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GAO-04-379R 1 (2004-01-29)

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,Accountability * Integrity* Reliability
United States General Accounting Office
Washington, DC 20548







         January 29, 2004


         The Honorable Wayne Allard
         Chairman
         The Honorable Bill Nelson
         Ranking Minority Member
         Subcommittee on Strategic Forces
         Committee on Armed Services
         United States Senate

         Subject: Defense Acquisitions: Risks Posed by DOD's New Space Systems
         Acquisition Policy

         On November 18, 2003, we testified before the Subcommittee on the Department of
         Defense's (DOD) new acquisition policy for space systems. The new acquisition
         policy, issued in October 2003, sets the stage for decision making for DOD's
         investment in space systems, which currently stands at more than $18 billion annually
         and is expected to grow considerably over the next decade. You requested that we
         provide additional comments on several issues relating to the new policy and other
         space acquisition issues. Your specific questions and our answers are discussed
         below.

         1. The Air Force maintains that its Defense Space Acquisition Board (DSAB) process
             allows earlier identification of problems and senior level attention, which will
             improve management and lower risk. Does GAO have any concerns with the DSAB
             process?

         Our concern is not with earlier identification of problems or the added senior level
         attention the new process calls for, but with earlier investment decisions, which are
         also called for. Under the new process, the DSAB may approve product development
         to begin before DOD knows whether technologies can work as intended. As a result,
         it will make major investment commitments without really knowing what resources
         will be required to deliver promised capability. Moreover, the policy encourages
         development of leading-edge technology within product development, that is, at the
         same time the program manager is designing the system and undertaking other
         product development activities. DOD believes this approach will allow space
         systems to better incorporate leading-edge technologies. But as our work has


GAO-04-379R DOD Space Acquisition Policy

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