Defense Acquisitions: Issues to be Considered for Army's Modernization of Combat Systems
Published: 2009-06-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Future Combat System (FCS) has been at the center of the Army's efforts to become a lighter, more agile, and more capable combat force by replacing existing combat systems with a family of manned and unmanned vehicles and systems, linked by an advanced information network. To meet the challenges of FCS's scope and schedule, the Army contracted with Boeing to be lead systems integrator (LSI), to help define, develop, and integrate FCS systems. Earlier this year, the Secretary of Defense proposed restructuring FCS to lower risk and address more near-term needs, shortly before FCS was to undergo a congressionally-mandated review to determine its future. The Department of Defense (DOD) and the Army have already begun to make programmatic and budgetary adjustments to FCS. This statement reviews aspects of FCS that should be considered for inclusion in future efforts, aspects that were problematic and need re-examination, and considerations for shaping future Army ground force modernization. The testimony is drawn from GAO's body of work on FCS management and acquisition strategy, including knowledge gaps, cost, affordability, oversight, and the Army/LSI relationship. GAO has made numerous recommendations aimed at managing FCS risks, but it is not making any new recommendations in this testimony.
section_title: What GAO Found
paragraphs: FCS has many good features that should be considered in future efforts, including a holistic vision of the future force, government insight into subcontractor selection and management, a focus on leveraging capabilities through an information network, and establishment of organizations to train with and evaluate technologies to be spun out to current forces. Other more difficult lessons from FCS must be also be used to put future modernization efforts on the soundest footing possible. FCS was not executable within reasonable bounds of technical, engineering, time, or financial resources. From the start, the program was immature and unable to meet DOD's own standards for technology and design. Although adjustments were made, including adding time and trading off requirements, vehicle weights and software code grew, key network systems were delayed, and technologies took longer to mature. By 2009, it was still not known that the FCS concept would work. Oversight has been extremely challenging, given the program's vast scope and the innovative, but close, partner-like relationship between the Army and the LSI. Oversight by the Office of the Secretary of Defense did not compensate for these risks early in the program. Oversight was further challenged by the fact that the planned schedule for making decisions outpaced demonstrated knowledge--major production commitments were to be made before basic designs were demonstrated. As the Army proceeds with a different approach to modernization, there will be a number of important factors to consider. Rather than a single FCS program going forward, several programs with more targeted objectives may emerge. These programs need to be based on principles such as knowledge-based acquisition, sound cost estimating, and transparency and accountability for oversight. Beyond these principles, the Army will have to tailor its approaches to the needs of the individual programs. For example, the acquisition approach for spinning out mature technologies to current forces would differ from the approach needed to develop an information network. Several issues with transitioning from FCS will have to be addressed, including: closing out or restructuring current contractual arrangements; transferring FCS knowledge to emergent programs; transitioning the FCS information network to current Army forces; placing early emphasis on key design considerations such as sustainability; and balancing investments between future capabilities and keeping fielded systems capable. The Army's experience with FCS has been productive. The key in going forward will be to take the best from both positive and negative lessons learned and apply them to the ground force modernization efforts that will succeed FCS. The Army and DOD should continue to be innovative as to concepts and approaches, but anchored in knowledge-based strategies when it comes to proposing a specific system development effort.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of the Army’s  modernization efforts to transform into a lighter, more agile, and more  capable combat force using a new concept of operations, technologies,  and information network. For the past 6 years, the Future Combat System  (FCS), a revolutionary and expansive program, formed the core of Army  modernization. Earlier this year, the Secretary of Defense recommended  restructuring the FCS program to lower risk and to address more near  term needs. His recommendation came a few months before the FCS  program was scheduled to undergo a congressionally-mandated go/no-go  review to determine the program’s future. Although the Army has not yet  officially implemented the Secretary’s recommendation, the Department of  Defense (DOD) and the Army have begun to make conforming  programmatic and budgetary adjustments to FCS.
