Space Acquisitions: Stronger Development Practices and Investment
Planning Needed to Address Continuing Problems (12-JUL-05,	 
GAO-05-891T).							 
                                                                 
GAO was asked to testify on problems relating to the Department  
of Defense's (DOD) space system acquisitions. In doing so, we	 
drew on our previous reports related to the causes of acquisition
problems, underlying incentives and pressures, and potential	 
solutions.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-891T					        
    ACCNO:   A29578						        
  TITLE:     Space Acquisitions: Stronger Development Practices and   
Investment Planning Needed to Address Continuing Problems	 
     DATE:   07/12/2005 
  SUBJECT:   Aerospace research 				 
	     Cost analysis					 
	     Defense procurement				 
	     Procurement planning				 
	     Program management 				 
	     Satellites 					 
	     Schedule slippages 				 
	     Technology 					 
	     DOD Advanced Extremely High Frequency		 
	     Satellite Program					 
                                                                 
	     DOD Evolved Expendable Launch Vehicle		 
	     Program						 
                                                                 
	     DOD Space Radar Program				 
	     DOD Transformational Satellite			 
	     Communications System Program			 
                                                                 
	     National Polar-Orbiting Operational		 
	     Environmental Satellite System			 
                                                                 
	     Space Based Infrared System-High			 
	     Wideband Gapfiller Satellites			 

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GAO-05-891T

United States Government Accountability Office

GAO	Testimony Before the Strategic Forces Subcommittee, Committee on Armed
Services, House of Representatives

For Release on Delivery

Expected at 1:00 p.m. EDT SPACE ACQUISITIONS

Tuesday, July 12, 2005

    Stronger Development Practices and Investment Planning Needed to Address
                              Continuing Problems

Statement of Robert E. Levin, Director, Acquisition and Sourcing Management

GAO-05-891T

[IMG]

DOD SPACE ACQUISITIONS

Stronger Development Practices and Investment Planning Needed to Address
Continuing Problems

  What GAO Found

Our work on the acquisition of space-based capabilities over the last
several years has been conducted on two levels. First, we have reviewed
most of the major space system acquisitions to determine their status at
different points in time. The results are discouraging-systems cost more
and take much longer to acquire than promised when initially approved. In
some cases, the justification or business case for the system when
initially approved is far different from the current status, so DOD has
had to re-assess the need to acquire that particular system and the
soundness of its acquisition strategy.

Second, we have analyzed the common and causal factors for these poor
acquisition outcomes. Overall, we have found that DOD has been unable to
match resources (technology, time, money) to requirements before beginning
individual programs, setting the stage for technical and other problems,
which lead to cost and schedule increases. Specifically:

o  	Requirements for what the satellite needed to do and how well it must
perform are not adequately defined at the beginning of a program or are
changed significantly once the program has begun.

o  	Technologies are not mature enough to be included in product
development.

o  	Cost estimates are unreliable-largely because requirements have not
been fully defined and because programs start with many unknowns about
technologies.

We also have reported on cross-cutting factors that make it more difficult
for DOD to achieve a match between resources and requirements for space
acquisitions. These include: a diverse array of organizations with
competing interests; a desire to satisfy all requirements in a single
step, regardless of the design or technology challenge; and a tendency for
acquisition programs to take on technology development that should occur
within the S&T environment. On a broader scale, DOD starts more programs
than it can afford in the long run, forcing programs to underestimate
costs and over promise capability. As a result, there is pressure to
suppress bad news about programs, which could endanger funding and
support, as well as to skip testing because of its high cost.

One key to success is closing the gaps between available technologies and
customer needs before beginning an acquisition program. This puts programs
in a better position to succeed because they can focus on design, system
integration, and manufacturing. DOD has recently revised its space
acquisition policy, in part to attain more knowledge about technologies
before starting an acquisition program. However, we remain concerned that
the policy still allows programs to begin before demonstrating
technologies in an operational or simulated environment.

