oversight

National Missile Defense: Risk and Funding Implications for the Space-Based Infrared Low Component

Published by the Government Accountability Office on 1997-02-25.

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

                  United States General Accounting Office

GAO               Report to Congressional Committees




February 1997
                  NATIONAL MISSILE
                  DEFENSE
                  Risk and Funding
                  Implications for the
                  Space-Based Infrared
                  Low Component




GAO/NSIAD-97-16
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      National Security and
      International Affairs Division

      B-272654

      February 25, 1997

      Congressional Committees

      In 1995, the Department of Defense (DOD) made plans for the space and
      missile tracking system—the low satellite component of the Space-Based
      Infrared System (SBIRS)—to be deployed in fiscal year 2006. In
      February 1996, the Congress directed the Secretary of Defense to
      restructure the SBIRS program and deploy the first space and missile
      tracking system (hereafter referred to as SBIRS-low) satellite in fiscal
      year 2002.1 The Congress also appropriated $264 million above DOD’s fiscal
      year 1996 and 1997 budget requests to support this deployment
      acceleration. The purpose was to ensure that the space and missile
      tracking system provided support to national and theater ballistic missile
      defenses sooner, rather than later.

      DOD has not implemented this congressional directive to accelerate
      SBIRS-low  deployment to fiscal year 2002. It stated that such acceleration
      was not possible because technical, funding, and management problems
      had delayed the scheduled launch of two demonstration satellites, the
      results of which were necessary before deciding to initiate the fabrication
      of operational SBIRS-low satellites. However, DOD is planning on
      accelerating deployment to fiscal year 2004 and has directed the Air Force
      to prepare cost estimates and program plans to support such deployment.

      DOD  originally estimated SBIRS-low life-cycle costs at $9.3 billion, which was
      part of a total estimated life-cycle cost of $22.6 billion for the SBIRS
      program during fiscal years 1995 through 2020. In October 1996, however,
      the Air Force revised SBIRS program costs and informed us that these
      estimates had decreased to $7.8 billion and $17.5 billion for fiscal years
      1997 through 2020, respectively. Of the approximate $5-billion total
      decrease, the Air Force attributed (1) $2.5 billion to using a lower inflation
      index and to excluding fiscal year 1995 and 1996 program costs and
      (2) $2.5 billion to plans for using fewer SBIRS-low satellites and different
      launch vehicles and to acquisition reform and commercial practices. In
      commenting on our draft report, DOD stated that as of December 1996,
      SBIRS-low program costs had decreased an additional $800 million, from
      $7.8 billion to $7 billion for fiscal years 1997 through 2020. However, DOD
      did not provide a reason for this reduction.




      1
       See the National Defense Authorization Act for Fiscal Year 1996 (P.L. 104-106, Feb. 10, 1996).



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                                     We reviewed the SBIRS-low program to determine the effects of changing
                                     the deployment date from fiscal year 2006 (the original schedule) to fiscal
                                     year 2002, 2003, 2004, or 2005. To do this, we relied on available Air Force
                                     data—some of which was in draft form and none of which, according to
                                     DOD, was verified by the Office of the Secretary of Defense. We performed
                                     this review under our basic legislative responsibilities and are addressing
                                     this report to you because the matters discussed fall within your
                                     Committees’ jurisdiction.


                                     Our assessment of four deployment options—fiscal years 2002, 2003, 2004,
Results in Brief                     and 2005—that would accelerate the SBIRS-low program from DOD’s
                                     originally planned fiscal year 2006 schedule shows some potential
                                     differences in risk and variations in funding requirements (see table 1).
                                     Our assessment was based on data prepared by the Air Force at various
                                     times between June 1995 and November 1996 using various assumptions.

Table 1: Program Risks and Funding
Variances in SBIRS-Low Deployment    Deployment options in      Program risk assessment    Estimated funding
Options Compared to the Original     fiscal year                comparison                 variances
Fiscal Year 2006 Schedule            2002                       Higher risk due to         Additional $2.1 billion
                                                                concurrent program         during fiscal years 1997
                                                                activities                 through 2002
                                     2003                       Higher risk due to         Additional $2.6 billion
                                                                concurrent program         during fiscal years 1997
                                                                activities                 through 2002
                                     2004                       Similar risk due to        Additional $509 million
                                                                sequential program         during fiscal years 1998
                                                                activities                 through 2003
                                     2005                       Similar risk due to        Up to $500 million less
                                                                sequential program         during fiscal years 1998
                                                                activities                 through 2003

                                     The fiscal year 2002 and 2003 options would result in higher program risk
                                     because of the high degree of concurrent activities between the planned
                                     first year of the flight demonstration and the development and fabrication
                                     of SBIRS-low satellites. In addition, although program officials stated that
                                     total life-cycle costs would not be affected, a substantial amount of
                                     additional funding would be required during fiscal years 1997 through 2002
                                     because of compressing the SBIRS-low development, fabrication, and
                                     deployment schedule. In commenting on our draft report, DOD stated that
                                     the higher costs of the fiscal year 2003 option was due to differences in
                                     technical configuration. DOD has not included these additional funding




                                     Page 2                                    GAO/NSIAD-97-16 National Missile Defense
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needs in its future years defense program; thus, the source of such funds
would need to be identified.2

If SBIRS-low deployment were scheduled for fiscal year 2004, the first year
of the flight demonstration and SBIRS-low engineering and manufacturing
development would be sequential, rather than concurrent, allowing time to
assess the demonstration results before making a milestone decision on
satellite development and fabrication. This schedule would make program
risk similar to the fiscal year 2006 schedule, which DOD considers to be
low. However, considerable additional funds during fiscal years 1998
through 2003 would be required because of program schedule
compression. Upon completing our field work, these additional funding
needs had not been included in DOD’s future years defense program.
However, in commenting on our draft report, DOD stated that recent
budgetary actions in December 1996 had identified and programmed the
additional funding in the fiscal year 1998 future years defense program.

