Defense Acquisitions: 2009 Is a Critical Juncture for the Army's Future Combat System
Published: 2008-03-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Future Combat System (FCS) program--which comprises 14 integrated weapon systems and an advanced information network--is the centerpiece of the Army's effort to transition to a lighter, more agile, and more capable combat force. The substantial technical challenges, the Army's acquisition strategy, and the cost of the program are among the reasons why the program is recognized as needing special oversight and review. Section 211 of the National Defense Authorization Act for Fiscal Year 2006 requires GAO to report annually on the FCS program. This report includes an examination of (1) how the definition, development, and demonstration of FCS capabilities are proceeding, particularly in light of the go/no-go decision scheduled for 2009; (2) the Army's plans for making production commitments for FCS and any risks related to the completion of development; and (3) the estimated costs for developing and producing FCS.
section_title: What GAO Found
paragraphs: The progress made during the year by the FCS program, in terms of knowledge gained, is commensurate with a program in early development. Yet, the knowledge demonstrated thus far is well short of a program halfway through its development schedule and its budget. This portends additional cost increases and delays as FCS begins what is traditionally the most expensive and problematic phase of development. Thus, FCS's demonstrated performance, as well as the reasonableness of its remaining resources, will be paramount at the 2009 milestone review for the FCS program. In the key areas of defining and developing FCS capabilities, requirements definition and preliminary designs are proceeding but not yet complete; critical technologies are immature; complementary programs are not yet synchronized; and the remaining acquisition strategy is very ambitious. Beginning in 2008, the Army plans to make a series of commitments to produce FCS-related systems in advance of the low-rate production decision for the FCS core program in 2013. In general, production commitments are planned before key information is available. In 2008 and 2009, the Army plans to begin funding production of the first of three planned spin outs of FCS technologies to current forces. However, its commitment to the first spin out may be made before testing is complete. Also starting in 2008, the Army intends to commit to production of early versions of the Non-Line-of-Sight Cannon. This commitment is being made to respond to congressional direction to field the cannon. FCS technologies, network, and designs are not yet mature enough for production, and thus the cannons produced will not be deployable without significant modifications. Advance procurement funding for the first full suite of FCS systems will begin in fiscal year 2011, the budget for which will be presented to Congress in February 2010--less than a year after the milestone review and before the stability of the FCS design is assessed at the critical design review. In addition, the Army plans to commit to using Boeing, its lead system integrator, for the early production of FCS systems through the initial production phase of the FCS system of systems. By the time of the production decision in 2013, $39 billion will have already been invested in FCS, with another $8 billion requested. Thus, while demonstration of the FCS's capability falls late in the schedule, commitments to production are likely to come early--an untenable situation for decision makers. The Army's $160.9 billion cost estimate for the FCS program is largely the same as last year's but yields less content as the number of FCS systems has since been reduced from 18 to 14. There is not a firm foundation of knowledge for a confident cost estimate. Also, two independent cost assessments are significantly higher than the Army's estimate. However, the Army maintains that it will further reduce FCS content to stay within its development cost ceiling. Should the higher cost estimates prove correct, it seems unlikely that the Army could reduce FCS content enough to stay within the current funding constraints while still delivering a capability that meets requirements.

section_title: Letter
paragraphs: The Future Combat System (FCS) program—which comprises 14  integrated weapon systems and an advanced information network needed  for a brigade combat team—is the centerpiece of the Army’s efforts to  transition to a lighter, more agile, and more capable combat force and,  according to the Army, the greatest technology and integration challenge it  has ever undertaken. The Army seeks to develop and then integrate  dozens of new technologies in the FCS program and ultimately create a  force in which people, platforms, weapons, and sensors are linked  seamlessly together in a system of systems.
The Army started the FCS program in May 2003 before defining what the  systems were going to be required to do and how they would interact. The  Army moved ahead without determining whether the concept could be  successfully developed with existing resources—without proven  technologies, a stable design, and available funding and time. The Army  projects the FCS program will cost $160.9 billion, which does not include  all the costs to the Army, such as complementary programs. The Army is  using a unique partner-like arrangement with a lead system integrator  (LSI), Boeing, to manage and produce the FCS. For these and other  reasons, the program is recognized as being high risk and needing special  oversight. Accordingly, in 2006, Congress mandated that the Department  of Defense (DOD) hold an FCS milestone review following the FCS  preliminary design review, which is now scheduled for February 2009.  Congress directed that the review include an assessment of whether (1)  the needs are valid and can be best met with the FCS concept, (2) the FCS  program can be developed and produced within existing resources, and  (3) the program should continue as currently structured, be restructured,  or be terminated. Congress required the Secretary of Defense to review  and report on specific aspects of the program, including the maturity of  critical technologies, program risks, demonstrations of the FCS concept  and software, and a cost estimate and affordability assessment.
Given its cost, scope, and technical challenges, section 211 of the National  Defense Authorization Act for Fiscal Year 2006 requires GAO to report  annually on the FCS program. The specific objectives of this report are to  address (1) how the definition, development, and demonstration of FCS  capabilities are proceeding, particularly in light of the go/no-go decision  scheduled for 2009; (2) the Army’s plans for making production  commitments for FCS and any risks related to completing development;  and (3) the estimated costs for developing and producing FCS and risks  the Army faces in both meeting the estimate and providing commensurate  funding.  We are issuing a second report to address FCS network and  software development.
In conducting our work, we have contacted numerous DOD and Army  offices. We reviewed documents pertaining to the FCS program, including  the Operational Requirements Document, the Acquisition Strategy  Report, technology assessments, and modeling and simulation results;  attended meetings at which DOD and Army officials reviewed program  progress; and held discussions with key DOD and Army officials on  various aspects of the program. Officials from DOD and the Army have  provided us access to sufficient information to make informed judgments  on the matters in this report. In addition, we drew from our body of past  work on weapon systems acquisition practices. We performed our work  from March 2007 to March 2008 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.  Appendix I further discusses our scope and methodology.
subsections: section_title: Background
paragraphs: The FCS concept is designed to be part of the Army’s Future Force, which  is intended to transform the Army into a more rapidly deployable and  responsive force that differs substantially from the large division-centric  structure of the past. The Army is reorganizing its current forces into  modular brigade combat teams, each of which is expected to be highly  survivable and the most lethal brigade-sized unit the Army has ever  fielded. The Army expects FCS-equipped brigade combat teams to provide  significant warfighting capabilities to DOD’s overall joint military  operations. The Army is implementing its transformation plans at a time  when current U.S. ground forces continue to play a critical role in ongoing  conflicts in Iraq and Afghanistan. The Army has instituted plans to spin out  selected FCS technologies and systems to current Army forces throughout  the program’s system development and demonstration phase.
The Army recently made a number of adjustments to its plans for the FCS  program. The revised program will no longer include all 18 systems as  originally planned. The FCS family of weapons is now expected to include  14 manned and unmanned ground vehicles, air vehicles, sensors, and  munitions that will be linked by an advanced information network. The  systems include    eight new types of manned ground vehicles to replace current tanks,  infantry carriers, and self-propelled howitzers;  two classes of unmanned aerial vehicles;    several unmanned ground vehicles; and   an attack missile.
Fundamentally, the FCS concept is to replace mass with superior  information—allowing the soldier to see and hit the enemy first rather to  rely on heavy armor to withstand a hit. This proposed solution attempts to  address a mismatch that has posed a dilemma to the Army for decades: the  Army’s heavy forces had the necessary firepower needed to win but  required extensive support and too much time to deploy while its light  forces could deploy rapidly but lacked firepower. If the Future Force were  to become a reality, then the Army would be better organized, staffed,  equipped, and trained for prompt and sustained land combat, qualities  intended to ensure that the Army would dominate over evolving,  sophisticated threats. The Future Force is to be offensively oriented and  will employ revolutionary concepts of operations, enabled by new  technology. The Army envisions a new way of fighting that depends on  networking the force, which involves linking people, platforms, weapons,  and sensors seamlessly together in a system of systems.
If successful, the FCS system-of-systems concept would integrate  individual capabilities of weapons and platforms, thus facilitating  interoperability and open system designs. This concept would represent  significant improvement over the traditional approach of building superior  individual weapons that must be retrofitted and netted together after the  fact. This transformation, in terms of both operations and equipment, is  under way with the full cooperation of the Army warfighter community. In  fact, the development and acquisition of FCS is being accomplished using  a uniquely collaborative relationship among the Army’s developers, the  participating contractors, and the warfighter community.
The Army is using a management approach for FCS that centers on an LSI  to provide significant management services to help the Army define and  develop FCS and reach across traditional Army mission areas. Because of  its partner-like relationship with the Army, the LSI’s responsibilities  include requirements development, design, and selection of major system  and subsystem contractors. The team of Boeing and its subcontractor,  Science Applications International Corporation, is the LSI for the FCS  system development and demonstration phase of acquisition, which is  expected to extend until 2017. The FCS LSI is expected to act on behalf of  the Army to optimize the FCS capability, maximize competition, ensure  interoperability, and maintain commonality in order to reduce life-cycle  costs, and for overall integration of the information network. Boeing also  acts as an FCS supplier in that it is responsible for developing two  important software subsystems. Army representatives stated they did not  believe the Army had the resources or flexibility to use its traditional  acquisition process to field a program as complex as FCS under the  aggressive timeline established by the then-Army Chief of Staff. The Army  will maintain oversight and final approval of the LSI’s subcontracting and  competition plans.
In 2007, we reported on, among other things, why the Army decided to use  an LSI for the FCS program and the nature of the LSI’s working  relationship with the Army. We found that the use of an LSI for FCS  provides an oversight challenge for the Army and that the Office of the  Secretary of Defense has an important role in providing oversight on the  FCS program. Congress has expressed concern over the use of LSI’s, and  has prohibited DOD from awarding new contracts for LSI functions after  October 2010.
subsections: section_title: Knowledge-Based Processes Necessary for Successful Development
paragraphs: Since the mid-1990s, we have studied the best practices of leading  commercial companies. Taking into account the differences between  commercial product development and weapons acquisitions, we have  articulated a best practices product development model that relies on  increasing knowledge when developing a new product. This knowledge- based approach requires developers to make investment decisions on the  basis of three specific, measurable levels of knowledge at critical  junctures over the course of a program:    Knowledge Point 1: At program start, the customer’s needs should  match the developer’s available resources in terms of mature  technologies, time, and funding. Indications of this match include  having firm requirements in place as well as demonstrated maturity of  technologies needed to meet customer needs. A preliminary design  review at or near the start of product development is typically the  vehicle used to help stabilize performance, schedule, and cost  expectations.
Knowledge Point 2: About midway through development, the product’s  design should be stable and demonstrate that it is capable of meeting  performance requirements. A critical design review at this mid-point is  the vehicle for making the determination and generally signifies the  point at which the program is ready to start building production- representative prototypes.
Knowledge Point 3: By the time of the production decision, the product  must be shown to be producible within cost, schedule, and quality  targets and have demonstrated its reliability. It is also the point at  which the design should demonstrate through realistic testing that it  performs as expected.
