GAO Report: Satellite Programs Show Overruns Across the Board
50+% over budget
Satellites are an increasingly-important element of America’s Network-Centric Warfare approach, and the task of planning for America’s technology needs 40 years into the future is daunting. Cost and delays have hampered America’s satellite programs before, and now a detailed, program-by-program analysis of the state of seven different programs finds different kinds of problems and delays. Indeed, the GAO’s latest inquiry into the status and short-falls of the U.S. government’s military space programs notes that there is no single agency, company or simple villain to blame for the problems.
In testimony to the Strategic Forces Subcommittee of the House Committee on Armed Services July 12, 2005, the GAO’s Director of Acquisitions and Management Robert E. Levin noted the status of several key satellite programs, and made a number of recommendations:
The Programs
Unit cost on Advanced Extremely High Frequency Satellites (AEHF) has increased by more than 50%,” with cost increases of more than 15% in 2004 alone. The GAO attributed these cost increases “to production problems and changing security requirements. Earlier cost increases were attributed, in part, to a rush to start the program, changing requirements, and a lack of funding to support an overly optimistic schedule.” The backup plan is to launch 2 more AEHF satellites in case the TSAT program is delayed or canceled.
Costs for Wideband Gapfiller Satellites (WGS) “have increased since 2000. The launch of the first satellite has been delayed by almost two years.” The GAO also noted “that the program encountered design, integration and manufacturing problems, due largely to the fact that the program was not able to leverage expertise from the commercial sector… because there was less-than-anticipated demand for the commercial satellite.”
Unit costs on Evolved Expendable Launch Vehicles have increased by 81%, with cost increases of more than 25% in 2004. “A chief reason for cost increases is a decline in the commercial launch market upon which the company’s business case was based, as well as a reduction in anticipated launches.”
Costs on the National Polar-orbiting Operational Environmental Satellite System, or NPOESS have increased by roughly 10% due to changes to the contract, increased program management costs, and increased funds needed to mitigate risks.
Total costs of the Navstar Global Positioning System II, or GPS II have increased by over 20%. The main reason is the Department of Defense’s “decision to delay the start of the follow-up GPS III program, which will require DOD to buy at least 7 additional GPS IIF satellites. Note that delaying new programs until their technologies are ready was an explicit GAO recommendation.
The crucial Space Based Infrared Systems High or SBIRS-High missile warning program “has experienced schedule slips of at least 6 years, with a total program cost estimate that has risen from about $3.9 billion to $9.9 billion.
Finally, the new Transformational Satellite Communications System, or TSAT, hasn’t been around long enough to accumulate overruns. Nevertheless, the GAO warned that it entered the formal acquisition phase in 2004 with only one of seven critical technologies mature.
The Problems
Overall, the GAO believes the DoD has been unable to match resources (technology, time, money) to requirements before beginning individual programs, setting the stage for technical and other problems, which lead to cost and schedule increases. This includes things like:
- Requirements for what the satellite needed to do and how well it must perform are not adequately defined at the beginning of a program or are changed significantly once the program has begun.
- Technologies are at a stage that are more suited to R&D than production. (Mind you, when trying to implement C4ISR systems that must support U.S. needs for decades and cannot be upgraded in place, DID wonders how it could be any other way. Imagine trying to plan for the military’s current bandwidth and computer network/ communication needs in 1976.)
- Cost estimates are unreliable – largely because requirements have not been fully defined and because programs start with many unknowns about technologies.
The GAO also noted cross-cutting factors that make it more difficult for DoD to achieve a match between resources and requirements for space acquisitions. These include:
- A diverse array of organizations with competing interests;
- A desire to satisfy all requirements in a single step, regardless of the design or technology challenge; and
- A tendency for acquisition programs to take on technology development that should occur within the S&T (science & technology, i.e. research) environment.
- Cascading effects as older programs are extended or overrun, which ends up reducing investments in science & technology programs and puts additional pressure on the investment portfolio for ambitious future projects.
- On a broader scale, DOD starts more programs than it can afford in the long run, forcing programs to underestimate costs and over promise capability. This creates a number of cascading effects.
Recommendation Summary
GAO notes that one key to success is closing the gaps between available technologies and customer needs before beginning an acquisition program. This puts programs in a better position to succeed because they can focus on design, system integration, and manufacturing.
The GAO’s assertion is certainly true, but given program run times and expected satellite service times, this may not always be possible. DID didn’t see that issue addressed in the GAO report.
The U.S. DoD has recently revised its space acquisition policy, in part to address this criticism and have a better grounding re: required technologies before starting an acquisition. However, the GAO remains concerned that the policy still allows programs to begin before demonstrating technologies in an operational or simulated environment.
Overall, GAO recommends that the U.S. Department of Defense:
- Separate technology development from acquisition;
- Adopt evolutionary approaches that pursue incremental increases in capability; and
- Guide program start decisions with investment strategies that identify (1) overall capabilities and how to achieve them, that is, what role space will play versus other air-, sea-, and land-based assets and (2) priorities for funding.
The Full Report
GAO-05-891T (July 12/05) – Space Acquisitions: Stronger Development Practices and Investment Planning Needed to Address Continuing Problems [Text summary | full PDF]
See also:
- Marco Caceres of The Teal Group in American Institute of Aeronautics & Astronautics (AIAA) Industry Insights (Jan. 2002) – Military satellites: The next generation for some of the issues and tradeoffs at stake.
- Space Today Online’s The Satellite Wars: Yugoslavia, Afghanistan, Iraq offers a rundown of existing and future U.S. reconnaissance satellite programs, and explains how these assets have been used in recent conflicts.
