Significant  schedule delays of as much as 9 years have resulted in potential  capability gaps in missile warning, military communications, and weather  monitoring. The Current Status of Space System Acquisitions

In 2011, we testified that though problems still existed on many programs,  DOD was beginning to make progress by finally launching satellites that   These included the Missile Defense  had been lagging behind schedule.Agency’s (MDA) Space Tracking and Surveillance System (STSS), the  Air Force’s first Global Positioning System (GPS) IIF satellite and the first  Advanced Extremely High Frequency (AEHF) satellite although AEHF  had not yet reached its final planned orbit at the time we testified because  of an anomaly with the satellite’s propulsion system. Progress has continued since we testified last year. DOD launched the first of the Navy’s Mobile User Objective System  (MUOS) satellites in February 2012, and the second is scheduled for  launch in July 2013. The first of six SBIRS geosynchronous earth orbit (GEO) satellites   The  successfully launched in May 2011, after a roughly 9 year delay. The Evolved Expendable Launch Vehicle (EELV) program continues  to successfully launch DOD and National Aeronautics and Space  Administration (NASA) satellites, and is planning 11 launches in 2012. While these launches represent solid progress, there have been some  drawbacks to the programs that have launched their first satellites. For  instance, the second GPS IIF satellite experienced technical problems  that could possibly shorten the satellite’s operational lifetime. Though the first SBIRS satellite has launched, and the second is  close to delivery, program officials are predicting a 1-year delay on  production of the 3rd and 4th GEO satellites due in part to technical  challenges, parts obsolescence and test failures. Along with the  production delay, program officials are predicting a $438 million cost  overrun for the 3rd and 4th GEO satellites. Even though DOD has finally overcome some technical and production  difficulties and begun to launch high risk satellites such as SBIRS and  AEHF, the department is still contending with the effects of their  significant cost growth on its investment portfolio. In  fact, estimated costs for the major space acquisition programs have  increased by about $11.6 billion—321 percent—from initial estimates for  fiscal years 2011 through 2016.investment in the later years is the result of mature programs that have  planned lower out-year funding, cancellation of a major space acquisition   It should also be noted that the declining  program and several development efforts, and the exclusion of several  major space acquisition efforts for which total cost data were unavailable. GAO Space-Related Reviews over the Past Year

Over the past year, we have reported on of the need for sound and  sufficient information for the new DOD acquisition strategy for the EELV  program; parts quality problems in major DOD, MDA, and NASA  programs; and greater content and coordination in the space Science and  Technology (S&T) strategy. We found that DOD lacked critical knowledge needed to develop a new  acquisition strategy. The DOD is in the process of adopting these  recommendations. DOD concurred with these  recommendations. We  expect to issue our report based on this review later this fall. Actions Being Taken to Address Space Acquisition Problems

Though our reports over the year indicate there is more room for  improvement, DOD continues to work to ensure that its space programs  are more executable and produce a better return on investment. Many of  the actions it has been taking are intended to address root causes of  problems, though it will take time to determine whether these actions are  successful and they need to be complemented by decisions on how best  to lead, organize, and support space activities. DOD has generally concurred with our  recommendations, and, as described below, has undertaken an array of  actions to establish a better foundation for acquisition success. DOD and the Air Force are also working to  streamline management and oversight of the national security space  enterprise. Congress and DOD have taken major steps toward reforming the defense  acquisition system in ways that may increase the likelihood that weapon  programs will succeed in meeting planned cost and schedule objectives. But  there are still significant barriers to ensuring investments are optimized,  including fragmented leadership, the high cost of launch, uncertainty  about the future for technology advancements, and disconnects between  the fielding of satellites with user equipment and ground systems needed  to take advantage of expensive new capabilities. ORS was intended to provide  short-term and low-cost tactical capabilities to warfighters. Moreover, given the nation’s fiscal  challenges, DOD’s focus on streamlining leadership, fixing problems, and  implementing reforms is promising. But there are still significant barriers  to achieve acquisition success that need to be addressed to maintain  space superiority in an era of fiscal austerity. All of the barriers— leadership fragmentation, launch costs, S&T planning, and disconnects  between space and ground assets—require action from the Air Force and  the Office of the Secretary of Defense as well as the participation and  cooperation of all the military services, the intelligence community, and  other agencies such as NASA and NOAA. Space Acquisitions: Government and Industry Partners Face Substantial  Challenges in Developing New DOD Space Systems.
Why GAO Did This Study

