United States Government Accountability Office

GAO Testimony before the Subcommittee on 

Strategic Forces, Senate Committee on 

Armed Services

SPACE ACQUISITIONS

Actions Needed to Expand 

and Sustain Use of Best 

Practices 

Statement of Cristina T. Chaplain, Director 

Acquisition and Sourcing Management Team 

For Release on Delivery

Expected at 2:30 p.m. EDT

Thursday, April 19, 2007

 

GAO-07-730T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 19, 2007

SPACE ACQUISITIONS

Actions Needed to Expand and Sustain 

Highlights of GAO-07-730T, a testimony Use of Best Practices 

before the Subcommittee on Strategic 

Forces, Senate Committee on Armed 

Services

DOD’s space system acquisitions 

have experienced problems over

the past several decades that have

driven up costs by hundreds of 

millions, even billions of dollars, 

stretched schedules by years, and 

increased performance risks. DOD

has recognized the need to change

its approach to developing space 

systems and is attempting to instill 

best practices in new efforts. GAO 

was asked to testify on its findings 

on space acquisitions problems and

steps needed to sustain and expand 

the use of best practices. In

preparing this testimony, GAO

relied on its detailed reviews of 

space programs as well as crosscutting work on cost estimating

and best practices. 

GAO does not make 

recommendations in this 

testimony. However, GAO has 

made recommendations on steps

DOD can take to ensure better

outcomes for its space acquisitions 

programs. These include 

developing an overall investment 

strategy for acquisition programs, 

addressing human capital and other

shortfalls in capacity, and revising

policies supporting space to 

incorporate best practices.

The majority of major acquisition programs in DOD’s space portfolio have 

experienced problems during the past two decades that have driven up cost 

and schedules and increased technical risks. At times, cost growth has come

close to or exceeded 100-percent, causing DOD to nearly double its 

investment in the face of technical and other problems without realizing a 

better return on investment. Along with the increases, many programs are 

experiencing significant schedule delays—as much as 6 years—postponing 

delivery of promised capabilities to the warfighter. Outcomes have been so 

disappointing in some cases that DOD has had to go back to the drawing 

board to consider new ways to achieve the same, or less, capability. 

GAO’s reviews of space acquisitions this year found that some ongoing 

programs—for example, the Advanced Extremely High Frequency satellite 

program and the Wideband Global SATCOM program—have been able to 

work through the bulk of technical problems they were facing and are on 

track to meet revised targets, albeit at higher costs and with delayed 

capability. Others, however, including the Space-Based Infrared System High 

program, the Global Positioning System IIF, and the National Polar-orbiting 

Operational Environmental Satellite System, continue to face setbacks and 

further risks. 

In recognizing the need to reform space acquisitions, DOD has taken steps to

instill best practices in two new major space efforts—the Transformational 

Satellite Communications System (TSAT) and the Space Radar program—

which are expected to be among the most complex and costly space 

programs ever. For these programs, DOD has taken steps to separate 

technology discovery from acquisition, establish an incremental path toward 

meeting user needs, obtain agreements on requirements before program 

start, and use quantifiable data and demonstrable knowledge to make 

decisions to move to next phases. If these actions can be sustained, DOD 

will greatly reduce technical risks, although not completely. There is still 

significant inherent risk associated with integrating critical technologies on 

board the satellites and with developing the software needed to achieve the

capabilities of the satellites. 

Moreover, sustaining these reforms on these two programs and expanding 

them to others will not be easy. Like all weapons programs, space programs 

continue to face funding pressures that have encouraged too much 

optimism. DOD has not prioritized its programs for funding even though its 

investment for all major space acquisitions is expected to increase about 

46 percent in the next 3 years. It is likely to continue to face cost overruns on 

problematic programs, and it wants to undertake other major new efforts in 

addition to Space Radar and TSAT. In addition, new programs are being 

undertaken as DOD is addressing shortfalls in critical technical, business, 

and program management skills. In other words, DOD may not be able to 

obtain the right skills and experience to manage all of the new efforts. 

www.gao.gov/cgi-bin/getrpt?GAO-07-730T.

To view the full product, including the scope 

and methodology, click on the link above. For 

more information, contact Cristina Chaplain at 

(202) 512-4841 or chaplainc@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the Department of Defense’s 

(DOD) space acquisitions. Each year, DOD spends billions to acquire 

space-based capabilities to support current military and other government

operations as well as to enable DOD to transform the way it collects and 

disseminates information, gathers data on adversaries, and attacks targets. 

In fiscal year 2008 alone, DOD expects to spend over $22 billion dollars to 

develop and procure satellites and other space systems, including nearly 

$10 billion on selected major space systems.1

 Despite its growing 

investment in space, however, DOD’s space system acquisitions have 

experienced problems over the past several decades that have driven up

costs by hundreds of millions, even billions of dollars; stretched schedules 

by years; and increased performance risks. In some cases, capabilities 

have not been delivered to the warfighter after decades of development. 

In view of these problems, the Air Force, DOD’s primary space system 

acquirer, has been attempting to instill best practices in two newer space 

programs—Space Radar and the Transformational Satellite 

Communications System (TSAT). These steps can help better position the 

two programs for success, but they will not work without adhering to 

commitments to delay milestone decisions if there are still gaps between 

requirements and resources, and to use more robust tools to analyze risks, 

costs, and schedule. Moreover, other space programs—new and old—are 

still facing setbacks, reflecting problems in technology development or 

design, problems in managing contractors, and more broadly, funding 

shifts needed to sustain the larger space portfolio. Such setbacks—

common among all weapons acquisitions—continue to hamper the Air 

Force’s ability to provide resources and support needed to deliver 

capabilities within cost, schedule, and performance targets. My testimony 

today will highlight our findings on space acquisitions as well as actions 

needed to address persistent acquisition problems and to build on best 

practice approaches being adopted in Space Radar and TSAT. 

 1

Estimates of fiscal year 2008 spending on procurement and research, development, test 

and evaluation, are based on DOD’s Fiscal Year 2007 Future Years Defense Program 

(FYDP) plan. The fiscal year 2008 FYDP plan was not available to us at the time we 

developed this testimony. 

Page 1 GAO-07-730T 
The majority of major acquisition programs in DOD’s space portfolio have 

experienced problems during the past two decades that have driven up 

cost and schedules and increased technical risks. Several programs have 

been restructured by DOD in the face of delays and cost growth. At times, 

cost growth has come close to or exceeded 100 percent, causing DOD to 

nearly double its investment in the face of technical and other problems 

without realizing a better return on investment. Along with the increases, 

many programs are experiencing significant schedule delays—as much as 

6 years—postponing delivery of promised capabilities to the warfighter. 

