oversight

Military Space Operations: Common Problems and Their Effects on Satellite and Related Acquisitions

Published by the Government Accountability Office on 2003-06-02.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office
Washington, DC 20548




          June 2, 2003


          The Honorable Jerry Lewis
          Chairman, Subcommittee on Defense
          Committee on Appropriations
          House of Representatives

          Subject: Military Space Operations: Common Problems and Their Effects on
          Satellite and Related Acquisitions

          Dear Mr. Chairman:

          In fiscal year 2003, the Department of Defense expects to spend more than $18 billion
          to develop, acquire, and operate satellites and other space-related systems. Satellite
          systems collect information on the capabilities and intentions of potential
          adversaries. They enable military forces to be warned of a missile attack and to
          communicate and navigate while avoiding hostile action. And they provide
          information that allows forces to precisely attack targets in ways that minimize
          collateral damage and loss of life. DOD’s satellites also enable global
          communications, television broadcasts, weather forecasting; navigation of ships,
          planes, trucks, and cars; and synchronization of computers, communications, and
          electric power grids.

          You requested that we review reports we issued on satellite and other space-related
          programs over the past two decades and identify common problems affecting these
          programs. In addition to analyzing past reports, we interviewed Air Force space
          acquisition officials and reviewed past DOD studies as well as DOD’s selected
          acquisition reports to the Congress. As agreed with your office, given the short
          timeframe of this assignment, we did not thoroughly assess underlying causes of
          problems identified or the effectiveness of actions being taken to address these
          problems. However, we plan to do so as part of a follow-on study. To the extent
          possible, we looked at the current status of programs we reviewed. However,
          because we principally relied on past GAO and DOD reports, some recent changes in
          status and cost may not be reflected. We conducted our review from April 2003
          through May 2003 in accordance with generally accepted government auditing
          standards.




                                                   GAO-03-825R Satellite Acquisition Programs
RESULTS IN BRIEF

The majority of satellite programs cost more than expected and took longer to
develop and launch than planned. In reviewing our past reports, we found that these
results were commonly tied to the following problems.

(1) Requirements for what the satellite needed to do and how well it must perform
    were not adequately defined at the beginning of a program or were changed
    significantly once the program had already begun.
(2) Investment practices were weak. For example, potentially more cost-effective
    approaches were not examined and cost estimates were optimistic.
(3) Acquisition strategies were poorly executed. For example, competition was
    reduced for the sake of schedule or DOD did not adequately oversee contractors.
(4) Technologies were not mature enough to be included in product development.

Several factors contributed to these problems. First, DOD often took a schedule-
driven instead of a knowledge-driven approach to the acquisition process. As a
result, activities essential to containing costs, maximizing competition among
contractors and testing technologies were compressed or not done. Second, there is
a diverse array of organizations with competing interests involved in overall satellite
development—from the individual military services, to testing organizations,
contractors, civilian agencies, and in some cases international partners. This created
challenges in making tough tradeoff decisions, particularly since, for many years,
there was no high-level official within the Office of the Secretary of Defense
dedicated to developing and enforcing an overall investment strategy for space.
Third, space acquisition programs have historically attempted to satisfy all
requirements in a single step, regardless of the design challenge or the maturity of
technologies to achieve the full capability. This approach made it difficult to match
requirements to available resources (in terms of time, money, and technology).

Other factors also created challenges for the satellite acquisition programs we
reviewed. These include a shrinking industrial base, a declining space workforce,
difficulties associated with testing satellites in a realistic environment, as well as
challenges associated with launching satellites.

DOD has studied problems affecting its satellite acquisitions and is undertaking
efforts to address these problems. We plan to evaluate these efforts in a subsequent
review. Therefore, we are not making recommendations in this report.


BACKGROUND

DOD’s current space network is comprised of constellations of satellites, ground-
based systems, and associated terminals and receivers. Among other things, these
assets are used to perform intelligence, surveillance, and reconnaissance functions;
perform missile warning; provide communication services to DOD and other
government users; provide weather and environmental data; and provide positioning
and precise timing data to U.S. forces as well as national security, civil, and
commercial users. Table 1 identifies specific satellite systems used for these
purposes. Appendix I describes these systems in more detail.


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Table 1: Current and Planned Satellite Systems

Function                     Current Systems                      Planned Systems
Missile warning and          •  Defense Support Program           •  Space-Based Infrared System
tracking                        (DSP)                                (High)
                                                                  •  Space Tracking and
                                                                     Surveillance System (STSS)

Intelligence, Surveillance   •   National Reconnaissance          •   NRO satellites
and Reconnaissance               Office satellites (not covered   •   DOD’s Space-based Radar
                                 in this review)                      (not covered in this review)

Communications

   Wideband/ high            •   Defense Satellite                •   Wideband Gapfiller Satellite
   capacity systems              Communications System                (WGS)
                                 (DSCS)                           •   Advanced Wideband System
                             •   Global Broadcasting Service          (AWS)
                                 (GBS) (not covered by GAO
                                 reports)


   Protected systems         •   Milstar                          •   Advanced Extremely High
   (antijam, survivable)                                              Frequency (AEHF)
                                                                  •   Advanced Polar System


   Narrowband systems        •   Ultra High Frequency Follow-     •   Mobile User Objective System
                                 On satellite communications          (MUOS)
                                 system (UFO)                         (not covered by GAO reports)
                                 (not covered by GAO reports)
Navigation, Positioning,     •   Global Positioning System        •   Next Generation GPS
Timing                           (GPS)

Weather/ Environmental       •   Defense Meteorological           •   National Polar-orbiting
                                 Satellite Program (DMSP)             Operational Environmental
                                                                      Satellite System (NPOESS)

All of these systems are playing an increasingly important role in military operations.
According to DOD officials, for example, in Operation Iraqi Freedom, approximately
70 percent of weapons were precision-guided, most of those utilizing GPS
capabilities. Weather satellites enabled warfighters to not only prepare for, but also
to take advantage of blinding sandstorms. Communications and intelligence satellites
were also heavily used to plan and carry out attacks and to assess post-strike damage.

Some of DOD’s satellite systems—such as GPS—have also grown into international
use for civil and military applications and commercial and personal uses. In addition,
many satellites launched over the past two decades have lasted longer than expected.
For example, some of the later DSP spacecraft have operated for more than 10
years—well past design lifetime.

The Joint Staff and the Combatant Commands are responsible for establishing overall
requirements while the services are responsible for satisfying these requirements to
the maximum extent practical through their individual planning, programming, and


Page 3                                            GAO-03-825R Satellite Acquisition Programs
budgeting systems. According to DOD, the Office of the Secretary of Defense and the
intelligence community’s Community Management Staff provide high-level leadership
for national security space activities. The Air Force is the primary procurer and
operator of space systems and spends the largest share of defense space funds,
annually averaging about 85 percent. The Air Force Space Command is the major
component providing space forces for the U.S. Strategic Command.

The Army controls the Defense Satellite Communications System and operates
ground mobile terminals. The Navy operates the Ultra High Frequency follow-on
satellites, the Geosat follow-on satellites, a weather satellite, and some space systems
that contribute to surveillance and warning. And the National Reconnaissance Office
designs, procures, and operates space systems for intelligence and defense activities.

In addition, the National Security Space Architect and National Security Space
Integration Directorate coordinate national security space architectures and plans for
future national security space activities. The Office of the Secretary of Defense, the
Marine Corps, and other DOD agencies also participate in national security space
activities.

COMMON PROBLEMS AFFECTING
SATELLITE ACQUISITIONS

The majority of satellite programs we have reviewed over the past two decades
experienced problems during acquisition that drove up costs and schedules and
increased technical risks.

First, requirements for what the satellite needed to do and how well it must perform
were not adequately defined at the beginning of a program or were changed
significantly once the program had already begun. This made it more difficult for
programs to ensure that they could match their requirements to their resources (in
terms of money, time, and technology). The more requirements were added or
changed, the more that cost and schedule increased.

Second, investment practices were weak. At times, programs did not explore
potentially more cost-effective investment approaches. Once they settled on an
approach, programs often did not develop realistic cost estimates. From a broader
perspective, investments in programs were not made in accordance with an overall
space investment strategy for DOD. Funds were sometimes shifted from healthier
programs to pay for weaker ones. Further, according to DOD officials, decisions
external to the program office were sometimes imposed that resulted in unexpected
funding cuts.

Third, acquisition strategies were poorly executed. For example, competition was
reduced for the sake of schedule or DOD did not adequately oversee contractors. At
times, contract type was not suitable for the work being done.

Fourth, programs did not always ensure that technologies were mature before
making heavy investments in the program. This often caused cost and schedule
increases due to the need to fix problems later in development. A continuing
problem is that software needs are poorly understood at the beginning of a program.


Page 4                                    GAO-03-825R Satellite Acquisition Programs
Table 2 identifies examples of problems identified in our reports and affected
systems.

Table 2: Specific Common Problems Identified in GAO Reports
Problems                                                          Systems Affected by One or
                                                                  More Problems
Requirements—Defining what the system needs to do                 •  DSP replacement programs
and how well it needs to perform                                  •  Milstar
•  Program did not adequately define requirements                 •  AEHF
•  Unresolved conflicts among users on requirements               •  SBIRS-High
•  Frequent changes made to requirements after product
   development began
Investment Strategy—Choosing a path that offers the               •   DSP replacement programs
most cost-effective solution and ensuring costs are               •   SBIRS-Low/STSS
contained                                                         •   Milstar
•  Program did not adequately analyze investment                  •   AEHF
   alternatives                                                   •   SBIRS-High
•  Cost and/or schedule estimates were optimistic                 •   GPS III
•  Funding was unstable
Acquisition Strategy—Maximizing competition and                   •   AEHF
contractor reliability                                            •   SBIRS-High
•  Level of competition was reduced or eliminated                 •   SBIRS-Low
•  Contract type was not suitable for work being done             •   STSS
•  Poor oversight over contractors                                •   EELV
Technology—Ensuring technology is mature before                   •   DSP replacement programs
heavy investments are made in the program                         •   Milstar
•  Technology not sufficiently mature at program start            •   SBIRS-Low
•  Software needs poorly understood                               •   AEHF
•  Testing compressed, skipped, or done concurrently with         •   SBIRS-High
   production

Several factors contributed to the problems identified in our reports. First, DOD took
a schedule-driven versus a knowledge-driven approach to the acquisition process.
As a result, activities essential to containing costs, maximizing competition among
contractors and testing technologies were shortchanged. Second, there was a
diverse array of organizations with competing interests involved in overall satellite
development—from the individual military services, to testing organizations,
contractors, civilian agencies, and in some cases, even international partners. This
created challenges in making tough tradeoff decisions, particularly since, for many
years, there was no high-level official within the Office of the Secretary of Defense
dedicated to developing and implementing an overall investment strategy for space.1
Often, disagreements within DOD would go unresolved for a long period of time.
Third, space acquisition programs have historically attempted to satisfy all
requirements in a single step, regardless of the design challenge or the maturity of
technologies to achieve the full capability. This approach made it difficult to match
requirements to available resources (in terms of time, money, and technology).

1
 In 1994, DOD established the Office of the Deputy Under Secretary of Defense for Space. The Deputy
was responsible for developing, coordinating, and overseeing the implementation of space policy. The
Deputy also had oversight responsibility for space architectures as well as space acquisition programs.
In 1998, this office was dissolved and its responsibilities divided and given to other offices within OSD
and the military services.



Page 5                                             GAO-03-825R Satellite Acquisition Programs
Table 3 further illustrates how these cross-cutting factors can contribute to problems
in requirements, investment strategy, acquisition strategy and technology.

