    Defense Acquisitions: Key Decisions to Be Made on Future Combat
    System (15-MAR-07, GAO-07-376).

    The Future Combat System (FCS) is central to Army transformation
    efforts, comprising 14 integrated weapon systems and an advanced
    information network. In previous work, GAO found that the
    elements of a sound business case--firm requirements, mature
    technologies, a knowledge-based acquisition strategy, a realistic
    cost estimate, and sufficient funding--were not present. As a
    result, FCS is considered high risk and in need of special
    oversight and review. Congress has mandated that the Department
    of Defense (DOD) decide in early 2009 whether FCS should
    continue. GAO is required to review the program annually. In this
    report, GAO analyzes FCS development, including its requirements
    definition; status of critical technologies, software
    development, and complementary programs; soundness of its
    acquisition strategy related to design, production and spin-out
    of capabilities to current forces; and reasonableness of costs
    and sufficiency of funding.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-376
        ACCNO:   A66929
      TITLE:     Defense Acquisitions: Key Decisions to Be Made on Future
    Combat System
         DATE:   03/15/2007
      SUBJECT:   Cost analysis
    	     Critical technologies
    	     Defense capabilities
    	     Defense procurement
    	     Developmental testing
    	     Information technology
    	     Operational testing
    	     Procurement planning
    	     Program evaluation
    	     Reporting requirements
    	     Research and development
    	     Risk assessment
    	     Strategic planning
    	     Systems design
    	     Unmanned aerial systems
    	     Weapons systems
    	     Cost estimates
    	     Army Future Combat Systems
    	     Army Warfighter Information Network
    	     C-130 Aircraft
    	     DOD Joint Tactical Radio System

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    GAO-07-376

         * [1]Results in Brief
         * [2]Background

              * [3]Elements of a Business Case
              * [4]Agency and Congressional Actions Since Our Last Report

         * [5]Despite Progress, FCS Requirements Must Still Prove Technica

              * [6]Army Has Made Progress in Defining System-Level Requirements

                   * [7]Some Key Requirements and Design Trade-offs Have Been
                     Made

              * [8]Technical Feasibility of System-Level Requirements Based on

                   * [9]Technical Feasibility Dependent on Addressing Some High
                     Leve

                        * [10]Network
                        * [11]Weight and Reliability
                        * [12]System-Specific Risks

                   * [13]Cost Could Force Additional Requirements Trade-offs

              * [14]Considerations for the 2009 FCS Milestone Review

         * [15]Army Reports Significant Progress, but Major Technological C

              * [16]FCS Critical Technologies Are Maturing Faster Than Predicted

                   * [17]Active Protection System
                   * [18]Lightweight Hull and Vehicle Armor
                   * [19]Technology Maturity Must Be Seen in a Broader Context

              * [20]Army Reassessing Complementary Programs

                   * [21]JTRS
                   * [22]WIN-T

              * [23]Army Is Devoting Considerable Attention to Software Developm
              * [24]Disciplined Approach Needed to Manage Unprecedented Amount o

                   * [25]Considerable Risks Remain with Software Development

              * [26]Considerations for the 2009 FCS Milestone Review

         * [27]Concurrent Acquisition Strategy Will Provide for Late Demons

              * [28]Acquisition Strategy Will Demonstrate Design Maturity after
              * [29]System-Level Testing Compressed into Late Development and Ea
              * [30]Spin-Outs Support the Current Force but Place More Demands o
              * [31]Considerations for the 2009 FCS Milestone Review

         * [32]Likely Growth of FCS Costs Increases Tension between Program

              * [33]New Independent Estimates Indicate Higher FCS Acquisition Co

                   * [34]Soft Knowledge Base for Cost Estimates Portends Future
                     Cost
                   * [35]Army Steps to Control FCS Program Costs
                   * [36]Funding Constraints Have Forced the Army to Restructure
                     Its

              * [37]Considerations for the 2009 FCS Milestone Review

         * [38]Conclusions

              * [39]Recommendations for Executive Action

         * [40]Agency Comments and Our Evaluation
         * [41]GAO's Mission
         * [42]Obtaining Copies of GAO Reports and Testimony

              * [43]Order by Mail or Phone

         * [44]To Report Fraud, Waste, and Abuse in Federal Programs
         * [45]Congressional Relations
         * [46]Public Affairs

    Report to Congressional Committees

    United States Government Accountability Office

    GAO

    March 2007

    DEFENSE ACQUISITIONS

    Key Decisions to Be Made on Future Combat System

    GAO-07-376

    Contents

    Letter 1

    Results in Brief 2
    Background 3
    Despite Progress, FCS Requirements Must Still Prove Technically Feasible
    and Affordable 10
    Army Reports Significant Progress, but Major Technological Challenges
    Remain 18
    Concurrent Acquisition Strategy Will Provide for Late Demonstration of FCS
    Capabilities 30
    Likely Growth of FCS Costs Increases Tension between Program Scope and
    Available Funds 40
    Conclusions 47
    Agency Comments and Our Evaluation 49
    Appendix I Scope and Methodology 52
    Appendix II Comments from the Department of Defense 53
    Appendix III Technology Readiness Levels 56
    Appendix IV Technology Readiness Level Ratings 58
    Related GAO Products 60

    Tables

    Table 1: FCS Software Blocks, Percentage of Completion, and Delivery Dates
    28
    Table 2: Key FCS Test Event Schedule 35
    Table 3: Comparison of the Original Cost Estimate and Recent Cost
    Estimates for the FCS Program (in billions of dollars) 41
    Table 4: Annual and Cumulative FCS Funding and Planned Events and
    Achievements 43
    Table 5: Technology Readiness Level Descriptions 56

    Figures

    Figure 1: FCS's Core Systems 5
    Figure 2: Flow of FCS's Overarching Requirements to System-Level
    Requirements 11
    Figure 3: TRL 6 Projections over Time 19
    Figure 4: FCS Projected Software Lines of Code (in thousands) 27
    Figure 5: Acquisition Compared with Commercial Best Practices 32

    Abbreviations

    DOD Department of Defense
    FCS Future Combat System
    JTRS Joint Tactical Radio System
    TG Terminal Guidance
    TRL Technology Readiness Level
    WIN-T Warfighter Information Network-Tactical

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office

    Washington, DC 20548

    March 15, 2007

    Congressional Committees

    As the centerpiece of the Army's transformation to a lighter, more agile,
    and more capable combat force, the Future Combat System (FCS)
    program--which comprises 14 integrated weapon systems and an advanced
    information network needed for a brigade combat team--is considered to be,
    according to the Army, the greatest technology and integration challenge
    it has ever undertaken. The Army started its FCS program in May 2003
    without fulfilling the basic elements of a business case--that is,
    determining if the program's requirements and concept were valid and that
    the concept could be successfully developed with existing resources
    including proven technologies, stable design, adequate funding, and
    adequate time. The Army projects the FCS program will cost $163.7 billion,
    which has been adjusted for inflation, but does not include key
    complementary programs. As a result, the program is recognized as being
    high risk and in need of special oversight and review. In 2006, Congress
    mandated that the Department of Defense (DOD) hold an FCS milestone
    review, essentially a "go/no-go" decision, following its preliminary
    design review, which is now scheduled for early 2009.

    Given its cost, scope, and technical challenges, section 211 of the
    National Defense Authorization Act for Fiscal Year 2006 requires GAO to
    report annually on the FCS program.1 The specific objectives of this
    report are to assess FCS progress in terms of (1) definition of
    requirements; (2) status of critical technologies, software development,
    and complementary programs; (3) the soundness of the acquisition strategy
    as it relates to design and production as well as the spin-out of
    capabilities to current forces; and (4) reasonableness of program costs
    and whether funds have been committed to complete the program as planned.

    In conducting our work, we have contacted numerous DOD and Army offices.
    We reviewed documents pertaining to the FCS program, attended meetings at
    which DOD and Army officials reviewed program progress, and held
    discussions with key DOD and Army officials on various aspects of the
    program. Officials from DOD and the Army have provided us access to
    sufficient information to make informed judgments on the matters in this
    report. In addition, we drew from our body of past work on weapon systems
    acquisition practices. We performed our work from March 2006 to March 2007
    in accordance with generally accepted government auditing standards.
    Appendix I further discusses our scope and methodology.

    1Pub. L. No. 109-163, S 211.

    Results in Brief

    To date, the FCS program has spent about $8 billion despite having
    significantly less knowledge--and less assurance of success--than required
    by best practices or DOD policy. By early 2009, enough knowledge should be
    available about the key elements of the FCS business case to make a
    well-informed decision on whether and how to proceed with the program. If
    significant doubts remain regarding the program's executability, DOD will
    have to consider alternatives to proceeding with the program as planned.
    Central to the go/no-go decision will be demonstrable soundness of the FCS
    business case in the areas of requirements, technology, acquisition
    strategy, and finances. Our assessment of these elements today is as
    follows:

    Requirements: Progress has been made in defining requirements in greater
    detail, and some difficult trade-offs have been made. The Army believes
    that the FCS requirements are feasible, but that will not be certain until
    key assumptions about the performance of immature technologies and other
    technical risks are proven. Replacing these assumptions with knowledge is
    essential for completing the requirements process for the individual FCS
    systems, as additional performance trade-offs may be necessary.

    Technology: The Army has made progress in maturing technologies in the
    past year, but major challenges remain. It assesses about 80 percent of
    FCS technologies to be mature--double last year's number. The Army uses a
    lower standard for maturity than what GAO has found to be a best practice.
    The current assessment was not done independently as last year's had been.
    A sound business case would require FCS to have had all technologies
    mature in 2003 when the program began. It will still take several more
    years to mature key technologies to that point. Current estimates of FCS
    software--the most in any weapon system program--are double initial
    estimates. The Army is attempting to incorporate a number of best
    practices into its development effort, and some initial increments of
    software have been delivered on time.

    Acquisition Strategy: Even if all goes as planned, the FCS strategy will
    provide for late demonstration of performance. Similar to technologies,
    design reviews of FCS systems will be done quite late in the program and
    key testing will not begin until just prior to the initial production
    decision. Relative to best practices, maturity of design and production
    will not be demonstrated until after the production decision. The Army has
    started to implement its plans to spin out some early FCS technologies and
    systems to current Army forces and that effort is expected to place more
    demands on FCS test resources.

    Program Costs: FCS costs are likely to grow, which will increase the
    tension between the program's scope and available funds. While the Army
    has only slightly changed its cost estimate of $160.7 billion since last
    year, independent cost estimates put costs at between $203 billion to
    nearly $234 billion. The tension between program scope and available funds
    has led to the Army's recent announcement to buy fewer systems and slow
    production rates. This will be the second restructuring in 4 years. These
    changes will affect program costs, but full details are not yet available.

    Anticipating that further changes will need to be made to the program, we
    are making several recommendations to the Secretary of Defense on specific
    criteria that should be considered during the 2009 milestone review and
    the need to analyze alternatives to the program should the FCS fail to
    deliver needed capabilities within reasonable time frames and expected
    funding. In commenting on a draft of this report, DOD concurred with our
    recommendations.

    Background

    The FCS concept is designed to be part of the Army's Future Force, which
    is intended to transform the Army into a more rapidly deployable and
    responsive force that differs substantially from the large
    division-centric structure of the past. The Army is reorganizing its
    current forces into modular brigade combat teams, each of which is
    expected to be highly survivable and the most lethal brigade-sized unit
    the Army has ever fielded. The Army expects FCS-equipped brigade combat
    teams to provide significant warfighting capabilities to DOD's overall
    joint military operations. The Army is implementing its transformation
    plans at a time when current U.S. ground forces continue to play a
    critical role in the ongoing conflicts in Iraq and Afghanistan. The Army
    has instituted plans to spin out selected FCS technologies and systems to
    current Army forces throughout the program's system development and
    demonstration phase.

    As we were preparing this report, the Army made a number of adjustments to
    its plans for the FCS program. The revised program will no longer include
    all 18 systems as originally planned. The FCS family of weapons is now
    expected to include 14 manned and unmanned ground vehicles, air vehicles,
    sensors, and munitions that will be linked by an advanced information
    network. The systems include

               o eight new types of manned ground vehicles to replace current
               tanks, infantry carriers, and self-propelled howitzers;
               o two classes of unmanned aerial vehicles;
               o several unmanned ground vehicles; and
               o an attack missile.

    Fundamentally, the FCS concept is to replace mass with superior
    information--allowing soldiers to see and hit the enemy first rather than
    to rely on heavy armor to withstand a hit. This solution attempts to
    address a mismatch that has posed a dilemma to the Army for decades: the
    Army's heavy forces had the necessary firepower needed to win but required
    extensive support and too much time to deploy while its light forces could
    deploy rapidly but lacked firepower. If the Future Force becomes a
    reality, then the Army would be better organized, staffed, equipped, and
    trained for prompt and sustained land combat, qualities intended to ensure
    that it would dominate over evolving, sophisticated threats. The Future
    Force is to be offensively oriented and will employ revolutionary concepts
    of operations, enabled by new technology. The Army envisions a new way of
    fighting that depends on networking the force, which involves linking
    people, platforms, weapons, and sensors seamlessly together in a
    system-of-systems.

    Figure 1: FCS's Core Systems

    If successful, the FCS system-of-systems concept will integrate individual
    capabilities of weapons and platforms, thus facilitating interoperability
    and open system designs. This would represent significant improvement over
    the traditional approach of building superior individual weapons that must
    be retrofitted and netted together after the fact. This transformation, in
    terms of both operations and equipment, is under way with the full
    cooperation of the Army warfighter community. In fact, the development and
    acquisition of FCS is being accomplished using a uniquely collaborative
    relationship among the Army's developers, the participating contractors,
    and the warfighter community.