The most important part of a knowledge-based approach occurs at  program start, when product development begins. At that point, a timely  match of requirements and resources is critical to successful product  development. A key difference between successful products—those that  perform as expected and are developed within estimated resources—and  problematic products is when the match is achieved. When a customer’s  needs and a developer’s resources are matched before a product’s  development starts, it is more likely the development will result in a  successful product that is able to meet cost, schedule, and performance  objectives. When this match takes place later, after the product  development is underway, problems occur that can significantly increase  the expected time and money as well as result in performance shortfalls.
section_title: Knowledge Has Been Gained on FCS Definition, Development, and Demonstration but Falls Well Short for a Program at Midpoint
paragraphs: Because the Army went forward with FCS development before attaining  key knowledge such as firm requirements and mature technologies, its  knowledge levels have consistently lagged behind its calendar schedule.  It  will be a challenge for the Army to mature technologies and hold a  preliminary design review by 2009. Ideally, these processes should have  been completed by the program’s start in 2003.  Moreover, the Army has  just recently formed an understanding of what the FCS network needs to  be and what may be technically feasible. The Army is still struggling to  synchronize the set of needed complementary programs with FCS’s  content and schedules because many of these programs have technical or  funding issues of their own. As it has gained knowledge in these areas, the  Army has had to restructure the program, reducing scope, increasing cost,  and delaying schedule.  In 2009, the Army will have spent 6 years and $18  billion on these initial definition and development efforts. That leaves  about 4 years and $9 billion in development funding to complete what are  usually the more costly aspects of a development program—system  integration and demonstration activities as well as preparation for  production. The Army’s user community believes, based on modeling and  simulation analyses, that FCS will provide needed capabilities. However, it  will be several years before demonstrations validate those results. In fact,  system demonstrations to date have been limited and broad system-of- systems demonstrations will not be conducted until late in the program.
subsections: section_title: FCS Requirements Not Yet Fully Defined, and System Designs Are Not Yet Complete
paragraphs: Ideally, the Army should have shown a match between customer needs  and available resources by having established firm requirements and  preliminary designs that meet those requirements shortly after program  start in 2003. Instead, the Army expects to continue the process of setting  and defining requirements and establishing system designs at least until  the program reaches its system-of-systems level preliminary design review  in 2009. This is particularly problematic because 2009 actually marks a  date that is about one year past the mid-point of the FCS development  phase, when a program following best practices and DOD policy would  normally conduct a critical design review to show it has a stable,  producible design that is capable of meeting performance requirements.
The Army faces a daunting task in completing requirements definition by  2009. As figure 2 illustrates, the FCS program encompasses thousands of  requirements at the operational, system-of-systems, and individual system  levels.
The Army anticipates that it will gain a better understanding of FCS  system and subsystem requirements--and resolve many of the remaining  “to be determined” and open issues--during a series of system-level  preliminary design reviews to be completed by February 2009. Army  officials acknowledge that system-level requirements are almost certain to  be modified in the process as subsystem hardware and software are more  fully defined.
The Army is working through the detailed requirements changes needed to  implement the program adjustments announced in early 2007 because the  restructure of FCS from 18 to 14 systems resulted in requirements  modifications, deferral, and redistribution. Army officials told us they are  currently assessing the requirements balance among the 14 systems and do  not yet have all the modifications to system requirements in place.
However, some consequences are already apparent. For example, a  requirement for the deferred Class II unmanned aerial vehicle to carry a  laser designator is to be assigned to the Class I aerial vehicle. According to  Army officials, the Class I aerial vehicle will consequently need to use a  more powerful engine. In addition, because of the deferral of the Class III  aerial vehicle, its mission requirements--including performing the mine  detection mission--will need to be assigned to other platforms.
All the individual FCS systems are being designed to meet the system-level  requirements and restrictive space, weight, and power constraints. The  Army is still coming to terms with these and other design issues. It has not  finished making trade-offs between requirements and design and have not  yet finalized decisions about how to implement requirements within  several areas of concern, including weight, power, space, reliability, and  unit costs. For example, most of the manned ground vehicles are at risk of  not meeting their weight, maintainability, and other requirements. To that  end, the program is still working on designing a hull for manned ground  vehicles that not only meets weight constraints but also requirements for  protecting vehicle crews against mine blasts. Similarly, the program is  trying to confirm a design that will balance competing requirements for  the Class I unmanned aerial vehicle to perform as needed yet be small and  light enough to be carried in a soldier’s backpack. It is not clear that the  Army will be able to complete all system designs by 2009.
The Army is also working to reduce recognized technical risks in the  system designs in order to meet system-of-systems as well as system-level  FCS requirements. For example, the Army is considering the possibility of  modifying requirements for the Class IV unmanned aerial vehicle because  the vehicle may not fully meet FCS electromagnetic requirements.  Likewise, the Army has focused on modifying transport requirements for  manned ground vehicles because they are too heavy to be moved via the  Air Force’s C-130 airlift aircraft as originally planned.
section_title: Incomplete Requirements and Designs for FCS Information Network Hamper Software Development
paragraphs: Despite significant efforts to date, the Army and LSI have not completed  defining the detailed network requirements, maturing the preliminary  design of the network, and developing and integrating network hardware  and software. Nearly 5 years after the start of system development, the  Army and LSI only recently reached an understanding of what the network  needs to be, what may be technically feasible, how to begin building the  network, and how to eventually demonstrate it. An engineering approach  has been identified but network design and maturity is still a work in  progress. For example, the Army and LSI are still determining what  network management means in terms of    what is needed to support each specific mission (radios, routers,  satellites, computers, information assurance devices, policies);    how to allocate network resources to the mission spectrum (storage,  throughput, bandwidth); and    how to fuse, process, and present extensive FCS sensor data to  appropriate users.
The Army and LSI are also working to establish how to maintain the  network, such as    how to monitor status and performance of the network (hardware  faults, network quality of service, overall performance);    how to implement spectrum management to ensure connectivity and    how to reconfigure the network in real time based on network  conditions and mission critical traffic.
As they move ahead, the Army and LSI are faced with significant  management and technological challenges that place development of  FCS’s network and software at risk. The magnitude, size, and complexity  of the network and software development are unprecedented in DOD  history. The Army and LSI have identified and need to address numerous  areas of high risk such as enterprise network performance and scalability,  immature network architecture, quality of service on a mobile ad-hoc  network, end-to-end interoperability with strategic networks of the global  information grid, and synchronization of FCS with WIN-T and JTRS  programs, which still do not have mature technologies and are at risk of  having delayed or incomplete delivery of capabilities to FCS. Finally, a  recent study by IDA found that the FCS program would likely experience  additional cost growth because of unplanned software effort, unplanned  rework during operational testing, and additional work to address system- of-systems integration, validation, and performance issues identified  during testing after the critical design review. Each of these areas would  affect network and software development, but the Army believes that IDA  did not consider the impact of the Army’s mitigation efforts.
Although the requirements process for the FCS information network is not  yet complete, the LSI and many of its subcontractors are developing and  testing FCS software. In total, five major software builds are planned.  Software Build 0 is complete and Build 1 is being tested. The most  significant issue identified to date is the growth in the estimates of the  total amount of software to be developed for FCS. Early in the program,  the Army and LSI projected that about 32 million lines of code would be  needed. Later, that estimate was increased to about 63 million lines of  code. As the Army continues to define FCS hardware and software  subsystem requirements, a new estimate puts the total volume of software  at about 95 million lines of code. The Army and LSI attribute this latest  increase to factoring the operating system software, something that had  not been included previously, into their estimate. In terms of actual  experience, the lines of code in Build 0 were about 6 percent greater than  projected and Build 1 were about 17 percent greater than projected.
Although the Army and LSI have implemented disciplined software  practices for developing the network and software, the aggressive pace of  the program and Army decisions on what it can afford to do during  development have caused requirements issues at the software developer  level. While the Army and LSI have implemented practices that have  proved successful at leading software companies, such as the use of  repeatable and managed development processes and use of a structured  management review process to ensure quality development, we found that  the immature definition of system-level requirements was causing  problems. For example, the software developers for the 5 of the 52 major  software packages we reviewed report that high-level requirements  provided to them for decomposition and refinement were poorly defined,  omitted, or delivered late to the software development process. Also, we  found that poor or late requirements development have had a cascading  effect as late delivery or poorly defined requirements on one software  development effort, in turn, caused other software development efforts to  be delayed. For example, four of the five software developers report that  problems with late requirements have caused them to do rework or to  defer requirements out to future builds because of insufficient time. These  software developers report that schedule compression caused much of  this strain which could have been averted if they had been allowed  sufficient time to adequately understand and analyze the requirements.
section_title: Army’s User Representative Believes FCS Will Still Provide Needed Capabilities
paragraphs: Although the Army has not yet demonstrated the technical feasibility of  FCS’s expected capabilities, the Army’s user representative expects that  FCS will provide capabilities that will be as good as or better than current  forces. The user representative’s position is based on the results of a  series of modeling and simulation activities. However, it will be several  years before field demonstrations validate those results. The user  representative has a key role in assessing whether FCS can deliver  capabilities that meet operational requirements. According to an Army  Training and Doctrine Command official, the user representative’s current  position is that FCS, in either an 18- or 14-system configuration, is  expected to provide needed capabilities and will be as good as or better  than current forces.
The official stated that the user representative’s position is based on the  results of modeling and simulation analyses conducted to date. The Army  relies heavily on these modeling and simulation analyses in the early  phases of FCS in cases where actual or live test assets are not available.  To that end, these analyses began in 2003 and will continue throughout the  development program. Together, the analyses collectively postulate that  an FCS-equipped force will outperform current forces on many levels,  including the ability to affect a larger area of operations, accomplish  assigned missions faster, survive as well or better, kill earlier at longer  ranges, and better leverage and enable more effective joint operations. In  referencing the analyses and conclusions to date, the Army official noted  that the Army’s decision to decrease the number of FCS systems from 18  to 14 did not affect the FCS brigade combat team’s likely capability to  prevail in the simulated conflicts. However, while the Army has performed  modeling and simulation analyses with both 18 and 14 systems, it did not  make a direct comparison of the projected capabilities of FCS with 18  systems and FCS with 14 systems because changes in data and other  modeling aspects precluded such a comparison.
The official added two caveats to the user community’s current position.  He pointed out that true FCS capability at all levels will not be known until  demonstration and testing of actual physical assets is conducted.  Additionally, he noted that the user community will not accept FCS if it  does not meet minimum operational requirements. However, he did  indicate that the user community might accept some parts of FCS if it did  not meet minimum requirements but yielded systems that were badly  needed and/or performed better than other weapon systems available at  that time.
