Index


Ballistic Missile Defense: More Common Systems and Components Could
Result in Cost Savings (Letter Report, 05/21/99, GAO/NSIAD-99-101).

GAO reviewed the Department of Defense's (DOD) efforts to incorporate
common subsystems and components in its ballistic missile defense
acquisition programs, focusing on: (1) the key benefits that the
Ballistic Missile Defense Organization (BMDO) and service officials
believe could be achieved through commonality; (2) what BMDO and the
services have done to incorporate commonality into their programs; and
(3) BMDO's plans for instilling commonality in the future.

GAO noted that: (1) according to BMDO and service officials, the key
benefits of commonality--using the same or interchangeable subsystems
and components in more than one weapon--are cost savings and improved
interoperability among BMDO systems; (2) increased use of common items
can reduce both production costs and total life-cycle costs of a system;
(3) because BMDO systems must interoperate with each other, DOD
officials said that commonality is directly linked to the success of
interoperability; (4) while commonality is theoretically possible at any
level of a weapon system, BMDO has achieved commonality primarily at
lower levels of assembly such as in components; (5) according to BMDO
and program officials, they have had limited success in designing common
systems or major subsystems mostly because of differences in system
requirements and operating environments and difficulties in
incorporating new technologies into systems with mature designs; (6)
these officials said that the greatest benefits of commonality can be
produced at the component level; (7) BMDO has sought to promote
commonality within its ballistic missile defense systems through the use
of an open systems approach and technology insertion at the component
level--an approach that seeks to use commonly available commercial
products in DOD systems, rather than developing program unique
components; (8) BMDO officials said that they expect more commonality in
the future for a variety of reasons, such as having fewer suppliers and
more opportunities to upgrade systems with newer technologies; (9)
although BMDO tries to promote commonality in its programs, it does not
have a structured process to systematically identify promising common
technologies and has provided little funding to evaluate the feasibility
of the use of these technologies; (10) although some technologies have
been identified and preliminary estimates show that they could save
substantial dollar amounts, these technologies must be thoroughly
evaluated; (11) without adequate evaluation, program offices and their
prime contractors are reluctant to convert to unproven technologies; and
(12) to better achieve commonality, BMDO needs to establish a structured
effort or program with appropriate funding to identify and evaluate
potential common systems and components.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-99-101
     TITLE:  Ballistic Missile Defense: More Common Systems and
	     Components Could Result in Cost Savings
      DATE:  05/21/99
   SUBJECT:  Defense procurement
	     Defense cost control
	     Ballistic missiles
	     Weapons systems
	     Commercial products
	     Systems compatibility
IDENTIFIER:  SDI Theater High Altitude Area Defense System
	     THAADS
	     Aegis Weapon System
	     DOD National Missile Defense Program
	     Navy Theater Ballistic Missile Defense Program

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO report.  This text was extracted from a PDF file.        **
** Delineations within the text indicating chapter titles,      **
** headings, and bullets have not been preserved, and in some   **
** cases heading text has been incorrectly merged into          **
** body text in the adjacent column.  Graphic images have       **
** not been reproduced, but figure captions are included.       **
** Tables are included, but column deliniations have not been   **
** preserved.                                                   **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
** A printed copy of this report may be obtained from the GAO   **
** Document Distribution Center.  For further details, please   **
** send an e-mail message to:                                   **
**                                                              **
**                    <[email protected]>                        **
**                                                              **
** with the message 'info' in the body.                         **
******************************************************************
NS99101 GAO United States General Accounting Office

Report to the Secretary of Defense

May 1999 BALLISTIC MISSILE DEFENSE

More Common Systems and Components Could Result in Cost Savings

GAO/NSIAD-99-101

  GAO/NSIAD-99-101

Page 1 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality United States General Accounting Office

Washington, D. C. 20548 Let t er National Security and

International Affairs Division

B-280494 Letter May 21, 1999 The Honorable William S. Cohen The
Secretary of Defense

Dear Mr. Secretary: Affordability is a major concern for ballistic
missile defense programs. According to the Ballistic Missile
Defense Organization's (BMDO) November 1998 development plan, the
organization faces a shortfall of several hundred million dollars
per year when its baseline acquisition

programs are compared to available funding in the future years'
defense plan. Because using common subsystems and components when
designing systems can reduce system costs, BMDO and the services 1
have considered the feasibility of sharing designs among some of
their programs.

