MDA’s BMDS is being designed to counter ballistic missiles of all ranges—short, medium, intermediate, and intercontinental. Because ballistic missiles have different ranges, speeds, sizes, and performance characteristics, MDA is developing multiple systems that, when integrated, provide multiple opportunities to destroy ballistic missiles before they can reach their targets. The BMDS architecture includes space-based sensors, ground- and sea-based radars, ground- and sea- based interceptor missiles, and a command and control, battle management, and communications system to provide the warfighter with the necessary communication links to the sensors and interceptor missiles. Table 1 provides a brief description of individual BMDS systems, which MDA refers to as elements of the BMDS. As noted in the table, two programs were proposed for cancellation in April 2013 as part of DOD’s Fiscal Year 2014 President’s Budget Submission. When MDA was established in 2002, the Secretary of Defense granted it exceptional flexibility to set requirements and manage the acquisition of the BMDS in order to quickly deliver protection against ballistic missiles. This decision enabled MDA to rapidly deliver assets but we have reported that it has come at the expense of transparency and accountability. Moreover, to meet tight deadlines, MDA has employed high-risk acquisition strategies that have resulted in significant cost growth, schedule delays, and in some cases, performance shortfalls. Examples of key problems we have cited in reports in recent years are highlighted below. In recent years, MDA has experienced several test failures. These, as well as a test anomaly and delays, disrupted MDA’s flight test plan and the acquisition strategies of several components. Overall, these issues forced MDA to suspend or slow production of three out of four interceptors being manufactured. The GMD program in particular has been disrupted in its attempts to demonstrate the CE-II interceptors by two test failures. As a result of a failed flight test in January 2010 due to an assembly process quality issue, MDA added a retest designated as Flight Test GMD-06a (FTG-06a). However, this retest also failed in December 2010 due to the effects of vibration on the kill vehicle’s guidance system. As a result of these failures, MDA decided to halt GMD flight testing and restructure its multiyear flight test program, halt production of the GMD interceptors, and redirect resources to return- to-flight testing activities. Additionally, as we reported in April 2013, the costs to demonstrate and fix CE-II capability have grown from $236 million to over $1.2 billion and are continuing to grow. MDA acquisitions have faced significant cost growth, schedule delays, and/or performance shortfalls due to a highly concurrent acquisition approach. Concurrency is broadly defined as the overlap between technology development and product development or between product development and production. While some concurrency is understandable, committing to product development before requirements are understood and technologies are mature or committing to production and fielding before development is complete is a high-risk strategy that often results in performance shortfalls, unexpected cost increases, schedule delays, and test problems. High levels of concurrency were present in MDA’s initial efforts and remain present in current efforts. There has been limited visibility into cost and schedule progress associated with the BMDS. We have reported on the limited usefulness of MDA’s acquisition baselines for oversight due to (1) a lack of clarity, consistency, and completeness; (2) a lack of high- quality supporting cost estimates and schedules; and (3) instability in the content of the baselines. MDA has made limited progress in developing the individual system models it uses to assess performance of the BMDS elements and linking those models. Models and simulations are critical to understanding BMDS capabilities. The complex nature of the BMDS, with its wide range of connected elements, requires integrated system-level models and simulations to assess its performance in a range of system configurations and engagement conditions. Quality issues have also impeded missile defense development in These were due to workmanship issues, the use of recent years. undocumented and untested manufacturing processes and poor control of manufacturing materials, among other factors. Congress and DOD have taken steps in recent years to address concerns over MDA’s acquisition management strategy, accountability, and oversight. These include efforts to provide more information on cost, schedule, and other baselines; efforts to prevent quality problems; and efforts to begin obtaining independent cost estimates. In April 2013, we reported that in the past year MDA gained important knowledge through its test program, including successfully conducting its most complex integrated air and missile defense flight test to date, and it took some positive steps to reduce acquisition risks for two of its programs. It has also improved the clarity of baseline information it reports to Congress. Specifically, in April 2013 we reported that in October 2012, MDA conducted the largest integrated air and missile defense flight test to date, achieving near simultaneous intercepts of multiple targets by various BMDS interceptors. This test was a