Outcomes have been so disappointing in some cases that DOD has had to

go back to the drawing board to consider new ways to achieve the same,

or less, capability. Some programs have been able to work through the 

bulk of technical problems they were facing and are on track to meet 

revised targets, albeit at higher costs and with delayed deliveries. Others, 

however, continue to face setbacks. 

Space Acquisitions 

Continue to Face Cost 

and Schedule 

Increases 

The following chart compares original cost estimates and current cost 

estimates for the broader portfolio of major space acquisitions for fiscal 

years 2007 through 2012. The wider the gap between original and current 

estimates, the fewer dollars DOD has available to invest in new programs.

Page 2 GAO-07-730T 
Figure 1: Comparison between Original Cost Estimates and Current Cost Estimates 

for Selected Major Space Acquisition Programsa for Fiscal Years 2007 through 2012 

0

1,000

2,000

3,000

4,000

5,000

6,000

2007 2008 2009 2010 2011 2012

(Millions of 2007 dollars)

Source: GAO analysis of DOD data.

Fiscal year

Current cost estimate

Original cost estimate

a

Includes: Advanced Extremely High Frequency (AEHF) satellites, Evolved Expendable Launch

Vehicle (EELV), Global Broadcast Service (GBS), Global Positioning System II (GPS) , Mobile User

Objective System (MUOS), National Polar-orbiting Operational Environmental Satellite System 

(NPOESS), Space Based Infrared System (SBIRS)High, and Wideband Global SATCOM (WGS). 

The next two figures reflect differences in unit costs and total costs for 

satellites from the time the programs officially began to their most recent 

cost estimate. As the second figure notes, in several cases, DOD has had to 

cut back on quantity and capability in the face of escalating costs. For 

example, two satellites and four instruments were deleted from National 

Polar-orbiting Operational Environmental Satellite System (NPOESS) and 

four sensors are expected to have fewer capabilities. This will reduce 

some planned capabilities for NPOESS as well as planned coverage. 

Likewise, the Space Based Infrared System (SBIRS) High missile detection 

program deferred capabilities, such as mobile data processors for the Air 

Force and the Army and a fully compliant backup mission control facility, 

and it pushed off a decision to procure the third and fourth satellites, 

which will not meet SBIRS High requirements for coverage. Despite such 

measures, unit costs for both programs are still considerably higher than 

originally promised. In addition to SBIRS High and NPOESS, the programs 

Page 3 GAO-07-730T 
featured in the figures include the Advanced Extremely High Frequency

(AEHF) satellites, the Wideband Global SATCOM (WGS) and the Mobile 

User Objective System (MUOS), which are all communications satellites, 

and the Global Positioning System (GPS) II. 

Figure 2: Differences in Unit Life Cycle Cost from Key Decision Point (KDP) B 

(Program Start) and Most Recent Estimate

0

500

1,000

1,500

2,000

2,500

3,000

3,500

SBIRS WGS MUOS GPS II

High

AEHF NPOESS

(In millions in 2007 dollars)

Source: GAO analysis of DOD data.

KDP B

Most recent estimate

Page 4 GAO-07-730T 
Figure 3: Differences in Total Program Costs from Key Decision Point (KDP) B and

Most Recent Estimate 

0

2,000

4,000

6,000

8,000

10,000

12,000

SBIRS WGS MUOS GPS II

High

AEHF NPOESS

(In millions in

2007 dollars)

Source: GAO analysis of DOD data.

KDP B

Most recent estimate

Two fewer

satellites

With fewer key 

sensors and 

two fewer 

satellites

Two fewer 

satellites and 

deferred 

requirements

Plus two 

satellites

Seven 

fewer 

satellites

The next chart highlights the additional estimated months needed to 

complete programs. These additional months represent time not 

anticipated at the programs’ start dates. Generally, the further schedules 

slip, the more DOD is at risk of not sustaining current capabilities. For this 

reason, DOD began an alternative infrared system effort, known as the 

Alternative Infrared Satellite System (AIRSS), to run in parallel with the 

SBIRS High program. 

Page 5 GAO-07-730T 
Figure 4: Additional Months Needed since Program Start

0

10

20

30

40

50

60

70

SBIRS WGS MUOS GPS II

High

AEHF NPOESS

Extra months

Source: GAO analysis of DOD data.

Not applicable 

due to restructure 

but program is

roughly six years

behind its original 

schedule for 

delivery of the 

first satellite

Not applicable due to 

program not 

estimating an initial 

operating capability 

date but program is

over 2.5 years

behind its original 

schedule for launch 

availability of the first 

Block IIF satellite

Some programs, such as AEHF and WGS, have worked through the bulk of 

technical and other problems that were causing large schedule increases 

and cost delays. For example, the AEHF program, which has been in the 

final stages of development for almost 3 years, resolved issues related to 

its cryptographic equipment and is on track to meet a revised date for first 

launch. The WGS program completed rework on improperly installed 

fasteners, and contractors have redesigned computers to rectify data 

transmission errors. The program expects a first launch in June 2007. As

noted in our figures, the MUOS program, which began more recently than

AEHF and WGS, is generally meeting its targets, though it has yet to enter 

into the more difficult stages of satellite production, integration and test.

By contrast, the SBIRS High program still faces considerable risks. Recent 

GAO work for this subcommittee, for example, shows that the program is 

Page 6 GAO-07-730T 
diverging from cost and schedule targets just months after rebaselining 

due to problems related to assembly, integration, and testing and that the 

contractor’s estimates for addressing these issues are overly optimistic. 

Defense Contract Management Agency reports also show that software 

development efforts are behind schedule—by as much as 32 percent. In 

addition, the contractor has already spent about 28 percent, or $66 million, 

of its management reserve from April 2006 to November 2006. This reserve 

is designed to last until 2012, but at the current rate, is likely to be 

depleted by May 2008. If this trend continues, $500 million in additional 

reserve will be needed. As noted earlier, DOD initiated an alternative 

effort—AIRSS—to ensure it would have continued capabilities. However, 

we have questions as to whether AIRSS is being pursued as a “plan B” 

program, as originally envisioned. Rather than seek to maintain continuity 

of operations, the program is focused on advancing capabilities because 

program managers believe there are no viable alternatives. We also found

that there was disagreement among DOD stakeholders as to whether there 

were alternatives or not, and there was concern that the AIRSS schedule 

may be too compressed. Our analysis also found that there was a high 

degree of concurrency in the program’s schedule, which may be limiting 

DOD’s ability to gain knowledge from planned demonstrations and 

increased the potential for costly rework further in the program. 

