F or more than a decade, federal agencies have grappled with how to address climate change effects when implementing the Endangered Species Act of 1973 (ESA, or the Act). The ESA aims to protect threatened and endangered fish, wildlife, and plants from extinction. As set forth by Congress, one of the main purposes of the ESA is to "provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved." To conserve threatened and endangered species, the Act seeks to identify threatened or endangered species, facilitate recovery and conservation of these species, and minimize the effect of federal and private actions on these species and their habitats. The Supreme Court has stated that "[t]he plain intent of Congress in enacting this statute was to reverse the trend toward species extinction, whatever the cost." To achieve that purpose, Congress declared that "all Federal departments and agencies shall seek to conserve endangered species and threatened species and shall utilize their authorities" to further the ESA purposes. Under the ESA, two federal agenciesâthe U.S. Fish and Wildlife Service (FWS) within the Department of the Interior and the National Marine Fisheries Service (NMFS) within the Department of Commerce (collectively, the Services)âare primarily responsible for implementing the ESA. According to the Services, over 1,500 species of plants and animals receive some type of protection under the ESA. Since the early 21st century, some Members of Congress have urged the Services to factor in climate change effects when implementing the ESA. The Services, along with scholars and scientists, have acknowledged that the changing climate may threaten the survival of and habitat for some species. As noted by courts and legal scholars, the ESA does not expressly require the Services to consider the effect of climate change in their ESA decisions. However, the ESA and its implementing regulations (1) direct the Services to consider "natural or manmade factors affecting [a species'] continued existence" when determining whether a species should be protected under the ESA; and (2) require the Services to analyze cumulative effects on a species' survival when analyzing whether federal actions jeopardize a species protected under the Act. The courts and the Services have interpreted these provisions as requiring the Services to consider climate change effects into the ESA decisionmaking process. Various lawsuits have challenged the Services' interpretation of complex scientific data or models that predict short- and long-term effects from a changing global climate on specific species and their habitats. These lawsuits typically focus on two main issues: (1) when the Services should list, delist, or reclassify a species as threatened or endangered because of climate change effects; and (2) whether the Services can or should regulate activities that affect the climate to protect the species. Judicial review has helped to ensure that the Services consider projected climate change effects on species in their ESA decisions, but the courts have not required the Services to curb activities that may contribute to climate change to protect threatened or endangered species. This report analyzes the courts' role in shaping how the Services have factored climate change effects into ESA decisions and recent regulatory developments that seek to clarify how the Services consider and address climate change in their ESA decisions. Judicial Review Under the ESA In general, stakeholders challenge the Services' ESA actions or inactions under the Administrative Procedure Act (APA). The APA authorizes reviewing courts to "hold unlawful and set aside agency actions, findings, and conclusions found to be arbitrary, capricious, [or] an abuse of discretion." Under the arbitrary and capricious standard, courts must determine whether the agency "examine[d] the relevant data and articulate[d] a satisfactory explanation for its action, including a 'rational connection between the facts found and the choice made,'" but the standard prohibits courts from "substitut[ing] its judgment for that of the agency." Under this deferential standard, courts have generally deferred to the Services' decisions related to climate change. However, courts have not deferred to the Services when the court concludes that the record does not support the Services' decision or the Services failed to consider climate change adequately. The sections below offer selected examples, drawn from various court decisions, legal documents, and regulatory developments, to illustrate the range of issues that the Services and the courts have addressed related to the ESA and climate change. Each section of the report reviews the applicable legal framework and discusses the relevant regulatory revisions finalized by the Trump Administration in August 2019. This report does not aim to provide a comprehensive or representative preview of all the judicial decisions that have addressed this area. Listing Decisions Under the ESA Many legal challenges involving the ESA and climate change have centered on whether to list a species as endangered or threatened under the ESA. To trigger protections and prohibitions under the ESA, the Services must first list a species as threatened or endangered. Under ESA Section 4, the Services list a species as endangered or threatened based on assessments of the risk of their extinction. The Act defines an "endangered species" as a species "in danger of extinction throughout all or a significant portion of its range." A "threatened species" is a species "likely to become endangered within the foreseeable future in all or a significant portion of its range." For listing decisions, the ESA requires the Services to determine whether the species "is a threatened or endangered species because of any of the following factors: (A) the present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; or (E) other natural or manmade factors affecting its continued existence." When listing a species, the Services must make their decision "solely on the basis of the best scientific and commercial data available . . . after conducting a review of the status of the species," taking into account any state's or foreign nation's actions to protect such species. Courts have consistently held that the Services must consider climate change as a factor in their listing decisions if it may affect the survival of the species. However, stakeholders have disputed the extent to which climate change affects species and the science underpinning listing decisions. Some stakeholders have sought through petitions and legal challenges to compel the Services to list species whose survival has been or may be threatened by climate change effects. Other stakeholders have challenged the listing of species or petitioned the Service to delist a species, questioning whether model-based climate predictions constitute the "best scientific and commercial data available" on which to base ESA listing decisions. Scientific uncertainty and undefined terms in the ESA have opened the door to litigation challenging the Services' interpretation of ambiguous terms and their assessment of the climate science that supports their listing decisions. Courts often uphold the Services' interpretation of ambiguous terms because judicial review of agency decisions is narrow and highly deferential; the court will not set aside an ESA listing decision so long as it is rational and reasonably based on supporting evidence. However, courts have faulted the Services for inadequately considering climate change effects or relying on the scientific uncertainty of climate modeling to deny a petition to list a species. The two sections below discuss various court decisions that have reviewed how the Services (1) interpret the undefined "foreseeable future" in their listing decisions, and (2) address the scientific uncertainty of climate change effects. Foreseeability of Climate Change Effects in Listing Decisions Legal challenges to Services' decisions to list or not to list a species as threatened highlight the difficulty in predicting whether a species is likely to be endangered "within the foreseeable future" because of climate change effects. Neither the ESA nor the implementing regulations define the term foreseeable future . Under their interpretation of the term, the Services determine foreseeability on a case-by-case basis for listing decisions, and the foreseeable future time frame can vary considerably based on the species and its habitat. For species affected by climate change, the Services' decisions on foreseeability of a species' survival often depend on their assessment of predictive modeling of climate threats to a species and its habitat. How a Service defines a species' foreseeable future could affect its ESA listing decision. For example, a species is less likely to be listed for protection under the ESA if the Services adopt a shorter time frame for the foreseeable future, thereby limiting their consideration of longer-term projections of climate change effects on a species and its habitat. The legal challenges to FWS's listing of the polar bear ( Ursus maritimus ) illustrate how courts have applied this narrow and deferential standard of review and interpreted the ESA standards for the best available data in the climate change context. In 2013, in Safari Club International v. Salazar (In re Polar Bear Endangered Species Act Listing and Section 4(d) Rule Litigation) (hereinafter In re Polar Bear ), the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) upheld FWS's listing of polar bears as a threatened species under the ESA based in part on projected climate change effects to the species and its habitat. FWS based its decision on three main conclusions: (1) that the polar bear is dependent on sea ice for its survival; (2) that sea ice is declining; and (3) that climate change will likely continue to reduce the extent and quality of arctic sea ice gravely enough to endanger the polar bear population. The D.C. Circuit held that the challenges to FWS's scientific assessment and conclusions "'amount to nothing more than competing views about policy and science,' on which we defer to the agency." The court also rejected arguments that climate science was too uncertain to support listing the polar bear as a species that is likely to become endangered in the "foreseeable future," defined by FWS in this case as 45 years in the future. The court concluded that FWS's reliance on climate projections was "justifiable[,] clearly articulated[,] . . . sufficient to support their definition of foreseeability." The Supreme Court declined to review the case. In 2016, the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) similarly deferred to the NMFS's foreseeable future analysis in upholding the listing of two populations of Arctic bearded sealsÂ ( Erignathus barbatus nauticus ) in Alaska Oil & Gas Association v. Pritzker . NMFS listed the seals as threatened in 2012 based on climate change models that predicted that sea ice the seals depend on for birthing and mating would mostly disappear by 2095. In rejecting the plaintiffs' claim that the models used in the listing decision could not reliably predict climate change effects on the seals beyond 2050, the Ninth Circuit