GAO-10-315R Space Acquisition Practices 

United States Government Accountability Office

Washington, DC 20548 

January 14, 2010 

The Honorable John Murtha 

Chairman 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

Subject: Briefing on Commercial and Department of Defense Space System 

Requirements and Acquisition Practices 

Dear Mr. Chairman: 

The Department of Defense (DOD) has had long-standing difficulties developing and 

delivering space systems on time and within budget. Some programs have been 

delayed by years and cost billions of dollars more than their initial estimates. 

Attempts to reform DOD space acquisitions in the past have sought to leverage 

commercial approaches or rely more on the commercial sector to meet DOD needs. 

These efforts have not been successful and, in some cases, have exacerbated 

problems, particularly with respect to oversight. 

In view of past challenges with adopting commercial approaches, you requested we 

examine the following questions: (1) What are the differences between commercial 

and national security space system missions, requirements, and technology 

development? (2) What acquisition practices adopted by commercial companies 

could be used for national security space system acquisitions? (3) Which acquisition 

practices adopted by commercial companies may not be readily adaptable for 

national security space system acquisitions? The attached briefing provides the 

results of our review. This letter provides a brief summary of how we conducted our 

work and the results of our review. 

Scope and Methodology

To conduct our review, we interviewed officials and reviewed and analyzed 

documentation on missions, requirements, and technology development from all 

major U.S. commercial satellite manufacturers and selected service providers, the 

two major space industry associations, a major space insurance broker, and from 

DOD—Office of the Secretary of Defense, Air Force Headquarters and Space and 

Missile Systems Center, and other organizations responsible for acquisition oversight, 
Page 2 GAO-10-315R Space Acquisition Practices 

cost analysis, and program analysis of national security space programs. We 

interviewed officials from commercial and DOD organizations and reviewed 

documentation of their space acquisition practices, and compared and contrasted 

these practices to best practices GAO has previously reported on. Based on 

interviews and GAO reports on space system acquisitions and best practices, we 

determined whether specific commercial practices—such as requirements definition, 

technology maturity, contracting, and cost estimating—may or may not be readily 

adaptable and beneficial to national security space acquisition programs. It should be 

noted that the commercial companies we interviewed are not formally recognized as 

“best practices” companies; however, many of these practices align with best 

practices we have previously reported on. 

It should also be noted that our assessment of the applicability of space acquisition 

practices adopted by U.S. commercial companies is focused primarily on unclassified 

DOD acquisitions and may not be applicable to classified National Reconnaissance 

Office (NRO) acquisitions because we have not reviewed NRO systems and 

requirements. However, under this review, we met with and obtained perspectives on 

acquisition practices from NRO officials, which we incorporated as appropriate. 

We conducted this performance audit from November 2008 to August 2009, in 

accordance with generally accepted government auditing standards. Those standards 

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

to provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. We provided a draft of the 

enclosed briefing to DOD officials for their review and comment. In an August 25, 

2009 response, DOD generally agreed with the information presented and provided 

technical comments. 

Summary

We found that although DOD and the commercial sector both use satellites for 

missions such as communications and imagery, DOD’s requirements are often more 

demanding. Consequently, while the commercial sector prefers to utilize only mature 

technologies in satellite development, DOD satellite development typically involves 

the development of new technologies to meet its more stringent needs. Additionally, 

DOD—in mission areas such as missile warning and space surveillance—has 

requirements that do not exist in the commercial sector. In these areas, DOD funds 

technology development and acquires specific capabilities because they are not 

commercially available. Overall, the commercial satellite sector delivers satellites 

faster than the DOD space sector and it typically does so within estimated costs. In 

many cases, there is no commercial market that DOD can turn to for innovations in 

space systems—it must either assume leadership in technology invention or partner 

with other space development agencies such as NASA. Moreover, the missions and 

requirements DOD is pursuing, along with the need to serve a variety of highly 

specialized users, have significant implications on the size, complexity, and risk of its 

space programs. 
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While commercial and DOD space system missions, requirements, and technology 

development differ in key ways, the commercial sector has adopted practices that 

could be applied to DOD space system acquisitions to improve cost, schedule, and 

performance outcomes. For instance, commercial firms define their requirements 

before initiating development programs, which helps to close resource gaps prior to 

program start and limit requirements growth. They tie contractor award and 

incentive fees to acquisition outcomes. They follow evolutionary product 

development approaches that enable them to achieve gradual gains in capability in 

relatively short periods while limiting the extent of technology risk they take on in 

any one increment. The commercial approach, overall, emphasizes gaining critical 

knowledge before making long-term commitments. GAO has already recommended 

these practices for DOD adoption. DOD, in fact, has recognized a need to adopt 

several of these practices and initiated efforts to do so. 

At the same time, some acquisition practices adopted by the commercial sector, 

including exclusive use of firm, fixed-price contracts and developing highly accurate 

cost estimates, may not be successfully applied to DOD in its current acquisition 

environment because of factors such as unique requirements and immature 

technologies at program start. For instance, the use of firm, fixed-price contracts for 

procuring satellites would require a change in paradigm for DOD space programs—a 

much higher level of knowledge, including mature technologies and mature design—

prior to the start of a program. Currently, however, DOD accepts greater technology 

and development risks and typically uses cost-reimbursement contracts for the first 

two satellites to be developed and produced. Some programs use fixed-price 

contracts for any additional satellites. Using fixed-price contracts for the 

development phase of a program has not worked well, partly due to the high level of 

unknowns accepted at program start. In addition, other factors, such as launch 

delays, program funding instability, changing needs, and the diverse array of 

organizations involved in DOD space programs pose additional challenges to the use 

of firm, fixed-price contracts. 

In our briefing, we concluded that given the magnitude of unanticipated cost and 

schedule growth on DOD space system acquisition programs over the last decade, 

there is a clear need to adopt practices that emphasize attaining knowledge up front, 

minimize requirements changes late in programs, and provide the right support and 

accountability to both program managers and contractors. The commercial 

companies we studied were consistent in their adoption of such approaches and the 

belief that knowledge-based development has enabled them to shorten delivery time 

frames and limit cost growth. While DOD programs have more inherent risks, DOD 

has recognized that its programs can greatly benefit from adopting similar practices 

and has initiated actions to do so. 

Previous GAO reports and testimonies have identified potential obstacles to making 

these improvements as well as areas that still need to be addressed. We have also 

stressed that adopting commercial approaches should not equate to relaxed oversight 

and decreased government technical expertise, as has been the case in the past. 

Rather, we have recommended how DOD can make trade-offs to reduce risks earlier 

and better manage those risks that it does accept. DOD has generally concurred with 
Page 4 GAO-10-315R Space Acquisition Practices 

these recommendations and has taken measures to address them, including changes 

to acquisition policies and acquisition practices. 

Agency Comments 

We provided draft copies of this letter and briefing to DOD for review and comment. 

DOD concurred with the content and message presented and had no written 

comments. 

