Space Systems Acquisition Management Policy: A Critical Review of DOD's New Approach to Defense Acquisitions
Defense Acquisitions: Improvements Needed in Space Systems Acquisition Management Policy
The Department of Defense (DOD) spends nearly $18 billion annually to develop, acquire, and operate satellites and other space-related systems that provide critical capabilities for national security, military operations, intelligence, and civil applications. However, most of DOD's major space programs have experienced significant cost overruns, schedule delays, and performance shortfalls over the past two decades. These poor outcomes have reduced DOD's buying power, increased operational risks, and undermined its credibility with Congress and other stakeholders.
Defense Acquisitions : Improvements Needed in Space Systems Acquisition Management Policy download b
In response to these challenges, DOD has recently implemented a new acquisition management policy for space systems, which sets the stage for making decisions on individual space programs. The policy aims to provide more consistent and robust information on technologies, requirements, and costs, and to enable more flexible and responsive acquisition strategies. However, the policy also has some limitations that may limit its effectiveness in improving space acquisition outcomes.
In this article, we will provide some background information on how DOD acquires space systems and what are the main problems it faces. We will then analyze the strengths and weaknesses of DOD's new space acquisition policy, and compare it with DOD's other weapon systems acquisition policy. Finally, we will present some recommendations from the Government Accountability Office (GAO) on how DOD can improve its space acquisition management policy, and answer some frequently asked questions about the topic.
Background: How does DOD acquire space systems and what are the challenges?
The space acquisition process and its key decision points
DOD's space acquisition process is a series of phases and milestones that guide the development and procurement of space systems. The process is governed by DOD's space acquisition policy, which defines the roles and responsibilities of various stakeholders, such as the Secretary of the Air Force (who is DOD's executive agent for space), the Under Secretary of Defense for Acquisition and Sustainment, the Joint Chiefs of Staff, the combatant commands, and the program managers.
The current space acquisition policy, which was issued in November 2019, divides the process into four phases: A (concept development), B (preliminary design), C (detailed design), and D (production). Each phase is preceded by a key decision point (KDP), where senior leaders review the program's progress and readiness to proceed to the next phase. The KDPs are labeled as A, B, C, and D, respectively. Figure 1 shows an overview of the key decision points and their associated activities.
Figure 1: Overview of Key Decision Points (Source: GAO-03-1073)
The problems of cost growth, schedule delays, and performance shortfalls
The majority of DOD's major space programs have experienced poor acquisition outcomes over the past two decades. According to GAO's assessments, most of these programs have exceeded their original cost estimates by an average of 118 percent, delayed their initial operational capability by an average of 28 months, and delivered less capability than planned. For example, the National Polar-orbiting Operational Environmental Satellite System (NPOESS) program was canceled in 2010 after spending $5.8 billion and falling behind schedule by over 5 years. The program was replaced by two separate programs that cost more than twice as much as the original program. Another example is the Space Based Infrared System High (SBIRS High) program, which is expected to cost $19.9 billion and deliver its first satellite 9 years later than planned.
These poor outcomes have reduced DOD's buying power, increased operational risks, and undermined its credibility with Congress and other stakeholders. For instance, due to cost growth and schedule delays, DOD has had to defer or cancel other space programs or initiatives, such as the Transformational Satellite Communications System (TSAT) and the Operationally Responsive Space (ORS) program. Moreover, due to performance shortfalls, DOD has had to rely on aging or vulnerable legacy systems or alternative sources of capability, such as commercial or allied satellites. Furthermore, due to poor credibility, DOD has faced increased scrutiny and oversight from Congress and other external entities, such as GAO and independent review teams.
The causes of poor outcomes and previous reform efforts
The root causes of DOD's space acquisition problems are complex and interrelated. However, GAO has identified three main factors that contribute to poor outcomes: unrealistic expectations, optimistic assumptions, and uncertain funding. Specifically:
Unrealistic expectations: DOD often sets ambitious requirements for its space systems that exceed what current or near-term technologies can deliver. For example, DOD initially envisioned TSAT as a constellation of satellites that would provide global secure communications with laser links, onboard processing, and anti-jamming capabilities. However, these technologies were not sufficiently mature or proven to be integrated into a complex system.
Optimistic assumptions: DOD often underestimates the time, cost, and risk involved in developing and acquiring its space systems. For example, DOD initially estimated that NPOESS would cost $6.5 billion and be delivered by 2008. However, these estimates did not account for the technical challenges, integration issues, testing requirements, and management changes that plagued the program.
