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Report to Congressional Committees:

United States General Accounting Office:

GAO:

March 2004:

Tactical Aircraft:

Changing Conditions Drive Need for New F/A-22 Business Case:

GAO-04-391:

GAO Highlights:

Highlights of GAO-04-391, a report to congressional committees 

Why GAO Did This Study:

Following a history of increasing cost estimates to complete F/A-22 
development, Congress asked GAO to assess the Air Forceís F/A-22 
development program annually and determine whether the Air Force is 
meeting key performance, schedule, and cost goals. On April 23, 2003, a 
congressional subcommittee requested that the Department of Defense 
(DOD) provide more detailed information on the business case that 
supports the estimated quantities and costs for an affordable F/A-22 
program. Specifically, GAO (1) identified changes in the F/A-22 program 
since its inception, (2) reviewed the status of the development 
activities, and (3) examined the sufficiency of business case 
information provided for congressional oversight.

What GAO Found:

The Air Force is developing the F/A-22 aircraft to be less detectable 
to adversaries, capable of high speeds for long ranges, and able to 
provide a pilot with improved awareness of the surrounding situation 
through integrated avionics. In addition, the Air Force plans to expand 
the F/A-22ís ability to engage targets on the ground to provide a 
robust capability not originally planned at the start of the program. 
The Air Force plans to begin initial operational test and evaluation in 
March 2004 and to seek full rate production approval in December 2004. 

The F/A-22 program has experienced several significant changes since it 
began development in 1986. First, the Air Force cannot afford to 
purchase the quantities of aircraft that were planned 18 years ago. The 
Air Force had originally planned to buy 750 aircraft, but it now 
estimates it can only afford 218 aircraft. Second, in order to develop 
the expanded air-to-ground attack capability, the Office of Secretary 
of Defense estimates that the Air Force will need $11.7 billion in 
modernization funding. Lastly, 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.

Further, the development test program continues to experience problems 
and risks further delays. The F/A-22ís avionics continue to experience 
shutdowns and failures. Moreover, the F/A-22 has not met its 
reliability requirements and has experienced failures in its 
computerized maintenance support system. This has led to aircraft 
spending more time on the ground undergoing maintenance.

Due to 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 why this aircraft is needed given current and projected 
threats. The business case also 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. While the response stated that the Air Force still plans to 
buy 277 F/A-22 aircraft, the Air Force estimates that only 218 aircraft 
are affordable within congressionally imposed funding limitations. In 
addition, significant investment decisions remain and could affect 
another $40 billion to support this program through full rate 
production and implementation of the spiraled improvement efforts. 

In light of the uncertainty concerning how many aircraft are needed in 
todayís environment, the large investments that remain, and unknown 
outcomes of planned operational testing, GAO continues to have concerns 
regarding the DODís readiness to make a full rate production decision.

What GAO Recommends:

GAO recommends that DOD complete a new business case that determines 
the continued need for the F/A-22 and the number of aircraft required 
for its air-to-air and air-to-ground roles based on capabilities, need, 
alternatives, and constraints of future defense spending 
departmentwide. GAO also recommends that plans and costs for resolving 
problems identified during initial operational testing be provided to 
the defense committees prior to the departmentís full rate production 
decision. DOD partially concurred with both recommendations. GAO 
believes a business case and the plans and costs of corrective action 
should be reported to Congress.

www.gao.gov/cgi-bin/getrpt?GAO-04-391.

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]

Contents:

Letter:

Results in Brief:

Background:

Significant Changes Have Occurred in the F/A-22 Program During Nearly 
Two Decades of Development:

Remaining Development and Operational Testing Could Impact F/A-22 
Program Outcomes:

DOD Did Not Provide Congress Sufficient Business Case Information to 
Justify Current Aircraft Quantities or Modernization Investment Plans:

Conclusions:

Recommendations for Executive Action:

Agency Comments and Our Evaluation:

Scope and Methodology:

Appendix I: Comments from the Department of Defense:

Appendix II: GAO Staff Acknowledgments:

Related GAO Products:

Tables:

Table 1: Changes in F/A-22 Program Estimates Since It Started in 1986:

Table 2: Planned Modernization Enhancements for the F/A-22 Program:

Figures:

Figure 1: Status of F/A-22 Avionics Metrics, as of January 2004:

Figure 2: F/A-22 Flight Test Schedule Changes:

Abbreviations:

CAIG: Cost Analysis Improvement Group:

CIP: common integrated processors:

DOD: Department of Defense:

MTBAA: Mean Time Between Avionics Anomaly:

MTBIE: Mean Time Between Instability Events:

IOT&E: initial operational test and evaluation:

United States General Accounting Office:

Washington, DC 20548:

March 15, 2004:

Congressional Committees:

The Air Force is developing the F/A-22 aircraft to be an air 
superiority and ground attack aircraft with advanced features to make 
it less detectable to adversaries, capable of high speeds for long 
ranges, and able to provide a pilot with improved awareness of the 
surrounding situation. The ability to engage targets on the ground is 
being expanded to provide a robust capability not originally planned at 
the start of the program.[Footnote 1] The Air Force plans to begin 
initial operational test and evaluation (IOT&E) to demonstrate 
the aircraft's operational effectiveness and suitability in March 2004 
and to seek full rate production approval in December 2004.

