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D l engyel

  1. 1. Draft - January 23 2012Program Cancellation FailureModes & Lessons Learned J. Steven Newman D.Sc. NASA Human Exploration & Operations Risk & Knowledge Management Support Team ARES Corporation David Lengyel Manager – NASA Human Exploration & Operations Risk & Knowledge Management PM Challenge 2012 – Orlando Fl. – February 22-23, 2012 1
  2. 2. Outline• Part I: Introduction – The Need for Program Cancellation Reviews (PCRs)• Part II: Program Cancellation Overview• Part III: Program Cancellation Factors/Model• Part IV: Program Cancellation Scenarios & Examples• Part V: Proposed PCR Process 2
  3. 3. Part I – Background / Call for Action• Catastrophic operational failures are documented and analyzed in-detail identifying their proximate and contributing or underlying causes • $2 Million trigger for Class A mishap formal reviews • Formal mishap review boards established in accordance with NASA Procedural Requirements document NPR 8621, Mishap and Close Call Reporting, Investigating, and Recordkeeping• No comparable process for program cancellation • Program termination announcements invariably cite cost overruns and schedule slippage as causal factors with little investigation / documentation of root causes • No formal process parallel to NPR 8621 to address program/project cancellations. Note: the term “program” is used throughout this presentation to discuss any cancelled activity – program, project, technology demonstrator • Program cancellations far exceed a mere $2 million “trigger value” by one ($20 million), two ($200 million), or even three ($2 billion) orders of magnitude• Action: Establish a formal Program Cancellation Review (PCR) process 3
  4. 4. Part I - The Need & Benefits of Program Cancellation Reviews (PCRs) • Preparation for External Scrutiny / Reviews • Government Accountability Office (GAO), Office of Management & Budget (OMB), Inspector General (IG), Aerospace Safety Review Panel (ASAP) • Avoid Repeating Past Mistakes • Knowledge Capture and Transfer • Documenting and transferring Lessons Learned • Promote Increased Risk / Vulnerability Awareness within NASA PM community • Promote Greater Cultural Willingness to Look in the Mirror • Get beyond embedded NASA “Stopping Rules” • More Effective PM Training • Incorporated within APPEL curriculum • See Future Cancellations Coming In Time to Remedy • More Effective Reviews and Internal Controls • Program Management Council (PMC), Directorate Program Management Council (DPMC), Baseline Performance Review (BPR), Standing Review Board (SRB) 4
  5. 5. Part I: Goals• Understand the roles of Agency leadership, Congress, and the White House in the cancellation process• Identify key factors in cancellation decisions – Analyze selected NASA and DoD Program Cancellations• Develop a model to assess cancellation vulnerability• Propose a cancellation review process 5
  6. 6. Part I: Program Analysis Data-SetNASA DoD • X-33 • F-35 • X-34 • A-12 • X-37 • Crusader • X-38 Crew Rescue Vehicle • Comanche (CRV) • FCS • James Webb Space Telescope • F-22 (JWST) • Sea Wolf • Constellation (CxP) This data-set is considered sufficient to • Space Station Freedom (SSF) begin the process of identifying trends related to program cancellation. It is • International Space Station anticipated that future efforts will (ISS) expand the data set and analysis. 6
  7. 7. PART IICancellation Overview 7
  8. 8. Program Cancellation: Overview Cancellation or Not – They DecideUS House and Senate White House / OSTP / Agency Leadership Program Cancellation Vulnerability Domains 8
  9. 9. Congressional Leadership Considerations• Budget / budget deficit / tradeoffs• Alignment with space policy objectives• National importance or need• Affordability• Jobs in home district or home Center• Industry views 9
