This is the accessible text file for GAO report number GAO-12-563T 
entitled 'Space Acquisitions: DOD Faces Challenges in Fully Realizing 
Benefits of Satellite Acquisition Improvements' which was released on 
March 21, 2012. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as 
part of a longer term project to improve GAO products' accessibility. 
Every attempt has been made to maintain the structural and data 
integrity of the original printed product. Accessibility features, 
such as text descriptions of tables, consecutively numbered footnotes 
placed at the end of the file, and the text of agency comment letters, 
are provided but may not exactly duplicate the presentation or format 
of the printed version. The portable document format (PDF) file is an 
exact electronic replica of the printed version. We welcome your 
feedback. Please E-mail your comments regarding the contents or 
accessibility features of this document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

United States Government Accountability Office: 
GAO: 

Testimony: 

Before the Subcommittee on Strategic Forces, Committee on Armed 
Services, U.S. Senate: 

For Release on Delivery: 
Expected at 2:30 p.m. EDT:
Wednesday, March 21, 2012: 

Space Acquisitions: 

DOD Faces Challenges in Fully Realizing Benefits of Satellite 
Acquisition Improvements: 

Statement of Cristina T. Chaplain: 
Director, Acquisition and Sourcing Management: 

GAO-12-563T: 

GAO Highlights: 

Highlights of GAO-12-563T, a testimony before the Subcommittee on 
Strategic Forces, Committee on Armed Services, U.S. Senate 
View GAO-12-563T. For more information, contact Cristina Chaplain at 
(202) 512-4841 or chaplainc@gao.gov. 

Why GAO Did This Study: 

Each year, the DOD spends billions on large space acquisition 
programs, which have in the past experienced cost and schedule 
overruns and increased technical risk. At present, though, the worst 
of these problems may be over, and programs long troubled are finally 
being launched. Challenges persist, but they are less significant than 
they were. With today’s fiscal constraints, however, DOD must find 
ways to keep its new major space acquisitions on track, as operating 
in space is expensive and DOD is still replenishing legacy programs 
like missile warning, protected communications, and environmental 
monitoring. Significant barriers exist to ensuring such investments 
are optimized. 

To address the progress DOD has made this year, this testimony will 
focus on (1) the current status of space system acquisitions; (2) 
results of GAO’s space-related reviews this past year; (3) actions 
taken to address DOD space acquisition problems; and (4) remaining 
challenges that stand in the way of DOD fully realizing the benefits 
of satellite acquisition improvements. This testimony is based on 
previously issued GAO products as well as analysis of DOD funding 
estimates. 

GAO does not make recommendations in this testimony. However, in 
previous reports GAO has generally recommended that DOD adopt best 
practices for developing space systems such as separating technology 
development from product development. DOD is in the process of 
implementing such practices. 

What GAO Found: 

Last year, GAO testified that though acquisition problems still 
existed in many space programs, the Department of Defense (DOD) was 
beginning to launch satellites that had long been lagging behind 
schedule and it had taken positive actions to instill better practices 
and more focused leadership for space. Progress has continued. Over 
the past year, DOD launched the first Navy Mobile User Objective 
System (MUOS) satellite; the first, after a nine-year delay, of six 
Space Based Infrared System (SBIRS) geosynchronous earth orbit (GEO) 
satellites; and the first Advanced Extremely High Frequency (AEHF) 
satellite—all of which will bring important capability to the 
warfighter. While these launches represent solid progress, there have 
also been some drawbacks. For instance, the second Global Positioning 
System (GPS) IIF satellite experienced technical problems that could 
shorten its operational lifetime. The cost of the first two satellites 
GPS III is at least18 percent higher than first estimated, up to $1.6 
billion today. A 1-year delay is expected by SBIRS program officials 
on production of the 3rd and 4th GEO satellites along with a $438 
million cost overrun. And, a termination of the Defense Weather 
Satellite System (DWSS) may result in a capability gap. Moreover, even 
though problems have been overcome, DOD must still contend with the 
effects of its previous difficulties on its investment portfolio. 

Recent GAO reviews highlight other difficulties facing DOD space 
programs. GAO’s review of a new acquisition strategy for the Evolved 
Expendable Launch Vehicle program, for instance, identified a need for 
more knowledge about the industrial base as well as cost and pricing 
in order to optimize a sizable investment in launch vehicles. GAO’s 
review of parts quality problems in major DOD, Missile Defense Agency, 
and National Aeronautics and Space Administration (NASA) programs 
illustrated that acquisition reforms need to be buttressed with closer 
attention to the quality of piece parts as issues have vexed most 
major programs. GAO, however, credited the agencies with instituting 
collaborative efforts to address supplier quality. 

Though it still faces an array of challenges, DOD continues to work to 
ensure its space programs are more executable and produce a better 
return on investment. For example, DOD intends to follow incremental 
or evolutionary acquisition processes and it has acted to streamline 
management and oversight of the national security space enterprise. 
The agency has taken steps toward reforming the defense acquisition 
system to help its programs to meet planned cost and schedule 
objectives. Because DOD intends to address the root causes of 
problems, it will take time to determine if these actions are 
successful or need further actions on how best to lead, organize, and 
support space activities. 

Moreover, there are significant barriers to ensuring investments are 
optimized. These include fragmented leadership, the rising cost of 
launch, uncertainty about the future for technology advancements, and 
disconnects between the fielding of satellites with user equipment and 
ground systems needed to take advantage of expensive new capabilities. 
Addressing all of these challenges are needed to maintain space 
superiority in an era of fiscal austerity, but their resolution also 
requires the participation and cooperation of all the military 
services, the intelligence community, and agencies such as NASA and 
the National Oceanic and Atmospheric Administration. 

View [hyperlink, http://www.gao.gov/products/GAO-12-563T]. For more 
information, contact Cristina Chaplain at (202) 512-4841 or 
chaplainc@gao.gov. 

[End of section] 

Chairman Nelson, Ranking Member Sessions, and Members of the 
Subcommittee: 

[End of section] 

I am pleased to be here today to discuss the Department of Defense's 
(DOD) space acquisitions. Each year, billions of dollars are spent by 
DOD to acquire space-based capabilities that support military and 
other government operations--such as intelligence, reconnaissance and 
surveillance, and homeland security--and to enable transformation of 
the way DOD collects and disseminates information. The worst of DOD's 
space acquisition problems may be behind the department, as programs 
long plagued by serious cost and schedule overruns are finally being 
launched. Though acquisition challenges persist, they are not as 
widespread and significant as they were several years ago, and to its 
credit, DOD has taken an array of actions to reduce risks. The 
challenge DOD now faces is how best to keep its major space systems 
acquisitions on track in light of fiscal constraints. Operating in 
space is expensive and DOD is still in the process of replenishing 
legacy capabilities, such as missile warning, protected 
communications, and environmental monitoring. While upgrading existing 
satellite constellations amid declining budgets is a daunting 
challenge, there are significant barriers to ensuring investments are 
optimized, including fragmented leadership, the rising cost of launch, 
uncertainty about the future for technology advancements, and 
disconnects between the fielding of satellites with user equipment and 
ground systems needed to take advantage of expensive new capabilities. 
In addition to discussing the progress DOD has made this year, my 
testimony will focus on these challenges as they stand in the way of 
DOD fully realizing the benefits of satellite acquisition improvements. 

The objectives of this testimony are to address (1) the current status 
of space system acquisitions, (2) the results of GAO's space-related 
reviews this past year, (3) actions being taken to address DOD space 
acquisition problems, and (4) remaining challenges. In preparing this 
testimony, we relied on previous GAO reports on (1) space programs and 
(2) weapon system acquisition best practices as well as ongoing work 
on satellite control networks.[Footnote 1] We also relied on work 
performed in support of our annual weapons system assessments, and 
analyzed DOD funding estimates to assess cost increases and investment 
trends for selected major space system acquisition programs. We 
obtained updates on improvement actions from the Office of the 
Secretary of Defense and Air Force. We also analyzed recent funding 
estimates for space programs. More information on our scope and 
methodology is available in the issued reports. The work that supports 
this statement was performed in accordance with generally accepted 
government auditing standards. Those standards require that we plan 
and perform the audit to obtain sufficient, appropriate evidence to 
provide a reasonable basis for our findings and conclusions based on 
our audit objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

Background: 

The past decade has been troubling for defense space acquisitions. 
Despite years of significant investment, most of the DOD large space 
acquisition programs collectively experienced billions of dollars in 
cost increases, stretched schedules, and increased technical risks. 
Significant schedule delays of as much as 9 years have resulted in 
potential capability gaps in missile warning, military communications, 
and weather monitoring. Unit costs for one of the most troubled 
programs, the Space Based Infrared System (SBIRS), for instance, have 
climbed about 231 percent to over $3 billion per satellite. Moreover, 
the first satellite was launched about 9 years later than predicted. 
Similarly, by the end of fiscal year 2010, the U.S. government had 
spent 16 years and over $5 billion to develop the National Polar-
orbiting Operational Environmental Satellite System (NPOESS), but had 
not launched a single satellite. In February 2010, citing the 
program's cost overruns, schedule delays, and management problems, the 
White House announced that the NPOESS tri-agency structure would be 
eliminated and the program would be restructured by splitting 
procurements and responsibilities. Other programs, such as the 
Transformational Satellite Communications System, were canceled 
several years earlier because they were found to be too highly 
ambitious and not affordable at a time when the DOD was struggling to 
address critical acquisition problems elsewhere in the space portfolio. 

