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Testimony: 

Before the Subcommittee on Strategic Forces, Committee on Armed 
Services, U.S. Senate: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 2:30 p.m. EST:
Wednesday, March 10, 2010: 

Space Acquisitions: 

DOD Poised to Enhance Space Capabilities, but Persistent Challenges 
Remain in Developing Space Systems: 

Statement of Cristina T. Chaplain, Director: 
Acquisition and Sourcing Management: 

GAO-10-447T: 

GAO Highlights: 

Highlights of GAO-10-447T, a testimony before the Subcommittee on 
Strategic Forces, Committee on Armed Services, U.S. Senate. 

Why GAO Did This Study: 

The majority of large-scale acquisition programs in the Department of 
Defense’s (DOD) space portfolio have experienced problems during the 
past two decades that have driven up costs by billions of dollars, 
stretched schedules by years, and increased technical risks. To 
address the cost increases, DOD altered its acquisitions by reducing 
the number of satellites it intended to buy, reducing the capabilities 
of the satellites, or terminating major space systems acquisitions. 
Moreover, along with the cost increases, many space acquisitions are 
experiencing significant schedule delays—as much as 8 years—resulting 
in potential capability gaps in areas such as missile warning, 
military communications, and weather monitoring. This testimony 
focuses on: 

* the status of space acquisitions, 

* causal factors of acquisition problems, and, 

* efforts underway to improve acquisitions. 

In preparing this testimony, GAO relied on its body of work, including 
GAO reports on best practices, assessments of individual space 
programs, common problems affecting space system acquisitions, and the 
DOD’s acquisition policies. We have made numerous recommendations to 
the DOD in the past on matters relating to overall best practices as 
well as on individual space program acquisitions. DOD often concurred 
with our findings and recommendations and has efforts underway to 
adopt best practices. 

What GAO Found: 

A long-standing problem in DOD space acquisitions is that program and 
unit costs tend to go up significantly from initial cost estimates, 
while in some cases, the capability that was to be produced declines. 
This problem persists. However, DOD has made progress on several of 
its high-risk space programs and is expecting to launch new 
generations of satellites across various missions over the next 12 
months that should significantly advance some capabilities, 
particularly protected communications and space surveillance. While 
DOD is having success in readying some satellites for launch, other 
space acquisition programs currently in development face challenges 
that could further increase costs and delay targeted delivery dates. 
Another risk facing DOD space programs over the next few years is the 
potential for launch delays because of changes being made in the 
launch sector and an increase in the demand for certain DOD launch 
vehicles. 

Our past work has identified a number of causes for the cost growth 
and related problems, but several consistently stand out. First, on a 
broad scale, DOD starts more weapon programs than it can afford, 
creating a competition for funding that encourages low cost 
estimating, optimistic scheduling, overpromising, suppressing bad 
news, and, for space programs, forsaking the opportunity to identify 
and assess potentially more executable alternatives. Second, DOD has 
tended to start its space programs too early, that is, before it has 
the assurance that the capabilities it is pursuing can be achieved 
within available resources and time constraints. This tendency is 
caused largely by the funding process, since acquisition programs 
attract more dollars than efforts concentrating solely on proving 
technologies. Third, programs have historically attempted to satisfy 
all requirements in a single step, regardless of the design challenge 
or the maturity of the technologies necessary to achieve the full 
capability. 

DOD has been working to ensure that its space programs are more 
executable and produce a better return on investment. Some actions DOD 
and others have adopted or are pursuing include: the Acquisition 
Improvement Plan, which lists five initiatives for improving how the 
Air Force obtains new capabilities; changes in cost estimating that 
are in line with earlier GAO recommendations; and the Weapon Systems 
Acquisition Reform Act, which was signed into law in May 2009. 
However, there are still significant changes to processes, policies, 
and support needed to ensure reforms can take hold. Recent studies and 
reviews that have examined national security space have all found that 
diffuse leadership has a direct impact on the space acquisition 
process, primarily because it makes it difficult to hold any one 
person or organization accountable, and there is no single authority 
to resolve conflicts among the many organizations involved in space 
programs. Moreover, DOD continues to face gaps in critical technical 
and program expertise for space. Until both issues are resolved, 
commitment to reforms may not be sustainable. 

View [hyperlink, http://www.gao.gov/products/GAO-10-447T] or key 
components. For more information, contact Cristina Chaplain at (202) 
512-4841 or chaplainc@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the Department of Defense's 
(DOD) space acquisitions. Each year, DOD spends billions of dollars to 
acquire space-based capabilities to support current military and other 
government operations, as well as to enable DOD to transform the way 
it collects and disseminates information. Despite the significant 
investment in space, the majority of large-scale acquisition programs 
in DOD's space portfolio have experienced problems during the past two 
decades that have driven up costs by hundreds of millions and even 
billions of dollars and stretched schedules by years and increased 
technical risks. To address the cost increases, DOD altered its 
acquisitions by reducing the number of satellites it intended to buy, 
reducing the capabilities of the satellites, or terminating major 
space systems acquisitions. Moreover, along with the cost increases, 
many space acquisitions have experienced significant schedule delays--
of as much as 8 years--resulting in potential capability gaps in areas 
such as missile warning, military communications, and weather 
monitoring. These problems persist. 

