Tactical Aircraft: F-22 Development and Testing Delays Indicate  
Need for Limit on Low-Rate Production (15-MAR-01, GAO-01-310).	 
                                                                 
The Air Force has made progress in developing the F-22, 	 
particularly with respect to fulfilling the criteria for awarding
a fully funded contract for low-rate initial production.	 
Nevertheless, it lags significantly in flight-testing because of 
continuing assembly and manufacturing delays, and it is behind	 
schedule in completing nonflying tests that assess the aircraft's
structural integrity These delays increase the risk that the Air 
Force will likely have to extend the test program past the	 
planned completion date or proceed to the next stages of the	 
program without completing all flight-tests. Moreover, the	 
scheduling delays increase the likelihood that costs will not	 
fall within the congressional cap. The Director of Operational	 
Test and Evaluation has indicated that, on the basis of the test 
program's current status, operational testing cannot be started  
as scheduled without clearly unacceptable risks and will probably
be delayed almost a year. The Director also concluded there was  
no reason to authorize low-rate production in January 2001 and	 
some justification to delay it. Cost growth in the development	 
program because of manufacturing and design problems and	 
underestimated amounts of labor required to complete scheduled	 
tasks points to a lack of stability in both design and		 
fabrication.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-310 					        
    ACCNO:   164612						        
  TITLE:     Tactical Aircraft: F-22 Development and Testing Delays   
Indicate Need for Limit on Low-Rate Production			 
     DATE:   03/15/2001 
  SUBJECT:   Air Force procurement				 
	     Cost overruns					 
	     Defense capabilities				 
	     Defense cost control				 
	     Fighter aircraft					 
	     Future budget projections				 
	     Military budgets					 
	     Operational testing				 
	     Schedule slippages 				 
	     Weapons systems					 
	     Air Force F-22 Engineering and			 
	     Manufacturing Development Program			 
                                                                 
	     F-22 Aircraft					 

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GAO-01-310

                                       A

Report to Congressional Committees

March 2001 TACTICAL AIRCRAFT F- 22 Development and Testing Delays Indicate
Need for Limit on Low- Rate Production

GAO- 01- 310

Letter 3 Appendixes Appendix I: Air Force Assessment of Development and
Test

Criteria Required to Proceed to Low- Rate Initial Production 34

Appendix II: Comparison of Schedules for First Flight Dates of Test Ai r
craf t 35 Appendix III: Estimates of Performance for Key Parameters 36
Appendix IV: Comments From the Department of Defense 37 Appendix V: GAO
Staff Acknowledgments 39

Related GAO Products 40 Tabl es Table 1: Planned Versus Actual Assembly
Hours for Recently

Completed Aircraft 12 Table 2: Delays in Planned Completion of Static and
Fatigue

Structural Integrity Tests 18 Table 3: Additional Testing Required to
Fully Demonstrate F- 22

Capabilities 23 Table 4: Remaining F- 22 Development Funding 26 Table 5:
F- 22 Post- Development Funding Planned for Fiscal Years 2002 Through 2007
27

Figures Figure 1: Comparison of Actual and Planned Flight- Test Hours 11
Figure 2: Flight- Test Aircraft Delays From First Flight Dates to

Start of Flight- Testing at the Flight Test Center 13 Figure 3: Comparison
of Actual, Planned, and Needed Airframe

Flight- Test Point Accomplishment Rates 14 Figure 4: Planned Versus Actual
Avionics Flight- Test Hour

Accomplishment for 2000 16 Figure 5: Comparison of Actual and Projected
Cost Growth Above Budget, January Through December 2000

(Cumulative) 20

Lett er

March 15, 2001 Congressional Committees As you know, the Air Force is
developing the F- 22 aircraft* which is designed with advanced features to
allow it to be less detectable to adversaries, capable of high speeds for
long ranges, and able to provide the

pilot with substantially improved awareness of the surrounding situation
through the use of integrated aviation electronics (avionics). These
features are expected to permit the F- 22 to penetrate adversary airspace,

operate with limited interference, and destroy targets in the air as well
as on the ground. In view of past increases in cost estimates to complete
development, the National Defense Authorization Act for Fiscal Year 1998 1
limited the cost of F- 22 development to $20.443 billion, as adjusted
under the act*s provisions. The act requires us to annually assess whether
the Air Force*s engineering and manufacturing development program for the
F- 22 aircraft is meeting key goals. The act also requires us to assess
whether we had access to sufficient information to make informed judgments
on matters covered by our report. The Air Force began F- 22 engineering
and manufacturing development in

1991, and it planned in December 2000 to complete ground and flight-
testing in August 2002, to be followed by a year of operational tests and
evaluation to demonstrate the aircraft*s operational suitability and
effectiveness. Completion of operational tests and evaluation will mark
the

end of F- 22 development. Concurrent with these development activities,
the Air Force plans to initiate low- rate production of F- 22s, beginning
with 10 aircraft in fiscal year 2001. This increases to 16 aircraft in
fiscal year 2002. In March 2000, 2 we reported that the Air Force had made
progress in achieving its schedule goals and demonstrating expected F- 22
performance. However, some tests and scheduled activities were delayed
because of continuing problems delivering flight- test aircraft on time.
We also reported that, according to the Air Force, if these problems
persisted,

as much as 37 to 50 percent of the total planned flight- test program
would 1 P. L. 105- 85, Nov. 18, 1997. 2 F- 22 Aircraft: Development Cost
Goal Achievable If Major Problems Are Avoided (GAO/ NSIAD- 00- 68, Mar.
14, 2000).

not be completed as scheduled. Additionally, we reported that the Air
Force had identified potential cost growth but had planned to mitigate
this growth through offsetting cost reductions.

This report discusses (1) the extent to which the development program is
meeting its schedule, cost, and performance goals, including whether the
program is likely to be completed within the congressional cost
limitation; (2) the status of F- 22 modifications; (3) the development
plan for fiscal

year 2002; and (4) the Air Force*s plan to increase the annual rate of
initial production of F- 22 aircraft before the development program is
completed. This report was initially prepared based on the status and
progress of the F- 22 program through December 2000 and a draft was
provided to DOD for comments in January 2001. The report, for the most
part, identifies DOD*s progress in meeting goals through December 2000,
but also includes

information about activities and events that occurred in January through
early March 2001.

Results in Brief The F- 22 program did not meet its schedule goals for
2000, the cost to complete development as now planned may exceed the
congressionally established limitation, and the program is not far enough
along in flight- testing to confirm Department of Defense (DOD) estimates
of

weapon system performance. First, while progress was made toward achieving
test requirements to evaluate the aircraft*s capabilities, problems and
delays were encountered with the assembly and delivery of flight- test
aircraft. Test aircraft that were delivered were not ready for flight-
testing and the operations of the flight- test program were not as
efficient as

planned. These delays prevented the Air Force from completing the flight-
test hours planned for 2000, and, when coupled with delays from prior
years, make it unlikely that the flight- test program, as now structured,
can be completed by August 2002, as scheduled. It is also unlikely that
operational test and evaluation can be completed by August 2003. Second,

it appears unlikely that the development program can be completed as
scheduled within the current $20. 443 billion congressional cost
limitation. Furthermore, contractor cost growth and potential extension of
the flighttest program could generate additional costs that are not
considered in current cost estimates. On January 19, 2001, the Director,
Operational Test and Evaluation, advised the Secretary of the Air Force
and the Congress that the Air Force had provided a plan to extend
development tests by 4- to 6- months and that he had determined the 1.5-
percent increase in the cost

limitation was necessary to ensure adequate testing. 3 Consequently, the
Air Force plans to increase the cost limitation by 1.5 percent in the
spring of 2001. However, the Director also stated that the delay in
completing required testing might be longer than projected by the Air
Force. While an internal Air Force cost study recognized that the
estimated cost to complete development may increase by $126 million to
$297 million, the Air Force had not sought an increase in the
congressional limitation through March 6, 2001. Air Force officials
maintain they are currently prioritizing work to allow for completion
within the cost limitation but recognize that some development activities
could be delayed. Accordingly, some test activities could also be delayed
or dropped. Third, the Air Force continues

to project that by the time the development program ends, the F- 22 will
meet or exceed its performance goals. However, testing to demonstrate
performance is not far enough along to enable the Air Force to confirm its
projections. One performance goal that may be difficult to meet is the
average flight hours that can be achieved for an F- 22 without requiring

maintenance. With regard to the status of modifications or repairs, the
Air Force solved problems identified earlier with a casting used to attach
the wing to the aircraft body, and with unexpected stress in the aft
(rear)

fuselage of the aircraft. Manufacturing processes were changed and
previously delivered aircraft were modified. Air Force officials said that
they are continuing to address other problems.

