GAO

United States General Accounting Office

Report to the Ranking Member 

Subcommittee on International Security, 

Proliferation, and Federal Services 

Committee on Governmental Affairs 

U. S. Senate

May 2000 MISSILE DEFENSE

Status of the National 

Missile Defense 

Program

GAO/NSIAD-00-131

Page 1 GAO/NSIAD-00-131 National Missile Defense

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-283281 Letr

May 31, 2000

The Honorable Daniel K. Akaka

Ranking Member, Subcommittee on International Security, 

Proliferation, and Federal Services

Committee on Governmental Affairs

United States Senate

Dear Senator Akaka:

The Department of Defense is developing a National Missile Defense 

system to protect the United States against a ballistic missile attack with 

weapons of mass destruction from “rogue” nations such as North Korea 

and Iran. Following a departmental review by the end of July 2000, the 

administration plans to decide on whether to deploy the system. Factors in 

this decision are likely to include the severity of the threat, the maturity of 

the technology involved, and affordability. The deployment decision is 

among the most important defense issues facing the nation this year.1

The National Missile Defense system, when fully deployed, would include 

(1) space- and ground-based sensors to provide early warning of attacking 

missiles and to initially identify and track them; (2) ground-based radars to 

further identify and track the threatening warheads and assess whether the 

system destroyed the warheads; (3) ground-based interceptors, each 

consisting of a three-stage booster and payload (called a kill vehicle) 

capable of guiding itself to collide with and destroy incoming warheads 

(a concept called hit-to-kill) outside the atmosphere; and (4) a battle 

management, command, control, and communications system. (See fig. 1.)

1

 The President’s budget submission for fiscal year 2001 contains a $1.9-billion request for 

the National Missile Defense system.
B-283281

Page 2 GAO/NSIAD-00-131 National Missile Defense

Figure 1: Representative National Missile Defense System

Source: Ballistic Missile Defense Organization.

Three levels of system capability are being planned. The Capability I 

system, which is approved for development by the Department of Defense, 

is designed to address a threat involving a few enemy missiles and simple 

countermeasures.2

 Capability II and III systems, which have not yet been 

approved for development, would evolve over time through the 

incorporation of additional interceptors at multiple defense sites, more 

sensors, and more advanced technologies to defend against more missiles 

with increasingly sophisticated countermeasures. 

In June 1998, we reported on the program’s funding requirements and 

schedule and technical risks. We found that even with increased funding 

for risk mitigation, technical and schedule risks were high.3

2

 Countermeasures refer to the enemy’s use of devices and techniques intended to impair the 

National Missile Defense system’s operational effectiveness.

3 National Missile Defense: Even With Increased Funding Technical and Schedule Risks Are 

High (GAO/NSIAD-98-153, June 1998).
B-283281

Page 3 GAO/NSIAD-00-131 National Missile Defense

This report responds to your request for assistance in monitoring changes 

in the National Missile Defense program since our June 1998 report. 

Specifically, you asked us to (1) identify programmatic changes and 

determine whether significant performance and schedule risks remain and 

(2) identify program officials’ efforts to control costs, the current program 

cost estimate, and the potential for cost increases. We also plan to report 

within the next month on the status of two other missile defense systems 

that are under development—the Navy Theater Wide and Patriot Advanced 

Capability-3 systems.4

Results in Brief To reduce risks, the Department of Defense has, since our June 1998 report, 

delayed initial fielding of the National Missile Defense system from fiscal 

year 2003 to 2005, delayed program decisions on the production of radars 

and interceptors, and increased funding for testing. Even with these 

programmatic changes, significant performance and schedule risks remain 

for several reasons.

• Developing a highly reliable hit-to-kill capability is a difficult technical 

challenge. In various missile defense programs, this capability has been 

demonstrated in about 30 percent of the attempted intercepts outside 

the atmosphere, and a panel of experts convened by the Department 

noted in 19985

 that the difficulty of performing the hit-to-kill capability 

very reliably had been underestimated. 

• Only 3 of the 19 planned intercept attempts are scheduled prior to the 

July 2000 deployment review. None of these attempts will expose the 

interceptor kill vehicle to the higher acceleration and vibration loads of 

the much faster, actual system booster. 

