Brilliant Anti-Armor Submunition: Opportunity Exists to Conduct Critical
Test Prior to Production Decision (Letter Report, 10/30/97,
GAO/NSIAD-98-16).

Pursuant to a congressional request, GAO provided its assessment of the
Army's brilliant antiarmor submunition (BAT), for which the Army plans
to request authority to start low-rate initial production in December
1997, focusing on the status of its acquisition plans and whether it is
technically ready to enter production.

GAO noted that: (1) a decision on low-rate initial production of BAT,
scheduled for December 1997, appears to be premature because a crucial
technical demonstration will not be accomplished by that time; (2) in
1995, the Office of the Secretary of Defense and the Army agreed to
relax the performance criteria that BAT was to meet before proceeding
into low-rate initial production; (3) under the new criteria, the Army
is not required to demonstrate that the submunition can be successfully
dispensed from the Army Tactical Missile System (ATACMS) Block II
missile; (4) in September 1994, the Department of Defense (DOD) noted,
in its comments to GAO's draft classified report, that the successful
completion of multiple tests of the submunition with ATACMS as the
carrier would be required; (5) the submunition's test schedule appears
to be extremely ambitious; (6) its development program is almost 3 years
behind its original schedule, and a significant portion of the test
schedule remains uncompleted; (7) the project office added five
development flight tests to the schedule because of technical problems;
(8) the Army plans to use a test aircraft for all submunition flight
testing with subsonic deployment rather than the supersonic deployment
from the ATACMS missile; (9) the testing completed to date has uncovered
numerous problems that required design changes, additional testing, and
schedule delays; (10) although the submunition test plans do not include
an evaluation of whether or not the ATACMS Block II can dispense the
submunition, the Block II missile test plans do include a test to
dispense tactical submunitions in December 1997, the same month that the
decision is to be made on low-rate production of the submunition; (11)
according to Army representatives, data from this test will not be used
in making the submunition production decision, since the test is not
required; (12) any delays in qualifying the submunition's subcomponents
and developmental flight testing will likely postpone the date of the
Block II dispense test; (13) the submunition's low-rate initial
production contract can be awarded 8 months later than currently
scheduled and still be delivered in time to be integrated into the
missile; (14) the Block II missile's currently scheduled production date
is uncertain; and (15) if its production date is delayed, the Army would
have even more time to sufficiently complete key submunition
developmental testing.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-98-16
     TITLE:  Brilliant Anti-Armor Submunition: Opportunity Exists to 
             Conduct Critical Test Prior to Production Decision
      DATE:  10/30/97
   SUBJECT:  Munitions
             Missiles
             Product performance evaluation
             Concurrency
             Testing
             Weapons research
             Air defense systems
IDENTIFIER:  Army Tactical Missile System
             Brilliant Anti-Armor Submunition
             ATACMS Block II Missile
             ATACMS Block IA Missile
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Military Research and
Development, Committee on National Security, House of Representatives

October 1997

BRILLIANT ANTIARMOR SUBMUNITION -
OPPORTUNITY EXISTS TO CONDUCT
CRITICAL TEST PRIOR TO PRODUCTION
DECISION

GAO/NSIAD-98-16

Brilliant Antiarmor Submunition

(707243)


Abbreviations
=============================================================== ABBREV

  ATACMS - Army Tactical Missile System
  BAT - brilliant antiarmor submunition
  DOD - Department of Defense
  OSD - Office of the Secretary of Defense

Letter
=============================================================== LETTER


B-276833

October 30, 1997

The Honorable Curt Weldon
Chairman, Subcommittee on Military
 Research and Development
Committee on National Security
House of Representatives

Dear Mr.  Chairman: 

