Space Acquisitions: DOD Faces Challenges in Fully Realizing Benefits of Satellite Acquisition Improvements
Published: 2012-03-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Each year, the DOD spends billions on large space acquisition programs, which have in the past experienced cost and schedule overruns and increased technical risk. At present, though, the worst of these problems may be over, and programs long troubled are finally being launched. Challenges persist, but they are less significant than they were. With todays fiscal constraints, however, DOD must find ways to keep its new major space acquisitions on track, as operating in space is expensive and DOD is still replenishing legacy programs like missile warning, protected communications, and environmental monitoring. Significant barriers exist to ensuring such investments are optimized.
To address the progress DOD has made this year, this testimony will focus on (1) the current status of space system acquisitions; (2) results of GAOs space-related reviews this past year; (3) actions taken to address DOD space acquisition problems; and (4) remaining challenges that stand in the way of DOD fully realizing the benefits of satellite acquisition improvements. This testimony is based on previously issued GAO products as well as analysis of DOD funding estimates.
GAO does not make recommendations in this testimony. However, in previous reports GAO has generally recommended that DOD adopt best practices for developing space systems such as separating technology development from product development. DOD is in the process of implementing such practices.
section_title: What GAO Found
paragraphs: Last year, GAO testified that though acquisition problems still existed in many space programs, the Department of Defense (DOD) was beginning to launch satellites that had long been lagging behind schedule and it had taken positive actions to instill better practices and more focused leadership for space. Progress has continued. Over the past year, DOD launched the first Navy Mobile User Objective System (MUOS) satellite; the first, after a nine-year delay, of six Space Based Infrared System (SBIRS) geosynchronous earth orbit (GEO) satellites; and the first Advanced Extremely High Frequency (AEHF) satelliteall of which will bring important capability to the warfighter. While these launches represent solid progress, there have also been some drawbacks. For instance, the second Global Positioning System (GPS) IIF satellite experienced technical problems that could shorten its operational lifetime. The cost of the first two GPS III satellites is at least18 percent higher than first estimated, up to $1.6 billion today. A 1-year delay is expected by SBIRS program officials on production of the 3rd and 4th GEO satellites along with a $438 million cost overrun. And, a termination of the Defense Weather Satellite System (DWSS) may result in a capability gap. Moreover, even though problems have been overcome, DOD must still contend with the effects of its previous difficulties on its investment portfolio.
Recent GAO reviews highlight other difficulties facing DOD space programs. GAOs review of a new acquisition strategy for the Evolved Expendable Launch Vehicle program, for instance, identified a need for more knowledge about the industrial base as well as cost and pricing in order to optimize a sizable investment in launch vehicles. GAOs review of parts quality problems in major DOD, Missile Defense Agency, and National Aeronautics and Space Administration (NASA) programs illustrated that acquisition reforms need to be buttressed with closer attention to the quality of piece parts as issues have vexed most major programs. GAO, however, credited the agencies with instituting collaborative efforts to address supplier quality.
Though it still faces an array of challenges, DOD continues to work to ensure its space programs are more executable and produce a better return on investment. For example, DOD intends to follow incremental or evolutionary acquisition processes and it has acted to streamline management and oversight of the national security space enterprise. The agency has taken steps toward reforming the defense acquisition system to help its programs to meet planned cost and schedule objectives. Because DOD intends to address the root causes of problems, it will take time to determine if these actions are successful or need further actions on how best to lead, organize, and support space activities.