• Because the program has a very aggressive schedule, it is vulnerable to 

delays. Compared to the 15 years currently estimated to develop and 

field another missile defense system called the Theater High Altitude 

Area Defense system, the schedule to develop and field the National 

Missile Defense system covers only 8 years. The Department of Defense 

told the Congress last October that the development and deployment 

4

 The ship-based Navy Theater Wide system is designed to intercept enemy ballistic missiles 

while they are still above the Earth’s atmosphere. The ground-based Patriot Advanced 

Capability-3 system is designed to intercept such missiles within the atmosphere. 

5 Report of Panel on Reducing Risk in Ballistic Missile Defense Flight Test Programs, 

Institute for Defense Analyses, February 27, 1998 
B-283281

Page 4 GAO/NSIAD-00-131 National Missile Defense

schedule was compressed by at least 4 years because of the seriousness 

of the emerging missile threat from rogue nations.

To control costs, the Department of Defense has implemented several 

measures, including a process called “cost as an independent variable,” 

which sets realistic cost objectives and trades off the system’s performance 

and schedule to control costs. Departmental officials estimate that the 

savings from this process include $4.3 billion from early trade studies 

conducted by the prime contractor on alternative mixes of radars and 

interceptor locations. After incorporating the expected cost savings from 

these measures, the National Missile Defense program office estimated that 

the approved program would cost $36.2 billion over the life of the 

Capability I system or about $7.5 billion more than its 1999 estimate.6

 The 

cost increased mostly because of the decision to increase the number of 

interceptors and add flight tests, ground-test equipment, and a more 

capable radar facility. Estimated costs are likely to increase further 

because of the vulnerability to schedule delays. Using current spending 

rates the program office estimates that each month of delay would increase 

program costs by $124 million. The Department has not prepared official 

cost estimates for the Capability II and III systems. However, a decision to 

expand the program by funding a Capability II or III system would increase 

program costs by billions of dollars because it would involve more 

interceptors and more and better ground- and space-based elements.

In commenting on a draft of this report, the Department of Defense 

concurred with the information presented. (Written comments are 

provided in appendix I.)

Despite Program 

Restructuring in 1999, 

Significant 

Performance and 

Schedule Risks Remain

To reduce program risks, the Department of Defense (DOD) restructured 

the National Missile Defense (NMD) program in 1999 by lengthening the 

time available for system development and adding independent reviews. 

However, performance and schedule risks remain significant because of 

the technical challenge, test limitations, and the ambitious schedule. 

6

 All costs in this report are in then-year (adjusted for expected inflation) dollars.
B-283281

Page 5 GAO/NSIAD-00-131 National Missile Defense

NMD Program Restructured In April 1996, DOD changed the purpose of the NMD program from a 

“technology” readiness program intended to develop and mature 

technologies for possible use in a NMD system to a “deployment” readiness 

program. The deployment readiness program was designed to develop and 

demonstrate, by fiscal year 2000, an initial system with 20 interceptors that 

could be deployed by fiscal year 2003. In February 1998, a panel of highlevel military and civilian experts issued its report on risks associated with 

ballistic missile defense flight-test programs. The expert panel reported 

that the strategy of accepting a high level of risk to shorten the deployment 

schedule is more likely to cause program slips, higher costs, and even 

program failure. It found that the NMD program would benefit from 

immediate restructuring to reduce program risks. 

In January 1999, the Secretary of Defense restructured the NMD program. 

The Secretary established the objective of completing system development 

and fielding the 20 interceptors by the end of fiscal year 2005 (or about 

2 years later than previously planned), if so directed by the President. In 

addition, the Secretary established a DOD-level review—called the 

deployment readiness review—to assess the system and to recommend to 

the President whether it should be deployed. This review has been 

rescheduled from June 2000 to July 2000. Assuming an affirmative decision 

to deploy, DOD plans to decide on production of the NMD site radar and 

upgrading existing early warning radars in the second quarter of 2001 and 

production of the interceptors and associated equipment in the first quarter 

of 2003. If the administration decides that the system does not warrant 

deployment following the readiness review, DOD plans to continue 

technology development. 

