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United States Government Accountability Office: 
GAO: 

Testimony: 

Before the Subcommittee on Strategic Forces, Committee on Armed 
Services, U.S. Senate: 

For Release on Delivery: 
Expected at 2:30 p.m. EDT:
Wednesday, May 11, 2011: 

Space Acquisitions: 

DOD Delivering New Generations of Satellites, but Space System 
Acquisition Challenges Remain: 

Statement of Cristina T. Chaplain, Director:
Acquisition and Sourcing Management: 

GAO-11-590T: 

GAO Highlights: 

Highlights of GAO-11-590T, a testimony before the Subcommittee on 
Strategic Forces, Committee on Armed Services, U.S. Senate. 

Why GAO Did This Study: 

Despite decades of significant investment, most of the Department of 
Defense’s (DOD) large space acquisition programs have collectively 
experienced billions of dollars in cost increases, stretched 
schedules, and increased technical risks. Significant schedule delays 
of as much as 9 years have resulted in potential capability gaps in 
missile warning, military communications, and weather monitoring. 
These problems persist, with other space acquisition programs still 
facing challenges in meeting their targets and aligning the delivery 
of assets with appropriate ground and user systems. 

To address cost increases, DOD reduced the number of satellites it 
would buy, reduced satellite capabilities, or terminated major space 
system acquisitions. Broad actions have also been taken to prevent 
their occurrence in new programs, including better management of the 
acquisition process and oversight of its contractors and resolution of 
technical and other obstacles to DOD’s ability to deliver capability. 

This testimony will focus on the (1) status of space system 
acquisitions, (2) results of GAO’s space-related reviews over the past 
year and the challenges they signify, (3) efforts DOD has taken to 
address causes of problems and increase credibility and success in its 
space system acquisitions as well as efforts currently underway, and 
(4) what remains to be done. 

What GAO Found: 

Over the past two decades, DOD has had difficulties with nearly every 
space acquisition program, with years of cost and schedule growth, 
technical and design problems, and oversight and management 
weaknesses. However, to its credit, DOD continues to make progress on 
several of its programs—-such as the Space Based Infrared System High 
and Advanced Extremely High Frequency programs—-and is expecting to 
deliver significant advances in capability as a result. But other 
programs continue to be susceptible to cost and schedule challenges. 
For example, the Global Positioning System (GPS) IIIA program’s total 
cost has increased by about 10 percent over its original estimate, and 
delays in the Mobile User Objective System continue the risk of a 
capability gap in ultra high frequency satellite communications. 

In 2010, GAO assessed DOD’s efforts to (1) upgrade and sustain GPS 
capabilities and (2) commercialize or incorporate into its space 
acquisition program the space technologies developed by small 
businesses. These reviews underscore the varied challenges that still 
face the DOD space community as it seeks to complete problematic 
legacy efforts and deliver modernized capabilities—-for instance, the 
need for more focused coordination and leadership for space 
activities—-and highlight the substantial barriers and challenges that 
small businesses must overcome to gain entry into the government space 
arena. 

DOD continues to work to ensure that its space programs are more 
executable and produce a better return on investment. Many of the 
actions it has been taking address root causes of problems, though it 
will take time to determine whether these actions are successful. For 
example, DOD is working to ensure that critical technologies are 
matured before large-scale acquisition programs begin and requirements 
are defined early in the process and are stable throughout. 
Additionally, DOD and the Air Force are working to streamline 
management and oversight of the national security space enterprise. 

While DOD actions to date have been good, more changes to processes, 
policies, and support may be needed-—along with sustained leadership 
and attention—-to help ensure that these reforms can take hold, 
including addressing the diffuse leadership for space programs. While 
some changes to the leadership structure have recently been made and 
others are being studied, it is too early to tell how effective they 
will be in streamlining management and oversight of space system 
acquisitions. Finally, while space system acquisition workforce 
capacity is essential if new weapon programs are to be successful, DOD 
continues to face gaps in technical and programmatic expertise for 
space. 

View [hyperlink, http://www.gao.gov/products/GAO-11-590T] or key 
components. For more information, contact Cristina Chaplain at (202) 
512-4841 or chaplainc@gao.gov. 

[End of section] 

Chairman Nelson, Ranking Member Sessions, and Members of the 
Subcommittee: 

I am pleased to be here today to discuss the Department of Defense's 
(DOD) space acquisitions. Each year, DOD spends billions of dollars to 
acquire space-based capabilities to support current military and other 
government operations, as well as to enable DOD to transform the way 
it collects and disseminates information. Despite the significant 
investment in space, the majority of large-scale acquisition programs 
in DOD's space portfolio have experienced problems during the past two 
decades that have driven up costs by hundreds of millions and even 
billions of dollars, stretched schedules by years, and increased 
technical risks. To address the cost increases, DOD altered its 
acquisitions by reducing the number of satellites it intended to buy, 
reducing the capabilities of the satellites, or terminating major 
space system acquisitions. Moreover, along with the cost increases, 
many space acquisitions have experienced significant schedule delays--
of as much as 9 years--resulting in potential capability gaps in areas 
such as missile warning, military communications, and weather 
monitoring. These problems persist; however, the Air Force and the 
Office of the Secretary of Defense have taken a wide range of actions 
to prevent them from occurring in new programs. 

My testimony today will focus on the (1) the status of space system 
acquisitions, (2) results of our space-related reviews over the past 
year and the challenges they signify, (3) the efforts DOD has taken to 
address causes of problems and increase credibility and success in its 
space system acquisitions as well as efforts currently under way, and 
(4) what remains to be done. Notably, DOD has acknowledged the 
acquisition problems of the past and recognizes the need for better 
management of the acquisition process and oversight of its 
contractors. More important, several high-risk space programs appear 
to have finally resolved technical and other obstacles and have 
started to or are close to beginning to deliver capability. However, 
other space acquisition programs--including the Global Positioning 
System (GPS) IIIA and Mobile User Objective System (MUOS)--continue to 
face challenges in meeting their cost and schedule targets and 
aligning the delivery of space assets with the ground and user systems 
needed to support and take advantage of new capability. Moreover, it 
may take years for acquisition improvements to take root and produce 
benefits that will enable DOD to realize a better return on its 
investment in space. Importantly, DOD has taken steps to decide how to 
best organize, lead, and support space activities. But more may be 
needed in light of the wide range of stakeholders and past issues with 
diffuse leadership. 

The work that supports this statement was performed in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings 
and conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. Additional details on our 
scope and methodology are provided in appendix II. 

Status of Space Acquisitions: Challenges Persist: 

A long-standing problem in DOD space acquisitions is that program and 
unit costs tend to go up significantly from initial cost estimates, 
while in some cases the capability that was to be delivered goes down. 
Figure 1 compares original cost estimates and current cost estimates 
for the broader portfolio of major space acquisitions for fiscal years 
2010 through 2015. The wider the gap between original and current 
estimates, the fewer dollars DOD has available to invest in new 
programs. As shown in the figure, cumulative estimated costs for the 
major space acquisition programs have increased by about $13.9 billion 
from initial estimates for fiscal years 2010 through 2015, almost a 
286 percent increase. The declining investment in the later years is 
the result of mature programs that have planned lower out-year 
funding, cancellation of several development efforts, and the 
exclusion of space acquisition efforts for which total cost data were 
unavailable (such as new investments). 

Figure 1: Comparison between Original Cost Estimates and Current Cost 
Estimates for Selected Major Space Acquisition Programs for Fiscal 
Years 2010 through 2015: 

[Refer to PDF for image: multiple line graph] 

Fiscal year 2011 dollars: 

Fiscal year: 2010; 
Original cost estimate: $1.35 billion; 
Current cost estimate: $4.80 billion. 

Fiscal year: 2011; 
Original cost estimate: $1.15 billion; 
Current cost estimate: $4.24 billion. 

Fiscal year: 2012; 
Original cost estimate: $1.34 billion; 
Current cost estimate: $3.74 billion. 

Fiscal year: 2013; 
Original cost estimate: $726.6 million; 
Current cost estimate: $2.77 billion. 

Fiscal year: 2014; 
Original cost estimate: $238.4 million; 
Current cost estimate: $2.02 billion. 

Fiscal year: 2015; 
Original cost estimate: $67.4 million; 
Current cost estimate: $1.26 billion. 

Cumulative cost increase: $13.9 billion. 

Source: GAO analysis of DOD data. 

Note: Includes Advanced Extremely High Frequency, Global Broadcast 
System, Global Positioning System II and III, Mobile User Objective 
System, Space Based Infrared System High, and Wideband Global SATCOM. 
Does not include the Evolved Expendable Launch Vehicle (which is in 
sustainment) and planned new space acquisition efforts--such as 
Defense Weather Satellite System, Joint Space Operations Center 
Mission System, Space Based Space Surveillance Follow-on, and Space 
Fence--for which total cost data were unavailable. 