Moreover, there are significant barriers to ensuring investments are optimized. These include fragmented leadership, the rising cost of launch, uncertainty about the future for technology advancements, and disconnects between the fielding of satellites with user equipment and ground systems needed to take advantage of expensive new capabilities. Addressing all of these challenges are needed to maintain space superiority in an era of fiscal austerity, but their resolution also requires the participation and cooperation of all the military services, the intelligence community, and agencies such as NASA and the National Oceanic and Atmospheric Administration.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of Defense’s  (DOD) space acquisitions. Each year, billions of dollars are spent by DOD  to acquire space-based capabilities that support military and other  government operations—such as intelligence, reconnaissance and  surveillance, and homeland security— and to enable transformation of the  way DOD collects and disseminates information. The worst of DOD’s  space acquisition problems may be behind the department, as programs  long plagued by serious cost and schedule overruns are finally being  launched. Though acquisition challenges persist, they are not as  widespread and significant as they were several years ago, and to its  credit, DOD has taken an array of actions to reduce risks. The challenge  DOD now faces is how best to keep its major space systems acquisitions  on track in light of fiscal constraints. Operating in space is expensive and  DOD is still in the process of replenishing legacy capabilities, such as  missile warning, protected communications, and environmental  monitoring. While upgrading existing satellite constellations amid  declining budgets is a daunting challenge, there are significant barriers to  ensuring investments are optimized, including fragmented leadership, the  rising cost of launch, uncertainty about the future for technology  advancements, and disconnects between the fielding of satellites with  user equipment and ground systems needed to take advantage of  expensive new capabilities. In addition to discussing the progress DOD  has made this year, my testimony will focus on these challenges as they  stand in the way of DOD fully realizing the benefits of satellite acquisition  improvements.
The objectives of this testimony are to address (1) the current status of  space system acquisitions, (2) the results of GAO’s space-related reviews  this past year, (3) actions being taken to address DOD space acquisition  problems, and (4) remaining challenges. In preparing this testimony, we  relied on previous GAO reports on (1) space programs and (2) weapon  system acquisition best practices as well as ongoing work on satellite   We also relied on work performed in support of our  control networks.annual weapons system assessments, and analyzed DOD funding  estimates to assess cost increases and investment trends for selected  major space system acquisition programs. We obtained updates on  improvement actions from the Office of the Secretary of Defense and Air  Force. We also analyzed recent funding estimates for space programs.  More information on our scope and methodology is available in the issued  reports. The work that supports this statement was performed in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The past decade has been troubling for defense space acquisitions.  Despite years of significant investment, most of the DOD large space  acquisition programs collectively experienced billions of dollars in cost  increases, stretched schedules, and increased technical risks. Significant  schedule delays of as much as 9 years have resulted in potential  capability gaps in missile warning, military communications, and weather  monitoring. Unit costs for one of the most troubled programs, the Space  Based Infrared System (SBIRS), for instance, have climbed about 231  percent to over $3 billion per satellite. Moreover, the first satellite was  launched about 9 years later than predicted. Similarly, by the end of fiscal  year 2010, the U.S. government had spent 16 years and over $5 billion to  develop the National Polar-orbiting Operational Environmental Satellite  System (NPOESS), but had not launched a single satellite. In February  2010, citing the program’s cost overruns, schedule delays, and  management problems, the White House announced that the NPOESS  tri-agency structure would be eliminated and the program would be  restructured by splitting procurements and responsibilities. Other  programs, such as the Transformational Satellite Communications  System, were canceled several years earlier because they were found to  be too highly ambitious and not affordable at a time when the DOD was  struggling to address critical acquisition problems elsewhere in the space  portfolio.
section_title: The Current Status of Space System Acquisitions
paragraphs: In 2011, we testified that though problems still existed on many programs,  DOD was beginning to make progress by finally launching satellites that   These included the Missile Defense  had been lagging behind schedule.Agency’s (MDA) Space Tracking and Surveillance System (STSS), the  Air Force’s first Global Positioning System (GPS) IIF satellite and the first  Advanced Extremely High Frequency (AEHF) satellite although AEHF  had not yet reached its final planned orbit at the time we testified because  of an anomaly with the satellite’s propulsion system. At the same time,  however, several programs still in development were at risk of cost and  schedule growth, such as the Joint Space Operations Center Mission  System (JMS).
Progress has continued since we testified last year. For instance:
DOD launched the second GPS IIF satellite in July 2011, and the third  is scheduled to launch in September 2012.
DOD launched the first of the Navy’s Mobile User Objective System  (MUOS) satellites in February 2012, and the second is scheduled for  launch in July 2013.
The first of six SBIRS geosynchronous earth orbit (GEO) satellites   The  successfully launched in May 2011, after a roughly 9 year delay. second SBIRS satellite is planned for delivery in spring 2012 and may  launch late this year or early 2013.
The Evolved Expendable Launch Vehicle (EELV) program continues  to successfully launch DOD and National Aeronautics and Space  Administration (NASA) satellites, and is planning 11 launches in 2012.