My statement today is based on the work we conducted over the last  several years in response to the National Defense Authorization Act for  Fiscal Year 2006, which requires GAO to report annually on the FCS  program. As Congress will be asked to make significant funding  commitments for Army ground force modernization over the next several  years, this statement will review: (1) aspects of FCS that should be  preserved in future efforts, (2) aspects of FCS that were problematic and  need re-examination, and (3) considerations for shaping future Army  ground force modernization.
subsections: section_title: Background
paragraphs: With FCS, the Army embraced a new warfighting concept designed to  replace most of its existing combat systems with a family of manned and  unmanned vehicles and systems linked by an advanced information  network. According to the Army, FCS represented the greatest technology  and integration challenge it had ever undertaken—an FCS-equipped force  was to be as lethal and survivable as today’s force, but significantly lighter  and thus easier to both move and sustain. The Army determined it could  not meet the challenges of the FCS scope and schedule with its workforce  alone and with traditional management approaches. In 2003, the Army  contracted with the Boeing Company as the lead systems integrator (LSI)  to assist in defining, developing, and integrating FCS systems. Boeing  subcontracted with Science Applications International Corporation (SAIC)  to assist in performing the LSI functions. Over the past several years,  Congress, GAO, and other organizations have expressed numerous  concerns about the management and acquisition strategy for the FCS  program, including significant knowledge gaps, questionable costs and  affordability, the relationship between the Army and the LSI, and the lack  of oversight by the Office of the Secretary of Defense (OSD).
This committee has been influential in overseeing the FCS program and  protecting the government’s interests therein. In particular, the committee  advocated changes to the original contract structure and type to  incorporate more Federal Acquisition Regulation provisions, including  those related to the Truth-in-Negotiations Act and the Procurement  Integrity Act.
This statement is based on work we conducted over the last several years  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 the  evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Aspects of FCS that Should Be Considered for Inclusion in Future Efforts
paragraphs: There is no question the Army needs to ensure its forces are well- equipped. The Army has vigorously pursued FCS as the solution, a concept  and an approach that is unconventional, yet with many good features that  should be considered in future efforts. These features include a holistic,  system-of-systems architectural vision, government insight into  subcontractor selection and management, a focus on leveraging  capabilities through an information network, and establishing  organizations to train with and evaluate FCS-related spin-out technologies  being provided to current forces.
FCS resulted from Army leadership’s vision of how land forces should be  organized, equipped, and trained to fight in the future. The decisions to  pursue FCS, along with modular combat units, became the centerpiece for  realizing this vision. To the Army’s credit, these decisions were harder  than just replacing current combat systems, like the Abrams tank and  Bradley fighting vehicle, with new versions. Rather, Army leadership saw  FCS as breaking with tradition. It was to be a system of systems—an  overall architecture through which the collective capabilities of individual  systems, both manned and unmanned, would be multiplied because of the  synergistic effect of being linked by an advanced information network.
Individual systems were to be designed to work within the architecture  and the network—an improvement over a traditional, system-centric  design approach that would integrate the systems after the fact. Army  leadership also chose to cross its own stove-piped combat lines, such as  infantry, armor, and fire support. The resultant scope of the FCS program  was overly broad for a single acquisition program. Nonetheless, such a  holistic view, anchored in a vision of how the land force of the future  needs to fight, should continue to guide the modernization investments the  Army makes. A context, it should be noted, does not necessarily equate to  a program or programs.
While we have reported a number of risks associated with the LSI  arrangement on FCS (which are discussed later), the insights the Army  gained into subcontractors was beneficial. Army leadership set up the FCS  program and LSI contract in such a way that it would create more  competition and have more influence over the selection of subcontractors  below the LSI. Traditionally, once the Army contracted with a prime  contractor, that contractor would bring its own supplier chains, and the  Army was not very involved in the choice of the subcontractors. In FCS,  the Army called for the LSI to hold a competition for the next tier of  contractors. The Army had veto power over these selections. The Army  also directed that the LSI contract with integrators at lower levels in the  program, and the Army was involved with these selections. These  integrators held competitions to select suppliers for those systems. This  strategy kept the first tier of subcontractors from bringing their own  supplier chains, and the approach promoted competition and pushed  Army visibility down lower into the supplier chain. It was also a means for  the Army to ensure commonality of key subsystems across FCS platforms.  Enhanced visibility into the selection and design decisions of  subcontractors appears to have benefited the FCS program and warrants  consideration in future efforts.