Table 3: Cross-cutting Factors Contributing to Space Acquisition Problems and
Potential Outcomes

Cross-Cutting           Requirements              Investment                Acquisition             Technology
Factors                                                                     Strategy
Schedule driven vs.     Requirements not          Planning is optimistic;   Competition may be      Testing schedule is
knowledge driven        fully known at start of   costs not fully known     shortchanged in an      compressed to meet
approach                program                   at start of program.      attempt to accelerate   target launch date or it
                                                  Alternatives not          development             is done concurrently
                                                  analyzed or                                       with production. Less
                                                  eliminated to meet                                time to fix problems
                                                  schedule pressures                                that arise during
                                                                                                    testing



                        Changes drive up          Solution being            Best technical
                        costs and schedule        pursued may not be        solution may be         Costs and schedule
                                                  the most cost-            ignored; costs go up    increase due to need
                                                  effective;                due to lack of          to fix problems later
                                                  decisionmakers lack       competition             in product
                                                  insight into cost                                 development
                                                  growth

Multiple players (Air   Competing/                Original cost
Force, Army, Naval,     conflicting               estimates become
Space                   requirements set.         invalid. Investments
Commands, testing       Changes made              not made in
organizations,          throughout product        accordance with
contractors, other      development               overall space
agencies,                                         investment strategy
international                                     for DOD
partners); no “honest
broker” at OSD level.
                        Requirements cannot       Overall investment in
                        be matched to             space may not be
                        resources                 optimized

Single-step             Requirements exceed                                                         Technology too
development vs.         resources (time,                                                            immature at product
evolutionary            money, technology) at                                                       development
development             time of product
                        development




Page 6                                                     GAO-03-825R Satellite Acquisition Programs
Other Factors Created
Challenges for Acquisitions

Other factors also created challenges for the satellite acquisition programs we
reviewed. Specifically, as with other defense industry sectors, the satellite industry
has seen a high rate of consolidation resulting in reduced levels of competition. In
1998, we reported that since 1990 the number of defense satellite contractors shrunk
from 8 to 5. Moreover, in recent years, the U.S. commercial space industry has seen
decreasing demand and increasing international competition. Our work has found
varying levels of success in maintaining and promoting competition within this
environment.

DOD has also had difficulty in maintaining the capability to launch its satellites—
partly due to problems within the expendable launch sector and partly due to a
decision in the 1970s to fly all DOD spacecraft on NASA’s space shuttle. According to
a DOD report2, as a result of the latter, DOD investments in space launch
infrastructure and vehicle improvements virtually halted until the Challenger accident
of 1986. The accident itself disrupted launch schedules for programs such as GPS. At
the same time, the lack of investment in launch capabilities for so many years
contributed to higher launch costs after the accident and serious operational
limitations due to aging and obsolete launch vehicle components and a dependence
on outdated launch vehicle production lines. In 1998, we reported that the number of
contractors in this sector fell from 6 to 2.

Air Force officials also cited challenges related to DOD’s space workforce. In 2001, a
congressionally chartered commission looking at space issues, known as the Space
Commission, noted that from its inception the defense space program has benefited
from world-class scientists, engineers, and operators, but now many experienced
personnel are retiring and recruitment and retention of qualified space personnel is a
problem. Further, the commission concluded that DOD does not have the strong
military space culture—including focused career development and education and
training—it needs to create and maintain a highly trained and experienced cadre of
space professionals who can master highly complex technology as well as develop
new concepts of operation for offensive and defensive space operations.

Unique aspects of satellite development and testing also presented challenges for
programs we reviewed. For example, some testing on satellites can be done on the
ground in thermovac or other environmental simulation chambers. Some systems
can also be tested via aircraft. However, the only way to test satellites in the true
operational space environment is to build one or more demonstrator satellites and
launch them into orbit. Launching demonstrators is costly and time-consuming but it
offers greater assurance that satellites will work as intended. Also, a high degree of
coordination between space and ground segments as well as user equipment is
necessary. Typically, satellite software is used to test the satellite before it is shipped
for launch. Ground control software is typically installed/fielded a year before launch
to allow for training and rehearsals. Therefore, scheduling slips within any one of

2
    Aspin, Les, Secretary of Defense, Report on the Bottom-up Review, October 1993.


Page 7                                             GAO-03-825R Satellite Acquisition Programs
these activities can cause problems for other activities. At the same time, the timing
of the launching of satellites must coincide with the deployment of ground receivers,
but this can be difficult to do when ground and space segments are funded by
different military services.

In addition, satellite programs require a significantly larger investment in the
acquisition phase than other weapons systems. This is because satellites are RDT&E
intensive, go through extensive development testing, and need to have all of their
sustainment capabilities on board when launched. Once on orbit they require a
reduced amount of funding to operate when compared with the funding profile of a
typical, large production DOD program. Air Force space acquisition officials stated
that the funding profile for a satellite program is typically the reverse of the funding
profile for a typical DOD program. The notional DOD lifecycle profile shows
approximately 28 percent of a program’s budget funding its development and 72
percent of its budget funding the production of hundreds of units and paying for the
operations and sustainment that goes with it. For a satellite program, the funding
profile is “front-loaded” with 60-70 percent of its budget funding development and
launch with 30-40 percent of the budget funding operations and maintenance of the
satellite system. According to Air Force officials, this sort of profile makes it difficult
to adapt to unknowns that arise since it is not possible to trade out-year production
funding to fund near-term problems since the production numbers for satellite
systems are so small.

HOW PROBLEMS AFFECTED
SPECIFIC PROGRAMS

Nearly every program we reviewed over the past several decades experienced one or
more of the problems we identified and experienced cost and scheduling increases as
a result. Corrective actions were taken on some programs to reduce cost, schedule
or technical risks after they were identified. For example, the NPOESS program took
a range of actions to reduce program risks, including deferring development of
requirements, deciding to rely on existing versus new technology for some sensors,
and using aircraft to test sensors. In other cases, problems were allowed to persist to
the point where DOD needed to step in a restructure the program. SBIRS-Low, for
example, was restructured after continuing to experience cost growth and scheduling
delays, and SBIRS-High was restructured last year after experiencing continued cost
growth and schedule delays. In the 1990s, three separate programs designed to
replace DSP satellites were abandoned after it became clear that they would be either
too costly and/or technically risky to pursue.

Recent cases are discussed in more detail below. A chronology of our findings
related to individual systems is also provided in appendix I.




Page 8                                      GAO-03-825R Satellite Acquisition Programs
Advanced EHF Satellite

The AEHF is a satellite system intended to replace the existing Milstar system and to
be DOD's next generation of higher speed, protected communication satellites. We
recently reported that cost estimates developed by the Air Force for this program
increased from $4.4 billion in January 1999 to $5.6 billion in June 2001 for five
satellites. Moreover, DOD will not meet its accelerated targeted date for launching
the first satellite in December 2004. In fact, the first satellite's new launch date is
December 2006. (DOD has since decided to purchase three satellites with options to
purchase the fourth and fifth. The December 2002 Selected Acquisition Report for
the AEHF showed current program costs at $4.7 billion for three satellites. )

Several factors contributed to cost and schedule overruns and performance
shortfalls. First, in the early phases of the AEHF program, DOD substantially and
frequently altered requirements. Although considered necessary, many changes were
substantial, leading to cost increases of hundreds of millions of dollars because they
required major design modifications. Second, based on a satellite constellation gap
caused by the failure of a Milstar satellite, DOD decided to accelerate its plans to
build the AEHF satellites. The contractors proposed, and DOD accepted, a high risk
schedule that turned out to be overly optimistic and highly compressed-leaving little
room for error and depending on a chain of events taking place at certain times.
Substantial delays occurred when some events did not occur on time. DOD decided
to take this approach on the grounds it offered a chance to meet unmet warfighter
requirements caused by the loss of the Milstar satellite. Third, at the time DOD
decided to accelerate the program, it did not have the funding needed to support the
activities and the manpower needed to design and build the satellites quicker. The
lack of funding also contributed to schedule delays, which in turn, caused more cost
increases.

Advanced Wideband Satellite System (AWS)

AWS (also known as the Transformational Communications Satellite or TSAT) is a
fairly new program focused on supplementing AEHF and replacing DOD’s Wideband
Gapfiller Satellite system (WGS). DOD plans to include laser crosslinks on the
satellite to significantly increase capacity. In 2003, GAO reported that the AWS
program is scheduled to enter product development with only one of its five critical
technologies mature according to best practice standards. Four immature
technologies were scheduled to reach maturity by January 2006, more than 2 years
after development start. Three of four technologies have a backup technology in case
of development difficulties. But the Single Access Laser Communications technology
has no backup, and according to program officials, any delay in maturing this
technology would result in a slip in the expected launch date.

SBIRS-High

SBIRS-High satellites are being developed to replace DOD’s older missile warning
satellites. In addition to missile warning and missile defense missions, the satellites
will perform technical intelligence and battlespace characterization missions. After
the program was initiated in 1994, it faced cost, scheduling, and technology problems.


Page 9                                    GAO-03-825R Satellite Acquisition Programs
GAO reports from 1995 through 2001, for example, noted that the program was facing
serious hardware and software design problems. In 2001, the program reported that
it had exceeded the 25 percent cost threshold established in 10 U.S.C. 2433. In 2002,
an independent review team chartered by DOD to examine the reasons behind cost
and scheduling problems in the SBIRS-High program reported that a key root cause
was that system requirements were not well-understood when the program began and
as it evolved. In addition, the requirements setting process was often adhoc with
many decisions being deferred to the contractor. The review team also found that the
program was too immature to enter system design and development. Further, there
was too much instability on the program after the contract award—with DOD
undertaking four major replanning efforts. DOD has since restructured the program
and taken corrective actions, but the team noted that there were still risks within the
program, including risks related to the schedule.

SBIRS-Low

SBIRS-Low satellites are to perform missile warning and missile tracking functions.
Because of their low-earth orbit, they may be particularly useful in tracking missiles
through the midcourse of their flight—when missiles themselves have cooled down
and become more difficult to track.

SBIRS-Low has been restructured due to cost, scheduling, and technical problems.
Despite spending several billion dollars on these efforts, DOD has not launched a
single satellite or demonstrated any space-based missile tracking capabilities from
space using technologies similar to those to be used by SBIRS-Low (now called the
Space Tracking and Surveillance System, or STSS). In 2001, GAO reported that DOD
was not adequately analyzing or identifying cost-effective alternatives to SBIRS-Low
that could satisfy critical missile defense requirements, such as a Navy ship-based
radar capability. At the time, other studies supported the possibility that other types
of sensors could be used to track missiles in midcourse of their flight and to cue
interceptors. In 2001, GAO reported that the SBIRS-Low acquisition schedule was at
high risk of not delivering the system on time or at cost or within expected
performance. Satellite development and production, for example, were to be done
concurrently, leaving the Air Force at risk of having to correct problems discovered
during testing at late stages of the acquisition process, when they are more expensive
and time-consuming to fix. SBIRS-Low also had high technical risks because some
critical satellite technologies were judged to be immature for the current stage of the
program, including the scanning infrared sensor, tracking infrared sensor, and
technologies used to cool down satellite sensors. As the program was experiencing
cost and schedule problems, DOD restructured the program, moving it from the Air
Force to the Missile Defense Agency to reflect the increased focus on missile defense
and renaming it the Space Tracking and Surveillance System (STSS).

In May 2003, we reported that the STSS program was not considering two potentially
more cost effective alternatives—(1) delaying the launch date by one year and (2)
stopping efforts to launch existing technology for research purposes and
concentrating instead on new technology. Moreover, the program faced investment
and scheduling risks since it recently reduced competition within the program and it
decided on a 2007 launch date without knowing the extent of work that must be done
on the satellite equipment it plans to assemble and launch.


