United States Government Accountability Office

GAO Report to Congressional Committees

MISSILE DEFENSE

Actions Needed to 

Improve Information 

for Supporting Future 

Key Decisions for 

Boost and Ascent 

Phase Elements 

April 2007 

 

GAO-07-430 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2007

MISSILE DEFENSE

Actions Needed to Improve Information 

for Supporting Future Key Decisions for 

Boost and Ascent Phase Elements 

Highlights of GAO-07-430, a report to 

congressional committees 

The Department of Defense (DOD)

has spent about $107 billion since

the mid-1980s to develop a 

capability to destroy incoming

ballistic missiles. DOD has set key 

decision points for deciding

whether to further invest in

capabilities to destroy missiles 

during the initial phases after 

launch. In March 2006, DOD issued 

a report on these capabilities in 

response to two mandates. To 

satisfy a direction from the House 

Appropriations Committee, GAO 

agreed to review the report. 

To assist Congress in evaluating

DOD’s report and preparing for

future decisions, GAO studied the 

extent to which DOD (1) analyzed

technical and operational issues 

and (2) presented complete cost

information. To do so, GAO 

assessed the report’s methodology,

explanation of assumptions and 

their effects on results, and 

whether DOD followed key 

principles for developing life-cycle 

costs. 

What GAO Recommends

To support future decisions, DOD 

should include key stakeholders in

assessing operational issues, report 

on technical progress, and update 

and verify life-cycle cost estimates

in accordance with key principles

for developing life-cycle costs. In 

comments on a draft of this report, 

DOD agreed to include

stakeholders and assess technical 

progress but did not agree to 

prepare or report life-cycle costs in

accordance with key principles. 

The report DOD’s Missile Defense Agency (MDA) submitted to Congress in 

March 2006 included some useful technical and operational information on 

boost and ascent phase capabilities by describing these elements, listing 

upcoming decision points, and discussing geographic areas where boost and 

ascent elements could intercept missiles shortly after launch. However, the 

information in the report has several limitations because the analysis did not 

involve key DOD stakeholders such as the services and combatant 

commands in preparing the report and did not clearly explain modeling 

assumptions and their effects on results as required by relevant research 

standards. MDA’s report states that, at this time, some data is limited, and 

operational concepts that discuss operations from forward locations have 

not been fully vetted with the services and combatant commands. However, 

the report did not explain how each element’s performance may change if 

developing technologies do not perform as expected. Also, it did not address 

the challenges in establishing bases at the locations cited or provide 

information on the quantity of each element required for various deployment 

periods. Moving forward, DOD has an opportunity to involve stakeholders in 

analyzing operational and technical issues so that senior DOD and 

congressional leaders will have more complete information on which to base 

upcoming program decisions following key tests in 2008 and 2009 for the 

Kinetic Energy Interceptor and Airborne Laser boost and ascent phase 

programs. 

MDA’s report provided some cost estimates for developing and fielding 

boost and ascent phase capabilities, but these estimates have several 

limitations and will require refinement before they can serve as a basis for 

DOD and congressional decision makers to compare life-cycle costs for the 

elements. MDA’s report states that there is uncertainty in estimating lifecycle costs because the elements are early in development. However, based

on a comparison of the estimates in the report with key principles for 

developing life-cycle cost estimates, GAO found that MDA’s estimates did 

not include all cost categories, including costs to establish and sustain 

operations at U.S. bases and at forward overseas operating locations. Also, 

MDA’s estimates did not calculate costs based on realistic quantities of each 

element the combatant commanders or services would need to conduct the 

mission. Finally, MDA did not conduct a sensitivity analysis to assess the 

effect of key cost drivers on total costs. MDA officials stated that further 

analysis of the costs for each element along with measures to assess their 

confidence would help to better inform DOD and congressional decision 

makers in making investment decisions following key tests in 2008 and 2009.

www.gao.gov/cgi-bin/getrpt?GAO-07-430.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Janet A. St. 

Laurent at (202) 512-4402 or 

stlaurentj@gao.gov; or Paul Francis at (202) 

512-2811 or francisp@gao.gov. 
Contents 

Letter 1

Results in Brief 4

Background 7

MDA’s March 2006 Report Includes Some Useful Information but 

Has Several Limitations 10 

DOD Can Significantly Improve Life-Cycle Cost Estimates to

Support Future Investment and Budget Decisions for Boost and 

Ascent Phase Capabilities 14 

Conclusions 18

Recommendations for Executive Action 19 

Agency Comments and Our Evaluation 20 

Appendix I Scope and Methodology 25 

Appendix II Comments from the Department of Defense 28 

Appendix III GAO Contacts and Staff Acknowledgments 32 

 

Related GAO Products 33 

Table 

Table 1: Ballistic Missile Defense Boost and Ascent Phase 

Elements, Key Decision Points, and Their Planned 

Capability Dates 8 

Page i GAO-07-430 Ballistic Missile Defense
Abbreviations 

ABL Airborne Laser 

BMDS Ballistic Missile Defense System 

DOD Department of Defense 

FYDP Future Years Defense Program 

KEI Kinetic Energy Interceptor 

MDA Missile Defense Agency 

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Page ii GAO-07-430 Ballistic Missile Defense
United States Government Accountability Office

Washington, DC 20548 

April 17, 2007

Congressional Committees: 

The new security environment includes some states, such as North Korea, 

that are aggressively pursuing development of long-range missiles and 

weapons of mass destruction. In 2002, President Bush directed that the 

Department of Defense (DOD) proceed with plans to develop and put in 

place an initial set of ballistic missile defense capabilities beginning in 

2004. DOD has spent about $107 billion since the mid-1980s to develop a 

capability to destroy incoming ballistic missiles in all phases of their flight, 

including the initial phases after launch, called the boost and ascent 

phases.1

 The purpose of boost and ascent phase elements of a ballistic 

missile defense system (BMDS) is to engage incoming missiles before 

release of warheads or countermeasures. DOD is developing three BMDS 

boost and ascent phase capabilities: Airborne Laser (boost phase only), 

Kinetic Energy Interceptor (boost and ascent phase), and the Aegis 

Ballistic Missile Defense element that will fire the Standard Missile-3 block 

2A2

 (ascent phase) from BMDS-capable Aegis surface combatants. 

According to the Missile Defense Agency (MDA), the agency responsible 

for developing an integrated ballistic missile defense system, DOD plans to 

spend $1.6 billion for the Airborne Laser; $800 million for the Kinetic 

Energy Interceptor; and $200 million for the Aegis Standard Missile-3 

Block 2A during fiscal years 2006–08. The long-term costs for these 

elements will be much greater if DOD continues their development and 

fielding. DOD projects the initial boost and ascent phase capabilities will 

not be available until about 2014 through 2020. Congress has raised 

questions about the affordability of pursuing both the Airborne Laser and 

Kinetic Energy Interceptor programs. 

Over the next few years, DOD and Congress will be asked to make 

important program and investment decisions on boost and ascent phase 

capabilities—at a time when the federal government is facing a large and 

 1

The boost phase is the period immediately after launch when the missile’s booster stages 

are still thrusting. Next is the ascent phase which ends when the ballistic missile completes 

deployment of reentry vehicles and possible decoys. 

2

Other versions of the Standard Missile-3 are being developed to intercept threat missiles in 

their midcourse phase. 

Page 1 GAO-07-430 Ballistic Missile Defense
growing fiscal imbalance.

3

 Further, we have identified the competing 

demands of investing in transformational capabilities while continuing to 

invest in legacy systems as one of the most significant national defense 

challenges for the 21st century.4

 MDA has established key decision points 

at which it will decide whether to continue to invest in certain elements of 

the integrated system. For example, one key decision point is the booster 

flight test for the Kinetic Energy Interceptor element, scheduled for 2008, 

at which time a decision will be made on the program’s future. A key 

decision point for the Airborne Laser is the lethal shootdown 

demonstration scheduled for 2009.

5

 Finally, in 2009, MDA plans a motor 

test for the Standard Missile-3 block 2A. 

