Defense Acquisitions: Future Combat Systems Challenges and Prospects for Success
Published: 2005-03-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: FCS is the core of Army efforts to create a lighter, more agile, capable force: a $108 billion investment to provide a new generation of 18 manned and unmanned ground vehicles, air vehicles, sensors, and munitions linked by an information network. Although system development and demonstration began in May 2003, the program was restructured in July 2004, including processes to make FCS capabilities available to current forces. GAO has been asked to assess (1) FCS technical and managerial challenges; (2) prospects for delivering FCS within cost and scheduled objectives; and (3) options for proceeding.
section_title: What GAO Found
paragraphs: In its unprecedented complexity, FCS confronts the Army with significant technical and managerial challenges in its requirements, development, finance, and management. Technical challenges include the need for FCS vehicles to be smaller, weigh less, and be as lethal and survivable as current vehicles, which requires (1) a network to collect and deliver vast amounts of intelligence and communications information and (2) individual systems, such as manned ground vehicles, that are as complex as fighter aircraft. Its cost will be very high: its first increment--enough to equip about 1/3 of the force--will cost over $108 billion, with annual funding requests running from $3 billion to $9 billion per year. The program's pace and complexity also pose significant management challenges. The Army is using a Lead System Integrator to manage FCS and is using a contracting instrument--Other Transaction Agreement--that allows for more flexible negotiation of roles, responsibilities, and rights with the integrator. The FCS is at significant risk for not delivering required capability within budgeted resources. Currently, about 9.5 years is allowed from development start to production decision. DOD typically needs this period of time to develop a single advanced system, yet FCS is far greater in scope. The program's level of knowledge is far below that suggested by best practices or DOD policy: Nearly 2 years after program launch and with $4.6 billion invested, requirements are not firm and only 1 of over 50 technologies are mature. As planned, the program will attain the level of knowledge in 2008 that it should have had in 2003, but things are not going as planned. Progress in critical areas--such as the network, software, and requirements--has in fact been slower, and FCS is therefore likely to encounter problems late in development, when they are very costly to correct. Given the scope of the program, the impact of cost growth could be dire. To make FCS an effective acquisition program different approaches must be considered, including (1) setting the first stage of the program to demonstrate a worthwhile military capability, mature technology, and firm requirements; and (2) bundling its other capabilities into advanced technology demonstrators until they can be put in a future stage, which will provide guidance for decisions on requirements, lower the cost of development, and make for more reasonable cost and schedule estimates for future stages.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of the Army’s  Future Combat Systems (FCS), a networked family of weapons and other  systems. FCS is the centerpiece of the Army’s plan to transform to a  lighter, more agile, and more capable force. It consists of an information  network linking a new generation of 18 manned and unmanned ground  vehicles, air vehicles, sensors, and munitions. FCS began system  development and demonstration in May 2003. In July 2004, the Army  announced a major restructuring of the program, including plans for  transitioning FCS capabilities to current forces. Total costs of the  restructured program have not yet been estimated but will be at least $108  billion, in fiscal year 2005 dollars. The fiscal year 2005 budget provides  $2.8 billion in research and development funds for FCS; the fiscal year  2006 budget requests an increase to $3.4 billion.
Today, I would like to discuss (1) the technical and managerial challenges  of the FCS program; (2) the prospects for delivering FCS capabilities  within cost and scheduled objectives; and (3) considerations on how to  proceed.
subsections: section_title: Background
subsections: section_title: Army Transformation and the FCS Concept
paragraphs: A decade after the cold war ended, the Army recognized that its combat  force was not well suited to perform the operations it faces today and is  likely to face in the future. The Army’s heavy forces had the necessary  firepower but required extensive support and too much time to deploy. Its  light forces could deploy rapidly but lacked firepower. To address this  mismatch, the Army decided to radically transform itself into a new  “Future Force.”
The Army expects the Future Force to be organized, manned, equipped,  and trained for prompt and sustained land combat. This translates into a  force that is responsive, technologically advanced, and versatile. These  qualities are intended to ensure the Future Force’s long-term dominance  over evolving, sophisticated threats. The Future Force is to be offensively  oriented and will employ revolutionary operational concepts, enabled by  new technology. This force is to fight very differently than the Army has in  the past, using easily transportable lightweight vehicles, rather than  traditional heavily armored vehicles. The Army envisions a new way of  fighting that depends on networking the force, which involves linking  people, platforms, weapons, and sensors seamlessly together.
