews DOD's ballistic missile defense efforts and 
provides the Under Secretary of Defense for Acquisition, Technology 
and Logistics or Deputy Secretary of Defense, as necessary, with a 
recommended ballistic missile defense strategic program plan and 
feasible funding strategy for approval. 

Organization: U.S. European Command; 
Primary Role in European Phased Adaptive Approach (EPAA): The 
geographic combatant command[A] whose area of responsibility includes 
all of Europe (including Russia and Turkey), Greenland, Israel, and 
surrounding waters. It is the primary geographic combatant command 
involved in planning for and implementing EPAA. It is assisted in this 
effort by its service components--principally U.S. Naval Forces 
Europe, U.S. Army Europe, and U.S. Air Forces Europe.[B] 

Organization: U.S. Central Command; 
Primary Role in European Phased Adaptive Approach (EPAA): The 
geographic combatant command whose area of responsibility includes 
parts of the Middle East. Coordinates with U.S. European Command to 
defend against ballistic missile threats originating from its area of 
responsibility. 

Organization: U.S. Strategic Command; 
Primary Role in European Phased Adaptive Approach (EPAA): Functional 
combatant command[C] with responsibilities to integrate global 
missions and capabilities that cross the boundaries of the geographic 
combatant commands, such as synchronizing planning and coordinating 
operations support for global missile defense, as well as missile 
defense advocacy for the combatant commands. 

Organization: Military services; 
Primary Role in European Phased Adaptive Approach (EPAA): Responsible 
for providing forces and resources to support fielding of the 
ballistic missile defense elements and assisting in planning for and 
managing the operations and maintenance and infrastructure needs of 
ballistic missile defense elements. 

Organization: Missile Defense Agency; 
Primary Role in European Phased Adaptive Approach (EPAA): Responsible 
for the research, development, testing, and acquisition of the 
integrated ballistic missile defense system, comprised of individual 
ballistic missile defense elements. In addition, the Missile Defense 
Agency is responsible for operating and support costs for some 
ballistic missile defense elements until this responsibility is 
undertaken by a military service. 

Organization: Director, Operational Test and Evaluation; 
Primary Role in European Phased Adaptive Approach (EPAA): Principal 
staff assistant and advisor to the Secretary of Defense on operational 
test and evaluation in DOD. Responsibilities include issuing policy 
and procedures; reviewing and analyzing results of operational test 
and evaluation conducted for certain acquisition programs; and other 
related activities. In the context of the ballistic missile defense 
system, the director is responsible for conducting effective, 
independent oversight of operational testing and providing timely 
assessments to support programmatic decisions and reporting 
requirements. 

Organization: Ballistic Missile Defense System Operational Test Agency; 
Primary Role in European Phased Adaptive Approach (EPAA): Plans and 
directs independent operational tests and evaluations and provides 
operational assessments of ballistic missile defense system capability 
to defend the United States, its deployed forces, friends, and allies 
against ballistic missiles of all ranges and in all phases of flight. 
The agency includes representation from service and joint operational 
test entities. 

Source: GAO summary of Department of Defense (DOD) information. 

[A] The six geographic combatant commands are U.S. Africa Command, 
U.S. Central Command, U.S. European Command, U.S. Northern Command, 
U.S. Pacific Command, and U.S. Southern Command. 

[B] A service component command is a command consisting of the service 
component commander and all those service forces, such as individuals, 
units, detachments, organizations, and installations under the 
command, including the support forces that have been assigned to a 
combatant command. 

[C] The three functional combatant commands are U.S. Special 
Operations Command, U.S. Strategic Command, and U.S. Transportation 
Command. 

[End of table] 

[End of section] 

Appendix IV: Comments from the Department of Defense: 

Assistant Secretary of Defense: 
Acquisition: 
3015 Defense Pentagon: 
Washington, DC 20301-3015: 

March 24, 2014: 

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 Government
Accountability Office (GAO) Draft Report, GAO-14-314, "Ballistic Missile
Defense: Actions Needed to Address Implementation Issues and Estimate 
Long-Term Costs for European Capabilities," dated February 19, 2014 
(GAO Code 351790). 

