Defense Acquisitions

Since the inception of the Joint Air-to-Surface Standoff Missile Program, the development schedule has lengthened from 56 months to 78 months, and total program costs have risen from $1.6 billion to $2.1 billion. In the most recent extension of the program's development schedule, approved in November 1999, the Air Force added 10 months to the missile's development schedule and increased program costs by about $90 million. Factors leading to the schedule delay included prime and subcontractor changes to missile design to (1) correct problems discovered during testing, (2) lower production costs, or (3) improve performance. Program officials said that contractors underestimated the time and the personnel needed to design the missile and prepare for production. The Air Force used acquisition reform strategies, such as using technologies already proven in other systems and establishing a cost goal as an independent requirement, which helped to reduce overall development time and costs. However, the program is still vulnerable to significant cost increases and schedule delays because the design of some components is not yet stable. Also, the contract's missile production prices assume that production will start by a specific date, even though there is no guarantee that the missile will be ready for production by then. GAO recommends that the Air Force revise its acquisition strategy for the Joint Air-to-Surface Standoff Missile Program to move away from an arbitrarily set production date to one that is tied to the certainty that the missile design is stable, the missile can meet performance requirements, and the production line can produce the needed missiles.

GAO noted that: (1) since the program's inception, the development schedule has lengthened from 56 months to 78 months, and total program costs have increased from $1.6 billion to $2.1 billion; (2) in the most recent extension, approved in October 1999, the Air Force added 10 months to the missile's development schedule and increased estimated program costs by about $90.1 million; (3) factors leading to the schedule delay varied and included prime and subcontractor changes to missile design to: (a) correct problems discovered during testing; (b) decrease production costs; or (c) improve performance; (4) program officials stated that contractors underestimated the time and personnel required to design the missile and prepare for production; (5) the Air Force employed acquisition reform strategies, such as using technologies already proven in other systems and establishing a cost goal as an independent requirement, which helped reduce overall development time and costs; (6) as a result, the 78-month development program timeframe is substantially less than the historical average of 118 months for other missile programs; (7) also, the missile's production unit cost is projected to be well under the price limit; (8) however, the program is still vulnerable to significant cost increases and schedule delays because the design of some components is not yet stable; (9) further, the missile production prices within the JASSM contract are based on starting production by a specific date but without the adequate assurance that the missile will be ready for production by that date; (10) the Air Force will not have specific, detailed knowledge of the missile's ability to meet its performance requirements until after production is scheduled to start; and (11) also, there is much engineering and development work to be done to obtain full assurance that the production processes are under control and that the production line is producing the quality and volume of needed missiles.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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