concluded that NMFS may base its listing decision on such models and long-term projections because the record included a reasonable explanation for its decision. The court explained that the ESA does not require NMFS to base its decision on ironclad evidence when it determines that a species is likely to become endangered in the foreseeable future; it simply requires the agency to consider the best and most reliable scientific and commercial data and to identify the limits of that data when making a listing determination. Soon after the bearded seal decision, the Ninth Circuit reversed an Alaska federal district court's decision to vacate NMFS's decision to list the Arctic subspecies of the ringed seal ( Phoca hispida hispida ) as threatened under the ESA. Bound by the precedent set in Pritzker , the Ninth Circuit concluded that the district court erred when it required more "definitive quantitative data about the Arctic ringed seal population and an extinction threshold" to list the species as threatened under the ESA. The court determined that NMFS's reliance on climate change models that project until 2100 was not arbitrary or capricious because NMFS "provided a reasonable and scientifically supported methodology for addressing volatility in its long-term climate projections, and it represented fairly the shortcomings of those projectionsâthat is all the ESA requires." Courts have also deferred to NMFS's decisions not to list species when it reasonably demonstrated that long-term predictive climate models were unreliable to support a listing decision. For example, a federal district court in California upheld NMFS's decision not to list the ribbon seal ( Histriophoca fasciata ) as threatened or endangered despite a "likely" population decline related to sea ice loss and ocean acidification. The court held that NMFS reasonably relied on a 40-year time horizon, from 2010 to 2050, to project negative effects from climate change on the sea ice habitat because it determined the models beyond 2050 were unreliable. The court deferred to NMFS's expertise in upholding NMFS's determination that, based on this time frame, the ribbon seal was not likely to become endangered or in danger of extinction in the foreseeable future because the seal is resilient and adaptable to climate change effects on its habitat. The court concluded that NMFS did not err when it determined that climate models after 2050 were "unreliable" and "too divergent" to use in assessing future threats to the ribbon seal. NMFS determined that the climate models were "too heavily dependent" on estimated greenhouse gas (GHG) emissions from different types of future regulatory controls. These foreseeability cases highlight the courts' willingness to defer to the Services' interpretation of climate modeling data and the foreseeability of climate change effects if the record for the listing decision includes a reasonable explanation for their decision that acknowledges limits or uncertainty in the data. As such, the Services continue to evaluate the foreseeability on a case-by-case basis. Defining "Foreseeable Future" in ESA Regulations In August 2019, the Services finalized revisions to the ESA regulations to define the "foreseeable future" as extending "only so far into the future as the Services can reasonably determine that both the future threats and the species' responses to those threats are likely." Prior to this final rule, neither the ESA nor the implementing regulations defined the term foreseeable future . In the final rule, the Services emphasized that it would continue to evaluate the range of uncertainty and probabilities associated with the best available science and projected data on climate change effects to individual species and their habitat. It is unclear whether these changes will (1) affect how the Services evaluate long-term projections of climate change effects on species, or (2) promote greater uniformity and consistency within and between FWS and NMFS in their listing evaluations. Some stakeholders noted that the final rule merely codified the Services' existing practice in determining the foreseeable future for species. Other stakeholders expressed concerns that this definition of foreseeable future would limit consideration of long-term projected threats from climate change. In their lawsuit challenging the final rule, plaintiffs claim that demanding that both threats and responses to threats be "likely" in the foreseeable future imposes an "increased certainty requirement" that will deny protection under the ESA for species from the future effects of climate change. Scientific Uncertainty in Listing Decisions The legal challenges to the Services' foreseeable future determinations highlight how scientific uncertainty plays a large role in evaluating climate change effects. Similar to the foreseeability cases, courts have faulted the Services for claiming scientific uncertainty without adequate explanation when declining to list a species. This section discusses some examples where stakeholders have challenged FWS's approach to scientific uncertainty in its decisions to not list a species or delist a species under the ESA. To delist a species under the ESA, the Services must determine that none of the five factors considered in listing the species (i.e., destruction or modification of its habitat or range; overutilization for commercial, recreational, scientific, or educational purposes; disease or predation; inadequate existing regulatory protections; and other factors affecting its continued existence) threatens or endangers the species. Delisting determinations must be made "solely on the basis of the best available scientific and commercial information regarding a species' status, without reference to possible economic or other impacts of such determination." Similar to judicial review of listing decisions discussed above, courts have generally deferred to FWS's decisions regarding scientific uncertainty of climate data unless FWS fails to justify why such uncertainty supports its listing decision. For example, in 2011, the Ninth Circuit in Greater Yellowstone Coalition Inc. v. Servheen vacated and remanded FWS's delisting of the Yellowstone grizzly bearÂ ( Ursus arctos horribilis ) as a threatened species, partly because FWS failed to justify why declines in whitebark pineâa primary source of food for grizzliesâdue to climate change were not likely to threaten the Yellowstone grizzly bear population. While acknowledging that courts generally defer to the Services' expertise, the Ninth Circuit refused to defer to FWS's "arbitrary" and unsupported claims of scientific uncertainty regarding the effect that declining food supplies resulting from climate change may have on grizzly bears. Relying on evidence that climate change reduced available whitebark pine seeds, increased grizzly bear mortality, and decreased grizzly bear reproduction, the court concluded that overall declines in the grizzly bear's food source from climate change effects in the Yellowstone region would logically have a "negative effect on its grizzly bear population." In 2018, the Ninth Circuit similarly rejected FWS's decision not to list the Upper Missouri River Valley distinct population segment of Arctic grayling ( Thymallus arcticus ) as endangered or threatened. In Center for Biological Diversity v. Zinke , the court held that FWS acted arbitrarily and capriciously when it failed to explain why the uncertainty of climate change effects on the Arctic grayling supported not listing it. The court faulted FWS for (1) refusing to make any projections with respect to the synergistic effects of climate change "simply because of uncertainty," and (2) disregarding the additive effects of climate change in considering the effects of low stream flows and high water temperatures on the species. Other courts have similarly faulted FWS for requiring a greater level of scientific certainty or evidence than the ESA requires with respect to climate change effects on a species in its listing determination. In Defenders of Wildlife v. Jewell , a federal district court in Montana held that FWS's 2014 decision to withdraw the proposed listing of the North American wolverine ( Gulo gulo luscus ) as threatened was arbitrary and capricious. In reversing its position on the proposed listing, FWS attempted to discredit certain scientific studies on climate change effects that it had relied on previously to propose listing the wolverine as a threatened species. FWS claimed that FWS needed greater certainty and refinement in the climate change data before listing the wolverine. The court concluded that FWS "cannot demand a greater level of scientific certainty than has been achieved in the field to dateâthe 'best scientific data available' . . . standard does not require that the [FWS] act only when it can justify its decision with absolute confidence, and 'the ESA accepts agency decisions in the face of uncertainty.'" After the court decision, in 2016, FWS reopened the public comment period on its previous proposal to list the wolverine as threatened under the ESA. FWS has not made a final listing determination after closing the comment period. Relatedly, courts have faulted FWS for requiring more evidence of climate change effects to delist a species than what is required under the ESA. In 2019, a federal district court in Texas held that FWS had acted arbitrarily and capriciously when it denied a petition to delist the Bone Cave harvestman spider ( Texella reyesi ) as an endangered species. In American Stewards of Liberty v. Department of the Interior , the court concluded that FWS did not deny the petition based on the best available data but instead based its denial on the absence of "admittedly unavailable" evidence of climate change effects on the species and its habitat. The court did not defer to FWS's conclusion that delisting of the spider was not warranted because the petition failed, in part, to include a "trend analysis to indicate that this species can withstand the threats associated with development or climate change over the long term." In its decision denying the petition to delist, FWS claimed that the petitioners did not present enough data to determine if the spider's population will continue to decline from such threats. The court held that FWS "committed clear error" by requiring the petition to present "conclusive evidence about the harvestman's population trendsâmore evidence than the Service admits is available or attainable." The court concluded that the petition met the threshold for a finding that delisting may be warranted and remanded to FWS for further consideration. To date, FWS has not issued a new finding regarding the delisting petition. Although it is not possible to have complete certainty of future climate change effects, these court decisions illustrate that the Services cannot rely solely on scientific uncertainty to make listing or delisting decisions without adequate justification. In the 2019 revised ESA regulations, the Services noted that "the requirement to use the 'best available' data means that we cannot insist that information must be free from all uncertainty, and further agree that the Act's protections should not be withheld until a species' status has declined to