Defense Acquisitions:

Despite Restructuring, SBIRS High Program Remains at Risk of Cost and Schedule Overruns

GAO-04-48: Published: Oct 31, 2003. Publicly Released: Oct 31, 2003.

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In 1996, the Department of Defense (DOD) initiated the Space-Based Infrared System (SBIRS) to provide greater long-range ballistic missile detection capabilities than its current system. The initial SBIRS architecture included "High" and "Low" orbiting space-based components and ground processing segments. SBIRS has been technically challenging, and in October 2001, SBIRS Low was transferred from the Air Force to the Missile Defense Agency. The Air Force expected to field SBIRS High by 2004, but numerous problems have led to schedule overruns. In the fall of 2001, DOD identified potential cost growth of $2 billion. To determine the causes of the significant cost growth, DOD convened an Independent Review Team. In August 2002, the Air Force restructured the program to address the findings of the team's assessment. Our report (1) describes the key elements of the restructured program and (2) identifies problems and potential risks still facing the program.

In an effort to get the SBIRS High program on track, the most recent program restructuring provided contractor incentives and oversight measures, as recommended by the Independent Review Team. Under the current contract, the prime contractor's award fees are now tied to the incremental delivery of specific system capabilities. DOD also modified the contract to prescribe tighter management controls, improve reporting of contractor information, and add formal review processes by DOD management. This increased oversight is intended, in part, to minimize further changes in requirements and improve management of software development, both of which have been particularly problematic. The restructuring also added funding and other resources to the program and extended the scheduled delivery of certain components. At the time of the restructuring, the Air Force believed the modified contract established an executable schedule, a realistic set of requirements, and adequate funding. However, the restructuring did not fully address some long-standing problems identified by the Independent Review Team. As a result, the program continues to be at substantial risk of cost and schedule increases. Key among the problems is the program's history of moving forward without sufficient knowledge to ensure that the product design is stable and meets performance requirements and that adequate resources are available. For example, a year before the restructuring, the program passed its critical design review with only 50 percent of its design drawings completed, compared to 90 percent as recommended by best practices. Consequently, several design modifications were necessary, including 39 to the first of two infrared sensors to reduce excessive noise created by electromagnetic interference--a threat to the host satellite's functionality--delaying delivery of the sensor by 10 months or more. Software development underlies most of the top 10 program risks, according to the contractor and the SBIRS High Program Office. For example, testing of the first infrared sensor revealed several deficiencies in the flight software involving the sensor's ability to maintain earth coverage and track missiles while orbiting the earth. Program officials stated that they are coordinating the delivery of the first sensor with the delivery of the host satellite to mitigate any schedule impacts, but they agreed that these delays put the remaining SBIRS High schedule at risk.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO recommended that DOD reassess the SBIRS High program with the aim of making the best decisions for proceeding with the procurement of a system that meets this nation's need for strategic surveillance and early warning satellite data. DOD agreed; however, DOD stated that rather than following the specific recommendation to have the Secretary of the Air Force reconvene an independent task force, the Secretary of Defense would consider other approaches before a final decision was made on assigning responsibilities for conducting the review. On December 12, 2003, the Undersecretary of Defense, Acquisition, Technology, and Logistics, convened the Defense Acquisition Board to review the status of the SBIRS High program. The review focused on program schedule, space and ground segment status, contract cost performance, and contract management.

    Recommendation: The Secretary of Defense should reconvene the IRT or similar independent task force with substantial program knowledge to provide an assessment of the restructured program and concrete guidance for addressing the program's underlying problems. Such a review should include determining whether the pending requirements changes should be funded.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: GAO recommended that DOD reassess the SBIRS High program with the aim of making the best decisions for proceeding with the procurement of a system that meets this nation's need for strategic surveillance and early warning satellite data. DOD agreed; however, DOD stated that rather than following the specific recommendation to have the Secretary of the Air Force reconvene an independent task force, the Secretary of Defense would consider other approaches before a final decision was made on assigning responsibilities for conducting the review. On December 12, 2003, the Undersecretary of Defense, Acquisition, Technology, and Logistics, convened the Defense Acquisition Board to review the status of the SBIRS High program. The review focused on program schedule, space and ground segment status, contract cost performance, and contract management.

