Report to Congressional Committees

United States Government Accountability Office

GAO

March 2005 DEFENSE 

ACQUISITIONS 

Status of Ballistic 

Missile Defense 

Program in 2004 

GAO-05-243 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-243.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robert E. Levin 

at (202) 512-4841 or levinr@gao.gov. 

Highlights of GAO-05-243, a report to 

Congressional Committees 

March 2005

DEFENSE ACQUISITIONS 

Status of Ballistic Missile Defense 

Program in 2004 

By the end of fiscal year 2004, MDA carried out activities needed to field an 

initial missile defense capability, as planned. These included delivery and 

emplacement of Ground-based Midcourse Defense interceptors; upgrades of 

ground-based radars; enhancements to Aegis Navy ships for improved 

surveillance and tracking; development of command and control software 

for system operation; and tests to verify that components of this initial 

capability can communicate as part of an integrated whole. However, the 

performance of the system remains uncertain and unverified, because a 

number of flight tests slipped into fiscal year 2005 and MDA has not 

successfully conducted an end-to-end flight test using operationallyrepresentative hardware and software. Additionally, based on our analysis of 

prime contractor cost and schedule performance, the development of BMDS 

elements cost approximately $370 million more than planned during fiscal 

year 2004. To cover much of this cost overrun, MDA deferred work planned 

for fiscal year 2004, redirected funds earmarked for other programs, and 

requested additional funds in its fiscal year 2005 budget to cover the cost of 

deferred work. 

In the future, MDA will likely face increased funding risks. MDA plans to 

request about $10 billion annually from DOD for BMDS development, 

procurement, and sustainment. However, DOD’s acquisition programs are 

likely to be competing for a decreasing share of the total federal budget and 

MDA’s programs are competing against hundreds of other DOD programs. 

Also, MDA continues to budget for unanticipated cost growth. For example, 

the Airborne Laser program plans to spend an additional $1.5 billion to 

develop and demonstrate a prototype aircraft. Furthermore, procurement 

and sustainment will demand increased funding as more missile defense 

components are fielded over time. 

MDA policy defines a block as an integrated set of capabilities fielded during 

the 2-year block cycle, but we observed that MDA’s fielding goals do not 

consistently match its cost goals. For example, Block 2004 funds are used to 

procure 32 Aegis Ballistic Missile Defense missiles, but of these missiles, 11 

will be delivered in 2004-2005 and the remaining missiles will be delivered 

during 2006-2007. MDA officials intend to clarify the block policy in the near 

future to better align the cost and fielding goals. 

Elements of Ballistic Missile Defense System 

First fielded block Future blocks 

Aegis Ballistic Missile Defense Airborne Laser 

Command, Control, Battle Management, and 

Communications Kinetic Energy Interceptors 

Ground-based Midcourse Defense Space Tracking and Surveillance System 

Patriot Terminal High Altitude Area Defense 

Sources: MDA (data); GAO (presentation). 

Since 1985, the Department of 

Defense (DOD) has invested $85 

billion in ballistic missile defense 

programs, with $66.5 billion more 

anticipated over the next 7 years 

through 2011. As a major result of 

this investment, the Department is 

on the verge of activating our 

nation’s first missile defense 

system for protecting the United 

States from intercontinental 

ballistic missile attacks out of 

Northeast Asia. This initial 

capability—referred to as Limited 

Defensive Operations (LDO)—is 

the first step of a national priority 

to develop, field, and evolve over 

time an overarching ballistic 

missile defense system (BMDS). 

To fulfill a congressional mandate, 

GAO assessed how well the Missile 

Defense Agency (MDA) met its 

cost, schedule, testing, and 

performance goals during fiscal 

year 2004. GAO assessed the 

program last year and will continue 

to provide assessments of MDA 

progress through 2006. 

What GAO Recommends

To help decision makers in 

Congress and DOD better 

understand the relationship 

between requested funding and 

delivered capabilities, GAO 

recommends that MDA clarify and 

modify, as needed, its block policy 

to ensure its cost and fielding goals 

are consistently aligned. DOD 

concurred with our 

recommendation. 
Page i GAO-05-243 Missile Defense 

Letter 1

Results in Brief 3 

Background 4 

Assessment of Scheduled Activities in Fiscal Year 2004 10 

Assessment of Testing in Fiscal Year 2004 14 

Assessment of System Performance in Fiscal Year 2004 18 

Assessment of System Cost in Fiscal Year 2004 22 

Funding Risks Expected to Increase for Ballistic Missile Defense 

Program 26 

MDA Is Not Consistently Matching Cost and Fielding Goals 29 

Conclusion 30 

Recommendation for Executive Action 31 

Agency Comments and Our Evaluation 31 

Appendix I Comments from the Department of Defense 33 

Appendix II Summary 36 

Appendix II Aegis Ballistic Missile Defense 37 

Element Description 37 

History 37 

Developmental Phases 37 

Planned Accomplishments for Fiscal Year 2004 39 

Assessment of Scheduled Activities 39 

Assessment of Element Performance 46 

Assessment of Element Cost 47 

Appendix III Summary 52 

Appendix III Airborne Laser 53 

Element Description 53 

History 54 

Developmental Phases 54 

Fiscal Year 2004 Planned Accomplishments 56 

Assessment of Scheduled Activities 56 

Assessment of Element Performance 58 

Assessment of Element Cost 59 

Contents 
Page ii GAO-05-243 Missile Defense 

Appendix IV Summary 64 

Appendix IV Command, Control, Battle Management, and 

Communications 65 

Element Description 65 

History 65 

Developmental Phases 66 

Planned Accomplishments for Fiscal Year 2004 67 

Assessment of Scheduled Activities 67 

Assessment of Element Performance 69 

Assessment of Element Cost 69 

Appendix V Summary 74 

Appendix V Ground-Based Midcourse Defense 75 

Element Description 75 

History 76 

Developmental Phases 77 

Planned Accomplishments for Fiscal Year 2004 78 

Assessment of Scheduled Activities 78 

Assessment of Element Performance 85 

Assessment of Element Cost 86 

Appendix VI Summary 90 

Appendix VI Kinetic Energy Interceptors 91 

Element Description 91 

History 91 

Developmental Phases 92 

Planned Accomplishments for Fiscal Year 2004 93 

Assessment of Scheduled Activities 93 

Assessment of Element Performance 96 

Assessment of Element Cost 97 
Page iii GAO-05-243 Missile Defense 

Appendix VII Summary 100 

Appendix VII Space Tracking and Surveillance System 101 

Element Description 101 

History 101 

Developmental Phases 102 

Planned Accomplishments for Fiscal Year 2004 102 

Assessment of Scheduled Activities 102 

Assessment of Element Performance 104 

Assessment of Element Cost 105 

Appendix VIII Summary 110 

Appendix VIII Terminal High Altitude Area Defense 111 

Element Description 111 

History 111 

Developmental Phases 112 

Planned Accomplishments for Fiscal Year 2004 113 

Assessment of Scheduled Activities 113 

Assessment of Element Performance 116 

Assessment of Element Cost 117 

Appendix IX Information on the Army’s Missile Defense Programs 120 

Background 120 

Combined Aggregate Program 121 

Patriot/MEADS CAP Funding 122 

Appendix X Scope and Methodology 124 

Appendix XI GAO Contact and Staff Acknowledgments 127 

Tables 

Table 1: BMDS Elements 6 

Table 2: MDA Block 2004 Fielded Configuration Goals 9 

Table 3: Progress toward Achieving LDO 11 
Page iv GAO-05-243 Missile Defense 

Table 4: Progress toward Achieving Block 2004 Fielded 

 Configuration Goals\ 12 

Table 5: Status of Element Testing—Planned and Achieved 14 

Table 6: Prime Contractor Cost and Schedule Performance in 

 Fiscal Year 2004 23 

Table 7: Status of Aegis BMD Fiscal Year 2004 Planned 

 Accomplishments—Fielding Activities 40 

Table 8: Aegis Ship Availability for the BMD Mission (Block 2004) 41 

Table 9: SM-3 Missile Deliveries 41 

Table 10: Aegis BMD Fiscal Year 2004 Planned Accomplishments— 

 Flight Test and LRS&T Activities 44 

Table 11: Planned Aegis BMD Fiscal Year 2005 Accomplishments— 

 Remaining Block 2004 Flight Tests 45 

Table 12: Aegis BMD Fiscal Year 2004 Planned Accomplishments— 

 Design Reviews 45 

Table 13: Aegis BMD Cost 47 

Table 14: Status of ABL Fiscal Year 2004 Planned 

 Accomplishments—BC/FC Segment 56 

Table 15: Status of ABL Fiscal Year 2004 Planned 

 Accomplishments—Laser Segment 57 

Table 16: ABL Cost 59 

Table 17: C2BMC Fiscal Year 2004 Accomplishments—Software 

 Development and Testing 68 

Table 18: C2BMC Fiscal Year 2004 Planned Accomplishments— 

 Making System Operational 69 

Table 19: C2BMC Cost 70 

Table 20: Status of GMD Fiscal Year 2004 Component Development 79 

Table 21: Status of Major GMD Flight Tests (Fiscal Year 2004) 81 

Table 22: Status of GMD Fiscal Year 2004 Planned 

 Accomplishments—Fielding Initial Capability 84 

Table 23: GMD Cost 86 

Table 24: Status of KEI Fiscal Year 2004 Planned 

 Accomplishments—Contract Award and Planning 94 

Table 25: Status of KEI Fiscal Year 2004 Planned 

 Accomplishments—Design Activities 95 

Table 26: Status of KEI Fiscal Year 2004 Planned 

 Accomplishments—Key Test Activities 95 

Table 27: Status of KEI Fiscal Year 2004 Planned 

 Accomplishments—Risk Reduction Activities 96 

Table 28: KEI High-Risk Areas 96 

Table 29: KEI Cost 98 
Page v GAO-05-243 Missile Defense 

Table 30: Status of STSS Fiscal Year 2004 Planned 

 Accomplishments—Space Segment 103 

Table 31: Status of STSS Fiscal Year 2004 Planned 

 Accomplishments—Ground Segment 104 

Table 32: STSS Cost 106 

Table 33: Status of THAAD Fiscal Year 2004 Planned 

 Accomplishments—Design Activities 113 

Table 34: Status of THAAD Fiscal Year 2004 Planned 

 Accomplishments—Build Activities 114 

Table 35: Status of THAAD Fiscal Year 2004 Planned 

 Accomplishments—Integration and Test Activities 114 

Table 36: Planned THAAD Flight Testing 116 

Table 37: THAAD Cost 117 

Table 38: Patriot/MEADS CAP Planned Costs 123 

Figures 

Figure 1: Phases of a Ballistic Missile’s Trajectory 5 

Figure 2: Breakout of MDA Budget 9 

Figure 3: Aegis BMD Fiscal Year 2004 Cost and Schedule 

 Performance 49 

Figure 4: ABL Block 2004 Prime Contract 61 

Figure 5: ABL Fiscal Year 2004 Cost and Schedule Performance 62 

Figure 6: C2BMC Fiscal Year 2004 Cost and Schedule Performance 72 

Figure 7: Components of the GMD Element 76 

Figure 8: GMD Fiscal Year 2004 Cost and Schedule Performance 88 

Figure 9: STSS Fiscal Year 2004 Cost and Schedule Performance 107 

Figure 10: THAAD Fiscal Year 2004 Cost and Schedule 

 Performance 119 

Abbreviations 

ABL Airborne Laser 

Aegis BMD Aegis Ballistic Missile Defense 

AI&T Assembly, Integration, and Testing 

BC/FC Beam Control / Fire Control 

BILL Beacon Illuminator Laser 

BMC2 Battle Management, Command and Control 

BMC4I Battle Management, Command, Control, 

 Communications, Computer, and Intelligence 

BMDS Ballistic Missile Defense System 
Page vi GAO-05-243 Missile Defense 

BV Booster Validation 

C2BMC Command, Control, Battle Management, and 

 Communications 

CAP Combined Aggregate Program 

COIL Chemical Oxygen-Iodine Laser 

CONOPS Concept of Operations 

CONUS Continental United States 

CTF Control Test Flight 

DOD Department of Defense 

DOT&E Director, Operational Test and Evaluation 

EVM Earned Value Management 

FM Flight Mission 

FT Flight Test 

FY fiscal year 

GMD Ground-based Midcourse Defense 

IBR Integrated Baseline Review 

ICBM Intercontinental Ballistic Missile 

IFICS In-Flight Interceptor Communications System 

IFT Integrated Flight Test 

IGT Integrated Ground Test 

IT Integrated Test 

KEI Kinetic Energy Interceptors 

LDO Limited Defensive Operations 

LRS&T Long-Range Surveillance and Tracking 

MEADS Medium Extended Air Defense System 

MDA Missile Defense Agency 

MRBM Medium Range Ballistic Missile 

MSE Missile Segment Enhancement 

NFIRE Near Field Infrared Experiment 

O&S Operations and Support 

OSC Orbital Sciences Corporation 

OTA Other Transaction Agreement 

PAC-3 Patriot Advanced Capability-3 

PMRF Pacific Missile Range Facility 

RDT&E Research, Development, Test, and Evaluation 

SBIRS Space-Based Infrared System 

SBX Sea-Based X-band Radar 

SCF Seeker Characterization Flight 

SDACS Solid Divert and Attitude Control System 

SICO System Integration and Checkout 

SIL System Integration Laboratory 

SM Standard Missile 

SRBM Short Range Ballistic Missile 

SRR System Requirements Review 
Page vii GAO-05-243 Missile Defense 

STSS Space Tracking and Surveillance System 

TILL Target Illuminator Laser 

THAAD Terminal High Altitude Area Defense 

UEWR Upgraded Early Warning Radar 

USNORTHCOM U.S. Northern Command 

USPACOM U.S. Pacific Command 

USSTRATCOM U.S. Strategic Command 

VAFB Vandenberg Air Force Base 

WSMR White Sands Missile Range 

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Page 1 GAO-05-243 Missile Defense 

March 31, 2005 

Congressional Committees 

Our nation’s first missile defense system for protecting the United States 

from intercontinental ballistic missile (ICBM) attacks is expected to be 

activated for defensive operations in the coming months. This initial 

capability is the culmination of efforts on the part of the Missile Defense 

Agency (MDA) and other Department of Defense (DOD) components in 

response to the President’s December 2002 directive to begin fielding an 

initial set of missile defense capabilities to meet the near-term ballistic 

missile threat to our nation. It also represents a major result of the $85 

billion invested in ballistic missile defense programs since fiscal year 1985. 

DOD’s investment in missile defense continues, as indicated by proposed 

budgets for the next few years. The Department estimates MDA will need 

$66.5 billion between fiscal years 2005 and 2011 to continue work in this 

area, with fiscal year 2005 appropriations of $8.8 billion accounting for 13 

percent of DOD’s total research and development budget.1

The initial capability, which DOD refers to as Limited Defensive 

Operations (LDO), is the first step of a national priority to develop, field, 

and evolve over time an overarching Ballistic Missile Defense System 

(BMDS). While DOD envisions a BMDS capable of protecting the United 

States, deployed forces, friends, and allies from ballistic missile attacks of 

all ranges, the LDO capability is primarily designed to provide some 

protection of the United States against long-range ballistic missile attacks 

out of Northeast Asia. 

In developing the BMDS, MDA is attempting to follow an evolutionary 

acquisition strategy in which the development and fielding of capabilities 

is pursued in 2-year blocks. The configuration of a given block builds on 

the work completed in previous blocks. Block 2004, being deployed during 

the calendar years 2004-2005, is the first biennial increment of the BMDS 

 1

DOD also funds missile defense activities outside of MDA. The Army requested 

approximately $4.5 billion for the development and procurement of its Combined 

Aggregate Program—consisting of Patriot and the Medium Extended Air Defense System—

during fiscal years 2006 through 2011. Appendix IX provides additional information on this 

program. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-243 Missile Defense 

to provide an integrated set of capabilities. LDO represents an interim 

capability on the path to full Block 2004 fielding. 

The National Defense Authorization Act for Fiscal Year 2002 directed DOD 

to establish schedule, testing, performance, and cost goals for its ballistic 

missile defense programs.2 As established by DOD, the goals highlight, by 

block, overall cost, schedule, and performance objectives for BMDS 

development and specify the quantities and locations of specific BMDS 

components3

 planned for operational use. The act also directed us to 

assess, at the conclusion of each of fiscal years 2002 and 2003, the extent 

to which MDA achieved the goals it established. We delivered an 

assessment covering fiscal year 2003 to Congress in April 2004.4

Congress has since continued to require our assessment through fiscal 

year 2006.5

 To fulfill this mandate, we examined the progress that MDA 

made in fiscal year 2004 toward its stated goals. For example, many 

activities completed in fiscal year 2004 by the various element programs 

pertain to the completion of the LDO capability, which is an integral part 

of the Block 2004 goals. While conducting this review, we identified issues 

associated with MDA’s ability to fund future development and fielding of 

its missile defense capabilities and with MDA’s application of the block 

approach. Our report includes these observations. 

The accomplishment of MDA program goals is ultimately achieved through 

the efforts of individual BMDS elements, such as Ground-based Midcourse 

Defense and Airborne Laser. Therefore, we based our assessment on the 

progress made in fiscal year 2004 by those elements that are under the 

management of MDA and that are being developed as part of a block 

capability. The elements we reviewed accounted for 72 percent of MDA’s 

fiscal year 2004 research and development budget. Details of our scope 

and methodology can be found in appendix X. 

 2

 Pub. L. No. 107-107, section 232. 

3

 Functional pieces of system equipment, such as radars and interceptors, are referred to as 

“components.” 

4

 GAO, Missile Defense: Actions Are Needed to Enhance Testing and Accountability, 

GAO-04-409 (Washington, D.C.: Apr. 23, 2004). 

5 Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. No. 

108-375, section 233. 
Page 3 GAO-05-243 Missile Defense 

By the end of fiscal year 2004, MDA carried out activities needed to field 

an initial missile defense capability, as planned. This included delivery and 

emplacement of Ground-based Midcourse Defense interceptors; upgrades 

of ground-based radars; enhancements to Aegis Navy ships for improved 

surveillance and tracking; development of command and control software 

for system operation; and tests to verify that components of this initial 

capability can communicate as part of an integrated whole. However, the 

performance of the system remains uncertain and unverified, because 

MDA has not successfully completed a flight test using operationallyrepresentative hardware and software. Additionally, the development of 

system elements cost approximately $370 million more than planned 

during fiscal year 2004. To cover much of this cost overrun, MDA deferred 

work planned for fiscal year 2004, redirected funds earmarked for other 

programs, and requested additional funds in its fiscal year 2005 budget to 

cover the cost of deferred work. 

Two issues have relevance for decision makers in Congress and DOD 

when considering future budget decisions for the missile defense program. 

First, although MDA has received nearly all funding requested in the past 

few years, the agency is expected to face increased funding risks—arising 

from sources both outside and within DOD—in the years ahead. MDA 

plans to request, on average, about $10 billion in research and 

development funding per year over the 2006-2011 time period to support 

continued development, procurement, and sustainment of hardware and 

software that MDA is fielding.6

 However, DOD’s acquisition programs are 

likely to be competing for a decreasing share of the total federal budget 

that is allocated to discretionary (non-mandatory) spending. Also, within 

DOD, MDA’s programs are competing against hundreds of technology 

development and acquisition programs for DOD’s research and 

development budget—$70 billion in fiscal year 2005—and cost growth of 

existing weapon programs7

 puts even more pressure on MDA’s share of 

research and development dollars. Additionally, funding risks can be 

expected from cost growth of ongoing MDA programs. For example, as 

part of the restructuring of MDA’s Airborne Laser program, the cost to 

 6

 Congress authorized DOD’s use of funds appropriated for MDA research, development, 

test, and evaluation for the fielding of ballistic missile defense capabilities. Pub. L. No. 

108-136, section 222; Pub. L. No. 108-375, section 231. 

7

 We found, for example, that research and development cost estimates grew $6.7 billion 

for the Joint Strike Fighter in calendar year 2003 and $9.2 billion for the Future Combat 

System in fiscal year 2004. 

Results in Brief 
Page 4 GAO-05-243 Missile Defense 

accomplish the objective of developing and demonstrating a prototype 

aircraft increased by $1.5 billion. Finally, procurement and sustainment 

will demand increasing levels of MDA’s funding as more components are 

fielded over time. 

Second, we observed that MDA’s cost goal for a given block—which, by 

definition, is MDA’s budget for all developmental and fielding activities 

associated with the block—is not aligned with the block’s fielding goals. 

According to MDA policy, for example, interceptors identified with the 

Block 2004 fielding goals and fielded during calendar years 2004-2005 

should be funded as part of the Block 2004 cost goal. However, we found 

that MDA has not been consistently matching a block’s cost and fielding 

goals. For example, Block 2004 funds are used to procure 32 Aegis 

Ballistic Missile Defense missiles, but of these missiles, 11 will be 

delivered in 2004-2005 and the remaining missiles will be delivered during 

2006-2007. Also, counter to the definition of a block as an integrated set of 

capabilities fielded during the 2-year block window, the Airborne Laser 

program will not field any capabilities during Block 2004 although Block 

2004 funds are used in the program’s development. 

We are recommending that MDA clarify its block policy to ensure that a 

block’s cost and fielding goals are consistently aligned. DOD concurred 

with our recommendation. 

Ballistic missile defense is a challenging mission for DOD, requiring a 

unique combination of defensive components—space-based sensors, 

surveillance and tracking radars, advanced interceptors, command and 

control, and reliable communications—working together as an integrated 

system. A typical scenario to engage an ICBM is expected to unfold as 

follows: 

• Overhead satellites detect a missile launch and alert the command 

authority of a possible attack. 

• Upon receiving the alert, the BMDS directs its land- and sea-based 

radars to track the missile complex and (if so designed) to identify the 

warhead from decoys and associated objects. 

• Based on accurate track data, an interceptor—consisting of a “kill 

vehicle” mounted atop a booster—is launched. The interceptor boosts 

itself toward the predicted intercept point and releases its kill vehicle 

to engage the threat. 

Background 
Page 5 GAO-05-243 Missile Defense 

• The kill vehicle uses its onboard sensors and divert thrusters to 

acquire, identify, and steer itself into the warhead. With a combined 

closing speed on the order of 10 kilometers per second (22,000 miles 

per hour), the warhead is destroyed through a “hit-to-kill” collision with 

the kill vehicle. 

To meet this challenge, DOD intends to develop and field a ballistic missile 

defense system capable of defeating ballistic missiles during all phases of 

flight (see fig. 1). 

Figure 1: Phases of a Ballistic Missile’s Trajectory 

Under the evolutionary, capabilities-based acquisition strategy being 

pursued by DOD, the BMDS has no fixed design or final architecture, and 

there are no firm requirements. According to DOD, this approach gives 

MDA increased flexibility to develop a system that can more readily 

respond to a changing threat and more easily insert new technologies for 

enhancing system performance. 

The missile defense capability of Block 2004 is primarily one for defending 

the United States against ICBM attacks from Northeast Asia and the 

Middle East. It is built around the Ground-based Midcourse Defense 

(GMD) element, augmented by shipboard Aegis Ballistic Missile Defense 

(Aegis BMD) radars, and integrated by the Command, Control, Battle 

Management, and Communications (C2BMC) element. The Block 2004 

Booster

Burnout

Boost

phase

Midcourse

phase

Midcourse

phase

Terminal

phase

Boost phase is the first phase of a ballistic missile’s trajectory, 

during which a missile’s rocket motors are thrusting. This phase 

typically lasts 3-5 minutes for intercontinental ballistic missiles. 

Midcourse phase is the phase after which the missile has 

stopped thrusting and the deployed warhead and associated 

objects (e.g., decoys) travel through space on a predictable 

path. This phase can last 20 minutes for intercontinental 

ballistic missiles and provides the largest window of opportunity 

for intercepting the enemy missile.

Terminal phase is the final phase of a ballistic missile’s 

trajectory, lasting about a minute or less. This is when the 

warhead reenters the atmosphere. To defend against a ballistic 

missile attack during this phase, the defensive capability must 

be positioned close to the warhead’s intended target.

Boost phase is the first phase of a ballistic missile’s trajectory, 

during which a missile’s rocket motors are thrusting. This phase 

typically lasts 3-5 minutes for intercontinental ballistic missiles. 

Midcourse phase is the phase after which the missile has 

stopped thrusting and the deployed warhead and associated 

objects (e.g., decoys) travel through space on a predictable 

path. This phase can last 20 minutes for intercontinental 

ballistic missiles and provides the largest window of opportunity 

for intercepting the enemy missile.

Terminal phase is the final phase of a ballistic missile’s 

trajectory, lasting about a minute or less. This is when the 

warhead reenters the atmosphere. To defend against a ballistic 

missile attack during this phase, the defensive capability must 

be positioned close to the warhead’s intended target.

Reentry (100 km altitude)

Source: MDA (data); GAO (presentation).
Page 6 GAO-05-243 Missile Defense 

BMDS also includes the Army’s Patriot element for point defense of 

deployed U.S. forces against short- and medium-range ballistic missiles. 

The Block 2006 program builds directly upon Block 2004. It continues 

element development and funds the next increment of fielding that adds 

interceptors, new radars, and enhanced battle management capabilities. 

MDA is also carrying out an extensive research and development effort to 

expand its current operational capability into future blocks. During fiscal 

year 2004, MDA funded the development of four other major BMDS 

elements—Airborne Laser (ABL), Kinetic Energy Interceptors (KEI), 

Space Tracking and Surveillance System (STSS), and Terminal High 

Altitude Area Defense (THAAD)—in addition to those elements 

comprising the Block 2004 defensive capability. MDA intends to integrate 

these elements, when ready, into future BMDS blocks. Table 1 provides a 

brief description of these elements, and more information about them is 

provided in appendixes II through VIII of this report.8

Table 1: BMDS Elements 

Element Missile defense role 

Aegis Ballistic Missile Defense Aegis BMD is a ship-based system designed to destroy short- and mediumrange ballistic missiles during the midcourse phase of flight. Its mission is twofold: to protect deployed U.S. forces, allies, and friends against ballistic missile 

attacks, and to serve as a forward-deployed BMDS sensor, especially in support 

of the GMD mission. MDA has plans to deliver up to 66 Aegis BMD missiles—

the Standard Missile 3—and 18 ships by the end of fiscal year 2009. 

Airborne Laser ABL is an air-based system designed to destroy all classes of ballistic missiles 

during the boost phase of flight. ABL employs a high-energy chemical laser to 

rupture a missile’s motor casing, causing the missile to lose thrust or flight 

control. MDA plans to demonstrate proof of concept in a system demonstration 

no earlier than 2008. The availability of a militarily useful capability is contingent 

on the success of the demonstration. 

Command, Control, Battle Management, and 

Communications 

C2BMC is the integrating and controlling element of the BMDS. Although it is 

part of the Block 2004 defensive capability, its role during this period is limited to 

mission planning and situational awareness—monitoring system status and 

missile trajectories. 

 8

 Table 1 lists those elements of the BMDS for which we completed a detailed review of 

progress achieved in fiscal year 2004. Because we were directed to assess MDA’s progress 

in achieving its program goals and MDA does not have funding and management 

responsibility for the Patriot system, our review of this program—provided in appendix 

IX—is not as detailed. Rather, we provide information on how Patriot’s eventual 

replacement, Medium Extended Air Defense System (MEADS), will be inserted into fielded 

Patriot units. 
Page 7 GAO-05-243 Missile Defense 

Element Missile defense role 

Ground-based Midcourse Defense GMD is a ground-based system designed to destroy ICBMs during the 

midcourse phase of flight. Its mission is to protect the U.S. homeland against 

ballistic missile attacks from Northeast Asia and the Middle East. GMD is part of 

the Block 2004 defensive capability and has plans to field 18 interceptors by 

2005. MDA plans to field 20 additional interceptors in Alaska by 2010. 

Kinetic Energy Interceptors KEI is a land-based element designed to destroy ICBMs during the boost and 

ascent phases of flight. MDA expects to demonstrate a defensive capability 

through flight testing during Block 2012 and expand this capability to sea basing 

in subsequent blocks. 

Space Tracking and Surveillance System The Block 2006 STSS element consists of a constellation of two demonstration 

satellites. MDA intends to use these satellites for testing missile warning and 

tracking capabilities. Any real operational capability of next-generation satellites, 

however, will not be available until the next decade. 

Terminal High Altitude Area Defense THAAD is a ground-based element designed to destroy short- and mediumrange ballistic missiles during the late-midcourse and terminal phases of flight. 

Its mission is to defend deployed U.S. forces and population centers. MDA plans 

to field a Block 2006/2008 unit consisting of 24 missiles in 2009. 

Sources: MDA (data); GAO (presentation). 

As part of MDA’s planning process, MDA defines overarching program 

goals for the development and fielding of BMDS block configurations. The 

goals describe the composition of a block (components and elements 

under development and planned for fielding), provide the costs and 

schedules associated with element development and fielding, and 

summarize performance capabilities at the component and system levels.9

A block’s cost goal is the portion of MDA’s budget dedicated to 

development and fielding activities associated with the block. 

MDA has established Block 2004 and 2006 “Development Goals” for the 

continued development and testing of six BMDS elements—ABL, Aegis 

BMD, C2BMC, GMD, STSS, and THAAD—and stand-alone components 

such as forward-deployed radars.10 These goals identify the developmental 

areas MDA is funding as part of the Block 2004 and 2006 programs. The 

associated cost goals, which are the planned budgets for these activities, 

are approximately $5.7 billion and $12.2 billion for Block 2004 and 2006, 

respectively. 

 9

 MDA goals are formally detailed in the agency’s budget estimates and in the top-level 

MDA document, Statement of Goals. 

10 The KEI program is funded by the Block 2012 program and, accordingly, is not part of the 

Block 2004 and 2006 goals. 
Page 8 GAO-05-243 Missile Defense 

MDA also established a complementary set of goals—referred to as 

“Fielded Configuration” Goals11—in response to the President’s December 

2002 direction to begin fielding a limited ballistic missile defense 

capability. The fielding goals build directly upon the Development Goals 

but aim to deliver an operational missile defense capability during a given 

block’s time frame. For example, Block 2004 goals identify the 

components of the BMDS available for defensive operations by the end of 

December 2005. MDA states that the cost goals associated with the Block 

2004 and 2006 fieldings are $1.7 billion and $3.8 billion, respectively. 

Therefore, the total cost goals for Block 2004 and 2006 are $7.4 billion and 

$16.0 billion, respectively. 

Figure 2 depicts MDA’s total budget between fiscal years 2005 and 2011 

broken out by block.12 As illustrated, funding for a given block spans more 

than the 2-year period. For example, MDA estimates it will need about 

$12.0 billion to fund Block 2008 activities over the next 7 years through 

2011. 

 11 In budget documentation submitted in February 2004, MDA referred to these goals as 

“Operational Alert Configuration” Goals. “Fielded Configuration” is new terminology. 

12 Mission area investment noted in figure 2 represent funding of major mission areas that 

contribute to the development and enhancement of all blocks. For example, these 

investments fund system design and engineering activities, testing, advanced concept 

development, and other special programs. 
Page 9 GAO-05-243 Missile Defense 

Figure 2: Breakout of MDA Budget 

Note: MDA’s total budget for a given fiscal year is represented by the expenditures for all block 

activities plus mission area investments. For example, MDA’s fiscal year 2005 budget of $8.806 

billion is comprised of $1.605 billion for mission area investments, $2.854 billion for Block 2004 

activities, $3.216 billion for Block 2006 activities, $817 million for Block 2008 activities, $48 million for 

Block 2010 activities, and $267 million for Block 2012 activities. 

Many activities completed in fiscal year 2004 by the various element 

programs pertain to the completion of the LDO capability—the initial 

capability fielded by MDA. Although LDO is not formally listed by MDA as 

a Block 2004 goal, it does include the delivery of a capability on the path to 

meeting the fielding goals. Table 2 summarizes MDA’s fielding goals. 

Table 2: MDA Block 2004 Fielded Configuration Goals 

BMDS element Functionality 

LDO 

(Sept. 30, 2004) 

Block 2004 

(Dec. 31, 2005) 

GMD Defend the U.S. homeland against 

ICBM attacks 

• 5 Interceptors 

• Upgraded Cobra Dane radar 

• 1 Upgraded early warning radar 

(Beale) 

• Fire control nodes 

• 20 Interceptors 

• Upgraded Cobra Dane radar 

• 2 Upgraded early warning radars 

(Beale, Fylingdales) 

• Sea-based X-band radar 

• Fire control nodes 

0

2,000

4,000

6,000

8,000

10,000

2005 2006 2007 2008 2009 2010 2011

Block 2014

Dollars in millions

Block 2012

Block 2010

Source: MDA (data); GAO (presentation).

Block 2008

Block 2006

Block 2004

Mission area investment
Page 10 GAO-05-243 Missile Defense 

BMDS element Functionality 

LDO 

(Sept. 30, 2004) 

Block 2004 

(Dec. 31, 2005) 

Aegis BMD Sea-based engagement capability 

against short- and medium-range 

ballistic missiles; early tracking of 

ICBMs as a BMDS sensor 

• 3 Aegis destroyers (long-range 

surveillance and tracking only) 

• Up to 9 missiles 

• 10 Aegis destroyers (long-range 

surveillance & tracking only) 

• 3 Aegis cruisers (engagement) 

C2BMC Integrating element of the BMDS; 

situational awareness; mission 

planning 

• Software Build 4.3 

• Suites (command centers) and 

supporting hardware at various 

locations 

• Software Build 4.5 

• Suites (command centers) and 

supporting hardware at various 

locations 

Sources: MDA (data); GAO (presentation). 