The Army has been developing the brilliant antiarmor submunition
(also referred to as BAT) since 1984 and plans to request authority
to start low-rate initial production in December 1997.  At your
request, we are providing our assessment of the status of its
acquisition plans and whether it is technically ready to enter
production. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The Army is developing the brilliant antiarmor submunition, with
acoustic and infrared seekers working in tandem, to autonomously
search for, track, and destroy moving armored targets.  This
submunition is to be carried deep into enemy territory by the Army
Tactical Missile System (ATACMS) Block II missile, which is still in
development and is a modification of the in-production ATACMS Block
IA missile, which carries a different submunition.  The brilliant
antiarmor submunition and the ATACMS Block II missile are a
$4-billion system designed to support the Army's "deep fires"
mission, which calls for the destruction and/or disruption of enemy
forces at ranges exceeding 100 kilometers.  Each Block II missile is
to carry 13 submunitions that will be dispensed over large clusters
of high payoff targets to attack and destroy individual targets.  The
advantage of the submunition is that it can cover a large area when
dispersed, which allows it to compensate for target location errors. 
Figure 1 shows the submunition acquiring a moving column of tanks. 

   Figure 1:  The Brilliant
   Antiarmor Submunition Acquiring
   a Moving Target

   (See figure in printed
   edition.)

The brilliant antiarmor submunition program was established in 1984
as a special access program and progressed to a successful
engineering and manufacturing development phase decision in May 1991. 
The Tri-Service Standoff Attack Missile was designated as the first
delivery vehicle for the submunition, but when the Army terminated
its participation in the program in December 1993, the ATACMS Block
II missile was designated as the submunition's carrier.  This change
of carrier and continued technical difficulties have led to
significant cost growth.  The current program office estimate shows
that development costs have increased from $700 million to $1.2
billion (in constant 1991 dollars) from the initial February 1992
estimate.\1

Projected production costs have also risen by almost $7,000 per
submunition (in constant 1991 dollars).  The Army currently plans to
produce 2,352 submunitions during low-rate initial production and a
program total of 19,871 during fiscal years 1998-2006.  According to
current Army documentation, the average procurement cost of a single
Block II missile loaded with 13 brilliant antiarmor submunitions is
about $2.3 million (in constant 1991 dollars). 


--------------------
\1 According to program office data, $270 million of the $500 million
in development cost increase is associated with developing an
improved submunition.  The new brilliant antiarmor submunition is
scheduled to be introduced into the production line in fiscal year
2001.  It is designed to increase lethality and add the capability to
attack cold, stationary, armored targets. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

A decision on low-rate initial production of the brilliant antiarmor
submunition, scheduled for December 1997, appears to be premature
because a crucial technical demonstration will not be accomplished by
that time.  In 1995, the Office of the Secretary of Defense (OSD) and
the Army agreed to relax the performance criteria that the brilliant
antiarmor submunition was to meet before proceeding into low-rate
initial production.  Under the new criteria, the Army is not required
to demonstrate that the submunition can be successfully dispensed
from the ATACMS Block II missile.  In September 1994, the Department
of Defense (DOD) noted, in its comments to our draft classified
report, that the successful completion of multiple tests of the
submunition with the ATACMS as the carrier would be required. 
Without such a test, the Army would have little or no assurance that
the submunition to be acquired under low-rate initial production
could successfully meet performance and technical requirements. 

The submunition's current test schedule also appears to be extremely
ambitious.  Its development program is almost 3 years behind its
original schedule, and a significant portion of the test schedule
remains uncompleted.  The project office added five development
flight tests to the schedule because of technical problems.  In
addition, the Army plans to use a test aircraft for all submunition
flight testing with subsonic deployment rather than the supersonic
deployment from the ATACMS Block II missile.  The testing completed
to date has uncovered numerous problems that required design changes,
additional testing, and schedule delays.  Army program officials
admit that the testing schedule is extremely ambitious, but they
assume it will be successful. 

Although the submunition test plans do not include an evaluation of
whether or not the ATACMS Block II can dispense the submunition, the
Block II missile test plans do include a test to dispense tactical
submunitions in December 1997, the same month that the decision is to
be made on low-rate production of the submunition.  However,
according to Army representatives, data from this test will not be
used in making the submunition production decision, since the test is
not required.  In addition, any delays in qualifying the
submunition's subcomponents and developmental flight testing will
likely postpone the date of the Block II dispense test.  The Army's
ability to complete the remaining portion of the submunition's test
schedule on time is highly suspect, considering the repeated number
of testing failures already experienced.  Therefore, it is probable
that the ATACMS Block II dispense test will be delayed. 

