MISSILE DEFENSE

Mixed Progress in 

Achieving Acquisition 

Goals and Improving 

Accountability

Statement of Cristina T. Chaplain, Director

Acquisition and Sourcing Management

Testimony 

Before the Subcommittee on Strategic 

Forces, Committee on Armed Services, 

U.S. Senate

For Release on Delivery 

Expected at 2:30 p.m. EST

Wednesday, April 2, 2014

GAO-14-481T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-481T, a testimony 

Before the Subcommittee on Strategic Forces, 

Committee on Armed Services, U.S. Senate

April 2014

MISSILE DEFENSE

Mixed Progress in Achieving Acquisition Goals and 

Improving Accountability

Why GAO Did This Study

In order to meet its mission, MDA is 

developing a diverse group of BMDS 

components including (1) land-, sea-, 

and space-based sensors; (2) 

interceptors; and (3) a battle 

management system. These systems 

can be integrated in different ways to 

provide protection in various regions of 

the world. Since its inception in 2002, 

MDA has been given flexibility in 

executing the development and fielding 

of the ballistic missile defense system. 

This statement addresses recent MDA 

progress and the challenges it faces 

with its acquisition management. It is 

based on GAO’s March and April 2014 

reports and prior reports on missile 

defense.

What GAO Recommends

In April 2014, GAO recommended that 

MDA verify any changes needed for 

the SM-3 Block IB missile through flight 

testing before approving full 

production; retest the fielded GMD

interceptor to demonstrate 

performance and the effectiveness of 

changes; and take actions to improve 

the clarity of its schedule baselines. 

DOD partially concurred with the 

recommendation on the SM-3, stating 

that MDA will verify the efficacy of any 

modifications by testing and that the 

production decision will be vetted 

through the DOD process. DOD did not 

agree with the recommendation on 

GMD, stating that the decision to flight 

test the interceptor will be made by the 

Director, MDA, based on the judgment

of other stakeholders. GAO previously 

made recommendations on EPAA and 

testing. DOD generally concurred with 

them. GAO continues to believe all 

recommendations are valid.

What GAO Found

The Department of Defense’s (DOD) Missile Defense Agency (MDA) made 

progress in its goals to improve acquisition management, and accountability and 

transparency. The agency gained important knowledge for its Ballistic Missile 

Defense System (BMDS) by successfully conducting several important tests, 

including the first missile defense system-level operational flight test. Additionally, 

key programs successfully conducted developmental flight tests that 

demonstrated key capabilities and modifications made to resolve prior issues. 

MDA also made some improvements to transparency and accountability. For 

example, MDA improved the management of its acquisition-related efforts to 

deploy a missile defense system in Europe and MDA continued to improve the 

clarity of its resource and schedule baselines, which are reported to Congress for 

oversight. 

Although some progress has been made, MDA acquisitions are still high risk, due 

to inherent technical and integration challenges, tight timeframes, strategies that 

overlap development and production activities, and incomplete management 

tools. More specifically:

• MDA faces challenges stemming from higher-risk acquisition strategies that 

overlap production activities with development activities. While some 

concurrency is understandable, committing to production and fielding before 

development is complete often results in performance shortfalls, unexpected 

cost increases, schedule delays, and test problems. GAO found that the 

Aegis Ballistic Missile Defense SM-3 Block IB and Ground-based Midcourse 

Defense programs, which have already produced some of their assets before 

completing testing, discovered issues during testing that have affected or

continue to affect production. 

• Testing continues to fall short of goals. For example, the first ever systemlevel operational flight test failed to demonstrate true integration. MDA also 

combined, delayed, and deleted some tests, and eliminated test objectives in 

other tests. These challenges reduced the knowledge they had planned to 

obtain in order to understand the capabilities and limitations of the BMDS. 

• MDA has not yet fully developed or implemented a complete management 

strategy for synchronizing its efforts to deploy missile defense in Europe. As 

a result, it remains unclear how different European Phased Adaptive 

Approach (EPAA) efforts are aligned together and what constitutes success 

in delivering capabilities in Europe. 

• Issues with the content and presentation of resource and schedule baselines 

continue to limit their usefulness as management tools. For the fourth year, 

GAO has found that MDA’s cost estimates are unreliable for some BMDS 

elements and do not include certain costs for military services which may 

significantly understate total costs. Recently, Congress took steps to require 

that improvements be made to MDA’s cost estimates, so GAO did not make 

any new cost recommendations. MDA’s schedule baselines continue to be 

presented in a way that makes it difficult to assess progress. For instance, 

MDA’s schedule baselines identify numerous events, but provide little 

information on the events and why they are important.