The first AEHF satellite reached its intended orbit after having  experienced propulsion trouble after launch. The second AEHF  satellite is scheduled to launch in April 2012.
While these launches represent solid progress, there have been some  drawbacks to the programs that have launched their first satellites. For  instance, the second GPS IIF satellite experienced technical problems  that could possibly shorten the satellite’s operational lifetime. Also, though  a MUOS satellite has been launched, the DOD estimates that over 90  percent of the first satellite’s on-orbit capabilities will likely be initially  underutilized because of delays in development of the compatible Joint  Tactical Radio System (JTRS) terminals.
Moreover, other acquisition programs are experiencing cost and schedule  growth, though not to the extent yet as those experienced in the last  decades. For instance,
The GPS III program is currently experiencing cost growth and the  contractor is behind schedule. In November 2011, the contractor’s  estimated cost at completion for the development and production of  the first two satellites was over $1.4 billion or 18 percent greater than  originally estimated; the program office estimated the cost to be about  $1.6 billion. The GPS III program has cited multiple reasons for the  projected cost increases including reductions in the program’s  production rate; test equipment delays; and inefficiencies in the  development of both the navigation and communication payload and  satellite bus. The contractor is also behind in completing some tasks  on schedule, but the program does not expect these delays to affect  the launch of the first satellite.
Though the first SBIRS satellite has launched, and the second is  close to delivery, program officials are predicting a 1-year delay on  production of the 3rd and 4th GEO satellites due in part to technical  challenges, parts obsolescence and test failures. Along with the  production delay, program officials are predicting a $438 million cost  overrun for the 3rd and 4th GEO satellites.
The Defense Weather Satellite System (DWSS), which was the Air  Force’s follow-on to the restructured NPOESS, was terminated in  fiscal year 2012. The restructuring of NPOESS and the subsequent  cancellation of DWSS have resulted in a potential capability gap for  weather and environmental monitoring.
Table 1 describes the status of the space programs we have been  tracking in more detail.
Even though DOD has finally overcome some technical and production  difficulties and begun to launch high risk satellites such as SBIRS and  AEHF, the department is still contending with the effects of their  significant cost growth on its investment portfolio. Figure 1 compares  original cost estimates to current cost estimates for the broader portfolio  of major space acquisitions for fiscal years 2011 through 2016.
A long-standing problem in DOD space acquisitions is that program and  unit costs tend to go up significantly from initial cost estimates, and the  gap between original and current estimates shows that DOD has fewer  dollars available to invest in new programs or add to existing ones. In  fact, estimated costs for the major space acquisition programs have  increased by about $11.6 billion—321 percent—from initial estimates for  fiscal years 2011 through 2016.investment in the later years is the result of mature programs that have  planned lower out-year funding, cancellation of a major space acquisition   It should also be noted that the declining  program and several development efforts, and the exclusion of several  major space acquisition efforts for which total cost data were unavailable.  These include the Space Fence, Space Based Space Surveillance, and  the Defense Weather Satellite effort.
section_title: GAO Space-Related Reviews over the Past Year
paragraphs: Over the past year, we have reported on of the need for sound and  sufficient information for the new DOD acquisition strategy for the EELV  program; parts quality problems in major DOD, MDA, and NASA  programs; and greater content and coordination in the space Science and  Technology (S&T) strategy. We are also conducting a review of satellite  operations and have briefed Defense authorization and appropriations  committees on our findings. These reviews, discussed further below,  highlight both the successes and challenges that have faced the DOD  space community as it has completed or sought to complete problematic  legacy efforts and deliver modernized capabilities.
subsections: section_title: Evolved Expendable Launch Vehicle Acquisition Strategy
paragraphs: DOD’s EELV program serves a vital mission of placing critical national  security and civilian satellites into their required orbits. It is also on the  brink of major changes. In 2009, the Air Force and the National  Reconnaissance Office (NRO) determined that the current approach for  acquiring EELV launch vehicles was likely not the best business model  and decided that a new acquisition strategy needed to be developed. This  strategy favors committing the government to a longer span of purchases  and to more certainty in the number of vehicles acquired to help stabilize  the industrial base. Such a change is significant as the DOD and the NRO  plan to spend about $15 billion to acquire launch services from fiscal year  2013 to 2017 and commercial companies other than the current provider,  United Launch Alliance, would like to become launch service providers to  the government. We were asked to review and assess whether DOD has  the knowledge it needs to develop the new strategy, which has  subsequently been released, and to identify issues that could benefit  future launch acquisitions.
