Missile Defense: Opportunities Exist to Reduce Acquisition Risk and Improve Reporting on System Capabilities
Published: 2015-05-06T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since 2002, MDA has spent approximately $105 billion, and it plans to spend about $38 billion more by 2019, to defend against enemy ballistic missiles. MDA is developing a BMDS comprised of a command and control system, sensors that identify incoming threats, and intercepting missiles. For over a decade, GAO has reported on MDA's progress and challenges in developing and fielding the BMDS. GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through its acquisition baselines, and to report on other acquisition issues as appropriate. This, GAO's 12th annual report, examines progress and challenges in fiscal year 2014 associated with MDA's: (1) individual element testing and asset delivery goals, (2) efforts to reduce acquisition risks, and (3) reporting on the BMDS integrated capability. GAO examined MDA's acquisition reports and assessed them against GAO's acquisition best practices, analyzed baselines reported to discern progress, and interviewed DOD and MDA contractor officials.
section_title: What GAO Found
paragraphs: In fiscal year 2014, the Missile Defense Agency (MDA) made some progress in achieving its testing and delivery goals for individual elements of the Ballistic Missile Defense System (BMDS), but was not able to complete its planned fiscal year goals for testing. MDA conducted two intercept tests demonstrating an increased capability. However, it did not complete six planned flight tests for a variety of reasons, including test delays and retests to address previous failures, which limit the knowledge gained in fiscal year 2014. Additionally, several BMDS elements delivered assets in fiscal year 2014 without completing planned testing, which increases cost and schedule risks for an individual system and the BMDS as a whole. In one instance, the Terminal High Altitude Area Defense element delivered assets although its capability has not been demonstrated through flight testing.
Potential also exists to reduce acquisition risks for several MDA efforts that are pursuing high-risk approaches that do not adhere to an approach which encourages accumulating more knowledge before program commitments are made and conducting testing before production is initiated. Specifically:
Aegis Ballistic Missile Defense (BMD)—MDA demonstrated that it had matured the Aegis Standard Missile-3 (SM-3) Block IIA interceptor's design prior to starting production, a best practice. However, Aegis BMD is still addressing issues in the Aegis SM-3 Block IB interceptor revealed through prior test failures and is planning to award a multiyear procurement contract prior to flight testing the final design. If design changes are later needed, the cost, schedule, and performance impact could be significant.
Ground-based Midcourse Defense (GMD) system—MDA reduced risk by adding a non-intercept flight test in fiscal year 2015 which allows the program to collect valuable data on redesigned components. However, GMD increased risk to the warfighter by prioritizing new interceptor production over fixing previously deployed interceptors and resolving known issues. In addition, MDA has decided to redesign the GMD kill vehicle prior to determining whether the effort is the most cost-effective solution.
Unless MDA aligns its future efforts for Aegis and GMD with acquisition best practices, the agency's acquisition outcomes may be on a similar trajectory to that of prior years, incurring both cost growth and schedule delays.
MDA is working to increase the extent to which the various elements of the BMDS are capable of working as one integrated system, but the agency reports limited information to Congress regarding its integration goals and its progress against these goals. Integration of the BMDS is important because it improves the system performance beyond the abilities of individual elements. Although MDA is not required to provide this information in its reports and briefings to Congress, congressional decision makers have limited insight into the planned BMD system-level capabilities, the supporting element-level upgrades, and how element-level efforts are synchronized to ensure timely delivery.
section_title: What GAO Recommends
paragraphs: GAO recommends that, in order to reduce acquisition risk, MDA align future efforts for Aegis BMD and GMD with GAO's knowledge-based acquisition practices. GAO also recommends that the Secretary of Defense direct MDA to report annually to Congress and DOD on the progress it has made in achieving an integrated capability. DOD concurred or partially concurred with all of our recommendations. GAO continues to believe the recommendations are valid as discussed in this report.

section_title: Letter
paragraphs: Since 2002, the Missile Defense Agency (MDA) has spent approximately  $105 billion to provide protection from enemy ballistic missiles by  developing a Ballistic Missile Defense System (BMDS) comprised of a  command and control system, sensors that identify incoming threats, and  missiles that can intercept enemy ballistic missiles. The agency plans to  spend an additional $37.6 billion between 2015 and 2019 to continue to  develop and field BMDS elements and supporting efforts, such as BMDS  targets necessary for testing. For over a decade, we have reported on  MDA’s progress and made recommendations to address challenges in  developing and fielding BMDS capabilities, as well as other transparency,  accountability, and oversight issues. We have made recommendations to  help address these challenges and MDA has made progress in  implementing them. Moreover, as MDA continues to expand its efforts to  increase the defense of the United States and protect our allies,  understanding developmental progress can inform congressional decision  makers.
Since the 2002 National Defense Authorization Act (NDAA), we have  been mandated to prepare annual assessments of MDA’s progress  toward meeting its acquisition goals. The fiscal year 2012 NDAA requires  us to report on the extent to which MDA has achieved its stated  acquisition goals and objectives, as reported through its acquisition  baselines as stated in the BMDS Accountability Report (BAR), and also to  include any other findings and recommendations on MDA acquisition  programs and accountability as appropriate. This report, including  individual appendixes, provides our assessment of MDA’s progress in  fiscal year 2014. Specifically, it assesses MDA’s: (1) fiscal year 2014  progress and challenges associated with testing and asset delivery goals,  (2) efforts to reduce acquisition risks, and (3) reporting on the overall  BMDS integrated capability.
In addition, the fiscal year 2014 NDAA, and its related joint explanatory  statement mandated GAO to provide separate assessments on several  other missile defense related issues. For example, GAO was required to  provide its views on a DOD report on the status and progress of its  regional BMD programs and efforts, including operational issues on  regional BMD and progress made in developing and testing elements of  systems intended for Europe. Additionally, GAO provided in December  2014 its views on MDA’s report on plans to improve the quality of cost  estimates, which included an assessment of the extent to which planned  improvements for the quality of its cost estimates are in line with GAO  guidelines and best practices.
For this report, we focused our assessment on MDA’s testing and asset  delivery goals. To assess MDA’s fiscal year 2014 progress towards  meeting these goals, we reviewed the planned fiscal year 2014 testing  and delivery baselines as stated in the BAR, approved May 2, 2013. We  compared these planned efforts to the annual progress as detailed in key  management documents, including program and baseline reviews and  flight test plans and reports. In addition, we met with MDA officials from  the Testing and Engineering Directorates, as well as individual element  program officials. We also met with officials from DOD’s Office of the  Director of Operational Test and Evaluation, and key contractors.
To assess MDA’s efforts to reduce acquisition risks, we reviewed MDA’s  program decision documents, including baseline reviews, test and  systems engineering plans, budget justification material, and program  management documents.  We analyzed GAO’s acquisition best practices  developed in our prior assessments of major defense acquisition  programs; DOD and MDA’s acquisition policies; independent DOD  assessments, such as those conducted by DOD’s Office of the Director of  Operational Test and Evaluation and the Defense Contract Management  Agency; and prior GAO recommendations to identify areas of significant  acquisition risk. Additionally, we met with individual element officials to  discuss their current program plans and their plans for future  development.
To assess MDA’s reporting of integration and the overall BMDS  capability, we compared the information presented in its internal  management documents against the information presented to Congress  in the 2014 BMDS Accountability Report. For this comparison, we  primarily relied on the 2014 Master Integration Plan, which presents the  schedule for delivering BMD system-level capabilities, schedules for  synchronized delivery of BMD elements, and potential risks to their  delivery. We also reviewed integration plans from prior years, the 2014  master test plan, element-level baseline reviews, and similar program- level briefings. Additionally, we met with officials from MDA’s Directorate  for Engineering to discuss the integration process, external reporting of  integration, and progress in integrating BMDS elements.
We conducted this performance audit from June 2014 to May 2015 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.
subsections: section_title: Background
paragraphs: The BMDS is designed to defend the United States homeland and our  regional friends and allies against attacks from ballistic missiles of all  ranges—short, medium, intermediate, and intercontinental. Since ballistic  missiles have different ranges, speeds, sizes, and performance  characteristics, MDA is developing a variety of systems, known as  elements or programs, that, when integrated, provide multiple  opportunities to destroy ballistic missiles in flight. The BMDS includes  space-based sensors; ground- and sea-based radars; ground- and sea- based interceptor missiles; and a command and control system that  provides communication links to the sensors and interceptor missiles.
subsections: section_title: Description of BMDS Elements
paragraphs: The BMDS is comprised of several systems, which MDA calls elements  or programs. Table 1 provides a brief description and status of the BMDS  elements assessed in this report. See appendixes II-IX for more detailed  information.
section_title: MDA’s Acquisition Flexibilities and Steps Taken to Address Transparency
paragraphs: When MDA was established in 2002, it was granted exceptional flexibility  in setting requirements and managing the acquisition. The BMDS was to  be developed as a single program designed to quickly deliver a set of  integrated defensive capabilities. This decision deferred application of  DOD acquisition policy to the BMDS until a mature capability is ready to  be handed over to a military service for production and operation.  Because the BMDS program has not yet formally entered the DOD  acquisition cycle, application of laws and policies that are designed to  facilitate oversight and accountability of major defense acquisition  programs and that are triggered by phases of this cycle, such as the  engineering and manufacturing development phase, have also effectively  been deferred. These laws and policies include such things as:
Documenting program parameters in an acquisition program baseline  that has been approved by a higher-level DOD official prior to the  program’s entry into the engineering and manufacturing development  phase or program initiation, whichever occurs later.
Measuring the program against the approved baseline or obtaining  the approval of a higher-level acquisition executive before making  changes.
Reporting certain increases in unit cost measured from the original or  current program baseline.
Obtaining an independent life-cycle cost estimate prior to beginning  engineering and manufacturing development, and/or production and  deployment.
Regularly providing detailed program status information to Congress,  including information on cost, in Selected Acquisition Reports.
Congress and DOD have taken actions to address oversight of MDA. For  example, in the NDAA for Fiscal Year 2008, Congress required MDA to  establish acquisition cost, schedule, and performance baselines for each  system element that has entered the equivalent of the engineering and  manufacturing development phase of acquisition or is being produced or  acquired for operational fielding. MDA reported its newly-established  resource, schedule, test, operational capacity, technical, and contract  baselines for certain BMDS components for the first time in its June 2010  BMDS Accountability Report (BAR). Since that time, Congress has  continued to alter MDA’s baseline reporting requirements in the NDAA for  Fiscal Years 2011 and 2012. Additionally, to enhance oversight of the  information provided in the BAR, MDA continues to incorporate  suggestions and recommendations from GAO on the content and clarity  of the information reported in the BAR to include: 1) the addition of  information to explain the major changes experienced by each program  over the past year; 2) the addition of buy/delivery information for each  program that has advanced to Product Development, Initial Production, or  Production; 3) a description of cost items not included in program  Resource Baselines; and 4) a summary of critical schedule milestones  with their respective initial baseline dates and dates from the previous  BAR to facilitate tracking.
section_title: High-Risk Approach to Acquisitions Has Affected Certain Outcomes
paragraphs: Successful programs that deliver promised capabilities for the estimated  cost and on schedule use a disciplined, knowledge-based approach  where knowledge supplants risk over time. In our past work examining  weapon system acquisition and best practices, we have found that  successful commercial firms pursue an acquisition approach that is  anchored in knowledge, whereby high levels of product knowledge are  demonstrated at critical points in the acquisition process. This approach  recognizes that programs require an appropriate balance between  schedule and risk, but does not include an undue amount of what is often  referred to as acquisition concurrency, where overlap occurs between  technology development and product development or between product  development and production of a system. Instead, programs take steps to  gather knowledge prior to moving from one acquisition phase to another.  These steps for a program include:
Demonstrating its technologies are mature and that allotted resources  match the program’s requirements before deciding to invest in product  development.
Demonstrating its designs are stable and perform as expected before  deciding to build and test production-representative prototypes.
Demonstrating its production processes are in control and meet cost,  schedule, and quality targets before deciding to produce first units.
