Report of the 

Defense Science Board/ 

Air Force Scientific Advisory Board 

Joint Task Force 

on

Acquisition of National Security Space 

Programs

May 2003 

Office of the Under Secretary of Defense 

For Acquisition, Technology, and Logistics 

Washington, D.C. 20301-3140
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Joint Task Force on Acquisition of National Security Space Programs

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Standard Form 298 (Rev. 8-98)

Prescribed by ANSI Std Z39-18 
This report is a joint product of the Defense Science Board (DSB) and Air Force Scientific 

Advisory Board (AFSAB). The DSB is a Federal Advisory Committee established to provide 

independent advice to the Secretary of Defense. The AFSAB is a Federal Advisory Committee 

which provides a link between the Air Force and the nation’s scientific community. Statements, 

opinions, conclusions, and recommendations in this report do not necessarily represent the 

official position of the U.S. Air Force or the Department of Defense. 

This report is UNCLASSIFIED. 
i 

MEMORANDUM FOR UNDER SECRETARY OF DEFENSE (ACQUISITION, 

TECHNOLOGY & LOGISTICS) 

SUBJECT: Final Report of the Defense Science Board (DSB) Task Force on 

Acquisition of National Security Space Programs 

We are pleased to forward the final report of the DSB Task Force on Acquisition 

of National Security Space Programs. The Task Force was chartered by the Under 

Secretary of Defense (ATL), Secretary of the Air Force, and Undersecretary of the Air 

Force/Director of the NRO. It was asked to investigate systemic issues related to space 

systems acquisition, to include all aspects from requirements definition and budgetary 

planning through staffing and program execution; and to recommend improvements to 

the acquisition of space programs from initiation to deployment. 

Over the course of this study, the members of this team discerned profound 

insights into systemic problems in space acquisition. Their findings and conclusions 

succinctly identified requirements definition and control issues; unhealthy cost bias in 

proposal evaluation; widespread lack of budget reserves required to implement high 

risk programs on schedule; and an overall underappreciation of the importance of 

appropriately staffed and trained system engineering staffs to manage the 

technologically demanding and unique aspects of space programs. This task force 

unanimously recommends both near term solutions to serious problems on critical space 

programs as well as long-term recovery from systemic problems. 

This report highlights our nation’s dependence on space assets to perform our 

national security mission and delineates appropriate remedies for a strategic recovery 

to US National Security Space programs. I endorse all of the Task Force’s 

recommendations and propose you forward the report to the Secretary of Defense. 

Given the significance of this report, the task force should reconvene in 

approximately one year to review the progress of the corrective actions. 

Dr. Daniel E. Hastings 

AFSAB Chairman 

Dr. William Schneider, Jr. 

DSB Chairman 
ii 
iii 

MEMORANDUM FOR CHAIRMAN, DEFENSE SCIENCE BOARD 

SUBJECT: Final Report of the Defense Science Board/Air Force Scientific Advisory 

Board Joint Task Force on Acquisition of National Security Space Programs 

Attached is the final report of the Defense Science Board/Air Force Scientific Advisory 

Board Joint Task Force on Acquisition of National Security Space Programs. The task 

force was chartered by the Under Secretary of Defense (ATL), Secretary of the Air Force, 

and Undersecretary of the Air Force/Director of the NRO to review the acquisition of 

national security space programs, identify and characterize systemic problems, and 

recommend improvements. Additionally, we were tasked to review the current status of 

three specific programs: the Space-Based Infrared System (SBIRS) High, the Future 

Imaging Architecture (FIA), and the Evolved Expendable Launch Vehicle (EELV). 

Recent operations have once again illustrated the degree to which U.S. national security 

depends on space capabilities. We believe this dependence will continue to grow, and as it 

does, the systemic problems we identify in our report will become only more pressing and 

severe. Needless to say, the final report details our full set of findings and 

recommendations. Here I would simply underscore four key points: 

1. Cost has replaced mission success as the primary driver in managing acquisition 

processes, resulting in excessive technical and schedule risk. We must reverse this 

trend and reestablish mission success as the overarching principle for program 

acquisition. It is difficult to overemphasize the positive impact leaders of the space 

acquisition process can achieve by adopting mission success as a core value. 

2. The space acquisition system is strongly biased to produce unrealistically low cost 

estimates throughout the acquisition process. These estimates lead to unrealistic 

budgets and unexecutable programs. We recommend, among other things, that the 

government budget space acquisition programs to a most probable (80/20) cost, with a 

20–25 percent management reserve for development programs included within this 

cost. 

3. Government capabilities to lead and manage the acquisition process have seriously 

eroded. On this count, we strongly recommend that the government address acquisition 

staffing, reporting integrity, systems engineering capabilities, and program manager 

authority. The report details our specific recommendations, many of which we believe 

require immediate attention. 
iv 

4. While the space industrial base is adequate to support current programs, long-term 

concerns exist. A continuous flow of new programs—cautiously selected—is required 

to maintain a robust space industry. Without such a flow, we risk not only our 

workforce, but also critical national capabilities in the payload and sensor areas. 

The task force would like to express its appreciation to all those who contributed their 

knowledge, insights, and hard work to this effort. 

Mr. A. Thomas Young 

Chairman 
v 

TABLE OF CONTENTS 

DSB TRANSMITTAL LETTER .................................................................................i 

TASK FORCE CHAIRMAN’S TRANSMITTAL LETTER ............................iii 

TABLE OF FIGURES ................................................................................................. vi 

1.0 EXECUTIVE SUMMARY........................................................................................... 1 

1.1 Key Findings ................................................................................................................. 1 

1.2 Recommendations......................................................................................................... 4 

1.3 Specific Programs ......................................................................................................... 6

2.0 CHARTER .................................................................................................................... 8 

2.1 Problem Statement ........................................................................................................ 8 

2.2 Scope............................................................................................................................. 8 

3.0 STUDY METHODOLOGY ......................................................................................... 9 

4.0 BACKGROUND ........................................................................................................ 10 

5.0 DEPENDENCY ON SPACE...................................................................................... 12 

6.0 ACQUISITION SYSTEM ASSESSMENT................................................................ 13 

6.1 Objectives.................................................................................................................... 13 

6.2 Unrealistic Budgeting ................................................................................................. 14 

6.3 Requirements Control ................................................................................................. 19 

6.4 Acquisition Expertise.................................................................................................. 23 

6.5 Industry ....................................................................................................................... 26 

7.0 CAPABILITY OF THE INDUSTRIAL BASE.......................................................... 28 

8.0 SPECIAL ATTENTION PROGRAMS...................................................................... 30 

8.1 SBIRS High................................................................................................................. 30 

8.2 FIA .............................................................................................................................. 31 

8.3 EELV .......................................................................................................................... 31 

9.0 SUMMARY AND CONCLUSIONS ......................................................................... 33 

APPENDICES 

A. TERMS OF REFERENCE .......................................................................................... 35 

B. TASK FORCE MEMBERSHIP................................................................................... 39 

C. MEETINGS DATES AND LOCATIONS................................................................... 45 

D. BRIEFINGS RECEIVED ............................................................................................ 46 

E. REPORTS AND PUBLICATIONS OF INTEREST ................................................... 49 

F. ACRONYMS................................................................................................................ 51 

G. TASK FORCE BRIEFING .......................................................................................... 52 
vi 

TABLE OF FIGURES 

Figure 1: Program characteristics ..................................................................................... 16 

Figure 2: Observed space program characteristics............................................................ 16 

Figure 3: One route to success .......................................................................................... 17 

Figure 4: Inexperienced program manager or an inviolate schedule ................................ 17 

Figure 5: AEHF case study—requirements growth prior to program initiation ............... 20 

Figure 6: SBIRS case study—requirements growth during program execution............... 22 
1.0 EXECUTIVE SUMMARY 

he Undersecretary of Defense (Acquisition, Technology, and Logistics) and the 

Secretary of the Air Force cosponsored the Joint Defense Science Board (DSB)/Air 

Force Science Advisory Board (AFSAB) Task Force on the Acquisition of National 

Security Space Programs and directed the task force to 

• Recommend improvements to the acquisition of space programs from 

initiation to deployment; 

• Assess the nation’s dependency on space; 

• Characterize problems by looking at underlying causes and systemic issues 

such as cost growth and schedule delays that impact all space programs; and 

• Analyze the Space-Based Infrared System (SBIRS), Future Imaging 

Architecture (FIA), and Evolved Expendable Launch Vehicle (EELV). 

Over the course of its deliberations, the task force met with responsible 

representatives of acquisition- and operation-oriented government organizations, visited 

national security space contractors, and reviewed a broad spectrum of space programs 

and issues. The panel also interviewed senior government and industry officials, both 

active and retired. The scope of the study included both classified and unclassified space 

acquisition activities. 

The task force conducted meetings during the latter part of 2002 and evaluated 

issues that have developed over years of acquisition activity. In so doing, we observed 

many positive steps already being taken to try to correct deficiencies in the space 

acquisition process. We did not attempt to investigate or evaluate initiatives that were 

already underway. 

1.1 Key Findings 

During the 1990s, several changes occurred in the national security space environment: 

• Declining acquisition budgets, 

• Acquisition reform with significant unintended consequences, 

• Increased acceptance of risk, 

• Unrealized growth of a commercial space market, 

• Increased dependence on space by an expanding user base, 

• Consolidation of the space industrial base. 

All of this took place in the face of changing national security needs as the Department 

of Defense (DoD) transitioned from the structured cold war environment to the more 

global and unpredictable threat environment we see today. The following list 

summarizes the task force’s key findings: 

• U.S. national security is critically dependent upon space capabilities and that 

dependence will continue to grow. Pressing requirements exist to monitor 

activities and events throughout the world, transfer massive quantities of data, and 

project force on a global scale. As a nation, we require robust space assets to meet 

these requirements effectively. We rely on the current generation of operational 

T 
Acquisition of National Security Space Programs 

2 

space systems to support national security needs on a daily basis. While nonspace 

systems clearly contribute major capabilities that help meet national security 

needs, we see no viable alternative to the unique capabilities that space systems 

provide. 

• The task force found five basic reasons for the significant cost growth and 

schedule delays in national security space programs. Any of these will have a 

significant negative effect on the success of a program. And, when taken in 

combination, as this task force found in assessing recent space acquisition 

programs, these factors have a devastating effect on program success. 

1. Cost has replaced mission success as the primary driver in managing 

space development programs, from initial formulation through execution. 

Space is unforgiving; thousands of good decisions can be undone by a 

single engineering flaw or workmanship error, and these flaws and errors 

can result in catastrophe. Mission success in the space program has 

historically been based upon unrelenting emphasis on quality. The change 

of emphasis from mission success to cost has resulted in excessive 

technical and schedule risk as well as a failure to make responsible 

investments to enhance quality and ensure mission success. We clearly 

recognize the importance of cost, but we can achieve our cost 

performance goals only by managing quality and doing it right the first 

time. 

2. Unrealistic estimates lead to unrealistic budgets and unexecutable 

programs. The space acquisition system is strongly biased to produce 

unrealistically low cost estimates throughout the process. During program 

formulation, advocacy tends to dominate and a strong motivation exists to 

minimize program cost estimates. Independent cost estimates and 

government program assessments have proven ineffective in countering 

this tendency. Proposals from competing contractors typically reflect the 

minimum program content and a “price to win.” Analysis of recent space 

competitions found that the incumbent contractor loses more than 90 

percent of the time. An incoming competitor is not “burdened” by the 

actual cost of an ongoing program, and thus can be far more optimistic. In 

many cases, program budgets are then reduced to match the winning 

proposal’s unrealistically low estimate. The task force found that most 

programs at the time of contract initiation had a predictable cost growth 

of 50 to 100 percent. The unrealistically low projections of program cost 

and lack of provisions for management reserve seriously distort 

management decisions and program content, increase risks to mission 

success, and virtually guarantee program delays. 

3. Undisciplined definition and uncontrolled growth in system requirements 

increase cost and schedule delays. As space-based support has become 

more critical to our national security, the number of users has grown 

significantly. As a result, requirements proliferate. In many cases, these 

requirements involve multiple systems and require a “system of systems” 
Acquisition of National Security Space Programs 

3 

approach to properly resolve and allocate the user needs. The space 

acquisition system lacks a disciplined management process able to 

approve and control requirements in the face of these trends. Clear 

tradeoffs among cost, schedule, risk, and requirements are not well 

supported by rigorous system engineering, budget, and management 

processes. During program initiation, this results in larger requirement 

sets and a growth in the number and scope of key performance 

parameters. During program implementation, ineffective control of 

requirements changes leads to cost growth and program instability. 

4. Government capabilities to lead and manage the space acquisition 

process have seriously eroded. This erosion can be traced back, in part, to 

actions taken in the acquisition reform environment of the 1990s. For 

example, system responsibility was ceded to industry under the Total 

System Performance Responsibility (TSPR) policy. This policy 

marginalized the government program management role and replaced 

traditional government “oversight” with “insight.” The authority of 

program managers and other working-level acquisition officials 

subsequently eroded to the point where it reduced their ability to succeed 

on development programs. The task force finds this to be particularly 

important because the program manager is the single individual (along 

with the program management staff) who can make a challenging space 

program succeed. This requires strong authority and accountability to be 

vested in the program manager. Accountability and management 

effectiveness for major multiyear programs are diluted because the tenure 

of many program managers is less than 2 years. 

Widespread shortfalls exist in the experience level of government 

acquisition managers, with too many inexperienced personnel and too few 

seasoned professionals. This problem was many years in the making and will 

require many years to correct. The lack of dedicated career field management 

for space and acquisition personnel has exacerbated this situation. In the 

interim, special measures are required to mitigate this failure. 

Policies and practices inherent in acquisition reform inordinately 

devalued the systems acquisition engineering workforce. As a result, today’s 

government systems engineering capabilities are not adequate to support the 

assessment of requirements, conduct trade studies, develop architectures, 

define programs, oversee contractor engineering, and assess risk. With 

growing emphasis on effects-based capabilities and cross-system integration, 

systems engineering becomes even more important and interim corrective 

action must be considered. 