[End of figure] 

When space system investments other than established acquisition 
programs of record--such as the Defense Weather Satellite System 
(DWSS) and Space Fence programs--are also considered, DOD's space 
acquisition investments remain significant through fiscal year 2016, 
as shown in figure 2. Although estimated costs for selected space 
acquisition programs decrease 21 percent between fiscal years 2010 and 
2015, they start to increase in fiscal year 2016. And, according to 
current DOD estimates, costs for two programs--Advanced Extremely High 
Frequency (AEHF) and Space Based Infrared System (SBIRS) High--are 
expected to significantly increase in fiscal years 2017 and 2018. The 
costs are associated with the procurement of additional blocks of 
satellites and are not included in the figure because they have not 
yet been reported or quantified. 

Figure 2: Estimated Costs for Selected DOD Space Programs for Fiscal 
Years 2010 through 2016: 

[Refer to PDF for image: line graph] 

Fiscal year: 2010; 
Estimated costs: $7.52 billion. 

Fiscal year: 2011; 
Estimated costs: $7.16 billion. 

Fiscal year: 2012; 
Estimated costs: $7.39 billion. 

Fiscal year: 2013; 
Estimated costs: $6.81 billion. 

Fiscal year: 2014; 
Estimated costs: $6.67 billion. 

Fiscal year: 2015; 
Estimated costs: $5.95 billion. 

Fiscal year: 2016; 
Estimated costs: $6.28 billion. 

Source: GAO analysis of DOD data. 

Note: The acquisition efforts include Advanced Extremely High 
Frequency, Evolved Expendable Launch Vehicle, Global Broadcast 
Service, Global Positioning System II, Global Positioning System III, 
Joint Space Operations Center Mission System, Mobile User Objective 
System, National Polar-orbiting Operational Environmental Satellite 
System/Defense Weather Satellite System, Precision Tracking Space 
System, Space Based Infrared System High, Space Situational Awareness 
Systems, Space Tracking and Surveillance System, and Wideband Global 
SATCOM. 

[End of figure] 

Figures 3 and 4 reflect differences in total program and unit costs 
for satellites from the time the programs officially began to their 
most recent cost estimates. As figure 4 shows, in several cases, DOD 
has increased the number of satellites. The figures reflect total 
program cost estimates developed in fiscal year 2010. 

Figure 3: Differences in Unit Costs from Program Start and Most Recent 
Estimates: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2011 dollars in billions: 

Program and start date: SBIRS High; 1996; 
Initial unit cost: $0.90 billion; 
Most recent unit cost: $3.01 billion. 

Program and start date: GPS; II 2000; 
Initial unit cost: $0.19 billion; 
Most recent unit cost: $0.23 billion. 

Program and start date: WGS; 2000; 
Initial unit cost: $0.39 billion; 
Most recent unit cost: $0.52 billion. 

Program and start date: AEHF; 2001; 
Initial unit cost: $1.26 billion; 
Most recent unit cost: $2.31 billion. 

Program and start date: NPOESS; 2002; 
Initial unit cost: $1.10 billion; 
Most recent unit cost: Program restructured in 2010. 

Program and start date: MUOS; 2004; 
Initial unit cost: $1.10 billion; 
Most recent unit cost: $1.15 billion. 

Program and start date: GPS III; 2008; 
Initial unit cost: $0.49 billion; 
Most recent unit cost: $0.53 billion. 

Source: GAO analysis of DOD data. 

Legend: SBIRS = Space Based Infrared System High; GPS = Global 
Positioning System; WGS = Wideband Global SATCOM; AEHF = Advanced 
Extremely High Frequency; NPOESS = National Polar-orbiting Operational 
Environmental Satellite System; MUOS = Mobile User Objective System. 

[End of figure] 

Figure 4: Differences in Total Costs from Program Start to Most Recent 
Estimates: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2011 dollars: 

Program and start date: SBIRS High 1996; 
Initial estimated cost and number of satellites: $4.52 billion; 5 
satellites; 
Most recent estimate: $18.05 billion; 1 more satellite and deferred 
requirements. 

Program and start date: GPS II 2000; 
Initial estimated cost and number of satellites: $6.13 billion; 33 
satellites; 
Most recent estimate: $7.49 billion. 

Program and start date: WGS 2000; 
Initial estimated cost and number of satellites: $1.18 billion; 
Most recent estimate: $3.62 billion; 4 more satellites. 

Program and start date: AEHF 2001; 
Initial estimated cost and number of satellites: $6.28 billion; 5 
satellites; 
Most recent estimate: $13.88 billion; 1 more satellite. 

Program and start date: NPOESS 2002; 
Initial estimated cost and number of satellites: $6.58 billion; 6 
satellites; 
Most recent estimate: Program restructures in 2010. 

Program and start date: MUOS 2004; 
Initial estimated cost and number of satellites: $6.62 billion; 6 
satellites; 
Most recent estimate: $6.88 billion. 

Program and start date: GPS III 2008; 
Initial estimated cost and number of satellites: $3.88 billion; 8 
satellites; 
Most recent estimate: $4.26 billion. 

Source: GAO analysis of DOD data. 

Legend: SBIRS = Space Based Infrared System High; GPS = Global 
Positioning System; WGS = Wideband Global SATCOM; AEHF = Advanced 
Extremely High Frequency; NPOESS = National Polar-orbiting Operational 
Environmental Satellite System; MUOS = Mobile User Objective System. 

[End of figure] 

Several space acquisition programs are years behind schedule. Figure 5 
highlights the additional estimated months needed for programs to 
launch their first satellites. These additional months represent time 
not anticipated at the programs' start dates. Generally, the further 
schedules slip, the more DOD is at risk of not sustaining current 
capabilities. For example, delays in launching the first MUOS 
satellite have placed DOD's ultra high frequency communications 
capabilities at risk of falling below the required availability level. 

Figure 5: Total Number of Estimated or Actual Months from Program 
Start to Initial Launch: 

[Refer to PDF for image: stacked vertical bar graph] 

Program and start date: SBIRS High 1996; 
Initial estimated number of months: 68; 
Difference in estimates: 107; 
Total: 175 months. 

Program and start date: GPS IIF 2000; 
Initial estimated number of months: 68; 
Difference in estimates: 55; 
Total: 123 months. 

Program and start date: WGS 2000; 
Initial estimated number of months: 39; 
Difference in estimates: 44; 
Total: 83 months. 

Program and start date: AEHF 2001; 
Initial estimated number of months: 39; 
Difference in estimates: 68; 
Total: 107 months. 

Program and start date: NPOESS 2002; 
Initial estimated number of months: 80; 
Total is unknown because program was restructured. 

Program and start date: MUOS 2004; 
Initial estimated number of months: 63; 
Difference in estimates: 26; 
Total: 89 months. 

Program and start date: GPS III 2008; 
Initial estimated number of months: 71; 
Difference in estimates: 0; 
Total: 71 months. 

Source: GAO analysis of DOD data. 

Legend: SBIRS = Space Based Infrared System High; GPS = Global 
Positioning System; WGS = Wideband Global SATCOM; AEHF = Advanced 
Extremely High Frequency; NPOESS = National Polar-orbiting Operational 
Environmental Satellite System; MUOS = Mobile User Objective System. 

[End of figure] 

Some Acquisition Programs Appear to Have Overcome Problems, but Other 
Programs Still Susceptible to Cost and Schedule Overruns: 

DOD had long-standing difficulties on nearly every space acquisition 
program, struggling for years with cost and schedule growth, technical 
or design problems, as well as oversight and management weaknesses. 
However, to its credit, it continues to make progress on several of 
its high-risk space programs, and is expecting to deliver significant 
advances in capability as a result. The Missile Defense Agency's (MDA) 
Space Tracking and Surveillance System (STSS) demonstration satellites 
were launched in September 2009. Additionally, DOD launched its first 
GPS IIF satellite in May 2010 and plans to launch the second IIF 
satellite in June 2011--later than planned, partially because of 
system-level problems identified during testing. It also launched the 
first AEHF satellite in August 2010--although it has not yet reached 
its final planned orbit because of an anomaly with the satellite's 
propulsion system--and launched the Space Based Space Surveillance 
(SBSS) Block 10 satellite in September 2010. DOD is scheduled to 
launch a fourth Wideband Global SATCOM (WGS) satellite broadening 
communications capability available to warfighters--in late 2011, and 
a fifth WGS satellite in early 2012. The Evolved Expendable Launch 
Vehicle (EELV) program had its 41st consecutive successful operational 
launch in May of this year. 

One program that appears to have recently overcome remaining technical 
problems is the SBIRS High satellite program. The first of six 
geosynchronous earth-orbiting (GEO) satellites (two highly elliptical 
orbit sensors have already been launched) was launched in May 2011 and 
is expected to continue the missile warning mission with sensors that 
are more capable than the satellites currently on orbit. Total cost 
for the SBIRS High program is currently estimated at over $18 billion 
for six GEO satellites,[Footnote 1] representing a program unit cost 
of over $3 billion, about 233 percent more than the original unit cost 
estimate. Additionally, the launch of the first GEO satellite 
represents a delay of approximately 9 years. The reasons for the delay 
include poor government oversight of the contractor, unanticipated 
technical complexities, and rework. The program office is working to 
rebaseline the SBIRS High contract cost and schedule estimates for the 
sixth time. Because of the problems on SBIRS High, in 2007, DOD began 
a follow-on system effort, which was known as Third Generation 
Infrared Surveillance (3GIRS), to run in parallel with the SBIRS High 
program. DOD canceled the 3GIRS effort in fiscal year 2011, but plans 
to continue providing funds under the SBIRS High program for one of 
the 3GIRS infrared demonstrations. 