The Army envisioned an unprecedented information network as the  backbone of FCS. Inventing such a network while concurrently designing  vehicles and other systems dependent on it was too grand an approach.  However, the recognition that an integrated combat network should be  deliberately designed versus derived or cobbled together from other  systems was discerning. Since FCS began, the Army has achieved an  understanding of what the information network needs to be, what may be  technically feasible, how to build it, and how to demonstrate it. It has also  consciously endeavored to develop the FCS network and software over  time in a series of pre-planned blocks. Although work on such a network  needs to be properly situated within the acquisition process and guided by  requirements that are technically realistic, the deliberate development of  an integrated network seems a sound approach.
The Army initiated spin-out development in 2004, when it embarked on an  effort to bring selected FCS capabilities, such as the unattended ground  sensors and the non-line-of-sight launch system, to current forces while  core FCS development continued. In 2006, the Army established the Army  Evaluation Task Force to use, evaluate, and train with the spin-out  capabilities, and the Task Force began its testing of the first FCS  equipment in early 2008. As noted by both Army and DOD officials, the  Task Force has proven quite useful in identifying system issues and  suggesting design changes. Accordingly, the Army should continue  utilizing the Task Force to better understand and improve its systems, spin  out and otherwise.
section_title: Aspects of FCS that were Problematic and Need Re-Examination
paragraphs: In our work, we found the greatest obstacle to the Army’s realizing its  vision for FCS to be that the program was not executable within  reasonable bounds of technical, engineering, time, or financial resources.  The program was very immature when it began, never measuring up to  DOD’s own standards for technology and design. Over time, adjustments  were made such as adding development time and trading off requirements,  but nonetheless, vehicle weights and software code grew substantially,  key network systems were delayed, and technologies took longer to  mature than planned. By 2009, whether FCS would work as planned  remained undemonstrated. As we have reported, these difficulties do not  necessarily represent problems that could have been avoided; rather, they  reflect the actual immaturity of the program. Yet, to a large extent, these  difficulties are foreseeable at the start of programs that do not apply the  standards embodied in DOD’s own acquisition policies.
Oversight of FCS was extremely challenging given the program’s vast  scope and the innovative, but close, partner-like relationship between the  Army and the LSI. OSD did not play an active oversight role, such as  stringently applying its own acquisition policies, until about the past 2  years of the program. Congress intervened by mandating a go/no-go  milestone decision to occur in late 2009. Oversight was further challenged  by the pace of the program; the schedule for making decisions outpaced  demonstrated knowledge to the extent that major production  commitments were to be made before basic designs were to be  demonstrated. Lessons from this experience should be applied to put  future modernization efforts on the soundest footing possible for  execution.
subsections: section_title: Strategy to Acquire FCS Was Not Executable Within Projected Resources
paragraphs: Originally, the Army intended to define thousands of requirements; mature  critical technologies; and develop the network, manned and unmanned  vehicles, and other systems within about 5 1/2 years from development  start—much faster than a single system typically takes. When FCS entered  development in 2003, the Army had not yet established firm requirements  that were matched with mature technologies and preliminary designs.  Although the Army lengthened the development schedule to 10 years, it  did not plan to demonstrate the level of knowledge needed at development  start until 2009.
In 2003, only 40 percent of the FCS critical technologies were nearing  maturity, although DOD’s acquisition policy called for all critical  technologies to be mature at development start. Originally, the Army  officials believed it could mature the remaining technologies in just 3  years. While the Army has made significant progress, today it is still  conducting evaluations to demonstrate minimum maturity levels for  several critical technologies. Also, the Army needed capabilities being  developed by programs outside of FCS to meet network and other  requirements. However, these programs were immature as well, and  synchronizing them with FCS proved elusive. In particular, the Joint  Tactical Radio System and Warfighter Information Network-Tactical  programs, the primary enablers of the network, experienced  developmental delays that adversely affected the FCS schedule. As  technologies, designs, and requirements evolved, key tradeoffs became  necessary. For example, the weight of the manned ground vehicles grew  from 19 tons to 29 tons, and the use of the C-130 as the main transport  aircraft had to be abandoned.
