Detailed Information on the
Missile Defense Assessment

Develop measures to evaluate new block structure performance. Such measures will include baselines and targets for major MDA programs within each Block.

MDA is improving program management discipline, accountability, and interdepartment coordination by developing and applying a Strategic Management Framework and Integrated Program Policy documents.

MDA revised its method of managing its increasingly complex flight test program in FY06. The new method verifies system performance, quality and mission assurance provisions, and increases overall confidence in the fileded system.

The DOD, MDA, and the Services assigned specific organizational responsibilities to support financial and program plans for the FY 2008 budget submission.

Measure: Meet annual budget targets for Blocks 1.0 through 3.0.

Explanation:Do not exceed planned program totals for all "blocks" within the fiscal year. Note: The targets for FY 2009 and beyond refer to Blocks 1.0 through 3.0, which were developed during FY 2008. The targets for FY 2008 and prior years are based on the old MDA block structure.

Measure: Field new missile defense capabilities in a timely manner. Meet critical developmental timelines.

Explanation:Meet critical developmental timelines. Goals and Targets changed to reflect a FY performance period as required by OMB.

Measure: Accomplish planned annual major test requirements. Major tests are currently defined as in-flight intercepts involving GMD, AEGIS, or THAAD programs. Annual tests are measured from those planned at the start of a fiscal year compared to those accomplished.

Explanation:List number of planned GMD, AEGIS, and THAAD flight tests accomplished on an annual basis.

Is the program purpose clear?

Explanation: The purpose of the ballistic missile defense program is clearly stated, has broad consensus, and has been formalized in legislation.

Evidence: The National Missile Defense Act (NMDA) of 1999 (PL 106-38) mandates that the Administration deploy a missile defense system as soon as technically feasible. Policy statements in National Security Presidential Directive (NSPD) 23, 16 Dec 2002, require DoD to develop and deploy, as soon as possible, a ballistic missile defense drawing on the best technologies available.

Does the program address a specific and existing problem, interest, or need?

Explanation: The intelligence community has identified specific ballistic missile threat systems, from short to intercontinental range, which pose risks to the United States (U.S.) forces and national territory. The Missile Defense Agency's (MDA's) ballistic missile defense program is intended to counter these threats.

Evidence: Deployment of a national ballistic missile defense has been identified as a specific national policy goal by the NMDA of 1999 (PL 106-38), and reaffirmed by NSPD-23. In addition, the Strategic Planning Guidance for FY2006 - 2011 specifically states that U.S. ballistic missile defense goals remain as articulated in related documents.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The missile defense program is unique. No other federal agency or effort duplicates DoD's missile defense efforts. Within DoD, the Missile Defense Agency (MDA) is the single focal point for development of all ballistic missile defense systems.

Evidence: The Secretary of Defense memorandum of January 2, 2002 and the Under Secretary of Defense for Acquisition, Technology, and Logistics memorandum of February 13, 2002, established the MDA as the sole development organization for ballistic missile defense. Subsequently, DoD Directive 5134.9, 9 Oct 2004, subsumed the earlier documents and formally established the MDA as the responsible agent for managing, directing, and executing the development of the Ballistic Missile Defense System (BMDS) in accordance with NSPD-23.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The BMDS program has suffered several failed tests in the past two years and in response has implemented an Independent Review Team (IRT) to provide insight to the best course of action for follow-on tests and developments. In the FY06 President's Budget Submission, MDA has identified potential fielding options for the earmarked funding in the Office of the Secretary of Defense (OSD) Defense-Wide Program Element 09049030 and included the requirements in the FY2006 President's Budget submission; however, the funding has not been reprogrammed at this time. The BMDS Integrated Program Policy, Integrated Management Plan, Integrated Master Test Plan, Capability Verification and Assessment Plan, Block Activation Plan and subsequent documents provide an effective organizational structure for rapidly developing missile defenses using a wide range of complex technologies. Each year, MDA assesses the capabilities being developed and makes recommendation(s) regarding the potential to field additional capabilities. Funding decisions will be made at the departmental level when MDA receives approval to begin fielding additional capabilities. At that time, MDA will either be provided with funding required to field the capability or will be required to rebalance funding between developing and fielding capabilities. To date, the President has approved MDA deployments consistent with Fielded Configuration (FC) Baselines for Blocks 04 and 06. MDA uses its budgetary resources in the most efficient and responsible manner by making programmatic decisions based on "knowledge points" or key performance demonstrations. This approach allows MDA to maximize its flexibility to truncate, stop, or accelerate programs according to their respective cost, schedule, and performance trends.

Evidence: DoD Program Decision Memorandum - II (Jan 13, 2003), BMDS Integrated Program Policy, Integrated Management Plan, Integrated Master Test Plan, Capability Verification and Assessment Plan, Developmental Statement Of Goals (SOGs) for Block 04, 06, 08 and 10, FC SOGs for Blocks 08 and 10, and FC Baselines for Blocks 04 and 06 were developed and submitted to Congress March 2005.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: MDA's BMDS Program and the U.S. Army PATRIOT (Phased Array Tracking Radar, Intercept On Target) Advanced Capability (PAC)-3 program control nearly all of DoD's ballistic missile defense efforts. All budgeted funds are targeted to a small number of RDT&E program elements. The program elements' definitions align with MDA's Work Breakdown Structure (WBS). MDA funds are distributed within MDA and tracked via a Program Budget Accounting System to ensure that resources are effectively targeted in high-payoff investments. Army funds are distributed and executed similarly within the Army.