    The Army has employed a management approach for FCS that centers on a lead
    systems integrator to provide significant management services to help the
    Army define and develop FCS and reach across traditional Army mission
    areas. Because of its partner-like relationship with the Army, the lead
    systems integrator's responsibilities include requirements development,
    design, and selection of major system and subsystem subcontractors. The
    team of Boeing and Science Applications International Corporation is the
    lead systems integrator for the FCS system development and demonstration
    phase of acquisition, which is expected to extend until 2017. The FCS lead
    systems integrator acts on behalf of the Army to optimize the FCS
    capability, maximize competition, ensure interoperability, and maintain
    commonality in order to reduce life-cycle costs. Boeing also acts as an
    FCS supplier in that it is responsible for developing two important
    software subsystems. The Army advised us that it did not believe it had
    the resources or flexibility to use its traditional acquisition process to
    field a program as complex as FCS under the aggressive timeline
    established by the then-Army Chief of Staff. The Army will maintain
    oversight and final approval of the lead systems integrator's
    subcontracting and competition plans. The FCS lead systems integrator
    originally operated under a contractual instrument called an "other
    transaction agreement." In 2006, the Army completed the conversion of that
    instrument to a more typical contract based on the Federal Acquisition
    Regulation. As required by section 115 of the John Warner National Defense
    Authorization Act for Fiscal Year 2007, we are reviewing the contractual
    relationship between the Army and the lead systems integrator and will be
    reporting on that work separately.2

    Elements of a Business Case

    We have frequently reported on the wisdom of using a solid, executable
    business case before committing resources to a new product development
    effort. In the case of DOD, a business case should be based on DOD
    acquisition policy and lessons learned from leading commercial firms and
    successful DOD programs. The business case in its simplest form is
    demonstrated evidence that (1) the warfighter's needs are valid and that
    they can best be met with the chosen concept, and (2) the chosen concept
    can be developed and produced within existing resources--that is, proven
    technologies, design knowledge, adequate funding, adequate time, and
    management capacity to deliver the product when it is needed. A program
    should not go forward into product development unless a sound business
    case can be made. If the business case measures up, the organization
    commits to the product development, including making the financial
    investment.

    2Pub. L. No. 109-364, S 115 (2006).

    At the heart of a business case is a knowledge-based approach to product
    development that is both a best practice among leading commercial firms
    and the approach preferred by DOD in its acquisition policies. For a
    program to deliver a successful product within available resources,
    managers should demonstrate high levels of knowledge before significant
    commitments are made. In essence, knowledge supplants risk over time. This
    building of knowledge can be described as three levels or points that
    should be attained over the course of a program.

               o First, at program start, the customer's needs should match the
               developer's available resources--mature technologies, time,
               funding, and management capacity. An indication of this match is
               the demonstrated maturity of the technologies needed to meet
               customer needs.3 The ability of the government acquisition
               workforce to properly manage the effort should also be an
               important consideration at program start.
               o Second, about midway through development, the product's design
               should be stable and demonstrate that it is capable of meeting
               performance requirements. The critical design review is the
               vehicle for making this determination and generally signifies the
               point at which the program is ready to start building
               production-representative prototypes.
               o Third, by the time of the production decision, the product must
               be shown able to be manufactured within cost, schedule, and
               quality targets and have demonstrated its reliability. It is also
               the point at which the design must demonstrate that it performs as
               expected through realistic system-level testing.

    3Technology readiness levels (TRLs) are a way to measure the maturity of
    technology. According to best practices, technology is considered
    sufficiently mature to start a program when it reaches a readiness level
    of 7. This involves a system or prototype demonstration in an operational
    environment. The prototype is near or at the planned operational system.
    Appendix III lists the definitions for all TRLs.

    A delay in attaining any one of these levels delays the points that
    follow. If the technologies needed to meet requirements are not mature,
    design and production maturity will be delayed. In successful commercial
    and defense programs that we have reviewed, managers were careful to
    develop technology separately from and ahead of the development of the
    product. For this reason, the first knowledge level is the most important
    for improving the chances of developing a weapon system within cost and
    schedule estimates. DOD's acquisition policy has adopted the
    knowledge-based approach to acquisitions. DOD policy requires program
    managers to demonstrate knowledge about key aspects of a system at key
    points in the acquisition process. Program managers are also required to
    reduce integration risk and demonstrate product design prior to the design
    readiness review and to reduce manufacturing risk and demonstrate
    producibility prior to full-rate production.

    The FCS program is about one-third of the way into its scheduled product
    development. At this stage, the program should have attained knowledge
    point one, with a strategy for attaining knowledge points two and three.
    Accordingly, we analyzed the FCS business case first as it pertains to
    firming requirements and maturing technologies, which indicate progress
    against the first knowledge point. We then analyzed FCS's strategy for
    attaining design and production maturity. Finally, we analyzed the costs
    and funding estimates made to execute the FCS business case.

    Agency and Congressional Actions Since Our Last Report

    In our previous report on the FCS program, released in March 2006, we
    reported that the program entered the development phase in 2003 without
    reaching the level of knowledge it should have attained in the
    pre-development phase.4 The elements of a sound business case were not
    reasonably present, and we noted that the Army would continue building
    basic knowledge in areas such as requirements and technologies for several
    more years. We concluded that in order for the FCS program to be
    successful, an improved business case was needed.

    The Defense Acquisition Board met in May 2006 to review the FCS program.
    That review approved the Army approach to spin out certain FCS
    technologies to current Army forces in 2008 and directed the Army to
    continue with yearly in-process reviews and a Defense Acquisition Board
    meeting in the late 2008 timeframe. Performance expectations were also
    established for the review. During the meeting, it was noted that
    significant cost and schedule risk remains for the program and that
    reductions in scope and more flexibility in schedule are needed to stay
    within current funding constraints.

    4GAO, Defense Acquisitions: Improved Business Case Is Needed for Future
    Combat System's Successful Outcome, [47]GAO-06-367 (Washington, D.C.: Mar.
    14, 2006).

    Also in 2006, Congress mandated that the Secretary of Defense conduct a
    milestone review for the FCS program, following the preliminary design
    review scheduled for early 2009.5 Congress stated that the review should
    include an assessment of whether (1) the needs are valid and can be best
    met with the FCS concept, (2) the FCS program can be developed and
    produced within existing resources, and (3) the program should continue as
    currently structured, be restructured, or be terminated. The Congress
    required the Secretary of Defense to review specific aspects of the
    program, including the maturity of critical technologies, program risks,
    demonstrations of the FCS concept and software, and a cost estimate and
    affordability assessment and to submit a report of the findings and
    conclusions of the review to Congress. Additionally, Congress has required
    the Secretary of Defense to provide an independent cost estimate that will
    encompass costs related to the FCS program and a report on the estimate.
    The Institute for Defense Analyses is expected to deliver this analysis to
    Congress by April 2007.

    Finally, in response to concerns over funding shortfalls and other
    resource issues for fiscal years 2008 to 2013, the Army has recently made
    a number of changes to its plans for the FCS program. Although complete
    details are not yet available, the Army plans to

               o reduce the number of individual systems from 18 to 14 including
               eliminating 2 unmanned aerial vehicles;
               o slow the rate of FCS production from 1.5 to 1 brigade combat
               team per year;
               o change the total quantities to be bought for several systems;
               and
               o reduce the number of planned spin-outs from four to three.

    Full details of the Army's plans were not available at the time of this
    report. Based on what is known, program officials expect that the
    production period for the 15 brigade combat teams would be extended from
    2025 to 2030. The initial operating capability date would also be delayed
    by 5 months to the third quarter of fiscal year 2015.

    5John Warner National Defense Authorization Act for Fiscal Year 2007, Pub.
    L. No. 109-364, S 214 (2006).

    Despite Progress, FCS Requirements Must Still Prove Technically Feasible and
    Affordable

    The Army has made considerable progress in defining system-of-systems
    level requirements and allocating those requirements to the individual FCS
    systems. This progress has necessitated making significant trade-offs to
    reconcile requirements with technical feasibility. A key example of this
    has been to allow a significant increase in manned ground vehicle weight
    to meet survivability requirements which in turn has forced trade-offs in
    transportability requirements. The feasibility of FCS requirements still
    depends on a number of key assumptions about immature technologies, costs,
    and other performance characteristics like the reliability of the network
    and other systems. As current assumptions in these areas become known,
    more trade-offs are likely. At this point, the Army has identified about
    70 high technical risks that need to be resolved to assure the technical
    feasibility of requirements.

    Army Has Made Progress in Defining System-Level Requirements

    The Army has defined 552 warfighter requirements for the FCS brigade
    combat team that are tied to seven key performance parameters:
    network-ready, networked battle command, networked lethality,
    transportability, sustainability/reliability, training, and survivability.
    Collectively, the Army has stated that the FCS-equipped brigade combat
    teams must be as good as or better than current Army forces in terms of
    lethality, responsiveness, sustainability, and survivability. In August
    2005, the Army and the lead systems integrator translated the warfighter
    requirements into 11,500 more specific system-of-systems level
    requirements, established the functional baseline for the program, and
    allocated requirements to individual FCS systems. Since then, the
    contractors have clarified their design concepts and provided feedback on
    the technical feasibility and affordability of the requirements.

    In an August 2006 review, the Army and its lead systems integrator reduced
    the number of warfighter requirements to 544, but increased the
    system-of-systems requirements to 11,697. Of the system-of-system
    requirements, 289 have "to be determined" items and 819 have open issues
    to be resolved. At this review, the FCS requirements were translated
    further down to the individual system level, totaling about 90,000. The
    system level requirements provide the specificity needed for the
    contractors to fully develop detailed designs for their individual
    systems. While the stages of translating requirements for FCS are typical
    for weapon systems, the enormous volume suggests the complex challenge
    that a networked system-of-systems like FCS presents.

    Figure 2 illustrates how the FCS requirements are translated from the
    warfighter to the individual systems.

    Figure 2: Flow of FCS's Overarching Requirements to System-Level
    Requirements

    Leading up to the review, the lead systems integrator and the
    subcontractors identified over 10,000 "to-be-determined" items and issues
    to be resolved related to the flow-down of the system-of-systems
    requirements to the FCS system-level requirements. The "to-be-determined"
    items generally involve the need for the user community and the developers
    to come to an understanding on a way to better specify or quantify the
    requirement. A common issue to be resolved involves the need for
    compromise between the users and developers when the design solution may
    not be able to fully meet the initially allocated requirement. The Army
    and lead systems integrator plan to resolve the "to-be-determined" items
    and issues prior to the preliminary design review in early 2009.6

    The Army and lead systems integrator are also developing a network
    requirements document that is intended to provide end-to-end network
    requirements in an understandable format to inform the system-level
    requirements. The number of network requirements in this document has not
    yet been determined. However, the Army and lead systems integrator have
    identified about 2000 "to-be-determined" items and issues to be resolved
    in this area that need to be addressed and clarified. The Army and lead
    systems integrator expect to complete this work by the time of the
    preliminary design review.

      Some Key Requirements and Design Trade-offs Have Been Made

    The Army and its subcontractors have already made some trade-offs as they
    continue to refine their system design concepts and the FCS system-level
    requirements. One key trade-off came in the area of the projected weight
    of the manned ground vehicles and their transportability by aircraft.
    Originally, the manned ground vehicles were to weigh less than 20 tons so
    they could be carried on the C-130 aircraft. These vehicles were to be
    lightly armored at 19 tons and with add-on armor bringing the total
    vehicle weight up to about 24 tons. However, the Army and its contractor
    team found that this design did not provide sufficient ballistic
    protection. Currently, the vehicle designs with improved ballistic
    protection are estimated to weigh between 27 and 29 tons. At this weight,
    it is practically impossible to transport the vehicles on the C-130s, and
    they are now being designed to be transported by the larger C-17 aircraft.
    Illustrative of the FCS design challenges, the added weight of the
    vehicles could have ripple effects for the designs of the engine,
    suspension, band track, and other subsystems. The Army still wants
    vehicles to be transportable by the C-130 when stripped of armor and other
    equipment, so that C-130 cargo size and weight limits will still serve to
    constrain the design of the manned ground vehicles. As these are primarily
    paper and simulated designs, the potential for future trade-offs is high.

    Another example involves the requirement that the manned ground vehicles
    be able to operate for several hours on battery power and without the
    engine running. Based on the analyses to date, it has been determined that
    current battery technologies would permit less than one hour of this
    "silent watch" capability. The Army, lead systems integrator, and the FCS
    subcontractors are continuing their assessments, as is the user community,
    which is re-evaluating which internal manned ground vehicle subsystems may
    need to operate in these situations. With less demand for power, the
    batteries are expected to last somewhat longer. As that work concludes,
    the Army will be able to determine the specific level of silent watch
    capability it can expect for the manned ground vehicles and how best to
    change the operational requirements document. The Army plans to finalize
    this and other requirement changes and numerous clarifications by the time
    of the preliminary design review in early 2009.

    6The Army will hold system level preliminary design reviews leading up to
    the system-of-systems level preliminary design review in early 2009.

    Technical Feasibility of System-Level Requirements Based on Numerous Assumptions

    The Army and lead systems integrator believe that most of the FCS
    system-level requirements are technically feasible and have decided that
    design work should proceed. However, as the design concepts and
    technologies mature, their actual performance does not necessarily match
    expectations, and trade-offs have to be made. To date, the Army has had to
    make a number of requirements and design changes that recognize the
    physical constraints of the designs and the limits of technology. Ideally,
    these trade-offs are made before a program begins. Because many
    technologies are not yet fully mature, significant trade-offs have been
    made and will continue to be necessary. The technical feasibility of FCS
    requirements still depends on a number of key assumptions about the
    performance of immature technologies, thus more trade-offs are likely as
    knowledge replaces assumptions. The challenge in making additional changes
    to requirements is at least two-fold: first is assessing the potential
    ripple effect of changing a requirement for one system on the thousands of
    other system requirements; the second is assessing the cumulative effect
    of numerous system level requirements changes on the overall
    characteristics of survivability, lethality, responsiveness, and
    supportability.

      Technical Feasibility Dependent on Addressing Some High Level Risks

    The Army has identified numerous known technical risks, about 70 of which
    are considered to be at a medium or high level. These involve the
    information network, characteristics like weight and reliability that cut
    across air and ground vehicles, and several system-specific risks. The
    Army is focusing management attention on these risks and has risk
    reduction plans in place. Nonetheless, the results of these technology
    development efforts will have continuing implications for design and
    requirements trade-offs.

