GAO 

United States Government Accountability Office

Report to Congressional Committees

DEFENSE 

ACQUISITIONS 

Missile Defense 

Transition Provides 

Opportunity to 

Strengthen 

Acquisition Approach 

February 2010 

GAO-10-311 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2010

DEFENSE ACQUISITIONS

Missile Defense Transition Provides Opportunity to 

Strengthen Acquisition Approach 

Highlights of GAO-10-311, a report to 

congressional committees 

By law, GAO is directed to assess 

the annual progress the Missile 

Defense Agency (MDA) made in 

developing and fielding the Ballistic 

Missile Defense System (BMDS). 

GAO also assessed MDA’s progress 

toward improving accountability 

and transparency in agency 

operations, management processes, 

and its acquisition strategy. To 

accomplish this, GAO reviewed 

asset fielding schedules, test plans 

and reports, as well as pertinent 

sections of Department of Defense 

(DOD) policy to compare MDA’s 

current level of accountability with 

that of other DOD programs. GAO’s 

fiscal year 2009 assessment of 

MDA’s cost, schedule, and 

performance progress is more 

limited than previous assessments 

because MDA removed key 

components of schedule and 

performance goals from its annual 

report of goals. In addition, though 

it had committed to, MDA did not 

report total cost estimates in 2009. 

What GAO Recommends

GAO makes a number of 

recommendations for MDA to 

increase transparency and 

accountability through more 

thorough and consistent reporting 

of baselines and variances to those 

baselines. In addition, GAO 

recommended that MDA apply 

more knowledge-based approaches 

to its new acquisition initiatives 

and report these initiatives and 

their associated commitments to 

Congress. In response, DOD fully 

concurred with 9 of the 10 

recommendations and partially 

concurred with 1. 

Fiscal year 2009 was an unprecedented year of transition for MDA as it 

experienced its first change of administration, its third MDA Director, shifts in 

plans for missile defense in Europe as well as a shift in focus for technology 

development from intercepting missiles during the boost phase to the early 

intercept phase. Such changes present new challenges for MDA but also 

opportunities to strengthen acquisition approaches. 

Progress

MDA achieved several accomplishments. For example, MDA revised its 

testing approach to better align tests with modeling and simulation needs and 

undertook a new targets development effort to resolve longstanding problems 

supplying sufficient and reliable targets. The agency also demonstrated 

increased levels of performance for some elements through flight and ground 

testing. Fiscal year 2009 testing indicates an increased level of 

interoperability among multiple elements, improving both system-level 

performance and advancing the BMDS models and simulations needed to 

predict performance. In addition, the agency delivered 83 percent of the assets 

it planned to deliver by the end of fiscal year 2009. 

Challenges

While there was progress, all BMDS elements had delays in conducting tests, 

were unable to accomplish all planned objectives, and experienced 

performance challenges. Poor target performance continued to be a problem, 

causing several test delays and leaving several test objectives unfulfilled. The 

test problems also precluded MDA from gathering key knowledge and 

affected development of advanced algorithms and homeland defense. These 

test problems continued to affect the models and simulations used to assess 

the overall performance of the BMDS. Consequently, comprehensive 

assessments of its capabilities and limitations are still not possible. MDA also 

redefined its schedule baseline, eliminating goals for delivering integrated 

capabilities so we were not able to assess progress in this area. Despite these 

problems, MDA proceeded with production and fielding of assets. 

Transparency, Accountability, and Oversight 

In 2009, the significant adjustments MDA made to its acquisition approach—

terminating the block structure; reducing, eliminating, or not reporting key 

baselines; and terminating its capability declaration process—and 

adjustments to the material reported to Congress reduced the transparency 

and accountability MDA had begun to build. However, MDA is beginning to 

implement several initiatives—including the adoption of key principles of 

DOD acquisition regulations—that could improve transparency and 

accountability and lay the foundation needed for oversight. If these initiatives 

are implemented in accordance with knowledge-based acquisition principles, 

an opportunity exits to improve the BMDS acquisition by ensuring MDA 

programs begin with realistic, transparent plans and baselines. While these 

initial steps hold promise, they will take time to fully implement and once 

implemented they will need to be sustained over time and consistently 

applied. 

View GAO-10-311 or key components.

For more information, contact Cristina 

Chaplain at (202) 512-4841 or 

chaplainc@gao.gov. 
Page i GAO-10-311 

Contents 

Letter 1

Background 4 

Significant Adjustments Made to Missile Defense in Fiscal Year 

2009 6 

Progress Made in Fiscal Year 2009 8 

Significant Challenges Remain in Developing the BMDS 18 

MDA Lacks Controls and Mechanisms Needed to Establish 

Transparency, Accountability, and Oversight 35 

Conclusions 43 

Recommendations for Executive Action 44 

Agency Comments and Our Evaluation 46 

Appendix I Comments from the Department of Defense 49 

Appendix II Scope and Methodology 53 

Appendix III GAO Contact and Staff Acknowledgments 56 

Tables 

Table 1: MDA’s BMDS Elements 5 

Table 2: Fiscal Year 2009 BMDS Test Achievements 12 

Table 3: BMDS Deliveries and Total Fielded Assets as of September 

30, 2009 17 

Table 4: BMDS Test and Target Issues 20 

Table 5: Status of Fiscal Year 2008 Director’s Knowledge Points to 

Be Achieved through Tests 25 

Table 6: MDA Commitments to Improve Transparency, 

Accountability, and Oversight 36 

 Missile Defense Acquisitions
Abbreviations 

ABL Airborne Laser 

Aegis BMD Aegis Ballistic Missile Defense 

AN/TPY-2 Army Navy/Transportable Radar Surveillance - Model 2 

BMDS Ballistic Missile Defense System 

C2BMC Command, Control, Battle Management, and 

 Communications 

DOD Department of Defense 

GBI Ground-based Interceptor 

GMD Ground-based Midcourse Defense 

MDA Missile Defense Agency 

MDEB Missile Defense Executive Board 

SM-3 Standard Missile-3 

STSS Space Tracking and Surveillance System 

THAAD Terminal High Altitude Area Defense 

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Page ii GAO-10-311 Missile Defense Acquisitions 
Page 1 GAO-10-311 

 

United States Government Accountability Office

Washington, DC 20548 

 

February 25, 2010 

Congressional Committees 

Fiscal year 2009 was an unprecedented year of transition for the Missile 

Defense Agency (MDA) as it experienced its first change of administration, 

its third MDA Director, its third Ballistic Missile Defense System (BMDS) 

acquisition strategy, and a reduction of approximately $1 billion from its 

annual budget request. Established in 2002 and directed by the President 

to “deploy a set of initial missile defense capabilities beginning in 2004,” 

MDA has developed and deployed missile defense capabilities while 

struggling to provide the transparency and accountability necessary for 

the Department of Defense’s (DOD) largest single acquisition program—

spending between approximately $7 billion and $9.5 billion per year. 

Since 2002, Congress has directed GAO to assess MDA’s annual fiscal year 

cost, schedule, testing, and performance progress in developing the 

BMDS.1

 We have delivered assessments of MDA’s progress covering fiscal 

years 2003 through 2008 and are currently mandated to continue delivering 

assessments through fiscal year 2013.2

 According to this mandate we are 

required to assess MDA’s fiscal year progress against the annual goals it is 

required to report to Congress each February. However, as agreed with 

your staff, this year we are providing a more limited assessment of MDA’s 

1

 National Defense Authorization Act for Fiscal Year 2002, Pub. L. No. 107-107, § 232(g) 

(2001); Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, Pub. L. 

No. 108-375, § 233 (2004); National Defense Authorization Act for Fiscal Year 2006, Pub. L. 

No. 109-163, § 232 (2006); John Warner National Defense Authorization Act for Fiscal Year 

2007, Pub. L. No. 109-364, § 224 (2006); and National Defense Authorization Act for Fiscal 

Year 2008, Pub. L. No. 110-181, § 225 (2008). 

2

 We did not assess MDA’s progress in fiscal year 2002 as the agency did not establish goals 

for that fiscal year. We delivered the following reports for fiscal years 2003 through 2007: 

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

GAO-04-409 (Washington, D.C.: Apr. 23, 2004); Defense Acquisitions: Status of Ballistic 

Missile Defense Program in 2004, GAO-05-243 (Washington, D.C.: Mar. 31, 2005); Defense 

Acquisitions: Missile Defense Agency Fields Initial Capability but Falls Short of 

Original Goals, GAO-06-327 (Washington, D.C.: Mar. 15, 2006); Defense Acquisitions: 

Missile Defense Acquisition Strategy Generates Results but Delivers Less at a Higher 

Cost, GAO-07-387 (Washington, D.C.: Mar. 15, 2007); Defense Acquisitions: Progress Made 

in Fielding Missile Defense, but Program Is Short of Meeting Goals, GAO-08-448

(Washington, D.C.: Mar. 14, 2008); and Defense Acquisitions: Production and Fielding of 

Missile Defense Components Continue with Less Testing and Validation Than Planned, 

GAO-09-338 (Washington, D.C.: Mar. 13, 2009). 

 Missile Defense Acquisitions
progress than we have in the past because MDA removed key components 

of the schedule and performance goals it had previously reported from its 

annual report of goals. MDA also did not report the total acquisition cost 

goals that it had committed to include in this year’s report, nor did it 

report top-level test goals. In addition, the agency did not report its annual 

goals until August 2009—only a month and a half before the end of fiscal 

year 2009. 

This report provides an assessment of MDA’s cost, schedule, testing, and 

performance progress in fiscal year 2009 as well as problems and 

challenges in these areas. We also report on the progress MDA made in 

improving accountability and transparency over the past year. Although 

prior reports have included an assessment of MDA’s cost progress on its 

prime contracts, we will report on this analysis in more detail in a separate 

report. In addition, given the number, scope and breadth of changes made 

to missile defense this year, we discuss those changes as well as their 

implications on acquisitions. 

In order to provide some measure of MDA’s progress, given the late and 

limited goals established by MDA, we had to determine alternative 

comparison points and we discussed these with MDA and our 

congressional clients. We assessed MDA’s progress in testing by 

comparing the tests conducted against the goals as presented in its 

October 2008 Integrated Master Test Plan and the annually submitted 

budget justification documents. In terms of performance, we assessed the 

capabilities demonstrated through the tests. For schedule, we compared 

progress against fiscal year 2008 goals, budget justification material, and 

the September 2008 execution master fielding schedule. 

To assess progress during fiscal year 2009, we examined the 

accomplishments of eight BMDS elements that MDA is currently 

developing and fielding: the Aegis Ballistic Missile Defense (Aegis BMD); 

Airborne Laser (ABL); BMDS Sensors; Command, Control, Battle 

Management, and Communications (C2BMC); Ground-based Midcourse 

Defense (GMD); Space Tracking and Surveillance System (STSS); Targets 

and Countermeasures; and Terminal High Altitude Area Defense 

Page 2 GAO-10-311 Missile Defense Acquisitions 
(THAAD).3

 These elements collectively account for about 76 percent of 

MDA’s research and development budget.4

 We also examined MDA’s 

Fiscal Year 2009 BMDS Accountability Report, Program Execution 

Reviews, test plans and reports, and production plans. We interviewed 

officials within program offices and within MDA functional directorat

such as the Directorate for Advanced Technology. In addition, we 

discussed the elements’ test programs and results with the BMDS 

Operational Test Agency and DOD’s Office of the Director, Operational 

es, 

Test and Evaluation. 

 of 

ition, 

nse 

es. Our scope and methodology is 

discussed in more detail in appendix II. 

, 

 

To follow up on the progress MDA made to improve transparency and 

accountability, we held discussions with officials in MDA’s Directorate

Business Operations to discuss MDA’s block structure termination. In 

addition, we reviewed pertinent DOD policies to compare MDA’s current 

level of accountability with that of other DOD programs. We interviewed 

officials from the Office of the Under Secretary of Defense for Acquis

Technology and Logistics to discuss its role in conducting quarterly 

execution reviews as well as the oversight role of the Missile Defe

Executive Board. Lastly, we met with officials involved in MDA’s 

Integration Synchronization Group to discuss how the agency is managing 

and reporting against its internal baselin

We conducted this performance audit from April 2009 to February 2010 in 

accordance with generally accepted government auditing standards. Those

standards require that we plan and perform the audit to obtain sufficient

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence

3

 In GAO-09-338, we reported on two more elements, the Kinetic Energy Interceptor and the 

Multiple Kill Vehicle, which were canceled by the agency during fiscal year 2009. This 

report does not contain an assessment of these two elements. The BMDS also includes a 

ninth element and tenth element, the Patriot Advanced Capability-3 and the European 

Component. The Patriot Advanced Capability-3 has been transferred to the Army for 

production, operation, and sustainment. The European Component is being developed to 

defend the homeland, allies, and deployed forces in Europe. This report does not evaluate 

the Patriot Advanced Capability-3 because its initial development is complete and is now 

being managed by the Army. 

4

 The total research, development, test and evaluation amount used in the computation 

does not include the Multiple Kill Vehicle or Kinetic Energy Interceptor elements’ budgeted 

funds. These elements requested funding in fiscal year 2009, but were also canceled during 

the fiscal year and are not elements we are reviewing in this report. 

Page 3 GAO-10-311 Missile Defense Acquisitions 
obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

MDA’s BMDS is being designed to counter ballistic missiles of all rang

short, medium, intermediate, and long. Since ballistic missiles have 

different ranges, speeds, sizes, and performance characteristics, MD

employing an integrated and layered architecture to provide multiple 

opportunities to destroy ballistic missiles before they can reach their 

targets. The system’s architecture includes networked space-based 

sensors as well as ground- and sea-based radars, ground- and sea-based 

es—

A is 

interceptor missiles, and a command and control, battle management, and 

nterceptor missiles. 

Infrared sensors aboard early-warning satellites detect the hot plume 

or sea-based radars are directed to 

track the various objects released from the missile and, if so designed, 

established, an interceptor—consisting of a kill vehicle mounted atop a 

. 

, 

ead. With a combined closing 

speed of approximately 10 kilometers per second (22,000 miles per 

 “hit 

d 

llision between the 

interceptor missile and the inbound ballistic missile, or using the 

Background 

communications network providing the warfighter with the necessary 

communication links to the sensors and i

A possible engagement scenario to defend against an intercontinental 

ballistic missile would occur as follows: 

•

of a missile launch and alert the command authority of a possible 

attack. 

• Upon receiving the alert, landto identify the warhead from among spent rocket motors, 

countermeasures, and debris. 