View GAO-14-481T. For more information, 

contact Cristina Chaplain at (202) 512-4841 or 

chaplainc@gao.gov.
 

Page 1 GAO-14-481T 

Chairman Udall, Ranking Member Sessions, and Members of the 

Subcommittee

I am pleased to be here today to discuss the acquisition progress 

achieved and challenges that remain for the Department of Defense’s 

(DOD) Missile Defense Agency (MDA). Since 2002, MDA has been 

charged with developing and fielding the Ballistic Missile Defense System 

(BMDS), which is expected to be capable of defending the United States, 

deployed troops, friends, and allies against ballistic missiles of all ranges 

and in all phases of flight. It has spent over $98 billion to develop and 

deploy a diverse collection of land-, sea-, and space-based assets, and 

has requested an additional $38 billion for fiscal years 2014 through 2018 

to continue its efforts. Since its inception, MDA has been operating in an 

environment of tight time frames for delivering capabilities—first with a 

presidential directive in 2002 to field a limited capability by 2004 and then 

with a presidential announcement in 2009 to deploy U.S. missile defense 

in Europe. Looking forward, it will also have to operate in an environment 

of budgetary constraints, which necessitate tough trade-off decisions. As 

a result, MDA will require additional steps to reduce acquisition risk to 

ensure it provides warfighters with systems whose performance and 

capability is understood, and which are delivered on time and on budget.

This year, we continue to report that missile defense acquisitions are high 

risk. MDA has made tangible progress in increasing the complexity and 

sophistication of missile defense tests, enhancing plans and processes 

for deploying U.S. missile defense in Europe, and increasing the 

completeness and clarity of cost and schedule reporting to the Congress.

However, two key programs face challenges stemming from higher –risk 

acquisition strategies that overlap production activities and development 

activities; testing overall continues to provide less knowledge than initially 

planned and considerably more improvements are needed in both 

reporting to the Congress and in planning for deployment of missile 

defense in Europe. Many of the challenges MDA faces are tied to the 

technical and integration risks that are inherent in the capabilities MDA is 

seeking to deliver, while others are tied to tight time frames placed on 

MDA as well as changing demands. Nevertheless, MDA still has 

opportunities to take steps to reduce acquisition risk, increase 

transparency, and enhance oversight. MDA’s new Director is focused on 

doing so, though it may take time for his efforts to affect the MDA’s broad 

portfolio of acquisitions, particularly older programs that began without 

sound foundations for success.
 

Page 2 GAO-14-481T 

Since 2002, we have been mandated to prepare annual assessments of 

MDA’s progress toward its acquisition goals.1 Our report in response to 

this mandate was issued on Tuesday, April 1, 2014.2 This testimony 

highlights the findings from that report as well as relevant findings from 

other recent related reports.3 To assess MDA’s progress and related 

challenges, we examined the acquisition accomplishments of individual 

missile defense programs and supporting efforts that MDA is currently 

developing and fielding. We conducted this work in accordance with 

generally accepted government auditing standards. Those standards 

require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions

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

provides a reasonable basis for our findings and conclusions based on 

our audit objectives. Additional information on our scope and 

methodology is available in our issued reports.

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

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

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

characteristics, MDA is developing multiple systems that, when 

integrated, provide multiple opportunities to destroy ballistic missiles in 

flight for the strategic defense of the United States and regional defense 

of its deployed forces and allies. The BMDS architecture includes spacebased sensors, ground- and sea-based radars, ground- and sea-based 

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

and communications system to provide the warfighter with the necessary 

communication links to the sensors and interceptor missiles.

 

1

National Defense Authorization Act for Fiscal Year 2012, Pub. L. No. 112-81, § 232 

(2011) mandated our most recent report. Our reports include references to all prior 

legislation that mandated our work.

2

GAO, Missile Defense: Mixed Progress in Achieving Acquisition Goals and Improving 

Accountability, GAO-14-351 (Washington, D.C.: April. 1, 2014). 

3

GAO, Missile Defense: Precision Tracking Space System Evaluation of Alternatives, 

GAO-13-747R (Washington, D.C.: July 25, 2013); and Regional Missile Defense: DOD’s 

Report Provided Limited Information; Assessment of Acquisition Risks is Optimistic, 

GAO-14-248R (Washington, D.C.: Mar. 14, 2014). Currently, our work on Homeland 

Ballistic Missile Defense is ongoing.

