., _--.-." __...... - ___, --I--- -I-- _--. -_-"--_--_--- --- -._- -_-. -__ lMil~(~ll I !)!)(I COMMUNICATIONS ACQUISITION Issues Invo lving Army’s Single Channel Ground and Airborne Radio System 3 141030 united states General Accounting Offlce Washington, D.C. 20548 National Security and International Atbirs Division B-146868 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 radios. 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. Page1 GAO/NSIAD-gOWBR Communicationa Acquisition 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 C~mmunbationaAcquisition 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 C!ommunicationa Acquisition , I El46868 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. h&/e- Director, Command,Control, Communications, and Intelligence Issues Page4 GAO/NSIAD-QO-fMBR Communicatione Acquisition Y Page5 GAO/NSIAD-BO-SOBR Communicationa Acquisition Letbr 1 Apbendix I 8 Ris!ksReducedWith Background Radios on Contract 8 8 thd SINCGARS Modified Strategy ReducesRisk on Ground Radio 10 AC uisition Strategy Production New Strategy ReducesRisk to Airborne Radio Acquisition 13 P Ap$endix II 15 Objective, Scope,and Me’thodology 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 Abbreviations Y DOD Department of Defense ICQM integrated communications security SINCGARSSingle Channel Ground and Airborne Radio System Page6 GAO/NSIALbBOWBR Communhtlom Acquisition w Page7 GAO/NSIAD9O-SOBR Communications Acquisition - ReducedWith the SINCGARS Stxategy 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 corps. 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’ General 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 Cmnmunicatio~Acquisition 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& Communications Acquisition AppendixI IuelrsReducedWith the SINCGARS AcquisitionStrategy 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 receiver/transmitter. 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 1990. 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. ‘TheArmy’sbudgetrequestwasinitiallyhigherbutwasreduced 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 test. 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 Communicationa Acquisition AppendixI RisksR4zduced With the SINCGARS AcquisitionStrategy 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 CommunicationsAcquisition ‘I I Appendix1 RIda ReducedWith the SINCGARS AcquisitionStrategy 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. 1 I 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 communicationsAcquisition 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 Communications Acquisition 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 SINCGARS 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 Cbmmunicatiom~ Acquisition Aphndix III Major I Contributors to This Report m Howard R. Manning, Assistant Director Ndtional Security and Edward J. George,Jr., Assignment Manager International Affairs Dibision, Washington, D.C. Office (ass 109) Page16 GAO/NSIAD-BO-gOBR Cann~unicatiox~Acquisition
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)