Under the fiscal year 2005 option, flight demonstration and SBIRS-low
development and fabrication would also be sequential, rather than
concurrent. This schedule would also make program risk similar to the
fiscal year 2006 schedule. Funding requirements during fiscal years 1998
through 2003, however, would be less than those for DOD’s original
schedule for a fiscal year 2006 deployment. DOD and Air Force
representatives initially informed us that fewer funds would be required
because of planning for a more efficient production schedule. In
commenting on our draft report, however, DOD stated that fewer funds
were required because of a different satellite configuration and a lower
inflation rate.

The widely divergent results associated with these four deployment
options are directly linked to how soon SBIRS-low can and should be
scheduled to support national and theater ballistic missile defenses.
Although DOD is currently planning on a fiscal year 2004 SBIRS-low
deployment, the Congress has not rescinded the requirement in the
National Defense Authorization Act for Fiscal Year 1996 to accelerate
deployment to fiscal year 2002. How the Congress and DOD resolve these
differing views on deployment dates will determine how much program
risk may be taken and what the funding requirements would be.




2
 Planned program execution is dependent on stable funding. Ensuring that sufficient resources are
included in DOD’s future years defense program is essential for program stability.



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                     We have reported on numerous occasions about the risks associated with
                     program concurrency and of initiating production without adequate
                     testing. The SBIRS-low fiscal year 2002 and 2003 options are analogous
                     situations whereby a planned decision to fabricate satellites would be
                     made before the results of a critical flight demonstration are available.

                     At this point in time, however, the Congress does not have complete and
                     consistent information on the program risks and the need for additional
                     funding associated with the various options to accelerate SBIRS-low
                     deployment. The Air Force’s data on these options were prepared at
                     different times using different assumptions, and the Air Force recently
                     established a new SBIRS program baseline using revised life-cycle costs.

                     Appendix I contains the details of our assessment.


                     In commenting on a draft of this report, DOD stated that the report
Agency Comments      describes many of the issues and problems that have affected the program
and Our Evaluation   in the past year and that as recently as December 1996, the Air Force and
                     DOD made some key decisions to focus development and stabilize funding.
                     DOD indicated that, to provide budgetary and technical discipline, the
                     program has been upgraded to a major defense acquisition program and a
                     Defense Acquisition Board review has been scheduled for the spring of
                     1997. DOD also noted that it had added funding to enhance the program
                     definition/risk reduction phase of the program and had established a fiscal
                     year 2004 deployment date to best balance technical risk and available
                     funding.

                     According to DOD, the Congress has accepted these actions as being in
                     conformance with its objectives and will be provided additional
                     information following the Defense Acquisition Board review. Given these
                     developments, DOD believes that the dialogue on various deployment
                     options has been successfully concluded and disagrees with our
                     recommendation that it provide additional information on the fiscal year
                     2002, 2003, 2004, and 2005 deployment options.

                     Despite DOD’s apparent plans to deploy SBIRS-low in fiscal year 2004, the
                     Congress has not changed the requirement in the National Defense
                     Authorization Act for Fiscal Year 1996 for deployment in fiscal year 2002.
                     In addition, DOD officials could not provide documentation supporting
                     their claim of “broad congressional support” for the fiscal year 2004
                     deployment. DOD stated that (1) it had struggled with identifying



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                 deployment costs and technical risk for a variety of different satellite
                 options and deployment dates, (2) the different technical assumptions and
                 costing methodologies used for the various deployment options had
                 caused confusion and uncertainty in the Congress, and (3) our report
                 accurately identified these problems. Also, DOD representatives have
                 informed us that the current SBIRS-low cost estimate, a portion of which is
                 included in the fiscal year 1998 future years defense program, could
                 change pending the results of an independent cost analysis.

                 In view of these facts, we reaffirm our recommendation that DOD fully
                 inform the Congress about the feasibility and effects of accelerating
                 SBIRS-low deployment for the fiscal year 2002, 2003, 2004, and 2005
                 deployment options.

                 DOD’s comments also provided suggestions to improve the technical
                 accuracy and clarity of the report and we have incorporated them in the
                 text where appropriate. DOD’s comments are reprinted in their entirety in
                 appendix II.


                 To fully inform the Congress about the feasibility and effects of
Recommendation   accelerating SBIRS-low, we recommend that the Secretary of Defense
                 provide the congressional defense committees with complete, consistent,
                 and current information that discusses program risk, revised program
                 costs, and any additional funding needs and sources for the fiscal year
                 2002, 2003, 2004, and 2005 deployment options.


