U.S.-Japan Fighter Aircraft:

Agreement on F-2 Production

NSIAD-97-76: Published: Feb 11, 1997. Publicly Released: Feb 21, 1997.

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Pursuant to a congressional request and a legislative requirement, GAO reviewed the status of the F-2 fighter aircraft program, focusing on the: (1) proportion of production work that will be done in the United States and how the U.S. workshare will be calculated and monitored; (2) status of technology transfers from Japan to the United States and whether these technologies are of interest to the U.S. government and industry; and (3) program's potential contributions to Japan's future aerospace plans.

GAO found that: (1) under the F-2 production agreements, U.S. industry is expected to receive approximately a 40-percent workshare, currently estimated at $4.1 billion if the Japanese fully implement the planned production of 130 aircraft; (2) the agreements specify the items to be procured by Japan from U.S. industry, which provide for a 40-percent workshare based on estimates of the production costs at the time the agreements were signed; (3) the Air Force plans to verify that contracts for the items identified are awarded to U.S. companies; (4) the value of payment amounts will not be tracked and a workshare percentage will no longer be recalculated based on actual payment amounts as had occurred during the development phase; (5) as a result, the Air Force will not have the means to determine whether this approach enabled U.S. companies to receive approximately 40 percent of the production work over the course of the program; (6) technology transfers from Japan to the United States have generally been in accordance with the development phase agreements, but some issues remain unresolved; (7) in 1993, Japan requested that 12 items be recategorized as Japanese indigenous technologies, i.e., not essentially derived from F-16 technical data; (8) the United States is to receive free and automatic flowback of F-2 technologies that are derived from U.S. technical data while access to non-derived or indigenous technologies is more limited; (9) in 1994, the United States agreed to reclassify 4 of the 12 items as non-derived or Japanese indigenous technologies, however, at the time of this review, the United States and Japan had not resolved the classification issue; (10) while this issue is unresolved, the United States is not receiving free and automatic access to these technologies; (11) the United States conducted several visits to explore the potential benefits of F-2 technologies; (12) two technologies that were initially of interest to the U.S. Air Force and to Department of Defense contractors, the co-cured composite wing and the active phased array radar, are now generally considered too costly to produce; (13) however, Lockheed Martin officials indicated that tooling techniques from the F-2 program are being applied to the Joint Advanced Strike Technology program; (14) the F-2 program enhances Japan's military aircraft industry by improving its overall systems integration capability, according to experts; and (15) however, Japan's exports of military technology and equipment continue to be constrained by the country's policy prohibiting exports of weapons systems or exclusively military technology.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD has developed and implemented a plan to periodically poll industry on the value of contracts received from Japan under the F-2 program. The first polling took place in October 1997.

    Recommendation: The Secretary of Defense should direct the Defense Security Assistance Agency, as the lead U.S. agency for the F-2 program, to collect sufficient data to determine the value of production work received by U.S. companies at the end of the program. This can be accomplished by collecting data from Lockheed Martin, General Electric, and a selection of the smaller contractors involved in this program. Collection of such data will allow the Defense Security Assistance Agency to assess the soundness of the production phase approach to workshare allocation and tracking for use in future cooperative programs.

    Agency Affected: Department of Defense

 

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