Defense Logistics: Information on Apache Helicopter Support and  
Readiness (17-JUL-01, GAO-01-630).				 
								 
This report examines selected logistics, funding, and readiness  
issues pertaining to the AH-64 Apache helicopter program. GAO	 
found that in fiscal years 2000 and 2001, the Apache's identified
sustainment systems technical support requirements have not been 
fully met. In fiscal year 2000, funding fell short of the $28.6  
million needed for Apache sustainment support. The Aviation and  
Missile Command projects that it will be able to meet only 56	 
percent of the Apache's sustainment support requirements for	 
fiscal years 2001-2003. Furthermore, because the Apache 	 
sustainment support projects must compete with other weapon	 
systems for limited funding, some Apache projects have been	 
delayed or limited in scope. GAO further found that the 	 
procurement of parts for the Apache is hampered by an outdated	 
inventory system. And while the technical manuals used by field  
and depot personnel are sufficient to meet their needs, the	 
manuals lack critical technical drawings and specifications. The 
Army must use alternative methods, such as reverse engineering,  
to compensate for the lack of data. Finally, the Army has several
unfunded requirements for Apache component upgrades for fiscal	 
years 2001 and 2002. GAO found, however, that these issues have  
not prevented the Apache fleet from meeting its readiness goals. 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-630 					        
    ACCNO:   A01407						        
  TITLE:     Defense Logistics: Information on Apache Helicopter      
             Support and Readiness                                            
     DATE:   07/17/2001 
  SUBJECT:   Aircraft components				 
	     Aircraft maintenance				 
	     Combat readiness					 
	     Helicopters					 
	     Inventory control					 
	     Logistics						 
	     Military aircraft					 
	     Safety standards					 
	     Transportation safety				 
	     Weapons systems					 
	     Army AH-64 Apache Longbow Upgrade			 
	     Program						 
								 
	     Apache Helicopter					 
	     AH-64 Helicopter					 

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GAO-01-630
     
Report to Congressional Committees

United States General Accounting Office

GAO

July 2001 DEFENSE LOGISTICS Information on Apache Helicopter Support and
Readiness

GAO- 01- 630

Page i GAO- 01- 630 Defense Logistics Letter 1

Results in Brief 2 Agency Comments 4 Scope and Methodology 4

Appendix I Scope and Methodology 7

Appendix II Are the Apache?s Sustainment Systems Technical Support Need
Being Met? 9

Appendix III Have Obsolete Parts Been Procured? 13

Appendix IV Do Available Technical Manuals and Technical Data Packages Meet
User Needs? 15

Appendix V Are There Unfunded Component and Airframe Upgrade Requirements?
17

Appendix VI Have the Mandate Issues Affected Apache Fleet Readiness? 21

Appendix VII Comments From the Department of Defense 26

Appendix VIII GAO Contacts and Staff Acknowledgments 27

Tables

Table 1: Army Materiel Command Sustainment Support Requirements, Funds
Received, Unfunded Requirements, and Percent Funded for Fiscal Years 2000
and 2001 10 Table 2. Aviation and Missile Command Sustainment Support

Requirements, Funds Received, Unfunded Requirements, and Percent Funded for
Fiscal Years 2000 and 2001 10 Table 3: Aviation and Missile Command?s Apache
Sustainment

Support Requirements, Budget Estimates, and Percents for Fiscal Years 2001-
2003 11 Contents

Page ii GAO- 01- 630 Defense Logistics

Table 4: Fiscal Year 2001 Unfunded Requirements for Component Upgrades (as
of September 1999) 18 Table 5: Fiscal Year 2002 Unfunded Requirements for
Component

Upgrades (as of February 2001) 19

Figures

Figure 1: Total Apache Fleet Fully Mission Capable Rates (Sept. 1997 through
Jan. 2001) 22 Figure 2: Active Army Apache Fully Mission Capable Rates

(Sept. 1997 through Jan. 2001) 23 Figure 3: Army Reserve Apache Fully
Mission Capable Rates

(Sept. 1997 through Jan. 2001) 24 Figure 4: Army National Guard Apache Fully
Mission Capable

Rates (Sept. 1997 through Jan. 2001) 25

Page 1 GAO- 01- 630 Defense Logistics

July 17, 2001 Congressional Committees The AH- 64 Apache helicopter is
considered the most advanced attack helicopter in the world. The Army
expects the Apache to be the cornerstone of the Army?s aviation fleet for
many years to come. The Army plans to rely on the Apache until the fleet
reaches its replacement point in fiscal year 2020. 1 In recent years,
aircraft groundings due to flight safety issues have raised questions about
the long- term reliability of this weapon system.

