Communications Acquisition: Issues Involving Army's Single Channel Ground and Airborne Radio System

Published by the Government Accountability Office on 1990-03-20.

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

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                                                                      Issues Invo lving
                                                                      Army’s Single Channel
                                                                      Ground and Airborne
                                                                      Radio System


united states
General Accounting Offlce
Washington, D.C. 20548

National Security and
International Atbirs Division

March 20,199O

The Honorable Daniel K. Inouye
Chairman, Subcommittee on Defense
Committee on Appropriations
United States Senate
The Honorable John P. Murtha
Chairman, Subcommittee on Defense
Committee on Appropriations
Houseof Representatives
As you requested, we have evaluated the Army’s Single Channel Ground
and Airborne Radio System (SINCGARS) program. Our objective was to
assesswhether the Army’s revised acquisition strategy adequately
addressescongressionalconcernsabout the risks involved in the Army’s
prior plans to increase production of these ground and airborne radios
before an operational test. This report discussesthe revised SINCGARS
acquisition strategy and the Army’s efforts to reduce production risk of
both ground and airborne radios.

radios. The Army expects to spend $6.6 billion to field 361,000 ground
radios and 14,000 airborne radios by fiscal year 2004. The other mili-
tary services are expected to spend $418 million for 42,000 ground
Production contracts were initially awarded on a competitive basis to
ITT Corporation for ground radios in 1983 and a sole-sourcebasis for
airborne radios in 1986. ITT Corporation initially produced a ground
version with an external or non-integrated communications security
(non-Icon) device. However, in 1988, ITT Corporation began to produce
a version with an integrated communications security (ICOM) feature
that the Army expects will provide greater operational reliability and
effectiveness. Also, in 1988, the Army awarded General Dynamics Cor-
poration a second-sourceproduction contract for ground ICOM radios
with options for additional radios. Unlike the ground ICOM radio, the air-
borne ICOM radio doesnot embed the communications security function
in the receiver/transmitter but in a separate component.

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                     In responseto congressionalconcernsin July 1988 that a large number
                     of radios were scheduledfor production by the ITT Corporation before
                     operational testing was completed, the Department of Defense(DOD) and
                     the Army took several steps between June and August 1989 to reduce
                     program risk. For the ground ICOMradio, the Army (1) slowed the pro-
                     duction rate until a successfuloperational test, (2) rescheduled opera-
                     tional testing to occur 9 months earlier than previously planned, and
                     (3) planned to defer exercise of the next production option for 12,376
                     radios until successfulcompletion of the test. These changesreduced
                     much of the risk associatedwith the Army’s former plan.
                     The Army further reduced risk by making similar changesto its air-
                     borne acquisition strategy. The Army minimized risks by deferring the
                     option until after the operational test is completed. DODand Army offi-
                     cials said that the Army will not make a full-rate production decision
                     until the radio successfully demonstrates performance and reliability
                     requirements in the June 1990 test.
                     The Army’s acquisition strategy until June 1989 was to contract for
Mo/dified Strategy   22,000 ICOMground radios by May 1990 and hold an initial operational
ReducesRisk on       test and evaluation in March 1991. However, before the award, House
Ground Radio         and Senateauthorization committees expressedconcerns,in their fiscal
                     year 1989 conferencereport, about Army plans to increase ICOMradio
F?rOduction          production before performing an operational test and obtaining certifi-
                     cation of operational reliability.

                     In response,on June 14,1989, the Under Secretary of Defensefor
                     Acquisition limited ICOMground radio production to about one-half of
                     the planned rate of 1,376 radios per month until various conditions are
                     met. The Army also revised its test and evaluation strategy by schedul-
                     ing an operational test of the ICOMground radio for June 1990, nearly 9
                     months earlier than previously scheduled.

                     However, becauseof the acceleratedtest schedule,,the Army will test an
                     earlier production version of the radio that is not contractually required
                     to meet the 1,260-hour reliability criterion. Army officials said, how-
                     ever, that the radio tested must fully meet the reliability and other crite-
                     ria in operational testing or the Army will not increase production or
         .   Y       exercise the next option of the ICOMground radio contract scheduled for
                     November 1990.

