MISSILE DEFENSE

Opportunity Exists to 

Strengthen 

Acquisitions by 

Reducing 

Concurrency

Report to Congressional Committees

April 2012

GAO-12-486

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-486, a report to 

congressional committees

April 2012

MISSILE DEFENSE

Opportunity Exists to Strengthen Acquisitions by 

Reducing Concurrency

Why GAO Did This Study

MDA has spent more than $80 billion 

since its initiation in 2002 and plans to 

spend $44 billion more by 2016 to 

develop, produce, and field a complex 

integrated system of land-, sea-, and 

space-based sensors, interceptors, 

and battle management, known as the 

BMDS. 

Since 2002, National Defense 

Authorization Acts have mandated that 

GAO prepare annual assessments of 

MDA’s ongoing cost, schedule, testing, 

and performance progress. This report 

assesses that progress in fiscal year 

2011. To do this, GAO examined the 

accomplishments of the BMDS 

elements and supporting efforts and 

reviewed individual element responses 

to GAO data collection instruments. 

GAO also reviewed pertinent 

Department of Defense (DOD) policies 

and reports, and interviewed a wide 

range of DOD, MDA, and BMDS 

officials.

What GAO Recommends

GAO makes seven recommendations 

to the Secretary of Defense to reduce 

concurrency and strengthen MDA’s 

near- and long-term acquisition 

prospects. DOD concurred with six 

recommendations and partially 

concurred with one related to reporting 

on the cause of the Aegis BMD 

Standard Missile-3 Block IB test failure 

before committing to additional 

purchases. DOD did not agree to tie 

additional purchases to reporting the 

cause of the failure. DOD’s stated 

actions were generally responsive to 

problems already at hand, but did not 

consistently address implications for 

concurrency in the future, as discussed 

more fully in the report.

What GAO Found

In fiscal year 2011, the Missile Defense Agency (MDA) experienced mixed 

results in executing its development goals and Ballistic Missile Defense System 

(BMDS) tests. For the first time in 5 years, GAO found that all of the targets used 

in this year’s tests were delivered and performed as expected. None of the 

programs GAO assessed were able to fully accomplish their asset delivery and 

capability goals for the year. Flight test failures, an anomaly, and delays 

disrupted the development of several components and models and simulations 

challenges remain. Flight test failures forced MDA to suspend or slow production 

of three out of four interceptors currently being manufactured while failure review 

boards investigated their test problems. 

To meet the presidential 2002 direction to initially rapidly field and update missile 

defense capabilities as well as the 2009 announcement to deploy missile 

defenses in Europe, MDA has undertaken and continues to undertake highly 

concurrent acquisitions. Concurrency is broadly defined as the overlap between 

technology development and product development or between product 

development and production. While some concurrency is understandable, 

committing to product development before requirements are understood and 

technologies mature or committing to production and fielding before development 

is complete is a high-risk strategy that often results in performance shortfalls, 

unexpected cost increases, schedule delays, and test problems. It can also 

create pressure to keep producing to avoid work stoppages. In contrast, as 

shown in the notional graphic below, successful programs that deliver promised 

capabilities for the estimated cost and schedule use a disciplined knowledgebased approach. 

High levels of concurrency were present in MDA’s initial efforts and are present 

in current efforts, though the agency has begun emphasizing the need to follow 

knowledge-based development practices. During 2011, the Ground-based 

Midcourse Defense, the Aegis Standard Missile 3 Block IB, and the Terminal 

High Altitude Area Defense experienced significant ill effects from concurrency. 

For example, MDA’s discovery of a design problem in a new variant of the 

Ground-based Midcourse Defense program’s interceptors while production was 

underway increased costs, may require retrofit of fielded equipment, and delayed 

delivery. Flight test cost to confirm its capability has increased from $236 million 

to about $1 billion. Because MDA continues to employ concurrent strategies, it is 

likely that it will continue to experience these kinds of acquisition problems.

View GAO-12-486. For more information, 

contact Cristina Chaplain at (202) 512-4841 or 

chaplainc@gao.gov.
Page i GAO-12-486 Missile Defense

Letter 1 

Background 3

Mixed Progress in Development and Delivery Efforts 6

Limited Progress in Developing Models and Simulations; Much 

More Remains to Be Done 11

MDA’s Highly Concurrent Acquisition Strategy Magnifies the 

Effects of Tests and Other Problems 13

Conclusions 26

Recommendations for Executive Action 27

Agency Comments and Our Evaluation 29

Appendix I Scope and Methodology 33

Appendix II Comments from the Department of Defense 36

Appendix III BMDS Models and Simulations Progress 40

Appendix IV Aegis Ballistic Missile Defense (Aegis BMD) with Standard Missile-3 

(SM-3) Block IA and Block IB 46

Appendix V Aegis Ballistic Missile Defense (Aegis BMD) Standard Missile-3 

(SM-3) Block IIA 53

Appendix VI Aegis Ballistic Missile Defense (Aegis BMD) Standard Missile-3 

(SM-3) Block IIB 58

Appendix VII Aegis Ashore 65

Contents
Page ii GAO-12-486 Missile Defense

Appendix VIII Ground-based Midcourse Defense (GMD) 73

Appendix IX Precision Tracking Space System (PTSS) 81

Appendix X Targets and Countermeasures 87

Appendix XI Terminal High Altitude Area Defense (THAAD) 93

Appendix XII GAO Contact and Staff Acknowledgments 100

Tables

Table 1: Description of MDA’s BMDS Elements 4

Table 2: European Phased Adaptive Approach Plans and Delivery 

Time Frames as of 2009 6

Table 3: BMDS Fiscal Year 2011 Selected Accomplishments 7

Table 4: Flight Test and Failure Review Cost to Assess CE-II 

Capabilitya 75

Table 5: Fiscal Year 2011 Acquisition Events by Target Class 90

Figures

Figure 1: Concurrency Compared to the Knowledge-Based 

Approach 16

Figure 2: GMD Concurrent Schedule 17

Figure 3: SM-3 Block IB Concurrent Schedule 19

Figure 4: THAAD Concurrent Schedule 21

Figure 5: SM-3 Block IIB Concurrent Schedule 23

Figure 6: Aegis Ashore Concurrent Schedule 24

Figure 7: PTSS Concurrent Schedule 26

Figure 8: SM-3 Block IB Schedule 48

Figure 9: SM-3 Block IIB Schedule 61

Figure 10: Aegis Ashore Schedule 67

Figure 11: GMD Concurrent Schedule 77
Page iii GAO-12-486 Missile Defense

Figure 12: PTSS Concurrent Schedule 83

Figure 13: THAAD Concurrent Schedule 95
Page iv GAO-12-486 Missile Defense

Abbreviations

Aegis BMD Aegis Ballistic Missile Defense

APL Applied Physics Laboratory

APUC average procurement unit cost

BAR BMDS Accountability Report

BMDS Ballistic Missile Defense System

CDR critical design review

CE-I Capability Enhancement-I 

CE-II Capability Enhancement -II

DACS divert and attitude control system

DOD Department of Defense

EKV exoatmospheric kill vehicle

eMRBM Extended Medium-Range Ballistic Missile

FTG Flight Test GMD

FTM Flight Test Missile of Aegis

FTT THAAD Flight Test

FTX Flight Test “Other” 

GBI ground-based Interceptor

GMD Ground-based Midcourse Defense

ICBM intercontinental ballistic missile

IMTP Integrated Master Test Plan

IRBM intermediate-range ballistic missile

LV launch vehicle

MDA Missile Defense Agency

MRBM medium-range ballistic missile

OSF Objective Simulation Framework

OTA Operational Test Agency

PAA Phased Adaptive Approach

PDR preliminary design review

PTSS Precision Tracking Space System

SM-3 Standard Missile-3 

SPY-1 Army/Navy Water (Shipboard) Radar Surveillance

STSS Space Tracking and Surveillance System

TDACS throttleable divert and attitude control system

THAAD Terminal High Altitude Area Defense

TSRM third-stage rocket motor

VLS vertical launching system

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Page 1 GAO-12-486 Missile Defense

United States Government Accountability Office

Washington, DC 20548

April 20, 2012

Congressional Committees

The Missile Defense Agency (MDA) has developed and deployed an 

initial integrated and layered Ballistic Missile Defense System (BMDS) to 

defend the United States, our deployed forces, allies, and friends, and is 

continuing development and production of additional capabilities. Since 

2002, MDA has spent more than $80 billion and plans to spend an 

additional $44 billion through 2016 to develop a highly complex system of 

systems—land-, sea-, and space-based sensors, interceptors and battle 

management. To rapidly field missile defense capabilities, MDA has 

concurrently developed, produced, and fielded a variety of systems. While 

this approach has helped MDA to rapidly deploy initial capabilities, it also 

has meant that it has fielded some assets whose capabilities are 

uncertain or impaired. In addition, there has been limited transparency 

and accountability for the acquisitions, particularly limited understanding 

of the costs, schedules, requirements, and system effectiveness. As the 

United States government seeks to address growing fiscal pressures, 

investments in new weapon systems, like the BMDS, will face increasing 

scrutiny to ensure that they are providing the best value for the 

increasingly limited resources available.

Since 2002, National Defense Authorization Acts have mandated that we 

prepare annual assessments of MDA’s ongoing cost, schedule, testing, 

and performance progress.1

 

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

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

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

Pub. L. No. 109-163, § 232; John Warner National Defense Authorization Act for Fiscal 

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

Fiscal Year 2008, Pub. L. No. 110-181, § 225. See also National Defense Authorization 

Act for Fiscal Year 2012, Pub. L. No. 112-81, § 232 (2011). 

To date, we have delivered assessments of 

MDA’s progress covering fiscal years 2003 through 2010 and are 

currently mandated to continue delivering assessments through fiscal 

 
 

Page 2 GAO-12-486 Missile Defense

year 2016.2

To assess MDA’s progress, we examined the accomplishments of eight 

BMDS elements and supporting efforts that MDA is currently developing 

and fielding: the Aegis Ballistic Missile Defense (Aegis BMD) with 

Standard Missile-3 Block IA and Block IB; Aegis Ashore; Aegis BMD 

Standard Missile-3 Block IIA, Aegis BMD Standard Missile-3 Block IIB; 

Ground-based Midcourse Defense (GMD); Precision Tracking and Space 

System (PTSS); Targets and Countermeasures; and Terminal High 

This report provides our assessment of MDA’s progress in 

fiscal year 2011. Specifically, it highlights (1) progress and challenges in 

delivery of assets for key programs, or elements; (2) progress in 

developing models and simulations needed to assess BMDS 

performance; and (3) challenges related to MDA’s use of highly 

concurrent acquisition strategies. In terms of costs, we report on the cost 

effects MDA experienced or is likely to experience for individual systems 

as a result of its past, ongoing, and planned acquisition practices. We will 

not be able to assess aggregate cost reporting until corrective actions we 

recommended are implemented and substantial improvements are made 

to MDA’s cost estimates. According to MDA senior-level officials, the 

agency has taken several actions in response to our recommendations. 

Finally, we will be issuing a separate report assessing MDA’s progress in 

adopting best practices for developing project schedules as well as 

broader progress in enhancing and enabling Department of Defense 

(DOD) and congressional oversight for MDA.

 

2 GAO, Missile Defense: Actions Needed to Improve Transparency and Accountability, 

GAO-11-372 (Washington, D.C.: Mar. 24, 2011); Defense Acquisitions: Missile Defense 

Transition Provides Opportunity to Strengthen Acquisition Approach, GAO-10-311

(Washington, D.C.: Feb. 25, 2010); Defense Acquisitions: Production and Fielding of 

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

GAO-09-338 (Washington, D.C.: Mar. 13, 2009); Defense Acquisitions: Progress Made in 

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

(Washington, D.C.: Mar. 14, 2008); Defense Acquisitions: Missile Defense Acquisition 

Strategy Generates Results but Delivers Less at a Higher Cost, GAO-07-387

(Washington, D.C.: Mar. 15, 2007); Defense Acquisitions: Missile Defense Agency Fields 

Initial Capability but Falls Short of Original Goals, GAO-06-327 (Washington, D.C.: 

Mar. 15, 2006); Defense Acquisitions: Status of Ballistic Missile Defense Program in 2004, 

GAO-05-243 (Washington, D.C.: Mar. 31, 2005); and Missile Defense: Actions Are 

Needed to Enhance Testing and Accountability, GAO-04-409 (Washington, D.C.: Apr. 23, 

2004).
 

Page 3 GAO-12-486 Missile Defense

Altitude Area Defense (THAAD).

3

We conducted this performance audit from April 2011 to April 2012 in 

accordance with generally accepted government auditing standards. 

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

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

We reviewed individual element 

responses to GAO data collection instruments, which detailed key 

accomplishments for fiscal year 2011. The results of these reviews are 

presented in detail in appendixes to this report and are also integrated as 

appropriate in our findings related to progress in delivering assets and 

capabilities. For more details on our scope and methodology, see 

appendix I. 

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

ranges—short, medium, intermediate, and intercontinental.4

 

3 The BMDS also includes other elements and supporting efforts such as the Command, 

Control, Battle Management, and Communications and BMDS Sensors which are not 

covered in this report. For this report, we selected and focused our efforts on eight of the 

BMDS elements based on Congressional interest, known acquisition challenges and 

successes, and the current status of these efforts. 

Since 

ballistic missiles have different ranges, speeds, sizes, and performance 

characteristics, MDA is developing multiple systems that when integrated, 

provide multiple opportunities to destroy ballistic missiles before they can 

reach their targets. The system includes space-based sensors as well as 

ground- and sea-based radars, ground- and sea-based interceptor 

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

communications system providing the warfighter with the necessary 

communication links to the sensors and interceptor missiles. A typical 

engagement scenario to defend against an intercontinental ballistic 

missile would occur as follows:

4 Ballistic missiles are classified by range: short-range ballistic missiles have a range of 

less than 1,000 kilometers (621 miles); medium-range ballistic missiles have a range from 

1,000 to 3,000 kilometers (621 to1,864 miles); intermediate-range ballistic missiles have a 

range from 3,000 to 5,500 kilometers (1,864 to 3,418 miles); and intercontinental ballistic 

missiles have a range greater than 5,500 kilometers (3,418 miles).

Background 
 

Page 4 GAO-12-486 Missile Defense

• Infrared sensors aboard early-warning satellites detect the hot plume 

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

attack.

• Upon receiving the cue, land- or sea-based radars are directed to 

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

designed, to identify the warhead from among spent rocket motors, 

decoys, and debris.

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

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

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

itself toward a predicted intercept point and releases the kill vehicle.

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

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

closing speed of up to 10 kilometers per second (22,000 miles per 

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

to kill” collision with the kill vehicle.

• Inside the atmosphere, interceptors kill the ballistic missile using a 

range of mechanisms such as direct collision between the interceptor 

missile and the inbound ballistic missile or killing it with the combined 

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

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

Table 1 provides a brief description of eight BMDS elements and 

supporting efforts currently under development by MDA.

Table 1: Description of MDA’s BMDS Elements

BMDS element/supporting efforta Description 

Aegis Ballistic Missile Defense (Aegis BMD) 

with Standard Missile-3 (SM-3) Block IA and 

Block IB

Aegis BMD is a sea-based missile defense system being developed in incremental, 

capability-based blocks to defend against ballistic missiles of all ranges. Key 

components include the shipboard SPY-1 radar, SM-3 missiles, and command and 

control systems. It also is used as a forward-deployed sensor for surveillance and 

tracking of ballistic missiles. The SM-3 missile has multiple versions in development or 

production. The first two variants are referred to as the SM-3 Block IA and SM-3 Block 

IB.

b

 

Aegis Ashore Aegis Ashore is a future land-based variant of the ship-based Aegis BMD. It is 

expected to track and intercept ballistic missiles in their midcourse phase of flight 

using SM-3 interceptor variants as they become available. Key components include a 

vertical launch system and a reconstitutable enclosure that houses the SPY-1 radar 

and command and control system. DOD plans to deploy the first Aegis Ashore with 

SM-3 Block IB in the 2015 time frame as part of the missile defense of Europe called 

the European Phased Adaptive Approach (PAA). 
 

Page 5 GAO-12-486 Missile Defense

BMDS element/supporting efforta Description 

Aegis BMD SM-3 Block IIA The SM-3 Block IIA is the third SM-3 variant to be developed for use with the seabased and future land-based Aegis Ballistic BMD. This program began in 2006 as a 

joint development with Japan, and it was added to the European PAA when that 

approach was announced in 2009. As part of European PAA Phase III, the SM-3 

Block IIA is planned to be fielded with Aegis Weapons System version 5.1 by the 2018 

time frame.

Aegis BMD SM-3 Block IIB The SM-3 IIB is the fourth SM-3 variant planned. It is intended to defend against 

medium- and intermediate-range ballistic missiles and provide early intercept 

capabilities against some intercontinental ballistic missiles. The SM-3 Block IIB 

program began in June 2010 and is planned to be fielded by the 2020 time frame as 

part of the European PAA Phase IV. Given its early stage of development, program 

management officials stated that the SM-3 Block IIB is not managed within the Aegis 

BMD Program Office and has not been baselined. 

Ground-based Midcourse Defense (GMD) GMD is a ground-based missile defense system designed to destroy intermediate and 

intercontinental ballistic missiles during the midcourse phase of their flight. Its mission 

is to protect the U.S. homeland against ballistic missile attacks from North Korea and 

the Middle East. GMD has two ground-based interceptor variants—the Capability 

Enhancement I and the Capability Enhancement II. MDA has emplaced its total 

planned inventory of 30 interceptors at two missile field sites—Fort Greely, Alaska and 

Vandenberg, California.

Precision Tracking and Space System 

(PTSS) 

PTSS is being developed as an operational component of the BMDS designed to 

support intercept of regional medium and intermediate range ballistic missile threats to 

U.S. forces and allies and long-range threats to the United States. PTSS will track 

large missile raid sizes after booster burn-out, which could enable earlier intercepts. 

Targets and Countermeasures MDA develops and manufactures highly complex targets for short, medium, 

intermediate and eventually intercontinental ranges used in BMDS flight tests to 

present realistic threat scenarios. The targets are designed to encompass the full 

spectrum of threat missile ranges and capabilities. 

Terminal High Altitude Area Defense 

(THAAD) 

THAAD is a ground-based missile defense system designed to destroy short- and 

medium-range ballistic missiles during the late-midcourse and terminal phases of 

flight. Its mission is to defend deployed U.S. forces and friendly foreign population 

centers. 

Source: MDA data.

a

The BMDS also includes other elements and supporting efforts such as the Command, Control, 

Battle Management, and Communications and BMDS Sensors efforts, which are not covered in this 

report.

b

MDA is currently developing or producing four versions of the SM-3 interceptor—IA, IB, IIA, and IIB. 

The SM-3 Block IA and SM-3 Block IB are the earlier variants of the missile. The SM-3 Block IIA and 

SM-3 Block IIB are planned to provide successively greater range and velocity to intercept medium to 

long-range ballistic missiles. The latter two versions are reported on separately, in appendices V and 

VI, respectively.

In 2009, DOD altered its approach to European defense, which originally 

focused on ground-based interceptors from the GMD element and a large 

fixed radar as well as transportable X-Band radars, in order to provide 

defenses against long-range threats to the United States and short-, 

medium-, and intermediate-range Iranian threats to Europe. This new 

approach, referred to as the European Phased Adaptive Approach (PAA),

European Missile Defense 

Acquisition Approach
 

Page 6 GAO-12-486 Missile Defense

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

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

various capabilities are matured.

The European PAA policy announced by the President articulates a 

schedule for delivering four phases of capability to defend Europe and 

augment current protection of the U.S. homeland in the following time

frames: Phase 1 in 2011, Phase 2 in 2015, Phase 3 in 2018, and Phase 4 

in 2020. DOD’s schedule for the European PAA comprises multiple 

elements and interceptors to provide an increasingly integrated ballistic 

missile defense capability. It is projected that each successive phase will 

deliver additional capability with respect to both threat missile range and 

raid size.

Table 2 outlines the plans and estimated delivery time frames associated 

with each European PAA phase.

Table 2: European Phased Adaptive Approach Plans and Delivery Time Frames as of 2009

Phase Plans Delivery time frame

Phase I Deploy current and proven missile defense systems, including the sea-based Aegis Weapon 

System, the SM-3 interceptor (Block IA) and sensors such as the Army/Navy Transportable 

Radar Surveillance system to address regional ballistic missile threats to Europe and 

deployed U.S. personnel and their families. 

2011

Phase II After appropriate testing, deploy a more capable version of the SM-3 interceptor (Block IB) 

both at sea on Aegis ships and on land in the Aegis Ashore, as well as more advanced 

sensors, to expand the defended area against short- and medium-range missile threats. 

2015

Phase III After development and testing are complete, deploy the more advanced SM-3 Block IIA 

variant currently under development at sea and on land to counter short-, medium-, and 

intermediate-range threats. 

2018

Phase IV After development and testing are complete, deploy the SM-3 Block IIB at sea and on land to 

help better cope with medium- and intermediate-range missiles and the potential future 

intercontinental range ballistic missile threat to the United States. 

2020

Sources: President’s September 17, 2009, policy announcement and MDA data.

MDA experienced mixed results in executing its fiscal year 2011 

development goals and BMDS tests. For the first time in 5 years, we are 

able to report that all of the targets used in fiscal year 2011 test events 

were delivered as planned and performed as expected. Moreover, the 

Aegis BMD program demonstrated the capability to intercept an 

intermediate-range target for the first time. Also, the THAAD program 

successfully conducted its first operational flight test in October 2011. 

Mixed Progress in 

Development and 

Delivery Efforts
 

Page 7 GAO-12-486 Missile Defense

However, none of the programs we assessed were able to fully 

accomplish their asset delivery and capability goals for the year. At the 

same time, several critical test failures as well as a test anomaly and 

delays disrupted MDA’s flight test plan and the acquisition strategies of 

several components. Overall, flight test failures and an anomaly forced 

MDA to suspend or slow production of three out of four interceptors 

currently being manufactured. The GMD program, in particular, has been 

disrupted by two recent failures, which forced MDA to halt flight testing 

and restructure its multi-year flight test program, halt production of the 

interceptors, and redirect resources to return-to-flight activities.

Production issues forced MDA to slow production of the THAAD 

interceptors, the fourth missile being manufactured.

Table 3 presents a summary of selected MDA goals for fiscal year 2011 

that details how well these goals were accomplished. Appendixes IV 

through XI further detail MDA’s progress in each of the major programs.

Table 3: BMDS Fiscal Year 2011 Selected Accomplishments

Element Fully accomplished goals Partially or not accomplished goals

Aegis BMD SM-3 

Block IA

Flight test FTM-15 demonstrated capability

required for European Phased Adaptive 

Approach (PAA) Phase I. Deployed first ship 

in support of European PAA Phase I.

Delivered 6 out of 19 planned missiles by the end of fiscal year 

2011; delivery of 12 missiles is on hold pending the results of 

the failure investigation of the anomaly in FTM-15. Depending 

on the results, delivered missiles may have to be retrofitted.

Aegis BMD SM-3 

Block IB 

Delivered first SM-3 Block IB developmental 

interceptor and fired it in the first flight test, 

FTM-16 E2. 

The SM-3 Block IB failed to intercept the target during its first 

flight test, resulting in a failure review board investigating the 

cause of the failure. The flight test is scheduled to be reconducted in 2012, delaying the certification of the Aegis BMD 

4.0.1 weapon system. 

