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United States Government Accountability Office: 

GAO: 

Report to Congressional Committees: 

March 2007: 

Defense Acquisitions: 

Assessments of Selected Weapon Programs: 

GAO-07-406SP: 

GAO Highlights: 

Highlights of GAO-07-406SP, a report to congressional committees 

Why GAO Did This Study: 

This report is GAO’s fifth annual assessment of selected weapon 
programs. From 2001 to the present, the Department of Defense (DOD) has 
doubled its planned investment in new systems from approximately $750 
billion to almost $1.5 trillion. While DOD expects these systems to 
transform military operations, their acquisition remains a high-risk 
area. GAO’s reviews of weapons over three decades have found consistent 
cost increases, schedule delays, and performance shortfalls. The 
nation’s growing long-range fiscal challenges may ultimately spur 
Congress to pressure DOD to cut spending on new weapons and to redirect 
funding to other priorities. In response, DOD might be compelled to 
deliver new weapon programs within estimated costs and to obtain the 
most from its investments. 

This report provides congressional and DOD decision makers with an 
independent, knowledge-based assessment of selected defense programs, 
identifying potential risks and needed actions when a program’s 
projected attainment of knowledge diverges from the best practices. 
Programs assessed were selected using several factors: high dollar 
value, acquisition stage, and congressional interest. This report also 
highlights issues raised by the cumulative experiences of individual 
programs. GAO updates this report annually under the Comptroller 
General’s authority to conduct evaluations on his own initiative. 

What GAO Found: 

GAO assessed 62 weapon systems with a total investment of over $950 
billion, some two-thirds of the $1.5 trillion DOD plans for weapons 
acquisition (see below). Several of these programs will be developed 
without needed technology, design, and production knowledge, and will 
cost more and take longer to deliver. Progress in acquisitions is 
measured by passage through critical junctures, or knowledge points: 
Are the product’s technologies mature at the start of development? Is 
the product design stable at the design review? Are production 
processes in control by production start? By these best practice 
measures, limited progress has been made by the programs GAO assessed. 
Fully mature technologies were present in 16 percent of the systems at 
development start—the point at which best practices indicate mature 
levels should be present. The programs that began development with 
immature technologies experienced a 32.3 percent cost increase, whereas 
those that began with mature technologies increased 2.6 percent. 
Furthermore, 27 percent of the assessed programs demonstrated a stable 
design at the time of design review and in terms of production, very 
few programs reported using statistical process control data to measure 
the maturity of production processes. 

Effective program management and control are essential to executing a 
knowledge-based approach. However, DOD does not have an environment 
that facilitates effective program management. For example, key 
personnel are rotated too frequently. Further, DOD is increasingly 
relying on contractors to perform key management functions raising 
questions about the capacity of DOD to manage new weapon system 
programs. 

Figure: Total Cumulative Planned Expenditures on Current portfolio of 
Major Defense Acquisition: 

[See PDF for Image] 

Source: GAO analysis of DOD data. 

[End of figure] 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-406SP]. 

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

[End of section] 

Contents: 

Foreword: 

Letter: 

Better Acquisition Outcomes Needed to Accomplish DOD Transformation 
Objectives in Current Fiscal Environment: 

DOD Weapon Programs Consistently Experience a Reduced Return on 
Investment: 

A Knowledge-Based Approach Can Lead to Better Acquisition Outcomes: 

Most Programs Proceed with Low Levels of Knowledge at Critical 
Junctures: 

Effective Management Capacity and Control Are Essential to Successfully 
Executing a Knowledge-Based Approach: 

How to Read the Knowledge Graphic for Each Program Assessed: 

Assessments of Individual Programs: 

Airborne Laser (ABL): 

Aerial Common Sensor (ACS): 

Aegis Ballistic Missile Defense (Aegis BMD): 

Advanced Extremely High Frequency (AEHF) Satellites: 

Active Electronically Scanned Array Radar (AESA): 

Airborne Mine Countermeasures (AMCM): 

Advanced Precision Kill Weapon System (APKWS) II: 

Armed Reconnaissance Helicopter (ARH): 

Advanced Threat Infrared Countermeasure/Common Missile Warning System 
(ATIRCM/CMWS): 

B-2 Radar Modernization Program (B-2 RMP): 

Broad Area Maritime Surveillance (BAMS): 

C-130 Avionics Modernization Program (C-130 AMP): 

C-130J Hercules: 

C-5 Avionics Modernization Program (C-5 AMP): 

C-5 Reliability Enhancement and Reengining Program (C-5 RERP): 

USMC CH-53K Heavy Lift Replacement (HLR): 

Combat Search and Rescue Replacement Vehicle (CSAR-X): 

Future Aircraft Carrier CVN-21: 

DDG 1000 Destroyer: 

E-10A Wide Area Surveillance Technology Development Program (TDP): 

E-2D Advanced Hawkeye (E-2D AHE): 

EA-18G: 

Evolved Expendable Launch Vehicle (EELV) - Atlas V, Delta IV: 

Expeditionary Fire Support System (EFSS): 

Expeditionary Fighting Vehicle (EFV): 

Extended Range Munition (ERM): 

Excalibur Precision Guided Extended Range Artillery Projectile: 

F-22A Modernization and Improvement Program: 

Future Combat Systems (FCS): 

Global Hawk Unmanned Aircraft System: 

Ground-Based Midcourse Defense (GMD): 

Navstar Global Positioning System (GPS) II Modernized Space/OCS: 

Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System 
(JLENS): 

Joint Strike Fighter (JSF): 

Joint Tactical Radio System Airborne, Maritime, Fixed-Station (JTRS 
AMF): 

Joint Tactical Radio System Ground Mobile Radio (JTRS GMR): 

JTRS Handheld, Manpack, Small Form Fit (JTRS HMS): 

Kinetic Energy Interceptors (KEI): 

Land Warrior: 

Littoral Combat Ship (LCS): 

Amphibious Assault Ship Replacement Program (LHA 6): 

Longbow Apache Block III: 

Light Utility Helicopter (LUH): 

Multiple Kill Vehicle (MKV): 

MQ-9 Reaper Unmanned Aircraft System: 

21'' Mission Reconfigurable Unmanned Undersea Vehicle System (MRUUVS): 

Mobile User Objective System (MUOS): 

National Polar-orbiting Operational Environmental Satellite System 
(NPOESS): 

P-8A Multi-mission Maritime Aircraft (P-8A MMA): 

PATRIOT/MEADS Combined Aggregate Program (CAP) Fire Unit: 

Space Based Infrared System (SBIRS) High: 

Small Diameter Bomb (SDB), Increment II: 

Space Radar (SR): 

SSN 774 Technology Insertion Program: 

Space Tracking and Surveillance System (STSS): 

Terminal High Altitude Area Defense (THAAD): 

Transformational Satellite Communications System (TSAT): 

V-22 Joint Services Advanced Vertical Lift Aircraft: 

VH-71 Presidential Helicopter Replacement Program: 

Warrior Unmanned Aircraft System (UAS): 

Wideband Global SATCOM (WGS): 

Warfighter Information Network-Tactical (WIN-T): 

Agency Comments: 

Scope of Our Review: 

Appendixes: 

Appendix I: Comments from the Department of Defense: 

Appendix II: Scope and Methodology: 

Macro Analysis: 

System Profile Data on Each Individual Two-Page Assessment: 

Product Knowledge Data on Each Individual Two-Page Assessment: 

Appendix III: Technology Readiness Levels: 

Appendix IV: GAO Contact and Acknowledgments: 

GAO Contact: 

Acknowledgments: 

Related GAO Products: 

Best Practice Reports: 

Recent Weapon Systems Reports: 

Tables: 

Table 1: Key Megasystems Currently in Development: 

Table 2: Average Annual Real Growth in Defense Spending Accounts: 

Table 3: Cost and Cycle Time Growth for 27 Weapon Systems: 

Table 4: Examples of Reduced Buying Power: 

Figures: 

Figure 1: Total Cumulative Planned Expenditures on Current Portfolio of 
Major Defense Acquisition Programs: 

Figure 2: DOD's Projected Annual Investment in Procurement and 
Research, Development, Testing and Evaluation of Weapon Systems: 

Figure 3: Percentage of Programs That Achieved Technology Maturity at 
Key Junctures: 

Figure 4: Average Program RDT&E Cost Growth from First Full Estimate: 

Figure 5: Percentage of Programs That Achieved Design Stability at Key 
Junctures: 

Figure 6: Depiction of a Notional Weapon System's Knowledge as Compared 
with Best Practices: 

Abbreviations: 

AMRAAM: AIM-120 Advanced Medium-Range Air-to-Air Missile: 

ASDS: Advanced SEAL Delivery System: 

ATIRCM/CMWS: Advanced Threat Infrared Countermeasure/Common Missile 
Warning System: 

BFVS: Bradley Fighting Vehicle System: 

CAVES WAA: conformal acoustic velocity sensor wide aperture array: 

CEC: Cooperative Engagement Capability: 

DOD: Department of Defense: 

FBCB2: Force XXI Battle Command Brigade and Below: 

FMTV: Family of Medium Tactical Vehicles: 

FY: fiscal year: 

GAO: Government Accountability Office: 

GBS: Global Broadcast Service: 

GPS: Global Positioning System: 

HIMARS: High Mobility Artillery Rocket System: 

JASSM: Joint Air-to-Surface Standoff Missile: 

JLENS: Joint Land Attack Cruise Missile Defense Elevated Netted Sensor 
System: 

JPATS: Joint Primary Aircraft Training System: 

JPEO: Joint Program Executive Office: 

JSOW: Joint Standoff Weapon: 

MDA: Missile Defense Agency: 

MDAP: Major Defense Acquisition Program: 

MEADS: Medium Extended Air Defense System: 

MIDS-LVT: Multifunctional Information Distribution System - Low Volume 
Terminal: 

MLRS: Multiple Launch Rocket System: 

MM III GRP: Minuteman III Guidance Replacement Program: 

MM III PRP: Minuteman III Propulsion Replacement Program: 

MP-RTIP: Multi-Platform Radar Technology Insertion Program: 

MUE: Modernized User Equipment: 

NA: not applicable: 

NAS: National Airspace System: 

NASA: National Aeronautics and Space Administration: 

R&D: research and development: 

RDT&E: Research, Development, Test and Evaluation: 

SAR: Selected Acquisition Report: 

SBX: Sea-Based X-Band: 

SDD: System Development and Demonstration: 

TBD: to be determined: 

TRL: Technology Readiness Level: 

UAS: Unmanned Aircraft System: 

USMC: U.S. Marine Corps: 

U.S.C.: United States Code: 

March 30, 2007: 

Congressional Committees: 

This is our fifth annual assessment of selected Department of Defense 
(DOD) weapon programs. The breadth of this assessment gives us insights 
into a broad range of programs as well as the overall direction of 
weapon system acquisitions. Our analysis of individual weapon systems 
is grounded in best practices for attaining high levels of product 
knowledge in the areas of technology, design, and production. We find 
that new programs continue to move through development without 
sufficient knowledge, thereby resulting in cost increases and schedule 
delays. The link between knowledge and cost is real and predictable. It 
provides three choices for decision makers: (1) accept the status quo, 
(2) demonstrate high knowledge levels before approving individual 
programs, or (3) increase cost estimates to accurately reflect the 
consequences of insufficient knowledge. 

This report also provides decision makers with an analysis of 
cumulative DOD weapon system investment and buying power. Although DOD 
has doubled its planned investment in major weapon systems from $750 
billion to $1.5 trillion since 2001, unanticipated cost growth has 
reduced the return on this investment. The investment level itself 
represents a significant policy choice, since during that same period, 
the government's total liabilities and unfunded commitments have 
increased from about $20 trillion to about $50 trillion. The nation's 
fiscal exposures increase every day due to known demographic trends, 
continuing operating deficits, and compounding interest costs. Given 
the federal fiscal outlook, what was once a desire to deliver high- 
quality products on time and within budget has become an imperative. 
DOD simply must maximize its return on investment to provide the 
warfighter with needed capabilities and the best value for the 
taxpayer. With over $880 billion remaining to invest in the current 
portfolio of major systems, the status quo is both unacceptable and 
unsustainable. 

Recognizing this dilemma, DOD has embraced best practices in its 
policies, instilled more discipline in requirements setting, 
strengthened training for program managers, and reorganized offices 
that support and oversee programs. Yet this intention has not been 
fully implemented and it has not had a material effect on weapon system 
programs. To translate policy into better programs, several additional 
elements are essential, including having a sound business case for each 
program that focuses on real needs and embodies best practices, sound 
business arrangements, and clear lines of responsibility and 
accountability. DOD must think strategically, separate wants from 
needs, and make tough choices. Specifically, enforcing stated DOD 
policy on individual acquisitions will require DOD to have the will and 
the congressional support to say "no" to programs that do not measure 
up, to recognize and reward savings, and to hold appropriate parties 
accountable for poor outcomes. This does not mean that no risks should 
be taken or that all problems can be foreseen and prevented. Nor is it 
necessary for DOD to sacrifice its record of delivering the best 
weaponry in the world to U.S. forces. However, it is possible for DOD 
to continue to deliver the best weaponry at a reasonable cost and in a 
more timely manner. The taxpayers and our military forces deserve no 
less. 

