Space Acquisitions: DOD Continues to Face Challenges of Delayed Delivery of Critical Space Capabilities and Fragmented Leadership
Released: 2017-05-17T00:00:00

Letter

Status of Major Defense Space Programs

DOD space systems support and provide a wide range of capabilities to a large number of users, including the military services, the intelligence community, civil agencies, and others. These capabilities include positioning, navigation, and timing; meteorology; missile warning; and secure communications, among others. Space systems can take a long time to develop and often consist of multiple components, including satellites, ground control stations, terminals, and user equipment. DOD satellite systems are also expensive to acquire. Unit costs for current DOD satellites can range from $500 million to over $3 billion. The ground systems can cost as much as $5.5 billion and the cost to launch a satellite can climb to well over $100 million.

Many major DOD space programs have experienced significant cost and schedule increases. For instance, program costs for the Advanced Extremely High Frequency (AEHF) satellite program, a protected satellite communications system, had grown 118 percent since its first estimate as of our March 2017 review and its first satellite was launched over 3.5 years late. For the Space Based Infrared System (SBIRS), a missile warning satellite program, costs grew nearly 300 percent and the launch of the first satellite was delayed roughly 9 years. Both programs are now in the production phase where fewer problems tend to surface, and where there is typically less risk of cost and schedule growth. The only major satellite program with systems in the development phase is the Global Positioning System (GPS), which has seen an almost 4-year delay and unit cost growth of 9 percent due to technical issues.

Cost and schedule growth has also been a challenge for satellites and their ground systems. In fact, delays with ground systems have been so lengthy, that satellites sometimes spend years in orbit before key capabilities can be fully exploited. For example, as discussed below, the command and control system for GPS III satellites, known as the Next Generation Operational Control System, or OCX, is at least 5 years behind schedule. Because of these delays, the Air Force has had to start two separate back-up efforts to ensure the continuity of GPS capabilities and to make anti-jamming capabilities available via Military Code, or M- code, until OCX is delivered. Additionally, over 90 percent of the capabilities to be provided by Mobile User Objective System communications satellites—the first of which launched in 2012 and with five satellites now in orbit—are being underutilized because of problems with integrating the space, ground, and terminal segments and delays in fielding compatible user terminals. Figure 1 provides more details on the current status of DOD’s major space programs.

Cost and schedule growth in DOD’s space programs is sometimes driven by the inherent risks associated with developing complex space technology; however, over the past 8 years we have identified a number of other management and oversight problems that can worsen the situation. These include making overly optimistic cost and schedule estimates, pushing programs forward without sufficient knowledge about technology and design, and experiencing problems in overseeing and managing contractors, among others. Some of DOD’s programs in operation, such as SBIRS, were also exceedingly ambitious, which in turn increased technology, design, and engineering risks. While satellite programs have provided users with important and useful capabilities, their cost growth has significantly limited the department’s buying power—at a time when more resources may be needed to protect space systems and to recapitalize the space portfolio.

Our work—which is largely based on best practices in the commercial sector—has recommended numerous actions that can be taken to address the problems we have identified.

As shown in table 1, our previous work on weapons acquisitions in general, and space programs in particular, identified best practices for developing complex systems, such as developing more realistic estimates and ensuring technologies can work as intended before moving them into more complicated phases of the acquisition process.

In 2016, we testified that DOD had implemented actions to address space acquisition problems, and most of its major space programs had transitioned into the production phase where fewer problems tend to occur. These range from improvements to cost estimating practices and development testing to improvements in oversight and leadership, such as the November 2010 addition of the Defense Space Council, designed to bring together senior leaders on important issues facing space. DOD had also started fewer new programs and even those were less ambitious than prior efforts, which helped to reduce the risk of cost and schedule growth. Given the problems we have identified in the GPS program, however, it is clear that more needs to be done to improve the management of space acquisitions.

Ongoing Work Shows GPS Acquisitions Are Still High Risk

In 2015, we reported that the Air Force was experiencing significant difficulties developing the GPS ground system, OCX, and consistently overstated its progress to the Office of the Secretary of Defense (OSD). At the time of our 2015 work, the program needed $1.1 billion and 4 years more than planned to deliver OCX due to poor acquisition decisions and a slow recognition of development problems. The Air Force began OCX development in 2010 prior to completing preliminary development reviews in contrast with best acquisition practices. It accelerated OCX development in 2012 to meet optimistic GPS III satellite launch timeframes even as OCX development problems and costs grew, and then paused development in 2013 to address problems and resolve what it believed were root causes. After a rebaseline to the schedule in late 2015, further evidence that OCX still had unaddressed problems surfaced in 2016 when the Air Force informed Congress the OCX program had breached a Nunn-McCurdy unit cost threshold. We are continuing to monitor OCX’s progress and challenges to determine if it is on the right track as part of our ongoing GPS review.

