Description of BMDS Elements

The BMDS is comprised of several systems, which MDA calls elements  or programs. MDA Conducted Several Key Tests and Continued to Deliver Assets, but Did Not Achieve All Planned Goals for Fiscal Year 2014

MDA made progress, but did not achieve all of its planned test and asset  delivery goals for fiscal year 2014, and has not fully met its test goals  since first reporting baselines in its 2010 BAR. However, despite testing delays, shortfalls,  and failures, MDA has continued to deliver assets. MDA conducted two intercept and three non-intercept flight tests in fiscal  year 2014 that demonstrated an increased capability for the Aegis BMD  and the GMD programs. However, some of these assets were delivered without completing  planned testing, which increases risks for an individual system and the  BMDS as a whole. Even with the risk reduction  efforts, the agency’s acquisition outcomes may be on a similar trajectory  to that of prior years because it missed some risk reduction opportunities  in fiscal year 2014. However, opportunities remain for MDA to reduce  risk in these future planned efforts, which would help the agency achieve  its acquisition goals. Aegis BMD: Opportunity Exists to Insert an Additional Flight Test to Assess Redesigned Component for the SM-3 Block IB Prior to a Multiyear Procurement Decision

Aegis BMD is currently redesigning a key component of its SM-3 Block IB  interceptor to address prior test failures, but has no plans to flight test it  before incorporating it into the interceptor. MDA Provides Limited Insight Into the Overall BMDS Integrated Capability Goals

The NDAA for fiscal year 2012 requires MDA to report capability delivery  goals and progress at the element level, which enables Congress to track  acquisition plans and progress of individual BMDS elements, including  those at high risk of cost and schedule growth. However, this law does  not require MDA to externally report key aspects of integrating two or  more elements and delivering integrated BMDS capabilities, which allow  the BMDS to achieve performance levels not realized by individual  elements working independently. Table 5 below illustrates how reporting on MDA's progress in achieving  capabilities that hinge on integration is fairly limited, particularly when  compared to our analysis of MDA’s systems engineering documents. 1. To ensure that future efforts are aligned with a sound acquisition  approach, which includes robust systems engineering and testing, we  recommend that the Secretary of Defense direct the following two  actions:  a)  For Aegis BMD SM-3, DOD conduct a flight test to increase  confidence that the redesigned SM-3 Block IB third-stage rocket  motor component works as intended prior to inserting it into the  SM-3 Block IB production line. To ensure MDA makes sound investment decisions on improving  homeland ballistic missile defense, the Secretary of Defense should  direct MDA to make the department’s analysis of alternatives an  integral part of its planning effort and delay any decisions to begin  development of the new GMD Redesigned Kill Vehicle until:   a)  the department’s analysis of alternatives is completed and  identifies the best solution to pursue; and  b)  Congressional and DOD decision makers have been provided the  results of that analysis. In responding to a draft of this report, DOD partially concurred with our  first two recommendations regarding Aegis SM-3 Block IB and GMD and  concurred with our third recommendation to report to Congress its annual  progress towards planned integrated BMDS-level capabilities. As we found in this report, such an approach has proven  very costly for MDA. MDA uses baselines  to monitor the progress of its programs and report them to Congress  annually in the BMDS Accountability Report. MDA is also preparing to award a  production contract in fiscal year 2015. Once the redesigned interceptor’s performance has been  demonstrated through flight tests the program office may also better  understand the costs needed to incorporate those changes into the  ongoing production, in addition to if any other design changes are  necessary. Consequently, the production strategy is at risk for cost  growth and schedule delays. Appendix V: Aegis Ballistic Missile Defense Standard Missile-3 (SM-3) Block IIA

The program completed its system-level review of the interceptor’s design and is  transitioning to product development to further refine and mature the design and  manufacturing processes. It also processes ballistic missile  tracks, and reports these tracks to Ballistic Missile Defense System  (BMDS) shooters, such as Ground-based Midcourse Defense (GMD),  Aegis BMD, Terminal High-Altitude Area Defense (THAAD), and Patriot,  which then use their own command and control, and mission planning  tools for stand-alone engagements. The Missile Defense Agency (MDA) is developing and delivering  capability upgrades before the next version is available in 2017. 2. The Targets program has flown targets in non-intercept tests that can reduce risks, but it continues to use new targets in more expensive and higher risk intercept tests

