GAO OK's DOD's WSARA Waiver for EPS/CAPS, But Identifies Analysis Gaps

The Government Accountability Office (GAO) issued a report today essentially agreeing with the Department of Defense’s (DOD’s) decision to waive an acquisition requirement for a polar-orbiting satellite system, but faulted DOD’s cost-benefit analysis.

Under the 2009 Weapons Systems Acquisition Reform Act (WSARA), DOD is required to provide for competitive prototyping for major defense acquisition programs before entering into system development.  DOD can waive the requirement under certain circumstances, however, and did so for the first time for the Control and Planning Segment (CPS) of its Enhanced Polar System (EPS).  EPS will replace the Air Force’s current Interim Polar System and serve as the polar adjunct to the Advanced Extremely High Frequency (AEHF) satellite system.   It will use two EHF payloads hosted on satellites operating in highly elliptical orbits.

The GAO letter report agreed that DOD’s rationale for the waiver met the WSARA requirements, but criticized DOD for not providing a better cost-benefit analysis.   GAO said that DOD accepted the Air Force’s assessment that it would cost $49 million to do the competitive prototyping while expected life-cycle savings would be “negligible.”  GAO’s complaint is that the EPS program office did not conduct a more thorough analysis of the potential benefits that would result in a specific dollar value or range of values.  In addition, GAO said, the Air Force accepted the program office’s estimate of the $49 million cost without an independent review. 

GAO also questioned DOD’s decision to use a cost-reimbursement contract for CAPS considering it is a low risk development activity and was skeptical of DOD’s assertion that competitive prototyping would delay the EPS program with negative national security consequences.

In a written response published as an appendix to the report, Gil Klinger, Deputy Assistant Secretary of Defense for Space and Intelligence, thanked GAO for agreeing that the waiver meets statutory requirements and is “rational.”   He added his appreciation to GAO for clarifying what analysis would be helpful in future waivers.  However, he also chastised GAO for commenting on the aspect of the waiver relating to national security.   WSARA calls for GAO reviews of waivers based on cost, but not on national security objectives, and hence its comments were “outside the scope” of the law, Klinger wrote.