This is the accessible text file for GAO report number GAO-03-1010R 
entitled 'Issues Facing the Army's Future Combat Systems Program' which 
was released on August 13, 2003.

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August 13, 2003:

The Honorable Curt Weldon:

Chairman:

The Honorable Neil Abercrombie:

Ranking Minority Member:

Subcommittee on Tactical Air and Land Forces:

Committee on Armed Services:

House of Representatives:

Subject: Issues Facing the Army's Future Combat Systems Program:

In October 1999, the Army announced plans to transform into a more 
strategically responsive force that could more rapidly deploy and 
effectively operate in all types of military operations, whether small-
scale contingencies or major theater wars. The Future Combat Systems 
(FCS) program is to provide the suite of weaponry and other equipment 
for the transformed force. The Army plans to develop a family of 18 
systems under the FCS program. Because of its size, the FCS program 
will dominate the Army's investment accounts over the next decade.

In July 2002, we began to review the FCS program as the program was 
approaching a decision on whether to start the system development and 
demonstration (SDD) phase--referred to as the milestone B decision. On 
April 10, 2003, we briefed staff of the House Committee on Armed 
Services on our work and provided a copy of the briefing to the staff 
of the Senate Armed Services Committee. We also briefed Army and DOD 
officials associated with the FCS program. The objectives of the 
briefing were to provide (1) an understanding of the content, approach, 
and schedule of the FCS program; (2) observations on both the positive 
and challenging features of the program; and (3) different approaches 
to proceeding with FCS that warrant consideration. The enclosure 
contains the briefing slides.

On May 17, 2003, the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) approved the Army's request to begin the SDD 
phase for the FCS program. He directed the Army to perform a full 
milestone B update in November 2004 to obtain authority to continue SDD 
and to authorize prototype production. He also listed 14 actions items 
to be completed prior to the milestone update.

We believe the issues raised in our briefing remain relevant as the FCS 
program begins the SDD phase. Because of your committees' interest in 
the FCS program, we are enclosing the full briefing with this report 
and summarizing it in the following paragraphs.

Background:

Under its transformation efforts, the Army plans to change the way it 
organizes, trains, deploys, and equips its forces. It expects the 
future force to be organized around brigade-size units that perform 
virtually all Army combat functions.[Footnote 1] The Army wants to 
fully equip these units with FCS, a family of 18 networked, war-
fighting systems which are intended to be more lethal, survivable, 
deployable, and sustainable than existing heavy combat systems. In 
order to deploy faster, the FCS vehicles are expected to be a fraction 
of the weight of existing heavy armored fighting vehicles. The Army 
believes that nontraditional fighting tactics coupled with an extensive 
information network will compensate for the loss of size and armor mass 
by utilizing information superiority and synchronized operations to 
see, engage, and destroy the enemy before the enemy detects the future 
forces.

The Army has allocated about $22 billion for the FCS program during 
fiscal years 2004 through 2009 and several billions more for non-FCS 
programs that the FCS will need to become fully capable. In addition, 
the Army recently implemented FCS schedule changes, which added about 2 
years to the SDD phase.

Features and Challenges of the FCS Concept:

The FCS program has several progressive features, but also faces a 
number of challenges. The FCS concept shows that the Army leadership is 
thinking innovatively to arrive at the best ways to prepare for future 
Army operations. For example, Army leaders decided to include 
interoperability with other systems in the FCS design and design the 
individual FCS systems to work as part of a networked system-of-
systems. These features represent an improvement over the past approach 
of developing individual systems first and then attempting to integrate 
them later, an approach that could lead to schedule and cost growth. 
The system-of-systems approach also allows program managers more 
flexibility to make trade-offs among the individual systems. 
Collectively, the system-of-systems could still provide an effective 
combat capability even if some of the individual system capabilities 
are lost or degraded. In addition, the Army has adopted best practice 
tools to measure the progress of technology development. For example, 
it is employing technology readiness levels to measure the maturity of 
technologies being considered for FCS components.

