Opportunity to Refocus on Strengthening Acquisition Management
GAO-13-432: Published: Apr 26, 2013. Publicly Released: Apr 26, 2013.
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What GAO Found
Although the Missile Defense Agency (MDA) has made some progress, the new MDA Director faces challenges developing and deploying new systems to achieve increasingly integrated capabilities as well as supporting and upgrading deployed systems while providing decision makers in the Department of Defense (DOD) and Congress with key oversight information in an era of fiscal constraints.
Challenge: Improve Investment Decisions
Determining the most promising and cost effective new missile defense systems to buy--considering technical feasibility and cost--remains a challenge for MDA. While MDA has conducted some analyses that consider alternatives in selecting which acquisitions to pursue, it has not conducted robust analyses of alternatives for two of its new programs. Because of its acquisition flexibilities, MDA is not required to do so. Robust analyses, however, could be particularly useful to DOD and congressional decision makers as they decide how to manage the portfolio of missile defense acquisitions. GAO has reported in the past that without analyses of alternatives, programs may not select the best solution for the warfighter, are at risk for cost increases, and can face schedule delays.
Challenge: Expand on Steps Taken to Place Investments on a Sound Footing
In the past year, MDA gained important knowledge by successfully conducting several important tests, including a test to show how well its systems will operate together. MDA has also taken steps to lower the acquisition risks of two newer programs by adding more development time. However, development issues discovered after three programs prematurely committed to production continue to disrupt both interceptor production and flight test schedules. In addition, two other programs plan to make premature commitments to production before testing confirms their designs work as intended. MDA is planning to fly targets for the first time in its first operational test using several systems, adding risk that key information may not be obtained in this major test.
Challenge: Ensure Program Baselines Support Oversight
While MDA has made substantial improvements to the clarity of its cost and schedule baselines since first reporting them in 2010, they are still not useful for decision makers to gauge progress. For example, the information they include is not sufficiently comprehensive because they do not include operation and support costs from the military services. By not including these costs, the life cycle costs for some MDA programs could be significantly understated.
Challenge: Developing and Deploying U.S. Missile Defense in Europe
DOD declared the first major deployment of U.S. missile defense in Europe operational in December 2011, but MDA is faced with resolving some issues to provide the full capability and is facing delays to some systems planned in each of the next three major deployments. MDA has also struggled for years to develop the tools--the models and simulations--to credibly assess operational performance of systems before they are deployed. It recently committed to a new approach to resolve this problem.
Why GAO Did This Study
Since 2002 MDA has spent approximately $90 billion to provide protection from enemy ballistic missiles by developing battle management systems, sensors that identify incoming threats, and missiles to intercept them. MDA plans to spend about $8 billion per year through 2017. For nearly a decade, we have reported on MDA's progress and challenges in developing and fielding the Ballistic Missile Defense System.
GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through acquisition baselines. This report examines the agency's progress and remaining challenges in (1) selecting new programs in which to invest; (2) putting programs on a sound development path; (3) establishing baselines that support oversight; and (4) developing and deploying U.S. missile defense in Europe for defense of Europe and the United States. To do this, GAO examined MDA's acquisition reports, analyzed baselines reported over several years to discern progress, and interviewed a wide range of DOD and MDA officials.
What GAO Recommends
GAO makes four recommendations to DOD to ensure MDA (1) fully assesses alternatives before selecting investments, (2) takes steps to reduce the risk that unproven target missiles can disrupt key tests, (3) reports full program costs, and (4) stabilizes acquisition baselines. DOD concurred with two recommendations and partially concurred with two, stating the decision to perform target risk reduction flight tests should be weighed against other programmatic factors and that its current forum for reporting MDA program costs should not include non-MDA funding. GAO continues to believe the recommendations are valid as discussed in this report.
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Recommendations for Executive Action
Status: Closed - Implemented
Comments: DOD concurred with our recommendation that MDA undertake robust alternative analyses for new efforts currently underway and before embarking on any other new major programs. With respect to new efforts currently underway, MDA did not conduct such analyses for the Precision Tracking Space System and Aegis Standard Missile-3 Block IIB programs because DOD cancelled both in April 2013. However, in 2015 MDA began alternative analyses for the homeland missile defense and ballistic missile defense sensor architecture, but did so in accordance with specific direction in the National Defense Authorization Act for Fiscal Year 2014. As of August 2017, MDA has not released the final reports for either of these analyses due to the lack of a sufficiency review from the Director for Cost Assessment and Performance Evaluation, which has noted setbacks due to staffing levels and competing priorities. Despite the lack of final reports, MDA officials briefed the results of the analyses to congressional defense committees and senior DOD leadership and used the results as a basis for the decision to pursue the Ground-based Midcourse Defense's Redesigned Kill Vehicle. Consequently, we believe that MDA met the intention of our recommendation with respect to new efforts currently underway, although it was action taken based on explicit direction from Congress. Whether or not MDA will perform such alternatives analyses on any other new major programs remains to be seen and we will continue to monitor its progress in this regard.
Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to undertake robust alternatives analyses for new major missile defense efforts currently underway, including the SM-3 Block IIB, and before embarking on any other major new missile defense programs. In particular, such analyses should consider a broad range of alternatives.
Agency Affected: Department of Defense
Status: Closed - Not Implemented
Comments: Despite partially concurring with our recommendation in 2013, as of August 2019, MDA has not adjusted its test plans to include risk-reduction flight tests (i.e., non-intercept) for new target types prior to their inclusion in an intercept flight test. MDA officials have not done so because such decisions must be balanced against potential cost, schedule, and programmatic impacts. Also, MDA officials contest that flight test preparation processes, like dry-runs and quality control checks, are sufficient to discover issues prior to an intercept test. While test preparation processes are valuable, they are not a substitute for risk reduction flight tests. This was proven in June 2015 when MDA launched a new intermediate-range target that had 6 different test preparation processes but not a risk-reduction flight test and the target failed, which resulted in significant cost, schedule, and programmatic impacts. Moving forward, despite the impacts from such target failures, MDA plans to use a new medium-range target during a major intercept test for the Terminal High Altitude Area Defense (THAAD) program in the fourth quarter of fiscal year 2019, in support of an urgent operational need for the warfighter deployed to Korea. The use of a new target during this flight test significantly increases the risk that it will not go as planned, which could result in a costly retest and defer the demonstration of urgent capabilities needed by the warfighter. We maintain our stance that risk reduction flight tests would reduce the risk for the associated test and the overall flight test plan; however, MDA's actions to-date suggest that it has no intention of including risk-reduction flight tests for new targets.
Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to add risk reduction non-intercept flight tests for each new type of target missiles developed.
Agency Affected: Department of Defense
Comments: DOD partially concurred with our 2013 recommendation that decisionmakers should have insight into the full lifecycle costs of MDA's programs. However, as of August 2019, MDA is still not including the military services' operations and sustainment (O&S) costs--which are a part of the full lifecycle costs--in the resource baselines it reports in the Ballistic Missile Defense System Accountability Report. MDA is trying to determine how best to report the full lifecycle costs to decisionmakers, but has indicated that the Ballistic Missile Defense System Accountability Report is not the appropriate forum for reporting the military services' operation and sustainment costs. However, MDA cited its collaboration with the Services to establish O&S joint cost estimates (JCE) as a potential means of providing decisionmakers with insight into the full lifecycle costs of its programs, ahead of key program decisions. To date, MDA has completed several JCEs with both the Army and Navy for various programs. However, these JCEs were completed late in the acquisition process after most of key decisions had been made for these programs. In addition, every MDA program does not currently have a JCE. Therefore, we believe that MDA has not yet demonstrated that is providing decisionmakers with information to enable determinations that are based on a comprehensive understanding of the depth and breadth of each program's full lifecycle costs.
Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to include in its resource baseline cost estimates all life cycle costs, specifically the operations and support costs, from the military services in order to provide decision makers with the full costs of ballistic missile defense systems.
Agency Affected: Department of Defense
Comments: DOD concurred with our 2013 recommendation regarding the need for MDA to stabilize its acquisition baselines, but also noted MDA's need to adjust its baselines to remain responsive to evolving requirements and threats; both of which are beyond MDA's control. Further, DOD highlighted the MDA Director's authority to make adjustments to the agency's programmatic baselines, within departmental guidelines. Our recommendation, however, is not designed to limit the Director's authority to adjust baselines or to prevent adjusting the baselines, as appropriate. Rather, our recommendation is designed to address traceability issues we have found with MDA's baselines, which are within its control. Specifically, for MDA to be able to effectively report longer-term progress of its acquisitions and provide the necessary transparency to Congress, it is critical that the agency stabilize its baselines so that once set, any revisions can be tracked over time. As of August 2019, we have not seen any indication that MDA is working to implement this recommendation. For example, in 2017 and 2018, MDA's Director acknowledged the lack of a stable baseline for the Targets and Countermeasures program and began excluding cost variances due to test changes, which limits transparency into the full costs associated with this program. We will continue to monitor MDA's baselines to determine any progress in this area or implementation of this recommendation.
Recommendation: In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to stabilize the acquisition baselines, so that meaningful comparisons can be made over time that support oversight of those acquisitions.
Agency Affected: Department of Defense