Military Satellite Communications: Milstar Program Issues and Cost-Saving Opportunities

Highlights

GAO provided information on the multiservice Milstar communication satellite program, focusing on: (1) satellite issues needing resolution; (2) terminal cost-saving opportunities; (3) terminal program risks and production issues; and (4) annual program reports to Congress.

Recommendations

Matter for Congressional Consideration

Matter	Status	Comments
In view of apparent DOD reluctance to reconsider the restructured Milstar plan, the House and Senate Committees on Armed Services may wish to review the new evidence and direct DOD to perform a cost and operational effectiveness analysis, or justify its intended course of action, before providing additional Milstar funds.	Closed – Not Implemented	The recommendation has been overtaken by events, because under the current administration, DOD is performing major reviews of several programs--one of which is Milstar. DOD sources indicate that their current Milstar review involves consideration of major alternatives that are substantially different than those contemplated in the GAO report. Congressional review of new DOD information can be expected.
In view of apparent DOD reluctance to reconsider the restructured Milstar plan, the House and Senate Committees on Armed Services may wish to review the new evidence and direct DOD to perform a cost and operational effectiveness analysis, or justify its intended course of action, before providing additional Milstar funds.	Closed – Not Implemented	The recommendation has been overtaken by events, because under the current administration, DOD is performing major reviews of several programs--one of which is Milstar. DOD sources indicate that their current Milstar review involves consideration of major alternatives that are substantially different than those contemplated in the GAO report. Congressional review of new DOD information can be expected.

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	The Secretary of Defense should consider cancelling plans to procure Army SCOTT based on: (1) the questionable need; (2) the likely higher unit costs associated with the anticipated low production quantities; and (3) the possibility that less costly SMART-T could be used as a substitute.	Closed – Implemented A DOD analysis of Army SCOTT requirements resulted in not continuing the development effort. Also, congressional action on the fiscal year 1993 defense budget reduced Army procurement funds for SCOTT by $24.4 million.
Department of Defense	Before DOD begins a major investment in modifying the Milstar satellite and developing new medium data rate terminals, the Secretary of Defense should ensure that: (1) a cost and operational effectiveness analysis is performed to determine whether Milstar is the best alternative for satisfying tactical satellite communication requirements; and (2) the issues associated with sufficient satellite capacity, assured satellite connectivity (access and orbit), and a capability for adequate communications in an electronic jamming environment are formally resolved if Milstar is determined to be the best alternative.	Closed – Implemented DOD reported that the former Under Secretary of Defense for Acquisition decided to forgo a formal cost and operational effectiveness analysis as part of the Defense Acquisition Board review of the Milstar program. The Under Secretary did, however, request a consolidation of the various studies and analyses supporting the current Milstar approach, and DOD is currently examining the cost and operational effectiveness of Milstar as part of the bottom-up review of major defense programs. The issues associated with satellite capacity, assured connectivity, and capability for adequate communications in an electronic jamming environment have been addressed by incorporation of the Army requirements into the Milstar operational requirements document and the approved Milstar program baseline.
Department of the Air Force	Considering the relatively low risk, the Secretary of the Air Force should give primary consideration to achieving cost savings by selecting one contractor to finish producing the necessary command post terminals.	Closed – Not Implemented DOD reported that the Air Force: (1) would give due consideration to cost as a principal selection criterion in its decision for procurement of the command post terminals; and (2) plans to fully comply with fiscal year 1993 authorization conference language directing a down-select to one contractor for completion of the command post terminal procurement. However, the Air Force determined that a split award to two contractors was in the best interest of the government and so notified the House and Senate Committees on Armed Services.
Department of Defense	The Secretary of Defense should ensure that separate criteria are established for critical results that must be attained by the Air Force prior to entering low-cost terminal engineering and manufacturing development and prior to entering low-cost terminal production.	Closed – Implemented DOD reported that, although the Air Force is in Phase I of the low-cost terminal engineering development program, criteria to select a single contractor for Phase II have been established. Despite this action, DOD reported that the approved Milstar plan now includes completion of Phase I only.
Department of Defense	Before approving additional production of Navy Milstar terminals, the Secretary of Defense should: (1) assess the results of the Navy's operational testing, particularly reliability, planned for completion in August 1992; and (2) determine the optimum annual full production quantities the Navy should procure under the existing production contract.	Closed – Implemented DOD reported that the: (1) Navy's independent operational test was successfully completed; and (2) Navy Acquisition Executive made his decision on full production in April 1993 after review of the independent testing agency operational test report and completion of an independent cost assessment.
Department of Defense	The Secretary of Defense should begin submitting comprehensive annual selected acquisition reports to Congress on the total Milstar program, as required by 10 U.S.C. 2432.	Closed – Implemented DOD began submitting Milstar selected acquisition reports to Congress in June 1993.

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