Since 2002, MDA has developed, demonstrated, and fielded a limited  homeland and regional ballistic missile defense capability, but has fallen  short of its goals, in part, because of its acquisition practices. Some of  these practices include initiating new programs without robustly assessing  alternative solutions, incorporating high levels of concurrency, and fielding  capabilities prior to completing flight testing. While some concurrency is  understandable, committing to product development before requirements  are understood and technologies are mature, as well as committing to  production and fielding before development is complete is a high-risk  strategy that often results in performance shortfalls, unexpected cost  increases, schedule delays, and test problems. We previously found  that although these practices enabled MDA to quickly ramp up efforts in  order to meet tight, presidentially-directed deadlines, they were also high  risk and resulted in problems that caused some programs to be cancelled  or significantly disrupted. For example:  In July 2013, we found that the Secretary of Defense decided to  cancel an MDA satellite system program, called the Precision  Tracking Space System, based on the results of a departmental  review of the program which determined that the program had  significant technical, programmatic, and affordability risks. We  previously found that MDA did not consider a broad range of  alternatives prior to its decision to start the program, was relying on a  highly-concurrent acquisition approach despite significant technical  and operational challenges, and was projecting a lower total program  cost by increasing risk to the warfighter. Although MDA gained some  technical knowledge from the effort, it also expended significant  resources—approximately five years and $231 million. The sensor  coverage gaps, such as persistent tracking from space, that the  program was intended to address persist.
In April 2014, we found that a series of GMD test failures in  conjunction with a highly concurrent CE-II development, production,  and fielding strategy caused major disruptions to the program.  Because the program moved forward with producing and fielding  interceptors before completing its flight test program, test failures  exacerbated the disruptions to the program, causing the program to  fall several years behind on its flight test program and increasing the  cost to demonstrate the CE-II from $236 million—the cost of GMD’s  first CE-II flight test—to $1.981 billion—the cost to resolve the test  failures and implement a retrofit program. See appendix VII for more  detailed information.
section_title: MDA Conducted Several Key Tests and Continued to Deliver Assets, but Did Not Achieve All Planned Goals for Fiscal Year 2014
paragraphs: MDA made progress, but did not achieve all of its planned test and asset  delivery goals for fiscal year 2014, and has not fully met its test goals  since first reporting baselines in its 2010 BAR. MDA utilizes ground, non- intercept, and intercept tests to provide it with knowledge on the  operational effectiveness, suitability, and survivability of an asset or  capability. Ground tests use simulations and scenarios when flight testing  may be impractical or cost-prohibitive. Flight tests—intercept and non- intercept—evaluate an asset’s ability to defend against a specific threat.  Intercept tests include active engagement of one or more targets, while  non-intercept tests do not include active engagement of a target.  Moreover, non-intercept tests can assess specific aspects of an asset to  potentially reduce risks for future intercept tests. Completing planned  testing is a key step to enable the delivery of assets and capabilities, in  line with GAO best practices. However, despite testing delays, shortfalls,  and failures, MDA has continued to deliver assets. Without completing  planned testing, MDA is delaying or foregoing the full breadth and depth  of knowledge it planned to have attained prior to the delivery of its assets.
subsections: section_title: MDA Conducted Some Tests in Fiscal Year 2014 as Planned
paragraphs: In fiscal year 2014, MDA conducted four out of ten planned flight tests (as  shown below in table 2). It also conducted an additional flight test in June  2014 that was inserted into the schedule to retest and confirm a capability  that failed during a prior test.
MDA conducted two intercept and three non-intercept flight tests in fiscal  year 2014 that demonstrated an increased capability for the Aegis BMD  and the GMD programs. The three non-intercept tests evaluated Aegis  Ashore’s ability to launch and guide an SM-3 interceptor, as well as the  SM-3 Block IIA interceptor booster performance and tracking capabilities  for the Aegis BMD Weapon System. One intercept test supported the  Aegis BMD program’s full rate production decision for the SM-3 Block IB  interceptor by demonstrating the capability to intercept a medium- range  ballistic missile target. The other intercept test—FTG-06b—was inserted  into the test schedule to retest and demonstrate the performance of the  CE-II interceptor, which failed its prior two attempts in 2010. MDA  successfully executed FTG-06b in June 2014, which was a major  accomplishment for the program as it was the first successful intercept  attempt with the CE-II interceptor, ending a five-and-a-half year period  without a successful intercept for the GMD program. For further details  about the Aegis BMD and GMD programs, see appendixes II, III, IV, V,  and VII.
MDA did not conduct six planned flight tests in fiscal year 2014, and it has  been unable to conduct all of its planned tests since fiscal year 2010  because, as we previously reported, its test plan is ambitious and  success-oriented, which makes it difficult to adjust the schedule if  necessary and results in frequent changes and disruptions to its test  plan. MDA officials have told us that they do not plan for target failures,  test failures, or potential retests when developing the test schedule, and  that there is no flexibility to absorb these issues. We previously  recommended that MDA include sufficient margin in its test schedule  based on recent test outcomes and forecasted testing demands so it  could better meet its testing goals. However, MDA has not implemented  this recommendation. Consequently, when MDA encounters challenges,  it does not have the flexibility to accommodate changes and falls short of  its testing goals and hinders oversight.
According to MDA officials, the reasons that the six flight tests in 2014  were not conducted as planned include: sequestration that limited the  funds available for testing, target availability, and retests to address  previous failures. To address these challenges, MDA made the decision  to remove or delay some planned tests. For instance, of the four Aegis  BMD program tests that were planned but not conducted, one was  cancelled and one was delayed due to sequestration, and two were  delayed due to lack of target availability. Some of these tests are  designed to assess MDA’s regional ballistic missile defense approach for  Europe, also called the European Phased Adaptive Approach (EPAA).  As a result, MDA risks discovering performance shortfalls with some of its  assets after they are fielded and declaring future phases without all of the  information it initially planned to have. Of the two GMD program flight  tests that were planned but not conducted, the program cancelled one  because the test objectives were met through prior tests, and the other  test was significantly changed, including a new name and test objectives,  after the successful FTG-06b test.
MDA came closest to achieving its testing goals in fiscal year 2010 when  it conducted five out of seven, or 71 percent, of its planned tests (see  figure 1).
Each year as MDA falls short of its testing goals due to target failures,  test failures, or retests, it takes steps to recoup by delaying and removing  tests. As a result, MDA is delaying, and in some cases, not collecting  knowledge about the asset’s capabilities and limitations prior to delivery.  For example, FTX-19—a significant flight test of Aegis BMD’s ability to  coordinate two ships to track and engage multiple threats—has been  delayed twice from its original planned date in fiscal year 2013, once to  fiscal year 2014 and then again to fiscal year 2015. Additionally, since  2010, Aegis Ashore has removed five of its seven flight tests designed to  assess its capability for EPAA Phase 2. According to program officials,  the program is leveraging data from sea-based Aegis BMD tests, but  conditions at sea are different than on land, as are the system  configurations (for more information see appendix III). Moreover, frequent  changes to the test schedule make it difficult to track what MDA has and  has not accomplished in terms of testing and system capability.
section_title: MDA Delivered Some Assets in Fiscal Year 2014 as Planned
paragraphs: In fiscal year 2014, MDA continued to deliver its BMDS assets (see table  3).
However, some of these assets were delivered without completing  planned testing, which increases risks for an individual system and the  BMDS as a whole. For example, Aegis BMD continued to deliver SM-3  Block IB interceptors—11 more than originally planned—although it is still  working to address its past test failures, including redesigns to one of its  components. Also, THAAD delivered assets to meet urgent warfighter  needs although there were changes incorporated to address  obsolescence issues, and these will not be tested until the fourth quarter  of fiscal year 2015. We have previously recommended that MDA  synchronize its testing and asset delivery schedules to ensure that assets  are tested before they are delivered. If assets are delivered without  testing, it could lead to costly and time-consuming retrofits if the asset  does not perform as intended. Also, all of MDA’s programs have complex  interactions and interdependencies, so delivering problematic or  underperforming assets could not only affect the performance or  capability of one system, but others as well, and could compromise the  overall operational performance of the BMDS.
section_title: MDA Can Do More to Improve Its Acquisition Outcomes by Reducing Risk
paragraphs: In fiscal year 2014, MDA undertook several risk reduction efforts  designed to achieve or improve its acquisition outcomes, such as being  able to deliver assets on time and that perform as expected. However,  uncertainty exists as to whether the agency will be able to achieve such  outcomes because it continues to undertake other efforts that are either  high risk or lack a sound acquisition basis. Even with the risk reduction  efforts, the agency’s acquisition outcomes may be on a similar trajectory  to that of prior years because it missed some risk reduction opportunities  in fiscal year 2014.
subsections: section_title: MDA Took Some Actions in Fiscal Year 2014 to Improve Acquisition Outcomes by Reducing Risk
paragraphs: Several BMDS programs took actions in fiscal year 2014 to reduce risks  to help the agency achieve or improve its desired acquisition outcomes.  In March 2014, we identified knowledge-based acquisition practices  based on our prior work on best product-development practices and  found that successful programs take steps to gather knowledge to confirm  technology maturity and design stability. Aegis BMD reduced testing  and production risks for its SM-3 Block IIA by achieving full design  maturity at its critical design review—a key knowledge point juncture for  acquisition programs considering whether to start building and testing  production-representative prototypes. As we previously reported, the  Aegis BMD program has taken steps aligned with this best practice by  revising its SM-3 Block IIA schedule to alleviate compressed events and  include additional time for subsystem reviews before conducting the  critical design review to resolve any issues. As such, the program  conducted the critical design review in October 2013 with no major issues  identified and 100 percent of its design drawings completed—a key  indication that the interceptor’s design is stable. This allows the program  to move forward with flight testing and into initial production with  assurance of design maturity.
Also in fiscal year 2014, GMD took additional actions to reduce  development and testing risk by incorporating an additional non-intercept  flight test in fiscal year 2015. After successfully conducting FTG-06b in  June 2014, the GMD program planned to conduct its next flight test—an  intercept test called FTG-09—in the third quarter of fiscal year 2015. This  test, in part, was designed to demonstrate two redesigned components  intended to address prior issues discovered in flight test failures.  However, the program subsequently encountered delays developing the  redesigned components and could not support the planned test date for  FTG-09. According to program officials, the Director, MDA decided to  repurpose FTG-09 as a non-intercept flight test, called GMD Controlled  Test Vehicle (GM CTV)-02+, to provide the program with additional time  to complete development for the redesigned components and to test  additional objectives, such as the capability to discriminate the target from  other objects during an engagement. The program previously conducted  a non-intercept flight test, GM CTV-01, prior to conducting FTG-06b,  which significantly contributed to the intercept flight test’s success. Adding  the non-intercept flight test GM CTV-02+ is a positive step as it allows the  program to collect valuable data on how the redesigned components  operate in the in-flight environment, which reduces risk for the next  intercept flight test.
The Targets and Countermeasures program reduced BMDS testing risks  by using a non-intercept flight test for a new target prior to its use in more  complex and costly intercept tests. New, untested targets introduce  higher risks of failures and, if a target fails, it often means costly and time- consuming re-tests, which could further delay the delivery of the capability  to the warfighter. In 2013, we recommended that MDA add risk reduction  flight tests for each new target type. Risk reduction flight tests are  conducted to confirm that the target works as intended and to discover  and resolve issues prior to its use in an intercept test. MDA has not fully  implemented this recommendation. However, the Targets and  Countermeasures program successfully conducted a non-intercept flight  test in October 2014 using a new target called the Medium-Range  Ballistic Missile Type 3 (MRBM T3) prior to its first planned intercept test  in fiscal year 2016. This non-intercept flight test reduces testing risks,  such as potential target failures, by giving the program insight into the  target’s performance, and provides about a year to address any issues  that may emerge. If the program continues to integrate non-intercept flight  tests into the test schedule prior to intercept tests when new target types  are introduced, it may reduce the risks for failures in intercept test events.  The Targets and Countermeasures program also adopted contracting  types aimed at providing incentives for the successful performance of  targets. Such measures may help prevent cost growth and performance  problems seen in the past and minimize risk to the government.
section_title: Potential Exists to Improve Acquisition Outcomes for Several MDA Efforts
paragraphs: While MDA took actions to reduce risk, some of its elements are still  using fundamentally risky acquisition strategies. MDA missed  opportunities in fiscal year 2014 to further reduce risk and is planning to  undertake efforts in the future that are either high risk or lack a sound  acquisition basis as a result of not following some knowledge-based  acquisition practices. We have previously identified several of these  knowledge-based practices in our assessment of major defense  acquisition programs. However, opportunities remain for MDA to reduce  risk in these future planned efforts, which would help the agency achieve  its acquisition goals.
subsections: section_title: Aegis BMD: Opportunity Exists to Insert an Additional Flight Test to Assess Redesigned Component for the SM-3 Block IB Prior to a Multiyear Procurement Decision
paragraphs: Aegis BMD is currently redesigning a key component of its SM-3 Block IB  interceptor to address prior test failures, but has no plans to flight test it  before incorporating it into the interceptor. An SM-3 Block IB interceptor  failed during a flight test in September 2013, when two SM-3 Block IB  interceptors were launched against a single target (the first of which  successfully intercepted the target). Although a failure review  investigation is ongoing to determine the root cause of the failure,  preliminary findings indicate that the third-stage rocket motor—the  component that controls the final maneuvers of the interceptor— experienced a failure similar to that which occurred in September 2011.  As a result of the interceptor failures during the two flight tests, Aegis  BMD is redesigning components in the third-stage rocket motor and  expects to complete and accept the final redesign specifications in the  second quarter of fiscal year 2015.
