Space Acquisitions: DOD Is Making Progress to Rapidly Deliver Low Cost Space Capabilities, but Challenges Remain
Published: 2008-04-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense (DOD) invests heavily in space assets to provide the warfighter with intelligence, navigation, and other information critical to conducting military operations. In fiscal year 2008 alone, DOD expects to spend over $22 billion dollars on space systems. Despite this investment, senior military commanders have reported shortfalls in tactical space capabilities in each recent major conflict over the past decade. To provide short-term tactical capabilities as well as identify and implement long-term solutions to developing low cost satellites, DOD initiated operationally responsive space (ORS). Following a 2006 GAO review of ORS, the Congress directed DOD to submit a report that sets forth a plan for providing quick acquisition of low cost space capabilities. This report focuses on the status of DOD's progress in responding to the Congress and is based on GAO's review and analyses of ORS documentation and interviews with DOD and industry officials.
section_title: What GAO Found
paragraphs: Since GAO last reported on DOD's ORS efforts in 2006, the department has taken several steps toward establishing a program management structure for ORS and executing research and development efforts. On the programmatic side, DOD provided Congress with a plan that lays out an organizational structure and defines the responsibilities of the newly created Joint ORS Office, and describes an approach for satisfying warfighters' needs. DOD has also begun staffing the office. On the research and development side, DOD has launched one of its TacSat satellites--small experimental satellites intended to quickly provide a capability that meets an identified need within available resources--and has begun developing several others. It has also made progress in developing interface standards for satellite buses--the platform that provides power, altitude, temperature control, and other support to the satellite in space--and continued its sponsorship of efforts aimed at acquiring low cost launch vehicles. Despite this progress, it is too early to determine the overall success of these efforts because most are still in their initial phases. Achieving success in ORS will be challenging. With relatively modest resources, the Joint ORS Office must quickly respond to the warfighter's urgent needs, while continuing research and development efforts that are necessary to help reduce the cost and time of future space acquisitions. As it negotiates these priorities, the office will need to coordinate its efforts with a broad array of programs and agencies in the science and technology, acquisition, and operational communities. Historically, it has been difficult to transition programs from the science and technology environment to the acquisition and operational environment. At this time, DOD lacks a plan that lays out how it will direct its investments to meet current operational needs while pursuing innovative approaches and new technologies.

section_title: Letter
paragraphs: The Department of Defense (DOD) is investing heavily in large, complex  The Department of Defense (DOD) is investing heavily in large, complex  satellites and other space assets to provide the warfighter with  satellites and other space assets to provide the warfighter with  communications, intelligence, navigation, missile-warning, and other  communications, intelligence, navigation, missile-warning, and other  information critical to conducting military operations. In fiscal year 2008  information critical to conducting military operations. In fiscal year 2008  alone, DOD expects to spend over $22 billion dollars to develop and  alone, DOD expects to spend over $22 billion dollars to develop and  procure satellites and other space systems. Yet, for the past two decades,  procure satellites and other space systems. Yet, for the past two decades,  major satellite programs have been beset with significant cost overruns  major satellite programs have been beset with significant cost overruns  and schedule delays. Moreover, in each major conflict over the past  and schedule delays. Moreover, in each major conflict over the past  decade, senior military commanders reported shortfalls in tactical space  decade, senior military commanders reported shortfalls in tactical space  capabilities, such as those intended to provide communications and  capabilities, such as those intended to provide communications and  imagery data to the warfighter in theater.  imagery data to the warfighter in theater.
