Defense Management:

Actions Needed to Improve Operational Planning and Visibility of Costs for Ballistic Missile Defense

GAO-06-473: Published: May 31, 2006. Publicly Released: May 31, 2006.

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The Department of Defense (DOD) has spent about $91 billion since the mid-1980s to develop a capability to destroy incoming ballistic missiles. In 2002, recognizing the new security environment after the September 11 attacks, President Bush directed that an initial set of defensive ballistic missile capabilities be put in place in 2004. Although DOD is developing the Ballistic Missile Defense System (BMDS) to meet an urgent need, preparing to operate and support a system under continuous development poses significant challenges. GAO was asked to assess the extent to which (1) DOD has made progress in planning to operate the BMDS, and (2) the Future Years Defense Program (FYDP) provides complete and transparent data on BMDS operational costs.

DOD has made progress in planning to operate BMDS; however, it has not established criteria that would have to be met before declaring BMDS operational, nor has DOD resolved security issues or completed training and personnel plans. DOD officials agree that operational criteria are typically established and met prior to declaring a system operational, and that planning for new systems includes identifying personnel requirements, developing training programs, and identifying logistics and maintenance requirements. DOD has developed BMDS procedures and guidance, created an organization to integrate planning and operational support, and conducted some training and exercises. However, DOD has not established formal criteria for declaring that limited defensive operations or subsequent blocks of capability are operational or completed planning for security, training, and personnel. DOD has not done this because it is developing BMDS in a unique way and BMDS is exempted from traditional requirements guidance. Without specific operational criteria, the Secretary of Defense will not be in a sound position to objectively assess combatant commands' and services' preparations to conduct BMDS operations nor have a transparent basis for declaring BMDS operational, which will become more important as capabilities are added in subsequent blocks and Congress considers requests to fund operations. Without adequate planning, clear criteria, and identification of responsibility for ensuring necessary actions have been completed, it may be difficult for DOD to identify and prioritize actions, assure itself or Congress that the necessary pieces are in place before declaring the system operational, and determine whether the return on its significant development investment in BMDS can be realized. The FYDP, a major source of budget information, does not provide complete and transparent data on ballistic missile defense operational costs. DOD and GAO have repeatedly recognized the need to link resources to capabilities to facilitate decision making and oversight. However, complete and transparent ballistic missile defense operational costs are not visible in the FYDP because the FYDP's structure does not provide a way to identify and aggregate these costs. Four primary factors impair the visibility of ballistic missile defense operational costs in the current FYDP structure: (1) operational costs are included in many program elements and there is no mechanism to link and compile these costs, (2) the Missile Defense Agency is authorized to use research and development funds to pay for operational costs, (3) DOD has not included all known operational costs in its budget estimates, and (4) DOD has not identified all costs associated with the New Triad, of which BMDS is an important part. Without the ability to identify and assess total ballistic missile defense operational costs, neither the Secretary of Defense nor Congress has complete information to make funding and trade-off decisions among competing priorities; provide assurance that ballistic missile defense capabilities are affordable over time; and assess the costs of employing the New Triad.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: After GAO-08-1068 was published in May 2006, the Operational Readiness and Acceptance process was developed to provide the Warfighter a process to assess the operational utility of ballistic missile defense elements and provide the information needed to make informed decisions with regard to Partially Mission Capable (PMC) and Fully Mission Capable (FMC) declarations. These declarations are assessed conditions of BMDS elements that indicate that the element in question can perform at least one of its assigned missions (Partially Mission Capable) or all of its assigned missions (Fully Mission Capable) and that the crew operating the element understands the elements current capabilities and limitations. Through this process, Joint Functional Component Command- Integrated Missile Defense, as part of U.S. Strategic Command, has established the operational criteria required to make informed PMC/FMC decisions for seven of the ballistic missile defense elements the report addressed. This action met the intent of our recommendation to develop operational criteria for this element and has the potential to result in improved Warfighter understanding of these elements' operational capabilities and limitations, ensure that Warfighter expectations of this asset are aligned with reality, and provide a solid basis for declaring the element operational.

    Matter: Given the significance of BMDS to national defense and the billions of dollars spent in developing this system, Congress may wish to consider requiring the Secretary of Defense to develop a comprehensive plan (including operational criteria) specifying actions that must be completed by the services and combatant commands before declaring BMDS operational for limited defensive operations or subsequent blocks of capability.

  2. Status: Closed - Implemented

    Comments: There were concerns about how BMDS operating costs were reported to Congress. For example, the Senate Committee on Armed Services Report on the National Defense Authorization Act for Fiscal Year 2008 (report 110-77, dated 6/5/07) stated that the Authorization Act included legislative provisions that would require DOD, beginning in FY 09, to submit the budget request for the Missile Defense Agency using regular budget categories including operation and maintenance. August 12, 2009 update: In the Fiscal Year 2008 National Defense Authorization Act, Congress required a revised budget structure for the Missile Defense Agency. The act required that budget justification materials submitted to Congress in support of the Department of Defense budget for any fiscal year after fiscal year 2009 set forth separately amounts requested for the Missile Defense Agency (MDA) for each of the following budget categories: (1) Research, development, test, and evaluation; (2) Procurement; (3) Operation and maintenance; (4) Military construction. This action met the intent of the matter to provide greater transparency of ballistic missile defense operational costs by requiring that MDA identify operation and maintenance costs for ballistic missile defense in its budget. By meeting this legislative requirement, DOD's FYDP will provide Congress greater visibility of MDA's ballistic missile defense operational costs and better enable congressional oversight of the ballistic missile defense program.