• When the trajectory of the missile’s warhead has been adequately 

booster—is launched to engage the threat. The interceptor boosts 

itself toward a predicted intercept point and releases the kill vehicle

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

identify, and steer itself into the warh

hour), the warhead is destroyed above the atmosphere through a

to kill” collision with the kill vehicle. 

Some interceptors use sensors to steer themselves into the inboun

ballistic missile. Inside the atmosphere, weapon systems kill the ballistic

missile using a range of mechanisms, such as direct co

combined effects of a blast fragmentation warhead (heat, pressure, and 

shrapnel) in cases where a direct hit does not occur. 

Page 4 GAO-10-311 Missile Defense Acquisitions 
In the August 2009 BMDS Accountability Report, MDA presents the BMD

performance from the perspectives of homeland defense and 

regional/theater capabilities. Homeland defense uses the capabilities of 

Ground-based Interceptors (GBI), Aegis BMD assets, and BMDS radar

against the threat from intercontinental and intermediate-range ballist

missiles, while regional and theater defense use Aegis BMD Standard 

S 

s 

ic 

Missile-3 (SM-3) and THAAD interceptors with mobile radars against 

Table 1 provides a brief description of eight BMDS elements that are 

currently under development by MDA. 

MDS Elements 

threats from medium-range missiles and short-range ballistic missiles.

Table 1: MDA’s B

BMDS element Missile defense role 

Aegis Ballistic Missile Defense 

.

Aegis BMD is a ship-based missile defense system designed to destroy shortto intermediate-range ballistic missiles during the midcourse phase of their 

flight; its capability has been expanded to include the terminal phase of flight 

using the Standard Missile-2 Block IV missile. Aegis BMD’s mission is twofold: 

to provide an engagement capability against regional ballistic missile threats 

that is mobile, global, and deployable and can destroy ballistic missiles both 

above and within the atmosphere, as well as a forward deployed combatant to 

search, detect and track ballistic missiles of all ranges and transmit track data 

to the BMDS, performing a strategic role in homeland defense. To date, 19 

ships have been upgraded for the Aegis BMD mission. MDA is planning to 

procure 329 Aegis BMD SM-3 missiles from fiscal years 2004 through 2018

Airborne Laser 

ons in 2010 where the ABL will attempt to shoot 

ABL is an air-based missile defense system designed to destroy all classes of 

ballistic missiles during the boost phase of their flight. ABL employs a highenergy 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 

series of system demonstrati

down a ballistic missile. The current program is not expected to result in an

operational system. 

BMDS Sensors ude 

pgrades to existing 

MDA is developing various stand-alone radars for fielding. These incl

forward-based sensors; mobile, sea-based sensors; and u

early-warning radars. The BMDS uses these sensors to identify and 

continuously track ballistic missiles in all phases of flight. 

Command, Control, Battle Management and ement of the BMDS. Its role is to provide deliberate 

Communications agement 

C2BMC is the integrating el

planning, situational awareness, sensor management, and battle man

for the integrated BMDS. 

Ground-based Midcourse Defense 

ts 

g on emplacing 30 

operational interceptors at Fort Greely, Alaska, and Vandenberg Air Force 

Base, California, by the end of fiscal year 2010. 

GMD is a ground-based missile defense system designed to destroy 

intercontinental ballistic missiles during the midcourse phase of their flight. I

mission is to protect the U.S. homeland against ballistic missile attacks from

North Korea and the Middle East. MDA is plannin

Page 5 GAO-10-311 Missile Defense Acquisitions 
BMDS element Missile defense role 

Space Tracking and Surveillance System In fiscal year 2009, MDA successfully launched two low-orbit demonstration 

satellites. The program will pursue a testing schedule to demonstrate STSS’s 

capabilities, including missile detection and tracking throughout all phases of 

flight and intercept assessment in the context of the BMDS. Lessons learned 

from the STSS satellites will inform the design of a Precision Tracking Space 

Sensor experimental prototype and associated command and control battle 

management, communication and fire control networks. 

Targets and Countermeasures MDA maintains a series of targets used in BMDS flight tests to present 

authentic threat scenarios. The targets are designed to encompass the full 

spectrum of threat missile ranges and capabilities. Under its Flexible Target 

Family, MDA is currently developing one long-range 72-inch target, the LV-2, 

which can be modified in various ways to represent evolving threats. The first 

launch of the LV-2 target is scheduled for 2010. 

Terminal High Altitude Area Defense THAAD is a ground-based missile defense system designed to destroy shortand medium-range 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 THAAD Battery, which includes 24 missiles, in 

2010 and a second battery in 2011. 

Source: MDA data. 

The new administration proposed significant changes to the BMDS 

program in 2009 including program terminations and changes to some of 

the BMDS elements we reported on in the past, as well as changes to plans 

for missile defense in Europe. Administration proposals culminated in 

reductions of approximately $1 billion from MDA’s budget request for 

fiscal year 2010. In the spring of 2009, the Secretary of Defense 

recommended termination of the Multiple Kill Vehicle element. Originally 

designed as an optional warhead for all midcourse interceptors, MDA 

terminated the Multiple Kill Vehicle element because of feasibility issues 

raised about this technology, which was still in its early stages of 

development, as well as a decision to refocus MDA’s resources on new 

technologies aimed at early intercept of ballistic missiles.5

 MDA also 

terminated its Kinetic Energy Interceptor element because of technical 

issues, its incompatibility with operational infrastructures, and delays 

during development. It was originally designed as a mobile land-based 

missile defense system to destroy medium, intermediate, and 

intercontinental ballistic missiles during the boost and midcourse phases 

of their flight. The ABL program was also significantly affected by the 

Significant 

Adjustments Made to 

Missile Defense in 

Fiscal Year 2009 

 

5

 The term early intercept refers to an engagement early in the battlespace that could 

optimize the ability to execute a shoot-look-shoot tactic, may force less effective 

deployment of countermeasures, could minimize the potential impact of debris, and could 

potentially reduce the number of interceptors required to defeat a raid of threat missiles. 

Page 6 GAO-10-311 Missile Defense Acquisitions 
Secretary of Defense’s proposal to designate it as a technology program 

and cancel the plans for the purchase of a second aircraft that would have 

provided an operational capability. In addition, MDA requested increased 

funding for the Aegis BMD and THAAD programs for fiscal year 2010 

following administration recommendations. MDA plans to use these funds 

to move both elements toward meeting full funding policies, to increase 

production for Aegis BMD and THAAD interceptors, to increase the 

interceptor production rate and number of THAAD batteries, and to 

increase the number of Aegis BMD ships. 

MDA is also responding to the new administration’s shift in its approach to 

European missile defense. In September 2009, DOD altered its approach to 

European defense, which originally focused on GBIs from the GMD 

element and a large fixed radar as well as transportable X-Band radars, 

and is now focusing on providing defenses against long-range threats to 

the United States and short-, medium-, and intermediate-range Iranian 

threats to Europe. This new “Phased, Adaptive Approach” consists 

primarily of Aegis BMD sea-based and land-based systems and 

interceptors, as well as various sensors to be deployed over time as the 

various capabilities are matured. According to DOD, this new approach 

offers a number of improvements over the previous architecture, such as 

providing missile defenses sooner with greater flexibility to meet evolving 

threats, providing more opportunities to involve close allies, and delivering 

greater capability to defend against a large number of threat missiles. 

In addition, during fiscal year 2009, MDA transitioned to a new Director 

and the agency’s development effort was rebalanced to focus more on 

regional/theater missile defense. This rebalancing included shifting 

technology development efforts from boost-phase intercept technologies 

to early intercept technologies (or ascent phase). MDA officials state that 

because early intercept technology initiates intercept as early as possible 

to execute a shoot-look-shoot tactic and defeat a threat before 

countermeasures are deployed, it will ultimately reduce the number of 

interceptors required to defeat a raid of threat missiles and save on the 

costs of maintaining a significant number of expensive interceptors to 

destroy advanced countermeasures in a later phase of a threat missile’s 

flight. According to the MDA Director, this technology will force the 

deployment of countermeasures early in flight where they are less 

effective. 

In June 2009, MDA also began to change its acquisition management 

strategy. From its inception in 2002 to December 2007, MDA managed the 

acquisition of missile defense capabilities by organizing the development 

Page 7 GAO-10-311 Missile Defense Acquisitions 
effort into 2-year increments known as blocks. Each block was intended to 

provide the BMDS with capabilities that enhanced the development and 

overall performance of the system. The first 2-year block—Block 2004—

fielded a limited initial capability that included early versions of the GMD, 

Aegis BMD, Patriot Advanced Capability-3, and C2BMC elements as well 

as various sensors. The agency’s second 2-year block—Block 2006—

culminated on December 31, 2007, and fielded additional BMDS assets. On 

December 7, 2007, according to MDA in response to recommendations 

from GAO, MDA’s Director announced a new acquisition management 

strategy to better communicate its plans and goals to Congress. The 

agency’s new approach was based on fielding capabilities that address 

particular threats as opposed to a biennial time period. This approach 

divided fielding capabilities into five blocks.6

The capabilities-based five-block approach included several positive 

changes, including the commitment by DOD to establish total acquisition 

costs and unit cost for selected block assets, including in a block only 

those elements or components that will be fielded during the block, and 

abandoning the practice of deferring work from one block to another. 

MDA was still transitioning to this new capabilities-based block approach 

when the MDA Director terminated it in June 2009—a year and a half after 

it was created. According to MDA, the agency terminated the capabilitybased block structure to address the explanatory statement accompanying 

the Department of Defense Appropriations Act, 2009, which stated that 

MDA’s “justification materials should no longer be presented in the Block 

format, but rather by fiscal year for each activity within the program 

element.” The agency has decided that it will manage the BMDS as a single 

integrated program and is in the process of determining how it will 

implement changes to its acquisition management strategy. 

In fiscal year 2009, MDA achieved several noteworthy accomplishments. 

For example, MDA revised its testing approach to better align tests with 

modeling and simulation needs and is undertaking a new targets 

development effort to resolve long-standing problems supplying sufficient 

Progress Made in 

Fiscal Year 2009 

 

6

 The five blocks were as follows: Block 1.0: Defend U.S. from Limited North Korean LongRange Threats; Block 2.0: Defend Allies and Deployed Forces from Short- to Medium-Range 

Threats in One Region/Theater; Block 3.0: Expand Defense of the U.S. to Include Limited 

Iranian Long-Range Threats; Block 4.0: Defend Allies and Deployed Forces in Europe from 

Limited Iranian Long-Range Threats; and Block 5.0: Expand Defense of Allies and Deployed 

Forces from Short- to Intermediate-Range Threats in Two Regions/Theaters. 

Page 8 GAO-10-311 Missile Defense Acquisitions 
and reliable targets. The agency also demonstrated increased levels of 

performance for some of its BMDS elements through flight and ground 

testing. MDA testing achievements during the year indicate an increased 

level of interoperability among multiple elements, improving both systemlevel performance and advancing the validation of BMDS models and 

simulations needed to predict performance. In addition, the agency 

delivered most of the assets as planned by the end of fiscal year 2009. 

MDA Revised Its Testing 

Approach 

In fiscal year 2009, MDA revised its testing approach in response to GAO 

and DOD concerns. In March 2009 we reported that MDA’s Integrated 

Master Test Plan—its test baseline—was not effective for management 

and oversight because it was revised frequently, only extended through the 

following fiscal year and was not well integrated with other key aspects of 

testing such as target acquisitions.7

 Most of the annual revisions to the test 

baseline were occurring either because MDA changed the substance of 

tests, changed the timing of tests, or added tests to the baseline. In other 

instances, MDA canceled planned tests which also affected the test 

baseline. In addition, the BMDS Operational Test Agency identified several 

limitations in the previous BMDS test program, including unaccredited 

models and simulations, flight test artificialities, and inadequate modeling 

of some environmental conditions.8

 

Members of Congress also expressed concern with MDA’s test approach. 

For example, in the fiscal year 2008 National Defense Authorization Act 

conference report, conferees noted that MDA failed to ensure an adequate 

testing program and that its test and targets program needed to be 

managed in a way that fully supported high-priority near-term programs. 

MDA extensively revised its test plan in fiscal year 2009 to address many 

of these concerns. For example, the new Integrated Master Test Plan 

bases test scenarios on modeling and simulation needs and extends the 

test baseline through 2015, which allows for better estimation of target 

needs, range requirements, and test assets. As part of the revised test plan, 

MDA scheduled dedicated periods of developmental and operational 

 

7 GAO-09-338. 

8

 The BMDS Operational Test Agency conducts independent operational assessments of 

BMDS capability to defend the United States, its deployed forces, friends, and allies against 

ballistic missiles of all ranges and in all phases of flight. MDA funds all BMDS Operational 

Test Agency activities. 

Page 9 GAO-10-311 Missile Defense Acquisitions 
testing, during which the system configuration will remain fixed to allow 

the warfighter to carry out training, tactics, techniques, and procedures for 

developmental and operational evaluation. Additionally, the new test plan 

will provide sufficient time after test events to conduct a full post-test 

analysis. These improvements are important because BMDS performance 

cannot be fully assessed until models and simulations are accredited and 

validated and the test program cannot be executed without meeting its 

targets needs. 

MDA Began New Target 

Development Effort 

In July 2009, MDA also initiated a new target acquisition strategy to 

address recurring target performance issues and increases in target costs. 

According to the Director of MDA, this new target approach is based on 

streamlining a set of classes of targets to increase quality control of an 

inventory of identical targets that represent general threat characteristics 

to account for intelligence uncertainties. He further stated that a goal of 

the new target acquisition strategy is to minimize the number of targets 

needed to emulate specific threats and establish backup targets, which 

will be available in 2012. 

Targets have been a recurring cause of flight test delays, cancellations, and 

failures since 2006. In the past, we reported that the THAAD program was 

unable to achieve its first intercept attempt in 2006 because the target 

malfunctioned.9

 The program also experienced target anomalies in 2007 

that precluded the completion of two radar characterization tests. During 

the same year, the GMD program experienced long-term effects on its 

flight test schedule when it was unable to achieve all primary test 

objectives because of a target failure. We also reported in March 2009 that 

the Aegis BMD program was unable to conduct an intercept because the 

target was not available.10 In addition, in its January 2009 report to the 

defense committees, MDA acknowledged target availability and reliability 

problems and reported its plan for a new target acquisition strategy to 

address these issues and improve costs, quality, and reliability. 