My testimony today will focus on: (1) the status of space 
acquisitions, (2) the efforts DOD is taking to address causes of 
problems and increase credibility and success in its space systems 
acquisitions, and (3) what remains to be done. Notably, DOD has taken 
the important step of acknowledging the acquisition problems of the 
past and is taking action to address them, including better management 
of the acquisition process and oversight of its contractors. Moreover, 
several high-risk space programs have finally resolved technical and 
other obstacles and are close to begin delivering capability. However, 
other space acquisition programs continue to face challenges in 
meeting their cost and schedule targets and aligning the delivery of 
space assets with the ground and user systems needed to support and 
take advantage of new capability. Additionally, it may take years for 
acquisition improvements to take root and produce benefits that will 
enable DOD to realize a better return on its investment in space. 
Lastly, DOD still needs to decide how to best organize, lead, and 
support space activities. If it does not do so, its commitment to 
reforms may not be sustainable. 

Space Acquisition Challenges Persist: 

A long-standing problem in DOD space acquisitions is that program and 
unit costs tend to go up significantly from initial cost estimates, 
while in some cases, the capability that was to be produced goes down. 
Figures 1 and 2 reflect differences in total program and unit costs 
for satellites from the time the programs officially began to their 
most recent cost estimates. As figure 1 shows, in several cases, DOD 
has had to cut back on quantity and capability in the face of 
escalating costs. For example, two satellites and four instruments 
were deleted from the National Polar-orbiting Operational 
Environmental Satellite System (NPOESS) and four sensors are expected 
to have fewer capabilities. This will reduce some planned capabilities 
for NPOESS as well as planned coverage. The figures below reflect the 
total program costs developed in fiscal year 2009. (Last year, we also 
compared original cost estimates to current cost estimates for the 
broader portfolio of major space acquisitions for fiscal years 2008 
through 2013. However, we were unable to perform this analysis this 
year because, for most of its major weapon system programs, DOD in 
fiscal year 2009 did not issue complete Selected Acquisition Reports, 
which contain updated yearly program funding estimates needed to 
conduct the analysis.) 

Figure 1: Differences in Total Program Costs from Program Start and 
Most Recent Estimates (Fiscal Year 2009): 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2010 dollars (in millions): 

Program	and start date: SBIRS, 1996; 
Initial Estimate: $4,471.1; 
Most Recent Estimate: $13,638.4 (One less satellite and deferred 
requirements). 

Program	and start date: GPS II, 2000; 
Initial Estimate: $6,064.1; 
Most Recent Estimate: $7,282.1. 

Program	and start date: WGS, 2000; 
Initial Estimate: $1,163.27; 
Most Recent Estimate: $2,272.4 (Two additional satellites). 

Program	and start date: AEHF, 2001; 
Initial Estimate: $6,214.5; 
Most Recent Estimate: $10,406.8 (One less satellite). 

Program	and start date: NPOESS, 2002; 
Initial Estimate: $6,519.1; 
Most Recent Estimate: $13,161.5 (Fewer key sensors and two fewer 
satellites). 

Program	and start date: MUOS, 2004; 
Initial Estimate: $6,556.2; 
Most Recent Estimate: $6,366.6. 
	
Program	and start date: GPS IIIA, 2008; 	
Initial Estimate: $3,844.6; 
Most Recent Estimate: $3,680.9. 

Source: GAO analysis of DOD data. 

Legend: 
SBIRS = Space Based Infrared System; 
GPS = Global Positioning System; 
WGS = Wideband Global SATCOM; 
AEHF = Advanced Extremely High Frequency; 
NPOESS = National Polar-orbiting Operational Environmental Satellite 
System; 
MUOS = Mobile User Objective System. 

[End of figure] 

Figure 2: Differences in Unit Costs from Program Start to Most Recent 
Estimates (Fiscal Year 2009): 

[Refer to PDF for image: vertical bar graph] 

Fiscal year 2010 dollars (in millions): 

Program	and start date: SBIRS, 1996; 
Initial Estimate: $894.2; 
Most Recent Estimate: $3,409.6. 

Program	and start date: GPS II, 2000; 
Initial Estimate: $183.8; 
Most Recent Estimate: $220.7. 

Program	and start date: WGS, 2000; 
Initial Estimate: $387.8; 
Most Recent Estimate: $454.5. 

Program	and start date: AEHF, 2001; 
Initial Estimate: $1,242.9; 
Most Recent Estimate: $2,601.7. 

Program	and start date: NPOESS, 2002; 
Initial Estimate: $1,086.5; 
Most Recent Estimate: $3,290.4. 

Program	and start date: MUOS, 2004; 
Initial Estimate: $1,092.7; 
Most Recent Estimate: $1,061.1. 
	
Program	and start date: GPS IIIA, 2008; 	
Initial Estimate: $480.6; 
Most Recent Estimate: $460.1. 

Source: GAO analysis of DOD data. 

Legend: 
SBIRS = Space Based Infrared System; 
GPS = Global Positioning System; 
WGS = Wideband Global SATCOM; 
AEHF = Advanced Extremely High Frequency; 
NPOESS = National Polar-orbiting Operational Environmental Satellite 
System; 
MUOS = Mobile User Objective System. 

[End of figure] 

Several space acquisition programs are years behind schedule. Figure 3 
highlights the additional estimated months needed for programs to 
deliver initial operational capabilities (IOC). These additional 
months represent time not anticipated at the programs' start dates. 
Generally, the further schedules slip, the more DOD is at risk of not 
sustaining current capabilities. For example, according to Air Force 
officials, they have requested information from the space community on 
how best to address a potential gap in missile warning capabilities. 

Figure 3: Differences in Total Number of Months to IOC from Program 
Start and Most Recent Estimates: 

[Refer to PDF for image: vertical bar graph] 

Program	and start date: SBIRS, 1996; 
Initial Estimate: 86 months; 
Most Recent Estimate: System IOC no longer defined, but program is 
roughly 8 years behind its original delivery of the first satellite. 