Background
 

Page 3 GAO-14-481T 

Table 1 provides a brief description of some of the BMDS systems, which 

MDA refers to as elements, and programs included in this year’s 

assessment. More details can be found in our report.4

Table 1: Description of Selected Ballistic Missile Defense System (BMDS) Elements and Programs 

BMDS element/ program Description and key components 

Aegis Ballistic Missile Defense 

(BMD) with Standard Missile-3 

(SM-3) Block IB 

Aegis BMD is a sea-based system developed to defend against short-, medium-, and intermediaterange ballistic missiles in the middle part of their flight. MDA is developing several versions of 

missiles and associated ship-based software and processors. The SM-3 Block IB features additional 

capabilities over the previous SM-3 version to identify, discriminate, and track objects during flight. All 

sea-based Aegis BMD systems also include a shipboard radar and command and control systems. 

Aegis Ashore A land-based, or ashore, version of Aegis BMD initially using SM-3 Block IB missiles with plans to 

use various versions of SM-3 missiles and Aegis weapon system software as they become available. 

Command, Control, Battle 

Management, and 

Communications (C2BMC)

C2BMC is a globally deployed system that links and integrates individual missile defense elements. It 

also allows users to plan ballistic missile defense operations, see the battle develop, and manage 

networked sensors. 

Ground-based Midcourse 

Defense (GMD) System 

The GMD program is a ground-based defense system designed to defend the United States against 

a limited intermediate and intercontinental ballistic missile attack in the middle part of their flight. Key 

components include a ground-based interceptor consisting of a booster with a kill vehicle on top, as 

well as a communication system and a fire control capability. There are currently two versions of the 

kill vehicle: the initial design known as the Capability Enhancement-I (CE-I) and the upgraded design 

known as the Capability Enhancement-II (CE-II). 

Targets and Countermeasures MDA develops and manufactures highly complex targets that represent realistic threat scenarios 

during BMDS flight tests to aid other BMDS elements’ developmental efforts. MDA develops and 

manufactures a variety of targets including short-, medium-, intermediate-, and eventually 

intercontinental ranges. 

Terminal High Altitude Area 

Defense (THAAD)

THAAD is a mobile, ground-based missile defense system designed to defend against short- and 

medium-range ballistic missiles in the late-middle and end of their flight. THAAD is organized as a 

battery, which includes interceptors, launchers, a radar, a fire control and communications system, 

and other support equipment. 

Source: GAO analysis of MDA data.

When MDA was established in 2002, the Secretary of Defense granted it 

exceptional flexibility to set requirements and manage the acquisition of 

the BMDS in order to quickly deliver protection against ballistic missiles. 

This decision enabled MDA to rapidly deliver assets, but we have 

reported that it has come at the expense of transparency and 

accountability.5

 

4

Examples of key problems we have cited in reports in 

GAO-14-351

5

GAO, Missile Defense: Opportunity Exists to Strengthen Acquisitions by Reducing 

Concurrency, GAO-12-486 (Washington, D.C.: Apr. 20, 2012); Missile Defense: Actions 

Needed to Improve Transparency and Accountability, GAO-11-372 (Washington, D.C.: 

Mar. 24, 2011). 
 

Page 4 GAO-14-481T 

recent years and which continue to affect MDA’s acquisitions are 

highlighted below.

• MDA’s highly concurrent acquisition approach has led to significant 

cost growth, schedule delays, and in some cases, performance 

shortfalls. Concurrency is broadly defined as the overlap between 

technology development and product development or between 

product development and production. While some concurrency is 

understandable, committing to product development before 

requirements are understood and technologies are mature or 

committing to production and fielding before development is complete 

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

unexpected cost increases, schedule delays, and test problems. At 

the very least, a highly concurrent strategy forces decision makers to 

make key decisions without adequate information about the weapon’s 

demonstrated operational effectiveness, reliability, and readiness for 

production.6

• Testing disruptions have reduced the knowledge planned to be 

available to inform acquisition decisions and understand performance. 

For example, flight test failures disrupted MDA’s acquisitions of 

several components and forced MDA to suspend or slow production 

of three out of four interceptors, including the GMD interceptor and the 

Aegis BMD Standard Missile-3 Block IB (SM-3 Bock IB).

According to MDA officials, they have taken some steps 

to identify and track concurrency in their programs. However, high 

levels of concurrency adopted earlier for some programs persist 

today.

