Tactical Aircraft
Status of the F/A-22 and Joint Strike Fighter Programs
Gao ID: GAO-04-597T March 25, 2004
The Department of Defense's (DOD) two major tactical aircraft fighter programs, the F/A-22 and the Joint Strike Fighter, represent an investment of about $280 billion. Problems in the F/A-22 development program have led to a 10-year delay in delivering the initial capability and development cost increases of $16 billion. The Joint Strike Fighter, which experienced problems early in the program, is now at a critical crossroad in development. Any discussion of DOD's sizeable investment that remains in these programs must also be viewed within the context of the fiscal imbalance facing the nation within the next 10 years. GAO was asked to testify on the status of the F/A-22 and draw comparisons between both F/A-22 and Joint Strike Fighter programs' acquisition approaches.
The F/A-22 program has experienced several significant challenges since it began development in 1986. First, the Air Force had originally planned to buy 750 aircraft, but it now estimates it can only afford about 218 aircraft. Second, in order to develop an expanded air-to-ground attack capability, DOD estimates that the Air Force will need $11.7 billion in modernization funding. Third, the Air Force has determined that new avionics computer processors and architecture are needed to support most planned enhancements, which will further increase program costs and risk. Lastly, the development test program continues to experience problems and risks further delays primarily due to avionics failures and problems meeting reliability requirements. Because of the risks of future cost increases and schedule delays, a congressional subcommittee requested that DOD provide business case information on the F/A-22. However, the information DOD provided did not address how many aircraft the Air Force needs to accomplish its missions, how many the Air Force can afford considering the full life-cycle costs, whether investments in new air-to-ground capabilities are needed, and what are the opportunity costs associated with purchasing any proposed quantities of this aircraft. The Joint Strike Fighter program started system development and demonstration in 2001 and has already encountered some cost and schedule problems. It is now working toward maturing the aircraft design and is considering delays in its critical design reviews to attain greater knowledge before making a decision to increase its investment significantly. In contrast, the F/A-22 program encountered poor cost and schedule outcomes because it had not gathered the appropriate knowledge at critical junctures in the program. The Joint Strike Fighter program is still early in its development program, with a greater opportunity to efficiently apply knowledge to its critical investment decisions.
GAO-04-597T, Tactical Aircraft: Status of the F/A-22 and Joint Strike Fighter Programs
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Testimony:
Before the Subcommittee on Tactical Air and Land Forces, Committee on
Armed Services, House of Representatives:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 9: a.m. EST:
Thursday, March 25, 2004:
Tactical Aircraft:
Status of the F/A-22 and Joint Strike Fighter Programs:
Statement of Allen Li, Director, Acquisition and Sourcing Management:
GAO-04-597T:
GAO Highlights:
Highlights of GAO-04-597T, a testimony before the Subcommittee on
Tactical Air and Land Forces, Committee on Armed Services, House of
Representatives
Why GAO Did This Study:
The Department of Defense‘s (DOD) two major tactical aircraft fighter
programs, the F/A-22 and the Joint Strike Fighter, represent an
investment of about $280 billion. Problems in the F/A-22 development
program have led to a 10-year delay in delivering the initial
capability and development cost increases of $16 billion. The Joint
Strike Fighter, which experienced problems early in the program, is
now at a critical crossroad in development. Any discussion of DOD‘s
sizeable investment that remains in these programs must also be viewed
within the context of the fiscal imbalance facing the nation within
the next 10 years.
GAO was asked to testify on the status of the F/A-22 and draw
comparisons between both F/A-22 and Joint Strike Fighter programs‘
acquisition approaches.
What GAO Found:
The F/A-22 program has experienced several significant challenges
since it began development in 1986. First, the Air Force had
originally planned to buy 750 aircraft, but it now estimates it can
only afford about 218 aircraft. Second, in order to develop an
expanded air-to-ground attack capability, DOD estimates that the Air
Force will need $11.7 billion in modernization funding. Third, the Air
Force has determined that new avionics computer processors and
architecture are needed to support most planned enhancements, which
will further increase program costs and risk. Lastly, the development
test program continues to experience problems and risks further delays
primarily due to avionics failures and problems meeting reliability
requirements.
Because of the risks of future cost increases and schedule delays, a
congressional subcommittee requested that DOD provide business case
information on the F/A-22. However, the information DOD provided did
not address how many aircraft the Air Force needs to accomplish its
missions, how many the Air Force can afford considering the full life-
cycle costs, whether investments in new air-to-ground capabilities are
needed, and what are the opportunity costs associated with purchasing
any proposed quantities of this aircraft.
The Joint Strike Fighter program started system development and
demonstration in 2001 and has already encountered some cost and
schedule problems. It is now working toward maturing the aircraft
design and is considering delays in its critical design reviews to
attain greater knowledge before making a decision to increase its
investment significantly. In contrast, the F/A-22 program encountered
poor cost and schedule outcomes because it had not gathered the
appropriate knowledge at critical junctures in the program. The Joint
Strike Fighter program is still early in its development program, with
a greater opportunity to efficiently apply knowledge to its critical
investment decisions.