Note: Performance goals are not presented in this report because they are classified. 

The GMD, Aegis BMD, and C2BMC programs completed scheduled 

activities in fiscal year 2004 necessary to support the fielding of LDO, an 

integral part of Block 2004. Most notably, the GMD program completed 

construction activities at GMD sites, delivered and emplaced five GMD 

interceptors in their silos at Fort Greely, Alaska, and completed the 

upgrade of the Cobra Dane radar. The Aegis BMD program upgraded three 

destroyers for the long-range surveillance and tracking mission that 

supports homeland defense against ICBMs. In addition, the C2BMC 

program completed software development, activated control centers, and 

worked to integrate elements of the system. 

These programs also continued developmental and fielding activities in 

early fiscal year 2005 to enhance LDO so that the full Block 2004 capability 

could be realized by the end of calendar year 2005. For example, the GMD 

program delivered a sixth interceptor at Fort Greely in October and two 

interceptors at Vandenberg Air Force Base in December, completed the 

upgrade of the Beale early warning radar, and initiated the upgrade of the 

Fylingdales early warning radar. In addition, the Aegis BMD program 

completed the assembly of five missiles and continued with software 

development in the upgrade of its cruisers and destroyers. Similarly, the 

C2BMC program continued with software development and testing leading 

to the final Block 2004 version. 

Progress made toward achieving program goals relative to the fielding of 

the LDO and Block 2004 capabilities is summarized in tables 3 and 4, 

respectively. Detailed evaluations of activities completed in fiscal year 

2004 by all BMDS elements are given in appendices II through VIII of this 

report. 

Assessment of 

Scheduled Activities 

in Fiscal Year 2004 
Page 11 GAO-05-243 Missile Defense 

Table 3: Progress toward Achieving LDO 

BMDS 

element Functionality 

LDO 

(Sept. 30, 2004) Progress assessment 

GMD Defend the U.S. homeland 

against ICBM attacks from 

Northeast Asia 

• 5 Interceptors 

• Upgraded Cobra Dane 

radar 

• 1 Upgraded early warning 

radar (Beale) 

• Fire control nodes 

The GMD program emplaced 5 interceptors at Fort 

Greely, Alaska, by September 2004. Many site 

preparation activities, including the construction of 

facilities and interceptor silos at Fort Greely to prepare the 

system for LDO, were completed. 

The GMD program completed the upgrade of the Cobra 

Dane radar on Shemya Island, Alaska. The upgrades, 

which consist of hardware and software improvements, 

enable the radar to more accurately track launched 

missiles for the planning of intercept engagements. 

The upgrade of the early warning radar at Beale Air Force 

Base, California, was completed in December 2004. 

Although radar hardware installation is complete, final 

software installation and testing are ongoing with 

completion expected in the middle of fiscal year 2005. 

Aegis BMD Early tracking of ICBMs as 

a BMDS sensor 

• 3 Aegis destroyers (longrange surveillance and 

tracking only) 

Aegis BMD will be used as a forward-deployed sensor to 

provide surveillance and early tracking of long-range 

ballistic missiles to support the GMD mission. This is 

being accomplished through the improvement of Aegis 

BMD software and hardware. The Aegis BMD program 

office completed the upgrade of 2 destroyers for this role 

in September 2004; a third destroyer became available in 

October 2004. All 3 destroyers are available for 

operations. 

C2BMC Integrating element of the 

BMDS; situational 

awareness; mission 

planning 

• Software Build 4.3 

• Suites (command centers) 

and supporting hardware at 

various locations 

The C2BMC program office completed activities needed to 

ready the C2BMC element for LDO. Of significance, the 

LDO “build” of C2BMC, known as spiral 4.3, was delivered 

and C2BMC suites activated. The program also carried 

out a number of activities enabling BMDS integration and 

warfighter training. 

Sources: MDA (data); GAO (presentation). 
Page 12 GAO-05-243 Missile Defense 

Table 4: Progress toward Achieving Block 2004 Fielded Configuration Goals\ 

BMDS 

element Functionality 

Block 2004 

(Dec. 31, 2005) Progress assessment 

GMD Defend the U.S. 

homeland against 

ICBM attacks from 

Northeast Asia and the 

Middle East 

• 20 Interceptors 

• Upgraded Cobra Dane radar 

• 2 Upgraded early warning 

radars (Beale, Fylingdales) 

• Sea-based X-band radar 

• Fire control nodes 

The GMD program continued to add interceptors to its 

inventory. As of December 2004, 6 interceptors are in 

silos at Fort Greely, Alaska, and 2 at Vandenberg Air 

Force Base, California. The GMD program aims to 

increase its inventory of interceptors for the Block 2004 

defensive capability to 20 by December 2005. However, 

MDA designated 2 interceptors as test assets. Therefore, 

the Block 2004 GMD inventory will consist of 18 

interceptors. 

The GMD program began upgrading the early warning 

radar at Fylingdales Airbase in England. Facility 

modifications are on track to be completed by the first 

quarter of fiscal year 2006. 

The GMD program office completed a variety of activities 

in the development of the sea-based X-band radar but 

assesses its planned completion by the first quarter of 

fiscal year 2006 as high risk. 

Aegis BMD Sea-based 

engagement capability 

against short- and 

medium-range ballistic 

missiles; early tracking 

of ICBMs as a BMDS 

sensor 

• Up to 9 missiles 

• 10 Aegis destroyers (longrange surveillance & tracking 

only) 

• 3 Aegis cruisers (engagement) 

As of December 2004, the Aegis BMD program completed 

assembly of 5 missiles, which are available for fielding. 

Program officials stated that the program expects to have 

available a slightly smaller inventory of missiles by 

December 2005 than was originally planned. 

The Aegis BMD program aims to increase to 10 by 

December 2005 the number of upgraded destroyers 

providing surveillance and early tracking of long-range 

ballistic missiles in support of the GMD mission. As of 

January 2005, 5 had been upgraded. 

The Aegis BMD program is also upgrading Aegis cruisers 

for the element’s engagement role; that is, to defend 

against short- and medium-range ballistic missiles. This 

requires physical modification to the ships as well as 

software upgrades for the engagement role. As of 

December 2004, 1 cruiser—a ship dedicated to testing—

has been upgraded. The program expects to complete the 

upgrade of 1 additional cruiser (rather than 2) by 

December 2005. 

C2BMC Integrating element of 

the BMDS; situational 

awareness; mission 

planning 

• Software Build 4.5 

• Suites (command centers) and 

supporting hardware at various 

locations 

The C2BMC program office continued with activities 

needed to ready the C2BMC element for the full Block 

2004 capability. In particular, development of the interim 

build, spiral 4.4, was completed in November 2004. The 

program office anticipates that development of the final 

Block 2004 build, spiral 4.5, will be completed in March 

2005, after which testing will begin. 

Sources: MDA (data); GAO (presentation). 
Page 13 GAO-05-243 Missile Defense 

DOD did not activate the LDO capability MDA developed and fielded. 

Although the LDO capability was expected to be placed on alert by the end 

of September 2004, officials from the office of the Commander of U.S. 

Strategic Command (USSTRATCOM) told us that September 30, 2004, was 

a planning date rather than a “hard date.” The officials indicated that the 

system had not been put on alert for the following reasons: 

• Shakedown. Since October 2004, the system has been undergoing a 

“shakedown”—a necessary transition phase between development and 

operations. During this time, the system is exercised as though an 

attack is under way. It enables the warfighter to become familiar with 

the system and, importantly, to plan for unexpected failures. 

• Training. While initial training of operators has been completed, more 

is needed. For weapon systems in general, the warfighter does not have 

a military capability without trained operators, and training cannot 

begin until a weapon system is delivered (or at least far along in 

development). 

• Policy. USSTRATCOM must receive an Execution Order from the 

Secretary of Defense before the LDO capability is declared operational. 

This order, which would reflect DOD policy, is to include a clear 

identification of command and control relationships. USSTRATCOM 

plans to advise the Secretary of Defense on the military utility of the 

system and could advise against declaring the system operational if, for 

example, more testing were needed to increase the command’s 

confidence in the system’s effectiveness. Also, the concept of 

operations (CONOPS) was not finalized, and issues such as the 

integration of defensive and offensive operations still had to be worked 

out. 

USSTRATCOM officials further explained that the declaration of LDO may 

or may not mean the system is “on alert” for defensive operations—LDO 

operation is more complicated than “being on” or “being off” alert. For 

example, the system could be in “developmental mode” when operated by 

MDA for testing but capable of being transitioned to an “operational 

mode” for defensive operations given sufficient time.13 As of March 2005, 

DOD had not announced a specific date for activating the initial missile 

defense capability. 

 13 Additional details on system availability and readiness are classified. 
Page 14 GAO-05-243 Missile Defense 

MDA completed a number of ground tests and exercises in fiscal year 

2004, but key flight tests using LDO-configured components were delayed. 

For example, MDA verified integration and connectivity between its GMD, 

Aegis BMD, and C2BMC elements, and the warfighter participated in 

several missile defense exercises (wargames) as part of their training to 

understand and operate the system. However, the GMD program office 

conducted two booster tests (non-intercept attempts) in fiscal year 2004 

even though six flight tests were planned. As a result, GMD interceptors 

were emplaced in silos before flight testing was completed to verify that 

LDO hardware and software could function in an operational environment. 

A summary of significant testing completed during fiscal year 2004 by each 

of the respective element programs is presented in table 5. More thorough 

discussions of element testing are given in appendices II through VIII of 

this report. 

Table 5: Status of Element Testing—Planned and Achieved 

Element Key testing accomplished 

Aegis BMD The Aegis BMD program conducted Flight Mission 6 (FM-6) in December 2003, during which an 

SM-3 missile successfully intercepted a short-range ballistic missile target. In addition, the Aegis 

BMD element participated in non-intercept test events to assess the element’s long-range tracking 

and surveillance (LRS&T) function—that is, using its shipboard SPY-1 radar to track long-range 

ballistic missiles—and to verify connectivity with the BMDS, that is, pass track data to the C2BMC 

and GMD elements. 

The program also conducted a series of ground tests focused on validating design updates to its 

Solid Divert and Attitude Control System (SDACS)—a collection of solid-fuel thrusters used to steer 

the kinetic warhead (kill vehicle) into its designated target. In response to a flight test failure in 

2003, the program modified the design of this subcomponent to improve its performance and 

reliability during high-energy pulse operation. 

ABL The ABL program demonstrated “First Light”—the combined operation of individual laser modules 

to generate a single laser beam—in the first quarter of fiscal year 2005 (Nov. 2004). Although the 

achievement of “First Light” is a key milestone for the program, it was not intended to be an 

operational demonstration of a high-power laser, that is, at full power and for the length of time 

needed to shoot down a boosting missile. Rather, the laser’s operation for a fraction of a second 

demonstrated successful integration of subsystems. 

The ABL program also completed “First Flight” in the first quarter of fiscal year 2005 (Dec. 2004). 

Also a key milestone for the program, “First Flight” demonstrated the flight worthiness of the 

demonstrator aircraft with its newly installed laser beam control system. 

C2BMC The C2BMC program conducted system-level testing of its LDO software, spiral 4.3, during fiscal 

year 2004 and into fiscal year 2005. Spiral 4.3 was tested in a number of venues, including Pacific 

Explorer III,a

 Glory Trip 185,b a GMD-focused System Integration and Checkout,c and wargames 

that enabled the warfighter to exercise the C2BMC in a simulated operational environment. 

Assessment of Testing 

in Fiscal Year 2004 

Significant Testing Was 

Completed 
Page 15 GAO-05-243 Missile Defense 

Element Key testing accomplished 

GMD During fiscal year 2004, the GMD program conducted two non-intercept flight tests—one for each 

of its Lockheed and Orbital Sciences Corporation (OSC) boosters. Booster objectives were 

achieved in both flight tests, however, the mock kill vehicle failed to deploy from the Lockheed 

booster. The Lockheed booster test was conducted 11 months late because of problems with a 

propellant vendor. The OSC booster test was conducted 6 months late. 

GMD conducted a series of integrated ground tests in fiscal year 2004. These tests employed 

actual GMD-component processors integrated together in a hardware-in-the-loop facility that 

emulated GMD operation in a simulated environment. They also included warfighter participation to 

aid in the development of operational concepts. 

Finally, the GMD program performed a series of System Integration and Checkoutsc

 of its fielded 

components. While these checkouts did not assess element performance, they demonstrated 

connectivity, functionality, and integration as part of final preparations for defensive operations. 

KEI The KEI program initiated element development in December 2003 when MDA selected Northrop 

Grumman as the prime contractor. At this early stage of development, no significant testing has 

been conducted by the program office. 

Because of the need to restructure the prime contract in response to reduced funding, KEI’s first 

integrated flight test is planned for no earlier than 2010, depending on the outcome of the 

program’s re-planning. 

STSS MDA is currently working on the first increment of STSS, which is focused on the preparation and 

launch of two demonstration satellites partially built under the former Space Based Infrared System 

Low program. MDA plans to launch these satellites in 2007. At that time, testing will be conducted 

to assess how well the satellites perform surveillance and tracking functions. 

THAAD The THAAD flight-test program consists of 15 flight-test events divided among Blocks 2006 and 

2008. Because of delays in booster deliveries arising from the need for a new propellant vendor, 

the first set of flight tests have been delayed 3-5 months. The element’s first test, a control test 

flight of the missile (non-intercept attempt), is planned to be conducted in the third quarter of fiscal 

year 2005, a two-quarter slip. The element’s first intercept attempt, Flight Test 4, is scheduled to be 

conducted during the second quarter of fiscal year 2006, a two-quarter slip. 

Sources: MDA (data); GAO (presentation). 

a

Pacific Explorer exercises are field exercises to demonstrate BMDS connectivity. An Aegis destroyer 

participates by tracking an actual missile (or a simulated target) and passes track data to the C2BMC. 

b

Glory Trips are live flight tests during which a Minuteman III missile is launched from Vandenberg Air 

Force Base as part of Follow-on Test and Evaluation. 

c

System Integration and Checkouts are conducted by the GMD program to verify connectivity, 

functionality, and integration of system components. They are not used to assess system 

performance. 

The GMD program conducts integrated flight tests (IFT) to realistically 

demonstrate element operation using actual hardware and software. MDA 

planned to conduct several flight tests during fiscal year 2004 to gain 

knowledge about the element’s effectiveness and operation under realworld conditions. However, only two of six flight tests scheduled to occur 

in fiscal year 2004 were conducted. As noted in table 5, these were nonintercept tests of the Lockheed and OSC boosters. A second Lockheed 

booster test (IFT-13A) was deferred indefinitely; two intercept attempts 

Delays and Cancellations 

of GMD Flight Tests Slow 

Attainment of Knowledge 
Page 16 GAO-05-243 Missile Defense 

utilizing LDO-configured hardware and software (IFT-14 and -15) were 

either delayed or cancelled; and, IFT-13C, the first flight test in 2 years 

with the potential for an intercept,14 was delayed 9 months. When IFT-13C 

was conducted in December 2004, the interceptor failed to launch, which 

precluded the fulfillment of key test objectives associated with the LDOconfigured interceptor. 

IFT-13C was of particular significance because it was to have 

demonstrated operational aspects of the LDO capability for the first time 

in a flight test environment. For example: 

• IFT-13C was the first flight test to utilize LDO hardware and software. 

Previous intercept attempts employed a surrogate booster and an 

earlier configuration of the kill vehicle. In particular, IFT-13C was to 

have launched a GMD interceptor comprised of the operational kill 

vehicle mated to an OSC booster. 

• IFT-13C offered the opportunity to exercise Aegis BMD tracking and 

connectivity in a manner consistent with an actual defensive mission, 

that is, to demonstrate Aegis BMD’s ability to serve as a fire-control 

radar15 for ICBM engagements. However, because weather exceeded 

peacetime operational safety limits, Navy commanders withdrew Aegis 

BMD participation from IFT-13C; the program office concurred with 

the decision. 

The delay of IFT-13C by 9 months demonstrates that MDA is responsibly 

following an event-driven test program, that is, conducting tests only when 

ready. IFT-13C was delayed more than once to correct technical problems 

with the interceptor and to upgrade the test interceptor to a configuration 

that matches the ones deployed. However, the event-driven approach was 

not carried over into fielding. Eight GMD interceptors were in their silos 

by the end of December 2004 before flight testing was completed to verify 

that LDO hardware and software could function in an operational 

environment. If future flight testing identifies problems with the 

 14 IFT-13C was a “zero-offset flyby.” Although intercepting the target was not a test 

objective, no action was taken to prevent an intercept. 

15 The fire control radar is the primary radar for providing the necessary targeting data to 

the fire control node (battle management component). In particular, data provided by the 

fire control radar are used to generate an interceptor flyout solution that guides the 

interceptor to the target. 
Page 17 GAO-05-243 Missile Defense 

interceptor, MDA could incur added costs to recall and update fielded 

assets. 

In anticipation of fielding for LDO, the Aegis BMD flight test program 

focused on long-range surveillance and tracking—that is, to operate the 

element as a forward-deployed BMDS sensor—in support of the GMD 

mission. To this end, by October 2004, the Aegis BMD program completed 

software development and upgraded three Aegis destroyers for this role; 

they are available for operations. However, the surveillance and tracking 

function has only been partially demonstrated. For example: 

• Aegis BMD participated in Glory Trip 185, during which an Aegis 

destroyer successfully tracked a Minuteman III ICBM launched from 

Vandenberg Air Force Base. However, the test did not exercise Aegis 

BMD tracking and connectivity in a manner needed for an actual 

defensive mission, that is, as an integral part of the system during 

which the destroyer acts as a fire control radar. In addition, the 

software tested was not the version installed on fielded destroyers. 

• During the Pacific Explorer II field exercise, a destroyer in the Sea of 

Japan successfully passed track data of a simulated target, thereby 

demonstrating connectivity with the BMDS. In Pacific Explorer III, an 

Aegis destroyer planned to track an actual missile and pass track data 

to the BMDS. Although the destroyer tracked the live target missile, a 

malfunction with the target limited the amount of data collected by the 

Aegis destroyer. Specifically, the target ended its flight before Aegis 

BMD could send the GMD element all of the information needed for 

engaging the target. 

• Finally, delays in the GMD flight test program precluded Aegis BMD 

from participating in two planned integrated flight tests, IFT-13C and 

IFT-14, during fiscal year 2004. Without these tests, MDA has not 

verified that the element’s long-range surveillance and tracking 

capability will perform as desired in an actual defensive mission. 

Aegis BMD Conducted 

Limited Testing of Its LongRange Surveillance and 

Tracking Capability 
Page 18 GAO-05-243 Missile Defense 

The 2005 Defense Authorization Act, section 234, directed DOD to conduct 

an operationally realistic test of the BMDS by October 1, 2005, and 

required the Secretary of Defense, in consultation with the Director, 

Operational Test and Evaluation (DOT&E),16 to prescribe appropriate test 

objectives. Such a test is expected to exercise the LDO and Block 2004 

configuration in a more realistic manner. Officials from the office of 

DOT&E told us that the test would be derived from an existing flight test 

with objectives focused more on operational than developmental aspects. 

DOT&E recently approved the operational test portion of MDA’s 

Integrated Master Test Plan. The Integrated Master Test Plan establishes 

the framework for BMDS ground and flight testing through Block 2006. It 

is an overarching document that defines the test plans for the BMDS and 

its elements, identifies operational test objectives to support continuous 

characterization of demonstrated operational capability, and identifies 

associated test resources. 

MDA has conducted various ground and flight tests that provide some 

degree of confidence that the LDO capability—consisting of the GMD 

element, Aegis BMD destroyers for surveillance and tracking, and C2BMC 

for command and control—will operate as intended. In addition, MDA 

predicts that the LDO capability, although limited in inventory, will be 

effective17 in providing some protection of the United States against ICBM 

attacks from Northeast Asia. However, the agency has not verified that the 

LDO capability can operate as an integrated system without range-test 

limitations and artificialities (for example, using surrogate components to 

emulate missile defense functions), and operational testers within DOD 

state that there is not enough data to accurately characterize system 

performance. 

 16 DOT&E is responsible for providing independent oversight of operational test and 

evaluation of major defense acquisition programs to verify their operational effectiveness 

and suitability for combat use. The Director is the principal operational test and evaluation 

official within DOD and advises the Secretary of Defense and Under Secretary of Defense 

for Acquisition, Technology, and Logistics on operational test and evaluation. The Director 

also provides responsible officials with advice on developmental testing. 

17 The term “effective” means that the BMDS can destroy an ICBM with a high probability 

of success. The exact figures, which depend on scenario, are classified. 

MDA Mandated to Conduct 

Operationally Realistic 

Testing 

Assessment of System 

Performance in Fiscal 

Year 2004 
Page 19 GAO-05-243 Missile Defense 

MDA and DOT&E differ on derived estimates of LDO effectiveness. Both 

offices employed similar methodologies—that is, they identified critical 

functions needed to carryout a BMD engagement, estimated the 

probability of success for each function, and combined results into a 

“probability chain” to calculate a total probability of success for a given 

scenario. However, the assessments made by MDA and DOT&E differ in 

that they are based on different types and sources of information. 

MDA’s assessment is based on the output from BMDS-level simulations 

using data derived from a variety of sources, including design 

specifications and output from high-fidelity simulations of various 

components (such as radars and interceptors). By employing digital 

simulations, estimates of system effectiveness are obtained over a wide 

range of conditions, scenarios, and system architectures. These 

simulations are anchored by data collected during flight testing so that 

their underlying models are reflective of real-world operation. 

DOT&E generated its estimates of system effectiveness by also 

approximating each factor of the “probability chain,” but it relied on 

historical data and results from recent ground and flight tests. Based on 

this methodology, DOT&E concluded that there is not enough test data to 

accurately characterize system effectiveness—that is, the estimates are 

too uncertain to make definitive conclusions. In commenting on MDA’s 

methodology, DOT&E officials made the following points: 

• MDA’s computer-based assessments are appropriate for a 

developmental program, but there could be difficulty in interpreting 

results for operational considerations. 

• A noteworthy limitation of MDA’s assessment is the lack of systemlevel performance data. Although its models provide a good 

representation of the system being built, fundamentally they are not 

predictive of actual system performance. 

The uncertainty in LDO effectiveness has a direct impact on how the 

warfighter operates the system. As noted by officials from USSTRATCOM, 

the uncertainty limits the warfighter’s ability to formulate tactics and 

procedures in operating the system, especially with limited inventory. 

In addition, knowledge of component performance can play a useful role 

in fielding decisions by assisting decision makers in determining whether 

the capability available at the time warrants the cost of fielding, operating, 

Assessment of LDO 

Effectiveness Subject to 

Interpretation 
Page 20 GAO-05-243 Missile Defense 

and sustaining the system, or whether additional investment and 

development to enhance the capability are needed. 

MDA has conducted a variety of tests that provide some degree of 

confidence that the LDO capability will operate as intended. For example, 

since 1999, the GMD program has conducted eight flight tests (intercept 

attempts)18 that emulated system operation against ICBM attacks. In 

addition, based on MDA documentation, the various functions of the BMD 

engagement—such as launch detection, tracking, interceptor launch, and 

intercept—have been demonstrated in a variety of venues, including 

simulations, ground tests, and flight tests. Technical indicators monitored 

by GMD, Aegis BMD, and C2BMC show that the elements’ various 

components are on track to function as expected during a BMD 

engagement. For example, the Aegis BMD program projects that the Aegis 

SPY-1 radar is able to deliver adequate performance in support of the GMD 

mission. Furthermore, based on past flight tests, MDA states that 

discrimination performance of the GMD kill vehicle is adequate to meet 

system-level objectives relative to the Block 2004 threat. 

However, collectively, these accomplishments do not verify integrated 

system operation of the LDO capability because of inherent limitations and 

artificialities. An end-to-end test of system operation—beginning with 

launch detection and ending with intercept confirmation—should 

incorporate operational test objectives such as test realism, lack of 

scripting, and the utilization of production-representative hardware. 

Although MDA has progressed in demonstrating such objectives in a 

ground-test setting, they have yet to be demonstrated in end-to-end flight 

tests. As we reported in February 2004,19 GMD flight tests to date have 

demonstrated basic functionality of a representative missile defense 

system using surrogate and prototype components. In addition, they have 

shown success in intercepting a mock reentry vehicle in a developmental 

test environment. However, as developmental tests, they were scripted, 

did not use production-representative hardware and software, and 

 18 GMD’s December 2004 flight test, IFT-13C, and its February 2005 flight test, IFT-14, are 

not counted. 

19 GAO, Missile Defense: Actions Being Taken to Address Testing Recommendations, but 

Updated Assessment Needed, GAO-04-254 (Washington, D.C.: Feb. 26, 2004). 

Integrated Operation of 

LDO Capability Remains 

Unverified 
Page 21 GAO-05-243 Missile Defense 

required the placement of a C-band transponder20 on the target reentry 

vehicle. The transponder was essential for the execution of the flight 

tests—no ground radar of sufficient accuracy for guiding the interceptor 

to the intercept point was available. 

Although MDA has conducted many tests to exercise separate functions of 

the BMD mission, component-level testing in preparation for LDO has 

been incomplete. For example, MDA conducted wargames that enabled 

the warfighter to exercise the C2BMC in a simulated operational 

environment to gain insight in and provide feedback on C2BMC 

capabilities. Also, GMD radars and Aegis BMD destroyers took advantage 

of other DOD missions21 that enabled these elements to exercise radar and 

battle management operations. However, some components have not been 

fully tested: 

• The Cobra Dane radar is located at Eareckson Air Station in Shemya, 

Alaska, at the western end of the Aleutian chain. Its close proximity to 

Russia allows it to perform its primary mission of collecting data on 

ICBMs and submarine-launched ballistic missiles launched into the 

Kamchatka impact area. In fiscal year 2004, the GMD program 

completed hardware installation and software upgrades to the Cobra 

Dane radar. To test these upgrades, Cobra Dane tracked a foreign 

missile launch and participated in an integrated ground test. However, 

the upgraded Cobra Dane radar has not participated in a flight test 

event as the primary fire control radar—a role it would need to fill in 

the event of a real threat. MDA may conduct a test during the third 

quarter of fiscal year 2005 using a long-range air-launched target to 

demonstrate the upgraded Cobra Dane under more operationally 

realistic conditions. 

• Aegis destroyers upgraded for the long-range surveillance and tracking 

capability have not been exercised in a manner consistent with an 

actual defensive mission. That is, the Aegis BMD element has not 

provided track data of a target, in real time, for use in planning a BMD 

mission against a target ICBM. Aegis BMD will first participate in a 

 20 A transponder is a receiver-transmitter that will generate a reply signal under proper 

interrogation. The missile defense community also refers to the transponder as the “C-band 

beacon.” 

21 Most notably are Glory Trips, which are live flight tests during which a Minuteman III 

missile is launched from Vandenberg Air Force Base as part of Follow-on Test and 

Evaluation. 
Page 22 GAO-05-243 Missile Defense 

GMD flight test in this role in fiscal year 2005.22 Despite this concern, 

DOT&E officials believe that Aegis BMD can adequately perform its 

detection and tracking functions. 

We used contractor Cost Performance Reports in combination with 

Earned Value Management (EVM)23 analysis to assess progress made by 

the various element prime contractors toward MDA’s cost and schedule 

goals during fiscal year 2004. The government routinely uses such reports 

to independently evaluate these aspects of the prime contractors’ 

performance. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are generally associated 

with the accomplishment of activities under cost or ahead of schedule, 

while negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. Cost Performance Reports provide 

program mangers and others with information on a contractor’s ability to 

perform work within estimated cost and schedule. When reports show that 

the contractor is encountering problems that cause cost growth, program 

officials can then take actions to prevent further growth. 

We assessed MDA fiscal year 2004 cost performance by reviewing the cost 

performance of each system element, which, in turn, is based on the cost 

performance of its element prime contractor. We used this methodology 

because a large percentage of MDA’s budget is allocated to prime 

contractors that develop the various BMDS elements. As summarized in 

table 6, prime contractors responsible for developing three of the seven 

BMDS elements we reviewed—C2BMC, KEI, and THAAD—completed 

their fiscal year 2004 work at or near budgeted costs. Activities cost more 

than budgeted for the ABL, GMD, and the STSS elements by $114 million, 

$220 million, and $35 million, respectively. Also, our analysis of cost and 

schedule performance for the entire Aegis BMD element could not be 

conducted, because Cost Performance Reports for the Standard Missile 3 

contract were not issued until September 2004. Our detailed findings are 

presented in appendices II through VIII of this report. 

 22 With the objective of acting as the fire control radar for an ICBM engagement, Aegis BMD 

planned to participate in GMD flight test IFT-14 in February 2005. The test could not be 

fully executed because the GMD interceptor failed to launch. 

23 The EVM system is a management tool widely used by DOD to compare the value of a 

prime contractor’s work performed to the work’s actual cost. The tool measures the 

contractor’s actual progress against its expected progress and enables the government and 

contractor to estimate the program’s remaining cost. 

Assessment of System 

Cost in Fiscal Year 

2004 
Page 23 GAO-05-243 Missile Defense 

Table 6: Prime Contractor Cost and Schedule Performance in Fiscal Year 2004 

Dollars in millions 

BMDS 

element 

Cost 

variance 

Schedule 

variancea

Percent of 

contract 

completed Comments 

ABL ($114.4) ($47.6) N/Ab Variances reflect cumulative prime contractor cost and schedule performance 

for the first half of fiscal year 2004—October 2003 through March 2004. 

Program officials indicated that hardware delivery delays, design problems, 

and integration issues were the primary drivers of the cost variances. After 

this time, the program was restructured and the prime contract rebaselined. 

Program officials directed the contractor to suspend normal contractor 

performance reporting between April and July 2004, during which the 

contractor expended $129 million. During this time, the contractor provided 

forecasts of expenditures to the program. The contractor resumed normal 

cost performance reporting in August 2004. As of September 2004, the 

contractor was performing work under budget but slightly behind schedule. 

As part of the restructuring, the prime contract’s cost increased by $1.5 billion 

and its term extended over 3 years to accomplish the objective of developing 

a prototype aircraft. In total, ABL prime contract costs have increased from 

$1.0 billion at the time of contract award in 1996 to $3.6 billion in 2004. 

Aegis BMD 3.5 (2.0) 43 The Aegis BMD element has two prime contracts: the Aegis Weapon System 

contract, consisting of software and hardware upgrades of existing Navy 

cruisers and destroyers to make them BMD capable; and the Standard 

Missile 3 (SM-3) contract for the development of the element’s missile. Both 

were awarded in the second half of 2003. Variances shown are of the Aegis 

Weapon System contract only, which shows that the contractor completed 

fiscal year 2004 work under budget. The contractor who develops the SM-3 

missile began reporting cost and schedule performance in the last month of 

fiscal year 2004; therefore, this contractor’s cost and schedule performance 

for the year is not reported. 

C2BMCc (3.6) (5.7) 100 (Part 2)

31 (Part 3)

Overall, the prime contractor is under budget. But when considering 

performance in fiscal year 2004 alone, the contractor performed work slightly 

over budget and behind schedule. The declining performance is largely 

attributed to issues pertaining to algorithm development and site integration. 

GMD (219.6) (59.9) 69 Developmental issues with the GMD interceptor—booster and kill vehicle—

remain the leading cause of negative cost and schedule variances. In fiscal 

year 2004, interceptor-related work cost $204 million more than budgeted, of 

which the kill vehicle accounted for 40 percent of the variance. Flight test 

delays also contributed to unfavorable cost and schedule performance. 

KEI 0.04 (1.6) 1 The KEI prime contractor performed work in fiscal year 2004 near its 

budgeted costs. Program officials indicated that the slightly unfavorable 

schedule variance was the result of the contractor delaying activities so that it 

could conduct trade studies on new requirements imposed by MDA. 

Because of plans to restructure the KEI program—to defer the land-based 

capability from Block 2010 to Block 2012—the long-term performance 

measurement baselined

 is no longer relevant. In August 2004, the program 

suspended contractor cost and schedule performance reporting until a 

reliable baseline to reflect the full extent of the program’s restructure became 

available. The contractor is reporting actual costs until program restructure 

efforts are complete. 
Page 24 GAO-05-243 Missile Defense 

Dollars in millions 

BMDS 

element 

Cost 

variance 

Schedule 

variancea

Percent of 

contract 

completed Comments 

STSS (34.6) (20.7)e 29 Prime contract cost and schedule performance eroded throughout fiscal year 

2004. The erosion in cost performance was largely attributed to cost overruns 

by a subcontractor who had a number of quality and systems-engineering 

problems. Delays in software and hardware deliveries were the major causes 

for the unfavorable schedule variance. Despite these issues, the program 

office maintains that the prime contractor is expected to complete the contract 

early and with minimal cost overruns. 

THAAD $0.7 $8.1 61 Overall, the prime contractor is under budget and ahead of schedule. 

However, the contractor’s favorable cost and schedule performance eroded 

somewhat during the second half of fiscal year 2004. The declining 

performance was largely driven by issues in missile development. 

Specifically, two explosions at a subcontractor’s propellant mixing facility 

resulted in the need to find a new vendor. 

Sources: Contractors (data); GAO (analysis). 