The GPS Block IIF program is also at a high risk of cost increases and 

schedule delays. Since our last annual assessment of the GPS Block IIF 

program, the program has revised its acquisition program baseline to 

account for cost increases and schedule delays, and requested an 

additional $151 million to cover these costs. The number of IIF satellites to

be procured was reduced from 19 to 12. Further, the launch date of the 

first IIF satellite continues to slip. The original baseline showed an initial 

launch availability date of December 2006, but DOD’s current baseline 

shows July 2009—a slip of about 2.5 years. The program also learned that

the contractor’s earned value management reporting system was not 

accurately reporting cost and schedule performance data. A DOD report 

also recently found that development of user equipment has not been 

synchronized with the development of satellites and control system, 

increasing the risk of substantial delays in realistic operational testing and 

fielding of capabilities. GPS is taking measures to address these problems. 

For example, this year, it did not award its contractor $21.4 million in 

award fees. In December 2005, GAO recommended that DOD improve its 

use of award fees for all weapon system contracts by specifically tying 

them to acquisition outcomes. A review of a sample of programs, including 

SBIRS High, found that this was generally not done. 

Page 7 GAO-07-730T 
The NPOESS program is also still at risk of more cost increases and 

schedule delays. In June 2006, DOD certified the NPOESS program to 

Congress, and with agreement from its program partners, DOD 

restructured the program. Now the NPOESS program acquisition costs are 

estimated to be about $11.5 billion—an increase of about $3 billion over 

the prior cost estimate. Before the contract was awarded, in 2002, the life 

cycle cost for the program was estimated to be $6.5 billion over the 24-year 

period from the inception of the program in 1995 through 2018. The 

delivery of the first two NPOESS satellites has been delayed by roughly 

4 and 5 years, and as noted earlier, the number of satellites to be produced 

has been reduced from six to four. In addition, the number of instruments 

was reduced from 13 (10 sensors and 3 subsystems) to 9 instruments 

(7 sensors and 2 subsystems), and 4 of the remaining sensors will have 

fewer capabilities. The NPOESS program will incorporate any number of 

the deleted instruments if additional funding is provided from outside the 

NPOESS program. The program restructure will result in reduced satellite 

data collection coverage, requiring dependence on a European weather 

satellite for coverage during midmorning hours. Although the program has 

reduced the number of satellites it will produce, the cost per satellite is 

more than 150 percent above the original approved program baseline. The 

NPOESS program is now updating the cost, schedule, performance 

baselines and acquisition strategy, and coordinating the changes with the 

three agencies. The program expects these documents to be approved 

later this year. While work is continuing on key sensors, the program still 

faces potential problems in their development. 

The Space Based Space Surveillance System (SBSS) system—not featured 

on the charts above because it is not yet a formal acquisition program— 

is also encountering problems. The SBSS system is to replace an aging

sensor on an orbiting research and development satellite and improve the 

timeliness of data on objects in geosynchronous orbit. As currently 

planned, the initial block will consist of a single satellite and associated 

command, control, communications, and computer equipment. 

Subsequent SBSS efforts will focus on building a larger constellation of 

satellites to provide worldwide space surveillance of smaller objects in 

shorter timelines. In late 2005, an independent review team found that the 

program’s baseline was not executable; that the assembly, integration, and 

test plan was risky; and that the requirements were overstated. The SBSS 

program was restructured in early 2006 due to cost growth and schedule 

delays. The restructuring increased funding and schedule margin; 

streamlined the assembly, integration, and test plan; and relaxed 

requirements. The launch of the initial satellite was delayed to April 

Page 8 GAO-07-730T 
2009—a delay of about 18 months. Cost growth due to the restructure is 

about $130 million over initial estimates. 

Last, additional cost increases are expected for the Evolved Expendable 

Launch Vehicle (EELV) program, but for reasons that are different than 

the ones being experienced on the satellite programs. In recent years, 

program cost has risen 79 percent, with a cost per unit increase of 

135 percent. A chief reason for cost increases is a decline in the 

commercial launch market upon which the program’s business case was 

based. Cost increases are also a result of additional program scope, 

including mission assurance, assured access to space, and earned value

management systems reporting. In addition, satellite vehicle weight 

growth and satellite launch delays have contributed to cost increases. In 

December 2006, Boeing and Lockheed Martin initiated a joint venture 

(United Launch Alliance, or ULA) that will combine the production, 

engineering, test, and launch operations associated with U.S. government 

launches of Boeing Delta and Lockheed Martin Atlas rockets. Though the 

EELV program office expects long-term savings to be achieved through 

this arrangement, the cost per launch under a recently negotiated Buy III

acquisition strategy will be higher than under Buy I. According to the Air

Force, this is because the contractors will incur additional costs to allow 

the government to perform the necessary oversight not required under 

Buy I. (Exact estimates of the new cost per launch have not been finalized

by the program office yet.) Under the new strategy, EELV will be 

transitioning from a fixed-price arrangement, where launches were 

essentially procured as a service, to a combination of a cost-plus and 

fixed-price contracts. The arrangement will allow the government to 

exercise more oversight and to incentivize contractors through the use of 

award fees. But to realize these benefits, the Air Force will need to ensure 

it has resources (skills, expertise, and tools) to begin accumulating and 

analyzing detailed cost, schedule, performance, design, and technical data.

In addition, it will be important to assess progress in achieving longer-term 

savings envisioned under ULA as well as to ensure that the combined 

assets of the contractors are adequately protected. 

Our past work has identified a number of causes behind the cost growth 

and related problems, but several consistently stand out. First, on a broad

scale, DOD starts more weapon programs than it can afford, creating a 

competition for funding that encourages low cost estimating, optimistic 

scheduling, overpromising, suppressing of bad news, and, for space 

programs, forsaking the opportunity to identify and assess potentially 

better alternatives. Programs focus on advocacy at the expense of realism 

Underlying Reasons 

for Cost and Schedule 

Growth 

Page 9 GAO-07-730T 
and sound management. Invariably, with too many programs in its 

portfolio, DOD is forced to continually shift funds to and from programs—

particularly as programs experience problems that require additional time 

and money to address. Such shifts, in turn, have had costly, reverberating

effects. 

Figure 5 illustrates the negative cycle of incentives that come when 

programs compete for funding. Table 1 highlights specific areas where we 

found the original cost estimates of programs to be optimistic in their 

assumptions. 

Figure 5: Pressures Associated when Too Many Programs Are Competing for 

Funding 

Too many programs

competing for 

funding

Resulting problems require 

more money and time, 

increasing competition 

among programs; bad 

news is suppressed

Costs are underestimated 

(see table 1) and capability 

is overpromised; 

approaches involving 

substantial leaps in 

desired capabilities are 

favored over incremental 

leaps

Sponsors become more 

vested as more money 

and time are spent; 

customers cannot walk 

away, few cancellations of 

problematic efforts

Source: GAO. 