7

 

6

GAO, Missile Defense: Opportunity to Refocus on Strengthening Acquisition 

Management,

In the 

Ground-based Midcourse Defense (GMD) case, because MDA moved 

forward years ago with CE-I and CE-II interceptor production before 

completing its flight testing program, test failures have exacerbated 

disruptions to the program. Specifically, because the program has 

delivered approximately three-fourths of the interceptors for fielding, it 

faces difficult and costly decisions on how it will implement corrections 

from prior test failures. Additionally, after fielding these assets, the 

program has had to add tests that were previously not planned, in 

order to assess the extent to which prior issues were resolved. It also 

had to delay tests that were needed to understand the system’s 

capabilities and limitations.

GAO-13-432 (Washington, D.C.: Apr 26, 2013) and GAO-12-486. 

7

GAO-12-486 
 

Page 5 GAO-14-481T 

• MDA has been challenged to meet some of its goals for the European 

Phased Adaptive Approach (EPAA). During the past several years, 

MDA has been responding to a mandate from the President to 

develop and deploy new missile defense systems in Europe. This 

four-phase effort was designed to rely on increasingly capable 

missiles, sensors, and command and control systems to defend 

Europe and the United States. Each successive phase is expected to 

defend larger areas against more numerous and more capable threat 

missiles. DOD delivered the first phase, for short and medium range 

defense of Europe, in December 2011, and has been making 

progress in developing some systems to support future phases. 

However, in March 2013, the Secretary of Defense canceled two 

programs, planned for the fourth phase, thus eliminating the fourth 

phase, which was intended to provide additional layer for defense of 

the United States against intercontinental ballistic missiles. The 

cancelations were driven in part by affordability concerns, schedule 

delays and technical risks associated with these programs.8 Our 

previous work found similar issues with other EPAA efforts.9 We also 

found that MDA has lacked a comprehensive management approach 

to synchronize key EPAA activities.10

• Finally, MDA’s acquisition baseline reporting has provided limited 

insight into the cost and schedule progress of the BMDS. Due to the 

acquisition flexibilities it has been granted, BMDS’s entrance into 

DOD’s acquisition process is deferred, and laws and policies that 

generally require major defense acquisition programs to take certain 

steps at certain phases in the acquisition process will not apply until 

the program enters this process. For example, major defense 

acquisition programs are generally required to document key 

performance, cost, and schedule goals in an acquisition baseline at 

certain phases in the acquisition process; because BMDS has not 

progressed through threshold phases of the DOD acquisition process, 

 

8

The two programs canceled in fiscal year 2013 were the Standard Missile-3 Block IIB 

(SM-3 Block IIB) and Precision Tracking Space System (PTSS).

9

GAO-11-372, GAO12-486, and GAO-13-432. 

10GAO, Missile Defense: European Phased Adaptive Approach Acquisitions Face 

Synchronization, Transparency, and Accountability Challenges, GAO-11-179R 

(Washington, D.C.: Dec 21, 2010), and Ballistic Missile Defense: DOD Needs to Address 

Planning and Implementation Challenges for Future Capabilities in Europe, GAO-11-220 

(Washington, D.C.: Jan.26, 2011).
 

Page 6 GAO-14-481T 

this requirement is not yet applicable.11 To improve the transparency 

and accountability of BMDS development efforts, Congress has 

enacted legislation requiring MDA to establish some baselines.12 MDA 

reported baselines for several BMDS programs to Congress for the 

first time in its June 2010 BMDS Accountability Report (BAR). 

Specifically, MDA’s baselines, including resource and schedule 

baselines, are reported in the BAR and are updated annually. Since

2011, although progress has been made to improve the reporting, we 

have found issues affecting the usefulness of MDA’s acquisition 

baselines for oversight due to (1) a lack of clarity, consistency, and 

completeness; (2) a lack of high-quality supporting cost estimates and 

schedules; and (3) instability in the content of the baselines.13

Our work has recommended a number of actions that can be taken to 

address the problems we identified. Generally, we have recommended 

that DOD reduce concurrency and more closely follow knowledge based 

acquisition practices. We also made recommendations designed to 

reduce testing risk, and to improve schedule and cost reporting. DOD has 

generally concurred with our recommendations, and has undertaken 

some actions to reduce acquisition risk, and improve accountability and 

transparency.