The government acquisition environment has encouraged excessive 

optimism and a “can do” spirit. Program managers have accepted programs 

with inadequate resources and excessive levels of risk. In some cases, they 

have avoided reporting negative indicators and major problems and have 

been discouraged from reporting problems and concerns to higher levels for 

timely corrective action. 
Acquisition of National Security Space Programs 

4 

5. Industry has failed to implement proven practices on some programs.

Successful development of space programs requires strong leadership and 

rigorous management processes both in industry and in government. 

Government actions, contract provisions, and fee structures can cause 

industry to lose focus and can even penalize sound program implementation 

practices. It is of paramount importance that industry leadership assures that 

these programs are implemented utilizing proven management and 

engineering practices. The task force found instances in SBIRS and FIA 

where this leadership was deficient. 

• The space industrial base is adequate to support current programs, although 

there are long-term concerns. Nearly every mission area in national security 

space is in transition, with development of an entirely new satellite system or a 

major block upgrade. Other major space system developments are in the 

formulation stage. These factors have led to concerns that the industrial base may 

not be adequate to support the required range of activities. The task force found 

that prime contractors have an adequate workforce to handle the current and nearterm planned programs, and excess production capacity exists. Today, turnover of 

skilled work force is low and sufficient new hires are available. Second- and 

third-tier contractors are having problems, primarily due to low demand for the 

components they produce. In some circumstances, domestic capabilities required 

to support national security space are at risk. This will require proactive 

government involvement for a small number of selected cases. On balance, the 

industry can support current and near-term planned programs. 

Commercial space activity has not developed to the degree anticipated, 

and the expected national security benefits from commercial space have not 

materialized. The government must recognize this reality in planning and 

budgeting national security space programs. 

In the far term, there are significant concerns. The aerospace industry is 

characterized by an aging workforce, with a significant portion of this force 

eligible for retirement currently or in the near future. Developing, acquiring, and 

retaining top-level engineers and managers for national security space will be a 

continuing challenge, particularly since a significant fraction of the engineering 

graduates of our universities are foreign students. 

1.2 Recommendations 

The task force found significant, systemic problems in the acquisition of national 

security space systems that require immediate attention, both to correct current 

deficiencies and to prevent these deficiencies in future programs. The panel recommends 

the following immediate actions:

1. The Under Secretary of the Air Force/Director National Reconnaissance Office 

(USecAF/DNRO) should establish mission success as the guiding principle in all 

space systems acquisition. This requires incorporation of the principle in policy 

statements, leadership actions, and contractual provisions and incentives. 
Acquisition of National Security Space Programs 

5 

2. The SecDef should establish the same authority for the USecAF for DoD space 

programs as the DNRO has for implementing the National Reconnaissance 

Program (NRP) budget. 

3. To ensure realistic budgets and cost estimates, the USecAF/DNRO should 

• Direct that space acquisition programs be budgeted to a most probable 

(80/20) cost, with a 20-25 percent management reserve for development 

programs included within this cost; also direct that reserves are not to be used 

for new requirements; 

• Direct that source selections evaluate contractor cost credibility and use the 

estimate as a measure of their technical understanding; 

• Conduct more effective independent cost estimates and program assessments 

and incorporate the results into the program budget and plan; and 

• Implement independent senior advisory reviews at critical acquisition 

milestones with experienced, respected outsiders. 

4. The USecAF/DNRO should compete space system acquisitions only when 

clearly in the best interest of the government (e.g., new mission capability, major 

new technology, or poor incumbent performance). When a competition occurs 

and a nonincumbent is the winner, the loss of investment in the losing incumbent 

must be reflected in the program budget and plan. In addition, provisions must be 

made to assure continuity between the legacy system and the new system. 

5. SecDef and the Director of Central Intelligence (DCI) should designate senior 

leaders in the DoD and intelligence community with authority to lead their 

respective requirements processes for national security space systems. The senior 

leaders must have the support necessary to assess—technically and fiscally—

proposed requirements and the authority to couple requirements with funding. 

6. The USecAF/DNRO should authorize the program manager to control 

requirements within the approved baseline. The program manager should 

continuously trade and challenge requirements throughout the program life cycle. 

Significant requirements changes should require the approval of the senior leaders 

for requirements. 

7. The Commander, Air Force Space Command, should complete the ongoing effort 

to establish a dedicated career field for space operations and acquisition 

personnel. 

8. The USecAF/DNRO should require that key program management tours be a 

minimum of 4 years. 

9. The USecAF/DNRO should, through policy and leadership action, clearly define 

the responsibility, authority, and accountability for program managers, 

recognizing the criticality of program managers to the success of their programs. 

In selecting managers, acquisition experience must be a prerequisite. 
Acquisition of National Security Space Programs 

6 

10. USecAF/DNRO should develop a robust systems engineering capability to 

support program initiation and development. Specifically, USecAF/DNRO 

should 

• Reestablish organic government systems engineering capability by selecting 

appropriate people from within government, hiring to acquire needed 

capabilities, and implementing training programs; and 

• In the near term, ensure full utilization of the combined capabilities of 

government, Federally Funded Research and Development Center (FFRDC), 

and systems engineering and technical assistance (SETA) system engineering 

resources. 

11. The USecAF/DNRO should require program managers to identify and report 

potential problems early. 

• Program managers should establish early warning metrics and report 

problems up the management chain for timely corrective action. 

• Severe and prominent penalties should follow any attempt to suppress 

problem reporting. 

12. The USecAF/DNRO should demand that national security space contractors 

• Account for the quality of their program implementation and for mission 

success, 

• Identify proven management and engineering practices and ensure they are 

being utilized, and 

• Account for the early identification and open discussion of problems in their 

program. 

13. Program managers should align contract and fee structure to focus industry 

attention on proven management and engineering practices and mission 

success. 

1.3 Specific Programs 

In addition to the general findings and recommendations, the task force examined three 

specific programs. The findings and recommendations for each are given below. 

1.3.1 SPACE-BASED INFRARED SYSTEM (SBIRS) HIGH 

Findings. SBIRS High has been a troubled program that could be considered a case 

study for how not to execute a space program. The program has been restructured and 

recertified and the task force assessment is that the corrective actions appear positive. 

However, the changes in the program are enormous and close monitoring of these 

actions will be necessary. 

Recommendations. The task force recommends proceeding with the restructured 

program. However, the program implementation to date has been during an era of 

questionable program practices. The task force recommends a review of past engineering 

and test activities to assure acceptable quality of the product. It is critically important 

that a competent and complete test program be implemented for SBIRS High. This may 
Acquisition of National Security Space Programs 

7 

necessitate additional testing to mitigate omissions and embedded problems that would 

otherwise manifest themselves as mission critical failures on orbit. While we were 

impressed with the current program management, additional experienced managers are 

required to execute the program successfully.

1.3.2 FUTURE IMAGERY ARCHITECTURE (FIA) 

Findings. The task force found the FIA program under contract at the time of the review 

to be significantly underfunded and technically flawed. The task force believes this FIA 

program is not executable. 

Recommendations. The task force concludes that the FIA deficiencies can be mitigated 

sufficiently to permit the program to continue. The program funding must be augmented 

to reflect a most probable (80 percent) cost. Significant program and schedule changes 

will be required to maximize the probability of mission success. An independent review 

should be implemented to assess the adequacy of the restructured program. Finally, the 

same recommendation relative to past engineering and test activities cited for SBIRS 

High applies to FIA. 

1.3.3 EVOLVED EXPENDABLE LAUNCH VEHICLE (EELV) 

Findings. National security space is critically dependent upon assured access to space. 

Assured access to space at a minimum requires sustaining both contractors until mature 

performance has been demonstrated. The task force found that the EELV business plans 

for both contractors are not financially viable. Assured access to space should be an 

element of national security policy. 

Recommendations. The task force recommends that the SecDef initiate actions to 

incorporate assured access to space into national security policy. The task force 

recommends that the USecAF/DNRO establish a long-term plan for the EELV program. 

This plan should (1) address the requirement for U.S. production of the RD-180 engine, 

West Coast launch, and dual manifesting; and (2) define the approach to future 

contracting, including any potential downselect and associated funding. The government 

must take funding actions beginning no later than FY04 to assure that both EELV 

programs remain viable. 
Acquisition of National Security Space Programs 

8 

2.0 CHARTER 

The Undersecretary of Defense (Acquisition, Technology, and Logistics), the Secretary of 

the Air Force, and the Undersecretary of the Air Force/Director National Reconnaissance 

Office, recognized that there are significant problems in many critical National Security 

Space Programs resulting in significant cost growth and schedule delays. Given their 

programmatic concerns and recognition of the importance of the space program to the 

national security of our country, they concluded that the most effective way to develop a 

detailed understanding of the relevant issues and potential corrective actions was to 

establish an independent advisory group. The Joint Defense Science Board (DSB)/Air 

Force Scientific Advisory Board (AFSAB) Task Force on the Acquisition of National 

Security Space Programs was thereby established and charged with (1) reviewing the 

acquisition process of national security space programs from initiation to deployment and 

(2) recommending improvements to the acquisition process. 

2.1 Problem Statement 

Significant cost growth and schedule delays in many critical space system programs have 

caused senior DoD and Intelligence Community leadership to question our nation’s ability 

to acquire and sustain national security space systems. The recent series of problems 

comes at a time when our nation has been growing increasingly reliant on space systems 

to perform military and intelligence operations. This task force was asked to characterize 

whether the United States is becoming too dependent on space and whether vulnerabilities 

arise from this dependency. In addition, the task force was charged with characterizing 

underlying causes and systemic issues. 

2.2 Scope 

The task force was directed to consider all aspects of the space acquisition process—

including industry suppliers as well as government acquirers—and seek to understand 

why cost growth and schedule delays occur. In addition, the task force was to address the 

four interconnected sectors of the National Space Program—commercial, civil, 

intelligence, and military—to derive insights into such aspects as personnel issues 

(numbers, skills, experience, and demographics of space professionals) and the effects of 

corporate mergers. The task force assessment was to consider all aspects of the 

government’s role in managing and funding space system acquisition. Finally, the task 

force was to recommend what industry and the government can do to address the problem. 

Such remedies should include both near- and long-term actions and should explain how 

the Air Force, as the DoD Executive Agent for Space should strategically approach 

current and proposed space programs, specifically the Space-Based Infrared System 

(SBIRS) High, the Future Imaging Architecture (FIA), and the Evolved Expendable 

Launch Vehicle (EELV) programs. Additionally, the task force was asked to determine if 

the problems identified are severe enough to necessitate scaling back additional ambitious 

space programs until existing programs have been confidently placed on a path toward 

improvement. 
Acquisition of National Security Space Programs 

9 

3.0 STUDY METHODOLOGY 

From the outset, the task force decided on a methodology that would support a thorough 

investigation of the programs and processes involved. The task force began by 

examining previous studies, including the Commission to Assess United States National 

Security Space Management and Organization, the Booz Allen Hamilton Space Systems 

Development Growth Analysis Report, and other relevant studies as listed in appendix E. 

The task force reviewed a broad spectrum of space programs and issues and held 

reviews with national security space contractors, as well as both acquisition- and 

operation-oriented government organizations. Sessions were held at the following 

locations: 

• The Pentagon, 

• The National Reconnaissance Office, 

• The Boeing Company, 

• Lockheed Martin, 

• TRW, 

• Air Force Space and Missile Systems Center, 

• Air Force Space Command, and 

• The Aerospace Corporation. 

The panel interviewed senior government officials, both active and retired. These 

visits and interviews were conducted in secure environments so that classified programs 

and issues could be fully discussed. 

While conducting the review during the latter part of 2002, the task force became 

aware of several positive steps already being taken to try to correct deficiencies in the 

space acquisition process such as Air Force Space Command’s planned improvements in 

the requirements process and SMC efforts to address its acquisition oversight. The panel 

commends these actions, but no attempt was made to investigate or evaluate “wet paint” 

on those initiatives that are already underway. 
Acquisition of National Security Space Programs 

10 

4.0 BACKGROUND 

The high risk in the current national security space program is the cumulative result of 

choices and actions taken in the 1990s. The effects persist and can be described as six 

factors: 

• Declining acquisition budgets, 

• Acquisition reform with significant unintended consequences, 

• Increased acceptance of risk, 

• Unrealized growth of a commercial space market, 

• Increased dependence on space by an expanding user base, 

• Consolidation of the space industrial base. 

The national security space budget declined following the cold war. However, 

the requirements for space-based capabilities increased rather than declining with the 

budget. This mismatch between available funding and diverse, demanding needs resulted 

in the commencement of more programs than the budget could support. Unfounded 

optimism translated into significantly underfunded, high-risk programs. 

Acquisition reform was intended to reduce the cost of space programs, among 

others. This reform included reduced government oversight, less government engineering 

of systems, greater dependency on industry, and increased use of commercial space 

contributions. At the same time there was a changed emphasis on “cost,” as opposed to 

“mission success,” as the primary objective. While some positive results emerged from 

acquisition reform, it greatly eroded the government acquisition capability needed for 

space programs and created an environment in which cost considerations dominated 

considerations of mission success. Systems engineering was no longer employed within 

the government and was essentially eliminated. The critical role of the program manager 

was greatly reduced and partially annexed by contract staff organizations. As the 

government role changed from “oversight” to “insight,” acquisition managers and 

engineers perceived their loss of opportunity to succeed, and they moved to pursue other 

career opportunities. 

One underlying theme of the 1990s was “take more risk.” The result was an 

abandonment of sound programmatic and engineering practices, which resulted in a 

significant increase in risk to mission success. A recent Aerospace Corporation study, 

“Assessment of NRO Satellite Development Practices” by Steve Pavlica and William 

Tosney, documents the significant increase in mission critical failures for systems 

developed after 1995 as compared to earlier systems. 

