At that time, we  recommended that DOD develop an EPAA life-cycle cost estimate which  would allow the department to assess whether its plans were affordable. DOD Met EPAA Phase One Deployment Time Frame, but Its Warfighter Acceptance Process Does Not Fully Identify and Plan to Resolve Implementation Issues

DOD met the presidentially announced time frame to deploy EPAA Phase  One capabilities to Europe when DOD positioned EPAA elements in the  region, and MDA declared EPAA Phase One architecture to be  technically capable in December 2011. However, DOD  experienced implementation issues deploying BMD capabilities in  Europe, such as incomplete construction of infrastructure, including  housing and dining facilities, for soldiers arriving at the EPAA forward- based radar site and incomplete implementing arrangements defining  how DOD would operate with allies when certain BMD elements arrived in  the host country. Without taking steps to resolve  implementation issues prior to deployment, DOD risks encountering  similar challenges as it deploys additional BMD capabilities to Europe. The criteria  used during the warfighter acceptance process focuses primarily on areas  such as effectiveness, suitability, and interoperability. DOD’s Warfighter Acceptance Process Did Not Fully Identify and Resolve Warfighter Implementation Issues before Deploying BMD Elements

As discussed above, DOD used its warfighter acceptance process to  assess BMD elements dedicated to Phase One of EPAA. However,  though the goal of the warfighter acceptance process is, in essence, to  ensure that capabilities can be used as intended when they are delivered,  this process did not explicitly require the combatant commands, the  services, and MDA to comprehensively identify and develop plans for  resolving various implementation issues prior to deploying these and  other supporting elements to Europe. As a result, DOD will likely continue to face  implementation issues unless a more holistic, integrated view is taken to  identify and plan to resolve these issues before BMD capabilities are  deployed in Europe, which may result in less-efficient BMD operations. DOD Lacks a Complete Understanding of the Long-Term Operating and Support Costs for BMD Elements in Europe

DOD has estimated the long-term operating and support costs for some,  but not all, BMD elements in Europe. Initial estimates indicate that these  costs could total several billion dollars over the elements’ lifetime, but  these estimates do not provide a complete picture of the likely costs. DOD Has Not Developed a Comprehensive Joint Estimate of Operating and Support Costs for Aegis Ashore

MDA and the Navy have not developed a comprehensive, joint estimate  of the operating and support costs for the two European Aegis Ashore  sites over their expected 25-year life span, and it is unclear when such an  estimate will be completed. Although MDA and the Navy have not developed a comprehensive joint  estimate, they have individually begun to identify some costs. Specifically, cost  estimates can assist decision makers in budget development and are  necessary for evaluating resource requirements at key decision points  and effectively allocating resources. In addition, Office of Management  and Budget guidance containing principles for capital asset acquisitions  emphasizes that government agencies should understand all costs in  advance of proposing acquisitions in the budget, and notes that agencies  should plan for operations and maintenance of capital assets. To identify resources needed to support its plans for providing BMD  capabilities in Europe and to support budget development, direct the  Under Secretary of Defense for Acquisition, Technology and Logistics to  require and set a deadline for the following three actions:  completing a business-case analysis for the forward-based radar to  support a decision on the long-term support strategy, and updating  the joint MDA and Army estimate for long-term operating and support  costs after a decision on the support strategy is made;  completing a business-case analysis for THAAD to support a decision  on the long-term support strategy, and updating the joint MDA and  Army long-term operating and support cost estimate after this and  other key program decisions, such as where the THAAD batteries are  likely to be forward-stationed, are made; and completing a joint MDA and Navy estimate of the long-term operating  and support costs for the Aegis Ashore two sites, and updating the  estimates after key program decisions are made. In its comments, DOD partially agreed  with one recommendation and agreed with three other recommendations. DOD partially agreed with our recommendation that U.S. Strategic  Command, in consultation with U.S. European Command and the  services, identify and develop a plan to resolve implementation issues  prior to deploying and operating future BMD capabilities in Europe. To assess the extent to which DOD has identified  and planned to resolve implementation issues before deploying ballistic  missile defense (BMD) capabilities to Europe, we reviewed the U.S.  Strategic Command document titled Ballistic Missile Defense System  (BMDS) Warfighter Capability Acceptance. We spoke to senior-level officials  from the Army, Navy, Air Force, U.S. Strategic Command, U.S. European  Command, U.S. Army Europe, U.S. Navy Europe, U.S. Air Forces  Europe, Joint Staff, the Office of the Secretary of Defense, and the  Missile Defense Agency (MDA) about their participation in the acceptance  process, including the selection of acceptance criteria to assess EPAA  Phase One BMD elements, identification and resolution of implementation  issues prior to accepting EPAA BMD elements, and any planned  adjustments to the existing process. To assess the extent to which DOD has estimated the long-term costs to  operate and support BMD elements in Europe, we first reviewed  agreements and their annexes between MDA and the Army and between  MDA and the Navy regarding how these organizations are to work  together to manage the BMD elements, including information on how they  are to jointly develop cost estimates. Defense Acquisitions: Status of Ballistic Missile Defense Program in  2004.
Why GAO Did This Study