The Current Status of Space System Acquisitions: 

In 2011, we testified that though problems still existed on many 
programs, DOD was beginning to make progress by finally launching 
satellites that had been lagging behind schedule.[Footnote 2] These 
included the Missile Defense Agency's (MDA) Space Tracking and 
Surveillance System (STSS), the Air Force's first Global Positioning 
System (GPS) IIF satellite and the first Advanced Extremely High 
Frequency (AEHF) satellite although AEHF had not yet reached its final 
planned orbit at the time we testified because of an anomaly with the 
satellite's propulsion system. At the same time, however, several 
programs still in development were at risk of cost and schedule 
growth, such as the Joint Space Operations Center Mission System (JMS). 

Progress has continued since we testified last year. For instance: 

* DOD launched the second GPS IIF satellite in July 2011, and the 
third is scheduled to launch in September 2012. 

* DOD launched the first of the Navy's Mobile User Objective System 
(MUOS) satellites in February 2012, and the second is scheduled for 
launch in July 2013. 

* The first of six SBIRS geosynchronous earth orbit (GEO) satellites 
successfully launched in May 2011, after a roughly 9 year delay. 
[Footnote 3] The second SBIRS satellite is planned for delivery in 
spring 2012 and may launch late this year or early 2013. 

* The Evolved Expendable Launch Vehicle (EELV) program continues to 
successfully launch DOD and National Aeronautics and Space 
Administration (NASA) satellites, and is planning 11 launches in 2012. 

* The first AEHF satellite reached its intended orbit after having 
experienced propulsion trouble after launch. The second AEHF satellite 
is scheduled to launch in April 2012. 

While these launches represent solid progress, there have been some 
drawbacks to the programs that have launched their first satellites. 
For instance, the second GPS IIF satellite experienced technical 
problems that could possibly shorten the satellite's operational 
lifetime. Also, though a MUOS satellite has been launched, the DOD 
estimates that over 90 percent of the first satellite's on-orbit 
capabilities will likely be initially underutilized because of delays 
in development of the compatible Joint Tactical Radio System (JTRS) 
terminals. 

Moreover, other acquisition programs are experiencing cost and 
schedule growth, though not to the extent yet as those experienced in 
the last decades. For instance, 

* The GPS III program is currently experiencing cost growth and the 
contractor is behind schedule. In November 2011, the contractor's 
estimated cost at completion for the development and production of the 
first two satellites was over $1.4 billion or 18 percent greater than 
originally estimated; the program office estimated the cost to be 
about $1.6 billion. The GPS III program has cited multiple reasons for 
the projected cost increases including reductions in the program's 
production rate; test equipment delays; and inefficiencies in the 
development of both the navigation and communication payload and 
satellite bus. The contractor is also behind in completing some tasks 
on schedule, but the program does not expect these delays to affect 
the launch of the first satellite. 

* Though the first SBIRS satellite has launched, and the second is 
close to delivery, program officials are predicting a 1-year delay on 
production of the 3rd and 4th GEO satellites due in part to technical 
challenges, parts obsolescence and test failures. Along with the 
production delay, program officials are predicting a $438 million cost 
overrun for the 3rd and 4th GEO satellites. 

* The Defense Weather Satellite System (DWSS), which was the Air 
Force's follow-on to the restructured NPOESS, was terminated in fiscal 
year 2012. The restructuring of NPOESS and the subsequent cancellation 
of DWSS have resulted in a potential capability gap for weather and 
environmental monitoring. 

Table 1 describes the status of the space programs we have been 
tracking in more detail. 

Table 1: Status of Major Space Acquisition Efforts: 

Programs still susceptible to cost and schedule overruns: 

GPS IIF; (positioning, navigation, and timing): 
The second Global Positioning System (GPS) IIF satellite, designed to 
upgrade timing and navigation accuracy and add a new signal for 
civilian use, launched on July 16, 2011, and the third is expected to 
launch in September of 2012. Approximately one month after they were 
enabled, the second IIF satellite's Cesium clock--one of three atomic 
frequency standard clocks onboard that provide GPS accuracy through 
redundancy--failed. An investigation identified design and 
manufacturing issues, and the GPS Directorate is exploring options, 
including replacing the Cesium clocks already installed on the 
remaining IIF satellites, 3 through 7. The cost and schedule impacts 
are as yet undetermined. According to the GPS directorate, the cost of 
the GPS IIF program, as of April 2011, was at $2.6 billion--more than 
triple the original cost estimate of $729 million. The IIF satellites' 
development challenges were mostly responsible for the 4 1/2-year 
delay in the launch of the first GPS IIF satellite to May 2010. 

AEHF (communications): 
On August 14, 2010, the Air Force launched the first of six planned 
Advanced Extremely High Frequency (AEHF) satellites (AEHF-1) to 
replenish the existing Milstar system with increased strategic and 
tactical capabilities for warfighters. Employing a novel combination 
of chemical and electric propulsion in a two-phase orbit raising 
procedure, AEHF-1 was expected to reach its operational orbit in about 
three months. However, an anomaly with one of the spacecraft's three 
propulsion systems delayed the arrival on orbit by about 13 months. 
The anomaly was detected when the spacecraft's Liquid Apogee Engine 
(LAE)--a bi-propellant system designed to provide the thrust for the 
spacecraft's initial orbit transfer maneuvers--faltered and was 
declared unusable. No longer able to use the more powerful LAE for the 
first phase of orbit raising as intended, the program office in 
conjunction with the contractor and user community, decided to achieve 
the intended orbit using AEHF-1's two remaining, less powerful 
propulsion systems. The alternate propulsion was engaged and the 
spacecraft's rate of ascent was calculated to conserve fuel and 
maintain its original 14-year operational life expectancy. AEHF-1 
reached its intended orbit in late October 2011, and began undergoing 
what is expected to be about 100 days of testing. The problem with 
AEHF-1 was not identified on either AEHF-2, which has been delivered 
and is on schedule for an April 27, 2012 launch, or AEHF-3, which is 
currently in storage and expected to launch in the fall of 2013. The 
fourth satellite is under contract and scheduled to be available for 
launch in 2017. Plans to procure the last two AEHF satellites--
tentatively expected to be available for launch in 2018 and 2019--were 
announced following the 2009 cancellation of the Transformational 
Satellite Communications System--the planned follow-on to AEHF. 

MUOS (communications): 
The first Mobile User Objective System (MUOS) communications satellite 
was launched on February 24, 2012, and is expected to begin on-orbit 
operations in May 2012--26 months later than planned at development 
start. While the delivery of the MUOS satellite's ultra-high frequency 
(UHF) communication capabilities is predicted to help address the 
potential capability gap caused by the unexpected failure of two 
legacy satellites, there is a risk the satellite's on-orbit 
capabilities will initially be significantly underutilized. Over 90 
percent of MUOS's planned capability--including increases in the 
amount of data that can be transmitted and the ability to transmit 
both voice and data--is enabled by compatible Joint Tactical Radio 
System (JTRS) terminals and by a new waveform. Operational testing of 
the JTRS terminals has been delayed until February 2014, leading the 
government to form an independent review team to assess potential 
options for completing development of the MUOS waveform. Following a 
2009 Navy-initiated review, the program developed new cost and 
schedule baselines. However, the MUOS acquisition program baseline has 
been under revision since December 2009, and has not yet been approved. 