 

1110 U.S.C. § 2435 requires an approved program baseline description for major defense 

acquisition programs before the program enters system development and demonstration 

(now known as engineering and manufacturing development), production and deployment, 

and full-rate production. The BMDS program meets the definition of a major defense 

acquisition program, which is defined in 10 U.S.C. § 2430 and implemented by DOD in its 

acquisition policy.

12Pub. L. No. 112-81, § 231(a)(2011)(codified as amended at 10 U.S.C. § 225) requires 

MDA to establish and maintain baselines for certain elements or major portions of 

elements prior to the product development phase (or its equivalent) and prior to production 

and deployment, and report these to the congressional defense committees annually. 

See also, e.g., Pub. L. No. 110-181, § 223(g), repealed by Pub. L. No. 112-81, § 231(b)

13GAO, Schedule Best Practices Provide Opportunity to Enhance Missile Defense Agency 

Accountability and Program Execution, GAO-12-720R (Washington, D.C.: Jul 19, 2012), 

GAO-14-351, GAO-13-432, GAO-11-372. 
 

Page 7 GAO-14-481T 

This year we found that MDA gained important knowledge about the 

BMDS system-level performance and individual elements by successfully 

executing several flight tests. We also found that MDA further improved 

some of its acquisition practices for managing the European Phased 

Adaptive Approach (EPAA) and improved the clarity of its resource and 

schedule baselines.

In April 2014, we reported that MDA made progress in demonstrating the 

systems’ capabilities by conducting the first system-level operational flight 

test in September 2013.14 This is a significant achievement because it is 

the first time that MDA conducted an operational flight test that involved 

multiple elements working simultaneously. The test involved warfighters 

from several combatant commands, and according to independent testing 

officials, recreated a potentially realistic scenario. During this test, MDA 

launched two medium-range ballistic missile targets, including its newly 

developed air-launched extended-medium range ballistic missile 

(eMRBM). Both the Aegis SM-3 Block IA and THAAD successfully 

intercepted their targets, demonstrating progress towards achieving an 

integrated BMDS. In addition, the Aegis BMD SM-3 Block IB and GMD 

programs successfully conducted developmental flight tests in 2013 that 

demonstrated key capabilities and modifications made to resolve prior 

issues. Specifically, the Aegis BMD SM-3 Block IB intercepted all targets 

in its last three flight tests. GMD also successfully conducted a nonintercept flight test of its CE-II interceptor, demonstrating the performance 

of a guidance component that MDA redesigned in response to a 

December 2010 flight test failure.

We also found that DOD improved the acquisition management of 

EPAA.15 In our first report on the subject in 2010, we assessed progress 

of EPAA acquisition planning against six key acquisition principles that 

synchronize acquisition activities and ensure accountability.16

 

14

We found 

that DOD has established testing and acquisition plans for technology 

GAO-14-351. 

15GAO-14-248R. 

16GAO-11-17R. 

MDA Made Progress 

on Testing and 

Further Improved 

Some Management 

Practices

Progress: MDA 

Demonstrates BMDS 

Capability Through Testing

Progress: EPAA 

Acquisition Management 

Improves
 

Page 8 GAO-14-481T 

development and engineering, and had begun work on identifying key 

stakeholders. This year, we found improvements in these areas. For 

example, DOD completed identifying EPAA stakeholders and in 2012 

issued a directive updating the warfighter role in testing and capability 

acceptance.

Lastly, in April 2014, we found that MDA continued to improve the clarity 

of its resource and schedule baselines, which are reported to Congress in 

its annual acquisition report called the BAR.17

• identifying the date of the initial baseline and, if applicable, the date 

when the initial baseline was most recently revised;

In its 2013 BAR, MDA 

continued to incorporate useful changes it made last year, and took some 

additional actions to improve the completeness and clarity of the BAR 

baselines by:

• explaining most of the significant cost and schedule changes from the 

current baseline estimates against both the estimates reported in the 

prior year’s BAR and the latest initial baseline; and

• making the baselines easier to read by removing cluttered formatting 

such as strikethroughs and highlights that made some of the events 

listed in past BARs unreadable.

Although MDA has taken some steps to improve its acquisitions, the 

agency continues to face several challenges that we have found in 

previous reviews. Specifically, it faces challenges stemming from highrisk acquisition practices, as well as challenges in BMDS testing, 

managing the development of EPAA capabilities, and reporting resource 

and schedule baselines that support oversight. Until MDA addresses 

these challenges, the agency and decision makers may not obtain the 

information needed to assess the capabilities of the BMDS or make 

informed acquisition and investment decisions.