the point that the future risk of extinction is certain." Designating Critical Habitat The Services have also considered climate change effects in designating critical habitat. When listing a species as threatened or endangered, the ESA requires the Services to "designate any habitat of such species which is then considered to be critical habitat." As a threshold matter, as made clear by the Supreme Court's 2018 decision in Weyerhauser Co. v. FWS , an area must be "habitat" for a species for the Services to consider whether it is "critical habitat." Under the ESA, the Services may designate two types of habitat as critical habitat: (1) specific areas within the geographical area occupied by the species, which contain the "physical or biological features essential to the conservation of the species" and may require special management protections (occupied habitat); and (2) areas outside the geographical areas occupied by the species if the Secretary determines that such unoccupied areas are "essential for the conservation of the species" (unoccupied habitat). Once an area is designated as critical habitat, federal agencies may not (unless exempted) authorize, fund, or carry out actions that are likely to "result in the destruction or adverse modification" of critical habitat. The Services face unique challenges when designating critical habitat based on modeled habitat shifts for species affected by climate change. The legal challenges to FWS's designation of the polar bear's critical habitat show how a court deferred to the FWS's interpretation of climate change data and models to determine whether unoccupied areas are "essential for the conservation of the species." In a 2016 decision, Alaska Oil & Gas Association v. Jewell , the Ninth Circuit upheld FWS's designation of 187,000 square miles as critical habitat for the polar bear. FWS based its critical habitat designation in part on long-term projections of habitat destruction from climate change. FWS designated three areas on Alaska's coast and in its waters that contain elements essential to the polar bear: a sea ice habitat, a terrestrial denning habitat, and a barrier island habitat. For two of the designated areas, the district court concluded that FWS failed to provide evidence that the two areas included all of the elements required for the survival of the polar bear. The district court asked FWS to establish that polar bears currently use those two areas as habitat. The Ninth Circuit disagreed with the lower court's narrow interpretation of the ESA critical habitat requirements. The court rejected the lower court's finding that the ESA required FWS to limit the critical habitat designation to specific areas that are currently used by polar bears, explaining that "[n]o such limitation to existing use appears in the ESA, and such a narrow construction of critical habitat runs directly counter to the Act's conservation purposes. The Act is concerned with protecting the future of the species, not merely the preservation of existing bears. And it requires use of the best available technology, not perfection." The court concluded that FWS properly relied on climate science and sea ice data in designating habitat that has the elements required to sustain and preserve the polar bear population. Similar to cases regarding foreseeability and scientific uncertainty, the court appeared to defer to FWS's reasoned consideration of climate change effects based on evidence in the record. Revised ESA Critical Habitat Regulations The 2019 final rule clarified when the Secretary may designate unoccupied areas as critical habitat. Under the ESA, unoccupied areas must be essential to the conservation of the species to be critical habitat. Under the revised regulations, to determine if an unoccupied area is essential, the Services must find that the occupied habitat of the species at the time of listing is inadequate to ensure the conservation of the species. The Services must also determine that there is a "reasonable certainty" that the area will (1) contribute to the conservation of the species, and (2) contains one or more of those physical or biological features essential to the conservation of the species. The final rule explains that this revision "better reflects the need for high confidence that an area designated as unoccupied critical habitat will actually contribute to the conservation of the species." How the revised regulations will affect the designation of unoccupied critical habitat will likely depend on the threshold the Services set for "reasonable certainty" that the unoccupied habitat will contribute to the conservation of the species. Some stakeholders are concerned that these changes to the critical habitat regulations may limit the Services' ability to protect species that move because of climate-change-related habitat loss. In the litigation challenging the 2019 final rules, the plaintiffs argue that, by imposing an "elevated certainty requirement" on the Services' determination of what areas are "essential," the new rules would preclude the Services from designating currently unoccupied areas to which species may need to move because of climate change as critical habitat. In contrast, other stakeholders see the regulatory changes as complying with the Supreme Court's decision in Weyerhauser Co. v. FWS that an area must be "habitat" before the Services may consider whether it is "critical habitat." These stakeholders assert that reasonable certainty that an area has at least one of the essential features necessary to conserve the species ensures that the area is habitat for the species. In addition, landowners claim that these changes remove potential regulatory burdens that critical habitat designations cause, such as requirements that, when issuing permits that may adversely affect critical habitat, federal agencies consult with stakeholders. Protecting Endangered or Threatened Species If FWS or NMFS bases its listing decision on climate change effects, FWS or NMFS must also determine whether federal actions that contribute to climate change jeopardize the species under ESA Section 7 or whether an entity that may contribute to climate change is "taking" the species in violation of ESA Section 9. The Services may tailor the Section 9 "take" prohibitions for species listed as threatened under the ESA by using Section 4(d) rules. This section reviews how the Services address climate change effects when protecting listed species under ESA Sections 4(d), 7, and 9. Prohibiting "Take" Under Sections 9 and 4(d) ESA Section 9 prohibitions on "taking" a listed species differ for threatened and endangered species. ESA Section 9(a)(1) prohibits the unauthorized "take" of an endangered species. Take is defined as an act "to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect or to attempt to engage in any such conduct." In contrast, the ESA does not prohibit the taking of a threatened species unless FWS or NMFS decides to extend the Section 9 take prohibitions to the threatened species through a Section 4(d) rule. For threatened species, ESA Section 4(d) requires FWS or NMFS to issue regulations it "deems necessary and advisable to provide for the conservation of such species." In 1978, FWS issued a "blanket 4(d) rule" that extends most of the Section 9 take prohibitions to all threatened species listed by FWS, unless it adopts a specific rule for a particular species. As discussed below, the 2019 revisions to the ESA regulations rescinded FWS's blanket 4(d) rule for newly listed or reclassified species, aligning it with NMFS's practice of issuing species-specific 4(d) rules for threatened species. Climate Change and Section 4(d) Rules for Threatened Species A frequent debate among legal scholars and stakeholders is whether the take prohibitions should extend to GHG-emitting activities that contribute to climate change. Stakeholders seeking greater protection for species argue that sources of GHG emissions cause an unlawful "take" under ESA Section 9 because GHG emissions contribute to climate change, which harms the species. However, the Services and critics of this approach assert that the Section 9 take prohibitions can apply only if GHG-emitting activity directly and intentionally takes the species or negatively affects its habitat. In the litigation challenging the polar bear's 4(d) rule, the federal court's decision highlighted the challenges in applying the take prohibitions to GHG-emitting activities. Plaintiffs challenged FWS's 4(d) rule that specified prohibitions necessary to conserve the threatened polar bear species. The rule, among other things, did not prohibit activities outside the species' current range that may incidentally affect polar bears, such as GHG-emitting activities that may contribute to the loss of sea ice habitat. Plaintiffs claimed that the rule was arbitrary and capricious and violated the ESA by failing to address threats to the polar bear from GHG emissions and the loss of potential sea ice habitat outside the polar bears' range. In rejecting this argument, the court concluded FWS had a rational basis not to extend the ESA's take prohibitions because there was insufficient evidence to suggest that regulating offsite GHG-producing activities would produce direct conservation benefits to the polar bear. FWS explained that the best available science and climate modeling could not identify an individual GHG emission source as the cause of a specific adverse effect on the polar bear or its habitat. The court acknowledged that it cannot "decide based upon its own independent assessment" "whether the ESA is an effective or appropriate tool to address the threat of climate change . . . . The answer to that question will ultimately be grounded in science and policy determinations that are beyond the purview of this Court." Based on this judicial opinion, it seems unlikely that the Services will use Section 4(d) rules to prohibit GHG-emitting activities without further advances in science that can establish a causal connection between the individual GHG emission source and the specific adverse effect on the species or its habitat. Rescinding FWS's Blanket 4(d) Rule In 2019, FWS rescinded the "blanket 4(d) rule" for newly listed or reclassified threatened species, and will now adopt species-specific 4(d) rules. Because the rescission applies prospectively, the blanket 4(d) rule continues to prohibit the take of threatened species covered by the blanket 4(d) rule that FWS listed prior to the effective date of the rescission. This species-specific approach aligns with NMFS's practice of establishing specific 4(d) rules for each threatened species. How the rescission of FWS's blanket 4(d) rule may affect the protection of species threatened by climate change effects depends on its implementation. While some stakeholders are concerned that the rescission will "weaken" protections for threatened species because of delays in issuing species-specific 4(d) rules, it may have little effect on whether GHG-emitting activities are prohibited. FWS has not adopted a 4(d) rule that prohibited GHG-emitting activities that could affect threatened species and their habitats, prohibiting only actions that directly and intentionally take threatened species. For threatened species affected by