While DOD is having success in readying some satellites for launch, 
other space acquisition programs face challenges that could further 
increase cost and delay delivery targets. The programs that may be 
susceptible to cost and schedule challenges include MUOS and the GPS 
IIIA program. Delays in the MUOS program have resulted in critical 
potential capability gaps for military and other government users. The 
GPS IIIA program was planned with an eye toward avoiding problems that 
plagued the GPS IIF program and it incorporated many of the best 
practices recommended by GAO, but the schedule leaves little room for 
potential problems and there is a risk that the ground system needed 
to operate the satellites will not be ready when the first satellite 
is launched. Additionally, the National Polar-orbiting Operational 
Environmental Satellite System (NPOESS) was restructured as a result 
of poor program performance and cost overruns, which caused schedule 
delays. These delays have resulted in a potential capability gap for 
weather and environmental monitoring. Furthermore, new space system 
acquisition efforts getting underway--including the Air Force's Joint 
Space Operations Center Mission System (JMS) and Space Fence, and 
MDA's Precision Tracking and Surveillance System (PTSS)--face 
potential development challenges and risks, but it is too early to 
tell how significant they may be to meeting cost, schedule, and 
performance goals. 

Table 1 describes the status of these efforts in more detail. 

Table 1: Status of Major Space Acquisition Efforts: 

Systems achieving or nearing launch that have overcome technical and 
other problems: 

GPS IIF (positioning, navigation, and timing): 
The first GPS IIF satellite, launched in May 2010, is designed to 
upgrade timing and navigation accuracy and add a new signal for 
civilian use. The satellite was delayed over 4 1/2 years from its 
original launch date mostly because of development challenges. The 
cost of the GPS IIF program is expected to be about $1.6 billion--
about $870 million over the original cost estimate of $729 million. 
(This approximately 119 percent cost increase is not apparent in 
figures 3 and 4 because the GPS II modernization program includes the 
development and procurement of 33 satellites, only 12 of which are IIF 
satellites.) As a result of continued technical challenges in 
producing the GPS IIF satellites, the program continues to experience 
schedule delays as well as increased funding shortfalls. 

AEHF (communications): 
The first AEHF satellite launched in August 2010. AEHF satellites are 
expected to deliver 10 times the communications bandwidth that is 
available today for secure and protected communications. The launch of 
the first satellite slipped almost 6 years. The program has decided 
that the design specifications for the first three satellites will 
remain unchanged for satellites four through six, which will thus be 
clones except for the replacement of obsolete parts. The initial 
operational capability date is currently unknown because of an anomaly 
in the propulsion system of the first satellite, which has delayed it 
from reaching its planned orbit--it is expected to reach final orbit 
in August 2011. The program office will delay the launch of the second 
AEHF satellite until (1) it is cleared for flight in light of the 
first AEHF propulsion system anomaly and (2) the first satellite is on 
orbit and tested. The third AEHF satellite is expected to launch about 
8 months after the second satellite is launched. The notional launch 
dates for satellites four through six are 2017, 2018, and 2020, 
respectively. The Air Force is in the process of developing a new 
acquisition program baseline that includes these satellites. 

SBSS (space situational awareness): 
The first SBSS Block 10 satellite launched in September 2010 and is 
expected to provide greatly improved space situational awareness to 
help better understand location and mission capabilities of all 
satellites and other objects in space. The satellite launched more 
than 3 years later than originally planned--in part because of launch 
vehicle issues unrelated to the satellite. The program was 
restructured in 2006 after an independent review found that the 
requirements were overstated and its cost and schedule targets could 
not be met. Efforts to develop a follow-on system have been 
discontinued, pending an ongoing study directed by the Office of the 
Secretary of Defense. 

Programs still susceptible to cost and schedule overruns: 

NPOESS/DWSS (climate and weather monitoring): 
In February 2010, the Executive Office of the President announced a 
restructure of the NPOESS program, directing the acquisition and 
development of separate military and civil weather satellite programs. 
The NPOESS program had continued to experience technical problems 
resulting in further cost and schedule increases. The Air Force plans 
to acquire the DWSS to satisfy military weather requirements, and the 
National Oceanographic and Atmospheric Administration will acquire the 
Joint Polar Satellite System and a shared common ground system to 
address civil weather and environmental requirements. The DWSS program 
is expected to satisfy environmental monitoring requirements in the 
early morning orbit by developing and launching two satellites, with 
an initial launch capability no earlier than 2018. 

MUOS (communications): 
The MUOS communications satellite program now estimates a 26-month 
delay--from March 2010 to May 2012--in the delivery of on-orbit 
capability from the first satellite. Design issues with ultra high 
frequency (UHF) reflectors continue to pose cost and schedule risks 
for the program. In July 2009, a Navy-initiated review of the program 
found that while the technical challenges the program was experiencing 
could be solved, the MUOS budget was inadequate and its schedule was 
optimistic. As a result, the program developed new cost and schedule 
baselines. The acquisition program baseline has been under revision 
since December 2009, but has not yet been approved. According to the 
program, the prime contract cost baseline, which includes $162 million 
in engineering change proposals, has increased about 61 percent since 
contract award in September 2004. The importance of the first MUOS 
launch increased because of the unexpected failure of two legacy 
satellites. The MUOS program office is addressing the potential 
capability gap by activating dual digital receiver unit operations on 
a legacy satellite, examining the potential of purchasing or leasing 
commercial UHF satellite communications services, and examining the 
feasibility of expanded digital receiver unit operations on the legacy 
payloads of the MUOS satellites. 

GPS III (positioning, navigation, and timing): 
While the GPS III program has been structured by the Air Force to 
prevent the mistakes made on the IIF program, the Air Force aims to 
deliver the GPS IIIA satellites 3 years faster than it did the IIF 
satellites. According to Air Force officials, the IIIA contractor 
retained some of its workforce from the IIR-M program and plans to 
incorporate a previously developed satellite bus--efforts that reduce 
program risk. Also, the program has taken measures to maintain stable 
requirements, use mature technologies, and provide more contractor 
oversight. However, we continue to believe that the IIIA schedule is 
optimistic given the program's late start, past trends in space 
acquisitions, and challenges facing the new contractor. According to 
our analysis of data contained in selected acquisition reports for the 
GPS IIIA program, total program costs have increased about 10 percent 
over the original estimate established for the start of product 
development. According to the Air Force, the increase is due in part 
to unanticipated costs resulting from issues such as technical 
complexities involved in developing the satellite vehicle bus and 
software development. To increase confidence in the schedule for 
delivering the ground control system for IIIA (the next generation 
operational control segment known as OCX), the GPS Directorate added 
16 months of development time to the effort. This means that the first 
block of OCX is now scheduled to be fielded in August 2015, 15 months 
after the May 2014 planned launch of the first GPS IIIA satellite. To 
address this issue, the GPS Directorate is considering funding a 
parallel effort that accelerates existing launch and checkout 
requirements to develop a command and control capability for the first 
GPS IIIA satellites. However, GPS Directorate officials indicated that 
the effort would not enable the utilization of new capabilities 
offered by GPA IIIA satellites, including a military signal designed 
to enable resistance to jamming and three civil signals. 

Development initiatives getting under way: 

JMS (space situational awareness): 
GAO's best practices work has shown that large system projects divided 
into a series of smaller incremental acquisition efforts--made on the 
basis of reliable analysis of estimated costs, expected benefits, and 
anticipated risks--permits informed investment decision making. 
However, our ongoing work has shown that the JMS acquisition was not 
adopting an incremental approach--the effort instead consisted of a 
single increment delivered in a series of releases--as exemplified by 
its plans to proceed without knowledge of all critical technologies 
and deferral of other planning activities. This lack of knowledge 
could result in unanticipated costs and other programmatic risks to 
the acquisition effort. Although our best practices work and DOD 
guidance call for critical technologies to be identified and matured 
by development start,[A] the JMS program did not plan to identify and 
assess the maturity of all critical technologies by that time. 
Instead, JMS plans were to identify and assess critical technologies 
prior to each release. Consequently, the program would not have 
assurance that the needed technologies will be mature when needed and 
that cost estimates--based on the development of all releases--were 
reliable.b Additionally, JMS and DOD officials pointed to data 
integration issues as one of the top risks for the JMS program. More 
specifically, JMS will need to integrate data from numerous 
heterogeneous sources, many of which are not net-centric. To ensure 
that the data from these sources are compatible, the Air Force is 
currently working to ensure that these sources are net-centric before 
JMS is complete. Furthermore, our best practices work has shown that 
maturing technology to technology readiness level (TRL) 7 prior to 
development start reduces risk to meeting cost, schedule, and 
performance goals.c However, the JMS program planned to use 
technologies, such as service information exchange capabilities to 
allow applications to send data and information to other applications 
and servers, that only have been matured to TRL 6 or greater prior to 
the start of development for each release. A recent independent 
program assessment commissioned by the Office of the Under Secretary 
of Defense for Acquisition, Technology and Logistics (AT&L) has 
prompted the Air Force to revise the JMS acquisition strategy, which 
may help to address the above challenges and risks. 