        Network

    FCS survivability depends on the brigade-wide availability of
    network-based situational awareness plus the inherent survivability of the
    FCS platforms. There is hardly any aspect of FCS functionality that is not
    predicated on the network, and for many key functions, the network is
    essential. However, the FCS program manager has stated that the Army still
    has a lot yet to learn on how to successfully build such an advanced
    information network. Some of the network medium and high level risks
    include:

               o End-to-end quality of service on mobile ad-hoc networks. The
               probability is high that the FCS network will not be able to
               ensure that the information with the highest value is delivered to
               the recipients. Failure to support the warfighter in defining and
               implementing command intent for information management will result
               in substantially reduced force effectiveness, in a force that
               trades information for armor.

               o Wideband waveform availability. The current Joint Tactical Radio
               System Ground Mobile Radio program continues to pose risks because
               its schedule is not yet synchronized with the schedule for the
               core FCS program or FCS spin-outs. Any schedule slip in this area
               could lead to further delays. This consequence will mean
               integrators will not have Joint Tactical Radio System hardware in
               sufficient quantities, capability, and function to support the FCS
               schedule. In addition to schedule delays this could also
               jeopardize the network spin-outs, experiments, and the integration
               of the core program requirements.

               o Soldier radio waveform availability. The soldier radio waveform
               provides functional capabilities that are needed to support many
               FCS systems but may not be completed in time to support FCS
               development. These functional capabilities facilitate
               interoperability and gateway functions between the FCS family of
               systems. These systems are critical to FCS performance and delays
               of these functional capabilities will negatively impact the FCS
               schedule.

               o Spectrum availability and usage. There is a high likelihood that
               more frequency spectrum is required for all of the communications
               needs than will be available given current design assumptions.
               Lack of system spectrum may force a choice to operate without
               critical data due to reduced data throughput, reducing mission
               effectiveness and leading to possible failure.
               o Unmanned vehicle network latency. Unmanned ground and air
               vehicles are completely dependent on the FCS network for command
               and control interaction with their soldier/operators. Inadequate
               response time for unmanned payload tele-operation and target
               designation will result in degraded payload performance and
               targeting when these modes are required.

               o Net-ready critical performance parameter verification and
               testability. The Army recognizes the risk that FCS will not be
               able to adequately verify and test compliance with this parameter
               as it relates to the Global Information Grid.7 FCS is expected to
               have extensive connectivity with other services and agencies via
               the Grid. The risk is due to, among other things, the many
               yet-to-be-defined critical or enterprise interfaces which are
               being delivered in parallel. Failure to meet the net-ready
               testability requirements could result in, among other things,
               fielding delays and cost and schedule overruns.

        Weight and Reliability

    All of the unmanned and manned ground vehicles and several other FCS
    systems are expected to have difficulty meeting their assigned weight
    targets. According to program officials, about 950 weight reduction
    initiatives were being considered just for the manned ground vehicles. The
    Army expects the FCS program to make substantial progress toward meeting
    these goals by the time of the preliminary design review. It is not yet
    clear what, if any, additional trade-offs of requirements and designs may
    be needed to meet the FCS weight goals.

    High levels of reliability will be needed for the FCS brigade combat teams
    to meet their requirements for logistics footprint and supportability.
    Current projections indicate that many FCS systems--including the Class IV
    unmanned aerial vehicle, communications subsystems, and sensors--may not
    meet the Army's high expectations for reliability. The Army plans to
    address these issues and improve reliability levels by the time of the
    preliminary design review in 2009.

    7The Global Information Grid is a large and complex set of programs and
    initiatives intended to provide internet-like capability allowing users at
    virtually any location to access data on demand; share information in real
    time; collaborate in decision making, regardless of which military service
    produced which weapon system; and have greater joint command of a battle
    situation.

        System-Specific Risks

    The Army and lead systems integrator have also identified other medium to
    high risk issues that could affect the requirements and design concepts
    for individual FCS systems. These include:

               o Class I unmanned aerial vehicle heavy fuel engine. The Class I
               vehicle requires a heavy fuel engine that is small in size,
               lightweight, and operates with high power efficiency. Such an
               engine does not currently exist, and no single candidate system
               will meet all FCS requirements without additional development. An
               engine design that cannot balance size and power will critically
               affect compliance with several key requirements.

               o Lightweight track component maturation. Current band track
               designs do not meet mine blast requirements and may not meet the
               FCS durability requirement or the critical performance parameter
               requirements for reducing logistics footprint and reduced demand
               for maintenance and supply. Without enhanced mine blast
               resistance, vehicle mobility will be diminished, which could
               result in survivability impacts.

               o Vehicular motion effects. There is likelihood that system design
               may not preclude vehicular-induced motion sickness capable of
               degrading the crews' ability to execute their mission. These
               effects may reduce the ability of the crew to perform cognitive
               tasks while in motion, thereby reducing operational effectiveness.

               o Safe unmanned ground vehicle operations. If necessary
               operational experience and technology maturity is not achieved,
               the brigade combat teams may not be able to use these vehicles as
               planned. Also, if a high level of soldier confidence in the
               reliability and accuracy of fire control of weapons on moving
               unmanned ground vehicles is not achieved, the rules of engagement
               of these systems may be severely restricted.

      Cost Could Force Additional Requirements Trade-offs

    Unit cost reduction goals have been established at the FCS brigade combat
    team level and have been allocated down to the individual FCS systems and
    major subsystems. Many FCS systems are above their assigned average cost
    levels, and stringent reduction goals have been assigned. In particular,
    the manned ground vehicles have a significant challenge ahead to meet
    their unit cost goals. In order to meet these goals, requirements and
    design trade-offs will have to be considered.

    The Army faces considerable uncertainty about how much investment money it
    will have in the future for FCS. The Army has capped the total amount of
    development funding available for FCS, and the contract contains a
    provision to identify trade-offs to keep costs within that cap. Hence, if
    costs rise, trade-offs in requirements and design will be made to keep
    within the cap. Recent events provide a good example of this situation. In
    2006, the Army conducted a study to determine the number and type of
    unmanned aerial vehicles it can and should maintain in its inventory. All
    four of the FCS unmanned aerial vehicles were included in that study, and
    a decision has recently been made to remove the Class II and III vehicles
    from the core program. While this will free up money for other needs, the
    Army will have to reallocate the requirements from those unmanned aerial
    vehicles to other FCS systems.

    Considerations for the 2009 FCS Milestone Review

    As it proceeds to the preliminary design review and the subsequent
    go/no-go milestone, the Army faces considerable challenges in completing
    the definition of technically achievable and affordable system-level
    requirements, an essential element of a sound business case. Those
    challenges include

               o completing the definition of all system-level requirements for
               all FCS systems and the information network (including addressing
               the "to-be-determined" items and issues to be resolved);
               o completing the preliminary designs for all FCS systems and
               subsystems;
               o clearly demonstrating that FCS key performance parameters are
               achievable with confidence;
               o obtaining a declaration from the Army user community that the
               likely outcomes of the FCS program will meet its projected needs;
               o clearly demonstrating that the FCS program will provide
               capabilities that are clearly as good as or better than those
               available with current Army forces, a key tenet set out by the
               Army as it started the FCS development program in 2003;
               o mitigating FCS technical risks to significantly lower levels;
               and
               o making demonstrable progress towards meeting key FCS goals
               including weight reduction, reliability improvement, and average
               unit production cost reduction.

    Army Reports Significant Progress, but Major Technological Challenges Remain

    The Army has made progress in the areas of critical technologies,
    complementary programs, and software development. In particular, FCS
    program officials report that the number of critical technologies they
    consider as mature has doubled in the past year. While this is good
    progress by any measure, FCS technologies are far less mature at this
    point in the program than called for by best practices and DOD policy, and
    they still have a long way to go to reach full maturity. The Army has made
    some difficult decisions to improve the acquisition strategies for some
    key complementary programs, such as Joint Tactical Radio System and
    Warfighter Information Network-Tactical, but they still face significant
    technological and funding hurdles. Other complementary programs had been
    unfunded, but Army officials told us that these issues have been
    addressed. Finally, the Army and the lead systems integrator are utilizing
    many software development best practices and have delivered the initial
    increments of software on schedule. On the other hand, most of the
    software development effort lies ahead, and the amount of software code to
    be written--already an unprecedented undertaking--continues to grow as the
    demands of the FCS design becomes better understood. The Army and lead
    systems integrator have recognized several high risk aspects of that
    effort and mitigation efforts are underway.

    FCS Critical Technologies Are Maturing Faster Than Predicted Last Year

    Last year, we reported that an independent review team assessment revealed
    that 18 of the program's 49 critical technologies had reached Technology
    Readiness Level (TRL) 6--a representative prototype system in a relevant
    environment.8 The independent team projected that by 2006, 22 of FCS's 49
    critical technologies would reach TRL 6.9 The FCS program office currently
    assesses that 35 of 46 technologies are at or above TRL 6--a significantly
    faster maturation pace than predicted last year.10 Figure 3 compares the
    readiness levels of FCS technologies over a 3-year period.

    8A full explanation of technology readiness levels is presented in
    appendix III.

    9Previous FCS critical technology assessments have been evaluated by an
    independent review team. Although the latest assessment has not been
    independently reviewed, the Army expects to have an independently-reviewed
    critical technology assessment available for the preliminary design review
    in early 2009.

    10Since our previous report, a Critical Technology Working-Level
    Integrated Product Team recommended that the Army remove three critical
    technologies from its assessment. The team concluded that these
    technologies did not conform to DOD's definition of critical technologies
    because, in its view, the technologies did not constitute a unique or
    novel application.

    Figure 3: TRL 6 Projections over Time

    Several of these technologies jumped from a TRL 4 (low-fidelity breadboard
    design in a laboratory environment) to a TRL 6 including cross domain
    guarding solutions and the ducted fan for the Class 1 unmanned aerial
    vehicle. The program's technology officials maintain that such a leap can
    be made, even though it was not anticipated by the independent assessment.
    They cited the ducted fan technology for small unmanned aerial vehicles as
    an example. This technology was largely considered immature until a single
    demonstration showcased the system's capabilities in demanding conditions,
    which convinced Army leadership that the ducted fan technology was at a
    TRL 6. Appendix IV lists all critical technologies, their current TRL
    status, and the projected date for reaching TRL 6.

    However, not all of the FCS technologies are truly at a TRL 6. Two of the
    most important technologies for the success of manned ground vehicles and
    the overall FCS concept are lightweight armor and active protection. The
    Army has previously been more optimistic about the development pace for
    these technologies. However, during the past year, the Army recognized
    that the particular solutions they were pursuing for lightweight armor
    were inadequate and active protection only satisfied the conditions for a
    TRL 5.

      Active Protection System

    An active protection system is part of the comprehensive FCS hit avoidance
    system architecture that will protect the vehicles from incoming rounds,
    like rocket-propelled grenades and anti-tank missiles. The active
    protection system would involve detecting an incoming round or rocket
    propelled grenade and launching an interceptor round from the vehicle to
    destroy the incoming weapon. In mid-2006, the lead systems integrator
    (with Army participation) selected Raytheon from among numerous candidates
    to develop the architecture to satisfy FCS short-range active protection
    requirements. A subsequent trade study evaluated several alternative
    concepts and selected Raytheon's vertical launch concept for further
    development.

    While the FCS program office's most recent technology readiness assessment
    indicates that the active protection system is at TRL 6, a 2006 trade
    study found that the Raytheon concept had only achieved a TRL 5. Active
    protection system is a vital technology for the FCS concept to be
    effective, and the FCS manned ground vehicles survivability would be
    questionable without that capability. Not only will the active protection
    system concept chosen need additional technology development and
    demonstration, but it also faces system integration challenges and the
    need for safety verifications. Indeed, the Army recognizes that it faces a
    challenge in demonstrating if and how it can safely operate an active
    protection system when dismounted soldiers are nearby.

      Lightweight Hull and Vehicle Armor

    A fundamental FCS concept is to replace mass with superior
    information--that is to see and hit the enemy first rather than to rely on
    heavy armor to withstand a hit. Nonetheless, the Army has recognized that
    ground vehicles cannot be effective without an adequate level of ballistic
    protection. As a result, the Army has been developing lightweight hull and
    vehicle armor as a substitute for traditional, heavier armor. In the past
    year, the Army concluded that it would need additional ballistic
    protection and the Army Research Laboratory is continuing armor technology
    development to achieve improved protection levels and to reduce weight.
    The Army now anticipates achieving TRL 6 on the new armor formulation in
    fiscal year 2008, near the time of the manned ground vehicle preliminary
    design review. Armor will continue to be a technology as well as
    integration risk for the program for the foreseeable future.

      Technology Maturity Must Be Seen in a Broader Context

    As noted above, the Army's progress in FCS technology is notable compared
    with the progress of previous years. This progress, however, does need to
    be put in a broader context. The business case for a program following
    best practices in a knowledge-based approach is to have all of its
    critical technologies mature to TRL 7 (fully functional prototype in an
    operational environment) at the start of product development. For the FCS,
    this would mean having had all technologies at TRL 7 by May 2003. By
    comparison, even with the progress the program has made in the last year,
    fewer than 35 of FCS's 46 technologies have attained a lower maturity--TRL
    6--3 1/2 years after starting product development. Immature technologies
    are markers for future cost growth. In our 2006 assessment of selected
    major weapon systems, development costs for the programs that started
    development with mature technologies increased by a modest average of 4.8
    percent over the first full estimate, whereas the development costs for
    the programs that started development with immature technologies increased
    by a much higher average of 34.9 percent.11

    FCS program officials do not accept these standards. Rather, they maintain
    they only need to mature technologies to a TRL 6 by the time of the
    critical design review which is now scheduled for 2011. According to the
    Army's engineers, once a technology achieves TRL 6, they are no longer
    required to track the technology's progress. They maintain that anything
    beyond a TRL 6 is a system integration matter and not necessarily
    technology development. Integration often involves adapting the
    technologies to the space, weight, and power demands of their intended
    environment. To a large extent, this is what it means to achieve a TRL 7.
    This is work that needs to be accomplished before the critical design
    reviews and is likely to pose additional trade-offs the Army will have to
    make to reconcile its requirements with what is possible from a technology
    and engineering standpoint. Accordingly, the FCS program has singled out
    several critical technologies that have been assessed at TRL 6 but yet
    continue to have moderate or high risk that could have dire consequences
    for meeting program requirements if they are not successfully dealt with.
    Examples include:

               o High density packaged power. Current battery technology may not
               meet the performance levels needed to support the initial
               production of FCS. Among other things, calendar life, cost,
               cooling methods, safety, and thermal management have not been
               demonstrated. The potential impacts of this risk could affect not
               only vehicle propulsion but also lethality and supportability.
               o High power density engine. The Army has recognized that there is
               a risk that engine manufacturers may not have the capability to
               build a reliable, cost effective engine that will meet FCS
               requirements within the FCS program schedule. Engines have been
               tested that meet the power density required but not at engine
               power levels consistent with manned ground vehicle needs. The
               mitigation strategy includes engine testing to identify and
               correct potential engine design issues as soon as possible.

               o Hull anti-tank mine blast protection. The Army recognizes that
               there is a probability, given the weight constraints on FCS
               platforms and evolving blast mitigation technology, that the FCS
               hull and crew restraints will not protect the crew from life
               threatening injury due to anti-tank blast mines equal to (or
               greater than) the threshold requirement. The potential consequence
               is that the mobility and survivability of the brigade combat team
               will be affected. The FCS program and Army Research Laboratory are
               developing an anti-tank mine kit for each manned ground vehicle to
               meet requirements.

               o Highband networking waveform. FCS needs a high data rate
               capability to send sensor data and to support the FCS transit
               network. The Wideband Information Network-Tactical does not yet
               meet the performance requirements for size, weight, and power;
               signature management; and operational environments. There may be
               significant schedule and cost risk involved in getting that radio
               to meet the requirements. Without the high data rate capability,
               sensor data may not be presented in an adequate or timely fashion
               to perform targeting or provide detailed intelligence data to the
               warfighter.

               o Cross-domain guarding solution. FCS needs this technology to
               ensure the security of information transmitted on the FCS
               information network. The Army recognizes that it will be difficult
               to obtain certification and accreditation as well as to meet the
               space, weight, and power and interface requirements of FCS.
               Failure to address these concerns in a timely manner will result
               in delays in fielding FCS-equipped units and additional costs.