The Army set forth an ambitious schedule for software development and  the program as a whole. Originally, the Army anticipated 33 million lines of  software code for FCS—which at the time made the program the largest  software-intensive acquisition program in DOD history. That estimate has  now grown to over 114 million lines of software code. The Army approach  to managing the software effort has employed disciplined management  practices, but these have been impaired by late and changing  requirements. With such a schedule in mind, the Army allowed the  program to proceed through developmental and test events without  sufficient knowledge. Similarly, the Army was poised to begin early  production without having adequately tested production-representative  articles.
In light of these and other risks, the John Warner National Defense  Authorization Act for Fiscal Year 2007 mandated that the Secretary of  Defense carry out a Defense Acquisition Board milestone review of FCS  not later than 120 days after the system-of-systems preliminary design  review, which occurred in May 2009. According to the law, the milestone  review should include an assessment of:  1.  whether the warfighter’s needs are valid and can be best met with the  concept of the program;  2.  whether the concept of the program can be developed and produced  within existing resources; and  3.  whether the program should  a.  continue as currently structured;  b.  continue in restructured form; or  c.  be terminated.
In our March 2009 report on FCS, we concluded that the Army would be  challenged to convincingly demonstrate the level of knowledge needed to  warrant an unqualified commitment to the FCS program at the milestone  review. We identified a number of knowledge gaps that have persisted  throughout the development program. Specifically, the FCS program has  yet to show that critical technologies are mature, design issues have been  resolved, requirements and resources are matched, performance has been  demonstrated versus simulated, and costs are affordable. Also, network  performance is largely unproven. In summary, we determined that the FCS  program was not executable within Army cost and schedule projections.
The pace of the program called for key commitments in advance of needed  information. For example, the Army had scheduled only 2 years between  the critical design review and the production decision in 2013, leaving little  time to gain knowledge between the two events. As a result, FCS was  planning to rely on immature prototypes for making the decision to  proceed into production. Also, by 2009, the Army had already spent about  60 percent of its planned development funds and schedule but had only  proceeded to the preliminary design stage. That would have left only 40  percent of its financial and schedule resources left to complete what is  typically the most challenging and expensive development work ahead.
The timing of planned commitments to production funding put decision  makers in the difficult position of making production commitments  without knowing if FCS would work as intended. Facilitization costs were  planned to begin in fiscal year 2011, the budget for which would have been  presented to Congress in February 2010, several months prior to the  planned FCS critical design review. Further, in February 2011, when  Congress would have been asked to approve funding for initial low-rate  production of core FCS systems, the Army would not yet have proven that  the FCS network and the program concept worked.
section_title: Oversight Challenges Were Too Great
paragraphs: The relationship between the Army and the LSI was shaped by the  ambitious scope of the FCS program and limitations in the Army’s ability  to manage it. The relationship is complex; on one hand, the LSI has played  the traditional contractor role of developing a product for the Army. On  the other hand, the LSI has also acted like a partner to the Army, ensuring  the design, development, and prototype implementation of the FCS  network and systems. The Army believed this relationship would offer  more real-time, better informed decisions; reduce rework; and provide  increased flexibility to adjust to new demands. While a close partner-like  relationship offers benefits, such as the government and the contractor  working together on a continual basis to decide what work is to be done,  the partner-like relationship between the Army and the LSI broke new  ground. As such, it posed oversight risks such as the government  becoming increasingly vested in the results of shared decisions and being  less able to provide oversight, especially when the government is  disadvantaged in terms of workforce and skills. The Institute for Defense  Analysis has also reported on the risks of the Army and LSI relationship,  noting that the government cannot expect contractors to act in the best  interest of the government as that could potentially conflict with their  corporate financial interests. The Institute recommended that the Army  take steps to ensure that it has, and continually uses, a competent internal  capability to develop a corporate Army position on key FCS issues such as  measuring program status and trends as well as independent operational  testing.
Part of the Army’s original rationale for using an LSI was to keep the  contractor’s efforts focused on development, rather than on production.  Early on in the FCS program, steps were taken to reinforce this focus,  such as strengthening organizational conflict of interest provisions. While  the original Other Transactions Agreement for FCS development and  demonstration contained an organizational conflict of interest clause that  required certain safeguards be put into place if and when Boeing and SAIC  competed for FCS subcontracts, the 2006 Federal Acquisition Regulation- based contract precluded the Boeing/SAIC team from competing for any  FCS subcontract awards. By this time, Boeing already had prime  responsibility for two critical software efforts. As the program evolved  however, the LSI’s role in production grew. In 2007, the Army decided that  the LSI should be the prime contractor for the first spin outs as well as  low-rate production of FCS core systems. This was a significant change  from the early steps taken to keep the LSI’s focus on development.
