Space Acquisitions: DOD Needs to Take More Action to Address Unrealistic Initial Cost Estimates of Space Systems

Abstract : Estimated costs for the Department of Defense's (DoD) major space acquisition programs have increased by about $12.2 billion from initial estimates for fiscal years 2006 through 2011. Cost growth for ongoing Air Force programs above initial estimates accounts for a substantial portion of this 44 percent increase. In light of the role that optimistic estimating is believed to have played in exacerbating space acquisition cost growth, the Congress requested that GAO examine the following: (1) in what areas space system acquisition cost estimates have been unrealistic, and (2) what incentives and pressures have contributed to the quality and usefulness of cost estimates for space system acquisitions. GAO recommends that DoD take a number of actions to increase the likelihood that independent, more realistic cost estimates will be developed and utilized. DoD concurred with the overall findings of this report, and it provided information on the specific actions it was already taking to improve the Air Force's cost-estimating capability.