In March 2006, MDA issued a report on boost and ascent phase capabilities 

in response to two mandates—one in the House Appropriations 

Committee Report on the Defense Appropriations Bill for Fiscal Year 2006 

and one in the National Defense Authorization Act for Fiscal Year 2006. 

The House Appropriations Committee directed the Secretary of Defense to 

conduct a study on boost and ascent phase intercepts including an 

assessment of operational capabilities, quantities of operational assets 

required for various deployment periods, basing options, and an 

assessment of life-cycle costs.6

 Life-cycle costs are the total cost to the 

government for a program over its full life, consisting of research and 

development, production, operations, maintenance, and disposal costs and 

are helpful in assessing whether a system’s cost is affordable. The 

Department of Defense Authorization Act for Fiscal Year 2006 required the 

Secretary of Defense to conduct an assessment of U.S. missile defense 

programs that are designed to provide capability against threat ballistic 

missiles in the boost/ascent phase. The purpose of the assessment was to 

compare and contrast capabilities, asset requirements, and the costs for 

making the boost and ascent phase programs operational.7

 MDA, on behalf 

 3

GAO, Budget Process: Long-term Focus Is Critical, GAO-04-585T (Washington, D.C.: Mar.

23, 2004). 

4

GAO, 21st Century Challenges: Reexamining the Base of the Federal Government,

GAO-05-325SP (Washington, D.C.: February 2005). 

5

Although there are other interim decision points leading up to the lethal shootdown

demonstration, MDA officials stated that the 2009 key decision point is one where 

decisions may be made about the future of the Airborne Laser program. 

6

H.R. Rep. No. 109-119 (2005). 

7

Pub.L. No. 109-163, § 231 (2005). 

Page 2 GAO-07-430 Ballistic Missile Defense
of DOD, prepared one report to satisfy both requirements and sent the 

report to all four defense committees on March 30, 2006. According to 

MDA officials, that report was prepared specifically to satisfy the 

congressional requirements, not for use at any key decision point. 

To satisfy a direction from the House Appropriations Committee report, 

we agreed to review the DOD report including assessing the report’s 

methodologies, assumptions, completeness, and results.8

 This report is our 

assessment of the March 2006 MDA report and how DOD can build on this 

information to support future key decision points. Accordingly, we 

assessed the extent to which (1) information reported by DOD includes 

analysis of technical and operational issues and whether any additional 

information is needed to support future decision making and (2) DOD 

presented cost information to Congress that is complete and transparent. 

To assess the technical and operational information, we analyzed the 

extent to which the MDA report clearly explained technical maturity, 

modeling assumptions and their effect on results, and involved 

stakeholders in analyses of operational issues—steps which contribute to

a sound and complete quality study and are embodied in relevant generally

accepted research standards.9

 To assess the cost information in the March

2006 report, we compared MDA’s cost data with key principles compiled 

from various DOD and GAO sources that describe how to develop 

accurate and reliable life-cycle cost estimates which are to include 

development, production, and all direct and indirect operating and support 

costs. We discussed the data and results of this comparison with DOD 

officials and identified some limitations, which we discuss in this report. 

We conducted our work between June 2006 and February 2007 in 

accordance with generally accepted government auditing standards. See 

appendix I for a more complete description of our scope and 

methodology. 

 8

While the House Appropriations Committee report originally directed us to conduct a joint 

study with DOD, we agreed with the Defense Subcommittee, House Appropriations

Committee that, in lieu of a joint study, we would assess the Missile Defense Agency’s 

March 2006 report on boost and ascent phase capabilities. 

9

In a September 2006 report, GAO identified frequently occurring, generally accepted 

research standards that are relevant for defense studies and define a sound and complete 

study. GAO, Defense Transportation: Study Limitations Raise Questions about the 

Adequacy and Completeness of the Mobility Capabilities Study and Report, GAO-06-938 

(Washington, D.C.: Sept. 20, 2006). Also, see app. I for a more complete description of our

scope and methodology. 

Page 3 GAO-07-430 Ballistic Missile Defense
This report is one in a series we have issued on ballistic missile defense 

(see the list of related GAO products at the end of this report). Some of 

these reports have focused on assessments of program goals and progress 

in developing each element. For example, our March 2006 report found 

that MDA made progress in the development and fielding of some 

elements but that time pressures caused MDA to stray from a knowledgebased acquisition strategy.10 This is significant because straying from a 

knowledge-based approach opens the door to greater cost and 

performance risks by not having the right information available for 

decision makers at the right time.11 Another report focused on DOD’s 

planning to operate BMDS. We reported in May 2006 that DOD has not 

established criteria that would have to be met before declaring BMDS 

operational and that the Future Years Defense Program (FYDP), a major 

source of budget information, does not provide complete and transparent 

data on ballistic missile defense operational costs.12

MDA’s 2006 report to Congress included some useful technical and 

operational information on boost and ascent phase capabilities but the 

information in the report has several limitations. Specifically, MDA’s 

report provided some key information on potential boost and ascent phase

capabilities by describing these elements, listing upcoming decision 

points, and discussing geographic areas where these elements could 

intercept missiles shortly after launch. However, the analysis did not 

involve DOD stakeholders such as the services and combatant commands, 

which will have a key role in operating the elements, and did not clearly 

explain modeling assumptions and their effects on results as identified by

relevant research standards. For example, the report assumed that each

element would perform as desired and that the elements could be 

deployed at optimum locations, but it did not explain how each element’s 

performance would change if developing technologies do not perform as 

expected. In addition, the report did not address the challenges in 

establishing bases at the locations cited or provide information on the 

Results in Brief 

 10GAO, Defense Acquisitions: Missile Defense Agency Fields Initial Capability but Falls 

Short of Original Goals, GAO-06-327 (Washington, D.C.: Mar. 15, 2006). 

11GAO, Missile Defense: Knowledge-Based Practices Are Being Adopted, but Risks 

Remain, GAO-03-441 (Washington, D.C.: Apr. 30, 2003). 

12GAO, Defense Management: Actions Needed to Improve Operational Planning and

Visibility of Costs for Ballistic Missile Defense, GAO-06-473 (Washington, D.C.: May 31,

2006). 

Page 4 GAO-07-430 Ballistic Missile Defense
quantity of each element required for various deployment periods. Two 

key reasons for these limitations, which the report acknowledges, are that 

some data on the elements are limited at this time, and operational 

concepts that discuss operations from forward locations have not been 

fully vetted with the services and combatant commands. However, moving 

forward, DOD has an opportunity to involve stakeholders in analyzing 

operational and technical issues to provide more complete data that senior 

DOD and congressional leaders can use to make informed program 

decisions following key tests in 2008 and 2009 for the Kinetic Energy 

Interceptor and Airborne Laser programs. To provide decision makers 

with information to support boost and ascent phase program decisions at

future key decision points, we are recommending that DOD include all 

DOD stakeholders in developing and analyzing operational issues 

regarding what is needed to support operations at U.S. bases and potential 

forward locations, provide specific information on the technical progress

of each element, and use the results of these analyses at each key decision 

point. 

The Missile Defense Agency provided some cost estimates for developing

and fielding each of the boost and ascent phase capabilities in its March 

2006 report to Congress; however, these estimates have several limitations 

and will require refinement before they can serve as a basis for DOD and 

congressional decision makers to compare the costs of boost and ascent 

phase alternatives. We compared the report’s cost estimates with various 

DOD and GAO sources that describe key principles for developing 

accurate and reliable life-cycle cost estimates. Based on our analysis, we 

found that the estimates provided in the report did not include all cost 

categories, including costs to establish and sustain operations at U.S. 

bases and at forward locations. Also, MDA did not calculate costs based 

on quantities the warfighter would need to conduct the mission, or 

conduct a sensitivity analysis identifying the effects of cost drivers. 