-- -- -- -- 

We are sending copies of this letter and briefing to Department of Defense and other 

interested congressional committees. In addition, these documents will be available 

at no charge on GAO’s Web site at http://www.gao.gov. 

If you or your staff have any questions, please contact me at (202) 512-4841 or 

chaplainc@gao.gov. Contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this letter. Principal contributors to 

this project were Arthur Gallegos, Assistant Director; Martin G. Campbell; Kristine R. 

Heuwinkel; Laura T. Holliday; Richard Y. Horiuchi; Sylvia Schatz; and Peter E. 

Zwanzig. 

Sincerely yours, 

Cristina T. Chaplain 

Director, Acquisition and Sourcing Management 

Enclosures – 1 
Enclosure I: Briefing Slides 

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1

Commercial and Department of Defense 

Space System Requirements and 

Acquisition Practices

Briefing to Staff of the Subcommittee on 

Defense, House Appropriations Committee 

August 2009
Enclosure I: Briefing Slides 

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2

Contents

• Introduction

• Results in Brief

• Background

• Scope and Methodology

• Findings

• Concluding Observations

• Backup Slides
Enclosure I: Briefing Slides 

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3

Introduction

The Department of Defense (DOD) has had long-standing difficulties developing and 

delivering space systems on time and within budget. Some programs have been 

delayed by years and cost billions of dollars more than their initial estimates. 

Attempts to reform DOD space acquisitions in the past have sought to leverage 

commercial approaches or rely more on the commercial sector to meet DOD needs. 

These efforts have not been successful and, in some cases, have exacerbated 

problems, particularly with respect to oversight. In view of past challenges with 

adopting commercial approaches, this briefing addresses the following objectives:

1. What are the differences between commercial and national security 

space system missions, requirements, and technology development?

2. What acquisition practices adopted by commercial companies could be 

used for national security space system acquisitions?

3. Which acquisition practices adopted by commercial companies may not 

be readily adaptable for national security space system acquisitions?
Enclosure I: Briefing Slides 

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4

Results in Brief

• Although DOD and the commercial sector both use satellites for 

missions such as communications and imagery, DOD’s 

requirements are often more demanding. Consequently, while the 

commercial sector prefers to utilize only mature technologies in

satellite development, DOD satellite development typically 

involves the development of new technologies to meet its more 

stringent needs. Additionally, DOD—in mission areas such as 

missile warning and space surveillance—has requirements that do 

not exist in the commercial sector. In these areas, DOD funds 

technology development and acquires specific capabilities 

because they are not commercially available. 
Enclosure I: Briefing Slides 

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5

Results in Brief (cont.)

• While commercial and DOD space system missions, 

requirements, and technology development differ in key ways, the

commercial sector has adopted practices that could be applied to

DOD space system acquisitions to improve cost, schedule, and 

performance outcomes. Many of these are practices GAO has 

already recommended for DOD adoption. They emphasize gaining 

critical knowledge before making long-term commitments. DOD, in 

fact, has recognized a need to adopt several of these practices 

and initiated efforts to do so. 

• At the same time, some acquisition practices adopted by the 

commercial sector, including exclusive use of firm, fixed-price 

contracts and developing highly accurate cost estimates, may not

be successfully applied to DOD in its current acquisition 

environment because of factors such as unique requirements and 

immature technologies at program start. 
Enclosure I: Briefing Slides 

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6

Commercial Satellite Industry Overview

• Global revenues from commercial satellite activity in 2008 totaled 

$7.2 billion—$5.2 billion manufacturing; $2.0 billion launch

• U.S. revenues from commercial satellite activity in 2008 totaled $2.0 

billion ($1.8 billion manufacturing; $0.2 billion launch)

BACKGROUND

Sources: GAO analysis of Satellite Industry Association, Futron Corporation, and Federal Aviation Administration (FAA) data. 

Note: All satellite manufacturing revenues are recognized in the year of satellite launch, and geographically determined by location of 

manufacturers’ headquarters.

Total U.S. commercial satellite activity (rows 2+3) 1.8 1.4 2.0 2.4 2.0

U.S. commercial launch 0.4 0.1 0.1 0.2 0.2

1.8

(58.1%)

2.2

(45.8%)

1.9

(38.0%)

1.3

(40.6%)

1.4

(35.9%)

U.S. commercial satellite manufacturing 

(% US total)

Total U.S. satellite manufacturing (government & commercial) 3.9 3.2 5.0 4.8 3.1

Revenues from U.S. satellite manufacturing and launch activity 2004 2005 2006 2007 2008

Dollars in billions
Enclosure I: Briefing Slides 

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7

Commercial Satellite Industry Overview (cont.)

BACKGROUND

• Primary U.S. commercial satellite manufacturers: six

• Ball Aerospace, Boeing, General Dynamics, Lockheed Martin Commercial 

Space Systems, Orbital Sciences, Space Systems/Loral

• Commercial U.S.-manufactured satellites launched per year, 2004 through 2008

• Typical cost of commercial satellites: $75 million—$300 million

• Typical commercial program length: about 2-3 years

Source: GAO analysis of FAA data. 

Note: Only satellites intended for operational use are included in this count, and not those intended solely for test, development, or 

scientific research. Commercial satellites are defined as those serving a commercial function or operated by a commercial entity. 

Satellites launched 12 10 12 19 10

Year 2004 2005 2006 2007 2008
Enclosure I: Briefing Slides 

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8

DOD Satellite Acquisition Overview

• DOD investment in major space programs in 2008 totaled $6.1 billion—

$3.2 billion for research, development, test and evaluation (RDT&E); $1.2 

billion for procurement; $1.6 billion for launch (Evolved Expendable 

Launch Vehicle) 

• Primary U.S. defense satellite manufacturers: three 

• Boeing, Lockheed Martin, Northrop Grumman

• DOD satellites launched per year, 2004 through 2008

BACKGROUND

Source: GAO analysis of FAA data 

Note: Only satellites intended for operational use are included in this count, and not those intended solely for test, development, or 

scientific research. DOD satellites are defined as those manufactured for DOD or any of its military services, or for servicerelated entities such as the National Reconnaissance Office and Defense Advanced Research Projects Agency.

Satellites launched 5 4 5 6 2

Year 2004 2005 2006 2007 2008
Enclosure I: Briefing Slides 

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9

DOD Satellite Acquisition Overview (cont.)

• Program acquisition unit cost of current major DOD 

satellite acquisition programs: $216.3 million—$3.1 

billion 

• For satellite communications programs—Advanced 

Extremely High Frequency, Mobile User Objective 

System, and Wideband Global SATCOM—the 

range is $414.6 million—$2.6 billion

• Schedule from program start to first launch of current 

major DOD satellite acquisition programs: about 5 to 

14 years

BACKGROUND
Enclosure I: Briefing Slides 

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10

DOD Investment in Major Space Programs

BACKGROUND

Source: GAO analysis of fiscal year 2009 DOD data.