Space Fence (space situational awareness): 
The primary Space Fence risk, according to the Electronic Systems 
Center, is that JMS will need to be available to process Space Fence 
data, as the amount of data provided will result in an increase in 
uncued detection and tracking capacity from 10,000 to 100,000 objects. 
Additionally, the Space Fence program office stated other risks of the 
development effort include large-scale integration and calibration of 
radar arrays, scalability of the design for the digital beam 
former,[D] and development of information assurance certification 
criteria. Furthermore, all five critical Space Fence technologies 
identified by the program office are immature--one at TRL 4 and four 
at TRL 5--which increases risk to cost and schedule goals. Given that 
technology discovery cannot be scheduled, the immature technologies 
raise the risk of having to defer product development until these 
technologies become mature. Although mature backup critical 
technologies exist--which could be used if the primary technologies do 
not mature by the start of system development--all have potentially 
higher acquisition costs and in some cases higher operating costs as 
well, according to the program office. While the program has a 
critical technology maturity goal of TRL 6 prior to preliminary design 
review (which is in accordance with DOD's acquisition policy),e our 
best practices work has shown technology development to TRL 7 could 
significantly reduce risk to meeting cost, schedule, and performance 
goals. 

PTSS (ballistic missile defense): 
In alignment with GAO best practices, MDA plans to build two prototype 
satellites to define the system performance and focus on cost-
effective production in an industrial environment. Also consistent 
with GAO best practices, MDA plans to separate technology discovery 
from technology development by ensuring that critical technologies are 
matured before large-scale acquisition begins. MDA plans to utilize 
systems and components for the PTSS design that are currently used in 
commercial satellite sensors without significantly altering form, fit, 
or function. Additionally, the Director of MDA stated that a hallmark 
of the PTSS satellites will be their relatively small size and 
simplistic design. MDA also plans to follow an incremental path toward 
meeting user needs by using currently available technology to deliver 
near-term capabilities while maintaining the flexibility to add 
capabilities later. However, in order to meet its optimistic schedule 
to field an operational constellation by fiscal year 2018, MDA plans 
to conduct prototyping efforts beginning in fiscal year 2011 and 
launch two prototype satellites in fiscal year 2015. MDA also plans to 
launch a minimum of seven additional satellites by fiscal year 2018. 
Although PTSS is not yet far enough along in development to determine 
whether MDA's current acquisition plans are overly optimistic, other 
DOD space programs, for example, SBIRS High, have experienced long 
development times to launch initial satellites. Also, the development 
initiative must overcome several technology design challenges. For 
example, AT&L officials have identified key technical design 
challenges including developing sufficient sensitivity to detect and 
track postboost ballistic missiles, tracking large raids of ballistic 
missiles, and mass-producing payloads. According to AT&L officials, 
the program plans to address these design challenges through the use 
of computer modeling and simulations and refining payload design 
models. MDA will collect critical risk reduction data during STSS 
flight tests to help inform PTSS design. 

Source: GAO analysis of DOD data and previous GAO reports. 

[A] The Office of the Director, Defense Research and Engineering, 
Department of Defense Technology Readiness Assessment (TRA) Deskbook, 
Table 3-1 and Appendix B (July 2009), and Department of Defense 
Instruction 5000.02, Operation of the Defense Acquisition System, enc. 
2 paras. 5.a and 5.d.(4) (Dec. 8, 2008). 

[B] According to DOD, it selected a single increment, multiple release 
approach as the most efficient means to develop capabilities when 
needed, based on technology maturity and available funding. 

[C] The National Aeronautics and Space Administration originally 
developed TRLs as a tool to assess technology maturity. TRLs are 
measured on a scale from 1 to 9, beginning with paper studies of a 
technology's feasibility (TRL 1) and culminating with application of 
the technology in its final form and under mission conditions (TRL 9). 
Demonstration that pieces will work together in a laboratory is TRL 4. 
Demonstration in a simulated environment is TRL 5. Our best practices 
work has shown that a TRL 7--demonstration of a technology in a 
realistic environment--is the level of technology maturity that 
constitutes a low risk for starting a product development program. We 
ordinarily assess satellite technologies that have achieved TRL 6, a 
prototype demonstrated in a relevant environment, as fully mature 
because of the difficulty of demonstrating maturity in a realistic 
environment--space. However, this does not apply to programs such as 
JMS and Space Fence which are ground based. 

[D] In general terms, the Space Fence phased array radar--analogous to 
tens of thousands to hundreds of thousands of miniature radar 
antennas--is to use digital beam forming, which allows the antennas to 
work in concert, creating sufficient power transmitted and received to 
conduct the space surveillance and tracking mission. 

[E] Department of Defense Instruction 5000.02, Operation of the 
Defense Acquisition System, enc. 2 para. 5.d.(7) (Dec. 8, 2008), 
states that a project shall exit the technology development phase when 
the technology has been demonstrated in a relevant environment, which 
is TRL 6. 

[End of table] 

Results of GAO Space-Related Reviews over the Past Year: 

Over the past year, we have completed reviews of sustaining and 
upgrading GPS capabilities and commercializing space technologies 
under the Small Business Innovation Research program (SBIR),[Footnote 
2] and we have ongoing reviews of (1) DOD space situational awareness 
(SSA) acquisition efforts, (2) parts quality for DOD, MDA, and the 
National Aeronautics and Space Administration (NASA), and (3) a new 
acquisition strategy being developed for the EELV program. These 
reviews, discussed further below, underscore the varied challenges 
that still face the DOD space community as it seeks to complete 
problematic legacy efforts and deliver modernized capabilities. Our 
reviews of GPS and space situational awareness, for instance, have 
highlighted the need for more focused coordination and leadership for 
space activities that touch a wide range of government, international, 
and industry stakeholders; while our review of the SBIR program 
highlighted the substantial barriers and challenges small business 
must overcome to gain entry into the government space arena. 

* GPS. We found that the GPS IIIA schedule remains ambitious and could 
be affected by risks such as the program's dependence on a ground 
system that will not be completed until after the first IIIA launch. 
We found that the GPS constellation availability had improved, but in 
the longer term, a delay in the launch of the GPS IIIA satellites 
could still reduce the size of the constellation to fewer than 24 
operational satellites--the number that the U.S. government commits 
to--which might not meet the needs of some GPS users. We also found 
that the multiyear delays in the development of GPS ground control 
systems were extensive. Although the Air Force had taken steps to 
enable quicker procurement of military GPS user equipment, there were 
significant challenges to its implementation. This has had a 
significant impact on DOD as all three GPS segments--space, ground 
control, and user equipment--must be in place to take advantage of new 
capabilities. Additionally, we found that DOD had taken some steps to 
better coordinate all GPS segments, including laying out criteria and 
establishing visibility over a spectrum of procurement efforts, but it 
did not go as far as we recommended in 2009 in terms of establishing a 
single authority responsible for ensuring that all GPS segments are 
synchronized to the maximum extent practicable.[Footnote 3] Such an 
authority is warranted given the extent of delays, problems with 
synchronizing all GPS segments, and importance of new capabilities to 
military operations. As a result, we reiterated the need to implement 
our prior recommendation. 

* Small Business Innovation Research (SBIR). In response to a request 
from this subcommittee, we found that while DOD is working to 
commercialize space-related technologies under its SBIR program by 
transitioning these technologies into acquisition programs or the 
commercial sector, it has limited insight into the program's 
effectiveness.[Footnote 4] Specifically, DOD has invested about 11 
percent of its fiscal years 2005-2009 research and development funds 
through its SBIR program to address space-related technology needs. 
Additionally, DOD is soliciting more space-related research proposals 
from small businesses. Further, DOD has implemented a variety of 
programs and initiatives to increase the commercialization of SBIR 
technologies and has identified instances where it has transitioned 
space-related technologies into acquisition programs or the commercial 
sector. However, DOD lacks complete commercialization data to 
determine the effectiveness of the program in transitioning space-
related technologies into acquisition programs or the commercial 
sector. Of the nearly 500 space-related contracts awarded in fiscal 
years 2005 through 2009, DOD officials could not, for various reasons, 
identify the total number of technologies that transitioned into 
acquisition programs or the commercial sector. Further, there are 
challenges to executing the SBIR program that DOD officials 
acknowledge and are planning to address, such as the lack of 
overarching guidance for managing the DOD SBIR program. 

Under this review, most stakeholders we spoke with--DOD, prime 
contractors, and small business officials--generally agreed that small 
businesses participating in the DOD SBIR program face difficulties 
transitioning their space-related technologies into acquisition 
programs or the commercial sector. Although we did not assess the 
validity of the concerns cited, stakeholders we spoke with identified 
challenges inherent to developing space technologies; challenges 
because of the SBIR program's administration, timing, and funding 
issues; and other challenges related to participating in the DOD space 
system acquisitions environment. For example, some small-business 
officials said that working in the space community is challenging 
because the technologies often require more expensive materials and 
testing than other technologies. They also mentioned that delayed 
contract awards and slow contract disbursements have caused financial 
hardships. Additionally, several small businesses cited concerns with 
safeguarding their intellectual property. 

