Detailed Information on the
Future Combat Systems/Modularity Land Warfare Assessment

Achieving at least a Technology Readiness Level (TRL) 6 -- and preferably TRL 7 -- for all FCS critical technologies. Demonstrating the achievement of unit cost efficiencies in high-volume Modularity equipment purchases. Developing and implementing a system for tracking the outlay of Modularity funds at a line-item level of detail.

Convert all Army combat brigades to a modular configuration. The Army's long-term goal is to have built and converted 76 combat brigades to a modular configuration by 2012.

Measure: The number of existing Heavy Brigade Combat Teams transformed to FCS-equipped Units of Action by Fiscal Year 2027

Explanation:

Measure: The attainment by each of the 46 FCS critical technologies of Technical Readiness Level 6 or greater.

Explanation:Technical Readiness Level 6 indicates that a representive model or prototype system is tested in a relevant environment and sufficiently mature to be merged with a weapon platform for system demonstration.

Measure: Number of Active and Reserve component modular brigades built and converted

Explanation:The Army has a detailed annual conversion schedule according to which it plans to complete conversion of all Bridgade Combat Teams by the end of Fiscal Year 2011

Measure: How many of the 49 FCS critical technologies have attained Technical Readiness Level 6 or greater.

Explanation:Technical Readiness Level 6 indicates that a representive model or prototype system is tested in a relevant environment and sufficiently mature to be merged with a weapon platform for system demonstration.

Measure: Successful Preliminary Design Review - Scheduled for August, 2011.

Explanation:A successful Preliminary Design Review will fulfill specific requirements designated by the FCS program- Scheduled for August, 2011.

Measure: Successful Spin-Out 1 Entrance Decision

Explanation:A successful Spin-Out 1 Entrance Decision will review design maturity for Spin-Out 1 requirements, establish entrance requirements for Milestone C, establish Low Rate Initial Production quantities, and approve any necessary long-lead requirements. Scheduled for May 2006. The SO entrance decision is being consolidated into the Spring 2006 FCS DAB Review. There appear to be no major showstoppers at this time.

Measure: Successful Experiment 1.1

Explanation:A successful experiment 1.1 will fulfill 4 specific requirements designated by the FCS program 1. Data captured to address all assessment objectives. 2. Start phase 1 of experiment on schedule (scheduled for 4th Qtr FY06) 3. Start phase 2 of experiment on scheduled (scheduled for 1st Qtr FY07) 4. Start phase 3 of experiment on schedule (once approved) (scheduled for 2nd QTR FY07)

Measure: The fielding of FCS spin-out packages to the FCS Evaluation Brigade

Explanation:In order to spin FCS systems into the Army modular force, the FCS program must first evaluate the systems in a controlled environment.

Measure: Total number of Active and Reserve component modular brigades built and converted

Explanation:The success of the Modularity initiative is measured by the Army's ability to build new Brigade Combat Teams and convert current brigades to a modular structure on schedule.

Measure: Successful System of Systems Functional Review

Explanation:Completed Aug 05-- The System of Systems Functional Review (SoSFR) was an end-to-end program review conducted in August 2005 that met all of the established acceptance criteria for the event. The purpose of the SoSFR was to reach agreement on Warfighter requirements, define the initial SoS functional baseline, allocate performance requirements to the integrated platforms/systems and assess Program health/schedule/risk for upcoming SFRs.

Measure: Future Combat System (FCS) Earned Value Management (EVM)

Explanation:The Army continuously monitors the development execution and cost of the FCS program. FCS is a corner stone of Army modernization as we enhance our ability to conduct full spectrum operation as a campaign Army with expeditionary capabilities. The Army measures the health of FCS through its Cost Performance Index (CPI) and Schedule Performance Index (SPI) as part of the EVM. EVM is a technique that measures a program's actual costs and schedule performance by comparing it with "planned" costs/schedule baselines. EVM accomplishes this by assigning each work step a cost and time limit, and then measuring actual cost/times for that work step against planned allocations. A 100% score of the actual work and actual cost in a program was accomplished at the planned cost and within the planned time-frame. The Army's goal is to have a score of greater than 95% for both CPI and SPI. CPI quantifies the Budgeted Cost of Work Performed divided by the Actual Cost of Work Performed. Both indexes are adjusted with official changes to the overall program.

