Table 1 identifies the  major policies related to parts quality at DOD and NASA. Parts Quality Problems Are Widespread and in Some Cases Have Had a Significant Effect on Cost, Schedule, and Performance

Parts quality problems reported by each program affected all 21 programs  we reviewed at DOD and NASA and in some cases contributed to  significant cost overruns, schedule delays, and reduced system reliability  and availability. In most cases, problems were associated with electronics  parts, versus mechanical parts or materials. Moreover, in several cases,  parts problems were discovered late in the development cycle and, as  such, tended to have more significant cost and schedule consequences. Poor workmanship was one of the causes of problems with electronic  parts. Programs also reported quality problems because of the use of  undocumented and untested manufacturing processes. Design Flaws Also Resulted in Parts Quality Problems

In addition to problems stemming from poor control of manufacturing  processes and materials, many problems resulted from poor part design,  design complexity, and inattention to manufacturing risks. Supplier Management Contributed to Quality Problems

Program officials at each agency also attributed parts quality problems to  the prime contractor’s failure to ensure that its subcontractors and  suppliers met program requirements. Agency and Industry Efforts to Address Parts Quality Problems Face Significant Challenges

DOD and NASA have instituted new policies to prevent and detect parts  quality problems, but most of the programs we reviewed were initiated  before these policies took effect. In addition, agencies and industry  have been collaborating to share information about potential problems,  collecting data, and developing guidance and criteria for activities such as  testing parts, managing subcontractors, and mitigating specific types of  problems. In the face of such challenges, it is likely  that ongoing improvements will have limited success without continued  assessments to determine what is working well and what more needs to be  done. Improvement Efforts Face Potential Barriers to Success

There are significant potential barriers to the success of improvement  efforts, including broader acquisition management problems, diffuse  leadership in the national security space community, workforce gaps, the  government’s decreasing influence on the overall electronic parts market,  and an increase in counterfeiting of electronic parts. But there is no mechanism in  place to periodically assess the condition of parts quality problems in  major space and missile defense programs and the impact and  effectiveness of corrective measures. We  support DOD’s willingness to address all quality issues and to include  parts, materials, and processes as an important focus area in an annual  report. Key contributors to this report are provided in appendix V.

Appendix I: Scope and Methodology

Our specific objectives were to assess (1) the extent to which parts quality  problems are affecting Department of Defense (DOD) and National  Aeronautics and Space Administration (NASA) space and missile defense  programs; (2) the causes of these problems; and (3) initiatives to prevent,  detect, and mitigate parts quality problems. To examine the extent to which parts quality problems are affecting DOD  (the Air Force, the Navy, and the Missile Defense Agency (MDA)) and  NASA cost, schedule, and performance of space and missile defense  programs, we reviewed all 21 space and missile programs—9 at DOD,  including 4 Air Force, 1 Navy, and 4 MDA systems, and 12 at NASA—that  were, as of October 2009, in development and projected to be high cost,  and had demonstrated through a critical design review (CDR) that the  maturity of the design was appropriate to support proceeding with full- scale fabrication, assembly, integration, and test. Related GAO Products

Defense Acquisitions: Assessments of Selected Weapon Programs.
Why GAO Did This Study

Quality is key to success in U.S. space and missile defense programs, but quality problems exist that have endangered entire missions along with less-visible problems leading to unnecessary repair, scrap, rework, and stoppage; long delays; and millions in cost growth. For space and missile defense acquisitions, GAO was asked to examine quality problems related to parts and manufacturing processes and materials across DOD and NASA. GAO assessed (1) the extent to which parts quality problems affect those agencies' space and missile defense programs; (2) causes of any problems; and (3) initiatives to prevent, detect, and mitigate parts quality problems. To accomplish this, GAO reviewed all 21 systems with mature designs and projected high costs: 5 DOD satellite systems, 4 DOD missile defense systems, and 12 NASA systems. GAO reviewed existing and planned efforts for preventing, detecting, and mitigating parts quality problems. Further, GAO reviewed regulations, directives, instructions, policies, and several studies, and interviewed senior headquarters and contractor officials.

What GAO Found

Parts quality problems affected all 21 programs GAO reviewed at the Department of Defense (DOD) and National Aeronautics and Space Administration (NASA). In some cases they contributed to significant cost overruns and schedule delays. In most cases, problems were associated with electronic versus mechanical parts or materials. In several cases, parts problems discovered late in the development cycle had more significant cost and schedule consequences. For example, one problem cost a program at least $250 million and about a 2-year launch delay. The causes of parts quality problems GAO identified were poor workmanship, undocumented and untested manufacturing processes, poor control of those processes and materials and failure to prevent contamination, poor part design, design complexity, and an inattention to manufacturing risks. Ineffective supplier management also resulted in concerns about whether subcontractors and contractors met program requirements. Most programs GAO reviewed began before the agencies adopted new policies related to parts quality problems, and newer post-policy programs were not mature enough for parts problems to be apparent. Agencies and industry are now collecting and sharing information about potential problems, and developing guidance and criteria for testing parts, managing subcontractors, and mitigating problems, but it is too early to determine how much such collaborations have reduced parts quality problems since such data have not been historically collected. New efforts are collecting data on anomalies, but no mechanism exists to use those data to assess improvements. Significant barriers hinder efforts to address parts quality problems, such as broader acquisition management problems, workforce gaps, diffuse leadership in the national security space community, the government's decreasing influence on the electronic parts market, and an increase in counterfeiting of electronic parts. Given this, success will likely be limited without continued assessments of what works well and must be done. DOD and NASA should implement a mechanism for periodic assessment of the condition of parts quality problems in major space and missile defense programs with periodic reporting to Congress. DOD partially agreed with the recommendation and NASA agreed. DOD agreed to annually address all quality issues, to include parts quality.