oversight

Space Acquisitions: Committing Prematurely to the Transformational Satellite Program Elevates Risks for Poor Cost, Schedule, and Performance Outcomes

Published by the Government Accountability Office on 2003-12-04.

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

United States General Accounting Office
Washington, DC 20548




          December 4, 2003

          The Honorable Donald H. Rumsfeld
          The Secretary of Defense

          Subject: Space Acquisitions: Committing Prematurely to the Transformational
          Satellite Program Elevates Risks for Poor Cost, Schedule, and Performance
          Outcomes

          Dear Mr. Secretary,

          In a multibillion-dollar effort, the Department of Defense (DOD) plans to build a
          space-based communications system that leverages technologies never before used in
          space. Such a system would enable DOD to transform how information is collected
          on potential U.S. adversaries and how military forces are warned of hostile action.
          The backbone of this system will be the Transformational Satellite (TSAT),1 which is
          expected to play a pivotal role in connecting communications networks on the
          ground, in the air, on ships, and in space. TSAT represents a potential leap forward in
          communications speed, security, and availability. The Air Force, which heads up
          DOD’s space programs, intends for TSAT to be interoperable with similar systems
          being acquired for the National Aeronautics and Space Administration (NASA) and
          the intelligence agencies.

          The initial TSAT program is expected to cost about $12 billion from 2003 to 2015 for
          development and production. Several billions more are to be spent acquiring and
          supporting the associated ground infrastructure, including thousands of user
          terminals. The Air Force intends to start the acquisition program in December 2003
          and expects to launch the first TSAT in 2011.

          To help pay for TSAT, the Air Force has scaled back its acquisition of the Advanced
          Extremely High Frequency (AEHF) satellites currently under development. However,
          because of senior military commanders’ concerns about TSAT’s risks and the
          potential delay in delivering improved space communications, the Air Force plans to
          reassess the need for future AEHF funding in November 2004. If TSAT is considered
          too high a risk to meet the warfighter’s expectations, the contingency plan is to take
          TSAT’s funding—thereby delaying TSAT’s development—and use it to buy another
          AEHF satellite. The Air Force has targeted November 2004 as the latest date such a

          1
           The TSAT program also includes development of another satellite, the Advanced Polar System (APS).
          Because development efforts for TSAT and APS are similar, we are referring to both programs as TSAT
          in this report. More information about APS is included in enclosure I.


                                                     GAO-04-71R Transformational Satellite Program
decision could be made and still include funds for AEHF in the DOD budget
submission for fiscal year 2006.

We conducted this assessment in response to the large investment planned and the
importance of the communications capabilities promised by TSAT and AEHF.
Specifically, we assessed the Air Force’s readiness to (1) initiate a TSAT acquisition
program in December 2003 and (2) make a decision in November 2004 about whether
to take TSAT funding and use it to buy another AEHF satellite.


RESULTS IN BRIEF

Air Force officials have set two imminent deadlines: starting the TSAT program in
December 2003, and deciding whether to shift funding from TSAT to AEHF in
November 2004. The Air Force is currently not prepared to make an informed
decision in either case.

Air Force officials are not ready to initiate the TSAT program in December 2003
because they do not have the knowledge to reliably establish cost, schedule, and
performance goals. At program start, program managers are required by law to
establish such goals.2 Our past work on successful acquisition programs has found
that these goals cannot be set reliably unless the critical technologies and design have
been determined to meet minimum performance requirements. Programs that do not
have this knowledge at program start have a much greater risk of resorting to costly
design changes later in the development process, asking the warfighter to
compromise on desired capabilities, or incurring schedule overruns to correct
problems. Realizing that TSAT’s schedule is ambitious, the Air Force added 2 years to
the acquisition program. However, the extra time was mostly allocated to the latter
part of the development process, not to the front end, when program managers
typically need the time to become reasonably certain that technologies and early
designs will work as envisioned.

We are concerned about the Air Force’s readiness to make the planned decision in
November 2004 to take TSAT funding to buy another AEHF satellite in case the TSAT
program falters. Air Force officials have not defined what evaluation criteria they
intend to use in making this decision. Senior military commanders want assurance
that they will get at least the level of capabilities promised by AEHF early in the next
decade. However, senior DOD and Air Force officials told us that if funds were
shifted from TSAT back to AEHF, then TSAT—the linchpin of its plan to transform
military communications—would be substantially delayed. To promote well-informed
and objective investment decisions, our past work has found that decision makers
establish and use measurable criteria for evaluating the costs, benefits, and risks of
various alternatives.



2
    10 U.S.C. sections 2220 and 2435.


