	Space Acquisitions Continue to Face Cost and Schedule Increases

The majority of major acquisition programs in DOD’s space portfolio have  experienced problems during the past two decades that have driven up  cost and schedules and increased technical risks. At times,  cost growth has come close to or exceeded 100 percent, causing DOD to  nearly double its investment in the face of technical and other problems  without realizing a better return on investment. Along with the increases,  many programs are experiencing significant schedule delays—as much as  6 years—postponing delivery of promised capabilities to the warfighter. Outcomes have been so disappointing in some cases that DOD has had to  go back to the drawing board to consider new ways to achieve the same,  or less, capability. Some programs have been able to work through the  bulk of technical problems they were facing and are on track to meet  revised targets, albeit at higher costs and with delayed deliveries. Others,  however, continue to face setbacks. For  example, two satellites and four instruments were deleted from National  Polar-orbiting Operational Environmental Satellite System (NPOESS) and  four sensors are expected to have fewer capabilities. In addition to SBIRS High and NPOESS, the programs  featured in the figures include the Advanced Extremely High Frequency  (AEHF) satellites, the Wideband Global SATCOM (WGS) and the Mobile  User Objective System (MUOS), which are all communications satellites,  and the Global Positioning System (GPS) II. DOD Is Implementing Best Practices on Two New Efforts

Over the past decade, GAO has examined successful organizations in the  commercial sector to identify best practices that can be applied to space  and weapon system acquisitions. Generally, we  have recommended that DOD separate technology discovery from  acquisition, follow an incremental path toward meeting user needs, match  resources and requirements at program start, and use quantifiable data  and demonstrable knowledge to make decisions to move to next phases. DOD is making efforts to instill these practices on two programs reviewed  this year: the Transformational Satellite Communications System and the  Space Radar program. If these programs adhere to the  TRL 6 criteria, they will greatly reduce the risk of encountering costly  technical delays, though not completely. There are still significant  inherent risks associated with integrating critical technologies and with  developing the software needed to realize the benefits of the  technologies. Actions Needed to Sustain Commitment to Improvements

The Air Force’s continued efforts to instill best practices on Space Radar  and TSAT are good first steps toward addressing acquisition problems in  the space portfolio. But sustaining these reforms will not be easy. The programs  are not immune to funding pressures that have encouraged too much  optimism. They are also being undertaken as DOD is addressing shortfalls  in critical technical, business, and program management skills. In total, these efforts will increase DOD’s investment for all  major space acquisitions from $6.31 billion to $9.22 billion, or about   46 percent over the next 3 years. In addition to technical and cost estimating skills, DOD and  GAO studies have also pointed to capacity shortfalls in program  management. Last, policies that surround space acquisition need to be further revised to  ensure best practices are instilled and sustained. In closing, we support efforts to instill best practices on programs like  Space Radar and TSAT. Appendix I: Scope and Methodology

In preparing for this testimony, we relied on previously issued GAO  reports on assessments of individual space programs, common problems  affecting space system acquisitions, and DOD’s space acquisition policy.
Why GAO Did This Study

DOD's space system acquisitions have experienced problems over the past several decades that have driven up costs by hundreds of millions, even billions of dollars, stretched schedules by years, and increased performance risks. DOD has recognized the need to change its approach to developing space systems and is attempting to instill best practices in new efforts. GAO was asked to testify on its findings on space acquisitions problems and steps needed to sustain and expand the use of best practices. In preparing this testimony, GAO relied on its detailed reviews of space programs as well as cross-cutting work on cost estimating and best practices. GAO does not make recommendations in this testimony. However, GAO has made recommendations on steps DOD can take to ensure better outcomes for its space acquisitions programs. These include developing an overall investment strategy for acquisition programs, addressing human capital and other shortfalls in capacity, and revising policies supporting space to incorporate best practices.

What GAO Found

The majority of major acquisition programs in DOD's space portfolio have experienced problems during the past two decades that have driven up cost and schedules and increased technical risks. At times, cost growth has come close to or exceeded 100-percent, causing DOD to nearly double its investment in the face of technical and other problems without realizing a better return on investment. Along with the increases, many programs are experiencing significant schedule delays--as much as 6 years--postponing delivery of promised capabilities to the warfighter. Outcomes have been so disappointing in some cases that DOD has had to go back to the drawing board to consider new ways to achieve the same, or less, capability. GAO's reviews of space acquisitions this year found that some ongoing programs--for example, the Advanced Extremely High Frequency satellite program and the Wideband Global SATCOM program--have been able to work through the bulk of technical problems they were facing and are on track to meet revised targets, albeit at higher costs and with delayed capability. Others, however, including the Space-Based Infrared System High program, the Global Positioning System IIF, and the National Polar-orbiting Operational Environmental Satellite System, continue to face setbacks and further risks. In recognizing the need to reform space acquisitions, DOD has taken steps to instill best practices in two new major space efforts--the Transformational Satellite Communications System (TSAT) and the Space Radar program--which are expected to be among the most complex and costly space programs ever. For these programs, DOD has taken steps to separate technology discovery from acquisition, establish an incremental path toward meeting user needs, obtain agreements on requirements before program start, and use quantifiable data and demonstrable knowledge to make decisions to move to next phases. If these actions can be sustained, DOD will greatly reduce technical risks, although not completely. There is still significant inherent risk associated with integrating critical technologies on board the satellites and with developing the software needed to achieve the capabilities of the satellites. Moreover, sustaining these reforms on these two programs and expanding them to others will not be easy. Like all weapons programs, space programs continue to face funding pressures that have encouraged too much optimism. DOD has not prioritized its programs for funding even though its investment for all major space acquisitions is expected to increase about 46 percent in the next 3 years. It is likely to continue to face cost overruns on problematic programs, and it wants to undertake other major new efforts in addition to Space Radar and TSAT. In addition, new programs are being undertaken as DOD is addressing shortfalls in critical technical, business, and program management skills. In other words, DOD may not be able to obtain the right skills and experience to manage all of the new efforts.