National Missile Defense:

Even With Increased Funding Technical and Schedule Risks Are High

NSIAD-98-153: Published: Jun 23, 1998. Publicly Released: Jul 8, 1998.

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Pursuant to a congressional request, GAO reviewed the National Missile Defense (NMD) program funding requirements and schedule and technical risks, focusing on: (1) why the Department of Defense (DOD) significantly increased the program's near-term funding in its May 1997 Quadrennial Defense Review; (2) how funding increases authorized and appropriated by Congress for the program in fiscal years 1996 through 1998 have been used or are planned to be used; and (3) DOD's planned level of future funding for the NMD program and planned uses for those funds.

GAO noted that: (1) DOD significantly increased its NMD funding requirements in May 1997 because more rigorous cost estimates, based on more detailed program requirements and plans, showed that the program could not be accomplished within previously projected funding levels; (2) the 3+3 NMD program was not sufficiently defined for detailed cost estimating when it initially changed from a technology readiness program to a deployment readiness program, and was designated a major defense acquisition program in April 1996; (3) the May 1997 Quadrennial Defense Review included the first program estimate based on detailed system descriptions, requirements, and plans; (4) funding increases provided by Congress in fiscal years 1996 through 1998 were used for risk reduction activities, such as: (a) retaining competition in the development of the exoatmospheric kill vehicle, considered one of the most technically challenging components of the system; (b) increasing the number of planned tests; and (c) purchasing additional spare hardware; (5) Congress increased funding for NMD because of concerns about the adequacy of funding to support the program; (6) the Ballistic Missile Defense Organization (BMDO) Director acknowledged in an April 1996 testimony that an additional $350 million a year could be used to reduce program risks; (7) future NMD funding requirements will depend in large part on the system design and architecture, and when and where it is deployed; (8) details on the specific system and location are not expected for some time; (9) program life-cycle costs ranged from $18.4 billion by fiscal year 2003 to $28.3 billion by fiscal year 2006; (10) since GAO's December 1997 report, DOD has increased funding and revised NMD program plans to mitigate schedule and technical risks; (11) however, program officials told GAO that even with the mitigation actions resulting from the increased funding, schedule and technical risks associated with a 2003 deployment remain high; (12) according to a February 1998 report of a panel of former senior military, government, and industry officials, successful execution of the 3+3 program on the planned schedule is highly unlikely; and (13) this panel concluded that the program would benefit from the earliest possible restructuring to contain the risk.

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