The National Defense Authorization Act for Fiscal Year 1998 requires 
us to assess the Air Force's F/A-22 development program annually and 
determine whether the Air Force is meeting key performance, schedule, 
and cost goals.[Footnote 2] The Chairman of the Subcommittee on 
Tactical Air and Land Forces, House Committee on Armed Services, asked 
us to continue monitoring the F/A-22 development program during a 
hearing on April 2, 2003. On April 23, 2003, the Subcommittee on 
National Security, Emerging Threats, and International Relations, House 
Committee on Government Reform, asked the Department of Defense (DOD) 
to provide more detailed information on the business case that supports 
the estimated quantities and costs for an affordable F/A-22 program. In 
response to the concerns and directions of these various committees, 
we (1) identified changes in the F/A-22 program since its inception, 
(2) reviewed the status of the development activities, and (3) examined 
the sufficiency of business case information provided for congressional 
oversight.

We performed our work from July 2003 through March 2004 in accordance 
with generally accepted government auditing standards.

Results in Brief:

The F/A-22 program has experienced several significant changes since it 
began development in 1986. First, the Air Force cannot afford to 
purchase the quantities of aircraft that were planned 18 years ago. The 
Air Force had originally planned to buy 750 aircraft, but it now 
estimates it can only afford 218 aircraft under the congressionally 
imposed limit on production funding. Development costs have grown 
127 percent, to $28.7 billion, and the program could incur further cost 
growth before development and testing is completed. This reduction in 
buying power and increased costs are largely a result of the program's 
failure to base acquisition decisions on high levels of knowledge at 
critical junctures in the development program.[Footnote 3] Second, the 
Air Force has decided to add a robust air-to-ground attack capability 
not previously envisioned but now considered necessary to increase the 
utility of the aircraft. The Office of Secretary of Defense estimated 
the Air Force would need as much as $11.7 billion to develop the 
expanded capability. Lastly, the Air Force has determined that new 
avionics computer processors and architecture are needed to support 
some planned enhancements, which will further increase program costs 
and risk.

The development test program continues to experience problems and risks 
further delays. The F/A-22's advanced avionics system--which allows a 
pilot to have better control of information regarding the surrounding 
situation--frequently failed, delaying earlier testing, and must now be 
proven stable before IOT&E can start. The F/A-22's avionics system 
continues to experience shutdowns and failures. Recently, the Air Force 
established a new criterion to measure the stability of the avionics 
software and hardware and its readiness to begin IOT&E. The new 
criterion is more comprehensive but requires fewer hours of operation 
before a failure occurs than the original criterion. To date, the 
program has not met the new criterion. In addition, the F/A-22 program 
has not met its reliability requirements, resulting in aircraft 
spending more time on the ground undergoing maintenance. Further, 
the program has experienced failures in its computerized maintenance 
support system, which have prevented maintenance crews from correctly 
diagnosing and addressing problems on the aircraft. As a result of the 
problems with the development test program, the start of IOT&E has been 
delayed, and the time to complete it has been compressed by 4 months. 
Additional delays in completing IOT&E could jeopardize the full rate 
production decision in December 2004.

Due to significant changes to the program and the risks of future cost 
increases and schedule delays, a congressional subcommittee requested 
that DOD provide business case information on the F/A-22.[Footnote 4] 
However, the information provided by DOD did not address how 
many aircraft the Air Force needs to accomplish its missions, how many 
the Air Force can afford, and whether investments in new air-to-ground 
capabilities are needed. Instead, the information shows that the Air 
Force still plans to buy 277 F/A-22 aircraft despite estimates that 
state it can only afford 218 aircraft and the potential for further 
reduction in buying power from cost increases in the development 
program. In the past, reducing the amount of funds available in the 
procurement budget has offset development cost growth. This is a part 
of DOD's "buy to budget" plan. If the current congressionally imposed 
production cap of $36.8 billion is maintained and the Air Force uses 
more procurement funds to address higher development costs, the number 
of F/A-22 aircraft the Air Force could buy would be reduced.

We are making recommendations that DOD complete a new business case 
that justifies the continued need for the F/A-22 and determines the 
number of F/A-22 aircraft needed in its air-to-air and air-to-ground 
roles based on capabilities, need, alternatives, and constraints of 
future defense spending departmentwide. We also recommend that the 
results of IOT&E be provided to the defense committees prior to making 
the full rate production decision. In written comments on a draft of 
this report, DOD stated that it partially concurred with our 
recommendations.

Background:

The F/A-22 is planned to be an air superiority and ground 
attack aircraft with advanced features to make it less detectable to 
adversaries (stealth characteristics) and capable of high speeds for 
long ranges.[Footnote 5] It has integrated avionics that greatly 
improve pilots' awareness of the situation surrounding them. The 
objectives of the F/A-22 development program are to (1) design, 
fabricate, test, and deliver 9 F/A-22 development test aircraft, 2 
nonflying structural test aircraft, 6 production representative 
test aircraft, and 37 flight-qualified engines; (2) design, fabricate, 
integrate, and test the avionics; and (3) design, develop, and test the 
support and training systems. The F/A-22 is being developed under 
contracts with Lockheed Martin Corporation, the prime contractor (for 
the aircraft),and Pratt & Whitney Corporation (for the engine).

Following a history of increasing cost estimates to complete the 
development phase of the F/A-22 program, the National Defense 
Authorization Act for Fiscal Year 1998 established a cost limitation 
for both the development and the production.[Footnote 6] Subsequently, 
the National Defense Authorization Act of 2002 eliminated the cost 
limitation for the development, but it left the cost limit for the 
production.[Footnote 7] The production program is now limited to 
$36.8 billion.[Footnote 8] The current cost estimate of the development 
program is $28.7 billion.

Currently, the F/A-22 program is both in development and production. 
Development is in its final stages, and production has been ongoing 
since fiscal year 1999.

