This is the accessible text file for GAO report number GAO-04-635T 
entitled 'Defense Acquisitions: The Army's Future Combat Systems' 
Features, Risks, and Alternatives' which was released on April 01, 

This text file was formatted by the U.S. General Accounting Office 
(GAO) to be accessible to users with visual impairments, as part of a 
longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately.


Before the Subcommittee on Tactical Air and Land Forces, Committee on 
Armed Services, House of Representatives:

United States General Accounting Office:


For Release on Delivery Expected at 1:00 p.m. EST:

Thursday, April 1, 2004:

Defense Acquisitions:

The Army's Future Combat Systems' Features, Risks, and Alternatives:

Statement of Paul L. Francis, Director, Acquisition and Sourcing 


GAO Highlights:

Highlights of GAO-04-635T, a testimony before the Subcommittee on 
Tactical Air and Land Forces, Committee on Armed Services, House of 

Why GAO Did This Study:

To become a more responsive and dominant combat force, the U.S. Army is 
changing its strategy from bigger and stronger weapons to faster and 
more agile ones. The Future Combat Systems (FCS)—which the Army calls 
the “greatest technology and integration challenge ever undertaken”—is 
expected to meet the Army’s transformational objectives. Forming FCS’ 
backbone is an information network that links 18 systems. Not only is 
FCS to play a pivotal role in the Army’s military operations, FCS and 
its future iterations are expected to eventually replace most of the 
Army forces. For FCS’ first developmental increment, the Army has set 
aside a 5 ½-year timetable from program start (May 2003) until the 
initial production decision (November 2008). 

GAO was asked to testify about FCS’ key features, whether the program 
carries any risks, and, if so, whether there are alternatives for 
developing FCS capabilities with fewer risks.

What GAO Found:

The FCS concept is a new generation of manned and unmanned ground 
vehicles, air vehicles, and munitions, each of which taps into a secure 
network of superior combat information. These weapon systems are to be 
a fraction of the weight of current weapons yet as lethal and 
survivable. FCS’ lightweight and small size are critical to meeting the 
Army’s goals of deploying faster and being more transportable for big 
or small military operations. Rather than rely on heavy armor to 
withstand an enemy attack, FCS’ systems will depend on superior 
communications to kill the enemy before being detected. One of FCS’ key 
advantages is that it provides an architecture within which individual 
systems will be designed—an improvement over designing systems 
independently and making them interoperable after the fact. Another 
merit is that FCS is being acquired and developed with the full 
cooperation of the Army’s program managers, contractors, and the 
warfighter community.

FCS is at significant risk for not delivering required capability 
within budgeted resources. Three-fourths of FCS’ needed technologies 
were still immature when the program started. The first prototypes of 
FCS will not be delivered until just before the production decision. 
Full demonstration of FCS’ ability to work as an overarching system 
will not occur until after production has begun. This demonstration 
assumes complete success—including delivery and integration of numerous 
complementary systems that are not inherently a part of FCS but are 
essential for FCS to work as a whole. When taking into account the 
lessons learned from commercial best practices and the experiences of 
past programs, the FCS strategy is likely to result in cost and 
schedule consequences if problems are discovered late in development. 

Because it is promising to deliver unprecedented performance 
capabilities to the warfighter community, the Army has little choice 
but to meet a very high standard and has limited flexibility in cutting 
FCS requirements. Because the cost already dominates its investment 
budget, the Army may find it difficult to find other programs to cut in 
order to further fund FCS. To avoid unanticipated cost and schedule 
problems late in development, several alternatives can be considered:

* add time to FCS’ acquisition schedule to reduce concurrent 
* take the time to develop and demonstrate the most critical 
capabilities first, such as the FCS network, then proceed with an 
acquisition program; and
* focus on maturing the most critical technologies first, then bundle 
them in demonstrations of capabilities, and ensure that decision makers 
have attained the knowledge they need at critical junctures before 
moving forward.

What GAO Recommends:

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Paul L. Francis at (202)
512-4841 or

[End of section]

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the Department of the Army's 
Future Combat Systems (FCS), a networked suite of weapons and other 
systems. FCS is the centerpiece of the Army's plan to transform to a 
lighter, more agile, and more capable force. The Army plans to develop 
and field FCS in increments, but has only defined the first increment 
at this time. Increment 1 of FCS began system development and 
demonstration in May 2003. The production decision is currently planned 
for November 2008 and initial operational capability is slated for 
December 2010. This first increment will equip 15 brigade-sized Units 
of Action by 2020--about one third of the active force. Total costs to 
develop and produce Increment 1 are estimated at $92 billion, in then 
year dollars. The fiscal year 2004 budget provides $1.7 billon in 
research and development funds for FCS; the fiscal year 2005 budget 
requests a substantial increase to $3.2 billion.

Today I would like to cover (1) the features of the FCS concept, (2) 
the prospects for delivering a capable FCS within budgeted cost and 
schedule, and (3) whether alternatives to the current FCS strategy are 
worth considering.


FCS is an information network linking a suite of 18 new manned and 
unmanned ground vehicles, air vehicles, sensors, and munitions. They 
are to be a fraction of the weight of current weapons, yet are to be as 
lethal and survivable. Their lightweight and small size are critical to 
meeting the other goals of the Army's future force: better 
responsiveness and enhanced sustainability. At a fundamental level, the 
FCS concept is replacing mass with superior information; that is, to 
see and hit the enemy first, rather than to rely on heavy armor to 
withstand an attack. The ability to make this leap depends on (1) the 
ability of the network to collect, process, and deliver vast amounts of 
information such as imagery and communications and (2) the performance 
of the individual systems themselves. This concept has a number of 
progressive features. It provides an architecture within which 
individual systems will be designed--an improvement over designing 
systems independently and making them interoperable after the fact. It 
includes sustainability as a design characteristic versus an 
afterthought. It has galvanized relationships between users and 
developers. It also shows a willingness on the part of Army leaders not 
to be bound by tradition.