Note: Numbers may not add due to rounding.

aIncludes the following programs: Advanced Extremely High Frequency, Evolved Expendable Launch Vehicle, Global Broadcast Service,

Navstar Global Positioning System, Global Positioning System IIIA, Mobile User Objective System, National Polar-orbiting Operational 

Environmental System, Space Based Infrared System High, Space Based Space Surveillance Block 10, Space Tracking and Surveillance

System, and Wideband Global SATCOM. Does not include development efforts that have yet to formally initiate acquisitions, including Third 

Generation Infrared Surveillance, Infrared Augmentation Satellite, and Transformational Satellite Communications System.

bOther includes military construction and acquisition operations and maintenance costs.

Total 6,086.6 7,198.7 7,138.8 5,578.6 5,222.7 4,665.3

Otherb 22.5 17.5 18.1 10.5 12.2 0.0

Procurement 2,859.7 4,185.0 4,369.6 3,115.2 3,276.7 2,829.2

RDT&E 3,204.4 2,996.2 2,751.2 2,452.9 1,933.9 1,836.1

2008 2009 2010 2011 2012 2013

Fiscal year 2009 dollars in millionsa
Enclosure I: Briefing Slides 

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11

Some of DOD’s Past Attempts to Leverage 

Commercial Practices Were Unsuccessful

• One of DOD’s attempts to leverage commercial practices was Total System 

Performance Responsibility (TSPR)*, which 

• Aimed to streamline DOD’s acquisition process and leverage innovation 

and management expertise from the private sector 

• Gave contractor total responsibility for the integration of a weapon system 

and for meeting DOD’s requirements

• Reduced government oversight and shifted key decision-making 

responsibilities onto contractors

• Magnified problems on a number of satellite acquisition programs because 

it was implemented in a manner that enabled requirements creep and poor 

contractor performance 

• For some programs, TSPR resulted in relaxed specifications and 

inspections of the contractor, loss of quality in the manufacturing process, 

and poor-quality parts that caused test failures, unexpected redesigns, and 

late delivery of parts

*See GAO-07-96 and GAO-09-325. Full citations are provided on slides 46 and 47.

BACKGROUND
Enclosure I: Briefing Slides 

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12

DOD Has Made Erroneous Assumptions in the 

Past About Leveraging the Commercial Sector

• Wideband Global SATCOM*

• DOD attempted to leverage commercial demand for satellites with similar technologies, but the commercial demand did not 

materialize

• Initial operational capability took twice as long as planned due largely to manufacturing problems

• Evolved Expendable Launch Vehicle**

• DOD attempted to leverage commercial launch demand but the commercial demand did not materialize

• The government had to bear most of the cost burden and total 

program costs nearly doubled (increased by about 96 percent) from first to latest cost baseline

*See GAO-07-96, GAO-05-301, and GAO-06-391.

**See GAO-08-1039. 

BACKGROUND
Enclosure I: Briefing Slides 

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13

Scope and Methodology

• We interviewed officials and reviewed and analyzed documentation on missions, requirements, and technology development from all major U.S. 

commercial satellite manufacturers and selected service providers, the two 

major space industry associations, a major space insurance broker, and 

from DOD-- Office of the Secretary of Defense, Air Force Headquarters 

and Space and Missile Systems Center, and other organizations 

responsible for acquisition oversight, cost analysis, and program analysis 

of national security space programs.

• We interviewed officials from commercial and DOD organizations and reviewed documentation of their space acquisition practices, and compared 

and contrasted these practices to best practices GAO has previously 

reported on.

• Based on interviews and GAO reports on space system acquisitions and best practices, we determined whether specific commercial practices –

such as requirements definition, technology maturity, contracting and cost 

estimating – may or may not be readily adaptable and beneficial to national 

security space acquisition programs.
Enclosure I: Briefing Slides 

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14

Scope and Methodology (cont.)

• Limitations

• Our assessment of the applicability of space acquisition practices adopted by U.S. commercial companies is focused primarily on unclassified DOD 

acquisitions and may not be applicable to classified National Reconnaissance 

Office (NRO) acquisitions because we have not reviewed NRO systems and 

requirements. However, under this review, we met with and obtained 

perspectives on acquisition practices from NRO officials, which we incorporated 

as appropriate.

• The commercial companies we interviewed are not formally recognized as “best practices” companies; however, we identified practices that company 

officials told us helped their programs succeed, and many of these practices 

align with best practices we have previously reported on.

• We conducted this performance audit from November 2008 to August 2009, in 

accordance with generally accepted government auditing standards. Those 

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

evidence to provide a reasonable basis for our findings and conclusions based on 

our audit objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives.
Enclosure I: Briefing Slides 