The F- 22 development plan includes $860.4 million in fiscal year 2002
funding, mainly for completing the remainder of the development flight-
test program, finishing airframe structural testing and analysis, and
beginning

operational tests. The plan is consistent with completion of the
development program at a cost that meets the congressional limitation.
However, the plan does not address the need to extend the test program to
accommodate delays in accomplishing tests that both the Air Force and

Director, Operational Test and Evaluation have recognized, or the
possibility of increasing the congressional cost limitation to allow for
the costs associated with these delays.

The fiscal year 2001 Defense Appropriations Act provided funds for low-
rate initial production of 10 F- 22 aircraft and for advance procurement
for 16 F- 22s planned for procurement in fiscal year 2002. DOD plans to

3 The National Defense Authorization Act for fiscal year 2001 provided for
an increase to the cost limitation by up to 1.5 percent if the Director,
Operational Test and Evaluation determined the increase was necessary to
ensure adequate testing.

procure 24 aircraft in fiscal year 2003 and begin full- rate production of
36 aircraft a year in fiscal year 2004. In several reports over the last 6
years, we have concluded that DOD should minimize commitments to F- 22
production until completion of operational test and evaluation.
Flighttesting progress through December 2000, and an independent
assessment by the Director, Operational Test and Evaluation, reinforce our
prior

conclusion. Limiting low- rate initial production to no more than 10
aircraft a year* the quantity approved in fiscal year 2001 appropriations
and authorization acts* until completion of initial operational test and
evaluation would minimize risks.

As discussed in the scope and methodology section of this report, the Air
Force and contractors provided us access to sufficient information to make
informed judgments on the matters covered by this report. This report
includes a recommendation that the Air Force provide the Congress with
information and analysis in the form of a plan to complete testing.
Furthermore, in view of the amount of testing that has yet to be

completed, this report also includes a recommendation that initial
production be limited until completion of operational testing. In regard
to the first recommendation, DOD agreed there are concerns regarding

completion of development testing within the period remaining for
engineering and manufacturing development and that adjustments are needed
in the F- 22 program to ensure adequate development testing is completed
prior to entry into operational test and evaluation. In regard to the
second recommendation, DOD officials said they did not concur with the
recommendation and stated it was premature to comment on any

change in the rate of low- rate initial production, pending further
progress in a defense program review directed by the President. Background
The F- 22 is an air superiority 4 aircraft with advanced features to make
it less detectable to adversaries (stealth characteristics) and capable of
high

speeds for long ranges. It has integrated aviation electronics (avionics)
to greatly improve pilots* awareness of the situation surrounding them.
The objectives of the F- 22 development program are to (1) design,
fabricate, test, and deliver 9 F- 22 flight- test aircraft, 2 nonflying
structural test aircraft, 8 production representative test aircraft, and
37 flight- qualified

4 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.

engines; (2) design, fabricate, integrate, and test the avionics suite;
and (3) design, develop, and test the support and training systems. The F-
22 is being developed under contracts with Lockheed Martin Corporation
(for the aircraft) and Pratt & Whitney Corporation (for the engine).

Following a history of increasing cost estimates to complete development
of the F- 22, the National Defense Authorization Act for Fiscal Year 1998
5 established a cost limitation of $18.688 billion for F- 22 development
and a limitation of $43.400 billion for production. The act instructed the
Secretary

of the Air Force to adjust the cost limitation for the amounts of
increases or decreases in costs attributable to economic inflation after
September 30, 1997, and for compliance with changes in federal, state, and
local laws enacted after September 30, 1997. Congressional direction in
fiscal year 2000 legislation shifted six production representative test
aircraft to the development program and also caused the cost limitation to
be adjusted. Since implementation, the cost limitation has been adjusted
to its current amount of $20.443 billion.

For fiscal year 2000, the Air Force requested $1.6 billion for initial
production of six F- 22 aircraft. However, both authorization and
appropriations acts for fiscal year 2000 established further congressional
direction for the program. The authorization act 6 required that before
the Secretary of the Air Force executes a contract for low- rate initial
production of the F- 22, the Secretary of Defense has to certify:

1. that the test plan in the engineering and manufacturing development
phase of the program is adequate for determining the operational
effectiveness and suitability of the F- 22 aircraft and 2. that the
engineering and manufacturing development phase, and the

production phase for the F- 22 program can each be executed within the
congressionally mandated cost limitations. 7

If the Secretary of Defense is unable to make either of these
certifications then he is required to submit to the congressional defense
committees a report that includes:

5 P. L. 105- 85, Nov. 18, 1997. 6 P. L. 106- 65, Oct. 5, 1999. 7 The
limitation on production cost does not specify a quantity of F- 22
aircraft.

1. the reasons that either of the certifications cannot be made, 2. a
revised acquisition plan approved by the Secretary of Defense if the

Secretary desires to proceed with F- 22 low- rate initial production, and
3. a revised cost estimate for the remainder of the engineering and

manufacturing development phase and for the production phase of the
program if the Secretary desires to proceed with low- rate initial
production.

The appropriations act 8 for fiscal year 2000 did not approve initial
production but approved acquisition of additional flight- test aircraft
with research, development, test, and evaluation funding. The act
restricted award of a fully funded contract for low- rate initial
production until (1) the first flight of an F- 22 aircraft incorporating
an avionics system designated block 3. 0, which brings the software into
an integrated system; (2) the Secretary of Defense certifies to the
congressional defense committees that all criteria for the award of low-
rate initial production have been met

(including first flight of the block 3.0 system); and (3) the Director,
Operational Test and Evaluation, reports to the congressional defense
committees on the adequacy of testing to measure and predict the
performance of avionics systems, stealth characteristics, and weapon
delivery systems. Through March 6, 2001, the Secretary of Defense had not
completed the required certifications and the Director, Operational Test
and Evaluation, had not submitted the required report.

The fiscal year 2001 authorization act 9 amended prior cost limitation
provisions, permitting the Secretary of the Air Force to increase, by up
to 1.5 percent, the limitation on the cost of engineering and
manufacturing

development, if the Director, Operational Test and Evaluation, after
consultation with the Under Secretary of Defense for Acquisition,
Technology, and Logistics, determines that the increase is necessary to
ensure adequate testing. For fiscal year 2001, the Congress appropriated
$2. 1 billion for initial production of 10 aircraft. The fiscal year 2001
appropriations act 10 confirmed the prerequisites of the fiscal year 2000
8 P. L. 106- 79, Oct. 25, 1999.

9 Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001,
P. L. 106- 398, Oct. 30, 2000. 10 P. L. 106- 259, Aug. 9, 2000.

appropriations act. Before awarding a fully funded contract to begin low-
rate production of 10 F- 22 aircraft in fiscal year 2001, prerequisites
included in the appropriations and authorization acts for fiscal years
2000 and 2001 must be fulfilled. In December 2000, the Congress passed,
and the President signed,

legislation 11 that provided the Air Force authority to obligate up to
$353 million of the fiscal year 2001 production appropriations if a full
contract award for low- rate production is delayed beyond December 31,
2000, because of the program*s inability to satisfy the prerequisites
established by the Congress. The Air Force, as permitted by legislation,

obligated the majority of these funds in February 2001 for F- 22
contractors to proceed with advance procurement but without awarding a
fully funded contract for low- rate initial production. On March 6, 2001,
the Secretary of

Defense requested the four defense committees to approve reprogramming of
$674.5 million of fiscal year 2001 procurement funds to the advance
procurement line to extend, through fiscal year 2001, the authority that
had been provided in December 2000. At the same time, the Secretary
indicated that the decision to award a contract to initiate low- rate
production for 10 aircraft was deferred pending completion of a defense
program review directed by the President.