We reviewed the Department of Defense's (DOD) efforts to
incorporate common subsystems and components in its ballistic
missile defense acquisition programs. Specifically, we (1)
identified the key benefits that BMDO and service officials
believe could be achieved through commonality, (2) determined what
BMDO and the services have done to incorporate commonality into
their programs, and (3) identified BMDO's plans for instilling
commonality in the future. We are addressing this report to you
because of the potential cost savings from commonality and because
your support is needed for DOD to take advantage of such potential

savings. Results in Brief According to BMDO and service officials,
the key benefits of commonality using the same or interchangeable
subsystems and

components in more than one weapon are cost savings and improved
interoperability among BMDO systems. Increased use of common items
can reduce both production costs and total life- cycle costs of a
system. Because BMDO systems must interoperate with each other,
DOD officials said that commonality is directly linked to the
success of interoperability.

1 The military services execute most of the BMDO- funded
acquisition programs.

Lett er

B-280494 Page 2 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

While commonality is theoretically possible at any level of a
weapon system, BMDO has achieved commonality primarily at lower
levels of assembly, such as in components. According to BMDO and
program

officials, they have had limited success in designing common
systems or major subsystems mostly because of differences in
system requirements and operating environments and difficulties in
incorporating new

technologies into systems with mature designs. These officials
said that the greatest benefits of commonality can be produced at
the component level. BMDO has sought to promote commonality within
its ballistic missile defense systems through the use of an open
systems approach and technology insertion at the component level
an approach that seeks to use commonly available commercial
products in DOD systems, rather than developing program unique
components.

BMDO officials said that they expect more commonality in the
future for a variety of reasons, such as having fewer suppliers
and more opportunities to upgrade systems with newer technologies.
Although BMDO tries to promote commonality in its programs, it
does not have a structured process to systematically identify
promising common technologies and has provided little funding to
evaluate the feasibility of the use of these technologies.
Although some technologies have been identified and preliminary
estimates show that they could save substantial dollar amounts,
these technologies must be thoroughly evaluated. Without adequate
evaluation, program offices and their prime contractors are
reluctant to convert to unproven technologies.

To better achieve commonality, BMDO needs to establish a
structured effort or program with appropriate funding to identify
and evaluate potential common systems and components. Key Benefits
of Commonality in Ballistic Missile Defense Programs

According to DOD officials, the primary benefit from the use of
common subsystems and components is cost savings, especially over
the life of a system. One way to achieve commonality is to insert
common technologies into existing systems. BMDO's November 1998
development plan states that the success of technology insertion
can be improved by using open systems concepts in system design.
These concepts, introduced into DOD in 1994, promote affordability
by extensive use of common components. Open systems, according to
DOD documents, allow DOD to

use commercially available, widely accepted standard products from
multiple vendors. The advantage of this is that wide availability
of a potentially large variety of compliant products makes rapid
design and

B-280494 Page 3 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

prototyping much easier than when every element of the system must
be custom designed. DOD documents note that the long- term payoffs
for open systems include lower life- cycle costs for weapon
systems, better system performance with greater interoperability
between systems, and

more rapid technology upgrades. Army missile defense program
officials told us that the advantage of commonality is that as the
quantity of an item increases, both fixed and unit component
production costs are reduced.

Increased commonality results in reduced life- cycle costs.
Another benefit of commonality, according to BMDO, is improving
interoperability among BMDO systems. Officials from the Army's
Theater High Altitude Area Defense (THAAD) program told us that
each BMDO

program is required to interoperate with the other programs and
that BMDO plans to have common messages, communication, and
processing equipment. Navy officials said that commonality is
inherently linked to the success of interoperability. Army
officials told us that commonality also may enhance reliability.
According to these officials, experience in the

electronics industry has shown that when the quantity of
production items increases, reliability increases.

Mixed Success in BMDO's Commonality Efforts

Depending on the particular circumstances, commonality is possible
at any level of a weapon, from the entire system or a major
subsystem to components or piece parts. BMDO has had limited
success in achieving commonality in entire systems or major
subsystems. The use of a common interceptor missile for the Army's
THAAD program and the Navy's Theaterwide program has been studied
extensively, and cost savings have been shown to be outweighed by
modification and integration costs and risks. BMDO and service
officials believe that system commonality has been

limited because of differences in system requirements and
operating environments. BMDO and the services have had some
success in achieving commonality below the system level,
especially at the component level.