The aircraft's development problems and schedule delays in completing 
flight testing have led to congressional concerns. The National Defense 
Authorization Act for Fiscal Year 2004 prohibited the obligation of 
$136 million in procurement funds until the Under Secretary of Defense, 
Acquisition, Technology, and Logistics, submitted to the congressional 
defense committees, among other things, a certification that the 
avionics software installed on test aircraft can operate at least 
5 hours on average before certain types of avionics anomalies occur. 
The Under Secretary of Defense, Acquisition, Technology, and Logistics, 
the final authority in making acquisition decisions in DOD, has also 
included this criterion as a requirement for the F/A-22 program before 
entering IOT&E .

Significant Changes Have Occurred in the F/A-22 Program during Nearly 
Two Decades of Development:

The F/A-22 program has experienced several significant changes since it 
began development in 1986. First, the Air Force cannot afford to 
purchase the quantities of aircraft that were originally planned 
18 years ago. This reduction in buying power is attributed, in a large 
part, to increases in development time and cost due to the program's 
failure to employ a knowledge-based acquisition approach to developing 
the F/A-22. Second, in September 2002, the Air Force decided to add a 
more robust air-to-ground attack capability than previously envisioned 
but now deemed needed to increase the utility of the aircraft. This 
capability will add significant cost to the program over the next 
10 years. Lastly, the Air Force has determined that new computer 
processors and architecture are needed to support some planned 
enhancements, which will further increase program costs and risk.

Delays and Higher Costs Have Reduced DOD's Buying Power:

Since the F/A-22 acquisition program started in 1986, cost and schedule 
estimates have grown significantly, thus contributing to a loss in 
buying power. Development costs are now estimated at $28.7 billion, a 
127 percent increase over the 1986 estimates. Planned development cycle 
time has grown from 9 years to 19 years, and the initial operational 
capability date has slipped over 9 years, from March 1996 to December 
2005. These schedule extensions, delays, and cost increases were major 
contributors to changes in the Air Force's initial plan to purchase 
750 aircraft. Current Air Force budget estimates include plans to 
purchase 277 aircraft. Table 1 shows the changes in the F/A-22 program 
since its start in 1986 based on information provided in Selected 
Acquisition Reports[Footnote 9] over time.

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]

In our 1988 report, the average unit procurement cost was estimated by 
the Air Force to be $69 million.[Footnote 10] Today, after schedule 
delays and development problems, the estimated average unit procurement 
costs have grown to $153 million--almost a 122 percent increase. The 
Air Force does not expect the development program to be completed until 
2005 and with IOT&E still to be completed, the possibility of 
additional changes and costs is likely.

As we previously reported,[Footnote 11] the acquisition approach of the 
F/A-22 program has contributed to cost increases and delays in 
schedule. 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. Further, product enhancements are planned for subsequent 
development efforts only when technologies are proven to be mature and 
other resources are available. Our work has shown that commercial firms 
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.

In contrast, the F-22 acquisition strategy from the outset was to 
achieve full capability in a "big bang" approach instead of evolving 
development in manageable increments of new capability. By not using an 
evolutionary approach, the Air Force took on significant risk and 
onerous technology challenges. The three critical technologies that 
were immature at the start of the program included 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 overall result has been significant delays and 
substantially higher investments to buy over 60 percent fewer aircraft.

Additional Investments Needed to Expand F/A-22 Capability:

Developing an expanded air-to-ground attack capability for the F/A-22 
will be costly and add risk to the program. The Air Force began 
development of the F/A-22 as a replacement for the F-15 air superiority 
fighter with primary emphasis on the air-to-air role. It was never 
intended to have robust air-to-ground capability. Its need was based on 
a projection that the Soviet Union would develop and produce large 
numbers of advanced fighter aircraft. The F/A-22 was intended to 
identify, track, and kill advanced fighters before it was targeted, 
giving it the edge and making it a more lethal and survivable aircraft 
than an F-15. However, the original Soviet threat never materialized. 
To enhance the utility of the F/A-22, the Air Force plans to develop a 
robust air-to-ground attack capability to be able 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.

The Air Force has a modernization program to improve the capabilities 
of the F/A-22 focused largely on a new robust air-to-ground capability. 
It has five developmental spirals planned over more than a 10-year 
period, with the initial spiral started in 2003. Table 2 shows each 
spiral as currently planned. In March 2003, the Office of Secretary of 
Defense's Cost Analysis Improvement Group (CAIG) 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: 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: 
$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]

New Computer Architecture and Avionics Processors Needed to Support 
Expanded Capability:

To support the F/A-22's expanded capability beyond Global Strike 
Enhanced, the Air Force has determined that its baseline computer 
architecture and critical avionics processors will need to be replaced. 
Current processors are old and obsolete, cannot be supported, and do 
not have sufficient capacity to meet the increased processing demands 
required for planned new air-to-ground capabilities beyond Global 
Strike Enhanced. As a bridge to meet this expanded capability, the Air 
Force plans to modify some avionics processors and purchase sufficient 
quantities to support production of the first 155 F/A-22 aircraft.

The F/A-22 is dependent on its onboard computers and software to 
perform its mission. Unlike other fighter aircraft, it has a highly 
advanced, integrated avionics system capable of detecting, identifying, 
and engaging the enemy at ranges beyond a pilot's vision. The key to 
the F/A-22 avionics lies in its fully integrated core architecture and 
its two central, networked computers called common integrated 
processors (CIP). CIPs use very high-speed integrated circuits to 
collect, process, and integrate data and signals from the aircraft's 
sensors. CIP serves as the "brains" for the F/A-22's integrated 
avionics system and is unique to this aircraft.

