Missile Defense: Opportunity to Refocus on Strengthening Acquisition Management
What GAO Found
Although the Missile Defense Agency (MDA) has made some progress, the new MDA Director faces challenges developing and deploying new systems to achieve increasingly integrated capabilities as well as supporting and upgrading deployed systems while providing decision makers in the Department of Defense (DOD) and Congress with key oversight information in an era of fiscal constraints.
Challenge: Improve Investment Decisions
Determining the most promising and cost effective new missile defense systems to buy--considering technical feasibility and cost--remains a challenge for MDA. While MDA has conducted some analyses that consider alternatives in selecting which acquisitions to pursue, it has not conducted robust analyses of alternatives for two of its new programs. Because of its acquisition flexibilities, MDA is not required to do so. Robust analyses, however, could be particularly useful to DOD and congressional decision makers as they decide how to manage the portfolio of missile defense acquisitions. GAO has reported in the past that without analyses of alternatives, programs may not select the best solution for the warfighter, are at risk for cost increases, and can face schedule delays.
Challenge: Expand on Steps Taken to Place Investments on a Sound Footing
In the past year, MDA gained important knowledge by successfully conducting several important tests, including a test to show how well its systems will operate together. MDA has also taken steps to lower the acquisition risks of two newer programs by adding more development time. However, development issues discovered after three programs prematurely committed to production continue to disrupt both interceptor production and flight test schedules. In addition, two other programs plan to make premature commitments to production before testing confirms their designs work as intended. MDA is planning to fly targets for the first time in its first operational test using several systems, adding risk that key information may not be obtained in this major test.
Challenge: Ensure Program Baselines Support Oversight
While MDA has made substantial improvements to the clarity of its cost and schedule baselines since first reporting them in 2010, they are still not useful for decision makers to gauge progress. For example, the information they include is not sufficiently comprehensive because they do not include operation and support costs from the military services. By not including these costs, the life cycle costs for some MDA programs could be significantly understated.
Challenge: Developing and Deploying U.S. Missile Defense in Europe
DOD declared the first major deployment of U.S. missile defense in Europe operational in December 2011, but MDA is faced with resolving some issues to provide the full capability and is facing delays to some systems planned in each of the next three major deployments. MDA has also struggled for years to develop the tools--the models and simulations--to credibly assess operational performance of systems before they are deployed. It recently committed to a new approach to resolve this problem.
Why GAO Did This Study
Since 2002 MDA has spent approximately $90 billion to provide protection from enemy ballistic missiles by developing battle management systems, sensors that identify incoming threats, and missiles to intercept them. MDA plans to spend about $8 billion per year through 2017. For nearly a decade, we have reported on MDA's progress and challenges in developing and fielding the Ballistic Missile Defense System.
GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through acquisition baselines. This report examines the agency's progress and remaining challenges in (1) selecting new programs in which to invest; (2) putting programs on a sound development path; (3) establishing baselines that support oversight; and (4) developing and deploying U.S. missile defense in Europe for defense of Europe and the United States. To do this, GAO examined MDA's acquisition reports, analyzed baselines reported over several years to discern progress, and interviewed a wide range of DOD and MDA officials.
Recommendations
GAO makes four recommendations to DOD to ensure MDA (1) fully assesses alternatives before selecting investments, (2) takes steps to reduce the risk that unproven target missiles can disrupt key tests, (3) reports full program costs, and (4) stabilizes acquisition baselines. DOD concurred with two recommendations and partially concurred with two, stating the decision to perform target risk reduction flight tests should be weighed against other programmatic factors and that its current forum for reporting MDA program costs should not include non-MDA funding. GAO continues to believe the recommendations are valid as discussed in this report.
For more information- contact Cristina Chaplain at (202) 512-4841 or chaplainc@gao.gov.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to undertake robust alternatives analyses for new major missile defense efforts currently underway, including the SM-3 Block IIB, and before embarking on any other major new missile defense programs. In particular, such analyses should consider a broad range of alternatives. |
DOD concurred with our recommendation that MDA undertake robust alternative analyses for new efforts currently underway and before embarking on any other new major programs. With respect to new efforts currently underway, MDA did not conduct such analyses for the Precision Tracking Space System and Aegis Standard Missile-3 Block IIB programs because DOD cancelled both in April 2013. However, in 2015 MDA began alternative analyses for the homeland missile defense and ballistic missile defense sensor architecture, but did so in accordance with specific direction in the National Defense Authorization Act for Fiscal Year 2014. As of August 2017, MDA has not released the final reports for either of these analyses due to the lack of a sufficiency review from the Director for Cost Assessment and Performance Evaluation, which has noted setbacks due to staffing levels and competing priorities. Despite the lack of final reports, MDA officials briefed the results of the analyses to congressional defense committees and senior DOD leadership and used the results as a basis for the decision to pursue the Ground-based Midcourse Defense's Redesigned Kill Vehicle. Consequently, we believe that MDA met the intention of our recommendation with respect to new efforts currently underway, although it was action taken based on explicit direction from Congress. Whether or not MDA will perform such alternatives analyses on any other new major programs remains to be seen and we will continue to monitor its progress in this regard.