Page 10 GAO-07-730T 
Table 1: Areas where Space Programs Were Too Optimistic in Their Cost Estimate Assumptions 

Space programs affected

Optimistic assumptions AEHF EELV GPS IIF NPOESS SBIRS WGS 

Industrial base would remain constant and available r r r r r

Technology would be mature enough when needed r r r r r

Acquisition reform efforts (implemented via Total System 

Performance Responsibility policy) would reduce cost and 

schedule 

r r r r

Savings would occur from experience on heritage systems r r r r

No weight growth would occur r r r r

Funding stream would be stable r r r r

An aggressive schedule could be met r r r r

No growth in requirements r r r

Source: GAO analysis.

Note: This table was developed as part of a larger review on DOD’s space cost-estimating function. 

Information was derived from discussions with program and contractor officials and GAO analysis. In

some cases, programs may have ultimately experienced problems related to one of the categories,

but we did not have evidence to show that the original assumptions were optimistic.2

Second, as we have previously testified and reported, DOD has tended to

start its programs too early, that is before it has the assurance that the 

capabilities it is pursuing can be achieved within available resources and 

time constraints. This tendency is caused largely by the funding process, 

since acquisition programs attract more dollars than efforts concentrating

solely on proving technologies. Nevertheless, when DOD chooses to 

extend technology invention into acquisition, programs experience 

technical problems that require large amounts of time and money to fix.

Moreover, when the approach is followed, cost estimators are not well 

positioned to develop accurate cost estimates because there are too many 

unknowns. Put more simply, there is no way to estimate how long it would 

take to design, develop, and build a satellite system when critical 

technologies planned for that system are still in relatively early stages of 

discovery and invention.

A companion problem for space systems is that programs have historically 

attempted to satisfy all requirements in a single step, regardless of the 

design challenge or the maturity of the technologies necessary to achieve 

 2

GAO, Space Acquisitions: DOD Needs to Take More Action to Address Unrealistic Initial

Cost Estimates of Space Systems, GAO-07-96, (Washington, D.C.: Nov. 17, 2006). 

Page 11 GAO-07-730T 
the full capability. Increasingly, DOD has preferred to make fewer but 

heavier, larger, and more complex satellites that perform a multitude of 

missions rather than larger constellations of smaller, less complex 

satellites that gradually increase in sophistication. This has stretched 

technology challenges beyond current capabilities in some cases and 

vastly increased the complexities related to software—a problem that 

affected SBIRS High and AEHF, for example. 

In addition, several of the space programs discussed above began in the 

late 1990s, when DOD structured contracts in a way that reduced 

government oversight and shifted key decision-making responsibility onto 

contractors. This approach—known as Total System Performance 

Responsibility, or TSPR—was intended to facilitate acquisition reform and 

enable DOD to streamline a cumbersome acquisition process and leverage 

innovation and management expertise from the private sector. However, 

DOD later found that this approach magnified problems related to 

requirements creep and poor contractor performance. In addition, under 

TSPR, the government decided not to obtain certain cost data, a decision 

that resulted in the government having even less oversight of the programs 

and limited information from which to manage the programs. Further, the 

reduction in government oversight and involvement led to major 

reductions in various government capabilities, including cost-estimating 

and systems-engineering staff. The loss of cost-estimating and systemsengineering staff in turn led to a lack of technical data needed to develop

sound cost estimates. 

Over the past decade, GAO has examined successful organizations in the

commercial sector to identify best practices that can be applied to space

and weapon system acquisitions. This work has identified a number of 

practices, which we have recommended that DOD adopt. Generally, we 

have recommended that DOD separate technology discovery from 

acquisition, follow an incremental path toward meeting user needs, match 

resources and requirements at program start, and use quantifiable data

and demonstrable knowledge to make decisions to move to next phases. 

DOD is making efforts to instill these practices on two programs reviewed 

this year: the Transformational Satellite Communications System and the 

Space Radar program. Specifically: 

DOD Is Implementing 

Best Practices on Two 

New Efforts 

• Successful organizations we have studied ensure that technologies 

are mature, that is, proven to work as intended before program start.

Both TSAT and Space Radar are attempting to do this. According to 

their plans, critical technologies should reach at least a Technology 

Page 12 GAO-07-730T 
Readiness Level (TRL) 6 by program start, meaning the technologies 

have been tested in a relevant environment. This stands in sharp 

contrast to previous programs, which have started with immature 

technologies, such as SBIRS and NPOESS, and it reflects the 

implementation of a “back to basics” policy advocated this past year by

the Under Secretary of the Air Force. If these programs adhere to the 

TRL 6 criteria, they will greatly reduce the risk of encountering costly 

technical delays, though not completely. There are still significant 

inherent risks associated with integrating critical technologies and with 

developing the software needed to realize the benefits of the 

technologies. Moreover, the best practice programs we have studied 

strive for a TRL 7, where the technology has been tested in an 

operational environment, that is, space. 

• Successful organizations defer more ambitious technology efforts to 

corporate research departments (equivalent to science and technology 

(S&T) organizations in DOD) until they are ready to be added to 

future increments. Both programs have deferred more ambitious 

technology development efforts to the science and technology 

environment. TSAT, for example, deferred the wide-field of view 

multi-access laser communication technology, and is contributing 

about $16.7 million for “off-line” maturation of this technology that 

could be inserted into future increments. It has laid out incremental 

advances in other capabilities over two increments. Space Radar has 

deferred lithium-ion batteries, more efficient solar cells, and onboard 

processing for its first increment, and like TSAT, is contributing toward 

their development by S&T organizations. At this time, Space Radar has 

not defined details of an increment beyond the first one. 

• Successful organizations extensively research and define 

requirements before program start to ensure that they are achievable, 

given available resources, and that they do not define requirements 

after starting programs. Both programs have also employed systems 

engineers to help determine achievability of requirements. The TSAT 

program has reached agreement on requirements with its users—

primarily in terms of what will be included in the first several blocks of 

the program and what will not be included. The Space Radar program 

has instituted several processes designed to achieve consensus on 

requirements across a range of diverse users. It still needs to formalize 

agreements related to these processes and also identify key 

performance parameters. This is important because Space Radar is to 

be shared by the military and intelligence communities—each with 

different specific needs for the system and very specific roles and 

responsibilities with regard to the data being produced by Space Radar 

Page 13 GAO-07-730T 
and its users. It has been reported recently that conflicts in roles and 

responsibilities have arisen on dissemination of data being produced by 

a small tactical satellite (TacSat 2) recently launched by DOD for use 

by military commanders.

It remains to be seen whether TSAT and Space Radar will take additional 

steps that successful organizations take to position programs for success. 