                 The Congress may wish to consider the costs and risks of DOD’s plans to
Matters for      deploy the first SBIRS-low satellite in fiscal year 2004, relative to the
Congressional    statutory requirement in the National Defense Authorization Act for Fiscal
Consideration    Year 1996 to deploy the first satellite in fiscal year 2002 and revise the
                 requirement as necessary.

                 If DOD does not provide the Congress with complete, consistent, and
                 current information on program risks, revised program costs, and any
                 additional funding needs and sources for the fiscal year 2002, 2003, 2004,
                 and 2005 deployment options for use in making its decision, the Congress
                 may wish to require that DOD provide it.




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              B-272654




              The scope of our review involved the SBIRS-low component of the SBIRS
Scope and     program and included an examination of program risks and changes in
Methodology   funding requirements for various SBIRS-low deployment options. The
              information for the options was developed by the Air Force at different
              times between June 1995 and October 1996 for different purposes to
              assess the feasibility of deploying SBIRS-low in fiscal years 2002, 2003, 2004,
              and 2005. Because the Air Force did not use the same assumptions to
              assess these options, a consistent comparison of changes in funding
              requirements was not possible. For example, the options included
              different satellite configurations and launch vehicles. According to DOD,
              these different assessments led to disparities in cost and technical
              estimates. Although we requested estimated funding requirements for each
              option year that used the same assumptions, the SBIRS program director
              stated that such a comparison was no longer meaningful because the Air
              Force was preparing for a fiscal year 2004 deployment option decision.
              Despite this lack of consistency, we believe that comparing this
              information with the fiscal year 2006 deployment schedule provides some
              indication of the funding and program risk differences.

              We performed our work primarily at the Air Force Space and Missile
              Systems Center and Aerospace Corporation in Los Angeles, California, and
              the U.S. and Air Force Space Commands in Colorado Springs, Colorado.
              We reviewed program requirements and briefings, acquisition and test
              plans, budgetary information, management reports, and internal
              memoranda.

              In addition, we held discussions with representatives and obtained
              documentation from the Office of the Deputy Under Secretary of Defense
              for Space, the Air Force’s Office of the Assistant Secretary for Acquisition,
              and the Ballistic Missile Defense Organization in Washington, D.C., and the
              Air Force’s Phillips Laboratory in Albuquerque, New Mexico. We also held
              discussions with and obtained documents from representatives of the
              TRW Space and Electronics Group and Hughes Aircraft Company, which
              is the contracting team that is developing and fabricating two flight
              demonstration satellites.

              We performed our work from October 1995 through September 1996 in
              accordance with generally accepted government auditing standards.




              Page 6                                    GAO/NSIAD-97-16 National Missile Defense
B-272654




We are sending copies of this report to the Secretaries of Defense, the Air
Force, the Army, and the Navy; the Director of the Ballistic Missile
Defense Organization; and the Director of the Office of Management and
Budget. We will make copies available to others upon request.

This report was prepared under the direction of Thomas J. Brew,
Associate Director, Defense Acquisitions Issues, who may be reached on
(202) 512-4841 if you or your staff have any questions concerning
information in this report. Major contributors to this report are listed in
appendix III.




Louis J. Rodrigues
Director, Defense Acquisitions Issues




Page 7                                   GAO/NSIAD-97-16 National Missile Defense
B-272654




List of Congressional Committees

The Honorable Strom Thurmond
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Ted Stevens
Chairman
The Honorable Daniel Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate

The Honorable Floyd D. Spence
Chairman
The Honorable Ronald V. Dellums
Ranking Minority Member
Committee on National Security
House of Representatives

The Honorable C.W. Bill Young
Chairman
The Honorable John P. Murtha
Ranking Minority Member
Subcommittee on National Security
Committee on Appropriations
House of Representatives




Page 8                              GAO/NSIAD-97-16 National Missile Defense
Page 9   GAO/NSIAD-97-16 National Missile Defense
Contents



Letter                                                                                              1


Appendix I                                                                                         12
                        Current DSP Replacement Plans                                              12
Program Plans,          Congressional Emphasis on Early SBIRS-Low Deployment                       13
Congressional           Flight Demonstration Satellites Are Critical to SBIRS-Low                  14
                        Assessment of SBIRS-Low Deployment Options                                 16
Direction, and
Deployment Options
Appendix II                                                                                        24

Comments From the
Department of
Defense
Appendix III                                                                                       31

Major Contributors to
This Report
Table                   Table 1: Program Risks and Funding Variances in SBIRS-Low                   2
                          Deployment Options Compared to the Original Fiscal Year 2006
                          Schedule

Figures                 Figure I.1: Fiscal Year 2002 and 2003 Deployment Options                   18
                          Compared to Fiscal Year 2006 Original Schedule
                        Figure I.2: Fiscal Year 2004 Deployment Option Compared to                 20
                          Fiscal Year 2006 Original Schedule
                        Figure I.3: Fiscal Year 2005 Deployment Option Compared to                 22
                          Fiscal Year 2006 Original Schedule




                        Abbreviations

                        DOD       Department of Defense
                        DSP       Defense Support Program
                        EMD       engineering and manufacturing development
                        SBIRS     Space-Based Infrared System


