Raytheon Co.’s project to develop a new interceptor warhead for America’s ground-based missile defense system is estimated to increase in cost by almost $600 million because of “major design concerns” since the contract was awarded, according to congressional auditors.

The company received a $1 billion contract in May 2017 for the project, which is unsuccessful so far and at least two years behind schedule, the Government Accountability Office said in a report issued Thursday. It is the watchdog agency’s most detailed assessment of problems for the improved warhead, which it said is supposed to respond to “advancements in the North Korean missile threat.”

The program has “encountered design, systems engineering, quality assurance, and manufacturing issues,” the GAO said. It said Raytheon is using commercial off-the-shelf hardware and reused components from navy missile interceptors that the GAO previously raised concerns about.

The Pentagon’s Missile Defense Agency accelerated work on Raytheon’s Redesigned Kill Vehicle by producing it even while it was still in development and by “reducing the number of necessary flight tests to produce and field” new interceptors, the GAO said.

The $600 million increase is the amount the Missile Defense Agency estimated “it would cost to recover” from the “performance issues the program discovered in late 2018 concerning the reuse” of parts and components, said Cristina Chaplain, the GAO official who supervised the new report. “These issues greatly unsettled the program and drove” the expected two-year delay.

Raytheon spokesman Mike Doble had no immediate comment.

The Missile Defense Agency is requesting $412.4 million in the next fiscal year for continued research on the warhead.

Michael Griffin, the Defense Department’s head of research and engineering, last month issued a rare “stop-work” order to Boeing Co., which manages the U.S. missile-defense system, after “receiving recent test results” that indicated “the current plan is not viable,” according to Pentagon spokeswoman Heather Babb.

The Pentagon has “initiated an analysis of alternative courses of action,” she said.

The new version of the interceptor would be used in the $34 billion system intended to detect an incoming intercontinental ballistic missile from an adversary such as North Korea or Iran, dispatching a missile to crash into it and destroy it.

The Redesigned Kill Vehicle is intended to greatly improve the reliability of the current warhead. The warheads deployed when the system was declared operational in late 2004 were found to have occasional reliability problems that led to failures in intercepting mock targets in tests.

Even before the stop-work order, the new version wouldn’t have its first flight test until fiscal 2022 or attempt its first test interception until fiscal 2023. The agency had anticipated placing interceptors tipped with the warheads into silos starting in fiscal 2025 to expand the current field of 44 based in California and Alaska.

More broadly, the GAO said the Missile Defense Agency has “delivered a significant integrated capability for defending the United States, meeting a goal set by the secretary of defense in March 2013 to increase the inventory of ground-based interceptors by December 2017.” But it said progress has been hampered by delays with the new warhead and in starting operations of a site in Poland because of construction problems.