For example: 

• The organizations we have studied do not go ahead with program 

start milestone decisions if there are still gaps between requirements 

and resources. TSAT and Space Radar have indicated that they intend

to do the same, but there are external pressures on both programs to 

provide needed capabilities. 

• The organizations we have studied hold program managers 

accountable for their estimates and require program managers to 

stay with a project to its end. We have made recommendations to 

DOD to instill similar practices departmentwide, but these have yet to 

be implemented. Further, there are still incentives in place to keep 

program managers’ tenures relatively short. Promotions, for example, 

often depend on having varied management experience rather than 

sustained responsibility for one program. 

• The organizations we studied have developed common templates and 

tools to support data gathering and analysis and maintain databases 

of historical costs, schedule, quality, test, and performance data. Cost 

estimates themselves are continually monitored and regularly 

updated through a series of gates or milestone decisions that demand 

programs assess readiness and remaining risk within key sectors of 

the program as well as overall cost and schedules. We saw indications 

that TSAT and Space Radar were using more robust tools to analyze 

risks, costs, and schedule than programs have done in the past. 

However, it remains to be seen how these practices will be reflected in 

official cost estimates. In the past, we have found space program 

estimates were simply too optimistic and that independent estimates 

produced by DOD’s Cost Analysis Improvement Group were not being 

used. DOD agreed with our findings and asserted it was taking actions 

to address them. 

Page 14 GAO-07-730T 
The Air Force’s continued efforts to instill best practices on Space Radar 

and TSAT are good first steps toward addressing acquisition problems in 

the space portfolio. They represent significant shifts in thinking about how

space systems should be developed as well as commitment from senior 

leadership. But sustaining these reforms will not be easy. The programs 

are not immune to funding pressures that have encouraged too much 

optimism. They are also being undertaken as DOD is addressing shortfalls 

in critical technical, business, and program management skills. Further, 

processes and policies key to sustainment and broader use of best 

practices have not been changed to further reflect the kinds of changes 

taking place on Space Radar and TSAT. 

Actions Needed to 

Sustain Commitment 

to Improvements 

First, new programs still must compete for limited funding. As DOD seeks 

to fund Space Radar and TSAT, it will be (1) undertaking other new, costly 

efforts, including GPS III, SBSS, and AIRSS; (2) addressing cost overruns 

associated with programs like SBIRS High and GPS; and (3) facing 

increased pressures to increase investments in assets designed to protect 

space systems. In total, these efforts will increase DOD’s investment for all 

major space acquisitions from $6.31 billion to $9.22 billion, or about 

46 percent over the next 3 years. More may be needed if technical, 

software, and other problems on current programs worsen. At the same 

time, investment needs for other weapon systems are also on the rise, 

while long-term budget forecasts indicate that considerably fewer 

dollars will be available for discretionary spending in coming years 

rather than more. 

In prior reports, we have stated that as long as too many programs 

compete for too few dollars in DOD, programs will be incentivized to 

produce optimistic estimates and suppress bad news. They will view 

success as securing the next installment of funds versus delivering 

capability within cost and schedule goals. We have recommended that 

DOD guide its decisions to start space and other weapons acquisition 

programs with an overall investment strategy that would identify priorities 

for funding so that space systems that are expected to play a critical role 

in transformation, such as Space Radar and TSAT, could be prioritized 

along with other legacy and transformational systems. 

Let me take a moment to illustrate why an investment strategy is critical. 

We have reported in the past that DOD and the Air Force have waited too 

long to establish priorities or make trade-off decisions. We have also 

reported that frequent funding shifts have hurt programs that were 

performing well or further damaged troubled programs. We have also 

reported cases where DOD and the Air Force have walked away from 

Page 15 GAO-07-730T 
opportunities to save costs in lot buys or leverage knowledge already 

gained in legacy programs in favor of starting new programs that promise 

much more advanced capability but have little knowledge to back up that 

promise. Today, DOD is on track to cut short the AEHF program in order 

to pursue TSAT. It has stated it may also do the same for SBIRS to pursue 

AIRSS. In both cases, DOD would be forgoing savings that it had already 

negotiated for lot buys and in effect, paying significantly more for 

nonrecurring engineering. While these decisions have the potential to 

enable DOD to obtain advanced capability sooner (provided best practices

are followed on the new programs), they should have been made much 

earlier and more strategically in order to stem investment losses. 

DOD’s own reports recognize that investment planning needs to be 

instilled in weapon acquisitions. A February 2007 report, in response to a 

requirement in the John Warner National Defense Authorization Act for 

Fiscal Year 2007, outlines steps that DOD is taking to better prioritize and 

fund programs.3

 The initiatives include (1) establishing a new concept 

decision review to provide decision makers with an early opportunity to 

evaluate trade-offs among alternative approaches to meeting a capability 

need, (2) testing portfolio management approaches in selected capability 

areas to facilitate more strategic choices about how to allocate resources 

across programs, and (3) capital budgeting as a potential means to 

stabilize program funding. While these developments are promising, we 

recently reported that such initiatives do not fundamentally change DOD’s 

existing service-centric framework for making weapon system investment 

decisions.4

 Moreover, it will take some time to determine their success in 

enabling more effective funding prioritization. 

Second, space programs are facing capacity shortfalls. These include 

shortages of staff with science and engineering backgrounds as well as 

staff with program management and cost estimating experience. During 

our review this year, the TSAT program cited shortages of space 

acquisition personnel as a key challenge that increases risk for the 

program. Due to broader Air Force cuts in workforce, the program did not 

expect to be able to fill technical positions needed to accompany plans to 

 3

Department of Defense, Defense Acquisition Transformation Report to Congress

(Washington, D.C., 2007). 

4

GAO, Best Practices: An Integrated Portfolio Management Approach to Weapon System 

Investments Could Improve DOD’s Acquisition Outcomes, GAO-07-388 (Washington, D.C.: 

March 30, 2007). 

Page 16 GAO-07-730T 
ramp up spending. During our review of DOD’s space cost estimating 

function, Air Force space cost estimating organizations and program 

offices said that they believed their cost-estimating resources were 

inadequate to do a good job of accurately predicting costs. Because of the

decline in in-house cost-estimating resources, space program offices and 

Air Force cost-estimating organizations are now more dependent on 

support contractors. At 11 of 13 program offices we informally surveyed,

contractors accounted for 64 percent of cost-estimating personnel. This 

reliance raised questions from the cost-estimating community about 

whether numbers and qualifications of government personnel were 

sufficient to provide oversight of and insight into contractor cost 

estimates. In addition to technical and cost estimating skills, DOD and 

GAO studies have also pointed to capacity shortfalls in program 

management. According to DOD’s Young Panel report, government 

capabilities to lead and manage the space acquisition process have 

seriously eroded, in part because of actions taken in the acquisition reform 

environment of the 1990s. During our 2005 review of program 

management, we surveyed DOD’s major weapon system program 

managers and interviewed program executive officers, who similarly 

pointed to critical skill shortages in program management, systems 

engineering, and software development. The Air Force and DOD recognize 

these shortfalls and are taking actions to address them, but these will take 

time to implement. It is important that in the interim, the Air Force identify 

and take steps to grow or retain skill sets that should be organic, such as 

highly specialized knowledge of certain military space technologies. 