In revising its target acquisition strategy, MDA solicited input from 

industry in an effort to better understand possible new target solutions 

that might be available to improve cost, quality, and performance. To 

 

9

 GAO, Defense Acquisitions: Sound Business Case Needed to Implement Missile Defense 

Agency’s Targets Program, GAO-08-1113 (Washington, D.C.: Sept. 26, 2008). 

10 GAO-09-338. 

Page 10 GAO-10-311 Missile Defense Acquisitions 
leverage industry capability and promote a more competitive contract 

environment, MDA decided to use multiple contractors with multiple 

contracts instead of a single prime contract, increasing its flexibility to 

respond to changing program requirements. The agency plans to award a 

new contract for each class of target needed to execute the BMDS test 

plan. MDA will begin making decisions on contract awards and new target 

designs over the next year. According to program officials, MDA originally 

planned to issue five requests for proposals for new contracts in fiscal year 

2010 and one additional request in fiscal year 2011. However, to reflect 

changes in the test plan and subsequent changes to the acquisition 

strategy, the program now plans to issue two requests for proposals in 

fiscal year 2010 and one in fiscal year 2011. The Targets and 

Countermeasures program anticipates that the first targets will be 

delivered under the new strategy in fiscal year 2012, and the first 

intercontinental ballistic missile target is expected to be delivered in fiscal 

year 2013. 

MDA also made progress in several ongoing target development efforts 

that could enhance the ability to test the BMDS. During fiscal year 2009, 

the Targets and Countermeasures program made progress in developing 

four new targets—the LV-2 target, Aegis Readiness Assessment Vehicle-C 

target, a new medium range target, and the Extended-Long Range Air 

Launched Target. Each target adds a new capability to MDA’s target 

portfolio. For example, the LV-2 target provides the potential for 

significantly expanding the intermediate range payload and range 

performance over current inventory capabilities. The Aegis Readiness 

Assessment Vehicle-C target provides a new, low-cost capability as it is 

designed to contribute additional separating and maneuvering capabilities 

in short- and medium-range targets. MDA’s new Medium Range Target 

provides improved kill assessment capability at this range.11 In addition, 

the new Extended-Long Range Air Launched Target is a medium-range 

target that provides a greater range capability than previous air-launched 

targets and adds the ability to deploy associated objects—a capability not 

currently available in other similar target types. MDA expects each of 

these targets to be ready for use in flight tests in fiscal year 2010.12

 

11 The new Medium Range Target was successfully launched in October 2009. 

12 The Aegis Readiness Assessment Vehicle-C target was successfully flown in November 

2009. 

Page 11 GAO-10-311 Missile Defense Acquisitions 
MDA Demonstrated Some 

Improved Performance 

through Testing 

In fiscal year 2009, MDA conducted several ground tests and flight tests 

demonstrating improved performance in several areas of the BMDS 

including element-level functionality, theater and regional performance, 

and interoperability. Table 2 identifies key test events achieved in fiscal 

year 2009 for each element. 

Table 2: Fiscal Year 2009 BMDS Test Achievements 

Element Significant test achievements 

ABL • Achieved first live tracking tests against boosting targets 

• Achieved first firing of high energy laser in flight 

Aegis BMD • Verified capability to destroy multiple targets during an engagement 

C2BMC • Demonstrated capability to display information from both strategic and theater scenarios on one common 

operational picture 

• Displayed situational awareness data for Patriot units 

GMD • Utilized correlated sensor data from four sensors to intercept a target 

Sensors • Demonstrated that the upgraded early warning radar could conduct missile warning, space surveillance, 

and missile defense during a live intercept of a target missile 

STSS • Completed ground testing, integration of components, and launch of two demonstration satellites 

THAAD • Conducted a salvo launch of two interceptors against single target 

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

In June 2009, the ABL program successfully completed its first two 

tracking tests against boosting missile targets. These tests marked the first 

time ABL demonstrated a complete low-power engagement sequence 

against a boosting target. In addition, the ABL was able to demonstrate its 

ability to fire its high energy laser in an airborne environment during a 

flight test in August 2009. During this test, the laser was fired into a 

calorimeter on board the aircraft to capture the laser’s energy and 

measure performance characteristics of the laser’s beam. 

The Aegis BMD program also demonstrated increased levels of element 

performance through Navy fleet exercises and developmental tests. For 

example, Aegis BMD demonstrated, for the first time, its capability to 

destroy a ballistic missile in the terminal phase of flight using Standard 

Missile-2 Block IV missiles while simultaneously conducting a mission 

using the Standard Missile-2 Block IIIA missile against a cruise missile 

target. The program also conducted successful developmental component 

tests for the next generation of the Aegis BMD interceptor—the SM-3 

Block IB. Developmental testing will continue into 2010. In addition, the 

program successfully demonstrated that the latest software release of the 

Page 12 GAO-10-311 Missile Defense Acquisitions 
Aegis BMD system had the capability to support the program’s next 

generation interceptor during simulated SM-3 Block IB engagements. 

The C2BMC program also satisfied multiple test objectives and increased 

its capability in fiscal year 2009. The program participated in many systemlevel tests during the year that enabled it to demonstrate multiple 

capabilities, including improved situational awareness and sensor 

management.13 During testing, C2BMC used multi-sensor correlation and 

provided integrated situational awareness for weapons release decisions. 

GMD, for the first time, used information from multiple sensors to develop 

and successfully conduct an intercept of a live target during a flight test. In 

December 2008, target information from four different sensors and 

satellite data were input into the GMD fire control system to develop an 

intercept plan. The involvement of multiple sensors provides better 

information to develop an engagement. In addition, GMD made progress in 

addressing BMDS Operational Test Agency concerns regarding the 

formatting, tracking, and accounting of messages from GMD sensors. For 

example, MDA added test instrumentation to collect data for 

regional/theater tests communications. However, the agency still faces 

ongoing challenges assessing timeliness with the exchange of messages at 

the strategic level. According to BMDS Operational Test Agency officials, 

they continue to work with MDA to resolve this issue. Key to the 

integration and functionality of the BMDS is communications and message 

traffic. The timely reception of messages from sensors to weapon systems 

is key to support decisions and achieve effective intercepts. In March 2009, 

we reported that these data management problems prevented the analysis 

of the timeliness of message data, according to BMDS Operational Test 

Agency officials.14

The STSS program successfully completed the ground testing and 

integration of components to support the launch of its two demonstration 

satellites in September 2009. These satellites will use onboard infrared 

sensors to detect, track, and discriminate ballistic missiles throughout 

their trajectories. 

 

13 Situational awareness is defined as the degree to which the perception of the current 

environment mirrors reality. 

14 GAO-09-338. 

Page 13 GAO-10-311 Missile Defense Acquisitions 
THAAD also demonstrated improved element-level functionality when it 

successfully launched a salvo of two THAAD interceptors to intercept a 

separating target inside the earth’s atmosphere. The primary interceptor 

hit the target and the second interceptor hit the largest remaining piece of 

target debris seconds later. 

BMDS Demonstrated 

Improved Theater and 

Regional Performance and 

an Increased Level of 

Interoperability 

Regional and theater BMDS assets—Aegis BMD and THAAD—succeeded 

in demonstrating improved interoperability in fiscal year 2009. For 

example, during a THAAD intercept test, Aegis BMD tracked a target and 

provided the information to THAAD’s fire control. As a result, the missile 

was successfully engaged by THAAD. Additionally, during this test, the 

forward-based radar supporting THAAD was also able to discriminate the 

threat reentry vehicle from other objects and provide the information to 

support the engagement. According to program officials, the THAAD 

element reported that C2BMC provided accurate and timely status 

information for the BMDS as well as situational awareness of the test to 

the warfighter. 

MDA also demonstrated interoperability for BMDS elements during 

several ground tests in fiscal year 2009.15 For example, during one ground 

test—GTD-03—MDA successfully demonstrated simultaneous theater and 

regional capabilities using operational BMDS hardware and actual 

communications between them. In addition, MDA demonstrated 

simultaneous BMDS capabilities to conduct training while the BMDS 

network remained operational during this test. This capability allows MDA 

to conduct development activities while maintaining readiness to engage 

in missile defense operations. This ground test also allowed several BMDS 

elements to demonstrate that they could successfully exchange data with 

other elements. Additionally, in December 2008 numerous elements 

worked together to support system-level post-flight reconstruction needed 

to validate BMDS models and simulations.16 This system-level post-flight 

reconstruction for flight test FTX-03 was the first ever and was highly 

successful because different MDA groups achieved the same results, 

according to MDA officials. 

 

15 Ground tests play a vital role in the development of technologies for missile defense by 

providing officials detailed information about hardware and software system functionality. 

16 A key step in the process of anchoring models is post-flight reconstruction, when data 

from a past flight test scenario are run in a simulated environment to check and adjust the 

accuracy of the models. 

Page 14 GAO-10-311 Missile Defense Acquisitions 
MDA took significant steps forward in fiscal year 2009 in developing the 

modeling and simulation tools necessary to understand BMDS 

performance against strategic and theater/regional threats. Because the 

potential combinations of BMDS configurations, intercept scenarios, and 

missile threats are too numerous for ground and flight testing, assessing 

overall BMDS performance depends upon the use of models and 

simulations to understand the capabilities and limitations of the system. 

Such an end-to-end system-level simulation brings together the capabilities 

of various element models in order to analyze how the BMDS integrated 

and fielded radars, communication networks, and interceptors perform 

during scenarios.17 However, to work effectively these models and 

simulations need to be anchored to data from ground and flight tests and 

validated by independent evaluators—the BMDS Operational Test 

Agency—in order to have confidence in their results.18 Moreover, the 

system-level simulation itself is expected to change over time as additional 

models become available to represent the evolving BMDS configuration. 

MDA Made Progress 

Developing and Integrating 

Models and Simulations 

In March 2009 we reported that MDA experienced several problems in its 

overall modeling and simulation program, which negatively affected the 

2007 performance assessment and led to the cancellation of the 2008 

performance assessment.19 Performance Assessment 2007 was 

unsuccessful primarily because of inadequate flight and ground test data 

for verification and validation to support accreditation and a lack of 

common threat and environment input data among element models. MDA 

officials canceled their 2008 performance assessment efforts in April 2008 

because of developmental risks associated with modeling and simulations, 

focusing instead on testing and models for Performance Assessment 2009. 

In fiscal year 2009, MDA made some progress integrating the individual 

element models and simulations for Performance Assessment 2009. A 

leading accomplishment was the development of a system-level simulation 

for regional and theater scenarios in addition to existing strategic 

scenarios for a more complete analysis of BMDS performance. 

Performance Assessment 2007 only included homeland defense scenarios 

against strategic threats. One of MDA’s goals for the performance 

 

17 An end-to-end simulation represents a complete BMDS engagement—from enemy missile 

launch to attempted intercept by BMDS kill vehicle. 

18 The BMDS Operational Test Agency provides an independent accreditation of MDA 

models and simulations. 

19 GAO-09-338. 

Page 15 GAO-10-311 Missile Defense Acquisitions 
assessment is the integration of models that communicate like the 

networked BMDS. As of October 2009, Performance Assessment 2009 

achieved interactive communications among the element models and 

simulations. In addition, MDA achieved consistency in representing the 

threat missile and post-intercept data among all models and scenarios, 

which was also a weakness of Performance Assessment 2007. Finally, the 

BMDS Operational Test Agency observed that conducting Performance 

Assessment 2009 is helping to build confidence in BMDS-level simulation 

capability for the subsequent Performance Assessment 2010. 

MDA Delivered Many 

Assets as Planned in Fiscal 

Year 2009 

In fiscal year 2009, MDA met many of its delivery goals. Four MDA 

elements—Aegis BMD, GMD, Sensors, and C2BMC—were scheduled to 

deliver a total of 41 assets and capabilities in fiscal year 2009. MDA 

delivered 34 of these assets or 83 percent. Table 3 outlines BMDS asset 

deliveries in fiscal year 2009. 

Page 16 GAO-10-311 Missile Defense Acquisitions 
Table 3: BMDS Deliveries and Total Fielded Assets as of September 30, 2009 

BMDS element 

Fiscal year 2009 

delivery goals 

Assets delivered 

in fiscal year 2009 

Total assets available (cumulative 

total of assets since 2005) 

Aegis BMD 10 SM-3 missiles 19 SM-3 missiles 47 SM-3 missiles 

20 Aegis BMD Weapon System 

3.6.1 installations 

18 Aegis BMD Weapon System 

3.6.1 installations 

18 Aegis BMD Weapon System 

3.6.1 installations 

1 Aegis BMD Weapon System 4.0.1 

installation 

GBIs number 28-30 GBI 28 28 GBIsaGMD 

1 additional silo 1 silo 31 silosb

C2BMC 1 fielding and activation site Nonec7 combatant command suites 

64 Web browsers 

54 enterprise workstations 

4 Global Engagement Manager 

workstations 

1 Global Engagement Manager 

suite 

Sensors 1 additional AN/TPY-2 radar 

Site construction, deployment, 

activation, and fielding for 1AN/TPY2 radar 

Near-term discrimination software 

Thule radar upgrades 

Thule radar site construction 

Thule radar communication upgrade

1 AN/TPY-2 radar 

Site construction, deployment, 

activation, and fielding for 1AN/TPY2 radar 

Near-term discrimination software 

Thule radar site construction 

6 AN/TPY-2 radars 

2 operational sites 

1 Near-term discrimination software 

1 Thule radar site construction 

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

Note: Goals for GMD, Sensors and C2BMC asset deliveries came from the Fiscal Year 2008 BMDS 

Block Baselines and Goals, while Aegis BMD delivery goals were informed by Aegis BMD budget 

justification documents. 

a

The total includes GBIs numbered 25, 26, and 27 which were delivered in fiscal year 2009, 1 year 

after their initially scheduled delivery date in fiscal year 2008. 

b

The total includes 26 silos at Fort Greely and 5 silos (one for test use only) at Vandenberg Air Force 

Base. 

c

Program officials told us that C2BMC’s delays were not driven by technical issues but by 

programmatic changes needed by other elements, the warfighter, and the new administration. 

Aegis BMD planned to install the Aegis Weapons System 3.6.1 software on 

20 ships and deliver 10 SM-3 missiles in fiscal year 2009. The program met 

its goal to deliver the 10 missiles and began to deliver additional rounds, 

initially designated for 2010, ahead of schedule. However, the program fell 

behind on its goal of installing the 3.6.1 software on 20 ships, delivering 18 

by the end of the fiscal year 2009. Aegis BMD officials pointed out that all 

ship sets were available but because of real-world national security 

situations, these ships were not available for installations in fiscal year 

Page 17 GAO-10-311 Missile Defense Acquisitions 
2009. Nonetheless, one of the remaining ships was completed in December 

2009 and another will be completed by March 2010. In fiscal year 2009, 

Aegis BMD also delivered an additional ship set with the next generation 

Aegis BMD Weapon System, 4.0.1, for a total of 19 ship deliveries. 