Is the program purpose clear?

Explanation: The purpose of the Army's Modularity and Future Combat Systems (FCS) initiatives is to provide regional combatant commanders with versatile land forces ready to fight and win the nation's present and future conflicts as an integral part of joint forces. To achieve this purpose, the Modularity initiative will reorganize the Army's Active and Reserve Components into Brigade Combat Teams that function as self-contained units and are more rapidly deployable than the current Division-based forces. The FCS program will provide a family of advanced air and ground-based systems, designed around a common network, to equip 15 Brigade Combat Teams and create the core of what the Army calls its "Future Force."

Evidence: U.S.C., Title 10, Subtitle B, Part 1, Chapter 307, Section 3062, paragraph (b) states that the Army "shall be organized, trained, and equipped primarily for prompt and sustained combat incident to operations on land." The Army Campaign Plan, published on April 12, 2004, states how the modular force partially equipped with FCS will achieve this purpose.

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

Explanation: Current military operations around the world demonstrate the need for Army forces that are organized and equipped to deploy rapidly, defeat a broad range of enemy forces, and provide a sustained ground presence to enable enduring and favorable political settlement.

Evidence: The 2002 National Security Strategy and the 2004 National Military Strategy define the range of operations and requirements that Army forces must fulfill to defend the United States. The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense outlines how Modularity and FCS will combine to fulfill current and future Army land force requirements.

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

Explanation: Although both the Army and Marine Corps constitute the nation's land forces, each force provides unique and complementary capabilities for carrying out military missions. The Army provides forces for sustained combat operations on land, as well as for power projection and forcible-entry operations, and maintains heavy and light forces, based both in the United States and overseas. The Marine Corps, as part of the nation's maritime forces, provides expeditionary forces to project combat power ashore either in support of naval campaigns or in conjunction with Army and Air Force units. While the Army plans for its transformed land forces to have expeditionary capabilities, its primary mission will continue to be to provide forces for sustained combat operations on land.

Evidence: Department of Defense Directive 5100.1, Functions of the DoD and its Major Components, derived from Title X, Chapter 6 of the U.S. Code.

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

Explanation: The Army has developed a comprehensive plan to integrate Modularity and FCS by building 77 Active and Reserve component Modular Brigade Combat Teams by Fiscal Year 2011, spinning out available FCS technologies into the modular force in Fiscal Years 2008, 2010, 2012, and 2014, and fully equipping a total of 15 FCS Brigade Combat Teams by 2027. Although the plan's cost, risk, and long schedule are reason for concern that the Army will be able to execute FCS as planned, the Army has taken meaningful steps in the early stages of Modularity and FCS to attempt to manage and mitigate the risks inherent in this complex undertaking. These measures have addressed potential flaws in the program design, and have increased the chances of success for Modularity and FCS.

Evidence: Key documents explaining the Army's program design for Modularity and FCS and the blending of both programs include the Army Campaign Plan (April, 2004), the 2004 Army Transformation Roadmap, and The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense. The Army's July 2004 restructuring of FCS and its decision in April 2005 to switch FCS to a more traditional contract based on Federal Acquisition Regulations addressed flaws in the program that could have negatively impacted the effectiveness of the Army's plan.

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

Explanation: Resources for Modularity and FCS are targeted to meet the purpose, set forth in the Army Campaign Plan, of providing relevant and ready land power capabilities to combatant commanders as part of current and future joint forces. Resources for Modularity are targeted primarily towards buying the equipment required to fill out Brigade Combat Teams. This equipment has already begun to reach the intended beneficiary -- the soldier -- in Modular Brigade Combat Teams that deployed to fight in Iraq and Afghanistan less than one year after initiation of the Army modular force conversion process. Resources for FCS are presently targeted towards developing and demonstrating systems and technologies that fulfill key performance parameters established by the FCS program. As these parameters are met, FCS systems will be spiraled into current forces beginning in Fiscal Year 2008.

