Army Missile Program Dependent on Flawed Contractor Plan Requirements Shortfalls Could Result in Weapon "Of Little Value"

For several years, the Army ceded its oversight to a contractor resulting in a situation where the Army lacked any means of ensuring that taxpayer money is well-spent and that weapons met requirements. By relying on the contractor's plan instead of developing its own, the Army lacked ways to gauge the performance of the Raytheon Company which led to a missile program that is not cost-effective, according to a recent Department of Defense Inspector General (DoD IG) December 2007 "For Official Use Only" audit obtained by POGO through the Freedom of Information Act.

The Army's $623 million Surface-Launched Advanced Medium Range Air-to-Air Missile (SLAMRAAM) is a weapons system meant to protect U.S. ground forces from attacks from the air from unmanned aerial vehicles, cruise missiles, helicopters and planes.

The DoD IG found that the Army needs to "rebaseline"—in other words, change the goals—of the contract due to "contractor technical difficulties" and "increased contract costs," stemming in large part from the Army's mismanagement of the program and its dependence on the contractor's inadequate plan.

Raytheon's systems engineering management plan lacked criteria for the Army to review and manage progress on technical, cost and schedule goals, making it difficult to define success in meeting program requirements—a violation of DoD policy dated February 2004. In July 2007, the Army presented its own new draft plan in response the DoD IG's probe. However, that draft also contains many of the same deficiencies as Raytheon's, according to the audit.

The Army defended its delayed action since a key acquisition decision on SLAMRAAM preceded the February 2004 DoD policy by several months. The DoD IG held that the DoD policy "clearly explained the benefits" of developing an adequate plan early on which would have helped the Army "more effectively manage the systems engineering process."

The audit also states that even if "SLAMRAAM could fully meet all key performance parameters" that are currently spelled out, it could "still be of little value, if it cannot meet system effectiveness requirements." Further details of the point were redacted.

Furthermore, an additional DoD oversight agency, the Defense Contract Management Agency, failed to hew to its own instructions and guidelines.

"As is often the case, the problem is not with the rules, but that so few people follow them. The all-too-predictable result is contractor failure," said Nick Schwellenbach, national security investigator at the Project On Government Oversight.

For example, Boeing-Huntsville's subcontractor work on the SLAMRAAM control system increased by 67% from an original $18.9 million estimate to $31.5 million. Formal reporting from the DCMA office with oversight over Boeing-Huntsville to the DCMA office with responsibility for SLAMRAAM was non-existent and the informal reporting was missing critical information—such as cost and schedule analysis. The DoD IG suggested that this had a role in the cost increase of Boeing's work, stating that it believes that "formalized reporting…would have given the project manager more meaningful information on the subcontractors' progress towards satisfying SLAMRAAM cost, schedule, and performance requirements."

The final problem with the SLAMRAAM detailed by the DoD IG was inadequate guidance for assuring the security of information technology systems. Numerous problems "places the information contained in the SLAMRAAM system at greater risk of loss, misuse, or unauthorized access to or modification of the information contained in the system," the audit states.