Program	and start date: GPS II, 2000; 
Not applicable because of the program not estimating an IOC date, but 
program is about 3.5 years behind its original schedule for launch of 
the first Block IIF satellite. 

Program	and start date: WGS, 2000; 
Initial Estimate: 49; 
Most Recent Estimate: 98. 

Program	and start date: AEHF, 2001; 
Initial Estimate: 82; 
Most Recent Estimate: 141. 

Program	and start date: NPOESS, 2002; 
Initial Estimate: 107; 
Most Recent Estimate: 128. 

Program	and start date: MUOS, 2004; 
Initial Estimate: 66; 
Most Recent Estimate: 87. 
	
Program	and start date: GPS IIIA, 2008; 	
Not applicable because the program did not estimate an IOC date. 

Source: GAO analysis of DOD data. 

Legend: 
SBIRS = Space Based Infrared System; 
GPS = Global Positioning System; 
WGS = Wideband Global SATCOM; 
AEHF = Advanced Extremely High Frequency; 
NPOESS = National Polar-orbiting Operational Environmental Satellite 
System; 
MUOS = Mobile User Objective System. 

[End of figure] 

Some Acquisition Programs Have Overcome Problems and Have Satellites 
Ready for Launch: 

DOD has made progress on several of its high-risk space programs and 
is expecting significant advances in capability as a result. In 2009, 
DOD launched the third Wideband Global SATCOM (WGS) satellite, 
broadening communications capability available to warfighters--and a 
fourth WGS satellite is slated for launch in 2011. DOD also launched 
two Global Positioning System (GPS) IIR-M satellites, although one has 
still not been declared operational because of radio signal 
transmission problems. Lastly, DOD supported the launch of a pair of 
Space Tracking and Surveillance System satellites, designed to test 
the tracking of ballistic missiles in support of missile defense early 
missile warning missions--these suffered many delays as well. The 
Evolved Expendable Launch Vehicle (EELV) program had its 31st 
consecutive successful operational launch last week. 

Moreover, though it has had long-standing difficulties on nearly every 
space acquisition program, DOD now finds itself in a position to 
possibly launch the first new satellite from four different major 
space acquisition programs over the next 12 months that are expected 
to significantly contribute to missions and capabilities. These 
include the Global Positioning System (GPS) IIF satellites, the 
Advanced Extremely High Frequency (AEHF) communications satellites, 
and the Space Based Space Surveillance (SBSS) satellite--all of which 
struggled for years with cost and schedule growth, technical or design 
problems, as well as oversight and management weaknesses. Table 1 
further describes the status of these efforts. 

Table 1: Systems Nearing Launch That Have Overcome Technical and Other 
Problems: 

GPS IIF: 
The first GPS IIF satellite is expected to launch in mid-2010 and will 
upgrade timing and navigation accuracy, and add a new signal for 
civilian use. The satellite has been delayed over 3 years from its 
original launch date to May 2010--representing a further 6 month slip 
since we reported last year. Also, the cost of the GPS IIF program is 
now expected to be about $1.7 billion--almost $1 billion over the 
original cost estimate of $729 million. (This approximately 133 
percent cost increase is not apparent in figures 1 and 2 because the 
GPS II modernization program includes the development and procurement 
of 33 satellites, only 12 of which are IIF satellites.) According to 
the GPS Wing, the remaining technical issues with the first IIF 
satellite were resolved and will not affect the scheduled launch date--
the last technical issue was a desire to provide additional fault 
protection and this is being addressed with enhanced ground operations 
procedures. Additionally, the GPS Wing stated that the ground control 
software needed to support the first IIF launch has been thoroughly 
tested and in place since early this month. 

AEHF: 
AEHF, which appears to have overcome its technical problems that 
delayed the first satellite's launch and increased program cost, is 
expected to launch in September 2010, and is expected to deliver 10 
times the communications bandwidth that is available today for secure 
and protected communications. The launch of the first satellite has 
slipped almost 6 years. DOD intends to buy three more satellites, 
bringing the total to six (two of these additional satellites are not 
reflected in figures 1 and 2). The program has decided that the design 
specifications for the first three satellites will remain unchanged 
for satellites four through six, which will thus be clones except for 
the replacement of obsolete parts. The program office estimates that 
the fourth AEHF satellite will cost significantly more than the third 
satellite because some components that are no longer manufactured will 
have to be replaced and production will have to be restarted after a 4-
year gap. Because of these delays, IOC has slipped about 5 years--from 
2008 to 2013. The AEHF program office estimates the cost of the fifth 
and sixth satellites to be about $1.6 billion and $1.7 billion (then- 
years dollars), with estimated launch dates in 2018 and 2020, 
respectively. 

SBSS: 
The first SBSS Block 10 satellite is expected to launch in 2010 and is 
expected to provide greatly improved space situational awareness to 
help better understand location and mission capabilities of all 
satellites and other objects in space. The launch is expected to be 
about 3 years later than originally planned--in part because of launch 
vehicle issues unrelated to the satellite. Program officials and the 
SBSS contractors are studying the feasibility of launching the SBSS 
satellite on a Delta II rocket. The program was restructured in 2006 
after an independent review found that the requirements were 
overstated and its cost and schedule targets could not be met. 

Source: GAO analysis of DOD data and previous GAO reports. 