The Army has determined that it needs more agile forces. Agile forces  would possess the ability to seamlessly and quickly transition among  various types of operations from support operations to warfighting and  back again. They would adapt faster than the enemy thereby denying it the  initiative. Agile forces would allow commanders of small units the  authority and high quality information to act quickly to respond to  dynamic situations.
To be successful, therefore, the transformation must include more than  new weapons. It must be extensive, encompassing tactics and doctrine as  well as the very culture and organization of the Army.
section_title: The FCS Solution
paragraphs: FCS will provide the majority of weapons and sensor platforms that  comprise the new brigade-like modular units of the Future Force known  as Units of Action. Each unit is to be a rapidly deployable fighting  organization about the size of a current Army brigade but with the combat  power and lethality of the current larger division. The Army also expects  FCS-equipped units of action to provide significant warfighting capabilities  to the overall joint force. The Army is reorganizing its current forces into  modular, brigade-based units akin to units of action.
FCS is a family of 18 manned and unmanned ground vehicles, air vehicles,  sensors, and munitions that will be linked by an information network.  These include, among other things, eight new ground vehicles to replace  current vehicles such as tanks, infantry carriers and self-propelled  howitzers, four different unmanned aerial vehicles, several unmanned  ground vehicles, and attack missiles that can be positioned in a box-like  structure.
The manned ground vehicles are to be a fraction of the weight of current  weapons such as the Abrams tank and Bradley fighting vehicle, yet are to  be as lethal and survivable. At a fundamental level, the FCS concept is  replacing mass with superior information; that is, to see and hit the enemy  first, rather than to rely on heavy armor to withstand a hit.
The essence of the FCS concept itself—to provide the lethality and  survivability of the current heavy force with the sustainability and  responsiveness of a force that weighs a fraction as much—has the intrinsic  attraction of doing more with less. The FCS concept has a number of  progressive features, which demonstrate the Army’s desire to be proactive  in its approach to preparing for potential future conflicts and its  willingness to break with tradition in developing an appropriate response  to the changing scope of modern warfare. If successful, the program will  leverage individual capabilities of weapons and platforms and will  facilitate interoperability and open system designs. This is a significant  improvement over the traditional approach of building superior individual  weapons that must be netted together after the fact. Also, the system-of- systems network and weapons could give managers the flexibility to make  best value tradeoffs across traditional program lines. This transformation  of the Army, both in terms of operations and equipment, is underway with  the full cooperation of the Army warfighter community. In fact, the  development and acquisition of FCS is being accomplished using a  collaborative relationship between the developer (program manager), the  contractor, and the warfighter community.
subsections: section_title: FCS Program Has Been Restructured During the Last Year
paragraphs: The FCS program was approved to start system development and  demonstration in May 2003. On July 21, 2004, the Army announced its  plans to restructure the program. The restructuring responded to direction  from the Army Chief of Staff and addresses risks and other issues  identified by external analyses. Its objectives include:    Spinning off ripe FCS capabilities to current force units;    Meeting Congressional language for fielding the Non-Line of Sight Cannon;    Retaining the system-of-systems focus and fielding all 18 systems;   Increasing the overall schedule by 4 years; and    Developing a dedicated evaluation unit to demonstrate FCS capabilities  The program restructuring contained several features that reduce risk— adding four additional years to develop and mature the manned ground  vehicles; adding demonstrations and experimentation; and establishing an  evaluation unit to demonstrate FCS capabilities. The program  restructuring also adds scope to the program by reintroducing four  deferred systems, adding four discrete spirals of FCS capabilities to the  current force, and accelerating the development of the network. About  $6.1 billion was added to the system development and demonstration  contract and the Army has recently announced that the detailed revision of  the contract has been completed.
section_title: Objectives, Scope, and Methodology
paragraphs: To develop the information on whether the FCS program was following a  knowledge-based acquisition strategy and the current status of that  strategy, we interviewed officials of the Office of the Under Secretary of  Defense (Acquisition, Technology, and Logistics); the Secretary of  Defense’s Cost Analysis Improvement Group; the Assistant Secretary of  the Army (Acquisition, Logistics, and Technology); the Army’s Training  and Doctrine Command; Surface Deployment and Distribution Command;  the Program Manager for the Unit of Action (previously known as Future  Combat Systems); the Future Combat Systems Lead Systems Integrator;  and LSI One Team contractors. We reviewed, among other documents, the  Future Combat Systems’ Operational Requirements Document, the  Acquisition Strategy Report, the Baseline Cost Report, the Critical  Technology Assessment and Technology Risk Mitigation Plans, and the  Integrated Master Schedule. We attended the FCS Management Quarterly  Reviews, In-Process Reviews, and Board of Directors Reviews.
