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entitled 'Defense Acquisitions: Sound Business Case Needed to Implement 
Missile Defense Agency's Targets Program' which was released on 
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Report to Congressional Committees: 

United States Government Accountability Office:
GAO: 

September 2008: 

Defense Acquisitions: 

Sound Business Case Needed to Implement Missile Defense Agency's 
Targets Program: 

GAO-08-1113: 

GAO Highlights: 

Highlights of GAO-08-1113, a report to congressional committees. 

Why GAO Did This Study: 

The Missile Defense Agency (MDA) is likely to spend $460 million 
annually on missiles used as targets for flight tests. Executing these 
tests depends on the quality and availability of targets. Congress 
asked GAO to assess (1) if MDA is providing reliable targets; (2) the 
causes of any deficiencies; and (3) if resolutions exist for any 
problems identified. 

To do this, GAO analyzed acquisition policies and procedures; flight 
test data; and budget, program execution, and acquisition materials; 
and interviewed MDA and DOD officials. 

What GAO Found: 

MDA has difficulty in both supplying targets for missile defense 
testing as well as in developing a new family of short, medium and long-
range targets. The number of target failures and anomalies (failing to 
achieve one or more non-critical mission objective or partially 
achieving a critical mission objective) during flight tests has 
increased since 2006, contributing to delays in flight tests and 
modification of flight test objectives. In addition, the average unit 
cost of targets has grown significantly, from $4.5 million to $8.5 
million from 2002 to 2006 to current estimates of $32 million to $65 
million for the targets planned from 2008 to 2010. Many factors 
contribute to this cost growth, including increased complexity of 
targets to better reflect an evolving threat and late changes to target 
requirements on contract. 

MDA抯 difficulty in supplying existing targets is driven by diminishing 
sources for components, unanticipated costs, and problems incorporating 
requirements into contracts and establishing program baselines. MDA has 
also encountered problems developing the new family of targets, an 
effort currently estimated to cost at least $1 billion. The problems 
are due, at least in part, to the fact that a sound business case was 
not established before proceeding with the program and the attendant 
contracting strategy. The decision to pursue this new family of targets 
was made without a formal cost analysis and it is unclear whether MDA 
evaluated all alternatives before making this commitment. GAO also 
could not identify an original approved acquisition strategy for the 
new family of targets. Consequently, developmental problems have arisen 
in the new family of targets, leading to cost growth, delayed flight 
tests, and deferral of several key capabilities. 

MDA is taking a series of actions to address these problems, such as: 

* establishing technical, cost, and schedule baselines for all missions 
in the 2-year integrated master test plan; 

* drafting long-term target capability requirements; 

* developing a new cost model for targets; 

* making plans to improve risk management by considering program-wide 
issues, and including programmatic risks, cost and schedule in risk 
assessments. 

However, the prospects for resolution of the target acquisition 
problems are unclear and the overall success of the Ballistic Missile 
Defense System flight test program depends on the success of a new 
family of targets under development. 

What GAO Recommends: 

GAO recommends that the Secretary of Defense establish a revised 
business case for providing targets for a robust flight test program 
and use that as a guide to align the program抯 plans and resources. 
DOD partially concurred with these two recommendations, but did not 
concur with a third recommendation that it report its targets 
acquisition strategy, business case, and baselines to Congress, 
preferring to rely on briefings to Congressional staff and information 
in the annual budget submission. GAO is therefore suggesting that 
Congress consider requiring DOD to report this information to the 
Congressional Defense Committees. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1113]. For more 
information, contact Paul L. Francis, 202-512-4841, francisp@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Increased Target Failures and Anomalies Have Made It Difficult to 
Supply Reliable Targets On Time: 

Several Factors Contribute to Problems with Targets: 

MDA Is Undertaking A Series of Initiatives To Address Problems with 
Targets Development, but Challenges Remain: 

Conclusions: 

Recommendations For Executive Action: 

Matters For Congressional Consideration: 

Agency Comments and Our Evaluation: 

Appendix I: Briefing to Defense Committees on Review of the Missile 
Defense Agency's Targets Program: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contact and Staff Acknowledgements: 

Abbreviations: 

BMDS: Ballistic Missile Defense System: 

CDR: critical design review: 

DOT&E: Director, Operational Test & Evaluation: 

FTF: Flexible Target Family: 

GMD: Ground-based Midcourse Defense: 

GSE: government support equipment: 

LV: launch vehicle: 

LSI: Lead Systems Integrator: 

MBRV: modified ballistic reentry vehicle: 

MDA: Missile Defense Agency: 

MDEB: Missile Defense Executive Board: 

RV: reentry vehicle: 

RDC: radar data collection: 

STSS: Space-based Tracking & Surveillance System: 

THAAD: Terminal High Altitude Area Defense: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

September 26, 2008: 

The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate: 

The Honorable Ike Skelton:
Chairman:
The Honorable Duncan Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives: 

The Department of Defense's (DOD) Missile Defense Agency (MDA) is 
planning on spending on the order of about $460 million per year to 
develop and build missiles to serve as targets for flight tests. MDA 
uses its sensors and weapons to track and intercept the targets, which 
are sophisticated missiles in their own right. The quality and 
availability of these targets are instrumental to the execution of 
MDA's flight test program. This report and its appendixes respond to a 
mandate concerning the reliability and availability of the MDA targets 
program contained in the Conference Report accompanying the National 
Defense Authorization Act for Fiscal Year 2008 (H.R. Conf. Rep. No. 110-
477). 

We focused our review on the following objectives: (1) Is the Missile 
Defense Agency meeting the need for reliable and timely targets for the 
flight test program? (2) What are the causes of any deficiencies or 
delays? (3) What are the prospects for resolution of any problems 
identified? On July 17, 2008, we briefed Committee staff on our 
findings and conclusions. The detailed briefing can be found in 
appendix I. This report summarizes the briefing and includes 
recommendations to the Secretary of Defense and a matter for 
Congressional consideration. 

