Air Force declares Nunn-McCurdy breach on GPS ground system
WASHINGTON — The U.S. Air Force said June 30 it would notify Congress that a next-generation ground system to control GPS satellites would exceed baseline cost estimates by at least 25 percent, triggering a series of regimented cost control measures and raising more questions about the future of the program.
The mandatory notification, part of what is known as a Nunn-McCurdy breach, sets the stage for the cancellation of the Air Force’s Operational Control Segment, or OCX, program unless the Secretary of Defense determines the program is vital to national security, no reasonable alternatives exist, and that the Air Force has a solid plan to put the project back on track.
OCX was expected to offer improved information assurance and unprecedented cyberprotection while automating various GPS 3 satellite operating functions.
But the program has faced continuing technical difficulties and the delays have been a sore point for Air Force 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. The delay has also frustrated lawmakers, chiefly Sen. John McCain (R-Ariz.), the chairman of the Senate Armed Services Committee.
At the same time, the program has been described by Air Force leaders as the most troubled development effort in the Defense Department.
Raytheon, the program’s prime contractor, referred questions to the Air Force.
According to an acquisition report released by the Defense Department in March, OCX’s program costs have increased about 22 percent from about $3.4 billion in 2012 to at least $4.2 billion this year. But those numbers were expected to rise even more and were widely thought to be out of date on the day they were released.
After a March 8 meeting between Raytheon officials and senior Defense Department leaders, the Air Force said it believed it had “sufficient” data that the OCX program would grow past the 25 percent threshold necessary for a critical Nunn-McCurdy breach, according to a June 30 press release.
Nunn-McCurdy certification is a cost-control measure triggered by overruns. A “critical” breach occurs when the per-unit cost increases 25 percent or more over the current baseline or 50 percent over the original baseline. Under critical breaches, a program is presumed to be cancelled unless the Secretary of Defense certifies the program.
Such reviews also can lead to restructuring of the development program and require new approvals before moving forward.
In addition, they require the Defense Department to prove that a struggling program is vital to national security and that no other more affordable alternatives exist; that cost estimates are reasonable and that efforts have been made to control costs.
The Air Force said Frank Kendall, the Pentagon’s acquisition chief, will lead a review of OCX as a result of the breach. Kendall’s report is expected in October.
Top Pentagon officials, including Kendall, and senior Raytheon executives have been holding quarterly meetings to discuss the OCX program. The next meeting is planned for July 7. Leading up to the event, Raytheon has trickled out a series of milestones and test results that show progress on a troubled ground control system.
The full OCX program, which encompassed three blocks, and includes further modernization, is not expected to be completed sooner than 2021. Block 0 includes launch and on-oribt check out capabilities. Block 1 provides command and control of the GPS 3 and earlier generation satellites and Block 2 provide operational control of the new international civil signal aboard the GPS 3 satellites.
“Factors that led to the critical Nunn-McCurdy breach include inadequate systems engineering at program inception, Block 0 software with high defect rates and Block 1 designs requiring significant rework. Additionally, the complexity of cybersecurity requirements on OCX and impact of those requirements on the development caused multiple delays,” the Air Force said in a June 30 release. “The corrective actions to resolve these problems took much longer than anticipated to implement.”
As a result of the problems, the Air Force said in a June 30 press release that Raytheon has received none of the potential $43.9 million incentive fee payments. Remaining incentives fees are being restructures, the service said.
For months, Air Force leaders have stressed they are preparing contingency plans.
In February, the Air Force awarded Lockheed Martin a $96 million contract modification to adapt the existing ground system to serve as a stopgap measure if necessary. The first GPS 3 satellite is expected to launch as early as next year.
In May, the Air Force posted a request for information to the Federal Business Opportunities web site looking for prime contractors who could handle another capability: the tasking and monitoring of the GPS satellites’ M-code, a military GPS signal that is more powerful and harder to jam.
The Air Force said June 30 is it preparing “additional mitigation options.”