FCS is at significant risk for not delivering required capability 
within budgeted resources. At conflict are the program's unprecedented 
technical challenges and time. At a top level, the technical challenges 
are: development of a first-of-a-kind network, 18 advanced systems, 53 
critical technologies, 157 complementary systems, and 34 million lines 
of software code. From a time standpoint, the Army allows only 5 ½ 
years between program start and the production decision. This is faster 
than it has taken to develop a single major system, and FCS has several 
systems including the network, an Abrams replacement, a Bradley 
replacement, and a Crusader replacement. To meet this timetable, FCS is 
proceeding on a highly concurrent strategy that started with over 
75 percent of critical technologies immature. Assuming everything goes 
as planned, the FCS program will begin production before all of its 
systems have been demonstrated. If all FCS elements are not ready at 
the production decision, Army plans still call for going forward with 
production and fielding. Based on the lessons learned from best 
practices and the experiences of past programs, FCS is susceptible to 
discovering costly problems in late development and early production, 
as the demonstration of multiple technologies, individual systems, the 
network, and the system of systems will all culminate.

Alternatives to the current FCS strategy are worth considering in light 
of these risks. The tools normally employed to accommodate problems 
in weapon systems--relaxing performance requirements and adding funds-
-may not be available to the FCS program. The opportunity for making 
performance trade-offs on FCS is limited by the fact that it must be 
transportable by the C-130 aircraft yet be as lethal and survivable as 
the current force. On the funding side, the $92 billion cost estimate 
only allows for 14 of the 18 systems to be acquired, despite being 
based on an immature program and assuming full success in development. 
A modest delay late in development could cost $5 billion; a similarly 
modest 10-percent increase in production cost would amount to 
$7 billion. Providing more money on this scale after problems have 
occurred may not be feasible given the fiscal pressures the government 
in general--and DOD in particular--faces. Several alternatives that 
would enable a less concurrent--and more predictable--strategy are 
possible, if acted upon early. Alternatives should have several things 
in common: building more knowledge before commitments like production 
are made; preserving the advantages of the FCS concept, such as 
defining an architecture to guide the design of individual systems; and 
the ability to spin off mature technologies to existing systems.

Army Transformation and the FCS Program:

The Army plans to develop and acquire FCS in at least two increments 
but, according to program officials, only the first one has been 
defined at this point. The first increment is an information network 
linking a new generation of 18 manned and unmanned ground vehicles, air 
vehicles, sensors, and munitions. The manned ground vehicles are to be 
a fraction of the weight of current weapons such as the Abrams tank and 
Bradley Fighting Vehicle, yet are to be as lethal and survivable. At a 
fundamental level, the FCS concept is replacing mass with superior 
information; that is, to see and hit the enemy first, rather than to 
rely on heavy armor to withstand attack. The ability to make this leap 
depends on (1) the ability of the network to collect, process, and 
deliver vast amounts of information such as imagery and communications 
and (2) the performance of the individual systems themselves. The 
concept has a number of progressive features. For example, it provides 
an architecture within which individual systems will be designed--an 
improvement over designing systems independently and making them 
interoperable after the fact.

Army Transformation:

A decade after the cold war ended, the Army recognized that its combat 
force was not well suited to perform the operations it faces today and 
is likely to face in the future. The Army's heavy forces had the 
necessary firepower but required extensive support and too much time to 
deploy. Its light forces could deploy rapidly but lacked firepower. To 
address this mismatch, the Army decided to radically transform itself 
into a new "Future Force."

The Army expects the Future Force to be organized, manned, equipped, 
and trained for prompt and sustained land combat, requiring a 
responsive, technologically advanced, and versatile force. These 
qualities are intended to ensure the Future Force's long-term dominance 
over evolving, sophisticated threats. The Future Force will be 
offensively oriented and will employ revolutionary operational 
concepts, enabled by new technology. This force will fight very 
differently than the Army has in the past, using easily transportable 
lightweight vehicles, rather than traditional heavily armored 
vehicles.[Footnote 1] A key characteristic of this force is agility. 
Agile forces would possess the ability to seamlessly and quickly 
transition among various types of operations from support operations to 
warfighting and back again. They would adapt faster than the enemy, 
thereby denying it the initiative. In an agile force, commanders of 
small units may not have the time to wait on higher command levels; 
they must have the authority and high quality information at their 
level to act quickly to respond to dynamic situations.

Thus, to be successful, the transformation must include more than new 
weapons. The transformation is extensive, encompassing tactics and 
doctrine, as well as the very culture and organization of the Army.

Against that backdrop, today, I will focus primarily on the equipment 
element of the transformation, represented by FCS.

The FCS Solution:

FCS will provide the majority of weapons and sensor platforms that 
comprise the new brigade-like modular units of the Future Force known 
as Units of Action. Each unit is to be a rapidly deployable fighting 
organization about the size of a current Army brigade but with the 
combat power and lethality of a current (larger) division. The Army 
also expects FCS-equipped Units of Action to provide significant war-
fighting capabilities to the Joint Force.

The first FCS increment will ultimately be comprised of an information 
network and 18 various systems--which can be characterized as manned 
ground systems, unmanned ground systems, and unmanned air vehicles. 
While some systems will play a larger role in the network than others, 
the network will reside in all 18 systems, providing information to 
them as well as taking information from them. Figure 1 shows FCS 
Increment 1.

