Missile Defense: Actions Needed to Improve Transparency and Accountability

In providing comments on this report, the Department of Defense concurred with our recommendation. The Missile Defense Agency (MDA) improved the clarity for costs presented in its February 2012 Ballistic Missile Defense System Accountability Report (BAR). For example, the agency included information in its resource baseline to describe the number of years the operation and sustainment estimate covers and added a description in an appendix to the 2012 BAR on how all of its unit costs were constructed. As such, MDA has implemented GAO's recommendation.

In providing comments on this report, the Department of Defense concurred with our recommendation. The Missile Defense Agency (MDA) changed some of the labels in the cost estimate reported in the February 2012 Ballistic Missile Defense System Accountability Report (BAR). Updating these labels better reflects what costs are being represented. In addition, the agency specifically highlighted what costs were excluded for specific portions of its resource baselines. As such, MDA has implemented GAO's recommendation.

In providing comments on this report, the Department of Defense partially concurred with our recommendation. However, in response to our recommendations, MDA updated its February 2012 Ballistic Missile Defense System Accountability Report (BAR) to include sunk costs into its short range ballistic missile, medium range ballistic missile, and intermediate range ballistic missile unit cost baselines. Incorporating the full costs into the calculations for its unit costs makes it more consistent with other program resource baselines and gives Congress and other decision makers better insights into costs associated with the BMDS so they can make more informed decisions going forward.

Since 2011, we have found deficiencies in the quality of MDA's cost estimates that underpin the resource baselines reported in its annual Ballistic Missile Defense System (BMDS) Accountability Report (BAR). However, in our December 2014 report, GAO-15-210R, we found that MDA has taken positive steps that are in-line with GAO best practices to improve the quality of its cost estimates. These steps include releasing an internal cost estimating handbook that it is well aligned with the standards in the GAO cost guide, performing internal cost reviews to evaluate the estimates against the standards presented in the handbook, assembling an independent cost group to perform an additional independent review of the quality of MDA's estimates, and receiving independent cost estimates from an external organization. Together, these are positive steps forward to ensuring that MDA's cost estimates are high quality, reliable cost estimates that are documented to facilitate external review.

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 2011 and 2012 Ballistic Missile Defense Systems (BMDS) Accountability Reports (BARs). Additionally, MDA added a chart to the 2012 BAR that identifies annual quantities for purchase, delivery, and inventory for each program in product development, initial production, or production phases.

The Missile Defense Agency (MDA) reported schedule baselines that included deliveries for program elements or major subprograms in the engineering and the manufacturing development phase and the production and deployment phase in 2012 Ballistic Missile Defense Systems (BMDS) Accountability Report (BAR). MDA also reported variances to the schedule baseline and the reasons for these variances.

In providing comments on this report, the Department of Defense concurred with our recommendation and has taken initial steps to report the test variances, by laying out the dates of the proposed changes. We also remained concerned that the variances did not include all changes to test objectives, detail when tests are deleted, nor when the altered objectives will be satisfied. In addition, as we tracked the progress of the implementation of this recommendation, we noted our concern that while MDA utilized a "mid-year" test change memorandum, the change explained the difference from the prior master test plan, but was not reported. Thus, changes that were included in the mid-year memorandum were not able to be tracked if there's only one annual test plan. However, MDA completed an effort with DOT&E and the OTA to track the movement of test objectives, and made changes to its annual Integrated Master Test Plan. Those changes now satisfy the intent of our recommendation as the variances from the prior year's test plan are now identified in response to a related recommendation we made in GAO-17-381.