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THAAD Program - Demonstration / Validation

In 1990, BMDO initiated the THAAD system requirement as a hit-to-kill technology demonstration program. In September 1992, a 48 month demonstration/validation contract was awarded to Lockheed. As of January 1994 The estimated cost for the THAAD system, including radars, was $14.5 billion. At that time the Department of Defense planned to buy 1,422 THAAD missiles, 99 launchers, and 18 radars.

The THAAD program entered the Program Definition and Risk Reduction phase of acquisition in 1992 but was plagued by missed intercepts in its first six attempts. The Army had planned to develop and field an initial version of the THAAD system in just under 5 years at a cost of $2.5 billion. This initial version was to provide the Army an interim capability to intercept enemy missiles, which was to be followed by an engineering and manufacturing development phase to field a more capable system in greater numbers. As a result of problems discovered in flight testing, however, the initial version took over 8 years to develop at a cost of $4.2 billion. THAAD's failures were caused by a combination of a compressed test schedule and quality control problems.

The program's compressed flight-test schedule did not allow for adequate ground testing, and as a result officials could not detect problems prior to flight tests. In September 1994, an independent contractor reported that the program's initial schedule - which allowed only 30 days between each of the last seven flight tests - did not permit adequate time for failure analysis, corrective actions, and retest. The schedule also left insufficient time for preflight testing, postflight analysis, and corrective actions.

While the contractor spent millions of dollars to develop an early, robust modeling and simulation tool, competing pressures to field an operational system delayed the tool, reducing its ability to help validate the integration of components and subsystems before flight testing. To stay on schedule, designers minimized the amount of test instrumentation used on the missile. Even the initial test plans did not allow sufficient time for discovery and problem resolution.

Because the seeker developer was not allocated funding to conduct hardware-in-the-loop testing on the subsystem, the designers scavenged piece parts from around the factory to construct a test article. As a result, they did some limited subsystem testing before they shipped the seeker to the prime contractor.

The President's Budget 1997 schedule for this program had LRIP beginning in fiscal year 2003, with a FUE in fiscal year 2006. However, DOD subsequently added $690 million to this program over the FY 1998 FYDP, which moves the FUE to late fiscal year 2004. This additional funding also: (1) completes the funding for the second Engineering and Manufacturing Development (EMD) radar, (2) decreases schedule and technical risks during EMD, and (3) decreases the total acquisition cost by $457 million.

Testing difficulties led to the slip of this capability from the fourth quarter of FY 1998 to the second quarter of FY 1999. THAAD faced significant system engineering challenge. The fact that recent THAAD flights have not met all their objectives, stretching out testing and delaying the start of EMD by over fifteen months, illustrates the difficulty of this task. Since the seventh THAAD test was not successful, it was necessary to reevaluate the program's schedule and content.

Studies done by the military and independent sources cited the following problems in the Theater High Altitude Area Defense (THAAD) Program: First, the program's compressed flight-test schedule did not allow for adequate ground testing, and officials could not spot problems before flight tests. The schedule also left too little time for preflight testing, postflight analysis, and corrective measures. Second, the requirement that an early prototype system be deployed quickly has diverted attention from the normal interceptor development process and resulted in interceptors that were not equipped with sufficient instruments to provide optimum test data. Third, quality assurance received too little emphasis and resources during component production, resulting in unreliable components. Fourth, the contract to develop the interceptor was a cost-plus-fixed-fee contract, which placed all of the financial risk on the government and did not hold the contractor accountable for less than optimum performance.

The 1996 restructure program addressed each of these four underlying problems. However, the reliability of current flight-test interceptors remains a concern because most components were produced when the contractor's quality assurance system was inadequate. Test failures caused primarily by manufacturing defects rather than advanced technology problems have prevented the Army from demonstrating that THAAD can reliably intercept targets in all required regions.

The restructuring of the THAAD program raised the issue of what the purpose of the User Operational Evaluation System battalion at Fort Bliss should be. Whether all or only part of the battalion would warrant deployment for contingency operations would depend on the capabilities it could provide to warfighters and the priority of the need for one or more of those capabilities. However, there would be little basis for making a deployment determination because the Defense Department does not plan to conduct an operational assessment of the User Operational Evaluation System.

In 1999 DOD proposed that THAAD and the Navy's Theater Wide system compete for funding beginning in fiscal year 2002. The Ballistic Missile Defense Organization planned to review the two programs in December 2000 in terms of cost, schedule, performance, and risk. It then plans to select one of the systems for enhanced funding in order to field that system by fiscal year 2007. The other program would continue in development, but at a slower pace. The Senate's version of the fiscal year 2000 Defense Authorization Act (Senate bill 1059, section 221) effectively barred this planned competition by requiring that the Secretary of Defense establish an acquisition strategy that bases funding and schedule decisions on the performance of each system independent of the other system.

The Director, Operational Test and Evaluation (DOT&E), reported in his Fiscal Year 1999 Annual Report to the Congress that the sense of urgency to deploy a prototype system resulted in an overly optimistic development schedule.




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