The Aegis BMD program is currently not planning to flight test the SM-3  Block IB with the redesigned components of the third-stage rocket motor  before it is incorporated into the production line and deployed, in part, to  support the regional defense of Europe. According to program officials  and contractor representatives that produce the SM-3 Block IB  interceptors, the effort to redesign components in the rocket motor is  considered to be relatively straightforward and low risk. They also  indicated that they do not believe that a flight test to demonstrate the  redesigned rocket motor components is necessary, as plans are in place  to conduct ground tests. However, without flight testing the redesigned  rocket motor components, MDA may not fully understand the interceptor’s  performance and capabilities and whether it works as intended.  Additionally, Director, Operational Test and Evaluation officials stated that  the environments for a flight and ground test are very different and that  MDA has not been able to replicate the SM-3 Block IB interceptor failure  through ground tests. As we have previously reported, both failures  occurred during flight tests, not ground tests. Moreover, different issues  with that same component have contributed to previous SM-3 Block IB  program schedule delays and production disruptions which resulted in a  delayed production decision.
The Aegis BMD program is also moving forward with plans to initiate SM- 3 Block IB full rate production in fiscal year 2015 and plans to enter into a  multiyear procurement contract in fiscal year 2016. Both the full-rate  production decision and multiyear procurement contract represent major  commitments by the program and carry significant cost and schedule  risks as the SM-3 Block IB with the redesigned third-stage rocket motor  components have not been demonstrated through flight testing. When  used appropriately, multiyear contracting can save money compared to a  series of annual contracts by allowing contractors to use their resources  more efficiently. However, multiyear procurement can limit DOD’s budget  flexibility and also entails certain risks that must be balanced against  potential benefits, such as the increased costs to the government should  the multiyear contract be changed. As MDA progresses with the full rate  production of the interceptors and upcoming interceptor acquisition  decisions, Aegis BMD still has an opportunity to insert a flight test into its  test plan prior to inserting the redesigned components of the third-stage  rocket motor into its production line. Until a flight test confirms that the  redesigned components work as intended, MDA does not know if or how  the changes will affect the interceptor’s performance or if other changes  are needed. Since the redesign of the third-stage rocket motor  components are not finalized, MDA has not accounted for the potential  costs associated with it. Without knowing the extent of modifications  needed to the SM-3 Block IB, the agency may not realize the full potential  of benefits associated with the multiyear procurement strategy.
section_title: GMD: Opportunity Exists to Reduce Risk Caused by the Program’s Use of a Concurrent Strategy to Meet Its Goal of Fielding 44 Interceptors by 2017
paragraphs: The GMD program currently has multiple variants of its interceptor at  different stages of development and production as a result of its  developmental challenges and flight test failures. The production and  integration of the CE-II interceptor was previously suspended following a  failure in its December 2010 flight test. As we have previously reported,  this flight test failed because of excessive vibration in the inertial  measurement unit (IMU)—a component of the kill vehicle’s guidance  system. The program subsequently modified the IMU to mitigate the  excessive vibration; demonstrated the modified IMU’s effectiveness in the  non-intercept flight test; and performed a successful intercept with a CE-II  configured with the modified IMU during FTG-06b in June 2014. Following  the successful flight test, the GMD program resumed integration and  production of the CE-II interceptor. In addition to modifying the IMU,  according to the Director, MDA, the program is also developing alternate  divert thrusters (ADT)—a component that steers the kill vehicle in flight— to address the systemic problem of in-flight vibration. The program plans  to implement this new component, along with changes to components in  the booster, such as the flight computer, into new interceptor production  in fiscal year 2017. In addition to changes to the kill vehicle, table 4 below  describes the current fleet of fielded interceptor versions and the  program’s plans to upgrade, retrofit and redesign the CE-II interceptor.
CE-II with Modified IMU: The GMD program experienced a number of  setbacks in fiscal year 2014 that increased risk to the program’s goal of  fielding 44 interceptors by 2017. For example, the program experienced  delays with restarting interceptor production for the current interceptor  version—the CE-II with the modified IMU. Defective wiring harnesses  were identified on all CE-II interceptors, including those previously fielded  and those currently undergoing production. It was determined that an  improper soldering application was used during wiring harness assembly  that could later cause corrosion, which could have far reaching effects  because of the component’s power and data interfaces with the kill  vehicle’s IMU. The program previously experienced problems with the  wiring harness and the issue was resolved, but the corrective actions  were not passed along to other suppliers. MDA assessed the likelihood  for the component’s degradation in the operational environment as low  and decided to accept the component as-is, which helped mitigate the  schedule delay, but increased the risk for future reliability failures. An  assessment conducted by the Defense Contract Management Agency  found that any deviation from the program’s kill vehicle delivery schedule  of one kill vehicle per month could jeopardize the program’s chances of  meeting its goal of fielding 44 interceptors by 2017.
CE-II Block I:  The GMD program is following a high risk approach for  acquiring the CE-II Block I, but an opportunity exists for the program to  reduce risk by flight testing the CE-II Block I prior to starting the  interceptor’s production. In July 2014, we found that the program planned  to start production of CE-II Block I interceptors for operational use almost  two years before it conducts Flight Test GMD (FTG)-15—a demonstration  flight test planned to occur in the fourth quarter of fiscal year 2016 to  determine if the new interceptor components work as intended.  According to acquisition best practices reported in our July 2002  assessment of DOD’s weapon system acquisition process, the  demonstration flight test should be conducted before production for  operational use. As we testified last year, the GMD program has had  many years of significant and costly disruptions caused by production  getting well ahead of testing and then discovering issues during testing.  Even though assets have already been produced, MDA has had to add  tests that were not previously planned and delay tests that are necessary  to understand the system's capabilities and limitations. By continuing to  follow a concurrent acquisition approach, it is likely that the GMD program  will continue to experience delays, disruptions, and cost growth.
In addition, the GMD program has encountered issues with a number of  the component modifications being developed for the CE-II Block I. The  developmental issues have caused the program to delay necessary  design reviews, generated significant schedule compression, and has  pushed out the completion of CE-II Block I deliveries to the second  quarter of fiscal year 2018. For example, in November 2013, the program  experienced an ADT qualification test failure as a result of design  changes that were not verified prior to qualification testing. By omitting  steps in the design process, the program increased the risk for costly,  time-consuming problems to occur later in development. These risks  materialized when the program failed the qualification test, resulting in a  one-year delay to the ADT development effort, which the Defense  Contract Management Agency assessed as having left the program with  no schedule margin for performing the next flight test, GM CTV-02+,  according to the program’s current schedule. Although the recent delays  to the CE-II Block I design reviews put the program behind schedule, it  also provides the program with additional decision time—should program  officials choose to use it—to assess the merits of conducting FTG-15  prior to starting CE-II Block I production for operational use.
section_title: GMD: Opportunity Exists to Incorporate Results of Alternatives Assessment Which Provide Valuable Knowledge for Its Kill Vehicle Redesign Plans
paragraphs: MDA is moving forward with the Redesigned Kill Vehicle (RKV)  program—a new effort intended to address concerns about GMD’s  interceptor fleet reliability—prior to considering the benefits and risks of a  broad range of options. Both the Director, Operational Test and  Evaluation and the Under Secretary of Defense for Acquisition,  Technology, and Logistics have previously voiced concerns with the CE- II’s reliability. MDA validated these concerns when it acknowledged that  the current kill vehicle design is costly to produce and sustain and  requires the warfighter to fire more interceptors to overcome anticipated  in-flight reliability failures. In the fall of 2013, DOD’s Office of Cost  Assessment and Program Evaluation began conducting a study to assess  options, called an analysis of alternatives (AOA), for improving,  augmenting, or providing an alternative interceptor to improve homeland  ballistic missile defense. The assessment continued through fiscal year  2014 and is expected to be completed in fiscal year 2015.
We previously reported that a key challenge facing MDA was improving  investment decisions, and that an AOA can help establish a sound basis  for new acquisition efforts. Robust AOAs are a sound investment  practice because they objectively compare the costs, performance,  effectiveness, and risks of a broad range of alternatives, which aid  congressional and DOD decision makers in making an impartial  determination to identify the most promising and cost-effective approach  to pursue. We also found that MDA did not conduct AOAs for its new  programs, which placed its programs at risk for cost, schedule, and  technical problems as a result of pursuing potentially less than optimal  solutions.
MDA began the RKV program, complete with a five-year funding request  and schedule goals, before the AOA for homeland missile defense was  completed. MDA began the RKV program to replace currently fielded  interceptors with ones that are more testable, reliable, producible, and  cost effective. According to MDA, this effort began in July 2013 and  options for the RKV program were based on interim results from an  ongoing GMD fleet assessment and an interim analysis MDA produced in  support of the homeland missile defense AOA. MDA defined the RKV  design parameters and assessed design concepts provided by industry.  MDA proceeded to incorporate the RKV effort into GMD’s current  program of record and increased GMD’s budget request for fiscal years  2015 through 2019 by over $700 million to fund the RKV’s development.  In addition, MDA added two RKV flight tests to the GMD test plan and  collaborated with industry to finalize the RKV concept. MDA developed  plans to conduct the first RKV flight test in fiscal year 2018 and begin  delivering interceptors in fiscal year 2020. Although several plans have  been established, MDA has not finalized its acquisition strategy for the  RKV and, as such, the agency’s plans are subject to change.
While redesigning the GMD kill vehicle may be justifiable, MDA did not  have the results of the AOA prior to making the determination to pursue  the redesign effort. By not making the AOA a major part of the RKV effort,  MDA runs the risk of starting the effort on an unsound acquisition footing  and pursuing a kill vehicle that may not be the best solution to meet the  warfighter’s needs within cost, schedule, and technical constraints. In  September 2009, we found that the effectiveness of AOAs for some major  defense acquisition programs were limited because decision makers  locked into a solution before an AOA was conducted and the results of  AOAs came too late in the process. However, in April 2014, the Director,  MDA committed to following a knowledge-based approach to acquire the  RKV, which is an encouraging sign that the agency intends to take  actions to place this new investment on a sound acquisition footing.  Moreover, the agency has made several design decisions, but it has not  yet finalized the RKV’s requirements or begun development activities.  Thus, a window of opportunity still exists for MDA to make the AOA a  major part of the redesign effort.
section_title: MDA Provides Limited Insight Into the Overall BMDS Integrated Capability Goals
paragraphs: The NDAA for fiscal year 2012 requires MDA to report capability delivery  goals and progress at the element level, which enables Congress to track  acquisition plans and progress of individual BMDS elements, including  those at high risk of cost and schedule growth. However, this law does  not require MDA to externally report key aspects of integrating two or  more elements and delivering integrated BMDS capabilities, which allow  the BMDS to achieve performance levels not realized by individual  elements working independently. For example, integrating Aegis BMD  with forward-based radars through C2BMC allows it to launch the  interceptor earlier, before its own radar can acquire the threat, thus  defending larger areas. Table 5 includes additional examples of planned  integrated capabilities. Because MDA does not systematically report this  information, external decision makers have limited insight into the  interdependencies between element-level development efforts and  whether these efforts are on track to reach maturity needed for integration  activities. Additionally, external decision makers may have limited insight  as to whether MDA is on schedule to complete delivery of certain system- level capabilities or if they have been delayed.
Internally, MDA reports overall BMDS capability goals in its systems  engineering documents, but according to MDA officials, these  management documents are not provided to external decision makers.  MDA uses these documents to describe how element upgrades are  synchronized to support deliveries of system-level capabilities, including  the timeframes by which they need to complete their own development in  order to be available for integration and test events. MDA also uses these  documents to identify when particular BMD system-level capabilities are  expected to be integrated and delivered in order to improve architectures  that defend the U.S. homeland and U.S. forces and allies abroad.  Additionally, the system engineering documents identify test and  assessment needs to confirm capability delivery goals, as well as  potential challenges and risks to meeting the integrated capability delivery  goals. While useful to MDA for management purposes, these documents  in their entirety are too detailed for external oversight. Nonetheless, key  sections of their systems engineering documents contain high-level  information that would be useful to congressional decision makers, such  as the schedule for delivery of BMD system-level capabilities and  schedules for synchronized delivery of BMD elements to integration  events that support these capabilities.