Although the report acknowledges that, at this time, there is uncertainty in

estimating life-cycle costs for these elements, it did not fully disclose the 

limitations of the cost estimates. DOD can significantly improve the 

completeness of and confidence in its cost estimates for boost and ascent 

phase capabilities as it prepares for future investment and budget 

decisions. For example, although MDA did not have the cost estimates in 

its March 2006 report independently verified because doing so would have

required several months, MDA officials agree that independent

verification, which is another key principle of reliable cost estimates, will 

be critical to support major decision points. We are recommending that 

DOD prepare, periodically update, and independently verify life-cycle cost

estimates for boost and ascent phase elements in accordance with key 

Page 5 GAO-07-430 Ballistic Missile Defense
principles for developing accurate and reliable life-cycle cost estimates 

and that these verified estimates be used for making investment decisions 

and be reported with budget requests. 

In commenting on a draft of this report, DOD agreed with our 

recommendations regarding the need for analysis of technical progress 

and operational issues to support key boost and ascent phase element 

decision points. DOD also partially concurred that an independent lifecycle cost estimate may be needed to inform some key decision points but 

said that they may not be needed at others. However, DOD did not agree to 

prepare and periodically update full life-cycle cost estimates for each 

boost and ascent phase element to support key decision points, and report 

independently verified life cycle cost estimates with budget requests and 

FYDP funding plans. In its comments, DOD stated that it will direct an 

independent evaluation of life-cycle costs if circumstances warrant or the 

Director of MDA declares an element mature enough to provide a 

militarily useful capability. However, if, as DOD’s comments suggest, such

costs are not assessed until circumstances warrant or MDA’s Director 

makes such a declaration, these costs may not be available early enough to

help shape important program and investment decisions and consider 

trade-offs among elements. We continue to believe our recommendation 

has merit because the development of life-cycle cost estimates that include 

potential operations and support costs would improve the information 

available to decision makers and increase accountability for key decisions 

that could involve billions of dollars at a time when DOD will likely face 

competing demands for resources. Finally, DOD did not agree to report 

independently verified life-cycle cost estimates along with budget requests 

and FYDP funding plans since the development of total life-cycle cost 

estimates for operationalized BMDS capabilities require agreement 

between MDA and the lead military department on the roles and 

responsibilities for fielded missile defense capabilities. However, 

independent verification allows decision makers to gauge whether the 

program is executable. Also, DOD procedures specify that when cost 

estimates are presented to the Office of the Secretary of Defense’s Cost 

Analysis Improvement Group, life-cycle cost estimates should be 

compared with the FYDP and differences explained. Therefore, we 

continue to believe that our recommendation has merit because, without 

an independent cost estimate that can be compared to budget requests and 

FYDP funding plans, congressional decision makers may not have all the 

necessary information to assess the full extent of future resource 

requirements if the boost and ascent phase capabilities go forward, or 

assess the completeness of budget requests and FYDP funding plans. 

Page 6 GAO-07-430 Ballistic Missile Defense
In 2002, the Secretary of Defense created MDA to develop an integrated 

system that would have the ability to intercept incoming missiles in all 

phases of their flight.13 In developing BMDS, MDA is using an incremental 

approach to field militarily useful capabilities as they become available. 

MDA plans to field capabilities in 2-year blocks. The configuration of a 

given block is intended to build on the work completed in previous blocks. 

For example, Block 2006 is intended to build on capabilities developed in 

Block 2004, and is scheduled to field capabilities during calendar years 

2006–07. 

Background 

The integrated BMDS is comprised of various elements, three of which are 

intended to intercept threat missiles in their boost or ascent phase. Table 1 

below describes each of these elements and shows the MDA projected 

dates for key decision points, initial capability, and tested operational 

capability. 

 13The boost phase is the period immediately after launch when the missile’s booster stages 

are still thrusting and typically lasts 3–5 minutes for intercontinental ballistic missiles. The 

ascent phase is when the booster stages have stopped thrusting and dropped away leaving 

a warhead and possible decoys. The midcourse phase, lasting for about 20 minutes, begins 

after the missile has stopped accelerating and the warhead travels through space on a

predictable path. The final or terminal phase begins when the warhead reenters the 

atmosphere and lasts approximately a minute or less.

Page 7 GAO-07-430 Ballistic Missile Defense
Table 1: Ballistic Missile Defense Boost and Ascent Phase Elements, Key Decision Points, and Their Planned Capability 

Dates 

Boost/ascent phase 

element Description Key decision points Initial capability Tested capability 

Standard Missile-3, block 

2Aa

Aegis Ballistic Missile Defense, 

which employs the Standard 

Missile, is a ship-based system

designed to destroy medium, 

intermediate, and certain 

intercontinental ballistic missiles in 

the ascent and midcourse phases. 

2009—motor test for 

the 21-inch diameter 

missile 

Block 2012 Block 2014 

Kinetic Energy Interceptor 

(KEI)—land-based 

KEI is being designed to destroy 

medium, intermediate, and 

intercontinental ballistic missiles 

during the boost, ascent, and 

midcourse phases of flight. A landbased unit may consist of 5 

launchers, 10 missiles, and fire 

control and communications 

equipment. 

2008—booster flight 

test 

Block 2014 Block to be decided 

Kinetic Energy 

Interceptor—sea-based 

KEI is being designed to destroy 

medium, intermediate, and 

intercontinental ballistic missiles 

during the boost, ascent, and 

midcourse phases of flight. DOD is 

currently studying sea-based

platform alternatives including

surface combatants, submarines, or 

a new platform. 

2007—platform 

selection

2008—booster flight 

test 

Block to be decided Block to be decided 

Airborne Laser (ABL) ABL is an air-based missile defense 

system designed to destroy all 

classes of ballistic missiles during 

the boost phase. ABL also has

onboard sensor capability designed 

to detect, track, and transmit 

targeting data. 

2009—lethal 

shootdown 

demonstration

Block 2016 Block 2018 

Source: GAO summary of DOD information.

a

The Standard Missile is intended to be used on BMDS upgraded Aegis cruisers and destroyers. 

Other versions of the Standard Missile-3 are being developed to intercept threat missiles in their 

midcourse phase. 

During the past year, Congress requested additional information and 

analyses on the boost and ascent phase elements from DOD. Specifically, 

House Report 109-119 on the Department of Defense Appropriations Bill 

for Fiscal Year 2006 directed the Secretary of Defense to conduct a study 

to review the early engagement of ballistic missiles to include boost and 

Page 8 GAO-07-430 Ballistic Missile Defense
ascent phase intercepts and submit the report to the congressional defense 

committees.14 The report was to include, but not be limited to 

• an assessment of the operational capabilities of systems against 

ballistic missiles launched from North Korea or a location in the Middle 

East against the continental United States, Alaska, or Hawaii; 

• an assessment of the quantity of operational assets required for 

deployment periods of 7 days, 30 days, 90 days, and 1 year; 

• basing options; and 

• an assessment of life-cycle costs15 to include research and development 

efforts, procurement, deployment, operating, and infrastructure costs. 

In addition, the National Defense Authorization Act for Fiscal Year 2006

required the Secretary of Defense to assess missile defense programs 

designed to provide capability against threat ballistic missiles in the 

boost/ascent phase of flight. The purpose of this assessment was to 

compare and contrast 

• capabilities of those programs (if operational) to defeat ballistic 

missiles from North Korea or a location in the Middle East against the 

continental United States, Alaska, or Hawaii; and

• asset requirements and costs for those programs to become 

operational with the capabilities referred to above. 

MDA, on behalf of DOD, prepared one report to satisfy both of the above 

requirements and sent the report to all four defense committees on March 

30, 2006. The report included technical, operational, and cost information 

for each of the three boost and ascent phase BMDS elements. The 

remainder of this report discusses our assessment of the MDA report and 

how DOD can build on this information to support future key decision 

points. 

 14H.R. Rep. No. 109-119 (2005). 

15For most major acquisition programs, DOD prepares a life-cycle cost estimate that is 

independently verified for major program reviews. A life-cycle cost includes all costs

associated with a weapon system’s research and development, investment, which includes

military construction, operations and support, and disposal. 

Page 9 GAO-07-430 Ballistic Missile Defense
MDA’s March 2006 report to Congress included some useful technical and

operational information on boost and ascent phase capabilities. However, 

the information in the report has several limitations—such as not 

including stakeholders in the analysis or explaining how assumptions 

affect results. Moving forward, DOD can enhance its ability to make 

informed decisions at future key decision points by including stakeholders

DOD-wide in conducting analyses to provide complete technical and 

operational information. Otherwise, senior DOD and congressional 

decision makers may be limited in their ability to effectively assess the 

technical progress and operational effects of proceeding with one or more 

boost and ascent phase element. 