Evidence: FCS Key Performance Parameters state the major requirements that FCS systems must achieve in order to be procured and fielded for use by the soldier. The Fiscal Year 2006 Budget Request and program schedule outline how resources will be used to move the program towards fielding these requirements. The Modularity Force Structure Baseline Chart, conversion timeline, and FY 2005 Supplemental Budget Request outline the equipment the Army will buy and the timeframe in which that equipment will be matched up and fielded with Brigade Combat Teams.

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: The Army's long-term performance measures for FCS and Modularity are: 1.) Completion of the modular conversion of all combat and support brigades for the Active Component, National Guard, and Reserve by the end of Fiscal Year 2011; 2.) The fielding of FCS spin-out packages to the FCS evaluation brigade in Fiscal Years 2008, 2010, 2012, and 2014 that begins the process of integrating designated FCS systems into the current force; 3.) The full equipping of 15 Brigade Combat Teams with FCS by Fiscal Year 2027; 4.) The attainment by each of the 54 FCS critical technologies of Technical Readiness Level 6 by the end of Fiscal Year 2008. While these measures each produce outputs that will constitute different elements of the Army's future land force capabilities, the combination of these outputs will produce the outcome of a versatile land force that will be ready to fight and win the Nation's current and future conflicts as an integral part of joint forces.

Evidence: The Army Force Structure Baseline Chart and the revised Army Campaign Plan outline long-term and annual targets for fielding Active and Reserve modular brigades. The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense present timeframes for the complementary implementation of Modularity and FCS. The Army Campaign Plan and FCS Buzzsaw chart outline the long-term measures of FCS progress.

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

Explanation: The Army has ambitious targets and timeframes for completing and integrating Modularity and FCS. The Army's long-term program schedule plans for 15 FCS-equipped Brigade Combat Teams within a larger modular force consisting of 43 to 48 Active Component Brigade Combat Teams by Fiscal Year 2027. The Army will complete the modular conversion of all combat and support brigades for the Active Component, National Guard, and Reserve by the end of Fiscal Year 2011. Long-term performance of the FCS program will be measured by each of its critical technologies achieving a specified Technical Readiness Level by Fiscal Year 2008, and by successful implementation of 4 spin-outs of designated systems into the current force, beginning with their testing in evaluation brigades, in Fiscal Years 2008, 2010, 2012, and 2014. These spin-outs will lead to the Army's final long-term goal of fielding 15 FCS-equipped Brigade Combat Teams by 2027.

Evidence: The Army Force Structure Baseline Chart and the revised Army Campaign Plan outline long-term and annual targets for fielding Active and Reserve modular brigades. The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense presents timeframes for the complementary implementation of Modularity and FCS. The Army Campaign Plan, the FCS Buzzsaw chart, and additional supporting documentation outline the long-term measures of FCS progress.

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: The Army has timelines that specify actions and milestones that need to be achieved annually in order to complete modular brigade conversions by Fiscal Year 2011 and begin spinning FCS systems into the current force in Fiscal Year 2008. Annual performance for Modularity is measured by the successful completion of planned modular conversions for each fiscal year from 2004 through 2011. Annual performance for FCS is measured by the progression each fiscal year of a targeted number of the program's critical technologies into Technical Readiness Level 6 -- the level of development at which a technology has been tested in a relevant environment and is mature enough to be merged with a weapon platform. The FCS Program's annual progress is also measured by the successful completion of specific milestones in the defense acquisition lifecycle, beginning with the FCS System of Systems Functional Review in August, 2005.

Evidence: The Army Campaign Plan and the Army Force Structure Baseline Chart provide a detailed yearly schedule for all Active and Reserve Component modular brigade conversions through the end of Fiscal Year 2011. The Army Campaign Plan, FCS Buzzsaw chart, FCS/Modularity Spin-out chart, and The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense lay out annual performance measures for the FCS program leading up to the initial spin-out of FCS systems into the Evaluation Brigade in Fiscal Year 2008.