From the time a weapon system is fielded until it is retired, the Army
routinely provides ongoing engineering and technical support to identify and
correct problems that could affect safety, performance, and readiness. These
services are referred to by the Department of Defense as sustainment systems
technical support and are funded from its operation and maintenance
appropriation. Sustainment systems technical support includes engineering
services to support safety and capability modifications to weapon systems,
updates to engineering drawings and parts specifications, updates to
technical manuals, and technical assistance to field units. In addition to
sustainment support, the Army must provide significant, often costly,
improvements and upgrades to address component limitations and deficiencies
and to improve capabilities. These upgrades are primarily funded through the
Army?s procurement appropriation.

Section 376 of the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 2 requires that we examine selected logistics, funding, and
readiness issues pertaining to the AH- 64 Apache helicopter program.
Specifically, the act requires that we determine the following: (1) Are the
Apache?s sustainment systems technical support needs being met? (2) Have
obsolete Apache parts been procured? (3) Do available technical manuals and
data packages of engineering specifications and drawings meet user needs?
(4) Are there unfunded requirements for component and airframe upgrades? (5)
Have any of the above issues affected fleet readiness? The Army?s Aviation
and Missile Command and the Aviation

1 2000 Army Aviation Modernization Plan, submitted to Congress in April
2000. 2 P. L. 106- 398.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 630 Defense Logistics

Program Executive Office have primary management responsibility for these
issues.

In fiscal years 2000 and 2001, the Apache?s identified sustainment systems
technical support requirements have not been fully met. In fiscal year 2000,
the Aviation and Missile Command was able to provide only about $27.9
million of the $28.6 million needed for Apache sustainment support. However,
the Command projects that it will be able to meet only about 56 percent of
the Apache?s sustainment support requirements for fiscal years 2001- 2003.
Recognizing that all weapon systems must compete for limited funds, the Army
has prioritized sustainment support requirements and funds its most critical
needs. As a result, some Apache sustainment support projects that affect the
efficient management of Apache parts and the helicopter?s flight safety have
been limited in scope or delayed. For example, a faulty tail rotor
swashplate identified in June 2000 could not be analyzed for over 5 months
because the Army did not have the funds available. When the contractor
examined the swashplate, it was determined that 88 additional swashplates
might be affected, and the entire Apache fleet was grounded to prevent the
potential loss of lives and equipment. An Aviation and Missile Command
official stated that procedures are in place to elevate a request for
additional funding when circumstances indicate a potential safety risk.
However, upon initial examination the external condition of this particular
component did not warrant elevation to a higher level.

The Army and the Defense Logistics Agency have not procured obsolete,
unusable parts for the Apache. We analyzed the Army and Defense Logistics
Agency inventory databases and found no instances in which obsolete Apache
parts were ordered. However, older versions of parts that are still usable
are sometimes ordered because the inventory database used by both the Army
and the Defense Logistics Agency is out- of- date. While these parts are
still usable, they may not include the latest technological upgrades or be
as reliable as the newer versions. The database has not been updated since
1995 due to constrained sustainment system technical support funding and
does not contain the latest information on all Apache parts. Consequently,
the Army relies on its suppliers to ensure that erroneous orders are
corrected and the latest versions of the parts are provided. The Army has an
effort under way to update the inventory database to include changes to over
7, 000 Apache part numbers by September 2001.

Although technical manuals used to maintain the Apache are sometimes
outdated, field and depot personnel told us the manuals are sufficient to
Results in Brief

Page 3 GAO- 01- 630 Defense Logistics

meet their needs. Army maintenance personnel told us that the manuals
provide the information on parts and maintenance procedures that they need
to maintain the helicopter. Although the manuals are generally updated only
once per year, the Aviation and Missile Command issues technical bulletins
as necessary to augment the information contained in the manuals between
updates. However, technical data packages, including engineering drawings
and specifications, are not available for all Apache parts because the Army
decided during the helicopter?s procurement in the early 1980s to limit the
amount of technical data purchased. As a result, the Army uses alternative
methods to compensate for the lack of data. These methods include using
reverse engineering to develop drawings and specifications needed to
purchase required spare parts. Additionally, the Army is not purchasing any
technical data for the upgraded Apache Longbow helicopter and plans to rely
on the original equipment manufacturer for all of its technical data
support.

There are unfunded requirements for Apache component upgrades for fiscal
years 2001 and 2002, but the Army has no airframe upgrade requirements for
either year. Needed component upgrades totaling over $168 million will not
be funded in fiscal year 2001 according to Army officials. Further, as of
February 2001, the Army projected over $158 million in component upgrades
that will not be funded in fiscal year 2002. Examples of unfunded component
upgrades include the purchase and installation of an internal fuel tank that
would give each aircraft one additional hour of flying time and an upgrade
to the Aerial Rocket Control System to eliminate uncommanded rocket
launches. Army officials recently stated that they are considering
withdrawing the 2002 requirements to focus on the Longbow procurement and
aviation recapitalization efforts. However, the Army has not provided any
documentation supporting the withdrawal of the requirements and program
officials stated that those decisions are still under review within the
Army.

