Over the past 5 years, our work has recommended numerous actions that  can be taken to address the problems we identified. The Current Status and Cost of Space Systems Acquisitions

Most of DOD’s major satellite programs are in mature phases of  acquisition and cost and schedule growth is not as widespread as it was  in prior years. However, the satellites, ground systems, and user  terminals are not optimally aligned and the cost of launching satellites  continues to be expensive. Most of DOD’s major satellite programs are in mature phases of  acquisition, that is, the initial satellites have been designed, fabricated  and launched into orbit while additional satellites of the same design are  being produced. For the  portfolio of major satellite programs, new cost and schedule growth is not  as widespread as it was in prior years, but DOD is still experiencing  problems in these programs. Also,  the work performed to date for development of the first two GPS III  satellites continues to cost more than DOD expected. Since the program  entered system development, total program costs have increased  approximately $180 million. Though satellite programs are not experiencing cost and schedule  problems as widespread as in years past, we have reported that ground  control systems and user terminals in most of DOD’s major space  systems acquisitions are not optimally aligned, leading to underutilized  on-orbit satellite resources and limited capability provided to the  warfighter. Another acquisition challenge facing DOD is the cost of launching  satellites into space. DOD has benefited from a long string of successful  launches, including three military and four intelligence community  satellites this year. However, each launch can range from $100 million to  over $200 million. Recent GAO Findings Related to Space Systems Acquisitions

Over the past year, we have reported on DOD’s progress in closing  knowledge gaps in its new Evolved Expendable Launch Vehicle (EELV)  acquisition strategy, DOD’s efforts to introduce new launch providers,  opportunities to help reduce satellite program costs, and the Air Force’s  satellite control operations and modernization efforts with comparisons to  commercial practices. These reports further highlight the successes and  challenges that have faced the space community as it has sought to  mitigate rising costs and deliver modernized capabilities. We reported in July 2012 that DOD had numerous efforts in progress to  address the knowledge gaps and data deficiencies identified in our  September 2011 report, such as completing or obtaining independent  cost estimates for two EELV engines and completing a study of the liquid  rocket engine industrial base. However, we  found that more action was needed to ensure that launch mission  assurance activities were not excessive, to identify opportunities to  leverage the government’s buying power through increased efficiencies in  launch acquisitions, and to strategically address longer-term technology  investments. We reported this month that DOD’s satellite control networks are  fragmented and potentially duplicative. Finally, we found that DOD faced barriers that complicate its ability to  make improvements to its satellite control networks and adopt  commercial practices. We recommended that the Secretary of Defense direct  future DOD satellite acquisition programs to determine a business case  for proceeding with either a dedicated or shared network for that  program’s satellite control operations and develop a department-wide  long-term plan for modernizing its AFSCN and any future shared  networks and implementing commercial practices to improve DOD  satellite control networks. DOD agreed with our recommendations. Recent Actions Taken to Address Space Systems Acquisition Problems

Congress and DOD continue to take steps towards reforming the defense  acquisition system to increase the likelihood that acquisition programs will  succeed in meeting planned cost and schedule objectives. DOD also participates in the newly re-formed Space Industrial  Base Council, which is made up of senior level personnel at agencies  across the federal government that develop space systems. The changes DOD has been making to leadership and oversight appear  to be increasing senior management attention on space programs, but it  is unclear whether the changes will be enough to overcome the problems  we identified with fragmented leadership in the past. In conclusion, DOD has made credible progress in stabilizing space  programs. Space Acquisitions: DOD Faces Challenges in Fully Realizing Benefits of  Satellite Acquisition Improvements.
Why GAO Did This Study

Each year, DOD spends billions of dollars to acquire space-based capabilities that support military and other government operations. Just a few years ago, the majority of DOD's space programs were characterized by significant cost and schedule growth. In 2012, GAO reported that the worst of those space acquisition problems now appear to be behind the department. While new major satellite acquisitions are facing potential cost growth and schedule slips, they are not as widespread and significant as they were several years ago. However, the department still faces serious challenges, such as the high cost of launching satellites, fragmented satellite control operations, as well as disconnects between fielding satellites and synchronizing ground systems.
To address the progress DOD has made this year, this testimony focuses on (1) the current status and cost of DOD space systems acquisitions, (2) the results of GAO's space system-related reviews this past year, and (3) recent actions taken to address acquisition problems. This testimony is based on previously issued GAO products over the past 5 years, interviews with DOD officials, and an analysis of DOD funding estimates.
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 agreed and is in the process of implementing such practices. DOD agreed with GAO's characterization of recent actions it has taken to improve space acquisitions.

What GAO Found

Most of the Department of Defense's (DOD) major satellite programs are in mature phases of development, that is, the initial satellites have been designed, fabricated, and launched into orbit while additional satellites of the same design are being produced. For the portfolio of major satellite programs, new cost and schedule growth is not as widespread as it was in prior years, but DOD is still experiencing problems. For example, total program costs have increased approximately $180 million from a baseline of $4.1 billion for one of two satellite programs that are in the earlier phases of acquisition. Though satellite programs are not experiencing problems as widespread as in years past, ground control systems and user terminals in most of DOD's major space system acquisitions are not optimally aligned, leading to underutilized satellites and limited capability provided to the warfighter. For example, the development and fielding of user terminals for a Navy communications satellite program lag behind the launch of new satellites by more than a year. Additionally, the development of ground software needed to extract capabilities of new missile warning satellites is not expected to be complete until at least 2018, even though satellites are being launched. Another acquisition challenge facing DOD is the cost of launching satellites into space, which range from around $100 million to over $200 million per launch.
Recent GAO space system-related reviews highlight other difficulties facing the space community as it has sought to mitigate rising costs and deliver modernized capabilities. For instance, in July 2012 GAO reported that DOD had numerous efforts in progress to address knowledge gaps and data deficiencies in its Evolved Expendable Launch Vehicle acquisition strategy. However, GAO also reported that more action was needed to identify opportunities to leverage the government's buying power through increased efficiencies in launch acquisitions. In April 2013 GAO reported that satellite control networks are fragmented and potentially duplicative. Moreover, GAO found that DOD faced barriers--such as lacking long-term plans and reliable cost data--that complicate its ability to make improvements to its satellite control networks and adopt commercial practices. GAO recommendations included determining business cases for proceeding with either dedicated or shared satellite control networks for future satellite programs and implementing commercial practices to improve DOD satellite control networks.
Congress and DOD continue to take steps towards reforming the defense acquisition system to increase the likelihood that acquisition programs will succeed in meeting planned cost and schedule objectives. For instance, in response to legislation passed in 2009, DOD has taken steps that should help improve the department's acquisition process and create more executable programs, such as developing performance measures to assess acquisition program activities. DOD has also undertaken actions such as chartering senior-level reviews of space programs and participating in governmentwide space councils. The changes DOD has been making to leadership and oversight appear to be increasing senior management attention on space programs, but it is unclear whether the changes will overcome the problems GAO has identified with fragmented leadership in the past.