Following the Secretary’s actions, the expert panel was reconvened to 

assess the impact of the program’s restructuring. In November 1999, the 

panel reported that while the restructuring reduced risk by providing more 

time for system development, program risks remain high.7

 To address these 

risks, it recommended expansion of the ground-testing capability and 

provision of additional kill vehicle components for testing and flight-test 

backups.

In the President’s budget submission for fiscal year 2001, DOD has 

requested funding to address the expert panel’s concerns. Specifically, it 

7 National Missile Defense Review, Institute for Defense Analyses, November 1999.
B-283281

Page 6 GAO/NSIAD-00-131 National Missile Defense

has requested funding for additional ground and flight testing following the 

deployment readiness review. In a separate action unrelated to the expert 

panel’s report, DOD expanded the Capability I system to meet a larger 

threat by planning to deploy 80 additional interceptors by 2007.

Performance and Schedule 

Risks Are Significant

Even with DOD’s risk reduction actions, the NMD program (1) remains a 

technically challenging program, (2) will undergo only a few of the planned 

flight tests before the deployment readiness review, (3) has increased 

performance risk because of flight-test restrictions, and (4) continues to 

have a very aggressive schedule. 

Hit-to-kill Capability Presents a 

Significant Technical Challenge

The challenge presented by the requirement for a highly reliable, very 

effective hit-to-kill capability is a difficult one. The NMD interceptor must 

hit an incoming target to destroy it. In addition, because the consequences 

of an attack can be so catastrophic, the NMD system is required to defend, 

with a very high probability of success, all 50 states against the threat of 

weapons of mass destruction carried aboard long-range ballistic missiles. 

Since 1983, various missile defense programs have attempted intercepts 

outside the atmosphere where the NMD system would be required to 

engage missiles. These missile defense programs have successfully 

demonstrated the hit-to-kill capability in 4 of 14 intercept attempts—about 

30 percent. While the 4 successful intercepts provide support for the hit-tokill concept, the 10 failed attempts raise questions about reliability. In its 

November 1999 report, the expert panel concluded that the NMD program 

office and contractor have continued to underestimate the challenge of 

reliably performing hit-to-kill intercepts. 

Only a Few of the Planned Flight 

Tests Are Scheduled Before the 

Deployment Readiness Review

As more testing is conducted, programmatic decisions tend to become less 

risky. At most, only 3 of the 19 planned intercept attempts will be 

completed prior to the July 2000 deployment readiness review. These three 

tests are described below. 

• Ιn October 1999, the first intercept attempt successfully hit the target. 

This flight test demonstrated the kill vehicle’s ability to locate the target, 

perform guidance maneuvers, and collide with the target. The October 

test was not designed to rely on actual NMD system elements such as 

sensors and a battle management, command, and control system to 

guide the interceptor into relatively close proximity to the target before 

the kill vehicle located it. Instead, data from test range instruments and 

the target directed the kill vehicle until it was close enough for the kill 

vehicle to autonomously locate the target and collide with it. 
B-283281

Page 7 GAO/NSIAD-00-131 National Missile Defense

• In January 2000, the second attempt did rely on actual ground- and 

space-based sensors and a battle management command and control 

system for interceptor guidance. Although these system elements 

reportedly worked well, this test failed to intercept its target because 

the kill vehicle device responsible for locating the target malfunctioned 

just seconds before the target intercept should have occurred. 

• The third intercept attempt is scheduled for early July 2000. This will be 

the first intercept attempt with all system elements, except the actual 

booster, integrated. Since this test occurs less than 1 month prior to the 

July 2000 readiness review, DOD’s Director, Operational Test and 

Evaluation, is concerned about the limited time available to fully assess 

test results. In a February 2000 memorandum to DOD’s Under Secretary 

of Defense for Acquisition, Technology and Logistics, the director stated 

that previous NMD flight-test reports have taken from 10 to 18 weeks to 

complete. According to the NMD program office’s Deputy Director, 

System Test and Evaluation, all that will be known by the deployment 

readiness review from the early July flight test is whether the intercept 

occurred and whether the system elements worked as expected. Little 

time will be available to analyze any causes for a less-than-expected 

level of system performance.