Extent to Which the Through 2000, the Air Force had completed about 22
percent of its planned

F- 22 Development flight- testing hours for the F- 22, and said it had
fulfilled 9 of 11 DOD and

congressional development and test criteria for awarding a low- rate
Program Is Meeting production contract. The Air Force stated that all 11
criteria had been met Schedule Goals by February 5, 2001. 12 However, the
development program was behind in meeting key schedule goals. The Air
Force acknowledges that the

flight- test program is facing a potential 4- to 6- month extension
because tests have been delayed and not enough time remains to complete
all of the planned testing before the planned completion in August 2002.

Furthermore, the program is running behind schedule in completing
nonflying tests that assess the structural integrity of the F- 22
airframe. 11 P. L. 106- 554, Dec. 21, 2000. 12 Our review of the F- 22
program did not include a validation of the Air Force*s statement that the
criteria had been met.

Progress Made in 2000 During 2000, four test aircraft were assembled and
first flight was achieved on two of these aircraft. The Air Force
continued flight- testing with these

aircraft and completed 325 flight- test hours during the year. The Air
Force also began avionics flight- testing and the second phase of testing
on the nonflying structural aircraft. Through December 2000, the Air Force
said it fulfilled 9 of 11 criteria set by the Under Secretary of Defense
for

Acquisition, Technology, and Logistics, and the Congress for awarding a
fully funded contract for the first lot of 10 production aircraft. The Air
Force stated that all 11 criteria had been met by February 5, 2001. The

criteria included completing the first flight of specific test aircraft,
initiating certain types of tests such as high angle- of- attack testing,
and completing other specific tests. (See app. I for a listing of the
criteria.) Air Force Did Not Meet

The Air Force did not meet its schedule goals in 2000 for flight- testing
the Schedule Goals for F- 22. The reasons included Flight- Tests

 problems and delays with the assembly and delivery of flight- test
aircraft,  delivery of flight- test aircraft that were not ready for
testing, and  lower than planned efficiency in the flight- test program.

Figure 1 compares flight- test hours accomplished and the number of hours
planned for 2000 in late 1998 and in late 1999. We calculated, based on
planned introduction of new test aircraft into the flight- test program,
that the Air Force, in late 1998, was planning 13 to accomplish about 1,
900 flight- test hours by the end of 2000. At the end of 1999, the Air
Force planned to accomplish about 1,400 hours. However, actual hours
through December 2000 totaled about 831* well short of planned hours.
About 78 percent of the total planned flight- test program hours remain to
be completed to reach the goal of completing 3,757 hours by August 2002.

13 Air Force officials advised us, however, that they had no documented
plan indicating they intended to accomplish this amount of flight- test
hours by the end of 2000.

Figure 1: Comparison of Actual and Planned Flight- Test Hours 4,000
Cumulative Flight- Test Hours 3,500 3,000

Planned at flight- test completion (Aug. 2002)

2,500 2,000

Planned in 1998 through 2000 1,500

Planned in 1999 through 2000 1,000

Actual Accomplishment 500

through 2000 0

1998 1999 2000 2001 2002 End of Calendar Year

Planned in 1998 Planned in 1999 Actual Accomplishment

Source: GAO analysis of Air Force data.

Late Introduction of Flight- test aircraft are assembled at Lockheed
Martin*s facility in Marietta,

Flight- Test Aircraft Georgia. After final assembly, the Air Force accepts
the aircraft. Lockheed Martin flies the aircraft, corrects problems, and
ultimately flies the aircraft to the Air Force Flight Test Center at
Edwards Air Force Base, California.

At the Flight Test Center, other corrections or changes may be made before
the aircraft is used to carry out flight- testing plans aimed at
demonstrating the F- 22*s capabilities. In early 2000, the Air Force
anticipated that six aircraft would be available for flight- testing at
the Flight Test Center by December 2000. However, only two flight- test
aircraft actually were available. Contractor and Air Force officials told
us that the test aircraft took longer to manufacture and assemble than
planned because of design changes and modifications to the aircraft, parts
shortages, and the need to complete certain assembly tasks out of
sequence.

Table 1 shows the number of hours required to assemble the four aircraft
that were completed during 2000, compared to the number of hours planned
and the difference.

Table 1: Planned Versus Actual Assembly Hours for Recently Completed
Aircraft Planned assembly

Actual assembly Aircraft hours hours Difference

4003 269,360 272, 799 +3, 439 4004 230,588 265, 731 +35, 143 4005 207,345
229, 387 +22, 042 4006 205,821 220, 889 +15, 068 Source: Air Force.

Appendix II details the planned dates for introduction of new test
aircraft into the flight- test program and shows that the introduction of
some aircraft has been substantially delayed from the prior plans* as much
as 15 months in one case. Some aircraft experienced additional delays at
the contractor facility and the Flight Test Center after assembly was
completed. For example, final assembly of aircraft 4004 was completed on
January 26, 2000, and the

aircraft was scheduled to make its first flight on May 3, 2000. However, a
series of hardware and software- related problems caused that flight to be
delayed until November 15, 2000. In March 2000, we reported that these
delays in meeting first flight dates meant the program had lost over 600
hours of flight- testing that would have been available had these aircraft
been delivered on time. Because of continued late deliveries, the total
hours lost through December 2000 was

1,062 hours. Test Aircraft Introduced Even after delivery and being flown
for the first time, test aircraft were not Into Flight- Test Program

ready to accomplish flight- tests because they required more modifications
Not Ready for Testing and repairs, which caused additional delays. Delays
ranged from 73 to 252 days for aircraft 4001, 4002, and 4003 (see fig. 2).

Figure 2: Flight- Test Aircraft Delays From First Flight Dates to Start of
Flight- Testing at the Flight Test Center

300 Days Delayed

250 200 150 100

50 0

4001 4002 4003 Aircraft Source: GAO analysis of Air Force data.

The delays these aircraft experienced can be attributed to planned, but
yet unfinished, work. Over 2, 500 labor hours of planned but unfinished
work had to be completed on aircraft 4003 prior to beginning flight tests
at the Flight Test Center. Aircraft 4003*s entry into the flight- test
program was also delayed by several modifications and repairs, such as
those addressing problems with large titanium castings that attach the
wing to the aircraft*s body, structural inadequacies in the aft (rear)
fuselage, and bonding of

composite materials in the horizontal tail section. These problems as well
as cracking problems with the clear section 14 of the aircraft canopy
interrupted the flight- test program. If similar delays occur after the
first flight dates of the remaining test aircraft, it will be even more
difficult for the Air Force to complete the flight- test program as
planned.

14 The Air Force refers to this clear section as the transparency.

Flight- Test Program Not as Even after test aircraft began to complete
flight- test hours, the flight- testing Efficient as Planned

hours and the overall flight- test program were not as efficient as
planned. A gauge of the efficiency of flight- tests is the average number
of test points (specific test objectives) achieved in each flight- test
hour. Through December 2000, the Air Force planned to accomplish an
average of about 10. 4 test points per flight- test hour. However, it
achieved about 30 percent

less, or an average of 6. 9 test points per flight- test hour. To complete
the airframe portion of the flight- test program 15 as planned, according
to our calculations the Air Force would have to almost double its
accomplishment

rate, to an average of about 13.4 test points per flight- test hour.
Figure 3 shows actual, planned, and needed flight- test point
accomplishment rates.

