Defense Acquisitions: Missile Defense Acquisition Strategy Generates Results but Delivers Less at a Higher Cost

In December 2007, the Missile Defense Agency (MDA) modified its approach used to define its cost, schedule, and performance baselines. In addition, the Fiscal Year 2008 National Defense Authorization Act included language that directs MDA to establish a number of specific acquisition improvements, including acquisition baselines for cost, schedule, and performance for those missile defense elements that have either entered the equivalent of the System Development and Demonstration phase of acquisition, or are being produced and fielded for operational use. In addition, in a 2010 Senate Report, the committee noted that GAO had recommended numerous times that MDA develop and use acquisition baselines for cost, schedule, and performance in order to permit objective assessments of their progress on missile defense programs. In light of GAO's recommendations, the committee further noted that it believed that it was important to require such baselines in law to ensure that they will be an enduring feature of MDA program management and oversight in the future. Consequently, in December 2010, Congress established new requirements for missile defense baselines in the National Defense Authorization Act for Fiscal Year 2011. The Ike Skelton National Defense Authorization Act for Fiscal Year 2011, required the Secretary of Defense to ensure that MDA establishes and maintains an acquisition baseline for each program element of the BMDS. This law detailed specific requirements for the contents of the acquisition baseline, including a comprehensive schedule, a detailed technical description, a cost estimate (including life cycle cost estimate), and a test baseline. Annually, MDA is to submit a report on the baselines to the congressional defense committees. After the first such report, each subsequent report shall identify the significant changes or variances, if any, in any baseline from any earlier report.

The Missile Defense Agency (MDA) is providing additional information to Congress to promote accountability, consistency, and transparency while (1) preserving the MDA Director's flexibility to make decisions and (2) continuing to emphasize its single, integrated program of development. In addition, the Fiscal Year 2008 National Defense Authorization Act Report directed MDA to establish acquisition baselines for cost, schedule, and performance for those missile defense elements far enough along to be in system development and demonstration, and that the agency provide unit cost data, and other information that would help improve accountability. Also, in its June 2010 BMDS Accountability Report, MDA reported program acquisition unit costs, which includes research and development funding, for MDA program elements that produce countable weapons, sensors, launch systems, and fire control systems.

The Missile Defense Agency (MDA) did not agree with this recommendation, but modified its biennial block approach in December 2007 to include only those elements that will be fielded during each block.

The Fiscal Year 2008 National Defense Authorization Act includes language directing the MDA, starting in fiscal year 2009, to submit the budget request using regular budget categories (research and development, procurement, operation and maintenance, and military construction). Additionally, the Fiscal Year 2008 National Defense Authorization Act includes language directing the MDA to submit, no later than March 1, 2008, to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives, a plan for transitioning the Missile Defense Agency from using research, development, test, and evaluation funds for missile defense fielding activities to using procurement funds for those activities, where practicable. In the 2010 President's budget, MDA requested procurement funding for Terminal High Altitude Area Defense (THAAD) and Aegis Ballistic Missile Defense assets.

The Missile Defense Agency terminated the Airborne Laser and Kinetic Energy Interceptor programs citing affordability, feasibility, and technical issues as justification.