Space Acquisitions: DOD Is Overcoming Long-Standing Problems, but Faces Challenges to Ensuring Its Investments Are Optimized
Published: 2013-04-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Each year, DOD spends billions of dollars to acquire space-based capabilities that support military and other government operations. Just a few years ago, the majority of DOD's space programs were characterized by significant cost and schedule growth. In 2012, GAO reported that the worst of those space acquisition problems now appear to be behind the department. While new major satellite acquisitions are facing potential cost growth and schedule slips, they are not as widespread and significant as they were several years ago. However, the department still faces serious challenges, such as the high cost of launching satellites, fragmented satellite control operations, as well as disconnects between fielding satellites and synchronizing ground systems.
To address the progress DOD has made this year, this testimony focuses on (1) the current status and cost of DOD space systems acquisitions, (2) the results of GAO's space system-related reviews this past year, and (3) recent actions taken to address acquisition problems. This testimony is based on previously issued GAO products over the past 5 years, interviews with DOD officials, and an analysis of DOD funding estimates.
GAO is not making recommendations in this testimony. However, in previous reports, GAO has generally recommended that DOD adopt best practices for developing space systems. DOD agreed and is in the process of implementing such practices. DOD agreed with GAO's characterization of recent actions it has taken to improve space acquisitions.
section_title: What GAO Found
paragraphs: Most of the Department of Defense's (DOD) major satellite programs are in mature phases of development, that is, the initial satellites have been designed, fabricated, and launched into orbit while additional satellites of the same design are being produced. For the portfolio of major satellite programs, new cost and schedule growth is not as widespread as it was in prior years, but DOD is still experiencing problems. For example, total program costs have increased approximately $180 million from a baseline of $4.1 billion for one of two satellite programs that are in the earlier phases of acquisition. Though satellite programs are not experiencing problems as widespread as in years past, ground control systems and user terminals in most of DOD's major space system acquisitions are not optimally aligned, leading to underutilized satellites and limited capability provided to the warfighter. For example, the development and fielding of user terminals for a Navy communications satellite program lag behind the launch of new satellites by more than a year. Additionally, the development of ground software needed to extract capabilities of new missile warning satellites is not expected to be complete until at least 2018, even though satellites are being launched. Another acquisition challenge facing DOD is the cost of launching satellites into space, which range from around $100 million to over $200 million per launch.
Recent GAO space system-related reviews highlight other difficulties facing the space community as it has sought to mitigate rising costs and deliver modernized capabilities. For instance, in July 2012 GAO reported that DOD had numerous efforts in progress to address knowledge gaps and data deficiencies in its Evolved Expendable Launch Vehicle acquisition strategy. However, GAO also reported that more action was needed to identify opportunities to leverage the government's buying power through increased efficiencies in launch acquisitions. In April 2013 GAO reported that satellite control networks are fragmented and potentially duplicative. Moreover, GAO found that DOD faced barriers--such as lacking long-term plans and reliable cost data--that complicate its ability to make improvements to its satellite control networks and adopt commercial practices. GAO recommendations included determining business cases for proceeding with either dedicated or shared satellite control networks for future satellite programs and implementing commercial practices to improve DOD satellite control networks.
Congress and DOD continue to take steps towards reforming the defense acquisition system to increase the likelihood that acquisition programs will succeed in meeting planned cost and schedule objectives. For instance, in response to legislation passed in 2009, DOD has taken steps that should help improve the department's acquisition process and create more executable programs, such as developing performance measures to assess acquisition program activities. DOD has also undertaken actions such as chartering senior-level reviews of space programs and participating in governmentwide space councils. The changes DOD has been making to leadership and oversight appear to be increasing senior management attention on space programs, but it is unclear whether the changes will overcome the problems GAO has identified with fragmented leadership in the past.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of Defense’s  (DOD) space systems acquisitions. Each year, DOD spends billions of  dollars to acquire space-related capabilities that support military and other  government operations—such as intelligence, reconnaissance and  surveillance; communications; and homeland security—and to enable  transformation of the way DOD collects and disseminates information. A  single military satellite can cost more than $3 billion to acquire and more  than $100 million to launch into orbit. Complementary systems, such as  ground control software, can also cost billions. Given the expensive  nature of space systems and today’s fiscal environment, it is essential  that DOD carefully manage these programs, apply best practices, and  continually assess ways to reduce costs while maintaining a high degree  of reliability and innovation.
