Space Acquisitions: DOD Needs a Departmentwide Strategy for Pursuing Low-Cost, Responsive Tactical Space Capabilities
Published: 2006-03-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: For more than two decades, the Department of Defense (DOD) has invested heavily in space assets to provide the warfighter with mission-critical information. Despite these investments, DOD commanders have reported shortfalls in space capabilities. To provide tactical capabilities to the warfighter sooner, DOD recently began developing TacSats--a series of small satellites intended to be built within a limited time frame and budget--and pursuing options for small, low-cost vehicles for launching small satellites. GAO was asked to (1) examine the outcomes to date of DOD's TacSat and small, low-cost launch vehicle efforts, (2) identify the challenges in pursuing these efforts, and (3) determine whether experiences with these efforts could inform DOD's major space system acquisitions.
section_title: What GAO Found
paragraphs: Through effective management of requirements and technologies and strong leadership, DOD was able to deliver the first TacSat satellite in 12 months and for less than $10 million. The Office of Force Transformation, TacSat 1's sponsor, set requirements early in the satellite's development process and kept them stable. DOD modified existing technologies for use in space, significantly reducing the likelihood of encountering unforeseen problems that could result in costly design changes. The satellite was also built within DOD's science and technology environment, which enabled service laboratory scientists to address problems quickly, inexpensively, and innovatively. The vision and support provided by leadership were also key to achieving the successful delivery of TacSat 1. DOD has also made progress in developing three additional TacSats and is working toward developing a low-cost launch vehicle available on demand. Despite this achievement, DOD faces several challenges in providing tactical capabilities to the warfighter sooner. First, DOD has yet to develop a low-cost, small launch vehicle available to quickly put tactical satellites, including TacSat 1, into orbit. Second, limited collaboration between the science and technology and the acquisition communities--as well as the acquisition community's tendency to expand requirements after program start--could impede efforts to quickly procure tactical capabilities. Securing funding for future TacSat experiments may also prove difficult because they are not part of an acquisition program. Finally, DOD lacks a departmentwide strategy for implementing these efforts, and because key advocates of the experiments have left DOD, it is unclear how well they will be supported in the future. Regardless of these challenges, DOD's experiences with the TacSat experiments thus far could inform its major space system acquisitions. DOD's approach to developing the TacSats--matching requirements to available resources, using proven technologies, and separating technology development from product development--reflects best commercial practices that lead to quicker delivery with less risk. According to some DOD officials, the TacSats and small, low-cost launch vehicles--once they are developed--could also provide an avenue for large space system acquisitions to prove out technologies in the space environment, something DOD has avoided because of the high cost of launching such experiments. These officials also believe that giving space professionals the opportunity to manage small-scale projects like TacSats may better prepare them for managing larger, more complex space system acquisitions. Finally, these officials noted that building small-scale satellite systems and launch vehicles could create opportunities for small, innovative companies to compete for DOD contracts and thereby broaden the space industrial base.

section_title: Letter
paragraphs: Department of Defense (DOD) satellites and other space-related assets  provide intelligence, surveillance, reconnaissance, missile warning,  navigation, and other information critical to conducting military  operations. DOD’s space network is expected to play an increasingly  important role in military operations. According to DOD, approximately   70 percent of weapons used in Operation Iraqi Freedom were precision-  guided—mostly through global positioning satellites. Yet in each major  conflict over the past decade, senior military commanders reported  shortfalls in space capabilities, such as those intended to provide imagery  data.
To address such shortfalls and provide tactical capabilities to the  warfighter sooner, DOD recently began building a series of small satellites,  referred to as TacSats, within the science and technology environment— an environment that lends itself to demonstrating technologies within a  relatively short time frame and small budget. Although small satellites  offer less performance than large satellites in areas like resolution,  operational control, and power, the TacSats are expected to quickly  provide the warfighter with the information needed to conduct operations  in theater. DOD is also developing a small, low-cost launch vehicle that  could be used to launch small satellites like the TacSats.
Given the potential these efforts may offer in changing the way DOD does  business, you asked us to (1) examine the outcomes to date from the  TacSat experiments as well as from efforts to develop small, low-cost  launch vehicles, (2) identify the challenges in pursuing TacSats and the  launch vehicles, and (3) determine whether DOD’s experiences with  TacSats and small, low-cost launch vehicles could inform major space  system acquisitions.
