An excerpt from the Government Accountability Office’s April 2012 report titled “MISSILE DEFENSE: Opportunity Exists to Strengthen Acquisitions by Reducing Concurrency”:
MDA undertook a highly concurrent acquisition strategy to meet the President’s 2002 directive to deploy an initial set of missile defense capabilities by 2004. To do so, the GMD element concurrently matured technology, designed the system, tested the design, and produced and fielded a system. While this approach allowed GMD to rapidly field a limited defense that consisted of five CE-I interceptors and a fire control system, the concurrency resulted in unexpected cost increases, schedule delays, test problems, and performance shortfalls. Since then, MDA has produced and emplaced all of its planned CE-I interceptors. To address issues with the CE-I interceptors, MDA has undertaken an extensive retrofit and refurbishment program.
Prior to MDA fully completing development and demonstrating the capability of the initial interceptor, MDA committed in 2004 to another highly concurrent development, production, and fielding strategy for an enhanced version of the interceptor—CE-II—as shown in figure 2.
MDA proceeded to concurrently develop, manufacture, and deliver 12 of these interceptors before halting manufacture of components and delivery of interceptors in 2011 due to the failure in FTG-06a. Although MDA had not successfully tested this interceptor, failing in both its attempts, it manufactured and delivered 12 of these interceptors.
The discovery of the design problem while production is under way has increased MDA costs, led to a production break, may require retrofit of fielded equipment, delayed delivery of capability to the war-fighter, and altered the flight test plan. For example, the flight testing cost to confirm the CE-II capability has increased from $236 million to about $1 billion. In addition, the program will have to undertake another retrofit program, for the 10 CE-II interceptors that have already been manufactured. According to a GMD program official, although the full cost is currently unknown, he expects the cost to retrofit the CE-II interceptors to be around $18 million each or about $180 million for all 10. Intended to be ready for operational use in fiscal year 2009, it will now be at least fiscal year 2013 before the warfighter will have the information needed to determine whether to declare the variant operational.