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15

Defense Offices Visited

SCOPE AND METHODOLOGY

• Office of the Secretary of Defense, 

Cost Analysis Improvement Group, 

Washington, DC

• National Reconnaissance Office, 

Chantilly, VA

• National Security Space Office, 

Washington, DC

Other Defense

• Office of the Director, Program 

Analysis and Evaluation, 

Washington, DC

• Office of the Under Secretary of 

Defense for Acquisition, 

Technology, and Logistics, 

Washington, DC

• Office of the Assistant Secretary for 

Financial Management and 

Comptroller, Washington, DC

Air Force

• Under Secretary of the Air Force, 

Directorate of Space Acquisitions, 

Washington, DC

• Space and Missile Systems Center, 

Los Angeles Air Force Base, CA
Enclosure I: Briefing Slides 

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16

Commercial and Other Organizations Visited

SCOPE AND METHODOLOGY

• Satellite Industry Association, 

Washington, DC

• Space Foundation, Washington, DC

Other

• Aerospace Corp., El Segundo, CA

• Former Under Secretary of the Air 

Force, Denver, CO

• Futron Corporation, Bethesda, MD

• Intelsat, Washington, DC

• International Space Brokers, Rosslyn, 

VA

Other commercial satellite industry

• DigitalGlobe, Longmont, CO

• Iridium Satellite, LLC, Bethesda, MD 

• Americom Government Services, 

McLean, VA

• Lockheed Martin Commercial Space 

Systems, Newtown, PA

• Orbital Sciences Corp., Dulles, VA

• Space Systems/Loral, Palo Alto, CA

Commercial satellite manufacturers

• Ball Aerospace & Technologies Corp., 

Boulder, CO

• Boeing Satellite Systems International, 

El Segundo, CA
Enclosure I: Briefing Slides 

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17

Key Documents Analyzed

• DOD acquisition policies

• DOD space program-specific documentation, such as Selected Acquisition 

Reports, acquisition decision memoranda, and acquisition strategies

• Report to Congress of the Independent Assessment Panel on the 

Organization and Management of National Security Space, July 2008

• Report of the Defense Science Board/Air Force Scientific Advisory Board 

Joint Task Force on Acquisition of National Security Space Programs, May 

2003, and update, July 2004

• Report of the Commission to Assess United States National Security 

Space Management and Organization, January 2001

• GAO reports on space and nonspace acquisitions, best acquisition 

practices, cost estimating, program management, contracting, and

personnel management

SCOPE AND METHODOLOGY
Enclosure I: Briefing Slides 

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18

Commercial and DOD Missions, Requirements, 

and Technology Development Differ in Key Ways

• Missions and Requirements

• Technology Development and Maturity

OBJECTIVE 1 OVERVIEW
Enclosure I: Briefing Slides 

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19

DOD Satellite Missions and Requirements Differ from 

Those of the Commercial Sector

• DOD space system acquisitions meet warfighter and intelligence community 

requirements, while commercial space system acquisitions meet market demands

• In some areas, DOD and commercial needs are similar

• Communications

• Imagery

• In some areas, DOD and commercial needs converge, but the commercial sector 

relies on government satellites

• Position, navigation, and timing

• Weather, climate, and environmental monitoring

• In other areas, DOD has needs that do not apply to the commercial sector

• Missile warning

• Space surveillance

• Nuclear detonation detection

MISSIONS AND REQUIRMENTS
Enclosure I: Briefing Slides 

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20

DOD Uses Commercially Available Satellite 

Services to Fulfill Some Missions

• When DOD needs have aligned with commercially available satellite products, DOD 

has purchased services from commercial providers

• Communications

• DOD uses commercial fixed satellite services to augment its own satellite 

communications capabilities

• Nevertheless, DOD in some cases tailors these services to meet its unique 

needs. For example, DOD established a government gateway, which 

includes ground-based systems that, among other things, enable users to 

directly access DOD-specific communications systems 

• Imagery 

• DOD is the largest purchaser of U.S. commercial satellite imagery

• DOD helped fund the development of commercial imagery satellites and 

purchases satellite imagery from DigitalGlobe and GeoEye

MISSIONS AND REQUIREMENTS
Enclosure I: Briefing Slides 

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21

DOD Requirements Are Often More Stringent 

Than Those of the Commercial Sector

• For mission areas that apply to both DOD and the 

commercial sector, such as communications and imagery, 

DOD’s requirements often call for the delivery of more 

robust capabilities.

MISSIONS AND REQUIREMENTS
Enclosure I: Briefing Slides 

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22

DOD Communications Satellite Requirements Frequently 

Differ from Those of the Commercial Sector

• Coverage and availability: DOD typically has more demanding requirements for coverage 

and availability, such as for communications using radio frequencies resistant to 

atmospheric scintillation in polar regions and under challenging conditions such as in 

dense foliage and adverse weather

• Survivability: DOD typically has more demanding standards for radiation hardened parts, 

such as microelectronics, which are

• designed and fabricated with the specific goal of enduring the harshest space 

radiation environments, including nuclear events 

• time consuming to obtain—companies typically need to create separate production 

lines and in some cases special facilities; only small volumes are typically produced

• Jam resistance: DOD has demanding requirements for jam resistance, addressed via

• frequency hopping in which the transmission codes “hop” across the bandwidth at a 

very rapid rate

• nulling antennas that cancel out the impact of jamming emitters designed to disrupt 

U.S. warfighter communications 

• Secure communications: DOD has requirements for sophisticated encryption to enable 

communications at varying security levels

MISSIONS AND REQUIREMENTS
Enclosure I: Briefing Slides 

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DOD Uses Higher Resolution Imagery Than 

the Commercial Sector

• U.S. commercial companies are allowed to sell imagery with a 

maximum of 50 centimeters resolution in black-and-white mode and 

about 2 meters in color to non-U.S. government entities

• GeoEye can provide optical imagery of 41 centimeters black-andwhite resolution to DOD and other agencies in the intelligence 

community

• U.S. government-developed surveillance satellites yield even 

higher resolution

MISSIONS AND REQUIREMENTS
Enclosure I: Briefing Slides 

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24

Many DOD Requirements Do Not Align with 

Commercial Needs, Call for Technology Invention

• Many DOD space system acquisitions are designed to meet warfighter and intelligence 

community requirements that do not align with commercial needs and often require leading 

edge technologies. For example

• Missile warning and defense

• highly sensitive infrared sensors to detect missile heat signatures

• cryocoolers that cool focal plane arrays to cryogenic temperatures, in some cases down to 

10 degrees Kelvin, create minimal vibration, and have sufficiently long lifespans

• Position, navigation, and timing

• several synchronized atomic clocks per satellite to enable accurate time signal triangulation

• advanced anti-jam capabilities to improve system security, accuracy, and reliability

• Weather, climate, and environmental monitoring

• advanced technology microwave sounder to produce daily global atmospheric temperature, 

humidity, and pressure profiles

• cross-tracked infrared sounder to collect measurements of the earth’s radiation to determine 

vertical distribution of temperature, moisture, and pressure in the atmosphere

• visible infrared imager radiometer suite to collect images and radiometric data used to 

provide data on the earth’s clouds, atmosphere, ocean, and land surfaces

• Nuclear detonation detection

• technologies to measure neutron time-of-flight spectrum, prompt gamma rays from a nuclear 

detonation, and delayed gamma rays from a nuclear detonation debris cloud 

MISSIONS AND REQUIREMENTS
Enclosure I: Briefing Slides 

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25

• DOD often attempts to meet the needs of multiple users on one satellite, resulting in 

more missions and/or payloads per satellite, for example:

• The National Polar-orbiting Operational Environmental Satellite System 

(NPOESS) is managed by a tri-agency program office, representing the 

DOD/United States Air Force, the Department of Commerce’s National Oceanic 

and Atmospheric Administration, and the National Aeronautics and Space 

Administration. Its original plans called for 13 instruments, including 10 

environmental sensors and 3 subsystems to meet the needs of weather 

forecasters, climatologists, and the military. 

• The Space Based Infrared System (SBIRS) is intended to meet requirements of 

various parts of DOD and the intelligence community for multiple missions, 

including missile warning, missile defense, technical intelligence, and 

battlespace awareness. 

• Commercial companies frequently attempt to meet the needs of one customer per 

satellite, often resulting in single-mission satellites.

DOD Frequently Attempts to Meet the Needs 

of Multiple Customers

MISSIONS AND REQUIREMENTS
Enclosure I: Briefing Slides 

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26

Companies That Purchase Commercial 

Satellites Prefer Mature Technologies

• Companies prefer mature technologies, ideally at technology readiness level 

(TRL) 9 (see slide 48 for definitions of TRLs), so that risks, costs, and 

schedules are known at program start.

• Commercial companies sometimes conduct technology development. When 

they do, development is typically incremental and is conducted prior to program 

start. In addition, more time is allotted to manufacture satellites that incorporate 

a new technology due to the need for additional integration work.

• Although companies prefer to use mature technologies for commercial 

satellites, they sometimes employ fairly sophisticated technologies, such as

• Large unfurlable antenna reflectors to reduce satellite launch volume

• Lithium-ion batteries for reduced satellite weight

• Ion propulsion for reduced satellite weight

• Phased array antennas for agile coverage

TECHNOLOGY DEVELOPMENT AND MATURITY
Enclosure I: Briefing Slides 

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DOD Funds Technology Development When Needed 

Technologies Are Not Commercially Available 

• To meet requirements that are unique to DOD, the government has 

supported development of many leading-edge technologies (such as those 

shown on slide 24). For these technologies, the industrial base is 

supported in large part by DOD, the intelligence community, and NASA.