The Targets program successfully flew a new medium-range target during  a non-intercept flight test in October 2014 that may enable the program to  reduce risks associated with this target prior to its use in an intercept flight  test in fiscal year 2015.
Why GAO Did This Study

Since 2002, MDA has spent approximately $105 billion, and it plans to spend about $38 billion more by 2019, to defend against enemy ballistic missiles. MDA is developing a BMDS comprised of a command and control system, sensors that identify incoming threats, and intercepting missiles. For over a decade, GAO has reported on MDA's progress and challenges in developing and fielding the BMDS. GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through its acquisition baselines, and to report on other acquisition issues as appropriate. This, GAO's 12th annual report, examines progress and challenges in fiscal year 2014 associated with MDA's: (1) individual element testing and asset delivery goals, (2) efforts to reduce acquisition risks, and (3) reporting on the BMDS integrated capability. GAO examined MDA's acquisition reports and assessed them against GAO's acquisition best practices, analyzed baselines reported to discern progress, and interviewed DOD and MDA contractor officials.

What GAO Found

In fiscal year 2014, the Missile Defense Agency (MDA) made some progress in achieving its testing and delivery goals for individual elements of the Ballistic Missile Defense System (BMDS), but was not able to complete its planned fiscal year goals for testing. MDA conducted two intercept tests demonstrating an increased capability. However, it did not complete six planned flight tests for a variety of reasons, including test delays and retests to address previous failures, which limit the knowledge gained in fiscal year 2014. Additionally, several BMDS elements delivered assets in fiscal year 2014 without completing planned testing, which increases cost and schedule risks for an individual system and the BMDS as a whole. In one instance, the Terminal High Altitude Area Defense element delivered assets although its capability has not been demonstrated through flight testing.
Potential also exists to reduce acquisition risks for several MDA efforts that are pursuing high-risk approaches that do not adhere to an approach which encourages accumulating more knowledge before program commitments are made and conducting testing before production is initiated. Specifically:
Aegis Ballistic Missile Defense (BMD)—MDA demonstrated that it had matured the Aegis Standard Missile-3 (SM-3) Block IIA interceptor's design prior to starting production, a best practice. However, Aegis BMD is still addressing issues in the Aegis SM-3 Block IB interceptor revealed through prior test failures and is planning to award a multiyear procurement contract prior to flight testing the final design. If design changes are later needed, the cost, schedule, and performance impact could be significant.
Ground-based Midcourse Defense (GMD) system—MDA reduced risk by adding a non-intercept flight test in fiscal year 2015 which allows the program to collect valuable data on redesigned components. However, GMD increased risk to the warfighter by prioritizing new interceptor production over fixing previously deployed interceptors and resolving known issues. In addition, MDA has decided to redesign the GMD kill vehicle prior to determining whether the effort is the most cost-effective solution.
Unless MDA aligns its future efforts for Aegis and GMD with acquisition best practices, the agency's acquisition outcomes may be on a similar trajectory to that of prior years, incurring both cost growth and schedule delays.
MDA is working to increase the extent to which the various elements of the BMDS are capable of working as one integrated system, but the agency reports limited information to Congress regarding its integration goals and its progress against these goals. Integration of the BMDS is important because it improves the system performance beyond the abilities of individual elements. Although MDA is not required to provide this information in its reports and briefings to Congress, congressional decision makers have limited insight into the planned BMD system-level capabilities, the supporting element-level upgrades, and how element-level efforts are synchronized to ensure timely delivery.

What GAO Recommends

GAO recommends that, in order to reduce acquisition risk, MDA align future efforts for Aegis BMD and GMD with GAO's knowledge-based acquisition practices. GAO also recommends that the Secretary of Defense direct MDA to report annually to Congress and DOD on the progress it has made in achieving an integrated capability. DOD concurred or partially concurred with all of our recommendations. GAO continues to believe the recommendations are valid as discussed in this report.