    11GAO, Defense Acquisitions: Assessments of Selected Major Weapon
    Programs, [48]GAO-06-391 (Washington, D.C.: Mar. 31, 2006).

    The FCS program will continue to face major technological challenges for
    the foreseeable future. The independent technology assessment planned to
    coincide with the preliminary design review in early 2009 should provide
    objective insights regarding the Army's progress on technology maturity
    and system integration issues.

    Army Reassessing Complementary Programs

    The FCS program may have to interoperate or be integrated with as many as
    170 other programs, some of which are in development and some of which are
    currently fielded programs. These programs are not being developed
    exclusively for FCS and are outside of its direct control. Because of the
    complementary programs' importance to FCS--52 had been considered
    essential to meeting FCS key performance parameters--the Army closely
    monitors how well those efforts will synchronize with the FCS program.
    However, many of these programs have funding or technical problems and
    generally have uncertain futures. We reported last year that the Army is
    reassessing the list of essential complementary programs given the
    multiple issues surrounding them and the budgetary constraints the Army is
    facing. In addressing the constrained budget situation in the 2008 to 2013
    program objective memorandum, program officials said the Army is
    considering reducing the set of systems. When the set of complementary
    programs is finalized, the Army will have to determine how to replace any
    capabilities eliminated from the list.

    Two complementary programs that make the FCS network possible, the Joint
    Tactical Radio System (JTRS) and the Warfighter Information
    Network-Tactical (WIN-T), were restructured and reduced in scope. A
    challenge in making changes in these programs is their individual and
    cumulative effects on FCS performance.

      JTRS

    JTRS is a family of software-based radios that is to provide the high
    capacity, high-speed information link to vehicles, weapons, aircraft,
    sensors, and soldiers. The JTRS program to develop radios for ground
    vehicles and helicopters--now referred to as Ground Mobile Radio --began
    product development in June 2002 and the Army has not yet been able to
    mature the technologies needed to generate sufficient power as well as
    meet platform size and weight constraints. A second JTRS program to
    develop variants of small radios that will be carried by soldiers and
    embedded in several FCS core systems--now referred to as Handheld,
    Manpack, and Small Form Factor radios--entered product development with
    immature technologies and a lack of well-defined requirements. In 2005,
    DOD directed the JTRS Joint Program Executive Office to develop options
    for restructuring the program to better synchronize it with FCS and to
    reduce schedule, technology, requirements, and funding risks.12 The
    restructuring plan was approved in March 2006 and is responsive to many of
    the issues we raised in our June 2005 report.13 However, the program still
    has to finalize details of the restructure including formal acquisition
    strategies, independent cost estimates, and test and evaluation plans.
    Further, there are still cost, schedule, and technical risks associated
    with the planned delivery of initial capabilities, and therefore it is
    unclear whether the capabilities will be available in time for the first
    spin-out of FCS capabilities to current forces in 2008. Fully developed
    prototypes of JTRS radios are not expected until 2010 or later.

      WIN-T

    The Army is developing WIN-T to provide an integrated communications
    network to connect Army units on the move with higher levels of command
    and provide the Army's tactical extension to the Global Information Grid.
    Although the program has been successful in developing some technologies
    and demonstrating early capabilities, the status of its critical
    technologies is uncertain. As a result of an August 2005 study, the WIN-T
    program is being re-baselined to meet emerging requirements as well as a
    shift in Army funding priorities. The Army's proposal for restructuring
    would extend system development for about 5 years, and delay the
    production decision from 2006 to about 2011, while seeking opportunities
    to spin out WIN-T technologies both to FCS and to the current force.
    Despite this improvement, several risks remain for the program, and the
    restructuring does have consequences. Coupled with new FCS requirements,
    the restructure will increase development costs by over $500 million.
    Critical technologies that support WIN-T's mobile ad hoc networking must
    still be matured and demonstrated, while the new FCS requirements will
    necessitate further technology development. Also, some WIN-T requirements
    are unfunded, and the Office of the Secretary of Defense recently
    non-concurred with part of the program's Technology Readiness Assessment.
    In order to obtain concurrence, the WIN-T program manager is updating the
    body of evidence material to reaffirm the technology maturity estimates.

    12Joint Program Executive Office was established in February 2005 after
    Congress directed DOD to strengthen the joint management of all the JTRS
    program components.

    13GAO, Defense Acquisitions: Resolving Development Risks in the Army's
    Networked Communications Capabilities is Key to Fielding Future Force,
    [49]GAO-05-669 (Washington, D.C.: June 15, 2005).

    Army Is Devoting Considerable Attention to Software Development, but Major Risks
    Need to be Addressed

    The FCS software development program is the largest in DOD history, and
    the importance of software needed for FCS performance is unprecedented.
    The Army is attempting to incorporate a number of best practices into
    their development, and some initial increments of software have been
    delivered on time. However, since the program started, the projected
    amount of software needed for FCS has almost doubled, to 63.8 million
    lines of code. Further, the Army must address a number of high risk issues
    that could impact delivery schedules, operational capabilities, and
    overall FCS performance.

    Disciplined Approach Needed to Manage Unprecedented Amount of Software

    Several numbers help illustrate the magnitude of the FCS software
    development effort

               o 95 percent of FCS's functionality is controlled by software,
               particularly the network;
               o 63 million lines of code are currently projected to be needed
               for FCS, more than 3 times the amount being developed for the
               Joint Strike Fighter;
               o FCS will have its own operating system, like Microsoft Windows,
               called the System-of-Systems Common Operating Environment; and
               o Over 100 interfaces or software connections to systems outside
               FCS will have to be developed.

    Of primary importance to the success of FCS is the System-of-Systems
    Common Operating Environment software. This software is expected to act as
    the infrastructure for other FCS software. It is to standardize
    component-to-component communications within computers, vehicles, the
    virtual private networks, and the Global Information Grid, enabling
    interoperability with legacy Army, joint, coalition, government, and
    non-government organizations. Finally, it is to provide the integration
    framework for the FCS family of systems and enable integrated
    system-of-systems functionality and performance.

    We have previously reported that software-intensive weapon programs are
    more likely to reach successful outcomes if they used a manageable
    evolutionary environment and disciplined process and managed by metrics.14
    The Army is attempting to follow such an approach to meet the software
    challenges on FCS. Specifically, FCS software will be developed in four
    discrete stages, or blocks. Each block adds incremental functionality in
    eight functional areas (command and control, simulation, logistics,
    training, manned ground vehicles, unmanned aerial vehicles, unmanned
    ground vehicles, and warfighting systems). The Army and lead systems
    integrator are also partitioning software into at least 100 smaller, more
    manageable subsystems. The FCS program is also implementing scheduled and
    gated reviews to discipline software development and have developed a set
    of metrics to measure technical performance in terms of growth, stability,
    quality, staffing, and process.

    14GAO, Defense Acquisitions: Stronger Management Practices Are Needed to
    Improve DOD's Software-Intensive Weapons Acquisitions. [50]GAO-04-393
    (Washington, D.C.: Mar. 1, 2004).

      Considerable Risks Remain with Software Development

    Apart from the sheer difficulty of writing and testing such a large volume
    of complex code, a number of risks face the FCS software development
    effort. As requirements have become better understood, the number of lines
    of code has grown since the program began in 2003. Specifically, in 2003,
    the Army estimated that FCS would need 33.7 million lines of code,
    compared to today's estimate of 63.8 million. As the Army and its
    contractors learn more about the limits of technology and its design
    concepts, the amount and functionality to be delivered by software may
    change.

    FCS's 63 million lines of software code can be broken down further into
    code that is new, reused, or commercial-off-the-shelf, as seen in figure
    4.

    Figure 4: FCS Projected Software Lines of Code (in thousands)

    The Army maintains that new software code presents the greatest challenge
    because it has to be written from scratch. Reused code is code already
    written for other military systems that is being adapted to FCS.
    Similarly, commercial-off-the shelf software is code already written for
    commercial systems that is being adapted to FCS. A program official told
    us that estimates of software code that will be reused are often
    overstated and the difficulty of adapting commercial software is often
    understated in DOD programs. This optimism translates into greater time
    and effort to develop software than planned. An independent estimate of
    reuse and commercial software has concluded that these efforts have been
    understated for the FCS program, which will translate into higher cost and
    schedule slippage.15 If the independent estimate proves correct, more
    software development could be pushed beyond the production decision.

    A foundational block of software (Build 0) has already been completed and
    an interim package of the System-of-Systems Common Operating Environment
    software was recently tested and delivered. However, as can be seen in
    table 1, even if FCS stays on schedule, a portion--10 percent--of FCS
    software is planned to be delivered and tested after the early 2013
    production decision that will limit the knowledge available to decision
    makers at that point.16

    15The estimate was conducted by the Office of the Secretary of Defense's
    Cost Analysis and Improvement Group in support of the FCS Milestone B
    review from May 2003.

    Table 1: FCS Software Blocks, Percentage of Completion, and Delivery Dates

    Block Percentage of total software completed Delivery date
    0                                          5 September 2005
    1                                         30 December 2007
    2                                         61 May 2010
    3                                         90 October 2011
    4                                        100 October 2013

    Source: U.S. Army (data); GAO (analysis and presentation).

    Currently, the Army estimates that 45 percent of the total 63 million
    source lines of code will have been written and tested by the early 2009
    preliminary design review and 75 percent will be done by the 2011 critical
    design review. Although there has been no significant schedule slippage to
    date on the initial increments of software, both of these estimates may
    prove to be ambitious. Additionally, according to program officials, the
    most difficult part of software development is the last 10 percent.

    Although the Army is attempting to implement several software best
    practices, there are a number of factors that may complicate those
    efforts. One of the leading problems in software development is the lack
    of adequately defined requirements. Without adequate definition and
    validation of requirements and design, software engineers could be coding
    to an incorrect design, resulting in missing functionality and errors. As
    we discussed earlier, the ultimate system-level requirements may not be
    complete until the preliminary design review in 2009. The Army
    acknowledges that the FCS's lack of adequate requirements and incomplete
    system architecture could result in software that does not provide the
    desired functionality or performance. This lack of top-level requirements
    and architecture definition also affects the accuracy of projected lines
    of code. Program risk charts suggest that software estimates could be
    understated by as much as 70 percent, which could impact overall schedule
    and performance.

    16In the recent adjustments to the FCS program, the Army has moved the
    Milestone C decision about 5 months to early 2013. Based on the available
    information on the program adjustments, it is not clear if the software
    delivery dates have been impacted.

    The Army has identified specific aspects of FCS software development as
    high risk and is developing plans to mitigate the risks:

               o System-of-Systems Common Operating Environment Availability and
               Maturity. There is a recognized risk that the software may not
               reach the necessary technical maturity level required to meet
               program milestones.

               o FCS software integration performance and development. Due to the
               complexity, functional scope, net-centric focus, and real-time
               requirements for the command and control software, software
               integration may not yield fully functional software that performs
               as desired.

               o Block 1 incompatible software components during integration.
               There are a large number of diverse groups working on software
               components that need to be integrated into full units. A lack of
               early integration process and collaboration among the suppliers
               represents substantial risk to rework during integration and
               subsequent schedule impact.

               o Software estimating accuracy. To date, estimating accuracy has
               been hampered by changing requirements, immature architecture, and
               insufficient time to thoroughly analyze software subsystems
               sizing. The difficulties associated with accurate software
               estimating is an indication that complexity increases as the
               design is better understood and this serves to increase the level
               of effort.

               o Software supplier integration. The unprecedented nature,
               volatility, and close coupling of FCS suppliers' software will
               frequently require various combinations of suppliers to share
               information and rapidly negotiate changes in their products,
               interfaces, and schedules. As these suppliers are traditionally
               wary competitors that are used to performing to fixed
               specifications, there are significant risks of slow and inflexible
               adaptation to critical FCS sources of change. Failure to do so
               will translate directly into missed delivery schedules,
               significantly reduced operational capabilities, and less
               dependable system performance.

    Considerations for the 2009 FCS Milestone Review

    As it approaches the preliminary design review and the subsequent go/no-go
    milestone review, the Army should have made additional progress in
    developing technologies and software as well as aligning the development
    of complementary programs with the FCS program. The challenges that will
    have to be overcome include

               o demonstrating that all critical technologies are mature to at
               least the TRL 6 level. This assessment should be reviewed and
               validated by an independent review team;
               o mitigating the recognized technical risks for the FCS critical
               technologies, including their successful integration with other
               FCS subsystems and systems;
               o clearly demonstrating that the risks inherent in the active
               protection system and the lightweight hull and vehicle armor have
               been reduced to low levels;
               o synchronizing the JTRS and WIN-T development schedules with FCS
               system integration and demonstration needs for both the spinouts
               and core program;
               o mitigating the cost, schedule, and performance risks in software
               development to acceptably low levels; and
               o establishing the set of complementary programs that are
               essential for FCS's success, ensuring that that are fully funded,
               and aligning theirs and the overall FCS program schedules.