Over the last decade, the majority of DOD’s space acquisition programs  were characterized by significant cost and schedule growth; new  programs were canceled in the face of affordability concerns and other  problems. In 2012, GAO reported that the worst of those space systems  acquisition problems now appear to be behind the department.long plagued by serious cost and schedule overruns are being launched.  And while new space systems acquisition programs are facing potential  cost growth and schedule slips, they are not as widespread and  significant as they were several years ago. Also, to its credit, DOD has  taken an array of actions to reduce risks and strengthen leadership.  However, the Department still faces serious challenges, such as the high  cost of launching satellites, fragmented satellite control operations, as  well as disconnects between fielding satellites and synchronizing ground  systems.
Satellites  My testimony today will focus on (1) the current status and cost of DOD  space systems acquisitions, (2) the results of GAO’s space system- related reviews this past year, and (3) recent actions taken to address  acquisition problems. This testimony is based on GAO reports issued  over the past 5 years on space programs and weapon system acquisition  best practices. It is also based on work performed in support of our  annual weapon system assessments, as well as space-related work in  support of our reports on duplication, overlap, and fragmentation across  the federal government. Finally, this statement is based on updates on  cost increases and investment trends and improvement actions taken  since last year. To conduct these updates, we analyzed DOD funding  estimates for selected major space systems acquisition programs from  fiscal years 2012 through 2017 and interviewed officials from the Office of  the Secretary of Defense. More information on our scope and  methodology is available in our previously-issued reports. The work that  supports this statement was performed in accordance with generally  accepted government auditing standards. Those standards require that  we plan and perform the audit to obtain sufficient, appropriate evidence to  provide a reasonable basis for our findings and conclusions based on our  audit objectives. We believe that the evidence obtained provides a  reasonable basis for our findings and conclusions based on our audit  objectives.
subsections: section_title: Background
paragraphs: DOD has a long history of troubled space systems acquisitions. Over the  past decade, most of the large DOD space systems acquisition programs  collectively experienced billions of dollars in cost increases and delayed  schedules. In particular, a long-standing problem in DOD space systems  acquisitions is that program costs have tended to go up significantly from  initial cost estimates. As shown in figure 1, estimated costs for selected  major space systems acquisition programs have increased by about  $22.6 billion—nearly 230 percent—from fiscal years 2012 through 2017.
The gap between original and current estimates shows that DOD has  fewer dollars available to invest in new programs or add to existing ones.  DOD’s overall level of investment over the five year period decreases  until fiscal year 2014, at which point it levels off. The declining investment  in the later years is the result of mature programs that have planned lower  out-year funding, cancellation of a major space system acquisition  program and several development efforts, and the exclusion of several  space systems acquisition efforts for which total cost data were  unavailable. These efforts include the Joint Space Operations Center  Mission System (JMS), Space Fence, Space Based Space Surveillance  (SBSS) Follow-on, Precision Tracking Space System (PTSS), and  Weather Satellite Follow-on.
We have previously reported that programs have experienced cost  increases and schedule delays that have resulted in potential capability  gaps in missile warning, military communications, and weather  monitoring. For instance, unit costs for one of the most troubled  programs, the Space Based Infrared System (SBIRS) have climbed about  230 percent to over $3 billion per satellite, with the launch of the first  satellite about 9 years later than predicted. Similarly, 8 years after a  development contract for the National Polar-orbiting Operational  Environmental Satellite System (NPOESS) program was awarded in  2002, the cost estimate had more than doubled—to about $15 billion,  launch dates had been delayed by over 5 years, significant functionality  had been removed from the program, and the program’s tri-agency  management structure had proven to be ineffective. In February 2010, it  was announced that the National Oceanic and Atmospheric Agency  (NOAA) and DOD would no longer jointly procure the NPOESS satellite  system and, instead, each agency would undertake separate acquisitions.  Consequently, the risks of gaps in weather satellite monitoring data have  increased. Other programs, such as the Transformational Satellite  Communications System, were canceled several years earlier because  they were found to be too ambitious and not affordable at a time when the  DOD was struggling to address critical acquisition problems elsewhere in  the space systems portfolio.