The user community’s optimism about FCS capabilities may be premature.  The Army already has stated that the program adjustment from 18 to 14  systems saved money but put at risk FCS’s ability to reach its full tactical  and operational potential. Furthermore, it has indicated that the  adjustment reduced the individual capability of each of the 15 projected  FCS brigade combat teams. At this point, it is unclear exactly what FCS  capability can be realistically expected because modeling and simulation  results will not be fully validated by actual demonstrations and testing  until well in the future. For example, most of the manned ground vehicle  prototypes are not expected to be available until 2011 for developmental  and qualification testing. As noted by IDA in its 2007 report, what is known  is that the Army has little experience in developing system-of-systems and  in designing for a whole system to be more capable than the sum of its  parts. Moreover, according to IDA, experience teaches that the simulated  behavior of individual systems and system of systems almost certainly fails  to capture important aspects of live behavior.
section_title: Key Assessments Planned to Inform 2009 Milestone Review for FCS
paragraphs: In commenting on our March 2007 FCS report, DOD indicated that the  Defense Acquisition Board, in alignment with the FCS system-of-systems’  preliminary design, would conduct a number of critical assessments to  support the department’s FCS acquisition and budget decisions. It  identified one of these as a systems engineering assessment that would  evaluate the executability of the FCS program and will focus on many key  areas including requirements development and management,  understanding the system-of-systems dependencies and interfaces, design  and requirements trade-off processes, and risk assessment and mitigation  plans. DOD also stated that a second assessment, to be conducted by the  Joint Staff, will evaluate the FCS’s capabilities relative to its role in joint  force applications.
section_title: Critical Technologies and Complementary Programs Put FCS at Significant Risk
paragraphs: Almost 5 years and $12 billion into development, FCS’s critical  technologies remain at low maturity levels. According to the Army’s latest  technology assessment, only two of FCS’s 44 critical technologies have  reached a level of maturity that based on best practice standards should  have been demonstrated at program start. Even applying the Army’s less  rigorous standards, only 73 percent can be considered mature enough to  begin system development today. This is not to suggest that the technology  maturation should have proceeded more smoothly or more quickly.   Rather, the state of FCS technologies accurately reflects the unpredictable  nature of the discovery process that attends technology development,  which is why it is best done before development of a system is formally  begun.  The technological immaturity, coupled with incomplete  requirements, is a mismatch that has prevented the Army from reaching  the first critical knowledge point for this program–a precursor for cost  growth. Many of these immature technologies may have an adverse  cumulative impact on key FCS capabilities such as survivability. In  addition, the Army is struggling to synchronize the schedules and  capabilities of numerous essential complementary programs with the FCS  program.
section_title: FCS Critical Technologies Not Yet Sufficiently Mature
paragraphs: Maturing technologies to Technology Readiness Level (TRL) 7 (fully  functional prototype demonstrated in an operational environment) prior to  starting product development is a best practice and a DOD policy  preference. (See app. III for a complete listing and description of TRLs.)  For the FCS, this degree of maturity would have meant having had all  technologies at TRL 7 by May 2003; today, it only has two that have  reached that level. Although DOD policy prefers the best practice  standard, it does accept a lower standard—TRL 6 (system model or  prototype demonstrated in a relevant environment). However, only 32 of  FCS’s 44 critical technologies have attained that lower standard of  maturity almost 5 years after starting product development. Army officials  do not expect to mature all FCS’s critical technologies to this lower  standard until at least the preliminary design review in 2009, at least 6  years late. (App. IV contains a list of all FCS critical technologies with  their 2006 and 2007 TRL ratings and Army projections for attaining TRL 6.)
Army engineers do not track a technology’s progress once it reaches TRL  6. They maintain that anything beyond TRL 6 is a system integration  matter and not necessarily technology development. We do not agree with  this position as integration often involves adapting the technologies to the  space, weight, and power demands of their intended environment. To a  large extent, this is what it means to achieve TRL 7. This is work that  needs to be accomplished before the critical design review and is likely to  pose additional trade-offs that the Army will have to make to reconcile its  requirements with what is possible from a technology and engineering  standpoint. Table 1 shows the number of FCS critical technologies that  have matured to different levels during the program’s history and presents  the Army’s projections through the production decision.
Throughout the 5 years of FCS development, multiple Army assessments  illustrate that the maturation of critical technologies has not been  predictable. Although the Army has matured a few critical technologies  since last year, it is behind the ambitious pace it had set just 2 years ago  (see fig. 3).
When the development effort began in 2003, the Army expected to have  100 percent of FCS’s critical technologies matured to a TRL 6 by 2006.  Since that time, the Army has updated its projections on numerous  occasions. Each of those revised estimates assumed that almost all of  FCS’s critical technologies would be mature to TRL 6 by 2009, in time for  the program’s preliminary design review. (Currently, the threat warning  sensor for the active protection system is not expected to be mature to  TRL 6 until sometime in 2010.) The Army’s September 2006 assessment  projected that 80 percent of FCS critical technologies would mature to  TRL 6 by 2007, while the most recent assessment revealed that only 73  percent of those technologies have actually satisfied the conditions of   TRL 6.
While the September 2006 critical technology assessment suggested  progress, the most recent assessment revealed that the Army misjudged  the maturity of a few critical technologies and that the projected dates for  other technologies achieving TRL 6 have slipped. According to the Army’s  latest technology assessment, two technologies have reached full maturity  (TRL 7)—Health Monitoring and Casualty Care Intervention and Excalibur  Precision Munitions. According to Army analyses, the maturity assessment  for Health Monitoring and Casualty Care Intervention is based on existing  technology being fielded to Stryker brigades. Nevertheless, FCS vehicles  have not been produced yet, and integration of this technology onto those  vehicles will ultimately determine their true maturity for FCS. The first  increment of Excalibur is being used by existing howitzers, but recent  Army reports identified a risk that the round may not be entirely  compatible with the proposed NLOS-C design. Even for these mature  systems, the Army must be aware of the potential integration issues, which  may not reveal themselves until the Army more fully develops the FCS  platform designs. Despite these examples, other technologies are now  rated less mature, projected maturity dates have slipped, and others have  shown little advancement over the years.
Since the start of the program, the Army has reduced the ratings of seven  FCS critical technologies. Five of these critical technologies are still rated  as less mature than they were in previous assessments, and three of those  adjustments happened within the past year. Last year, the active  protection system was rated as a TRL 6, but the Army had based this  assessment on a concept that was not ultimately selected for further  development in FCS. Instead, the Army selected an active protection  concept that was less mature, but which the Army believed was a better  design for satisfying all FCS active protection requirements. Consequently,  the Army’s most recent assessment rated the active protection system as a  TRL 5. Two WIN-T technology ratings were also adjusted to better reflect  their maturity. The WIN-T program has a turbulent history, including  technical challenges, and is being restructured in an effort to improve  program execution. As a result, the assessed maturity of WIN-T  technologies was reduced.
While the Army did manage to advance the maturity of six FCS critical  technologies, this progress must be put into context. Because some critical  technologies that were approaching full maturity were removed and the  TRLs of other technologies were reduced, it effectively counteracted the  progress achieved over the past year. This condition resulted in FCS  technologies advancing at a slower pace than anticipated. In addition,  some technologies have matured only one level over nearly 5 years of  development. Distributed Fusion Management is the technology that  correlates the large amounts of sensor data from numerous sensor sources  and ultimately contributes to the maintenance of the common operational  picture created with data from the distributed network nodes. Fusing  sensor data is important for creating situational awareness and enabling  FCS forces to see first and understand first. This technology had been  assessed as TRL 4 when the FCS program began development 5 years ago  and advanced to TRL 5 in the Army’s most recent assessment.
Based on the Army’s current assessment, eight FCS critical technologies  were assessed as being no more mature, and in some cases even less  mature, than they were when the program began. For example, Rapid  Battlespace Deconfliction, which is designed to help manage airspace and  airborne assets and potentially reduce the risk of collisions, was rated TRL  6 at the time of the first independent assessment and has since been  reduced to a TRL 5. In almost 5 years of FCS development, the Army has  not yet advanced the maturity for quality of service algorithms. These  algorithms are vitally important for ensuring successful operation of the  FCS network, particularly in regard to the Army’s desire for FCS forces to  see first, understand first, act first, and finish decisively. Failure to provide  a high quality of service network will significantly degrade force  effectiveness, and could have devastating consequences in a force that  trades armor for information. Further, aided target recognition, which aids  FCS in seeing and acting first and contributes to survivability, has been  rated a TRL 5 since the FCS program began.
The uneven nature of the technology assessments, coupled with the lack  of progress for some technologies, does not inspire confidence that the  Army can successfully mature all FCS critical technologies to TRL 6 in  time for the preliminary design review in 2009. While the most recent  assessments were conducted by the Army without independent review, the  Army expects to have an independently reviewed assessment available for  the 2009 preliminary design review. This assessment should provide an  objective technical opinion regarding the status of FCS critical  technologies, enabling more knowledgeable decisions at the 2009  milestone review.
section_title: Immature Technologies Have Cumulative Effects: Survivability as an Example
paragraphs: While the performance of individual technologies is important, the  potential collective or cumulative effect they can have on the performance  of FCS is also important.  The multiple technologies that are critical to  FCS survivability are illustrative. The FCS concept for survivability breaks  from tradition because it involves more than just heavy armor to protect  against impacts from enemy munitions. Instead, FCS survivability involves  a layered approach that consists of detecting the enemy first to avoid  being fired upon; if fired upon, using an active protection system to  neutralize the incoming munition before it hits the FCS vehicle; and finally,  having sufficient armor to deflect those munitions that make it through the  preceding layers. Each of these layers depends on currently immature  technologies to provide the aggregate survivability needed for FCS  vehicles. Many of the technologies intended for survivability have  experienced problems in development or have otherwise made little  progress in maturity over the 5 years of the FCS program. To the extent  these technologies do not mature or under-perform, the effect on overall  survivability must be assessed. This also holds true for other key  performance parameters, such as lethality, sustainability, and networked  battle command.
The first several layers of defense best illustrate the fundamental FCS  concept of replacing mass with superior information in order to see and  hit the enemy first rather than relying on heavy armor to withstand a hit.  These layers rely on critical technologies that are largely unproven and  that have not yet demonstrated that they can provide adequate information  superiority as a substitute for heavy armor to protect Army soldiers. One  such critical technology is the JTRS. According to the Army’s most recent  critical technology assessment, JTRS radios have achieved a TRL 6.  However, according to the JTRS program office, there are three JTRS  subtechnologies that have not yet matured to the point where the entire  radio can be rated a TRL 6. Another critical technology that contributes to  FCS’s first layer of survivability is wideband networking waveforms,  which work in conjunction with the JTRS radios. A host of technology,  cost, and schedule problems have slowed waveform and radio  development, and in 2006, DOD approved a JTRS program restructure to  address these problems. However, the restructure is incomplete, and  waveform development is behind schedule.
The active protection system is part of the comprehensive FCS hit  avoidance system architecture and will protect the vehicles from incoming  rounds, like rocket-propelled grenades and antitank missiles. The Army  has rated this technology as TRL 5. According to the most recent critical  technology assessment, the Army expects to mature most of the active  protection system suite to TRL 6 by fiscal year 2008. The Army does not  expect the active protection system sensor to mature to TRL 6 until  sometime after the 2009 preliminary design review. Based on current test  schedules, the Army could demonstrate TRL 6 for the short-range solution  by that time. However, a number of test events for the short-range  solution, some of which inform future events, have slipped. In addition,  demonstration of the long-range solution to TRL 6 is not scheduled to  happen until fiscal year 2010. The Army must also address the potential  repercussions from blast fragmentation and the corresponding risk of  collateral damage and fratricide.
The Army has been developing lightweight hull and vehicle armor as a  substitute for traditional, heavy armor. The Army is developing lightweight  armor for FCS vehicles in three iterations. The Army believes the first  version will satisfy FCS threshold protection and weight requirements and  is planned to be used in the manned ground vehicle prototypes. The Army  has begun development of a second armor iteration with the goal of  formulating materials that will meet FCS objective survivability  requirements, but Army engineers do not expect those designs to be  lighter than the first iteration’s designs. The third armor iteration will  focus on weight reduction initiatives with the goal of satisfying objective  requirements for both protection and weight. The Army hopes that the  third iteration will be ready to use in the initial production of the manned  ground vehicles.
