White House Budget Office Raises Concerns Over Bush Missile Defense Plan

By David Ruppe
Global Security Newswire

WASHINGTON — The White House budget raised concerns last month that President George W. Bush’s national missile defense plan might fail to meet its near- and long-term development and deployment objectives.

The Office of Management and Budget, in a February report available on its Web site, said there is a high risk that cost increases for major systems and schedule delays could prevent the Defense Department’s Missile Defense Agency from meeting its fiscal 2004 and 2005 technology development goals, as the agency plans to field its first missile interceptors this year.

That conclusion appears to generally affirm previous independent criticisms, including recent reports by Congress’s General Accounting Office (see GSN, Sept. 24, 2003) and the Pentagon’s top testing official (see GSN, March 12).

The budget office analysis also raises a fresh criticism, repeatedly warning that an unusual Missile Defense Agency budgeting approach — of avoiding cost projections for buying and operating systems — could undermine the success of the program and possibly harm future funding for missile defense or other defense programs. The approach is categorized as a “major flaw” that could limit the effectiveness or efficiency of the program.

In addition, the report says there is “friction” within the Pentagon over persuading the armed services to fund the program’s procurement and support costs, which it says raises questions about the services’ commitments to the current goals.

The report, released with the administration’s other fiscal 2005 budget materials, is an analytical budget management tool intended to help the government assess the fiscal and management health of programs to inform budgeting decisions.

Citing a preference for “program flexibility,” the Missile Defense Agency has refused to project out over the standard six years the costs of procuring and operating the system, according to the analysis, as is done with other major military systems in development. 

Such projections are intended to help the government avoid surprises by anticipating the total cost of a particular system. The process allows agencies to make sometimes tough decisions about supporting programs in a competitive funding environment.

The budget office assessment says the Missile Defense Agency’s practice might jeopardize future funding of missile defense procurement and operations, or of other military programs.

“Given that block deployments can require multiple billions of dollars, failing to program these funds in advance will result in major budget turbulence following a block deployment decision — turbulence that will result in cutbacks or terminations of other DOD activities, potentially including missile defense itself,” it says.

Congress and the administration have faced such turmoil this year, as the administration’s fiscal 2005 missile defense budget for the first time disclosed plans and costs for fielding additional systems in 2006 and 2007. The announcement added $4.7 billion to the program through 2007, helping increase the annual Missile Defense Agency budget by about $1.5 billion to $9.2 billion in fiscal 2005 (see GSN, Feb. 26).

Furthermore, the budget office analysis said the Missile Defense Agency has not budgeted for operations and support costs beyond fiscal 2005, nor for additional equipment and operations beyond fiscal 2007, suggesting additional costs increases would need to be announced in the future.

That could affect operation of the fielded U.S. system as soon as October 2005, the beginning of fiscal 2006, said Philip Coyle, the Pentagon’s former top testing official.

“Almost as soon as the president declares success, he’ll have to declare failure, because money isn’t budgeted beyond 2005 to operate the system he is trying to deploy. To be operational, the system won’t have the basic elements in 2004 or 2005, and there’s no money for deployment and operations after 2005,” he said.

The Missile Defense Agency did not respond to requests for comment.

Usually for the Pentagon, operations and support costs are not funded by research and development agencies such as the Missile Defense Agency — they are paid by the armed service that operates a system. The Army would mainly handle the ground-based systems, while the Navy would fund sea-based systems.

However, the budget office’s analysis says the Pentagon is having trouble persuading the services to take budgetary ownership of the operations and support costs of the missile system.

“DOD has not adequately refined the MDA-to-service transfer of missile defense programs. There continues to be friction in the implementation of this process,” it says.

The lack of a resolution, the report says, also raises uncertainty about meeting current missile defense objectives.

“Without hard choices on funding it is not clear how committed the services are to long-range missile defense goals,” it said.

The budget office report also says the Missile Defense Agency is challenged in meeting its fiscal 2004 and 2005 (called Block 2004) technology development goals.

“Development of Block ’04 remains challenging. Cost increases in” airborne laser, and ground- and sea-based defense programs “are a concern, as are schedule delays,” it says.

Noting the president’s plans for fielding initial missile systems later this year, the office called cost, schedule and performance goals for fiscal 2004 and 2005 “very ambitious” and said they “potentially carry a high degree of development risk.”

That conclusion follows recent indications that the administration might not fully achieve its deployment goals. In December 2002, Bush ordered the agency to deploy an initial capability by the end of 2004 and the Pentagon declared a goal of fielding 10 interceptor missiles in Alaska and California by Sept. 30.

However, the Missile Defense Agency disclosed last month that it might have on alert only a few of those missiles by the fall and will potentially have ready only half of the 20 sea-based interceptors that were scheduled to be deployed by the end of fiscal 2005. The agency said, though, it planned to put a small number of the ground-based interceptors on alert before the fall (see GSN, Feb. 3).

Missile Defense Agency Director Lt. Gen. Ronald Kadish said also in testimony last week that “we may not have as much equipment available as we thought on a specific date, but by-and-large most everything is going to be in place.” 

The agency also has acknowledged that key elements of the system, including a new radar and space sensors, would not be sufficiently developed and fielded for some time after the September goal. The absence of such systems, Kadish acknowledged last week, has forced the agency so far to put navigational transmitters on targets to track them during its intercept tests.

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