Figure 1: Basic Composition of FCS Increment 1:

[See PDF for image]

[End of figure]

The Joint Tactical Radio System and the Warfighter Information 
Network-Tactical are two programs outside of FCS that integrate all the 
various systems and soldiers together. As such, their development is 
crucial to the FCS network. The communications backbone of the Unit of 
Action will be a multi-layered mobile network centered on the Joint 
Tactical Radio System. According to program officials, all soldiers and 
FCS vehicles, including the unmanned vehicles, will employ these 
radios. Beyond being the primary communications component within the 
unit, the Joint Tactical Radio System also will assist with 
communications beyond the unit, to assets at higher echelons. 
Communications with those echelons will be enabled through the 
Warfighter Information Network-Tactical, which provides the 
overarching network background for the FCS network and is expected to 
conform to DOD's interoperability and network architecture directives.

Increment 1 began system development and demonstration in May 2003. 
Currently, only the network and 14 systems are funded. The remaining 
4 systems will be introduced as funding becomes available. Current 
estimates are for the acquisition of Increment 1 to cost $92 billion 
(then-year dollars) and to achieve an initial operational capability by 
the end of 2010. Although the Under Secretary of Defense approved the 
Army's request to begin the system development and demonstration 
phase, he directed the Army to prepare for a full program review in 
November 2004. Increment 1 is expected to replace roughly one-third of 
the active force through about 2020, when the first 15 Units of Action 
are fielded.

According to program officials, the Army has not yet defined future FCS 
increments. However, it is important to note that the Army expects to 
eventually replace most of its current forces with the FCS. Much of the 
current Army heavy force is expected to remain in the inventory--
needing to be maintained and upgraded--through at least 2020. We 
recently reported[Footnote 2] that costs of maintaining legacy systems 
would be significant, but funding is likely to be extremely limited, 
particularly given competition for funds from transformation efforts. 
We concluded that maintaining legacy equipment will likely be a major 
challenge, necessitating funding priorities to be more clearly linked 
to needed capability and to long-range program strategies.

The Army intends to employ a single Lead Systems Integrator throughout 
the completion of Increment 1. The Lead System Integrator will be the 
single accountable, responsible contractor to integrate FCS on time and 
within budget. It will act on behalf of the Army throughout the life of 
the program to optimize the FCS capability, maximize competition, 
ensure interoperability, and maintain commonality in order to reduce 
life-cycle cost. In order to quickly transition into system development 
and demonstration and to manage the multitude of tasks associated with 
FCS acquisition, the Army chose the Lead System Integrator approach to 
capitalize on industry's flexibility.

The Requirements Challenge:

The Army wants the FCS-equipped Unit of Action to have a number of 
features. These can be described in four characteristics: lethality, 
survivability, responsiveness, and sustainability. The Unit of Action 
is to be as lethal as the current heavy force. It must have the 
capability to address the combat situation, set conditions, maneuver to 
positions of advantage, and close with and destroy enemy formations at 
longer ranges and greater precision than the current force. To provide 
this level of lethality and reduce the risk of detection, FCS must 
provide high single-shot effectiveness. To be as survivable as the 
current heavy force, the Unit of Action is primarily dependent upon the 
ability to kill the enemy before being detected. This depends on unit's 
ability to see first, understand first, act first, and finish 
decisively. The individual FCS systems will also rely on a layered 
system of protection involving several technologies that lowers the 
chances of a vehicle or other system being seen by the enemy; if seen, 
lowers the chances of being acquired; if acquired, lowers the chances 
of being hit; if hit, lowers the chances of being penetrated; and 
finally, if penetrated, increases the chances of surviving. To be 
responsive, Units of Action must be able to rapidly deploy anywhere in 
the world, be rapidly transportable via various transport modes, and be 
ready to fight upon arrival. To facilitate rapid transportability, FCS 
vehicles are being designed to match the weight and size constraints of 
the C-130 aircraft. The Unit of Action is to be capable of sustaining 
itself for periods of 3 to 7 days depending on the level of conflict. 
This sustainability requires subsystems with high reliability and low 
maintenance, reduced demand for fuel and water, highly effective 
offensive weapons, and a fuel-efficient engine.

Meeting all these requirements will be a difficult challenge because 
the solution to meet one requirement may work against another 
requirement. For example, the FCS vehicles' small size and lighter 
weight are factors that improve agility, responsiveness, and 
deployability. However, their lighter weight precludes the use of the 
traditional means to achieve survivability--heavy armor. Instead, the 
FCS program must use cutting-edge technology to develop systems, such 
as an active protection system, to achieve survivability. Yet such 
technology cannot be adopted if it impairs the new systems' reliability 
and maintainability. Weight, survivability, and reliability will have 
to be kept in balance.

Merits of the Concept:

The essence of the FCS concept itself--to provide the lethality and 
survivability of the current heavy force with the sustainability and 
deployability of a force that weighs a fraction as much--has the 
intrinsic attraction of doing more with less. The concept has a number 
of merits, which demonstrate the Army's desire to be proactive in its 
approach to preparing for potential future conflicts and its 
willingness to break with tradition in developing an appropriate 
response to the changing scope of modern warfare.

* If successful, the architecture the program is developing will 
leverage individual capabilities of weapons and platforms and will 
facilitate interoperability and open systems. This architecture is a 
significant improvement over the traditional approach of building 
superior individual weapons that must be netted together after the 
fact. Also, the system of systems network and weapons could give 
acquisition managers the flexibility to make best value trade-offs 
across traditional program lines.