2                                       GAO-04-71R Transformational Satellite Program
We are recommending that you direct the Secretary of Air Force to develop critical
technologies more fully and to conduct early design studies before starting the TSAT
acquisition program. We are also recommending that you direct the Secretary to
establish and use measurable evaluation criteria for the planned November 2004
funding decision. Although DOD agrees to adopt such criteria, it believes the
acquisition program can be started because sufficient controls are in place to allow
concurrent development of technology and product design.


BACKGROUND

DOD intends to develop a new generation of space communications systems, taking
advantage of rapidly advancing technologies. This reflects an increasing demand and
reliance on satellite communications systems to move larger volumes of information
to more users. The Air Force reports that the demand for communications bandwidth
increased 473 percent between Operation Desert Storm in 1991 and Operation
Enduring Freedom in 2001. To help meet this demand, DOD has augmented its own
satellite communications capability with commercial satellites. However, in each
major conflict in the past decade, senior military commanders still reported shortfalls
in communications capacity, particularly for rapid transmission of large digital files,
such as those created by imagery sensors. DOD’s communications studies indicate
the shortfall will continue to grow, despite major improvements in communications
satellites currently in development.

Investment Strategy for Satellite Communications Revised

In 1996, DOD developed and began to implement a space investment strategy that
proposed a new mix of improved communication satellites for use in 2010 and
beyond. Among the proposed systems were the AEHF satellite, the Wideband
Gapfiller Satellite (WGS), Advanced Polar System (APS), and Advanced Wideband
Satellite (AWS), a less capable and earlier version of TSAT. At that time, DOD
believed that AWS, AEHF, and WGS would provide a significant increase in
communications capacity and would meet the warfighters’ needs in 2010 and beyond.
(More information about these satellite systems and their associated acquisition
programs is included in enc. I.)

In 2001, DOD developed a new Transformational Communications Architecture that
uses emerging communications technologies. The architecture is expected to
transform future combat and intelligence operations, with TSAT playing a critical
role. The concept is to use laser-based and improved radio frequency transmission
systems and high-speed, Internet-like networks that will link communications
systems on the ground, in the air, on ships, and in space. Instead of circuit-based
systems, such as those used today to link specific sending-and-receiving devices,
future systems are expected to connect multiple sending-and-receiving devices at the
same time. The ultimate goal is to remove the existing constraints to communication
and enable transmissions regardless of location, size, or message.



3                                     GAO-04-71R Transformational Satellite Program
Knowledge-based Acquisition Strategy Results in Better Outcomes

Historically, DOD has had difficulty meeting the cost, schedule, and performance
goals that were established at the start of its major defense acquisition programs such
as TSAT. DOD’s investments in money and time have far exceeded initial estimates
for developing and acquiring communications satellites and other weapon systems. In
                                                                                      3
addition, weapon systems have frequently been saddled with performance shortfalls.
To address some of these difficulties, DOD recently implemented a new space
systems acquisition policy, which intends to provide decision makers in the Air Force
with more consistent and robust information on costs, technologies, and
requirements. The new acquisition policy also promotes rapid introduction of
emerging technologies into space systems and allows technology, design, and system
development to occur concurrently in an effort to speed the acquisition process. A
recent GAO report identified some positive aspects of the policy; however, the report
stated that any benefits will be limited because the policy permits major investments
in new programs before managers know what resources are really required to deliver
                       4
a promised capability.

Our work on best practices in weapon system acquisitions has shown that program
managers have a much higher probability of meeting cost, schedule, and performance
objectives if the needed technologies are mature and the developing contractor has
completed early design studies before starting the acquisition program. Having this
knowledge in hand means managers can build a strong business case and ensure their
products can be successfully developed. A business case provides the necessary
structure for managers to identify the best product solution based on knowledge of
performance, constraints and assumptions, and a risk-adjusted cost-benefit analysis.
In the past several years, GAO has developed a knowledge-based acquisition model
based on best practices by leading companies. The best practices model has three
knowledge points. Each knowledge point builds on the preceding one. The acquired
knowledge is used to identify and reduce any risks before moving a product to the
next stage of development. Figure 1 shows when the three knowledge points occur
on the best practices model.




3
  U.S. General Accounting Office, Military Space Operations: Common Problems and Their Effects on
Satellite and Related Acquisitions, GAO-03-825R (Washington, D.C.: June 2, 2003).
4
  U.S. General Accounting Office, Defense Acquisitions: Improvements Needed in Space Systems
Acquisition Management Policy, GAO-03-1073 (Washington, D.C.: Sept. 15, 2003).


