GAO-03-825R Satellite Acquisition Programs 

United States General Accounting Office 

Washington, DC 20548 

June 2, 2003 

The Honorable Jerry Lewis 

Chairman, Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

Subject: Military Space Operations: Common Problems and Their Effects on 

Satellite and Related Acquisitions

Dear Mr. Chairman: 

In fiscal year 2003, the Department of Defense expects to spend more than $18 billion 

to develop, acquire, and operate satellites and other space-related systems. Satellite 

systems collect information on the capabilities and intentions of potential 

adversaries. They enable military forces to be warned of a missile attack and to 

communicate and navigate while avoiding hostile action. And they provide 

information that allows forces to precisely attack targets in ways that minimize 

collateral damage and loss of life. DOD’s satellites also enable global 

communications, television broadcasts, weather forecasting; navigation of ships, 

planes, trucks, and cars; and synchronization of computers, communications, and 

electric power grids. 

You requested that we review reports we issued on satellite and other space-related 

programs over the past two decades and identify common problems affecting these 

programs. In addition to analyzing past reports, we interviewed Air Force space 

acquisition officials and reviewed past DOD studies as well as DOD’s selected 

acquisition reports to the Congress. As agreed with your office, given the short 

timeframe of this assignment, we did not thoroughly assess underlying causes of 

problems identified or the effectiveness of actions being taken to address these 

problems. However, we plan to do so as part of a follow-on study. To the extent 

possible, we looked at the current status of programs we reviewed. However, 

because we principally relied on past GAO and DOD reports, some recent changes in 

status and cost may not be reflected. We conducted our review from April 2003 

through May 2003 in accordance with generally accepted government auditing 

standards. 
Page 2 GAO-03-825R Satellite Acquisition Programs 

RESULTS IN BRIEF 

The majority of satellite programs cost more than expected and took longer to 

develop and launch than planned. In reviewing our past reports, we found that these 

results were commonly tied to the following problems. 

(1) Requirements for what the satellite needed to do and how well it must perform 

were not adequately defined at the beginning of a program or were changed 

significantly once the program had already begun. 

(2) Investment practices were weak. For example, potentially more cost-effective 

approaches were not examined and cost estimates were optimistic. 

(3) Acquisition strategies were poorly executed. For example, competition was 

reduced for the sake of schedule or DOD did not adequately oversee contractors. 

(4) Technologies were not mature enough to be included in product development. 

Several factors contributed to these problems. First, DOD often took a scheduledriven instead of a knowledge-driven approach to the acquisition process. As a 

result, activities essential to containing costs, maximizing competition among 

contractors and testing technologies were compressed or not done. Second, there is 

a diverse array of organizations with competing interests involved in overall satellite 

development—from the individual military services, to testing organizations, 

contractors, civilian agencies, and in some cases international partners. This created 

challenges in making tough tradeoff decisions, particularly since, for many years, 

there was no high-level official within the Office of the Secretary of Defense 

dedicated to developing and enforcing an overall investment strategy for space. 

Third, space acquisition programs have historically attempted to satisfy all 

requirements in a single step, regardless of the design challenge or the maturity of 

technologies to achieve the full capability. This approach made it difficult to match 

requirements to available resources (in terms of time, money, and technology). 

Other factors also created challenges for the satellite acquisition programs we 

reviewed. These include a shrinking industrial base, a declining space workforce, 

difficulties associated with testing satellites in a realistic environment, as well as 

challenges associated with launching satellites. 

DOD has studied problems affecting its satellite acquisitions and is undertaking 

efforts to address these problems. We plan to evaluate these efforts in a subsequent 

review. Therefore, we are not making recommendations in this report. 

BACKGROUND 

DOD’s current space network is comprised of constellations of satellites, groundbased systems, and associated terminals and receivers. Among other things, these 

assets are used to perform intelligence, surveillance, and reconnaissance functions; 

perform missile warning; provide communication services to DOD and other 

government users; provide weather and environmental data; and provide positioning 

and precise timing data to U.S. forces as well as national security, civil, and 

commercial users. Table 1 identifies specific satellite systems used for these 

purposes. Appendix I describes these systems in more detail. 
Page 3 GAO-03-825R Satellite Acquisition Programs 

Table 1: Current and Planned Satellite Systems 

Function Current Systems Planned Systems 

Missile warning and 

tracking 

• Defense Support Program 

(DSP) 

• Space-Based Infrared System 

(High) 

• Space Tracking and 

Surveillance System (STSS) 

Intelligence, Surveillance 

and Reconnaissance 

• National Reconnaissance 

Office satellites (not covered 

in this review) 

• NRO satellites 

• DOD’s Space-based Radar 

(not covered in this review) 

Communications 

Wideband/ high 

capacity systems 

Protected systems 

(antijam, survivable) 

Narrowband systems 

• Defense Satellite 

Communications System 

(DSCS) 

• Global Broadcasting Service 

(GBS) (not covered by GAO 

reports) 

 

• Milstar 

• Ultra High Frequency FollowOn satellite communications 

system (UFO) 

(not covered by GAO reports) 

• Wideband Gapfiller Satellite 

(WGS) 

• Advanced Wideband System 

(AWS) 

• Advanced Extremely High 

Frequency (AEHF) 

• Advanced Polar System 

• Mobile User Objective System 

(MUOS) 

(not covered by GAO reports) 

Navigation, Positioning, 

Timing 

• Global Positioning System 

(GPS) 

• Next Generation GPS 

Weather/ Environmental • Defense Meteorological 

Satellite Program (DMSP) 

• National Polar-orbiting 

Operational Environmental 

Satellite System (NPOESS) 

All of these systems are playing an increasingly important role in military operations. 

According to DOD officials, for example, in Operation Iraqi Freedom, approximately 

70 percent of weapons were precision-guided, most of those utilizing GPS 

capabilities. Weather satellites enabled warfighters to not only prepare for, but also 

to take advantage of blinding sandstorms. Communications and intelligence satellites 

were also heavily used to plan and carry out attacks and to assess post-strike damage. 

Some of DOD’s satellite systems—such as GPS—have also grown into international 

use for civil and military applications and commercial and personal uses. In addition, 

many satellites launched over the past two decades have lasted longer than expected. 

For example, some of the later DSP spacecraft have operated for more than 10 

years—well past design lifetime. 

The Joint Staff and the Combatant Commands are responsible for establishing overall 

requirements while the services are responsible for satisfying these requirements to 

the maximum extent practical through their individual planning, programming, and 
Page 4 GAO-03-825R Satellite Acquisition Programs 

budgeting systems. According to DOD, the Office of the Secretary of Defense and the 

intelligence community’s Community Management Staff provide high-level leadership 

for national security space activities. The Air Force is the primary procurer and 

operator of space systems and spends the largest share of defense space funds, 

annually averaging about 85 percent. The Air Force Space Command is the major 

component providing space forces for the U.S. Strategic Command. 

The Army controls the Defense Satellite Communications System and operates 

ground mobile terminals. The Navy operates the Ultra High Frequency follow-on 

satellites, the Geosat follow-on satellites, a weather satellite, and some space systems 

that contribute to surveillance and warning. And the National Reconnaissance Office 

designs, procures, and operates space systems for intelligence and defense activities. 

In addition, the National Security Space Architect and National Security Space 

Integration Directorate coordinate national security space architectures and plans for 

future national security space activities. The Office of the Secretary of Defense, the 

Marine Corps, and other DOD agencies also participate in national security space 

activities. 

COMMON PROBLEMS AFFECTING 

SATELLITE ACQUISITIONS

The majority of satellite programs we have reviewed over the past two decades 

experienced problems during acquisition that drove up costs and schedules and 

increased technical risks. 

First, requirements for what the satellite needed to do and how well it must perform 

were not adequately defined at the beginning of a program or were changed 

significantly once the program had already begun. This made it more difficult for 

programs to ensure that they could match their requirements to their resources (in 

terms of money, time, and technology). The more requirements were added or 

changed, the more that cost and schedule increased. 

Second, investment practices were weak. At times, programs did not explore 

potentially more cost-effective investment approaches. Once they settled on an 

approach, programs often did not develop realistic cost estimates. From a broader 

perspective, investments in programs were not made in accordance with an overall 

space investment strategy for DOD. Funds were sometimes shifted from healthier 

programs to pay for weaker ones. Further, according to DOD officials, decisions 

external to the program office were sometimes imposed that resulted in unexpected 

funding cuts. 

Third, acquisition strategies were poorly executed. For example, competition was 

reduced for the sake of schedule or DOD did not adequately oversee contractors. At 

times, contract type was not suitable for the work being done. 

Fourth, programs did not always ensure that technologies were mature before 

making heavy investments in the program. This often caused cost and schedule 

increases due to the need to fix problems later in development. A continuing 

problem is that software needs are poorly understood at the beginning of a program. 
Page 5 GAO-03-825R Satellite Acquisition Programs 

Table 2 identifies examples of problems identified in our reports and affected 

systems. 

Table 2: Specific Common Problems Identified in GAO Reports 

Problems Systems Affected by One or 

More Problems 

Requirements—Defining what the system needs to do 

and how well it needs to perform 

• Program did not adequately define requirements 

• Unresolved conflicts among users on requirements 

• Frequent changes made to requirements after product 

development began 

• DSP replacement programs 

• Milstar 

• AEHF 

• SBIRS-High 

Investment Strategy—Choosing a path that offers the 

most cost-effective solution and ensuring costs are 

contained 

• Program did not adequately analyze investment 

alternatives 

• Cost and/or schedule estimates were optimistic 

• Funding was unstable 

• DSP replacement programs 

• SBIRS-Low/STSS 

• Milstar 

• AEHF 

• SBIRS-High 

• GPS III 

Acquisition Strategy—Maximizing competition and 

contractor reliability 

• Level of competition was reduced or eliminated 

• Contract type was not suitable for work being done 

• Poor oversight over contractors 

• AEHF 

• SBIRS-High 

• SBIRS-Low 

• STSS 

• EELV 

Technology—Ensuring technology is mature before 

heavy investments are made in the program 

• Technology not sufficiently mature at program start 

• Software needs poorly understood 

• Testing compressed, skipped, or done concurrently with 

production 

• DSP replacement programs 

• Milstar 

• SBIRS-Low 

• AEHF 

• SBIRS-High 

Several factors contributed to the problems identified in our reports. First, DOD took 

a schedule-driven versus a knowledge-driven approach to the acquisition process. 

As a result, activities essential to containing costs, maximizing competition among 

contractors and testing technologies were shortchanged. Second, there was a 

diverse array of organizations with competing interests involved in overall satellite 

development—from the individual military services, to testing organizations, 

contractors, civilian agencies, and in some cases, even international partners. This 

created challenges in making tough tradeoff decisions, particularly since, for many 

years, there was no high-level official within the Office of the Secretary of Defense 

dedicated to developing and implementing an overall investment strategy for space.1

 

Often, disagreements within DOD would go unresolved for a long period of time. 

Third, space acquisition programs have historically attempted to satisfy all 

requirements in a single step, regardless of the design challenge or the maturity of 

technologies to achieve the full capability. This approach made it difficult to match 

requirements to available resources (in terms of time, money, and technology). 

 

1

In 1994, DOD established the Office of the Deputy Under Secretary of Defense for Space. The Deputy 

was responsible for developing, coordinating, and overseeing the implementation of space policy. The 

Deputy also had oversight responsibility for space architectures as well as space acquisition programs. 

In 1998, this office was dissolved and its responsibilities divided and given to other offices within OSD 

and the military services.
Page 6 GAO-03-825R Satellite Acquisition Programs 

Table 3 further illustrates how these cross-cutting factors can contribute to problems 

in requirements, investment strategy, acquisition strategy and technology. 

Table 3: Cross-cutting Factors Contributing to Space Acquisition Problems and 

Potential Outcomes 

Cross-Cutting 

Factors 

Requirements Investment Acquisition 

Strategy 

Technology 

Schedule driven vs. 

knowledge driven 

approach 

Requirements not 

fully known at start of 

program 

Changes drive up 

costs and schedule 

Planning is optimistic; 

costs not fully known 

at start of program. 

