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

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