The GMD program also partially met its delivery goals in fiscal year 2009. 

The program delivered an additional silo at Vandenberg Air Force Base as 

planned, but lagged in its GBI deliveries. For example, in fiscal year 2009, 

GMD emplaced three interceptors that were initially planned for fiscal 

year 2008 and only one of the three interceptors planned for fiscal year 

2009. 

The Sensors program met most of its delivery goals, successfully fielding a 

new near-term discrimination algorithm, activating an additional AN/TPY-2 

radar site, and delivering an additional AN/TPY-2 radar. However, it fell 

short of meeting all of its delivery goals for the fiscal year. Although the 

program completed the construction for the Thule radar site ahead of 

schedule in fiscal year 2008, it was unable to deliver Thule radar 

communications and upgrades as planned in fiscal year 2009. These 

activities have been delayed until fiscal year 2010. 

Finally, C2BMC delivered four additional C2BMC Web browsers, five work 

stations, and an additional combatant command suite. Additionally, the 

program office rolled out the Global Engagement Manager suite and added 

four work stations that support it. However, it was unable to meet its 

schedule baseline goal of an additional fielding and site activation to 

declare its next spiral operational. This was due to major program 

restructures needed to accelerate C2BMC capabilities for other BMDS 

elements as well as programmatic changes to fulfill warfighter requests 

and meet new administration direction. 

While there was progress in addressing concerns about test planning and 

target development as well as in delivering assets, all BMDS elements 

experienced delays in conducting tests, were unable to accomplish all 

planned objectives, and experienced performance challenges. Poor target 

performance continued to be a problem causing several test delays and 

leaving several test objectives unfulfilled. The test problems also 

precluded the agency from gathering key knowledge through tests 

specified by the MDA Director that were originally planned to be 

Significant Challenges 

Remain in Developing 

the BMDS 

Page 18 GAO-10-311 Missile Defense Acquisitions 
completed in fiscal year 2008.20 MDA’s efforts to develop advanced 

algorithms and its efforts to demonstrate homeland defense were also 

affected by target issues. These shortfalls in testing continued to delay 

validation of the models and simulations used to assess the overall 

performance of the BMDS. Consequently, comprehensive assessments of 

the capabilities and limitations of the BMDS are still not possible. MDA 

also redefined its schedule baseline, eliminating goals for delivering 

integrated capabilities so we were not able to assess MDA’s progress in 

this key area. 

MDA Experienced Testing 

Delays and Shortfalls 

Across the Board in Fiscal 

Year 2009 

During fiscal year 2009, although several tests showed progress in 

individual elements and some system-level capabilities, all BMDS elements 

experienced test delays and shortfalls in part because of problems with 

the availability and performance of target missiles. None of the elements 

conducted all planned tests as scheduled and none achieved all planned 

objectives. Table 4 outlines BMDS test and target issues in fiscal year 2009. 

 

20 In May 2007, the Director of MDA established test knowledge points to provide critical 

information for making key decisions regarding the BMDS. According to MDA, these 

knowledge points were unique management approaches chosen to manage MDA’s critical 

program risks and to demonstrate the performance of the BMDS. 

Page 19 GAO-10-311 Missile Defense Acquisitions 
Table 4: BMDS Test and Target Issues 

Element Issues 

ABL Optics failure experienced during test. Delayed first full demonstration test from fiscal year 2009 

until fiscal year 2010. 

Aegis BMD Target availability, test range requirements, and programmatic changes delayed key test from 

fiscal year 2008 until at least 2013.a

 

C2BMC Changes in the scope of C2BMC’s ongoing development effort as well as issues with BMDS-level 

models and simulation tools have delayed C2BMC’s spiral capability development testing.b

GMD Target failed to release countermeasures during December 2008 flight test—FTG-05; target 

modeling delayed subsequent test—FTG-06—until January 2010.c

Sensors Target failures prevented Sensors element from developing discrimination capability as planned. 

STSS Integration difficulties delayed launch of demonstration satellites. 

Targets and Countermeasures Flexible Target Family delivery delayed and experienced cost growth. 

THAAD Target availability reduced planned fiscal year 2009 objectives. 

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

a According to Aegis BMD officials, this test has been canceled, however several objectives will be 

included in FTM-23 scheduled for 2013. b Program officials told us that C2BMC’s scope changes were not driven by technical issues but by 

programmatic changes needed by other elements, the warfighter, and the new administration. 

c FTG-06 was conducted on January 31, 2010, but did not achieve all of its objectives. The GBI failed 

to intercept the target as planned. According to an MDA official, the agency has convened a Failure 

Review Board and expects results from its investigation to take months. 

Two BMDS elements—ABL and C2BMC—experienced delays in achieving 

fiscal year 2009 test events. For example, ABL experienced delays in 

development and ground testing that resulted in the delay of its first full 

flight test demonstration until fiscal year 2010. Additionally, C2BMC was 

unable to conduct testing needed to further develop its next spiral 

capability because of BMDS-level delays in developing the models and 

simulations needed to conduct this testing. Major program restructures 

needed to accelerate C2BMC capabilities for other BMDS elements and 

programmatic changes to fulfill warfighter requests and meet new 

administration direction also contributed to C2BMC’s inability to conduct 

planned fiscal year 2009 testing. 

As noted in table 4, targets affected the BMDS test program for four 

elements in fiscal year 2009. The Aegis BMD, GMD, Sensors, and THAAD 

test program were affected by either target availability or target reliability 

and performance issues. In fiscal year 2009, targets contributed to a test 

cancellation and test delays and prevented elements from completing tests 

or achieving all test objectives. One test for Aegis BMD—FTM-15—was 

originally projected to use the new Flexible Target Family’s LV-2 target in 

fiscal year 2008, but because of qualification difficulties, the target was 

Page 20 GAO-10-311 Missile Defense Acquisitions 
unavailable and the test was not conducted. This test was planned as the 

first Aegis BMD SM-3 engagement against an intermediate-range target. It 

was also expected to verify interoperability of Aegis BMD, a Sensors radar, 

and C2BMC. As of December 2009, MDA had canceled the test and 

planned to combine several of the FTM-15 objectives with those in a future 

flight test in 2013—FTM-23. However, as of February 2010, the Director of 

MDA stated that the test is being rescheduled for 2011. Test 

documentation was not provided for our review so it remains unclear 

whether the test will include the original test objectives, target, and BMDS 

hardware and software configurations. 

The GMD and Sensors programs were also unable to complete all planned 

objectives because of a target failure during an intercept test. During a 

December 2008 flight test—FTG-05—the target failed to release planned 

countermeasures. A similar target failure was experienced in a prior 2008 

test—FTX-03—and MDA’s risk assessments leading up to the FTG-05 test 

could not determine the root cause of the failure. These risk assessments 

determined that a similar failure would be “likely” and the consequences 

“severe” if MDA proceeded with the test in December 2008, even after 

taking mitigation steps.21 According to the Defense Contract Management 

Agency, the cost to execute FTG-05 exceeded $210 million. This was the 

last planned flight test using this type of target. As a result of the target 

failure, GMD was unable to assess the Capability Enhancement-I kill 

vehicle against countermeasures. According to the July 2009 Integrated 

Master Test Plan, this test is now planned to be conducted in the third 

quarter of fiscal year 2011—nearly 4 years after this configuration 

completed fielding. 

The GMD program had to delay its second planned fiscal year 2009 

intercept test—FTG-06—to fiscal year 2010 because pretest analysis raised 

concerns that the target may not perform as required. This test was 

important because it was planned as the first test of GMD’s enhanced 

version of the kill vehicle called the Capability Enhancement II 

exoatmospheric kill vehicle. This test was also designed to demonstrate a 

long-flight time for the GBI and GMD’s capability against 

countermeasures. In early 2009, MDA altered the target to present a more 

representative threat. Since MDA did not have modeling data to represent 

 

21 MDA assesses risk into five categories of likelihood—(1) remote, (2) unlikely, (3) 

possible, (4) likely and (5) highly likely; and five categories of consequence—(1) minimal, 

(2) moderate, (3) significant, (4) extensive, and (5) severe. 

Page 21 GAO-10-311 Missile Defense Acquisitions 
the new characteristics of the target, MDA officials were concerned about 

the target’s expected performance and decided to delay the test. In 

January 2010, MDA conducted FTG-06. However, all test objectives were 

not met as the GBI failed to intercept the target as planned. According to 

an MDA official, a Failure Review Board was convened to investigate the 

test results, but its investigation is expected to take months to complete. 

As we reported in March 2009, THAAD program officials had to reschedule 

the planned fiscal year 2008 BMDS-level event, FTT-10, into fiscal year 

2009 because of a target malfunction.22 THAAD successfully completed 

this test event in fiscal year 2009. In addition, a Short Range Air Launch 

Target planned for use in a third quarter fiscal year 2009 THAAD flight test

FTT-11, had a component failure and subsequently needed to be 

requalified. This failure caused the THAAD program to modify its planned

flight test objectives and move the test into fiscal year 2010, also resulting 

in delays to a subsequent test—FTT-12. FTT-11 was conducted in 

December 2009 but could not be completed due to failure of the target 

missile. The air-launched target was successfully deployed from a 

transport aircraft, but the target’s rocket motor did not ignite. The THAAD 

interceptor was not launched and test objectives were not achieved. 

According to the Director of MDA, the Failure Review Board was 

concluding its investigation of the root cause of this failure. The board’s 

report w

, 

as not available during our audit. 

 

Target reliability and failures in fiscal year 2009 also prevented several 

elements from achieving all planned objectives. In March 2009, Aegis BMD 

experienced target difficulties when two refurbished lower-cost Army 

targets for a short-range mission fell short of their expected trajectory. 

One target was outside the intercept control area and Aegis BMD was not 

able to fire the interceptor because of safety limitations. In the second test, 

the target, while short of its expected trajectory, fell in the intercept 

control area and was successfully intercepted. 

It Will Be Several Years 

Before New Target 

Acquisition Approach 

Addresses Problems 

It will be several years before MDA’s new approach to target development 

and acquisitions will be fully implemented because most targets needed 

through fiscal year 2011 are already under contract and will not be 

affected by the new strategy. The activities under existing contracts will 

not be complete until 2013. Moreover, MDA’s implementation of a new 

22 GAO-09-338. 

Page 22 GAO-10-311 Missile Defense Acquisitions 
acquisition management strategy does not necessarily mean that any 

particular target currently being used, such as the LV-2, will be phased out 

of the test program. MDA could decide to continue to use an existing 

target under the new strategy, and as a result, some existing target missiles 

could continue to be procured under new contracts. 

MDA has not presented a complete business case for proceeding with a 

new target acquisition management strategy. A complete business case 

includes establishing top-level cost, schedule, and performance baselines 

available internally and externally for oversight.23 It is the essential first 

step in any acquisition program because it sets the stage for acquisition 

and execution. Program officials told us that they would have cost, 

schedule, and performance baselines finalized and documented as part of 

the decision to proceed with new contract awards. These baselines, 

however, will be very detailed and spread across multiple documents and 

therefore are unsuitable for internal and external oversight. The officials 

further stated that they do not intend to establish top-level cost, schedule, 

and performance baseline measures similar to approved program 

baselines that are established for DOD’s major defense acquisitions to 

 

23 We previously reported in GAO-07-387 that to provide accountability, major defense 

acquisition programs are required by statute to document program goals in an approved 

baseline description (10 U.S.C. § 2435) that, as implemented by DOD, has been approved by 

a higher-level DOD official prior to the program’s initiation. The acquisition program 

baseline, derived from the users’ best estimates of cost, schedule, and performance 

requirements, provides decision makers with the program’s total cost for an increment of 

work, average unit costs for assets to be delivered, the date that an initial operational 

capability will be fielded, and the weapon’s intended performance parameters. The baseline 

is considered the program’s initial business case—evidence that the concept of the 

program can be developed and produced within existing resources. Once approved, major 

acquisition programs are required to measure their program against the baseline or to 

obtain approval from a higher-level acquisition executive before making significant 

changes. When MDA was established in 2002, it was given the flexibility to delay entry of 

BMDS into the DOD acquisition cycle. Because the baseline requirement is typically 

triggered by a program’s entry into the engineering and manufacturing development 

(formerly the system development and demonstration) phase of the DOD acquisition cycle 

during which the weapon system is designed and then demonstrated in tests, and the 

BMDS has not formally entered into the DOD acquisition cycle, this requirement does not 

yet apply. 

Page 23 GAO-10-311 Missile Defense Acquisitions 
provide accountability.24 In September 2008, we reported that MDA had 

difficulty in developing and supplying new targets in part because a sound 

business case was not developed before significant decisions were made. 

In that report we recommended that MDA develop cost, schedule and 

performance baselines as part of an effort to establish a sound business 

case for each new class of target under development.25

As part of the new target development efforts, MDA also developed a new 

cost model. However, because the cost model and test baseline are 

continually updated, the Targets and Countermeasure program continues 

to lack solid cost baselines against which progress can be measured. 

According to the Director of MDA, the agency will continue to update its 

cost model as the Integrated Master Test Plan changes, noting that where 

the technical content of the test plan remains constant, cost, schedule, and 

performance baselines can be measured from year to year. However, as 

we reported in March 2009, the Integrated Master Test Plan changes 

frequently. In fact, the latest approved version is dated July 2009, and 

according to MDA’s Director, a revised version of the Integrated Master 

Test Plan is expected in March 2010, which limits the baseline’s stability to 

approximately 8 months and limits our ability to measure MDA’s progress 

against a cost baseline. 

MDA’s ability to develop an accurate cost baseline is also affected by the 

lack of historical data available for targets or for other similar missiles. 

Program officials said that they are now collecting more useful cost data 

for new contracts by requiring more detailed cost reporting from their 

contractors. This approach will allow program officials to gather more 

complete and accurate data over time to make the new cost model a more 

powerful cost estimating tool. 