• However, rather than maturing technologies in a robust science and 

technology (S&T) environment prior to program start, DOD has frequently 

allowed immature technologies into space programs. For example, we 

have identified several DOD satellite programs in which multiple

technologies were below TRL 6 at program start, such as Advanced

Extremely High Frequency, NPOESS, SBIRS High, and SBIRS Low.

TECHNOLOGY DEVELOPMENT AND MATURITY
Enclosure I: Briefing Slides 

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Development Risk Increases with the Number 

of New Technologies in a Program 

According to a 2007 National Research Council Space Studies Board 

report:

• Cost growth is closely related to development risk, which 

increases nonlinearly with the number of new technologies. 

As more immature technologies are included in a program, 

the likelihood of cost and schedule problems increases 

substantially.

TECHNOLOGY DEVELOPMENT AND MATURITY
Enclosure I: Briefing Slides 

Page 33 GAO-10-315R Space Acquisition Practices 

29

Some Commercially Adopted Practices Could Be 

Applied to DOD Space System Acquisitions

• Mature critical technologies prior to program start

• Use evolutionary product development

• Define requirements to close resource gaps prior to 

program start and limit requirements growth 

• Tie contractor award/incentive fees to acquisition 

outcomes

• Empower program managers and hold them 

accountable

• Obtain independent oversight 

OBJECTIVE 2 OVERVIEW
Enclosure I: Briefing Slides 

Page 34 GAO-10-315R Space Acquisition Practices 

30

Ensure Technologies Are Mature Prior to 

Beginning an Acquisition Program

TECHNOLOGY MATURITY

Reduce cost and schedule 

inefficiencies

Historically, has used immature 

technologies

Use only mature technologies

• Achieving a high level of technology 

maturity prior to program initiation 

helps (1) ensure resources and 

requirements match, and (2) avoid 

concurrently developing 

technologies, finalizing designs, and 

demonstrating manufacturing 

processes, which can lead to cost 

and schedule inefficiencies.

Potential obstacle

• There is a long-standing disconnect 

between the research laboratories 

and acquisition programs; DOD lacks 

an S&T strategy for space; and the 

funding process favors acquisitions 

over S&T programs.

• Unique nature of missions require 

technology invention/discovery, 

but it is frequently not finished 

prior to system development. 

• Many technologies below TRL 6 at 

program start. 

• DOD acquisition policies and 

congressional legislation reflect 

preference for maturing 

technologies prior to program 

start. 

• Recent efforts (e.g., GPS IIIA and 

Operationally Responsive Space 

efforts) have demonstrated a 

change to the practice.

• Companies typically look to the 

government to push and prove 

technologies first. 

• Technologies included are 

typically at TRL 9, in order to 

foster program stability, ensure 

reliability, and to obtain favorable 

insurance rates. 

• When technology discovery is 

conducted, it is done so prior to 

system development. 

Potential benefit to DOD and 

obstacles to implementation

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 35 GAO-10-315R Space Acquisition Practices 

31

Unless Revolutionary Technologies Are Required, 

Use Evolutionary Product Development

EVOLUTIONARY PRODUCT DEVELOPMENT

Offers an initial product quickly and 

at lower cost while technologies are 

matured for the next increment

Historically, has promised 

revolutionary advances in 

capabilities

Development is evolutionary

• While the user may not initially 

receive the ultimate capability under 

this approach, the initial product is 

available sooner and at a lower, 

more predictable cost. 

• Exceptions would involve efforts, 

such as the first GPS, that introduce 

a new capability or programs focused 

on countering new threats. 

Potential obstacle

• Competition for funding incentivizes

programs to promise revolutionary 

advances based on optimistic 

assumptions.

• In some cases, revolutionary 

advances in capabilities may be 

sought, such as for first-time or 

one-of-a-kind efforts to satisfy a 

new urgent requirement. However, 

most programs have attempted to 

satisfy all requirements in a single 

step, regardless of design or 

technology challenges.

• DOD frequently adopts extensive 

new designs and custom-made 

spacecraft buses and payloads to 

meet the needs of multiple users.

• Recent efforts have adopted a 

more evolutionary strategy.

• To achieve stability, reduce risk, 

and enable short program 

schedules: (1) new design 

elements and new parts are 

minimized, and (2) standardized 

designs and parts are tailored as 

needed for customers. This 

enables companies to focus 

attention on critical design, 

development, and integration.

• Design elements not achievable 

in the initial development are 

planned for future generations of 

the product, which allows time 

for technologies to mature.

Potential benefit to DOD and 

obstacles to implementation

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 36 GAO-10-315R Space Acquisition Practices 

32

Define Requirements to Close Resource Gaps Prior to 

Program Start and Limit Requirements Growth

REQUIREMENTS DEFINITION

Helps reduce program cost, 

schedule, and performance risks.

Requirements are typically not 

well defined by program start but 

largely remain stable

Ensure requirements are well 

defined prior to program start 

and remain stable

• Early systems engineering 

knowledge helps identify and 

address gaps, such as overly 

optimistic requirements that cannot 

be met with current resources.

Potential obstacles

• DOD lacks a robust systems 

engineering functionality.

• Agreement on requirements for 

space systems is difficult because a 

diverse array of organizations are 

involved in setting requirements. 

Once agreement is achieved, it is 

difficult to change requirements.

• Poorly defined requirements have 

had significant consequences for 

funding, time, and technology 

development. While in the past, 

some programs experienced 

requirements creep resulting in 

large cost and schedule 

increases, DOD has made 

improvements in this area.

• Systems engineering is conducted 

after programs have been funded 

and launched—too late to identify 

resource gaps, shape 

requirements, and inform 

estimates. Early focus is on 

defining requirements and 

maturing new technologies.

• Requirements are well defined 

prior to program start so that 

costs and feasibility are 

understood and trade-offs can 

be made if needed. 

• Requirements are negotiated 

during the contract proposal 

process to align with the 

developer’s capabilities and 

strengths. The percent “new” in 

the design may range from 5-20 

percent—for those new aspects, 

robust systems engineering is 

applied prior to program start to 

minimize unknowns. Afterward, 

systems engineering is focused 

on integrating mature 

technologies onto a platform.

Potential benefit to DOD and 

obstacles to implementation

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 37 GAO-10-315R Space Acquisition Practices 

33

Tie Contractor Award and Incentive Fees to 

Acquisition Outcomes

AWARD AND INCENTIVE FEES

If aligned with acquisition 

outcomes, award and incentive fees 

might motivate good contractor 

performance

DOD typically uses award and 

incentive fee provisions in its 

contracts and has withheld fees 

for poor performance

Incentives and penalties that 

emphasize on-time delivery and 

on-orbit performance motivate 

satellite developers

• We recently reported that DOD has 

achieved savings on some programs 

by limiting the opportunities for 

earning unearned fees in subsequent 

periods and tying award fee criteria 

to acquisition outcomes.* 

Potential obstacle

• Because DOD has not developed 

methods to evaluate the 

effectiveness of award fees, it is 

unaware of whether these contracts 

are being used effectively, poor 

practices go unnoticed, and positive 

practices are isolated. 