GAO is not making recommendations. In a recently issued report on the
F/A-22 (GAO-04-391), GAO recommended that DOD complete a new business
case for the F/A-22 to justify its need and the quantities necessary
and affordable to carry out its mission. GAO also recommended that DOD
provide plans and costs for resolving problems identified during
initial operational testing to the defense committees before the DOD‘s
full rate production decision. DOD partially concurred with both
recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-04-597T.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Allen Li at (202)
512-4841 or lia@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to participate in the Subcommittee's
hearing on the status of the Department of Defense's (DOD) major
tactical aircraft fighter programs, the F/A-22 and the F-35, also known
as the Joint Strike Fighter (JSF). Both programs are intended to
replace aging tactical fighter aircraft with highly advanced, stealthy
aircraft. The F/A-22 and JSF represent a substantial potential
investment for DOD--about $280 billion.
Any discussion of DOD's sizeable investment that remains in the F/A-22
and JSF programs must also be viewed within the context of the fiscal
imbalance facing the nation within the next 10 years. There are
important competing priorities, both within and external to DOD's
budget, that require a sound and sustainable business case for DOD's
acquisition programs based on clear priorities, comprehensive needs
assessments, and a thorough analysis of available resources. Funding
specific programs or activities will undoubtedly create shortfalls in
others.
The federal government's future resource needs are staggering. For
example, efforts to ensure homeland security has resulted in the
creation of the Department of Homeland Security--the largest government
reorganization in more than 50 years, involving 170,000 employees and a
$40 billion budget. Also, legislation was enacted to modernize the
Medicare program to include a prescription drug benefit, at a potential
cost of more than $500 billion over the next 10 years alone. Given
these and other important national priorities and relatively weak
economic performance, historic budget deficits have returned and are
projected to continue for the next decade. These important demands on
our nation increasingly require policymakers to distinguish wants from
needs and to judge what the nation can afford, both now and in the
longer term.
These two fighter programs require substantial investments as shown in
the figure 1. They must compete inside DOD with other important DOD
major acquisition investments that will likely dominate future budget
calls, including missile defense systems, the Army's Future Combat
Systems, and larger investments in space programs to transform
communication, intelligence, surveillance and reconnaissance
capabilities.
Figure 1: Current F/A-22 and Joint Strike Fighter Assumptions for
Development and Procurement:
[See PDF for image]
[End of figure]
My statement today is primarily based on our recently issued report on
the F/A-22.[Footnote 1] Specifically, I will highlight significant
changes in the development program, the readiness to begin initial
operational testing and full rate production, and the sufficiency of
DOD's current business case to justify the need for and the
affordability of quantities necessary to carry out intended missions.
Additionally, based on more limited work we have completed on the JSF,
I will discuss the status of the JSF program, make some observations
based on broad comparisons of its current acquisition approach to the
acquisition experiences of the F/A-22 program, and identify additional
challenges attendant with international cooperation. We performed the
work associated with this statement in accordance with generally
accepted government auditing standards.
In summary, because of the many changes that have occurred in the F/
A-22 program and the remaining investment still to be made, we believe
decision makers would benefit from a new business case that justifies
the need for the full air-to-air and air-to-ground capabilities and the
quantities needed that DOD can afford. Regarding the JSF, we understand
that program managers are considering a delay in its critical design
review to attain greater design stability in its airframe. In addition
to seeking greater design stability, leadership in DOD could reap the
benefits of its new acquisition policy that embraces the best practice
concepts of knowledge-based, evolutionary acquisition by actively
promoting and maintaining a disciplined approach to its acquisitions
throughout the remaining critical decision points over the next few
years.
Background:
The Air Force began the F/A-22 development program in 1986 and expected
to complete development in 9 years for an estimated cost of
$12.6 billion. Today, after being in development for almost two
decades, the estimated development cost is $28.7 billion, a 127 percent
increase. The average unit procurement cost to buy the F/A-22 has also
increased 122 percent. The result of these changes has been a loss of
buying power that has reduced the initial buy quantity from 750 to 277
aircraft. Table 1 shows the changes in the development program from
1986 to 2002.
Table 1: Changes in F/A-22 Program Estimates Since It Started in 1986:
Development cost;
1986--Start of demonstration and validation: $12.6 billion;
1991--Start of engineering and manufacturing development: $19.5
billion;
2002--Current available Selected Acquisition Report information: $28.7
billion.
Development cycle time;
1986--Start of demonstration and validation: 9 years;
1991--Start of engineering and manufacturing development: 16 years;
2002--Current available Selected Acquisition Report information: 19
years.
Development test and evaluation;
1986--Start of demonstration and validation: Not estimated;
1991--Start of engineering and manufacturing development: 51 months;
2002--Current available Selected Acquisition Report information: 99
months.
Initial operational capability;
1986--Start of demonstration and validation: March 1996;
1991--Start of engineering and manufacturing development: Not shown in
report;
2002--Current available Selected Acquisition Report information:
December 2005.
Quantities;
1986--Start of demonstration and validation: 750;
1991-- Start of engineering and manufacturing development: 648;
2002--Current available Selected Acquisition Report information:
276[A].
Sources: Selected Acquisition Reports and Air Force documents.