The primary processor in CIP is the Intel i960MX 
microprocessor,[Footnote 12] which is used strictly for avionics 
processing. This microprocessor is based on 1990's technology and has a 
32-bit processor that operates at speeds of 25mhz. By today's 
technology standards, the processor is considered obsolete and cannot 
support spiral developments beyond the Global Strike Enhanced. In mid-
2003, the manufacturer of the microprocessor informed the Air Force 
that it planned to permanently shut down the i960MX production line by 
January 2004 because the microprocessor was no longer a viable product 
for the company.

As a result, the Air Force decided in November 2003 to replace its 
computer architecture and avionics processors to support the F/A-22's 
expanded capabilities. In December 2003, the Air Force purchased its 
last i960MX microprocessors when it bought 820 of the microprocessors. 
According to program officials, this quantity and previously purchased 
quantities are sufficient to support production of 155 F/A-22 aircraft. 
These officials believe that with some minor upgrades to improve 
processing capacity, these processors will be able to support the 
baseline aircraft and the developmental spirals--Global Strike Basic 
and Global Strike Enhanced. However, the Air Force plans for the 
remaining production aircraft to include a new computer architecture 
and avionics processor needed to support the final two planned spirals-
-Global Strike Full and Enhanced Intelligence, Surveillance, and 
Reconnaissance.

At the time of our review, the Air Force believed its best long-term 
solution to its avionics architecture and computer-processing 
shortfalls was a new, modern, open system architecture. Rather than 
start a new development program, the program office plans to leverage 
two other ongoing Air Force development or modification programs for 
this processing capability: the new architecture being developed for 
the F-35 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, this new architecture will be state-of-the-art and 
will have ample processing capacity to accommodate all future air-to-
ground capabilities as currently planned. These officials 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.

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. 
Nevertheless, 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 i960MX microprocessor. 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.

Remaining Development and Operational Testing Could Impact F/A-22 
Program Outcomes:

The F/A-22 program did not meet key testing goals established for 
fiscal year 2003 and required for the aircraft to begin IOT&E testing. 
The Air Force's efforts to stabilize avionics software and improve its 
performance have not been sufficiently demonstrated, and entrance 
criterion previously set for starting IOT&E testing has been changed. 
In addition, the F/A-22 program is not performing as expected in some 
other key performance areas, including reliability and maintenance 
support. The ongoing problems have led to a revised test schedule, 
which has compressed the time to complete initial operational testing 
by 4 months, and have increased the potential for cost increases and 
delays in the full rate production decision. The program has made 
progress in correcting several of the design problems we identified in 
our March 2003 report.

Air Force Changed Avionics Performance Criterion to Start Operational 
Testing:

The Air Force changed the avionics stability metric planned as a 
criterion to enter IOT&E from an average of 20 hours between avionics 
software failures to a broader measure of an average of 5 hours between 
avionics software or hardware failures. Current testing shows the 
program continues to have problems meeting the new and old avionics 
stability metrics.

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. The metric was Mean Time 
Between Instability Events (MTBIE)[Footnote 13] and tracked two 
distinct types of avionics software failures:

* Hard failures (type 1) that were the most serious resulting in a 
complete avionics system shutdown requiring the need to restart the 
avionics system.

* Significant failures (type 2) that were less serious failures but 
required the pilot to restart an individual subsystem that failed 
versus the complete avionics system.

Using personal computers as an analogy, a type 1 failure would be 
equivalent to a failure of one's personal computer that requires it to 
be shut down and rebooted, except that the time to restart the F/A-22 
avionics system could take substantially longer. A type 2 failure would 
be equivalent to a failure in a particular application, such as the 
word processing program shutting down. Even with such a failure, other 
software applications could still be operated while the word processing 
software was restarted. Likewise, in the case of the F/A-22, other 
applications would still be operable despite the failure of any single 
application, such as a shutdown in the communication, navigation, and 
identification system.

In July 2003, the Air Force decided to switch to a different metric--
Mean Time Between Avionics Anomaly (MTBAA)--to measure the performance 
of the avionics software for the start of IOT&E. Two main differences 
between the new metric and its predecessor are the new metric 
(1) includes hardware and some subsystem software failures not 
previously counted and (2) requires a failure rate based on an average 
of 5 hours without experiencing avionics anomalies, instead of 
20 hours. According to Air Force operational test officials, they 
adopted this new metric because they believe it is a better measure of 
the avionics operational performance needed to start IOT&E, whereas the 
previous metric was more technically focused on software performance, 
excluding hardware failures. They also said the 5-hour criterion would 
provide a minimum amount of effective operational test time to 
efficiently conduct IOT&E. In turn, Congress included the new metric in 
the National Defense Authorization Act for Fiscal Year 2004.[Footnote 
14] Testing as of January 2004 showed the program had achieved 
2.7 hours--54 percent of the requirement. Once this criterion is 
achieved, the avionics must still undergo rigorous operational testing 
to demonstrate its effectiveness and suitability in a realistic 
environment. Figure 1 shows the status of the MTBIE and MTBAA metrics.

Figure 1: Status of F/A-22 Avionics Metrics, as of January 2004:

[See PDF for image]

Note: MTBIE is no longer tracked by the Air Force.

[End of figure]

The figure shows that MTBIE, the previous criterion, was demonstrated 
at about 67 percent of the requirement. In addition, the type 1 
failures, causing a complete shutdown of the avionics system, have 
significantly diminished. They 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. Type 2 
failures are still occurring frequently. While less serious when 
compared to the entire avionics suite shutting down, type 2 failures 
become serious if critical subsystem software shuts down when its 
function is needed for the success of the mission or survivability of 
the aircraft.