Evidence: The Secretary of Defense memorandum of January 2, 2002 and the Under Secretary of Defense for Acquisition, Technology, and Logistics memorandum of February 13, 2002, established MDA as the sole development organization for ballistic missile defense. Subsequently, DoD Directive 5134.9, 9 Oct 2004, subsumed the earlier documents and formally established the MDA as an agency with responsibility for managing, directing, and executing the development of the BMDS in accordance with NSPD-23.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: MDA uses a formal Statement of Goals (SOG) to guide its program development in a phased, sequential process. These phases are called blocks. A block as defined in the MDA Charter dated October 9, 2004 is "[a] biennial increment of the Ballistic Missile Defense System that provides an integrated set of capabilities that has been tested as part of the BMDS and assessed to adequately characterize its military utility. Once tested, elements and components are available for deployment, as directed. This may occur at any time during the Block cycle to support timely execution of a transition or deployment decision. The configuration for each Block is drawn from the prior BMDS Block; BMDS elements, components, technologies, and concepts; BMDS Command and Control, Battle Management, and Communications specifications and products; and externally managed systems, elements, or technologies (e.g., the Defense Support Program, the Global Command and Control System, the Military Strategic and Tactical Relay satellite system, etc ). Each successive Block provides increasing levels of capability to counter ballistic missiles of all ranges and complexity." (e.g. Block 04 refers to programs in development and deployment between 2004 and 2005). MDA has updated its developmental SOGs and FC baselines for the Program Objective Memorandum (POM) 06 cycle 15 March 2005. The new BMDS Block SOGs and Baseline Package contains: (1) FC Baselines which will track key cost, schedule, and performance parameters for the fielded portions of the BMDS - Blocks 04 and 06; (2) FC SOGs which will capture the fielding goals and associated performance parameters for Blocks 08 and 10; (3) Development SOGs for Blocks 04, 06, 08, and 10 which will characterize the BMDS RDT&E through CY 2011; and (4) Appendices describing adversary parameters that the BMDS will address, detailed Block cost breakdowns and BMDS verification and assessment measures. Outcome goals are expressed in terms of Engagement Sequence Groups (ESGs) that are developed and demonstrated for approved Blocks and the following specific performance parameters based on the MDA Technical Objectives and Goals (TOG): Defended Area, Launch Area Denied, Probability of Engagement Success and Raid Size Capacity, and Countermeasures and Environmental Resistance that are derived from the ESGs.

Evidence: Completed and signed Blocks 04, 06 and 08 Development SOGs, Blocks 04 and 06 FC SOGs, and Blocks 04 and 06 FC Baselines were submitted to Congress March 2005.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Targets and timeframes for long-term measures are captured in this year's BMDS Block SOGs and Baselines Package. It includes Development SOGs for Blocks 04, 06, 08 and 10; Fielded Configuration Baselines for the fielded portions of the BMDS for Blocks 04 and 06; and Fielded Configuration SOGs that characterize the possible fielding decisions, based on initial Department of Defense guidance for Blocks 08 and 10. This BMDS Block SOG and Baselines Package will cover planned ballistic missile defense program cost, schedule, and performance goals through the end of CY 2011.

Evidence: Completed and signed Blocks 04, 06 and 08 Development SOGs, Blocks 04 and 06 FC SOGs, and Blocks 04 and 06 FC Baselines submitted to Congress March 2005.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: MDA has developed Baselines to improve program management in accordance with GAO recommendations and the specific language of the 2005 Defense Authorization Act. These Baselines include the key cost, schedule, and performance parameters of the fielded portions of the BMDS for Blocks 04, and 06, and are an integral part of the overall BMDS Block SOGs and Baselines Package submitted in March of each year.

Evidence: Completed and signed Blocks 04, 06 and 08 Development SOGs, Blocks 04 and 06 FC SOGs, and Blocks 04 and 06 FC Baselines and submitted to Congress March 2005.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: MDA reviews and revises its goals each year (in consultation with the missile defense oversight structure currently in place) based on developmental progress. MDA identifies these changes in its budget documentation and briefs these changes to OSD, OMB, and the Congress. MDA has revised the SOGs in an effort to develop a requirement reporting document/vehicle that more accurately portrays BMDS development in a top-level, "baseline" manner and alleviates existing concerns with the current process. MDA has developed Baselines to improve program management in accordance with GAO recommendations and the specific language of the 2005 Defense Authorization Act. These baselines cover the key cost, schedule, and performance parameters of the fielded portions of the BMDS for Blocks 04 and 06, and are an integral part of the overall BMDS Block SOG and Baselines Package. This BMDS Baseline Package includes: (1) The current SOG format for each Block; (2) An in-depth Introductory section that contains summaries of the new Systems Engineering Processes and International Participation in BMDS Development; (3) An Adversary Benchmark Appendix that highlights the actual specific threats and countermeasures that the BMDS can negate for Blocks 04 and 06; (4) An BMDS Verification and Assessment Annex that maps specific MDA test events (flight tests, ground tests, war games, M&S, etc) to the ESG's they validate/verify; and (5) A detailed Cost Breakdown Appendix of each Block (including Development, Fielding and Operations & Sustainment costs.)