To conduct our work, we interviewed DOD officials in the Office of Force  Transformation, Air Force Space Command, Space and Missile Systems  Center, the Air Force and Navy research labs, and in other cognizant  offices, and analyzed documents obtained from these officials. We also  interviewed industry representatives involved in developing large space  systems and small commercial launch vehicles. We analyzed a number of  GAO and DOD studies that discuss acquisition problems and associated  challenges, including our work on best practices in weapon system  development that we have conducted over the past decade. We conducted  our review from June 2005 to March 2006 in accordance with generally  accepted government auditing standards. For more on our scope and  methodology, see appendix I.
subsections: section_title: Background
paragraphs: The TacSat experiments and efforts to develop small, low-cost launch  vehicles are part of a larger DOD initiative: Operationally Responsive  Space (ORS). In general, ORS was created by DOD’s Office of Force  Transformation (OFT) in response to the Secretary of Defense’s  instruction to create a new business model for developing and employing  space systems. Under ORS, DOD aims to rapidly deliver to the warfighter  low-cost, short-term joint tactical capabilities defined by field  commanders—capabilities that would complement and augment national  space capabilities, not replace them. ORS would also serve as a test bed  for the larger space program by providing a clear path for science and  technology investments, enhancing institutional and individual knowledge,  and providing increased access to space for testing critical research and  development payloads. ORS is a considerable departure from the  approach DOD has used over the past two decades to acquire the larger  space systems that currently dominate its space portfolio. These global  multipurpose systems, which have been designed for longer life and  increased reliability, require years to develop and a significant investment  of resources. The slow generational turnover—currently 15 to 25 years— does not allow for a planned rate of replacement for information  technology hardware and software. In addition, the data captured through  DOD’s larger space systems generally go through many levels of analysis  before being relayed to the warfighter in theater.
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 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, according to a DOD official, 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 four TacSat experiments in different stages  of development (see figure 1).
According to Naval Research Laboratory officials, TacSat 2’s delay is  primarily the result of overestimating the maturity of its main payload—an  off-the-shelf imager that was being refurbished for space use. Officials also  noted that the contracting process, which took longer than expected, used  multiple and varied contracts awarded under standard federal and defense  acquisition regulations.
DOD is also using the TacSat experiments as a means for developing   “bus” standards—the platform that provides power, attitude, temperature  control, and other support to the satellite in space. Currently, DOD’s  satellite buses are custom-made for each space system. According to DOD  officials, establishing bus standards with modular or common components  would facilitate building satellites—both small and large—more quickly  and at a lower cost.
To achieve one of the TacSat experiments’ goals—getting new capabilities  to the warfighter sooner—DOD must secure a small, low-cost launch  vehicle that is available on demand. Instead of waiting months or years to  carry out a launch, DOD is looking to small launch vehicles that could be  launched in days, if not hours, and whose cost would better match the  small budgets of experiments. A 2003 Air Force study determined that  DOD’s current class of launchers—the Evolved Expendable Launch  Vehicle—would not be able to satisfy these requirements.
section_title: DOD Successfully Delivered First TacSat through Managing Requirements and Is Moving Forward with Additional Efforts
paragraphs: DOD delivered the TacSat 1 satellite within cost and schedule targets. To  develop the first TacSat, DOD effectively managed requirements,  employed mature technologies, and built the satellite in the science and  technology environment, all under the guidance of a leader who provided  a clear vision and prompt funding for the project. DOD is also moving  forward with developing additional TacSats; bus standards; and a small,  low-cost launch vehicle available on demand.
subsections: section_title: TacSat 1’s Development Approach Enabled Successful Delivery
paragraphs: In May 2004, 12 months after TacSat 1 development began, the Naval  Research Laboratory delivered the satellite to OFT at a cost of about   $9.3 million, thereby meeting its targets to develop the satellite within   1 year and an estimated budget of $8.5 million to $10 million. Once   TacSat 1 is placed into orbit, it is expected to provide capabilities that will  allow a tactical commander to directly task the satellite and receive data  over DOD’s Secure Internet Protocol Router—a need identified by the  warfighter.
