New GPS 3 ground system is the Pentagon’s “most troubled” program

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WASHINGTON – Pentagon leaders say a new ground system for the next-generation of GPS satellites, one that has stymied Air Force officials and led to expensive cost overruns, is the Defense Department’s most troubled acquisition program.

Lt. Gen. Samuel Greaves, commander of the Air Force’s Space and Missile Systems Center, said during a Feb. 19 breakfast here that the Pentagon continues to keep its options open for completing the Operational Control Segment, or OCX, program. That system is expected to be operational no earlier than 2021.

“The GPS OCX system is the No. 1 troubled program within the Department of Defense,” Greaves said. “I’ve heard that from my boss and my boss’s boss and it’s a very, very, very important program to the future.”

Raytheon Intelligence, Information and Services of Dulles, Virginia is the prime contractor for the OCX program. While Air Force leaders acknowledge the system will have unprecedented information assurance protection, the program has struggled with continuing technical difficulties. In December, the Air Force said OCX needs at least two additional years of work.

The delay has been a sore point for service leaders, who say that because of the lag they will be unable to immediately leverage the full capabilities of the GPS 3 satellites, which include better accuracy and higher-power signals and could launch as early as next year.

Faced with this uncertainty, the Defense Department has maintained it is leaving its options open for how to proceed on OCX.

Earlier this month, the Air Force awarded Lockheed Martin a $96 million contract modification to adapt its existing ground system to serve as a stop-gap measure until the Raytheon system is ready. Greaves described that step as “an insurance policy” but noted that the Lockheed Martin system would not offer the same kind of information assurance OCX is expected to provide.

Further contract awards or competitions also remain a possibility.

On Dec. 2, Frank Kendall, the Pentagon’s acquisition czar, said holding a new competition for all or part of the program was a possibility.

Greaves echoed that sentiment.

“We are very serious about working with Raytheon to ensure we can deliver OCX as advertised,” he said. But the Air Force is considering several other options, the service calls “off-ramps,” he said.

“It ranges all the way from staying the course, accepting the schedule delays while they show progress, to cutting the cord,” he said.

Michelle Lammers, a Raytheon spokeswoman, said in a Feb. 19 email that the company “is fully committed to delivering without comprise the modernized GPS OCX capability and meet[ing] all program requirements as specified by the Air Force. We are squarely focused on solid execution of this critical development program.”

Raytheon has struggled with the OCX program since winning the prime contract in 2010. Air Force and Defense Department leaders have pointed, in part, to changing requirements as one source of the problem.

The Air Force restructured the program in 2014, nearly doubling the contract value, to around $1.6 billion, and delaying key milestones. More recently, the Air Force’s budget request for fiscal year 2017 asks for about $1 billion over the next five years to develop the system, which is about $400 million more than the service predicted to spend a year ago.

An April report from the U.S. Government Accountability Office said the OCX program’s cost ultimately would exceed $2 billion. The Air Force is currently calculating a new cost estimate. Frank Kendall, the Pentagon’s acquisition czar, is expected to meet with Raytheon officials in the coming weeks to discuss the estimate.