Page 10                                   GAO-03-825R Satellite Acquisition Programs
National Polar-orbiting Operational Environmental Satellite System (NPOESS)

This program essentially combined separate weather satellite efforts being pursued
by DOD and the National Oceanic and Atmospheric Administration (NOAA) after it
was determined that doing so could reduce duplication and save money. Our earlier
reviews identified potential requirements setting problems attributable to the broad
base of internal customers each agency has and the diversity of requirements that
needed to be met. DOD’s selected acquisition report on NPOESS stated that
coordination and validation of the broad-based requirements took longer than
anticipated and delayed a request for proposal release by 6 months. In 1997, the
NPOESS program assessed specific technical, scheduling, and cost risks facing the
program, and determined there were risks within the interface data processing
segment, the space segment, and the overall system integration segment. To reduce
these risks, the program deferred development of requirements either because the
technology needed to implement them did not exist or the requirement was too
costly. It undertook earlier development of some satellite sensors in order to allow
more time to mature technologies. It decided, in some cases, to use existing sensor
technologies instead of building new ones. It also increased testing to demonstrate
satellite sensors and to deliver early data to users to that they could begin to work
with the data.

Global Positioning System (GPS)

GPS satellites, which provide positioning, navigation, and timing information to
military forces and civilian users, have existed for over 25 years, but a full
constellation of satellites has been operational for only 7 years. In 1980, we reported
that the cost to acquire and maintain GPS satellites through 2000 increased from $1.7
billion to $8.6 billion due largely to estimates not previously included for
replenishment satellites, launches, and user equipment. In 1983, we reported that
costs might still be understated since system design changes were being considered.
Costs and schedule were significantly affected in 1987 as a result of the Challenger
accident, since DOD was depending on the space shuttle to launch GPS satellites.
Reliability problems with GPS receivers also affected schedule throughout the
program. In 1991, for example, we reported that DOD postponed full-rate production
for receiver sets by 2 years due to reliability problems. Last fall, according to GPS
program officials, the program was on track to launch the first GPS III satellite in
2012. However, following a review by the Under Secretary of the Air Force, funding
for the program was zeroed for fiscal year 2004, and $46 million was withheld from
the fiscal year 2003 budget. Without a full release of the withheld funding, the
program office believes the launch date may slip past 2012.


DOD HAS STUDIED ACQUISITION PROBLEMS

DOD has studied many of the problems related to satellite acquisitions identified in
our reviews and is making changes. A 1994 study performed by the U.S. Space
Command, for example, stated that DOD’s process of defining requirements for space
systems needed to be improved to ensure greater Joint Staff and Service influence in
decisionmaking. With increasing budget pressures and dramatically different post


Page 11                                   GAO-03-825R Satellite Acquisition Programs
Cold War strategies, the U.S. Space Command also noted that it was essential for all
services to better understand the costs and benefits of requirements. A 1998 study
performed by the United States Air Force Scientific Advisory Board advocated
adopting commercial practices such as business case analysis, streamlined
procurement, and spiral development of ground segments as a way to improve
acquisition practices. The study also called for improved oversight by high-level
officials, development of improved cost/performance models that increase visibility
into program status and emerging problems, and maintaining adequate budget
reserves in acquisition programs to minimize reprogramming actions and avoid
program disruptions.

More recently, the U.S. Space Commission, chaired by Donald Rumsfeld, found that
DOD’s budgeting process and declining space workforce created difficulties for
acquisitions. Specifically, the Commission noted that when satellite programs are
funded in one budget and terminals in another, the decentralized arrangement can
result in program disconnects and duplication. It can result in lack of
synchronization in the acquisition of satellites and their associated terminals. It can
also be difficult for user requirements to be incorporated into the satellite system if
the organization funding the system does not agree with and support those user
requirements.

Last year, the independent review team studying the SBIRS-High program recognized
that there were broad, systemic issues that need to be addressed on space programs.
These include: the need for pre-acquisition rigor up front (requirements); increased
funding stability; and the need for block upgrades since preplanned product
improvements are very difficult for space systems, particularly for space craft. The
team also noted that space programs tend to have “inclusive” requirements
supporting multiple DOD and warfighting needs with many mission partners.

A range of actions are being undertaken by DOD and individual military services to
streamline space acquisition. For example, the Air Force has developed a new space
system acquisition process designed to shorten timeframes for technical assessments
and facilitate faster decisionmaking. This approach will establish key decision points
earlier in the acquisition process, as compared to the acquisition process for non-
space systems, and will provide more oversight earlier in the development of
complex satellite technology. According to DOD, the new process will conduct an
independent cost estimate as part of the key decision point (KDP) authorizing the
start of the system design effort and will then also conduct another cost estimate
after the design is complete as part of the KDP prior to the start of system build, test
and launch activities. A key feature of the new process is that it will use an
independent program assessment team composed of members with appropriate
expertise to thoroughly review a space program before each KDP. The assessment
will be done on a full-time basis over a two to four week period in an effort to
perform relevant technical and programmatic reviews in less time than the
traditional, part-time, multi-layered integrated product team approach. We plan to
study DOD’s new space policy as part of our follow-on review and to assess whether
DOD will have adequate knowledge about technology, design, and costs for making
its decisions.




Page 12                                    GAO-03-825R Satellite Acquisition Programs
To strengthen space planning, DOD undertook efforts to develop a plan that would
set overall objectives for space and provide a high-level 10- to 15-year roadmap for
the direction of space program. The plan is expected to be completed sometime in
                                                                             3
fiscal year 2003. In response to the Space Commission’s recommendation, the
Secretary of Defense also designated the Air Force to be the executive agent for
space within DOD, with departmentwide responsibility for planning, programming,
and acquiring space systems. In October 2001, DOD established a “virtual” major
force program for space to increase visibility of resources allocated for space
activities. The virtual major force program identifies spending on space activities
within the other major force programs in DOD’s Future Years Defense Budget and
provides information by functional area. Further, in recent testimony, the Under
Secretary of the Air Force noted that the Air Force was working with the Director of
OSD Cost Analysis Improvement Group to form a national security space cost
assessment team to provide a useful, accurate, and timely independent cost estimate
with common methodology in support of space acquisition.

We plan to review these and other actions being taken to address satellite acquisition
problems in a subsequent review.

AGENCY COMMENTS

DOD provided technical comments on a draft of this letter. These comments were
largely focused on ensuring technical accuracy in our reporting of individual systems
and providing updated information. We incorporated these comments where
possible. DOD did not comment on our overall findings.

                                       -   -   -   -   -

We are sending copies of this report to the Secretary of Defense and interested
congressional committees. We will also make copies available to others upon
request. In addition, the report will be available at no charge on the GAO Web site at
http://www.gao.gov.

If you or your staff have any questions concerning this report, please contact me at
(202) 512-4841. Key contributors to this report were Cristina Chaplain, Jean Harker,
Natalie Britton, Bradley Terry and Art Gallegos.




Katherine V. Schinasi
Director, Acquisition and Sourcing Management



3
 We recently reported on the status of DOD’s efforts to implement the Commission’s
recommendations. See Defense Space Activities: Organizational Changes Initiated, but Further
Management Actions Needed (GAO-03-379, April 2003).


Page 13                                        GAO-03-825R Satellite Acquisition Programs
                                           Appendix I
                                Profiles of Satellite Acquisitions

This appendix profiles satellite programs covered by GAO reviews during the past
two decades. It also profiles two launch systems, given their importance to the
success of satellite programs. Among other things, the profiles describe the
programs’
•   Mission
•   Primary users
•   Manager
•   Architecture and key technologies
•   Contractors/contract type
                                                     4
•   Original cost/quantity and current cost/quantity
                                   5
•   Total spent/percent total spent
The profiles also identify key GAO findings related to requirements, investment
planning, acquisition strategy, and technology. A summary of these findings and our
report coverage are highlighted below. In addition to analyzing past GAO reports, we
also relied on DOD Selected Acquisition Reports to the Congress and several DOD
studies.

Table I.1 Summary of GAO Coverage and Key Findings
Mission        Program                                 Require-   Invest-   Acquisition   Technology
                                                       ments      ment
Missile        DSP proposed replacements (FEWS,           a           a                      a
Warning/       ALARM)
Tracking       SBIRS High                                 a           a         a            a
               STSS (including Brillant Eyes, SMTS,       a           a         a            a
               SBIRS-Low)
Communi-       Milstar                                    a           a         a
cations
               DSCS                                                   a
               AEHF                                       a           a         a            a
               WGS                                                                           a
               (new effort, covered in a recent,
               broader GAO assessment of major
               weapon system programs)
               AWS                                                                           a
               (new effort, covered in a recent,
               broader GAO assessment of major
               weapon system programs)
Navigation     GPS                                                    a                      a
Weather        NPOESS                                                 a                      a
Launch         Titan IV                                               a                      a
               EELV                                       a           a         a            a

4
 Original and current cost estimates were inflated from the base year reported in the SAR to 2003
current dollars using DOD escalation factors. For older SARs with very early base years such as DSP,
inflating the dollar amounts may be subject to error based on accuracy of escalation factors. In some
cases, DOD provided us with updated cost information.
5
 Total dollars spent were inflated from the year the SAR was issued to 2003 dollars. The percent total
spent was taken from the latest SAR available and was not calculated by GAO. In some cases, DOD
provided us with updated cost information.


Page 14                                               GAO-03-825R Satellite Acquisition Programs
Mission: Missile Warning
Program: Defense Support Program (DSP) and early proposed replacements


Background information
DSP is a strategic surveillance and warning satellite system with an infrared capability to detect
ballistic missile launches (intercontinental and submarine-launched). It provides near real-time
detection information in support of DOD’S integrated tactical warning and attack assessment
(ITW/AA) mission. DSP began in 1967, and the first operational satellite was deployed in 1971. The
most recent DSP satellite launch (number 21) was in August 2001. In the late 1970s, DOD decided
that DSP should be replaced since the system did not satisfy all the validated military requirements
for a space-based ITW/AA sensor. It followed this decision with several attempts to develop
replacement systems, but these efforts failed due to high costs and technology immaturity. DOD
eventually made enhancements to DSP. The SBIRS-High program is focused on replacing DSP.

Architecture/Key Technologies
The number of DSP satellites in orbit is classified SECRET. DSP satellites use infrared sensors to
detect heat from missile and booster plumes against the earth's background. Over the last 29 years,
there have been five major design changes. Historically, DSP satellites have been launched atop the
Titan III & IV family of launch vehicles; one was launched aboard the Space Shuttle. Currently, DSP
satellites are launched into geo-synchronous orbit using a Titan IV-B launch vehicle with an Inertial
Upper Stage. DSP Flight 23 will be launched on an Evolved Expendable Launch Vehicle (EELV).

Users              Strategic and tactical forces across    Original cost/     $10.8 billion
                   military services                       quantity:          19 satellites

Manager            Air Force                               Current cost/      $14.7 billion
                                                           quantity:          23 satellites

Contractors/      TRW for satellites                      Total spent/      $7.8 Billion
Contract type     Fixed price with Incentive              % total spent     75.4%
                  Gencorp, Aerojet for sensors
                  Fixed price with Incentive
                  (note: contract has since changed)
Source: 12/31/1996 Selected Acquisition Report (all dollar amounts in 2003 dollars) and DOD
provided updates
Key Issues Affecting Program
•   Technology immaturity
•   Unanticipated costs
•   Lack of adequate analysis of alternatives
Note: Issues mostly affecting DSP replacement programs
Chronology of Key Findings

•   1992 GAO reported that DOD was not adequately analyzing alternatives to DSP. DOD first
    proposed replacing DSP with a system called the Advanced Warning System (AWS), but this
    proposal never fully materialized because of immature technology and high costs. A subsequent
    proposal, the Boost Surveillance and Tracking System was discontinued after DOD decided to
    pursue other technologies for tracking ballistic missiles. AWS was proposed for remaining
    tactical warning and attack assessment missions in 1990 but was later scaled down to a less
    costly and less capable system called the Follow-on Early Warning system (FEWS). GAO
    reported that while the current proposal for FEWS may provide more capability than the existing
    DSP system, DOD still needed to consider other alternatives, including an enhanced DSP which
    could be nearly as effective and cost billions dollars less than a fully capable FEWS. Several
    DOD studies supported this point.