Before TacSat 1’s development began, OFT and the Naval Research  Laboratory worked together to reach consensus on known warfighter  requirements that would match the cost, schedule, and performance  objectives for the satellite. Our past work has found that when  requirements are matched with resources, goals can be met within  estimated schedule and budget. To inform the requirements selection  process, the Naval Research Laboratory used an informal systems  engineering approach to assess relevant technologies and determine  which could meet TacSat 1 mission objectives within budget and schedule.  Once TacSat 1’s requirements were set, OFT did not change them. To meet  its mission objectives, OFT sought a capability that would be “good  enough” for the warfighter, given available resources—rather than  attempting to provide a significant leap in capability. OFT and the Naval  Research Laboratory agreed to limit TacSat 1’s operational life span to   1 year, which allowed the laboratory to build the satellite with lower  radiation protection levels, less fuel capacity, and fewer backups than  would have been necessary for a satellite designed to last 6 years or  longer.
The use of existing technologies for the satellite and the bus also helped to  keep TacSat 1 on schedule and within cost. For example, hardware from  unmanned aerial vehicles and other aircraft were modified for space flight  to protect them in the space environment, and bus components were  purchased from a satellite communications company. Using items on hand  at the Naval Research Laboratory—such as the space ground link system  transponder and select bus electronics—resulted in a savings of about   $5 million. Using and modifying existing technologies provided the  laboratory better knowledge about the systems than if it had tried to  develop the technologies from scratch. According to a laboratory official,  the TacSat 1 experiment also achieved efficiencies by using the same  software to test the satellite in the laboratory and fly the satellite.
Developing the TacSat within the science and technology environment  also helped the experiment meet its goals. As we have stressed in our  reports on systems development, the science and technology environment  is more forgiving and less costly than the acquisition environment. For  example, when engineers encountered a blown electronics part during  TacSat 1’s full system testing, they were able to dismantle the satellite,  identify the source of the problem, replace the damaged part, and rebuild  the satellite—all within 2 weeks of the initial failure. According to the  laboratory official, this problem would have taken months to repair in a  major space acquisition program simply because there would have been  stricter quality control measures, more people involved, and thus more  sign-offs required at each step. Moreover, the contracting mechanism in  place at the Naval Research Laboratory allows the laboratory to respond  quickly to DOD requests. Specifically, the center used several existing  engineering and technical support contracts that are competed, generally,  at 5-year intervals, rather than competing a specific contract for TacSat 1.
According to a number of DOD officials, the ultimate success of the  TacSat 1 procurement was largely the result of the former OFT director,  who    provided the original impetus and obtained support for the experiment  from high levels within DOD and the Congress;    negotiated a customized mission assurance agreement with Air Force  leaders to launch TacSat 1 from Vandenberg Air Force Base at a cost  that was affordable given the experiment’s budget;    empowered TacSat 1’s project manager at the Naval Research  Laboratory to make appropriate trade-off decisions to deliver the  satellite on time and within cost; and    helped OFT staff develop an efficient work relationship with the Naval  Research Laboratory team and provided the laboratory with prompt  decisions.
section_title: DOD Is Working on Developing Future TacSats and Low-Cost Launch Vehicles
paragraphs: DOD is currently working on developing three additional TacSat  experiments—along with bus standards—and a low-cost, on-demand  launch vehicle. These efforts are generally in the early stages. DOD  expects to launch TacSat 2—which began as an Air Force science and  technology experiment and was altered to improve upon TacSat 1’s  capability—in May 2007. TacSat 3, which will experiment with imaging  sensors, is in the development phase. TacSat 4, which will experiment  with friendly forces tracking and data communication services, is in the  design phase. Table 1 shows the development cost and schedule estimates  and the target launch date for each satellite.
With TacSat 3, the Air Force began to formalize the process for evaluating  and selecting potential capabilities for the TacSats, leveraging the  experiences from the first two TacSats. The selection process, which  currently takes 3 to 4 months, includes a presentation of capability gaps  and shortfalls from the combatant commands and each branch of the  military, and analyses of the suitability, feasibility, and transferability of  the capabilities deemed the highest priority. According to DOD officials,  this process allows the science and technology community to obtain early  buy-in from the warfighter, thereby increasing the likelihood that  requirements will remain stable and the satellite will have military utility.  Obtaining warfighter involvement in this way represents a new approach  for the TacSat series. See figure 3 for a more complete description of this  evolving process.