During the first iteration, Army engineers formulated a number of different  armor recipes in an attempt to satisfy threshold vehicle protection  requirements. They have tested a number of these recipes using smaller  sample sizes called coupons, but only more robust testing of larger  representative armor samples will determine whether the proposed  solutions will provide the necessary protection. The Army plans to  conduct such testing later this year on larger-scale samples of the different  armor recipes. The Army believes this testing will prove the armor  technology to TRL 6. However, should this approach fail, the Army plans  to use heavier hull and vehicle armor that will require trade-offs for space  and weight.
The overall survivability of FCS-equipped units will depend not only on the  contribution of technologies to each layer of survivability, but also on the  cumulative contribution from layer to layer.  For example, if the  information network, active protection, and armor each under-perform by  10 percent, the Army will first have to know this and second be able to  assess the cumulative impact on overall survivability. As system-level  requirements are defined and allocated, and technologies demonstrate  their actual capabilities, additional design trades may be necessary and  concessions made that could impact key performance parameters like  lethality, survivability, sustainability, and networked battle command.
section_title: Synchronizing FCS with Complementary Programs Is a Continuing Challenge
paragraphs: In addition to the 14 systems and the network that compose the FCS  program, its full capabilities depend on at least 50 complementary  programs managed outside of FCS, some of which are also critical  technologies. The Army has been unable to fully synchronize the schedule  and content of the FCS program with that of complementary programs.  The Army has identified problems that raise concerns about the likelihood  that many complementary systems will deliver the required capabilities  when needed. In some cases, complementary programs have faced funding  issues due to evolving FCS requirements, and there are examples where  lack of coordination between FCS and complementary program officials  have stalled efforts aimed at synchronizing programs and resolving cost,  schedule, and technical issues.
When the FCS program began, the Army concluded that it would need to  interoperate or integrate with as many as 170 other programs to help FCS  meet its operational requirements. The Army has stated previously that as  many as 52 of these programs are essential for meeting FCS key  performance parameters. As a result, the Army closely monitors these  programs to determine if they are synchronized with the cost, schedule,  and performance expectations of the FCS program. While the Army has  produced a list of complementary programs that need management  attention, that list has fluctuated, and although many complementary  programs have been mainstays on the list, the Army has had difficulties  synchronizing the schedules and capabilities of those systems with FCS.
A number of challenges have contributed to the Army’s inability to  synchronize complementary programs with FCS. A few of these challenges  are presented below.
Both the JTRS family of programs and the WIN-T program are facing  technology maturation problems of their own, and they are at risk of  delayed or reduced delivery of capabilities to the FCS program.
Some complementary programs are not adequately funded to conduct  the additional development activities needed to satisfy FCS  requirements. For example, the Army wants to integrate an upgraded  variant of the Javelin missile onto the Armed Robotic Vehicle-Light to  defeat tanks at close range, but the Javelin program has not secured  funding for this effort. In another case, the Army planned to use the  MK-44 precision air burst munition to satisfy a requirement that  infantry vehicles have the ability to defeat light armor vehicles and  groups of soldiers at short ranges. Based on Army analyses, the MK-44  will not satisfy the antipersonnel portion of the requirement, and no  funding is available to improve the round’s performance.
As the Army continues examining complementary programs, it is  discovering unanticipated technical and integration issues that were  not evident earlier. For example, the Army plans to use Excalibur  rounds with the NLOS-C, but engineers have discovered some  compatibility issues that are being addressed. In a similar assessment  of the Airborne Surveillance, Target Acquisition, and Mine Detection  System, the Army discovered a number of issues that included  performance requirement gaps, software integration gaps, and a risk  that onboard processing may not be sufficient to execute the required  missions.
In some cases, ineffective coordination has created situations where  either FCS requirements were not adequately defined for key  complementary programs or significant technical issues were not  promptly addressed. FCS engineers discovered problems with JTRS  radios related to storage temperatures and shock and vibration on the  FCS ground vehicles. Efforts to resolve this problem have stalled  because not all the affected parties have been included in the joint  engineering team dialogue. In another example, JTRS requirements are  not aligned with current force vehicles. The FCS program has not  received a unified set of requirements from the user representative for  spin out 1 current-force vehicles.
Complementary programs have their own acquisition and development  challenges, much like the FCS program, and they have their own approved  requirements documents and acquisition program baselines that cannot  easily be changed—hence the difficulties in synchronizing the schedule  and content of the FCS with that of the complementary programs.
FCS officials have been revising the list of essential complementary  programs, in part because of the risks revealed during the synchronization  process, but also in response to the Army’s competing budget priorities.  Program officials said they planned to complete the revised list by the end  of calendar year 2007, but that has not occurred yet. Instead, Army leaders  have acknowledged the problems associated with the synchronization of  FCS with its complementary programs and will have to refocus their  efforts and work to improve the situation. They did not promise an  immediate resolution and acknowledge that FCS program officials may  have to temper their expectations for complementary programs because  the Army may be unable to afford all the systems that were once  considered “essential.” Part of the solution may also involve building FCS  capabilities over time.
Finally, the Army and LSI have much work to do to define the interfaces  not only between FCS systems and the complementary programs but also  with the FCS system-of-systems. Some 500 interface documents—which  describe the mechanical, electrical, and logical interface between two  subsystems or systems for those systems to work together—will  ultimately be needed. The Army and LSI have completed 61 as of late 2007  and expect to complete about 261 by the time of the preliminary design  review in 2009.
section_title: Schedule-Driven Acquisition Strategy Will Demonstrate FCS Capabilities after Key Decision Points
paragraphs: When FCS reaches its planned preliminary design review in 2009, the  Army will have expended over 60 percent of its development funds and  schedule. Much still needs to be done with the remaining 40 percent of  resources—including technology maturation, system integration and  demonstration, and preparation for production—in short, attaining all  three knowledge points fundamental to an acquisition. Although the  manned ground vehicle designs depend on the performance of the  information network, demonstration of the network will take place after  the vehicles are designed and prototyped. Most tests to demonstrate  whether the FCS system-of-systems performs as required will take place  after the low-rate production decision, precluding opportunities to change  course if warranted by test results and increasing the likelihood of costly  discoveries in late development or during production. The cost of  correcting problems in those stages is high because program expenditures  and schedules are less forgiving than in the early stages of a program.
Figure 4 compares a knowledge-based approach to developing a weapon  system (consistent with DOD policy) with the approach taken for FCS.
Under a knowledge-based approach, the FCS program would have achieved a  match between requirements and resources before entering system  development and demonstration. If the match had occurred in 2003, the FCS  program would have held its preliminary design review some 3 to 5 years ago,  have nearly completed design integration by now, and be approaching a  critical design review in the next year. However, the Army moved ahead with  the program’s start without having this match in place, and consequently, the  technology development and system development and demonstration phases  will overlap by several years. Now, the Army is moving towards another set of  major decision points, the preliminary design review in 2009 and subsequent  milestone review, and it may not have sufficient knowledge for these reviews  either.
As illustrated in figure 5 below, the program has numerous knowledge  gaps that must be closed before the performance of the FCS, as well as its  cost and schedule, can be stated with confidence.
The first gap between technology maturity and firm requirements has  persisted since 2003, as discussed earlier.  The second gap occurs at the  program’s critical design review, scheduled for 2011. Ideally, this review,  which confirms that a design performs as expected, occurs about halfway  through a program’s development schedule. In the case of FCS, the  program will be 80 percent of the way through its development schedule  and cost before the review is held. Furthermore, the schedule leaves little  time to gain knowledge between the critical design review (knowledge  point 2) and the low-rate initial production decision (knowledge point 3)  because the Army has scheduled only 2 years between these events.   Moreover, the critical design review is typically the point at which a  program begins building the fully integrated, production-representative  prototypes whose testing will prove the design’s maturity and form the  basis for a low-rate initial production decision.  Instead, the FCS will rely  on earlier, less mature prototypes.  Therefore, a decision to proceed into  low-rate production will be made without a mature design, and will likely  lead to costly rework or further delays.
The FCS network illustrates knowledge gaps that the Army faces in  developing the FCS system—a substantial amount of development work  remains before the Army and LSI can demonstrate the full expected  capability of the FCS network. To date, only basic network concepts, such  as connecting and exchanging information among limited network nodes,  has been demonstrated (Experiment 1.1). The Army plans to demonstrate  introduction and use of sensor information during this year’s spin out  demonstration; other incremental demonstrations will follow. The first  major demonstration of FCS network is limited user test number 3,  scheduled for fiscal year 2012, which will be at least a year after critical  design review and about a year before the start of core FCS production.  Recently, Congress legislated that a network demonstration be held prior  to obligation of FCS production funding at Milestone C. Even with this  test, by then, other FCS system developments—such as manned ground  vehicles—will have had their critical design reviews; their developmental  prototypes will be in testing; and they will be getting ready to start initial  production in fiscal 2013. Well in excess of 80 percent of planned  development funds will have been expended by this point in time. In short,  the manned ground vehicles may be proceeding well in advance of  network development and demonstration, given that their designs—and in  fact, the entire FCS—depend on the network’s performance. At this point,  it is not certain what level of network demonstration will be needed before  decision makers can confidently approve manned ground vehicles and  other FCS systems for initial production.
FCS testing is particularly risky in terms of its relation to demonstration of  design and production process maturity (knowledge point 3) because  testing of actual capabilities occurs late in the program—shortly before  and after major decision points, including the low-rate production decision  in 2013. Moreover, the period for testing, analyzing, fixing, and retesting is  both too late and too short to support major decisions. The majority of  testing through 2012 is limited in scope and more aimed at confidence- building than demonstrating key capabilities. Early test efforts focus on  experiments and development testing of individual systems. Most  development prototypes will not be available until 2010 and later for  testing and demonstrations. Table 2 below shows the schedule for FCS  key test events.
As shown in table 2, a key system-of-systems level test scheduled before  the low-rate production decision is the Limited User Test 3 in 2012 to  assess brigade combat team capabilities. This test will be the first large- scale FCS test that will include a majority of the developmental prototypes  and a large operational unit and occurs only one year before the low-rate  production decision. The Army is planning to have prototypes of all FCS  systems available for testing prior to low-rate initial production, but these  prototypes are not expected to be production-representative and may not  be fully integrated. Whereas the testing of fully-integrated, production- representative prototypes demonstrates design maturity, this knowledge  point will not be attained until after the low-rate production decision is  made.
The IDA reported in 2007 that the Army’s plan for testing and analyzing in  one phase and then fixing and retesting in the next phase could cause  problems in FCS because the test and analysis half of one phase overlaps  the development half of the next phase. The IDA pointed out that this  means test results from one phase cannot easily be available for use in the  next phase. It noted that the program’s later phases are particularly at risk  of failing to capture rework requirements identified by earlier  experimentation and testing. It predicts that the compressed schedule of  development and test events, together with dense schedule dependencies  among program activities, will mean that any rework required will lead to  a program-wide schedule slip. In anticipation of these and other related  consequences, the IDA predicts that there needs to be at least one cycle of  additional FCS test and evaluation beyond the current planned test  sequence in order to resolve outstanding issues from previous,  overlapping phases and complete development.