The two intercept attempts to date did not—and plans for the third 

intercept attempt do not—include the system’s actual booster. Instead, the 

tests used or will use a substitute booster, called the payload launch 

vehicle, to carry the kill vehicle outside the atmosphere and into relatively 

close proximity to the target. The actual three-stage booster reaches a 

much greater velocity than the two-stage payload launch vehicle. Hence, 

the actual booster places much higher acceleration and vibration loads on 

the kill vehicle. In its November 1999 report, the expert panel viewed the 

kill vehicle’s unproven ability to withstand loads from the actual system 

booster as a high risk to the program. According to the booster product 

manager, recent ground testing indicates that the kill vehicle can withstand 

the loads of the actual booster, but according to the manager, the analysis 

will not be complete until the kill vehicle is flown on the actual booster. 

However, the actual booster is not planned for use in an intercept attempt 

until early 2001.

The risk in deployment and production decisions tends to decrease as the 

amount of testing increases. More flight-test data will be available in the 

second quarter of 2001, when DOD plans to decide on producing sensors 

and upgrading radars, and considerably more data will be available in the 

first quarter of 2003, when it plans to decide on producing the interceptors. 
B-283281

Page 8 GAO/NSIAD-00-131 National Missile Defense

Other types of test data will also increase over time. The test data are 

intended to increasingly demonstrate the system’s ability to meet 

requirements and to validate the predictions of system performance based 

on the use of models and simulations. The type and numbers of primary 

tests completed over time are shown in figure 2.

Figure 2: Cumulative Tests by Calendar Year

Note: Ground tests consist of data processing hardware and software tested together to replicate the 

system. Risk reduction tests consist typically of reliability tests of offensive U.S. Air Force missiles, 

which are observed with NMD sensors. Booster tests are launches of the actual system boosters 

before their integration with other operating NMD elements. Beginning in 2001, all flight tests include 

the actual system booster.

Source: GAO, based on NMD program office data.
B-283281

Page 9 GAO/NSIAD-00-131 National Missile Defense

Performance Risks Are 

Increased Because of Flight-test 

Restrictions and Uncertainties 

Regarding the Threat 

A number of test limitations and uncertainties affect the program office’s 

ability to test, analyze, and evaluate system performance. 

• During testing, a target missile cannot be launched from a threat country 

such as North Korea and interceptors cannot fly from deployment sites 

yet to be constructed. Test targets are being launched westward from 

Vandenberg Air Force Base, California, while the ground-based 

interceptors are being launched eastward from the Kwajalein Missile 

Range in the Pacific Ocean. An actual enemy missile could approach the 

United States from several directions, depending on the attacking 

country. In its November 1999 report, the expert panel expressed 

concern over the limitations on test geometry.

• The early warning radar used during testing to track the target missile 

immediately after launch is located close to the launch point of the 

target missile. In an actual attack, the early warning radar would be 

alerted by space-based sensors, but would have to track an enemy 

missile flying toward the United States from thousands of miles away. A 

target missile launched near the early warning radar presents a large, 

easy target for the radar to detect. 

• The flight path of an enemy missile, which could be launched from 

several locations, determines the intercept angle between the target and 

the interceptor. However, in flight testing, safety restrictions limit the 

flight path of both the interceptor and target missile to a predictable 

point over a narrow band of the Pacific Ocean. 

• The NMD system could be required to engage more than one missile and 

fire more than one interceptor at each missile to destroy it. But the 

flight-test plans only include testing one interceptor against a single 

target missile. In his February 2000 Annual Report, the Director, 

Operational Test and Evaluation, identified this shortfall in flight testing 

as negatively impacting the NMD program’s ability to evaluate system 

performance. 

• The intercontinental ballistic missile threat posed by rogue nations is 

uncertain, which increases performance risk. The threat from Russia 

and China is better understood because both countries have deployed 

intercontinental ballistic missiles. North Korea tested a three-stage 

missile for the first time in August 1998, and according to the September 

1999 national intelligence estimate, could test a more capable version at 

any time.8

 The 1999 estimate also shows that Iran could test an 

8 Foreign Missile Developments and the Ballistic Missile Threat to the United States 

Through 2015, National Intelligence Council, September 1999.
B-283281

Page 10 GAO/NSIAD-00-131 National Missile Defense

intercontinental ballistic missile in the latter half of this decade. 

