GAO: Future Combat System remains a risk

Key Decisions to Be Made on Future Combat System [.pdf]

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The Government Accountability Office has studied the Army’s Future Combat System (FCS) program, and reports numerous areas that continue to make FCS a high-risk acquisition.

In a report released today, GAO stated, “Tangible progress has been made during the year in several areas, including requirements and technology. Such progress warrants recognition, but confidence that the program can deliver as promised depends on high levels of demonstrated knowledge, which are yet to come.”

GAO officials have been critical of the Army’s approach to FCS ever since the multibillion-dollar contract was awarded to Boeing.

“All key technologies should have been mature in 2003 when the program began. FCS software has doubled in size compared to original estimates and faces significant risks,” the report states. To address the challenge, “the Army is attempting a disciplined approach to managing software development.”

Even if technology issues can be resolved to make the program a success, GAO cautioned that projected costs continue to rise. When the contract was awarded in 2003, the cost was estimated at $91.4 billion, the GAO noted. However, the Army’s program office now estimates a cost of $163.7 billion in current dollars, and an outside estimate is higher, GAO said.:

“Recent independent estimates from the Office of the Secretary of Defense’s Cost Analysis Improvement Group indicate that FCS acquisition costs could range from $203 billion to $234 billion in inflated dollars. The independent estimate reflected several additional years and additional staffing beyond the Army’s estimate to achieve initial operational capability," the report said.

"The difference in estimates is also attributable to the Cost Analysis Improvement Group’s assessment that FCS software development would require more time and effort to complete than the Army had estimated. The independent estimate also provided for additional risks regarding the availability of key systems to support the FCS network,” GAO states.

The Army and the Defense Acquisition Board do not agree with the higher estimate, GAO noted.

Preliminary design review is scheduled for 2009, but FCS will already be “halfway through” system development and demonstration — a step that should follow the review, the GAO report said.

That means “it is incumbent upon DOD, then, to identify alternative courses of action to equip future Army forces by the time the go/no-go decision is made on FCS. Otherwise, approval to ‘go’ may have to be given not because FCS is sufficiently developed, but because there is no other viable course of action," GAO reported.

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