Signed by: 

David M. Walker: 
Comptroller General of the United States: 

March 30, 2007: 

Congressional Committees: 

This report is GAO's fifth annual assessment of selected weapon 
programs. The Department of Defense (DOD) has doubled its planned 
investment in new weapon systems from approximately $750 billion in 
2001 to almost $1.5 trillion in 2007. In the last 5 years, the number 
of major defense acquisition programs (MDAPs) in development has risen 
from 72 to 85, and systems are becoming increasingly complex in their 
interdependency and technological sophistication. Unfortunately, we 
have seen little change in acquisition outcomes over this same period. 
Although U.S. weapons are among the best in the world, the cost of 
developing a weapon system continues to often exceed estimates by tens 
or hundreds of millions of dollars. This, in turn, results in fewer 
quantities than initially planned for, delays in product delivery, and 
performance shortfalls. Not only is the buying power of the government 
reduced and opportunities to make other investments lost, but the 
warfighter receives less than promised. DOD is depending on the weapons 
currently under development to transform military operations for the 
21st century. The size and scale of current planned investment 
necessitate better results than we have seen in the past. 

The current fiscal environment presents challenges for DOD's plans to 
transform military operations. As the nation begins to address long- 
term fiscal imbalances, DOD is likely to encounter considerable 
pressure to reduce its investment in new weapons. DOD also faces 
pressures within its own budget as investment in new weapon systems 
competes with funds needed to replace equipment and sustain military 
operations in Iraq and Afghanistan. To make more efficient use of 
scarce investment dollars, DOD needs to adhere to a knowledge-based 
approach to product development that centers on attaining high levels 
of knowledge in three elements: technology, design, and production. 
Higher levels of knowledge at program start enable better estimates of 
how much weapon systems will cost to finish and improve the likelihood 
that a program will stay within cost and on schedule. Building upon 
this knowledge--as the product proceeds through design and into 
production--further increases the likelihood that a program will stay 
within cost and schedule targets and deliver promised capabilities, 
thus enabling DOD to buy what was originally budgeted. Lack of 
knowledge in individual programs is amplified when the program is part 
of an interdependent network, as cost overruns and schedule delays 
reverberate across systems of related programs. Additionally, 
successful acquisition outcomes require that program managers have the 
capacity to make knowledge-driven development decisions. In the larger 
context, DOD needs to make changes in its requirements and budgeting 
processes that are consistent with getting the desired outcomes from 
the acquisition process. 

In this report, we assess 62 programs that represent an investment of 
over $950 billion.[Footnote 1] Our objective is twofold: to provide 
decision makers with a cross-cutting analysis of DOD weapon system 
investment and also to provide independent, knowledge-based assessments 
of how well DOD has attained knowledge for individual systems. 

Programs were selected for individual assessment based on several 
factors, including (1) high dollar value, (2) stage in acquisition, and 
(3) congressional interest. The majority of the 62 programs covered in 
the report are considered major defense acquisition programs by 
DOD.[Footnote 2] 

Better Acquisition Outcomes Needed to Accomplish DOD Transformation 
Objectives in Current Fiscal Environment: 

Without improved acquisition outcomes, achieving DOD's transformation 
objectives will be difficult given the current fiscal environment. DOD 
is currently investing in weapon systems that it is depending on to 
transform military operations. While these weapon systems are expected 
to provide unprecedented capabilities, the cost and complexity to 
develop these new systems will be exceptional. However, the nation's 
long-term fiscal imbalances will likely place pressure on the 
affordability of DOD's planned investments. Without better acquisition 
outcomes, there is greater risk that DOD will not be able to achieve 
its transformation objectives. 

DOD's Efforts to Transform Military Operations Expected to Be the Most 
Expensive and Complex Attempted: 

DOD is undertaking new efforts to fundamentally transform military 
operations that are expected to be the most expensive and complex ever. 
In the next 5 to 7 years, DOD plans to increase its investment in 
weapon systems that are key to this transformation. As figure 1 shows, 
DOD's total planned investment in major defense acquisition programs is 
almost $1.5 trillion (2007 dollars) for its current portfolio, with 
over $880 billion of that investment yet to be made. 

Figure 1: Total Cumulative Planned Expenditures on Current Portfolio of 
Major Defense Acquisition Programs: 

[See PDF for image] - graphic text: 

Source: GAO analysis of DOD data. 

Note: The MDA portion of investment data only goes through fiscal year 
2011 and does not include full cost of developing MDA systems. 

[End of figure] - graphic text: 

DOD's annual investment in the research, development, test and 
evaluation (RDT&E) and procurement of major weapon systems is expected 
to rise from $157 billion in 2007 to $173 billion in 2011(see fig. 2), 
peaking at approximately $195 billion in 2013.[Footnote 3] 

Figure 2: DOD's Projected Annual Investment in Procurement and 
Research, Development, Test and Evaluation of Weapon Systems: 

[See PDF for image] - graphic text: 

Source: GAO analysis of DOD data. 

[End of figure] - graphic text: 

The complexity of DOD's transformational efforts is especially evident 
in the development of several large megasystems, major weapon systems 
that depend on the integration of multiple systems--some of which are 
developed as separate programs--to achieve desired capabilities. This 
strategy often requires interdependent programs in concurrent 
development to be closely synchronized and managed, as they may, for 
example, depend on integrated architectures and common standards as a 
foundation for interoperability. If dependent systems are not available 
when needed, then a program could face cost increases, schedule delays, 
or reduced capabilities. Furthermore, the larger scope of development 
associated with these megasystems produces a much greater fiscal impact 
when cost and schedule estimates increase. Table 1 describes three of 
the department's largest and most complex megasystems that are 
currently under way. 

Table 1: Key Megasystems Currently in Development: 

Future Combat Systems (FCS)*; 
FCS* is a suite of manned and unmanned ground and air vehicles, 
sensors, and munitions linked by an information network that will 
enable warfighters to respond to threats with speed, precision, and 
lethality. FCS consists of 18 components and depends on numerous 
complimentary systems outside of FCS. For example, FCS is dependent on 
JTRS* and WIN-T* to provide key communication and networking 
capabilities that it requires to operate effectively. If these systems--
which have both been fraught with cost, schedule, and performance 
problems of their own--are not available as planned, FCS may need to 
seek costly backup technologies, adjust its schedule, or accept reduced 
capabilities. 

Ballistic Missile Defense System (BMDS); 
BMDS consists of 10 elements that will work in concert to defeat enemy 
missiles launched from any range during any phase of their flight, 
including STSS*, GMD*, Aegis BMD*, ABL*, MKV*, KEI*, and THAAD*. While 
almost all of the elements will work separately, some sensor data must 
be shared among the elements for them to work in concert and for BMDS 
to provide full coverage against enemy missiles. For example, the Aegis 
BMD program provides long-range surveillance and tracking for the GMD 
system. While Aegis BMD's functionality has been successfully tested in 
several events, it has never been validated in an end-to-end flight 
test with the GMD system. 

Global Information Grid (GIG); 
The GIG is the cornerstone of DOD's net- centricity strategy. It is a 
system of interdependent systems that make up a secure, reliable 
network that enables users to access and share information at virtually 
any location and at any time. Five major programs are related to GIG's 
core network: TSAT*, JTRS*, GIG-Bandwidth Expansion, Network Centric 
Enterprise Services, and the Cryptography Transformation Initiative. 
Both JTRS* and TSAT* have recently been restructured due to--among 
other things--technical difficulties, complicating DOD's efforts to 
realize the GIG as planned. 

Source: GAO. 

Note: Programs with an asterisk are assessed in this report. 

[End of table] 

The Current Fiscal Environment Presents Challenges to Accomplishing 
DOD's Transformation Objectives: 

The nation's long-term fiscal imbalances will likely place pressure on 
the affordability of DOD's planned investment in major weapon systems, 
reducing the ability of budgets to accommodate typical margins of error 
in terms of cost increases and schedule delays. As entitlement programs 
like Social Security, Medicare, and Medicaid consume a growing 
percentage of available resources, discretionary programs--including 
defense--face competition for the increasingly scarce remaining funds. 
Sustaining real top line budget increases in any discretionary program 
will be difficult in this constrained resource environment. 

DOD budget projections conform to this tightening framework by 
offsetting growth in procurement spending with reductions in RDT&E, 
personnel, and other accounts. The minimal real increases projected in 
defense spending through fiscal year 2011 depend on these offsets. 
However, as table 2 shows, these projections do not reflect recent 
experience, nor do they take into account higher than anticipated cost 
growth and schedule delays, which can compound the fiscal impact and 
affordability of DOD's planned investment. 

Table 2: Average Annual Real Growth in Defense Spending Accounts: 

Account: Procurement; 
2000-2006 (actual): 5.61%; 
2007-2011 (projected): 6.46%. 

Account: RDT&E; 
2000-2006 (actual): 8.42%; 
2007-2011 (projected): - 2.95%. 

Account: Military personnel; 
2000-2006 (actual): 3.67%; 
2007-2011 (projected): -0.68%. 

Account: Operation and Maintenance; 
2000-2006 (actual): 5.55%; 
2007- 2011 (projected): 1.00%. 

Account: Other; 
2000-2006 (actual): 5.18%; 
2007-2011 (projected): - 3.85%. 

Account: Total; 
2000-2006 (actual): 5.45%; 
2007-2011 (projected): 0.90%. 

Source: GAO analysis of DOD data. 

[End of table] 

Since 2004, total costs for a common set[Footnote 4] of 64 major weapon 
systems under development have grown in real terms by 4.9 percent per 
year--costing $165 billion (constant 2007 dollars) more in 2007 than 
planned for in 2004. Over this same period, the funding needed to 
complete these programs has increased despite the significant 
investment that has already been made. Furthermore, as congressional 
leaders advise DOD to incorporate the costs of the war into the annual 
budget rather than into supplemental appropriations, trade-offs will 
likely be required among the resource demands of repairing or replacing 
those weapon systems damaged in Iraq and Afghanistan and future 
investments to modernize and transform the armed forces. If DOD cannot 
deliver its new weapon programs within estimated costs, difficult 
choices may have to be made regarding which investments to pursue and 
which to discontinue. 

DOD Weapon Programs Consistently Experience a Reduced Return on 
Investment: 

While DOD is pursuing plans to transform military operations and 
committing more investment dollars to realize these new weapon systems, 
it regularly realizes a reduced return on their investment. DOD 
programs typically take longer to develop and cost more to buy than 
planned, placing additional demands on available funding. As shown in 
table 3, total RDT&E costs for a common set[Footnote 5] of 27 weapon 
programs that we were able to assess since development began increased 
by almost $35 billion, or 33.5 percent, over the original business case 
(first full estimate). The same programs have also experienced an 
increase in the time needed to develop capabilities with a weighted 
average schedule increase of over 23 percent.[Footnote 6] 

Table 3: Cost and Cycle Time Growth for 27 Weapon Systems (billions of 
constant 2007 dollars): 

Total cost; 
First full estimate: $506.4; 
Latest estimate: $603.1; 
Percent change: 19.1%. 

RDT&E cost; 
First full estimate: $104.7; 
Latest estimate: $139.7; 
Percent change: 33.5%. 

Weighted average acquisition cycle time[A] (months); 
First full estimate: 137.9; 
Latest estimate: 170.2; 
Percent change: 23.5%. 

Source: GAO analysis of DOD data. 

[A] This is a weighted estimate of average acquisition cycle time for 
the 27 programs based on total program costs at the first full and 
latest estimates. The simple average for these two estimates was 98.9 
months for the first full estimate and 124.6 months for the latest 
estimate resulting in a 26.1 percent change. 

[End of table] 

The consequence of cost and cycle time growth is often manifested in a 
reduction of the buying power of the defense dollar. As costs rise and 
key schedule milestones are delayed, programs are sometimes forced to 
make trade-offs in quantities, resulting in a reduction in buying 
power. Quantities for 12 of the common set programs have been reduced 
since their first estimate.[Footnote 7] Additionally, the weighted 
average program acquisition unit cost for 26 of the 27 programs 
increased by roughly 39 percent, meaning that each unit cost 
significantly more to buy than originally planned.[Footnote 8] Table 4 
illustrates 6 programs with a significant reduction of buying power. 
Some of these programs experienced higher costs for the same initial 
quantity. 

Table 4: Examples of Reduced Buying Power (constant 2007 dollars): 

Program: Joint strike fighter; 
Initial estimate: $196.5 billion; 
Initial quantity: 2,866 aircraft; 
Latest estimate: $223.3 billion; 
Latest quantity: 2,458 aircraft; 
Percentage of unit cost increase: 32.8. 

Program: Future combat systems; 
Initial estimate: $85.5 billion; 
Initial quantity: 15 systems; 
Latest estimate: $131.7 billion; 
Latest quantity: 15 systems; 
Percentage of unit cost increase: 54.1. 

Program: V-22 Joint Services Advanced Vertical Lift Aircraft; 
Initial estimate: $36.9 billion; 
Initial quantity: 913 aircraft; 
Latest estimate: $50.0 billion; 
Latest quantity: 458 aircraft; 
Percentage of unit cost increase: 170.2. 

Program: Evolved Expendable Launch Vehicle; 
Initial estimate: $16.0 billion; 
Initial quantity: 181 vehicles; 
Latest estimate: $28.6 billion; 
Latest quantity: 138 vehicles; 
Percentage of unit cost increase: 134.7. 

Program: Space Based Infrared System High; 
Initial estimate: $4.2 billion; 
Initial quantity: 5 satellites; 
Latest estimate: $10.4 billion; 
Latest quantity: 3 satellites; 
Percentage of unit cost increase: 311.6. 

Program: Expeditionary Fighting Vehicle; 
Initial estimate: $8.4 billion; 
Initial quantity: 1,025 vehicles; 
Latest estimate: $11.3 billion; 
Latest quantity: 1,025 vehicles; 
Percentage of unit cost increase: 33.7. 