Aegis BMD SM-3 

Block IIA

None Subsystem preliminary design review problems led to a 

program replan that adjusted the preliminary design review 

date to fiscal year 2012 and included new subsystem reviews 

for several components. The new subsystem reviews were 

completed in fiscal year 2011 and early fiscal year 2012. 

Aegis BMD SM-3 

Block IIB

Awarded three concept definition and program 

planning contracts in April 2011 and approved 

to begin technology development in July 2011.

Demonstration of low-cost divert and attitude control system 

components was delayed until the first quarter of fiscal year 

2012.

Aegis Ashore Completed preliminary design review in 

August 2011.

A new deckhouse fabrication plan delayed the award of the 

deckhouse fabrication contract, procurement of deckhouse 

fabrication materials, and the start of construction.

GMD Completed three of the five limited interceptor 

upgrades, partially to resolve component 

issues identified in developmental testing and 

manufacturing. 

Flight test, FTG-06a, failure in the first quarter of fiscal year 

2011 resulted in interceptor production suspension pending the 

completion of an investigation and a successful nonintercept 

flight test.
 

Page 8 GAO-12-486 Missile Defense

Element Fully accomplished goals Partially or not accomplished goals

PTSS Completed system requirements and system 

design reviews in the second quarter of fiscal 

year 2011.

Approval to begin technology development was delayed to the 

fourth quarter of fiscal year 2012.

Targets Launched all 11 targets as planned. Delivered 11 out of 14 targets it had planned.

THAAD Successfully conducted first operational flight 

test, FTT-12, in October 2011. Delivered 11

missiles.

Materiel release to Army delayed to the second quarter of fiscal 

year 2012. THAAD delayed plans to deliver first battery to 

fiscal year 2012 because of production issues with the 

interceptor. 

Source: GAO analysis of MDA data.

Note: BMDS fiscal year 2011 asset and capability deliveries for Airborne Infrared; Command, Control, 

Battle Management, and Communications; joint U.S.-Israel BMDS; Sea-based X-band radar; and 

Space Tracking and Surveillance System elements were not reviewed.

Highlights of progress and challenges this year include the following: 

• Targets: In prior years, we reported that problems with availability and 

reliability of targets had caused delays in MDA’s test program; 

however, in fiscal year 2011, MDA delivered 11 short- or intermediaterange targets, and all performed successfully. The targets launched 

during the year supported tests of several different BMDS elements, 

including Aegis BMD, GMD, and Patriot systems without causing 

major delays or failures in flight tests.5 Among these successful flights 

was FTX-17, the return-to-flight of MDA’s short-range air-launched 

target in July 2011. This was the target’s first launch since an 

essential mechanism that releases it from the aircraft failed in a 

December 2009 THAAD flight test. After the failure, the agency 

identified shortcomings in the contractor’s internal processes that had 

to be fixed before air-launched targets could be used again in BMDS 

flight tests. Nineteen months later, these deficiencies appeared to be 

overcome when the target missile was successfully air-launched in 

FTX-17. To reduce risk, the flight was not planned as an intercept 

mission but as a target of opportunity for several emerging missile 

defense technologies including the Space Tracking Surveillance 

System. 

• Aegis BMD: In April 2011, the Aegis BMD program demonstrated 

capability for the first time to intercept an intermediate-range target, 

 

5 This report does not contain an assessment of the Patriot Advanced Capability-3 

because its initial development is complete and it has been transferred to the Army for 

production, operation, and sustainment.
 

Page 9 GAO-12-486 Missile Defense

used remote tracking data provided by an Army/Navy Transportable 

Radar Surveillance – Model- 2 radar, and demonstrated support for 

European PAA Phase I. While the Aegis BMD program successfully 

conducted this test, there was an anomaly in a critical component of 

the SM-3 Block IA interceptor. Despite the anomaly, the interceptor 

was able to successfully intercept the target. In September 2011, the 

Aegis BMD program failed in its first attempted intercept of its SM-3 

Block IB missile. During this test—named FTM-16 Event 2—a 

problem occurred in the interceptor and it failed to intercept the target. 

The Aegis program has had to add an additional flight test and delay 

multiple additional flight tests. Program management officials stated 

the SM-3 Block IA deliveries were suspended and the SM-3 Block IB 

production was slowed while the failure reviews are conducted.

• THAAD: The THAAD program also had some noteworthy testing 

accomplishments in 2011, successfully conducting its first operational 

flight test in October 2011.6 This test was a significant event for the 

program as it was designed to be representative of the fielded system 

with soldiers conducting the engagement. During the test, the THAAD 

system engaged and nearly simultaneously intercepted two shortrange ballistic missile targets. However, THAAD also experienced a 

delay in its planned flight test schedule for fiscal year 2011. A flight 

test originally scheduled for the second quarter of fiscal year 2011 

was delayed until fiscal year 2012 due to the availability of airlaunched targets and then subsequently was canceled altogether. 

This cancellation has delayed verification of THAAD’s capability 

against a medium-range target.

• GMD: As has been the case since 2005, testing failures continue to 

affect the GMD program in fiscal year 2011. Specifically, as a result of 

the failed flight test in January 2010,

7

 

6 An operational flight test is designed to test the components by having the warfighter 

utilize them in an operational environment. 

MDA added a retest designated 

as FTG-06a. However, this retest also failed in December 2010 due to 

a failure in a key component of the kill vehicle. The GMD program has 

added two additional flight tests in order to demonstrate the Capability 

Enhancement II (CE-II) interceptor. However, since fiscal year 2009 

MDA has already manufactured and delivered 12 interceptors, 2 of 

7 This test—FTG-06—was planned as the first test of GMD’s enhanced version of the kill 

vehicle called the Capability Enhancement II.
 

Page 10 GAO-12-486 Missile Defense

which have been used in flight tests, prior to halting further deliveries. 

The manufacture of components related to the failure and delivery of 

interceptors has been halted while the failure review and resolution 

actions are ongoing. MDA conducted a failure review investigation 

throughout fiscal year 2011 and concluded that the CE-II interceptor 

design does not work as intended and therefore required redesign 

and additional development. MDA is currently undergoing an 

extensive effort to overcome the design problem and return to 

intercept flight tests.

According to a GMD program official, the program has already 

conducted over 50 component and subcomponent tests to develop a 

fix and verify the design. MDA also realigned resources from planned 

2011 testing activities to fund the investigation and fund return-tointercept activities including redesign efforts. For example, the 

program delayed funding the rotation of older fielded interceptors into 

flight test assets, delayed funding interceptor manufacturing, and 

delayed purchasing ground-based interceptor (GBI) upgrade kits. 

However, the agency did continue its efforts to increase reliability of 

the interceptors through upgrades and its repair of five interceptors to 

help mitigate the effects on the production line. MDA is planning on 

upgrading 15 interceptors between fiscal years 2013 to 2017.

Additionally, MDA plans to refurbish five older interceptors between 

2014 and 2017 to support flight tests. 

• SM-3 Block IIA: MDA recognized that the program’s schedule 

included elevated acquisition risks and, as such, took actions in fiscal 

year 2011 to reduce those risks as well as potential future cost 

growth. The program planned to hold its system preliminary design 

review (PDR)—at which it would demonstrate that the technologies 

and resources available for the SM-3 Block IIA would result in a 

product that matched its requirements—but subsystem review 

problems for key components meant the system review had to be 

adjusted by 1 year. The program appropriately added time and money 

to its program by revising its schedule to relieve schedule 

compression between its subsystem and system-level design reviews 

and incorporated lessons learned from other SM-3 variants into its 

development to further mitigate production unit costs. The program 

still expects to meet the 2018 time frame for European PAA Phase 3.
 

Page 11 GAO-12-486 Missile Defense

Models and simulations are critical to understanding BMDS capabilities. 

The complex nature of the BMDS, with its wide range of connected 

elements, requires integrated system-level models and simulations to 

assess its performance in a range of system configurations and 

engagement conditions. Assessing BMDS performance through flight 

tests alone is prohibitively expensive and faces safety and test range 

limitations that can best be dealt with through sound, realistic models and 

simulations.

Ensuring that the models and simulations are sound and realistic requires 

a rigorous process to accomplish two main tasks: (1) developing 

individual system models and realistically linking those models and 

simulations and (2) gathering data from MDA’s ground and flight tests to 

feed into the models. MDA attempts to confirm that the models re-create 

the actual performance found in BMDS test events.8

MDA has made some limited progress in developing the individual system 

models and linking those models. Originally, MDA’s models had been 

developed for use only by each element, not for integrated assessments. 

MDA is still developing these individual element models, while at the 

same time linking the models to show BMDS-level performance. Since 

fiscal year 2010, MDA has made progress in creating a common 

framework, whereby the various BMDS element-level hardware-in-theloop

The Operational Test 

Agency (OTA) independently assesses how realistic the models are in a 

formal process called accreditation. When a model is accredited it means 

that it can be trusted to produce high-confidence results for its intended 

use, and the limitations of the model are known. The development of 

reliable MDA models depends upon the collection of test data upon which 

to anchor the models. Because MDA had made very limited progress in

identifying and collecting needed data, MDA’s test program was 

reoriented beginning in 2010 to enable the collection of data to support 

the development of BMDS models.

9

 

8 This process is called anchoring.

models are subjected to a common and consistent scene and 

environment during test events. MDA is now using this framework, known 

as the Single Stimulation Framework, in assessing BMDS performance. 

9 With hardware-in-the-loop models, simulations are conducted with actual mission 

components/hardware in a laboratory environment, and the physical 

environment/conditions are simulated, under the control of computer equipment.

Limited Progress in 

Developing Models 

and Simulations; 

Much More Remains 

to Be Done
 

Page 12 GAO-12-486 Missile Defense

MDA officials highlight that the framework is being used to evaluate 

BMDS performance in increasingly complex and realistic scenarios, 

employing greater numbers of BMDS assets.

The process of developing and linking these models is extremely complex 

and difficult and will take many years to accomplish. In August 2009, the 

U.S. Strategic Command and OTA jointly informed MDA of 39 systemlevel limitations in MDA’s models and simulations program that adversely 

affect their ability to assess BMDS performance. Resolution of these 39 

limitations, OTA maintains, would permit MDA’s models and simulations 

to provide more realistic representations of BMDS performance using the 

full complement of fielded BMDS assets. OTA officials have noted that 

since August 2009, MDA has partially or fully resolved 7 of these issues 

and identified technical solutions for 15 more. According to OTA officials, 

most of the resolved limitations are issues that are more easily 

addressed, such as the installation of improved communications systems 

and the provision of separate workstations for simulation controllers. No 

technical solutions have yet been identified for the remaining 17 of the 39 

issues and OTA officials maintain that they are still awaiting an MDA

timeline for the complete resolution of these remaining limitations.

We reported, in 2009, problems with MDA’s model development and the 

lack of flight test data. In 2009, MDA undertook a new approach to test 

planning to focus the test program on gathering critical test data needed 

for modeling and simulation. Since 2009, MDA has bolstered efforts to 

collect test data for the BMDS model and simulation program; however, 

considerable effort and time are required to address all known shortfalls. 

Through its ongoing test data collection activities, MDA has collected 309 

critical variables since 2009; however, those represent only 15 percent of 

the total needed. Flight test failures, anomalies and delays have reduced 

the amount of real-world data MDA expected. Additionally, some required 

data are difficult to collect, posing challenges even when a flight test is 

properly executed. When tests are carried out, considerable post-test 

data analysis is required for model development. Under the current plan, 

MDA does not foresee complete collection of data on these critical 

variables until sometime between 2017 and 2022.

MDA has also made some limited progress in achieving partial 

accreditation for some BMDS models—ensuring that they are realistic

and can be trusted and that their limitations are known. MDA models are 

accredited for specific functions for which they are to be employed. Over 

the past few years, OTA officials have performed assessments of MDA’s 

models and simulations and have noted that, amongst the element-level 
 

Page 13 GAO-12-486 Missile Defense

models, those for THAAD and Aegis BMD are farthest along. While MDA 

has made some progress toward accreditation of element models for 

specific functional areas, MDA has not yet achieved OTA accreditation in 

other key areas, such as any of the 18 environmental models. See 

appendix III for further details on MDA’s modeling and simulation efforts.

To meet the 2002 presidential direction to initially rapidly field and update 

missile defense capabilities as well as the 2009 presidential 

announcement to deploy missile defenses in Europe, MDA has 

undertaken and continues to undertake highly concurrent acquisitions. 

For example, large-scale acquisition efforts were initiated before critical 

technologies were fully understood and programs were allowed to move 

forward into production without having tests completed to verify 

performance. Such practices enabled MDA to quickly ramp up efforts in 

order to meet tight presidential deadlines, but they were high risk and 

resulted in problems that required extensive retrofits, redesigns, delays, 

and cost increases. A program with high levels of concurrency 

(1) proceeds into product development before technologies are mature or 

appropriate system engineering has been completed or (2) proceeds into 

production before a significant amount of independent testing is 

conducted to confirm that the product works as intended. High levels of 

concurrency were present in MDA’s initial efforts and are present in 

current efforts.

Recently, the agency has begun emphasizing the need to follow 

knowledge-based development practices, which encourage accumulating 

more technical knowledge before program commitments are made and 

conducting more testing before production is initiated. Developmental 

challenges and delays are to be expected in complex acquisitions, such 

as those for missile defense. However, when concurrency is built into 

acquisition plans, any developmental challenges or delays that do occur 

exacerbate the cost, schedule, and performance effects of those 

problems, particularly when production lines are disrupted or assets have 

already been manufactured and must be retrofitted. In 2009, we 

recommended that MDA synchronize the development, manufacturing, 

and fielding schedules of BMDS assets with the testing and validation 

schedules to ensure that items are not manufactured for fielding before 

their performance has been validated through testing. In response, DOD 

partially concurred with our recommendation, maintaining that MDA was 

pursuing synchronization of development, manufacturing, and fielding of 

BMDS assets with its established testing and validation requirements. 

However, because MDA continues to employ concurrent strategies, it is 

MDA’s Highly 

Concurrent 

Acquisition Strategy 

Magnifies the Effects 

of Tests and Other 

Problems 
 

Page 14 GAO-12-486 Missile Defense

likely that it will continue to experience these types of acquisition 

problems.

Concurrency is broadly defined as the overlap between technology 

development and product development or between product development 

and production of a system. The stated rationale for concurrency is to 

introduce systems in a timelier manner, to fulfill an urgent need, to avoid 

technology obsolescence and to maintain an efficient industrial 

development and production workforce. While some concurrency is 

understandable, committing to product development before requirements 

are understood and technologies mature as well as committing to 

production and fielding before development is complete is a high-risk 

strategy that often results in performance shortfalls, unexpected cost 

increases, schedule delays, and test problems.

10

In contrast, successful programs that deliver promised capabilities for the 

estimated cost and schedule follow a systematic and disciplined 

knowledge-based approach. This approach recognizes that development 

programs require an appropriate balance between schedule and risk and, 

in practice, programs can be executed successfully with some level of 

concurrency. For example, it is appropriate to order long-lead production 

material in advance of the production decision, with the pre-requisite that 

developmental testing is substantially accomplished and the design 

At the very least, a 

highly concurrent strategy forces decision makers to make key decisions 

without adequate information about the weapon’s demonstrated 

operational effectiveness, reliability, logistic supportability, and readiness 

for production. Also, starting production before critical tests have been 

successfully completed has resulted in the purchase of systems that do 

not perform as intended. These premature commitments mean that a 

substantial commitment to production has been made before the results 

of testing are available to decision makers. Accordingly, they create 

pressure to keep producing to avoid work stoppages even when problems 

are discovered in testing. These premature purchases have affected the 

operational readiness of our forces and quite often have led to expensive 

modifications.

 

10 GAO, Best Practices: Capturing Design and Manufacturing Knowledge Early Improves 

Acquisition Outcomes, GAO-02-701 (Washington, D.C.: July 15, 2002), and Defense 

Acquisitions: Production and Fielding of Missile Defense Components Continue with Less 

Testing and Validation Than Planned, GAO-09-338 (Washington, D.C.: Mar. 13, 2009).

Highly Concurrent 

Acquisition Strategies 

Often Lead to Cost, 

Schedule, and 

Performance 

Consequences
 

Page 15 GAO-12-486 Missile Defense

confirmed to work as intended. We have found that, in this approach, high 

levels of product knowledge are demonstrated at critical points in 

development.11

See figure 1 for depictions of a concurrent schedule and a schedule that 

uses a knowledge-based approach.

This approach is not unduly concurrent because 

programs take steps to gather knowledge that demonstrates that their 

technologies are mature, their designs are stable, and their production 

processes are in control before transitioning between acquisition phases. 

This knowledge helps programs identify risks early and address them 

before they become problems. It is a process in which technology 

development and product development are treated differently and 

managed separately. The process of technology development culminates 

in discovery—the gathering of knowledge—and must, by its very nature, 

allow room for unexpected results and delays. The process of developing 

a product culminates in delivery and therefore gives great weight to 

design and production. If a program is falling short in technology maturity, 

it is harder to achieve design stability and almost impossible to achieve 

production maturity. It is therefore key to separate technology from 

product development and product development from production—in other 

words, it is key to avoid concurrency when these transitions are made. 

The result of a knowledge-based approach is a product delivered on time, 

within budget, and with the promised capabilities.

 

11 GAO, Defense Acquisitions: Assessments of Selected Major Weapon Programs, 

GAO-06-391 (Washington, D.C.: Mar. 31, 2006).
 

Page 16 GAO-12-486 Missile Defense

Figure 1: Concurrency Compared to the Knowledge-Based Approach

In fiscal year 2011, due to flight test failures and a flight test anomaly, 

MDA suspended production of two interceptors—one in the GMD 

program and one in the Aegis BMD program—and slowed production of a 

third—in the Aegis BMD program. In addition, development problems with 

a key THAAD component disrupted that program’s interceptor production.

MDA undertook a highly concurrent acquisition strategy to meet the 

President’s 2002 directive to deploy an initial set of missile defense 

capabilities by 2004. To do so, the GMD element concurrently matured 

technology, designed the system, tested the design, and produced and 

fielded a system. While this approach allowed GMD to rapidly field a 

limited defense that consisted of five CE-I interceptors and a fire control 

system, the concurrency resulted in unexpected cost increases, schedule 

delays, test problems, and performance shortfalls. Since then, MDA has 

produced and emplaced all of its planned CE-I interceptors. To address 

issues with the CE-I interceptors, MDA has undertaken an extensive 

retrofit and refurbishment program.

Prior to MDA fully completing development and demonstrating the 

capability of the initial interceptor, MDA committed in 2004 to another 

Programs That Undertook 

Highly Concurrent 

Strategies and 

Consequences

Ground-based Midcourse 

Defense 
 

Page 17 GAO-12-486 Missile Defense

highly concurrent development, production, and fielding strategy for an 

enhanced version of the interceptor—CE-II—as shown in figure 2.12

Figure 2: GMD Concurrent Schedule

Note: CE-I development began in 1996—the first interceptor was delivered in 2004, the first intercept 

was completed in 2006, delivery was completed in first quarter of 2009.Testing continues.

MDA proceeded to concurrently develop, manufacture, and deliver 12 of 

these interceptors before halting manufacture of components and delivery 

of interceptors in 2011 due to the failure in FTG-06a.13

The discovery of the design problem while production is under way has 

increased MDA costs, led to a production break, may require retrofit of 

fielded equipment, delayed delivery of capability to the war-fighter, and 

altered the flight test plan. For example, the flight testing cost to confirm 

the CE-II capability has increased from $236 million to about $1 billion.

 Although MDA 

had not successfully tested this interceptor, failing in both its attempts, it 

manufactured and delivered 12 of these interceptors.

14

 

12 An interceptor is composed of two main components: the booster and an 

exoatmospheric kill vehicle. The CE-II upgrade was intended to update certain 

components, some of which were becoming obsolete. However, updating those 

components changed the performance of the interceptor and remains a substantial 

developmental challenge. 

13 MDA officials stated that the agency is allowing the contractor to continue work on 

those components of the EKV that would not be factors in the FTG-06a flight test failure in 

order to keep the production line moving. 

14 These costs include the target, mission planning, range support, and post-test analysis.
 

Page 18 GAO-12-486 Missile Defense

In addition, the program will have to undertake another retrofit program, 

for the 10 CE-II interceptors that have already been manufactured.15

The GMD flight test program has been disrupted by the two back to back 

failures. For example, MDA has restructured the planned multiyear flight 

test program in order to test the new design prior to an intercept attempt. 

MDA currently plans to test the new design in a nonintercept test in fiscal 

year 2012.

According to a GMD program official, although the full cost is currently 

unknown, he expects the cost to retrofit the CE-II interceptors to be 

around $18 million each or about $180 million for all 10. Intended to be 

ready for operational use in fiscal year 2009, it will now be at least fiscal 

year 2013 before the warfighter will have the information needed to 

determine whether to declare the variant operational.

Because MDA prematurely committed to production before the results of 

testing were available, it has had to take steps to mitigate the resulting 

production break, such as accelerating retrofits to 5 of the CE-I 

interceptors. Program officials have stated that if the test confirms that the 

cause of the failure has been resolved, the program will restart the 

manufacturing and integration of the CE-II interceptors. According to 

MDA, because of the steps taken to develop and confirm the design 

change, a restart of the CE-II production line at that time will be low risk. 

However, while MDA has established a rigorous test plan to confirm that 

the design problem has been overcome, the confirmation that the design 

works as intended through all phases of flight, including the actual 

intercept, will not occur until an intercept test—FTG-06b—currently 

scheduled for the end of fiscal year 2012 or the beginning of fiscal year 

2013.

High levels of concurrency will continue for the GMD program even if the 

next two flight tests are successful. GMD will continue its developmental 

flight testing until at least 2022, well after production of the interceptors 

are scheduled to be completed. MDA is accepting the risk that these 

developmental flight tests may discover issues that require costly design 

changes and retrofit programs to resolve. As we previously reported, to 

date all GMD flight tests have revealed issues that led to either a 

 

15 Since fiscal year 2009 MDA has manufactured and delivered 12 interceptors, 2 of which 

have been used in flight tests.
 

Page 19 GAO-12-486 Missile Defense

hardware or software change to the ground-based interceptors.16

The SM-3 Block IB program, the second version of the SM-3 interceptor,

is facing both developmental and production challenges that are 

exacerbated by its concurrent schedule, as shown in figure 3. This 

interceptor shares many components with the SM-3 Block IA, but the 

kinetic warhead is new technology that is being developed. The need to 

meet the presidential directive to field the Aegis BMD 4.0.1/SM-3 Block IB 

by the 2015 time frame for European missile defense is a key driver for 

the high levels of concurrency. 

See 

appendix VIII for more details on the GMD program.

