Defense Acquisitions: 2009 Is a Critical Juncture for the Army's Future Combat System

Highlights

The Future Combat System (FCS) program--which comprises 14 integrated weapon systems and an advanced information network--is the centerpiece of the Army's effort to transition to a lighter, more agile, and more capable combat force. The substantial technical challenges, the Army's acquisition strategy, and the cost of the program are among the reasons why the program is recognized as needing special oversight and review. Section 211 of the National Defense Authorization Act for Fiscal Year 2006 requires GAO to report annually on the FCS program. This report includes an examination of (1) how the definition, development, and demonstration of FCS capabilities are proceeding, particularly in light of the go/no-go decision scheduled for 2009; (2) the Army's plans for making production commitments for FCS and any risks related to the completion of development; and (3) the estimated costs for developing and producing FCS.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include the completion of the definition of all FCS requirements including those for the information network.	Closed – Not Implemented DOD concurred with this recommendation and stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. In its August 2008 Acquisition Decision Memorandum, criteria for the milestone review were detailed. However, those criteria did not include any on the completion of the definition of all FCS requirements.
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include the demonstration that preliminary designs meet FCS requirements.	Closed – Not Implemented DOD concurred with this recommendation and stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. In its August 2008 Acquisition Decision Memorandum, criteria for the milestone review were detailed. However, those criteria did not include one related to the demonstration that preliminary designs meet FCS requirements.
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include the maturation of all critical technologies.	Closed – Implemented DOD stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. In its August 2008 Acquisition Decision Memorandum, criteria for the milestone review were detailed. Among them was a criteria that technology readiness level 6 be achieved for threshold critical technologies.
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include the synchronization of FCS with all essential complementary programs.	Closed – Implemented DOD concurred with this recommendation and stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. In its August 2008 Acquisition Decision Memorandum, criteria for the milestone review were detailed. One criteria was that the design, build, and test schedules for all platforms and networks be aligned and executable.
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include a sound and executable acquisition strategy, including (1) the synchronization of the development and demonstration of the FCS information network with the development and demonstration of other FCS elements, (2) a realistic path forward to critical design review, (3) a thorough and robust test and evaluation plan, and (4) a realistic path forward to production process maturity before the start of production.	Closed – Not Implemented DOD concurred with this recommendation and stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. In its August 2008 Acquisition Decision Memorandum, criteria for the milestone review were detailed. However, the criteria did not include anything directly related to FCS' acquisition strategy going forward.
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include development and production cost estimates that (1) have a specified confidence level and (2) are reconciled with independent estimates.	Closed – Not Implemented DOD concurred with this recommendation and stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. In its August 2008 Acquisition Decision Memorandum, criteria for the milestone review were detailed. However, those criteria did not include anything specific on a cost estimate or its confidence levels.
Department of Defense	To ensure that the 2009 FCS milestone review is positioned to be both well-informed and transparent, the Secretary of Defense should establish objective and quantitative criteria that the FCS program will have to meet in order to justify its continuation and gain approval for the remainder of its acquisition strategy. The criteria should be set by at least July 30, 2008, so as to be prescriptive, and should be consistent with DOD acquisition policy and best practices. At a minimum, the criteria should include assurance that the Army can properly fund, over the long term, the FCS program of record.	Closed – Not Implemented DOD concurred with this recommendation and stated that expectations for the 2009 milestone review will be reviewed and finalized in late 2008. Although DOD expected the Army to present an assessment of FCS' long term affordability, it did not specify that the Army provide assurance that it could properly fund, over the long term, the FCS program of record.
Department of Defense	The Secretary of Defense should, in advance of the 2009 milestone review, identify viable alternatives to FCS as currently structured that can be considered in the event that FCS does not measure up to the criteria set for the review. As we have previously reported, an alternative need not be a rival to the FCS, but rather the next best solution that can be adopted if FCS is not able to deliver the needed capabilities. For example, an alternative need not represent a choice between FCS and the current force, but could include fielding a subset of FCS, such as a class of vehicles, if they perform as needed and provide a militarily worthwhile capability.	Closed – Implemented While DOD concurred with this recommendation, it is not yet clear that DOD will formally conduct the 2009 FCS milestone review. Nevertheless, the Secretary of Defense's decision to terminate manned ground vehicle development was at least a partial "no-go" decision on the current FCS program. Also, the Secretary's decision to proceed with several followon programs to FCS was, in effect, a consideration of alternatives to the current FCS program of record.
Department of Defense	The Secretary of Defense should (1) closely examine the oversight implications of the Army's decision to contract with the lead system integrator (LSI) for early production of FCS spin outs, non-line-of-sight cannon (NLOS-C), and low-rate production for the core FCS program; (2) take steps to mitigate the risks of the Army's decisions, including the consideration of the full range of alternatives for contracting for production; and (3) evaluate alternatives to the LSI for long-term sustainment support of the FCS system of systems.	Closed – Implemented Regarding the recommendations related to oversight, while DOD concurred with each, it was silent on the expansion of the LSI's role into core production and cites its reliance on Army analyses and risk assessments, rather than its own assessments, to inform its decisions. However, in its response to a related recommendation in GAO-09-288, DOD stated that in November 2008, the Under Secretary of Defense for Acquisition, Technology, and Logistics directed the Army to examine contracting alternatives for procurement of FCS capability. Also, in the June 2009 Acquisition Decision Memorandum, the Under Secretary specified that the Army present a plan for the transition away from industry-led integration efforts. The Army has presented and is implementing its plan to move away from industry-led integration over the next few years. That implementation is most evident in the Army's procurement contracting plans for subsequent lots of E-IBCT equipment, which are remnants from the FCS program.

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Combat readinessCost analysisCost overrunsDefense budgetsDefense capabilitiesDefense cost controlDevelopmental testingMilitary budgetsMilitary technologyOperational testingProgram evaluationProgram managementReporting requirementsRequirements definitionRisk managementSchedule slippagesStrategic planningSystems integrationSystems testingTechnology assessmentWeaponsWeapons research and developmentWeapons systemsCost estimatesProgram implementationProgram costs