The submunition's schedule is unnecessarily ambitious.  According to
program officials, the driving factor for making the production
decision in December 1997 is for the submunition's delivery schedule
to coincide with the Block II missile's delivery schedule.  However,
a review of the program office's production lead time and delivery
requirements shows that the submunition's low-rate initial production
contract can be awarded
8 months later than currently scheduled and the submunition can still
be delivered in time to be integrated into the missile.  This would
allow the Army additional time to complete the submunition's
development testing and the ATACMS dispense test before awarding the
contract. 

The ATACMS Block IA's planned full-rate production decision was
recently delayed by 1 year, to March 1998, because of target
acquisition problems.  According to representatives from the Office
of the Director, Operational Test and Evaluation, the Block IA
missile's problems will also affect the Block II missile.  Therefore,
the Block II missile's currently scheduled production date is
uncertain.  If its production date is delayed, the Army would have
even more time to sufficiently complete key submunition developmental
testing. 


   KEY PERFORMANCE CRITERIA
   RELAXED
------------------------------------------------------------ Letter :3

One of the brilliant antiarmor submunition's original criteria for
starting low-rate initial production was to demonstrate that it could
be successfully dispensed from its carrier.  This criterion was
established in an acquisition decision memorandum dated May 1991 for
the submunition and its original missile carrier, the Tri-Service
Standoff Attack Missile.  With the termination of the Army's
participation in this missile program and the selection of the ATACMS
as the new carrier in 1993, new criteria were subsequently developed. 

In a 1994 classified report on the brilliant antiarmor submunition,
we raised the issue of the lack of sufficient testing requirements in
the criteria.  We recommended that the Secretary of Defense direct
the Secretary of the Army to conduct substantial system-level testing
before low-rate initial production was approved.  DOD's written
response to that report stated that the decision to start low-rate
initial production would not be made without significant system-level
testing, including both the carrier and the submunition.  In
addition, DOD stated that the criteria proposed by the Army for
entering low-rate initial production would require the successful
completion of multiple system tests with the ATACMS as the carrier. 
The response also stated that the planned testing for the submunition
to support the low-rate initial production decision was consistent
with and exceeded the original criteria established in the 1991
acquisition decision memorandum and that the criteria would have to
be approved by DOD. 

Nevertheless, the submunition's revised criteria, approved on October
4, 1995, do not require the Army to demonstrate that the ATACMS Block
II can successfully dispense the submunition.  We could not determine
why such a demonstration is no longer required.  The revised criteria
call for the submunition to meet or exceed its performance
specifications in its requirements document.  Under these
specifications, the Army will consider (1) how many kills are
achieved per load of submunitions fired, (2) how well the system will
operate in countermeasures, (3) how well the system will perform in
degraded weather conditions, (4) how lethal the system is, and (5)
how reliable the system operates.  According to project office
representatives, many of these requirements will initially have to be
met using simulations but will eventually be verified through actual
flight testing.  However, the flight testing will not occur until
after the low-rate initial production decision has been made.  While
the current criteria do not require that the submunition be dispensed
from its carrier, officials from OSD, Army, and project office
acknowledge that this is a key issue for the system's performance. 
Army and OSD representatives agree that they would like to see a
demonstration of the carrier successfully dispensing the submunition
before the submunition's production decision.  However, this is not a
requirement. 


   SUBMUNITION DEVELOPMENT IS
   BEHIND SCHEDULE
------------------------------------------------------------ Letter :4

The brilliant antiarmor submunition's development is significantly
behind its original and revised schedules.  The submunition received
approval to enter its engineering and manufacturing development phase
on May 15, 1991.  The plan at that time was for the Defense
Acquisition Board to hold its low-rate production decision review in
November 1994.  However, because of a change in the submunition's
carrier and the technical difficulties being experienced with
individual subcomponents, the Army approved a new program plan on
September 22, 1995.  This plan stretched out the development program
by 3 years and rescheduled the low-rate initial production review for
December 1997. 