We found that DOD lacked critical knowledge needed to develop a new  acquisition strategy. For example, program officials, recent launch  studies, and the prime contractor all cited a diminishing launch industrial  base as a risk to the mission success of the program, but DOD analysis  supporting this condition was minimal. Moreover, under the new  acquisition strategy, contracting officials may have difficulty assessing fair  and reasonable prices given limited availability of contractor and  subcontractor cost or pricing data. Since the United Launch Alliance joint  venture formed in 2006, financial and business systems needed to get  insight into costs have been lacking. There was also considerable  uncertainty about costs associated with mission assurance activities,  even though there have been concerns about whether such activities are  excessive. Moreover, we found that if the acquisition strategy commits the  Air Force and the NRO to buy eight common booster cores per year for a  five year period, which was anticipated at the time of our review, DOD  may face an oversupply of vehicles. In addition to these findings, we have  reported prior concerns about oversight for the EELV program, such as  (1) a prior decision to designate the program as in the sustainment phase  rather than in the development phase essentially lifted the need for  oversight reporting on costs and major changes and (2) the DOD had not  updated a life cycle cost estimate for the program despite significant  changes being made to it.
Pub. L. No. 112-81, §§ 838 & 839 (2011). and additional findings or recommendations, as appropriate. The Air  Force has taken actions to expand its knowledge about EELV since our  2011 audit work was completed and we look forward to assessing this  progress.
section_title: Parts Quality for DOD, MDA, and NASA
paragraphs: Quality is paramount to the success of U.S. space and missile defense  programs due to their complexity, the environment they operate in, and  the high degree of accuracy and precision needed for their operations.  Yet in recent years, many programs have experienced difficulties with  quality workmanship and parts. Less visible problems have led to  unnecessary repair, scrap, rework, and stoppage; long delays; and  millions of dollars in cost growth. In some instances, entire missions have  been endangered. As a result, we assessed the extent to which such  problems affect related programs, their causes, and what initiatives have  been undertaken in response.
We found that parts quality problems had affected all 21 programs we  reviewed, in some cases contributing to significant cost overruns and  schedule delays associated with electronic versus mechanical parts or  materials. We also found that if quality problems were discovered late in  the development cycle they had more significant cost and schedule  consequences: in one such case, an additional cost of at least $250  million and a 2-year launch delay. We found several causes of these  problems: poor workmanship, undocumented and untested manufacturing  processes, poor control of those processes and materials and failure to  prevent contamination, poor part design, design complexity, and an  inattention to manufacturing risks. Ineffective supplier management also  resulted in concerns about whether subcontractors and contractors met  program requirements.
Recognition of these difficulties has spurred agencies to adopt new  policies, but they were still in early stages of implementation at the time of  our review. Post-policy programs are not yet mature enough for parts  problems to be apparent. To address current and future problems,  agencies and industry have begun to collect and share information,  develop testing guidance and criteria, manage subcontractors, and  mitigate problems, although their impact has yet to be determined. In any  event, significant barriers hinder such efforts, including broader  acquisition management problems, workforce gaps, diffuse leadership in  the national security space community, the government’s decreasing  influence on the electronics parts market, and an increase in  counterfeited parts. Our reports over the past decade have made  recommendations for addressing these broader barriers, such as  stabilizing requirements before beginning product development,  separating technology development from product development, and  strengthening leadership. The DOD is in the process of adopting these  recommendations. Because space agencies and the Missile Defense  Agency were undertaking additional actions to address parts quality  problems and they had recently established a broad range of coordination  mechanisms, we recommended that the community undertake periodic  assessments of progress being made to address parts quality problems.  The agencies generally agreed with our recommendation.
section_title: Space S&T Strategy
paragraphs: The National Defense Authorization Act for Fiscal Year 2010 required  DOD and the Director of National Intelligence (DNI) to jointly develop a  space S&T strategy and it required us to assess the strategy submitted in  April 2011. We reported that a strong foundation in space S&T should  help DOD and the intelligence community address the most challenging  national security problems, reduce risk in major acquisition programs,  maintain technological superiority over adversaries, maintain a healthy  industrial base and mitigate vulnerabilities in space systems.
