WASHINGTON — The Defense Department has decided to stick with Raytheon's GPS control station despite major cost overruns, officials announced Friday.

The Pentagon declared a Nunn-McCurdy breach for the Operational Control System (OCX) program this June after costs increased by more than 25 percent over projections. After a three-month review period that included consultation with the director of Cost Assessment and Program Evaluation (CAPE), Pentagon acquisition chief Frank Kendall certified on Oct. 12 his decision to continue development.

"Under Secretary Kendall determined 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," said a Defense Department statement.  

The quarterly reviews of the program, led by Kendall and Air Force Secretary Deborah Lee James, also influenced Kendall’s decision to continue OCX, the Pentagon stated. James and Kendall have met with Raytheon three times since March to discuss the progress of OCX Block 0 and Block 1, most recently on Sept. 28.

According to the Pentagon statement, Kendall believes the company is making "sufficient progress" on checking off the key milestones set in a March 8 review. Since that date, the company has completed two milestones for Block 0, an early version that runs the system’s launch and checkout system, and one for the fully-capable OCX Block 1.

"Additionally, the program office and Raytheon have agreed to a plan to prioritize implementing automation and a new software development approach to improve execution," it said.

Kendall’s decision was met with applause by Raytheon.

"Going forward, Raytheon is committed to delivering solid execution on OCX, meeting schedule requirements and controlling costs," Dave Wajsgras, Raytheon Intelligence, Information and Services president, said in a statement.

As early as July, Kendall argued that killing the OCX program could derail the planned modernization of the GPS system. Although he said then he wanted to see Raytheon make greater improvement, cancelling the program and starting over was not desirable.

"It’s a critical system. It would be very disruptive to stop where we are and start over," he said during a briefing ahead of Farnborough International Airshow. "That’s not a preferred alternative. But on the other hand I need to see adequate progress or we’ll have to consider that sort of alternative."

Meanwhile, Raytheon said it was making headway with recent milestones, with its program manager Bill Sullivan in August summarizing the company’s approach as "stay on budget by staying on schedule."

When complete, OCX will increase the accuracy of GPS, allow for greater automation and improve the cybersecurity of the system. Although meeting cybersecurity requirements had been a challenge for Raytheon throughout development, those problems were largely in the past, Sullivan told reporters in August. About 77 percent of all cyber requirements have already been implemented in Block 0, which is set to be delivered in the second quarter of 2017.

Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.

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