Since 2002, DOD has spent over $98 billion developing a ballistic missile defense system to protect the United States, U.S. forces, and allies against inbound threat missiles. In December 2011, DOD deployed the initial phase of a revised approach for Europe, with increased capabilities to be deployed in later phases. GAO has reported on potential risks to DOD's implementation caused by the lack of a coordinated management approach and an absence of life-cycle cost estimates. Given DOD's BMD investment and revised approach, GAO was asked to review EPAA's implementation. GAO evaluated the extent to which DOD (1) identified and planned to resolve implementation issues before deploying BMD capabilities to Europe; and (2) estimated the long-term costs to operate and support BMD elements in Europe. GAO reviewed DOD instructions, manuals, and other documents on the acceptance process and the status of operating and support cost estimates that have been developed to-date, and interviewed cognizant officials.

What GAO Found

The Department of Defense (DOD) met the presidentially announced time frame to deploy initial ballistic missile defense (BMD) capabilities in Europe under the European Phased Adaptive Approach (EPAA) but did not fully identify and plan to resolve implementation issues before deployment. As a result, DOD experienced implementation issues, such as incomplete construction of housing facilities for soldiers arriving at the EPAA radar site in Turkey and incomplete implementing arrangements defining how to operate with allies when certain BMD elements arrived in the host country. U.S. Strategic Command, in coordination with other combatant commands, developed criteria to assess whether a BMD capability is ready for operational use to ensure that BMD capabilities can be used as intended when they are delivered. However, the assessment criteria used during this process focused on effectiveness, suitability, and interoperability areas—such as whether BMD elements can work together to track ballistic missile threats—and did not explicitly require DOD to comprehensively identify and plan to resolve implementation issues prior to deploying these capabilities. DOD plans to continue to use its existing process to accept BMD capabilities planned for Europe in the future. Without identifying and planning to resolve implementation issues before deployment, DOD risks continuing to encounter implementation issues after it deploys additional BMD capabilities in Europe, which may lead to significant delays and inefficiencies.
DOD has estimated the long-term operating and support cost estimates for some but not all BMD elements in Europe, and existing estimates could change. Specifically, initial estimates indicate these costs could total several billion dollars over the elements' lifetime, but key decisions that have not been made are likely to change these estimates. Also, DOD has not developed a comprehensive estimate for a key element—Aegis Ashore. In prior work developing cost-estimating best practices, GAO concluded that cost estimates can assist decision makers in budget development and are necessary for evaluating resource requirements at key decision points and effectively allocating resources. Office of Management and Budget guidance also emphasizes that agencies should plan for operations and maintenance of capital assets. In 2012, the Army and the Missile Defense Agency (MDA) estimated the lifetime operating and support costs for two BMD elements, a forward-based radar and terminal high-altitude air defense batteries. However, DOD has not completed business-case analyses for them, which would underpin a decision on long-term support strategies, and has not decided where to station the terminal-defense battery. In addition, MDA and the Navy have separately begun to identify some costs but have not developed a comprehensive joint estimate of lifetime operating and support costs for the two planned Aegis Ashore sites. Although MDA and the services agreed to jointly develop estimates of lifetime operating and support costs, there is no explicit requirement to complete business-case analyses to support a decision on long-term product support, and jointly develop cost estimates, before deploying BMD elements in Europe. However, without completed business-case analyses and up-to-date operating and support cost estimates, DOD and decision makers are limited in their ability to develop sound budgets and identify the resources needed over the long term to operate and support BMD elements in Europe.

What GAO Recommends

GAO recommends that DOD identify and plan to resolve implementation issues prior to deploying and operating BMD elements and require and set a deadline for completing business-case analyses and joint cost estimates for all BMD elements in Europe. DOD agreed with three recommendations and partially agreed with one, expressing concern about the proper entities for resolving implementation issues. GAO believes that the recommendation can be implemented through collaboration as discussed further in this report.