Figure 2 below shows an  illustration of a MGUE receiver card. The Air Force plans to  develop MGUE in two increments. The Air Force initially began development of M-code in fiscal year 2003. Poor Acquisition Decisions and a Slow Recognition of Development Problems Led to Significant OCX Cost Increases and Schedule Delays

OCX development contract costs have more than doubled since the  contract was awarded in February 2010, increasing by approximately  $1.1 billion to $1.98 billion, and the program’s schedule has roughly  doubled over estimates at contract award. As Raytheon continued to struggle developing  OCX, the program office paused development in late 2013 to fix what it  believed were the root causes of the development issues, and  significantly increased the program’s cost and schedule estimates. The Air Force Accelerated OCX Development to Meet Optimistic GPS III Satellite Launch Time Frames Even as OCX Was Experiencing Problems

In the midst of mounting OCX problems, the Air Force disrupted the  ongoing software development effort. The persistently high defect rate for OCX may be a result of as-yet  unidentified systemic issues. Even so, the military services are  unlikely to have sufficient knowledge about MGUE design and  performance to make informed procurement decisions starting in fiscal  year 2018 because it is uncertain whether an important design review will  be conducted prior to that time and because operational testing will still  be under way. MGUE’s Acquisition Strategy May Limit Insight into MGUE Design

The Air Force has revised the MGUE acquisition strategy several times  as it pursued the program’s development. They can, as provided by the National Defense Authorization Act for  Fiscal Year 2011, request a waiver of such procurement. The Air Force Is Taking Actions to Sustain the GPS Constellation Given Delays to OCX, but These Efforts Will Not Fully Exploit GPS Capabilities

GPS capabilities are unbalanced, with satellite capabilities outstripping  those supported by the ground and user equipment segments. Initial M-code Capability Will Not Be Available until OCX Delivery in Mid-2019, and Full M-code Deployment Is Likely at Least Another Decade Away

M-code initial operational capability is defined as having 18 M-code  capable satellites on orbit, the control segment able to command/upload  M-code capabilities to the space segment, and MGUE receivers fielded  across the military services to utilize M-code capabilities operationally. Nevertheless, DOD cannot take  full advantage of M-code capability until MGUE receivers are deployed in  sufficient numbers across the services. Until the OCX program trajectory is corrected,  those delays are likely to pose significant risks to sustaining the GPS  constellation, and consequently, delivering GPS capability to the military  community. Recommendations for Executive Action

To better position DOD as it continues pursuing GPS modernization, to  have the information necessary to make decisions on how best to  improve that modernization, and to mitigate risks to sustaining the GPS  constellation, we recommend that the Secretary of Defense take the  following five actions:
Convene an independent task force comprising experts from other  military services and defense agencies with substantial knowledge  and expertise to provide an assessment to USD AT&L of the OCX  program and concrete guidance for addressing the OCX program’s  underlying problems, particularly including:
A detailed engineering assessment of OCX defects to determine  the systemic root causes of the defects;
Whether the contractor’s software development procedures and  practices match the levels described in the OCX systems  engineering and software development plans; and
Whether the contractor is capable of executing the program as  currently resourced and structured. Additionally, in June 2014,  Senate Report No. In response, for this report our objectives were to assess (1) the extent to  which DOD is meeting cost, schedule, and performance requirements for  next generation operational control system (OCX), (2) the progress DOD  has made in delivering M-code capable military GPS user equipment  (MGUE) by the end of fiscal year 2017, and (3) the challenges DOD faces  in synchronizing the development of GPS III satellites, OCX, and MGUE  to deploy M-code. To assess the status of the GPS constellation, we interviewed officials  from the Air Force SMC GPS program office and AFSPC.
Why GAO Did This Study

The satellite-based GPS provides positioning, navigation, and timing data to users worldwide. The Air Force is modernizing the satellite, ground control, and user equipment segments to enhance GPS performance.
The Senate and House Armed Services Committee reports accompanying bills for the National Defense Authorization Act for Fiscal Year 2015 included provisions for GAO to review the status of OCX development and DOD's efforts to field M-code signal capability. This report addresses (1) the extent to which DOD is meeting cost, schedule, and performance requirements for OCX; (2) the progress DOD is making in delivering M-code capable MGUE by the end of fiscal year 2017; and (3) the challenges DOD faces in synchronizing the development of GPS III, OCX, and MGUE to deploy M-code.
To conduct this work, GAO analyzed program documents such as acquisition strategies; reviewed oversight reporting; assessed constellation reliability metrics; and interviewed officials from DOD programs and contractors.

What GAO Found

The Air Force has experienced significant difficulties developing the Global Positioning System (GPS) next generation operational control system (OCX) and consistently overstated progress to the Office of the Secretary of Defense (OSD) compared to advisory independent assessments it received. It needs $1.1 billion and 4 years more than planned to deliver OCX due to poor acquisition decisions and a slow recognition of development problems. The Air Force began OCX development in 2010 prior to completing preliminary development reviews in contrast with best acquisition practices. It accelerated OCX development in 2012 to meet optimistic GPS III satellite launch timeframes even as OCX development problems and costs grew, and then paused development in 2013 to address problems and resolve what it believed were root causes. However, as the figure below shows, OCX cost and schedule growth have persisted due in part to a high defect rate, which may result from systemic issues. Further, unrealistic cost and schedule estimates limit OSD visibility into and oversight over OCX progress.
The Air Force is implementing the military GPS user equipment (MGUE) program to develop for the military services GPS receiver cards capable of receiving the military-code (M-code) signal—which can help users operate in jamming environments. The Air Force has revised MGUE's acquisition strategy several times in its quest to develop the cards. Even so, the military services are unlikely to have sufficient knowledge to make informed procurement decisions starting in fiscal year 2018 because operational testing that provides valuable information about MGUE performance will not be complete until fiscal year 2019.
The current GPS constellation has proven to be much more reliable than the Air Force predicted when GAO last reported on it in 2010. Given delays to OCX, the Air Force has prepared contingency plans for sustaining the GPS constellation, but these plans may not deliver the full range of GPS capability. Initial M-code capability will not be available until OCX delivery in mid-2019 at the earliest and full M-code capability is likely at least a decade away—once the services are able to deploy MGUE receivers in sufficient numbers. Until the OCX program trajectory is corrected, additional delays to it may likely pose significant risks to sustaining the GPS constellation and delivering GPS capability.

What GAO Recommends

GAO recommends that DOD obtain a more robust independent assessment of OCX to identify and resolve root causes, and ensure MGUE design is stable to inform testing and procurement decisions. DOD concurred on OCX but stated that actions taken to date are sufficient. DOD partially concurred on MGUE. GAO believes all recommended actions are necessary to address systemic problems.