[End of table] 

One program that appears to be overcoming remaining technical 
problems, but for which we are still uncertain whether it can meet its 
current launch date, is the Space Based Infrared System (SBIRS) 
satellite program. The first of four geosynchronous earth-orbiting 
(GEO) satellites (two sensors have already been launched on a highly 
elliptical orbit) is expected to launch in December 2010 and is 
expected to continue the missile warning mission with sensors that are 
more capable than the satellites currently on orbit. Total cost for 
the SBIRS program is currently estimated at over $13.6 billion for 
four GEO satellites (and two sensors that have already been delivered 
and are operational), representing an increase of about $9.2 billion 
over the program's original cost, which included five GEO satellites. 
The most recent program estimate developed in 2008 set December 2009 
as the launch goal for the first GEO satellite, but program officials 
indicate that the first GEO launch will be delayed at least another 
year, bringing the total delay to approximately 8 years. The reasons 
for the delay include poor government oversight of the contractor, 
technical complexities, and rework. The program continues to struggle 
with flight software development, and during testing last year, 
officials discovered hardware defects on the first GEO satellite, 
though the program reports that they have been resolved. The launches 
of subsequent GEO satellites have also slipped as a result of flight 
software design issues. Program officials indicate that they again 
intend to re-baseline the program to more realistic cost and schedule 
estimates by mid-to late-2010. Because of the problems on SBIRS, DOD 
began a follow-on system effort, now known as Third Generation 
Infrared Surveillance (3GIRS), to run in parallel with the SBIRS 
program. For fiscal year 2011, DOD plans to cancel the 3GIRS effort, 
but also plans to provide funds under the SBIRS program for one of the 
3GIRS infrared demonstrations nearing completion. 

Other Programs Still Susceptible to Cost and Schedule Overruns: 

While DOD is having success in readying some satellites for launch, 
other space acquisition programs face challenges that could further 
increase cost and delay targeted delivery dates. The programs that may 
be susceptible to cost and schedule challenges include NPOESS, Mobile 
User Objective System (MUOS), and GPS IIIA. Delays in both the NPOESS 
and MUOS programs have resulted in critical potential capability gaps 
for military and other government users. The GPS IIIA program was 
planned with an eye toward avoiding problems that plagued the GPS IIF 
program, but the schedule leaves little room for potential problems 
and there is a risk that the ground system needed to operate the 
satellites will not be ready when the first satellite is launched. 
Table 2 describes the status of these efforts in more detail. 

Table 2: Programs Still Susceptible to Cost and Schedule Overruns: 

NPOESS: 
The NPOESS program has continued to experience technical problems 
resulting in further cost and schedule increases. The program was 
restructured in 2007, which led to a reduction in the number of 
satellites from six to four and deletions or replacements of satellite 
sensors. NPOESS was originally estimated to cost $6.5 billion but the 
latest estimate is about $13.2 billion--representing more than a 100- 
percent cost increase. Furthermore, the launch of the first satellite 
has slipped about 5 years--from April 2009 to March 2014. While the 
goal of the restructure was to lower future cost and schedule risks, 
it increased the risk of a satellite coverage gap and significantly 
reduced data collection capabilities. DOD programmed funds for NPOESS 
for fiscal year 2011, but according to the White House's Office of 
Science and Technology Policy, the NPOESS program is to be 
restructured. This would allow DOD and the Department of Commerce to 
embark on separate weather satellite programs to meet their unique 
needs. The cost and schedule estimates for the NPOESS program cited 
above do not reflect the latest events surrounding the program. At 
this juncture, many questions surround DOD's strategy for moving 
forward, including the following: (1) How does DOD intend to use the 
funding programmed for fiscal year 2011? (2) Is the NPOESS contract to 
be terminated, and if so, what are the anticipated termination costs 
for work under contract? (3) What aspects of the NPOESS program will 
continue to be utilized for future efforts? (4) Will the approach 
going forward be more or less costly, and will the delivery of 
capability be sooner or later than that of NPOESS? While many of these 
details have yet to be worked out, this major redirection so late in 
the acquisition process may pose significant risk to the nation's 
ability to reconstitute its weather satellites in a timely fashion to 
mitigate lapses in data collection capabilities. 

MUOS: 
The MUOS communications satellite program now estimates a 21-month 
delay--from March 2010 to December 2011--in the delivery of on-orbit 
capability from the first satellite. This represents an additional 10-
month slip from the slip we reported last year, which was caused by 
continuing satellite development challenges. In July 2009, a Navy-
initiated review of the program found that while the technical 
challenges the program was experiencing could be solved, the MUOS 
budget was inadequate and its schedule was optimistic. Subsequently, 
in late 2009 the Navy established new cost and schedule baselines for 
the program (we have yet to obtain the new cost baseline, and as such, 
figures 1 and 2 do not reflect updated MUOS cost estimates). In 
January 2011, communications are predicted to degrade below the 
required level of availability and remain so until the first MUOS 
satellite is available for operations. The MUOS program office is 
addressing the potential capability gap by activating dual digital 
receiver unit operations on a legacy satellite, leasing commercial 
ultra-high-frequency satellite communications services, and examining 
the feasibility of expanded digital receiver unit operations on the 
legacy payloads of the MUOS satellites. 

GPS IIIA: 
While the GPS IIIA program has been structured by the Air Force to 
prevent the mistakes made on the IIF program, the Air Force aims to 
deliver the GPS IIIA satellites 3 years faster than the IIF 
satellites. According to Air Force officials, the IIIA contractor 
retained some of its workforce from the IIR-M program and plans to 
incorporate a previously developed satellite bus--efforts that reduce 
program risk. However, we continue to believe the IIIA schedule is 
optimistic given the program's late start, past trends in space 
acquisitions, and challenges facing the new contractor.[A] To increase 
confidence in the schedule for delivering the ground control system 
for IIIA (the next generation operational control segment known as 
OCX), the GPS Wing added 16 months of development time to the effort. 
This means that OCX is now scheduled to be fielded after the May 2014 
launch of the first GPS IIIA satellite. The Wing is currently 
assessing alternate approaches for resolving the fielding issue, which 
will likely have cost consequences. 