Our past work has identified a number of causes of acquisition problems,  but several consistently stand out. At a higher level, DOD tended to start  more weapon programs than was affordable, creating a competition for  funding that focused on advocacy at the expense of realism and sound  management. DOD also tended to start its space systems programs  before it had the assurance that the capabilities it was pursuing could be  achieved within available resources and time constraints. For example,  when critical technologies planned for a satellite system are still in  relatively early stages of discovery and invention, there is no way to  accurately estimate how long it would take to design, develop, and build  the system. Finally, programs typically attempted to satisfy all  requirements in a single step, regardless of the design challenges or the  maturity of the technologies necessary to achieve the full capability.  DOD’s preference to make larger, complex satellites that perform a  multitude of missions stretched technology challenges beyond current  capabilities in some cases. In the past, funding instability, poor contractor  oversight, and relaxed quality standards have also contributed to  acquisition problems.
We have also reported that fragmented leadership and lack of a single  authority in overseeing the acquisition of space programs have created  challenges for optimally acquiring, developing, and deploying new space  systems. Past studies and reviews have found that responsibilities for  acquiring space systems are diffused across various DOD organizations,  even though many of the larger programs, such as the Global Positioning  System (GPS) and those to acquire imagery and environmental satellites,  are integral to the execution of multiple agencies’ missions. We reported  that with multiagency space programs, success is often only possible with  cooperation and coordination; however, successful and productive  coordination appears to be the exception and not the rule. This  fragmentation is problematic not only because of a lack of coordination  that has led to delays in fielding systems, but also because no one person  or organization is held accountable for balancing governmentwide needs  against wants, resolving conflicts and ensuring coordination among the  many organizations involved with space systems acquisitions, and  ensuring that resources are directed where they are most needed.
Over the past 5 years, our work has recommended numerous actions that  can be taken to address the problems we identified. Generally, we have  recommended that DOD separate technology discovery from acquisition,  follow an incremental path toward meeting user needs, match resources  and requirements at program start, and use quantifiable data and  demonstrable knowledge to make decisions to move to next phases. We  have also identified practices related to cost estimating, program  manager tenure, quality assurance, technology transition, and an array of  other aspects of acquisition program management that could benefit  space programs.
DOD has generally concurred with our recommendations, and has  undertaken a number of actions to establish a better foundation for  acquisition success. For newer satellite acquisition efforts, DOD has  attempted to incorporate lessons learned from its experiences with earlier  efforts. For example, the GPS III program, which began product  development in 2008, is using a “back to basics” approach, emphasizing  rigorous systems engineering, use of military specifications and  standards, and an incremental approach to providing capability. Thus far,  the work performed on the development of the first two satellites is  costing more than expected—but not on the scale of earlier programs— and its schedule remains on track.
Our prior testimonies have cited an array of actions as well. the Office of the Secretary of Defense created a new office under the  Undersecretary of Defense for Acquisition, Technology and Logistics to  oversee all major DOD space and intelligence related acquisitions and it  began applying its broader weapon system acquisition policy (DOD  Instruction 5000.02, Operation of the Defense Acquisition System (Dec.  8, 2008)) to space systems, instead of allowing a tailored policy for space  that enabled DOD to commit to major investments before knowing what  resources will be required to deliver promised capability. Among other  initiatives, the Air Force undertook efforts to improve cost estimating and  revitalize its acquisition workforce and program management assistance  programs. Further, in 2009, for major weapons programs, Congress  enacted the Weapon Systems Acquisition Reform Act of 2009, which  required greater emphasis on front-end planning and, for example,  refining concepts through early systems engineering, strengthening cost  estimating, building prototypes, holding early milestone reviews, and  developing preliminary designs before starting system development.
section_title: The Current Status and Cost of Space Systems Acquisitions
paragraphs: Most of DOD’s major satellite programs are in mature phases of  acquisition and cost and schedule growth is not as widespread as it was  in prior years. However, the satellites, ground systems, and user  terminals are not optimally aligned and the cost of launching satellites  continues to be expensive.
GAO, Space Acquisitions: DOD Faces Challenges in Fully Realizing Benefits of Satellite  Acquisition Improvements, GAO-12-563T (Washington, D.C.: Mar. 21, 2012); and Space  Acquisitions: DOD Delivering New Generations of Satellites, but Space System  Acquisition Challenges Remain, GAO-11-590T (Washington, D.C.: May 11, 2011).