Note: Negative variances are shown with parentheses around the dollar amounts. 

a

Schedule variance represents the value of planned work by which the prime contractor is behind 

schedule. 

b

As of March 2004, the program completed 88 percent of the contract under the former contract 

structure. However, because the prime contract was extended over 3 years, this figure is no longer 

accurate. 

c

C2BMC development is being carried out through a contractual vehicle known as an Other 

Transaction Agreement, which functions much like a prime contract. Values reflect the combined 

variances incurred during fiscal year 2004 by parts 2 and 3 of the C2BMC contract. 

d

A performance measurement baseline identifies and defines work tasks, designates and assigns 

organizational responsibilities for each work task, schedules the work tasks in accordance with 

established targets, and allocates budget to the scheduled work. 

e

The contractor implemented a performance measurement baseline that reflects a 6-month 

accelerated schedule. This means the contractor might be performing work on schedule, allowing it to 

complete all the work by the end of the contract, but schedule performance data would show 

otherwise. 

ABL incurred a negative cost variance of $114 million during the first half 

of fiscal year 2004, before the program was restructured to make its cost 

and schedule targets more realistic. This variance stemmed primarily from 

two sources. First, the program encountered unanticipated complexity in 

manufacturing and in integrating advanced optics and laser components 

for the prototype system. Second, the push to rapidly develop the 

prototype aircraft caused the program to limit testing of subcomponents, 

which, in turn, generated rework and modified requirements. To address 

the negative variance for ABL, program officials told us that they 

redirected funds originally earmarked for other program efforts. 

Negative Cost Variances 

Incurred by ABL, GMD, 

and STSS Prime 

Contractors 
Page 25 GAO-05-243 Missile Defense 

GMD incurred a negative cost variance of $220 million. The contractor 

originally underestimated the cost of readying the element for LDO and 

experienced unexpected problems requiring some rework of its kill 

vehicle. Additionally, in response to explosions at a subcontractor’s 

propellant mixing facility, the program incurred cost to transition 

operations to a new vendor. To address its negative cost variance for 

GMD, MDA deferred some work planned for completion in fiscal year 2004 

into fiscal year 2005, and, to cover these increased costs, requested and 

received additional money in its fiscal year 2005 budget. MDA also 

directed other programs within the agency, such as Test and Evaluation, to 

pick up GMD’s portion of the cost of work tasks that benefited both 

programs. Employing established EVM analysis techniques, we estimate 

that the GMD contract—which ends in September 2007—will overrun its 

budget by between $593 million and $950 million at its completion 

assuming no corrective actions are taken. 

The negative STSS cost variance was largely attributed to a subcontractor 

who had a number of quality and systems-engineering problems in 

developing the payload—sensors and supporting subsystems—onboard 

the two STSS demonstration satellites. The program office maintains that 

there is enough management reserve to cover the overrun at the end of the 

contract, assuming that the reserve is not used for other purposes before 

then. 

ABL program officials’ insight of their prime contractor’s cost and 

schedule performance between April and July 2004 was somewhat limited. 

During this time, program officials directed the contractor to suspend 

normal cost performance reporting while they restructured the ABL prime 

contract to make its target cost and schedule more realistic. In lieu of 

providing normal Cost Performance Reports, the contractor provided the 

program office with monthly forecast expenditure plans, detailed work 

activities, and the number of staff needed to complete planned tasks. The 

program office relied on these metrics to determine the program’s status 

and to provide insight into the contractor’s cost and schedule 

performance. In the 5 months since cost reporting resumed, the cost and 

schedule variance has been relatively stable. 

We could not fully assess cost performance for the Aegis BMD program in 

fiscal year 2004. The prime contractor developing the SM-3 missile did not 

generate Cost Performance Reports until September 2004, even though the 

prime contract was awarded in August 2003. Program officials told us that, 

instead, they monitored contractor performance through monthly 

Lack of Cost Performance 

Data for ABL, Aegis BMD, 

and KEI Elements 

Prevented Full Assessment 
Page 26 GAO-05-243 Missile Defense 

management and business meetings where cost performance, milestones, 

and future performance were reviewed. Program officials indicated that 

the delay in issuing Cost Performance Reports stemmed from the late 

establishment of the contract’s performance management baseline. It was 

established 7 months after contract award because of the need for the 

program office to react to funding issues. In addition, the program 

suspended contractor cost and schedule performance reporting until after 

the Aegis BMD program office completed an integrated baseline review24 5 

months later. 

KEI program officials also had reduced insight into its prime contractor’s 

work efforts for a portion of fiscal year 2004. After contract award in 

December 2003, the prime contractor began submitting Cost Performance 

Reports in May 2004. Program officials suspended cost performance 

reporting after August 2004 because of the need to restructure the prime 

contract in response to reduced funding. Program officials told us that the 

contractor will resume reporting in 2005 after a reliable baseline that 

reflects the full extent of the program’s restructure is available. 

A number of factors portend an increasing level of funding risk for the 

ballistic missile defense program in the years ahead. Based on DOD’s 

Future Years Defense Plan for fiscal years 2006-2011, MDA plans to 

request, on average, Research, Development, Test, and Evaluation 

(RDT&E) funding of about $10 billion annually. This funding supports 

continued development, procurement, and sustainment of hardware and 

software that MDA is fielding.25 However, sources outside and within DOD 

are expected to put pressure on MDA’s share of research and development 

dollars. 

 24 An integrated baseline review is the program manager’s review of a contractor’s 

performance measurement baseline. The review is conducted by the program manager and 

the manager’s technical staff. It verifies the technical content of the baseline and ensures 

that contractor personnel understand and have been adequately trained to collect earned 

value management data. The review also verifies the accuracy of the related budget and 

schedules, ensures that risks have been properly identified, assesses the contractor’s ability 

to implement earned value management properly, and determines if the work identified by 

the contractor meets the program’s objective. 

25 Congress authorized DOD’s use of funds appropriated for MDA research, development, 

test, and evaluation for the fielding of ballistic missile defense capabilities. Pub. L. No. 

108-136, section 222; Pub. L. No. 108-375, section 231. 

Funding Risks 

Expected to Increase 

for Ballistic Missile 

Defense Program 
Page 27 GAO-05-243 Missile Defense 

One factor for the increasing pressure is that DOD’s acquisition programs 

such as ballistic missile defense are likely to be competing for a decreasing 

share of the federal budget. These programs are categorized as 

“discretionary spending” as opposed to “mandatory spending,” such as 

Social Security, Medicare, and Medicaid. In fiscal year 2004, discretionary 

spending accounted for about 39 percent of the federal budget. The 

Congressional Budget Office projects that discretionary spending is likely 

to decrease to 36 percent of the federal budget by fiscal year 2009 and to 

32 percent in by fiscal year 2014.26

A second factor is competing demands for funding within DOD. For 

example, although missile defense is seen as a national priority and has 

been funded nearly at requested levels in the past few years, MDA is facing 

budget cuts. Indeed, DOD’s Program Budget Direction of December 2004 

called for MDA to plan for a $5 billion reduction in funding over fiscal 

years 2006-2011. In addition, MDA is receiving about 13 percent of the $70 

billion RDT&E budget in fiscal year 2005 but must continue to compete 

with hundreds of existing and planned technology development and 

acquisition programs for RDT&E funding. Cost growth of existing weapon 

programs puts additional pressure on MDA’s share. We found, for 

example, that RDT&E cost estimates grew $6.7 billion for the Joint Strike 

Fighter in calendar year 2003 and $9.2 billion for the Future Combat 

System in fiscal year 2004. 

The third factor comes from within MDA itself. The agency continues to 

respond to cost growth of ongoing programs to enhance the components 

and elements of the BMDS. As noted above, ABL, GMD, and STSS incurred 

a collective negative cost variance of approximately $370 million in fiscal 

year 2004 and, as we reported last year, MDA elements incurred a 

collective negative cost variance of about $380 million in fiscal year 2003.27

Unless MDA can mitigate these cost variances, significant cost overruns 

could occur on these contracts in the future. Estimating cost and schedule 

targets of new and complex technologies can be difficult and, as 

demonstrated, are often underestimated. Furthermore, hardware made 

available for operational purposes is not being fully tested before being 

 26 Congressional Budget Office, The Budget and Economic Outlook: An Update 

(Washington, D.C.: Sept. 2004). 

27 GAO, Missile Defense: Actions Are Needed to Enhance Testing and Accountability, 

GAO-04-409 (Washington, D.C.: Apr. 23, 2004). 
Page 28 GAO-05-243 Missile Defense 

fielded. If the need arises to correct problems identified in subsequent 

testing, removing and recalling this hardware could prove costly. 

A fourth factor for the increasing pressure on MDA’s RDT&E budget is 

that MDA is starting to field components of the BMDS, whose production, 

operation, and sustainment are also funded by RDT&E dollars. A flat 

RDT&E budget combined with growing fielding costs would result in a 

decrease in investment in research and development—MDA’s primary 

mission. According to program documentation, MDA’s budget for its 

fielding activities between fiscal years 2006 and 2011 includes an average 

of $1.76 billion per year for procuring BMDS assets and an additional $400 

million per year for sustaining the fielded capability. However, the fielding 

costs can be expected to increase in the years to come as more 

components of GMD, Aegis BMD, and THAAD are integrated into the 

BMDS. 

Operations and support (O&S) costs of fielded systems are generally 

significant and can be expected to be substantial for operational 

capabilities of the BMDS. In our 2003 report on total-ownership (life-cycle) 

cost,28 we found that the cost to develop and procure a weapon system 

usually represents about 28 percent of the weapon system’s life-cycle cost; 

O&S costs typically account for the remaining 72 percent of a weapon’s 

systems total life-cycle cost. The only BMDS element thus far with a lifecycle cost estimate, the Army’s Patriot-MEADS missile defense program, 

has comparable life-cycle cost percentages. According to the Army’s 

Lower-Tier Project Office, the Patriot-MEADS development cost accounts 

for 6.4 percent, procurement accounts for 21.2 percent, and O&S costs 

account for 72.4 percent of the total life-cycle cost of $151 billion. 

DOD officials cautioned us that estimating life-cycle costs of missile 

defense capabilities involves considerable uncertainty. For example, O&S 

costs depend on the state of readiness of the fielded system, which is 

difficult to predict. In addition, historical data of component reliability in 

the field and the cost to repair operational missile defense assets are 

essentially nonexistent. Furthermore, life-cycle cost estimates of standard 

DOD weapon systems assume O&S costs apply for long periods of time, on 

the order of 20 years. Components of the BMDS, however, might be in the 

 28 GAO, Best Practices: Setting Requirements Differently Could Reduce Weapon Systems’ 

Total Ownership Costs, GAO-03-57 (Washington, D.C.: Feb. 11, 2003). 
Page 29 GAO-05-243 Missile Defense 

field for shorter durations. Finally, our previous work29 recognized that 

life-cycle cost estimates for revolutionary systems such as the ABL 

program, which utilize new technologies in unproven applications, are 

unknown. When fielded, operation and support efforts for ABL could be 

substantial because ABL will require unique support for its laser and 

beam-control components and ground infrastructure for chemical storage, 

mixing, and handling.30

In assessing the extent MDA achieved its stated goals in fiscal year 2004, 

we observed that MDA’s cost goal for a given block is not consistently 

aligned with that block’s fielding goals. According to MDA policy, for 

example, interceptors identified with the Block 2004 fielding goals and 

fielded during calendar years 2004-2005 should be funded as part of the 

Block 2004 cost goal. As originally designed, the block approach would 

provide MDA with the flexibility to deliver a basic capability initially and 

enhance it during subsequent blocks to respond to the changing threat and 

to insert new technologies for enhanced performance. The block approach 

also would provide for accountability, because MDA would identify for 

decision makers the promised capabilities to be delivered by the end of 

each block for a specified investment of funds. 

In the following instances, however, we found that MDA has not been 

consistently matching a block’s cost and fielding goals thereby obscuring 

the relationship between requested funding and delivered capabilities: 

• Funds accounted for in the Block 2004 cost goal are being used to 

procure 32 Aegis BMD SM-3 missiles. Of these missiles, 11 will be 

delivered in 2004-2005, and the remaining missiles will be delivered 

during 2006-2007. Similarly, funds accounted for in the Block 2006 cost 

goal are being used to procure 40 missiles. Of these missiles, 7 will be 

delivered in 2006-2007, and the remaining delivered during 2008-2009. 

 29 GAO, Uncertainties Remain Concerning the Airborne Laser’s Cost and Military 

Utility, GAO-04-643R (Washington, D.C.: May 17, 2004). 

30 The ABL program manager agrees that operating costs of the ABL element are not well 

defined due to its technical maturity. However, as with the fielding of any new technology, 

the initial operating costs may be substantial. As the support concept matures, the ABL 

program manager expects these costs to decrease and be comparable with other Air Force 

high-value assets. 

MDA Is Not 

Consistently Matching 

Cost and Fielding 

Goals 
Page 30 GAO-05-243 Missile Defense 

• The THAAD program is funding a “fire unit” as part of its Block 2006 

program. Operated by the Army, it will consist of a radar, a battle 

management unit, 3 launchers, 24 missiles, and equipment for support, 

maintenance and training. Even though MDA refers to this fire unit as a 

Block 2006 fielding, it will not be delivered until 2009 (i.e., during Block 

2008).31

In addition, counter to the definition of a block as an integrated set of 

capabilities fielded during the 2-year block window, the Airborne Laser 

program will not field any capabilities during Block 2004 although Block 

2004 funds are used in the program’s development. Rather, the ABL 

program is focused on developing a prototype aircraft for use in a lethality 

demonstration—a flight test in which the ABL aircraft will attempt to 

shoot down a short-range ballistic missile. However, ABL’s funding is 

broken out by block—2004, 2006, and 2008—even though the program is 

developing a single configuration of the element that will not be integrated 

into the BMDS earlier than Block 2008. 

MDA delivered much of what it planned in fiscal year 2004, and DOD is on 

the verge of standing up an initial capability against long-range ballistic 

missiles launched from Northeast Asia. Despite this success, the 

performance of the system remains uncertain and unverified because of 

recurrent test delays and failures. Also, Ground-based Midcourse Defense 

developmental costs continue to increase and the Airborne Laser program 

was restructured when it became clear that much more time and money 

would be needed to develop and demonstrate a prototype aircraft. 

Looking to the future, decision makers in Congress and DOD face billion 

dollar investment decisions in allocating funds both within MDA’s RDT&E 

activities and between MDA and other DOD programs. In exercising their 

funding and oversight responsibilities, these decision makers would 

benefit from a consistent implementation of a block policy for which 

delivered capability is aligned with tax dollars received. 

 31 With the submission of the fiscal year 2006 President’s Budget in February 2005, MDA 

implemented a new BMDS baseline approach for the THAAD program. The agency now 

refers to the fielding of the fire unit as a Block 2006/2008 fielding. 

Conclusion 
Page 31 GAO-05-243 Missile Defense 

To assist decision makers in Congress and DOD in exercising their 

oversight of MDA’s acquisition plans and in evaluating MDA’s budget 

requests, we recommend that the Director, MDA, clarify and modify, as 

needed, its block policy to ensure that a block’s cost and fielding goals are 

consistently aligned. 

DOD’s comments on our draft report are reprinted in appendix I. DOD 

concurred with our recommendation. Acknowledging our observations, 

the Department noted that the policy for ballistic missile defense block 

definitions should provide for consistent accounting of the various 

features of each block. MDA is taking steps to clarify and modify the block 

definitions for that purpose. 

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

Director, MDA. 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. 

If you or your staff have any questions concerning this report, please 

contact me at (202) 512-4841. The major contributors to this report are 

listed in appendix XI. 

Robert E. Levin 

Director 

Acquisition and Sourcing Management 

Recommendation for 

Executive Action 

Agency Comments 

and Our Evaluation 
Page 32 GAO-05-243 Missile Defense 

List of Congressional Committees 

The Honorable John Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Ted Stevens 

Chairman 

The Honorable Daniel K. Inouye 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate 

The Honorable Duncan Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

The Honorable C. W. Bill Young 

Chairman 

The Honorable John P. Murtha 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 
Appendix I: Comments from the Department 

of Defense 

Page 33 GAO-05-243 Missile Defense 

Appendix I: Comments from the Department 

of Defense 
Appendix I: Comments from the Department 

of Defense 

Page 34 GAO-05-243 Missile Defense 
Page 35 GAO-05-243 Missile Defense 
Fiscal Year 2004 Progress Assessment

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

The Aegis BMD program completed work planned for fiscal year 2004 

generally on schedule and is largely on track to upgrade system software and 

expand missile inventory for an enhanced capability by the end of December 

2005 (Block 2004). However, Aegis destroyers upgraded for the long-range 

surveillance and tracking (LRS&T) mission had limited opportunities to be 

exercised in a manner consistent with an actual defensive mission. 

Schedule: In fiscal year 2004 and early 2005, the Aegis BMD program 

completed the upgrade of three Aegis destroyers for the LRS&T mission—all 

are available for operations. In addition, the program delivered five missiles, 

known as the Standard Missile 3 (SM-3), in the first quarter of fiscal year 

2005 for the element’s Block 2004 engagement capability. Because of funding 

constraints and ship availability, missile deliveries and ship upgrades were 

delayed. In particular, the program expects to have available a slightly 

smaller inventory of SM-3 missiles by December 2005 than was originally 

planned. Also, the program expected to upgrade three cruisers by the end of 

Block 2004, but only two will be completed by this time. 

Testing: Aegis BMD flight testing conducted in fiscal year 2004 focused on 

the LRS&T mission, including the element’s connectivity with the BMDS. 

Because there were limited opportunities to track actual targets using the 

fielded version of the LRS&T system, this capability was only partially 

demonstrated prior to the destroyers’ fielding. The Aegis BMD program also 

conducted one successful intercept attempt against a short-range ballistic 

missile target during fiscal year 2004. Finally, design changes to the missile’s 

divert system underwent ground testing and are planned to be tested in flight 

in fiscal year 2005. 

Performance: The Aegis BMD program has demonstrated the capability to 

intercept a non-separating target through its successes in five of six flight 

tests. The root cause of a failure in the missile’s divert system during the one 

unsuccessful attempt is understood, and design changes are expected to be 

tested in flight in fiscal year 2005. Although the program has exercised the 

element’s LRS&T capability in a small number of flight-test events, it has not 

yet used the fielded version of the system software to provide real-time track 

data of a target for use in planning a BMD mission, as it would need to do in 

an actual defensive operation.

Cost: We could not fully assess cost performance for the Aegis BMD 

program in fiscal year 2004 based on an analysis of prime contractor Cost 

Performance Reports. We found that the contractor responsible for 

upgrading existing Aegis ships for the BMD mission completed fiscal year 

2004 work $3.5 million under budget but was unable to complete $2.0 million 

worth of work. However, we were unable to assess cost and schedule 

performance of the prime contractor who develops the SM-3 missile because 

Cost Performance Reports were not available during fiscal year 2004. 

The Aegis Ballistic Missile Defense 

(Aegis BMD) element is designed 

to protect U.S deployed forces, 

friends, and allies from short- and 

medium-range ballistic missile 

attacks. Additionally, its shipboard 

radar can serve as a forwarddeployed sensor for surveillance 

and early tracking of long-range 

ballistic missiles in support of the 

Ground-based Midcourse Defense 

(GMD) mission. To provide these 

capabilities, the Missile Defense 

Agency (MDA) is upgrading 

existing Aegis Navy ships for the 

BMD mission. MDA completed an 

initial surveillance and tracking 

capability in fiscal year 2004 and 

plans to field an initial intercept 

capability in April 2005. 

DOD’s planned investment in the 

Aegis BMD program from program 

inception in 1996 through 2011 is 

approximately $10 billion. DOD 

expended $3.67 billion between 

fiscal years 1996 and 2004, 

Congress appropriated $1.14 billion 

for fiscal year 2005, and MDA is 

budgeting about $5.22 billion 

between fiscal years 2006 and 2011 

for Aegis BMD development, 

procurement, and operations. 

An Element of the Ballistic Missile Defense System

Appendix II Summary 

Aegis Ballistic Missile Defense 
Appendix II: Aegis Ballistic Missile Defense 

Page 37 GAO-05-243 Missile Defense 

The Aegis Ballistic Missile Defense (Aegis BMD) element is a sea-based 

missile defense system being developed to protect deployed U.S. forces, 

allies, and friends from short- and medium-range ballistic missile attacks. 

It will also be used as a forward-deployed Ballistic Missile Defense System 

(BMDS) sensor, employing its shipboard SPY-1 radar, to perform 

surveillance and tracking of long-range ballistic missiles in support of the 

Ground-based Midcourse Defense (GMD) mission. 

The Aegis BMD element builds upon the existing capabilities of Aegisequipped Navy cruisers and destroyers. Planned hardware and software 

upgrades to these ships will enable them to carry out the missile defense 

mission in addition to their current role of protecting U.S. Navy ships from 

air, surface, and subsurface threats. The program is also developing the 

Standard Missile 3 (SM-3)—the system’s interceptor missile, which is 

designed to destroy enemy warheads through hit-to-kill collisions above 

the atmosphere. The SM-3 is comprised of a kill vehicle1

 mounted atop a 

3-stage booster. 

In 1996, the Department of Defense (DOD) initiated the Navy Theater Wide 

program, the predecessor to Aegis BMD. The Navy Theater Wide system 

was to be a ship-based missile defense system capable of destroying shortrange ballistic missiles above the atmosphere. At the time, plans called for 

deploying the first increment of the Navy Theater Wide system in 2010 and 

a final increment with an improved kill vehicle at a later, undefined date. 

The Missile Defense Agency (MDA) currently manages and funds the Aegis 

BMD program, although the U.S. Navy has a role in its development and 

management. Accordingly, the Aegis BMD element is being developed 

under MDA’s acquisition approach, which delivers system capabilities in 

2-year block increments. The first increment of the Aegis BMD element, 

Block 2004, is expected to deliver a limited operational capability in the 

2004-2005 time frame. It provides for surveillance and tracking of longrange ballistic missiles and an intercept capability (engagement role) 

against shorter-range ballistic missiles. The Block 2004 capability is being 

rolled out in three phases: 

 1

 The program office refers to the kill vehicle as the “kinetic warhead.” 

Appendix II: Aegis Ballistic Missile Defense 

Element Description 

History 

Developmental 

Phases 
Appendix II: Aegis Ballistic Missile Defense 

Page 38 GAO-05-243 Missile Defense 

• Initial fielding of the surveillance and tracking capability. By 

October 2004, the program office upgraded three Aegis destroyers with 

the ability to perform the long-range surveillance and tracking (LRS&T) 

function as a BMDS sensor in support of the GMD mission. All three 

destroyers are available for operations. This capability is the element’s 

contribution to MDA’s fielding of Limited Defensive Operations (LDO), 

MDA’s first increment of fielded capability. 

• Initial fielding of an intercept capability. By April 2005, MDA plans 

to have available two cruisers, along with a combined inventory of 

approximately five SM-3 missiles. The cruisers are expected to be 

capable of performing its two BMD missions, LRS&T and the 

engagement of short- and medium-range ballistic missiles. This 

configuration could be deployed operationally if so directed in an 

emergency. 

• Completion of the Block 2004 element. The program expects to 

increase the number of Aegis destroyers capable of providing LRS&T 

from 3 to 10 by the end of December 2005.2

 In addition, the program 

plans to deliver eight SM-3 missiles available to be deployed on 

upgraded cruisers available for the engagement role.3

Future block configurations of the Aegis BMD element build upon the 

Block 2004 capability. In Block 2006, MDA plans to add the capability to 

defeat intermediate-range ballistic missiles with limited countermeasures 

and to increase Aegis BMD’s role as a remote sensor by upgrading radar 

capabilities. The Aegis BMD Block 2008 configuration will incorporate 

upgrades to the SPY-1 radar to improve the radar’s discrimination 

capability and to enhance the element’s command and control component 

so that the element can engage multiple threats simultaneously. Finally, 

the Aegis BMD Block 2010 and 2012 configurations are expected to 

incorporate missile enhancements, improve discrimination capability 

against advanced countermeasures, and improve planning and 

coordination as part of the BMDS. 

 2

 Five additional destroyers will be upgraded during Block 2006, bringing the total number 

of upgraded destroyers to 15, which was MDA’s original Block 2004 goal. 

3

 MDA program goals called for the delivery of nine SM-3 missiles by the end of calendar 

year 2005. 
Appendix II: Aegis Ballistic Missile Defense 

Page 39 GAO-05-243 Missile Defense 

The Aegis BMD program establishes annual element-level goals by 

outlining specific activities the program plans to complete during a given 

fiscal year. In fiscal year 2004, the program focused largely on delivering 

the LRS&T capability for LDO and continuing with activities leading to the 

full Block 2004 capability. These activities can be grouped into three 

categories: fielding, testing, and design reviews. 

• Fielding. The Aegis BMD program planned to install the initial version 

of the operational computer program and make associated hardware 

upgrades on three Aegis destroyers enabling them to perform the 

LRS&T mission. In addition, the program planned to continue its 

activities leading to the initial delivery of SM-3 missiles during fiscal 

year 2005. 

• Testing. The Aegis BMD program office planned to conduct an 

intercept attempt against a short-range ballistic missile—Flight Mission 

6 (FM-6)—and to participate in other events that exercise the system’s 

LRS&T functionality and connectivity with the BMDS. 

• Design reviews. The program planned to conduct design reviews of 

the final Block 2004 Aegis Weapon System software, the final Block 

2004 missile configuration, and the SM-3 missile’s shipboard launch 

system. 

In fiscal year 2004, the Aegis BMD program completed the upgrade of 

three Aegis destroyers4

 for the LRS&T mission. In addition, the program 

was completing the final assembly of the first five SM-3 missiles for the 

Block 2004 engagement capability, which were delivered in early fiscal 

year 2005. The program is largely on track to upgrade software, expand 

missile inventory, and conduct flight tests to deliver an enhanced 

capability for Block 2004 by the end of December 2005. However, funding 

modifications and ship availability delayed final missile deliveries and ship 

upgrades. In particular, although the program expected to field nine SM-3 

missiles by the end of Block 2004, only eight will be delivered by this time. 

Also, the program expected to upgrade three cruisers by the end of Block 

2004, but only two will be completed by this time. Specific progress made 

in fiscal year 2004 relative to fielding, testing, and design is given in the 

narrative below and summarized in tables 7 to 12. 

 4

 The third destroyer was upgraded in October 2004. 

Planned 

Accomplishments for 

Fiscal Year 2004 

Assessment of 

Scheduled Activities 
Appendix II: Aegis Ballistic Missile Defense 

Page 40 GAO-05-243 Missile Defense 

The Aegis BMD program has plans to eventually upgrade 18 Aegisequipped Navy ships (15 destroyers and 3 cruisers) with enhanced 

planning, surveillance, tracking, and engagement functions to make them 

capable of performing the BMD mission. These upgrades will improve the 

capability of the element’s SPY-1 radar to discriminate a missile’s warhead 

from decoys, enable tracking of long-range ballistic missiles as a BMDS 

sensor, plan engagements, and launch SM-3 missiles to engage ballistic 

missiles. To achieve this enhanced functionality, the Aegis BMD program 

office is upgrading the Aegis Weapon System on designated ships through 

a series of software builds and hardware upgrades, referred to as BMD 

3.0E, BMD 3.0, and BMD 3.1. 

Each BMD upgrade will increase the element’s capability. The Aegis BMD 

program has successfully installed BMD 3.0E in three destroyers, which 

enables the ships to carry out long-range surveillance and tracking. 

However, the ships are not yet capable of launching missiles to engage 

ballistic missiles. Rather, the next software build, BMD 3.0, will be needed 

to provide the preliminary engagement capability for Aegis cruisers. It is 

expected to be approved for use in April 2005 and could be deployed 

operationally if so directed in an emergency. The third version of the BMD 

upgrade—BMD 3.1—will eventually enable the destroyers to also launch 

missiles, but because other hardware upgrades are needed, only Aegis 

cruisers will be equipped to do so by the end of Block 2004. BMD 3.1 is the 

last weapon system upgrade planned for the Block 2004 time frame. 

Table 7 summarizes the principal software development and installation 

activities completed in fiscal year 2004. 

Table 7: Status of Aegis BMD Fiscal Year 2004 Planned Accomplishments—Fielding Activities 

Activity Description/Progress assessment 

Complete and deliver long-range 

surveillance and tracking (LRS&T) software 

BMD 3.0E 

The program completed BMD 3.0E development for the initial fielding of the LRS&T 

capability. 

Install LRS&T BMD 3.0E on three Aegis 

destroyers 

The program installed BMD 3.0E on two Aegis destroyers by September 30, 2004, and 

on a third Aegis destroyer in October 2004. 

Begin training Aegis destroyer crews for the 

LRS&T mission 

Crew training was completed on schedule, which included tactical operations and team 

certification, personnel standards, and BMD 3.0E familiarization. 

Sources: MDA (data); GAO (presentation). 

As software builds and hardware upgrades are completed and installed, 

Navy cruisers and destroyers will become available to perform their 

expected missions. Table 8 summarizes the availability of Aegis ships for 

the BMD mission in the Block 2004 time frame. Although MDA program 

Fielding Activities 
Appendix II: Aegis Ballistic Missile Defense 

Page 41 GAO-05-243 Missile Defense 

goals specified that three cruisers would be available by the end of Block 

2004 (December 2005), only two are expected to be upgraded by this time; 

the third is expected to be upgraded in early 2006, depending on ship 

availability. 

Table 8: Aegis Ship Availability for the BMD Mission (Block 2004) 

Ship function 

September 

2004

December

 2004

April 

2005

December

 2005

Destroyers 

Capable of only LRS&T. Engagement capability will be added 

starting in 2006. 

3b5b9 10 c

Cruisersa

Capable of surveillance, tracking, and engagement. 

0122

Total destroyers and cruisers available for BMD mission 3 6 11 12

Source: MDA. 

a

The total number of Aegis cruisers includes one being used as a test ship, which was scheduled to 

begin installation of BMD 3.0 in December 2004. 

b

The third LRS&T ship was completed in October 2004, and the fifth was completed in January 2005. 

c

15 LRS&T “equipment sets” will be available at this time, but installations may not be completed 

owing to the ships’ operational schedules. The remaining five upgrades are planned for the Block 

2006 time frame. 

In fiscal year 2004, the Aegis BMD program office continued to procure 

SM-3 missiles for delivery in the 2004-2005 time frame. In particular, 

11 “Block I” SM-3 missiles are expected to be delivered by the end of 

calendar year 2005, some of which will be used in flight testing. Table 9 

summarizes the status of SM-3 deliveries through December 2005. 

Table 9: SM-3 Missile Deliveries 

Sept. 2004 -

Dec. 2004

Dec. 2004 - 

Apr. 2005 

Apr. 2005 -

Dec. 2005

Total

(Dec. 2005)

 SM-3 deliveries 5 1 5 11

Source: MDA. 

Prior to September 2004, three SM-3 missiles of an earlier configuration 

were delivered and subsequently used in flight missions (intercept 

attempts), FM-4, FM-5, and FM-6. “Block I” SM-3 missiles, which are being 

fielded during 2004-2005, are an operational configuration that evolved 

from this earlier design. Fiscal year 2004 funding modifications impacted 

SM-3 missile integration and delivery; consequently, the Aegis BMD 
Appendix II: Aegis Ballistic Missile Defense 

Page 42 GAO-05-243 Missile Defense 

program expects to have available a slightly smaller inventory of SM-3 

missiles by December 2005 than was originally planned. 

The Aegis BMD program conducts both ground and flight tests to 

demonstrate and validate element performance. Ground tests serve to 

reduce risk and, in some cases, are conducted under conditions that are 

difficult to replicate in flight. Flight tests verify the element’s ability to 

engage ballistic missile targets using actual equipment, computer 

programs, and an operational ship with a Navy crew. 

Ground tests completed during fiscal year 2004 included those focused on 

a subcomponent of the missile’s divert system—the Solid Divert and 

Attitude Control System (SDACS). This subcomponent is a collection of 

solid-fuel thrusters used to steer the kill vehicle into its designated target. 

When an updated SDACS design proved successful in earlier ground tests, 

the program flight-tested it during Flight Mission 5 (FM-5) in June 2003. 

However, during this test, the subassemblies supporting the energetic 

pulse-mode failed, causing the kill vehicle to be less maneuverable and 

miss its target. Program officials stated that the failure likely stemmed 

from a “diverter ball” in the SDACS, which acts as a valve to control pulses 

that allow the missile to maneuver quickly. The exercising of the 

high-energy pulse mode of the SDACS increased internal operating 

pressures, and, under the thermal stress, the protective coating of the 

diverter ball cracked, disabling normal SDACS operation. The root cause 

of this failure has been traced to a material failure under intense 

temperature and pressure. 

In response to this failure, during fiscal year 2004, the program modified 

the SDACS design to improve its switching performance and reliability 

during high-energy pulse operation. A series of ground tests and 

engineering analysis is ongoing to validate the design updates. Following 

completion of ground tests and analysis, future flight tests are planned to 

demonstrate operation of the SDACS using its high-energy pulse mode. 

Since 1999, there have been six intercept attempts using variants of the 

SM-3 missile. In five of the six, the SM-3 successfully intercepted targets. 

In fiscal year 2004, the program conducted one of these successful 

intercept attempts—FM-6.5

 Additionally, the Aegis BMD element 

 5

 The program also conducted FM-7 in February 2005, which resulted in a successful 

intercept of a short-range ballistic missile target. 

