Defense Acquisitions: Missile Defense Program Instability Affects Reliability of Earned Value Management Data

By law, GAO is directed to assess the annual progress the Missile Defense Agency (MDA) made in developing and fielding the Ballistic Missile Defense System (BMDS). GAO issued its latest assessment of MDA's progress covering fiscal year 2009 in February 2010. This report supplements that assessment to provide further insight into MDA's prime contractor performance for fiscal year 2009. The report provides an in-depth analysis of MDA's prime contractor fiscal year 2009 earned value management (EVM) cost and schedule progress. Prime contractors track EVM by making comparisons that inform the program as to whether the contractor is completing work at the cost budgeted and whether the work scheduled is being completed on time. Our analysis of contractor EVM data included examining contract performance reports for 14 BMDS contracts, reviewing the latest integrated baseline reviews, performing extensive analysis of data anomalies, and conducting interviews with Defense Contract Management Agency (DCMA) officials -- the independent reviewers of MDA contractor EVM systems. We examined contract performance reports for 14 BMDS contracts that were managed by 8 BMDS program elements. However, we were only able to report our analysis of EVM data for 12 of these 14 contracts in appendix II due to concerns with data reliability. The data for the Ground-based Midcourse Defense and the Targets and Countermeasures contracts were not sufficiently reliable for inclusion in our analysis. GAO recommends that MDA resolve prime contractor EVM data reliability issues by the beginning of fiscal year 2011. If, by this time, MDA has not resolved these issues, the Secretary of Defense should provide a report to Congress on the steps MDA is taking to resolve them. DoD concurred with our recommendation. Report to Congressional Committees.