Table 5 below illustrates how reporting on MDA's progress in achieving  capabilities that hinge on integration is fairly limited, particularly when  compared to our analysis of MDA’s systems engineering documents.  While the BAR may identify a key capability as present or as part of an  individual element, it does not describe when the capability will actually  be achieved since that depends on a family of elements working together.  The systems engineering documents also identify potential challenges to  delivering system-level capabilities that the report to Congress does not.  As a result, congressional decision makers do not receive key information  that could aid them in oversight of MDA’s development efforts.
section_title: Conclusions
paragraphs: As with previous years, MDA had mixed progress in achieving its testing  and delivery goals for 2014. MDA conducted two intercept and three non- intercept flight tests that demonstrated an increased capability for Aegis  BMD and the GMD program. Moreover, several programs, such as the  Aegis BMD SM-3 Block IIA and the Targets and Countermeasures  program, took steps to reduce acquisition risk. At the same time,  however, MDA is still allowing production to get ahead of testing  (concurrency)—a practice which has consistently led to cost and  schedule growth as well as performance problems in the past. For the  Aegis BMD SM-3 Block IB, MDA will have a full rate production decision  in fiscal year 2015 and plans to enter into a multiyear procurement  contract in the following year. If it does not conduct a flight test of the  redesigned components of its third-stage rocket motor before entering  into full production, the Aegis BMD program is at risk for potential cost  growth and schedule delays, affecting its planned interceptor production.  A flight test serves as an opportunity to increase the confidence that the  redesigned component works as intended and determine if any additional  changes are necessary. For GMD, the program planned to start  production of CE-II Block I interceptors for operational use almost two  years before it conducts an intercept flight test in the fourth quarter of  fiscal year 2016. In this case, recent development challenges have  delayed design reviews, providing the program with additional time to  assess the merits of conducting the demonstration flight test ahead of  starting CE-II Block I production.
In addition, because the agency started the RKV program in the fall of  2013 rather than await the results of an ongoing AOA for homeland  missile defense, congressional and DOD decision makers may not have  the insight necessary to discern whether MDA’s approach is the most  promising, cost-effective solution to pursue. Though design decisions  have been made, development activities have yet to begin, so there is still  an opportunity for the Director, MDA to follow through on his commitment  to follow a rigorous systems engineering approach to conduct the  redesign effort.
Lastly, although MDA has increased its focus on BMDS integration and  delivering integrated system-level capabilities, it does not provide a  systematic view of its plans and progress for delivering these capabilities  to external decision makers. While the agency is currently not required to  externally report key aspects of integration, insight into the  interdependencies between element-level development efforts and  whether these efforts are on track to reach maturity needed for integration  activities is necessary to understand MDA's progress, as many of the  capabilities envisioned for EPAA and other regional deployments hinge  on successful integration.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Defense take the following three  actions to strengthen MDA’s acquisition efforts and help support  oversight.  1.  To ensure that future efforts are aligned with a sound acquisition  approach, which includes robust systems engineering and testing, we  recommend that the Secretary of Defense direct the following two  actions:  a)  For Aegis BMD SM-3, DOD conduct a flight test to increase  confidence that the redesigned SM-3 Block IB third-stage rocket  motor component works as intended prior to inserting it into the  SM-3 Block IB production line.  b)  For GMD, delay production of CE-II Block I interceptors intended  for operational use until the program has successfully conducted  an intercept flight test with the CE-II Block I interceptor.  2.  To ensure MDA makes sound investment decisions on improving  homeland ballistic missile defense, the Secretary of Defense should  direct MDA to make the department’s analysis of alternatives an  integral part of its planning effort and delay any decisions to begin  development of the new GMD Redesigned Kill Vehicle until:   a)  the department’s analysis of alternatives is completed and  identifies the best solution to pursue; and  b)  Congressional and DOD decision makers have been provided the  results of that analysis.  3.  Drawing from information it already has, the Secretary of Defense  should direct MDA to report annually to Congress its plans for, and  achieved progress in developing and delivering integrated BMDS- level capabilities. This reporting should include:  a)  planned integrated BMDS-level capabilities, including dates for  when capability is planned for delivery; and   b)  element-level upgrades needed for delivery of the integrated  BMDS capability, including dates that these upgrades need to be  available for integration into the BMDS capability.
section_title: Agency Comments and Our Evaluation
paragraphs: DOD provided written comments on a draft of this report. These  comments are reprinted in Appendix I. DOD also provided technical  comments, which were incorporated as appropriate.
In responding to a draft of this report, DOD partially concurred with our  first two recommendations regarding Aegis SM-3 Block IB and GMD and  concurred with our third recommendation to report to Congress its annual  progress towards planned integrated BMDS-level capabilities.
DOD concurred with the first part of our recommendation to conduct an  Aegis SM-3 Block IB flight test prior to inserting a redesigned third-stage  rocket motor component into the interceptor’s production line. However,  the department partially concurred with the second part of this  recommendation to delay production of the CE-II Block I interceptors until  the program has conducted a successful intercept attempt with this new  interceptor version. In its comments, DOD stated it will delay  emplacement of CE-II Block I interceptors until the program has  successfully conducted an intercept flight test with the CE-II Block I, but  will continue production and final integration of interceptors. DOD also  stated that delaying interceptor production and integration until the flight  test is conducted would unacceptably increase the risk to reaching the  Secretary of Defense mandate to achieve 44 emplaced interceptors by  the end of 2017. Based on our past work examining weapon system  acquisition and best practices, we found that successful programs follow  a knowledge-based acquisition approach and achieve an appropriate  balance between schedule and risk that does not include an undue  amount of concurrency. However, MDA’s current approach for acquiring  the CE-II Block I embraces a proven risk of undue concurrency because  any issues uncovered during the intercept test could significantly affect  the program. As we found in this report, such an approach has proven  very costly for MDA. Because the agency moved forward with CE-II  production prior to completing flight testing, test failures exacerbated the  disruptions to the program and increased the CE-II’s cost by $1.745  billion. We maintain our position that MDA should take the recommended  action to delay production of CE-II Block I interceptors intended for  operational use until the program has conducted a successful intercept  flight test with the CE-II Block I in an effort to align its efforts with a sound  acquisition approach.
DOD partially concurred with our recommendation to delay any decision  to begin development of the RKV until: 1) the department’s AOA for  improving homeland ballistic missile defense is completed and identifies  the best solution to pursue; and 2) congressional and DOD decision  makers have been provided the results of that analysis. In its response,  DOD stated that interim results from the AOA have been used to inform  planning decisions and that the results of the final analysis of alternatives  will be provided to Congressional and DOD leadership. The department  also noted that that an AOA does not make a “best solution”  determination but rather provides an objective comparison of alternatives  that allows the leadership to make the determination of what path the  department should take. We agree that there is generally no requirement  for an AOA to identify a single solution. However, the goal of an AOA is to  identify the most promising options for decision makers to consider rather  than simply providing a comparison of alternatives that does not clearly  indicate the most promising solutions, whether it be one or multiple  options. DOD declined to commit to delaying any decision to begin  developing the RKV and stated its investment decisions will be sound  because interim results from the ongoing AOA have been used to inform  early planning decisions, including an acquisition strategy framework for  the RKV. While we recognize in this report that DOD’s decision to  redesign the GMD kill vehicle may be justifiable, by starting RKV  development in advance of the AOA’s completion, DOD runs the risk of  locking into a solution that may not be the most promising and cost  effective option to pursue. In addition, MDA has previously attempted to  start new major efforts that were not informed by AOAs which DOD later  cancelled because of the programs’ high-risk acquisition strategies and  technical challenges. As such, we maintain that MDA should delay any  decision to begin RKV development until an AOA that identifies the most  promising solution(s) to pursue to improve homeland ballistic missile  defense is completed and the results of which have been provided to  congressional and DOD decision makers.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, and to the Director, MDA. In  addition, the report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, 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 report. GAO staff who made key contributions to this  report are listed in appendix X.
section_title: Appendix I: Comments from the Department of Defense
section_title: Appendix II: Aegis Ballistic Missile Defense (BMD)
paragraphs: Appendix II: Aegis Ballistic Missile Defense  (BMD)
Some Aegis BMD Weapon System capabilities planned for the 2015 timeframe are at  risk of delays and performance shortfalls due to technical challenges.  Aegis BMD Weapon System planned for 2018 is on track but changes to the test  program delay the assessment of key capability.
MDA revised its Aegis BMD baselines, limiting transparency by reducing insight into  developmental activities.
subsections: section_title: Program Overview
paragraphs: Aegis Ballistic Missile Defense (BMD) is the naval component of the  Missile Defense Agency’s (MDA) Ballistic Missile Defense System  (BMDS). It consists of the Aegis BMD Weapon System (AWS), including  a radar, and Standard Missile-3 (SM-3) interceptors. MDA develops the  AWS in versions called spirals that expand on preceding capabilities.  Deliveries are planned to support MDA’s Phased Adaptive Approach  (PAA) to regional BMD, including the PAA in Europe (EPAA), in 2015 and  2018 timeframes. For specifics on the Aegis SM-3 interceptors, see  appendixes IV and V.
MDA delivered the first AWS spiral for PAA Phase 2, called AWS 4.0.2 in  December 2012. However, additional spirals are being developed to  ensure that MDA can meet PAA and EPAA Phase 2 goals. One of the  spirals, AWS 5.0 Capability Upgrade (CU), expands the battle-space and  raid size capability and improves performance against medium and  intermediate range threats. It also expands capability to intercept threats  in the terminal phase and allows for Integrated Air and Missile Defense  (IAMD) where ballistic missiles and air threats (i.e. cruise missiles) can be  engaged at the same time. Additionally, AWS version 4.1 is planned to  provide similar BMD capabilities as Aegis BMD 5.0CU.
MDA is developing AWS 5.1 to support PAA, including EPAA, Phase 3 in  2018. It is planned to further expand performance of AWS 5.0CU against  longer range threats and intercepts of threats in terminal phase. Its key  capability–Engage on Remote —also allows the system to execute  intercepts based on tracking information about the location of threats from  remote sensors without the need for the Aegis radar to ever acquire them.  MDA is developing this spiral in two phases: 1) provides initial capabilities  and integrates the weapon system with SM-3 Block IIA, and 2) delivers  remaining capabilities including Engage On Remote needed for EPAA.
section_title: Some AWS capabilities planned for the 2015 timeframe are at risk of delays and performance shortfalls, due to technical challenges
paragraphs: MDA documents indicate that the AWS planned for deployment in support  of Phase 2 of the PAA is at risk of schedule delays or performance  shortfalls due to technical challenges. While MDA delivered initial Aegis  BMD capabilities for PAA Phase 2 with AWS 4.0.2, its documents indicate  that ship- based capabilities needed to meet certain PAA Phase 2 goals  will not be available until the subsequent versions—AWS 4.1 and  5.0CU—are deployed. However, the certification of AWS 4.1 has been  delayed from the end of 2015 to the second quarter of fiscal year 2016,  after EPAA Phase 2 is declared. Although MDA accelerated its AWS 4.1  schedule in 2014, including the certification date, by about three months,  the new plan could present a challenge by compressing its test schedule.  Additionally, both AWS 4.1 and 5.0CU may be certified for deployment  before they complete planned development and testing. Specifically, both  versions have technical challenges that may further delay the delivery of  some capabilities or require fixes after delivery. Although AWS 5.0CU and  4.1 are planned to be certified in the fourth quarter of fiscal year 2015 and  second quarter of fiscal year 2016 respectively, both may not complete  development and be fully integrated into the BMDS architectures until  2017.
Technical challenges for AWS 4.1 may reduce their capability or further  delay their delivery. For example, MDA’s analysis indicates that AWS 4.1  raid size handling capabilities do not meet the planned requirement. To  mitigate this issue, the program initially considered making modifications  to the system. However, Aegis BMD program management officials told  us that they rejected this option due to the expected cost and decided to  instead lower the requirement. Additionally, capability for intercepting  missiles in terminal phase of flight—designed to allow Aegis BMD ships to  protect nearby ships from ballistic missiles—is also at risk because of  technical challenges and may require an alternate design that could lead  to cost growth and schedule delays. Moreover, flight testing of this  capability is currently being considered to be conducted three months  after AWS 4.1 certification for operations, placing the program at  additional risk should issues be discovered during flight testing.