    Concurrent Acquisition Strategy Will Provide for Late Demonstration of FCS
    Capabilities

    The FCS acquisition strategy and testing schedule have become more complex
    as plans have been made to spin out capabilities to current Army forces.
    The strategy acquires knowledge later than called for by best practices
    and DOD policy. In addition, knowledge deficits for requirements and
    technologies have created enormous challenges for devising an acquisition
    strategy that can demonstrate the maturity of design and production
    processes. Even if requirements setting and technology maturity proceed
    without incident, FCS design and production maturity is not likely to be
    demonstrated until after the production decision is made. The critical
    design review will be held much later on FCS than other programs, and the
    Army will not be building production-representative prototypes with all of
    their intended components to test before production. Much of the testing
    up to the 2013 production decision will involve simulations, technology
    demonstrations, experiments, and single system testing. Only after that
    point, however, will substantial testing of the complete brigade combat
    team and the FCS concept of operations occur. However, production is the
    most expensive phase in which to resolve design or other problems found
    during testing. Spin-outs, which are intended to accelerate delivery of
    FCS capabilities to the current force, also complicate the acquisition
    strategy by absorbing considerable testing resources and some tests.

    Acquisition Strategy Will Demonstrate Design Maturity after Production Begins

    The Army's acquisition strategy for FCS does not reflect a knowledge-based
    approach. Figure 5 shows how the Army's strategy for acquiring FCS
    involves concurrent development, design reviews that occur late in the
    program, and other issues that are out of alignment with the
    knowledge-based approach that characterizes best practices and is
    supported in DOD policy.

    Figure 5: Acquisition Compared with Commercial Best Practices

    Ideally, the preliminary design review occurs at or near the start of
    product development. Activities leading up to the preliminary design
    review include, among others, translating system requirements into design
    specifics. Doing so can help reveal key technical and engineering
    challenges and can help determine if a mismatch exists between what the
    customer wants and what the product developer can deliver. Scheduling the
    preliminary design review early in product development is intended to help
    stabilize cost, schedule, and performance expectations. The critical
    design review ideally occurs midway into the product development phase.
    The critical design review should confirm that the system design performs
    as expected and is stable enough to build production-representative
    prototypes for testing. The building of production-representative
    prototypes helps decision makers confirm that the system can be produced
    and manufactured within cost, schedule, and quality targets. According to
    the knowledge-based approach, a high percentage of design drawings should
    be completed and released to manufacturing at critical design review. The
    period leading up to critical design review is referred to as system
    integration, when individual components of a system are brought together,
    and the period after the review is called system demonstration, when the
    system as a whole demonstrates its reliability as well as its ability to
    work in the intended environment.

    The Army has scheduled the preliminary design review in early 2009, about
    6 years after the start of product development. The critical design review
    is scheduled in fiscal year 2011, just 2 years after the scheduled
    preliminary design review and 2 years before the initial FCS production
    decision in fiscal year 2013. This will leave little time for product
    demonstration and correction of any issues that are identified at that
    time.17 This is not to suggest that the two design reviews for the FCS
    could have been conducted earlier but rather that commitments to build and
    test prototypes and begin low-rate production are scheduled too soon
    afterward. The timing of the design reviews is indicative of how late
    knowledge will be attained in the program, even if all goes according to
    plan. With requirements definition not being complete until at least the
    final preliminary design review in early 2009 and technology maturation
    not until after that, additional challenges will have to be addressed
    within the system integration phase. System integration will already be a
    challenging phase due to known integration issues and numerous technical
    risks. The best practice measure for the completion of the system
    integration phase is the release of at least 90 percent of engineering
    drawings by the time of the critical design review.

    The Army is planning to have developmental prototypes of all FCS systems
    available for testing prior to low-rate initial production. For example,
    most of the manned ground vehicle prototypes are expected to be available
    in 2011 for developmental and qualification testing.18 However, these
    prototypes are not expected to be production-representative prototypes and
    will have some surrogate components. Whereas the testing of fully
    integrated, production-representative prototypes demonstrate design
    maturity and their fabrication can demonstrate production process
    maturity, neither of these knowledge points will be attained until after
    the initial production decision is made.

    17The early 2009 preliminary design review and the 2011 critical design
    review are culminating events; system-level preliminary design reviews and
    critical design reviews will be conducted prior to those dates.

    18The Army will have early prototypes of the non line-of-sight cannon
    vehicle available as early as fiscal year 2008 in order to meet
    congressional direction.

    System-Level Testing Compressed into Late Development and Early Production

    The FCS test program is unique because it is designed to field a new
    fighting unit and concept of operations to the Army, not just new
    equipment. To help do this, the Army has incorporated a new evaluation
    unit, known as the Evaluation Brigade Combat Team, to help with
    development and testing of the FCS systems and the tactics, techniques,
    and procedures necessary for the unit to fight. The test effort will
    involve four phases during development, which examine how the program is
    maturing hardware and software, during development. These phases are
    intended as check points. The first phase has a corresponding spin-out of
    mature FCS capabilities to current forces.

    The Army is proceeding with its plans to reduce FCS risks using modeling,
    simulation, emulation, and system integration laboratories. This approach
    is a key aspect of the Army's acquisition strategy and is designed to
    reduce the dependence on late testing to gain valuable insights about many
    aspects of FCS development, including design progress. However, on a
    first-of-a-kind system--like FCS--that represents a radical departure from
    current systems and warfighting concepts, actual testing of all the
    components integrated together is the final proof that the FCS system-of
    -systems concept works both as predicted and expected. FCS program test
    officials told us that while they understand the limitations involved, the
    use of emulators, surrogates, and simulations gives the Army a tremendous
    amount of early information, particularly about the system-of- systems and
    the network. This early information is expected to make it easier for the
    Army to deal with the compressed period between 2010 and 2014 and give the
    Army the ability to fix things quicker. As we were preparing this report,
    it was not clear what, if any, impact the Army's program adjustments would
    have on its testing and demonstration plans and schedules. Table 2
    describes the key test events, as currently scheduled, throughout the FCS
    program.

    Table 2: Key FCS Test Event Schedule

    No. Event             Systems              Description           Dates
    1   Experiment 1.1    Ground sensors and   Provides early and    7/2006 to
                             other emulators,     limited assessment of 6/2007
                             radio systems, and   abilities of selected
                             other systems        network systems
    2   Experiment 2      Command and control, Early experiment with 1/2008 to
                             ground sensors,      several FCS systems   1/2009
                             communications,      at the battalion,
                             lethality enablers,  company, and platoon
                             and other systems    echelons
    3   Spin-Out 1        Various computer     Battalion level test  3/2008 to
           Limited User Test systems, ground      with current force    4/2008
           1                 sensors, and missile equipment and
                             launch system        selected systems
                                                  being "spun" out to
                                                  current forces
    Preliminary design review                                        2nd
                                                                        quarter
                                                                        fiscal
                                                                        year 2009
    Defense acquisition board milestone review                       3rd
                                                                        quarter
                                                                        fiscal
                                                                        year 2009
    4   Early Ground      Early prototype of   Initial prototype     3rd
           Vehicle Delivery  the non line of      with commonality with Quarter
                             sight-cannon manned  later prototypes      Fiscal
                             ground vehicle                             Year 2008
    5   Integrated        Integration          First                 8/2009 to
           Mission Test 2    laboratory,          system-of-systems     11/2010
                             simulations, common  test in integration
                             operating system and phase 2 and indicator
                             other items          of network
                                                  functionality
    6   Aerial Vehicle    Prototype of the     Early prototype       3/2010
                             Class IV Fire Scout  delivery and
                                                  demonstration
    7   Limited User Test Small number of      Assess network        2/2010 to
           2                 unmanned aerial      maturity and          4/2010
                             vehicles and a task  capabilities of
                             organized platoon    aerial vehicles in
                                                  operational
                                                  environment
    8   Spin-Out 1        Various computer     Operational test of   4th
           Initial           systems, ground      selected systems and  Quarter
           Operational Test  sensors, and missile their effectiveness   Fiscal
                             launch system        being "spun out" to   Year 2010
                                                  current forces
    Critical design review                                           2nd
                                                                        quarter
                                                                        fiscal
                                                                        year 2011
    9   Pre-Production    Non-Line-of-Sight    Pre-production        3rd
           Prototypes        Cannon and other     prototype delivery of Quarter
           Delivery          manned ground        manned ground         Fiscal
                             vehicles             vehicles with common  Year 2010
                                                  features              to 4th
                                                                        Quarter
                                                                        Fiscal
                                                                        Year 2011
    10  Technical Field   Field test of the    Important test that   10/2011
           Test 3            brigade combat team  deals with maturing   to 3/2012
                             with prototypes      the network and
                                                  confirms important
                                                  interfaces and
                                                  interoperability
    11  Integrated        All manned ground    Integrated            8/2010 to
           Qualification     vehicles and         qualification tests   1/2012
           Test 3            remaining unmanned   for majority of FCS
                             ground vehicles,     systems including
                             aerial vehicles and  pre-production
                             ground sensors       representative
                                                  prototypes in their
                                                  core threshold
                                                  configurations
    12  Limited User Test Some of all systems  Assesses the brigade  4/2012 to
           3                 deployed in two      combat team small     5/2012
                             companies with the   unit capabilities
                             network
    Initial low-rate production decision                             2nd
                                                                        quarter
                                                                        fiscal
                                                                        year 2013
    13  Production and    All manned ground    Complete full-up      4th
           Deployment        vehicles and some    system-level tests of Quarter
           Limited User Test unmanned systems     all systems to        Fiscal
                                                  production standards  Year 2014
    Initial operating capability                                     3rd
                                                                        quarter
                                                                        fiscal
                                                                        year 2015
    14  Live Fire Test    All individual       Live fire tests with  2014 to
                             systems              complete and          2016
                                                  functional systems
    15  Initial           Brigade combat team  Full spectrum         3rd and
           Operational Test  and all of the       operations with       4th
                             systems involved     production            Quarter
                                                  representative        Fiscal
                                                  systems in a          Year 2016
                                                  realistic,
                                                  operational live
                                                  environment
    Full rate production decision                                    2nd
                                                                        quarter
                                                                        fiscal
                                                                        year 2017
    Full operating capability                                        3rd
                                                                        quarter
                                                                        fiscal
                                                                        year 2017

    Source: FCS Test and Evaluation Master Plan and FCS Program Office (data);
    GAO (analysis and presentation).

    The majority of testing through 2012 is limited in scope and is more about
    confidence building than demonstrations of key capabilities. Much like the
    overall acquisition strategy, the FCS testing plan will provide key
    knowledge late in the systems development phase. Early test efforts will
    focus on experiments and development testing of individual systems. Some
    early systems will be tested as part of the Army's efforts to spin out
    technologies to current forces, including unmanned ground sensors and the
    non-line-of-sight-launch system. The bulk of the developmental prototypes
    will not be available until 2010 and later for testing and demonstrations.

    The first large scale FCS test that will include a majority of the
    developmental prototypes and a large operational unit will not take place
    until 2012, the year before production is now slated to begin. This will
    mark the start of the Army's testing of the whole FCS, including the
    overarching network and the FCS concept. For example, a limited user test
    in 2010 involves only a platoon and a few unmanned aerial vehicles while a
    similar test, in 2012, will involve two companies and developmental
    prototypes for each of the manned ground vehicles as well as other systems
    being tested at the brigade level.

    Starting in 2012, several key tests will occur that should give decision
    makers a clearer understanding of whether the FCS system-of-systems and
    concept actually work as expected. By the end of 2014, production
    representative vehicles are expected to be available and tested in a
    production limited user test. Another important test is the initial
    operational test and evaluation in 2016, which provides the first full
    assessment of the entire program including all of the FCS systems, the
    brigade combat team, network operations, and the actual operating concept.
    This test involves full spectrum operations in a realistic environment.

    There are two major risks in the FCS testing approach: schedule
    compression and testing of the network. The first risk centers on the lack
    of time available to identify, correct, and retest for problems that come
    up during early testing and the second on the lack of capabilities to test
    an essential element of the FCS concept, the information network.
    Independent test officials noted that it is unclear what the Army expects
    from the network. With the network identified as a major risk element of
    the program, as well as a major risk, test officials noted that the Army
    needs to set benchmarks for what will be demonstrated over time.
    Independent testing officials have also told us that the FCS test schedule
    is very tight and may not allow adequate time for "test-fix-test" testing.
    The test and evaluation master plan recognizes this possibility by noting
    that within each integration phase there is only time to test and fix
    minor issues. More substantial problems would have to be fixed in a
    succeeding integration phase. Overall, testing officials are concerned
    that the FCS program is driven by its schedule and that the Army may rush
    prematurely into operational testing and perform poorly when it is too
    late to make cost effective corrections.

    Testing of the network is critical because it must provide secure,
    reliable access and distribution of information over extended distances
    and, sometimes, when operating in complex terrain. Testing the large
    number of FCS sensors and the network's ability to process the information
    will not be effective since test capabilities, methodologies, and
    expertise needed to test a tactical network of this magnitude are
    incomplete and insufficient. The first major test of the network and FCS
    together with a majority of prototypes will not take place until 2012, the
    year before low-rate production is now expected to begin.

    The FCS program is thus susceptible to late-cycle churn, that is, the
    effort required to fix a significant problem that is discovered late in a
    product's development. In particular, churn refers to the additional--and
    unanticipated--time, money, and effort that must be invested to overcome
    problems discovered through testing. Problems are most serious when they
    delay product delivery, increase product cost, or escape to the customer.
    The discovery of problems through testing conducted late in development is
    a fairly common occurrence on DOD programs, as is the attendant late-cycle
    churn. Often, tests of a full system, such as launching a missile or
    flying an aircraft, become the vehicles for discovering problems that
    could have been found earlier and corrected less expensively. When
    significant problems are revealed late in a weapon system's development,
    the reaction--or churn--can take several forms: extending schedules to
    increase the investment in more prototypes and testing, terminating the
    program, or redesigning and modifying weapons that have already made it to
    the field. While DOD has accepted such problems over the years, FCS offers
    particular challenges, given the magnitude of its cost in an increasingly
    competitive environment for investment funds. Problems discovered at the
    production stage are generally the most expensive to correct.