 

24 Though MDA is not yet required to establish an acquisition program baseline because of 

the acquisition flexibilities it has been granted, Congress has enacted legislation requiring 

MDA to establish some baselines. The Fiscal Year 2005 National Defense Authorization Act, 

Pub. L. No. 108-375, § 234(e), required the Director, MDA, to establish and report annually 

to Congress a cost, schedule, and performance baseline for each block configuration being 

fielded. MDA has since terminated its block approach. In addition, the National Defense 

Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 223(g) required that no later 

than the submittal of the budget for fiscal year 2009, MDA shall “establish acquisition cost, 

schedule and performance baselines” for BMDS elements that have entered the equivalent 

of system development and demonstration or are being produced and acquired for 

operational fielding. 

25 GAO-08-1113. 

Page 24 GAO-10-311 Missile Defense Acquisitions 
Testing and Targets 

Problems Affected 

Planned Progress of 

Overall BMDS 

Development 

The inability of MDA to successfully conduct its test plan precluded the 

agency from collecting critical information needed for key decisions and 

significantly affected development of advanced algorithms and homeland 

defense capabilities. 

In fiscal year 2009, MDA was unable to accomplish any of the Director’s 

knowledge points that were to be achieved through tests. Several of these 

tests were originally planned for fiscal year 2008, but were delayed into 

2009 and then again delayed into fiscal years 2010 and 2011. Table 5 shows 

the original test date and MDA’s current estimate for obtaining the 

necessary knowledge. 

Key Director’s Knowledge 

Points Delayed Again 

Table 5: Status of Fiscal Year 2008 Director’s Knowledge Points to Be Achieved through Tests 

Knowledge point Knowledge gained 

Flight and 

ground test 

Original 

test date 

Current 

projection 

Assess capability to 

deliver real time 

engagement tracks 

Verification of initial Global Engagement Manager 

capability to support ballistic missile defense level 

sensor/weapon system pairing. 

GTD-03 Fourth quarter 

fiscal year 2008 

To be 

determineda

Verify 72 inch Flexible 

Target Family 

Confirmation of 72 inch performance. Viability of 

Flexible Target Family concept to efficiently 

configure and transport target to launch facility. 

Confidence to discontinue use of the Strategic 

Target System. 

FTM-15bFourth quarter 

fiscal year 2008 

Second 

Quarter 

Fiscal Year 

2010 

Demonstrate high 

acceleration booster 

Confirmation of Boost Phase Capability alternative 

to ABL and High Acceleration Booster for 

Midcourse Defense (mobile and fixed sites). 

FTK-01 Fourth quarter 

fiscal year 2008 

Deletedc

Confirm Constellation 

affordability 

Space sensor performance against operationally 

realistic targets confirmed with existing Block 2006 

technology (anchors performance-cost baseline for 

future STSS). 

FTS-01 Fourth quarter 

fiscal year 2008 

Deleted 

Verify capability to 

conduct launch on the 

tactical digital information 

link ballistic missile 

engagement 

Assessment of Aegis BMD 3.6 and SM-3 Block IA 

performance and ability to successfully engage 

and intercept a long range ballistic missile target 

and to use an off-board sensor’s track data via 

Link-16 to initiate that engagement. 

FTM-15 Fourth quarter 

fiscal year 2008 

To be 

determinedd

Confirm Constellation 

performance 

Space sensor performance against operationally 

realistic targets confirmed with existing Block 2006 

technology (anchors performance-cost baseline for 

future STSS). 

FTS-03eFourth quarter 

fiscal year 2008 

Third quarter 

fiscal year 

2011 

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

Page 25 GAO-10-311 Missile Defense Acquisitions 
a After the knowledge point had been established in 2007, MDA split it into two parts. Although GTD03 was completed in the second quarter of fiscal year 2009 and was the test that was originally set to 

meet this knowledge point, MDA altered its plan. The first part of the knowledge point, Verification of 

initial Global Engagement Manager capability to support ballistic missile defense level sensor/weapon 

system pairing, will meet its objectives during the GTX-04 series, which will not be completed until the 

second quarter of fiscal year 2011 while the second part, Verification of Aegis Launch on C2BMC, 

was originally set to meet its objectives during FTM-15. However, FTM-15 has been canceled, and 

program officials told us that several objectives would be rolled into future tests, such as FTM-23. 

b MDA changed the test to verify the 72 inch Flexible Target Family target from FTM-15 to FTG-06. 

FTG-06 was conducted on January 31, 2010, but did not achieve all of its objectives. Therefore, it is 

unclear whether the knowledge point was fulfilled. 

c MDA’s cancellation of the Kinetic Energy Interceptor program during fiscal year 2009 caused its 

subsequent test events, including FTK-01, to be canceled.

d As of December 2009, MDA had canceled the test and planned to combine several of the FTM-15 

objectives with those in a future flight test in 2013—FTM-23. However, as of February 2010, the 

Director, MDA states that the test is being rescheduled for 2011. Test documentation was not 

provided for our review so it remains unclear whether the test will include the original test objectives, 

target, and BMDS hardware and software configurations.

e FTS-03 is now designated FTS-02. 

Target issues continued to affect MDA’s ability to fully develop algorithms 

needed for discrimination capability. In March 2009, we reported that 

multiple elements experienced test failures which caused delays in 

collecting data needed to develop discrimination capability.26 For example, 

in 2007, two THAAD radar characterization tests were unsuccessful 

because of target anomalies. These tests were designed with 

characteristics needed for radar observation in support of advanced 

discrimination algorithm development. However, target problems 

prevented an opportunity for the radar to exercise all of the planned 

algorithms, causing a loss of expected data. Similarly, in a 2008 sensor 

characterization test, the target failed to release its countermeasures, 

which prevented the sensors from collecting expected data. Consequently, 

MDA was unable to fully develop discrimination algorithms as planned. 

Advanced Algorithm and 

Homeland Defense Affected 

In fiscal year 2009, MDA continued to be unable to develop its advanced 

algorithms as planned as key tests that were designed to reduce the 

maturation risk were affected by targets. For example, the Sensors and 

GMD elements were unable to collect data to develop their advanced 

algorithms when the target failed to release countermeasures and present 

the expected scene complexity during FTG-05. The subsequent delay to 

the next intercept test—FTG-06—until January 2010 has also reduced the 

data MDA had expected in fiscal year 2009 for the development of 

discrimination capability. Additionally, target unavailability caused MDA 

 

26 GAO-09-338. 

Page 26 GAO-10-311 Missile Defense Acquisitions 
to delay a THAAD test—FTT-11—from fiscal year 2009. This test was 

designed to provide data for the development of advanced algorithms for 

the THAAD radars. The test was conducted in fiscal year 2010 but could 

not be completed because the target malfunctioned during deployment. 

According to the Director of MDA, the Failure Review Board was 

concluding its investigation of the root cause of this failure. The board’s 

report was not available during our audit. 

Likewise, GMD continues to experience delays demonstrating increased 

interceptor performance for homeland defense as the two aforementioned 

tests—FTG-05 and FTG-06—were not conducted as planned. As we 

testified in February 2009, MDA had expected to conduct seven GMD 

interceptor flight tests from the start of fiscal year 2007 through the first 

quarter of fiscal year 2009. However, MDA was able to conduct only two, 

which, according to the Director of Operational Test and Evaluation, has 

limited the complete sets of information necessary for validating groundbased interceptor models. MDA also delayed the other planned flight test, 

FTG-06, beyond fiscal year 2009 because of target issues and an anomaly 

with a component of the Sea-Based X-band radar. As of June 2009, MDA 

estimated this test to cost over $236 million while the Defense Contract 

Management Agency estimated the cost to exceed $310 million. These 

costs are likely understated because they do not include all of the cost 

increases of delaying the test first to September 2009, nor do they include 

any cost increases of further delaying the test until the second quarter of 

fiscal year 2010. 

Although the Aegis BMD missile—SM-3 Block IA—capability against an 

intermediate range ballistic missile is not a requirement, MDA has planned 

for years and invested millions of dollars in a plan to test the Aegis BMD 

system and SM-3 Block IA interceptor against this type of threat. At the 

start of fiscal year 2009, Aegis BMD officials intended to conduct this test 

in the third quarter of fiscal year 2009. However, as of December 2009, 

MDA had canceled the test and planned to combine several objectives 

with those in a future flight test in 2013. As of February 2010, the Director 

of MDA stated that the test is being rescheduled for 2011. Test 

documentation was not provided for our review, so it remains unclear 

whether the test will include the original test objectives, target, and BMDS 

hardware and software configurations. 

Page 27 GAO-10-311 Missile Defense Acquisitions 
New Test Plan Not Yet 

Complete, Not Fully Tied 

to Resources, and Not 

Synchronized with Other 

Management Baselines 

MDA’s new July 2009 test plan was intended to provide stability; however, 

program officials already anticipate major revisions and alterations. 

According to MDA officials, budget decisions and the presidential decision 

to implement a European phased, adaptive approach, drove changes to the 

test and targets program. For example, the new strategy for European 

missile defense will primarily utilize Aegis BMD interceptors as opposed to 

GMD interceptors. Tests in support of developing this capability have not 

yet been added to the test plan. The Director of MDA stated that his 

agency is coordinating with the Office of the Director, Operational Test 

and Evaluation and with the BMDS Operational Test Agency to address 

these changes. According to the Director of MDA, flight and ground testing 

to support phases one through four of the Phased Adaptive Approach will 

be baselined in the March 2010 Integrated Master Test Plan, but the test 

plan was not available for our review during our audit. 

One way MDA’s new testing approach was intended to provide stability is 

that it was structured to slow the spiral development fielding process, 

allowing the warfighter to gain confidence in the BMDS before fielding 

decisions are made. However, BMDS Operational Test Agency officials 

told us that changes to hardware and software configurations need to 

follow the process jointly agreed to with MDA, noting that changes to the 

operational baseline should not occur until the appropriate developmental 

tests and operational tests have been completed. After the adoption of the 

new test plan through October 2009, MDA continued to incorporate 

software changes as updates to the operational baseline. According to 

Operational Test Agency officials, most of the proposed and approved 

software changes had not been through system-level testing and 

immediately made future test configurations in the Integrated Master Test 

Plan invalid. Changes made without full system-level testing, could result 

in possible adverse effects to the BMDS and the warfighter’s ability to use 

the system effectively. The BMDS Operational test Agency continues to 

work with MDA on these issues. BMDS Operational Test Officials told us 

that they have seen improvements since October 2009, noting that there 

has been an increase in early coordination and presentation of data to 

support interim releases of software and hardware. According to these 

officials, these improvements coupled with the new warfighter and MDAaccepted approach for testing—allowing developmental testing to occur 

before operational testing and before new capabilities are delivered to the 

Warfighter—will likely resolve issues encountered with frequent changes 

to software and hardware. 

Page 28 GAO-10-311 Missile Defense Acquisitions 
We testified in February 2009 that the success of MDA’s new approach to 

testing hinges on providing sufficient resources, among other factors.27

However, these resource challenges continue to affect the test plan 

because MDA’s new test plan was not fully resourced when it was 

approved in July 2009. In addition, BMDS Operational Test Agency 

officials also raised concerns that the Integrated Master Test Plan is not 

currently resourced to support the necessary personnel to analyze the 

tests or the performance assessment. 

Until the new development efforts are fully reflected in the test plan, MDA 

will also not be able to fully integrate that plan with other key aspects of 

testing and development, such as the acquisition of targets. The test plan is 

one of six management baselines MDA uses to track program progress. 

However, MDA determined that these baselines consist of a disparate set 

of non-integrated business processes.28 More importantly, MDA 

acknowledged that there is inconsistent management, configuration 

control, integration, and synchronization of existing manual processes. 

MDA is developing new business tools to automate the integration of these 

baselines and projects. While it will take several years for the agency to 

integrate these baselines using those tools and synchronize them with 

other key testing and development efforts, the initial capability to 

automatically integrate cost, schedule, and performance baselines will be 

available in early fiscal year 2011. 

Overall BMDS 

Performance Cannot Be 

Assessed Because MDA 

Models Are Not 

Sufficiently Mature 

MDA models and simulations have not matured sufficiently to assess 

overall BMDS performance and may not fully mature until 2016, instead of 

2011as we reported last year. According to the BMDS Operational Test 

Agency, it could not project which models and simulations could be 

accredited for Performance Assessment 2009. 29 It expects to make its 

determination in July 2010 at the earliest. Further, functionality shortfalls 

diminished the usable scope and integration issues have delayed the 

execution of Performance Assessment 2009 by at least 6 months. As a 

 

27 GAO, Defense Acquisitions: Charting a Course for Improved Missile Defense Testing, 

GAO-09-403T (Washington, D.C.: Feb. 25, 2009). 

28 MDA’s six baselines are technical, schedule, resource, contract, test, and operational. 

These baselines give the MDA Director management information for the BMDS that he uses 

to make decisions that affect multiple weapon system programs over multiple fiscal years. 

29 The BMDS Operational Test Agency provides an independent accreditation of MDA 

models and simulations. 

Page 29 GAO-10-311 Missile Defense Acquisitions 
result, the BMDS Operational Test Agency did not use the Performance 

Assessment 2009 data in its 2009 annual operational assessment as it had 

once intended. According to these officials, because of the known 

limitations and the changes to the BMDS operational configuration that 

will occur in 2010, the BMDS Operational Test Agency also will not be able 

to use the results as part of its 2010 annual operational assessment. 

MDA officials acknowledged that their primary challenge for the next 

several years will be obtaining enough flight test data to anchor and 

accredit the models. Moreover, the BMDS Operational Test Agency is still 

concerned about the effect on the validation of models due to artificialities 

in flight tests, particularly for GMD.30 The BMDS Operational Test Agency 

believes that the validation of models will improve as artificialities in flight 

tests are reduced. Another unresolved modeling and simulation weakness 

in the testing program has been addressing different weather conditions.31

MDA, in concert with the BMDS Operational Test Agency, is addressing 

modeling deficiencies with respect to weather conditions, but specific 

plans to resolve this weakness were not available during our audit. Finally, 

the BMDS Operational Test Agency anticipates that deficiencies in 

modeling the BMDS communications system at the regional and theater 

levels that exist in Performance Assessment 2009 will improve in the 

subsequent Performance Assessment 2010. 

Progress in Delivering 

Integrated Capabilities 

Could Not Be Assessed 

In 2008, we assessed MDA’s capability delivery progress against its 

integrated capability schedule goals and found that many slipped to 2009.32

We are no longer able to assess MDA’s progress in delivering integrated 

capabilities because, in fiscal year 2009, the agency eliminated integrated 

capability delivery goals from its schedule baseline. In its most recent 

BMDS Accountability Report, MDA redefined its schedule baseline to 

consist solely of hardware and software deliveries spread across fiscal 

years. MDA assigned schedule metrics to asset deliveries on an element 

 

30 The BMDS Operational Test Agency defines artificialities as BMDS architecture, targets, 

procedures, and conditions that exist in flight tests but would not exist in the real world. 