In developing the information for this report, we focused our work on 
assessing the ability of MDA's targets program to provide support for 
the test efforts. We analyzed test plans and schedules, flight test 
reports, budget documents, and program execution reviews. We also 
analyzed program directives and acquisition policies and procedures. We 
interviewed MDA officials from the Ground-based Midcourse Defense 
(GMD), Terminal High Altitude Area Defense (THAAD), Aegis BMD, and the 
Targets and Countermeasures program offices as well as officials from 
MDA's Business, Test and Engineering Directorates. We also interviewed 
officials from DOD's Office of the Director, Operational Test and 
Evaluation (DOT&E) and the U.S. Army's Space and Missile Defense 
Command. Our analysis covered data ranging from December 2003 through 
July 2008. 

We assessed the reliability of the data on missile defense targets by 
evaluating the agency's management control processes, interviewing 
agency officials knowledgeable about the data, and confirming the 
accuracy of MDA-generated data with multiple sources within MDA and, 
when possible, with independent experts. We determined that the data 
were sufficiently reliable for the purposes of this report. 

We conducted this performance audit from February 2008 through 
September 2008, 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. 

Results in Brief: 

MDA has difficulty in both supplying targets for missile defense 
testing as well as in developing a new family of short, medium and long-
range targets. The number of target failures and anomalies during 
flight tests has increased since 2006, contributing to delays in flight 
tests and modification of flight test objectives.[Footnote 1] MDA's 
difficulty in supplying targets is driven by diminishing sources for 
components, unanticipated costs, problems incorporating requirements 
into contracts and establishing program baselines, and the lack of a 
sound business case for its current approach to supplying targets. 
Additionally, developmental problems have risen in the new family of 
targets, leading to cost growth, delayed flight tests, and deferral of 
several key capabilities. 

We are recommending that the Secretary of Defense (1) establish a 
revised business case for providing targets for a robust flight test 
program and (2) use it as a guide to align the program's plans and 
resources. 

Background: 

MDA is the agency responsible for designing, developing, producing, and 
procuring targets for testing the nation's ballistic missile defense 
system. In 2001, MDA initiated a Targets and Countermeasures Program 
Office. The MDA's Targets and Countermeasures program oversees the 
design, development, fabrication, and production of ballistic missile 
targets and countermeasures to be used in the MDA flight test program. 
These targets must represent the full spectrum of threat missile 
capabilities (separating and nonseparating reentry vehicles, varying 
radar cross sections, countermeasures, etc.) and ranges. The 
appropriate targets are engaged by both strategic and tactical missile 
defense systems developed by MDA, the Army, and the Navy. 

MDA originally used numerous contractors to design and build the 
various targets; however in December 2003 Lockheed Martin was awarded a 
contract to be the lead systems integrator for most of the existing 
targets. The lead systems integrator was chosen to provide system-level 
management, implement a single organization and management structure, 
and to manage all processes. Additionally, MDA contracted with Lockheed 
Martin to plan and develop a new family of targets called the Flexible 
Target Family (FTF) because existing targets were deemed no longer able 
to meet test needs due to aging components and an evolving threat. 
MDA's original goals for FTF included commonality of components across 
the family of short, medium and long-range targets, the purchase of 
inventory, reduced cycle time in the building of individual targets, 
increased complexity, cost savings, and ground, air, and sea launch 
capabilities. Although the development of FTF began in 2005, the first 
FTF target has yet to be delivered. 

While MDA manages the targets program, the Missile Defense Executive 
Board (MDEB), which was created in March 2007, provides advice and 
recommendations on the missile defense program. Specifically, the MDEB 
reviews the implementation of strategic policies and plans, program 
priorities, and investment options for protecting the United States and 
its allies from missile attacks. The MDEB is chaired by the Under 
Secretary of Defense for Acquisition, Technology and Logistics, who is 
authorized to make recommendations to the Deputy Secretary of Defense 
on missile defense issues. According to its charter, the board will 
provide to the Under Secretary a recommended strategic program plan and 
a feasible funding strategy for approval. Recommendations will be based 
on a business case analysis that considers the best approach to field 
integrated defense capabilities in support of joint objectives. A 
consistent business case analysis approach will facilitate the delivery 
of capabilities to the war fighter in a timely, efficient, cost- 
effective manner. The board will review the missile defense program and 
recommend changes in the missile defense strategic plan. In addition, 
Congress has mandated that DOT&E annually assess the adequacy and 
sufficiency of the BMDS test program. Congress has also mandated that 
DOT&E perform other BMDS program related test and evaluation 
responsibilities. 

Increased Target Failures and Anomalies Have Made It Difficult to 
Supply Reliable Targets On Time: 

The number of target failures and anomalies during flight tests has 
increased over time. From 2002 through 2005, 7 percent (3 of 42 
launches) of the targets launched had in-flight target failures and 
anomalies, while from 2006 through 2007, 16 percent (6 of 38 launches) 
of the targets launched had in-flight failures or anomalies. Though 
problems providing reliable and timely targets have negatively affected 
many of the missile defense elements, THAAD and GMD missile defense 
elements have been affected the most. GMD experienced a target failure 
in 2007 in which the primary objectives failed to be achieved. THAAD 
experienced one failure and two anomalies between 2006 and 2007. 

The immediate effect of a target delay or problem is on an individual 
flight test. For example, unavailable targets have delayed tests such 
as FTT-08 and FTM-15. There are longer term effects of these delays on 
subsequent tests and demonstration of capability in the flight test 
program. Specifically, MDA's flight test program has been restructured 
to reflect target deficiencies and availability. For example, 
validating GMD capability has been delayed due to target availability 
and a failure. The THAAD flight test program has decreased the amount 
of flight tests due to reduced availability of targets. Additionally, 
target failures and anomalies caused THAAD to replan key objectives in 
their flight test plan due to the inability to collect necessary 
information during flight tests. 

Since we briefed your staff in July 2008, MDA has experienced two 
additional target anomalies. The target flown in a recent sensor test 
(FTX-03) under-flew the planned trajectory. Test reports indicate that 
target trajectory fell short of what was planned and thus did not reach 
the anticipated intercept area. While the anomaly did not prevent MDA 
from achieving the sensor test objectives, had this been an intercept 
attempt, the target anomaly would have precluded the launch of the 
interceptor due to safety restrictions on the test range. In September 
2008, the THAAD element was unable to complete a planned flight test 
because the target missile malfunctioned and did not have enough 
momentum to reach the intercept area. Therefore, the two THAAD 
interceptors taking part in the flight test were not launched. 

