Americas Defense Meltdown - IT Acquisition Advisory Council

Thomas Christie • 207was an attempt to limit cost growth in defense programs. It called for the terminationof weapons programs whose total costs had grown by more than 25 percent aboveoriginal estimates, unless they were certified as critical systems by the secretary ofdefense or if the cost growth was attributable to certain specified changes in the program.After delays of nearly two years, two HEO sensors have been delivered and,according to program officials, the first sensor’s on-orbit performance is “exceedingexpectations.” The first GEO satellite launch has been delayed to at least late 2009/early 2010, a schedule slip of a year. Design problems have recently emerged makingfurther schedule slippage of the GEO launches likely. For example, testing hasuncovered deficiencies in the flight software that controls the health and status of thespace vehicle. Both hardware and software changes may be necessary to correct theproblem and could cause a further delay of at least a year and up to a billion dollarsin additional funding.In a similar vein, several other Air Force space programs are troubled with growingcosts and schedule delays. For example, in the five years following a productiondecision in August 2002, NPOESS RDT&E costs increased from $5 billion to almost$8 billion, total program funding requirements grew to $10.7 billion from $6.3 billion,and the schedule slipped almost a year and a half. These cost problems resultedin a Nunn-McCurdy breach and subsequent Air Force restructure of the programfinalized in June 2007.The Global Hawk program is yet another system beset with significant cost, scheduleand performance problems. Global Hawk is a high altitude, long-endurance unmannedaircraft with integrated sensors and ground stations providing intelligence, surveillanceand reconnaissance capabilities. It entered development and limited production inMarch 2001. Soon after its start, the Air Force restructured the program from a lowrisk,incremental approach to a high-risk, highly concurrent strategy. Specifically, therestructuring aimed to develop and acquire the larger RQ-4B aircraft with more advancedbut immature technologies on an accelerated production schedule. Significant costincreases between 2002 and 2005 culminated in a Nunn-McCurdy unit-cost breach,which led to certification to Congress. The program has been re-baselined three times,and aircraft unit costs have more than doubled from $81 million to $178 million inFY 2008 dollars since program start. After several restructures and re-baselinings, thecurrent program plan procures seven aircraft similar to the original demonstrators (theRQ-4A) and 47 of a larger and more capable model (the RQ-4B).However, the program continues to encounter cost, performance and scheduleproblems. The RQ-4B aircraft had its first flight in March 2007, more than a year behindschedule. The first flight had been delayed, in part, due to problems identified duringtesting. Differences between the two models turned out to be much more extensiveand complex than anticipated, resulting in extended development times, frequentengineering changes and significant cost increases. The schedules for integrating,