In 2015, we also looked at the Air Force’s military GPS user equipment (MGUE) program to develop for the military services GPS receiver cards capable of receiving the M-code signal. M-code is a stronger and encrypted, military-specific GPS signal which can help users operate in jamming environments. We found that the Air Force had revised MGUE’s acquisition strategy several times. Even so, the military services were unlikely to have sufficient knowledge to make informed procurement decisions starting in fiscal year 2018, because operational testing that provides valuable information about MGUE performance would not be complete until fiscal year 2019.

On a positive note, at the time of our 2015 review, the current GPS constellation was proving to be much more reliable than the Air Force predicted when we last reported on it in 2010, giving the Air Force some relief in dealing with the delays with new GPS satellites. However, we found that OCX contingency plans were still necessary for sustaining the GPS constellation. We also found that initial M-code broadcast capability would not be available until the current ground system, the Operational Control System, or OCS, was modified in late-2019 at the earliest to make up for OCX delays. Full M-code capability—which includes both the ability to broadcast a signal via satellites and a ground system and user equipment to receive the signal—will take at least a decade once the services are able to deploy MGUE receivers in sufficient numbers.

Preliminary results from our ongoing review of GPS shows that the satellites, ground systems, and user equipment are all still on a high risk path; though satellite delays are still somewhat mitigated by the longer than anticipated performance of older GPS satellites. More specifically, the first GPS satellite is planned for launch in March 2018, over 3 years before OCX Block 1 is scheduled to become operational. Block 1 is needed to command and control the current and new generation of GPS satellites, bring M-code into operations, and provide enhanced cybersecurity capabilities. In light of delays with OCX, the Air Force has spawned two additional development efforts—one to ensure continuity in the ability to process GPS satellite positioning, navigation, and timing signals (known as Contingency Operations or COps) and another to help mitigate the delay in the ability to process the M-code signal (known as M-Code Early Use or MCEU). However, these efforts will have limited capabilities. Moreover, more than 11 years after launching the first M- code capable satellites, DOD has yet to deliver M-code capable MGUE receivers. DOD will not have a full M-code capability until receivers are deployed on sufficient numbers of weapons platforms and munitions to support the warfighter, yet it is following a high risk path to deliver them. Based on our preliminary results, risks specific to each GPS segment are described below.

Satellites: Since our 2015 report, the satellite program has encountered technical issues that have further delayed the first launch, which is almost 4 years later than the original estimate. Issues with failed and damaged capacitors have been a recent driver for the delays to the first satellite. Capacitors are components used to store and release electrical charges. According to program officials, each satellite has over 500 capacitors of the same design that experienced failures. The program discovered that a subcontractor had not qualified the capacitors for use in the GPS satellites and in response the program conducted qualification and reliability testing. However, the reliability testing was conducted using an incorrect circuit board, invalidating the test. The capacitor design was successfully qualified in December 2016. The Air Force decided to assume the risk of capacitor failure and proceed with the first satellite as- is, fitted with capacitors mostly from the questionable lot. The program replaced the suspect capacitors in the second and third satellites, the only other satellites that had the suspect parts.

OCX: The contractor’s performance over the past year suggests a 2-year extended schedule approved in 2015 is insufficient. The contractor has experienced code growth and high defect rates, and is operating under significant schedule compression and concurrency, with minimal schedule reserve to account for acquisition risk. Moreover, the contractor’s current schedule estimates assume efficiencies from software engineering improvements, such as increased testing automation, that have not yet been demonstrated. These new processes have required the contractor to manage cultural changes. Additionally, the contractor almost doubled its staff to over 1,000 people to achieve the extension. According to Air Force officials, the 2-year extension will likely be extended by an additional 6 months.