  10. 10. Agency Leadership Considerations• Alignment with White House Space Policy Agenda• Alignment with Agency Strategic Plan• Does program addresses primary agency objectives?• Is program/project on critical path to other programs?• Does the program fulfill unique functional requirements?• Is the mission operational scenario consistent with Agency risk posture?• Are there overriding Agency-level or Program-level budget constraints?• Are there external events & constraints to consider? 10
  11. 11. Program In Trouble LTA Req Management LTA Cost Estimation Cost OverrunLTA Pgm SchedulePlanning LTA Funding / Cancellation Unknown Phasing Technology Challenges … or not LTA = Less Than Adequate 11
  12. 12. Program in Trouble• A program “… in trouble” has started down the path toward cancellation – In Trouble usually means • Failure to deliver functional capability (and/or) • Cost Overruns – Cost Overrun is tightly coupled to Schedule Slippage – Schedule Slippage is driven by many factors, Leading drivers include: » Requirements Creep » Technology Challenges » Inadequate funding or phasing – A program “in trouble” may also have been “helped” get in trouble by external factors altering the baseline in such a way that the program may not be executable • Altered funding profile • Altered phasing of resources • Addition of requirements without allocation of funding or schedule adjustments – Mitigating factors may forestall cancellation or even prevent cancellation – One way or the other, a program in-trouble will be “in the conversation” (… on the chopping block) 12
  13. 13. Program Out-of-Step New Administration Game NewChanging AdministratorEvent(s) Shift in Senate Economic or House Imperatives 13
  14. 14. Program Out-of-Step• A program “out-of-step” is no longer aligned with Agency priorities or Agency risk posture• Loss of alignment can result from: – Change in Agency leadership – Change in National Space Policy – Change in Congressional support – Public Pressure (e.g., potential adverse environmental impact) – External Factors (e.g., end of Cold War, Financial Crisis)• A private sector metaphor: The business case is no longer viable 14
  15. 15. Part III: Cancellation Factors / Model 15
  16. 16. Cancellation Vulnerability Scorecard (CVS)• The CVS is proposed as a notional framework to assist in the discussion and analysis of program cancellations – Derived from preliminary analysis of data set on previous slide – Mini-case studies evaluating individual programs are provide in Appendices A and B 16
  17. 17. Cancellation Vulnerability Scorecard Factor High Relative Strength / Weakness LowProject Health Tech Performance G (+20) -------------------------------------(-20) R Cost/Schedule G (+20) -------------------------------------(-20) R Agency Alignment A (+15) -------------------------------------(-25) aPolicy Alignment Senate S (+10) -------------------------------------(-10) s Support/Opposition House H (+10) -------------------------------------(-10) h Support/Opposition External Factor(s) G (+20) -------------------------------------(-20) R Note: The case of Agency (OSTP/White House) misalignment with Congress would be represented by High scores for 17 Agency alignment and low scores for Senate and/or House alignment – guaranteed churn and flail
  18. 18. Cancellation Vulnerability Scorecard• CVS can give a general / relative sense of vulnerability• Attributes or Factors are key• Scoring values represent relative weights and are tailorable to an organization or program management environment – Technical Performance and cost given greatest weight (+/- 20) – Agency Alignment given asymmetric weighting where out of alignment can be very bad (-25) while fully aligned is +15 an expectation – Senate and House weights are bounded by +/- 10 reflecting the diffuse nature of Congressional influence – External factors (Wild Card) +/- 20 reflects potential powerful influence by an individual (e.g., support from a Congressional Committee Chairman) or an event (e.g., cancellation of a parent program)• Individual cases will play out uniquely• Cancellation outcomes also differ as discussed on next chart 18
