Opportunities Exist to Reduce Acquisition Risk and Improve Reporting on System Capabilities
GAO-15-345: Published: May 6, 2015. Publicly Released: May 6, 2015.
What GAO Found
In fiscal year 2014, the Missile Defense Agency (MDA) made some progress in achieving its testing and delivery goals for individual elements of the Ballistic Missile Defense System (BMDS), but was not able to complete its planned fiscal year goals for testing. MDA conducted two intercept tests demonstrating an increased capability. However, it did not complete six planned flight tests for a variety of reasons, including test delays and retests to address previous failures, which limit the knowledge gained in fiscal year 2014. Additionally, several BMDS elements delivered assets in fiscal year 2014 without completing planned testing, which increases cost and schedule risks for an individual system and the BMDS as a whole. In one instance, the Terminal High Altitude Area Defense element delivered assets although its capability has not been demonstrated through flight testing.
Potential also exists to reduce acquisition risks for several MDA efforts that are pursuing high-risk approaches that do not adhere to an approach which encourages accumulating more knowledge before program commitments are made and conducting testing before production is initiated. Specifically:
- Aegis Ballistic Missile Defense (BMD)—MDA demonstrated that it had matured the Aegis Standard Missile-3 (SM-3) Block IIA interceptor's design prior to starting production, a best practice. However, Aegis BMD is still addressing issues in the Aegis SM-3 Block IB interceptor revealed through prior test failures and is planning to award a multiyear procurement contract prior to flight testing the final design. If design changes are later needed, the cost, schedule, and performance impact could be significant.
- Ground-based Midcourse Defense (GMD) system—MDA reduced risk by adding a non-intercept flight test in fiscal year 2015 which allows the program to collect valuable data on redesigned components. However, GMD increased risk to the warfighter by prioritizing new interceptor production over fixing previously deployed interceptors and resolving known issues. In addition, MDA has decided to redesign the GMD kill vehicle prior to determining whether the effort is the most cost-effective solution.
Unless MDA aligns its future efforts for Aegis and GMD with acquisition best practices, the agency's acquisition outcomes may be on a similar trajectory to that of prior years, incurring both cost growth and schedule delays.
MDA is working to increase the extent to which the various elements of the BMDS are capable of working as one integrated system, but the agency reports limited information to Congress regarding its integration goals and its progress against these goals. Integration of the BMDS is important because it improves the system performance beyond the abilities of individual elements. Although MDA is not required to provide this information in its reports and briefings to Congress, congressional decision makers have limited insight into the planned BMD system-level capabilities, the supporting element-level upgrades, and how element-level efforts are synchronized to ensure timely delivery.
Why GAO Did This Study
Since 2002, MDA has spent approximately $105 billion, and it plans to spend about $38 billion more by 2019, to defend against enemy ballistic missiles. MDA is developing a BMDS comprised of a command and control system, sensors that identify incoming threats, and intercepting missiles. For over a decade, GAO has reported on MDA's progress and challenges in developing and fielding the BMDS. GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through its acquisition baselines, and to report on other acquisition issues as appropriate. This, GAO's 12th annual report, examines progress and challenges in fiscal year 2014 associated with MDA's: (1) individual element testing and asset delivery goals, (2) efforts to reduce acquisition risks, and (3) reporting on the BMDS integrated capability. GAO examined MDA's acquisition reports and assessed them against GAO's acquisition best practices, analyzed baselines reported to discern progress, and interviewed DOD and MDA contractor officials.
What GAO Recommends
GAO recommends that, in order to reduce acquisition risk, MDA align future efforts for Aegis BMD and GMD with GAO's knowledge-based acquisition practices. GAO also recommends that the Secretary of Defense direct MDA to report annually to Congress and DOD on the progress it has made in achieving an integrated capability. DOD concurred or partially concurred with all of our recommendations. GAO continues to believe the recommendations are valid as discussed in this report.
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Recommendations for Executive Action
Status: Closed - Not Implemented
Comments: DOD partially concurred with this recommendation. In May 2016, MDA conducted two non-intercept, risk reduction flight tests to test the redesigned SM-3 Block IB third-stage rocket motor component. However, all major GMD CE-II Block I components are currently undergoing production and interceptors are being integrated in advance of the demonstration intercept flight test. Moreover, the flight test continues to be delayed, which may increase the number of fully integrated interceptors are completed prior to the flight test.
Recommendation: To strengthen MDA's acquisition efforts and help support oversight and to ensure that future efforts are aligned with a sound acquisition approach, which includes robust systems engineering and testing, the Secretary of Defense should direct the following two actions: a) For Aegis BMD Standard Missile-3 (SM-3), the Department of Defense (DOD) conduct a flight test to increase confidence that the redesigned SM-3 Block IB third-stage rocket motor component works as intended prior to inserting it into the SM-3 Block IB production line. b) For GMD, delay production of Capability Enhancement-II (CE-II) Block I interceptors intended for operational use until the program has successfully conducted an intercept flight test with the CE-II Block I interceptor.
Agency Affected: Department of Defense
Comments: DOD partially concurred with our recommendation. As of July 2017, MDA has yet to finalize the analysis of alternatives (AOA) report. MDA officials stated the results of the analysis from the AOA were reached in early fiscal year 2015 and informed the decision to pursue the RKV. The AOA results were summarized and briefed to staff members from the congressional defense committees and senior DOD leadership. MDA subsequently submitted the report to DOD's Office of Cost Assessment and Program Evaluation (CAPE) for a sufficiency review but an official from the Office of the Secretary of Defense stated in July 2017 that CAPE has yet to perform the review. We await the final AOA report to make a determination of whether the recommendation was implemented.
Recommendation: To strengthen MDA's acquisition efforts and help support oversight and to ensure MDA makes sound investment decisions on improving homeland ballistic missile defense, the Secretary of Defense should direct MDA to make the department's analysis of alternatives an integral part of its planning effort and delay any decisions to begin development of the new GMD Redesigned Kill Vehicle until: a) the department's analysis of alternatives is completed and identifies the best solution to pursue; and b) Congressional and DOD decision makers have been provided the results of that analysis.
Agency Affected: Department of Defense
Comments: In providing comments on this report, the Department of Defense concurred with our recommendation to annually report to Congress its plans and progress made in delivering integrated BMDS-level capabilities, including delivery dates for the capabilities and element upgrades needed to support these capacities. Previously, MDA planned to provide Congress a table summarizing the development and delivery of integrated BMDS capabilities annually, beginning in the 2016 BMDS Accountability Report (BAR). We reviewed the 2016 BAR and determined the report did not include the full extent of information regarding plans and progress made in delivery integrating BMDS-level capabilities described in our recommendation. To remain consistent with the methodology for our annual missile defense review, we will assess the 2017 BAR in next year's review to determine if it includes this information.
Recommendation: To strengthen MDA's acquisition efforts and help support oversight, drawing from information it already has, the Secretary of Defense should direct MDA to report annually to Congress its plans for, and achieved progress in developing and delivering integrated Ballistic Missile Defense System (BMDS)-level capabilities. This reporting should include: a) planned integrated BMDS-level capabilities, including dates for when capability is planned for delivery; and b) element-level upgrades needed for delivery of the integrated BMDS capability, including dates that these upgrades need to be available for integration into the BMDS capability.
Agency Affected: Department of Defense