The March 2006 report to Congress contained some useful technical and

operational information for Congress. For example, the report included a 

detailed description of the three boost and ascent phase elements, which 

could be useful for those unfamiliar with these elements. Additionally, the 

report listed upcoming knowledge points where DOD will review the 

progress MDA has made toward developing each of the boost and ascent 

phase elements. Further, the report discussed geographic areas where 

boost and ascent phase elements could intercept missiles shortly after 

launch based on desired technical capabilities. Also, MDA used a model16

to assess the desired capabilities of each BMDS element for the March 

2006 report to Congress. Further, the modeling environment was used for 

several past BMDS analyses and the results were benchmarked against 

other models. Finally, MDA performed a sensitivity analysis that compared

how the results in the modeling changed when different assumptions for 

targets’ propellants, ascent times, hardness levels, and burn times were 

used. To provide context, the report explained that the boost and ascent 

phase elements are in the early stages of development and that the 

operational concepts are not yet mature. 

The information in the March 2006 report has several limitations because

the analyses did not involve stakeholders and did not clearly explain 

modeling assumptions and their effects on results as identified by relevant 

research standards. The relevant research standards and our prior work 

have shown that coordination with stakeholders from study design 

MDA’s March 2006 

Report Includes Some 

Useful Information 

but Has Several 

Limitations 

Report Provided Some 

Basic Information about 

Boost and Ascent Phase 

Elements 

MDA’s Analyses Have 

Limitations but DOD Can 

Improve Information to 

Support Future Decisions 

 16The model, called WILMA, supports quantitative evaluation of ballistic missile defense 

system performance in terms of probabilities of success.

Page 10 GAO-07-430 Ballistic Missile Defense
through reporting, and clearly explained assumptions and their effects on 

results, can enable DOD officials to make fully informed program 

decisions. As a result, the March 2006 report presents an incomplete 

picture of technical capabilities, such as development challenges to be 

overcome in order to achieve desired performance, and it does not clearly

explain the effects of operational assumptions, such as basing locations, 

asset quantities, and base support requirements. As a step in the right 

direction, MDA stated that it plans to develop criteria to assess the 

boost/ascent phase elements at major decision points in a process 

involving the combatant commands. Although MDA officials told us that 

they consult stakeholders in a variety of forums other than the March 2006 

report, they did not clearly state whether or how the services or other 

DOD stakeholders would be involved in developing criteria for key 

decision points or the extent to which their analyses would include 

information on technical and operational issues. 

MDA’s analyses did not involve soliciting or using information from key 

DOD stakeholders such as the services, combatant commands, and joint 

staff from study design through reporting. For example, officials from the 

Office of the Secretary of Defense for Program Analysis and Evaluation 

and the Defense Intelligence Agency stated there were areas where 

additional information would have improved the fidelity of the results. 

First, the officials stated that there is uncertainty that the boost and ascent 

phase elements would achieve their desired capabilities within the 

timeframe stated in the report. Second, officials from both organizations 

stated that the report could have been enhanced by presenting different 

views of the type and capability of threats the United States could face and

when these threats could realistically be expected to be used by

adversaries. Third, officials from the Office of the Secretary of Defense for 

Program Analysis and Evaluation said that the MDA report did not 

distinguish between countermeasures that could be used in the near term

and countermeasures that may be more difficult to implement. MDA 

officials said that they worked with the Office of the Secretary of Defense

for Program Analysis and Evaluation in conducting analyses before they 

began work on the March 2006 report. MDA also stated that it discussed 

the draft March 2006 report with Office of the Secretary of Defense for 

Program Analysis and Evaluation officials and included some of their 

comments in the report’s final version. However, without communication 

with stakeholders from study design through reporting, MDA may not have 

had all potential inputs that could have affected how the type, capability,

and likelihood of countermeasures to the boost and ascent phase elements 

were presented in its report. 

Data Collection and Analysis 

for the March 2006 Report Did 

Not Involve Key DOD 

Stakeholders 

Page 11 GAO-07-430 Ballistic Missile Defense
Additionally, MDA did not solicit information from the services, combatant 

commands, or Joint Staff regarding operational issues that could have

affected information about basing and the quantities of elements that 

could be required to support operations. Although the elements have to be 

located in close proximity to their intended targets, and the report 

discusses placing the elements at specific forward overseas locations, the 

report does not include a basing analysis explaining what would need to

be done to support operations at these locations. Specifically, the report 

did not include any discussion of the infrastructure or security/force 

protection that will be needed for the BMDS elements. Although the report 

mentions some support requirements—such as the Airborne Laser’s need

for unique maintenance and support equipment and skilled personnel to 

maintain the laser—the report did not fully explain how these support 

requirements would be determined, who would provide or fund them, or 

explain the operational effect if this support is not provided. For instance, 

without an adequate forward operating location, the boost and ascent 

phase elements would have to operate from much further away which 

would significantly limit the time an element is in close proximity to 

potential targets. Developing such information with the services, Joint 

Staff, and combatant commands could provide a much more complete 

explanation of operational issues and challenges. The services typically

perform site analyses to ascertain what support is needed for a new 

weapon system at either a U.S. or overseas location. This comprehensive 

analysis examines a range of issues from fire protection to security, to 

infrastructure, to roads and airfields. In addition, U.S. Strategic Command 

and service officials told us that this type of support must be planned for 

in advance when adding a new system to any base, either in the United

States or a forward location. 

MDA also did not involve stakeholders in assessing the quantities of each

element for deployment periods of 7 days, 30 days, 90 days, and 1 year. 

The report stated that limited data exist at this time for a full assessment 

of this issue, and service, Joint Staff, and MDA officials acknowledged that

the quantities of each element used in the report are MDA assumed 

quantities. Service, Joint Staff, and U.S. Strategic Command officials stated

that they have not completed analyses to assess quantities the warfighters 

may require. We understand that operational concepts will continue to 

evolve and could affect required quantities. However, stakeholders such as 

the services, Joint Staff, or combatant commands could have assisted 

MDA in assessing potential quantities required for various deployment 

periods. In addition, MDA did not solicit information from the services, 

Joint Staff, or combatant commands to determine if those organizations 

were conducting force structure analyses for the boost and ascent phase 

Page 12 GAO-07-430 Ballistic Missile Defense
elements. We learned that the Navy had done a preliminary analysis in July 

2005 and that the Joint Staff has begun a capabilities mix study and both 

include, in part, an analysis of quantities. Thus, in preparing for future 

decision points, MDA’s analysis could be strengthened by including 

stakeholders to leverage other analyses. For example, MDA could have 

presented a range of scenarios to show how the quantities required to 

intercept adversary missiles could vary depending upon the number of 

sites covered and whether continuous, near-continuous, or sporadic 

coverage is provided. 

The March 2006 report to Congress did not clearly explain the 

assumptions used in the modeling of the BMDS elements’ capabilities and 

did not explain the effects those assumptions may have had on the results. 

First, the model inputs for the technical analysis assumed desired rather 

than demonstrated performance, and the report does not fully explain

challenges in maturing technologies or how these performance predictions 

could change if the technologies are not developed as desired or assumed. 

For example, although the model MDA used is capable of showing 

different results based on different performance assumptions, the report 

did not explain how the number of successful intercepts may change if 

less than 100 percent of the desired technical capabilities are developed as 

envisioned. Thus the results represent the best expected outcome. Second, 

the report does not explain the current status of technical development or 

the challenges in maturing each element’s critical technologies as desired 

or assumed in the report. DOD best practices define Technology 

Readiness Levels on a scale of 1–9, and state which level should be 

reached to progress past specific program decision points.17 However, the 

March 2006 report does not explain the current Technology Readiness 

Level for any of the boost and ascent phase elements’ critical technologies 

or the extent to which the technology has to mature to attain the 

performance assumed in the report. For example, the report does not 

explain that some of the technologies for the Airborne Laser have to 

improve between 60 percent and 80 percent and the report does not 

discuss any of the challenges MDA faces in doing so. 