  19. 19. Cancellation “Outcomes”• A range of outcomes Options Examples from cold shutdown to X-38, X-33, delay, de-scoping, Cold storage, or transfer Done Comanche, A-12, Shutdown may allow a Crusader “cancelled” program to Future Combat re-emerge down- De-Scope System stream or continue under a different set of Delay SSF, ISS, F-35 expectations and constraints Lives Partial Buy Sea Wolf, F-22 On• Knowledge Capture / Storage X-34 (USAF/EAFB) Technology Capture is Transfer X-37 to DARPA critical – NASA and DoD both have program Re-Frame/ CxP Orion / Ares termination record Re-Name retention processes On In Trouble Bubble JWST Hill Concern 19
  20. 20. Part IV: CancellationScenarios & Examples 20
  21. 21. ScenarioProgram In Trouble – Cancelled • Fails To Overcome Technical, Schedule, Budget Challenges – Cannot Deliver • Alternatives: re- base-lining, re- scoping not viable options • Weak Political Support • Not Agency Critical 21
  22. 22. ScenarioProgram In Trouble – Lives-On • “Fixes” identified and implemented • De-scoped / Re-planned • Overcomes technical challenges • Strong political support • Agency-critical “Zombie Danger Paradigm” Mega-overrun Programs Can “Eat” other Program/ Project Budgets 22
  23. 23. ScenarioProgram “On-the-Bubble” • Ongoing schedule / budget challenges • Discover of costly “known unknowns” (technical ) problems • One or more re-plan / re- baseline • Agency Critical • Mixed Political Support 23
  24. 24. ScenarioProgram Out-of-Step/Cancelled • Change Driven • Policy • People • Political Environment • Economic Environment • World Environment 24
  25. 25. ScenarioProgram Out-of-Step / Lives On Survival Scenarios • Misaligned With Agency Direction / Re- direction But Enjoying Strong Political Support • Realignment • Re-definition Of Goals & Objectives • Metamorphous • Rename • Storage • Transfer To Another Agency 25
  26. 26. Examples – Cancellation Causation Summary Matrix• Mini Case Studies (see adjacent X-33 example)are presented in Appendix A and B. Summary results are provided in the matrix on the following page. 26
  27. 27. C= cancelled Op=operating RB=re-baselined D= de-scopedKey Factors M=morphed T = transferred Comanche Factor Crusader Seawolf JWST A-12 X-33 X-34 X-37 X-38 F-35 F-22 EFV CxP FCS SSF ISS Tech X X X X X X X X X X X XProjectHeath Performance Cost/Schedule X X X X X X X X X X X X X X Agency Alignment X X X X X X X X X XAlignment Policy Senate Support/Opp X X X X House Support/Opp X X X XWild External Factor(s) X X X X X X X XCard C/ C/ tb C C D/ D/ Disposition C T T C d M M Op RB c C C D Op Op C 27
  28. 28. Part V: ProposedProgram Cancellation Review Process 28
  29. 29. PCR Process Outline• Use NPR 8621.1B Mishap and Close Call Reporting as a Guide: – Selection of board members / advisors / consultants – Gather evidence and facts – Review and analysis of data – Generate recommendations – Develop report – Develop lessons learned 29
  30. 30. Typical Steps in a PCR Prepare for the PCR Gather Evidence and FactsInterview Program Interview External Personnel Personnel Review and Analyze Data Draw Conclusions and Document Findings Generate Generate LessonsRecommendations Learned Develop PCR Report 30
  31. 31. Mishap Report and PCR Similarities and Differences Elements Mishap Report PCRHQ and Center Contingency YES NOPlansDetermine Appointing Official YES YESand Appoint MembersSecure the Site & Preserve YES Preserve NASA and ContractorEvidence. Impound Data. Records and DatabasesWitness Statements YES YES. Inside NASA, the Contractor and Also External OrganizationsContract Clause YES May Be RequiredGather Physical Evidence and YES YESFactsReview and analyze Data YES YESDraw Conclusions and YES YESRecommend FindingsGenerate Recommendations YES YESDevelop Report and Lessons YES YESLearned 31
  32. 32. Review & Analysis: ExpandedPCR Framework PCR- Areas of Investigation A1. ExecutabilityTech Performance Analysis Elements A2. U.S. Navy PoPS, Probability of Program Success Cost/Schedule framework B. Better Buying Power Elements C. AlignmentAgency Alignment D. Circuit Breakers SenateSupport/Opposition HouseSupport/Opposition External Factor(s) 32