•   1993 GAO reported that adding global processing capability—which would enable processing of
    data generated by the satellite constellation network to be done in a single station--in upgrades to
    ground processing stations for DSP might not be cost-effective. One reason was that there were



Page 15                                            GAO-03-825R Satellite Acquisition Programs
    no corresponding plans to reduce the number of ground stations. Another reason was that
    operational requirements were not yet complete.

•   1994 GAO reported that Congress had appropriated $515 million for FEWS for fiscal years 1992
    through 1994, but terminated the program in late 1993 based on affordability reasons. In late
    1994, the Air Force selected ALARM (Alert, Locate, and Report Missiles system) to be DSP’s
    replacement. ALARM was to be smaller than DSP and less capable than FEWS with an emphasis
    on greater support to tactical forces. At the time of GAO’s review, concerns were that DOD was
    about to make a substantial investment in ALARM without fully defining operational
    requirements. Moreover, while DOD cost estimates showed ALARM to be more affordable than
    FEWS in the short term, the total life cycle costs lead GAO to question whether ALARM, with
    projected upgrades, would actually be a more expensive system.

•   1994 GAO reported that the Air Force plans to accelerate ALARM schedule by 2 years from 2004
    to 2002 could add costs to the program which in turn could put DOD in a similar unaffordable
    position when it rejected the FEWS program. At the time, the program office had identified an
    additional $434 million that would be needed to support the new schedule. Accelerating
    schedule could also save as much as $700 million because it could obviate the need to procure an
    additional DSP satellite, its launcher, and an inertial upper stage. However, acceleration could
    also create program risks by shortening the demonstration and validation phase of the acquisition
    process by 10 months and performing the critical design review a full year ahead of the original
    schedule. Air Force officials contended that previous engineering efforts on DSP earlier
    replacement programs provided enough experience to offset this risk.

•   1994 GAO reported that funds for developing two critical technologies for ALARM—infrared
    focal plane array and radiation-hardened electronics—were frozen. Contractors stated that no
    private sector funds would be available for these technologies.

•   2003 CRS report recapped history of DSP, noting that none of the proposed replacement
    programs reached fruition, and instead, enhancements were made to the DSP series. For
    example, DSP was designed to detect launches of strategic long range missiles (such as
    intercontinental ballistic missiles) but following the Persian Gulf War DOD recognized that the
    threat was changing from intercontinental ballistic missiles to tactical missiles like the SCUD-C.
    In 1995, DOD added the ALERT (Attack and Launch Early Reporting to Theater) system, a
    ground-processing center that uses DSP data, to augment its missile warning capabilities.

GAO Reports
GAO/NSIAD-92-39, GAO/NSIAD-93-148, GAO/T-NSIAD-94-108, GAO/T-NSIAD-94-164, GAO/NSIAD-94-
253




Page 16                                           GAO-03-825R Satellite Acquisition Programs
    Mission: Missile Warning
    Program: Space Based Infrared System-High (SBIRS-High)

Background information
The SBIRS system was initiated in 1994 as an effort to replace DSP, the current system used to detect
missile launches. Until recently, SBIRS had two components: SBIRS-High, which would consist of launch
detection satellites in geo-synchronous and highly elliptical orbits and SBIRS-Low which would consist of
launch detection and tracking satellites in low earth orbits. In 2000, SBIRS-Low was shifted back to the
Ballistic Missile Defense Organization, which is now the Missile Defense Agency. SBIRS-Low is primarily
focused on supporting the missile defense mission. SBIRS-High is being managed by the Air Force. It is
focused on missile warning, missile defense, technical intelligence, and battlespace characterization.
Architecture/Key Technologies
SBIRS-High features a mix of four geo-synchronous earth orbit (GEO) satellites and a spare, two highly
elliptical earth orbit (HEO) payloads, and associated ground hardware and software. SBIRS-High will have
both improved sensor flexibility and sensitivity over DSP. Sensors will cover short-wave infrared like its
predecessor, expanded mid-wave infrared and see-to-the-ground bands allowing it to perform a broader set
of capabilities as compared to DSP. Currently in the engineering, manufacturing, and development phase,
the first SBIRS-High HEO payload is scheduled for delivery in 2003 and the first GEO satellite is expected to
launch in 2006.
Users                Strategic and tactical forces across   Original cost         $4.1 billion
                     military services                      estimate/quantity: 5 satellites

Manager             Air Force                             Current                $8.5 billion
                                                          cost/quantity:         5 satellites

Contractors/      RDT&E --                               Total spent/           $3.0 billion
Contract type     SBIRS-High EMD Mod:                    % total spent          34.9%
                  Lockheed Martin Space Systems
                  Cost Plus Award Fee
                  October 1995
                  (note: contract has since changed)
Source: 12/31/2002 Selected Acquisition Report (all dollar amounts in 2003 dollars) and DOD provided
updates
Key Issues Affecting Program
   • Requirements definition
   • Technology immaturity
   • Unanticipated software growth
   • Significant cost growth
   • Schedule delay
   • Program instability
Chronology of Key Findings

•     1995-2001 GAO reports found the program was facing serious hardware and software design problems
      including sensor jitter, inadequate infrared sensitivity, and stray sunlight.

•     2001 DOD selected acquisition report stated the program experienced significant cost growth and
      schedule delays. Driven by poor cost and schedule performance and the contractor's projection of a
      fiscal year 2002 funding shortfall, the System Program Office and Lockheed Martin Space Systems
      Company (LMSSC) completed a preliminary Estimate at Completion (EAC) exercise in October 2001.
      The preliminary EAC results indicated potential cost growth in excess of $2 billion across the
      Engineering and Manufacturing Development contract and schedule delays of 12 to 36 months.




    Page 17                                        GAO-03-825R Satellite Acquisition Programs
•     2001 Secretary of Air Force reported a Nunn McCurdy Unit Cost Breach (10 U.S.C. 2433) exceeding 25
      percent to Congress. House Appropriations Committee report (House Report 107-298) cited scheduling,
      cost, and technology problems, including unanticipated software code growth, high number of
      discrepancy reports in ground mission software, unbudgeted payload redesign activities, notable
      schedule slippages.

•     2002 An Independent Review Team (IRT) was chartered by DOD to look at the reasons behind
      significant cost increases, and program management and execution problems affecting the program.
      Key root causes identified included: (1) the program was too immature to enter system design and
      development, (2) system requirements decomposition and flowdown were not well understood as the
      program evolved, and (3) there was a significant breakdown in execution management.

•     2002 IRT reported that in general, the complexity, schedule, and resources required to develop SBIRS
      were, in hindsight, misunderstood. This led to an immature understanding of how requirements
      translate into detailed engineering solutions. In addition, the requirements setting process was often ad
      hoc with many decisions being deferred to the contractor. While SBIRS-High adopted a more
      commercial approach to doing business within the defense related industry—the winning contractor
      assumed Total System Performance Responsibility (TSPR) for the integrated architecture—TSPR was
      not properly understood or implemented on the SBIRS-High program. The way TSPR was initially
      applied circumvented traditional program management and integrated product team roles and
      responsibilities.

•     2002 IRT also observed that there had been far too much instability on the program since the contract
      award. In a 5-year timeframe, the program underwent four major replanning efforts and four program
      directors. The team acknowledged that corrective actions were being taken on the program, but noted
      that there were still significant risks within the program, including risks related to the schedule for first
      high-elliptical orbit launch and ground software.

•     2002 Under Secretary of Defense for Acquisition, Technology, and Logistics certified SBIRS-High to
      Congress as essential to national security, no alternatives offering equal or greater military capability at
      same or lower costs existed, new cost estimates were reasonable, and management structure was
      adequate to manage and control unit costs.

•     2003 CRS reported that SBIRS-High has become controversial because of cost growth and schedule
      slippage caused by technical challenges that have been encountered in developing the sensors and
      satellites.

•     2003 GAO reported that three critical technologies—the infrared sensor, thermal management, and on-
      board processor—are now mature. When the program began in 1996, none of its critical technologies
      were mature. GAO could not assess design stability relative to best practices, because program was not
      tracking the number of releasable drawings and did not know how many total drawings were expected
      for SBIRS-High. However, GAO reported that design stability has been an issue for this program. GAO
      could not assess production maturity relative to best practices because the contractor does not use
      statistical process control to assure that production processes are stable.


GAO Reports
Three reports from 1995-2001 and GAO-03-476




    Page 18                                            GAO-03-825R Satellite Acquisition Programs
     Mission: Missile Warning/Tracking
     Program: Space Based Infrared System-Low (SBIRS-Low); now known as the Space Tracking and
     Surveillance System (STSS)

 Background information
 STSS started in 1990 as Brilliant Eyes, was transferred in 1993 from the Ballistic Missile Defense
 Organization (BMDO) to the Air Force and renamed the Space and Missile Tracking System (SMTS).
 In 1994, DOD terminated the SMTS program, consolidated its infrared space requirements, and
 selected SBIRS as a “system of systems” approach with two components: SBIRS-High, which would
 consist of launch detection satellites in geo-synchronous and highly elliptical orbits and SBIRS-Low,
 which would consist of launch detection and tracking satellites in low earth orbits. In 2000, SBIRS-
 Low was shifted back from the Air Force to the BMDO, which is now the Missile Defense Agency
 (MDA). In 2002, SBIRS-Low was renamed STSS. While STSS is primarily focused on supporting the
 missile defense mission, SBIRS-High is focused on missile warning, missile defense, technical
 intelligence, and battlespace characterization and is managed by the Air Force.
 Architecture/Key Technologies
 STSS is a capabilities-based development. STSS will build a few satellites at a time with later satellites
 being more capable than earlier ones. Using the advantage of a lower operational altitude, STSS will
 track tactical and strategic ballistic missiles against the cold background of space. The satellite’s
 sensors will operate across long and short-wave infrared, as well as the visible light spectrum. These
 wavebands allow the sensors to acquire and track missiles during the boost phase as well as in
 midcourse. STSS is expected to launch its first satellites in 2007.
 Users               Strategic and tactical forces across Original cost           Not Available
                     military services                       estimate/quantity:

 Manager             Missile Defense Agency                Current                Quantity undetermined
                                                           cost/quantity:         but more than 20
                                                                                  satellites would be
                                                                                  needed for worldwide
                                                                                  coverage
 Contractors/        Prime Contractor: Northrop            Total spent/           Not available
 Contract type       Grumman                               % total spent
                     Cost Plus Award Fee

 Source: GAO analysis.
 Key Issues Affecting Program
    • Requirements definition
    • Technology immaturity
    • Lack of competition
    • Cost growth
    • Inadequate analysis of alternatives
    Note: Problems mostly affecting past SBIRS-Low efforts
Chronology of Key Findings

 •     1997 GAO assessed various options for accelerating SBIRS-Low deployment date, which had
       been set for 2006, given congressional concerns about direction of the program. GAO reported
       that moving up the date by 3 or 4 years would result in high program risk because of the high
       degree of concurrent activities between planned flight demonstrations and development and
       fabrication of satellites. Additional funding might also be required. Moving up the date 2 years
       would reduce the need for concurrency, and therefore lower risks, but still require additional
       funds to account for schedule compression. Moving up the date 1 year would reduce
       scheduling risks and could require less funding. DOD subsequently changed deployment date
       to 2004.

 •     2001 GAO reported that SBIRS-Low acquisition schedule was at high risk of not delivering the
       system on time or at cost or within expected performance because satellite development and
       production, for example, was expected to be done concurrently. SBIRS-Low program also had
       high technical risks because some critical satellite technologies were judged to be immature
       for the current stage of the program, including scanning infrared sensor, tracking infrared


     Page 19                                          GAO-03-825R Satellite Acquisition Programs
      sensor, and technologies used to cool down satellite systems.

