Missile Defense:

Opportunity Exists to Strengthen Acquisitions by Reducing Concurrency

GAO-12-486: Published: Apr 20, 2012. Publicly Released: Apr 20, 2012.

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Cristina T. Chaplain
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What GAO Found

In fiscal year 2011, the Missile Defense Agency (MDA) experienced mixed results in executing its development goals and Ballistic Missile Defense System (BMDS) tests. For the first time in 5 years, GAO found that all of the targets used in this year’s tests were delivered and performed as expected. None of the programs GAO assessed were able to fully accomplish their asset delivery and capability goals for the year. Flight test failures, an anomaly, and delays disrupted the development of several components and models and simulations challenges remain. Flight test failures forced MDA to suspend or slow production of three out of four interceptors currently being manufactured while failure review boards investigated their test problems.

To meet the presidential 2002 direction to initially rapidly field and update missile defense capabilities as well as the 2009 announcement to deploy missile defenses in Europe, MDA has undertaken and continues to undertake highly concurrent acquisitions. Concurrency is broadly defined as the overlap between technology development and product development or between product development and production. While some concurrency is understandable, committing to product development before requirements are understood and technologies mature or committing to production and fielding before development is complete is a high-risk strategy that often results in performance shortfalls, unexpected cost increases, schedule delays, and test problems. It can also create pressure to keep producing to avoid work stoppages. In contrast, as shown in the notional graphic below, successful programs that deliver promised capabilities for the estimated cost and schedule use a disciplined knowledge-based approach.

High levels of concurrency were present in MDA’s initial efforts and are present in current efforts, though the agency has begun emphasizing the need to follow knowledge-based development practices. During 2011, the Ground-based Midcourse Defense, the Aegis Standard Missile 3 Block IB, and the Terminal High Altitude Area Defense experienced significant ill effects from concurrency. For example, MDA’s discovery of a design problem in a new variant of the Ground-based Midcourse Defense program’s interceptors while production was underway increased costs, may require retrofit of fielded equipment, and delayed delivery. Flight test cost to confirm its capability has increased from $236 million to about $1 billion. Because MDA continues to employ concurrent strategies, it is likely that it will continue to experience these kinds of acquisition problems.

Why GAO Did This Study

MDA has spent more than $80 billion since its initiation in 2002 and plans to spend $44 billion more by 2016 to develop, produce, and field a complex integrated system of land-, sea-, and space-based sensors, interceptors, and battle management, known as the BMDS.

Since 2002, National Defense Authorization Acts have mandated that GAO prepare annual assessments of MDA’s ongoing cost, schedule, testing, and performance progress. This report assesses that progress in fiscal year 2011. To do this, GAO examined the accomplishments of the BMDS elements and supporting efforts and reviewed individual element responses to GAO data collection instruments. GAO also reviewed pertinent Department of Defense (DOD) policies and reports, and interviewed a wide range of DOD, MDA, and BMDS officials.

What GAO Recommends

GAO makes seven recommendations to the Secretary of Defense to reduce concurrency and strengthen MDA’s near- and long-term acquisition prospects. DOD concurred with six recommendations and partially concurred with one related to reporting on the cause of the Aegis BMD Standard Missile-3 Block IB test failure before committing to additional purchases. DOD did not agree to tie additional purchases to reporting the cause of the failure. DOD’s stated actions were generally responsive to problems already at hand, but did not consistently address implications for concurrency in the future, as discussed more fully in the report.

For more information, contact Cristina Chaplain at (202) 512-4841 or chaplainc@gao.gov.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To reduce concurrency and strengthen MDA's near-term acquisition prospects for the Ground-based Midcourse Defense (GMD) program, the Secretary of Defense should direct MDA to demonstrate that the new Capability Enhancement -II (CE-II) interceptor design works as intended through a successful intercept flight test in the operational environment-Flight Test GMD (FTG)-06b-prior to making the commitment to restart integration and production efforts.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DOD concurred with the recommendation. Although MDA is planning on resuming manufacturing after a successful FTG-06b intercept flight test, the test has yet to occur and is experiencing delays. It is not currently expected to be conducted until the 2nd or 3rd quarter of fiscal year 2014. Additionally, the configuration of the firmware is undergoing an update from the non-intercept flight test. We will follow up after the completion of the test to determine if the decision to restart manufacturing occurred after a successful intercept flight test.

    Recommendation: To reduce concurrency and strengthen MDA's near-term acquisition prospects for the GMD program, the Secretary of Defense should direct MDA to take appropriate steps to mitigate the effect of delaying the CE-II production restart until a successful intercept occurs. Specific consideration should be given by MDA to accelerating additional needed CE-I refurbishments.