Despite the change in the program's plan, the submunition is still
behind schedule.  The submunition is currently behind its revised
design verification test completion estimate by 6 months and behind
its revised contractor development testing completion date by 8
months.  Army officials maintain that the past slippage will have no
impact on the scheduled December 1997 low-rate initial production
decision, but admit that the schedule is extremely ambitious.  Table
1 shows the September 1995 scheduled dates and the estimated slippage
since the revised estimates. 



                                Table 1
                
                  Revised Submunition Program Schedule

                                                         Slippage
                                                         from
                    September                            September
Milestone           1995                Current          1995
events              estimate           estimate          (months)
--------------  --  --------------  ---------------  --  -------------
Critical            5/92                 5/92            Not
design review                                            applicable

Prototype           Not applicable       9/95            Not
production                                               applicable
complete

Design              10/95                4/96            6
verification
test

Contractor          3/97                 11/97           8
development
test

Low-rate            12/97                12/97
initial
production
decision
----------------------------------------------------------------------
Source:  Army program office data. 

A significant portion of the submunition's test plan remains
uncompleted.  The project office has added five development flights
to the test program because of technical problems, without extending
the time to complete all the tests.  Three of these flights were
added by the contractor to verify hardware design changes that were
made due to prior flight test failures.  The other two flights were
added as preproduction verification tests as a result of previously
failed flight tests.  The plan is to complete development flight
testing and qualification testing in November 1997.  According to the
project manager, the entire test schedule is tight, and there is no
time available prior to the scheduled production decision to conduct
additional tests should any new problems develop.  For example, after
a July 1997 developmental test failure, the project office continued
with other planned tests without allowing time to analyze the failure
or do a retest. 

All of the submunition's flight testing will be done using a test
aircraft with subsonic deployment rather than the supersonic
deployment from its intended carrier, the ATACMS Block II missile. 
The Army has not included a flight test in its submunition's test
plans to evaluate whether or not the carrier can dispense the final
tactical submunition configuration.  However, the Army plans to
conduct three ATACMS Block II flight tests to dispense the
submunition within the next several months.  During the first two
tests, a nontactical version of the submunition will be used, but
during the final test in December 1997, tactical submunitions will be
used.  According to Army representatives, data from this test will
not be used in making the submunition's low-rate initial production
decision, since a test to dispense the submunition is not required. 
In addition, the ATACMS Block II missile tactical dispense tests are
dependent upon the submunition's subcomponent qualification and
development tests being completed by then.  According to the former
ATACMS Block II product manager, if any problems result from the
submunition flight tests, the ATACMS Block II dispense tests would
not be done until after the December 1997 low-rate initial production
decision.  The final Block II test might not occur until after
January 1998. 

The Army's ability to complete the remaining portion of the test
schedule on time will be a significant challenge.  The testing
completed to date has uncovered numerous problems that have resulted
in design changes, additional testing, and schedule delays.  Some
component failures have required repeated efforts to resolve.  For
example, the bands that secure the wings and tail fins to the
submunition's body prior to it being dispensed from the missile have
caused problems during two flight tests.  When the submunition is
dispensed, the bands are designed to fall away, allowing the wings
and tail fins to deploy.  During the first flight, however, the bands
did not fall away from the submunition and prevented the wings from
successfully deploying.  Although the project office believed the
problem had been solved, during a subsequent flight, the bands again
failed to fall away, causing the submunition to crash.  The second
redesigned band system performed successfully in a May 1997 flight
test.  The entire process to redesign the bands required
approximately
10 months to complete. 

The three other components that have taken the longest time to
qualify and have contributed to the bulk of the schedule delay are
the inertial measurement unit, the deceleration and stabilization
system, and the infrared seeker.  Qualification testing was scheduled
to be completed in November 1995.  However, under the current
schedule, qualification testing is not expected to be complete until
November 1997. 