Source: GAO analysis of DOD data and previous GAO reports. 

[A] GAO, Global Positioning System: Significant Challenges in 
Sustaining and Upgrading Widely Used Capabilities, [hyperlink, 
http://www.gao.gov/products/GA0-09-325], (Washington, D.C.: April 30, 
2009). 

[End of table] 

Challenges in Aligning Space System Components: 

This past year we also assessed the levels at which DOD's satellites, 
ground control, and user terminals were synchronized to provide 
maximum benefit to the warfighter.[Footnote 1] Most space systems 
consist of satellites, ground control systems, and user terminals, 
though some space systems only require ground control systems to 
provide capability to users. Ground control systems are generally used 
to (1) download and process data from satellite sensors and 
disseminate this information to warfighters and other users and (2) 
maintain the health and status of the satellites, including steering 
the satellites and ensuring that they stay in assigned orbits. 

User terminals, typically procured by the military services and 
managed separately from associated satellites and ground control 
systems, can range from equipment hosted on backpacks to terminals 
mounted on Humvees, airborne assets, or ships. Terminals can be used 
to help the warfighter determine longitude, latitude, and altitude via 
GPS satellites, or securely communicate with others via AEHF 
satellites. Some user terminals are not solely dedicated to delivering 
capability from a specific satellite system. For example, the Joint 
Tactical Radio System is the primary user terminal associated with the 
MUOS program, but the system is also designed to be the next 
generation of tactical radios, allowing extensive ground-to-ground 
communication as well. 

Overall, we found the alignment of space system components proved to 
be challenging to DOD. Specifically, we found that for six of DOD's 
eight major space system acquisitions, DOD has not been able to align 
delivery of satellites with ground control systems, user terminals, or 
both. Of the eight major space system acquisitions, five systems' 
ground control system efforts are optimally aligned to deliver 
capability with their companion satellites, while three are not. For 
the five space systems requiring user terminals, none was aligned. In 
some cases, capability gaps of 4 or more years have resulted from 
delays in the fielding of ground control systems or user terminals. 
When space system acquisitions are not aligned, satellite capability 
is available but underutilized, though in some cases, work-around 
efforts can help compensate for the loss or delay of capability. 
Moreover, when ground systems, user terminals, or both are not aligned 
with satellites, there are significant limitations in the extent to 
which the system as a whole can be independently tested and verified. 
[Footnote 2],[Footnote 3] 

Launch Manifest Issues: 

Another risk facing DOD space programs for the next few years is the 
potential for increased demand for certain launch vehicles. DOD is 
positioned to launch a handful of satellites across missions over the 
next 2 years that were originally scheduled for launch years ago. 
Until recently, DOD had four launch pads on the East Coast from which 
to launch military satellites. In 2009, DOD launched the final two GPS 
IIR-M satellites using the Delta II launch vehicle, thereby 
discontinuing its use of the Delta II line and its associated launch 
infrastructure. DOD now plans to launch most of its remaining 
satellites using one of DOD's EELV types--Atlas V or Delta IV--from 
one of two East Coast launch pads. At the same time, the National 
Aeronautics and Space Administration (NASA) plans to use the Delta II 
to launch at least three major missions before that launch vehicle is 
retired. In addition, NASA is already manifesting other major missions 
on the Atlas V. Given the expected increased demand for launches--many 
of which are considered high priority--and the tempo of launches DOD 
has achieved with EELV, it appears that the launch manifest is 
crowded. As a result, if programs still struggling with technical, 
design, or production issues miss their launch dates, the consequences 
could be significant, as it may take many months to secure new dates. 
Some of DOD's satellites are dual integrated, which means they can be 
launched on either type of EELV. The Air Force deserves credit for 
designing the satellites this way because it offers more flexibility 
in terms of launch vehicle usage, but there are also cost and schedule 
implications associated with rescheduling from one EELV type to the 
other. Moreover, DOD can request its launch provider to speed up the 
transition time between launches, although this would also increase 
costs. Nevertheless, Air Force officials stated that they were 
confident that the higher launch rates could be achieved, especially 
if a particular satellite's priority increased. According to Air Force 
officials, they have already begun to implement means to address these 
issues. 

DOD Is Taking Actions to Address Space and Weapon Acquisition Problems: 

DOD has been working to ensure that its space programs are more 
executable and produce a better return on investment. Many of the 
actions it is taking address root causes of problems, though it will 
take time to determine whether these actions are successful and they 
need to be complemented by decisions on how best to lead, organize, 
and support space activities. 

Our past work has identified a number of causes behind the cost growth 
and related problems, but several consistently stand out. First, on a 
broad scale, DOD starts more weapon programs than it can afford, 
creating a competition for funding that encourages low cost 
estimating, optimistic scheduling, overpromising, suppressing bad 
news, and for space programs, forsaking the opportunity to identify 
and assess potentially more executable alternatives. Second, DOD has 
tended to start its space programs too early, that is, before it has 
the assurance that the capabilities it is pursuing can be achieved 
within available resources and time constraints. This tendency is 
caused largely by the funding process, since acquisition programs 
attract more dollars than efforts concentrating solely on proving 
technologies. Nevertheless, when DOD chooses to extend technology 
invention into acquisition, programs experience technical problems 
that require large amounts of time and money to fix. Moreover, there 
is no way to accurately estimate how long it would take to design, 
develop, and build a satellite system when critical technologies 
planned for that system are still in relatively early stages of 
discovery and invention. Third, programs have historically attempted 
to satisfy all requirements in a single step, regardless of the design 
challenge or the maturity of the technologies necessary to achieve the 
full capability. DOD has preferred to make fewer but heavier, larger, 
and more complex satellites that perform a multitude of missions 
rather than larger constellations of smaller, less complex satellites 
that gradually increase in sophistication. This has stretched 
technology challenges beyond current capabilities in some cases and 
vastly increased the complexities related to software. Programs also 
seek to maximize capability on individual satellites because it is 
expensive to launch. 