    Recommendation: The Secretary of Defense should reconvene the IRT or similar independent task force with substantial program knowledge to provide an assessment of the restructured program and concrete guidance for addressing the program's underlying problems. Such a review should include determining whether the appropriate management mechanisms are in place to achieve intended program objectives.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: GAO recommended that DOD reassess the SBIRS High program with the aim of making the best decisions for proceeding with the procurement of a system that meets this nation's need for strategic surveillance and early warning satellite data. DOD agreed; however, DOD stated that rather than following the specific recommendation to have the Secretary of the Air Force reconvene an independent task force, the Secretary of Defense would consider other approaches before a final decision was made on assigning responsibilities for conducting the review. On December 12, 2003, the Undersecretary of Defense, Acquisition, Technology, and Logistics, convened the Defense Acquisition Board to review the status of the SBIRS High program. The review focused on program schedule, space and ground segment status, contract cost performance, and contract management.

    Recommendation: The Secretary of Defense should reconvene the IRT or similar independent task force with substantial program knowledge to provide an assessment of the restructured program and concrete guidance for addressing the program's underlying problems. Such a review should include determining whether the contractor's software development procedures and practices have reached at least a CMMI level 3 in relation to the Software Engineering Institute's standards.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: GAO recommended that DOD reassess the SBIRS High program with the aim of making the best decisions for proceeding with the procurement of a system that meets this nation's need for strategic surveillance and early warning satellite data. DOD agreed; however, DOD stated that rather than following the specific recommendation to have the Secretary of the Air Force reconvene an independent task force, the Secretary of Defense would consider other approaches before a final decision was made on assigning responsibilities for conducting the review. On December 12, 2003, the Undersecretary of Defense, Acquisition, Technology, and Logistics, convened the Defense Acquisition Board to review the status of the SBIRS High program. The review focused on program schedule, space and ground segment status, contract cost performance, and contract management.

    Recommendation: The Secretary of Defense should reconvene the IRT or similar independent task force with substantial program knowledge to provide an assessment of the restructured program and concrete guidance for addressing the program's underlying problems. Such a review should include determining whether the program design is stable and sufficient to meet performance requirements.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: GAO recommended that DOD reassess the SBIRS High program with the aim of making the best decisions for proceeding with the procurement of a system that meets this nation's need for strategic surveillance and early warning satellite data. DOD agreed; however, DOD stated that rather than following the specific recommendation to have the Secretary of the Air Force reconvene an independent task force, the Secretary of Defense would consider other approaches before a final decision was made on assigning responsibilities for conducting the review. On December 12, 2003, the Undersecretary of Defense, Acquisition, Technology, and Logistics, convened the Defense Acquisition Board to review the status of the SBIRS High program. The review focused on program schedule, space and ground segment status, contract cost performance, and contract management.

    Recommendation: The Secretary of Defense should reconvene the IRT or similar independent task force with substantial program knowledge to provide an assessment of the restructured program and concrete guidance for addressing the program's underlying problems. Such a review should include determining whether the SBIRS High development schedule is executable within current cost and schedule estimates in light of the recent HEO 1 delays and other risks (such as software development).

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: GAO recommended that DOD reassess the SBIRS High program with the aim of making the best decisions for proceeding with the procurement of a system that meets this nation's need for strategic surveillance and early warning satellite data. DOD agreed; however, DOD stated that rather than following the specific recommendation to have the Secretary of the Air Force reconvene an independent task force, the Secretary of Defense would consider other approaches before a final decision was made on assigning responsibilities for conducting the review. On December 12, 2003, the Undersecretary of Defense, Acquisition, Technology, and Logistics, convened the Defense Acquisition Board to review the status of the SBIRS High program. The review focused on program schedule, space and ground segment status, contract cost performance, and contract management.

    Recommendation: The Secretary of Defense should put in place a mechanism for ensuring that the knowledge gained from the assessment is used to determine whether further programmatic changes are needed to strengthen oversight, adjust current cost and schedule estimates, modify contract mechanisms, and address requirements changes.

    Agency Affected: Department of Defense

 

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