Defense Acquisitions:

Improvements Needed in Space Systems Acquisition Management Policy

GAO-03-1073: Published: Sep 15, 2003. Publicly Released: Sep 15, 2003.

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The Department of Defense is spending nearly $18 billion annually to develop, acquire, and operate satellites and other space-related systems. The majority of satellite programs that GAO has reviewed over the past 2 decades experienced increased costs and delayed schedules. DOD has recently implemented a new acquisition management policy, which sets the stage for decision making on individual space programs. GAO was asked to assess the new policy.

DOD's new space acquisition policy may help provide more consistent and robust information on technologies, requirements, and costs. For example, the policy employs a new independent cost estimating process, independent program reviews performed by space experts not connected with the program, and more rigorous analyses of alternatives, requirements, and system interdependencies. This information may help decision-makers assess whether gaps exist between expectations and what the program can deliver. However, the benefits that can be derived from these tools will be limited since the new policy does not alter DOD's practice of committing major investments before knowing what resources will be required to deliver promised capability. Instead, the policy encourages 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. As our work has repeatedly shown, such concurrency increases the risk that significant problems will be discovered as the system is integrated and built, when it is more costly and time-consuming to fix them. Moreover, when even one technology does not mature as expected, the entire program can be thrown off course since time and cost for invention cannot be reliably estimated. DOD's new acquisition policy for its other weapon systems recognizes these risks and consequently requires technology and product development to be done separately.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD has made changes to its space acquisition policy to respond to GAO's recommendation. Primarily, it has moved key decision points to allow programs more time to attain knowledge about technologies, design, and production, and it has specified that space program technologies should be tested in a relevant environment during the phase B/preliminary design phase. In March 2007, the Executive Agent for Space issued a memorandum that incorporated our first recommendation for modifying the space acquisition policy. The memorandum directing space acquisition programs to align requirements and resources and to use a block approach that essentially separates technology development from product development.

    Recommendation: In finalizing DOD's new space acquisition management policy, the Secretary of the Air Force, who is DOD's executive agent for space, should modify the policy to ensure that customer expectations can be matched to resources before starting product development (phase B). Specifically, the Secretary should separate technology development from product development.

    Agency Affected: Department of Defense: Department of the Air Force

  2. Status: Closed - Not Implemented

    Comments: DOD has made changes to its space acquisition policy to respond to GAO's recommendation. Specifically, it stated that, where feasible, programs should achieve a technology readiness level of six during the preliminary design phase. This means technologies would be tested in a relevant environment. In its report, however, GAO stressed that space programs should have mature technologies at the time a program is started--that is--key decision point B, since this would allow DOD oversight officials and Congress to have a more accurate picture of cost and schedule when they commit to large investments in space and it would reduce the potential of having technical problems arise late in development, when they are more costly and time-consuming to fix.

    Recommendation: The Secretary of the Air Force should also set a minimum threshold of maturity for allowing technologies into a program. As noted in our report, we previously recommended that DOD should not allow technologies to enter into a weapon system's product development until they are assessed at a TRL 7, meaning that a prototype has been demonstrated in an operational environment.

    Agency Affected: Department of Defense: Department of the Air Force


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