The government had significant expectations that a commercial space market 

would develop, particularly in commercial space-based communications and space 

imaging. The government assumed that this commercial market would pay for portions 

of space system research and development and that economies of scale would result, 

particularly in space launch. Consequently, government funding was reduced. The 

commercial market did not materialize as expected, placing increased demands on 

national security space program budgets. This was most pronounced in the area of space 

launch. 
Acquisition of National Security Space Programs 

11 

During the 1990s, the community of national security space users grew from a 

few senior national leaders to a much larger set, ranging from the senior national policy 

and military leadership all the way to the front-line warfighter. On one hand, this 

testified to the value of space assets to our national security; on the other, it generated a 

flood of requirements that overwhelmed the requirements management process as well 

as many space programs of today. 

Finally, decreases in the defense and intelligence budgets necessitated major 

changes in the space industry. Industry, in part to deal with excess capacity, underwent 

a series of mergers and acquisitions. In some cases, critical sub-tier suppliers with 

unique expertise and capability were lost or put at risk. Also, competing successfully on 

major programs became “life or death” for industry, resulting in extreme optimism in the 

development of industrial cost estimates and program plans. 
Acquisition of National Security Space Programs 

12 

5.0 DEPENDENCY ON SPACE 

The task force found that the United States is critically and increasingly dependent upon 

space systems for the conduct of its military and intelligence operations. This 

dependency is both broad and deep for both military operations and national policy 

execution: communications; intelligence, surveillance, and reconnaissance; early 

warning; situational awareness; precision targeting; navigation and timing; and 

meteorology/oceanography. Satellite systems, in turn, depend critically upon space 

launch capability. 

Given this dependency, it is significant that most U.S. space mission areas are 

currently in transition, meaning that a new system or block improvement is currently 

being implemented. In summary: 

System In transition? 

Early warning Yes 

Weather Yes 

Communications Yes 

Classified communications No 

Secure communications Yes 

Global Positioning System Yes 

Imagery intelligence Yes 

Signals intelligence No 

Launch Yes 

The simultaneous execution of so many programs in parallel places heavy demands 

upon government acquisition and industry performers. Many of these programs have an 

unacceptable level of risk. The recommendations contained in this report chart a course 

for reducing this risk. 
Acquisition of National Security Space Programs 

13 

6.0 ACQUISITION SYSTEM ASSESSMENT 

During the course of this study, the task force identified systemic and serious problems 

that have resulted in significant cost growth and schedule delays in space programs. The 

task force grouped these problems into five categories: 

1. Objectives: “Cost” has replaced “mission success” as the primary objective in 

managing a space system acquisition. 

2. Unrealistic budgeting: Unrealistic budgeting leads to unexecutable programs. 

3. Requirements control: Undisciplined definition and uncontrolled growth in 

requirements causes cost growth and schedule delays. 

4. Acquisition expertise: Government capabilities to lead and manage the acquisition 

process have eroded seriously. 

5. Industry: Deficiencies exist in industry implementation. 

In the following sections, each of these areas is discussed. 

6.1 Objectives

Findings and Observations. “Cost” has replaced “mission success” as the primary 

objective in managing a space system acquisition. Program managers face far less 

scrutiny on program technical performance than they do on executing against the cost 

baseline. There are a number of reasons why this is so detrimental. The primary reason is 

that the space environment is unforgiving. Thousands of good engineering decisions can 

be undone by a single engineering flaw or workmanship error, resulting in the 

catastrophe of major mission failure. Options for correction are scant. Options for 

recovery that used to be built into space systems are now omitted due to their cost. If 

mission success is the dominant objective in program execution, risk will be minimized. 

As we discuss in more detail later, where “cost” is the objective, “risk” is forced on or 

accepted by a program. 

The task force unanimously believes that the best cost performance is achieved 

when a project is managed for “mission success.” This is true for managing a factory, a 

design organization, or an integration and test facility. It is well known and understood 

that cost performance cannot be achieved by managing cost. Cost performance is 

realized by managing quality. This emphasis on mission success is particularly critical 

for space systems because they operate in the harsh space environment and post-launch 

corrective actions are difficult and often impact mission performance. 

Responsible cost investment from the outset of a program can measurably reduce 

execution risk. Consider an example in which 20 launches, each costing $500 million, 

are to be delivered. If each launch has a 90 percent probability of success, then 

statistically over the span of the 20 launches, two will be lost. Suppose that instead of 

accepting 90 percent reliability, risk reduction investments are made in order to achieve 

95 percent reliability. At 95 percent reliability, statistically only one launch will fail. An 

investment of $25 million of risk reduction in each launch would break even financially. 

However, there would also be one additional successful launch. This example 

demonstrates what the task force believes to be a better way of managing a program: 

prudent risk reduction investment can be dramatically productive. The current cost-
Acquisition of National Security Space Programs 

14 

dominated culture does not encourage this type of prudent investment. It is particularly 

valuable when the program is addressing immense engineering challenges in placing 

new capabilities in space, with the assurance that they can perform. 

The task force clearly recognizes the importance of cost in managing today’s 

national security space program; however, it is the position of the task force that 

focusing on mission success as the primary mission driver will both increase success and 

improve cost and schedule performance. 

Recommendations. Establish “mission success” as the overarching principle for program 

acquisition. This requires establishing “mission success” as the top priority in policy 

statements, leadership actions, and contractual provisions and incentives. It is difficult to 

overemphasize the positive impact that leaders of the space acquisition process can 

achieve by re-adopting “mission success” as a core value. 

6.2 Unrealistic Budgeting 

Findings and Observations. The task force found that unrealistic budget estimates are 

common in national security space programs and that they lead to unrealistic budgets 

and unexecutable programs. This phenomenon is prevalent; it is a systemic issue. 

National security space typically pushes the limits of technological feasibility, and 

technology risk translates into schedule and cost risk. The task force found that it is the 

policy of the NRO and the practice of the Air Force to budget programs at the 50/50 

probability level. In cost estimating terminology this means the program has a 50 percent 

chance of being under budget or a 50 percent chance of being over budget. The flaw in 

this budgeting philosophy is that it presumes that areas of increased risk and lower risk 

will balance each other out. However experience shows that risk is not symmetric; on 

space programs in particular it is significantly skewed in the direction of the increased, 

higher risk and hence increased cost. Fundamentally, this is due to the fact that the 

engineering challenges are daunting and even small failures can be catastrophic in the 

harsh space environment. Under these circumstances it is the position of the task force 

that national security space programs should be budgeted at the 80/20 level, which the 

task force believes to be the most probable cost.

This raises the issue of how to make the cost estimate. In some instances, 

contractor cost proposals were utilized in establishing budgets. Contractor proposals for 

competitive cost-plus contracts can be characterized as “price-to-win” or “lowest 

credible cost.” As a result, these proposals should have little cost credibility in the 

budgeting process. Utilizing the same probability nomenclature, these proposals are 

most likely approximately “20/80.” 

To better illustrate the effect of budgeting to “50/50” or “80/20”, assume a 

program with a most probable cost at $5 billion. The difference between “80/20” and 

“50/50” is about 25 percent, with a comparable difference between “50/50” and “20/80.” 

Therefore, budgeting a $5 billion program at “50/50” results in a cost of $3.75 billion, 

and at “20/80” results in a cost of $2.5 billion. Given the budgeting practices of the NRO 

and Air Force, a cost growth of 1/3 (and up to 100 percent if the contractor cost proposal 

becomes the budget) can be expected from this factor alone. 
Acquisition of National Security Space Programs 

15 

Another complication of the budgeting process is that the incumbent nearly 

always loses space system competitions. The task force found that in recent history the 

incumbent lost greater than 90 percent of space system competitions. If an incumbent is 

performing poorly, that incumbent should lose, although it is highly unlikely that 90 

percent of the corporations that build space systems are poor performers. While the 

incumbents do go on to win other competitions, transitions between contractors are 

expensive. The government typically has invested significantly in capital and intellectual 

resources for the incumbent. When the incumbent loses, both capital resources and the 

mature engineering and management capability are lost. A similar investment must be 

made in the new contractor team. The government pays for purchase and installation of 

specialized equipment, as well as fit-out of manufacturing and assembly spaces that are 

tailored to meet the needs of the program. Most importantly, the highly relevant 

expertise of the incumbent’s staff—their knowledge and skills—is lost because that 

technical staff is typically not accessible to the new contractor. This replacement cost is 

substantial. The government budget and the aggressive “priced to win” contractor bid 

may not include all necessary renewal costs. This adds to the budget variance discussed 

earlier. Utilization of incumbent suppliers can soften this impact. 

Consolidation of the industry has somewhat complicated our analysis, e.g., 

Rockwell was the original incumbent for the Global Positioning System (GPS); 

however, Boeing became the incumbent because it acquired Rockwell. However, this 

incumbent loss phenomenon is well-documented. The task force suspects that with the 

emphasis being on competition and the drive to level the playing field in the competition 

evaluation, the evaluation and decision process is not making decisions that are 

ultimately in the best interest of the government. These decisions incur excess cost and 

added risk due to loss of engineering infrastructure and expertise. 

Another problem that results from the exceedingly high proportion of incumbent 

losses is that a non-incumbent can be more optimistic in their assessment of technical 

complexity, risk, and cost. They may develop an unrealistic budget and an unexecutable 

program plan. 

So, several factors result in the underbudgeting of space programs. They include 

government budgeting policies and practices, reliance on contractor cost proposals, 

failure to account for the lost investment when an incumbent loses, and the fact that 

advocacy (not realism) dominates the program formulation phase of the acquisition 

process. 

Now we turn to discussion of the ramifications of attempting to execute such an 

inadequately planned program. Figures 1–4 illustrate these ramifications. Figure 1 

defines a typical space program: it has requirements, a budget, a schedule, and a launch 

vehicle with its supporting infrastructure. The launch vehicle limits the size and weight 

of the space platform. These four characteristics establish boundaries of a box in which 

the program manager must operate. The only way the program manager can succeed in 

this box is to have margins or reserves to facilitate tradeoffs and to solve problems as 

they inevitably arise. 
Acquisition of National Security Space Programs 

16 

Figure 1: Program characteristics.

Figure 2 illustrates what the task force found for poorly planned programs: 

inflexible and growing requirements, an underfunded budget, and an unrealistic program 

plan. 

Figure 2: Observed space program characteristics. 

Figures 3 and 4 show two possible outcomes. With an experienced program 

manager and program staff, schedule will be used as reserve with corresponding cost 

increases occurring later in the life of the program. The task force found many programs 

with schedule delays of more than one year. Significant schedule delay and increased 

cost can be a route to operational success. In other words, the experienced program 

manager extends schedule instead of increasing operational risk. 

Cost

Underbudgeted 

Requirements

Little flexibility 

Growing 

Schedule

Inadequate due 

to unrealistic 

project plan 

Launch

No flexibility 

Inadequate 

or no 

margin 

Margin 

Cost 

Requirements

Schedule Launch 
Acquisition of National Security Space Programs 

17 

• Significant 

schedule delay 

• Significant 

cost increase 

for extended 

schedule 

Figure 3: One route to success. 

Figure 4 illustrates the most troubling outcome: an inexperienced program manager and 

staff and/or a critical need to adhere to a fixed schedule result in risk being used as 

reserve. Mission failure becomes more probable. 

Figure 4: Inexperienced program manager or an inviolate schedule.

The task force does not believe any responsible manager knowingly accepts risks 

that will result in operational failure. However, when cost and schedule margins are 

inadequate, risk becomes the only “margin” available. Multiple small increments of 

accumulated risk can result in an unacceptably high cumulative probability of mission 

failure. The task force believes that the FIA program under contract in the fourth quarter 

of calendar year 2002 fits this scenario. 

Schedule

Inadequate due 

to unrealistic 

project plan 

Cost

Under budgeted 

Requirements

Little flexibility 

Growing requirements 

Launch 

No flexibility 

Inadequate 

or no 

margin 

Schedule

Inadequate due to 

unrealistic project 

plan 

Cost

Under budgeted 

Requirements

Little flexibility 

Growing requirements 

Launch 

No flexibility 

Increased Risk 

• High probability 

of mission failure 

Inadequate 

or no 

margin 
Acquisition of National Security Space Programs 

18 

Recommendations. The task force recommends that: 

• National security space programs be budgeted to the most probable (80/20) 

cost estimate, and the government establish a 20-25 percent reserve within 

that most probable budget 

• The government establish a policy that the reserve be used only to execute 

the approved program baseline (not for new requirements), and 

• Contractor cost proposals for competitive cost-plus contracts not be used to 

validate government budgets unless changes are made to the source selection 

process to ensure contractor cost estimate credibility. 

The initial thought of the task force was to recommend giving no consideration to 

the contractor cost proposal in the budgeting process. That remains the recommendation 

if no change is made to the source selection process. Further consideration suggests that 

there are changes that could be made in the source selection process that would 

incentivize more credible contractor cost proposals. One option is to use the cost 

proposal as an indicator of the contractor’s technical understanding of the job. For 

example, if an element of a proposal is technically outstanding and receives the highest 

score, but the proposed cost for the element is substantially underestimated, the 

conclusion should be that the contractor does not have sufficient understanding of that 

element and the technical score for it would be adjusted down. Another option would be 

to negotiate up, without increased fee, the difference between a low contractor proposal 

and the most probable estimated cost. Both options require a competent government cost 

estimating capability. 

Additional Recommendations. 

• Conduct and accept credible independent cost estimates and program reviews 

prior to program initiation. This is critically important to counterbalance the 

program advocacy that is always present. 

• Hold independent senior advisory reviews using experienced, respected 

outsiders at critical program acquisition milestones. Such reviews are 

typically held in response to the kind of problems identified in the report. The 

task force recommends reviews at critical milestones in order to identify and 

resolve problems before they become a crisis. 

• Compete national security space programs only when clearly in the best 

interest of the government. The task force did not review the individual 

source selections and does not imply that they were not properly conducted. 