MGUE Receivers: In view of the importance of M-code to warfighting, statute generally prohibits DOD from obligating or expending funds for GPS user equipment after fiscal year 2017 unless that equipment is capable of receiving military code. In February 2017, the services submitted implementation plans that identified systems they want to upgrade with M-code, but these plans do not identify full resource needs. As a result, it is still unclear when M-code capable receivers will be fielded and at what cost. Though other weapon programs would normally have a production decision scheduled by this point in the development cycle, there is no scheduled production decision for the first increment of receivers and there are only tentative implementation plans as receiver cards are being verified by testing. Even after the MGUE program ends with limited operational testing on test articles on four initial weapons systems, the services may each have to conduct additional development both on those systems and any other systems. As a result of this uncertainty, the military services report that they have begun requesting waivers for the statutory requirement. In addition, in March 2016 the Army identified 25 functional gaps and technical issues that would hinder its ability to adopt MGUE technology. In September 2016, the Air Force responded with plans to address some of these functional gaps. However, Army officials are concerned that not all gaps have been addressed or will be addressed, which could impact its ability to field the receiver cards. Total development and procurement costs across all services remain unknown.

Fragmented Space Leadership Exacerbates Acquisition Problems

We have reported over the years that DOD’s culture has generally been resistant to changes in space acquisition approaches and that fragmented responsibilities have made it difficult to coordinate and deliver interdependent systems. For example, in 2012 we found that although some improvements in leadership have been made, there was no single person or organization held accountable for balancing acquisition needs against wants, ensuring coordination among the many organizations involved with space systems acquisitions, and ensuring that resources are directed where they are most needed. In October 2015, DOD re- designated the Executive Agent for Space role as the Principal DOD Space Advisor (PDSA). In 2016 we determined it was too early to gauge whether the PDSA has sufficient authority to consolidate space leadership responsibilities.

Some examples of leadership and coordination issues we have identified in our prior and ongoing work include: In a February 2012 report, we found that the National Polar-orbiting Operational Environmental Satellite System (NPOESS), which attempted to converge defense and civil environmental monitoring requirements and avoid duplication through a tri-agency program office, was canceled in 2010, in part, because there was no single authority in charge of resolving conflicts or setting priorities.

In a March 2016 report we found that, in assessing alternatives for future weather systems, DOD consulted with a wide range of DOD stakeholders in conducting the analysis of alternatives (AOA), but it did not effectively coordinate with the National Oceanic and Atmospheric Administration (NOAA) (on a case-by-case basis, NOAA represents DOD’s interests with international partners regarding space-based environmental monitoring data). NOAA was not involved in reviews of the AOA or regular discussions with AOA study leadership. Without NOAA’s input, the AOA study determined that the likelihood a critical gap would not be filled was low, based on historical trends. As a result, DOD did not fully assess solutions for cloud characterization and theater weather imagery data needs. As of August 2016, DOD was still assessing what to do about these gaps and the Air Force recently signed a memorandum of agreement with NOAA that enables a broad range of mutually beneficial support activities.

In our ongoing work on the Global Positioning System, Army officials have also observed that the lack of a central point of authority and accountability is hampering coordination on GPS user equipment. It is unclear who is in charge of coordinating and prioritizing fielding efforts or setting criteria for M-code waivers—be it the DOD Chief Information Officer, Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L)), or the Council on Oversight of the Department of Defense Positioning, Navigation and Timing Enterprise (PNT Oversight Council). This is significant because of the risk of duplicated efforts—and rising costs— between services; and the lack of leadership influences when and if services are pushed to procure M-code user equipment and thus realize DOD’s goals for anti-jamming GPS capabilities.

In a July 2016 report, expert space officials told us that because programs experience too much bureaucracy, it can take a minimum of 3 years to develop an acquisition strategy, issue a request for proposal, conduct source selection, and award a contract. By then, technologies and requirements can be obsolete. For example, one contractor told us that it took over a year for the Air Force to develop a request for proposal for a low-dollar, $2 million study. While USD(AT&L) officials emphasized that DOD’s acquisition policy is very tailorable and that programs can take advantage of its flexibility, Air Force officials said that this does not play out in practice. They told us that oversight entities are reluctant to waive or change steps out of fear they will be blamed later.

In a July 2016 report, we reported that space officials believe USD(AT&L) is the only real decision-making authority for space-related topics. Some senior officials report that this can have unexpected effects, such as the Under Secretary having to make broader space architecture decisions, which are larger issues that fall outside his responsibility. Officials noted that such decisions fall to the Under Secretary by default because there is no space-specific authority.

In Senate Report 114-49 accompanying S.1376, a bill for the National Defense Authorization Act for Fiscal Year 2016, the Senate Armed Services Committee included a provision for GAO to review the effectiveness of the current DOD space acquisition and oversight model and to evaluate what changes, if any, could be considered to improve the governance of space system acquisitions and operations. In 2016, we found that DOD space leadership responsibilities are fragmented among a number of organizations. We identified approximately 60 stakeholder organizations across DOD, the Executive Office of the President, the Intelligence Community, and civilian agencies. Of these, 8 organizations have space acquisition management responsibilities; 11 have oversight responsibilities; and 6 are involved in setting requirements for defense space programs.