Figure 3: SM-3 Block IB Concurrent Schedule

In response to previous developmental problems and to prevent a 

production break, MDA has twice had to purchase additional SM-3 Block 

IA interceptors and faces a similar decision in fiscal year 2012. According 

to MDA, the additional SM-3 Block IA missiles were purchased to avoid a 

production gap as well as to keep suppliers active, and to meet 

combatant command SM-3 missile quantity requirements. The program, 

according to program management officials, was scheduled to purchase 

the last SM-3 Block IA in fiscal year 2010 and transition to procurement 

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

MDA began purchasing the SM-3 Block IB in 2009 beyond the numbers 

needed for flight testing while a critical maneuvering technology was 

 

16 GAO-11-372. 

Aegis BMD SM-3 Block IB 
 

Page 20 GAO-12-486 Missile Defense

immature and prior to a successful flight test. According to the Director, 

MDA these missiles support development and operational testing; prove 

out manufacturing processes; provide information on reliability, 

maintainability and supportability; verify and refine cost estimates; and 

ensure that the missile will meet its performance requirements on a 

repeatable basis. MDA has determined that 18 of the 25 SM-3 Block IB 

missiles ordered are to be used for developmental testing; the remaining 

7 interceptors are currently unassigned for tests and may be available for 

operational use.17

MDA is also planning to purchase 46 additional SM-3 Block IB missiles in 

fiscal year 2012. Meanwhile, testing has yet to validate the missile’s 

performance, the cause of the test failures is not yet determined, and 

remaining tests may not be completed until 2013. Consequently, 

purchasing additional interceptors beyond those needed for development 

remains premature. The first SM-3 Block IB developmental flight test 

failed in September 2011, and an anomaly occurred in an April 2011 flight 

test of the SM-3 Block IA. The flight test failure and the test anomaly 

occurred in components that are shared between the SM-3 Block IA and 

IB. Program officials are still investigating the reason for these failures. 

The program was unable to validate initial SM-3 Block IB capability during 

the failed September test, and program officials hope to conduct a series 

of three intercept tests in fiscal year 2012 needed to validate SM-3 Block 

IB capability. Depending on the timing and content of the failure review 

board results, this schedule could change further. 

According to program management officials, these 

unassigned rounds represent a small portion of the total planned 

purchases.

Any SM-3 Block IB missiles ordered in fiscal year 2012 before mitigations 

for the anomaly and the failure, if needed, are determined and before the 

three flight tests confirm the design works as intended would be at higher 

risk of cost growth and schedule delays. In addition, SM-3 Block IB 

missiles already manufactured but not delivered also are at higher risk of 

requiring a redesign depending on the results of the failure review. 

Program management officials stated MDA has slowed SM-3 Block IB 

manufacturing until the outcome of the failure review board is known. It 

 

17 Six of the 18 missiles will not be needed for developmental tests until fiscal year 2015 

or later. SM-3 Block IB missiles are used for developmental tests of the SM-3 Block IB and 

Aegis Weapons System 4.0.1 program and are planned for use in developmental tests for 

Aegis Ashore and Aegis Weapons System 5.0.
 

Page 21 GAO-12-486 Missile Defense

remains unclear whether the additional 46 missiles will be ordered before 

the failure reviews are complete and the interceptor is able to 

demonstrate that it works as intended. Recognizing the critical importance 

of the completing the planned fiscal year 2012 intercept tests, the 

operational need for SM-3 missiles, the relative success of the SM-3 

Block IA, as well as the potential for a production break, the Senate 

Committee on Appropriations directed MDA to use the fiscal year 2012 

SM-3 Block IB funds for additional Block IA missiles should the test and 

acquisition schedule require any adjustments during fiscal year 2012. 

However, a decision to purchase additional SM-3 Block IA missiles in 

fiscal year 2012 to help avoid a production break may be affected by the 

SM-3 Block IA failure investigation that has not yet been completed. 

Program management officials stated most deliveries of the SM-3 Block 

IA have been suspended pending the results of the failure review.

See appendix IV for more details on the Aegis BMD SM-3 Block IB 

program.

MDA awarded a contract to produce THAAD’s first two operational 

batteries in December 2006 before its design was stable and 

developmental testing of all critical components was complete. As a 

result, the THAAD program has experienced unexpected cost increases, 

schedule delays, test problems, and performance shortfalls. At that time, 

MDA’s first THAAD battery, consisting of 24 interceptors, 3 launchers, 

and other associated assets, was to be delivered to the Army as early as 

2009. In response to pressure to accelerate fielding the capability, 

THAAD adopted a highly concurrent development, testing, and production 

effort that has increased program costs and delayed fielding of the first 

THAAD battery until early fiscal year 2012. (See fig. 4.)

Figure 4: THAAD Concurrent Schedule

Terminal High Altitude Area 

Defense 
 

Page 22 GAO-12-486 Missile Defense

Problems encountered while THAAD was concurrently designing and 

producing assets increased costs by $40 million and caused slower 

delivery rates of both the first and second THAAD batteries. These 

batteries are not projected to be complete before July 2012—16 months 

after the original estimate of March 2011. While all assets except the 

interceptors were complete in 2010, the first operational interceptor for 

the first THAAD battery was not produced until the second quarter of 

fiscal year 2011. At the same time, MDA committed to purchasing more 

assets by signing a production contract for two additional THAAD 

batteries, despite incomplete testing and qualification of a safety device 

on the interceptor. During fiscal year 2011, after several production startup issues, 11 of the expected 50 operational interceptors were 

delivered.18 Consequently, the first battery of 24 interceptors was not 

complete and available for fielding until the first quarter of fiscal year 

2012—more than 2 years later than originally planned. The same issues 

have delayed the second battery as well. Although the launchers and 

other components for the second battery were completed in 2010, the full 

50 interceptors necessary for both batteries are not expected to be 

delivered until July 2012.

MDA has taken steps to incorporate some acquisition best practices in its 

newer programs, such as increasing competition and partnering with 

laboratories to build prototypes. However, the SM-3 Block IIB, Aegis 

Ashore, and the PTSS program acquisition strategies still include high or 

elevated levels of concurrency that set the programs up for increased 

acquisition risk, including cost growth, schedule delays, and performance 

shortfalls.

• SM-3 Block IIB: The program has high levels of concurrency because 

it plans to commit to product development prior to holding a PDR, as 

depicted in figure 5. 

 

18 Twelve total interceptors were delivered by the end of fiscal year 2011, but the first, 

produced in fiscal year 2010, was used in a flight test.

Newer Programs Continue 

High Levels of 

Concurrency 
 

Page 23 GAO-12-486 Missile Defense

Figure 5: SM-3 Block IIB Concurrent Schedule

Note: Given the early stage of the program, which does not yet have a baselined schedule, we are 

not able to depict the production plans or the end of the product development phase for the SM-3 

Block IIB.

The need to meet the 2020 time frame announced by the President to 

field the SM-3 Block IIB for European PAA Phase IV is a key driver for 

the high levels of concurrency. The program is following some sound 

acquisition practices by awarding competitive contracts to multiple 

contractors to develop options for missile configurations and mature 

key technologies as well as planning to compete the product 

development contract. However, while the program is holding a series 

of reviews that will provide engineering insight into the SM-3 Block IIB 

design, we have previously reported that before starting development, 

programs should hold key system engineering events, culminating in 

the PDR, to ensure that requirements are defined and feasible and 

that the proposed design can meet those requirements within cost, 

schedule, and other system constraints.19 In addition, based on the 

initial schedule developed by the program and prior history of SM-3 

interceptor development, the SM-3 Block IIB program will need to 

commit to building the first flight test vehicle prior to holding the PDR

in order to remain on the planned test schedule. According to MDA, 

this approach is a low risk development if the program is funded at 

requested levels. The agency stated that the achievement of an initial 

operating capability will be based on technical progress and execution 

of a “fly before buy” approach.

 

19 GAO, Defense Acquisitions: Assessments of Selected Weapons Programs, 

GAO-11-233SP (Washington, D.C.: Mar. 29, 2011).
 

Page 24 GAO-12-486 Missile Defense

• Aegis Ashore: The program initiated product development and 

established a cost, schedule, and performance baseline early; 

included high levels of concurrency in its construction and 

procurement plan; and has not aligned its flight testing schedule with 

construction and component procurement decisions. The need to 

meet the 2015 time frame announced by the President to field the 

Aegis Ashore for European PAA Phase II is a key driver for the high 

levels of concurrency. The high levels of concurrency are depicted in 

figure 6.

Figure 6: Aegis Ashore Concurrent Schedule

Aegis Ashore began product development and set the acquisition 

baseline before completing the PDR. This sequencing increased 

technical risks and the possibility of cost growth by committing to 

product development with less technical knowledge than 

recommended by acquisition best practices and without ensuring that 

requirements were defined, feasible, and achievable within cost and 

schedule constraints.

The program has initiated procurement of components for the 

installation and plans to start fabricating two enclosures called 

deckhouses—one for operational use at the Romanian Aegis Ashore 

installation and one for testing at the Pacific Missile Range Facility—in 

fiscal year 2012, but does not plan to conduct the first intercept test of 

an integrated Aegis Ashore installation until fiscal year 2014. Further, 

the program plans to build the operational deckhouse first, meaning 

any design modification identified through system testing in the test 

deckhouse or the intercept test will need to be made on an existing 
 

Page 25 GAO-12-486 Missile Defense

deckhouse and equipment. As we have previously reported, such 

modifications on an existing fabrication may be costly. 

According to the Director of MDA, Aegis Ashore is a land adaptation 

of the Aegis weapons system sharing identical components. However, 

we previously have reported on the modifications to existing Aegis 

BMD technology that must be made to operate in a new land 

environment.

20

• PTSS: MDA approved a new acquisition strategy for PTSS in January 

2012 that acknowledges some concurrency, but program officials 

stated that they have taken steps to mitigate the acquisitions risks and 

have worked to incorporate several aspects of acquisition best 

practices into the strategy. MDA plans to develop and acquire the 

satellites in three phases. First, a laboratory-led contractor team will 

build two lab development satellites. Second, an industry team, 

selected through open competition while the laboratory team is still in 

a development phase, will develop and produce two engineering and 

manufacturing development satellites. The two laboratory-built and 

the two industry-built development satellites are planned to be 

operational. Third, there will be a follow-on decision for the industry 

team to produce additional satellites in a production phase.

In addition, some of the planned components for Aegis 

Ashore are being developed for future Aegis weapon system 

upgrades and are still undergoing development. Aegis BMD program 

management officials stated that the risks of concurrency in the 

program schedule are low due to the program’s reliance on existing 

technology and the ground testing that will be completed prior to the 

first intercept test. Nevertheless, the program has a limited ability to 

accommodate delays in construction or testing. 

While the strategy incorporates several important aspects of sound 

acquisition practices, such as competition and short development time 

frames, there remains elevated acquisition risks tied to the 

concurrency between the lab- and industry-built developmental 

satellites, as shown in figure 7.

 

20 GAO-11-372. 
 

Page 26 GAO-12-486 Missile Defense

Figure 7: PTSS Concurrent Schedule

Because the industry-built developmental satellites will be under contract 

and under construction before on-orbit testing of the lab-built satellites, 

the strategy may not enable decision makers to fully benefit from the 

knowledge about the design to be gained from that on-orbit testing before 

making major commitments.

See appendixes for more details on each program. 

MDA has a long history of pursuing highly concurrent acquisitions in order 

to meet challenging deadlines set by the administration. Concurrency can 

enable rapid acquisition of critical capabilities but at a high risk, 

particularly if technologies are not well understood at the outset of a 

program, requirements are not firm, and decisions are made to keep 

moving a program forward without sufficient knowledge about issues, 

such as design, performance, and producibility. In MDA's case, many of 

its highly concurrent acquisition programs began with many critical 

unknowns. While the developmental problems that have been discovered 

in these acquisitions are inherent in complex and highly technical efforts, 

the effects were considerably magnified due to the high levels of 

concurrency, including questions about the performance of fielded assets, 

significant disruptions to production, and expensive retrofits. While MDA 

has embraced the value of reducing unknowns before making key 

decisions in some of its newer programs, such as the SM-3 Block IIA, and 

adopted good practices, such as awarding competitive contracts to 

multiple contractors in the SM-3 Block IIB program, it has continued to 

Conclusions 
 

Page 27 GAO-12-486 Missile Defense

plan and implement highly concurrent approaches in others. In fact, 

today, MDA is still operating at a fast pace, as production and fielding of 

assets remains, in many cases, ahead of the ability to test and validate 

them. 

As we recommended in 2009, these disruptions can only be avoided 

when the development, manufacture, and fielding schedules of BMDS 

assets are synchronized with the testing and validation schedules to 

ensure that items are not approved to be manufactured for fielding before 

their performance has been validated through testing. Moreover, as we 

have concluded for several years, while concurrency was likely the only 

option to meet the tight deadlines MDA has been directed to work under, 

having an initial capability in place should now allow the agency to 

construct acquisition approaches that are less risky from a cost, schedule 

and performance perspective. Near-term steps MDA can take to reduce 

cost, schedule, and performance risks include actions such as 

demonstrating the second GMD interceptor can work as intended before 

resuming production and verifying that the SM-3 Block IB completes 

developmental flight tests before committing to additional production. 

Longer-term solutions require the Office of the Secretary of Defense to 

assess the level of concurrency that currently exists within MDA programs 

and where that concurrency can be reduced. Moreover, while missile 

defense capabilities play a vital role in the United States' national security 

and international relationships, decisions about deadlines for delivering 

capabilities need to be weighed against the costs and risks of highly 

concurrent approaches. 

We recommend that the Secretary of Defense take the following seven 

actions to reduce concurrency and strengthen MDA’s near- and long-term 

acquisition prospects. To strengthen MDA’s near-term acquisition 

prospects, we recommend that the Secretary of Defense:

For the GMD program, direct MDA to

1) demonstrate that the new CE-II interceptor design works as 

intended through a successful intercept flight test in the 

operational environment—FTG-06b—prior to making the 

commitment to restart integration and production efforts and

2) take appropriate steps to mitigate the effect of delaying the CE-II 

production restart until a successful intercept occurs. Specific 

consideration should be given by MDA to accelerating additional 

needed CE-I refurbishments.

Recommendations for 

Executive Action
 

Page 28 GAO-12-486 Missile Defense

For the Aegis BMD program, direct MDA to

3) verify the SM-3 Block IB engagement capability through the 

planned three developmental flight tests before committing to 

additional production beyond those needed for developmental 

testing and

4) report to the Office of the Secretary of Defense and to Congress 

the root cause of the SM-3 Block IB developmental flight test 

failure, path forward for future development, and the plans to 

bridge production from the SM-3 Block IA to the SM-3 Block IB 

before committing to additional purchases of the SM-3 Block IB.

For the SM-3 Block IIB program, direct MDA to

5) ensure that the SM-3 Block IIB requirements are defined and 

feasible and that the proposed design can meet those 

requirements within cost, schedule, and other system constraints 

by delaying the commitment to product development until the 

program completes a successful preliminary design review.

To strengthen MDA’s longer-term acquisition prospects, we recommend 

that the Secretary of Defense:

6) Direct the Office of the Under Secretary of Defense for 

Acquisition, Technology and Logistics to review all MDA 

acquisitions for concurrency, and determine whether the proper 

balance has been struck between the planned deployment dates 

and the concurrency risks taken to achieve those dates.

7) Direct the Office of the Under Secretary of Defense for 

Acquisition, Technology and Logistics to review and report to the 

Secretary of Defense the extent to which the capability delivery 

dates announced by the President in 2009 are contributing to 

concurrency in missile defense acquisitions and recommend 

schedule adjustments where significant benefits can be obtained 

by reducing concurrency.
 

Page 29 GAO-12-486 Missile Defense

DOD provided written comments on a draft of this report. These 

comments are reprinted in appendix II. DOD also provided technical 

comments, which were incorporated as appropriate.

In responding to a draft of this report, DOD concurred with six of our 

seven recommendations and commented on actions in process or 

planned in response. In some cases, these actions are responsive to 

immediate problems, but do not appear to consistently address the 

implications for concurrency in the future. 

DOD concurred with our recommendation for the GMD program to 

demonstrate that the new CE-II interceptor design works as intended 

through a successful intercept flight test in the operational environment—

FTG-06b—prior to making the commitment to restart integration and 

production efforts. In response to this recommendation, DOD stated that 

the program plans to restart the CE-II manufacturing upon successful 

completion of the FTG-06b flight test. This decision will reduce the risk of 

prematurely restarting CE-II production. 

DOD also concurred with our recommendation for the Aegis BMD 

program to verify the SM-3 Block IB engagement capability through the 

planned three developmental flight tests before committing to additional

production, stating that the final decision to purchase SM-3 Block IB 

missiles with DOD-wide procurement funding will be made after the next 

three planned flight tests. We remain concerned that MDA is planning to 

purchase 46 additional SM-3 Block IB missiles prematurely using 

research, development, test, and evaluation funds in fiscal year 2012 

before validating the performance of the missile and before determining 

the root cause of test failures—risking disrupting the supply chain if 

testing reveals the need to make design changes. We continue to believe 

that the program should not purchase any additional missiles, regardless 

of the type of funding used to purchase them, until the SM-3 Block IB’s 

engagement capability has been verified through the three developmental 

flight tests currently planned for the program. We have modified the 

recommendation to focus on verifying the capability before committing to 

additional production beyond the missiles needed for developmental 

testing. 

DOD concurred with our recommendation to direct the Office of the Under 

Secretary of Defense for Acquisition, Technology and Logistics to review 

all MDA acquisitions for concurrency, and determine whether the proper 

balance has been struck between the planned deployment dates and the 

Agency Comments 

and Our Evaluation
 

Page 30 GAO-12-486 Missile Defense

concurrency risks taken to achieve those dates. In its response, DOD 

stated that it will wait until fielding dates are established to undertake 

concurrency assessments, and in the interim it will ensure that knowledge 

is gained to support capability deliveries. However, we remain concerned 

that DOD continues to focus on gaining key acquisition knowledge much 

later than needed. DOD’s approach is to understand the extent to which 

the design works as intended after committing to production—a high-risk 

strategy—rather than before committing to production. The assessment of 

concurrency should precede and should inform the setting of fielding 

dates. If the department waits until fielding dates are set to assess 

concurrency in the BMDS, it will miss the opportunity and accept the

performance, cost, and schedule consequences. Our position is not 

unique in this regard. In recent testimony, the Acting Under Secretary of 

Defense for Acquisition, Technology and Logistics confirmed that 

excessive concurrency can drive cost growth and result in major schedule 

disruptions that produce further inefficiency. Noting that the acceptable 

degree of concurrency between development and production depends on 

a range of factors, including the risk associated with the development 

phase, the urgency of the need, and the likely impact on cost and 

schedule of realizing that risk, he stated that the Office of the Secretary of 

Defense intends to assess the levels of concurrency within programs, as 

our report recommends should be done for missile defense elements.

DOD also concurred with our recommendation to direct the Office of the 

Under Secretary of Defense for Acquisition, Technology and Logistics to

review and report to Secretary of Defense the extent to which the 

presidentially announced capability delivery dates are contributing to 

concurrency in missile defense acquisitions and recommend schedule 

adjustments where significant benefits can be obtained by reducing 

concurrency. DOD stated that the current missile defense program is 

structured to develop and field capabilities at the earliest opportunity while 

taking into account prudent risk management practices and executing a 

thorough test and evaluation program. The department further noted that 

when fielding dates are established, the Office of the Under Secretary of 

Defense for Acquisition, Technology and Logistics will review and report 

to the Secretary of Defense the extent to which presidentially announced

capability dates may be contributing to concurrency in missile defense 

acquisitions and recommend schedule adjustments if significant benefits 

can be obtained by reducing concurrency. Given the amount of 

concurrency we have found in our reviews of the BMDS, we believe that 

significant benefits can be reaped if concurrency is assessed sooner 

rather than later. 
 

Page 31 GAO-12-486 Missile Defense

DOD partially concurred with our recommendation to report to the Office 

of the Secretary of Defense and to Congress the root cause of the SM-3 

Block IB developmental flight test failure, path forward for future 

development, and the plans to bridge production from the SM-3 Block IA 

to the SM-3 Block IB before committing to additional purchases of the 

SM-3 Block IB. DOD commented that MDA will report the root cause of 

the SM-3 Block IB test failure and the path forward for future development 

to the Office of the Secretary of Defense and to Congress upon 

completion of the failure review in the third quarter of fiscal year 2012. 

However, DOD makes no reference to delaying additional purchases until 

the recommended actions are completed, instead stating that MDA is 

balancing the need to demonstrate technical achievement and also 

ensure that the system is thoroughly tested before fielding with the need 

to keep the industrial base and supply chain healthy to ensure that 

production transitions as quickly as possible. We believe that an 

appropriate balance between schedule and risk is necessary for 

development programs. However, our analysis has shown that MDA 

undertakes acquisition strategies of accelerated development and 

production that have led to disruptions in the supply chain and have 

increased costs to develop some BMDS assets. We maintain our position 

that MDA should take the recommended actions before committing to 

additional purchases of the SM-3 Block IB.

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

the Director of MDA. In addition, the report is available at no charge on 

the GAO website at http://www.gao.gov.

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

me at (202) 512-4841 or chaplainc@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix XII. 

Cristina Chaplain

Director

Acquisition and Sourcing Management
 

Page 32 GAO-12-486 Missile Defense

List of Committees

The Honorable Carl Levin

Chairman

The Honorable John McCain

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Daniel K. Inouye

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Howard P. McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable C.W. Bill Young

Chairman 

The Honorable Norman D. Dicks

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Scope and Methodology

Page 33 GAO-12-486 Missile Defense

To assess the Missile Defense Agency’s (MDA) cost, schedule, testing 

and performance progress, we reviewed the accomplishments of eight 

Ballistic Missile Defense System (BMDS) elements that MDA is currently 

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

with Standard Missile-3 Block IA and Block IB; Aegis Ashore; Aegis BMD 

Standard Missile-3 Block IIA; Aegis BMD Standard Missile-3 Block IIB; 

Ground-based Midcourse Defense (GMD); Precision Tracking and Space 

System (PTSS); Targets and Countermeasures; and Terminal High 

Altitude Area Defense (THAAD).1 We developed data collection 

instruments (DCI) that were completed by the elements’ program offices 

and reviewed the individual element responses. These instruments 

collected detailed information on schedule, cost and budget, contracts, 

testing and performance, and noteworthy progress during the fiscal year. 

We also examined the cost and resource, schedule, and test baselines as 

presented in the BMDS Accountability Report (BAR),

2

To assess whether MDA elements delivered assets and achieved selfidentified capability goals as planned in fiscal year 2011, we examined 

the 2011 BAR, and compared it to the 2010 and 2009 versions, looking 

for similarities and differences between the three. We also reviewed MDA 

briefings to congressional staffers from March 2011 and responses to our 

DCIs, which detailed key accomplishments and asset deliveries for fiscal 

year 2011. To assess progress on MDA’s development of models and 

simulations, we held discussions with officials at the Missile Defense 

Baseline and 

Program Execution Reviews, test schedules and reports, and production 

plans. The results of these reviews are presented in detail in the element 

appendixes of this report and are also integrated as appropriate in our 

findings. We also interviewed officials within program offices and within 

MDA functional directorates, such as the Directorates for Engineering and 

Testing. We discussed the elements’ test programs and test results with 

the BMDS Operational Test Agency and the Department of Defense’s 

Office of the Director, Operational Test and Evaluation.

 

1 The BMDS also includes other elements and supporting efforts such as the Command, 

Control, Battle Management, and Communications and BMDS Sensors which are not 

covered in this report. For this report, we selected and focused our efforts on eight of the 

BMDS elements based on Congressional interest, known acquisition challenges and 

successes, and the current status of these efforts. 

