December 4, 2021

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Missile Defense: Recent Acquisition Policy Changes Balance Risk and Flexibility, but Actions Needed to Refine Requirements Process

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<div>What GAO Found In 2002, the Department of Defense (DOD) provided the Missile Defense Agency (MDA) with flexibilities to diverge from traditional requirements-setting and acquisition processes and instead implement a unique approach to managing its acquisitions. After completing studies in 2019, DOD revised those flexibilities in 2020 by making significant changes to MDA's requirements-setting and acquisition processes (see figure). Most notably, the Under Secretary of Defense for Acquisition and Sustainment, rather than the MDA Director, now determines whether major MDA programs may progress through the development phases. 2020 Department of Defense Changes to Missile Defense Acquisition Process Most of the changes are consistent with GAO's identified acquisition best practices and align with changes GAO previously recommended. For example, MDA must now obtain independent cost estimates and Under Secretary of Defense approval of its acquisition strategies. The warfighter (military planners and weapon system operators) also now has greater requirements-setting responsibility. GAO previously recommended these actions to improve the likelihood of MDA delivering effective capabilities to the warfighter as promised. However, DOD did not establish processes and products that would fully align missile defense capabilities in early development with operational-level warfighter requirements. Instead, DOD continues to rely on MDA to identify its own operational-level requirements, which could result in MDA later having to make costly, time-consuming design changes to meet warfighter needs. GAO also found that DOD generally met the statutory requirements Congress established for changing missile defense non-standard acquisition processes and responsibilities by: (a) consulting with required DOD officials; (b) certifying this consultation occurred; (c) reporting the changes to Congress; and (d) generally waiting the required 120 days before implementing the changes. U.S. Strategic Command determined that it did not need to take these same actions on changes it made to requirements-setting processes. GAO also found that DOD generally met a statutory requirement to obtain an independent study on MDA's acquisition process and organizational placement within DOD. As required, DOD updated congressional defense committees on the scope of the study report and provided the report to congressional committees. However, DOD exceeded the statutorily mandated reporting deadline by 13 days. Why GAO Did This Study Since MDA was established in 2002, DOD has invested over $174 billion developing and fielding missile defense capabilities. MDA has used its acquisition flexibilities to quickly develop and field capabilities, but has also had setbacks. In 2020, DOD determined that modifications to MDA's acquisition flexibilities were needed to better balance risk. Congress recently prohibited DOD from changing certain missile defense acquisition processes and responsibilities unless certain requirements were met. Congress also required DOD to enter into a contract for an independent study of MDA's acquisition process and organizational placement within DOD. The National Defense Authorization Act for Fiscal Year 2021 included a provision for GAO to assess whether DOD complied with these requirements. This report assesses the effects of recent changes DOD made to missile defense non-standard acquisition processes and responsibilities and whether, in doing so, it met the statutory requirements. GAO reviewed DOD documents and policies issued in 2020 and interviewed DOD officials.</div>

What GAO Found

In 2002, the Department of Defense (DOD) provided the Missile Defense Agency (MDA) with flexibilities to diverge from traditional requirements-setting and acquisition processes and instead implement a unique approach to managing its acquisitions. After completing studies in 2019, DOD revised those flexibilities in 2020 by making significant changes to MDA’s requirements-setting and acquisition processes (see figure). Most notably, the Under Secretary of Defense for Acquisition and Sustainment, rather than the MDA Director, now determines whether major MDA programs may progress through the development phases.

2020 Department of Defense Changes to Missile Defense Acquisition Process

Most of the changes are consistent with GAO’s identified acquisition best practices and align with changes GAO previously recommended. For example, MDA must now obtain independent cost estimates and Under Secretary of Defense approval of its acquisition strategies. The warfighter (military planners and weapon system operators) also now has greater requirements-setting responsibility. GAO previously recommended these actions to improve the likelihood of MDA delivering effective capabilities to the warfighter as promised.

However, DOD did not establish processes and products that would fully align missile defense capabilities in early development with operational-level warfighter requirements. Instead, DOD continues to rely on MDA to identify its own operational-level requirements, which could result in MDA later having to make costly, time-consuming design changes to meet warfighter needs.

GAO also found that DOD generally met the statutory requirements Congress established for changing missile defense non-standard acquisition processes and responsibilities by: (a) consulting with required DOD officials; (b) certifying this consultation occurred; (c) reporting the changes to Congress; and (d) generally waiting the required 120 days before implementing the changes. U.S. Strategic Command determined that it did not need to take these same actions on changes it made to requirements-setting processes. GAO also found that DOD generally met a statutory requirement to obtain an independent study on MDA’s acquisition process and organizational placement within DOD. As required, DOD updated congressional defense committees on the scope of the study report and provided the report to congressional committees. However, DOD exceeded the statutorily mandated reporting deadline by 13 days.

Why GAO Did This Study

Since MDA was established in 2002, DOD has invested over $174 billion developing and fielding missile defense capabilities. MDA has used its acquisition flexibilities to quickly develop and field capabilities, but has also had setbacks. In 2020, DOD determined that modifications to MDA’s acquisition flexibilities were needed to better balance risk.

Congress recently prohibited DOD from changing certain missile defense acquisition processes and responsibilities unless certain requirements were met. Congress also required DOD to enter into a contract for an independent study of MDA’s acquisition process and organizational placement within DOD. The National Defense Authorization Act for Fiscal Year 2021 included a provision for GAO to assess whether DOD complied with these requirements. This report assesses the effects of recent changes DOD made to missile defense non-standard acquisition processes and responsibilities and whether, in doing so, it met the statutory requirements.

GAO reviewed DOD documents and policies issued in 2020 and interviewed DOD officials.

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