Each year, the DOD spends billions on large space acquisition programs, which have in the past experienced cost and schedule overruns and increased technical risk. At present, though, the worst of these problems may be over, and programs long troubled are finally being launched. Challenges persist, but they are less significant than they were. With todays fiscal constraints, however, DOD must find ways to keep its new major space acquisitions on track, as operating in space is expensive and DOD is still replenishing legacy programs like missile warning, protected communications, and environmental monitoring. Significant barriers exist to ensuring such investments are optimized.
To address the progress DOD has made this year, this testimony will focus on (1) the current status of space system acquisitions; (2) results of GAOs space-related reviews this past year; (3) actions taken to address DOD space acquisition problems; and (4) remaining challenges that stand in the way of DOD fully realizing the benefits of satellite acquisition improvements. This testimony is based on previously issued GAO products as well as analysis of DOD funding estimates.
GAO does not make recommendations in this testimony. However, in previous reports GAO has generally recommended that DOD adopt best practices for developing space systems such as separating technology development from product development. DOD is in the process of implementing such practices.

What GAO Found

Last year, GAO testified that though acquisition problems still existed in many space programs, the Department of Defense (DOD) was beginning to launch satellites that had long been lagging behind schedule and it had taken positive actions to instill better practices and more focused leadership for space. Progress has continued. Over the past year, DOD launched the first Navy Mobile User Objective System (MUOS) satellite; the first, after a nine-year delay, of six Space Based Infrared System (SBIRS) geosynchronous earth orbit (GEO) satellites; and the first Advanced Extremely High Frequency (AEHF) satelliteall of which will bring important capability to the warfighter. While these launches represent solid progress, there have also been some drawbacks. For instance, the second Global Positioning System (GPS) IIF satellite experienced technical problems that could shorten its operational lifetime. The cost of the first two GPS III satellites is at least18 percent higher than first estimated, up to $1.6 billion today. A 1-year delay is expected by SBIRS program officials on production of the 3rd and 4th GEO satellites along with a $438 million cost overrun. And, a termination of the Defense Weather Satellite System (DWSS) may result in a capability gap. Moreover, even though problems have been overcome, DOD must still contend with the effects of its previous difficulties on its investment portfolio.
Recent GAO reviews highlight other difficulties facing DOD space programs. GAOs review of a new acquisition strategy for the Evolved Expendable Launch Vehicle program, for instance, identified a need for more knowledge about the industrial base as well as cost and pricing in order to optimize a sizable investment in launch vehicles. GAOs review of parts quality problems in major DOD, Missile Defense Agency, and National Aeronautics and Space Administration (NASA) programs illustrated that acquisition reforms need to be buttressed with closer attention to the quality of piece parts as issues have vexed most major programs. GAO, however, credited the agencies with instituting collaborative efforts to address supplier quality.
Though it still faces an array of challenges, DOD continues to work to ensure its space programs are more executable and produce a better return on investment. For example, DOD intends to follow incremental or evolutionary acquisition processes and it has acted to streamline management and oversight of the national security space enterprise. The agency has taken steps toward reforming the defense acquisition system to help its programs to meet planned cost and schedule objectives. Because DOD intends to address the root causes of problems, it will take time to determine if these actions are successful or need further actions on how best to lead, organize, and support space activities.
Moreover, there are significant barriers to ensuring investments are optimized. These include fragmented leadership, the rising cost of launch, uncertainty about the future for technology advancements, and disconnects between the fielding of satellites with user equipment and ground systems needed to take advantage of expensive new capabilities. Addressing all of these challenges are needed to maintain space superiority in an era of fiscal austerity, but their resolution also requires the participation and cooperation of all the military services, the intelligence community, and agencies such as NASA and the National Oceanic and Atmospheric Administration.