                        Page 10                               GAO/NSIAD-97-16 National Missile Defense
Page 11   GAO/NSIAD-97-16 National Missile Defense
Appendix I

Program Plans, Congressional Direction,
and Deployment Options

                    The Department of Defense’s (DOD) Defense Support Program (DSP)—a
                    strategic surveillance and early warning satellite system with an infrared
                    capability to detect long-range ballistic missile launches—has been
                    operational for about 25 years. Since the early 1980s, DOD’s efforts to
                    replace DSP with more modern capability have been unsuccessful because
                    of immature technology, high cost, and affordability issues. These aborted
                    efforts have included the Advanced Warning System; the Boost
                    Surveillance and Tracking System; the Follow-on Early Warning System;
                    and the Alert, Locate, and Report Missiles system.

                    DSP’s capabilities in theater situations became increasingly important
                    during the 1991 Persian Gulf War with the launching of SCUD missiles by
                    Iraq. However, more timely and accurate information was needed on these
                    short-range ballistic missile launches. The Air Force subsequently made
                    changes in DSP data processing to achieve an enhanced capability—a
                    system known as Attack and Launch Early Reporting to Theater—without
                    modifying the DSP satellite sensors. However, DOD concluded that
                    expanding theater warning requirements necessitated new sensor
                    technology, and it began planning for an improved infrared satellite sensor
                    capability that would support both strategic and theater operations.


                    In 1994, DOD initiated a study1 to consolidate various infrared space
Current DSP         requirements. Based on the study results, it selected the Space-Based
Replacement Plans   Infrared System (SBIRS) to replace DSP. SBIRS is expected to use more
                    sophisticated infrared technologies, which are intended to enhance the
                    detection and tracking of strategic and theater ballistic missile launches
                    and provide critical data for national and theater missile defense systems,
                    than DSP.

                    The SBIRS architecture consists of space and ground processing segments.
                    The space segment contains both high and low orbit components. The
                    high component is to consist of four satellites operating in
                    geosynchronous earth orbit and sensors on two host satellites operating in
                    a highly elliptical orbit.2 In commenting on our draft report, DOD officials
                    stated that for planning purposes the SBIRS-low component consists of 24
                    operational satellites in low earth orbit. However, the SBIRS-low



                    1
                     Referred to as the Office of the Secretary of Defense Space-Based Warning Summer Study.
                    2
                     A satellite in a geosynchronous orbit has a circular period of revolution that is equal to the period of
                    the earth’s rotation about its axis, or 24 hours. A satellite in a highly elliptical orbit spends most of its
                    time over a designated area of the earth, known as apogee dwell.



                    Page 12                                                    GAO/NSIAD-97-16 National Missile Defense
                    Appendix I
                    Program Plans, Congressional Direction,
                    and Deployment Options




                    constellation could consist of more or less satellites depending on the
                    results of contractor cost and performance studies.

                    The ground processing segment is to consist of a mission control station in
                    the United States, a communication system, and two overseas ground
                    stations. The Air Force plans to develop the ground segment in three
                    increments. Increment I is to consolidate the existing DSP ground
                    processing operations. During increment II, the Air Force plans to
                    integrate the high component satellites’ data processing with the
                    consolidated DSP operations. Increment III is to incorporate the functions
                    and equipment necessary to support SBIRS-low when it is deployed.

                    DOD decided to deploy the high orbit component beginning in fiscal
                    year 2002 because of (1) an urgent need to replace DSP, primarily for
                    theater missile defense purposes; (2) the low program risk associated with
                    technology, infrastructure, and schedule; and (3) the system’s ability to
                    meet key performance parameters. DOD determined that SBIRS-low could be
                    deployed in fiscal year 2006 and planned to make a deployment decision in
                    fiscal year 2000 after key technologies and operating concepts were
                    validated on two demonstration satellites scheduled for launch in fiscal
                    year 1999. DOD’s rationale for deploying SBIRS-low at a later date was
                    because (1) the national missile defense mission for SBIRS, which only this
                    component could satisfy, was not a key requirement and (2) the risk
                    associated with antiballistic missile treaty issues, technology, cost,
                    schedule, and operational complexity was high.


                    The National Defense Authorization Act for Fiscal Year 1996 required the
Congressional       Secretary of Defense to accelerate the space and missile tacking system
Emphasis on Early   (now called SBIRS-low) deployment of the first satellite to fiscal year 2002.
SBIRS-Low           The purpose was to ensure that SBIRS-low provided support to national and
                    theater ballistic missile defenses sooner, rather than later. To help achieve
Deployment          this objective, the Congress appropriated an additional $135 million above
                    DOD’s fiscal year 1996 budget request.


