Testimony 

Before the Subcommittee on Tactical Air 

and Land Forces, Committee on Armed 

Services, House of Representatives

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 1:00 p.m. EST 

Thursday, April 1, 2004 DEFENSE ACQUISITIONS

The Army’s Future Combat 

Systems’ Features, Risks, 

and Alternatives 

Statement of Paul L. Francis, Director, 

Acquisition and Sourcing Management 

GAO-04-635T 
www.gao.gov/cgi-bin/getrpt?GAO-04-635T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Paul L. Francis 

at (202) 512-4841 or francisp@gao.gov. 

Highlights of GAO-04-635T, a testimony 

before the Subcommittee on Tactical Air 

and Land Forces, Committee on Armed 

Services, House of Representatives 

April 1, 2004

DEFENSE ACQUISITIONS 

The Army’s Future Combat Systems’ 

Features, Risks, and Alternatives 

The FCS concept is a new generation of manned and unmanned ground 

vehicles, air vehicles, and munitions, each of which taps into a secure 

network of superior combat information. These weapon systems are to be a 

fraction of the weight of current weapons yet as lethal and survivable. FCS’ 

lightweight and small size are critical to meeting the Army’s goals of 

deploying faster and being more transportable for big or small military 

operations. Rather than rely on heavy armor to withstand an enemy attack, 

FCS’ systems will depend on superior communications to kill the enemy 

before being detected. One of FCS’ key advantages is that it provides an 

architecture within which individual systems will be designed—an 

improvement over designing systems independently and making them 

interoperable after the fact. Another merit is that FCS is being acquired and 

developed with the full cooperation of the Army’s program managers, 

contractors, and the warfighter community. 

FCS is at significant risk for not delivering required capability within 

budgeted resources. Three-fourths of FCS’ needed technologies were still 

immature when the program started. The first prototypes of FCS will not be 

delivered until just before the production decision. Full demonstration of 

FCS’ ability to work as an overarching system will not occur until after 

production has begun. This demonstration assumes complete success—

including delivery and integration of numerous complementary systems that 

are not inherently a part of FCS but are essential for FCS to work as a whole. 

When taking into account the lessons learned from commercial best 

practices and the experiences of past programs, the FCS strategy is likely to 

result in cost and schedule consequences if problems are discovered late in 

development. 

Because it is promising to deliver unprecedented performance capabilities to 

the warfighter community, the Army has little choice but to meet a very high 

standard and has limited flexibility in cutting FCS requirements. Because the 

cost already dominates its investment budget, the Army may find it difficult 

to find other programs to cut in order to further fund FCS. To avoid 

unanticipated cost and schedule problems late in development, several 

alternatives can be considered: 

• add time to FCS’ acquisition schedule to reduce concurrent 

development; 

• take the time to develop and demonstrate the most critical capabilities 

first, such as the FCS network, then proceed with an acquisition 

program; and 

• focus on maturing the most critical technologies first, then bundle them 

in demonstrations of capabilities, and ensure that decision makers have 

attained the knowledge they need at critical junctures before moving 

forward. 

To become a more responsive and 

dominant combat force, the 

U.S. Army is changing its strategy 

from bigger and stronger weapons 

to faster and more agile ones. The 

Future Combat Systems (FCS)—

which the Army calls the “greatest 

technology and integration 

challenge ever undertaken”—is 

expected to meet the Army’s 

transformational objectives. 

Forming FCS’ backbone is an 

information network that links 

18 systems. Not only is FCS to play 

a pivotal role in the Army’s military 

operations, FCS and its future 

iterations are expected to 

eventually replace most of the 

Army forces. For FCS’ first 

developmental increment, the 

Army has set aside a 5 1⁄2-year 

timetable from program start 

(May 2003) until the initial 

production decision 

(November 2008). 

GAO was asked to testify about 

FCS’ key features, whether the 

program carries any risks, and, if 

so, whether there are alternatives 

for developing FCS capabilities 

with fewer risks. 
Page 1 GAO-04-635T Defense Acquisitions 

Mr. Chairman and Members of the Subcommittee: 

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

Future Combat Systems (FCS), a networked suite of weapons and other 

systems. FCS is the centerpiece of the Army’s plan to transform to a 

lighter, more agile, and more capable force. The Army plans to develop 

and field FCS in increments, but has only defined the first increment at 

this time. Increment 1 of FCS began system development and 

demonstration in May 2003. The production decision is currently planned 

for November 2008 and initial operational capability is slated for 

December 2010. This first increment will equip 15 brigade-sized Units of 

Action by 2020—about one third of the active force. Total costs to develop 

and produce Increment 1 are estimated at $92 billion, in then year dollars. 

The fiscal year 2004 budget provides $1.7 billon in research and 

development funds for FCS; the fiscal year 2005 budget requests a 

substantial increase to $3.2 billion. 

Today I would like to cover (1) the features of the FCS concept, (2) the 

prospects for delivering a capable FCS within budgeted cost and schedule, 

and (3) whether alternatives to the current FCS strategy are worth 

considering. 

FCS is an information network linking a suite of 18 new manned and 

unmanned ground vehicles, air vehicles, sensors, and munitions. They are 

to be a fraction of the weight of current weapons, yet are to be as lethal 

and survivable. Their lightweight and small size are critical to meeting the 

other goals of the Army’s future force: better responsiveness and 

enhanced sustainability. At a fundamental level, the FCS concept is 

replacing mass with superior information; that is, to see and hit the enemy 

first, rather than to rely on heavy armor to withstand an attack. The ability 

to make this leap depends on (1) the ability of the network to collect, 

process, and deliver vast amounts of information such as imagery and 

communications and (2) the performance of the individual systems 

themselves. This concept has a number of progressive features. It provides 

an architecture within which individual systems will be designed—an 

improvement over designing systems independently and making them 

interoperable after the fact. It includes sustainability as a design 

characteristic versus an afterthought. It has galvanized relationships 

between users and developers. It also shows a willingness on the part of 

Army leaders not to be bound by tradition. 