In September 2003, the F/A-22 contractor reported a high number of 
outstanding avionics Common Problem Reports.[Footnote 15] Of the 231 
reports of problems not resolved, about 25 (or 11 percent) were 
identified as stability-related problems. The remaining 206 reports 
(89 percent) were the result of avionics performance or functional 
problems. For example, the communication, navigation, and 
identification subsystem accounted for nearly 36 percent of the total 
reports. Because the avionics system is essential to the success of the 
F/A-22, the integrated avionics still needs to be demonstrated to meet 
design specifications and operational requirements. Reductions in 
avionics performance could affect the ability of the F/A-22 to 
effectively carry out its expected missions.

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 best practice approach. The Air Force 
established reliability requirements to be achieved at the completion 
of development and at system maturity.[Footnote 16] 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 the development test aircraft spending more time than planned on the 
ground undergoing maintenance.

During 2003, the Air Force identified 68 parts that had a high rate of 
failure causing them to be removed or replaced, 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. A second manufacturer 
for canopies is being developed, but until it has passed qualification 
testing, it cannot be used as an alternative source for the high 
failing canopies.

Best commercial practices for new product development require 
reliability to be demonstrated by the start of production. 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, test, analyze, and redesign.[Footnote 17] 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.

Immaturity of Maintenance Support Systems:

The F/A-22 is designed to have a computerized and paperless maintenance 
system that monitors, diagnoses, identifies, and reports failures to 
maintenance crews and that is intended to allow a faster maintenance 
turnaround to flight status. The onboard Diagnostics Health and 
Management system constantly monitors the aircraft's systems and the 
performance of both hardware and software. It collects, analyzes, 
stores, and reports failures. Critical failures are reported to the 
pilot, and all failures are stored in a portable database for later use 
by ground maintenance crews. At the completion of a flight, the 
database is removed from the aircraft and is downloaded into a system 
on the ground, the Integrated Management Information System, which is a 
network of computers the maintainers use to process the maintenance and 
support information. This system further analyzes the downloaded 
information to determine the problems and match failures with the 
appropriate digitized technical order data needed to make the repairs. 
This information is then loaded into handheld portable computers that 
the technicians use to repair the aircraft.

According to DOD and Air Force test officials, these systems have been 
generating false reports of failures, which have caused maintenance 
staff to spend more hours than planned replacing items unnecessarily 
and trying to identify the actual problems. In addition, the 
maintenance systems are not providing all the technical data needed to 
repair the aircraft, thus making it more difficult to make repairs. 
According to the test officials, they do not have precise data to 
quantify the extent of the problems, and they said it has disrupted 
maintenance activities. A key indication has been the inability to 
fly aircraft as planned. We found that between October 2003 and January 
2004 the test force could only fly about 53 percent of the planned test 
flights and that the maintenance problems were a key contributor to 
this poor flying performance.

Air Force officials do not expect the maintenance systems to be fully 
matured until December 2005. Consequently, the program office has had 
to provide additional funding to the contractor to purchase special 
test equipment that will be used to support maintenance requirements 
during operational testing. Moreover, because these systems will not be 
fully available during the operational testing, it may be difficult to 
assess the systems' real performance.

Problems in the Development Program Have Led to Further Delays and 
Changes in Operational Testing:

Progress in F/A-22 flight testing was slower than expected in 2003, and 
start of IOT&E was delayed an additional 7 months due to avionics and 
other problems. 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 included 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 to conduct live air-to-air missile shots, fly one-ship 
and two-ship formation operational sorties, and assess the computerized 
maintenance system's maturity. It will include some flight tests that 
are planned to be repeated in IOT&E if the aircraft configuration 
changes.

* 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 integrated avionics 
will be able to operate for sufficient lengths of time, without 
shutting down. Other criteria that must be met prior to IOT&E include 
the availability of four fully configured F/A-22 test aircraft and one 
spare aircraft, the completion of live missile shots, the completion of 
key aircraft flight envelope testing (planned speed, altitude, and 
maneuver boundaries of the F/A-22), the completion of operational pilot 
and maintenance training, a useable system with technical data to fix 
problems, and the software upgrades to the maintenance system.

Figure 2 compares the changes in the planned test program since our 
last report.

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[Footnote 18] is scheduled to review the F/A-22's 
readiness for IOT&E in March 2004.

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 19]. There 
is no consensus within DOD on the Air Force's ability to meet this 
October 2004 milestone. The Director of Operational Test and 
Evaluation, Office of Secretary of Defense, believes the start of 
testing will slip, although the Air Force maintains it will meet its 
schedule.

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.

DOD Did Not Provide Congress Sufficient Business Case Information to 
Justify Current Aircraft Quantities or Modernization Investment Plans:

DOD has not provided Congress with sufficient information to support 
the business case for buying and modernizing the F/A-22 program. In our 
testimony of April 11, 2003, before the Subcommittee on National 
Security, Emerging Threats, and International Relations, House 
Committee on Government Reform, we stressed that the issue was not 
whether the F/A-22 should be produced, but rather in what quantities it 
is needed--as justified by a business case. We discussed the current 
and future environments in which the F/A-22 investment decision would 
have to be made, including the need to consider opportunity costs 
inside and outside DOD. DOD has planned investments over the next 
several years, on average $150 billion a year, to keep legacy systems 
working while at the same time modernizing and transforming U.S. 
national defense capabilities for the future. The F/A-22 program 
represents a sizable investment and must compete with other demands 
within the defense budget. This competition requires a knowledge-based 
approach to justify acquisition investment decisions and an efficient 
acquisition process to ensure programs are implemented within 
expectations set in associated business cases.

