Rethinking the push for program transfer

When the U.S. Missile Defense Agency was created in 2002, the expectation was that it would initially develop missile defense systems but then transfer responsibility for their procurement to the military services that would operate them. The process has not worked out quite as expected.

Missile defense capabilities have matured and several programs have been operationally fielded, but effecting transfer has proven to be complex. MDA has adapted by assuming new roles and missions, not only procuring systems but in some cases funding their operations and sustainment.

In an apparent effort to implement that original intent and improve MDA’s focus on research and development to outpace evolving threats, Congress has attempted to hasten the transfer process, but numerous factors continue to impede that effort. The time seems ripe to re-evaluate the underlying considerations that have slowed transfer, re-evaluate the particular costs and benefits of transfer, and consider some alternative courses of action. Taking an enterprisewide perspective is also necessary to first ascertain what problems, exactly, need to be fixed, and then avoid doing harm in fixing them.

The program elements particularly under consideration for transfer include the Terminal High Altitude Area Defense, or THAAD, system and the TPY-2 radar to the U.S. Army; and Standard Missile-3, or SM-3, interceptor procurement to the U.S. Navy.

Although operated by the Army and Navy, much of the equipment is bought through MDA. Other elements have been developed and procured by MDA as a material provider, with the services then assuming the operations and sustainment cost, as has been the case with Aegis Ashore and the Upgraded Early Warning Radars.

By contrast, Patriot was transferred to the Army when MDA was created, but its subsequent modernization has been uneven. No real effort exists to transfer procurement of the homeland defense system, Ground-based Midcourse Defense.

The Army and the Navy have, however, already assumed significant operational responsibility for THAAD, TPY-2 and SM-3, including all aspects of doctrine, organization, training, material, leadership, personnel and facilities — the entire DOTMLPF process, except the “M.” The question of transfer is about whether the significant materiel budget should also go to the services, or instead remain with a centralized missile defense entity.

All things being equal, procurement costs for radars and interceptors are about the same regardless of whether the funds are located in one place or dispersed among several, but could increase with additional service requirements.

On one hand, transfer holds out the prospect of making the acquisition process a bit more uniform with other things purchased by the services, and would give more configuration control to service-specific stovepipes. Transfer also carries considerable risks, including the likelihood that the procurement and modernization of THAAD, SM-3 and TPY-2 could suffer relative to if they remained in a missile defense-centric organization. Integration with other elements of the Ballistic Missile Defense System, or BMDS, could also suffer, as service programs would remain subject to the parochialism that has inhibited broader integration of the joint force.

Congress has attempted to protect these unique national assets by classifying missile defense as a Unified Major Force Program, but these budgetary reporting requirements carry little teeth if the services choose to make missile defense assets a bill payer for other short-term priorities.

Make no mistake: The first time someone isn’t looking, Army budgeteers will probably try to use the additional funding to buy trucks rather than THAADs, and Navy budgeteers will try to buy hulls and Tomahawks rather than SM-3s.

Instead of pushing transfer to services that may not want it, it may be better to stop, reassess and organize the whole missile defense enterprise in a comprehensive and sustainable way. The standard against which any such revision should be judged is not the original intent of 2002 when missile defense was still in its infancy, but rather what is best suited to the long-term development, deployment, procurement, operations, modernization and integration of missile defense elements.

Four recent trends should serve to reinvigorate discussion about the institutions of missile defense acquisition. These include the further emergence of more advanced ballistic and non-ballistic air and missile threats; the division of the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, or AT&L; the apparent competition between procurement and research and development budgets within MDA; and recent congressional interest in transferring missile defense procurement to the services.

Several principles should guide decisions about how to adapt to these trends. First, any reorganization should attempt to “do no harm” relative to current programs. Next, policy must drive the organizational structure, not the other way around. Given the extent of high technologies, it will also be important for any new acquisition processes to avoid excessive aversion to risk. Finally, any system should work to avoid bureaucratic impediments that can result in program breakage, including service deprioritization, configuration disconnects and risk aversion.

Such revisions will require updates to MDA’s charter, last modified in 2009. Among other things, it will probably be necessary to update the MDA mission to extend beyond merely ballistic missiles, and to better support its new (albeit largely unfunded) role as technical authority for integrated air and missile defense. The combination of MDA procurement and sustainment roles will also need to be adapted to the division of AT&L into the offices of Research and Engineering, or R&E, and Acquisition and Sustainment, perhaps with two undersecretaries jointly chairing the Missile Defense Executive Board that oversees MDA.

MDA must also retain the robust acquisition authorities given to its director. Similar authorities might even be replicated in other parallel development organizations that might be created under the undersecretary for R&E to address new challenges, such as directed energy, integrated air and missile defense, and hypersonics. Compromising these authorities merely in the interest of uniformity would invite delays and risk aversion found in too many Department of Defense programs, without meaningful gains in cost performance or oversight.

Make no mistake: The first time someone isn’t looking, Army budgeteers will probably try to use the additional funding to buy trucks rather than THAADs, and Navy budgeteers will try to buy hulls and Tomahawks rather than SM-3s.

In terms of organization, two alternative paths worth consideration include the expansion and bifurcation of MDA with a second deputy director focused on procurement and operations, or the creation of an alternative entity responsible for procurement.

One approach would address the contention that MDA is somehow too busy or requires more “focus” on developmental problems. An expanded MDA structure might be enabled with a second deputy director, who would be responsible for procurement and operations, with the first deputy director focused on the research and development side of the house.

A second option might be to transfer procurement authority out of MDA, not to the services but to some other new entity, which might notionally be termed a “Missile Defense Procurement and Support Office.” Such an office might be closely aligned with a much-needed reinvigoration of the Joint Integrated Air and Missile Defense Organization, whose critical joint perspective (and budget) has unfortunately been allowed to deteriorate in recent years.

Both approaches would adapt current organizations to how the enterprise has evolved, drawing on recent experience rather than fighting it. Either arrangement could be made to map onto the Pentagon’s new acquisition offices while still preserving the integrity of the BMDS development process. And both paths would permit the continued transfer to the services of operations and sustainment responsibility once missile defense elements are fielded, such as with the Upgraded Early Warning Radars and Aegis Ashore.

The specter of program transfer has bedeviled the missile defense community, maybe for too long. Instead of continuing to push for transfer, it may be better to leave well enough alone. Doing so comes with one psychological hurdle, however, namely to have budgeteers and congressional appropriators alike recognize that as missile threats have grown more complex, MDA and related entities may need to grow well beyond the historical budget range of $8 billion to $10 billion per year.

As the demand for missile defense capabilities continues to grow, the question of transfer should be decided in light of the roles and missions of the entire enterprise. Missile defense has come a long way in recent years, but there are many new challenges for integrated air and missile defense in a world of great power competition. The solutions to these challenges may not fit the institutional division of labor envisioned at the turn of the century.

Thomas Karako is a senior fellow and director of the Missile Defense Project at the Center for Strategic and International Studies. Wes Rumbaugh is a research assistant at the Center for Strategic and International Studies.