Assumptions and Their Effects 

on Data Presented in the MDA 

Report Were Not Clearly 

Explained 

 17Technology Readiness Levels are measured on a scale of 1–9, beginning with paper

studies of a technology’s feasibility (level 1) and culminating with a technology fully 

integrated into a completed product (level 9). 

Page 13 GAO-07-430 Ballistic Missile Defense
The March 2006 report to Congress provides cost estimates for each of the 

boost and ascent phase capabilities; however, the cost estimates in the 

report have several limitations that raise questions about their usefulness. 

We compared the report’s cost estimates with various DOD and GAO 

sources that describe key principles for developing accurate and reliable 

life-cycle cost estimates.18 Based on our analysis, we found that MDA did 

not include all cost categories, calculate costs based on warfighter 

quantities, and did not conduct a sensitivity analysis to assess the effects 

of cost drivers. Moreover, although MDA’s report acknowledges 

uncertainty in the cost estimates, the report does not fully disclose the 

limitations of the cost estimates. DOD can significantly improve the 

completeness of and confidence in cost estimates for boost and ascent 

phase capabilities as it prepares for future investment and budget 

decisions. For example, although DOD did not have its cost estimate for its 

March 2006 report independently verified because doing so would have

taken several months, MDA officials agreed that independently verified 

cost estimates will be critical to support major decision points for boost 

and ascent phase capabilities.19 In addition, as these capabilities mature, 

MDA officials agreed that showing cost estimates over time and 

conducting uncertainty analyses will be needed to support key program 

and investment decisions. 

The cost estimates provided in the MDA report included some 

development, production, and operations/support costs for each boost and 

ascent phase element but were not fully developed or verified according to 

key principles for developing life-cycle cost estimates. Life-cycle costs are 

the total cost to the government for a program over its full life, including

DOD Can 

Significantly Improve 

Life-Cycle Cost 

Estimates to Support 

Future Investment 

and Budget Decisions 

for Boost and Ascent 

Phase Capabilities 

Cost Estimates Did Not 

Include All Cost Categories 

 18The criteria for developing accurate and reliable life-cycle cost estimates were compiled 

from several sources including the DOD Manual 5000.4-M Cost Analysis Guidance and

Procedures, the Defense Acquisition Guidebook, and an exposure draft of GAO’s Cost 

Assessment Guide. See app. I for a more complete description of our scope and 

methodology. 

19As we reported in GAO-05-817, independent cost estimates are normally first required for 

Milestone B, the decision to enter system development and demonstration. GAO, Defense 

Acquisitions: Actions needed to Ensure Adequate Funding for Operation and

Sustainment of the Ballistic Missile Defense System, GAO-05-817 (Washington, D.C.: Sept. 

6, 2005). However, because BMDS elements do not enter DOD’s acquisition cycle until 

Milestone C, the requirements under Section 2434 of Title 10 may not be applied to the 

BMDS until the transition phase that leads to the transfer to a military service. However, 

developing cost estimates using the key principles that we describe for developing accurate 

and reliable life-cycle cost estimates would provide useful information to DOD decision 

makers and Congress. 

Page 14 GAO-07-430 Ballistic Missile Defense
the costs of research and development, investment, operating and support, 

and disposal. 

Based on our comparison of the life-cycle cost estimates in the report with 

key principles for developing life-cycle cost estimates, we found that the 

estimates were incomplete in several ways. First, the cost estimates did 

not include all cost categories, such as costs to establish and sustain 

operations at U.S. bases. Instead, MDA assumed that the elements would 

be placed at existing bases with sufficient base support, infrastructure and 

security; however, some of these costs such as infrastructure could be 

significant. For example, an MDA planning document cited about $87 

million for infrastructure costs to support a ground-based BMDS element 

(Terminal High Altitude Area Defense). Army officials confirmed that 

training facilities, missile storage buildings, and a motor pool were built at

a U.S. base specifically to support this element and it is likely that similar 

infrastructure would be needed to support the land-based Kinetic Energy 

Interceptor. Additionally, MDA’s cost estimates did not include costs to 

establish and sustain operations at forward overseas locations, even 

though the report states that the elements will have to be located in close 

proximity to their targets, and the operational concepts for Kinetic Energy

Interceptor and Airborne Laser, although in early development, state that

these elements will be operated from forward locations. Again, these are 

important factors to consider—the Airborne Laser operational concept

and the MDA report acknowledge that unique support will be required to 

support operations at any forward location for the Airborne Laser such as 

chemical facilities, unique ground support equipment, and maintenance. 

Service, Joint Staff, and U.S. Strategic Command officials also said that 

these elements would have to be located forward and could be used as a 

strategic deterrent in peacetime. 

Second, the production and operating cost estimates were not based on 

warfighter quantities, that is, quantities of each element that the services 

and combatant commands may require to provide needed coverage of 

potential targets. MDA assumed a certain quantity of each element. For 

example, MDA officials told us that they assumed 96 Standard Missile-3 

block 2A missiles because, at the time MDA prepared the report, they 

planned to buy 96 block 1A missiles developed to intercept short-range 

ballistic missiles. However, MDA did not solicit input from the services, 

Joint Staff, or combatant commands on whether they had done or begun 

analyses to determine element quantities. 

Third, MDA did not conduct a sensitivity analysis to identify the effects of

cost drivers. A sensitivity analysis is a way to identify risk by 

Page 15 GAO-07-430 Ballistic Missile Defense
demonstrating how the cost estimates would change in response to 

different values for specific cost drivers. Therefore, a sensitivity analysis 

should be performed when developing cost estimates, and the results 

should be documented and reported to decision makers. This means, for 

example, that MDA could have computed costs with and without 

significant categories of costs such as forward bases to identify the effect 

that adding forward bases would have on operating costs. The House 

Armed Services Committee report on the National Defense Authorization 

Bill for Fiscal Year 2006 recognized that operational capabilities and costs 

must be taken into account when making decisions on future funding 

support. Finally, the cost estimates did not estimate costs over time—a 

process known as time phasing—which can assist decision makers with 

budgetary decisions. The MDA report showed an annual cost estimate but 

did not state for how many years the development, production, and 

operating costs may be incurred. Although MDA officials stated they did 

not prepare time-phased cost estimates in order to prepare the report to 

Congress in a timely manner, they agreed that showing cost estimates over 

time would be important information to support investment decisions at 

key decision points. 

Cost Estimates Were Not 

Assessed or Independently 

Verified for MDA’s 2006 

Report but MDA Officials 

See Need to Do So for Key 

Decision Points 

Key principles for developing life-cycle cost estimates also include two 

steps for assessing the confidence of cost estimates. However, MDA did 

not take these steps to assess the confidence of the estimates reported in 

March 2006. First, the Missile Defense Agency did not conduct a risk 

analysis to assess the level of uncertainty for most of the cost estimates in 

the MDA report. Risk and uncertainty refer to the fact that, because a cost

estimate is a prediction of the future, it is likely that the estimated cost will 

differ from the actual cost. It is useful to perform a risk analysis to 

quantify the degree of uncertainty in the estimates. By using standard 

computer simulation techniques, an overall level of uncertainty can be

developed for cost estimates. In contrast, MDA officials told us that they

could only provide a judgmental confidence level for the most of the cost 

estimates. Second, MDA did not have the cost estimates in the report 

verified by an independent organization such as DOD’s Cost Analysis 

Improvement Group because doing so would have taken several months. 

However, MDA officials agreed that independent verification of cost 

estimates would be important information to support investment decisions 

at key decision points. According to the key principles that we have 

identified, all life-cycle cost estimates should be independently verified to

Page 16 GAO-07-430 Ballistic Missile Defense
assure accuracy, completeness, and reliability.20 MDA has recognized the 

value in independently developed cost estimates. In 2003, MDA and the 

Cost Analysis Improvement Group developed a memorandum of 

understanding that said, in part, the Cost Analysis Improvement Group 

would develop independent cost estimates for the approved BMDS and its 

elements as appropriate during development in anticipation of transition 

to production, but MDA officials said that little work was completed under 

this agreement, which has expired. 