* Space Situational Awareness (SSA). We have found that while DOD has 
significantly increased its investment and planned investment in SSA 
acquisition efforts in recent years to address growing SSA capability 
shortfalls, most efforts designed to meet these shortfalls have 
struggled with cost, schedule, and performance challenges and are 
rooted in systemic problems that most space system acquisition 
programs have encountered over the past decade. Consequently, in the 
past 5 fiscal years, DOD has not delivered significant new SSA 
capabilities as originally expected. Capabilities that were delivered 
served to sustain or modernize existing systems versus closing 
capability gaps. To its credit, last fall the Air Force launched a 
space-based sensor that is expected to appreciably enhance SSA. 
However, two critical acquisition efforts that are scheduled to begin 
development within the next 2 years--Space Fence and JMS--face 
development challenges and risks, such as the use of immature 
technologies and planning to deliver all capabilities in a single, 
large increment versus smaller and more manageable increments. It is 
essential that these acquisitions are placed on a solid footing at the 
start of development to help ensure that their capabilities are 
delivered to the warfighter as and when promised. DOD plans to begin 
delivering other new capabilities in the coming 5 years, but it is too 
early to determine the extent to which these additions will address 
capability shortfalls. 

We have also found that there are significant inherent challenges to 
executing and overseeing the SSA mission, largely because of the sheer 
number of governmentwide organizations and assets involved in the 
mission. This finding is similar to what we have reported from other 
space system acquisition reviews over the years. Additionally, while 
the recently issued National Space Policy assigns SSA responsibility 
to the Secretary of Defense, the Secretary does not necessarily have 
the corresponding authority to execute this responsibility. However, 
actions, such as development of a national SSA architecture, are being 
taken that could help facilitate management and oversight 
governmentwide. The National Space Policy, which recognizes the 
importance of SSA, directs other positive steps, such as the 
determination of roles, missions, and responsibilities to manage 
national security space capabilities and the development of options 
for new measures for improving SSA capabilities. Furthermore, the 
recently issued National Security Space Strategy could help guide the 
implementation of the new space policy. We expect our report based on 
this review to be issued in June 2011. 

* Parts quality for DOD, MDA, and NASA. Quality is paramount to the 
success of DOD space systems because of their complexity, the 
environment they operate in, and the high degree of accuracy and 
precision needed for their operations. Yet in recent years, many 
programs have encountered difficulties with quality workmanship and 
parts. For example, DOD's AEHF protected communications satellite has 
yet to reach its intended orbit because of a blockage in a propellant 
line. Also, MDA's STSS program experienced a 15-month delay in the 
launch of demonstration satellites because of a faulty manufacturing 
process of a ground-to-spacecraft communication system part. 
Furthermore, NASA's Mars Science Laboratory program experienced a 1- 
year delay in the development of the descent and cruise stage 
propulsion systems because of a welding process error. We plan to 
issue a report on the results of a review that focuses specifically on 
parts quality issues in June 2011. We are examining the extent to 
which parts quality problems are affecting DOD, MDA, and NASA space 
and missile defense programs; the causes of these problems; and 
initiatives to detect and prevent parts quality problems. 

* EELV acquisition strategy. DOD spends billions of dollars on launch 
services and infrastructure through two families of commercially owned 
and operated vehicles under the EELV program. This investment allows 
the nation to launch its national security satellites that provide the 
military and intelligence community with advanced space-based 
capabilities. DOD is preparing to embark on a new acquisition strategy 
for the EELV program. Given the costs and importance of space launch 
activities, it is vital that this strategy maximize cost efficiencies 
while still maintaining a high degree of mission assurance and a 
healthy industrial base. We are currently reviewing activities leading 
up to the strategy and plan to issue a report on the results of this 
review in June 2011. In particular, we are examining whether DOD has 
the knowledge it needs to develop a new EELV acquisition strategy and 
the extent to which there are important factors that could affect 
launch acquisitions. 

DOD Has Taken and Is Taking Actions to Address Space and Weapon 
Acquisition Problems: 

DOD continues to work to ensure that its space programs are more 
executable and produce a better return on investment. Many of the 
actions it has been taking address root causes of problems, though it 
will take time to determine whether these actions are successful and 
they need to be complemented by decisions on how best to lead, 
organize, and support space activities. 

Causes of Acquisition Problems and Best Practices for Avoiding Them: 

Our past work has identified a number of causes of the cost growth and 
related problems, but several consistently stand out. First, on a 
broad scale, DOD has tended to start more weapon programs than it can 
afford, creating a competition for funding that encourages low cost 
estimating, optimistic scheduling, overpromising, suppressing bad 
news, and for space programs, forsaking the opportunity to identify 
and assess potentially more executable alternatives. Programs focus on 
advocacy at the expense of realism and sound management. Invariably, 
with too many programs in its portfolio, DOD is forced to continually 
shift funds to and from programs--particularly as programs experience 
problems that require additional time and money to address. Such 
shifts, in turn, have had costly, reverberating effects. 

Second, DOD has tended to start its space programs too early, that is, 
before it has the assurance that the capabilities it is pursuing can 
be achieved within available resources and time constraints. This 
tendency is caused largely by the funding process, since acquisition 
programs attract more dollars than efforts concentrating solely on 
proving technologies. Nevertheless, when DOD chooses to extend 
technology invention into acquisition, programs experience technical 
problems that require large amounts of time and money to fix. 
Moreover, when this approach is followed, cost estimators are not well 
positioned to develop accurate cost estimates because there are too 
many unknowns. Put more simply, there is no way to accurately estimate 
how long it would take to design, develop, and build a satellite 
system when critical technologies planned for that system are still in 
relatively early stages of discovery and invention. 

Third, programs have historically attempted to satisfy all 
requirements in a single step, regardless of the design challenges or 
the maturity of the technologies necessary to achieve the full 
capability. DOD has preferred to make fewer but heavier, larger, and 
more complex satellites that perform a multitude of missions rather 
than larger constellations of smaller, less complex satellites that 
gradually increase in sophistication. This has stretched technology 
challenges beyond current capabilities in some cases and vastly 
increased the complexities related to software. Programs also seek to 
maximize capability on individual satellites because it is expensive 
to launch them. Figure 6 illustrates the various factors that can 
break acquisitions. 

Figure 6: Key Underlying Problems that Can Break Acquisitions: 

[Refer to PDF for image: illustration] 

Broken Acquisitions: 
* Technology immature; 
* Software needs poorly understood; 
* Requirements unstable; 
* Funding unstable; 
* Inadequate contracting strategy; 
* Inadequate contractor oversight; 
* Alternatives not considered; 
* Optimistic cost & schedule estimates. 

Source: GAO. 

[End of figure] 

Many of these underlying issues affect the broader weapons portfolio 
as well, though we have reported that space programs are particularly 
affected by the wide disparity of users, including DOD, the 
intelligence community, other federal agencies, and in some cases, 
other countries, U.S. businesses, and citizens. Moreover, problematic 
implementation of an acquisition strategy in the 1990s, known as Total 
System Performance Responsibility, for space systems resulted in 
problems on a number of programs because it was implemented in a 
manner that enabled requirements creep and poor contractor 
performance--the effects of which space programs are finally 
overcoming. We have also reported on shortfalls in resources for 
testing new technologies, which, coupled with less expertise and fewer 
contractors available to lead development efforts, have magnified the 
challenge of developing complex and intricate space systems. 

Our work--which is largely based on best practices in the commercial 
sector--has recommended numerous actions that can be taken to address 
the problems we identified. Generally, we have recommended that DOD 
separate technology discovery from acquisition, follow an incremental 
path toward meeting user needs, match resources and requirements at 
program start, and use quantifiable data and demonstrable knowledge to 
make decisions to move to next phases. We have also identified 
practices related to cost estimating, program manager tenure, quality 
assurance, technology transition, and an array of other aspects of 
acquisition program management that could benefit space programs. 
These practices are highlighted in appendix I. 

Actions to Improve Space and Weapon System Acquisitions: 

Over the past several years, DOD has implemented or has been 
implementing a number of actions to reform how space and weapon 
systems are acquired, both through its own initiatives as well as 
those required by statute. Additionally, DOD is evaluating and 
proposing new actions to increase space system acquisition efficiency 
and effectiveness. Because many of these actions are relatively new, 
or not yet fully implemented, it is too early to tell whether they 
will be effective or effectively implemented. 