Alternatives not 

analyzed or 

eliminated to meet 

schedule pressures 

Solution being 

pursued may not be 

the most costeffective; 

decisionmakers lack 

insight into cost 

growth 

Competition may be 

shortchanged in an 

attempt to accelerate 

development 

Best technical 

solution may be 

ignored; costs go up 

due to lack of 

competition 

Testing schedule is 

compressed to meet 

target launch date or it 

is done concurrently 

with production. Less 

time to fix problems 

that arise during 

testing 

Costs and schedule 

increase due to need 

to fix problems later 

in product 

development 

Multiple players (Air 

Force, Army, Naval, 

Space 

Commands, testing 

organizations, 

contractors, other 

agencies, 

international 

partners); no “honest 

broker” at OSD level. 

Competing/ 

conflicting 

requirements set. 

Changes made 

throughout product 

development 

Requirements cannot 

be matched to 

resources 

Original cost 

estimates become 

invalid. Investments 

not made in 

accordance with 

overall space 

investment strategy 

for DOD 

Overall investment in 

space may not be 

optimized 

 

Single-step 

development vs. 

evolutionary 

development 

Requirements exceed 

resources (time, 

money, technology) at 

time of product 

development 

 Technology too 

immature at product 

development 
Page 7 GAO-03-825R Satellite Acquisition Programs 

Other Factors Created

Challenges for Acquisitions

Other factors also created challenges for the satellite acquisition programs we 

reviewed. Specifically, as with other defense industry sectors, the satellite industry 

has seen a high rate of consolidation resulting in reduced levels of competition. In 

1998, we reported that since 1990 the number of defense satellite contractors shrunk 

from 8 to 5. Moreover, in recent years, the U.S. commercial space industry has seen 

decreasing demand and increasing international competition. Our work has found 

varying levels of success in maintaining and promoting competition within this 

environment. 

DOD has also had difficulty in maintaining the capability to launch its satellites—

partly due to problems within the expendable launch sector and partly due to a 

decision in the 1970s to fly all DOD spacecraft on NASA’s space shuttle. According to 

a DOD report2

, as a result of the latter, DOD investments in space launch 

infrastructure and vehicle improvements virtually halted until the Challenger accident 

of 1986. The accident itself disrupted launch schedules for programs such as GPS. At 

the same time, the lack of investment in launch capabilities for so many years 

contributed to higher launch costs after the accident and serious operational 

limitations due to aging and obsolete launch vehicle components and a dependence 

on outdated launch vehicle production lines. In 1998, we reported that the number of 

contractors in this sector fell from 6 to 2. 

Air Force officials also cited challenges related to DOD’s space workforce. In 2001, a 

congressionally chartered commission looking at space issues, known as the Space 

Commission, noted that from its inception the defense space program has benefited 

from world-class scientists, engineers, and operators, but now many experienced 

personnel are retiring and recruitment and retention of qualified space personnel is a 

problem. Further, the commission concluded that DOD does not have the strong 

military space culture—including focused career development and education and 

training—it needs to create and maintain a highly trained and experienced cadre of 

space professionals who can master highly complex technology as well as develop 

new concepts of operation for offensive and defensive space operations. 

Unique aspects of satellite development and testing also presented challenges for 

programs we reviewed. For example, some testing on satellites can be done on the 

ground in thermovac or other environmental simulation chambers. Some systems 

can also be tested via aircraft. However, the only way to test satellites in the true 

operational space environment is to build one or more demonstrator satellites and 

launch them into orbit. Launching demonstrators is costly and time-consuming but it 

offers greater assurance that satellites will work as intended. Also, a high degree of 

coordination between space and ground segments as well as user equipment is 

necessary. Typically, satellite software is used to test the satellite before it is shipped 

for launch. Ground control software is typically installed/fielded a year before launch 

to allow for training and rehearsals. Therefore, scheduling slips within any one of 

 

2

 Aspin, Les, Secretary of Defense, Report on the Bottom-up Review, October 1993. 
Page 8 GAO-03-825R Satellite Acquisition Programs 

these activities can cause problems for other activities. At the same time, the timing 

of the launching of satellites must coincide with the deployment of ground receivers, 

but this can be difficult to do when ground and space segments are funded by 

different military services. 

In addition, satellite programs require a significantly larger investment in the 

acquisition phase than other weapons systems. This is because satellites are RDT&E 

intensive, go through extensive development testing, and need to have all of their 

sustainment capabilities on board when launched. Once on orbit they require a 

reduced amount of funding to operate when compared with the funding profile of a 

typical, large production DOD program. Air Force space acquisition officials stated 

that the funding profile for a satellite program is typically the reverse of the funding 

profile for a typical DOD program. The notional DOD lifecycle profile shows 

approximately 28 percent of a program’s budget funding its development and 72 

percent of its budget funding the production of hundreds of units and paying for the 

operations and sustainment that goes with it. For a satellite program, the funding 

profile is “front-loaded” with 60-70 percent of its budget funding development and 

launch with 30-40 percent of the budget funding operations and maintenance of the 

satellite system. According to Air Force officials, this sort of profile makes it difficult 

to adapt to unknowns that arise since it is not possible to trade out-year production 

funding to fund near-term problems since the production numbers for satellite 

systems are so small. 

HOW PROBLEMS AFFECTED 

SPECIFIC PROGRAMS 

Nearly every program we reviewed over the past several decades experienced one or 

more of the problems we identified and experienced cost and scheduling increases as 

a result. Corrective actions were taken on some programs to reduce cost, schedule 

or technical risks after they were identified. For example, the NPOESS program took 

a range of actions to reduce program risks, including deferring development of 

requirements, deciding to rely on existing versus new technology for some sensors, 

and using aircraft to test sensors. In other cases, problems were allowed to persist to 

the point where DOD needed to step in a restructure the program. SBIRS-Low, for 

example, was restructured after continuing to experience cost growth and scheduling 

delays, and SBIRS-High was restructured last year after experiencing continued cost 

growth and schedule delays. In the 1990s, three separate programs designed to 

replace DSP satellites were abandoned after it became clear that they would be either 

too costly and/or technically risky to pursue. 

Recent cases are discussed in more detail below. A chronology of our findings 

related to individual systems is also provided in appendix I. 
Page 9 GAO-03-825R Satellite Acquisition Programs 

Advanced EHF Satellite 

The AEHF is a satellite system intended to replace the existing Milstar system and to 

be DOD's next generation of higher speed, protected communication satellites. We 

recently reported that cost estimates developed by the Air Force for this program 

increased from $4.4 billion in January 1999 to $5.6 billion in June 2001 for five 

satellites. Moreover, DOD will not meet its accelerated targeted date for launching 

the first satellite in December 2004. In fact, the first satellite's new launch date is 

December 2006. (DOD has since decided to purchase three satellites with options to 

purchase the fourth and fifth. The December 2002 Selected Acquisition Report for 

the AEHF showed current program costs at $4.7 billion for three satellites. ) 

Several factors contributed to cost and schedule overruns and performance 

shortfalls. First, in the early phases of the AEHF program, DOD substantially and 

frequently altered requirements. Although considered necessary, many changes were 

substantial, leading to cost increases of hundreds of millions of dollars because they 

required major design modifications. Second, based on a satellite constellation gap 

caused by the failure of a Milstar satellite, DOD decided to accelerate its plans to 

build the AEHF satellites. The contractors proposed, and DOD accepted, a high risk 

schedule that turned out to be overly optimistic and highly compressed-leaving little 

room for error and depending on a chain of events taking place at certain times. 

Substantial delays occurred when some events did not occur on time. DOD decided 

to take this approach on the grounds it offered a chance to meet unmet warfighter 

requirements caused by the loss of the Milstar satellite. Third, at the time DOD 

decided to accelerate the program, it did not have the funding needed to support the 

activities and the manpower needed to design and build the satellites quicker. The 

lack of funding also contributed to schedule delays, which in turn, caused more cost 

increases. 

Advanced Wideband Satellite System (AWS)

AWS (also known as the Transformational Communications Satellite or TSAT) is a 

fairly new program focused on supplementing AEHF and replacing DOD’s Wideband 

Gapfiller Satellite system (WGS). DOD plans to include laser crosslinks on the 

satellite to significantly increase capacity. In 2003, GAO reported that the AWS 

program is scheduled to enter product development with only one of its five critical 

technologies mature according to best practice standards. Four immature 

technologies were scheduled to reach maturity by January 2006, more than 2 years 

after development start. Three of four technologies have a backup technology in case 

of development difficulties. But the Single Access Laser Communications technology 

has no backup, and according to program officials, any delay in maturing this 

technology would result in a slip in the expected launch date. 

SBIRS-High

SBIRS-High satellites are being developed to replace DOD’s older missile warning 

satellites. In addition to missile warning and missile defense missions, the satellites 

will perform technical intelligence and battlespace characterization missions. After 

the program was initiated in 1994, it faced cost, scheduling, and technology problems. 
Page 10 GAO-03-825R Satellite Acquisition Programs 

GAO reports from 1995 through 2001, for example, noted that the program was facing 

serious hardware and software design problems. In 2001, the program reported that 

it had exceeded the 25 percent cost threshold established in 10 U.S.C. 2433. In 2002, 

an independent review team chartered by DOD to examine the reasons behind cost 

and scheduling problems in the SBIRS-High program reported that a key root cause 

was that system requirements were not well-understood when the program began and 

as it evolved. In addition, the requirements setting process was often adhoc with 

many decisions being deferred to the contractor. The review team also found that the 

program was too immature to enter system design and development. Further, there 

was too much instability on the program after the contract award—with DOD 

undertaking four major replanning efforts. DOD has since restructured the program 

and taken corrective actions, but the team noted that there were still risks within the 

program, including risks related to the schedule. 

SBIRS-Low

SBIRS-Low satellites are to perform missile warning and missile tracking functions. 

Because of their low-earth orbit, they may be particularly useful in tracking missiles 

through the midcourse of their flight—when missiles themselves have cooled down 

and become more difficult to track. 

SBIRS-Low has been restructured due to cost, scheduling, and technical problems. 

Despite spending several billion dollars on these efforts, DOD has not launched a 

single satellite or demonstrated any space-based missile tracking capabilities from 

space using technologies similar to those to be used by SBIRS-Low (now called the 

Space Tracking and Surveillance System, or STSS). In 2001, GAO reported that DOD 

was not adequately analyzing or identifying cost-effective alternatives to SBIRS-Low 

that could satisfy critical missile defense requirements, such as a Navy ship-based 

radar capability. At the time, other studies supported the possibility that other types 

of sensors could be used to track missiles in midcourse of their flight and to cue 

interceptors. In 2001, GAO reported that the SBIRS-Low acquisition schedule was at 

high risk of not delivering the system on time or at cost or within expected 

performance. Satellite development and production, for example, were to be done 

concurrently, leaving the Air Force at risk of having to correct problems discovered 

during testing at late stages of the acquisition process, when they are more expensive 

and time-consuming to fix. SBIRS-Low also had high technical risks because some 

critical satellite technologies were judged to be immature for the current stage of the 

program, including the scanning infrared sensor, tracking infrared sensor, and 

technologies used to cool down satellite sensors. As the program was experiencing 

cost and schedule problems, DOD restructured the program, moving it from the Air 

Force to the Missile Defense Agency to reflect the increased focus on missile defense 

and renaming it the Space Tracking and Surveillance System (STSS). 