Flight test artificialities are introduced for a number of reasons, such as increased chances 

of success, range safety, data collection, and asset availability. According to BMDS 

Operational Test Agency officials, the complexity associated with the strategic mission of 

the GMD system makes challenges associated with artificialities greater. 

31 Weather conditions include rain, clouds, and snow. Severe sea states, ice loads, or winds 

could render tests unsafe to execute. 

32 GAO-09-338. 

Page 30 GAO-10-311 Missile Defense Acquisitions 
level only and removed key schedule measures—engagement sequence 

groups—from its August 2009 BMDS Accountability Report that tracked 

integrated block capability deliveries and provided a means for assessing 

the readiness of BMDS capabilities, integration, and functionality. Thus, 

MDA provided no information about its progress and plans to deliver 

integrated BMDS capabilities. 

MDA previously identified its capability delivery schedule goals and 

baselines within the block structure, in terms of assets and engagement 

sequence groups made available for fielding in a particular timeframe. 

Under this capabilities-based five-block acquisition management strategy, 

some blocks contained schedule baselines for deliveries of significant 

increments of capabilities against particular threats, culminating in the full 

capability declaration at a projected date. According to MDA, engagement 

sequence groups created manageable combinations of system 

configurations and provided a structure to assess BMDS performance. 

Because MDA presented early, partial and full capability delivery dates for 

individual engagement sequence groups, engagement sequence groups 

served as baseline to measure the schedule of integrated capability 

deliveries.33

MDA officials told us that the agency eliminated engagement sequence 

groups as measures of integrated capability deliveries to address 

warfighter concerns. According to MDA officials, the warfighter did not 

assess engagement sequence groups since they were organized in a way 

that did not align with warfighter operations, tactics, and procedures. 

During our audit, MDA had not replaced these previously reported 

integrated capability delivery baselines with new metrics. However, 

according to the Director of MDA, the agency is working to develop new 

baselines and schedules from which progress can be measured. In 

addition, agency officials told us that MDA is transitioning to an 

incremental BMDS capability delivery concept. However, MDA did not 

provide a definition of incremental BMDS capability deliveries or define 

them as schedule goals in the August 2009 BMDS Accountability Report. 

MDA also did not identify anticipated delivery dates for its performance 

 

33 MDA used the incremental declaration process to designate BMDS capability for its 

blocks. Three capability designations—early, partial, and full capability declarations— 

were applied to all BMDS elements, their hardware and software components, and 

engagement sequence groups. Each capability designation in the delivery schedule 

represented upgraded capacity to support the overall function of BMDS in its mission as 

well as the level of MDA confidence in the system’s performance. 

Page 31 GAO-10-311 Missile Defense Acquisitions 
metrics; however, the Director of MDA stated that developmental 

baselines are anticipated to be developed, reviewed and approved by the 

third quarter of fiscal year 2010. Furthermore, major MDA documents 

designed to communicate MDA’s BMDS schedule are not synchronized. 

Although MDA officials told us that they have recently synchronized the 

Integrated Master Schedule with the Integrated Master Test Plan, the two 

documents’ schedule still does not correspond to the BMDS Master Plan. 

The Integrated Master Test Plan will be revised in February 2010, 

rendering all three documents again unsynchronized with MDA’s 

acquisition strategy and programmatic decisions. 

While it has eliminated its externally reported integrated capability 

declaration goals, MDA continues to internally track capability 

declarations for at least two of its assets—the Sea-based X-band radar and 

the Shariki AN/TPY-2 radar—whose capability declarations slipped again 

in fiscal year 2009. The Sea-based X-band radar partial capability 

declaration appears to have slipped from fiscal year 2009 to fiscal year 

2010, while full capability will be declared with less knowledge than 

initially planned. According to MDA officials, the agency was planning for 

a partial capability declaration in June 2009, following successful 

execution of four test events—GTI-03, FTX-03, FTG-05, and GTD-03—and 

analysis. However, these events slipped over the course of the year, and 

according to MDA, the partial capability declaration was delayed to fiscal 

year 2010. According to the Director of MDA, the capability declaration is 

currently planned to occur after analysis can include both FTG-06 and a 

test—CD-03—planned for September 2010. It remains unclear what effect 

the problems encountered in FTG-06 will have on the declaration decision. 

The Shariki radar was designated by MDA to reach a full capability 

declaration by December 2008, but that was subsequently delayed to July 

2009. The radar was to undergo the military mission capability assessment, 

in which the warfighter verifies the radar’s readiness for full operational 

use by the services in the context of the present BMDS architecture. To 

date, the full capability declaration has not been made. Consequently, the 

date for the full mission capability has not been determined. Furthermore, 

as with the Sea-based X-band radar, the decision has not been made as to 

whether the Shariki radar capability declaration process will continue 

under the original plan or migrate to the new approach. 

Page 32 GAO-10-311 Missile Defense Acquisitions 
Despite testing delays, developmental problems, and the continued 

inability to complete the Director’s test-related knowledge points, MDA 

proceeded with manufacturing, production, and fielding of BMDS assets 

prior to operational testing and evaluation.34 

BMDS Assets Still Being 

Delivered Despite 

Developmental Problems 

and Test Delays 

The Aegis BMD program intends to execute a contract modification in the 

second quarter of 2010 to acquire 18 operationally configured SM-3 Block 

IB missiles, used for testing and fielding. These 18 SM-3 Block IB missiles 

were originally justified in the fiscal year 2010 budget request as needed 

for flight testing and for delivery to the fleet as operational assets. 

According to MDA’s September 2009 SM-3 Block IB utilization plan, 2 

missiles are to be used for flight tests, 10 are to be used for fleet 

deployment, and 6 are to be used for either fleet proficiency training or 

fleet deployment. However, MDA is proceeding with the contract 

modification even though flight testing of a fully integrated prototype for 

this missile type in an operational environment will not have occurred. 

The first flight test—FTM-16—that could demonstrate some performance 

of the missile is currently scheduled for the third quarter of fiscal year 

2011. In addition, the program is still maturing several critical 

technologies, such as the throttleable divert and attitude control system, 

and developmental testing of these technologies will not be complete until 

after the manufacturing decision for these 18 missiles. The manufacturing 

decision is also scheduled to occur almost a year before the manufacturing 

readiness review—currently scheduled for the second quarter of fiscal 

year 2011. Consequently, approval for production of this missile is 

scheduled before the results of developmental testing to demonstrate that 

the technologies and design are fully mature, before the first flight test 

demonstrates the system functions as intended, and before the readiness 

to begin manufacturing has been assessed—all of which increases the risk 

of costly design changes while production is underway. The Director of 

MDA and the Assistant Secretary of the Navy for Research, Development 

and Acquisition approved a developmental baseline in January 2010 that 

set production criteria and projected an initial production decision for 74 

SM-3 Block IB missiles in the third quarter of fiscal year 2011. 

 

34 We also recently reported in GAO, Missile Defense: DOD Needs to More Fully Assess 

Requirements and Establish Operational Units before Fielding New Capabilities,

GAO-09-856 (Washington, D.C.: Sept. 16, 2009), that DOD fielded missile defense equipment 

to units before those units were fully organized, manned, and trained to execute all of their 

ballistic missile defense responsibilities. 

Page 33 GAO-10-311 Missile Defense Acquisitions 
GMD continues to manufacture and field the Capability Enhancement II 

exoatmospheric kill vehicle prior to having it verified through 

operationally realistic flight testing. In March 2009, we reported that MDA 

had planned to conduct an intercept test to assess Capability 

Enhancement II exoatmospheric kill vehicle in the first quarter of fiscal 

year 2008—months before emplacing any interceptors with this 

configuration.35 However, developmental problems with the new 

configuration’s inertial measurement unit and problems with the target 

delayed the first flight test with the Capability Enhancement II 

configuration—FTG-06—until the fourth quarter of fiscal year 2009. This 

test was again delayed because of modeling uncertainties with the target 

and failures experienced with the Sea-Based X-Band radar during testing. 

GMD officials stated that they do not plan to adjust deliveries of the 

Capability Enhancement II exoatmospheric kill vehicle because of the test 

delay. However, MDA officials told us that they will not add Capability 

Enhancement II to the operational baseline until after FTG-06 has been 

conducted. As previously noted, FTG-06 was conducted in January 2010 

but was unsuccessful. According to the July 2009 revised Integrated 

Master Test Plan, the next planned intercept test with a similar 

configuration as FTG-06—a three-stage booster and a Capability 

Enhancement II exoatmospheric kill vehicle—is not scheduled to take 

place until at least fourth quarter fiscal year 2012. If MDA delivers 

Capability Enhancement II exoatmospheric kill vehicle units as currently 

scheduled, it will have delivered all of the Capability Enhancement II 

exoatmospheric kill vehicles that are currently under contract before the 

test is conducted. 

MDA’s concurrent approach to developing and fielding assets has led to 

concerns about the performance of some fielded assets. In March 2009, we 

reported that MDA had initiated a refurbishment program in 2007 to 

replace questionable parts and that some improvements had already been 

introduced into the manufacturing flow.36 However, according to program 

officials, they discovered additional problems during early refurbishments 

causing the program to expand its effort. Additionally, as MDA continues 

to manufacture ground based interceptors, it is discovering additional 

process and design issues, and the corrective actions are being 

incorporated into the refurbishment program. The program has three 

categories for refurbishments—minimal, moderate, and extensive—with 

 

35 GAO-09-338. 

36 GAO-09-338. 

Page 34 GAO-10-311 Missile Defense Acquisitions 
the cost of each vehicle going through refurbishment varying from vehicle 

to vehicle. MDA originally estimated that the cost for extensive 

refurbishment of an individual interceptor could reach as high as $24 

million. 

MDA continues to face challenges with transparency, accountability, and 

oversight controls and mechanisms. In establishing MDA in 2002, the 

Secretary of Defense directed the agency to develop the BMDS as a single 

program using a capabilities-based, spiral upgrade approach to quickly 

deliver a set of integrated defensive capabilities. To accomplish this 

mission, MDA was granted exceptional flexibility in setting requirements 

and managing the acquisition. This flexibility allowed MDA to begin 

delivering an initial defensive capability in 2004, but at the expense of 

transparency and accountability. 

MDA Lacks Controls 

and Mechanisms 

Needed to Establish 

Transparency, 

Accountability, and 

Oversight 

Since our first MDA report in 2004, we have repeatedly found that MDA’s 

approach for building its cost, schedule, and performance goals hindered 

transparency and limited accountability of the BMDS development effort. 

Specifically in April 2004, we reported that MDA’s goals did not provide a 

reliable and complete baseline for accountability purposes and decision 

making because these goals varied year to year, did not include all 

associated costs, and were based on assumptions about performance that 

were not explicitly stated. These conclusions still hold true for several 

aspects of the BMDS acquisition strategy. For example, MDA’s goals 

change continuously, cost baselines have yet to be established, and some 

details regarding performance goals are still not explicitly stated. Since 

2004, we have also made recommendations to develop baselines and 

report variances to those baselines to promote a higher level of 

transparency and accountability for the agency; to adjust its block strategy 

to ensure that it was knowledge-based and aligned with agency goals; and 

to strengthen oversight by, for example, having the Missile Defense 

Executive Board (MDEB) consider the extent to which MDA could adapt 

and adopt aspects of DOD’s standard acquisition policies to enhance 

oversight. 

Members of Congress have also expressed concerns regarding the block 

strategy, acquisition management strategy, accountability, and oversight of 

MDA. For example, in 2007, the House Appropriations Committee directed 

MDA to “develop a system-wide plan to report according to the spirit of 

Page 35 GAO-10-311 Missile Defense Acquisitions 
existing acquisition laws to improve accountability and transparency of its 

program.”37 More recently, in the National Defense Authorization Act for 

Fiscal Year 2008, Congress required MDA to establish acquisition cost, 

schedule, and performance baselines for each system element that has 

entered the equivalent of the systems development and demonstration 

phase of acquisition or is being produced or acquired for operational 

fielding.38 MDA is not yet fully compliant with this requirement. However, 

officials indicated that they are working toward fulfilling this requirement, 

but the expected date for full compliance was unknown at the time of our 

audit. 

While MDA has committed to take actions to address concerns about 

accountability and transparency, it has made limited progress in 

implementation, as shown in table 6. 

Table 6: MDA Commitments to Improve Transparency, Accountability, and Oversight 

MDA commitment Fulfilled Partially fulfilled Not fulfilled 

Implement a capabilities-based block structure aX 

Establish schedule, budget, and performance baselines for certain blocks b

where a firm commitment could be made to Congress 

X 

Report these baselines in its annual publication of goals X 

Identify significant variances from expected outcomes. Schedule delays, budget 

increases, and performance shortfalls will be explained as variances 

X 

Obtain independent cost estimates before establishing unit costs or cost 

baselines for blocks 

X 

Present MDA’s plans, progress, and problems in bimonthly quarterly execution 

reviews beginning in 2008 c

X 

Establish cost baselines at block level aX 

Establish unit cost estimates for BMDS assets being acquired and delivered to 

the warfighter 

X 

Source: GAO analysis and presentation of MDA data. 

a According to MDA, on December 7, 2007, in response to recommendations from GAO, MDA’s 

Director instituted a new capabilities-based block approach to better communicate its plans and goals 

to Congress. However, in June 2009, while MDA was still transitioning to the capabilities-based block 

approach, it was terminated by the Director. 

 

37 H.R. Rep. No. 110-279, at 382 (2007). 

38 Pub. L. No. 110-181 § 223(g). 

Page 36 GAO-10-311 Missile Defense Acquisitions 
b MDA provided some budget, schedule, and performance baselines for some blocks in its January 

2008 Statement of Goals. However, in 2009, it eliminated the block structure and its ability to maintain 

these baselines and measure progress against them. In its 2009 goals, the agency only provided 

portions of the previous schedule baselines and did not include any schedule metrics for its 

performance baseline as it had in its 2008 goals. Additionally, the agency did not report any budget 

baselines or data in its 2009 goals. 

c Quarterly execution reviews were terminated in June 2008, with only one meeting held after MDA’s 

commitment. 

MDA’s termination of its capabilities-based block approach in June 2009 

marked the third acquisition management strategy for the BMDS in the last 

3 years and effectively reduced transparency and accountability for the 

agency. As previously noted, MDA has organized the development of the 

BMDS using two different block approaches in the past—(1) sequential 2-

year blocks of BMDS-wide integrated capabilities and (2) five capabilitiesbased blocks of different MDA elements against particular threats. 

