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OCX Passes Deep Dive Review; GAO Says Program Risk Remains High

April 27, 2017
Inside GNSS, May/June 2017

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The new GPS ground system has passed its most recent in-depth review and completed a schedule and budget re-baselining though a new government watchdog report says the program remains at "high risk of cost overruns, schedule delays and performance shortfalls."

The U.S. Air Force undertook the re-baselining, that is an overall budget and schedule adjustment, after a critical Nunn-McCurdy breach was declared for the program on June 30, 2016. Completion of the re-baselining of the Next Generation Operational Control System or OCX program was expected this summer, the Government Accountability Office (GAO) wrote in a recent report, but it was actually finished in late March, according to Raytheon, the OCX prime contractor.

Raytheon Vice President Bill Sullivan, the OCX program manager, said earlier this month that the U.S. Air Force had approved the new schedule — which includes delivery of Block 0 in late September 2017 and Block 1 and 2 capability in December 2020. GAO noted in its report Defense Acquisitions: Assessments of Selected Weapon Programs that Block 2 had been "rephased to deliver concurrently with Block 1, so there is no longer a separate Block 2 delivery for OCX."

The results of the budget re-baselining, however, remained unclear as of press time. GAO wrote in its March 30 report that the anticipated cost for OCX had jumped from $3.6 billion in November 2012 to $5.5 billion in September 2016 — a 53.2 percent increase in fiscal year 2017 dollars.

Estimates a year ago put the cost at $5.3 billion though it is not clear how that compares with the new estimate in fiscal year 2017 dollars. The OCX contract was originally valued at slightly more than $1.5 billion with options, when it was awarded to Raytheon in 2010.

GAO, which expressed concern with the OCX timeline noting that the "revised schedule optimistically assumes higher levels of software coding productivity than the contractor has previously accomplished, and reductions in defect rates using an entirely new software development methodology."
Raytheon has implemented a new software development approach called DevOps (for development operations) whose aim, explained a spokesman, is early error detection.

“It’s a commercial best practice that is assisted by the Air Force," Sullivan told reporters in April, that helps the company determine how fast it can do software testing and get results. “It took two weeks to build a unit of software and get it out. [With Dev Ops] we have shortened that cycle to three hours as all software developers can get access to the data at the same time.”

Getting those developers fully into the workflow, however, may be a challenge. GAO said Raytheon was having difficulty training the staff it had added to the software development side of the program, noting that the firm had "nearly doubled the software engineers working on OCX."

Given these problems, the program "remains at high-risk of cost growth, schedule delays, and performance shortfalls to the deliveries of Block 0 and Block 1," GAO said.

GAO also noted that the September Block 0 delivery would necessitate replanning in the Contingency Operations (COps) program. Under COps, Lockheed Martin is to modify the current GPS ground system to be able to operate the new GPS III technology as a hedge against further OCX delays. Replanning will be necessary to prevent disruption of testing planned for common test equipment.

Despite the problems the Pentagon has made clear it believes OCX is critical to national defense and worth pursuing.

Then-Under Secretary of Defense for Acquisition, Technology and Logistics (AT&L) Frank Kendall certified to Congress in October "that the program capabilities provided by the OCX program are essential to national security, that no alternatives exist which would provide acceptable capability to meet requirements at less cost, that remaining costs for the restructured OCX program are reasonable and higher priority than programs whose funding must be reduced to accommodate the growth, and that the management structure for the program is adequate," the Pentagon said in a statement at the time.

The certification, made on behalf of Secretary of Defense Ashton Carter, was required after the Nunn-McCurdy breach to prevent program cancellation.

"While the program is troubled," Gen. John Hyten, then-commander of Air Force Space Command, told the House Subcommittee on Strategic Forces on March 15, 2016 "the capability that OCX delivers is absolutely critical to the war fighter. We've got to improve our resiliency both in space and in ground — and that was one of the significant goals that OCX had. Whatever we do for that program specifically, we have to deliver that capability for the war fighter."

Sullivan said the company achieved every milestone for correcting program deficiencies last year. “That means, based on the established plan, those corrective actions put in place are working. Block O is an example,” he said.

OCX also passed its most recent Deep Dive review, the fifth in a series of do-or-die progress assessments directed by Kendall in December 2015 when he agreed to a 2-year extension. Kendall made it clear at that time that program cancellation was on the table if Raytheon failed to meet its new milestones.

Raytheon met April 18 in Aurora, Colorado with AT&L personnel including James MacStravic, who is performing the duties of USD (AT&L), and Air Force Acting Service Acquisition Executive Darlene Costello, said Patrick Evans, a spokesman for the Office of the Secretary of Defense. The review focused on Raytheon's progress against the plan presented during the September 2016 review, including the program's readiness to support GPS III launch operations in 2018.

"The Department of Defense team concluded Raytheon continues to make progress implementing these critical changes," Evans said in a statement.

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