* This transformation of the Army, both in terms of operations and in 
equipment, is underway with the full cooperation of the Army warfighter 
community. In fact, the development and acquisition of FCS are being 
done using a collaborative relationship between the developer (program 
manager), the contractor, and the warfighter community. For example, 
the developer and the warfighter are using a disciplined approach to 
decompose the Unit of Action Organizational and Operational Plan and 
the FCS Operational Requirements Document into detailed specifications. 
This work is defining in detail the requirements for a Unit of Action 
to operate in a network-centric environment. This approach is in line 
with best practices to ensure that specific technical issues are 
understood before significant design work is done.[Footnote 3]

* The Army has established sustainability as a design characteristic 
equal to lethality and survivability. This is an improvement over past 
programs, such as the Apache helicopter and the Abrams tank. These 
programs did not emphasize sustainability, to less than desirable 
results, including costly maintenance problems and low readiness rates, 
which persisted even after the systems were fielded. FCS' approach of 
emphasizing sustainability from the outset should allow operating and 
support costs and readiness to be evaluated early in development, when 
there is a greater chance to affect those costs positively. This 
approach is also in line with best practices.[Footnote 4]

FCS at Significant Risk of Not Delivering Required Capability Within 
Estimated Resources:

The FCS program has yet to--and will not--demonstrate high levels of 
knowledge at key decision points. It thus carries significant risks for 
execution. At conflict are the program's technical challenges and 
limited time frame. The Army began system development and demonstration 
in May 2003 and plans to make its initial FCS production decision in 
November 2008--a schedule of about 5 ½ years. Seventy-five percent of 
the technologies were immature at the start of system development and 
demonstration and some will not be proven mature until after the 
scheduled initial production decision. First prototypes for all 14 
funded systems and the network will not be demonstrated together until 
after the production decision and will serve both as technology 
demonstrators and system prototypes. They will represent the highest 
level of FCS demonstration before production units are delivered, as no 
production-representative prototypes are planned. Even this level of 
demonstration assumes complete success in maturing the technologies, 
developing the software, and integrating the systems--as well as the 
delivery and integration of the complementary systems outside of FCS. 
While the Army is embarking on an impressive array of modeling, 
simulation, emulation, and other demonstration techniques, actual 
demonstration of end items is the real proof, particularly for a 
revolutionary advance, such as FCS.

If the lessons learned from best practices and the experiences of past 
programs have any bearing, the FCS strategy is susceptible to "late 
cycle churn," a phrase used by private industry to describe the 
discovery of significant problems late in development and the attendant 
search for fixes when costs are high and time is short. FCS is 
susceptible to this kind of experience as the demonstration of multiple 
technologies, individual systems, the network, and the system of 
systems will all culminate late in development and early production.

FCS Is an Unprecedented Technical Challenge:

In the Army's own words, FCS is "the greatest technology and 
integration challenge the Army has ever undertaken." It intends to 
develop a complex, family of systems-an extensive information network 
and 14 major weapon systems--in less time than is typically taken to 
develop, demonstrate, and field a single system. The FCS Acquisition 
Strategy Report describes this scenario as a "dramatically reduced 
program schedule (which) introduces an unprecedented level of 
concurrency." Underscoring that assessment is the sheer scope of the 
technological leap required for the FCS. For example:

* A first-of-a-kind network will have to be developed.

* The 14 major weapon systems or platforms have to be designed and 
integrated simultaneously and within strict size and weight 

* At least 53 technologies that are considered critical to achieving 
critical performance capabilities will need to be matured and 
integrated into the system of systems.

* The development, demonstration, and production of as many as 
157 complementary systems will need to be synchronized with FCS content 
and schedule. This will also involve developing about 100 network 
interfaces so the FCS can be interoperable with other Army and joint 

* An estimated 34 million lines of software code will need to be 
generated (5 times that of the Joint Strike Fighter, which had been the 
largest defense undertaking in terms of software to be developed).

Some of these technical challenges are discussed below.

Network Development Challenges:

The overall FCS capabilities are heavily dependent on a high quality of 
service--good information, delivered fast and reliable--from the 
network. However, the Army is proceeding with development of the entire 
FCS system of systems before demonstrating that the network 
will deliver as expected. Many developmental efforts will need to be 
successful for the network to perform as expected. For each effort, a 
product--whether software or hardware--must first be delivered and then 
demonstrated individually and collectively. The success of these 
efforts is essential to the high quality of service the network must 
provide to each Unit of Action. In some cases, an individual technology 
may be a linchpin--that is, if it does not work, the network's 
performance may be unacceptable. In other cases, lower than expected 
performance across a number of individual technologies could 
collectively degrade network performance below acceptable levels. Some 
key challenges are highlighted below:

* System of Systems Common Operating Environment is a software layer 
that enables interoperability with external systems and manages the 
distribution of information and software applications across the 
distributed network of FCS systems. According to program officials, the 
System of Systems Common Operating Environment is on the critical path 
for most FCS software development efforts.

* The Joint Tactical Radio System and the Warfighter Information 
Network-Tactical, and several new wideband waveforms--all in 
development--are essential to the operation of the FCS network. It is 
vital that these complementary developments be available in a timely 
manner for the currently planned demonstrations of the network.

* The information-centric nature of FCS operations will require a great 
deal of bandwidth to allow large amounts of information to be 
transmitted across the wireless network. However, the radio frequency 
spectrum is a finite resource, and there is a great deal of competition 
and demand for it. An internal study revealed that FCS bandwidth demand 
was 10 times greater than what was actually available. As a result, the 
program initiated a series of trade studies to examine and reassess 
bandwidth requirements of various FCS assets. The results of these 
studies may have a dramatic effect on the FCS network. The Army has 
already made a number of changes to the network design to use available 
bandwidth more efficiently and to reduce bandwidth demand.

