Defense Acquisitions:

Missile Defense Transition Provides Opportunity to Strengthen Acquisition Approach

GAO-10-311: Published: Feb 25, 2010. Publicly Released: Feb 25, 2010.

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By law, GAO is directed to assess the annual progress the Missile Defense Agency (MDA) made in developing and fielding the Ballistic Missile Defense System (BMDS). GAO also assessed MDA's progress toward improving accountability and transparency in agency operations, management processes, and its acquisition strategy. To accomplish this, GAO reviewed asset fielding schedules, test plans and reports, as well as pertinent sections of Department of Defense (DOD) policy to compare MDA's current level of accountability with that of other DOD programs. GAO's fiscal year 2009 assessment of MDA's cost, schedule, and performance progress is more limited than previous assessments because MDA removed key components of schedule and performance goals from its annual report of goals. In addition, though it had committed to, MDA did not report total cost estimates in 2009.

Fiscal year 2009 was an unprecedented year of transition for MDA as it experienced its first change of administration, its third MDA Director, shifts in plans for missile defense in Europe as well as a shift in focus for technology development from intercepting missiles during the boost phase to the early intercept phase. Such changes present new challenges for MDA but also opportunities to strengthen acquisition approaches. (1) Progress: MDA achieved several accomplishments. For example, MDA revised its testing approach to better align tests with modeling and simulation needs and undertook a new targets development effort to resolve longstanding problems supplying sufficient and reliable targets. The agency also demonstrated increased levels of performance for some elements through flight and ground testing. Fiscal year 2009 testing indicates an increased level of interoperability among multiple elements, improving both system-level performance and advancing the BMDS models and simulations needed to predict performance. In addition, the agency delivered 83 percent of the assets it planned to deliver by the end of fiscal year 2009. (2) Challenges: While there was progress, all BMDS elements had delays in conducting tests, were unable to accomplish all planned objectives, and experienced performance challenges. Poor target performance continued to be a problem, causing several test delays and leaving several test objectives unfulfilled. The test problems also precluded MDA from gathering key knowledge and affected development of advanced algorithms and homeland defense. These test problems continued to affect the models and simulations used to assess the overall performance of the BMDS. Consequently, comprehensive assessments of its capabilities and limitations are still not possible. MDA also redefined its schedule baseline, eliminating goals for delivering integrated capabilities so we were not able to assess progress in this area. Despite these problems, MDA proceeded with production and fielding of assets. (3) Transparency, Accountability, and Oversight: In 2009, the significant adjustments MDA made to its acquisition approach--terminating the block structure; reducing, eliminating, or not reporting key baselines; and terminating its capability declaration process--and adjustments to the material reported to Congress reduced the transparency and accountability MDA had begun to build. However, MDA is beginning to implement several initiatives--including the adoption of key principles of DOD acquisition regulations--that could improve transparency and accountability and lay the foundation needed for oversight. If these initiatives are implemented in accordance with knowledge-based acquisition principles, an opportunity exits to improve the BMDS acquisition by ensuring MDA programs begin with realistic, transparent plans and baselines. While these initial steps hold promise, they will take time to fully implement and once implemented they will need to be sustained over time and consistently applied.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In the June 2010 Ballistic Missile Defense System Accountability Report (BAR), Missile Defense Agency (MDA) provided cost, schedule, and performance baselines for the acquisition of each new class of target.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to establish cost, schedule, and performance baselines for the acquisition of each new class of target when it is approved by the Director prior to proceeding with acquisition and report those baselines to Congress.