Analysis: What are the strengths and weaknesses of DOD's new space acquisition policy?
The potential benefits of the new policy
DOD's new space acquisition policy may help provide more consistent and robust information on technologies, requirements, and costs, and enable more flexible and responsive acquisition strategies. For example, the policy employs a new independent cost estimating process, independent program reviews performed by space experts not connected with the program, and more rigorous analyses of alternatives, requirements, and system interdependencies. This information may help decision-makers assess whether gaps exist between expectations and what the program can deliver.
The policy also encourages the use of a block approach, which divides a large and complex program into smaller and more manageable increments or blocks, each with its own requirements, budget, schedule, and performance goals. This approach may allow more flexibility, adaptability, and responsiveness to changing needs and technologies. For instance, the Global Positioning System (GPS) program has used a block approach to deliver incremental improvements in satellite capability over time.
The limitations of the new policy
However, the benefits that can be derived from these tools will be limited since the new policy does not alter DOD's practice of committing major investments before knowing what resources will be required to deliver promised capability. Instead, the policy encourages development of leading edge technology within product development, that is, at the same time the program manager is designing the system and undertaking other product development activities. As GAO's work has repeatedly shown, such concurrency increases the risk that significant problems will be discovered as the system is integrated and built, when it is more costly and time-consuming to fix them. Moreover, when even one technology does not mature as expected, the entire program can be thrown off course since time and cost for invention cannot be reliably estimated.
For example, GAO reported in 2015 that the Space Based Infrared System High (SBIRS High) program experienced significant cost growth and schedule delays because it started product development with immature technologies and encountered integration problems. The program's total acquisition cost increased from $4 billion to $19.9 billion (in then-year dollars), and its first satellite launch was delayed by 9 years.
The comparison with DOD's other weapon systems acquisition policy
DOD's new acquisition policy for its other weapon systems recognizes these risks and consequently requires technology and product development to be done separately. The policy also sets a minimum threshold of maturity for allowing technologies into a program. As GAO previously recommended, DOD should not allow technologies to enter into a weapon system's product development until they are assessed at a technology readiness level (TRL) 7, meaning that a prototype has been demonstrated in an operational environment.
Recommendations: How can DOD improve its space acquisition management policy?
The GAO's recommendations and DOD's response
GAO has made a number of recommendations in previous work to improve DOD's acquisition of space systems. DOD has agreed with and taken action on many of these recommendations. For example, DOD took actions to implement a GAO recommendation to use an incremental approach to acquiring space launch services. DOD's modified approach reduced risk by allowing it to incorporate knowledge gained from early launch competitions to inform subsequent competitions.
However, some of GAO's recommendations have not been fully implemented or addressed by DOD. For instance, GAO recommended in 2003 that DOD modify its space acquisition policy to separate technology development from product development and ensure decisions to start programs are based on sound criteria. DOD disagreed with this recommendation, arguing that it would slow down acquisitions, increase risks, and prevent DOD from taking advantage of cutting edge technology. GAO continues to believe that this recommendation is valid and would help DOD achieve faster delivery of new capabilities, especially if DOD balances new, streamlined acquisition processes with sufficient oversight to help ensure program success.
The best practices for technology development and product development
GAO has identified several best practices for technology development and product development that can help DOD improve its space acquisition outcomes. These include:
Using technology readiness levels (TRLs) to measure the maturity of technologies and ensure they are ready for integration into a product or system. TRLs range from 1 (basic principles observed) to 9 (actual system proven in operational environment). GAO has recommended that DOD should not allow technologies to enter into a weapon system's product development until they are assessed at a TRL 7.
Separating technology development from product development to reduce concurrency and risk. Technology development is the process of reducing technology risk and determining the appropriate set of technologies to be integrated into a new product. Product development is the process of designing, developing, testing, producing, and deploying a new product. GAO has found that starting product development with immature technologies can lead to significant cost growth, schedule delays, and performance shortfalls.
Using an evolutionary approach to deliver incremental improvements in capability over time. An evolutionary approach is a way of dividing a large and complex program into smaller and more manageable increments or blocks, each with its own requirements, budget, schedule, and performance goals. GAO has found that an evolutionary approach can allow more flexibility, adaptability, and responsiveness to changing needs and technologies.