2 MDA issued an updated test baseline in March 2012, but we did not include it as part of 

this review because we received it at the end of our audit and did not have time to assess 

it. Our next assessment will include this updated test baseline.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 34 GAO-12-486 Missile Defense

Integration and Operations Center, and the Operational Test Agency, and 

reviewed budget documents and MDA’s directive on modeling and 

simulation verification, validation, and accreditation.

Our work was performed at MDA headquarters in Fort Belvoir, Virginia, 

and in Dahlgren, Virginia; Alexandria, Virginia; Falls Church, Virginia; 

Annapolis, Maryland; Colorado Springs, Colorado; Arlington, Virginia; and 

at various program offices and contractor facilities located in Huntsville, 

Alabama, and Tucson, Arizona. In Fort Belvoir, we met with officials from 

the GMD program office and the Advanced Technology Directorate who 

manage the Aegis BMD Standard-Missile 3 Block IIB program. In 

Dahlgren, we met with officials from the Aegis BMD program office, the 

Aegis Ashore program office, and the Aegis Standard-Missile 3 Block IIA 

program office. In Alexandria, we met with the Director, Operational Test 

and Evaluation, and officials from the Institute for Defense Analysis. In 

Falls Church, we met with officials from the PTSS program office. In 

Arlington, we met with the Director, Developmental Test and Evaluation, 

the Missile Defense Executive Board, officials in the Pentagon Office of 

Strategic Warfare, and the Cost Analysis and Program Evaluation group. 

In Annapolis, we met with officials from the Defense Spectrum 

Organization/Joint Spectrum Center.

In Huntsville, we interviewed officials from the Airborne Infrared program 

office; the Terminal High Altitude Area Defense project office; the Targets 

and Countermeasures program office; and MDA’s Acquisitions 

Directorate, Programs and Integration Directorate, Engineering 

Directorate, Test Directorate, Cost Directorate, and Advanced 

Technologies Directorate. We also met with Boeing officials in Huntsville 

to discuss the failure review investigation for the FTG-06a failure, and 

their plan to resolve the resulting manufacturing stop. In addition, we met 

with officials from the Operation Test Agency in Huntsville to discuss 

MDA’s performance assessment, as well as models and simulations.

In Colorado Springs, we met with officials from U.S. Northern Command, 

the Joint Functional Component Command for Integrated Missile 

Defense, and the Missile Defense Integration and Operations Center. We 

met with Raytheon and Defense Contract Management Agency officials in 

Tucson to discuss the manufacturing of the exoatmospheric kill vehicle

and schedule issues for GMD, respectively.

We conducted this performance audit from April 2011 to April 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 
Appendix I: Scope and Methodology

Page 35 GAO-12-486 Missile Defense

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Comments from the Department 

of Defense

Page 36 GAO-12-486 Missile Defense

Appendix II: Comments from the Department 

of Defense
Appendix II: Comments from the Department 

of Defense

Page 37 GAO-12-486 Missile Defense
Appendix II: Comments from the Department 

of Defense

Page 38 GAO-12-486 Missile Defense
Appendix II: Comments from the Department 

of Defense

Page 39 GAO-12-486 Missile Defense
Appendix III: BMDS Models and Simulations 

Progress

Page 40 GAO-12-486 Missile Defense

Fiscal year 2011 events

• The Missile Defense Agency (MDA) carried out a highly 

complex integrated digital simulated assessment 

involving six Ballistic Missile Defense System (BMDS) 

elements. 

• MDA awarded a major contract to build a unified models 

and simulations architecture for the BMDS.

Overview

 MDA has made progress in creating a strategic framework for 

developing its models and simulations.

 Model and simulation development is challenging, and much 

remains to be done.

 Test delays and an anomaly have limited progress in gathering 

needed data.

 Limited progress made in accrediting element models.

Models and simulations are critical to understanding how capable the 

Ballistic Missile Defense System (BMDS) is and how well it can function. 

The complex nature of the BMDS, with its wide range of connected 

elements, requires integrated system-level models and simulations to 

assess its performance. Assessing BMDS performance through flight 

tests alone cannot be done, for it is prohibitively expensive and faces 

safety and test range limitations that can best be dealt with through 

sound, realistic models and simulations.

Ensuring models and simulations that are sound and realistic requires a 

rigorous process to accomplish two main tasks—(1) developing individual 

element models and realistically linking those models and simulations and 

(2) gathering data from the Missile Defense Agency’s (MDA) ground and 

flight tests to feed into the models. The BMDS Operational Test Agency 

(OTA), an independent multi-service organization, then assesses how 

realistic the BMDS models are in order to accredit the models for use in 

simulating various levels of system performance.1

 

1 As per MDA’s Integrated Master Test Plan, or IMTP, OTA’s accreditation 

recommendation, when signed by the Accreditation Authority (the Commanding General 

of the Army Test and Evaluation Center, the lead service test agency for the BMDS), is 

the official certification that models and simulations’ products are acceptable for their 

intended use. While OTA is responsible for carrying out accreditation for this certification 

process, MDA also carries out internal model accreditation assessments.

When a model is 

accredited it means that it can be reliably trusted to produce highconfidence results for its intended use and the limitations of the model are 

known. Since developing reliable MDA models depends upon the 

Appendix III: BMDS Models and Simulations 

Progress

Background and Overview
Appendix III: BMDS Models and Simulations 

Progress

Page 41 GAO-12-486 Missile Defense

collection of test data upon which to anchor them, MDA’s test program2

plays a crucial role in model development and BMDS performance 

assessments. 

MDA’s models and simulations development effort is making progress in 

developing top-level planning documents, but two are not yet final. Two 

MDA planning documents, the Integrated Master Assessment Plan and 

the Integrated Models and Simulations Master Plan, are being developed 

to better focus and link the testing and assessment efforts. According to 

OTA officials, the Integrated Master Assessment Plan is based on sound 

methodology, which should improve MDA’s models and simulations 

program, in part by elevating BMDS evaluation and assessment 

requirements as the key driver of test design. OTA officials noted that the 

Integrated Models and Simulations Master Plan should also lead to a 

greater emphasis on model development needs in driving the design of 

MDA’s test events.

The task of developing and linking the element-level models and 

simulations together into an integrated BMDS model is extremely 

complex and difficult and will take years to accomplish. Last year, we 

reported that the overall performance of the BMDS could not be assessed 

because MDA models and simulations had not matured sufficiently and 

may not be fully mature until 2017. Since that time, there has been limited 

progress in resolving model issues that would provide more realistic 

representations of BMDS performance.

In August 2009, U.S. Strategic Command and OTA jointly informed MDA 

of 39 system-level limitations in MDA’s models and simulations program 

that adversely affect their ability to assess BMDS performance. Resolving 

these limitations, OTA maintains, would permit MDA’s models and 

simulations to provide more realistic representations of BMDS 

performance using the full complement of fielded BMDS assets. MDA 

officials have noted that since August 2009, MDA has fully resolved or is 

in the process of resolving 7 of these issues and has identified technical 

solutions for 15 more. According to OTA officials, most of the limitations 

resolved are issues that are more easily addressed, such as installing 

 

2 As laid out in MDA’s IMTP.

MDA Has Made Progress 

in Developing a Strategic 

Framework for Improving 

the Models and 

Simulations Program

Model and Simulation 

Development Is 

Challenging, and Much 

Remains to Be Done
Appendix III: BMDS Models and Simulations 

Progress

Page 42 GAO-12-486 Missile Defense

improved communications systems and providing separate workstations 

for simulation controllers. No technical solutions have yet been identified 

for the remaining 17 issues, and OTA officials maintain that they are still 

awaiting an MDA timeline for the complete resolution of these remaining 

limitations. Among the remainder are some critical model deficiency 

issues, which result in modeled performance that does not reflect realistic 

operation and conditions. For instance, models for certain radars have 

artificial limitations constraining data processing, so that a simulation 

involving high debris levels would effectively shut down the model. 

Another model limitation is the need for accurate interceptor modeling for 

all BMDS weapon systems in system-level assessments, the absence of 

which prevents a determination of engagement success in such 

simulations.3

MDA has made some progress in developing a single, integrated model 

and simulation approach for the BMDS. Originally, MDA’s models were 

developed for use by each element and not for integrated assessments. 

Since fiscal year 2010, MDA has made progress in creating a common 

framework, whereby the various BMDS element-level hardware-in-theloop (HWIL)4

MDA officials have also claimed some success in creating and integrating 

a purely digital model and simulation framework for the BMDS. In fiscal 

year 2011, MDA officials stated that they have achieved some measure of 

success in using the digital model in a key assessment of six key BMDS 

elements. According to MDA officials, in this assessment, the simulation 

tool was more successful than the previous major digital simulation event, 

models are subjected to a common and consistent scene 

and environment during test events. MDA is now using this framework, 

known as the Single Stimulation Framework, in assessing BMDS 

performance, and MDA officials maintain that progress achieved in 

developing it has facilitated MDA’s efforts to resolve some of the 39 

limitations. MDA officials further highlight that the framework is being 

used to evaluate BMDS performance in increasingly complex and realistic 

scenarios, employing greater numbers of BMDS assets.

 

3 MDA does, however, employ modeling tools external to the system-level simulations, in 

order to model interceptor performance and thereby assess end-game performance and 

probability of success.

4 With HWIL models, closed loop simulations are conducted with actual mission 

components/hardware in a laboratory environment, and the physical 

environment/conditions are simulated, under the control of computer equipment.
Appendix III: BMDS Models and Simulations 

Progress

Page 43 GAO-12-486 Missile Defense

which was carried out in 2009. MDA officials have noted a downward 

trend in simulation trouble or incident reports for both the Single 

Stimulation Framework and the digital model. 

MDA plans to integrate these two efforts into a single Objective 

Simulation Framework (OSF). OSF is planned as an end-to-end 

representation of the BMDS in support of testing, training, exercises, and 

system development. OSF is scheduled to go online in the second 

quarter of fiscal year 2014, with the current digital simulation architecture 

phased out by fiscal year 2016. According to OTA officials, the common 

BMDS-level test framework that OSF is intended to provide has multiple 

advantages, such as the provision of a single tool with which to conduct 

data verification cross-checks. Additionally, this tool could serve to fill 

gaps that currently exist in the hardware-based models.

MDA’s difficulty in executing the test plan has limited the progress of 

modeling and simulations. The agency has refocused the design of its 

test program on collection of test data to strengthen the development of 

the models. As we reported in 2010, MDA revised its testing approach in 

response to GAO and Department of Defense concerns and began to 

base test scenarios on identified modeling and simulation data needs. In 

order to collect data required to fill certain model data gaps, MDA had 

increased planned testing in certain areas, such as ground testing. 

However, according to OTA officials, MDA has had difficulty conducting 

its test plan, since actual test events are not always carried out in 

accordance with the schedule. We have also reported consistent 

problems in conducting tests over the past few years. Test schedule 

disruptions delay not only the MDA test schedule, but also the models 

and simulations’ efforts that depend on the test data.

Despite MDA’s increased efforts to collect test data for the BMDS model 

and simulation program, it will take considerable effort and time to fill all 

knowledge gaps. MDA has succeeded in collecting some 309 critical 

variables since 2009; but, by the end of fiscal year 2011, those 

represented only 15 percent of the required total identified by MDA. 

Under the current plan, MDA does not foresee complete collection of 

these data until sometime between 2017 and 2022.

Limited test data is a significant challenge MDA faces in developing 

accredited models. Flight test failures, an anomaly, and delays in fiscal 

year 2011 have reduced the amount of data MDA expected to have 

available to support the anchoring of its models and simulations. MDA 

Test Delays and an 

Anomaly Have Limited 

Progress in Gathering 

Needed Data
Appendix III: BMDS Models and Simulations 

Progress

Page 44 GAO-12-486 Missile Defense

officials also maintain that some required data are difficult to collect and 

are challenging to obtain even when a flight test is properly executed. 

When tests are carried out, considerable post-test data analysis is 

required for model development, MDA officials maintain. However, MDA 

officials indicated that MDA must often limit the scope of its analysis to 

discrete model development objectives. Because of the challenges in 

carrying out the full range of testing required to collect the anchoring data 

to develop models, MDA is concurrently exploring alternative methods for 

model development, such as greater use of subject matter experts. 

According to OTA officials, the subject matter experts focus MDA’s efforts 

toward scenario factors that are most important for actual and likely 

BMDS operation, thereby reducing the amount of testing data required.

MDA has also made some limited progress in achieving partial 

accreditation for some BMDS models. MDA models may be partially 

accredited for some, but not all, intended functions due to limitations in 

the models or gaps in the data. Over the past few years, BMDS OTA 

officials have assessed MDA’s models and simulations in an effort to fully 

understand the performance of the current BMDS configuration, and have 

noted that among the element-level BMDS models, those for Terminal 

High Altitude Area Defense (THAAD) and Aegis Ballistic Missile Defense 

(Aegis BMD) are farthest along developmentally. In an April 2011 

accreditation report, independent assessors from the Johns Hopkins 

University Applied Physics Laboratory found improvements in five of six 

functional areas for a key THAAD modeling tool, noting that available 

data permitted accreditation for three areas. The report also noted 

progress with two key Aegis BMD models, each of which was assessed 

for limited accreditation in two of four BMDS target negation areas. MDA 

officials have also noted significant progress in the development of a key 

model for the Command, Control, Battle Management, and 

Communications element of the BMDS. MDA has made some progress 

toward accreditation of BMDS element models for specific functional 

areas, but MDA officials acknowledged that the agency has not yet 

achieved OTA accreditation in other key areas, such as any of the 18 

environmental models.

While MDA has progressed in its use of simulated BMDS assessments, 

there are risks inherent in collecting information from unaccredited 

sources. Currently, both of the BMDS modeling and simulation 

frameworks rely on currently unaccredited models, despite the 

improvements that MDA has noted in the results of such assessments. 

OTA officials expressed lowered confidence in the data collected from 

Limited Progress Made in 

Accrediting Element 

Models
Appendix III: BMDS Models and Simulations 

Progress

Page 45 GAO-12-486 Missile Defense

such simulated assessments. The reliance on unaccredited models could 

result in poorly crafted tactics, techniques, and procedures and in the 

production and fielding of a system that is not able to actually counter 

real-world threats. As the BMDS matures and the number of fielded 

assets increases, modeling and simulation capabilities and laboratory 

representations of BMDS assets must keep pace to maintain operational 

realism.
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 46 GAO-12-486 Missile Defense

Fiscal year 2011 events

• In September 2011, the SM-3 Block IB failed during its first 

developmental flight test.

• The planned 2011 SM-3 Block IB production decision was 

delayed to fiscal year 2013.

• In April 2011, the SM-3 Block IA successfully intercepted an 

intermediate-range missile. During the test, the missile 

experienced an anomaly. The anomaly occurred in a 

component also used in the SM-3 IB.

• Deliveries of both the SM-3 Block IA and the SM-3 Block IB 

are on hold until separate failure review boards are 

completed.

• The program supported the deployment of the first ship for 

the European Phased Adaptive Approach Phase I.

Overview

 Aegis BMD achieved some significant accomplishments in 

fiscal year 2011. 

 SM-3 Block IB’s concurrent schedule overlaps development 

and production. 

 Failure in SM-3 Block IB’s first flight test led to cost growth and 

schedule delays. 

 The production transition to the SM-3 Block IB from the SM-3 

Block IA has been repeatedly disrupted. 

 SM-3 Block IA production and deliveries are on hold while the 

April 2011 flight test anomaly is being investigated. 

Aegis BMD with the SM-3 Blocks IA and IB is a ship-based missile 

defense system designed to intercept short- to intermediate-range 

ballistic missiles during the midcourse phase of their flight. Key 

components include the Aegis Weapons System, shipboard SPY-1 radar, 

battle management and command and control systems, and SM-3 

missiles. Missile Defense Agency (MDA) continues to develop Aegis BMD 

in spirals for the weapon system and successive capability-based variants 

of the SM-3 interceptor to improve defense against increased threat 

missile range, type, and raid size. The SM-3 missile has multiple versions 

in development or production: the SM-3 Blocks IA, IB, IIA, and IIB. The 

currently deployed system is Aegis BMD 3.6.1 with SM-3 Block IA, which 

is designed to hit short- to medium-range threat missiles. This system is 

included in Phase I of the European Phased Adaptive Approach (PAA). 

The next generation version is Aegis BMD 4.0.1 with SM-3 Block IB, 

which has greater capabilities. The SM-3 Block IB uses many of the same 

components as the SM-3 Block IA, but features an improved two-color 

target seeker capability for increased onboard discrimination, an 

advanced signal processor for engagement coordination, an improved 

throttleable divert and attitude control system (TDACS) for adjusting its 

course, and increased range and raid capabilities. The SM-3 Block IB 

with Aegis BMD 4.0.1 is planned to be deployed as part of European PAA 

Phase II in the 2015 time frame. The SM-3 Blocks IIA and IIB interceptors 

are discussed in appendixes V and VI. 

Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Background and Overview
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 47 GAO-12-486 Missile Defense

Aegis BMD made several significant accomplishments in fiscal year 2011. 

The Aegis BMD 4.0.1/SM-3 Block IB program successfully conducted 

simulated flight test FTM-16 E1 in March 2011, delivered the SM-3 Block 

IB pathfinder round to hold FTM-16 E2, and gained sufficient data in 

FTM-16 E2 in September 2011 to support certification of the Aegis BMD 

4.0.1 weapon system, planned in the second quarter of fiscal year 2012.

As for the Block IA interceptor, DOD fielded the Aegis BMD 3.6.1/SM-3 

Block IA-equipped ship, U.S.S. Monterey, for Phase I of the European 

PAA in April 2011, meeting the 2011 time frame for deployment. During 

the fiscal year, MDA also installed one Aegis BMD 3.6.1 weapon system 

on a ship. In addition, the Aegis BMD program conducted a successful

flight test of the Aegis BMD SM-3 Block IA, referred to as FTM-15, 

despite experiencing an anomaly during the test. The Aegis BMD SM-3 

Block IA was also used in a Japanese flight test—JFTM-4—in which two 

U.S. Aegis BMD ships cooperated to detect, track, and conduct a 

simulated intercept engagement against the same target.

Overall, the Aegis BMD 3.6.1/SM-3 Block IA program has had eight out of 

nine successful flight tests. In addition, Japanese Aegis BMD has 

conducted three out of four successful intercepts using SM-3 Block IA 

interceptors.1 The Aegis BMD 3.6.1 weapon system was the first MDA 

element to be assessed as operationally effective and suitable for combat 

by independent test officials, with limitations.

Problems with concurrency are affecting the production of SM-3 Block IB 

interceptors and delaying the phaseout of the SM-3 Block IA production. 

The acquisition plan for the SM-3 Block IB interceptor includes high levels 

of concurrency—buying weapon systems before they demonstrate, 

through testing, that they perform as required—between development 

and production. Specifically, the program purchased interceptors before 

confirming that the design works as intended by completing 

developmental tests and prior to ensuring that a key subcomponent has 

overcome prior developmental problems. The need to field the Aegis 

BMD 4.0.1/SM-3 Block IB by the 2015 time frame for European PAA 

Phase II announced by the President is a key driver for the high levels of 

 

1 Japanese flight tests help MDA officials understand performance, but because they are 

not U.S. assets, they are not considered developmental flight tests from a programmatic 

perspective.

Aegis BMD Achieved Some 

Significant 

Accomplishments in Fiscal 

Year 2011

SM-3 Block IB’s 

Concurrent Schedule 

Overlaps Development and 

Production 
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 48 GAO-12-486 Missile Defense

concurrency. According to MDA, the program is purchasing interceptors 

for a variety of reasons, including in support of developmental and 

operational testing, proving the manufacturing process, and ensuring the 

missile will meet its performance requirements on a repeatable basis. See 

figure 8 for a depiction of the SM-3 Block IB’s concurrent schedule.

Figure 8: SM-3 Block IB Schedule

The SM-3 Block IB’s acquisition plan includes high levels of concurrency. 

We reported in February 2010 that planned interceptor production would 

precede knowledge of interceptor performance, and recommended that 

MDA delay a decision to produce interceptors to follow successful 

completion of developmental testing, a flight test, and manufacturing 

readiness review.2 In March 2010, we reported that the Aegis BMD 

program is putting the SM-3 Block IB at risk for cost growth and schedule 

delays by planning to begin manufacturing in 2010 before its critical 

technologies have been demonstrated in a realistic environment.3 We 

also reported in December 2010 that the SM-3 Block IB test schedule 

was not synchronized with planned production and financial 

commitments.4

 

2

Finally, in March 2011, we reported that the schedule had 

become even more compressed due to the redesign and requalification of 

GAO-10-311. 

3 GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-10-388SP (Washington, D.C.: Mar. 30, 2010).

4 GAO, Missile Defense: European Phased Adaptive Approach Acquisitions Face 

Synchronization, Transparency, and Accountability Challenges, GAO-11-179R

(Washington, D.C.: Dec. 21, 2010).
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 49 GAO-12-486 Missile Defense

a missile component, and in response, MDA deferred key program 

milestones so that it would have better informed production decisions.5

The program began production of SM-3 IB interceptors before resolving 

development issues with the TDACS, a key interceptor component that 

maneuvers the kill vehicle during the later stages of flight. The TDACS 

failed qualification testing in early 2010 and required a redesigned 

propellant moisture protection system. In order to hold the first SM-3 

Block IB developmental flight test, FTM-16 Event 2, in September 2011 

as scheduled, MDA only partially completed TDACS qualification testing 

and the version used in the failed flight test was not identical with the 

approved production design. The TDACS is expected to complete 

qualification testing in 2012; however, any additional issues discovered 

during qualification testing or developmental flight testing may require 

additional redesigns.

The commitment to produce SM-3 Block IB interceptors beyond those 

needed for developmental testing was made before the program had a 

sufficient level of knowledge about the missile’s technology maturity and 

performance. MDA has determined that 18 of the 25 SM-3 Block IB 

missiles ordered are to be used for developmental testing. The remaining 

7 interceptors are currently unassigned for tests and may be available for 

operational use.6

According to MDA, these interceptors will be used to support 

developmental and operational testing; to prove out the manufacturing 

processes; to provide information about reliability, maintainability, and 

supportability; to verify and refine cost estimates; and to ensure that the 

missile meets performance requirements. MDA officials acknowledged 

that missiles not consumed by testing could be used operationally. 

Program management officials stated that the unassigned missiles 

represent a very small portion of the total number of interceptors they 

 

5 GAO-11-372. 

6 Six of the 18 missiles will not be needed for developmental tests until fiscal year 2015 or 

later. SM-3 Block IB missiles are used for developmental tests of the SM-3 Block IB and 

Aegis Weapons System 4.0.1 program and are planned for use in developmental tests for 

Aegis Ashore and Aegis Weapons System 5.0. MDA originally planned to purchase 34 

SM-3 Block IB interceptors; however, to address developmental issues with the TDACS in 

the SM-3 Block IB, in 2011, MDA reduced the planned quantity on order to 25 SM-3 Block 

IB interceptors. One interceptor was used in FTM-16 E2, leaving 24 interceptors.
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 50 GAO-12-486 Missile Defense

plan to purchase, representing less than 5 percent of the total 472

interceptors that the program plans to purchase through fiscal year 2020. 

MDA decided that the risk was low given that many of the SM-3 Block IB 

critical technologies were based on critical technologies that were tested 

and used successfully by the SM-3 Block IA.

