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The Air Force launched an acquisition program to develop and produce a revolutionary laser weapon system, known as the Airborne Laser, in 1996. Being developed for installation in a modified Boeing 747 aircraft, it is intended to destroy enemy ballistic missiles almost immediately after their launch. The Air Force originally estimated development costs at $2.5 billion and projected fielding of the system in 2006. However, by August 2001, the Air Force determined that the development cost estimate rose 50 percent to $3.7 billion, and the fielding date slipped to 2010. The Department of Defense transferred responsibility for the Airborne Laser in October 2001 to the Ballistic Missile Defense Organization. Subsequently, the Defense Secretary designated the Ballistic Missile Defense Organization as the Missile Defense Agency and granted the agency expanded responsibility and authority. The Air Force was unable to meet the Airborne Laser's original cost and schedule goals because it did not fully understand the level of effort that would be required to develop the critical system technology needed to meet the user's requirements. The Missile Defense Agency's new strategy for developing the Airborne Laser incorporates some knowledge-based practices that characterize successful programs. However, the agency has not established knowledge-based decision points and associated criteria for moving forward from technology development to product development and on to production. Without decision points and criteria, the agency risks beginning new and more costly activities before it has the knowledge to determine the money and time required to complete them and whether additional investment in those activities is warranted. This testimony summarizes a July report (see GAO-02-631).

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