4                                         GAO-04-71R Transformational Satellite Program
The first knowledge point sets the stage for the eventual outcome of an acquisition
program—desirable or problematic. When the customer’s needs match the
developer’s resources (which include technology, design knowledge, time, and
money) before program start, successful outcomes are much more likely to occur. If
a match occurs after program start, managers often make additional, unanticipated
investments in money and time because gaps between requirements and resources
are discovered later in the process.


AIR FORCE IS SETTING COST, SCHEDULE, AND PERFORMANCE GOALS
AND STARTING TSAT BEFORE CRITICAL KNOWLEDGE IS ATTAINED

By December 2003, when the TSAT program is scheduled to start, Air Force officials
are required by law to establish cost, schedule, and performance goals, but the
knowledge they need to set reliable goals is still not available. Critical technologies
are underdeveloped and early design studies have not been started. Without this
essential knowledge, the Air Force is likely to have difficulty developing a sound
business case for starting the TSAT program. If the Air Force proceeds without a
sound business case, the program is at risk of higher costs, lower performance, and
delays in providing capabilities to the warfighters. Our work has found that
successful commercial and DOD development programs insist on having mature
                                                                       5
technologies and early design studies to support the business case.

Critical Technologies Are Immature

Critical technologies are necessary building blocks for a system to meet its minimum
performance requirements. If these technologies are not available when needed, the
system cannot be completed as planned. And because technology development does
5
 U.S. General Accounting Office, Best Practices: Better Management of Technology Development Can
Improve Weapon System Outcomes, GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999); and U.S.
General Accounting Office, Best Practices: Better Matching of Needs and Resources Will Lead to
Better Weapon System Outcomes, GAO-01-288 (Washington, D.C.: Mar. 8, 2001).



5                                         GAO-04-71R Transformational Satellite Program
not happen on a planned or predictable schedule, it is difficult to predict when or if a
critical technology will mature. This is why leading commercial companies demand
that critical technologies are mature before the commitment to a new system is
made. Within the federal government, NASA leveraged this best practice by
developing an analytical tool to assess technology maturity. This tool—adopted by
many DOD programs—establishes Technology Readiness Levels (TRL) for
demonstrated performance, with a higher value indicating a greater maturity level.
(The various levels are defined in enc. II.)

According to best commercial practices and DOD guidance, the minimum acceptable
level for a technology to be included in an acquisition is TRL 6. At this level, the
technology is considered sufficiently mature and has been engineered into a
subsystem or prototype that closely resembles the final design. Also, the technology
has been successfully demonstrated to work in a relevant environment. DOD policy6
prefers the maturity to reach TRL 7—a prototype demonstration in an operational
environment. A TRL 7 for a satellite would mean the technology prototype has
achieved form, fit, and function and has been demonstrated in space. Commercial
satellite companies frequently meet these criteria by including a new technology on
an existing satellite design for demonstration purposes. Also, NASA usually requires
all mission-critical technologies to be demonstrated in space before being placed on a
new system. In some cases, demonstrating space technologies in an operational
environment is important because operating a system in the harsh temperatures and
radiation environment of space—where a satellite must last essentially maintenance-
free for 10 to 15 years—is much more challenging than land-based operations. The
new space acquisition policy does not require a minimum threshold for including new
technology on a space acquisition program.

Critical technologies for TSAT include laser optics that can transport information
over long distances in much larger quantities than radio waves; high-speed routers
that enable multi-user networks, sophisticated data packaging; security algorithms
and management utilities; multi-beam antennas; and software reprogrammable
terminals. Table 1 shows that most of these technologies were at a TRL 3 or 4 in
October 2003. When a technology is classified as a TRL 3, it means most of the work
performed so far has been based on analytical studies and a few laboratory tests may
have been conducted. A TRL 4 means some of the key components have been wired
and integrated and have been demonstrated to work together in a laboratory
environment. Significant effort is required to move from these TRL levels to a TRL 6,
the minimum needed to effectively begin a new acquisition program. As shown
below, the program office estimates that most of these technologies will have
reached a TRL 6 threshold by fiscal year 2006.




6
    DOD Instruction 5000.2, Operation of the Defense Acquisition System, May 12, 2003.


6                                              GAO-04-71R Transformational Satellite Program
Table 1: Current and Expected Technical Maturity Levels of TSAT Technologies
 Critical technology                            TRL as of October 2003         When TRL 6 is expected
 Information protection                                 3-4                           FY2006
 Laser communication                                    4-5                           FY2006
 Information packet processing                          6                             FY2003
 Antenna for communications on the move                 4-5                           FY2006
 Information transmission management                    3-4                           FY2006
 Protected bandwidth efficient modulation               3-4                           FY2006
Source: MILSATCOM Joint Program Office.