Developing complete cost estimates in which decision makers can have

confidence is important since life-cycle cost estimates usually form the 

basis for investment decisions and annual budget requests. Specifically, 

life-cycle cost estimates that include all cost categories, show costs over 

time, include warfighter quantities, include an assessment of cost drivers, 

and are independently verified are important because accurate life-cycle

cost estimates can be used in formulating funding requests contained in 

the President’s Budget and DOD’s future funding plan, the Future Years 

Defense Program (FYDP) submitted to Congress. Therefore, there is a 

need for DOD to provide transparent budget and cost planning 

information to Congress. In May 2006, GAO reported that the FYDP, a 

major source of budget and future funding plans, does not provide 

complete and transparent data on ballistic missile defense operational 

costs because the FYDP’s structure does not provide a way to identify and

aggregate these costs. It is important that Congress has confidence in

boost and ascent phase estimates because Congress has indicated that it is 

concerned with the affordability of pursuing both the Airborne Laser and 

Kinetic Energy Interceptor programs in parallel through 2008. 

As we reported in 2003, DOD assumes increased investment risk by not 

having information available for decision makers at the right time, and the

level of anticipated spending magnifies this risk.21 Otherwise, senior DOD 

and congressional decision makers may be limited in their ability to assess 

 20As we reported in GAO-05-817, independent cost estimates are normally first required for 

Milestone B, the decision to enter system development and demonstration. However, 

because BMDS elements do not enter DOD’s acquisition cycle until Milestone C, the 

requirements under Section 2434 of Title 10 may not be applied to the BMDS until the 

transition phase that leads to the transfer to a military service. However, developing cost

estimates using the key principles that we describe for developing accurate and reliable 

life-cycle cost estimates would provide useful information to DOD decision makers and 

Congress.

21GAO-03-441. 

Page 17 GAO-07-430 Ballistic Missile Defense
the relative cost of the elements if all cost categories are not included and

cost drivers are not identified. Considering competing demands, this could 

also limit Congress’s ability to consider investment decisions or evaluate

whether continued expenditures are warranted. MDA officials stated that,

in developing the cost estimates for the March 2006 report, they decided 

not to follow some of the key principles for developing life-cycle cost 

estimates such as time phasing and independent verification of the cost 

estimates in order to complete the report in a timely manner. However, the 

officials also agreed that these key principles are important in developing

complete, accurate, and reliable life-cycle cost estimates for supporting 

investment decisions at key decision points. Therefore, in the future, when 

preparing cost estimates to be used in support of key decision points, 

MDA could provide decision makers with more complete, accurate, and 

reliable cost estimates by better adhering to key principles for developing

life-cycle cost estimates. 

Our review of MDA’s March 2006 report on boost and ascent phase 

elements identified a number limitations but helps to illuminate the kind of 

information that DOD and congressional decision makers will need 

following upcoming tests for boost and ascent phase elements. We 

recognize that the March 2006 report was prepared in response to 

congressional direction rather than to support program decisions. We also

recognize that, at the time of MDA’s report, these elements were early in 

their development and information was incomplete and changing. Thus, 

the focus of our analysis was to identify additional information that could 

enhance future program and investment decisions. 

Conclusions 

In particular, the House Armed Services Committee has raised questions 

about the affordability of pursuing both the Kinetic Energy Interceptor and 

the Airborne Laser in parallel through the projected knowledge point 

demonstrations,22 which are now scheduled for 2008 and 2009 respectively.

It is important that these decisions be both well-informed and transparent 

because of the long-term funding consequences. DOD and congressional 

decision makers’ ability to assess which elements can be fully developed, 

integrated, and operated relative to the others will be enhanced if they 

have the benefit of information based on more rigorous analysis than that

contained in MDA’s March 2006 report. Looking forward, as DOD 

strengthens its analyses to support future key decisions, DOD and 

 22H.R. Rep. No. 109-452 (2006). 

Page 18 GAO-07-430 Ballistic Missile Defense
congressional decision makers will be able to use more complete 

information to assess force structure, basing, support, and infrastructure 

requirements, as well as technical maturity, budget requests, and FYDP 

spending plans, in deciding whether or not to continue developing one,

two, or all three boost and ascent phase elements and in what quantities. 

To provide decision makers with information that enables them to clearly 

understand the technical progress and operational implications of each 

boost and ascent phase element and make fully informed, fact-based, 

program decisions at future key decision points, we recommend that the 

Secretary of Defense direct the Under Secretary of Defense for 

Acquisition, Technology, and Logistics to take the following actions to 

support key decision points for the BMDS boost and ascent phase 

elements: 

Recommendations for 

Executive Action 

• Include all DOD stakeholders (including services, combatant 

commands, Joint Staff) in developing and analyzing operational issues 

regarding what is needed to support operations at U.S. bases and 

potential forward locations, including basing assessments, force 

structure and quantity requirements, infrastructure, security/force 

protection, maintenance, and personnel. 

• Provide specific information on the technical progress of each element. 

Specifically, the analysis should explain current technical maturity 

versus desired technical maturity and capabilities of all major 

components and subsystems, reasonable model inputs on element 

performance, and provide a clear explanation of assumptions and their 

effect on results. 

• Use the results of these analyses at each key decision point. 

To provide decision makers with complete and reliable data on the costs 

of each boost/ascent phase BMDS element to enhance investment and 

budget decisions, we recommend that the Secretary of Defense take the 

following actions: 

• Direct the Under Secretary of Defense for Acquisition, Technology, and 

Logistics to require MDA to prepare and—to support key decision 

points—periodically update a full life-cycle cost estimate for each 

boost/ascent phase element, in accordance with key principles for 

developing accurate and reliable life-cycle cost estimates, that includes 

all operational costs, including costs to establish and sustain 

operations at U.S. bases and forward locations, and that is based on 

warfighter quantities, includes sensitivity analyses, and reflects time 

phasing. 

Page 19 GAO-07-430 Ballistic Missile Defense
• Direct an independent group, such as the Cost Analysis Improvement 

Group, to prepare an independent life-cycle cost estimate for each 

capability at each key decision point.

• Direct MDA and services to report independently verified life-cycle

cost estimates along with budget requests and FYDP funding plans for 

each boost/ascent phase element. 

In written comments on a draft of this report, DOD agreed with our 

recommendations regarding the need for analysis of technical progress 

and operational issues to support key boost and ascent phase element 

decision points. DOD also agreed that an independent life-cycle cost 

estimate may be needed to inform some key decision points while they 

may not be needed at other decision points. However, DOD did not agree 

to prepare and periodically update full life-cycle cost estimates for each 

boost and ascent phase element to support key decision points, and report 

independently verified life cycle cost estimates with budget requests and 

FYDP funding plans. As discussed below, we continue to believe our 

recommendations have merit and that DOD should take the additional 

actions we have recommended to provide a rigorous analytical basis for 

future decisions, enhance the transparency of its analyses, and increase 

accountability for key decisions that could involve billions of dollars. The 

department’s comments are reprinted in their entirety in appendix II. 

Agency Comments 

and Our Evaluation 

DOD agreed with our recommendations that all DOD stakeholders be 

included in developing and analyzing operational issues, that specific 

information on technical progress be provided to explain current versus 

desired capabilities, and that the results of both analyses be used at key 

decision points. DOD stated in its comments that officials from MDA, the 

military departments, the combatant commanders, and other organizations 

are collaborating to develop an operational BMDS. Moreover, the annual 

BMDS Transition and Transfer Plan is coordinated with the service 

secretaries and other stakeholders and serves as a repository for plans, 

agreements, responsibilities, authorities, and issues. DOD also stated that 

key program decisions are and will continue to be informed by detailed 

technical analysis, including assessment of element technical maturity.

However, DOD did not clearly explain how future decision making will be 

enhanced or how analyses of operational issues will be conducted if, as in 

the case of the Kinetic Energy Interceptor, DOD has not assigned a service 

responsibility for operating the element once it is developed. We continue 

to believe that DOD and congressional decision makers will need more 

complete information on support requirements at upcoming decision 

points as well as a clear comparison of current versus desired technical 

Page 20 GAO-07-430 Ballistic Missile Defense
capabilities in deciding whether or not to continue developing one, two, or 

all three boost and ascent phase elements. 