Evidence: Completed and signed Blocks 04, 06 and 08 Development SOGs, Blocks 04 and 06 FC SOGs, and Blocks 04 and 06 FC Baselines submitted to Congress March 2005.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: BMDS stakeholders work together to achieve the Agency's mission and goals. For example, through the Warfighter Integration Program (WIP), MDA is partnering with the Miliary Services and Combatant Commands to ensure unity of purpose and effort. WIP process venues include exercises, wargames, seminars, and studies. This process allows the Missile Defense Agency to work with the key partners to define applicable Ballistic Missile Defense System capabilities; produce Ballistic Missile Defense System prioritized capability lists; develop operational concepts; formulate logistical sustainment policies and procedures; enable timely fielding of missle defense capability; and make improvements to fielded missile defense capabilities. At the same time, MDA is negotiating with various services the Transition and Transfer Plans associated with the transition of BMDS components or elements. MDA and Services are also collaborating to determine the responsibilities for Operations & Support (O&S) funding in the outyears. Funding for O&S in FY05 is the shared responsibility of the Services and MDA. Funding for BMDS related Contractor Logistics Support (CLS) will remain the responsibility of MDA through FY13. MDA has updated O&S estimates included in the FY06 budget. The FY07 budget will be adjusted appropriately to satisfy this requirement, however MDA funding for O&S was a major unplanned cost that has caused disruption in MDA's budget. MDA is negotiating Inter Service Support Agreements (ISSAs) with the various installations to fund base level support. The process and overall concept for transitioning and transferring MDA elements to the services as they mature and become "operational" has been developed, but has not been fully implemented. MDA has developed an effective military service and industry partnership. The Director, MDA engages Flag Officer/General Officer and Senior Executive Service (FOGO) decision makers with regard to missile defense issues using Board of Directors Meetings. To address issues more precisely, MDA has also created a Transition Integrated Product Team (IPT) composed of working staff levels and subordinate working groups to develop detailed Transition Plans and supporting annexes for all key BMDS components and elements. The Transition IPT meets regularly and a total of 13 preliminary draft BMDS Annexes are being developed by a Planning Working Group. These annexes will be circulated for MDA, Service, and COCOM review, comment, and concurrence by September 2005. The Plan's focus is on resources and specific deliverables affected by the transition process. The plan and its annexes were addressed in IPT and FOGO meetings hosed by MDA in July 2005. Outstanding transition issues are resolved through MDA--Service Board of Directors meetings, including participation by Service Acquisition Executives. Finally, DoD's Missile Defense Support Group advises the Director regarding missile defense activities and processes. The Services, Elements, and COCOMs agreed to the concept in January 2005. The Government Accountability Office (GAO) has performed several audits and briefed House Armed Services Committee staff on MDA's approach to transition. Preliminary GAO feedback has been favorable. This approach has led to the direct engagement of interservice support at specific missile defense locations. MDA has agreed to share Operations & Support (O&S) expenses with the Army for Fort Greely (FGA) base support and with the Air Force for Vandenberg Air Force Base (VAFB) base support. The open issue of shared MDA and USAF O&S funding for FY06 associated with the Eareckson Air Station (EAS) agreement is currently being addressed.

Evidence: Mutual commitment to the goals of the BMDS program is documented by various MOUs, MOAs, Plans, Contracts, and Inter Service Support Agreements. The comprehensive BMDS Transition and Transfer (T2) Plan, under development since early in 2005, is rapidly approaching completion in time for MDA, Service, COCOM, and OSD review and comment September 2005. This Plan has been the subject of working- and flag-level meetings and conferences to foster mutual participation, support, and confidence.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: MDA is subject to annual external oversight by the GAO, as specified in the FY2002 and FY2005 Defense Authorization Acts. MDA is also subject to Departmental oversight, some of which is legislated. The Director, Operational Test & Evaluation, completes annual reviews of MDA's progress toward fielding new capabilities, and assists in establishing adequate test goals and procedures. Effective April 2003, the MDA and Office of the Secretary of Defense (OSD) Cost Analysis Improvement Group (CAIG) signed a Memorandum Of Agreement (MOA) establishing that the CAIG would develop independent cost estimates (ICE) for production decisions including development, production, and operations and sustainment estimates. The CAIG has developed and provided ICEs beginning in CY2003 for both the Ground-based Midcourse and Aegis BMD Block 04 and Block 06 programs. Analyses of Military Utility will be accomplished by JTAMDO and STRATCOM. The Defense Science Board (DSB) provides advisory services regarding acquisition processes. Finally, the PART evaluation process is also an independent evaluation, that helps the Agency by providing "outside eyes" into management areas that can be improved.