* After determining that Unmanned Aerial Vehicle (UAV) sensor missions 
would constitute the largest consumption of network bandwidth, the Army 
started a new wideband waveform development effort, using the higher 
frequency bands. This effort will also require new updated Joint 
Tactical Radio System hardware and new antennas in addition to a new 

* Sophisticated attackers could compromise the security of the FCS 
network, which is critical to the success of the system of systems 
concept. Such an attack could degrade the systems' war-fighting ability 
and jeopardize the security of Army soldiers. The Army is developing 
specialized protection techniques as there is only limited commercial 
or government software currently available that will adequately protect 
a mobile network like the one proposed for FCS.

UAV Development Challenges:

FCS Increment 1 includes four classes of UAVs that cover increasing 
areas of responsibility. According to program officials, two of the UAV 
classes are currently unfunded and are currently not being developed. 
The Army plans to develop, produce and field them if funding becomes 
available. Within the FCS concept, UAV roles include reconnaissance, 
target acquisition and designation, mine detection, and wide-band 
communications relay. The required UAVs will need to be designed, 
developed, and demonstrated within the 5½-year period prior to the 
initial FCS production decision. As we recently testified,[Footnote 5] 
DOD's experiences show that it is very difficult to field UAVs. Over 
the last 5 years, only three systems have matured to the point that 
they were able to use procurement funding.

Manned Ground Vehicle Development Challenges:

FCS Increment 1 includes eight manned ground systems, however, one--the 
maintenance and recovery vehicle--is unfunded. The Army plans to use 
the Heavy Expanded Mobility Tactical Truck-Wrecker in its place in the 
Unit of Action. The remaining seven manned ground systems require 
critical individual and common technologies to meet required 
capabilities. For example, the Mounted Combat System will require, 
among other new technologies, a newly developed lightweight weapon for 
lethality; a hybrid electric drive system and a high-density engine for 
mobility; advanced armors, an active protection system, and advanced 
signature management systems for survivability; a Joint Tactical Radio 
System with the wideband waveform for communications and network 
connection; a computer-generated force system for training; and a water 
generation system for sustainability.

Under other circumstances, each of the seven manned ground systems 
would be a major acquisition program on par with the Army's past major 
ground systems such as the Abrams tank, the Bradley Fighting Vehicle, 
and the Crusader Artillery System. As such, each requires a major 
effort to develop, design, and demonstrate the individual vehicles. 
Recognizing that a number of subsystems will be common among the 
vehicles, meeting the Army's schedule will be a challenge as this 
effort must take place within the 5½-year period prior to the initial 
FCS production decision.

High Levels of Demonstrated Knowledge Are Key to Getting Desired 

We have found for a program to deliver a successful product within 
identified resources, managers should build high levels of demonstrated 
knowledge before significant commitments are made.[Footnote 6] Figure 2 
depicts the key elements for building knowledge.

Figure 2: Best Practices Model Focuses on Three Critical Knowledge 

[See PDF for image]

[End of figure]

This knowledge build, which takes place over the course of a program, 
can be broken down into three knowledge points to be attained at key 
junctures in the program:

* At knowledge point 1, the customer's needs should match the 
developer's available resources--mature technologies, time, and 
funding. This is indicated by the demonstrated maturity of the 
technologies needed to meet customer needs.[Footnote 7]

* At knowledge point 2, the product's design is stable and has 
demonstrated that it is capable of meeting performance requirements. 
This is indicated by the number of engineering drawings that are 
releasable to manufacturing.

* At knowledge point 3, the product must be producible within cost, 
schedule, and quality targets and have demonstrated its reliability. It 
is also the point at which the design must demonstrate that it performs 
as needed. Indicators include the number of production processes in 
statistical control.

The three knowledge points are related, in that a delay in attaining 
one delays those that follow. Thus, if the technologies needed to meet 
requirements are not mature, design and production maturity will be 
delayed. For this reason, the first knowledge point is the most 
important. DOD's acquisition policy has adopted the knowledge-based 
approach to acquisitions. Translating this approach to DOD's 
acquisition policy, a weapon system following best practices would 
achieve knowledge point 1 by the start of system development and 
demonstration, knowledge point 2 at critical design review (about 
halfway through development), and knowledge point 3 by the start of 

For the most part, all three knowledge points are eventually attained 
on a completed product. The difference between highly successful 
product developments--those that deliver superior products within cost 
and schedule projections--and problematic product developments is how 
this knowledge is built and how early in the development cycle each 
knowledge point is attained. If a program is attaining the desired 
levels of knowledge, it has less risk--but not zero risk--of future 
problems. Likewise, if a program shows a gap between demonstrated 
knowledge and best practices, it indicates an increased risk--not a 
guarantee--of future problems. Typically, these problems cost more 
money than has been identified and take more time than has been 

DOD programs that have not attained these levels of knowledge have 
experienced cost increases and schedule delays. We have recently 
reported on such experiences with the F/A-22, the Advanced SEAL 
Delivery System, the Airborne Laser, and the Space Based Infrared 
System High. For example, the technology and design matured late in the 
F/A-22 program and have contributed to numerous problems. Avionics have 
experienced major development problems and have driven large cost 
increases and caused testing delays.