Note: All references to F/A-22 costs in this report are in then-year
dollars in order to maintain consistent reporting with our prior
reports on the F/A-22 aircraft.
[A] In fiscal year 2003, the Air Force increased the number of F/
A-22 aircraft it planned to buy from 276 to 277.
[End of table]
We have reported in the past that the F/A-22 acquisition approach was a
major contributor to the cost increases and delays in schedule that led
to reduced buying power. In testimony last year,[Footnote 2] we
identified lessons to be learned in the F/A-22 program, which did not
follow a knowledge-based acquisition approach used by successful
commercial firms. Leading commercial firms that we studied employ an
acquisition approach that evolves a product to its ultimate
capabilities on the basis of mature technologies and available
resources. These firms then ensure that high levels of knowledge exist
at three critical junctures in a development program. First, a match
must be made between a customer's needs and the available resources--
technology, engineering knowledge, time, and funding--before a new
development program is launched. Second, a product's design must
demonstrate its ability to meet performance requirements and be stable
about midway through development. Third, the developer must show that
the product can be manufactured within cost, schedule, and quality
targets and is demonstrated to be reliable before production begins.
DOD issued new acquisition policy in May 2003 that governs the
development of major acquisition systems. This new policy embraces the
best practice concepts of knowledge-based, evolutionary acquisition and
represents a good first step toward achieving better outcomes from
major acquisition programs.
The initial F-22 acquisition strategy did not employ an evolutionary
approach. Instead, it sought to develop revolutionary capabilities from
the outset of the program taking on significant risk and onerous
technology challenges. Three critical technologies were immature at the
start of the program--low-observable materials, propulsion,
and integrated avionics. Integrated avionics has been a source of major
schedule delays and cost increases in the F/A-22 program. Starting the
program with these immature technologies prevented the program from
knowing cost, schedule, and performance ramifications until late in the
development program, after significant investments had already been
made. Efforts to mature technology cascaded into development, delaying
attainment of design and production maturity.
The JSF, which started in 1996, is not as far along in its development,
but is experiencing problems that could similarly threaten DOD's
investment. It is at a critical crossroad, one that, based on our prior
work, was approached and passed by several other DOD programs without
capturing the appropriate knowledge for the sizable investment
decisions being made. While the JSF program started with higher risks
by failing to mature its technologies, it is considering a delay to its
investment decision that determines the need to invest in tooling,
labor, and facilities to manufacture aircraft until the airframe design
has become more stable.
Significant Changes Require Additional Investments to Expand F/A-22
Capability:
The basic mission of the F/A-22, initially focused on air-to-air
dominance, has changed to include a significantly greater emphasis on
attacking ground targets. To accomplish this expanded mission, the Air
Force will need additional investments to develop and expand air-to-
ground attack capabilities for the F/A-22. Moreover, the efforts to
expand its capability will also add risks to an already challenged
program. To accommodate planned changes will also require a new
computer architecture and processor to replace the current less capable
ones.
The expanded air-to-ground attack capability will allow the F/A-22 to
engage a greater variety of ground targets, such as surface-to-air
missile systems, that have posed a significant threat to U.S. aircraft
in recent years. This was not previously considered a primary role for
the aircraft as it was intended to be primarily an air-to-air fighter
to replace the F-15. From the outset the F/A-22 was built to counter
expected large numbers of new advanced Soviet fighter aircraft, but
this expected threat never materialized.
The Air Force has a modernization program to improve the capabilities
of the F/A-22 focused largely on a more robust air-to-ground
capability. It intends to do so using five developmental spirals
planned over more than a 10-year period, with the initial spiral
started in 2003. In March 2003, the Office of Secretary of Defense's
Cost Analysis Improvement Group (CAIG)[Footnote 3] estimated that the
Air Force would need $11.7 billion for the planned modernization
program. The CAIG estimate included costs for development, production,
and the retrofit of some aircraft. As of March 2003, the Air Force F/
A-22 approved program baseline did not include estimated costs for the
full modernization effort. Instead, the Air Force estimate included
$3.5 billion for modernization efforts planned through fiscal year
2009. Table 2 shows each spiral as currently planned.
Table 2: Planned Modernization Enhancements for the F/A-22 Program:
Developmental spiral;
Fiscal year expected to incorporate enhancements; 2007:
Global Strike Basic;
Fiscal year expected to incorporate enhancements; 2011:
Global Strike Enhanced[A];
Fiscal year expected to incorporate enhancements; 2013:
Global Strike Full;
Fiscal year expected to incorporate enhancements; 2015:
Enhanced intelligence, surveillance, and reconnaissance.
Examples of enhancements to be added;
Fiscal year expected to incorporate enhancements; 2007:
Capability to launch Joint Direct Attack Munition at faster F/A-22 air
speeds and at longer distances and update to air-to-air capabilities;
Fiscal year expected to incorporate enhancements; 2011:
Improved radar capabilities to seek and destroy advanced surface-to-
air missile systems and integrate additional air-to-ground weapons;
Fiscal year expected to incorporate enhancements; 2013:
Increased capability to suppress or destroy the full range of air
defenses and improve speed and accuracy of targeting;
Fiscal year expected to incorporate enhancements; 2015:
Capability for full intelligence, surveillance, and reconnaissance
integration for increased target sets and lethality.