Summary 
Page 2 GAO-04-635T Defense Acquisitions 

FCS is at significant risk for not delivering required capability within 

budgeted resources. At conflict are the program’s unprecedented technical 

challenges and time. At a top level, the technical challenges are: 

development of a first-of-a-kind network, 18 advanced systems, 53 critical 

technologies, 157 complementary systems, and 34 million lines of software 

code. From a time standpoint, the Army allows only 5 1⁄2 years between 

program start and the production decision. This is faster than it has taken 

to develop a single major system, and FCS has several systems including 

the network, an Abrams replacement, a Bradley replacement, and a 

Crusader replacement. To meet this timetable, FCS is proceeding on a 

highly concurrent strategy that started with over 75 percent of critical 

technologies immature. Assuming everything goes as planned, the FCS 

program will begin production before all of its systems have been 

demonstrated. If all FCS elements are not ready at the production 

decision, Army plans still call for going forward with production and 

fielding. Based on the lessons learned from best practices and the 

experiences of past programs, FCS is susceptible to discovering costly 

problems in late development and early production, as the demonstration 

of multiple technologies, individual systems, the network, and the system 

of systems will all culminate. 

Alternatives to the current FCS strategy are worth considering in light 

of these risks. The tools normally employed to accommodate problems 

in weapon systems—relaxing performance requirements and adding 

funds—may not be available to the FCS program. The opportunity for 

making performance trade-offs on FCS is limited by the fact that it must be 

transportable by the C-130 aircraft yet be as lethal and survivable as the 

current force. On the funding side, the $92 billion cost estimate only 

allows for 14 of the 18 systems to be acquired, despite being based on an 

immature program and assuming full success in development. A modest 

delay late in development could cost $5 billion; a similarly modest 10-

percent increase in production cost would amount to $7 billion. Providing 

more money on this scale after problems have occurred may not be 

feasible given the fiscal pressures the government in general—and DOD 

in particular—faces. Several alternatives that would enable a less 

concurrent—and more predictable—strategy are possible, if acted upon 

early. Alternatives should have several things in common: building more 

knowledge before commitments like production are made; preserving the 

advantages of the FCS concept, such as defining an architecture to guide 

the design of individual systems; and the ability to spin off mature 

technologies to existing systems. 
Page 3 GAO-04-635T Defense Acquisitions 

The Army plans to develop and acquire FCS in at least two increments but, 

according to program officials, only the first one has been defined at this 

point. The first increment is an information network linking a new 

generation of 18 manned and unmanned ground vehicles, air vehicles, 

sensors, and munitions. The manned ground vehicles are to be a fraction 

of the weight of current weapons such as the Abrams tank and Bradley 

Fighting Vehicle, yet are to be as lethal and survivable. At a fundamental 

level, the FCS concept is replacing mass with superior information; that is, 

to see and hit the enemy first, rather than to rely on heavy armor to 

withstand attack. The ability to make this leap depends on (1) the ability 

of the network to collect, process, and deliver vast amounts of information 

such as imagery and communications and (2) the performance of the 

individual systems themselves. The concept has a number of progressive 

features. For example, it provides an architecture within which individual 

systems will be designed—an improvement over designing systems 

independently and making them interoperable after the fact. 

A decade after the cold war ended, the Army recognized that its combat 

force was not well suited to perform the operations it faces today and is 

likely to face in the future. The Army’s heavy forces had the necessary 

firepower but required extensive support and too much time to deploy. 

Its light forces could deploy rapidly but lacked firepower. To address this 

mismatch, the Army decided to radically transform itself into a new 

“Future Force.” 

The Army expects the Future Force to be organized, manned, equipped, 

and trained for prompt and sustained land combat, requiring a responsive, 

technologically advanced, and versatile force. These qualities are intended 

to ensure the Future Force’s long-term dominance over evolving, 

sophisticated threats. The Future Force will be offensively oriented and 

will employ revolutionary operational concepts, enabled by new 

technology. This force will fight very differently than the Army has in the 

past, using easily transportable lightweight vehicles, rather than traditional 

heavily armored vehicles.1

 A key characteristic of this force is agility. Agile 

forces would possess the ability to seamlessly and quickly transition 

among various types of operations from support operations to warfighting 

and back again. They would adapt faster than the enemy, thereby denying 

 1

 As an interim step toward transformation, the Army is organizing medium weight, rapidly 

deployable brigades around 19-ton Stryker armored vehicles. 

Army Transformation 

and the FCS Program 

Army Transformation 
Page 4 GAO-04-635T Defense Acquisitions 

it the initiative. In an agile force, commanders of small units may not have 

the time to wait on higher command levels; they must have the authority 

and high quality information at their level to act quickly to respond to 

dynamic situations. 

Thus, to be successful, the transformation must include more than new 

weapons. The transformation is extensive, encompassing tactics and 

doctrine, as well as the very culture and organization of the Army. 

Against that backdrop, today, I will focus primarily on the equipment 

element of the transformation, represented by FCS. 

FCS will provide the majority of weapons and sensor platforms that 

comprise the new brigade-like modular units of the Future Force known 

as Units of Action. Each unit is to be a rapidly deployable fighting 

organization about the size of a current Army brigade but with the combat 

power and lethality of a current (larger) division. The Army also expects 

FCS-equipped Units of Action to provide significant war-fighting 

capabilities to the Joint Force. 

The first FCS increment will ultimately be comprised of an information 

network and 18 various systems—which can be characterized as manned 

ground systems, unmanned ground systems, and unmanned air vehicles. 

While some systems will play a larger role in the network than others, the 

network will reside in all 18 systems, providing information to them as 

well as taking information from them. Figure 1 shows FCS Increment 1. 