If one or more of TSAT’s critical technologies encounters development problems, a
backup technology should be available for insertion into the program. The laser
communications technology does not have a backup provided by another satellite
program. Typically, a backup technology does not meet all of the user’s requirements
and/or can negatively affect other design requirements of the new system, such as
weight and power. For example, the alternative for TSAT’s communications antenna
is the current AEHF antenna, which does not provide the essential communications-
on-the-move capability. Reverting to alternative technologies late in a development
program results in a series of costly design changes and a need to go back to the
warfighter to determine if the changes are acceptable.

Early Design Studies Have Not Been Started Yet

As of October 2003, 2 months before TSAT’s scheduled start, the Air Force had not
awarded contracts for early design studies. In the case of successful programs, we
have found that the developing contractor evaluates the early designs according to
system engineering principles to assure that designs are technically feasible, match
the user’s needs, and can be accomplished within the time frame and funds available.
Without this disciplined engineering process, programs can learn too late that designs
needed to achieve the warfighter’s requirements are not feasible. Program managers
then have little choice but to ask for more time and money to develop better designs,
or they must compromise by asking the warfighter to accept a less capable backup
design or technology. When discovered late in a development program, these changes
can be costly. Our prior work has shown that the cost to change the design increases
significantly as a program progresses through the key decision points of an
acquisition program. For this reason, most commercial companies want greater
assurance early in a program that the design is feasible and producible.

The Air Force plans to competitively award contracts for early design studies in
December 2003, which is when the TSAT program is scheduled to start. These studies
are to be completed in 2006, when contractors are expected to deliver a design
specification in preparation for final design efforts. To prepare for the next step—
critical design review—in 2007, the Air Force plans to assess the preliminary designs
and select one or both contractors to continue with detailed design studies and
development activities. Figure 2 shows key dates in TSAT’s acquisition schedule.



7                                           GAO-04-71R Transformational Satellite Program
After hearing senior warfighters express concerns about the ambitious schedule, the
Air Force recently extended the launch date for the first TSAT from 2009 to 2011.
However, the additional 2 years was mostly allocated to the build-and-test phase prior
to launch. The front end of the acquisition schedule—technology development and
design—remains much as it was before the extension. The technology development
phase was not extended and the preliminary design and critical design review dates
did not change. Based on our past reviews, the importance of technology
development and design to the success of a program is critical and TSAT’s current
status shows significant immaturity to be overcome.


LACK OF EVALUATION CRITERIA RAISES CONCERNS ABOUT PENDING
DECISION TO SHIFT FUNDS FROM TSAT TO AEHF

Despite intense interest across DOD in the November 2004 decision, Air Force
officials have not defined what evaluation criteria they intend to use to assess
alternatives if the TSAT program should falter. Senior military commanders have
asked for assurances that promised communications capabilities will be delivered
early in the next decade. If TSAT is likely to miss its promised launch date of 2011,
they want funding to be allocated to complete the AEHF constellation of satellites.
However, senior DOD and Air Force officials told us that if a fourth AEHF were
acquired and a full AEHF constellation were delivered to the warfighter as originally
planned, decision makers and funding organizations within DOD may want to wait
until AEHF has reached the end of its useful life before replacing it with a next-


8                                     GAO-04-71R Transformational Satellite Program
generation satellite, such as TSAT. If the fourth AEHF is acquired, officials believe
TSAT will be delayed by at least a decade. To these officials, this is not a tenable
scenario because they see TSAT as the linchpin in DOD’s plan to transform military
communications and related combat systems.

To promote well-informed and objective investment decisions, our past work has
found that decision makers establish and use measurable criteria for evaluating the
costs, benefits, and risks of various alternatives. Although senior DOD and Air Force
officials told us that they expect to have accomplished a number of tasks before
making the November 2004 decision, they have not established measurable
evaluation criteria for deciding whether to shift funds from TSAT back to AEHF.


CONCLUSIONS

DOD has embarked on a new transformational communications architecture to take
advantage of emerging technologies and to remove communications constraints from
combat. The department has told the warfighter and Congress that TSAT is a key
system that is necessary to achieve this architecture. Responding quickly, the Air
Force has set an imminent deadline of December 2003 to start the TSAT program. By
starting the program so soon, the Air Force is moving ahead without mature
technologies and early design studies—two pillars of knowledge that would help
program officials to reliably establish cost, schedule, and performance goals. This
knowledge is not expected to be available until 2006. Our work over the years has
found that when programs have been started without the requisite knowledge,
program managers and contractors are later burdened by unreasonable expectations
about cost, schedule, and performance. Problems usually arise later that lead to cost
increases, delays in delivering needed capability to the warfighters, and performance
shortfalls.