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

Explanation: The Army Campaign Plan tasks the Army to complete specified numbers of modular conversions during each fiscal year between 2004 and 2011 in order to field 77 Active and Reserve modular Brigade Combat Teams by the end of Fiscal Year 2011. This timeframe is especially ambitious in light of the large number of Army troops currently engaged in major combat in overseas theaters. The FCS Program baseline for Fiscal Year 2006 is 20 of its 54 technologies at Technical Readiness Level 6. Its target for Fiscal Year 2006 is to have 30 critical technologies at Technical Readiness Level 6 by the end of the fiscal year. This target is quite ambitious given the large number and complexity of the critical technologies that constitute the FCS Program.

Evidence: The Army Campaign Plan and Army Force Structure Baseline chart provide in detail the Army's schedule for all modular conversions between Fiscal Years 2004 and 2011. The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense outlines the budget baselines for Modularity through Fiscal Year 2011 and FCS through Fiscal Year 2020. FCS annual targets and timeframes are presented in the FCS Buzzsaw chart, Spin-out chart and additional supporting documentation.

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: The Army works closely with Boeing, the Lead Systems Integrator for the FCS program, to monitor the cost, schedule, and performance of the FCS program using the Earned Value Management System. Likewise, Boeing uses the Earned Value Management system to monitor the cost, schedule, and performance of its subcontractors. The Army has also developed several program-level coordination documents supporting joint service collaboration for FCS, and coordinates with the Marine Corps on Modularity through the Army-Marine Corps Board.

Evidence: The FCS Memorandum of Agreement between the Army and Marine Corps and the participation of the Marines, Navy, and Air Force on the FCS "One-Team" are examples of joint collaboration. "The Army in Joint Operations -- The Army's Future Force Capstone Concept" articulates the Army's vision for it's Future Force in a joint environment. The Army and Boeing collaborate using the Earned Value Management System. Boeing has implemented this system for collecting cost, schedule, and performance data, and uses it to collect data from subcontractors for the Army to use in monitoring program progress.

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: The Army modular force is currently the subject of three ongoing Government Accountability Office studies focusing on modular force costs, force structure, and Army National Guard equipment. The Congressional Research Service also has written reports on the Army's modular redesign and Army Transformation. The FCS program has been extensively reviewed by the Government Accountability Office, Congressional Research Service, Institute for Defense Analysis, DoD Inspector General, and the Welch Panel.

Evidence: A selection of independent evaluations that have been conducted on FCS and Modularity includes: GAO Report 05-428T: "Defense Acquisitions: Future Combat Systems Challenges and Prospects for Success"; Institute for Defense Analyses Paper P-3929, "IDA Review of FCS Management"; CRS Report RL32888, "The Army's Future Combat System (FCS): Background and Issues for Congress"; CRS Report RL32476, "U.S. Army's Modular Redesign: Background and Issues for Congress."

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: The Fiscal Year 2005 supplemental budget request and supporting documentation for the Army modular force display how the Army plans to allocate its budgeted resources to meet its Fiscal Year 2005 performance goal of having 25 manned and equipped modular brigades by the end of Fiscal Year 2005. The request and supporting documentation lay out in detail the timing and sequence in which equipment will be purchased and phased into each brigade in Fiscal Year 2005 and in each fiscal year through the planned completion of Modular conversions in Fiscal Year 2011. The FCS Fiscal Year 2006 budget request displays how resources budgeted for Fiscal Year 2006 and subsequent fiscal years will move each FCS subsystem towards key milestones in the R&D process. The request subdivides the program into 8 "projects", and provides detailed annual past accomplishments and current/future planned program for each project, as well as an explanation of how each project fits into the larger FCS family of systems. In both cases, the Army presents its resource needs in a clear and transparent manner and explicitly ties resource requests to performance goals.