The DoD partially concurred with the first recommendation and 
concurred with the remaining three recommendations. Detailed comments 
on the report recommendations are enclosed. 

We appreciate the opportunity to comment on the draft report. My point 
of contact for this effort is Mr. Greg Hulcher, 
gregory.d.hulcher.civ@mail.mil, 703-695-2680. 

Sincerely, 

Signed by: 

Katrina McFarland: 

Enclosures: As stated. 

GAO Draft Report Dated February 19, 2014: 
GAO-14-314 (GAO Code 351790): 

Actions Needed To Address Implementation Issues And Estimate Long-Term 
Costs For European Capabilities 

Department Of Defense Comments To The GAO Recommendations: 

Recommendation 1: To ensure that BMD capabilities can be used as 
intended when they are delivered, in coordination with the Chairman of 
the Joint Chiefs of Staff, direct U.S. Strategic Command to identify 
and develop a plan to resolve implementation issues prior to deploying 
and operating future BMD capabilities in Europe. U.S. Strategic 
Command should work in consultation with U.S. European Command and the 
services to resolve implementation issues such as infrastructure, 
resolving policies and procedures to address potential overlapping 
operational priorities if radars are integrated across geographic 
combatant commands, completing host nation implementing arrangements, 
and any other key implementation issues. 

DoD Response: Partially Concur. U.S. Strategic Command does not have 
the authority or mission to resolve implementation issues. The 
Services and the Missile Defense Agency (MDA) will work to identify 
and resolve implementation issues for future BMD capabilities in 
Europe. U.S. Strategic Command will work in consultation with U.S. 
European Command and the Services to resolve Integrated Air and 
Missile Defense (IAMD) requirements and Warfighter Acceptance 
Criteria, validate IAMD element performance and system integration, 
support U.S. national policy adjustments, support Warfighter needs, 
and advise cross Global Combatant Command capability 
optimization/sharing as part of their global missile defense role. 

Recommendation 2: To identify resources needed to support its plans 
for providing BMD capabilities in Europe and to support budget 
development, direct the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to require and set a deadline for completing 
a business case analysis for the forward-based radar to support a 
decision on the long-term support strategy and updating the joint MDA 
and Army estimate for long-term operating and support costs after a 
decision on the support strategy is made. 

DoD Response: Concur. MDA is contracting with Army (Aviation and 
Missile Command Logistics Center (ALC)) to conduct a business case 
analysis (BCA) to identify the most cost effective long term support 
strategy. The BCA will be delivered in 4th Quarter FY15.
The Army-MDA AN/TPY-2 Joint Operations and Sustainment Cost Estimate 
is updated biennially and is reviewed by the MDA Cost Director and the 
Director of Acquisition Costing Directorate at the office of the 
Deputy Assistant Secretary of the Army for Cost and Economics. If the 
results of the BCA substantially change the underlying assumptions of 
the Joint Cost Estimate, an out-of-cycle Joint Cost Estimate would be 
conducted. 

Recommendation 3: To identify resources needed to support its plans 
for providing BMD capabilities in Europe and to support budget 
development, direct the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to require and set a deadline for completing 
a business case analysis for THAAD to support a decision on the long-
term support strategy and updating the joint MDA and Army long-term 
operating and support cost estimate after this and other key program 
decisions, such as where the THAAD batteries are likely to be forward-
stationed, are made. 

DoD Response: Concur. THAAD is identified as a "surge support" asset 
for EPAA with no specifically assigned area of responsibility, battery 
quantities or locations. MDA and the Army will support the decision to 
deploy THAAD assets, and any related business case analysis for 
projected sites. 