Testing Activities 

Ground Testing 

Flight Testing 
Appendix II: Aegis Ballistic Missile Defense 

Page 43 GAO-05-243 Missile Defense 

participated in other non-intercept test events to assess the Aegis 

destroyer’s ability to track targets of opportunity and pass data to the 

BMDS. Because of the technical issues associated with the SDACS 

reliability that arose in FM-5, the program office delayed FM-6 from 

September 2003 to December 2003 and did not exercise the SDACS highenergy pulse mode as originally planned. 

After the FM-6 flight mission in December 2003, Aegis BMD flight testing 

conducted in fiscal year 2004 focused on the LRS&T mission although 

there were limited opportunities to track actual targets using the fielded 

version of the LRS&T software, BMD 3.0E. For example, delays in the 

GMD flight test program prevented Aegis BMD from participating in two 

integrated flight tests, IFT-13C and IFT-14, during fiscal year 2004. In 

addition, the Aegis BMD program participated in Glory Trip 185, during 

which an Aegis destroyer successfully tracked a Minuteman III ICBM 

launched from Vandenberg Air Force Base. However, it exercised an 

earlier version of the LRS&T software, rather than BMD 3.0E, which is 

installed on fielded destroyers. Finally, in Pacific Explorer III, an Aegis 

destroyer planned to track an actual missile and pass track data to the 

BMDS. Although the destroyer tracked the live target missile, a 

malfunction with the target limited the amount of data collected by the 

Aegis destroyer. Specifically, the target ended its flight before Aegis BMD 

could send the GMD element enough information needed for engaging the 

target. 

Although there were limited opportunities to track actual targets, Aegis 

BMD participated in other tests that verified connectivity with the BMDS. 

For example, in Pacific Explorer II, Glory Trip 185, Pacific Explorer III, 

and Pacific Explorer IV (conducted in fiscal year 2005), simulated or real 

ballistic missile target track data was successfully transmitted to the 

BMDS. 

Table 10 summarizes the flight test and LRS&T activities completed in 

fiscal year 2004 by the Aegis BMD program. 
Appendix II: Aegis Ballistic Missile Defense 

Page 44 GAO-05-243 Missile Defense 

Table 10: Aegis BMD Fiscal Year 2004 Planned Accomplishments—Flight Test and LRS&T Activities 

Activity Description/Progress assessment 

Flight Mission 6 (FM-6) 

Occurred: Dec. 2003 

An SM-3 missile successfully intercepted a short range ballistic missile (SRBM) target 

(SDACS used in sustain-mode only). 

Participate in GMD integrated flight tests 

as a surveillance and tracking sensor 

Planned: Throughout FY2004 

GMD flight tests were deferred until fiscal year 2005. IFT-13C was conducted in 

December 2004 and would have offered Aegis BMD the opportunity to exercise its LRS&T 

role. However, because of rough seas caused by severe weather that exceeded safety 

limits, the element did not participate. IFT-14 was conducted in February 2005, but this 

test failed to execute fully because the interceptor did not launch from its silo. 

Pacific Explorer II 

Occurred: Mar. 2004 

An Aegis destroyer in the Sea of Japan and an Aegis destroyer in Hawaii established full 

satellite communication connectivity with the BMDS across the Pacific Ocean to multiple 

land-based participants in Hawaii and the Continental United States. Although no actual 

target was launched, the ship successfully passed track data of a simulated target to 

exercise system connectivity. 

Glory Trip 185 

Occurred: June 2004 

Aegis BMD successfully exercised its role as a forward-deployed sensor. During this test, 

an Aegis destroyer detected and tracked a Minuteman III ICBM launched from 

Vandenberg Air Force Base and provided track and covariance data to GMD. However, 

the test did not exercise Aegis BMD tracking and connectivity in a manner consistent with 

an actual defensive mission; that is, as an integral part of the system during which the 

destroyer acts as a fire control radar. In addition, the Aegis destroyer was not upgraded 

with the newer, LDO version of the long-range surveillance and tracking software. 

Pacific Explorer III 

Occurred: July 2004 

This event provided exposure and training to the crew of an Aegis BMD destroyer. 

Although the destroyer tracked the live target missile, a malfunction with the target limited 

the amount of data collected by the Aegis destroyer—the target’s flight was terminated 

early. 

Sources: MDA (data); GAO (presentation). 

In fiscal year 2005, the program office scheduled three more Block 2004 

flight tests, all of which are planned as intercept attempts. These tests aim 

to progressively demonstrate the element’s capability against short- and 

medium-range unitary and separating targets, as well as demonstrate that 

Aegis BMD can support the BMDS as a forward-deployed sensor. FM-7 

was the first flight test to use BMD 3.0 and the Block I SM-3 missile, which 

is the configuration of the first set of SM-3 missiles that will be made 

available for fielding. Table 11 provides a summary of the Block 2004 flight 

tests the program expects to conduct through fiscal year 2005. 
Appendix II: Aegis Ballistic Missile Defense 

Page 45 GAO-05-243 Missile Defense 

Table 11: Planned Aegis BMD Fiscal Year 2005 Accomplishments—Remaining Block 2004 Flight Tests 

Activity Description 

FTM 04-1 (FM-7) 

Date: Feb 24, 2005 

FM-7 was successfully conducted. An SM-3 missile intercepted an SRBM target 

(SDACS used in sustain-mode only). 

FTM 04-2 (FM-8) 

Date: 3Q FY2005a

FM-8 is an intercept attempt against a separating, medium-range ballistic missile 

(MRBM) target. The target will fly a trajectory more distant from the Aegis cruiser than in 

previous tests. Pending the results of ground testing, the SDACS will be tested in highenergy pulse mode. 

FTM 04-3 (FM-9) 

Date: 4Q FY2005 

FM-9 is an intercept attempt against a separating, MRBM target. The target will include 

additional decoys and clutter. The SDACS could be tested in high-energy pulse mode. 

Sources: MDA (data); GAO (presentation). 

a

We use the notation “3Q FY2005” to mean the third quarter of fiscal year 2005 and an identical 

format for other time periods. 

The Aegis BMD program scheduled four component-level design reviews 

in fiscal year 2004 to evaluate the design maturity of the Aegis Weapon 

System software, launch system, and upgraded SM-3 missile, known as 

“Block IA.” The program successfully completed three of these design 

reviews but delayed the fourth until early 2005. Table 12 summarizes the 

principal activities related to each review. 

Table 12: Aegis BMD Fiscal Year 2004 Planned Accomplishments—Design Reviews 

Activity Description/Progress assessment 

Aegis BMD 3.1 

System Design Disclosure 

Completed Jan. 2004 

The system design disclosure for the final version of Block 2004 software, BMD 3.1, was 

successfully completed. This review evaluated the performance of BMD 3.1 for the 

LRS&T mission as well as engagement scenarios with both sustain-mode and pulsemode SDACS. 

Vertical Launch System Phase I 

Critical Design Review 

Completed Feb. 2004 

The critical design review of the vertical launch system phase I was successfully 

completed. The review examined the expected performance of the Vertical Launch 

System associated with BMD 3.0. 

Vertical Launch System Phase II 

Preliminary Design Review 

Completed June 2004 

The preliminary design review of the vertical launch system phase II was successfully 

completed. This review presented requirements (design specifications) and early 

designs for the Vertical Launch System associated with BMD 3.1. 

SM-3 Block IA 

Critical Design Review 

Completed Oct. 2004 

The initial critical design review of the SM-3 Block IA—the upgraded configuration of the 

Block I missile—was successfully completed and gave the program permission to begin 

missile assembly and testing. This review examined the maturity of the design and 

expected performance of the Block IA SM-3 missile configuration. A “close out” critical 

design review is planned to be conducted in April 2005. 

Sources: MDA (data); GAO (presentation). 

Design Reviews 
Appendix II: Aegis Ballistic Missile Defense 

Page 46 GAO-05-243 Missile Defense 

We identified areas for which the Aegis BMD program has not fully 

demonstrated element performance and reliability. First, the program has 

demonstrated its intercept capability under limited conditions; second, the 

program has not successfully demonstrated, in a flight test, SDACS 

operation using its high-energy pulse mode; and third, the program has 

only exercised the element’s LRS&T capability in a small number of flighttest events. 

The Aegis BMD program demonstrated the capability to intercept a nonseparating target through its successes in FM-2, FM-3, FM-4, FM-6, and 

FM-7. Although these tests were scripted, they are noteworthy, given the 

difficulty of “hit-to-kill” intercepts. Officials with the office of Director, 

Operational Test and Evaluation (DOT&E), pointed out that the Aegis 

BMD program has conducted the most operationally realistic testing of all 

BMDS elements, especially because they utilize an operational U.S. Navy 

cruiser. They recognize, however, that the targets in FM-2 and FM-3 flew 

trajectories that facilitated radar detection and tracking. More realistic 

engagement scenarios will be tested in Block 2006, for example, tests with 

multiple simultaneous engagements. 

As we reported last year,6

 the Aegis BMD program faced challenges with 

ensuring the reliability of SDACS operation; the issue continues to be 

relevant. The root causes of the SDACS failure in FM-5 are understood and 

the program is implementing four design changes to correct the problem. 

After completing ground tests to verify these changes, the program plans 

to flight test the modified multi-pulse SDACS no earlier than FM-8, 

scheduled for the third quarter of fiscal year 2005. Even if the design 

changes prove to resolve the SDACS issue, program officials do not expect 

to implement any design changes in the first 11 Block 2004 missiles being 

delivered. Program officials believe that these missiles provide a credible 

defense against a large population of the threat even with reduced divert 

capability. 

The program has exercised the element’s LRS&T capability in a limited 

number of flight-test events, as noted above. Nonetheless, the Aegis BMD 

program predicts that the Aegis SPY-1 radar is able to deliver adequate 

performance in support of the BMD mission, and DOT&E officials believe 

that Aegis BMD can adequately perform its detection and tracking 

 6

 GAO, Missile Defense: Actions Are Needed to Enhance Testing and Accountability, 

GAO-04-409 (Washington, D.C.: Apr. 23, 2004). 

Assessment of 

Element Performance 
Appendix II: Aegis Ballistic Missile Defense 

Page 47 GAO-05-243 Missile Defense 

functions. Although the Aegis destroyers have been upgraded for the 

LRS&T capability, they have not been exercised in a manner consistent 

with an actual defensive mission. That is, the Aegis BMD element has not 

provided track data of a target, in real time, to plan a BMD mission and 

launch GMD interceptors. 

DOD’s planned investment in the Aegis BMD program from program 

inception in 1996 through 2011 is approximately $10 billion. As broken out 

in table 13, DOD expended $3.67 billion between fiscal years 1996 and 

2004,7

 Congress appropriated $1.14 billion for fiscal year 2005, and MDA is 

budgeting about $5.22 billion between fiscal years 2006 and 2011 for Aegis 

BMD development, procurement, and operations. Budgeted activities in 

the “cooperative work” column include SM-3 component development 

between the United States and Japan. 

Table 13: Aegis BMD Cost 

Dollars in millions of then-year dollars 

 Other Block 2004 Block 2006 Block 2008 Block 2010 Cooperative work Total

FY 1996a – FY 2003 $2,985 $0 $0 $0 $0 $0 $2,985

FY 2004 (Actuals) 0 606 24 0 0 51.8 682

FY 2005 (Appropriated) 0 943 122 0 0 71.3 1,136

FY 2006 0 101 575 135 0 24.8 836

FY 2007 0 15 547 354 0 52.8 969

FY 2008 0 0 69 637 20 112.5 838

FY 2009 0 0 15 546 185 131.5 878

FY 2010 0 0 0 205 576 129.5 911

FY 2011 0 0 0 44 644 100.0 788

FY 1996 – FY 2011 $2,985 $1,665 $1,352 $1,921 $1,425 $674 $10,022

Source: MDA. 

Notes: Aegis BMD budget as of February 2005. Numbers may not add due to rounding. 

a

Program inception (FY 1996). 

In the second half of 2003, two new prime contracts for the Aegis BMD 

element were awarded, one for the Aegis Weapon System and one for the 

 7

 Includes funds expended to develop the Navy Theater Wide system. 

Assessment of 

Element Cost 

Contract Activities 
Appendix II: Aegis Ballistic Missile Defense 

Page 48 GAO-05-243 Missile Defense 

SM-3 missile. Aegis Weapon System efforts, previously part of five Navy 

contracts, were merged into one contract, which was awarded to 

Lockheed Martin in October 2003. This contract covers Block 2004 

activities, including upgrades to BMD software, upgrades to the SM-3 

missile launch system, and planning activities for future blocks. The two 

previous Navy SM-3 contracts were merged into a new contract, which 

was awarded to Raytheon in August 2003. It covers development and 

delivery of SM-3 missiles and related engineering efforts. 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate a prime contractor’s cost and schedule 

performance. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are generally associated 

with the accomplishment of activities under cost or ahead of schedule, 

while negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. 

We used the Cost Performance Reports to evaluate the cost and schedule 

performance of the Aegis Weapon System prime contractor but had 

insufficient data to assess the performance of the SM-3 contractor. Our 

analysis of the Aegis Weapon System found that the prime contractor 

performed at or near budgeted cost and schedule during fiscal year 2004. 

Specifically, since contract inception in October 2003 through September 

2004, the prime contractor was $3.5 million under budget. However, it was 

unable to complete $2 million of work because of fluctuations in ship and 

testing schedules (see fig. 3). 

Prime Contractor Cost and 

Schedule Performance 
Appendix II: Aegis Ballistic Missile Defense 

Page 49 GAO-05-243 Missile Defense 

Figure 3: Aegis BMD Fiscal Year 2004 Cost and Schedule Performance 

The Defense Contract Management Agency is concerned with the delay 

that occurred in the implementation of the SM-3 contract’s performance 

measurement baseline,8

 which reflects the schedule and budget for all 

work tasks that must be performed to meet contract objectives. Although 

the contract was awarded to the prime contractor, Raytheon, in August 

2003, the contract’s baseline was not reviewed at an Integrated Baseline 

Review (IBR)9

 until almost a year after contract award. Program officials 

indicated that the delay stemmed from the late establishment of the 

 8

 A performance measurement baseline identifies and defines work tasks, designates and 

assigns organizational responsibilities for each task, schedules the work tasks in 

accordance with established targets, and allocates budget to the scheduled work. 

9

 An integrated baseline review is the program manager’s review of a contractor’s 

performance measurement baseline. The review is conducted by the program manager and 

the manager’s technical staff. It verifies the technical content of the baseline and ensures 

that contractor personnel understand and have been adequately trained to collect earned 

value management data. The review also verifies the accuracy of the related budget and 

schedules, ensures that risks have been properly identified, assesses the contractor’s ability 

to implement earned value management properly, and determines if the work identified by 

the contractor meets the program’s objectives. 

Dollars in millions

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

 2004

Sources: Contractor (data); GAO (analysis).

Cumulative cost variance

Cumulative schedule variance

Jan. Feb. Mar. Apr. May June July Aug. Sept.
Appendix II: Aegis Ballistic Missile Defense 

Page 50 GAO-05-243 Missile Defense 

contract’s performance management baseline, which was established 7 

months after contract award because of the need for the program office to 

react to funding issues. Raytheon was allowed to postpone issuing Cost 

Performance Reports until after the Aegis BMD program office held an 

IBR 5 months after establishment of the baseline. 

Until the completion of the Raytheon IBR, program officials monitored 

contractor performance through monthly management and business 

meetings where cost and performance data, milestones, and projections of 

future performance were reviewed. The program office stated that these 

monthly meetings provided sufficient data to monitor contractor 

performance. Nonetheless, without these reports, it is difficult for the 

program office (and other independent agencies) to monitor cost and 

schedule performance of the contract’s various components and, 

therefore, to identify areas in need of corrective action. Additionally, 

although we are aware of past problems with SDACS performance on the 

SM-3 contract, we did not have any data to evaluate its impact on the 

contract’s cost and schedule. 
Page 51 GAO-05-243 Missile Defense 
Fiscal Year 2004 Progress Assessment

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

During fiscal year 2004, MDA restructured the ABL program to focus on nearterm milestones and to improve confidence in longer-term schedule and cost 

projections. The restructuring placed the near-term focus on two events: (1) 

the combined operation of individual laser modules to generate a single laser 

beam, known as “First Light,” and (2) a flight test of the prototype aircraft with 

an installed laser beam control system, known as “First Flight.” In light of the 

program’s restructure, ABL completed most of its planned fiscal year 2004 

activities on schedule. However, total contract costs through calendar year 

2008 increased by approximately $1.5 billion, and the program’s schedule was 

extended over 3 years. 

Schedule: The program completed on schedule most of its fiscal year 2004 

activities associated with the preparation for “First Light” and “First Flight.” 

However, as a result of the recent program restructuring, the demonstration to 

shoot down a short-range ballistic missile—the focus of the program—was 

delayed from 2005 and is now scheduled to occur no earlier than 2008. 

 

Testing: Both “First Light” and “First Flight” were achieved in early fiscal 

year 2005. Although the achievement of “First Light” is a key milestone for the 

program, it was not intended as an operational demonstration of a high-power 

laser, that is, at full power and for the length of time needed to shoot down a 

boosting missile. Rather, the laser’s operation for a fraction of a second 

demonstrates successful integration of subsystems. “First Flight” is also a key 

milestone for the program. It is the first of a series of flights to demonstrate 

the completion of design, safety, and verification activities that are necessary 

to assure flight worthiness of the aircraft with the laser beam control system 

installed. 

Performance: At this stage of ABL development—before the laser has been 

operated at full power or critical technologies have been demonstrated in 

flight tests—any assessment of effectiveness is questionable. Nonetheless, the 

program office monitors performance indicators to assess the element’s 

readiness for successfully completing the lethality demonstration. One 

indicator in particular—atmospheric compensation, the process whereby a 

system of deformable mirrors and electronics is used to minimize the 

degradation of the laser beam as it travels through the atmosphere—is not 

meeting its performance objectives. Program officials told us that a recovery 

plan for this indicator is in place. 

Cost: ABL program costs continue to grow. During the first half of fiscal year 

2004, prior to the restructuring of the program, the ABL prime contractor 

incurred a negative cost variance of $114 million and could not complete 

$47 million of planned work. MDA’s restructuring of the ABL program 

increased program cost by about $1.5 billion—the prime contract is currently 

valued at approximately $3.6 billion, more than three times its original value 

of $1.02 billion—although overall program objectives did not change. 

The Airborne Laser (ABL) is being 

developed to shoot down enemy 

missiles during the boost phase of 

flight. Integrated onboard a Boeing 

747 aircraft, ABL is designed to use a 

high-energy chemical laser to 

rupture the enemy missile’s fuel or 

oxidizer tanks, causing the missile to 

lose thrust or flight control. As part 

of its development effort, the Missile 

Defense Agency (MDA) plans to 

demonstrate the feasibility of using 

the prototype ABL aircraft to shoot 

down a short-range ballistic missile. 

This event is referred to as the lethal 

demonstration.

DOD’s planned investment in the 

ABL program from program 

inception in 1996 through 2011 is 

about $7.3 billion. DOD expended 

$2.52 billion between fiscal years 

1996 and 2004, Congress 

appropriated $458 million for fiscal 

year 2005, and MDA is budgeting 

about $4.32 billion between fiscal 

years 2006 and 2011 for ABL 

research and development. 

An Element of the Ballistic Missile Defense System

Appendix III Summary 

Airborne Laser 
Appendix III: Airborne Laser 

Page 53 GAO-05-243 Missile Defense 

The Airborne Laser (ABL) is a missile defense system designed to shoot 

down enemy missiles during the boost phase of flight, the period after 

launch during which the missile’s rocket motors are thrusting. By engaging 

ballistic missiles during the boost phase, ABL destroys enemy missiles 

early in their trajectory before warheads and countermeasures can be 

released. ABL plans to use a high-energy chemical laser to defeat enemy 

missiles by rupturing a missile’s fuel or oxidizer tanks, causing the missile 

to lose thrust or flight control. ABL’s objective is to prevent the delivery of 

the missile’s warhead to its intended target. 

ABL was initially conceived as a theater system to defeat short- and 

medium-range ballistic missiles. However, its role has been expanded to 

include the full range of ballistic missile threats, including intercontinental 

ballistic missiles (ICBM).1

 In addition, ABL could be used as a forwarddeployed Ballistic Missile Defense System (BMDS) sensor to provide 

launch point, impact point, and trajectory data of enemy missiles in 

support of engagements by other system elements. 

The ABL element consists of the following three major components 

integrated onboard a highly modified Boeing 747 aircraft. In addition, the 

element includes ground support infrastructure for storing, mixing, and 

handling the chemicals used in the laser. 

• High-energy chemical oxygen-iodine laser (COIL). The laser, which 

generates energy through chemical reactions, consists of six laser modules 

linked together to produce megawatt levels of power. Because the laser 

beam travels at the speed of light, ABL is expected to destroy missiles 

quickly, giving it a significant advantage over conventional boost-phase 

interceptors. 

• Beam control/fire control (BC/FC). The BC/FC component’s primary 

mission is to maintain the beam’s quality as it travels through the aircraft 

and atmosphere. Through tracking and stabilization, the BC/FC ensures 

that the laser’s energy is focused on a targeted spot of the enemy missile. 

• Battle management/command and control (BMC2). The BMC2 

component plans and executes the element’s defensive engagements. It is 

being designed to work autonomously using its own sensors for launch 

 1

 The terms “intercontinental ballistic missile” and “long-range ballistic missile” are used 

interchangeably. 

Appendix III: Airborne Laser 

Element Description 
Appendix III: Airborne Laser 

Page 54 GAO-05-243 Missile Defense 

detection, but it could also receive early warning data from other external 

sensors. 

In 1996, the Air Force initiated the ABL program to develop a defensive 

system that could destroy enemy missiles from a distance of several 

hundred kilometers. Developmental testing of the first prototype aircraft 

was originally planned to conclude in 2002 with an attempt to shoot down 

a short-range ballistic missile target. 

In 2002, management authority and funding responsibility transferred from 

the Air Force to the Missile Defense Agency (MDA). In accordance with 

MDA planning, the ABL program restructured its acquisition strategy to 

conform to an evolutionary, capabilities-based approach. 

The ABL program is focused on developing a prototype aircraft for use in a 

lethality demonstration—a flight test in which the ABL aircraft will 

attempt to shoot down a short-range ballistic missile. If this test is 

successful, MDA believes it will prove out the concept of using directed 

energy for missile defense. Although ABL’s funding is broken out by 

block—2004, 2006, 2008, and 2010—the program is developing a single 

configuration of the element leading to the lethality demonstration, which 

will occur no earlier than 2008. A specific date for the demonstration has 

not been scheduled and depends on the success of ground testing. 

Furthermore, there is uncertainty as to when ABL will provide an initial 

operational capability. MDA plans to provide this capability through the 

development of a second aircraft, but the purchase of this aircraft is 

contingent upon the successful test of the prototype aircraft. 

In January 2004, MDA restructured the ABL program to focus on near-term 

milestones and to improve confidence in longer-term schedule and cost 

projections. The near-term focus of the program was shifted toward two 

events: (1) the achievement of a key laser demonstration known as “First 

Light”—the first demonstration of the integration of six individual laser 

modules to produce a single beam of laser energy—and (2) the initial flight 

test of the prototype aircraft with the BC/FC installed, which is referred to 

History 

Developmental 

Phases 
Appendix III: Airborne Laser 

Page 55 GAO-05-243 Missile Defense 

as “First Flight.”2 Key provisions of the restructure call for the program 

office to complete the following activities during the next few years: 

• Ground test and flight test the BC/FC segment independent of highenergy laser testing activities. BC/FC testing would utilize a low-power, 

substitute laser in place of the high-energy laser, as needed. 

• Ground test the high-energy laser independent of BC/FC testing 

activities. 

• Integrate and ground test the complete ABL weapon system (i.e., 

combined laser, BC/FC, and battle management segments). 

• Flight test the ABL weapon system, culminating in a lethality 

demonstration against a boosting missile. 

The lethal demonstration has been delayed by about 6 years. This event 

was originally scheduled to occur in 2002 and, as we reported last year,3

was later rescheduled to be conducted in early 2005. However, as a result 

of the January 2004 restructuring of the program, the event is now 

scheduled to occur no earlier than 2008. 

In its report accompanying the 2005 Defense Authorization Act, the House 

Armed Services Committee noted its approval of the restructured 

program. However, the Committee also recognized that the future of the 

ABL program depended upon successful completion of “First Light” and 

“First Flight.” The Committee stated that these milestones must be 

completed in order for the Committee to further support the program after 

fiscal year 2005. 

 2

 “First Flight” was planned as a “passive” flight test, that is, without the use of the Track 

Illuminator Laser (TILL) and the Beacon Illuminator Laser (BILL). The TILL and BILL are 

part of the laser-beam control system used to focus the laser beam on the target and to 

mitigate the effects of the atmosphere on beam quality. 

3

 GAO, Missile Defense: Actions Are Needed to Enhance Testing and Accountability, 

GAO-04-409 (Washington, D.C.: Apr. 23, 2004). 
Appendix III: Airborne Laser 

Page 56 GAO-05-243 Missile Defense 

The program planned to complete several activities during fiscal year 2004 

commensurate with the program’s restructuring. As noted above, the 

program shifted its near-term focus toward key demonstrations within the 

BC/FC and laser segments. The following activities were identified as the 

key milestones for the fiscal year. 

• BC/FC Segment. Complete ground integration and testing of the 

BC/FC segment and begin integration of beam control segment into the 

ABL prototype aircraft in preparation for “First Flight.” 

• Laser Segment. Complete integration of the six laser modules in the 

System Integration Laboratory (SIL)—a ground-test facility located at 

Edwards Air Force Base, California—in preparation for “First Light.” 

In fiscal year 2004, the program completed most of its planned activities 

on schedule. Tables 14 and 15 summarize the progress made toward 

completing BC/FC and laser activities in fiscal year 2004. 

Table 14: Status of ABL Fiscal Year 2004 Planned Accomplishments—BC/FC Segment 

Activity Description/Progress assessment 

Complete ground integration and testing of 

the BC/FC 

In September 2004, the program completed this activity, which is comprised of a BC/FC 

ground test and a test of the aircraft’s flight turret. These tests were conducted in an effort 

to demonstrate the functionality of the full-up BC/FC and turret segments with flight 

hardware. 

Begin integration of BC/FC segment into 

the ABL aircraft 

In October 2004, the last major BC/FC component—the flight turret—was installed on the 

aircraft at Edwards Air Force Base in preparation for “First Flight.” 

Aircraft Readiness for Flight In November 2004, the program verified the air-worthiness of the ABL with the BC/FC and 

BMC4I components installed. 

Conduct “First Flight” “First Flight” was conducted in December 2004, the first of 22 planned flight tests with the 

BC/FC segment. The flight test was originally planned for 2-1⁄2 hours but was terminated 

early due to erroneous instrument readings. These readings were corrected and a full 

duration flight was achieved the following week. One of its objectives was to demonstrate 

that all necessary design, safety, and verification activities to assure flight worthiness had 

been completed. “First Flight” also began the process of expanding the aircraft flight 

envelope—types and combinations of flight conditions—in which the ABL can operate. 

Finally, “First Flight” was designed to measure the environment of the BC/FC system 

while the aircraft is in flight. 

Sources: MDA (data); GAO (presentation). 

Fiscal Year 2004 

Planned 

Accomplishments 

Assessment of 

Scheduled Activities 
Appendix III: Airborne Laser 

Page 57 GAO-05-243 Missile Defense 

Table 15: Status of ABL Fiscal Year 2004 Planned Accomplishments—Laser Segment 

Activity Description/Progress assessment 

Complete integration of the 6 laser 

modules in the SIL 

The integration of individual modules in preparation for “First Light” was completed 

successfully. The completion of this activity enabled testing of the six integrated modules 

in the ground-test facility. 

Achieve “First Light” in the SIL “First Light” was successfully conducted in fiscal year 2005 (November 2004). 

“First Light” refers to the ABL ground-test event during which individual laser modules are 

successfully integrated and operated to generate a single laser beam. 

Continue large optics fabrication and 

optical coating efforts 

Efforts to complete studies of technologies are ongoing. 

Long-lead optics production is ongoing and improvements to the production process are 

being studied. 

Continue jitter reduction and illuminator 

improvement 

Efforts to upgrade hardware to reduce jitter—vibrations onboard the ABL aircraft that 

degrades the focus of the high-energy laser beam—are still ongoing. 

Use of advanced cooling methods to improve the power, efficiency, beam quality, and 

start-up time of the illuminator laser are also still ongoing. 

Sources: MDA (data); GAO (presentation). 

The demonstration of “First Light”—to prove that individual laser modules 

can be successfully integrated and operated to generate a single laser 

beam—was achieved on November 10, 2004, at the SIL ground facility. In 

general, “First Light” is an important milestone for any laser system 

because it demonstrates the ability to get all major laser subsystems to 

work together. 

Although the achievement of “First Light” is a key milestone for the 

program, it was not intended as an operational demonstration of a highpower laser, that is, at full power and for the length of time needed to 

shoot down a boosting missile. Rather, the laser’s operation for a fraction 

of a second demonstrates successful integration of subsystems. “First 

Light” demonstrated that the six modules are aligned optically and the 

flow system is functioning, but program officials noted that the operation 

of the laser was too short to make meaningful predictions of power and 

beam quality.4

 The program plans to conduct a series of tests that will 

gradually increase the length and power of the laser operation until full 

power lasing objectives are achieved. 

 4

 The quality of a laser beam is measured by attributes such as beam width, coherency, and 

sustained power. 

Demonstration of “First 

Light” 
Appendix III: Airborne Laser 

Page 58 GAO-05-243 Missile Defense 

The achievement of “First Flight”—the first of 22 planned tests—is also a 

key milestone for the program. This flight test was conducted on 

December 3, 2004, and served as the functional check of the aircraft with 

its newly installed laser beam control system. This event is critical 

because: 

• It demonstrates that all necessary design, safety, and verification 

activities to assure flight worthiness have been completed. 

• It begins the process of expanding the aircraft flight envelope—types 

and combinations of flight conditions—in which the ABL can operate. 

• It offers the program the opportunity to collect data on the effects of 

the environment on the BC/FC system while the aircraft is in flight. The 

data gathered during this test will be used to address jitter issues. 

Although “First Flight” was conducted, the program was unable to achieve 

all of its intended test objectives. The test was originally planned for 2-1⁄2 

hours but was terminated early due to some erroneous instrumentation 

readings. Program officials made several attempts to resolve the readings 

in flight but were unsuccessful and the aircraft was landed early. However, 

the instrumentation anomalies were all fixed and the program conducted a 

second flight test on December 9, 2004, which lasted the intended duration 

of 2-1⁄2 hours. The primary objective of the second test was the same as 

that for “First Flight”—to perform all necessary in-flight functional checks 

to ensure flight worthiness of the aircraft. The flight test was completed 

and all remaining test points not completed during “First Flight” were 

completed successfully. 

The program office monitors performance indicators to determine the 

program’s readiness for successfully completing the lethality 

demonstration in 2008. Based on its assessment, 11 of 15 of these 

indicators point to some risk in achieving this goal. For example, one 

indicator—atmospheric compensation5

—is not meeting its performance 

objectives. Program officials identified a shortfall in the bandwidth of the 

adaptive optics control system—the system of deformable mirrors and 

electronics that focus the laser beam on the target—as the primary cause 

 5

 Atmospheric compensation is the process whereby the high-energy laser beam uses a 

system of deformable mirrors to minimize the degradation of the laser caused by 

distortions in the atmosphere. 

Demonstration of “First 

Flight” 

Assessment of 

Element Performance 
Appendix III: Airborne Laser 

Page 59 GAO-05-243 Missile Defense 

of this deficiency. Program officials told us that a recovery plan for this 

indicator is already in place and that the contractor is in the process of 

fixing the shortfall. 

Another important indicator pertaining to the technology of controlling 

and stabilizing the high-energy laser beam so that vibration unique to the 

aircraft does not degrade aimpoint—a phenomenon referred to as 

“jitter”—was identified as a risk item by the program office early on and 

continues to be a program risk. Jitter control is crucial to the operation of 

the laser because the laser beam must be stable enough to impart 

sufficient energy on a fixed spot of the missile target to rupture its fuel or 

oxidizer tank. Because jitter is among the least mature of ABL’s critical 

technologies, the program office is conducting ground tests and, in the 

future, flight tests to learn more about jitter control. 

DOD’s planned investment in the ABL program from program inception in 

1996 through 2011 is approximately $7.3 billion. As broken out in table 16, 

DOD expended $2.52 billion between fiscal years 1996 and 2004, Congress 

appropriated $458 million for fiscal year 2005, and MDA is budgeting about 

$4.32 billion between fiscal years 2006 and 2011 for ABL research and 

development. 

Table 16: ABL Cost 

Dollars in millions of then-year dollars 

 Other Block 2004 Block 2006 Block 2008 Block 2010 Total

FY 1996a – FY 2003 $2,058 $0 $0 $0 $0 $2,058

FY 2004 (Actuals) 0 459 0 0 0 459

FY 2005 (Appropriated) 0 458 0 0 0 458

FY 2006 0 0 465 0 0 465

FY 2007 0 0 630 0 0 630

FY 2008 0 0 0 601 0 601

FY 2009 0 0 0 669 0 669

FY 2010 0 0 0 0 792 792

FY 2011 0 0 0 0 1,163 1,163

FY 1996 – FY 2011 $2,058 $917 $1,095 $1,270 $1,955 $7,295

Source: MDA. 

