	Background

Over the last decade, DOD space system acquisitions have been  characterized by the long-standing problem of program costs increasing  significantly from original cost estimates. Current Status and Cost of Space System Acquisitions

Most of DOD’s major space programs are in the mature phases of  acquisition and are now producing and launching satellites. Cost and  schedule growth—a significant problem for these programs in past  years—is not currently as prevalent, though still a problem for some  programs. Several of DOD’s space system acquisitions have largely overcome  challenges—such as matching resources to requirements, facilitating  competition, and parts quality issues—and are in the process of  producing and launching satellites. In September 2010, we found that the Global Positioning System  (GPS) III satellite program took a number of steps to avoid past  problems with GPS satellite acquisitions, such as adopting higher  quality standards and better managing requirements. The  program office reports that early testing of a satellite prototype helped  identify problems sooner, but a complete GPS III satellite has yet to  be tested. Though the  program had taken steps to include in its initial cost and schedule  estimates the impacts of addressing problems in development, it is  now rebaselining those estimates—expected to be completed in July  2015—as a result of this delay and associated increased costs. In our ongoing work, we are finding that the GPS Next Generation  Operational Control System (OCX), the next ground system for GPS,  has experienced significant schedule delays and cost growth, and is  still encountering technical challenges. This means some  satellite capability will likely go unutilized for several years while the  capability of the ground system catches up to the functionality of the  satellites. The delayed delivery of the initial block of the ground  system—intended to facilitate processing of integrated data from  legacy Defense Support Program satellites, SBIRS GEO satellites,  and SBIRS sensors in highly elliptical orbit—means complete and  usable data from a critical sensor will not be available until June 2016,  based on DOD’s December 2014 Selected Acquisition Report, over 5  years after the first SBIRS GEO satellite was launched. DOD Faces Challenges and Uncertainty for Addressing Future Space-Based Mission Needs

Fiscal constraints and growing threats to space systems have led DOD to  consider alternatives for acquiring and launching space-based  capabilities. These include disaggregating—or breaking up—large  satellites into multiple, smaller satellites or payloads, and introducing  competition into the acquisition of launch services. One way DOD is assessing disaggregation is through various analyses of  alternatives (AOA), or reviews that compare the operational effectiveness,  suitability, and life cycle cost of solutions to satisfy capability needs. To allow enough time to institute potential  changes in contracting and development approaches, and maintain  continuity of service, DOD is faced with making decisions over the next  several years about the way forward. If decisions  are not timely, DOD may be forced to continue with existing approaches  for its next systems, effectively continuing with legacy systems. Additionally, we reported in April 2015 that  DOD’s minimal investment in planning for technology insertion on SBIRS  GEO satellites 5 and 6 limited the options available to upgrade  technologies on these satellites. For example, disaggregating satellites may require  more complex ground systems and user terminals. DOD’s  culture has generally been resistant to changes in acquisition  approaches, as we have reported, and fragmented responsibilities in  DOD space programs have made it difficult to implement new processes  and coordinate and deliver interdependent systems. DOD has begun implementing efforts to address some leadership  challenges more recently. However, in both cases, it is  too early to tell whether such efforts will be effective. Key  contributors for the previous work on which this testimony is based are  listed in the products cited. Space Acquisitions: DOD Is Overcoming Long-Standing Problems, but  Faces Challenges to Ensuring Its Investments are Optimized. Space Acquisitions: DOD Delivering New Generations of Satellites, but  Space System Acquisition Challenges Remain.
Why GAO Did This Study

DOD's space systems provide critical capabilities to military and other government operations. Over the last decade, DOD space system acquisitions have been characterized by the long-standing problem of program costs increasing significantly from original cost estimates. Given this, DOD must manage system acquisition carefully and avoid repeating past problems.
This testimony focuses on (1) the current status and cost of major DOD space system acquisitions and (2) how DOD will address future space-based mission needs. It is based on GAO reports on space programs and weapon system acquisition best practices over the past 6 years; space-related work supporting GAO's 2015 weapon system assessments and GAO's 2014 report on duplication, overlap, and fragmentation; updates on cost increases and improvements; and preliminary observations from ongoing work. The updates are based on GAO analysis of DOD funding estimates for selected major space system acquisition programs for fiscal years 2014 through 2019. Ongoing work includes analyzing program status documents, reviewing acquisition strategies, and interviewing relevant DOD officials and contractors.

What GAO Found

In recent and ongoing work, GAO has found that several space system acquisitions have largely overcome acquisition challenges—such as matching resources to requirements, facilitating competition, and parts quality issues—and are producing and launching satellites. But other programs continue to face difficulties, both in technology development and in ensuring ground and user systems are delivered in time to maximize a satellite's capability. Specifically:
GAO reported in 2015 that, while the most recent Global Positioning System (GPS) III satellite program took steps to avoid past problems with satellite acquisitions, it is facing more than a 2-year delay for its satellite launch due to development problems. A complete GPS III satellite has not yet been tested, and the program is now rebaselining its cost estimates as a result of the schedule delay and associated increased costs.
The next-generation ground system needed to operate GPS satellites has experienced significant schedule delays and cost growth, and is still facing technical challenges. During development, the contractor encountered problems that led to significant rework, delaying the delivery of the ground system. As a result, as GAO's ongoing work for this committee is finding, some GPS satellite capability will likely go unused for several years while the capability of the ground system catches up to the functionality of the satellites.
While new missile warning satellites are now on orbit after years of delays and significant cost growth, the ground system needed to operate the satellites is still in development, meaning the satellites cannot be fully utilized—complete and usable data from the satellites will not be available until over 5 years after the first satellite was launched, based on recent updates.
The Department of Defense (DOD) also faces challenges in providing future space-based capabilities. In October 2014, GAO reported that fiscal constraints and growing threats to space systems have led DOD to consider alternatives such as disaggregating—or breaking up—large satellites into multiple, smaller satellites or payloads, and introducing competition into the acquisition of launch services. DOD is assessing options for future capabilities in several key mission areas through analyses of alternatives, comparing multiple potential solutions to satisfy capability needs. However, the time frames for making decisions about the way forward are narrowing, and if not made in time, DOD may be forced to continue with existing approaches for its next systems, as GAO reported in April 2015. Implementing any new approaches will be difficult if DOD does not overcome long-standing leadership problems for its space programs, including cultural resistance to acquisition process changes and fragmented responsibilities. More recently, DOD has taken steps to address some of these leadership challenges, though it is too early to tell whether such efforts will be effective.

What GAO Recommends

Past GAO reports have generally recommended that DOD adopt best practices for developing space systems. DOD has agreed and is currently implementing those practices. Consequently, GAO is not making any recommendations in this testimony.