In our assessment of the FCS, we used the knowledge-based acquisition  practices drawn from our large body of past work as well as DOD’s  acquisition policy and the experiences of other programs. We discussed  the issues presented in this statement with officials from the Army and the  Secretary of Defense, and made several changes as a result. We performed  our review from May 2004 to March 2005 in accordance with generally  accepted auditing standards.
section_title: The FCS Program Is An Unprecedented Challenge
paragraphs: The FCS program faces significant challenges in setting requirements,  developing systems, financing development, and managing the effort. It is  the largest and most complex acquisition ever attempted by the Army.
subsections: section_title: The Requirements Challenge
paragraphs: The Army wants the FCS-equipped unit of action to be as lethal and  survivable as the current heavy force, but to be significantly more  responsive and sustainable. For the unit of action to be lethal, it must have  the capability to address the combat situation, set conditions, maneuver to  positions of advantage, and to engage enemy formations at longer ranges  and with greater precision than the current force. To provide this level of  lethality and reduce the risk of detection, FCS must provide high single- shot weapon effectiveness. To be as survivable as the current heavy force,  the unit of action must find and kill the enemy before being seen and  identified. The individual FCS systems will also rely on a layered system of  protection involving several technologies that lowers the chances of a  vehicle or other system being seen and hit by the enemy. To be responsive,  the unit of action must be able to rapidly deploy anywhere in the world  and be rapidly transportable by various means—particularly by the C-130  aircraft—and ready to fight upon arrival. To facilitate rapid  transportability on the battlefield, FCS vehicles are to match the weight  and size constraints of the C-130 aircraft. The unit of action is to be  capable of sustaining itself for periods of 3 to 7 days depending on the  level of conflict—necessitating a small logistics footprint. This requires  subsystems with high reliability and low maintenance, reduced demand  for fuel and water, highly effective weapons, and a fuel-efficient engine.
Meeting all these requirements is unprecedented not only because of the  difficulty each represents individually, but because the solution for one  requirement may work against another requirement. For example,  solutions for lethality could increase vehicle weight and size. Solutions for  survivability could increase complexity and lower reliability. It is the  performance of the information network that is the linchpin for meeting  the other requirements. It is the quality and speed of the information that  will enable the lethality and survivability of smaller vehicles. It is smaller  vehicles that enable responsiveness and sustainability.
section_title: The Development Challenge
paragraphs: In the Army’s own words, the FCS is “the greatest technology and  integration challenge the Army has ever undertaken.” It intends to  concurrently develop a complex, system-of-systems–an extensive  information network and 18 major weapon systems. The sheer scope of  the technological leap required for the FCS involves many elements. For  example:    First-of-a-kind network will have to be developed that will entail  development of unprecedented capabilities—on-the-move  communications, high-speed data transmission, dramatically increased  bandwidth, and simultaneous voice, data and video;   The design and integration of 18 major weapon systems or platforms has  to be done simultaneously and within strict size and weight limitations;   At least 53 technologies that are considered critical to achieving FCS’  critical performance capabilities will need to be matured and integrated  into the system-of-systems;    Synchronizing the development, demonstration, and production of as  many as 157 complementary systems with the FCS content and schedule.
This will also involve developing about 100 network interfaces so the FCS  can be interoperable with other Army and joint forces; and   At least an estimated 34 million lines of software code will need to be  generated (about double that of the Joint Strike Fighter, which had been  the largest defense undertaking in terms of software to be developed).
section_title: The Financial Challenge
paragraphs: Based on the restructured program, the FCS program office initially  estimated that FCS will require $28.0 billion for research and development  and around $79.9 billion for the procurement of 15 units of action. The  total program cost is expected to be at least $107.9 billion. These are fiscal  year 2005 dollars. Since this estimate, the Army has released an updated  research and development cost estimate of $30.3 billion in then-year  dollars. An updated procurement estimate is not yet available. The Army is  continuing to refine these cost estimates. As estimated, the FCS will  command a significant share of the Army’s acquisition budget, particularly  that of ground combat vehicles, for the foreseeable future. In fiscal year  2006, the FCS budget request of $3.4 billion accounts for 65 percent of the  Army’s proposed spending on programs in system development and  demonstration and 35 percent of that expected for all research,  development, test and evaluation activities.