While MDA has gained important insights through testing and taken some 

steps to improve management and increase transparency, it still faces 

challenges stemming from higher-risk acquisition strategies that overlap 

production activities with development activities. While some concurrency 

is understandable, committing to production and fielding before 

 

17GAO-14-351

MDA Continues to 

Face Testing and 

Acquisition 

Challenges

Challenge: Implementing 

Higher Risk Acquisition 

Programs
 

Page 9 GAO-14-481T 

development is complete often results in performance shortfalls, 

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

also create pressure to keep producing to avoid work stoppages. Our 

April 2014 report found that Aegis BMD SM-3 Block IB and GMD, which 

have already produced some of their assets before completing testing, 

discovered issues during testing that could affect or have affected 

production.18

• An interceptor failure during a September 2013 test of Aegis BMD 

SM-3 Block IB means that a key component, common to the deployed 

SM-3 Block IA, may need to be redesigned and flight tested. While the 

failure review is not yet complete, if a redesign is necessary, 

interceptors that were already produced may require retrofits. MDA 

continues to procure new SM-3 Block IBs while it investigates the 

cause of the failure.

Although both programs demonstrated progress in resolving 

previous issues, some of which stemmed from their concurrent 

acquisition strategies, testing revealed new issues. Specifically:

• A GMD CE-I interceptor failure in a July 2013 flight means that MDA

did not demonstrate the interceptor could perform under more 

challenging conditions than previously tested, further delaying 

knowledge of the interceptors performance capability. Additionally, the 

failure precluded confirmation that previous design changes improved 

performance, and delayed the upcoming test needed to resume 

production of CE-II interceptors. According to program officials, the 

failure review is not complete, but the failure could have been caused 

by a component common to both the CE-I and CE-II interceptors. It is 

still unclear what, if any, corrective action will be needed. The GMD 

program has had many years of significant and costly disruptions 

caused by production getting well ahead of testing and then 

discovering issues during testing. Consequently, even though some 

assets have already been produced, MDA has had to add tests that 

were previously not planned and delay tests that are necessary to 

understand the system’s capabilities and limitations. Additionally, 

since it has delivered approximately three-fourths of its interceptors, 

MDA faces difficult and costly decisions on how it will implement 

corrections from prior test failures. As a result of these development 

challenges, the GMD program will likely continue to experience 

delays, disruptions, and cost growth.

 

18GAO-14-351
 

Page 10 GAO-14-481T 

We made recommendations to address the ongoing issues with both 

systems in our April 2014 report.19 First, we recommended that the 

Secretary of Defense direct MDA’s Director to flight test any modifications 

that may be required to the Aegis SM-3 Block IB, before the Under 

Secretary of Defense, Acquisitions, Technology, & Logistics approves full 

production allowing the program to manufacture the remaining 

interceptors. Second, we also recommended testing the fielded GMD CEI interceptor in order to complete the original purpose of the failed test to 

(1) demonstrate the CE-I’s effectiveness against a longer range threat in 

more challenging conditions, and (2) confirm the effectiveness of previous 

upgrades as well as (3) confirm any new modifications to address the 

failure work as intended. DOD partially concurred with the 

recommendation on the Aegis SM-3 Block IB, stating that MDA will verify 

the efficacy of any modifications by testing and that the full production 

decision will be vetted through the DOD process. DOD did not agree with 

the recommendation on GMD, stating that the decision to flight test the 

interceptor will be made by the Director, MDA, based on the judgment of 

other stakeholders.

In this year’s reports, we found that testing has provided less knowledge 

than initially planned.20

• Operational Integration—Although the September 2013 operational 

flight test demonstrated layered defense between Aegis BMD and 

THAAD, the Director, Operational Test and Evaluation concluded that 

the test did not achieve true integration. Specifically there were 

system network issues, interoperability limitations, and component 

failures. For example, the test uncovered several issues with 

communication networks that are needed for interoperability between 

the elements. Interoperability is important because it can improve 

While MDA accomplished some testing goals, it 

experienced testing shortfalls, including failures of Aegis and GMD 

interceptors I mentioned above. The agency also combined, delayed, and 

deleted some tests, and eliminated test objectives in others. These 

changes reduced the knowledge expected to be available to understand 

the capabilities and limitations of the BMDS. Examples of key testing 

problems we cited in this year’s reports are:

 

19GAO-14-351

20GAO-14-351 and GAO-14-248R

Challenge: Gaining 

Expected Knowledge 

From Testing
 

Page 11 GAO-14-481T 

missile defense effectiveness and mitigate some limitations of the 

systems working alone.