United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss DOD's efforts to acquire
spacebased capabilities. In fiscal year 2006 alone, DOD plans to spend
almost $20 billion to develop and procure satellites and other space
systems. Our work on the acquisition of space-based capabilities over the
last several years has been conducted on two levels. First, we have
reviewed most of the major space system acquisitions to determine their
status at different points in time. The results are discouraging-systems
cost more and take much longer to acquire than promised when initially
approved. In some cases, the justification or business case for the system
when initially approved is far different from the current status, so DOD
has had to reassess the need to acquire that particular system and the
soundness of its acquisition strategy. Second, we have analyzed space
system acquisitions to identify the common and causal factors for these
poor outcomes. Overall, we have found that DOD has been unable to match
resources (technology, time, and money) to requirements before beginning
individual programs, setting the stage for technical and other problems,
which lead to cost and schedule increases. Moreover, on a broader scale,
DOD starts more programs than it can afford, creating a set of incentives
and pressures that invariably have negative effects on individual programs
and the larger investment portfolio. Our recommendations have been focused
on getting modifications to the space acquisition policy to ensure that
decisions are more knowledge-based and holding decision makers
accountable. Here the results are mixed. We have seen some positive
changes to the policy, such as a greater emphasis on attaining knowledge
about technologies, but we remain concerned that the policy still allows
programs to begin before those technologies are actually demonstrated in
an operational or simulated environment.

My testimony today describes the condition we have found in our
systemfocused reviews and lays out the problems across systems and the
changes that need to be made if DOD is to break the cycle of acquisition
problems. Let me start by recognizing that developing satellites is a very
complex task and one which does differ from other military systems.
However, we have not been convinced that those differences merit
distinction in how system development and production are approached. Nor
should those differences ever excuse the Department from achieving the
outcomes it promises when requesting and receiving funding.

  Problems Affecting Space System Acquisitions Persist

For decades, space acquisition programs have been encountering large cost
increases and schedule delays. As a result, DOD has been unable to deliver
capabilities as promised. This past year alone, for example, costs have
continued to climb on the Space Based Infrared System High (SBIRS-High)
program-triggering another Nunn-McCurdy1 review and certification of the
program and pushing DOD's investment in this critical missile warning
system to over $9.9 billion, from the initial $3.9 billion estimate made 9
years ago. At the same time, programs focused on developing new
communications satellites are facing cost increases and schedule delays,
the National Polar-orbiting Operational Environmental Satellite System has
been restructured and is facing cost increases and schedule delays, and
unit cost increases for launch vehicles have now increased by 81 percent
since 2002 due to erroneous assumptions about the commercial launch market
upon which the program's business case was based.

Taken together, these problems have had a dramatic impact on DOD's overall
space portfolio. DOD has had to shift scarce resources to poorly
performing programs and has pushed off starting a new version of the
Global Positioning System (forcing costs to increase for the current
version under development). Cost increases have also kept DOD from
investing more in science and technology efforts that support space. We
reported recently, for example, that funding for testing of space
technologies has declined in recent years. It is also important to note
that, for some programs, DOD is spending considerable sums of money-in
addition to what was planned or long after it had originally anticipated-
thus posing additional pressures on its overall investment portfolio. DOD
originally planned to complete expenditures for SBIRS-High in fiscal year
2006, for example, but currently it plans to spend about $3.4 billion in
fiscal years 2007 through 2013.

At the same time DOD is facing these problems, it is attempting to
undertake new efforts-including the Transformational Satellite
Communications System (TSAT) program and Space Radar program- which are
expected to be among the most expensive and complex ever, and which DOD is
heavily relying on in its efforts to fundamentally transform how military
operations are conducted. In fact, many other weapon systems will be
interfaced with these satellites and highly dependent on them for their
own success.

1 10 U.S.C S: 2433.

Figure 1 shows the percent increase in total cost from the initial
estimate to its most recent, for current major space system acquisitions.
Systems that have incurred particularly significant cost increases include
the SBIRS-High and the Global Broadcasting System. In addition, relatively
newer programs such as the Evolved Expendable Launch Vehicle (EELV),
Advanced Extremely High Frequency (AEHF) satellite and the Wideband
Gapfiller communication satellites have also been experiencing cost
increases. In general, the longer a system has been in development, the
greater the amount of its cost growth. In addition, nearly all of the
programs have also experienced significant schedule delays as well.

Figure 1: Percent Increase in Program Cost from Initial Estimate to the
Current Estimate (for major space system acquisitions underway)

Source: Department of Defense's Selected Acquisition Reports.

-aGPS II Modernization Program.

As figure 2 illustrates, there is a vast difference between DOD's
budgeting plans and the reality of the cost of its space systems. Over the
next 10 years, space systems, each year, on average, will cost DOD in
excess of $1.5 billion more than it had originally planned. Moreover, the
sum of the percentage cost increases represents an additional $20 billion
over the combined lives of the programs above. This means there is $1.5
billion less that DOD has to spend on other priorities annually and tens
of billions less available for DOD's overall weapons portfolio over time.
It is not clear how DOD's budget will accommodate these additional costs.