The Army structured the FCS contract consistent with its desire to  incentivize development efforts and make it financially rewarding for the  LSI to make such efforts. In general, contracts are limited in that they  cannot guarantee a successful outcome. As with many cost-reimbursable  research and development contracts, the LSI was responsible to put forth  its best effort on the development of the FCS capability. If, given that  effort, the FCS capability falls short of needs, the LSI would not be  responsible, would still be entitled to have its costs reimbursed, and may  earn its full fee. Specific aspects of the contract could make it even more  difficult to tie the LSI’s performance to the actual outcomes of the  development effort. Under the terms of the FCS contract, the LSI could  earn over 80 percent of its $2.3 billion fee by the time the program’s  critical design review is completed in 2011, and the Army would have paid  out roughly 80 percent of contract costs by that point. Yet the actual  demonstration of individual FCS prototypes and the system-of-systems  would have taken place after the design review. Our work on past weapon  system programs shows that most cost growth—symptomatic of  problems—occurs after the critical design review. The Army shared  responsibility with the LSI for making some key FCS decisions and to  some extent the Army’s performance could thus affect the performance of  the LSI.
OSD’s oversight did not compensate for these risks early in the program.  OSD has largely accepted the program and its changes as defined by the  Army, even though it is at wide variance from the best practices embodied  in OSD’s own acquisition policies. Until recently, OSD had passed on  opportunities to hold the FCS program accountable to more knowledge- based acquisition principles. Despite the fact that the program did not  meet the requisite criteria for starting an acquisition program, OSD  approved the program’s entrance into system development and  demonstration in 2003. OSD later reevaluated the decision and decided to  hold a follow-on review with a list of action items the program had to  complete in order to continue. However, this review never occurred and  the FCS program continued as originally planned. Furthermore, OSD did  not plan to conduct another review and decision point until the 2013  production decision, when it would be too late to have a material effect on  the course of the program. In addition, OSD has allowed the Army to use  its own cost estimates rather than independent—and often higher—cost  estimates when submitting annual budget requests.
Over the last couple years, the Under Secretary of Defense for Acquisition,  Technology, and Logistics has taken steps to improve oversight on the  FCS program. For instance, in 2007, the Under Secretary deemed the Non- Line-of-Sight Cannon program as being in need of special attention, so he  designated the program as special interest and declared that his office  would be the decision authority on production. Also, in 2008, the Under  Secretary issued a directive to pursue alternate arrangements for any  future FCS contracts. The Under Secretary found that the fixed fee was  too high and the fee structure allows industry to receive most of the  incentive fee dollars prior to demonstrating integrated FCS system-of- systems capability. The Under Secretary also directed that the Army  conduct a risk-based assessment to examine contracting alternatives for  FCS capability. This assessment is to evaluate opportunities for  procurement breakout of the individual platforms and systems that  comprise FCS and how the government’s interests are served by  contracting with the LSI as compared to contracting directly with the  manufacturers of the items.
section_title: Considerations for Shaping Future Army Ground Force Modernization Efforts
paragraphs: In April, the Secretary of Defense announced plans to cancel the FCS  manned ground vehicle and non-line-of-sight cannon development and  initiate a new ground combat vehicle program that leverages successful  outcomes from FCS investments and incorporates lessons learned from  current combat operations. Explaining the rationale for his decision, the  Secretary noted that FCS vehicle designs did not reflect lessons learned  from combat in Iraq and Afghanistan and that the contract fee structure  provided little leverage to promote cost efficiency.
As the Army proceeds to modernize and ensure its ground forces are well  equipped for current and future operations, there are several important  factors to consider, and some questions to answer. While the Army and  DOD are in the early stages of deciding how to proceed with  modernization, it appears likely that rather than a single program like FCS  going forward, several programs with more targeted objectives will  emerge. For example, the spin-out program may continue in an  accelerated form and a program to develop a new family of manned  ground vehicles will likely be pursued per the Secretary of Defense’s  direction. It is also conceivable that a program focused on developing an  information network would also be considered.
