As costs rise, Future Combat System deal in question

The Government Accountability Office (GAO) has weighed in on the Army's Future Combat System (FCS) program, and finds plenty of areas that continue to make this a high-risk acquisition.

In "Defense Acquisitions: Key Decisions to be Made on Future Combat System," a report released March 16, the government watchdog agency reports that, "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 cautions that projected costs continue to rise. When the contract was awarded in 2003, the price tag was estimated at $91.4 billion, the agency points out; the Army's program office now estimates a cost of $163.7 billion in current dollars, while an outside estimate is even higher:

"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 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.

Neither the Army nor the Defense Acquisition Board agree with the higher estimate, GAO notes, because they consider it "too conservative," too negative about program risks.

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 notes ? which means that "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."

Patience Wait is a staff writer for Government Computer News, an 1105 Government Information Group publication.