Mixed Progress in Development and Delivery Efforts

MDA experienced mixed results in executing its fiscal year 2011  development goals and BMDS tests. For the first time in 5 years, we are  able to report that all of the targets used in fiscal year 2011 test events  were delivered as planned and performed as expected. However, none of the programs we assessed were able to fully  accomplish their asset delivery and capability goals for the year. Overall, flight test failures and an anomaly forced  MDA to suspend or slow production of three out of four interceptors  currently being manufactured. MDA’s Highly Concurrent Acquisition Strategy Magnifies the Effects of Tests and Other Problems

To meet the 2002 presidential direction to initially rapidly field and update  missile defense capabilities as well as the 2009 presidential  announcement to deploy missile defenses in Europe, MDA has  undertaken and continues to undertake highly concurrent acquisitions. High levels of  concurrency were present in MDA’s initial efforts and are present in  current efforts. Recently, the agency has begun emphasizing the need to follow  knowledge-based development practices, which encourage accumulating  more technical knowledge before program commitments are made and  conducting more testing before production is initiated. However, because MDA continues to employ concurrent strategies, it is  likely that it will continue to experience these types of acquisition  problems. Highly Concurrent Acquisition Strategies Often Lead to Cost, Schedule, and Performance Consequences

Concurrency is broadly defined as the overlap between technology  development and product development or between product development  and production of a system. While some concurrency is  understandable, committing to product development before requirements  are understood and technologies mature as well as committing to  production and fielding before development is complete is a high-risk  strategy that often results in performance shortfalls, unexpected cost  increases, schedule delays, and test problems. Accordingly, they create  pressure to keep producing to avoid work stoppages even when problems  are discovered in testing. In contrast, successful programs that deliver promised capabilities for the  estimated cost and schedule follow a systematic and disciplined  knowledge-based approach. For example, the flight testing cost to confirm  the CE-II capability has increased from $236 million to about $1 billion. Recommendations for Executive Action

We recommend that the Secretary of Defense take the following seven  actions to reduce concurrency and strengthen MDA’s near- and long-term  acquisition prospects. For the Aegis BMD program, direct MDA to  3)  verify the SM-3 Block IB engagement capability through the  planned three developmental flight tests before committing to  additional production beyond those needed for developmental  testing and  4)  report to the Office of the Secretary of Defense and to Congress  the root cause of the SM-3 Block IB developmental flight test  failure, path forward for future development, and the plans to  bridge production from the SM-3 Block IA to the SM-3 Block IB  before committing to additional purchases of the SM-3 Block IB. In responding to a draft of this report, DOD concurred with six of our  seven recommendations and commented on actions in process or  planned in response. In some cases, these actions are responsive to  immediate problems, but do not appear to consistently address the  implications for concurrency in the future. Appendix I: Scope and Methodology

To assess the Missile Defense Agency’s (MDA) cost, schedule, testing  and performance progress, we reviewed the accomplishments of eight  Ballistic Missile Defense System (BMDS) elements that MDA is currently  developing and fielding: the Aegis Ballistic Missile Defense (Aegis BMD)  with Standard Missile-3 Block IA and Block IB; Aegis Ashore; Aegis BMD  Standard Missile-3 Block IIA; Aegis BMD Standard Missile-3 Block IIB;  Ground-based Midcourse Defense (GMD); Precision Tracking and Space  System (PTSS); Targets and Countermeasures; and Terminal High  Altitude Area Defense (THAAD). The complex nature of the BMDS, with its wide range of connected  elements, requires integrated system-level models and simulations to  assess its performance.
Why GAO Did This Study

MDA has spent more than $80 billion since its initiation in 2002 and plans to spend $44 billion more by 2016 to develop, produce, and field a complex integrated system of land-, sea-, and space-based sensors, interceptors, and battle management, known as the BMDS.
Since 2002, National Defense Authorization Acts have mandated that GAO prepare annual assessments of MDAs ongoing cost, schedule, testing, and performance progress. This report assesses that progress in fiscal year 2011. To do this, GAO examined the accomplishments of the BMDS elements and supporting efforts and reviewed individual element responses to GAO data collection instruments. GAO also reviewed pertinent Department of Defense (DOD) policies and reports, and interviewed a wide range of DOD, MDA, and BMDS officials.

What GAO Found

In fiscal year 2011, the Missile Defense Agency (MDA) experienced mixed results in executing its development goals and Ballistic Missile Defense System (BMDS) tests. For the first time in 5 years, GAO found that all of the targets used in this years tests were delivered and performed as expected. None of the programs GAO assessed were able to fully accomplish their asset delivery and capability goals for the year. Flight test failures, an anomaly, and delays disrupted the development of several components and models and simulations challenges remain. Flight test failures forced MDA to suspend or slow production of three out of four interceptors currently being manufactured while failure review boards investigated their test problems.
To meet the presidential 2002 direction to initially rapidly field and update missile defense capabilities as well as the 2009 announcement to deploy missile defenses in Europe, MDA has undertaken and continues to undertake highly concurrent acquisitions. Concurrency is broadly defined as the overlap between technology development and product development or between product development and production. While some concurrency is understandable, committing to product development before requirements are understood and technologies mature or committing to production and fielding before development is complete is a high-risk strategy that often results in performance shortfalls, unexpected cost increases, schedule delays, and test problems. It can also create pressure to keep producing to avoid work stoppages. In contrast, as shown in the notional graphic below, successful programs that deliver promised capabilities for the estimated cost and schedule use a disciplined knowledge-based approach.
High levels of concurrency were present in MDAs initial efforts and are present in current efforts, though the agency has begun emphasizing the need to follow knowledge-based development practices. During 2011, the Ground-based Midcourse Defense, the Aegis Standard Missile 3 Block IB, and the Terminal High Altitude Area Defense experienced significant ill effects from concurrency. For example, MDAs discovery of a design problem in a new variant of the Ground-based Midcourse Defense programs interceptors while production was underway increased costs, may require retrofit of fielded equipment, and delayed delivery. Flight test cost to confirm its capability has increased from $236 million to about $1 billion. Because MDA continues to employ concurrent strategies, it is likely that it will continue to experience these kinds of acquisition problems.

What GAO Recommends

GAO makes seven recommendations to the Secretary of Defense to reduce concurrency and strengthen MDAs near- and long-term acquisition prospects. DOD concurred with six recommendations and partially concurred with one related to reporting on the cause of the Aegis BMD Standard Missile-3 Block IB test failure before committing to additional purchases. DOD did not agree to tie additional purchases to reporting the cause of the failure. DODs stated actions were generally responsive to problems already at hand, but did not consistently address implications for concurrency in the future, as discussed more fully in the report.