The Air Force has also begun to create plans for procuring TacSats for the  warfighter should they prove to have military utility. The Air Force has  developed a vision of creating TacSat reserves that could be deployed on  demand, plans to establish a program office within its Space and Missile  Systems Center, and plans to begin acquiring operational versions of  successful TacSat concepts in 2010.
DOD is also working to develop bus standards. Establishing bus standards  would allow DOD to create a “plug and play” approach to building  satellites—similar to the way personal computers are built. The service  research labs, under the sponsorship of OFT, and the Space and Missile  Systems Center are in the process of developing small bus standards, each  using a different approach. The service labs expect to test some  standardized components on the TacSat 3 bus, and system standards by  prototyping a TacSat 4 bus. The Space and Missile Systems Center is also  proposing to develop three standardized bus models for different-weight  satellites, one of which may be suitable for a TacSat. The service labs  expect to transition bus standards to the Space and Missile Systems  Center in fiscal year 2008, at which time the center will select a final  version for procurement for future TacSats.
Both DOD and private industry are working to develop small, low-cost, on- demand launch vehicles. DOD’s Defense Advanced Research Projects  Agency (DARPA), along with the Air Force, established FALCON, a joint  technology development program to accelerate efforts to develop a launch  vehicle that meets these objectives. Through FALCON, DARPA expects to  develop a vehicle that can send 1,000 pounds to low-earth orbit for less  than $5 million with an operational cost basis of 20 flights per year for   10 years. FALCON is expected to flight-test hypersonic technologies and  be capable of launching small satellites such as TacSats. DARPA is  currently pursuing two candidates for its FALCON launch vehicle— AirLaunch, a company that expects to launch rockets that have been  ejected from the back of a C-17 cargo airplane, and SpaceX, whose two- stage launch vehicle will include the second U.S.-made rocket booster  engine to be developed and flown in more than 25 years, according to the  company’s founder. DARPA could transition the AirLaunch concept to the  Air Force after its demonstration launch in 2008. TacSat 1 is contracted to  launch for about $7 million on SpaceX’s vehicle. In addition, in 2005, the  Air Force began pursuing a hybrid launch vehicle to support tactically and  conventionally deployed satellites. The project is known as Affordable  Responsive Spacelift, or ARES, and the Air Force has obtained internal  approval to build a small-scale demonstrator that would carry satellites  about two to five times larger than TacSats.
section_title: DOD Faces Several Challenges in Pursuing Responsive Tactical Capabilities for Warfighters
paragraphs: DOD has several challenges to overcome in pursuing a responsive tactical  capability for the warfighter. Although DOD and others are working to  develop small, low-cost launch vehicles for placing satellites like the  TacSats into space, such a vehicle has yet to be developed, and TacSat 1  has waited nearly 2 years since its completion to be launched. Transferring  knowledge from the science and technology community to the acquisition  community is also a concern, given that these two communities have not  collaborated well in the past. Further, it may be difficult to secure funding  for future TacSat science and technology projects since DOD allocates the  majority of its research and development money to acquisition programs.  Finally, there is no departmentwide vision or strategy for implementing  this new capability, and the recent loss of leadership makes it uncertain to  what extent efforts to develop low-cost, responsive tactical capabilities  such as TacSats will continue to be pursued.
subsections: section_title: DOD Has Yet to Provide a Low-Cost, Small Launch Vehicle
paragraphs: While DOD has delivered TacSat 1 on time and within budget, the satellite  is not yet operational because it lacks a reliable low-cost—under   $10 million—small launch vehicle to place it in orbit. TacSat 1’s original  launch date was in 2004 on the SpaceX’s first flight of its low-cost small  launch vehicle. However, because of technical difficulties with the launch  vehicle and launch facility scheduling conflicts, the TacSat 1 launch has  been delayed 2 years and more than $2 million has been added to the total  mission costs. SpaceX now plans to use a different small satellite for its  first launch.
Placing satellites in orbit at a low cost has been a formidable task for DOD  for more than two decades because of elusive economies of scale. There is  a strong causal relationship between satellite capabilities and launch lift.  As capabilities and operational life are added, satellites tend to become  heavier, requiring a launch vehicle that can carry a heavier payload. With  longer-lived satellites, fewer launches are needed, making per unit launch  costs high. In addition, the high cost of a large launch vehicle can only be  justified with an expensive, long-living multimission satellite. Ultimately,  the high cost of producing a complex satellite has created a low tolerance  for risk in launching the satellite and a “one shot to get it right” mentality.