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| Department of Defense | In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to add risk reduction non-intercept flight tests for each new type of target missiles developed. |
Despite partially concurring with our recommendation in 2013, as of August 2019, MDA has not adjusted its test plans to include risk-reduction flight tests (i.e., non-intercept) for new target types prior to their inclusion in an intercept flight test. MDA officials have not done so because such decisions must be balanced against potential cost, schedule, and programmatic impacts. Also, MDA officials contest that flight test preparation processes, like dry-runs and quality control checks, are sufficient to discover issues prior to an intercept test. While test preparation processes are valuable, they are not a substitute for risk reduction flight tests. This was proven in June 2015 when MDA launched a new intermediate-range target that had 6 different test preparation processes but not a risk-reduction flight test and the target failed, which resulted in significant cost, schedule, and programmatic impacts. Moving forward, despite the impacts from such target failures, MDA plans to use a new medium-range target during a major intercept test for the Terminal High Altitude Area Defense (THAAD) program in the fourth quarter of fiscal year 2019, in support of an urgent operational need for the warfighter deployed to Korea. The use of a new target during this flight test significantly increases the risk that it will not go as planned, which could result in a costly retest and defer the demonstration of urgent capabilities needed by the warfighter. We maintain our stance that risk reduction flight tests would reduce the risk for the associated test and the overall flight test plan; however, MDA's actions to-date suggest that it has no intention of including risk-reduction flight tests for new targets.
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| Department of Defense |
Priority Rec.
In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to include in its resource baseline cost estimates all life cycle costs, specifically the operations and support costs, from the military services in order to provide decision makers with the full costs of ballistic missile defense systems. |
DOD partially agreed and noted that both MDA and the military services have operations and sustainment costs for the weapon systems that are part of the Missile Defense System. In 2020, DOD requested closure of this recommendation as implemented, citing MDA's preparation of joint cost estimates (JCE) with the military services to capture their respective operations and sustainment costs. In February 2022, however, we found that not all applicable weapon systems had a JCE as required by policy, some existing JCEs were outdated, and none of the JCEs were independently verified by DOD's Office of Cost Assessment and Program Evaluation, as advised by policy. We also found that the operations and sustainment costs for weapon systems without a JCE were captured in multiple and disparate sources. As such, it was difficult or, in some instances, impossible for us to quantify the full life-cycle costs for certain weapon systems. Accordingly, we advised MDA to add citations to the JCEs or other source(s) for the operations and sustainment costs in its annual baseline reporting; MDA's baselining statute was subsequently amended to include a similar requirement. In February 2023, MDA officials told us they added some initial information in the 2022 annual baseline reporting. However, more information is needed to fully comply with law and meet the intent of our recommendation. MDA officials also told us that they are coordinating with the military services to gain access to their cost estimates, which will also need to be cited in the baseline reporting.
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| Department of Defense |
Priority Rec.
In order to strengthen investment decisions, place the chosen investments on a sound acquisition footing, provide a better means of tracking investment progress, and improve the management and transparency of the U.S. missile defense approach in Europe, the Secretary of Defense should direct MDA's new Director to stabilize the acquisition baselines, so that meaningful comparisons can be made over time that support oversight of those acquisitions. |
DOD agreed with our recommendation, but noted that MDA has the authority to adjust program baselines to remain responsive to evolving requirements and threats. We acknowledged MDA's authority to adjust program baselines and explained that our recommendation did not intend to limit such authority, but rather address issues we found, such as shifting content between baselines. In 2020, DOD requested closure of this recommendation as implemented, citing MDA's addition of a list of significant changes to its annual baseline reporting that MDA officials say can be collated to reflect a program's performance over time. In February 2022, however, we found that MDA continues to make adjustments to its program baselines that are not captured in its list of significant changes, complicating or preventing the collation of adjustments to understand a program's performance. For example, MDA shifted costs (1) from one program baseline to another, (2) to an effort that had not yet been baselined, and (3) outside the agency's cost estimates entirely. Thus, we advised MDA to explore and take appropriate corrective actions to rectify the continued traceability issues with its program baselines and ensure they are a useful oversight tool for Congress. In February 2023, MDA officials told us they recognize the importance of this traceability and are continuing to work on reconciling program baselines to when they were first established and intend for any adjustments moving forward to be clear and traceable. However, MDA officials expect these planned actions to take a year or more to complete.
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