Source: GAO analysis of DOD data. Images sourced in their respective 
order: JSF Program Office; Program Manager, Future Combat
Systems (BGT); V-22 Joint Program Office; (Left) © 2005 ILS/Lockheed 
Martin, (right) © 2003 The Boeing Company; Lockheed Martin
Space Systems Company; General Dynamics Land Systems. 

[End of table] 

A Knowledge-Based Approach Can Lead to Better Acquisition Outcomes: 

Over the last several years, we have undertaken a body of work that 
examines weapon acquisition issues from a perspective centered on best 
practices in system development. We have found that leading commercial 
firms pursue an approach that is based in knowledge, where high levels 
of product knowledge are demonstrated at critical points in 
development. Programs take steps to gather knowledge that demonstrates 
that their technologies are mature, their designs are stable, and their 
production processes are in control. This knowledge helps programs 
identify risks early and address them before they become problems. The 
result of a knowledge-based approach is a product delivered on time, 
within budget, and with the promised capabilities. Based on our best 
practice work, we have identified three key knowledge points--junctures 
where programs need to display critical levels of knowledge to proceed. 
These knowledge points and associated indicators are defined as 
follows: 

* Knowledge point 1: Resources and needs match. This point occurs when 
a sound business case is made for the product--that is, a match is made 
between the customer's requirements and the product developer's 
available resources in terms of knowledge, time, money, and capacity. 
Achieving a high level of technology maturity at the start of system 
development is an important indicator of whether this match has been 
made. This means that the technologies needed to meet essential product 
requirements have been demonstrated to work in their intended 
environment. 

* Knowledge point 2: Product design is stable. This point occurs when a 
program determines that a product's design is stable--that is, it will 
meet customer requirements, as well as cost, schedule, and reliability 
targets. A best practice is to achieve design stability at the system- 
level critical design review, usually held midway through development. 
Completion of at least 90 percent of engineering drawings at the system 
design review provides tangible evidence that the design is stable. 

* Knowledge point 3: Production processes are mature and the design is 
reliable. This point is achieved when it has been demonstrated that the 
company can manufacture the product within cost, schedule, and quality 
targets. A best practice is to ensure that all key manufacturing 
processes are in statistical control--that is, they are repeatable, 
sustainable, and capable of consistently producing parts within the 
product's quality tolerances and standards--at the start of production. 
Demonstration of a prototype that meets reliability and performance 
requirements prior to the production decision, can minimize production 
and post-production costs. 

The attainment of each successive knowledge point builds upon the 
preceding one. If a program is falling short in one element, like 
technological maturity, it is harder to achieve design stability and 
almost impossible to achieve production maturity. In particular, 
separating technology development from product development can help 
reduce costs and deliver a product on time and within budget. 

Most Programs Proceed with Low Levels of Knowledge at Critical 
Junctures: 

To get the most out of its weapon system investments, DOD revised its 
acquisition policy in May 2003 to incorporate a knowledge-based, 
evolutionary framework. However, DOD's policy does not incorporate 
adequate controls to ensure the effective implementation of a knowledge-
based acquisition process. As we have reported in the past, most of the 
programs we reviewed this year proceeded with lower levels of knowledge 
at critical junctures and attained key elements of product knowledge 
later in development than specified in DOD policy. The cost and 
schedule consequences of delayed knowledge attainment are significant. 

Programs That Enter System Development with Immature Technologies Cost 
More and Take Longer: 

Our 2007 assessment continues to show that very few programs start with 
mature technologies (see fig. 3). This initial knowledge deficit 
cascades through design and production, so that at each key juncture, 
decision makers have to rely on assumptions in lieu of knowledge. Only 
16 percent of programs in our assessment demonstrated all of their 
critical technologies as mature at the start of development, meaning 
that the vast majority of programs failed to achieve knowledge point 1 
when they should have. By design review, when programs should have 
attained knowledge point 2 by demonstrating a stable design, only 44 
percent had attained knowledge point 1. In the past 2 years alone, 
several programs have passed through their development start or design 
review with immature technologies.[Footnote 9] Without mature 
technologies, it is difficult to know whether the product being 
designed and produced will deliver the desired capabilities or, 
alternatively, if the design allows enough space for technology 
integration. Yet, 33 percent of the programs we assessed had still not 
attained knowledge point 1 by the time of their decision to start 
production. 

Figure 3: Percentage of Programs That Achieved Technology Maturity at 
Key Junctures: 

[See PDF for image] - graphic text: 

Source: GAO analysis of DOD data. 

[End of figure] - graphic text: 

Over the next 5 years, many of the programs in our assessment plan to 
hold a design review or make a production decision without 
demonstrating the level of technology maturity that should have been 
seen before the start of development. Twenty-three of the programs we 
assessed plan to hold a design review in the next 5 years. Six of those 
23 did not provide a projection of their expected technology maturity 
by that point. Of the remaining 17 programs, only 6 reported that they 
expect to have achieved technology maturity by the time of their design 
review. Similarly, 31 of the programs in our assessment plan to make a 
production decision in the next 5 years, but 12 programs did not 
provide a projection of the technology maturity at that point and 5 of 
the remaining 19 programs still expect to have immature technologies at 
that time--not having achieved any of the knowledge points (technology 
maturity, design stability, or production maturity) at production 
start. 

Consequences accrue to programs that are still working to mature 
technologies well into system development, when they should be focusing 
on maturing system design and preparing for production. Programs that 
start with mature technologies experience less cost growth than those 
that start with immature technologies. Figure 4 shows that programs 
that start with mature technologies saw their research, development, 
test and evaluation cost estimates increase by 2.6 percent over the 
first full estimate. 

Figure 4: Average Program RDT&E Cost Growth from First Full Estimate: 

[See PDF for image] - graphic text: 

Source: GAO analysis of DOD data. 

[End of figure] - graphic text: 

In comparison, RDT&E costs for programs that began development with 
immature technologies increased by 32.3 percent over the first full 
estimate. Programs that started development with mature technologies 
also manage to stay on schedule, averaging less than a 1-month delay 
over their initial timetable. Alternatively, programs that began 
development with immature technologies have experienced average delays 
of more than 20 months over their original schedules. Furthermore, 
programs that enter development with all of their technologies mature 
tend to maintain their buying power, achieving their promised return on 
investment. Program acquisition unit costs increased by less than 1 
percent for programs that reached knowledge point 1 by development 
start, whereas the programs that started development with immature 
technologies experienced an average program acquisition unit cost 
increase of 30 percent over the first full estimate.[Footnote 10] 

DOD's policy states that technologies should be demonstrated in at 
least a relevant environment before a program enters system 
development; whereas GAO utilizes the best practice standard that calls 
for technology to be assessed one step higher--demonstration in a 
realistic environment. If we applied DOD's lower standard, 32 percent 
of programs entered development with all of their technologies mature 
compared with 16 percent using the best practice standard. Using either 
standard, most programs still do not begin development with mature 
technology. There is a cost consequence of entering development with 
technologies at DOD's lower standard. Programs that meet DOD's 
technology maturity standard experience an average RDT&E cost growth of 
approximately 8.4 percent, whereas programs that enter development with 
all technologies at the higher standard specified by best practices saw 
their RDT&E cost estimates grow by 2.6 percent. 

Programs Continue Past Design Reviews without Demonstrating a Stable 
Design: 

The majority of programs in our assessment that have held a design 
review did so without first achieving a stable design. As illustrated 
in figure 5, only 27 percent of programs in our assessment demonstrated 
that they had attained a stable design at the time of design review. 
Thirty-three percent of programs had still not achieved design 
stability by the time they decided to start production. Twenty-three 
programs in our assessment are currently scheduled to hold their 
critical design reviews by the year 2012. Only 5 of these programs 
expect to have achieved design stability by the time of their critical 
design reviews. 

Figure 5: Percentage of Programs That Achieved Design Stability at Key 
Junctures: 

[See PDF for image] - graphic text: 

Source: GAO analysis of DOD data. 

[End of figure] - graphic text: 

Most Programs Do Not Collect Data to Measure Production Maturity: 

Only 2 of the 20 programs we assessed that are now in production 
reported using statistical process control data to measure the maturity 
of the production process, which is the data needed to demonstrate 
knowledge point 3.[Footnote 11] Neither of these programs had reached 
production maturity--having all of the production processes under 
statistical control--by knowledge point 3. 

In addition to ensuring that the program meets all knowledge points 
prior to starting production, prototypes should be constructed and 
tested to make sure that the weapons being produced meet performance 
and reliability requirements. For example, despite having achieved 
technology maturity and design stability, the Expeditionary Fighting 
Vehicle discovered reliability failures during preproduction testing. 
As a result, the program has delayed production and is being 
restructured to incorporate improvements in the vehicle design. Thirty- 
two of the programs we assessed provided us information on when they 
had or planned to have first tested a fully configured, integrated 
production representative article (i.e., prototype) in its intended 
environment. Of those programs, 47 percent reported they have already 
conducted or planned to conduct a developmental test of a production 
representative article (i.e., prototype) before they make their initial 
production decision. GAO's work has shown that production and 
postproduction costs are minimized when a prototype is demonstrated to 
meet reliability and performance requirements prior to the production 
decision. 

Effective Management Capacity and Control Are Essential to Successfully 
Executing a Knowledge-Based Approach: 

Effective program management and control are essential to facilitating 
a knowledge-based acquisition approach. The capacity to manage 
requirements, control funding, and oversee the contracted development 
of critical technologies, product designs, and production processes 
better ensures that programs stay within budget, keep on schedule, and 
deliver the capabilities originally promised. However, our past work 
has shown that DOD does not have an environment that facilitates 
effective program management. At the same time, DOD is increasingly 
relying on contractors to perform key management functions. In 
addition, inadequate knowledge development has resulted in the extended 
use of cost reimbursement contracts in some cases. Under these 
contracts, the government bears most of the cost risk. 

DOD Does Not Provide Program Managers an Environment That Facilitates a 
Knowledge-Based Acquisition Approach: 

Our past work has shown that DOD does not have an environment that 
facilitates effective program management and programs have little 
incentive to pursue knowledge-based acquisition paths.[Footnote 12] In 
particular, our work has shown that program managers are not empowered 
to execute weapons acquisition programs nor are they set up to be 
accountable for results. Program managers cannot veto new requirements, 
control funding, or control staff. In addition, DOD has not established 
effective controls that require decision makers to measure progress 
against specific criteria and ensure that managers capture key 
knowledge before moving to the next acquisition phase. Without 
effective controls that require program officials to satisfy specific 
criteria, it is difficult to hold decision makers or program managers 
accountable to cost and schedule targets. Moreover, the incentive 
structure of program managers--based primarily on maintaining program 
funding--contributes to the consistent underestimation of costs, 
optimistic schedules, and the suppression of bad news that could 
jeopardize funding. Furthermore, rather than lengthy assignment periods 
between key milestones as suggested by best practices, many of the 
programs we reviewed had multiple program managers within the same 
milestone. This promotes shortsightedness and reduces accountability 
for poor outcomes. Consequently, programs have little incentive to 
pursue knowledge-based acquisition paths as program funding is not tied 
to successfully reaching knowledge points before a program can proceed. 

Contractors Increasingly Perform Key Program Management Functions: 

DOD is relying on contractors in new ways to manage and deliver weapon 
systems. While DOD has downsized its acquisition workforce by almost 
half in the last decade, DOD has increased its contract obligations for 
professional, administrative, and management support from $10.8 billion 
in 1996 to $28.3 billion in 2005 (both in constant 2005 dollars). Based 
on our work looking at various major weapon systems, we have observed 
that DOD has given contractors increased program management 
responsibilities to develop requirements, design products, and select 
major system and subsystem contractors. In part, this increased 
reliance has occurred because DOD is experiencing a critical shortage 
of certain acquisition professionals with technical skills related to 
systems engineering, program management, and cost estimation. The 
increased dependence on contractors raises questions about the capacity 
of DOD to manage new weapon system programs, an undertaking made more 
difficult when technology, design, and production knowledge are 
lacking. 

Inadequate Knowledge Development Has Resulted in the Extended Use of 
Cost Reimbursement Contracts in Some Cases: 

The extended use of cost reimbursement contracts may be a further 
consequence of inadequate knowledge attainment. Under a cost 
reimbursement contract, the government bears most of the cost risk--the 
risk of paying more than it expected. DOD typically uses cost 
reimbursement contracts for development and can use fixed price 
contracts for production and deployment. If technologies are mature, 
designs are stable, and production processes are in place, then 
production costs are more likely to be known. In these cases the 
program can more easily award a fixed price contract. However, we found 
several examples of programs extending the use of cost reimbursement 
contracts into production and deployment instead of using fixed price 
contracts, reflecting uncertainties in program development. While the 
extended use of cost reimbursement contracts may be appropriate under 
these circumstances, it is indicative of programs proceeding through 
the acquisition process with inadequate knowledge. 

How to Read the Knowledge Graphic for Each Program Assessed: 

We assess each program in two pages and depict the extent of knowledge 
in a stacked bar graph and provide a narrative summary at the bottom of 
the first page. As illustrated in figure 6, the knowledge graph is 
based on the three knowledge points and the key indicators for the 
attainment of knowledge: technology maturity (depicted in orange), 
design stability (depicted in green), and production maturity (depicted 
in blue). A "best practice" line is drawn based on the ideal attainment 
of the three types of knowledge at the three knowledge points. The 
closer a program's attained knowledge is to the best practice line, the 
more likely the weapon will be delivered within estimated cost and 
schedule. A knowledge deficit at the start of development--indicated by 
a gap between the technology knowledge attained and the best practice 
line--means the program proceeded with immature technologies and faces 
a greater likelihood of cost and schedule increases as technology risks 
are discovered and resolved. 