To help address these issues, DOD recently initiated an effort known as  To help address these issues, DOD recently initiated an effort known as  operationally responsive space (ORS). The ORS initiative encompasses  operationally responsive space (ORS). The ORS initiative encompasses  several separate endeavors with a goal to provide short-term tactical  several separate endeavors with a goal to provide short-term tactical  capabilities as well as identifying and implementing long-term technology  capabilities as well as identifying and implementing long-term technology  and design solutions to reduce the cost and time of developing and  and design solutions to reduce the cost and time of developing and  delivering simpler satellites in greater numbers. More specifically, these  delivering simpler satellites in greater numbers. More specifically, these  include developing and launching small-size satellites, acquiring lower cost  include developing and launching small-size satellites, acquiring lower cost  launch systems, developing standardized satellite components, as well as  launch systems, developing standardized satellite components, as well as  exploring a variety of new common design techniques. Though DOD has  exploring a variety of new common design techniques. Though DOD has  tried to make space acquisition more responsive in the past, the current  tried to make space acquisition more responsive in the past, the current  ORS initiative is a concerted effort to create an environment where new  ORS initiative is a concerted effort to create an environment where new  concepts and ideas can be fostered and transitioned to users.  concepts and ideas can be fostered and transitioned to users.
We reviewed aspects of the ORS initiative in 2006 and concluded that DOD  We reviewed aspects of the ORS initiative in 2006 and concluded that DOD  needed a departmentwide strategy for pursuing low cost, responsive  needed a departmentwide strategy for pursuing low cost, responsive  tactical capabilities—both satellite and launch—for the warfighter, and to  tactical capabilities—both satellite and launch—for the warfighter, and to  identify corresponding funding. Subsequently, the Congress directed DOD  to submit a report that sets forth a plan for providing quick acquisition of  low cost space capabilities. Given the potential these efforts offer for  changing the way DOD acquires and fields space capabilities, you asked us  to report on the status of DOD’s progress to date in implementing the  program and assessing associated challenges. We also reviewed DOD’s  development of a higher level strategy to guide the ORS initiative, an  action that we reported separately to you in March 2008. Further, we are  reviewing ORS’ requirements setting process and its integration into  warfighting concepts of operation, which we will report on later in June  2008.
To conduct our work for this report, we reviewed and analyzed ORS  documentation and interviewed officials representing the ORS initiative as  well as officials from the warfighting, acquisition, science, and technology  communities and industry. We conducted this performance audit from  May 2007 to February 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.
subsections: section_title: Background
paragraphs: In May 2003, the Office of Force Transformation began funding small  experimental satellites to enhance the responsiveness to the warfighter  and to create a new business model for developing and employing space  systems. As we have reported over the past two decades, DOD’s space  portfolio has been dominated by larger space system acquisitions, which  have taken longer, cost more, and delivered fewer quantities and  capabilities than planned. The ORS initiative is a considerable departure  from DOD’s large space acquisition approach. The initiative aims to  quickly deliver low cost, short-term tactical capabilities to address unmet  needs of the warfighter. Unlike traditional large satellite programs, the  ORS initiative is intended to address only a small number of unmet tactical  needs—one or two—with each delivery of capabilities. It is not designed  to replace current satellite capabilities or major space programs in  development. Also, the initiative potentially aims to identify and facilitate  ways to reduce the time and cost for all future space development efforts.
As we have previously reported, managing requirements so that their  development is matched with resources offers an opportunity to mature  technologies in the science and technology environment—a best  acquisition practice. We also have reported that the ORS initiative could  provide opportunities for small companies—who often have a high  potential to introduce novel solutions and innovations into space  acquisitions—to compete for DOD contracts. Consolidations within the  defense industrial base for space programs have made it difficult for such  companies to compete. ORS could broaden the defense industrial base and  thereby promote competition and innovation.
section_title: DOD Has Made Progress to Develop a Management Structure and Build a Technological Foundation for ORS
paragraphs: Since we last reported on DOD’s ORS efforts in 2006, the department has  taken several steps toward establishing a program management structure  for ORS and executing research and development efforts. Despite this  progress, it is too early to determine the overall success of these efforts  because most are still in their initial phases.