Even Assuming Success, FCS Strategy Will Not Demonstrate High Levels of 

The FCS program started system development and demonstration with 
significantly less knowledge than called for by best practices. This 
knowledge deficit is likely to delay the demonstration of subsequent 
design and production knowledge at later junctures and puts the program 
at risk of cost growth, schedule delays, and performance shortfalls. 
Two factors contributed to not having a match between resources and 
requirements at the start of system development and demonstration: 
75 percent of critical technologies were not mature and requirements 
were not well defined. Later in the program, when the initial 
production decision is made, a knowledge gap will still exist even if 
the program proceeds on schedule. For example, prototypes of all 14 
funded systems, the network, and the software version needed for 
initial operational capability will not be brought together and tested 
for the first time until after the production decision. Further, as 
production-representative prototypes will not be built, it does not 
appear that much demonstration of production process maturity can occur 
before the production decision.

Knowledge Gap at Start of System Development and Demonstration:

Using best practices, at the start of system development and 
demonstration, a program's critical technologies should be demonstrated 
to a technology readiness level of 7. This means the technology should 
be in the form, fit, and function needed for the intended product and 
should be demonstrated in a realistic environment, such as on a 
surrogate platform. While DOD's policy states a preference for a 
technology readiness level of 7, it accepts a minimum of a level 6. 
According to program officials, technologies were accepted for FCS if 
they were at level 6 or if the Army determined that the technologies 
would reach a readiness level of 6 before the July 2006 critical design 
review. To put this discussion of technology maturity in perspective, 
the difficulties the F/A-22 fighter are currently experiencing with its 
avionics system are, in essence, the consequence of not demonstrating a 
technology readiness level of 7 until late in the program.

Consequently, the Army started FCS system development and demonstration 
phase with about 75 percent of its critical technologies below level 7, 
with many at level 5 and several at levels 3 and 4. Since then, 
progress has been made, but the Army expects that, by the full program 
review in November 2004, only 58 percent of the program's critical 
technologies would be matured to a technology readiness level of 6 or 
higher. The Army estimates that 95 percent of the technologies will 
reach level 6 by the critical design review. The program does not 
expect all FCS critical technologies to be demonstrated to level 7 
until mid-2009, after the initial production decision and about 6 years 
after the start of system development and demonstration.

The second factor keeping the Army from matching resources with 
customer's needs before starting the system development and 
demonstration phase was that it did not have an adequate definition of 
the FCS requirements. The program continues to work on defining the 
requirements for the FCS system of systems and the individual systems. 
System requirements may not be completely defined until at least the 
preliminary design review in April 2005 and, perhaps, as late as the 
critical design review in July 2006. The program still has a number of 
key design decisions to be made that will have major impacts on the FCS 
requirements and the conceptual design of FCS Increment 1. Currently, 
the program has 129 trade studies underway including 5 studies that are 
critical and due to be completed soon. For example, a critical study 
with great potential impact is determining the upper weight limit of 
the individual FCS manned platforms. This determination could affect 
the FCS transportability, lethality, survivability, sustainability, 
and responsiveness capabilities. These and other open questions on the 
FCS requirements will need to be answered in order for the detailed 
design work to proceed and ultimately to be stabilized at the critical 
design review.

Demonstrated Knowledge Will Be Low at Production Decision:

To go from system development and demonstration to production in 
5 ½ years, the FCS program depends on a highly concurrent approach to 
developing technology, as well as to designing, building, testing, and 
producing systems. This level of concurrency resulted from the Army's 
establishment of 2010 as its target for initial operating capability 
for the first FCS Unit of Action. Army officials acknowledge that this 
is an ambitious date and that the program was not really ready for 
system development and demonstration when it was approved. However, the 
officials believe it was necessary to create "irreversible momentum" 
for the program. Army leaders viewed such momentum as necessary to 
change Army culture. The result is an accelerated schedule-driven 
program, as depicted in figure 3, rather than an event-driven program.

Figure 3: The FCS Acquisition Schedule Includes Periods of Concurrent 

[See PDF for image]

[End of figure]

Even if the program successfully completes this schedule, it will yield 
lower levels of demonstrated knowledge than suggested by best practices 
and DOD's acquisition policy. Significant commitments will thus be made 
to FCS production before requisite knowledge is available. For example:

* Technology development is expected to continue through the production 

* At the design readiness review (critical design review) in July 2006, 
technology development will still be ongoing, putting at risk the 
stability of ongoing system integration work.

* In December 2007, while technology development and system integration 
are continuing and first prototypes are being delivered, the Army plans 
to begin long lead item procurement[Footnote 8] and to begin funding 
for the production facilities.

* In November 2008, the initial production decision is expected to be 
made. However, program officials said that some technologies will not 
have reached level 7 by that time, and the system of systems 
demonstration will remain to be done.

* In early 2010, as production deliveries have started, the Army plans 
to finish Integrated System Development and Demonstration Test Phase 
5.1, the first full demonstration of all FCS components as an 
integrated system. Testing and demonstration will continue until the 
full rate production decision in mid-2013.

* The initial operational capability is planned for December 2010.

With the FCS concurrent strategy, much demonstration of knowledge will 
occur late in development and early in production, as technologies 
mature, prototypes are delivered, and the network and systems are 
brought together as a system of systems. This makes the program 
susceptible to "late cycle churn," a condition that we 
reported[Footnote 9] on in 2000. Late cycle churn is a phrase private 
industry has used to describe the efforts to fix a significant problem 
that is discovered late in a product's development. Often, it is a test 
that reveals the problem. The churn refers to the additional--and 
unanticipated--time, money, and effort that must be invested to 
overcome the problem. Problems are most devastating when they delay 
product delivery, increase product cost, or "escape" to the customer.

