Raytheon Ground System for Satellites Skewered by Research Firm

(Bloomberg) -- The Pentagon and Congress can have little confidence in any estimate Raytheon Co. or the Air Force may offer on the cost and timeline for a troubled ground control system to operate new Global Positioning System satellites, according to a report from a nonprofit research firm.

“The program office and the prime contractor demonstrated an inability to accurately project cost and schedule,” MITRE Corp. said in the report to the Defense Department obtained by Bloomberg News.

The report, labeled “For Official Use Only,” bolstered the judgment expressed two years ago by the Air Force’s head of space systems acquisition who called Raytheon’s “Operational Control Network,” or OCX, the Pentagon’s “No. 1 troubled program.”

MITRE pointedly raised the possibility of scrapping the entire Raytheon project: It said “there are no show-stoppers in continuing to modernize” Lockheed Martin Corp.’s existing ground network instead.

The ground system, which was supposed to be in operation by October 2016 under Raytheon’s contract, now isn’t projected to be ready until at least April 2022, the Air Force said in July. Its projected cost has increased from $866 million in the initial contract in 2010 to $3.4 billion in November 2012 and $6.1 billion in May, according to MITRE’s report.

Raytheon’s Response

Raytheon’s network of 20 ground stations and antennas worldwide is intended to take full advantage of new GPS III satellites being built by Lockheed that promise greater worldwide coverage, accuracy and cybersecurity. The Global Positioning System is widely used for everything from helping the military to pinpoint airstrikes against Islamic State to allowing civilians to map street-by-street driving directions on their smartphones. The new satellites are also years behind schedule.

Raytheon didn’t pull punches in responding to the criticism from MITRE, which runs federally funded research and development centers.

The report “contains multiple factual errors, and because of this, the MITRE team reached inaccurate conclusions regarding the program’s current progress, future schedule, and cost,” Raytheon said in a statement attributed to David Wajsgras, president of its Intelligence, Information and Services business. “We have communicated our concerns regarding these inaccuracies to both the Air Force and MITRE, and we confidently stand by our ability to deliver the full GPS OCX system within the current budget and by the June 2021 contractual deadline."

Asked about Raytheon’s criticism, MITRE spokesman Jeremy Singer said in an email that “we stand by our methodology, findings, and independent cost estimate for the OCX report.”

The Pentagon leadership has directed a 90-day review of the findings and recommendations in the MITRE report, which was submitted in December, according to Major William Russell, an Air Force spokesman. The outside review of OCX was ordered by Congress in the fiscal 2016 defense authorization bill.

‘Candid Discussions’

Russell said the Air Force “agrees to disagree with MITRE on some data and analysis points.” The Air Force assesses that Raytheon has made progress, including by bringing in additional outside resources to stay on the current schedule, he said. Pentagon and Air Force officials hold regular meetings that enable “candid discussions on expectations” and program performance, he said.

The MITRE review team “found little credible basis for confidence in the OCX program’s cost and schedule estimates” as “there are fundamental challenges with Raytheon’s software engineering” and “significant software challenges lie ahead, including full-scale integration and testing.” It said the system “will not deliver” any capabilities “into an operational environment for at least five years.”

The MITRE assessment “reinforces our findings, concluding that the program’s cost and schedule estimates are questionable and there are still fundamental challenges in software engineering,” Cristina Chaplain, director of space program review for the U.S. Government Accountability Office, said in an email. “Perhaps most troubling here is the repeated inability of the government and the program office to establish an executable program, even after” it breached formal cost goals in 2015, she said.

“A better understanding of options to the troubled OCX program,” as suggested by MITRE, “merits serious consideration,” she said.

©2018 Bloomberg L.P.