subsections: section_title: Program Management Structure
paragraphs: Congress directed that DOD submit a report that sets forth a plan for the  quick acquisition of low cost space capabilities and establish a Joint ORS  Office to coordinate and manage the ORS initiative. In the first half of  2007, DOD delivered an ORS plan to Congress and established a Joint ORS  Office. DOD created the Joint ORS Office to coordinate and manage  specific science and technology efforts to fulfill joint military operational  requirements for on-demand space support and reconstitution. In addition,  DOD is working with other government agencies to staff the office,  developing an implementation plan, and establishing a process for  determining which existing requirements for short-term tactical  capabilities the office should pursue. Responsiveness is an attribute  desired by the entire space community, including the National Aeronautics  and Space Administration and the military service laboratories. Most of  the efforts under the ORS initiative are being executed by science and  technology organizations and other DOD agencies. The office will be  responsible for coordinating, planning, acquiring, and transitioning those  efforts. Its work is to be guided by an executive committee, comprised of  senior officials from DOD, the military services, the intelligence  community, and other government agencies. Most requirements for  needed short-term tactical capabilities are expected to come through the  U.S. Strategic Command. To respond to unmet warfighter needs, ORS  requirements will be based on existing validated requirements. Table 1  summarizes the status of some of DOD’s efforts related to the  management structure.
section_title: Research and Development Efforts
paragraphs: DOD is continuing to make progress in developing TacSats—its small  experimental satellite projects. In addition, DOD is funding research  efforts by industry to facilitate the development of future capabilities and  is working with industry and academia to develop standards for building  satellite components. Finally, DOD is working to improve the capabilities  of existing small launch vehicles and providing some funding for future  launch vehicles.
subsections: section_title: Development of Small-Sized Satellites
paragraphs: The TacSat experiments aim to quickly provide the warfighter with a  capability that meets an identified need within available resources—time,  funding, and technology. Limiting the TacSats’ scope allows DOD to trade  off higher reliability and performance for speed, responsiveness,  convenience, and customization. Once each TacSat satellite is launched,  DOD plans to test its level of utility to the warfighter in theater. If military  utility is established, DOD will assess the acquisition plan required to  procure and launch numerous TacSats—forming constellations—to  provide wider coverage over a specific theater. As a result, each satellite’s  capability does not need to be as complex as that of DOD’s larger satellites  and does not carry with it the heightened consequence of failure as if each  satellite alone were providing total coverage. DOD currently has five  TacSat experiments in different stages of development (see table 2).
In addition, DOD is sponsoring the development of new capabilities  provided mostly by the small satellite industry. These efforts include the  ORS Payload Technology Initiative, which awarded 15 contracts to  satellite industry contractors for payload technology concepts that may be  developed in the future. The Air Force has been funding additional  research conducted by small technology companies that could provide  ORS capabilities, such as faster ways of designing satellites, and  identifying the types and characteristics of components based on mission  requirements.
section_title: Efforts to Develop and Test Satellite Interface and Bus Standards
paragraphs: DOD is also working to establish standards for the “bus”—the platform  that provides power, attitude, temperature control, and other support to  the satellite in space. Establishing interface standards for bus  development would allow DOD to create a “plug and play” approach to  building satellites—similar to the way personal computers are built.  According to DOD officials, interface standards would allow the  development of modular or common components and would facilitate  building satellites—both small and large—more quickly and at a lower  cost. DOD’s service laboratories, industry, and academia have made  significant progress to develop satellite bus standards. The service labs  expect to test some standardized components on the TacSat 3 bus and  system standards on the TacSat 4 bus. Table 3 provides a description of  the bus standardization efforts and their status.
section_title: Launch Infrastructure
paragraphs: To get new tactical space capabilities to the warfighter sooner, DOD must  secure a small, low cost launch vehicle on demand. Current alternatives  include Minotaur launch vehicles, ranging in cost from about $21 million  to $28 million, and an Evolved Expendable Launch Vehicle—DOD’s  primary satellite launch vehicles—at an average cost of roughly $65  million (for medium and intermediate launchers). DOD is looking to small  launch vehicles, unlike current systems, that could be launched in days, if  not hours, and whose cost would better match the small budgets of  experiments. Both DOD and private industry are working to develop small,  low cost, on-demand launch vehicles. Notably, DOD expects the Defense  Advanced Research Projects Agency’s (DARPA) FALCON launch program  to flight-test hypersonic technologies and be capable of launching small  satellites such as TacSats. In addition to securing low cost launch vehicles,  DOD plans to acquire a more responsive, reliable, and affordable launch  tracking system to complement the existing launch infrastructure. Table 4  describes DOD’s efforts to develop a launch infrastructure and their  status.