Similarly, the intelligence community is uncertain about what 

countermeasures a rogue nation would employ in attempting to defeat a 

missile defense system. In February 2000, DOD’s Director, Operational 

Test and Evaluation, expressed concern regarding the lack of 

information on the real threat. He stated that the NMD test program 

risks building test targets not representative of enemy missiles or 

countermeasures. 

To address the shortfalls in actual flight testing, the program office plans to 

use computer-based simulations. For example, the launch of enemy 

missiles and interceptors from other locations will be simulated, as will 

multiple interceptors engaging multiple targets. It is uncertain, however, 

whether the contractor’s primary simulation tool, called LIDS,9

 will be fully 

available for predicting performance in time for the deployment readiness 

review in July 2000. The prime contractor noted this concern in February 

2000, reporting a high risk of the LIDS tool not being available by the 

readiness review to support analysis of system effectiveness. If so, the 

contractor plans to use two other, older simulation tools. However, the 

agencies responsible for operational testing of the NMD system expressed 

concern that these older simulation tools produce overly optimistic results 

and would not accurately represent the system. In addition, according to 

the program office’s October 1999 status report, the LIDS simulation tool is 

the only model that can represent the integrated NMD system. 

The NMD system’s June 1999 Test and Evaluation Master Plan, which was 

approved by test agencies responsible for NMD operational assessments, 

attempts to address the threat uncertainties, including countermeasures, in 

future rogue nation ballistic missile deployments. The test plan calls for the 

use of flight-test targets designed to exhibit a variety of individual 

characteristics relating to specific threats, including countermeasures. 

Also, the NMD program office is exploring alternatives for development 

and validation of future targets.

9

 The NMD prime contractor is referred to as the lead system integrator and the simulation 

tool is called the Lead System Integrator Integrated Distributed Simulation, or LIDS.
B-283281

Page 11 GAO/NSIAD-00-131 National Missile Defense

NMD Acquisition Schedule 

Is Shorter Than Other 

Ballistic Missile Defense 

Acquisition Schedules

The NMD acquisition schedule requires completion of a large number and 

complex set of development and deployment activities in a relatively short 

amount of time. In restructuring the program in 1999, DOD added 2 years, 

allowing about 8 years for the development and deployment of the initial 

capability in 2005. However, the schedule is still much shorter than the 

schedules for most missile defense acquisitions. For example, the schedule 

is only about two-thirds as long as the Safeguard’s—the only ballistic 

missile defense system that has been fielded in the United States.10 The 

Theater High Altitude Area Defense system—currently under 

development—is projected to require 15 years before the system’s initial 

fielding. While the Patriot Advanced Capability-3 system is only a 

modification to the existing Patriot air defense system, this acquisition is 

projected to take over 7 years from the beginning of engineering and 

manufacturing development to initial fielding.11 In addition, technical 

problems are already eroding some of the additional time provided for 

NMD development. For example, the first attempt at intercepting a target 

was delayed about 4 months—from June to October 1999—because of 

multiple problems with the kill vehicle.

DOD acknowledges that even with the 2-year extension in the time 

available for development and deployment activities, the program’s 

schedule is risky. In October 1999, the Under Secretary of Defense for 

Policy testified before the House Armed Services Committee that the 

“[NMD] program remains risky but we accept this risk.” He stated that the 

development and deployment schedule was compressed by at least 4 years 

because of the seriousness of the emerging missile threat from rogue 

nations.

To accelerate the schedule, DOD abandoned the conventional four-phase 

acquisition process and implemented a tailored two-phase program 

structure. The conventional acquisition process is contrasted to the NMD 

program structure in figure 3.

10 Development of the Safeguard system components began in 1963 and the system’s single 

site at Grand Forks, North Dakota, achieved full operational capability in 1975. The system 

was decommissioned in 1976.