At the same time, the unit cost of targets has grown exponentially, 
from $4.5 to $8.5 million from 2002 to 2006 to current estimates 
[Footnote 2] of $32 to $65 million for the targets planned from 2008 to 
2010. Many factors contribute to this cost growth, including increased 
complexity of targets to better reflect an evolving threat and late 
changes to target requirements on contract. In addition, the shift to a 
lead systems integrator resulted in an increase in composite hourly 
labor rates. MDA has also encountered development problems with the FTF 
program and the total cost of FTF remains unclear. According to 
information provided by MDA in July 2008, nonrecurring engineering 
costs plus the cost to purchase some test assets is at least $1 
billion, of which about $553 million has already been spent. 

Several Factors Contribute to Problems with Targets: 

Difficulties with target availability are traceable to (1) supplier 
base and problems incorporating requirements into the contracts and 
establishing program baselines for existing targets and (2) the lack of 
a sound business case for FTF development. Regarding existing targets, 
inventory is aging for key components. For example, motors used in some 
targets are now over 40 years old. In addition, vendors who previously 
supplied targets to MDA are leaving the market due to lack of business. 
MDA has also experienced program and requirements issues with the 
existing targets on contract. According to MDA officials, several 
target contracts did not capture all of the needed test requirements. 
Furthermore, target technical, cost, and schedule baselines were not 
always established in a timely manner. MDA officials acknowledged that 
they have only recently established these baselines for all missions 
planned to take place in the next 2 years. 

MDA began the FTF without establishing a sound business case. We have 
previously reported on the importance of using a solid, executable 
business case before committing resources to a new product development 
effort.[Footnote 3] A sound business case demonstrates that (1) the 
identified needs are real and necessary and are best met with the 
chosen concept and (2) the chosen concept can be developed and produced 
with existing resources such as technical knowledge, funding, time and 
management capacity. According to a July 2006 MDA briefing, the 
decision to commit to a lead systems integrator and FTF was not based 
on a formal cost or business case analysis. The briefing further 
indicated that the FTF cost estimates considered at the time only 
included integration costs and did not address nonrecurring engineering 
costs, unit costs for FTF configured targets, or the costs to purchase 
existing target systems through the prime contract. Nor was there any 
indication that FTF costs had been reviewed by independent cost 
organizations within the Department of Defense. It is also unclear 
whether MDA evaluated all alternatives before committing to a lead 
systems integrator and the FTF. MDA did perform a study to identify 
requirements design attributes and candidate configurations for a 
family of targets by reviewing existing systems. However, in a July 
2006 assessment, MDA stated that other alternatives for improving 
legacy targets were not considered at that time. 

We also could not identify an original approved FTF acquisition 
strategy. Originally, the lead systems integrator proposed using 
existing launch vehicles for short-and medium-range missions, and 
developing a new long-range launch vehicle family while maximizing the 
reuse of existing target system designs. However, MDA committed to a 
riskier strategy that required developing a single common architecture 
across three target system families. Early in the development of FTF, 
MDA underestimated the technical and design challenges involved in the 
development of a new target family. By May of 2006, MDA recognized that 
the funding set aside for FTF development was no longer adequate and 
made a decision to focus developmental efforts on the ground-launched 
72-inch long-range target needed for near-term missions and defer other 
key capabilities. 

Despite the focus on the 72-inch ground-launched target, development 
problems have delayed the first launch from July 2008 to April 2009. 
The 72-inch target qualification process has been more difficult and 
costly than expected and development is still not complete. Of the 69 
components in development, 24 had not passed the qualification process 
as of August 2008. In addition, according to the targets program 
director, the qualification process completion date has moved from 
early October to November 2008. Delays have also occurred because 
development of the 72-inch target began without a stable design. Eleven 
of the remaining unqualified components are considered critical 
technologies and are currently being redesigned. MDA acknowledged both 
underestimating the difficulty in using components never qualified for 
this shock and vibration environment and underestimating the complexity 
of combining multiple launch vehicle and mission requirements. 
Similarly, the 52-inch target's first flight will occur no earlier than 
fiscal year 2012, representing a 3 year slip from the original 
expectations of first flight in fiscal year 2009. This slip has 
resulted in the need to initiate an interim target development effort 
to satisfy near-term target requirements of the Aegis flight test 
program. 

MDA Is Undertaking A Series of Initiatives To Address Problems with 
Targets Development, but Challenges Remain: 

MDA recently began implementing a series of management initiatives to 
improve the targets program, such as establishing technical, cost, and 
schedule baselines for all missions in the 2-year integrated master 
test plan. The new program director and staff have also begun drafting 
long-term target capability requirements, and developing and 
implementing a new cost model for targets. In addition, plans have been 
made to improve risk management by (1) considering program-wide issues, 
and (2) including programmatic risks, cost and schedule in the risk 
assessments. 

Overall, the success of the flight test program depends on the success 
of FTF. However, the current FTF acquisition strategy will yield fewer 
targets at higher costs and the entire FTF might not be fully pursued. 
For example, key capabilities such as the air-launched targets have 
been deferred and MDA is considering whether to continue with the 52- 
inch target development. Further, the initial plan for 10 to 12 72-inch 
target flights per year has been reduced to 4 to 5 flights per year. In 
addition, the development and production of the first four 72-inch 
targets cost has grown 63 percent, from $248 million to at least $405 
million, and the cost to complete development of the entire FTF is not 
known. Given that the GMD and THAAD flight test programs have already 
been negatively affected by target difficulties, further changes to the 
flight test program could become necessary if the FTF program does not 
deliver its capabilities as scheduled. 

Conclusions: 

Targets are sophisticated and expensive missiles that are essential to 
flight testing the ballistic missile defense system. As such, 
management of the targets program must be both effective in supplying 
enough reliable targets and efficient as to their cost. Increasing 
problems with target failures and anomalies have caused degradations in 
the missile defense flight test program. The strategy of supplanting 
the use of existing targets, which contain aging components, with a new 
family of targets, has not gone as planned. The new FTF has been 
delayed, costs have increased, and the program's scope is being 
reduced. The difficulties with executing FTF are due, at least in part, 
to the fact that a sound business case was not established before 
proceeding with the program and the attendant contracting strategy. MDA 
has recently initiated a series of actions to improve the targets 
program in general, and the FTF program specifically. Even so, the 
availability of targets for flight tests continues to be problematic, 
and as a result the scope of the flight test program has been reduced 
to better match available targets. The availability of targets is also 
dependent on the ultimate success of the FTF program. 