MDA is also planning to purchase 46 additional SM-3 Block IB missiles in 

fiscal year 2012. However, there are two failure investigations ongoing 

that affect SM-3 Block IB production that could delay three planned 

developmental flight tests that need to occur to validate SM-3 Block IB 

capability. It therefore remains unclear whether the additional 46 missiles 

will be ordered before the failure reviews are complete and the interceptor 

is able to demonstrate that it works as intended through these flight tests.

The program’s highly concurrent schedule is shaped primarily by the 

need to achieve initial capability for the fielding of Phase II of the 

European PAA by the 2015 time frame announced by the President. In 

addition, the program must be ready to participate in the second BMDS 

operational test in 2015. Program officials report that they are on track to 

achieve these time frames. However, until development is complete, any 

additional issues could lead to additional cost growth or schedule delays.

The SM-3 Block IB failed its first developmental flight test, FTM-16 E2, 

leading to cost growth and schedule delays compounded by the 

disruption to ongoing production, the full extent of which has yet to be 

determined. During the flight test, the SM-3 Block IB experienced an 

unexpected energetic event in the third-stage rocket motor and failed to 

intercept a short-range ballistic missile target. Following the flight test, the 

program convened a failure review board to determine the root cause of 

the failure, modified the missile production contract, restructured the flight 

test program, and delayed key production decisions. While the failure 

review board is still investigating the flight test, MDA slowed production of 

SM-3 Block IB interceptors. The program had planned to deliver an 

additional three SM-3 Block IB missiles for flight testing in fiscal year 

2011. However, the delivery of the remaining three has been delayed until 

spring 2012.

Program officials estimate that the flight test failure—including the failure 

investigation, design modifications, testing, and requalification for return 

to flight—may cost approximately $187 million in fiscal year 2012. In 

addition, because officials are still investigating the cause of the flight test 

failure and how many already-produced missiles may have to be 

Failure in SM-3 Block IB’s 

First Flight Test Led to 

Cost Growth and Schedule 

Delays
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 51 GAO-12-486 Missile Defense

retrofitted, they do not yet know how much the retrofits, if required, will 

cost. At this point, the program does not have an approved plan to avoid 

an SM-3 production gap.

The flight test failure also had several other consequences. The SM-3 

Block IB manufacturing readiness review has been delayed from the 

second quarter of fiscal year 2011 to the third quarter of fiscal year 2012, 

and the procurement production decision for additional SM-3 Block IB 

missiles was moved from fourth quarter of fiscal year 2011 to the fourth 

quarter of fiscal year 2013. The failed flight test will be re-conducted in 

mid-2012, which may delay additional developmental flight testing.

Aegis BMD’s transition to the SM-3 Block IB has been repeatedly 

disrupted because the transition was risky given the technology maturity

of components developed for the SM-3 Block IB and the program’s 

concurrent schedule. Originally, MDA planned that production of SM-3 

Block IA interceptors would end in fiscal year 2009 as production of SM-3 

Block IB interceptors began. However, due to developmental issues with 

the SM-3 Block IB, MDA twice had to extend SM-3 Block IA production—

in 2010 and 2011—to cover emerging production gaps with the SM-3 

Block IB. To date, MDA has contracted for 41 more SM-3 Block IA 

missiles than originally planned in order to bridge the production gaps. 

Now, following the September 2011 flight test failure, MDA is facing 

another production gap. It is extending production once again—it 

purchased 23 SM-3 Block IA missiles in fiscal year 2011 and is 

considering whether to purchase additional SM-3 Block IA missiles in 

fiscal year 2012.

In addition, the program has twice had to adjust the procurement of SM-3 

Block IB missiles. Instead of purchasing 24 SM-3 Block IB missiles as 

planned in 2010, it purchased 18 SM-3 Block IA missiles and it did not 

procure 8 SM-3 Block IB missiles in 2011 as planned. To free up funding 

needed to improve TDACS operational suitability, MDA reduced the 

planned SM-3 Block IB missiles from 34 to 25 in fiscal year 2011. Thus 

far, the program has purchased 41 fewer missiles than previously

planned. Due to the FTM-16 E2 developmental flight test failure, delivery 

of these SM-3 Block IB missiles is now being slowed until the failure 

review board completes its investigation and any possible retrofits are 

made. Despite the test failure and delivery hold, MDA is considering 

purchasing 46 SM-3 Block IB interceptors in fiscal year 2012 and 29 SM3 Block IB interceptors in fiscal year 2013. Recognizing the critical 

importance of the completing the planned fiscal year 2012 intercept tests, 

The Transition to the SM-3 

Block IB from the SM-3 

Block IA Has Been 

Repeatedly Disrupted
Appendix IV: Aegis Ballistic Missile Defense 

(Aegis BMD) with Standard Missile-3 (SM-3) 

Block IA and Block IB

Page 52 GAO-12-486 Missile Defense

the operational need for SM-3 missiles, the relative success of the SM-3 

Block IA, as well as the potential for a production break, the Senate 

Committee on Appropriations directed MDA to use the fiscal year 2012 

SM-3 Block IB funds for additional Block IA missiles should the test and 

acquisition schedule require any adjustments during fiscal year 2012.

As a result of an anomaly in the latest SM-3 Block IA flight test—FTM-15 

in April 2011—MDA halted acceptance of SM-3 Block IA deliveries. 

During the April 2011 flight test, MDA demonstrated the Aegis BMD 3.6.1 

weapon system’s ability to launch the SM-3 Block IA interceptor using 

data from a remote sensor against a separating intermediate-range 

ballistic missile target and the capability of the interceptor to engage 

threat missiles in the range expected for Phase I of the European PAA. 

However, although the SM-3 Block IA interceptor intercepted the target, it 

experienced an anomaly. The anomaly occurred in a component also 

used in the SM-3 Block IB.

At the time of our review, the program had not completed its investigation 

into the cause of the anomaly or decided how it will address the issue. 

The program convened a failure review board, which has not yet 

completed its investigation of the root cause of the anomaly. Twelve 

assembled SM-3 Block IA missiles are not being accepted for delivery 

and are being held at the production factory until the investigation of the 

anomaly is complete and any possible refurbishments are made. This 

represents about 10 percent of the population of SM-3 Block IA missiles. 

Program management officials report that thus far seven missiles will 

need to be refurbished. Because the failure review board has not yet 

completed its investigation, an unknown quantity of additional SM-3 Block 

IA missiles may need to be refurbished due to the anomaly. At the time of 

our review, the program did not have an approved plan for how it will 

refurbish the affected missiles. Despite these issues, MDA purchased 23 

SM-3 Block IA missiles in September 2011 and is considering whether to 

purchase additional missiles in 2012 to avoid production gaps and to 

keep SM-3 suppliers active.

SM-3 Block IA Deliveries 

Are on Hold While the 

April 2011 Flight Test 

Anomaly Is Being 

Investigated
Appendix V: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIA

Page 53 GAO-12-486 Missile Defense

Fiscal year 2011 events

• The program discovered problems with four key components 

during subsystem preliminary design reviews (PDR) and 

held reviews to resolve the issues with two components in 

fiscal year 2011. 

• The program was restructured in response to subsystem 

PDR problems, adjusting planned flight tests.

• Preliminary testing of some U.S. and Japanese components 

began.

Overview

 The SM-3 Block IIA program began in 2006 as a cooperative 

development with Japan. It is required to be fielded by 2018 as 

part of the European Phased Adaptive Approach Phase III.

 Design review problems in fiscal year 2011 led to a program 

restructure and likely increased current costs. 

 Program actions in fiscal year 2011 reduced acquisition risk 

and potential future cost growth. 

 Despite positive changes in program schedule, technology 

development concerns remain.

The SM-3 Block IIA is the third SM-3 version to be developed for use with 

the sea-based and future land-based Aegis BMD. This interceptor is 

planned to have increased velocity and range compared to earlier SM-3s 

due to a larger 21-inch diameter, more sensitive seeker technology, and 

an advanced kinetic warhead.1

Initiated in 2006 as a cooperative development program with Japan, the 

SM-3 Block IIA program was added to the European Phased Adaptive 

Approach (PAA) in 2009. As part of European PAA Phase III, the SM-3 

Block IIA is planned to be fielded with Aegis Weapons System 5.1 by the 

2018 time frame and is expected to provide engage on remote capability, 

in which data from off-board sensors is used to engage a target, and 

expand the range available to intercept a ballistic missile. The program is 

managing both the development of the SM-3 Block IIA and its integration 

with Aegis Weapons System 5.1, which also is still under development. In 

this appendix, we evaluate only the SM-3 Block IIA.

Most of the SM-3 Block IIA components 

will differ from the versions used in the SM-3 Block IB, so technology has 

to be developed for the majority of the SM-3 IIA components. The SM-3 

Block IIA is expected to defend against short-, medium-, and 

intermediate-range ballistic missiles.

 

1 A kinetic warhead is a “hit-to-kill” warhead that collides with a ballistic missile’s warhead 

to destroy it.

Appendix V: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIA 

Background and Overview
Appendix V: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIA

Page 54 GAO-12-486 Missile Defense

The program planned to hold its system preliminary design review 

(PDR)—at which it would demonstrate that the technologies and 

resources available for the SM-3 Block IIA would result in a product that 

matched its requirements—but problems with the reviews of key 

components meant the system review had to be adjusted by 1 year. To 

prepare for the system review, the program held 60 subsystem reviews, 

for its components to ensure that they were feasible given the technology 

and resources available. Two components—divert and attitude control 

system (DACS) and DACS propellant—failed their subsystem reviews 

and two components—nosecone and third stage rocket motor (TSRM)—

had their reviews suspended, indicating that the technological capability 

of these critical components and SM-3 Block IIA requirements were 

mismatched. The program took steps to resolve each of the four 

subsystem review problems, including restructuring the program to 

reduce future acquisition risk.

The DACS, used to adjust the course of the kinetic warhead, failed its 

subsystem review because it was not meeting weight and divert 

acceleration requirements, which the program resolved by reviewing and 

rebalancing subsystem requirements. The system-level DACS 

requirements did not change. The DACS propellant that failed the 

subsystem review was susceptible to a moisture problem, and the 

program selected a different propellant.2 The nosecone, which encloses 

the kinetic warhead, was overweight and could become more so, and the 

mitigation plan for the weight issue was insufficient. To resolve these 

issues, the program evaluated weight reduction opportunities and risks. 

The TSRM, used to lift the missile out of the atmosphere and direct the 

kinetic warhead to the target, was also not meeting weight requirements, 

and one of its components, the attitude control system, was not meeting 

thrust accuracy and alignment requirements. To resolve this issue, the 

program rebalanced subsystem requirements, but did not change systemlevel TSRM requirements.3

 

2 The SM-3 Block IB propellant was affected by the moisture issue, which was caused by 

a component shared with the initial SM-3 Block IIA propellant.

3 The reviews to close out the nosecone and TSRM subsystem PDRs failures occurred in 

fiscal year 2011. The closeout review for the DACS and DACS propellant occurred early in 

fiscal year 2012.

Design Review Problems 

in Fiscal Year 2011 Led to a 

Program Restructuring and 

Likely Increased Current 

Costs 
Appendix V: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIA

Page 55 GAO-12-486 Missile Defense

The subsystem review issues also required program schedule changes, 

which included the following: 

• Adjusting the system PDR from January 2011 to March 2012.

• Splitting in two the critical design review (CDR), at which the program 

will determine that the product’s design matches the SM-3 Block IIA 

requirements and cost, schedule, and reliability goals. This led to 

schedule adjustments of 13 and 19 months, respectively, for each of 

the CDRs. 

• Adjusting the interceptor flight test schedule. The program previously 

planned to hold its first intercept tests in fiscal years 2014 and 2015 

as part of the co-development with Japan, but with the schedule 

adjustment, it will now have these tests in calendar year 2016.The 

United States and Japan finalized the development program 

restructuring on September 30, 2011. Despite this adjustment, the 

interceptor remains aligned with European PAA Phase III in the 2018 

time frame.

Aegis BMD program management officials stated that the subsystem 

PDR problems and subsequent program restructure may increase current 

program costs, but they are not certain how much because the 

completion contract, which will run through fiscal year 2017, was still 

being negotiated as of December 2011.

The SM-3 Block IIA program took actions in 2011 that could reduce 

acquisition risk and mitigate future cost growth. Its previous schedule was 

compressed, which raised acquisition risk. For example, there was limited 

recovery time to investigate and resolve potential problems between 

program reviews as well as flight tests. The new schedule, made final in 

September 2011, relieves some compression concerns and adjusts to the 

subsystem review issues by adding time between the subsystem reviews 

and the system review to ensure that the technology issues are resolved. 

We have previously reported that reconciling gaps between requirements 

and resources before product development begins makes it more likely 

that a program will meet cost, scheduling, and performance targets, and 

programs that commit to product development with less technical 

knowledge and without ensuring that requirements are defined, feasible, 

and achievable within cost, schedule, and other system constraints face 

Program Actions in Fiscal 

Year 2011 Reduced 

Acquisition Risk and 

Potential Future Cost 

Growth 
Appendix V: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIA

Page 56 GAO-12-486 Missile Defense

increased technical risks and possibility of cost growth.4

In addition to the schedule change, in fiscal year 2011 the program 

identified some steps to avoid the difficulties that affected SM-3 Block IB 

component production. For example, it found that using proven materials, 

standardizing inspections with vendors, and ensuring that designs 

included reasonable tolerances were practices to follow based on lessons 

learned from the SM-3 Block IB experience.

The new SM-3 

Block IIA schedule allows the program to have more knowledge before 

committing to product development in the second quarter of fiscal year 

2014, a strategy that may reduce future cost growth and development 

risks. The new schedule also adds flexibility in the test schedule by 

adding an option for a third controlled test vehicle flight if needed. If the 

first two test vehicles prove to be successful and a third is not needed, 

this test can be converted into the first intercept test of the SM-3 Block 

IIA.

Finally, the SM-3 Block IIA program identified alternatives to one 

advanced seeker component that it had identified, based on the 

experience of the SM-3 Block IB, as potentially increasing production unit 

costs by 5 percent. Program management officials stated that they 

identified a viable alternative for this component and worked with the SM3 Block IIB program to further develop manufacturing improvements for 

this technology.

The program still faces significant technology development challenges. 

While the SM-3 Block IIA is a variant of the SM-3 missile, the majority of 

its components will change from their SM-3 Block IB configuration. The 

program must develop these components, some of which have 

consistently been technologically challenging for SM-3 development. In 

addition, two technology maturity challenges have emerged. Two critical 

technologies, the second and third stage rocket motors, experienced 

problems during testing that may require redesign and a potential CDR 

rescheduling. The program was investigating the problems and potential 

effects at the end of fiscal year 2011. In addition, following the subsystem 

 

4 GAO, Best Practices: Using a Knowledge-Based Approach to Improve Weapon 

Acquisition, GAO-04-386SP (Washington, D.C.: January 2004), and Defense Acquisitions: 

Assessments of Selected Weapons Programs, GAO-11-233SP (Washington, D.C.: 

Mar. 29, 2011). 

Despite Positive Changes 

in Overall Program 

Schedule, Technology 

Development Concerns 

Remain
Appendix V: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIA

Page 57 GAO-12-486 Missile Defense

review failure and selection of an alternate propellant, analysis of the 

DACS propellant performance showed that there may be a shortfall in 

divert performance for some missions. As of the end of fiscal year 2011, 

the program was still determining the extent of this issue.
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 58 GAO-12-486 Missile Defense

Fiscal year 2011 events

• The program entered the technology development 

phase and awarded initial contracts for concept 

definition and technology risk reduction. 

• Inclusion of additional technology development efforts 

to support European Phased Adaptive Approach (PAA) 

Phase IV led to realignment of the resource plan. 

• The program continued development of technologies 

that may contribute to SM-3 interceptor variants. 

• The program prepared for transfer of SM-3 Block IIB 

development to Aegis BMD program office in 2013. 

Overview

 SM-3 Block IIB program began in June 2010 and is planned to be 

fielded by the 2020 time frame as part of European PAA Phase IV.

 The program awarded three concept definition and program 

planning contracts to develop schedule and design options.

 The current program plan includes high levels of concurrency and 

acquisition risk.

 Full program acquisition costs have not been developed given the 

early stage of the program. 

 The benefits of early intercept capability are unclear and the lack of 

analysis of alternatives may result in warfighter needs not being met 

within resource constraints. 

The SM-3 Block IIB is a planned interceptor for the Aegis BMD program 

that is intended to contribute to U.S. homeland defense by providing early 

intercept capabilities against some intercontinental ballistic missiles and 

regional defense against medium- and intermediate-range ballistic 

missiles. This interceptor has been described by the Missile Defense 

Agency (MDA) as critical to the Ballistic Missile Defense System (BMDS) 

and developing solutions to future BMDS capability shortfalls. The SM-3 

Block IIB program began in June 2010 and entered the technology 

development phase in July 2011. Given its early stage of development, 

the SM-3 Block IIB does not have cost, schedule or performance 

baselines and is not managed within the Aegis BMD program office. 

Instead, this program has a tentative schedule and is being managed 

within MDA’s Advanced Technology office until a planned 2013 transition 

to the Aegis BMD program office. The SM-3 Block IIB is planned to be 

fielded by the 2020 time frame as part of the European Phased Adaptive 

Approach Phase IV.

The program received a significant funding reduction in the fiscal year 

2012 budget and, as of January 2012, was determining how to adjust its 

tentative schedule and future program plans. The program’s fiscal year 

2012 budget request was reduced by $110 million to $13 million.

Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB 

Background and Overview
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 59 GAO-12-486 Missile Defense

The SM-3 Block IIB program is following a two-pronged development 

strategy. First, program officials have awarded competitive contracts to 

generate options for missile configurations and development plans. 

Second, in a separate effort, they are using multiple contractors to reduce 

risks by developing technologies that may be used in the SM-3 Block IIB 

and other SM-3 variants. The program awarded three concept definition 

and program planning contracts to define and assess viable missile 

configurations, conduct trade studies, and define a development plan. 

The contractors will develop alternative missile concepts, technologies 

and schedule for interceptor development beyond 2013. According to the 

program, the purpose of this competition is to minimize cost, schedule, 

and technical risks. There will be another competition to select one 

contractor for the product development phase in 2013. We have reported 

previously that competition among contractors can result in increased 

technological innovation that leads to better and more reliable products.1

The program is using technology risk reduction contracts to develop 

technologies that may cut across versions of the SM-3, such as the focal 

plane array,

2 and to invest in materials or technology that will increase 

missile velocity and containment of threat missiles. For example, this 

effort produced a major technical first when a contractor working on focal 

plane array issues changed the process for creating a component of the 

focal plane array in a way that may reduce the number of defects in the 

production of that component.

Program management officials have issued a tentative schedule beyond 

the technology development phase, but this plan, if implemented, 

includes high levels of concurrency and acquisition risk. We have 

previously reported the following: 

• Concurrency leads to major problems being discovered in production, 

when it is either too late or very costly to correct them.3

 

1 GAO, Joint Strike Fighter: Assessment of DOD’s Funding Projection for the F136 

Alternate Engine, GAO-10-1020R (Washington, D.C.: Sept. 15, 2010).

2 The focal plane array is a component of the seeker. 

3 GAO, High-Risk Series: Defense Weapons Systems Acquisition, GAO/HR-93-7

(Washington, D.C.: December 1992). 

Program Awarded Initial 

Contracts to Develop 

Schedule, Design Options, 

and Crosscutting 

Technology 

Current Program Plan 

Includes High Levels of 

Concurrency and 

Acquisition Risk
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 60 GAO-12-486 Missile Defense

• Before starting product development, programs should hold key 

engineering reviews, culminating in the preliminary design review 

(PDR), to ensure that the proposed design can meet defined, feasible 

requirements within cost, schedule, and other system constraints.4

• Committing to production and fielding before development is complete 

is a high-risk strategy that often results in unexpected cost increases, 

schedule delays, test problems, and performance shortfalls.5

Successful defense programs ensure that their acquisitions begin with 

realistic plans and baselines before the start of their development.6

According to the tentative SM-3 Block IIB schedule, the product 

development decision will occur before the March 2015 PDR. As a result, 

MDA is planning to commit to developing a product with less technical 

knowledge than our prior work has shown is needed and without fully 

ensuring that requirements are defined, feasible, and achievable within 

cost, schedule, and other system constraints. This sequencing increases 

both technical risks and the possibility of cost growth.7

 

4 GAO, Defense Acquisitions: Assessments of Selected Weapons Programs, 

In addition, the 

program will not have a stable design when it must commit to building 

flight test vehicles. According to acquisition best practices, a design is 

considered stable when the technologies are mature and the critical 

design review (CDR) confirms that at least 90 percent of the drawings are 

releasable for manufacturing. Based on the experience of other SM-3 

interceptors, the program must commit to produce flight test interceptors 

2 years before the March 2016 first flight. However, this timeline means 

the commitment to a flight test vehicle would occur a year before the SM3 Block IIB PDR has confirmed that the design is feasible and more than 

a year and a half before CDR has confirmed that the design is stable. See 

figure 9 for a depiction of the tentative SM-3 Block IIB schedule.

GAO-11-233SP (Washington, D.C.: Mar. 29, 2011).

5 GAO, Best Practices: Capturing Design and Manufacturing Knowledge Early Improves 

Acquisition Outcomes, GAO-02-701 (Washington, D.C.: July 15, 2002).

6 GAO, Defense Acquisitions: Missile Defense Transition Provides Opportunity to 

Strengthen Acquisition Approach, GAO-10-311 (Washington, D.C.: Feb. 25, 2010).

7 Given the funding reduction in fiscal year 2012, the program plans to delay the product 

development decision by several months but was still determining in January 2012 what 

other modifications to the tentative schedule would take place. We reviewed the tentative 

schedule issued prior to the funding reduction.
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 61 GAO-12-486 Missile Defense

Figure 9: SM-3 Block IIB Schedule

Note: Given the early stage of the program, we are not able to depict the production plans or the end 

of the product development phase for the SM-3 Block IIB.

Program management officials stated that they have taken steps in the 

tentative schedule that reduce acquisition risk. According to SM-3 Block 

IIB program information, the tentative schedule is based on the 

experience of programs with similar magnitude and complexity, and the 

concept definition and program planning contractors will develop detailed 

product development schedules that will help refine the program 

schedule. Further, activities during the technology development phase, 

such as evaluating the performance of multiple contractor concepts, 

simulations conducted by the contractors, and affordability assessments, 

are designed to reduce risk in SM-3 Block IIB development. In addition, 

while the program plans to hold its production development decision prior 

to the PDR, it will hold a series of reviews with the concept definition 

contractors to receive engineering insight into each contractor’s plans. 

Program management officials told us they also plan to hold a 

government-only system requirements review prior to the initiating the 

product development contract competition. This review is planned to 

confirm that SM-3 Block IIB has specific technical requirements that the 

developer can use to establish a product baseline as well as conduct a 

risk and technology readiness assessment.

