Significant Adjustments Made to Missile Defense in Fiscal Year 2009

The new administration proposed significant changes to the BMDS  program in 2009 including program terminations and changes to some of  the BMDS elements we reported on in the past, as well as changes to plans  for missile defense in Europe. This rebalancing included shifting  technology development efforts from boost-phase intercept technologies  to early intercept technologies (or ascent phase). Progress Made in Fiscal Year 2009

In fiscal year 2009, MDA achieved several noteworthy accomplishments. For example, MDA revised its testing approach to better align tests with  modeling and simulation needs and is undertaking a new targets  development effort to resolve long-standing problems supplying sufficient  and reliable targets. The agency also demonstrated increased levels of  performance for some of its BMDS elements through flight and ground  testing. MDA testing achievements during the year indicate an increased  level of interoperability among multiple elements, improving both system- level performance and advancing the validation of BMDS models and  simulations needed to predict performance. In addition, the agency  delivered most of the assets as planned by the end of fiscal year 2009. MDA  delivered 34 of these assets or 83 percent. Significant Challenges Remain in Developing the BMDS

While there was progress in addressing concerns about test planning and  target development as well as in delivering assets, all BMDS elements  experienced delays in conducting tests, were unable to accomplish all  planned objectives, and experienced performance challenges. Poor target  performance continued to be a problem causing several test delays and  leaving several test objectives unfulfilled. The test problems also  precluded the agency from gathering key knowledge through tests  specified by the MDA Director that were originally planned to be  completed in fiscal year 2008. MDA’s efforts to develop advanced  algorithms and its efforts to demonstrate homeland defense were also  affected by target issues. These shortfalls in testing continued to delay  validation of the models and simulations used to assess the overall  performance of the BMDS. Consequently, comprehensive assessments of  the capabilities and limitations of the BMDS are still not possible. MDA  also redefined its schedule baseline, eliminating goals for delivering  integrated capabilities so we were not able to assess MDA’s progress in  this key area. Since our first MDA report in 2004, we have repeatedly found that MDA’s  approach for building its cost, schedule, and performance goals hindered  transparency and limited accountability of the BMDS development effort. Since  2004, we have also made recommendations to develop baselines and  report variances to those baselines to promote a higher level of  transparency and accountability for the agency; to adjust its block strategy  to ensure that it was knowledge-based and aligned with agency goals; and  to strengthen oversight by, for example, having the Missile Defense  Executive Board (MDEB) consider the extent to which MDA could adapt  and adopt aspects of DOD’s standard acquisition policies to enhance  oversight. For example, in 2007, the House Appropriations Committee directed  MDA to “develop a system-wide plan to report according to the spirit of  existing acquisition laws to improve accountability and transparency of its  program.” More recently, in the National Defense Authorization Act for  Fiscal Year 2008, Congress required MDA to establish acquisition cost,  schedule, and performance baselines for each system element that has  entered the equivalent of the systems development and demonstration  phase of acquisition or is being produced or acquired for operational  fielding. MDA is not yet fully compliant with this requirement. New MDA Initiatives Provide Opportunity to Increase Transparency and Accountability

Although key controls and mechanisms needed to establish a sound  acquisition process for MDA are still lacking, MDA has initiatives  underway that could improve the transparency, accountability, and  oversight of the acquisition of the BMDS. These initial steps are promising, but it will take time to fully implement  them and once implemented they will need to be sustained and the tools  consistently used in order to establish accountability.
Why GAO Did This Study

By law, GAO is directed to assess the annual progress the Missile Defense Agency (MDA) made in developing and fielding the Ballistic Missile Defense System (BMDS). GAO also assessed MDA's progress toward improving accountability and transparency in agency operations, management processes, and its acquisition strategy. To accomplish this, GAO reviewed asset fielding schedules, test plans and reports, as well as pertinent sections of Department of Defense (DOD) policy to compare MDA's current level of accountability with that of other DOD programs. GAO's fiscal year 2009 assessment of MDA's cost, schedule, and performance progress is more limited than previous assessments because MDA removed key components of schedule and performance goals from its annual report of goals. In addition, though it had committed to, MDA did not report total cost estimates in 2009.

What GAO Found

Fiscal year 2009 was an unprecedented year of transition for MDA as it experienced its first change of administration, its third MDA Director, shifts in plans for missile defense in Europe as well as a shift in focus for technology development from intercepting missiles during the boost phase to the early intercept phase. Such changes present new challenges for MDA but also opportunities to strengthen acquisition approaches. (1) Progress: MDA achieved several accomplishments. For example, MDA revised its testing approach to better align tests with modeling and simulation needs and undertook a new targets development effort to resolve longstanding problems supplying sufficient and reliable targets. The agency also demonstrated increased levels of performance for some elements through flight and ground testing. Fiscal year 2009 testing indicates an increased level of interoperability among multiple elements, improving both system-level performance and advancing the BMDS models and simulations needed to predict performance. In addition, the agency delivered 83 percent of the assets it planned to deliver by the end of fiscal year 2009. (2) Challenges: While there was progress, all BMDS elements had delays in conducting tests, were unable to accomplish all planned objectives, and experienced performance challenges. Poor target performance continued to be a problem, causing several test delays and leaving several test objectives unfulfilled. The test problems also precluded MDA from gathering key knowledge and affected development of advanced algorithms and homeland defense. These test problems continued to affect the models and simulations used to assess the overall performance of the BMDS. Consequently, comprehensive assessments of its capabilities and limitations are still not possible. MDA also redefined its schedule baseline, eliminating goals for delivering integrated capabilities so we were not able to assess progress in this area. Despite these problems, MDA proceeded with production and fielding of assets. (3) Transparency, Accountability, and Oversight: In 2009, the significant adjustments MDA made to its acquisition approach--terminating the block structure; reducing, eliminating, or not reporting key baselines; and terminating its capability declaration process--and adjustments to the material reported to Congress reduced the transparency and accountability MDA had begun to build. However, MDA is beginning to implement several initiatives--including the adoption of key principles of DOD acquisition regulations--that could improve transparency and accountability and lay the foundation needed for oversight. If these initiatives are implemented in accordance with knowledge-based acquisition principles, an opportunity exits to improve the BMDS acquisition by ensuring MDA programs begin with realistic, transparent plans and baselines. While these initial steps hold promise, they will take time to fully implement and once implemented they will need to be sustained over time and consistently applied.