Recommendations For Executive Action: 

We recommend that the Secretary of Defense take the following two 
actions: 

* Require the Director, MDA to establish a revised business case for 
providing reliable and timely targets for a robust flight test program. 
Such a business case should, among other things: 

- determine the best approach for providing an ample supply of quality 
targets to support the missile defense flight test program, including 
consideration of approaches other than the FTF. 

- demonstrate that the chosen approach--including the attendant 
acquisition and contracting strategy-can be executed with available 
technologies, funding, time, and management capacity. 

- establish separate cost, schedule, and performance baselines for each 
class of target under development against which progress can be 
measured. 

- reflect input from key organizations, such as the Missile Defense 
Executive Board, independent cost estimators, and the Director, 
Operational Test and Evaluation. 

* Align MDA's plans and resources with the targets program approach 
resulting from the above business case. 

Matters For Congressional Consideration: 

The Congress has repeatedly stressed the need for robust testing of the 
Ballistic Missile Defense System and has become concerned with the 
health of the MDA targets program. The Congress has also expressed 
concern that the FTF program is proceeding at a slower pace and greater 
cost than expected. Therefore, Congress may wish to consider whether to 
require the Secretary of Defense to report the departmentally approved 
missile defense target development and procurement strategy, business 
case, and baselines to the Congressional Defense Committees. 

Agency Comments and Our Evaluation: 

DOD provided written comments on a draft of this report. These comments 
are reprinted in appendix II. DOD also provided technical comments, 
which we incorporated as appropriate. 

In our first recommendation, we outlined four components that the 
Secretary of Defense should require in a revised business case for the 
missile defense targets program. DOD partially concurred with this 
recommendation. In responding to the first component of the business 
case, which is to determine the best approach for providing an ample 
supply of quality targets, DOD stated that MDA is reviewing the 
acquisition strategy for targets. It is important that the review be a 
fresh look at the business case for targets, which is why we 
recommended that approaches other than the FTF be considered as well. 
DOD's response failed to make it clear whether such approaches will be 
included in the MDA review. 

In responding to the second component of the business case, to 
demonstrate that the chosen approach could be executed with available 
technologies, funding, time, and management capacity, DOD explained 
that the review underway will result in an approach that will be 
technologically achievable, executable within budget, and will support 
the flight test schedule. DOD noted that the delivery of the first four 
72-inch FTF targets will inform the review in the area of cost. While 
we agree that such cost information will be important, we also note 
that the 72-inch targets have already experienced cost overruns, 
qualification problems, and delivery delays. As such, they remain 
unproven, which underscores the need for the business case review to 
remain open to other approaches to supplying targets. 

DOD also partially concurred with the third component of the business 
case, to establish cost, schedule, and performance baselines for each 
class of target. DOD indicated that baselines are established for each 
individual target procured and that a baseline for each class of target 
would be redundant. While individual baselines are appropriate for 
legacy systems in production, the key issue is establishing baselines 
for new classes of targets under development, like the FTF. In the 
course of our review, MDA could not provide a full cost estimate or a 
baseline for the FTF developmental effort. We have modified the 
recommendation to deal specifically with establishing baselines for new 
classes of targets under development, like the FTF. 

DOD partially concurred with the last component of the first 
recommendation, which recommends that the business case reflect input 
from key organizations, such as the MDEB, independent cost estimators, 
and DOT&E. DOD acknowledged that the MDEB and DOT&E inputs have been 
extremely valuable but that the decision regarding the targets business 
case should be reserved for the Director of MDA. Our recommendation 
calls for the input of key organizations but does not suggest that 
their approval is required. Thus, it does not pose a challenge to the 
MDA Director's decision making authority. MDA has not always obtained 
such input on key decisions. For example, DOT&E was not consulted for 
the recent decision to cancel an important GMD flight test. Also, 
estimates of MDA costs have typically not been obtained from 
independent cost estimators. 

Regarding our second recommendation to align MDA's plans and resources 
with the targets program, DOD partially concurred, stating that 
revisions to the acquisition strategy will be incorporated into the 
Program Budget development. 

Finally, DOD did not concur with a third recommendation, subsequently 
removed from the final report, to report the departmentally approved 
missile defense target development and procurement strategy, business 
case, and baselines to the Congressional Defense Committees. DOD 
preferred to rely on briefings to Congressional staff to convey this 
information. MDA began developing the new target family without a 
complete acquisition strategy, baselines, or a business case and the 
program has already experienced qualification problems, schedule delays 
and cost overruns. Because of the importance of an ample supply of 
reliable targets to the success of the Ballistic Missile Defense 
System, we continue to believe that the Secretary of Defense needs to 
ensure that MDA takes a fresh look at alternatives when it establishes 
a revised acquisition strategy and business case. The departmentally 
approved approach should then be reported to the Congressional Defense 
Committees because MDA's targets program and strategy are of interest 
to the Congress, as evidenced by the language that requested our 
assessment. Accordingly, we have elevated the recommendation for 
executive action to a matter for congressional consideration. 

We will send copies of this report to the Secretary of Defense, the 
Director, MDA, appropriate congressional committees, and other 
interested parties. This report is also available at no charge on GAO's 
Web site at [hyperlink, http://www.gao.gov]. If you or your staff have 
any questions concerning this report and its appendixes, please contact 
me at (202) 512-4841 or FrancisP@gao.gov. Contact points for our 
offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. The major contributors are listed in 
appendix III. 

Singed by: 

Paul L. Francis: 
Director Acquisition and Sourcing Management: 

List of Committees: 

The Honorable Carl Levin: 
Chairman Committee on Armed Services: 
United States Senate: 

The Honorable John McCain: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Ike Skelton: 
Chairman: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Duncan Hunter: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 

[End of section] 

Appendix I: Briefing to Defense Committees on Review of the Missile 
Defense Agency's Targets Program: (briefing slides) 

Briefing to the House and Senate Armed Services Committees, July 17, 
2008: 

Review of The Missile Defense Agency抯 Targets Program: 

Briefing Overview: 

Introduction: 

Summary: 

Background: 

Performance of Targets: 

Causes of Problems: 

Prospects for Resolution: 

Conclusions: 

Scope, Methodology, and Auditing Standards: 

Acronyms: 

[End of section] 

Introduction: 

GAO undertook this work in response to a mandate contained in the 
Conference Report accompanying the National Defense Authorization Act 
for Fiscal Year 2008 (H.R. Rep. No. 110-477). 

