In  addition, the Army is struggling to synchronize the schedules and  capabilities of numerous essential complementary programs with the FCS  program. This assessment should provide an  objective technical opinion regarding the status of FCS critical  technologies, enabling more knowledgeable decisions at the 2009  milestone review. Ideally, this review,  which confirms that a design performs as expected, occurs about halfway  through a program’s development schedule. Production Commitments Are Planned to Be Made Early Despite Late Demonstration of FCS Capabilities

While the FCS low-rate production decision for the core FCS program is to  be held in fiscal year 2013, in fact, production commitments are planned to  begin in fiscal years 2008 and 2009 with production for the first of a series  of three planned spin out efforts and the early versions of the NLOS-C  vehicle. As noted previously, key demonstrations of FCS  capabilities will not yet have taken place. As seen in figure 6 below, this commitment to NLOS-C production comes 5  years before the Army plans to produce the core FCS program in 2013. Advance  procurement funding for the first full suite of FCS systems will begin in  fiscal year 2011, the budget for which will be presented to Congress in  February 2010—less than a year after the milestone review and before the  stability of the FCS design is assessed at the critical design review. As LSI, Boeing’s role is  multifaceted: it is a partner with the Army in developing requirements and  defining the FCS solution; it is overseeing the development efforts of all of  the individual system subcontractors, a role that will extend well beyond  the 2013 production decision; it is responsible for developing two key  software products—the system-of-systems common operating  environment, the core of the FCS network, and the Warfighter Machine  Interface; it is the prime contractor for the production of spin outs and the  NLOS-C; and now it is to be responsible for the low-rate production of the  first three combat brigades of FCS core systems. FCS Costs Likely to Be Higher Than Current Army Estimate

The Army’s $160.9 billion cost estimate for the FCS program is largely  unchanged from last year’s estimate despite a program adjustment that  reduced the number of FCS systems from 18 to 14. Given the program’s relative immaturity in  terms of technology and requirements definition, there is not a firm  foundation for a confident cost estimate. The Army maintains that when it  becomes necessary, it will further reduce FCS content to keep  development costs within available funding levels. Should the higher cost estimates prove  correct, the Army will have to make significant changes in planned  capabilities to absorb the higher program costs. We have previously reported that the Army’s  estimates are limited by the low level of knowledge in the FCS program  today. As it is currently structured, the Army is planning to make substantial  financial investments in the FCS program before key knowledge is gained  on requirements, technologies, system designs, and system performance. By the time of the low-rate initial production decision for the core  program in 2013, the Army expects that a total of $39.1 billion will have  been appropriated and another $8 billion requested for FCS. Appendix I: Scope and Methodology

To develop the information on the Future Combat System program that we  used to assess (1) how the definition, development, and demonstration of  FCS capabilities is proceeding, particularly in light of the go/no-go  decision scheduled for 2009; (2) the Army’s plans for making production  commitments for FCS and any risks relative to the completion of  development; and (3) the estimated costs for developing and producing  FCS and risks the Army faces in both meeting the estimate and providing  commensurate funding, we interviewed officials at the Office of the Under  Secretary of Defense (Acquisition, Technology, and Logistics); the  Secretary of Defense’s Cost Analysis Improvement Group; the Institute for  Defense Analyses; the Army’s Training and Doctrine Command; the Future  Force Integration Directorate; the Army Evaluation Task Force; the Army  Test and Evaluation Command; the Director of the Combined Test  Organization; the Program Manager for the Future Combat System  (Brigade Combat Team); the Future Combat System LSI; and LSI One  Team Partners. Examples include  components that are not yet integrated or  representative.
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 Army's acquisition strategy, and the cost of the program are among the reasons why the program is recognized as needing special oversight and review. Section 211 of the National Defense Authorization Act for Fiscal Year 2006 requires GAO to report annually on the FCS program. This report includes an examination of (1) how the definition, development, and demonstration of FCS capabilities are proceeding, particularly in light of the go/no-go decision scheduled for 2009; (2) the Army's plans for making production commitments for FCS and any risks related to the completion of development; and (3) the estimated costs for developing and producing FCS.

What GAO Found

The progress made during the year by the FCS program, in terms of knowledge gained, is commensurate with a program in early development. Yet, the knowledge demonstrated thus far is well short of a program halfway through its development schedule and its budget. This portends additional cost increases and delays as FCS begins what is traditionally the most expensive and problematic phase of development. Thus, FCS's demonstrated performance, as well as the reasonableness of its remaining resources, will be paramount at the 2009 milestone review for the FCS program. In the key areas of defining and developing FCS capabilities, requirements definition and preliminary designs are proceeding but not yet complete; critical technologies are immature; complementary programs are not yet synchronized; and the remaining acquisition strategy is very ambitious. Beginning in 2008, the Army plans to make a series of commitments to produce FCS-related systems in advance of the low-rate production decision for the FCS core program in 2013. In general, production commitments are planned before key information is available. In 2008 and 2009, the Army plans to begin funding production of the first of three planned spin outs of FCS technologies to current forces. However, its commitment to the first spin out may be made before testing is complete. Also starting in 2008, the Army intends to commit to production of early versions of the Non-Line-of-Sight Cannon. This commitment is being made to respond to congressional direction to field the cannon. FCS technologies, network, and designs are not yet mature enough for production, and thus the cannons produced will not be deployable without significant modifications. Advance procurement funding for the first full suite of FCS systems will begin in fiscal year 2011, the budget for which will be presented to Congress in February 2010--less than a year after the milestone review and before the stability of the FCS design is assessed at the critical design review. In addition, the Army plans to commit to using Boeing, its lead system integrator, for the early production of FCS systems through the initial production phase of the FCS system of systems. By the time of the production decision in 2013, $39 billion will have already been invested in FCS, with another $8 billion requested. Thus, while demonstration of the FCS's capability falls late in the schedule, commitments to production are likely to come early--an untenable situation for decision makers. The Army's $160.9 billion cost estimate for the FCS program is largely the same as last year's but yields less content as the number of FCS systems has since been reduced from 18 to 14. There is not a firm foundation of knowledge for a confident cost estimate. Also, two independent cost assessments are significantly higher than the Army's estimate. However, the Army maintains that it will further reduce FCS content to stay within its development cost ceiling. Should the higher cost estimates prove correct, it seems unlikely that the Army could reduce FCS content enough to stay within the current funding constraints while still delivering a capability that meets requirements.