Missile Defense:

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

GAO-08-1068: Published: Sep 25, 2008. Publicly Released: Sep 25, 2008.

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The Department of Defense (DOD) has spent a total of over $115 billion since the mid-1980s to develop a Ballistic Missile Defense System (BMDS) comprised of land, air, and sea-based elements--such as missiles and radars--working together as an integrated system. Since the cost to operate and support a weapon system usually accounts for most of a system's lifetime costs, the resources needed to fund BMDS could be significant as DOD fields an increasing number of BMDS elements. In 2005, DOD began planning to transition responsibility for supporting BMDS elements from the Missile Defense Agency (MDA) to the services. GAO was asked to assess the extent to which DOD has (1) planned to support BMDS elements over the long-term, and (2) identified long-term operation and support costs. To do so, GAO analyzed 7 BMDS elements that will be fielded by 2015, compared DOD's plans and cost estimates to DOD and GAO key principles, and assessed the extent to which MDA and the services have agreed on responsibilities for supporting and funding BMDS elements.

DOD has taken some initial steps to plan for BMDS support, but efforts to date are incomplete, and difficulties in transitioning responsibilities from MDA to the services have complicated long-term planning. DOD key principles for weapon system life-cycle management stress the importance of completing support plans that cover a system's expected useful life before it is fielded. Although MDA has developed some policies and guidance for BMDS support planning, it has not developed support plans for three of the seven elements that GAO examined, and MDA has not completed an overall support plan for the integrated system. DOD's long-term support planning for BMDS is incomplete because it has not established a standard process clearly specifying what support planning should be completed before fielding or how to transition the responsibility for supporting BMDS elements from MDA to the services. For five of the seven elements GAO examined, MDA and the services have been unable to reach agreement on who will be responsible for providing support after 2013. DOD has drafted a proposal for BMDS management that DOD officials have stated is intended, in part, to address these issues. However, the draft proposal lacks important details, and it is not clear when it is expected to be approved and implemented. Without a standardized process for long-term support planning, uncertainty will persist regarding how the elements will be supported over the long term. DOD's recent efforts to develop operation and support cost estimates for BMDS elements have limitations and are not transparent for DOD and congressional decision makers. DOD and GAO key principles for cost estimating state that complete, credible, and independently verified cost estimates are important to support preparation of budget submissions over the short term as well as for assessing the long-term affordability of a program. DOD has started to develop operation and support cost estimates for the seven elements GAO examined, but those efforts are not yet complete and have limitations. First, the estimates are likely to change since DOD is still determining key assumptions. Second, DOD does not plan to have the estimates independently verified. Furthermore, the Future Years Defense Program, DOD's 6-year spending plan, does not fully reflect BMDS operation and support costs. DOD has not yet clearly identified BMDS operation and support costs because the department has not required that these costs are to be developed, validated, and reviewed, and it has not specified when this should be done or who is responsible for doing so. Although DOD's draft proposal for managing BMDS contains some funding suggestions, it does not address the operation and support cost limitations GAO identified. Without a requirement to develop and validate BMDS operation and support cost estimates, DOD will have difficulty preparing credible budget requests and assessing the affordability of BMDS over the long term.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To increase transparency and improve fiscal stewardship of DOD resources for BMDS, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, to establish a requirement to estimate BMDS operation and support costs including requiring periodic independent validation of operation and support costs for each BMDS element.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: The Missile Defense Agency and the Army completed an agreement for developing joint operations and support cost estimates that includes presenting the estimate to management for approval and requesting the Director of Cost Assessment and Program Evaluation to conduct an independent cost estimate.

    Recommendation: To increase transparency and improve fiscal stewardship of DOD resources for BMDS, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, to establish a requirement to estimate BMDS operation and support costs including detailing when credible estimates are to be developed, updated, and reviewed; specifying criteria for prioritizing, allocating, and distributing funds; and clearly identifying who is responsible for oversight of this process.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: The Missile Defense Agency and the Army completed an agreement that both organizations would develop joint operations and support cost estimates consistent with GAO's Best Practices Guide for Cost Estimating. Also DOD has issued guidance establishing the MIssile Defense Executive Board and the BMDS Life Cycle Management Process. The DOD Comptroller will administer all BMDS defense-wide funds and must concur on all element-specific agreements.

    Recommendation: To improve planning to support BMDS elements, including planning for the transition of support responsibilities from MDA to the services, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, establish a standard process for long-term support planning that adheres to key principles for life-cycle management, including specifying which organization is responsible for life-cycle management and identifying steps for oversight to identify who is accountable for ensuring these actions are accomplished.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: The Missile Defense Agency (MDA)and the Army completed an agreement for the Terminal High Altitude Area Defense element that documents life cycle management responsibilities as part of a standardized process for long-term support planning. We claimed an accomplishment for this action in 2011. Regarding the broader application of this recommendation beyond the Terminal High Altitude Area Defense element, we learned (during our review of ballistic missile defense system training requirements (code 351509)) that MDA and the services had prepared other agreements in 2009, and that these agreements - covering other ballistic missile defense system elements -- were in the process of being updated. DOD did not indicate to us when these would be completed. However, we believe there is sufficient momentum to take such actions, and therefore we are closing this recommendation as implemented.

    Recommendation: To improve planning to support BMDS elements, including planning for the transition of support responsibilities from MDA to the services, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, establish a standard process for long-term support planning that adheres to key principles for life-cycle management, including requiring active lead service participation in developing long-term support plans and designating what support planning should be completed before elements are fielded.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: Missile Defense Agency (MDA) issued guidance stating that MDA and the lead service shall develop sustainment plans jointly and that programs managers will incorporate total life cycle system management.

    Recommendation: To improve planning to support BMDS elements, including planning for the transition of support responsibilities from MDA to the services, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, establish a standard process for long-term support planning that adheres to key principles for life-cycle management, including establishing timelines for planning that must be completed before each element is fielded, such as naming a lead service, involving services in support and transition planning, and deciding when support responsibilities will be transitioned to the services.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: The Missile Defense Agency (MDA)and the Army completed an agreement for the Terminal High Altitude Area Defense element that specifies what actions will be completed before the element transfers from MDA to the Army. We claimed an accomplishment for this action in 2011. Regarding the broader application of this recommendation beyond the Terminal High Altitude Area Defense element, we learned (during our review of ballistic missile defense system training requirements (code 351509)) that MDA and the services had prepared other agreements in 2009, and that these agreements - covering other ballistic missile defense system elements -- were in the process of being updated. DOD did not indicate to us when these would be completed. However, we believe there is sufficient momentum to take such actions, and therefore we are closing this recommendation as implemented.

    Recommendation: To increase transparency and improve fiscal stewardship of DOD resources for BMDS, the Secretary of Defense should direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, to establish a requirement to estimate BMDS operation and support costs including using the independently validated estimates to support preparation of complete and credible budget submissions and DOD's spending plan and to assess the long-term affordability of the integrated system and individual elements for informing key trade-off decisions.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: During our review of ballistic missile defense training requirements, we learned that MDA and the services are still working to develop and approve operations and support cost estimates for ballstic missile defense system elements. However, DOD has not provided suffcient documentation indicating that either the Missile Defense Agency or the services had completed ballistic missile defense system operation and support cost estimates using independently validated estimates and credible budget submissions to assess the long-term affordability of the integrated system and individual elements. Therefore we are closing this recommendation as not implemented.

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