climate change, legal scholars argue that such "limited" 4(d) rules have "no real effect on the activities that are causing climate change, the acknowledged primary factor contributing to [the] species' decline." Section 7 Consultation Some stakeholders and legal scholars view the ESA Section 7 consultation requirement as a potentially powerful tool to limit GHG-emitting activities that may further jeopardize threatened or endangered species that were listed, at least in part, because of climate change effects. In practice, the Services and the courts have acknowledged that climate change should be considered during the consultation process. However, the courts have not required the Services to curb activities that may contribute to climate change to protect threatened or endangered species. In general, ESA Section 7 requires federal agencies to "insure that any action authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [the critical] habitat of such species." A federal agency planning any action must consult with NMFS or FWS if the federal agency determines that its action "may" jeopardize a listed species or adversely affect its habitat. The ESA and its implementing regulations specify the types of consultation (e.g., informal versus formal consultation), when each type of consultation is required, and the procedures the agency proposing the action and the Services must follow. After the consultation with an agency, the Services must issue a biological opinion (BiOp) based on "the best scientific and commercial data available" that determines whether the proposed action is likely to jeopardize the ESA-listed species or adversely modify critical habitat. If the Services determine that an agency action would likely jeopardize the listed species or its critical habitat, the agency must terminate the action, implement a Service-proposed alternative action, or seek an exemption. If the agency action is not likely to jeopardize the continued existence of the species but is nonetheless likely to result in some "incidental take" of the species, the BiOp must set forth an incidental take statement, which specifies the permissible "amount or extent" of this effect on the species. Various court decisions have faulted the Services for failing to discuss climate change effects when assessing whether federal action will jeopardize a listed species or adversely modify its habitat. In the 2007 decision, Natural Resources Defense Council v. Kempthorne , a federal district court in California held that FWS acted arbitrarily and capriciously when analyzing potential effects on the threatened delta smelt (Hypomesus transpacificus) from a large water diversion project. The court determined that the "absence of any discussion in the BiOp of how to deal with any climate change is a failure to analyze a potentially 'important aspect of the problem.'" In rejecting FWS's claim that the climate change studies did not merit analysis because they were inconclusive, the court concluded that without any meaningful discussion in the BiOp, it was "impossible" for the court to determine whether the climate studies were "rationally discounted because of [their] inconclusive nature, or arbitrarily ignored." Similarly, plaintiffs successfully challenged NMFS's BiOp that concluded that changes to a fish hatchery operation were not likely to jeopardize the species or adversely affect critical habitat for the Upper Columbia River spring Chinook salmon ( Oncorynchus tshawytscha ) or steelhead ( Oncorhynchus mykiss ). A federal district court in Washington ruled that NMFS's BiOp was arbitrary and capricious because it failed to analyze adequately climate change effects from the hatchery's modified operations and water use. The court explained that "[t]he best available science indicates that climate change will affect stream flow and water conditions throughout the Northwest" and that the lack of a model or study specifically addressing local climate change effects did not permit NMFS to ignore this factor. The court found that NMFS had included "no discussion whatsoever" of the potential effects of climate change on the hatchery's future operations and water use, and that it was not sufficient for NMFS to say that the local area at issue was less prone to climate change effects than other areas in the region. When the Services have discussed climate change effects from federal actions, some courts have scrutinized the Services' rationale in dismissing such effects when issuing a "no jeopardy" BiOp. For example, the Ninth Circuit 2017 majority opinion in Turtle Island Restoration Network v. Department of Commerce examined NMFS's BiOp that concluded that a fishery expansion would neither jeopardize the continued existence of the endangered loggerhead sea turtle ( Caretta caretta ) nor the endangered leatherback sea turtle ( Dermochelys coriacea ). For the loggerhead sea turtles, the court ruled that NMFS had acted arbitrarily and capriciously by failing to incorporate into its jeopardy analysis climate-model data that predicted that the fishery expansion would "exacerbate" loggerhead population decline due to climate change. In contrast, for the leatherback sea turtles, the majority upheld NMFS's no-jeopardy conclusion, rejecting the plaintiffs' argument that NMFS erred by limiting the "temporal scale" of its analysis to 25 years despite NMFS's determination that rising temperatures from climate change would have effects on leatherback sea turtles over the next century. Because NMFS's BiOp considered and concluded that it could not credibly predict climate change effects on the leatherback turtles, the majority held that NMFS adequately considered the climate change effects in its no-jeopardy conclusion. Despite some success challenging BiOps, neither the courts nor the Services have found that climate change effects from a proposed federal action jeopardize the species or adversely modify its habitat. Some stakeholders and legal scholars argue that when a proposed federal action contributes to climate change that may jeopardize the species or adversely modify its habitat, the agency is required to consult with the Services. If the Services determine that such actions jeopardize the species or its habitat, these stakeholders assert that the Services should use Section 7 consultation authority to limit or modify the GHG emissions from the proposed federal action. However, the Department of the Interior issued a Solicitor's Opinion explaining that Section 7 consultation is not required if no causal connection exists among the proposed federal action, a reasonably certain climate change effect, and the listed species. Therefore, without evidence of a causal connection between the proposed action and climate change effects, Section 7 consultation will not be triggered, foreclosing any opportunity for the Services to consider mitigating the climate change effects from such actions. Federal agencies and the Services have continued to use this policy to comply with their Section 7 consultation obligations. Revising Section 7 Consultation Regulations The 2019 ESA regulation revisions codified the Services' existing Section 7 climate change policy. Existing ESA Section 7 regulations require the federal agency proposing the action and the Services to evaluate the status of the listed species or critical habitat, the "effects of the action," and cumulative effects. Prior to the 2019 revisions, ESA regulations defined "effects of the action" to include both direct and indirect effects of a proposed federal action on the species or critical habitat. The 2019 ESA rule revised the definition of "effects of the action" to include all consequences to listed species or critical habitat that are caused by the proposed action. The definition specified that a consequence is "caused by the proposed action if it would not occur but for the proposed action and it is reasonably certain to occur." The Services provided a two-part test to identify a consequence: (1) whether the effect or activity would not occur but for the action and (2) whether the effect or activity is reasonably certain to result from the action. The preamble explains that "if the agency fails to take the proposed action, and the activity would still occur, there is not 'but for' causation." Some stakeholders support the revisions to the Section 7 consultation requirements, asserting that the changes will "help decrease the resources needed for federal agencies and applicants to describe the effects of their actions to listed species or critical habitat when engaged in section 7 consultation." Other stakeholders contend that the proposed changes will "unreasonably narrow" and "bar" Section 7 consultation when climate change effects do not affect immediately the geographic area of the project. Potential Implications When the ESA was enacted in 1973, Congress did not consider climate change as a significant factor in conserving endangered species. Although the Services and the courts have acknowledged that actions taken under the ESA must consider climate change effects on species and their habitats, the debate continues on whether the ESA can adequately protect and conserve species threatened by climate change effects. Stakeholders disagree on what role the ESA should play in addressing climate change, with some arguing that the ESA is not equipped to mitigate climate change effects. Other stakeholders believe that the Services can and should wield the ESA to protect species threatened by climate change and to curb activities contributing to climate change. Generally, legal scholars agree that litigation has influenced how the Services factor climate change effects into ESA decisions. Legal challenges have helped to ensure that the Services consider projected climate change effects on species in their ESA decisions. In light of the judicial deference afforded to the Services, the courts have not expanded the ESA as a tool to protect listed species by regulating activities that contribute to climate change. From the Services' viewpoint, the best available scientific and commercial data have been insufficient to determine that GHG emissions from a proposed activity cause detrimental effects on the species or its habitat. However, as climate modeling and technology advance, the Services may be able to predict the causes and effects from climate change on species with greater scientific certainty and data. Members of Congress may be interested in the implications of revising the ESA to clarify its treatment of climate change effects. Legislation could clarify whether ESA Section 9 prohibitions or Section 7 consultation requirements apply to indirect harms that contribute to climate changes that may affect a species' survival, or how the Services should address scientific uncertainty associated with projected climate change effects when making listing determinations. As legislative proposals continue to develop, legal battles over the how the Services interpret climate change effects in their ESA decisions will likely continue.