For the planned November 2004 decision about whether to fund TSAT or AEHF, Air
Force officials would be in a better position to make a well-informed, objective
decision if they establish and use specific criteria for evaluating alternative
investments. Reporting the Air Force’s decision-making criteria and rationale to
Congress would enhance transparency and provide Congress with better information
for its oversight and funding responsibilities.


RECOMMENDATIONS FOR EXECUTIVE ACTION

To promote better cost, schedule, and performance outcomes, we recommend that
you direct the Secretary of Air Force to delay the start of the TSAT acquisition
program until technologies have been demonstrated to be at an acceptable level of
maturity (at least TRL 6) and until the developing contractor has determined through
systems engineering that the design is feasible and producible. We also recommend
that you direct the Secretary to provide the appropriate level of funding necessary to



9                                     GAO-04-71R Transformational Satellite Program
gain this knowledge, which is critical for building a business case to start the TSAT
program at a later time.

To promote a well-informed and objective decision—now scheduled for November
2004—about whether to fund another AEHF satellite, we further recommend that you
direct the Secretary of Air Force to:

      •   establish measurable criteria for use when evaluating alternative investments
          in TSAT and AEHF and report this criteria in the Air Force’s 2005 budget
          submission;
      •   consider the alternative investments in TSAT and AEHF against these
          measurable criteria; and
      •   provide the rationale for how these criteria were applied in the Air Force’s
          2006 budget submission.


AGENCY COMMENTS AND OUR EVALUATION

In commenting on a draft of this report, the Deputy Assistant Secretary of Defense for
Networks and Information Integration disagreed with our primary recommendation
to delay the start of the TSAT acquisition program until technologies are sufficiently
matured and until the contractor determines through systems engineering principles
that the design is feasible. DOD contends that the new Air Force National Security
Space Acquisition Policy provides sufficient controls to allow concurrent
development of technology and product design. DOD states that starting the TSAT
program enables it to establish the funding and program controls—such as managing
to the acquisition program baseline—provided by the new space acquisition policy.
DOD did, however, concur or partially concur with the other recommendations to
provide funding to mature TSAT’s critical technologies and early designs, to establish
criteria for making decisions, and to report these criteria and decisions to Congress.

We believe the new space acquisition policy does not have sufficient controls to
reverse the higher costs and longer schedules that have plagued a number of satellite
programs. The added risks of concurrent technology and product development have
not helped improve the typical outcome for satellite programs. In a series of best
practices reports issued over the years, we have identified problems resulting in
substantially different cost and schedule outcomes when compared with initial
expectations at the outset of a new acquisition program. We have offered improved
approaches based on the best commercial and defense practices. DOD has endorsed
the practices that call for a disciplined acquisition approach, one that separates
technology from product development and bases decisions at key junctures on a set
of critical product knowledge captured by the decision point. DOD incorporated this
knowledge-based approach in its new acquisition system policy.7



7
    DOD Directive 5000.1 and Instruction 5000.2.


10                                             GAO-04-71R Transformational Satellite Program
DOD’s new space acquisition policy, on the other hand, is a step backward and is
similar to an older acquisition policy that contributed to many unsuccessful
acquisition programs of the past. DOD’s history is filled with examples of programs
that concurrently developed technology and new products and made decisions based
on risk mitigation plans instead of knowledge about the new products. Our June 2003
report8 on common problems in satellite programs identified Milstar, SBIRS-Low,
SBIRS-High, AEHF, and others as suffering the consequences of this earlier
acquisition strategy. Additionally, we have found that setting an acquisition program
baseline that is not rooted in key product knowledge is unreliable and not useful as a
management tool. In fact, starting the program before technologies are mature and a
feasible design study is completed reduces accountability and straps the program
manager and the contractor with unreasonable expectations in the baseline.
Therefore, we believe that because DOD’s new space acquisition policy does not
require a knowledge-based acquisition strategy, it is destined to repeat the problems
of the past.

DOD stated that extensive studies done over the last two years provide sufficient
information for the Milestone Decision Authority to determine if the TSAT program
should be initiated. However, these studies do not provide product-specific
knowledge for building a business case for TSAT. Instead, these studies were focused
on developing the overarching communications architecture rather than detailed
technology and design information needed to build and launch TSAT.

While it is key to complete early design efforts before starting the program,
substantial investments in system design and development are at risk if the Air Force
cannot demonstrate TSAT’s technologies, a number of which were still in the early
paper study phase without hardware demonstrations to support that they would
work. In its fiscal year 2004 budget submission, the Air Force had budgeted over $800
million in fiscal years 2004 and 2005 for system design and development.