We found that the strategy largely met the requirements of the  authorization act, but it was not a rigorous, comprehensive strategic plan.  Instead, it embraced the status quo without laying out a path for assuring  effective and efficient progress. For instance, the strategy identified goals,  but did not prioritize them. The strategy described existing reviews used  to assess progress in space S&T but did not identify new metrics or  performance measures to be used to assess achievement of the  strategy’s newly established goals. Nor did the strategy address  fundamental challenges facing the S&T community, such as human  capital shortages, growing fiscal pressures, and the difficulty in  transitioning space S&T to acquisition programs. We identified some  strategic planning best practices such as identifying required human  capital and required funding; prioritizing initiatives; and establishing ways  to measure progress and processes for revising goals in the future.  Additionally, we found that organizations involved in developing the  strategy were active in creating its long- and short-term goals, but their  participation in other of its aspects was more limited. DOD and DNI  officials did not believe they were required to do more than they did, and  also did not include other agencies active in space S&T that were not  included by law in the strategy. We recommended that DOD enhance its  next version of the strategy by developing a detailed implementation plan  for achieving goals, addressing funding prioritization and other  challenges, and enhancing coordination with other agencies involved in  space technology development. DOD concurred with these  recommendations.
section_title: DOD Satellite Operations
paragraphs: The Air Force and Navy operate separate satellite control networks within  DOD through multiple operations centers, enabling their satellites to  perform missions from launch to on-orbit operations and eventually  through deactivation. Other federal government agencies, such as the  NASA and the National Oceanic and Atmospheric Administration (NOAA),  and commercial companies also operate satellites using various networks  and operations centers. Combined, these networks assist the nation’s  communications, missile warning, navigation, meteorological,  environmental, and scientific satellites or missions.
DOD has efforts underway to modernize various satellite operations  centers using proprietary and interoperable network architectures using  standard protocols. For example, since 2006, the Air Force has operated  a multi-mission operations center that uses a standard interface and  telemetry, tracking, and commanding system which allows expedited  transition of research satellites to operational satellites. In addition, in  2000, the Naval Research Laboratory initiated a web-based service  concept designed to optimize software code reuse and allow faster  delivery of mission capabilities, which could lower mission development  costs and facilitate system maintenance. Considering the long-standing  need to replace the Air Force’s aging and costly satellite control  capabilities, and the importance associated with satellite operations, it is  important that DOD not miss an opportunity to improve satellite  operations and create greater efficiencies by leveraging commercial  practices and other satellite networks and associated infrastructure.
In ongoing work, we assessed DOD’s satellite operations capabilities,  specifically modernization efforts, compare DOD satellite operations  concepts with those in other government entities and commercial  industry; and, identify practices that could improve DOD satellite  operations, consistent with mission requirements. We identified several  challenges associated with DOD’s modernization efforts. For example,  DOD’s ability to plan and implement upgrades may be limited by current  budget uncertainties and plans to reallocate a portion of DOD’s spectrum  may affect its satellite operations. In addition, we found indications that  the potential for unnecessary overlap and fragmentation still exists within  satellite operations and associated infrastructure, including potential  duplication of facilities and hardware. For instance, there are multiple,  completely separate government satellite control networks that exist that  depend on DOD’s Air Force satellite control network, including military  and civil networks, but none are interoperable. Finally, we have thus far  found that although research and development in government satellite  operations has led to the use of practices that, according to agency  officials, have improved efficiency, there are other commercial practices  that could provide further improvements to DOD’s satellite network. For  example, increased automation of routine satellite telemetry, tracking, and  commanding functions could increase satellite operations efficiencies. We  expect to issue our report based on this review later this fall.
section_title: Actions Being Taken to Address Space Acquisition Problems
paragraphs: Though our reports over the year indicate there is more room for  improvement, DOD continues to work to ensure that its space programs  are more executable and produce a better return on investment. Many of  the actions it has been taking are intended to address root causes of  problems, though it will take time to determine whether these actions are  successful and they need to be complemented by decisions on how best  to lead, organize, and support space activities.