  33. 33. Investigation Area A-1: Executability Analysis Elements• Executability analysis – Acquisition strategy – Planning and scheduling – Requirements – Software/hardware development, integration, & test – Risk management – Metrics & performance monitoring – Integrated product team (IPT) (Bruckman 2012) effectiveness – Contractor integration & management 33
  34. 34. Investigation Area A-2: U.S. Navy PoPS,Probability of Program Success framework Program Planning & Execution • Acquisition Management • Industry/Company Assessment • Total Ownership Cost Estimating • Test and Evaluation • Technology Maturity • Sustainment • Software • Contract Planning and Execution • Government Program Office Performance • Technology Protection Program Requirements Program Resources External Influencers • Parameter Status • Budget Planning • Fit in Vision • Scope Evolution • Program Advocacy. • CONOPS • Manning • Interdependencies. 34
  35. 35. Investigation Area B: DoD Better Buying Power Elements Related to Requirements / Cost / ScheduleWere programswired for successof failure? Didcancelled programconduct:• Affordability Analysis• Will Cost / Should Cost Analysis• Schedule Risk Management 35
  36. 36. Investigation Area C: Alignment• Lost Alignment – Weak political support / why? • Options / lessons learned / span of control / future guidance • Role of legislative affairs • Role of external affairs – Weak agency support / why? • Options / lessons learned / span of control / future guidance • Changes in agency strategic plan? • Changes in agency policies? 36
  37. 37. Investigation Area D: Circuit Breakers• Role of “Circuit-breakers - Internal and External Review Processes – Internal • Program Management Council (PMC), Directorate Program Management Council (DPMC), Baseline Performance Review (BPR), Standing Review Board (SRB) – External • Government Accountability Office (GAO), Office of Management & Budget (OMB), Inspector General (IG), Aerospace Safety Review Panel (ASAP) How Effective was Review? / Were we Listening? 37
  38. 38. Conclusion / Action• Implement PCR Process - It will establish and enable “the discussion” that will help avoid future cancellations – Preparation for External Scrutiny / Reviews • GAO, OMB, Inspector General – Avoid repeating past mistakes – Knowledge capture and transfer • Documenting lessons learned – Promote greater program manager (PM) self awareness • More proactive pm’s • See future cancellation coming in time to remedy – Promote greater cultural willingness to look in the mirror • Get beyond embedded NASA “stopping rules” – More effective PM training • APPEL training – More effective reviews and internal controls • DPMC, PMC, BPR, SRB 38
  39. 39. Appendix ANASA Mini-Case Studies 39
  40. 40. Mini-Case X-33 Technology Demonstrator Test-bed The 1999 test failure X-33, SLI Program of the multi-lobed composite LH2 tank Start 1993 / Goldin doomed the program. Two options one a Cancelled March 2001 / Goldin redesign of the composite structure inconsistent with test Sunk Cost $940M introduced additional demonstration weight and created cg objectives. Phase at Manufacturing underway (Phase D) issues. The other Cancellation alternative, an Al-Li metal tank was Prime Lockheed Martin Skunk Works considered to be Contractor Acq. Vehicle Cooperative Agreement Official Cause technical Underlying Composite, complex geometry LH2 fuel Cause(s) tank problemsNASA S&MA Review of X-33, March 1998http://www.nasaspaceflight.com/2006/01/x-33venturestar-what-really-happened/http://forum.nasaspaceflight.com/forums/thread-view.asp?tid=347&start=1http://en.wikipedia.org/wiki/Lockheed_Martin_X-33 40
