Defense Acquisition

The Air Force estimates that it can complete the F-22 engineering and manufacturing development program within the nearly $19-billion cost cap set by law. During much of 1998, however, the F-22's contractor cost and schedule plans, as defined in 1997, were not fully accomplished. Program costs were over budget and often behind schedule. The Air Force views the potential for further cost growth as a threat to completing the program within the cost limitation. Although the Air Force has devised ways to avoid and reduce costs, GAO questions whether the program, as planned, can be completed within the cost limitation. This testimony summarized GAO's March 1999 report, GAO/NSIAD-99-55.

GAO noted that: (1) the F-22 and F/A-18E/F programs are approaching critical investment decision points, and each faces significant challenges; (2) the F-22 is approaching a decision for undertaking production activities and the E/F is getting ready to enter the operational test and evaluation (OPEVAL) phase; (3) regarding the F-22 program, although the Air Force estimates it can complete the F-22 EMD program within the nearly $19-billion cost limit established by the National Defense Authorization Act for Fiscal Year 1998, in 1998 F-22 costs exceeded budgets and work was not always completed as scheduled; (4) the Air Force is exploring ways to keep EMD costs within the congressional limit, but there are several obstacles; (5) the Air Force plans to start F-22 production activities later this year by awarding contracts to procure the first 6 low-rate initial production aircraft and initiate advance procurement of the next 10 aircraft; (6) because of delays in the EMD program, the Air Force has substantially reduced or delayed the testing it had planned to accomplish before awarding the contracts; (7) in 1994, the Air Force planned to have 1,400 flight test hours completed before starting production activities; (8) the Air Force plans to complete 511 flight test hours; (9) progress of the flight test program so far indicates that achieving 511 hours will be difficult; (10) completing static and fatigue tests on the airframe structures has now been delayed until after the contract award; (11) likewise, early flight testing of a F-22 equipped with its integrated avionics will not be accomplished, as previously planned, before contract award; (12) GAO does not agree with the Navy's assessment that the program is meeting all performance requirements and is on schedule and on cost; (13) Department of Defense, Navy, and contractor personnel have reported that even if the E/F meets all performance specifications, it might fail the next phase of operational testing; (14) regarding the program's schedule, although completion of the development effort has slipped from November 1998 to April 1999, the Navy intends to maintain its original schedule to start OPEVAL in May 1999; (15) consequently, the contractor has insufficient time to correct some critical deficiencies in the aircraft that should be corrected prior to OPEVAL; (16) corrections of some deficiencies have been shifted to later in the program; and (17) this will help the Navy stay within the congressionally mandated developmental cost cap; however, correcting these deficiencies will increase the procurement costs of the aircraft.