                    During deliberations on DOD’s fiscal year 1997 budget request, the
                    Congress reiterated its desire that SBIRS-low deployment be accelerated,
                    and it appropriated $129 million above DOD’s budget request to do so. The
                    Congress also expressed disappointment with DOD for not (1) responding




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                          Appendix I
                          Program Plans, Congressional Direction,
                          and Deployment Options




                          in a timely manner to the fiscal year 1996 statutory requirement and
                          (2) obligating all of the fiscal year 1996 SBIRS-low funds as directed.3

                          In responding to the congressional direction, the Under Secretary of
                          Defense for Acquisition and Technology wrote, in a July 24, 1996, letter to
                          congressional committees, that accelerated deployment of SBIRS-low
                          beginning in fiscal year 2002 was not possible because technical, funding,
                          and management problems had delayed the scheduled launch of the two
                          demonstration satellites from the first quarter to the third quarter of fiscal
                          year 1999. According to Air Force officials, this delay prevented basing a
                          milestone decision to enter the engineering and manufacturing
                          development (EMD) phase of the SBIRS-low acquisition process, scheduled
                          for the first quarter of fiscal year 2000, on the results of the planned flight
                          demonstration.

                          Earlier, in a July 10, 1996, letter, the Under Secretary requested that the
                          Defense Science Board assess the viability of accelerating SBIRS-low
                          deployment. In September 1996, based on the Board’s findings and
                          recommendations, the Under Secretary directed the Air Force to
                          (1) prepare for a SBIRS-low deployment decision no later than April 15,
                          1997, and (2) develop an acquisition strategy, an acquisition program
                          baseline, an independent cost assessment, and a preliminary test plan that
                          would support SBIRS-low deployment in fiscal year 2004. The purpose of
                          the planned April decision was to choose between the fiscal year 2004
                          option and the fiscal year 2006 original schedule. Also, in September 1996,
                          the Under Secretary appeared before a congressional panel, testifying on
                          ballistic missile defense, and stated that DOD was considering the
                          affordability of accelerating SBIRS-low deployment to fiscal year 2004.4 In
                          commenting on our draft report, DOD stated that a fiscal year 2004
                          deployment decision was made in December 1996. However, the
                          Acquisition Decision Memorandum documenting this decision will not be
                          finalized until the spring of 1997.


                          The flight demonstration program includes three satellites—one low
Flight Demonstration      altitude demonstration system satellite for competitive development
Satellites Are Critical   purposes and two satellites for flight demonstration purposes. The low
to SBIRS-Low              altitude demonstration system satellite is to (1) provide an alternative to


                          3
                           DOD subsequently released all of these funds to the Air Force, which has until September 30, 1997, to
                          obligate them.
                          4
                           Testimony before a joint session of the Subcommittee on Military Research and Development and the
                          Subcommittee on Military Procurement of the House Committee on National Security, Sept. 27, 1996.



                          Page 14                                               GAO/NSIAD-97-16 National Missile Defense
Appendix I
Program Plans, Congressional Direction,
and Deployment Options




the contractor team that is now fabricating the two flight demonstration
satellites and (2) reduce program and technical risks.

The two flight demonstration satellites are to validate the integration of
key technologies and operational concepts that are critical to national
missile defense and other SBIRS missions. The Air Force draft test plan calls
for launching a single ballistic missile target to demonstrate the ability of
these satellites to perform this national missile defense function. Also, the
Air Force intends to participate in Ballistic Missile Defense Organization
tests designed to further demonstrate the ability of the two satellites to
detect and track ballistic missiles. It plans to use the results of the
demonstration and tests to model and simulate the full performance
capability of a constellation of operational SBIRS-low satellites.

In commenting on our draft report, DOD stated that it has approved
additional theater and national missile defense targets for the flight
demonstration program. In doing so, it programmed $149 million for one
theater and one national missile defense target for the low altitude
demonstration system and one theater missile defense target for the flight
demonstration satellites. According to DOD officials, these additional
missile tests were added to give needed statistical validity to the test
results.

The results of the planned flight demonstration, prior to the Board’s
recommendations, were intended to form the basis for decision-making
regarding SBIRS-low development, fabrication, and deployment—that is
entry into the EMD phase of the acquisition process. The primary emphasis
is on the ability to detect and track ballistic missiles and their warheads
throughout flight and distinguish between missile warheads and decoys.
According to program officials, performing this function autonomously
while in orbit is one of the most complex and technologically challenging
operational concepts ever attempted. They believe that a national missile
defense system with space-based sensors depends on a successful flight
demonstration program. They stated that proceeding into the EMD phase
prior to demonstrating this capability would not provide an opportunity to
assess lessons learned, thus introducing unacceptable risk into the
program.

In commenting on our draft report, DOD emphasized that the flight
demonstration program was extended from 1 year to 2 years. It stated that
the extension was needed to participate in scheduled Ballistic Missile
Defense Organization tests, as well as to fully use the satellites during their



Page 15                                   GAO/NSIAD-97-16 National Missile Defense
                            Appendix I
                            Program Plans, Congressional Direction,
                            and Deployment Options




                            2- to 3-year life expectancy. However, DOD officials stated that information
                            collected during the first year of the test program is the most critical for
                            making a decision of whether to enter EMD.