GPS III; (positioning, navigation, and timing): 
GPS is a constellation of multiple generations of GPS satellites that 
provide global position, navigation and timing capability to both 
military and civil users worldwide. In 2008 the GPS directorate 
established a program to develop the next generation of GPS satellites 
named GPS III. GPS III satellites are designed to have the 
capabilities found on GPS IIF satellites plus increases in jam 
resistance, accuracy, and design life; a new civil signal compatible 
with the European Galileo system; and a satellite bus capable of 
supporting future satellite capability additions. The GPS III program 
is to use an acquisition strategy designed to reduce risk and to avoid 
or correct problems that plagued the GPS IIF program and caused a more 
than 4 year delay in the launch of the first IIF satellite. The GPS 
III program plans to maintain stable requirements; have rigorous 
contractor oversight; and employ a structured systems engineering 
approach which includes features such as trade studies, advanced 
component development and prototype, and incremental delivery of 
mature technologies. One of the program's risk reduction efforts 
includes research on dual launch initiatives to support two satellites 
launching on one launch vehicle. The GPS program office attributes 
current cost growth issues to reductions in the program's production 
rate, test equipment delays, and inefficiencies in the development of 
both the navigation and communication payload and satellite bus. The 
program office and contractor have estimated the cost to complete the 
development and production of the first two GPS III satellites at $1.6 
billion and $1.4 billion respectively, which is 18 percent or more 
than originally estimated. The first GPS III satellite is expected to 
be ready for launch in May of 2014. 

Development initiatives getting under way: 

JMS; (space situational awareness): 
Space Situational Awareness (SSA)--the knowledge and characterization 
of space objects and the environment on which space operations depend--
is increasingly important to the protection of U.S. space forces from 
space weather effects, space debris, and attack. The Joint Space 
Operations Center Mission System (JMS) program is a key component of 
SSA and one of two major upcoming acquisition efforts (the other is 
Space Fence) expected to fill the growing need to replace SSA 
capability from fragmented legacy systems and to provide new, advanced 
SSA capability. The JMS program is designed to replace the Space 
Defense Operations Center (SPADOC) currently in use but nearing the 
end of its operational lifetime, and provide mission services to 
support and enable the command and control of space forces. In early 
2011, the Office of the Under Secretary of Defense for Acquisition, 
Technology and Logistics commissioned an independent program 
assessment of the JMS program which, at that time, had plans to use 
immature technologies and to deliver key capabilities in a single, 
large increment, versus smaller and more manageable increments. In May 
2011, in response to concerns raised by the assessment, the Air Force 
announced the transfer of JMS to the management group responsible for 
most of the service's space-related acquisition and the implementation 
of a new tailored incremental information technology acquisition 
approach. According to officials at the new JMS program office, the 
revised approach is modeled on tenets from DOD's 2007 Defense 
Acquisition Transformation Report to Congress and includes plans to 
maximize the use of commercial-off-the-shelf and government-off-the-
shelf solutions, to leverage investment in existing government 
prototypes and industry applications, and to utilize personnel from 
other services or federal labs who have expertise in relevant 
technologies and systems. 

Space Fence; (space situational awareness): 
Space Fence is being designed as a system of geographically dispersed 
ground-based radars. It is intended to replace and expand coverage 
currently provided by the aging Space Surveillance System by using 
higher radio frequencies that will allow it to detect and track 
smaller Earth-orbiting objects. Like JMS, Space Fence is a key program 
to help meet the nation's SSA mission and represents the current 
largest investment in SSA at an estimated cost of about $3 billion to 
complete. Space Fence program officials have stated that Space Fence 
will be one of the largest phased array radars ever built. The size of 
the radar is expected to provide significant power for the 
transmission and reception of data but may also pose increased risk 
related to the affordable integration of technology components. To 
mitigate this risk, the Space Fence acquisition strategy includes 
maintaining competition through technology development and having two 
firms under contract doing parallel prototype development. This 
process allows program officials to evaluate contractor's designs and 
associated costs while moving Space Fence's four critical technologies 
and backup technologies toward maturity, before the program enters 
system development which is scheduled for later this year with the 
award of a single contract. Though earlier plans called for the first 
Space Fence site to achieve initial operational capability in 2015, 
estimates show that at current funding levels, this capability will 
not occur before 2017. 

PTSS; (ballistic missile defense): 
The Precision Tracking Space System (PTSS) is being developed as an 
operational component of the Missile Defense Agency's (MDA) Ballistic 
Missile Defense System and, according to MDA, delays in fielding a 
PTSS constellation in fiscal year 2018 would significantly affect the 
implementation of the Phased Adaptive Approach (PAA) to defend Europe 
and the United States against regional ballistic missile attacks. We 
have on-going MDA work and have initial concerns regarding schedule 
optimism, concurrency, and potential cost estimates. We plan to issue 
a report on the results of our review in April 2012. 

SBSS; (space situational awareness): 
On February 23, 2011, the Space Based Space Surveillance (SBSS) 
satellite began full operational duty. The satellite was launched in 
September 2010, to provide a follow-on capability to the Midcourse 
Space Experiment/Space Based Visible sensor satellite, which ended its 
mission in July 2008. According to program and contracting officials, 
SBSS' 24-hour, all-weather, all-geography capability provides an 
increase in space situational awareness--the ability to search, 
detect, and track objects in space--by a factor of three compared to 
ground based tools. Air Force stated that the timing of the SBSS 
launch and the magnitude of initial cost estimates for the proposed 
SBSS follow-on led to the decision not to include funding for this 
effort in their fiscal year 2012 budget request. In fiscal year 2013 
the Air Force plans to initiate acquisition strategy plans for the 
SBSS follow-on, including preparing for the competitive award of a 
fixed price contract meeting or exceeding SBSS Block 10 requirements. 

NPOESS/DWSS/WSF; (climate and weather monitoring): 
The National Polar-orbiting Operational Environmental Satellite System 
(NPOESS) was planned to be a state-of-the-art, environment-monitoring 
satellite system that would replace two existing polar-orbiting 
environmental satellite systems--one managed by the Department of 
Commerce's National Oceanic and Atmospheric Administration (NOAA) and 
the other by the Department of Defense (DOD)/U.S. Air Force. The 
NPOESS program was jointly managed by NOAA, DOD/Air Force, and the 
National Aeronautics and Space Administration (NASA), and considered 
critical to the nation's weather forecasting and climate monitoring 
needs through the year 2026. In February 2010, the White House's 
Office of Science and Technology Policy restructured the NPOESS 
program to address continuing cost, schedule, management, and 
technical challenges. Furthermore, DOD/Air Force and NOAA/NASA were 
directed to plan and acquire their own replacement satellite systems. 
The Air Force initiated preliminary efforts on the Defense Weather 
Satellite System (DWSS) as its next-generation polar-orbiting 
environmental satellite system with primary earth coverage in the 
early morning. To reduce development risks and lower acquisition 
costs, the Air Force planned to leverage the billions of dollars 
invested in the NPOESS program. Furthermore, to ensure continued 
coverage, the Air Force had planned to have DWSS satellites available 
for launch in 2018 and 2021. However, in fiscal year 2012, DWSS was 
terminated per Congressional direction, and DOD/Air Force budgeted for 
a new program called the Weather Satellite Follow-on (WSF). Planned 
program activities include a requirements analysis and an analysis of 
alternatives. Until the DOD/Air Force transitions from its current 
Defense Meteorological Satellite Program (DMSP) satellites to a follow-
on system, DOD/Air Force plans to continue utilizing the remaining 
DMSP satellites to meet its weather requirements. 

Source: GAO analysis of DOD data and previous GAO reports. 

[End of table] 

Acquisition Challenges Have Reverberating Effects on Investment 
Portfolio: 

Even though DOD has finally overcome some technical and production 
difficulties and begun to launch high risk satellites such as SBIRS 
and AEHF, the department is still contending with the effects of their 
significant cost growth on its investment portfolio. Figure 1 compares 
original cost estimates to current cost estimates for the broader 
portfolio of major space acquisitions for fiscal years 2011 through 
2016. 

Figure 1: Comparison between Original Cost Estimates and Current Cost 
Estimates for Selected Major Space Acquisition Programs for Fiscal 
Years 2011 through 2016: 

[Refer to PDF for image: multiple line graph] 

Fiscal year: 2011; 
Original cost estimate: $1.171 billion; 
Current cost estimate: $4.118 billion. 

Fiscal year: 2012; 
Original cost estimate: $1.361 billion; 
Current cost estimate: $3.795 billion. 

Fiscal year: 2013; 
Original cost estimate: $737.5 million; 
Current cost estimate: $2.806 billion.  

Fiscal year: 2014; 
Original cost estimate: $241.9 million; 
Current cost estimate: $2.051 billion. 

Fiscal year: 2015; 
Original cost estimate: $68.4 million; 
Current cost estimate: $1.264 billion. 

Fiscal year: 2016; 
Original cost estimate: $35.0 million; 
Current cost estimate: $1.199 billion. 

Cumulative cost increase: $11.6 billion. 

Source: GAO analysis of DOD data. 