Cost Analysis Improvement Group's estimate through fiscal year 2015;
Fiscal year expected to incorporate enhancements; 2007: [Empty];
Fiscal year expected to incorporate enhancements; 2011: [Empty];
Fiscal year expected to incorporate enhancements; 2013: [Empty];
Fiscal year expected to incorporate enhancements; 2015: $11.7 billion.
Sources: Air Force and Office of Secretary of Defense.
[A] The Global Strike Enhanced includes two developmental spirals to
achieve the planned enhanced capability.
[End of table]
To complete the planned enhancements, the F/A-22 will also need a new
computer architecture and avionics processors. Current architecture and
processors will be upgraded to support enhancement through the Global
Strike Enhanced development spiral. However, because the current
architecture and processors are old and obsolete and do not have
sufficient capacity to meet the increased processing demands required
for planned new air-to-ground capabilities beyond the Global Strike
Enhanced spiral, they must be replaced.
Rather than start a new development program, the F/A-22 program office
plans to leverage two other ongoing Air Force development or
modification programs for this new processing capability: the new
architecture being developed for the JSF and the new commercial
off-the-shelf general-purpose processors designed for newer versions of
the F-16. According to F/A-22 program officials, they do not expect the
new architecture to be fully developed and ready for installation in
the F/A-22 for at least 5 to 6 years.
Additional risks are likely because the new processor and architecture
are being developed by other major aircraft programs and will require
extensive integration and operational testing to ensure that the F/A-22
program does not encounter similar problems that have delayed
integration and testing of the F/A-22's current avionics suite. F/A-22
program officials acknowledge that this mass changeover of the F/A-22
computer architecture and avionics processor will be a time-consuming
and costly effort and will likely create additional program risks. Air
Force cost estimates are not yet available, but program officials
estimate the nonrecurring engineering costs alone could be at least
$300 million. At the time of our review, the Air Force had not made
a decision about retrofitting aircraft equipped with the old
microprocessor.
Further Delays in Initial Operational Testing Could Impact Planned Full
Rate Production Decision:
The Air Force schedule includes plans to make the full rate production
decision in December 2004, but initial operational test and evaluation
(IOT&E) has not started. The Air Force's efforts to stabilize avionics
software and improve its performance have not been sufficiently
demonstrated to start IOT&E, and the planned entrance criterion was
changed. In addition, the F/A-22 program is not performing as expected
in some other key performance areas like system reliability. These
problems have contributed to the need for a new test schedule and an
additional 7-month delay in the start IOT&E. Together these problems
increase the potential for additional development costs and delays
in the full rate production decision. Since our report in March 2003,
the Air Force has corrected some key design problems identified at that
time, but others remain.
Avionics Do Not Meet Criterion to Start Operational Testing:
The stability and performance of F/A-22 avionics has been a major
problem causing delays in the completion of developmental testing and
the start of IOT&E. Because the F/A-22 avionics encountered frequent
shutdowns over the last few years, many test flights were delayed. As a
result, the Air Force Operational Test and Evaluation Center wanted
assurances that the avionics would work before it was willing to start
the IOT&E program. It established a requirement for a 20-hour
performance metric that was to be demonstrated before IOT&E would
begin. This metric was subsequently changed to a 5-hour metric that
included additional types of failures, and it became the Defense
Acquisition Board's[Footnote 4] criterion to start IOT&E. In turn,
Congress included the new metric, known as Mean Time Between Avionics
Anomaly or MTBAA, in the National Defense Authorization Act for Fiscal
Year 2004.[Footnote 5] As of January 2004, the Air Force had not been
able to demonstrate that the avionics could meet either of these
criteria.
Testing as of January 2004 showed the program had achieved 2.7 hours--
54 percent of the 5-hour stability requirement to begin IOT&E. While
the Air Force has not been able to meet the new criteria, major
failures, resulting in a complete shutdown of the avionics system, have
significantly diminished. These failures are occurring only about once
every 25 hours on average. This is the result of a substantial effort
on the part of the Air Force and the contractor to identify and fix
problems that led to the instability in the F/A-22 avionics software.
However, less serious failures are still occurring frequently.
Reliability Requirements Not Being Met:
The F/A-22 program is not meeting its requirements for a reliable
aircraft, and it is not using a knowledge-based approach. The Air Force
established reliability requirements to be achieved at the completion
of development and at system maturity.[Footnote 6] As a measure of the
system's overall reliability, the Air Force established a requirement
for 1.95-hours mean time between maintenance by the completion of
development and 3-hours mean time between maintenance at system
maturity. This measure of reliability represents the average flight
time between maintenance actions. As of October 2003, the Air Force had
only been able to demonstrate a reliability of about 0.5 flying hours
between maintenance actions or about 26 percent of the development
requirement and 17 percent of system maturity requirement. This has led
to test aircraft spending more time than planned on the ground
undergoing maintenance.