In May 2003, we reported that the STSS program was not considering two potentially 

more cost effective alternatives—(1) delaying the launch date by one year and (2) 

stopping efforts to launch existing technology for research purposes and 

concentrating instead on new technology. Moreover, the program faced investment 

and scheduling risks since it recently reduced competition within the program and it 

decided on a 2007 launch date without knowing the extent of work that must be done 

on the satellite equipment it plans to assemble and launch. 
Page 11 GAO-03-825R Satellite Acquisition Programs 

National Polar-orbiting Operational Environmental Satellite System (NPOESS)

This program essentially combined separate weather satellite efforts being pursued 

by DOD and the National Oceanic and Atmospheric Administration (NOAA) after it 

was determined that doing so could reduce duplication and save money. Our earlier 

reviews identified potential requirements setting problems attributable to the broad 

base of internal customers each agency has and the diversity of requirements that 

needed to be met. DOD’s selected acquisition report on NPOESS stated that 

coordination and validation of the broad-based requirements took longer than 

anticipated and delayed a request for proposal release by 6 months. In 1997, the 

NPOESS program assessed specific technical, scheduling, and cost risks facing the 

program, and determined there were risks within the interface data processing 

segment, the space segment, and the overall system integration segment. To reduce 

these risks, the program deferred development of requirements either because the 

technology needed to implement them did not exist or the requirement was too 

costly. It undertook earlier development of some satellite sensors in order to allow 

more time to mature technologies. It decided, in some cases, to use existing sensor 

technologies instead of building new ones. It also increased testing to demonstrate 

satellite sensors and to deliver early data to users to that they could begin to work 

with the data. 

Global Positioning System (GPS)

GPS satellites, which provide positioning, navigation, and timing information to 

military forces and civilian users, have existed for over 25 years, but a full 

constellation of satellites has been operational for only 7 years. In 1980, we reported 

that the cost to acquire and maintain GPS satellites through 2000 increased from $1.7 

billion to $8.6 billion due largely to estimates not previously included for 

replenishment satellites, launches, and user equipment. In 1983, we reported that 

costs might still be understated since system design changes were being considered. 

Costs and schedule were significantly affected in 1987 as a result of the Challenger 

accident, since DOD was depending on the space shuttle to launch GPS satellites. 

Reliability problems with GPS receivers also affected schedule throughout the 

program. In 1991, for example, we reported that DOD postponed full-rate production 

for receiver sets by 2 years due to reliability problems. Last fall, according to GPS 

program officials, the program was on track to launch the first GPS III satellite in 

2012. However, following a review by the Under Secretary of the Air Force, funding 

for the program was zeroed for fiscal year 2004, and $46 million was withheld from 

the fiscal year 2003 budget. Without a full release of the withheld funding, the 

program office believes the launch date may slip past 2012. 

DOD HAS STUDIED ACQUISITION PROBLEMS 

DOD has studied many of the problems related to satellite acquisitions identified in 

our reviews and is making changes. A 1994 study performed by the U.S. Space 

Command, for example, stated that DOD’s process of defining requirements for space 

systems needed to be improved to ensure greater Joint Staff and Service influence in 

decisionmaking. With increasing budget pressures and dramatically different post 
Page 12 GAO-03-825R Satellite Acquisition Programs 

Cold War strategies, the U.S. Space Command also noted that it was essential for all 

services to better understand the costs and benefits of requirements. A 1998 study 

performed by the United States Air Force Scientific Advisory Board advocated 

adopting commercial practices such as business case analysis, streamlined 

procurement, and spiral development of ground segments as a way to improve 

acquisition practices. The study also called for improved oversight by high-level 

officials, development of improved cost/performance models that increase visibility 

into program status and emerging problems, and maintaining adequate budget 

reserves in acquisition programs to minimize reprogramming actions and avoid 

program disruptions. 

More recently, the U.S. Space Commission, chaired by Donald Rumsfeld, found that 

DOD’s budgeting process and declining space workforce created difficulties for 

acquisitions. Specifically, the Commission noted that when satellite programs are 

funded in one budget and terminals in another, the decentralized arrangement can 

result in program disconnects and duplication. It can result in lack of 

synchronization in the acquisition of satellites and their associated terminals. It can 

also be difficult for user requirements to be incorporated into the satellite system if 

the organization funding the system does not agree with and support those user 

requirements. 

Last year, the independent review team studying the SBIRS-High program recognized 

that there were broad, systemic issues that need to be addressed on space programs. 

These include: the need for pre-acquisition rigor up front (requirements); increased 

funding stability; and the need for block upgrades since preplanned product 

improvements are very difficult for space systems, particularly for space craft. The 

team also noted that space programs tend to have “inclusive” requirements 

supporting multiple DOD and warfighting needs with many mission partners. 

A range of actions are being undertaken by DOD and individual military services to 

streamline space acquisition. For example, the Air Force has developed a new space 

system acquisition process designed to shorten timeframes for technical assessments 

and facilitate faster decisionmaking. This approach will establish key decision points 

earlier in the acquisition process, as compared to the acquisition process for nonspace systems, and will provide more oversight earlier in the development of 

complex satellite technology. According to DOD, the new process will conduct an 

independent cost estimate as part of the key decision point (KDP) authorizing the 

start of the system design effort and will then also conduct another cost estimate 

after the design is complete as part of the KDP prior to the start of system build, test 

and launch activities. A key feature of the new process is that it will use an 

independent program assessment team composed of members with appropriate 

expertise to thoroughly review a space program before each KDP. The assessment 

will be done on a full-time basis over a two to four week period in an effort to 

perform relevant technical and programmatic reviews in less time than the 

traditional, part-time, multi-layered integrated product team approach. We plan to 

study DOD’s new space policy as part of our follow-on review and to assess whether 

DOD will have adequate knowledge about technology, design, and costs for making 

its decisions. 
Page 13 GAO-03-825R Satellite Acquisition Programs 

To strengthen space planning, DOD undertook efforts to develop a plan that would 

set overall objectives for space and provide a high-level 10- to 15-year roadmap for 

the direction of space program. The plan is expected to be completed sometime in 

fiscal year 2003. In response to the Space Commission’s recommendation,3 the 

Secretary of Defense also designated the Air Force to be the executive agent for 

space within DOD, with departmentwide responsibility for planning, programming, 

and acquiring space systems. In October 2001, DOD established a “virtual” major 

force program for space to increase visibility of resources allocated for space 

activities. The virtual major force program identifies spending on space activities 

within the other major force programs in DOD’s Future Years Defense Budget and 

provides information by functional area. Further, in recent testimony, the Under 

Secretary of the Air Force noted that the Air Force was working with the Director of 

OSD Cost Analysis Improvement Group to form a national security space cost 

assessment team to provide a useful, accurate, and timely independent cost estimate 

with common methodology in support of space acquisition. 

We plan to review these and other actions being taken to address satellite acquisition 

problems in a subsequent review. 

AGENCY COMMENTS 

DOD provided technical comments on a draft of this letter. These comments were 

largely focused on ensuring technical accuracy in our reporting of individual systems 

and providing updated information. We incorporated these comments where 

possible. DOD did not comment on our overall findings. 

- - - - - 

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

congressional committees. We will also make copies available to others upon 

request. In addition, the report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

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

(202) 512-4841. Key contributors to this report were Cristina Chaplain, Jean Harker, 

Natalie Britton, Bradley Terry and Art Gallegos. 

Katherine V. Schinasi 

Director, Acquisition and Sourcing Management 

 

3

 We recently reported on the status of DOD’s efforts to implement the Commission’s 

recommendations. See Defense Space Activities: Organizational Changes Initiated, but Further 

Management Actions Needed (GAO-03-379, April 2003). 
Page 14 GAO-03-825R Satellite Acquisition Programs 

Appendix I 

Profiles of Satellite Acquisitions

This appendix profiles satellite programs covered by GAO reviews during the past 

two decades. It also profiles two launch systems, given their importance to the 

success of satellite programs. Among other things, the profiles describe the 

programs’ 

• Mission 

• Primary users 

• Manager 

• Architecture and key technologies 

• Contractors/contract type 

• Original cost/quantity and current cost/quantity4

• Total spent/percent total spent5

The profiles also identify key GAO findings related to requirements, investment 

planning, acquisition strategy, and technology. A summary of these findings and our 

report coverage are highlighted below. In addition to analyzing past GAO reports, we 

also relied on DOD Selected Acquisition Reports to the Congress and several DOD 

studies. 

Table I.1 Summary of GAO Coverage and Key Findings 

Mission Program Requirements Investment Acquisition Technology 

DSP proposed replacements (FEWS, 

ALARM) 

a a a

SBIRS High a a a a

Missile 

Warning/ 

Tracking 

STSS (including Brillant Eyes, SMTS, 

SBIRS-Low) 

a a a a

Milstar a a a

DSCS a

AEHF a a a a

WGS 

(new effort, covered in a recent, 

broader GAO assessment of major 

weapon system programs) 

 a

Communications 

AWS 

(new effort, covered in a recent, 

broader GAO assessment of major 

weapon system programs) 

 a

Navigation GPS a a

Weather NPOESS a a

Launch Titan IV a a

 EELV a a a a

 

4

Original and current cost estimates were inflated from the base year reported in the SAR to 2003 

current dollars using DOD escalation factors. For older SARs with very early base years such as DSP, 

inflating the dollar amounts may be subject to error based on accuracy of escalation factors. In some 

cases, DOD provided us with updated cost information. 

5

 Total dollars spent were inflated from the year the SAR was issued to 2003 dollars. The percent total 

spent was taken from the latest SAR available and was not calculated by GAO. In some cases, DOD 

provided us with updated cost information. 
Page 15 GAO-03-825R Satellite Acquisition Programs 

Mission: Missile Warning 

Program: Defense Support Program (DSP) and early proposed replacements 

Background information 

DSP is a strategic surveillance and warning satellite system with an infrared capability to detect 

ballistic missile launches (intercontinental and submarine-launched). It provides near real-time 

detection information in support of DOD’S integrated tactical warning and attack assessment 

(ITW/AA) mission. DSP began in 1967, and the first operational satellite was deployed in 1971. The 

most recent DSP satellite launch (number 21) was in August 2001. In the late 1970s, DOD decided 

that DSP should be replaced since the system did not satisfy all the validated military requirements 

for a space-based ITW/AA sensor. It followed this decision with several attempts to develop 

replacement systems, but these efforts failed due to high costs and technology immaturity. DOD 

eventually made enhancements to DSP. The SBIRS-High program is focused on replacing DSP. 

Architecture/Key Technologies 

The number of DSP satellites in orbit is classified SECRET. DSP satellites use infrared sensors to 

detect heat from missile and booster plumes against the earth's background. Over the last 29 years, 

there have been five major design changes. Historically, DSP satellites have been launched atop the 

Titan III & IV family of launch vehicles; one was launched aboard the Space Shuttle. Currently, DSP 

satellites are launched into geo-synchronous orbit using a Titan IV-B launch vehicle with an Inertial 

Upper Stage. DSP Flight 23 will be launched on an Evolved Expendable Launch Vehicle (EELV). 

Users Strategic and tactical forces across 

military services 

Original cost/ 

quantity: 

$10.8 billion 

19 satellites 

Manager Air Force Current cost/ 

quantity: 

$14.7 billion 

23 satellites 

Contractors/ 

Contract type 

TRW for satellites 

Fixed price with Incentive 

Gencorp, Aerojet for sensors 

Fixed price with Incentive 

(note: contract has since changed) 

Total spent/ 

% total spent 

$7.8 Billion 

75.4% 

Source: 12/31/1996 Selected Acquisition Report (all dollar amounts in 2003 dollars) and DOD 

provided updates 

Key Issues Affecting Program 

• Technology immaturity 

• Unanticipated costs 

• Lack of adequate analysis of alternatives 

Note: Issues mostly affecting DSP replacement programs 

Chronology of Key Findings 

• 1992 GAO reported that DOD was not adequately analyzing alternatives to DSP. DOD first 

proposed replacing DSP with a system called the Advanced Warning System (AWS), but this 

proposal never fully materialized because of immature technology and high costs. A subsequent 

proposal, the Boost Surveillance and Tracking System was discontinued after DOD decided to 

pursue other technologies for tracking ballistic missiles. AWS was proposed for remaining 

tactical warning and attack assessment missions in 1990 but was later scaled down to a less 

costly and less capable system called the Follow-on Early Warning system (FEWS). GAO 

reported that while the current proposal for FEWS may provide more capability than the existing 

DSP system, DOD still needed to consider other alternatives, including an enhanced DSP which 

could be nearly as effective and cost billions dollars less than a fully capable FEWS. Several 

DOD studies supported this point. 