Changing the block structure is problematic because each time the block 

structure is changed, the connection is obscured between the old block 

structure’s scope and resources and the new block structure’s rearranged 

scope and resources. This makes it difficult for decision makers to hold 

MDA accountable for expected outcomes and clouds transparency of the 

agency’s efforts. 

Block Structure 

In March 2008, we reported that the agency’s capabilities-based block 

approach had begun to provide improvements to transparency and 

accountability, but as we recommended, transparency and accountability 

could have been further improved with MDA’s development and reporting 

of full acquisition cost estimates as well as independent verification of 

those costs.39

For the seventh year, we are unable to assess MDA’s actual costs against a 

baseline for total acquisition costs because the agency did not fulfill its 

commitment to baseline such costs. In its response to recommendations 

we made in March 2008, the agency committed to develop cost estimates, 

to obtain independent verification of those estimates, and to develop total 

acquisition cost baselines based on those estimates by blocks when a firm 

commitment could be made to Congress. Cost estimates were to be 

independently reviewed by DOD’s Cost Analysis Improvement Group.40

Cost 

 

39 GAO-08-448. 

40 The Weapon Systems Acquisition Reform Act of 2009, Pub. L. No. 111-23, transferred the 

functions of the Cost Analysis Improvement Group to the Office of the Director of Cost 

Assessment and Program Evaluation. 

Page 37 GAO-10-311 Missile Defense Acquisitions 
However, the Cost Analysis Improvement Group did not complete its 

review of any cost estimates because MDA was unable to provide all of the 

information and data it needed. MDA officials stated that they plan to 

develop capability increments at the program level, from which MDA will 

establish cost estimates at some point in the future. MDA officials also 

stated that they do not yet know when those estimates would be 

established or reported, although the Director of MDA informed us that his 

agency has recently reached agreement with DOD’s Cost Analysis 

Improvement Group to independently estimate THAAD’s cost and that 

other independent cost estimates of other BMDS elements will follow. 

Therefore, the timeframe for developing and reporting total acquisition 

cost baselines was also undetermined at the time of our audit. 

For the first time, MDA—in its August 2009 BMDS Accountability 

Report—provided unit costs for key Aegis BMD, THAAD, Sensors, and 

GMD assets. Normally, unit costs are reported in two ways: (1) program 

acquisition unit cost, which is the total cost for the development and 

procurement of the acquisition program divided by the total quantity, or 

(2) average procurement unit cost, which is the total procurement funds 

divided by the fielded quantity. MDA reported the latter for its BMDS 

assets noting that the elimination of the capabilities-based block structure 

made calculation of program acquisition unit cost more difficult and time 

consuming. Reporting the average procurement unit cost, while providing 

valuable insight into unit costs, excludes MDA’s historical and ongoing 

large investment in development of the assets. Considering this, MDA’s 

current approach to reporting unit costs provides a limited and incomplete 

view of those costs. According to the August 2009 BMDS Accountability 

Report, MDA plans to present both average procurement unit cost and 

program acquisition unit cost in the 2010 BMDS Accountability Report. 

However, according to MDA officials, they are in the process of baselining 

the different elements and they may not complete their estimates in time 

for this year’s BMDS Accountability Report. 

MDA met its commitment to identify and report significant performance 

variances in 2009. The agency describes a performance variance as any 

predicted or confirmed shortfall in BMDS performance metrics. In August 

2009, MDA reported that there were no variances in its performance 

metrics. However, MDA did not fulfill commitments to identify and report 

significant budget variances against established budget baselines. When 

MDA reported its annual goals in August 2009, budget variances were not 

reported. In addition, MDA did not include any budget information in its 

2009 annual goals. In its prior annual submission of goals, budget data 

Reporting Variances 

Page 38 GAO-10-311 Missile Defense Acquisitions 
were reported for each block, element, and capability associated with the 

BMDS. 

The extent of MDA’s efforts to improve DOD internal oversight was also 

less than planned in 2009. When it was established in 2002, MDA was given 

unprecedented flexibility to defer application of DOD acquisition policies 

and therefore given autonomy from the standard internal DOD 

management framework. According to MDA’s February 2008 report to 

Congress, the agency planned to enhance senior-level DOD oversight 

through both the MDEB which was established in 2007 and through 

quarterly reviews with the Under Secretary of Defense for Acquisition, 

Technology, and Logistics. MDA noted that these senior-level reviews 

were to substitute for the traditional accountability and oversight 

mechanisms conducted within DOD’s standard requirements, acquisition, 

and budget processes. However, after reviewing one MDA element early in 

fiscal year 2009, MDEB reviews of individual MDA programs were put on 

hold during the remainder of the fiscal year. An MDEB official told us that 

the board will resume program reviews once MDA makes a determination 

of each BMDS element’s acquisition status and determines their next 

major acquisition decision points. 

DOD Internal Oversight 

The MDEB was also established to provide oversight of significant issues 

facing the BMDS. However, the MDEB appeared to be less involved with 

certain decisions for the BMDS in 2009. For example, according to an 

MDEB official, the MDEB was heavily involved in the agency’s plan to 

implement a new block approach in 2007. However, the MDEB was not 

consulted prior to the Director of MDA’s decision to terminate the 

capabilities-based block approach. According to MDA, the MDEB was 

notified of the termination during a briefing on MDA’s proposed fiscal year 

2011 budget—2 months after the decision was made. The MDEB accepted 

the MDA budget proposals without reference to blocks. In addition, MDA 

did not brief the MDEB on the decision itself either, but rather notification 

was made via the restructuring of the budget proposal around programs 

rather than blocks. 

Beginning in 2008, MDA also committed to present its plans, progress, and 

problems to the Under Secretary of Defense for Acquisition, Technology 

and Logistics in a quarterly execution review every other month, 

alternating with the MDEB meetings. According to MDA’s February 2008 

Plan to Enhance the Accountability and Transparency of the Ballistic 

Missile Defense Program, quarterly execution reviews were expected to 

focus on actual results against schedule, budget, and performance goals 

and baselines as well as on earned value cost variances. However, these 

Page 39 GAO-10-311 Missile Defense Acquisitions 
reviews were terminated in June 2008, with only one meeting held after 

the February report to congressional defense committees. According to 

MDA officials, the MDA Director and officials in the Office of the Under 

Secretary of Defense for Acquisition, Technology and Logistics decided 

that MDEB meetings were sufficient to fulfill the intent of quarterly 

execution reviews. The Director of MDA informed us that as the MDA 

Acquisition Executive, he is executing performance evaluation reviews 

and the agency is also reviewed by the Office of the Under Secretary of 

Defense for Acquisition, Technology and Logistics. According to the 

Director of MDA, the first performance evaluation review will be of the 

Aegis BMD system in the second quarter fiscal year 2010. 

New MDA Initiatives 

Provide Opportunity to 

Increase Transparency and 

Accountability 

Although key controls and mechanisms needed to establish a sound 

acquisition process for MDA are still lacking, MDA has initiatives 

underway that could improve the transparency, accountability, and 

oversight of the acquisition of the BMDS. In June 2009, the MDA Director 

testified before the Senate Armed Services Committee that MDA is 

responding to the Weapon System Acquisition Reform Act of 200941

through the establishment of acquisition milestone decisions.42 These 

decisions are designed to ensure appropriate competitive acquisition 

strategies. He further noted that as the Acquisition Executive for the initial 

phases of missile defense, he is implementing milestone review and 

baseline reporting processes that are closely aligned with the principles of 

DOD’s acquisition policies, commonly referred to as the DOD 5000 series. 

He further noted that he recognized the need to incorporate the tenets of 

the DOD 5000 series to ensure that programs are affordable, are justified 

by the warfighter, and demonstrate acceptable risk through a milestone 

review process overseen by the MDEB. He also stated that MDA intends to 

separate the management of its technology and development programs. 

The Director testified that under his authority, potential programs that 

 

41 The Weapon Systems Acquisition Reform Act of 2009, Pub. L. No. 111-23, included 

provisions aimed at improving the organization and procedures of the Department of 

Defense for the acquisition of major weapon systems and addressed areas such as cost 

assessment and program evaluation, developmental test and evaluation and systems 

engineering, and performance assessments and root cause analyses for major defense 

acquisition programs. 

42 The milestone decision authority, is the designated individual with overall responsibility 

for a program. The milestone decision authority has the authority to approve entry of an 

acquisition program into the next phase of the acquisition process and is accountable for 

cost, schedule, and performance reporting to higher authority, including congressional 

reporting. The milestone decision authority for MDA is the Director of MDA. 

Page 40 GAO-10-311 Missile Defense Acquisitions 
may provide technological or material solutions for MDA will undergo a 

Milestone “A” decision to determine if they should become programs.43

These technology-based programs will be managed by knowledge points 

and incubated until maturity, at which time MDA along with the service 

acquisition executive will be able to make a Milestone “B” decision as to 

whether the program should be converted to a development program. He 

explained that the Under Secretary of Defense for Acquisition, Technology 

and Logistics will make Milestone “C” production decisions regarding the 

programs. 

We were only able to obtain limited insight into these initiatives because 

the agency only determined how they will be implemented at the end of 

our audit and was just beginning to implement them. In regards to the 

milestone decisions, the Director of MDA indicated that the agency is 

undertaking a baseline phase review process. The agency is transitioning 

to managing the six developmental baselines at the project element level. 

These baselines will be approved in developmental baseline reviews and 

managed through quarterly performance element reviews. MDA has 

identified three phases of development where baselines are approved—

technology development, product development, and initial production 

phases—which may ensure that the appropriate level of knowledge is 

obtained before acquisitions move from one phase to the next. Approval of 

the product development and initial production baselines will be jointly 

reviewed by the Director of MDA and the respective service acquisition 

executive. In addition, while our draft was being reviewed by MDA, the 

Director of MDA provided us with initial information regarding the 

definition of these new phases and the process for establishing cost, 

schedule, or performance baselines. Based on our initial briefing on MDA’s 

new process, it may include many of the necessary elements of a sound 

business case—such as establishing top-level cost, schedule, and 

performance measures that are available internally and externally for 

oversight. 

 

43The defense acquisition management framework defines the stages through which typical 

programs proceed. As each stage concludes, a decision must be made by the milestone 

decision authority to initiate, continue, advance, adjust, or terminate a project or program 

work effort or phase. The review associated with each of these decision points typically 

addresses program progress and risk, affordability, program trade-offs, acquisition strategy 

updates, and the development of exit criteria for the next phase or effort. Milestone 

decision points are Milestone A, for entry into the technology development phase; 

Milestone B, for entry into the engineering and manufacturing development stage (formerly 

known as system development and demonstration phase); and Milestone C, for entry into 

the production and deployment phase. 

Page 41 GAO-10-311 Missile Defense Acquisitions 
Although we were unable to fully evaluate MDA’s new initiatives, these 

initiatives do offer an opportunity for the agency to increase transparency 

and accountability if they are implemented in accordance with knowledgebased acquisition principles, leading to the establishment of sound 

business cases and realistic baselines. 

Over the past 10 years, we have conducted extensive research on 

successful programs and have found that successful defense programs 

ensure that their acquisitions begin with realistic plans and baselines prior 

to the start of development. We have previously reported that the key 

cause of poor weapon system outcomes, at the program level, is the 

consistent lack of disciplined analysis that would provide an 

understanding of what it would take to field a weapon system before 

system development begins. We have reported that there is a clear set of 

prerequisites that must be met by each program’s acquisition strategy to 

realize successful outcomes.44 These prerequisites include the following: 

• Establishing a clear, knowledge-based, executable business case for 

the product. An executable business case is one that provides 

demonstrated evidence that (1) the identified needs are real and 

necessary and can best be met with the chosen concept and (2) the 

chosen concept can be developed and produced within existing 

resources—including technologies, funding, time, and management 

capacity. Knowledge-based acquisition principles and business cases 

combined are necessary to establish realistic cost, schedule and 

performance baselines. Without documented realistic baselines there 

is no foundation to accurately measure program progress. 

• Separating technology development activities from product 

development activities. As noted earlier, the Director of MDA plans to 

separate technology development and product development for the 

BMDS. The process of developing technology culminates in 

discovery—the gathering of knowledge—and must, by its nature, allow 

room for unexpected results and delays. When immature technologies 

are brought onto the critical path of product development programs 

too early, they often cause long delays in an environment where large 

workforces must be employed; complex tools, plants, and facilities 

must be operated; long and expensive supplier networks must be paid; 

and the product itself must sometimes be redesigned once the final 

 

44 GAO, Defense Acquisitions: Measuring the Value of DOD’s Weapon Programs Requires 

Starting with Realistic Baselines, GAO-09-543T (Washington, D.C.: Apr. 1, 2009). 

Page 42 GAO-10-311 Missile Defense Acquisitions 
form of the technologies is known. Ensuring that only mature 

technologies are brought into product development is a key step for 

successful programs. 

• Employing early systems engineering discipline in order to develop 

realistic cost and schedule estimates prior to development start.

Early systems engineering provides the knowledge a product 

developer needs to identify and resolve performance and resource 

gaps before product development begins, either by reducing 

requirements, deferring them to the future, or increasing the estimated 

cost for the weapon system’s development. Requirements that are too 

risky given the state of technology and design should not be allowed 

into this expensive environment. MDA’s Director noted that he has 

taken steps to enhance systems engineering by designating a senior 

executive position to establish engineering policy, ensure the 

disciplined practice of systems engineering fundamentals, and develop 

the systems engineering competencies of the missile defense 

workforce; creating knowledge centers; and increasing the number of 

recent engineering school graduates. While these initiatives hold 

promise for the future, they could provide further enhancements if 

they are used as the foundation to develop realistic cost and schedule 

estimates for the BMDS. 

These practices could address MDA’s past problems of initiating programs 

and beginning system development based on limited systems engineering 

knowledge. These programs depended on critical technologies that were 

immature and not ready for product development or production. The 

Director of MDA acknowledged the importance of changing MDA’s 

acquisition approach to adopt knowledge-based acquisition processes. 

In order to respond to a presidential directive to deliver a missile defense 

capability in a rapid manner, MDA has been given unprecedented funding 

and decision-making flexibility. This flexibility has allowed concurrent 

development, testing, manufacturing and fielding and enabled MDA to 

quickly develop and field the first increment of capability in 2005. 