In addition to the high level of maintenance required, failures in F/
A-22 parts and components also caused reliability problems. During
2003, the Air Force identified 68 parts that had a high rate of failure
causing them to be removed or replaced and affecting the F/A-22 system
reliability. The contractor has initiated programs to eliminate the
high failure rates experienced by these parts. The canopy has also been
experiencing failures during testing, allowing it to achieve only about
15 percent of its expected 1,600-hour life. The Air Force is
considering using a second manufacturer for canopies, but until it has
passed qualification testing, it cannot be used as an alternative
source for the high-failing canopies.
The F/A-22 program began limited production before demonstrating
reliability. Our work has shown that product development engineers from
leading commercial firms expect to achieve reliability requirements
before entering production. They told us reliability is attained
through an iterative process of design, testing, analysis, and
redesign.[Footnote 7] Commercial firms understand that once a system
enters production, the costs to achieve reliability through this
iterative design change process become significantly more expensive.
The F/A-22 aircraft has been in production since fiscal year 1999, and
the Air Force has on contract 52 production aircraft, and an additional
22 aircraft on long lead contracts representing 27 percent of the
planned buy quantity. With 83 percent of the reliability requirement
yet to be achieved through this iterative design change process, the
Air Force can expect to incur additional development and design change
costs. If the Air Force fails to improve the F/A-22's reliability
before fielding the aircraft, the high failure rates will result in
higher operational and support costs to keep the aircraft available for
training or combat use.
Operational Testing Delayed and Divided into Two Phases:
Avionics and reliability problems were the major contributors to delays
in F/A-22 flight-testing in 2003. As a result, the start of IOT&E was
delayed an additional 7 months. Realizing the Air Force would not be
ready to enter initial operational testing as previously planned, the
Office of the Secretary of Defense requested the F/A-22 program to
establish a new operational test plan that includes measures to ensure
the aircraft and its avionics are ready before entering operational
testing. In response, the Air Force put in place a two-phase
operational test program.
* Phase 1, also called an operational assessment, is not the official
start of operational testing. It is intended to assess the F/A-22's
readiness for IOT&E. Started in October 2003, it calls for testing two
F/A-22 aircraft.
* Phase 2 testing is considered the actual start of IOT&E. To begin
this phase, the Air Force must meet a number of criteria. Perhaps most
importantly, it must demonstrate that the F/A-22's integrated avionics
will be able to operate for sufficient lengths of time, without
shutting down.
Figure 2 compares the changes in the planned test program since our
March 2003 report.[Footnote 8]
Figure 2: F/A-22 Flight Test Schedule Changes:
[See PDF for image]
[End of figure]
According to Air Force test officials, results of some phase 1 tests
could be used to satisfy IOT&E requirements if the aircraft and
software configurations do not change for IOT&E testing. This could
reduce the scope of the test effort planned during IOT&E. The Defense
Acquisition Board is scheduled to review the F/A-22's readiness for
IOT&E later this month.
At the present time, the Air Force expects to complete IOT&E in
October 2004, before the full rate production decision, now expected in
December 2004. The time allotted to complete IOT&E under the new test
plan, however, has been compressed by 4 months, assuming phase 1
testing results are not permitted to be used for IOT&E. This means the
Air Force would have less time than previously planned to complete the
same amount of testing. If the Air Force continues to experience delays
in testing prior to IOT&E, then the full rate production decision would
also have to be delayed until IOT&E is complete and the Beyond Low Rate
Initial Production Report is delivered to Congress.[Footnote 9]
Past Design Problems Corrected:
The Air Force has corrected design problems discussed in our March 2003
report. To correct the movement or buffeting of the vertical fins in
the tail section of the aircraft, the Air Force designed and
implemented modifications, which strengthen the fin and hinge
assemblies. Because of this problem, the Air Force placed restrictions
on flights below 10,000 feet. Testing was done above and below
10,000 feet, and the flight restrictions were removed. Likewise, the
Air Force modified the aircraft to prevent overheating concerns in the
rear portion of the aircraft by adding thermal protection and
strengthened strategic areas in the aft tail sections. The Air Force
also plans to modify later production aircraft using a new venting
approach to resolve the heat problems. We reported that the Air Force
had also experienced separations in the horizontal tail materials.
After additional testing, the Air Force deemed that the original tails
met requirements established for the life of the airframe. However, the
Air Force redesigned the tail to reduce producibility costs. Tests will
be performed on the redesigned tail in late 2004.
Business Case Information Did Not Justify Current Aircraft Quantities
or Modernization Investment Plans:
The business case made to justify the F/A-22 program at its outset is
no longer valid. Since that time, program cost and schedule have grown
substantially and affordable quantities have been reduced by 60
percent. The expected threat, for which this aircraft was originally
designed, never materialized, and new, more demanding ground threats,
like surface-to-air missile systems, have evolved, requiring expanded
capabilities that will require significant new developmental
investments. In addition, technical problems have not been resolved,
and uncertainty about the outcome of operational testing could lead to
additional development costs and further delays.
Today, the Air Force estimates the total F/A-22 acquisition program
will cost about $72 billion, excluding about $8 billion estimated by
the CAIG to complete modernization activities. Including these costs
brings the estimated total investment for the F/A-22 program to about
$80 billion. Through fiscal year 2004, about one-half of this
investment has been funded, leaving key investment decisions in the
near future on the remaining $40 billion for aircraft production and
upgrades in capability.