We focused our review on the following three objectives: (1) Is the 
Missile Defense Agency (MDA) meeting the need for reliable and timely 
targets for the flight test program? (2) What are the causes of any 
deficiencies or delays? (3) What are the prospects for resolution of 
any problems identified? 

We will follow up on this briefing by September 30, 2008, with a 
report. 

Technical comments from the agency were incorporated as appropriate. 
Our scope & methodology is described on slide 29. 

[End of section] 

Summary: 

* MDA has difficulty supplying targets for missile defense testing. 
- Target failures and anomalies during flight tests have increased. 
- Target shortfalls have contributed to delays in flight tests, reduced 
numbers of flight tests, and modification of flight test objectives. 
- The cost of targets has significantly increased; FTF is now estimated 
to deliver less capability at a higher cost. 

* Many factors contribute to the difficulty in supplying targets, 
including supplier base and contracting problems, increased cost 
associated with a lead systems integrator, and committing to the 
Flexible Target Family (FTF) program without demonstrating a sound 
business case. 

* The prospects for resolution are unclear because: 
- MDA has only recently begun drafting and implementing a series of 
management initiatives to resolve problems. 
- The originally planned FTF concept may not be accomplished because 
MDA has deferred key capabilities. 

[End of section] 

Background: 

The Ballistic Missile Defense System (BMDS) and its elements verify 
design performance and assess capabilities in a variety of ways, 
including flight testing BMDS missiles to track or intercept live 
targets that represent real-world missile threats. 

MDA抯 Targets and Countermeasures program oversees the design, 
development, fabrication, and production of ballistic missile targets 
and countermeasures to be used in the BMDS test program. 

Target systems are ballistic missiles and are available in numerous 
configurations designed to test the performance of the system抯 sensors 
and weapons. 

* The target systems include launch vehicles, payloads, 
instrumentation, and flight controls. 

Existing Targets: 

Existing targets vary in size, shape, and age of components and thus 
have little commonality. 

Figure: Target Vehicle and RV Depictions are not Notational and not to 
scale: 

[Refer to PDF for image] 

Targets depicted: 

Lance (130 km); 
ARAV A/B Terrier Orion or Oriole (400/3100 km); 
FMA (300-500 km); 
MBRV-3 Hera SR19/M57 (600 km); 
MBRV-3 SRALT SR19 (500 km); 
MBRV-1 SRALT SR19 (600 km); 
MBRV-1 Hera SR19/M17 (900 km); 
SR19/SR/19 (1,100 km); 
MBRV-2 Castor IVB (1,200 km); 
MBRV-4 LRALT SR19/SR19 (2,400 km); 
STARS/GROW A3 1st/A3 2d/Orbus 1 (3500 km); 
CHIMERA M55/SR19/SR73 (long-range). 

FMA: Foreign Material Acquisition; 
LRALT: Long range air launched target; 
MBRV: Matching ballistic reentry vehicle; 
SRALT: Short range air launched target; 
STARS: Strategic target system; 
GROW: Generic rest-of-the-world (RV). 

Source: GAO presentation of MDA data. 

[End of figure] 

Flexible Target Family: 

FTF is a newly developed family of short-, medium-, and long-range 
targets. 

Original goals: 
* Commonality; 
* Maintain inventory; 
* Reduce cycle time; 
* Increasing complexity; 
* Cost savings; 
* Ground, air, and sea launch. 

Figure: Illustration of FTF. 

[Refer to PDF for image] 

Source: GAO presentation of MDA data. 

[End of figure] 

Lead Systems Integrator: 

Figure: Organizational chart: 

[Refer to PDF for image] 

Lockheed Martin: Target Prime Contractor/LSI; 
* Orbital Sciences Corporation; 
* Coleman Aerospace; 
* ATK; 
* DRS Technologies, Inc.; 
* STADCO. 

Source: GAO analysis of MDA data. 

[End of figure] 

Objective 1: Performance of Targets: 

MDA has Difficulty Supplying Reliable Targets On Time: 

In-flight target failures and anomalies: 
* 7% 2002�05; 
- 3 of 42 launches. 

* 16% 2006�07; 
- 6 of 38 launches. 

All targets used to date were predecessors to FTF. 

* FTF has not delivered a new development target yet. 

* Existing targets include off-the-shelf components with some 
modifications, new productions of existing designs, and modifications. 

Effect of target problems on elements is greater than in-flight 
anomalies and failures. 

THAAD and GMD affected most by target problems. 

Target Delays and Performance Issues Since 2005: 

Flight tests: GMD: FTG-3 and 3a; 
Original test date: FY06, 3Q
Actual test date: FY08, Q1; 
Target failure: FY07, 3Q; 
Target failed. Primary objectives not achieved until retest in 3a. 

Flight tests: GMD: FTG-4; 
Original test date: FY06, Q4; 
Test canceled: FY09, Q1; 
Test canceled, objectives delayed due to target/element issues. 

Flight tests: THAAD, FTT-04; 
Original test date: FY05, Q1; 
Target failure: FY06, Q4; 
Target failed before interceptor could be launched. 

Flight tests: THAAD, FTT-08; 
Original test date: FY07, Q1
Actual test date: FY08, Q1; 
Test delay due to target availability. 

Flight tests: THAAD, RDC-1c; 
Target anomaly: FY07, 2Q; 
"Successful" with target anomaly. 

Flight tests: THAAD, RDC-1d; 
Target anomaly: FY07, Q4; 
Target anomaly. Element reported significant impact on objectives. 

Flight tests: THAAD, RDC-2; 
Original test date: FY08, Q1; 
Test canceled: FY09, Q1; 
Test canceled due to target availability and funding. 

Flight tests: STSS, FTS-01; 
Original test date: FY08, Q4; 
Actual test date: FY09, Q3; 
Test delayed due to target affordability issues. 