Evidence: The first budget request for Modularity was contained in the "Department of Defense Fiscal Year 2005 Supplemental Request for Operation Iraqi Freedom, Operation Enduring Freedom, and Operation Unified Assistance". This request was supplemented by supporting Army documentation that links requested funding to the sequencing of Fiscal Year 2005 Modular Brigade Conversions. The Fiscal Year 2006 and 2007 detailed budget request for FCS is contained in "Supporting Data FY2006/2007 President's Budget, Descriptive Summaries of the R,D,T&E, Army Appropriation, Budget Activities 4 and 5". The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense integrates the long-term budgets for Modularity and FCS and ties them to the complementary goals of the two programs.

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

Explanation: In July, 2004, the Army restructured the FCS program with the objectives of spinning mature FCS capabilities into the current force, lengthening the overall schedule by four years, developing an evaluation brigade to demonstrate FCS capabilities, and fielding all 18 FCS systems (the previous plan funded only 14). The program restructuring contained several features that reduce risk, and will allow more time for the further development of technologies that external analyses consider too immature for the System Development and Demonstration phase of research and development. The spin-outs will result in designated FCS systems being integrated into Army modular brigades in order to field mature capabilities as they are ready.

Evidence: GAO Report 05-428T, CRS Report RL32888, and IDA Paper P-3929 each describe the key elements of the program restructuring.

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: The FCS program conducted an Analysis of Alternatives in conjunction with its Milestone B Review in May, 2003 and is currently working on an Analysis of Alternatives in conjunction with its June, 2005, Milestone B Review. In addition, the Army regularly analyzes, manages, and adjusts the Army modular force through the Army Resources and Requirements Board and Army Campaign Plan weekly updates. The Army also analyzes the overall force structure through a biennial process called the Total Army Analysis. In Fiscal Year 2004, the Army conducted a "Mini-TAA" to specifically address force structure changes driven by the Army's transition to a modular force.

Evidence: The May 2003 FCS Analysis of Alternatives measured FCS-equipped Brigade Combat Team capabilities against a number of possible alternatives, including the Army's Legacy Armored Force, Legacy Light Infantry Force, and Stryker Brigade Combat Team Force. The analysis concluded that the increased operational benefits and effectiveness of the FCS-equipped Brigade Combat Team justify the large up-front research and development costs of the program. Alternatives to the current Army plan for Modularity are assessed continually in weekly ACP Updates (Classified), Weekly AR2B (Classified), and the Modular Support Force Analysis (Mini-TAA).

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: All Army units, including units undergoing modular conversions, are required to submit monthly Unit Status Reports. Commanders use the Unit Status Reports to measure overall unit readiness against uniform standards and accurately report the status of unit personnel and equipment levels, overall training proficiency, and equipment operational readiness. The FCS program uses DoD's Earned Value Management system to collect performance information and gain visibility into technical, cost, and schedule planning progress. Earned Value Management has been implemented at the FCS Program's Lead System Integrator, Boeing, and a recent Army Audit Agency audit concluded that the FCS program has effectively implemented earned value management in the early development stages of the program.

Evidence: The Army Audit Agency audit of May 6, 2005 notes significant collaboration between Army and Boeing in collecting performance information from Boeing and its subcontractors, and in using the performance information to manage the FCS program. The Army uses its Monthly Strategic Readiness Updates (Classified) to continuously assess the progress of modular conversions, implement lessons learned from current combat operations, and ensure that the conversions are on cost and schedule.

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: The Army Campaign Plan establishes performance standards and assigns supported commanders and staff principals to accomplish Army Campaign Plan Major Objectives and sub-unit tasks for modular conversions. Assignees are held accountable for performance of tasks in weekly meetings chaired by the Vice Chief of Staff of the Army and the Deputy Chief of Staff for Operations. The FCS Program Manager manages the cost, schedule, and performance of the multiple systems that constitute the FCS program. Standards for cost, schedule, and performance are based on FCS Technical Performance Measures and Key Performance Parameters. The FCS program manager's performance evaluation reflects any failure to exercise control over any of these three primary focus areas. Managers of the FCS program Lead Systems Integrator, Boeing, and contractors supplying equipment for Modularity are held accountable using cost, schedule, and performance data collected using Earned Value Management.