• 1993 GAO reported that adding global processing capability—which would enable processing of 

data generated by the satellite constellation network to be done in a single station--in upgrades to 

ground processing stations for DSP might not be cost-effective. One reason was that there were 
Page 16 GAO-03-825R Satellite Acquisition Programs 

no corresponding plans to reduce the number of ground stations. Another reason was that 

operational requirements were not yet complete. 

• 1994 GAO reported that Congress had appropriated $515 million for FEWS for fiscal years 1992 

through 1994, but terminated the program in late 1993 based on affordability reasons. In late 

1994, the Air Force selected ALARM (Alert, Locate, and Report Missiles system) to be DSP’s 

replacement. ALARM was to be smaller than DSP and less capable than FEWS with an emphasis 

on greater support to tactical forces. At the time of GAO’s review, concerns were that DOD was 

about to make a substantial investment in ALARM without fully defining operational 

requirements. Moreover, while DOD cost estimates showed ALARM to be more affordable than 

FEWS in the short term, the total life cycle costs lead GAO to question whether ALARM, with 

projected upgrades, would actually be a more expensive system. 

• 1994 GAO reported that the Air Force plans to accelerate ALARM schedule by 2 years from 2004 

to 2002 could add costs to the program which in turn could put DOD in a similar unaffordable 

position when it rejected the FEWS program. At the time, the program office had identified an 

additional $434 million that would be needed to support the new schedule. Accelerating 

schedule could also save as much as $700 million because it could obviate the need to procure an 

additional DSP satellite, its launcher, and an inertial upper stage. However, acceleration could 

also create program risks by shortening the demonstration and validation phase of the acquisition 

process by 10 months and performing the critical design review a full year ahead of the original 

schedule. Air Force officials contended that previous engineering efforts on DSP earlier 

replacement programs provided enough experience to offset this risk. 

• 1994 GAO reported that funds for developing two critical technologies for ALARM—infrared 

focal plane array and radiation-hardened electronics—were frozen. Contractors stated that no 

private sector funds would be available for these technologies. 

• 2003 CRS report recapped history of DSP, noting that none of the proposed replacement 

programs reached fruition, and instead, enhancements were made to the DSP series. For 

example, DSP was designed to detect launches of strategic long range missiles (such as 

intercontinental ballistic missiles) but following the Persian Gulf War DOD recognized that the 

threat was changing from intercontinental ballistic missiles to tactical missiles like the SCUD-C. 

In 1995, DOD added the ALERT (Attack and Launch Early Reporting to Theater) system, a 

ground-processing center that uses DSP data, to augment its missile warning capabilities. 

GAO Reports 

GAO/NSIAD-92-39, GAO/NSIAD-93-148, GAO/T-NSIAD-94-108, GAO/T-NSIAD-94-164, GAO/NSIAD-94-

253 
Page 17 GAO-03-825R Satellite Acquisition Programs 

Mission: Missile Warning 

Program: Space Based Infrared System-High (SBIRS-High) 

Background information

The SBIRS system was initiated in 1994 as an effort to replace DSP, the current system used to detect 

missile launches. Until recently, SBIRS had two components: SBIRS-High, which would consist of launch 

detection satellites in geo-synchronous and highly elliptical orbits and SBIRS-Low which would consist of 

launch detection and tracking satellites in low earth orbits. In 2000, SBIRS-Low was shifted back to the 

Ballistic Missile Defense Organization, which is now the Missile Defense Agency. SBIRS-Low is primarily 

focused on supporting the missile defense mission. SBIRS-High is being managed by the Air Force. It is 

focused on missile warning, missile defense, technical intelligence, and battlespace characterization. 

Architecture/Key Technologies 

SBIRS-High features a mix of four geo-synchronous earth orbit (GEO) satellites and a spare, two highly 

elliptical earth orbit (HEO) payloads, and associated ground hardware and software. SBIRS-High will have 

both improved sensor flexibility and sensitivity over DSP. Sensors will cover short-wave infrared like its 

predecessor, expanded mid-wave infrared and see-to-the-ground bands allowing it to perform a broader set 

of capabilities as compared to DSP. Currently in the engineering, manufacturing, and development phase, 

the first SBIRS-High HEO payload is scheduled for delivery in 2003 and the first GEO satellite is expected to 

launch in 2006.

Users Strategic and tactical forces across 

military services

Original cost 

estimate/quantity: 

$4.1 billion 

5 satellites

Manager Air Force Current 

cost/quantity: 

$8.5 billion 

5 satellites 

Contractors/ 

Contract type 

RDT&E -- 

SBIRS-High EMD Mod: 

Lockheed Martin Space Systems 

Cost Plus Award Fee 

October 1995 

(note: contract has since changed)

Total spent/ 

% total spent 

$3.0 billion 

34.9% 

Source: 12/31/2002 Selected Acquisition Report (all dollar amounts in 2003 dollars) and DOD provided 

updates 

Key Issues Affecting Program 

• Requirements definition 

• Technology immaturity 

• Unanticipated software growth 

• Significant cost growth 

• Schedule delay 

• Program instability 

Chronology of Key Findings 

• 1995-2001 GAO reports found the program was facing serious hardware and software design problems 

including sensor jitter, inadequate infrared sensitivity, and stray sunlight. 

• 2001 DOD selected acquisition report stated the program experienced significant cost growth and 

schedule delays. Driven by poor cost and schedule performance and the contractor's projection of a 

fiscal year 2002 funding shortfall, the System Program Office and Lockheed Martin Space Systems 

Company (LMSSC) completed a preliminary Estimate at Completion (EAC) exercise in October 2001. 

The preliminary EAC results indicated potential cost growth in excess of $2 billion across the 

Engineering and Manufacturing Development contract and schedule delays of 12 to 36 months. 
Page 18 GAO-03-825R Satellite Acquisition Programs 

• 2001 Secretary of Air Force reported a Nunn McCurdy Unit Cost Breach (10 U.S.C. 2433) exceeding 25 

percent to Congress. House Appropriations Committee report (House Report 107-298) cited scheduling, 

cost, and technology problems, including unanticipated software code growth, high number of 

discrepancy reports in ground mission software, unbudgeted payload redesign activities, notable 

schedule slippages. 

• 2002 An Independent Review Team (IRT) was chartered by DOD to look at the reasons behind 

significant cost increases, and program management and execution problems affecting the program. 

Key root causes identified included: (1) the program was too immature to enter system design and 

development, (2) system requirements decomposition and flowdown were not well understood as the 

program evolved, and (3) there was a significant breakdown in execution management. 

• 2002 IRT reported that in general, the complexity, schedule, and resources required to develop SBIRS 

were, in hindsight, misunderstood. This led to an immature understanding of how requirements 

translate into detailed engineering solutions. In addition, the requirements setting process was often ad 

hoc with many decisions being deferred to the contractor. While SBIRS-High adopted a more 

commercial approach to doing business within the defense related industry—the winning contractor 

assumed Total System Performance Responsibility (TSPR) for the integrated architecture—TSPR was 

not properly understood or implemented on the SBIRS-High program. The way TSPR was initially 

applied circumvented traditional program management and integrated product team roles and 

responsibilities. 

• 2002 IRT also observed that there had been far too much instability on the program since the contract 

award. In a 5-year timeframe, the program underwent four major replanning efforts and four program 

directors. The team acknowledged that corrective actions were being taken on the program, but noted 

that there were still significant risks within the program, including risks related to the schedule for first 

high-elliptical orbit launch and ground software. 

• 2002 Under Secretary of Defense for Acquisition, Technology, and Logistics certified SBIRS-High to 

Congress as essential to national security, no alternatives offering equal or greater military capability at 

same or lower costs existed, new cost estimates were reasonable, and management structure was 

adequate to manage and control unit costs. 

• 2003 CRS reported that SBIRS-High has become controversial because of cost growth and schedule 

slippage caused by technical challenges that have been encountered in developing the sensors and 

satellites. 

• 2003 GAO reported that three critical technologies—the infrared sensor, thermal management, and onboard processor—are now mature. When the program began in 1996, none of its critical technologies 

were mature. GAO could not assess design stability relative to best practices, because program was not 

tracking the number of releasable drawings and did not know how many total drawings were expected 

for SBIRS-High. However, GAO reported that design stability has been an issue for this program. GAO 

could not assess production maturity relative to best practices because the contractor does not use 

statistical process control to assure that production processes are stable. 

GAO Reports 

Three reports from 1995-2001 and GAO-03-476 
Page 19 GAO-03-825R Satellite Acquisition Programs 

Mission: Missile Warning/Tracking 

Program: Space Based Infrared System-Low (SBIRS-Low); now known as the Space Tracking and 

Surveillance System (STSS) 

Background information 

STSS started in 1990 as Brilliant Eyes, was transferred in 1993 from the Ballistic Missile Defense 

Organization (BMDO) to the Air Force and renamed the Space and Missile Tracking System (SMTS). 

In 1994, DOD terminated the SMTS program, consolidated its infrared space requirements, and 

selected SBIRS as a “system of systems” approach with two components: SBIRS-High, which would 

consist of launch detection satellites in geo-synchronous and highly elliptical orbits and SBIRS-Low, 

which would consist of launch detection and tracking satellites in low earth orbits. In 2000, SBIRSLow was shifted back from the Air Force to the BMDO, which is now the Missile Defense Agency 

(MDA). In 2002, SBIRS-Low was renamed STSS. While STSS is primarily focused on supporting the 

missile defense mission, SBIRS-High is focused on missile warning, missile defense, technical 

intelligence, and battlespace characterization and is managed by the Air Force. 

Architecture/Key Technologies 

STSS is a capabilities-based development. STSS will build a few satellites at a time with later satellites 

being more capable than earlier ones. Using the advantage of a lower operational altitude, STSS will 

track tactical and strategic ballistic missiles against the cold background of space. The satellite’s 

sensors will operate across long and short-wave infrared, as well as the visible light spectrum. These 

wavebands allow the sensors to acquire and track missiles during the boost phase as well as in 

midcourse. STSS is expected to launch its first satellites in 2007.

Users Strategic and tactical forces across 

military services

Original cost 

estimate/quantity:

Not Available 

Manager Missile Defense Agency Current 

cost/quantity: 

Quantity undetermined 

but more than 20 

satellites would be 

needed for worldwide 

coverage 

Contractors/ 

Contract type 

Prime Contractor: Northrop 

Grumman 

Cost Plus Award Fee 

Total spent/ 

% total spent 

Not available 

Source: GAO analysis. 

Key Issues Affecting Program 

• Requirements definition 

• Technology immaturity 

• Lack of competition 

• Cost growth 

• Inadequate analysis of alternatives 

Note: Problems mostly affecting past SBIRS-Low efforts 

Chronology of Key Findings 

• 1997 GAO assessed various options for accelerating SBIRS-Low deployment date, which had 

been set for 2006, given congressional concerns about direction of the program. GAO reported 

that moving up the date by 3 or 4 years would result in high program risk because of the high 

degree of concurrent activities between planned flight demonstrations and development and 

fabrication of satellites. Additional funding might also be required. Moving up the date 2 years 

would reduce the need for concurrency, and therefore lower risks, but still require additional 

funds to account for schedule compression. Moving up the date 1 year would reduce 

scheduling risks and could require less funding. DOD subsequently changed deployment date 

to 2004. 

• 2001 GAO reported that SBIRS-Low acquisition schedule was at high risk of not delivering the 

system on time or at cost or within expected performance because satellite development and 

production, for example, was expected to be done concurrently. SBIRS-Low program also had 

high technical risks because some critical satellite technologies were judged to be immature 

for the current stage of the program, including scanning infrared sensor, tracking infrared 
Page 20 GAO-03-825R Satellite Acquisition Programs 

sensor, and technologies used to cool down satellite systems. 