The criteria for starting and continuing space programs
GAO has also identified several criteria for starting and continuing space programs that can help DOD match customer expectations to resources before committing major investments. These include:
Conducting rigorous analyses of alternatives (AOAs) to compare multiple potential solutions to satisfy capability needs. AOAs should consider a wide range of options, including non-materiel solutions (such as changes in doctrine or tactics), existing systems (such as commercial or allied satellites), and different levels of performance (such as lower or higher resolution). AOAs should also assess the costs, benefits, risks, and trade-offs of each option.
Establishing clear and stable requirements that reflect what the system needs to do and how well it needs to perform. Requirements should be based on validated needs, realistic assumptions, and available resources. Requirements should also be prioritized and balanced among competing demands, such as cost, schedule, performance, and interoperability.
Securing stable and sufficient funding that matches the estimated costs of the program. Funding should be based on realistic cost estimates that account for the technical challenges, integration issues, testing requirements, and management changes that may affect the program. Funding should also be consistent with DOD's priorities and budget constraints.
Conclusion: What are the main points and implications of the article?
In conclusion, this article has discussed the challenges and opportunities DOD faces as it acquires space systems amid changes to the acquisition environment. The main points are:
DOD spends nearly $18 billion annually to develop, acquire, and operate satellites and other space-related systems that provide critical capabilities for national security, military operations, intelligence, and civil applications.
DOD has faced long-standing challenges in acquiring space systems, such as cost growth, schedule delays, and performance shortfalls. These poor outcomes have reduced DOD's buying power, increased operational risks, and undermined its credibility with Congress and other stakeholders.
DOD has recently implemented a new acquisition management policy for space systems, which aims to provide more consistent and robust information on technologies, requirements, and costs, and enable more flexible and responsive acquisition strategies. However, the policy also has some limitations that may limit its effectiveness in improving space acquisition outcomes.
DOD's new space acquisition policy differs from its other weapon systems acquisition policy in several ways, such as allowing technology development to continue within product development and not specifying a minimum technology readiness level for starting product development.
GAO has made a number of recommendations in previous work to improve DOD's acquisition of space systems. DOD has agreed with and taken action on many of these recommendations, but some have not been fully implemented or addressed. GAO continues to believe that these recommendations are valid and would help DOD achieve faster delivery of new capabilities.
GAO has also identified several best practices and criteria for technology development and product development that can help DOD improve its space acquisition outcomes. These include using technology readiness levels, separating technology development from product development, using an evolutionary approach, conducting rigorous analyses of alternatives, establishing clear and stable requirements, and securing stable and sufficient funding.
The implications of this article are that DOD faces a changing environment that presents both challenges and opportunities for its space acquisitions. DOD needs to balance the need for speed and innovation with the need for discipline and oversight. DOD also needs to align its expectations with its resources and ensure that its decisions are based on sound information. By doing so, DOD can improve its space acquisition outcomes and deliver the capabilities that the nation needs.
FAQs: What are some common questions and answers about the topic?
Here are some common questions and answers about the topic:
Q1: What is the difference between space systems and other weapon systems?
A1: Space systems are more complex, interdependent, and technologically challenging than other weapon systems. They also operate in a harsh and unpredictable environment that poses many risks.
Q2: What is the role of the Secretary of the Air Force in space acquisitions?
A2: The Secretary of the Air Force is DOD's executive agent for space, which means he or she is responsible for developing, acquiring, and operating all DOD space systems. He or she also oversees the implementation of DOD's space acquisition policy.
Q3: What is a technology readiness level (TRL) and why is it important?
A3: A technology readiness level is a measure of how mature a technology is, from TRL 1 (basic principles observed) to TRL 9 (actual system proven in operational environment). It is important because it indicates how ready a technology is to be integrated into a product or system, and how much risk and uncertainty are involved.
Q4: What is a block approach and how does it help space acquisitions?
A4: A block approach is a way of dividing a large and complex program into smaller and more manageable increments or blocks, each with its own requirements, budget, schedule, and performance goals. It helps space acquisitions by allowing more flexibility, adaptability, and responsiveness to changing needs and technologies.
Q5: What are some examples of successful space programs that followed best practices?
A5: Some examples are the Global Positioning System (GPS), which used a block approach and mature technologies; the Space-Based Infrared System (SBIRS), which separated technology development from product development; and the Advanced Extremely High Frequency (AEHF) satellite program, which used rigorous analyses and independent reviews before starting product development.
71b2f0854b