Department of Defense's Waiver of Competitive Prototyping Requirement for the Air Force's F-15 Eagle Passive/Active Warning and Survivability System (EPAWSS) Program
GAO-15-800R: Published: Sep 21, 2015. Publicly Released: Sep 21, 2015.
What GAO Found
The Department of Defense's (DOD) rationale for waiving the competitive prototyping requirement in the Weapon Systems Acquisition Reform Act of 2009, as amended (WSARA), for the Air Force's F-15 Eagle Passive/Active Warning and Survivability System (EPAWSS) program covered one of the two bases provided in the statute; namely that the cost of producing competitive prototypes exceeds the expected life-cycle benefits (in constant dollars) of producing the prototypes. EPAWSS is intended to replace and upgrade the electronic warfare system on fielded F-15C/E fighter aircraft. It is expected to improve the aircraft's internal self-protection electronic warfare systems, thereby enhancing the F-15's ability to detect, identify, locate, deny, degrade, disrupt, and defeat air and ground threats to the aircraft. DOD's rationale for the prototyping waiver is based largely on the acquisition strategy for the program. According to the waiver, the program is to leverage, to the maximum extent possible, existing, technically mature, non-developmental components, which minimizes the potential risk reduction benefits associated with early prototyping.
In the waiver, DOD also concluded that the Air Force's cost-benefit analysis supporting its decision to forgo competitive prototyping was sufficient. GAO found that the Air Force's cost-benefit analysis was consistent with key principles in DOD's policy on economic analysis, which states that each feasible alternative for meeting an objective must be considered and its life-cycle costs and benefits evaluated. The Air Force cost-benefit analysis supporting the waiver examined three prototyping scenarios and found: (1) competitive prototyping, in which two contractors would build prototype hardware and software, would increase acquisition costs by $116.3 million (2) non-competitive hardware and software prototyping involving one contractor would increase costs by $38.3 million, and (3) prototyping of the four critical technologies involving one contractor would increase costs by $36.3 million (each scenario in constant 2014 dollars). The Air Force concluded the only life-cycle benefits that could be achieved included reduced system integration risk and improved performance, valued at approximately $6.5 million to $7.2 million (in constant 2014 dollars). The independent Air Force Cost Analysis Agency assessed the program office's cost estimate that provided the cost and benefit data for the Air Force's analysis, which helps validate its credibility.
Why GAO Did This Study
WSARA required the Secretary of Defense to modify guidance to ensure that the acquisition strategy for each major defense acquisition program provides for competitive prototypes before Milestone B approval--which authorizes entry into system development--unless the Milestone Decision Authority waives the requirement. Competitive prototyping, which involves commercial, government, or academic sources producing early prototypes of weapon systems or critical subsystems, can help DOD programs reduce technical risk, refine requirements, validate designs and cost estimates, and evaluate manufacturing processes prior to making major commitments of resources. It can also help reduce the time it takes to field a system, and as a result, reduce its acquisition cost. WSARA also provides that when a Milestone Decision Authority authorizes a waiver of the competitive prototyping requirement on the basis of what WSARA describes as "excessive cost," the Milestone Decision Authority is required to submit notification of the waiver, together with the rationale, to the Comptroller General of the United States. WSARA further provides that no later than 60 days after receipt of a notification of a waiver, GAO is to review the rationale for the waiver and submit a written assessment of that rationale to the congressional defense committees.
On June 24, 2015, GAO received notice from DOD that it had waived the competitive prototyping requirement for the Air Force's F-15 EPAWSS program. In this report, GAO assesses DOD's rationale for waiving the competitive prototyping requirement for the EPAWSS program and the analysis used to support it.
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