Note: Includes Advanced Extremely High Frequency, Global Broadcast 
System, Global Positioning System II and III, Mobile User Objective 
System, Space Based Infrared System, and Wideband Global SATCOM. This 
chart does not include the Evolved Expendable Launch Vehicle, and 
planned new space acquisition efforts--such as Joint Space Operations 
Center Mission System, Space Based Space Surveillance Follow-on, the 
Weather Satellite Follow-on, or Space Fence--for which total cost data 
were unavailable. 

[End of figure] 

A long-standing problem in DOD space acquisitions is that program and 
unit costs tend to go up significantly from initial cost estimates, 
and the gap between original and current estimates shows that DOD has 
fewer dollars available to invest in new programs or add to existing 
ones. In fact, estimated costs for the major space acquisition 
programs have increased by about $11.6 billion--321 percent--from 
initial estimates for fiscal years 2011 through 2016.[Footnote 4] It 
should also be noted that the declining investment in the later years 
is the result of mature programs that have planned lower out-year 
funding, cancellation of a major space acquisition program and several 
development efforts, and the exclusion of several major space 
acquisition efforts for which total cost data were unavailable. These 
include the Space Fence, Space Based Space Surveillance, and the 
Defense Weather Satellite effort. 

GAO Space-Related Reviews over the Past Year: 

Over the past year, we have reported on of the need for sound and 
sufficient information for the new DOD acquisition strategy for the 
EELV program; parts quality problems in major DOD, MDA, and NASA 
programs; and greater content and coordination in the space Science 
and Technology (S&T) strategy. We are also conducting a review of 
satellite operations and have briefed Defense authorization and 
appropriations committees on our findings. These reviews, discussed 
further below, highlight both the successes and challenges that have 
faced the DOD space community as it has completed or sought to 
complete problematic legacy efforts and deliver modernized 
capabilities. 

Evolved Expendable Launch Vehicle Acquisition Strategy: 

DOD's EELV program serves a vital mission of placing critical national 
security and civilian satellites into their required orbits. It is 
also on the brink of major changes. In 2009, the Air Force and the 
National Reconnaissance Office (NRO) determined that the current 
approach for acquiring EELV launch vehicles was likely not the best 
business model and decided that a new acquisition strategy needed to 
be developed. This strategy favors committing the government to a 
longer span of purchases and to more certainty in the number of 
vehicles acquired to help stabilize the industrial base. Such a change 
is significant as the DOD and the NRO plan to spend about $15 billion 
to acquire launch services from fiscal year 2013 to 2017 and 
commercial companies other than the current provider, United Launch 
Alliance, would like to become launch service providers to the 
government. We were asked to review and assess whether DOD has the 
knowledge it needs to develop the new strategy, which has subsequently 
been released, and to identify issues that could benefit future launch 
acquisitions. 

We found that DOD lacked critical knowledge needed to develop a new 
acquisition strategy.[Footnote 5] For example, program officials, 
recent launch studies, and the prime contractor all cited a 
diminishing launch industrial base as a risk to the mission success of 
the program, but DOD analysis supporting this condition was minimal. 
Moreover, under the new acquisition strategy, contracting officials 
may have difficulty assessing fair and reasonable prices given limited 
availability of contractor and subcontractor cost or pricing data. 
Since the United Launch Alliance joint venture formed in 2006, 
financial and business systems needed to get insight into costs have 
been lacking. There was also considerable uncertainty about costs 
associated with mission assurance activities, even though there have 
been concerns about whether such activities are excessive. Moreover, 
we found that if the acquisition strategy commits the Air Force and 
the NRO to buy eight common booster cores per year for a five year 
period, which was anticipated at the time of our review, DOD may face 
an oversupply of vehicles. In addition to these findings, we have 
reported prior concerns about oversight for the EELV program, such as 
(1) a prior decision to designate the program as in the sustainment 
phase rather than in the development phase essentially lifted the need 
for oversight reporting on costs and major changes and (2) the DOD had 
not updated a life cycle cost estimate for the program despite 
significant changes being made to it.[Footnote 6] 

Among other actions, we recommended that DOD conduct an independent 
assessment of the health of the U.S. launch industrial base; reassess 
the block buy contract length given the additional knowledge DOD is 
gaining; not waive Federal Acquisition Regulations requirements for 
contractor and subcontractor certified cost and pricing data as DOD 
finalizes its strategy; and ensure launch mission assurance activities 
be sufficient and not excessive. The Congress reinforced these and 
other GAO recommendations in the National Defense Authorization Act of 
2012 by requiring that DOD redesignate the program as a major defense 
acquisition program (which would require the submission of certain 
kinds of data annually) and provide to Congressional defense 
committees a description of how its acquisition strategy will address 
the recommendations of our EELV report issued in 2011.[Footnote 7] The 
Act also requires us to submit an assessment of the information DOD 
provides, and additional findings or recommendations, as appropriate. 
The Air Force has taken actions to expand its knowledge about EELV 
since our 2011 audit work was completed and we look forward to 
assessing this progress. 

Parts Quality for DOD, MDA, and NASA: 

Quality is paramount to the success of U.S. space and missile defense 
programs due to their complexity, the environment they operate in, and 
the high degree of accuracy and precision needed for their operations. 
Yet in recent years, many programs have experienced difficulties with 
quality workmanship and parts. Less visible problems have led to 
unnecessary repair, scrap, rework, and stoppage; long delays; and 
millions of dollars in cost growth. In some instances, entire missions 
have been endangered. As a result, we assessed the extent to which 
such problems affect related programs, their causes, and what 
initiatives have been undertaken in response. 

We found that parts quality problems had affected all 21 programs we 
reviewed, in some cases contributing to significant cost overruns and 
schedule delays associated with electronic versus mechanical parts or 
materials.[Footnote 8] We also found that if quality problems were 
discovered late in the development cycle they had more significant 
cost and schedule consequences: in one such case, an additional cost 
of at least $250 million and a 2-year launch delay. We found several 
causes of these problems: poor workmanship, undocumented and untested 
manufacturing processes, poor control of those processes and materials 
and failure to prevent contamination, poor part design, design 
complexity, and an inattention to manufacturing risks. Ineffective 
supplier management also resulted in concerns about whether 
subcontractors and contractors met program requirements. 

Recognition of these difficulties has spurred agencies to adopt new 
policies, but they were still in early stages of implementation at the 
time of our review. Post-policy programs are not yet mature enough for 
parts problems to be apparent. To address current and future problems, 
agencies and industry have begun to collect and share information, 
develop testing guidance and criteria, manage subcontractors, and 
mitigate problems, although their impact has yet to be determined. In 
any event, significant barriers hinder such efforts, including broader 
acquisition management problems, workforce gaps, diffuse leadership in 
the national security space community, the government's decreasing 
influence on the electronics parts market, and an increase in 
counterfeited parts. Our reports over the past decade have made 
recommendations for addressing these broader barriers, such as 
stabilizing requirements before beginning product development, 
separating technology development from product development, and 
strengthening leadership. The DOD is in the process of adopting these 
recommendations. Because space agencies and the Missile Defense Agency 
were undertaking additional actions to address parts quality problems 
and they had recently established a broad range of coordination 
mechanisms, we recommended that the community undertake periodic 
assessments of progress being made to address parts quality problems. 
The agencies generally agreed with our recommendation. 

Space S&T Strategy: 

The National Defense Authorization Act for Fiscal Year 2010 required 
DOD and the Director of National Intelligence (DNI) to jointly develop 
a space S&T strategy and it required us to assess the strategy 
submitted in April 2011.[Footnote 9] We reported that a strong 
foundation in space S&T should help DOD and the intelligence community 
address the most challenging national security problems, reduce risk 
in major acquisition programs, maintain technological superiority over 
adversaries, maintain a healthy industrial base and mitigate 
vulnerabilities in space systems.[Footnote 10] 

We found that the strategy largely met the requirements of the 
authorization act, but it was not a rigorous, comprehensive strategic 
plan. Instead, it embraced the status quo without laying out a path 
for assuring effective and efficient progress. For instance, the 
strategy identified goals, but did not prioritize them. The strategy 
described existing reviews used to assess progress in space S&T but 
did not identify new metrics or performance measures to be used to 
assess achievement of the strategy's newly established goals. Nor did 
the strategy address fundamental challenges facing the S&T community, 
such as human capital shortages, growing fiscal pressures, and the 
difficulty in transitioning space S&T to acquisition programs. We 
identified some strategic planning best practices such as identifying 
required human capital and required funding; prioritizing initiatives; 
and establishing ways to measure progress and processes for revising 
goals in the future. Additionally, we found that organizations 
involved in developing the strategy were active in creating its long-
and short-term goals, but their participation in other of its aspects 
was more limited. DOD and DNI officials did not believe they were 
required to do more than they did, and also did not include other 
agencies active in space S&T that were not included by law in the 
strategy. We recommended that DOD enhance its next version of the 
strategy by developing a detailed implementation plan for achieving 
goals, addressing funding prioritization and other challenges, and 
enhancing coordination with other agencies involved in space 
technology development. DOD concurred with these recommendations. 