Figure 2: Comparison between Original Cost Estimates and Current Cost
Estimates for Major Space Systems Acquisitions Underway

Source: Department of Defense's Selected Acquisition Reports.

In Table 1 below, we highlight recent findings from our reports. As the
table notes, many programs are still addressing past mistakes in
acquisition approaches and contractor oversight as well as technical,
design, and manufacturing problems.

Table 1: Highlights of Recent Findings

Advanced Extremely High Frequency Satellites (AEHF)

Evolved Expendable Launch Vehicle (EELV)

Mobile User Objective System (MUOS) Unit cost has increased by more than
50 percent. In 2004, the program experienced cost increases of more than
15 percent, which required a Nunn-McCurdy notification to Congress.
Schedule slippages for launching this communication system have now
stretched to over 3 years. Our reports have attributed cost increases most
recently to production problems and changing security requirements.
Earlier cost increases were attributed, in part, to a rush to start the
program, changing requirements, and a lack of funding to support an overly
optimistic schedule.

Unit cost increases (for launch vehicles) have increased by 81 percent. In
2004, this program experienced cost increases of more than 25 percent,
which triggered statutory requirements to reassess and recertify the
program. Our reports have found that a chief reason for cost increases is
a decline in the commercial launch market upon which the program's
business case was based as well as a reduction in anticipated launches.
Recently, the two primary contractors-Boeing Launch Services, Inc. and
Lockheed Martin Space Systems Company-agreed to form a joint venture to
combine production, engineering, test, and launch operations for U.S.
government launches. It is argued that this will help reduce costs while
enabling the government to retain two launch systems.

This is a relatively new effort: No significant cost increases or schedule
delays are reported. However, we reported this year that early procurement
of long lead items before achieving a stable design for this Navy
communications system could lead to cost increases and the program's
development schedule remains compressed- posing risks should software
development or other technical or design problems be encountered.

Navstar Global Positioning Total costs of the GPS II modernization program
have

System II (GPS II) 	increased by over 20 percent. This is largely due to
DOD's decision to delay the start of the follow-on GPS III program.
Specifically, the delay will require DOD to buy additional GPS IIF
satellites-so far at least 7 more than the program had planned. The launch
of the first IIR-M satellite has been delayed at least 7 months due to
production problems.

National Polar-orbiting Costs have increased by roughly 10 percent due to
Operational Environmental changes to the contract, increased program
management Satellite System (NPOESS) costs, and increased funds needed to
mitigate risks. The

program office reported that the increases include costs associated with
extending the development schedule and increased sensor costs.

Space Based Infrared System High (SBIRS-High)

This missile warning program has experienced schedule slips of at least 6
years and cost increases that have triggered legislative requirements to
reassess and recertify the program several times-most recently this
spring. While DOD's total program cost estimate was about $3.9 billion, it
is now $9.9 billion-nearly a 150 percent unit cost increase. Our reviews
have attributed past problems to an acquisition approach that decreased
oversight of contractors, technology challenges, and software development
problems. DOD is currently reexamining this program, potential
alternatives, and cost estimates.

Space Tracking and Surveillance System (STSS)

This is a relatively new effort: No major reported cost increases or
schedule delays. The initial increment of this program, which started in
2002, is composed of two demonstration satellites that were built under
the previous Space Based Infrared System-Low (SBIRS-Low) program.
SBIRS-Low had incurred cost increases and schedule delays and other
problems that were so severe, DOD abandoned the effort. The STSS program
has experienced system quality and system engineering problems with the
payload, however, the program office still expects early delivery and
launch of the satellites.

Space Radar 	This is a relatively new effort with no reported cost
increases or schedule delays. We reported last year that DOD was not on a
path that would enable it to accumulate knowledge and had not formalized
agreement on requirements needed to start this technically complex and
potentially very costly effort. Congress directed DOD to keep space radar
efforts in technology development so that it would accumulate critical
knowledge. In January 2005, DOD restructured this effort, focusing on
developing smaller, demonstrator satellites, strengthening its partnership
with the intelligence community, and revising its acquisition strategy.

Transformational Satellite This is a relatively new effort focused on
developing much

Communications System more robust communication satellites. It entered the
formal

(TSAT) 	acquisition phase in 2004 with only one of seven critical
technologies mature. Due to concerns about the risks such an approach
poses, Congress reduced funds and directed that the program focus on
technology development before proceeding further with acquisition
activities. Although the program started the acquisition program and
established its acquisition program baseline with immature critical
technologies, the program director told us that the system development
contract will not be awarded until critical technologies are mature.