Last year, in light of the changes in the program and investments that
remained, the Subcommittee on National Security, Emerging Threats, and
International Relations of the House Committee on Government Reform
asked DOD to provide a new business case justifying the Air Force's
planned number of F/A-22s (276 at that time) as well as how many F/
A-22s are affordable. In its response, DOD did not sufficiently address
key business case questions such as how many F/A-22s are needed, how
many are affordable, and if alternatives to planned investments
increasing the F/A-22 air-to-ground capabilities exist.
Instead, DOD stated it planned to buy 277 F/A-22s based on a "buy to
budget" concept that determines quantities on the availability and
efficient use of funds by the F/A-22 program office. Furthermore,
justification for expanding the capability to a more robust air-to-
ground attack capability was not addressed in DOD's response. While
ground targets such as surface-to-air missile systems are acknowledged
to be a significant threat today, the response did not establish a
justification for this investment or state what alternatives were
considered. For example, the JSF aircraft is also expected to have an
air-to-ground role, as are planned future unmanned combat air vehicles.
These could be viable alternatives to this additional investment in F/
A-22 capability.
While the business case information submitted to the subcommittee
called for 277 aircraft, DOD stated it could only afford to acquire
between 216 and 218 aircraft within the congressionally imposed cap on
production costs--currently at $36.8 billion. DOD expects improvements
in manufacturing efficiencies and other areas will provide it with
sufficient funds to buy additional F/A-22 aircraft. However, this seems
to be an unlikely scenario given the program's history. Previously,
DOD, under its "buy to budget" approach, used $876 million mostly from
production funds to cover increases in development costs, thus
reducing aircraft quantities by 49. With testing still incomplete and
many important performance areas not yet demonstrated, the possibility
for additional increases in development costs is likely.
The analysis and conclusions in our recent report led us to recommend
that DOD complete a new business case that justifies the need for the
F/A-22 and that determines the quantities needed and affordable to
carry out its air-to-air and air-to-ground mission. In preparing the
business case, we also recommended DOD look at alternatives to the F/
A-22 for dealing with the ground threats that were driving the need for
an expanded air-to-ground capability. In response to a draft of that
report, DOD partially concurred, stating that it evaluates the F/A-22
business case elements as part of the annual budget process.
Additionally, DOD's response acknowledged that this year the department
is undertaking a broader set of reviews under the Joint Capabilities
Review process and that the F/A-22 will be a part of that review. In
our report, as part of the evaluation of DOD's comments, we noted that
an independent and in-depth study of the F/A-22 program has been
requested by the Office of Management and Budget and that such a study
provided an opportunity for completing a business case analysis.
JSF Joint Strike Fighter Program Is Approaching a Decision Point:
The JSF acquisition program is approaching a key investment decision
point in its development as it prepares to stabilize the design for its
critical design reviews. The program has many demands and requirements
to satisfy before it is completed. It is the most expensive acquisition
program in DOD's history with plans to buy almost 2,500 aircraft for an
estimated acquisition cost of about $200 billion. The design plans are
for three variants for the Air Force, Navy, and Marine Corps, with
development partners and potential customers that span the globe.
Upcoming investment decisions will be a prominent indicator of the risk
program management and senior leadership will assume for this program.
The program's size--in terms of funding, number of aircraft, and
program participants--will create challenges for decision makers over
the next several years. They will face decisions that need to be guided
by a sound business case and an evolutionary, knowledge-based
acquisition process that will provide more predictable cost, schedule,
and performance outcomes.
The JSF is a joint, multi-national acquisition program for the Air
Force, Navy, Marine Corps, and eight cooperative international
partners.[Footnote 10] The program's objective is to develop and deploy
an affordable weapon system that satisfies a variety of war fighters
with different needs. The system is intended to consist of a family of
highly common and affordable strike aircraft designed to meet an
advanced threat and a logistics system to enable the JSF to be self-
sufficient or part of a multisystem and multiservice operation. This
family of strike aircraft will consist of three variants: conventional
takeoff and landing, aircraft carrier suitable, and short take off and
vertical landing. The JSF program began in November 1996. After a five-
year competitive concept demonstration phase between Boeing and
Lockheed-Martin, DOD awarded Lockheed-Martin a contract in October 2001
to begin system development and demonstration.
Current Status of the Joint Strike Fighter Program's Cost, Schedule,
and Funding:
We are aware that program managers are contemplating changes to the
program that could delay the schedule and increase costs, but
confirmation and details are not yet available. Nonetheless, current
program office estimates do provide some insights. Since the JSF
acquisition program began in 1996, the cost of development has grown by
about 80 percent. As shown in figure 3, the majority of this cost
growth, from an estimated $24.8 to $34.4 billion, was recognized at the
time the program transitioned from concept development to system
development and demonstration in 2001. The program office cited
schedule delays, implementation of a new block development approach
that extended the program by 36 months, and a more mature cost estimate
as the major causes for the increase. Since the start of system
development and demonstration, the estimate has increased by an
additional $10.3 billion because of continued efforts to achieve
international commonality, optimize engine interchangeability, further
refinements to the estimating methodology, and schedule delays for
additional design work.