• 2001 GAO also reported that DOD was not adequately analyzing or identifying cost-effective 

alternatives to SBIRS-Low that could satisfy critical missile defense requirements, such as a 

Navy ship-based radar capability. At the time, other studies supported the possibility that other 

types of sensors could be used to track missiles in midcourse of their flight and to cue 

interceptors. 

• Subsequent to 2001 GAO report, DOD restructured the SBIRS-Low program because of cost 

and scheduling problems, and put the equipment it had partially built into storage. In 2000, the 

Congress directed the Air Force to transfer the program to the Ballistic Missile Defense 

Organization (now MDA). DOD was also directed to study alternatives (such as ground-based 

radar systems) to SBIRS-Low. 

• May 2003 GAO reported that DOD believed that a discrimination capability (that is, the ability to 

detect and track multiple objects and differentiate the threatening warhead from decoys) would 

significantly enhance a space-based missile tracking system like STSS. However, DOD deferred 

plans to achieve this capability for STSS given technical challenges. GAO also reported that 

DOD's unwillingness to relax requirements for capabilities such as discrimination during earlier 

SIBRS-low efforts contributed to cost and scheduling problems. 

• May 2003 GAO reported that in taking on the restructured SBIRS-Low program, now called 

Space Tracking and Surveillance System (STSS), MDA purposely set out to adopt a strategy 

that would evolve STSS over time, deferring some requirements, and calling for competition in 

development of sensors aboard the satellite. However, recent decisions were limiting MDA’s 

ability to achieve its original goals as well as knowledge that could be gained from its satellite 

demonstrations. For example, plans were eliminated to have contractors compete for 

production of the sensor to detect missile launches. If it chose to keep STSS as part of the 

missile defense system, STSS could end up being more expensive in the future because MDA 

could be locked into a single contractor for the design and product of the larger constellation 

of satellites. 

• May 2003 GAO reported that MDA was focused on launching its satellites by 2007 in order to 

assess its performance in the missile defense tests. However, it made this decision without 

completing its assessment of the working condition of the equipment it planned to assemble 

and use to demonstrate STSS capabilities. Also, MDA was not considering other approaches 

to demonstrating capabilities because they would not allow STSS to participate in 2006-2007 

missile defense tests. These include (1) launching satellites in 2008 instead of 2007 and (2) 

dropping effort to demonstrate capabilities with legacy satellites that were based on older 

technology and focusing instead on developing new technology. Both approaches would 

enable MDA to inject more competition into STSS program, reduce scheduling risks, and 

demonstrate more capabilities. However, they also have drawbacks; primarily, they would 

delay MDA’s ability to make informed tradeoffs on missile defense sensors. 

GAO Reports 

GAO/NSIAD-97-16, GAO-01-6, GAO-03-597 
Page 21 GAO-03-825R Satellite Acquisition Programs 

Mission: Current Communication Systems 

Programs: Defense Satellite Communication System (DSCS) and Milstar 

Background information 

DSCS and Milstar are current DOD communication satellite systems that provide protected 

communications to support globally distributed military users. The Air Force began launching the 

current DSCS satellites in 1982. The Air Force initiated the Milstar program in 1981, but the first 

Milstar satellite was launched in 1994 and the last one in April 2003. 

Architecture/Key Technologies 

Currently, ten DSCS satellites and five Milstar satellites operate in geo-synchronous orbit. The DSCS 

satellites utilize super high frequency transponder channels that provide the highest data capability, 

but require large antennas (4 to 60 feet) for receiving large amounts of data. The Milstar satellites 

utilize extremely high frequency transponder channels that provide low to medium data rate 

communications but require small antennas (5 inches to 10 feet) and provide communications that 

are more survivable and resistant to jamming than the DSCS. The Milstar satellites are launched 

onthe Titan IV and weigh about 10,000 pounds. The last two DSCS satellites will be launched by the 

EELV and weigh about 2,500 pounds. 

Users Strategic and tactical forces across 

military services 

Original cost/ 

quantity: 

Not Available – Milstar 

$1.7 billion -DSCS 

14 satellites 

Manager Air Force Current cost/ 

quantity: 

Not Available – Milstar 

$2.7 billion-DSCS 

14 satellites 

Contractors/ 

Contract type 

RDT&E -- 

Milstar II Satellites: 

Lockheed MSL & Space Co 

October 1992 

Cost plus award fee 

DSCS III Production: 

General Electric Co 

November 1984 

Firm fixed price

Total spent/% 

total spent 

Not Available – Milstar 

and DSCS 

Source: Milstar – 12/31/1999 Selected Acquisition Report and DSCS – 9/30/91 (all dollar amounts in 

2003 dollars) 

Key Issues Affecting Programs 

• Cost growth

• Requirements changes

Chronology of Key Findings 

• 1986 GAO reported that in late 1982 the Air Force realized that the Milstar configuration could 

not be achieved given existing schedule and budgetary constraints. As a result, the program 

office began rescoping the program to conform to the budgetary constraints in a design-to-budget 

exercise. In 1983 the program office rescoped the program for a second time—this time adding 

requirements due to user input and concerns. 

• 1986 GAO reported that DOD revised the acquisition strategy from a total system integration 

package to an associate contractor approach because the teaming of TRW and Hughes (they had 

previously performed the majority of extremely high frequency work) presented an 

insurmountable challenge to other contractors. Under the associate contractor approach, rather 

than contracting for the whole system with a prime contractor, the government contracts with 

different firms for components of the system. 
Page 22 GAO-03-825R Satellite Acquisition Programs 

• 1992 GAO reported that the National Defense Authorization Act for FY1991 directed the 

Secretary of Defense to develop or carry out a plan for either a restructured Milstar or an 

alternative advanced communications satellite program that would substantially reduce program 

costs. DOD chose to restructure the program and lower costs by reducing the constellation size 

from 8 to 6 satellites, the number of control stations from 25 to 9, and the number of terminals 

from 1,721 to 1,467. To provide greater system utility to tactical forces, DOD decided to add a 

medium data rate capability to the satellite (this would increase the volume of information that 

could be processed through the satellites). 

• 1992 GAO reported that some satellite issues related to the Army’s tactical use of Milstar had not 

been resolved. For example, formal agreement had not been reached on sufficient capacity that 

the Army claimed it needed. While DOD expected the medium data rate capacity to allow about 

40 million bits of information to be passed through the satellite each second, Army 

representatives stated that to satisfy critical Army communication requirements, at least 34.4 

million bits per second would be needed—about 86 percent of the total planned throughput 

capacity for each satellite. After considering the multiservice aspects of the Milstar program, the 

Army concluded that to justify its participation in the Milstar program, the minimum throughput 

capacity acceptable would be 30.7 million bits per second—about 77 percent of the total planned 

capacity for each satellite. The remaining capacity would be allocated among the Air Force, the 

Navy, and the Marine Corps. 

• 1993 GAO reported that in 1991 as directed by Congress, DOD published its military satellite 

communications architecture study that identified 12 alternatives for various communications 

approaches that ranged from using all commercial to all military satellite programs. From among 

the 12 alternatives, DOD selected an all military approach consisting of existing systems. GAO 

reported that DOD did not select one alternative, the dual common bus that provided a better 

way to demonstrate advanced technologies. 

• 1994 GAO reported that in response to our 1993 report, DOD agreed with the need to move away 

from customized, unique busses toward common busses and stated that the most cost effective 

approach for inserting modern technology was to begin developing an advanced, lower cost, 

lower weight payload capability. 

• 1994 GAO reported that congressional directives and national policy emphasized greater use of 

commercial satellite services to reduce costs of military satellite services. However, a new 

criterion used by DOD for establishing communication requirements reduced general purpose 

requirements by over 40 percent. This change has reduced the potential for using commercial 

satellite communication services. (It should be noted, according to DOD officials, that there 

were some pointed objections in the past year to the DOD's use of commercial satellite systems 

such as INTELSAT and INMARSAT because they were "part owned" by countries such as Iraq and 

Iran.) 

• 1997 GAO reported that during the next decade, DOD anticipated a significant increase in its 

high-capacity satellite communications (DSCS) because of the shift in the national military 

strategy and availability of advanced technologies. DOD planned to replenish the existing DSCS 

constellation during fiscal year 1997-2003 with the five satellites remaining in inventory. DOD 

was modifying four of these satellites to double each satellite’s capacity from 100 megabits per 

second (MBPS) to about 200 MBPS and to replace potentially defective parts with improved 

electronic components. Even so DSCS’s replenishment satellites were not expected to keep pace 

with the projected requirements, thus an alternative would have been to lease satellite 

communications from commercial providers. However, according to DOD analysis, commercial 

leasing was more costly than acquiring equivalent commercial like capabilities. 

• 1999 GAO reported that in 1998 a draft operational test report identified four limitations 

associated with Milstar I capabilities to support strategic missions. While DOD had identified 

corrective actions, final resolutions were dependent on approval of requirements, verification 

through testing, a certification process, or obtaining necessary funds. Regarding tactical 

missions, the Air Force had encountered schedule delays related to software development for a 

critical Milstar component—called the automated communications management system—that 
Page 23 GAO-03-825R Satellite Acquisition Programs 

could adversely affect Milstar II’s timely support to tactical forces. 

 

• 2003 GAO reported that in 2000, DOD recognized the need to address the capabilities and 

coverage gap caused by the April 1999 Milstar launch failure and adopted a high-risk accelerated 

schedule for the Advanced Extremely High Frequency (AEHF) satellite system. 

GAO Reports 

GAO/NSIAD-86-45S-15,GAO/NSIAD-92-121, GAO/T-NSIAD-92-39, GAO/NSIAD-94-48, GAO/NSIAD-97-

159, GAO/NSIAD-99-2, GAO/NSIAD-93-216, GAO/T-NSIAD-94-108, GAO/T-NSIAD-94-164, GAO/NSIAD94-253 
Page 24 GAO-03-825R Satellite Acquisition Programs 

Mission: Planned Communication Systems 

Programs: Advanced Extremely High Frequency (AEHF) Communications Satellite, Wideband 

Gapfiller Satellite (WGS), and Advanced Wideband Satellite (AWS) 

Background information 

The current military satellite communications network represents decades-old technology. To meet 

the heightened demands of national security in the coming years, newer and more powerful systems 

are being developed. The AEHF is a satellite system intended to replace the existing Milstar system 

and to be DOD’s next generation of higher speed, protected communication satellites. WGS will 

augment communications services currently provided by the Defense Satellite Communications 

System (DSCS), which provides super high frequency wideband communications. WGS will provide 

an interim solution to assure DOD’s existing worldwide communication support is maintained until 

the development and deployment of the Advanced Wideband Satellite System (AWS) also known as 

TSAT. AWS is intended to become the cornerstone of DOD’s future communications architecture 

that includes supplementing the AEHF system and replacing the WGS system. 

Architecture/Key Technologies 

AEHF started in 1998 and the constellation will consist of three satellites in low inclined geosynchronous orbits (requirements still call for five satellites-four operational and one spare) that can 

transmit data to each other via cross-links. AEHF entered the Engineering Manufacturing 

Development/Production acquisition phase in November 2001. Each satellite will be launched with 

the Evolved Expendable Launch Vehicle (EELV); the initial launch is planned for December 2006. 

WGS started in 2001 and the constellation was planned to have 3 satellites, but the program recently 

added two more satellites because the initial capability of AWS, which is intended to replace AEHF 

and some aspects of WGS, may not be able to support all the super high frequency services that the 

users require. Thus additional WGS spacecraft are being acquired to bridge this gap. WGS combines 

commercial capabilities—phased array antennas and digital signal processing technology—into a 

flexible architecture that will allow WGS to evolve and satisfy the growing wideband communication 

requirements of the warfighter. WGS is currently in full rate production with the first satellite 

scheduled for a June 2004 launch aboard an EELV vehicle. 