Figure 3: Comparison of Actual, Planned, and Needed Airframe Flight- Test
Point Accomplishment Rates

14 Flight Test Points Per Flight- test Hour

12 10

8 6 4 2 0

Actual (through Dec. 2000) Planned (through Dec. Needed to complete

2000) airframe portion as

planned Source: GAO analysis of Air Force data.

15 The airframe portion of the flight- test program is the first portion
and consists of about 20, 000 test points and 1, 800 flight- test hours.
The second portion is avionics flight- testing and consists of about 1,
970 flight- test hours.

Progress Is Less Than An integrated avionics system is a major feature of
the F- 22, permitting the

Planned in Avionics pilot to have substantially better control of
information regarding the

Flight- Testing surrounding situation. Tests of individual components and
the integrated

package are done on the ground in specially designed facilities, followed
by tests in a Boeing 757 flying test bed. Ultimately, the fully integrated
package (known as block 3.0) is to be installed in an F- 22 test aircraft
and flown to determine if it meets requirements and if it functions
properly. The avionics tests in F- 22 flight- test aircraft are scheduled
to take about 1,900 flight- test hours, about two- thirds of the total
remaining flight- test hours. Avionics is being developed in blocks
(segments), with completion of each block being dependent on completion of
prior blocks. During 2000, several early blocks completed ground testing
and were ready to be installed on

flight- test aircraft. However, because of the delayed delivery of test
aircraft designated for avionics flight- testing, delays occurred in
flight- testing avionics. As a result, only 2 of 300 avionics flight- test
hours planned were flown through December 2000 (see fig. 4). Only 1 hour
of avionics flight- testing was flown with block 3 avionics through
January 5, 2001. In addition, in attempting to meet its schedule of
flight- testing avionics block 3 in an F- 22 before the end of 2000, the
Air Force deferred into

mid- 2001 and later some block 3 functions and capabilities, such as
software that will allow F- 22s to transfer necessary mission data between
aircraft.

Figure 4: Planned Versus Actual Avionics Flight- Test Hour Accomplishment
for 2000

Avionics Flight- test Hours 800

745 700 600 500 400

300 300

200 100

2 0

Planned in 1997 for 2000 Planned at end of 1999 Actual 2000

for 2000 Source: GAO analysis of Air Force data.

A total of 1,970 avionics flight- test hours are scheduled to be flown by
the end of development flight- testing planned for August 2002. An
independent assessment sanctioned by the Air Force recently estimated that
a minimum of 7- 12 additional months after the planned completion of
flight- testing will be required to complete avionics testing.

The Air Force was able to accomplish airborne avionics testing on the
flying test bed, providing information to testers and helping correct many
problems with the hardware and software. However, while avionics testing
on a flying test bed is productive testing, it is not the equivalent of
avionics testing in an actual F- 22 test aircraft for two main reasons.
First, because the flying test bed is a large Boeing 757 passenger
aircraft and not a more

agile F- 22, avionics performance cannot be tested in a dynamic flight
environment where the aircraft is maneuvering at speeds and angles more
characteristic of a smaller fighter aircraft. A DOD testing official
advised us that avionics performance can change when operated under the
more

demanding conditions of a fighter aircraft. Second, the flying test bed
does not contain the full complement of avionics sensors that are planned
to be on an F- 22, and in some cases, the position of sensors on the test
bed are not representative of how they are to be positioned on an F- 22.

Flight- Testing Delays The Air Force, in monthly assessments of the
program from July through

Increase F- 22 Risks December 2000, determined that completing F- 22
development on schedule

was the program*s highest risk and that cost was also a concern. Also, a
review of the flight- test program in late 2000 concluded that extending
the test program schedule 4- to 6- months may be needed to complete tests.
Extending the test program schedule will likely increase costs. Further,
DOD*s Director, Operational Test and Evaluation, indicated the development
test program will likely need to be extended a year or more.

Based on this possibility, the Director has indicated that operational
testing that is to follow development testing cannot be started as
scheduled without clearly unacceptable risks and may need to be delayed
almost a

year. The Director also indicated there was some justification to delay
low- rate production in view of these delays. Completion of Testing of

The F- 22 test plan requires two major tests (static and fatigue) of the
Nonflying Ground Test structural integrity of the F- 22*s airframe. These
tests are important to Aircraft Continues to be reduce the risk of
structural problems emerging during production or Delayed during aircraft
operations. Fatigue testing, which measures the aircraft*s durability over
its expected life, was initiated on December 21, 2000. Static testing is
undertaken to ensure the aircraft will withstand stresses expected to be
encountered throughout the aircraft*s flight regime. The

aircraft structure is tested to determine if it can withstand stresses up
to 150 percent of its design limits. After progressing through all but one
test, static testing was interrupted in November 2000, about 6 percent
short of the testing goal, because the test hardware, not the aircraft,
failed. Testing resumed and was essentially completed in December 2000.
Because of a delayed start, the expected completion for fatigue testing is
now almost 2 years later than planned in 1997. The previous and currently
planned completion dates for these tests are shown in table 2.

Table 2: Delays in Planned Completion of Static and Fatigue Structural
Integrity Tests Planned completion date

Total delay Test 1997 plan Mar. 1999 plan Dec. 1999 plan Dec. 2000 plan
(months)

Static Oct. 1999 Feb. 2000 Nov. 2000 Dec. 2000 a 14 Fatigue Dec. 1999
Sept. 2000 Feb. 2001 Nov. 2001 23

a Completed Dec. 21, 2000. Source: GAO analysis of Air Force data.

Air Force officials, in commenting on a draft of this report, stated that,
even though the F- 22 fatigue testing was delayed compared to the plan,
they expect to complete the first of four test series 11 months after
beginning

low- rate initial production. They said that was similar to schedules of
fatigue testing completion in the F- 16 and F/ A- 18E/ F programs.
However, delays in the completion of fatigue testing affects when any
structural changes required can be recognized. Late recognition of any
structural problems affects when solutions can be incorporated into F- 22
production. DOD*s Director, Operational Test and Evaluation, has expressed
concern

over the delays in completion of fatigue testing and the incorporation of
any necessary solutions into production.

Extent to Which the It appears unlikely that the F- 22 development program
can be completed as F- 22 Program Is scheduled, and also include delivery
of development and production

representative test aircraft, as well as all the testing now planned,
within Meeting Cost Goals

the $20.443 billion cost limitation. Contractor costs have continued to
increase above budgets and measures identified to offset those increases
had not all been initiated through December 2000. If contractor costs
continue to increase above budgets, measures to offset cost increases are
not all initiated and achieved, and the Air Force extends the flight- test
program, cost is likely to increase above the congressional cost
limitation. A recent internal Air Force review concluded that development
cost will likely be about $126 million to $297 million above such a
limitation. If the

Secretary of the Air Force increases the cost limitation by 1. 5 percent,
or about $307 million, to ensure adequate testing* as permitted subsequent
to a determination by the Director, Operational Test and Evaluation* the
Air Force*s estimate would be within the limitation. Notwithstanding such
an increase, the Director has also stated that the test program may need
to be

extended further than planned by the Air Force. Such an extension is
likely to increase development program costs further. Development Cost
Growth The Air Force has anticipated growth in development costs for the
F- 22 Is Not Fully Offset by Cost every year since the Congress
established a cost limitation, and it has Reductions

identified a number of offsets to mitigate this growth, including reducing
testing infrastructures. In March 1999, we reported that the potential
cost growth through the end of development was estimated at $667 million
above a cost baseline established in 1998; in March 2000, it was estimated
to be $757 million. As of December 2000, the Air Force and its contractors
estimated development cost could grow by $883 million by program
completion and had identified about $874 million in cost reduction efforts
to offset this growth. Actions had not yet been initiated to achieve about
half of the cost reduction efforts. Cost growth that is not offset by cost
reductions threatens the ability to execute the development program, as
planned, within the congressional cost limitation.