Figure 3: Joint Strike Fighter Cost of Development from Fiscal Year
1996 to 2004:
[See PDF for image]
[End of figure]
In both 2000 and 2001, when the program was making the critical
decision to move into system development and demonstration, we reported
and testified that technologies had not been sufficiently demonstrated
to reduce risk to a level commensurate with a decision to commit major
capital and time to product development.[Footnote 11] While some of
these technologies continue to be troublesome, in March 2003, the
program's preliminary design review revealed significant issues related
to aircraft design maturity.
Weight has become the most significant design risk for the program as
it approaches its critical design review. The increased weight of each
variant design could degrade aircraft range and maneuverability if not
brought under control. According to the program office, the airframe
design has matured more slowly than anticipated and software
development and integration is posing a significant design challenge.
Also, in a 2003 annual report, the Director of Operational Test &
Evaluation stated that weight growth is a significant design risk for
all the variants, that the development schedule is aggressive, and that
efforts to reduce weight have eroded a large part of the schedule.
We also note that the program's funding profile assumes almost
$90 billion of funding over the next 10 years, an average of almost
$9 billion a year. This will require the JSF program to compete with
many other large programs for scarce funding during this same time
frame. Sustaining this level of high funding for such a long period
will be a challenge. The JSF program's latest planned funding profile
for development and procurement--as of December 2002--is shown in
figure 4.
Figure 4: Current Joint Strike Fighter Funding Assumption for
Development and Procurement:
[See PDF for image]
[End of figure]
Knowledge-Based Decisions Are Needed for the Road Ahead:
The JSF program faces critical decisions over the next 24 months.
Decisions made today will greatly influence the efficiency of the rest
of its funding--almost 90 percent of the total. As a result of current
concerns over system integration risk, the program office is currently
restructuring the development program, which will add significant cost
and delay the development schedule. For example, it is considering
delaying its critical design reviews, its first flights of development
aircraft, and its limited rate production decision to allow more time
to mitigate design risk and gather more knowledge before moving forward
with continued major investments.
While no one wants to delay critical reviews, now is the time to get
the design right rather than later. Going forward with an incomplete
review may cause more problems later in the effort. Indeed, based on
our past best practices work and lessons learned from the F/A-22
development effort, we have seen many examples where programs moved
forward past their critical design review without gathering the
knowledge needed to verify that their design was stable. This has led
to poor cost and delivery outcomes for these programs. We have also
seen the reverse, where programs have gathered appropriate knowledge
before their critical design review. These programs had much more
predictable cost and schedule outcomes.
The F/A-22 program held its critical design review in 1995 with only
about 26 percent of its design drawings complete. Best practice
criteria calls for 90 percent of drawings to be complete before a
design can be considered stable enough to commit to additional
significant investments of time, labor, material, and capital. Figure 5
shows the engineering drawing completion history of the F/A-22 along
with changes to development cost estimates as the program progressed.
Figure 5: F/A-22 Engineering Design Drawing History and Development
Costs:
[See PDF for image]
[End of figure]
An incomplete F/A-22 critical design review contributed to several
design and manufacturing problems that resulted in design changes,
labor inefficiencies, cost increases, and schedule delays. Since the
time of its critical design review, the F/A-22's development costs have
increased by about 50 percent. The JSF program has the opportunity to
avoid a similar situation. We believe that, given the apparent design
challenges at this point in the program, a delay to gather more
knowledge before increasing the investment is warranted and may help to
reduce turbulence later in development, before the program begins
"bending metal" for development aircraft. The JSF program is at a
pivotal point, one in which the effort will turn from a paper design to
actually manufacturing a product, something that requires considerably
more money. While we believe the program moved forward with too much
technology risk up to this point, it has an opportunity now to achieve
critical design knowledge by taking the time to develop a mature design
before moving into manufacturing. The program can use lessons learned
from the F/A-22 acquisition right now to keep on track and deliver an
affordable, high quality weapon system sooner rather than later.
Additional Challenges Attendant with International Cooperation:
The JSF program is based on a complex set of relationships among all
three services and governments and industries from eight foreign
partners. The program is expected to benefit the United States by
reducing its share of development costs, increasing future aircraft
sales, giving it access to foreign industrial capabilities, and
improving interoperability among the services and allies. For their
part, partner governments expect to benefit from relationships with
U.S. aerospace companies, access to JSF program data, and influence
over aircraft requirements. They will also benefit financially by
obtaining waivers of nonrecurring aircraft costs on an aircraft they
could otherwise not afford to develop on their own. The partners expect
a return on their investment through JSF contract awards for their
industries that will improve their defense industrial capability, a
critical condition for their participation. They have agreed to
contribute about $4.5 billion to the JSF development program and are
expected to purchase several hundred aircraft once it enters
production.