Over the past 10 years, DOD and industry have attempted to develop a  low-cost launch vehicle. Three launch vehicles in DOD’s inventory—the  Pegasus, Taurus, and, to some extent, the Minotaur—were designed to  provide space users with a low-cost means of quickly launching small  payloads into low-earth orbit. DOD expected that relatively high launch  rates, from both commercial and government use, would keep costs down,  but the market for these launch vehicles did not materialize. For example,  since its introduction in 1990, Pegasus has launched only 36 times, an  average of 3 launches per year; Taurus has been launched only 7 times  since it was introduced in 1994. The average cost of these launch vehicles  is $16 million to $33 million. To provide another avenue for launching  small satellites, the Air Force has proposed refurbishing part of its fleet of  decommissioned intercontinental ballistic missiles—450 of which have  been dismantled. The cost of retrofitting the missiles and preparing them  for launch is about $18 million to $23 million. However, one Air Force  official questioned whether these vehicles are too large for current  TacSats.
Some new developers in the space industry are cautiously optimistic about  the small satellite market. For example, SpaceX signed seven contracts to  launch various small satellites, including TacSat 1. Despite this optimism,  SpaceX’s first launch of its new vehicle has yet to occur—in part because  it lacks a suitable launch facility. The launch facilities located in the  United States cannot readily accommodate quick-response vehicles.  Vandenberg Air Force Base—one of two major launch sites in the United  States—has lengthy and detailed scheduling processes and strict safety  measures for preparing for and executing a launch, making it difficult to  launch a small satellite within a tight time frame and at a low cost.  SpaceX’s launch of TacSat 1 at Vandenberg was put on hold because of the  potential risks it posed to a billion-dollar satellite that was waiting to be  launched from a nearby pad. In addition, the Air Force licensed the use of  another nearby pad at Vandenberg to a contractor for larger-scale  launches.  Given the proximity of the launch pads, SpaceX’s insurance  premium increased 10-fold, from about $50,000 to as much as $500,000,  which added $2.3 million to TacSat 1’s total mission costs. Because of  these delays, SpaceX decided to carry a different experimental satellite on  its first launch and to use a launch facility on Kwajalein Atoll, in the  Pacific Ocean. The potential effect of changes—such as increased  premiums or the need to transport satellites to distant locations—on  efforts to keep costs low and deliver capabilities to the warfighter sooner  is unknown.
The Air Force is beginning to examine ways to better accommodate a new  generation of quick-response vehicles. For example, Air Force officials are  examining the feasibility of establishing a location on Vandenberg  specifically for these vehicles that is separate from the larger launch  vehicle pads. Officials are also assessing the suitability of other locations,  such as Kodiak Island, for quickly launching small satellites.
section_title: Procurement of TacSats by DOD’s Acquisition Community May Be Hindered by Limited Transfer of Knowledge and Requirements Instability
paragraphs: To achieve a low-cost, on-demand tactical capability for the warfighter,  the TacSat experiments will need to be transitioned into the acquisition  community. We have previously reported that DOD’s acquisition  community has been challenged to maximize the amount of knowledge  transferred from the science and technology community, and that DOD’s  science and technology and acquisition organizations need to work more  effectively together to achieve desired outcomes. Many of the space  programs we reviewed over the past several decades have incurred  unanticipated cost and schedule increases because they began without  knowing whether technologies could work as intended and invariably  found themselves addressing technical problems in a more costly  environment. Although DOD recently developed a space science and  technology strategy to better ensure that labs’ space technology efforts  transition to the acquisition community, the acquisition community  continues to question whether labs adequately understand acquisition  needs in terms of capabilities and time frames. As a result, the acquisition  community would rather use its own contractors to maintain control over  technology development.