Regarding our recommendations to improve cost estimates used to 

support key investment decisions, DOD partially concurred that 

independent life-cycle cost estimates may be required to inform some key 

decision points but stated that other key decision points may not. 

However, DOD did not agree that it should routinely prepare and 

periodically update a full life-cycle cost estimate for each boost and ascent 

phase element. DOD said that it continuously assesses all aspects of its 

development efforts and will direct an independent evaluation of life-cycle 

costs for boost and ascent phase elements if circumstances warrant or if 

MDA’s Director declares an element mature enough to provide a militarily 

useful capability. However, if, as DOD’s comments suggest, such costs are 

not assessed until circumstances warrant or MDA’s Director declares an 

element mature enough to provide a militarily useful capability, these 

costs may not be available early enough to help shape important program 

and investment decisions and consider trade-offs among elements. 

Moreover, DOD’s Operating and Support Cost Estimating Guide, 

published by the Cost Analysis Improvement Group, states that when the 

Cost Analysis Improvement Group assists the Office of the Secretary of 

Defense components in their review of program costs, one purpose is to 

determine whether a new system will be affordable to operate and 

support.23 Therefore, such analysis must be done early enough to provide 

cost data that will be considered in making a decision to field, produce, or 

transition an element. We continue to believe our recommendation has 

merit because the development of life-cycle cost estimates that include

potential operations and support costs would improve the information 

available to decision makers and increase accountability for key decisions 

that could involve billions of dollars at a time when DOD will likely face 

competing demands for resources. 

Finally, DOD did not agree to report independently verified life-cycle cost

estimates along with budget requests and FYDP funding plans for each 

boost and ascent phase element. DOD stated that operations and support 

segments of the budget are organized by functional area rather than by 

weapon system and are dependent on operations and support concepts of

the employing military department. DOD further stated that development 

 23DOD, Office of the Secretary of Defense Cost Analysis Improvement Group, Operating 

and Support Cost Estimating Guide (May 1992). 

Page 21 GAO-07-430 Ballistic Missile Defense
of total life-cycle cost estimates for operational BMDS capabilities requires 

agreement between MDA and the lead military department on roles and 

responsibilities for fielded BMDS capabilities that transcend the annual 

transition planning cycle but serve as a basis for budget submittals. We 

recently reported that MDA enjoys flexibility in developing BMDS but this 

flexibility comes at the cost of transparency and accountability.24 One 

purpose of cost estimates is to support the budget process by providing 

estimates of the funding required to efficiently execute a program. Also, 

independent verification of cost estimates allows decision makers to 

gauge whether the program is executable. Thus, cost estimating is the 

basis for establishing and defending budgets and is at the heart of the 

affordability issue. This principle is stated in DOD procedures which 

specify that when cost results are presented to the Office of the Secretary 

of Defense Cost Analysis Improvement Group, the program officedeveloped life-cycle cost estimate should be compared with the FYDP and 

differences explained.

25 Therefore, we continue to believe that our 

recommendation has merit because, without an independent cost estimate 

that can be compared to budget requests and FYDP funding plans, 

congressional decision makers may not have all the necessary information 

to assess the full extent of future resource requirements if the boost and 

ascent phase capabilities go forward, or assess the completeness of the 

cost estimates that are in the budget request and FYDP funding plans. 

We are sending copies of this report to the Secretary of Defense; the 

Commander, U.S. Strategic Command; the Director, Missile Defense 

Agency; Chairman, the Joint Chiefs of Staff; and the Chiefs of Staff of the 

Army, Navy, and Air Force. We will make copies available to others upon 

request. In addition, the report will be available at no charge on the GAO 

Web site at http://www.gao.gov. 

 24GAO, Defense Acquisitions: Missile Defense Acquisition Strategy Generates Results but 

Delivers Less at a Higher Cost, GAO-07-387 (Washington, D.C.: Mar. 15, 2007). 

25DOD, Assistant Secretary of Defense (Program Analysis and Evaluation), Cost Analysis

Guidance and Procedures, DOD 5000.4-M (December 1992). 

Page 22 GAO-07-430 Ballistic Missile Defense
If you or your staff have any questions, please call either Janet St. Laurent 

on (202) 512-4402 or Paul Francis on (202) 512-2811. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. Staff members who made key contributions to this 

report are listed in appendix III. 

Janet A. St. Laurent 

Director, 

Defense Capabilities and Management 

Paul L. Francis 

Director, 

Acquisition, Sourcing, and Management 

Page 23 GAO-07-430 Ballistic Missile Defense
List of Committees 

The Honorable Carl Levin 

Chairman 

The Honorable John McCain 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Daniel K. Inouye 

Chairman 

The Honorable Ted Stevens 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate 

The Honorable Ike Skelton 

Chairman 

The Honorable Duncan L. Hunter 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

The Honorable John P. Murtha 

Chairman 

The Honorable C. W. Bill Young 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

Page 24 GAO-07-430 Ballistic Missile Defense
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

During this review, we focused on assessing the analytical approach the 

Missile Defense Agency (MDA) used to develop its March 2006 report to 

Congress, as well as the methodology for developing the cost estimates for 

each of the three Ballistic Missile Defense System (BMDS) boost and 

ascent phase elements. 

To assess the extent to which the Department of Defense (DOD) is 

developing technical and operational information useful for oversight and 

that will support decision making at key points, we compared the 

analytical approach DOD used to develop its March 2006 report with 

generally accepted research standards that are relevant for defense studies 

such as this, that define a sound and complete study, and that cover all

phases of a study—design, execution, and presentation of results. The 

following were our sources for these standards: 

• GAO, Government Auditing Standards: 2003 Revision, GAO-03-673G 

(Washington, D.C.: June 2003); 

• GAO, Designing Evaluations, GAO/PEMD-10.1.4 (Washington, D.C.: 

March 1991); 

• GAO, Dimensions of Quality, GAO/QTM-94-1 (Washington, D.C.: 

February 2004); 

• RAND Corporation, RAND Standards for High-Quality Research and 

Analysis (Santa Monica, Calif.: June 2004); 

• Air Force, Office of Aerospace Studies, Analysts Handbook: On 

Understanding the Nature of Analysis (January 2000); 

• Air Force, Office of Aerospace Studies, Air Force Analysis Handbook, 

A Guide for Performing Analysis Studies: For Analysis of Alternatives 

or Functional Solution Analysis (July 2004); 

• Department of Defense, DOD Modeling and Simulation (M&S) 

Verification, Validation, Accreditation (VV&A), Instruction 5000.61 

(Washington, D.C.: May 2003); 

• Department of Defense, Data Collection, Development, and 

Management in Support of Strategic Analysis, Directive 8260.1 

(Washington, D.C.: Dec. 2, 2003); and

• Department of Defense, Implementation of Data Collection, 

Development, and Management for Strategic Analyses, Instruction 

8260.2 (Washington, D.C.: Jan. 21, 2003). 

Page 25 GAO-07-430 Ballistic Missile Defense
Appendix I: Scope and Methodology 

For a more complete description of these standards and how we identified 

them, see GAO-06-938, appendix I.1

 In applying these standards, we 

focused on the extent to which stakeholders were involved in study design 

and analysis as well as the extent to which assumptions were reasonable

and their effects on results were clearly explained. We assessed MDA 

briefings that explained the modeling used for the technical analysis 

projecting the elements’ capabilities. To assess the basis for the assumed 

performance parameters used to model each element’s performance, we 

traced and verified a nonprobability sample of these parameters to their 

source documentation and concluded that they were generally supported. 