                            We have reported on numerous occasions about the risks associated with
                            program concurrency and of initiating production without adequate
                            testing. SBIRS-low could be an analogous situation. For example, in 1990,
                            we concluded that although concurrency can be used to expedite the
                            development and production of weapon systems, rushing into production
                            (in this case, satellite fabrication) before critical tests (in this case, flight
                            demonstration) are successfully completed has resulted in the purchases
                            of systems that do not perform as intended. And, in 1994, we reported that
                            programs are often permitted to begin production with little or no
                            scrutiny, and the consequences have included procurement of substantial
                            inventories of unsatisfactory weapons requiring costly modifications to
                            achieve satisfactory performance, and in some cases, deployment of
                            substandard systems to combat forces.5


                            In response to congressional direction to accelerate SBIRS-low deployment
Assessment of               to fiscal year 2002, the Air Force assessed a range of potential deployment
SBIRS-Low                   options that included fiscal years 2002, 2003, 2004, and 2005. The
Deployment Options          information for these option years was prepared at different times
                            between June 1995 and October 1996 and did not always contain the same
                            assumptions. Although a consistent comparison with the fiscal year 2006
                            original deployment schedule of changes in funding requirements for each
                            option was not made, the assessments provide some indication of the
                            differences in funding requirements.


Fiscal Year 2002 and 2003   If SBIRS-low deployment were accelerated from the originally planned date
Options Create Higher       of fiscal year 2006 to fiscal year 2002 or 2003, DOD would face higher
Program Risk and            program risks and substantial additional funding requirements in its future
                            years defense program. Both of these deployment options are similar
Substantial Additional      because the increased risk would result primarily from the scheduled
Funding Requirements        concurrent activities between the first year of the flight demonstration
                            program and the EMD phase.

                            Based on the currently planned launch of the two demonstration satellites
                            in the third quarter of fiscal year 1999, from 4 to 8 months of the scheduled

                            5
                              Weapon Systems: Concurrency in the Acquisition Process (GAO/T-NSIAD-90-43, May 17, 1990) and
                            Weapons Acquisition: Low-Rate Initial Production Used to Buy Weapon Systems Prematurely
                            (GAO/NSIAD-95-18, Nov. 21, 1994).



                            Page 16                                            GAO/NSIAD-97-16 National Missile Defense
Appendix I
Program Plans, Congressional Direction,
and Deployment Options




first year of the flight demonstration program would overlap with the EMD
phase. Thus, a decision on whether the system should enter the EMD phase
could not be based on an analysis of demonstrated capabilities. As
discussed in the previous section, DOD officials stated that information
obtained during the first year of the flight test program is the most critical
in deciding whether to enter EMD. During EMD, the contractor is to finalize
SBIRS-low design, validate selected manufacturing and production
processes, and fabricate and deploy the satellites. The decision to enter
EMD is important because DOD will be committing several billion dollars to
buy up to 24 or more satellites. If flight demonstration reveals that design
changes are needed to achieve satisfactory performance, or if long lead
parts for the SBIRS-low operational satellites became obsolete because their
acquisition was based on an immature system design, program costs
would increase.

Some program risk could also be expected because the pre-EMD phase
would start from 9 to 12 months prior to launch of the flight demonstration
satellites. During the pre-EMD phase, SBIRS-low users, operators, testers,
and competing contractors are to refine and document system
requirements, functions, and design concepts. The contractors are to also
conduct cost and performance trade-offs between system requirements.
Under this schedule, it would not be possible for requirements
development and system design to be based on the results of the flight
demonstration. In addition, SBIRS program officials stated that such
concurrent scheduling would likely create difficulty in processing and
assimilating the large amounts of data that would be expected from the
flight demonstration and pre-EMD acquisition phases. Because of this
highly concurrent schedule, the Defense Science Board questioned the
value of the flight demonstration effort if the fiscal year 2002 deployment
option were chosen.6 It stated that under the fiscal year 2002 option the
effort should be terminated, ground testing should be employed instead,
and the SBIRS-low program should be restructured to proceed directly into
pre-EMD in fiscal year 1997.

Figure I.1 shows the planned acquisition schedules for the flight
demonstration and the pre-EMD and EMD phases for the fiscal year 2002 and
2003 options, as compared to the fiscal year 2006 original schedule.




6
 The Board did not include a fiscal year 2003 option in its report.



Page 17                                                  GAO/NSIAD-97-16 National Missile Defense
                                              Appendix I
                                              Program Plans, Congressional Direction,
                                              and Deployment Options




Figure I.1: Fiscal Year 2002 and 2003 Deployment Options Compared to Fiscal Year 2006 Original Schedule

Flight
Demonstration
-- Development
-- Demonstration


FY 2002
                            AAAA
                            AAAAAAAA
                                 AAAAAAAAAAAA AA
-- Pre-EMD                  AAAA AAAAAAAA
                                     AAAAAAAA
                                          AAAAAA
                                              AA
                            AAAAAAAAAAAAAAAAAA
                                               AAAA
                                               AAAAAAAA
                                                    AAAA AAAAAAAA AAAAAAAA AAAAAAAA AAA
-- EMD                                         AAAA AAAAAAAA
                                                         AAAAAAAA
                                                             AAAAAAAA
                                                                  AAAAAAAA
                                                                      AAAAAAAA
                                                                           AAAAAAAA
                                                                               AAAAAAA
                                                                                    AAA
                                               AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA



FY 2003
                                 AAAA
                                 AAAAAAAA AAAAAAAAAA
                                 AAAA AAAAAAAAAAAAAA
-- Pre-EMD                       AAAAAAAA
                                      AAAAAAAA
                                          AAAAAAAA
                                               AAAAAA
                                                   AA
                                                    AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
                                                    AAAA
                                                    AAAAAAAAAAAA  AAAAAAAA AAAAAAAA AAAAAAAA AA
-- EMD                                              AAAAAAAA
                                                         AAAAAAAA
                                                             AAAAAAAA
                                                                  AAAAAAAA
                                                                      AAAAAAAA
                                                                           AAAAAAAA
                                                                               AAAAAAAA
                                                                                    AAAAAAAA
                                                                                        AAAAAA
                                                                                             AA




FY 2006
-- Pre-EMD
-- EMD

               1995       1998         1999          2000         2001         2002         2003     2004      2005       2006
                                                                    Fiscal year

First launch



                                              Source: Air Force briefing charts.