In October 2015, the Deputy Secretary of Defense designated the Secretary of the Air Force as the Principal DOD Space Advisor (PDSA). The PDSA, supported by an advisory body called the Defense Space Council (DSC), is responsible for promoting a unified approach to space issues, including acquisitions; overseeing the entire DOD space portfolio, including all space policies, strategies, and plans across DOD; and serving as an independent advisor on all space matters to top DOD officials. PDSA officials stated that the PDSA role is expected to have new responsibilities that will help it effectively consolidate space leadership. Some of these responsibilities include reviewing all service budgets for conformity with national security space policy, and giving independent assessments and recommendations to top DOD officials when there is no DSC consensus. However, because the position is relatively new, it remains to be seen whether the PDSA will be effective in unifying space leadership and authority.

The organization of space acquisitions and oversight has been studied in depth over the last 20 years; however, DOD has not made some of the significant changes to space leadership that were recommended by the four most relevant studies that we identified in our July 2016 report. For example, these studies made recommendations such as combining the National Reconnaissance Office (NRO) and Air Force space acquisition functions into a unified organization or establishing an Under Secretary of Defense-level official with responsibility for planning and executing national security space programs. Some of the acquisition problems identified in past studies and GAO reports persist, such as insufficient program manager empowerment and excessive reviews, which contribute to inefficiencies. As we reported in July 2016, officials and experts we spoke with stated that the challenges are magnified in space programs because space technologies are frequently obsolete by the time they are deployed. The officials and experts also stated that DOD space acquisitions generally take too long due to fragmented leadership, a redundant oversight bureaucracy, and difficulty coordinating among numerous stakeholders. Many officials and experts stated that no one seems to be in charge of space acquisitions and many remain skeptical that the recently designated PDSA will have sufficient decision-making authority to address these concerns. However, others—including from the PDSA—stated a strong belief that the position will be able to effectively consolidate fragmented leadership responsibilities.

In conclusion, given the long-standing fragmentation in space leadership and consequent challenges faced by DOD in synchronizing its extensive space enterprise, other, more significant reform measures may deserve a closer look. Our past work has identified some suggested themes for reform that include: (1) streamlining reviews; (2) delegating more decision-making authority to lower levels; (3) increasing unity of national security space decisions between DOD and the NRO; (4) achieving lasting change that cannot be quickly undone and to allow time for the changes to work; and (5) providing sufficient acquisition, execution, and budget authority. Our work has also identified and examined several potential approaches to reforming DOD space acquisitions that were suggested and supported by DOD and expert officials. They include allowing time for the recent PDSA change to work; combining military space functions into one agency; combining Air Force and NRO space acquisition functions into a space acquisition agency; and creating a new military department for the space domain - a Space Force. Except for the first option, these would likely involve significant short-term disruption to DOD’s space organizational structure, roles, and responsibilities. Moreover, their consequences would extend far beyond the acquisition arena. Careful consideration of any such changes is therefore essential for helping to ensure a better track record of providing warfighters with the capabilities they need on time and within costs.

Chairman Fischer, Ranking Member Donnelly, and Members of the Subcommittee this concludes my statement. I am happy to answer any questions you have.

GAO Contacts

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.

Staff Acknowledgments

Individuals who made key contributions to this statement include Rich Horiuchi, Assistant Director; Dr. Nabajyoti Barkakati, Chief Technologist; Erin Cohen; Emily Bond; Jill Lacey; Katherine Lenane; Kristin Van Wychen; Alyssa Weir; and Robin Wilson. Key contributors for the previous work on which this statement is based are listed in the products cited. Key contributors to related ongoing work include Dave Best, Assistant Director; Patrick Breiding; Erin Carson; and Jonathan Mulcare.

Related GAO Products

Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-17-333SP. Washington, D.C.: March 30, 2017.

Global Positioning System: Observations on Quarterly Reports from the Air Force. GAO-17-162R. Washington, D.C.: October 17, 2016.

Defense Space Acquisitions: Too Early to Determine if Recent Changes Will Resolve Persistent Fragmentation in Management and Oversight. GAO-16-592R. Washington, D.C.: July 27, 2016.

Defense Weather Satellites: DOD Faces Acquisition Challenges for Addressing Capability Needs. GAO-16-769T. Washington, D.C.: July 7, 2016.