However, it is clear that when the incumbent loses, there is a significant loss 

of government investment that must be accounted for in the program budget 

of the non-incumbent contractor. Suggested reasons to compete a program 

include poor incumbent performance, failure of the incumbent to incorporate 

innovation while evolving a system, substantially new mission requirements, 

and the need for the introduction of a major new technology. 

• When the non-incumbent wins the following recommendations should be 

implemented: 
Acquisition of National Security Space Programs 

19 

- Reflect the sunk costs of the legacy contractor (and inevitable cost of 

reinvestment) in the program budget and implementation plan. 

- Maintain operational overlap between legacy systems and new programs 

to assure continuity of support to the user community. 

6.3 Requirements Control 

The task force found that requirements definition and subsequent control, or lack 

thereof, to be a dominant driver of cost increases, schedule delays, and incurred mission 

risk. The current system is not adequate to manage and control requirements. Our 

consideration of the management of requirements spans the period of time prior to 

program implementation when the program is being advocated through program 

implementation. 

Prior to Program Initiation 

Findings and Observations. As discussed earlier in this report, there was an increase and 

a broadening of the use of space assets during the decade of the 1990s. Today, users 

include a large number of operational users, including some with regional interests and 

niche missions. And, the user base continues to expand in response to the war on 

terrorism. New users bring new requirements. Those trying to initiate a new program 

applaud this because new users with new requirements constitute an expanded base of 

support. However, this support comes at the cost of reduced program manager flexibility 

because of the increased number of key performance parameters (KPPs) needed to 

satisfy and maintain the support of the expanded constituency. For too many programs 

the net result has been dramatically increased requirements with ineffective systems 

engineering and/or financial assessment of their impact. This has repeatedly 

overwhelmed the existing requirements management process. One example of the 

resulting impact is that the SBIRS High program had an excessive number of KPPs: 18. 

Experience suggests more than 4 to 5 KPPs will overly constrain program execution; the 

orthogonal KPPs prevent the program manager from making tradeoffs that would assure 

an execution of a program with prudent risk. 

The Advanced Extremely High Frequency (AEHF) program depicted in figure 5 

provides an illustrative example of cost and requirements growth. 
Acquisition of National Security Space Programs 

20 

AEHF Quantitative Framework Cost 

Estimate History, 1999-2002

1.3B

Jan 99

$2.6B

Nov 01

$0.36B $0.54B

$0.96B

$0.72B

0

0.5

1

1.5

2

2.5

3

3.5

Billions of Then-Year Dollars

~

$1.7B

$2.8B

$3.2B

Add ed

Requirements

Cost 

gro wth

99 May 00

$2.6B

May 02

Proposal

Source: BAH Study: Space Systems Development Growth Analysis Report

Figure 5: AEHF case study—requirements growth prior to program initiation. 

Figure 5 is a simplified depiction of a chart taken from the Booz Allen Hamilton Space 

Systems Development Growth Analysis Report. It depicts five successive budgets for 

AEHF. Early budgets in 1999 and 2000 varied substantially. The initial Service Cost 

Position in January 1999 was reduced substantially to $1.32 billion in the President’s 

Budget. The number of space vehicles to be built strongly influenced costs. Budgets for 

May 2000 and subsequent dates assume construction of only two space vehicles. There 

was a dramatic increase in the AEHF budget between May 2000 and November 2001 

(see the circled area). The change has two components: a cost growth of $.36 billion 

(over 20%) to implement the same requirements as used to define the May 2000 budget 

and a cost growth of $.72 billion (over 40%) to fund new requirements. The increase of 

more than one billion dollars illustrates the dramatic impact requirements definition can 

have on the cost of a program.

This case study is described not to suggest that the incremental AEHF requirements were 

not justified, but to illustrate that the establishment of additional KPPs has a major 

impact on program cost. Properly scoping a program prior to implementation 

necessitates (1) control on the number and scope of KPPs, (2) an effective process for 

system engineering, (3) cost assessment of the impacts to the program for each new or 

changed requirement, and (4) a disciplined decision making process to evaluate the 

importance and impact of each requirement. 
Acquisition of National Security Space Programs 

21 

Recommendations. To derive a more effective requirements process for space programs, 

the task force recommends that: 

• A senior leader be established within the DoD and a senior leader be 

established within the Intelligence Community with the authority to accept or 

reject requirements to be utilized by each program and ensure accepted 

requirements are funded within the most probable budget; 

• Appropriate operators, users, and acquisition personnel are included in the 

requirements development process; 

• An effective and credible systems engineering and cost estimating capability 

is available to support the requirements process; 

• Training and certification programs are instituted for managers involved in 

the requirements process; and finally, 

• An approved Requirements Definition Document that results from the “prior 

to program initiation” requirements process be used during the program 

implementation phase. 

During Program Implementation 

Findings and Observations. The task force found that the failure to control requirements 

during program implementation also contributed significantly to cost increases, program 

delay, and increased risk. This problem was exacerbated by ineffective systems 

engineering and the weakened authority of program managers. In recent programs 

managers have not had the authority to control requirements and take action based on 

their judgment of tradeoffs in implementation. Figure 6 illustrates this finding by 

showing the cost history for SBIRS High. It is a simplified version of a chart excerpted 

from the “Space Systems Development Growth Analysis” report. It depicts a succession 

of cost estimates and funded budgets for SBIRS High at seven successive points in time. 

As with the prior figure, we distinguish between cost growth for the original 

requirements, and cost growth due to “requirements creep.” Note that the contractor’s 

bid is the most unrealistic estimate of all. This concrete example illustrates the task force 

observation that contractor’s must “price to win.” After award, cost for the original 

requirements and the cost of added requirements grew substantially—roughly a factor of 

three. 
Acquisition of National Security Space Programs 

22 

Figure 6 distinguishes growth of cost of implementing the original requirements and the 

cost of requirements added after contract award. The acquisition processes are not 

responsibly serving the public, the Congress, the DoD or the services and other user 

communities. 

SBIRS High Quantitative Framework Cost 

Estimate History, 1996-2002

1996 

Estimate

$3.2B

1997

President’s

Budget

$2.6B

MPC

$2.4B

Contractor

Bid

$1.6B

Award

$2.1B Mar 2002

POE

$2.3B

$3.3B

$1.3B

0

1

2

3

4

5

6

7 $6.2B

$5.1B

Billions of Then-Year Dollars

$1.1B

Oct 01

EAC

Added R equirement s

Cost Gro wth with 

Original Requ irements

• MPC: Most Probable Cost

• EAC: Estimate at Completion

• POE: Program Office Estimate

Source: BAH Study: Space Systems Development Growth Analysis Report

Figure 6: SBIRS case study—requirements growth during program execution. 

Recommendations. The task force recommends the following: 

• Give the program manager authority over requirements management during 

program implementation and make the program manager accountable to the 

senior requirements leader previously recommended; 

• Direct the program manager to continue to assess the impact of requirements 

in the Requirements Definition Document until preliminary design review 

(PDR); 

• Review and evaluate the requirements in the Requirements Definition 

Document at PDR; specify that any changes require the approval of the 

senior requirements leader, and place the resulting requirements under 

change control; 

• Direct that program acceptance of any new requirements must be associated 

with an identified, adequate funding source; 

• Strengthen the systems engineering capability supporting the program 

manager to ensure sound assessment of the total impact of requirements 

changes; 
Acquisition of National Security Space Programs 

23 

• Direct that the program manager chair the program requirements 

Configuration Control Board and give the program manager the authority to 

accept or reject requirements changes, including the authority to make 

reasonable adjustments to requirements to enhance program implementation; 

and 

• Specify that any significant change in requirements affecting the 

user/operator requires the approval of the senior requirements leader. 

6.4 Acquisition Expertise 

Findings and Observations. The government’s capability to lead and to manage the 

space acquisition process has been seriously eroded, in part due to actions taken in the 

acquisition reform environment of the 1990’s. The task force found that the acquisition 

workforce has significant deficiencies: some program managers have inadequate 

authority; systems engineering has almost been eliminated; and some program problems 

are not reported in a timely and thorough fashion. 

These findings are particularly troubling given the strong conviction of the task 

force that the government has critical and valuable contributions to make. They include 

the following: 

• Manage the overall acquisition process; 

• Approve the program definition; 

• Establish, manage, and control requirements; 

• Budget and allocate program funding; 

• Manage and control the budget, including the reserve; 

• Assure responsible management of risk; 

• Participate in tradeoff studies; 

• Assure that engineering “best practices” characterize program 

implementation; and 

• Manage the contract, including contractual changes. 

These functions are the unique responsibility of the government and require a 

highly competent, properly staffed workforce with commensurate authority. 

Unfortunately, over the decade of the 1990s the government space acquisition workforce 

has been significantly reduced and their authority curtailed. Capable people recognized 

the diminution of the opportunity for success and left. They continue to leave the 

acquisition workforce because of a poor work environment, lack of appropriate 

authority, and poor incentives. This has resulted in widespread shortfalls in the 

experience level of government acquisition managers, with too many inexperienced 

individuals and too few seasoned professionals. 

To illustrate this, in 1992 SMC had staffing authorized at a level of 1,428 officers 

in the engineering and management career fields with a reasonable distribution across 

the ranks from lieutenant to colonel. By 2003 that authorization had been reduced to a 

total of 856 across all ranks. In the face of increasing numbers of programs with 

increasing complexity, this type of reduction is of great concern. Of note, when one 

looks at the actual staffing in place at SMC today against this authorization, one finds an 
Acquisition of National Security Space Programs 

24 

overall 62 percent reduction in the colonel and lieutenant colonel staff and a 

disproportionate 414 percent increase in lieutenants (76 authorized in 1992 to 315 

authorized in 2003). The majority of those lieutenants are assigned to the program 

management field. Such an unbalanced dependence on inexperienced staff to execute 

some of most vital space programs is a crucial mistake and reflects the lack of 

understanding of the challenges and unforgiving nature of space programs at the 

headquarters level. 

The task force observes that space programs have characteristics that distinguish 

them from other areas of acquisition. Space assets are typically at the limits of our 

technological capability. They operate in a unique and harsh environment. Only a small 

number of items are procured, and the first system becomes operational. A single 

engineering error can result in catastrophe. Following launch, operational involvement is 

limited to remote interaction and is constrained by the design characteristics of the 

system. Operational recovery from problems depends upon thoughtful engineering of 

alternatives before launch. These properties argue that it is critical to have highly 

experienced and expert engineering personnel supporting space program acquisition. 

But, today’s government systems engineering capabilities are not adequate to 

support the assessment of requirements, the conduct of tradeoff studies, the development 

of architectures, the definition of program plans, the oversight of contractor engineering, 

and the assessment of risk. Earlier in this report, weaknesses in establishing 

requirements, budgets, and program definition were cited as a major cause of cost 

growth, schedule delay, and increased mission failures. Deficiencies in the government’s 

systems engineering capability contribute directly to these problems. 

The task force believes that program managers and their staffs are the only 

people who can make a program succeed. Senior management, staff organizations, and 

other support organizations can contribute to a successful program by providing 

financial, staffing, and problem-solving support. In some instances, inappropriate actions 

by senior management, staff, and support organizations can cause a program to fail. 

The special management organization, the FIA Joint Management Office (JMO), 

provides an example of dilution of the authority of the program manager. The task force 

recognizes and supports the need to manage the FIA interface between the NRO and 

NIMA and the need in very special cases for senior management—the DCI in this 

instance—to have independent assessment of program status. The task force believes the 

intrusive involvement by the JMO in the FIA program as presented by the JMO to the 

task force conflicts with sound program management. 

Given the criticality of the program manager, the task force is highly concerned 

by the degree to which the program manager’s role and authority have eroded. Staff and 

oversight organizations have been significantly strengthened and their roles expanded at 

the expense of the authority of the program manager. Program managers have been 

given programs with inadequate funding and unexecutable program plans together with 

little authority to manage. Further, program managers have been presented with 

uncontrolled requirements and no authority to manage requirement changes or make 

reasonable adjustments based on implementation analyses. Several program managers 

interviewed by the task force stated that the acquisition environment is such that a 

“world class” program manager would have difficulty succeeding. 
Acquisition of National Security Space Programs 

25 

The average tenure for a program manager on a national security space program 

is approximately two years. It is the view of the task force that a program cannot be 

effectively or successfully managed with such frequent rotation. The continuity of the 

program manager’s staff is also critically important. The ability to attract and assign the 

extraordinary individuals necessary to manage space programs will determine the degree 

of success achievable in correcting the cost and schedule problems noted in this study. 

A particularly troubling finding was that there have been instances when 

problems were recognized by acquisition and contractor personnel and not reported to 

senior government leadership. The common reason cited for this failure to report 

problems was the perceived direction to not report the problems or the belief that there 

was no interest by government in having the problem made visible. A hallmark of 

successful program management is rapid identification and reporting of problems so that 

the full capabilities of the combined government and contractor team can be applied to 

solving the problem before it gets out of control. 

The task force concluded that, without significant improvements, the government 

acquisition workforce is unable to manage the current portfolio of national security 

space programs or new programs currently under consideration. 