System Level Commonality To date, the most ambitious attempt at
instilling commonality in a BMDO program relates to considering a
common interceptor for the Army's THAAD program and the Navy's
Theater- wide program. Since 1991, several DOD studies have
examined the possibility of such a common interceptor. These
studies looked primarily at adapting the THAAD missile for the
Theater- wide program since the THAAD program was further along in

development. While initially, a common interceptor appeared
attractive given that the threats, defense objectives, and system
functions are very

B-280494 Page 4 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

similar, the studies generally found that differences in the
systems' mission requirements and operating environments would be
difficult and costly to overcome. For example, in 1993, a DOD
committee reported that a common THAAD and Navy Theater- wide
interceptor would likely be impractical because of safety concerns
unique to shipboard operations. Also in 1993, DOD's independent
Cost Analysis Improvement Group reported that although it was too
early to assess cost- effectiveness, it was unlikely that the
objective of a common interceptor could be achieved, in part,
because of different operating environments. THAAD subsystems may
be spaced out over an area of several square miles, while the Navy
system must operate from a ship at sea. Navy radars and missiles
will be

much closer together, increasing the possibility of interference
and the hazards associated with flammable materials. Also, THAAD
is intended to be located near critical assets and to intercept
missiles both inside and

outside the atmosphere as they fly toward the system. The Theater-
wide missile will be designed to intercept a target missile in all
stages of flight outside the atmosphere. In many cases, the target
missile will travel away from the defense system, which will
require an interceptor that is roughly twice as fast as the
planned THAAD interceptor. More recent studies have further
defined the risks associated with a

common interceptor. The Navy's 1997 cost analysis, which
specifically evaluated whether the Navy Theater- wide system could
use the THAAD interceptor's kill vehicle, 2 concluded that the
kill vehicle could not be used in the Navy system without
significant modifications. The study concentrated on two variants
of the THAAD kill vehicle. The first variant would be about 85-
percent common with the Army's kill vehicle and would result in
commonality benefits totaling $150 million. However, these
benefits, according to the analysis, were almost totally offset by
increases in safety- related costs associated with the Army's use
of liquid fuels in the kill vehicle's design. The use of liquid
fuels, which are toxic, corrosive, and

explosive, would require additional Navy investments in safety
equipment and training. The second variant was estimated to be 54-
percent common with the Army's kill vehicle and it would result in
commonality benefits of $50 million versus additional costs of
$500 million. These additional costs were primarily for developing
a new seeker capable of longer range intercepts and a new solid
fuel control system to reduce shipboard safety

2 The kill vehicle is the front end of an interceptor that will
see the target and destroy it by colliding with it.

B-280494 Page 5 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

hazards. A 1997 BMDO study 3 reconfirmed that designing a common
interceptor for the two programs would increase costs and risks
and recommended that both systems proceed as planned. The study
also recommended that both programs be structured to support
commonality

objectives when they are upgraded and suggested that commonality
could be revisited as a mitigation approach if major problems
occur in either program. Commonality Below the

System Level BMDO has had more success at incorporating
commonality below the

system or major subsystem level, as the following examples show.
The THAAD 4 and National Missile Defense 5 radars use several
common

components, including common hardware, software, and processors.
Program officials believe that measurable cost savings have been
achieved by this commonality, but the magnitude of the savings is
yet to be determined.

 Both Navy theater missile defense systems rely on technology that
has evolved from earlier versions of the Standard missile and the
AEGIS weapon system. For example, the Navy Area program 6 is
modifying an earlier version of the Navy's Standard missile and is
upgrading the existing AEGIS system in order to perform its
theater ballistic missile

defense mission. DOD officials could not provide an estimate of
the cost savings associated with this commonality.  The Navy
Theater- wide program and the National Missile Defense

program are developing common infrared seekers and propulsion
systems. DOD officials could not provide an estimate of the cost
savings associated with this commonality.