Figure 6: Depiction of a Notional Weapon System's Knowledge as Compared 
with Best Practices: 

[See PDF for image] - graphic text: 

Source: GAO. 

[End of figure] - graphic text: 

An interpretation of this notional example would be that the system 
development began with key technologies immature, thereby missing 
knowledge point 1. Knowledge point 2 was not attained at the design 
review, as some technologies were still not mature and only a small 
percentage of engineering drawings had been released. Projections for 
the production decision show that the program is expected to achieve 
greater levels of maturity but will still fall short. It is likely that 
this program would have had significant cost and schedule increases. 

We conducted our review from June 2006 through March 2007 in accordance 
with generally accepted government auditing standards. Appendix II 
contains detailed information on our methodology. 

Assessments of Individual Programs: 

Our assessments of the 62 weapon systems follow. 

Airborne Laser (ABL): 

MDA's ABL element is being developed in capability-based blocks to 
destroy enemy missiles during the boost phase of flight. Carried aboard 
a modified Boeing 747 aircraft, ABL employs a beam control/fire control 
subsystem to focus the beam on a target, a high-energy chemical laser 
to rupture the fuel tanks of enemy missiles, and a battle management 
subsystem to plan and execute engagements. We assessed the Block 2004 
design, which is being further developed in Block 2006, and is expected 
to lead to a lethality demonstration in 2009. 

[See PDF for image] - graphic text: 

Source: Airborne Laser program Office. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Boeing: 

Program office: Kirtland AFB, N.M. 

Funding FY07-FY11: 

R&D: $2,515.4 million: 

Procurement: $0.0 million: 

Total funding: $2,515.4 million: 

Procurement quantity: NA: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 09/2003: $5,749.7; 
Latest 08/2006: $5,449.2; 
Percent change: -5.2. 

Procurement cost; 
As of 09/2003: $0.0; 
Latest 08/2006: $0.0; 
Percent change: 0.0. 

Total program cost;
As of 09/2003: $5,749.7; 
Latest 08/2006: $5,449.2; 
Percent change: -5.2. 

Program unit cost; 
As of 09/2003: NA; 
Latest 08/2006: NA; 
Percent change: NA. 

Total quantities; 
As of 09/2003: NA; 
Latest 08/2006: NA; 
Percent change: NA. 

Acquisition cycle time (months); 
As of 09/2003: NA; 
Latest 08/2006: NA; 
Percent change: NA. 

Columns include all known costs and quantities from the program's 
inception through fiscal year 2009. Total known program cost through 
fiscal year 2011 is $6,435.6 million. 

[End of table] 

Program officials expected ABL to provide an initial capability during 
Block 2006, but this event was delayed and none of ABL's seven critical 
technologies are fully mature. During Block 2006, the program continues 
work on a prototype expected to provide the basic design for a future 
operational capability. Program officials expected to demonstrate the 
prototype's critical technologies during a flight test in late 2008, 
but recent testing problems delayed the test until fiscal year 2009. 
MDA released 100 percent of the engineering drawings for the 
prototype's design, but additional drawings may be needed if problems 
encountered during future testing force design changes. The program's 
prime contractor replanned future contract work in August 2004. 
However, the program continues to overrun its fiscal year cost and 
schedule budgets. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

ABL Program: 

Technology Maturity: 

The program office assessed all seven of its critical technologies--the 
six-module laser, missile tracking, atmospheric compensation, 
transmissive optics, optical coatings, jitter control, and managing the 
high-power beam--as nearly mature. According to program officials, all 
of these technologies have been demonstrated in a relevant environment 
and are needed to provide the system with an initial operational 
capability. 

Although the program office assessed jitter control as nearly mature, 
the technology will pose a high risk until it is demonstrated in flight 
tests. Jitter--a phenomenon pertaining to the technology of controlling 
and stabilizing the high-energy laser beam so that vibration unique to 
the aircraft does not degrade the laser's aimpoint--is critical to the 
operation of the laser. The ABL's laser beam must be stable enough to 
impart sufficient energy on a fixed spot of the target to rupture its 
fuel tank. Program officials told us that they will continue to refine 
jitter mitigation efforts and will learn more about jitter control in 
future tests. 

Since our last assessment, the program office has reevaluated the 
maturity level for one of its critical technologies--managing the high- 
power beam. The technology was reported as fully mature, but has since 
been assessed as nearly mature as it has not yet been demonstrated in a 
realistic environment. The program plans to demonstrate all 
technologies in a realistic environment during a flight test of the 
system prototype, referred to as a lethal demonstration, in which ABL 
will attempt to shoot down a short-range ballistic missile. Challenges 
with integrating the laser and beam control/fire control subcomponents 
have delayed this test into 2008, and recent technical challenges 
associated with developing and testing the beam control/fire control 
software have caused further delays in the lethal demonstration. 

Design Stability: 

We could not assess ABL's design stability because the element's 
initial capability will not be fully developed until the second 
aircraft is well under way. While the program has released 100 percent 
of its engineering drawings for the prototype, it is unclear whether 
the design of the prototype aircraft can be relied upon as a good 
indicator of design stability for the second aircraft. More drawings 
may be needed if the design is enhanced or if problems encountered 
during flight testing force design changes. 

Production Maturity: 

The program is producing a limited quantity of hardware for the 
system's prototype. However, we did not assess the production maturity 
of ABL because MDA has not made a production decision. 

Other Program Issues: 

In 2004, the ABL program restructured its prime contract to focus on 
near-term milestones and to provide a more realistic budget and 
schedule for the remaining work. The program further refined its work 
plan in 2005. However, recent technical challenges associated with the 
program's beam control/fire control ground test series are causing the 
contractor to experience further cost growth and schedule slip. As of 
June 2006, the program was overrunning its fiscal year 2006 budget by 
approximately $49 million and was unable to complete approximately $23 
million of planned work. 

Additionally, the program has experienced a number of quality-related 
issues that may have impacted laser performance. During fiscal year 
2006, several laser subcomponents failed or were found to be deficient. 
Program officials believe that a number of the deficiencies and 
failures were attributable to poor quality control and may have 
contributed to the laser achieving 83 percent of its design power, 
rather than the 100 percent originally planned. According to officials, 
the program will test the laser power again once all deficiencies are 
resolved. 

Agency Comments: 

MDA provided technical comments, which were incorporated as 
appropriate. 

[End of section] 

Aerial Common Sensor (ACS): 

The Army's ACS is an airborne reconnaissance, intelligence, 
surveillance, and target acquisition system and is being designed to 
provide timely intelligence data on threat forces to the land component 
commander. The ACS will replace the Guardrail Common Sensor and the 
Airborne Reconnaissance Low airborne systems. ACS will co-exist with 
current systems until it is phased in and current systems retire. 

[See PDF for image] - graphic text: 

Source: Graphic artist rendering of generic Airborne ISR platform. No 
photo image available. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: TBD: 

Program office: Fort Monmouth, N.J. 

Funding needed to complete: 

R&D: $792.8 million: 

Procurement: $11.9 million: 

Total funding: $804.8 million: 

Procurement quantity: 33: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 07/2004: $1,237.9; 
Latest 12/2005: $1,158.9; 
Percent change: -6.4. 

Procurement cost; 
As of 07/2004: $2,994.3; 
Latest 12/2005: $12.0; 
Percent change: -99.6. 

Total program cost; 
As of 07/2004: $4,236.6; 
Latest 12/2005: $1,170.9; 
Percent change: -72.4. 

Program unit cost; 
As of 07/2004: $111.489; 
Latest 12/2005: $30.814; 
Percent change: -72.4. 

Total quantities; 
As of 07/2004: 38; 
Latest 12/2005: 38; 
Percent change: 0.0. 

Acquisition cycle time (months); 
As of 07/2004: 127; 
Latest 12/2005: TBD; 
Percent change: TBD. 

These costs and quantities are expected to change due to the ACS 
program restructuring, as is the acquisition timeline. 

[End of table] 

Due to a significant increase in ACS weight, the Army terminated the 
development contract. By the time the contract was terminated, three 
technologies had reached maturity and one more was nearing maturity. 
The Army expected to demonstrate the maturity of all but one critical 
technology by the original design review in December 2006. The program 
office estimated that 50 percent of drawings would have been releasable 
at that time. The Army is currently reassessing requirements for the 
program and plans to restart development in the third quarter of fiscal 
year 2009. The new date for design review has not been determined. Some 
requirements may be eliminated, moved to a future spiral, or assigned 
to another system. ACS system technologies maturity, design, cost, and 
schedule will likely be affected. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

ACS Program: 

Technology Maturity: 

Only one of ACS's six critical technologies was mature when the program 
initially started development in July 2004 and two more were nearing 
maturity. When the Army terminated the development contract, one 
additional technology was nearing maturity. The maturity of one of the 
remaining technologies was tied to the development of the airborne 
version of the Joint Tactical Radio System, which would not have been 
available until after ACS was fielded. The Army expected that all of 
the critical technologies except the one tied to the radios would be 
fully mature by December 2006. It is not currently clear which 
requirements might be eliminated or the resulting impact to the 
technology maturity. However, the Army plans to seek approval for 
development start only after all its critical technologies have reached 
maturity. 

Design Stability: 

The program office estimated that 50 percent of the drawings expected 
for ACS would have been releasable by the original design review, which 
was scheduled for December 2006. However, in December 2004, 5 months 
after the program began development, the contractor informed the Army 
that the weight of the prime mission equipment had exceeded the 
structural limits of the aircraft. In September 2005, the Army ordered 
the contractor to stop all work under the existing contract and in 
January 2006 terminated the contract for system development. As a 
result, the new date for design review has not been determined, but it 
is unlikely that any of the original drawings will be relevant at the 
time of program restart due to technology obsolescence and program 
redefinition. 

Other Program Issues: 

In December 2005, just prior to contract termination, the Deputy 
Secretary of Defense directed the Army and Navy, in coordination with 
the Air Force, Joint Staff, and others to conduct a study of joint 
multi-intelligence airborne ISR needs. The report findings, which were 
due to the Deputy Secretary of Defense by the end of July 2006, are 
still pending. Four options are being considered. One option would be 
to restart system development with most or all of the previous 
requirements intact. The second option would be to field a system that 
is more capable than those currently operating while deferring some 
requirements for future spirals. This option would probably still 
require a business jet or larger platform to permit growth. The third 
option would be to field two systems with some requirements on a manned 
platform and some on an unmanned platform. The fourth option would be 
to field an unmanned system. The Army expects to make a decision in 
time for it to be reflected in the fiscal year 2008 president's budget. 

Agency Comments: 

In commenting on a draft of this assessment, the Army provided 
technical comments, which were incorporated as appropriate. 

[End of section] 

Aegis Ballistic Missile Defense (Aegis BMD): 

MDA's Aegis BMD element is a sea-based missile defense system being 
developed in incremental, capability-based blocks to protect deployed 
U.S. forces, allies, and friends from short-to-medium-range ballistic 
missile attacks. Key components include the shipboard SPY-1 radar, hit- 
to-kill missiles, and command and control systems. It will also be used 
as a forward-deployed sensor for surveillance and tracking of 
intercontinental ballistic missiles. We assessed the missile to be 
delivered in Block 2006, the Standard Missile 3 (SM-3) Block 1A. 

[See PDF for image] - graphic text: 

Source; Aegis BMD Program Office. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Lockheed Martin (WS), Raytheon (SM-3): 

Program office: Arlington, Va. 

Funding FY07-FY11: 

R&D: $4,553.3 million: 

Procurement: $0.0 million: 

Total funding: $4,553.3 million: 

Procurement quantity: NA: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 11/2003: $7,371.5; 
Latest 07/2006: $9,038.8; 
Percent change: 22.6. 

Procurement cost; 
As of 11/2003: $0.0; 
Latest 07/2006: $0.0; 
Percent change: 0.0. 

Total program cost; 
As of 11/2003: $7,371.5; 
Latest 07/2006: $9,038.8; 
Percent change: 22.6. 

Program unit cost; 
As of 11/2003: NA; 
Latest 07/2006: NA; 
Percent change: NA. 

Total quantities; 
As of 11/2003: NA; 
Latest 07/2006: NA; 
Percent change: NA. 

Acquisition cycle time (months); 
As of 11/2003: NA; 
Latest 07/2006: NA; 
Percent change: NA. 

Costs and quantities are for all known blocks from the program's 
inception through fiscal year 2009. Total known program cost through 
fiscal year 2011 is $10,688.5. 

[End of table] 

According to program officials, the Block 1A missile being fielded 
during 2006-2007 has mature technologies and a stable design. However, 
we believe that two critical technologies are less mature because full 
functionality of these two capabilities of the new missile has not been 
demonstrated in a realistic environment. If events occur that require 
the new capability, program officials believe the upgrades will perform 
as expected. Even without them, officials noted that the missile 
provides a credible defense against the Block 2004 threat set and some 
of the Block 2006 threat set. All drawings have been released to 
manufacturing. The program is not collecting statistical data on its 
production process of the Block 1A missile but is using other means to 
gauge production readiness. 