The acquisition strategy for the FCS is aggressive, particularly in 
light of the program's vast scope. The SDD phase began with more risk 
present than recommended by best practices or DOD guidance. For 
example, many critical technologies were significantly immature and 
will require further development at the same time as product 
development is conducted. This concurrent development increases the 
risk of cost growth and schedule delays. Since FCS will dominate the 
Army's investment accounts over the next decade, any cost growth and 
schedule delays could affect the entire Army.

Even with the recent extension of SDD by about 2 years, the FCS 
strategy calls for developing multiple systems and a network in less 
time than DOD typically needs to develop a single advanced system. In 
addition, a favorable decision to begin SDD on a system-of-systems like 
FCS poses challenges for the acquisition process such as defining and 
evaluating requirements, analyzing alternatives, estimating and 
tracking costs, conducting test and evaluation, and conducting 
oversight.

Options for Proceeding with FCS:

In our briefing, we noted that while proceeding with FCS as planned 
posed significant challenges, doing nothing would not allow the Army to 
meet its transformation objectives. Moreover, if each of the 18 FCS 
systems and the network were managed as traditional, individual 
programs, it could weaken the architecture and would amount to 
controlled evolution versus transformation. 

We offered three options for proceeding with FCS at lower risk. Each 
option involves trade-offs or consequences, as indicated below. 

Proposed Action: Further mature key technologies before entering SDD; 
Potential Consequences: Reduces risk and increases knowledge but could 
delay system integration and fielding.

Proposed Action: Use advanced technology demonstrations to mature key 
technologies; Potential Consequences: Accelerates development of least 
mature and most complex technologies but could delay fielding.

Proposed Action: Approve FCS architecture while implementing a 
knowledge-based approach for incorporating individual systems into 
SDD; Potential Consequences: Provides a better fit with the 
acquisition process and more opportunity to change course if planned 
progress is not made. Could increase the difficulty of maintaining the 
integrity of the system of systems and reduce flexibility to make 
decisions across system lines.

[End of table]

Agency Comments:

In early April 2003, we discussed a draft of the briefing at length 
with Army and DOD officials and revised the briefing as appropriate. We 
recently provided a draft of this letter and enclosed briefing to DOD 
for review and comment. In official oral comments, DOD officials stated 
that there were no objections to the content of the letter and 
briefing.

Scope and Methodology:

We focused our assessment on the Army's strategy for developing and 
acquiring FCS and compared it with knowledge-based acquisition 
principles. Specifically, we examined (1) the technologies the Army has 
proposed for FCS and (2) the challenges associated with developing a 
complex system-of-systems. We reviewed relevant program documents and 
interviewed key officials to understand the FCS concept and determine 
the Army's strategy for developing and acquiring FCS. We met with 
officials from the research and development commands to identify key 
technologies the Army is considering for use in FCS.[Footnote 2] We 
conducted our work from July 2002 to June 2003 in accordance with 
generally accepted government auditing standards.

We plan to provide copies of this report to the Senate Armed Services 
Committee; the Senate Committee on Appropriations, Subcommittee on 
Defense; and the House Committee on Appropriations, Subcommittee on 
Defense. We also will provide copies to the Director, Office of 
Management and Budget; the Secretary of Defense; and the Secretary of 
the Army. We will make copies available to others upon request.

If you or your staff have any questions concerning this report, please 
contact me on (202) 512-2811; or Bill Graveline, Assistant Director, on 
(256) 922-7514. Major contributors to this correspondence are John 
David Anderson, Marcus Ferguson, Lawrence Gaston, Thomas Gordon, and 
William Lipscomb.

Paul L. Francis:

Director, Acquisition and Sourcing Management:

Signed by Paul L. Francis:

Enclosure:

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FOOTNOTES

[1] According to Army planning documents, Special Forces, Rangers, and 
airborne forces are the only combat formations that will continue to 
perform their current missions and not be replaced in the future force.

[2] On April 28, 2003, the Institute for Defense Analysis issued a 
draft report of the Independent Assessment Panel for Future Combat 
Systems, called the Welch Report. We could not include information from 
that report in our briefing of April 10, 2003. The report, however, is 
being considered in our ongoing work regarding FCS.