GAO Lambasts Air Force, Chides DOD, Over GPS OCX Ground Segment Acquisition

The Government Accountability Office (GAO) lambasted the Air Force today for poor acquisition decisions on the Global Positioning System’s (GPS’s) future Operational Control System (OCX).  The Air Force has “consistently overstated progress” on OCX and “needs $1.1 billion and four years more than planned.”  GAO recommended that DOD take four OCX-related actions centered on an independent review and chided DOD for brushing them off, warning that without “swift and thoughtful action,” the OCX problems will continue.

The Air Force operates the GPS system, which was designed, built and paid for by DOD, but is used ubiquitously around the globe by military and civilian users for positioning, navigation and timing (PNT) purposes.   GPS consists of the space segment (a constellation of 24 operational satellites, plus spares), the ground segment (a ground-based Operational Control System — OCS — at Schriever Air Force Base, CO, with a backup at Vandenberg AFB, CA) and the user equipment segment (military and civilian receivers).

The Air Force is modernizing all three segments.  GAO has reported previously on the latest series of satellites, GPS III.   Today’s report is about the ground segment as well as the military GPS user equipment (MGUE) portion of the user segment.

The Air Force began work on a modernized ground control system, OCX, to replace the current OCS, in 2007.  OCX is needed to obtain the full functionality of GPS III.  Raytheon was awarded an $886 million development contract for OCX blocks 1 and 2 in 2010, with an option for blocks 3 and 4 in the future.  Total OCX operations costs including the Raytheon contract, prior technology development and other annual costs were estimated at $3.5 billion.  Blocks 1 and 2 were to be delivered in August 2015 and March 2016 respectively.

The $886 million estimate and the program’s schedule have “more than doubled” since 2010, GAO reported. The cost increased “by approximately $1.1 billion to $1.98 billion” because the Air Force “did not follow key acquisition practices.”  For example, it did not conduct a Milestone B review before awarding the development contract to ensure resources and requirements were matched, and did not complete a preliminary design review before beginning development to confirm the preliminary design was ready to “proceed into detailed design with acceptable risk.”  Furthermore, “key requirements, especially for cybersecurity, were not well understood by the Air Force and contractor” when the contract was awarded. 

GAO found that Raytheon experienced “significant software challenges” from the beginning, but the Air Force “consistently presented optimistic assessments” to those overseeing the acquisition process.  As development problems continued, Air Force progress reports “continued to be overly optimistic” even as development was “paused” to fix “root causes.”   GAO’s assessment is that “OCX issues appear to be persistent and systemic, raising doubts whether all root causes have been adequately identified, let alone addressed, and whether realistic cost and schedule estimates have been developed.”

Independent reviews by the Office of the Secretary of Defense (OSD) and audits by the Defense Contract Management Agency (DCMA) found ongoing problems and “undisciplined processes” such as with peer review at Raytheon.  Despite efforts by the Under Secretary of Defense for Acquisition, Technology and Logistics (USD AT&L) to gain better insight in recent years, GAO concluded that “there is little reason to believe that OCX systemic problems have been adequately addressed.”  The DCMA forecast in June 2015 that the OCX cost would increase to $2.15 billion, and the Air Force’s current schedule estimate that Block 1 will be delivered in July 2019 is “still optimistic by at least a year” compared to an independent review conducted in October 2014.

The story on the military user equipment, MGUE, is much the same.  It is “unlikely” that “sufficient knowledge about MGUE design and performance” will be ready in time to make “informed procurement decisions” beginning in FY2018, the report said.

The good news, though, is that the current GPS satellites are lasting much longer than expected.  The current GPS constellation consists mostly of GPS IIR and IIR-M satellites that are lasting as long as 20 years, GAO said, and even newer GPS IIF satellites are now being launched.   Development of the newest GPS III version encountered its own problems.  The expected launch of the first GPS III has slipped from 2014 to 2017.  In 2010, GAO warned that delays in launching GPS III satellites could result in the on-orbit constellation dropping below the 24 satellite threshold needed for a fully operational system.  The extended lifetimes of the GPS IIR and IIR-M satellites mitigate the impact of delays in GPS III and OCX for now at least.  GAO warns, however, that further delays in OCX could reinstate that concern.  As for the M-code for MGUE, GAO estimates that its full deployment “is more than a decade away.”

GAO considers OCX to be the pacing item for GPS modernization.  Its recommendation in this report is for the Secretary of Defense to take five actions, four related to OCX and one for MGUE, as follows:

• convene an independent task force to conduct a thorough review of OCX;
• develop high confidence OCX cost and schedule estimates;
• direct the Air Force to retain experts from the independent task force as a management advisory team;
• establish a mechanism for ensuring knowledge gained from the OCX assessment is used to determine whether further programmatic changes are needed to strengthen oversight; and
• incorporate a Critical Design Review (CDR) in the MGUE development effort to allow the military services to fully assess the maturity of the MGUE design before committing test and procurement resources.

GAO provides draft copies of its reports to whatever agency is being reviewed, which then has an opportunity to respond. GAO publishes the response as part of the report.  In this case, DOD concurred with the four OCX-related actions by saying the independent reviews it already conducted fulfilled that intent. GAO pushed back on that, saying those comments “provide little confidence” that the problems will be fixed since the earlier reviews were “non-binding and advisory in nature.”

“If business continues as usual without swift and thoughtful action, OCX will likely continue on its path of demonstrating poor cost and schedule outcomes,” GAO warned.  “We continue to stand by our recommendations calling for a fresh review — this time an in-depth and comprehensive critical review of the program — to identify the true root causes of OCX development difficulties and to ensure the Air Force implements the corrective actions.”

As for the MGUE action, DOD partially concurred, agreeing a CDR is desirable, but noting the potential impact on schedule.  GAO stressed, however, that skipping “best practice” steps like that “generally results in an inability to deliver promised cost and schedule outcomes.”