The delivery of AWS 5.0CU is expected to meet its 2015 delivery date,  but current plans indicate that its enhanced capability to intercept ballistic  missiles in the terminal phase of flight will be flight tested after delivery.  Currently, the flight test is planned for the first quarter of fiscal year  2017—more than one year after delivery—placing the program at  additional risk should issues be discovered during flight testing. The  program also continues to discover software defects faster than it can  rectify them, while also working on mitigating performance limitations from  previous versions that remain applicable. The program made progress in  rectifying prior shortfalls and has identified high priority fixes that are still  required. While the program plans to fix the key defects prior to delivery,  some modifications will have to be made after it is deployed.
In January 2014, the program reviewed the designs of both development  phases for AWS 5.1. For the first phase, which is designed to integrate  the SM-3 Block IIA with the weapon system and deliver other initial AWS  5.1 capabilities, the program demonstrated requisite maturity to proceed  to the next stage of development. For the second phase, which builds on  the first and is planned to complete AWS 5.1 capabilities, including  Engage On Remote, the program met review goals by demonstrating that  requirements needed to proceed with development have been well  defined. Despite the progress, however, the assessment of the Engage  On Remote capability has been delayed and may be at risk. This is a key  capability for PAA Phase 3 (including for EPAA), which is designed to  mitigate limitations posed by the range of the Aegis radar. The capability  allows the ship to execute intercepts based on tracks from certain forward  based radars before the threat comes close enough for the Aegis radar to  track it. As a result, it expands the space in which the ship can intercept  the threat and allows for greater defended area. The full delivery and  integration of this capability into the BMDS depends on Aegis BMD, as  well as C2BMC and certain sensors. While the required AWS is currently  projected to meet the date for a flight test scheduled to assess this  capability, C2BMC will not. Rather than delaying the test, MDA will  assess only part of the capability in the first quarter of fiscal year 2018, by  substituting key aspects with another Aegis ship to directly provide tracks  to the shooter. It is currently unclear, whether MDA will introduce another  test to assess the full remote engagement capability or add a requirement  to two subsequent operational flight tests, which are designed to assess  the BMD system-level performance of Phase 3 architectures. If MDA  chooses the latter, it will take on additional risk by adding another system- level test objective to already complex flight test designs. For specifics on  the C2BMC element, see appendix VI.
section_title: MDA Revised its Aegis BMD Baselines, Limiting Some Transparency by Reducing Insights into Developmental Activities
paragraphs: In fiscal year 2014, MDA changed its approach to managing the  development of the AWS, combining all spirals into a single baseline,  limiting some visibility into its progress for this year. MDA uses baselines  to monitor the progress of its programs and report them to Congress  annually in the BMDS Accountability Report. Previously, AWS spirals  were included with associated interceptors, aligned to EPAA phases. In  June 2014, MDA combined AWS 5.0CU, AWS 4.1 and AWS 5.1 into a  single baseline, managed by a single program manager. According to  Aegis BMD program management officials the reorganization was  expected to allow the program to realize efficiencies in managing the  development of the AWS spirals, because of the interdependency  between the spiral development efforts. However, officials also told us  that there are no tangible savings that have been realized as a result of  the reorganization. Moreover, in order for baselines to be useful for  managing and overseeing a program, they need to be stable over time so  progress can be measured and so that decision makers can determine  how best to allocate limited resources. In April 2013, we found that  activities from one Aegis BMD baseline were reallocated and combined  with activities in other baselines which limited our ability of assess them.  Similarly, the proposed baseline for fiscal year 2015 reconfigures the way  some content is presented, making comparison with 2014 baselines  difficult or impossible.
section_title: Appendix III: Aegis Ashore
paragraphs: Aegis Ashore’s first non-intercept flight test met its objectives.
MDA plans one intercept flight test to assess the Romanian capability and one to  assess the capability in Poland.  Schedule delays and changed testing requirements compress the time for  assessment of Aegis Ashore performance with other systems.  Aegis Ashore made progress addressing challenges related to radio-frequency  spectrum but some challenges remain.
subsections: section_title: Program Overview
paragraphs: Aegis Ashore is planned to be a land-based, or ashore, version of the  ship-based Aegis BMD. Aegis Ashore is to track and intercept ballistic  missiles in the middle of their flight using Standard Missile-3 (SM-3)  interceptors. Key components include a vertical launching system with  SM-3 interceptors and an enclosure, referred to as a deckhouse, that  contains the SPY-1 radar and command and control system. Aegis  Ashore will share many components with the sea-based Aegis BMD and  will use future versions of the Aegis BMD weapon system that are still in  development. Missile Defense Agency (MDA) plans to equip Aegis  Ashore with a modified version of the Aegis BMD weapon system  software that will share many components with the sea-based Aegis  BMD. A total of three Aegis Ashore facilities are planned: one test facility  in Hawaii, an operational facility in Romania in 2015, and another  operational facility in Poland in 2018 to support European Phased  Adaptive Approach (EPAA).
DOD deployed the test facility in April 2014. It was used for the first Aegis  Ashore flight test in May 2014, and will be used to flight test Aegis Ashore  capabilities as upgrades become available.
DOD plans to deploy Aegis Ashore in Romania with the Aegis BMD  Weapon System (AWS) 5.0CU and SM-3 Block IB in the 2015 time  frame. The program received all fabricated components at the site and is  currently installing the facility. It plans to complete testing of this facility by  the end of 2015.
DOD plans to deploy the second operational facility in the 2018 time  frame in Poland, equipping it and upgrading the facility in Romania with  the AWS 5.1 and SM-3 Block IIA. It plans to begin site preparations in  and begin fabrication in the middle of fiscal year 2016.
section_title: Aegis Ashore’s first non-intercept flight test met its objectives
paragraphs: MDA successfully conducted the first flight test involving components of  the Aegis Ashore system at the Aegis Ashore Missile Defense Test  Complex in May 2014. During the test, a simulated ballistic missile target  was acquired, and tracked. This flight test supports development of the  Aegis Ashore capability of Phase 2 of EPAA, planned to begin operations  in Romania in 2015. During the test, the Aegis BMD Weapon System  fired an SM-3 Block IB interceptor from the Vertical Launch System.  Several functions were exercised during the test, but the primary purpose  of the test, designated as Aegis Ashore Controlled Test Vehicle (AA  CTV)-01, was to confirm the functionality of Aegis Ashore by launching a  land-based SM-3. The test met its objectives but also revealed a problem.  Specifically, there was an issue with how the system steered the  interceptor, that potentially resulted from differences between the sea- based and ashore versions of the system. Program management officials  said this problem has been corrected and the correction will be installed  in the AWS software before the next flight test occurs.
section_title: MDA plans one intercept flight test to assess the Romanian capability and one to assess the capability in Poland
paragraphs: Aegis Ashore is scheduled to participate in only two intercept flight tests– one to assess its Romanian capability and the other to assess the  capability for Poland. These capabilities will be delivered to the warfighter  in 2015 and 2018 for EPAA Phase 2 and Phase 3, respectively. Since  2010, the program has reduced its test plan from seven flight tests to only  three, two of which involve intercepts. Both of these intercept tests–FTO- 02 E1 scheduled for the third quarter fiscal year 2015 and FTO-03 E1  scheduled for the third quarter of fiscal year 2018—are system-level  operational flight tests designed to assess the integrated capability of  BMD systems for the upcoming EPAA phase. According to program  officials, the risk to understanding performance and limitations is small  because the AWS slated for Aegis Ashore will be flight tested more  extensively on ships. However, the conditions on land are different than at  sea and require modifications to adapt the weapon system for operations  on land. While leveraging ship-based flight tests to assess some Aegis  Ashore capabilities saves testing costs, the non-intercept Aegis Ashore  flight test held in May 2014 demonstrated that adaptations made for land- based operations may have unforeseen performance implications. Flight  testing Aegis Ashore intercept capability just once prior to delivery may  result in schedule delays, cost growth or performance shortfalls, should  issues be discovered during flight testing.
section_title: Schedule delays and changed testing requirements compress the time for assessment of Aegis Ashore performance with other systems
paragraphs: Delays in construction at the Romanian operational site and changes to  test requirements delay system-level simulated demonstration of new  capabilities to just before Aegis Ashore delivery and limits time to rectify  issues, should they be discovered during testing. This test is designed to  assess the interoperability of the operational Aegis Ashore in Romania  with other systems slated for Europe. According to the program, the  changes to test requirements were driven by independent testing officials.  Previously, all Aegis Ashore tests were going to employ the test asset,  which is deployed at the Pacific missile range site in Hawaii. However,  MDA made the change to ensure that the operational Aegis Ashore is  tested along with the other operational systems deployed in Europe. This  test was delayed by about six months, and it is now scheduled to  conclude just prior to the delivery of Aegis Ashore in 2015 which limits  time for assessment and to rectify issues prior to delivery of the capability.
section_title: Aegis Ashore made progress addressing challenges related to radio-frequency spectrum but some challenges remain
paragraphs: The Aegis Ashore program identified potential workarounds to issues  associated with operating the Aegis Ashore radar in the presence of  European telecommunication infrastructure, but there could be additional  challenges. Radio-frequency is a set of waves that is used to operate the  SPY-1 radar used by Aegis BMD, as well as provide an array of wireless  communication services to the civilian community, such as mobile voice  and data services, radio and television broadcasting, and satellite-based  services. While only a part of spectrum needed for radar operations is  also used by Romanian telecommunications, the overlap presents  challenges with the use of the radar. In March 2011, April 2012, and April  2013 we highlighted issues that Aegis Ashore faces related to radio- frequency spectrum, including: (1) the possibility that the SPY-1 radar  might interfere with host nation wireless usage; and (2) the program and  the relevant host nation authorities must work together to ensure that host  nations approve use of the operating frequency needed for the SPY-1  radar.
In March 2014, the Romanian National Allied Radio Frequency Agency  granted DOD access to the entire spectrum needed for radar operations,  but with limitations. These peacetime limitations include the direction the  radar may be radiated as well as times of day. According to the program,  MDA has means to coordinate for additional radar operations if required,  but the current access should be sufficient to maintain radar reliability.  However, there could still be risk to some of the communications  infrastructure. The program completed a study that included  recommendations that could mitigate some of these effects, by modifying  Romanian civilian equipment that could be exposed to the periodic radar  radiation.
Throughout fiscal year 2014 the program also began negotiations with  Poland to secure the use of the Aegis Ashore radar across its entire  operating spectrum at that site by 2018. If mitigating procedures work  within Romania, DOD expects them to work in Poland. However,  anticipated interference during operations is still unknown. Poland has a  much more congested spectrum space than Romania, and according to  officials from European Command, could experience greater  unanticipated interference problems. Additionally, various objects that are  found on land and not at sea could interfere with the radar. For example,  wind farms, which are located near the proposed site, may interfere with  radar operations in some instances. According to program management  officials, this is not expected to be a significant issue because of where  potential threats would be coming from and the reliance of Aegis Ashore  on forward based radars for early acquisition of incoming threats.
section_title: Appendix IV: Aegis Ballistic Missile Defense Standard Missile-3 (SM-3) Block IB
paragraphs: The Aegis BMD program conducted a successful intercept test with the SM-3 Block  IB interceptor— FTM-22— on October 4, 2013, which is a key test for a full rate  production decision.  The SM-3 Block IB interceptor may not be flight tested again with the third-stage  rocket motor (TSRM) component redesign which increases production acquisition  risk.  The program plans for a multiyear procurement strategy in fiscal year 2016.
subsections: section_title: Program Overview
paragraphs: The Standard Missile-3 (SM-3) Block IB is a ship-and shore based missile  defense system interceptor designed to intercept short- to intermediate- range ballistic missiles during the middle stage of their flight. The SM-3  interceptor has multiple versions in development or production: the SM-3  Blocks IA, IB, and IIA. The SM-3 Block IB features an enhanced target  seeker capability for increased discrimination, an advanced signal  processor for engagement coordination, an improved throttleable divert  and attitude control system for adjusting its course, and increased range.  The SM-3 Block IB interceptor is linked with Aegis Ballistic Missile  Defense (BMD) Weapon System 4.0.2, Aegis BMD 5.0 Capability  Upgrade and Aegis Ashore. For additional information about the Aegis  BMD Weapon Systems see appendix II and for Aegis Ashore, see  appendix III.
The SM-3 Block IB program largely overcame previous development  challenges and successfully intercepted all targets in three flight tests. We  previously reported that its production line was repeatedly disrupted since  2011 due to flight test anomalies and that MDA had rectified many of  those issues identified since then.