The discovery of problems in testing conducted late in development is a 
fairly common occurrence on DOD programs, as is the attendant late 
cycle churn. Often, tests of a full system, such as launching a missile 
or flying an aircraft, become the vehicles for discovering problems 
that could have been found earlier and corrected less expensively. When 
significant problems are revealed late in a weapon system's 
development, the reaction--or churn--can take several forms: extending 
schedules to increase the investment in more prototypes and testing, 
terminating the program, or redesigning and modifying weapons that have 
already made it to the field. Over the years, we have reported numerous 
instances in which weapon system problems were discovered late in the 
development cycle.

The Army has embarked on an impressive plan to mitigate risk using 
modeling, simulation, emulation, hardware in the loop, and system 
integration laboratories throughout FCS development. This is a laudable 
approach designed to reduce the dependence on late testing to gain 
valuable information about design progress. However, on a first-of-a-
kind system like FCS that represents a radical departure from current 
systems, actual testing of all the components integrated together is 
the final proof that the system works both as predicted and as needed.

If the FCS strategy does not deliver the system of systems as planned, 
the Army is still prepared to go forward with production and fielding. 
The Army's Acquisition Strategy Report states that at the Initial 
Production Decision, all elements of the FCS may not be ready for 
initial production and will require a continuation of system 
development and demonstration efforts to complete integration and 
testing in accordance with the program-tailoring plan. For those that 
need more time, FCS program manager will present to the Milestone 
Decision Authority a path forward, with supporting analysis. In 
addition, the Army will accept existing systems in lieu of actual FCS 
systems to reach initial operational capability.

Alternatives to FCS Strategy Merit Consideration:

We have reported on options that warrant consideration as alternatives 
for developing FCS capabilities with less risk.[Footnote 10] 
Alternatives are still viable and worth considering, particularly 
before major funding and programmatic commitments are made. If the FCS 
program proceeds as planned and does experience problems later in 
development, it may pose a real dilemma for decision makers. Typically, 
performance, schedule, and cost problems on weapon system programs are 
accommodated by lowering requirements and increasing funding. If the 
FCS program proceeds on its current path until problems occur in 
demonstration, traditional solutions may not be available because of 
the significant role it must fulfill and its financial magnitude.

Alternatives Featuring Lowering FCS Performance or Increasing Funds May 
Be Difficult:

While there is a significant amount of potential flexibility among the 
various FCS systems and technologies, collectively the system of 
systems has to meet a very high standard. It has to be as lethal and 
survivable as the current force and its combat vehicles have to be a 
fraction of the weight of current vehicles to be air transportable on 
the C-130 aircraft. These "must haves" constrain the flexibility in 
relaxing requirements for the FCS system of systems.

The opportunity for increasing funds to cover cost increases poses a 
challenge because FCS already dominates the Army's investment budget. 
It might be difficult to find enough other programs to cut or defer to 
offset FCS increases. Assuming the Army's acquisition cost estimates 
are accurate and the program will succeed according to plan, the FCS 
investment for even the first increment is huge--$92 billion (in then-
year dollars). These assumptions are optimistic as risks make problems 
likely, the cost estimate was based on an immature program, and budget 
forecasts have already forced deferral of four FCS systems. As 
estimated, FCS will command a significant share of the Army's 
acquisition budget, particularly that of ground combat vehicles, for 
the foreseeable future. In fiscal year 2005, the FCS budget request of 
$3.2 billion accounts for 52 percent of the Army's proposed research, 
development, test and evaluation spending on programs in system 
development and demonstration and 31 percent of that expected for all 
Army research, development, test, and evaluation activities. See figure 
4 for FCS costs through 2016.

Figure 4: FCS Funding Climbs, Then Levels Off at Nearly $9 Billion 

[See PDF for image]

[End of figure]

The ramp up in FCS research and development funding is very steep, 
going from $157 million in fiscal 2003 to $1.7 billion in fiscal 2004 
to a projected $3.2 billion in fiscal years 2005 and topping out at 
about $4.3 billion in fiscal 2006. FCS procurement funding is projected 
to start in fiscal 2007 at $750 million and ramp up to an average of 
about $3.2 billion in fiscal years 2008 and 2009. In late development 
(2008-2009) the total FCS costs will run about $5 billion per year. 
After 2008, FCS will command nearly 100 percent of the funding for 
procurement of Army ground combat vehicles. After 2011, FCS costs will 
run nearly $9 billion annually to procure enough FCS equipment for two 
Units of Action per year. According to Army officials, it is not yet 
clear that the Army can afford this level of annual procurement funding 
for FCS. The consequences of even modest cost increases and schedule 
delays for FCS would be dramatic. For example, we believe that a 1-year 
delay late in FCS development, not an uncommon occurrence for other DOD 
programs, could cost $4 billion to $5 billion. A modest 10 percent 
increase in production cost would amount to over $7 billion.

In a broader context, any discussion of DOD's sizeable investment that 
remains in the FCS program must also be viewed within the context of 
the fiscal imbalance facing the nation within the next 10 years. There 
are important competing priorities, both within and external to DOD's 
budget, that require a sound and sustainable business case for DOD's 
acquisition programs based on clear priorities, comprehensive needs 
assessments, and a thorough analysis of available resources. Funding 
specific program or activities will undoubtedly create shortfalls in 

Alternatives for Proceeding:

Alternatives to developing FCS capabilities that do not follow a 
concurrent strategy are feasible, if acted upon early enough. 
Alternatives should have the common elements of building more knowledge 
before making program commitments; preserving the advantages of the FCS 
concept, such as defining an architecture before individual systems are 
developed; and spinning off mature technologies to systems already 
fielded. Alternatives that would allow for building such knowledge 

* Adding more time to the FCS program with its scope intact to reduce 
concurrency would lower risk. However, until technologies are mature 
and more is known about whether the FCS concept will work, there still 
would not be a sound basis for estimating how much time will be needed 
to build the knowledge needed to complete system development and 

* Focus on the development and demonstration of its most critical 
capabilities first, such as the network. This could be done by 
conducting one or more advanced technology demonstrations[Footnote 11] 
to reduce technical and integration risks in critical areas, then 
proceed with an acquisition program. This would take more time than if 
the current FCS schedule were successfully carried out.