                     Page2                              GAO/NSIAD9O43OBR
                         As in the revised ground radio acquisition strategy, the operational test
Ney Strategy Reduces     to justify initiating full-rate production for the airborne radio has been
Risk to Airborne Radio   acceleratedby 9 months to June 1990. The Army will not proceed with
Acduisition              full-rate production until the radio meets reliability and other criteria
                         and is approved by the DefenseAcquisition Board. The Army deferred
                         exercise of the next option, option 3, until November 1990, by which
                         time the test, evaluation, and production decision should be completed.
                         The decision to delay option 3 until November 1990 could incur up to
                         $11.6 million in stretch-out costs. However, the Army decided to delay
                         the option to conform with DODguidance for testing before buying. The
                         Army will be negotiating these stretch-out costs before the exercise of
                         option 3 and expects the final cost figure to be lower.

                         Limiting production of ground radios has considerably reduced the risk
Conclusions              associatedwith the prior acquisition strategy. Army officials have
                         stated that they will not enter full-rate production until the ground
                         radio fully meets reliability and other test criteria.

                         The Army has also reduced the risk in the airborne radio acquisition
                         strategy by conducting an operational test earlier than originally
                         planned and deferring the exercise of production options. Furthermore,
                         Army officials have stated they will not enter full-rate production
                         unless the airborne radio meets the reliability and other test criteria.

                         Appendix I discussesthe results of our review in more detail. The objec-
                         tive, scope,and methodology of our review are set forth in appendix II.
                         We discusseda draft of this report with DUDand Army officials and
                         included their commentswhere appropriate. As agreed with your
                         offices, unless you publicly announceits contents earlier, we plan no
                         further distribution of this report until 10 days from the date of the
                         letter. At that time, we will send copiesto the Secretariesof Defenseand
                         the Army and to interested parties and make copies available to others
                         upon request.

                         Page8                             GAO/NSIAD-BO-SOBR

Pleasecontact me at 276-4841 if you or your staff have any questions
concerning the report. Other major contributors to this report are listed
in appendix III.

Director, Command,Control, Communications,
  and Intelligence Issues

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Letbr                                                                                     1

Apbendix I                                                                               8
Ris!ksReducedWith       Background
                        Radios on Contract
thd SINCGARS            Modified Strategy ReducesRisk on Ground Radio                   10
AC uisition Strategy       Production
                        New Strategy ReducesRisk to Airborne Radio Acquisition          13
Ap$endix II                                                                             15
Objective, Scope,and
Appendix III                                                                            16
Major Contributors to
Tl$s Report
Tables                  Table 1.1:Contract Quantities for SINCGARS                       8
                        Table 1.2:Comparison of Army’s Previous and Current             12
                            Acquisition Strategies for ITT Corporation ICOM
                            Ground Radios


                        DOD     Department of Defense
                        ICQM    integrated communications security
                        SINCGARSSingle Channel Ground and Airborne   Radio System

                        Page6                          GAO/NSIALbBOWBR
                                                                    Communhtlom Acquisition

    Page7   GAO/NSIAD9O-SOBR
                ReducedWith the SINCGARS

                                           is the Army’s
                                    SINCGARS               next generation of very high frequency combat
Background                          radios. The infantry, armored, artillery, and airborne forces will use
                                    these radios, The Army expects to spend $6.5 billion to field 351,000
                                    ground radios and 14,000 airborne radios by fiscal year 2004. The other
                                    military servicesexpect to spend $418 million for about 42,000 ground
                                    radios with more than 80 percent of these radios going to the Marine
                                    The Army approved the requirement for the radios in 1974, and
                                    awarded production contracts with options for additional radios to the
                                    ITT Corporation for ground radios and airborne radios in 1983 and
                                    1986, respectively. In 1988,the Army awarded General Dynamics Cor-
                                    poration a contract for additional ICOMground radios.