BMDO and service officials said that component level commonality
has been the focus of most recent initiatives. BMDO has emphasized
commonality at the component level through the use of open systems
and

3 BMDO, The Commonality Alternatives Systems Study, 1997. 4 For
more details on the THAAD program, see Ballistic Missile Defense:
Improvements Needed in THAAD Acquisition Planning (GAO/NSIAD-97-
188, Sept. 12, 1997).

5 For more details on the National Missile Defense program, see
National Missile Defense: Even With Increased Funding Technical
and Schedule Risks Are High (GAO/NSIAD-98-153, June 23, 1998). 6
For more details on the Navy Area program, see Ballistic Missile
Defense: Improvements Needed in Navy Area Acquisition Planning
(GAO/NSIAD-98-34, Nov. 14, 1997).

B-280494 Page 6 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

technology insertion. To this end, BMDO has established several
working groups, including the Open Systems Working Group and the
Government/ Industry Open Systems Applications Group. The purpose
of the Working Group, 7 which meets quarterly, is to coordinate
the use of open systems within the BMDO community, and the
purposes of the Applications Group 8 are to provide a forum for
communication regarding specific and planned open systems
implementation opportunities and to enhance the consistent

application of open systems. The Applications Group met three
times in 1998. Participants at the Working Group's and
Applications Group's meetings have generally been pleased with the
results to date. According to BMDO officials, BMDO recently
implemented two processes that, while not primarily focused on
commonality, should help identify promising common technologies.
These are the technology master plan

process and the Family of Systems architecture. The technology
master plan process has identified multiple potential applications
for new technology. For example, four different window technology
efforts, supporting two different programs, were combined into one
advanced window effort to support both programs. The Family of
Systems architecture is focused on systems interoperability, but,
according to BMDO officials, commonality and affordability are
inherently linked to the

systems design trade- offs necessary to achieve interoperability.
Factors That Restrict Commonality

We discussed factors that have restricted the use of common
subsystems and components in ballistic missile defense systems
with BMDO and service officials. These officials said that
commonality must be incorporated into the design phase of a system
or subsystem when requirements are being established for maximum
benefit. They identified

several reasons why commonality in BMDO systems has been difficult
to achieve. One reason given was different performance
requirements. BMDO systems are designed to meet specific service
performance requirements that may be compromised with common
components. For example, according to the National Missile Defense
Joint Program Office, an inertial measurement

7 The Working Group consists of representatives from BMDO and its
program offices. 8 The Applications Group's members include not
only BMDO and program office representatives, but also
representatives from BMDO's prime contractors and major
subcontractors.

B-280494 Page 7 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

unit developed for a theater missile defense interceptor could be
used for the National Missile Defense Program's interceptor.
However, the weight, volume, and power requirements may not be
fully compatible with the National Missile Defense program goals,
possibly lowering performance. Navy officials said where operating
requirements and environments are substantially different,
commonality may not be appropriate, especially if cost and
performance goals must be sacrificed to achieve it.

A second reason was mature designs. BMDO systems have mature
designs and integration of common systems may involve high
integration costs. As noted previously, for example, the cost to
integrate the Army's THAAD

interceptor into the Navy's Theater- wide system was estimated to
be between $150 million and $500 million. Officials from the
Army's missile defense program office told us that the stage of
maturity of a weapon system limits the extent to which changes can
be implemented. While some components such as batteries can be
changed easily, others, such as composite airframes, cannot. They
added that the only way to make

changes at a system level for a mature system is through future
upgrades. A third reason given by officials was that candidate
common systems emanating from other programs have to be proven to
a program office or prime contractor before either one will accept
them. That is, program offices and prime contractors are reluctant
to accept systems they did not design. THAAD officials told us
that commonality is a design constraint that must be considered at
the beginning of the design process and that

program managers would resist changing the baseline design after
it has been established. According to the Army's missile defense
program office, DOD acquisition reforms have given prime
contractors total system performance responsibility, and thus,
they have little incentive to use common systems that can be
produced by another contractor. Navy officials added that a
company that produces a common product for all applications is
unlikely to encourage a competitive industrial base for that

product. A fourth reason was management challenges. A joint
service program is likely to require many more decision trade-
offs than would a single service development, and there are
complex budget, cost, and schedule interactions that affect the
delivery of products for both services. The effort will result in
a successful conclusion only if all parties are willing to make
the necessary compromises to maintain commonality.