Evidence: Congress has required annual external evaluations of MDA by the GAO and the DoD test community. These were incorporated in public law in Sec 232, of the FY2002 Defense Authorization Act and reinforced by additional language in the FY2003 Defense Authorization Act. The latter focused on expanding DoD staff oversight of missile defense activities. In addition, an April 2003 MOA between MDA and the DoD CAIG established procedures for independent cost estimates of major ballistic missile defense programs.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: Each Development and fielding SOG, and associated Baselines are tied explicitly to a ""cost"" goal which in turn drives a budget request. MDA reviews and revises its goals each year, based on developmental progress and in consultation with the missile defense oversight structure currently in place. MDA identifies the changes in its Selected Acquisition Report (SAR) and budget documentation and briefs the changes to OSD, OMB, and the Congress. No official decisions have been made concerning the fielding of capability beyond Block 06, although completing the current Block 06 operational configuration requires funding through FY2007. MDA's budget requests are explicitly tied to accomplishing its annual and long-term performance goals. To date, the President has approved BMDS deployments consistent with approved Baselines for Blocks 04 and 06. The Missile Defense Agency remains committed to the mission of developing and fielding an integrated, layered ballistic missile defense system to protect the nation, our deployed forces, and allies and friends. To help fulfill this mission, MDA has established the "BMDS Block SOGs and Baselines Package" which officially catalogues MDA developmental and fielding goals through the end of CY 2011. To achieve each goal, MDA has engineered, and continues to refine, the BMDS Work Breakdown Structure (WBS). Resources are allocated to accomplish the work planned in the WBS. The WBS is translated into budget terms: Program Elements, Projects, and Tasks to which costs are associated and budget documentation is developed accordingly. Tradeoffs are often required to achieve fiscal controls. The MDA Program effectively balances capabilities across boost, midcourse, and terminal segments to address evolving threats. The proposed program balances development and fielding efforts within the funds provided, preserves flexibility for alternative option paths as development efforts are proven, and provides for incremental improvements to the BMDS over time.

Evidence: DoD Program Decision Memorandum - II (Jan 13, 2003), FY2006 President's Budget and Congressional justification materials.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The MDA Fiscal Year (FY) 2006 Budget Estimates Submission (PB06) contains the planned program, balanced with the associated funding, through the FYDP. It includes funding for the next planned increment to MDA fielding (Block 2006). MDA has reorganized in an effective manner, and appears to be taking positive steps to keep programs aligned and prioritized including, ensuring all budgetary requirements are identified to accomplish Development and fielding SOGs and associated Baselines. With the FY 2006 President's Budget, MDA managers have baselined the Ballistic Missile Defense System capabilities to be fielded for Blocks 2004 and 2006. The Department of Defense has identified the resources required to fully fund the baselines, both in the MDA budget as well as funding in OSD Defense-Wide Program Element 0904903D. This action corrects the significant strategic deficiency identified in previous Program assessments that future missile defense deployments and operations had not been fully funded. For Blocks 2008 and beyond, MDA described future fielding plans that could be realized if MDA is successful in their corresponding development and test program. Consistent with an evolutionary, capability-based fielding strategy., OSD has earmarked the required outyear funding for these potential future fielding decisions in OSD PE 0904903D. OSD and MDA will propose specific Block 08 fielding objectives with the required funding for the FY08 President's Budget submission. However, the funds in OSD Defense-Wide Program Element 0904903D have not been re-programmed or allocated to MDA Which means that nearly $8.0 billion in future funding is questionable. To mitigate strategic planning program risk, MDA has adopted the concept of managing to a strategic rhythm. The strategic rhythm is captured in the agency's Integrated Program Policy. The Integrated Program Policy outlines the formal process of which program changes are managed. The process ensures that changes in program funding align with the Director's priorities as detailed in the Strategic Intent and companion Director's guidance. The Strategic Intent and Director's Guidance is currently in draft. MDA has also established an integrated product team structure to closely coordinate with the Services, the Joint Staff, and Combatant Commanders to develop transition and transfer plans detailing organizational responsibilities for deploying and manning operational elements of the BMDS. BMDS fielding goals have been established for future Blocks across the FYDP (Blocks 2008 and 2010 FC SOGs) with specific baselines to be articulated in future budget decisions. Resourcing future baselines will be addressed accordingly.

Evidence: DoD Program Decision Memorandum - II (Jan 13, 2003), GAO Report on "Missile Defense: Knowledge Based Practices are Being Adopted, but Risks Remain,"(April 2003), DoD Financial Management Regulation (FMR), and MDA operates consistently with DoD 5000.1 (May 12, 2003).

Has the agency/program conducted a recent, meaningful, credible analysis of alternatives that includes trade-offs between cost, schedule, risk, and performance goals, and used the results to guide the resulting activity?

Explanation: MDA does not use formal and structured DoD Analysis of Alternatives. Broadly, the MDA Integration Board (MIB) oversees all aspects of missile defense from the BMDS to the Elements. The MIB ensures that relevant planning, programming, and technical issues are reviewed and trade-offs adjudicated in a timely manner. More specifically, in the systems engineering process, MDA regularly analyzes alternatives and makes trade-offs between cost and capability. In addition, the Configuration Control Board makes tradeoffs between cost and capability. In 2002, the Defense Science Board (DSB) performed an analysis of future investment strategies in MDA, and determined that MDA was "on the right track". The DSB study was also related to the 2002 Summer Review that resulted in the first BMDS deployment decisions. The Summer Review conducted an analysis of alternatives as to what could be fielded - per direction in the FY04-09 Defense Planning Guidance - to counter a specific threat. Technical results were balanced against programming constraints to produce the first deployment decisions. DoD subsequently conducted two technical studies (summer of 2003 and 2004) to refine the options and recommend deployment funding. MDA has conducted an investment analysis-of-alternatives to define the Block 06 architecture and has a similar analysis underway for Block 08.