Air Force and Lockheed officials attribute recent cost growth to (1)
manufacturing and design problems that have caused some tasks for
production labor to be rescheduled and accomplished at different times in
the assembly sequence than planned, (2) the need to incorporate more

engineering changes than planned, (3) underestimated amounts of labor
required to complete scheduled tasks, and (4) difficulties with
development and integration of avionics. Pratt & Whitney also identified
cost growth as the result of technical problems with an engine nozzle and

higher than expected overhead rates. Comparison of Lockheed*s Lockheed*s
cost performance in 2000, coupled with the experience in prior Projected
Costs and Actual years, brings into question the contractor*s ability to
control costs enough Costs for 2000

to complete the development program, as planned, within the cost
limitation. Figure 5 shows that Lockheed*s actual costs in 2000 exceeded
its available budget by more than projected. At the beginning of 2000,
cumulative actual costs exceeded Lockheed*s budget by $265 million.
Lockheed projected that costs would continue to increase above its budget
and that at the end of 2000, cumulative costs would exceed the cumulative
budget by $359 million. Although Lockheed did better than projected for
much of the year, its performance in November and December caused the
contractor to exceed its projection at year- end. Actual costs through
2000 exceeded the budget by $373 million or $14 million more than
projected.

Figure 5: Comparison of Actual and Projected Cost Growth Above Budget,
January Through December 2000 (Cumulative)

(Dollars in millions) 400 375 350 325 300 275 250 225 200

January February March April May June July August September October
November December Projected 275 289 302 313 323 330 335 340 345 351 356
359 Actual 275 276 283 290 299 305 314 327 329 345 365 373

Source: GAO analysis of contractor data.

Air Force Review A recent review of the estimated cost of F- 22
development completed by Recognizes That Costs Are

the Air Force Cost Analysis Improvement Group 16 concluded that the cost
Likely to Exceed Cost to complete development is likely to be about $126
million to $297 million

Limitation but Increase Has above the current congressional cost
limitation of $20.443 billion.

Not Been Requested DOD*s Director, Operational Test and Evaluation, agrees
that an increase is necessary. The Defense Authorization Act for fiscal
year 2001 provides for an increase to the cost limitation by up to 1.5
percent, or about

$307 million, if the Director determines the increase is necessary to
ensure adequate testing. On January 19, 2001, the Director advised the
Secretary of the Air Force and the Congress that he had determined the
increase in the cost limitation was necessary to ensure adequate testing.
If the Secretary of the Air Force increases the cost limitation by 1.5
percent, or about $307 million, to ensure adequate testing, the Air
Force*s estimate 16 An Air Force group whose function it is to provide
cost estimates of major weapon system acquisition programs at milestone
reviews.

would be within the limitation. While the Air Force expects to increase
the cost limitation by that amount, it has yet to request such an
increase.

Cost Estimates Do Not Cost estimates do not consider the potential cost
growth associated with a Account for Flight- Test

schedule extension of the flight- test program. An Air Force review of the
Program Extension

program schedule, done in December 2000, concluded that the flight- test
program may need to be extended by 4- to 6- months to complete the tests.
DOD*s Director, Operational Test and Evaluation, has indicated the
development test program may need to be extended a year or more. Extending
the flight- test program will likely increase costs, and the Air Force and
contractor will need to either identify offsetting cost reductions

to stay within the cost limitation, such as reducing the scope of the
flight- test program, or obtain an increase in the cost limitation. Air
Force officials maintain they are currently prioritizing work within the

F- 22 development program to allow for completion within the cost
limitation. They maintain this prioritization is being done to ensure
testing activities related to major F- 22 requirements are conducted, but
also to potentially delay testing activities related to less significant
F- 22 requirements. In contrast, DOD*s Director, Operational Test and
Evaluation, concluded the development test program may need to be extended
a year or more to complete required development testing prior to the start
of operational testing. We agree with the Director*s assessment and are

concerned about delaying required test activities. Completion of required
testing is likely to increase development program costs further. In
commenting on a draft of this report, DOD stated that, in prioritizing the

work, some development efforts currently included in the engineering and
manufacturing development phase (and cost estimate) of the program would
be expected to be shifted to the Operations and Maintenance account in
subsequent years.

Extent to Which F- 22 In December 2000, the Air Force estimated that by
the time the

Development Program development program ends, the program will have met,
and in some instances exceeded, the major F- 22 performance goals.
However, flight- test Is Meeting

progress is slower than expected, delaying the confirmation that the F- 22
Performance Goals will indeed deliver the required performance. Although
the Air Force assessment is that they satisfied the criteria for awarding
a contract to begin low- rate initial production, many of the criteria
required initiation of certain tests, not completion or successful
demonstrations. Accordingly,

most testing, particularly of the low observable features, avionics, and
structural durability, has yet to be completed.

Confirmation of The Air Force*s performance estimates to date are based on
limited

Performance Estimates flight- test data, computer models, ground tests,
and analyses. Most ground

Requires Additional and flight- tests will have to be completed before the
estimates are Demonstration

confirmed. F- 22 performance goals are described in 10 Key Performance
Parameters, about which the Air Force reports regularly to the Office of
the Under Secretary of Defense for Acquisition, Technology, and Logistics.
Through December 2000, the Air Force reported that ground and flight- test
experience, engineering analyses, and computer models indicate F- 22
performance will meet or exceed all required parameters.

Appendix III shows the goal for each parameter; the estimated performance
the Air Force believes is consistent with models, ground tests, analyses,
and flight- test for each parameter as of December 2000; and the Air
Force*s latest estimates of the performance expected to be achieved for
each parameter by the end of the development program.

Even though F- 22 development began in 1991 and flight- testing began in
1997, a significant amount of testing remains prior to the planned
completion of flight- testing in 2002 and the planned completion of
development in 2003. The Air Force through 2000 said they had satisfied 9
of 11 criteria for awarding a contract for low- rate production, however,
several of the criteria required the initiation of certain tests, not
successful completion of a significant amount of testing. Accordingly,
substantial testing must yet be accomplished before the capabilities of
the F- 22 will have been fully demonstrated. For example, avionics flight-
testing

completed through 2000 represents only 2 hours of a planned 1,970- hour
avionics flight- test program. Table 3 shows several areas of testing that
were initiated to comply with the criteria for awarding a contract to
begin low- rate initial production. The table also shows the extent of
planned testing remaining in these testing areas that were initiated, and
in several cases, shows that even at this point in the development program
there are still years of planned testing remaining.

Table 3: Additional Testing Required to Fully Demonstrate F- 22
Capabilities Criteria for awarding a contract for Estimated completion
Additional testing required to fully low- rate initial production date at
start of 2000 Actual completion demonstrate capability

Initiate high angle- of- attack testing July 2000 Aug. 2000 Over 90
percent, or about 40 flights to be with weapon bay doors open. completed
by mid- 2002. Initiate fatigue life testing with goal of

Aug. 2000 Dec. 2000 Four lifetimes to be completed in approximately
completing 40 percent of first fatigue 3 years. life. Initiate separation
testing of AIM- 9 Nov. 2000 Oct. 2000 32 AIM- 9 and 30 AIM- 120 separation
tests and AIM- 120 missiles. extending into 2002.

Initiate radar cross- section Aug. 2000 Jan. 2001 143 hours of flight-
testing remain with scheduled flight- testing. completion at the end of
development testing. Complete avionics block 3.0 first Nov. 2000 Jan. 2001
Block 3 scheduled to be tested through Spring flight, initiating testing
of unique

2001, plus a total of 1, 970 avionics flight hours functionality.

remaining. Source: GAO analysis of Air Force data.