section_title: ORS Challenges Magnified by Lack of a Plan to Guide Investments and Efforts
paragraphs: DOD faces several challenges in succeeding in its ORS efforts. With  relatively modest resources, the Joint ORS Office must quickly respond to  the warfighter’s urgent needs, including gaps in capabilities, as well as  continue its longer-term research and development efforts that are  necessary to help reduce the cost and time of future space acquisitions. As  the office negotiates these priorities, it will need to coordinate its efforts  with a broad array of programs and agencies in the science and  technology, acquisition, and operational communities. Historically it has  been difficult to transition programs initiated in the science and  technology environment to the acquisition and operational environment.  At this time, DOD lacks tools which would help the program office  navigate within this environment—primarily, a plan that lays out how the  office will direct its investments to meet current operational needs while  at the same time pursuing innovative approaches and new technologies.
The Joint ORS Office has a budget totaling about $646 million for fiscal  years 2008 through 2013 and with no more than 20 government staff. These  resources are relatively modest when compared with the resources  provided major space programs. For example, the ORS fiscal year 2008  budget represents less than 12 percent of the budget of the  Transformational Satellite Communications System program which is in  the concept development phase, and staffing is about a quarter of that  program’s staff. While the Joint ORS Office’s responsibilities are not the  same as those of large, complex acquisition programs, it is expected to  address urgent tactical needs that have not been met by the larger space  programs. At this time, for example, the office has been asked to develop a  solution to meet current communications shortfalls that cannot be met by  the current Ultra High Frequency Follow-On satellite system. And, while  the office has not yet been asked, officials have told us that ORS could  potentially satisfy a gap in early missile warning capabilities because of  delays in the Space Based Infrared Systems program, as well as gaps in  communications and navigation capabilities. Taking on any one of these  efforts will be challenging for ORS as there are constraints in available  technologies, time, money, and other resources that can be used to fill  capability gaps.
At the same time, the Joint ORS Office will be pressured to continue to  sponsor longer term research and development efforts. According to the  Air Force Research Laboratory, the average cost of a small satellite is  about $87 million. This is substantially higher than the target acquisition  cost of about $40 million for an integrated ORS satellite in the 2007  National Defense Authorization Act. In addition, concerns are being  expressed that not enough funding and support are being devoted to  acquiring low cost launch capabilities. Some government and industry  officials believe that achieving such capabilities is a linchpin to reducing  satellite development costs in the future. The current alternatives for  launching ORS satellites—an Evolved Expendable Launch Vehicle and  Minotaur launch vehicles—do not meet DOD’s low cost goal. DARPA  expects its responsive launch capabilities, currently in development, will  total about $5 million to produce—a significantly lower cost than that of  current capabilities. However, in order to achieve the lower cost launch  capability, DOD will have to continue to fund research beyond the $15.6  million already spent on advanced technology development, facilities, test- range and mission support, and program office support.
To execute both its short- and long-term efforts, the Joint ORS Office will  also need to gain cooperation and consensus from a diverse array of  officials and organizations. These include science and technology  organizations, the acquisition community, the U.S. Strategic Command, the  intelligence community, and industry. We have previously reported on  difficulties DOD has encountered in bringing these organizations together,  particularly when it comes to setting requirements for new acquisitions  and transitioning technologies from the science and technology  community to acquisition programs. As a new and relatively small  organization, the Joint ORS Office may well find it does not have the clout  to gain cooperation and consensus on what short- and long-term projects  should get the highest priority.