In addition, problematic implementation of an acquisition strategy in 
the 1990s, known as Total System Performance Responsibility, for space 
systems resulted in problems on a number of programs because it was 
implemented in a manner that enabled requirements creep and poor 
contractor performance--the effects of which space programs are still 
addressing. We have also reported on shortfalls in resources for 
testing new technologies, which coupled with less expertise and fewer 
contractors available to lead development efforts, have magnified the 
challenge of developing complex and intricate space systems. 

Our work--which is largely based on best practices in the commercial 
sector--has recommended numerous actions that can be taken to address 
the problems we identified. Generally, we have recommended that DOD 
separate technology discovery from acquisition, follow an incremental 
path toward meeting user needs, match resources and requirements at 
program start, and use quantifiable data and demonstrable knowledge to 
make decisions to move to next phases. We have also identified 
practices related to cost estimating, program manager tenure, quality 
assurance, technology transition, and an array of other aspects of 
acquisition program management that could benefit space programs. 
These practices are detailed in appendix I. 

DOD is implementing an array of actions to reform how weapons and 
space systems are acquired. For space in particular, DOD is working to 
ensure critical technologies are matured before large-scale 
acquisition programs begin; requirements are defined early in the 
process and are stable throughout; and that system design remains 
stable, according to the Director of Space and Intelligence under 
DOD's Office of the Secretary of Defense for Acquisition, Technology 
and Logistics. DOD also intends to follow incremental or evolutionary 
acquisition processes versus pursuing significant leaps in 
capabilities involving technology risk. The Director of Space and 
Intelligence also told us that DOD is revisiting the use of military 
standards in its acquisitions and providing more program and 
contractor oversight. The approach described to us by the Director of 
Space and Intelligence mirrors best practices identified in our 
reports. Moreover, some actions--described in the table below--have 
already been taken to ensure acquisitions are more knowledge-based. 

Table 3: Actions being Taken to Address Space Acquisition Problems: 

Requirements: 
The Air Force leadership signed the Acquisition Improvement Plan which 
lists five initiatives for improving how the Air Force obtains new 
capabilities--one of these initiatives covers requirements generation 
and includes the direction for the Air Force to certify the 
acquisition community can successfully fulfill required capabilities 
in conjunction with the Air Force Requirements for Operational 
Capabilities Council. Certification means the required capabilities 
can be translated in a clear and unambiguous way for evaluation in a 
source selection, are prioritized if appropriate, and organized into 
feasible increments of capability. 

Program Management: 
The Space and Missile Systems Center--the Air Force's primary 
organization responsible for acquiring space systems--resurrected a 
program management assistance group in 2007 to help mitigate program 
management, system integration, and program control deficiencies 
within specific ongoing programs. This group assists and supplements 
wing commanders and program offices in fixing common problems, raising 
core competencies, and providing a consistent culture that sweeps 
across programs. According to the GPS Wing Commander, this group was 
an integral part of the overall process providing application-oriented 
training, templates, analyses, and assessments vital to the GPS IIIA 
baseline review. 

Workforce: 
The Air Force is continuing efforts to bring space operators and space 
system acquirers together through the Advanced Space Operations School 
and the National Security Space Institute. The Air Force anticipates 
that this higher-level education will be integral to preparing space 
leaders with the best acquisition know-how. 

Cost Estimating: 
Both the Air Force and the National Reconnaissance Office (NRO) are 
taking actions to strengthen cost-estimating. For example, we 
recommended that the Secretary of the Air Force ensure that cost 
estimates are updated as major events occur within a program that 
could have a material impact on cost, and that the roles and 
responsibilities of the various Air Force cost-estimating 
organizations be clearly articulated.[A] An Air Force policy directive 
now requires that cost estimates for major programs be updated 
annually, and lays out roles and responsibilities for Air Force cost-
estimating organizations. Furthermore, in its attempts to make more 
accurate cost estimates for commercial-like programs (characterized by 
use of fixed-price contracts, less complex satellites, lower costs, 
and short development timeframes), the NRO cost analysis improvement 
group has developed a cost-estimating methodology that considers 
acquisition complexity (such as level of oversight and amount of 
program reporting), in addition to program technical complexity, and 
stated it is considering applying the methodology to more traditional 
satellite acquisition programs. 

Acquisition Policy: 
DOD recently eliminated the tailored national security space 
acquisition policy and moved the acquisition of space systems under 
DOD's updated acquisition guidance for defense acquisition programs 
(DOD Instruction 5000.02). DOD is currently developing an addendum for 
the Instruction that would introduce specific management and oversight 
processes for acquiring major space systems. 

Alignment of Ground Control Systems; In better aligning space system 
components, DOD acknowledged that the integration and consolidation of 
satellite ground control systems has many benefits, and established 
the Space and Intelligence Office to more effectively conduct 
oversight of the space and intelligence enterprise. DOD further 
disestablished two oversight boards that were deemed less effective in 
providing oversight. 

Source: GAO analysis of DOD data and previous GAO reports. 