Another key step for successful programs is ensuring that only mature 

technologies are brought into product development. MDA has identified 

technologies that are important for SM-3 variants and is investing in these 

technologies, particularly the less mature technologies, to facilitate SM-3 

Block IIB development. However, as of October 2011, the program had 

not named specific critical technologies for the SM-3 Block IIB. Program 

officials stated that they do not plan to do so until the product 

development decision. The concept definition contractors are required to 
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 62 GAO-12-486 Missile Defense

identify technology investments to increase the maturity of the 

technologies by demonstrating them in a relevant environment by the end 

of fiscal year 2013, which coincides with the product development 

decision. MDA, however, does not require that a program mature 

technologies to this level by this decision. Without knowing the specific 

critical technologies, it is not possible to identify the risk of including them 

in the product development phase. As we have previously reported, 

including immature technologies in product development can lead to 

delays and contribute to cost increases.8

While the program has proposed that $1.673 billion in research and 

development funding is needed from fiscal years 2012 to 2016, a full 

program acquisition cost has not yet been developed. Given the early 

stage of the program, and that key decisions about requirements and the 

missile configuration have not been made, a full acquisition cost estimate 

is not currently feasible. According to MDA, the program plans to

complete a detailed cost estimate prior to entering product development.

A cost estimate cannot be developed until key acquisition decisions are 

made. Program management officials stated that warfighter and system 

requirements for the SM-3 Block IIB have not been set, and discussions 

about the delivery schedule beyond the initial capability are ongoing. 

Further, whether the propellant will be liquid or solid, the SM-3 Block IIB’s 

diameter, and whether modifications must be made to a vertical launch 

system are not yet known given the early stage of the program. In 

addition, as there is not yet a final schedule, the currently proposed 

funding is not informed by a complete post-product development decision 

schedule. Program management officials note that these key decisions 

are being informed by activities occurring during the technology 

development phase, such as trade studies involving the propulsion and 

missile diameter, and they are updating current cost estimates as they 

receive information from contractors as well as working on developing 

detailed cost estimates.

 

8 GAO, Best Practices: Better Management of Technology Development Can Improve 

Weapon System Outcomes, GAO/NSIAD-99-162 (Washington, D.C.: July 30, 1999).

Full Program Acquisition 

Costs Not Developed 

Given Early Stage of the 

Program
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 63 GAO-12-486 Missile Defense

MDA determined that a key goal for the SM-3 Block IIB is to provide an 

early intercept capability. However, a recent Defense Science Board 

study suggested that other capabilities are more important than early 

intercept. The study concluded that early intercept capability is not useful

for regional missile defense. Further, while early intercept with shoot-lookshoot capability could be part of a cost-effective defense of the U.S. 

homeland if a sufficiently fast missile was available, the size of the 

battlespace and not early intercept capability is the key driver of costeffectiveness.9 In addition, it is unclear if early intercept is possible for 

defense of the U.S. homeland due to the velocity required for an early 

intercept of an intercontinental ballistic missile aimed at the United States 

and the state of current missile technology. Finally, the value of a shootlook-shoot capability relies on a robust ability to determine if the first 

missile was successful, often called kill assessment, but this ability has 

not been established.10

The program office did not conduct a formal analysis of alternatives to 

compare the operational effectiveness, cost, and risks of a number of 

alternative potential solutions to address valid needs and shortfalls in 

operational capability prior to embarking on the technology development 

phase. The program did assess some missile concepts for early intercept 

capability in a review that was not a formal analysis of alternatives. The 

program currently plans to conduct engineering and trade studies—

including cost trades—that will be completed in the fourth quarter of fiscal 

year 2012 and review additional alternative concepts as part of the 

concept definition process. While MDA programs are not required to 

conduct an analysis of alternatives, we have previously reported that it is 

key to planning and establishing a sound business case. Specifically, an 

analysis of alternatives provides a foundation for developing and refining 

In response, MDA stated that the Defense 

Science Board study had used a limited definition of early intercept and 

ignored significant benefits of the strategy that stem from decreasing the 

time available to the adversary to deploy countermeasures. Such benefits 

include providing a longer viewing time of deployment maneuvers for 

forward-based sensors, reducing the flight time of the interceptor, and 

increasing the complexity to the attacker of deploying countermeasures.

 

9 Shoot-look-shoot, also known as shoot-assess-shoot, means firing one interceptor, 

observing the results of the initial shot, and then launching the subsequent missile(s).

10 The Aegis BMD weapons system includes an integrated kill assessment system. We 

did not evaluate the capabilities of this system.

Benefits of Early Intercept 

Capability Are Unclear and 

the Lack of Analysis of 

Alternatives May Result in 

Warfighter Needs Not 

Being Met within Resource 

Constraints 
Appendix VI: Aegis Ballistic Missile Defense 

(Aegis BMD) Standard Missile-3 (SM-3) Block 

IIB

Page 64 GAO-12-486 Missile Defense

the operational requirements for a weapons system program and 

provides insight into the technical feasibility and costs of alternatives. 

Further, without a full exploration of alternatives, the program may not 

achieve an optimal concept that satisfies the warfighter’s needs within 

available resource constraints.11

 

11 GAO, Defense Acquisitions: Many Analyses of Alternatives Have Not Provided a 

Robust Assessment of Weapon System Options, 

Without this sound basis for program 

initiation, the SM-3 Block IIB is at risk for cost and schedule growth as 

well as not meeting the warfighter’s needs with the resources available.

GAO-09-665 (Washington, D.C.: 

Sept. 24, 2009).
Appendix VII: Aegis Ashore

Page 65 GAO-12-486 Missile Defense

Fiscal year 2011 events

• Initiated manufacturing of Aegis Ashore test site at 

Pacific Missile Range Facility in preparation for testing in 

fiscal year 2014. 

• Successfully completed system design review and 

preliminary design review. 

• Signed agreement with Romania to host Aegis Ashore 

site as part of European Phased Adaptive Approach 

Phase II. 

• Restructured acquisition strategy for deckhouse twice. 

Overview

 Concurrent development and production schedule increase 

potential for cost growth and schedule delays.

 Various Aegis Ashore components require modification for a landbased configuration and development uncertainties remain.

 Unstable Aegis Ashore program content, affecting both the 

resource baseline and cost estimates, reduces transparency and 

impedes oversight and accountability.

Aegis Ashore is the Missile Defense Agency’s (MDA) planned land-based 

version of the ship-based Aegis Ballistic Missile Defense (Aegis BMD), 

which will track and intercept ballistic missiles in their midcourse phase of 

flight using Standard Missile-3 (SM-3) interceptors. Key components 

include a vertical launching system (VLS) with SM-3 missiles and a 

reconstitutable enclosure, referred to as a deckhouse, that contains the 

SPY-1 radar and command and control system. Aegis Ashore will share 

many components with the sea-based Aegis BMD and will use next 

generation versions of the Aegis weapons systems—Aegis 4.0.1 and 

Aegis 5.0—that are still under development. In accordance with the 

September 2009 European Phased Adaptive Approach (PAA) 

announcement, the Department of Defense (DOD) plans to deploy the 

first Aegis Ashore installation with the SM-3 Block IB in the 2015 time

frame and the second installation in the 2018 time frame.

Given the commitment to field Aegis Ashore by the 2015 time frame, the 

program’s schedule contains a high level of concurrency—buying weapon 

systems before they demonstrate, through testing, that they perform as 

required—between development and production. The program began 

product development early, included high levels of concurrency in its 

construction and procurement plan, and has not aligned its testing 

schedule with component procurement and construction. As we have 

reported previously, an acquisition strategy for accelerated fielding, such 

as that of Aegis Ashore, will likely accept higher risk primarily through 

Appendix VII: Aegis Ashore

Background and Overview

Concurrent Development 

and Production Schedule 

Increase Potential for Cost 

Growth and Schedule 

Delays
Appendix VII: Aegis Ashore

Page 66 GAO-12-486 Missile Defense

concurrent development and production.1

The program began product development and established the Aegis 

Ashore cost, schedule, and performance baseline in June 2010, which 

was 14 months before completing its preliminary design review. This 

concurrent sequencing can increase technical risks and the possibility of 

cost growth by committing to product development with less technical 

knowledge than needed by acquisition best practices and without 

ensuring that requirements are defined, feasible, and achievable within 

cost and schedule constraints. In addition, the program has a concurrent 

schedule for constructing deckhouses and procuring Aegis Ashore 

components. Since committing to product development and establishing 

the product development baseline, the acquisition strategy for deckhouse 

construction has been revised twice. The current plan, called the dual 

deckhouse plan, is to construct two deckhouses—first, an operational 

deckhouse planned for installation in Romania and a second for 

developmental testing in Hawaii. The test deckhouse will begin 

construction a quarter later than the operational deckhouse and will be 

installed for testing at the Pacific Missile Range Facility in Hawaii. Aegis 

BMD program management officials stated that a third deckhouse, for the 

Aegis Ashore installation in Poland, will be constructed at a later date to 

be set based on funding availability. The program also has initiated 

procurement of equipment, such as the VLS and SPY-1 radar that are 

needed for the Aegis Ashore installations.

Under such a strategy, major 

problems are more likely to be discovered in production, when it is either 

too late or very costly to correct them.

This plan means that knowledge gained from testing the Hawaiian 

installation cannot be used to guide the construction of the Romanian 

deckhouse or procurement of components for operational use. Any 

design changes that arise from testing in Hawaii will have to occur on a 

complete deckhouse and on already procured components intended for 

operational use. As we have previously reported, rework on an existing 

fabrication is costly. Aegis Ashore is currently scheduled to participate in 

four flight tests, three of which are intercepts, with the first intercept flight 

test scheduled for the second half of fiscal year 2014, at which point two 

of the three deckhouses will be completed and Aegis Ashore site 

 

1 GAO, High-Risk Series: Defense Weapons System Acquisition, GAO/HR-93-7

(Washington, D.C.: December 1992).
Appendix VII: Aegis Ashore

Page 67 GAO-12-486 Missile Defense

construction and interceptor production will be well under way. The final 

flight test is planned for the fourth quarter of fiscal year 2015. See figure 

10 for a depiction of Aegis Ashore’s concurrent schedule.

Figure 10: Aegis Ashore Schedule

However, Aegis BMD program management officials state that Aegis 

Ashore has taken steps to lower the acquisition risks. First, the officials 

note that the program is using components already in use aboard Aegis 

BMD ships, reducing the technical risk of the program. The Director of 

MDA has stated that the sea-based system and Aegis Ashore will share 

identical components. According to program documentation, the dual 

deckhouse plan reduces risk and creates fabrication and construction 

efficiencies. Aegis BMD program management officials noted that the 

dual deckhouse plan has significant advantages over prior plans, all of 

which had the operational deckhouse built before the test deckhouse. For 

example, they noted that prior Aegis Ashore deckhouse construction 

plans required testing a different deckhouse design in Hawaii than the 

one that would be used at the operational sites. Constructing two 

deckhouses concurrently provides for greater efficiency in purchasing 

material and equipment and allows for one contractor to build both 

deckhouses. The Director of MDA stated that the deckhouse construction 

methodology is the most cost effective and efficient under the program’s 

time constraints. In addition, the program expects to be able to modify the 

operational deckhouse prior to its installation in Romania if flight tests 

reveal that a modification is needed. The program management officials 

also stated that the dual deckhouse plan provides more time for testing 

the equipment that goes in the deckhouse. Aegis BMD program 

management officials stated that this plan allows them to test the 

electrical system in the Romanian deckhouse and to complete these tests 
Appendix VII: Aegis Ashore

Page 68 GAO-12-486 Missile Defense

more than 1 year earlier than previously scheduled. Finally, they noted 

that constructing two deckhouses also facilitates testing, including 

conducting Aegis Light Off events that consist of preflight test verification 

of the integration of Aegis Ashore components.

Aegis BMD program management officials told us that the schedule does 

contain more risk before the first controlled test vehicle flight test, which is 

the first time all of the Aegis Ashore components will be integrated, and 

less risk between that test and the fielding in Romania. They stated that 

they decided to increase the risk at the start of the schedule in order to 

meet the presidentially announced date of 2015 for the first Aegis Ashore 

installation.

While Aegis BMD program management officials are confident that the 

risks of a concurrent schedule are low given the nature of the Aegis 

Ashore program, the short time frame for integrating and fielding Aegis 

Ashore could magnify the effects of any problems that may arise. 

Program documentation states that there is limited to no margin in the 

schedule to deal with possible delays in fabrication or system testing, and 

as this effort is the first time a land-based deckhouse has been 

constructed, there is no prior experience on which to draw to alleviate any 

schedule delays.

While Aegis Ashore will use components already developed and used 

operationally in the sea-based Aegis BMD, key components—the VLS 

and radar—will be modified for use on land. In addition, the multimission 

signal processor, a key component for both the sea-based and landbased system that processes radar inputs from ballistic and cruise missile 

targets, is still under development and behind schedule. The first time all 

of the Aegis Ashore components are expected to be integrated and flight 

tested will be in fiscal year 2014. Given the concurrent schedule for the 

program, any difficulties with the modified components or partly 

developed components may affect the overall schedule, potentially 

leading to cost growth or an installation not meeting expectations 

because a needed modification was discovered too late.

The Aegis Ashore installations will include a VLS currently used on Aegis 

BMD ships, but it is planned to be located at a greater distance from the 

deckhouse. The communications system between the deckhouse and the 

VLS will require modification because of this increased distance. In 

addition, the VLS is planned to be surrounded by an environmental 

enclosure at Aegis Ashore installations. Aegis BMD program 

Various Aegis Ashore 

Components Require 

Modification for a LandBased Configuration, and 

Development 

Uncertainties Remain
Appendix VII: Aegis Ashore

Page 69 GAO-12-486 Missile Defense

management officials stated that this enclosure will include the heating 

and cooling system and provide power to the launcher. Testing of this 

modification is planned for fiscal year 2014.

Aegis Ashore’s SPY-1 radar likely will face challenges related to the 

radio-frequency spectrum, which is used to provide an array of wireless 

communications services, such as mobile voice and data services, radio 

and television broadcasting, radar, and satellite-based services. The 

radar might need to be modified if the performance of wireless devices in 

Romania is degraded by the SPY-1. Furthermore, Romania’s future use 

of the radio-frequency spectrum is unknown but could allow more 

domestic wireless communications services to operate in or near the 

radar’s operating frequency. Consequently, the Aegis Ashore site may 

need modifications to resolve this potential issue, or alternatively,

Romanian wireless broadband devices may need to be modified. An 

initial analysis of radio-frequency spectrum use in Romania by the 

Defense Spectrum Organization, DOD’s organization that provides 

information and assistance on radio frequency analysis, planning, and 

support, recommended to MDA that additional study of Romanian radiofrequency spectrum use occur. Aegis BMD management officials told us 

that they recognize the risks associated with operating the SPY-1 radar 

on land and that MDA plans additional study in fiscal year 2012 to better 

understand Romanian spectrum use and the potential effect of the SPY-1 

radar on land, including study of existing land-based SPY-1 radars. There 

may be modifications to the SPY-1 radar to mitigate this potential issue, 

but the officials told us they do not currently know what modifications 

could be required to mitigate any frequency issues because of this need 

for further study. Depending on spectrum policy and usage in the host 

nation, this issue may be a long-term challenge over the life of the Aegis 

Ashore installations regardless of where they are fielded.

In addition, urban clutter—which could affect the ability to acquire, 

maintain track, and perform imaging on long-range targets—could affect 

the SPY-1 radar. Program documentation states that both the Romanian 

and Polish Aegis Ashore sites have clutter from urban structures and 

wind farms. Urban clutter may require modifications of the radar, such as 

software modifications, or may require additional testing or affect

operations of the Aegis Ashore installation.
Appendix VII: Aegis Ashore

Page 70 GAO-12-486 Missile Defense

In addition to the aforementioned VLS and radar issues, developmental 

uncertainties also exist for the multimission signal processor. We have 

previously reported that it is behind schedule, with a significant 

percentage of its software increments still needing to be integrated.2

As we have reported previously, Aegis Ashore is dependent upon next 

generation versions of Aegis systems—Aegis 4.0.1 and Aegis 5.0—as 

well as the SM-3 Block IB interceptor, all of which are still under 

development.

This 

component of Aegis Ashore was unable to demonstrate planned 

functionality for a radar test event in December 2010, and the Defense 

Contract Management Agency has identified the multimission signal 

processor schedule as high risk.

3

 

Aegis Ashore’s requirements, acquisition strategy and overall program 

content were not stable when the resource baseline—the expected 

investment in the development and delivery of a product—was 

established, and subsequent program changes obscure the assessment 

of program progress. MDA’s acquisition directive states that baselines are 

used to assess programs and program maturity. We have previously 

reported that baselines provide the best basis for transparency over 

actual program performance, giving decision makers key information 

about program progress and cost.4

 

2 GAO, Arleigh Burke Destroyers: Additional Analysis and Oversight Required to Support 

the Navy’s Future Surface Combatant Plans, 

Baseline variances give management 

information about where corrective action may be needed to bring the 

program back on track. Variation from the baseline can provide valuable 

insight into program risk and its causes and can empower management 

to make decisions about how to best handle risks. However, this 

transparency is limited if the initial baseline is not sound or if the reporting 

of progress against the baseline obscures actual program cost or 

performance.

GAO-12-113 (Washington, D.C.: Jan. 24, 

2012).

3 GAO 11-372.

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

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

Unstable Aegis Ashore 

Program Content, 

Affecting Both the 

Resource Baseline and 

Cost Estimates, Reduces 

Transparency and Impedes 

Oversight and 

Accountability 
Appendix VII: Aegis Ashore

Page 71 GAO-12-486 Missile Defense

Aegis Ashore’s resource baseline, established at the developmental 

baseline review on June 22, 2010, was initially $813 million. The initial 

resource baseline established the resources needed to develop and build 

two Aegis Ashore systems—one test and one operational— and deploy 

them in the 2015 time frame. In the June 25, 2010 BMDS Accountability 

Report (BAR) submitted to Congress 3 days after the review, MDA 

reported a revised resource baseline of $966 million, an increase of 

$153 million or 19 percent. According to information provided by the 

program, the reason for the increase was a refinement of the program 

requirements and a review of resource estimates provided earlier in fiscal 

year 2010.

Beyond this resource baseline adjustment, the anticipated cost of the 

program has grown as program plans have developed. By February 

2012, program management officials provided information that the 

program was reporting a cost growth of $622 million over the 2010 

baseline for a total cost estimate of $1.6 billion.5

 

5 According to information provided by the program, the $1.6 billion includes costs for 

development, military construction, operations and support and disposal. It excludes Navy 

military construction, manning and fleet operations costs as well as costs for MDA’s 

command, control, battle management, and communications system. It also does not 

include any procurement funding. 

Aegis BMD management 

officials provided information attributing the cost growth to changes in the 

deckhouse fabrication plans, an increase in the cost of the Aegis 

Weapons system, and a refinement of equipment needs. In addition, the 

program has adjusted the calculations for the average procurement unit 

cost (APUC), or the ratio of procurement costs to the number of 

operational units, across the life of the program. At the developmental 

baseline review in June 2010, the APUC was based on the test 

installation in Hawaii. By June 2011, the program included two 

installations—for Romania and Poland—in the APUC. However, at the 

end of fiscal year 2011, the program changed the quantity to one Aegis 

Ashore installation. Information provided by the program office states that 

the increase to two installations occurred due to the addition of all 

European PAA phases to the program during the year and that the fiscal 

year 2012 BAR will include only one installation to be consistent with the 

2011 BAR. The current estimate for the APUC also has changed. The 

baseline for the average procurement cost is $272 million for each Aegis 

Ashore system. Program management officials reported that by February 
Appendix VII: Aegis Ashore

Page 72 GAO-12-486 Missile Defense

2012, the estimate for the APUC was $380 million, a 40 percent increase 

over the baseline unit cost. 
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 73 GAO-12-486 Missile Defense

Fiscal year 2011 events

• In December 2010, the program failed to successfully 

intercept a target during a retest of the unsuccessful January 

2010 intercept attempt. The tests were designed to verify the 

capability of the enhanced version of the kill vehicle called 

the Capability Enhancement II (CE-II EKV).

• Due to the failed intercept test, the Director, MDA halted 

final integration of the remaining CE-II EKVs.

• At the request of the U.S. Northern Command, delivered a 

second fire control system to Fort Greely Alaska so that 

testing can occur while the system is also operational.

• GMD participated in a BMDS ground test during which 

operational personnel executed tactics, techniques and 

procedures for the defense of the United States. 

Overview

 GMD has not been able to verify the capability of the CE-II 

interceptor.

 MDA’s cost to demonstrate the CE-II through flight testing has 

grown significantly.

 MDA has pursued a highly concurrent acquisition strategy for 

the GMD program that allowed for rapid fielding, but with 

increased risks.

 Consequences of MDA’s highly concurrent acquisition strategy 

include schedule delays, cost growth and reduced 

understanding of system performance. 

The GMD element enables combatant commanders from the U.S. Space 

and Missile Defense Command1 to defend the United States against a 

limited attack from intermediate- and intercontinental-range ballistic 

missiles from nations such as North Korea and the Middle East during the 

midcourse phase of flight. GMD consists of a ground-based interceptor 

(GBI)—a booster with an exoatmospheric kill vehicle (EKV) on top—and a 

fire control system that receives target information from Ballistic Missile 

Defense System sensors in order to formulate a battle plan. The GMD 

program has emplaced two EKV versions. The first, fielded since 2004, is 

known as the Capability Enhancement I (CE-I)2 and the second, the 

current version in production, is called the Capability Enhancement II 

(CE-II). GMD has fielded its entire planned inventory of 30 GBIs.

3

 

1 This command is the Army service component to U.S. Strategic Command.

According to the Director, Missile Defense Agency (MDA), GMD is 

expected to remain in service until at least 2032.

2 The original EKV’s delivered were called Test Bed kill vehicles, however, they have 

since been renamed Capability Enhancement I.

3 In 2009, the Secretary of Defense reduced the number of planned emplaced GBIs from 

44 to 30, reducing the number of GBIs needed. The reduced inventory includes 30 

operational interceptors and an additional 22 for testing and spares.

Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Background and Overview
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 74 GAO-12-486 Missile Defense

In fiscal year 2011, MDA continued to provide U.S. Northern Command a 

capability to defend the nation against a limited ballistic missile attack and 

delivered a second fire control system to Fort Greely, Alaska, to provide 

flexibility to operate while also testing the system.

MDA has not successfully demonstrated the ability of the CE-II to 

intercept a target. The first two attempts failed—the first in January 2010 

due to a quality control issue and the second in December 2010 due to a 

design issue.4

After this failure, the Director, MDA, testified that the agency’s top priority 

was to confirm the root cause, fix it, and successfully repeat the previous 

flight test.

During this second attempted test, MDA launched an 

intermediate-range target with a simulated reentry vehicle and associated 

objects. A forward-based radar provided acquisition and track data to the 

GMD system. In addition, the Sea-based X-band radar provided 

discrimination data to the GMD system. The GMD interceptor was 

launched from a silo at Vandenberg Air Force Base, flew as expected to 

its designated point, and deployed the CE-II EKV, which reached the 

target and identified the most lethal object but failed to intercept it.

5

 

4 The failure review investigation concluded that FTG-06 failed due to a quality control 

escape where a lockwire was not inserted during the EKV manufacturing process. The 

contractor has altered its processes now to ensure that all steps are properly followed. 

Accordingly, MDA undertook an extensive and rigorous effort 

to determine the root cause of the failure and develop design solutions to 

resolve the failure. The investigation concluded the following: (1) ground 

testing cannot replicate the environment in which the kill vehicle operates 

and (2) the CE-II EKV, specifically the inertial measurement unit, requires 

redesign and additional development, which MDA has undertaken. For 

example, according to a GMD program official, the program has 

conducted over 50 component and subcomponent failure investigation 

and resolution tests. Additionally, the program has developed new testing 

techniques and special instrumentation to provide additional data in future 

flight tests.