Since the start of the F/A-22 program, acquisition costs have 
increased, the aircraft's mission and key capabilities have expanded, 
fewer quantities are affordable, and delivery to the user has been 
delayed. The Air Force currently estimates the total F/A-22 acquisition 
program will cost about $72 billion, excluding all costs estimated to 
complete the spiral improvement effort. 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 this investment 
has been funded.

In light of the changes in the program and investments that remain, the 
Subcommittee on National Security, Emerging Threats, and International 
Relations, House Committee on Government Reform, asked DOD to provide a 
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, for an estimated $8 billion 
to $12 billion investment, 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 business case did not establish a 
justification for this investment or state what alternatives were 
considered. For example, the F-35 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 Congress 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. Under the "buy 
to budget" approach, the previous $876 million increase in development 
costs was funded by taking funds mostly from production, 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.

Conclusions:

While DOD and the Air Force are focused on completing IOT&E and making 
a decision to go into full rate production, a more basic issue needs to 
be addressed. The conditions driving the business case that spurred the 
major investment decision to initially develop and buy 750 
F-22 aircraft have changed. A revised and comprehensive business case 
assessment has not been completed and shared with congressional defense 
oversight committees. At the present time, it is uncertain how many F/
A-22s are needed. The program has been in development for about 
18 years, and DOD has invested over $40 billion. This investment 
represents about one-half the estimated costs projected for the entire 
F/A-22 program. Therefore, DOD must still make investment decisions 
affecting another $40 billion to support this program through full rate 
production and implementation of the spiraled modernization effort. 
Based on current design problems and the development efforts that 
remain, the F/A-22 program's affordability is uncertain. Current 
conditions suggest the Air Force cannot afford to buy much more than 
218 aircraft within the cost limitation imposed by Congress.

In light of the uncertainty concerning how many aircraft are needed in 
today's environment, the large investments that remain, and the unknown 
outcomes of planned initial operational testing, we continue to be 
concerned with DOD's readiness to address a December 2004 decision to 
enter full rate production. Furthermore, IOT&E, intended to demonstrate 
the F/A-22 effectiveness and suitability, has not started and may not 
be completed as planned, which may delay the full rate production 
decision. With this testing outstanding, the risk is high that 
additional development funding will be needed to resolve problems that 
could result.

Recommendations for Executive Action:

Given the sizable investment that remains in the F/A-22 program, the 
uncertainties, and the ever changing financial demands of DOD, Congress 
and the Secretary of Defense would benefit from a comprehensive 
assessment of the number of F/A-22 aircraft needed as well as assurance 
that problems identified in initial operational testing will be 
identified and resolved. Specifically, we recommend that the Secretary 
of Defense take the following two actions:

* Complete a new business case analysis that determines the continued 
need for the F/A-22 and that specifically (a) addresses the need for an 
expanded air-to-ground capability and an assessment of alternatives, to 
include the feasibility of using other assets like the F-35 and 
unmanned aerial vehicles planned for the future; (b) justifies the 
quantity of F/A-22 aircraft needed to satisfy requirements for air-to-
air and air-to-ground missions; and (c) provides evidence that the 
planned quantity is affordable within current budgets and the 
congressional funding limitation. The Secretary should provide the 
results of the business case analysis to the defense committees before 
the decision to start full rate production.

* Before the full rate production decision is made and in conjunction 
with the Beyond Low-Rate Initial Production Report, provide the defense 
committees a plan that shows how the Air Force will correct and fund 
any major problems identified and still open after IOT&E is completed.

Agency Comments and Our Evaluation:

In written comments on a draft of this report, DOD stated that it 
partially concurred with our two recommendations. Regarding our first 
recommendation on completing a new business case for the F/A-22, DOD 
stated 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; the F/A-22 will be a part 
of this review. The President's budget submission to Congress will 
reflect the results of these review efforts of the F/A-22 business 
case.

We believe that the various reviews and assessments in the budget 
process along with the Joint Capabilities Review process present 
excellent opportunities for DOD to conduct a business case analysis. 
Other opportunities for completing the business case analysis include 
the independent and in-depth study requested by the Office of 
Management and Budget for the Comanche and F/A-22 programs. It is 
important, however, that the analysis sufficiently address the specific 
business case elements included in our recommendation--analysis of 
continued need, need for expanded air-to-ground capability, assessment 
of alternatives, justification of needed quantities, and evidence that 
planned quantities are affordable. In addition, it is important that 
the outcomes of the business case analysis are provided to the Congress 
prior to the full rate production decision.

Regarding our second recommendation on providing Congress the plans 
to resolve outstanding problems after the completion of IOT&E, DOD 
stated that the law already requires the Director, Operational Test and 
Evaluation, to submit to Congress a Beyond Low Rate Initial Production 
Report that includes the results of operational testing. Since this 
report is an independent assessment of test results, the department did 
not believe it appropriate to include in it Air Force plans and costs 
for corrective actions stemming from operational testing. However, DOD 
will present these actions and costs to the Defense Acquisition Board 
for decisions on the F/A-22 program that will be included in the 
President's budget submission to Congress.

We understand the legal requirements for submitting the Beyond Low Rate 
Initial Production Report. We also recognize that this is an 
independent report submitted by the Director, Operational Test and 
Evaluation. The intent of our recommendation is not to modify the 
report itself, but to ensure corrective actions and resultant costs are 
identified and reported in a timely fashion and before the full rate 
production decision is made. Because plans and costs could span over 
several years, such information may or may not be captured in annual 
budget submissions. We have modified our recommendation to clarify our 
intent.