  41. 41. Mini-Case X-34 Technology Demonstrator Test-bedX-34, SLI Program X-34 Cancellation: In 2001 “goal posts moved” after consecutiveStart 1996 / Goldin Mars failures. Introduction of new “safety requirements” (man-in-the-Cancelled March 2001 / Goldin loop control) after the vehicle was already in operational test createdSunk Cost $378 M an untenable cost/schedule scenario.Phase at Integrated Test (Phase D), FASTRAC engine X-34 Re-emergence?Cancellation integrated , tow testing completed, captive November 2010: “The two X-34s were hauled to a carry testing underway National Test Pilot School hangar at the Mojave facility for inspections by Orbital Sciences personnelPrime Contractor Orbital Sciences to determine their viability for potential future flight programs. “Acq. Vehicle Cooperative AgreementOfficial Cause “technical and schedule” reasons / (mainly involving GFE, FASTRAC engine)Underlying Change in NASA senior management riskCause(s) posture after back-to-back Mars failuresNASA Office of Safety & Mission Assurance, S&MA Review of X-33, June, 1998http://www.nasa.gov/centers/dryden/news/FactSheets/FS-060-DFRC_prt.htmhttp://history.nasa.gov/monograph31.pdfhttp://en.wikipedia.org/wiki/Orbital_Sciences_X-34http://forum.nasaspaceflight.com/index.php?topic=5806.30http://www.flightglobal.com/blogs/graham-warwick/2008/02/whatever-happened-tonasas-x34-1.htmlhttp://www.wired.com/dangerroom/2010/11/grounded-nasa-space-plane-poised-for-comeback/http://www.sciencedaily.com/releases/2000/08/000801075234.htmhttp://nasawatch.com/archives/2010/11/x-34-to-fly.html 41http://www.nasa.gov/centers/dryden/status_reports/X-34s_moved_11_17_10.html
  42. 42. Mini-Case X-37 Technology Demonstrator Test-bed The X-37 project progressed in aX-37 satisfactory manner, overcoming a variety ofStart 1998 as Cooperative Agreement technical challenges. Change in policy /Cancelled 2003 priorities ended NASA sponsorship in 2003. The X-37B wasSunk Cost $173M cost sharing with Boeing The X-37 was launched into orbit in transferred to DARPA April 2010 and made in 2004 and continued an autonomous landingPhase at Sub-scale X-40 flights completed. NASA development. http://wl at VAFB in Dec. 2010.Cancellation transferred X-37 to DARPA in 2003.Prime Contractor BoeingOfficial Cause(s) Change in Agency policy directionNotes: X-37B emerging as Air Force Orbital Test Vehicle OTV (AIAA 2011) http://www.spacenews.com/launch/100423-af-launches-space-plane.html http://www.spacenews.com/commentaries/100823-civilian-role-x37b.html http://www.msfc.nasa.gov/news/x37news/index.html http://www.nasa.gov/centers/marshall/news/news/releases/2003/03-126.html http://www.msfc.nasa.gov/news/news/releases/1998/98-141.html 42
  43. 43. Mini-Case X-38 Technology Demonstrator Test-bed X-38, International Space Station The X-38 project was developed to Crew Return Vehicle (CRV) serve as a potential ISS return vehicle. Start 1994 / Goldin Overcoming a variety of technical Cancelled April 2002 /OKeefe issues X-38 was on the path to succeed. Sunk Cost $1.5 B Severe cost overruns primary factor in the X-38 within the ISS cancellation. Lack of mission Phase at Three drop-test flight programs completed – program during the critical alignment was also a 2000/2001 time- factor in the decision. Cancellation par foil descent to landing on skids frame were a Prime Contractor In-House JSC / Scaled Composites (airframe) Official Cause ISS budget problems eventually led to cancellation Underlying Linkage to ISS / New Administrator / no Cause(s) policy driver for X-38X-38/CRV All Hands, EA3/John F. Muratore, 3 Dec 2001http://en.wikipedia.org/wiki/NASA_X-38http://en.wikipedia.org/wiki/File:ISS_Crew_Return_Vehicle.jpghttp://www.fas.org/programs/ssp/man/uswpns/air/xplanes/x38.htmlhttp://www.nasa.gov/centers/dryden/news/FactSheets/FS-038-DFRC.html 43
  44. 44. Mini-Case Constellation Program Constellation Program The Constellation program cancellation involved cost Start Feb 2004 / O’Keefe, Griffin overruns and schedule delays, resulting in-part from: 1) Cancelled Feb 2010 /Bolden underfunding and altered phasing, 2) technical Sunk Cost $9.5B + $2B cancellation challenges, and 3) program management approach and Phase at Ares/Orion pre-CDR. Ares I-X flight test constraints. The other and Cancellation completed in October 2010 overarching reason for cancellation was a shift in Prime Ctrs & Orion / JSC, LM, in Administration and Agency priorities and policy Contractor(s) Ares / MSFC, ATK, Boeing the NASA leadership that accompanied change team Acq. Vehicle Multiple Competitive Contracts Official “technical, cost, and schedule” reasons – Cause(s) “lacked innovation” Underlying Change in Space Policy Cause(s)http://news.bbc.co.uk/2/hi/science/nature/8489097.stmhttp://www.spacenews.com/civil/110614-memo-marks-end-constellation.htmlhttp://en.wikipedia.org/wiki/Constellation_programhttp://www.nasa.gov/mission_pages/constellation/news/index.htmlhttp://www.scientificamerican.com/article.cfm?id=nasa-budget-constellation-cancel 44
