Teets agreed with the reports conclusion that important engineering and testing work was skipped on many space programs as contractors sought to stay within budget and on schedule. In the end, however, the practice has led to major cost overruns and schedule delays, he said at a press conference at the Pentagon.

Thomas Young, the former Lockheed Martin chief who chaired the study, said space budgets have not kept pace with requirements, which have grown with the increasing popularity and utility of space systems across the military. In addition, the Pentagon went too far in its effort to streamline program management by shifting greater responsibility for satellite development and engineering to the private sector, he said.

Meanwhile, the competition for a dwindling number of space contracts has become increasingly fierce, leading companies to submit unrealistically low cost proposals for the work, Young said.

Youngs panel focused on three space programs that have run into significant difficulty in recent years: the Space Based Infrared System (SBIRS) High missile warning satellites; the Future Imagery Architecture intelligence satellites; and the Evolved Expendable Launch Vehicle program.

The Pentagon had to add $4 billion to Boeing Co.s Future Imagery Architecture contract, and $3 billion to Lockheed Martins SBIRS High contract, to address system engineering and testing issues that should have been incorporated in the programs at the time of the contract awards, Teets said.