Figure: Attainment of product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

Aegis BMD Program: 

Technology Maturity: 

Program officials believe that all three technologies critical to the 
SM-3 Block 1A missile are mature. However, we believe that two of these 
critical technologies are less mature. The warhead's seeker has been 
fully demonstrated in flight tests and is mature. We believe two other 
technologies, which were upgraded to create the SM-3 Block 1A, are less 
mature: the Solid Divert and Attitude Control System (SDACS) and the 
Third Stage Rocket Motor. While some modes of these technologies have 
been demonstrated in flight tests, the "pulse mode" of the SDACS, which 
provides endgame divert for the kinetic warhead, and the "zero pulse 
mode" of the Third Stage Rocket Motor, which increases the missile's 
capability against shorter-range threats, have not been successfully 
flight-tested. The SDACS operation in pulse mode failed during a June 
2003 flight test. According to program officials, the test failure was 
a result of multiple issues with the original design. The program has 
implemented changes to address these problems. While recent ground 
tests have demonstrated performance of the new configuration, the 
changes have not yet been flight tested. A flight test in December 2006 
that would have partially demonstrated the pulse SDACS was not 
completed because the missile failed to launch. A flight test that will 
fully test the new SDACS design is not planned until 2008. 

The Third Stage Rocket Motor is capable of three modes of operation, 
two of which have been added in Block 2006. While both new modes failed 
initial ground testing, one was later successfully flight tested in 
June 2006 after design changes. The second, zero pulse mode, has also 
undergone design changes. While program officials believe they have a 
working design and that the missile can use this mode if needed, it has 
not yet been flight-tested. The first flight-test that could 
demonstrate this capability is not scheduled until fiscal year 2009. 

Design Stability: 

Program officials reported that the design for the SM-3 Block 1A 
missiles being produced during Block 2006 is stable with 100 percent of 
its drawings released to manufacturing. Although two upgrades to the SM-
3 Block 1A missile have not been fully flight-tested, the program does 
not anticipate any additional design changes related to these upgrades. 

Production Maturity: 

We did not assess the production maturity of the 22 SM-3 missiles being 
procured for Block 2006. Program officials stated that the contractor's 
processes are not yet mature enough to statistically track production 
processes. The Aegis BMD program is using other means to assess 
progress in production and manufacturing, such as tracking rework 
hours, cost of defects per unit, and other defect and test data. 

Other Program Issues: 

The Aegis BMD element builds upon the existing capabilities of Aegis- 
equipped Navy cruisers and destroyers. Planned hardware and software 
upgrades to these ships will enable them to carry out the ballistic 
missile defense mission. In particular, the program is upgrading Aegis 
destroyers for long-range surveillance and tracking of intercontinental 
ballistic missiles. The program plans to complete the upgrade of 14 
destroyers by the end of the Block 2006 period. In several events, this 
functionality has been successfully tested, but it has never been 
validated in an end-to-end flight test with the GMD system, for which 
it is providing long-range surveillance and tracking. Since our last 
assessment, Aegis BMD's planned budget through fiscal year 2009 
increased by $362.4 million (4.2 percent), primarily in fiscal years 
2008 and 2009. 

Agency Comments: 

The program office provided technical comments to a draft of this 
assessment, which were incorporated as appropriate. 

[End of section] 

Advanced Extremely High Frequency (AEHF) Satellites: 

The Air Force's AEHF satellite system will replenish the existing 
Milstar system with higher capacity, survivable, jam-resistant, 
worldwide, secure communication capabilities for strategic and tactical 
warfighters. The program includes satellites and a mission control 
segment. Terminals used to transmit and receive communications are 
acquired separately by each service. AEHF is an international 
partnership program that includes Canada, the United Kingdom, and the 
Netherlands. We assessed the satellite and mission control segments. 

[See PDF for image] - graphic text: 

Source: Advanced EHF Program Office. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Lockheed Martin: 

Program office: El Segundo, Calif. 

Funding needed to complete: 

R&D: $1,302.8 million: 

Procurement: $76.3 million: 

Total funding: $1,379.1 million: 

Procurement quantity: 0: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 10/2001: $4,519.9; 
Latest 12/2005: $5,588.0; 
Percent change: 23.6. 

Procurement cost; 
As of 10/2001: $1,336.8; 
Latest 12/2005: $678.7; 
Percent change: -49.2. 

Total program cost; 
As of 10/2001: $5,856.7; 
Latest 12/2005: $6,266.7; 
Percent change: 7.0. 

Program unit cost; 
As of 10/2001: $1,171.333; 
Latest 12/2005: $2,088.899; 
Percent change: 78.3. 

Total quantities; 
As of 10/2001: 5; 
Latest 12/2005: 3; 
Percent change: -40.0. 

Acquisition cycle time (months); 
As of 10/2001: 111; 
Latest 12/2005: 134; 
Percent change: 20.7. 

[End of table] 

The AEHF program's technologies are mature and the design is stable. In 
late 2004, the program was delayed and restructured because key 
cryptographic equipment would not be delivered in time and to allow the 
program time to replace some critical electronic components and add 
testing. Schedule risk remained due to the continued concurrent 
development of two critical path items managed and developed outside 
the program. According to the program office, these issues have been 
resolved and the first satellite is entering into final integration and 
testing and is on schedule for first launch. Current plans are to meet 
full operational capability with three AEHF satellites and the first 
Transformational Satellite Communications System (TSAT) satellite. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

AEHF Program: 

Technology Maturity: 

According to the program office, all of the 14 critical technologies 
are mature, having been demonstrated in a relevant environment. The 
technologies are being integrated into the first satellite and for 
final environmental testing. 

Design Stability: 

AEHF's design is stable. All expected design drawings have been 
released. The program completed its system-level critical design review 
in April 2004. 

Production Maturity: 

Production maturity could not be assessed, as the program office does 
not collect statistical process control data. 

Other Program Issues: 

The program was restructured in October 2004, when the National 
Security Agency did not deliver key cryptographic equipment to the 
payload contractor in time to meet the launch schedule. The 
restructuring delayed the program 1 year to allow time to resolve the 
cryptographic delivery problems and other program issues including 
replacement of critical electronic components and additional payload 
testing. Resolving these issues added about $800 million to the 
program. Last year, we reported that the program still faced schedule 
risk due to concurrent development of two critical path items developed 
and managed outside the program: the cryptographic components developed 
and produced by the National Security Agency and the Command Post 
Terminal managed by another Air Force program office. 

The program office reported all cryptographic hardware and components 
for the satellites were delivered, meeting all revised delivery 
milestones. In addition, the replacement of critical electronic 
components and additional payload testing was completed. 

Since our assessment of the AEHF last year, the Command Post Terminal, 
a critical path item, was delayed. However, the program office will now 
use the test terminal that was originally built to provide end-to-end 
testing of the system to control the satellites. Program officials 
stated that utilizing the test terminal, developed by Lincoln 
Laboratories, will have no adverse schedule or operational impact on 
the satellites. 

Program officials told us the mission control segment continues to meet 
or exceed its schedule and performance milestones. Three AEHF satellite 
launches are scheduled for 2008, 2009, and 2010 respectively. In the 
last year, the program completed most systems-level testing and started 
final integration and environmental testing on the first satellite. The 
program office stated that the program remains on schedule to meet the 
first launch date. The flight structure for the second satellite has 
been delivered for payload integration. The third satellite is on 
contract and includes procurement of long lead components. Full 
operational capability is planned with three AEHF satellites and the 
first TSAT. 

Agency Comments: 

In commenting on a draft of this assessment, the Air Force stated that 
AEHF remains on track for a first launch date of April 2008 with events 
proceeding as expected in accordance with the December 2004 program 
replan. The Air Force further stated that the program is currently in 
fabrication and production of the first two satellites, and the third 
satellite will begin assembly, integration, and test in fiscal year 
2009. It noted that the cryptographic chip development has remained on 
schedule since the January 2005 summit between the Air Force and the 
National Security Agency. In addition, the Air Force stated that all 
spacecraft flight cryptographic units were received on schedule and 
that chips for the ground terminals are due over the next couple of 
years to support terminal production schedules. Moreover, according to 
Air Force officials, DOD explored the option of adding a fourth AEHF 
satellite to mitigate the potential gap caused by schedule slips in the 
TSAT program, but decided to restructure the TSAT program baseline and 
not purchase a fourth AEHF satellite at this time. 

[End of section] 

Active Electronically Scanned Array Radar (AESA): 

The Navy's AESA radar is one of the top upgrades for the F/A-18E/F 
aircraft. It is to be the aircraft's primary search/track and weapon 
control radar and is designed to correct deficiencies in the current 
radar. According to the Navy, the AESA radar is key to maintaining the 
Navy's air-to-air fighting advantage and will improve the effectiveness 
of the air-to-ground weapons. When completed, the radar will be 
inserted in new production aircraft and retrofitted into lot 26 and 
above aircraft. 

[See PDF for image] - graphic text: 

Source: U.S. Navy. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: McDonnell Douglas Corp. 

Program office: Patuxent River, Md. 

Funding needed to complete: 

R&D: $9.1 million: 

Procurement: $1,310.6 million: 

Total funding: $1,319.7 million: 

Procurement quantity: 331: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 02/2001: $563.8; 
Latest 09/2006: $627.7; 
Percent change: 11.3. 

Procurement cost; 
As of 02/2001: $1,809.0; 
Latest 09/2006: $1,842.8; 
Percent change: 1.9. 

Total program cost; 
As of 02/2001: $2,372.8; 
Latest 09/2006: $2,470.5; 
Percent change: 4.1. 

Program unit cost; 
As of 02/2001: $5.718; 
Latest 09/2006: $5.953; 
Percent change: 4.1. 

Total quantities; 
As of 02/2001: 415; 
Latest 09/2006: 415; 
Percent change: 0.0. 

Acquisition cycle time (months); 
As of 02/2001: 69; 
Latest 09/2006: 72; 
Percent change: 4.4. 

Procurement funding for the radar is included in the funding for the F/ 
A-18E/F and EA-18G aircraft programs. 

[End of table] 

The AESA radar's critical technologies appear to be mature and the 
design appears stable, but radar development continues during 
production. According to the program office, there has been significant 
progress in radar maturation, performance, and stability. However, 
risks and problems remain. Software development continues to be a top 
challenge, and spurious radar emissions could require software and/or 
hardware changes. Development of design improvements is ongoing. The 
program also carries a challenging risk associated with the production 
rate. Although program costs appear somewhat stable, two key 
milestones--initial operational capability and full-rate production-- 
have slipped by several months, and first deployment of the radar in a 
full squadron has been delayed by the carrier airwing schedule. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

AESA Program: 

Technology Maturity: 

A fiscal year 2004 technology readiness assessment for the radar 
determined that the four critical technologies were mature. To further 
ensure technology maturity, a final technology assessment was held in 
November 2005. Program officials now consider critical technologies to 
work in their final form and under expected conditions. 

Design Stability: 

Although the AESA design appears to be stable, development has 
continued during production. That development has been slowed by 
software immaturity, and the software has caused inconsistent radar 
performance. Several advanced radar capabilities were deferred to 
future software configurations, but program officials said it did not 
affect key performance parameters. Software hangups have forced radar 
restarts in each of the six AESA operational test aircraft. The problem 
is improving, but is still above the required rate. 

Other deficiencies are being pursued, such as improving target 
breakout, track scheduling, and fault detection. Integrating AESA 
software capabilities and correcting deficiencies continue under a 
technical delivery order contract. Spurious radiated emissions may 
degrade performance of other subsystems, which could result in 
unacceptable weapon system performance. Redesign of radar modules and/ 
or software changes may be required to reduce emissions. Officials said 
development of design improvements has been completed or is almost 
complete, but ongoing verification tests may require additional design 
changes. 

Operational evaluation started later than planned due to delays in 
maturing air-to-air software, so it was not completed until November 
2006, and the report is not expected until January 2007, resulting in a 
5-month delay for initial operational capability. Follow-on tests are 
scheduled through fiscal year 2008 to test, for example, advanced air- 
to-air modes and integration with aircraft electronic warfare systems. 
Unsatisfactory results could result in system software changes. 

Development of the radar's anti-tamper capability is on schedule 
according to officials. Operational testing of this capability is to be 
completed in fiscal year 2008. While the anti-tamper capability is 
required to have no effect on radar performance, operational tests of 
anti-tamper models may identify problems requiring design changes. By 
then, about 116 radars are to have been produced. 

Production Maturity: 

We could not assess production maturity because statistical process 
control data are not being collected. Manufacturing processes continue 
to be monitored and controlled at each manufacturing center and 
laboratory. Twenty percent of the 415 radars have been approved for 
production now that the fourth and final low-rate production has been 
approved. Most of the 415 radars will be installed in F/A-18E/Fs on the 
aircraft production line, but 135 radars are to be retrofitted into 
existing aircraft. As of November 2006, 24 radars had been delivered 
and installed in aircraft. Long-lead funding for full production has 
been approved, but due to the testing delay, full-rate production has 
slipped by 3 months. The program has a challenging production risk. On- 
time delivery of radars is risky for the fourth low-rate production lot 
because production must increase from 2 to 4 radars per month, retrofit 
radars begin in fiscal year 2008, and foreign military sales follow. 
Thus, on-time delivery of aircraft could be affected by missing or late 
radars. 

Other Program Issues: 

The first deployment of AESA radars in a full squadron has been delayed 
by 6 months due to a Navy decision on the carrier airwing schedule, not 
AESA problems, according to officials. 