11 The Theater High Altitude Area Defense and Patriot Advanced Capability-3 systems are 

being developed to protect U.S. assets and forces deployed overseas and U.S. allies and 

friends from theater ballistic missile attacks. Theater ballistic missiles have shorter ranges 

than intercontinental ballistic missiles and are designed for use in major regional conflicts, 

such as Operation Desert Storm.
B-283281

Page 12 GAO/NSIAD-00-131 National Missile Defense

Figure 3: Conventional Acquisition Contrasted to NMD Program Structure

Source: GAO, based on NMD program office chart.

Flight tests scheduled over the next several months could be critical to the 

NMD schedule. The Under Secretary of Defense for Acquisition, 

Technology and Logistics, established criteria for the system’s passing the 

deployment readiness review scheduled for July 2000. One criterion is 

having two successful intercepts—one of which relies on the actual 

elements of the integrated NMD system. One of two intercept attempts, to 

date, has been successful. The third attempt is scheduled for early July 

2000. Based on the criteria, the award of a site construction contract can be 

made if one attempt was successful, but actual site construction—an event 

critical to the schedule—cannot begin until a second successful intercept. 

With the exception of the actual system booster, the third intercept attempt 

in July 2000 is expected to rely on elements of the integrated system.12

12 The actual system booster is not scheduled for flight testing as part of the entire system 

until 2001. It is not included as an actual element of the system for purposes of the 

deployment readiness review intercept criteria.
B-283281

Page 13 GAO/NSIAD-00-131 National Missile Defense

Despite Cost 

Reduction Efforts, 

Restructuring Has 

Increased Costs and 

Further Increases Are 

Likely

As discussed below, DOD has implemented over the course of the program 

several measures directed at controlling NMD program costs. 

• In April 1998, DOD awarded a 36-month, cost-plus-award-fee contract to 

Boeing North American to be the prime contractor, or lead system 

integrator. The prime contractor is accountable for completing 

development on each NMD element and integrating it into the overall 

system. The cost-plus-award-fee contract rewards superior performance 

in the following areas: system performance, schedule, cost, and program 

management. Award fee contracts provide the government with control 

over the contractor’s fee—unlike fixed-fee type contracts—and, 

therefore, more direct influence over the contractor’s efforts.

• The NMD program office established a “cost as an independent variable” 

process with its prime contractor. The process has the goal of setting 

realistic cost objectives and following through by making trade-offs 

between the system’s performance and schedule to achieve a balanced 

set of goals. This process involves management of risks to achieve cost, 

performance, and schedule objectives; devising appropriate measures 

for tracking progress in achieving cost objectives; and providing 

incentives for the reduction of operating and support costs of the fielded 

system. In December 1999, the prime contractor reported that 

development and implementation of the “cost as an independent 

variable” process has been slow. However, according to the program 

office, notable savings have resulted from “cost as an independent 

variable” trade-off evaluations. For example, early trade-off studies 

conducted by the prime contractor on alternative mixes of radars and 

interceptor locations reduced estimated costs over the life of the 

program by about $4.3 billion. 

• The “family of radars” acquisition strategy is being used to reduce costs 

related to the NMD X-band radar. The strategy emphasizes commonality 

of hardware and software components to satisfy radar requirements for 

both theater and national missile defense. The strategy was used to 

procure the NMD prototype X-band radar. Advances in technology that 

were not available for the prototype radar are planned for the deployed 

radar. In every case, contractor-suggested changes in radar design to 

incorporate advances in technology stem from the Theater High Altitude 

Area Defense system. The NMD program office maintains that reuse of 

Theater High Altitude Area Defense hardware and software saved 

months of design and production time and $80 million to $100 million in 

engineering and production costs. 
B-283281

Page 14 GAO/NSIAD-00-131 National Missile Defense

Since expanding the program in 2000, the program office estimates that the 

total NMD program cost is $36.2 billion compared to the $28.7 billion 

estimated in 1999 before the program expansion. The decision to field 

100 rather than 20 interceptors accounts for almost $2 billion of the cost 

increase. Other factors include the added costs for more flight tests, 

ground-test equipment, kill-vehicle hardware, and upgrades to the earlywarning radar facilities. Table 1 shows the total program cost for the 

Capability I system by appropriation type, selected fiscal years, and cost to 

complete.