                      Wideband Gapfiller Satellites (WGS)

Costs have increased since 2000 and DOD now anticipates buying two
additional satellites. The launch of the first satellite has been delayed
by almost 2 years. This program involves the purchase of commercial
communications satellites for DOD purposes. However, we reported that the
program encountered design, integration, and manufacturing problems due
largely to the fact that the program was not able to leverage expertise
from the commercial sector. This was because there was less than
anticipated demand for the commercial satellite. Conflicts in scheduling
for the launch pad also contributed to the schedule delay.

           Source: GAO analysis of DOD data and previous GAO reports.

  Causes of Space System Acquisition Problems

We have analyzed the range of space-based acquisitions over the last
several years to identify the common and causal factors for these poor
acquisition outcomes. Overall, we have found that DOD has been unable to
match resources (technology, time, and money) to requirements before
beginning individual programs, setting the stage for technical and other
problems, which lead to cost and schedule increases. Moreover, on a
broader scale, DOD starts more programs than it can afford, creating a set
of incentives and pressures that invariably have negative effects on
individual programs and the larger investment portfolio.

Match Between Resources and Requirements Seldom Achieved at the Start of
Acquisition Program

Our past work has shown that space programs have typically not achieved a
match between requirements and resources at program start. In other words,
the programs did not have the level of knowledge needed to assure that
they could be completed within expected cost and schedule estimates.

Specifically:

o  	Requirements for what the satellite needed to do and how well it must
perform are not adequately defined at the beginning of a program or are
changed significantly once the program has begun.

o  	Technologies are not mature enough to be included in product
development.

o  	Cost estimates are unreliable-largely because requirements have not
been fully defined and because programs start with many unknowns about
technologies.

There are a range of other resource gaps that DOD faces when it begins new
space acquisitions. For example, we have reported on deficiencies within
the space acquisition workforce, contracting strategies that support
acquisitions, contractor capabilities, as well as funding available for
testing of space technologies. Nevertheless, unstable requirements and
immature technologies are the most significant contributors to cost and
schedule increases, and not just for space acquisitions but all DOD
weapons acquisitions.

We also have reported on cross-cutting factors that make it more difficult
for DOD to achieve a match between resources and requirements for space
acquisitions. First, space systems may suffer from more requirements
pressures than other weapon systems because there is usually a very broad
constituency-contractors, military services, civilian users,
administrations, and Congress-behind each satellite program. This creates
challenges in making tough tradeoff decisions. The Global Positioning
System, for example, not only serves military users but also serves
civilians, supports various key economic sectors such as transportation
and communications, and is used by allies. As a result, when starting
these new systems, space program managers can expect to be inundated with
competing demands-not just among military users- but also among civilian
and industry users.

Second, space acquisition programs have historically attempted to satisfy
all requirements in a single step, regardless of the design challenge or
the maturity of technologies to achieve the full capability. There is a
variety of reasons for this, including a desire to include the most
advanced technologies onboard satellites, particularly in view of the
length of time it takes to develop space systems. However, this approach
invariably increases the technology challenges facing programs, and thus,
the risk that costly problems will be encountered.

Third, there is a tendency among space system acquisition programs to take
on technology development that should occur within the science and
technology (S&T) environment. Reasons for this include the greater ability
to secure funding for costly technology development within an acquisition
program versus a science and technology program, a belief among the
acquisition community that labs in charge of developing space technologies
do not adequately understand their needs, as well as

  DOD Starts More Programs than It Can Afford in the Long Run

communication gaps between the S&T and acquisition communities.
Nevertheless, our work has continually shown that allowing technology
development to carry over into product development increases the risk that
significant problems will be discovered late in development. Addressing
such problems may require more time, money, and effort to fix because they
may require more extensive retrofitting and redesign as well as testing.
Moreover, when there are many unknowns about critical technologies, a
program cannot reliably estimate what resources will be needed to complete
a program-leaving DOD and the Congress in a position of committing to
large investments without knowing how much they will truly cost or how
long it will actually take for capabilities to be delivered.