                                    Of the 366,000 radios the Army plans to buy, three contracts have been
Radios on Contract                  awarded with options to buy up to 76,970 radios, as shown in table I. 1.
Table 1.1:Contract Quantities for
SlNCCjARS                                                        Number of Radios’
                                                                 ITT       ITT Dynamics
                                    Contract                 Ground Airborne       Ground Comments
                                    Basic                         650           150           400 ITT radios are normoM.
                                    Option 1                    3,200           720         1,725 ITT radios are non-Cob!.
                                    Option 2                    8,250         1,200        10,375 ITT ground option is for 6,250 non-
                                                                                                  ICOM and 2,000 ICOM radios.
                                    Option 3                   16,000         1,800        16,500 ITT ground option is for 6,375 non-
                                                                                                  ICOM and 9,625 ICOM radios.
                                    Option 4                   16,000          N/Ah          N/Ah
                                    Total                     44,100         3,870        29,000
                                    aAll radios are ICOM models unless otherwise stated

                                    bN/A = Not applicable.

                                    Five options remain to be exercised:option 4 of the ITT ground radio
                                    contract, option 3 of the ITT airborne radio contract, and all three
                                    options of the General Dynamics ground radio contract.

Ground Radio                        The ITT ground radio contract with four options is for as many as
                                    44,100 radios-16,476 are versions with an external or non-IcoMdevice
                      *             and 27,626 are versions with ICOMinternal to the radio. In 1984, ITT
                                    Corporation began developing the ICOMmodel while producing the non-
                                    ICOMmodel. The ICOMradio is expected to be lighter and more reliable

                                    Page8                                             GAO/NSIAD-9O-SOBR
                           AppendixI        \
                           RbkaReducedWith the SINCGABB
                           Acqubition Strategy

                           than the non-IcoMversion and provide greater operational effectiveness
                           and reliability.
Non-I M Ground Radio       In 1986,the non-IcoMradio failed to meet reliability specifications dur-
                           ing first article testing. As a result, radio production was delayed about
                           27 months. The Army corrected the reliability problems for the vehicu-
                           lar and fixed station versions of the non-IcoMground radio. In 1989, the
                           Director of Operational Test and Evaluation certified the non-IcoM
                           ground radio operational reliability.
                           However, ITT’s non-IcoMbackpack version did not meet the operational
                           reliability threshold and was not certified. Beginning in November 1989,
                           additional field testing of the nOn-ICOMbackpack radio was done to
                           demonstrate that the problems were corrected. Test results are being
                           evaluated and a final report is expected in early 1990.
ICOMGround Radio           In May 1988, ICOMradio production beganunder option 2 of ITT’s
                           ground radio contract along with nOn-ICOMradios. (Seetable I. 1.) The
                           Army exercisedoption 3 in June 1989, including ICOMand nOn-ICOM
                           radios. ITT will only produce ICOMground radios after option 3. The ICOM
                           radio is a major design changefrom the non-IcoMradio since,of 16 mod-
                           ules, 6 modules were modified and 2 new modules were added in the
                           ICOMradio. The options were part of a firm fixed-price contract with
                           specific exercisedates and prices. Changesto any exercisedate would
                           affect cost and schedule.
Secon&SourceGround Radio   The Army’s acquisition strategy included a second-sourceproduction
                           contract to obtain competitive pricing, technological improvements, and
                           an increasedproduction base.In 1988, the Army selectedGeneral
                           Dynamics as its secondsource and awarded it a basic contract with
                           three options for as many as 29,000 ICOMground radios. General Dynam-
                           ics’ radios are strictly ICOMground radios that are to look and perform
                           like the ITT version even though their internal parts are not inter-
                           changeable.The Army plans to exerciseGeneralDynamics option 1 of
                           the contract in September 1990.