combined developmental and operational flight test that for the first time used warfighters from multiple combatant commands and employed multiple missile defense systems. All five targets—three ballistic and two cruise missiles—were launched and performed as expected. In this test, THAAD also intercepted a medium range target for the first time and an Aegis ship conducted successfully a standard missile-2 Block IIIA engagement against a cruise missile. This test also provided valuable data to evaluate interoperability between several systems during a live engagement. In April 2013, we reported that in fiscal year 2012, the Aegis BMD SM-3 Block IB and THAAD programs also attained important knowledge in their flight test programs. In May 2012, the Aegis BMD SM-3 Block IB system intercepted a short-range target for the first time. In June 2012, the system completed another successful intercept which provided more insight into the missile’s enhanced ability to discriminate the target from other objects during an engagement. In October 2011, THAAD successfully conducted its first operational flight test prior to entering full- rate production.intercepted two short-range targets, demonstrating that the system can perform under operationally realistic conditions from mission planning through the end of the engagement. Additionally, this test supported the resumption of interceptor manufacturing, and was used by the Army as support for accepting the first two THAAD batteries. This also marked the During the test, THAAD fired two missiles that first time Army and DOD test and evaluation organizations confirmed that the test and its results resembled the fielded system. We also reported in April 2013 that MDA took steps to reduce acquisition risk by decreasing the overlap between technology and product development for two of its programs—the Aegis BMD SM-3 Block IIA and Block IIB programs. By taking steps to reconcile gaps between requirements and available resources before product development begins, MDA makes it more likely that programs can meet cost, schedule, and performance targets. The Aegis BMD SM-3 Block IIA program added time and money to extend development following significant problems with four components. MDA reduced its acquisition risk by delaying the program’s system preliminary design review for more than one year and, as a result, in March 2012, the program successfully completed the review because it allowed additional development of the components. We also reported in April 2013 that the Aegis BMD SM-3 Block IIB program had taken important steps to reduce concurrency and increase the technical knowledge it planned to achieve before development by delaying product development until after its preliminary design review was completed. Pub. L. No. 110-181, § 223(g), repealed by Pub. L. No. 112-81, § 231(b) (2011). operations and support, and disposal costs.key milestones and tasks, such as important decision points, significant increases in performance knowledge, modeling and simulation events, and development efforts. Some also show time frames for flight and ground tests, fielding, and events to support fielding. In its 2012 BAR, MDA made several useful changes to its reported resource and schedule baselines in response to our concerns and congressional direction. For example, MDA reported the full range of life cycle costs borne by MDA; defined and explained more clearly what costs are in the resource baselines or were excluded from the estimates; included costs already incurred in the unit cost for Targets and Countermeasures so they were more complete; added a separate delivery table that provided more detailed information on deliveries and inventories; and added a list of significant decisions made or events that occurred in the past year—either internal or external to the program—that affected program progress or baseline reporting. Although the MDA has made some progress, the new MDA Director faces considerable challenges in executing acquisition programs; strengthening accountability; assessing alternatives before making new investment commitments; developing and deploying U.S. missile defense in Europe and using modeling and simulations to understand capabilities and limitations of the BMDS. In April 2013 we reported that though MDA has gained important insights through testing and taken some steps to reduce acquisition risk and increase transparency, it still faces challenges stemming from high-risk acquisition strategies. As noted earlier, MDA has undertaken and continues to undertake highly concurrent acquisitions. While some concurrency is understandable, committing to product development before requirements are understood and technologies are mature or committing to production and fielding before development is complete is a high-risk strategy that often results in performance shortfalls, unexpected cost increases, schedule delays, and test problems. It can also create pressure to keep producing to avoid work stoppages. Our April 2012 report detailed how the Aegis BMD SM-3 Block IB, GMD, and THAAD programs undertook highly concurrent acquisition strategies. For example, to meet the presidential directive to deploy an initial set of missile defense capabilities by 2004, the GMD program concurrently matured technology, designed the system, tested the design, and produced and deployed an initial set of missile defense capabilities.