Recommendations. The erosion of the government’s acquisition management capabilities 

occurred over a period of years. Correspondingly, correcting these deficiencies will 

require considerable time, although some—such as resolution of the program manager’s 

authority and responsibilities—can be corrected rapidly. The importance of the program 

management recommendations cannot be overestimated. Specifically, the task force 

recommends the following: 

• Complete the ongoing efforts to establish a career field for space operations 

and acquisition personnel, and recognize that the space career field is 

distinctly different from the ICBM career field; 

• Define the responsibility, authority, and accountability of program managers 

in a manner that is consistent with the critical nature of their role; 

• Assign program managers based on both capabilities and experience; 

• Extend program management tours to a minimum of 4 years and follow the 

assignment with positive career opportunities; 

• In the near term, utilize Excepted Civil Service and retired personnel with 

significant acquisition experience; 

• Provide program managers with an executable program, including realistic 

requirements, budgets, and schedules; 

• Make adequate resources and resource management authority available to 

program managers; 

• Give program managers the authority to manage and control requirements, 

including the authority to reject unfounded new requirements; 

• Establish policies to identify and report potential problems early; 

• Establish metrics for the early warning of problems, and direct program 

managers and their support staff to report problems up the management chain 

for timely corrective action; 
Acquisition of National Security Space Programs 

26 

• Establish severe and prominent penalties for the failure to report problems; 

• Develop a robust systems engineering capability to support program initiation 

and development; 

• Reestablish organic government systems capability by selecting appropriate 

people from within government, hiring to acquire needed capabilities, and 

implementing training programs; and finally, 

• Ensure full utilization of the combined system engineering capabilities of the 

government, Federally Funded Research and Development Centers (FFRDC), 

and systems engineering and technical assistance (SETA) organizations in the 

development and implementation of National Security Space Programs. 

6.5 Industry 

Findings and Observations. The task force did not find systemic problems with the 

implementation of national security space programs by industry, although we did 

observe troublesome implementation problems and issues. These will be discussed in 

this section and some will be highlighted explicitly in the later SBIRS High, FIA, and 

EELV sections. 

First, it is appropriate to comment on the task force’s expectations of industry. 

We believe that industry has two basic responsibilities: 

1. Execute the contract established between the government and the contractor; 

and 

2. Identify and report flaws in the contract that can adversely impact technical, 

schedule, cost, and/or mission success. 

It is with the second responsibility that the task force found the greatest reason 

for concern. We found a number of space program contracts to be significantly flawed. 

Accomplishment of stated objectives within established schedules and cost parameters 

was very improbable and ultimate mission success was certainly questionable. Actions 

taken in the environment of the 1990s made a dominant contribution to this situation. 

SBIRS and FIA provide specific examples for concern. The SBIRS software test 

program was excessively optimistic and ultimately was a major contributor to the 

required program restructuring. FIA’s space segment test program was deficient to the 

point that mission success would have been in jeopardy. The task force observed 

instances in which industry did not implement proven engineering and management 

practices and did not communicate systemic program problems to the government 

acquisition leadership in a timely manner. 

While the task force believes industry has the responsibilities defined above, 

regardless of the circumstances, we do note that the government is not always receptive 

to industry concerns or responsive to program issues. Also, contract and fee structure in 

a contract can cause industry to lose focus on sound program implementation and on 

reporting. 

Recommendations. The task force recommends that the government require national 

security space contractors to 
Acquisition of National Security Space Programs 

27 

• Account for the quality of their program implementation and mission success, 

• Identify proven management practices and ensure that they are being 

implemented, and 

• Be accountable for the early identification and open discussion of problems 

on their programs. 

The task force also recommends that the government: 

• Be open and responsive to contractor program concerns, and 

• Align contract structure to focus industry attention on proven management 

and engineering practices and mission success. 
Acquisition of National Security Space Programs 

28 

7.0 CAPABILITY OF THE INDUSTRIAL BASE 

The task force was asked to assess the state of the industrial base. We consider industry 

capacity and capability for both current and future programs. Section 5 of this report 

stated that most U.S. space programs are currently in transition, meaning that a new 

system or block improvement is being implemented. One implication is that there is 

currently a peak demand for industry. Managing this demand puts a premium on systems 

engineering and program management, especially for prime contractors. 

Specific findings and observations for prime contractors include the following: 

• Significant excess “factory” capacity exists today, 

• Adequate staffing is available for current programs, 

• Acceptance rate for new hires is very high—voluntary turnover is low, 

• Concern is developing over acquiring and retaining “top” systems engineers 

and experienced program managers, and 

• Major problems will rise in the future (e.g., a large and growing percentage 

of the experienced workforce is becoming eligible for retirement). 

Changes have occurred in the employment environment. Acceptance rates for new hires 

are greater than 80 percent and voluntary turnover is low, with some contractors in the 

low single-digit percentage. The net result is that adequate staff is available for current 

programs, although a need exists for “top” systems engineers and experienced program 

managers (a need driven by the large development workload). This need will be 

exacerbated as new programs are added. 

The future workforce situation is of greater concern. The current workforce age 

is—on the average—in the late 40s, and a significant percentage of this workforce is 

eligible for retirement. This issue needs to be addressed before it results in a significant 

decline in the available workforce. 

In our judgment industry at the prime contractor level has the capacity and 

capabilities required for current and near-term planned programs. Below the prime 

contractor level there do exist industrial base concerns. Second- and third-tier 

contractors are having problems primarily due to low demand for the components they 

produce. This is particularly true for space-qualified parts. The problems at the second 

and third tier will require proactive government involvement for a small number of 

selected cases. 

The task force anticipates problems in the payload and sensor area. In some 

circumstances, domestic capabilities required to support payload and sensor 

development for national security space are at risk. Finally, commercial space activity 

has not developed to the degree anticipated, and the expected national security benefits 

from commercial space have not materialized. 

Industry is most challenged by the erratic demands on their capacity. As an 

example, space program development activities are currently at a high. One should not 

conclude that industry cannot accommodate new programs. Programs initiated today will 

be going into development after some current development programs have moved to the 

production phase. Each phase requires different capabilities. If new starts could be 
Acquisition of National Security Space Programs 

29 

commenced in a manner that dampens erratic demands on capacity and capability, 

industry could perform most capably and efficiently. 

On balance, the industry can support current and near-term planned programs. 

Special problems need to be addressed at the second and third levels. A continuous flow 

of new programs, cautiously selected, is required to maintain a robust space industry. 
Acquisition of National Security Space Programs 

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8.0 SPECIAL ATTENTION PROGRAMS 

The task force was asked to examine three specific programs that were of special 

concern and interest to the government. We discuss each of these programs below. 

8.1 SBIRS High 

Findings and Observations. SBIRS High has been a troubled program. It could be 

considered a case study for how not to execute a space program. The following list of 

program characteristics (prior to program reconstruction) illustrates this observation: 

• Cost-driven, 

• Underfunded, 

• Optimistic contractor proposal, 

• Uncontrolled requirements, 

• Limited program manager authority and capability, 

• Funding instability (four replans), 

• Program manager instability (four government and four industry program 

managers), and 

• Failure to implement “best practices.” 

SBIRS High is a product of the 1990s acquisition environment. Inadequate 

funding was justified by a flawed implementation plan dominated by optimistic technical 

and management approaches. Inherently governmental functions, such as requirements 

management, were given over to the contractor. 

In short, SBIRS High illustrates that while government and industry understand 

how to manage challenging space programs, they abandoned fundamentals and replaced 

them with unproven approaches that promised significant savings. In so doing, they 

accepted unjustified risk. When the risk was ultimately recognized as excessive and the 

unproven approaches were seen to lack credibility, it became clear that the resulting 

program was unexecutable. A major restructuring followed. It is well-known that 

correcting problems during the critical design and qualification-testing phase of a 

program is enormously costly and more risky than properly structuring a program in the 

beginning. While the task force believes that the SBIRS High corrective actions appear 

positive, we also recognize that (1) many program decisions were made during a time in 

which a highly flawed implementation plan was being implemented and (2) the degree 

of corrective action is very large. It will take time to validate that the corrective actions 

are sufficient, so risk remains. 

The task force was impressed with the current program management; however, 

there is a concern that the program lacks experienced personnel and that the “Basket 

SPO” approach dilutes attention to the critical issue of SBIRS High restructuring and 

implementation of the revised program. Under the “Basket SPO” concept, the program 

management is responsible not only for SBIRS High but also the associated legacy 

program, the ground segment, and SBIRS Low. While this concept may be sound for a 

stable set of programs, it is viewed as confounding the correction of a troubled program 

and the start of a new program. 
Acquisition of National Security Space Programs 

31 

Recommendations. The task force recommends proceeding cautiously with the 

restructured program. Because the program, prior to restructuring, was implemented 

during an era of questionable program practices, the task force recommends a review of 

past engineering and test activities to assess their quality. This may necessitate additional 

testing to mitigate omissions and embedded problems that would otherwise manifest 

themselves as mission critical failures on orbit. Finally, the task force recommends 

adding experienced managers to the SBIRS program.

8.2 Future Imagery Architecture (FIA) 

Findings. The task force found the FIA program under contract at the time of our review 

to be significantly underfunded and technically flawed. The task force believes that the 

FIA program—thus structured—is not executable. 

Recommendations. The task force concludes that the FIA deficiencies can be mitigated 

sufficiently to permit the program to continue. Program funding should be increased to 

the level of a most probable (80 percent) cost. Significant program and schedule changes 

will be required to increase the probability of mission success. An independent review 

should be implemented to assess the adequacy of the restructured program. Finally, we 

make same recommendation for FIA as for SBIRS High—validate the results of past 

engineering and testing activities. 

8.3 Evolved Expendable Launch Vehicle (EELV)

Findings and Observations. The only U.S. capability to provide assured access to space 

for national security space programs is the Evolved Expendable Launch Vehicle (EELV) 

program. The EELV program was defined assuming the emergence of a robust 

commercial space program that (in combination with the government space program) 

would provide the financial foundation for the two EELV contractors. The commercial 

space program has not materialized and is not expected to materialize in the near future. 

As a result, the business plans for both prime contractors are financially inadequate. It is 

unacceptable for the government to make the entire national security space program 

depend upon launch capabilities provided by contractors with business plans that are so 

severely flawed.

While the initial mission success of the systems of both contractors is impressive, 

the task force believes that assured access to space requires that both contractors be 

retained until mature system performance is demonstrated. Only at this point could a 

potential downselect take place. However, there is a question of whether it is in the best 

interest of the country to rely totally on one launch system and one contractor for such a 

critical capability. 

EELV is maturing in a highly cost-constrained environment, and prevailing cost 

pressures can put mission success at risk. Assured access to space is too critical to the 

U.S. national security to be handled simply as a budget problem; as a matter of national 

security policy, risk needs to be reduced to an acceptable level. 

The government also needs to recognize that the assumed commercial space 

program did not materialize to the degree expected. As a result, the government is the 
Acquisition of National Security Space Programs 

32 

prime user of EELV program products. Absence of market volume has created a funding 

shortfall for the EELV program. 

The government must take the uncertainty out of the EELV by establishing a 

plan that resolves these issues and make that plan available to the program participants 

so that informed decisions can be made. Actions should follow that consideration. 

Recommendations. The task force recommends that: 

• Assured access to space be an element of national security policy; 

• Government funding be provided beginning no later than FY04 to assure that 

both EELV programs are viable; and 

• A long-term EELV program plan be established to address issues such as the 

requirement for U.S. production of the RP-180 engine, West Coast launch 

capability, and dual manifesting; the plan should include an approach to 

future contracting, including any potential downselect and associated 

funding. 
Acquisition of National Security Space Programs 

33 

9.0 SUMMARY AND CONCLUSIONS 

A robust national security space program is critical to the security of the United States. 

The space program has evolved over the past several decades. Due to events and actions 

of the decade of the 1990s, national security space programs incurred cost growth, 

schedule delays and increased mission failures. National security space is too important 

to allow these cost, schedule, and mission failure problems to continue. 

This report contains specific recommendations to correct cited deficiencies that we 

assert are the causes of these problems and concerns with individual space programs. A 

return to a mission success culture, as opposed to a cost-centric culture, is a necessary 

prerequisite. 

Corrective actions for current programs must include: 

• Assurance of realistic budgets and executable program plans; 

• Implementation of a process to control requirements; 

• Revitalization of both the management and engineering of the government 

acquisition work force; 

• Implementation of an independent review process; 

• Assurance of credible problem reporting, with metrics on early warning; 

• Industry accountability for proven management and engineering practices with 

appropriate contract and fee structures; and 

• Recognition that program implementation has occurred during an era of 

questionable program practices, requiring review of past engineering and test 

activities to assure acceptable quality. 

The task force believes that all recommendations included in this report should be 

implemented for new programs. 

Assured access to space is a necessary element for the success of each national 

security space program. Assuring access to space should not be resolved simply as a 

budget issue. It is a policy issue of the utmost importance. Required launch capabilities 

should be established by national security policy. 

Industry—with the corrective actions cited in this report—has the capability to 

support the required robust national security space program for the near term. However, 

there are significant long-term concerns regarding the workforce and sub-tiers that need 

to be addressed now in order to mitigate their future impact. 

National security space programs have continually pushed the limits of our 

technological capabilities and can be expected to do so in the future. We expect future 

programs to be much more interrelated. That will introduce new technical complexity. 

It is important that the problems discussed in this report be resolved so that 

maximum attention can be given to the inherent challenges of current and future space 

programs. As difficult as it will be to resolve the current problems, failure to do so will 

result in higher costs and more delays in the future. Failure to correct the cited problems 

will assure more mission failures. 

Even if all of the corrections recommended in this report are made, national 

security space will remain a challenging endeavor, requiring the nation’s most 

competent acquisition personnel, both in government and industry. 
Acquisition of National Security Space Programs 

34 
Acquisition of National Security Space Programs 

35 

A. TERMS OF REFERENCE 
Acquisition of National Security Space Programs 

36 
Acquisition of National Security Space Programs 

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Acquisition of National Security Space Programs 

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Acquisition of National Security Space Programs 

39 

B. TASK FORCE MEMBERSHIP 

CHAIRMAN 

Mr. A. Thomas Young Mr. Young is the former Director of NASA’s 

Goddard Space Flight Center and President and Chief 

Operating Officer of Martin Marietta Corporation. He 

retired from Lockheed Martin in July 1995. Mr. 

Young is currently a Director of the Goodrich 

Corporation, Pepco Holdings, Inc. and Science 

Applications International Corporation. Mr. Young is 

involved in various advisory and review activities 

associated with the U.S. Space Program and is a 

member of the National Academy of Engineering. 