•     2001 GAO also reported that DOD was not adequately analyzing or identifying cost-effective
      alternatives to SBIRS-Low that could satisfy critical missile defense requirements, such as a
      Navy ship-based radar capability. At the time, other studies supported the possibility that other
      types of sensors could be used to track missiles in midcourse of their flight and to cue
      interceptors.

•     Subsequent to 2001 GAO report, DOD restructured the SBIRS-Low program because of cost
      and scheduling problems, and put the equipment it had partially built into storage. In 2000, the
      Congress directed the Air Force to transfer the program to the Ballistic Missile Defense
      Organization (now MDA). DOD was also directed to study alternatives (such as ground-based
      radar systems) to SBIRS-Low.

•     May 2003 GAO reported that DOD believed that a discrimination capability (that is, the ability to
      detect and track multiple objects and differentiate the threatening warhead from decoys) would
      significantly enhance a space-based missile tracking system like STSS. However, DOD deferred
      plans to achieve this capability for STSS given technical challenges. GAO also reported that
      DOD's unwillingness to relax requirements for capabilities such as discrimination during earlier
      SIBRS-low efforts contributed to cost and scheduling problems.

•     May 2003 GAO reported that in taking on the restructured SBIRS-Low program, now called
      Space Tracking and Surveillance System (STSS), MDA purposely set out to adopt a strategy
      that would evolve STSS over time, deferring some requirements, and calling for competition in
      development of sensors aboard the satellite. However, recent decisions were limiting MDA’s
      ability to achieve its original goals as well as knowledge that could be gained from its satellite
      demonstrations. For example, plans were eliminated to have contractors compete for
      production of the sensor to detect missile launches. If it chose to keep STSS as part of the
      missile defense system, STSS could end up being more expensive in the future because MDA
      could be locked into a single contractor for the design and product of the larger constellation
      of satellites.

•     May 2003 GAO reported that MDA was focused on launching its satellites by 2007 in order to
      assess its performance in the missile defense tests. However, it made this decision without
      completing its assessment of the working condition of the equipment it planned to assemble
      and use to demonstrate STSS capabilities. Also, MDA was not considering other approaches
      to demonstrating capabilities because they would not allow STSS to participate in 2006-2007
      missile defense tests. These include (1) launching satellites in 2008 instead of 2007 and (2)
      dropping effort to demonstrate capabilities with legacy satellites that were based on older
      technology and focusing instead on developing new technology. Both approaches would
      enable MDA to inject more competition into STSS program, reduce scheduling risks, and
      demonstrate more capabilities. However, they also have drawbacks; primarily, they would
      delay MDA’s ability to make informed tradeoffs on missile defense sensors.


GAO Reports
GAO/NSIAD-97-16, GAO-01-6, GAO-03-597




    Page 20                                           GAO-03-825R Satellite Acquisition Programs
Mission: Current Communication Systems
Programs: Defense Satellite Communication System (DSCS) and Milstar


Background information
DSCS and Milstar are current DOD communication satellite systems that provide protected
communications to support globally distributed military users. The Air Force began launching the
current DSCS satellites in 1982. The Air Force initiated the Milstar program in 1981, but the first
Milstar satellite was launched in 1994 and the last one in April 2003.

Architecture/Key Technologies
Currently, ten DSCS satellites and five Milstar satellites operate in geo-synchronous orbit. The DSCS
satellites utilize super high frequency transponder channels that provide the highest data capability,
but require large antennas (4 to 60 feet) for receiving large amounts of data. The Milstar satellites
utilize extremely high frequency transponder channels that provide low to medium data rate
communications but require small antennas (5 inches to 10 feet) and provide communications that
are more survivable and resistant to jamming than the DSCS. The Milstar satellites are launched
onthe Titan IV and weigh about 10,000 pounds. The last two DSCS satellites will be launched by the
EELV and weigh about 2,500 pounds.
Users                Strategic and tactical forces across    Original cost/    Not Available – Milstar
                     military services                       quantity:
                                                                               $1.7 billion -DSCS
                                                                               14 satellites

Manager           Air Force                               Current cost/      Not Available – Milstar
                                                          quantity:
                                                                             $2.7 billion-DSCS
                                                                             14 satellites

Contractors/      RDT&E --                                Total spent/%      Not Available – Milstar
Contract type     Milstar II Satellites:                  total spent        and DSCS
                  Lockheed MSL & Space Co
                  October 1992
                  Cost plus award fee

                  DSCS III Production:
                  General Electric Co
                  November 1984
                  Firm fixed price

Source: Milstar – 12/31/1999 Selected Acquisition Report and DSCS – 9/30/91 (all dollar amounts in
2003 dollars)
Key Issues Affecting Programs
• Cost growth
• Requirements changes
Chronology of Key Findings
• 1986 GAO reported that in late 1982 the Air Force realized that the Milstar configuration could
    not be achieved given existing schedule and budgetary constraints. As a result, the program
    office began rescoping the program to conform to the budgetary constraints in a design-to-budget
    exercise. In 1983 the program office rescoped the program for a second time—this time adding
    requirements due to user input and concerns.

•   1986 GAO reported that DOD revised the acquisition strategy from a total system integration
    package to an associate contractor approach because the teaming of TRW and Hughes (they had
    previously performed the majority of extremely high frequency work) presented an
    insurmountable challenge to other contractors. Under the associate contractor approach, rather
    than contracting for the whole system with a prime contractor, the government contracts with
    different firms for components of the system.



Page 21                                           GAO-03-825R Satellite Acquisition Programs
•   1992 GAO reported that the National Defense Authorization Act for FY1991 directed the
    Secretary of Defense to develop or carry out a plan for either a restructured Milstar or an
    alternative advanced communications satellite program that would substantially reduce program
    costs. DOD chose to restructure the program and lower costs by reducing the constellation size
    from 8 to 6 satellites, the number of control stations from 25 to 9, and the number of terminals
    from 1,721 to 1,467. To provide greater system utility to tactical forces, DOD decided to add a
    medium data rate capability to the satellite (this would increase the volume of information that
    could be processed through the satellites).

•   1992 GAO reported that some satellite issues related to the Army’s tactical use of Milstar had not
    been resolved. For example, formal agreement had not been reached on sufficient capacity that
    the Army claimed it needed. While DOD expected the medium data rate capacity to allow about
    40 million bits of information to be passed through the satellite each second, Army
    representatives stated that to satisfy critical Army communication requirements, at least 34.4
    million bits per second would be needed—about 86 percent of the total planned throughput
    capacity for each satellite. After considering the multiservice aspects of the Milstar program, the
    Army concluded that to justify its participation in the Milstar program, the minimum throughput
    capacity acceptable would be 30.7 million bits per second—about 77 percent of the total planned
    capacity for each satellite. The remaining capacity would be allocated among the Air Force, the
    Navy, and the Marine Corps.

•   1993 GAO reported that in 1991 as directed by Congress, DOD published its military satellite
    communications architecture study that identified 12 alternatives for various communications
    approaches that ranged from using all commercial to all military satellite programs. From among
    the 12 alternatives, DOD selected an all military approach consisting of existing systems. GAO
    reported that DOD did not select one alternative, the dual common bus that provided a better
    way to demonstrate advanced technologies.

•   1994 GAO reported that in response to our 1993 report, DOD agreed with the need to move away
    from customized, unique busses toward common busses and stated that the most cost effective
    approach for inserting modern technology was to begin developing an advanced, lower cost,
    lower weight payload capability.

•   1994 GAO reported that congressional directives and national policy emphasized greater use of
    commercial satellite services to reduce costs of military satellite services. However, a new
    criterion used by DOD for establishing communication requirements reduced general purpose
    requirements by over 40 percent. This change has reduced the potential for using commercial
    satellite communication services. (It should be noted, according to DOD officials, that there
    were some pointed objections in the past year to the DOD's use of commercial satellite systems
    such as INTELSAT and INMARSAT because they were "part owned" by countries such as Iraq and
    Iran.)

•   1997 GAO reported that during the next decade, DOD anticipated a significant increase in its
    high-capacity satellite communications (DSCS) because of the shift in the national military
    strategy and availability of advanced technologies. DOD planned to replenish the existing DSCS
    constellation during fiscal year 1997-2003 with the five satellites remaining in inventory. DOD
    was modifying four of these satellites to double each satellite’s capacity from 100 megabits per
    second (MBPS) to about 200 MBPS and to replace potentially defective parts with improved
    electronic components. Even so DSCS’s replenishment satellites were not expected to keep pace
    with the projected requirements, thus an alternative would have been to lease satellite
    communications from commercial providers. However, according to DOD analysis, commercial
    leasing was more costly than acquiring equivalent commercial like capabilities.

•   1999 GAO reported that in 1998 a draft operational test report identified four limitations
    associated with Milstar I capabilities to support strategic missions. While DOD had identified
    corrective actions, final resolutions were dependent on approval of requirements, verification
    through testing, a certification process, or obtaining necessary funds. Regarding tactical
    missions, the Air Force had encountered schedule delays related to software development for a
    critical Milstar component—called the automated communications management system—that



Page 22                                           GAO-03-825R Satellite Acquisition Programs
    could adversely affect Milstar II’s timely support to tactical forces.

•   2003 GAO reported that in 2000, DOD recognized the need to address the capabilities and
    coverage gap caused by the April 1999 Milstar launch failure and adopted a high-risk accelerated
    schedule for the Advanced Extremely High Frequency (AEHF) satellite system.

GAO Reports
GAO/NSIAD-86-45S-15,GAO/NSIAD-92-121, GAO/T-NSIAD-92-39, GAO/NSIAD-94-48, GAO/NSIAD-97-
159, GAO/NSIAD-99-2, GAO/NSIAD-93-216, GAO/T-NSIAD-94-108, GAO/T-NSIAD-94-164, GAO/NSIAD-
94-253




Page 23                                             GAO-03-825R Satellite Acquisition Programs
Mission: Planned Communication Systems
Programs: Advanced Extremely High Frequency (AEHF) Communications Satellite, Wideband
Gapfiller Satellite (WGS), and Advanced Wideband Satellite (AWS)


Background information
The current military satellite communications network represents decades-old technology. To meet
the heightened demands of national security in the coming years, newer and more powerful systems
are being developed. The AEHF is a satellite system intended to replace the existing Milstar system
and to be DOD’s next generation of higher speed, protected communication satellites. WGS will
augment communications services currently provided by the Defense Satellite Communications
System (DSCS), which provides super high frequency wideband communications. WGS will provide
an interim solution to assure DOD’s existing worldwide communication support is maintained until
the development and deployment of the Advanced Wideband Satellite System (AWS) also known as
TSAT. AWS is intended to become the cornerstone of DOD’s future communications architecture
that includes supplementing the AEHF system and replacing the WGS system.
Architecture/Key Technologies
AEHF started in 1998 and the constellation will consist of three satellites in low inclined geo-
synchronous orbits (requirements still call for five satellites-four operational and one spare) that can
transmit data to each other via cross-links. AEHF entered the Engineering Manufacturing
Development/Production acquisition phase in November 2001. Each satellite will be launched with
the Evolved Expendable Launch Vehicle (EELV); the initial launch is planned for December 2006.

WGS started in 2001 and the constellation was planned to have 3 satellites, but the program recently
added two more satellites because the initial capability of AWS, which is intended to replace AEHF
and some aspects of WGS, may not be able to support all the super high frequency services that the
users require. Thus additional WGS spacecraft are being acquired to bridge this gap. WGS combines
commercial capabilities—phased array antennas and digital signal processing technology—into a
flexible architecture that will allow WGS to evolve and satisfy the growing wideband communication
requirements of the warfighter. WGS is currently in full rate production with the first satellite
scheduled for a June 2004 launch aboard an EELV vehicle.

