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In 1996, the Air Force launched an acquisition program to develop and produce a revolutionary laser weapon system, the Airborne Laser (ABL), capable of defeating an enemy ballistic missile during the boost phase of its flight. Over the last 8 years, the program's efforts to develop this technology have resulted in significant cost growth and schedule delays. These events led Senate Members to request that we answer the following questions: (1) how much and why has the ABL's cost increased since the program's inception; (2) what is the expected military utility of the initial ABL aircraft; (3) what support systems will be required when the ABL is fielded and what is the likely cost of those systems; and (4) have recent program changes resulted in a more cost effective strategy for developing the weapon?

The prime contractor's costs for developing ABL have nearly doubled from the Air Force's original estimate and additional cost growth is occurring. The cost growth occurred primarily because the program did not adequately plan for and could not fully anticipate the complexities involved in developing the system. MDA continues to face significant challenges in developing the ABL's revolutionary technologies and in achieving cost and schedule stability. From 1996 through 2003, the value of the prime contract, which accounts for the bulk of the program's cost, increased from about $1 billion to $2 billion. According to our analysis, costs could increase between $431 million to $943 million more through first full demonstration of the ABL system. Cost growth has been spurred by rework that was necessary because rapid prototyping forced the program to integrate components before all subcomponents were fully tested. In addition, fabricating ABL's unique components and developing its complex software proved more costly and time-consuming than anticipated. Although ABL's prime contractor has added additional personnel to the contract, the program is faced with a bow wave of uncompleted work from prior years. Recognizing that the technology development activities directed by the contract could not be completed within the contract's cost ceiling, the ABL program office began development of a new cost estimate for completing these activities. Predictions of the military utility of the initial ABL aircraft are still highly uncertain because these forecasts are not based on any demonstrated capability of the system, but rather on modeling, simulations, and analysis. These assessment tools predict that the initial Airborne Laser will be militarily useful against most theater and intercontinental ballistic missiles; but flight-test data are not yet available to anchor these tools. According to test officials, the models and simulations are adequate for establishing system parameters, but may not be sufficient for estimating the effectiveness of a fielded system. Additionally, other factors will influence ABL's military utility, including the availability of support infrastructure and the number of aircraft available. When it is fielded, ABL is expected to require unique support for its laser and beam control and fire control components in addition to the support burdens attached to all high-value air assets. ABL will also require unique maintenance, such as re-calibration and re-coating of beam control and fire control subcomponents. In addition, it will require the typical support systems needed by other high-value air assets, such as escort aircraft for protection. MDA has not yet determined the cost of ABL's unique support systems, but operating costs for other high-value air assets range from about $24,000 per hour to $92,000 per hour. MDA refocused the ABL program in February 2004 to pursue a more cost-effective development strategy. The program now plans to follow a knowledge-based rather than a schedule-driven approach to the element's development. In addition, the program has delayed indefinitely the purchase of a second aircraft and a test facility.

Status Legend:

Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

• In Process
• Open
• Closed - implemented
• Closed - not implemented

Recommendation for Executive Action

Recommendation: To provide a better framework for making investment decisions during the program's research and development phase, the Secretary of Defense should direct the Director, MDA, to complete an uncertainty analysis on the contractor's new cost estimate that quantifies the confidence that may be placed in the estimate.

Agency Affected: Department of Defense

Status: Closed - Implemented

Comments: The ABL Program Office completed an uncertainty analysis in August 2004, and used the analysis to establish budget plans for future years.