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LCD-79-112 1 (1979-04-16)

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                   COMFITROLAER GENERAL OF T14E UNITED STATIES
                            WASINGTOK D.C. am

    B-168707
                                                APRIL 16,1979

    The Honorable Jamie L. Whitten
    Chairman, Committee on Appropriations
    House of Representatives

    Dear Mr. Chairman:                                    109125

         Your February 26, 1979, letter requested that we review
    the Department of Defense's plan to purchase two satellites
    for the Defense Satellite Communications System, Phase II
    (DSCS II). Our findings, conclusions, and recommendations
    are summarized below. A more detailed discussion of the
    results of our review is provided in the enclosure to this
    letter.

         We have concluded that Defense's requirement for the
    Phase II satellites has not been justified. This require-
    ment is based on a theoretical gap in communications (caused
    by not having enough satellites in the phase's final years)
    before the operational Phase III (DSCS III) satellites become
    available. The problem with this theory, however, is that
    the two Phase II satellites could not be launched in time
    to fill any gap between the two phases. The earliest pos-
    sible launch of the two Phase II satellites could not occur
    before the Phase III satellites are scheduled to be in orbit
    and operational. Any difficulties with the remaining Phase
    II program, such as launch failures or catastrophic failures
    of on-orbit satellites, could not be alleviated by this addi-
    tional procurement.

         The justification for this procurement was enhanced
    because Defense Communications Agency program officials used
    a different criterion than that used by Air Force officials
    responsible for the satellite procurements to determine the
    numbers of satellites needed to maintain system availability.
    This rule change resulted in an apparent need for the two
    satellites, but, in our opinion, the need is neither appro-
    priate nor practical in terms of actual satellite deliveries
    and launch schedules. On the basis of Air Force records
    showing realistic Phase II and III launch dates, we conclude
    that the gap predicted by the Defense Communications Agency
    will not occur unless the Phase II satellites either fail
    prematurely in orbit or they fail to attain orbit. However,
    the launch of the two new Phase II satellites would not occur
    before the Phase III satellites become operational.

                                                      LCD-79-112

                                                      (941182)