Most of DOD’s major satellite programs are in mature phases of  acquisition, that is, the initial satellites have been designed, fabricated  and launched into orbit while additional satellites of the same design are  being produced. Only two major satellite programs are in earlier phases  of acquisition—the GPS III program and the PTSS program. For the  portfolio of major satellite programs, new cost and schedule growth is not  as widespread as it was in prior years, but DOD is still experiencing  problems in these programs. For example, though the first two SBIRS  satellites have launched, program officials are predicting a 14 month  delay on the production of the third and fourth geosynchronous earth orbit  (GEO) satellites due in part to technical challenges, parts obsolescence,  and test failures. As we reported in March 2013, program officials are  predicting about a $440 million cost overrun for these satellites. Also,  the work performed to date for development of the first two GPS III  satellites continues to cost more than DOD expected. Since the program  entered system development, total program costs have increased  approximately $180 million. The GPS III program office has attributed this  to a variety of factors, such as inefficiencies in the development of the  satellite bus and the navigation payload. Program officials stated that  the cost growth was partially due to the program’s use of a back to basics  approach, which they stated shifted costs to earlier in the acquisition as a  result of more stringent parts and materials requirements. They anticipate  these requirements will result in fewer problems later in the acquisition.
Table 1 describes the status of the satellite programs we have been  tracking in more detail.
Though satellite programs are not experiencing cost and schedule  problems as widespread as in years past, we have reported that ground  control systems and user terminals in most of DOD’s major space  systems acquisitions are not optimally aligned, leading to underutilized  on-orbit satellite resources and limited capability provided to the  warfighter. For example:
Over 90 percent of the MUOS’s planned capability is dependent on  the development of compatible user terminals. Although the first  MUOS satellite was launched over a year ago, operational testing of  MUOS with production-representative user terminals is not expected  to occur until the second quarter of fiscal year 2014.
The SBIRS program revised its delivery schedule of ground  capabilities to add increments that will provide the warfighter some  capabilities sooner than 2018, but complete and usable data from a  critical sensor will not be available until about 7 years after the  satellite is on orbit.
The Family of Advanced Beyond Line-of-Sight Terminals (FAB-T)  program, which is developing user terminals intended to communicate  with AEHF satellites, has experienced numerous cost and schedule  delays and is currently not synchronized with the AEHF program,  which launched its second satellite last year while the FAB-T program  has yet to deliver any capabilities. Current estimates show that FAB-T  will reach initial operational capability for some requirements in 2019,  about 5 years after AEHF is scheduled to reach its initial operational  capability.
GPS OCX is required for the launch of the first GPS III satellite  because the existing ground control software is not compatible with  the new GPS satellites. Realizing that the new ground control system  would not be delivered in time to launch the first GPS III satellite, the  Air Force added funding to the contract to accelerate development of  the software that can launch and checkout the GPS III satellite,  leaving the other capabilities—like the ability to command and control  the satellite—to be delivered in late 2016. Subsequently, the launch of  the first GPS III satellite has been delayed to May 2015 to better  synchronize with the availability of the launch software.
Though there are inherent difficulties in aligning delivery of satellites,  ground control systems, and user terminals, we reported in 2009 that the  lack of synchronization between segments of space acquisition programs  is largely the result of the same core issues that hamper acquisitions in  general—requirements instability, funding instability, insufficient  technology maturity, underestimation of complexity, and poor contractor  oversight, among other issues. In addition, user terminals are not  optimally aligned because of a lack of coordination and effective oversight  over the many military organizations that either develop user terminals or  have some hand in development. We recommended that the Secretary of  Defense take a variety of actions to help ensure that DOD space systems  provide more capability to the warfighter through better alignment and  increased commonality, and to provide increased insight into ground  asset costs. DOD generally agreed with these recommendations.
Another acquisition challenge facing DOD is the cost of launching  satellites into space. DOD has benefited from a long string of successful  launches, including three military and four intelligence community  satellites this year. However, each launch can range from $100 million to  over $200 million. Additional money is spent to support launch  infrastructure. An analysis we performed this year showed that from fiscal  years 2013 through 2017, the government can expect to spend  approximately $46 billion on launch activities. Meanwhile, we reported in  prior years that too little was known about the factors that were behind  cost and price increases. The Air Force has developed a new launch  acquisition strategy which includes a block buy approach for future  launches. At the same time, it is implementing an effort to introduce new  launch providers. Both efforts are designed to help lower costs for launch,  but they face challenges, which are discussed further in the next section.
section_title: Recent GAO Findings Related to Space Systems Acquisitions
paragraphs: Over the past year, we have reported on DOD’s progress in closing  knowledge gaps in its new Evolved Expendable Launch Vehicle (EELV)  acquisition strategy, DOD’s efforts to introduce new launch providers,  opportunities to help reduce satellite program costs, and the Air Force’s  satellite control operations and modernization efforts with comparisons to  commercial practices. These reports further highlight the successes and  challenges that have faced the space community as it has sought to  mitigate rising costs and deliver modernized capabilities.