F-35 Modernization, Reliability, and Sustainment and Supply Chain Efforts Face Risks and Challenges The F-35 plays a key role in DOD’s modernization efforts. However, it faces concerns in several areas that will inform the program’s cost and performance in the future. These include the risk in its modernization efforts, its aircraft not meeting all reliability targets, and sustainment and supply chain challenges. Specifically, the F-35 program plans to award Block 4 development contracts before it has key business case documents that would normally inform this decision. Also, the program is not meeting all of its Reliability and Maintainability (R&M) targets. Finally, the F-35 program’s sustainment costs are rising as it also faces significant supply chain challenges. The F-35 Program Will Start Block 4 Development without a Full Business Case The F-35 baseline aircraft program completed development in April 2018. It started formal operational testing of the baseline aircraft in December 2018 after a 3-month delay. This testing was delayed for two main reasons: (1) to resolve critical deficiencies identified in developmental testing, and (2) to accommodate an unexpected grounding following the crash of an F-35B in September 2018. According to a test official, the program expects to complete testing in December 2019, about 3 months later than planned due to delays with the simulator that is used for more complex testing. Until that testing is complete, there is still a risk that additional deficiencies may be identified. With the program wrapping up development of the baseline program, it is transitioning to early development and testing activities for the Block 4 modernization efforts, which the F-35 Joint Program Office estimates will cost about $10.5 billion. With Block 4, DOD plans to add new capabilities and modernize the F-35 aircraft to address evolving threats. In April 2019, we found that DOD will not have a complete business case for Block 4 before it plans to award development contracts in 2019. Section 224 of the National Defense Authorization Act for Fiscal Year 2017 required DOD to submit a report containing certain elements of an acquisition program baseline—in essence, a business case—to include cost, schedule, and performance information and independent estimates—for Block 4. In 2018, we found that DOD’s report to Congress was incomplete. In its report, DOD stated that the acquisition program baseline would continue to be refined over the next year. DOD officials stated that the updated F-35 program baseline, with the Block 4 efforts included, will be released in April 2019. Over the past year, the program has already invested over $1.4 billion, in part to gain the knowledge it needs to develop that business case, such as a preliminary design review, as well as to establish Block 4 testing facilities and support early capabilities’ development. The program incorporated some Block 4 activities into its acquisition strategy, which was approved in October 2018. However, we found that three key Block 4 business case documents will not be ready before the program’s planned development contract awards in May 2019: Independent Technology Readiness Assessment: A Technology Readiness Assessment is a systematic, evidence-based process that evaluates the maturity of hardware and software technologies critical to the performance of a larger system or the fulfillment of the key objectives of an acquisition program. The program office plans to conduct a partial independent assessment of initial capabilities sometime between October and December 2019 with additional assessments to follow. A program official stated that technologies will not be integrated into the aircraft until they are adequately mature. However, without a complete independent Technology Readiness Assessment, the program will not have identified potential critical technology elements and, as a result, may be at risk of delaying the delivery of new capabilities. Test and Evaluation Master Plan: Although the F-35 program has begun testing Block 4 capabilities, it does not have an approved Test and Evaluation Master Plan. The Test and Evaluation Master Plan documents the overall structure, strategy, and objectives, as well as the associated resources needed for execution. Developmental and operational test officials have expressed concerns about the lack of an approved test plan, uncertain funding, the number of test aircraft available, and the draft test schedule, among other things. An approved, properly resourced test plan is essential for planning and preparing for adequate testing of the Block 4 capabilities. According to these officials, without an approved plan, the F-35 program is providing the test authorities with capabilities to be tested without giving them the necessary direction on how to adequately prepare to conduct the tests, making it difficult to execute testing. While this is still a concern, F-35 program officials explained that over the past 3 months they have been providing the test authorities with the direction needed to conduct testing. Independent Cost Estimate: The Block 4 Independent Cost Estimate, which details the program’s total estimated life cycle cost, is not complete. In August 2017, we reported that DOD estimated the development funding needed for the first phase of Block 4 was projected to be over $3.9 billion through 2022. Since then, the program incorporated more fidelity and specific Block 4 efforts that were not in the original estimate into its Block 4 cost estimate. Based on the program office’s latest estimate, the cost of Block 4 capabilities is expected to be $10.5 billion through 2024. According to OSD’s Cost Assessment and Program Evaluation office, it will provide the Independent Cost Estimate between October and December 2019 to support the F-35 program’s pending full-rate production decision, but this would occur several months after the program plans to award the Block 4 development contracts. According to the GAO Cost Guide, an Independent Cost Estimate is considered one of the best and most reliable estimate validation methods as it provides an independent view of expected program costs that tests the program office’s estimate for reasonableness. Without an Independent Cost Estimate, Congress does not have insight into the full potential cost of Block 4. The expected completion dates for these documents are between October and December 2019, at the earliest. Figure 1 shows key Block 4 dates such as the Block 4 re-plan, which included revising the cost estimate for Block 4 that DOD established in 2017, the planned development contract awards, and planned completion dates for the three remaining critical business case documents. As seen in figure 1, the program office plans to award Block 4 development contracts in May 2019, at least five months before any of the critical business case documents will be available. Based on best practices identified by GAO, without an independent Technology Readiness Assessment, Test and Evaluation Master Plan, or an Independent Cost Estimate, program officials cannot have a high level of confidence that the requirements are firm and that risk has been adequately reduced before beginning efforts estimated to cost $10.5 billion in funding to develop Block 4. If program officials move ahead with Block 4 contracts without gaining the knowledge that a full business case would provide, Block 4 modernization efforts will be at risk of experiencing the same kind of cost and schedule growth the baseline development program experienced. To address this risk, in April 2019, we recommended to the DOD that it should ensure the F-35 program office complete its business case, to include the three documents discussed above, at least for the initial Block 4 capabilities under development before initiating additional development work. DOD did not concur with this recommendation. In its comments, DOD stated that the F-35 program office has adequate knowledge to begin Block 4 development. We maintain, however, that completing its business case before awarding its Block 4 development contracts would put DOD and the program in a better position to effectively and successfully develop Block 4 capabilities. The F-35 Program Is Still Not Meeting All Reliability and Maintainability Targets As we reported in April 2019, the program has made slow, consistent progress in improving the F-35’s R&M metrics’ performance but half of the metrics are not achieving targets. All F-35 variants are generally performing near or above targets for four of the eight R&M metrics, while still falling short for the other four. Each F-35 aircraft variant is measured against eight R&M metrics, four of which are in part of the contract. All eight R&M metrics are described in the program’s Operational Requirements Document (ORD)—the document that outlines the targeted performance levels for these metrics that DOD and the military services agreed the F-35 should meet in 2000. Based on our analysis, while the program is on track to meet half of the targets, the program office has not taken adequate steps to ensure the others will be met. Additionally, in December 2018, the Director, Operational Test & Evaluation reported that, although performance for the four under-performing metrics has shown slow growth over the years, none of these metrics are meeting interim goals needed to reach requirements at each variant’s maturity. Each F-35 variants’ R&M performance against these metrics is shown in table 1. Since the program began tracking R&M performance in 2009, it has seen small, annual improvements. Over the past year, all variants showed a slight improvement in targeted performance levels for one metric, the mean flight hours between failure—design controlled, but saw little or no discernable improvement for the four metrics not meeting targets. However, based on current performance, the program does not expect to meet those targets by full aircraft maturity. According to F-35 program officials, the ORD R&M metrics should be re-evaluated to determine more realistic R&M performance metrics, but the program has not yet taken actions to do so. Until the program office does so, it remains accountable for ensuring those ORD R&M metrics are achieved. In June 2018, we recommended that the F-35 program identify steps it needs to take to ensure the F-35 aircraft meet R&M requirements before each variant reaches maturity and update its R&M Improvement Program (RMIP)—DOD’s action plan for improving R&M—with these steps. DOD concurred with our recommendation but has yet to take substantive actions to address it. DOD did, however, complete 16 improvement projects since we last reported on this. Despite completing these projects, there were not significant gains in the R&M metrics not meeting targets. Program officials advised, however, that measurable improvements in R&M can take time to manifest. To speed this process, the program is accelerating planned upgrades to older aircraft where appropriate, which officials stated should translate to an overall improvement in the program’s R&M performance. The F-35 Program Office’s Improvement Plan Does Not Address Under- Performing Targets The F-35 program office has estimated that implementing all of the identified improvement projects currently contained in its RMIP could result in potential life cycle cost savings of over $9.2 billion by improving the F-35’s R&M. However, we found that, as of December 2018, the guidance the F-35 program