Recommendation 4: To identify resources needed to support its plans 
for providing BMD capabilities in Europe and to support budget 
development, direct the Under Secretary of Defense for Acquisition, 
Technology, and Logistics to require and set a deadline for completing 
a joint MDA and Navy estimate of the long-term operating and support 
costs for the Aegis Ashore two sites and updating the estimates after 
key program decisions are made. 

DoD Response: Concur. MDA and the Navy support completing a joint 
estimate of the long-term operating and support costs for the Aegis 
Ashore two sites and updating the estimates after key program 
decisions are made. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

John H. Pendleton, (202) 512-3489 or pendletonj@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Patricia W. Lentini, 
Assistant Director; Marie A. Mak, Assistant Director; Brenda M. 
Waterfield; Jennifer S. Spence; Laurie Choi; Virginia A. Chanley; 
Michael Shaughnessy; Erik Wilkins-McKee; and Amie Steele made key 
contributions to this report. 

[End of section] 

Related GAO Products: 

Missile Defense: Opportunity to Refocus on Strengthening Acquisition 
Management. [hyperlink, http://www.gao.gov/products/GAO-13-432]. 
Washington, D.C.: April 26, 2013. 

Missile Defense: Opportunity Exists to Strengthen Acquisitions by 
Reducing Concurrency. [hyperlink, 
http://www.gao.gov/products/GAO-12-486]. Washington, D.C.: April 20, 
2012. 

Ballistic Missile Defense: Actions Needed to Improve Training 
Integration and Increase Transparency of Training Resources. 
[hyperlink, http://www.gao.gov/products/GAO-11-625]. Washington, D.C.: 
July 18, 2011. 

Missile Defense: Actions Needed to Improve Transparency and 
Accountability. [hyperlink, http://www.gao.gov/products/GAO-11-372]. 
Washington, D.C.: March 24, 2011. 

Ballistic Missile Defense: DOD Needs to Address Planning and 
Implementation Challenges for Future Capabilities in Europe. 
[hyperlink, http://www.gao.gov/products/GAO-11-220]. Washington, D.C.: 
January 26, 2011. 

Missile Defense: European Phased Adaptive Approach Acquisitions Face 
Synchronization, Transparency, and Accountability Challenges. 
[hyperlink, http://www.gao.gov/products/GAO-11-179R]. Washington, 
D.C.: December 21, 2010. 

Defense Acquisitions: Missile Defense Program Instability Affects 
Reliability of Earned Value Management Data. [hyperlink, 
http://www.gao.gov/products/GAO-10-676]. Washington, D.C.: July 14, 
2010. 

Defense Acquisitions: Assessments of Selected Weapon Programs. 
[hyperlink, http://www.gao.gov/products/GAO-10-388SP]. Washington, 
D.C.: March 30, 2010. 

Defense Acquisitions: Missile Defense Transition Provides Opportunity 
to Strengthen Acquisition Approach. [hyperlink, 
http://www.gao.gov/products/GAO-10-311]. Washington, D.C.: February 
25, 2010. 

Missile Defense: DOD Needs to More Fully Assess Requirements and 
Establish Operational Units before Fielding New Capabilities. 
[hyperlink, http://www.gao.gov/products/GAO-09-856]. Washington, D.C.: 
September 16, 2009. 

Ballistic Missile Defense: Actions Needed to Improve Planning and 
Information on Construction and Support Costs for Proposed European 
Sites. [hyperlink, http://www.gao.gov/products/GAO-09-771]. 
Washington, D.C.: August 6, 2009. 

Defense Management: Key Challenges Should be Addressed When 
Considering Changes to Missile Defense Agency's Roles and Missions. 
[hyperlink, http://www.gao.gov/products/GAO-09-466T]. Washington, 
D.C.: March 26, 2009. 

Defense Acquisitions: Production and Fielding of Missile Defense 
Components Continue with Less Testing and Validation Than Planned. 
[hyperlink, http://www.gao.gov/products/GAO-09-338]. Washington, D.C.: 
March 13, 2009. 