• DOD’s guidance states that award 

fees must be linked to desired 

outcomes and prohibits payment 

of award fees to contractors for 

unsatisfactory performance.

• Almost all current major space 

acquisitions use award and 

incentive fee provisions in 

contracts for development of initial 

satellites. We reported that DOD 

does not consistently evaluate 

contractors based on award-fee 

criteria related to key acquisition 

outcomes.*

• Satellite customers typically tie 

about 10 to 20 percent of the 

contract value to successful onorbit performance of the satellite 

over its expected life, which is 

frequently 15 years.

• This performance-based 

payment is key to developers’ 

profitability and is reduced or 

eliminated accordingly if there 

are on-orbit problems.

Potential benefit to DOD and 

obstacles to implementation

Commercial practice Prevailing DOD practice

*See GAO-06-66 and GAO-09-630.
Enclosure I: Briefing Slides 

Page 38 GAO-10-315R Space Acquisition Practices 

34

Empower Program Managers to Execute Their 

Programs and Hold Them Accountable for Outcomes

PROGRAM MANAGER AUTHORITY

Improve performance, cost, and 

schedule outcomes

Program managers lack strong 

authority and are generally not 

held accountable for executing 

programs within targets

Give program managers 

decision-making authority and 

hold them accountable for 

acquisition outcomes

• Empowers program managers and 

holds them accountable for delivering 

new products when needed within 

quality, cost, and performance 

targets.

Potential obstacle

• Measures to empower program 

managers and hold them 

accountable will not be as effective 

as they could until DOD ensures that 

acquisition programs are executable, 

i.e., the needs can best be met with 

the chosen concept and the concept 

can be developed and produced 

within existing resources.

• Program managers: have little 

control over funding stability of 

incrementally funded programs 

and shifting funds within 

programs; cannot veto new 

program requirements, which may 

overly stretch their programs; and 

have little authority over staffing.

• Because there are so many 

aspects of programs outside the 

program manager’s control, DOD 

is unable to hold them 

accountable.

• In the past, DOD program 

managers had more authority.

• Program managers are given 

direct responsibility for the 

direction, planning, assessment, 

and resource control of their 

programs, which are fully funded 

at outset.

• Program managers are held 

accountable for their decisions 

and their performance evaluation 

is based on how well they meet 

cost, schedule, and performance 

elements.

• Program managers are not held 

accountable for matters beyond 

their control.

Potential benefit to DOD and 

obstacles to implementation

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 39 GAO-10-315R Space Acquisition Practices 

35

Obtain Independent Oversight of Satellite 

Developers

INDEPENDENT OVERSIGHT

Helps to ensure quality program 

outcomes

Some independent oversight is 

applied

Insurers provide independent 

oversight of satellite developers

• Provides independent perspectives 

on program cost, schedule, and 

performance risks.

Potential obstacle

• DOD’s quality assurance workforce, 

and the amount of oversight it can 

provide, has decreased. 

• While DOD does not obtain 

insurance for its satellite 

programs, some independent 

oversight is currently being 

applied.

• Defense Contract Management 

Agency (DCMA) and Defense 

Contract Audit Agency (DCAA) 

provide independent oversight of 

developers’ activities. 

• The insurance industry plays a 

significant role in overseeing 

satellite acquisitions and 

ensuring quality.

• Insurance underwriters consider 

factors such as favorable onorbit performance records and 

use of reliable and flight-proven 

technology when determining 

insurance terms.

• In order for customers to obtain 

favorable insurance terms, 

developers adhere to strict 

quality standards. 

Potential benefit to DOD and 

obstacles to implementation

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 40 GAO-10-315R Space Acquisition Practices 

36

In the Current Acquisition Environment, Some 

Commercially Adopted Practices May Not Be Readily 

Adaptable to DOD Space System Acquisitions

• Exclusive use of firm, fixed-price contracts

• Highly accurate satellite cost estimates

• Maintenance of long-term relationships with suppliers

OBJECTIVE 3 OVERVIEW
Enclosure I: Briefing Slides 

Page 41 GAO-10-315R Space Acquisition Practices 

37

While Commercial Firms Exclusively Use Firm, FixedPrice Contracts, DOD Varies Contract Types

CONTRACT TYPE

Higher DOD risk levels may require 

multiple contracting options 

Typically uses costreimbursement contracts Exclusive use of firm, fixedprice contracts

• There is ongoing debate regarding 

whether firm, fixed-price contracting 

could be applied to DOD space 

systems. 

• Use of firm, fixed-price contracting for 

the first two satellites would require a 

change in paradigm for DOD space 

programs—a much higher level of 

knowledge, including mature 

technologies and mature design, would 

be required prior to program start.

• Other factors, such as launch delays, 

funding instability, and changing needs 

pose additional challenges to the use of 

firm, fixed-price contracts.

• DOD accepts greater technology 

and development risks. Costs 

associated with technology 

invention are difficult to estimate. 

• Our work has found that fixedprice contracting generally has not 

worked for DOD space systems 

due to the high level of unknowns 

accepted at program start.

• Almost all current major satellite 

programs use cost-reimbursement 

contracts for the first two satellites 

to be developed and produced. 

Some programs use fixed-price 

contracts for any additional 

satellites.

• Commercial customers are risk 

averse and use firm, fixed-price 

contracts to better ensure cost, 

schedule, and performance 

parameters are well understood.

Reasons why practice may not 

be readily adaptable to DOD in 

current acquisition environment

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 42 GAO-10-315R Space Acquisition Practices 

38

Commercial Satellite Cost Estimates Are More 

Accurate Than DOD Cost Estimates

COST ESTIMATING

Significant unknowns at program 

initiation make it difficult to develop 

more accurate cost estimates

Now aims to estimate costs at the 

80 percent confidence level, but 

significant unknowns remain 

about program content and risk

Costs are estimated at an 80 to 

90 percent confidence level and 

accurately capture program 

content and risk

• DOD officials stated that the 

requirement to estimate at the 80 

percent confidence level would render 

the space portfolio unaffordable due to 

the significant unknowns at the time 

programs are initiated.

• In order to develop substantially more 

accurate estimates, risks related to 

factors such as unique requirements 

and first time use of a technology limit 

DOD’s ability to develop realistic cost 

estimates and would need to be retired 

prior to program initiation.

• Back-to-basics policy calls for 

space acquisition cost estimates 

at the 80 percent confidence level. 

Recent legislation requires 

justification of lower confidence 

level estimates. 

• Costs for DOD space acquisitions 

in recent decades have been 

consistently underestimated, 

exacerbating acquisition problems.

• Recent legislation elevates the 

role of DOD’s independent cost 

estimating function.

