Missile Defense:

Opportunity to Refocus on Strengthening Acquisition Management

GAO-13-432: Published: Apr 26, 2013. Publicly Released: Apr 26, 2013.

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What GAO Found

Although the Missile Defense Agency (MDA) has made some progress, the new MDA Director faces challenges developing and deploying new systems to achieve increasingly integrated capabilities as well as supporting and upgrading deployed systems while providing decision makers in the Department of Defense (DOD) and Congress with key oversight information in an era of fiscal constraints.

Challenge: Improve Investment Decisions

Determining the most promising and cost effective new missile defense systems to buy--considering technical feasibility and cost--remains a challenge for MDA. While MDA has conducted some analyses that consider alternatives in selecting which acquisitions to pursue, it has not conducted robust analyses of alternatives for two of its new programs. Because of its acquisition flexibilities, MDA is not required to do so. Robust analyses, however, could be particularly useful to DOD and congressional decision makers as they decide how to manage the portfolio of missile defense acquisitions. GAO has reported in the past that without analyses of alternatives, programs may not select the best solution for the warfighter, are at risk for cost increases, and can face schedule delays.

Challenge: Expand on Steps Taken to Place Investments on a Sound Footing

In the past year, MDA gained important knowledge by successfully conducting several important tests, including a test to show how well its systems will operate together. MDA has also taken steps to lower the acquisition risks of two newer programs by adding more development time. However, development issues discovered after three programs prematurely committed to production continue to disrupt both interceptor production and flight test schedules. In addition, two other programs plan to make premature commitments to production before testing confirms their designs work as intended. MDA is planning to fly targets for the first time in its first operational test using several systems, adding risk that key information may not be obtained in this major test.

Challenge: Ensure Program Baselines Support Oversight

While MDA has made substantial improvements to the clarity of its cost and schedule baselines since first reporting them in 2010, they are still not useful for decision makers to gauge progress. For example, the information they include is not sufficiently comprehensive because they do not include operation and support costs from the military services. By not including these costs, the life cycle costs for some MDA programs could be significantly understated.

Challenge: Developing and Deploying U.S. Missile Defense in Europe

DOD declared the first major deployment of U.S. missile defense in Europe operational in December 2011, but MDA is faced with resolving some issues to provide the full capability and is facing delays to some systems planned in each of the next three major deployments. MDA has also struggled for years to develop the tools--the models and simulations--to credibly assess operational performance of systems before they are deployed. It recently committed to a new approach to resolve this problem.

Why GAO Did This Study

Since 2002 MDA has spent approximately $90 billion to provide protection from enemy ballistic missiles by developing battle management systems, sensors that identify incoming threats, and missiles to intercept them. MDA plans to spend about $8 billion per year through 2017. For nearly a decade, we have reported on MDA's progress and challenges in developing and fielding the Ballistic Missile Defense System.

GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through acquisition baselines. This report examines the agency's progress and remaining challenges in (1) selecting new programs in which to invest; (2) putting programs on a sound development path; (3) establishing baselines that support oversight; and (4) developing and deploying U.S. missile defense in Europe for defense of Europe and the United States. To do this, GAO examined MDA's acquisition reports, analyzed baselines reported over several years to discern progress, and interviewed a wide range of DOD and MDA officials.

What GAO Recommends

GAO makes four recommendations to DOD to ensure MDA (1) fully assesses alternatives before selecting investments, (2) takes steps to reduce the risk that unproven target missiles can disrupt key tests, (3) reports full program costs, and (4) stabilizes acquisition baselines. DOD concurred with two recommendations and partially concurred with two, stating the decision to perform target risk reduction flight tests should be weighed against other programmatic factors and that its current forum for reporting MDA program costs should not include non-MDA funding. GAO continues to believe the recommendations are valid as discussed in this report.

For more information- contact Cristina Chaplain at (202) 512-4841 or chaplainc@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In providing comments on this report, the agency concurred with this recommendation. MDA is currently conducting an analysis of alternatives (AOA) for homeland ballistic missile defense and an AOA for a BMDS sensor architecture. As of July 2016, MDA has yet to release the final homeland defense AOA report. MDA officials stated the results of the analysis from the homeland defense AOA were reached in early fiscal year 2015 and informed the decision to pursue the RKV. The AOA results were summarized and briefed to staff members from the congressional defense committees and senior DOD leadership. In August 2016, MDA officials stated the analysis for the sensors AOA is complete and that they are finalizing the report, with expected completion in fiscal year 2017. We await the final AOA reports from MDA to make a determination of whether the recommendation was implemented.

    Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to undertake robust alternatives analyses for new major missile defense efforts currently underway, including the SM-3 Block IIB, and before embarking on any other major new missile defense programs. In particular, such analyses should consider a broad range of alternatives.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: MDA has not adjusted its test plans for tests with new target types to include risk-reduction flights tests prior to inclusion in a major test event. For example, on June 26, 2015 MDA launched a new intermediate-range target during Flight Test Operational (FTO)-02 Event 1 without first verifying its performance in a risk-reduction flight. MDA's current test plan includes other major test events with new, untested targets, such as Flight Test Ground-Based Midcourse Defense (FTG)-15 in the first quarter of fiscal year 2017 with an intercontinental-range target. Flight test preparation processes such as dry-runs and quality control checks are not a substitute for risk reduction flights and are not sufficient to ensure that the design of a new target works as intended. Risk reduction flights for new targets would reduce overall risk in the flight test plan. We will continue to review MDA's test plans to determine if they are including risk-reduction flight tests for new targets.

    Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to add risk reduction non-intercept flight tests for each new type of target missiles developed.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: DOD partially concurred with our recommendation regarding life cycle costs, agreeing that decision makers should have insight into the full life-cycle costs of programs. To date, however, MDA is still not including military services' operations and sustainment costs, which are part of the full life-cycle costs, in its resource baselines reported in its Ballistic Missile Defense System Accountability Report. MDA is trying to determine how to report full life cycle costs to decision makers, but has indicated that its Ballistic Missile Defense System Accountability Report is not an appropriate forum for including military services' operation and support costs. We continue to believe that the full costs of a program should be considered when making decisions to provide resources and, therefore, both DOD and Congress would benefit from a comprehensive understanding of the full costs of the Missile Defense Agency?s acquisition programs.

    Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to include in its resource baseline cost estimates all life cycle costs, specifically the operations and support costs, from the military services in order to provide decision makers with the full costs of ballistic missile defense systems.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: DOD concurred with our recommendation regarding the stabilization of acquisition baselines. DOD officials stated, however, that it is necessary to recognize that the Ballistic Missile Defense System baselines change to respond to evolving requirements provided by other organizations and leaders--from the warfighters to the President--and to counter changing threats. DOD also stated that the Missile Defense Agency Director has the authority to make these adjustments, within departmental guidelines. Our recommendation is not designed to limit the Director's authority to adjust baselines or to prevent adjusting baselines as appropriate, but rather to address issues we have found that are within the Missile Defense Agency's control. For the Missile Defense Agency to effectively report longer-term progress of its acquisitions and provide necessary transparency to Congress, it is critical that the agency provide stabilized baselines. In 2016 the Missile Defense Agency Director made changes to the Targets and Countermeasures program's baseline that may make tracking progress against prior years and the original baseline very difficult, and in some instances, impossible.

    Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to stabilize the acquisition baselines, so that meaningful comparisons can be made over time that support oversight of those acquisitions.

    Agency Affected: Department of Defense

 

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