With these mutual benefits come challenges. Support for the program
from our international partners hinges in large part on expectations
for financial returns, technology transfer, and information sharing. If
these expectations are not met, that support could deteriorate. In
addition, a large number of export authorizations are needed to share
information and execute contracts. These authorizations must be done in
a timely manner to maintain schedule and ensure competition. Finally,
transfer of sensitive U.S. military technologies needed to achieve
commonality and interoperability goals will push the boundaries of U.S.
disclosure policies.[Footnote 12]
Conclusions:
DOD is not immune to efforts to address the fiscal imbalance
confronting the nation and will continue to face challenges based on
competing priorities, both within and external to its budget. This will
require decisions based on a sound and sustainable business case for
DOD's acquisition programs based on clear priorities, comprehensive
needs assessments, and a thorough analysis of available resources. In
addition, it will require an acquisition process that provides for
knowledge-based decisions at critical investment junctures in order to
maximize available dollars. DOD has instituted a new acquisition policy
that embraces evolutionary and knowledge-based acquisition concepts.
However, policy alone will not solve the problems DOD faces. This will
also require disciplined actions on the part of DOD's leadership to
employ the concepts established in its new policy.
While it is too late for the F/A-22 to go back and follow these
concepts, there still is time to evaluate the need for additional
aircraft; over fifty F/A-22's are presently on contract. Because of the
nation's fiscal challenges, tough choices will need to be made
regarding future spending priorities, including the remaining potential
$40 billion investment in the F/A-22. In light of this substantial
investment and the many changes that have occurred in the F/A-22
program, we believe decision makers would benefit from a new business
case that justifies the need for the full air-to-air and air-to-ground
capabilities and the quantities needed and affordable.
The JSF program has a greater opportunity to make critical investment
decisions using a knowledge-based approach. While the program started
off with a high-risk approach by not maturing technologies before
starting system development, it has the opportunity to manage the
system development phase and stabilize the design before committing to
large investments in manufacturing capability--tooling, labor, and
facilities--to build test aircraft. The JSF program is considering a
delay in its critical design review to attain greater design stability
in its airframe. In addition to seeking greater design stability,
leadership in DOD can reap the benefits of its new acquisition policy
by actively promoting and maintaining a disciplined approach throughout
the remaining critical decision points over the next few years. With
these activities in place, DOD will be in a better position to request
continued JSF funding and support.
Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or other members of the Subcommittee
may have. If you have future questions about our work on the F/A-22 or
JSF, please call Allen Li at (202) 512-4841.
FOOTNOTES
[1] U.S. General Accounting Office, Tactical Aircraft: Changing
Conditions Drive Need for New F/A-22 Business Case, GAO-04-391
(Washington, D.C.: Mar. 15, 2004).
[2] U.S. General Accounting Office, Best Practices: Better Acquisition
Outcomes Are Possible If DOD Can Apply Lessons from F/A-22 Program,
GAO-03-645T (Washington, D.C.: Apr. 11, 2003). We testified on the
failure to use best practice acquisition concepts and used the F/A-22
program as a case study to show lessons to be learned had the F/A-22
applied this best practice approach in its development and procurement
activities.
[3] The Office of Secretary of Defense CAIG acts as the principal
advisory body to the milestone decision authority on cost.
[4] The Defense Acquisition Board is DOD's senior-level forum for
advising the Under Secretary of Defense Acquisition, Technology, and
Logistics on critical decisions concerning major defense acquisition
programs.
[5] Pub. L. 108-136 (Nov. 24, 2003), section 133.
[6] System maturity is defined by the Air Force as a point when the F/
A-22s have accumulated 100,000 flying hours, expected to occur in 2008
after most F/A-22s are to be procured.
[7] U.S. General Accounting Office, Best Practices: Capturing Design
and Manufacturing Knowledge Early Improves Acquisition Outcomes, GAO-
02-701 (Washington, D.C.: July 15, 2002).
[8] U.S. General Accounting Office, Tactical Aircraft: DOD Should
Reconsider Decision to Increase F/A-22 Production Rates While
Development Risks Continue, GAO-03-431 (Washington, D.C.: Mar. 14,
2003).
[9] 10 U.S.C. 2399 provides that a major defense acquisition program
may not proceed beyond low-rate initial production until initial
operational test and evaluation is completed and the defense committees
have received the report of testing results from the Director of
Operational Test and Evaluation.
[10] International partners include the United Kingdom, Italy, the
Netherlands, Turkey, Canada, Australia, Denmark, and Norway.
[11] U.S. General Accounting Office, Joint Strike Fighter Acquisition:
Development Schedule Should Be Changed to Reduce Risks (GAO/T-NSIAD-00-
132, Mar. 16, 2000); Joint Strike Fighter Acquisition: Development
Schedule Should Be Changed to Reduce Risks (GAO/NSIAD-00-74,
May 9, 2000); Defense Acquisitions: Decisions on the Joint Strike
Fighter Will Be Critical For Acquisition Reform (GAO/T-NSIAD-00-173,
May 10, 2000); Joint Strike Fighter Acquisition: Mature Critical
Technologies Needed to Reduce Risks (GAO-02-39, Oct. 19, 2001).
[12] Joint Strike Fighter Acquisition: Cooperative Program Needs
Greater Oversight to Ensure Goals Are Met, GAO-03-775 (Washington,
D.C.: July 21, 2003)