Evidence: Summer of 2002 Senior Executive Committee and Missile Defense Support Group deployment alternatives studies. DSB final recommendations from August, 2002. On-going MDA future investment alternatives studies (as briefed to the MDSG). Charter of the MDA Integration Board.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: At weekly System Element Reviews (SERs), MDA collects and disseminates performance data on one of the Elements or projects to provide information about how resources are being used to achieve program objectives. These include: key accomplishments, technical performance measures, schedule status, risks, earned value, and budget/financial execution. Projects within the BMD Program are assigned to executing managers who are accountable for project performance. Performance reporting is accomplished through quarterly performance reviews, end-of-day and end-of-week status reports, contract deliverables, and routine and ad hoc analysis products. Integrated Program Assessments are prepared monthly on each Element providing program status and insight into issues. MDA has established other review forums/fora to permit the leadership to hear and evaluate the data provided by element and functional managers. The Financial Control Board conducts monthly Financial Execution Reviews, and addresses necessary funding actions as a result of the approval of Engineering Change Proposals at the CCB. At Program Reviews, MDA executives review and discuss the status of key issues/watch items. Contract Execution Reviews are conducted to keep abreast of key contract issues and changes. Senior decision makers use this information to assess program status and make changes to program plans to improve performance.

Evidence: MDA collects and reports program performance data monthly, quarterly and annually. (1) Program cost, schedule, performance and risk are reviewed by MDA leadership quarterly in System and Element Reviews; (2) Program status is presented to Congress via the Selected Acquisition Report; (3) Specific aspects of the program are reported to GAO in support of their annual assessment; (4) Director or Senior Executive Officer briefs USD(AT&L) and MDSG quarterly on the BMDS progress, status, and issues, and enables the MDSG to render advice; (5) Director briefs the Senior Executive Council (SEC) at least annually on the health of the BMD program, and presents the BMD program as described in the upcoming President's Budget to gain SEC approval of BMD program content and direction; (6) Earned Value Management System data are reported to MDA leadership and to the external Missile Defense Support Group (MDSG) on a monthly basis in the Contract Assessment Report. The Director of MDA has also instituted "Flash Reporting" requirements for timely earned value data to serve as a principal tool in managing the MDA program.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: MDA element performance through FY04 appeared sound. All the Elements use earned-value analysis to provide details about their cost and schedule variances, and this information is provided monthly to program executives. MDA element managers also provide event and financial status in a monthly Contract Execution Review (CER), which provides support to integrated management decisions. In addition, element managers report on their programs' progress once a quarter in Schedule Execution Reviews (SER) Monthly. The Program Integration office conducts Integrated Program Assessments of cost, schedule, and performance progress for all of the BMDS elements and provides the assessments to MDA executives for review.

Evidence: Selected Acquisition Reports (SARs) on missile defense; Contract Assessment Reports; quarterly MDA System and Element Reviews; and missile defense Quarterly Program Reports (forwarded to the MDSG).

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Based on the most recent financial reports, the MDA programs will meet or exceed the DoD goals for obligation and expenditure rates for FY05.

Evidence: FY05 mid-session end-year execution review. DoD Comptroller Form 1002s on the financial status of each major program.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: Overall progress in the BMDS is driven by technical and verification issues, which may require the fielding of capabilities to be replanned over time (spiral development). Work and content are adjusted, and may experience some instability. Under spiral development, with schedule instability, it is difficult to achieve significant cost efficiency improvements. However, draft-efficiency goals have been formulated for the GMD and Sea-based missile defense production efforts. The Director has established broad goals to expand efficiency criteria in all production and support contracts, and uses an MDA "Acquisition Support Cadre" to promote and track these acquisition initiatives.

Evidence: The MDA Implementation Plan and associated program office supporting documents provide an organizational goal for improving production and process efficiency. Current examples are still limited to the PAC-III production program, but MDA is working to expand efficiency goals across multiple missile defense programs as they transition into production. MDA actions to achieve efficiency in program execution also encompass the activities of the Contract Change Board (CCB). The CCB works to ensure that all BMDS efforts that are negotiated and contracted are in harmony with the overall BMDS acquisition strategy and that the specific contract actions optimize BMDS performance, schedule and cost management opportunities.

Does the program collaborate and coordinate effectively with related programs?

Explanation: DoD missile defense efforts are unique - no other departments, agencies, or branches of government are involved in missile defense.

Evidence: N/A

Does the program use strong financial management practices?

Explanation: DoD's financial management weaknesses are well-documented. While DoD continues to make efforts to improve them, the Department has yet to obtain an unqualified audit opinion. The MDA does not have audit reports demonstrating that its missile defense programs are free from internal weaknesses. Moreover, DoD's plan to obtain a department-wide unqualified audit opinion has continued to slip from its planned milestones, which warrants a "no" for this question.However, Missile Defense's strategy for improving financial practices is aligned with that of the OUSD Comptroller's office. We plan on using an event drive scenario rather than date driven one. Using an integrated business case approach, and depending on the type of challenges and cost, we will review the achievability of each event. This system also employs a collaboratively developed, system migration away from the systems we are currently using. While our timeline to attain a clean audit opinion is not rigidly set, our strategy is to align our assertion dates with the Army, Navy and Air Force. We believe we can complete the assertion process by FY2009. Our next event is to complete the assessment phase in 2010, and the audit in FY2011.