Airborne Radio             The ITT Corporation’s airborne radio contract with options for addi-
                           tional radios is for 3,870 radios-870 non-IcoMsand 3,000 ICOMS.Air-
                           borne nOn-ICOMradios consist of two units separate from the receiver/
                           transmitter: one is for the communications security function and the
                           other is for the data rate adapter function, which allows interoperability
                           with other Army equipment by varying the rates of data input. The ICOM

                           Page9                             GAO/NSIAIM@99B&
                          IuelrsReducedWith the SINCGARS

                          version combinesthe two functions into one unit external to the
                          receiver/ transmitter. This design is different from the ground ICOM
                          radio where the communications security function is embeddedin the
                          Airborne ICOMdevelopment began in 1987 and airborne ICOMreceiver/
                          transmitter production began in 1989. The first delivery of production
                          ICOMreceivers/transmitters will be from contract option 2 in May 1990.
                          These units will be used for operational testing in June 1990. Production
                          of the ICOMdata rate adapter is to begin with option 3 in November

Fikcal Year 1990 Budget   In November 1989, House and SenateAppropriations confereesreduced
Reduction                 the Army’s fiscal year 1990 request for the SINCGARS  program from
                          $168.7 million’ to $80 million. They specified $30 million for the second-
                          sourceGeneral Dynamics ground radio and $30 million for the ITT air-
                          borne radio, The confereesdid not specify use of the remaining $20 mil-
                          lion Although, the Army had requested funding for the ITT ground
                          radio to exercise option 4 in May 1990,the exerciseis now scheduledfor
                          fiscal year 1991.

                          The Army has restructured its SINCGARS  ground radio acquisition strat-
Modified Strategy         egy to reduce program risks. This restructuring occurred becauseof con-
@educesRisk on            gressional and DODInspector General concernsabout the risks of
Ground Radio              entering full-rate production of ITT Corporation’s ICOMradio before
                          operational testing. The new strategy involves (1) a lower rate of pro-
Production                duction until a successfuloperational test is completed and (2) acceler-
                          ating the test scheduleby 9 months. Becauseof these changes,fewer
                          production radios than previously planned will be produced before oper-
                          ational testing.
                          However, becauseof the acceleratedtest schedule,the Army will test an
                          earlier production version of the radio rather than the full-production
                          version. Although the earlier production units are not contractually
                          required to meet the 1,260-hour reliability criterion, Army officials said
                          that they will not enter full-rate production until that reliability crite-
                          rion and other test criteria are met.

                                                                               for theantidrugprogram.

                          Page10                                GAO/NSIAD-90-8OBR
                                                                               communication Acquisition
                             AppendkI     I
                             Rida ReducedWith the SINCGARS
                             Acqu&9ition   Strategy

Prioi Acquisition Strategy   The Army’s acquisition strategy until June 1989 was to exercise option
                             3 of ITT’s ground radio contract in May 1989 and option 4 in May 1990
                             for a total of 22,000 ICOMradios. The Army had scheduled an initial
                             operational test and evaluation for March and April 1991, after exercise
                             of these options, using option 3 production ICOMground radios for the
                             On May 12,1989, the Under Secretary of Defensefor Acquisition autho-
                             rized the exercise of option 3. However, the Army revised its acquisition
                             strategy in responseto concernsraised by the DODInspector General and
                             the Congress.The DODInspector General issued a report on May 16,
                             1989, which stated that option 3 was full-rate production and should not
                             be exercised until (1) the ICOMradio undergoesoperational testing and
                             (2) Director, Operational Test and Evaluation certifies its operational
                             effectiveness and suitability for combat. Then on May 24,1989, the
                             Director, Operational Test and Evaluation reported that he could not
                             certify the ITT ICOMground radio becauseit did not meet the 1,260-hour
                             criterion for operational reliability during a limited early user test. Con-
                             gressional authorization committees expressedconcernsover the exer-
                             cising of options 3 and 4 without an operational test. In addition, they
                             believed that program restructuring was needed.