                                              The fiscal year 2002 and 2003 deployment options contain substantial
                                              increased funding requirements relative to the fiscal year 2006 original
                                              schedule. The Air Force estimated that during fiscal years 1997 through
                                              2002, these two options would require an additional $2.1 billion and
                                              $2.6 billion, respectively. These estimates were prepared in April 1996 and
                                              June 1995, respectively. The additional funding (1) would result from




                                              Page 18                                              GAO/NSIAD-97-16 National Missile Defense
                             Appendix I
                             Program Plans, Congressional Direction,
                             and Deployment Options




                             compressing the schedule for developing and fabricating SBIRS-low and
                             incurring associated costs sooner than originally planned and (2) would be
                             separate from any increased costs that could occur from the scheduled
                             concurrence, such as flight demonstration results forcing system design
                             changes or premature acquisition of long lead parts. In commenting on our
                             draft report, DOD stated that (1) the higher cost of the fiscal year 2003
                             option was due to differences in technical configuration and (2) both
                             funding estimates were probably low, considering the level of
                             development and production concurrency.

                             According to DOD officials, such funding has not been included in the
                             future years defense program and would therefore require increased
                             appropriations from the Congress or a reduction of funding for other DOD
                             or Air Force programs. The importance of sufficient resources in DOD’s
                             future years defense program is to ensure program stability. In fact, DOD
                             regulations require that no acquisition program be approved to proceed
                             beyond program initiation unless sufficient resources, including
                             manpower, are programmed in the most recently approved future years
                             defense program or will be programmed in the next program objective
                             memorandum, budget estimate submission, or President’s budget.


Risk Under Fiscal Year       If SBIRS-low deployment were accelerated from the originally planned date
2004 Option Is Similar but   of fiscal year 2006 to fiscal year 2004, the risk of entering EMD would be
Requires Considerable        similar. However, DOD would need considerable additional funding in its
                             future years defense program.
Additional Funding
                             Figure I.2 shows that under this option the first year of the flight
                             demonstration would be completed about 4 months before the start of
                             EMD. Thus, DOD would have information on the demonstration satellites’
                             performance to consider in deciding whether the system should enter the
                             EMD phase. However, the flight demonstration and pre-EMD phase would
                             run concurrently, not allowing demonstration results to influence
                             requirements development and system design.

                             In considering this option, the Board concluded that the flight experiments
                             (demonstration) could proceed in parallel with pre-EMD. However, the
                             Board did not provide a reason for this conclusion. It stated that although
                             the experiments were extremely beneficial, the associated on-orbit test
                             plans were inadequate to fully exploit the demonstration and additional
                             dedicated targets and test time should be added.




                             Page 19                                   GAO/NSIAD-97-16 National Missile Defense
                                          Appendix I
                                          Program Plans, Congressional Direction,
                                          and Deployment Options




Figure I.2: Fiscal Year 2004 Deployment Option Compared to Fiscal Year 2006 Original Schedule




Flight
Demonstration
-- Development
-- Demonstration




FY 2004
                                       AAAAAAAA
                                            AAAAAAAA
                                                AAAAAAAA
                                                    AAAAAA
-- Pre-EMD                             AAAA
                                       AAAAAAAAAAAAAAAAAA
                                                         AA
                                                          AAAAAAAA  AAAAAAAA AAAAAAAA AAAAAAAA AAAAAAAA AAAAAAA
                                                          AAAA
                                                          AAAA
                                                               AAAA
                                                               AAAAAAAA
                                                                    AAAAAAAA
                                                                        AAAAAAAA
                                                                             AAAAAAAA
                                                                                 AAAAAAAA
                                                                                      AAAAAAAA
                                                                                          AAAAAAAA
                                                                                               AAAAAAAA
                                                                                                   AAAAAAAA
                                                                                                        AAAAAAA
                                                                                                            AAA
-- EMD                                                    AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA




FY 2006
-- Pre-EMD
-- EMD


                1995      1998       1999        2000         2001          2002         2003         2004        2005     2006
                                                                  Fiscal year
 First launch




                                          Source: Air Force briefing charts.




                                          Similar to the fiscal year 2002 and 2003 options, the fiscal year 2004 option
                                          would require additional funding because program activities would be
                                          compressed. Air Force representatives estimated in October 1996 that an
                                          additional $900 million would be required during fiscal years 1998 through
                                          2003 for this option. However, in commenting on our draft report, DOD



                                          Page 20                                                 GAO/NSIAD-97-16 National Missile Defense
                             Appendix I
                             Program Plans, Congressional Direction,
                             and Deployment Options




                             stated that a more current budget estimate revised the additional funding
                             downward to $509 million. The reasons given were (1) using a different
                             launch vehicle, (2) using different inflation assumptions, (3) savings from
                             the SBIRS-high program, and (4) better cost estimating fidelity. It also stated
                             that the funding is included in the fiscal year 1998 future years defense
                             program.