As the FCS begins to command large budgets, it will compete with other  major financial demands. Current military operations, such as in  Afghanistan and Iraq, require continued funding. Since September 2001,  DOD has needed over $240 billion in supplemental appropriations to  support the global war on terrorism. Current operations are also causing  faster wear on existing weapons, which will need refurbishment or  replacement sooner than planned. The equipment used by the current  force, such as Abrams tanks and Bradley Fighting Vehicles, is expected to  remain in the active inventory until at least 2030. The cost to upgrade and  maintain this equipment over that length of time has not been estimated  but could be substantial. Also, the cost of converting current forces to new  modular, brigade-based units is expected to be at least $48 billion. Further,  FCS is part of a significant surge in the demand for new weapons. Just 4  years ago, the top 5 weapon systems cost about $280 billion; today, in the  same base year dollars, the top 5 weapon systems cost about $521 billion.  If megasystems like FCS are estimated and managed with traditional  margins of error, the financial consequences are huge, especially in light of  a constrained discretionary budget.
section_title: The Management Challenge
paragraphs: The Army has employed a management approach that centers on a Lead  System Integrator (LSI) and a non-standard contracting instrument, known  as an Other Transaction Agreement (OTA). The Army advised us that it did  not believe it had the resources or flexibility to use its traditional  acquisition process to field a program as complex as FCS under the  aggressive timeline established by the then-Army Chief of Staff.
Although there is no complete consensus on the definition of LSI, those we  are aware of appear to be prime contractors with increased program  management responsibilities. These responsibilities have included greater  involvement in requirements development, design and source selection of  major system and subsystem subcontractors. The government also has  used the LSI approach on programs that require system-of-systems  integration.
The Army selected Boeing as the LSI for the FCS system development and  demonstration in May 2003. The Army and Boeing established a One-Team  management approach with several first tier subcontractors to execute the  program. According to the Army, Boeing has awarded 20 of 24 first tier  subcontracts, to 17 different subcontractors. The One-Team members and  their responsibilities are depicted in table 1.
Boeing was awarded the LSI role under an OTA which is not subject to the  Federal Acquisition Regulation (FAR). Consequently, when using an OTA,  DOD contracting officials have considerable flexibility to negotiate the  agreement terms and conditions. This flexibility requires DOD to use good  business sense and to incorporate appropriate safeguards to protect the  government’s interests. The OTA used for FCS includes several FAR or  Defense FAR Supplement clauses, many of which flow down to  subcontracts. The value of the agreement between the Army and Boeing is  approximately $21 billion. It is a cost reimbursement contract.
Congress has incrementally expanded the use and scope of other  transaction authority since first authorizing its use more than a decade  ago. In 1989, Congress gave DOD, acting through the Defense Advanced  Research Projects Agency, authority to temporarily use other transactions  for basic, applied, and advanced research projects. In 1991, Congress  made this authority permanent and extended it to the military  departments. In 1993, Congress enacted Section 845 of the National  Defense Authorization Act for Fiscal Year 1994, which provided DARPA  with authority to use, for a 3-year period, other transactions to carry out  prototype projects directly relevant to weapons or weapon systems  proposed to be acquired or developed by DOD. Subsequent amendments  have extended this authority to the military departments and other defense  agencies. Most recently, the National Defense Authorization Act for Fiscal  Year 2004 extended the prototype project authority until 2008 and  provided for a pilot program to transition some other transaction  prototype projects to follow-on production contracting.
According to program officials, under the LSI and OTA arrangement on  FCS, the Army primarily participates in the program through Integrated  Product Teams that are used to make coordinated management decisions  in the program about issues related to requirements, design, horizontal  integration and source selection.
section_title: FCS Remains At Risk of Not Delivering Planned Capability Within Estimated Resources
paragraphs: During the past year, the FCS underwent a significant restructuring, which  added 4 years to the schedule for reducing risk, increasing the  demonstration of FCS capabilities, and harvesting successes for the  current force. Yet, even with these improvements, the FCS is still at  significant risk for not delivering planned capability within budgeted  resources. This risk stems from the scope of the program’s technical  challenges and the low level of knowledge demonstrated thus far.
subsections: section_title: High Levels of Demonstrated Knowledge Are Key to Getting Desired Outcomes
paragraphs: Our previous work has shown that program managers can improve their  chances of successfully delivering a product if they employ a knowledge- based decision-making process. We have found for a program to deliver a  successful product within available resources, managers should build high  levels of demonstrated knowledge before significant commitments are  made. In essence, knowledge supplants risk over time. This building of  knowledge can be described in three levels that should be attained over  the course of a program:    First, at program start, the customer’s needs should match the developer’s  available resources—mature technologies, time, and funding. An  indication of this match is the demonstrated maturity of the technologies  needed to meet customer needs.