Agency Comments: 

In commenting on a draft of this assessment, the Navy stated AESA 
software development continues in a spiral fashion during production as 
planned. Operational evaluation was completed in December 2006 and is 
expected to support initial operational capability in March 2007 and 
full-rate production in April 2007, both within thresholds. Due to 
schedule delays, some advanced radar capabilities were deferred, as 
approved. Many of the deferred items for most of the deficiencies 
identified during operational evaluation have been incorporated in the 
next aircraft software build, and will undergo operational tests prior 
to first system deployment in 2008. Final advanced capabilities will be 
incorporated in the following year. 

[End of section] 

Airborne Mine Countermeasures (AMCM): 

The Navy is developing new Airborne Mine Countermeasures (AMCM) systems 
that will be fielded with aircraft mission kits on MH-60S Block 2 
helicopters. Together, these systems will provide carrier strike groups 
and expeditionary strike groups with organic airborne mine 
countermeasures capability. To successfully field this capability, the 
Navy must develop, test, and integrate 5 new mine countermeasures 
systems with a modified MH-60S airframe. We assessed the Navy's 
progress in developing the mine countermeasures systems. 

[See PDF for image] - graphic text: 

Source: Naval Surface Warfare Center Panama City (PMA-299). 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Arete Associates, Boeing, EDO Defense Systems, 
Northrop Grumman, Raytheon: 

Program office: Washington, D.C. 

Funding needed to complete: 

R&D: $156.7 million: 

Procurement: $353.0 million: 

Total funding: $526.9 million: 

Procurement quantity: 77: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of (various): $444.9; 
Latest 01/2007: $589.9; 
Percent change: 32.6. 

Procurement cost; 
As of (various): $1,067.9; 
Latest 01/2007: $699.5; 
Percent change: -34.5. 

Total program cost; 
As of (various): $1,522.9; 
Latest 01/2007: $1,298.2; 
Percent change: -14.8. 

Program unit cost; 
As of (various): NA; 
Latest 01/2007: NA; 
Percent change: NA. 

Total quantities; 
As of (various): 231; 
Latest 01/2007: 144; 
Percent change: -37.7. 

Acquisition cycle time (months); 
As of (various): NA; 
Latest 01/2007: NA; 
Percent change: NA. 

Costs and quantities are for the AN/AQS-20A Mine Detecting Sonar, 
Airborne Laser Mine Detection System, Organic Airborne and Surface 
Influence Sweep System, Rapid Airborne Mine Clearance System, and 
Airborne Mine Neutralization System. 

[End of table] 

The MH-60S Block 2 AMCM helicopter will rely upon 5 new mine 
countermeasures systems, the AN/AQS-20A Mine Detecting Sonar, Airborne 
Laser Mine Detection System, Organic Airborne and Surface Influence 
Sweep System, Rapid Airborne Mine Clearance System, and Airborne Mine 
Neutralization System. The Navy has not yet fully matured technologies 
for 3 of these systems, although it asserts a high degree of design 
stability in these programs. However, if technologies do not mature as 
planned, design changes for the affected systems may be required. In 
addition, the Navy is not collecting statistical process control data 
for the 2 systems in production, preventing us from assessing 
production maturity. The achievement of key product knowledge shown is 
for the Organic Airborne and Surface Influence Sweep System, Rapid 
Airborne Mine Clearance System, and Airborne Mine Neutralization 
System. 

Figure: Attainment of Product knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

AMCM Program: 

Technology Maturity: 

Thirty-three of the 38 critical technologies comprising the 5 MH-60S 
mine countermeasures systems are fully mature, and the remaining five 
technologies are approaching maturity. Technologies supporting the AN/ 
AQS-20A Mine Detecting Sonar and the Organic Airborne and Surface 
Influence Sweep System are all fully mature. However, the Airborne 
Laser Mine Detection System and the Rapid Airborne Mine Clearance 
System each have one immature technology, while the Airborne Mine 
Neutralization System has three technologies that have not been fully 
matured. 

The Airborne Laser Mine Detection System is currently in production. 
This system detects, classifies, and localizes floating and near 
surface moored mines by firing a laser into the water and using cameras 
to capture water reflections to create images. One technology that 
enables this process is the system's active pixel sensor, which the 
Navy has not fully matured. Although the Navy has identified a mature 
backup technology for the active pixel sensor that will be used in the 
event problems are discovered during testing, this alternative will 
impose schedule delays upon the program as it will require integration 
into the existing system design. 

The Rapid Airborne Mine Clearance System is currently in development, 
with initial production planned for August 2008. This system will use a 
30 millimeter gun and targeting sensor to neutralize near-surface and 
surface (floating) moored mines. One technology critical to achieving 
full functionality of this system is its fire control system, which the 
Navy is still developing. The Navy plans to test the fire control 
system in a relevant environment in the second quarter of fiscal year 
2007. 

The Airborne Mine Neutralization System is currently in development and 
is scheduled to enter production in June 2007. This system will provide 
the capability to neutralize bottom and moored mines using an airborne 
delivered expendable mine neutralization device. The Navy has fully 
matured this system's neutralizer technology, and is approaching full 
maturity with its launch and handling subsystem, deployment 
subassembly, and warhead assembly technologies. 

Design Stability: 

All 5 of the MH-60S mine countermeasures systems have completed design 
readiness reviews. To date, 98 percent of design drawings have been 
released for these systems, and the Navy anticipates that only the 
Airborne Mine Neutralization System and the Airborne Laser Mine 
Detection System will require completion of additional drawings. While 
the Navy considers the design for the Rapid Airborne Mine Clearance 
System to be complete, if this system's fire control system technology 
does not mature as planned, design changes could be required. 

Production Maturity: 

Both the AN/AQS-20A Mine Detecting Sonar and Airborne Laser Mine 
Detection System are currently in production. Currently, the Navy is 
not collecting statistical process control data for these systems--an 
approach it attributes to the limited number of initial production 
units being procured. Consequently, we could not assess production 
maturity for either the AN/AQS-20A Mine Detecting Sonar or the Airborne 
Laser Mine Detection System. 

Agency Comments: 

In commenting on a draft of this assessment, the Navy provided 
technical comments, which were incorporated as appropriate. 

[End of section] 

Advanced Precision Kill Weapon System (APKWS) II: 

The Army's APKWS II is a precision-guided, air-to-surface missile 
designed to engage soft and lightly armored targets. The system is 
intended to add a new laser-based seeker to the existing Hydra 70 
Rocket System and is expected to provide a lower cost, accurate 
alternative to the Hellfire missile. Future block upgrades are planned 
to improve system effectiveness. We assessed the laser guidance 
technology used in the new seeker. 

[See PDF for image] - graphic text: 

Source: APKWS II Program Office, BAE Systems. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: BAE Systems: 

Program office: Huntsville, Ala. 

Funding needed to complete: 

R&D: $182.5 million: 

Procurement: $1,296.6 million: 

Total funding: $1,479.1 million: 

Procurement quantity: 71,565: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 04/2006: $208.4; 
Latest 08/2006: $208.4; 
Percent change: 0.0. 

Procurement cost; 
As of 04/2006: $1,296.6; 
Latest 08/2006: $1,296.6; 
Percent change: 0.0. 

Total program cost; 
As of 04/2006: $1,505.0; 
Latest 08/2006: $1,505.0; 
Percent change: 0.0. 

Program unit cost; 
As of 04/2006: $.021; 
Latest 08/2006: $.021; 
Percent change: 0.0. 

Total quantities; 
As of 04/2006: 71,637; 
Latest 08/2006: 71,637; 
Percent change: 0.0. 

Acquisition cycle time (months); 
As of 04/2006: 62; 
Latest 08/2006: 62; 
Percent change: 0.0. 

[End of table] 

The APKWS II program entered system development with its one critical 
technology mature and its design stable. Since our previous assessment, 
the Army restructured the program and, in April 2006, awarded a 2-year, 
$41.9 million system development and demonstration contract for the new 
APKWS II program. Last year, we reported that the combination of a 
number of problems, including the placement of the laser seeker on the 
fins rather than in the head of the missile, led to the Army's 
curtailment of the original APKWS contract in January 2005. Although 
the APKWS II laser guidance technology appears mature, its integration 
on the missile's fins still presents a risk since this design is 
essentially the same as the original APKWS. Due to funding uncertainty, 
the schedule for the design review slipped from June 2006 to May 2007 
and flight tests were delayed from August 2006 to January 2007. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

APKWS II Program: 

Technology Maturity: 

Program officials consider the one APKWS critical technology, laser 
guidance, to be mature. However, on the original APKWS program, 
integration of the laser seeker and guidance proved to be more 
problematic than originally estimated, and this difficulty contributed 
to contract curtailment and program restructuring. The Army 
restructured the program under the same set of key performance 
parameters and, in April 2006, awarded the APKWS II contract to one of 
the original program participants using the same laser seeker and 
guidance technology as in the original program. According to program 
officials, the contractor funded its own work on the revised APKWS II 
during the 15-month period between the original program curtailment and 
contract award for the follow-on program. The contractor's effort 
focused on the problems that plagued the original program. Program 
officials stated that during the interim 15-month period, the 
contractor successfully addressed the original APKWS problems and also 
conducted three successful missile flights. 

Design Stability: 

The number of engineering drawings increased from 115 to 160 from the 
original APKWS to the APKWS II program. According to program officials, 
the drawings now include guidance and telemetry section drawings. 
Program officials expect to have all the engineering drawings released 
by the design review in May 2007. Due to funding uncertainty, the 
system critical design review slipped from June 2006 to May 2007. 

Production Maturity: 

According to program officials, key manufacturing processes have not 
yet been determined. However, officials stated that statistical process 
control will be employed and all key manufacturing processes will be 
placed under control during low-rate initial production. 

Other Program Issues: 

Program officials expected to hold the APKWS II system critical design 
review in June 2006 and flight tests in August 2006. However, funding 
uncertainty has caused those schedules to slip. The Army requested that 
some of the procurement money originally slated for the first APKWS be 
reprogrammed to support the development of APKWS II. This request was 
followed by two additional requests from the Army to reprogram money 
from another source. However, Congress has not yet approved any 
reprogramming requests for APKWS II. Subsequently, in June 2006, the 
Army directed the prime contractor to take actions to manage the 
contract within current funding constraints and to execute the contract 
through November 2006 with existing funding. That has caused the 
schedule for the design review to slip to May 2007 and the flight test 
to January 2007. Due to the uncertainty of future funds, APKWS II 
program officials predict further schedule slippages and subsequent 
increased program costs related to replanning activities. 

Agency Comments: 

In commenting on a draft of this assessment, program officials stated 
that having a design with the laser seeker on the wings was not an 
issue that led to the Army's curtailment of the original APKWS 
contract. Program officials further noted that this design presents no 
major difficulties to the ongoing integration of the APKWS laser seeker 
and guidance section into the Hydra-70 Rocket components. They believe 
the placement of the laser seeker provides significant advantages 
during extreme environmental operations and adjacent rocket firings. 
Also, program officials noted that the lack of required funding in 
fiscal years 2006 and 2007 resulted in moving the first flight to 
January 2007 and the design review to May 2007. Finally, they stated 
that efforts are ongoing to establish a revised, realistic baseline 
within current funding constraints and that they are confident the 
revised cost and schedule will not breach the current Acquisition 
Program Baseline. 

The Army also provided technical changes, which were incorporated as 
appropriate. 

GAO Comments: 

Our prior work has shown that the placement of the laser seeker on the 
fins rather than in the head of the missile was problematic for the 
original APKWS program. The integration difficulty contributed to the 
cost overrun and protracted schedule, which subsequently led to program 
curtailment and restructuring. 

[End of section] 

Armed Reconnaissance Helicopter (ARH): 

The Army's ARH is expected to provide reconnaissance and security 
capability for air and ground maneuver teams. The ARH combines a 
modified off-the-shelf airframe with a nondevelopmental item mission 
equipment package and is replacing the OH-58D Kiowa Warrior fleet. A 
streamlined acquisition strategy was proposed for the ARH program, as 
it will be fielded to support current military operations. 

[See PDF for image] - graphic text: 

Source: ARH Prototype #1 Flight Testing at Bell Helicopter, 2006 Bell 
Helicopter, A Textron Company. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Bell Helicopter Textron, Inc. 

Program office: Huntsville, Ala. 

Funding needed to complete: 

R&D: $224.2 million: 

Procurement: $2,911.4 million: 

Total funding: $3,135.6 million: 

Procurement quantity: 368: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 07/2005: $375.9; 
Latest 08/2006: $398.4; 
Percent change: 6.0. 

Procurement cost; 
As of 07/2005: $2,923.0; 
Latest 08/2006: $2,911.4; 
Percent change: -0.4. 

Total program cost; 
As of 07/2005: $3,298.9; 
Latest 08/2006: $3,309.8; 
Percent change: 0.3. 

Program unit cost; 
As of 07/2005: $8.964; 
Latest 08/2006: $8.994; 
Percent change: 0.3. 

Total quantities; 
As of 07/2005: 368; 
Latest 08/2006: 368; 
Percent change: 0.0. 

Acquisition cycle time (months); 
As of 07/2005: 47; 
Latest 08/2006: 47; 
Percent change: 0.0. 