AWS’ final configuration has not yet solidified under ongoing milsatcom transformational efforts, but 

the concept is one of applied technology and engineering that will remove capacity as a constraint on 

warfare communications. AWS plans to take advantage of the commercial and government 

technology advances of the first half of this decade to meet expected needs. Some of the 

technologies that AWS plans to use are laser crosslinks, space-based data processing and routing 

systems, and highly agile multibeam/phased-array antennas. DOD plans for the program to enter 

product development in October 2003 with the first satellite to be launched at the end of 2009. A key 

program review is planned for November 2004 to determine if sufficient technology development has 

occurred to warrant continuing the program at its planned schedule or whether the 4th and 5th AEHF 

satellites should be acquired. 

Users Military Strategic and Tactical Original cost/ 

quantity: 

$5.4 billion - AEHF 

5 satellites 

$1.0 billion – WGS 

3 satellites 
Page 25 GAO-03-825R Satellite Acquisition Programs 

Manager Air Force Current cost/ 

quantity: 

$4.8 billion -AEHF 

3 satellites 

$1.5 billion -WGS 

5 satellites 

Contractors/ 

Contract types 

AEHF’s system development and 

demonstration: Lockheed Martin 

November 2001 

Cost plus award fee 

WGS’ RDT&E and procurement: 

Boeing Satellite Systems 

January 2001 

Firm fixed price 

Total spent/ 

% total spent 

$1.1 billion - AEHF 

21.2% 

$.28 billion – WGS 

17.5% 

Source: AEHF and WGS -12/31/2002 Selected Acquisition Report (all dollars amounts in 2003 dollars) 

Key Issues Affecting Programs 

• Cost growth 

• Scheduling risks 

• Requirements Changes 

• Immature technology 

Note: Problems reported primarily affect AEHF. 

Chronology of Key Findings 

AEHF 

• 2002 DOD selected acquisition report commented on funding cuts. In fiscal year 2002, AEHF 

sustained a $70 million fiscal year 2002 congressional reduction to RDT&E funding. The AEHF 

space segment was a firm fixed price contract. According to DOD, this sizable reduction would 

likely result in a six-month launch delay to satellites l-3, breach of initial operational capability 

and a significant overall program cost increase. 

• In 2002, the Deputy Secretary of Defense decided to change the acquisition strategy of AEHF 

from a 5-satellite program to a 3-satellite program. Under the revised strategy, full capability may 

no longer be satisfied by an AEHF-only constellation. (According to DOD officials, the current 

DOD plan is to meet the full AEHF operational capability requirement with three AEHF 

spacecraft and a combination of one or two AWS spacecraft and zero, one or two Advanced Polar 

System spacecraft – this plan is driving the AWS first launch date of late 2009.) 

• 2003 GAO reported in the early phases of the program, DOD substantially and frequently altered 

its requirements; the system design changed. While considered necessary, some changes 

increased costs by hundred of millions of dollars and caused scheduling delays. 

• 2003 GAO reported that in December 1999, the two contactor teams that had been awarded 

engineering manufacturing and development contracts a few months earlier offered to form a 

“national team” to accelerate the AEHF program. DOD agreed to the national team proposal 

even though DOD recognized it meant lack of benefits from competition. 

• 2003 GAO reported that once DOD decided to accelerate its plans to build the satellites, the 

contractors proposed and DOD agreed to support a high-risk schedule that turned out to be 

overly optimistic and highly compressed—leaving little room for error and depending on a chain 

of events taking place at certain times. Substantial delays occurred when some events, such as 

the award of the contract or the availability of equipment, did not occur on time. In commenting 

on the AEHF report, DOD noted the decision to accelerate the program was based on a satellite 

constellation gap caused by the loss of a Milstar satellite. DOD also stated many in DOD 

expressed concern about the risks, but believed the risk was acceptable based on information 

known at the time. 

• 2003 GAO reported that at the time DOD decided to accelerate the program, it did not have the 

funding needed to support the activities and manpower needed to design and build the satellites 
Page 26 GAO-03-825R Satellite Acquisition Programs 

quicker. The lack of funding also contributed to schedule delays, which in turn, caused more 

cost increases. 

• 2003 GAO reported that the program demonstrated most technology knowledge at development 

with 11 of 12 critical technologies having reached maturity according to best practice standards. 

However, the program office did not project achieving maturity on the remaining technology—

the phased array antenna— by the design review in June 2004 and did not have a backup 

capability. Program officials assessed the software development for the mission control system 

as moderate risk and have developed a risk mitigation strategy. However, until these mitigation 

actions are completed, software may be at risk for unplanned cost and schedule growth. 

• 2003 GAO reported that significant design changes affected cost and delayed the AEHF schedule. 

For example, software growth occurred as more requirements were added and as the design of 

the system stabilized. These increases in software requirements for both the satellite and the 

mission control segments increased the software cost estimate by over 77 percent or about $223 

million. 

 

• 2003 GAO reported in the area of production maturity that any future problems with the 

fabrication of the communications and transmission security microprocessor, a component 

designed to limit access to satellite transmissions to authorized users, could delay the production 

schedule and the launch of the first satellite planned for December 2006. 

WGS 

• 2003 GAO reported that WGS’ critical technologies, design, and production processes are mature. 

DOD plans to rely on commercial technologies that will not require extensive product 

development. Program officials were concerned about WGS production risk that was to be 

reduced during production of commercial satellite orders. However, due to drastic loss of 

commercial satellite orders, only one commercial satellite with similar technologies as WGS is 

now leading WGS in the manufacturing schedule. Recently identified problems found on the 

“leader” program will impact WGS manufacturing schedule and might result in a first launch 

schedule delay of four to six months. 

• 2003 GAO reported that the 4th and 5th satellites have been directed by DOD to be launched in 

fiscal year 2009 and fiscal year 2010 respectively. These dates are outside the allowable dates of 

the WGS contract options clauses and will require renegotiation to finalize their cost. These later 

launch dates could result in cost increases to compensate for loss of learning curve from over a 

three-year break in production, parts obsolescence, and inflation. 

AWS 

• 2003 GAO reported that AWS is scheduled to enter product development with only one of its five 

critical technologies mature. The four immature technologies are scheduled to reach maturity by 

January 2006, more than two years after development start. Three of the four technologies have 

a backup technology in case of development difficulties. However, the Single Access Laser 

Communications technology has no backup and according to program officials any delay in 

maturing this technology would result in a slip in the expected launch date. 

• 2003 GAO reported that the program plans an aggressive development cycle even though the 

AWS is expected to provide a transformational leap in satellite communications capability. 

GAO Reports 

GAO-03-476, a report that covers multiple systems, and an AEHF report in 2003. 
Page 27 GAO-03-825R Satellite Acquisition Programs 

Mission: Navigation 

Program: NAVSTAR Global Positioning System (GPS) 

Background information 

GPS is a space-based radio-positioning system nominally consisting of a 24-satellite constellation that 

provides navigation and timing information to military and civilian users worldwide. The full 

constellation of GPS satellites has been operational for 7 years. Total program investment over a 43-

year period (through 2016) is estimated at $18.4 billion. 

Architecture/Key Technologies 

GPS satellites, in one of six medium earth orbits, circle the earth every 12 hours emitting continuous 

navigation signals on two different frequencies. In addition to the satellites, the system consists of a 

worldwide satellite control network and GPS receiver units that acquire the satellite’s signals and 

translate them into precise position and timing information. Four generations of GPS satellites have 

flown in the constellation: the Block I, the Block II, the Block IIA, and the Block IIR. Block I 

satellites were used to test the principles of space-based navigation, and lessons learned from these 

11 satellites were incorporated into later blocks. Block II, IIA and IIR satellites make up the current 

constellation. Block IIRs began replacing older Block II/IIAs in 1997. There are currently eight Block 

IIR satellites on orbit and they have reprogramable satellite processors enabling problem fixes and 

upgrades in flight. Up to eight IIR satellites are being modified to radiate both a new civil signal 

(L2C) and a new military signal (M-Code) for a more robust and capable signal structure. The first 

modified Block IIR (designated as the IIR-M) is planned for launch in 2004. Block IIF satellites are the 

next generation of GPS satellites. Block IIF provides all the capabilities of the previous blocks with 

some additional benefits as well. Improvements include an extended design life of 12 years, faster 

processors with more memory, and a new civil signal on a third frequency. The first Block IIF 

satellite is scheduled to launch in 2006. The Delta II has launched the Block II, IIA, and IIR satellites, 

and the EELV (Delta IV and Atlas V) will launch the Block IIF satellites. 

GPS Blocks IIF and IIR 

Users Military and Civilian Original cost/ 

quantity: 

$5.3 billion 

33 satellites 

Manager Air Force Current cost/ 

quantity: 

$5.8 billion 

37 satellites 

Contractors/ 

contract type 

GPS IIF OCS/MOSC development: 

BOEING NORTH AMERICAN, 

April 22, 1996 

Cost Plus Award Fee 

Block IIR SAT development: 

Lockheed Martin 

August 2000 

Firm fixed price/cost plus incentive 

Total spent/ 

% total spent 

$2.3 billion 

39.7% 

Source: 12/31/2002 Selected Acquisition Report (all dollar amounts in 2003 dollars) and DOD 

provided updates 

Key Issues Affecting Program 

• Cost Growth 

• Schedule risk 

• Component reliability problems 
Page 28 GAO-03-825R Satellite Acquisition Programs 

Chronology of Key Findings 

• 1980 GAO reported program cost (to acquire and maintain the program through the year 2000) 

increased from $1.7 billion to $8.6 billion due largely to estimates not previously included for 

replenishment satellites, launches, and user equipment. Beginning in 1983, DOD planned to use 

the Space Shuttle to launch the NAVSTAR satellites. In the event of Space Shuttle problems, 

Atlas or Titan launches would need to be used as an alternative at an additional cost of $12 

million to $38 million per satellite launch. The original full operational capability date of August 

1985 slipped 25 months.

• 1980 GAO reported that survivability of GPS satellites was a concern due to Soviet testing of an 

anti-satellite system and reliability of GPS satellite atomic clocks emerged during the 

demonstration and validation phase when 80 percent either failed or acted abnormally.

• 1983 GAO reported that the multiyear procurement estimate of $1.4 billion was likely understated 

because indications are that the prime contractor would propose a higher cost and that multiyear 

procurement savings were not correctly calculated using the present value analysis method. 

System design changes were being considered that would add considerable cost to the program. 

The program office expressed concern about the lack of backup launch vehicles in the event of 

problems with the Space Shuttle.

• 1983 GAO reported that integration testing of the spacecraft with the qualification test vehicle 

was scheduled to begin 7 to 18 months after the planned March 1983 award date of the 

production contract. The consequences of concurrency could lead to design changes and 

additional costs. The program office was considering two design changes to the production 

spacecraft, a W-sensor and enhancements related to GPS survivability.

• 1987 GAO reported that following the Challenger accident in January 1986, the Air Force reduced 

the number of GPS satellites planned for launch on the Space Shuttle from 28 to 8, because it had 

awarded a contract to McDonnell Douglas to build and launch 7 medium expendable launch 

vehicles with an option to purchase up to 13 more.

• 1987 GAO reported GPS acquisition changes after the Space Shuttle Challenger’s accident: (1) 

NASA slipped the date for the first launch schedule for the Block II satellites from January 1987 

to June 1989, (2) since the GPS program was in the production and deployment phase, the Air 

Force began stretching out the procurement process, and (3) the Air Force postponed a planned 

buy of 20 Block II-R replenishment satellites because the program office’s estimated need date 

for these replenishment satellites had slipped 3 years. 

• 1987 GAO reported that since development of GPS user equipment (consists of 1-,2-, and 5-

channel radio receiver sets) was almost 3 years behind schedule due to technical problems, the 

Challenger loss caused no further adjustment to user equipment production. 

• 1987 GAO reported that even though user equipment technology was changing rapidly with 

miniaturized and less costly sets currently available from several manufacturers, program office 

officials expressed concern about incurring substantial costs by changing to the new equipment 

and that the new equipment would not meet military specifications.