  45. 45. James Webb Space Telescope Mini-Case James Webb Space Telescope Start Planning initiated in 1996 Cancelled On the Bubble “On the Bubble” January 2012: JWST is the subject of Sunk Cost $3B + (2011) heated debate within NASA House and Senate oversight committees threatening to consider cancellation and Phase at Passed CDR – summer 2010 / 2011, the cap future costs. The impact of JWST cost overruns on Cancellation JWST program is in the final design and other programs and projects is a major concern. fabrication phase (Phase C). Multiple technology development issues as well as LTA program management have been cited as cost and Prime GSFC, Northrop Grumman, schedule drivers. Contractor(s) Notes: $1.6B initial/ then $5B, then $6.5B – now $8.8 B (2018 launch/5 yr op) Multiple re-baselines and re-planning (major 2005) Notes: 17 international partnershttp://www.jwst.nasa.gov/http://www.pcmag.com/article/print/266679http://www.spacepolicyonline.com/news/hall-this-is-last-opportunity-for-jwsthttp://www.spacenews.com/civil/100111-congress-criticizes-spending-webb-telescope.htmlhttp://www.wired.com/wiredscience/2011/09/astronomers-plead/http://news.yahoo.com/scientists-fight-controversial-james-webb-space-telescope-112402158.html 45
  46. 46. Mini-CaseSpace Station FreedomSpace Station Freedom Space Station Freedom (SSF) struggled withStart 1984 - Early Development, 10 contracts multiple redesigns, re- signed in Sept 1988 baselining, as well as internal and externalCancelled By June 1993 after seven redesigns SSF political conflict. SSF was politically non-viable provided a foundation for the ultimate redesign development and implementation of the InternationalSunk Cost $11.4 B Space StationPhase at Design completed – some hardware inCancellation developmentPrime Boeing, PWR, McDonnell-DouglasContractor(s)Cause(s) Multiple redesigns and re-scoping coupled with repeated underestimates of cost coupled with uneven political supporthttp://en.wikipedia.org/wiki/Space_Station_Freedomhttp://www.russianspaceweb.com/iss_chronology.htmlhttp://www.russianspaceweb.com/iss_us_roots.htmlhttp://www.fas.org/spp/civil/crs/93-017.htm 46
  47. 47. Mini-Case International Space Station The International Space Station (ISS) International Space Station (ISS) operating in orbit today survived a serious re-evaluation in 2001. Start 1993 – building on the SSF The Young report findings noted: redesign efforts “.. ISS Program’s technical “The existing deficiencies in achievements to date, as represented management structure, “In- IMCE (Young Report) – by on orbit capability, are institutional culture, cost Trouble” November 2001 extraordinary.” estimating, and program control must be acknowledged and Notes International Space Station (ISS) “The existing ISS Program Plan for corrected for the Program to move Management and Cost Evaluation (IMCE) executing the FY 02-06 budget is not forward in a credible fashion” Task Force emphasized need to develop credible.” better cost estimates and high fidelity baseline for future budget planninghttp://www.spacedaily.com/news/iss-01v.html 2001http://history.nasa.gov/youngrep.pdfhttp://ntrs.nasa.gov/archive/nasa/casi.ntrs.nasa.gov/20020008687_2002004289.pdf 47
  48. 48. Appendix BDoD Mini-Case Studies 48