Flight tests: Aegis, FTM-15;
Original test date: FY08, Q4; 
Actual test date: FY09, Q3; 
Test delayed due to target. 

Source: GAO analysis of MDA and DOT&E data. 

[End of figure] 

FTF Development Delays: 

* First FTF launch was scheduled for July 2008, now April 2009. 

* Deferrals of subsequent developmental work: 

- LV-2 air launch, all sea launch, LV-3, Common-liquid Rocket Boosters, 
and the 52� configured FTF have been deferred. 

- 52� configured FTF was assumed to be available for first use in FY 
2009. 

Figure: Recurring Target Unit Costs Growing: 

[Refer to PDF for image] 

The figure is a vertical bar graph depicting the following data: 

Cost estimates in then-year dollars: 
2002-2006: $4.5-$8.5 million; 
2006-2007: $21-$28 million; 
2008-2010 (including FTF targets): $32-$65 million. 

Source: GAO analysis of MDA data. 

[End of figure] 

Factors Affecting Target Cost Growth: 

Factors include: 

* increasing complexity of targets (including existing targets); 

* late changes to target requirements on contract; 

* schedule delays; 

* shift to Lead Systems Integrator 杊igher labor rates, additional 
oversight of subcontractors. 

Cost increases associated with recent target failures and anomalies are 
only partially estimated: 

* ~$87 M cost increase associated with FTG-03 failure; 

* ~$80 M associated with target availability and affordability; 

* Unknown cost implications for Radar Data Collection 揳nomalies.� 

Cost of Flexible Target Family Unclear; Cost Equals at Least $1 
Billion: 

MDA has estimated some cost for FTF, but total nonrecurring development 
remains unclear because some cost figures include the purchase of test 
assets. 

* According to information MDA provided July 15, 2008: 

- nonrecurring cost plus the cost to purchase some test assets are 
estimated at about $1.2 billion. 

- Sunk costs are about $553 million. 

[End of Objective 1] 

Objective 2: Causes of Problems: 

Supplier Base and Contracting Problems: 

Supplier base problems with existing targets: 

* Aging inventory/diminishing sources: 
- Motors used in some targets are over 40 years old. 
- Vendors are leaving the market due to lack of business. 

MDA contracting problems: 
* Target contracts have not captured all element testing requirements. 

* Target technical, cost, and schedule baselines were not always 
established before targets were placed on contract. 
- MDA acknowledges they have recently established these baselines for 
all missions in the next 2 years. 

* Inaccurate cost estimating: 
- Flat charges assessed to each element do not represent actual use. 
- Flight test costs. 

Lead Systems Integrator Costs Higher Than Expected: 

According to MDA, contracting with an LSI increased costs; the 
magnitude of the increase exceeded expectations. 

* For example, composite hourly labor rates were 32% higher in 2004 
than prior to the contract with the LSI. 

* Effective cost of subcontractor labor is higher on prime contract due 
to management oversight of subcontractors. 

Technology Problems Delay First Launch of FTF Target: 

First FTF target delayed from July 2008 to April 2009 because the 
ground launched (72�) target encountered environmental qualification 
problems. 

* Heritage components put in unverified environment, failures due to 
high vibration and shock levels. 
- 11 of 69 components are considered critical. 
- As of April 2008, all 11 were in redesign or failure analysis. 
- 5 of these critical components were not projected to complete 
qualification testing until September at the earliest. 
- As of April 2008, 35 components had not completed qualification 
testing. By June 2008, 28 components remained unqualified. 

* MDA acknowledged (1) underestimating the difficulty in using 
components never qualified for this shock and vibration environment and 
(2) underestimating the complexity of combining multiple launch vehicle 
and mission requirements. 

Design Challenges Contributed to FTF Delay: 

According to MDA: 

* Development of the first element of the FTF proceeded without a 
搕raditionally stable design� in order to meet the schedule goals of 
FTF implementation. 

* As a result, contractor was unable to provide sufficient detailed 
design to their vendors to provide good proposals. 

* The risk was recognized and in hindsight underestimated, but 
accepted. 

Rush to meet urgent need caused more delays. 

Need to Change Target Acquisition Strategy: 

* GAO has found that an executable business case demonstrates: 
(1)the need is real and can be met with the chosen concept, 
(2)the chosen concept can be developed and produced within existing 
resources梚ncluding technologies, funding, time, and management 
capacity. 

* According to MDA, the need to change how they acquired targets was 
driven by several factors, including: 
- need to reduce target acquisition cycle times, 
- expected increased pace of element testing (4 GMD/year), 
- need for different launching modes (air and sea based), 
- increasing complexity, 
- cost savings/cost avoidance. 

Limited Alternatives Considered: 

It is unclear whether MDA evaluated all alternatives before committing 
to an LSI and FTF. 

* According to MDA, they did perform a trade study to identify 
requirements, design attributes, and candidate configurations for a 
family of targets by reviewing existing systems. 

* In a July 2006 assessment, MDA stated that other alternatives for 
improving legacy targets were not considered at that time. 

MDA Increased the Development Challenge: 

According to MDA, the LSI proposed using existing launch vehicles for 
short-and medium-range missions, and developing a new long-range launch 
vehicle family. 

* Maximizing the reuse of existing target system designs. 

MDA committed instead to a riskier strategy that sought development of 
a single common architecture across three target system families. 

* Common flight and ground hardware/software. 

* No proprietary designs. 

* Premise for a single common design梩hat box-level commonality was one 
key to life-cycle cost savings. 

* Recurring cost savings were expected, but this is no longer the case. 

Business Case For LSI and FTF Acquisition Not Made: 

According to a July 2006 MDA briefing, the decision to adopt the FTF 
and a LSI was not based on a formal cost or business case analysis. 

* FTF original cost estimates only included the integration costs and 
did not address: 
- nonrecurring engineering costs, unit costs for FTF configured 
targets, or the costs to purchase existing target systems through the 
prime contract. 

* A formal analysis of the relative merits and costs of each 
alternative could not be performed when the commitments to the LSI and 
the FTF were made because cost estimates were not available. 

FTF Acquisition Strategy Baseline: 

We could not identify an original approved FTF acquisition strategy. 