Table 1: Total Cost of Capability I National Missile Defense System

Note: Costs are expressed in then-year dollars. Totals may not add due to rounding.

Source: Department of Defense.

Estimated costs are likely to increase further because the previously 

discussed risk factors could cause schedule delays. The costs of delay 

would depend on the reasons for and extent of the delay. However, using 

current spending rates, the program office estimates that each month of 

delay would increase NMD program costs by $124 million.

A decision to enhance the program by evolving to the Capability II and III 

systems would substantially increase the overall cost of the program. For 

example, the Capability II or III systems would require from four to nine 

X-band radars. Excluding all research and development costs, DOD 

estimates that one X-band radar will cost $1.2 billion over the life of the 

Capability I system. In addition, Capability III calls for at least 

Dollars in millions

Prior

years

Fiscal

year 2000

Fiscal

year 2001

Fiscal

year 2002

Fiscal

year 2003

Fiscal

year 2004

Fiscal

year 2005

Cost to

complete Total

Research, 

development, 

test, and 

evaluation

$4,717 $950 $1,740 $850 $792 $689 $681 $1,543 $11,962

Procurement 0 0 75 1,537 1,222 1,238 1,079 2,643 7,792

Military 

construction

10 15 102 192 127 38 15 0 498

Acquisition total 4,726 965 1,916 2,578 2,140 1,965 1,775 4,186 20,252

Operation and 

support

0 0 0 0 0 0 0 15,993 15,993

Total $4,726 $965 $1,916 $2,578 $2,140 $1,965 $1,775 $20,179 $36,245
B-283281

Page 15 GAO/NSIAD-00-131 National Missile Defense

250 interceptors at multiple sites. DOD’s cost estimate to produce, operate, 

and maintain 100 interceptors at a single site for the Capability I system is 

$3.9 billion. Table 2 shows differences in the three levels of NMD capability 

designed to counter larger and more sophisticated threats.

Table 2: Approved and Planned Levels of NMD Capability

Source: GAO, based on NMD program office data.

In April 2000, the Congressional Budget Office (CBO) reported DOD’s cost 

estimate for a Capability I system, given certain CBO adjustments, as 

$25.6 billion.13 Among the adjustments, CBO assumed a deployment period 

ending in 2015 rather than at the end of the NMD system’s projected 

deployment in 2026. Therefore, its estimate did not include procurement 

costs of $0.91 billion and operation and support costs of $8.99 billion for 

fiscal years 2016 through 2026. CBO also excluded $0.70 billion in prioryear costs. Accordingly, CBO cited a DOD estimate that is significantly less 

than the $36.2 billion estimate used in this report. 

Capability I (approved) Capability II (planned) Capability III (planned)

Threat A few missiles and simple 

countermeasures

Tens of missiles and 

sophisticated countermeasures

More missiles and more 

sophisticated countermeasures

Fielding 2005 through 2007 Undecided Undecided

Site elements

Interceptors 100 (single site) 100 (single site) 250 plus (multiple sites)

Ground-based X-band radars 1 (single site) 4 (1 each, at 4 sites) 9 (1 each, at 9 sites)

Ground-based early warning 

radars

5 (1 each, at 5 sites) 5 (1 each, at 5 sites) 6 (1 each, at 6 sites)

Space-based sensors Defense Support Program 

Satellites/Space-Based Infrared 

System-High Earth Orbit

Spaced-Based Infrared SystemHigh/Low Earth OrbitSpace-Based Infrared SystemHigh/Low Earth Orbit

Battle management, command, 

control, & communication

To link the elements with existing 

sensors

To link the elements with existing 

sensors

To link the elements with existing 

sensors

Cost $36.2 billion Not released by DOD Not released by DOD

13 The CBO also provided its independent estimates for Capability I, II, and III systems. See 

Budgetary and Technical Implications of the Administration’s Plan for National Missile 

Defense, Congressional Budget Office, April 2000. 
B-283281

Page 16 GAO/NSIAD-00-131 National Missile Defense

Agency Comments In commenting on a draft of this report, DOD concurred with our findings. 

It also suggested technical changes, which we incorporated as appropriate. 

DOD’s comments are reprinted in appendix I. 