To evaluate the DOD report’s characterization of threats, we reviewed 

Defense Intelligence Agency documents and discussed the type and 

capability of threats and expected BMDS capabilities with officials from 

the Office of the Secretary of Defense for Program Analysis and 

Evaluation and the Defense Intelligence Agency. In addition, to gain an 

understanding of the extent to which DOD has assessed warfighter 

quantities for the boost and ascent phase elements, the development of 

operational concepts, and operational implications of employing the boost

and ascent phase elements at forward locations, we evaluated DOD and 

service guidance on assessing sites and support for new weapon systems 

and discussed these issues with officials from the Joint Staff; U.S. Army 

Headquarters and Space and Missile Defense Command; U.S. Strategic 

Command; the office of the Chief of Naval Operations Surface Warfare 

Directorate, Ballistic Missile Defense Division; Air Combat Command; and 

the office of the Secretary of the Air Force for Acquisition, Global Power 

Directorate. Finally, we discussed the results of all our analyses with 

officials in the Joint Staff; U.S. Strategic Command; the Army’s Space and 

Missile Defense Command; Office of the Secretary of Defense for 

Acquisition, Technology, and Logistics; Missile Defense Agency; the office 

of the Chief of Naval Operations Surface Warfare Directorate, Ballistic 

Missile Defense Division; the office of the Secretary of the Air Force for 

Acquisition Global Power Directorate; and Air Combat Command. 

To assess the extent to which DOD presented cost information to 

Congress that is complete and transparent, we first assessed how MDA 

developed its estimates and then compared the method by which those 

estimates were prepared to key principles compiled from various DOD and 

 1

GAO, Defense Transportation: Study Limitations Raise Questions about the Adequacy

and Completeness of the Mobility Capabilities Study and Report, GAO-06-938 

(Washington, D.C.: Sept. 20, 2006). 

Page 26 GAO-07-430 Ballistic Missile Defense
Appendix I: Scope and Methodology 

GAO sources that describe how to develop accurate and reliable life-cycle 

cost estimates to determine their completeness and the extent to which 

DOD took steps to assess confidence in the estimates. The following were 

our sources for compiling the cost criteria: 

• Department of Defense, Assistant Secretary of Defense (Program 

Analysis and Evaluation), Cost Analysis Guidance and Procedures, 

DOD Manual 5000.4-M (December 1992); 

• Department of Defense, Office of the Secretary of Defense Cost 

Analysis Improvement Group, Operating and Support Cost Estimating 

Guide (May 1992); 

• Department of Defense, Defense Acquisition University, Defense 

Acquisition Guidebook (online at http://akss.dau.mil/dag); 

• Department of Defense, Defense Acquisition University, Introduction 

to Cost Analysis (April 2006); 

• Air Force, Office of Aerospace Studies, Air Force Analysis Handbook: 

A Guide for Performing Analysis Studies for Analysis of Alternatives or 

Functional Solution Analysis (July 2004); 

• Air Force, Base Support and Expeditionary Site Planning, Air Force 

Instruction 10-404 (March 2004); and 

• GAO, GAO Cost Assessment Guide (currently under development). 

In addition, we met with DOD officials from MDA, U.S. Strategic 

Command, the Joint Staff, Army, Navy and Air Force to determine the 

extent to which they were involved in developing the cost estimates for 

the DOD report. Finally, we corroborated our methodology and results 

with officials from the Office of the Under Secretary of Defense, Program, 

Analysis and Evaluation (Cost Analysis Improvement Group) and the 

Office of the Under Secretary of Defense (Comptroller) and they agreed 

that our methodology for examining the report’s cost estimates was 

reasonable and consistent with key principles for developing accurate and 

reliable life-cycle cost estimates. We identified some data limitations with 

the cost estimates which we discuss in this report. 

We provided a draft of this report to DOD for its review and incorporated 

its comments where appropriate. Our review was conducted between June 

2006 and February 2007 in accordance with generally accepted 

government auditing standards. 

Page 27 GAO-07-430 Ballistic Missile Defense
Appendix II: Comments from the Department Appendix II: Comments from the Department of Defense 

of Defense 

 Page 28 GAO-07-430 Ballistic Missile Defense
Appendix II: Comments from the Department 

of Defense 

 Page 29 GAO-07-430 Ballistic Missile Defense
Appendix II: Comments from the Department 

of Defense 

 Page 30 GAO-07-430 Ballistic Missile Defense
Appendix II: Comments from the Department 

of Defense 

 Page 31 GAO-07-430 Ballistic Missile Defense
Appendix III: GAO

A

 Contacts and Staff 

cknowledgments 

Page 32 GAO-07-430

Appendix III: GAO Contacts and Staff 

Acknowledgments 

Janet A. St. Laurent, (202) 512-4402, stlaurentj@gao.gov

Paul L. Francis, (202) 512-2811, francisp@gao.gov

In addition to the individuals named above, Barbara H. Haynes and 

Gwendolyn R. Jaffe, Assistant Directors; Brenda M. Waterfield; Todd Dice; 

Jeffrey R. Hubbard; Nabajyoti Barkakati; Hai V. Tran; Ron La Due Lake; 

and Susan C. Ditto made key contributions to this report. 

GAO Contacts 

Acknowledgments 

Ballistic Missile Defense
Related GAO Products Related GAO Products 

Defense Transportation: Study Limitations Raise Questions about the 

Adequacy and Completeness of the Mobility Capabilities Study and 

Report. GAO-06-938. Washington, D.C.: September 20, 2006. 

Defense Management: Actions Needed to Improve Operational Planning 

and Visibility of Costs for Ballistic Missile Defense. GAO-06-473. 

Washington, D.C.: May 31, 2006. 

Defense Acquisitions: Missile Defense Agency Fields Initial Capability 

but Falls Short of Original Goal. GAO-06-327. Washington, D.C.: March 15, 

2006. 

Defense Acquisitions: Actions Needed to Ensure Adequate Funding for 

Operation and Sustainment of the Ballistic Missile Defense System. 

GAO-05-817. Washington, D.C.: September 6, 2005. 

Military Transformation: Actions Needed by DOD to More Clearly 

Identify New Triad Spending and Develop a Long-term Investment 

Approach. GAO-05-962R. Washington, D.C.: August 4, 2005. 

Military Transformation: Actions Needed by DOD to More Clearly 

Identify New Triad Spending and Develop a Long-term Investment 

Approach. GAO-05-540. Washington, D.C.: June 30, 2005. 

Defense Acquisitions: Status of Ballistic Missile Defense Program in 

2004. GAO-05-243. Washington, D.C.: March 31, 2005. 

Future Years Defense Program: Actions Needed to Improve 

Transparency of DOD’s Projected Resource Needs. GAO-04-514. 

Washington, D.C.: May 7, 2004. 

Missile Defense: Actions Are Needed to Enhance Testing and

Accountability. GAO-04-409. Washington, D.C.: April 23, 2004.

Missile Defense: Actions Being Taken to Address Testing 

Recommendations, but Updated Assessment Needed. GAO-04-254. 

Washington, D.C.: February 26, 2004.

Missile Defense: Additional Knowledge Needed in Developing System for 

Intercepting Long-Range Missiles. GAO-03-600. Washington, D.C.: August 

21, 2003. 

Page 33 GAO-07-430 Ballistic Missile Defense
Related GAO Products 

Missile Defense: Alternate Approaches to Space Tracking and 

Surveillance System Need to Be Considered. GAO-03-597. Washington, 

D.C.: May 23, 2003. 

Missile Defense: Knowledge-Based Practices Are Being Adopted, but 

Risks Remain. GAO-03-441. Washington, D.C.: April 30, 2003.

Missile Defense: Knowledge-Based Decision Making Needed to Reduce 

Risks in Developing Airborne Laser. GAO-02-631. Washington, D.C.: July 

12, 2002. 

Missile Defense: Review of Results and Limitations of an Early National 

Missile Defense Flight Test. GAO-02-124. Washington, D.C.: February 28, 

2002. 

Missile Defense: Cost Increases Call for Analysis of How Many New 

Patriot Missiles to Buy. GAO/NSIAD-00-153. Washington, D.C.: June 29, 

2000. 

Missile Defense: Schedule for Navy Theater Wide Program Should Be 

Revised to Reduce Risk. GAO/NSIAD-00-121. Washington, D.C.: May 31,

2000. 

(350861) Page 34 GAO-07-430 Ballistic Missile Defense
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