DOD Satellite Operations: 

The Air Force and Navy operate separate satellite control networks 
within DOD through multiple operations centers, enabling their 
satellites to perform missions from launch to on-orbit operations and 
eventually through deactivation. Other federal government agencies, 
such as the NASA and the National Oceanic and Atmospheric 
Administration (NOAA), and commercial companies also operate 
satellites using various networks and operations centers. Combined, 
these networks assist the nation's communications, missile warning, 
navigation, meteorological, environmental, and scientific satellites 
or missions. 

DOD has efforts underway to modernize various satellite operations 
centers using proprietary and interoperable network architectures 
using standard protocols. For example, since 2006, the Air Force has 
operated a multi-mission operations center that uses a standard 
interface and telemetry, tracking, and commanding system which allows 
expedited transition of research satellites to operational satellites. 
In addition, in 2000, the Naval Research Laboratory initiated a web-
based service concept designed to optimize software code reuse and 
allow faster delivery of mission capabilities, which could lower 
mission development costs and facilitate system maintenance. 
Considering the long-standing need to replace the Air Force's aging 
and costly satellite control capabilities, and the importance 
associated with satellite operations, it is important that DOD not 
miss an opportunity to improve satellite operations and create greater 
efficiencies by leveraging commercial practices and other satellite 
networks and associated infrastructure. 

In ongoing work, we assessed DOD's satellite operations capabilities, 
specifically modernization efforts, compare DOD satellite operations 
concepts with those in other government entities and commercial 
industry; and, identify practices that could improve DOD satellite 
operations, consistent with mission requirements. We identified 
several challenges associated with DOD's modernization efforts. For 
example, DOD's ability to plan and implement upgrades may be limited 
by current budget uncertainties and plans to reallocate a portion of 
DOD's spectrum may affect its satellite operations. In addition, we 
found indications that the potential for unnecessary overlap and 
fragmentation still exists within satellite operations and associated 
infrastructure, including potential duplication of facilities and 
hardware. For instance, there are multiple, completely separate 
government satellite control networks that exist that depend on DOD's 
Air Force satellite control network, including military and civil 
networks, but none are interoperable. Finally, we have thus far found 
that although research and development in government satellite 
operations has led to the use of practices that, according to agency 
officials, have improved efficiency, there are other commercial 
practices that could provide further improvements to DOD's satellite 
network. For example, increased automation of routine satellite 
telemetry, tracking, and commanding functions could increase satellite 
operations efficiencies. We expect to issue our report based on this 
review later this fall. 

Actions Being Taken to Address Space Acquisition Problems: 

Though our reports over the year indicate there is more room for 
improvement, DOD continues to work to ensure that its space programs 
are more executable and produce a better return on investment. Many of 
the actions it has been taking are intended to address root causes of 
problems, though it will take time to determine whether these actions 
are successful and they need to be complemented by decisions on how 
best to lead, organize, and support space activities. 

Causes of Acquisition Problems: 

Our past work has identified a number of causes of acquisition 
problems, but several consistently stand out. At a higher level, DOD 
has tended to start more weapon programs than is affordable, creating 
a competition for funding that focuses on advocacy at the expense of 
realism and sound management. DOD has also tended to start its space 
programs before it has the assurance that the capabilities it is 
pursuing can be achieved within available resources and time 
constraints. There is no way to accurately estimate how long it would 
take to design, develop, and build a satellite system when critical 
technologies planned for that system are still in relatively early 
stages of discovery and invention. Finally, programs have historically 
attempted to satisfy all requirements in a single step, regardless of 
the design challenges or the maturity of the technologies necessary to 
achieve the full capability. DOD's preference to make larger, complex 
satellites that perform a multitude of missions has stretched 
technology challenges beyond current capabilities in some cases. 
Figure 6 illustrates the negative influences that can cause programs 
to fail. 

Figure 2: Negative Influences that Can Cause Programs to Fail: 

[Refer to PDF for image: illustration] 

Broken Acquisitions: 

Technology immature; 
Software needs poorly understood; 
Requirements unstable; 
Funding unstable; 
Inadequate contracting strategy; 
Inadequate contractor oversight; 
Alternatives not considered; 
Optimistic cost and schedule estimates. 

Source: GAO. 

[End of figure] 

Our work has recommended numerous actions that can be taken to address 
the problems we identified. Generally, we have recommended that DOD 
separate technology discovery from acquisition, follow an incremental 
path toward meeting user needs, match resources and requirements at 
program start, and use quantifiable data and demonstrable knowledge to 
make decisions to move to next phases. We have also identified 
practices related to cost estimating, program manager tenure, quality 
assurance, technology transition, and an array of other aspects of 
acquisition program management that could benefit space programs. 
[Footnote 11] DOD has generally concurred with our recommendations, 
and, as described below, has undertaken an array of actions to 
establish a better foundation for acquisition success. 

Actions to Improve Space and Weapon Systems Acquisitions: 

As we reported last year, DOD has implemented or has been implementing 
a number of actions to reform how space and weapon systems are 
acquired, both through its own initiatives as well as those required 
by statute. Among other actions, DOD intends to follow incremental or 
evolutionary acquisition processes for space programs versus pursuing 
significant leaps in capabilities involving technology risk, and has 
done so with the only new satellite program undertaken by the Air 
Force in recent years--GPS III and more recently with Joint Space 
Operations Center Mission System, which supports space situational 
awareness activities. DOD and the Air Force are also working to 
streamline management and oversight of the national security space 
enterprise. For example, all Air Force space system acquisition 
responsibility has been assigned to the office responsible for all 
other Air Force acquisition efforts, and options for streamlining the 
many space committees, boards, and councils is under ongoing review. 
These and other actions being taken that could improve space system 
acquisition outcomes, that we have not assessed, are described in 
table 2. 

Table 2: Actions Being Taken That Could Benefit Space System 
Acquisition Outcomes: 

Category: National policy; 
Actions: 
* In June 2010, the President of the United States issued the new 
National Space Policy which establishes overarching national policy 
for the conduct of U.S. space activities. The policy states that the 
Secretary of Defense and the Director of National Intelligence are 
responsible for developing, acquiring, and operating space systems and 
networks to support U.S. national security and enable defense and 
intelligence operations. The policy helps to clarify the Secretary of 
Defense's roles and responsibilities for coordinating space system 
acquisitions that span DOD and federal agencies, such as those for 
space situational awareness. 
* In January 2011, the Secretary of Defense and the Director of 
National Intelligence issued the National Security Space Strategy to 
build on the National Space Policy and help inform planning, 
programming, acquisition, operations, and analysis. 

Category: Acquisitions; 
Actions: 
* We expressed concern over DOD's tailored national security space 
acquisition policy--initially issued in 2003--primarily because it did 
not alter DOD's practice of committing to major investments before 
knowing what resources will be required to deliver promised 
capability. Instead, the policy encouraged development of leading-edge 
technology within product development, that is, at the same time the 
program manager is designing the system and undertaking other product 
development activities. In 2009, DOD eliminated the space acquisition 
policy and moved the acquisition of space systems under DOD's updated 
acquisition guidance for defense acquisition programs (DOD Instruction 
5000.02). In October 2010, the Under Secretary of Defense for 
Acquisition, Technology and Logistics issued a new space acquisition 
policy to be incorporated into that instruction that introduces 
specific management and oversight processes for acquiring major space 
systems, including retaining the requirement for independent program 
assessments to be conducted prior to major acquisition milestones. 