• Test plan revisions continue to reduce the knowledge planned to be 

available to understand BMDS performance and inform acquisition 

decisions. In our March 2014 and April 2014 reports, we found that 

MDA combined, delayed, and deleted some tests, and eliminated test 

objectives in others. For example, MDA had to make some 

adjustments to its September 2013 operational flight test, reducing the 

number of targets from five to two and removing the participation of 

more mature elements. The agency also reduced the number of 

ground tests, which are used to assess performance and 

interoperability. While MDA added other ground tests to mitigate some 

effects of this reduction, they are smaller in scope and may not 

provide the same amount of data about how the systems work 

together.

Previously GAO has made recommendations to improve MDA’s ability to 

gather expected knowledge from testing. For example, we recommended 

that MDA add non-intercept tests for new targets and ensure that its test 

plan can absorb unforeseen events, like failures, in order to minimize 

disruptions to the test schedule.21 We also recommended that MDA 

synchronize its testing with development and delivery schedules for its 

assets.22 MDA generally concurred with our recommendations, but has 

not fully implemented them.

In March 2014, we found that while MDA made further improvements to 

the way it manages EPAA, it has yet to develop or implement a complete 

management strategy for synchronizing these efforts.23

 

21GAO13-432 and 

Specifically, MDA 

has not established an integrated schedule and has yet to completely 

define EPAA requirements. As a result, it remains unclear how different 

EPAA efforts are aligned together and what constitutes success in 

delivering EPAA capabilities. Considering that defensive capability 

planned for EPAA increasingly depends on integrated performance of the 

participating systems, an acquisition approach that identifies and 

GAO-11-372 

22GAO, Defense Acquisitions: Production and Fielding of Missile Defense Components 

Continue with Less Testing and Validation Than Planned, GAO-09-338 (Washington, 

D.C.: Mar 13, 2009). 

23GAO-14-248R

Challenge: Managing 

Development and 

Deployment of U.S. 

Missile Defense in Europe
 

Page 12 GAO-14-481T 

synchronizes all needed activities becomes increasingly important. While 

flexibility is a hallmark of the EPAA policy, it also increases the risk of 

delivering less capability than expected without demonstrating the actual 

performance of what is delivered.

In fact, our March 2014 report found concurrency, fragmentation of 

development activities, and delays for some originally planned 

capabilities. For example, we found that some systems may be delivered 

later than originally anticipated for integration activities. This reduces the 

time to discover and correct issues. We also found schedule delays that 

reduced both the capability MDA plans to deliver and the understanding 

of how that capability will perform. For example, although MDA delivered 

the first set of capability in December 2011, an upgrade originally planned 

for 2014, is now expected in 2015. Additionally, we found that MDA split 

the delivery of capability it initially planned to deliver in 2015 into two 

segments. It now plans to deliver what it calls “basic” or “core” capability 

in 2015 and the remainder in 2017. Similarly, MDA also realigned its 

plans for the capability it initially planned for 2018 into two segments—

designating a subset of originally planned capability to be delivered in 

2018, with the remainder in 2020 or later. Finally, MDA postponed its 

plans to conduct a formal system-level end-to-end assessment of EPAA 

capabilities because of concerns with data reliability associated with such 

tests. MDA is currently making investments to develop the tools it needs 

to improve the reliability of their system-level assessments, but they are 

expected to be ready after two-thirds of EPAA capabilities have been 

delivered.

We have previously made recommendations to improve management of 

EPAA, which are highlighted in this year’s report.24 Although DOD 

generally concurred with these recommendations, it has not yet fully 

implemented them.

 

24GAO-14-248R
 

Page 13 GAO-14-481T 

Although we found in March 2014 that MDA took some additional steps to 

improve the clarity of its resource and schedule baselines, this was the 

fourth year that we have found MDA’s resource baselines are not 

sufficiently reliable to support oversight.25

Since MDA first reported baselines in June 2010, we have found that the 

underlying information supporting its resource baselines does not meet 

best practice standards for high-quality cost estimates.

Additionally, issues with the 

content and presentation of the schedule baselines continue to limit the 

usefulness of the information for decision makers. According to agency 

officials, MDA is taking steps to improve the reliability of their resource 

baselines, however, until MDA completes these efforts, its baselines will 

not be useful for decision makers to gauge progress.