B-280494 Page 8 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

BMDO's Plans for Enhancing Commonality in the

Future Despite the limited commonality that exists, officials told
us that they

expect to see more commonality in the future because there will
likely be fewer suppliers and more opportunities to upgrade
existing designs with newer technology. Several efforts that
involve increased commonality have already started. However, BMDO
does not have a structured process to systematically identify
promising common technologies. Furthermore, even when promising
technologies are identified, BMDO's ability to incorporate them
into weapon systems is hampered because it does not have a
consistent source of funding to evaluate the feasibility of using
the technologies. DOD's Future Emphasis on

Commonality The decreasing number of defense contractors,
subcontractors, and

suppliers is forcing DOD system designs to contain common
subsystems or components that are made by the same supplier. One
BMDO official told us that industry is moving away from producing
defense- specific parts; thus, defense programs will be forced
toward more commonality. Also,

BMDO's requirement that all of its theater ballistic missile
defense systems operate in an integrated manner, that is,
interoperate with each other a concept known as the Family of
Systems will facilitate the use of common items. According to Navy
officials, commonality, affordability, schedule, and performance
are inherently linked to interoperability success.

Most officials said that commonality will become more prevalent as
systems are improved through periodic upgrades. The BMDO
development plan notes that new technology has primarily been
viewed as a contributor in the earliest stages of development
before a system's design has been frozen. It states that many of
the current BMDO component technologies are already obsolete and
often unavailable. With the lifetime of many

microelectronic devices at less than 2 years, BMDO will have to
modify system designs several times during the development phase.
Finally, it notes that programs must plan to make use of emerging
commercial and defense developed technologies based on
availability of technology rather than on DOD acquisition phases.
A BMDO official said that BMDO programs have mature system designs
and thus seeking commonality could result in high engineering
costs. However, in the future, when these systems are upgraded,
common subsystems and components could be inserted more
affordably.

B-280494 Page 9 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

Several system upgrades related to commonality are being
developed. For example, BMDO is developing the next generation
radar transmit/ receive modules to replace modules that are
currently planned for use in both National Missile Defense and
THAAD radars. Also, BMDO's Advanced Interceptor Technology program
is to develop a new interceptor that can be used to upgrade
current systems. Although it does not have commonality as a
specific goal, the program, according to many officials, would
result in greater BMDO commonality through system upgrades. For

example, Navy officials said that a number of common components
are being developed under this and other programs, including
common infrared seekers and common propulsion systems.

Further Application Limited By Lack of Structured Process for
Identifying and Funding Promising Technologies BMDO currently
promotes component commonality primarily by acting as

a clearinghouse for information. The working groups meet and
discuss common technologies that could possibly be shared by the
services or may be available commercially. However, even with the
working groups and the process initiatives, BMDO officials told us
that they lack a formal process

to systematically identify promising common technologies. One BMDO
official described BMDO's effort as hit or miss.

Furthermore, even if a promising common technology is identified,
BMDO does not have a consistent source of funding to evaluate the
feasibility of the use of that technology. Evaluation is necessary
to assess (1) the costs and risks of transitioning to a new
technology and (2) the cost impact of

operating and maintaining that technology after system deployment.
Funding for evaluations often comes from reprogrammed sources or
from excess program funds; a budget account for such evaluations
does not exist.

Through the Applications Group, BMDO has identified 16 possible
common technologies, but only 4 have been funded for evaluation.
One technology involves replacing ring laser gyroscopes, which
cost $70, 000 to $100,000

each, with interferometric fiber optic gyroscopes, 9 which cost
$15,000 to $30,000 each. The cost to evaluate the feasibility of
this one technology is estimated to be $500,000, with funding
being provided by BMDO. Another

$7 million is estimated to be needed to develop the technology for
program insertion. This development funding is expected to be
provided by BMDO, 9 These gyroscopes are part of an interceptor's
inertial measurement units and allow the interceptor to track and
intercept the target.