Category: Management and oversight; 
Actions: 
* In June 2008, the Undersecretary of Defense for Acquisition, 
Technology and Logistics created the Space and Intelligence 
Capabilities Office (SIO) to oversee all major DOD space and 
intelligence related acquisitions, including space-based 
communications programs, space control activities, space launch 
ranges, and all related ground systems. The SIO is to develop and 
recommend policies, investment strategies, and programs that improve, 
streamline, and strengthen DOD component space and intelligence 
related system acquisition, organization, technology and development 
activities. 
* In May 2009, Air Force leadership signed the Acquisition Improvement 
Plan which lists five initiatives for improving how the Air Force 
obtains new capabilities.[A] One of these initiatives relates to 
establishing clear lines of authority and accountability within 
acquisition organizations. In August 2010, the Secretary of the Air 
Force transferred space system acquisition responsibility from the 
Under Secretary of the Air Force to the Assistant Secretary of the Air 
Force for Acquisition, thereby assigning all Air Force acquisition 
responsibility to one office. As part of this realignment, the Program 
Executive Officer for Space, who previously reported to the 
Undersecretary of the Air Force, now reports to the Assistant 
Secretary of the Air Force for Acquisition. 
* In August 2010, the Secretary of Defense announced the elimination 
of the Office of the Assistant Secretary of Defense for Networks and 
Information Integration (ASD/NII) as part of a broader effort to 
eliminate organizations that perform duplicative functions or that 
have outlived their purpose.[B] The elimination of this organization 
may help to reduce the problems associated with the wide range of 
stakeholders within DOD responsible for overseeing the development of 
space-based capabilities. 
* In November 2010, the Deputy Secretary of Defense authorized the 
disestablishment of the National Security Space Office (NSSO).[C] The 
elimination of this office may also help to streamline national 
security space system acquisition management and oversight. 
Furthermore, the Deputy Secretary of Defense revalidated the Secretary 
of the Air Force as DOD Executive Agent for Space and directed the 
creation of a Defense Space Council (DSC)--chaired by the DOD 
Executive Agent for Space and with representatives from across DOD--to 
inform, coordinate, and resolve space issues for DOD. According to 
DOD, the council will be looking at streamlining the many defense and 
national security space committees, boards, and councils by reviewing 
more than 15 space-related organizations and making recommendations on 
their cancellation, consolidation, dissolution, or realignment under 
the DSC. 

Category: Program management assistance; 
Actions: 
* The Space and Missile Systems Center--the Air Force's primary 
organization responsible for acquiring space systems--resurrected a 
program management assistance group in 2007 to help mitigate program 
management, system integration, and program control deficiencies 
within specific ongoing programs. This group assists and supplements 
wing commanders and program offices in fixing common problems, raising 
core competencies, and providing a consistent culture that sweeps 
across programs. According to the, at the time, Global Positioning 
System (GPS) Directorate Commander, this group was an integral part of 
the overall process providing application-oriented training, 
templates, analyses, and assessments vital to the GPS IIIA baseline 
review. According to a senior program management assistance group 
official, the group has provided assistance to other major programs, 
including GPS ground control segment (OCX), Space Based Infrared 
System (SBIRS), and Space Based Space Surveillance (SBSS). 

Category: Workforce; 
Actions: 
* Another initiative in the Air Force Acquisition Improvement Plan is 
to revitalize the acquisition workforce by, among other things, 
increasing the number of authorized positions and providing for 
additional hiring, examining the proper mix of military and civilian 
personnel, and establishing training and experience objectives as part 
of the career paths for each acquisition specialty and increasing the 
availability of specialized training. As we reported in 2010, the Air 
Force was continuing efforts to bring space operators and space system 
acquirers together through the Advanced Space Operations School and 
the National Security Space Institute. The Air Force anticipated that 
this higher-level education would be integral to preparing space 
leaders with the best acquisition know-how. 

Category: Cost estimating; 
Actions: 
* The Air Force took actions to strengthen cost estimating. For 
example, we recommended that the Secretary of the Air Force ensure 
that cost estimates are updated as major events occur within a program 
that could have a material impact on cost, and that the roles and 
responsibilities of the various Air Force cost-estimating 
organizations be clearly articulated.[D] An Air Force policy directive 
now requires that cost estimates for major programs be updated 
annually, and lays out roles and responsibilities for Air Force cost-
estimating organizations. Additionally, the Joint Space Cost Council--
formed in 2007 with membership across industry and military and civil 
government agencies--is actively working to improve cost credibility 
and realism in estimates, budgets, schedules, data, proposals, and 
program execution. For example, one initiative has developed a 
standard work breakdown structure that is being vetted through 
industry and government. 

Category: Military standards; 
Actions: 
* Over the last several years, the Air Force Space and Missile Systems 
Center has taken action aimed at preventing parts quality problems by 
issuing policy relating to specifications and standards. According to 
officials, it is requiring the GPS III program development contractor 
to meet these specifications and standards. 
* In February 2011, the Air Force's Space and Missile Systems Center, 
Missile Defense Agency, NASA, and the National Reconnaissance Office 
signed a memorandum of understanding (MOU) in February 2011 to 
encourage additional interagency cooperation in order to strengthen 
mission assurance practices. The MOU calls on the agencies to develop 
and share lessons learned and best practices to ensure mission success 
through a framework of collaborative mission assurance. Objectives 
include developing core mission assurance practices and tools; 
clear and executable mission assurance plans; 
a robust mission assurance infrastructure and guidelines for tailoring 
specifications and standards for parts, materials, and processes; 
and, establishing standard contractual language to ensure consistent 
specification of core standards and deliverables. 

Source: GAO analysis of DOD data and previous GAO reports. 

[A] The Secretary of the Air Force and Chief of Staff of the Air Force 
issued the Air Force Acquisition Improvement Plan to recapture 
acquisition excellence by rebuilding an Air Force acquisition culture 
that delivers products and services as promised--on time, within 
budget, and in compliance with all laws, policies, and regulations. 
The plan consists of five initiatives: (1) revitalize the Air Force 
acquisition workforce, (2) improve the requirements generation 
process, (3) instill budget and financial discipline, (4) improve 
major Air Force systems source selections, and (5) establish clear 
lines of authority and accountability within acquisition organizations: 

[B] The ASD/NII's responsibilities included serving as the principal 
staff assistant on non-intelligence space matters; information 
technology, including National Security Systems; information resource 
management; and sensitive information integration. The ASD/NII also 
served as the principal staff assistant for issues such as command and 
control and net-centric capabilities. 

[C] As part of this direction, the Deputy Secretary of Defense 
authorized the establishment of a jointly manned space office to 
restructure and replace the NSSO. The NSSO supported the Secretary of 
the Air Force who, as the DOD Executive Agent for Space, was 
responsible for developing, coordinating, and integrating plans and 
programs for space systems and the acquisition of DOD space major 
defense acquisition programs, and was responsible for executing the 
space major defense acquisition programs, when delegated that 
authority by the Under Secretary of Defense for Acquisition, 
Technology and Logistics. The specific roles and responsibilities of 
the DOD Executive Agent for Space are defined in Department of Defense 
Directive 5101.2, DOD Executive Agent for Space (June 3, 2003). 

[D] GAO, Space Acquisitions: DOD Needs to Take More Action to Address 
Unrealistic Initial Cost Estimates of Space Systems, GAO-07-96 
(Washington, D.C.: Nov. 17, 2006). 

[End of table] 

Congress and DOD have taken major steps toward reforming the defense 
acquisition system in ways that may increase the likelihood that 
weapon programs will succeed in meeting planned cost and schedule 
objectives.[Footnote 12] In particular, DOD policy and legislative 
provisions place greater emphasis on front-end planning and 
establishing sound business cases for starting programs. For example, 
the provisions require programs to invest more time and resources to 
refine concepts through early systems engineering, strengthening cost 
estimating, developing technologies, building prototypes, holding 
early milestone reviews, and developing preliminary designs before 
starting system development.[Footnote 13] These provisions are 
intended to enable programs to refine a weapon system concept and make 
cost, schedule, and performance trade-offs before significant 
commitments are made. In addition, DOD policy requires establishment 
of configuration steering boards that meet annually to review program 
requirements changes as well as to make recommendations on proposed 
descoping options that could reduce program costs or moderate 
requirements. Fundamentally, these provisions should help (1) programs 
replace risk with knowledge and (2) set up more executable programs. 

While DOD has taken steps to implement the provisions, it is too soon 
to determine if Congress's and DOD's reform efforts will improve 
weapon program outcomes. For example, in June 2011 we reported on the 
Joint Requirements Oversight Council's (JROC) efforts to ensure trade-
offs among cost, schedule, and performance objectives, as directed by 
the Weapon Systems Acquisition Reform Act .[Footnote 14] We found that 
the JROC did not always consider tradeoffs or influence tradeoff 
decisions, military services did not consistently provide high quality 
resource estimates to the JROC, and JROC did not consistently 
prioritize requirements and capability gaps. We recommended that the 
JROC establish a mechanism to review analysis of alternatives results 
earlier in the acquisition process, require higher quality resource 
estimates from requirements sponsors, prioritize requirements across 
proposed programs, and address potential redundancies during 
requirements reviews. The Joint Staff partially concurred with our 
recommendations and generally agreed with their intent, but differed 
with us on how to implement them. 