During both our cost estimating and space system reviews, program 

officials noted that it can take several years for new technical staff to build 

knowledge and skills unique to military space. 

Our past work has also pointed to capacity shortfalls that go beyond 

workforce. For example, in 2006, we reported that cost estimation data

and databases are incomplete, insufficient, and outdated. And in our 

testimony last year, we pointed to limited opportunities and funding for 

space technologies, and the lack of low-cost launch vehicles. It is our 

understanding that the Air Force and DOD are working to address all of 

these shortfalls. Budget plans show, for example, an increase of nearly 

$11 million in funding for the space test program beginning in 2009— 

about 23 percent. 

Last, policies that surround space acquisition need to be further revised to

ensure best practices are instilled and sustained. For example, DOD’s 

space acquisition policy does not require that programs such as TSAT and

Space Radar achieve a TRL 6 or higher for key technologies before being 

Page 17 GAO-07-730T 
formally started (KDP B). Instead, it is suggested that TRL 6 be achieved at

preliminary decision review (KDP C) or soon after. Given that there are 

many pressures and incentives that are driving space and other weapon 

programs to begin too early and to drive for dramatic rather than 

incremental leaps in capability, DOD needs acquisition policies that ensure 

programs have the knowledge they need to make investment decisions 

and that DOD and Congress have a more accurate picture of how long and

how much it will take to get the capability that is being promised. In 

addition, although the policy requires that independent cost estimates be 

prepared by bodies outside the acquisition chain of command, it does not 

require that they be relied upon to develop program budgets. Officials 

within the space cost estimating community also believed that the policy 

was unclear in defining roles and responsibilities for cost estimators. We 

continue to recommend changes be made to the policy—not only to 

further ingrain the shift in thinking about how space systems should be 

developed, but to ensure that the changes current leaders are trying to 

make can be sustained beyond their tenure. 

In closing, we support efforts to instill best practices on programs like 

Space Radar and TSAT. They are critical to enabling DOD to break the 

cycle of space acquisition problems by matching resources to 

requirements before program start. We encourage DOD to build on this 

momentum by extending a best practice approach to its entire space 

portfolio. For newer efforts, such as AIRSS, this means reexamining 

requirements and alternative means of satisfying those requirements and 

clarifying the true purpose of the program. For current programs, such as 

SBIRS, this means continuing to track risks and dedicating resources 

necessary to mitigate those risks, leveraging management tools such as 

earned value management analyses, and finding ways to incentivize 

contractors to perform well. For the broader portfolio, this means 

ensuring programs have all the right resources to enable success. These 

include adequate levels of funding accompanied by short- and long-term 

investment plans, adequate skills and capabilities, as well as data, policy, 

and processes, accountability and leadership support. 

Page 18 GAO-07-730T 
Page 19 GAO-07-730T 

Appendix I: Scope and Methodology 

In preparing for this testimony, we relied on previously issued GAO 

reports on assessments of individual space programs, common problems 

affecting space system acquisitions, and DOD’s space acquisition policy.

We also relied on our best practices studies, which have examined 

pressures and incentives affecting space system acquisition programs, the 

optimal levels of knowledge needed to successfully execute programs, and 

complementary management practices and processes that have helped 

commercial and DOD programs to reduce costs and cycle time. In 

addition, we analyzed DOD’s Selected Acquisition Reports to assess cost 

increases and investment trends. We conducted our review between 

March 19 and April 13, 2007 in accordance with generally accepted 

government auditing standards. 
Page 20 GAO-07-730T 

Appendix II: Contacts and Acknowledgments

For in information, please contact Cristina Chaplain at 202-512-4841 or 

chaplainc@gao.gov. Individuals making contributions to this testimony 

include, Art Gallegos, Jeff Barron, Tony Beckham, Noah Bleicher, 

Greg Campbell, Maricela Cherveny, Claire Cyrnak, Jean Harker, and 

Rich Horiuchi. 
Table 1: Highlights of Recent Findings for Current and Planned Space Programs 

Description Recent findings

Current programs 

Space Based Infrared System High

(SBIRS-High): Ballistic missile

detection system being developed by 

the Air Force to replace its legacy 

detection system. 

Development

Start: October 1996 a

With unit cost increases of more than 315 percent, the program has undergone four NunnMcCurdy reviews. Total program costs have increased from $4 billion to more than $10 billion. 

The launch schedule has slipped at least 6 years; the first satellite is currently scheduled to 

launch not earlier than October 2008. Several program elements that were problematic before 

the restructure continue to pose risks for the program. SBIRS High faces challenges in 

software development and remains at risk of failing to meet cost and schedule goals. The total 

program cost is still not accounted for, in part because of deferred capabilities, and the 

contractor management reserve funds are not sustainable at the current rate of expenditure. 

In all likelihood, management reserve dollars will need to be increased. DOD officials recently 

began efforts to develop a viable competing capability in parallel with the SBIRS High 

program, known as the Alternative Infrared Satellite System (AIRSS). AIRSS is being 

designed in part to provide an alternative to the SBIRS GEO 3 satellite. DOD awarded 

contracts to Raytheon and Science Applications International Corporation for sensor assembly 

development for AIRSS. 

Global Broadcast Service (GBS):

Part of the overall military satellite 

communication architecture 

developed by the Air Force for oneway transmission of video, imagery, 

and other high-bandwidth information 

to the warfighter. 

Development

Start: November 1997 

Program funding increased by over $100 million for fiscal years 2008 through 2013 as a result 

of a decision to implement a new GBS architecture. The new architecture is to be 

implemented beginning in fiscal year 2008, and will use existing defense programs and 

computing centers to host GBS broadcast content. A revised acquisition program baseline is 

being developed to address the unit cost increase. GBS currently uses broadcast payloads on 

two Ultra-High Frequency Follow-on (UFO) satellites and three leased commercial satellite 

transponders, and starting in fiscal year 2008, the constellation of five Wideband Global 

SATCOM (WGS) satellites will also carry GBS. 

Evolved Expendable Launch

Vehicle (EELV): Acquisition of

commercial launch services and 

associated infrastructure from two 

competitive families of launch 

vehicles. 