• Firm, fixed-price contracting 

motivates developers to fully 

understand costs, which in turn 

makes cost estimates at the 80 

to 90 percent confidence level 

more feasible.

• Cost estimates accurately 

capture program content and risk 

because developers minimize 

design changes, rely on mature 

technologies, and use multiple 

information sources to build and 

cross-check estimates. 

Reasons why practice may not 

be readily adaptable to DOD in 

current acquisition environment

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 43 GAO-10-315R Space Acquisition Practices 

39

Commercial Firms Foster Long-Term Relationships with 

Suppliers While DOD Fosters Competition

SUPPLY CHAIN RELATIONSHIPS

Federal Acquisition Regulation (FAR) 

encourages competition in the 

acquisition process

DOD is impartial to long-term 

working relationships with 

suppliers

Strive to maintain long-term 

relationships with suppliers

• Promoting competition is one of the 

guiding principles of the FAR. 

• While some DOD officials indicated 

support for longer-term relationships 

with suppliers, DOD’s efforts to 

promote competition, lower satellite 

acquisition volume, and its custom 

satellite designs may limit opportunities 

for long-term relationships.

• Because DOD is focused on 

obtaining a lower cost for its space 

acquisitions, DOD has sacrificed 

long-term relationships to start 

new ones if it appears likely to 

lower costs.

• Commercial satellite 

manufacturers often have longterm relationships with suppliers.

• Some companies’ sufficiently 

large and steady 

manufacturing volume of 

satellites that are somewhat 

standardized enables them to 

provide their subcontractors 

with steady business and to 

have more than one supplier 

for a given part.

Reasons why practice may not 

be readily adaptable to DOD in 

current acquisition environment

Commercial practice Prevailing DOD practice
Enclosure I: Briefing Slides 

Page 44 GAO-10-315R Space Acquisition Practices 

40

Concluding Observations

• The commercial satellite sector delivers satellites faster than the 

DOD space sector and it typically does so within estimated costs. 

However, DOD and the commercial sector are seeking to develop 

very different capabilities. In many cases, there is no commercial 

market which DOD can turn to for innovations in space systems—it 

must either assume leadership in technology invention or partner

with other space development agencies such as NASA. Moreover, 

the missions and requirements DOD is pursuing, along with the 

need to serve a variety of highly specialized communities, have 

significant implications on the size, complexity, and risk of its space 

programs.
Enclosure I: Briefing Slides 

Page 45 GAO-10-315R Space Acquisition Practices 

41

Concluding Observations (cont.)

• Nevertheless, given the magnitude of unanticipated cost and 

schedule growth on DOD space system acquisition programs over 

the last decade, there is a clear need to adopt practices that 

emphasize attaining knowledge up front, minimize requirements 

changes late in programs, and provide the right support and 

accountability for both program managers and contractors. The 

commercial companies we studied were consistent in their adoption 

of such approaches and their belief that knowledge-based 

development has enabled them to shorten delivery timeframes and 

limit cost growth. While DOD programs will continue to have more

inherent risks, DOD has recognized that its programs can greatly

benefit from adopting similar practices and has initiated actions to 

do so. 
Enclosure I: Briefing Slides 

Page 46 GAO-10-315R Space Acquisition Practices 

42

Concluding Observations (cont.)

• Previous GAO reports and testimonies have identified potential 

obstacles to making these improvements as well as areas that still 

need to be addressed. We have also stressed that adopting 

commercial approaches should not equate to relaxed oversight and

decreased government technical expertise as has been the case in

the past. Rather, we have recommended how DOD can make 

tradeoffs to reduce risks earlier and better manage those that it 

does accept. DOD has generally concurred with these 

recommendations and has taken measures to address them, 

including changes to acquisition policies and acquisition practices. 

• A list of some of our prior recommendations is provided on slides 44 

and 45. 
Enclosure I: Briefing Slides 

Page 47 GAO-10-315R Space Acquisition Practices 

43

BACKUP SLIDES
Enclosure I: Briefing Slides 

Page 48 GAO-10-315R Space Acquisition Practices 

44

Prior GAO Recommendations: Actions Needed to 

Address Space and Weapon Acquisition Problems

• Before undertaking new programs 

• Prioritize investments so that projects can be fully funded and it is clear where 

projects stand in relation to the overall portfolio.

• Follow an evolutionary path toward meeting mission needs rather than 

attempting to satisfy all needs in a single step.

• Match requirements to resources—that is, time, money, technology, and 

people—before undertaking a new development effort.

• Research and define requirements before programs are started and limit 

changes after they are started.

• Ensure that cost estimates are complete, accurate, and updated regularly.

• Commit to fully fund projects before they begin.

• Ensure that critical technologies are proven to work as intended before 

programs are started.

• Assign more ambitious technology development efforts to research

departments until they are ready to be added to future generations (increments) 

of a product.

• Use systems engineering to close gaps between resources and requirements 

before launching the development process.
Enclosure I: Briefing Slides 

Page 49 GAO-10-315R Space Acquisition Practices 

45

• During program development 

• Use quantifiable data and demonstrable knowledge to make go/no-go 

decisions, covering critical facets of the program such as cost, schedule, 

technology readiness, design readiness, production readiness, and 

relationships with suppliers. 

• Do not allow development to proceed until certain thresholds are met—for 

example, a high proportion of engineering drawings completed or production 

processes under statistical control. 

• Empower program managers to make decisions on the direction of the program 

and to resolve problems and implement solutions. 

• Hold program managers accountable for their choices. 

• Require program managers to stay with a project to its end. 

• Hold suppliers accountable to deliver high-quality parts for their products 

through such activities as regular supplier audits and performance evaluations 

of quality and delivery, among other things. 

• Encourage program managers to share bad news, and encourage collaboration 

and communication.

Prior GAO Recommendations: Actions Needed to 

Address Space and Weapon Acquisition Problems 

(cont.) 
Enclosure I: Briefing Slides 

Page 50 GAO-10-315R Space Acquisition Practices 

46

Related GAO Products

Space Acquisitions: DOD Faces Substantial Challenges in Developing New Space Systems, GAO09-705T (Washington, D.C.: May 20, 2009).

Federal Contracting: Guidance on Award Fees Has Led to Better Practices But is Not Consistently 

Applied, GAO-09-630 (Washington, D.C.: May 29, 2009).

Defense Acquisitions: Measuring the Value of DOD’s Weapons Portfolio Requires Starting With 

Realistic Baselines, GAO-09-543T (Washington, D.C.: Apr. 1, 2009).

Global Positioning System: Significant Challenges in Sustaining and Upgrading Widely Used 

Capabilities, GAO-09-325 (Washington, D.C.: Apr. 30, 2009).

Space Acquisitions: Uncertainties in the Evolved Expendable Launch Vehicle Program Pose 

Management and Oversight Challenges, GAO-08-1039 (Washington, D.C.: Sep. 26, 2008). 