MDA did, however, provide a May 2006 FTF briefing that stated: 

* At that time, the majority of the investment required for the FTF LV 
(LV-2 and LV-3) family design effort had been expended. 

* LV-2 development cost estimated at $248 million (FY06 dollars). 

* Completion of entire FTF LV family is required to realize substantial 
yearly recurring cost reductions. 

* Assumed 10 to 12 LV missions per year. 

Completion of the entire FTF family is required to support the 
increased pace and complexity of BMDS testing 2-4 years in the future. 

Technology, Design and Resource Challenges Recognized in 2006: 

* Design and cost implications of the FTF requirements were 
underestimated. 

* In May 2006, MDA acknowledged that significant technology and design 
challenges were inherent in FTF. 
- Initial FTF requirements 搇evied functional capabilities and 
operational environments far above existing targets� current 
qualifications.� 
- Choice of nonproprietary, single common architecture required new 
揷lean-sheet-of-paper� designs. Only capable of marginal reuse of 
existing designs. 

* Funding set aside was no longer adequate to resource the development. 
- Decision made to focus on ground-launched LV-2 for near-term 
missions, and delay other key capabilities. 

[End of Objective 2] 

Objective 3: Prospects for Resolution: 

Current FTF Strategy Will Yield Fewer Targets at Higher Costs: 

Full FTF LV family may not be fully pursued. 

* The LV-3 and the LV-2 air-launched capabilities are deferred; LV-2 
air launch considered a key capability which provides greater test 
flexibility. 

* Assumption of 10� LV-2 flights per year, including 4 GMD tests, is 
no longer valid, expect only 4�per year. 

* The development and production costs of the first 4 LV-2s have grown 
from $248 M to $405 M (a 63 percent increase). 

* MDA is considering whether to continue with 52� development 
- First 52� flight will occur no earlier than FY12 (delayed from FY09). 

* The cost to complete development of the FTF is not known. 

MDA Undertaking Series of Initiatives: 

MDA recently began implementing a series of management initiatives for 
BMDS target acquisition. 

* Establishing technical, cost, schedule baselines for all missions in 
the 2-year integrated master test plan. 
- Implementing a requirements stabilization process requiring higher-
level approval for target changes. 

* Drafting long-term target capability requirements. 
- Drafting initial comprehensive plan to validate system-level models 
and simulations. 

* Improving risk management by (1) considering program-wide issues, (2) 
including programmatic risks, cost & schedule. 

* Developing and implementing a new cost model for targets. 

* New program director and personnel. 

Remaining Risks: 

* BMDS flight test program has changed to reflect target availability 
and deficiencies. 
- THAAD flight test program extended. 
- GMD flight test objectives delayed. 

* Success of flight test program assumes success of FTF. 
- If everything goes as planned, the targets program may be able to 
meet the future needs of the BMDS test plan. 
- MDA抯 Integrated Master Test Plan is modified as often as every 
quarter. 
- Key deferred work not in funding plan杋ncluding air-launched LV-2 
capability. 

[End of Objective 3] 

Conclusions: 

The decision to pursue the FTF and the LSI was made without 
demonstrating a sound business case. Specifically, MDA did not show 
that the FTF could be developed and produced within existing resources. 

Assumptions underlying the FTF development have changed, including 
whether the concept of a 揻amily� of targets can be accomplished. 

MDA has taken actions to improve target acquisition deficiencies, but 
these actions may not be enough to provide an adequate supply of 
targets. 

Scope, Methodology, and Auditing Standards: 

To assess the ability of MDA抯 targets program to provide support for 
the BMDS test efforts, we analyzed test plans and schedules, flight 
test reports, budget documents, and program execution reviews. We also 
analyzed program directives and acquisition policies and procedures. We 
interviewed MDA officials from GMD, THAAD, Aegis BMD, and the Targets 
and Countermeasures program offices as well as officials from MDA抯 
Business, Test, and Engineering directorates. We also interviewed 
officials from DOD抯 Office of the Director, Test and Evaluation, and 
the Space and Missile Defense Command. Our analysis covered data 
ranging from December 2003 through July 2008. 

We conducted this performance audit from February 2008 through July 
2008, 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. 

Acronyms: 

BMDS: Ballistic Missile Defense System: 

CDR: critical design review: 

DOT&E: Director, Operational Test & Evaluation: 

FTF: Flexible Target Family: 

GMD: Ground-based Midcourse Defense: 

GSE: government support equipment: 

LV: launch vehicle: 

LSI: Lead Systems Integrator: 

MBRV: modified ballistic reentry vehicle: 

MDA: Missile Defense Agency: 

RV: reentry vehicle: 

RDC: radar data collection: 

STSS: Space-based Tracking & Surveillance System: 

THAAD: Terminal High Altitude Area Defense: 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Office Of The Under Secretary Of Defense: 
Acquisition, Technology And Logistics: 
3000 Defense Pentagon: 
Washington, DC 20301-3000: 

September 19, 2008: 

Mr. Paul Francis: 
Director, Acquisition and Sourcing Management: 
U. S. Government Accountability Office: 
441 G. Street, N.W. 
Washington, DC 20548: 

Dear Mr Francis: 

This is the Department of Defense (DoD) response to the GAO draft 
report, GAO-08-1113R, "Defense Acquisitions: Sound Business Case Needed 
to Implement the Missile Defense Agency's Targets Program," dated 
August 25, 2008 (GAO Code 120723). 

The DoD partially concurs with five of the draft report's 
recommendations and non-concurs with one. The rationales for our 
position are included in the enclosure. I submitted separately a list 
of technical and factual errors for your consideration. 

We appreciate the opportunity to comment on the draft report. My point 
of contact for this effort is Mr. David Crim, PSA/SW, 
David.Crim@osd.mil, (703) 697-5385. 