office has used to implement the RMIP does not define specific, measurable objectives for what the desired goals for the F-35’s R&M performance should be or align improvement projects with R&M goals. Furthermore, the RMIP has not been a funding priority. Federal internal control standards state that programs should define objectives when implementing programs such as the RMIP. Although the F-35 program RMIP’s guidance has a general goal of improving R&M, it does not identify achieving the eight R&M targets listed in the ORD as an objective. Program officials acknowledged that the RMIP’s guidance does not include such an objective. Instead, officials stated they are using the RMIP to prioritize and fund projects that will improve aircraft availability and mission capability—neither of which are included in the eight R&M metrics, but are necessary and important initiatives. The program is focusing on these two areas in part because a September 2018 memorandum from the Secretary of Defense to the Secretaries of the military departments included a goal for the F-35 fleet to attain a mission capable rate of 80 percent by the end of fiscal year 2019. According to program officials, improving these two areas will translate into improvements in the F-35 overall R&M. However, we found that the RMIP’s guidance does not discuss these priorities or align how any improvement projects would ensure targets under all eight R&M targets will be met. In our prior work on weapon system acquisitions, we have identified a number of best practices for improving program outcomes if implemented, such as clearly establishing well-defined requirements and securing stable funding that matches resources to requirements. We found that the program office has not prioritized or dedicated funding in its budget to improve R&M, in part because program officials explained that they were focused on initiatives intended to lower the cost of the aircraft. In addition, any current funding for R&M improvement projects comes from the program’s operation and maintenance funds, which are only available for one fiscal year. Officials explained that, if the funding runs out or is used by the program for other efforts, then R&M projects will go unfunded or be suspended until new funding is available. In fiscal year 2018, for example, while some projects were completed, several other projects were suspended when that year’s funding ran out. As of December 2018, according to a contractor representative, all of the identified improvement projects currently unfunded in the program’s RMIP would cost about $30 million to implement, but were not funded. Program officials also stated that they are in the process of revising the RMIP and have considered including more specific objectives in addition to improving aircraft availability and mission capability, such as more focus on improving R&M performance where ORD R&M targets are not currently being met. According to the program, any revisions to the RMIP and changes to how it will be funded, however, will not be complete until April 2019. By not defining objectives in its RMIP guidance for meeting all eight R&M metrics, aligning which improvement projects will ensure those metrics are met, and prioritizing funding for those projects, the program is at risk of not fully meeting its R&M targets. As a result, the warfighter may accept aircraft that are less reliable than originally planned, and whose operation and sustainment costs may raise affordability questions. In addition, the military services recently identified the need to cut sustainment costs—by 43 percent in the case of the Air Force—to improve the F-35’s affordability in sustainment. Increasing costs from less reliable aircraft will add strain to an already unaffordable program. To address these issues, in April 2019, we recommended to DOD that it should ensure that the F-35 program office 1. assess whether the ORD R&M targets are still feasible and revise the 2. as it revises its RMIP, identify specific and measurable R&M objectives in its RMIP guidance; 3. as it revises its RMIP, identify and document which RMIP projects will achieve the identified objectives of the RMIP guidance; and 4. prioritize funding for the RMIP. DOD concurred with these recommendations and stated that it will take actions to address them. Continued Concerns with F-35 Sustainment Costs and Supply Chain, and Logistics System We have previously reported on the F-35 program’s rising estimated sustainment costs and challenges maintaining an expanding fleet. In October 2017, we reported that estimated F-35 life-cycle sustainment costs increased by 24 percent from fiscal years 2012 through 2016 due to an increase in projected flying hours and other factors. We also reported that sustainment costs were not fully transparent to the military services. For example, the Marine Corps received an initial funding requirement for fiscal year 2017 sustainment of $293 million, which then increased to $364 million in the execution without a full explanation from the program office. We recommended that DOD take steps to improve communication with the services and provide more information about how F-35 sustainment costs they are being charged relate to the capabilities received. DOD concurred with the recommendation and has begun taking actions to address it. In addition, DOD faces substantial supply chain challenges that are lowering F-35 aircraft performance. In April 2019, we reported that F-35 aircraft performance was falling short of warfighter requirements—that is, aircraft could not perform as many missions or fly as often as required. Specifically, F-35A aircraft were mission capable only 52 percent of the time from May through November 2018—far short of the 80 percent target set by the former Secretary of Defense. This lower-than-desired aircraft performance is due largely to F-35 spare parts shortages and limited part repair capabilities. For example, during this time period, F-35 aircraft were unable to fly about 30 percent of the time due to spare parts shortages. Additionally, DOD’s capabilities to repair F-35 spare parts at its depots are years behind schedule, which has resulted in an average of 188 days to repair an F-35 part and a backlog of about 4,300 spare parts awaiting repair at military depots or manufacturers. We also reported that DOD faces challenges managing, moving and maintaining accountability of F- 35 parts within the supply chain. We made eight recommendations to DOD, including that DOD determine what actions are needed to close the gap between warfighter requirements for aircraft performance and F-35 supply chain capabilities. DOD concurred with the recommendations and identified actions that it was taking or planned in response. Finally, the F-35’s Autonomic Logistics Information System (ALIS) has the potential to lead to increased costs for the program if key issues are not addressed. ALIS is the F-35’s central logistics system intended to support operations, mission planning, supply-chain management, maintenance, and other processes. In April 2016, we identified several risks, including that ALIS (1) was not initially designed to be deployable, (2) lacked redundant infrastructure, (3) did not communicate well with legacy aircraft systems, (4) had data accuracy and accessibility issues, and (5) had security risks. In addition, DOD had not included certain analyses and information, such as historical cost data, to increase the credibility and accuracy of ALIS’s estimated costs. Further, a 2013 DOD-commissioned study found that schedule slippage and functionality problems with ALIS could lead to between $20 billion and $100 billion in additional costs. We have made several recommendations to DOD to improve ALIS planning and cost estimates, and to develop a performance measurement process for ALIS to better address problems based on actual system performance and user requirements. DOD generally concurred with our recommendations and has taken some actions, including developing a plan that identifies and prioritizes key ALIS risks. However, more work remains. We are currently conducting a review examining DOD’s progress in implementing our ALIS-related recommendations, addressing concerns from ALIS users, identifying emergent financial and operational risks associated with ALIS, taking near-term actions to improve ALIS functionality, and assessing DOD’s actions regarding the long-term viability of ALIS to ensure capable sustainment of the F-35 fleet. We plan to issue a report based on our current work later in 2019. Air Force’s Advanced Battle Management System Acquisition Strategy Is in the Early Planning Stages Based on our ongoing work, ABMS is early in the acquisition process, as the specific capabilities and overarching acquisition strategy are still to be determined by the Air Force. As a result, the Air Force has not yet established a cost and technical baseline for ABMS. When ABMS planning began in 2017, program officials stated that the intent of the program was to replace and modernize the capabilities of the AWACS system—which provides the warfighter with the capability to detect, identify, and track airborne and maritime threats. But changes in Air Force expectations for how it would fight during future conflicts led the department to assess options for developing a more robust and survivable air, land, and sea battle management system that can operate in contested environments. In July 2018, the ABMS Initial Capabilities Document—which describes capability needs and associated gaps—was approved by the DOD Joint Requirements Oversight Council. Our ongoing work also found that, in December 2018, the Air Force determined it would not continue its planned JSTARS Recapitalization program—which was intended to provide surveillance and information on moving ground targets—well into the future, as initially expected. As a result of a recent study, the Air Force has extended the estimated service life of the JSTARS fleet, and will incorporate its capabilities into the ABMS in the short term, and retire JSTARS in the 2030s. Our preliminary observations indicate that the details about ABMS are still to be determined. The Air Force expects to fully define ABMS through an Analysis of Alternatives (AOA) that it plans to complete by the summer of 2019, as shown in figure 2. The ABMS AOA, led by the Air Force’s Air Combat Command, will assess how ABMS will deliver air-centric capabilities, such as those currently provided by AWACS. Air Force officials explained that they plan to utilize an existing AOA completed for the JSTARS Recapitalization program, approved in May 2012, to identify and assess ABMS’s potential ground target tracking capabilities. Originally planned as a 9-month study, Air Force officials stated that the ABMS AOA was shortened to a 6-month effort. As a result, the Air Force received conditional approval to reduce the number of alternatives studied from five to three. Our ongoing work indicates that the Air Force plans to develop ABMS over three phases. The first phase began in fiscal year 2018 and goes through 2023. In this phase, the Air Force plans to integrate existing sensors, improve battle management systems, and upgrade communication networks across 10 existing acquisition programs. Table 