  49. 49. Mini-Case F-35 Lightening II F-35 Program Start November 1996 Cancelled Not Cancelled Development Projected to be $382B for 2,443 aircraft Cost Phase at N/A. Currently in Development Flight Cancellation Test. “… In a nutshell, the F-35 program is five Prime Lockheed-Martin (airframe), Pratt- to six years behind schedule. The Contractor(s) Whitney (engine) estimated cost to taxpayers has nearly Official Not cancelled. doubled” Cause(s) Underlying Three variants, concurrent engineering Cause(s) and test, low-TRL helmet-mounted display, complex integration and life- cycle support (international partners) requirements, $1T Life cycle support costs across 49 bases.http://www.star-telegram.com/2011/01/29/2806149/f-35-started-with-recipe-for-trouble.html#storylink=cpyhttp://en.wikipedia.org/wiki/Lockheed_Martin_F-35_Lightning_IIhttp://www.defense.gov/news/newsarticle.aspx?id=62829http://www.lse.co.uk/FinanceNews.asp?ArticleCode=eonzqi07td0tkfi&ArticleHeadline=US_Navy_Air_Force_may_field_F35s_later_than_2016http://www.foxnews.com/politics/2012/01/27/struggling-in-us-f-35-fighter-pushes-sales- 49abroad/
  50. 50. Mini-Case A-12 Avenger II A-12 Program Start 1984 contract award Cancelled January 1991 Sunk Cost $5B Phase at Just passed CDR in October 1990 Cancellation … the A-12 Avenger II - had "failed to make progress," were behind schedule and had Prime McDonnell-Aircraft and General designed a plane that was too heavy. Contractor(s) Dynamics Accordingly, the U.S. terminated the Acq. Vehicle Firm-fixed price contractors for "default," Official Breach of contract Cause(s) Underlying Schedule delays and cost increases, Cause(s) technical issues with stealth and radar system, airframe overweighthttp://en.wikipedia.org/wiki/McDonnell_Douglas_A-12_Avenger_IIhttp://news.google.com/newspapers?id=7FJSAAAAIBAJ&sjid=mzYNAAAAIBAJ&pg=3046,1502437&dq=avenger+ii+cost&hl=enhttp://www.defensenews.com/article/20110523/DEFSECT01/105230306/Supreme-Court-Overturns-A-12-Ruling-Against-Contractorshttp://www.defensenews.com/apps/pbcs.dll/article?AID=2011105300307 50
  51. 51. Mini-Case XM2001 Crusader Crusader Program Start 1QFY95 Cancelled 2QFY02 Sunk Cost $2B of a planned $11B spent Phase at Passed PDR in Nov 2001 Cancellation “… In early May 2002, Secretary of Defense Prime United Defense and General Dynamics Donald Rumsfeld cancelled the $11 billion USD Contractor(s) program because he considered it neither mobile Official Cost increased to $25M per unit nor precise enough…” Cause(s) Underlying SecDef “transformational” goals. Cause(s) Crusader was designed for a “different strategic context”. Advanced alternative systems (upgraded Paladin) were available.http://en.wikipedia.org/wiki/XM2001_Crusader 51
  52. 52. Mini-Case ComancheComanche ProgramStart April 1991Cancelled February 2004 “… the Comanche, conceived in 1983 during the Cold War,Sunk Cost $6.9B of a projected $39 B program was a victim of changing needs as the militarys focus has shifted to the war on terrorism.”Phase at DOT&E “… keeping the Comanche "survivable" in the currentCancellation threat environment would require design changes that would cost "several billion dollars" and erode thePrime Sikorsky, Boeing and Lockheed-Martin choppers stealth capability, one of the primary reasons forContractor(s) developing the aircraft”Official Schedule delays and cost overrunsCause(s)Underlying Poor management, different operationalCause(s) environment--conceived during the cold war, Iraq War lessons learnedhttp://articles.cnn.com/2004-02-23/us/helicopter.cancel_1_comanche-sikorsky-aircraft-corporation-schoomaker?_s=PM:UShttp://en.wikipedia.org/wiki/Boeing-Sikorsky_RAH-66_Comanchehttp://www.aviationweek.com/aw/generic/story_generic.jsp?channel=aerospacedaily&id=news/hel02244.xml 52
  53. 53. Mini-Case Future Combat Systems (FCS) FCS Program Start October 1999 Cancelled June 2009 Sunk Cost $18B of originally estimated $92B Phase at Systems of Systems Functional Review "Since its inception, costs have gone up dramatically while Cancellation promised capability has steadily diminished”. . . . “The Government Accountability Office and the Congressional Prime Boeing and SAIC (lead integrators) Budget Office have questioned the cost and management of Contractor(s) Future Combat Systems” Official DoD shift toward spending more on Cause(s) counter-terrorism and less to prepare for conventional warfare against large states like China and Russia Underlying Affordability. Costs have gone up Cause(s) dramatically (est $233B) while promised capability has steadily diminished.http://en.wikipedia.org/wiki/Future_Combat_Systemshttp://www.washingtonpost.com/wp-dyn/content/story/2007/12/06/ST2007120602927.htmlhttp://www.aviationweek.com/aw/generic/story.jsp?id=news/GROUND050809.xml&headline=U.S.%20Army%20Ground%20Vehicles%20Up%20and%20Down&channel=defense 53http://csis.org/files/media/csis/pubs/090205_fcsarmy.pdf
