GAO reported on the V-22 Osprey Program, which is intended to provide the armed services with 523 new tilt-rotor aircraft, focusing on: (1) the status of the program and areas of potential cost increases or performance challenges; and (2) whether the aircraft being developed will meet the stated requirements of each of the services.

GAO noted that: (1) the V-22 has been in development for almost 15 years; (2) although Congress has provided significant funding and support to the Department of Defense (DOD), the system has not yet achieved program stability in terms of cost or aircraft design; (3) there are large disparities among the cost estimates from the program office, the contractors, and the Office of the Secretary of Defense; (4) these estimates range from about $40 million to $58 million for each aircraft; (5) the design of the aircraft will not be stabilized until further testing is completed and several important performance and operational issues, such as payload capability, aerial refueling, and downwash are resolved; (6) resolution of these issues, which could also require mission trade-offs or changes to planned operational concepts, will likely escalate program costs and extend the program schedule; (7) the April 1997 low-rate initial production (LRIP) decision was based, in large part, on the results of early operational testing using aircraft produced under an earlier full-scale development program; (8) however, those aircraft are not representative of the aircraft currently being developed during the engineering and manufacturing development phase of the V-22 program; (9) furthermore, the DOD Director, Operational Test and Evaluation (DOT&E), has characterized the tests on which the LRIP decision was based as extremely artificial because of significant test limitations; and (10) future production decisions for the V-22 should be based on more realistic testing.

Status Legend:

Review Pending-GAO has not yet assessed implementation status.

Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.

Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.

Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.

• Review Pending
• Open
• Closed - implemented
• Closed - not implemented

Recommendations for Executive Action

Recommendation: The Secretary of Defense should provide in the Department's next request for V-22 funds an explanation of how it plans to introduce more realistic testing earlier into the V-22 program schedule.

Agency Affected: Department of Defense

Status: Closed - Implemented

Comments: DOD does not plan to take any action on the recommendation, stating that it considers test results, production efficiencies, and other factors in developing its budget and does not consider additional explanatory materials necessary.

Recommendation: The Secretary of Defense should provide in the Department's next request for V-22 funds an explanation of how it plans to achieve the production efficiencies desired by Congress. An agreement between Congress and DOD in this regard would be a significant step toward reaching consensus on the acquisition strategy for the V-22 program.

Agency Affected: Department of Defense

Status: Closed - Implemented

Comments: DOD has stated that it does not consider this additional information necessary and has no plans to include it in its budget requests.