2 includes information on three existing programs the Air Force plans to enhance during the first phase of ABMS. According to an Air Force acquisition official, the technologies associated with the first phase are considered to be mature but there may be risks as the Air Force integrates technologies. Air Force officials explained that their approaches to the second and third phases of ABMS are not fully developed, but noted that the phases would be informed by the AOA results. That said, the Air Force expects to start phase 2 in 2024 by integrating advanced sensors and software into its existing battle management command and control platforms while at the same time retiring JSTARS. Air Force officials have reported that the third phase, planned for the mid-2030s, is expected to provide multi-sensor, resilient battle management command and control capability using multiple types of communications methods, with an initial operational capability planned for 2035. The Air Force estimates that ABMS’s acquisition cost through fiscal year 2024 will be $3.8 billion. Because ABMS is composed of many different defense acquisition programs, the Air Force intends to manage it as a family of systems directed by a Chief Architect and not a traditional acquisition program manager. According to the Air Force, the ABMS Chief Architect is the first of its kind, and the Air Force believes the position will be instrumental in integrating the various programs and technologies into an overall system. Based on our preliminary analysis, the roles and responsibilities of the Chief Architect have not been fully defined. However, according to the Air Force, the Chief Architect is expected to be responsible for (1) leading a high-level analysis and determining the overall design of ABMS, (2) coordinating with the service-level commands and the acquisition programs involved to make sure they are aligned with the ABMS development, and (3) identifying the enabling technologies for integration into ABMS. Chairman Norcross, Ranking Member Hartzler, and members of the Subcommittee, this completes my prepared statement. I would be pleased to respond to any questions you may have. We look forward to continuing to work with the Congress as we to continue to monitor and report on the progress of the F-35 program and the ABMS. GAO Contact and Staff Acknowledgments If you or your staff have any questions about this testimony, please contact Michael J. Sullivan at (202) 512-4841 or sullivanm@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this statement. Individuals making key contributions to this statement are Justin Jaynes (Assistant Director), Diana Maurer, Jennifer Baker, Desirée E. Cunningham, Alissa Czyz, Stephanie Gustafson, Kasea Hamar, Jeff Hubbard, Jessica Karnis, Matt Metz, Robin Wilson, and Lauren Wright. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.


FEMA Experienced Challenges in Planning, Coordinating with Stakeholders, and Tracking the Use of Contracts Challenges in Acquisition and Workforce Planning Ensuring that there is adequate time to complete acquisition planning activities and identifying the contracting workforce required to execute mission needs can help agencies establish a strong foundation for successful acquisition outcomes. However, our prior work identified challenges FEMA faced in its acquisition and workforce planning efforts for disaster contracting. The Federal Acquisition Regulation (FAR) requires agencies to perform acquisition planning activities for all acquisitions to ensure that the government meets its needs in the most effective, economical, and timely manner possible. In our December 2018 report, we found that FEMA had guidance in place establishing timeframes for certain FEMA acquisitions following the completion of the acquisition package. Further, FEMA implemented an acquisition tracking tool in 2016—the 5-Year Master Acquisition Planning Schedule (MAPS)— which monitors the status of and provides acquisition planning timeframes for certain high value and mission-critical acquisitions, including advance contracts, regardless of dollar value. However, we found that FEMA had not established timeframes or released guidance for the pre-solicitation phase of the acquisition planning process, when program officials identify a need and develop key acquisition package documents (see figure 1). Not adhering to suggested timeframes can place a burden on contracting officers and increase the likelihood of not awarding a contract on schedule. This, in turn, may create a need for FEMA to non-competitively extend the existing contract—this extension may be considered a bridge contract. Given the lack of a government-wide definition, we defined bridge contracts in our prior work as: extensions to an existing contract beyond its period of performance (including base and options) and new, short-term contracts awarded on a sole-source basis to an incumbent contractor to avoid a lapse in service caused by a delay in awarding a follow-on contract. FEMA officials acknowledged that the use of non- competitive bridge contracts is not an ideal practice as they cannot ensure the government is paying what it should for goods and services. However, in December 2018, we found that FEMA used bridge contracts for at least 10 of its advance contracts used in response to the 2017 disasters—with some of these contracts lasting for several years. To decrease dependence on bridge contracts, FEMA established MAPS to help track and monitor the status of acquisition planning timeframes for certain acquisitions. However, most of the program office and contracting officials we spoke with during our December 2018 review had limited familiarity with the tool. In our December 2018 report, we recommended that FEMA update and implement existing guidance to identify acquisition planning timeframes and considerations across the entire acquisition planning process and clearly communicate the purpose and use of its acquisition planning tool to relevant personnel. DHS concurred, but in its response to our report stated it believed existing outreach and training on MAPS had resolved these challenges. We acknowledged FEMA’s training in our report, but noted that not all relevant staff we spoke with were familiar with MAPS, and that there was no formal guidance on the timeframes for the entirety of the acquisition planning process. Given these issues, we continue to believe FEMA needs to take additional steps to implement our recommendation. Without planning and guidance on its use of advance contracts, FEMA lacks reasonable assurance that it is maximizing their use to the extent practicable and cost-effective to quickly provide goods and services following a disaster. PKEMRA requires the FEMA Administrator to develop a contracting strategy that maximizes the use of advance contracts to the extent practical and cost effective, and FEMA contracting officials told us that advance contracts should be used before awarding new contracts. However, in December 2018, we found that FEMA’s advance contract strategy and guidance did not clearly identify the objectives of advance contracts or whether and how they should be prioritized for use in relation to new post-disaster contracts. For example, we reported that FEMA’s lack of an updated strategy and guidance contributed to confusion and challenges with the use of advance contracts for tarps, used to cover small areas of roof damage. Although FEMA had awarded advance contracts to provide tarps, a subsequent modification to these contracts limited the ability to use them for immediate disaster response needs—one of FEMA’s stated purposes. Furthermore, we found that FEMA awarded vendors new post-disaster contracts for tarps before using its existing advance contracts. According to FEMA officials at that time, neither of the post-disaster contract vendors was able to provide the required tarps when needed. We concluded that the timing and use of the existing tarp advance contracts raised questions about the ability of contracting officers to use these contracts to provide tarps immediately following disasters. Additionally, we concluded that an updated advance contracting strategy could have enabled FEMA to more quickly provide the needed tarps to survivors, considering the additional time and staff resources needed to award new post-disaster contracts. In our December 2018 report, we recommended that FEMA update its strategy to clearly define the objectives of advance contracts, how they contribute to FEMA’s disaster response operations, and whether and how they should be prioritized in relation to making new, post-disaster contract awards. We also recommended FEMA update its guidance accordingly. DHS concurred with these two recommendations and identified actions it plans to take to address them. Our prior work also showed that FEMA’s ability to adequately plan for and manage its disaster contracts is further complicated by persistent acquisition workforce challenges, including attrition and staffing shortages. In April 2019, we found that FEMA had identified workforce shortages as a continuing challenge for disaster response and recovery. But FEMA had not assessed its contracting workforce—including regional contracting workforce needs—since at least 2014. We recommended FEMA assess its workforce needs to address these shortcomings and develop a plan, including timelines. DHS agreed, identified steps FEMA has taken and plans to take to address the recommendation, and estimated addressing the recommendation by September 2019. Continued Challenges Coordinating with Federal, State, and Local Partners on Contracting Issues Our prior reports found that FEMA experienced challenges coordinating with state, local, and federal partners over disaster preparation and response efforts. Coordination is critical to ensuring that states and localities have their own tools in place to facilitate disaster response, and that contracting needs are clearly communicated and considered among federal agencies. Yet FEMA faced continued challenges and inconsistencies in its coordination with states and localities over the use of advance contracts. In January 2017, FEMA updated guidance to include requirements for coordination with state and local governments on the use of federal advance contracts. This update was in response to our September 2015 finding that there were inconsistencies in whether and how staff in FEMA’s regional offices performed state and local outreach on advance contracting efforts. However, in December 2018, we reported on similar inconsistencies in state and local outreach. We found that FEMA’s guidance did not specify how often or what types of advance contract information should be shared with states and localities, or instruct FEMA contracting officers to encourage states and localities to establish their own advance contracts for the types of goods and services needed during a disaster. As a result, we found that while some FEMA regional officials regularly performed outreach with states and localities to assist them with establishing advance contracts for goods and services commonly needed during a disaster—like security, transportation, and office supplies—other FEMA regional officials did so less frequently. According to regional