  54. 54. Mini-CaseF-22 ProgramF-22 ProgramStart April 1991 (ATF competition winner announcement)Production July 2009Termination “…The Cold War was over, it didnt make any sense to go forwardSunk Cost $65B for 187 aircraft with the program," said Thomas Christie, a retired official who worked 50 years at the Pentagon. "But the Air Force built up such a large constituency up on the Hill that it couldnt be killed.“Phase at ProductionCancellation … Two decades ago, the U.S. government planned to buy 648 of the fighters for $139 million apiece; the cost has almost tripled sincePrime Lockheed-Martin then to $412 million, the Government Accountability Office said.Contractor(s) Recently retired Defense Secretary Robert M. Gates ended the purchase in 2009 at 188 planes ….Official 5th generation fighters were required byCause(s) all three services which favored the F-35Underlying End of the Cold War. Affordability ofCause(s) continuing production.http://articles.latimes.com/2011/aug/07/business/la-fi-fighter-jets-grounded-20110807http://en.wikipedia.org/wiki/Lockheed_Martin_F-22_Raptorhttp://www.slate.com/articles/news_and_politics/war_stories/2009/07/they_scrapped_the_f22.htmlhttp://www.defensereview.com/f-22-raptor-program-cancellation-defensereview-weighs-in/ 54
  55. 55. Seawolf Program Mini-Case Seawolf Program Start August 1992 Concept Exploration and Definition Cancelled 1995 (after U.S.S. Jimmy Carter launched) Sunk Cost $13B Phase at Production. 3 or 29 planned submarines …. ordered at the end of the Cold War in 1989. At one Cancellation were built and deployed time, an intended fleet of 29 submarines was to be built over a ten-year period, later reduced to twelve Prime Electric Boat Division of General submarines. The end of the Cold War and budget Contractor(s) Dynamics constraints led to the cancellation in 1995 of any further additions to the fleet, leaving the Seawolf class limited to Official Changing requirements environment and just three boats Cause(s) growing budget constraints, the superior performance parameters of the Seawolf class could not justify its cost Underlying Faulty welding specs for HY-100 steel, Cause(s) extensive rebuilding of the first hull of with an estimated cost increase of $68.6 million and a 1 yr schedule delayhttp://www.gao.gov/assets/230/220367.pdfhttp://www.globalsecurity.org/military/systems/ship/ssn-21.htmhttp://www.gao.gov/archive/1995/ns95004.pdfhttp://www.fas.org/programs/ssp/man/uswpns/navy/submarines/ssn21_seawolf.htmlhttp://www.cdi.org/issues/naval/seawolf.htmlhttp://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG112 558.2.pdf
  56. 56. Mini-Case Expeditionary Fighting Vehicle (EFV) Program EFV Program Start June 1996 Contract Award Cancelled January 2011 Sunk Cost $3.3B Phase at CDR in 2008, EFV was in System Design “…the program is simply not affordable given Cancellation and Development likely Marine Corps procurement budgets,” said the general. “The procurement and Prime General Dynamics Land Systems operations/maintenance costs of this vehicle are Contractor(s) onerous” – USMC Commandant Gen J. Amos Type Contract Cost Plus Official Not affordable or sustainable Cause(s) Underlying Poor management, required an Cause(s) additional $12 billion to field the fleet of about 550 EFVs, DoD budget cuts, political pressure on DoD budgethttp://www.efv.usmc.mil/http://forums.military.com/eve/forums/a/tpc/f/8071946761/m/3520094181001http://en.wikipedia.org/wiki/Expeditionary_Fighting_Vehicle 56

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