Development

Start: October 1998 

The program cost has risen 79 percent, with a cost per unit increase of 135 percent, and 

triggered a Nunn-McCurdy breach. A chief reason for cost increases is a decline in the 

commercial launch market upon which the program’s business case was based. In December 

2006, Boeing and Lockheed Martin initiated a joint venture (United Launch Alliance, or ULA) 

that will combine the production, engineering, test, and launch operations associated with U.S. 

government launches of Boeing Delta and Lockheed Martin Atlas rockets. The EELV program 

office is budgeting for ULA savings (estimated at $150 million per year) that are to appear 

starting in fiscal year 2011. The cost per launch under the new Buy III acquisition strategy will 

likely be higher than under Buy I because the contractors will incur additional costs to allow 

the government to perform the necessary oversight not required under Buy I. The contractors 

will incur additional costs due to added program scope (mission assurance, assured access to 

space, and earned value management systems reporting) and necessary government 

oversight not required under Buy I. The program office is revising the life cycle cost estimate 

and acquisition program baseline to reflect the transition from Milestone II to Milestone III 

(production) and incorporate the Buy III strategy and contract structure. The expected 

completion is summer 2007. 

Appendix III 

Page 21 GAO-07-730T 
Description Recent findings

Global Positioning System (GPS) 

Modernization: A space-based radiopositioning system that nominally 

consists of a 24-satellite constellation 

providing navigation and timing data 

to military and civilian users 

worldwide. 

Development

Start: February 2000 

Total costs of the GPS II modernization program have increased by over 20 percent, largely 

due to adding requirements after the contract award and using a contracting approach that

gave the contractor for the IIF satellites and control system full responsibility for the life cycle 

of the program and allowed parallel development and production efforts. The program 

requested approximately $151 million in funds to be reprogrammed this year and did not 

award the contractor $21.4 million in 2006 available award fees. The first IIF satellite available 

for launch date has slipped about 2.5 years. The original program baseline had the available 

for launch date of December 2006, but DOD’s recent approval of a revised baseline now 

shows July 2009 as the latest available date. That baseline also calls for the procurement of 

only 12 IIF satellites, rather than the planned 19. The reduced number of IIF satellites and a 

possible increase in reprogrammed funding will increase unit cost. 

Wideband Global SATCOM (WGS):

Previously known as Wideband 

Gapfiller Satellites and originally 

conceived to augment the near-term 

bandwidth gap in warfighter 

communications needs. The Air Force 

is considering a three-block approach 

for fielding WGS, which is to provide 

high data-rate military satellite 

communication services. Block 1 

includes the first three satellites. 

Development

Start: November 2000 

Total program costs have increased by more than 80 percent—increasing from $1.10 billion in 

late 2000 to $2.01 billion in 2005 and reflect the purchase of two additional satellites. In 

October 2006, the Air Force awarded a $1.07 billion fixed price incentive fee with firm target 

contract to Boeing Satellite Systems for developing the Block 2 WGS satellites, or satellites 

4 and 5, with an unfunded option for WGS 6. Satellites 4 and 5 will have enhanced capacity 

for supporting airborne intelligence, surveillance, and reconnaissance users and will complete 

the currently planned WGS constellation. The program has made progress in integrating and 

testing the first satellite. For example, rework on improperly installed fasteners is complete,

and the contractor redesigned computers to correct data transmission errors. The program 

office conducted low-level signal testing associated with satellite launch and completed 

interoperability testing on the first satellite, in preparation for a June 2007 launch. 

Advanced Extremely High

Frequency (AEHF): Communications 

satellite system being developed by 

the Air Force to replace its legacy 

protected communications satellites. 

Development

Start: September 2001 

Unit cost has increased by 78 percent. In 2004, the program experienced cost increases of 

more than 15 percent, which required a Nunn-McCurdy notification to Congress. The program 

was restructured in 2004 when key cryptographic equipment was not delivered to the payload 

contractor in time to meet the launch schedule. Although the AEHF program has overcome 

hurdles that plagued the program through development, it still has to complete first-time 

integration and testing of a very complex satellite. The program expects to conduct thermal 

vacuum testing in the fall of 2007. Current plans are to meet full operational capability with

three AEHF satellites and the first Transformational Satellite Communication System (TSAT) 

satellite. 

Space Tracking and Surveillance 

System (STSS): Two satellites to be 

launched in 2007 as technology 

demonstrations for missile defense 

tests to assess whether missiles can 

be effectively tracked from space. 

Development

Start: Restructured April 2002

Total program costs have increased by 35 percent due to the addition of funds for designing 

and developing the program’s operational constellation. As of 2006, total program cost is 

estimated at almost $4.7 billion. The initial increment of this program, which started in 2002, 

is composed of two demonstration satellites that were built under the previous Space Based 

Infrared System-Low (SBIRS-Low) program. SBIRS-Low had incurred cost increases and

schedule delays and other problems that were so severe, DOD abandoned the effort. The 

program office completed thermal vacuum testing on the first demonstration satellite’s space 

vehicle. Test results show performance of the integrated space vehicle within specifications. 

However, the STSS program has experienced quality issues at the payload subcontractor, 

and technical difficulties encountered by the prime contractor during payload integration and 

testing contributed to STSS’s unfavorable cost and schedule variances of $163.7 million and 

$104.4 million respectively. A portion of the unfavorable cost and schedule variance is related 

to work that does not contribute to the demonstration satellite effort. The program office 

expects to launch both satellites in 2007. The Missile Defense Agency (MDA) plans to initiate 

an effort to build the next generation of satellites, and the program office intends to award a 

contract for the follow-on constellation in the fall. If the contract is awarded in the fall, the 

follow-on satellites are to be launched in 2016 or 2017, resulting in a potential coverage gap 

of 5 to 6 years. 

Page 22 GAO-07-730T 
Description Recent findings

National Polar-orbiting Operational 

Environmental Satellite System 

(NPOESS): Weather and 

environmental monitoring satellites 

being developed by the National 

Oceanic and Atmospheric 

Administration, the National 

Aeronautics and Space 

Administration, and DOD to replace 

those in use by the agencies. 

Development

Start: August 2002 

Unit costs increased by about 34 percent, triggering a Nunn-McCurdy review in January 2006. 

The revised program acquisition cost estimate is about $11.5 billion despite the reduction of 

total satellites. As part of the mandatory certification process, the program was restructured 

and will only include the development of four satellites, down from six, and the deletion of a 

critical sensor. However, the program now includes the development of a competition for a 

new replacement sensor that will coincide with the second developmental satellite. The launch 

of the first satellite has been delayed by at least 45 months from contract award, and is now 

planned for early 2013. 