    Spin-Outs Support the Current Force but Place More Demands on FCS Test Resources

    When the Army restructured the FCS program in 2004, it revised its
    acquisition strategy to include a way to field various FCS
    capabilities--technologies and systems--to current forces while
    development of the core FCS program is still underway. This restructuring
    was expected to benefit the current forces as well as provide early
    demonstrations that would benefit the core FCS program. Known as
    spin-outs, the Army plans to begin limited low-rate production of the
    systems planned for Spin-Out 1 in 2009 and field those systems to current
    Army forces 2 years later. Leading up to the production decision in 2009
    will be system development tests and a limited user test. Additional
    spin-outs are now planned to occur in 2010 and 2012. Using this method,
    the Army plans to deliver significant capabilities to the current force
    earlier than previously planned. Over the long-term, these capabilities
    include enhanced battle command capabilities and a variety of manned and
    unmanned ground and air platforms that are intended to improve current
    force survivability and operations.

    Currently, FCS Spin-Out 1 involves the non-line-of sight launch system and
    unmanned ground sensors as well as early versions of the System-of-
    Systems Common Operating Environment and Battle Command software
    subsystems. Also included are the kits needed to interface with current
    force vehicles. These capabilities will be tested and validated using the
    Evaluation Brigade Combat Team, which will provide feedback to help refine
    the FCS doctrine and other matters. These systems are expected to be
    fielded to operational units starting in 2010, although it is unclear yet
    if these elements of FCS will provide significant capability to the
    current forces at a reasonable cost.

    There are two test-related concerns with spin-outs. One is that spin-outs
    have complicated the FCS acquisition strategy because they focus early
    testing and test resources on a few mature systems that will be spun out
    to current Army forces. FCS program test officials told us that the
    primary focus of the program's first integration phase will be on events
    supporting systems in that spin-out. It is unclear if subsequent
    integration phases will be similarly configured. If that were to occur,
    fewer overall FCS systems would be looked at and tested in each phase, and
    testing to evaluate how the FCS system-of-systems and concept of
    operations could come later than originally planned. A program official
    has noted that the schedule to deliver the needed hardware and software to
    the evaluation brigade combat team is ambitious and the schedule for tests
    leading up to a production decision for Spin-Out 1 is compressed. Some
    individual systems developmental and other testing began in 2006, but key
    user and operational tests will not occur until 2008, just prior to the
    production decision for systems in Spin-Out 1. Independent test officials
    have expressed concern not only over whether there will be enough time to
    test, fix and test again during these key tests but also whether there
    will be enough time to "reset" or refurbish the equipment being used from
    one test to another. For example, the technical field test, force
    development test and evaluation and pilot test, and the limited user tests
    for Spin-Out 1 are to be conducted back-to-back over a several month
    period just before the production decision. In addition, key tests
    including a limited user test for the non-line-of-sight launch system will
    take place after the Spin-Out 1 production decision. FCS program test
    officials have told us, however, that the program does not plan to fix and
    test again any problems discovered in a particular integration phase until
    the next integration phase. They also noted that the compressed event
    schedule allowed them to use the same resources and soldiers in each test.

    Considerations for the 2009 FCS Milestone Review

    As the Army proceeds to the preliminary design review, the FCS acquisition
    strategy will likely continue to be aggressive, concurrent, and compressed
    and one that develops key knowledge later in the development process than
    called for by best practices. Few FCS platforms will have been tested by
    this point. The majority of testing and the proof of whether the systems
    can be integrated and work together are left to occur after prototypes are
    delivered starting in the next decade. The Army faces a number of key
    challenges as it proceeds to and beyond the preliminary design review
    including

               o completing requirements definition and technology maturity (at
               least to TRL 6) to be able to complete the final preliminary
               design review;
               o clearly demonstrating spinout capabilities prior to committing
               to their initial production and fielding;
               o completing system integration and releasing at least 90 percent
               of engineering drawings by the critical design review in 2011;
               o allocating sufficient time, as needed, for test, fix and retest
               throughout the FCS test program; and
               o allocating sufficient time to thoroughly demonstrate each FCS
               system, the information network, and the FCS concept prior to
               committing to low rate initial production in 2013.

    Likely Growth of FCS Costs Increases Tension between Program Scope and Available
    Funds

    Last year, we reported that FCS program acquisition costs had increased to
    $160.7 billion--76 percent--since the Army's original estimate (figures
    have been adjusted for inflation.) While the Army's current estimate is
    essentially the same, an independent estimate from the Office of the
    Secretary of Defense puts the acquisition cost of FCS between $203 billion
    and $234 billion. The comparatively low level of technology and design
    knowledge at this point in the program portends future cost increases. Our
    work on a broad base of DOD weapon system programs shows that most
    developmental cost increases occur after the critical design review, which
    will now be in 2011 for the FCS. Yet, by that point in time, the Army will
    have spent about 80 percent of the FCS's development funds. Further, the
    Army has not yet fully estimated the cost of essential complementary
    programs and the procurement of spin-out items to the current force. The
    Army is cognizant of these resource tensions and has adopted measures in
    an attempt to control FCS costs. However, some of these measures involve
    reducing program scope in the form of lower requirements and capabilities,
    which will have to be reassessed against the user's demands. Symptomatic
    of the continuing resource tension, the Army recently announced that it
    was restructuring several aspects of the FCS program, including the scope
    of the program and its planned annual production rates to lower its annual
    funding demands. This will have an impact on program cost, but full
    details are not yet available.

    New Independent Estimates Indicate Higher FCS Acquisition Costs

    The Army's official cost estimate for FCS has changed only slightly from
    last year's estimate, which reflected a major program restructuring from
    the original estimate. In inflated dollars, the program office estimates
    the acquisition cost will be $163.7 billion, up from the original 2003
    estimate of $91.4 billion. However, independent cost estimates are
    significantly higher, as presented in table 3.

    Table 3: Comparison of the Original Cost Estimate and Recent Cost
    Estimates for the FCS Program (in billions of dollars)

                                     Original Army  Current Army Independent cost
                                          estimate      estimate         estimate
    Base year 2003 dollars             May 2003 December 2005         May 2006
    Research, development, test,          $18.1         $26.4      $31.8--44.0
    and evaluation
    Procurement                           $59.1         $92.8           $118.7
    Total                                 $77.2        $119.2    $150.5--162.7
    Inflated dollars                   May 2003 December 2005         May 2006
    Research, development, test,          $19.6         $30.6      $36.6--52.7
    and evaluation
    Procurement                           $71.8        $133.1    $166.7--181.2
    Total                                 $91.4        $163.7    $203.3--233.9

    Source: U.S. Army, Office of the Secretary of Defense (data); GAO
    (analysis and presentation).

    Recent independent estimates from the Office of the Secretary of Defense's
    Cost Analysis Improvement Group indicate that FCS acquisition costs could
    range from $203 billion to $234 billion in inflated dollars. The
    independent estimate reflected several additional years and additional
    staffing beyond the Army's estimate to achieve initial operational
    capability. The difference in estimates is also attributable to the Cost
    Analysis Improvement Group's assessment that FCS software development
    would require more time and effort to complete than the Army had
    estimated. The independent estimate also provided for additional risks
    regarding the availability of key systems to support the FCS network, such
    as the JTRS radios. Neither the Army nor the Defense Acquisition Board has
    accepted the independent estimate. Program officials believe the
    independent estimate of research and development costs is too high because
    it is too conservative regarding risks.

    The higher estimates of procurement costs reflect additional quantities of
    individual systems needed to provide full capabilities to the Brigade
    Combat Team. Neither the Army nor independent estimate reflects the recent
    decision to reduce the number of FCS systems and slow down the production
    rate. Prior to that decision, the Army had actually been contemplating
    expanding the scope of FCS to include additional Class IV unmanned aerial
    vehicles, additional unattended ground sensors, intelligent munitions
    systems, and test assets for the Army user community, as well as two new
    systems--a centralized controller device and a rearming module for the
    manned ground vehicles. This expansion would have increased the Army's
    estimate to about $208 billion, but appears obviated by the recent
    decision to reduce scope.

      Soft Knowledge Base for Cost Estimates Portends Future Cost Growth

    Cost estimates for any program are limited by the level of product
    knowledge available. All of the FCS estimates are thus limited by the
    relatively low level of knowledge in the FCS program today. If the FCS
    program had been following knowledge-based acquisition practices, its 2003
    estimate would have been based on mature technologies and the current
    estimate would have had the benefit of a complete preliminary design
    review and a considerable amount of work towards the critical design
    review. The program's estimate would be based much more on demonstrated
    knowledge and actual cost versus assumptions. Instead, the current FCS
    estimates are built on a knowledge base without mature technologies, a
    preliminary design that is at least 2 years away, and a critical design
    review that is 3 to 4 years away. The Army must, therefore, make
    significant assumptions about how knowledge will develop. As experience
    has shown, in many DOD weapon systems, assumptions generally prove
    optimistic and result in underestimated costs.

    As it is currently structured, the Army is planning to make substantial
    financial investments in the FCS program before key knowledge is gained on
    requirements, technologies, system designs, and system performance. Table
    4 shows the annual and cumulative funding, as reported in the program's
    current cost estimate, and the level of knowledge to be attained each
    fiscal year.

    The impact of the Army's recent program adjustments on the research and
    development funding stream were not known at the time this report was
    written.

    Table 4: Annual and Cumulative FCS Funding and Planned Events and
    Achievements

                               Annual   Cumulative
                            research,    research,
                         development, development,
                            test, and    test, and
              Percentage   evaluation   evaluation
              of funding  funding (in  funding (in
    Fiscal   spent to  millions of  millions of Planned events and
    Year         date     dollars)     dollars) achievements
    2003          0.5       $165.2       $165.2 Start of product development
    2004          6.1       1701.3      1,866.5 Program restructured
    2005         15.7       2929.9      4,796.4 System-of-Systems Functional
                                                   Review; system- of-systems
                                                   requirements stabilized; cost
                                                   estimate updated
    2006           26       3162.4      7,958.8 Initial system level
                                                   requirements
    2007         38.2      3717.7a     11,676.5 Preliminary design work in
                                                   progress
    2008         50.2       3674.8     15,351.3 Most technologies reach TRL 6;
                                                   final system-level
                                                   requirements.
    2009         61.5       3457.9      18809.2 Preliminary design review; all
                                                   technologies reach TRL 6;
                                                   mandated "go/no-go" review.
    2010         71.9       3187.8       21,997 Limited user test 2; some
                                                   prototypes available
    2011         80.7       2695.4     24,692.4 Critical design review; design
                                                   readiness review; all system
                                                   prototypes available
    2012         88.1       2253.7     26,946.1 Technologies reach full TRL 7
                                                   maturity; limited user test 3;
                                                   initial system-of-systems
                                                   demonstration
    2013         92.7       1436.2     28,382.3 Milestone C--initial program
                                                   production decision
    2014         96.6       1189.4     29,571.7 Limited user test 4; full
                                                   system-of-systems
                                                   demonstration; fielding start
                                                   brigade combat teams
    2015         99.6        919.8     30,491.5 Initial operational capability
    2016          100        110.6     30,602.1 Initial operational test and
                                                   evaluation; full-rate
                                                   production decision
    2017                                        Full operational capability

    Source: U.S. Army (data); GAO (analysis and presentation).

    aResearch and development funding was cut by $254 million in the fiscal
    year 2007 budget.

    As can be seen in table 4, through fiscal year 2007, the program will have
    spent about a third of its development budget--over $11 billion. By the
    time of the preliminary design review and the congressionally mandated
    go/no-go decision in 2009, the Army will have spent about 60 percent of
    its FCS development budget--over $18 billion. At that point, the program
    should have matured most of the critical technologies to TRL 6, and the
    definition of system-level requirements should be nearing completion. This
    is the level of knowledge the program should have achieved in 2003 before
    being approved for development start, according to best practices and the
    approach preferred by DOD in its acquisition policies. The FCS critical
    design review is now scheduled for fiscal year 2011. By that time, the
    program will have spent about $24.7 billion, or about 81 percent of its
    expected research and development expenditures.

    The immature state of FCS technologies and the timing of its critical
    design review make the FCS cost estimate vulnerable to future increases.
    In our 2006 assessment of selected major weapon systems, we found that
    development costs for the programs with mature technologies increased by a
    modest average of 4.8 percent over the first full estimate, whereas the
    development costs for the programs with immature technologies increased by
    a much higher average of 34.9 percent.19 Similarly, program acquisition
    unit costs for the programs with mature technologies increased by less
    than 1 percent, whereas the programs that started development with
    immature technologies experienced an average program acquisition unit cost
    increase of nearly 27 percent over the first full estimate. Our work also
    showed that most development cost growth occurred after the critical
    design review. Specifically, of the 28.3 percent cost growth that weapon
    systems average in development, 19.7 percent occurs after the critical
    design review.

    The current cost estimates do not fully reflect the total costs to the
    Army. Excluded are the costs of complementary programs, such as the Joint
    Tactical Radio System, which are substantial. Also, the costs to procure
    the FCS spin-out items and needed installation kits--previously estimated
    to cost about $23 billion--are not included. In fact, the procurement of
    FCS spinout items was not previously funded; however, as we were preparing
    this report, Army officials told us that in finalizing its budget plans
    for fiscal years 2008 to 2013, there was a decision to provide procurement
    funding for FCS items to be spun out to current forces. Congress recently
    mandated an independent cost estimate to address the full costs of
    developing, procuring, and fielding the FCS to be submitted by April 1,
    2007.

      Army Steps to Control FCS Program Costs

    The Army has taken steps to manage the growing cost of FCS. Program
    officials have said that they budgeted for development risk by building $5
    billion into the original cost estimates to cover risk. They have also
    said that they will not exceed the cost ceiling of the development
    contract, but as a result, they may have to modify, reduce, or delete
    lower-priority FCS requirements. However, this approach would reduce
    capabilities, and a lesser set of FCS capabilities may not be adequate to
    meet the user's expectations. Also, the Army is focusing on reducing the
    average unit production cost of the FCS brigade combat teams, which
    currently exceed the amount at which each brigade combat team is budgeted.
    The Army has established a glide path to reduce the unit costs; however,
    program officials have said they are struggling to further reduce the unit
    costs in many cases, particularly as a result of challenges with the
    manned ground vehicles. Further, any additional savings from such
    initiatives may not be realized until several years later into the
    program.