For space in particular, DOD is working to ensure that critical 
technologies are matured before large-scale acquisition programs 
begin, requirements are defined early in the process and are stable 
throughout, and system design remains stable. DOD also intends to 
follow incremental or evolutionary acquisition processes versus 
pursuing significant leaps in capabilities involving technology risk 
and has done so with the only new major satellite program undertaken 
by the Air Force in recent years--GPS IIIA. DOD is also providing more 
program and contractor oversight and putting in place military 
standards and specifications in its acquisitions. Additionally, DOD 
and the Air Force are working to streamline management and oversight 
of the national security space enterprise. For example, all Air Force 
space system acquisition responsibility has been aligned to the office 
that has been responsible for all other Air Force acquisition efforts, 
and the Defense Space Council--created last year--is reviewing, as one 
of its first agenda items, options for streamlining the many 
committees, boards, and councils involved in space issues. These and 
other actions that have been taken or are being taken that could 
improve space system acquisition outcomes are described in table 2. 

Table 2: Actions Taken or Being Taken That Could Benefit Space System 
Acquisition Outcomes: 

Category: National policy; 
Actions: 
* In June 2010, the President of the United States issued the new 
National Space Policy which establishes overarching national policy 
for the conduct of U.S. space activities. The policy states that the 
Secretary of Defense and the Director of National Intelligence are 
responsible for developing, acquiring, and operating space systems and 
supporting information systems and networks to support U.S. national 
security and enable defense and intelligence operations. The policy 
helps to clarify the Secretary of Defense's roles and responsibilities 
for coordinating space system acquisitions that span DOD and federal 
agencies, such as those for space situational awareness; 
* In January 2011, the Secretary of Defense and the Director of 
National Intelligence issued the National Security Space Strategy to 
build on the National Space Policy and help inform planning, 
programming, acquisition, operations, and analysis. 

Category: Acquisition policy; 
Actions: 
* We expressed concern over DOD's tailored national security space 
acquisition policy--initially issued in 2003--primarily because it did 
not alter DOD's practice of committing to major investments before 
knowing what resources will be required to deliver promised 
capability. Instead, the policy encouraged development of leading-edge 
technology within product development, that is, at the same time the 
program manager is designing the system and undertaking other product 
development activities. In 2009, DOD eliminated the space acquisition 
policy and moved the acquisition of space systems under DOD's updated 
acquisition guidance for defense acquisition programs (DOD Instruction 
5000.02). In October 2010, the Under Secretary of Defense for 
Acquisition, Technology and Logistics issued a new space acquisition 
policy to be incorporated into DOD Instruction 5000.02 that introduces 
specific management and oversight processes for acquiring major space 
systems, including retaining the requirement for independent program 
assessments to be conducted prior to major acquisition milestones. 

Category: Management and oversight; 
Actions: 
* In August 2010, the Secretary of Defense announced the elimination 
of the Office of the Assistant Secretary of Defense for Networks and 
Information Integration (ASD/NII) as part of a broader effort to 
eliminate organizations that perform duplicative functions or that 
have outlived their purpose.[A] The elimination of this organization 
may help to reduce the problems associated with the wide range of 
stakeholders within DOD responsible for overseeing the development of 
space-based capabilities; 
* In May 2009, Air Force leadership signed the Acquisition Improvement 
Plan which lists five initiatives for improving how the Air Force 
obtains new capabilities.[B] One of these initiatives relates to 
establishing clear lines of authority and accountability within 
acquisition organizations. In August 2010, the Secretary of the Air 
Force transferred space system acquisition responsibility from the 
Under Secretary of the Air Force to the Assistant Secretary of the Air 
Force for Acquisition, thereby aligning all Air Force acquisition 
responsibility to one office. As part of this realignment, the Program 
Executive Officer for Space now reports to the Assistant Secretary of 
the Air Force for Acquisition (previously, the Program Executive 
Officer for Space reported to the Under Secretary of the Air Force); 
* In November 2010, the Deputy Secretary of Defense authorized the 
disestablishment of the National Security Space Office (NSSO).[C] The 
elimination of this office may also help to streamline national 
security space system acquisition management and oversight. 
Furthermore, the Deputy Secretary of Defense revalidated the Secretary 
of the Air Force as DOD Executive Agent for Space and directed the 
creation of a Defense Space Council (DSC)--chaired by the DOD 
Executive Agent for Space and with representatives from across DOD--to 
inform, coordinate, and resolve space issues for DOD. The DSC held its 
first meeting in December 2010. According to DOD, first on the 
council's agenda was streamlining the many defense and national 
security space committees, boards, and councils by reviewing more than 
15 space-related organizations and making recommendations on their 
cancellation, consolidation, dissolution, or realignment under the DSC. 

Category: Requirements; 
Actions: 
* Another of the Air Force's Acquisition Improvement Plan initiatives 
covers requirements generation and includes the direction for the Air 
Force to certify that the acquisition community can successfully 
fulfill required capabilities in conjunction with the Air Force 
Requirements for Operational Capabilities Council. Certification means 
the required capabilities can be translated in a clear and unambiguous 
way for evaluation in a source selection, are prioritized if 
appropriate, and are organized into feasible increments of capability. 

Category: Program management assistance; 
Actions: 
* The Space and Missile Systems Center--the Air Force's primary 
organization responsible for acquiring space systems--resurrected a 
program management assistance group in 2007 to help mitigate program 
management, system integration, and program control deficiencies 
within specific ongoing programs. This group assists and supplements 
wing commanders and program offices in fixing common problems, raising 
core competencies, and providing a consistent culture that sweeps 
across programs. As we reported last year, the GPS Wing Commander 
stated this group was an integral part of the overall process 
providing application-oriented training, templates, analyses, and 
assessments vital to the GPS IIIA baseline review. According to a 
senior program management assistance group official, the group has 
provided assistance to other major programs, including GPS OCX, SBIRS 
High, and SBSS. 

Category: Workforce; 
Actions: 
* Another initiative in the Air Force's Acquisition Improvement Plan 
is to revitalize the acquisition workforce by, among other things, 
increasing the number of authorized positions and providing for 
additional hiring, examining the proper mix of military and civilian 
personnel, and establishing training and experience objectives as part 
of the career paths for each acquisition specialty and increasing the 
availability of specialized training. Also, as we reported last year, 
the Air Force was continuing efforts to bring space operators and 
space system acquirers together through the Advanced Space Operations 
School and the National Security Space Institute. The Air Force 
anticipated that this higher-level education would be integral to 
preparing space leaders with the best acquisition know-how. 

Category: Cost estimating; 
Actions: 
* The Air Force took actions to strengthen cost estimating. For 
example, we recommended that the Secretary of the Air Force ensure 
that cost estimates are updated as major events occur within a program 
that could have a material impact on cost, and that the roles and 
responsibilities of the various Air Force cost-estimating 
organizations be clearly articulated.[D] An Air Force policy directive 
now requires that cost estimates for major programs be updated 
annually, and lays out roles and responsibilities for Air Force cost-
estimating organizations. Additionally, the Joint Space Cost Council--
formed in 2007 with membership across industry and military and civil 
government agencies--is actively working to improve cost credibility 
and realism in estimates, budgets, schedules, data, proposals, and 
program execution. For example, one initiative has developed a 
standard work breakdown structure that is being vetted through 
industry and government. 

Category: Military standards; 
Actions: 
* Over the last several years, the Air Force Space and Missile Systems 
Center has taken action aimed at preventing parts quality problems by 
issuing policy relating to specifications and standards. It is 
requiring the GPS IIIA program development contractor to meet these 
specifications and standards. 

Source: GAO analysis of DOD data and previous GAO reports. 

[A] The ASD/NII's responsibilities included serving as the principal 
staff assistant on nonintelligence space matters; information 
technology, including National Security Systems; information resource 
management; and sensitive information integration. The ASD/NII also 
served as the principal staff assistant for issues such as command and 
control and net-centric capabilities. 

[B] The Secretary of the Air Force and Chief of Staff of the Air Force 
issued the Acquisition Improvement Plan to recapture acquisition 
excellence by rebuilding an Air Force acquisition culture that 
delivers products and services as promised--on time, within budget, 
and in compliance with all laws, policies, and regulations. The plan 
consists of five initiatives: (1) revitalize the Air Force acquisition 
workforce, (2) improve the requirements generation process, (3) 
instill budget and financial discipline, (4) improve major Air Force 
systems source selections, and (5) establish clear lines of authority 
and accountability within acquisition organizations. 

[C] As part of this direction, the Deputy Secretary of Defense 
authorized the establishment of a jointly manned space office to 
restructure and replace the NSSO. The NSSO supported the Secretary of 
the Air Force who, as the DOD Executive Agent for Space, was 
responsible for developing, coordinating, and integrating plans and 
programs for space systems and the acquisition of DOD space major 
defense acquisition programs, and was responsible for executing the 
space major defense acquisition programs, when delegated that 
authority by the Under Secretary of Defense for Acquisition, 
Technology and Logistics. The specific roles and responsibilities of 
the DOD Executive Agent for Space are defined in Department of Defense 
Directive 5101.2, DOD Executive Agent for Space (June 3, 2003). 

[D] GAO, Space Acquisitions: DOD Needs to Take More Action to Address 
Unrealistic Initial Cost Estimates of Space Systems, GAO-07-96 
(Washington, D.C.: Nov. 17, 2006). 