AWS’ final configuration has not yet solidified under ongoing milsatcom transformational efforts, but
the concept is one of applied technology and engineering that will remove capacity as a constraint on
warfare communications. AWS plans to take advantage of the commercial and government
technology advances of the first half of this decade to meet expected needs. Some of the
technologies that AWS plans to use are laser crosslinks, space-based data processing and routing
systems, and highly agile multibeam/phased-array antennas. DOD plans for the program to enter
product development in October 2003 with the first satellite to be launched at the end of 2009. A key
program review is planned for November 2004 to determine if sufficient technology development has
occurred to warrant continuing the program at its planned schedule or whether the 4th and 5th AEHF
satellites should be acquired.
Users                Military Strategic and Tactical       Original cost/    $5.4 billion - AEHF
                                                           quantity:         5 satellites

                                                                               $1.0 billion – WGS
                                                                               3 satellites




Page 24                                            GAO-03-825R Satellite Acquisition Programs
Manager             Air Force                               Current cost/      $4.8 billion -AEHF
                                                            quantity:          3 satellites

                                                                               $1.5 billion -WGS
                                                                               5 satellites

Contractors/          AEHF’s system development and           Total spent/         $1.1 billion - AEHF
Contract types        demonstration: Lockheed Martin          % total spent        21.2%
                      November 2001
                      Cost plus award fee                                          $.28 billion – WGS
                      WGS’ RDT&E and procurement:                                  17.5%
                      Boeing Satellite Systems
                      January 2001
                      Firm fixed price
Source: AEHF and WGS -12/31/2002 Selected Acquisition Report (all dollars amounts in 2003 dollars)
Key Issues Affecting Programs
• Cost growth
• Scheduling risks
• Requirements Changes
• Immature technology
Note: Problems reported primarily affect AEHF.
Chronology of Key Findings
AEHF
• 2002 DOD selected acquisition report commented on funding cuts. In fiscal year 2002, AEHF
    sustained a $70 million fiscal year 2002 congressional reduction to RDT&E funding. The AEHF
    space segment was a firm fixed price contract. According to DOD, this sizable reduction would
    likely result in a six-month launch delay to satellites l-3, breach of initial operational capability
    and a significant overall program cost increase.

•   In 2002, the Deputy Secretary of Defense decided to change the acquisition strategy of AEHF
    from a 5-satellite program to a 3-satellite program. Under the revised strategy, full capability may
    no longer be satisfied by an AEHF-only constellation. (According to DOD officials, the current
    DOD plan is to meet the full AEHF operational capability requirement with three AEHF
    spacecraft and a combination of one or two AWS spacecraft and zero, one or two Advanced Polar
    System spacecraft – this plan is driving the AWS first launch date of late 2009.)

•   2003 GAO reported in the early phases of the program, DOD substantially and frequently altered
    its requirements; the system design changed. While considered necessary, some changes
    increased costs by hundred of millions of dollars and caused scheduling delays.

•   2003 GAO reported that in December 1999, the two contactor teams that had been awarded
    engineering manufacturing and development contracts a few months earlier offered to form a
    “national team” to accelerate the AEHF program. DOD agreed to the national team proposal
    even though DOD recognized it meant lack of benefits from competition.

•   2003 GAO reported that once DOD decided to accelerate its plans to build the satellites, the
    contractors proposed and DOD agreed to support a high-risk schedule that turned out to be
    overly optimistic and highly compressed—leaving little room for error and depending on a chain
    of events taking place at certain times. Substantial delays occurred when some events, such as
    the award of the contract or the availability of equipment, did not occur on time. In commenting
    on the AEHF report, DOD noted the decision to accelerate the program was based on a satellite
    constellation gap caused by the loss of a Milstar satellite. DOD also stated many in DOD
    expressed concern about the risks, but believed the risk was acceptable based on information
    known at the time.

•   2003 GAO reported that at the time DOD decided to accelerate the program, it did not have the
    funding needed to support the activities and manpower needed to design and build the satellites



Page 25                                            GAO-03-825R Satellite Acquisition Programs
    quicker. The lack of funding also contributed to schedule delays, which in turn, caused more
    cost increases.

•   2003 GAO reported that the program demonstrated most technology knowledge at development
    with 11 of 12 critical technologies having reached maturity according to best practice standards.
    However, the program office did not project achieving maturity on the remaining technology—
    the phased array antenna— by the design review in June 2004 and did not have a backup
    capability. Program officials assessed the software development for the mission control system
    as moderate risk and have developed a risk mitigation strategy. However, until these mitigation
    actions are completed, software may be at risk for unplanned cost and schedule growth.

•   2003 GAO reported that significant design changes affected cost and delayed the AEHF schedule.
    For example, software growth occurred as more requirements were added and as the design of
    the system stabilized. These increases in software requirements for both the satellite and the
    mission control segments increased the software cost estimate by over 77 percent or about $223
    million.

•   2003 GAO reported in the area of production maturity that any future problems with the
    fabrication of the communications and transmission security microprocessor, a component
    designed to limit access to satellite transmissions to authorized users, could delay the production
    schedule and the launch of the first satellite planned for December 2006.

WGS
• 2003 GAO reported that WGS’ critical technologies, design, and production processes are mature.
  DOD plans to rely on commercial technologies that will not require extensive product
  development. Program officials were concerned about WGS production risk that was to be
  reduced during production of commercial satellite orders. However, due to drastic loss of
  commercial satellite orders, only one commercial satellite with similar technologies as WGS is
  now leading WGS in the manufacturing schedule. Recently identified problems found on the
  “leader” program will impact WGS manufacturing schedule and might result in a first launch
  schedule delay of four to six months.

•   2003 GAO reported that the 4th and 5th satellites have been directed by DOD to be launched in
    fiscal year 2009 and fiscal year 2010 respectively. These dates are outside the allowable dates of
    the WGS contract options clauses and will require renegotiation to finalize their cost. These later
    launch dates could result in cost increases to compensate for loss of learning curve from over a
    three-year break in production, parts obsolescence, and inflation.

AWS
• 2003 GAO reported that AWS is scheduled to enter product development with only one of its five
  critical technologies mature. The four immature technologies are scheduled to reach maturity by
  January 2006, more than two years after development start. Three of the four technologies have
  a backup technology in case of development difficulties. However, the Single Access Laser
  Communications technology has no backup and according to program officials any delay in
  maturing this technology would result in a slip in the expected launch date.

•   2003 GAO reported that the program plans an aggressive development cycle even though the
    AWS is expected to provide a transformational leap in satellite communications capability.

GAO Reports
GAO-03-476, a report that covers multiple systems, and an AEHF report in 2003.




Page 26                                           GAO-03-825R Satellite Acquisition Programs
Mission: Navigation
Program: NAVSTAR Global Positioning System (GPS)


Background information
GPS is a space-based radio-positioning system nominally consisting of a 24-satellite constellation that
provides navigation and timing information to military and civilian users worldwide. The full
constellation of GPS satellites has been operational for 7 years. Total program investment over a 43-
year period (through 2016) is estimated at $18.4 billion.

Architecture/Key Technologies
GPS satellites, in one of six medium earth orbits, circle the earth every 12 hours emitting continuous
navigation signals on two different frequencies. In addition to the satellites, the system consists of a
worldwide satellite control network and GPS receiver units that acquire the satellite’s signals and
translate them into precise position and timing information. Four generations of GPS satellites have
flown in the constellation: the Block I, the Block II, the Block IIA, and the Block IIR. Block I
satellites were used to test the principles of space-based navigation, and lessons learned from these
11 satellites were incorporated into later blocks. Block II, IIA and IIR satellites make up the current
constellation. Block IIRs began replacing older Block II/IIAs in 1997. There are currently eight Block
IIR satellites on orbit and they have reprogramable satellite processors enabling problem fixes and
upgrades in flight. Up to eight IIR satellites are being modified to radiate both a new civil signal
(L2C) and a new military signal (M-Code) for a more robust and capable signal structure. The first
modified Block IIR (designated as the IIR-M) is planned for launch in 2004. Block IIF satellites are the
next generation of GPS satellites. Block IIF provides all the capabilities of the previous blocks with
some additional benefits as well. Improvements include an extended design life of 12 years, faster
processors with more memory, and a new civil signal on a third frequency. The first Block IIF
satellite is scheduled to launch in 2006. The Delta II has launched the Block II, IIA, and IIR satellites,
and the EELV (Delta IV and Atlas V) will launch the Block IIF satellites.

GPS Blocks IIF and IIR
Users            Military and Civilian                      Original cost/     $5.3 billion
                                                            quantity:          33 satellites
Manager            Air Force                                Current cost/      $5.8 billion
                                                            quantity:          37 satellites

Contractors/       GPS IIF OCS/MOSC development:            Total spent/       $2.3 billion
contract type      BOEING NORTH AMERICAN,                   % total spent      39.7%
                   April 22, 1996
                   Cost Plus Award Fee

                  Block IIR SAT development:
                  Lockheed Martin
                  August 2000
                  Firm fixed price/cost plus incentive
Source: 12/31/2002 Selected Acquisition Report (all dollar amounts in 2003 dollars) and DOD
provided updates
Key Issues Affecting Program
•   Cost Growth
• Schedule risk
• Component reliability problems




Page 27                                             GAO-03-825R Satellite Acquisition Programs
Chronology of Key Findings
• 1980 GAO reported program cost (to acquire and maintain the program through the year 2000)
   increased from $1.7 billion to $8.6 billion due largely to estimates not previously included for
   replenishment satellites, launches, and user equipment. Beginning in 1983, DOD planned to use
   the Space Shuttle to launch the NAVSTAR satellites. In the event of Space Shuttle problems,
   Atlas or Titan launches would need to be used as an alternative at an additional cost of $12
   million to $38 million per satellite launch. The original full operational capability date of August
   1985 slipped 25 months.

•   1980 GAO reported that survivability of GPS satellites was a concern due to Soviet testing of an
    anti-satellite system and reliability of GPS satellite atomic clocks emerged during the
    demonstration and validation phase when 80 percent either failed or acted abnormally.

•   1983 GAO reported that the multiyear procurement estimate of $1.4 billion was likely understated
    because indications are that the prime contractor would propose a higher cost and that multiyear
    procurement savings were not correctly calculated using the present value analysis method.
    System design changes were being considered that would add considerable cost to the program.
    The program office expressed concern about the lack of backup launch vehicles in the event of
    problems with the Space Shuttle.

•   1983 GAO reported that integration testing of the spacecraft with the qualification test vehicle
    was scheduled to begin 7 to 18 months after the planned March 1983 award date of the
    production contract. The consequences of concurrency could lead to design changes and
    additional costs. The program office was considering two design changes to the production
    spacecraft, a W-sensor and enhancements related to GPS survivability.

•   1987 GAO reported that following the Challenger accident in January 1986, the Air Force reduced
    the number of GPS satellites planned for launch on the Space Shuttle from 28 to 8, because it had
    awarded a contract to McDonnell Douglas to build and launch 7 medium expendable launch
    vehicles with an option to purchase up to 13 more.

•   1987 GAO reported GPS acquisition changes after the Space Shuttle Challenger’s accident: (1)
    NASA slipped the date for the first launch schedule for the Block II satellites from January 1987
    to June 1989, (2) since the GPS program was in the production and deployment phase, the Air
    Force began stretching out the procurement process, and (3) the Air Force postponed a planned
    buy of 20 Block II-R replenishment satellites because the program office’s estimated need date
    for these replenishment satellites had slipped 3 years.

•   1987 GAO reported that since development of GPS user equipment (consists of 1-,2-, and 5-
    channel radio receiver sets) was almost 3 years behind schedule due to technical problems, the
    Challenger loss caused no further adjustment to user equipment production.

•   1987 GAO reported that even though user equipment technology was changing rapidly with
    miniaturized and less costly sets currently available from several manufacturers, program office
    officials expressed concern about incurring substantial costs by changing to the new equipment
    and that the new equipment would not meet military specifications.