Regardless of how the Army’s ground force modernization program is  structured or managed, some key principles will have to be embodied.  These include:    Knowledge-based acquisition: any emergent modernization programs  should be put on the soundest footing possible for success, by  following DOD’s latest acquisition policy that spans the initial decision  to pursue a material solution, analysis of alternatives, concept  formulation, technology maturation, requirements definition,  incremental system design and development, production, and fielding.  Sound systems engineering practices should be the guide throughout  these phases.
Sound cost estimating: Any emergent program following a knowledge- based approach should be well understood and defined sufficiently to  facilitate realistic cost estimates with reasonable levels of confidence.  In order to ensure the accuracy, completeness, and reliability of these  estimates, independent cost estimates should be completed and  assessed before approval into the product development phases.
Transparency and accountability for oversight: The emerging programs  need to include sufficiently detailed and transparent reporting  approaches to facilitate oversight. Those should include an acquisition  strategy that features demonstrations of knowledge before planned  commitments to future phases and additional funding; a contracting  strategy that features as much competition as possible and protections  for the government’s interests; complete justification materials to  support budget requests; and a clear and understandable framework  for selected acquisition and earned value management reporting.
Beyond these principles, the Army will have to tailor its approaches to the  needs of the individual programs that emerge, allowing for the different  challenges they represent. For example, the current spin-out program is in  the late stages of development, approaching production. The Army now  plans to field at least some FCS equipment and some portion of the FCS  network to its current 73 Brigade Combat Teams. We have reported that  the pace of the spin-out program has been hurried, not allowing enough  time to test and evaluate production-representative prototypes before  beginning production. Specifically, it is unclear whether the Army will be  testing with the specific equipment it plans to produce and use. To date,  that has not been the case. Testing thus far has employed spin-out systems  that are surrogate and non-production representative, and are thus not in  the form that will be fielded. Using such systems is problematic because it  does not conclusively show how well the actual systems perform.  Additionally, we do not know how the Army plans to determine the  content and schedule of future FCS spin-out phases.
Notional plans for the new ground combat vehicle program include a goal  of fielding the new vehicles within 5-7 years, with concept development  efforts underway. This program will likely revert back to a pre-acquisition  phase. This effort will involve different organizations, such as those  involved with science and technology, different strategies, and different  contracting approaches than the spin-out program. The risks for the  ground combat vehicle program will be different and will have to be  addressed differently. For example, under FCS, vehicles were being  designed as network-dependent, a risky approach as the network has not  yet been developed. In addition to the Secretary of Defense’s direction that  the new program incorporate lessons learned from current operations, the  Army may have to consider whether the vehicle designs should be  network-enhanced versus network-dependent. An incremental approach  would allow the vehicle designs to incorporate increasing network  capabilities as they became available.
While we do not know at this point how the Army plans to approach the  development of an information network, its acquisition approach may also  have to retrench to a pre-acquisition phase to reconsider how best to  proceed to manage risks in line with DOD acquisition policy and to meet  the direction of the Secretary of Defense. While some elements of the  network may be further advanced than some of the vehicle work, the  concept itself and how to test and evaluate its performance in large scale  may present greater challenges than the vehicle program. Again, the  network may need a different acquisition and contracting approach, as  well as involvement from different organizations, than either the spin out  or manned ground vehicle program.
In proceeding forward with a different modernization approach, there are  several questions or issues that will have to be addressed. These include:    Closing out or restructuring current contractual arrangements:  Depending on what the Army decides to do with the new ground  vehicle program, it will have to restructure or possibly terminate the  existing FCS contract. To help in that process, it would be useful for  the Army to have a more detailed understanding about the factors that  influenced the Secretary of Defense’s recommendation to cancel the  current FCS vehicle development effort. Whereas the Secretary’s  decision could be interpreted as a determination that the FCS concept  would not meet current needs, it is not clear at this point what is  required to satisfy current military needs.