Note: ABL budget as of February 2005. 

a

Program inception (FY 1996). 

Assessment of 

Element Cost 
Appendix III: Airborne Laser 

Page 60 GAO-05-243 Missile Defense 

ABL was funded as an Air Force program from 1996 through 2001 and 

during that time a little over $1 billion was spent. After the program was 

transferred to MDA in fiscal year 2002, MDA expended approximately $1 

billion in fiscal years 2002 and 2003 on ABL development. 

The cost of the ABL program continues to grow. In May 2004, we reported 

that the prime contractor’s costs for developing ABL had nearly doubled 

from the Air Force’s original estimate.6

 In addition, the program incurred 

cost overruns. In fiscal year 2003 alone, the contractor overran its budget 

by $242 million, which resulted primarily from integration and testing 

issues. 

The program office recognized that the contractor’s unfavorable cost and 

schedule performance would eventually cause the contract to reach its 

ceiling price by May 2004. Consequently, MDA considered three 

alternatives to the contract: (1) continue to work toward the planned 

schedule, (2) develop a new schedule that scaled back planned activities, 

or (3) discontinue the contract. Agency officials decided to continue with 

the existing contract and refocus the program on near-term technical 

progress. In an effort to continue with the current contract, program 

officials reevaluated the program schedule and extended the contract 

period of performance, established a new estimate to complete the 

contract, and increased the contract cost ceiling by about $1.5 billion. 

Prior to the recent program restructure, the Block 2004 prime contract 

was valued at approximately $2.1 billion and was scheduled to end six 

months after the lethality demonstration in June 2005. However, as a result 

of the recent program changes, the lethality demonstration is now 

expected to occur no earlier than 2008 and the contract’s period of 

performance was extended through December 2008. The prime contract to 

conduct the lethality demonstration is currently valued at approximately 

$3.6 billion—more than three times its original value of $1.02 billion. 

Figure 4 summarizes the major activity for the program’s prime contract 

since inception. 

 6

 GAO, Uncertainties Remain Concerning the Airborne Laser’s Cost and Military Utility, 

GAO-04-643R (Washington, D.C.: May 17, 2004). 

Major Contracting Activity 

in Fiscal Year 2004 
Appendix III: Airborne Laser 

Page 61 GAO-05-243 Missile Defense 

Figure 4: ABL Block 2004 Prime Contract 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate prime contractor performance relative to cost and 

schedule. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are generally associated 

with the accomplishment of activities under cost or ahead of schedule, 

while negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. 

Our analysis of prime contractor Cost Performance Reports indicates that 

ABL cost and schedule performance declined during the first half of fiscal 

year 2004 even though the program implemented a new performance 

measurement baseline7

 at the beginning of the fiscal year. As illustrated in 

figure 5, the program incurred a negative cost variance of $114 million and 

a negative schedule variance of $47 million during the first 6 months of 

fiscal year 2004. Program officials indicated that delays in hardware 

delivery, design problems, and integration issues were the primary drivers 

of cost growth. 

 7

 A performance measurement baseline identifies and defines work tasks, designates and 

assigns organizational responsibilities for each task, schedules the work tasks in 

accordance with established targets, and allocates budget to the scheduled work. 

Prime Contractor Fiscal 

Year 2004 Cost and 

Schedule Performance 

Original - 1996 Previous - 2003 Current - 2004

Contract value: $1.0 billion

Contract end: June 2005

Comment: New contract

Contract value: $2.1 billion

Contract end: June 2005

Comment: Negative cost 

and schedule 

performance

Contract value: $3.6 billion

Contract end: December 2008

Comment: Cost ceiling increased 

and period of performance 

extended

Source: MDA (data); GAO (presentation).
Appendix III: Airborne Laser 

Page 62 GAO-05-243 Missile Defense 

Figure 5: ABL Fiscal Year 2004 Cost and Schedule Performance 

Note: Insufficient data is available to perform earned value management analysis beyond March 

2004. Contractor performance reporting was suspended from April 2004 through July 2004 because 

the program was re-planning its efforts and implementing a new performance measurement baseline. 

Between April and July 2004, while the contractor was re-planning its 

work effort, the program was unable to fully evaluate the contractor’s 

progress against its cost and schedule objectives. During this time, 

program officials directed the contractor to suspend normal cost 

performance reporting and redirected resources to complete the replanning effort. Since the contractor was not required to provide program 

officials with full Cost Performance Reports, the program was unable to 

perform meaningful Earned Value Management (EVM) analysis.8

 However, 

in the absence of these reports, program officials took steps to ensure that 

some insight into the contractor’s progress was maintained throughout the 

 8

 The EVM system is a management tool widely used by DOD to compare the value of the 

prime contractor’s work performed to the work’s actual cost. The tool measures the 

contractor’s actual progress against its expected progress and enables the government and 

contractor to estimate the program’s remaining cost. 

Dollars in millions

-120

-100

-80

-60

-40

-20

0

Oct. Nov.

2003 2004

Dec. Jan. Feb. Mar.

Sources: Contractor (data); GAO (analysis).

Cumlative cost variance

Cumlative schedule variance
Appendix III: Airborne Laser 

Page 63 GAO-05-243 Missile Defense 

re-planning effort. For example, the program measured schedule progress 

by comparing actual progress against the completion of detailed activities 

associated with “First Light” and “First Flight” and gauged the contractor’s 

cost performance by comparing contractor forecasted expenditures to the 

actual costs of the work performed. 

The contractor resumed normal cost performance reporting in August 

2004. As of September 2004, the contractor was performing work under 

budget but slightly behind schedule—the program had a positive cost 

variance of $6.6 million and a negative schedule variance of $1.6 million. 

According to Cost Performance Reports, the program experienced delays 

associated with the integration and checkout of the turret assembly—a 

subcomponent of the BC/FC system—which caused schedule slips 

through the end of the fiscal year. The late delivery of laser spare material 

and assembly parts caused additional schedule delays for the program. 

Although the program was restructured in spring 2004 and the ABL prime 

contract modified to extend the contract period and increase its value, the 

associated award fee plan was not adjusted. Therefore, the contractor 

currently has no opportunity to earn any fee for successful demonstration, 

since the current award fee plan was tied to a successful completion of 

shoot down by December 2004. 

Award Fee Plan 

Unchanged 
Fiscal Year 2004 Progress Assessment

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

The C2BMC team executed the program within budget but slightly behind 

schedule in fiscal year 2004. Important activities—such as the completion of 

software development and testing, integration activities, and operator 

training continued in fiscal year 2004 to ready the element for Limited 

Defensive Operations (LDO)—were completed. 

Schedule: By the end of September 2004, the C2BMC program office 

completed activities needed to ready the C2BMC element for LDO. The LDO 

software “build” (spiral 4.3) was delivered. The program office also carried 

out a number of activities enabling BMDS integration and communications. 

Finally, C2BMC suites at U.S. Strategic Command and U.S. Northern 

Command were activated, and “web browsers” providing summary screens 

of the unfolding battle (such as trajectories of attacking missiles and 

launched interceptors) were installed at U.S. Pacific Command and locations 

in the National Capital Region. 

Testing: Testing to evaluate C2BMC functionality, interoperability, and 

system-level integration for LDO was completed. For example, Cycle-3 

testing—the third of four cycles of testing to verify that C2BMC interfaces 

with each BMDS element individually—was completed in August 2004. 

Cycle-4 testing, which is ongoing, is the final cycle of testing to verify 

system-level integration. During these tests, the C2BMC element participates 

in flight tests planned and conducted by MDA. 

Performance: During testing of its software, the C2BMC program 

uncovered a performance issue with its “track correlation and association” 

algorithm in scenarios involving multiple tracks. The program monitored this 

issue as a high-risk item because it had the potential to impact situational 

awareness.In particular, threat information could be displayed differently at 

C2BMC suites and GMD fire control nodes, possibly causing confusion 

within the command structure. The problem was resolved with software 

fixes and the issue retired in July 2004. 

Cost: Our analysis of the prime contractor’s Cost Performance Reports 

shows that the contractor continued to carry a positive cost variance, that is, 

in total it completed work under budget. However, the contractor 

experienced a modest erosion in cost performance in fiscal year 2004. In 

particular, it completed fiscal year 2004 activities slightly over budget, 

incurring a negative cost variance of $3.6 million. The prime contractor’s 

schedule performance was slightly, yet consistently, behind schedule for 

most of fiscal year 2004. In total, the contractor incurred a negative schedule 

variance of $5.7 million because of unanticipated technical issues. 

The Command, Control, Battle 

Management, and Communications 

(C2BMC) element is the integrating 

and controlling element of the 

Ballistic Missile Defense System 

(BMDS). It is designed to link all 

system elements, manage real-time 

battle information for the 

warfighter, and coordinate element 

operation to counter ballistic 

missile attacks in all phases of 

flight. 

The C2BMC element is being 

developed under MDA’s 

evolutionary acquisition approach, 

which delivers system capabilities 

in 2-year blocks beginning with 

Block 2004. Within each block, 

C2BMC software is developed 

incrementally through a series of 

software builds known as “spirals.” 

The principal function of the Block 

2004 C2BMC element is to provide 

situational awareness, that is, to 

monitor the operational status of 

each BMDS component and to 

display threat information such as 

missile trajectories and impact 

points. It also performs deliberate 

planning activities for developing 

battle plans and other operational 

concepts. 

DOD’s planned investment in the 

C2BMC program from program 

inception in 2002 through 2011 is 

approximately $2.2 billion. DOD 

expended $344 million between 

fiscal years 2002 and 2004, 

Congress appropriated $191 million 

for fiscal year 2005, and MDA is 

budgeting about $1.65 billion for 

C2BMC development and 

operations between fiscal years 

2006 and 2011. 

An Element of the Ballistic Missile Defense System

Appendix IV Summary 

Command, Control, Battle Management, 

and Communications 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 65 GAO-05-243 Missile Defense 

The Command, Control, Battle Management, and Communications 

(C2BMC) element is being developed as the integrating and controlling 

entity of the Ballistic Missile Defense System (BMDS). It is designed to 

provide connectivity between the various BMDS elements and to manage 

their operation as part of an integrated, layered missile defense system. 

C2BMC has neither a sensor nor weapon. As a software system housed in 

command centers known as suites,1

 C2BMC provides network-centric 

warfare capabilities that provide the warfighter with the capability to plan 

and monitor the missile defense mission. The C2BMC element will track 

ballistic missile threats—utilizing all available sensors from the various 

elements—and direct weapons systems to engage the threat. 

As the name indicates, the C2BMC is comprised of three major 

components: 

• Command and control. The command and control component 

enables the warfighter to monitor the operational status of each BMDS 

component, display threat information, such as missile trajectory and 

impact point, and control defensive actions. In other words, it provides 

the situational awareness and planning tools to assist the command 

structure in formulating and implementing defensive actions. 

• Battle management. The battle management component formulates 

the detailed instructions (task plans) for executing various missile 

defense functions, such as tracking enemy missiles, discriminating the 

warhead from decoys and associated objects, and directing the launch 

of interceptors. Once implemented, the battle manager will direct the 

operation of system elements and components, especially under 

evolving battle conditions. 

• Communications. Leveraging existing infrastructure, the 

communications component manages the exchange and dissemination 

of information necessary for carrying out the battle management and 

command and control objectives. 

The Missile Defense Agency (MDA) initiated the C2BMC program in 2002 

as a new element of the BMDS. Program officials noted that initial 

 1

 The C2BMC element also consists of supporting hardware, such as workstations and 

communications equipment. 

Appendix IV: Command, Control, Battle 

Management, and Communications 

Element Description 

History 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 66 GAO-05-243 Missile Defense 

versions of C2BMC software are based on existing Air Force and GMDdeveloped fire control (battle management) software. 

The C2BMC element is being developed under MDA’s evolutionary 

acquisition approach, which delivers system capabilities in 2-year blocks, 

beginning with Block 2004. Within each block, C2BMC software is 

developed incrementally through a series of software builds known as 

“spirals.” Over time, the C2BMC element will be enhanced to provide 

overarching control and execution of missile defense engagements with 

the aim of implementing layered defense through the collective use of 

individual BMDS elements. 

The principal function of the Block 2004 C2BMC element is to provide 

situational awareness, that is, to monitor the operational status of each 

BMDS component and to display threat information such as missile 

trajectories and impact points. The program expects to develop this 

capability incrementally through spirals 4.1 – 4.5. The interim delivery, 

spiral 4.3, is available for Limited Defensive Operations (LDO) and is on 

the path to full Block 2004 functionality. 

The incorporation of battle management capabilities in the C2BMC 

element begins with Block 2006. In the 2006-2007 time frame, the element 

is expected to track that ballistic missile threat throughout its entire 

trajectory and select the appropriate elements to engage the threat. For 

example, the Block 2006 C2BMC configuration would be able to generate a 

single, more precise track from multiple radars and to transmit it to the 

other elements. Together, this functionality enables each element to “see 

farther” than it could using its own radar system. This allows elements to 

launch interceptors earlier, which provides more opportunity to engage 

incoming ballistic missiles. 

Block 2006 is also expected to make a significant improvement over Block 

2004 with respect to BMDS communications. During this time, the C2BMC 

program office will work to establish communications to all elements of 

the BMDS, overcome limitations of legacy satellite communications 

protocols, and establish redundant communications links to enhance 

robustness. Such upgrades serve to improve operational availability and 

situational awareness. 

Developmental 

Phases 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 67 GAO-05-243 Missile Defense 

Planned accomplishments for the C2BMC program in fiscal year 2004 

centered on completing activities to ready the element for LDO by the end 

of September 2004. To achieve this goal, the C2BMC element planned to 

complete the following specific activities: 

• Software development. Complete the design, development, and testing 

of LDO C2BMC software spirals 4.1 – 4.3. 

• BMDS integration and communications. Integrate the C2BMC element 

into the BMDS; install and activate global communications capabilities. 

• Make BMDS operational. Complete and activate C2BMC suites; train 

operators. 

By the end of September 2004, the C2BMC program office completed 

activities needed to ready the C2BMC element for LDO. The LDO “build” 

of C2BMC (spiral 4.3) was delivered and installed at the various suites. The 

program office also carried out a number of activities enabling BMDS 

integration and communications. Finally, C2BMC suites at U.S. Strategic 

Command (USSTRATCOM) and U.S. Northern Command 

(USNORTHCOM) were activated, and “web browsers” providing summary 

screens of the unfolding battle (such as trajectories of attacking missiles 

and launched interceptors) were installed at U.S. Pacific Command 

(USPACOM) and locations in the National Capital Region (such as the 

White House). 

Table 17 summarizes the principal development and testing activities for 

the first three spirals of Block 2004 C2BMC element software. Most 

notably, development of the LDO build, spiral 4.3, was completed in May 

2004. Testing to evaluate C2BMC functionality, interoperability, and 

system-level integration was also completed. For example, Cycle-3 

testing—the third of four cycles of testing to verify that C2BMC interfaces 

with each BMDS element individually—was completed in August 2004. 

Cycle-4 testing, the final cycle of testing to verify system-level integration, 

is ongoing. During these tests, the C2BMC element participates in flight 

tests planned and conducted by MDA. 

Planned 

Accomplishments for 

Fiscal Year 2004 

Assessment of 

Scheduled Activities 

Status of C2BMC Software 

Development 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 68 GAO-05-243 Missile Defense 

Table 17: C2BMC Fiscal Year 2004 Accomplishments—Software Development and Testing 

Software build Activity Completion date Comments 

Spiral 4.1 Development Mar. 2003 

Testing Oct. 2003 

All functional and performance testing was completed successfully. 

Spiral 4.2 Development Sept. 2003 

Testing Cycle-3: Feb. 2004 

Spiral 4.2 was tested in a number of venues, including Missile 

Defense Integration Exercise 04a (Mar. 2004), Integrated Missile 

Defense War Game 03.2 (Nov. 2003), and Pacific Explorer II 

(Mar. 2004).a,b,c

Spiral 4.3 Development May 2004 

Testing Cycle-3: Aug. 2004 

Cycle-4: Ongoing 

Spiral 4.3 is the LDO build. It was tested in Pacific Explorer III (Jul. 

2004), Glory Trip 185 (June 2004), Integrated Missile Defense War 

Games 04.2 – 04.4 (June – Sept 2004), System Integration and 

Checkout 6A (Sept. 2004), and other tests.b,c,d

Sources: MDA (data); GAO (presentation). 

a

Missile Defense Integration Exercises are hardware-in-the-loop ground tests conducted to 

characterize the degree of integration and interoperability between BMDS elements. 

b

Integrated Missile Defense War Games are ground tests that enable the warfighter to exercise the 

C2BMC in a simulated operational environment. In general, the warfighter community uses them to 

gain insight in, and provide feedback on, C2BMC capabilities. 

c

Pacific Explorers are field exercises to demonstrate BMDS connectivity. An Aegis destroyer 

participates by tracking an actual missile (or a simulated target) and passes track data to the C2BMC. 

d

Glory Trips are live flight tests during which a Minuteman III missile is launched from Vandenberg Air 

Force Base as part of Follow-on Test and Evaluation. C2BMC objectives are geared to evaluating the 

element’s interfacing with, and processing of track data from, forward-deployed radars. 

The program office plans to complete, by the end of calendar year 2005, 

key activities pertaining to the development and testing of spirals 4.4 and 

4.5—the final two builds of Block 2004 C2BMC element software. For 

example, development of spiral 4.4 was completed in November 2004 and 

Cycle-3 testing is expected to be completed in April 2005. In addition, the 

program office expects to complete development of spiral 4.5 in March 

2005 and begin Cycle-3 testing in June 2005. Cycle-4 testing of spiral 4.5 is 

scheduled to begin during the first quarter of fiscal year 2006 with 

completion coinciding with the completion of Block 2004. 

The C2BMC program office carried out a number of activities in fiscal year 

2004 related to C2BMC’s role in BMDS integration and communications. 

For example, interface specifications between C2BMC and other elements 

were completed. In addition, communications software and hardware 

were installed at the various C2BMC sites, including USSTRATCOM, 

USNORTHCOM, and USPACOM. Finally, the C2BMC element participated 

in a number of MDA test events to verify system integration. 

Status of BMDS 

Integration and 

Communications 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 69 GAO-05-243 Missile Defense 

The C2BMC program completed a variety of activities in fiscal year 2004 to 

make the BMDS operational. These activities included activation of 

C2BMC suites at the various command sites and the training of military 

operators for conducting ballistic missile defense missions. Table 18 

summarizes the program’s efforts in making the system available for LDO. 

Table 18: C2BMC Fiscal Year 2004 Planned Accomplishments—Making System Operational 

Activity Description/Progress assessment 

Site Activation C2BMC suites at USSTRATCOM and USNORTHCOM were fully activated to support defensive 

operations. Furthermore, so-called “web browsers” that provide situational awareness are ready to 

support LDO at USPACOM and three National Capital Region sites. At all sites, hardware 

installation, software installation, testing, and a readiness review were completed by Sept. 30, 

2004. 

Training C2BMC operator training was completed at USNORTHCOM, USSTRATCOM, USPACOM, and 

three National Capital Region sites by Sept. 30, 2004, to support LDO. The warfighter completed a 

number of training courses—Joint Defense Planner Class, Situational Awareness Class, and Flag 

Officer Class—at all locations and participated in training events. Operator training continued 

through the beginning of fiscal year 2005 as part of the “shakedown” process. 

Source: MDA. 

During testing of C2BMC software, the C2BMC program uncovered a 

performance issue with its “track correlation and association” algorithm in 

scenarios involving multiple tracks. During a portion of fiscal year 2004, 

the program monitored this issue as a high-risk item because it had the 

potential to impact situational awareness. In particular, threat information 

could be displayed differently at C2BMC suites and GMD fire control 

nodes, possibly causing confusion within the command structure.2

 The 

program implemented a mitigation plan to resolve this issue, including the 

formation of a “Blue Ribbon Panel” in June 2004 to analyze the problem. 

The problem was resolved with software fixes and the issue retired in July 

2004. 

DOD’s planned investment in the C2BMC program from program inception 

in 2002 through 2011 is approximately $2.2 billion. As broken out in table 

19, DOD expended $343 million between fiscal years 2002 and 2004, 

Congress appropriated $191 million for fiscal year 2005, and MDA is 

 2

 Details of this issue are classified. 

Status of Steps Taken to 

Make BMDS Operational 

Assessment of 

Element Performance 

Assessment of 

Element Cost 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 70 GAO-05-243 Missile Defense 

budgeting $1.65 billion for C2BMC development and operations between 

fiscal years 2006 and 2011. 

Table 19: C2BMC Cost 

Dollars in millions of then-year dollars 

 Other Block 2004 Block 2006 Block 2008 Block 2010 CorebTotal

FY 2002a – FY 2003 $179.4 $0 $0 $0 $0 $0 $179.4

FY 2004 (Actuals) 0 92.4 52.5 0.7 0 18.3 163.9

FY 2005 (Appropriated) 0 154.0 24.0 10.8 0 1.7 190.5

FY 2006 0 22.5 142.2 75.9 0 0 240.6

FY 2007 0 16.2 153.0 100.0 11.5 0 280.7

FY 2008 0 0 23.8 197.0 60.6 0 281.4

FY 2009 0 0 16.7 166.0 104.6 0 287.3

FY 2010 0 0 0 65.7 217.8 0 283.5

FY 2011 0 0 0 56.0 223.7 0 279.7

FY 2002 – FY 2011 $179.4 $285.1 $412.2 $672.1 $618.2 $20.0 $2,187.0

Source: MDA. 

Note: C2BMC budget as of February 2005. 

a

Program inception (FY 2002). 

b

Core funding is part of Program Element 0603890C, “BMD Project.” Core activities involve the hiring 

of skilled individuals to aid in the development of the C2BMC element. 

C2BMC development is being carried out through a contractual vehicle 

known as an Other Transaction Agreement (OTA),3

 which functions much 

like a prime contract. MDA believes that an OTA allows the C2BMC 

element to take advantage of more collaborative relationships between 

industry, the government, Federally Funded Research and Development 

Centers, and University Affiliated Research Centers. OTAs generally are 

not subject to federal procurement laws and regulations. The OTA did 

implement the earned value management system used to assess the cost 

and schedule performance of contractors developing large weapon 

systems. The C2BMC Missile Defense National Team, for which Lockheed 

 3

 An OTA refers to transactions other than contracts, grants, or cooperative agreements. 

OTAs are entered into under the authority of 10 U.S.C. § 2371 (2000 & Supp. II 2004) for 

basic, applied, and advanced research projects or under the authority of section 845 of the 

National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. § 2371 note) for 

prototype projects. 

Prime Contractor Cost and 

Schedule Performance 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 71 GAO-05-243 Missile Defense 

Martin Integrated System and Solutions serves as the industry lead, is 

developing and fielding the C2BMC element of the BMDS. 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate a prime contractor’s cost and schedule 

performance. Generally, these reports detail deviations in cost and 

schedule relative to expectations established under the contract. 

Contractors refer to deviations as “variances.” Positive variances are 

usually associated with the accomplishment of activities under cost or 

ahead of schedule, while negative variances are often associated with the 

accomplishment of activities over cost or behind schedule. 

During fiscal year 2004, C2BMC development was performed under two 

parts of the existing OTA—Part 2, for which work was completed in March 

2004, and Part 3, for which work began in March 2004. As illustrated in 

figure 6, Cost Performance Reports show that Lockheed Martin, the 

industry lead for the OTA, continued to carry a positive cost variance, that 

is, in total it completed work under budget. However, Lockheed 

experienced a modest erosion in cost performance in fiscal year 2004. In 

particular, it completed fiscal year 2004 activities slightly over budget, 

incurring a negative cost variance of $3.6 million on combined Part 2 and 

Part 3 work efforts. 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 72 GAO-05-243 Missile Defense 

Figure 6: C2BMC Fiscal Year 2004 Cost and Schedule Performance 

The prime contractor’s schedule performance was slightly, yet 

consistently, behind schedule for most of fiscal year 2004. However, 

beginning in May 2004, schedule performance sharply declined. In total, 

Lockheed incurred a negative schedule variance of $5.7 million for 

combined Part 2 and Part 3 work performed in fiscal year 2004. 

The C2BMC program office reported the following two drivers as 

contributing to fiscal year 2004 cost and schedule variances. 

• Track association algorithm. As noted in the performance section, 

the C2BMC program uncovered a performance issue with its “track 

correlation and association” algorithm during spiral testing. Resources 

allocated to spiral 4.4 development were used to address this problem, 

including the convening of a Blue Ribbon panel to analyze it. In the 

course of analyzing and correcting this issue, more time and money 

were needed for additional testing of spiral 4.3 and associated risk 

reduction efforts on developing an alternative algorithm. 

• Site activation. C2BMC suites are being integrated with existing 

systems at USSTRATCOM, USNORTHCOM, and USPACOM. The 

Dollars in millions

Part 2 Part 3

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

Oct. Nov.

2003 2004

Dec. Jan. Feb. Mar. Apr. June May July Aug. Sept.

Cumulative cost variance

Sources: Contractor (data); GAO (analysis).

Cumulative schedule variance 
Appendix IV: Command, Control, Battle 

Management, and Communications 

Page 73 GAO-05-243 Missile Defense 

integration efforts, particularly those aspects pertaining to information 

assurance, were considerably more difficult that anticipated. The result 

was the need for more travel by the engineering team to field, install, 

and troubleshoot problems at the three activation sites. 
Fiscal Year 2004 Progress Assessment

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

By the end of fiscal year 2004, GMD carried out planned activities needed to 

field an initial missile defense capability, including, as summarized below, 

the emplacement of interceptors at Fort Greely, Alaska. However, delays of 

flight tests prevented MDA from demonstrating the operation of the 

integrated system in a realistic environment before placing interceptors in 

silos for defensive operations. The program also showed unfavorable trends 

in contractor cost and schedule performance in fiscal year 2004. 

Schedule: The GMD program completed construction of missile silos and 

facilities at Fort Greely, Alaska, and Vandenberg Air Force Base, California; 

emplaced five GMD interceptors in their silos at Fort Greely by the end of 

September 2004; and completed the upgrade of the Cobra Dane radar. MDA 

is on track to add additional interceptors and radar capabilities throughout 

Block 2004, although there is some risk that the sea-based X-band radar will 

not be completed by the first quarter of fiscal year 2006, as planned. 

Test: The GMD program office conducted two flight tests (non-intercept 

booster tests) in fiscal year 2004 out of six events that were planned—no 

intercept attempts were conducted. Accordingly, GMD interceptors were 

fielded before flight testing was performed to verify that LDO hardware and 

software could function in an operational environment. In preparation for 

defensive operations, the GMD program also completed a series of System 

Integration and Checkouts that demonstrated connectivity, functionality, 

and integration of its fielded components. 

Performance: While ground and flight tests have demonstrated each step of

the missile defense engagement sequence—detect, track, launch/engage, and 

intercept—collectively, these accomplishments do not verify integrated 

operation of the GMD capability. For example, BMDS and GMD radars have 

not performed their primary function as a fire control radar in a flight test 

event. 

Cost: Our analysis of the prime contractor’s Cost Performance Reports 

shows that the contractor overran its budgeted costs in fiscal year 2004 by 

$219.6 million and was unable to complete $59.9 million worth of scheduled 

work. Developmental issues with the interceptor’s booster and kill vehicle 

remain the leading causes of cost overruns and schedule slips. For example, 

interceptor development cost $204 million more in fiscal year 2004 than the 

contractor budgeted. Flight test delays also contributed to unfavorable cost 

and schedule performance. 

The Ground-based Midcourse 

Defense (GMD) element is a 

missile defense system being 

developed to protect the United 

States against limited long-range 

ballistic missile attacks launched 

from Northeast Asia and the Middle 

East. The first increment of this 

capability, Block 2004, is being 

developed and fielded during the 

2004-2005 time frame. 

By the end of September 2004, the 

GMD program put in place the 

components of a limited capability, 

which is known as Limited 

Defensive Operations (LDO). MDA 

plans to augment this capability 

with additional interceptors and 

radars by the end of calendar year 

2005 to complete the full Block 

2004 increment. 

DOD’s planned investment in the 

GMD program from program 

inception in 1996 through 2011 is 

approximately $31.6 billion. DOD 

expended $15.3 billion between 

fiscal years 1996 and 2004, 

Congress appropriated $3.3 billion 

for fiscal year 2005, and MDA is 

budgeting about $13.0 billion 

between fiscal years 2006 and 2011 

for GMD development, 

procurement, and operations. 

An Element of the Ballistic Missile Defense System

Appendix V Summary 

Ground-Based Midcourse Defense 
Appendix V: Ground-Based Midcourse 

Defense 

Page 75 GAO-05-243 Missile Defense 

The Ground-based Midcourse Defense (GMD) element is a missile defense 

system designed to protect the U.S. homeland against intercontinental 

ballistic missile (ICBM)1

 attacks. As an integral part of the Ballistic Missile 

Defense System (BMDS), GMD functions to destroy long-range ballistic 

missiles during the midcourse phase of flight, the period after booster 

burnout when the warhead travels through space on a predictable path. 

The GMD element relies on a broad array of components, including 

(1) space- and ground-based sensors to provide early warning and tracking 

of missile launches; (2) ground- and sea-based radars to identify and refine 

the tracks of threatening objects; (3) ground-based interceptors to destroy 

enemy missiles through “hit-to-kill” impacts outside the atmosphere; and 

(4) fire control and communications nodes for battle management and 

execution of the GMD mission. Figure 7 illustrates GMD components, 

current and planned, which are situated at several locations within and 

outside of the United States. 

The program office produced, emplaced, and upgraded all GMD 

components needed for an initial capability by the end of September 2004 

and is working to augment this initial capability with additional 

interceptors and radars by the end of calendar year 2005. This first block 

of capability—Block 2004—is estimated to provide the U.S. with 

protection against ICBMs launched from Northeast Asia and the Middle 

East. 

 1

 The terms “intercontinental ballistic missile” and “long range ballistic missile” are used 

interchangeably. They are, by definition, ballistic missiles with ranges greater than 5,500 

kilometers (3,400 miles). 

Appendix V: Ground-Based Midcourse 

Defense 

Element Description 
Appendix V: Ground-Based Midcourse 

Defense 

Page 76 GAO-05-243 Missile Defense 

Figure 7: Components of the GMD Element 

The Department of Defense (DOD) established the National Missile 

Defense program in 1996 to develop a missile defense system capable of 

protecting the United States from ICBM attacks. The program was to be in 

a position to deploy the system by 2005, if the threat warranted. Many of 

the components used in the current GMD program are based directly on 

the research and development conducted by the National Missile Defense 

program. 

In response to the President’s December 2002 directive to field a missile 

defense system, the Missile Defense Agency (MDA) accelerated its 

developmental activities to make the GMD element operational—that is, to 

History 

Mission: The interceptor consists of an exoatmospheric kill vehicle 

mounted atop a three-stage booster. The kill vehicle is the weapon 

component of the interceptor that attempts to detect and destroy the threat 

through a hit-to-kill impact.

Location: Missile fields in Ft. Greely, Alaska, and Vandenberg Air Force 

Base, California.

Mission: The interceptor consists of an exoatmospheric kill vehicle 

mounted atop a three-stage booster. The kill vehicle is the weapon 

component of the interceptor that attempts to detect and destroy the threat 

through a hit-to-kill impact.

Location: Missile fields in Ft. Greely, Alaska, and Vandenberg Air Force 

Base, California.

Mission: The fire control (battle management) component is the 

integrating and controlling entity of the GMD element. Its software plans 

engagements and tasks GMD components to execute a mission. The inflight interceptor communications system enables the fire control 

component to communicate with the kill vehicle while in flight.

Location: Fire control nodes in Ft. Greely, Alaska, and Shriever Air Force 

Base, Colorado.

Mission: The fire control (battle management) component is the 

integrating and controlling entity of the GMD element. Its software plans 

engagements and tasks GMD components to execute a mission. The inflight interceptor communications system enables the fire control 

component to communicate with the kill vehicle while in flight.

Location: Fire control nodes in Ft. Greely, Alaska, and Shriever Air Force 

Base, Colorado.

Mission: Upgraded early 

warning radars for midcourse 

tracking in support of the GMD 

mission. 

Locations: Beale Air Force 

Base, California; Fylingdales, 

England.

Mission: Upgraded early 

warning radars for midcourse 

tracking in support of the GMD 

mission. 

Locations: Beale Air Force 

Base, California; Fylingdales, 

England.

Mission: X-band radar emplaced on a sea-based, mobile platform in the Pacific. It is 

planned to be available in late 2005 for use in flight testing or as an operational asset 

for midcourse tracking and discrimination.

Location: Adak, Alaska (home port).

Mission: X-band radar emplaced on a sea-based, mobile platform in the Pacific. It is 

planned to be available in late 2005 for use in flight testing or as an operational asset 

for midcourse tracking and discrimination.

Location: Adak, Alaska (home port).

Ground Based Interceptor

Fire Control and

Communications 

Upgraded Early

Warning Radars 

Cobra Dane Radar 

Sea-Based

X-Band Radar

Exoatmospheric

Kill Vehicle

Mission: Principal fire 

control radar for tracking 

missiles launched out of 

Northeast Asia.

Location: Eareckson Air 

Station, Alaska.

Mission: Principal fire 

control radar for tracking 

missiles launched out of 

Northeast Asia.

Location: Eareckson Air 

Station, Alaska.