As mentioned earlier, a systems engineering assessment will be conducted  on the FCS program for the 2009 milestone review. This assessment will  be an important input for the 2009 review because it will include an  evaluation of risks associated with the FCS acquisition strategy, test plan,  and key complementary programs. It will also evaluate the program’s  system engineering plan for reasonable exit criteria associated with the  critical design review and production readiness.
section_title: Production Commitments Are Planned to Be Made Early Despite Late Demonstration of FCS Capabilities
paragraphs: While the FCS low-rate production decision for the core FCS program is to  be held in fiscal year 2013, in fact, production commitments are planned to  begin in fiscal years 2008 and 2009 with production for the first of a series  of three planned spin out efforts and the early versions of the NLOS-C  vehicle. When considering these activities, along with long-lead and  facilitization investments associated with the production of FCS core  systems, a total of $11.9 billion in production money will have been  appropriated and another $6.9 billion requested by 2013. Including  development funds, $39 billion will have been appropriated and another $8  billion requested for FCS. As noted previously, key demonstrations of FCS  capabilities will not yet have taken place. Also, in April 2007, the Army  announced its intention to contract with the LSI for the low-rate  production of the first 3 brigade combat teams of FCS systems—some 6  years in advance of the low-rate production decision—in addition to the  production of the FCS spin out items and the early production of NLOS-C  vehicles. In so doing, the Army departed from its pre-development phase  philosophy of keeping the LSI focused on development versus production,  ceding its option to contract directly with the producers of the individual  FCS systems. This decision makes an already unusually close relationship  between the Army and the LSI even closer, and heightens the oversight  challenges FCS presents.
subsections: section_title: Spin Out Procurement to Begin before Testing Completed
paragraphs: The Army has started a process to spin out selected FCS technologies and  systems to current Army forces. The first spin out systems will be tested  and evaluated in the coming year and a production decision is planned in  2009. However, the testing up to that point will feature some surrogate  subsystems rather than the fully developed subsystems that would  ultimately be deployed to current Army forces. The Army also has general  plans for a second and third round of spin outs but, according to Army  officials, has not funded them.
In 2004, the Army revised its acquisition strategy to bring selected  technologies and systems to current forces via spin outs while  development of the core FCS program is underway. This strategy provides  for deployment of FCS capabilities to current forces through three spin  out efforts. The first spin out has already started, the second is scheduled  to start in 2010, and the third in 2012. Each spin out is to have its own  production decision point. The Army expects these spin outs to  incrementally field some capabilities to the current forces as well as  provide opportunities to test, experiment, and learn for the FCS core  program. In 2006, the Army established the Army Evaluation Task Force to  use, evaluate, and train with the spin out capabilities. This unit also is  expected to refine FCS doctrine and other matters.
Spin out 1 includes development, testing, procurement, and related  installation and training activities necessary to integrate initial capabilities  with 3 current force vehicles—the Abrams tank, the Bradley vehicle, and  the High-Mobility Multipurpose Wheeled Vehicle—and to field unattended  ground sensors and the Non-Line-of-Sight Launch System. Planned  capabilities, added to these vehicles via modification kits, also include two  radios from the JTRS, an integrated computer system, and early versions  of the system-of-systems common operating environment and battle  command software subsystems. The Army expects spin out 1 capabilities  to address current force gaps in situational awareness, force protection,  and lethality and, if found to have sufficient military utility, plans to start  fielding them to operational units in fiscal year 2010. According to the  Army, it has fully budgeted for developing and procuring these spin out 1  capabilities, after a go-ahead decision from the Defense Acquisition Board.  Once approved by the board, the Army plans to begin procurement of  long-lead production items for spin out 1 in fiscal year 2008. It estimates  spending about $178 million total on spin out 1 development in fiscal years  2008 to 2012 and approximately $2.6 billion on spin out 1 procurement in  fiscal years 2008 to 2013. Procurement of these items will continue for  many years in that the Army plans to field them to all current force units.
The Army is now integrating the spin out capabilities with current force  vehicles. These capabilities consist of hardware and software that are  largely stand-alone systems, several of which were in development before  the FCS program was initiated. For example, both the JTRS and  unattended weapon system predate the start of FCS in 2003. Taken  together, these spin out 1 capabilities serve as a starting point for FCS and  represent only a fraction of the total capability that the Army plans for  FCS to provide.
The Army plans to begin testing spin out 1 capabilities in fiscal year 2008  and finish testing them in fiscal year 2010. It anticipates an initial  production decision on spin out 1 capabilities in January 2009. At this  decision, the Army plans to request authorization to produce a limited  quantity of production items for use as test assets for operational testing  and for production ramp-up. Before the production decision, there are  several major test events that help the Army Evaluation Task Force  evaluate the contribution of spin out 1 capabilities. These tests include a  technical field test in the spring of 2008 to verify technical aspects of the  capabilities, a force development test and evaluation in the early summer  of 2008 to validate requirements and training associated with the  capabilities, and a limited user test in mid-summer 2008 to operationally  test the capabilities. However, none of these tests will use the fully  functional JTRS radios or associated software that is to be provided to the  current forces at spin out 1 fielding. Instead, because the JTRS radios and  their software will not be fully developed at that time, the Army plans to  use engineering development versions of the radios for ground vehicles  and surrogate non-JTRS hardware and software.
The Army believes that this test strategy mitigates risk and maintains that  it will have the fully-capable JTRS radios and software for spin out 1  testing that is to be conducted shortly after the initial production  decision. However, this approach is not without risk. First, as stated by  Army officials, testing with surrogates will not necessarily provide quality  measurements to gauge system performance. Second, as noted by the IDA,  the Army may have to redesign if the fully developed and certified JTRS  radios have different form, fit, function, and interoperability  characteristics than expected. In short, the Army will be accepting sizable  risks in deciding to produce the spin out capabilities before tests finish  evaluating how well they can address current force capability gaps.
In addition to spin out 1, the Army also has plans for spin outs 2 and  3. However, those spin outs are less well-defined than spin out 1, and  Army officials have stated that they are not yet funded. The capabilities  planned for spin out 2, which is scheduled for the fiscal year 2010 to 2012  time frame, include upgraded versions of JTRS radios, an active protection  system, and a mast-mounted sensor for the Stryker armored combat  vehicle. Under spin out 3, which is planned for fiscal years 2012 to 2014,  capabilities may include some FCS-developed small unmanned ground  vehicles and unmanned airborne assets as well as the full FCS battle  command capability.
section_title: NLOS-C Production Planned to Begin Soon at Congress’s Direction
paragraphs: Since fiscal year 2003, the Army has been required by Congress to make  future budgetary and programming plans to fully finance the NLOS-C in  order field a self-propelled, indirect fire capability. Most recently, the  Department of Defense Appropriations Act, 2008, required the Army to  make plans to field the system by fiscal year 2010 and to deliver 8 NLOS-C  prototypes by the end of calendar year 2008. These systems are to be in  addition to those needed for developmental and operational testing.
The Army plans to begin procuring long-lead production items for the  NLOS-C vehicle in 2008 to meet this requirement. The Army determined  that a set of 18, a full battalion’s worth, would be needed to meet the intent  of the language. The Army plans to deliver six units per year in fiscal years  2010 through 2012. However, these early NLOS-C vehicles will not meet  threshold FCS requirements and will not be operationally deployable  without significant modification; rather, they will be used as training  assets for the Army Evaluation Task Force.
The Army has not finalized plans for facilities in which to build the early  NLOS-C vehicles; these decisions are expected to be made no later than  the manned ground vehicles preliminary design review in fiscal year 2009.  Initially, the Army will likely use the current facility in Lima, Ohio, for hull  fabrication and chassis assembly of ground vehicles. The mission module  structural fabrication and assembly for most manned ground vehicles will  likely be done in a York, Pennsylvania, facility. According to a program  official, ground has been broken on an additional facility in Elgin,  Oklahoma, where NLOS-C mission module assembly is expected. The  expected costs of these facilities and the process to approve and fund the  building of the facilities are unclear at this point.
To meet the early fielding dates, the Army will begin early production of  these NLOS-C vehicles with immature technologies and designs. Several  key technologies, such as lightweight armor, the active protection system,  and the JTRS radios will not be fully mature for several additional years.  Much requirements work remains on the manned ground vehicles,  including the NLOS-C, and software development is in its early stages.  Design work on the manned ground vehicles also remains to be done,  including work on the chassis and mission modules. Significant challenges  involving integrating the technologies, software, and design will follow.   To the extent that these aspects of the manned ground vehicles depart  from the early production cannons, costly rework of the cannons may be  necessary.
As seen in figure 6 below, this commitment to NLOS-C production comes 5  years before the Army plans to produce the core FCS program in 2013.  Because of this, the early prototypes will most likely have to be hand-built  because production facilities and processes and the necessary tooling will  not be fully developed at that time.
The Army is planning for a seamless transition between NLOS-C  production and core FCS production. Beginning the production of NLOS-C  vehicles 5 years before the start of FCS core production could create  additional pressure to proceed with FCS core production. Advance  procurement funding for the first full suite of FCS systems will begin in  fiscal year 2011, the budget for which will be presented to Congress in  February 2010—less than a year after the milestone review and before the  stability of the FCS design is assessed at the critical design review. By  2013, the Army will have already invested a total of $11.9 billion in  procurement, with another $6.9 requested. Moreover, to the extent that  beginning NLOS-C production in 2008 starts up the manned ground vehicle  industrial base, it could create a future need to sustain the base.  If FCS  goes according to plan, FCS core production would begin as early NLOS-C  production ends, with FCS core long lead items providing a transition. If  decision makers were to consider delaying FCS core production because it  was not ready, a gap could develop when early NLOS-C production ends.   Sustaining the industrial base could then become an argument against an  otherwise justified delay.
In December 2007, the Under Secretary of Defense for Acquisition,  Technology, and Logistics took steps to keep the decisions on the NLOS-C  early production separate from FCS core production. In approving  procurement of long-lead items for the NLOS-C vehicles in 2008, the Under  Secretary designated the 18 early prototypes as a separate, special interest  program for which he will retain authority for making milestone decisions.  The Under Secretary plans another decision in 2009 to approve the start of  NLOS-C production and has put a cost limit of $505.2 million (fiscal year  2003 dollars) on production. He also specified that specific requirements  be met at that time, such as a capability production document, technology  readiness assessment, test plan, independent estimate of costs, and an  approved acquisition program baseline. This is a positive step in ensuring  that the Army’s efforts to meet congressional direction do not result in  unfavorable consequences.
section_title: Army’s Early Commitment to LSI for FCS Production Heightens Oversight Challenges
paragraphs: The Army’s April 2007 decision to contract with the LSI for FCS  production makes an already close relationship closer, represents a  change from the Army’s rationale prior to beginning development for using  an LSI, and may further complicate oversight. As LSI, Boeing’s role is  multifaceted: it is a partner with the Army in developing requirements and  defining the FCS solution; it is overseeing the development efforts of all of  the individual system subcontractors, a role that will extend well beyond  the 2013 production decision; it is responsible for developing two key  software products—the system-of-systems common operating  environment, the core of the FCS network, and the Warfighter Machine  Interface; it is the prime contractor for the production of spin outs and the  NLOS-C; and now it is to be responsible for the low-rate production of the  first three combat brigades of FCS core systems.