Remaining Challenges: 

The actions that the Office of the Secretary of Defense and the Air 
Force have been taking to address acquisition problems are good steps. 
But there are still significant barriers to ensuring investments are 
optimized, including fragmented leadership, the high cost of launch, 
uncertainty about the future for technology advancements, and 
disconnects between the fielding of satellites with user equipment and 
ground systems needed to take advantage of expensive new capabilities. 
In particular: 

* Leadership. In past years, we have reported that a major challenge 
to leadership is that the community's authorities and responsibilities 
are spread across the department, and there is no single authority 
responsible for these programs below the President. Both the DOD and 
Air Force have taken a number of steps to streamline and clarify 
leadership for space. Time will tell whether these steps will help 
resolve issues such as a difficulty holding any one person or 
organization accountable for balancing needs against wants, for 
resolving conflicts among the many organizations involved with space, 
and for ensuring that resources are dedicated where they need to be 
dedicated. The department is still struggling with disconnects between 
programs that need to be linked together, such as a satellite program 
and its user equipment program. And at a higher level, we have 
reported that it still appears as if agencies involved in space 
acquisitions do not coordinate to the extent that they can in such 
areas as launch acquisitions and space S&T planning. [Footnote 15] 

* Launch costs. A factor influencing how space programs are designed 
is the price of launch, which can range anywhere from around $100 
million to well over $200 million. With prices being so high, programs 
often seek to maximize the "real estate" on board a satellite by 
including more capabilities than can sometimes be handled by a single 
program or within the time period desired for the program. Moreover, 
the Air Force recently developed a new launch acquisition strategy 
designed in part to contain launch prices, but given remaining 
knowledge gaps, achieving this outcome is uncertain. At the same time, 
potential new providers promise lower costs for launch, but none of 
them have been certified to launch the larger national security 
satellites, and it is uncertain whether their prices can stay low as 
they work to meet standards and expectations set by government 
agencies. The dilemma of high launch costs, in our view, makes it more 
important for the Air Force to gain insight into costs and pricing 
behind its new strategy and to have a complete understanding of the 
industrial base and related vulnerabilities as well as mission 
assurance activities and related costs. It would also behoove agencies 
to work together, not only to bring in new entrants which they are now 
doing, but in setting a future course for launch. S&T planning, for 
example, has been cited as a weak area for launch, even though 
investments in new propulsion and vehicle concepts have the potential 
to evolve capabilities and lower costs. 

* S&T and related investments. Recent proposed funding cuts have 
raised questions about how future technology advancements will be 
achieved in space. The Space Test Program (STP) was targeted for 
termination in the fiscal year 2013 budget. STP was created in 1965 to 
serve as an integrator to provide launch opportunities for 
experimental satellites. This program enabled new technologies to get 
on orbit, and pave the way in an affordable manner for new space 
capabilities. STP has spawned many current and valuable space 
programs, most notably GPS. With the cancellation of this program, the 
Secretary of the Air Force has stated that the organizations that 
develop these new space technologies, including academic institutions, 
government laboratories, and others, will be required to shoulder the 
burden of launch costs, estimated at around $50 million per year. DOD 
has also proposed cancellation of the Operationally Responsive Space 
(ORS) program. ORS was intended to provide short-term and low-cost 
tactical capabilities to warfighters. The ORS program's long-term 
goals were to reduce the cost of space development by fostering low 
cost launch methods as well as common design and interface methods. 
Average spending by the ORS program was about $100 million per year 
from fiscal years 2007-through 2011. While there are still investments 
available for the Air Force Research Laboratory and other 
organizations involved in S&T, as we mentioned earlier, planning for 
these investments has not been robust or very strategic. Another 
potential challenge to future space capability innovations is the 
Efficient Space Procurement (ESP) initiative, formerly known as the 
Evolutionary Acquisition for Space Efficiency (EASE). ESP is intended 
as a way to reduce costs for DOD space programs while improving 
acquisition outcomes by buying satellites in "block buys" instead of 
individually, accruing cost savings which are to be reinvested into a 
modernization program to evolve capabilities for future increments of 
that satellite program. At this time, it is unclear how this approach 
will ensure there will still be a focus on making significant leaps in 
technology or what the next generation of space systems will look like 
and be able to come into fruition. 

* Disconnects between fielding satellites, ground systems, and user 
equipment. DOD faces challenges in synchronizing capabilities offered 
by new satellite programs with the ground control stations that are 
necessary for receiving and processing information from the new space 
systems, and in some cases, the user terminals that deliver this 
information to users.[Footnote 16] When space, ground and user 
segments are not synchronized, there is the potential for wasted on-
orbit capability and delays in the ability of users to take advantage 
of new systems. As long as this condition exists, the improvements 
being made to acquisition practices on the satellite side will be 
minimized. A few examples are highlighted below in table 3. 

Table 3: Examples of significant disconnects between satellites, 
ground systems, and user equipment acquisitions: 

SBIRS: 
The first Space Based Infrared System (SBIRS) satellite was launched 
in May 2011 and carries scanning and staring sensors designed to 
provide early missile warning capabilities. However, DOD will not be 
able to fully utilize the data collected from the staring sensor 
because the ground segment software that is to process the sensor's 
data is not planned to be fully functional until at least 2018. This 
means that complete, usable data from the staring sensor will not be 
available until about 7 years after the satellite is on orbit. 

GPS Ground System: 
Modernizations to the Global Positioning System (GPS) have also faced 
synchronization challenges between the GPS III satellites, which are 
currently under development, a concurrently developed new ground 
control system, and new military user equipment that will be able to 
utilize the capabilities of the new satellites. The new GPS ground 
control segment (OCX) is being developed to take advantage of the 
modernized capabilities of the GPS III satellites. OCX is required for 
full operation of the new GPS satellites, but the contractor does not 
plan to deliver the first increment of OCX until August 2015--15 
months after the first planned GPS III satellite launch. Because of 
this disconnect, the GPS directorate is funding the development of a 
separate GPS launch and checkout system that is to provide an earlier 
command and control capability for the first GPS III satellite, but it 
unclear at this time when this capability will be delivered. This gap-
filler capability will not enable the new capabilities offered by GPS 
III satellites, such as a jam resistant military signal and three new 
civil signals, so most of these capabilities will be unused until OCX 
Block 2 is delivered in 2016. 

GPS User Equipment: 
DOD is planning to field new GPS user equipment on a variety of air-, 
ground-, and sea-based platforms to utilize the modernized military 
signal made available by the newer GPS satellites. Although the 
availability of the new signal on satellites would be operational 
within the next few years, user equipment is not expected to be fully 
fielded to the warfighters until many years later, possibly as late as 
2025. As a result, the military services' ability to achieve a joint 
navigation capability, an essential element of conducting future 
military operations, as well as benefit from the jam-resistant and 
stronger new GPS signals may not be fully realized until a decade 
after the first GPS III launch. 

FAB-T: 
The Air Force's Advanced Extremely High Frequency (AEHF) and the 
Family of Advanced Beyond Line-of-Sight Terminals (FAB-T) programs 
have experienced a problems with synchronization of various system 
components which will provide protected communications for nuclear and 
conventional forces as well as many airborne assets and ground command 
posts. As one of the primary user terminal programs associated with 
AEHF, FAB-T has experienced numerous problems and the delivery of 
terminals is not currently aligned with the AEHF satellite program. 
Specifically, current estimates show that FAB-T will reach its initial 
operational capability in 2017, 3 years after AEHF is scheduled to 
reach its initial operating capability. In the meantime, the Air Force 
plans to conduct an independent alternative with reduced requirements 
to mitigate risk. 

Joint Space Operations Center Mission System: 
Another area where synchronization in system development may pose 
problems is the Air Force's Joint Space Operations Center Mission 
System (JMS) and Space Fence programs. JMS is to process data about 
space assets gathered by the Space Fence and other Space Situational 
Awareness (SSA) programs, and will increase DOD's ability to track 
objects in space from about 10,000 objects with the current system to 
over 100,000 objects. According to the Space Fence program office, JMS 
needs to be available when the Space Fence is fielded because the 
amount of data Space Fence will generate exceeds existing command and 
control system performance limits. JMS recently underwent a change to 
its acquisition strategy, dividing the program's development into two 
increments to reduce risk and more rapidly deliver needed 
capabilities. The first Space Fence radar site is scheduled to provide 
initial operational capability by the end of fiscal year 2017, and to 
avoid a synchronization problem, JMS needs to be operational by this 
time. 

Source: GAO analysis. 

