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Defense Acquisitions: Missile Defense Program Instability Affects Reliability of Earned Value Management Data

GAO-10-676 Published: Jul 14, 2010. Publicly Released: Jul 14, 2010.
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By law, GAO is directed to assess the annual progress the Missile Defense Agency (MDA) made in developing and fielding the Ballistic Missile Defense System (BMDS). GAO issued its latest assessment of MDA's progress covering fiscal year 2009 in February 2010. This report supplements that assessment to provide further insight into MDA's prime contractor performance for fiscal year 2009. Prime contractors track earned value management (EVM) by making comparisons that inform the program as to whether the contractor is completing work at the cost budgeted and whether the work scheduled is being completed on time. Our analysis of contractor EVM data included examining contract performance reports for 14 BMDS contracts, reviewing the latest integrated baseline reviews, performing extensive analysis of data anomalies, and conducting interviews with Defense Contract Management Agency (DCMA) officials--the independent reviewers of MDA contractor EVM systems.


Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should direct MDA to resolve prime contractor data reliability issues by the beginning of fiscal year 2011 and, if MDA has not resolved the data reliability problems, determine the barriers preventing resolution and provide a report to Congress on: (1) the steps MDA is taking to make its contractor data sufficiently reliable, (2) how the data reliability issues affect MDA's ability to provide oversight of its contractors, and (3) the effect these issues have on MDA's ability to report contractor progress to others, including Congress.
Closed – Not Implemented
In providing comments on this report, the Department of Defense concurred with this recommendation and has closed this recommendation based on actions taken by MDA. However, our assessment is that corrective actions were not completed prior to the beginning of fiscal year 2011, as stipulated in our recommendation. While DOD stated that the Missile Defense Agency (MDA) considered its fiscal year 2009 prime contractor performance data to be reliable, the agency still chose to implement an agency-wide integrated baseline review (IBR) process through fiscal year 2010 and into fiscal 2011. Over a course of several months prior to fiscal year 2011, seven IBRs were conducted on prime and major subcontractors for the Ground-Based Midcourse Defense program element with three more scheduled for fiscal year 2011 - which is after the completion date set in the recommendation. Although MDA was confident that these IBRs, conducted with the Defense Contract Management Agency (DCMA), demonstrated the fidelity of the data, the failure of GMD's flight test (FTG-06a) in December 2010 ultimately led to a restructure of the program which would again necessitate new IBRs before the earned value management (EVM) data can be collected and the reliability assessed. The Targets and Countermeasures (TC) program element also conducted five IBRs through fiscal year 2010 and fiscal year 2011, with the onsite support of DCMA. Three more TC IBRs were planned for fiscal year 2011 which also exceeded the timeline set in our recommendation. DOD currently lists this recommendation as closed, citing the events listed above, MDA EVM review processes that the agency believes ensure contract data reliability, and MDA leadership reviews of contractor progress using EVM data in quarterly Baseline Execution Reviews.

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