MDA (data); GAO (presentation).
Appendix V: Ground-Based Midcourse 

Defense 

Page 77 GAO-05-243 Missile Defense 

field a working system operated by trained warfighters. GMD remains a 

capabilities-based research and development program with enhanced 

capabilities delivered periodically in block upgrades. 

GMD’s development and fielding are proceeding in a series of planned 2-

year blocks, which incrementally increase the element’s capability by 

maturing the design of element components and upgrading software. 

Block 2004, the first increment, is being rolled out in two major phases: 

• Limited Defensive Operations (LDO). The GMD program 

completed an initial capability in September 2004, which is available 

for limited defensive operations. The principal components include five 

interceptors at Fort Greely, Alaska; GMD fire control and 

communications nodes for battle management and execution at Fort 

Greely and Schriever Air Force Base, Colorado; an upgraded Cobra 

Dane radar at Eareckson Air Station, Alaska; and connectivity to Aegis 

BMD for additional radar tracking. DOD will use this initial capability 

to provide the United States with protection against a limited ballistic 

missile attack launched from Northeast Asia. This capability was 

expanded by the end of calendar year 2004 with the addition of three 

interceptors—one at Fort Greely and two at Vandenberg Air Force 

Base (VAFB), California—and an upgraded early warning radar 

(UEWR) at Beale Air Force Base, California. 

• Block 2004 Defensive Capability. By the end of calendar year 2005, 

MDA plans to augment the LDO capability by installing 10 additional 

interceptors at Fort Greely (for a total of 18 interceptors at Fort Greely 

and VAFB); deploying a sea-based X-band radar; and upgrading the 

early warning radar at Fylingdales, England. These enhancements are 

expected to provide additional protection against ICBMs launched 

from the Middle East. 

Future block configurations of the GMD element build upon the Block 

2004 capability. As part of its Block 2006 program, MDA expects to field 

10 additional interceptors at Fort Greely and upgrade the early warning 

radar located at Thule Airbase, Greenland. MDA also plans to conduct 

more realistic flight tests to demonstrate performance against more 

complex missile threats and environments. 

Developmental 

Phases 
Appendix V: Ground-Based Midcourse 

Defense 

Page 78 GAO-05-243 Missile Defense 

The GMD element plays a central role in the Block 2004 BMDS. In general, 

planned accomplishments for GMD in fiscal year 2004 centered on 

continuing development of element components, conducting ground and 

flight testing, and fielding components for LDO. Specific planned 

accomplishments include: 

• Component Development. The program office planned to continue 

development of all element components for LDO, Block 2004, and the 

incremental improvement of block capability. 

• Testing. The program planned to conduct six flight tests (three 

booster tests, one “fly-by” test, and two intercept attempts), two 

integrated ground tests, and System Integration and Checkouts in 

preparation for LDO. 

• Fielding Initial Capability. The program planned to complete 

construction of facilities and the installation of five ground-based 

interceptors at Fort Greely, complete upgrades of the Cobra Dane 

radar, and activate its fire control and communications component. 

MDA met its fielding goals for LDO and is on track, with some schedule 

risk, to add additional interceptors and radar capabilities throughout 

Block 2004. Ground tests were conducted to ensure interoperability of 

element components and to verify operation and performance of 

component software. However, several key flight tests needed to verify the 

effectiveness of LDO hardware and software, originally scheduled for 

fiscal year 2004, were delayed into fiscal year 2005. 

In fiscal year 2004, a large portion of the GMD program focused on the 

development of its Block 2004 components, some of which will be fielded 

as part of LDO. Summaries of progress made by the GMD program office 

during fiscal year 2004 in developing its components are given in table 20. 

Planned 

Accomplishments for 

Fiscal Year 2004 

Assessment of 

Scheduled Activities 

GMD Component 

Development 
Appendix V: Ground-Based Midcourse 

Defense 

Page 79 GAO-05-243 Missile Defense 

Table 20: Status of GMD Fiscal Year 2004 Component Development 

Component Description Fiscal Year 2004 progress 

GMD Fire Control and 

Communications 

Component 

The fire control component integrates and controls 

the other components of the GMD element. With 

input from operators, the fire control software plans 

engagements and directs GMD components, such 

as its radars and interceptors, to carry out a mission 

to destroy enemy ballistic missiles. The in-flight 

interceptor communications system (IFICS), which 

is part of the fire control component, enables the fire 

control component to communicate with the kill 

vehicle while it is en route to engage a threat. 

In fiscal year 2004, the GMD program completed 

software development and testing of the LDO build. 

MDA also completed construction of IFICS Data 

Terminals at Shemya and Fort Greely and 

activated the CONUSa

 fiber optic ring, which 

connects all the command, control, and 

communications networks of the GMD element. 

Additionally, connectivity to Aegis BMD and the 

C2BMC were completed. 

Upgraded Early Warning 

Radars 

(Beale and Fylingdales) 

The early warning radar is an upgraded version of 

existing Ultra High Frequency surveillance radars 

used by the Air Force for strategic warning and 

attack assessment. For Block 2004, the GMD 

program is upgrading two early warning radars—

one at Beale AFB and another at Fylingdales 

Airbase—to enable the radars to more accurately 

track enemy missiles. The upgrades include 

improvements to both the hardware and software. 

In fiscal year 2004, Beale UEWR ground support 

facilities and radar hardware installation were 

completed. Although radar hardware installation is 

complete, final software installation and testing are 

ongoing with completion expected in the middle of 

fiscal year 2005. 

MDA also began facility construction and upgrades 

to the early warning radar at Fylingdales, which is 

on track to be completed by the first quarter of 

fiscal year 2006. 

Upgraded Cobra Dane 

Radar 

The Cobra Dane radar, located at Eareckson Air 

Station on Shemya Island, Alaska, was primarily 

being used to collect data on ICBM test launches 

out of Russia. Cobra Dane’s surveillance mission 

did not require real-time communications and dataprocessing capabilities; therefore, it was upgraded 

to be capable of performing the missile defense 

mission as part of the Block 2004 architecture. As 

an upgraded radar, Cobra Dane is expected to 

operate much like the upgraded early warning radar 

at Beale AFB. Although its hardware required minor 

modifications, Cobra Dane’s mission software is 

being revised for its new application. The program 

plans to use existing software and develop new 

software to integrate Cobra Dane into the GMD 

architecture. It is also modifying the Cobra Dane 

facility to accommodate enhanced communications 

functions. 

In fiscal year 2004, the GMD program completed 

hardware installation and software upgrades to the 

Cobra Dane radar. The radar also tracked a foreign 

missile launch and participated in an integrated 

ground test. While Cobra Dane met most of the 

data collection objectives in these tests, the 

upgraded Cobra Dane radar has not participated in 

a flight test event as the primary fire control radar—

a role it would need to fill in the event of a real 

threat. MDA may perform a radar certification flight 

test using a long-range air-launched target during 

the third quarter of 2005. The primary objective of 

this test is to demonstrate the upgraded Cobra 

Dane in a more operationally realistic environment. 
Appendix V: Ground-Based Midcourse 

Defense 

Page 80 GAO-05-243 Missile Defense 

Component Description Fiscal Year 2004 progress 

Sea-Based X-Band Radar The GMD program office is managing the 

development of a sea-based X-band radar (SBX) to 

be delivered and integrated into the BMDS by the 

end of Block 2004. SBX will consist of an X-band 

radar—based on the technologies of the X-band 

radar prototype located at Reagan Test Site—

positioned on a sea-based platform, similar to those 

used for offshore oil drilling. The radar is designed 

to track and discriminate enemy missiles with high 

accuracy and assess whether an intercept was 

successful. 

During fiscal year 2004, MDA completed most 

platform modifications and assembly of the radar 

structure. Key electronic components have been 

completed, and all software design reviews 

conducted. 

The program office assesses the delivery of SBX 

by the first quarter of fiscal year 2006 as the 

program’s only significant risk item. If complications 

occur in final integration, checkout, or verification, 

delivery could be delayed. 

MDA plans to exercise the SBX in flight tests 

beginning in fiscal year 2006. 

Ground-Based Interceptor The ground-based interceptor—the weapon 

component of the GMD element—consists of a kill 

vehicle mounted atop a three-stage booster. The 

booster, which is essentially an ICBM-class missile, 

delivers and deploys the kill vehicle into a trajectory 

to engage the threat. Once deployed, the kill vehicle 

uses its onboard guidance, navigation, and control 

subsystem (along with target updates from the fire 

control node component) to detect, track, and steer 

itself into the enemy warhead, destroying it above 

the atmosphere through a hit-to-kill collision. 

In fiscal year 2004, MDA placed the first five 

interceptors into silos at Fort Greely; a sixth 

interceptor was delivered in October 2004. 

MDA continued to work toward building and 

integrating pieces of additional missiles that will be 

delivered throughout 2005. For example, 

interceptors #7 and #8 were placed into VAFB silos 

during December 2004, as scheduled. 

Sources: MDA (data); GAO (presentation). 

a

CONUS refers to the Continental United States, i.e., the lower 48 states. 

In our April 2004 report on missile defense,2

 we noted that MDA is 

pursuing the development of two types of boosters for the GMD 

interceptor, one referred to as the Lockheed BV+ booster and the other 

known as the Orbital Sciences Corporation (OSC) booster. We also 

described how problems with the development and delivery of Lockheed’s 

BV+ booster contributed to cost growth and schedule slips for the 

program. For example, BV+ production was temporarily suspended 

because of two separate explosions at a subcontractor’s propellant-mixing 

facility. 

Despite these problems, MDA is dedicated to pursuing a dual-booster 

strategy. However, the problems with Lockheed’s booster in fiscal year 

2003 had ramifications for the program’s fiscal year 2004 activities. For 

example, MDA planned to use BV+ boosters in alternating Block 2004 

flight tests and in about half of the interceptors fielded. However, because 

 2

 GAO, Missile Defense: Actions Are Needed to Enhance Testing and Accountability, 

GAO-04-409 (Washington, D.C.: Apr. 23, 2004). 
Appendix V: Ground-Based Midcourse 

Defense 

Page 81 GAO-05-243 Missile Defense 

of BV+ development and production problems, MDA deferred BV+ 

participation in integrated flight tests into Block 2006, and the Block 2004 

inventory of GMD interceptors will consist entirely of those utilizing OSC 

boosters. MDA plans to restart the manufacturing of BV+ boosters in fiscal 

year 2005 and to field the first BV+ booster in 2007. 

The GMD program conducts a variety of tests, the most visible being flight 

test events. For example, the program conducted booster validation (BV) 

flight tests to assess the operation of GMD’s two booster designs. In 

addition, the program conducts integrated flight tests (IFT) to more 

realistically demonstrate the GMD element using actual hardware and 

software. IFTs are reflective of the environment in which the GMD 

element would operate for a given threat trajectory and given set of 

conditions. 

Although MDA hoped to gain knowledge about the element’s effectiveness 

by conducting several integrated flight tests throughout fiscal year 2004, 

only two of six scheduled tests—non-intercept tests of the Lockheed BV+ 

booster and the OSC booster—were executed. Table 21 summarizes the 

major GMD flight tests that MDA planned to conduct in fiscal year 2004. 

Table 21: Status of Major GMD Flight Tests (Fiscal Year 2004) 

Test event Date Description Outcome 

BV-5a Original date: 

Feb. 20, 2003 

Actual date: 

Jan. 9, 2004 

BV+ Booster Test 

Objectives: 

• Characterize Lockheed’s BV+ booster 

performance 

All booster objectives were achieved. 

However, the mock kill vehicle failed 

to deploy. 

IFT-13A Original date: 

May 2003 

Planned date: 

Deferred indefinitely 

BV+ Booster Test 

Objectives: 

• Characterize booster and kill vehicle 

environments 

• Engage simulated target as part of an 

integrated system 

The program deferred this test until 

BV+ production resumes. 

GMD Testing 
Appendix V: Ground-Based Midcourse 

Defense 

Page 82 GAO-05-243 Missile Defense 

Test event Date Description Outcome 

IFT-13B Original date: 

July 2003 

Actual date: 

Jan. 26, 2004 

OSC Booster Testb 

Objectives: 

• Characterize booster and kill vehicle 

environments 

• Engage simulated target as part of an 

integrated system 

The test was a successful 

demonstration of the OSC booster—

all test objectives were achieved. 

IFT-13C Original date: 

Mar. 2004 

Actual date: 

Dec. 14, 2004 

Non-intercept attempt (zero-offset flyby)c with the 

OSC booster 

Configuration: 

• Target launch from Kodiak 

• Interceptor launch from Reagan Test Site 

• Interceptor: LDO configuration 

Because the interceptor failed to 

launch from its silo, test objectives 

associated with booster and kill 

vehicle functioning could not be 

assessed. The root cause of the test 

failure was attributed to a timing 

problem with the interceptor’s flight 

computer, which caused the 

interceptor to abort its launch. 

IFT-14 Original date: 

Oct. 2003 

Actual date: 

Feb. 14, 2005 

System test (intercept attempt) with OSC booster 

Configuration: 

• Target launch from Kodiak 

• Interceptor launch from Reagan Test Site 

• Interceptor: LDO configuration 

Because the interceptor failed to 

launch from its silo, test objectives 

associated with booster and kill 

vehicle functioning could not be 

assessed. The reason for the launch 

failure is under investigation. 

FTG-04-1 Planned date: 

4Q FY2005d

System test (intercept attempt) with OSC booster 

Configuration: 

• Target launch from Kodiak 

• Interceptor launch from VAFB 

• Interceptor: LDO configuration 

TBD 

Sources: MDA (data); GAO (presentation). 

Note: Test schedule as of October 2004. 

a

BV-5 was the last flight test to use Lockheed’s BV+ booster. 

b

Orbital Sciences Corporation builds the OSC boost vehicle. MDA accelerated the production of OSC 

boosters to compensate for the undelivered BV+ boosters. All of the Block 2004 interceptors use 

OSC boosters. 

c

A “zero-offset flyby” means that intercepting the target is not a test objective. However, no action is 

taken to prevent an intercept. 

d

We use the notation “4Q FY2005” to mean the fourth quarter of fiscal year 2005 and an identical 

format for other time periods. 
Appendix V: Ground-Based Midcourse 

Defense 

Page 83 GAO-05-243 Missile Defense 

IFT-13C, which was the first flight test in 2 years with the potential for an 

intercept,3

 was delayed several times during fiscal year 2004. Part of the 

delay was attributed to technical problems with the interceptor. In 

addition, MDA upgraded the test interceptor to a configuration that more 

closely matches the ones deployed. The test was conducted in December 

2004, but failed to execute fully because the interceptor did not launch 

from its silo. IFT-13C was of particular significance, because it was to have 

demonstrated operational aspects of the LDO capability for the first time 

in a flight test environment. For example, it was to have demonstrated: (1) 

the operation of LDO hardware and software; (2) the operation of the kill 

vehicle mated with an OSC booster; and (3) “real-time” connectivity 

between Aegis destroyers and the C2BMC. IFT-14 was conducted in 

February 2005 as a repeat of IFT-13C but with the added objective to 

achieve an intercept. However, as in IFT-13C, it failed to execute fully 

because the interceptor did not launch from its silo. 

MDA relies heavily on its ground test program to characterize element and 

system performance (especially under a broad set of conditions not 

testable in flight), to demonstrate interoperability, and to develop 

operational doctrine. MDA conducted two integrated ground tests (IGT) in 

fiscal year 2004, IGT-2 and IGT-4a. These tests employed actual GMDcomponent processors integrated together in a hardware-in-the-loop 

facility that emulated GMD operation in a simulated environment. They 

also included warfighter participation to aid in the development of 

operational concepts. Although the tests demonstrated that GMD 

components could work together, its utility in assessing element 

performance was limited. Officials in the office of DOT&E told us that 

such assessments should be anchored by flight test data so that models 

and simulations accurately characterize the system. Delays in the GMD 

flight test program precluded these tests from being adequately anchored 

and, therefore, limited its usefulness in assessing element performance. 

The GMD program also participated in a series of System Integration and 

Checkouts (SICO) of its fielded components. While these checkouts do not 

assess element performance, they do demonstrate connectivity, 

functionality, integration, and configuration in preparation for defensive 

operations. During fiscal year 2004, MDA successfully conducted SICOs 1, 

3, 5, and 6A. SICO 3 demonstrated the integration of non-LDO interceptor 

 3

 Technically, IFT-13C was a “zero-offset flyby.” Although intercepting the target was not a 

test objective, no action was taken to prevent an intercept. 
Appendix V: Ground-Based Midcourse 

Defense 

Page 84 GAO-05-243 Missile Defense 

equipment at Fort Greely into the overall BMDS; SICO 5 confirmed that 

the upgraded Cobra Dane radar was properly connected to the 

Communications Network; and SICO 6A confirmed integration of LDO 

interceptor equipment at Fort Greely into the BMDS. Finally, SICO 6B was 

successfully conducted in the beginning of fiscal year 2005 (December 

2004). It demonstrated the integration of interceptor equipment at 

Vandenberg into the BMDS. 

The GMD program completed the development, emplacement, and/or 

upgrade of element components planned for LDO, including ground-based 

interceptors, the Cobra Dane radar, the Beale UEWR (in fiscal year 2005), 

and the GMD fire control and communications. Most notably, five 

interceptors were placed in silos at Fort Greely and are available for 

defensive operations. GMD also completed hardware and software 

upgrades to the Cobra Dane and Beale radars, both of which met 

objectives in ground tests and tracked targets of opportunity. Fire control 

and communications nodes have been activated and linked to all GMD 

locations. Finally, facility construction at Fort Greely and other GMD sites 

was completed. Table 22 summarizes main accomplishments made in 

fiscal year 2004 for each activity. 

Table 22: Status of GMD Fiscal Year 2004 Planned Accomplishments—Fielding Initial Capability 

Activity Description/Progress assessment 

Ground Based Interceptor: 

Deliver and install 5 interceptors at Fort 

Greely 

Five interceptors were delivered and installed at Fort Greely by September 30, 2004. 

Three additional interceptors were delivered (1 to Fort Greely; 2 to VAFB) by December 

2004. 

MDA plans to have 18 interceptors available for defensive operations by the end of the 

first quarter of fiscal year 2006, two less than the agency’s Block 2004 fielding goal. Of 

the 20 interceptors originally planned, two were designated as test assets. 

Cobra Dane Radar: 

Complete upgrades, checkout, and 

activation 

Installation and checkout of Cobra Dane’s mission equipment was completed ahead of 

schedule. Cobra Dane software development was also completed. The radar 

successfully tracked a foreign missile launch but has not participated in any BMDS flight 

tests that demonstrate real-time tracking and communications as part of an integrated 

system. 

Beale UEWR: 

Complete upgrades, checkout, and 

activation 

All planned hardware upgrades and GMD software for LDO were completed. The Beale 

UEWR is now integrated with the BMDS. Although radar hardware installation is 

complete, final software installation and testing are ongoing with completion expected in 

the middle of fiscal year 2005. 

The upgraded radar successfully tracked a Titan missile launched out of VAFB and 

several satellites but has not participated in any MDA-dedicated tests like radar 

certification flights or integrated flight tests in its upgraded configuration. The full 

checkout of the upgraded software will not be verified in a flight test until fiscal year 

2005. 

Fielding Initial Capability 
Appendix V: Ground-Based Midcourse 

Defense 

Page 85 GAO-05-243 Missile Defense 

Activity Description/Progress assessment 

GMD fire control and communications: 

Complete installation, checkout, and 

activation 

GMD fire control and communications were completed on schedule to support fielding of 

the GMD element. The CONUS fiber optic ring and spurs to all GMD locations were 

activated. Satellite communication links were established and all IFICS Data Terminals 

were completed. 

Construction: 

Complete construction and installation at 

Fort Greely and Shemya 

All facilities required for alert at Fort Greely were completed, including the first missile 

field, Readiness and Control Building, Mechanical Electrical Building, and the on-site 

IFICS Data Terminals. The Missile Assembly Building and the interim power plant, 

although not required for LDO, were also completed. 

Sources: MDA (data); GAO (presentation). 

GMD, the centerpiece of the BMDS Block 2004 defensive capability, has 

demonstrated its ability to intercept target warheads in several flight tests 

since 1999. Indeed, the program has achieved five successful intercepts 

out of eight attempts.4

 In addition, according to MDA officials, ground and 

flight tests have demonstrated each step of the engagement sequence—

detect, track, launch/engage, and intercept—collectively, although these 

accomplishments do not verify integrated operation of the GMD capability. 

Although GMD flight tests have demonstrated basic functionality of a 

representative missile defense system using surrogate and prototype 

components, the tests were developmental in nature and relied on 

artificialities to overcome test-range limitations. For example, flight tests 

required the placement of a C-band transponder and Global Positioning 

System instrumentation on the target reentry vehicle. In addition, 

engagement conditions were limited to low closing velocities and short 

interceptor fly-out ranges. Finally, the tests were scripted and did not use 

production-representative hardware and software. 

In its push to field the first eight GMD interceptors by the end of 

December 2004, MDA is assuming both performance and cost risk. As 

noted above, the GMD program emplaced interceptors in silos before 

successfully conducting a flight test utilizing components with the LDO 

configuration. For example, the program did not demonstrate that the kill 

vehicle could operate with the OSC booster prior to placing it in the silo 

for future operational use (even though this booster puts more stress on 

the kill vehicle). If future flight testing identifies problems with fielded 

 4

 The December 2004 flight test, IFT-13C, and the February 2005 flight test, IFT-14, are not 

counted. 

Assessment of 

Element Performance 
Appendix V: Ground-Based Midcourse 

Defense 

Page 86 GAO-05-243 Missile Defense 

interceptors, the need for corrective actions could be costly, but 

confidence would increase as corrections are made and capability is 

understood. 

DOD’s planned investment in the GMD program from program inception in 

1996 through 2011 is approximately $31.6 billion. As broken out in table 23, 

DOD expended $15.3 billion between fiscal years 1996 and 2004,5

 Congress 

appropriated $3.3 billion for fiscal year 2005, and MDA is budgeting about 

$13.0 billion between fiscal years 2006 and 2011 for GMD development, 

procurement, and operations. 

Table 23: GMD Cost 

Dollars in millions of then-year dollars 

 Other Block 2004 Block 2006 Block 2008 Block 2010 Total

FY 1996a – FY 2003 $12,370 $0 $0 $0 $0 $12,370

FY 2004 (Actuals) 0 1,357 1,587 0 0 2,944

FY 2005 (Appropriated) 0 2,756 563 0 0 3,319

FY 2006 0 0 2,224 74 0 2,298

FY 2007 0 0 2,232 281 189 2,702

FY 2008 0 0 331 1,425 717 2,473

FY 2009 0 0 234 1,176 655 2,065

FY 2010 0 0 0 338 1,557 1,895

FY 2011 0 0 0 213 1,350 1,563

FY 1996 – FY 2011 $12,370 $4,113 $7,171 $3,507 $4,468 $31,629

Source: MDA. 

Note: GMD budget as of February 2005. 

a

Program inception (FY 1996). 

GMD’s prime contract consumes the bulk of the program’s budget. The 

contract originally covered Block 2004 and Block 2006 developmental 

activities, not the procurement and fielding of interceptors for the initial 

defensive capability. Therefore, the program significantly modified the 

contract in October 2003. The $823 million modification directed the 

delivery of Block 2004 interceptors 6-20. The program is expected to 

 5

 Includes funds expended to develop the National Missile Defense system. 

Assessment of 

Element Cost 

Prime Contractor Fiscal 

Year 2004 Cost and 

Schedule Performance 
Appendix V: Ground-Based Midcourse 

Defense 

Page 87 GAO-05-243 Missile Defense 

modify the contract again to procure additional interceptors. The added 

cost of these interceptors is already reflected in the planned GMD budget 

and MDA cost goals. 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate prime contractor performance relative to cost and 

schedule. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are usually associated with 

the accomplishment of activities under cost or ahead of schedule, while 

negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. 

The GMD program showed an unfavorable trend in contractor 

performance in fiscal year 2004. According to our analysis, the contractor 

exceeded its budgeted costs during fiscal year 2004 by $219.6 million, 

which equates to 11.6 percent of the contract value over the fiscal year. In 

addition, the contractor fell behind schedule in its work plan. In fiscal year 

2004, the contractor was unable to complete $59.9 million of planned 

work. Figure 8 shows how the contractor’s cumulative cost and schedule 

performance declined during fiscal year 2004. 
Appendix V: Ground-Based Midcourse 

Defense 

Page 88 GAO-05-243 Missile Defense 

Figure 8: GMD Fiscal Year 2004 Cost and Schedule Performance 

Our analysis shows that developmental issues with the interceptor 

continue to be the leading contributor to cost overruns and schedule slips. 

Interceptor-related work cost $204 million more than budgeted in fiscal 

year 2004, with the kill vehicle accounting for approximately 40 percent of 

this overrun. Delays in flight tests IFT-13C and IFT-14 also caused 

unfavorable cost and schedule variances. 

Based on the contractor’s cost and schedule performance in fiscal year 

2004, we estimate that the current GMD contract—which ends in 

September 2007—will overrun its budget by between $593 million and 

$950 million. The contractor, in contrast, estimates a $200 million overrun 

at contract completion. However, as of the end of fiscal year 2004, the 

contractor had already incurred a negative cumulative cost variance of 

approximately $348 million. In order for the prime contractor to complete 

the contract within the established budget, the contractor must not incur 

any additional cost overruns through contract completion and recoup at 

least $148 million. The Defense Contract Management Agency believes 

that the prime contractor is optimistic in projecting that it can limit further 

cost growth and schedule slips. Indeed, the Defense Contract Management 

Dollars in millions

Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.

2003 2004

Cumulative cost variance

Sources: Contractor (data); GAO (analysis).

Cumulative schedule variance 

-350

-300

-250

-200

-150

-100

-50

0
Appendix V: Ground-Based Midcourse 

Defense 

Page 89 GAO-05-243 Missile Defense 

Agency predicts that the contractor will continue to fall behind and be 

unable to recover from past cost growth and schedule slips. 
Fiscal Year 2004 Progress Assessment

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

KEI program activities completed in fiscal year 2004 include the selection of 

Northrop Grumman as prime contractor for KEI development, associated 

planning activities, and experimental work geared toward collecting data of 

boosting missiles. Of significance, the amount appropriated by Congress for 

missile defense in fiscal years 2004 and 2005 did not include the amount of 

funding for KEI that was requested in the President’s Budget. As a result, the 

program delayed its land-based capability from the originally planned Block 

2008 time frame to Block 2012. 

Schedule: In December 2003, MDA awarded Northrop Grumman a $4.6 

billion prime contract to develop and test the KEI element over the next 8 

years. The award follows an 8-month concept design effort between 

competing contractor teams, each of which was awarded $10 million 

contracts to design concepts for KEI. 

Testing: In fiscal year 2004, the KEI program office continued with 

activities designed to reduce technical risks in developing the KEI 

interceptor. In particular, the program office is working on an experiment to 

collect data on boosting missiles, known as the Near Field Infrared 

Experiment. At this early stage of development, however, no significant 

testing of the land-based capability has been conducted by the program 

office. 

Performance: Because this element is still in its infancy, data are not yet 

available to make a performance assessment. However, the program office 

identified areas of high risk that could have an impact on the element’s 

future performance. All risks are associated with interceptor development—

including motor development and plume-to-hardbody handover—stemming 

from the demands required of the boost phase intercept mission. 

Cost: Our analysis of the prime contractor’s cost performance report shows 

that the contractor completed planned work under budget but was slightly 

behind schedule in performing planned activities. Specifically, during fiscal 

year 2004, the contractor could not complete about $1.6 million worth of 

work. The program was unexpectedly tasked to complete trade studies of 

how to incorporate new requirements being imposed by MDA. Due to plans 

to restructure the KEI program, the prime contract’s long-term baseline is no 

longer relevant; a reliable baseline will not be available until 2005. 

The Kinetic Energy Interceptors 

(KEI) element is a new Missile 

Defense Agency (MDA) program in 

its early stage of development. The 

program is building on existing 

missile defense technology to 

develop an interceptor capable of 

destroying long-range ballistic 

missiles during the boost phase of 

flight—the period after launch 

when rocket motors are thrusting. 

KEI also provides the opportunity 

to engage an enemy missile in the 

early-ascent phase, the period after 

booster burnout before warheads 

are released. MDA expects to have 

available a land-based capability in 

the 2012-2013 time frame. 

DOD’s planned investment in the 

KEI program from program 

inception in 2003 through 2011 is 

approximately $6.0 billion. DOD 

expended $192 million between 

fiscal years 2003 and 2004, 

Congress appropriated $267 million 

for fiscal year 2005, and MDA is 

budgeting about $5.5 billion for KEI 

research and development between 

fiscal years 2006 and 2011. 

An Element of the Ballistic Missile Defense System

Appendix VI Summary 

Kinetic Energy Interceptors 
Appendix VI: Kinetic Energy Interceptors 

Page 91 GAO-05-243 Missile Defense 

The Kinetic Energy Interceptors (KEI) element is a missile defense system 

designed to destroy ballistic missiles during the boost phase of flight, the 

period after launch during which the missile’s rocket motors are thrusting. 

KEI is also planned to engage enemy missiles in the early ascent-phase, the 

period after booster burnout before the missile releases warheads and 

countermeasures. Unlike the Airborne Laser element, which utilizes 

directed energy to disable boosting missiles, the KEI element launches 

interceptors to engage and destroy these threats through hit-to-kill 

collisions. 

The KEI program is currently focused on developing a mobile, land-based 

system—to be fully demonstrated by the Block 2012 time frame—to 

protect the United States against long-range ballistic missile attacks.1

 The 

land-based system will be a deployable unit consisting of a command and 

control/battle management unit, mobile launchers, and interceptors. The 

KEI element has no sensor component, such as radars, for detecting and 

tracking boosting missiles. Instead, it will rely on Ballistic Missile Defense 

System (BMDS) sensors, such as space-based infrared sensors and 

forward-deployed radars, for such functions. 

Concurrent with KEI development, the program is proceeding with its 

Near Field Infrared Experiment (NFIRE). The experiment consists of 

launching an experimental satellite in fiscal year 2006 to collect infrared 

imagery of boosting intercontinental ballistic missiles (ICBM). The data it 

collects will support the program’s efforts in developing the software that 

operates the interceptor’s kill vehicle, in addition to enhancing plume2

models and boost-phase simulations. 

In fiscal year 2003, MDA initiated the KEI program as part of its Boost 

Defense Segment. To select a contractor and a concept for the element, 

the KEI program office awarded competitive contracts to teams headed by 

Northrop Grumman and Lockheed Martin. Each contractor was given the 

flexibility to design a system that met only one broad requirement—that 

 1

 In our report, GAO, Missile Defense: Actions Are Needed to Enhance Testing and 

Accountability, GAO-04-409 (Washington, D.C.: Apr. 23, 2004), we stated that the landbased system would be available in the Block 2010 time frame. Because of budget cuts and 

a restructuring of the program, the land-based KEI capability will not be available until 

Block 2012. 

2

 The plume is the hot exhaust gas emanating from the missile during boost phase. 

Appendix VI: Kinetic Energy Interceptors 

Element Description 

History 
Appendix VI: Kinetic Energy Interceptors 

Page 92 GAO-05-243 Missile Defense 

the KEI element be capable of reliably intercepting missiles in their 

boost/ascent phases. MDA did not set cost or schedule requirements or 

specify how the contractors should design the system. 

MDA initially requested funds for the KEI element along with other boostphase defense elements, such as the Airborne Laser, in its Boost Defense 

Segment. However, in fiscal year 2004, MDA budgeted the KEI program 

under a new area known as BMDS Interceptors. 

The KEI element is being developed under MDA’s acquisition approach, 

which delivers system capabilities in 2-year block increments. When the 

KEI concept was first being pursued in fiscal year 2003—during which 

Northrop Grumman and Lockheed Martin were competing for the prime 

contract—the program planned on developing a mobile, land-based system 

to be available in the Block 2008 time frame and expanding it to sea-based 

platforms in Block 2010. However, the amount appropriated by Congress 

for missile defense in fiscal year 2004 did not include the amount of 

funding for KEI that was requested in the President’s Budget. As a result, 

the program delayed completion of its land-based capability into Block 

2010 and delayed the expansion of the sea-based capability into Block 

2012. 

In fiscal year 2004, the KEI program underwent a second re-plan to 

compensate for anticipated fiscal year 2005 funding cuts and the addition 

of new requirements (such as nuclear hardening) imposed by MDA. In the 

re-plan, the land-based capability was combined with the sea-based 

capability of Block 2012, both of which utilize the same interceptor. 

The KEI program has undergone further restructuring, as reflected in the 

fiscal year 2006 President’s Budget submitted in February 2005. Based on 

revised funding levels beyond fiscal year 2005, the program deferred the 

sea-based capability into Block 2014 (2014-2015 time frame), removed the 

international program, and initiated plans for a Space Test Bed. 

The program now expects to develop KEI capabilities as follows: 

• Block 2012—land. MDA envisions that the first-generation land based 

interceptors would be launched from trucks that can be driven up close 

to the border of the threatening nation. An initial land-based capability 

will be declared after the final flight test, Integrated Test 5 (IT-5), is 

conducted by the end of 2013. 

Developmental 

Phases 
Appendix VI: Kinetic Energy Interceptors 

Page 93 GAO-05-243 Missile Defense 

• Block 2014—sea. This block increment expands KEI’s land-based 

capabilities to include the capability to launch KEI interceptors from 

sea-based platforms, such as Aegis cruisers. The sea-based capability 

will use the same interceptor as the land-based capability. 