According to DOD officials, action has been taken to improve the level of  collaboration and coordination on the TacSat experiments. Officials from  DOD laboratories involved in TacSats and acquisition communities agree  that they are working better together on the experiments than they have  on past space efforts. However, in pursuing a low-cost, on-demand tactical  capability, the science and technology and acquisition communities have  moved forward on somewhat separate tracks, and it is unclear to what  extent the work and knowledge gained by the labs will be leveraged when  the TacSat experiments are transferred to the acquisition community. For  example, the Air Force and Navy labs are working to develop bus  standards for the TacSat experiments that are scheduled to be transitioned  to the Space and Missile Systems Center, the Air Force’s acquisition arm,  in fiscal year 2008. Yet, the Space and Missile Systems Center, working  with the Aerospace Corporation, has proposed three different options for  standardizing the bus. While two of the options are generally larger—and  are intended for larger space assets—one of the proposed designs may be  suitable for TacSats, although it will likely be costlier than a lab-generated  counterpart.
In addition, our past work has shown that DOD’s space programs—as well  as other large DOD programs—have been unable to adequately define  requirements and keep them stable, and seldom achieve a match between  resources and requirements at the start of the acquisition. One factor that  contributes to poorly defined and unstable requirements is that space  acquisition programs have historically attempted to achieve full capability  in a single step and serve a broad base of users, regardless of the design  challenge or the maturity of technologies. Given this track record, some  DOD officials expressed concern over Space and Missile Systems Center’s  ability to adopt the TacSat approach of delivering capabilities that are  good enough to meet a warfighter need within cost and schedule  constraints. Air Force officials identified the center’s organizational  culture of risk avoidance and the acquisition process as two of the most  significant barriers to developing and deploying space systems quickly.
section_title: Short-Term Funding for Upcoming TacSats Uncertain
paragraphs: TacSats 1 and 2 have been fully funded within DOD, and TacSats 3 and   4 were recently funded. However, funding is uncertain for TacSats beyond  3 and 4. While the Congress added funding to DOD’s 2006 budget to  support TacSat efforts, such as developing bus standards, DOD did not  request such funding. According to a DOD official, there would not be an  effort to develop bus standards if funding had not come from the  Congress.
Historically, DOD’s research and development budget has been heavily  weighted to system acquisitions—80 percent of this funding goes to  weapon system programs, compared with 20 percent going to science and  technology. In addition, science and technology funding is spread over  thousands of projects, while funding for weapon system programs is  spread over considerably fewer, larger programs. This funding distribution  can encourage financing technology development in an acquisition  program. However, as we have previously reported, developing  technologies within an acquisition program typically leads to cost and  schedule increases—further robbing the science and technology  community and other acquisition programs of investment dollars.
section_title: Lack of DOD-wide Strategy and Loss of Leadership
paragraphs: DOD currently has no departmentwide strategy for providing a responsive  tactical capability for the warfighter. Without such a strategy, it is  unknown whether and to what degree there may be gaps or overlaps in  efforts. DOD efforts to develop low-cost satellite and launch capabilities  are moving forward under multiple offices at different levels (see table 2).
Since these efforts are occurring simultaneously, it is unclear how and if  they will be used to inform one another. Moreover, there are different  visions for the roles of low-cost, responsive satellites and launch vehicles  in DOD’s overall space portfolio. For example, one Air Force official  stated his office is looking for direction from the Congress on how to  move forward rather than from somewhere within DOD. Further, when  interviewed, other Air Force officials were not in agreement over how the  Air Force’s vision for using TacSats fits in with OFT’s proposed use of this  capability for DOD.
In addition to the lack of a DOD-wide strategy, the recent departure of key  personnel may have created a gap in leadership, making it uncertain to  what extent efforts to develop tactical capabilities such as TacSats will be  pursued. As we reported in November 2005, program success hinges on  whether leaders can make strategic investment decisions and provide  programs with the direction or vision for realizing goals and alternative  ways of meeting those goals.
One official involved in developing the overall architecture described the  pursuit of these capabilities as a “grassroots effort,” underscoring the  importance of having enthusiastic individuals involved in moving it  forward. According to a number of DOD officials, the former OFT director  was widely respected within and outside the agency and served as a  catalyst for transformation across DOD, and was credited with  championing and pursuing innovative concepts that could sustain and  broaden military advantage. With the departure of the OFT director and  other key advocates of the TacSat concept, service lab officials told us  they are concerned about the fate of the TacSat experiments. DOD  officials we spoke with acknowledged that there is no agreement on who  should ultimately be responsible for deciding the direction of the TacSat  experiments and other efforts to develop low-cost responsive tactical  capabilities for the warfighter.
section_title: Experiences with TacSats May Inform Major Space System Acquisitions and Lead to Long-Term Benefits
paragraphs: DOD’s experiences developing a tactical capability for the warfighter  through TacSats may be used to inform the way major space systems are  acquired. Specifically, DOD’s process for developing TacSat 1 reflects best  practices that larger space system programs could employ to achieve  better acquisition outcomes. In addition, some DOD officials believe that  these efforts—focusing on delivering capabilities to the warfighter through  TacSats and small, low-cost launch vehicles—could lead to long-term  benefits, including providing opportunities for major space systems to test  new technologies, enhancing the skills of DOD’s space workforce, and  broadening the space industrial base.