subsections: section_title: Causes of Acquisition Problems
paragraphs: Our past work has identified a number of causes of acquisition problems,  but several consistently stand out. At a higher level, DOD has tended to  start more weapon programs than is affordable, creating a competition for  funding that focuses on advocacy at the expense of realism and sound  management. DOD has also tended to start its space programs before it  has the assurance that the capabilities it is pursuing can be achieved  within available resources and time constraints. There is no way to  accurately estimate how long it would take to design, develop, and build a  satellite system when critical technologies planned for that system are still  in relatively early stages of discovery and invention. Finally, programs  have historically attempted to satisfy all requirements in a single step,  regardless of the design challenges or the maturity of the technologies  necessary to achieve the full capability. DOD’s preference to make larger,  complex satellites that perform a multitude of missions has stretched  technology challenges beyond current capabilities in some cases. Figure  2 illustrates the negative influences that can cause programs to fail.
Our work has recommended numerous actions that can be taken to  address the problems we identified. Generally, we have recommended  that DOD separate technology discovery from acquisition, follow an  incremental path toward meeting user needs, match resources and  requirements at program start, and use quantifiable data and  demonstrable knowledge to make decisions to move to next phases. We  have also identified practices related to cost estimating, program  manager tenure, quality assurance, technology transition, and an array of  other aspects of acquisition program management that could benefit  space programs. DOD has generally concurred with our  recommendations, and, as described below, has undertaken an array of  actions to establish a better foundation for acquisition success.
section_title: Actions to Improve Space and Weapon Systems Acquisitions
paragraphs: As we reported last year, DOD has implemented or has been  implementing a number of actions to reform how space and weapon  systems are acquired, both through its own initiatives as well as those  required by statute. Among other actions, DOD intends to follow  incremental or evolutionary acquisition processes for space programs  versus pursuing significant leaps in capabilities involving technology risk,  and has done so with the only new satellite program undertaken by the  Air Force in recent years—GPS III and more recently with Joint Space  Operations Center Mission System, which supports space situational  awareness activities. DOD and the Air Force are also working to  streamline management and oversight of the national security space  enterprise. For example, all Air Force space system acquisition  responsibility has been assigned to the office responsible for all other Air  Force acquisition efforts, and options for streamlining the many space  committees, boards, and councils is under ongoing review. These and  other actions being taken that could improve space system acquisition  outcomes, that we have not assessed, are described in table 2.
Congress and DOD have taken major steps toward reforming the defense  acquisition system in ways that may increase the likelihood that weapon  programs will succeed in meeting planned cost and schedule objectives.  In particular, DOD policy and legislative provisions place greater  emphasis on front-end planning and establishing sound business cases  for starting programs. For example, the provisions require programs to  invest more time and resources to refine concepts through early systems  engineering, strengthening cost estimating, developing technologies,  building prototypes, holding early milestone reviews, and developing  preliminary designs before starting system development.provisions are intended to enable programs to refine a weapon system  concept and make cost, schedule, and performance trade-offs before  significant commitments are made. In addition, DOD policy requires  establishment of configuration steering boards that meet annually to  review program requirements changes as well as to make  recommendations on proposed descoping options that could reduce  program costs or moderate requirements. Fundamentally, these  provisions should help (1) programs replace risk with knowledge and (2)  set up more executable programs.
While DOD has taken steps to implement the provisions, it is too soon to  determine if Congress’s and DOD’s reform efforts will improve weapon  program outcomes. For example, in June 2011 we reported on the Joint  Requirements Oversight Council’s (JROC) efforts to ensure trade-offs  among cost, schedule, and performance objectives, as directed by the  Weapon Systems Acquisition Reform Act .not always consider tradeoffs or influence tradeoff decisions, military  services did not consistently provide high quality resource estimates to  the JROC, and JROC did not consistently prioritize requirements and  capability gaps. We recommended that the JROC establish a mechanism  to review analysis of alternatives results earlier in the acquisition process,  require higher quality resource estimates from requirements sponsors,  prioritize requirements across proposed programs, and address potential  redundancies during requirements reviews. The Joint Staff partially  concurred with our recommendations and generally agreed with their  intent, but differed with us on how to implement them.