The FCS Solution 
Page 5 GAO-04-635T Defense Acquisitions 

Figure 1: Basic Composition of FCS Increment 1 

The Joint Tactical Radio System and the Warfighter Information 

Network-Tactical are two programs outside of FCS that integrate all the 

various systems and soldiers together. As such, their development is 

crucial to the FCS network. The communications backbone of the Unit of 

Action will be a multi-layered mobile network centered on the Joint 

Tactical Radio System. According to program officials, all soldiers and 

FCS vehicles, including the unmanned vehicles, will employ these radios. 

Beyond being the primary communications component within the unit, the 

Joint Tactical Radio System also will assist with communications beyond 

the unit, to assets at higher echelons. Communications with those 
Page 6 GAO-04-635T Defense Acquisitions 

echelons will be enabled through the Warfighter Information 

Network-Tactical, which provides the overarching network background 

for the FCS network and is expected to conform to DOD’s interoperability 

and network architecture directives. 

Increment 1 began system development and demonstration in May 2003. 

Currently, only the network and 14 systems are funded. The remaining 

4 systems will be introduced as funding becomes available. Current 

estimates are for the acquisition of Increment 1 to cost $92 billion (thenyear dollars) and to achieve an initial operational capability by the end of 

2010. Although the Under Secretary of Defense approved the Army’s 

request to begin the system development and demonstration phase, he 

directed the Army to prepare for a full program review in November 2004. 

Increment 1 is expected to replace roughly one-third of the active force 

through about 2020, when the first 15 Units of Action are fielded. 

According to program officials, the Army has not yet defined future FCS 

increments. However, it is important to note that the Army expects to 

eventually replace most of its current forces with the FCS. Much of the 

current Army heavy force is expected to remain in the inventory—needing 

to be maintained and upgraded—through at least 2020. We recently 

reported2

 that costs of maintaining legacy systems would be significant, 

but funding is likely to be extremely limited, particularly given competition 

for funds from transformation efforts. We concluded that maintaining 

legacy equipment will likely be a major challenge, necessitating funding 

priorities to be more clearly linked to needed capability and to long-range 

program strategies. 

The Army intends to employ a single Lead Systems Integrator throughout 

the completion of Increment 1. The Lead System Integrator will be the 

single accountable, responsible contractor to integrate FCS on time and 

within budget. It will act on behalf of the Army throughout the life of the 

program to optimize the FCS capability, maximize competition, ensure 

interoperability, and maintain commonality in order to reduce life-cycle 

cost. In order to quickly transition into system development and 

demonstration and to manage the multitude of tasks associated with FCS 

 2

 See U.S. General Accounting Office, Military Readiness: DOD Needs to Reassess 

Program Strategy, Funding Priorities, and Risks for Selected Equipment, GAO-04-112

(Washington, D.C.: Dec. 19, 2003). 
Page 7 GAO-04-635T Defense Acquisitions 

acquisition, the Army chose the Lead System Integrator approach to 

capitalize on industry’s flexibility. 

The Army wants the FCS-equipped Unit of Action to have a number of 

features. These can be described in four characteristics: lethality, 

survivability, responsiveness, and sustainability. The Unit of Action is to 

be as lethal as the current heavy force. It must have the capability to 

address the combat situation, set conditions, maneuver to positions of 

advantage, and close with and destroy enemy formations at longer ranges 

and greater precision than the current force. To provide this level of 

lethality and reduce the risk of detection, FCS must provide high 

single-shot effectiveness. To be as survivable as the current heavy force, 

the Unit of Action is primarily dependent upon the ability to kill the enemy 

before being detected. This depends on unit’s ability to see first, 

understand first, act first, and finish decisively. The individual FCS 

systems will also rely on a layered system of protection involving several 

technologies that lowers the chances of a vehicle or other system being 

seen by the enemy; if seen, lowers the chances of being acquired; if 

acquired, lowers the chances of being hit; if hit, lowers the chances of 

being penetrated; and finally, if penetrated, increases the chances of 

surviving. To be responsive, Units of Action must be able to rapidly deploy 

anywhere in the world, be rapidly transportable via various transport 

modes, and be ready to fight upon arrival. To facilitate rapid 

transportability, FCS vehicles are being designed to match the weight and 

size constraints of the C-130 aircraft. The Unit of Action is to be capable 

of sustaining itself for periods of 3 to 7 days depending on the level of 

conflict. This sustainability requires subsystems with high reliability and 

low maintenance, reduced demand for fuel and water, highly effective 

offensive weapons, and a fuel-efficient engine. 

Meeting all these requirements will be a difficult challenge because the 

solution to meet one requirement may work against another requirement. 

For example, the FCS vehicles’ small size and lighter weight are factors 

that improve agility, responsiveness, and deployability. However, their 

lighter weight precludes the use of the traditional means to achieve 

survivability—heavy armor. Instead, the FCS program must use 

cutting-edge technology to develop systems, such as an active protection 

system, to achieve survivability. Yet such technology cannot be adopted if 

it impairs the new systems’ reliability and maintainability. Weight, 

survivability, and reliability will have to be kept in balance. 

The Requirements 

Challenge 
Page 8 GAO-04-635T Defense Acquisitions 

The essence of the FCS concept itself—to provide the lethality and 

survivability of the current heavy force with the sustainability and 

deployability of a force that weighs a fraction as much—has the intrinsic 

attraction of doing more with less. The concept has a number of merits, 

which demonstrate the Army’s desire to be proactive in its approach to 

preparing for potential future conflicts and its willingness to break with 

tradition in developing an appropriate response to the changing scope of 

modern warfare. 