Defense Acquisitions: A Knowledge Based Funding Approach Could Improve Major Weapon System 

Program Outcomes, GAO-08-619 (Washington, D.C.: Jul. 2, 2008).

Space Acquisitions: Major Space Programs Still at Risk for Cost and Schedule Increases, GAO-08-

552T (Washington, D.C.: Mar. 4, 2008).

Best Practices: Increased Focus on Requirements and Oversight Needed to Improve DOD’s 

Acquisition Environment and Weapon System Quality, GAO-08-294 (Washington, D.C.: Feb. 1, 

2008). 

Best Practices: An Integrated Portfolio Management Approach to Weapon System Investments 

Could Improve DOD’s Acquisition Outcomes, GAO-07-388 (Washington, D.C.: Mar. 30, 2007). 
Enclosure I: Briefing Slides 

Page 51 GAO-10-315R Space Acquisition Practices 

47

Related GAO Products (cont.)

Space Acquisitions: DOD Needs to Take More Action to Address Unrealistic Cost Estimates of 

Space Systems, GAO-07-96 (Washington, D.C.: Nov. 16, 2006). 

Defense Acquisitions: Assessments of Selected Major Weapon Programs, GAO-06-391 

(Washington, D.C.: Mar. 31, 2006).

Best Practices: Better Support of Weapon System Program Managers Needed to Improve 

Outcomes, GAO-06-110 (Washington, D.C.: Nov. 30, 2005).

Defense Acquisitions: DOD Has Paid Billions in Award and Incentive Fees Regardless of Acquisition Outcomes, GAO-06-66 (Washington, D.C.: Dec.19, 2005).

Briefing on DOD’s Report on Commercial Communications Satellite Services Procurement 

Processes, GAO-05-1019R (Washington, D.C.: Sep. 27, 2005).

Defense Acquisitions: Incentives and Pressures that Drive Problems Affecting Satellite and Related 

Acquisitions, GAO-05-570R (Washington, D.C.: Jun. 23, 2005).

Defense Acquisitions: Assessments of Selected Major Weapon Programs, GAO-05-

301(Washington, D.C.: Mar. 31, 2005).

Best Practices: Capturing Design and Manufacturing Knowledge Early Improves Acquisition Outcomes, GAO-02-701 (Washington, D.C.: Jul. 15, 2002).

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

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

Page 52 GAO-10-315R Space Acquisition Practices 

48

Technology Readiness Level Descriptions

BACKUP SLIDES

Fidelity of breadboard technology increases significantly. The basic 

technological components are integrated with reasonably realistic supporting 

elements so that the technology can be tested in a simulated environment. 

Examples include “high fidelity” laboratory integration of components.

5. Component and/or 

breadboard validation in 

relevant environment

Basic technological components are integrated to establish that the pieces 

will work together. This is relatively “low fidelity” compared to the eventual 

system. Examples include integration of “ad hoc” hardware in a laboratory.

4. Component and/or 

breadboard validation in 

laboratory environment

Active research and development is initiated. This includes analytical studies 

and laboratory studies to physically validate analytical predictions of 

separate elements of technology. Examples include components that are not 

yet integrated or representative.

3. Analytical and 

experimental critical function 

and/or characteristic proof of 

concept

Invention begins. Once basic principles are observed, practical applications 

can be invented. The application is speculative and there is no proof or 

detailed analysis to support the assumption. Examples are still limited to 

paper studies.

2. Technology concept and/or 

application formulated

Lowest level of technology readiness. Scientific research begins to be 

translated into applied research and development. Examples might include 

paper studies of a technology’s basic properties.

1. Basic principles observed 

and reported

Technology readiness level Description
Enclosure I: Briefing Slides 

Page 53 GAO-10-315R Space Acquisition Practices 

49

Technology Readiness Level Descriptions 

(cont.)

BACKUP SLIDES

Technology has been proven to work in its final form and under expected 

conditions. In almost all cases, this TRL represents the end of true system 

development. Examples include developmental test and evaluation of the 

system in its intended weapon system to determine if it meets design 

specifications.

8. Actual system completed 

and “flight qualified” through 

test and demonstration

Actual application of the technology in its final form and under mission 

conditions, such as those encountered in operational test and evaluation. In 

almost all cases, this is the end of the last “bug fixing” aspects of true system 

development. Examples include using the system under operational mission 

conditions.

9. Actual system “flight 

proven” through successful 

mission operations

Prototype near or at planned operational system. Represents a major step 

up from TRL 6, requiring the demonstration of an actual system prototype in 

a realistic environment, such as in an aircraft, vehicle, or space. Examples 

include testing the prototype in a test bed aircraft.

7. System prototype 

demonstration in a realistic 

environment

Representative model or prototype system, which is well beyond the 

breadboard tested for TRL 5, is tested in a relevant environment. 

Represents a major step up in a technology’s demonstrated readiness. 

Examples include testing a prototype in a high fidelity laboratory 

environment or in simulated realistic environment.

6. System/subsystem model 

or prototype demonstration in 

a relevant environment

Technology readiness level Definition

Source: GAO and GAO analysis of National Aeronautics and Space Administration data.
Enclosure I: Briefing Slides 

Page 54 GAO-10-315R Space Acquisition Practices 

50

TRLs Reveal the Knowledge Gap Regarding a 

Technology’s Ability to Satisfy Requirements

TECHNOLOGY DEVELOPMENT AND MATURITY

Source: GAO.
Enclosure I: Briefing Slides 

Page 55 GAO-10-315R Space Acquisition Practices 

51

Commercial Satellite Industry Overview

Sources: GAO analysis of Satellite Industry Association, Futron Corporation, and Federal Aviation Administration data. 

Note: All satellite manufacturing revenues are recognized in the year of satellite launch, and geographically determined by location of manufacturers’ 

headquarters.

BACKUP SLIDES

2.0

(27.8%)

2.4

(45.3%)

2.0

(45.5%)

1.4

(40.0%)

1.8

(64.3%)

1.5

(51.7%)

Total U.S. commercial satellite activity 

(% world commercial satellite activity)

U.S. commercial launch 0.3 0.4 0.1 0.1 0.2 0.2

1.8

(58.1%)

2.2

(45.8%)

1.9

(38.0%)

1.3

(40.6%)

1.4

(35.9%)

1.2

(26.1%)

U.S. commercial manufacturing 

(% U.S. total)

U.S. manufacturing (government & commercial customers) 4.6 3.9 3.2 5.0 4.8 3.1

Total world commercial satellite activity 2.9 2.8 3.5 4.4 5.3 7.2

World commercial launch 1.2 1.0 1.2 1.4 1.5 2.0

5.2

(49.5%)

3.8

(32.8%)

3.0

(25.0%)

2.3

(29.5%)

1.8

(17.6%)

1.7

(17.3%)

World commercial manufacturing 

(% world total)

World manufacturing (government & commercial customers) 9.8 10.2 7.8 12.0 11.6 10.5

Revenues from satellite manufacturing and launch activity 2003 2004 2005 2006 2007 2008

Dollars in billions

(120877) 
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