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Audit of the Army Integrated Air and Missile Defense Program DODIG-2019-114

Audit

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Publicly released: August 21, 2019

Objective

We determined whether the Army is developing an affordable Integrated Air and Missile Defense (IAMD) program that can meet all capability requirements and whether these requirements remain valid and meet current and future warfighter needs. A capability requirement is a capability that an organization needs to fulfill its roles, functions, and missions in current or future operations.

Background

The Army IAMD program is a major defense acquisition program with an estimated $3.2 billion in research, development, test, and evaluation costs and $4.5 billion in procurement costs. The Army IAMD system includes a common mission command center, integrated fire control network, and common interface kits that connect Army air and missile defense sensors and weapons. The IAMD system combines data from sensors and weapons using common software that creates a single, integrated display of air and missile threats within a particular airspace. The warfighter can then determine the most appropriate weapon to defeat air and missile threats, including ballistic missiles, cruise missiles, manned aircraft, unmanned aerial systems, and air-to-surface missiles.

In December 2009, the IAMD program milestone decision authority, the final decision maker for program reviews, approved the program to enter the engineering and manufacturing development phase to develop, build, and test IAMD systems to verify that it meets all operational requirements.

In May 2016, the Army completed a limited user test to assess whether the IAMD met operational requirements and to support a planned August 2017 Milestone C decision to begin production. A limited user test is an operational test during which warfighters operate IAMD systems in a realistic operational environment. The limited user test showed that the IAMD system software was not fully developed and functioning as intended. For example, the IAMD system could not correctly identify air and missile threats. In April 2017, the IAMD project manager notified the milestone decision authority that the August 2017 Milestone C date could not be met because the results of the limited user test showed that the system was not operationally effective, suitable, or survivable for current and future operations.

In December 2017, the milestone decision authority approved the IAMD project office’s plan to delay the Milestone C review until September 2020 because the system did not pass the 2016 limited user test. The purpose of the Milestone C review is to carefully assess a program’s readiness and to make a sound investment decision before committing DoD financial resources to begin production.

Finding

We determined that the Army IAMD capability requirements, developed to address current and future warfighter needs, remained valid. However, IAMD project officials will not have a full analysis of the next limited user test data until after the Milestone C review, scheduled for September 2020. To meet the scheduled Milestone C review, IAMD project officials plan to rely on a quick look of IAMD system performance that includes developmental tests and the limited user test. A quick look is a limited review and will not fully measure all IAMD capability requirements or fully evaluate system effectiveness, suitability, and survivability. IAMD project officials’ plan to rely on a quick look to support the Milestone C decision does not meet the requirements of DoD Instruction 5000.02, which requires project officials to verify all operational requirements have been met (through testing) before a Milestone C review.

IAMD project officials will not have a full analysis of the limited user test because officials delayed the completion of the limited user test event due to the late delivery of IAMD hardware components. However, IAMD project officials have not adjusted the Milestone C review to account for the delay so that the test schedule would continue to be event-driven, as required by DoD Instruction 5000.02.

Furthermore, the Army may not be able to afford production and sustainment of the IAMD program through 2049 as planned because Army G-8 officials have not established total life-cycle affordability constraints through an affordability analysis for unit production and sustainment costs of the IAMD system. The purpose of a total life-cycle affordability analysis is to set realistic program baselines to control life-cycle costs and help instill more cost-conscious management in the development of the IAMD program.

As a result, the milestone decision authority may approve procurement of six initial IAMD systems, at a total cost of about $29.6 million, based on an incomplete analysis of the limited user test. With an incomplete analysis of the limited user test, IAMD project officials may discover system deficiencies after the Milestone C decision that require additional time and funds to correct. The time needed to correct system deficiencies may delay the fielding of the IAMD system. Furthermore, without the total life-cycle affordability analysis and affordability constraints, Army G-8 officials have limited assurance that the IAMD program is affordable within the air and missile defense portfolio, the project manager cannot ensure program costs are within affordability constraints, and the milestone decision authority cannot enforce affordability constraints throughout the program life cycle. Assessing life-cycle affordability of systems with affordability constraints is essential for establishing the financial achievability of the program and setting realistic program baselines to control life-cycle costs and help instill more cost-conscious management in the development of the IAMD program.

Recommendations

We recommend that the IAMD project manager modify the Milestone C review date to allow sufficient time to fully analyze and report on the limited user test data.

We recommend that the Deputy Chief of Staff of the Army, G-8, immediately conduct an affordability analysis to establish total life-cycle affordability constraints and determine whether the Army can afford the IAMD program through 2049, in accordance with DoD Instruction 5000.02.

Management Comments and Our Response

The IAMD project manager agreed with the recommendation. However, the project manager stated that a decision to delay the Milestone C review date is premature because the milestone decision authority has stated that the Milestone C decision will not occur until enough relevant information is presented to properly inform the decision. Although the project manager agreed with the recommendation, his comments were not responsive to the intent of the recommendation; therefore, the recommendation is unresolved. The quick look will not provide the milestone decision authority with complete information to verify the IAMD system meets all operational requirements at the Milestone C review. We request that the IAMD project manager describe the specific actions that would ensure the milestone decision authority will have complete information on the IAMD system performance at the Milestone C review so that the milestone decision authority can verify whether all IAMD operational requirements have been met through testing as required by DoD Instruction 5000.02.

The Fire Division Chief, responding for the Deputy Chief of Staff of the Army, G-8, neither agreed nor disagreed with the recommendation, but he stated that Army G-8 officials would conduct an affordability analysis, as part of providing an updated cost estimate, planned to begin in the first quarter of FY 2020, before the Milestone C decision. Comments from the Fire Division Chief did not address the specifics of the recommendation; therefore, the recommendation is unresolved. Although the Fire Division Chief acknowledged the recommendation, Army G-8 officials will not immediately conduct an affordability analysis to establish affordability constraints. The IAMD program entered the engineering and manufacturing development phase almost 10 years ago and still has no required affordability constraints established through an affordability analysis. Affordability constraints are fixed cost requirements, equivalent to capability requirements, to be managed by the IAMD project manager. Without affordability constraints, the Army cannot prioritize IAMD capability requirements and cost tradeoffs within the Army air and missile defense portfolio, and the IAMD project manager cannot effectively manage the program. We request that the Deputy Chief of Staff of the Army, G-8, reconsider his position and immediately conduct an affordability analysis to establish affordability constraints for the IAMD program in accordance with DoD Instruction 5000.02.

This report is a result of Project No. D2018‐D000AU‐0197.000.