MEMBERS 

Dr. Wanda Austin Dr. Austin is the Senior Vice President, Engineering 

and Technology Group for The Aerospace 

Corporation (2001 to present). Prior to accepting her 

current position, she served as General Manager of 

Aerospace’s MILSATCOM Division as well as its 

Electronic Systems Division. She is a member of the 

Air Force Scientific Advisory Board and a consultant 

to the NASA Aerospace Safety Advisory Panel. Her 

areas of expertise include satellite communications 

engineering, space systems engineering, modeling 

and simulation.

Dr. William F. Ballhaus, Jr. Dr. Ballhaus is President and CEO of The Aerospace 

Corporation. Previously he served as vice president, 

Engineering and Technology and corporate officer of 

Lockheed Martin Corporation and as the director of 

the NASA Ames Research Center. He is a member of 

the Defense Science Board and served on the Air 

Force Scientific Advisory Board for seven years and 

was board co-chair from 1996 to 1999. Ballhaus is a 

member of the National Academy of Engineering and 

an elected member of its Council. 

RADM (Ret) Tom Betterton Admiral Betterton is an independent consultant (1992 

to present). He served in the U.S. Navy for 35 years, 

during which time he was a Major Program Manager 

and senior Navy official, Director Program C, 

National Reconnaissance Office (1978 to 1992). He 

has served on a number of Defense Science Board 

task forces. 
Acquisition of National Security Space Programs 

40 

LtGen (Ret) Donald Cromer Don Cromer was president of Hughes Space and 

Communications Company (HSC), the world’s 

leading manufacturer of commercial communications 

satellites, from October 1993 to December 1998. 

Cromer joined HSC as vice president in August 1991, 

following a 32-year career in the U.S. Air Force. He 

had attained the rank of lieutenant general, and during 

his last 3 years in the service, he was commander of 

the Space Systems Division, Air Force Systems 

Command, at Los Angeles Air Force Base. 

VADM (Ret) David Frost Admiral Frost is currently the President of Frost & 

Associates, a private consulting company specializing 

in space systems, missile defense, remote sensing, 

joint operations, and information systems. His active 

duty assignments included tours as Commander, 

Naval Space Command and Deputy Commander, U.S.

Space Command. He serves on several governmental 

advisory boards and has participated in multiple 

studies in the area of space acquisition.

MGen (Ret) Donald Hard General Hard is currently an independent consultant 

for government organizations and aerospace industry 

companies. He retired as an Air Force Major General 

with 31 years of active duty service, including 

assignment to several high-level positions in national 

security space programs. He has 9 years of experience 

in private industry and is a member of several 

government-sponsored senior review teams 

established to provide advice and guidance for 

national security space programs 

Dr. Daniel E. Hastings Dr. Hastings is the Co-Director of the Engineering 

Systems Division at the Massachusetts Institute of 

Technology (2001 to present). He is also the chair of 

the Air Force Scientific Advisory Board (2003 -

present). He served as the Chief Scientist for the Air 

Force from 1997 to 1999. His areas of expertise 

include space environment interactions, space 

propulsion, space systems architecture, space policy, 

and the management of science and technology. 
Acquisition of National Security Space Programs 

41 

Mr. Jimmie Hill Mr. Hill retired from the Air Force in 1996, after more

than 45 years of service. At the time of his retirement 

he was Principal Deputy Assistant Secretary of the Air

Force (Space) and Deputy Director of the National 

Reconnaissance Office. Mr. Hill has received a 

number of awards, including distinguished service 

medals from the CIA, NASA, and the NRO. In 1996, 

Mr. Hill was chosen by the National Space Club as its 

recipient of the Goddard Memorial Trophy. 

Dr. Anita Jones Dr. Jones is a Professor of Computer Science at the 

University of Virginia School of Engineering and 

Applied Science. She served as Director of Defense 

Research and Engineering (DDR&E) from 1992 to 

1997. Professor Jones has served on many 

government advisory boards and scientific panels 

including the Defense Science Board, the Air Force 

Scientific Advisory Board, as well as boards and 

panels for NASA, the National Academies, and the 

National Science Foundation. She currently serves on 

the Defense Science Board and the National Science 

Board. 

Maj. Gen. (Ret) Nathan J. Lindsay Nathan J. Lindsay is a space systems management 

consultant with experience in both government and 

commercial space systems. He served in the U.S. Air 

Force for 34 years and retired as a Major General. 

While in the Air Force, he succeeded in a variety of 

positions involving program management and 

operations of the Air Force and NRO launch and 

satellite systems. Mr. Lindsay also retired as a vice 

president of Lockheed Martin in 1998. He is the 

recipient of several awards, including the Defense 

Distinguished Service Medal, the National 

Intelligence Medal, NASA’s Distinguished Service 

Medal, and the NRO Distinguished Service Award. 

Mr. Peter Marino Mr. Marino is a private consultant for government and

industry on defense and intelligence issues. He has 

held senior positions in both government and private 

industry and served with the CIA from 1970 to 1986. 

Throughout his career he has received a number of 

technical and management awards, including the CIA 

Distinguished Intelligence Medal and Distinguished 

Officer Citation. He is a member of numerous 

advisory boards, including the Defense Science Board 

(1995 to present). 
Acquisition of National Security Space Programs 

42 

Mr. John McMahon Mr. McMahon is a consultant to the Lockheed Martin 

Corporation and currently acts as director on a number

of Lockheed boards. From 1951 to 1986, he served 

with the CIA and was appointed Deputy Director of 

Central Intelligence in 1982. In 1986, Mr. McMahon 

joined Lockheed Missiles and Space Company. He 

served as Executive Vice President for the company 

and Corporate Vice President until August 1988 when 

he was elected President of the Lockheed Missiles and

Space Systems Group and President and CEO of 

Lockheed Missiles and Space Company. He retired 

from Lockheed in 1994. 

Gen. (Ret) Thomas S. Moorman, Jr. General Moorman is a Partner in Booz Allen 

Hamilton (1998 to present). He also serves as a 

member of the Board of Trustees for The Aerospace 

Corporation, is an Outside Director on the Board of 

Smiths Industries, and is the Chairman of the Space 

Panel of the U.S. Strategic Command Strategic 

Advisory Group. He served in the United States Air 

Force for 35 years. General Moorman served as 

Commander of Air Force Space Command (1990-92). 

At the time of his retirement in 1997, General 

Moorman was Vice Chief of Staff, United States Air 

Force. He is a member of the Council on Foreign 

Relations.

Dr. Bradford W. Parkinson Dr. Parkinson is the Chairman of the Aerospace 

Corporation and is on the board of directors of 

Draper Laboratories and Trimble Navigation. He 

served in the U.S. Air Force from 1957 to 1978, 

retiring as a colonel. In 1973, as a U.S. Air Force 

colonel, he created and ran the NavStar GPS Joint 

Program Office, leading the definition, development, 

and testing of the Global Positioning System. Since 

his retirement in 1978, he has continued working on 

GPS research and development. A Stanford 

University Professor since 1984, Dr. Parkinson was 

named the Edward C. Wells Professor of 

Aeronautics & Astronautics, an endowed chair 

(1995) and Emeritus (2001). He is the recipient of 

numerous and distinguished awards and has been 

inducted into the NASA Hall of Fame. He received 

the NAE’s Draper Prize (“the Engineer’s Nobel”) in 

2003. 
Acquisition of National Security Space Programs 

43 

Dr. Tony Pensa Dr. Pensa is the Assistant Director of Lincoln 

Laboratory at the Massachusetts Institute of 

Technology (2001 to present). His areas of expertise 

include surveillance, radar systems, signal processing, 

space surveillance, space control, space-based 

surveillance systems, hyperspectral sensors, and space

debris. He is a recipient of the NASA Group 

Achievement Award. 

Mr. Vincent Vitto Mr. Vitto is the President and CEO of the Charles 

Stark Draper Laboratory. Prior to joining Draper in 

1997, he held a number of positions at MIT’s Lincoln 

Laboratory (1982-1997). He has served on a wide 

variety of advisory boards and panels, including the 

Defense Science Board and the Air Force Scientific 

advisory board and is currently the vice chairman of 

the DSB. He is the recipient of the Navy’s Meritorious

Public Service Award and the Air Force’s Decoration 

for Exceptional Civilian Service. 

Dr. Max Weiss Dr. Weiss is currently an independent consultant, 

having retired from Northrop Grumman in 1996 as the

Vice President and General Manager of the 

company’s Electronic Systems Division. From 1961 

to 1986, Dr. Weiss held a number of positions with 

The Aerospace Corporation, including Group Vice 

President of the Engineering Group. He has served as 

Member of US Air Force Scientific Advisory Board, 

and NRC Committee on Educational Issues. He is also

the recipient of the IEEE Fredrik Philips Award 

(1993) and Centennial Medal (1983). 

Mr. John J. Welch From 1987 to 1992, Mr. Welch served as the Assistant

Secretary of the Air Force (Acquisition), Senior 

Procurement Executive, Information Resource 

Management Executive, and Air Force Acquisition 

Executive. In 1987, Mr. Welch retired as Senior Vice 

President, Corporate Business Development following

37 years with the LTV Aerospace and Defense 

Company. Mr. Welch was Chief Scientist of the Air 

Force from 1969 to 1970. He has served on a number 

of advisory panels and boards, including the Defense 

Science Board and the Air Force and Army Scientific 

Advisory Boards. His awards include, among others, 

the Air Force Distinguished Service Medal. 
Acquisition of National Security Space Programs 

44 

EXECUTIVE SECRETARY 

Mr. Al Krum Al Krum is a CIA senior officer who has been assigned 

to the National Reconnaissance Office for 20 years. He 

has served in a number of operational, development and 

systems engineering management and leadership 

positions in the both the Imagery and Communications 

directorates. Mr. Krum has also served with industry 

working for both Lockheed Martin and TRW. Mr. Krum 

retired in February 2003 and is now employed by 

Northrop Grumman TASC. 

DSB SECRETARIAT 

Lt. Col. Roger W. Basl, USAF Lt. Col. Basl has been serving on the DSB Secretariat 

since June 2001. Prior to this assignment he served in 

various acquisition and space leadership roles to include:

MILSATCOM Program Element Monitor (1999-2001); 

Chief, Milstar Development, Test and Engineering 

(1997-1999); and Deputy Program Manager, Launch 

Base Support (CCAFS) (1992-1996). LtCol Basl holds a

B.S. in Aeronautical Engineering and an M.S. in 

Aerospace Engineering. 

AFSAB SECRETARIAT 

LtCol John J. Pernot, USAF Lt. Col. Pernot has been serving on the AFSAB 

Secretariat since March 2001. Prior to this assignment 

he served in various acquisition and leadership roles to 

include: Deputy Chief, Ordnance Division and Program 

Manager, Dense Metal Warhead (Munitions Directorate,

1998-2001); Chief, Materials Division and Laboratory 

Director (USAF Academy, 1994-1998). Lt Col Pernot 

holds a B.S. in Mechanical Engineering and an M.S. and

Ph.D. in Aeronautical Engineering. 

SUPPORT STAFF 

Mr. Frank LaBelle, SAIC 

Ms. Donna Preski, SAIC 

Mr. Richard Balzano, SAIC 

Mr. Mark Mateski, SAIC 
Acquisition of National Security Space Programs 

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C. MEETING DATES AND LOCATIONS 

DATE LOCATION 

13–14 Aug. 2002 Pentagon 

28–29 Aug. 2002 Chantilly, VA 

18–19 Sept. 2002 Seal Beach and Huntington Beach, CA 

(Boeing) 

20 Sept. 2002 CA (TRW) 

3–4 Oct. 2002 Denver, CO (Lockheed) 

15–16 Oct. 2002 Los Angeles, CA (SMC) 

17 Oct. 2002 Colorado Springs, CO 

30 Oct.–1 Nov. 2002 Chantilly, VA 

7–8 Nov 2002 Chantilly, VA 

18–20 Nov. 2002 Chantilly, VA 

24 Jan. 2003 Chantilly, VA 

13–14 Feb. 2003 Chantilly, VA 
Acquisition of National Security Space Programs 

46 

D. BRIEFINGS RECEIVED 

13-14 AUG. 2002 

“Overview of NRO Perspectives” Multiple (see below) 

“NRO Perspective” Mr. Vincent Dennis 

“IMINT” 

“SIGINT” 

“AS&T” 

“COMM” 

“SMC Commander’s Sight Picture” LtGen. Brian Arnold 

“Air Force Space Acquisition Perspectives” Mr. Richard McKinney 

“Transformational Communications Architecture” 

and “Navy Programs” 

RADM Rand Fisher 

28-29 AUG. 2002 

“FIA and Future Programs Perspective” Ms. Carol Staubach 

“Space Systems Development Growth Analysis, 

Space R&D Industrial Base, and Conclusions from 

the Space Industrial Base Study” 

Gen. (Ret.) Thomas S. 

Moorman, Jr. 

“Synopsis Program Management Review” Mr. Tom Betterton 

“Assured Access” Brig. Gen. Thomas Taverney 

“SBIRS” Col. Dan Cvelbar 

“NRO Perspectives” Mr. Dennis Fitzgerald 

18-19 SEPT. 2002 

“Boeing/IDS Overview,” “Boeing’s Perspective—

Assessment of Current Health and Acquisition 

Environment for National Security Space Programs,” 

and “Boeing Systems and Processes” 

Mr. Robert Roberts 

“Selected National Security Programs Discussions” Multiple (see below) 

“Future Imagery Architecture” Mr. Ed Nowinski 

“P4500” Mr. John Werle 
Acquisition of National Security Space Programs 

47 

“MCP” Mr. Mike Gianelli 

“GPS” Mr. Mike Rizzo 

“Launch Services Program Discussions” Mr. Gale Schluter 

“Markets, Capabilities, and Quality Strategies 

Overview” 

Mr. Randy Brinkley 

“BSS Programs” Mr. Charles Toups 

“GPS” Mr. Mike Rizzo 

“System Engineering” Dr. Bill Ballhaus 

“Operations” Mr. Mark Weltman 

“Supply Chain Management” Mr. Dan Bridleman 

“Quality” Ms. Marilyn Davis 

20 SEPT. 2002 

“TRW Overview” Mr. Tim Hannemann 

“System Engineering” Ms. Joanne Maguire 

“Program Management Experience” C. Staresinich, F. Ricker, P. 

