Summary
The Missile Defense Agency (MDA) has spent about $56 billion and will spend about $50 billion more through 2013 to develop a Ballistic Missile Defense System (BMDS). GAO was directed to assess the annual progress MDA made in developing the BMDS as well as improvements in accountability and transparency in agency operations, management processes, and the new block strategy. To accomplish this, GAO reviewed contractor cost, schedule, and performance; tests completed; and the assets fielded during 2008. GAO also reviewed pertinent sections of the U.S. Code, acquisition policy, and the activities of the new Missile Defense Executive Board (MDEB). An appendix on the effect the cancellation of a Ground-based Midcourse Defense flight test had on BMDS development is also included.
Cost: MDA has not yet established baselines for total costs or unit costs, both fundamental markers most programs use to measure progress. Consequently, for the sixth year, GAO has not been able to assess MDA's actual costs against a baseline of either total costs or unit costs. MDA planned to establish such baselines in 2008 in response to past GAO recommendations, but has delayed this until 2009. GAO was able to assess the cost performance on individual contracts, and project an overrun at completion of between $2 billion and $3 billion. However, because in some cases the budgeted costs at completion--the basis for our projection--has changed significantly over time as adjustments were made, this projection does not capture as cost growth the difference between the original and current budgeted costs at completion. In one case, these costs increased by approximately five times its original value. Performance and Testing: While MDA completed several key tests that demonstrated enhanced performance of the BMDS, all elements of the system had test delays and shortfalls. Overall, testing achieved less than planned. For example, none of the six Director's test knowledge points established by MDA for 2008 were achieved. Poor performing target missiles have been a persistent problem. Testing shortfalls have slowed the validation of models and simulations, which are needed to assess the system's overall performance. Consequently, the performance of the BMDS as a whole can not yet be determined. Schedule: Although fewer tests have been conducted than planned, the production and fielding of assets has proceeded closer to schedule. Except for no ground-based interceptors being delivered, all other radars, standard missiles, and software were delivered as planned. However, some deliveries, such as enhanced Exoatmospheric Kill Vehicles, will now precede test results. In most cases, MDA has also reduced the bases it planned to use to declare when capabilities are operational in the field. Thus, fielding decisions are being made with a reduced understanding of system effectiveness. Transparency, Accountability, and Oversight: Improvement in this area has been limited. The Missile Defense Executive Board (MDEB) has acted with increased authority in providing oversight of MDA and the BMDS. However, transparency and accountability into MDA's work is limited by the management fluidity afforded through the lack of cost baselines, an unstable test baseline, continued use of development funds to produce assets for fielding, and renewed potential for transferring work from one predefined block to another. A better balance must still be struck between the information Congress and the Department of Defense need to conduct oversight of the BMDS and the flexibility MDA needs to manage across the portfolio of assets that collectively constitute the system's capability. At this point, the balance does not provide sufficient information for effective oversight.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
Paul L. Francis
Government Accountability Office: Acquisition and Sourcing Management
(202) 512-2811
Recommendations for Executive Action
Recommendation: The Secretary of Defense should direct the MDEB to assess how the transparency and accountability of MDA's acquisitions can be strengthened to enhance oversight, such as by adopting relevant aspects of DOD's normal requirements, acquisition and budgeting processes, without losing the beneficial features of MDA's existing flexibility.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of cost, complete total cost baselines before requesting additional funding for Blocks 2.0 and 3.0 and commit to a date when baselines for all blocks will be established.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of cost, ensure that transfers of work from one block to another are transparent and reported as cost variances.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of cost, provide additional unit costs reports, beyond flyaway unit costs, that incorporate both procurement and research and development funding so that there is a more comprehensive understanding of the progress of the acquisitions.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of testing and performance, expand the BMDS test baseline to include tests scheduled beyond the first succeeding year of the plan to ensure its synchronization with BMDS contracts.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of testing and performance, ensure that the Director, Operational Test and Evaluation (DOT&E), is consulted before making significant changes to the test baseline so that the tests planned provide DOT&E with sufficient data to assess the performance of the BMDS elements.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of testing and performance, ensure that planned test objectives include concrete data requirements anchoring models and simulations to real-world tests, synchronized with flight and ground test plans and that the effects on models and simulations of test cancellations, delays or problems are clearly identified and reported.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of testing and performance, reassess the flight tests scheduled for the end of fiscal year 2009 to ensure that they can be reasonably conducted and analyzed given targets and other constraints.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of knowledge-based decisions, synchronize the development, manufacturing, and fielding schedules of BMDS assets with the testing and validation schedules to ensure that items are not manufactured for fielding before their performance has been validated through testing.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term, the Secretary of Defense should direct MDA to, in the area of knowledge-based decisions, conduct a flight test of the Capability Enhancement-I Exoatmospheric Kill Vehicle (CE-I EKV) against a complex target scene with countermeasures to complete MDA's previous testing goal of understanding the performance capabilities of the first 24 fielded Ground-based Interceptor (GBIs).
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: In the near term the Secretary of Defense should direct MDA to, in the area of knowledge-based decisions, strengthen the capability declarations by using the complete analysis from annual performance assessments as the basis for declaring engagement sequence groups as fully capable and block development as fully complete; otherwise, indicate the limitations of the capabilities and steps that MDA will take to reduce the risks.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