section_title: Remaining Challenges
paragraphs: The actions that the Office of the Secretary of Defense and the Air Force  have been taking to address acquisition problems are good steps. But  there are still significant barriers to ensuring investments are optimized,  including fragmented leadership, the high cost of launch, uncertainty  about the future for technology advancements, and disconnects between  the fielding of satellites with user equipment and ground systems needed  to take advantage of expensive new capabilities. In particular:
Leadership. In past years, we have reported that a major challenge to  leadership is that the community’s authorities and responsibilities are  spread across the department, and there is no single authority  responsible for these programs below the President. Both the DOD  and Air Force have taken a number of steps to streamline and clarify  leadership for space. Time will tell whether these steps will help  resolve issues such as a difficulty holding any one person or  organization accountable for balancing needs against wants, for  resolving conflicts among the many organizations involved with space,  and for ensuring that resources are dedicated where they need to be  dedicated. The department is still struggling with disconnects between  programs that need to be linked together, such as a satellite program  and its user equipment program. And at a higher level, we have  reported that it still appears as if agencies involved in space  acquisitions do not coordinate to the extent that they can in such  areas as launch acquisitions and space S&T planning.
Launch costs. A factor influencing how space programs are designed  is the price of launch, which can range anywhere from around $100  million to well over $200 million. With prices being so high, programs  often seek to maximize the “real estate” on board a satellite by  including more capabilities than can sometimes be handled by a  single program or within the time period desired for the program.  Moreover, the Air Force recently developed a new launch acquisition  strategy designed in part to contain launch prices, but given remaining  knowledge gaps, achieving this outcome is uncertain. At the same  time, potential new providers promise lower costs for launch, but none  of them have been certified to launch the larger national security  satellites, and it is uncertain whether their prices can stay low as they  work to meet standards and expectations set by government  agencies. The dilemma of high launch costs, in our view, makes it  more important for the Air Force to gain insight into costs and pricing  behind its new strategy and to have a complete understanding of the  industrial base and related vulnerabilities as well as mission  assurance activities and related costs. It would also behoove  agencies to work together, not only to bring in new entrants which  they are now doing, but in setting a future course for launch. S&T  planning, for example, has been cited as a weak area for launch, even  though investments in new propulsion and vehicle concepts have the  potential to evolve capabilities and lower costs.
S&T and related investments. Recent proposed funding cuts have  raised questions about how future technology advancements will be  achieved in space. The Space Test Program (STP) was targeted for  termination in the fiscal year 2013 budget. STP was created in 1965  to serve as an integrator to provide launch opportunities for  experimental satellites. This program enabled new technologies to get  on orbit, and pave the way in an affordable manner for new space  capabilities. STP has spawned many current and valuable space  programs, most notably GPS. With the cancelation of this program,  the Secretary of the Air Force has stated that the organizations that  develop these new space technologies, including academic  institutions, government laboratories, and others, will be required to  shoulder the burden of launch costs, estimated at around $50 million  per year. DOD has also proposed cancellation of the Operationally  Responsive Space (ORS) program. ORS was intended to provide  short-term and low-cost tactical capabilities to warfighters. The ORS  program’s long-term goals were to reduce the cost of space  development by fostering low cost launch methods as well as  common design and interface methods. Average spending by the  ORS program was about $100 million per year from fiscal years 2007-  through 2011. While there are still investments available for the Air  Force Research Laboratory and other organizations involved in S&T,  as we mentioned earlier, planning for these investments has not been  robust or very strategic. Another potential challenge to future space  capability innovations is the Efficient Space Procurement (ESP)  initiative, formerly known as the Evolutionary Acquisition for Space  Efficiency (EASE). ESP is intended as a way to reduce costs for DOD  space programs while improving acquisition outcomes by buying  satellites in “block buys” instead of individually, accruing cost savings  which are to be reinvested into a modernization program to evolve  capabilities for future increments of that satellite program. At this time,  it is unclear how this approach will ensure there will still be a focus on  making significant leaps in technology or what the next generation of  space systems will look like and be able to come into fruition.