Our past work has shown that commercial best practices—such as  managing requirements, using mature technologies, and developing  technology within the science and technology community—contribute to  successful development outcomes. TacSat 1 confirms that applying these  practices can enable projects to meet cost and schedule targets. While  TacSat 1, as a small experimental satellite with only a few requirements, is  much less complex than a major space system, we have reported that  commercial best practices are applicable to major space system  acquisitions and recommended that DOD implement them for such  acquisitions. Despite our recommendation, DOD’s major space system  acquisitions have yet to consistently apply these best practices.
Manage requirements. DOD’s major space acquisition programs have  typically not achieved a match between requirements and resources  (technology, time, and money) at program start. Historically, these  programs have attempted to satisfy all requirements in a single step,  regardless of the design challenge or the maturity of technologies  needed to achieve the full capability. As a result, these programs’  requirements have tended to be unstable—that is, requirements were  changed, added, or both—which has led to the programs not meeting  their performance, cost, and schedule objectives. We have found that  when resources and requirements are matched before individual  programs are started, programs are more likely to meet their  objectives. One way to achieve this is through an evolutionary  development approach, that is, pursue incremental increases in  capability versus significant leaps.
Use mature technologies. DOD’s major space acquisition programs  typically begin product development before critical technologies are  sufficiently matured, forcing the program to mature technologies after  product development has begun. Our reviews of DOD and commercial  technology development cases indicate that demonstrating a high level  of maturity before new technologies are incorporated into product  development puts those programs in a better position to succeed.
Develop technology within the science and technology environment.
DOD’s space acquisition programs tend to take on technology  development concurrently with product development, increasing the  risk that significant problems will be discovered late in development  and that more time, money, and effort will be needed to fix these  problems. Our reviews have shown that developing technologies  separate from product development greatly minimizes this risk.
DOD officials and industry representatives we spoke with also noted that  some long-term benefits could result from focusing on delivering  capabilities to the warfighter quickly.
First, small, low-cost, responsive satellites like the TacSats could  augment major space systems—provided there is a means to launch the  satellites. Because TacSats do not require significant investment and  are not critical to multiple missions, the consequence of failure of a  TacSat is low. In contrast, major space systems typically are large,  complex, and multimission, and take many years to build and deliver. If  a major space satellite fails, there are significant cost and schedule  consequences. Ultimately, the already long wait time for the warfighter  to receive improved capabilities is extended.
Second, developing small, low-cost launch vehicles could provide an  avenue for testing new technologies in space. According to DOD  officials, less than 20 percent of DOD’s space research and  development payloads make it into space, even while relying heavily on  the National Aeronautics and Space Administration’s Space Shuttle,  which was most recently grounded for 2 ½ years. We recently reported  that DOD’s Space Test Program, which is designed to help the science  and technology community find opportunities to test in space relatively  cost-effectively, has only been able to launch an average of seven  experiments annually in the past 4 years. According to industry  representatives and DOD officials, efforts to develop a small, low-cost  launch vehicle could improve the acquisition process because testing  technologies in an operational environment could lower the risk for  program managers by providing mature technologies that could be  integrated into their acquisition programs.
Third, giving space professionals the opportunity to manage small-scale  projects like TacSats from start to finish may better prepare them for  managing larger, more complex space system acquisitions in the future.  According to Navy and Air Force lab officials, managing the TacSat  experiments has provided hands-on experience with the experiment  from start to finish, unlike the experience provided to program  managers of large systems at the Air Force Space and Missile Systems  Center.