subsections: section_title: EELV Acquisition Strategy
paragraphs: We reported in September 2011 that DOD needed to ensure the new  acquisition strategy was based on sufficient information, as there were  significant uncertainties relating to the health of the launch industrial  base, contractor cost or pricing data, mission assurance costs and  activities, numbers of launch vehicles needed, and future engine prices  which were expected to double or triple in the near term. As a result,  DOD was at risk of committing to an acquisition strategy—including an  expensive, multi-billion dollar block buy of launch vehicle booster cores— before it had information essential to ensuring business decisions  contained in the strategy were sound. Among other things, we  recommended DOD assess engine costs and mission assurance  activities, reassess the length of the proposed block buy, and consider  how to address broader launch acquisition and technology development  issues. DOD generally concurred with the recommendations. The Air  Force issued its new EELV acquisition strategy in November 2011.  Following our review, the National Defense Authorization Act for Fiscal  Year 2012 required that DOD report to congressional committees a  description of how it implemented the recommendations contained in our  report and for GAO to assess that information.
We reported in July 2012 that DOD had numerous efforts in progress to  address the knowledge gaps and data deficiencies identified in our  September 2011 report, such as completing or obtaining independent  cost estimates for two EELV engines and completing a study of the liquid  rocket engine industrial base. We reported that officials from DOD, NASA, and NRO had initiated several assessments to obtain needed  information, and had worked closely to finalize new launch provider  certification criteria for national security space launches. However, we  found that more action was needed to ensure that launch mission  assurance activities were not excessive, to identify opportunities to  leverage the government’s buying power through increased efficiencies in  launch acquisitions, and to strategically address longer-term technology  investments. We reported that some information DOD was gathering  could set the stage for longer-term strategic planning for the program,  especially in critical launch technology research and development  decisions and that investing in a longer-term perspective for launch  acquisitions was important to fully leverage the government’s buying  power and maintain a healthy industrial base.
section_title: Launch Services New Entrant Certification Guide
paragraphs: In 2011, the Air Force, National Aeronautics and Space Administration  (NASA), and National Reconnaissance Office (NRO) began implementing  a coordinated strategy—called the Air Force Launch Services New  Entrant Certification Guide (Guide)—to certify new entrants to provide  launch capability on EELV-class launch vehicles. New entrants are  launch companies that are working toward certifying their launch vehicle  capabilities so that they may be allowed to compete with the current sole- source contractor for government launches. Launch vehicle certification is  necessary to ensure that only proven, reliable launch vehicles will be  used to launch government satellites. The House Armed Services  Committee Report accompanying the National Defense Authorization Act  for Fiscal Year 2013 directed GAO to review and analyze the  implementation of the Guide.
In February 2013, we reported that the Air Force based its Guide on  existing NASA policy and procedures with respect to payload risk  classification and launch vehicle certification.Force, NASA, and NRO were working to coordinate and share  information to facilitate launch vehicle certification efforts, but that each  agency would determine for itself when certification had been achieved.  As a result, some duplication and overlap of efforts could occur. We also  found that the Air Force had added other prerequisites to certification for  new entrants that were not captured within the Guide.
section_title: Opportunities to Help Reduce Government Satellite Program Costs
paragraphs: In our April 2013 report on reducing duplication, overlap, and  fragmentation within the federal government, we found that government  agencies, including DOD, could achieve considerable cost savings on  some missions by leveraging commercial spacecraft through innovative  mechanisms. These mechanisms include hosted payload arrangements  where government instruments are placed on commercial satellites, and  ride sharing arrangements where multiple satellites share the same  launch vehicle.
We reported that DOD is among the agencies that are actively using or  beginning to look at these approaches in order to save costs. For  instance, DOD has two ongoing hosted payload pilot missions and has  taken preliminary steps to develop a follow-on effort.that the Commercially Hosted Infrared Payload Flight Demonstration  Program answered the majority of the government’s technical questions  through its commercial partnership, while saving it over $200 million over  a dedicated technical demonstration mission. In addition, DOD is  investigating ride sharing to launch GPS satellites beginning in fiscal year  2017, which could save well over $60 million per launch.