B-280494 Page 10 GAO/NSIAD-99-101 Ballistic Missile Defense
Program Commonality

the Defense Advanced Research Projects Agency, and the Patriot
Advanced Capability- 3 Program Office. According to BMDO, while
the Army's THAAD and Patriot Advanced Capability- 3 programs would
be the initial beneficiaries of this common component, other
programs may also benefit in the future. BMDO's preliminary
estimate of the cost savings that would

result from the use of the common gyroscopes is about $116 million
over the life of the systems. The average cost to evaluate the
other three technologies was estimated at $1 million to $1.8
million, versus average projected life- cycle cost savings of $33
million. BMDO's preliminary estimates show that five of the other
technologies could save $113 million if implemented, but they have
not received funding for the needed evaluations. Army officials
told us that many good common technologies are never realized
because the near- term funding needed to quantify the technical
and cost benefits for those

candidates is insufficient. To better structure its commonality
effort, BMDO could consider the example of other DOD programs,
such as the Army's Horizontal Technology Integration Program,
which has many of the same goals as BMDO's effort. The purpose of
this program is to apply common technologies across multiple
systems within a force to increase

effectiveness. The program seeks to reduce overall cost while
allowing for rapid fielding of high payoff technologies, ensure
interoperability and commonality, and facilitate simultaneous
system upgrades. The Army's process for this is more structured
than BMDO's. Proposals are forwarded to an executive secretariat
and are then reviewed by a council of colonels. If the proposal is
promising, it is reviewed by a council of

general officers for formal approval. The program provides funding
to the appropriate program offices for approved projects so as to
control design and funding. The Army estimates that the program
has already resulted in cost savings of $2 billion.

Conclusions Because DOD and BMDO studies have demonstrated the
potential for reducing costs and enhancing interoperability
through increased commonality within BMDO systems, BMDO has taken
some initial steps to

make its systems more affordable through the use of commonality,
primarily at the component level. BMDO expects to have greater
commonality in the future, either through the use of upgrades to
existing systems or through more common designs in future weapon
systems.

B-280494 Page 11 GAO/NSIAD-99-101 Ballistic Missile Defense
Program Commonality

However, at the time of our review, BMDO did not have a structured
effort or program with appropriate funding to systematically
identify and evaluate potential common systems and components. In
our opinion, developing such an effort is both feasible and
potentially beneficial. The Army's Horizontal Technology
Integration program is an example of another DOD program that has
many of the same goals as BMDO's. While we recognize that BMDO
must fund many pressing priorities within its

available resources, we believe that the potential for significant
cost savings warrants formalization of BMDO's commonality
activities. In commenting on a draft of this report, DOD said that
BMDO had recently begun planning for a structured and funded
commonality program.

Recommendation In light of potential cost savings that will
enhance the affordability of ballistic missile defense programs,
we recommend that the Secretary of

Defense take steps to ensure that BMDO implements plans to
establish a structured program, with appropriate milestones and
funding, to identify and evaluate potential common systems and
components for its missile

defense systems. Agency Comments and Our Evaluation

In commenting on a draft of this report, DOD partially concurred
with our recommendation. DOD concurred with the intent of the
recommendation but stated that action by the Secretary of Defense
was unnecessary because BMDO was in the process of establishing
the recommended structured and funded program. In clarifying DOD's
comments, a BMDO official told us that the organization began
internal discussions aimed at establishing the program in March
1999 and that a process action team, established in April 1999,
recommended the following actions.

 Criteria be established to judge commonality proposals; the
criteria will include readiness of the technology, its
producibility, benefits to more than one program, future
potential, and the ability to build on existing technologies.  A
working group be formed to evaluate proposed technologies.
Promising technologies be forwarded to an existing BMDO advanced

technology and cost benefits team that will estimate life- cycle
costs.  Technologies with reasonable cost estimates be passed to a
senior level steering group for approval.

B-280494 Page 12 GAO/NSIAD-99-101 Ballistic Missile Defense
Program Commonality

The official told us that this process had not yet been finalized
or implemented and that no decision had been made on how the
evaluations would be funded. We modified our report to recognize
that BMDO has begun planning a structured and funded program for
identifying and evaluating potential common systems and
components. We have also

modified our recommendation to emphasize the need for the
Secretary of Defense to take steps to ensure that BMDO's plans for
a structured program are implemented, with appropriate milestones
and funding. DOD also provided additional technical comments,
which were incorporated as appropriate. DOD's comments are
included in appendix I.