Second, about midway through development, the product’s design should  be stable and demonstrate that it is capable of meeting performance  requirements. The critical design review is the vehicle for making this  determination and generally signifies the point at which the program is  ready to start building production-representative prototypes.
Third, by the time of the production decision, the product must be shown  to be producible within cost, schedule, and quality targets and have  demonstrated its reliability. It is also the point at which the design must  demonstrate that it performs as needed through realistic system level  testing.
The three levels of knowledge are related, in that a delay in attaining one  delays those that follow. Thus, if the technologies needed to meet  requirements are not mature, design and production maturity will be  delayed. On the successful commercial and defense programs we have  reviewed, managers were careful to conduct development of technology  separately from and ahead of the development of the product. For this  reason, the first knowledge level is the most important for improving the  chances of developing a weapon system within cost and schedule  estimates. DOD’s acquisition policy has adopted the knowledge-based  approach to acquisitions. DOD policy requires program managers to  provide knowledge about key aspects of a system at key points in the  acquisition process. Program managers are also required to reduce  integration risk and demonstrate product design prior to the design  readiness review and to reduce manufacturing risk and demonstrate  producibility prior to full-rate production.
DOD programs that have not attained these levels of knowledge have  experienced cost increases and schedule delays. We have recently  reported on such experiences with the F/A-22, the Joint Strike Fighter, the  Airborne Laser, and the Space Based Infrared System High. For example,  the $245 billion Joint Strike Fighter’s acquisition strategy does not  embrace evolutionary, knowledge-based techniques intended to reduce  risks. Key decisions, such as its planned 2007 production decision, are  expected to occur before critical knowledge is captured. If time were  taken now to gain knowledge it could avoid placing sizable investments in  production capabilities at risk of expensive changes.
section_title: FCS Strategy Will Not Demonstrate High Levels of Knowledge Consistent With DOD Policy or Best Practices
paragraphs: The FCS program has proceeded with low levels of knowledge. In fact,  most of the activities that have taken place during its first 2 years should  have been completed before starting system development and  demonstration. It may be several years before the program reaches the  level of knowledge it should have had at program start. Consequently, the  Army is depending on a strategy that must concurrently define  requirements, develop technology, design products, and test products.  Progress in executing the program thus far does not inspire confidence:  the requirements process is taking longer that planned, technology  maturity may actually have regressed, and a program that is critical for the  FCS network has recently run into problems and has been delayed. Figure  2 depicts how the FCS strategy compares with the best practices  described above.
The white space in figure 2 suggests the knowledge between best practices  and the FCS program. Clearly, the program has a tremendous amount of  ground to cover to close its knowledge gaps to the point that it can hold  the design reviews as scheduled and make decisions on building  prototypes, testing, and beginning production with confidence.
Several other observations can be made from the figure:    A match between mature technologies and firm requirements was not  made at program start.
The preliminary design review, which ideally is conducted near the  program start decision to identify disconnects between the design and the  requirements, will be held 5 years into the program.
The critical design review, normally held midway through development, is  scheduled to take place in the seventh year of a nine-year program.
The first test of all FCS elements will take place after the production  decision.
subsections: section_title: Requirements and Resources Gap
paragraphs: The FCS program entered system development and demonstration without  demonstrating a match between resources and requirements, and will not  be in a position to do so for a number of years. The Army now expects to  have a reasonably well defined set of requirements by the October 2006  interim preliminary design review. The Army has been working diligently  to define these requirements, but the task is very difficult given that there  are over 10,000 specific system-of-systems requirements that must  collectively deliver the needed lethality, survivability, responsiveness, and  sustainability. For example, the Army is conducting at least 120 studies to  identify the design tradeoffs necessary before firming up requirements. As  of December 2004, 69 remain to be completed. Those to be completed will  guide key decisions on the FCS, such as the weight and lethality required  of the manned ground vehicles.