While hosted payloads and ride sharing hold promise for providing lower- cost access to space in the future, we found that there are a variety of  challenges. For instance, government agencies that have traditionally  managed their own space missions face cultural challenges in using  hosted payload arrangements and in November 2010, we found that the  DOD space community is highly risk averse to adopting technologies from  commercial providers that are new to DOD. expressed concerns about using a commercial host for their payloads,  noting that they would lose some control over their missions. DOD  officials noted that their security and mission assurance requirements and  processes may make integrating hosted payloads on commercial  satellites more complicated to manage. Further, agency officials  expressed concerns about scheduling launches and noted that  commercial providers may not be flexible about changing launch dates if  the instruments or satellites experience delays.
See GAO, Space Acquisitions: Challenges in Commercializing Technologies Developed  under the Small Business Innovation Research Program, GAO-11-21 (Washington, D.C.:  Nov. 10, 2010). hosted payloads, actual data on cost savings and cost avoidances should  be more readily available.
section_title: Satellite Control Operations
paragraphs: DOD manages the nation’s defense satellites, which are worth at least  $13.7 billion, via ground stations located around the world. These ground  stations and supporting infrastructure perform, in part, the function of  maintaining the health of the satellite and ensuring it stays in its proper  orbit (activities collectively known as satellite control operations). Some of  DOD’s ground stations are linked together to form networks. The Air  Force Satellite Control Network (AFSCN) is the largest of these networks.  Based on the direction in a House Armed Services Committee Report for  our review and discussions with defense committee staff, we reviewed the Air Force’s satellite control operations and modernization efforts.
We reported this month that DOD’s satellite control networks are  fragmented and potentially duplicative. increasingly deployed standalone satellite control operations networks,  which are designed to operate a single satellite system, as opposed to  shared systems that can operate multiple kinds of satellites. Dedicated  networks can offer many benefits to programs, including possible lower  risks and customization for a particular program’s needs. However, they  can also be more costly and have led to a fragmented, and potentially  duplicative, approach which requires more infrastructure and personnel  than shared operations. We reported that, according to Air Force officials,  DOD has not worked to move its current dedicated operations towards a  shared satellite control network, which could better leverage DOD  investments. We also reported that the AFSCN was undergoing  modernization efforts, but these would not increase the network’s  capabilities. The efforts—budgeted at about $400 million over the next 5  years—primarily focus on sustaining the network at its current level of  capability and do not apply a decade of research recommending more  significant improvements to the AFSCN that would increase its  capabilities.
GAO, Satellite Control: Long-Term Planning and Adoption of Commercial Practices  Could Improve DOD’s Operations, GAO-13-315 (Washington, D.C.: Apr. 18, 2013).
Additionally, we found that commercial practices like network  interoperability, automation, and use of commercial off-the-shelf products  have the potential to increase the efficiency and decrease costs of DOD  satellite control operations. Both DOD and commercial officials we spoke  to agreed that there were opportunities for DOD to increase efficiencies  and lower costs through these practices. Numerous studies by DOD and  other government groups have recommended implementing or  considering these practices, but DOD has generally not incorporated  them into DOD satellite control operations networks.
Finally, we found that DOD faced barriers that complicate its ability to  make improvements to its satellite control networks and adopt  commercial practices. For example, DOD did not have a long-term plan  for satellite control operations; DOD lacked reliable data on the costs of  its current control networks and was unable to isolate satellite control  costs from other expenses; there was no requirement for satellite  programs to establish a business case for their chosen satellite control  operations approach; and even if program managers wanted to make  satellite control operations improvements, they did not have the autonomy  to implement changes at the program level. We concluded that until DOD  begins addressing these barriers, the department’s ability to achieve  significant improvements in satellite control operations capabilities would  be hindered. We recommended that the Secretary of Defense direct  future DOD satellite acquisition programs to determine a business case  for proceeding with either a dedicated or shared network for that  program’s satellite control operations and develop a department-wide  long-term plan for modernizing its AFSCN and any future shared  networks and implementing commercial practices to improve DOD  satellite control networks. DOD agreed with our recommendations.
section_title: Recent Actions Taken to Address Space Systems Acquisition Problems
paragraphs: Congress and DOD continue to take steps towards reforming the defense  acquisition system to increase the likelihood that acquisition programs will  succeed in meeting planned cost and schedule objectives. For example,  in December 2012, we reported that the DOD had taken steps to  implement fundamental Weapon Systems Acquisition Reform Act of 2009  (the Reform Act) provisions, including those for approving acquisition  strategies and better monitoring weapon acquisition programs.,  The  offices established by the Reform Act are in the process of developing,  issuing, and implementing policies in response to the Reform Act’s  provisions. We reported that DOD has taken steps to: develop policy and guidance to the military services for conducting  work in their respective areas, approve acquisition documents prior to milestone reviews, monitor and assess weapon acquisition program activities on a develop performance measures to assess acquisition program  activities.