There is a widespread belief among DOD and other officials involved with
space programs that DOD starts more programs than it can afford in the
long run, forcing programs to underestimate costs and over-promise
capability and creating a host of negative incentives and pressures.
Specifically, officials we have spoken with cited the following.

o  	Because programs are funded annually and priorities have not been
established, competition for funding continues over time, forcing programs
to view success as the ability to secure the next installment rather than
the end goal of delivering capabilities when and as promised.

o  	Concurrently, when faced with lower budgets, senior executives within
the Office of the Secretary of Defense and the Air Force would rather make
across-the-board cuts to all space programs than hard decisions as to
which ones to keep and which ones to cancel or cut back.

o  	Having to continually "sell" a program creates incentives to suppress
bad news about a program's status and avoid activities that uncover bad
news.

o  	When combined with the high cost of launching demonstrators into
space, the competition for funding often encourages programs to avoid
testing technologies in space before acquisition programs are started.

Our previous reports have found that these pressures are long-standing and
common to weapon acquisitions, not just space acquisitions. The
competition within DOD to win funding and get approval to start a new
program is intense, creating strong incentives to make a weapon system
stand out from existing or alternative systems. Moreover, overall DOD
funding constraints put a high priority on appearing affordable, making it

  Keys to Overcoming Space Acquisition Problems

important for program sponsors to provide cost estimates that will fit
within the funding constraints. Instead of forcing trade-offs, challenging
performance requirements-when coupled with other constraints, such as cost
or the weight of the satellite-can drive product developers to pursue
exotic solutions and technologies that, in theory, can do it all.

Our work has shown that fundamental changes are necessary to stem cost and
schedule increases and enable DOD to field new capabilities more
efficiently and effectively. The following actions, in particular, would
assure that DOD can match resources to requirements before its starts new
programs and that it has an investment strategy in place that would
prevent it from starting more programs than it can afford.

Specifically, to better match resources to requirements, DOD should do the
following.

o  	Implement processes and policies that stabilize requirements. Our
reports over the years as well as many DOD studies have pointed to a need
to stabilize requirements for all weapons system development. In response,
the Office of the Secretary of Defense has taken steps to strengthen
requirements setting department-wide, principally by establishing its new
Joint Capabilities Integration and Development System (JCIDS). JCIDS is
focused on achieving greater across-the-board agreement up front on what
capabilities need to be achieved and how they are to be achieved. Because
this system is relatively new, it is too early to determine whether it is
addressing requirements setting problems within DOD. The Air Force has
also taken measures to strengthen requirements setting for key systems
such as SBIRS-High and Space Radar, including instituting high-level
boards to approve of new requirements and processes that ensure the right
officials are involved. However, we reported on Space Radar in July 2004
that even these changes were not ensuring that the intelligence
community-a major stakeholder in Space Radar-was in agreement with
requirements and that all stakeholders would be held accountable for their
agreements. DOD is now working on strengthening its partnership within the
Space Radar program to avoid this problem.

o  	Separate technology development from acquisition. We have previously
reported that DOD's practice of taking on technology development
concurrently with product development stands in sharp contrast to that
followed by successful programs and the approach recommended by DOD's
acquisition policy for weapon systems. Successful programs will not commit
to undertaking product development unless they have a high confidence that
they have achieved a match between what the customer

wants and what the program can deliver. Technologies that are not mature
continue to be developed in an environment that is focused solely on
technology development. Another key to success is employing the technique
of systems engineering to close the gaps between available technologies
and customer needs before committing to new product development. This puts
programs in a better position to succeed because they can focus on design,
system integration, and manufacturing. DOD has made some efforts to
address this problem. For example, it has recently revised its space
acquisition policy, in part to encourage programs to attain more knowledge
about technologies before starting. It has developed a strategy for space
S&T to help strengthen partnerships between the acquisition and S&T
communities and assure they are working toward common goals. It has
strengthened its systems engineering capabilities. Department-wide, DOD
has expanded the authorities of its Director of Defense Research and
Engineering (DDR&E) to help keep technology development out of acquisition
programs and within the S&T communities. However, we remain concerned that
these measures will not be sufficient. The space acquisition policy, for
example, still allows programs to begin before demonstrating technologies
in an operational or simulated environment. Moreover, DOD is still
approving new programs like TSAT even when many of their critical
technologies are still immature. In fact, in our 2005 department-wide
assessment of selected major weapon programs, we found that only 15
percent of the programs we assessed began system development having
demonstrated all of their technologies mature.

