For these and other reasons, the  FCS program is recognized as being high risk and requiring special  oversight. This statement is based on work we conducted between March 2008 and  March 2009 in accordance with generally accepted government auditing  standards. Specifically, the program has yet  to show that critical technologies are mature, design issues have been  resolved, requirements and resources are matched, performance has been  demonstrated versus simulated, and costs are affordable. The Army will be  challenged to convincingly demonstrate the knowledge necessary to  warrant an unqualified commitment to FCS at the 2009 milestone review. There have been some demonstrations of early versions of the  lightweight armor and an active protection system, but the feasibility of  the FCS survivability concept remains uncertain. Army Plans to Proceed with Production Commitments before Solid Level of Knowledge Demonstrated to Decision-makers

At the milestone review, DOD will have to evaluate at least three  programmatic options to shape investments in combat systems for the  Army, each of which presents challenges. Third, the Army is considering altering the FCS strategy to  follow an incremental approach, which is preferable to the current  approach, but presents other challenges. The FCS acquisition strategy is unlikely to be executable within current  cost and schedule projections, given the significant amount of  development and demonstration yet to be completed. For  example, the Army has scheduled only 2 years between the critical design  review and the production decision in 2013, leaving little time to gain  knowledge between the two events. Further, when Congress is asked to approve funding  for initial low-rate production of core FCS systems, the Army will not yet  have proven that the FCS network and the program concept will work, a  demonstration that is expected as part of Limited User Test 3 in 2012. Currently, the Army’s efforts to field spin out systems relies on a rushed  schedule that calls for making production decisions before production- representative prototypes have clearly demonstrated a useful military  capability. Army officials have said that they are considering an incremental or block  acquisition approach to FCS in order to mitigate risks in four major areas:  (1) immaturity of requirements for system survivability, network  capability, and information assurance; (2) limited availability of  performance trade space to maintain program cost and schedule given  current program risks; (3) program not funded to Cost Analysis  Improvement Group estimates and effect of congressional budget cuts;  and (4) continuing challenges in aligning schedules and expectations for  multiple concurrent acquisitions. First, it presents decision makers with another FCS  strategy to consider, possibly after the fiscal year 2010 budget is  submitted. Second, the approach must ensure that each increment stands  on its own and is not dependent on future increments. Concluding Remarks

The 2009 milestone review is the most important decision on the Future  Combat System since the program began in 2003. If the preliminary design  reviews are successfully completed and critical technologies mature as  planned in 2009, the FCS program will essentially be at a stage that statute  and DOD policy would consider as being ready to start development. We  recommended that if an incremental approach is selected for FCS, the first  increments should be justifiable on their own as worthwhile military  capabilities that are not dependent on future capabilities for their value.
Why GAO Did This Study

The Future Combat System (FCS) program--which comprises 14 integrated weapon systems and an advanced information network--is the centerpiece of the Army's effort to transition to a lighter, more agile, and more capable combat force. The substantial technical challenges, the cost of the program, and the Army's acquisition strategy are among the reasons why the program is recognized as needing special oversight and review. This testimony is based on GAO's March 12, 2009 report and addresses knowledge gaps that will persist in the FCS program as Congress is asked to make significant funding commitments for development and production over the next several years.

What GAO Found

The Army will be challenged to demonstrate the knowledge needed to warrant an unqualified commitment to the FCS program at the 2009 milestone review. While the Army has made progress, knowledge deficiencies remain in key areas. Specifically, all critical technologies are not currently at a minimum acceptable level of maturity. Neither has it been demonstrated that emerging FCS system designs can meet specific requirements or mitigate associated technical risks. Actual demonstrations--versus modeling and simulation results--have been limited, with only small scale warfighting concepts and limited prototypes demonstrated. Network performance is also largely unproven. These deficiencies do not necessarily represent problems that could have been avoided; rather, they reflect the actual maturity of the program. Finally, there is an existing tension between program costs and available funds that will likely worsen, as FCS costs are likely to increase at the same time as competition for funds intensifies between near- and far-term needs in DOD and between DOD and other federal agencies. DOD could have at least three programmatic directions to consider for shaping investments in future capabilities, each of which presents challenges. First, the current FCS acquisition strategy is unlikely to be executable with remaining resources and calls for significant production commitments before designs are demonstrated. To date, FCS has spent about 60 percent of its development funds, even though the most expensive activities remain to be completed before the production decision. In February 2010, Congress will be asked to consider approving procurement funding for FCS core systems before most prototype deliveries, the critical design review, and key system tests have taken place. Second, the program to spin out early FCS capabilities to current forces operates on an aggressive schedule centered on a 2009 demonstration that will employ some surrogate systems and preliminary designs instead of fully developed items, with little time for evaluation of results. Third, the Army is currently considering an incremental FCS strategy--that is, to develop and field capabilities in stages versus in one step. Such an approach is generally preferable, but would present decision makers with a third major change in FCS strategy to consider anew. While details are yet unavailable, it is important that each increment be justifiable by itself and not dependent on future increments.