• 1991 GAO reported that DOD postponed full-rate production for receiver sets from March 1989 to
  September 1991 due to lingering receiver set reliability problems and reevaluation of program
  requirements. During development testing the Army discovered reliability problems with the
  one- and two-channel GPS receiver sets. One 5-channel set experienced a number of failures
  during multiservice testing and this led to a marginal rating of all 5-channel receivers.
GAO Reports
GAO/PSAD-80-21, GAO/MASAD-83-9, GAO/NSIAD-87-209BR, GAO/NSIAD-91-74




Page 28                                            GAO-03-825R Satellite Acquisition Programs
Mission: Weather
Programs: Defense Meteorological Satellite Program (DMSP) and National Polar-orbiting Operational
Environmental Satellite System (NPOESS)

Background information
Since the 1960s, the U.S. has operated two separate polar-orbiting meteorological satellite systems.
These systems are known as the Polar-orbiting Operational Environmental Satellites (POES),
managed by the National Oceanic and Atmospheric Administration (NOAA), and the Defense
Meteorological Satellite Program (DMSP), managed by DOD. These satellites obtain environmental
data that are the predominate input to numerical weather prediction models—all used by weather
forecasters, the military and the public. Polar satellites also provide data used to monitor
environmental phenomena as well as data that are used by researchers for a variety of other studies,
such as climate monitoring. Given the expectation that converging the POES and DMSP program
would reduce duplication and result in sizable cost savings, a May 1994 Presidential Decision
Directive required NOAA and DOD to converge the two satellite programs into a single program
capable of satisfying both military and civilian requirements. The converged program is called the
National Polar-orbiting Operational Environmental Satellite System (NPOESS).

Architecture/Key Technologies
DMSP satellites circle the Earth at an altitude of about 500 miles in a near-polar, sun-synchronous
orbit. Each scans an area 1,800 miles wide and covers the entire Earth in about 12 hours. Pointing
accuracy of the satellites is maintained by four reaction wheel assemblies that provide three-axis
stabilization. The primary sensor on board is the Operational Linescan System that observes clouds
via visible and infrared imagery for use in worldwide forecasts. A second important sensor is the
Special Sensor Microwave Imager, which provides all-weather capability for worldwide tactical
operations and is particularly useful in typing and forecasting severe storm activity. DMSP satellites
also carry a suite of additional sensors, which collect a broad range of meteorological and space
environmental data for forecasting and analysis. Historically DMSP satellites have been launched on
Titan II boosters from Vandenberg Air Force Base with the most recent launch occurring on
December 12, 1999. One more DMSP satellite will be launched on a Titan II booster. The remaining
four DMSP satellites will be launched on Evolved Expendable Launch Vehicle (EELV) boosters from
Vandenberg Air Force Base. There are two operational DMSP satellites.

NPOESS program acquisition plans call for the procurement and launch of six NPOESS satellites over
the life of the program and the integration of 14 instruments, including 12 environmental sensors.
Together, the sensors and spacecraft receive and transmit data on atmospheric, cloud cover,
environmental, climate, oceanographic, and solar-geophysical observations. Additional instruments
are carried to support search and rescue efforts and data collection from a variety of globally
deployed transmitters. NPOESS will be a launch-on-demand system, and satellites must be available
to back up the planned launches of the final POES and DMSP satellites. The first NPOESS satellite—
designated C1—is scheduled for delivery in late 2009, according to Air Force officials.

Users             DMSP focuses on military users.         Original cost           $5.6 billion
                  NPOESS will be available to             estimate/quantity:      6 satellites
                  military, civil, and international                              (NPOESS only)
                  users.

Manager           DMSP is managed by the Air Force.       Current                 $6.1 billion
                  NPOESS is managed tri-agency            cost/quantity:          6 satellites
                  integrated program office (DOD,                                 (NPOESS only)
                  DOC, NASA), located within NOAA.




Page 29                                           GAO-03-825R Satellite Acquisition Programs
Contractors/       Engineering and Manufacturing           Total spent/%           $857.9 million
Contract type      Development/Production and              total spent             14.0 percent
                   Operations                                                      (NPOESS only)
                   Northrop Grumman, August 2002
                   Cost plus award fee/performance
                   incentive, Fixed price incentive
                   production options, Fixed price
                   operation and support options

Source: 12/31/2002 Selected Acquisition Report (All dollar amounts in 2003 dollars) and DOD
provided updates
Key Issues Affecting Program
•   Requirements definition/meeting user needs
•   Technical/scheduling risks
Note: Problems reported affect NPOESS rather than DMSP

Chronology of Key Findings

•   1987 GAO reported that the program could save millions of dollars by converging NOAA and
    DOD weather satellite programs, which would reduce the number of satellites from four to three.

•   1987 GAO reported that NOAA and Air Force requirements were diverging in several respects,
    making the effort to converge the two programs more difficult. For example, NOAA wanted to
    change its approach from using expendable convention satellites to installing sensors on
    serviceable platforms. The Air Force plans to continue using its current, conventional design of
    DMSPs (expendable and rocket launched) into the late 1990s before redesigning a new system.
    NOAA and Air Force also differed on quality standards for electronic components.

•   1995 GAO reported that while the planned delivery date for the first satellite was 2004,
    transferring two DMSP satellites to NOAA might require that delivery be accelerated to as early
    as 2001. Such an action would increase both technical and schedule risks and require substantial
    increases in the convergence program’s near-term budget.

•   1995 GAO reported that interchangeable components between DMSP and NOAA satellites were
    less than earlier estimated. Of 63 platform components, only 15 (24 percent), such as the inertial
    measurement unit and earth and sun sensing equipment, could be used on NOAA satellites
    without modifications. Another 13 components (21 percent), such as the power supply
    electronics, battery charge assembly, and solar array electronics, could be used if they were
    modified, at additional cost. The remaining 35 components (55 percent) were either substantially
    different or unique and had no value to NOAA. Additionally, DMSP mission sensors could not be
    used because they are unique and would not satisfy NOAA’ s requirements.

•   1997 NPOESS integrated program office determined that there were scheduling, technical and
    cost risks associated with the interface data processing segment and overall system integration
    and with the space segment.

•   2001 DOD selected acquisition report commented on schedule delays being reported to Congress.
    Specifically, DOD stated that the Joint Agency Requirements Group final review of the updated
    NPOESS requirements took longer than planned. As a result the engineering and manufacturing
    development request for proposal release, initiation of the life cycle cost estimate update, and the
    final release of the technical requirements document were delayed. The milestone decision was
    moved from February 2002 to August 2002.

•   2002 GAO reported that technical, schedule, and cost risks were being reduced by deferring
    development of requirements, initiating earlier development of sensors and/or relying on existing
    versus new technology, conducting ground-based demonstrations of data processing system, and
    using aircraft to test sensors, among other activities.

•   2002 GAO reported that processing centers face challenges in handling the massive increase in



Page 30                                            GAO-03-825R Satellite Acquisition Programs
    the volume of data that would be sent by the new satellites. Whereas current polar satellites
    produce approximately 10 gigabytes of data per day, NPOESS is expected to provide 10 times
    that amount. Agencies involved in the program were working to address this problem by
    improving data management infrastructure, but more could be done to coordinate and further
    define these efforts.

•   2003 GAO reported that NPOESS entered product development in August 2002 with most of its
    technologies mature. The program also completed a significant portion of the engineering
    drawings well in advance of the design review; however, the total number has yet to be
    determined. Over 5 years ago, program officials considered the program to have several high-risk
    areas. Since then, officials have implemented several efforts, which are expected to reduce all
    program areas to low risk by the first NPOESS launch, currently scheduled for the 2008- 2009
    time frame.


GAO Reports

GAO/NSIAD-87-107, GAO/NSIAD-95-87R, GAO-02-684, GAO/NSIAD-94-253




Page 31                                          GAO-03-825R Satellite Acquisition Programs
Mission: Launch
Programs: Titan IV and Evolved Expendable Launch Vehicle (EELV)

Background information
Over the years DOD has used a fleet of expendable launch vehicles—Delta, Atlas, and Titan—to
transport a variety of satellites into space. The Titan IV is a heavy-lift space launch vehicle used to
carry DOD payloads such as Defense Support Program (DSP) and Milstar satellites into space. The
Titan IV was designed to complement the National Space Transportation System (Space Shuttle) and
serve as an independent vehicle system to assist in assuring DOD access to space. Air Force
contracted for a total of 41 Titan IV vehicles with the last launch scheduled for 2004. DOD considers
these launch vehicles to currently operate at or near their maximum performance capacity and to be
very costly to produce and launch. Since 1987, the government has made several attempts to develop
a new launch vehicle, but these attempts were canceled either because of funding issues, changing
requirements, or controversy regarding the best solution.

In 1994, by congressional direction, DOD developed a space launch modernization plan that led to the
initiation of the Evolved Expendable Launch Vehicle (EELV) program. With EELV, the Air Force
hoped to cut its heavy-lift mission costs by about 50 percent and its overall launch mission costs by at
least 25 percent. The intent of the EELV program was to develop a family of launch vehicles, using
common components, standard services and supporting systems that would significantly reduce the
life-cycle cost compared to today's systems. Due to a sudden projected increase in commercial
demand that was forecast in 1997, Air Force approved a plan to develop the Atlas V and Delta IV
EELVs, rather than just one of them. The additional cost of maintaining two EELV launch
infrastructures was intended to be offset by more competitive pricing. The successful launches of the
medium-lift models of the Atlas V and Delta IV rockets in 2002 fulfilled part of the engineering,
manufacturing, and development segment of the Air Force EELV contract to Boeing and Lockheed
Martin. In the initial launch service award (1998) Boeing was awarded 19 launch services and
Lockheed Martin was awarded 9 launch services. Current launch services awards have been modified
after the 2000 EELV restructure to 19 missions for Boeing and 7 missions for Lockheed Martin. Both
contractors plan to deploy their commercial launch service to launch both commercial and
government missions.

Architecture/Key Technologies
Each Titan launch vehicle is made up of a core, a fairing, and a set of solid rocket motors. Solid
rocket motors along with liquid rockets in the core provide the propulsion for the Titan IV. The Titan
IV may also have an optional upper stage to provide the additional booster capacity that some
satellite payloads require to reach their intended orbit. The EELV will use the Delta IV launch vehicle
built by Boeing and the Atlas V built by Lockheed Martin. Boeing developed the RS-68 liquid-oxygen/
liquid-hydrogen main engine, for the Delta IV, which is the first cryogenic engine built in the United
States since the Space Shuttle Main Engine. Lockheed Martin’s main engine, the RD-180, is a liquid-
oxygen/kerosene engine developed in a joint venture between NPOEnergomash, a Russian company,
and UTC/Pratt and Whitney.


Users              Military satellites are launched by     Original cost/     $14.7 billion - EELV
                   Titan IV                                quantity:          181 launch vehicles
                   Military and commercial satellites
                   are launched by EELV                                       $3.2 billion - Titan IV
                                                                              10 launch vehicles
Manager            Air Force                               Current cost/      $18.0 billion -EELV
                                                           quantity:          182 launch vehicles

                                                                              $20.1 billion – Titan IV
                                                                              39 launch vehicles




Page 32                                            GAO-03-825R Satellite Acquisition Programs
Contractors/       EELV-Boeing and Lockheed Martin       Total spent/     $2.0 billion - EELV
Contract type      for EMD and initial launch services   % total spent    9.7%
                   RDT&E: Other Transaction
                   Launch Services: Firm Fixed Price
                   (note: contract has since changed)
                   Titan IV- Production: Lockheed                         $16.4 billion – Titan IV
                   Martin                                                 90.9 %
                   April 1996
                   Fixed-price incentive fee
Source: Titan 12/31/2001 and EELV 12/31/2002 Selected Acquisition Report (all dollar amounts in
2003 dollars)
Key Issues Affecting Programs
• Schedule risk with transition to new launch vehicle
• Acquisition strategy changed DOD oversight role
• Cost reductions uncertain
Note: Problems report affect EELV rather than Titan IV
Chronology of Key Findings
Titan IV
•   1991 GAO reported that slowing down Titan IV production may eventually result in an overall
    increase in program costs, but that budgetary requirements may be reduced by $47 million in
    FY1992 and $11 million in FY1993.