    Agency Affected: Department of Defense

  2. Status: Open

    Comments: In providing comments on our report, the agency concurred with this recommendation, but has not yet taken all actions necessary to implement it. Independent cost estimates for all of the programs and components in the Missile Defense Agency's (MDA) Ballistic Missile Defense System (BMDS) Accountability Report (BAR) have not yet been developed by the Cost Assessment and Program Evaluation Office (CAPE). According to officials in CAPE, the last independent cost estimate they completed for an active BMDs program was for THAAD procurement costs in 2010 although they have continued to support MDA with other independent cost assessments for portions of MDA programs since that time. For example, in fiscal year 2012, they examined some costs for several BMDS elements as a part of their review of the costs associated with deploying a U.S. missile defense in Europe. Although the CAPE is currently developing an ICE to support a production decision on the Standard Missile-3 Block IB as well as two cost analyses for procurement strategies on the Standard Missile-3 Block IB and Terminal High Altitude Area Defense interceptor contracts, no independent cost estimates are currently being developed for any of MDA's target classes.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to obtain independent Cost Assessment and Program Evaluation cost estimates in support of these cost baselines.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: In the June 2010 Ballistic Missile Defense System Accountability Report (BAR), Missile Defense Agency (MDA) provided more complete unit costs by including program acquisition unit costs.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to ensure that program acquisition unit costs for BMDS assets are reported in the BMDS Accountability Report, to provide Congress with more complete and comprehensive information by including development costs.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation. Although the Missile Defense Agency (MDA) no longer reports its initiatives in a report entitled "Department of Defense's Plan to Enhance the Accountability and Transparency of the Ballistic Missile Defense Program", the agency met the intent of GAO's recommendation by capturing its current initiatives in its February 2011 and February 2012 Ballistic Missile Defense System (BMDS) Accountability Report (BAR). As such, MDA has implemented GAO's recommendation.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to update DOD's Plan to Enhance the Accountability and Transparency of the Ballistic Missile Defense Program to reflect MDA's current initiatives and include dates for fulfilling each commitment.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation and has implemented it. In its June 2010 and February 2011 Ballistic Missile Defense System Accountability Reports (BARs), the Missile Defense Agency (MDA) provided test dates and top-level test goals for its programs. The tests identified in the BARs were in accordance with the agency's official test baseline, referred to as the Integrated Master Test Plan.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to report top-level test goals for each element, or appropriate portions thereof, to Congress in the next BMDS Accountability Report.

    Agency Affected: Department of Defense

  6. Status: Closed - Not Implemented

    Comments: Although the agency concurred with this recommendation, officials recently informed us that they will not report capability deliveries. Rather, the agency is moving towards declaring smaller increments that represent assets and site deliveries, or asset upgrades. While such delivery declarations can provide insight into performance of the ballistic missile defense system (BMDS) elements, they do not describe the capability of these assets working as an integrated ballistic missile defense system.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to develop and report to Congress in the annual BMDS Accountability Report a measure for schedule baseline goals that incorporates delivering integrated capabilities to the warfighter.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: In the June 2010 Ballistic Missile Defense System Accountability Report (BAR), Missile Defense Agency (MDA) provided its performance baselines through its operational capacity and technical baselines. By providing these baselines, MDA met the intent of our recommendation and included key performance dates for the Ballistic Missile Defense System.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to develop and report to Congress in the annual BMDS Accountability Report the dates at which performance baselines will be achieved.

    Agency Affected: Department of Defense

  8. Status: Closed - Implemented

    Comments: The Missile Defense Agency (MDA) reported acquisition baselines for program elements or major subprograms in the engineering and the manufacturing development phase and the production and deployment phase in the 2012 Ballistic Missile Defense Systems (BMDS) Accountability Report (BAR). In the 2012 BAR, MDA also reported variances to these baselines.

    Recommendation: As MDA implements its initiatives to improve transparency, accountability, and oversight, and begins efforts to manage and oversee MDA at the element level, the Secretary of Defense should direct MDA to report to Congress variances against all established baselines.

    Agency Affected: Department of Defense

  9. Status: Closed - Not Implemented

    Comments: The agency did not take any action to implement this recommendation. The Missile Defense Agency (MDA) has already committed to production of SM-3 IB missile by awarding the contract for production. The production contract was awarded in the fall 2010 for 30 missiles.

    Recommendation: The Secretary of Defense should direct MDA to delay the manufacturing decision for SM-3 Block IB missiles intended for delivery to the fleet as operational assets until after (1) the critical technologies have completed developmental testing, (2) a successful first flight test demonstrates that the system functions as intended, and (3) the successful conclusion of the manufacturing readiness review.

    Agency Affected: Department of Defense

  10. Status: Open

    Comments: In providing comments on this report, the agency concurred with this recommendation. In the June 2010 Ballistic Missile Defense System Accountability Report (BAR), Missile Defense Agency (MDA) provided some operational baselines. The agency updated those baselines in February 2011. We will assess the changes to the operational baseline and identify their effect on understanding the capabilities and limitations of new BMDS developments. Additionally, the Director, Operational Test and Evaluation stated that the many configurations of the fielded ground-based interceptor inhibits a full evaluation of the GMD program. We will continue to assess whether MDA fully adopts this approach allowing time for the warfighter and testers to fully understand hardware and software before placing it in the operational baseline.

    Recommendation: The Secretary of Defense should direct MDA to ensure that developmental hardware and software changes are not made to the operational baseline that disrupt the assessments needed to understand the capabilities and limitations of new BMDS developments.

    Agency Affected: Department of Defense

 

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