Revised Acquisition          In responseto congressionaland DODInspector General’s concerns,on
Strategy                     June 14,1989, the Under Secretary of Defensefor Acquisition limited
                             ITT option 3 ICOMground radio production to 730 radios per month, or
                             about one-half the planned quantity of 1,376 ICOMradios per month.
                             Further, the Under Secretary specified that the reduced production rate
                             could not be exceededuntil (1) the Army successfully completed opera-
                             tional testing and evaluation, (2) the Director, Operational Test and
                             Evaluation certified the operational suitability and effectiveness of the
                             radios, and (3) the DefenseAcquisition Board approved it.
                             The Army revised its test and evaluation strategy to comply with the
                             Under Secretary’s actions. The revised strategy calls for operationally
                             testing 176 ICOMground radios in June 1990, nearly 9 months earlier
                             than previously scheduled.Table I.2 comparesthe major changes
                             between the previous and current acquisition strategies.

                             Page11                             GAO/‘NSIAD-SO-SOBR
                                           RisksR4zduced With the SINCGARS

Table! 1.2:Compariron of Army’s Previoue
and went Acqulrltlon Strategies for                                                     Previous                               Current
ITT Cf rporation ICOMGround Radios         Event                                    Quantity                  Date        Quantity          Date
                                           Option 3 exercise                            9,625                 6189            9,625         6189
                                             Monthly production rate                    1,375                                   730
                                           Option 4 exercise                           12,375                 5/90           12,375a        11/90
                                           Operational test                                                   3191                          6190
                                           Additional radios under
                                             contract before operational
                                             test                                      22,000                                 9,625
                                           ‘Of the 16,CGOground radios available under option   4, the   Army plans to buy 12,375.

Arjny Assessment of Risk                   Under the new test schedule,the Army will test radios that are not con-
in Early Testing                           tractually required to meet the reliability requirement of the option 3
                                           radios. Becausethe test schedule was moved to June 1990, the only
                                           radios available to test are the ICOM initial production radios from option
                                           2 instead of the later production radios from option 3 as planned. Option
                                           3 radios are more likely to meet reliability requirements than those from
                                           option 2. This is becausethe option 2 initial production radios to be
                                           tested are only contractually required to meet a 986-hour reliability
                                           requirement instead of the 1,260 hours required beginning with option
                                           3. For this reason, the Army had planned to use the later production
                                           option 3 radios for operational testing.

                                           SomeArmy and Office of the Secretary of Defenseofficials are con-
                                           cerned that there may be sometechnical risk with using earlier produc-
                                           tion radios than those intended for the operational test. For example,
                                           Army Operational Test and Evaluation Agency officials stated that the
                                           radios to be tested are not the later production radios that the Army had
                                           planned to test and field, and problems could occur when using the ear-
                                           lier production radios. The risk is that further testing could be required
                                           if the radios do not meet the 1,260-hour reliability criterion.

                                           However, Army officials are confident that option 2 ICOM radios will not
                                           only exceedthe 986-hour contractual requirement but also exceedthe
                                           1,260-hour reliability criterion during production reliability acceptance
                                           testing. They basedtheir optimism on completed developmental, pilot
                                           production, and initial production reliability acceptancetest results.
                                           According to an Army program official, initial production reliability
                                           acceptancetest results demonstrated over 1,600-hour reliability. This is
                                           based on testing at the contractor’s facilities and not field testing. Army

                                           Page12                                         GAO/NSJAD-90-8OBR


                         RIda ReducedWith the SINCGARS

                         program officials assured us that they would not go to full-rate produc-
                         tion and would defer option exercisesunless the 1,250-hour reliability
                         requirement is fully met during the June 1990 operational test.

                         The Army deferred option 4 of the ITT ground radio contract to Novem-
                         ber 1990. According to an Army program official, the Army will negoti-
                         ate any stretch-out costs before the exercise of option 4.
                         In the summer of 1989, the Army made changesto its airborne radio
New Strategy Reduces     acquisition strategy to reduce risk. However, in February 1990, the
Risk t0 Airborne Radio   Army again revised its acquisition schedule and deferred the airborne
Acquisition              contract option by about 9 months. Although this changewill result in
                         stretch-out costs,the Army decision was based on a DODpolicy of testing
                         before buying.