Missile Defense: Actions Needed to Improve Planning and Cost Estimates 
for Long-Term Support of Ballistic Missile Defense. [hyperlink, 
http://www.gao.gov/products/GAO-08-1068]. Washington, D.C.: September 
25, 2008. 

Ballistic Missile Defense: Actions Needed to Improve the Process for 
Identifying and Addressing Combatant Command Priorities. [hyperlink, 
http://www.gao.gov/products/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/products/GAO-08-448]. Washington, D.C.: March 14, 
2008. 

Defense Acquisitions: Missile Defense Agency's Flexibility Reduces 
Transparency of Program Cost. [hyperlink, 
http://www.gao.gov/products/GAO-07-799T]. Washington, D.C.: April 30, 
2007. 

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

Defense Acquisitions: Missile Defense Needs a Better Balance between 
Flexibility and Accountability. [hyperlink, 
http://www.gao.gov/products/GAO-07-727T]. Washington, D.C.: April 11, 
2007. 

Defense Acquisitions: Missile Defense Acquisition Strategy Generates 
Results but Delivers Less at a Higher Cost. [hyperlink, 
http://www.gao.gov/products/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/products/GAO-06-473]. Washington, D.C.: May 31, 
2006. 

Defense Acquisitions: Missile Defense Agency Fields Initial Capability 
but Falls Short of Original Goals. [hyperlink, 
http://www.gao.gov/products/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/products/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/products/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/products/GAO-05-540]. 
Washington, D.C.: June 30, 2005. 

Defense Acquisitions: Status of Ballistic Missile Defense Program in 
2004. [hyperlink, http://www.gao.gov/products/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/products/GAO-04-514]. Washington, D.C.: May 7, 2004. 

Missile Defense: Actions Are Needed to Enhance Testing and 
Accountability. [hyperlink, http://www.gao.gov/products/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/products/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/products/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/products/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/products/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/products/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/products/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/products/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/products/GAO/NSIAD-00-121]. Washington, D.C.: May 
31, 2000. 

[End of section] 

Footnotes: 

[1] GAO, Ballistic Missile Defense: DOD Needs to Address Planning and 
Implementation Challenges for Future Capabilities in Europe, 
[hyperlink, http://www.gao.gov/products/GAO-11-220] (Washington, D.C.: 
Jan. 26, 2011); and Missile Defense: European Phased Adaptive Approach 
Acquisitions Face Synchronization, Transparency, and Accountability 
Challenges, [hyperlink, http://www.gao.gov/products/GAO-11-179R] 
(Washington, D.C.: Dec. 21, 2010). 

[2] The document is issued by U.S. Strategic Command's Joint 
Functional Component Command for Integrated Missile Defense. 

[3] The Command, Control, Battle Management and Communications system 
is a networked computer and communications element developed by MDA to 
integrate the BMD system by providing deliberate planning, situational 
awareness, sensor management, and battle management capabilities. 

[4] Aegis Ashore is a land-based element designed by MDA to provide 
capability to detect, track, and intercept threats by leveraging 
capabilities that exist on Aegis BMD ships. 

[5] Patriot provides simultaneous air and missile defense capabilities 
in defense of U.S. deployed forces and allies against short-range 
ballistic missiles. THAAD employs the THAAD interceptor and the Army 
Navy/Transportable Radar (in THAAD mode) to engage ballistic missile 
targets in the late mid-course and terminal phases of their 
trajectory. THAAD can act as a surveillance sensor, providing sensor 
data to cue other elements of the BMD system. 

[6] The warfighter community generally includes the combatant 
commands, service and joint functional component commands, units, 
military personnel, the military services, and their supporting 
components associated with the BMD mission. 

[7] GAO, Missile Defense: Opportunity to Refocus on Strengthening 
Acquisition Management, [hyperlink, 
http://www.gao.gov/products/GAO-13-432] (Washington, D.C.: Apr. 26, 
2013). 