Evidence: The Army Campaign Plan assigns tasks to be completed to effect modular conversions and establishes performance goals for task assignees. Army Campaign Plan weekly updates track the status of these tasks. FCS Key Performance Parameters and Technical Performance Measures establish standards for the FCS Program Manager and the Lead Systems Integrator, Boeing. The Army and Boeing are in the process of negotiating a new contract according to Federal Acquisition Regulations that will include management controls for Boeing. In addition, information obtained through Earned Value Management is used to analyze contractor cost and schedule performance on a weekly and monthly basis.

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

Explanation: Analysis of past, present and planned obligation rates for Modularity and FCS funding shows that funds for both programs are obligated in a timely manner and spent for the programs' intended purposes. However, the Army should develop a system that can track Modularity outlays in more detail.

Evidence: The Army Budget Office has produced a Modularity obligation plan for funds appropriated in the Fiscal Year 2005 supplemental. Since Modularity funds are outlayed from procurement accounts in which no distinction is made between "Modularity" and "Non-Modularity" procurement funds, it is a challenge for the Army to track Modularity outlays at a line-item level of detail. Given the size and scope of the Modularity effort, however, the Army should develop a system that can track Modularity outlays in more detail. In the interim, the Army is manually tracking Modularity obligations in anticipation of its new accounting system, the General Fund Enterprise Business System (GFEBS), which is currently under development. Obligation data for FCS, including semi-annual variance analyses for FCS if obligations are more than 10 percent above or below official obligation plans, indicate that funds are obligated on time and for intended purposes.

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: The Army has processes in place to monitor costs, schedule and performance progress for Modularity and FCS, and the FCS program has established affordability incentive fee arrangements with all of its program partners. Largely due to the aggressive pace and urgency of completing Modular conversions while conducting major combat operations, the Army does not have procedures in place to measure and achieve efficiencies and cost effectiveness for Modularity on a macro scale. However, at the micro level funds for Modularity are requested and appropriated separately by Congress for each piece of equipment. The Army uses a standard defense-wide financial system to manage and control the execution of these funds at the budget line item level in the manner in which the funds are appropriated. The Army expects that large volume equipment purchases for Modularity will create efficiencies in economy of scale for numerous equipment systems that will result in lower per item acquisition cost across the program.

Evidence: The FCS Affordability Initiative and the Earned Value Management system are used to measure efficiencies and cost effectiveness for the FCS program. With its focus currently on building, converting, and fielding Brigade Combat Teams as quickly as possible for deployment to the Middle East, the Army does not currently have systematic procedures in place at the macro level to measure and achieve efficiencies for Modularity. However, at the micro level the Army uses standard acquisition procedures such as competitive sourcing to achieve efficiencies for the Army Modular Force.

Does the program collaborate and coordinate effectively with related programs?

Explanation: The Army coordinates its Modularity efforts with the Marine Corps. The FCS program has several program-level coordination documents supporting joint service collaboration with the Marine Corps and Navy, and is in the process of establishing an agreement with the Air Force. In addition, the FCS program has Memoranda of Agreement with 52 Army programs that are complementary to FCS.

Evidence: Army/Marine Corps. Collaboration on Modularity occurs through the Army-Marine Corps Board, an established body that meets periodically to identify, develop, review, and resolve issues with Army/Marine Corps concepts, capabilities, approved requirements, and programs. The FCS program has several progam-level coordination documents that support joint service collaboration with the Marines and Navy, and are in the process of establishing an agreement with the Air Force.

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 Army does not have audit reports demonstrating that Modularity and FCS 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.

Evidence: None of the reports or audits specifically cite the Modularity or FCS programs for material financial weaknesses, however none of the audits specifically look at that aspect of the programs. Numerous audits document DoD's financial management weaknesses. Because of the magnitude of the problem, DoD is unlikely to obtain an unqualified opinion for some time.