Evidence: None of the reports or audits specifically cite the Missile Defense programs for material financial weaknesses; however none of the audits specifically examined that aspect of the program. Numerous audits document DoD's financial management weaknesses. Because of the magnitude of its problems, DoD is unlikely to obtain an unqualified opinion for some time.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The BMDS is a complex, evolutionary program characterized by a high degree of flexibility in its development, fabrication and fielding endeavors. As such, the BMDS does not exhibit certain established characteristics, such as a pre-determined inventory objective or a standard Element/Component service life, that are necessary to compute a traditional Life Cycle Cost Estimate (LCCE). In lieu of a traditional LCCE, MDA defines and estimates costs for the annual operating costs of the full BMDS. MDA ensures that the overall Department budget request - including MDA and the other Services - budgets for the full BMDS operations and sustainment costs, and projects these costs throughout the FYDP. With the linkage of strategic plans and performance plans to budget projects, MDA will link obligations and expenditures to performance. MDA is constrained in improving cost effectiveness and program stability by the nature of spiral development. Capability milestones become firm in the near term, but not necessarily in the out years. It is not known in advance with any certainty which technologies will mature sufficiently in the future to be fielded in a specific year. Thus the program will continue to be constrained in its ability to improve overall cost efficiency.

Evidence: The BMDS Block SOGs and Baselines Package shows the RDT&E cost, schedule, and performance goals that MDA identified in the Development SOGs and fielding Baselines for Blocks 04 and 06 which are funded through FY07. DoD has fully funded Missile Defense Plan I/Block 04 (MDA development program and Initial Defensive Capability/Initial Defensive Operations). Costs associated with Missile Defense Plan II/ Block 06 are funded except for FY08-10. Operations and sustainment costs are partially funded for MDP I and II. MDA is in process of updating O&S estimates so that total costs can be budgeted, either by MDA or the appropriate Service. The budget will be adjusted appropriately to satisfy this requirement. MDA has rigorous internal management controls that enable the agency to monitor program execution, as well as identify opportunities for technology insertion, and adjust plans accordingly. MDA makes the necessary adjustments internally to ensure the program remains executable.

Is the program managed by maintaining clearly defined deliverables, capability/performance characteristics, and appropriate, credible cost and schedule goals?

Explanation: MDA reviews and revises its goals each year, where applicable, in consultation with the missile defense oversight structure currently in place and based on developmental progress. MDA identifies changes in its budget documentation and briefs the changes to OSD, OMB, and the Congress. MDA has instituted baselines (in the context of our SOG efforts) to satisfy the requirements of the Defense Authorization Act of 2005. (See answer for Question 2.1). As noted in the answer to Question 2.1, Fielded Configuration Baselines will track key cost, schedule and performance parameters for the Block 04 and 06 BMDS being fielded.

Evidence: Signed Blocks 04 and 06 SOGs and Blocks 04 and 06 Baselines. The BMDS Block SOGs and Baselines Package submitted to Congress in March 2005.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: MDA achieved implementation of its highest priority goal of Initial Defensive Operations in FY2004. Due to the required OMB change of measuring the BMDS long-term outcome goals on a fiscal year cycle rather than the original calendar year cycle, the original long term outcome goals baselined for 2005 have an additional 3 months of activity. The CY2005 long term outcome goals to characterize 7 ESGs for Block 2004 and to finish Block 2004 are adjusted to FY2006 to be in keeping with the 1 Oct 2004 through 30 Sep 2005 PART evaluation period. Nonetheless, there are several Block 2004 accomplishments that demonstrate adequate progress in achieving Block 2004 long-term performance goals to include (1) completed THAAD weapon system qualification in preparation for return to flight in early FY 06; (2) validated PATRIOT BMDS capability against short to medium range missiles with four successful intercepts; (3) emplaced four additional Ground Based Interceptors, for a total of seven in Fort Greely, Alaska and two in Vandenberg Air Force Base, California; (4) integrated the SBX radar to the platform and completed two series of sea trials to checkout integration activity and activate the radar for the first time; (5) demonstrated COBRA DANE's integrated Missile Defense performance to detect and track a long range ballistic missile as well as the Ground Fire Control and Communications capability to generate Weapons Task Plans; (6) delivered Long Range Surveillance and Track capability to seven Aegis Destroyers; (7) validated Aegis BMD capability, in a simulated wartime environment, by successfully intercepting two of two short range targets; (8) built a strong, cooperative working relationship with Japan; (9) installed engagement capability to two Aegis Cruisers, which are now available for emergency activation, and delivered 8 SM-3 Block I missiles; (10) delivered FBX-T radar to Vandenberg Air Force Base and demonstrated integration of the radar and C2BMC; and (11) improved C2BMC situational awareness and BMDS connectivity to Component Commanders. Complete assessment of Block 2004 long-term performance goals will be conducted in the FY2006 PART. The Block 2004 long-term development and deployment cost goal of $11.96 billion will be assessed at the end of FY 2007. For Block 2006 and other future blocks the following accomplishments have been made (1) successfully demonstrated Link-16 connectivity needed to allow communication between ABL and Aegis; (2) demonstrated that the ABL can create and sustain a megawatt class laser beam in ABL's First Light milestone; (3) initiated the Low Power System Integration Passive flight test series in ABL's First Flight milestone to support ABL capability in the future; (4) demonstrated BMDS capability to support kinetic intercepts in the boost phase by quickly closing the fire control loop (track, predict and intent to engage); (5) completed STSS software build one and Satellite Bus I Assembly, both necessary and important steps on the away to a mid FY2007 STSS launch of two demonstration satellites. . Block 2006 PART evaluation will be conducted in the FY 2008 cycle.