• If successful, the architecture the program is developing will leverage 

individual capabilities of weapons and platforms and will facilitate 

interoperability and open systems. This architecture is a significant 

improvement over the traditional approach of building superior individual 

weapons that must be netted together after the fact. Also, the system of 

systems network and weapons could give acquisition managers the 

flexibility to make best value trade-offs across traditional program lines. 

• This transformation of the Army, both in terms of operations and in 

equipment, is underway with the full cooperation of the Army warfighter 

community. In fact, the development and acquisition of FCS are being 

done using a collaborative relationship between the developer (program 

manager), the contractor, and the warfighter community. For example, the 

developer and the warfighter are using a disciplined approach to 

decompose the Unit of Action Organizational and Operational Plan and the 

FCS Operational Requirements Document into detailed specifications. 

This work is defining in detail the requirements for a Unit of Action to 

operate in a network-centric environment. This approach is in line with 

best practices to ensure that specific technical issues are understood 

before significant design work is done.3

• The Army has established sustainability as a design characteristic equal to 

lethality and survivability. This is an improvement over past programs, 

such as the Apache helicopter and the Abrams tank. These programs did 

not emphasize sustainability, to less than desirable results, including 

costly maintenance problems and low readiness rates, which persisted 

even after the systems were fielded. FCS’ approach of emphasizing 

sustainability from the outset should allow operating and support costs 

and readiness to be evaluated early in development, when there is a 

 3

 Over the past 8 years, we have completed a number of reviews of best practices for 

managing new product developments. For a broader discussion on best practices in 

relation to user or warfighter involvement, see U.S. General Accounting Office, Best 

Practices: Better Matching of Needs and Resources Will Lead to Better Weapon System 

Outcomes, GAO-01-288 (Washington, D.C.: Mar. 8, 2001). 

Merits of the Concept 
Page 9 GAO-04-635T Defense Acquisitions 

greater chance to affect those costs positively. This approach is also in line 

with best practices.4

The FCS program has yet to—and will not—demonstrate high levels of 

knowledge at key decision points. It thus carries significant risks for 

execution. At conflict are the program’s technical challenges and limited 

time frame. The Army began system development and demonstration in 

May 2003 and plans to make its initial FCS production decision in 

November 2008—a schedule of about 5 1⁄2 years. Seventy-five percent of 

the technologies were immature at the start of system development and 

demonstration and some will not be proven mature until after the 

scheduled initial production decision. First prototypes for all 14 funded 

systems and the network will not be demonstrated together until after the 

production decision and will serve both as technology demonstrators 

and system prototypes. They will represent the highest level of FCS 

demonstration before production units are delivered, as no productionrepresentative prototypes are planned. Even this level of demonstration 

assumes complete success in maturing the technologies, developing the 

software, and integrating the systems—as well as the delivery and 

integration of the complementary systems outside of FCS. While the Army 

is embarking on an impressive array of modeling, simulation, emulation, 

and other demonstration techniques, actual demonstration of end items is 

the real proof, particularly for a revolutionary advance, such as FCS. 

If the lessons learned from best practices and the experiences of past 

programs have any bearing, the FCS strategy is susceptible to “late cycle 

churn,” a phrase used by private industry to describe the discovery of 

significant problems late in development and the attendant search for fixes 

when costs are high and time is short. FCS is susceptible to this kind of 

experience as the demonstration of multiple technologies, individual 

systems, the network, and the system of systems will all culminate late in 

development and early production. 

In the Army’s own words, FCS is “the greatest technology and integration 

challenge the Army has ever undertaken.” It intends to develop a complex, 

 4

 See U.S. General Accounting Office, Best Practices: Setting Requirements Differently 

Could Reduce Weapon Systems’ Total Ownership Costs, GAO-03-57 (Washington, D.C.: 

Feb. 11, 2003). 

FCS at Significant 

Risk of Not Delivering 

Required Capability 

Within Estimated 

Resources 

FCS Is an Unprecedented 

Technical Challenge 
Page 10 GAO-04-635T Defense Acquisitions 

family of systems–an extensive information network and 14 major weapon 

systems—in less time than is typically taken to develop, demonstrate, and 

field a single system. The FCS Acquisition Strategy Report describes this 

scenario as a “dramatically reduced program schedule (which) introduces 

an unprecedented level of concurrency.” Underscoring that assessment is 

the sheer scope of the technological leap required for the FCS. For 

example: 

• A first-of-a-kind network will have to be developed. 

• The 14 major weapon systems or platforms have to be designed and 

integrated simultaneously and within strict size and weight limitations. 

• At least 53 technologies that are considered critical to achieving critical 

performance capabilities will need to be matured and integrated into the 

system of systems. 

• The development, demonstration, and production of as many as 

157 complementary systems will need to be synchronized with FCS 

content and schedule. This will also involve developing about 100 network 

interfaces so the FCS can be interoperable with other Army and joint 

forces. 

• An estimated 34 million lines of software code will need to be generated 

(5 times that of the Joint Strike Fighter, which had been the largest 

defense undertaking in terms of software to be developed). 

Some of these technical challenges are discussed below. 

The overall FCS capabilities are heavily dependent on a high quality of 

service—good information, delivered fast and reliable—from the network. 

However, the Army is proceeding with development of the entire FCS 

system of systems before demonstrating that the network will deliver as 

expected. Many developmental efforts will need to be successful for the 

network to perform as expected. For each effort, a product—whether 

software or hardware—must first be delivered and then demonstrated 

individually and collectively. The success of these efforts is essential to the 

high quality of service the network must provide to each Unit of Action. In 

some cases, an individual technology may be a linchpin—that is, if it does 

not work, the network’s performance may be unacceptable. In other cases, 

lower than expected performance across a number of individual 

technologies could collectively degrade network performance below 

acceptable levels. Some key challenges are highlighted below: 

• System of Systems Common Operating Environment is a software layer 

that enables interoperability with external systems and manages the 

distribution of information and software applications across the 

Network Development 

Challenges 
Page 11 GAO-04-635T Defense Acquisitions 

distributed network of FCS systems. According to program officials, the 

System of Systems Common Operating Environment is on the critical path 

for most FCS software development efforts. 

