The  initial system consisted of space- and ground-based sensors, early warning  radars, interceptors, and battle management functions. Former missile defense acquisition programs became elements of a single  ballistic missile defense system. The GMD element is intended to protect the United States against long- range ballistic missiles in the midcourse phase of their flight. Other technologies are reaching this level of maturity. If  development and testing proceed as planned, MDA will demonstrate the  maturity of five additional technologies by the second quarter of fiscal  year 2004 and two critical radar technologies during fiscal year 2005. MDA  believes that its best opportunity to demonstrate the maturity of the tenth  technology, technology critical to GMD’s primary radar, may come  through the anticipated flight tests of foreign missiles. In-flight interceptor communications system, which enables the GMD  fire control component to communicate with the exoatmospheric kill  vehicle while in flight. MDA Has Risked Cost Growth Because It Could Not Fully Rely on Data from Its System for Monitoring Contractor Performance

From the program’s inception in 1997 through 2009, MDA expects to  spend about $21.8 billion to develop the GMD element. About $7.8 billion  of the estimated cost will be needed between 2002 and 2005 to develop  and field the Block 2004 GMD capability and to develop the GMD portion  of the test bed. However, MDA has incurred a greater risk of cost  increases because for more than a year MDA was not sure that it could  rely fully upon data from the prime contractor’s Earned Value  Management (EVM) system, which provides program managers and  others with early warning of problems that could cause cost and schedule  growth. MDA estimates it will need an additional $7.8 billion between  2002 and 2005 to, among other tasks, install interceptors at Fort Greely,  Alaska, and at Vandenberg Air Force Base, California; upgrade existing  radars and test bed infrastructure; and develop the sea-based X-band radar  that will be added in the fourth quarter of fiscal year 2005. MDA’s Insight into Potential Cost Growth Was Limited by the Agency’s Inability to Rely Fully on Data from Earned Value Management System

Because a significant portion of MDA’s Block 2004 GMD cost estimate is  the cost of work being performed by the element’s prime contractor,  MDA’s ability to closely monitor its contractor’s performance is critical to  controlling costs. In February 2002,  MDA modified this contract to redirect the contractor’s efforts. If development and testing progress as planned, however,  MDA expects to have demonstrated the maturity of 7 of the 10 critical  GMD technologies before the element is initially fielded in September 2004  and 2 others during fiscal year 2005. MDA is investing a significant amount of money to achieve an operational  capability during the first block of GMD’s development, and the agency  expects to continue investing in the element’s improvement over the next  several years. To improve MDA’s oversight of the GMD element and to provide the  Congress with the best available information for overseeing the program,  we recommend that the Secretary of Defense direct the Director, Missile  Defense Agency, to:     ensure that when a contractor is authorized to begin new work before a  price is negotiated that DCMA validate the performance measurement  baseline to the extent possible by (1) tracking the movement of budget  from the authorized, unpriced work account into the baseline, (2) verify  that the work packages accurately reflect the new work directed, and  (3) report the results of this effort to MDA; and    strive to initiate and complete an integrated baseline review (IBR) of any  major contract modifications within 6 months. Major contributors to this report are listed  in appendix V.

Appendix I: Scope and Methodology

To determine when MDA plans to demonstrate the maturity of  technologies critical to the performance of GMD’s Block 2004 capability,  we reviewed their critical technologies using technology readiness levels  (TRLs) developed by the National Aeronautics and Space Administration  and used by DOD. Examples  include “high fidelity”  laboratory integration of  components.
Why GAO Did This Study

A number of countries hostile to the United States and its allies have or will soon have missiles capable of delivering nuclear, biological, or chemical weapons. To counter this threat, the Department of Defense's (DOD's) Missile Defense Agency (MDA) is developing a system to defeat ballistic missiles. MDA expects to spend $50 billion over the next 5 years to develop and field this system. A significant portion of these funds will be invested in the Ground-based Midcourse Defense (GMD) element. To field elements as soon as practicable, MDA has adopted an acquisition strategy whereby capabilities are upgraded as new technologies become available and is implementing it in 2-year blocks. Given the risks inherent to this strategy, GAO was asked to determine when MDA plans to demonstrate the maturity of technologies critical to the performance of GMD's Block 2004 capability and to identify the estimated costs to develop and field the GMD element and any significant risks with the estimate.

What GAO Found

GMD is a sophisticated weapon system being developed to protect the United States against limited attacks by long-range ballistic missiles. It consists of a collection of radars and a weapon component--a three-stage booster and exoatmospheric kill vehicle--integrated by a centralized control system that formulates battle plans and directs the operation of GMD components. Successful performance of these components is dependent on 10 critical technologies. MDA expects to demonstrate the maturity of most of these technologies before fielding the GMD element, which is scheduled to begin in September 2004. However, the agency has accepted higher cost and schedule risks by beginning integration of the element's components before these technologies have matured. So far, MDA has matured two critical GMD technologies. If development and testing progress as planned, MDA expects to demonstrate the maturity of five other technologies by the second quarter of fiscal year 2004. The radar technologies are the least mature. MDA intends to demonstrate the maturity of an upgraded early warning radar in California in the first quarter of fiscal year 2005 and a sea-based radar in the Pacific Ocean in the fourth quarter of that year. Although MDA does not plan to demonstrate the maturity of the technology of the early warning radar in Alaska, which will serve as the primary fire control radar, through its own integrated flight tests, it may be able to do so through the anticipated launch of foreign test missiles. MDA estimates that it will spend about $21.8 billion between 1997 and 2009 to develop the GMD element. This estimate includes $7.8 billion to develop and field the GMD Block 2004 capability. For example, the funds will be used to install interceptors at two sites, upgrade existing radars and testing infrastructure, and develop the sea-based X-band radar. We found that MDA has incurred a greater risk of cost growth because for more than a year the agency was not able to rely fully on data from its primary tool for monitoring whether the GMD contractor has been performing work within cost and on schedule. In February 2002, MDA modified the prime contract to reflect an increased scope of work for developing GMD. It was not until July 2003 that the agency completed a review to ensure that the data was fully reliable.