Space Acquisitions:

Committing Prematurely to the Transformational Satellite Program Elevates Risks for Poor Cost, Schedule, and Performance Outcomes

GAO-04-71R: Published: Dec 4, 2003. Publicly Released: Dec 4, 2003.

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In a multibillion-dollar effort, the Department of Defense (DOD) plans to build a space-based communications system that leverages technologies never before used in space. Such a system would enable DOD to transform how information is collected on potential U.S. adversaries and how military forces are warned of hostile action. The backbone of this system will be the Transformational Satellite (TSAT), which is expected to play a pivotal role in connecting communications networks on the ground, in the air, on ships, and in space. TSAT represents a potential leap forward in communications speed, security, and availability. The Air Force, which heads up DOD's space programs, intends for TSAT to be interoperable with similar systems being acquired for the National Aeronautics and Space Administration (NASA) and the intelligence agencies. The initial TSAT program is expected to cost about $12 billion from 2003 to 2015 for development and production. Several billions more are to be spent acquiring and supporting the associated ground infrastructure, including thousands of user terminals. The Air Force intends to start the acquisition program in December 2003 and expects to launch the first TSAT in 2011. To help pay for TSAT, the Air Force has scaled back its acquisition of the Advanced Extremely High Frequency (AEHF) satellites currently under development. However, because of senior military commanders' concerns about TSAT's risks and the potential delay in delivering improved space communications, the Air Force plans to reassess the need for future AEHF funding in November 2004. If TSAT is considered too high a risk to meet the warfighter's expectations, the contingency plan is to take TSAT's funding--thereby delaying TSAT's development--and use it to buy another AEHF satellite. The Air Force has targeted November 2004 as the latest date such a decision could be made and still include funds for AEHF in the DOD budget submission for fiscal year 2006. We conducted this assessment in response to the large investment planned and the importance of the communications capabilities promised by TSAT and AEHF. Specifically, we assessed the Air Force's readiness to (1) initiate a TSAT acquisition program in December 2003 and (2) make a decision in November 2004 about whether to take TSAT funding and use it to buy another AEHF satellite.

Air Force officials have set two imminent deadlines: starting the TSAT program in December 2003, and deciding whether to shift funding from TSAT to AEHF in November 2004. The Air Force is currently not prepared to make an informed decision in either case. Air Force officials are not ready to initiate the TSAT program in December 2003 because they do not have the knowledge to reliably establish cost, schedule, and performance goals. At program start, program managers are required by law to establish such goals. Our past work on successful acquisition programs has found that these goals cannot be set reliably unless the critical technologies and design have been determined to meet minimum performance requirements. Programs that do not have this knowledge at program start have a much greater risk of resorting to costly design changes later in the development process, asking the warfighter to compromise on desired capabilities, or incurring schedule overruns to correct problems. Realizing that TSAT's schedule is ambitious, the Air Force added 2 years to the acquisition program. However, the extra time was mostly allocated to the latter part of the development process, not to the front end, when program managers typically need the time to become reasonably certain that technologies and early designs will work as envisioned. We are concerned about the Air Force's readiness to make the planned decision in November 2004 to take TSAT funding to buy another AEHF satellite in case the TSAT program falters. Air Force officials have not defined what evaluation criteria they intend to use in making this decision. Senior military commanders want assurance that they will get at least the level of capabilities promised by AEHF early in the next decade. However, senior DOD and Air Force officials told us that if funds were shifted from TSAT back to AEHF, then TSAT--the linchpin of its plan to transform military communications--would be substantially delayed. To promote well-informed and objective investment decisions, our past work has found that decision makers establish and use measurable criteria for evaluating the costs, benefits, and risks of various alternatives.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In December 2003, we assessed the Air Force's readiness to make a decision about whether to take Transformational Communications Satellite System (TSAT) funding and use it to buy another Advanced Extremely High Frequency (AEHF) satellite. Our past work shows that to promote well-informed and objective investment decisions, decision makers establish and use measurable criteria for evaluating the costs, benefits, and risks of various alternatives. We found that Air Force officials had not defined what evaluation criteria they intend to use to assess alternatives if the TSAT program should falter. In a March 2006 briefing to congressional staff to support its FY 2007 funding request for TSAT, DOD provided additional details on options for evolving AEHF and Wideband Gapfiller (WGS) and the associated cost estimates. The information also included measurable criteria not previously outlined, including the performance and schedule for alternative constellations. Reporting the Air Force's decision-making criteria and rationale to the Congress in this way will enhance transparency and provide Congress with better information for its oversight and funding responsibilities.