• 1991 GAO reported that DOD postponed full-rate production for receiver sets from March 1989 to 

September 1991 due to lingering receiver set reliability problems and reevaluation of program 

requirements. During development testing the Army discovered reliability problems with the 

one- and two-channel GPS receiver sets. One 5-channel set experienced a number of failures 

during multiservice testing and this led to a marginal rating of all 5-channel receivers.

GAO Reports 

GAO/PSAD-80-21, GAO/MASAD-83-9, GAO/NSIAD-87-209BR, GAO/NSIAD-91-74 
Page 29 GAO-03-825R Satellite Acquisition Programs 

Mission: Weather 

Programs: Defense Meteorological Satellite Program (DMSP) and National Polar-orbiting Operational 

Environmental Satellite System (NPOESS) 

Background information 

Since the 1960s, the U.S. has operated two separate polar-orbiting meteorological satellite systems. 

These systems are known as the Polar-orbiting Operational Environmental Satellites (POES), 

managed by the National Oceanic and Atmospheric Administration (NOAA), and the Defense 

Meteorological Satellite Program (DMSP), managed by DOD. These satellites obtain environmental 

data that are the predominate input to numerical weather prediction models—all used by weather 

forecasters, the military and the public. Polar satellites also provide data used to monitor 

environmental phenomena as well as data that are used by researchers for a variety of other studies, 

such as climate monitoring. Given the expectation that converging the POES and DMSP program 

would reduce duplication and result in sizable cost savings, a May 1994 Presidential Decision 

Directive required NOAA and DOD to converge the two satellite programs into a single program 

capable of satisfying both military and civilian requirements. The converged program is called the 

National Polar-orbiting Operational Environmental Satellite System (NPOESS). 

Architecture/Key Technologies 

DMSP satellites circle the Earth at an altitude of about 500 miles in a near-polar, sun-synchronous 

orbit. Each scans an area 1,800 miles wide and covers the entire Earth in about 12 hours. Pointing 

accuracy of the satellites is maintained by four reaction wheel assemblies that provide three-axis 

stabilization. The primary sensor on board is the Operational Linescan System that observes clouds 

via visible and infrared imagery for use in worldwide forecasts. A second important sensor is the 

Special Sensor Microwave Imager, which provides all-weather capability for worldwide tactical 

operations and is particularly useful in typing and forecasting severe storm activity. DMSP satellites 

also carry a suite of additional sensors, which collect a broad range of meteorological and space 

environmental data for forecasting and analysis. Historically DMSP satellites have been launched on 

Titan II boosters from Vandenberg Air Force Base with the most recent launch occurring on 

December 12, 1999. One more DMSP satellite will be launched on a Titan II booster. The remaining 

four DMSP satellites will be launched on Evolved Expendable Launch Vehicle (EELV) boosters from 

Vandenberg Air Force Base. There are two operational DMSP satellites. 

NPOESS program acquisition plans call for the procurement and launch of six NPOESS satellites over 

the life of the program and the integration of 14 instruments, including 12 environmental sensors. 

Together, the sensors and spacecraft receive and transmit data on atmospheric, cloud cover, 

environmental, climate, oceanographic, and solar-geophysical observations. Additional instruments 

are carried to support search and rescue efforts and data collection from a variety of globally 

deployed transmitters. NPOESS will be a launch-on-demand system, and satellites must be available 

to back up the planned launches of the final POES and DMSP satellites. The first NPOESS satellite—

designated C1—is scheduled for delivery in late 2009, according to Air Force officials. 

Users DMSP focuses on military users. 

NPOESS will be available to 

military, civil, and international 

users. 

Original cost 

estimate/quantity: 

$5.6 billion 

6 satellites 

(NPOESS only) 

Manager DMSP is managed by the Air Force. 

NPOESS is managed tri-agency 

integrated program office (DOD, 

DOC, NASA), located within NOAA. 

Current 

cost/quantity: 

$6.1 billion 

6 satellites 

(NPOESS only) 
Page 30 GAO-03-825R Satellite Acquisition Programs 

Contractors/ 

Contract type 

Engineering and Manufacturing 

Development/Production and 

Operations 

Northrop Grumman, August 2002 

Cost plus award fee/performance 

incentive, Fixed price incentive 

production options, Fixed price 

operation and support options 

Total spent/% 

total spent 

$857.9 million 

14.0 percent 

(NPOESS only) 

Source: 12/31/2002 Selected Acquisition Report (All dollar amounts in 2003 dollars) and DOD 

provided updates 

Key Issues Affecting Program 

• Requirements definition/meeting user needs 

• Technical/scheduling risks

Note: Problems reported affect NPOESS rather than DMSP 

Chronology of Key Findings 

• 1987 GAO reported that the program could save millions of dollars by converging NOAA and 

DOD weather satellite programs, which would reduce the number of satellites from four to three. 

• 1987 GAO reported that NOAA and Air Force requirements were diverging in several respects, 

making the effort to converge the two programs more difficult. For example, NOAA wanted to 

change its approach from using expendable convention satellites to installing sensors on 

serviceable platforms. The Air Force plans to continue using its current, conventional design of 

DMSPs (expendable and rocket launched) into the late 1990s before redesigning a new system. 

NOAA and Air Force also differed on quality standards for electronic components. 

• 1995 GAO reported that while the planned delivery date for the first satellite was 2004, 

transferring two DMSP satellites to NOAA might require that delivery be accelerated to as early 

as 2001. Such an action would increase both technical and schedule risks and require substantial 

increases in the convergence program’s near-term budget. 

• 1995 GAO reported that interchangeable components between DMSP and NOAA satellites were 

less than earlier estimated. Of 63 platform components, only 15 (24 percent), such as the inertial 

measurement unit and earth and sun sensing equipment, could be used on NOAA satellites 

without modifications. Another 13 components (21 percent), such as the power supply 

electronics, battery charge assembly, and solar array electronics, could be used if they were 

modified, at additional cost. The remaining 35 components (55 percent) were either substantially 

different or unique and had no value to NOAA. Additionally, DMSP mission sensors could not be 

used because they are unique and would not satisfy NOAA’ s requirements. 

• 1997 NPOESS integrated program office determined that there were scheduling, technical and 

cost risks associated with the interface data processing segment and overall system integration 

and with the space segment. 

• 2001 DOD selected acquisition report commented on schedule delays being reported to Congress. 

Specifically, DOD stated that the Joint Agency Requirements Group final review of the updated 

NPOESS requirements took longer than planned. As a result the engineering and manufacturing 

development request for proposal release, initiation of the life cycle cost estimate update, and the 

final release of the technical requirements document were delayed. The milestone decision was 

moved from February 2002 to August 2002. 

• 2002 GAO reported that technical, schedule, and cost risks were being reduced by deferring 

development of requirements, initiating earlier development of sensors and/or relying on existing 

versus new technology, conducting ground-based demonstrations of data processing system, and 

using aircraft to test sensors, among other activities. 

• 2002 GAO reported that processing centers face challenges in handling the massive increase in 
Page 31 GAO-03-825R Satellite Acquisition Programs 

the volume of data that would be sent by the new satellites. Whereas current polar satellites 

produce approximately 10 gigabytes of data per day, NPOESS is expected to provide 10 times 

that amount. Agencies involved in the program were working to address this problem by 

improving data management infrastructure, but more could be done to coordinate and further 

define these efforts. 

• 2003 GAO reported that NPOESS entered product development in August 2002 with most of its 

technologies mature. The program also completed a significant portion of the engineering 

drawings well in advance of the design review; however, the total number has yet to be 

determined. Over 5 years ago, program officials considered the program to have several high-risk 

areas. Since then, officials have implemented several efforts, which are expected to reduce all 

program areas to low risk by the first NPOESS launch, currently scheduled for the 2008- 2009 

time frame. 

GAO Reports 

GAO/NSIAD-87-107, GAO/NSIAD-95-87R, GAO-02-684, GAO/NSIAD-94-253 
Page 32 GAO-03-825R Satellite Acquisition Programs 

Mission: Launch 

Programs: Titan IV and Evolved Expendable Launch Vehicle (EELV) 

Background information 

Over the years DOD has used a fleet of expendable launch vehicles—Delta, Atlas, and Titan—to 

transport a variety of satellites into space. The Titan IV is a heavy-lift space launch vehicle used to 

carry DOD payloads such as Defense Support Program (DSP) and Milstar satellites into space. The 

Titan IV was designed to complement the National Space Transportation System (Space Shuttle) and 

serve as an independent vehicle system to assist in assuring DOD access to space. Air Force 

contracted for a total of 41 Titan IV vehicles with the last launch scheduled for 2004. DOD considers 

these launch vehicles to currently operate at or near their maximum performance capacity and to be 

very costly to produce and launch. Since 1987, the government has made several attempts to develop 

a new launch vehicle, but these attempts were canceled either because of funding issues, changing 

requirements, or controversy regarding the best solution. 

In 1994, by congressional direction, DOD developed a space launch modernization plan that led to the 

initiation of the Evolved Expendable Launch Vehicle (EELV) program. With EELV, the Air Force 

hoped to cut its heavy-lift mission costs by about 50 percent and its overall launch mission costs by at 

least 25 percent. The intent of the EELV program was to develop a family of launch vehicles, using 

common components, standard services and supporting systems that would significantly reduce the 

life-cycle cost compared to today's systems. Due to a sudden projected increase in commercial 

demand that was forecast in 1997, Air Force approved a plan to develop the Atlas V and Delta IV 

EELVs, rather than just one of them. The additional cost of maintaining two EELV launch 

infrastructures was intended to be offset by more competitive pricing. The successful launches of the 

medium-lift models of the Atlas V and Delta IV rockets in 2002 fulfilled part of the engineering, 

manufacturing, and development segment of the Air Force EELV contract to Boeing and Lockheed 

Martin. In the initial launch service award (1998) Boeing was awarded 19 launch services and 

Lockheed Martin was awarded 9 launch services. Current launch services awards have been modified 

after the 2000 EELV restructure to 19 missions for Boeing and 7 missions for Lockheed Martin. Both 

contractors plan to deploy their commercial launch service to launch both commercial and 

government missions. 

Architecture/Key Technologies 

Each Titan launch vehicle is made up of a core, a fairing, and a set of solid rocket motors. Solid 

rocket motors along with liquid rockets in the core provide the propulsion for the Titan IV. The Titan 

IV may also have an optional upper stage to provide the additional booster capacity that some 

satellite payloads require to reach their intended orbit. The EELV will use the Delta IV launch vehicle 

built by Boeing and the Atlas V built by Lockheed Martin. Boeing developed the RS-68 liquid-oxygen/ 

liquid-hydrogen main engine, for the Delta IV, which is the first cryogenic engine built in the United 

States since the Space Shuttle Main Engine. Lockheed Martin’s main engine, the RD-180, is a liquidoxygen/kerosene engine developed in a joint venture between NPOEnergomash, a Russian company, 

and UTC/Pratt and Whitney. 

Users Military satellites are launched by 

Titan IV 

Military and commercial satellites 

are launched by EELV 

Original cost/ 

quantity: 

$14.7 billion - EELV 

181 launch vehicles 

$3.2 billion - Titan IV 

10 launch vehicles 

Manager Air Force Current cost/ 

quantity: 

$18.0 billion -EELV 

182 launch vehicles 

$20.1 billion – Titan IV 

39 launch vehicles 
Page 33 GAO-03-825R Satellite Acquisition Programs 

Contractors/ 

Contract type 

EELV-Boeing and Lockheed Martin 

for EMD and initial launch services 

RDT&E: Other Transaction 

Launch Services: Firm Fixed Price 

(note: contract has since changed) 

Titan IV- Production: Lockheed 

Martin 

April 1996 

Fixed-price incentive fee 

Total spent/ 

% total spent 

$2.0 billion - EELV 

9.7% 

$16.4 billion – Titan IV 

90.9 % 

Source: Titan 12/31/2001 and EELV 12/31/2002 Selected Acquisition Report (all dollar amounts in 

2003 dollars) 

Key Issues Affecting Programs 

• Schedule risk with transition to new launch vehicle 

• Acquisition strategy changed DOD oversight role 

• Cost reductions uncertain 

Note: Problems report affect EELV rather than Titan IV 

Chronology of Key Findings 

Titan IV 

• 1991 GAO reported that slowing down Titan IV production may eventually result in an overall 

increase in program costs, but that budgetary requirements may be reduced by $47 million in 

FY1992 and $11 million in FY1993. 