• The Joint Tactical Radio System and the Warfighter Information 

Network-Tactical, and several new wideband waveforms—all in 

development—are essential to the operation of the FCS network. It is vital 

that these complementary developments be available in a timely manner 

for the currently planned demonstrations of the network. 

• The information-centric nature of FCS operations will require a great deal 

of bandwidth to allow large amounts of information to be transmitted 

across the wireless network. However, the radio frequency spectrum is a 

finite resource, and there is a great deal of competition and demand for it. 

An internal study revealed that FCS bandwidth demand was 10 times 

greater than what was actually available. As a result, the program initiated 

a series of trade studies to examine and reassess bandwidth requirements 

of various FCS assets. The results of these studies may have a dramatic 

effect on the FCS network. The Army has already made a number of 

changes to the network design to use available bandwidth more efficiently 

and to reduce bandwidth demand. 

• After determining that Unmanned Aerial Vehicle (UAV) sensor missions 

would constitute the largest consumption of network bandwidth, the Army 

started a new wideband waveform development effort, using the higher 

frequency bands. This effort will also require new updated Joint Tactical 

Radio System hardware and new antennas in addition to a new waveform. 

• Sophisticated attackers could compromise the security of the FCS 

network, which is critical to the success of the system of systems concept. 

Such an attack could degrade the systems’ war-fighting ability and 

jeopardize the security of Army soldiers. The Army is developing 

specialized protection techniques as there is only limited commercial or 

government software currently available that will adequately protect a 

mobile network like the one proposed for FCS. 

FCS Increment 1 includes four classes of UAVs that cover increasing areas 

of responsibility. According to program officials, two of the UAV classes 

are currently unfunded and are currently not being developed. The Army 

plans to develop, produce and field them if funding becomes available. 

Within the FCS concept, UAV roles include reconnaissance, target 

acquisition and designation, mine detection, and wide-band 

communications relay. The required UAVs will need to be designed, 

developed, and demonstrated within the 51⁄2-year period prior to the initial 

UAV Development Challenges 
Page 12 GAO-04-635T Defense Acquisitions 

FCS production decision. As we recently testified,5 DOD’s experiences 

show that it is very difficult to field UAVs. Over the last 5 years, only three 

systems have matured to the point that they were able to use procurement 

funding. 

FCS Increment 1 includes eight manned ground systems, however, one—

the maintenance and recovery vehicle—is unfunded. The Army plans to 

use the Heavy Expanded Mobility Tactical Truck-Wrecker in its place in 

the Unit of Action. The remaining seven manned ground systems require 

critical individual and common technologies to meet required capabilities. 

For example, the Mounted Combat System will require, among other new 

technologies, a newly developed lightweight weapon for lethality; a hybrid 

electric drive system and a high-density engine for mobility; advanced 

armors, an active protection system, and advanced signature management 

systems for survivability; a Joint Tactical Radio System with the 

wideband waveform for communications and network connection; a 

computer-generated force system for training; and a water generation 

system for sustainability. 

Under other circumstances, each of the seven manned ground systems 

would be a major acquisition program on par with the Army’s past major 

ground systems such as the Abrams tank, the Bradley Fighting Vehicle, 

and the Crusader Artillery System. As such, each requires a major effort to 

develop, design, and demonstrate the individual vehicles. Recognizing that 

a number of subsystems will be common among the vehicles, meeting the 

Army’s schedule will be a challenge as this effort must take place within 

the 51⁄2-year period prior to the initial FCS production decision. 

 5

 See U.S. General Accounting Office, Unmanned Aerial Vehicles: Major Management 

Issues Facing DOD’s Development and Fielding Efforts, GAO-04-530T (Washington, D.C.: 

Mar. 17, 2004). 

Manned Ground Vehicle 

Development Challenges 
Page 13 GAO-04-635T Defense Acquisitions 

We have found for a program to deliver a successful product within 

identified resources, managers should build high levels of demonstrated 

knowledge before significant commitments are made.6

 Figure 2 depicts the 

key elements for building knowledge. 

Figure 2: Best Practices Model Focuses on Three Critical Knowledge Points 

This knowledge build, which takes place over the course of a program, can 

be broken down into three knowledge points to be attained at key 

junctures in the program: 

• At knowledge point 1, the customer’s needs should match the developer’s 

available resources—mature technologies, time, and funding. This is 

 6

See U.S. General Accounting Office, Best Practices: Capturing Design and 

Manufacturing Knowledge Early Improves Acquisition Outcomes, GAO-02-701

(Washington, D.C.: July 15, 2002); Best Practices: Better Management of Technology 

Development Can Improve Weapon System Outcome, GAO/NSIAD-99-162

(Washington, D.C.: July 30, 1999); and Best Practices: Successful Application to 

Weapon Acquisition Requires Changes in DOD’s Environment, GAO/NSIAD-98-56

(Washington, D.C.: Feb. 24, 1998). 

High Levels of 

Demonstrated Knowledge 

Are Key to Getting Desired 

Outcomes 
Page 14 GAO-04-635T Defense Acquisitions 

indicated by the demonstrated maturity of the technologies needed to 

meet customer needs.7

• At knowledge point 2, the product’s design is stable and has demonstrated 

that it is capable of meeting performance requirements. This is indicated 

by the number of engineering drawings that are releasable to 

manufacturing. 

• At knowledge point 3, the product must be producible within cost, 

schedule, and quality targets and have demonstrated its reliability. It is 

also the point at which the design must demonstrate that it performs as 

needed. Indicators include the number of production processes in 

statistical control. 