However, as we reported last year, the final report for the investigation  regarding a second interceptor failure test that occurred in September  2013 was expected to be completed in December 2014, but according to  officials, the report is further delayed. MDA is also preparing to award a  production contract in fiscal year 2015.
section_title: The Aegis BMD program conducted a successful intercept test with the SM-3 Block IB interceptor— FTM-22—on October 4, 2013, which is a key test for full rate production decision
paragraphs: On October 4, 2013, MDA conducted a successful operational flight test  of the Aegis BMD system. The test resulted in the lethal intercept of a  medium-range ballistic missile target in an operationally representative  threat environment. The test, designated FTM-22, met its primary  objective, which was to intercept a medium- range ballistic missile target.  This test exercised the latest version of the second-generation Aegis  BMD Weapon System, capable of engaging longer range and more  sophisticated ballistic missiles.
FTM-22 was the last required test conducted for a full production  decision—the last key production authorization by the Under Secretary of  Defense, Acquisition, Technology, and Logistics that would allow MDA to  produce the remaining 366 of the 405 total interceptors. With the  successful results of FTM-22, MDA anticipates receiving approval for full  rate production of SM-3 Block IB from Under Secretary of Defense,  Acquisitions, Technology, and Logistics in fiscal year 2015.
section_title: The SM-3 Block IB interceptor may not be flight tested again with the third-stage rocket motor (TSRM) component redesign which increases production acquisition risk
paragraphs: Concurrently with initiating full rate production, the Aegis program office,  along with the contractor, is working on a redesign of the third-stage  rocket motor (TSRM) components. The TSRM is used to lift the  interceptor out of the atmosphere and direct the warhead to the target.  This component contributed to test failures. Specifically, although the  failure investigation is ongoing, preliminary results indicate that the  second interceptor failure from flight test FTM-21 occurred in the TSRM.  This failure is also related to the one that occurred in September 2011  flight test FTM-16E2. Consequently, although design changes are  considered necessary, MDA does not plan to demonstrate the redesign  works as intended via a flight test prior to production. According to  program officials and contractor representatives that produce the SM-3  Block IB interceptors, the effort to redesign components in the rocket  motor is considered to be relatively straightforward and low risk. Program  officials are currently planning to retrofit the interceptors that have already  been produced during the four year certification process. According to  program officials, they had planned to select the final redesign in early  first quarter of fiscal year 2015. However, because of developmental and  test challenges with the redesigned component, the program office  delayed the selection until later in the fiscal year.
Additionally, according to program officials, since the program has not  selected the redesign, it is too early to determine the costs associated  with inserting it into the interceptor and has not yet been accounted for.  Consequently, until the program thoroughly understands the extent of  needed modifications, if any, and their effects on performance as  demonstrated through testing, its production strategy is at risk of cost  growth and schedule delays. Additionally, different issues with that same  component have contributed to previous SM-3 Block IB schedule delays  and production disruptions in the past.
In 2014, we made a recommendation to delay full rate production until  such testing demonstrates that the redesigned interceptor is effective and  suitable. As it stands, MDA noted that any changes to the SM-3 Block IB  would not be included in the full production contract, and that the  retrofitting may lead to unanticipated cost increases. As we have  previously reported, MDA had experienced these consequences in other  elements when it pursued design changes concurrently with production.
section_title: The program plans for a multiyear procurement strategy in fiscal year 2016
paragraphs: After the program enters into full production, MDA has plans to enter into  a multiyear procurement contract which is a special contracting method  that allows the agency issue one contract for up to five years, which will  allow the agency to procure interceptors for up to five years, even though  funds for the entire five years may not be available at the time of award.  DOD would need to certify to Congress that the conditions for a multiyear  procurement are met. Congress will then have to specifically authorize  the multiyear procurement in law before MDA may award the contract.
When used appropriately, multiyear contracting can save money  compared to a series of annual contracts by allowing contractors to use  their resources more efficiently. However, multiyear procurement also  entails certain risks that must be balanced against potential benefits, such  as the increased costs to the government should the multiyear contract  be changed, and can limit DOD’s budget flexibility.
MDA is currently redesigning components of the TSRM of the SM-3 Block  IB interceptor and it is unclear whether or not it would need any additional  changes. Once the redesigned interceptor’s performance has been  demonstrated through flight tests the program office may also better  understand the costs needed to incorporate those changes into the  ongoing production, in addition to if any other design changes are  necessary. Consequently, the production strategy is at risk for cost  growth and schedule delays. Until the program thoroughly understands  the extent of needed modifications, and their effects on performance, not  only is the program at risk of additional cost growth and schedule  delays—it may also affect any planned cost savings associated with the  multiyear procurement.
section_title: Appendix V: Aegis Ballistic Missile Defense Standard Missile-3 (SM-3) Block IIA
paragraphs: The program completed its system-level review of the interceptor’s design and is  transitioning to product development to further refine and mature the design and  manufacturing processes.  The program faces several challenges, including technical issues with a key  component—Throttleable Divert and Attitude Control System.  The program has a number of flight tests and decisions to be made prior to Phase 3  declaration to the European Phased Adaptive Approach (EPAA).
subsections: section_title: Program Overview
paragraphs: The Standard Missile-3 (SM-3) interceptor has multiple versions in  development or production: the SM-3 Blocks IA, IB, and IIA. The SM-3  Block IIA interceptor has a 21-inch body diameter which provides  increased speed, more sensitive seeker technology, and an advanced  kinetic warhead. The SM-3 Block IIA is expected to defend against short-,  medium-, and intermediate-range ballistic missiles. Additionally, most of  the SM-3 Block IIA components will differ from other standard missile  versions requiring new technology being developed for the majority of the  SM-3 Block IIA components. This interceptor is planned to have  increased range compared to earlier SM-3s. For additional information on  the SM-3 Block IB interceptor, see appendix IV.
Initiated in 2006 as a cooperative development program with Japan, the  SM-3 Block IIA program was added to the European Phased Adaptive  Approach (EPAA) in 2009 to defend against longer range threats. The  SM-3 Block IIA interceptor is planned to be fielded with Aegis Ballistic  Missile Defense (BMD) Weapon System 5.1 by the 2018 time frame and  is expected to provide engage on remote capability, in which data from  other sensors is used to engage a target, and expand the range available  to intercept a ballistic missile. For additional information on Aegis BMD  Weapon Systems, see appendix II.
section_title: The program completed its system- level review of the interceptor’s design and is transitioning to product development to further refine and mature the design and manufacturing processes
paragraphs: The program held a system-level review of the interceptor’s design in  October 2013, and passed with no major action items and the design met  all top level requirements. Completion of at least 90 percent of  engineering drawings at this point provides tangible evidence that the  product’s design is stable, and a prototype demonstration shows that the  design is capable of meeting performance requirements. At the critical  design review, the SM-3 Block IIA program completed 100 percent of its  drawings and used a prototype of key components to test its  performance.
As a result of the critical design review, the SM-3 Block IIA design is  complete and is proceeding to product development and testing. In June  2014, MDA approved the transition for the SM-3 Block IIA from the  technology development phase to the production development phase in  its acquisition process. This is where the program further refines and  matures the design and manufacturing issues. Once into initial  production, the program would provide an initial base for production and  deliver assets for continued testing.
Additionally, in October 2013, the program completed a propulsion test  vehicle test event called PTV-1. It demonstrated that the SM-3 Block IIA  interceptor can launch from the vertical launch system.
The SM-3 Block IIA program and expected baselines will be included in  the BMDS Accountability Report. These baselines—which include  resource, schedule, and test, among others—are used to guide and track  development of ballistic missile defense capabilities.
section_title: The program faces several challenges, including technical issues with a key component— Throttleable Divert and Attitude Control System
paragraphs: The program is facing some technical challenges with its Throttleable  Divert and Attitude Control System (TDACS), which is a key interceptor  component that maneuvers the kill vehicle during the later stages of flight.  The program designated the issues involving the TDACS (and its  associated hardware) as a “moderate risk” that is driving up related cost  significantly and causing schedule delays. MDA noted that the problems  reduce the TDACS’ performance capabilities while still meeting MDA-set  requirements.
Because the part has no substitute or alternate supplier, concerns were  raised about the delays affecting the program schedule. However, the  contractor and program are working to ensure the TDACS and its  components do not affect the program schedule. With its current efforts,  the program office expects a reduction of risk regarding the TDACS issue.  Additionally, they are working with the contractor to stabilize costs and  schedules. Until then, the TDACS production and delivery costs and  schedule may continue to be at high risk. In the past, the program  experienced some problems developing the TDACS, which has  historically been a challenge for SM-3 development. Those challenges led  to delays in the program’s schedule in conducting the system-level review  as well as delaying flight tests until fiscal year 2016.
section_title: The program has a number of flight tests and decisions to be made prior to Phase 3 declaration to the European Phased Adaptive Approach (EPAA)
paragraphs: The program has nine flight tests scheduled between fiscal years 2015  and 2018 and production decisions for the program prior to the Phase 3  declaration of EPAA in late 2018. The flight tests include four intercept  tests and three operational tests. During that time period, the program is  making its initial production decision in the middle of fiscal year 2017.  Based on the program’s test schedule that is laid out, the program does  not have a lot of time to make adjustments or changes to the program if a  problem emerges.
As we reported in the past, any decisions it makes will affect the overall  program cost and timing. For example, program officials have stated that  the program has not yet determined the number of development and  production rounds to be produced. In addition, any decisions on future  production plans will require negotiations with Japan since many key  components on the interceptors are developed there.
section_title: Appendix VI: Command, Control, Battle Management and Communications (C2BMC)
paragraphs: Appendix VI: Command, Control, Battle  Management and Communications (C2BMC)
MDA is developing new capabilities for delivery to the current spiral.
Some planned modifications to the existing spiral, in part, mitigate earlier schedule  delays and capability gaps.  The program faces delays caused by added development scope and funding issues.  Key improvements to battle management capability of interceptor systems are  planned for delivery beyond 2020.
subsections: section_title: Program Overview
paragraphs: C2BMC is a global system that links and integrates individual missile  defense elements. It allows users to plan ballistic missile defense  operations, see the battle develop, and to manage designated sensors.  As the integrator, C2BMC allows the Ballistic Missile Defense (BMD)  system to defend against more missiles simultaneously, to conserve  interceptor inventory, and to defend a larger area than individual systems  operating independently. The program delivers the software capabilities in  spirals.
The current spiral is Spiral 6.4, which became operational in 2011. It  provides control of multiple radars. It also processes ballistic missile  tracks, and reports these tracks to Ballistic Missile Defense System  (BMDS) shooters, such as Ground-based Midcourse Defense (GMD),  Aegis BMD, Terminal High-Altitude Area Defense (THAAD), and Patriot,  which then use their own command and control, and mission planning  tools for stand-alone engagements. Upgrades to this version improve  threat acquisition, raid handling and discrimination and are planned  through 2016.
The next Spiral 8.2 is intended to improve and expand the Spiral 6.4  capabilities, further improving integrated sensor management. Initial  version, called Spiral 8.2-1, is planned for delivery in 2017. It will integrate  additional sensors and further improve track processing in support of  Aegis BMD capability to launch an interceptor before its sensor can  acquire the threat.
Spiral 8.2-3 is planned for initial delivery in 2018. It includes discrimination  upgrades and supports capabilities of some systems to intercept a threat  before their organic sensor can acquire that threat. Upgrades to Spiral  8.2-3 are planned past its initial delivery in 2018.
The current spiral has been operational and in sustainment since 2011.  The Missile Defense Agency (MDA) is developing and delivering  capability upgrades before the next version is available in 2017. These  upgrades are designed to mitigate existing capability gaps, some of which  have been identified through testing. Key capability upgrades include:
Regional Debris Mitigation, which allows the system to continue  tracking and engage threats when they are surrounded by a large  number of objects, or debris. C2BMC deployed the initial capability in  May 2014 in support of regional BMD.
Boost Phase Cueing between two AN/TPY-2 radars, which enables  one radar that is better positioned to acquire a threat while it is  boosting, to cue another radar that is better positioned for extended  tracking, allowing for earlier tracking and tracking of larger raids. This  capability was delivered in December 2014, in support of homeland  defense.