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

Explanation: The Army has taken significant steps to address management and planning deficiencies in Modularity and FCS. The Army Campaign Plan, which is the blueprint for modular force conversions, was developed to correct deficiencies in the 2003 Army Transformation Campaign Plan. The Army addressed some of the technology and cost risk in the FCS program in its July, 2004 restructuring of the FCS program into 4 spin-outs. This restructuring pushed the program timeline back by 4 years to allow mature technologies to be integrated into current forces sooner, and to avoid moving ahead too quickly with technologies that still needed more time to develop. The Army also addressed criticisms of FCS program management by deciding in April, 2005 to convert the FCS program from an "Other Transaction Authority" contracting arrangement with Boeing to a conventional federal procurement arrangement.

Evidence: The Army Campaign Plan, The Army Modular Force and Future Combat Systems Strategy Report to the Deputy Secretary of Defense, and FCS program documents outlining the July 2004 restructuring and the decision to switch to a FAR-based contract each provide strong evidence that the Army has taken meaningful steps to address management deficiencies in Modularity and FCS.

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

Explanation: The Modularity and FCS programs both maintain clearly defined deliverables and capability/performance characteristics. However, the FCS program's increasing costs, considerable technical challenges, and extended schedule for delivery of fully-equipped FCS Units of Action are reason for concern that the Army will not be able to execute FCS as planned. Morever, although recent cost increases in Modularity and FCS reflect the addition of critical capabilities and improvements based on lessons learned in current combat operations, the Army could be challenged to control costs for both programs in years ahead.

Evidence: The Army Campaign Plan and FCS program documents lay out in detail the deliverables and performance characteristics of both Modularity and FCS. Modularity and FCS cost and schedule data from the Army and independent evaluations document the cost, schedule, and technical challenges facing the Army in executing FCS over the Army's Extended Planning Period.

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

Explanation: The Army has made significant progress toward its goal of achieving a modular force by the end of Fiscal Year 2011 and beginning to spin FCS systems into the modular force beginning in Fiscal Year 2008. The Army has produced a comprehensive design and sequence for building and converting its brigades to a modular design, has met its goals for implementing that design in Fiscal Year 2004 and is on target to meet its goals in Fiscal Year 2005. Likewise, the FCS program has passed several key decision points on the way to its first spin-out of systems into the current force in Fiscal Year 2008. However, there is still concern about the level of technology maturation and remaining unsettled requirements within the FCS Family of Systems, and whether the FCS program passed certain acquisition milestones before it was prudent to do so.

Evidence: In Fiscal Years 2004 and 2005 to date, the Army has built 5 new modular Brigade Combat Teams, converted 16 modular Brigade Combat Teams, and built 16 support brigades while engaging in combat operations in support of the Global War on Terror. The FCS program has entered into the Systems Development and Demonstration phase of the Defense Acquisition System Life Cycle and has re-baselined the program to meet its goal of 4 spin-outs in Fiscal Years 2008, 2010, 2012, and 2014. A System of Systems Functional Review in August 2005, will assess Technical Performance Measure data and analysis and set requirements for FCS subsystems. GAO evaluations provide evidence of the program being at high risk for significant cost growth and at a current level of technology maturation that is not suitable for a full-scale acquisition program. These concerns preclude a "yes" answer to this question.

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

Explanation: The Army is on schedule to achieve its goal of building 6 new modular Brigade Combat Teams and converting 19 modular Brigade Combat Teams by the end of Fiscal Year 2005. It has successfully completed several major acquisition lifecycle milestones in the FCS program and is a on schedule to undertake the FCS System of Systems Functional Review in August, 2005. This review will allocate requirements to lower level systems, assess whether risks associated with system design are at acceptable levels for engineering development, and provide more detailed definitions for the 4 spin-outs beginning in Fiscal Year 2008. However, there is also significant concern, both in independent evaluations and in Congress, that the FCS program is progressing through the acquisition cycle faster than the level of technological maturity of many of its systems warrants, thereby increasing the risk of cost overruns and failure to achieve performance goals later in the acquisition process.