[8] [hyperlink, http://www.gao.gov/products/GAO-13-432]. MDA's annual 
report is titled the Ballistic Missile Defense System Accountability 
Report. Section 225 of Title 10, U.S. Code, enacted in 2011, requires 
MDA to establish and maintain acquisition baselines for each program 
element of the ballistic missile defense system and each designated 
major subprogram, and to provide an accountability report regarding 
the baselines. See 10 U.S.C. § 225(a), (c) (enacted by the National 
Defense Authorization Act for Fiscal Year 2012, Pub. L. No. 112-81, § 
231(a)(1) (2011)). MDA must develop a life-cycle cost estimate as part 
of the baseline, including costs regarding operations and sustainment. 
See § 225(b)(3)(A). A provision in the National Defense Authorization 
Act for Fiscal Year 2014 recently amended section 225, adding a 
requirement for the Director of MDA to ensure that each life-cycle 
cost estimate includes both the operations and sustainment costs for 
which MDA is responsible and a description of the operations and 
sustainment functions and costs for which a military department is 
responsible. See Pub. L. No. 113-66, § 231(b) (2013) (codified at § 
225(e)). 

[9] [hyperlink, http://www.gao.gov/products/GAO-11-220]. 

[10] We did not evaluate the quality of the estimates in this review. 
However we found in 2011 that MDA lacked high quality cost estimates--
estimates that are comprehensive, well-documented, accurate, and 
credible. We also found that cost progress cannot be independently 
evaluated until MDA reports baselines that are supported by reliable, 
high quality cost estimates. DOD concurred with our recommendation to 
take steps to ensure that cost estimates are high quality and 
reliable. See GAO, Missile Defense: Actions Needed to Improve 
Transparency and Accountability, [hyperlink, 
http://www.gao.gov/products/GAO-11-372] (Washington, D.C.: Mar. 24, 
2011). Subsequently, we found in a follow-on April 2013 report that 
MDA had made little progress improving the quality of its cost 
estimates that support its resource baseline. See [hyperlink, 
http://www.gao.gov/products/GAO-13-432. 

[11] [hyperlink, http://www.gao.gov/products/GAO-11-220]. 

[12] GAO, Missile Defense: DOD Needs to More Fully Assess Requirements 
and Establish Operational Units before Fielding New Capabilities, 
[hyperlink, http://www.gao.gov/products/GAO-09-856] (Washington, D.C.: 
Sept. 16, 2009). 

[13] The BMD system is an integrated, layered architecture that 
provides multiple opportunities to destroy missiles and their warheads 
before they reach their targets The system's architecture includes 
networked sensors and ground-and sea-based radars for target detection 
and tracking; ground-and sea-based interceptor missiles for destroying 
a ballistic missile; and a command, control, battle management, and 
communications network providing the warfighter with the needed links 
between the sensors and interceptor missiles. See Joint Chiefs of 
Staff, Space Operations, Joint Pub. 3-14, at IV-13 (May 29, 2013). 

[14] According to officials from the Department of State, agreements 
with allies would generally take the form of implementing arrangements 
to preexisting agreements. We reported in 2009 that, in the context of 
BMD, implementing arrangements were expected to serve as executing 
documents for broader agreements and address day-to-day working 
relationships between countries on a range of issues related to BMD, 
including security. 

[15] See Joint Functional Component Command for Integrated Missile 
Defense, Ballistic Missile Defense System (BMDS) Warfighter Capability 
Acceptance (Sept. 20, 2012). According to U.S. Strategic Command 
officials, the manual was in use prior to its issuance in September 
2012 and was used for Phase One of EPAA. 

[16] MDA's December 2011 technical capability declaration was used to 
announce the completion of EPAA Phase One. According to MDA guidance, 
a technical capability declaration requires sufficient testing of the 
system being fielded to support an understanding of overall 
capabilities and limitations of the system to support the combatant 
command missile defense mission. See Missile Defense Agency Directive 
5000.17, Ballistic Missile Defense System Operational Capacity 
Baseline Procedures (May 3, 2013). MDA may provide support to the 
acceptance process, but MDA technical capability declarations are 
independent from the warfighter acceptance process. 

