DOD is now implementing a new acquisition management policy tailored  to its space systems. It expects to finalize the policy this fiscal year. Gap between Resources and Requirements Has Undermined Space Acquisitions

The majority of satellite programs we have reviewed over the past  2 decades experienced problems during acquisition that drove up costs  and schedules and increased technical risks. This initial decision sets the stage for the eventual  outcome—desirable or problematic. At times, even more requirements were added  after the program began. In particular, tools being  adopted, such as technology readiness assessments, alternatives analyses,  and independent cost estimates, may help provide more consistent and  robust information on technologies, requirements, and costs. Without  knowing that technologies can work as intended, for example, programs  cannot reliably estimate costs and schedules. IPA teams are to be drawn  from experts who are not directly affiliated with the program. New Space Policy Does Not Call for a Match between Resources and Requirements at Program Start

DOD’s new acquisition management policy for space systems does not  alter DOD’s practice of committing major investments before knowing  what resources will be required to deliver promised capability. Instead, the  policy allows programs to continue to mature technologies while they  are designing the system and undertaking other product development  activities. By contrast, allowing technology development to carry over into  product development increases the risk that significant problems will be  discovered late in development. Further, the consequences of problems experienced during  development will be much greater for space programs since the design  review occurs at the same time as the commitment to build and deliver the  first product to a customer. Launching demonstrators is costly  and time consuming. However, DOD has found ways  to test sensors and other critical technologies on experimental satellites  and it has built and launched technology demonstrator satellites. We compared the new space policy  to DOD’s new acquisition policy for other weapon systems as well as our  past reviews of the best practices of commercial and military acquisitions.
Why GAO Did This Study

The Department of Defense is spending nearly $18 billion annually to develop, acquire, and operate satellites and other space-related systems. The majority of satellite programs that GAO has reviewed over the past 2 decades experienced increased costs and delayed schedules. DOD has recently implemented a new acquisition management policy, which sets the stage for decision making on individual space programs. GAO was asked to assess the new policy.

What GAO Found

DOD's new space acquisition policy may help provide more consistent and robust information on technologies, requirements, and costs. For example, the policy employs a new independent cost estimating process, independent program reviews performed by space experts not connected with the program, and more rigorous analyses of alternatives, requirements, and system interdependencies. This information may help decision-makers assess whether gaps exist between expectations and what the program can deliver. However, the benefits that can be derived from these tools will be limited since the new policy does not alter DOD's practice of committing major investments before knowing what resources will be required to deliver promised capability. Instead, the policy encourages development of leading edge technology within product development, that is, at the same time the program manager is designing the system and undertaking other product development activities. As our work has repeatedly shown, such concurrency increases the risk that significant problems will be discovered as the system is integrated and built, when it is more costly and time-consuming to fix them. Moreover, when even one technology does not mature as expected, the entire program can be thrown off course since time and cost for invention cannot be reliably estimated. DOD's new acquisition policy for its other weapon systems recognizes these risks and consequently requires technology and product development to be done separately.