5 According to GMD and contractor officials, they understood that they could not replicate 

the failure during ground testing and have since developed new technology to measure 

the frequencies that they might experience in space. Although the frequency ranges are 

not fully compatible, they are making progress. 

GMD Has Not Been Able to 

Verify the Capability of the 

CE-II EKV Interceptor
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 75 GAO-12-486 Missile Defense

MDA realigned resources from planned 2011 activities to fund the 

investigation and fund return-to-intercept activities including redesign 

efforts. For example, the program delayed funding the rotation of older 

fielded interceptors into flight test assets, delayed funding interceptor 

manufacturing, and delayed purchasing GBI upgrade kits. However, the 

agency did continue its efforts to increase reliability of the interceptors 

through upgrades and repair of five interceptors although the 

refurbishments conducted to date do not fix all known issues or provide a 

guarantee of reliability.

The cost to confirm the CE-II capability through flight testing has 

increased from $236 million to about $1 billion dollars due to the flight test 

failures as noted in table 4. In addition to the costs of the actual flight 

tests, the total cost for determining the root cause and developing the 

design changes has not been fully developed.

Table 4: Flight Test and Failure Review Cost to Assess CE-II Capabilitya

Dollars in millions

Activity Cost

FTG-06 $236

FTG-06a 240

CTV-01 Costs as of February 2012 141

FTG-06b Costs as of February 2012 269

Failure review costs as of February 2012 91

Total $976

Source: MDA. 

a Flight test costs include the target, mission planning, range support, and post-test analysis.

While the cost incurred by MDA to verify the CE-II variant through flight 

testing, as noted above, is about $1 billion, it does not reflect the costs 

already expended during development of the interceptor and target. For 

example, the cost of the flight test excludes nonrecurring development 

costs, such as the development costs for the interceptor or target and its 

support as well as those for systems engineering and test and evaluation, 

among others. Often these are costs that were incurred many years 

before the flight test was conducted. MDA has not separately reported the 

nonrecurring development costs for the CE-II interceptor, but instead 

reports the program acquisition unit costs (which are the development, 

production, deployment, and military construction costs divided by the 

total number of operationally configured units) for the combined CE-I and 

MDA’s Cost to 

Demonstrate the CE-II 

Initial Capability through 

Flight Testing Has Grown 

Significantly 
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 76 GAO-12-486 Missile Defense

CE-II interceptor effort. For these interceptors, the program acquisition 

unit costs are reported to be $421 million as of February 2011 and are 

likely increasing to address the flight test failure. MDA reports the 

nonrecurring costs for the targets used in these flight test as $141 million 

each. Consequently, including nonrecurring development costs for both 

the CE-II and the targets would substantially increase the costs for each 

flight test and the overall costs outlined in table 4. 

To meet a 2002 presidential directive to deploy an initial missile defense 

capability by 2004, MDA concurrently matured technology, designed the 

element, tested the design and produced and fielded an initial capability. 

A 2008 MDA briefing acknowledged that fielding while still in the 

development and test phase led to very risky decisions regarding 

schedule, product quality, and program cost. For example, the EKV team 

focused on technical aspects of design instead of also ensuring that the 

design could be produced, which led to a lack of production control and 

near continuous engineering changes. While this approach did lead to the 

rapid fielding of a limited defense, it also resulted in schedule delays, 

unexpected cost increases, a refurbishment program, and a reduced 

knowledge of system reliability necessary for program sustainment, as

well as variations between delivered CE-I EKVs. (See fig. 11.)

MDA Has Pursued a Highly 

Concurrent Acquisition 

Strategy for GMD That 

Allowed for Rapid 

Fielding, but with 

Increased Risks
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 77 GAO-12-486 Missile Defense

Figure 11: GMD Concurrent Schedule

MDA emplaced its first GBI in 2004, although it had little of the data, such 

as interceptor reliability, that it would normally have had before fielding a 

system. Accordingly, the Director, MDA, testified on March 2011 that 

GMD put interceptors “that are more akin to prototypes than production 

representative missiles in the field.” Additionally, interceptors were 

emplaced in silos before successfully conducting a flight test of this 

configuration.

In 2004, MDA committed to another highly concurrent development, 

production, and fielding strategy for the new CE-II interceptor, approving 

the production before completing development of the prior version or flight 

testing the new components.6 MDA proceeded to concurrently develop, 

manufacture, and deliver 12 of these interceptors even though MDA has 

not yet successfully tested this new version.

 

6 The CE-II EKV was not originally a reliability upgrade or a performance upgrade 

program. Its initial priority was replacing obsolete components. However, updating certain 

components is expected to result in increased performance. 
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 78 GAO-12-486 Missile Defense

MDA’s concurrent approach to developing and fielding assets has 

disrupted its acquisition efforts, resulted in cost growth and expensive 

retrofits, and reduced the planned knowledge of the system’s capabilities 

and limitations. In response to the failure of FTG-06a in December 2010, 

MDA restructured its fiscal year 2011 manufacturing plan by halting 

deliveries of remaining CE-II EKVs until the completion of the failure 

review and a nonintercept attempt in fiscal year 2012.7

To help mitigate the affect of the production halt, the GMD program 

planned to perform five limited upgrades to previously manufactured CE-I 

interceptors. According to contractor officials, in order to keep the 

production line viable, they were directed to complete five limited 

interceptor upgrades; however, the program was only able to complete 

three and expects to complete the other two in fiscal year 2012. As we 

previously reported, in 2007 MDA began a refurbishment and retrofit 

program of the CE-I interceptors to replace questionable parts identified 

in developmental testing and manufacturing.8

Additionally, MDA will have to undertake a major retrofit program for the 

CE-II EKVs that have already been manufactured and delivered in 

addition to the retrofit program for the CE-I GBIs that is already underway. 

According to GMD program management officials, the final cost for this 

effort has not been determined, but they expect the effort to cost about 

$18 million per EKV, resulting in an additional cost of about $180 million

for 10 interceptors.

This program was to 

develop an overall plan to address known hardware upgrades and service 

life limitations, issues discovered since the interceptors were emplaced. 

However, MDA has yet to complete all planned refurbishments of CE-I 

EKVs, and program officials discovered additional problems during early 

refurbishments causing MDA to expand this effort. Consequently, 

refurbishments are planned to continue for many more years and the cost 

to refurbish each CE-I interceptor could range from $14 million to 

$24 million.

9

 

7 A GMD program official stated that the agency is allowing the contractor to continue 

work on those components of the EKV that would not be factors in the FTG-06a flight test 

failure in order to keep the production line moving.

8 GAO-09-338 and GAO-10-311. 

9 Although the program has delivered 12 EKVs, 2 have already been expended during 

flight testing. 

Consequences of MDA’s 

Highly Concurrent 

Acquisition Strategy 

Include Schedule Delays, 

Cost Growth, and Reduced 

Understanding of System 

Performance
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 79 GAO-12-486 Missile Defense

The agency has also had to restructure its flight test program, adding two 

tests that were not previously planned before the failure. To verify the 

new design of the kill vehicle, MDA inserted a nonintercept test scheduled 

for the third quarter of fiscal year 2012. This test is designed to exercise 

as many CE-II EKV functions as possible that have not been 

demonstrated in either FTG-06 or FTG-06a. Performing the nonintercept 

mission, using an upgraded inertial measurement unit, provides the 

benefit of scripting the test in order to best stress the EKV design and to 

fully demonstrate the resolution of the failure in FTG-06a. MDA officials 

have stated that if the test confirms that the cause of the failure has been 

resolved, the program will restart the manufacturing and integration of the 

CE-II EKVs.

However, successfully completing an intercept that demonstrates the full 

functionality of the kill vehicle is necessary to validate that the new design 

works as intended. MDA added a new intercept flight test (FTG-06b) in 

the fourth quarter of fiscal year 2012, however due to further 

developmental challenges with the EKV, it has been delayed until at least 

the second quarter fiscal year 2013 to demonstrate CE-II intercept 

capability and achieve the unmet objectives of the two previous tests 

(FTG-06 and FTG-06a).10 As a result, confirmation that the design works 

as intended will take place more than 9 years after the decision to begin 

production and more than 4 years after the first planned test.11

Lastly, MDA’s continued inability to conduct the GMD developmental flight 

testing has resulted in less knowledge of the fielded systems capabilities 

and limitations than planned. For example, GMD has been only able to 

successfully conduct two intercept tests since 2006—the last successful 

intercept being conducted December 2008.12

 

10 This schedule to return to flight may also be at risk because a key component 

redesigned due to the earlier failure has experienced more problems in production. 

Additionally, GMD has yet 

to conduct a salvo test. As we reported in our last assessment, GMD 

cancelled its planned 2011 salvo test due to the failure in the January 

2010 flight test and scheduled a salvo test for fiscal year 2015. 

11 As we reported in 2009, MDA had originally planned to assess CE-II capability in fiscal 

year 2008. However, early ground test failures in the inertial measurement unit caused 

delivery delays and resulted in a redesign of the component. Consequently, the program 

had to delay the test. See GAO-09-338. 

12 GMD conducted FTG-03a in September 2007 and FTG-05 in December 2008. 
Appendix VIII: Ground-based Midcourse 

Defense (GMD)

Page 80 GAO-12-486 Missile Defense

Consequently, neither the CE-I nor CE-II variant capability is fully 

understood and according to the Director, Operational Test and 

Evaluation’s fiscal year 2010 assessment, the continuing evolution of the 

interceptor design has resulted in multiple interceptor configurations 

among the fielded interceptors and test assets. These configuration 

differences complicate assessment of operational capability.

GMD’s acquisition strategy will continue its high levels of concurrency. 

Developmental flight testing will continue through 2022, well after the 

currently planned completion of production. In following this concurrent 

acquisition strategy, the Department of Defense is accepting the risk that 

these later flight tests may discover issues that require costly design 

changes and retrofit programs to resolve.
Appendix IX: Precision Tracking Space System 

(PTSS)

Page 81 GAO-12-486 Missile Defense

Fiscal year 2011 events

• PTSS was initiated in the second quarter of fiscal year 2011.

• Johns Hopkins University’s Applied Physics Laboratory, 

under contract with the Missile Defense Agency, awarded 

subcontracts to industry partners, to bring them into the 

development process.

• The PTSS program completed its System Requirements 

Review in March 2011.

Overview

 PTSS is just beginning the early acquisition phases. 

 PTSS revised its acquisition strategy in January 2012, includes 

some acquisition best practices, but also elevated levels of

concurrency.

 Projected size and cost of the entire PTSS constellation is 

unknown. 

 While many technologies are well developed, technology 

maturation of key components still needed.

 PTSS concept development benefits from STSS testing. 

The Missile Defense Agency’s (MDA) PTSS is being developed as a 

space-based infrared sensor system to provide persistent overhead 

tracking of ballistic missiles after boost and through the midcourse phase 

of flight. Being a space-based sensor system, PTSS is not constrained by 

geographical considerations that affect the placement of ground-, air-, 

and sea-based radar systems. While the number of PTSS satellites to 

make up the constellation has not yet been determined, the system is 

expected to expand the Ballistic Missile Defense System’s (BMDS) ability 

to track ballistic missiles in the post-boost phase and plans to fill coverage 

gaps existing within the current BMDS radar configuration. According to 

PTSS officials, the constellation will provide coverage of some 70 percent 

of the earth’s surface with a minimum of six satellites. Furthermore, the 

enhanced coverage planned for PTSS would help increase the size of the 

missile raids that the BMDS can track and respond to. The PTSS 

program plans to launch its first two development satellites in the fourth 

quarter of fiscal year 2017 and to increase the constellation to nine 

satellites by 2022.

The PTSS program plans to create a satellite constellation that can 

accommodate subsequent configuration adjustments. The program 

intends to create a flexible on-orbit and ground architecture that could 

accommodate such changes as an increase to the constellation size or 

changes to the communications infrastructure. This flexibility would permit 

the system to evolve in response to changes in the threat environment.

The PTSS program officially began as a new program in the second 

quarter of fiscal year 2011. Johns Hopkins University’s Applied Physics 

Appendix IX: Precision Tracking Space 

System (PTSS)

Background and Overview

PTSS Is Just Beginning the 

Early Acquisition Phases
Appendix IX: Precision Tracking Space System 

(PTSS)

Page 82 GAO-12-486 Missile Defense

Laboratory (APL) is the lead system developer for PTSS. In this capacity, 

APL advises the PTSS program office on systems engineering and 

integration issues, while leading the other laboratories involved in the 

development effort. In early 2011, APL awarded six integrated system 

engineering team subcontracts to industry partners to provide 

manufacturing and producibility recommendations for the development of 

the PTSS initial article satellites: Raytheon, Northrop Grumman, 

Lockheed Martin, Ball Aerospace, Orbital Science, and Boeing. MDA’s 

decision to involve the laboratories in initial development work is an action 

that we have previously recommended for other space acquisition 

programs.

During the course of 2011, the PTSS program made several schedule 

changes, in part due to budgetary issues. PTSS was scheduled to begin 

the Technology Development Phase in the fourth quarter of fiscal year 

2011, but delayed it until the fourth quarter of fiscal year 2012. One of the 

key early analytical knowledge points, the establishment of mass raid 

engagement time windows, was also delayed from the fourth quarter of 

fiscal year 2011 to the first quarter of fiscal year 2012. Finally, the 

planned launch date for the first two initial satellites was delayed from the 

fourth quarter of fiscal year 2015 and is now planned for the fourth quarter 

of fiscal year 2017. The PTSS program also delayed the projected launch 

dates of production satellites for the PTSS constellation.

According to the acquisition strategy report signed in January 2012, MDA 

plans to develop and acquire the satellites in three phases. First, the APLled laboratory team will produce two lab-built development satellites. 

Second, an industry team, selected through open competition while the 

APL-led laboratory team is still in a development phase, will develop and 

produce two industry-built engineering and manufacturing development 

satellites. Third, there will be a follow-on decision for the industry team to 

produce additional satellites in a production phase. (See fig. 12.)

PTSS Revised Its 

Acquisition Strategy in 

February 2012; It Includes 

Some Acquisition Best 

Practices but Also 

Elevated Levels of 

Concurrency 
Appendix IX: Precision Tracking Space System 

(PTSS)

Page 83 GAO-12-486 Missile Defense

Figure 12: PTSS Concurrent Schedule

The strategy acknowledges some concurrency but maintains that there 

are benefits to this approach. Under the plan, the industry team will be 

approved for production of long-lead items for the two development 

satellites, while the laboratory team is still working to complete the first 

two development satellites. The program intends that by engaging 

industry concurrently at this development stage, industry can influence 

the selection of parts and subsystems in a manner that will minimize the 

need for system design changes between the two laboratory development 

satellites and the two initial industry satellites. The program intends to 

conduct on-orbit checkout and testing of the two laboratory-produced 

development satellites prior to the decision to complete the assembly of 

the two industry-built development satellites.

According to MDA, the approach aligns with several aspects of GAO’s 

acquisition best practices. The program will establish firm requirements 

before committing to production, it will ensure full and open competition, 

the development cycle will be less than 5 years, it has a simple payload 

design and can deploy larger numbers in the constellation and it is 

deferring advanced capabilities until a second spiral thereby limiting the 

technological development challenge for the initial satellites.

According to program management officials, they have taken steps 

intended to mitigate cost, schedule, and performance risks. PTSS is 

being designed strictly for BMDS use, so the satellite payload is geared 

toward the BMDS missile tracking mission, with the objective of keeping 

the design as simple and stable as possible. Additionally, the acquisition 
Appendix IX: Precision Tracking Space System 

(PTSS)

Page 84 GAO-12-486 Missile Defense

strategy stipulates that PTSS will not duplicate functions found elsewhere 

in the BMDS, but instead will remain focused on the specific function for 

which it is being designed. The program aims to shorten its development 

schedule through the use of proven technologies with high technology 

readiness levels. According to PTSS program management officials, the 

use of currently available technologies helps to keep the PTSS design 

cost-effective. In addition, according to those officials, the government 

intends to acquire unlimited data rights, government purpose data rights, 

or both for the duration of the program, so that the government is not 

locked in with any particular contractor.

Because the PTSS acquisition strategy was only recently developed, we 

had limited time to assess the strategy for this review. We intend to 

review this new strategy next year. Building developmental and 

engineering and manufacturing development satellites is a positive step. 

However, the strategy may enable decision makers to fully benefit from 

the knowledge to be gained and the risk reduction opportunity afforded 

through on-orbit testing of the lab-built satellites before committing to the 

industry-built developmental satellites. The industry-built development 

satellites will be under contract and under construction before on-orbit 

testing of the first two lab-built satellites can confirm that the design works 

as intended.

Currently, the PTSS program office has not determined how many 

satellites will make up the PTSS constellation, though the program is 

progressing with a flexible approach toward the number of satellites in the 

constellation. The size of a full PTSS constellation would depend on 

factors that have yet to be determined, most specifically, the size of 

missile raid that the system would be expected to track. In fiscal year 

2011, the program conducted physics-based analysis to demonstrate the 

system’s performance within the BMDS in handling a range of raid 

scenarios. The satellites for the PTSS constellation are expected to have 

a 5-year design life, though officials stated that they expect the 

operational life will exceed the 5 years. Relative to other military space 

programs, the PTSS satellite is intended to be a low-cost unit, which can 

be readily replaced as on-orbit units degrade over time. However, the full 

cost of development has not yet been determined, and it is currently 

unclear how many satellites will need to be replaced annually, as this will 

be determined by such factors as design life and the total number on 

orbit. The cost to launch a satellite into orbit can be very expensive, 

sometime exceeding $100 million or more. Because the full size of the 

constellation has also not yet been determined, the PTSS program is 

Projected Size and Cost of 

the Entire PTSS 

Constellation Are

Unknown 
Appendix IX: Precision Tracking Space System 

(PTSS)

Page 85 GAO-12-486 Missile Defense

unable to estimate the anticipated full costs of the acquisition and 

operation of the system.

In leveraging proven technologies with high technology readiness, many 

of the system’s technologies are in relatively high states of maturity for a 

program in this early stage of development. The program office has 

identified two PTSS critical technologies: the optical payload and the 

communications payload. Many of the underlying components for the 

optical and communications payloads have been demonstrated in an 

environment relevant to the conditions under which they will be employed 

in the PTSS satellites. However, certain key components of these critical 

technologies require further development to reach maturity, and until 

these key components mature, they reduce the overall technological 

maturity of the payloads. Program management officials stated that they 

plan to have both critical technologies in functional form by the time of the 

preliminary design review, which is scheduled for the end of fiscal year 

2013.

The high radiation environment in which the PTSS satellites will operate 

creates technical challenges for the development effort. The PTSS 

program has instituted risk reduction measures to address radiation risks 

pertinent to two technologies. For risk issues pertaining to the focal plane 

array, the PTSS’s risk mitigation efforts are on schedule, with two 

contracts having been awarded to explore manufacturing processes to 

address radiation hardness requirements for the satellites’ anticipated onorbit environment. Radiation mitigation efforts are also required for the 

satellite’s star tracker, a component of the system’s guidance and control 

subsystem. The PTSS program plans to award contracts to several 

vendors in 2012 to evaluate options to address this concern.

The PTSS development effort is benefiting from MDA’s two operational 

Space Tracking and Surveillance System (STSS) satellites, which were 

launched into orbit in 2009. BMDS test events involving STSS have been 

useful in providing key information to the PTSS program. According to 

PTSS officials, the success of STSS in the FTM-15 flight test conducted 

in 2011 served as a “proof of principle” for PTSS, as the event 

demonstrated multiple aspects of the PTSS concept of operations, such 

as the ability to provide data from which interceptor missiles could be 

remotely launched and directed toward a missile threat. The FTM-12 flight 

test in late 2011 repeated the positive results noted in FTM-15, with 

tracking sensors locking onto targets and successfully providing direction 

While Many Technologies 

Are Well Developed, 

Technology Maturation of 

Key Components Is Still 

Needed

PTSS Concept 

Development Benefits 

from STSS Testing
Appendix IX: Precision Tracking Space System 

(PTSS)

Page 86 GAO-12-486 Missile Defense

for the fired interceptors. The STSS tests are assisting the PTSS program 

office as it develops the system’s concept of operations.
Appendix X: Targets and Countermeasures

Page 87 GAO-12-486 Missile Defense

Fiscal year 2011 events

• Eleven targets were delivered and successfully launched. 

• Successful “return-to-flight” of short range air-launched 

target. 

• Intermediate-range ballistic missile (IRBM) target contract 

signed in March 2011. 

• Undefinitized contract action for eight reentry vehicles 

issued. 

• Intercontinental ballistic missile (ICBM) target contract 

solicitation canceled February 16, 2011. 

Overview

 Targets were not a source of testing problems in 2011. 

 Availability of targets increasing risk for first Ballistic Missile 

Defense System operational flight test and affecting other 

planned tests. 

 Missile Defense Agency slowly building inventory of targets and 

implementing backup strategy. 

 Significant decisions consolidate new work with the prime 

contractor. 

The Missile Defense Agency’s (MDA) Targets and Countermeasures 

program designs, develops, produces and procures missiles serving as 

targets for testing missile defense systems. The targets program involves 

multiple acquisitions covering the full spectrum of threat missile 

capabilities (separating and nonseparating reentry vehicles, varying radar 

cross sections, countermeasures, etc.) and ranges.

1

As MDA’s test program has matured, its Targets and Countermeasures 

program has worked toward developing, in parallel, more complex targets 

that can more closely represent modern-day threats. Since the program 

was initiated in 2001, it has done this using several different acquisition 

strategies—the third was issued in 2011. Initially, MDA used many 

contractors to design and build the targets, but in 2003, it chose a single 

prime contractor, Lockheed Martin to lead the acquisition. Shortly after, 

MDA decided to pursue what it called the Flexible Target Family 

approach to acquiring targets, which used common components and 

shared inventory and promised reduced cycle time, cost savings, and 

Some target types 

have been used by MDA’s test program for years while others have been 

recently or are now being developed and can represent more complex 

threats.

 

1 Ballistic missiles are classified by range: short-range ballistic missiles have a range of 

less than 1,000 kilometers (621 miles); medium-range ballistic missiles have a range from 

1,000 to 3,000 kilometers (621 to1,864 miles); intermediate-range ballistic missiles have a 

range from 3,000 to 5,500 kilometers (1,864 to 3,418 miles); and intercontinental ballistic 

missiles have a range greater than 5,500 kilometers (3,418 miles).

Appendix X: Targets and Countermeasures

Background and Overview
Appendix X: Targets and Countermeasures

Page 88 GAO-12-486 Missile Defense

increased capability. At that time, MDA began work on the 72-inch 

diameter launch vehicle (LV)-2 target and the 52-inch diameter targets. 

When this approach proved more costly and less timely than expected, 

MDA suspended the 52-inch effort, focusing on the LV-2. Responding to 

congressional concern2 about these problems and our 2008 

recommendations, MDA revised its acquisition approach in 2009, seeking 

to increase competition by returning to a multiple contract strategy with 

four separate target classes and a potential of four prime contractors. 