Transferring knowledge from current FCS efforts to emergent  programs: The Army should carry forward knowledge already gained  from the significant investments in FCS systems development. While  the Army plans to capture and use what has been learned, doing so  depends in large part on whether that knowledge can be transferred to  a follow-on program. For example, the Army and LSI have been jointly  managing the development of FCS software centrally. That effort  included software for the information network, manned ground  vehicles, and other individual FCS systems. As the Army proceeds to  structure the multiple programs, it will need to coordinate what may  be multiple separate software development and demonstration efforts.
Transition of FCS information network to current Army forces:  Depending on how the Army proceeds with an information network,  there are questions as to how it can be transferred to the current  forces. None of the existing equipment in the current forces has been  developed with such a network in mind. As part of the spin-out  evaluation process, the Army encountered difficulties last year in  trying to integrate even a small portion of the FCS network.  Furthermore, the Abrams and Bradley vehicles have space, weight, and  power constraints that may limit their ability to be integrated with an  FCS-like network. Additionally, it is not clear whether the Army will be  developing and fielding vehicles like the proposed FCS command and  control vehicle and reconnaissance and surveillance vehicle, which  were to be key components of the FCS network.
Early emphasis on key development and design considerations:  Previously, we have commended the Army’s efforts to break from  traditional thinking with its early emphasis on key development and  design considerations. Specifically, the Army defined the larger  context within which it wanted its new assets and capabilities to work,  emphasizing open system designs and interoperability early in  development, rather than as an afterthought. Further, we have noted  the productive nature of the Army’s early consideration and focus on  challenging issues like sustainability. As the Army ground force  modernization effort goes forward, the Army will need to find ways to  retain this broader focus across multiple programs.
Moving from a single program structure to multiple programs: The  Army’s preliminary plans for the FCS restructuring call for several  separate programs, including those for the new ground combat  vehicles, the information network, and the FCS spin-out effort. As it  shaped the original FCS program, the Army made a concerted effort to  reduce the influence of the various “stovepipes” within its user  organization and set up a unitary management structure. Separate  programs may differ greatly from the centralized structure of the FCS  program to date and would have consequences that need to be  considered. On the one hand, separate structures might lend  themselves more readily to better oversight within each area. On the  other hand, multiple programs may require more staffing and might  introduce various and competing objectives rather than maintain  singular focus on interoperability and other key objectives.
Balancing investments between future capabilities and keeping fielded  systems as capable as possible: The Army will have to strike a balance  between near-term and long-term needs, realistic funding expectations,  and a sound execution plan as it moves on the new FCS path forward.  The Army’s FCS budget material for Fiscal Year 2010, which includes  the new ground combat vehicle program, provides little detail and no  long-term perspective. DOD, Army, and Congress will eventually have  to agree on the magnitude of funds that can be devoted to ground force  modernization and how that money should be allocated among near-,  mid-, and long-term needs.
section_title: Concluding Remarks
paragraphs: The Army’s experience with FCS has been productive. Its vision, holistic  context, recognition of network potential, and penchant for innovative  managerial and experimentation techniques, are worthy of emulation. On  the other hand, the difficulties in executing and overseeing the program  were apparent at the outset of the program—they were not unexpected  discoveries made along the way. The key in going forward is to take the  best from both kinds of lessons and applying them, in a tailored way, to  the different modernization efforts that will succeed FCS. The Army and  DOD should continue to be innovative as to concepts and approaches, but  anchored in knowledge-based strategies when it comes to proposing a  specific system development effort. Differences in the task at hand should  warrant different approaches. At one end of the spectrum, spin outs are in  late development, where the focus should be on testing and production  preparations. At the other end of the spectrum are efforts to develop a new  family of manned ground vehicles and an information network. These  would be in early stages of development, in which informed decisions on  technologies and requirements will be key. Even within these two  developmental efforts, different technical and managerial approaches may  be necessary, for more is known about developing and projecting the  performance of vehicles than is known about a network.
Mr. Chairman, that concludes my prepared statement. I will be happy to  answer any of your questions.
section_title: Contacts and Staff Acknowledgements
paragraphs: For future questions about this statement, please contact me on (202) 512- 4841 or francisp@gao.gov. Individuals making key contributions to this  statement include William R. Graveline, Assistant Director; Marcus C.  Ferguson; William C. Allbritton; Noah B. Bleicher; Helena Brink; and Tana  M. Davis.
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