[A] GAO, Space Acquisitions: DOD Needs to Take More Action to Address 
Unrealistic Initial Cost Estimates of Space Systems, [hyperlink, 
http://www.gao.gov/products/GAO-07-96], (Washington, D.C.: November 
17, 2006). 

[End of table] 

Congress has also acted on a broader scale through the Weapon Systems 
Acquisition Reform Act, which was signed into law on May 22, 2009. 
[Footnote 4] The goal of this new statute is to improve acquisition 
outcomes in DOD, with specific emphasis on major defense acquisition 
programs (MDAP) and major automated information systems. According to 
the President of the United States this legislation is designed to 
limit cost overruns before they spiral out of control and will 
strengthen oversight and accountability by appointing officials who 
will be charged with closely monitoring the weapons systems being 
purchased to ensure that costs are controlled. DOD states in its 2010 
Quadrennial Defense Review[Footnote 5] that the law also will 
substantially improve the oversight of major weapons acquisition 
programs, while helping to put MDAPs on a sound footing from the 
outset by addressing program shortcomings in the early phases of the 
acquisition process. DOD also states that it is undertaking a far- 
reaching set of reforms to achieve these goals and to improve how DOD 
acquires and fields critical capabilities for current and future wars 
and conflicts. 

Additional Decisions on Leadership, Organization, and Support Are 
Still Needed: 

The actions that the Air Force and Office of the Secretary of Defense 
have been taking to address acquisition problems are good steps. 
However, there are still more significant changes to processes, 
policies, and support needed to ensure that reforms can take hold. 
Recent studies and reviews examining the leadership, organization, and 
management of national security space have all found that there is no 
single authority responsible below the President and that authorities 
and responsibilities are spread across the department. In fact, the 
national security space enterprise comprises a wide range of 
government and nongovernment organizations responsible for providing 
and operating space-based capabilities serving both military and 
intelligence needs. 

In 2008, for example, a congressionally chartered commission (known as 
the Allard Commission)[Footnote 6] reported that responsibilities for 
military space and intelligence programs were scattered across the 
staffs of DOD organizations and the intelligence community and that it 
appeared that "no one is in charge" of national security space. The 
same year, the House Permanent Select Committee on Intelligence 
reported similar concerns, focusing specifically on difficulties in 
bringing together decisions that would involve both the Director of 
National Intelligence and the Secretary of Defense.[Footnote 7] Prior 
studies, including those conducted by the Defense Science Board and 
the Commission to Assess United States National Security Space 
Management and Organization (Space Commission),[Footnote 8] have 
identified similar problems, both for space as a whole and for 
specific programs. While these studies have made recommendations for 
strengthening leadership for space acquisitions, no major changes to 
the leadership structure have been made in recent years. In fact, an 
executive agent position within the Air Force that was designated in 
2001 in response to a Space Commission recommendation to provide 
leadership has not been filled since the last executive resigned in 
2007. 

Diffuse leadership has a direct impact on the space acquisition 
process, primarily because it makes it difficult to hold any one 
person or organization accountable for balancing needs against wants, 
for resolving conflicts among the many organizations involved with 
space, and for ensuring that resources are dedicated where they need 
to be dedicated. Many of the cost and schedule problems we identified 
for the GPS IIF program, for instance, were tied in part to diffuse 
leadership and organizational stovepipes, particularly with respect to 
DOD's ability to coordinate delivery of space, ground, and user 
assets. In fact, DOD is now facing a situation where satellites with 
advances in capability will be residing for years in space without 
users being able to take full advantage of them because investments 
and planning for ground, user, and space components were not well-
coordinated. 

Congressional and DOD studies have also called for changes in the 
national security space organizational structure to remove cultural 
barriers to coordinating development efforts and to better incorporate 
analytical and technical support from an organization that is 
augmented with military and intelligence community expertise. 

Finally, studies have identified insufficient numbers of experienced 
space acquisition personnel and inadequate continuity of personnel in 
project management positions as problems needing to be addressed in 
the space community. Our own studies have identified gaps in key 
technical positions, which we believed increased acquisition risks. 
For instance, in a 2008 review of the EELV program, we found that 
personnel shortages at the EELV program office occurred particularly 
in highly specialized areas, such as avionics and launch vehicle 
groups.[Footnote 9] These engineers work on issues such as reviewing 
components responsible for navigation and control of the rocket. 
Moreover, only half the government jobs in some key areas were 
projected to be filled. These and other shortages in the EELV program 
office heightened concerns about DOD's ability to effectively manage 
the program using a contracting strategy for EELV that required 
greater government attention to the contractor's technical, cost, and 
schedule performance information. In a recent discussion with GAO, the 
Director of Space and Intelligence under DOD's Office of the Secretary 
of Defense for Acquisition, Technology and Logistics stated that the 
primary obstacle to implementing reforms in space is the lack of 
"bench strength," primarily technical and systems engineering 
expertise. 

Concluding Remarks: 

In conclusion, DOD space is at a critical juncture. After more than a 
decade of acquisition difficulties, which have created potential gaps 
in capability, diminished DOD's ability to invest in new space 
systems, and lessened DOD's credibility to deliver high-performing 
systems within budget and on time, DOD is finally positioned to launch 
new generations of satellites that promise vast enhancements in 
capability. Moreover, recent program cancellations have alleviated 
competition for funding and may have allowed DOD to focus on fixing 
problems and implementing reforms rather than taking on new, complex, 
and potentially higher-risk efforts. But these changes raise new 
questions. Specifically, when can investments in new programs be made? 
How can reforms really take hold when leadership is diffuse? How can 
reforms take hold when there are still organizational barriers that 
prevent effective coordination? And lastly, how can acquisitions be 
successful if the right technical and programmatic expertise is not in 
place? Clearly, there are many challenges ahead for space. We look 
forward to working with the DOD to help ensure that these and other 
questions are addressed. 