officials, coordinating more frequently with states and localities allows them to avoid overlap between state and federal contracting efforts, and helps FEMA officials know what resources the states have in place before a disaster occurs and how long states are capable of providing those resources following a disaster. We recommended in our December 2018 report that FEMA update its guidance to provide specific direction for contracting officers to perform outreach to states and localities on the use and establishment of advance contracts. DHS concurred and stated it would update guidance and continue efforts to establish resources for state and local governments on advance contracts. Information on FEMA’s advance contracts can be used to facilitate state and local coordination over the use and establishment of advance contracts. However, our work showed that this information was inconsistent and could further hinder FEMA’s information sharing and coordination efforts. In December 2018, we reviewed FEMA’s advance contract list and other resources FEMA contracting officials said they used to identify advance contracts—like biannual training documentation—and found differences in the advance contracts identified. For example, we reported that FEMA officials told us that the advance contract list available to contracting officers is updated on a monthly basis. However, our analysis found that 58 advance contracts identified on the June 2018 advance contract list had not been included in contracting officers’ May 2018 training documentation. The missing contracts included those for telecommunications services, generators, and manufactured housing units. Recognizing some of the shortcomings in communicating with state and local governments following the 2017 disasters, FEMA stated it would develop a toolkit to provide states and localities with recommendations for advance contracts, emergency acquisition guidance, and solicitation templates. However, at the time of our December 2018 review, FEMA officials were uncertain what information they would share with states and localities on advance contracts, and said they did not plan to provide the complete list of the advance contracts FEMA has in place to avoid being overly prescriptive. Yet without a centralized and up-to-date resource on advance contracts, FEMA contracting officers and their state and local counterparts may not be able to effectively communicate about advance contracts and use them to respond to future disasters. Given FEMA’s recent emphasis on the importance of states and localities having the capability to provide their own life-saving goods and services in the immediate aftermath of a disaster, we concluded that clearly communicating consistent and up-to-date information on the availability and limitations of federal advance contracts is imperative to informing state and local disaster response efforts. In our December 2018 report, we recommended that FEMA identify a single centralized resource listing its advance contracts and ensure that resource is updated regularly. Further, we recommended that FEMA should communicate information on advance contracts using that resource to states and localities to inform their advance contracting efforts. DHS concurred with these two recommendations and identified some steps it planned to take, but also stated it believes the existing advance contract list satisfies our recommendation for a single centralized resource. However, as our report noted, we found inconsistencies in this list that FEMA needs to address for advance contract information to be complete and up-to-date for the contracting officers who rely on it. In addition to challenges coordinating with state and local governments, we identified coordination and planning concerns between FEMA and other federal agencies. As the federal disaster coordinator, FEMA obtains requirements from states and localities. It then tasks the appropriate federal agencies with specific missions, based on their emergency support functions. Agencies assigned to specific missions are then responsible for fulfilling requirements, and may use contracts to do so. However, we reported in April 2019 that some federal agencies experienced challenges coordinating with FEMA and state and local partners. For example, USACE officials reported that, during their debris removal mission following the California wildfires, local officials believed that the soil removed would be replaced. However, this was not part of the mission assignment from USACE to FEMA. In these instances, agency officials told us they relied on FEMA to communicate information on their mission assignments to be able to administer contracts. According to a FEMA official during our April 2019 review, coordination and planning concerns related to mission assignments—like contracting considerations—should be worked out in advance between FEMA and agencies such as USACE. However, we found that FEMA policy and guidance lack details on how that coordination should take place. Further, a FEMA official told us that contracting considerations are not necessarily built into mission assignments. We recommended in April 2019 that FEMA revise its mission assignment policy and guidance to better incorporate consideration of contracting needs and ensure clear communication of coordination responsibilities related to contracting. DHS concurred and plans to develop tools and training within the next year to provide the necessary guidance. Challenges with Tracking of Contract Use Limited transparency into disaster contracting obligations further complicates the challenges noted above. We found in April 2019 that the full extent of disaster contracting—for both advance and post-disaster contracts—related to the 2017 disasters was and continues to be unknown. This was due to changes in the criteria for establishing and closing a national interest action (NIA) code—a mechanism for government-wide tracking of emergency or contingency-related contracting—in FPDS-NG, and DHS’s inconsistent implementation of the updated criteria for closing codes. Specifically, the codes for Harvey and Irma closed on June 30, 2018, less than a full year after the hurricanes hit. The code for Maria is valid through June 15, 2019, about 21 months after that hurricane made landfall. This is in contrast to prior hurricanes, for which codes sometimes remained open more than 5 years after the disaster, with the code for Hurricane Katrina being open for 13 years after the disaster. The ability to identify disaster contracting for the 2018 hurricanes was similarly limited as the NIA codes for Hurricanes Florence and Michael expired on March 15, 2019 and April 12, 2019, respectively, about 6 months after those storms made landfall. Based on a memorandum of agreement, the General Services Administration (GSA), DHS, and the Department of Defense (DOD) are jointly responsible for determining when a NIA code should be established and closed. DHS delegated its role, on behalf of civilian agencies for disaster or emergency events, to its Office of the Chief Procurement Officer. The agreement outlines criteria DHS should consider in making determinations to establish and close a NIA code. For our April 2019 review, we identified changes in these criteria between June 2012 and June 2018. For example, the updated agreement does not include the national interest and visibility of an event as criteria for extending a NIA code, allowing a NIA code to expire regardless of the high visibility of the event and information needs of key users. DHS officials reported several rationales to support their decision to close the NIA codes for the 2017 hurricanes, but these were inconsistent with the criteria in the agreement and did not consider key user needs or fully explain the decisions to close the codes. Once a NIA code in FPDS-NG is closed, there is no other publicly available, government-wide system available to comprehensively track contract obligations for specific events. Our April 2019 report demonstrated the magnitude of contract dollars that are no longer easily trackable once a NIA code is closed. For example, using the description field in FPDS-NG, we found that between July 1 and September 30, 2018—after the NIA codes were closed—agencies obligated at least $259 million on contracts for Hurricanes Harvey and Irma. However, not all agencies put event-specific information in the description field, and we found for the 2017 hurricanes only 35 percent of contract obligations linked to a NIA code included this information. Moreover, as we have previously reported, and illustrate in figure 2, it can take years to fully account for federal contract obligations related to response and recovery after a hurricane. In our April 2019 report, we made two recommendations, including that GSA, in coordination with DOD and DHS, assess whether the criteria in the current NIA code agreement meets the long-term needs for high visibility events and account for the needs of users, such as FEMA, other agencies, and Congress; and in the interim, DHS, in coordination with DOD and GSA, should keep the existing NIA codes for disasters open, reopen the NIA codes for Hurricanes Harvey, Irma, Florence, and Michael, and request that agencies retroactively update applicable contract actions to reflect these codes, to the extent practicable. GSA and DOD indicated they would work jointly with DHS to assess the criteria in the agreement within the year. DHS did not comment on that recommendation. Given the high visibility and national interest in these events, assessing the criteria, keeping NIA codes open, and reopening closed codes for the recent disasters to the extent practicable would help ensure visibility over federal disaster contracts. In conclusion, given the circumstances surrounding the 2017 disasters, and the importance of preparedness for future disasters, it is critical to ensure that FEMA is well-positioned to respond through its use of contracts. Our work has shown that without effective planning on the use of contracts, FEMA may face challenges in quickly providing critical goods and services to survivors following a disaster. Further, without effective coordination, FEMA cannot ensure that local, state, and federal partners have the tools they need to assist in disaster response. Moreover, not tracking certain information on a government-wide basis in FPDS-NG may result in key users lacking the information necessary to provide oversight of FEMA’s and other agencies’ disaster contract actions. Implementing our recommendations to update its planning guidance and advance contract strategy; assess acquisition workforce needs; improve coordination with state, local, and federal partners; and improve tracking of disaster contracting actions will help FEMA overcome key challenges it faces in contracting during a disaster, and improve future response efforts. Chairman Payne, Chairwoman Torres Small, Ranking Members King and Crenshaw, and members of the subcommittees, this concludes my statement. I would be pleased to respond to any questions. GAO Contact and Staff Acknowledgments If you or your staff have any questions about this statement, please contact me at (202) 512-4841 or makm@gao.gov. 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