[End of table] 

The ARH program began system development without designating any 
technologies as critical. Since then, the program has identified two 
critical technologies--the sensor package and the engine--both of which 
are approaching full maturity. The ARH program is scheduled to hold its 
critical design review in January 2007, and it is not certain that the 
critical technologies will be mature by that time. The program has 
mandated that 85 percent of the drawings be released by the design 
review. About 88 percent have been released to date. The Army does not 
plan to collect statistical process control data in preparation for the 
production decision scheduled for May 2007. Rather, the Army will 
evaluate ARH's engineering and manufacturing readiness levels. Further, 
the Army's oversight of ARH may be compromised due to the 
decertification of the prime contractor's earned value management 
system. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

ARH Program: 

Technology Maturity: 

The ARH program had not designated any technologies as critical at the 
time of development start. However, in October 2005 (90 days after 
contract award), two technologies were determined to be critical. Both 
technologies, the sensor package and the engine, are approaching full 
maturity. Although the sensor is a derivative of a currently fielded 
and flying system, it contains some updated components. The sensor was 
tested earlier this year in a prototype configuration and improvements 
are currently being incorporated into the design. The system will be 
retested in late calendar year 2006. The engine has recently completed 
the compressor rig test, the results of which will be critical in 
reducing the risk of the engine and increasing the maturity level. 
However, the program office is unsure if these technologies will be 
fully mature by critical design review, scheduled for January 2007. 

Design Stability: 

According to the program office, the ARH is a limited design effort and 
will take an off-the-shelf aircraft and convert it to military use by 
incorporating existing military and commercial equipment. The ARH 
program office has imposed a critical design review entrance criterion 
of 85 percent drawing release. The review, currently scheduled for 
January 2007, will not be held until this entrance criterion is 
satisfied. Currently, the program has released 88 percent of the 
drawings. 

Production Maturity: 

We could not assess production maturity because, according to the 
program office, it does not plan to collect statistical process control 
data. However, the program office stated that production is managed 
through the use of engineering and manufacturing readiness levels 
(EMRLs).To determine production capability, the ARH program stated it 
will conduct a production readiness review (including an assessment of 
the EMRL), review facility plans and limited tooling development, 
conduct an operations capacity analysis, and assess lean manufacturing 
initiatives such as design for six sigma. In addition, the program 
office stated that the production status of the ARH program will be 
evaluated by tracking the cost of repairs and rework. 

Other Program Issues: 

In March 2006, the lead contractor lost its earned value management 
certification due to a recent compliance review that found lack of 
progress in addressing long-standing systemic deficiencies. Without 
certified earned value management data, the Army will not have timely 
information on the contractor's ability to perform work within 
estimated cost and schedule. According to the program office, the 
contractor did not make its first milestone detailed in the Defense 
Contract Management Agency's corrective action plans in efforts to 
obtain earned value compliance. Still, the contractor plans to be 
compliant by the end of August 2007, 3 months after ARH low-rate 
initial production is scheduled to begin. 

According to program officials, the Army plans to start low-rate 
production in May 2007 and procure two lots of 18 and 20 to conclude in 
May 2008. However, the Army does not plan to start full-rate production 
until February 2009. This schedule creates a 10-month production break 
between low-rate initial production and full-rate production. During 
the production break, the program plans to purchase development and 
production needs such as support equipment, pilot and maintenance 
trainers, and spares. Further, according to program officials, the 
budget reduction of $39 million in fiscal year 2007 exacerbates the 
break issue which could be very disruptive. The program office's 
proposed solution to the production break is to increase low-rate 
production, but this would have to be approved by the Under Secretary 
of Defense for Acquisition, Technology, and Logistics. Another possible 
solution could be to extend low-rate production to three lots, as 
opposed to two, which would help the program ramp up production and 
fill the 10-month production break. 

Agency Comments: 

In commenting on a draft of this assessment, the Army provided 
technical comments, which were incorporated where appropriate. 

[End of section] 

Advanced Threat Infrared Countermeasure/Common Missile Warning System: 

The Army's and Special Operations' ATIRCM/CMWS is a component of the 
Suite of Integrated Infrared Countermeasures planned to defend U.S. 
aircraft from advanced infrared-guided missiles. The system will be 
employed on Army and Special Operations aircraft. ATIRCM/CMWS includes 
an active infrared jammer, missile warning system, and countermeasure 
dispenser capable of loading and employing expendables, such as flares, 
chaff, and smoke. 

[See PDF for image] - graphic text: 

Source: BAE Systems. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: BAE Systems North America: 

Program office: Huntsville, Ala. 

Funding needed to complete: 

R&D: $62.9 million: 

Procurement: $3,525.3 million: 

Total funding: $3,588.2 million: 

Procurement quantity: 2,351: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 03/1996: $616.6; 
Latest 08/2006: $673.2; 
Percent change: 9.2. 

Procurement cost; 
As of 03/1996: $2,521.8; 
Latest 08/2006: $4,373.6; 
Percent change: 73.4. 

Total program cost; 
As of 03/1996: $3,138.4; 
Latest 08/2006: $5,046.8; 
Percent change: 60.8. 

Program unit cost; 
As of 03/1996: $1.014; 
Latest 08/2006: $1.406; 
Percent change: 38.6. 

Total quantities; 
As of 03/1996: 3,094; 
Latest 08/2006: 3,589; 
Percent change: 16.0. 

Acquisition cycle time (months); 
As of 03/1996: Classified; 
Latest 08/2006: Classified; 
Percent change: Classified. 

[End of table] 

The ATIRCM/CMWS program entered production in November 2003 with 
technologies mature and designs stable. However, one of the five 
critical technologies was recently downgraded due to continued 
technical difficulties. Currently, the program's production processes 
are at various levels of control. The CMWS portion of the program 
entered limited production in February 2002 to meet urgent deployment 
requirements. However, full-rate production for both components was 
delayed because of reliability problems. Over the past several years, 
the program has had to overcome cost and schedule problems brought on 
by shortfalls in knowledge. Key technologies were demonstrated late in 
development, and only a small number of design drawings were completed 
by design review. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

ATIRCM/CMWS Program: 

Technology Maturity: 

The program's five critical technologies were considered mature until a 
government/industry team recently downgraded the maturity level of the 
infrared jamming head due to technical issues. Additionally, the other 
four technologies did not mature until after the design review. Most of 
the early technology development effort focused on the application to 
rotary wing aircraft. When system development began in 1995, 
requirements were expanded to include Navy and Air Force fixed-wing 
aircraft. This change caused problems that contributed to cost 
increases of over 150 percent. The Navy and the Air Force subsequently 
dropped out of the program, but the Navy and the Army are currently 
pursuing future joint production planning. 

Design Stability: 

The basic design of the system is complete with 100 percent of the 
drawings released to manufacturing. The design was not stable at the 
time of the design review, with only 22 percent of the drawings 
complete due to the expanded requirements. Two years after the design 
review, 90 percent of the drawings were released and the design was 
stable. This resulted in inefficient manufacturing, rework, additional 
testing, and a 3-year schedule delay. However, the number of drawings 
may be changing because the infrared jam laser and the infrared lamp 
will be replaced with a multi-band laser. 

Production Maturity: 

According to program officials, the program has 26 key manufacturing 
processes in various phases of control. The CMWS production portion of 
the system has stabilized and benefited from increased production 
rates. Also, processes supporting both ATIRCM and CMWS will continue to 
be enhanced as data is gathered and lessons learned will be included in 
the processes. 

The Army entered limited CMWS production in February 2002 to meet an 
urgent need. Subsequently, full rate production was delayed for both 
components due to reliability testing failures. The program implemented 
reliability fixes to six production representative subsystems for use 
in initial operational test and evaluation. These systems were 
delivered in March 2004. The full-rate production decision for the 
complete system was delayed until June 2011 due to ATIRCM performance 
issues. 

Other Program Issues: 

The Army uses the airframe as the acquisition quantity unit of measure 
even though it is not buying an ATIRCM/CMWS system for each aircraft. 
When the program began, plans called for putting an ATIRCM/CMWS on each 
aircraft. Due to funding constraints, the Army reduced the number of 
systems to be procured and will rotate the systems to aircraft as 
needed. The Army is buying kits for each aircraft, which include the 
modification hardware, wiring harness, and cables necessary to install 
and interface the ATIRCM/CMWS to each platform. In May 2006, the 
quantity of ATIRCM/CMWS systems was increased from 1,710 to 2,752, and 
kits to use for aircraft integration was increased from 3,571 to 4,393. 
However, a new cost estimate for the additional systems has not been 
completed. Based on the number of systems before the May 2006 increase, 
the true unit procurement cost for each ATIRCM/CMWS system is more on 
the order of $2.95 million. 

Agency Comments: 

In commenting on a draft of this assessment, the Army stated that the 
ATIRCM/CMWS program continues to focus efforts on the Global War on 
Terrorism force protection requirements. In response to an Acting 
Secretary of the Army November 2003 memo to equip all Army helicopters 
to be deployed to the war zone with the most cost-effective defensive 
systems, the program office proposed accelerating the CMWS portion of 
ATIRCM. In July 2006, the CMWS was provided to each deployed aircraft 
with CMWS installation kits. These accelerated efforts provided the 
CMWS ahead of the planned schedule (February 2007). CMWS initial 
operational test and evaluation and full-rate production decision 
events were successfully completed during this reporting period. 

The Army also stated that the ATIRCM funding was utilized to maintain 
the CMWS acceleration due to delays in receipt of reprogramming 
funding. The rebaselined ATIRCM program efforts are now continuing, 
with initial operational test and evaluation planned for November 2009. 
This rebaselined plan was presented and approved by the Army 
Acquisition Executive in December 2005. 

[End of section] 

B-2 Radar Modernization Program (B-2 RMP): 

The Air Force's B-2 RMP is designed to modify the current radar system 
to resolve potential conflicts in frequency band usage. To comply with 
federal requirements the frequency must be changed to a band where the 
DOD has been designated as the primary user. The modified radar system 
is being designed to support the B-2 stealth bomber and its combination 
of stealth, range, payload, and near-precision weapons delivery 
capabilities. 

[See PDF for image] - graphic text: 

Source: U.S. Air Force, U.S. Edwards Air Force Base, California. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Northrop Grumman: 

Program office: Dayton, Ohio: 

Funding needed to complete: 

R&D: $202.1 million: 

Procurement: $545.4 million: 

Total funding: $747.6 million: 

Procurement quantity: 14: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 08/2004: $694.0; 
Latest 08/2006: $607.9; 
Percent change: -12.4. 

Procurement cost; 
As of 08/2004: $542.8; 
Latest 08/2006: $545.4; 
Percent change: 0.5. 

Total program cost; 
As of 08/2004: $1,236.7; 
Latest 08/2006: $1,153.4; 
Percent change: -6.7. 

Program unit cost; 
As of 08/2004: $58.890; 
Latest 08/2006: $54.921; 
Percent change: -6.7. 

Total quantities; 
As of 08/2004: 21; 
Latest 08/2006: 21; 
Percent change: 0.0. 

Acquisition cycle time (months); 
As of 08/2004: 63; 
Latest 08/2006: TBD; 
Percent change: TBD. 

The total quantity of 21 units includes 14 to be bought with 
procurement funds and 7 to be bought with R&D funds. All 21 units will 
eventually be placed on operational B-2 aircraft. 

[End of table] 

All four of the B-2 RMPs critical technologies are considered mature 
and 100 percent of the design drawings have been released. Production 
maturity metrics will be formulated as part of a production readiness 
review prior to the April 2007 start of production. However, the first 
of two radar antenna software sets will not complete operational 
testing until 2008. Further, the program will not begin tracking the 
radar's operational reliability until early 2007. Recent program flight-
testing delays may lead to a delay in the planned start of production. 
Also, six operational B-2s will receive development radar units prior 
to the completion of flight testing. These units are necessary to 
obtain reliability and maintainability data and for crew training, but 
building them early in development may add to the risk of future design 
changes. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

B-2 RMP Program: 

Technology Maturity: 

All four B-2 RMP critical technologies were considered mature at the 
design review in May 2005. While the program entered development in 
August 2004 with two of these four critical technologies mature and two 
approaching maturity, the receiver/exciter for the electronic driver 
cards and aspects of the antenna designed to help keep the B-2's radar 
signature low, all four are now considered mature. 

Design Stability: 

The program currently has released 100 percent of its drawings and 
plans to maintain this 100 percent level by the planned start of 
production in April 2007. The program, however, does not use the 
release of design drawings as the sole measure of design stability but 
instead uses the successful completion of design events, such as 
subsystem design reviews, as its primary measure of design stability. 
The program has completed its design readiness review and at that time 
had released 85 percent of its design drawings. 

Production Maturity: 

The program does not use manufacturing process control data as the sole 
measure of production maturity because of the small number of 
production units. However, the program has identified one key process 
related to the assembly of the radar antenna array. Instead of using 
manufacturing process control data, the program plans to formulate 
other metrics to measure progress toward production. The program plans 
to use these other metrics as part of a production readiness review 
prior to the start of production in April 2007. 

The program plans to enter production in April 2007 and procure four 
radars at a cost of $160.7 million. However, recent flight-testing 
delays may lead to a reconsideration of April 2007 as the start of 
production and it will not be until the beginning of fiscal year 2008 
when radar flight-testing has progressed to the point that the first of 
two planned radar antenna software sets are fully tested and certified. 
Furthermore, the program does not plan to track the operational 
reliability of the radar until January 2007. Also, an operational 
assessment of the radar was delayed from March 2006 to early 2007. This 
is an important schedule event leading up to production and its delay 
will impact when information will be available leading up to the start 
of production. Producing units before testing is able to demonstrate 
the design is mature and works in its intended environment increases 
the likelihood of future costly design changes. 

