Research Report Extreme Cost Growth Themes from Six U.S. Air Force Major Defense Acquisition Programs Mark A. Lorell, Robert S. Leonard, Abby Doll C O R P O R A T I O N For more information on this publication, visit www.rand.org/t/RR630 Library of Congress Cataloging-in-Publication Data is available for this publication. ISBN: 978-0-8330-8855-0 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2015 RAND Corporation R® is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions.html. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface This report identifies and characterizes conditions present in six U.S. Air Force Major Defense Acquisition Programs (MDAPs) experiencing extreme cost growth, using case study analysis. This analysis draws on the findings of a companion document by Robert S. Leonard and Akilah Wallace, Air Force Major Defense Acquisition Program Cost Growth Is Driven by Three Space Programs and the F-35A: Fiscal Year 2013 President’s Budget Selected Acquisition Reports (RAND Corporation, RR-477-AF, 2014), which provides detailed quantitative analysis of recent cost growth on Air Force MDAPs, including most of the six examined here. The case study analysis provided in this document is based on government program documentation and publically available open source materials, as well as interviews with program officials and subject matter experts. The purpose of this work is to characterize some of the key common attributes among the six programs with extreme cost growth. The end goal is to provide analysis that ultimately can be used to assist the Department of Defense and the Air Force in developing broad measures to improve cost and schedule outcomes for Air Force MDAPs. The research reported here was commissioned by the Deputy Assistant Secretary for Acquisition Integration (SAF/AQX), Office of the Assistant Secretary of the Air Force for Acquisition, and conducted within the Resource Management Program of RAND Project AIR FORCE. The project monitor was the Technical Director of the Air Force Cost Analysis Agency. RAND Project AIR FORCE RAND Project AIR FORCE (PAF), a division of the RAND Corporation, is the U.S. Air Force’s federally funded research and development center for studies and analyses. PAF provides the Air Force with independent analyses of policy alternatives affecting the development, employment, combat readiness, and support of current and future air, space, and cyber forces. Research is conducted in four programs: Force Modernization and Employment; Manpower, Personnel, and Training; Resource Management; and Strategy and Doctrine. The research reported here was prepared under contract FA7014-06-C-0001. Additional information about PAF is available on our website: http://www.rand.org/paf/ This report documents work originally shared with the U.S. Air Force on September 20, 2012. The draft report, issued on February 18, 2014, was scrutinized by formal peer reviewers and U.S. Air Force subject-matter experts. iii iv Contents Preface ............................................................................................................................................ iii Figures........................................................................................................................................... vii Tables ............................................................................................................................................. ix Summary ........................................................................................................................................ xi Acknowledgments ....................................................................................................................... xvii Abbreviations ............................................................................................................................... xix 1. Introduction ................................................................................................................................. 1 Overview and Research Objectives ....................................................................................................... 1 Approach and Methodology .................................................................................................................. 3 2. Case Studies ................................................................................................................................ 9 Advanced Extremely High Frequency Satellite System ....................................................................... 9 Summary Overview of AEHF ......................................................................................................... 9 AEHF Case History ....................................................................................................................... 10 AEHF Summary Findings of Key Program Characteristics .......................................................... 13 C-130 Avionics Modernization Program (AMP) ................................................................................ 13 Summary Overview of C-130 AMP .............................................................................................. 13 C-130 AMP Case History .............................................................................................................. 15 C-130 AMP Summary Findings on Key Program Characteristics ................................................ 16 Evolved Expendable Launch Vehicle ................................................................................................. 17 Summary Overview of EELV ........................................................................................................ 17 EELV Case History ........................................................................................................................ 18 EELV Summary Findings on Key Program Characteristics .......................................................... 21 Global Hawk ....................................................................................................................................... 22 Summary Overview of Global Hawk ............................................................................................ 22 Global Hawk Case History ............................................................................................................ 23 Global Hawk Summary of Key Program Characteristics .............................................................. 26 National Polar-Orbiting Operational Environmental Satellite System (NPOESS) ............................. 27 Summary Overview of NPOESS ................................................................................................... 27 NPOESS Case History ................................................................................................................... 29 NPOESS Summary of Key Program Characteristics ..................................................................... 31 Space-Based Infrared Systems High ................................................................................................... 31 Summary Overview of SBIRS High .............................................................................................. 31 SBIRS High Case History .............................................................................................................. 32 SBIRS Summary of Key Program Characteristics ........................................................................ 36 3. Summary Findings and Observations ....................................................................................... 37 Summary Overview of the Six Programs ............................................................................................ 37 v Key Lessons Learned and Their Relevance to Today ......................................................................... 39 Recommendation #1: Ensure That Programs Have Realistic Cost Estimates at MS B ................. 41 Recommendation #2: Embrace Evolutionary Strategies with Comprehensive and Proven Implementation Strategies ....................................................................................................... 42 References ..................................................................................................................................... 45 vi Figures Figure 2.1. Advanced Extremely High Frequency Satellite ........................................................... 9 Figure 2.2. C-130 AMP Cockpit Simulator/Trainer