	Background

Since it started development in 2003, FCS has been at the center of the  Army’s efforts to modernize into a lighter, more agile, and more capable  combat force. As we reported in 2009, the FCS program was immature and unable to  meet the Department of Defense’s (DOD) own standards for technology  and design from the start. 1). DOD directed the Army to transition  to an Army-wide modernization plan consisting of a number of integrated  acquisition programs, including one to develop ground combat vehicles  (GCV). Subsequently, the Army has been defining its ground force modernization  efforts per the Secretary’s decisions and the June 2009 acquisition decision  memorandum. The Army Has Started a Series of Development and Fielding Efforts

The Army is implementing DOD direction and redefining its overall  modernization strategy as a result of the Secretary of Defense’s decisions  to significantly restructure the FCS program. It is transitioning from the  FCS long-term acquisition orientation to a shorter-term approach that  biennially develops and fields new increments of capability within  capability packages. It now has an approved acquisition program that will  produce and field the initial increment of the FCS spinout equipment,  which includes unmanned aerial and ground vehicles as well as  unattended sensors and munitions, and preliminary plans for two other  major defense acquisition programs to define and develop follow-on  increments and develop a new GCV. 2). Recent Army Contract Actions Related to Its Post- FCS Efforts

For the time being, the Army is continuing selected development work— primarily that related to Increment 1, Increment 2, and network  development—under the existing FCS development contract. The  Army has also recently released a request for proposals for the technology  development phase of the proposed GCV development effort. Acquisition Direction and FCS Lessons Learned Offer Opportunities to Promote Successful Outcomes, but Decision to Proceed with Initial Production Is Premature

The challenge facing both DOD and the Army is to set these ground force  modernization efforts on the best footing possible by buying the right  capabilities at the best value. In many ways, DOD and the Army have set  modernization efforts on a positive course, and they have an opportunity  to reduce risks by adhering to the body of acquisition legislation and  policy reforms—which incorporate knowledge-based best practices we  identified in our previous work—that have been introduced since FCS  started in 2003. Army’s Decision to Proceed with Low-Rate Initial Production for Increment 1 Increases Risk

In the first major acquisition decision for the Army’s post-FCS initiatives,  DOD and the Army—because they want to support the warfighter  quickly—are proceeding with low-rate initial production of Increment 1  systems despite having acknowledged that systems are immature, are  unreliable, and cannot perform as required. Moreover, the acquisition community needs to be held  accountable for expected results, and DOD and the Army must not be  willing to accept whatever results are delivered regardless of military  utility. In that  regard, we recommended that the Secretary of Defense mandate that the  Army correct the identified maturity and reliability issues with the  Increment 1 network and systems prior to approving any additional lots of  the Increment 1 network and systems for production.
Why GAO Did This Study

Since 2003, the Future Combat System (FCS) program has been the centerpiece of the Army's efforts to transition to a lighter, more agile, and more capable combat force. In 2009, however, concerns over the program's performance led to the Secretary of Defense's decision to significantly restructure and ultimately cancel the acquisition program. As a result, the Army is outlining a new approach to ground force modernization. This statement outlines the Army's preliminary post-FCS actions and identifies the challenges the Department of Defense (DOD) and the Army must address as they proceed. This testimony is based on GAO's report on the Army's Ground Force Modernization effort released on March 15, 2010. It emphasizes the December 2009 decision to begin low-rate initial production for Increment 1 of the Brigade Combat Team Modernization.

What GAO Found

The Army is implementing DOD direction and redefining its overall modernization strategy as a result of the Secretary of Defense's decision to significantly restructure the FCS program. It is transitioning from the FCS long-term acquisition orientation to a shorter-term approach that biennially develops and fields new increments of capability within capability packages. It now has an approved acquisition program that will produce and field the initial increment of the FCS spinout equipment, which includes unmanned aerial and ground vehicles as well as unattended sensors and munitions. It has preliminary plans for two other major defense acquisition programs to (1) define and develop follow-on increments and (2) develop a new ground combat vehicle (GCV). The individual systems within Increments 1 and 2 are to be integrated with a preliminary version of an information network. Currently, the Army is continuing selected development work--primarily that related to Increments 1 and 2 and the information network--under the existing FCS development contract. The Army has recently released a request for proposals for the technology development phase of the proposed GCV development effort. The Army's projected investment in Increments 1 and 2 and GCV is estimated to be over $24 billion through fiscal year 2015. With these modernization efforts at an early stage, DOD and the Army face the immediate challenge of setting them on the best possible footing by buying the right capabilities at the best value. DOD and the Army have an opportunity to better position these efforts by utilizing an enhanced body of acquisition legislation and DOD policy reforms--which now incorporate many of the knowledge-based practices that GAO has previously identified--as well as lessons learned from the FCS program. Preliminary plans suggest that the Army and DOD are strongly considering lessons learned. However, DOD recently approved the first of several planned low-rate initial production lots of Increment 1 despite having acknowledged that the systems and network were immature, unreliable, and not performing as required. That decision reflects DOD's emphasis on quickly providing new capabilities to combat units. This decision did not follow knowledge-based acquisition practices and runs the risk of delivering unacceptable equipment to the warfighter and trading off acquisition principles whose validity has been so recently underscored. The Army needs to seize the opportunity of integrating acquisition reforms, knowledge-based acquisition practices, and lessons learned from FCS into future modernization efforts to increase the likelihood of successful outcomes.