According to a THAAD project office representative, the teams’ results are to be used to revise the THAAD acquisition plan. Acquiring Significant Quantities of Hardware Before Key Performance Requirements Are Tested in an Operational Environment Increases Risk

BMDO’s current schedule calling for award of the low-rate initial production contract almost 2 years before the start of operational testing and evaluation increases the risk associated with the THAAD program. Figure 2 shows the most current approved THAAD schedule for operational testing and production of units for deployment. If the production line prove-out and ramp-up were delayed until after the completion of sufficient independent testing in an operational environment, initial quantities of unproven systems would be reduced and additional funding would become available to buy the proven systems at more efficient rates. A suitable longer range target does not exist. However, funding to develop and produce a longer range target for the system is not currently contained in DOD’s future years funding plan for fiscal years 1999 through 2003. Conclusions and Recommendations

The current THAAD program review and evaluation provides DOD with an opportunity to (1) reduce risk in the acquisition program and minimize the number of initial quantities of unproven systems by reexamining the schedules for operational testing and production and (2) ensure that realistic targets will be used for testing. Implementing our recommendation could also reduce the number of THAAD systems that may have to be modified based on the results of operational testing and evaluation thus allowing full-rate production of more THAAD systems with demonstrated performance.
Why GAO Did This Study

GAO reviewed the Theater High Altitude Area Defense (THAAD) program to determine whether: (1) planned testing would demonstrate operational effectiveness before a significant number of units are produced for deployment; and (2) missile target resources are adequate to support testing plans.

What GAO Found

GAO noted that: (1) the current THAAD program review and evaluation provides the Department of Defense (DOD) with the opportunity to: (a) reduce risk and minimize the number of initial quantities of unproven system hardware by reexamining the schedule for operational testing and production; and (b) ensure that realistic targets will be used for testing; (2) the last approved THAAD acquisition plan calls for significant production of deployment hardware almost 2 years before beginning independent operational testing to assess the system's operational effectiveness; (3) the Army maintains that it needs to buy a number of THAAD systems during low-rate initial production to "ramp-up" to the full rate of production; (4) delaying production until after completing sufficient testing that provides assurance that key performance requirements can be met reduces the risk of buying unproven systems and facilitates production of proven systems at more efficient rates; (5) a suitable target for testing the THAAD system against longer range missiles does not exist, and funds have not been requested for target development and production; and (6) without a longer range test target to represent the more formidable, higher velocity missiles that THAAD could face, the system's operational effectiveness will remain in doubt and DOD will not have reasonable assurance that it could rely on THAAD in an actual conflict.