Performance May Be The F- 22*s performance may be affected by continuing
increases in aircraft Affected by Additional weight, and frequency of
required maintenance that is still far from its Factors

objective. Even though F- 22 aircraft weight is not characterized by the
Air Force as a key parameter, aircraft weight impacts several of the key
parameters, including supercruise, maneuverability, acceleration, and
combat radius. And, even though the Air Force continues to estimate that
by the end of the development program the F- 22 will meet or exceed its
supercruise, maneuverability, acceleration, and combat radius key

parameters, the aircraft weight continues to increase as it has since
1995. During 2000, the estimated weight increased because of additional
requirements and modifications required to add strength to the airframe.
The Air Force maintains that even with this latest weight increase, there
is a margin of 1,050 pounds until the aircraft*s weight begins to have an

impact on the F- 22*s ability to meet its key performance parameters. In
addition, the Air Force estimates that by the end of development, the F-
22 will be able to complete 2 flying hours between maintenance actions;
and when the F- 22 reaches maturity 17 in 2008, F- 22s will be able to
complete 3 flying hours between maintenance actions (key parameter

17 Defined as 100,000 flying hours.

number 7, listed in app. III). However, currently the flight- test
aircraft are completing 0.6 flying hours between maintenance actions. This
means that aircraft are now requiring significantly more maintenance than
is expected when the system reaches maturity. Further, when all factors
are considered, more frequent maintenance is being required. When
maintenance tasks related to low observable features are included in
maintenance statistics, the statistics show that more frequent maintenance
is being required. Maintenance of low observable features has historically
been more difficult and time- consuming than expected. On the F- 22,
extensive maintenance has been associated with compounds that are used to
fill gaps or seams on the aircraft*s surface to help maintain the
aircraft*s low observable or stealthy nature. 18 In 1999,

program officials determined that the compound planned for use on the F-
22 was not meeting expectations; under certain conditions, it would swell
or crack after application. Since then, a new compound has been

formulated and it is being tested and qualified for use. Status of
Aircraft

Air Force officials said they have largely solved problems identified over
Modifications

the last several years with a section that attaches the wing to the
aircraft*s body and the aft (rear) fuselage of the aircraft. However, the
Air Force is continuing to address problems with the bonding of the
horizontal tail section and cracking of the clear section of the aircraft
canopy. Program officials, in late 1998, identified problems with the
development and manufacture of large titanium castings that attach the
wing to the aircraft*s body. These problems caused significant delays in
completing test aircraft and making them available to the flight- test
program. To resolve these problems, they changed the casting process and
increased the frequency of wing inspections on test aircraft. The Air
Force estimated the costs of engineering changes, additional castings, and
labor at about $25 million for the F- 22 development program.

In April 1999, program officials identified structural inadequacies in the
aft (rear) fuselage, or rear of the airframe. An airframe structural
strength analysis that was done as part of the airframe static test
indicated 18 Because the presence of any seams around maintenance access
panels can potentially allow the aircraft to be more easily detected by
enemy radar, a compound is applied to these seams to eliminate them and
make the aircraft*s surface smooth.

insufficient strength in a panel in the rear of the airframe. The test
aircraft that had been delivered, and those that had been built with the
problem parts had to be repaired and modified to provide additional
structural strength. Engineering changes, subcontractor rework, and
additional labor costs resulted in $16 million in unanticipated costs to
the development program. Contractor officials also identified a problem
with the bonding of the composite materials that make up the F- 22*s
horizontal tail section. While contractor officials noted that they have
addressed some of the root causes of this problem, one part of the
horizontal tail continues to show cracking. To gain more of an
understanding of this problem and possible solutions to producing
horizontal tails, the contractor assembled a team of industry

experts in June 2000. This team of experts provided the contractor with
recommendations, half of which were implemented. The contractor expects to
continue work to resolve this problem.

In March 2000, Lockheed personnel discovered cracks emanating from the
mounting holes in the clear section of the canopy on aircraft 4001. These
cracks triggered an investigation of all these clear sections on the
flight- test

aircraft, in assembly, and in fabrication. Program officials grounded the
flight- test aircraft for several weeks and limited the flight- test
conditions after they restarted flight tests to ensure safety of flight.
The contractor and the supplier identified a total of 109 potential causes
for the cracks and they are developing plans to address each cause.
Eighty- five of the potential causes have been investigated and several
changes have been implemented to prevent cracks from developing. Two
leading causes were susceptibility to harmful solvents and excess stress
placed on the clear section during assembly into its frame. To eliminate
the two leading causes of the cracks, contractor officials have modified
the way these clear

sections are manufactured and assembled. Additional changes are still
being evaluated.

F- 22 Development Plan By the end of fiscal year 2001, the Air Force
expects that nine F- 22 test for Fiscal Year 2002

aircraft will have been delivered and will have begun flight- tests. For
fiscal year 2002, the plan is to complete (1) the remainder of the
development flight- test program, scheduled to end in August 2002 and (2)
the airframe structural testing and analysis. The planned F- 22 funding
for fiscal year 2002 and the remainder of the development program is shown
in table 4. The funding plans for fiscal years

2002 and 2003 are consistent with completion of the development program at
a total cost that equates to the congressional cost limitation. However,
the plans do not address the need to extend the test program 4- to 6-
months

to accommodate the delay the Air Force has recognized or the possibility
of increasing the congressional cost limitation to allow for the costs
associated with this delay.

Table 4: Remaining F- 22 Development Funding

Dollars in millions

Fiscal year Fiscal year

Total to complete Cost category 2002 2003 development

Air vehicle $415.9 $131.2 $547. 1 Avionics 116.4 54.3 170. 7 Production
representative 124.3 $0.0 124. 3 test vehicles Engine 33. 6 16. 1 49. 7

Other government cost 170.2 116. 8 287. 0

Total $860.4 $318.4 $1,178. 8

Source: Air Force.

While the F- 22 development program and associated funding are scheduled
to end in fiscal year 2003, the Air Force budget plans include $580.7
million for post- development activities in fiscal years 2002 through 2007
(see table 5). The Air Force classified this funding as post- development
funding for various activities. 19 Air Force officials told us they
consider this

post- development funding separate from and outside the scope of the F- 22
development program, which is subject to the congressional cost limitation
of $20. 443 billion.

19 These activities include blocks 4 and 5 of avionics, partial funding
for a ground collision avoidance system, flight- testing infrastructure at
Edwards Air Force Base, laboratory support, and a classified project.

Table 5: F- 22 Post- Development Funding Planned for Fiscal Years 2002
Through 2007 Fiscal year

Fiscal year Fiscal year

Fiscal year Fiscal year

Fiscal year Funding 2002 2003 2004 2005 2006 2007 Total

Post- development $16. 0 $51. 0 $136.1 $100.0 $121.2 $156. 4 $580. 7

Source: Air Force.

Plan to Increase LowRate The Fiscal Year 2001 Defense Appropriations Act
provided funds for

Initial Production low- rate initial production of 10 F- 22 aircraft but
prohibited award of a fully

funded contract until DOD meets prerequisites specified in the act. The
act Before Development also provided funds for advance procurement for 16
F- 22s planned for

Program Is Completed procurement in fiscal year 2002. The Air Force plans
to procure 24 aircraft in fiscal year 2003, and begin full- rate
production of 36 aircraft per year beginning in fiscal year 2004.

In several reports over the last 6 years, and as recently as March 2000,
we concluded that DOD should minimize commitments to F- 22 production to
six to eight aircraft a year until completion of initial operational test
and evaluation, now planned for the second quarter of fiscal year 2003.
Current flight- testing progress and an independent assessment by the
Director,

Operational Test and Evaluation, reinforce our prior conclusion. Buying
production articles before they can be adequately tested can result in
buying systems that require significant, and sometimes costly,

modifications to achieve satisfactory performance; accepting less capable
systems than planned; and deploying substandard systems to combat forces.
Also, deferring a substantial increase in production rates until
completion of initial operational test and evaluation will reduce the
amount of needed production funding committed, which may be an attractive
option to maintain the aircraft procurement budget and overall defense
budget within congressional targets. Conversely, Air Force officials have

stated that lower production rates could increase average procurement cost
over the life of the program.

