Missile Defense:

Mixed Progress in Achieving Acquisition Goals and Improving Accountability

GAO-14-351: Published: Apr 1, 2014. Publicly Released: Apr 1, 2014.

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What GAO Found

In fiscal year 2013, the Missile Defense Agency (MDA) made mixed progress in achieving its acquisition goals to develop, test, and produce elements of the Ballistic Missile Defense System (BMDS). For the first time, MDA conducted an operational flight test that involved warfighters from several combatant commands using multiple BMDS elements simultaneously. The agency also successfully conducted several developmental flight tests that demonstrated key capabilities and modifications made to resolve prior production issues. However, the Aegis BMD and Ground-based Midcourse Defense (GMD) continued to experience testing and development challenges.

Aegis BMD—while the program successfully conducted three intercept flight tests with the Standard Missile (SM)-3 Block IB missile in support of a full production decision planned for fiscal year 2015, a missile failed during one of these tests. Although the cause of failure is not known, the program plans to move forward with missile production in 2014. The program is also determining whether a key component that is common with the already fielded SM-3 Block IA missile will need to be redesigned.

GMD—although the program successfully conducted a non-intercept flight test of its upgraded interceptor, the program is nearing a seven year delay in completing its first successful intercept. Until this upgraded interceptor is demonstrated in an intercept test, expected to be conducted in the third quarter of fiscal year 2014, manufacturing and deliveries remain on hold. In July 2013, the GMD program also failed a flight test of its fielded interceptor. This flight test was designed to assess the fielded interceptor under more challenging conditions and to confirm design changes to resolve prior issues. MDA has not yet made a decision on how to proceed since the cause of failure has not been determined.

MDA has improved the clarity of its resource and schedule baselines since it first submitted them to Congress in 2010. However, issues with the content and presentation of these baselines continue to limit the usefulness of the information available to decision makers for oversight. First, as the agency is still in the process of improving the quality and comprehensiveness of the cost estimates that support its resource baselines, for the fourth year, GAO has found that MDA's cost estimates are unreliable. For example, MDA's 2013 cost estimates still do not include operations and support costs for military services which may significantly understate total costs. Congress has recently required MDA to include these costs in future acquisition baselines which may improve transparency. Second, MDA's schedule baselines are presented in a way that makes it difficult to assess progress. Specifically, MDA's 2013 schedule baselines include numerous events but provide very little information about them, making it difficult to understand what the events are and why they are important. Additionally, the 2013 schedule baselines do not compare the current event dates with previously reported dates, so decision makers cannot easily assess how the program is performing over time. Until MDA improves the quality and comprehensiveness of its cost estimates and the content of its schedule information, its baselines will not be useful for decision makers to gauge progress.

Why GAO Did This Study

Since 2002, MDA has spent approximately $98 billion and has requested $38 billion more through fiscal year 2018 to develop, test, and field a system to defend against enemy ballistic missiles. The BMDS is comprised of a command and control system, sensors that identify incoming threats, and intercepting missiles. GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported to Congress through its acquisition baselines, and to report on other issues as appropriate. This report examines the agency's progress and any challenges in fiscal year 2013 associated with (1) developing, flight testing, and producing individual systems, which MDA refers to as BMDS elements; and (2) reporting resource and schedule baselines that support oversight. To support this effort, GAO examined MDA's acquisition and test reports, analyzed two of MDA's acquisition baselines—resource and schedule—to discern progress, and interviewed a wide range of DOD and contractor officials.

What GAO Recommends

GAO recommends (1) any changes to the SM-3 Block IB be flight tested before DOD approves full production; (2) retest the fielded GMD interceptor to demonstrate performance; and (3) improve the content of its schedule baselines. DOD partially concurred with the first, non-concurred with the second, and concurred with the third, stating that the production and testing decisions will be made using the proper DOD processes. GAO believes both 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: The agency partially concurred with our recommendation. MDA is currently conducting an investigation into the failure, thus the extent to which modifications are required is still unclear.

    Recommendation: To strengthen MDA's acquisitions and help support oversight and, to the extent that MDA determines hardware or software modifications are required to address the September 2013 Aegis BMD SM-3 Block IB failure, the Secretary of Defense should direct, (a) the Director of the MDA to verify the changes work as intended through subsequent flight testing, and (b) the Under Secretary of Defense, Acquisitions, Technology, and Logistics to delay the decision to approve the program's full production until such testing demonstrates that the redesigned missile is effective and suitable.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: DOD did not concur with the recommendation. In its response to the recommendation, DOD stated the decision to flight test a CE-I interceptor will be made by the Director, MDA, based on the judgment of stakeholders from the Office of the Secretary of Defense and combatant commanders on the need to perform a test. According to MDA's master test plan, the next planned CE-I flight test is scheduled for fiscal year 2018.

    Recommendation: To strengthen MDA's acquisitions and help support oversight, and to demonstrate the Capability Enhancement-I's (CE-I) effectiveness against a longer range target in more challenging conditions and to confirm the design changes implemented to improve performance, as well as any changes needed to resolve the July 2013 CE-I flight test failure work as intended, the Secretary of Defense should direct MDA's Director to conduct a flight test of the CE-I interceptor once the cause of the failure has been determined and any mitigations have been developed.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In April 2014, GAO reported that MDA's schedule baselines, as shown in their annual Ballistic Missile Defense System (BMDS) Accountability Report (BAR), were presented in a way that makes it difficult for decision makers to understand a program's planned activities and, accordingly, hold programs accountable for their performance (GAO-14-351). To strengthen MDA's acquisitions and help support oversight, GAO recommended that the Secretary of Defense direct the MDA Director to take three actions to improve the content of the schedule baselines it reports to Congress: a) focus the information included in the schedule baselines to highlight critical events; b) for each event included in the schedule baseline, provide a description for the event explaining what it entails and why it is important; and c) present the schedule baseline in a format that allows decision makers to identify any changes made from the current estimated date to the date reported in not only the prior year's BAR but also to the date established in the initial baseline. In its latest BAR in March 2014, in response to our recommendation, MDA included a new Appendix A providing a summary of critical events from the schedule baseline for each BMDS component program required to be presented in the BAR. The table compares dates of critical program events from the date in the initial baseline, the date presented in the prior year's BAR, and the most current baseline estimate. In addition, a description of each event is included in the appendix. Presenting information in this format will better allow decision makers to assess how a program is performing over time.

    Recommendation: To strengthen MDA's acquisitions and help support oversight and, to improve the content of the schedule baselines it reports to Congress for monitoring program performance, the Secretary of Defense should direct MDA's Director to take the following actions as MDA implements other improvements required by the Congress: (a) Focus the information included in the schedule baselines to highlight critical events. (b) For each event included in the schedule baseline, provide a description of the event explaining what it entails and why it is important. (c) Present the schedule baseline in a format that allows decision makers to identify any changes made from the current estimated date to the date reported in not only the prior year's BMDS Accountability Report but also to the date established in the initial baseline.

    Agency Affected: Department of Defense

 

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