Scope and 

Methodology

To identify changes in the program since our June 1998 report and 

determine whether significant performance and schedule risks remain, we 

interviewed program officials and other relevant sources within and 

outside DOD, including a representative from the Office of the Director, 

Operational Test and Evaluation. We obtained and analyzed documentation 

such as system requirements documents, intelligence summaries of the 

threat, test plans and results, and the results of program reviews conducted 

by outside agencies. To determine what program officials are doing to 

control cost risks, what the program currently costs, and whether cost 

increases are likely, we interviewed program cost officials and contractor 

representatives from Boeing North American. We also discussed the 

program cost estimate with other knowledgeable officials within DOD. We 

obtained and analyzed copies of budget documents such as budget 

decisions, the contract, contractor voucher costs, and an independent cost 

estimate. During the course of our review, we visited the Ballistic Missile 

Defense Office in Washington, D.C.; the National Missile Defense Joint 

Program Office in Arlington, Virginia; the U. S. Army National Missile 

Defense Ground Based Elements Office in Huntsville, Alabama; the 

National Air Intelligence Center at Wright-Patterson Air Force Base, Ohio; 

the Central Intelligence Agency, Langley, Virginia; the Defense Intelligence 

Agency, Washington, D.C.; the Space and Missile Defense Command in 

Huntsville, Alabama; the Naval Surface Warfare Center in Dalghren, 

Virginia; the Office of Science and Technology Policy in Washington, D.C.; 

the U.S. Army Test and Evaluation Command in Arlington, Virginia; the 

Cost Analysis Improvement Group, Strategic Systems in Washington, D.C.; 

the Institute for Defense Analyses in Alexandria, Virginia; and the Office of 

the Assistant Secretary of Defense (Acquisition, Technology, and Logistics), 

Strategic and Tactical Systems in Washington, D.C.
B-283281

Page 17 GAO/NSIAD-00-131 National Missile Defense

We did not assess the impact of the Anti-Ballistic Missile Treaty on the 

NMD program.14

We conducted our work from June 1999 through May 2000 in accordance 

with generally accepted government auditing standards.

As arranged with your staff, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

issue date. At that time, we plan to provide copies of this report to the 

Honorable William Cohen, Secretary of Defense; the Honorable Lewis 

Caldera, Secretary of the Army; the Honorable Jacob Lew, Director, Office 

of Management and Budget; and key committees of the Congress. We will 

make copies available to others upon request. 

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

me at (202) 512-4841. The major contributors to this report were Bob Levin, 

Stan Lipscomb, and Dayna Foster.

Sincerely yours,

Allen Li

Associate Director

Defense Acquisitions Issues

14 The Anti-Ballistic Missile Treaty between the United States and the former Soviet Union 

governs the conditions under which anti-ballistic missile systems and components can be 

developed and deployed. The Treaty as currently formulated would limit deployment to a 

single site near Grand Forks, North Dakota. The Secretary of Defense has directed that 

NMD development comply with the terms of the treaty, but according to the Secretary’s 

current annual report to the President and the Congress, actual deployment would require 

modifications to the treaty.
Page 18 GAO/NSIAD-00-131 National Missile Defense

Appendix I

Comments From the Secretary of Defense ApApenednxidexiIs

(707437) Letr
Ordering Information The first copy of each GAO report is free. Additional copies of 

reports are $2 each. A check or money order should be made out to 

the Superintendent of Documents. VISA and MasterCard credit 

cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address are 

discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

Orders by visiting:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders by phone:

(202) 512-6000

fax: (202) 512-6061

TDD (202) 512-2537

Each day, GAO issues a list of newly available reports and 

testimony. To receive facsimile copies of the daily list or any list 

from the past 30 days, please call (202) 512-6000 using a touchtone 

phone. A recorded menu will provide information on how to obtain 

these lists.

Orders by Internet:

For information on how to access GAO reports on the Internet, 

send an e-mail message with “info” in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web home page at: 

http://www.gao.gov

To Report Fraud, 

Waste, or Abuse in 

Federal Programs

Contact one:

• Web site: http://www.gao.gov/fraudnet/fraudnet.htm

• e-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering system)

United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. GI00