The program plans to build six radar units during development to be 
used on B-2 aircraft to gather developmental reliability and 
maintainability data and provide for crew training and proficiency 
operations when the legacy radar frequency is no longer available. Last 
year, the Air Force plan was for six of these radar units to be placed 
on B-2 aircraft for this purpose, but because some B-2s are needed for 
other operations and will not be available, only two operational 
aircraft will initially be fitted with the new radars, with the 
remaining four to be fitted later in 2007. The Air Force and prime 
contractor have determined this will not affect training but will mean 
less radar reliability and maintainability data will initially be 
collected for analysis. 

Agency Comments: 

The Air Force agrees that producing radar units before testing has been 
completed does increase the risk of future potentially costly design 
changes. However, they have decided the risk is low compared to the 
benefits gained by having operational production units in place to meet 
requirements. 

The Air Force also provided technical comments, which were incorporated 
as appropriate. 

[End of section] 

Broad Area Maritime Surveillance (BAMS): 

The Navy's Broad Area Maritime Surveillance Unmanned Aircraft System 
(BAMS UAS) is to provide a persistent maritime intelligence, 
surveillance, and reconnaissance (ISR) capability. Along with the Multi-
mission Maritime Aircraft and Aerial Common Sensor, BAMS UAS will be 
part of a broad area maritime surveillance family of systems integral 
to the Navy's recapitalization of its Maritime Patrol and 
Reconnaissance Force. DOD is negotiating international participation in 
the program. 

[See PDF for image] - graphic text: 

Source: D.P. Associates, Inc./Andrew Kirschbaum. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: TBD: 

Program office: Patuxent River, Md. 

Funding needed to complete: 

R&D: $779.3 million: 

Procurement: $310.9 million: 

Total funding: $1,190.7 million: 

Procurement quantity: 4: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of NA: NA; 
Latest 08/2006: $819.6; 
Percent change: NA. 

Procurement cost; 
As of NA: NA; 
Latest 08/2006: $310.9; 
Percent change: NA. 

Total program cost; 
As of NA: NA; 
Latest 08/2006: $1,230.9; 
Percent change: NA. 

Program unit cost; 
As of NA: NA; 
Latest 08/2006: TBD; 
Percent change: NA. 

Total quantities; 
As of NA: NA; 
Latest 08/2006: TBD; 
Percent change: NA. 

Acquisition cycle time (months); 
As of NA: NA; 
Latest 08/2006: 70; 
Percent change: NA. 

[End of table] 

The BAMS UAS program plans to begin system development in October 2007. 
The program previously planned to reach system development during the 
first quarter of fiscal year 2005. However, the Navy did not allocate 
funds to the program for fiscal year 2006, which delayed development 
start to 2007 and postponed the initial operational capability from 
fiscal year 2010 to 2013. Program officials have not currently 
identified any critical technologies, but contractor proposals will be 
required to identify critical technologies during the source selection 
period from April to September 2007. The program plans to conduct a 
technology readiness assessment in parallel with source selection and 
anticipates results by August 2007. According to program officials, 
each critical technology must be approaching maturity and demonstrated 
in a relevant environment prior to development contract award. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

BAMS Program: 

Technology Maturity: 

BAMS UAS is taking steps to evaluate technologies prior to the start of 
program development. The Navy awarded four contracts using a broad 
agency announcement in conjunction with its Persistent Unmanned 
Maritime Airborne Surveillance (PUMAS) effort to engage industry in 
support of developing unmanned ISR mission performance metrics and 
capabilities within a family of systems as well as to gain insight into 
the state of industry research and technology. BAMS UAS has received 
the study results and is in the process of using the information to 
develop technical baselines and assess program risks. In addition, the 
Navy has acquired 2 Global Hawk Maritime Demonstration (GHMD) UAS to 
provide a rapid technology demonstration capability. GHMD data and test 
results are being used to refine BAMS UAS doctrine, concept of 
operations, tactics, techniques, and procedures. 

Program officials have not currently identified any critical 
technologies, but contractor proposals will be required to identify 
critical technologies during the source selection, period from April to 
September 2007. According to program officials, critical technologies 
must be approaching maturity and demonstrated in a relevant environment 
prior to the start of development in October 2007. 

Other Program Issues: 

As one component of a family of systems, BAMS UAS is intended to serve 
as an adjunct to the Multi-mission Maritime Aircraft (MMA). The program 
intends to colocate BAMS UAS mission crews with Maritime Patrol and 
Reconnaissance (MPR) Forces to allow operators to closely coordinate 
missions and utilize common support infrastructure. BAMS UAS will share 
its persistent intelligence, surveillance, and reconnaissance role with 
MMA. If the BAMS UAS does not develop as planned or continues to 
experience schedule delays, the MMA is its fallback, and according to 
the Navy, the overall cost of the MMA program would increase due to a 
need to procure additional aircraft. 

The Navy's Aerial Common Sensor (ACS), a cooperative Army-led program, 
was the replacement for the Navy's current airborne intelligence 
platform, the EP-3. It, in conjunction with MMA and BAMS UAS is 
intended to constitute the MPR family of systems. Due to a significant 
increase in the weight of ACS, the Army terminated the development 
contract. According to BAMS UAS officials, problems with the ACS have 
not affected the BAMS UAS program and future spirals may include 
planned ACS capabilities such as signals intelligence. 

The program is seeking government-to-government dialogue and exchange 
of information among allied and friendly nations that have common 
maritime surveillance needs. Program officials indicated that several 
nations have expressed interest in possible participation in the 
program. 

Agency Comments: 

The BAMS UAS program office provided technical comments, which were 
incorporated as appropriate. 

[End of section] 

C-130 Avionics Modernization Program (C-130 AMP): 

The Air Force's C-130 AMP standardizes the cockpit configurations and 
avionics for 13 different mission designs of the C-130 fleet. It 
provides Navigation/ Safety modifications and Communication Navigation 
Surveillance/Air Traffic Management upgrades; installs a Terrain 
Avoidance Warning System; replaces weather avoidance radars, compass 
systems, and dual autopilots; installs dual flight management systems; 
and provides high frequency, ultra high frequency, and very high 
frequency datalinks. 

[See PDF for image] - graphic text: 

Source: C-130 Avionics Modernization Program, System Program Office. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Boeing: 

Program office: Dayton, Ohio: 

Funding needed to complete: 

R&D: $578.2 million: 

Procurement: $2,889.5 million: 

Total funding: $3,467.6 million: 

Procurement quantity: 424: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 07/2001: $712.9; 
Latest 12/2005: $1,627.9; 
Percent change: 128.4. 

Procurement cost; 
As of 07/2001: $3,086.0; 
Latest 12/2005: $2,909.9; 
Percent change: -5.7. 

Total program cost; 
As of 07/2001: $3,798.9; 
Latest 12/2005: $4,537.7; 
Percent change: 19.5. 

Program unit cost; 
As of 07/2001: $7.320; 
Latest 12/2005: $10.456; 
Percent change: 42.8. 

Total quantities; 
As of 07/2001: 519; 
Latest 12/2005: 434; 
Percent change: -16.4. 

Acquisition cycle time (months); 
As of 07/2001: TBD; 
Latest 12/2005: TBD; 
Percent change: TBD. 

[End of table] 

According to the program office, the C-130 AMP technologies are mature 
and the design is stable for the basic combat delivery aircraft. 
However, production maturity is unknown because the program has not 
collected key manufacturing information and flight testing just began. 
The production decision has been delayed 17 months since last year's 
review. This allows time for more flight testing before making a 
production decision in November 2007. However, the program will have 
limited flight testing completed of a fully integrated, capable version 
of the basic configuration. Estimated costs for the program are 
expected to increase. In October 2006, the Air Force Cost Analysis 
Improvement Group estimated the total program cost at over twice the 
current cost estimate. An updated acquisition strategy reflecting the 
results of the program restructuring has yet to be approved. 

Figure: Attainment of Product Knowledge: 

[See PDF for image] - graphic text: 

[End of figure] - graphic text: 

C-130 AMP Program: 

Technology Maturity: 

All of the C-130 AMP's six critical technologies are fully mature. 

Design Stability: 

The C-130 AMP basic configuration is stable with nearly all of the 
expected drawings released. The basic configuration is critical because 
it provides the foundation for all 13 mission system designs. The 
program completed its critical design review in August 2005 for the 
basic configuration. However, during installation trials to demonstrate 
system integration, program officials realized that they did not have a 
sound understanding of the installation complexity. As a result, 
drawings have been revised based on the lessons learned, and the 
program acknowledges that additional drawings or changes may be needed 
to incorporate the unique features of each variant. 

Production Maturity: 

The program did not collect statistical process control data during 
development. Program officials stated that details on what data they 
will collect regarding manufacturing processes and quality control have 
yet to be defined for low-rate initial production. The Milestone B 
approved exit criteria established the production readiness review as 
one of the three criteria the C-130 AMP must meet to begin low-rate 
production in 2008. According to the program office, a low-rate 
production readiness review will be held in May 2007, and a full-rate 
production readiness review is scheduled for May 2009. 

Since last year's review, the production decision has been delayed 17 
months. The program office stated that the program will now have more 
than two-thirds of total development test points completed for the 
basic configuration before entering the production phase. However, the 
program will have only limited flight testing completed with a fully 
integrated, capable version. Future design variants are scheduled for 
demonstrations even later and will be done concurrently, leaving little 
time for corrections if problems arise. An official from the Office of 
the Director, Operational Test and Evaluation, expressed similar 
concerns about the level of concurrent flight testing and production. 

Other Program Issues: 

The program has been undergoing a program restructure for some time, 
putting the program in a state of flux. Since GAO's last review of the 
C-130 AMP, the program has encountered several delays in its schedule, 
the quantities expected to be purchased have been reduced by 31 
aircraft, and the Special Operations Command removed funding from the C-
130 AMP for the Common Avionics Architecture for Penetration program 
from fiscal year 2008 forward. In October 2006, the Air Force Cost 
Analysis Improvement Group estimated the total program cost at over 
twice the current cost estimate. According to the program office, an 
updated acquisition strategy, program baseline, and test plan are 
expected to be approved prior to the production decision in fiscal year 
2008. 

Agency Comments: 

The Air Force provided technical comments on a draft of this 
assessment, which were incorporated where appropriate. 

[End of section] 

C-130J Hercules: 

The C-130J is the latest addition to DOD's fleet of C-130 aircraft and 
constitutes a major upgrade for the aircraft series. The aircraft is 
designed primarily for the transport of cargo and personnel within a 
theater of operation. Variants of the C-130J are being acquired by the 
Air Force (e.g., Air Mobility Command and Special Operations Command), 
Marine Corps, and Coast Guard to perform their respective missions. We 
reviewed the Air Force's C-130J program. 

[See PDF for image] - graphic text: 

Source: C-130J Program Office (657th AESS), U.S. Air Force. 

[End of figure] - graphic text: 

Program Essentials: 

Prime contractor: Lockheed Martin Aeronautics Company - Marietta: 

Program office: Dayton, Ohio: 

Funding needed to complete: 

R&D: $207.4 million: 

Procurement: $2,020.9 million: 

Total funding: $2,252.4 million: 

Procurement quantity: 18: 

Program Performance (fiscal year 2007 dollars in millions): 

Research and development cost; 
As of 10/1996: $10.6; 
Latest 08/2006: $262.9; 
Percent change: 2,380.2. 

Procurement cost; 
As of 10/1996: $861.9; 
Latest 08/2006: $7,502.8; 
Percent change: 770.5. 

Total program cost; 
As of 10/1996: $872.5; 
Latest 08/2006: $7,886.0; 
Percent change: 803.9. 

Program unit cost; 
As of 10/1996: $79.316; 
Latest 08/2006: $99.822; 
Percent change: 25.9. 

Total quantities; 
As of 10/1996: 11; 
Latest 08/2006: 79; 
Percent change: 618.2. 

Acquisition cycle time (months); 
As of 10/1996: 16; 
Latest 08/2006: 33; 
Percent change: 106.3. 

These figures only reflect the Air Force's procurement of the C-130J. 

[End of table] 

The C-130J program was initiated at production in June 1996. We did not 
access technology, design, or production maturity because the Air Force 
does not have the information necessary to do so. Officials stated this 
is because the C-130J was originally procured as a commercial item that 
precluded DOD from obtaining the information. The program uses other 
means, such as Defense Contract Management Agency oversight of 
production, to assess maturity. In September 2006, DOD declared initial 
operational capability for the C-130J aircraft despite being rated as 
only partially mission capable in some areas. Program officials stated 
that options to address these shortfalls have been developed. In 
October 2006, the program completed the transition to a noncommercial 
negotiated contract to provide full insight into cost and pricing data 
for the remaining procurement of 39 C-130J aircraft. 

Figure: Attainment of Product Knowledge: 

[See PDF for Image] 

[End of figure] 

C-130J Hercules Program: 

Technology Maturity: 

We did not assess the C-130J's critical technologies because, according 
to program officials, the technologies that make possible the major 
upgrades from earlier C-130 aircraft were assumed to be mature. Since 
the contractor initiated development of the C-130J at its own expense 
in the early 1990s, DOD took no responsibility for the system's 
technology maturity. 

Design Stability: 

We did not assess the C-130J's design because, according to program 
officials, the Air Force does not have design drawings used to measure 
maturity. It believed the design was stable when the program was 
initiated, based on the fact that the C-130J was offered as a 
commercial item and evolved from an earlier C-130 design. However, when 
compared to earlier C-130 models the C-130J's development was 
approximately 70 percent new effort. Design changes provided major 
improvements such as a new propulsion system, an advanced integrated 
diagnostics system, a glass cockpit, digital avionics, and cargo 
compartment enhancements. Despite being considered a commercial 
development, the C-130J encountered numerous deficiencies early