Risk Under Fiscal Year       If SBIRS-low deployment were accelerated from the originally planned date
2005 Option Is Similar but   of fiscal year 2006 to fiscal year 2005, program risk would be similar.
Requires Less Funding        However, the funding requirements would be less.

                             Figure I.3 shows that under this option the first year of the flight
                             demonstration would be completed about 4 months prior to the start of
                             EMD. Thus, DOD would have information on the demonstration satellites’
                             performance to consider in deciding whether the system should enter the
                             EMD phase. Although there is some concurrency between pre-EMD and
                             flight demonstration under this option, such concurrency is also present in
                             the fiscal year 2006 original schedule.




                             Page 21                                   GAO/NSIAD-97-16 National Missile Defense
                                           Appendix I
                                           Program Plans, Congressional Direction,
                                           and Deployment Options




Figure I.3: Fiscal Year 2005 Deployment Option Compared to Fiscal Year 2006 Original Schedule




Flight
Demonstration
-- Development
-- Demonstration




FY 2005
                                              AAAAAAAA
                                                  AAAAAAA
-- Pre-EMD                                    AAAA     AAA
                                              AAAAAAAAAAA
                                                         AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
-- EMD                                                   AAAA
                                                         AAAAAAAA
                                                              AAAAAAAA
                                                                  AAAAAAAA
                                                                       AAAAAAAA
                                                                           AAAAAAAA
                                                                                AAAAAAAA
                                                                                    AAAAAAAA
                                                                                         AAAAAAAA
                                                                                             AAAAAAAA
                                                                                                  AAAAAAAA
                                                                                                      AAAAAAAA
                                                                                                           AAAAAAAA
                                                                                                               AAAAAAAA
                                                                                                                    AAAA




FY 2006
-- Pre-EMD
-- EMD

               1995      1998       1999        2000         2001         2002         2003         2004         2005      2006
                                                                Fiscal year
First launch




                                           Source: Air Force briefing charts.




                                           Air Force officials stated that although there are no technical constraints
                                           precluding a fiscal year 2005 deployment, they initially preferred the fiscal
                                           year 2006 deployment schedule because it allowed for a slower buildup of
                                           funding requirements. Budget estimates, which were prepared in
                                           May 1996, supporting the fiscal year 2005 deployment option showed that




                                           Page 22                                                GAO/NSIAD-97-16 National Missile Defense
Appendix I
Program Plans, Congressional Direction,
and Deployment Options




up to $500-million less would be required for fiscal years 1998 through
2003 than for the original fiscal year 2006 schedule. In commenting on our
draft report, DOD officials stated that the reason for the $500-million
reduction, even though it represents acceleration from the fiscal year 2006
schedule, was due to a different satellite configuration and a lower
inflation rate. Thus, they stated that it was not an adequate comparison
with the fiscal year 2006 configuration.




Page 23                                   GAO/NSIAD-97-16 National Missile Defense
Appendix II

Comments From the Department of Defense




              Page 24       GAO/NSIAD-97-16 National Missile Defense
Appendix II
Comments From the Department of Defense




Page 25                                   GAO/NSIAD-97-16 National Missile Defense
               Appendix II
               Comments From the Department of Defense




Now on p. 5.




See pp. 4-5.




               Page 26                                   GAO/NSIAD-97-16 National Missile Defense
               Appendix II
               Comments From the Department of Defense




See title.




Now on p. 1.



Now on p. 1.




Now on p. 1.



Now on p. 1.



Now on p. 2.




               Page 27                                   GAO/NSIAD-97-16 National Missile Defense
               Appendix II
               Comments From the Department of Defense




Now on p. 2.




Now on p. 2.




Now on p. 3.




Now on p. 3.




Now on p. 3.




Now on p. 3.




Now on p. 4.




               Page 28                                   GAO/NSIAD-97-16 National Missile Defense
                Appendix II
                Comments From the Department of Defense




Now on p. 5.

Now on p. 6.




Now on p. 12.




Now on p. 12.


Now on p. 12.



Now on p. 13.


Now on p. 14.




Now on p. 14.




                Page 29                                   GAO/NSIAD-97-16 National Missile Defense
                    Appendix II
                    Comments From the Department of Defense




Now on p. 15.




Now on p. 15.




Now on p. 15.

Now on p. 17.




Now on p. 17.



Now on p. 19.




Now on pp. 20-21.


Now on p. 21.



Now on pp. 22-23.




                    Page 30                                   GAO/NSIAD-97-16 National Missile Defense
Appendix III

Major Contributors to This Report


                        Homer H. Thomson
National Security and   James A. Elgas
International Affairs   Steve Martinez
Division, Washington,
D.C.
                        Arthur Gallegos
Denver Office           Maricela Camarena




(707130)                Page 31             GAO/NSIAD-97-16 National Missile Defense
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