MDA Has Made Progress on Testing, Reducing Some Acquisition Risks, and Improving the Clarity of the Baselines

In April 2013, we reported that in the past year MDA gained important  knowledge through its test program, including successfully conducting its  most complex integrated air and missile defense flight test to date, and it  took some positive steps to reduce acquisition risks for two of its  programs. We also reported in April 2013 that MDA took steps to reduce acquisition  risk by decreasing the overlap between technology and product  development for two of its programs—the Aegis BMD SM-3 Block IIA and  Block IIB programs. MDA Continues to Face a Variety of Acquisition Challenges

Although the MDA has made some progress, the new MDA Director faces  considerable challenges in executing acquisition programs; strengthening  accountability; assessing alternatives before making new investment  commitments; developing and deploying U.S. missile defense in Europe  and using modeling and simulations to understand capabilities and  limitations of the BMDS. We also reported in April 2013 that MDA was continuing to follow high  risk acquisition strategies for its Aegis Ashore, PTSS, and Targets and  Countermeasures programs. For example, this year we reported that the  Targets and Countermeasures acquisition strategy is adding risk to an  upcoming complex, costly operational flight test involving multiple MDA  systems because it plans to use unproven targets. DOD agreed and partially addressed  the recommendation. Challenge: Strengthening Accountability by Ensuring Program Baselines Support Oversight

In April 2013 we reported that while MDA made substantial improvements  to the clarity of its reported resource and schedule baselines in fiscal year  2012, it has made little progress improving the quality of its cost estimates  that support its resource baseline since we made a recommendation to  improve these estimates in our March 2011 report.resource baselines are not yet sufficiently reliable, in part because they  do not include costs from military services in reported life cycle costs for  its programs. Instability due to MDA’s frequent adjustments to its  acquisition baselines also makes assessing progress over time extremely  difficult and, in many cases, impossible. DOD did not identify how the full life  cycle costs should be reported. DOD concurred with this recommendation. Second, during the past several years, MDA has been responding to a  mandate from the President to develop and deploy new missile defense  systems in Europe for defense of Europe and the United States. Our work  continues to find that a key challenge facing DOD is to keep individual  system acquisitions synchronized with the planned time frames of the  overall U.S. missile defense capability planned in Europe. Third, MDA  also is challenged by the need to develop the tools—the models and  simulations—to understand the capabilities and limitations of the  individual systems before they are deployed, which will require the  agency to overcome technical limitations in the current approach to  modeling missile defense performance. While MDA recently committed to  a new approach in modeling and simulation that could enable them to  credibly model individual programs and system-level BMDS performance,  warfighters will not benefit from this effort until two of the currently  planned three phases for U.S. missile defense in Europe have already  been deployed in 2011 and 2015 respectively. Both of these programs were recently proposed for cancellation  in the Fiscal Year 2014 President’s Budget Submission. DOD declared the first  phase of U.S. missile defense in Europe operational in December 2011. DOD concurred with this  recommendation. However, especially in light of growing budget pressures,  additional actions are needed, including  sufficiently analyzing alternatives before making major new  investment commitments;  stabilizing acquisition baselines and ensuring they are comprehensive  and reliable; ensuring acquisition strategies allow for the right technical and  programmatic knowledge to be in place before moving into more  complex and costly phases of development; and demonstrating new types of targets in less critical tests before they  are used in a major test in order to lower testing risks  The appointment of a new Director provides an opportunity to address  these challenges, but doing so will not be easy as MDA is still under  significant schedule pressures and the agency is undergoing a transition  to respond to new Secretary of Defense direction to expand the GMD  capabilities.
Why GAO Did This Study

In order to meet its mission, MDA is developing a highly complex group of systems comprised of land-, sea-, and space-based sensors to track missiles, as well as ballistic missile interceptors and a battle management system. These systems can be integrated in different ways to provide protection in various regions of the world. Since its initiation in 2002, MDA has been given a significant amount of flexibility in executing the development and fielding of the ballistic missile defense system. This statement addresses recent MDA progress and the challenges it faces with its acquisition management. It is based on GAO's April 2013 report and reports on missile defense issued from September 2008 through July 2012.

What GAO Found

The Department of Defense's (DOD) Missile Defense Agency (MDA) has made some recent progress gaining important knowledge for its Ballistic Missile Defense System (BMDS) by successfully conducting several important tests. In addition, the agency made substantial improvements to the clarity of its cost and schedule baselines since first reporting them in 2010, and declared the first major deployment of U.S. missile defense in Europe operational in December 2011. MDA also took steps to reduce acquisition risk by decreasing the overlap between technology and product development for two of its programs.
MDA faces considerable challenges in executing acquisition programs; strengthening accountability; assessing alternatives before making new investment commitments; developing and deploying U.S. missile defense in Europe and using modeling and simulations to understand capabilities and limitations of the BMDS. The appointment of a new director for MDA provides an opportunity to address these challenges. More specifically:
Interceptor production for three of MDA's systems has been significantly disrupted during the past few years due to high-risk acquisition strategies which have resulted in delaying planned deliveries to the warfighter, raising costs, and disrupting the industrial base. Further, MDA continues to follow high-risk acquisition strategies for other programs. For example, its Targets and Countermeasures program is adding risk to an upcoming complex, costly operational flight test involving multiple MDA systems because it plans to use unproven targets.
While MDA made substantial improvements to the clarity of its reported cost and schedule baselines, MDA's estimates are not comprehensive because they do not include costs from military services in reported life-cycle costs for its programs. Instability due to MDA's frequent adjustments to its acquisition baselines makes assessing progress over time using these baselines extremely difficult and, in many cases, impossible.
While MDA has conducted some analyses that consider alternatives in selecting which acquisitions to pursue, it did not conduct robust analyses of alternatives for two of its new programs, both of which were recently proposed for cancellation.
During the past several years, MDA has been responding to a mandate from the President to develop and deploy new missile defense systems in Europe for the defense of Europe and the United States. GAO's work continues to find that a key challenge facing DOD is to keep individual system acquisitions synchronized with the planned deployment time frames.
MDA has also struggled for years to develop the tools--the models and simulations--to understand the capabilities and limitations of the individual systems before they are deployed. While MDA recently committed to a new approach that could enable them to credibly model individual programs and system-level BMDS performance, warfighters will not benefit from this effort until after the first two of the currently planned three phases for U.S. missile defense in Europe have been deployed in 2011 and 2015 respectively.

What GAO Recommends

GAO makes no new recommendations in this statement. In the April 2013 report, GAO made four recommendations to DOD to ensure MDA (1) fully assesses alternatives before selecting investments, (2) takes steps to reduce the risk that unproven target missiles can disrupt key tests, (3) reports full program costs, and (4) stabilizes acquisition baselines. DOD concurred with two recommendations and partially concurred with two, stating the decision to perform target risk reduction flight tests should be weighed against other programmatic factors and that its current forum for reporting MDA program costs should not include non-MDA funding. GAO continues to believe the recommendations are valid as discussed in that report.