* Focus on maturing the most critical technologies first, then bundle 
them in demonstrations of capabilities, such as Advanced Concept 
Technology Demonstrations,[Footnote 12] then proceed with an 
acquisition program that would attain sufficient knowledge at the right 
acquisition junctures. This would also take more time than if the 
current FCS schedule were successfully carried out.

Objectives, Scope, and Methodology:

To develop the information on whether the FCS program was following a 
knowledge-based acquisition strategy and the current status of that 
strategy, we contacted, interviewed, and obtained documents from 
officials of the Offices of the Under Secretary of Defense 
(Acquisition, Technology, and Logistics); the Secretary of Defense Cost 
Analysis Improvement Group; the Assistant Secretary of the Army 
(Acquisition, Logistics, and Technology); the Program Executive Officer 
for Ground Combat Systems; the Program Manager for Future Combat 
Systems; and the Future Combat Systems Lead Systems Integrator. We 
reviewed, among other documents, the Objective Force Operational and 
Organizational Plan for Maneuver Unit of Action and the Future Combat 
Systems' Operational Requirements Document; the Acquisition Strategy 
Report, the Baseline Cost Report, the Critical Technology Assessment 
and Technology Risk Mitigation Plans, and the Integrated Master 
Schedule. We attended the FCS Business Management Quarterly Meetings, 
Management Quarterly Review Meetings, and Directors Quarterly Review 

In our assessment of the FCS, we used the knowledge-based acquisition 
practices drawn from our large body of past work, as well as DOD's 
acquisition policy and the experiences of other programs. We discussed 
the issues presented in this statement with officials from the Army and 
the Secretary of Defense, and made several changes as a result. We 
performed our review from July 2003 to March 2004 in accordance with 
generally accepted auditing standards.

Mr. Chairman, this concludes my prepared statement. I would be happy to 
answer any questions that you or members of the subcommittee may have.

Contacts and Staff Acknowledgments:

For future questions about this statement, please contact me at 
(202) 512-4841. Individuals making key contributions to this statement 
include Lily J. Chin, Marcus C. Ferguson, Lawrence Gaston, Jr., William 
R. Graveline, W. Stan Lipscomb, John P. Swain, and Carrie R. Wilson.


[1] As an interim step toward transformation, the Army is organizing 
medium weight, rapidly deployable brigades around 19-ton Stryker 
armored vehicles.

[2] See U.S. General Accounting Office, Military Readiness: DOD Needs 
to Reassess Program Strategy, Funding Priorities, and Risks for 
Selected Equipment, GAO-04-112 (Washington, D.C.: Dec. 19, 2003).

[3] Over the past 8 years, we have completed a number of reviews of 
best practices for managing new product developments. For a broader 
discussion on best practices in relation to user or warfighter 
involvement, see U.S. General Accounting Office, Best Practices: Better 
Matching of Needs and Resources Will Lead to Better Weapon System 
Outcomes, GAO-01-288 (Washington, D.C.: Mar. 8, 2001).

[4] See U.S. General Accounting Office, Best Practices: Setting 
Requirements Differently Could Reduce Weapon Systems' Total Ownership 
Costs, GAO-03-57 (Washington, D.C.: Feb. 11, 2003).

[5] See U.S. General Accounting Office, Unmanned Aerial Vehicles: Major 
Management Issues Facing DOD's Development and Fielding Efforts, GAO-
04-530T (Washington, D.C.: Mar. 17, 2004).

[6] See U.S. General Accounting Office, Best Practices: Capturing 
Design and Manufacturing Knowledge Early Improves Acquisition Outcomes, 
GAO-02-701 (Washington, D.C.: July 15, 2002); Best Practices: Better 
Management of Technology Development Can Improve Weapon System Outcome, 
GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999); and Best Practices: 
Successful Application to Weapon Acquisition Requires Changes in DOD's 
Environment, GAO/NSIAD-98-56 (Washington, D.C.: Feb. 24, 1998).

[7] Technology readiness levels are a way to measure the maturity of 
technology. Technology is considered sufficiently mature to start a 
program when it reaches a readiness level of 7. This involves a system 
prototype demonstration in an operational environment. The prototype is 
near or at the planned operational system.

[8] Long lead items are those components or a system or piece of 
equipment for which the times to design and fabricate are the longest, 
and therefore, to which an early commitment of funds may be desirable 
in order to meet the earliest possible date of system completion.

[9] See U.S. General Accounting Office, Best Practices: A More 
Constructive Approach is Key to Better Weapon System Outcomes, GAO/
NSIAD-00-199 (Washington, D.C.: July 31, 2000).

[10] See U.S. General Accounting Office, Issues Facing the Army's 
Future Combat Systems Program, GAO-03-1010R (Washington, D.C.: Aug. 13, 

[11] Advanced technology demonstrations are used to demonstrate the 
maturity and potential of advanced technologies for enhanced military 
operational capability or cost-effectiveness and reduce technical risks 
and uncertainties at the relatively low costs of informal processes.

[12] An Advanced Concept Technology Demonstration is a demonstration of 
the military utility of a significant new capability and an assessment 
to clearly establish operational utility and system integrity.