As indicated earlier, the F- 22 program has experienced cost growth due to
manufacturing and design problems, the need to incorporate more than the
planned numbers of engineering changes, underestimated amounts of labor
required to complete scheduled tasks, and difficulties with development
and integration of avionics. Adding the significant amount of testing that
is yet to be completed, we believe it prudent to mitigate risks by
limiting

low- rate initial production to no more than 10 aircraft a year* the
quantity approved in fiscal year 2001 appropriations and authorization
acts* until initial operational test and evaluation is completed.
Conclusions The Air Force has made progress in developing the F- 22,
particularly with respect to fulfilling the criteria for awarding a fully
funded contract for lowrate initial production. Nevertheless, it is
significantly behind in flighttesting, due to continuing assembly and
manufacturing delays, and it is behind schedule in completing nonflying
tests that assess the structural integrity of the aircraft. These delays
increase the risk that the Air Force

will likely have to extend the test program past the planned completion
date or proceed to the next stages of the program without completing all
flight- tests. Moreover, the scheduling delays increase the likelihood
that costs will not fall within the congressional limitation, especially
if all planned offsets are not implemented and if additional time called
for by DOD*s Director, Operational Test and Evaluation, is agreed to.

The Director, Operational Test and Evaluation, has also indicated that
based on the current status of the test program, operational testing, with
the objective of determining the operational effectiveness and suitability
of the F- 22, cannot be started as scheduled without clearly unacceptable
risks and will probably be delayed almost a year. We agree with his
assessment. With this likely delay in starting operational testing, the
Director also concluded there was no reason to authorize low- rate
production in January

2001 and some justification to delay it. Cost growth in the development
program due to manufacturing and design problems and underestimated
amounts of labor required to complete scheduled tasks points to a lack of
stability in both design and fabrication. We believe limiting low- rate
initial

production to no more than the 10 aircraft per year included in
appropriations and authorization acts for fiscal year 2001 is a prudent
way to mitigate risks until initial operational test and evaluation is
completed.

Recommendations for Because the Air Force is unlikely to complete F- 22
development within the

Executive Action current cost limitation, we recommend that the Secretary
of the Air Force,

as a supplement to the fiscal year 2002 budget request, provide (1)
information showing planned testing not yet completed; (2) information on
any additional funding that would be necessary, above the cost limitation
amount, to complete the testing as planned; and (3) any actual

and proposed changes to the test plans, such as a deletion or postponement
of test activities, and the justification for these changes.

To reduce risks and preclude manufacture and delivery of F- 22 aircraft
that have not been fully tested, we recommend that the Secretary of
Defense limit low- rate initial production to no more than 10 aircraft a
year until initial operational test and evaluation is completed.

Agency Comments and DOD provided written comments on a draft of this
report. In regard to the Our Evaluation

first recommendation, DOD agreed there are concerns regarding completion
of development testing within the period remaining for engineering and
manufacturing development. DOD also agreed that adjustments are needed in
the F- 22 program to ensure adequate

development testing is completed prior to entry into operational test and
evaluation. Also, in its comments, DOD stated that on January 19, 2001,
the Director, Operational Test and Evaluation, made a determination
provided for in the authorization act for fiscal year 2001, that permits
the Secretary of the Air Force to increase the cost limitation for F- 22
development by 1.5 percent, or about $307 million. Although we agree that
a 1.5- percent increase in the cost limitation is warranted based on the
progress of the program, DOD has not yet certified to the Congress that F-
22 development can be completed within the cost limitation, even
considering the 1.5- percent increase. The Director, Operational Test and
Evaluation, concluded that a 1.5- percent increase may be sufficient to
support an Air Force plan that would defer completion of development
testing by 4- to 6- months. However, the Director stated that a longer
delay may be needed to complete required testing. Additional

comments DOD provided indicated that the Air Force proposed additional
actions that entail shifting some remaining development efforts to the
Operations and Maintenance account to allow the F- 22 engineering and
manufacturing development program to be completed within the cost
limitation. Considering the uncertainty about the Air Force*s ability to
complete the development program within the limitation as adjusted, and
within the schedule as currently planned, and the proposal to shift
funding for some efforts to the Operations and Maintenance account, we
believe our recommendation continues to be valid. We continue to believe
DOD should, in a supplement to its fiscal year 2002 budget request, or as
part of any revised acquisition plan submitted to congressional defense

committees, identify the testing that has yet to be completed, the funding
necessary, and the changes that are planned to the test program.

In regard to the second recommendation, DOD officials said they did not
concur with the recommendation and stated it was premature to comment on
any change in the rate of low- rate initial production, pending further
progress in a defense program review directed by the President. We believe
DOD*s comment obfuscates the issue at hand. We recognize that the

President has directed that the defense program be reviewed and that the
timing, cost, and quantity of F- 22 production are likely to be important
considerations. However, the slow progress of the F- 22 program during
2000, particularly the flight- test program, does not justify accelerating
production in fiscal year 2002. We believe the Air Force should not

continue with its plans to increase the rate of production beyond 10
aircraft a year until operational test and evaluation is complete and the
operational suitability and effectiveness of the F- 22 has been
successfully demonstrated. DOD*s comments are reproduced in appendix IV.
DOD also provided updated information and suggested additional technical
changes, which we incorporated in the report where appropriate.

Scope and To determine whether the program is expected to meet schedule
goals, we Methodology

reviewed program and avionics schedules and discussed potential changes to
these schedules with F- 22 program officials. We also compared current
schedules with those developed in 1997 as a result of a study by a cost
estimating team. We tracked progress in the flight- test program,
evaluated

schedule variances in the contractors* performance management system, and
compared planned milestone accomplishment dates with actual dates. We also
tracked technical problems in manufacturing and assembling the

development aircraft. To determine whether the program is likely to meet
the cost limitation, we examined (1) the extent to which the development
program cost goals are being met, (2) the Air Force*s plans to fund the
program for fiscal year 2001, and (3) the consistencies between the
program funding plan and the cost limitation. We compared the estimated
cost at completion of the prime

contracts with planned amounts, evaluated cost variances identified in the
contractors* cost reporting systems, and reviewed the status of
initiatives designed to avoid cost growth. We reviewed DOD validations of
Lockheed*s earned value management system and tested a small sample of
expenditures to determine if they had been properly recorded.

To determine whether the development program is likely to meet performance
goals, we analyzed information on the performance of key performance
parameters and those sub- parameters that are measured. We compared
performance goals established by the Under Secretary of Defense for
Acquisition, Technology, and Logistics with the Air Force*s

current estimates of performance in December 2000 and at completion of
development. To identify the status of F- 22 modifications, we collected
updated information on the status of existing aircraft structural problems
that have required aircraft modifications. We also collected and analyzed
information on problems identified in 2000 that will require some aircraft
modifications to resolve. To identify the program*s plan for fiscal year
2002, we collected information on what development activities are expected
to be completed by the end of fiscal year 2001 and the planned development
activities and planned

funding for fiscal year 2002. To assess the Air Force*s plan for
increasing the annual initial rate of production, we determined the amount
of overlap between the development program and the production plans,
particularly in reference to the completion of initial operational test
and evaluation.

In making these determinations, assessments, and identifications, we
required access to current information about schedule achievements and
revisions, costs being incurred, test results and performance estimates,
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- 22
System Program Office, Wright- Patterson Air Force Base, Ohio; the Defense
Contract Management Agency, Marietta, Georgia; Lockheed Martin
Aeronautical Systems, Marietta, Georgia; Lockheed Martin Tactical Aircraft
Systems, Fort Worth, Texas; and Boeing Military Aircraft, Seattle,
Washington. We performed our work from April 2000 through February

2001 in accordance with generally accepted government auditing standards.