The three knowledge points are related, in that a delay in attaining 

one delays those that follow. Thus, if the technologies needed to meet 

requirements are not mature, design and production maturity will be 

delayed. For this reason, the first knowledge point is the most important. 

DOD’s acquisition policy has adopted the knowledge-based approach to 

acquisitions. Translating this approach to DOD’s acquisition policy, a 

weapon system following best practices would achieve knowledge point 1 

by the start of system development and demonstration, knowledge point 2 

at critical design review (about halfway through development), and 

knowledge point 3 by the start of production. 

For the most part, all three knowledge points are eventually attained on a 

completed product. The difference between highly successful product 

developments—those that deliver superior products within cost and 

schedule projections—and problematic product developments is how 

this knowledge is built and how early in the development cycle each 

knowledge point is attained. If a program is attaining the desired levels of 

knowledge, it has less risk—but not zero risk—of future problems. 

Likewise, if a program shows a gap between demonstrated knowledge and 

best practices, it indicates an increased risk—not a guarantee—of future 

problems. Typically, these problems cost more money than has been 

identified and take more time than has been planned. 

DOD programs that have not attained these levels of knowledge have 

experienced cost increases and schedule delays. We have recently 

 7

 Technology readiness levels are a way to measure the maturity of technology. Technology 

is considered sufficiently mature to start a program when it reaches a readiness level of 7. 

This involves a system prototype demonstration in an operational environment. The 

prototype is near or at the planned operational system. 
Page 15 GAO-04-635T Defense Acquisitions 

reported on such experiences with the F/A-22, the Advanced SEAL 

Delivery System, the Airborne Laser, and the Space Based Infrared System 

High. For example, the technology and design matured late in the F/A-22 

program and have contributed to numerous problems. Avionics have 

experienced major development problems and have driven large cost 

increases and caused testing delays. 

The FCS program started system development and demonstration with 

significantly less knowledge than called for by best practices. This 

knowledge deficit is likely to delay the demonstration of subsequent 

design and production knowledge at later junctures and puts the program 

at risk of cost growth, schedule delays, and performance shortfalls. Two 

factors contributed to not having a match between resources and 

requirements at the start of system development and demonstration: 

75 percent of critical technologies were not mature and requirements were 

not well defined. Later in the program, when the initial production 

decision is made, a knowledge gap will still exist even if the program 

proceeds on schedule. For example, prototypes of all 14 funded systems, 

the network, and the software version needed for initial operational 

capability will not be brought together and tested for the first time until 

after the production decision. Further, as production-representative 

prototypes will not be built, it does not appear that much demonstration of 

production process maturity can occur before the production decision. 

Using best practices, at the start of system development and 

demonstration, a program’s critical technologies should be demonstrated 

to a technology readiness level of 7. This means the technology should be 

in the form, fit, and function needed for the intended product and should 

be demonstrated in a realistic environment, such as on a surrogate 

platform. While DOD’s policy states a preference for a technology 

readiness level of 7, it accepts a minimum of a level 6. According to 

program officials, technologies were accepted for FCS if they were at level 

6 or if the Army determined that the technologies would reach a readiness 

level of 6 before the July 2006 critical design review. To put this discussion 

of technology maturity in perspective, the difficulties the F/A-22 fighter are 

currently experiencing with its avionics system are, in essence, the 

consequence of not demonstrating a technology readiness level of 7 until 

late in the program. 

Consequently, the Army started FCS system development and 

demonstration phase with about 75 percent of its critical technologies 

below level 7, with many at level 5 and several at levels 3 and 4. Since then, 

Even Assuming Success, 

FCS Strategy Will Not 

Demonstrate High Levels 

of Knowledge 

Knowledge Gap at Start of 

System Development and 

Demonstration 
Page 16 GAO-04-635T Defense Acquisitions 

progress has been made, but the Army expects that, by the full program 

review in November 2004, only 58 percent of the program’s critical 

technologies would be matured to a technology readiness level of 6 or 

higher. The Army estimates that 95 percent of the technologies will reach 

level 6 by the critical design review. The program does not expect all FCS 

critical technologies to be demonstrated to level 7 until mid-2009, after the 

initial production decision and about 6 years after the start of system 

development and demonstration. 

The second factor keeping the Army from matching resources with 

customer’s needs before starting the system development and 

demonstration phase was that it did not have an adequate definition of the 

FCS requirements. The program continues to work on defining the 

requirements for the FCS system of systems and the individual systems. 

System requirements may not be completely defined until at least the 

preliminary design review in April 2005 and, perhaps, as late as the critical 

design review in July 2006. The program still has a number of key design 

decisions to be made that will have major impacts on the FCS 

requirements and the conceptual design of FCS Increment 1. Currently, 

the program has 129 trade studies underway including 5 studies that are 

critical and due to be completed soon. For example, a critical study with 

great potential impact is determining the upper weight limit of the 

individual FCS manned platforms. This determination could affect the FCS 

transportability, lethality, survivability, sustainability, and responsiveness 

capabilities. These and other open questions on the FCS requirements will 

need to be answered in order for the detailed design work to proceed and 

ultimately to be stabilized at the critical design review. 

To go from system development and demonstration to production in 

5 1⁄2 years, the FCS program depends on a highly concurrent approach to 

developing technology, as well as to designing, building, testing, and 

producing systems. This level of concurrency resulted from the Army’s 

establishment of 2010 as its target for initial operating capability for the 

first FCS Unit of Action. Army officials acknowledge that this is an 

ambitious date and that the program was not really ready for system 

development and demonstration when it was approved. However, the 

officials believe it was necessary to create “irreversible momentum” for 

the program. Army leaders viewed such momentum as necessary to 

change Army culture. The result is an accelerated schedule-driven 

program, as depicted in figure 3, rather than an event-driven program. 