o  	Adopt an evolutionary development approach for its space systems, that
is, pursue incremental increases in capability versus significant leaps.
Our examinations of best practices have found that this approach can
decrease time and cost for development because it closes gaps in unknowns.
DOD's space acquisition policy states its preference for evolutionary
development, and DOD pursued evolutionary approaches in the past with GPS.
But, more often, it has attempted to achieve significant leaps in
capability in one step. Moreover, DOD officials have told us that they are
pursuing evolutionary development for space systems, when, in fact, they
are beginning programs by challenging program managers to achieve
significant leaps in capability with the intention of abandoning those
efforts later in the development cycle should too many problems be
encountered. This is not a true evolutionary approach, as it still leaves
DOD facing increased technical challenges at the beginning of a program
and thus, increased risks, and it raises expectations on the part of
stakeholders who may be unwilling to accept less capability later on.

o  	Address other resource shortfalls. As noted earlier, our reports have
identified other resource gaps that should be addressed by DOD. For
example, DOD S&T officials cited shortages of staff with science and
engineering backgrounds and had more concerns about the future since their
workforces were reaching retirement age. Officials who oversee programs
cited deficiencies in the program manager workforce- particularly when it
comes to experience and knowledge in dealing with contractors. In
addition, funding for testing space technologies has decreased, cost to
launch experiments have increased, and opportunities for testing have been
reduced with the loss of the space shuttle, which had been partially used
for DOD-related technology experiments. DOD concurred with our
recommendation that it develop plans for addressing these shortages. The
Congress has also called on DOD to strengthen its efforts to revitalize
its space workforce, and we are undertaking a review for your committee on
progress being made by the DOD.

DOD should also guide its decisions to start acquisition programs with an
overall investment strategy. Our recent reports on space and other weapon
systems have suggested that having a department-wide investment strategy
for weapon systems would help reduce pressures facing acquisition
programs. For space in particular, a strategy would help DOD rebalance its
investments in acquisition programs as it continues to contend with cost
increases from its programs. Moreover, it would also help DOD balance
investments between S&T and acquisition. This is particularly important
since DOD is undertaking a range of initiatives- collectively known as
operationally responsive space-designed to facilitate evolutionary
development, more testing of technologies before acquisition, and
ultimately, enable DOD to deliver space-based capabilities to the
warfighter much faster and cheaper.

Critical components of an investment strategy would include identifying
overall capabilities and how to achieve them, that is, what role space
will play versus other air-, sea-, and land-based assets; identifying
priorities for funding; and implementing mechanisms that would enforce the
strategy. While DOD has made revisions to its requirements-setting and
budgeting processes to strengthen investment planning, it is unclear as to
how these changes will be implemented over time and whether they can serve
as a foundation for direction of space S&T and acquisition investments.

                                    - - - -

In conclusion, there is no question that space acquisition programs are
encountering cost increases and schedule delays that are having negative

effects-both in terms of DOD's ability to deliver current capabilities as
well as its ability to deliver future capabilities. Many of these problems
are rooted in past mistakes and their impact will be felt for years to
come. Nevertheless, it is exceedingly important that DOD takes whatever
midcourse corrections it can and ensures it has a foundation in place that
puts acquisition programs on a better path, particularly since DOD is
counting on its future space programs to play an increasingly critical
role in national security and military operations. At this juncture, DOD
must still adopt practices that better match resources to requirements
before starting its acquisition programs and decide exactly what role
space will play in achieving future desired capabilities and what programs
merit the highest priorities. At the same time, DOD must continue its
efforts to assure it has the right resources to carry out increasingly
technically challenging programs-including workforce, funds for testing,
less costly and more responsive launch systems, and standardized
components-and that it continue to seek ways to deliver capability much
more efficiently and effectively. All of these changes will not be easy to
undertake. They require significant shifts in thinking about how space
systems should be developed; changes in incentives and perceptions; as
well as further policy and process changes. As a result, these efforts
will require strong and sustained commitment from senior executives and
encouragement from the Congress.

Mr. Chairman and Members of the Subcommittee, this concludes my statement.
I would be happy to respond to any questions that you or other members of
the Subcommittee may have.

  Scope and Methodology

Contacts and Acknowledgments

(120472)

In preparing for this testimony, we relied on previously issued GAO
reports on assessments of individual space programs, incentives and
pressures that drive space system acquisition problems, common
problems affecting space system acquisitions, space science and
technology, and DOD's space acquisition policy, as well as our reports on
best practices for weapon systems development. We also analyzed DOD's
Selected Acquisition Reports to assess cost increases and investment
trends. We conducted our review between June 23 and July 12, 2005 in
accordance with generally accepted government auditing standards.

For future information, please contact Bob Levin at 202-512-4841 or
[email protected]. Individuals making contributions to this testimony include
Cristina Chaplain, Maricela Cherveny, Art Gallegos, Jean Harker,
John Krump, and Nancy Rothlisberger.

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