[17] These criteria are developed by U.S. Strategic Command's Joint 
Functional Component Command for Integrated Missile Defense. 

[18] Throughout this report, we will refer to these criteria 
collectively as acceptance criteria. 

[19] In this report, we refer to the Army Navy/Transportable Radar as 
the forward-based radar. 

[20] Details of these technical improvements are classified. 

[21] See Chairman of the Joint Chiefs of Staff Instruction 3295.01, 
enc. A, para. 2.b(2) (May 24, 2013). 

[22] See Joint Chiefs of Staff, Joint Pub. 3-01, Countering Air and 
Missile Threats, app. E (Mar. 23, 2012). 

[23] We reported the potential for frequency access issues for Aegis 
Ashore as early as 2010. In 2011 and 2012, we reported on two specific 
issues: the possibility that the radar might interfere with host-
nation wireless usage; and that DOD and the relevant host nation 
authorities must work together to ensure that host nations approve use 
of the operating frequency needed for the radar. See [hyperlink, 
http://www.gao.gov/products/GAO-13-432]. Although our reports noted 
that frequency access presented challenges, GAO made no 
recommendations on this issue. 

[24] The International Telecommunication Union has issued guidance on 
managing frequencies. The International Telecommunication Union is an 
international organization within the United Nations System where 
governments and the private sector coordinate global telecom networks 
and services. According to this guidance, frequencies are a shared 
resource that national governments monitor and manage to prevent and 
eliminate harmful interference and reduce potential for overlap and 
interference between uses. The guidance also notes that, in the 
European Union, national standards reflect European standards and 
national policy is to implement European Policy. For more information, 
see International Telecommunication Union, Guidance on the Regulatory 
Framework for National Spectrum Management, Report ITU-R SM.2093-1 
(September 2010). 

[25] A business-case analysis is conducted to assist decision makers 
by assessing the costs and benefits of alternative support strategies, 
which are compared to determine the most-efficient and effective means 
of support. Typically, a long-term or lifetime support strategy is 
selected based on the results of a business-case analysis. 

[26] The overarching Memorandum of Agreement, signed by the Director 
of MDA and the Secretary of the Army in 2009, is supplemented and 
implemented by annexes released in subsequent years and signed by 
various officials. 

[27] Specifically, the annexes require the development of an Army-
approved business-case analysis prior to the transfer of the 
capability from MDA to the Army. 

[28] See Army Regulation 700-127, Integrated Logistics Support (Mar. 
26, 2012). 

[29] DOD plans to buy a total of six THAAD batteries. As explained 
earlier in this report, DOD's plans for EPAA include the possibility 
of forward-stationing a THAAD battery in Europe. However, the estimate 
did not provide a per battery cost for operating and supporting THAAD 
in Europe. 

[30] Similar to the Army, the Navy and MDA entered into an overarching 
Memorandum of Agreement in 2010, supplemented and implemented by 
specific annexes at later dates. 

[31] In June and July 2013, the Navy and MDA signed a Cost Analysis 
Requirements Description, which is a document that is used as the 
basis for developing a cost estimate. 

[32] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009). 

[33] See Office of Management and Budget, Capital Programming Guide: 
Supplement to OMB Circular A-11: Planning, Budgeting, and Acquisition 
of Capital Assets, ver. 3.0 (July 2013). 

[34] BMD elements are expected to enter the defense acquisition system 
at a later stage. 

[35] According to DOD officials, the cost estimates may be updated to 
reflect some actual costs, such as fuel consumption, but will not be 
updated to reflect a change in the support strategy until a decision 
on the long-term strategy is made based on the business-case analysis. 

[36] This document is issued by U.S. Strategic Command's Joint 
functional Component Command for Integrated Missile Defense. 

[37] GAO, Missile Defense: Actions Needed to Improve Transparency and 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-11-372] 
(Washington, D.C.: Mar. 24, 2011). 

[End of section] 

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