Fundamentally, these Reform Act provisions should help (1) programs  replace cost and schedule risk with knowledge and (2) set up more  executable programs. Additionally, as part of its Better Buying Power  initiative, DOD in November 2012 issued descriptions of 36 initiatives  aimed at increasing productivity and efficiency in DOD acquisitions.
DOD plans to solicit industry and stakeholder comments on these  initiatives and plans to ultimately provide detailed requirements on  implementing these initiatives to the acquisition workforce.
Further, in January 2013, the Congress passed the National Defense  Authorization Act of 2013, which required that DOD’s Under Secretary of  Defense for Acquisition, Technology and Logistics submit a report on  schedule integration and funding for each major satellite acquisition  program. The report must include information on the segments of the  programs; the amount of funding approved for the program and for each  segment that is necessary for full operational capability of the program;  and the dates by which the program and each segment are anticipated to  reach initial and full operational capability, among other items. If the  program is considered to be non-integrated, DOD must submit the  required report to Congress annually. Tracking the schedules of major  satellite programs and the ground systems and user equipment  necessary to utilize the satellites may help DOD synchronize its systems.
Additionally, officials from the Space and Intelligence Office, within the  Office of Secretary of Defense, told us that DOD has undertaken  additional actions to improve space systems acquisitions since we last  reported on its efforts in March 2012. These actions include chartering  Defense Space Council architecture reviews in key space mission areas  that are ongoing or completed, such as resilient protected, narrowband,  and wideband satellite communications; environmental monitoring;  overhead persistent infrared; and space control, according to these  officials. The architecture reviews are to inform DOD’s programming,  budgeting, and prioritization for the space mission area. According to the  officials, the Defense Space Council has brought a high-level focus on  space issues through active senior-level participation in monthly  meetings. DOD also participates in the newly re-formed Space Industrial  Base Council, which is made up of senior level personnel at agencies  across the federal government that develop space systems. The purpose  of the council is to understand how DOD’s and other agencies’ acquisition  strategies impact the space industrial base. Additionally, according to the  officials, the Office of the Under Secretary of Defense for Acquisition,  Technology and Logistics completed a major study on space acquisition  reform to assess the root causes of poor performance in the space  acquisition enterprise, focusing on the largest areas of cost growth.  Furthermore, the officials stated that they are continuing efforts to buy  blocks of AEHF and SBIRS satellites to realize savings that will be  reinvested in high-priority research and development for space programs  to mitigate the challenges associated with planned use of critical  technologies when a satellite system is in the early stages of  development. The officials stated that these block buys will also  encourage stable production and help to achieve affordability targets  DOD has set for the majority of the large, critical space programs. While  these actions are encouraging, we have not evaluated their effectiveness.
The changes DOD has been making to leadership and oversight appear  to be increasing senior management attention on space programs, but it  is unclear whether the changes will be enough to overcome the problems  we identified with fragmented leadership in the past. We have  consistently found that the lack of a single authority for cross cutting  missions, such as GPS or space situational awareness, has contributed  to disconnects in the delivery of related systems as well as delays in the  development of architectures and other tools important to balancing  wants versus needs. Fragmented leadership has also been a contributing  factor to other challenges we have noted in this statement—increasing  launch service costs, synchronizing ground and satellite systems, and  improving satellite operations. This condition persists. As part of our April  2013 annual report on reducing duplication, overlap, and fragmentation  within the federal government, we reported that the administration has  taken an initial step to improve interagency coordination, but has not fully  addressed the issues of fragmented leadership and a lack of a single  authority in overseeing the acquisition of space programs.
Lastly, the Air Force and other offices within DOD are also considering  different acquisition models for the future, including the use of hosted  payloads as well as developing larger constellations of smaller, less- complex satellites that would require small, less-costly launch vehicles  and offer more resilience in the face of growing threats to space assets.  However, such a transition could also have risk and require significant  changes in acquisition processes, requirements setting, organizational  structures, and culture. The long-standing condition of fragmented  leadership and the risk-averse culture of space could stand in the way of  making such a change.
In conclusion, DOD has made credible progress in stabilizing space  programs. However, there are challenges still to be dealt with, such as  disconnects between the delivery of satellites and their corresponding  ground control systems and user equipment and the rising cost of launch.  The ultimate challenge, however, will be preparing for the future, as  budget constraints will require DOD to make tough tradeoff decisions in  an environment where leadership is fragmented. We look forward to  continuing to work with the Congress and DOD in assessing both today  and tomorrow’s challenges in space acquisition and identifying actions  that can be taken to help meet these challenges.