    Matter: Given the significance of BMDS to national defense and the billions of dollars spent in developing this system, Congress may wish to consider requiring the Secretary of Defense to develop a structure within the FYDP to identify all ballistic missile defense operational costs which can be included as part of an annual report on the funding levels for New Triad activities.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO-08-1068 addressed the progress DOD made to identify BMDS operational costs. There were concerns about how BMDS operating costs was reported to Congress. For example, the Senate Committee on Armed Services Report on the National Defense Authorization Act for Fiscal Year 2008 (report 110-77, dated 6/5/07) stated that the Authorization Act included legislative provisions that would require DOD, beginning in FY 09, to submit the budget request for the Missile Defense Agency using regular budget categories including operation and maintenance. August 12, 2009 update: In the Fiscal Year 2008 National Defense Authorization Act, Congress required a revised budget structure for the Missile Defense Agency. The act required that budget justification materials submitted to Congress in support of the Department of Defense budget for any fiscal year after fiscal year 2009 set forth separately amounts requested for the Missile Defense Agency (MDA) for each of the following budget categories: (1) Research, development, test, and evaluation; (2) Procurement; (3) Operation and maintenance; (4) Military construction. This action met the intent of the matter to provide greater transparency of ballistic missile defense operational costs by requiring that MDA identify operation and maintenance costs for ballistic missile defense in its budget. By meeting this legislative requirement, DOD's FYDP will provide Congress greater visibility of MDA's ballistic missile defense operational costs and better enable congressional oversight of the ballistic missile defense program. Further DOD established the Ballistic Missile Defense System Lifecycle Management Process in Sept 2008. This process includes developing a program plan to meet the requirements with research & development, procurement, O&M, and milcon resources in a defense-wide account. This program plan is to be developed with all stakeholders including services and combatant commands and tracked for compliance. Funds are to be provided to the lead military departments for execution.

    Recommendation: To provide decision makers in Congress and DOD with complete, transparent data on the resources required to operate the ballistic missile defense system and to clearly identify costs for an important piece of the New Triad, the Secretary of Defense should direct the Director, Program, Analysis, and Evaluation, in consultation with the Under Secretary of Defense (Comptroller) and the services, to develop a structure within the FYDP to identify all ballistic missile defense operational costs, which can be included as part of an annual report on the funding levels for New Triad activities that GAO recommended DOD provide annually to Congress.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: GAO-08-1068 addressed the progress DOD made in developing a plan specifying actions (including operational criteria) to be taken before declaring BMDS operational. In May 2006, the Operational Readiness and Acceptance process was developed to provide the Warfighter a process to assess the operational utility of ballistic missile defense elements and provide the information needed to make informed decisions with regard to Partially Mission Capable (PMC) and Fully Mission Capable (FMC) declarations. These declarations are assessed conditions of BMDS elements that indicate that the element in question can perform at least one of its assigned missions (Partially Mission Capable) or all of its assigned missions (Fully Mission Capable) and that the crew operating the element understands the element's current capabilities and limitations. Through this process, Joint Functional Component Command-Integrated Missile Defense, as part of U.S. Strategic Command, has established the operational criteria required to make informed PMC/FMC decisions for seven of the ballistic missile defense elements the report addressed. This action met the intent of our recommendation to develop operational criteria for this element and has the potential to result in improved Warfighter understanding of these elements' operational capabilities and limitations, ensure that Warfighter expectations of this asset are aligned with reality, and provide a solid basis for declaring the element operational.

    Recommendation: To help DOD identify and prioritize actions across the department needed to declare limited defensive operations as well as each subsequent block of capability operational, and to dispel uncertainty and bring needed discipline to the process, the Secretary of Defense, in consultation with the Commander, U.S. Strategic Command, the services, and the Chairman, Joint Chiefs of Staff, should develop operational criteria for each ballistic missile defense element and the overall BMDS system for limited defensive operations and each subsequent block of capability, which should be comparable to the operational criteria that are currently developed for new weapon systems; assign responsibility to specific organizations and hold these organizations accountable for developing the criteria and ensuring these criteria are met before operational capability is declared; and develop a comprehensive plan specifying actions that must be completed with completion deadlines. The plan should cover the range of doctrine, organization, training, personnel, and facilities actions that are normally required to be developed and in place for new weapon systems, should integrate these actions across elements, and should address actions needed for the overall, integrated BMDS.

    Agency Affected: Department of Defense

 

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