The specific role the LSI will play in production of spin outs, NLOS-C, and  FCS core production are unclear at this point. The contracts for long lead  items for spin out 1 and NLOS-C have not been definitized yet and  statements of work for the production contracts will be negotiated later.  According to the program officials, Boeing will contract with the first tier  subcontractors who will in turn contract with their own subcontractors.  For example, the firms that are designing and developing and will  physically manufacture NLOS-C are General Dynamics and British  Aerospace. Similarly, the work that the LSI does on actual production of  the FCS is likely to be small compared to the other hardware suppliers and  assemblers. Thus, the production role of the LSI is likely to be largely in  oversight of the first tier subcontractors.
From the outset of the program, the LSI was to focus its attention on  development activities, which the Army judged to be beyond what it could  directly handle. The Army believed that traditionally, contractors made  much of their profit in production, not in research and development. Thus,  the Army reasoned, the contractors are not as motivated by research and  development as they are by production. Army leadership believed that by  using an LSI that would not necessarily have to be retained for production,  the Army could get the best effort from the contractor during the  development phase while at the same time making the effort profitable for  the contractor. The Army had always reserved the right to contract  directly with the developers of the individual FCS systems for production.  In 2005, the Army took steps to further bound the integrator role when it  strengthened the organizational conflicts of interest clause in the contract  to preclude the LSI from competing for any further subcontracts.
Nonetheless, the LSI’s involvement in the production phase has been  growing over time. The current LSI development contract for the core FCS  systems extends almost 2 years beyond the 2013 production decision. The  Army does not expect that the initial brigades outfitted by FCS will meet  the upper range of its requirements, and has made the LSI responsible for  planning future FCS enhancements during the production phase. The LSI  is also responsible for defining and maintaining a growth strategy for  integrating new technologies into the FCS brigade combat teams.  Combined with a likely role in sustainment, which has not yet been fully  defined, the LSI will remain indefinitely involved in the FCS program. It is  also likely that the LSI will be used over the long term for data and  configuration management, among other things.
The recent decision to commit to the LSI for the early production of FCS  spin out items and NLOS-C vehicles as well as the initial low rate  production of FCS core systems is perhaps the final departure from the  Army’s effort to keep the contractor’s focus solely on development. It is  particularly significant given that it is 6 years in advance of the low-rate  production decision and effectively cedes a key point of leverage—source  selection—that the Army held. The Army justified its decision on the  grounds that it is the most cost effective means of proceeding. The Army  believes that Boeing’s previous experience with FCS provides the  company the unique management framework and expertise necessary to  proceed. The Army also cites Boeing’s common configuration  management process and the ability to integrate systems-of-systems trade- offs and requirements changes holistically. While these may be legitimate  advantages, they would not necessarily represent new discoveries on the  part of the Army but rather natural advantages that would likely accrue to  an incumbent system integrator. In addition, the Army’s analysis that led  up to the decision did not assess its originally stated option of the Army’s  contracting directly with the individual system developers for production,  but rather focused on the much narrower question of whether it was  feasible for any other contractor to perform the role of the LSI for the  entire FCS program.
We have previously reported that the complex relationship between the  Army and Boeing increases the burden of oversight and poses risks for the  Army’s ability to provide independent oversight over the long term. The  relationship between the Army and Boeing broke new ground in its close,  partner-like arrangement. It has advantages over an arms-length  relationship but makes oversight more challenging. Specifically, we have  noted that:    The government can become increasingly vested in the results of  shared decisions and runs the risk of being less able to provide  oversight.
The Army’s performance, such as in developing critical technologies,  may affect the LSI’s ability to perform, a situation that can pose  accountability problems.
It may be difficult for the Army to separate its own performance from  that of the LSI’s when making decisions on how and whether to award  fees.
The Army’s decision to commit to the LSI as the source for initial FCS  production in 2013 makes the relationship even closer and more  interdependent. Beyond the existing oversight challenges the relationship  already posed, there is now an additional need to guard against the natural  incentive of production from creating more pressure to proceed through  development checkpoints prematurely. As we have previously reported,  this is a burden that will need to be increasingly borne by the Office of the  Secretary of Defense.
section_title: FCS Costs Likely to Be Higher Than Current Army Estimate
paragraphs: The Army’s $160.9 billion cost estimate for the FCS program is largely  unchanged from last year’s estimate despite a program adjustment that  reduced the number of FCS systems from 18 to 14. This represents a  reduction in the Army’s buying power on FCS. Two independent cost  assessments—from DOD’s CAIG and the other from the IDA—are  significantly higher than the Army’s estimate. Both assessments estimate  higher costs for software development, to which the recent increase in  lines of code adds credence. Given the program’s relative immaturity in  terms of technology and requirements definition, there is not a firm  foundation for a confident cost estimate. The Army maintains that when it  becomes necessary, it will further reduce FCS content to keep  development costs within available funding levels. As the Army begins a  steep ramp-up of FCS production, FCS costs will compete with other  Army funding priorities, such as the transition to modular organizations  and recapitalizing the weapons and other assets that return from current  operations. Together, the program’s uncertain cost estimate and  competing Army priorities make additional reductions in FCS scope and  increases in cost likely.
subsections: section_title: Program Adjustment Reduces Scope, yet Costs Remain Largely the Same
paragraphs: Despite a major program adjustment that deleted 4 of the 18 platforms,  extended the overall schedule by about 5 months, and further lengthened  the production run, the Army’s official cost estimate for the FCS program  has only slightly decreased since last year. In inflated dollars, the program  estimates the acquisition cost will be $160.9 billion, down from last year’s  estimate of $163.7 billion. The current estimate reflects the second major  program restructuring in the program’s history. The Army attributes the  adjustment to (1) funding constraints in the fiscal year 2008 to 2013  program objective memorandum that made the previous configuration of  the program unaffordable, (2) consecutive budget cuts by the Congress,  and (3) the changing needs of the Army that incorporate lessons learned  from ongoing conflicts in Iraq and Afghanistan. As of January 2008, the  Army and LSI were in negotiations to implement these changes into the  development contract, and the dollar values of the specific changes were  not yet available. For example, the cost savings from deleting four systems  were offset by reducing annual procurement rates and extending the  production schedule by 4 years.
The program adjustment may mean a reduction in capabilities of the FCS  program. The impacts of the adjustment on the program are not yet fully  known, but Army officials stated that the adjustment puts into doubt its  ability to reach the full potential of the program. In 2003, the program was  approved with a set of 14 core systems. Several systems were added when  the program was restructured in 2004. Now, with this most recent  adjustment, the program has once again been reduced to largely the same  set of 14 systems, but in that time frame, the costs of the program  increased by about 46 percent. This increasing cost, coupled with  reductions in scope of the program, means a loss of buying power for the  Army that may continue to the extent that costs continue to grow, forcing  program officials to reduce more capabilities to stay within available  funds.
section_title: Independent Assessments Indicate Potentially Higher Acquisition Costs
paragraphs: Two recent independent estimates, from IDA and the CAIG, suggest costs  for the FCS program could be much higher than Army estimates. The  Army’s estimate; the independent assessment from IDA, which focuses on  research and development costs; and the CAIG estimate are presented in  table 3.
In its 2007 study, IDA estimated a potential $13 billion in additional  development costs above the Army’s adjusted estimate because of  unplanned software effort, additional costs related to rework during the  operational test and evaluation phase of the program, and additional costs  for system-of-systems integration, validation, and test after the program’s  critical design review. The study further identified significant additional  cost risk, which it described as unquantifiable, because of incomplete  technology maturation, critical dependency on complementary programs,  necessary experimentation during FCS development, and the overall  complexity and required synchronization of the FCS development  activities. The IDA study did not assess likely procurement costs. The  Army has stated that the IDA assessment does not give the Army credit for  the risk mitigation offered by the integration phase approach and spin  outs. The IDA expects an additional catch-up integration phase to be  necessary, which increases work scope and would drive up development  costs. Program officials said that the integration phase approach is a  knowledge-based approach, but acknowledged that the overlapping  schedules of the phases assumes success.
We reported last year that the CAIG’s independent estimate indicated that  FCS costs could ultimately range from $203 billion to $234 billion in  inflated dollars. The CAIG estimate was based on additional procurement  quantities that were never approved or funded. The CAIG’s development  estimate reflected several additional years and additional staffing beyond  the Army’s estimate to achieve initial operational capability. The  difference in estimates is also attributable to the CAIG’s assessment that  the FCS software development would require more time and effort to  complete than the Army had estimated. In fact, the Army recently  indicated an increase in estimated software lines of code from 63 million  to 95 million. The independent estimate also provided for additional risks  regarding the availability of key systems to support the FCS network, such  as the JTRS radios. Neither the Army nor the Defense Acquisition Board  has accepted the independent estimate. Program officials stated last year  that the independent cost estimate of research and development costs was  too high because it was too conservative regarding risks.
In 2003, the CAIG’s initial independent estimate for the program was  $101.1 billion in acquisition costs, versus the Army’s estimate of $77.2  billion in base year 2003 dollars. When the program began, the estimates  were based on an FCS system-of-systems including 14 platforms with an  additional four platforms deferred. The 2004 restructure brought back the  deferred systems for a total of 18. But, the recent program adjustment  once again deferred essentially the same set of platforms. The current  configuration is 14 systems, and the Army’s cost estimate of $112.6 billion  in base year 2003 dollars is comparable to the CAIG’s original estimate for  the same number of FCS systems. The Army’s estimate has thus increased  about 46 percent over the course of 4 years for essentially the same set of  platforms, while some capabilities, such as the transport requirements for  manned ground vehicles, have been modified over that time frame.
The Army has not accepted either of the independent estimates on the  grounds that the CAIG and IDA estimates include additional work scope,  particularly in the later years of the development phase. Program officials  told us that the Army cannot fund additional work that is not currently in  its scope. The CAIG and IDA both use historical growth factors in their  estimates, based on the results of previous programs. It is reasonable to  use such growth factors, based on our own analysis of weapon systems  and the low level of knowledge attained on the FCS program at this time.  Given the different approaches from the Army and the independent  estimators, it is likely the CAIG and the Army will still differ in their  estimates when the CAIG prepares its independent estimate for the 2009  program review. Army officials have said they will not increase program  cost estimates to fall in line with independent estimates, but will instead  consider trading away requirements or changing their concept of  operations to keep FCS development costs within available funding levels.  The Army and LSI are currently conducting analyses to determine which  requirements and capabilities can be discarded with the least impact to the  program. The FCS contract also contains a clause on program generated  adjustments. This allows the LSI to identify a prioritized list of capabilities  in advance that can be partially or completely deleted should the need  arise. The money budgeted for them can then be redirected to new work  scope or to offset a cost overrun. Should the higher cost estimates prove  correct, the Army will have to make significant changes in planned  capabilities to absorb the higher program costs.
section_title: FCS Still Lacks Solid Knowledge Base from Which to Make Confident Cost Estimates
paragraphs: Cost estimates for any program are limited by the level of product  knowledge available. We have previously reported that the Army’s  estimates are limited by the low level of knowledge in the FCS program  today. The current FCS estimates do not have a base of mature  technologies and well-defined system-level requirements. There have been  few demonstrations of FCS capabilities to date, and the set of  complementary programs that the FCS program will rely on to function  properly is still uncertain. Therefore, the Army must make significant  assumptions about how knowledge will develop. As experience has  shown, in many DOD weapon systems, assumptions generally prove  optimistic and result in underestimated costs.