On the resources side, last year we reported that 75 percent of FCS  technologies were immature when the program started in 2003; a  September 2004 independent assessment has since shown that only one of  the more than 50 FCS critical technologies is fully mature. The Army  employed lower standards than recommended by best practices or DOD  policy in determining technologies acceptable for the FCS program. As a  result, it will have to develop numerous technologies on a tight schedule  and in an environment that is designed for product development. If all  goes as planned, the Army estimates that most of the critical technologies  will reach a basic level of maturity by the 2010 Critical Design Review and  full maturity by the production decision. This type of technical knowledge  is critical to the process of setting realistic requirements, which are  needed now. In addition, a program critical to the FCS network and a key  element of FCS’ first spiral, the Joint Tactical Radio System, recently  encountered technical problems and may be delayed 2 years. We provide  more detail on this program later.
section_title: Late Demonstrations of FCS Performance Could Prove Costly
paragraphs: The FCS strategy will result in much demonstration of actual performance  late in development and early in production, as technologies mature,  prototypes are tested, and the network and systems are brought together  as a system-of-systems. A good deal of the demonstration of the FCS  design will take place over a 3-year period, starting with the critical design  review in 2010 through the first system level demonstration of all 18 FCS  components and the network in 2013. This compression is due to the  desired fielding date of 2014, coupled with the late maturation of  technologies and requirements previously discussed.
Ideally, a critical design review should be held midway through  development—around 2008 for FCS—to confirm the design is stable  enough to build production representative prototypes for testing. DOD  policy refers to the work up to the critical design review as system  integration, during which individual components of a system are brought  together. The policy refers to the work after the critical design review as  system demonstration, during which the system as a whole demonstrates  its reliability as well as its ability to work in the intended environment. The  building of production representative prototypes also provides the basis to  confirm the maturity of the production processes. For the FCS, the critical  design review will be held just 2 years before the production decision. The  FCS program is planning to have prototypes available for testing prior to  production but they will not be production-representative prototypes. The  Army does not expect to have even a preliminary demonstration of all  elements of the FCS system-of-systems until sometime in 2013, the year  after the production decision.
This makes the program susceptible to “late cycle churn,” a condition that  we reported on in 2000. Late-cycle churn is a phrase private industry has  used to describe the efforts to fix a significant problem that is discovered  late in a product’s development. Often, it is a test that reveals the problem.  The “churn” refers to the additional—and unanticipated—time, money,  and effort that must be invested to overcome the problem. Problems are  most serious when they delay product delivery, increase product cost, or  “escape” to the customer. The discovery of problems in testing conducted  late in development is a fairly common occurrence on DOD programs, as  is the attendant late-cycle churn. Often, tests of a full system, such as  launching a missile or flying an aircraft, become the vehicles for  discovering problems that could have been found out earlier and corrected  less expensively. When significant problems are revealed late in a weapon  system’s development, the reaction—or churn—can take several forms:  extending schedules to increase the investment in more prototypes and  testing, terminating the program, or redesigning and modifying weapons  that have already made it to the field. While DOD has found it acceptable  to accommodate such problems over the years, this will be a difficult  proposition for the FCS given the magnitude of its cost in an increasingly  competitive environment for investment funds.
The Army has made some concrete progress in building some of the  foundation of the program that will be essential to demonstrating  capabilities. For example, the System-of-Systems Integration Lab—where  the components and systems will be first tested—has been completed.  Initial versions of the System-of-Systems Common Operating  Environment, the middleware that will provide the operating system for  FCS software, have been released. Several demonstrations have taken  place, including the Precision Attack Munition, the Non-Line of Sight  Cannon, and several unmanned aerial vehicles.
The Army has embarked on an impressive plan to mitigate risk using  modeling, simulation, emulation, hardware in the loop, and system  integration laboratories throughout FCS development. This is a credible  approach designed to reduce the dependence on late testing to gain  valuable information about design progress. However, on a first-of-a-kind  system like the FCS that represents a radical departure from current  systems, actual testing of all the components integrated together is the  final proof that the system works both as predicted and as needed.
section_title: Examples of Execution Challenges for Two Key FCS Elements
paragraphs: The risks the FCS program faces in executing the acquisition strategy can  be seen in the information network and the manned ground vehicles.  These two elements perhaps represent the long poles in the program and  upon which the program’s success depends.
subsections: section_title: Network
paragraphs: The Joint Tactical Radio System (JTRS) and Warfighter Information  Network-Tactical (WIN-T) are central pillars of the FCS network. If they  do not work as intended, battlefield information will not be sufficient for  the Future Force to operate effectively. They are separate programs from  the FCS, and their costs are not included in the costs of the FCS. Both  JTRS and WIN-T face significant technical challenges and aggressive  schedules, which threaten the schedule for fielding Future Force  capabilities and make their ultimate ability to perform uncertain.