Mobile User Objective System

(MUOS): Navy effort to develop a 

family of unprotected, narrow-band 

satellites that can support mobile and 

fixed-site users worldwide. 

Development

Start: September 2004 

In June 2004, DOD delayed the first MUOS satellite launch by 1 year to fiscal year 2010 due 

to a delay in awarding the development contract and to mitigate schedule risk. MUOS

development has become time-critical due to the failures of two UHF Follow-On satellites, one 

in June 2005 and another in September 2006. In June 2008, narrow-band communications

capabilities are expected to drop below those required and may remain degraded until the first 

MUOS satellite is available for operations in March 2010. According to the program manager, 

accelerating the MUOS schedule is not an option because of the production, integration and 

test activities that must take place prior to launch. DOD is examining options for addressing a 

communications capability gap. Additionally, development problems encountered under the 

Joint Tactical Radio System (JTRS) program have resulted in deferrals of requirements and 

the increased risk of underutilization of MUOS capabilities until MUOS-compliant JTRS 

terminals are fielded. According to the program office, MUOS must maintain its schedule each 

spacecraft will help mitigate the UFO availability gap until JTRS terminals are fielded. 

Planned programs 

Alternative Infrared Satellite 

System (AIRSS): The Air Force’s 

AIRSS effort is to provide a missile 

warning capability while also 

supporting missile defense, 

battlespace awareness, and technical 

intelligence. 

Planned development start date: 

Early third quarter fiscal year 2008 

As a result of the Nunn-McCurdy certification for the SBIRS High program, the Under 

Secretary of Defense for Acquisition, Technology, and Logistics directed the DOD Executive 

Agent for Space to plan for a new program for space-based infrared capabilities that will 

pursue an approach with acceptable technical risk and can ensure a launch availability date of 

fiscal year 2015. However, AIRSS is not being pursued as a “plan B” for the SBIRS program, 

as originally envisioned. Rather than seeking to maintain continuity of operations, the effort is 

focused on advancing capabilities under highly compressed time-frames. There is 

disagreement within DOD about the likelihood of meeting the target delivery date of 2015. 

Results from the on-orbit demonstration satellite will not be ready in time to fully inform the 

development of the first AIRSS satellite, and AIRSS officials plan to award system contracts 

before data from key on-orbit testing is completed. The latest cost estimate for the effort 

through fiscal year 2013 is over $3.3 billion; there is no full estimate because the system is still 

undefined. 

GPS III: Next generation of GPS 

satellites and a new control system 

(OCX) is to be acquired using the 

block approach. 

Planned development start date: 

First quarter of 2008 for satellites and 

fiscal year 2007 for OCX 

Initial plans were to develop a new version of GPS that would add advanced jam-resistant 

capabilities and provide higher- quality and more secure navigation capabilities. However, the 

first block of GPS III satellites will have baseline capabilities, with a launch date of 2013 for the 

first satellite; second and third blocks will introduce new capabilities. Ongoing cost increases 

and schedule delays with the control system for the GPS modernized satellites (IIR-M and IIF) 

resulted in reallocating requirements to the OCX. If the first GPS III does not launch by 2013, 

constellation sustainment will be at risk. 

Page 23 GAO-07-730T 
Description Recent findings

Space-Based Space Surveillance 

(SBSS): Optical sensing satellites 

being developed to search, detect, 

and track objects in Earth orbit. 

Planned development start date: 

Second quarter of fiscal year 2010 

The SBSS system is to replace an aging sensor on an orbiting research and development

satellite and improve the timeliness of data on objects in geosynchronous orbit. As currently 

planned, the initial block (Block 10) will consist of a single satellite and associated command, 

control, communications, and computer equipment. Subsequent SBSS efforts, referred to as 

Block 20, will focus on building a larger constellation of satellites to provide worldwide space 

surveillance of smaller objects in shorter timelines. In early 2006, the effort was restructured 

due to schedule delays and cost growth on Block 10 development efforts. The restructuring 

increased funding and schedule margin; streamlined the assembly, integration, and test plan; 

and relaxed requirements. The launch date for the Block 10 satellite has been delayed about 

18 months—to April 2009. Cost has increased by about $130 million over initial estimates. 

Space Radar (SR): Satellites being 

developed to provide global, 

persistent, all-weather, day- and -

night, intelligence, reconnaissance, 

and surveillance capabilities. 

Planned development start date: 

April 2009 

Program estimates for total funding range from $20 billion to $25 billion. In November 2006, 

the program revised its critical technologies, and although the technology readiness levels— 

or TRLs—are low (between TRL 3 and TRL 4), the program expects critical technologies to be 

mature when the product development phase begins in 2009. The program has strived to 

close knowledge gaps between requirements and resources in part by following an iterative 

approach, but key performance parameters are yet to be finalized. Furthermore, the program 

may not have planned enough time for design, integration, and production activities. For

example, program start to initial launch capability for SR is shorter than what DOD has 

achieved or estimated for some other complex satellite systems that have had major replan

activities. Although there is a cost sharing agreement in the FYDP, a long-term cost-share

agreement (beyond FYDP) between DOD and the intelligence community has not been 

established, which adds to uncertainty about DOD’s ability to afford expensive programs such 

as SR. SR has transferred its fiscal year 2008 budget estimate into the Defense 

Reconnaissance Support Activities budget, and it is now classified. 

Transformational Satellite 

Communications System (TSAT): 

Communication satellites being 

developed by the Air Force to employ 

advanced technologies in support of 

DOD’s future communication 

architecture. 

Planned development 

Start: First quarter fiscal year 2008 

The latest cost estimate for TSAT is $17.7 billion (adjusted for inflation), and the launch of the 

first satellite has slipped from 2011 to 2015. DOD rescinded approval to begin preliminary 

design activities and restructured the program to follow an incremental development 

approach. Early tests have revealed challenges in laser communication and limited analyses 

of the scalability of TSAT raises integration risks. Final test results of Phase II testing will not 

be available until late fiscal year 2007.The program may not have planned enough time for 

networking activities between TSAT and other DOD systems, and the schedule for the TSAT

Mission Operations System software code development may be too optimistic. Even with 

TSAT and other DOD satellites assets, gaps between bandwidth needs and resources are 

expected to continue to grow, requiring continued dependence on commercial bandwidth.

Program officials said they will need additional government personnel to carry out oversight 

and management functions in the long run. 

Source: GAO analysis of DOD data and previous GAO reports. 

a

The National Security Space Acquisition Policy specifies that key decision point B (also referred to as 

Milestone B by the DOD 5000 series or Development Start by GAO best practice work) is the official 

program initiation point when programs submit Selected Acquisition Reports (SAR) to Congress and 

develop a formal Acquisition Program Baseline (APB). 

(120644) 

Page 24 GAO-07-730T 
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