Sincerely, 

Signed by: 

David G. Ahern: 
Director: 
Portfolio Systems Acquisition: 

Enclosure: As stated: 

GAO Draft Report Dated August 25, 2008: 
GAO-08-1113R (GAO Code 120723): 

"Defense Acquisitions: Sound Business Case Needed To Implement The 
Missile Defense Agency's Target Programs" 

Department Of Defense Comments To The GAO Recommendations: 

Recommendation 1: The GAO recommends that the Secretary of Defense 
require the Director, Missile Defense Agency (MDA) to establish a 
revised business case that will determine the best approach for 
providing an ample supply of quality targets to support the missile 
defense flight test program, including consideration of approaches 
other than the flexible target family (FTF). (Page 6/GAO Draft Report) 

DoD Response: Partially Concur. The ability of the targets program to 
provide threat-representative targets in a responsive, cost-effective 
manner has been and remains a top priority for the agency. The Missile 
Defense Agency (MDA) has an acquisition strategy review underway to 
consider potential changes and improvements to their acquisition 
approach. The review addresses both short and long-term acquisition 
strategies and maximizes the use of existing inventory. Thus far, MDA 
has determined not to pursue the Castor IVB 52" variant of the Flexible 
Target Family at this time. New targets representing future medium 
range threats are being evaluated. MDA, with strategic guidance from 
the Missile Defense Executive Board, will complete the ongoing 
acquisition strategy review. 

Recommendation 2: The GAO recommends that the Secretary of Defense 
require the Director, MDA to establish a revised business case that 
will demonstrate that the chosen approach-including the attendant 
acquisition and contracting strategy-can be executed with available 
technologies, funding, time and management capacity. (Page 6/GAO Draft 
Report) 

DoD Response: Partially Concur. The Missile Defense Agency's (MDA's) 
acquisition strategy seeks to maximize use of existing technology and 
inventory and MDA's program management places a high priority on making 
threat-representative targets available on schedule and within the 
funding allotted. The review underway is expected to further strengthen 
MDA's approach and ability to execute. One activity underway now will 
significantly inform the review-delivery of the first four 72" Flexible 
Target Family target vehicles, expected to be completed early next 
year. Upon delivery, sufficient cost data will be available to predict 
follow-on 72" procurements. Once target requirements are solidified, 
MDA will include these in the acquisition strategy evaluation
already underway. A business case analysis coupled with an industry 
wide Request for Information against target classes/types is part of 
that acquisition strategy development. When complete, MDA expects that 
the approach selected will be technologically achievable, executable 
within budget, and support the flight test schedule. 

Recommendation 3: The GAO recommends that the Secretary of Defense 
require the Director, MDA to establish a revised business case that 
will establish separate cost, schedule, and performance baselines for 
each class of target against which progress can be measured. (Page 
6/GAO Draft Report) 

DoD Response: Partially Concur. Target baselines are established for 
each target and contract award. Developing and tracking a separate 
baseline by class of target is redundant to the integrated baselines 
already established for hardware and target launch delivery orders. The 
Missile Defense Agency's (MDA's) Program Change Board process is 
already being used to document target resources, schedule, and 
technical baselines. The Common Cost Model developed as an independent 
estimating tool currently identifies cost by mission including target 
baseline changes. MDA continues to aggressively examine target cost 
drivers and has made significant strides to improve cost estimating 
through use of a Common Cost Model. 

Recommendation 4: The GAO recommends that the Secretary of Defense 
require the Director, MDA to establish a revised business case that 
will reflect input from key organizations, such as the Missile Defense 
Executive Board, independent cost estimators, and the Director, 
Operational Test and Evaluation. (Page 6/GAO Draft Report) 

DoD Response: Partially Concur. The Missile Defense Agency (MDA) 
continues to work closely with the Missile Defense Executive Board 
(MDEB) and Director, Operational Test and Evaluation (DOT&E) in 
formulating detailed plans for development, test, and fielding of 
ballistic missile defense capabilities. The MDEB and DOT&E inputs have 
been extremely valuable but should not be substituted for the day-to-
day management and mission execution responsibilities exercised by MDA. 
The MDEB as the DoD Corporate deliberative body adjudicates the unique 
Service, Warfighter and OSD stakeholder interests relative to 
implementing missile defense policy and programs. Pursuant to the MDA's 
Charter, the Secretary of Defense has assigned the Director of MDA, the 
responsibility for managing the Ballistic Missile Defense System and 
designated him as the head of an agency. In those capacities, decisions 
regarding the targets business case should be reserved for the 
Director. Input from external agencies such as DOT&E are already 
provided through their coordination on Integrated Master Test Plan and 
through deliberations of the MDEB and its subcommittees. 

Recommendation 5: The GAO recommends that the Secretary of Defense 
require the Director, MDA to align MDA's plans and resources with the 
targets program approach resulting from the above business case. (Page 
6/GAO Draft Report) 

DoD Response: Partially Concur. Any changes resulting from the Missile 
Defense Agency's revised acquisition strategy and resource plans will 
be incorporated into annual Program Budget development. Generating a 
separate program element for the Targets and Countermeasures program 
that fully supports an approved plan for target delivery will increase 
visibility and flexibility of target funding. 

Recommendation 6: The GAO recommends that the Secretary of Defense 
require the Director, MDA to report the Department of Defense's 
approved missile defense target development and procurement strategy, 
business case, and baselines to the congressional defense committees. 
(Page 6/GAO Draft Report) 

DoD Response: Non-Concur. Planned accomplishments for, and execution 
of, the targets program are briefed annually to the congressional staff 
after the President's Budget is submitted and periodically throughout 
the year as requested by the congressional staff. However, the Missile 
Defense Agency will provide any details requested regarding the targets 
acquisition strategy and business case analysis, if requested by the 
congressional staff. This information will be released in a manner that 
protects procurement sensitive information and the Government's ability 
to fairly negotiate a contract. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgements: 

GAO Contact: 

Paul Francis (202) 512-4841: 

Acknowledgments: 

Major contributors to this report were David B. Best, Ivy G. H黚ler, 
Steven B. Stern, Robert S. Swierczek, Letisha T. Watson, and Alyssa B. 
Weir. 

[End of section] 

Footnotes: 

[1] MDA defines a failure as a loss of the target mission or failure to 
achieve one or more critical objectives. MDA defines an anomaly as a 
failure to achieve one or more noncritical mission objectives or 
partially achieve a critical objective. 

[2] This estimate includes both existing and FTF targets. 

[3] GAO, Defense Acquisitions: Realistic Business Cases Needed to 
Execute Navy Shipbuilding Programs, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-07-943T] (Washington, D.C.: July 24, 2007). 

[End of section] 

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