The design and production of the inertial measurement unit, which
provides in-flight data to adjust the submunition's flight path,
continue to be significantly delayed.  According to the product
manager, the problems with the unit are the result of the change in
carriers.  As a result of this change, the unit had to be redesigned,
and that effort has taken more than 2 years.  As of the June 1997
performance report, the contractor had delivered 34 of 95 units and
is at least 6 months behind schedule.  The contractor problems with
the design and production efforts have resulted in expensive plans to
work around the problems and delays in integrating missile hardware. 
Although project office personnel told us that the technical problems
had been resolved, the June 1997 production performance report stated
that the inertial measurement unit program was falling further behind
schedule.  Because of the delays, the new unit is not expected to
pass qualification testing until November 1997, after the completion
of all submunition development flight tests.  None of the currently
planned development test flights will have a qualified inertial
measurement unit.  Thus, the primary objective of the developmental
flight tests--to verify design and performance--will not be met. 

The change in carriers also required the development of a
deceleration and stabilization system.  The brilliant antiarmor
submunition was originally designed to be dispensed at the
Tri-Service Standoff Attack Missile's subsonic speeds, but will now
be dispensed at supersonic speeds by the ATACMS Block II missile. 
The deceleration and stabilization system is required to slow the
submunition to subsonic speeds.  The contractor has experienced
technical problems with the design of the system that have caused
additional schedule delays.  In March 1997, the final design for the
system was completed.  As of the June 1997 report, the contractor had
delivered only 25 of 96 units and is at least 2 months behind
schedule.  The May 1997 system qualification tests had to be
suspended because two units failed during the tests.  Project
officials expect testing to resume in August 1997, a 3-month delay. 
Because of this delay, none of the submunition development tests will
be conducted with a qualified deceleration and stabilization system. 

The infrared seeker, which detects and guides the submunition to its
target, is at least 8 months behind schedule.  The contractor had
delivered 49 of 99 units, according to the June 1997 performance
report.  During three test flights, the seeker experienced hardware
failures that caused the submunition to crash.  Two of the failures
required the redesign and addition of new seeker components and
caused testing delays.  Because of the tight testing schedule,
testing of the submunition will continue before a failure analysis is
completed on the third failed flight.  In addition, qualification
testing revealed more problems that must be resolved before the
seeker can be qualified.  Qualification is not scheduled to be
complete until November 1997.  According to testing officials, the
seeker will not be qualified until after the completion of all
development tests. 


   SUBMUNITION'S AMBITIOUS
   SCHEDULE IS UNNECESSARY
------------------------------------------------------------ Letter :5

The Army built in 8 months of excess time into the submunition's
production delivery schedule, therefore it is unnecessary to make the
low-rate initial production decision in December 1997.  According to
program officials, making the low-rate initial production decision in
December 1997 is driven by the desire to have the submunition's
delivery schedule coincide with the ATACMS Block II missile
production schedule.  However, a review of the program office
production lead time and delivery requirements shows that the
submunition's initial production contract can be awarded in August
1998 and still allow sufficient time for the submunition to be
integrated into the missile.  Delaying the decision would allow the
Army additional time to complete its development test program. 

The program office currently plans to award a limited production
contract for 395 brilliant antiarmor submunitions in January 1998. 
However, 90 of these submunitions are funded with research and
development funds and are considered developmental units.  These
units are required for the December 1999 ATACMS Block II operational
test.  The remaining 305 units are low-rate initial production
submunitions, which are required to be delivered to the contractor,
starting in April 2000, to be integrated into the first low-rate
initial production Block II missiles.  According to program
officials, the lead time to produce the submunition is 18 to 19
months.  However, under the current schedule, the 305 low-rate
initial production submunitions do not need to begin delivery until
27 months after contract award.  Our analysis of delivery
requirements reveals that the contract award for the low-rate initial
production quantities can be delayed
8 months, or until August 1998. 