To support its case for starting the TSAT program in December 2003, DOD states
backup technologies exist and are ready to fill any technology void that might occur.
They believe this will reduce the risk. However, there are no backup technologies
that will satisfy the two most critical warfighter requirements—laser communications
(critical to transporting intelligence, surveillance, and reconnaissance data) and
communications on the move (critical to the Future Combat System). These
capabilities were the primary basis for persuading the warfighter to favor the
uncertain future of TSAT rather than to acquire the full constellation of four AEHF
satellites, which would have provided a 500 percent increase over the
communications capability used in Operation Iraqi Freedom.

If TSAT’s investments were based on knowledge captured from mature technologies
and feasible design, then these informed decisions would reduce the potential for
major and costly changes as the program enters the build-and-demonstration phase,

8
 U.S. General Accounting Office, Military Space Operations: Common Problems and Their Effects on
Satellite and Related Acquisitions, GAO-03-825R (Washington, D.C.: June 2, 2003).


11                                        GAO-04-71R Transformational Satellite Program
when it is too late to consider other options. We believe it is better to keep options
open now, such as AEHF, and decide at a later time when enough knowledge has
been gained to ensure TSAT is the right solution for the 2010 time frame. Our past
work shows the negative outcomes of the concurrent and risk mitigation approach to
acquisition. We also have shown the potential for more successful outcomes if a
knowledge-based approach is applied. Therefore, we stand by our recommendation
that TSAT’s program start should be delayed until technologies are mature and the
developing contractor has completed studies to demonstrate a feasible design.

To ensure that the warfighter is delivered an improved capability no later than 2011,
DOD intends to decide in November 2004, based on an assessment of TSAT’s
progress, whether funding should be diverted back to the AEHF program. In its
comments, the Air Force suggests criteria for this decision point that can only result
in continuing the TSAT program. For example, criteria for laser communications or
communications on the move do not apply to AEHF. These are capabilities promised
by TSAT, not AEHF. We believe that the criteria should be based on the maturity of
critical technologies and early design of TSAT. To ensure the transparency and
objectivity of the decision process in November 2004, these criteria should be
provided to Congress in the fiscal year 2005 budget for TSAT, not—as DOD
suggests—in the 2006 budget, when the decision will already have been made.

In response to DOD’s detailed comments, we made changes to the report where
appropriate to correct technical inaccuracies. DOD’s comments are provided in
enclosure III.


SCOPE AND METHODOLOGY

In conducting our review, we analyzed the extent to which the TSAT and APS
programs have acquired the knowledge needed to set specific cost, schedule, and
performance goals. To do this, we compared the acquisition strategy with GAO’s
knowledge-based acquisition model and analyzed the differences between them. We
specifically focused on the portion of knowledge-based acquisition dealing with the
necessity of matching user’s needs with developer’s resources prior to making a
development commitment. We collected and analyzed information from the Office of
the Assistant Secretary of Defense for Command, Control, Communication and
Intelligence (ASDC3I), Defense Information Services Agency (DISA), the National
Security Agency (NSA), Air Force Space Command (AFSPC), U.S. Strategic
Command (USSTRATCOM), Military Satellite Communication Joint Program Office
(MJPO), Joint Forces Command (JFCOM), Aerospace Corporation and RAND
Corporation. We conducted our review from February 2003 through November 2003
in accordance with generally accepted government auditing standards.


                                        ---------




12                                    GAO-04-71R Transformational Satellite Program
As you know, 31 U.S.C. 720 requires the head of a federal agency to submit a written
statement of actions taken on our recommendations to the Senate Committee on
Governmental Affairs and the House Committee on Government Reform not later
than 60 days after the date of the report and to the Senate and House Committees on
Appropriations with the agency’s first request for appropriations made more than 60
days after the date of this report.

We are sending copies of this report to 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 has any questions concerning this report, please contact me at
(202) 512-4841. Key contributors to this report were Lily Chin, Mike Hazard, Dave
Hubbell, Travis Masters, and Matt Mongin.


Sincerely yours,




Robert E. Levin
Director, Acquisition and Sourcing Management




13                                    GAO-04-71R Transformational Satellite Program
Enclosure I: Descriptions of Communication Satellites

The Air Force is developing the following communication satellites.