• Blocks 2012/2014—space test bed. Development of the space test 

bed is planned to be carried out concurrently with the development of 

KEI’s terrestrial (land and sea) capabilities. Consisting of a limited 

constellation of space-based interceptors, the test bed is envisioned to 

provide an additional layer of defense against ICBMs. MDA plans to 

initiate a concept design phase in fiscal year 2008 and conduct spacebased intercept tests in the Block 2012/2014 time frame. 

The KEI program planned to accomplish several activities during fiscal 

year 2004 associated with the land-based capability, with its primary focus 

being the selection of a prime contractor for KEI’s developmental phase. 

In the first quarter of fiscal year 2004, the program selected Northrop 

Grumman as its prime contractor and awarded the company a contract 

valued at $4.6 billion that covers a 98-month performance period. 

The program office also planned to complete design, test, and risk 

reduction efforts in fiscal year 2004. However, budget reductions forced 

Northrop Grumman to delay several of these planned activities until fiscal 

year 2005. The program office originally told the contractor to plan for a 

$90 million budget during fiscal year 2004, but only $47 million was 

available. Because program funding in fiscal year 2004 was much less than 

requested, several design and test activities were postponed into fiscal 

year 2005. For example, the program’s System Requirements Review 

(SRR)—a review during which mission objectives are documented, critical 

components are identified, and program planning is established—was 

postponed into fiscal year 2005. 

While the program completed a number of its planned activities, overall, 

the KEI program progressed much more slowly than anticipated. As noted 

above, Northrop Grumman was forced to re-plan several scheduled 

activities because of reduced funding for the KEI program in fiscal years 

2004 and 2005. Progress made toward achieving scheduled activities is 

summarized in tables 24 through 27. 

A key program accomplishment in fiscal year 2004 was the selection of 

Northrop Grumman as the KEI prime contractor. The KEI program office 

Planned 

Accomplishments for 

Fiscal Year 2004 

Assessment of 

Scheduled Activities 
Appendix VI: Kinetic Energy Interceptors 

Page 94 GAO-05-243 Missile Defense 

employed a unique acquisition strategy in the award of the contract by 

making mission assurance—the successful operation of the element to 

perform its mission—the basis for the amount of the contractor’s profit 

from the performance of the contract. MDA built incentives into the 

contract that require the prime contractor to assure mission assurance 

through a disciplined execution of quality processes. For example, the 

contractor earns an award fee only if flight tests are successful, and the 

percentage of the award fee earned is determined by whether the tests are 

conducted on schedule. The program’s intention is to maximize the 

contractor’s incentives to develop a quality product on schedule and at the 

originally proposed price. 

Table 24: Status of KEI Fiscal Year 2004 Planned Accomplishments—Contract Award and Planning 

Activity Description/Progress assessment 

Award KEI Block 2010 Development and 

Test Contract 

In December 2003, Northrop Grumman was awarded the prime contract for KEI 

development. The cost-plus-award-fee contract is valued at $4.6 billion and covers a 98-

month performance period (Dec. 2003 to Jan. 2012). 

Conduct Integrated Baseline Review (IBR)a The IBR for the Development and Test Contract was completed in March 2004. The 

review concluded with a decision to re-plan work given the funding constraints and to 

have the contractor address the cost of adding additional MDA-imposed requirements, 

such as anti-tampering, nuclear hardening, and insensitive munitions.b

 

Conduct Block 2010 System Requirements 

Review (SRR) 

The SRR is being deferred until April 2005. At that time, program officials will set specific 

requirements for the KEI element based on detailed design trades, risk reduction tests, 

and performance assessments at both the element and component level. 

Conduct “Continuation Review” The fiscal year 2004 Continuation Review—a review to assess whether the program 

should continue—was deferred until the 4th quarter of fiscal year 2005. The program 

office reasoned that the value offered by such a review would be limited with only eight 

months of performance toward a 98-month contract. 

Sources: MDA (data); GAO (presentation). 

a

An integrated baseline review is the program manager’s review of a contractor’s performance 

measurement baseline. The review is conducted by the program manager and the manager’s 

technical staff. It verifies the technical content of the baseline and ensures that contractor personnel 

understand and have been adequately trained to collect earned value management data. The review 

also verifies the accuracy of the related budget and schedules, ensures that risks have been properly 

identified, assesses the contractor’s ability to implement earned value management properly, and 

determines if the work identified by the contractor meets the program’s objectives. 

b

An insensitive munition is one that will not detonate under any condition other than its intended 

mission to destroy a target. 
Appendix VI: Kinetic Energy Interceptors 

Page 95 GAO-05-243 Missile Defense 

Table 25: Status of KEI Fiscal Year 2004 Planned Accomplishments—Design Activities 

Activity Description/Progress assessment 

Develop element simulations and models The Kinetic Energy Interceptors Simulation was delivered by Northrop Grumman to MDA 

in July 2004. The simulation will be used to evaluate the end-to-end performance of the 

KEI element. 

Develop interface requirements between 

KEI and C2BMC 

The KEI program completed an initial draft of the KEI-to-C2BMC Interface Control 

Document in June 2004. 

Finalize acquisition plans for sea-based 

test bed platform 

The KEI program is investigating the use of a CG-47 class vessel to be used as a test 

asset so that a better understanding of the effects of the sea environment on KEI 

operation is gained. A survey is underway to determine the condition of the vessel and 

whether the vessel could accommodate a launcher. 

Initiate Concept of Operations (CONOPS) 

development with the warfighter 

The KEI program provided a draft CONOPS to the Army community for review in May 

2004. Additionally, the program office commissioned the Navy to conduct a CONOPS 

study to determine the feasibility of integrating and operating KEI from cruisers, 

destroyers, and/or submarines. The Navy completed this study in August 2004. 

Initiate launcher control electronic 

assembly development 

As a result of program re-planning, this activity was deferred into fiscal year 2005. 

Design and fabricate Special Test 

Equipment for interceptor design 

verification testing 

As a result of program re-planning, this activity was deferred into fiscal year 2005. 

Establish interceptor manufacturing 

process laboratory 

As a result of program re-planning, this activity was deferred into fiscal year 2005. 

Sources: MDA (data); GAO (presentation). 

Table 26: Status of KEI Fiscal Year 2004 Planned Accomplishments—Key Test Activities 

Activity Description/Progress assessment 

Initiate range planning Northrop Grumman continues to work on facilities as well as environmental and 

commercial support agreements with the ranges. 

Establish target requirements The KEI program office initiated a draft Target System Requirements Document in 

January 2004. Working with Northrop Grumman, KEI will deliver the final version to the 

MDA Configuration Control Board following the SRR in April 2005. 

Establish Developmental Master Test Plan The delay in the SRR resulted in a delay in Developmental Master Test Plan delivery. 

Based on the current schedule, the program expects to deliver the test plan in July 

2005, 90 days after the SRR. 

Static booster motor firing This activity, which would have been the first firing of booster motors for the interceptor, 

was deferred into fiscal year 2005. 

Sources: MDA (data); GAO (presentation). 
Appendix VI: Kinetic Energy Interceptors 

Page 96 GAO-05-243 Missile Defense 

Table 27: Status of KEI Fiscal Year 2004 Planned Accomplishments—Risk Reduction Activities 

Activity Description/Progress assessment 

Continue collection of boost/ascent 

phenomenology data 

The KEI program received high-resolution data sets from several Target of Opportunity 

data collections during fiscal year 2004. These series of data collections provide realistic, 

high-resolution data sets of plumes for a variety of missile launches. 

NFIRE activities MDA directed the program to proceed with the experiment but remove the kill vehicle 

payload from the experiment’s satellite, thereby reducing funding needs for fiscal year 

2005. 

Liquid Divert and Attitude Control System 

demonstration activities 

As a result of program re-planning, this activity was deferred into fiscal year 2005. 

Sources: MDA (data); GAO (presentation). 

At this early stage of element development, data are not available to 

evaluate element performance through the use of technical indicators. 

However, the program office identified areas of high risk3

 that may have an 

impact on the element’s future performance. Table 28 summarizes these 

risks. All risks are associated with interceptor operation for the boostphase intercept mission. 

Table 28: KEI High-Risk Areas 

Technology Risk/Area of concern 

Motor Development According to program officials, there is significant risk in achieving the required booster thrust 

and burn time performance to meet element requirements. 

Plume-to-hardbody handovera The risk pertaining to plume-to-hardbody handover arises from a lack of phenomenology 

data. The program initially planned to utilize a 1-color infrared seeker for the kill vehicle, a 

plan driven by schedule constraints. However, because of program changes resulting in 

more time for element development, the program is proceeding with a 2-color seeker that 

enables the kill vehicle to better differentiate between the plume and hardbody. 

Thrust Vector Control The thrust vector control component of the booster is used to steer the interceptor during its 

boost phase. Program officials rated its development as a high-risk item. The risk stems from 

the need for highly capable steering of the boosting interceptor under stressing scenarios. 

Predicted Impact Point / Divert Trades This risk pertains to maintaining a balanced design trade to enable the kill vehicle to intercept 

the missile given targeting uncertainty. The design trade is between (1) predicted impact 

point accuracy (achieved by the KEI battle manager component) and (2) kill-vehicle divert 

requirements to compensate for targeting errors. 

Sources: MDA (data); GAO (presentation). 

a

Plume-to-hardbody handover refers to the identification of the actual missile from among the plume 

of hot exhaust gas that obscures the body of the boosting missile. 

 3

 High risk means that the program will not meet its objectives without priority 

management actions and risk reduction activities. 

Assessment of 

Element Performance 
Appendix VI: Kinetic Energy Interceptors 

Page 97 GAO-05-243 Missile Defense 

In its July 2003 report on the boost-phase intercept mission,4 the American 

Physical Society indicated that “time line” is a major challenge for boost 

phase defense systems. In particular, boost phase defense against ICBMs 

hinges (in large part) on the length of time an attacking missile is in boost 

phase and on the speed of the defending interceptor. Accordingly, KEI 

program officials recognize the time constraints of the boost phase 

intercept mission and the challenge in developing quicker interceptors—as 

is evident by the first high-risk item of table 28. 

This same report also questions the feasibility of a land-based boost-phase 

intercept concept, especially against large nations. For example, the report 

states that a boost-phase intercept system employing terrestrial-based 

interceptors would generally be ineffective against ICBMs launched from 

the interiors of large countries—those having dimensions greater than 

1,000 kilometers. Nonetheless, the program office contends sufficient 

coverage is possible given adequate numbers and stationing of KEI units. 

Furthermore, sea basing, which offers more options for boost phase 

defense, builds directly upon the investments being made in the landbased capability. 

Finally, a scientific study on boost phase defense commissioned by MDA5

focused on selected issues of high risk. Plume-to-hardbody handover was 

identified as high risk because of a lack of plume phenomenology data 

available for determining the appropriate sensor combination for the 

interceptor. The program office recognizes this challenge, as noted in table 

28. As a result, the KEI program is proceeding with a 2-color seeker, better 

enabling the kill vehicle to differentiate between the plume and hardbody 

of a missile. In addition, the program is sponsoring NFIRE and 

participating in targets of opportunity to collect data of boosting missiles. 

DOD’s planned investment in the KEI program from program inception in 

2003 through 2011 is approximately $6.0 billion. As broken out in table 29, 

DOD expended $192 million between fiscal years 2003 and 2004, Congress 

appropriated $267 million for fiscal year 2005, and MDA is budgeting about 

 4 Report of the American Physical Society Study Group on Boost Phase Defense Intercept 

Systems for National Missile Defense (July 2003). 

5

 Battleson, Kirk, et al., Phase One Engineering Team, Parameters Affecting Boost Phase 

Intercept System (February 2002). 

Assessment of 

Element Cost 
Appendix VI: Kinetic Energy Interceptors 

Page 98 GAO-05-243 Missile Defense 

$5.5 billion for KEI research and development between fiscal years 2006 

and 2011. 

Table 29: KEI Cost 

Dollars in millions of then-year dollars 

 Other Block 2010 Block 2012 Space Test Bed Total

FY 2003a $91.5 $0 $0 $0 $91.5

FY 2004 (Actuals) 0 100.6 0 0 100.6

FY 2005 (Appropriated) 0 0 267.4 0 267.4

FY 2006 0 0 218.7 0 218.7

FY 2007 0 0 420.2 0 420.2

FY 2008 0 0 604.6 45.0 649.6

FY 2009 0 0 961.1 150.0 1,111.1

FY 2010 0 0 1,189.3 248.0 1,437.3

FY 2011 0 0 1,453.5 230.0 1,683.5

FY 2003 – FY 2011 $91.5 $100.6 $5,114.8 $673.0 $5,978.9

Source: MDA. 

Note: KEI budget as of February 2005. 

a

Program inception (FY 2003). 

Table 29 reflects the planned funding profile of the KEI program as 

presented in the President’s Budget for fiscal year 2006, which was 

submitted in February 2005. When compared with the fiscal year 2005 

President’s Budget—submitted last year in February 2004—KEI’s current 

funding level is considerably less. Indeed, last year MDA budgeted 

$7.87 billion for KEI program activities between fiscal years 2004 and 2009. 

The current budget of $2.77 billion over the same time period represents a 

65 percent reduction in program funding. 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate prime contractor performance relative to cost and 

schedule. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are usually associated with 

the accomplishment of activities under cost or ahead of schedule, while 

negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. 

Prime Contractor Cost and 

Schedule Performance 
Appendix VI: Kinetic Energy Interceptors 

Page 99 GAO-05-243 Missile Defense 

The KEI prime contractor performed work in fiscal year 2004 near its 

budgeted costs. From contract inception through August 2004 (which 

covers less than 1 percent of the contract), the contractor completed work 

slightly under budget but was behind schedule in performing about 

$1.6 million worth of planned work. Program officials indicated that the 

negative schedule variance was the result of the contractor delaying 

activities so that it could conduct trade studies on new requirements 

imposed by MDA. For example, the contractor has been directed to 

determine the cost of adding requirements for anti-tampering, nuclear 

hardening, and insensitive munitions. 

Because of plans to restructure the KEI program, the long-term 

performance measurement baseline6

 is no longer relevant. Near-term work 

is still being performed according to plan, but the program suspended 

contractor cost and schedule performance reporting for current work 

efforts after August 2004. As a result, KEI program officials had reduced 

insight into its prime contractor’s work efforts for a portion of fiscal year 

2004. The program office told us that the contractor will resume reporting 

in 2005 after a reliable baseline that reflects the full extent of the 

program’s restructure is available. 

 6

 A performance measurement baseline identifies and defines work tasks, designates and 

assigns organizational responsibilities for each task, schedules the work tasks in 

accordance with established targets, and allocates budget to the scheduled work. 
Fiscal Year 2004 Progress Assessment 

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

The STSS program office accomplished all but one of the principal Block 

2006 activities planned for completion in fiscal year 2004 and initiated work 

planned for completion in fiscal year 2005. Although the prime contractor is 

working to an accelerated delivery schedule, quality and systemsengineering problems with a subcontractor are jeopardizing the early 

delivery of a satellite’s payload. 

Schedule: Program activities completed in fiscal year 2004 include the 

complex tasks of systems integration, testing, and software development. 

The program office completed a critical design review on time. Hardware 

modifications to the satellites were completed, but a heat problem resulting 

from the redesign of the electrical power subsystem caused a delay of three 

months. Software development activities were also completed, and reviews 

to ensure that the design for the STSS ground system could accommodate a 

larger constellation of satellites were conducted. 

Testing: Functional tests on components of the second technology 

demonstration satellite were completed several months late because of 

minor problems with the spacecraft’s computer processor and other 

components. Planned integration tests on the track sensor were not 

completed, and integration testing of an interim version of the software that 

controls the sensors onboard the satellites took longer than planned. 

Although final acceptance testing for the ground software is expected to be 

completed 2 months late, all software development tasks are scheduled to be 

completed two years before satellite launch. 

Performance: Data provided by MDA indicate that two STSS performance 

indicators do not meet their respective requirements—one pertaining to the 

acquisition sensor and a second pertaining to the tracking sensor. Program 

officials stated that degradation in performance is within acceptable limits. 

The program considers the demonstration of STSS functionality more 

critical than verifying the effectiveness of the demonstrator satellites. 

Cost: Our analysis of prime contractor Cost Performance Reports shows 

that the contractor completed work in fiscal year 2004 over budget by about 

$34.6 million. In addition, the contractor could not complete $20.7 million of 

scheduled work (relative to a 6-month accelerated schedule). Quality and 

systems-engineering problems with a subcontractor contributed to the 

overruns in cost and schedule. 

The Space Tracking and 

Surveillance System (STSS) is 

being developed as a constellation 

of low-orbiting satellites to detect 

and track enemy missiles 

throughout all phases of flight. 

Funded and managed by the 

Missile Defense Agency (MDA), 

STSS replaces the Air Force’s 

Space-Based Infrared System-Low 

(SBIRS-Low) program. The STSS 

program office is preparing to 

launch in 2007 two technology 

demonstration satellites that were 

partially built under the SBIRS-Low 

program. MDA intends to assess 

how well these satellites perform 

missile defense surveillance and 

tracking functions and use this 

information to establish 

capabilities and goals for nextgeneration STSS satellites. 

DOD’s planned investment in the 

STSS program from program 

inception in 2002 through 2011 is 

approximately $4.5 billion. DOD 

expended $819 million between 

fiscal years 2002 and 2004, 

Congress appropriated $305 million 

for fiscal year 2005, and MDA is 

budgeting about $3.35 billion for 

element development between 

fiscal years 2006 and 2011. 

MDA’s planned budget for the next 

6 years through 2011 funds 

activities associated with the 

assembly and launch of the two 

demonstrator satellites (Block 

2006), ground segment upgrades 

(Block 2008), and the development 

of an operational constellation of 

satellites (Block 2012). 

An Element of the Ballistic Missile Defense System

Appendix VII Summary 

Space Tracking and Surveillance System 
Appendix VII: Space Tracking and 

Surveillance System 

Page 101 GAO-05-243 Missile Defense 

The Space Tracking and Surveillance System (STSS) is being developed as 

a space-based sensor for the Ballistic Missile Defense System (BMDS). As 

envisioned by the Missile Defense Agency (MDA), the full STSS element 

will be comprised of a constellation of low-orbiting satellites1

 designed to 

detect and track enemy missiles throughout all phases of flight. Each 

satellite making up the program’s “space segment” includes a space 

vehicle and a payload of two infrared sensors—the acquisition sensor to 

watch for the bright plumes (hot exhaust gas) of boosting missiles, and the 

tracking sensor to follow the missile through midcourse and reentry. 

The STSS element also has supporting ground infrastructure, known as the 

“ground segment,” which includes a ground station and mission software 

to support the processing and communication of data from the satellites to 

the BMDS. 

MDA is currently working on the first increment of STSS, known as Block 

2006, which is focused on the preparation and launch of two technology 

demonstration satellites2

 partially built under the Space Based Infrared 

System Low (SBIRS-Low) program. MDA plans to launch these satellites in 

2007, in tandem, in an effort to assess how well they perform surveillance 

and tracking functions. Using data collected by the satellites, MDA will 

determine what capabilities are needed and what goals should be set for 

the next generation of STSS satellites. Any real operational capability, 

however, would not be realized until the next decade. 

Initiated in 1996, SBIRS-Low was the latest in a series of Department of 

Defense (DOD) satellite programs attempting to deliver an operational 

capability for detecting and tracking missiles from low-earth orbits. The 

program experienced cost and schedule growth and performance 

shortfalls. In response, DOD cancelled the accompanying demonstration 

program in 1999 and put the partially constructed satellite equipment into 

storage. 

In October 2000, Congress directed the Air Force to transfer the SBIRSLow program to the Ballistic Missile Defense Organization (MDA’s 

predecessor). When MDA inherited SBIRS-Low, the agency decided to 

 1

 The satellites are expected to orbit the earth at an altitude much less than satellites in 

geo-synchronous orbit. 

2

 The two technology demonstration satellites were part of the Flight Demonstration 

System. 

Appendix VII: Space Tracking and 

Surveillance System 

Element Description 

History 
Appendix VII: Space Tracking and 

Surveillance System 

Page 102 GAO-05-243 Missile Defense 

make use of the equipment that was partially built under the SBIRS-Low 

technology demonstrator program. By completing the assembly of the two 

satellites and launching them in 2007, MDA intends to use the satellites in 

missile defense flight tests. At the end of 2002, the SBIRS-Low program 

was renamed STSS. 

STSS’s development is proceeding in a series of 2-year blocks, namely, 

Blocks 2006, 2008, and beyond. As noted above, Block 2006 involves the 

assembly, integration, testing, and launch of two research and 

development satellites in 2007. The first satellite is expected to be ready in 

September 2005 and the second in early fiscal year 2007. Block 2008 is 

primarily an upgrade of the Block 2006 ground stations, which are used to 

collect and analyze data from the two satellites. As technology matures 

and as lessons are learned from the first satellites, more capable satellites 

will be designed and launched in subsequent blocks.3

The STSS program office intended to accomplish several activities during 

fiscal year 2004 related to the preparation of the two demonstration 

satellites for launch in 2007. Specifically, the program office planned to 

complete the following space- and ground-segment activities: 

• Space Segment. The program planned to complete a design review to 

ensure the STSS design can support the BMDS mission; complete the 

reactivation of hardware components for the second satellite; modify 

two satellite hardware components to enhance spacecraft 

performance; continue to develop the payload software; and start the 

assembly, integration, and testing of satellite components. 

• Ground Segment. The program planned to complete activities to 

ensure that the STSS element has a mature ground system design and 

to continue with the development of software for the ground segment 

of the program. 

The STSS program office completed all but one of the principal Block 2006 

activities planned for fiscal year 2004, including the complex tasks of 

systems integration, testing, and software development. Moreover, the 

 3

 Program content of Block 2010 and beyond is classified. 

Developmental 

Phases 

Planned 

Accomplishments for 

Fiscal Year 2004 

Assessment of 

Scheduled Activities 
Appendix VII: Space Tracking and 

Surveillance System 

Page 103 GAO-05-243 Missile Defense 

program office initiated work planned for completion in fiscal year 2005. 

The contractor has been performing to an accelerated delivery schedule, 

that is, attempting to complete all contracted activities six months earlier 

than required by the contract. However, according to the program office, 

quality and systems-engineering problems at the payload subcontractor 

are jeopardizing the early delivery. Progress made toward achieving the 

space- and ground-segment activities is summarized in tables 30 and 31, 

respectively. 

Table 30: Status of STSS Fiscal Year 2004 Planned Accomplishments—Space Segment 

Activity 

Actual/Planned 

completion date Comments 

Critical Design Review Nov. 2003 

(Completed on schedule) 

The STSS program office conducted a critical design review in the first 

quarter of fiscal year 2004. Sixteen issues were identified during the review, 

and all were satisfied and closed out in March 2004. According to the 

program office, the review was on time and the outcome was successful. 

Reactivation of Satellite 

#2 Hardware 

Oct. 2003 

(Completed 5 months late) 

The second satellite has been completely reactivated, which involved the 

contractor taking 58 hardware components out of storage and running tests 

on them to determine if they still worked. All but one of the components 

passed the appropriate functional tests. Functional tests for the final 

component—the spacecraft computer processor—are being deferred until 

the next higher-level of hardware integration. During the reactivation of this 

hardware, the contractor experienced minor problems with some 

components. Though these issues have since been resolved, they 

contributed to the five-month delay in the reactivation schedule. Overall, 

however, the components survived storage rather well, according to 

program officials. 

Hardware Modifications 

• Electrical Power 

Subsystem 

• Sun Shield 

• Sept. 2003 (Completed 3 

months late) 

• Sept. 2004 (Completed 

on schedule) 

Performance modifications to the Sun Shield were completed as planned, 

but modifications to the Electrical Power Subsystem were completed three 

months later than expected. Although the upgrades to the power system are 

to result in a 200 percent improvement in on-orbit operation, the redesign 

was more complex than originally planned and resulted in the problem of 

removing excess heat produced by the power system. To resolve the heat 

problem, the contractor had to use $2-3 million from its management 

reserve to add air ducts to the spacecraft. 

Payload Software 

• Build 2 

• Closed Loop Testing 

of Sensor Payload 

Software 

• July 2004 (Completed 1 

month late) 

• May 2005 (Ongoing) 

Software builds for the space and ground segments are proceeding as 

planned. The program office characterized software development as being 

the “gem” of the program. Version 2 of the software that controls the sensors 

onboard the satellite was completed in mid-August 2004. Although the 

software team encountered problems while integrating and testing this 

version, the problems were resolved in time to limit the delay to one month 

in building the software. At the end of fiscal year 2004, the contractor had 

completed about half of Version 3 software for the payload data processor. 

A partial build of this version is undergoing integration testing and is 

scheduled for completion in May 2005. According to the program office, the 

software is on schedule to be completed two years before the satellites are 

launched. 
Appendix VII: Space Tracking and 

Surveillance System 

Page 104 GAO-05-243 Missile Defense 

Activity 

Actual/Planned 

completion date Comments 

Assembly, Integration, 

and Testing (AI&T) 

• Track Sensor 

• Spacecraft #1 

• Payload #1 

• Aug. 2004 (Ongoing) 

• July 2004 (Completed 1 

month late) 

• Jan. 2005 (Ongoing) 

The STSS program scheduled several assembly, integration, and testing 

activities for completion in fiscal years 2004 and 2005, which were (or 

expected to be) completed behind schedule. First, the program office had 

planned to assemble, integrate, and test the track sensor for the first satellite 

by the end of August 2004. Second, the program office had planned to 

integrate and test the spacecraft for the first payload by the end of July 

2004, but did not complete the task until mid-August 2004. The objective of 

the tests was to demonstrate the electrical integration of the spacecraft. 

Third, the program office planned to start integrating and testing the payload 

for the first STSS space vehicle. The testing of the payload components was 

expected to be completed by January 2005. However, the program office 

reported that the schedule will be tight and will likely slip by a couple of 

months primarily because of quality and systems engineering problems at 

the payload subcontractor. 

Sources: MDA (data); GAO (presentation). 

Table 31: Status of STSS Fiscal Year 2004 Planned Accomplishments—Ground Segment 

Activity 

Actual/Planned 

completion date Comments 

Mature Ground System 

Design 

Oct. 2003 

(Completed 1 month late) 

Reviews were conducted to ensure that the STSS program has a mature 

ground system design. Because of issues related to paperwork, the reviews 

were completed about a month later than planned. The contractor presented 

a detailed design for the STSS ground system at the November 2003 critical 

design review, and according to the program office, the proposed design is 

robust enough to accommodate a larger STSS constellation in the future. 

Develop Ground 

Software 

Dec. 2005 The STSS ground software development was completed in December 2005. 

The contractor is following a “build a little” and “test a little” approach in 

order to catch defects early in the process before they are costly to fix, 

according to program officials. 

Sources: MDA (data); GAO (presentation). 

The Block 2006 STSS satellites will be used as technology demonstrators 

(rather than for operational missions) and have an in-orbit life of 18-24 

months. To keep costs within budget, the program considers the 

demonstration of STSS functionality more critical than the demonstration 

of STSS effectiveness in performing the functions. MDA decided to fly 

these demonstration satellites before developing and producing them in 

larger numbers to see how components and subsystems work together as 

a system in a realistic environment before a greater investment of 

resources is made, thereby reducing program risk. As noted above, each 

satellite contains two infrared sensors—an acquisition sensor to detect a 

missile launch and a tracking sensor to track the missile through space 

once it has been detected. The tracking sensor would continue tracking 

Assessment of 

Element Performance 
Appendix VII: Space Tracking and 

Surveillance System 

Page 105 GAO-05-243 Missile Defense 

the missile after the acquisition sensor has completed its detection 

function. The ability of one satellite to detect or “acquire” a missile launch 

and to transmit this data to its internal tracking sensor has not yet been 

demonstrated in space, although DOD has had successes in demonstrating 

some related on-orbit capabilities through experimental satellites. 

Even with a focus on system functionality over effectiveness, the prime 

contractor continues to track 12 system level technical parameters that are 

critical to the performance of the sensors onboard the Block 2006 

satellites. Data provided to us by MDA indicate that 2 of the 12 indicators 

do not meet their respective requirements. The details on these issues, 

including the impact on STSS performance, are classified. However, 

shortfalls in performance involve both sensors. The ability of the 

acquisition sensors to properly detect a missile launch is falling below 

performance margins and the accuracy of the tracking sensor is getting 

close to the margin. Program officials stated that the degradation in 

acquisition sensor performance is within allowable limits and steps are 

being taken to improve tracking sensor performance. 

DOD’s planned investment in the STSS program from program inception in 

2002 through 2011 is approximately $4.5 billion.4

 As broken out in table 32, 

DOD expended $819 million between fiscal years 2002 and 2004, Congress 

appropriated $302 million for fiscal year 2005, and MDA is budgeting about 

$3.35 billion between fiscal years 2006 and 2011 for element development. 

MDA’s planned budget for the next 6 years through 2011 funds activities 

associated with the assembly and launch of the two demonstrator 

satellites (Block 2006), ground segment upgrades (Block 2008), and the 

development of an operational constellation of satellites (Block 2012). 

 4

 Prior to 2002, the SBIRS-Low program invested $686 million to develop the demonstration 

satellites that are now part of the STSS program. 

Assessment of 

Element Cost 
Appendix VII: Space Tracking and 

Surveillance System 

Page 106 GAO-05-243 Missile Defense 

Table 32: STSS Cost 

Dollars in millions of then-year dollars 

 Other Block 2006 Block 2008 Block 2010 Block 2012 Total

FY 2002a – FY 2003 $544 $0 $0 $0 $0 $544

FY 2004 (Actuals) 0 263 0 12 0 275

FY 2005 (Appropriated) 0 254 0 48 0 302

FY 2006 0 231 0 0 1 232

FY 2007 0 208 45 0 167 420

FY 2008 0 65 29 0 440 534

FY 2009 0 11 24 0 579 614

FY 2010 0 8 14 0 737 759

FY 2011 0 7 14 0 773 794

FY 2002 – FY 2011 $544 $1,046 $127 $60 $2,697 $4,474

Source: MDA. 

Note: STSS budget as of February 2005. Numbers may not add due to rounding. 

a

Program inception (FY 2002). 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate prime contractor performance relative to cost and 

schedule. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are usually associated with 

the accomplishment of activities under cost or ahead of schedule, while 

negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. 

Figure 9 shows the STSS contractor’s cost and schedule performance 

during fiscal year 2004. According to Cost Performance Reports, the work 

completed during this time cost more than budgeted and was behind 

schedule relative to a 6-month accelerated schedule. Specifically, during 

fiscal year 2004, the work cost about $34.6 million more than expected, 

and the contractor could not complete approximately $20.7 million of 

scheduled work. 

Prime Contractor Cost and 

Schedule Performance 
Appendix VII: Space Tracking and 

Surveillance System 

Page 107 GAO-05-243 Missile Defense 

Figure 9: STSS Fiscal Year 2004 Cost and Schedule Performance 

The erosion of cumulative cost variance throughout fiscal year 2004 was 

largely attributed to cost overruns by the payload subcontractor, whose 

costs comprise about one-third of the total STSS contract. During the past 

year, the subcontractor has had a number of quality and systemsengineering problems that contributed to overruns in cost and schedule. 

These problems are largely the result of unclear systems engineering 

procedures and the subcontractor’s lack of experience with space 

hardware. In response to these problems, the prime contractor conducted 

a thorough review of the subcontractor’s quality assurance program for 

the assembly, integration, and testing of satellite components. In addition, 

the subcontractor added technicians who have more experience working 

with space hardware and brought in systems engineers to work with the 

technicians. Despite these issues, the program office still expects the 

prime contractor to complete the contract early and with minimal cost 

overruns. 

The cumulative schedule variance also eroded during fiscal year 2004. The 

delay in the delivery of the payload is the major driver of the unfavorable 

schedule variance. In addition to these drivers, performance upgrades to 

Dollars in millions

-40

-35

-30

-25

-20

-15

-10

-5

0

Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.

2003 2004

Cumulative cost variance

Sources: Contractor (data); GAO (analysis).

Cumulative schedule variance 
Appendix VII: Space Tracking and 

Surveillance System 

Page 108 GAO-05-243 Missile Defense 

the Electrical Power Subsystem were completed three months later than 

planned due to a heat-removal problem. A factor complicating our analysis 

of schedule variance is that the contractor implemented a performance 

measurement baseline5

 that reflects a six-month accelerated schedule. 

This means the contractor might be performing work on a schedule that 

would allow it to complete all the work by the end of the contract, but 

schedule performance data would show that work was falling behind 

schedule. 

Our assessment of fiscal year 2004 activities did not identify any evidence 

that the STSS program would be unable to launch the two demonstration 

satellites in 2007. Although the payload subcontractor experienced 

schedule delays and cost overruns arising from quality issues, the program 

office is still confident that the satellites will be delivered early. In 

addition, the reactivation of components from storage went better than 

anticipated and, accordingly, the program office reduced the risk level 

associated with hardware and software furnished by the government. 

Furthermore, the prime contractor is making progress on the parts 

obsolescence issue. For example, the prime contractor located most 

replacement parts and is assembling a database to track them. 