We are sending copies of this report to the Honorable Donald H. Rumsfeld,
Secretary of Defense; the Honorable Lawrence Delaney, Acting Secretary of
the Air Force; and the Honorable Mitchell E. Daniels, Jr., Director,
Office of Management and Budget. Copies will also be made available to
others on

request. Please contact me at (202) 512- 4841 or Robert D. Murphy at (937)
258- 7904 if you or your staff have any questions concerning this report.
GAO staff acknowledgments to this report are listed in appendix V.

Allen Li Director, Acquisition and Sourcing Management

List of Congressional Committees The Honorable John W. Warner Chairman The
Honorable Carl Levin Ranking Member Committee on Armed Services United
States Senate

The Honorable Ted Stevens Chairman The Honorable Daniel K. Inouye Ranking
Member Subcommittee on Defense Committee on Appropriations United States
Senate

The Honorable Bob Stump 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

Appendi xes Air Force Assessment of Development and Test Criteria Required
to Proceed to Low- Rate

Appendi x I

Initial Production Criteria Completion status

1. Initiate high angle- of- attack testing with weapon bay doors open
Completed 2. Complete critical design review for avionics block 3. 1
Completed 3. Complete test aircraft 4008 fuselage, wing, and empennage
(tail section) mate Completed 4. Initiate fatigue life testing with the
goal of completing 40 percent of first fatigue life Completed a 5.
Complete air vehicle final production readiness review Completed 6.
Complete first portion of engine qualification test Completed 7. Initiate
separation of air intercept missile- 9 and air intercept missile- 120
Completed 8. Complete aircraft first flights

Aircraft 4003 Completed Aircraft 4004 Completed Aircraft 4005 Completed
Aircraft 4006 Completed b 9. Initiate radar cross section flight- testing
Completed c 10. Complete static structural testing Completed 11. Complete
avionics block 3. 0 first flight, initiating testing of unique
functionality Completed

a Testing initiated on Dec. 21, 2000. Completion of 40 percent of the
first fatigue life is scheduled for Mar. 2001. b Completed on Feb. 5,
2001. c Completed on Jan. 31, 2001.

Comparison of Schedules for First Flight

Appendi x II

Dates of Test Aircraft Total delay of first First flight dates as First
flight dates as First flight dates as

flight dates First flight dates as

planned in planned in planned in

(months) as of Test aircraft planned in 1997 Mar. 1999

June 1999 Dec. 2000

Dec. 2000

4001 May 1997 Sept. 1997 a Sept. 1997 a Sept. 1997 a 3.37 4002 July 1998
June 1998 a June 1998 a June 1998 a -0.33 4003 June 1999 Nov. 1999 Feb.
2000 Mar. 2000 a 8.80 4004 Aug. 1999 Feb. 2000 May 2000 Nov. 2000 a 15. 20
4005 Jan. 2000 Mar. 2000 June 2000 Dec. 2000 b 11. 43 4006 May 2000 May
2000 Aug. 2000 Dec. 2000 b 7.50 4007 Sept. 2000 Sept. 2000 Oct. 2000 Aug.
2001 10.40 4008 Feb. 2001 Feb. 2001 Feb. 2001 Oct. 2001 8. 70 4009 June
2001 June 2001 June 2001 Sept. 2001 3.90

Total delay (months) 68. 97

a Actual first flight date. b First flight did not occur in December 2000.

Appendi x I II

Estimates of Performance for Key Parameters Air Force assessment of Goal
(acquisition program

estimated performance Estimated performance at Key performance parameter
baseline) through Dec. 2000 completion of development

1. Supercruise 100 percent 114 percent 115 percent 2. Acceleration

100 percent 89 percent 87 percent (< 100 percent is favorable) a 3.
Maneuverability 100 percent 102 percent 102 percent

4. Airlift support (C- 141 8 7 .4 7 .4 equivalents) 5. Sortie generation
rate 100 percent 100 percent 100 percent

6. Radar cross section (front 100 percent Favorable (data classified)
Favorable (data classified) sector only) 7. Average flight hours between

3.0 0. 6 2.0 (at end of development) maintenance 3.0 (by system maturity
in year 2008)

8. Payload (missiles) Four medium- range, two shortrange Six medium-
range, two

Six medium- range, two shortrange short- range 9. Combat radius 100
percent 113 percent 115 percent

10. Radar detection range 100 percent 117 percent 117 percent a The
acceleration parameter is a measure of the time it takes the aircraft to
increase speed to a certain level. If the aircraft is able to increase
speed to a certain level in less time than expected, this is considered
favorable. Therefore, a measure of less than 100 percent is favorable.

Appendi x V I Comments From the Department of Defense

Appendi x V

GAO Staff Acknowledgments Acknowledgements Mark Abraham, Marvin E. Bonner,
Christopher T. Brannon, Arthur Cobb, Don M. Springman, and John Van Schaik
made key contributions to this report.

Related GAO Products Defense Acquisitions: Recent F- 22 Production Cost
Estimates Exceeded Congressional Limitation (GAO/ NSIAD- 00- 178, Aug. 15,
2000).

Defense Acquisitions: Use of Cost Reduction Plans in Estimating F- 22
Total Production Costs (GAO/ T- NSIAD- 00- 200, June 15, 2000). Budget
Issues: Budgetary Implications of Selected GAO Work for Fiscal Year 2001
(GAO/ OCG- 00- 8, Mar. 31, 2000). F- 22 Aircraft: Development Cost Goal
Achievable If Major Problems Are Avoided (GAO/ NSIAD- 00- 68, Mar. 14,
2000).

Defense Acquisitions: Progress in Meeting F- 22 Cost and Schedule Goals
(GAO/ T- NSIAD- 00- 58, Dec. 7, 1999). Fiscal Year 2000 Budget: DOD*s
Procurement and RDT& E Programs (GAO/ NSIAD- 99- 233R, Sept. 23, 1999).
Budget Issues: Budgetary Implications of Selected GAO Work for Fiscal Year
2000 (GAO/ OCG- 99- 26, Apr. 16, 1999). Defense Acquisitions: Progress of
the F- 22 and F/ A- 18E/ F Engineering and Manufacturing Development
Programs (GAO/ T- NSIAD- 99- 113, Mar. 17, 1999).

F- 22 Aircraft: Issues in Achieving Engineering and Manufacturing
Development Goals (GAO/ NSIAD- 99- 55, Mar. 15, 1999).

F- 22 Aircraft: Progress of the Engineering and Manufacturing Development
Program (GAO/ T- NSIAD- 98- 137, Mar. 25, 1998). F- 22 Aircraft: Progress
in Achieving Engineering and Manufacturing Development Goals (GAO/ NSIAD-
98- 67, Mar. 10, 1998). Tactical Aircraft: Restructuring of the Air Force
F- 22 Fighter Program (GAO/ NSIAD- 97- 156, June 4, 1997). Defense
Aircraft Investments: Major Program Commitments Based on Optimistic Budget
Projections (GAO/ T- NSIAD- 97- 103, Mar. 5, 1997).

F- 22 Restructuring (GAO/ NSIAD- 97- 100R, Feb. 28, 1997). Tactical
Aircraft: Concurrency in Development and Production of F- 22 Aircraft
Should Be Reduced (GAO/ NSIAD- 95- 59, Apr. 19, 1995).

Tactical Aircraft: F- 15 Replacement Issues (GAO/ T- NSIAD- 94- 176, May
5, 1994).

Tactical Aircraft: F- 15 Replacement Is Premature as Currently Planned
(GAO/ NSIAD- 94- 118, Mar. 25, 1994).

(707530) Lett er

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GAO United States General Accounting Office

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Page 3 GAO- 01- 310 Tactical Aircraft United States General Accounting
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Appendix I

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Appendix II

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Appendix III

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Appendix IV

Appendix IV Comments From the Department of Defense

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Appendix V

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Related GAO Products Page 41 GAO- 01- 310 Tactical Aircraft

United States General Accounting Office Washington, D. C. 20548- 0001

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