Defense Aircraft Investments:

Major Program Commitments Based on Optimistic Budget Projections

T-NSIAD-97-103: Published: Mar 5, 1997. Publicly Released: Mar 5, 1997.

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GAO discussed the Department of Defense's (DOD) aircraft modernization plans.

GAO noted that: (1) as the nation proceeds into the 21st century with the prospect of a flat budget, GAO believes that action needs to be taken to address DOD's problematic aircraft investment strategy; (2) action needs to be taken now because, if major commitments are made to procure the planned aircraft programs, such as the F/A-18E/F, F-22, Joint Strike Fighter, and V-22, over the next several years, a significant imbalance is likely to result between program funding requirements and available funding; (3) such imbalances have historically led to program stretchouts, higher unit costs, and delayed deliveries to operational units; (4) also, this imbalance may be long term in nature, restricting DOD's ability to respond to other funding requirements; (5) DOD must reorient its aircraft investment strategy to recognize the reality of the current security and budget environment; (6) accordingly, instead of continuing to start aircraft procurement programs that are based on optimistic assumptions about available funds, DOD, in consultation with the Congress, should determine how much procurement funding will realistically be available and structure its investment strategy within those levels; (7) DOD must also provide more concrete and lasting assurance that its procurement programs are militarily justified in the current security environment and clearly affordable through their planned periods of procurement; (8) the key to ensuring the efficient production of systems is program stability; (9) understated cost estimates and overly optimistic funding assumptions result in too many programs chasing too few dollars; (10) GAO believes that bringing realism to DOD's acquisition plans will require very difficult decisions because programs will have to be terminated; and (11) nevertheless, the likelihood of continuing fiscal constraints and reduced national security threats should provide additional incentives for real progress in changing the structure and dominant culture of DOD's system aquisition processes.

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