[End of table] 

Concluding Remarks: 

After more than a decade of serious acquisition difficulties, DOD is 
starting to launch new generations of satellites that promise vast 
enhancements in capability. Moreover, given the nation's fiscal 
challenges, DOD's focus on streamlining leadership, fixing problems, 
and implementing reforms is promising. But there are still significant 
barriers to achieve acquisition success that need to be addressed to 
maintain space superiority in an era of fiscal austerity. All of the 
barriers--leadership fragmentation, launch costs, S&T planning, and 
disconnects between space and ground assets--require action from the 
Air Force and the Office of the Secretary of Defense as well as the 
participation and cooperation of all the military services, the 
intelligence community, and other agencies such as NASA and NOAA. 
Moreover, though successful launches are being experienced, problems 
within ongoing development efforts such as GPS III, indicate that 
space acquisitions are still at risk of significant cost and schedule 
problems, and attention to reforms must be sustained. 

Chairman Nelson, Ranking Member Sessions, this completes my prepared 
statement. I would be happy to respond to any questions you and 
Members of the Subcommittee may have at this time. 

Contacts and Acknowledgments: 

For further information about this statement, please contact Cristina 
Chaplain at (202) 512-4841 or chaplainc@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this statement. Individuals who made key 
contributions to this statement include Art Gallegos, Assistant 
Director; Maricela Cherveny; Laura Hook; Angela Pleasants; Roxanna 
Sun; Bob Swierczek; and Alyssa Weir. 

[End of section] 

Related GAO Products: 

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 
Fragmentation, Achieve Savings, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-12-342SP] (Washington, D.C.: February 
28, 2012). 

Evolved Expendable Launch Vehicle: DOD Needs to Ensure New Acquisition 
Strategy Is Based on Sufficient Information, [hyperlink, 
http://www.gao.gov/products/GAO-11-641] (Washington, D.C.: September 
15, 2011). 

Space Research: Content and Coordination of Space Science and 
Technology Strategy Need to Be More Robust, [hyperlink, 
http://www.gao.gov/products/GAO-11-722] (Washington, D.C.: July 19, 
2011). 

Space and Missile Defense Acquisitions: Periodic Assessment Needed to 
Correct Parts Quality Problems in Major Programs, [hyperlink, 
http://www.gao.gov/products/GAO-11-404] (Washington, D.C.: June 24, 
2011). 

DOD Weapons Systems: Missed Trade-off Opportunities During 
Requirements Reviews, [hyperlink, 
http://www.gao.gov/products/GAO-11-502] (Washington, D.C.: June 16, 
2011). 

Space Acquisitions: DOD Delivering New Generations of Satellites, but 
Space System Acquisition Challenges Remain, [hyperlink, 
http://www.gao.gov/products/GAO-11-590T] (Washington, D.C.: May 11, 
2011). 

Defense Acquisitions: Challenges in Aligning Space System Components, 
[hyperlink, http://www.gao.gov/products/GAO-10-55] (Washington, D.C.: 
October 29, 2009). 

Global Positioning System: Challenges in Sustaining and Upgrading 
Capabilities Persist. [hyperlink, 
http://www.gao.gov/products/GAO-10-636]. (Washington, D.C.: September 
15, 2010). 

Polar-Orbiting Environmental Satellites: Agencies Must Act Quickly to 
Address Risks That Jeopardize the Continuity of Weather and Climate 
Data. [hyperlink, http://www.gao.gov/products/GAO-10-558]. 
(Washington, D.C.: May 27, 2010). 

Defense Acquisitions: Strong Leadership Is Key to Planning and 
Executing Stable Weapon Programs, [hyperlink, 
http://www.gao.gov/products/GAO-10-522] (Washington, D.C.: May 6, 
2010). 

Space Acquisitions: DOD Poised to Enhance Space Capabilities but, 
Persistent Challenges Remain in Developing Space Systems, [hyperlink, 
http://www.gao.gov/products/GAO-10-447T] (Washington, D.C.: March 10, 
2010). 

Space Acquisitions: Government and Industry Partners Face Substantial 
Challenges in Developing New DOD Space Systems. [hyperlink, 
http://www.gao.gov/products/GAO-09-648T]. (Washington, D.C.: April 30, 
2009). 

Space Acquisitions: Uncertainties in the Evolved Expendable Launch 
Vehicle Program Pose Management and Oversight Challenges. [hyperlink, 
http://www.gao.gov/products/GAO-08-1039]. (Washington, D.C.: September 
26, 2008). 

Defense Space Activities: National Security Space Strategy Needed to 
Guide Future DOD Space Efforts. [hyperlink, 
http://www.gao.gov/products/GAO-08-431R]. (Washington, D.C.: March 27, 
2008). 

[End of section] 

Footnotes: 

[1] See GAO related reports at the end of this statement. 

[2] GAO, Space Acquisitions: DOD Delivering New Generations of 
Satellites, but Space System Acquisition Challenges Remain, 
[hyperlink, http://www.gao.gov/products/GAO-11-590T] (Washington, 
D.C.: May 11, 2011). 

[3] Two highly elliptical orbit sensors have already been launched. 

[4] Costs adjusted for inflation. 

[5] GAO, Evolved Expendable Launch Vehicle: DOD Needs to Ensure New 
Acquisition Strategy Is Based on Sufficient Information, [hyperlink, 
http://www.gao.gov/products/GAO-11-641] (Washington, D.C.: Sept. 15, 
2011). 

[6] GAO, Space Acquisitions: Uncertainties in the Evolved Expendable 
Launch Vehicle Program Pose Management and Oversight Challenges, 
[hyperlink, http://www.gao.gov/products/GAO-08-1039] (Washington, 
D.C.: Sept. 26, 2008). 

[7] Pub. L. No. 112-81, §§ 838 & 839 (2011). 

[8] GAO, Space and Missile Defense Acquisitions: Periodic Assessment 
Needed to Correct Parts Quality Problems in Major Programs, 
[hyperlink, http://www.gao.gov/products/GAO-11-404] (Washington, D.C.: 
Jun 24, 2011). 

[9] Pub. L. No. 111-84, § 911(b) (2009). 

[10] GAO, Space Research: Content and Coordination of Space Science 
and Technology Strategy Need to Be More Robust, [hyperlink, 
http://www.gao.gov/products/GAO-11-722] (Washington, D.C.: Jul 19, 
2011). 

[11] GAO, Space Acquisitions: DOD Poised to Enhance Space Capabilities 
but, Persistent Challenges Remain in Developing Space Systems, 
[hyperlink, http://www.gao.gov/products/GAO-10-447T] (Washington, 
D.C.: March 10, 2010). 

[12] GAO, Defense Acquisitions: Strong Leadership Is Key to Planning 
and Executing Stable Weapon Programs, [hyperlink, 
http://www.gao.gov/products/GAO-10-522] (Washington, D.C.: May 6, 
2010). 

[13] Weapon Systems Acquisition Reform Act of 2009 (WSARA), Pub. L. 
No. 111-23; DOD Instruction 5000.02, Operation of the Defense 
Acquisition System (2008). 

[14] GAO, DOD Weapons Systems: Missed Trade-off Opportunities During 
Requirements Reviews, [hyperlink, 
http://www.gao.gov/products/GAO-11-502] (Washington, D.C.: June 16, 
2011). 

[15] GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP] (Washington, 
D.C.: Feb.28, 2012). 

[16] GAO, Defense Acquisitions: Challenges in Aligning Space System 
Components, [hyperlink, http://www.gao.gov/products/GAO-10-55] 
(Washington, D.C.: Oct 29, 2009). 

[End of section] 

GAO’s Mission: 

The Government Accountability Office, the audit, evaluation, and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the 
performance and accountability of the federal government for the 
American people. GAO examines the use of public funds; evaluates 
federal programs and policies; and provides analyses, recommendations, 
and other assistance to help Congress make informed oversight, policy, 
and funding decisions. GAO’s commitment to good government is 
reflected in its core values of accountability, integrity, and 
reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO’s website [hyperlink, http://www.gao.gov]. Each 
weekday afternoon, GAO posts on its website newly released reports, 
testimony, and correspondence. To have GAO e-mail you a list of newly 
posted products, go to [hyperlink, http://www.gao.gov] and select “E-
mail Updates.” 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of 
production and distribution and depends on the number of pages in the 
publication and whether the publication is printed in color or black 
and white. Pricing and ordering information is posted on GAO’s 
website, [hyperlink, http://www.gao.gov/ordering.htm]. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 
MasterCard, Visa, check, or money order. Call for additional 
information. 

Connect with GAO: 

Connect with GAO on facebook, flickr, twitter, and YouTube.
Subscribe to our RSS Feeds or E mail Updates. Listen to our Podcasts.
Visit GAO on the web at [hyperlink, http://www.gao.gov]. 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 
Website: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]; 
E-mail: fraudnet@gao.gov; 
Automated answering system: (800) 424-5454 or (202) 512-7470. 

Congressional Relations: 

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-4400
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, DC 20548. 

Public Affairs: 
Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149 
Washington, DC 20548.