MASSIVE SPACE COST OVERRUNS AT PENTAGON

by Martin Sieff
UPI Senior News Analyst
Washington (UPI) Jul 19, 2005

In testimony before the Strategic Forces Subcommittee of the House Committee on Armed Services delivered last week, Robert E. Levin, director of Acquisitions and Sourcing Management at the GAO, delivered a devastating critique of the Bush administration and the Pentagon's space acquisitions' record.

"The results are discouraging," he said. "Systems cost more and take much longer to acquire than promised when initially approved.

"Overall, we have found that DOD (the Department of Defense) 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," Levin said.

Many of the problems, Levin said, came from sloppiness on the part of DOD leaders or senior officials in defining what they specifically wanted their new space-based high-tech systems to do, or in being too visionary -- approving programs when the technology did not yet exist, or had not yet been developed sufficiently to ! assure the necessary reliable performance.

"Technologies are not mature enough (in some cases) to be included in product development," Levin said. "Cost estimates are unreliable -- largely because requirements have not been fully defined and because programs start with many unknowns about technologies."

Levin painted a picture of thousands of hardworking and dedicated individuals stymied by the complexities and cross-purposes of the bureaucratic structures in which they had to function.

"Factors that make it more difficult for DOD to achieve a match between resources and requirements for space acquisitions," he said "... 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 and technolo! gy) environment."

Also, he said, "DOD starts more programs than it can afford in the long run, forcing programs to underestimate costs and over promise capability."

"As a result," he said, "there is pressure to suppress bad news about programs, which could endanger funding and support, as well as to skip testing because of its high cost."

Levin acknowledged that the Department of Defense "has recently revised its space acquisition policy, in part to attain more knowledge about technologies before beginning an acquisition program."

"However," he continued, "we remain concerned that this policy still allows programs to begin before demonstrating technologies in an operational or simulated environment."

The results of these shortcomings have cost billions of dollars and seriously reduced the space capabilities that the Department of Defense has been able to deliver, Levin said.

"For decades, space acquisition programs have been encountering large cost and increases and schedule delays," he said," As a result, DOD has been unable to deliver capabilities as promised.

"This year alone," Levin said, "... costs have continued to climb on the Space-Based Infrared System High (SBIRS-High) program ... pushing DOD's investment in this critical missile warning system to over $9.9 billion from the initial $3.9 billion made nine years ago."

Also, he said, "the National Polar-orbiting Operational Environmental Satellite System has been restructured and is facing cost increases and schedule delays."

Even the simplest and most straightforward part of the military space program -- launching satellites into space on reliable, cost-effective rockets -- is becoming more difficult and vastly more expensive, Levin warned.

"Unit cost increases for launch vehicles have now increased! by 81 percent since 2002 due to erroneous assumptions about the commercial launch market upon which the program's business case was based," he said.

In the case of many programs, Levin said, there would be no improvement in sight and cost over-runs would continue for many years.

"DOD originally planned to complete expenditures for SBIRS-High in fiscal year 2005, for example, but currently plans to spend about $3.4 billion in fiscal years 2007 through 2013," he said.

Levin and his GAO analysts were not alone in their indictment.

Pedro "Pete" Rustan, director of Advanced Systems and Technology at the National Reconnaissance Office, told a congressional subcommittee, "I think space acquisitions procedures are the biggest challenge facing our space systems today. "We must do things differently."

"Unless decisive actions are taken," Rustan said, "I think we will continue to spend lar! ge amounts of money without returning a commensurate capability to our stakeholders."

Rep. Terry Everett, R-Ala, the subcommittee chairman who called the hearing, made clear he took the criticisms seriously. "Acquisition and management practices, as well as industry standards and quality control must be vastly improved," he said in his opening statement.