• 1991 GAO reported that the Air Force planned to slowdown production of the Titan IV launch 

vehicle to better synchronize production and launch schedules. This restructuring of the 

program would result in slowing down production from 8-10 vehicles per year to not more than 6 

vehicles per year beginning in 1992. The Titan IV has an optional upper stage, the Inertial Upper 

Stage (IUS) and the newer Centaur, to provide addition booster capacity for some satellite 

payloads like the DSP. However, the DSP satellites to be boosted by the IUS were not under 

contract and their launch was expected to be delayed. In addition, planned production of the IUS 

vehicles for 1992 would likely slip to 1995. 

• 1991 GAO reported that numerous problems had delayed the transition of the solid rocket motor 

upgrade program from development and testing to production. For example, during the first 

static firing test of the rocket motor upgrade the test motor exploded which would likely result in 

at least a one-year delay in production from October 1991. 

• 1993 DOD Bottom-Up Review noted that there are two types of requirements for space launch: 

(1) performance—the ability to deliver a satellite reliably to a specific orbit, and (2) operational 

flexibility. This review reported that current launch systems generally met the first objective but 

not the second. Performance and flexibility was inadequate because of (1) the need to sustain 

three separate launch teams and associated equipment; (2) the aging and obsolescence of major 

ELV components; and (3) continued dependence on outdated launch vehicle production lines and 

manpower-intensive launch processes. This report also found that there was overcapacity in the 

American space launch industry. As a result, the three manufacturers operated at less than 50% 

capacity, which raised the unit cost of each launch vehicle. The ability to sustain three launch 

suppliers over the long term was in doubt. Foreign competition was also a factor. DOD examined 

three options to address these issues: (1) extend the life of the current launch vehicle fleet to the 

year 2030; (2) develop a new family of expendable launch vehicles to replace the current fleet 

starting in 2004; and (3) pursue a technology-focused effort to develop a reusable launch vehicle. 

Option 1 was selected as the most cost-effective option in the near-term while meeting DOD’s 

requirements. 

• 1994 DOD Space Launch Modernization Plan sought to develop roadmap options establishing 

priorities, goals, and milestones for the modernization of U.S. space launch capabilities. This 

report cited the growing sense within Congress and others that while space launch is a critical 

issue for America’s future in space, there is no coherent national plan to guide our actions into 

the next century. The study developed 15 recommendations concerning, among others, the 

industrial base, investment, requirements, and coordination. The most consistent theme of the 

study is that space launch is the key enabling capability for the Nation to exploit and explore 
Page 34 GAO-03-825R Satellite Acquisition Programs 

space. 

• 1994 GAO reported that according to the April 1994 Moorman report, fewer satellites, with longer 

lives, perform more work, which has resulted in decreased launch rates and excess launch 

vehicle production and processing capacity. The accompanying negative effect is low, inefficient 

production rates that raise unit costs. 

• 1994 GAO reported that DOD lacked an adequate and validated set of requirements for a future 

launch system. While DOD desired to improve and evolve the existing expendable launch vehicle 

fleet, it hadn’t established an approach for acquiring and evaluating Russian launch vehicle 

components and technologies to incorporate into future designs. 

EELV 

• 1997 GAO reported that cost risk was inherent in the vehicle acquisition plan because production 

could be initiated from 1 to 2 years before the first system development test flight. Such a 

strategy could result in costly modifications to the production vehicles. Since there was 

uncertainty in program cost the potential exists for program cost increases. Cost dictated that 

there would not be any launches for operational test and evaluation purposes. 

• 1997 GAO reported that the program had schedule risk because DOD would purchase the last of 

its existing expendable launch vehicles before the first system development test flight was 

scheduled to occur. If the test flight was unsuccessful, coupled with the expiration of existing 

contracts, this could create a void in DOD’s launch capability. GAO had reported on numerous 

occasions about the risks associated with program concurrency and initiating production without 

adequate testing. 

• 1997 GAO reported that the Air Force had identified vehicle propulsion, systems integration, and 

software as technical risk areas. Propulsion systems were expected to require significant 

development. Integrating all design, engineering, testing, manufacturing, and launch functions 

and the software information system were expected to be challenging tasks. The commercial 

application of the EELV posed a unique situation for the government with the winning contractor 

potentially enjoying an enhanced competitive edge (the demand for commercial launches has not 

materialized and two contractors were awarded EELV contracts) from DOD’s investment in the 

program. 

• 1998 GAO reported that the primary benefits associated with the EELV program should be 

reduced cost to the government, but that DOD’s cost reduction estimate was uncertain due to 

fluctuations in number, type and timing of launches. 

• 1998 GAO reported that meeting launch site facility preparation schedules as the primary 

program risk because construction had to begin shortly after the milestone II decision in June 

1998 to support the first EELV launch in fiscal year 2002. 

• 1998 GAO reported that DOD’s use of other transaction instruments, a relatively new acquisition 

method, would challenge DOD in determining how best to protect the government’s interests. 

Other transactions are generally not subject to the federal laws and regulations governing 

standard procurement contracts. Consequently, when using other transaction (10 U.S.C. 2731) 

authority, contracting officials are not required to include standard contract provisions that 

typically address such issues as financial management or intellectual property rights, but rather 

may structure the agreements as they consider appropriate. In addition, the two contractors 

were not willing to guarantee system performance because DOD’s financial risk was to be capped 

at $500 million per contractor, while the contractor’s financial risk would be an open-ended 

commitment. As a result, the contractors would not guarantee a launch vehicle capability to 

meet the government’s requirements (would only agree to provide a “best effort”). 

• 2001 DOD selected acquisition report commented on satellite weight growth for the Wideband 

Gapfiller Satellite (WGS) and Advanced Extremely High Frequency (AEHF) satellites. For 

example, the WGS spacecraft weight growth had driven a need to upgrade from Medium to 

Intermediate for both Delta IV and Atlas V launch vehicle configurations for the first three WGS 
Page 35 GAO-03-825R Satellite Acquisition Programs 

missions. Spacecraft weight growth on the AEHF satellite had also resulted in additional funding 

being added to the budget in order to upgrade to an Intermediate class vehicle. 

GAO Reports 

GAO/NSIAD-91-271, GAO/NSIAD-94-253, GAO/NSIAD-97-130, GAO/NSIAD-98-151 
Page 36 GAO-03-825R Satellite Acquisition Programs 

Appendix II 

Related GAO Reports 

Missile Warning and Tracking

Missile Defense: Alternative Approaches to Space Tracking and Surveillance 

System Need to be Considered. GAO-03-597. Washington, D.C.: May 23, 2003. 

Defense Acquisitions: Space-Based Infrared System-low at Risk of Missing Initial 

Deployment Date. GAO-01-6. Washington, D.C.: February 28, 2001. 

National Missile Defense: Risk and Funding Implications for the Space-Based 

Infrared Low Component. GAO/NSIAD-97-16. Washington, D.C.: February 25, 1997. 

Defense Support Program: Ground Station Upgrades Not Based on Validated 

Requirements. GAO/NSIAD-93-148. Washington, D.C.: May 21, 1993. 

Early Warning Satellites: Funding for Follow-on System Is Premature. 

GAO/NSIAD-92-39. Washington, D.C.: November 7, 1991.

Communications

Military Satellite Communications: Concerns With Milstar's Support to Strategic 

and Tactical Forces. GAO/NSIAD-99-2. Washington, D.C.: November 10, 1998.

Defense Satellite Communications: Alternative to DOD's Satellite Replacement Plan 

Would Be Less Costly. GAO/NSIAD-97-159. Washington, D.C.: July 16, 1997.

Military Satellite Communications: DOD Needs to Review Requirements and 

Strengthen Leasing Practices. GAO/NSIAD-94-48. Washington, D.C.: February 24, 

1994.

Military Satellite Communications: Opportunity to Save Billions of Dollars. 

GAO/NSIAD-93-216. Washington, D.C.: July 9, 1993. 

Military Satellite Communications: Milstar Program Issues and Cost-Saving 

Opportunities. GAO/ NSIAD-92-121. Washington, D.C.: June 26, 1992.

Military Satellite Communications: Potential for Greater Use of Commercial 

Satellite Capabilities. GAO/ T-NSIAD-92-39. Washington, D.C.: May 22, 1992.

DOD Acquisition: Case Study of the MILSTAR Satellite Communications System. 

GAO/NSIAD-86-45S-15. Washington, D.C.: July 31, 1986.

Navigation

Global Positioning System: Production Should Be Limited Until Receiver 

Reliability Problems Are Resolved. GAO/NSIAD-91-74. Washington, D.C.: March 20, 

1991.
Page 37 GAO-03-825R Satellite Acquisition Programs 

Satellite Acquisition: Global Positioning System Acquisition Changes After 

Challenger's Accident. GAO/NSIAD-87-209BR. Washington, D.C.: September 30, 

1987.

Issues Concerning the Department of Defense's Global Positioning System as It 

Enters Production. GAO/ MASAD-83-9. Washington, D.C.: January 26, 1983.

NAVSTAR Should Improve the Effectiveness of Military Missions--Cost Has 

Increased. GAO/ PSAD-80-21. Washington, D.C.: February 15, 1980. 

Weather

Polar-Orbiting Environmental Satellites: Status, Plans, and Future Data 

Management Challenges. GAO-02-684T. Washington, D.C.: July 24, 2002. 

Meteorological Satellites. GAO/NSIAD-95-87R. Washington, D.C.: February 6, 1995. 

Weather Satellites: Economies Available by Converging Government Meteorological 

Satellites. GAO/NSIAD-87-107. Washington, D.C.: April 23, 1987. 

Launch

Evolved Expendable Launch Vehicle: DOD Guidance Needed to Protect 

Government's Interest. GAO/NSIAD-98-151. Washington, D.C.: June 11, 1998. 

Access to Space: Issues Associated With DOD's Evolved Expendable Launch Vehicle 

Program. GAO/NSIAD-97-130. Washington, D.C.: June 24, 1997. 

Titan IV Launch Vehicle: Restructured Program Could Reduce Fiscal Year 1992 

Funding Needs. GAO/NSIAD-91-271. Washington, D.C.: September 6, 1991. 

Reports Covering Multiple Space Programs and Management Issues

Defense Acquisitions: Assessments of Major Weapon Programs. GAO-03-476. 

Washington, D.C.: May 15, 2003. 

Defense Space Activities: Organizational Changes Initiated, but Further 

Management Actions Needed. GAO-03-379. Washington, D.C.: April 18, 2003. 

Military Space Operations: Planning, Funding, and Acquisition Challenges Facing 

Efforts to Strengthen Space Control. GAO-02-738. Washington, D.C.: September 23, 

2002. 

Defense Industry: Consolidation and Options for Preserving Competition. 

GAO/NSIAD-98-141. Washington, D.C.: April 1, 1998. 

National Space Issues: Observations on Defense Space Programs and Activities.

GAO/NSIAD-94-253. Washington, D.C.: August 16, 1994. 
Page 38 GAO-03-825R Satellite Acquisition Programs 

Military Space Programs: Comprehensive Analysis Needed and Cost Savings 

Available. GAO/T-NSIAD-94-164. Washington, D.C.: April 14, 1994. 

Military Space Programs: Opportunities to Reduce Missile Warning and 

Communication Satellites' Costs. GAO/T-NSIAD-94-108. Washington, D.C.: 

February 2, 1994. 

Military Space Programs: An Unclassified Overview of Defense Satellite Programs 

and Launch Activities. GAO/NSIAD-90-154FS. Washington, D.C.: June 29, 1990. 

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