    19GAO, Defense Acquisitions: Assessments of Selected Major Weapon
    Programs, [51]GAO-06-391 (Washington, D.C.: Mar. 31, 2006).

    The FCS contract allows for the program to make what is called "Program
    Generated Adjustments" whereby any known cost overrun or increase in scope
    of work that would require additional funding is offset by identifying
    work scope that can be deleted with minimal impact to the program. Each
    year, the government and lead systems integrator will identify a
    prioritized list of candidates for capabilities that can be partially or
    completely deleted and its associated budget re-directed to the new work
    scope or to offset a cost overrun.

    The Army and lead systems integrator monitor the performance of the FCS
    program through an earned value management system, which allows program
    management to monitor the technical, schedule, and cost performance of the
    program. As it proceeds, the Army and lead systems integrator can use the
    information gleaned from the earned value management system to make
    informed program decisions and correct potential problems early. According
    to earned value data, the FCS is currently tracking fairly closely with
    cost and schedule expectations. However, it is too early in the program
    for the data at this point to be conclusive. Historically, the majority of
    cost growth on a development program occurs after the critical design
    review. Further, according to program officials, due to the size and
    complexity of the program, coupled with an uncertain budget from year to
    year, detailed planning packages are only planned about 3 to 6 months in
    advance. While this may be unavoidable for a program as complex as FCS,
    the near term status of the program, as reported by the earned value
    management system, does not fully represent the extent of the challenges
    the Army still faces with FCS.

      Funding Constraints Have Forced the Army to Restructure Its FCS Plans

    FCS will command most of the Army's investment budget and thus must
    compete with other major investments and operations. If FCS costs
    increase, demands outside FCS increase, or expected funding decreases,
    adjustments are likely to be necessary in FCS. Last year, we reported that
    the large annual procurement costs for FCS were expected to begin in
    fiscal year 2012, which was largely beyond the then-current budget
    planning period (fiscal years 2006 to 2011). This situation is called a
    funding "bow wave." This means that more funds would be required in the
    years just beyond the years covered in the current defense plan that are
    subject to funding limits. As previously structured, the FCS program would
    require over $12 billion annually in its peak procurement years. If the
    Army budget remains at its current levels, FCS could represent 60-70
    percent of the Army's procurement budget in those years at a time that the
    Army was meeting other demands, including force modularity, FCS spin-outs,
    complementary programs, aviation procurement, missile defense, trucks,
    ammunition, and other equipment.

    Recently, this tension between FCS scope, costs, and competing demands has
    led to another set of changes in the FCS program. The FCS program manager
    has informed us that, in light of budget issues for the 2008 to 2013
    planning period, the Army has reduced annual production rates, and plans
    to forego two of the originally planned unmanned aerial vehicles, among
    other adjustments. While this course of action is necessary to accommodate
    funding realities, it has other consequences, as it would increase the FCS
    unit costs and extend the time needed to produce and deploy FCS-equipped
    brigade combat teams. It would also necessitate evaluating the effects of
    these changes on individual system requirements and on the aggregate
    characteristics of lethality, survivability, responsiveness, and
    supportability. Details of the adjustment to the FCS program are not yet
    finalized; thus, we have not evaluated the full implications of the
    changes.

    Considerations for the 2009 FCS Milestone Review

    By the time of the preliminary design review and the congressionally
    mandated go/no-go milestone in 2009, the Army should have more of the
    knowledge needed to build a better cost estimate for the FCS program. The
    Army should also have more clarity about the level of funding that may be
    available to it within the long term budget projections to fully develop
    and procure the FCS program of record. Continuing challenges include

               o developing an official Army cost position that narrows the gap
               between the Army's estimates and the independent cost estimate
               planned for that time frame. In the cost estimate, the Army should
               clearly establish if it includes the complete set and quantities
               of FCS equipment needed to meet established requirements;

               o ensuring that adequate funding exists in its current budget and
               program objective memorandum to fully fund the FCS program of
               record; and
               o securing funding for the development of the complementary
               systems deemed necessary for the FCS as well as to procure the FCS
               capabilities planned to be spunout to the current forces.

    Conclusions

    The Army has been granted a lot of latitude to carry out a large program
    like FCS this far into development with relatively little demonstrated
    knowledge. Tangible progress has been made during the year in several
    areas, including requirements and technology. Such progress warrants
    recognition, but not confidence. Confidence comes from high levels of
    demonstrated knowledge, which are yet to come. Following the preliminary
    design review in 2009, there should be enough knowledge demonstrated to
    assess FCS's prospects for success. It is thus important that specific
    criteria--as quantifiable as possible and consistent with best
    practices--be established now to evaluate that knowledge.

    At the same time, decision makers must put this knowledge in context.
    Specifically, if the FCS is able to demonstrate the level of knowledge
    that should be expected at a preliminary design review, it will be about
    at the point when it should be ready to begin system development and
    demonstration. Instead, by that time, FCS will be halfway through that
    phase, with only 4 years left to demonstrate that the system-of-systems
    design works before the planned production commitment is made. For that
    reason, decision makers will have to assess the complete business case for
    FCS. This will include demonstrative proof not only that requirements can
    be met with mature technologies and the preliminary design, but also that
    the remainder of the acquisition strategy adequately provides for
    demonstration of design maturity, production process maturity, and funding
    availability before the production decision is made.

    Clearly, it is in the nation's interests for the FCS to be the right
    solution for the future and to be a successful development. FCS has not
    been an easy solution to pursue and underscores the commitment and vision
    of Army leadership. Nonetheless, in view of the great technical challenges
    facing the program, the possibility that FCS may not deliver the right
    capability must be acknowledged and anticipated. At this point, the only
    alternative course of action to FCS appears to be current Army weapons,
    increasingly upgraded with FCS spin-out technologies. It is incumbent upon
    DOD, then, to identify alternative courses of action to equip future Army
    forces by the time the go/no-go decision is made on FCS. Otherwise,
    approval to "go" may have to be given not because FCS is sufficiently
    developed, but because there is no other viable course of action.

    Recommendations for Executive Action

    We recommend that the Secretary of Defense establish criteria now that it
    will use to evaluate the FCS program as part of its go/no-go decision
    following its preliminary design review. At a minimum, these criteria
    should include

               o a definition of acceptable technology maturity consistent with
               DOD policy for a program half way through system development and
               demonstration;
               o determination which FCS technologies will be scored against
               those criteria;
               o use of an independent assessment to score the FCS technologies;
               o a definition of acceptable software maturity consistent with DOD
               policy for a program half way through system development and
               demonstration;
               o an independent assessment to score FCS software;
               o the likely performance and availability of key complementary
               systems;
               o an assessment of how likely the FCS system-of-systems--deemed
               reasonable from the progress in technology, software, and
               design--is to provide the capabilities the Army will need to
               perform its roles in joint force operations (Such an assessment
               should include sensitivity analyses in areas of the most
               uncertainty.);
               o a definition of acceptable levels of technology, design, and
               production maturity to be demonstrated at the critical design
               review and the production decision;
               o an assessment of how well the FCS acquisition strategy and test
               plan will be able to demonstrate those levels of maturity;
               o a determination of likely costs to develop, produce, and support
               the FCS that is informed by an independent cost estimate and
               supported by an acceptable confidence level; and
               o a determination that the budget levels the Army is likely to
               receive will be sufficient to develop, produce, and support the
               FCS at expected levels of cost.

    We also recommend that the Secretary of Defense analyze alternative
    courses of action DOD can take to provide the Army with sufficient
    capabilities, should the FCS be judged as unlikely to deliver needed
    capabilities in reasonable time frames and within expected funding levels.

    Agency Comments and Our Evaluation

    DOD concurred with our recommendations and stated that the Defense
    Acquisition Board's review, aligned with the FCS program's preliminary
    design review in 2009, will be informed by a number of critical
    assessments and analyses. These include a technology readiness assessment,
    a system engineering assessment, an independent cost estimate, an
    evaluation of FCS capabilities, an affordability assessment, and ongoing
    analyses of alternatives that include current force and network
    alternatives.

    We believe that these are constructive steps that will contribute to the
    Defense Acquisition Board review of the FCS following the preliminary
    design review. We note that it is important that the board's review be
    recognized as a decision meeting--albeit not technically a milestone
    decision--so that a declarative go/no-go decision can be made on FCS.
    Accordingly, while it is necessary that good information--such as that
    included in DOD's response--be presented to the board, it is also
    necessary that quantitative criteria that reflect best practices be used
    to evaluate the information. These criteria, some of which were included
    in our recommendations, should be defined by DOD now. For example, while
    FCS technologies need to be independently assessed, it is likewise
    important to establish what level of technology maturity is needed for a
    program at that stage and to evaluate the FCS technologies against that
    standard. This is true for software as well. In the area of cost, Army
    cost estimates should be evaluated against recognized standards, such as
    confidence levels as well as the independent cost estimate.

    We had also recommended that criteria be established to serve as a basis
    for evaluating the FCS acquisition strategy, including what would
    constitute acceptable levels of technology, design, and production
    maturity to be demonstrated at the critical design review and the
    production decision. DOD did not respond to these aspects of our
    recommendations, but a response is important because they have to do with
    the sufficiency of the FCS business case for the remainder of the program.
    Finally, as DOD evaluates alternatives, there are several things to keep
    in mind. First, an alternative need not be a rival to the FCS, but rather
    the next best solution that can be adopted if FCS is not able to deliver
    the needed capabilities. Second, an alternative need not represent a
    choice between FCS and the current force, but could include fielding a
    subset of FCS, such as a class of vehicles, if they perform as needed and
    provide a militarily worthwhile capability. Third, the broader perspective
    of the Department of Defense--in addition to that of the Army--will
    benefit the consideration of alternatives.

    We also received technical comments from DOD which have been addressed in
    the report, as appropriate.

    We are sending copies of this report to the Secretary of Defense; the
    Secretary of the Army; and the Director, Office of Management and Budget.
    Copies will also be made available to others on request. In addition, the
    report will be available at no charge on the GAO Web site at
    http://www.gao.gov .

    Please contact me on (202) 512-4841 if you or your staff has any questions
    concerning this report. Contact points for our Offices of Congressional
    Relations and Public Affairs may be found on the last page of this report.
    Other contributors to this report were Assistant Director William R.
    Graveline, William C. Allbritton, Noah B. Bleicher, Marcus C. Ferguson,
    John P. Swain, Robert S. Swierczek, and Carrie R. Wilson.

    Paul L. Francis
    Director
    Acquisition and Sourcing Management

    List of Committees:

    The Honorable Carl Levin
    Chairman
    The Honorable John McCain
    Ranking Member
    Committee on Armed Services
    United States Senate

    The Honorable Daniel K. Inouye
    Chairman
    The Honorable Ted Stevens
    Ranking Member
    Subcommittee on Defense
    Committee on Appropriations
    United States Senate

    The Honorable Ike Skelton
    Chairman
    The Honorable Duncan L. Hunter
    Ranking Member
    Committee on Armed Services
    House of Representatives

    The Honorable John P. Murtha, Jr.
    Chairman
    The Honorable C. W. (Bill) Young
    Ranking Member
    Subcommittee on Defense
    Committee on Appropriations
    House of Representatives

    Appendix I: Scope and Methodology

    To develop the information on the Future Combat System program's progress
    toward meeting established goals, the contribution of critical
    technologies and complementary systems, and the estimates of cost and
    program affordability, we interviewed officials of the Office of the Under
    Secretary of Defense (Acquisition, Technology, and Logistics); the Army
    G-8; the Office of the Under Secretary of Defense (Comptroller); the
    Secretary of Defense's Cost Analysis Improvement Group; the Director of
    Operational Test and Evaluation; the Assistant Secretary of the Army
    (Acquisition, Logistics, and Technology); the Army's Training and Doctrine
    Command; Surface Deployment and Distribution Command; the Fraunhofer
    Center at the University of Maryland; the Program Manager for the Future
    Combat System (Brigade Combat Team); the Future Combat System Lead Systems
    Integrator; and Lead Systems Integrator One Team contractors.

    We reviewed, among other documents, the Future Combat System's Operational
    Requirements Document, the Acquisition Strategy Report, the Selected
    Acquisition Report, the Critical Technology Assessment and Technology Risk
    Mitigation Plans, and the Integrated Master Schedule.

    We attended the FCS System-of-Systems Functional Review, In-Process
    Reviews, In-Process Preliminary Design Review, Board of Directors Reviews,
    and multiple system demonstrations. In our assessment of the FCS, we used
    the knowledge-based acquisition practices drawn from our large body of
    past work as well as DOD's acquisition policy and the experiences of other
    programs.

    We discussed the issues presented in this report with officials from the
    Army and the Secretary of Defense and made several changes as a result. We
    performed our review from March 2006 to March 2007 in accordance with
    generally accepted auditing standards.

    Appendix II: Comments from the Department of Defense

    Appendix III: Technology Readiness Levels

    Technology Readiness Levels (TRL) are measures pioneered by the National
    Aeronautics and Space Administration and adopted by DOD to determine
    whether technologies were sufficiently mature to be incorporated into a
    weapon system. Our prior work has found TRLs to be a valuable
    decision-making tool because they can presage the likely consequences of
    incorporating a technology at a given level of maturity into a product
    development. The maturity level of a technology can range from paper
    studies (TRL 1), to prototypes that can be tested in a realistic
    environment (TRL 7), to an actual system that has proven itself in mission
    operations (TRL 9). According to DOD acquisition policy, a technology
    should have been demonstrated in a relevant environment (TRL 6) or,
    preferably, in an operational environment (TRL 7) to be considered mature
    enough to use for product development. Best practices of leading
    commercial firms and successful DOD programs have shown that critical
    technologies should be mature to at least a TRL 7 before the start of
    product development.