Discrimination Improvements for Homeland Defense–Near Term,  where C2BMC will integrate a set of element capabilities to improve  BMDS engagement reliability, lethality, and discrimination, and as a  result improve the warfighter shot doctrine, preserving limited  inventory. Planned for delivery in 2016, in support of homeland  defense. Additional upgrades for this capability are planned to be  included in future spirals.
section_title: Some planned modifications to the existing spiral, in part, mitigate earlier schedule delays and capability gaps
paragraphs: MDA is developing modifications to the fielded spiral of C2BMC that  mitigate earlier delays of the next spiral. As we found in March 2014, the  delivery of this new version, Spiral 8.2, has slipped from 2015 to 2017  having ripple effects on capabilities of other BMD systems. For example,  MDA delayed the delivery of a capability that improves the tracking of  threats by reducing uncertainties about their location earlier in the  engagement timeline, thus allowing Aegis BMD to launch its interceptors  sooner, extending the area it can defend. This delay also created a  misalignment between the schedules of C2BMC and two efforts that  improve satellite capabilities, which are expected to complete  development prior to 2015:   1.  Air Force’s upgrades to satellites that provide early warning of missile  launches for homeland defense, called Space-Based Infrared System  (SBIRS) Increment 2.   2.  MDA’s program for existing satellites to provide boost phase cues to  land based radars, in support of regional and homeland defense,  called BMDS Overhead Persistent Infra Red Architecture (BOA).
In order to mitigate the misalignment with the Air Force’s SBIRS  Increment 2 program, MDA developed a retrofit to C2BMC that ensured  continued interoperability between the satellites and the homeland  defense architecture. Specifically, without the retrofit, C2BMC would have  lost its ability to pass early warnings of missile launches to land based  radars and GMD, delaying the ability to track threats and develop plans to  intercept them. MDA began testing the retrofit in January 2014 and will  continue to do so through 2016. According to program documentation, the  cost of this effort was $8.9 million.
MDA delayed the delivery of boost phase cueing by BOA until Spiral 8.2  is available, but in 2014 it developed AN/TPY-2 to AN/TPY-2 cueing on  boosting tracks. This capability is significantly more limited than the BOA  cueing, since the satellite fields of view cover greater areas; however, it  allows some of the same benefits, including earlier acquisition and  tracking of larger raids by the radar receiving the cues. Furthermore,  according to MDA officials, the capability was developed to capitalize on  the delivery of the second AN/TPY-2 radar to Japan and will only be  applicable to homeland defense, while the satellite capability, once  delivered, will support all BMD missions. MDA delivered this capability in  December 2014. According to program documentation, the cost to  develop the capability was $3.7 million.
section_title: The program faces delays caused by added development scope and funding issues
paragraphs: Added development scope, furloughs and funding challenges could delay  C2BMC milestones and the delivery of some capabilities. According to  program documentation, some contract and program milestones were  delayed, some up to over one year, in part to accommodate work needed  to develop capabilities that were added over the last 2 years. Additionally,  the program underestimated some of its costs in the last budget  submission, which, in addition to the current and projected funding levels,  require it to reassess its plans.
While the program does not plan to develop new baselines until the fiscal  year 2015 budget is finalized, documentation indicates that completion of  key activities for the current and following spirals will need to be delayed.  For example the program plans to delay the assessment of C2BMC  capability that allows BMDS shooters to intercept threat missiles earlier,  based on tracks provided by forwarded based radars, before their own  radars can acquire the threat. Specifically, MDA plans to complete the  initial assessment of the remote engagement capability at the beginning  of fiscal year 2019, rather than the end of fiscal year 2017. The agency  will also assess the second phase of this capability delivery in the  beginning of fiscal year 2021, rather than in the beginning of the second  quarter of fiscal year 2019, as previously planned. While these new  schedules still support the system-level declarations planned for regional  and homeland defense in December 2018 and 2020 respectively, they  leave little time to rectify issues, should they be discovered during testing.  The program is also considering delaying Spiral 6.4 and 8.2-1 milestones,  but as of now, there are no plans to delay the assessments and  declaration of their capabilities.
section_title: Key improvements to battle management capability of interceptor systems are planned for delivery beyond 2020
paragraphs: C2BMC has limited battle management capabilities which currently allows  only for control of radars but does not provide a system-level capability to  coordinate engagement decisions. According to the Director, Operational  Test and Evaluation, effective “battle management” requires C2BMC to  not only collect and process information from sensors and weapons, as it  currently does, but to also determine which threats should be engaged by  which interceptor system, to produce the highest probability of  engagement success, and then to transmit this information back to the  sensors and weapons. While initially planned for delivery in 2018, such a  capability is currently planned for Spiral 8.4, which is scheduled for  delivery sometime after Spiral 8.2-3.
section_title: Appendix VII: Ground-based Midcourse Defense (GMD)
paragraphs: Appendix VII: Ground-based Midcourse  Defense (GMD)
Flight Test GMD (FTG)-06b was a milestone achievement towards demonstrating that  the Capability Enhancement (CE)-II version works as intended.  Flight testing is several years behind; CE-II demonstration cost increased to $1.98  billion.
Delays in interceptor retrofits extend risk to warfighter.
GMD’s Redesigned Kill Vehicle (RKV) program has the potential to end two decades  of multi-billion dollar efforts to fix and upgrade the kill vehicle.
subsections: section_title: Program Overview
paragraphs: The GMD program is a ground-based defense system designed to defend  the United States against a limited intermediate and intercontinental  ballistic missile attack in the middle part of their flight.
Key components include a ground-based interceptor consisting of a  booster with an exoatmospheric kill vehicle (EKV) on top, as well as a  communication system and a fire control capability. The kill vehicle uses  on-board sensors and divert capabilities to steer itself into the threat  missile to destroy it.
There are currently two versions of the kill vehicle that have been  deployed: the initial design known as the Capability Enhancement (CE)-I  and the follow-on design, known as the CE-II. In March 2013, the  Secretary of Defense announced plans to increase the number of  deployed GMD interceptors from 30 to 44 to add protection to the  homeland and to stay ahead of long-range ballistic missile threats.
The Missile Defense Agency (MDA) conducted a successful CE-II  intercept test, called Flight Test GMD (FTG)-06b, in June 2014. MDA has  since resumed CE-II interceptor production with deliveries starting in the  first quarter of fiscal year 2015.
In addition, MDA recently decided a redesign of the GMD kill vehicle is  required to address ongoing CE-II reliability concerns and has begun a  new effort, called the Redesigned Kill Vehicle (RKV). MDA worked with  industry to finalize the RKV concept, which, according to MDA, informed  its schedule goals to conduct the first flight test in fiscal year 2018 and  new interceptor production beginning in fiscal year 2020.
FTG-06b was a milestone achievement for the GMD program and the first  of several needed successful intercept tests to fully demonstrate the CE-II  interceptor works as intended. While the successful execution of FTG-06b  was a major accomplishment for the program, additional testing is  necessary to demonstrate the CE-II design works as intended and for the  warfighter to have a full understanding of the interceptor’s capabilities and  limitations. Some of the CE-II capabilities that both MDA and the  warfighter have identified that need to be demonstrated include:  intercepting a target representative of an intercontinental ballistic missile;  performing a salvo test where two interceptors are utilized against a  single target; and performing a long time of flight intercept. MDA currently  plans to complete these tests by fiscal year 2024.
section_title: Flight testing is several years behind; CE-II demonstration cost increased to $1.98 billion
paragraphs: The path to FTG-06b was a disruptive period for the GMD program. The  program initially planned to conduct its first CE-II intercept test, FTG-06,  in the first quarter of fiscal year 2008 prior to fielding the first CE-IIs later  in fiscal year 2008. However, in March 2009, we found that CE-II fielding  had outpaced flight testing, as the program began fielding CE-IIs in  advance of conducting FTG-06. The program subsequently experienced  approximately six and a half years of delays, failing both of its CE-II  intercept attempts and a CE-I intercept attempt. With the GMD program’s  successful execution of FTG-06b, the program demonstrated it had  resolved some of the major technical problems discovered during the  prior six-and-a-half year period of test failures and development  challenges and successfully executed FTG-06b.
Although the program has resolved many of the technical challenges, it  now faces the long term effects from the prior period, as flight tests were  delayed by several years in order for the program to overcome the test  failures. For example, the program initially planned to conduct a salvo  intercept test in early fiscal year 2009 following a successful CE-II  intercept test. However, because of the test failures and development  delays, the salvo test is now planned to occur in late fiscal year 2017— almost nine years later than initially planned. The cumulative effect of  these delays has extended the completion of planned CE-II flight tests to  fiscal year 2023—approximately five and a half years after the program  has completed fielding the CE-IIs.
Another long term effect from the prior period of CE-II test failures is that  the cost to demonstrate, as well as fix, the currently deployed CE-IIs has  increased from an initial $236 million—the cost of the first CE-II flight  test—to currently $1.981 billion. The need for failure reviews, additional  flight tests, mitigation development efforts, and a retrofit program have  increased the CE-II’s demonstration cost by $1.745 billion. Some of the  mitigation development efforts are ongoing and, as such, the cost to  demonstrate and fix the CE-IIs may continue to increase.
section_title: Delays in interceptor retrofits extend risk to warfighter
paragraphs: MDA’s fleet of currently deployed CE-I and CE-II interceptors are in need  of upgrades and retrofits to address prior test failures. However, in order  to meet the goal of fielding 44 interceptors by the end of 2017 and also  offset the unplanned cost increase to demonstrate and fix the CE-II, MDA  plans to delay fixing the fielded CE-IIs until fiscal year 2015 with fielding  completed in fiscal year 2016. MDA also plans to delay fixing the fielded  CE-Is until fiscal year 2018, which will continue beyond fiscal year 2020.  In addition, according to program officials, the program does not plan to  fix the currently deployed or newly produced CE-IIs’ divert thrusters, a  component with known performance issues that helps steer the  interceptor in flight.
While MDA’s plan to produce new interceptors ahead of fixing the fielded  interceptors may enable the program to field additional interceptors  sooner, it also increases risk for the warfighter because the deployed  interceptors do not have the fixes needed to address known issues. As  such, the fielded interceptors are susceptible to experiencing the same  failure modes exhibited during prior test failures, leaving the warfighter  with an interceptor fleet that may not work as intended. According to  MDA, the warfighter can compensate for some of these anticipated in- flight reliability failures by launching a number of interceptors to defend  against an enemy attack. However, such an approach is inventory- intensive and limits the system’s raid handling capacity, reducing the  system’s overall effectiveness to defend the homeland against ballistic  missile attacks. In addition, since MDA tentatively plans to begin replacing  the fleet of currently fielded interceptors with RKV interceptors starting in  fiscal year 2020, it is unclear why MDA would expend the resources to fix  the CE-Is only to begin replacing them two years later.
MDA’s decision to redesign the GMD kill vehicle will be DOD’s seventh  major attempt to fix and improve the current kill vehicle design. The  current GMD kill vehicle was initially designed as a prototype in the early  1990’s. Since then, MDA has spent tens of billions of dollars to correct  issues with the original prototype design, improve the kill vehicle’s  performance, and increase the number of interceptors fielded to expand  capabilities to defend the homeland from ballistic missile attacks. In the  fall of 2013, MDA began a new effort to redesign the GMD kill vehicle,  called the Redesigned Kill Vehicle (RKV), to address growing concerns  within the department about the CE-II’s reliability. The RKV is in addition  to efforts currently underway to upgrade and redesign the CE-II, as seen  in table 12 below:  MDA’s prior performance in upgrading and redesigning the GMD kill  vehicle has achieved mixed results. Over the past 15 years, MDA has, on  average, initiated redesign or upgrade efforts for GMD approximately  every two years. These efforts, while perhaps needed, have proven to be  very expensive and, according to MDA, did not achieve the goal of  providing the warfighter with a reliable, producible, and cost-effective  interceptor.
A more recent example of updating the GMD kill vehicle is the CE-II Block  I, which began in 2010 when MDA awarded a contract to Boeing to  develop and sustain the GMD system. As part of that effort, Boeing was  tasked with redesigning the CE-II EKV to address obsolescence and  improve reliability, producibility, availability, and maintainability. MDA has  since devised a new, multi-phased strategy to evolve the GMD system  and the planned improvements for the CE-II Block I are now limited to  component modifications and quality improvements that were identified  during the FTG-06a failure resolution effort. Many of the initial goals and  objectives for the CE-II Block I appear to have been passed onto the  RKV. According to MDA, it is pursuing the RKV to replace the current  fleet of interceptors with new ones that are testable, reliable, more  producible, and cost effective.