•   1991 GAO reported that the Air Force planned to slowdown production of the Titan IV launch
    vehicle to better synchronize production and launch schedules. This restructuring of the
    program would result in slowing down production from 8-10 vehicles per year to not more than 6
    vehicles per year beginning in 1992. The Titan IV has an optional upper stage, the Inertial Upper
    Stage (IUS) and the newer Centaur, to provide addition booster capacity for some satellite
    payloads like the DSP. However, the DSP satellites to be boosted by the IUS were not under
    contract and their launch was expected to be delayed. In addition, planned production of the IUS
    vehicles for 1992 would likely slip to 1995.

•   1991 GAO reported that numerous problems had delayed the transition of the solid rocket motor
    upgrade program from development and testing to production. For example, during the first
    static firing test of the rocket motor upgrade the test motor exploded which would likely result in
    at least a one-year delay in production from October 1991.

•   1993 DOD Bottom-Up Review noted that there are two types of requirements for space launch:
    (1) performance—the ability to deliver a satellite reliably to a specific orbit, and (2) operational
    flexibility. This review reported that current launch systems generally met the first objective but
    not the second. Performance and flexibility was inadequate because of (1) the need to sustain
    three separate launch teams and associated equipment; (2) the aging and obsolescence of major
    ELV components; and (3) continued dependence on outdated launch vehicle production lines and
    manpower-intensive launch processes. This report also found that there was overcapacity in the
    American space launch industry. As a result, the three manufacturers operated at less than 50%
    capacity, which raised the unit cost of each launch vehicle. The ability to sustain three launch
    suppliers over the long term was in doubt. Foreign competition was also a factor. DOD examined
    three options to address these issues: (1) extend the life of the current launch vehicle fleet to the
    year 2030; (2) develop a new family of expendable launch vehicles to replace the current fleet
    starting in 2004; and (3) pursue a technology-focused effort to develop a reusable launch vehicle.
    Option 1 was selected as the most cost-effective option in the near-term while meeting DOD’s
    requirements.

•   1994 DOD Space Launch Modernization Plan sought to develop roadmap options establishing
    priorities, goals, and milestones for the modernization of U.S. space launch capabilities. This
    report cited the growing sense within Congress and others that while space launch is a critical
    issue for America’s future in space, there is no coherent national plan to guide our actions into
    the next century. The study developed 15 recommendations concerning, among others, the
    industrial base, investment, requirements, and coordination. The most consistent theme of the
    study is that space launch is the key enabling capability for the Nation to exploit and explore



Page 33                                            GAO-03-825R Satellite Acquisition Programs
    space.

•   1994 GAO reported that according to the April 1994 Moorman report, fewer satellites, with longer
    lives, perform more work, which has resulted in decreased launch rates and excess launch
    vehicle production and processing capacity. The accompanying negative effect is low, inefficient
    production rates that raise unit costs.

•   1994 GAO reported that DOD lacked an adequate and validated set of requirements for a future
    launch system. While DOD desired to improve and evolve the existing expendable launch vehicle
    fleet, it hadn’t established an approach for acquiring and evaluating Russian launch vehicle
    components and technologies to incorporate into future designs.

EELV
• 1997 GAO reported that cost risk was inherent in the vehicle acquisition plan because production
   could be initiated from 1 to 2 years before the first system development test flight. Such a
   strategy could result in costly modifications to the production vehicles. Since there was
   uncertainty in program cost the potential exists for program cost increases. Cost dictated that
   there would not be any launches for operational test and evaluation purposes.

•   1997 GAO reported that the program had schedule risk because DOD would purchase the last of
    its existing expendable launch vehicles before the first system development test flight was
    scheduled to occur. If the test flight was unsuccessful, coupled with the expiration of existing
    contracts, this could create a void in DOD’s launch capability. GAO had reported on numerous
    occasions about the risks associated with program concurrency and initiating production without
    adequate testing.

•   1997 GAO reported that the Air Force had identified vehicle propulsion, systems integration, and
    software as technical risk areas. Propulsion systems were expected to require significant
    development. Integrating all design, engineering, testing, manufacturing, and launch functions
    and the software information system were expected to be challenging tasks. The commercial
    application of the EELV posed a unique situation for the government with the winning contractor
    potentially enjoying an enhanced competitive edge (the demand for commercial launches has not
    materialized and two contractors were awarded EELV contracts) from DOD’s investment in the
    program.

•   1998 GAO reported that the primary benefits associated with the EELV program should be
    reduced cost to the government, but that DOD’s cost reduction estimate was uncertain due to
    fluctuations in number, type and timing of launches.

•   1998 GAO reported that meeting launch site facility preparation schedules as the primary
    program risk because construction had to begin shortly after the milestone II decision in June
    1998 to support the first EELV launch in fiscal year 2002.

•   1998 GAO reported that DOD’s use of other transaction instruments, a relatively new acquisition
    method, would challenge DOD in determining how best to protect the government’s interests.
    Other transactions are generally not subject to the federal laws and regulations governing
    standard procurement contracts. Consequently, when using other transaction (10 U.S.C. 2731)
    authority, contracting officials are not required to include standard contract provisions that
    typically address such issues as financial management or intellectual property rights, but rather
    may structure the agreements as they consider appropriate. In addition, the two contractors
    were not willing to guarantee system performance because DOD’s financial risk was to be capped
    at $500 million per contractor, while the contractor’s financial risk would be an open-ended
    commitment. As a result, the contractors would not guarantee a launch vehicle capability to
    meet the government’s requirements (would only agree to provide a “best effort”).

•   2001 DOD selected acquisition report commented on satellite weight growth for the Wideband
    Gapfiller Satellite (WGS) and Advanced Extremely High Frequency (AEHF) satellites. For
    example, the WGS spacecraft weight growth had driven a need to upgrade from Medium to
    Intermediate for both Delta IV and Atlas V launch vehicle configurations for the first three WGS



Page 34                                           GAO-03-825R Satellite Acquisition Programs
   missions. Spacecraft weight growth on the AEHF satellite had also resulted in additional funding
   being added to the budget in order to upgrade to an Intermediate class vehicle.


GAO Reports
GAO/NSIAD-91-271, GAO/NSIAD-94-253, GAO/NSIAD-97-130, GAO/NSIAD-98-151




Page 35                                         GAO-03-825R Satellite Acquisition Programs
                                    Appendix II
                               Related GAO Reports


Missile Warning and Tracking

Missile Defense: Alternative Approaches to Space Tracking and Surveillance
System Need to be Considered. GAO-03-597. Washington, D.C.: May 23, 2003.

Defense Acquisitions: Space-Based Infrared System-low at Risk of Missing Initial
Deployment Date. GAO-01-6. Washington, D.C.: February 28, 2001.

National Missile Defense: Risk and Funding Implications for the Space-Based
Infrared Low Component. GAO/NSIAD-97-16. Washington, D.C.: February 25, 1997.

Defense Support Program: Ground Station Upgrades Not Based on Validated
Requirements. GAO/NSIAD-93-148. Washington, D.C.: May 21, 1993.

Early Warning Satellites: Funding for Follow-on System Is Premature.
GAO/NSIAD-92-39. Washington, D.C.: November 7, 1991.

Communications

Military Satellite Communications: Concerns With Milstar's Support to Strategic
and Tactical Forces. GAO/NSIAD-99-2. Washington, D.C.: November 10, 1998.

Defense Satellite Communications: Alternative to DOD's Satellite Replacement Plan
Would Be Less Costly. GAO/NSIAD-97-159. Washington, D.C.: July 16, 1997.

Military Satellite Communications: DOD Needs to Review Requirements and
Strengthen Leasing Practices. GAO/NSIAD-94-48. Washington, D.C.: February 24,
1994.

Military Satellite Communications: Opportunity to Save Billions of Dollars.
GAO/NSIAD-93-216. Washington, D.C.: July 9, 1993.

Military Satellite Communications: Milstar Program Issues and Cost-Saving
Opportunities. GAO/ NSIAD-92-121. Washington, D.C.: June 26, 1992.

Military Satellite Communications: Potential for Greater Use of Commercial
Satellite Capabilities. GAO/ T-NSIAD-92-39. Washington, D.C.: May 22, 1992.

DOD Acquisition: Case Study of the MILSTAR Satellite Communications System.
GAO/NSIAD-86-45S-15. Washington, D.C.: July 31, 1986.

Navigation

Global Positioning System: Production Should Be Limited Until Receiver
Reliability Problems Are Resolved. GAO/NSIAD-91-74. Washington, D.C.: March 20,
1991.


Page 36                                GAO-03-825R Satellite Acquisition Programs
Satellite Acquisition: Global Positioning System Acquisition Changes After
Challenger's Accident. GAO/NSIAD-87-209BR. Washington, D.C.: September 30,
1987.

Issues Concerning the Department of Defense's Global Positioning System as It
Enters Production. GAO/ MASAD-83-9. Washington, D.C.: January 26, 1983.

NAVSTAR Should Improve the Effectiveness of Military Missions--Cost Has
Increased. GAO/ PSAD-80-21. Washington, D.C.: February 15, 1980.

Weather

Polar-Orbiting Environmental Satellites: Status, Plans, and Future Data
Management Challenges. GAO-02-684T. Washington, D.C.: July 24, 2002.

Meteorological Satellites. GAO/NSIAD-95-87R. Washington, D.C.: February 6, 1995.

Weather Satellites: Economies Available by Converging Government Meteorological
Satellites. GAO/NSIAD-87-107. Washington, D.C.: April 23, 1987.

Launch

Evolved Expendable Launch Vehicle: DOD Guidance Needed to Protect
Government's Interest. GAO/NSIAD-98-151. Washington, D.C.: June 11, 1998.

Access to Space: Issues Associated With DOD's Evolved Expendable Launch Vehicle
Program. GAO/NSIAD-97-130. Washington, D.C.: June 24, 1997.

Titan IV Launch Vehicle: Restructured Program Could Reduce Fiscal Year 1992
Funding Needs. GAO/NSIAD-91-271. Washington, D.C.: September 6, 1991.

Reports Covering Multiple Space Programs and Management Issues

Defense Acquisitions: Assessments of Major Weapon Programs. GAO-03-476.
Washington, D.C.: May 15, 2003.

Defense Space Activities: Organizational Changes Initiated, but Further
Management Actions Needed. GAO-03-379. Washington, D.C.: April 18, 2003.

Military Space Operations: Planning, Funding, and Acquisition Challenges Facing
Efforts to Strengthen Space Control. GAO-02-738. Washington, D.C.: September 23,
2002.

Defense Industry: Consolidation and Options for Preserving Competition.
GAO/NSIAD-98-141. Washington, D.C.: April 1, 1998.

National Space Issues: Observations on Defense Space Programs and Activities.
GAO/NSIAD-94-253. Washington, D.C.: August 16, 1994.



Page 37                                GAO-03-825R Satellite Acquisition Programs
Military Space Programs: Comprehensive Analysis Needed and Cost Savings
Available. GAO/T-NSIAD-94-164. Washington, D.C.: April 14, 1994.

Military Space Programs: Opportunities to Reduce Missile Warning and
Communication Satellites' Costs. GAO/T-NSIAD-94-108. Washington, D.C.:
February 2, 1994.

Military Space Programs: An Unclassified Overview of Defense Satellite Programs
and Launch Activities. GAO/NSIAD-90-154FS. Washington, D.C.: June 29, 1990.




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Page 38                               GAO-03-825R Satellite Acquisition Programs
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