Scope and Methodology:

To determine changes in the F/A-22 program since its inception, we 
analyzed cost information from Selected Acquisition Reports and 
obtained information from the Air Force on its plans to modernize the 
F/A-22 to include enhanced air-to-ground capabilities. We compared 
prior cost information with the Air Force's current estimates to 
complete development and production of the F/A-22.

To determine the impact of development and testing on program outcomes, 
we examined the extent to which the development program is meeting 
planned flight test goals for 2003 and the Air Force's planned entry 
criterion for starting initial operational testing.

In examining sufficiency of the business case DOD provided to a 
congressional oversight committee, we obtained a copy of the business 
plan and analyzed the various DOD assumptions and approaches used to 
make the assessment conclusions.

In making these determinations, assessments, and identifications, we 
required access to current information about test results, performance 
estimates, schedule achievements and revisions, costs being 
incurred, aircraft modifications, and the program's plans for continued 
development and initial production. The Air Force and the contractors 
gave us access to sufficient information to make informed judgments on 
the matters covered in this report.

In performing our work, we obtained information or interviewed 
officials from the Office of the Secretary of Defense, Washington D.C; 
the F/A-22 System Program Office, Wright-Patterson Air Force Base, 
Ohio; Lockheed-Martin, Marietta, Georgia; the Defense Contract 
Management Agency, Marietta, Georgia; the Air Force Operational Test 
and Evaluation Center, Kirkland Air Force Base, New Mexico; and the 
Combined Flight Test Center, Edwards Air Force Base, California.

We are sending copies of this report to the Secretary of Defense; the 
Secretary of the Air Force; and the Director, Office of Management and 
Budget. Copies will also be made available to others on request. In 
addition, the report will be available at no charge on the GAO Web site 
at http://www.gao.gov.

Please contact me at (202) 512-4841 or Michael J. Hazard at (937) 258-
7917 if you or your staff have any questions concerning this report. 
Major contributors to this report are listed in appendix II.

Allen Li Director Acquisition and Sourcing Management:

List of Congressional Committees:

The Honorable John Warner: 
Chairman: 
The Honorable Carl Levin: 
Ranking Minority Member: 
Committee on Armed Services: 
United States Senate: 
 
The Honorable Ted Stevens: 
Chairman: 
The Honorable Daniel K. Inouye Ranking: 
Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
United States Senate: 
 
The Honorable Duncan Hunter: 
Chairman: 
The Honorable Ike Skelton: 
Ranking Minority Member: 
Committee on Armed Services: 
House of Representatives: 
 
The Honorable Jerry Lewis: 
Chairman: 
The Honorable John P. Murtha: 
Ranking Minority Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives: 

Appendix I: Comments from the Department of Defense:

OFFICE OF THE UNDER SECRETARY OF DEFENSE:

3000 DEFENSE PENTAGON 
WASHINGTON, DC 20301-3000:

ACQUISITION, TECHNOLOGY AND LOGISTICS:

4 MAR 2004:

Mr. Allen Li:

Director, Acquisition and Sourcing Management: 
U.S. General Accounting Office:

Washington, DC 20548:

Dear Mr. Li:

This is the Department of Defense (DoD) response to the General 
Accounting Office (GAO) draft report, "TACTICAL AIRCRAFT: Changing 
Conditions Drive Need for New F/A-22 Business Case," dated March, 2004 
(GAO Code 120239/GAO-04-391).

The DoD partially concurs with the draft report's first recommendation, 
and partially concurs with the second recommendation. The rationale for 
the DoD's position is provided at enclosure 1. Enclosure 2 provides 
additional comments and suggested changes to the report.

The Department appreciates the opportunity to comment on the draft 
report. For further questions concerning this report, my point of 
contact for this report is Mr. David Hersh, (703) 697-3619, 
david.hersh@osd.mil.

Sincerely,

Signed by: 

Glenn F. Lamartin, 
Director 
Defense Systems:

Enclosures:

1. DoD comments to The GAO Recommendations 
2. DoD comments on the Draft Report:

GAO Draft Report Dated January 28, 2004 GAO-04-391 (GAO Code 120239):

"TACTICAL AIRCRAFT: CHANGING CONDITIONS DRIVE NEED FOR NEW F/A-22 
BUSINESS CASE":

DEPARTMENT OF DEFENSE COMMENTS TO THE GAO RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
complete a new business case analysis that determines the continued 
need for the F/A-22, and that the Department provide the results of 
this analysis to the Defense Committees before the Full Rate Production 
Decision. (Pg. 24/GAO Draft Report):

DOD RESPONSE: The DoD partially concurs with this recommendation. The 
Department evaluates the F/A-22 business case, program progress, need 
for the aircraft, and quantities required, as a part of our routine 
acquisition and budget processes. These processes include regularly 
scheduled reviews by the Defense Acquisition Board (DAB). The DAB makes 
necessary program adjustments that support development of the 
President's budget. This year, the Department will also be undertaking 
a broader set of reviews of selected capability areas under the 
framework of the Joint Capabilities Review process, introduced last 
year by Secretary Rumsfeld. DoD will be studying major aviation program 
plans, including F/A-22, as a part of this review. The President's 
budget submission to Congress will reflect the results of the 
Department's reviews of the F/A-22 business case.