The Army's current brilliant antiarmor submunition schedule is linked
to the ATACMS Block II December 1999 operational test date and July
2000 first missile delivery date.  To meet these dates, the contract
for low-rate initial production of the ATACMS Block II missiles must
be awarded in January 1999.  However, the ATACMS Block IA missile's
planned full-rate production decision was recently delayed by 1 year,
to March 1998, because of a "sensor to shooter" problem that surfaced
during initial operational testing.  The Block IA's problems may not
be resolved before the Block II is ready to enter production. 
According to representatives from the Office of the Director,
Operational Test and Evaluation, and the Army Operational Test and
Evaluation Command, the "sensor to shooter" problem will also affect
the Block II missile.  If the Block II missile's schedule is delayed
at all, the submunition's initial production contract could be
delayed even further, allowing more time to complete submunition
testing. 

Neither the ATACMS nor the brilliant antiarmor submunition has a
sensor that can provide necessary targeting information and must rely
on targeting data supplied from external sources.  The submunition
must have initial targeting information prior to launch and missile
positioning information while in flight.  For example, a moving
column of armored vehicles' initial location must be identified prior
to launching the missile.  According to project office officials,
this target information must be as precise as possible. 

The Army recognizes that the lack of a targeting sensor is a serious
problem.  A general officer steering committee has been established
to further investigate the problem and to recommend a solution. 
According to testing officials, the ATACMS Block II's and brilliant
antiarmor submunition's operational performance must be evaluated
using targeting information.  They indicated that without a solution
to the "sensor to shooter" problem, the effectiveness of the system
would be affected, and missile production delays would be warranted. 


   RECOMMENDATION
------------------------------------------------------------ Letter :6

Given the criticality of the dispense to the brilliant antiarmor
submunition program, we recommend that the Secretary of the Army
require the program office to demonstrate that qualified tactical
submunitions can be successfully dispensed from the ATACMS Block II
missile before seeking a low-rate initial production decision on the
submunition program.  According to production requirements, the
submunition can still meet its existing delivery schedule with the
ATACMS Block II missile, even with an 8-month delay in awarding the
low-rate initial production contract.  Such a delay would allow more
time for the Army to resolve the submunition's technical difficulties
and demonstrate that it can be successfully dispensed from the ATACMS
Block II missile. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :7

In commenting on a draft of this report, DOD indicated that it did
not believe that it was necessary to perform a "full-up" dispense
test of tactical submunitions from the ATACMS Block II missile prior
to the low-rate production decision.  DOD stated that even though
successful dispensing of tactical submunitions was not a formal
criterion to be met before the decision to go into production, two
Block II missile tests are scheduled to dispense a tactical
submunition before the production decision and that information from
these tests would be used in its assessment of the submunition.  DOD
also stated that delaying the submunition's low-rate initial
production by 8 months would delay the Block II missile's initial
operational and live fire testing by 8 months and subsequently delay
the Block II's full-rate production decision, as well as
significantly increase costs. 

We are not pursuaded by DOD's argument for the following reasons and
have retained our recommendation.  First, OSD and Army officials told
us that the dispense event was a key performance objective for the
project because of its criticality to the system's effectiveness. 
Second, a successful dispense event was a requirement for the
low-rate production decision before the change in carriers.  Third,
problems are currently being experienced in the submunition's
development testing and delays are already occurring.  Finally, if
the Army is not confident that the submunition can meet this
standard, it should not seek approval for low-rate production. 

The Army does not need to start low-rate production to obtain
additional submunitions to complete development activities and for
testing.  If additional submunitions are procured using separate
contracts--a January 1998 research and development contract to
procure assets for the operational and live fire testing and a
subsequent procurement contract for low-rate production when the
submunition demonstrates its performance--the Block II's schedule
would not necessarily be delayed.  Even if the schedule would be
delayed, we believe DOD should be more concerned about the risks
associated with starting the production of an unqualified and largely
unproven system. 