Evidence: MDA remains basically on track with interceptor fielding for the Test Bed. The agency has recovered from the 2003 propellant accident, which last year affected the long-range ground-based interceptors as well as the Aegis Standard Missile-3 (SM-3) and Terminal High Altitude Area Defense, or THAAD, booster production. The agency should have ten more interceptors emplaced in Alaska by December of this year. In October, MDA received the first Standard Missile-3 for deployment aboard an Aegis ship. To date, five of these interceptors with a total of eight are scheduled to be delivered by the end of the year. By then, MDA will also have outfitted two Aegis cruisers with this engagement capability. So, in addition to providing surveillance and tracking support to the integrated ballistic missile defense system, Aegis will soon provide a flexible sea-mobile capability to defeat short- to intermediate-range ballistic missiles in their midcourse phase. The MDA sensor program is also on track. The Beale radar in California is receiving final software upgrades this spring and will be fully integrated into the system. The agency is now testing a transportable X-band radar, which can be forward-deployed this year to enhance surveillance and tracking capabilities. The most powerful sensor capability, the Sea-Based X-band Radar (SBX), will be on station by the end of December. This sea-mobile midcourse radar will increase the complexity of tests by enabling different intercept geometries. When deploy in the Pacific Ocean, it also will have an inherent operational capability against threats. Finally, the RAF Fylingdales early warning radar will be ready for missile defense purposes this year and will provide the initial sensor coverage needed against Middle East threats.

Does the program (including program partners) achieve its annual performance goals?

Explanation: Due to the required OMB change of measuring the BMDS outcome goals on a fiscal year cycle rather than the original calendar year cycle, the outcome goals baselined for 2005 have an additional 3 months of activity. Therefore, the annual outcome goal to conduct 9 major test events defined as in-flight intercepts involving GMD, AEGIS, or THAAD, is adjusted to 6 major test events to be in keeping with the 1 Oct 2004 through 30 Sep 2005 evaluation period. The Agency executed 4 of the 6 major test events. Two GMD intercept tests were not successful. In light of the two failed long range GMD intercept tests, IFT- 13C and IFT-14, a mission assurance team has been commissioned to implement corrections needed to ensure return to a successful flight test program. Nonetheless, the aborted launches did allow for the successful tracking of the target and feeding the information into the fire control system which contributed to the generation of a Weapon Task Plan. In FY 2005, MDA planned a total of 29 and executed 19 test events. There were three planned and two executed Ground-based Midcourse Defense (GMD) tests; four planned and three executed PATRIOT tests; three planned and two executed AEGIS BMD tests; 11 planned and five executed non-Intercept Flight tests and eight planned and seven executed ground tests/wargames. The ten tests planned, but not executed were due to schedule changes. Nonetheless, MDA's overall test success rate is 70 percent. Turning to the annual output goal, the annual output goal for FY2005 is to meet the annual budget target of $7.2B. The actual budget is $7.0 with a favorable variance of $ 200 Million which is evidence of improved efficiency, considering the SOG Baseline goals have not change.

Evidence: In FY05 MDA successfully executed 4 out of 6 flight tests, 7ground tests, and Limited Defensive Capability (LDO) shake down capability. The two aborted flight tests include the Integrated Flight Tests (IFT) -13C and 14. The aborted Integrated Flight Test (IFT) - 13C in December 2004 was caused by an overly stringent parameter measuring the communications rate between the flight computer and its guidance components which automatically terminated interceptor operations. The launch control system operated as designed when it shut down the interceptor. The problem was fixed by software update for the parameter. IFT-13C success includes target tracking and feeding the information into the fire control system. The IFT-14 in February 2005 used the same interceptor as the IFT-13C and successfully launched, tracked and fed information to the fire control system. However, a piece of ground support equipment did not properly clear causing the control system not to issue a launch enable command.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: To improve the BMDS overall effectiveness, GMD is the area of focus. The BMD Program will largely meet Block 04 SOG cost and schedule goals, the two test failures in the GMD program, MDA's largest single effort, are putting significant cost pressures on MDA's overall program. GMD will require additional funds or will have to defer planned content to stay within the current budget. Cost performance on five prime contracts (Sensors, THAAD, C2BMC, Targets, and Aegis BMD) is somewhat under or over cost. Two others have new or restructured contracts and baselines, and cost variance measurement is too early to be useful. The challenging requirements associated with fielding GMD components resulted in cost growth, but this growth has been addressed within MDA's TOA. To enhance cost management policy, as of June 2005 MDA Award Fee Directive puts added emphasis on cost management by requiring "[t]imely and accurate cost data reporting; traceability of the data within and between reports; comprehensive Basis of Estimates for Work Breakdown Structure elements; development, in cooperation with the government, of common cost methods; proactive notification to the program office of projected cost overruns or under runs with fully documented rationale. Contractor consistently anticipates possible sources of cost growth and implements solutions to maintain cost at current or below program baseline. Provides narratives that explicitly address both current and future programmatic and cost impacts of the current cost performance." Additionally, MDA employs key knowledge-based measures and practices to track and control the Basic and Applied Research efforts that focus on technology requirements for the BMDS. Research successes continue with additional funding. Progress and results are closely monitored through such mechanisms as Engineering, Manufacturing Readiness Levels (EMRL) and Technology Readiness Levels (TRL). EMRL's describe the maturity of the design & manufacturing process and identify potential risk areas as a program proceeds through development to production. These are applied to the lowest WBS level necessary for determination. TRL's are a systematic metric system that supports assessments of technology maturity. They are transition points defined by knowledge-based criteria at all levels of development, production and testing. Regarding the PATRIOT Advanced Capability-3 (PAC-3) cost reduction efforts being under taken, the FY05 through FY09 production is capped at 108 units as the Medium Extended Air Defense System (MEADS) program is merged with the PAC-3, utilizing funds previously slated for additional units. The incremental approach to inserting the MEAD's technology in the PAC-3 system is the most efficient means of integrating the two weapon systems. To minimize the impact the spiral acquisition approach has on unit cost, the Army has implemented a unit cost reduction strategy that includes the following actions: (1) investment in production and manufacturing facilities to increase production yield from a capacity of 12 to 20, (2) Investment in reducing the cost of the PAC-3 Seeker by $20K per missile, beginning in FY07 (3) Foreign Military Sales contract awards to increase production to capacity, and (4) increased competition.