Borzcik, C. Kau, D. DiCarlo 

3-4 OCT. 2002 

“Denver Operations” T. Marsh 

“Sunnyvale Operations” L. Kwiatkowski 

“Military Space/SBIRS” M. Crandall 

“Assured Access/EELV” M. Gass 

“Classified Programs and Technology Insertion” K. Peters, B. McAnally, D. 

Klinger 

“Systems Engineering and Program Management” G. Hall, M. Crowley 

“Capture Process—PTW” K. Tobey 
Acquisition of National Security Space Programs 

48 

15-16 OCT. 2002 

“SMC Issues Recap” LtGen. Brian Arnold 

“Advanced EHF/Transformational Communication” Ms. Christine Anderson 

“Global Positioning System II/OCS Briefing Col. James Haywood 

“SBIRS High Update” Col. Mark Borkowski 

“EELV” Col. John Wagner 

“Aerospace Topics: Roles and Responsibilities, 

Technical View of Main Programs, and Industrial 

Based Issues” 

Dr. Bill Ballhaus and Dr. 

Wanda Austin 

17 OCT 2002 

“Welcoming Remarks/Sight Picture/Space Cadre 

Presentation” 

Gen. Lance Lord 

Untitled BGen William Shelton 

Untitled BGen John Sheridan 

“ARSPACE—SMDC/ARSPACE Perspective on Use 

and Acquisition of Space Capabilities” 

Multiple (see below) 

“Overview and Operational Perspective” Mr. John Marrs 

“Army Acquisition of TENCAP and NRO 

Relationship” 

Mr. Thom Revay 

“USSTRATCOM” RADM McArthur 

Untitled LtGen (Ret.) Roger DeKok 

8 NOV. 2002 

“Spectrum Astro Presentation” Mr. David Thompson 

24 JAN. 2003 

Systems Engineering Integrated Defense Systems, 

Boeing, Seal Beach 

Mr. Ron Johnson 

13 FEB. 2003 

“Assessment of NRO Satellite Development 

Practices,” The Aerospace Corporation

Mr. Steve Pavlica and Mr. 

William Tosney
Acquisition of National Security Space Programs 

49 

E. REPORTS AND PUBLICATIONS OF INTEREST 

6250.01A Satellite Communications. 10 Dec. 2001. 

Acquisition Management—Directive 7. 8 Mar. 2000. 

Director, CIA. Direction to Minimize Future Imagery Architecture (FIA) Program 

Schedule Delays. 23 Oct. 2002. 

Fuhrman, Robert. Report to the Director of Central Intelligence, DCI Task Force on The 

National Reconnaissance Office, Final Report (known as the Fuhrman Report). 

13 Apr. 1992. 

Jeremiah, David. Report to the Director, National Reconnaissance Office; Defining the 

Future of the NRO for the 21st Century (known as the Jeremiah Panel Report). 26 

Aug. 1996. 

Kelly, Geiger. Report to the Director, National Reconnaissance Office; Volume 1: NRO 

Restructure Study Briefing. July 1989. 

Booz Allen Hamilton. Space Technology Industrial Base Assessment—Final Report.

Dec. 2000. 

National Polar-Orbiting Operational Environmental Satellite System. 1 May 2002. 

NRO Review Training Strategies—Executive Summary. 30 Jan. 2003. 

Our National Security Space Vision 2020. 

Packard, David. Interim Report of the Blue Ribbon Commission on Defense Management 

– National Security Planning and Budgeting. 28 Feb. 1986. 

Pavlika, Steve and William Tosney, The Aerospace Corporation. “Assessment of NRO 

Satellite Development Practices.” 2003. 

Report of the Commission to Assess United States National Security Space Management 

& Organization. 11 Jan. 2001. 

Report of the National Commission for the Review of the NRO. 1 Nov. 2000. 

Report to Chairman, Subcommittee on Strategic Forces, Committee on Armed Services, 

and the Honorable Robert C. Smith, U.S. Senate, Defense Acquisition 

Improvements Needed in Military Space Systems Planning and Education. May 

2000. 

Science and Technology and the AR Vision: Archiving a More Effective S&T Program.

May 2001. 

Space Systems Development Growth Analysis—Executive Summary. 28 Aug. 2002. 

Thompson, David. Spectrum Astro Briefing and VHS tape. 20 Apr. 2002. 

Thompson, David. 50 Technical & Program Mgmt Initiatives to Revitalize the NRO—

White Paper and VHS Tape. 29 Apr. 2002. 
Acquisition of National Security Space Programs 

50 

U.S. Air Force Scientific Advisory Board. A Space Roadmap for the 21st Century 

Aerospace Force: Volume 1, Summary. Nov. 1998. 

USecAF. Space Acquisition Policy 02-01. 

Woolsey, James. NRO Program Task Force for the Director of Central Intelligence.

Sep. 1992. 
Acquisition of National Security Space Programs 

51 

F. ACRONYMS 

AEHF Advanced Extremely High Frequency 

AFSAB Air Force Scientific Advisory Board 

DCI Director of Central Intelligence 

DNRO Director, National Reconnaissance Office 

DoD Department of Defense 

DSB Defense Science Board 

EAC Estimate at Completion 

EELV Evolved Expendable Launch Vehicle 

FFRDC Federally Funded Research and Development Center 

FIA Future Imagery Architecture 

GPS Global Positioning System 

JMO Joint Management Office 

KPP Key Performance Parameter 

MPC Most Probable Cost 

MFP Major Force Program 

NIMA National Imagery and Mapping Agency 

NRO National Reconnaissance Office 

NRP National Reconnaissance Program 

PDR Preliminary Design Review 

POE Program Office Estimate 

SBIRS Space-Based Infrared System 

SecDef Secretary of Defense 

SETA Systems Engineering and Technical Assistance 

SMC Air Force Space and Missile Systems Center 

TSPR Total System Performance Responsibility 

USecAF Under Secretary of the Air Force 

 
Acquisition of National Security Space Programs 

52 

G. TASK FORCE BRIEFING 

UNCLASSIFIED 1

UNCLASSIFIED

ACQUISITION OF NATIONAL 

SECURITY SPACE PROGRAMS

DSB/AFSAB TASK FORCE

REPORT

NOVEMBER 19, 2002

UNCLASSIFIED 2

UNCLASSIFIED

OUTLINE

• Charter

• Membership

• Methodology

• Schedule of Activities

• Acquisition Environment

• Summary Observations

• Government Role in Space Acquisition

• Dependence on Space

• Acquisition System Problems

• Industrial Base Assessment

• Space Based Infrared System (High)

• Future Imagery Architecture

• Evolved Expendable Launch Vehicle
Acquisition of National Security Space Programs 

53 

UNCLASSIFIED 3

UNCLASSIFIED

CHARTER

• Problem Statement

– Significant cost growth and schedule delays for many critical 

space systems

• Scope

– Understand why cost growth and schedule delays occur, 

considering all aspects of acquisition process

– Assess industrial base

– Assess Government’s role and base

– Examine U.S. national security dependence on space

UNCLASSIFIED 4

UNCLASSIFIED

– Emphasis Areas

• Space Based Infrared System (High) (SBIRS)

• Future Imagery Architecture (FIA)

• Evolved Expendable Launch Vehicle (EELV)

• Recommend corrective actions

• Deliverables

– Interim Report Sep 2002

– Final Briefing Nov 2002

– Final written report Feb 2003

CHARTER
Acquisition of National Security Space Programs 

54 

UNCLASSIFIED 5

UNCLASSIFIED

MEMBERSHIP

• Tom Young, Chair Nate Lindsay

• Wanda Austin Peter Marino

• Bill Ballhaus John McMahon

• Tom Betterton Tom Moorman

• Don Cromer Brad Parkinson

• David Frost Tony Pensa

• Don Hard Vince Vitto

• Daniel Hastings Max Weiss

• Jimmie Hill Jack Welch

• Anita Jones Al Krum, Executive Secretary

UNCLASSIFIED 6

UNCLASSIFIED

METHODOLOGY

• Examined previous relevant studies

• Performed Structured Reviews

• Conducted Multiple Interviews

• Task Force Discussions
Acquisition of National Security Space Programs 

55 

UNCLASSIFIED 7

UNCLASSIFIED

SCHEDULE OF ACTIVITIES

DATE LOCATION Activity

AUG 13 Pentagon OSD, National Reconnaissance Office

AUG 14 Pentagon, AF SMC, Air Force, Navy

AUG 28 Chantilly, VA Faga FIA Panel, Space R&D Study

AUG 29 Chantilly, VA AF SMC, NRO

SEP 18

Seal Beach, CA

Huntington Beach, CA

Boeing 

Boeing 

SEP 19 El Segundo, CA Boeing 

SEP 20 Redondo Beach, CA TRW 

OCT 3,4 Denver, CO Lockheed Martin 

OCT 8,9 Chantilly, VA DoD, Air Force, and NRO 

OCT 15 El Segundo, CA AF SMC

OCT 16 El Segundo, CA Aerospace Corporation

OCT 17 Colorado Spring, CO

AF Space Command, BMDC/ARSPACE, US 

STRATCOM

OCT 30,31

NOV 1 Chantilly, VA

FIA, End to End FIA Joint Management Office, DCI 

Gap Study

NOV 7,8 Chantilly, VA NPOESS, FIA, JMO

NOV 19 Pentagon Oral Report

UNCLASSIFIED 8

UNCLASSIFIED

• Declining acquisition budgets

• Acquisition reform

• Greater acceptance of risk

• Changing National Security needs

• Mergers and Acquisitions

ACQUISITION ENVIRONMENT

(DECADE OF THE ’90s)
Acquisition of National Security Space Programs 

56 

UNCLASSIFIED 9

UNCLASSIFIED

SUMMARY OBSERVATIONS

• Mission success has been mixed

• National security critically dependent upon space

• Space Acquisition process seriously flawed -- systemic problems from 

requirements through execution

• Industrial base adequate for current programs; concern about selected 

payloads/suppliers

• Government acquisition process inadequate for current programs 

• FIA and EELV require urgent and critical action—SBIRS(H) 

corrective actions appear adequate

• National Security Space programs are technologically demanding and 

will continue to be challenging

UNCLASSIFIED 10

UNCLASSIFIED

U.S. National Security is Critically 

Dependent on Space Systems

Findings and Observations

• U.S. National Security is critically and increasingly dependent upon 

space systems

– Communications

– Intelligence, Surveillance and Reconnaissance

• Early Warning

• Situational Awareness

• Precision Targeting

– Navigation and Timing

– Meteorology and Oceanography

– Assured Access to Space

• Most of these programs are in transition

• UAV and other programs complement, but do not replace space
Acquisition of National Security Space Programs 

57 

UNCLASSIFIED 11

UNCLASSIFIED

Most space missions are

in transition

Mission Area Transition

Early Warning Yes

Weather Yes

Communications (normal) Yes

Classified Com No

Secure Com Yes

GPS Yes

“I” Yes

“S” No

Lift Yes

UNCLASSIFIED 12

UNCLASSIFIED

Recommendations

• Establish program risk consistent with criticality

• Fund launch capabilities consistent with criticality

• Size space system procurements recognizing launch and 

operational risk

• Establish a program to offset vulnerability of critical space 

assets

• Maintain continuity of capabilities during program 

transitions

U.S. National Security is Critically 

Dependent on Space Systems
Acquisition of National Security Space Programs 

58 

UNCLASSIFIED 13

UNCLASSIFIED

Government Role in

Space Acquisition

• Manage overall Acquisition Process

• Budget and allocate funds

• Establish, manage and control requirements

• Manage and control budget, including reserve

• Approve Program Definition

• Assure responsible risk management

• Participate in trade studies

• Assure engineering “best practices” are utilized in program 

implementation

• Manage contract including contractual changes

• Sustain a viable and competent workforce

UNCLASSIFIED 14

UNCLASSIFIED

Acquisition System Problems

• Cost is primary driver in managing acquisition process

• Unrealistic budgets—unrealistic/optimistic Program Plan

• Undisciplined Requirements definition and uncontrolled 

growth

• Inadequate Government acquisition approach

• Industry implementation deficiencies

Result

Significant cost growths and schedule delays
Acquisition of National Security Space Programs 

59 

UNCLASSIFIED 15

UNCLASSIFIED

Cost is Primary Driver

Findings and Observations

• Cost has become the dominant driver in the acquisition 

process in Government and industry

• Excessive emphasis on cost can have a detrimental effect 

on technical performance and the ultimate program cost

• Cost and schedule performance are realized by managing 

quality not cost

• Responsible cost investment can measurably reduce 

program execution risk

UNCLASSIFIED 16

UNCLASSIFIED

Recommendations

• Re-establish mission success (quality) as primary criteria 

in managing acquisition process

– Requires policy changes

– Requires leadership actions

– Improved cost, schedule and technical performance will 

follow

Cost is Primary Driver
Acquisition of National Security Space Programs 

60 

UNCLASSIFIED 17

UNCLASSIFIED

Unrealistic Budgets

Findings and observations

• Advocacy dominates program formulation phase of acquisition process

• Independent cost and program assessments have been ineffective or ineffectively utilized

• Most programs are budgeted at 50% probability

– Most programs have inadequate reserves

– When reserves exist, they are often used for new requirements

• Contractor cost proposals for Cost Plus contracts have little credibility

– Inappropriately used to reduce program budgets 

– Creates unrealistic expectations as to true program costs

• Incumbent nearly always loses

– Non-incumbent can be more optimistic

– Government loses investment in incumbent (capital and intellectual resource)