One way to reduce the probability of unbudgeted cost growth is to present  a confidence level for a cost estimate based on risk and uncertainty  analyses. Such analyses entail testing the sensitivity of costs to changes in  input values and key assumptions. While confidence levels have  limitations in that they are dependent on the assumptions made in  calculating them, their use is recognized as a best practice. In an effort to  better ensure realism in DOD budgets, a 2006 panel on acquisition reform  established by the Deputy Secretary of Defense recommended that  program budgets be set at a specific confidence level. To date, the Army  has not calculated a confidence level for its FCS cost estimate. FCS  program officials maintain that while they would like to explore this area,  confidence levels are difficult to do because the program’s budget  frequently changes and requirements are undefined. On the other hand,  this is the kind of variability that a confidence level analysis attempts to  capture.
As it is currently structured, the Army is planning to make substantial  financial investments in the FCS program before key knowledge is gained  on requirements, technologies, system designs, and system performance.  Figure 7 shows the cumulative funding, as reported in the program’s  current cost estimate, and the timing of the program’s key events.  Appendix V has a year-by-year breakdown of FCS research and  development funding and key events.
As indicated in figure 7, by the time of the preliminary design review and  the go/no-go decision in 2009, the Army will have spent over $18 billion— 60 percent—of its development budget. At that point, the program should  have matured most of the critical technologies to TRL 6, and the definition  of system-level requirements should be nearing completion. This is the  level of knowledge the program should have reached in 2003 before being  approved for development start, according to best practices and the  approach preferred by DOD in its acquisition policies. Yet, significantly  expensive work, such as building and testing prototypes, remains ahead.
As reported by the CAIG and IDA, historical experience suggests FCS  costs will grow higher, possibly significantly, beyond the Army’s current  estimate. Our previous work has shown that development costs for the  programs with mature technologies increased by a modest average of 4.8  percent over the first full estimate, whereas the development costs for the  programs with immature technologies increased by a much higher average  of 34.9 percent. Similarly, program acquisition unit costs for the programs  with the most mature technologies increased by less than 1 percent,  whereas the programs that started development with immature  technologies experienced an average program acquisition unit cost  increase of nearly 27 percent over the first full estimate. Our work also  showed that most development cost growth occurred after the critical  design review. Specifically, of the 28.3 percent cost growth that weapon  systems average in development, 19.7 percent occurs after the critical  design review. An example of a program that did not allow enough time in  development and that is now dealing with the results is the Marine Corps’  Expeditionary Fighting Vehicle. We reported in May 2006 that this program  has seen a 45 percent increase in acquisition cost alongside reductions in  key performance parameters and schedule delays—a major reduction in  buying power. These effects are attributable to the fact that the program  did not allow enough time in system development and demonstration to  fully design and demonstrate the capabilities of the program before the  decision to begin building prototypes.
section_title: Army Efforts to Control Cost Focus on Scope Reductions
paragraphs: The Army is attempting to manage the growing cost of the FCS. It has said  that the Army will not exceed the cost ceiling of the development contract,  but as a result, it may have to modify, reduce, or delete lower priority FCS  requirements. Also, the Army is focusing on reducing the projected  average unit production cost of the brigade combat teams, which is  currently projected to exceed the amount at which each brigade combat  team is budgeted. As a result of the program adjustment, the Army has re- established a lower average unit production cost target. Prior to the  adjustment, the Army had established a glide path for cost reduction, but  had been struggling to meet the goals in some areas, particularly with the  manned ground vehicles. The Army has developed affordability initiatives  to help it reach the targets, but their effectiveness may not be realized for  several years.
The Army and the LSI monitor the performance of the FCS program  through an earned value management system, which provides information  on the technical, schedule, and cost performance of the program. As it  proceeds, the Army and LSI can use the information gleaned from the  earned value management system to make informed program decisions  and correct potential problems early. According to recent earned value  data, (which does not currently take into account the scope reduction of  four systems) the FCS program is currently tracking fairly closely with  cost and schedule expectations that were revised in 2004, although some  variances are beginning to show in key areas such as the Non-Line-of-Sight  Launch System. However, it is too early in the program for the data at this  point to be conclusive. In the case of the FCS, when the program  restructured its scope in 2004, the earned value data up to that point was  rebaselined. And, because of the recent program adjustment, the future  work on the program is being replanned. As a result, the earned value data  at this point provides little insight into the potential future performance of  the program and the extent of the challenges the Army still faces with FCS.
section_title: Army Begins Steep Ramp Up of FCS Procurement Funding in 2008
paragraphs: The FCS program plans to begin spending procurement money in fiscal  year 2008 for long lead items for the spin outs and for the NLOS-C. FCS  procurement funding then ramps up very quickly, as can be seen in table 4.  By the time of the low-rate initial production decision for the core  program in 2013, the Army expects that a total of $39.1 billion will have  been appropriated and another $8 billion requested for FCS. $11.9 billion  of the appropriated funds and $6.9 billion of the requested funds will be  for production costs. This money will include spin out production, early  NLOS-C production, and long lead and facilitization for FCS core  production. About $500 million (fiscal year 2003 dollars) of this will be  designated for NLOS-C early production through fiscal year 2012.
As indicated in figure 8 below, the increasing budget demands for FCS  production are occurring when FCS development costs are still high and,  per independent estimates, may be higher yet.
The Army will have to balance its needs for the FCS program with  competing demands from within the Army and DOD, including the Army’s  efforts to change its division-based force structure to smaller, more  numerous brigade formations.  These efforts have proven significantly  more costly and time consuming than originally planned. The Army will  also have to fully define the content of spin outs 2 and 3 and secure  funding for their full costs, which could be substantial. Additional  reductions in FCS scope and capabilities may become necessary if the  high budgets needed cannot be sustained. By the time of the FCS  milestone review in 2009, the fiscal year 2010 Army budget will be under  consideration by the Congress, and the fiscal year 2010 to 2015 future  years defense program will be available. This program will include the first  few years of FCS production, at the annual rate of 1 brigade combat team  per year, and the procurement of spin outs 2 and 3. As such, it should  provide insights as to whether the Army can reasonably fund FCS and its  other priorities.
section_title: Conclusions
paragraphs: The 2009 milestone review will be perhaps the definitive decision on FCS’s  future. For several reasons, the decision bears the responsibility of both a  commitment to continued development and to production. The Army’s  strategy for FCS—with technologies still immature, insufficient testing of  system prototypes before low-rate production, and a high likelihood of  cost increases—has never abided by DOD policy and in 2013 is likely to  present decision makers with a partially developed and largely  undemonstrated system for production. If significant problems have to be  corrected during production, the costs could be prohibitive, thus putting  the Army’s modernization plan in jeopardy.  It is therefore essential at the  2009 decision that the FCS business case be demonstrated against clear  criteria—both as to what performance it can deliver and the soundness of  its remaining schedule—versus being assessed on potentialities. With such  large sums already invested, early production having begun in 2008, and  the late development and demonstration of the FCS capability, decision  makers in 2013 will be in a very difficult position under the current  strategy.
The deficiencies we cite in this report in areas such as requirements and  technology are not criticisms of progress in the sense that things should  have gone smoother or faster.  At issue, rather, is the misalignment of the  program’s normal progress with the events used to manage and make  decisions on such acquisitions—key decisions are made well before  requisite knowledge is available.  The decisions in 2009 will provide an  opportunity to realign the progress of knowledge in FCS with events such  as the critical design review and tests of prototypes before the production  decision.  The 2009 decision point may also be the government’s last  realistic opportunity to safeguard its ability to change course on FCS,  should that be warranted. The first decision, as we see it, will have to  involve whether FCS’s capabilities have been demonstrated to be both  technically feasible and militarily worthwhile. If they have not, then DOD  and the Army will need to have viable alternatives to fielding the FCS  capability as currently envisioned. Depending on the results of the first  decision, the second decision is to determine how to structure the  remainder of the FCS program so that it attains high levels of knowledge  before key commitments.
Other aspects of the FCS program warrant attention that should not wait  until the 2009 decision. Primary among these is the Army’s decision to  extend the role of the LSI into FCS production. This is a decision that will  necessarily heighten the role the Office of the Secretary of Defense will  have to play in overseeing the program and departs from the Army’s  philosophy of having the LSI focus on development without the competing  demands and interests that production poses. A second aspect of the  program warranting attention is the Army’s approach to spin outs. It will  be important for the Army to clearly demonstrate the military utility of the  spin outs to current Army forces based on testing high-fidelity, production- representative prototypes, before a commitment is made to low-rate  production. This is not the current plan, as the Army plans to use some  surrogate equipment in the testing that will support the production  decision for spin out 1. Finally, it is important that the production  investments in the spin outs and NLOS-C do not create undue momentum  for production of FCS core systems. As noted above, commitment to  production of the FCS’s core systems must be predicated on attaining high  levels of knowledge, consistent with DOD policy. The Under Secretary of  Defense’s recent decision to break out early NLOS-C production as a  separate acquisition program goes a long way to meet congressional  direction on NLOS-C while mitigating the consequences for the rest of the  FCS program. This is an issue that will need sustained attention.
section_title: Recommendations for Executive Action
paragraphs: To ensure that the 2009 FCS milestone review is positioned to be both  well-informed and transparent, we recommend that the Secretary of  Defense establish objective and quantitative criteria that the FCS program  will have to meet in order to justify its continuation and gain approval for  the remainder of its acquisition strategy. The criteria should be set by at  least July 30, 2008, so as to be prescriptive, and should be consistent with  DOD acquisition policy and best practices. At a minimum, the criteria  should include the completion of the definition of all FCS requirements including  those for the information network;  the demonstration that preliminary designs meet FCS requirements;  the maturation of all critical technologies;  the synchronization of FCS with all essential complementary programs;    a sound and executable acquisition strategy, including the synchronization of the development and demonstration of  the FCS information network with the development and  demonstration of other FCS elements,    a realistic path forward to critical design review,   a thorough and robust test and evaluation plan, and    a realistic path forward to production process maturity before  the start of production;    development and production cost estimates that (1) have a specified  confidence level and (2) are reconciled with independent estimates;  and    assurance that the Army can properly fund, over the long term, the FCS  program of record.
We recommend that the Secretary of Defense, in advance of the 2009  milestone review, identify viable alternatives to FCS as currently  structured that can be considered in the event that FCS does not measure  up to the criteria set for the review. As we have previously reported, an  alternative need not be a rival to the FCS, but rather the next best solution  that can be adopted if FCS is not able to deliver the needed capabilities.  For example, an alternative need not represent a choice between FCS and  the current force, but could include fielding a subset of FCS, such as a  class of vehicles, if they perform as needed and provide a militarily  worthwhile capability.
