June 15th, 2009

Pentagon kills $6.3 billion missile technology project

Posted by Michael Krigsman @ 6:06 pm

Categories: CIO issues, Governance, Government projects, Project failures, Vendor relationships

Tags: Northrop Grumman Corp., Pentagon, Government, Supply Chain, Vertical Industries, Business Operations, Michael Krigsman

The Pentagon canceled Northrop Grumman’s Kinetic Energy Interceptor program amid accusations by Defense Secretary, Robert Gates, that the system’s design would not accomplish key military objectives.

It’s not an IT failure, per se, but certainly a great example of poor fit-to-purpose between technology and business requirements, leading to project abandonment and failure. Northrop Grumman had completed approximately $1.2 billion of work at the time of cancellation.

The Pentagon said it terminated the project for the “convenience of the government” and not because of problems with Northrop.

Northrop Grumman describes the system:

KEI is the Ballistic Missile Defense System (BMDS) element that is being designed to destroy enemy ballistic missiles during their boost and early midcourse phases of flight. It is also the first ballistic missile defense weapon system to be developed without the constraints of the Anti-Ballistic Missile Treaty.

Reuters said Gates stopped the program because:

Gates and the Missile Defense Agency said the system had limited capability, would have been difficult to fire from ships because of its large size, cost too much and would have to have been launched from close to the target.

To make sense of the termination, the Preventing Project Failure blog compares Department of Defense rhetoric with that of Northrop Grumman:

Based on this brief comparison, it’s obvious that substantial expectation gaps existed between the technical supplier and its “business” customer (in this case, the government).

The Tribune-Democrat, a local newspaper in Pennsylvania, where Northrop has a facility, notes the cancellation took effect before the government even tested the system:

Rep. Jerry Lewis, R-Calif., grilled Defense Secretary Robert M. Gates about the administration’s decision to kill the project.

“Six years of development and testing, with most of the more than $1 billion of funding spent to date, was to culminate in the first booster flight in the fall of ’09,” Lewis said. “With the issuance of the stop-work order, the department is walking away from this investment without benefit of knowing what the technology has to offer.”

There are funds available in the 2009 budget to complete the test, Lewis continued.

“Why would the department kill a program four months before its booster flight?” he demanded. “Why not allow the program to execute the (fiscal-year) ’09 funds?”

The Kinetic Interceptor Program was on its way out before Obama took office, Gates told the subcommittee.

Besides the slow-developing technology, Missile Defense Agency leaders saw deployment logistics issues, he said.

“A big part of the problem with this program is that it needs to be close to the launch site to be able to be effective,” Gates said. “The only potential country where it could have a role with some confidence would be North Korea. It has poor capability against Iran and virtually no capability against either Russia or Chinese launch facilities. And so you have a very limited capability here at considerable cost.”

Despite differing views between vendor and customer, one thing is certain: the government wasted over a billion dollars before deciding this system didn’t meet requirements.

This missile program parallels the experience of many IT projects in the private sector, despite the large numbers involved. I suspect that failures driven by the “alignment gap” between technical and business groups are far more common than one might think.

[Image showing advanced technology from Gizmodo.]