Finally, building low-cost, responsive satellites and launch vehicles  could create opportunities for small, innovative companies to compete  for DOD contracts and thereby increase competition and broaden the  space industrial base. In April 2005, over 50 small companies sent  representatives to the Third Responsive Space Conference, an effort  hosted by a small private launch company. An industry representative  stated that a number of small companies are excited about developing  TacSats and small, low-cost launch vehicles and the potential to garner  future DOD contracts, but he cautioned that it would be important to  maintain a steady flow of work in order to keep staff employed and  preserve in-house knowledge. Other industry representatives told Air  Force officials that they are receiving mixed signals from the  government regarding its commitment to these efforts—there has been  a lot of talk about them, but relatively little funding. In addition,  another industry representative stated that requirements must be  contained; otherwise, costs will increase and eventually squeeze small  companies back out of the business.
section_title: Conclusions
paragraphs: For more than two decades, DOD has invested heavily in space assets to  provide the warfighter with critical information needed to successfully  conduct military operations. Despite this investment, DOD has been  challenged to deliver its major space acquisitions quickly and within  estimated costs. TacSat 1—an experimental satellite—has shown that by  matching user requirements with available resources, using mature  technologies, and developing technologies separate from product  development, new tactical capabilities can be delivered quickly and at a  low cost. By establishing a capabilities selection process, the TacSat  initiative has also helped to ensure that future TacSats will address high- priority warfighter needs. At the same time, the TacSats may demonstrate  an alternative approach to delivering capabilities sooner—that is, using an  incremental approach to providing capabilities, rather than attempting to  achieve the quantum leap in capability often pursued by large space  systems, which leads to late deliveries, cost increases, and a high  consequence of failure. By not optimizing its investment in TacSat and  small launch efforts, DOD may fail to capitalize on a valuable opportunity  to improve its delivery of space capabilities. As long as disparate entities  within DOD continue moving forward without a coherent vision and  sustained leadership for delivering tactical capabilities, DOD will be  challenged to integrate these efforts into its broader national security  strategy.
section_title: Recommendation for Executive Action
paragraphs: To help ensure that low-cost tactical capabilities continue to be developed  and are delivered to the warfighter quickly, we recommend that the  Secretary of Defense assign accountability for developing and  implementing a departmentwide strategy for pursuing low-cost, responsive  tactical capabilities—both satellite and launch—for the warfighter, and  identify corresponding funding.
section_title: Agency Comments
paragraphs: We provided a draft of this report to DOD for review and comment. DOD  concurred with our recommendation and provided technical comments,  which we incorporated where appropriate. DOD’s letter is reprinted as  appendix II.
We plan to provide copies of this report to the Secretary of Defense, the  Secretary of the Air Force, and interested congressional committees. We  will make copies available to others upon request. In addition, the report  will be available on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions concerning this report, please  contact me at (202) 512-4841. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors to the report are Arthur Gallegos, Maricela  Cherveny, Jean Harker, Leslie Kaas Pollock, Noah B. Bleicher, and Karen  Sloan.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the outcomes to date from the TacSat experiments and efforts to  develop small, low-cost launch vehicles, we interviewed Department of  Defense (DOD) officials in the Office of Force Transformation,  Washington, D.C.; Air Force Space Command, Peterson Air Force Base,  Colorado; Space and Missile Systems Center, Los Angeles Air Force Base,  California; Air Force Research Laboratory, Kirtland Air Force Base, New  Mexico, and Wright-Patterson Air Force Base, Ohio; U.S. Naval Research  Laboratory, Washington, D.C.; and the Defense Advanced Research  Projects Agency, Virginia, via written questions and responses. We also  analyzed documents obtained from these officials. In addition, we  interviewed industry representatives involved in developing large space  systems and small commercial launch vehicles.
To understand the challenges to DOD’s efforts and to determine whether  DOD’s experiences with TacSats and small, low-cost launch vehicles could  inform major space system acquisitions, we analyzed a wide body of GAO  and DOD studies that discuss acquisition problems and associated  challenges, including our work on best practices in weapon system  development that we have conducted over the past decade. In addition to  having discussions with officials at the Office of Force Transformation, the  Air Force Space Command, the Space and Missile Systems Center, and the  Air Force and Navy research labs, we spoke with officials from the  National Security Space Office, Virginia, and the Force Structure,  Resources, and Assessment Directorate of the Joint Chiefs of Staff,  Washington, D.C. We conducted our review from June 2005 to March 2006  in accordance with generally accepted government auditing standards.
section_title: Appendix II: Comments from the Department of Defense