Finally, we recommend that the Secretary of Defense (1) closely examine  the oversight implications of the Army’s decision to contract with the LSI  for early production of FCS spin outs, NLOS-C, and low-rate production  for the core FCS program; (2) take steps to mitigate the risks of the Army’s  decisions, including the consideration of the full range of alternatives for  contracting for production; and (3) evaluate alternatives to the LSI for  long-term sustainment support of the FCS system of systems.
section_title: Agency Comments and Our Evaluation
paragraphs: DOD concurred with our recommendations and stated that criteria for the  2009 FCS Defense Acquisition Board review, aligned with the FCS’s  preliminary design review, will be reviewed and finalized at the 2008 FCS  Defense Acquisition Board review. For its 2009 review, the Defense  Acquisition Board expects the Army to provide evidence of stable  requirements, verification that the preliminary design can meet those  requirements, evidence of mature technologies, alignment of essential  complementary systems, an executable acquisition strategy, a low-risk  cost estimate, and an affordability assessment. The results of the analyses  and assessments planned to support the 2009 review will inform DOD’s  acquisition and budget decisions for FCS. These are positive steps toward  informing the 2009 Defense Acquisition Board review. For example, the  expectation that FCS will have mature critical technologies is a step  beyond simply conducting an independent assessment of technology  maturity. Likewise, aligning essential complementary systems would  demonstrate measurable progress more than simply updating status and  issues for complementary systems.
DOD states that an analysis of alternatives will inform the 2009 FCS  review.  It is important that such an analysis go beyond whether FCS is the  preferred alternative, and assess alternatives to FCS in the event the  Defense Acquisition Board determines the FCS program of record is not  executable or affordable. Such alternatives would not necessarily  represent a choice between competing solutions, but may, for example,  include a subset of FCS systems augmenting current forces.
Regarding our recommendations related to oversight, DOD stated that it  would evaluate FCS production contracting approaches and risks, as well  as alternatives to the LSI for long-term sustainment support. DOD is silent  on the expansion of the LSI’s role into core FCS production and cites its  reliance on Army analyses and risk assessments. Yet, the Army has already  indicated its intent to go forward with its plans for production, including  contracting with the LSI, pending approval to do so. It is essential that the  Office of the Secretary of Defense perform its own analyses and  assessments, so that it may arrive at its own conclusions. In particular, the  Office must evaluate the advantages and risks of the LSI’s expanded  production role with regard to the potentially greater burden of oversight  it will likely bear as a consequence.
Finally, the department maintains that GAO’s definition of testing  requirements to support the low-rate initial production decision is more in  line with the requirements for Initial Operational Test and Evaluation,  which occurs with low-rate production assets and informs the full-rate  production decision. The testing standards we apply reflect the best  practice of having production-representative prototypes tested prior to a  low-rate production decision. This approach demonstrates the prototypes’  performance and reliability as well as manufacturing processes—in short,  that the product is ready to be manufactured within cost, schedule, and  quality goals.
We received other technical comments from DOD, which have been  addressed in the report, as appropriate.
We are sending copies of this report to the Secretary of Defense; the  Secretary of the Army; and the Director, Office of Management and  Budget. Copies will also be made available at no charge on the GAO Web  site at http://www.gao.gov.
Please contact me on (202) 512-4841 if you or your staff has any questions  concerning this report. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Other contributors to this report were Assistant Director William R.  Graveline, Noah B. Bleicher, Martin G. Campbell, Tana M. Davis, Marcus  C. Ferguson, and Carrie R. Wilson.
section_title: Appendix I: Scope and Methodology
paragraphs: To develop the information on the Future Combat System program that we  used to assess (1) how the definition, development, and demonstration of  FCS capabilities is proceeding, particularly in light of the go/no-go  decision scheduled for 2009; (2) the Army’s plans for making production  commitments for FCS and any risks relative to the completion of  development; and (3) the estimated costs for developing and producing  FCS and risks the Army faces in both meeting the estimate and providing  commensurate funding, we interviewed officials at the Office of the Under  Secretary of Defense (Acquisition, Technology, and Logistics); the  Secretary of Defense’s Cost Analysis Improvement Group; the Institute for  Defense Analyses; the Army’s Training and Doctrine Command; the Future  Force Integration Directorate; the Army Evaluation Task Force; the Army  Test and Evaluation Command; the Director of the Combined Test  Organization; the Program Manager for the Future Combat System  (Brigade Combat Team); the Future Combat System LSI; and LSI One  Team Partners.
We reviewed many Army and DOD documents, including the Future  Combat System’s Operational Requirements Document, the Acquisition  Strategy Report, the Selected Acquisition Report, the Test and Evaluation  Master Plan, critical technology assessments and technology risk  mitigation plans, and modeling and simulation results.
We attended the Board of Directors Reviews, the Engineering Maturity 1  event, and multiple system demonstrations. In our assessment of the FCS,  we used the knowledge based acquisition practices drawn from our large  body of past work as well as DOD’s acquisition policy and the experiences  of other programs.
We certify that officials from DOD and the Army have provided us access  to sufficient information to make informed judgments on the matters in  this report. We discussed the issues presented in this report with officials  from the Army and the Secretary of Defense and made several changes as  a result. We performed our review from March 2007 to March 2008 in  accordance with generally accepted 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.
section_title: Appendix II: Comments from the Department of Defense
section_title: Appendix III: Technology Readiness Levels
paragraphs: Technology Readiness Levels (TRL) are measures pioneered by the  National Aeronautics and Space Administration and adopted by DOD to  determine whether technologies were sufficiently mature to be  incorporated into a weapon system. Our prior work has found TRLs to be  a valuable decision-making tool because they can presage the likely  consequences of incorporating a technology at a given level of maturity  into a product development. The maturity level of a technology can range  from paper studies (level 1), to prototypes that can be tested in a realistic  environment (TRL 7), to an actual system that has proven itself in mission  operations (level 9). According to DOD acquisition policy, a technology  should have been demonstrated in a relevant environment (TRL 6) or,  preferably, in an operational environment (TRL 7) to be considered mature  enough to use for product development. Best practices of leading  commercial firms and successful DOD programs have shown that critical  technologies should be mature to at least a TRL 7 before the start of  product development.
None (paper studies and analysis)
Invention begins. Once basic principles are  observed, practical applications can be  invented. The application is speculative, and  there is no proof or detailed analysis to  support the assumption. Examples are still  limited to paper studies.
Active research and development is  initiated. This includes analytical studies and  laboratory studies to physically validate  analytical predictions of separate elements  of the technology. Examples include  components that are not yet integrated or  representative.
Analytical studies and  demonstration of non-scale  individual components (pieces of  subsystem).
Basic technological components are  integrated to establish that the pieces will  work together. This is relatively “low fidelity”  compared to the eventual system. Examples  include integration of “ad hoc” hardware in a  laboratory.
Low-fidelity breadboard. Integration  of non-scale components to show  pieces will work together. Not fully  functional or form or fit but  representative of technically  feasible approach suitable for flight  articles.
Lab demonstrating  functionality but not  components are integrated with reasonably  realistic supporting elements so that the  technology can be tested in a simulated  environment. Examples include “high  fidelity” laboratory Integration of  components. necessarily form and/or fit (size,  weight, materials, etc.). Should be  approaching appropriate scale.  May include integration of several  components with reasonably  realistic support  elements/subsystems to  demonstrate functionality. form and fit. May  include flight  demonstrating  breadboard in  surrogate aircraft.  Technology ready for  detailed design  studies.
Representative model or prototype system,  which is well beyond the breadboard tested  for TRL 5, is tested in a relevant  environment. Represents a major step up in  a technology’s demonstrated readiness.  Examples include testing a prototype in a  high-fidelity laboratory environment or in  simulated operational environment.
Prototype—Should be very close to  form, fit, and function. Probably  includes the integration of many  new components and realistic  supporting elements/subsystems if  needed to demonstrate full  functionality of the subsystem.
High-fidelity lab  demonstration or  limited/restricted  flight demonstration  for a relevant  environment.  Integration of  technology is well  defined.
Prototype near or at planned operational  system. Represents a major step up from  TRL 6, requiring the demonstration of an  actual system prototype in an operational  environment, such as in an aircraft, vehicle,  or space. Examples include testing the  prototype in a test bed aircraft.
Prototype. Should be form, fit, and  function integrated with other key  supporting elements/subsystems to  demonstrate full functionality of  subsystem.
Flight demonstration  in representative  operational  environment such as  flying test bed or  demonstrator  aircraft. Technology  is well substantiated  with test data.
Technology has been proved to work in its  final form and under expected conditions. In  almost all cases, this TRL represents the  end of true system development. Examples  include developmental test and evaluation of  the system in its intended weapon system to  determine if it meets design specifications.
Actual application of the technology in its  final form and under mission conditions,  such as those encountered in operational  test and evaluation. In almost all cases, this  is the end of the last “bug fixing” aspects of  true system development. Examples include  using the system under operational mission  conditions.
section_title: Appendix IV: FCS Critical Technology Ratings and Projections for Achieving TRL 6
subsections: section_title: Mobile Ad Hoc Networking Protocols
paragraphs: 10  Quality of Service Algorithms  15  Multi-Spectral Sensors and Seekers  Air (Rotary Wing/UAV)—to—Ground  Air (Fixed Wing)—to—Ground (Interim/Robust Solutions)
Ground—to—Ground (Mounted)
Ground—to—Air (Mounted)
section_title: Appendix V: Annual and Cumulative FCS Research and Development Funding and Planned Events and Achievements
subsections: section_title: Annual research, development, testing, and evaluation funding (in millions of dollars)
paragraphs: Cumulative research,  development, testing, and  evaluation funding (in  millions of dollars)
section_title: Related GAO Products
paragraphs: Defense Acquisitions: Analysis of Processes Used to Evaluate Active  Protection Systems. GAO-07-759. Washington, D.C.: June 8, 2007.
Defense Acquisitions: Role of Lead Systems Integrator on Future Combat  Systems Program Poses Oversight Challenges. GAO-07-380. Washington,  D.C.: June 6, 2007.
Defense Acquisitions: Assessments of Selected Weapon Programs.   GAO-07-406SP. Washington, D.C.: March 30, 2007.
Defense Acquisitions: Future Combat System Risks Underscore the  Importance of Oversight. GAO-07-672T. Washington, D.C.: March 27, 2007.
Defense Acquisitions: Key Decisions to Be Made on Future Combat  System. GAO-07-376. Washington, D.C.: March 15, 2007.
Defense Acquisitions: Improved Business Case Key for Future Combat  System’s Success. GAO-06-564T. Washington, D.C.: April 4, 2006.
Defense Acquisitions: Improved Business Case is Needed for Future  Combat System’s Successful Outcome. GAO-06-367. Washington, D.C.:  March 14, 2006.
Defense Acquisitions: Business Case and Business Arrangements Key  for Future Combat System’s Success. GAO-06-478T. Washington, D.C.:  March 1, 2006.
Defense Acquisitions: Future Combat Systems Challenges and Prospects  for Success. GAO-05-428T. Washington, D.C.: March 16, 2005.
Defense Acquisitions: The Army’s Future Combat Systems’ Features,  Risks, and Alternatives. GAO-04-635T. Washington, D.C.: April 1, 2004.
Issues Facing the Army’s Future Combat Systems Program.   GAO-03-1010R. Washington, D.C.: August 13, 2003.
Defense Acquisitions: Army Transformation Faces Weapon Systems  Challenges. GAO-01-311. Washington, D.C.: May 21, 2001.
Best Practices: Better Matching of Needs and Resources Will Lead to  Better Weapon System Outcomes. GAO-01-288. Washington, D.C.:   March 8, 2001.
Best Practices: Better Management of Technology Development Can  Improve Weapon System Outcomes. GAO/NSIAD-99-162. Washington,  D.C.: July 30, 1999.
Best Practices: Commercial Quality Assurance Practices Offer  Improvements for DOD. GAO/NSIAD-96-162. Washington, D.C.:   August 26, 1996.