Mr. Chairman, this concludes my prepared statement. I would be happy 
to answer any questions you or members of the subcommittee may have at 
this time. 

Contacts and Acknowledgments: 

For further information about this statement, please contact Cristina 
Chaplain at (202) 512-4841 or chaplainc@gao.gov. Contact points for 
our Offices of Congressional Relations and Pubic Affairs may be found 
on the last page of this statement. Individuals who made key 
contributions to this statement include Art Gallegos, Assistant 
Director; Greg Campbell; Rich Horiuchi; Alyssa Weir; and Peter Zwanzig. 

[End of section] 

Appendix I: Actions Needed to Address Space and Weapon Acquisition 
Problems: 

Before undertaking new programs: 

* Prioritize investments so that projects can be fully funded and it 
is clear where projects stand in relation to the overall portfolio. 

* Follow an evolutionary path toward meeting mission needs rather than 
attempting to satisfy all needs in a single step. 

* Match requirements to resources--that is, time, money, technology, 
and people--before undertaking a new development effort. 

* Research and define requirements before programs are started and 
limit changes after they are started. 

* Ensure that cost estimates are complete, accurate, and updated 
regularly. 

* Commit to fully fund projects before they begin. 

* Ensure that critical technologies are proven to work as intended 
before programs are started. 

* Assign more ambitious technology development efforts to research 
departments until they are ready to be added to future generations 
(increments) of a product. 

* Use systems engineering to close gaps between resources and 
requirements before launching the development process. 

During program development: 

* Use quantifiable data and demonstrable knowledge to make go/no-go 
decisions, covering critical facets of the program such as cost, 
schedule, technology readiness, design readiness, production 
readiness, and relationships with suppliers. 

* Do not allow development to proceed until certain thresholds are 
met--for example, a high proportion of engineering drawings completed 
or production processes under statistical control. 

* Empower program managers to make decisions on the direction of the 
program and to resolve problems and implement solutions. 

* Hold program managers accountable for their choices. 

* Require program managers to stay with a project to its end. 

* Hold suppliers accountable to deliver high-quality parts for their 
products through such activities as regular supplier audits and 
performance evaluations of quality and delivery, among other things. 

* Encourage program managers to share bad news, and encourage 
collaboration and communication. 

Source: GAO. 

[End of section] 

Appendix II: Scope and Methodology: 

In preparing this testimony, we relied on our body of work in space 
programs, including previously issued GAO reports on assessments of 
individual space programs, common problems affecting space system 
acquisitions, and the Department of Defense's (DOD) acquisition 
policies. We relied on our best practices studies, which comment on 
the persistent problems affecting space acquisitions, the actions DOD 
has been taking to address these problems, and what remains to be 
done, as well as Air Force documents addressing these problems and 
actions. We also relied on work performed in support of our annual 
weapons system assessments, and analyzed DOD funding estimates to 
assess cost increases and investment trends for selected major space 
acquisition programs. The GAO work used in preparing this statement 
was conducted in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

[End of section] 

Footnotes: 

[1] GAO, Defense Acquisitions: Challenges in Aligning Space System 
Components, [hyperlink, http://www.gao.gov/products/GAO-10-55] 
(Washington, D.C.: Oct. 29, 2009). 

[2] In making determinations about whether space system acquisitions 
were aligned, we examined whether there were gaps between fielding 
dates of satellite capabilities compared to ground system capabilities 
and whether lower percentages of user terminal types were planned to 
be fielded by the space system acquisitions' planned initial 
capability. Generally we considered aspects of a space acquisition 
unaligned if there was a gap of years, rather than months, between the 
fielding dates of significant capabilities. Regarding user terminals, 
we only considered these unaligned compared to satellite capabilities 
when user terminals did not meet DOD's measure of synchronization for 
military satellite communications space acquisitions. This measure, 
established by the U.S. Strategic Command, a primary user of DOD space 
systems, asserts that 20 percent of any type of user terminal should 
be fielded by a space system acquisition's initial capability date and 
85 percent should be fielded by its full capability date. 

[3] It should be noted that while there are criteria for 
communications satellites, there are no criteria available in DOD that 
determine the optimum alignment or synchronization for the broader 
portfolio of satellite programs. This is principally because of 
inherent differences in satellite missions and their associated ground 
and user assets, according to officials involved in space system 
development as well as acquisition oversight. 

[4] Pub. L. No. 111-23, 123 Stat. 1704 (2009). 

[5] Department of Defense, Quadrennial Defense Review Report 
(Washington, D.C., Feb. 1, 2010). 

[6] Institute for Defense Analyses, Leadership, Management, and 
Organization for National Security Space: Report to Congress of the 
Independent Assessment Panel on the Organization and Management of 
National Security Space (Alexandria, VA., July 2008). 

[7] House Permanent Select Committee on Intelligence, Report on 
Challenges and Recommendations for United States Overhead Architecture 
(Washington, D.C., October 2008). 

[8] Department of Defense, Report of the Commission to Assess United 
States National Security Space Management and Organization 
(Washington, D.C., Jan. 11, 2001). 

[9] GAO, Space Acquisitions: Uncertainties in the Evolved Expendable 
Launch Vehicle Program Pose Management and Oversight Challenges, 
[hyperlink, http://www.gao.gov/products/GAO-08-1039] (Washington, 
D.C.: Sept. 26, 2008). 

[End of section] 

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