    Table 5: Technology Readiness Level Descriptions

    Technology                         Hardware and         Demonstration
    readiness level   Description      software             environment
    1. Basic          Lowest level of  None (paper studies  None
    principles        technology       and analysis)
    observed and      readiness.
    reported          Scientific
                         research begins
                         to be translated
                         into applied
                         research and
                         development.
                         Examples might
                         include paper
                         studies of a
                         technology's
                         basic properties
    2. Technology     Invention        None (paper studies  None
    concept and/or    begins. Once     and analysis)
    application       basic principles
    formulated        are observed,
                         practical
                         applications can
                         be invented. The
                         application is
                         speculative and
                         there is no
                         proof or
                         detailed
                         analysis to
                         support the
                         assumption.
                         Examples are
                         still limited to
                         paper studies.
    3. Analytical and Active research  Analytical studies   Lab
    experimental      and development  and demonstration of
    critical function is initiated.    non-scale individual
    and/or            This includes    components (pieces
    characteristic    analytical       of subsystem).
    proof of concept  studies and
                         laboratory
                         studies to
                         physically
                         validate
                         analytical
                         predictions of
                         separate
                         elements of the
                         technology.
                         Examples include
                         components that
                         are not yet
                         integrated or
                         representative.
    4. Component      Basic            Low-fidelity         Lab
    and/or            technological    breadboard.
    breadboard.       components are   Integration of
    Validation in     integrated to    non-scale components
    laboratory        establish that   to show pieces will
    environment       the pieces will  work together. Not
                         work together.   fully functional or
                         This is          form or fit but
                         relatively "low  representative of
                         fidelity"        technically feasible
                         compared to the  approach suitable
                         eventual system. for flight articles.
                         Examples include
                         integration of
                         "ad hoc"
                         hardware in a
                         laboratory.
    5. Component      Fidelity of      High-fidelity        Lab demonstrating
    and/or breadboard breadboard       breadboard.          functionality but
    validation in     technology       Functionally         not form and fit.
    relevant          increases        equivalent but not   May include flight
    environment       significantly.   necessarily form     demonstrating
                         The basic        and/or fit (size,    breadboard in
                         technological    weight, materials,   surrogate
                         components are   etc.). Should be     aircraft.
                         integrated with  approaching          Technology ready
                         reasonably       appropriate scale.   for detailed
                         realistic        May include          design studies.
                         supporting       integration of
                         elements so that several components
                         the technology   with reasonably
                         can be tested in realistic support
                         a simulated      elements/subsystems
                         environment.     to demonstrate
                         Examples include functionality.
                         "high fidelity"
                         laboratory
                         Integration of
                         components.
    6.                Representative   Prototype--Should be High-fidelity lab
    System/subsystem  model or         very close to form,  demonstration or
    model or          prototype        fit, and function.   limited/restricted
    prototype         system, which is Probably includes    flight
    demonstration in  well beyond the  the integration of   demonstration for
    a relevant        breadboard       many new components  a relevant
    environment       tested for TRL   and realistic        environment.
                         5, is tested in  supporting           Integration of
                         a relevant       elements/subsystems  technology is well
                         environment.     if needed to         defined.
                         Represents a     demonstrate full
                         major step up in functionality of the
                         a technology's   subsystem.
                         demonstrated
                         readiness.
                         Examples include
                         testing a
                         prototype in a
                         high-fidelity
                         laboratory
                         environment or
                         in simulated
                         operational
                         environment.
    7. System         Prototype near   Prototype. Should be Flight
    prototype         or at planned    form, fit, and       demonstration in
    demonstration in  operational      function integrated  representative
    an operational    system.          with other key       operational
    environment       Represents a     supporting           environment such
                         major step up    elements/subsystems  as flying test bed
                         from TRL 6,      to demonstrate full  or demonstrator
                         requiring the    functionality of     aircraft.
                         demonstration of subsystem.           Technology is well
                         an actual system                      substantiated with
                         prototype in an                       test data.
                         operational
                         environment,
                         such as in an
                         aircraft,
                         vehicle, or
                         space. Examples
                         include testing
                         the prototype in
                         a test bed
                         aircraft.
    8. Actual system  Technology has   Flight-qualified     Developmental test
    completed and     been proven to   hardware.            and evaluation in
    "flight           work in its                           the actual system
    qualified"        final form and                        application.
    through test and  under expected
    demonstration     conditions. In
                         almost all
                         cases, this TRL
                         represents the
                         end of true
                         system
                         development.
                         Examples include
                         developmental
                         test and
                         evaluation of
                         the system in
                         its intended
                         weapon system to
                         determine if it
                         meets design
                         specifications.
    9. Actual system  Actual           Actual system in     Operational test
    "flight proven"   application of   final form.          and evaluation in
    through           the technology                        operational
    successful        in its final                          mission
    mission           form and under                        conditions.
    operations        mission
                         conditions, such
                         as those
                         encountered in
                         operational test
                         and evaluation.
                         In almost all
                         cases, this is
                         the end of the
                         last "bug
                         fixing" aspects
                         of true system
                         development.
                         Examples include
                         using the system
                         under
                         operational
                         mission
                         conditions.

    Source: GAO analysis of National Aeronautics and Space Administration
    data.

    Appendix IV: Technology Readiness Level Ratings

                                                   Last
                                                 year's Last year's  Latest
                                                    TRL       TRL 6     TRL  Latest TRL 6
    FCS Critical Technologies                   ratings projections ratings   projections
    Joint               Software Programmable Radio
    Interoperability  1 JTRS Cluster 1             5      2007            6  N/A
                      2 JTRS Cluster 5             5      2007            6  N/A
                      3 WIN-T                      5      2007            6  N/A
                        Interface and Information Exchange
                      4 Army, Joint,               4      2008            6  N/A
                        Multinational
                        Interface
                      5 WIN-T Strategic            4      2008            6  N/A
                        Communication
    Networked Battle    Security Systems and Algorithms
    Command           6 Cross Domain Guarding      4      2008            6  N/A
                        Solution
                      7 Intrusion                  4      2008            4 2008
                        Detection--IP Network
                      8 Intrusion                  4      2008            4 2007
                        Detection--Waveform
                      9 Mobile Ad Hoc              5      2007            6  N/A
                        Networking Protocols
                     10 Quality of Service         5      2007            5 2008
                        Algorithms
                     11 Unmanned Systems Relay     5      2006          N/R  N/A
                        Wideband Waveforms
                     12 Wideband                   5      2007            6  N/A
                        Waveform--JTRS
                     13 Wideband Waveform--SRW     4      2007            6  N/A
                     14 Advanced Man-Machine       6       N/A            6  N/A
                        Interfaces
                     15 Multi-Spectral Sensors     6       N/A            6  N/A
                        and Seekers
                     16 Decision                   6       N/A            6  N/A
                        Aids/Intelligent
                        Agents
                        Combat Identification
                     17 Air (Rotary                6       N/A            6  N/A
                        Wing/UAV)--to--Ground
                     18 Air (Fixed               N/R       N/A          N/R  N/A
                        Wing)--to--Ground
                        (Interim/Robust
                        Solutions
                     19 Ground--to--Air          N/R       N/A            6  N/A
                     20 Ground--to--Ground         6       N/A          N/R  N/A
                        (Mounted)
                     21 Ground--to--Soldier      N/R       N/A          N/R  N/A
                     22 Rapid Battlespace          5      2008            5 2008
                        Deconfliction
                        Sensor/Data Fusion and Data Compression Algorithms
                     23 Distributed Fusion         4      2007            4 2008
                        Management
                     24 Level 1 Fusion Engine      6       N/A            6  N/A
                     25 Data Compression           6       N/A            6  N/A
                        Algorithms
    Networked        26 Dynamic                       6         N/A       6           N/A
    Lethality           Sensor--Shooter
                        Pairing Algorithms and
                        Fire Control
                        LOS/BLOS/NLOS Precision Munitions Terminal Guidance
                     27 PGMM Precision             5      2007            6  N/A
                        Munitions, TG
                     28 MRM Precision              5      2007            6  N/A
                        Munitions, TG
                     29 Excalibur Precision        6       N/A            6  N/A
                        Munitions, TG
                     30 NLOS-LS, Terminal          6       N/A            6  N/A
                        Guidance (TG)
                        Aided/Automatic Target Recognition
                     31 Aided Target               5      2007            5 2008
                        Recognition for RSTA
                     32 NLOS-LS ATR for            6       N/A            6  N/A
                        Seekers
                     33 Recoil Management and      6       N/A            6  N/A
                        Lightweight Components
                     34 Distributed                5      2006            6  N/A
                        Collaboration of
                        Manned/Unmanned
                        Platforms
                     35 Rapid Battle Damage      N/R       N/A          N/R  N/A
                        Assessment
    Transportability
    Sustainability/     High-Power Density/Fuel-Efficient Propulsion
    Reliability      36 High-Power Density         5      2007            6  N/A
                        Engine
                     37 Fuel-Efficient             6       N/A            6  N/A
                        Hybrid-Electric Engine
                     38 Embedded Predictive        5      2009          N/R  N/A
                        Logistics Sensors and
                        Algorithms
                     39 Lightweight Heavy Fuel     4      2007            5 2006
                        Engine
    Training         40 Computer Generated            6         N/A       6           N/A
                        Forces
                     41 Tactical Engagement        4      2008            5 2008
                        Simulation
    Survivability       Active Protection System
                     42 Active Protection          5      2008            6  N/A
                        System
                     43 Threat Warning System    4-5      2009          4-5 2009
                     44 Signature Management     5-6      2006            6  N/A
                     45 Lightweight Hull and       5      2008            5 2008
                        Vehicle Armor
                     46 Health Monitoring and      6       N/A            7  N/A
                        Casualty Care
                        Interventions
                     47 Power Distribution and     5      2006            6  N/A
                        Control
                        Advanced Countermine Technology
                     48 Mine Detection             6       N/A            6  N/A
                     49 Mine Neutralization        6       N/A            6  N/A
                     50 Efficient Resource         6       N/A          N/R  N/A
                        Allocation
                     51 Protection                 4      2008            5 2008
                     52 High-Density Packaged      5      2008            6  N/A
                        Power
                        Class 1 UAV Propulsion Technology
                     53 Ducted Fan                 4      2006            6  N/A

    Source: U.S. Army (data); GAO (analysis and presentation).

    Note: N/A = Not Applicable; N/R = Not Rated

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    (120521)

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    Highlights of [74]GAO-07-376 , a report to congressional committees

    March 2007

    DEFENSE ACQUISITIONS

    Key Decisions to Be Made on Future Combat System

    The Future Combat System (FCS) is central to Army transformation efforts,
    comprising 14 integrated weapon systems and an advanced information
    network. In previous work, GAO found that the elements of a sound business
    case--firm requirements, mature technologies, a knowledge-based
    acquisition strategy, a realistic cost estimate, and sufficient
    funding--were not present. As a result, FCS is considered high risk and in
    need of special oversight and review. Congress has mandated that the
    Department of Defense (DOD) decide in early 2009 whether FCS should
    continue.

    GAO is required to review the program annually. In this report, GAO
    analyzes FCS development, including its requirements definition; status of
    critical technologies, software development, and complementary programs;
    soundness of its acquisition strategy related to design, production and
    spin-out of capabilities to current forces; and reasonableness of costs
    and sufficiency of funding.

    [75]What GAO Recommends

    GAO is making recommendations to the Secretary of Defense that specific
    criteria should be considered during the 2009 milestone review and
    alternatives to the program analyzed should FCS fail to deliver needed
    capabilities when and as expected. DOD concurred with GAO's
    recommendations.

    The Army has been granted a lot of latitude to carry out a large program
    like FCS this far into development with relatively little demonstrated
    knowledge. Tangible progress has been made during the year in several
    areas, including requirements and technology. Such progress warrants
    recognition, but confidence that the program can deliver as promised
    depends on high levels of demonstrated knowledge, which are yet to come.
    Following the preliminary design review in 2009, there should be enough
    knowledge to demonstrate the soundness of the FCS business case. If
    significant doubts remain about the program's executability at that time,
    DOD will have to consider alternatives to proceeding with the program.
    Currently, GAO sees the FCS business case as follows:

    Requirements. Progress has been made in defining requirements and making
    some difficult trade-offs, but key assumptions about the performance of
    immature technologies and other technical risks remain to be proven.

    Technology. The Army has made progress in maturing technologies, but it
    will take several more years to reach full maturity. All key technologies
    should have been mature in 2003 when the program began. FCS software has
    doubled in size compared to original estimates and faces significant
    risks. The Army is attempting a disciplined approach to managing software
    development.

    Acquisition Strategy. The FCS acquisition strategy is compressed. Key
    testing to demonstrate FCS performance will not be completed, and maturity
    of design and production will not be demonstrated until after the
    production decision.

    Program Costs. New estimates place FCS costs significantly above the
    current estimate of $163.7 billion. The Army has recently proposed a plan
    to buy fewer systems and slow production rates. This recent program
    adjustment will affect program costs, but details are not yet available.

    FCS Core Systems

    References

    Visible links
      47. http://www.gao.gov/cgi-bin/getrpt?GAO-06-367
      48. http://www.gao.gov/cgi-bin/getrpt?GAO-06-391
      49. http://www.gao.gov/cgi-bin/getrpt?GAO-05-669
      50. http://www.gao.gov/cgi-bin/getrpt?GAO-04-393
      51. http://www.gao.gov/cgi-bin/getrpt?GAO-06-391
      53. http://www.gao.gov/cgi-bin/getrpt?GAO-06-564T
      54. http://www.gao.gov/cgi-bin/getrpt?GAO-06-367
      55. http://www.gao.gov/cgi-bin/getrpt?GAO-06-478T
      56. http://www.gao.gov/cgi-bin/getrpt?GAO-06-257T
      57. http://www.gao.gov/cgi-bin/getrpt?GAO-05-926
      58. http://www.gao.gov/cgi-bin/getrpt?GAO-05-669
      59. http://www.gao.gov/cgi-bin/getrpt?GAO-05-428T
      60. http://www.gao.gov/cgi-bin/getrpt?GAO-05-442T
      61. http://www.gao.gov/cgi-bin/getrpt?GAO-05-242
      62. http://www.gao.gov/cgi-bin/getrpt?GAO-04-635T
      63. http://www.gao.gov/cgi-bin/getrpt?GAO-04-248
      64. http://www.gao.gov/cgi-bin/getrpt?GAO-03-1010R
      65. http://www.gao.gov/cgi-bin/getrpt?GAO-01-311
      66. http://www.gao.gov/cgi-bin/getrpt?GAO-01-288
      74. http://www.gao.gov/cgi-bin/getrpt?GAO-07-376
    *** End of document. ***