Demonstrated Knowledge Will 

Be Low at Production Decision 
Page 17 GAO-04-635T Defense Acquisitions 

Figure 3: The FCS Acquisition Schedule Includes Periods of Concurrent Development 

Even if the program successfully completes this schedule, it will yield 

lower levels of demonstrated knowledge than suggested by best practices 

and DOD’s acquisition policy. Significant commitments will thus be made 

to FCS production before requisite knowledge is available. For example: 

• Technology development is expected to continue through the production 

decision. 

• At the design readiness review (critical design review) in July 2006, 

technology development will still be ongoing, putting at risk the stability of 

ongoing system integration work. 

• In December 2007, while technology development and system integration 

are continuing and first prototypes are being delivered, the Army plans to 
Page 18 GAO-04-635T Defense Acquisitions 

begin long lead item procurement8 and to begin funding for the production 

facilities. 

• In November 2008, the initial production decision is expected to be made. 

However, program officials said that some technologies will not have 

reached level 7 by that time, and the system of systems demonstration will 

remain to be done. 

• In early 2010, as production deliveries have started, the Army plans to 

finish Integrated System Development and Demonstration Test Phase 5.1, 

the first full demonstration of all FCS components as an integrated system. 

Testing and demonstration will continue until the full rate production 

decision in mid-2013. 

• The initial operational capability is planned for December 2010. 

With the FCS concurrent strategy, much demonstration of knowledge will 

occur late in development and early in production, as technologies mature, 

prototypes are delivered, and the network and systems are brought 

together as a system of systems. This makes the program susceptible to 

“late cycle churn,” a condition that we reported9

 on in 2000. Late cycle 

churn is a phrase private industry has used to describe the efforts to fix a 

significant problem that is discovered late in a product’s development. 

Often, it is a test that reveals the problem. The churn refers to the 

additional—and unanticipated—time, money, and effort that must be 

invested to overcome the problem. Problems are most devastating when 

they delay product delivery, increase product cost, or “escape” to 

the customer. 

The discovery of problems in testing conducted late in development is a 

fairly common occurrence on DOD programs, as is the attendant late cycle 

churn. Often, tests of a full system, such as launching a missile or flying an 

aircraft, become the vehicles for discovering problems that could have 

been found earlier and corrected less expensively. When significant 

problems are revealed late in a weapon system’s development, the 

reaction—or churn—can take several forms: extending schedules to 

increase the investment in more prototypes and testing, terminating the 

program, or redesigning and modifying weapons that have already made it 

 8

 Long lead items are those components or a system or piece of equipment for which the 

times to design and fabricate are the longest, and therefore, to which an early commitment 

of funds may be desirable in order to meet the earliest possible date of system completion. 

9

 See U.S. General Accounting Office, Best Practices: A More Constructive Approach 

is Key to Better Weapon System Outcomes, GAO/NSIAD-00-199 (Washington, D.C.: 

July 31, 2000). 
Page 19 GAO-04-635T Defense Acquisitions 

to the field. Over the years, we have reported numerous instances in which 

weapon system problems were discovered late in the development cycle. 

The Army has embarked on an impressive plan to mitigate risk using 

modeling, simulation, emulation, hardware in the loop, and system 

integration laboratories throughout FCS development. This is a laudable 

approach designed to reduce the dependence on late testing to gain 

valuable information about design progress. However, on a first-of-a-kind 

system like FCS that represents a radical departure from current systems, 

actual testing of all the components integrated together is the final proof 

that the system works both as predicted and as needed. 

If the FCS strategy does not deliver the system of systems as planned, the 

Army is still prepared to go forward with production and fielding. The 

Army’s Acquisition Strategy Report states that at the Initial Production 

Decision, all elements of the FCS may not be ready for initial production 

and will require a continuation of system development and demonstration 

efforts to complete integration and testing in accordance with the 

program–tailoring plan. For those that need more time, FCS program 

manager will present to the Milestone Decision Authority a path forward, 

with supporting analysis. In addition, the Army will accept existing 

systems in lieu of actual FCS systems to reach initial operational 

capability. 

We have reported on options that warrant consideration as alternatives for 

developing FCS capabilities with less risk.10 Alternatives are still viable and 

worth considering, particularly before major funding and programmatic 

commitments are made. If the FCS program proceeds as planned and does 

experience problems later in development, it may pose a real dilemma for 

decision makers. Typically, performance, schedule, and cost problems on 

weapon system programs are accommodated by lowering requirements 

and increasing funding. If the FCS program proceeds on its current path 

until problems occur in demonstration, traditional solutions may not be 

available because of the significant role it must fulfill and its financial 

magnitude. 

 10 See U.S. General Accounting Office, Issues Facing the Army’s Future Combat Systems 

Program, GAO-03-1010R (Washington, D.C.: Aug. 13, 2003). 

Alternatives to 

FCS Strategy Merit 

Consideration 
Page 20 GAO-04-635T Defense Acquisitions 

While there is a significant amount of potential flexibility among the 

various FCS systems and technologies, collectively the system of systems 

has to meet a very high standard. It has to be as lethal and survivable as 

the current force and its combat vehicles have to be a fraction of the 

weight of current vehicles to be air transportable on the C-130 aircraft. 

These “must haves” constrain the flexibility in relaxing requirements for 

the FCS system of systems. 

The opportunity for increasing funds to cover cost increases poses a 

challenge because FCS already dominates the Army’s investment budget. 

It might be difficult to find enough other programs to cut or defer to offset 

FCS increases. Assuming the Army’s acquisition cost estimates are 

accurate and the program will succeed according to plan, the FCS 

investment for even the first increment is huge—$92 billion (in then-year 

dollars). These assumptions are optimistic as risks make problems likely, 

the cost estimate was based on an immature program, and budget 

forecasts have already forced deferral of four FCS systems. As estimated, 

FCS will command a significant share of the Army’s acquisition budget, 

particularly that of ground combat vehicles, for the foreseeable future. 