Scope and Methodology To describe the benefits of commonality to
BMDO programs, we

interviewed agency officials and reviewed pertinent documentation,
including the BMDO Development Plan, the BMDO Open Systems
Deployment Plan, and the Theater Missile Defense Engineering and

Technology Commonality Study. We analyzed the various factors that
have contributed to commonality within BMDO programs. To determine
what current efforts have been undertaken by BMDO and the services
to achieve commonality, we interviewed agency officials and
analyzed relevant documentation, including the Navy Theater- wide
Phase II Cost and Operational Effectiveness Analysis, the BMDO
Commonality

Alternatives System Study, and committee charters and meeting
summaries. We examined BMDO's open systems and technology
insertion efforts to determine achievements and future plans. We
also interviewed government and industry participants in
commonality meetings and forums. To identify BMDO's plans to
instill commonality in the future, we interviewed agency officials
and analyzed documentation related to

BMDO's commonality efforts and the Army's Horizontal Technology
Integration program, which has goals similar to BMDO's commonality
effort.

We interviewed responsible agency officials at the Office of the
Secretary of Defense, the Joint Staff, BMDO, and the Defense
Advanced Research Projects Office, in Washington, D. C.; the
Office of the Assistant Secretary of the Army (Research,
Development & Acquisition) and the Office of the Army's Deputy
Chief of Staff for Operations and Plans, in Washington, D. C.; the
Army's Program Executive Office for Air and Missile Defense, and

B-280494 Page 13 GAO/NSIAD-99-101 Ballistic Missile Defense
Program Commonality

THAAD and Patriot program offices, in Huntsville, Alabama; the
Navy's Program Executive Office (Theater Surface Combatants) in
Washington, D. C.; the Naval Surface Warfare Center in Dahlgren,
Virginia; the Office of the Secretary of the Air Force, Theater
Air Defense Division, Washington, D. C.; and industry officials in
Washington, D. C.

We conducted our review from June 1998 to February 1999 in
accordance with generally accepted government auditing standards.
As you know, the head of a federal agency is required by 31 U. S.
C. 720 to submit a written statement of actions taken on our
recommendations to the Senate Committee on Governmental Affairs
and the House Committee on Government Reform not later than 60
days after the date of this report. A written statement also must
be submitted to the Senate and House

Committees on Appropriations with the agency's first request for
appropriations made more than 60 days after the date of the
report. We are sending copies of this report to appropriate
congressional committees; Lieutenant General Lester L. Lyles,
Director, BMDO; the Honorable Louis Caldera, Secretary of the
Army; the Honorable Richard Danzig, Secretary of the Navy; and the
Honorable F. Whitten Peters, Acting Secretary of the Air Force. We
will also make copies available to others on

request. If you or your staff have any questions concerning this
report, please contact me on (202) 512- 4841. Major contributors
to this report were Lee Edwards, David Hand, and Judy Lasley.

Sincerely yours, Allen Li Associate Director Defense Acquisitions
Issues

Page 14 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality

Appendix I Comments From the Department of Defense Appendi x I

Let t er

Now on p. 5.

Appendix I Comments From the Department of Defense

Page 15 GAO/NSIAD-99-101 Ballistic Missile Defense Program
Commonality (707368) Let t er

Now on p. 11.

Ordering Information The first copy of each GAO report and
testimony is free. Additional copies are $2 each. Orders should be
sent to the following address, accompanied by a check or money
order made out to the Superintendent of Documents, when necessary,
VISA and

MasterCard credit cards are accepted, also. Orders for 100 or more
copies to be mailed to a single address are discounted 25 percent.

Orders by mail: U. S. General Accounting Office P. O. Box 37050
Washington, DC 20013

or visit: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW)
U. S. General Accounting Office Washington, DC

Orders may also be placed by calling (202) 512- 6000 or by using
fax number (202) 512- 6061, or TDD (202) 512- 2537.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512- 6000 using a
touchtone phone. A recorded menu will provide information on how
to obtain these lists.

For information on how to access GAO reports on the INTERNET, send
an e- mail message with info in the body to:

info@ www. gao. gov or visit GAO's World Wide Web Home Page at:
http:// www. gao. gov

United States General Accounting Office Washington, D. C. 20548-
0001

Official Business Penalty for Private Use $300

Address Correction Requested Bulk Rate

Postage & Fees Paid GAO Permit No. GI00

*** End of document. ***