Defense Weather Satellites: Analysis of Alternatives is Useful for Certain Capabilities, but Ineffective Coordination Limited Assessment of Two Critical Capabilities. GAO-16-252R. Washington, D.C.: March 10, 2016.

Space Acquisitions: Challenges Facing DOD as it Changes Approaches to Space Acquisitions. GAO-16-471T. Washington, D.C.: March 9, 2016.

Space Acquisitions: GAO Assessment of DOD Responsive Launch Report. GAO-16-156R. Washington, D.C.: October 29, 2015.

Space Situational Awareness: Status of Efforts and Planned Budgets. GAO-16-6R. Washington, D.C.: October 8, 2015.

GPS: Actions Needed to Address Ground System Development Problems and User Equipment Production Readiness. GAO-15-657. Washington, D.C.: September 9, 2015.

Evolved Expendable Launch Vehicle: The Air Force Needs to Adopt an Incremental Approach to Future Acquisition Planning to Enable Incorporation of Lessons Learned. GAO-15-623. Washington, D.C.: August 11, 2015.

Defense Satellite Communications: DOD Needs Additional Information to Improve Procurements. GAO-15-459. Washington, D.C.: July 17, 2015.

Space Acquisitions: Some Programs Have Overcome Past Problems, but Challenges and Uncertainty Remain for the Future. GAO-15-492T. Washington, D.C.: April 29, 2015.

Space Acquisitions: Space Based Infrared System Could Benefit from Technology Insertion Planning. GAO-15-366. Washington, D.C.: April 2, 2015.

Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-15-342SP. Washington, D.C.: March 12, 2015.

Defense Major Automated Information Systems: Cost and Schedule Commitments Need to Be Established Earlier. GAO-15-282. Washington, D.C.: February 26, 2015.

DOD Space Systems: Additional Knowledge Would Better Support Decisions about Disaggregating Large Satellites. GAO-15-7. Washington, D.C.: October 30, 2014.

Space Acquisitions: Acquisition Management Continues to Improve but Challenges Persist for Current and Future Programs. GAO-14-382T. Washington, D.C.: March 12, 2014.

U.S. Launch Enterprise: Acquisition Best Practices Can Benefit Future Efforts. GAO-14-776T. Washington, D.C.: July 16, 2014.

Evolved Expendable Launch Vehicle: Introducing Competition into National Security Space Launch Acquisitions. GAO-14-259T. Washington, D.C.: March 5, 2014.

The Air Force’s Evolved Expendable Launch Vehicle Competitive Procurement. GAO-14-377R. Washington, D.C.: March 4, 2014. 2014 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits. GAO-14-343SP. Washington, D.C.: April 8, 2014.

Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-14-340SP. Washington, D.C.: March 31, 2014.

Space Acquisitions: Assessment of Overhead Persistent Infrared Technology Report. GAO-14-287R. Washington, D.C.: January 13, 2014.

Space: Defense and Civilian Agencies Request Significant Funding for Launch-Related Activities. GAO-13-802R. Washington, D.C.: September 9, 2013.

Global Positioning System: A Comprehensive Assessment of Potential Options and Related Costs is Needed. GAO-13-729. Washington, D.C.: September 9, 2013.

Space Acquisitions: DOD Is Overcoming Long-Standing Problems, but Faces Challenges to Ensuring Its Investments are Optimized. GAO-13-508T. Washington, D.C.: April 24, 2013.

Launch Services New Entrant Certification Guide. GAO-13-317R. Washington, D.C.: February 7, 2013.

Satellite Control: Long-Term Planning and Adoption of Commercial Practices Could Improve DOD’s Operations. GAO-13-315. Washington, D.C.: April 18, 2013.

Defense Acquisitions: Assessments of Selected Weapon Programs. GAO-13-294SP. Washington, D.C.: March 28, 2013.

Evolved Expendable Launch Vehicle: DOD Is Addressing Knowledge Gaps in Its New Acquisition Strategy. GAO-12-822. Washington, D.C.: July 26, 2012.

Space Acquisitions: DOD Faces Challenges in Fully Realizing Benefits of Satellite Acquisition Improvements. GAO-12-563T. Washington, D.C.: March 21, 2012.

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: Development and Oversight Challenges in Delivering Improved Space Situational Awareness Capabilities. GAO-11-545. Washington, D.C.: May 27, 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.

Global Positioning System: Challenges in Sustaining and Upgrading Capabilities Persist. GAO-10-636. Washington, D.C.: September 15, 2010.

Defense Acquisitions: Challenges in Aligning Space System Components. GAO-10-55. Washington D.C.: October 29, 2009.

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