However, while this approach has expedited the fielding of assets, it also 

resulted in less transparency and accountability than is normally present 

in a major weapon program. Since the program’s inception, MDA’s lack of 

baselines and its management of the BMDS with high levels of uncertainty 

about requirements and program cost estimates effectively set the missile 

defense program on a path to an undefined destination at an unknown 

cost. Across the agency, these practices left programs with limited 

knowledge and few opportunities for crucial management oversight and 

Conclusions 

Page 43 GAO-10-311 Missile Defense Acquisitions 
decision making concerning the agency’s investment and the warfighter’s 

continuing needs. At the program level, these practices contributed to 

quality problems affecting targets acquisitions, which in turn, hampered 

MDA’s ability to conduct tests as planned. 

As MDA transitions to new leadership, a new acquisition strategy, a new 

test strategy, and a shift in emphasis toward early intercept capabilities, 

the agency has an opportunity to chart a course that enables transparency 

and accountability as well as flexibility, and it appears committed to doing 

so. Importantly, the Director of MDA has begun new initiatives in 

accordance with guiding principles of DOD’s acquisition policies, which 

already embrace knowledge-based practices and sound management 

controls. The Director of MDA intends to apply these new policies to each 

element or appropriate portions of the elements, as is currently done 

across DOD, in order to provide a foundation for the Congress and others 

to assess progress and hold senior leadership accountable for outcomes. 

These initial steps are promising, but it will take time to fully implement 

them and once implemented they will need to be sustained and the tools 

consistently used in order to establish accountability. If this is done 

effectively, with baselines set at a program level, MDA can respond to 

strategic changes affecting the overall configuration of the system without 

losing basic knowledge about cost, schedule, and performance. Such 

actions do not have to result in a slower or more burdensome acquisition 

process. In the past, weapon programs often rushed into systems 

development before they were ready, in part because DOD’s acquisition 

process did not require early formal milestone reviews and programs 

would rarely be terminated once underway. Over time, in fact, these 

changes could help programs replace risk with knowledge, thereby 

increasing the chances of developing weapon systems within cost and 

schedule targets while meeting user needs. 

As MDA implements its initiatives to improve transparency, accountability, 

and oversight, and begins efforts to manage and oversee MDA at the 

element level, we recommend that the Secretary of Defense direct MDA to 

take the following eight actions: 

Recommendations for 

Executive Action 

• Establish cost, schedule, and performance baselines for the acquisition 

of each new class of target when it is approved by the Director prior to 

proceeding with acquisition and report those baselines to Congress. 

Page 44 GAO-10-311 Missile Defense Acquisitions 
• Obtain independent Cost Assessment and Program Evaluation cost 

estimates in support of these cost baselines. 

• Ensure that program acquisition unit costs for BMDS assets are 

reported in the BMDS Accountability Report, to provide Congress with 

more complete and comprehensive information by including 

development costs. 

• Update DOD’s Plan to Enhance the Accountability and Transparency 

of the Ballistic Missile Defense Program to reflect MDA’s current 

initiatives and include dates for fulfilling each commitment. 

• Report top-level test goals for each element, or appropriate portions 

thereof, to Congress in the next BMDS Accountability Report. 

• Develop and report to Congress in the annual BMDS Accountability 

Report a measure for schedule baseline goals that incorporates 

delivering integrated capabilities to the warfighter. 

• Develop and report to Congress in the annual BMDS Accountability 

Report the dates at which performance baselines will be achieved. 

• Report to Congress variances against all established baselines. 

Several of these actions, such as establishing cost, schedule, and 

performance baselines, have been recommended in prior GAO reports or 

addressed in legislation. This report, however, restates these 

recommendations in the context of changes made to the missile defense 

program, for example, the deletion of the block structure and increased 

focus on elements. 

We further recommend that the Secretary of Defense direct MDA to take 

the following two actions: 

• Delay the manufacturing decision for SM-3 Block IB missiles intended 

for delivery to the fleet as operational assets until after (1) the critical 

technologies have completed developmental testing, (2) a successful 

first flight test demonstrates that the system functions as intended, and 

(3) the successful conclusion of the manufacturing readiness review. 

• Ensure that developmental hardware and software changes are not 

made to the operational baseline that disrupt the assessments needed 

to understand the capabilities and limitations of new BMDS 

developments. 

Page 45 GAO-10-311 Missile Defense Acquisitions 
DOD provided written comments on a draft of this report. These 

comments are reprinted in appendix I. DOD also provided technical 

comments, which were incorporated as appropriate. 

Agency Comments 

and Our Evaluation 

DOD fully concurred with 9 of our 10 recommendations, including our 

recommendation to establish cost, schedule, and performance baselines 

for the acquisition of each new class of target when it is approved by the 

MDA Director prior to proceeding with acquisition and report those 

baselines to Congress. In response to our recommendation, DOD 

commented that MDA has already established and the Director has 

approved cost, schedule, and performance baselines for the acquisition of 

each new class of target. The department noted that these baselines are 

contained in multiple documents and will be brought together in a Target 

Program Baseline prior to contract award. However, MDA should ensure 

that the Target Program Baseline establishes top-level cost, schedule, and 

performance baseline measures similar to approved program baselines 

that are established for DOD’s major defense acquisitions and available for 

internal and external oversight. It is unclear whether MDA will make its 

Target Program Baseline available internally for oversight and report it to 

Congress as we recommended. 

DOD partially concurred with our recommendation that the Secretary of 

Defense direct MDA to delay the manufacturing decision for SM-3 Block 

IB missiles intended for delivery to the fleet as operational assets until 

after (1) the critical technologies have completed developmental testing, 

(2) a successful first flight test demonstrates that the system functions as 

intended, and (3) the successful conclusion of the manufacturing 

readiness review. In response to this recommendation, DOD stated that 

manufacturing of SM-3 Block IB missiles to support testing is under way, 

but the production decision for SM-3 Block IB missiles used for fleet 

operation is planned to occur after criteria listed in our recommendation 

have been met. However, during our review, we found that the 18 SM-3 

Block IB missiles in question were originally justified in the fiscal year 

2010 budget request as needed for “flight testing and for delivery to the 

fleet as operational assets.” In addition, Aegis BMD Program Office 

responses related to this matter indicate that these missiles will be used 

operationally if a security situation requires it. Furthermore, according to 

MDA’s September 2009 SM-3 Block IB utilization plan briefed and 

approved by the MDA Acquisition Strategy Board, only 2 of these missiles 

are specifically designated for flight tests, while 10 are to be used for fleet 

deployment and 6 are to be used for either fleet proficiency training or 

fleet deployment. Based on this information, the contract modification to 

acquire these 18 SM-3 Block IB missiles will take place before the critical 

Page 46 GAO-10-311 Missile Defense Acquisitions 
technologies are fully matured at the conclusion of FTM-16—the first SM-3 

Block IB end-to-end flight test of a fully integrated, productionrepresentative prototype. Thus, we maintain that approval for 

manufacturing of these 18 SM-3 Block IB missiles—the majority of which 

will be deployed to the fleet—is scheduled to occur before the results of 

developmental testing to demonstrate that the technologies and design are 

fully mature, before the first flight test demonstrates the system functions 

as intended, and before the readiness to begin manufacturing has been 

assessed—all of which increase the risk of costly design changes and 

retrofit. 

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

Director of MDA. The report also is 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 or chaplainc@gao.gov. Contact points for our 

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

last page of this report. GAO staff who made major contributions to this 

Cristina Chaplain 

report are listed in appendix III. 

Director 

Acquisition and Sourcing Management 

Page 47 GAO-10-311 Missile Defense Acquisitions 
List of Committees 

The Honorable Carl Levin 

Chairman 

The Honorable John McCain 

Ranking Member 

Committee on Armed Services 

United States Senate 

The Honorable Daniel K. Inouye 

Chairman 

The Honorable Thad Cochran 

Ranking Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate 

The Honorable Ike Skelton 

Chairman 

The Honorable Howard P. McKeon 

Ranking Member 

Committee on Armed Services 

House of Representatives 

The Honorable John P. Murtha 

Chairman 

The Honorable C.W. Bill Young 

Ranking Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

Page 48 GAO-10-311 Missile Defense Acquisitions 
Appendix I: Comments from the Department Appendix I: Comments from the Department of Defense 

of Defense 

Page 49 GAO-10-311 Missile Defense Acquisitions
Appendix I: Comments from the Department 

of Defense 

Page 50 GAO-10-311 Missile Defense Acquisitions 
Appendix I: Comments from the Department 

of Defense 

Page 51 GAO-10-311 Missile Defense Acquisitions 
Appendix I: Comments from the Department 

of Defense 

Page 52 GAO-10-311 Missile Defense Acquisitions 
Appendix II: Scope and Methodology Appendix II: Scope and Methodology 

To examine the progress that eight Missile Defense Agency (MDA) 

elements have made during fiscal year 2009 toward schedule, testing, and 

performance baselines, we developed data collection instruments that 

were completed by each element’s program office. These instruments 

collected detailed information on prime contracts, design reviews, test 

schedules and results, element performance, noteworthy progress, lessons 

learned, and challenges facing the elements during the fiscal year. In 

addition, we reviewed individual element Program Execution Reviews, 

test plans and reports, production plans, staffer day briefings, and other 

requirements documents. We held interviews with officials in each 

element’s program office and followed up on the information we received 

with MDA’s Agency Operations Office; the Department of Defense’s (DOD) 

Office of the Director, Operational Test and Evaluation; and MDA’s 

Ballistic Missile Defense System (BMDS) Operational Test Agency. 

To further review individual element and BMDS-level performance 

progress during the fiscal year, we met with officials in MDA’s Modeling 

and Simulation Directorate at the Missile Defense Integration and 

Operations Center, individual element program offices, and MDA’s BMDS 

Operational Test Agency to discuss modeling and simulations plans and 

procedures as well as other performance metrics. We also reviewed DOD 

and MDA policies, memos, and flight test plans related to modeling and 

simulations. In addition, we reviewed various elements’ verification, 

validation, and accreditation plans, MDA performance briefings, and 

validation, verification, and accreditation plans for MDA’s BMDS 

Performance Assessment 2009. 

We assessed MDA’s testing and target development progress by reviewing 

MDA’s Integrated Master Test Plans, Integrated Master Schedule, target 

acquisition plan, and target business case analysis. In addition, we met 

with officials in the Targets and Countermeasures Program Office to 

obtain information on MDA’s acquisition management strategy including 

plans for cost, schedule, and testing. We also met with MDA’s testing 

directorate, MDA’s BMDS Operational Test Agency, and DOD’s Office of 

the Director of Test and Evaluation to discuss the progress, challenges, 

and lessons learned during fiscal year 2009 testing. 

To analyze MDA’s changing acquisition approach and the agency’s 

progress in addressing issues related to transparency, accountability, and 

oversight, we interviewed officials from the Office of the Under Secretary 

of Defense for Acquisition, Technology and Logistics; MDA’s Agency 

Operations Directorate; MDA’s Advanced Technology Directorate; and 

MDA’s Office of Quality, Safety, and Mission Assurance Directorate. We 

Page 53 GAO-10-311 Missile Defense Acquisitions
Appendix II: Scope and Methodology 

also reviewed various MDA statements and documents related to MDA’s 

block structure. We reviewed DOD acquisition system policy and various 

DOD directives to gain insight into other DOD systems’ accountability and 

oversight mechanisms. We also analyzed MDA’s acquisition directives and 

Missile Defense Executive Board briefings to examine MDA’s current level 

of oversight. In addition, we reviewed MDA budget estimate submission 

justifications, Integrated Master Test Plans, the Ballistic Missile Defense 

Master Plan, the BMDS Accountability Report, and prior reports that 

outlined the agency’s baselines and goals. 

Our work was performed both at MDA headquarters in Arlington, Virginia 

and at various program offices located in Huntsville, Alabama. In Arlington 

we met with officials from the Aegis Ballistic Missile Defense Program 

Office; Airborne Laser Program Office; Command, Control, Battle 

Management, and Communications (C2BMC) Program Office; MDA’s 

Agency Operations Office; DOD’s Office of the Director, Operational Test 

and Evaluation; and the Office of the Under Secretary of Defense for 

Acquisition, Technology and Logistics. In Huntsville, Alabama we 

interviewed officials from the Ground-based Midcourse Defense (GMD) 

Program Office, the Sensors Program Office, the Terminal High Altitude 

Area Defense Project Office, the Targets and Countermeasures Program 

Office, the Advanced Technology Directorate, and the Office of the 

Director for BMDS Tests. We met with officials from the Missile Defense 

Integration and Operations Center at Schriever Air Force Base in Colorado 

Springs, Colorado, to discuss the C2BMC and Space Tracking and 

Surveillance System elements as well as to receive further information on 

MDA’s models and simulations. Additionally, we interviewed Raytheon 

officials in Tucson, Arizona, to discuss the Kinetic Energy Interceptor, 

GMD, and Aegis BMD elements’ status. 

In December 2007, the conference report accompanying the National 

Defense Authorization Act for Fiscal Year 2008 noted the importance of 

DOD and MDA providing information to GAO in a timely and responsive 

manner to facilitate the review of ballistic missile defense programs. 

During the course this audit, we experienced significant delays in 

obtaining information from MDA. During the audit, MDA did not always 

provide GAO staff with expeditious access to requested documents and 

articles of information, which delayed some audit analysis and contributed 

to extra staff hours. Of the documents and information we requested, we 

received approximately 24 percent within the 10 to15 business day 

Page 54 GAO-10-311 Missile Defense Acquisitions 
Appendix II: Scope and Methodology 

protocols that were agreed upon with MDA.1 Pre-existing documentation 

took MDA on average about 28 business days to provide and many preexisting documents took 40 business days or more to be provided to GAO. 

Notwithstanding these delays, we were able to obtain the information 

needed to satisfy our objectives in accordance with generally accepted 

government auditing standards. 

We conducted this performance audit from April 2009 to February 2010 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

 

1

 These data are current as of December 18, 2009. 

Page 55 GAO-10-311 Missile Defense Acquisitions 
Appendix III: GAO Contact and Staff 

Acknowledgments 

Cristina Chaplain (202) 512-4841 or chaplainc@gao.gov

In addition to the contact named above, David Best, Assistant Director; 

LaTonya Miller; Ivy Hübler; Tom Mahalek; Steven Stern; Meredith Allen 

Kimmett; Wiktor Niewiadomski; Kenneth E. Patton; Karen Richey; Robert 

Swierczek; and Alyssa Weir made key contributions to this report. 

Page 56 GAO-10-311 Missile Defense Acquisitions

GAO Contact 

Acknowledgments 

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