In fiscal year 2005, the FCS budget request of $3.2 billion accounts for 

52 percent of the Army’s proposed research, development, test and 

evaluation spending on programs in system development and 

demonstration and 31 percent of that expected for all Army research, 

development, test, and evaluation activities. See figure 4 for FCS costs 

through 2016. 

Alternatives Featuring 

Lowering FCS 

Performance or Increasing 

Funds May Be Difficult 
Page 21 GAO-04-635T Defense Acquisitions 

Figure 4: FCS Funding Climbs, Then Levels Off at Nearly $9 Billion Annually 

The ramp up in FCS research and development funding is very steep, going 

from $157 million in fiscal 2003 to $1.7 billion in fiscal 2004 to a projected 

$3.2 billion in fiscal years 2005 and topping out at about $4.3 billion in 

fiscal 2006. FCS procurement funding is projected to start in fiscal 2007 at 

$750 million and ramp up to an average of about $3.2 billion in fiscal years 

2008 and 2009. In late development (2008-2009) the total FCS costs will run 

about $5 billion per year. After 2008, FCS will command nearly 100 percent 

of the funding for procurement of Army ground combat vehicles. After 

2011, FCS costs will run nearly $9 billion annually to procure enough FCS 

equipment for two Units of Action per year. According to Army officials, it 

is not yet clear that the Army can afford this level of annual procurement 

funding for FCS. The consequences of even modest cost increases and 

schedule delays for FCS would be dramatic. For example, we believe that 

a 1-year delay late in FCS development, not an uncommon occurrence for 

other DOD programs, could cost $4 billion to $5 billion. A modest 

10 percent increase in production cost would amount to over $7 billion. 
Page 22 GAO-04-635T Defense Acquisitions 

In a broader context, any discussion of DOD’s sizeable investment that 

remains in the FCS program must also be viewed within the context of the 

fiscal imbalance facing the nation within the next 10 years. There are 

important competing priorities, both within and external to DOD’s budget, 

that require a sound and sustainable business case for DOD’s acquisition 

programs based on clear priorities, comprehensive needs assessments, 

and a thorough analysis of available resources. Funding specific program 

or activities will undoubtedly create shortfalls in others. 

Alternatives to developing FCS capabilities that do not follow a concurrent 

strategy are feasible, if acted upon early enough. Alternatives should have 

the common elements of building more knowledge before making program 

commitments; preserving the advantages of the FCS concept, such as 

defining an architecture before individual systems are developed; and 

spinning off mature technologies to systems already fielded. Alternatives 

that would allow for building such knowledge include: 

• Adding more time to the FCS program with its scope intact to reduce 

concurrency would lower risk. However, until technologies are mature 

and more is known about whether the FCS concept will work, there still 

would not be a sound basis for estimating how much time will be needed 

to build the knowledge needed to complete system development and 

demonstration. 

• Focus on the development and demonstration of its most critical 

capabilities first, such as the network. This could be done by conducting 

one or more advanced technology demonstrations11 to reduce technical 

and integration risks in critical areas, then proceed with an acquisition 

program. This would take more time than if the current FCS schedule 

were successfully carried out. 

• Focus on maturing the most critical technologies first, then bundle them in 

demonstrations of capabilities, such as Advanced Concept Technology 

Demonstrations,12 then proceed with an acquisition program that would 

attain sufficient knowledge at the right acquisition junctures. This would 

 11 Advanced technology demonstrations are used to demonstrate the maturity and potential 

of advanced technologies for enhanced military operational capability or cost-effectiveness 

and reduce technical risks and uncertainties at the relatively low costs of informal 

processes. 

12 An Advanced Concept Technology Demonstration is a demonstration of the military 

utility of a significant new capability and an assessment to clearly establish operational 

utility and system integrity. 

Alternatives for 

Proceeding 
Page 23 GAO-04-635T Defense Acquisitions 

also take more time than if the current FCS schedule were successfully 

carried out. 

To develop the information on whether the FCS program was following a 

knowledge-based acquisition strategy and the current status of that 

strategy, we contacted, interviewed, and obtained documents from 

officials of the Offices of the Under Secretary of Defense (Acquisition, 

Technology, and Logistics); the Secretary of Defense Cost Analysis 

Improvement Group; the Assistant Secretary of the Army (Acquisition, 

Logistics, and Technology); the Program Executive Officer for Ground 

Combat Systems; the Program Manager for Future Combat Systems; and 

the Future Combat Systems Lead Systems Integrator. We reviewed, among 

other documents, the Objective Force Operational and Organizational Plan 

for Maneuver Unit of Action and the Future Combat Systems’ Operational 

Requirements Document; the Acquisition Strategy Report, the Baseline 

Cost Report, the Critical Technology Assessment and Technology Risk 

Mitigation Plans, and the Integrated Master Schedule. We attended the 

FCS Business Management Quarterly Meetings, Management Quarterly 

Review Meetings, and Directors Quarterly Review Meetings. 

In our assessment of the FCS, we used the knowledge-based acquisition 

practices drawn from our large body of past work, as well as DOD’s 

acquisition policy and the experiences of other programs. We discussed 

the issues presented in this statement with officials from the Army and the 

Secretary of Defense, and made several changes as a result. We performed 

our review from July 2003 to March 2004 in accordance with generally 

accepted auditing standards. 

Mr. Chairman, this concludes my prepared statement. I would be happy to 

answer any questions that you or members of the subcommittee may have. 

For future questions about this statement, please contact me at 

(202) 512-4841. Individuals making key contributions to this statement 

include Lily J. Chin, Marcus C. Ferguson, Lawrence Gaston, Jr., William R. 

Graveline, W. Stan Lipscomb, John P. Swain, and Carrie R. Wilson. 

Objectives, Scope, 

and Methodology 

Contacts and Staff 

Acknowledgments 

(120279) 
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