JTRS is a family of radios that is to provide the high capacity, high-speed  information link to vehicles, weapons, aircraft, and soldiers. Because they  are software-based, they can also be reprogrammed to communicate with  the variety of radios currently in use. JTRS is to provide the warfighter  with the capability to access maps and other visual data, communicate on- the-move via voice and video with other units and levels of command, and  obtain information directly from battlefield sensors. JTRS can be thought  of as the information link or network to support FCS units of action and  the combat units on the scene that are engaged directly in an operation. In  particular, its wideband networking waveform provides the “pipe” that will  enable the FCS vehicles to see and strike first and avoid being hit. The  WIN-T program is to provide the information network for higher military  echelons. WIN-T will consist of ground, airborne, and space-based assets  within a theater of operations for Army, joint, and allied commanders and  provide those commanders with access to intelligence, logistics, and other  data critical to making battlefield decisions and supporting battlefield  operations. This is information the combat units can access through WIN- T developed equipment and JTRS.
The JTRS program to develop radios for ground vehicles and helicopters— referred to as Cluster 1—began system development in June 2002 with an  aggressive schedule, immature technologies, and lack of clearly defined  and stable requirements. These factors have contributed to significant  cost, schedule, and performance problems from which the program has  not yet recovered. The Army has not been able to mature the technologies  needed to provide radios that both generate sufficient power as well as  meeting platform size and weight constraints. Changes in the design are  expected to continue after the critical design review, and unit costs may  make the radios unaffordable in the quantities desired. Given these  challenges, the Army has proposed delaying the program 24 months and  adding $458 million to the development effort. However, before approving  the restructure, the Office of the Secretary of Defense directed a partial  work stoppage, and the program is now focusing its efforts on a scheduled  operational assessment of the radio’s functionality to determine the future  of the program. Consequently, the radio is not likely to be available for the  first spiral of the FCS network, slated for fiscal year 2008, and surrogate  radios may be needed to fill the gap.
A second JTRS program, to develop small radios including those that  soldiers will carry (referred to as Cluster 5), also entered system  development with immature technologies, lack of well-defined  requirements, and faces even greater technical challenges due to the  smaller size, weight, power, and large data processing requirements for the  radios. For example, the Cluster 5 program has a requirement for a  wideband networking waveform despite its demanding size and power  constraints. In addition, the program was delayed in starting system  development last year because of a contract bid protest. Consequently, the  Cluster 5 radios are not likely to be available for the first FCS spiral either.  The Army has acknowledged that surrogate radios and waveforms may be  needed for the first spiral of FCS.
The WIN-T program also began with an aggressive acquisition schedule  and immature technologies that are not scheduled to mature until after  production begins. Backup technologies have been identified, but they  offer less capability and most are immature as well. In addition, the  schedule leaves little room for error correction and rework that may  hinder successful cost, schedule and performance outcomes. More  recently, the program strategy was altered to identify a single architecture  as soon as possible and to deliver networking and communications  capabilities sooner to meet near term warfighting needs. Specifically, the  Army dropped its competitive strategy and is now having the two  contractors work together to develop the initial network architecture. A  plan for how to develop and field capabilities sooner is still to be  determined.
section_title: Manned Ground Vehicles
paragraphs: FCS includes eight manned ground vehicles, which require critical  individual and common technologies to meet required capabilities. For  example, the Mounted Combat System will require, among other new  technologies, a newly developed lightweight weapon for lethality; a hybrid  electric drive system and a high-density engine for mobility; advanced  armors, an active protection system, and advanced signature management  systems for survivability; a Joint Tactical Radio System with the wideband  waveform for communications and network connection; a computer- generated force system for training; and a water generation system for  sustainability. At the same time, concepts for the manned ground vehicles  have not been decided and are awaiting the results of trade studies that  will decide critical design points such as weight and the type of drive  system to be used. Under other circumstances, each of the eight manned  ground systems would be a major defense acquisition program on par with  the Army’s past major ground systems such as the Abrams tank, the  Bradley Fighting Vehicle, and the Crusader Artillery System. As such, each  requires a major effort to develop, design, and demonstrate the individual  vehicles.
Developing these technologies and integrating them into vehicles is made  vastly more difficult by the Army’s requirement that the vehicles be  transportable by the C-130 cargo aircraft. However, the C-130 can carry the  FCS vehicles’ projected weight of 19 tons only 5 percent of the time. In  2004, GAO reported a similar situation with the Stryker vehicles. The 19- ton weight of these vehicles significantly limits the C-130’s range and the  size of the force that can be deployed. Currently, FCS vehicle designs are  estimated at over 25 tons. To meet even this weight, the advanced  technologies required put the sophistication of the vehicles on a par with  fighter aircraft, according to some Army officials. This is proving an  extremely difficult requirement to meet without sacrificing lethality,  survivability, and sustainability. Currently, program officials are  considering other ways to meet the C-130 weight requirement, such as  transporting the vehicles with minimal armor and with only a minimal  amount of ammunition. As a result, vehicles would have to be armored  and loaded upon arrival to be combat ready.
