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Strategic Defense Initiative: Funding Needs Through Completion of Phase I System

Published by the Government Accountability Office on 1990-01-29.

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

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.A0     United States
        General Accounting
        Wwhington,
                              OffIce
                      D.C. 20548

        National     Security and
        International      Affairs Division

       B-223094

       January         29,     1990

       The Honorable    John Conyers, Jr.
       Chairman,  Legislation    and National
         Security   Subcommittee
       Committee on Government Operations
       House of Representatives
       Dear Mr. Chairman:
       On August 10, 1989, you requested             that we review the
       Strategic    Defense Initiative        Organization's      (SDIO) funding
       requirements      through completion       of phase I of the Strategic
       Defense System.          Our objective   was to obtain      SDIO's estimate
       of future    funding      needs for the acquisition       of the phase I
       system and for research          for other programs not part of
       phase I.     On December 12, 1989, we briefed            your staff   on the
       preliminary      results    of our review.       This fact sheet
       summarizes     the results      of our review.
       RESULTS IN BRIEF
        In addition       to the $15.7 billion        that has already been
       appropriated         during fiscal     years 1984 through       1989, SD10
       estimates       that it will     need the following       additional      funds:
       $87 billion        for completion     of phase I development          and
       deployment,        $10.1 billion     for operation      and support for
       phase I until         deployment   is completed,       and $26.4 billion       for
       non-phase       I research     and development      for fiscal     years 1990
       through      1994.     All estimates     are in then-year       dollars.
       These estimates          do not include     funds that SD10 will         need
       after    fiscal      year 1994 for non-phase        I research     and
       development.
       BACKGROUND
        SD10 was established           as an agency of the Department         of
        Defense in April         1984.     SD10 has concluded     that the goal of
        strategic       defense can best be achieved        through     a phased
        deployment       program.      Its deployment   concept includes        a
        phase I Strategic         Defense System and follow-on          phases.   The
      'initial       deployment    of the Strategic     Defense System
         (consisting       of both space- and ground-based          sensors and
        weapons, battle        management, and support        elements)    is known
        as a phase I system.
                                                                                      ,   ?


  B-223094

  Since 1984, $15.7 billion         has been appropriated       to conduct
  Strategic    Defense Initiative        (SD11 research,   including    $1.9
  billion   for phase I.      Additionally,      about $1.4 billion     has
  been appropriated    to the Department        of Energy for advance
  concepts and SDI-related        research.
  In June 1987 SD10 estimated        that phase I would cost between
  $75 billion    and $14,5.7 billion     in fiscal    year 1988 dollars
  (between $94.2 billion       and $183.6 billion      in then-year
  dollars).   SD10 did not make a more precise             estimation
  because details      about the technical     characteristics        and
  performance    requirements     for a strategic    defense system were
  not well defined      or decided.
  In June 1988 SD10 revised        the architecture       and the
  technical     and performance    characteristics      of the elements   in
  the phase I system and estimated           the cost to be $115 billion
  in fiscal     year 1988 dollars      ($142.9 billion     in then-year
  dollars).       The Department   of Defense’s      Cost Analysis
  Improvement Group reviewed SDIO’s estimate             and determined
  that the program,       as proposed,     was not executable      within
  fiscal    guidelines.
  By October 1988’SDI0         had restructured       the program and
  reduced the estimate         to $69.1 billion       in fiscal  year 1988
  dollars  ($88.9 billion         in then-year     dollars).
  These estimates    include  funding   to develop,  produce, and
  deploy phase I.      They do not include   funding  for any
  follow-on  technologies    or costs to operate and support the
  system once deployed.
  ESTIMATED FUNDING REQUIR.EMENT
  SD10 estimated   that beginning       with fiscal    year 1990 it will
  need $87 billion    to complete the development          and deployment
  of the phase I system,      $10.1 billi    on to operate     and support
  the system until    deployment     is completed,     and $26.4 billion
  to fund non-phase I research         and development     for fiscal
  years 1990 through    1994.     All estimates     are in then-year
  dollars.
  Based on SDIO’s October 1988 estimate                    of $88.9 billion   in
  then-year      dollars     for the acquisition           of phase I, $87
  billion      in then-year      dollars     will    be needed for fiscal     years
  1990 through completion             of deployment        (the date is
  classified).         The $1.9 billion         difference      represents
  appropriations         for fiscal      years 1988 and 1989 used for
o phase I.


  2
B-223094

For operation      and support of the phase I system until
deployment     is completed,      SD10 estimated     that it will    need
$10.1 billion      in then-year     dollars.     Based on its estimate
for operation      and support during the last year of
deployment,      SD10 will    need an additional       $2.8 billion
annually    in fiscal     year 1988 dollars      (the then-year     dollar
figure    is classified)      for the life    of the system for
operation     and support.
In addition      to funding  for the phase I system,     SD10
estimated     that it will  need an additional    $26.4 billion       for
fiscal    years 1990 through 1994 in then-year      dollars     for SD1
programs that are not part of phase I.         This estimate       does
not include      funding needed for non-phase   I research      for
fiscal    years 1995 through the end of deployment.
SCOPE AND METHODOLOGY
To prepare this fact sheet, we used information                provided  by
SDIO, held discussions         with SD10 officials,       and reviewed
cost projections       and planning     documents.      We did not
validate   the data, but we did work with SD10 to ensure that
the various     cost components of the estimates           were prepared
on a consistent      basis.     SD10 officials      told us that the data
were developed      for planning     purposes and are subject         to
revision   based on funds appropriated           by the Congress and
approval   of funding      for individual      phase I elements and
other SD10 programs.


As arranged      with your office,    unless you publicly         announce
its contents       earlier,  we plan no further      distribution      of
this     fact sheet until    30 days after     its issue date.       At that
time we will       send copies to the Secretary       of Defense; the
Directors,      Strategic   Defense Initiative     Organization      and
Office      of Management and Budget; and other interested
parties.
Please contact   me at (202) 275-4268 if you or your staff
have any questions     concerning this fact sheet.   Other major
contributors   to th.is fact sheet are listed   in appendix I.
Sincerely    yours,




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    APPENDIX. I                                           ,APPENDIX I

                  MAJOR CONTRIBUTORS TO THIS FACT SHEET
    NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION,
    WASHINGTON, D.C.
    Norman J. Rabkin, Associate  Director
    J. Klein Spencer, Assistant  Director
    Samuel N. Cox, Assignment Manager
    Gregory K. Harmon, Evaluator




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