26

• MDA has not fully implemented its cost estimating handbook. In 

April 2013, we reported that, in June 2012, MDA completed an 

internal Cost Estimating Handbook, largely based on GAO’s Cost 

Estimating and Assessment Guide which, if implemented, could help 

address nearly all the shortfalls we identified. According to MDA 

officials, the agency is still in the process of applying that handbook to 

its cost estimates and therefore revised estimates for BMDS elements 

included in the 2013 BAR were not ready for our review.

MDA’s resource 

baselines reported in its 2013 BAR remain unreliable because the agency 

is still in the process of improving the quality of the cost estimates that 

support its baselines. For example,

• MDA has not obtained independent cost estimates of the 

reported baselines. Officials from DOD’s Office of the Director for 

Cost Assessment and Program Evaluation told us that although they 

examined costs for some BMDS elements over the last two years, 

they have not completed a formal independent cost estimate for a 

BMDS element since 2010.27

 

25GAO-14-351 

26GAO, GAO Cost Estimating and Assessment Guide, GAO-09-3SP (Washington, D.C.: 

March 2009).

27A formal independent cost estimate would be conducted or approved by DOD’s Office of 

the Director for Cost Assessment and Program Evaluation. It would be an independent 

cost estimate of the full life-cycle cost of the program and would include all costs of 

development, procurement, military construction, and operations and support. 

Challenge: Reporting 

Resource and Schedule 

Baselines that Support 

Oversight
 

Page 14 GAO-14-481T 

• MDA’s cost estimates reported in the 2013 BAR do not include 

operation and support costs funded by individual military 

services. In April 2013, we found that MDA was not reporting the 

operation and support costs borne by other military services and 

concluded that as a result MDA’s reported costs may significantly 

understate the full costs for some BMDS elements. We recommended 

MDA include these costs in its resource baselines reported in the 

BAR.28

In the National Defense Authorization Act for Fiscal Year 2014, Congress 

took steps to address concerns over MDA’s cost estimates.

DOD agreed that decision makers should have insight into the 

full costs of DOD programs, but the department stated that the BAR 

should only include content for which MDA is responsible. However, 

limiting the baseline reporting to only MDA costs precludes decision 

makers from having insight into all the costs associated with MDA’s 

weapons systems. We continue to believe that reporting these costs 

would aid both departmental and congressional decision makers as 

they make difficult choices of where to invest limited resources.DOD 

does not currently report the full costs for MDA’s missile defense 

acquisitions.

29

In April 2014, we also found that assessing MDA’s progress in achieving 

its schedule goals is difficult because MDA’s 2013 schedule baselines are 

not presented in a way that allows decision makers to understand or 

easily monitor progress.

As a result, 

we did not make any new recommendations regarding cost this year. 

However, we plan to continue to monitor MDA’s progress because 

establishing high-quality cost estimates that are accurate, credible, and 

complete is fundamental to creating realistic resource baselines.

30

 

28 Our previous and ongoing work notes the importance of including the long-term costs 

associated with operations and support in cost estimates for BMDS weapons systems (for 

example see 

For instance, MDA’s schedule baselines 

identify numerous events, but provide little information on the events and 

why they are important. In addition, MDA’s schedule baselines do not 

present any comparisons of event dates. Because MDA’s schedule 

baselines only present current event dates, decision makers do not have 

the ability to see if and how these dates have changed.

GAO-11-372). 

29Pub. L. No. 113-66, § 231. 

30 GAO-14-351
 

Page 15 GAO-14-481T 

We recommended that the Secretary of Defense direct the MDA Director 

to improve the content of the schedule baselines by highlighting critical 

events, explaining what these events entail and why they are important, 

and by presenting information in a format that allows identification of 

changes from the previous BAR as well as from the initial baseline. DOD 

concurred with our recommendation.

This concludes my statement, I am happy to answer any questions you 

have.

For future questions about this statement, please contact me at (202) 

512-4841 or chaplainc@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this statement. Individuals making key contributions to the work this 

statement is based on include David B. Best and Patricia Lentini, 

Assistant Directors; Susan C. Ditto; Aryn Ehlow; Wiktor Niewiadomski; 

John H. Pendleton; Karen Richey; Brian T. Smith; Jennifer Spence; 

Steven Stern; Robert Swierczek; Jay Tallon; Brian Tittle; and Hai V. Tran; 

Alyssa Weir; and Gwyneth B. Woolwine.

GAO Contact and 

Staff 

Acknowledgments

(121209)
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