Chairman Udall, Ranking Member Sessions, this completes my prepared  statement. I would be happy to respond to any questions you and  Members of the Subcommittee may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For further information about this statement, please contact Cristina  Chaplain at (202) 512-4841 or chaplainc@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this statement. Individuals who made key contributions to  this statement include Art Gallegos, Assistant Director; Erin Cohen; Rich  Horiuchi; Jeff Sanders; Roxanna Sun; Bob Swierczek; and Marie Ahearn.
section_title: Related GAO Products
paragraphs: Satellite Control: Long-Term Planning and Adoption of Commercial  Practices Could Improve DOD’s Operations. GAO-13-315.   (Washington, D.C.: April 18, 2013).  2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap,  and Duplication and Achieve Other Financial Benefits. GAO-13-279SP.  (Washington, D.C.: April 9, 2013).
Defense Acquisitions: Assessments of Selected Weapon Programs.  GAO-13-294SP. (Washington, D.C.: March 28, 2013).
High-Risk Series: An Update. GAO-13-283. (Washington, D.C.:   February 2013).
Launch Services New Entrant Certification Guide. GAO-13-317R.  (Washington, D.C.: February 7, 2013).
Evolved Expendable Launch Vehicle: DOD Is Addressing Knowledge  Gaps in Its New Acquisition Strategy. GAO-12-822. (Washington, D.C.:  July 26, 2012).
Environmental Satellites: Focused Attention Needed to Mitigate Program  Risks. GAO-12-841T. (Washington, D.C.: June 27, 2012).
Polar-Orbiting Environmental Satellites: Changing Requirements,  Technical Issues, and Looming Data Gaps Require Focused Attention.  GAO-12-604. (Washington, D.C.: June 15, 2012).
Missile Defense: Opportunities Exist to Strengthen Acquisitions by  Reducing Concurrency and Improving Parts Quality. GAO-12-600T.  (Washington, D.C.: April 25, 2012).
Missile Defense: Opportunity Exists to Strengthen Acquisitions by  Reducing Concurrency. GAO-12-486. (Washington, D.C.: April 20, 2012).
Defense Acquisitions: Assessments of Selected Weapon Programs.  GAO-12-400SP. (Washington, D.C.: March 29, 2012).
Space Acquisitions: DOD Faces Challenges in Fully Realizing Benefits of  Satellite Acquisition Improvements. GAO-12-563T. (Washington, D.C.:  March 21, 2012).  2012 Annual Report: Opportunities to Reduce Duplication, Overlap and  Fragmentation, Achieve Savings, and Enhance Revenue.  GAO-12-342SP. (Washington, D.C.: February 28, 2012).
Evolved Expendable Launch Vehicle: DOD Needs to Ensure New  Acquisition Strategy Is Based on Sufficient Information. GAO-11-641.  (Washington, D.C.: September 15, 2011).
Space Research: Content and Coordination of Space Science and  Technology Strategy Need to Be More Robust. GAO-11-722.  (Washington, D.C.: July 19, 2011).
Space and Missile Defense Acquisitions: Periodic Assessment Needed to  Correct Parts Quality Problems in Major Programs. GAO-11-404.  (Washington, D.C.: June 24, 2011).
Space Acquisitions: DOD Delivering New Generations of Satellites, but  Space System Acquisition Challenges Remain. GAO-11-590T.  (Washington, D.C.: May 11, 2011).
Space Acquisitions: Challenges in Commercializing Technologies  Developed under the Small Business Innovation Research Program.  GAO-11-21. (Washington, D.C.: November 10, 2010).
Global Positioning System: Challenges in Sustaining and Upgrading  Capabilities Persist. GAO-10-636. (Washington, D.C.: September 15,  2010).
Space Acquisitions: DOD Poised to Enhance Space Capabilities but,  Persistent Challenges Remain in Developing Space Systems.   GAO-10-447T. (Washington, D.C.: March 10, 2010).
Defense Acquisitions: Challenges in Aligning Space System  Components. GAO-10-55. (Washington, D.C.: October 29, 2009).
Space Acquisitions: Uncertainties in the Evolved Expendable Launch  Vehicle Program Pose Management and Oversight Challenges.   GAO-08-1039. (Washington, D.C.: September 26, 2008).
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