Disconnects between fielding satellites, ground systems, and user  equipment. DOD faces challenges in synchronizing capabilities  offered by new satellite programs with the ground control stations that  are necessary for receiving and processing information from the new  space systems, and in some cases, the user terminals that deliver this  information to users. When space, ground and user segments are  not synchronized, there is the potential for wasted on-orbit capability  and delays in the ability of users to take advantage of new systems.  As long as this condition exists, the improvements being made to  acquisition practices on the satellite side will be minimized. A few  examples are highlighted below in table 3.
section_title: Concluding Remarks
paragraphs: After more than a decade of serious acquisition difficulties, DOD is  starting to launch new generations of satellites that promise vast  enhancements in capability. Moreover, given the nation’s fiscal  challenges, DOD’s focus on streamlining leadership, fixing problems, and  implementing reforms is promising. But there are still significant barriers  to achieve acquisition success that need to be addressed to maintain  space superiority in an era of fiscal austerity. All of the barriers— leadership fragmentation, launch costs, S&T planning, and disconnects  between space and ground assets—require action from the Air Force and  the Office of the Secretary of Defense as well as the participation and  cooperation of all the military services, the intelligence community, and  other agencies such as NASA and NOAA. Moreover, though successful  launches are being experienced, problems within ongoing development  efforts such as GPS III, indicate that space acquisitions are still at risk of  significant cost and schedule problems, and attention to reforms must be  sustained.
Chairman Nelson, Ranking Member Sessions, this completes my  prepared statement. I would be happy to respond to any questions you  and Members of the Subcommittee may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For further information about this statement, please contact Cristina  Chaplain at (202) 512-4841 or chaplainc@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this statement. Individuals who made key contributions to  this statement include Art Gallegos, Assistant Director; Maricela  Cherveny; Laura Hook; Angela Pleasants; Roxanna Sun; Bob Swierczek;  and Alyssa Weir.
section_title: Related GAO Products
paragraphs: 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and  Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP  (Washington, D.C.: February 28, 2012).
Evolved Expendable Launch Vehicle: DOD Needs to Ensure New  Acquisition Strategy Is Based on Sufficient Information, GAO-11-641  (Washington, D.C.: September 15, 2011).
Space Research: Content and Coordination of Space Science and  Technology Strategy Need to Be More Robust, GAO-11-722  (Washington, D.C.: July 19, 2011).
Space and Missile Defense Acquisitions: Periodic Assessment Needed to  Correct Parts Quality Problems in Major Programs, GAO-11-404  (Washington, D.C.: June 24, 2011).
DOD Weapons Systems: Missed Trade-off Opportunities During  Requirements Reviews, GAO-11-502 (Washington, D.C.: June 16, 2011).
Space Acquisitions: DOD Delivering New Generations of Satellites, but  Space System Acquisition Challenges Remain, GAO-11-590T  (Washington, D.C.: May 11, 2011).
Defense Acquisitions: Challenges in Aligning Space System  Components, GAO-10-55 (Washington, D.C.: October 29, 2009).
Global Positioning System: Challenges in Sustaining and Upgrading  Capabilities Persist. GAO-10-636. (Washington, D.C.: September 15,  2010).
Polar-Orbiting Environmental Satellites: Agencies Must Act Quickly to  Address Risks That Jeopardize the Continuity of Weather and Climate  Data. GAO-10-558. (Washington, D.C.: May 27, 2010).
Defense Acquisitions: Strong Leadership Is Key to Planning and  Executing Stable Weapon Programs, GAO-10-522 (Washington, D.C.:  May 6, 2010).
Space Acquisitions: DOD Poised to Enhance Space Capabilities but,  Persistent Challenges Remain in Developing Space Systems,  GAO-10-447T (Washington, D.C.: March 10, 2010).
Space Acquisitions: Government and Industry Partners Face Substantial  Challenges in Developing New DOD Space Systems. GAO-09-648T.  (Washington, D.C.: April 30, 2009).
Space Acquisitions: Uncertainties in the Evolved Expendable Launch  Vehicle Program Pose Management and Oversight Challenges.  GAO-08-1039. (Washington, D.C.: September 26, 2008).
Defense Space Activities: National Security Space Strategy Needed to  Guide Future DOD Space Efforts. GAO-08-431R. (Washington, D.C.:  March 27, 2008).
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