Wideband Gapfiller Satellite
The Wideband Gapfiller Satellite (WGS) system is a joint Air Force and Army
program intended to provide communications to U.S. warfighters, allies, and coalition
partners during all levels of conflict, short of nuclear war. WGS will provide essential
communications services for the commanders in chief to command and control their
tactical forces. Tactical forces will rely on WGS to provide high-capacity links to the
terrestrial portion of the Defense Information Services Network. WGS is the next
generation wide-band component in the Department of Defense’s (DOD) future
Military Satellite Communications architecture. WGS is composed of three principal
segments: Space Segment (satellites), Terminal Segment (users), and Control
Segment (operators). The WGS program is leveraging commercial methods and
technological advances in the satellite industry to rapidly design, build, launch, and
support a constellation of highly capable military communications satellites.

The WGS program is being conducted as a DOD commercial acquisition and as such
is not subject to the same milestone and/or review processes required in other space
acquisition programs. The Air Force reports that 95 percent of satellite content will
be commercial off-the-shelf products. The total budget for purchasing five WGSs is
$1.5 billion. The contract is firm fixed price over 10 years and was awarded to Boeing
Satellite Systems in January 2001. The Air Force purchased the first two satellites in
fiscal year 2002 and the third satellite in fiscal year 2003. It plans to purchase
satellites four and five in fiscal years 2007 and 2008, respectively. The first two WGS
satellites are scheduled for launch in fiscal year 2005, with the third satellite planned
for launch in fiscal year 2006.

Upon first launch into geosynchronous orbit in 2005, WGS will be the DOD’s most
capable and powerful communications satellite. Ultimately, five WGSs will be in
orbit, providing service in both the X- and Ka band-radio frequencies. Each satellite is
expected to have a capacity of at least 2,100 megabits per second. WGS will augment
X-band communications now provided by the Defense Satellite Communications
System (DSCS) and one-way Ka-band service provided by the Global Broadcast
Service (GBS). Additionally, WGS will provide new two-way Ka-band services. These
satellites are not interconnected. They will, however, provide communications
capacity, connectivity, and flexibility for U.S. military forces while maintaining full
interoperability with existing and programmed DSCS and GBS terminals.


Advanced Extremely High Frequency Satellite
The Advanced Extremely High Frequency (AEHF) satellite system is to be DOD’s
next generation of high-speed, secure communication satellites. This satellite system
is intended to replace the existing communications satellites with improved,
survivable, jam-resistant, worldwide, secure communication capabilities at lower


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launch costs. AEHF is to support the entire range of data rates to provide assured
communications across the entire spectrum of conflict, including nuclear war. AEHF
is also designed to be “backward compatible” with existing satellites, that is, it will
support both low and medium data rates as necessary until an AEHF constellation
with higher data rates becomes available at initial operating capability (two satellites
on orbit). The first satellite is currently planned to launch in 2006 and the second is
scheduled to launch in 2007.

The Air Force is responsible for funding, developing, and producing the AEHF
satellites and the associated ground control systems. The Air Force’s budget for
developing and acquiring the first three AEHF satellites is $4.8 billion. Each service—
Army, Navy, and Air Force—is separately responsible for funding, developing, and
producing its own terminals to communicate with AEHF.

The AEHF program began in August 1998, and the final constellation will be
composed of satellites in geosynchronous orbit that can transmit data to each other
via radio frequency cross links, and communicate with ground stations and
communication terminals carried by air, sea, and ground forces. Each satellite will
have a capacity of about 250 megabits per second. Users communicate with the
satellites through their terminals. The mission control segment provides command
and control that directs the movements and other operations of satellites.


Transformational Satellite Communications
The Transformational Satellite (TSAT) communications system is designed to provide
improved, survivable, jam-resistant, worldwide, secure and general purpose
communications as part of an independent but interoperable set of space-based
systems that will support the National Aeronautics and Space Administration, DOD,
and the intelligence community. TSAT will replace the current satellite system and
supplement AEHF.

The TSAT architecture, requirements, and cost baselines are to be approved in
December 2003. Initial design contracts are to be awarded in December 2003;
therefore, the final configuration of the TSAT system remains to be determined. Air
Force budget documentation for TSAT (funded under the Advanced Wideband
Satellite budget line) shows a total cost of $10.9 billion for purchasing the first five
satellites plus a spare.

The TSAT system will be the key transport mechanism of DOD’s space-based
network communications system, which has individual satellites operating as routers
in space. The TSAT constellation of five satellites will provide continuous
communication coverage from 65 degrees south latitude to 65 degrees north. The
satellites will support communications in the EHF and Ka band radio frequency
bands, in addition to passing communications via lasers. The capacity of each
satellite is expected to be at least 10 times greater than the AEHF satellites. The Air
Force is currently conducting development activities necessary in order to make a


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decision to start the program in December 2003. The Air Force plans to launch the
first TSAT in fiscal year 2011. The first two satellites will have radio frequency
satellite cross links to engage the AEHF satellites as well as having the laser cross
links; the third through the fifth satellites will have laser cross links only.