MDA completed the intermediate-range target contract award, which 

reduced target costs. However, as proposals for the new medium-range 

ballistic missile (MRBM) contract were submitted, the program 

determined that costs associated with this approach were higher than 

anticipated. Solicitations for the medium-range and the intercontinental 

classes of targets were then canceled, and MDA began the process of 

revising its acquisition strategy for the third time.

In the past, we have reported that availability and reliability of targets 

caused delays in MDA’s testing of Ballistic Missile Defense System 

(BMDS) elements. However, in fiscal year 2011, MDA delivered 11 

targets, all of which were successfully launched and did not negatively 

affect the test program. The targets launched during the year supported 

tests of several different BMDS elements, including Ground-based 

Midcourse Defense (GMD), Aegis Ballistic Missile Defense, and Patriot 

systems.3

All targets that were delivered or launched within the fiscal year were 

either short- or intermediate-range targets and performed as expected. 

Most notably, in July 2011 MDA successfully accomplished the return-toflight of MDA’s short-range air-launched target. This was the target’s first 

launch since an essential mechanism that releases it from the aircraft 

failed in a December 2009 Terminal High Altitude Area Defense (THAAD) 

flight test. After the failure, the agency identified shortcomings in the 

contractor’s internal processes that had to be fixed before air-launched 

targets could be used again in BMDS flight tests. Nineteen months later, 

 

2 H.R Rep No. 110-477 at 824 (2007) (Conf. Rep.) (accompanying the National Defense 

Authorization Act of 2008. Pub. L. No. 110-181).

3 This report does not contain an assessment of the Patriot Advanced Capability-3, which 

has been transferred to the Army for production, operation, and sustainment.

Targets Were Not a Source 

of Testing Problems in 

Fiscal Year 2011
Appendix X: Targets and Countermeasures

Page 89 GAO-12-486 Missile Defense

these deficiencies were satisfactorily addressed when the target missile 

was successfully extracted from the rear of the C-17 aircraft in FTX-17. 

To reduce risk, the flight was not planned as an intercept mission but as a 

target of opportunity for several emerging missile defense technologies, 

including Space Tracking Surveillance System.

According to MDA and Director, Operational Test & Evaluation test 

officials, the availability of targets has affected planned future flight tests. 

MDA has scheduled the first two extended medium-range ballistic 

missiles (eMRBM) to launch in a crucial operational flight test (FTO-01) 

by the end of 2012, which is the first system-level test of the BMDS. On a 

tight schedule to meet this deadline, MDA is accepting higher risk that 

target issues could affect this test by launching the first two of the new 

targets in this operational test, rather than conducting a risk reduction 

flight first. Risk reduction flight tests are conducted the first time a system 

is tested in order to confirm that it works before adding other test 

objectives. The lack of such a test was one factor that delayed a previous 

GMD flight test (FTG-06) in 2010. While the target, the LV-2, was 

successfully flown in that flight test, aspects of its performance were not 

properly understood and lack of modeling data prior to the test 

contributed to significant delays in the test program.

In addition, the next air-launched target test was scheduled to use the 

new medium-range extended air launched target in 2012, but the flight 

test—FTT-13—was cancelled because of budgetary concerns and test 

efficiency. As a result, the first flight test using this target is not planned 

until the third quarter of fiscal year 2014, though it may be available for 

use as early as the fourth quarter of fiscal year 2012. Since the shortrange air-launched target was successfully launched in July 2011, MDA 

now plans to continue acquisition of the one short-range and the two 

extended air-launched targets that are currently under contract through 

fiscal year 2014.

As development and production processes mature, the targets program is 

slowly developing an inventory of targets for use in BMDS testing. In 

previous years, failures of target missiles have caused major disruptions 

to MDA’s flight test program, in part because no spare targets were 

available to retest once the cause of any failure was determined. In 

response, MDA has slowly begun working toward developing an inventory 

of both backup and spare missiles to support the test plan. The targets 

program currently has a limited backup strategy in place. In the event of a 

target failure, backup missiles assigned to a future mission could be taken 

Availability of Targets 

Increasing Risk for First 

BMDS Operational Flight 

Test and Affecting Other 

Planned Tests

MDA Slowly Building 

Inventory of Targets and 

Implementing Backup 

Strategy
Appendix X: Targets and Countermeasures

Page 90 GAO-12-486 Missile Defense

from inventory and used for an earlier test and be replaced by newer 

missiles. 

The Targets and Countermeasures program made several key decisions 

in fiscal year 2011 that will shape future target acquisition. Two key 

contracts were definitized in 2011; the eMRBM contract in October 2011, 

and an intermediate-range ballistic missile (IRBM) target contract in 

March 2011. MDA realigned funding planned for the medium-range 

competition, which was canceled in 2010, to manufacture additional IRBM 

targets. MDA canceled the planned intercontinental ballistic missile

(ICBM) competition because the new test plan delays the need for the 

first ICBM target by several years. Finally, MDA issued an undefinitized 

contract action to the prime contractor for reentry vehicles. One overall 

consequence of these decisions has been a consolidation of work with 

the prime contractor. (See table 5.)

Table 5: Fiscal Year 2011 Acquisition Events by Target Class

Target class Fiscal year 2011 acquisition events

Short-range ballistic missile targets • Air-launched target return-to-flight in July 

2011

• Undefinitized contract actiona issued for 

acquisition of one foreign military target

MRBM targets • eMRBM production contract definitized in 

October 2011 for five targets

• Undefinitized contract action issued in July 

2011 for seven specialized MRBM targets

• Extended-range air-launched target 

qualification process resumed 

IRBM targets • IRBM contract awarded in March 2011 for 

eight targets

ICBM targets • Specialized ICBM contract solicitation 

canceled in February 2011—acquisition 

delayed to align with first ICBM test in 

2020

Reentry vehicle • Undefinitized contract action for eight 

common reentry vehicles issued to prime 

contractor

Source: GAO Analysis of MDA data.

a

To meet urgent needs, DOD can issue undefinitized contract actions, which authorize contractors to 

begin work before reaching a final agreement on contract terms. Undefinitized contract action means 

any contract action for which the contract terms, specifications, or price are not agreed upon before 

performance is begun under the action. Defense Federal Acquisition Regulation Supplement 

217.7401(d).

Significant Decisions 

Cancel or Defer 

Competition and 

Consolidate New Work 

with the Prime Contractor
Appendix X: Targets and Countermeasures

Page 91 GAO-12-486 Missile Defense

An agreement on price was reached for the production of five eMRBM 

targets in September 2011. MDA began developing the eMRBM for 

operational use in 2003 as part of the Flexible Target Family when it was 

referred to as the 52-inch target. Though development and production 

had been on hold since 2008 because of continuing cost and schedule 

problems, MDA resumed acquisition of eMRBMs through the existing 

prime contractor due to a target failure. The production contract was 

definitized in October 2011 after being undefinitized for about 540 days.4

The Defense Federal Acquisition Regulation states that undefinitized 

contract actions shall provide for definitization by the earlier of either, 180 

days after issuance of the action or the date on which more than 50 

percent of the not-to-exceed price has been obligated. The 180-day 

threshold may be extended but may not exceed the date that is 180 days 

after the contractor submits a qualifying proposal. MDA program officials 

stated that because MDA continued to change the requirements on the 

undefinitized contract action, the contractor did not submit a qualifying 

proposal until March 2011. MDA definitized the contract approximately 

194 days after receiving the proposal. During the 18-month delay, while 

the contract was being negotiated and requirements continued to change, 

the contractor spent over $82 million,

5

MDA initiated three new undefinitized target contract actions in fiscal year 

2011.

the quantity of targets under 

contract increased, and some capability was deferred to later years. The 

final negotiated price at completion was $321 million, $175 million less 

than the previously expected price ceiling. MDA contracting officials 

acknowledged that undefinitized contract actions can lead to undefined 

costs, but believe they are a good tool to use to meet urgent 

requirements.

• First, an action for seven “T3” medium-range ballistic missile targets 

was initiated in July 2011. A requirement for this target type was 

 

4 Defense Federal Acquisition Regulations 217.7404-3 If a contractor submits a qualifying 

proposal before the 50 percent threshold has been reached, then the limitation on 

obligations may be increased to no more than 75 percent.

5 The extended use of undefinitized contract actions has previously been identified by 

GAO and others as risky for the government. Because, under undefinitized contract 

actions, contracting officers normally reimburse contractors for all reasonable, allocable, 

and allowable costs they incur before definitization, contractors bear less risk and have 

little incentive to control costs during this period.
Appendix X: Targets and Countermeasures

Page 92 GAO-12-486 Missile Defense

accelerated in the test plan to the first quarter of fiscal year 2014. T3s 

are unique targets designed for more specialized maneuvers in their 

respective ranges.

• Second, an action for a foreign military asset target to meet a fourth 

quarter of fiscal year 2012 requirement.

• Third, an action for eight common reentry vehicles, which will replace 

earlier ones.

MDA set up a common components project office to manage the 

acquisition strategy for the reentry vehicles, which are intended for flight 

tests in mid-2014. They have the potential to fly on any target launch 

vehicle, but the program is still developing more specific acquisition plans.

In 2011, MDA began implementing its third acquisition strategy for targets 

by acquiring common reentry vehicles from a single source, a significant 

change in the acquisition strategy for the program office. Reentry vehicles 

for targets were previously acquired separately, were more specifically 

tailored to the target launch vehicle, and were procured from more than 

one contractor. The single-source strategy implemented with the 2011 

undefinitized contract action is intended to maximize commonality and 

could reduce costs through purchasing larger numbers. Through 2013, 

the single source will be the targets prime contractor. MDA plans to 

decide in the second quarter of fiscal year 2012 whether to issue a 

competitive solicitation for a new provider.
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 93 GAO-12-486 Missile Defense

Fiscal year 2011 events

• The first production interceptor was delivered in March 2011.

• Eleven of 50 THAAD operational interceptors were delivered in 

fiscal year 2011.

• The production decision was made and the contract was 

issued for additional THAAD batteries.

• Qualification problems with the ignition safety system and 

production start-up issues caused interceptor production rates 

to be slower than planned.

• Two Missile Defense Agency knowledge points, once planned 

for fiscal year 2011, have not yet been achieved due to target 

availability issues. 

Overview

 Army and Department of Defense test organizations 

successfully conducted the first THAAD operational flight 

test. 

 THAAD’s highly concurrent acquisition strategy led to 

delayed delivery of THAAD batteries.

 Requirements and design were not stable before THAAD 

interceptor production began.

 THAAD interceptor production issues delay deliveries and 

increase program costs. 

 THAAD achieved conditional materiel release to the Army in 

2012; full materiel release date not yet known

 Ongoing concurrency increases acquisition risks until 

developmental testing is complete. 

THAAD is a rapidly deployable ground-based system designed to defend 

against short- and medium-range ballistic missile attacks during their late 

midcourse and terminal stages. A THAAD battery consists of interceptor 

missiles, six launchers, a radar, a fire control and communications 

system, and other support equipment. The program is producing batteries 

for initial operational use for conditional materiel release to the Army. For 

this to occur, the Army must certify that the batteries are safe, suitable, 

and logistically supported. The date for full materiel release has not yet 

been determined because the program is still conducting flight tests to 

prove out the system, and production rates have been slower than 

planned.

THAAD successfully conducted its first operational flight test in October 

2011, a major accomplishment because this was its first operational test 

with the Army and Department of Defense test and evaluation 

organizations fully engaged to ensure that the execution and test results 

were representative of the fielded system. During the test, the THAAD 

system engaged and nearly simultaneously intercepted two short-range, 

threat-representative, ballistic missile targets. The test demonstrated the 

ability to perform in the full battle sequence, from planning through live 

operations, under operationally realistic conditions (within the constraints 

of test range safety). The U.S. Army Test and Evaluation Command and 

the Ballistic Missile Defense System (BMDS) Operational Test Agency 

will review data collected from this event to make an operational 

Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Background and Overview

Army and Department of 

Defense Test Organizations 

Successfully Conducted 

the First THAAD 

Operational Flight Test
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 94 GAO-12-486 Missile Defense

assessment of the THAAD system. In addition, the Director, Operational 

Test and Evaluation, will also independently evaluate the operational 

effectiveness of the system. The assessment of this event will support 

upcoming production and fielding decisions.

The Missile Defense Agency (MDA) awarded a contract for THAAD’s first 

two operational batteries in December 2006, before its design was mature 

and developmental testing of all critical components was complete. At 

that time, MDA’s first THAAD battery, consisting of 24 interceptors, 3 

launchers, and other associated assets, was to be delivered to the Army 

as early as 2009. While some assets were delivered by this time, the 

interceptors were delayed because of issues with components that had 

not passed all required testing. In response to pressure to accelerate 

fielding the capability, THAAD adopted a highly concurrent development, 

testing, and production effort, as shown in figure 13, that has increased 

program costs and delayed fielding of the first THAAD battery until early 

fiscal year 2012.

THAAD’s Highly 

Concurrent Acquisition 

Strategy Led to Delayed 

Delivery of THAAD 

Batteries
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 95 GAO-12-486 Missile Defense

Figure 13: THAAD Concurrent Schedule

Problems encountered while THAAD was concurrently designing and 

producing assets caused slower delivery rates of both the first and 

second THAAD batteries, which are not currently projected to be 

complete before July 2012—16 months after the original estimate of 

March 2011. While all assets, except the interceptors, were complete in 

2010, the first production interceptor for the first THAAD battery was not 

produced until the second quarter of fiscal year 2011. In the same 

quarter, MDA committed to purchasing additional assets by signing a 

production contract for two additional THAAD batteries, despite 

incomplete testing of a safety device on the interceptor. During fiscal year 

2011, after several production start-up issues, 11 of the expected 50 

operational interceptors were delivered.1 Consequently, the first battery of 

24 interceptors was not complete and available for fielding until the first 

quarter of fiscal year 2012—more than 2 years later than originally 

planned. The same issues have delayed the second battery as well. 

Although the launchers and other components for the second battery 2 

were completed in 2010, the full 50 interceptors necessary for both 

batteries are not expected to be delivered until July 2012.

 

1 Twelve total interceptors were delivered by the end of fiscal year 2011, but the first, 

produced in fiscal year 2010, was used in a flight test.
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 96 GAO-12-486 Missile Defense

A production contract was signed in 2006 before the requirements or 

design for a required safety device called an optical block was complete. 

Housed in the flight sequencing assembly, an optical block is an ignition 

safety device designed to prevent inadvertent launches of the missile. 

The program experienced design and qualification issues with this 

component until testing was complete in the fourth quarter of fiscal year 

2011. Incorporating an optical block device into the THAAD interceptor 

has been a primary driver of design, qualification, and production delays 

for the program since as early as 2003, shortly after the Army issued a 

standard requirement for this type of safety device on munitions ignition 

systems. The original THAAD design did not have an optical block device, 

and MDA did not modify the development contract to include this 

requirement until 2006. Program management officials explained that the 

military standard is primarily written for smaller, more typical, munitions’ 

fuses, not systems as technically complex as THAAD.

According to program management officials, THAAD has worked with the 

Army to tailor requirements and associated testing required of the optical 

block device during the past few years. The part failed initial qualification 

testing in early fiscal year 2010 and was not fully qualified until that 

September. Also, in May 2010, the Army added requirements to test the 

flight sequencing assembly during exposure to electrical stress and other 

environments, such as extreme temperature, shock, humidity, and 

vibration. Testing failures led THAAD to make minor design changes and 

extensive manufacturing process changes, which required requalification 

of the optical block and delayed production of the interceptors. 

Environmental testing was complete in March 2011, but the stress test 

was not completed until September 2011—after the first interceptor was 

produced.

As recently as fiscal year 2011, the program was considering further 

design changes to the optical block to make it more producible; however, 

the program estimated that the cost to make the needed design changes 

would be $150 million, an investment that could not be easily recouped in 

production savings in the near future. Program mangers decided not to 

make those changes because of improved flight sequencing assembly 

and optical block manufacturing performance, and program funding 

constraints. The current design was also successfully demonstrated in the 

recent flight test and in the other testing in support of conditional materiel 

release. Therefore, the program determined that the benefits of 

continuing the redesign no longer justified the cost.

Requirements and Design 

Were Not Stable before 

THAAD Interceptor 

Production Began
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 97 GAO-12-486 Missile Defense

Production issues have collectively delayed interceptor delivery by 18 

months and are projected to cost the program almost $40 million. While 

issues with the flight sequencing assembly have been the most costly, 

three production start-up issues emerged in fiscal year 2011 that also 

caused delays. First, the program encountered problems with the 

availability of a solution containing nitrogen needed for production. 

Program management officials explained that since all of the liquid could 

not be extracted out of a newly designed bottle, due to unanticipated 

design changes in the delivery mechanism, more had to be ordered 

before production could continue, which caused the delay. Another 

production delay of over a month took place because of debris found in a 

transistor on the interceptor. Program management officials explained 

that a root cause analysis determined that the part had not undergone 

proper testing, which would have detected such debris. The transistors 

had to be replaced with properly tested parts. A third delay occurred 

because ragged, raised edges were discovered inside several of the fuel 

tanks. According to program management officials, in the unlikely event 

that a small metal edge broke off during pressurization of the fuel tank, it 

could cause an interceptor failure. They said that after conducting a risk 

analysis, the program decided to remove the rough edges on future 

procurements, but not on the first 50 interceptors, since the possibility of 

such risk was low.

The interceptor’s flight sequencing assembly is currently being produced 

at or above the expected rate of about four per month. Due to start-up 

issues, which are common to new production lines, interceptor production 

rates have fluctuated, ranging anywhere from 0 to 5 in recent months. 

Also, some recent production rates could be artificially high as delays with 

some components have allowed others more time than usual to stockpile 

for future production. These stockpiles are projected to help with 

production through the second battery. The program needs to achieve a 

steady production rate in order to deliver the second THAAD battery by 

July 2012. After this date, the contractor is scheduled to return to a rate of 

3 interceptors per month.

THAAD achieved conditional materiel release to the Army in February 

2012, though at one time, it had been expected as early as September 

2010. It was delayed over a year due to ongoing safety issues with the 

interceptor and, most recently, to incorporate data from the October 2011 

operational flight test. Conditional materiel release is an interim step to 

the Army’s full materiel release decision. For example, for conditional 

materiel release, the Army Ignition System Safety Review Board requires

THAAD Interceptor 

Production Issues Delay 

Deliveries and Increase 

Program Costs

THAAD Achieved 

Conditional Materiel 

Release in 2012; Full 

Materiel Release Date Not 

Yet Known 
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 98 GAO-12-486 Missile Defense

that three flight sequencing assembly units complete a series of tests to 

evaluate the interceptor in various electrical and other stressing 

environments. By the end of fiscal year 2011, all these tests had been 

successfully completed. While THAAD has performed all test events 

required for conditional materiel release, including its most recent flight 

test (FTT-12), analysis of data is ongoing and the Army is still refining its 

requirements for full materiel release. Program management officials 

expect the gap in knowledge between conditional materiel release and full 

materiel release to be defined in second quarter of fiscal year 2012 as 

well. At that time, they explained, the Army will have developed a list of 

the remaining conditions that the program must address in order to 

receive full materiel release.

One of the conditions that must be met to achieve full materiel release of 

THAAD to the Army is the incorporation of the required Thermally Initiated 

Venting System, a safety feature of the interceptor that prevents the boost 

motor from becoming propulsive or throwing debris beyond a set distance 

in the event that the canister holding the interceptor heats up to a certain 

temperature. Development and testing of this system has been done 

concurrently with production of fielded interceptors. Even if the latest 

design and near-term testing is successful, the system will be approved 

too late to be incorporated in the first 50 interceptors. Although the 

system is not required for conditional materiel release, the program 

expects it to be required for full materiel release, unless the Army grants a 

waiver. Since the last two developmental tests of this safety feature have 

failed, THAAD is at risk of not complying with the requirement. The next 

test is scheduled for the second quarter of fiscal year 2012. According to 

program management officials, if it fails, the program will be forced to 

seek a waiver for the current design and accept the risk of not having the 

design on the interceptors. Program management officials explained that 

the requirement for a Thermally Initiated Venting System is primarily 

written for smaller-scale systems, not for a system as large as THAAD. 

Although officials said they are working to comply with the requirement, 

the technology may not be available to make it work. At best, the program 

could not incorporate the safety system into the interceptor until 

production of the third battery. The Army has approved fielding the first 48 

interceptors configured without the safety system based on available 

testing and it has chosen to accept the associated risk.
Appendix XI: Terminal High Altitude Area 

Defense (THAAD)

Page 99 GAO-12-486 Missile Defense

While MDA is committed to producing four THAAD batteries, more flight 

tests are needed to achieve two remaining MDA developmental 

knowledge points set for the program. Both are tied to flight tests that 

were, at one time, planned for fiscal year 2011 but were delayed into later 

fiscal years. MDA’s knowledge points identify information required to 

make key decisions throughout the program and are typically defined 

early in the acquisition phase to manage program risks. Although success 

of the first operational test increases confidence in THAAD, we have 

reported that good acquisition outcomes require high levels of knowledge 

before significant decisions are made. The building of knowledge consists 

of information that should be gathered at critical points over the course of 

a program before committing to production.

To achieve the first remaining MDA knowledge point, THAAD must 

conduct an integrated flight test against a medium-range ballistic missile 

target. This test was originally scheduled for the second quarter of fiscal 

year 2011, but after an air-launched target failure in December 2009 and 

subsequent target availability issues, the agency moved the test to the 

third quarter of fiscal year 2012. Later in fiscal year 2011, the test was 

cancelled altogether because of budgetary concerns and test efficiency. 

The agency now plans to test the objective in the first BMDS operational 

test (FTO-01) in late fiscal year 2012. This test is not only planned as the 

first against a medium-range target for THAAD, but it will also be the first 

flight of the newly developed extended medium-range ballistic missile

target. Assuming several new “firsts” during this high-level operational 

test poses significant additional risk for the agency and for achieving the 

knowledge point.

The second knowledge point is to demonstrate THAAD’s Army Navy 

/Transportable Radar Surveillance - Model-2 radar advanced 

discrimination in terminal mode. This knowledge point was delayed from 

the first quarter of fiscal year 2010 into the fourth quarter of fiscal year 

2011 because of the same 2009 target issue. However, this knowledge 

point was not accomplished in 2011 either. Additional changes to the 

flight test plan in 2011 moved this objective to a flight test scheduled for 

the third quarter of fiscal year 2013. As THAAD continues to gather data 

from these developmental flight tests, the program continues to 

concurrently produce interceptors, launchers, and associated equipment 

for operational use. As a result, the program is at risk for discovering new 

information that could lead to costly design changes and a need to retrofit 

missiles either already in the production process or in inventory.

Ongoing Concurrency 

Increases Acquisition 

Risks until Developmental 

Testing Is Complete
Appendix XII: GAO Contact and Staff 

Acknowledgments

Page 100 GAO-12-486 Missile Defense

Cristina Chaplain, (202) 512-4841 or chaplainc@gao.gov

In addition to the contact named above, David B. Best, Assistant Director; 

Letisha J. Antone; Ivy Hübler; LaTonya Miller; Jonathan A. Mulcare; 

Kenneth E. Patton; John H. Pendleton; Karen Richey; Ann Rivlin; Luis E. 

Rodriguez; Steven Stern; Robert Swierczek; Hai V. Tran; and Alyssa Weir 

made key contributions to this report.

Appendix XII: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(120996)
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