	Background

Over the last decade, DOD has been managing many challenging space  systems acquisitions. DOD has generally concurred with our  recommendations, and has undertaken a number of actions to establish a  better foundation for acquisition success. The Current Status and Cost of Space Systems Acquisitions

Most of DOD’s major satellite programs are in mature phases of  acquisition, and some of the significant problems of past years, such as  cost and schedule growth, are not currently as prevalent. While many programs have overcome past problems, some of the major  space programs have encountered significant challenges in the last year  and some delays in development and production. For example:
The Air Force’s Space Fence program office is developing a large  ground-based radar that is expected to improve on the performance of  and replace the Air Force Space Surveillance System, which became  operational in 1961 and was recently shut down. In April 2013, DOD proposed canceling the Missile Defense Agency’s  Precision Tracking Space System (PTSS) because of concerns with  the program’s high-risk acquisition strategy and long-term  affordability. PTSS was intended to be a satellite system equipped  with infrared sensors that would track ballistic missiles through their  emitted heat. Recent Actions DOD Believes Will Improve Space System Acquisition Processes, and Continuing Barriers to Program Oversight and Management

We have reported in the past that DOD and Congress are taking steps to  reform and improve the defense acquisition system, and in the past year  additional actions have been taken towards these goals. With this  update, DOD hoped to create an acquisition policy environment that will  achieve greater efficiency and productivity in defense spending. GAO has not assessed the potential effects of this change. A second change made this year, according to Air Force officials, is the  requirement that DOD programs, including space programs, undergo  independent development testing. In addition, DOD is adopting new practices to reduce fragmentation of its  satellite ground control systems, which adds oversight to a major  development decision. We have reported in the past that  fragmented leadership and lack of a single authority in overseeing the  acquisition of space programs have created challenges for optimally   Past studies  acquiring, developing, and deploying new space systems.and reviews have found that responsibilities for acquiring space systems  are diffused across various DOD organizations, even though many of the  larger programs, such as the Global Positioning System and those to  acquire imagery and environmental satellites, are integral to the execution  of multiple agencies’ missions. A program management challenge that GAO has identified, which stems  from a lack of oversight, is that DOD has not optimally aligned the  development of its satellites with associated components, including  ground control system and user terminal acquisitions. Synchronization of space system  components will be an important issue for DOD in considering  disaggregating space architectures, as the potential for larger numbers  and novel configurations of satellites and ground systems will likely  require the components to be synchronized to allow them to work  together in the most effective way possible. As mentioned earlier, DOD is  taking steps in response to improvements mandated by the Congress. For example, budget authority for user  terminals, ground systems, and satellites is spread throughout the military  services, and no one is in charge of synchronizing all of the system  components, making it difficult to optimally line up programs’ deliveries. DOD Is Considering and Adopting Significant Changes to Space Systems Acquisitions

Fiscal pressures, past development problems, and concerns about the  resiliency of satellites have spurred DOD to consider significant changes  in the way it acquires and launches national security satellites. For example, a single launch failure, on-orbit anomaly, or  adversary attack on a large multi-mission satellite could result in the loss  of billions of dollars of investment and a significant loss of capability. To build consensus in the department, and to conduct a more rigorous  analysis of options, DOD is currently in the process of conducting  additional studies that will consider future architectures. Recent and Upcoming Changes to the Evolved Expendable Launch Vehicle Program

DOD has made some changes to the way it buys launch services from its  sole-source provider, and plans to allow other companies to compete with  that provider for launch services in the near future. With the recent development  of new domestic launch vehicles that can meet at least some EELV  mission requirements, DOD plans to make available for competition up to  14 launches in fiscal years 2015-2017. Based on our discussions with DOD officials, they plan to use a best  value approach for this competition, in which price is not the only  consideration. Related GAO Products

Introducing Competition into National Security Space Launch  Acquisitions. Evolved Expendable Launch Vehicle: DOD Needs to Ensure New  Acquisition Strategy Is Based on Sufficient Information. GAO-11-21. Space Acquisitions: DOD Needs to Take More Action to Address  Unrealistic Initial Cost Estimates of Space Systems.
Why GAO Did This Study

Each year, DOD spends billions of dollars to acquire space-based capabilities that support military and other government operations. The majority of DOD's space programs were beset by significant cost and schedule growth problems during their development. Most programs are now in production, however, and acquisition problems are not as widespread and significant as they were several years ago. In prior years, GAO has identified a number of actions DOD is taking to improve management and oversight of space program acquisitions. Facing constrained budgets and concerns about the resiliency of its satellites, DOD is considering potential changes to how it acquires space systems.
This testimony focuses on (1) the current status and cost of major DOD space systems acquisitions, (2) recent actions taken to further improve space systems acquisitions, and (3) potential impacts of the direction DOD is taking on upcoming changes to the acquisition of DOD space systems. This testimony is based on previously issued GAO products, ongoing GAO work on disaggregated architectures, interviews with DOD officials, and an analysis of DOD funding estimates from fiscal years 2013 through 2018.

What GAO Found

Most of the Department of Defense's (DOD) major satellite acquisition programs are in later stages of acquisition, with the initial satellites having been designed, produced, and launched into orbit while additional satellites of the same design are being produced. A few other major space programs, however, have recently experienced setbacks. For example: the Missile Defense Agency's Precision Tracking Space System, which was intended to be a satellite system to track ballistic missiles, has been cancelled due to technical, programmatic and affordability concerns; the Air Force's Space Fence program, which is developing a ground-based radar to track Earth-orbiting objects, continues to experience delays in entering development; and the first launch of the new Global Positioning System satellites has been delayed by 21 months.
Congress and DOD continue to take steps they believe will improve oversight and management of space systems acquisitions. In the past year, for example, DOD has updated its major acquisition policy with the goal of improving efficiency and productivity in defense spending. Among other things, the policy change adds a requirement for independent development testing for DOD acquisition programs, which officials believe will provide an independent voice on programs' development. However, DOD still faces significant oversight and management challenges, including (1) leadership of a space community that is comprised of a wide variety of users and stakeholders with diverse interests and (2) alignment of the delivery of satellites with corresponding ground systems and user terminals. For instance, in some cases, gaps in delivery can add up to years, meaning that a satellite is launched but not effectively used for years until ground systems become available. One reason DOD has been unable to align the delivery of space system components is because budgeting authority for the components is spread across the military services.
While most DOD major space system acquisitions have overcome development challenges and are currently being produced and launched, past problems involving large, complicated systems, coupled with the recent fiscal climate of reduced funds, has led DOD to consider efforts that could signal significant changes to the way it acquires and conducts space activities. DOD is considering moving away from its current approach in satellite development—building small numbers of large satellites over a decade or more that meet the needs of many missions and users—toward a more disaggregated architecture involving less complex, smaller, and more numerous satellites. GAO has found that DOD does not yet have sufficient information to make decisions on whether to disaggregate, but it is in the process of gathering that information. In addition, in response to predictions of dramatic increases to the price of launching its satellites, coupled with restrained budgets, DOD has made changes to the way it procures launch vehicles, and is moving forward with plans to allow competition for launch services—a significant shift from past ways of doing business. According to the Air Force, other recent steps in launch acquisitions, including gaining significant insight into launch services cost drivers, have enabled it to achieve significant savings.

What GAO Recommends

GAO is not making recommendations in this testimony. However, in previous reports, GAO has generally recommended that DOD adopt best practices for developing space systems. DOD has agreed and is in the process of implementing such practices.