[End of table] 

At the DOD-wide level, and as we reported last year, Congress and DOD 
have recently taken major steps toward reforming the defense 
acquisition system in ways that may increase the likelihood that 
weapon programs will succeed in meeting planned cost and schedule 
objectives.[Footnote 5] In particular, new DOD policy and legislative 
provisions place greater emphasis on front-end planning and 
establishing sound business cases for starting programs.[Footnote 6] 
For example, the provisions require programs to invest more time and 
resources to refine concepts through practices such as early systems 
engineering, strengthen cost estimating, develop technologies, build 
prototypes, hold early milestone reviews, and develop preliminary 
designs before starting system development. These provisions are 
intended to enable programs to refine a weapon system concept and make 
cost, schedule, and performance trade-offs before significant 
commitments are made. In addition, DOD policy requires establishment 
of configuration steering boards that meet annually to review program 
requirements changes as well as to make recommendations on proposed 
descoping options that could reduce program costs or moderate 
requirements. Fundamentally, these provisions should help (1) programs 
replace risk with knowledge and (2) set up more executable programs. 
Key DOD and legislative provisions compared with factors we identified 
in programs that have been successful in meeting cost and schedule 
baselines are summarized in table 3. 

Table 3: Comparison of Factors Contributing to Meeting Cost and 
Schedule Goals and Recent Acquisition Reform Initiatives: 

Success factor: 
* Establish a sound, executable business case; 
Recent acquisition reform initiatives: 
* Overall, strong emphasis on front-end planning (pre-systems 
acquisition). 

Success factor: 
* Incremental approach to acquiring capabilities; 
Recent acquisition reform initiatives: 
* Incremental development emphasized, with each increment that 
provides a significant increase in capability to be managed separately. 

Success factor: 
* Clear, well-defined requirements; 
Recent acquisition reform initiatives: 
* Early reviews to be conducted prior to start of development 
(Milestone B); 
* Enhanced requirements for Analysis of Alternatives; 
* New leadership positions established to enhance systems engineering 
and developmental testing. 

Success factor: 
* Leverage mature technologies; 
Recent acquisition reform initiatives: 
* Independent review of technology maturity and integration risk prior 
to Milestone B; 
* Competitive prototypes; 
* Preliminary Design Review to be conducted earlier, prior to 
Milestone B. 

Success factor: 
* Establish realistic cost and schedule estimates; 
Recent acquisition reform initiatives: 
* New position and organization established to review and conduct 
independent cost estimates for major defense acquisition programs and 
provide cost-estimating guidance DOD-wide; 
* Early cost estimate required for Milestone A; 
* Confidence level for cost estimates to be reported. 

Execute business case in disciplined manner: 

Success factor: 
* Resist new requirements; 
Recent acquisition reform initiatives: 
* Configuration steering boards established to stabilize requirements; 
* Post-Critical Design Review assessment required to review progress. 

Source: GAO analysis of the Weapon Systems Acquisition Reform Act of 
2009, Pub. L. No. 111-23 and Department of Defense Instruction 5000.02 
(Dec. 8, 2008). 

[End of table] 

Furthermore, the Ike Skelton National Defense Authorization Act for 
Fiscal Year 2011, signed into law on January 7, 2011, contains further 
direction aimed at improving acquisition outcomes, including, among 
other things, a requirement for the Secretary of Defense to issue 
guidance on the use of manufacturing readiness levels (including 
specific levels that should be achieved at key milestones and decision 
points), elevating the role of combatant commanders in DOD's 
requirements-setting process, and provisions for improving the 
acquisition workforce.[Footnote 7] 

While it is too soon to determine if Congress's and DOD's reform 
efforts will improve weapon program outcomes, DOD has taken steps to 
implement the provisions. For example, in December 2009, the 
department issued a new implementation policy, which identifies roles 
and responsibilities and institutionalizes many of the requirements of 
the Weapon Systems Acquisition Reform Act of 2009. DOD has also filled 
several key leadership positions created by the legislation, including 
the Directors for Cost Assessment and Program Evaluation, 
Developmental Test and Evaluation, Systems Engineering, and 
Performance Assessments and Root Cause Analyses. To increase 
oversight, the department embarked on a 5-year effort to increase the 
size of the acquisition workforce by up to 20,000 personnel by 2015. 
Furthermore, the department began applying the acquisition reform 
provisions to some new programs currently in the planning pipeline. 
For example, many of the pre-Milestone B programs we reviewed this 
year as part of our annual assessment of selected weapon programs 
planned to conduct preliminary design reviews before going to 
Milestone B, although fewer are taking other actions, such as 
developing prototypes, that could improve their chances of success. 
With respect to space system acquisitions, particularly GPS III--DOD's 
newest major space system acquisition--has embraced the knowledge-
based concepts behind our previous recommendations as a means of 
preventing large cost overruns and schedule delays. 

Additionally, the Office of the Secretary of Defense and the Air Force 
are proposing new acquisition strategies for satellites and launch 
vehicles: 

* In June of last year, and as part of the Secretary of Defense's 
Efficiencies Initiative,[Footnote 8] the Under Secretary of Defense 
for Acquisition, Technology and Logistics began an effort to restore 
affordability and productivity in defense spending. Major thrusts of 
this effort include targeting affordability and controlling cost 
growth, incentivizing productivity and innovation in industry, 
promoting real competition, improving tradecraft in services 
acquisition, and reducing nonproductive processes and bureaucracy. As 
part of this effort, the Office of the Secretary of Defense and the 
Air Force are proposing a new acquisition strategy for procuring 
satellites, called the Evolutionary Acquisition for Space Efficiency 
(EASE), to be implemented starting in fiscal year 2012. Primary 
elements of this strategy include block buys of two or more satellites 
(economic order quantities) using a multiyear procurement construct, 
use of fixed-price contracting, stable research and development 
investment, evolutionary development, and stable requirements. 
According to DOD, EASE is intended to help stabilize funding, 
staffing, and subtier suppliers; help ensure mission continuity; 
reduce the impacts associated with obsolescence and production breaks; 
and increase long-term affordability with cost savings of over 10 
percent. DOD anticipates first applying the EASE strategy to procuring 
two AEHF satellites beginning in fiscal year 2012, followed by 
procurement of two SBIRS High satellites beginning in fiscal year 
2013. According to the Air Force, it will consider applying the EASE 
strategy--once it is proven--to other space programs, such as GPS III. 
We have not yet conducted a review of the EASE strategy to assess the 
potential benefits, challenges, and risks of its implementation. 
Questions about this approach would include the following: 

- What are the major risks incurred by the government in utilizing the 
EASE acquisition strategy? 

- What level of risks (known unknowns and unknown unknowns) is being 
assumed in the estimates of savings to be accrued from the EASE 
strategy? 

- How are evolutionary upgrades to capabilities to be pursued under 
EASE? 

- How does the EASE acquisition strategy reconcile with the current 
federal and DOD acquisition policy, acquisition and financial 
management regulations, and law? 

* The Air Force is developing a new acquisition strategy for its EELV 
program. Primarily, under the new strategy, the Air Force and National 
Reconnaissance Office are expected to initiate block buys of eight 
first stage booster cores--four for each EELV family, Atlas V and 
Delta IV--per year over 5 years to help stabilize the industrial base, 
maintain mission assurance, and avoid cost increases. As mentioned 
earlier, we have initiated a review of the development of the new 
strategy and plan to issue a report on our findings in June 2011. 
Given concerns raised through recent studies about visibility into 
costs and the industrial base supporting EELV, it is important that 
this strategy be supported with reliable and accurate data. 

Additional Actions Leadership, Organization, and Support May Still Be 
Needed: 

The actions that the Office of the Secretary of Defense and the Air 
Force have been taking to address acquisition problems listed in 
tables 2 and 3 are good steps. However, more changes to processes, 
policies, and support may be needed--along with sustained leadership 
and attention--to help ensure that these reforms can take hold, 
including addressing the diffuse leadership for space programs. 
Diffuse leadership has had a direct impact on the space system 
acquisition process, primarily because it has made it difficult to 
hold any one person or organization accountable for balancing needs 
against wants, for resolving conflicts among the many organizations 
involved with space, and for ensuring that resources are dedicated 
where they need to be dedicated. This has hampered DOD's ability to 
synchronize delivery of space, ground, and user assets for space 
programs. For instance, many of the cost and schedule problems we 
identified on the GPS program were tied in part to diffuse leadership 
and organizational stovepipes throughout DOD, particularly with 
respect to DOD's ability coordinate delivery of space, ground, and 
user assets. Additionally, we have recently reported that DOD faces a 
situation where satellites with advances in capability will be 
residing for years in space without users being able to take full 
advantage of them because investments and planning for ground, user, 
and space components were not well coordinated.[Footnote 9] 
Specifically, we found that the primary cause for user terminals not 
being well synchronized with their associated space systems is that 
user terminal development programs are typically managed by different 
military acquisition organizations than those managing the satellites 
and ground control systems. 

Recent studies and reviews examining the leadership, organization, and 
management of national security space have found that there is no 
single authority responsible below the President and that authorities 
and responsibilities are spread across the department.[Footnote 10] In 
fact, the national security space enterprise comprises a wide range of 
government and nongovernment organizations responsible for providing 
and operating space-based capabilities serving both military and 
intelligence needs. 

