First,  before a product development is started, a match must be made between  the customers’ needs and the available resources—technical and  engineering knowledge, time, and funding. In applying the knowledge-based approach, the most-leveraged investment  point is the first: matching the customer’s needs with the developer’s  resources. Decisions on Space Programs Have Not Been Sufficiently Grounded in Knowledge

Our past work has shown that space programs have not typically achieved  a match between needs and resources before starting product  development. However, it has not launched a  single satellite to perform this capability. In other words, the new  policy does not alter DOD’s practice of committing major investments  before knowing what resources will be required to deliver promised  capability. Similar tools are also being  adopted by other weapon system programs. After this study, the  team is to conclude its work with recommendations to the Under  Secretary of the Air Force, as DOD’s milestone decision authority for all  DOD major defense acquisition programs for space, on whether or not to  allow the program to proceed, typically using the traditional “red,”  “yellow”, and “green” assessment colors to indicate whether the program  has satisfied key criteria in areas such as requirements setting, cost  estimates, and risk reduction. By contrast, the space acquisition policy  increases the risk that significant problems will be discovered late in  development because programs are expected to go into development with  many unknowns about technology. Making tradeoff decisions between alternative investments  is difficult at best. Changing the new space acquisition policy to clearly separate technology  development from product development is an essential first step toward  optimizing DOD’s space investment and assuring more timely delivery of  capability since it enables a program to align customer expectations with  resources, and therefore minimize problems that could hurt a program in  its design and production phase. In our reviews of numerous DOD programs, including many  satellite developments, it has been clear that committing to major  investments in design, engineering, and manufacturing capacity without  knowing a technology is mature and what resources are needed to ensure  that the technology can be incorporated into a weapon system has  consistently resulted in more money, time, and talent spent than either  was promised, planned for, or necessary. Therefore, we continue to recommend that DOD modify its policy  to separate technology development from product development so that  needs can be matched with available technology, time, and money at the  start of a new development program.
Why GAO Did This Study

The Department of Defense is spending nearly $18 billion annually to develop, acquire, and operate satellites and other spacerelated systems. The majority of satellite programs that GAO has reviewed over the past 2 decades experienced problems that increased costs, delayed schedules, and increased performance risk. In some cases, capabilities have not been delivered to the warfighter after decades of development. DOD has recently implemented a new acquisition policy, which sets the stage for decision making on individual space programs. GAO was asked to testify on its assessment of the new policy.

What GAO Found

Similar to all weapon system programs, we have found that the problems being experienced on space programs are largely rooted in a failure to match the customer's needs with the developer's resources--technical knowledge, timing, and funding--when starting product development. In other words, commitments were made to satellite launch dates, cost estimates, and delivering certain capabilities without knowing whether technologies being pursued could really work as intended. Time and costs were consistently underestimated. DOD has recognized this problem and recently revised its acquisition policy for non-space systems to ensure that requirements can be matched to resources at the time a product development starts. The space community, however, in its newly issued policy for space systems, has taken another approach. As currently written, and from our discussions with DOD officials about how it will be implemented, the policy will not result in the most important decision, to separate technology development from product development to ensure that a match is made between needs and resources. Instead, it allows major investment commitments to be made with unknowns about technology readiness, requirements, and funding. By not changing its current practice, DOD will likely perpetuate problems within individual programs that require more time and money to address than anticipated. More important, over the long run, the extra investment required to address these problems will likely prevent DOD from pursuing more advanced capabilities and from making effective tradeoff decisions between space and other weapon system programs.