Despite the significant expectations placed on the Joint ORS Office and  the challenges it faces, DOD does not have an investment plan to guide its  ORS decisions. DOD has begun to develop an ORS strategy that is to  identify the investments needed to achieve future capabilities. However,  the strategy is not intended to become a formalized investment plan that  would (1) help DOD identify how to achieve these capabilities, (2)  prioritize funding, and (3) identify and implement mechanisms to enforce  the plan. At the same time, there are other science and technology projects  in DOD’s overall space portfolio competing for the same resources,  including those focused on discovering and developing technologies and  materials that could enhance U.S. superiority in space. Further, as DOD’s  major space acquisition programs continue to experience cost growth and  schedule delays, DOD could be pressured to divert funds from ORS. We  have previously recommended that DOD prioritize investments for both its  acquisitions and science and technology projects—the ORS plan could be  seamlessly woven into an overall DOD investment plan for space.  However, DOD has yet to develop this overall investment plan.
section_title: Conclusions
paragraphs: Providing the warfighter with needed space capabilities in a fiscally  constrained and rapidly changing technological environment is a daunting  task. ORS provides DOD with a unique opportunity to work outside the  typical acquisition channels to more quickly and less expensively deliver  these capabilities. However, even at lower costs, pressure on ORS funding  will come in DOD’s competition for its resources. As DOD moves forward,  decisions on using constrained resources to meet competing demand will  need to be made and reevaluated on a continuing basis. Until DOD  develops an investment plan, it will risk forgoing an opportunity to get  continuing success out of the ORS initiative.
section_title: Recommendation for Executive Action
paragraphs: To better ensure that DOD meets the ORS initiative’s goal, we recommend  that the Secretary of the Air Force develop an investment plan to guide the  Joint ORS Office as it works to meet urgent needs and develops a  technological foundation to meet future needs. The plan should be  approved by the stakeholders and identify how to achieve future  capabilities, establish funding priorities, and identify and implement  mechanisms to ensure progress is being achieved.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for review and comment. DOD  concurred with our findings and our recommendation but clarified that the  Secretary of the Air Force, specifically the Executive Agent for Space,  would be responsible for developing an investment plan since the Under  Secretary of the Air Force position is vacant.  Full comments can be found  in appendix I.
section_title: Scope and Methodology
paragraphs: To assess DOD’s progress to date in implementing its ORS goal and  addressing associated challenges, we interviewed and reviewed  documents from officials in Washington, D.C., at the Office of the Deputy  Under Secretary of Defense for Advanced Systems and Concepts; National  Security Space Office; Office of the Director of Defense Research and  Engineering; Office of the Director of Program Analysis and Evaluation;  Office of the Joint Chiefs of Staff; the U.S. Naval Research Laboratory; and  the Office of the Assistant Secretary of the Navy for Research,  Development and Acquisition. We also interviewed and reviewed  documents from officials in Virginia at the Office of the Assistant  Secretary of Defense for Networks Information and Integration; Office of  the Under Secretary of the Air Force; Defense Advanced Research Project  Agency; and U.S. Army Space and Missile Defense Command. In addition,  we interviewed and reviewed documents from officials at the Navy  Blossom Point Satellite Tracking Facility in Maryland; Air Force Space  Command, Peterson Air Force Base, Colorado; Space and Missile Systems  Center, Los Angeles Air Force Base, California; the U.S. Strategic  Command, Offutt Air Force Base, Nebraska; and the Air Force Research  Laboratory and Joint Operationally Responsive Space Office, Kirtland Air  Force Base, New Mexico. We also interviewed officials from the National  Aeronautics and Space Administration, Washington, D.C., and industry  representatives involved in developing small satellites and commercial  launch vehicles. We reviewed and analyzed the documents that we  received.
We will send copies of the letter to the Department of Defense and other  interested congressional committees. We will also make copies available  to others upon request. In addition, the report will be available at no  charge on the GAO Web site at http://www.gao.gov.
Should you or your staff have any questions on matters discussed in this  report, please contact me at (202) 512-4859 or chaplainc@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report. Principal contributors to this  report were Art Gallegos, Assistant Director; Maria Durant; Jean Harker;  Arturo Holguin; and Karen Sloan.
section_title: Appendix I: Comment from the Department of Defense
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: In addition, key contributors to the report include Maria Durant, Art  Gallegos, Jean Harker, Arturo Holguin, and Karen Sloan.