    Recommendation: To promote a well-informed and objective decision--now scheduled for November 2004--about whether to fund another AEHF satellite, the Secretary of Defense should direct the Secretary of the Air Force to consider the alternative investments in TSAT and AEHF against these measurable criteria.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In December 2003, we assessed the Air Force's readiness to make a decision about whether to take Transformational Communications Satellite System (TSAT) funding and use it to buy another Advanced Extremely High Frequency (AEHF) satellite. Our past work shows that to promote well-informed and objective investment decisions, decision makers establish and use measurable criteria for evaluating the costs, benefits, and risks of various alternatives. We found that Air Force officials had not defined what evaluation criteria they intend to use to assess alternatives if the TSAT program should falter. In a March 2006 briefing to congressional staff to support its FY 2007 funding request for TSAT, DOD provided additional details on options for evolving AEHF and Wideband Gapfiller (WGS) and the associated cost estimates. The information also included measurable criteria not previously outlined, including the performance and schedule for alternative constellations. Reporting the Air Force's decision-making criteria and rationale to the Congress in this way will enhance transparency and provide Congress with better information for its oversight and funding responsibilities.

    Recommendation: To promote a well-informed and objective decision--now scheduled for November 2004--about whether to fund another AEHF satellite, the Secretary of Defense should direct the Secretary of the Air Force to establish measurable criteria for use when evaluating alternative investments in TSAT and AEHF and report this criteria in the Air Force's 2005 budget submission.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: DOD provided Key Decision Point B approval for TSAT in March 2004, allowing the program to enter the risk reduction and design development phase. However, TSAT entered this phase with only one of its seven critical technologies mature. Although the Air Force has provided the appropriate level of funding, the TSAT program entered the risk reduction and design development phase without full knowledge necessary to build a business case to start the TSAT program.

    Recommendation: The Secretary of Defense should also direct the Secretary of the Air Force to provide the appropriate level of funding necessary to gain this knowledge, which is critical for building a business case to start the TSAT program at a later time.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: In December 2003, we published a report that highlighted the high level of technical risk in the Transformational Communications Satellite System (TSAT) acquisition program. We cautioned that the Air Force's plan to begin the TSAT program with a majority of immature technologies was a risky approach. We also pointed out that significant effort was needed to move the technology readiness levels (TRL) for the critical technologies from what they were at that time to the minimum acceptable level required to start an acquisition program, TRL 6 for space programs. Further, we noted that Air Force officials were not ready to initiate the TSAT program because they lacked the knowledge to reliably establish cost, schedule, and performance goals. Our past work on successful acquisition programs has found that these goals cannot be set reliably unless the critical technologies and design have been determined to meet minimum performance requirements. One month after our report, DOD started the program with only one of seven critical technologies mature. After DOD established initial goals for TSAT, Congress twice reduced the program's funding due to concerns about technology maturity and the aggressiveness of the acquisition schedule. DOD recently changed its acquisition strategy for the TSAT program to an incremental development approach to increase the confidence of an initial satellite launch and rescinded a previous decision to enter the preliminary design phase for the system so that current activities fall within the concept development phase of development. The aim of this decision is to use the maturity of critical technologies as the main criteria for moving forward with the program. For example, program officials have stated that the program is using independent tests to reduce risk by uncovering technical problems before awarding the space segment contract for the design and assembly of the satellites. The results of the tests are to be assessed before DOD makes a decision to enter product development.

    Recommendation: To promote better cost, schedule, and performance outcomes, the Secretary of Defense should direct the Secretary of the Air Force to delay the start of the TSAT acquisition program until technologies have been demonstrated to be at an acceptable level of maturity (at least TRL 6) and until the developing contractor has determined through systems engineering that the design is feasible and producible.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: In December 2003, we assessed the Air Force's readiness to make a decision about whether to take Transformational Communications Satellite System (TSAT) funding and use it to buy another Advanced Extremely High Frequency (AEHF) satellite. Our past work shows that to promote well-informed and objective investment decisions, decision makers establish and use measurable criteria for evaluating the costs, benefits, and risks of various alternatives. We found that Air Force officials had not defined what evaluation criteria they intend to use to assess alternatives if the TSAT program should falter. In a March 2006 briefing to congressional staff to support its FY 2007 funding request for TSAT, DOD provided additional details on options for evolving AEHF and Wideband Gapfiller (WGS) and the associated cost estimates. The information also included measurable criteria not previously outlined, including the performance and schedule for alternative constellations. Reporting the Air Force's decision-making criteria and rationale to the Congress in this way will enhance transparency and provide Congress with better information for its oversight and funding responsibilities.

    Recommendation: To promote a well-informed and objective decision--now scheduled for November 2004--about whether to fund another AEHF satellite, the Secretary of Defense should direct the Secretary of the Air Force to provide the rationale for how these criteria were applied in the Air Force's 2006 budget submission.

    Agency Affected: Department of Defense

 

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