RECOMMENDATION 2: The GAO recommended that before the Full Rate 
Production decision, the Secretary of Defense provide the results of 
the Initial Operational Test and Evaluation testing to the defense 
committees, along with a plan that shows how the Air Force will correct 
and fund any major problems identified and still open after this 
operational testing is completed. (Pg. 24/GAO Draft Report):

DOD RESPONSE: The DoD partially concurs with this recommendation. In 
accordance with Section 2399 of title 10, United States Code, the 
Director, Operational Test and Evaluation (DOT&E) will submit a Beyond 
Low Rate Initial Production (BLRIP) report to the congressional defense 
committees following Initial Operational Test and Evaluation. The BLRIP 
report will provide DOT&E's evaluation of the operational testing 
results, and it may recommend further testing and evaluation. Since the 
BLRIP report is an independent assessment, it will not include an Air 
Force plan for corrective action. However, before granting approval of 
Full Rate Production of the F/A-22, the Defense Acquisition Executive 
will review the Air Force's plans to correct any deficiencies 
identified in IOT&E. The President's budget submission to the Congress 
will reflect these plans.

enclosure (1): 

[End of section]

Appendix II: GAO Staff Acknowledgments:

Acknowledgments:

Marvin E. Bonner, Edward Browning, Roger Corrado, Steve Hunter, Gary 
Middleton, and Robert Ackley made key contributions to this report.

[End of section]

Related GAO Products:

Best Practices: Better Acquisition Outcomes Are Possible If DOD Can 
Apply Lessons from F/A-22 Program. GAO-03-645T. Washington, D.C.: April 
11, 2003.

Tactical Aircraft: Status of the F/A-22 Program. GAO-03-603T. 
Washington, D.C.: April 2, 2003.

Tactical Aircraft: DOD Should Reconsider Decision to Increase F/A-22 
Production Rates While Development Risks Continue. GAO-03-431. 
Washington, D.C.: March 14, 2003.

Tactical Aircraft: DOD Needs to Better Inform Congress about 
Implications of Continuing Cost Growth. GAO-03-280. Washington, D.C.: 
February 28, 2003.

Tactical Aircraft: F-22 Delays Indicate Initial Production Rates Should 
Be Lower to Reduce Risks. GAO-02-298. Washington, D.C.: March 5, 2002.

Tactical Aircraft: Continuing Difficulty Keeping F-22 Production Costs 
Within the Congressional Limitation. GAO-01-782. Washington, D.C.: 
July 16, 2001.

Tactical Aircraft: F-22 Development and Testing Delays Indicate Need 
for Limit on Low-Rate Production. GAO-01-310. Washington, D.C.: 
March 15, 2001.

Defense Acquisitions: Recent F-22 Production Cost Estimates Exceeded 
Congressional Limitation. GAO/NSIAD-00-178. Washington, D.C.: 
August 15, 2000.

Defense Acquisitions: Use of Cost Reduction Plans in Estimating 
F-22 Total Production Costs. GAO/T-NSIAD-00-200. Washington, D.C.: 
June 15, 2000.

Budget Issues: Budgetary Implications of Selected GAO Work for 
Fiscal Year 2001. GAO/OCG-00-8. Washington, D.C.: March 31, 2000.

F-22 Aircraft: Development Cost Goal Achievable If Major Problems Are 
Avoided. GAO/NSIAD-00-68. Washington, D.C.: March 14, 2000.

Defense Acquisitions: Progress in Meeting F-22 Cost and Schedule Goals. 
GAO/T-NSIAD-00-58. Washington, D.C.: December 7, 1999.

Fiscal Year 2000 Budget: DOD's Production and RDT&E Programs. GAO/
NSIAD-99-233R. Washington, D.C.: September 23, 1999.

Budget Issues: Budgetary Implications of Selected GAO Work for Fiscal 
Year 2000. GAO/OCG-99-26. Washington, D.C.: April 16, 1999.

Defense Acquisitions: Progress of the F-22 and F/A-18E/F Engineering 
and Manufacturing Development Programs. GAO/T-NSIAD-99-113. 
Washington, D.C.: March 17, 1999.

FOOTNOTES

[1] As a result, in September 2002 the Air Force changed the aircraft's 
designation from F-22 to F/A-22, which includes increased emphasis on 
acquiring an improved air-to-ground capability.

[2] Pub.L.105-85 (Nov. 18, 1997), section 217.

[3] 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 these best practice acquisition concepts in the F/A-22 
program 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.

[4] The Subcommittee on National Security, Emerging Threats, and 
International Relations, House Committee on Government Reform, 
requested the F/A-22 business case information as a result of the April 
11, 2003, hearings.

[5] Air superiority is the degree of air dominance that allows the 
conduct of operations by land, sea, and air forces without prohibitive 
interference by the enemy.

[6] Pub. L. 105-85 (Nov. 18, 1997), section 217.

[7] Pub. L. 107-107 (Dec. 28, 2001), section 213.

[8] The cost limitation, before adjustment under the act's provisions, 
was $43.4 billon.

[9] Selected Acquisition Reports are standard, comprehensive, summary 
status reports of major defense acquisition programs (acquisition 
category 1) required for periodic submission to Congress. They include 
key cost, schedule, and technical information.

[10] U.S. General Accounting Office, Aircraft Development: The Advanced 
Tactical Fighter's Costs, Schedule, and Performance Goals, GAO/NSIAD-
88-76 (Washington, D.C.: Jan. 13, 1988).

[11] GAO-03-645T.

[12] The i960MX microprocessor is a registered trademark of the Intel 
Corporation.

[13] MTBIE is the ratio of the total hours the avionics are turned on 
divided by the number of countable instability events averaged over 
multiple flights. It was derived by conducting dedicated stability 
flights, nominally six flights of 2.5 hours duration each.

[14] Pub. L. 108-136 (Nov. 24, 2003), section 133.

[15] Common Problem Reports are used to identify problems within 
the aircraft avionics.

[16] 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.

[17] 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).

[18] 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.

[19] 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. 

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