Evidence: All BMD prime contracts are Cost Plus Award Fee and contain clauses to incentivize achievement of cost and schedule goals. System and Element Reviews and Financial Execution Reviews are held regularly to monitor achievement of program cost and schedule goals. Earned Value Management is used on all large, medium/high-risk BMD contracts. The System Engineering process sets achievable as well as stretch goals. Report to the Senate Armed Services Committee (SASC) regarding the Army Position on the PAC-3 Missile Unit Cost Reduction, 11 Feb 05.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: MDA and Army missile defense programs are similar to other large defense programs, in terms of delivering capabilities on cost and schedule. Although only the PAC-III missile defense program has proceeded through the entire acquisition cycle, there are currently no significant differences in cost, schedule, and performance results between missile defense and the broader DoD.

Evidence: MDA financial reporting documents; Missile Defense Selected Acquisition Report (2003); program update briefings and annual Congressional Budget Justification Briefings.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Of the eleven GAO ongoing or completed audits in FY05 that evaluate MDA goals or performance, four address program effectiveness in detail. In its March 2005 report, the GAO concluded that BMDS performance remains "uncertain and unverified" due to slipped end-to-end flight tests with operationally-representative software and hardware. The same GAO report recommended that MDA's block management structure be modified since fielding goals do not consistently match cost goals. MDA concurred with the report recommendation by agreeing to modify its block management approach. This report fulfills a Congressional mandate to annually review until 2009 the extent to which MDA is meeting its program goals. In another March 2005 report, the GAO assessed how well MDA elements progressed in their technical and development maturity. For the Ground-based Midcourse Defense (GMD), the GAO identified 3 of 10 critical technologies as mature and the remaining 7 nearing full maturity provided that future flight and system tests occur. GAO audits have also positively impacted other areas of MDA program management. As a result of a February 2004 GAO report that assessed testing progress against 50 test recommendations from an August 2000 DOT&E report, MDA made a formal assessment in FY05 of its testing program using the 50 recommendations as an assessment tool. MDA has also committed to charting its progress every 6 months using the recommendations. Lastly, in an April 2004 GAO report, the report recommendation - that MDA should establish cost, schedule, and performance baselines - was instrumental in MDA's decision to establish such baselines in FY05. In its September 2005 report, GAO complemented MDA's efforts to manage the future transition of BMDS assets and programs by first, establishing an official MDA "transition office (TR)", and second, establishing an Integrated Product Team (IPT) to manage transition details. The OSD Cost Analysis Improvement Group (CAIG) completed independent cost estimates (ICEs) for GMD and Aegis BMD in FY05 that contributed to MDA adjusting its cost data collection procedures in a manner that improved data quality from contractors. The improved data now serves as the basis of MDA's cost estimates for GMD and Aegis BMD. .

Evidence: GAO reports released in FY05: DEFENSE ACQUISTIONS: Status of Ballistic Missile Defense Program in 2004 (March 2005); DEFENSE ACQUISITIONS: Assessments of Selected Major Weapons Programs (March 2005). FY04 GAO Reports that impacted MDA program management in FY05: MISSILE DEFENSE: Actions Being Taken to Address Testing Recommendations, But Updated Assessment Needed; MISSILE DEFENSE: Actions are Needed to Enhance Testing and Accountability (April 2004). DEFENSE ACQUISITIONS: Actions Needed to Ensure Adequate Funding for Operations and Sustainment of the Ballistic Missile Defense System (September 2005).CAIG Independent Cost Estimates (ICE) released in FY05: ICE on GMD (October 2004) and ICE on Aegis BMD (February 2005).

Were program goals achieved within budgeted costs and established schedules?

Explanation: The missile defense program in aggregate generally achieved its goals in FY05. In the Block 04 development program, construction of the Initial Defensive Operations (IDO) facilities was within 30 - 60 days of planned schedule; but, in-flight test failures delayed overall operational capabilities. The overall pace of the Block 04 program (which will continue through December 2005) appears adequate at this point, although continued slips in planned Integrated Flight Tests put at risk the operational credibility of the IDO system. In addition, the Army began modifications to the PAC-III system to correct deficiencies in target identification that were apparent in Operational Iraqi Freedom.

Evidence: OIF Lessons Learned reports; MDSG status briefings; MDA PART evaluation briefings and support data.