MDA’s March 2006 Report Includes Some Useful Information but Has Several Limitations

MDA’s March 2006 report to Congress included some useful technical and  operational information on boost and ascent phase capabilities. However,  the information in the report has several limitations—such as not  including stakeholders in the analysis or explaining how assumptions  affect results. Further, the report discussed geographic areas where  boost and ascent phase elements could intercept missiles shortly after  launch based on desired technical capabilities. MDA’s Analyses Have Limitations but DOD Can Improve Information to Support Future Decisions

The information in the March 2006 report has several limitations because  the analyses did not involve stakeholders and did not clearly explain  modeling assumptions and their effects on results as identified by relevant  research standards. Developing such information with the services, Joint  Staff, and combatant commands could provide a much more complete  explanation of operational issues and challenges. However, stakeholders such as  the services, Joint Staff, or combatant commands could have assisted  MDA in assessing potential quantities required for various deployment  periods. We compared the report’s cost estimates with various DOD and GAO  sources that describe key principles for developing accurate and reliable  life-cycle cost estimates. Based on our analysis, we found that MDA did  not include all cost categories, calculate costs based on warfighter  quantities, and did not conduct a sensitivity analysis to assess the effects  of cost drivers. Additionally, MDA’s cost estimates did not include costs to  establish and sustain operations at forward overseas locations, even  though the report states that the elements will have to be located in close  proximity to their targets, and the operational concepts for Kinetic Energy  Interceptor and Airborne Laser, although in early development, state that  these elements will be operated from forward locations. However, MDA did  not take these steps to assess the confidence of the estimates reported in  March 2006. MDA officials stated that,  in developing the cost estimates for the March 2006 report, they decided  not to follow some of the key principles for developing life-cycle cost  estimates such as time phasing and independent verification of the cost  estimates in order to complete the report in a timely manner. Recommendations for Executive Action

To provide decision makers with information that enables them to clearly  understand the technical progress and operational implications of each  boost and ascent phase element and make fully informed, fact-based,  program decisions at future key decision points, we recommend that the  Secretary of Defense direct the Under Secretary of Defense for  Acquisition, Technology, and Logistics to take the following actions to  support key decision points for the BMDS boost and ascent phase  elements:  Include all DOD stakeholders (including services, combatant  commands, Joint Staff) in developing and analyzing operational issues  regarding what is needed to support operations at U.S. bases and  potential forward locations, including basing assessments, force  structure and quantity requirements, infrastructure, security/force  protection, maintenance, and personnel. To provide decision makers with complete and reliable data on the costs  of each boost/ascent phase BMDS element to enhance investment and  budget decisions, we recommend that the Secretary of Defense take the  following actions:    Direct the Under Secretary of Defense for Acquisition, Technology, and  Logistics to require MDA to prepare and—to support key decision  points—periodically update a full life-cycle cost estimate for each  boost/ascent phase element, in accordance with key principles for  developing accurate and reliable life-cycle cost estimates, that includes  all operational costs, including costs to establish and sustain  operations at U.S. bases and forward locations, and that is based on  warfighter quantities, includes sensitivity analyses, and reflects time  phasing.
Why GAO Did This Study

The Department of Defense (DOD) has spent about $107 billion since the mid-1980s to develop a capability to destroy incoming ballistic missiles. DOD has set key decision points for deciding whether to further invest in capabilities to destroy missiles during the initial phases after launch. In March 2006, DOD issued a report on these capabilities in response to two mandates. To satisfy a direction from the House Appropriations Committee, GAO agreed to review the report. To assist Congress in evaluating DOD's report and preparing for future decisions, GAO studied the extent to which DOD (1) analyzed technical and operational issues and (2) presented complete cost information. To do so, GAO assessed the report's methodology, explanation of assumptions and their effects on results, and whether DOD followed key principles for developing life-cycle costs.

What GAO Found

The report DOD's Missile Defense Agency (MDA) submitted to Congress in March 2006 included some useful technical and operational information on boost and ascent phase capabilities by describing these elements, listing upcoming decision points, and discussing geographic areas where boost and ascent elements could intercept missiles shortly after launch. However, the information in the report has several limitations because the analysis did not involve key DOD stakeholders such as the services and combatant commands in preparing the report and did not clearly explain modeling assumptions and their effects on results as required by relevant research standards. MDA's report states that, at this time, some data is limited, and operational concepts that discuss operations from forward locations have not been fully vetted with the services and combatant commands. However, the report did not explain how each element's performance may change if developing technologies do not perform as expected. Also, it did not address the challenges in establishing bases at the locations cited or provide information on the quantity of each element required for various deployment periods. Moving forward, DOD has an opportunity to involve stakeholders in analyzing operational and technical issues so that senior DOD and congressional leaders will have more complete information on which to base upcoming program decisions following key tests in 2008 and 2009 for the Kinetic Energy Interceptor and Airborne Laser boost and ascent phase programs. MDA's report provided some cost estimates for developing and fielding boost and ascent phase capabilities, but these estimates have several limitations and will require refinement before they can serve as a basis for DOD and congressional decision makers to compare life-cycle costs for the elements. MDA's report states that there is uncertainty in estimating life-cycle costs because the elements are early in development. However, based on a comparison of the estimates in the report with key principles for developing life-cycle cost estimates, GAO found that MDA's estimates did not include all cost categories, including costs to establish and sustain operations at U.S. bases and at forward overseas operating locations. Also, MDA's estimates did not calculate costs based on realistic quantities of each element the combatant commanders or services would need to conduct the mission. Finally, MDA did not conduct a sensitivity analysis to assess the effect of key cost drivers on total costs. MDA officials stated that further analysis of the costs for each element along with measures to assess their confidence would help to better inform DOD and congressional decision makers in making investment decisions following key tests in 2008 and 2009.