Advanced Polar Satellite
The Advance Polar System (APS) is a part of the Air Force’s transformational
communication architecture and is being developed and acquired as part of the
TSAT/APS acquisition program. APS will provide the next generation protected EHF
band, Ka band, and laser satellite communications capability in the north polar region
starting in fiscal year 2012. APS will support strategic as well as tactical users who
require anti-jam and low probability of detection EHF satellite communications. The
results of the transformational communications architecture definition will affect the
APS program content. Requirements are based on the July 1995 Polar Operational
Requirements Document. According to Air Force program officials, APS is to be a
“lighter” (i.e., lower capacity) version of the TSAT. The current APS plan is to acquire
three satellites (two funded with development funds and one funded with
procurement dollars) and associated ground infrastructure for $1.2 billion. The three
APS satellites will be placed in highly inclined orbits and are expected to provide
continuous communication services to forces deployed from 65 degrees north to the
North Pole (90 degrees north).




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Enclosure II: Descriptions of Technology Readiness Levels

The Interim Defense Acquisition Guidebook (formerly DOD 5000.2-R) directs that
technology readiness assessments, using Technology Readiness Levels (TRL) or
some equivalent assessment methodology, for critical technologies shall occur
sufficiently before key decision points B and C to provide useful technology maturity
information to the acquisition review process. TRLs, originally developed by the
National Aeronautics and Space Administration (NASA), are measured along a scale
of 1 to 9, starting with paper studies of the basic concept and ending with a
technology that has proven itself in actual usage on the intended product. As the TRL
scale increases, the risks associated with uncertain technology decrease, because
more is known about their capabilities and performance. Unexpected problems can
arise at every level, and effort must be expended to overcome them. This effort takes
time and can delay the progress to the next readiness level. According to our previous
reviews of best commercial practices and DOD guidance, a minimum level of TRL 6
should be reached before committing to a space acquisition program. Table 1
provides a detailed explanation of each TRL.

Table 2: TRL Scale for Assessing Critical Technologies

 Technology Readiness Levels               Technology Readiness Level Description
  1. Basic principles observed and         Lowest level of technology readiness. Scientific research begins to be translated into
 reported.                                 technology’s basic properties.
  2. Technology concept and/or             Invention begins. Once basic principles are observed, practical applications can be
 application formulated.                   invented. The application is speculative and there is no proof or detailed analysis to
                                           support the assumption. Examples are still limited to paper studies.
  3. Analytical and experimental           Active research and development is initiated. This includes analytical studies and
 critical function and/or characteristic   laboratory studies to physically validate analytical predictions of separate elements of
 proof of concept.                         the technology. Examples include components that are not yet integrated or
                                           representative.
  4. Component and/or breadboard           Basic technological components are integrated to establish that the pieces will work
 validation in laboratory environment.     together. This is relatively “low fidelity” compared to the eventual system. Examples
                                           include integration of “ad hoc” hardware in a laboratory.
  5. Component and/or breadboard           Fidelity of breadboard technology increases significantly. The basic technological
 validation in relevant environment.       components are integrated with reasonably realistic supporting elements so that the
                                           technology can be tested in simulated environment. Examples include “high fidelity”
                                           laboratory integration of components.
  6. System/subsystem model or             Representative model or prototype system, which is well beyond the breadboard tested
 prototype demonstration in a relevant     for level 5, is tested in a relevant environment. Represents a major step up in a
 environment.                              technology’s demonstrated readiness. Examples include testing a prototype in a high
                                           fidelity laboratory environment or in simulated operational environment.
  7. System prototype demonstration        Prototype near or at planned operational system. Represents a major step up from
 in an operational environment.            level 6, requiring the demonstration of an actual system prototype in an operational
                                           environment. Examples include testing the prototype in a test bed aircraft.
  8. Actual system completed and           Technology has been proven to work in its final form and under expected conditions. In
 qualified through test and                almost all cases, this level represents the end of true system development. Examples
 demonstration.                            include developmental test and evaluation of the system in its intended weapon system
                                           to determine if it meets design specifications.
  9. Actual system proven through          Actual application of the technology in its final form and under mission conditions, such
 successful mission operations.            as those encountered in operational test and evaluation. Examples include using the
                                           system under operational mission conditions.

Source: GAO based on NASA and DOD guidance.




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Enclosure III: Comments From the Department of Defense




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(120225)


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