Strategy ReducesRisk     In August 1989, in line with its changeto the ground radio test schedule,
                         the Army revised its airborne acquisition strategy by accelerating the
                         operational test to June 1990, nearly 9 months earlier than previously
                         scheduled.The Army still planned to exercise production option 3 as
                         scheduled in February 1990, which would have occurred before the test.
                         Subsequently, the Army decided to award a contract in February 1990
                         for long lead items only and defer exercising the actual production of
                         option 3 until November 1990 after the test.

                         The Army also considered deferring the entire option 3 exercise but
                         decided against it to maintain production line continuity and avoid
                         incurring $6 million to $10 million in projected stretch-out costs. In Feb-
                         ruary 1990, the Army decided to defer the entire option 3 to November
                         1990. Although this decision could incur up to $11.6 million in stretch-
                         out costs, the Army decided to delay the option to conform with DOD
                         guidance for testing before buying. The Army will be negotiating these
                         stretch-out costs before the exercise of option 3 and expects the final
                         cost figure to be lower.

Army Addresses           While some risks remain in the new acquisition strategy, the Army does
Remaining Risk”          not plan to make a full-rate production decision until the airborne radio
                         successfully passesan operational test. According to program officials,
                         the scheduled June 1990 operational test will use a production ICOM
                         receiver/transmitter with developmental communications security and
                         data rate adapter componentsin one package.

                         Page13                             GAO/NSIADZH)-BOBR
Appendh I
RIda Rducad With the SINCGARS
Acquldtion Strategy

Using a developmental prototype of a key component for the opera-
tional test could increaserisk that the radios will not meet the required
reliability criterion. This could result in the need for further tests before
entering full-rate production. However, this is the only equipment avail-
able for the test since a complete production version will not be availa-
ble until option 3 radios are delivered. Deliveries would begin in May
1991 under the long lead item approach compared to January 1992
under the latest plan.
DOD  and Army officials said that the Army will not make a full-rate pro-
duction decision until the radio successfully demonstrates performance
and reliability requirements in the June 1990 operational test and the
Director, Operational Test and Evaluation certifies that the airborne
radios are operationally effective and suitable. An Operational Test and
Evaluation official told us that such certification would not only depend
upon a successfulJune 1990 test, but also on using suitable radio models
for the test that are representative of the production model. As a result
of this strategy, the Army will defer buying the 1,800 radios available
under option 3 until after the test.

Page14                             GAO/NSIADBO-gOBR
Appendix II

Objective,Scope,and A&eihodology

              Our objective was to determine whether the Army’s revised acquisition
              strategy adequately addressescongressionalconcernsabout the Army’s
              prior plans to increase production before an operational test is made. We
              focused our work on the test and acquisition strategies, and the risks
              associatedwith both the ground and airborne radio programs.

              During our review, we interviewed officials knowledgeable of the
                     program and reviewed documents at numerous DODand Army
              organizations. We visited the Army Communications-ElectronicsCom-
              mand, Fort Monmouth, New Jersey; U.S. Army Operational Test and
              Evaluation Agency, Alexandria, Virginis and DOD’S Director, Opera-
              tional Test and Evaluation and the Assistant Secretary of Defensefor
              Command, Control, Communications, and Intelligence, Washington, DC.
              In addition, we observed an experimental field test at Fort Hood, Texas,
              and visited ITT’s production facilities at Fort Wayne, Indiana.
              Our review was performed from August 1988 to August 1989 in accord-
              ance with generally acceptedgovernment auditing standards.

              Page16                           GAO/NSIA.DfJO-LWBR
Aphndix III

 I    Contributors to This Report

                        Howard R. Manning, Assistant Director
Ndtional Security and   Edward J. George,Jr., Assignment Manager
International Affairs
Dibision, Washington,


(ass 109)               Page16                         GAO/NSIAD-BO-gOBR