    Agency Affected: Department of Defense

    Status: Open

    Comments: DOD concurred with this recommendation. Although MDA is planning to accelerate additional CE-I refurbishments, GMD has been unable to satisfy their refurbishment plan as expected and has recently failed a CE-I flight test. We will investigate whether any of the previous refurbishments will have to undergo further work to offset the cause of the failure. However, MDA does not expect the failure review investigation to be completed for at least two to four more months. We will follow up on this recommendation next year.

    Recommendation: To reduce concurrency and strengthen MDA's near-term acquisition prospects for the Aegis Ballistic Missile Defense (Aegis BMD) program, the Secretary of Defense should direct MDA to verify the Standard Missile-3 (SM-3) Block IB engagement capability through the planned three developmental flight tests before committing to additional production beyond those needed for developmental testing.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: In order to avoid disruptions to the production line, in March 2013 MDA received permission to award a contract to begin production of components for the next SM-3 Block IB lot, before the third flight test.

    Recommendation: To reduce concurrency and strengthen MDA's near-term acquisition prospects for the Aegis BMD program, the Secretary of Defense should direct MDA to report to the Office of the Secretary of Defense and to Congress the root cause of the SM-3 Block IB developmental flight test failure, path forward for future development, and the plans to bridge production from the SM-3 Block IA to the SM-3 Block IB before committing to additional purchases of the SM-3 Block IB.

    Agency Affected: Department of Defense

    Status: Open

    Comments: In providing comments on this report, the agency partially concurred with this recommendation. The agency has not been able to report to Congress all the information necessary to implement the recommendation.

    Recommendation: To reduce concurrency and strengthen MDA's near-term acquisition prospects for the SM-3 Block IIB program, the Secretary of Defense should direct MDA to ensure that the SM-3 Block IIB requirements are defined and feasible and that the proposed design can meet those requirements within cost, schedule, and other system constraints by delaying the commitment to product development until the program completes a successful preliminary design review.

    Agency Affected: Department of Defense

    Status: Open

    Comments: In providing comments on this report, the agency concurred with this recommendation. On March 15, 2013 the Secretary of Defense announced realignment of the Aegis Ballistic Missile Defense Standard Missile 3 Block IIB program and associated cancellation of Phase IV of the European Phased Adaptive Approach. Accordingly the president's budget request for fiscal year 2014 requests no funds for the SM-3 IIB program. Missile Defense Agency officials told us the only effort expected to continue is development of kill vehicle components to potentially be used for a future common kill vehicle; this effort is proposed for funding in the 2014 budget request as a technology development activity and no longer associated with the Aegis Ballistic Missile Defense program.

    Recommendation: To reduce concurrency and strengthen MDA's longer-term acquisition prospects, the Secretary of Defense should direct the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics to review all MDA acquisitions for concurrency, and determine whether the proper balance has been struck between the planned deployment dates and the concurrency risks taken to achieve those dates.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: In providing comments on this report, the Department of Defense concurred with our recommendation. During fiscal year 2013, Missile Defense Agency (MDA) incorporated information on concurrency for its program elements as part of their quarterly baseline execution reviews which were reviewed by the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics. In addition, the Missile Defense Executive Board, chaired by the Under Secretary of Defense for Acquisition, Technology, and Logistics, completed a report to the congressional defense committees focused on mitigation efforts and associated costs in addressing concurrency risks in the development of ballistic missile defense system components as noted by GAO in its GAO-12-486 report. The Missile Defense Executive Board, in its report, concluded that MDA's use of knowledge points, flight and ground tests, technical and programmatic reviews, and other mitigations have balanced the risk from concurrency and the need for timely delivery to the warfighter. As such, this recommendation has been implemented.

    Recommendation: To reduce concurrency and strengthen MDA's longer-term acquisition prospects, the Secretary of Defense should direct the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics to review and report to the Secretary of Defense the extent to which the capability delivery dates announced by the President in 2009 are contributing to concurrency in missile defense acquisitions and recommend schedule adjustments where significant benefits can be obtained by reducing concurrency.

    Agency Affected: Department of Defense

    Status: Closed - Not Implemented

    Comments: In providing comments on this report, the agency concurred with this recommendation. A July 2013 Missile Defense Executive Board report on concurrency in the Ballistic Missile Defense System discussed how the Missile Defense Agency mitigates concurrency risks in its programs overall. However it did not specifically include an assessment of the extent to which capability delivery dates for the European Phased Adaptive Approach announced by the president in 2009 were contributing to concurrency; instead it asserts that BMDS technology development is fundamentally driven by completion of technical milestones, not schedule declarations.

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