• Unrealistic budgets 

– Lead to unrealistic program plans requiring inefficient/costly corrective action

– Contribute to schedule delays and/or excess program operational risk

UNCLASSIFIED 18

UNCLASSIFIED

Program Budgeting – An Example

0

20

40

60

80

100

120

Hubble Space

Telescope Cost

NGST Budget

Target

TRW Prop LM Prop Conservative

Estimate

Next Generation Space Telescope (NGST) % of NGST “ Estimate”
Acquisition of National Security Space Programs 

61 

UNCLASSIFIED 19

UNCLASSIFIED

Program Characteristics

Margin

Cost

Performance 

Requirements

Schedule Launch 

Vehicle

UNCLASSIFIED 20

UNCLASSIFIED

Program Characteristics

Inadequate or no Margins

Cost

•Under budgeted

Performance 

Requirements

• Little flexibility

• Growing

Schedule

• Inadequate due 

to unrealistic 

project plan

Launch Vehicle

Findings and 

Observations
Acquisition of National Security Space Programs 

62 

UNCLASSIFIED 21

UNCLASSIFIED

Program Characteristics

Inadequate or No Margins

Cost 

•Under budgeted

Performance 

Requirements

• Little Flexibility

• Growing

Schedule

• Inadequate 

due to 

unrealistic 

project plan

Launch Vehicle

RESULT 1

•Significant 

schedule delay

•Significant cost 

increase to cover 

schedule delay

UNCLASSIFIED 22

UNCLASSIFIED

Program Characteristics

Inadequate or No Margins

Cost

• Under budgeted

Performance 

Requirements

• Little flexibility

• Growing

Schedule

• Inadequate 

due to 

unrealistic 

project plan

Launch Vehicle

RESULT 2 Increased Risk

•High probability of mission 

failure
Acquisition of National Security Space Programs 

63 

UNCLASSIFIED 23

UNCLASSIFIED

Recommendations

• Budget programs to “80% probability”

• Establish reserve (20-25%) within “80% probability” budget

• Expend reserve to execute approved program—not new requirements

• Contractor cost proposals (cost plus contracts)

– Delete any use of contractor cost proposals

or

– Establish cost credibility evaluation criteria and scoring as part of 

source selection process

• Require credible independent assessments prior to Program Initiation

– Independent Cost Estimate

– Independent Program Review (FFRDC, SETA, etc.)

• Implement independent senior advisory review at critical acquisition 

milestones (experienced, respected outsiders)

Unrealistic Budgets

UNCLASSIFIED 24

UNCLASSIFIED

Recommendations – Continued

• Compete only when clearly in the best interest of the 

government

– New mission or major new technology

– Poor incumbent performance

• If non-incumbent wins, loss of Government investment in 

incumbent should be reflected in program budget and 

implementation plan

• If non-incumbent wins, maintain program overlap to assure 

continuity 

Unrealistic Budgets
Acquisition of National Security Space Programs 

64 

UNCLASSIFIED 25

UNCLASSIFIED

Concept to Assure Greater Credibility

of Contractor Cost Proposal

• Utilize cost proposal as measure of contractor’s technical 

understanding

• Reduce high technical score (for a particular element of 

proposal) if proposed cost is not credible

• Negotiate up contractor’s proposal without fee to achieve 

realistic program plan

• Requires competent government cost estimating capability

UNCLASSIFIED 26

UNCLASSIFIED

Requirements

Findings and observations

• Requirements growth is a dominant driver of cost increases and 

schedule delays

• Prior to Program Initiation

– Growth in number and scope of KPP’s

– Ineffective discipline and decision making

– Ineffective systems engineering assessment of requirements impact

• During Program Implementation

– Ineffective control of requirements change

– Ineffective systems engineering assessment of impact of changes 

to requirements

– Weakened authority of PM to exercise judgment to affect trades in 

implementing requirements
Acquisition of National Security Space Programs 

65 

UNCLASSIFIED 27

UNCLASSIFIED

AEHF Quantitative Framework

(A Point in Time)

Advanced EHF Development Costs

SAR, Commitment Letter,

Letter Contract, Proposal TY$

May 00

Nat'l Team

Commitment

99 PB

1.32B

Jan 99

SCP

$2.63B

Nov 01

Letter

Contract

0.36B 0.54B

0.96B

0.72B

0

0.5

1

1.5

2

2.5

3

3.5

Billions of Then Year Dollars

May 02

Proposal

$2.6B

~

$1.7B

$2.8B

SV1,2

MSC

NRE

Add’l Costs

For SV 3-5*

Source: Jan 99 Service Cost Position (SCP) Briefing

AEHF Cost Growth Briefing (Dec 01, BAH Analysis

Add’l Costs

For SV 3-5*

*Price for SV 3-5 to be delivered in separate proposal

$3.2B

Added

Scope

Variance

SV5

SV4

SV3

SV2

SV1

UNCLASSIFIED 28

UNCLASSIFIED

SBIRS High Quantitative Framework

(A Point in Time)

SBIRS High EMD Costs Estimate, PB, Bid, Award and EAC TY$

Mar 2002

POE

Oct 2001

EAC

1996

Estimate

$3.2B

1997

President's

Budget

$2.6B

MPC

$2.4B

Contractor

Bid

$1.6B

Award

$2.1

Variance

Variance $3.3B

$2.3B

Scope

$1.3B

Scope 

$1.1B

0

1

2

3

4

5

6

7 Total = $6.2B

Total = $5.1B

Growth Attributed 

to Variance

Added Scope

Billions of Then Year Dollars

Note: PB – President’s Budget; MPC – Most Probable Cost; EA C – Estimate of Completion

(1) $5.1B from 20 Nov 2001 SBI RS H igh EMD Co st Tract Briefin g. Includes 36 00, 302 0, and SPO Cost funds (satellites 3, 4, &5)

(2) $6.3B from 29 Mar 200 1 SBIRS High Program Office Estimate (POE). Includes 3600, 3020, and SPO Cost funds (satellites 3 ,4, &:5)

(3) Other sources: ABIDE S; Source Selection Document; BAH analy sis
Acquisition of National Security Space Programs 

66 

UNCLASSIFIED 29

UNCLASSIFIED

Requirements

• General Recommendations

– Ensure the establishment of a senior leader within the 

DoD and a senior leader within the Intelligence 

Community with the authority to accept or reject 

requirements

– Ensure the requirements development process includes 

operators, users and acquisition personnel

– Provide system engineering support to execute the 

requirements trades process

– Institute training and certification programs for 

requirements managers

UNCLASSIFIED 30

UNCLASSIFIED

Requirements

Recommendations

• Prior to Program Initiation:

– Strengthen the systems engineering process for assessing the 

impact of proposed requirements, with particular emphasis on cost

– Create an approved requirements definition document

– New or revised requirements must be accepted by Requirements 

Leader prior to utilization by program

• During Program Implementation

– Make the PM responsible for requirements management

– PM continues to assess impact of new requirements until SRR or 

PDR

– Review and approve Program Requirements at time of SRR or 

PDR and place them under change control
Acquisition of National Security Space Programs 

67 

UNCLASSIFIED 31

UNCLASSIFIED

Requirements

• During Program Implementation (continued)

– New requirements must come with an identified funding source

– Strengthen systems engineering capability to assess total impact of 

requirements changes

– PM Chair Program Requirements CCB with authority to accept or 

reject requirements changes (including authority to reject unfunded requirements) and to make reasonable adjustments to 

requirements to enhance program implementation

– A significant change in requirements affecting the user/operator

requires coordination with the requirements leader prior to 

approval

UNCLASSIFIED 32

UNCLASSIFIED

Inadequate Government

Acquisition Process

• Acquisition Work Force

• Program Manager Authority

• Systems Engineering Capability

• Reporting Integrity
Acquisition of National Security Space Programs 

68 

UNCLASSIFIED 33

UNCLASSIFIED

Acquisition Workforce

Findings and Observations

• Interacted with some excellent Program Managers 

• Many senior managers in acquisition chain of command have little or 

no large systems management experience 

• Too few experienced program managers and insufficient emphasis /

progress on development

• Average tenure for many Program Managers less than 2 years

• The skill level and experience at the middle management level is

inadequate

• SMC and NRO inadequately staffed 

• Capable people leave the acquisition workforce due to poor work 

environment, lack of appropriate authority and poor incentives

UNCLASSIFIED 34

UNCLASSIFIED

Acquisition Workforce

Recommendations

• Perform a study to determine approach to workforce 

revitalization at NRO and SMC

• Provide SMC and NRO with adequate staff at appropriate 

experience levels

• Require minimum PM tours of four (4) years

• Utilize Excepted Service authorities and hire retired 

personnel with significant acquisition experience to solve 

near term problem
Acquisition of National Security Space Programs 

69 

UNCLASSIFIED 35

UNCLASSIFIED

Program Manager Authority

Findings and Observations

• Acquisition environment is such that “World Class” PM would have

difficulty succeeding

• PM authority has been eroded by acquisition reform 

• Staff and oversight organizations have been strengthened at expense of 

PM authority

• Inadequate program funding with no margin presents PM with 

unexecutable program with no ability to manage

• Uncontrolled requirements growth plus no authority to reasonably

adjust requirements presents PM with impossible management 

challenge

• Special management organizations such as “JMO” can dilute PM 

authority

UNCLASSIFIED 36

UNCLASSIFIED

• Only Government PM and contractor PM and their respective 

organizations can make a program succeed

– Staff organizations and senior leadership can contribute to success 

by constructive support

– Staff organizations and senior leadership can cause a program to fail

RECOMMENDATIONS

• Recognize the key role of PM through policy and leadership actions

• Assure Program definition is realistic (requirements, budget, schedule 

and implementation approach)

• Provide PM with adequate reserve and reserve management authority

• Provide PM with authority to management and control requirements, 

including the authority to make reasonable adjustments to enhance 

program execution

Program Manager Authority
Acquisition of National Security Space Programs 

70 

UNCLASSIFIED 37

UNCLASSIFIED

Systems Engineering Capability

Findings and observations

• Government systems engineering capability has eroded significantly

• Capability is not adequate to assess requirements, program definition 

and program execution

Recommendations

• Near Term

– Utilize combined capabilities of government, FFRDC’s and 

SETA’s

• Long Term

– Re-establish government systems engineering capability 

• Select appropriate people from within government

• Hire to acquire capabilities

• Implement training programs

UNCLASSIFIED 38

UNCLASSIFIED

Reporting Integrity

Findings and Observations

• Many problems are recognized by Government 

Acquisition organizations and contractors

• Problems not reported to senior government leadership

• Environment encourages over-optimism in ability to work 

through major problems

Recommendation

• Establish environment that encourages problem reporting

• Severely punish failure to report problems
Acquisition of National Security Space Programs 

71 

UNCLASSIFIED 39

UNCLASSIFIED

Industry Implementation

Findings and Observations

• Failure to assure “best practices” were applied (some programs)

• Failure to communicate systemic program problems to Government 

acquisition leadership in a timely manner

• Contract and fee structure can cause industry to lose focus on sound program 

implementation practices

Recommendations

• Hold industry accountable for quality of program implementation

• Government Program office with support of FFRDC’s and SETA’s assure 

“best practices” are being utilized

• Establish an environment that encourages early identification and open 

discussion of problems

• Align contract and fee structure to balance program risk between government 

and industry and focus industry attention on “best practices” management and 

mission success

UNCLASSIFIED 40

UNCLASSIFIED

Capability of the Industrial Base

Findings and observations

• Most program areas are in transition

• Significant excess capacity in “factory”

• Adequate staffing available

• Acceptance rate for new hires is very high

• Concern is developing, acquiring and retaining “top” 

systems engineers and experienced Program Managers

• Major future problem (large and growing percentage of 

workforce eligible for retirement)
Acquisition of National Security Space Programs 

72 

UNCLASSIFIED 41

UNCLASSIFIED

Recommendations

• Monitor corrective actions for existing problems to assure 

stabilized acquisition environment

• Cautiously add new programs

• Phase new starts so as to avoid highs and lows in staffing 

requirements

Capability of the Industrial Base

UNCLASSIFIED 42

UNCLASSIFIED

SBIRS HIGH

Findings and Observations

• Case study in how not to do a Space Program

– Cost Driven

– Under funded

– Optimistic contractor proposal

– Uncontrolled requirements

– Limited PM authority and capability—max use of Acquisition 

reform

– Funding instability—4 replans

– PM instability—4 Government PM’s and 4 Industry PM’s

– Failure to implement “best practices”

• “Basket SPO” pushes critical program management down a level and 

dilutes attention of System Program Director

• Corrective action appears positive
Acquisition of National Security Space Programs 

73 

UNCLASSIFIED 43

UNCLASSIFIED

Recommendations

• Proceed with revised program

• Review past engineering activities to assure acceptable 

quality of product

• Strengthen SPO with additional experienced managers

SBIRS High

UNCLASSIFIED 44

UNCLASSIFIED

EELV

Findings and observations

• Business plans for both contractors are financially inadequate and 

probably would not be supported if at program initiation

• National security space is critically dependent upon assured access to 

space 

• Assured access to space requires both contractors---at least until 

sustainable performance is demonstrated

• EELV program has occurred in highly cost constrained environment---

continued pressure can put mission success at risk

• Recommendations

• Establish a long term plan for the EELV Program and make visible to 

both contractors

• Take necessary actions to assure both contractors remain viable---at 

least until sustainable performance is demonstrated
Acquisition of National Security Space Programs 

74 

UNCLASSIFIED 45

UNCLASSIFIED

Summary Observations

• Mission success has been mixed

• National security critically dependent upon space

• National Security Space Acquisition process seriously flawed—

systemic problems

• Industrial base adequate for current programs

• Government acquisition management inadequate for current programs

• FIA and EELV require urgent and critical action---SBIRS(H) 

corrective actions appear appropriate

• National Security Space programs are technologically demanding and 

will continue to be challenging