Evidence: Through June, 2005, the Army has completed 5 of the 6 newly-built Brigade Combat Teams and 16 of the 19 Brigade Combat Team conversions it has scheduled through the end of Fiscal Year 2005. To date, the FCS program has received Defense Acquisition Board approval as a Major Defense Acquisition Program, entered into the System Development and Demonstration phase of the acquisition cycle, and successfully passed its "System of Systems Functional Review" in August 2005. The Government Accountability Office has expressed concern, however, that FCS entered Systems Development and Demonstration before many of its systems were technologically mature enough to do so.

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

Explanation: The Army faces a significant challenge in procuring and distributing the resources necessary to build and convert Brigade Combat Teams in a short timeframe while conducting major overseas combat operations. Given these realities and the current pace of Modularity, efficiency has not been a top priority in the Modularity effort to date. The Army hopes, however, that large equipment purchases over time will reduce per unit equipment costs, and that the creation of shared equipment sets for units in training will increase cost effectiveness in the Modular Army. Although the FCS program has met its annual cost goals and has controls in place to monitor the cost effectiveness achieved by Boeing, increase in FCS lifecycle cost estimates due mainly to increased program content and capabilities raise concerns about the program's ability to control costs and achieve efficiency over the life of the program.

Evidence: There is currently no evidence of increased efficiency and cost effectiveness in Modularity at the macro level. Recent and updated FCS cost estimates and a description of the FCS Affordability Initiative and Earned Value Management were provided by the Army.

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

Explanation: The Army and Marine Corps share the goal of providing land forces to fight and win the nation's wars. Both are currently purchasing and recapitalizing equipment to restructure their forces while engaged in a war. However, while the Army and Marine Corps share common goals and are undertaking somewhat similar restructurings, each possesses specific purposes and capabilities. In this regard, the Army's plan to organize and equip itself via Modularity and FCS is an unprecedented task in its size and scope. The Army's performance to date in planning and implementing the building and converting of modular brigades has been effective, and is on target to meet its annual and long-term performance goals.

Evidence: The Army Baseline Force Structure Chart outlines the schedule for Modularity. To date, the Army is on schedule and effectively executing its modular conversions.

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

Explanation: Independent evaluations of the FCS program have acknowledged the unprecedented challenge of FCS and the progress the program has made thus far in moving toward its goals. However, independent evaluations have also expressed serious concern about the program's ability to achieve it's long-term goals within cost and its ambitious schedule. The program is viewed in certain evaluations to possess similar characteristics to other major acquisition programs that have experienced sharp cost increases over time. The results of independent evaluations of Modularity are less conclusive, as several independent evaluations remain ongoing or state that it is too early to determine what the results of the Modular Force will be. Preliminary observations from one major ongoing study note that "While the Army has made progress in establishing modular brigades, it is likely to face several challenges in providing its new modular units with some required skilled personnel and equipment that are needed to achieve planned capabilities".

Evidence: Government Accountability Office Report 05-428T, "Defense Acquisitions: Future Combat Systems Challenges and Prospects for Success", and Government Accountability Office, "Preliminary Observations to Implement and Fund Modular Forces", a testimony before the Subcommittee on Tactical Air and Land Forces, House Committee on Armed Services; Congressional Research Service Report RL32476, "U.S. Army's Modular Redesign: Issues for Congress".

Were program goals achieved within budgeted costs and established schedules?

Explanation: Thus far, Modularity has achieved its program goals within budgeted costs and established schedules, although risk for cost growth remains high. The FCS program restructuring increased the program's chances of achieving its goals on schedule by pushing its schedule back by four years and fielding more mature technologies in the initial spin-out in Fiscal Year 2008. Although the Army has yet to experience major cost overruns in FCS or its modular conversion, there is great cause for concern in this respect moving forward. Growing cost estimates, immature technologies, and unfirm requirements pose a significant challenge for the FCS program in meeting its revised, extended schedule.

Evidence: Army Budget Office obligation data for Modularity and FCS, Army data on modular conversions to date, The Army Force Structure Baseline Chart, and the FCS program schedule/related documents all indicate that thus far, Modularity and FCS have progressed, for the most part, on cost and schedule. This answer is precluded from being a "yes" only because of concern that the FCS program may have trouble staying on schedule in the future as a result of its passing certain acquisition milestones to date before many of its technologies were mature.