While some changes to the leadership structure have recently been 
made--including revalidating the role of the Secretary of the Air 
Force as the DOD Executive Agent for Space, disestablishing the Office 
of the Assistant Secretary of Defense for Networks and Information 
Integration and the National Security Space Office, and aligning Air 
Force space system acquisition responsibility into a single Air Force 
acquisition office--and others are being studied, it is too early to 
tell how effective these changes will be in streamlining management 
and oversight of space system acquisitions. Additionally, while the 
recently issued National Space Policy assigns responsibilities for 
governmentwide space capabilities, such as those for SSA, it does not 
necessarily assign the corresponding authority to execute the 
responsibilities. 

Finally, adequate workforce capacity is essential for the front-end 
planning activities now required by acquisition reform initiatives for 
new weapon programs to be successful. However, studies have identified 
insufficient numbers of experienced space system acquisition personnel 
and inadequate continuity of personnel in project management positions 
as problems needing to be addressed in the space community. For 
example, a recent Secretary of the Air Force-directed Broad Area 
Review of space launch noted that while the Air Force Space and 
Missile Systems Center workforce had decreased by about 25 percent in 
the period from 1992 to 2010, the number of acquisition programs had 
increased by about 41 percent in the same time period.[Footnote 11] 
Additionally, our own studies have identified gaps in key technical 
positions, which we believed increased acquisition risks. For 
instance, in a 2008 review of the EELV program, we found that 
personnel shortages in the EELV program office occurred particularly 
in highly specialized areas.[Footnote 12] According to the EELV 
program office and Broad Area Review, this challenge persists. 

Concluding Remarks: 

DOD is working to position itself to improve its space system 
acquisitions. After more than a decade of acquisition difficulties-- 
which have created potential gaps in capability, diminished DOD's 
ability to invest in new space systems, and lessened DOD's credibility 
to deliver high-performing systems within budget and on time--DOD is 
starting to launch new generations of satellites that promise vast 
enhancements in capability. In 1 year, DOD has or expects to have 
launched newer generations of navigation, communications, SSA, and 
missile warning satellites. Moreover, given the nation's fiscal 
challenges, DOD's focus on fixing problems and implementing reforms 
rather than taking on new, complex, and potentially higher-risk 
efforts is promising. However, challenges to keeping space system 
acquisitions on track remain, including pursuing evolutionary 
acquisitions over revolutionary ones, managing requirements, providing 
effective coordination across the diverse organizations interested in 
space-based capabilities, and ensuring that technical and programmatic 
expertise are in place to support acquisitions. DOD's newest major 
space system acquisition efforts, such as GPS IIIA, DWSS, JMS, Space 
Fence, and the follow-on to the SBSS will be key tests of how well 
DOD's reforms and reorganizations have positioned it to manage these 
challenges. We look forward to working with DOD to help ensure that 
these and other challenges are addressed. 

Chairman Nelson, Ranking Member Sessions, this completes my prepared 
statement. I would be happy to respond to any questions you or other 
Members of the Subcommittee may have at this time. 

Contacts and Acknowledgments: 

For further information about this statement, please contact Cristina 
Chaplain at (202) 512-4841 or chaplainc@gao.gov. Contact points for 
our Offices of Congressional Relations and Pubic Affairs may be found 
on the last page of this statement. Individuals who made key 
contributions to this statement include Art Gallegos, Assistant 
Director; Kristine Hassinger; Arturo Holguín; Rich Horiuchi; Roxanna 
Sun; and Bob Swierczek. 

[End of section] 

Appendix I: Actions Needed to Address Space and Weapon Acquisition 
Problems: 

Before undertaking new programs: 

* Prioritize investments so that projects can be fully funded and it 
is clear where projects stand in relation to the overall portfolio. 

* Follow an evolutionary path toward meeting mission needs rather than 
attempting to satisfy all needs in a single step. 

* Match requirements to resources--that is, time, money, technology, 
and people--before undertaking a new development effort. 

* Research and define requirements before programs are started and 
limit changes after they are started. 

* Ensure that cost estimates are complete, accurate, and updated 
regularly. 

* Commit to fully fund projects before they begin. 

* Ensure that critical technologies are proven to work as intended 
before programs are started. 

* Assign more ambitious technology development efforts to research 
departments until they are ready to be added to future generations 
(increments) of a product. 

* Use systems engineering to close gaps between resources and 
requirements before launching the development process. 

During program development: 

* Use quantifiable data and demonstrable knowledge to make go/no-go 
decisions, covering critical facets of the program such as cost, 
schedule, technology readiness, design readiness, production 
readiness, and relationships with suppliers. 

* Do not allow development to proceed until certain thresholds are 
met--for example, a high proportion of engineering drawings completed 
or production processes under statistical control. 

* Empower program managers to make decisions on the direction of the 
program and to resolve problems and implement solutions. 

* Hold program managers accountable for their choices. 

* Require program managers to stay with a project to its end. 

* Hold suppliers accountable to deliver high-quality parts for their 
products through such activities as regular supplier audits and 
performance evaluations of quality and delivery, among other things. 

* Encourage program managers to share bad news, and encourage 
collaboration and communication. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix II: 

[End of section] 

Scope and Methodology: 

In preparing this testimony, we relied on our body of work in space 
programs, including previously issued GAO reports on assessments of 
individual space programs, common problems affecting space system 
acquisitions, and the Department of Defense's (DOD) acquisition 
policies. We relied on our best practices studies, which comment on 
the persistent problems affecting space system acquisitions, the 
actions DOD has been taking to address these problems, and what 
remains to be done, as well as Office of the Secretary of Defense and 
Air Force documents addressing these problems and actions. We also 
relied on work performed in support of our annual weapons system 
assessments, and analyzed DOD funding estimates to assess cost 
increases and investment trends for selected major space system 
acquisition programs. The GAO work used in preparing this statement 
was conducted in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

[End of section] 

Footnotes: 

[1] The $18 billion does not include the cost of two replenishment 
sensors, which the Air Force does not include as part of the SBIRS 
High baseline. 

[2] GAO, Global Positioning System: Challenges in Sustaining and 
Upgrading Capabilities Persist, [hyperlink, 
http://www.gao.gov/products/GAO-10-636] (Washington, D.C., Sept. 15, 
2010) and Space Acquisitions: Challenges in Commercializing 
Technologies Developed under the Small Business Innovation Research 
Program, [hyperlink, http://www.gao.gov/products/GAO-11-21] 
(Washington, D.C.: Nov. 10, 2010). 

[3] GAO, Global Positioning System: Significant Challenges in 
Sustaining and Upgrading Widely Used Capabilities, [hyperlink, 
http://www.gao.gov/products/GAO-09-325] (Washington, D.C.: Apr. 30, 
2009). 

[4] The Small Business Innovation Development Act of 1982, Pub. L. No. 
97-219, established the SBIR program to stimulate technological 
innovation, use small businesses to meet federal research and 
development needs, foster and encourage participation by minority and 
disadvantaged persons in technological innovation, and increase 
private-sector commercialization of innovations derived from federal 
research and development. 

[5] GAO, Defense Acquisitions: Strong Leadership Is Key to Planning 
and Executing Stable Weapon Programs, [hyperlink, 
http://www.gao.gov/products/GAO-10-522] (Washington, D.C.: May 6, 
2010). 

[6] In December 2008, DOD revised its acquisition instruction-- 
Department of Defense Instruction 5000.02, Operation of the Defense 
Acquisition System. The Weapon Systems Acquisition Reform Act of 2009, 
Pub. L. No. 111-23, was enacted May 22, 2009. 

[7] Pub. L. No. 111-383. 

[8] In May 2010, the Secretary of Defense announced the Defense 
Efficiencies Initiative to increase efficiencies, reduce overhead 
costs, and eliminate redundant functions in order to improve the 
effectiveness of the DOD enterprise. The goal is to apply savings from 
this initiative to force structure and modernization. 

[9] GAO, Defense Acquisitions: Challenges in Aligning Space System 
Components, [hyperlink, http://www.gao.gov/products/GAO-10-55] 
(Washington, D.C.: Oct. 29, 2009). 

[10] Institute for Defense Analyses, Leadership, Management, and 
Organization for National Security Space: Report to Congress of the 
Independent Assessment Panel on the Organization and Management of 
National Security Space (Alexandria, Va., July 2008), and House 
Permanent Select Committee on Intelligence, Report on Challenges and 
Recommendations for United States Overhead Architecture (Washington, 
D.C., Oct. 2008). 

[11] Institute for Defense Analyses, Launch Broad Area Review 2010 
(BAR-X) (Alexandria, Va., June, 2010). 

[12] GAO, Space Acquisitions: Uncertainties in the Evolved Expendable 
Launch Vehicle Program Pose Management and Oversight Challenges, 
[hyperlink, http://www.gao.gov/products/GAO-08-1039] (Washington, 
D.C.: Sept. 26, 2008). 

[End of section] 

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