During an April 2014 Senate Armed Services Committee hearing, the  Director, MDA, stated that the agency was committed to implementing a  rigorous acquisition process for the redesign effort and would not  circumvent sound acquisition practices. Also, in an April 2014 report  submitted to Congress describing the RKV’s plans and objectives, MDA  described some initial steps the agency is taking to employ a rigorous  systems engineering process, such as including manufacturability,  reliability, and testability criteria as critical design conditions. The  agency’s recent commitment to follow a knowledge-based approach to  acquire the RKV is a positive indication that the agency is seeking to  improve its investment decisions and achieve better outcomes. Our prior  work on best practices for acquisitions found that successful programs  take steps to confirm their technologies are mature, their designs are  stable, and their production processes are in control. These steps help  ensure a high level of knowledge is achieved at key junctures in  development.
section_title: Appendix VIII: Targets and Countermeasures (Targets)
paragraphs: Appendix VIII: Targets and Countermeasures  (Targets)
Key Findings for Fiscal Year 2014
The Targets program supported MDA’s test schedule and  improved reliability by reducing failures.
The program’s current contracting approach may result in better  acquisition outcomes.
The Targets program has flown targets in non-intercept tests that  can reduce risks, but it continues to use new targets in more  expensive and higher risk intercept tests.
subsections: section_title: Program Overview
paragraphs: The MDA’s Targets and Countermeasures (hereafter referred to as  Targets or Targets program) designs, develops, and procures missiles to  serve as targets during the testing of missile defense systems. As such,  targets are test assets and are not operationally fielded. A typical target  consists of a launch vehicle with one or more boosters, a control module  that steers the vehicle after the booster stage separates, a payload  module that can deploy countermeasures, and a surrogate re-entry  vehicle.
The Targets program acquires many types of targets covering the full  spectrum of threat missile capabilities and ranges. While some targets  have been used by the Missile Defense Agency’s (MDA) test program for  years, others have been recently or are now being developed to more  closely represent current and future threats. The quality and availability of  these targets are instrumental to the execution of MDA’s flight test  schedule. See table 13 for the quantities of targets planned for fiscal year  2014 through 2019 based on the range of the target.
section_title: The Targets program supported MDA’s test schedule and improved reliability by reducing failures
paragraphs: The Targets program successfully launched four targets in fiscal year  2014 to support MDA’s test schedule, including the first flight of a new  medium- range target called the ARAV-TTO-E—described as a simple  low-cost target by program officials. Specifically, the Targets program  provided three short-range targets and one medium-range target to  support Aegis testing requirements, including the full-rate production  decision for the SM-3 Block IB interceptor. The Targets program provided  seven additional targets in fiscal year 2014, including an intermediate- range target to support the retest of Ground-based Midcourse Defense’s  (GMD) Capability Enhancement (CE)-II interceptor that failed during FTG- 06a in December 2010.
In the past we have reported that reliability and availability of targets has  caused delays in MDA’s testing schedule. For example, target failures  and anomalies have caused the Terminal High Altitude Area Defense  (THAAD) program to change its flight test plan and decrease the amount  of flight tests. However, while the program has improved its reliability by  reducing the number of target failures (see figure 2), target availability  remains a risk to MDA’s test schedule.
From fiscal years 2010 through 2014, only one of the 46 targets launched  failed. The Targets program may have reduced target failures during this  timeframe, in part, by primarily using short-range targets that are less  complex than medium-, intermediate-, and intercontinental-range targets.  Moving forward, however, the majority of MDA’s tests will use medium-,  intermediate-, and intercontinental-range targets. Another contributing  factor to the reduction in target failures may be the additional time  available to further develop targets while programs have been resolving  developmental issues. For example, the GMD program’s CE-II interceptor  failed during FTG-06a in December 2010 which resulted in the need for a  retest. The GMD program’s first retest failed in fiscal year 2011 and it  successfully conducted a retest in fiscal year 2014. Consequently, this  slowed the GMD program’s test schedule and subsequently its target  demands providing the Targets program with additional time to further  develop or resolve issues with any of its targets. As GMD and other  programs resolve their developmental issues, the test plan becomes  more aggressive, and target demands increase, additional time to  develop or address issues with targets may not be as readily available.
Target availability remains a risk to the MDA test plan. For example, two  of the Targets program’s medium-range targets—the MRBM T1/T2 and  MRBM T3—have not been available as planned for some tests.  Consequently, these tests either received substitute targets or were  delayed. According to program officials, there was a delay in awarding the  MRBM T1/T2 contract due to a procurement integrity allegation which  was not substantiated, but affected its availability for testing. As a result,  the first flight of this target was delayed two and half years from the third  quarter of fiscal year 2014 to the first quarter of fiscal year 2017 and  several substitute targets were needed for tests between that timeframe.  The MRBM T3 has had some development issues that had to be resolved  which delayed its availability for tests, according to program officials.  Subsequently, the first flight of this target was delayed approximately one  year from the first quarter of fiscal year 2014 to the first quarter of fiscal  year 2015.
section_title: The program’s current contracting approach may result in better acquisition outcomes
paragraphs: The program’s contracting approach for targets is potentially improving by  moving from sole-source to competitive awards and restructuring  contracts to better achieve desired outcomes. Past contracting decisions  have had cost and schedule impacts. For example, the Targets program  began work on a medium-range target—the eMRBM—in fiscal year 2010  under an existing contract. According to program officials, the eMRBM  contract did not contain disincentives for poor performance or failures.  Accordingly, when there were issues with the target during testing, the  program stated they had to pay the contractor additional money to resolve  the issues. Consequently, after developmental delays and spending $333  million for two of these targets—one successfully used in fiscal year 2013  and one planned to be used in fiscal year 2015—the remaining  requirements were reduced due to affordability and the multiple tests that  were scheduled to use this target either received substitute targets or  were deleted. Conversely, in fiscal year 2014, the Targets program  competitively awarded a contract for a new medium-range target—MRBM  T1/T2—which, according to program officials, includes a range of  incentives for successful execution during testing and a fixed price for the  target to better control costs and achieve expected outcomes. As such, if  the target performs poorly or fails during a test, then according to program  officials, the contractor may receive less money.
Program officials explained that they have also adjusted the contracting  approach to better control costs by only buying the number of targets  needed and including options to buy additional targets at a pre-negotiated  price if requirements change. For example, the MRBM T3 contract  procures four targets, but it also has options for up to three additional  targets. As structured, this gives the program some flexibility to adjust to  changing requirements with less risk of impacts to cost and the test  schedule.
section_title: The Targets program has flown targets in non-intercept tests that can reduce risks, but it continues to use new targets in more expensive and higher risk intercept tests
paragraphs: The Targets program successfully flew a new medium-range target during  a non-intercept flight test in October 2014 that may enable the program to  reduce risks associated with this target prior to its use in an intercept flight  test in fiscal year 2015. Non-intercept flight tests can serve as risk  reduction flights by confirming that the target works as intended and to  discover and resolve issues prior to its use in a more costly and higher  risk intercept flight test that is designed to test a system’s performance.  However, the Targets program plans to use new intermediate- and  intercontinental-range targets for the first time in intercept flight tests in  fiscal years 2015 and 2016, respectively. Program officials explained that  many of the components in the intermediate- and intercontinental-range  targets have already been flown and based on previous flight data and  modeling and simulation they have a high level of confidence that the  targets will work as intended. The Targets program is also taking other  measures, such as component-level ground tests and pre-test trials, to  identify and resolve any issues prior to the planned intercept tests. We  have previously recommended that MDA conduct risk reduction flight  tests—non-intercept tests—for each new target, but it has not fully  implemented this recommendation and program officials maintain that the  decision to use new targets in intercept flight tests will continue based on  associated risks.
section_title: Appendix IX: Terminal High Altitude Area Defense (THAAD)
paragraphs: Appendix IX: Terminal High Altitude Area  Defense (THAAD)
THAAD delivered assets for operational use prior to demonstrating their capability in  a flight test.  THAAD delivered 10 interceptors to complete its second lot in fiscal year 2014.  THAAD’s streamlined battery configuration may enable cost savings and early  delivery of the remaining batteries.  A new transport method may double the number of THAAD interceptors that can be  transported via C-17 aircraft in fiscal year 2015.
subsections: section_title: Program Overview
paragraphs: THAAD is a rapidly-deployable ground-based system able to defend  against short- and medium-range ballistic missile attacks during the  middle and end stages of a missile’s flight. THAAD is organized as a  battery that consists of interceptors, multiple launchers, a radar, a fire  control and communications system, and other support equipment. The  first two batteries have been conditionally accepted by the Army for  operational use. In December 2014, THAAD received urgent materiel  release approval from the Commanding General of the United States  Army Aviation and Missile Command to enable an earlier delivery of  equipment for the next two batteries for operational use to meet the  Army’s request to support urgent warfighter needs. THAAD plans to  continue production through fiscal year 2025, for a total of 7 batteries, 503  interceptors, and 7 radars.
THAAD has two development efforts—THAAD 1.0 and THAAD 2.0.  THAAD 1.0 is for the production of the batteries, interceptors, and  supporting hardware and provides the warfighter with initial integrated  defense against short- and medium-range threats in one region. THAAD  2.0 is primarily software enhancements that expand THAAD’s ability to  defend against threats in multiple regions and at different ranges, and  adds debris mitigation and other upgrades.
THAAD currently has two hardware configurations—one for the first two  batteries and another to address obsolescence issues for the remaining  five batteries. However, the program plans to equip the first two batteries  with the upgraded hardware by fiscal year 2018. THAAD is testing the  new configuration that addresses obsolescence issues in two upcoming  flight tests in fiscal year 2015.
THAAD delivered assets to defend against an intermediate-range threat,  although this capability is not planned to be demonstrated in a flight test  until the fourth quarter of fiscal year 2015. As such, THAAD program  officials currently have limited insight into if and how THAAD will perform  against an intermediate-range threat. However, program officials expect  THAAD to perform successfully based on modeling and simulations and  analysis from a previous flight test that used a medium-range target with  a velocity close to that of an intermediate-range target. If THAAD does  not perform as expected during this test, the program may have to retrofit  its currently deployed assets at an additional cost.
THAAD delivered equipment for its next two batteries for operational use,  although it has not flight tested the changes made to this equipment to  address obsolescence issues. THAAD planned to release these two  batteries for operational use in the fourth quarter of fiscal year 2016, but  the Army requested an urgent materiel release enabling operational use  earlier to meet warfighter needs. However, these two batteries have new  hardware and software to address obsolescence issues and the two flight  tests to assess these changes are in the fourth quarter of fiscal year  2015. Without the flight tests to confirm that the obsolescence issues  have been corrected, the program may have delivered assets to the Army  that may not work as intended or that may require fixes.
THAAD delivered the remaining 10 interceptors to complete its second lot  in fiscal year 2014, which represents a 60 percent decrease in production  from the prior fiscal year. Program officials attribute the decrease in  production to funding challenges related to sequestration. Although the  program only delivered 10 interceptors in fiscal year 2014, it was able to  avoid costs associated with decreased production by combining the build  of subassemblies for its next lot of interceptors with some foreign military  sales. According to program officials, this allowed the program to avoid  over a $100 million in costs because the production rate remained at a  sufficient level to prevent any additional funding to accommodate  decreases.
The first two THAAD batteries conditionally accepted by the Army for  operational use have a configuration that includes two tactical station  groups—one for fire control and communications and another as  backup—that are both fully interchangeable. According to program  officials, the warfighter has been primarily using one tactical station group  and using the other for training when needed. As such, the program  streamlined the battery configuration to a single tactical station group and  it is developing a table-top trainer and portable planner that program  officials liken to the size and functionality of a computer to subsume the  role of the second one being used for training. The remaining batteries  will have the streamlined configuration and program officials noted that  they will also update the first two batteries with the streamlined  configuration when they are modernizing them with the changes to  address obsolescence. Program officials believe that this streamlined  battery configuration has reduced cost for the program which may allow  the early delivery of the remaining batteries.
section_title: A new transport method may double the number of THAAD interceptors that can be transported via C- 17 aircraft in fiscal year 2015
paragraphs: Program officials explained that currently four THAAD interceptors can be  transported at one time in a C-17 aircraft, but the program has designed  and tested a new missile transport method that may allow it to double the  capacity per aircraft in fiscal year 2015. The program is spending  approximately $59 million to achieve this doubled capacity and plans to  have the ability to equip all of its batteries with this upgrade by fiscal year  2019. Program officials assert that this new missile transport method, if  fully implemented, may provide efficiencies for the warfighter by reducing  the number of C-17 aircraft flights to transport THAAD interceptors to  needed locations.
section_title: Appendix X: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, LaTonya Miller, Assistant  Director; David Best; Helena Brink; Joe Kirschbaum; Anh Nguyen; Wiktor  Niewiadomski; Kenneth E. Patton; Karen Richey; Steven Stern; Robert  Swierczek; Brian Tittle; Hai V. Tran; and Alyssa Weir.