DOD's comments are presented in their entirety in appendix I, along
with our evaluation of them. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

To determine whether the brilliant antiarmor submunition acquisition
plan was on schedule, we reviewed current Army submunition and ATACMS
Block II missile program testing and production schedule
documentation with officials in the ATACMS-BAT project office,
Redstone Arsenal, Alabama.  We also reviewed similar documentation
with officials in the Offices of the Assistant Secretary of the Army
for Research, Development, and Acquisition and the Deputy Chief of
Staff of the Army for Operations and Plans, Washington, D.C. 

To determine whether the brilliant antiarmor submunition has
successfully demonstrated its technical readiness to enter
production, we reviewed current and prior criteria to evaluate the
requirements to be demonstrated before entering production.  We then
evaluated test plans, test results, and contractor performance
reports with ATACMS-BAT project office officials, Redstone Arsenal,
Alabama, to determine whether the submunition had demonstrated all
the required events.  We also discussed testing and criteria issues
with representatives from the Office of the Director, Operational
Test and Evaluation, Washington, D.C.; the Army's Operational
Evaluation Command, Alexandria, Virginia; and the Assistant Secretary
of the Army for Research, Development, and Acquisition, Washington,
D.C. 

We conducted our review from April to August 1997 in accordance with
generally accepted government auditing standards. 


---------------------------------------------------------- Letter :8.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from its issue date.  At that time, we will send copies to other
interested congressional committees; the Secretaries of Defense and
the Army; the Director, Office of Management and Budget; and other
interested parties.  We will also make copies available to others
upon request. 

If you or your staff have questions concerning this report, please
contact me at (202) 512-4841.  The major contributors to this report
were
Bill Graveline, Laura Durland, and John Randall. 

Sincerely yours,

Louis J.  Rodrigues
Director, Defense Acquisitions Issues




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


The following are GAO's comments on the Department of Defense's (DOD)
letter dated September 12, 1997. 

GAO COMMENTS

1.  Although DOD states that the Army has adamantly maintained a
test/fix/test approach to all test flights and always ensured that
the necessary analysis was completed before conducting the next test
flight in the series, DOD acknowledges that the Army had not
completed the root cause analysis on the third seeker flight failure
before executing the next flight test. 

2.  After the draft of this report was sent to DOD for comment, the
Army revised its testing schedule to postpone the final flight tests
from October to November 1997.  If the seeker testing had progressed
as planned, the Army should have been able to use a qualified seeker
in this final test.  However, program officials have subsequently
confirmed that the seeker test schedule has since slipped even
further behind because of technical difficulties.  The program office
has had to add additional modifications and testing to the seeker. 
Program officials state they will not be able to qualify the seeker
prior to the completion of the development flight tests, even with
the date slip reflected in DOD's comments. 

3.  If the Army needs more submunitions to complete development
activities and for testing, it is not necessary to start low-rate
initial production to do that.  For operational testing purposes, the
standard is that the submunitions be production representative, not
production missiles.  Because of the difficulty in stopping
production once it starts, we are concerned about the Army starting
production of an unqualified and largely unproven submunition.  We
are also concerned about the use of acquisition strategies that tend
to force the start of low-rate production on a definite schedule,
regardless of the status of the development effort.  Moreover, in our
opinion, the potential costs associated with buying a submunition
that has significant unresolved technical problems more than offsets
concerns about potential costs that may be incurred if production was
delayed until the technical problems are resolved. 

4.  According to DOD testing officials, the Army has not demonstrated
that it has a dedicated sensor that can provide accurate targeting
information to the Block 1A missiles.  These officials maintain that
this is an issue for the Block II missile.  To indicate how serious
this issue is, DOD has established a general officer steering
committee to resolve the problem.  The Block II's schedule may still
be delayed because of this problem. 

5.  We have modified the report to address this comment. 

6.  While the Army wants only to consider the results from tests that
may occur prior to the production decision, we believe the Army must
demonstrate that it can successfully dispense qualified tactical
brilliant antiarmor submunitions before seeking approval for low-rate
initial production. 


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