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The Defense Department spends billions of dollars a year to acquire space-based systems, including communications, surveillance and navigation satellites, but development and acquisition during the past several decades have relied on a flawed process, a Government Accountability Office official told lawmakers on Thursday. This has pushed up costs up by hundreds of millions to billions of dollars, and some promised systems have not been delivered after decades of development, said Cristina Chaplain, GAO's director of acquisition and sourcing management at a Senate Armed Services Strategic Forces Subcommittee hearing.

Defense starts more programs than it can afford, she said, creating competition for funding that encourages low-cost estimates, optimistic schedules, unrealistic promises, suppression of bad news and missed opportunities to assess potentially better alternatives.

As a result, Chaplain testified, Defense has saddled itself with excessive budget overruns and delays. One example is the Space Based Infrared System (SBIRS), a missile warning system designed to replace the Defense Support Program satellites that first launched in 1970. Lockheed Martin and Northrop Grumman are key SBIRS contractors.

Chaplain said software problems have delayed the launch of the first SBIRS satellite by about a year, pushing the overall program behind by seven years and requiring hardware and software fixes that could cost up to $1 billion. This amount would add to an existing $6 billion overrun.

The National Polar-Orbiting Operational Environmental Satellite System, being developed by Defense and the National Oceanic and Atmospheric Administration for weather observation, just went through a program restructuring that will boost costs by 49 percent, or $4.9 billion, and produce fewer satellites with fewer sensors. In January, NOAA Administrator Conrad Lautenbache slammed NPOESS contractors Northrop Grumman and Raytheon for delays in fixing problems with a key weather sensor.

Development and technical challenges with Boeing's next-generation Global Positioning System IIF program have caused the original launch date to slip by more than two years, from December 2006 to February 2009, Chaplain said. The Air Force requested more than $100 million for the next two fiscal years to cover cost overruns for the first three satellites, she said.

These delays have a real impact on warfighters who rely on satellite systems, Chaplain said. Delays in development and deployment of Defense's $16 billion Transformational Satellite Communications (TSAT) could have a "dramatic effect" on programs such as the Army's Future Combat System, she said. FCS needs the broadband capability TSAT is designed to deliver to network platforms and sensor systems on the battlefield.

Defense had planned to select a TSAT contractor in December 2007, but has pushed back procurement to develop a more affordable approach, according to Chaplain. In January, the Air Force Space and Missile Systems Center awarded Boeing and Lockheed Martin each a $75 million extension on TSAT risk reduction contracts while senior Defense officials fine-tune their acquisition strategy.

At the Air Force, which manages Defense's space programs, officials have adopted a back-to-basics acquisition strategy, said Gary Payton, Air Force undersecretary for space programs at the hearing. The evolutionary approach gradually will add capabilities to space-based systems to reduce production risk and deliver them faster to warfighters, he said.

Payton told the committee that "well-defined increments help reduce many of the potential instabilities in requirements, budget and workforce."

Chaplain singled out the Mobile User Objective System, designed to support compact tactical satellite terminals and shipboard installations, as one satellite program that has met cost and schedule goals. The Navy, which manages MUOS, has "tended to follow good acquisition practices for its space programs, especially in keeping technology risks out of its programs," he said.

MUOS will replace military-owned or leased narrowband satellites operating in the ultra-high frequency spectrum bands, which are reaching the end of their lifespan. The Navy leased capacity from Intelsat, an international satellite carrier, to plug the gap between the time those satellites go dark and when the Navy can put eight MUOS satellites in orbit, Rear Adm. Kenneth Deutsch, director of warfare integration in the Navy communications networks office told the committee.

The Navy faces another challenge with putting MUOS into operation, Deutsch said, making sure MUOS terminals meet standards of the long-delayed Joint Tactical Radio System Program. If JTRS terminals are not available, he said, the only way users will be able to tap into MUOS will be through software upgrades to existing terminals.