Lack of Intelligence
America's secret spy satellites are costing you billions, but they can't even get off the launch pad
Problems came early and often. First, only two companies bid on the contract. Drastic consolidation in the defense industry--it shrank from 75 companies to five in two decades--meant that only Lockheed Martin and Boeing Corp. competed. In September 1999, Boeing won the right to build the sensors and satellites for the system. To keep costs down, industry sources say, Boeing curtailed testing until electronic and other components had been assembled into larger systems. This cost-cutting measure had the perverse effect of making the project more expensive: Technical glitches forced the company to redesign and remanufacture key FIA subsystems. "If you cut corners early on, you end up paying for it later," says Phil Coyle, director of the Pentagon's Operational Test and Evaluation office from 1994 to 2001. "This is rocket science," adds a former NRO contractor, and testing is critical. Boeing declined to comment. There is another problem. The FIA project and other NRO programs are so secretive that officials say they can't even talk about them. "Any time you have secrecy," says Loren Thompson of the Lexington Institute, a defense think tank, "performance and accountability suffer."
The FIA program is now several years behind schedule and $4 billion over budget. The NRO is scrambling as a result. Last summer, the Air Force colonel managing the FIA effort was reassigned. NRO Director Teets has established a team to study "best practices" for satellite acquisition and testing protocols. He also wants Congress to give the NRO the right to maintain a reserve fund to help him better manage any future financial problems with the program. Many national security experts support the creation of such a fund.
The idea of a reserve fund isn't new. The NRO once maintained such a kitty to guard against unanticipated problems that arose during development of spy satellites. But Congress eliminated the fund in 1996 after learning that NRO officials had amassed a $4 billion reserve and, separately, had spent $310 million on a lavish new headquarters building in Chantilly, Va. The scandal lead to the removal of the NRO director and his deputy. Some experts say the episodes also focused attention on Congress's lax oversight of the NRO, a problem that persists to this day (Page 36).
The bloated FIA program is eating up limited resources and endangering other vital intelligence programs. The House Intelligence Committee predicted last November that FIA's "technical and funding problems" could "force untenable trades between critical future capabilities and legacy systems." That prediction was right on the money. Last December, Rumsfeld met with Teets and Tenet in his Pentagon office and told them, sources say, that he was not going to keep paying for cost overruns on FIA.
Teets has been forced to reallocate money from at least four top-secret satellite programs. "Currently, we pull money from a stable program to solve problems in an unstable program," Teets told the Senate Armed Services Committee last March. "In other words, we will break one program just to fix another." A Lockheed Martin eavesdropping satellite, known as Intruder and described by sources as "critical" to the war on terrorism, is one of the systems that has been scaled back. Deployment of other satellites may be delayed several years.