section_title: FCS Cost and Affordability Still to Be Determined
paragraphs: The low levels of knowledge in the FCS program provide an insufficient  basis for making cost estimates. The program’s immaturity at the time  system development and demonstration began resulted in a relatively low- fidelity cost estimate and open questions about the program’s long-term  affordability. Although the program restructuring provides more time to  resolve risk and to demonstrate progress, the knowledge base for making  a confident estimate is still low. If the FCS cost estimate is not better than  past estimates, the likelihood for cost growth will be high while the  prospects for finding more money for the program will be dim.
The estimates for the original FCS program and the restructured program  are shown in table 2 below.
At this point, the FCS cost estimate represents the position of the program  office. The Army and the Office of the Secretary of Defense’s Cost Analysis  Improvement Group will provide their independent estimates for the  May 2005 Milestone B update review. It is important to keep in mind that  the FCS program cost estimate does not reflect all of the costs needed to  field FCS capabilities. The costs of the complementary programs are  separate and will be substantial. For example, the research and  development and procurement costs for the JTRS (Clusters 1 and 5) and  the WIN-T programs are expected to be about $34.6 billion (fiscal year  2005 dollars).
In addition, by April 2005, the Army has been tasked to provide an analysis  of FCS affordability considering other Army resource priorities, such as  modularity. This will be an important analysis given that estimates of  modularity costs have been put at about $48 billion, and costs of current  operations and recapitalizing current equipment have been covered by  supplemental funding.
As can be seen in table 3, substantial investments will be made before key  knowledge is gained on how well the system can perform. For example, by  the time of the critical design review in 2010, over $20 billion of research  and development funds will have been spent.
The consequences of even modest cost increases and schedule delays for  the FCS would be dramatic. For example, a one-year delay late in FCS  development, not an uncommon occurrence for other DOD programs,  could cost over $3 billion. Given the size of the program, financial  consequences of following historical patterns of cost and schedule growth  could be dire.
section_title: Alternatives to Current FCS Acquisition Strategy Still Warrant Consideration
paragraphs: For any acquisition program, two basic questions can be asked. First, is it  worth doing? Second, is it being done the right way? On the first question,  the Army makes a compelling case that something must be done to equip  its future forces and that such equipment should be more responsive but  as effective as current equipment. The answer to the second question is  problematic. At this point, the FCS presents a concept that has been laid  out in some detail, an architecture or framework for integrating individual  capabilities, and an investment strategy for how to acquire those  capabilities. There is not enough knowledge to say whether the FCS is  doable, much less doable within a predictable frame of time and money.  Yet making confident predictions is a reasonable standard for a major  acquisition program given the resource commitments and opportunity  costs they entail. Against this standard, the FCS is not yet a good fit as an  acquisition program.
That having been said, another important question that needs to be  answered is: if the Army needs FCS-like capabilities, what is the best way  to advance them to the point to which they can be acquired? Efforts that  fall in this area—the transition between the laboratory and the acquisition  program—do not yet have a place that has right organizations, resources,  and responsibilities to advance them properly.
At this point alternatives to the current FCS strategy warrant  consideration. For example, one possible alternative for advancing the  maturity of FCS capabilities could entail setting the first spiral or block as  the program of record for system development and demonstration. Such a  spiral should meet the standards of providing a worthwhile military  capability, having mature technology, and having firm requirements. Other  capabilities currently in the FCS program could be moved out of system  development and demonstration and instead be bundled into advanced  technology demonstrations that could develop and experiment with  advanced technologies in the more conducive environment of “pre- acquisition” until they are ready to be put into a future spiral. Advancing  technologies in this way will enable knowledge to guide decisions on  requirements, lower the cost of development, and make for more  reasonable cost and schedule estimates for future spirals.
Mr. Chairman, this concludes my prepared statement. I would be happy to  answer any questions that you or members of the subcommittee may have.
section_title: Contacts and Staff Acknowledgements
paragraphs: For future questions about this statement, please contact me at (202)   512-4841. Individuals making key contributions to this statement include  Lily J. Chin, Marcus C. Ferguson, Lawrence D. Gaston, Jr.,   William R. Graveline, John P. Swain, Robert S. Swierczek, and   Carrie R. Wilson.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. It may be reproduced and distributed in its entirety without further  permission from GAO. However, because this work may contain copyrighted images or  other material, permission from the copyright holder may be necessary if you wish to  reproduce this material separately.