 5

 A performance measurement baseline identifies and defines work tasks, designates and 

assigns organizational responsibilities for each task, schedules the work tasks in 

accordance with established targets, and allocates budget to the scheduled work. 
Page 109 GAO-05-243 Missile Defense 
Fiscal Year 2004 Progress Assessment

United States Government Accountability Office

Program Description

Source: Missile Defense Agency

The bulk of fiscal year 2004 activities focused on developing and groundtesting THAAD components in preparation for the first round of flight tests 

in mid-fiscal year 2005. At the end of fiscal year 2004 with 61 percent of the 

THAAD prime contract completed, THAAD’s prime contractor was under 

budget and ahead of schedule. However, the contractor’s favorable cost and 

schedule performance eroded somewhat during fiscal year 2004. Our 

analysis indicates that problems with missile development were a major 

driver of the deteriorating performance. 

Schedule: During fiscal year 2004, the THAAD program accomplished key 

activities ahead, on, or slightly behind schedule. The program conducted the 

missile-component design readiness review ahead of schedule, completed 

radar assembly on schedule, but was behind schedule on missile delivery for 

the element’s first flight test, Flight Test 1. In addition, the program 

successfully conducted ground tests in preparation for the initial flight test. 

Testing: Two explosions in the summer of 2003 at a subcontractor’s 

propellant mixing facility impacted THAAD’s fiscal year 2004 funding, 

delayed the start of flight testing, and led to a revision of the flight test 

program.

Performance: The program office told us that key indicators show that 

THAAD is on track to meet operational performance goals. However, an 

assessment of THAAD’s effectiveness remains uncertain until the program 

conducts flight tests with updated hardware and software. Data from flight 

testing are needed to “anchor” simulations of THAAD’s performance and to 

more confidently predict the element’s effectiveness. 

Cost: Our analysis of prime contractor cost performance reports shows that 

the contractor’s favorable cost and schedule performance eroded somewhat 

during fiscal year 2004. The declining schedule performance was largely 

driven by unfavorable performance in the missile component—caused by 

two separate explosions at a subcontractor’s propellant mixing facility—but 

offset by other THAAD components with favorable performance. Overall, the

prime contractor is under budget and ahead of schedule. 

The Terminal High Altitude Area 

Defense (THAAD) element is a 

ground-based missile defense 

system designed to protect 

deployed military forces and 

civilian population centers from 

short- and medium-range ballistic 

missile attacks. THAAD engages 

ballistic missiles during the latemidcourse and terminal phases of 

flight, that is, before or after the 

warhead reenters the atmosphere. 

The THAAD program expects to 

field an initial capability consisting 

of 24 interceptors during the 2009 

time frame. 

DOD’s planned investment in the 

THAAD program from program 

inception in 1992 through 2011 is 

approximately $12.3 billion. DOD 

expended $7.2 billion between 

fiscal years 1992 and 2004, 

Congress appropriated $760 million 

for fiscal year 2005, and MDA is 

budgeting about $4.3 billion for 

THAAD development and 

procurement between fiscal years 

2006 and 2011. 

An Element of the Ballistic Missile Defense System

Appendix VIII Summary 

Terminal High Altitude Area Defense 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 111 GAO-05-243 Missile Defense 

The Terminal High Altitude Area Defense (THAAD) element1 is being 

developed as a ground-based missile defense system to protect forwarddeployed military forces, population centers, and civilian assets from 

short- and medium-range ballistic missile attacks. THAAD provides the 

opportunity to engage ballistic missiles—outside or inside the earth’s 

atmosphere—not destroyed earlier in the boost or midcourse phases of 

flight by other elements of the Ballistic Missile Defense System (BMDS). 

A THAAD unit consists of a command, control, battle management, and 

communications (C2/BMC) component for controlling and executing a 

defensive mission, truck-mounted launchers, ground-based radar, 

interceptor missiles, and ground support equipment. The ground-based 

radar is a solid-state, phased-array, X-band radar that performs search, 

track, discrimination, and other fire-control functions. The THAAD missile 

is comprised of a kill vehicle mounted atop a single-stage booster and is 

designed to destroy enemy warheads through hit-to-kill collisions. 

The THAAD program entered the Program Definition and Risk Reduction 

phase of acquisition in 1992 but was plagued by missed intercepts in its 

first six attempts. As noted in our 1999 report,2

 THAAD’s failures were 

caused by a combination of a compressed test schedule and quality 

control problems. The Director, Operational Test and Evaluation 

(DOT&E), reported in his Fiscal Year 1999 Annual Report to the Congress 

that the sense of urgency to deploy a prototype system resulted in an 

overly optimistic development schedule. 

The THAAD program conducted two successful intercept attempts in 1999 

after devoting substantial time to pretest activities. The program then 

transitioned to the product development phase3

 of acquisition, in which 

program activities shifted from technology development and 

demonstration to missile redesign and engineering. The Department of 

 1

 In early 2004, MDA changed the name of the THAAD element from “Theater High Altitude 

Area Defense” to “Terminal High Altitude Area Defense.” 

2

 GAO, THAAD Restructure Addresses Problems but Limits Early Capability, 

GAO/NSIAD-99-142 (Washington, D.C.: June 30, 1999). 

3

 “Product development” is referred to by DOD as the “System Development and 

Demonstration” phase of acquisition and formerly as “Engineering and Manufacturing 

Development.” 

Appendix VIII: Terminal High Altitude Area 

Defense 

Element Description 

History 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 112 GAO-05-243 Missile Defense 

Defense (DOD) transferred the THAAD program from the U.S. Army to the 

Ballistic Missile Defense Organization (now MDA) on October 1, 2001. 

The THAAD program is pursuing its goals within the MDA block approach, 

which incrementally increases the element’s capability against the ballistic 

missile threat. We reported4

 last year that THAAD’s development was 

structured around a Block 2004-2006-2008 program, with program funding 

aligned accordingly. However, with the submission of the fiscal year 2006 

President’s Budget in February 2005, MDA implemented a new BMDS 

baseline approach for the THAAD program. Under this new program, 

THAAD development is structured around a Block 2006-2008-2010 

program, with funding broken out by Block 2006/2008 and Block 2010. 

• Block 2006. Block 2006 incorporates the activities of the former Block 

2004 program. The Block 2006 THAAD program is expected to 

demonstrate an engagement capability against short- and mediumrange ballistic missiles above the atmosphere. 

• Block 2008. By the end of Block 2008, the THAAD element will have 

completed additional flight tests (including attempts employing a salvofiring doctrine), demonstrated an engagement capability inside and 

above the atmosphere, and be configured to accept data from other 

BMDS sensors for launching its interceptor missiles. THAAD’s 

integration with the BMDS is expected to increase its defended area by 

more than a factor of three. 

The THAAD program includes a “fire unit” for delivery in fiscal year 

2009. Operated by the Army, it will consist of a radar, a C2/BMC unit, 3 

launchers, 24 missiles, and equipment for support, maintenance and 

training. The Army has “signed on” to receive the equipment and is 

planning to allocate nearly 100 soldiers for training and operations. 

• Block 2010. The THAAD program plans to enhance the element’s 

ability to interoperate with other elements and sensors of the BMDS. 

By engaging threats with external BMDS data, THAAD is expected to 

increase its defended area by more than a factor of ten. 

 4

 GAO, Missile Defense: Actions Are Needed to Enhance Testing and Accountability, 

GAO-04-409 (Washington, D.C.: Apr. 23, 2004). 

Developmental 

Phases 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 113 GAO-05-243 Missile Defense 

The bulk of the fiscal year 2004 activities focused on developing and 

ground-testing THAAD components in preparation for the first round of 

flight tests in mid-fiscal year 2005. We grouped activities into three 

categories: (1) design, (2) build, and (3) integration and test. Progress on 

key activities scheduled for fiscal year 2004 is discussed below. 

During fiscal year 2004, the THAAD program accomplished key activities 

ahead, on, or slightly behind schedule. As examples, the program 

conducted the missile-component design readiness review ahead of 

schedule, completed radar assembly on schedule, but delivery of the 

missile for Flight Test 1 slipped into fiscal year 2005. Specifics regarding 

progress in achieving these and other key scheduled activities are 

summarized below in tables 33 through 35. 

Table 33: Status of THAAD Fiscal Year 2004 Planned Accomplishments—Design Activities 

Activity Description/Progress assessment 

Missile-component 

design readiness review 

Planned: 1Q FY2004a

Completed: 4Q FY2003 

This event was accomplished ahead of schedule. The missile component design readiness 

review demonstrated that the missile-component design, including internal and external 

interfaces, met all applicable design requirements with acceptable risk. 

THAAD element 

design readiness review 

Planned: 1Q FY2004 

Completed: 1Q FY2004 

This event was accomplished on schedule. The stakeholders agreed during the design 

readiness review that they understood the THAAD system and its final integrated design, 

and that the design met BMDS objectives. Stakeholders included the THAAD Project 

Office, supporting contractors, representatives of the Army Air Defense School, and MDA. 

Radar 

block process validation 

Planned: 2Q FY2004 

Completed: 2Q FY2004 

This event was accomplished on schedule. The radar block process validation examined 

the contractor’s operations to determine adequacy of production planning, processes, and 

controls; the existence of suitable production facilities; and the radar’s design stability. 

C2/BMC 

block process validation 

Planned: 4Q FY2004 

Completed: Under revision 

The C2/BMC block process validation was delayed to address defective governmentfurnished C2/BMC shelters and was somewhat behind schedule at the end of fiscal year 

2004. Significant progress was made toward its completion, but the remaining work is 

planned to carry over into fiscal year 2005. The purpose of the validation is to assess the 

contractor’s ability to manufacture C2/BMC production representative hardware to support 

future fielding decisions. 

Sources: MDA (data); GAO (presentation). 

a

We use the notation “1Q FY2004” to mean the first quarter of fiscal year 2004 and an identical format 

for other time periods. 

Planned 

Accomplishments for 

Fiscal Year 2004 

Assessment of 

Scheduled Activities 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 114 GAO-05-243 Missile Defense 

Table 34: Status of THAAD Fiscal Year 2004 Planned Accomplishments—Build Activities 

Activity Description/Progress assessment 

Radar assembly 

Planned: 1Q FY2004 

Completed: 1Q FY2004 

This event was accomplished on schedule. The radar was assembled in the first quarter of 

fiscal year 2004. 

Missile delivery for 

Flight Test 1 (FT-01) 

Planned: 4Q FY2004 

Scheduled: 2Q FY2005 

Delivery of the FT-01 missile to White Sands Missile Range (WSMR)a was delayed to 

respond to a new program schedule that addresses funding shortfalls and two separate 

explosions at a subcontractor’s propellant mixing facility. Delivery is now scheduled for the 

second quarter of fiscal year 2005. 

WSMR activation 

Planned: 2Q FY2004 

Completed: 2Q FY2004 

This event was accomplished on schedule. All THAAD facilities at WSMR were activated 

by March 2004 and are preparing for FT-01. 

WSMR safety qualification tests 

Planned: 3Q FY2004 

Completed: 4Q FY2004 

Although this event was completed 1 quarter behind schedule, there was no impact on 

FT-01’s schedule. 

Sources: MDA (data); GAO (presentation). 

a

WSMR is a U.S. Army missile test range in New Mexico. Because of test range limitations at WSMR, 

flight testing will be conducted at the Pacific Missile Range Facility, a U.S. Navy missile test range in 

Kauai, Hawaii, beginning with FTT-06-1 (formerly FT-05) in the fourth quarter of fiscal year 2006. 

Table 35: Status of THAAD Fiscal Year 2004 Planned Accomplishments—Integration and Test Activities 

Activity Description/Progress assessment 

Kill vehicle destruct test 

Planned: 1Q FY 2004 

Completed: 1Q FY2004 

This event was accomplished on schedule. Testing of the kill vehicle flight termination 

system met objectives. 

Integrate launch and test support equipment 

at SILa

Planned: 2Q FY2004 

Completed: 3Q FY2004 

Because of two separate explosions at a subcontractor’s propellant mixing facility in the 

summer of 2003, this event was accomplished about one quarter behind schedule. The 

launch and test support equipment completed its system checkout in June 2004. The 

THAAD program reports that the launch and test support equipment is on schedule to 

support the revised schedule of FT-01 planned for the third quarter of fiscal year 2005. 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 115 GAO-05-243 Missile Defense 

Activity Description/Progress assessment 

Kill vehicle qualification tests 

Planned: 4Q FY2004 

Completed: 4Q FY2004 

Kill vehicle qualification testing in preparation for FT-01 was completed in September 

2004. 

Sources: MDA (data); GAO (presentation). 

a

The System Integration Lab (SIL) refers to ground facilities at Lockheed Martin Space Systems 

Company, Sunnyvale, California. 

The THAAD flight-test program consists of 15 flight-test events divided 

among Blocks 2006 and 2008. Two explosions in the summer of 2003 at a 

subcontractor’s propellant mixing facility impacted THAAD’s fiscal year 

2004 funding, delayed the start of flight testing, and led to revisions of the 

flight test plans. 

The first set of flight tests have been delayed 3-5 months. The first flight 

test, referred to as a control test flight (CTF), is a missile-only, nonintercept test that focuses on how the missile operates under high 

endoatmospheric environmental conditions. The second flight test is an 

integrated system test with a “virtual target” to demonstrate system 

performance under conditions comparable to the next flight test (first 

flight test utilizing a real target). The third flight test is a seeker 

characterization flight (SCF), which ensures proper functioning of the 

seeker. This SCF is also a non-intercept test, but the seeker will 

demonstrate the ability to view a real target. The fourth flight test, FT-04, 

is the first intercept attempt with a configuration—target and engagement 

geometry—comparable to that used in flight tests conducted during the 

Program Definition and Risk Reduction phase of development. Table 36 

summarizes the first six flight test events, including current and prior flight 

test dates with their objectives. 

Compared to test plans of fiscal year 2004, the THAAD program deferred 

two test events. A second control test flight conducted at WSMR—

formerly FT-02—and an intercept attempt against a threat-representative 

target at the Pacific Missile Range Facility (PMRF)—formerly FT-05—have 

been deferred to a later time. 

THAAD Flight Test 

Program Delayed 

3-5 Months 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 116 GAO-05-243 Missile Defense 

Table 36: Planned THAAD Flight Testing 

Flight test event Date Objectives 

FT-01 (CTF) at WSMR 

Non-intercept flight test 

(missile only / no target) 

Current: 

3Q FY2005 

Previously: 

1Q FY2005 

• Validate missile performance in a high-endoatmospheric flight 

environment 

• Verify missile integration with WSMR 

FT-02 at WSMR 

Integrated system test – virtual 

target 

(New test) 

Current: 

4Q FY2005 

Previously: 

N/A 

• Integrated system test dry run (virtual target) 

• Demonstrate missile launch and control for conditions comparable 

to FT-03 

FT-03 (SCF) at WSMR 

Non-intercept flight test 

Current: 

1Q FY2006 

Previously: 

3Q FY2005 

• Characterize seeker in flight against a high-endoatmospheric unitary 

target 

• Verify element integration with WSMR 

FT-04 at WSMR 

First intercept flight test 

Current: 

2Q FY2006 

Previously: 

4Q FY2005 

• Demonstrate exoatmospheric discrimination and intercept of a 

separating target 

• Demonstrate lethality assessment of recovered debris 

FT-05 (CTF) at WSMR 

Non-intercept flight test 

(Formerly FT-02) 

Current: 

2Q FY2006 

Previously: 

2Q FY2005 

• Characterize missile performance in a low-endoatmospheric flight 

environment 

• Assesses effects of heat on seeker window 

• Tests performance in a high dynamic pressure fly-out 

FTT-06-1 at PMRF 

Second intercept flight test 

(Formerly FT-05) 

Current: 

4Q FY2006 

Previously: 

1Q FY2006 

• Demonstrate exoatmospheric aimpoint selection and intercept 

against a non-separating liquid-fueled target 

• Demonstrate integration with PMRF 

Sources: MDA (data); GAO (presentation). 

Note: Test schedule as of December 2004. 

Any assessment of THAAD’s effectiveness is uncertain at this time. The 

program office told us that key indicators show that THAAD is on track to 

meet operational performance goals. However, the THAAD program has 

not conducted any recent flight tests and, as a result, performance 

Assessment of 

Element Performance 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 117 GAO-05-243 Missile Defense 

indicators5 used to gauge progress toward meeting performance objectives 

are based only on engineering analysis and ground testing. Until data 

collected during flight tests are used to “anchor” simulations of THAAD 

operation, the program cannot be confident that current indicators 

accurately predict THAAD’s performance in actual combat conditions. 

DOD’s planned investment in the THAAD program from program inception 

in 1992 through 2011 is approximately $12.3 billion. As broken out in table 

37, DOD expended $7.2 billion between fiscal years 1992 and 2004, 

Congress appropriated $760 million for fiscal year 2005, and MDA is 

budgeting about $4.3 billion for THAAD development and procurement 

between fiscal years 2006 and 2011. 

Table 37: THAAD Cost 

Dollars in millions of then-year dollars 

 Other

Block 

2006/2008 

Block

 2010 Total

FY 1992a – FY 2003 $6,500 $0 $0 $6,500

FY 2004 (Actuals) 0 717.9 0 717.9

FY 2005 (Appropriated) 0 759.7 0 759.7

FY 2006 0 1,046.1 0 1,046.1

FY 2007 0 931.0 0 931.0

FY 2008 0 779.4 0 779.4

FY 2009 0 353.0 168.0 521.0

FY 2010 0 0 635.1 635.1

FY 2011 0 0 395.0 395.0

FY 1992 – FY 2011 $6,500 $4,587.1 $1,198.1 $12,285.2

Source: MDA. 

Note: THAAD budget as of February 2005. MDA implemented a new BMDS baseline approach that 

redirected funding from Block 2004 and 2006 to Block 2006/2008. 

a

Program inception (FY 1992). 

 5

 The THAAD program monitors numerous performance indicators as part of its 

management process. For example, element effectiveness, as measured by the probability 

of a successful kill, is one such indicator. 

Assessment of 

Element Cost 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 118 GAO-05-243 Missile Defense 

The government routinely uses contractor Cost Performance Reports to 

independently evaluate the prime contractor’s performance relative to cost 

and schedule. Generally, the reports detail deviations in cost and schedule 

relative to expectations established under the contract. Contractors refer 

to deviations as “variances.” Positive variances are usually associated with 

the accomplishment of activities under cost or ahead of schedule, while 

negative variances are often associated with the accomplishment of 

activities over cost or behind schedule. At the end of fiscal year 2004, the 

THAAD prime contractor was carrying a positive cumulative cost and 

schedule variance of $3.9 million and $14.7, respectively.6

 That is, overall, 

the prime contractor was under budget and ahead of schedule. 

As figure 10 shows, declining cumulative schedule variance during the 

latter portion of fiscal year 2004 was eroding overall performance. The 

decline in the positive schedule variance was largely caused by problems 

with the missile component, which were the result of two explosions at a 

subcontractor’s propellant mixing facility. In January 2004, these incidents 

and efforts to reestablish booster production caused MDA to revise 

THAAD’s baseline.7

 The new baseline recognizes the inevitable delay to 

initial flight testing and all supporting tasks.8

 It also provides a new 

starting point for measuring the prime contractor’s schedule performance. 

Therefore, even though the prime contractor completed $8.1 million worth 

above that scheduled for fiscal year 2004 (that is, incurred a positive 

schedule variance of $8.1 million), the variance would have been less 

favorable had the contractor not established a new baseline. 

 6

 The cost and schedule variance incurred during fiscal year 2004 was $0.673 million and 

$8.1 million, respectively. 

7

 A performance measurement baseline identifies and defines work tasks, designates and 

assigns organizational responsibilities for each task, schedules the work tasks in 

accordance with established targets, and allocates budget to the scheduled work. 

8

 The explosions caused the program to seek an alternate source. According to the program 

office’s current risk assessment, “source replacements have the potential for delaying 

booster delivery during the fight test program and into production.” 

Prime Contractor Fiscal 

Year 2004 Cost and 

Schedule Performance 
Appendix VIII: Terminal High Altitude Area 

Defense 

Page 119 GAO-05-243 Missile Defense 

Figure 10: THAAD Fiscal Year 2004 Cost and Schedule Performance 

The favorable cumulative cost variance incurred during fiscal year 2004 

masks problems with the cost variance incurred by the missile component, 

which was unfavorable for the year. Major factors contributing to the 

missile’s unfavorable cost variance include explosions at a subcontractor’s 

facility used to mix missile propellant and the cost of efforts to reestablish 

booster production, as noted above; delays in activating a test facility at 

the Air Force Research Laboratory; and re-design efforts on a faulty valve 

thrust vector assembly. Favorable cost variances in other THAAD areas, 

such as the radar segment, offset the missile’s unfavorable cost variance. 

Dollars in millions

-10

-5

0

5

10

15

20

25

30

35

40

Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept.

2003 2004

Cumulative cost variance

Sources: Contractor (data); GAO (analysis).

Cumulative schedule variance 
Appendix IX: Information on the Army’s 

Missile Defense Programs 

Page 120 GAO-05-243 Missile Defense 

The Army is responsible for funding and managing two missile defense 

programs. The programs—which ultimately will be fielded as a single 

missile defense system—include the Patriot missile defense system 

including its newest missile variant, the Patriot Advanced Capability-3 

(PAC-3), and the Medium Extended Air Defense System (MEADS), which 

is currently under development. The Army intends to incrementally 

replace fielded Patriot components with more-capable MEADS 

components as they become available. The resulting system is expected to 

better protect deployed U.S. forces and critical assets from short- and 

medium-range tactical ballistic missile attacks. The Army’s Lower Tier 

Project Office manages Patriot and MEADS development, procurement, 

and fielding. 

Now operational with the U.S. Army, Patriot with its PAC-3 missiles is the 

latest evolution of the Patriot air and missile defense system. The Patriot 

system has four basic components: (1) ground-based radar to detect and 

track targets; (2) engagement control station to provide command, control, 

and communications; (3) launcher; and (4) interceptor missiles. Compared 

with earlier versions of the Patriot missile, PAC-3 provides improved 

performance against short- and medium-range tactical ballistic missiles, 

cruise missiles, and aircraft. The PAC-3 missile is in production and 

successfully achieved initial fielding1

 in September 2001. 

MEADS is an international co-development program between the United 

States, Germany, and Italy with a cost share of 58, 25, and 17 percent, 

respectively. MEADS expands upon Patriot capability with four new 

components: (1) a launcher; (2) battle management, command, control, 

communications, computer and intelligence (BMC4I) equipment; (3) a 

surveillance radar; and (4) a multi-function fire control radar. MEADS is 

expected to offer significant improvements in tactical mobility and 

strategic deployability over existing Patriot units. In addition, MEADS is 

designed to be interoperable with other airborne and ground-based 

sensors and utilize a netted architecture to provide a robust, 360-degree 

defense against cruise missiles, unmanned-aerial-vehicles, tactical air to 

surface missiles, rotary-wing and fixed-wing threats, and very short and 

medium range theater ballistic missiles. 

 1

 Initial fielding, sometimes called First Unit Equipped, refers to the date a system and 

support elements are issued to the designated unit and specified training has been 

accomplished. 

Appendix IX: Information on the Army’s 

Missile Defense Programs 

Background 
Appendix IX: Information on the Army’s 

Missile Defense Programs 

Page 121 GAO-05-243 Missile Defense 

In 2003, the Under Secretary of Defense for Acquisition, Technology, and 

Logistics approved plans for combining management, development, and 

fielding of the Patriot and MEADS programs.2

 The approach calls for 

incremental fielding and early insertion of MEADS components within 

existing Patriot batteries rather than delivering MEADS as a single system. 

The Army uses the term “Combined Aggregate Program (CAP)” to refer to 

the transitional activities leading up to full fielding of the MEADS and 

replacement of Patriot components. CAP also includes an enhanced PAC-3 

missile—funded 100 percent by the United States—called the Missile 

Segment Enhancement (MSE). The MSE missile is intended to operate at 

higher altitudes and longer ranges than existing PAC-3 missiles. 

The plan calls for MEADS components to be inserted into Patriot 

battalions in three time-phased increments, as follows: 

• Increment one. Scheduled for initial fielding in fiscal year 2009, 

increment one consists of the insertion of the MEADS BMC4I to begin 

replacing the Patriot engagement control station component and 

associated equipment. This increment is considered the highest 

acquisition priority because it (a) integrates with existing sensors to 

provide 360-degree coverage to counter cruise missiles, and 

(b) supports targeting by using data from external sensors, which is 

referred to as “engage on remote.” 

• Increment two. Scheduled for initial fielding in fiscal year 2011, 

increment two consists of the insertion of the MEADS launcher to 

begin replacing the Patriot launcher. This increment is expected to 

enhance system mobility and be capable of firing either the existing 

PAC-3 missile or the new MSE missile. The MSE missile is scheduled 

for initial fielding in 2011. It does not replace the PAC-3 missile but, 

rather, supplements fielded inventory. 

• Increment three. Scheduled for initial fielding in fiscal year 2015, 

increment three consists of the insertion of the MEADS Ultra High 

Frequency surveillance radar and the X-band multifunction fire control 

radar to replace the Patriot C-band radars. These radars are expected 

to provide (a) 360-degree coverage for defense against cruise missiles 

and fire control to engage low-altitude, stressing targets; and 

 2 Evolution from Patriot to MEADS—Acquisition Decision Memorandum, dated 

August 12, 2003. 

Combined Aggregate 

Program 
Appendix IX: Information on the Army’s 

Missile Defense Programs 

Page 122 GAO-05-243 Missile Defense 

(b) surveillance and fire control for high-value asset defense against 

short-range ballistic missiles. 

The overall Patriot/MEADS CAP is scheduled for initial fielding in 2015 

when increment three is available. MEADS production is scheduled to 

continue through fiscal year 2028. The 2015 fielding date, approved by the 

Under Secretary for Defense, represents a three-year delay from the 

fielding date planned in the previous MEADS program. According to a 

Lower Tier Project Office spokesperson, constraints in developmental 

funding caused the delay in initial fielding of MEADS components. 

Specifically, out-year Research, Development, Test and Evaluation 

(RDT&E) funding was insufficient to field MEADS in fiscal year 2012. 

The Army’s Lower Tier Project Office estimates that the life-cycle cost for 

the United States’ portion of the Patriot/MEADS CAP program—which 

includes PAC-3 and MEADS-component development, procurement, and 

operations and support (O&S) costs—will be $150.6 billion through 

approximately fiscal year 2048. Of this amount: 

• $109 billion (72.4 percent) is for O&S. 

• $31.9 billion (21.2 percent) is for procurement. 

• $9.7 billion (6.4 percent) is for RDT&E. 

Operations and support costs are a large proportion of the total cost 

largely because of the length of time a fielded unit is supported. Although 

production is scheduled to end in fiscal year 2028, these newest units are 

expected to be in the field for another 20 years. 

Table 38 summarizes the funding requested by the U.S. Army to fund 

development and missile procurement of the Patriot/MEADS Combined 

Aggregate Program over the Future Years Defense Plan (fiscal years 2006-

2011). The requested funding supports the procurement of 108 PAC-3 

missiles per year. 

Patriot/MEADS CAP 

Funding 
Appendix IX: Information on the Army’s 

Missile Defense Programs 

Page 123 GAO-05-243 Missile Defense 

Table 38: Patriot/MEADS CAP Planned Costs 

Dollars in millions of then-year dollars 

 RDT&E Missile procurement

FY 2006 $288.8 $489.7

FY 2007 326.4 494.8

FY 2008 454.5 466.0

FY 2009 510.7 471.8

FY 2010 510.4 N/A

FY 2011 490.4 N/A

Source: Department of the Army. 

Note: Budget as of February 2005. 
Appendix X: Scope and Methodology 

Page 124 GAO-05-243 Missile Defense 

The accomplishment of Missile Defense Agency (MDA) program goals is 

ultimately achieved through the efforts of individual Ballistic Missile 

Defense System (BMDS) elements. Therefore, we based our assessment 

on the progress made in fiscal year 2004 by those seven elements that 

(1) are under the management of MDA and (2) are being developed as part 

of a block capability. The elements we reviewed accounted for 72 percent 

of MDA’s fiscal year 2004 research and development budget. We compared 

each element’s completed activities, test results, demonstrated 

performance, and prime contractor cost and schedule performance in 

fiscal year 2004 with those planned for the year. We also completed an 

abbreviated evaluation of an eighth BMDS element, the U.S. Army’s 

Combined Aggregate Program, which consists of Patriot and the Medium 

Extended Air Defense System. 

Many activities completed in fiscal year 2004 by the various element 

programs pertained to the completion of Limited Defensive Operations, 

which is an integral part of the Block 2004 goals. To assess progress 

toward schedule goals—that is, program activities including test events 

scheduled for completion in fiscal year 2004—we examined each 

element’s prime contractor Cost Performance Reports, Defense Contract 

Management Agency’s analyses of these reports (if available), quarterly 

reviews of element progress (known as System Element Reviews), and 

other agency documents to determine whether key activities were 

accomplished as planned. We also developed a data collection instrument, 

which was submitted to MDA, to gather detailed information on completed 

program activities, including tests, design reviews, prime contracts, and 

estimates of element performance. 

We assessed MDA’s fiscal year 2004 cost performance by separately 

reviewing the cost performance of each BMDS element’s prime contractor. 

We used this methodology because MDA allocates a large percentage of its 

budget to fund prime contractors that develop system elements. To make 

these assessments, we applied established earned value management 

techniques to data captured in contractor Cost Performance Reports. 

Results were presented in graphical form to determine trends. We also 

used established earned value management formulas to project the likely 

costs of the contracts at completion. 

To assess MDA’s progress toward its performance goals, we analyzed data 

provided by MDA on the Ground-based Midcourse Defense, Aegis Ballistic 

Missile Defense, and Command, Control, Battle Management, and 

Communications elements—the elements that comprise the Block 2004 

defensive capability. We supplemented this information by holding 

Appendix X: Scope and Methodology 
Appendix X: Scope and Methodology 

Page 125 GAO-05-243 Missile Defense 

discussions with, and attending overview briefings presented by, various 

program office officials. Furthermore, we interviewed officials from the 

office of the Director, Operational Test and Evaluation, within the 

Department of Defense (DOD) to learn more about their assessment of the 

operational capability of the initial BMDS. Finally, we met with officials 

from U.S. Strategic Command to discuss the initial capability’s military 

utility from the warfighter’s perspective. 

During our review, we observed that MDA is expected to face increasing 

funding risks—arising from sources both within and outside DOD—in the 

years ahead as MDA attempts to enhance and field its missile defense 

capabilities. To examine this issue further, we reviewed life-cycle cost 

documentation from the U.S. Army Lower Tier Project Office, our report 

on total ownership costs,1

 a Congressional Budget Office report,2 and MDA 

documentation on the agency’s plans for development and fielding. 

We also observed inconsistencies in how MDA is implementing its block 

approach. To gain insight into this issue, we examined element-level 

documents and answers to a data collection instrument that we generated 

to extract specific information on planned deliveries of fielded assets. We 

also examined MDA’s Statement of Goals, budget statements for fiscal 

years 2004 and 2005, and other documents provided by MDA, such as 

Missile Defense Plan II. 

To ensure that MDA-generated data used in our assessment are reliable, 

we evaluated the agency’s internal management control processes. We 

discussed these processes extensively with MDA upper management. In 

addition, we confirmed the accuracy of MDA-generated data with multiple 

sources within MDA and, when possible, with independent experts. To 

assess the validity and reliability of prime contractors’ Earned Value 

Management systems and reports, we analyzed audit reports prepared by 

the Defense Contract Audit Agency. Finally, we assessed MDA’s internal 

accounting and administrative management controls by reviewing MDA’s 

Federal Managers’ Financial Integrity Report for Fiscal Years 2003 and 

2004. 

 1

 GAO, Best Practices: Setting Requirements Differently Could Reduce Weapon Systems’ 

Total Ownership Costs, GAO-03-57 (Washington, D.C.: Feb. 11, 2003). 

2

 Congressional Budget Office, The Budget and Economic Outlook: An Update 

(Washington, D.C.: Sept. 2004). 
Appendix X: Scope and Methodology 

Page 126 GAO-05-243 Missile Defense 

Our work was performed primarily at MDA headquarters in Arlington, 

Virginia. At this location, we met with officials from the Kinetic Energy 

Interceptors Program Office; Aegis Ballistic Missile Defense Program 

Office; Airborne Laser Program Office; Command, Control, Battle 

Management, and Communications Program Office; and Ground-based 

Midcourse Defense Program Office. In addition, we met with officials from 

the Space Tracking and Surveillance System Program Office, Los Angeles, 

California; Terminal High Altitude Area Defense Project Office, Huntsville, 

Alabama; and the U.S. Army Lower Tier Program Office, Huntsville, 

Alabama. We also interviewed officials from the office of the Director, 

Operational Test and Evaluation, Arlington, Virginia; U.S. Strategic 

Command, Omaha, Nebraska; and the Joint Theater Air Missile Defense 

Organization, Arlington, Virginia. 

We conducted our review from May 2004 through February 2005 in 

accordance with generally accepted government auditing standards. 
Appendix XI: GAO Contact and Staff 

Acknowledgments 

Page 127 GAO-05-243 Missile Defense 

Barbara Haynes (256) 922-7500 

In addition to the individual named above, Tony Beckham, Ivy Hübler, 

Stan Lipscomb, LaTonya Miller, Karen Richey, Adam Vodraska, Jonathan 

Watkins, and Randy Zounes (Analyst-in-Charge) made key contributions to 

this report. 

Appendix XI: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Acknowledgments 

(120360) 
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