These issues have not prevented the Apache fleet from meeting its readiness
goals. While sustainment support funding is critical to maintaining weapon
system readiness, we did not find that constrained funding has directly
affected Apache fleet readiness. However, as discussed previously, we noted
one instance where operational risk was increased as a result of funding
constraints. Although the fleet has not

Page 4 GAO- 01- 630 Defense Logistics

always met the Army?s fully mission capable goal, 3 our examination of
readiness data for the period September 1997 through January 2001 did not
reveal a link between the issues addressed by the mandate and low readiness
rates. During the period we examined, active Apache units generally met or
exceeded the Army?s fully mission capable goal with the exception of periods
in which safety issues grounded the entire fleet. However, Army Reserve and
National Guard units generally reported fully mission capable rates below
the Army?s goal due to insufficient funding, low priority for parts, and a
shortage of experienced maintenance personnel.

Since the Army has actions under way to update its inventory database and
technical manuals, we are not making recommendations in this report.

In commenting on a draft of this report, the Department of Defense concurred
with the information presented and stated that it supports the concerns
raised in the report as well as ongoing efforts to correct them. The
Department stated that it strongly supports efforts to elevate and correct
potential safety hazards in an expeditious manner. The Department further
stated that updating the Army's inventory database by September 2001 is a
priority to assure that the most current versions of Apache parts are
provided to field users. The Department's comments are reprinted in their
entirety as appendix VII.

To address the issues in this report, we interviewed and obtained
information from officials of the Army?s Aviation and Missile Command and
the Aviation Program Executive Office in Huntsville, Alabama; Army Forces
Command, Atlanta, Georgia; Apache battalions at Fort Bragg, North Carolina,
and Fort Hood, Texas; the Defense Logistics Agency; and the Boeing Company,
Mesa, Arizona. We conducted our review from August 2000 through May 2001 in
accordance with generally accepted government auditing standards. Appendix I
provides additional detail about the scope and methodology of our work.
Detailed information on the issues discussed in this letter is provided in
appendixes II through VI.

3 Fully mission capable means that the aircraft is capable of performing all
of its assigned missions. The Army?s fully mission capable goal for the
Apache is 70 percent. Agency Comments

Scope and Methodology

Page 5 GAO- 01- 630 Defense Logistics

We are sending copies of this report to the Secretary of Defense; the
Secretary of the Army; the Director, Office of Management and Budget; and
interested congressional committees. We will also provide copies to others
on request.

If you or your staff have any questions on this report or wish to discuss
these matters further, please call me on (202) 512- 8412. Key contacts and
staff acknowledgments are listed in appendix VIII.

David R. Warren Director, Defense Capabilities and Management

Page 6 GAO- 01- 630 Defense Logistics

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

The Honorable Daniel K. Inouye Chairman The Honorable Ted Stevens Ranking
Minority Member Defense Subcommittee 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 Defense Subcommittee Committee on Appropriations House of
Representatives

Appendix I: Scope and Methodology Page 7 GAO- 01- 630 Defense Logistics

To address each of the five issues set forth in the 2001 Defense
Authorization Act, we interviewed and obtained information from officials of
the Army?s Aviation and Missile Command and the Aviation Program Executive
Office in Huntsville, Alabama, and Forces Command, Atlanta, Georgia. We also
interviewed and obtained information from additional Army and Defense
Logistics Agency (DLA) officials in other offices and locations pertaining
to each of the specific questions, as described below.

To determine whether the Apache?s sustainment system technical support needs
are being met, we met with officials from the Office of the Secretary of
Defense (Comptroller), the Office of the Assistant Secretary of the Army
(Financial Management and Comptroller), and the Army?s Office of the Deputy
Chief of Staff for Logistics, Washington, D. C.; the Army Materiel Command,
Alexandria, Virginia; and the Aviation and Missile Command and Aviation
Program Executive Office, Huntsville, Alabama . In addition, we obtained and
analyzed guidance, requirement information, budget documents, and funding
data from fiscal years 1998 through 2003. We also analyzed processes for
determining requirements for the Apache?s sustainment system technical
support and prioritization for funding. While these issues dealt with
funding requirements and priorities, it was not within our scope to assess
the validity of the Army?s sustainment system technical support requirements
or prioritization decisions. We also interviewed Apache program officials to
determine the effect of funding constraints on sustainment system technical
support, particularly as it related to readiness.

To determine whether the Army and DLA had procured obsolete Apache parts, we
analyzed Army and DLA inventory data to identify items coded obsolete and
with inventory on order. We limited this analysis to the activities that
manage the largest number of Apache parts- the Army?s Aviation and Missile
Command and DLA?s Richmond, Virginia, and Philadelphia, Pennsylvania, Supply
Centers. We also interviewed and obtained information from officials of the
Aviation and Missile Command, DLA offices in Richmond, Virginia, and
Philadelphia, Pennsylvania; Apache battalions located at Fort Hood, Texas,
and Fort Bragg, North Carolina; and the Boeing Company, Mesa, Arizona.

To determine whether Apache technical manuals meet user needs, we
interviewed officials of Apache battalions at Fort Hood and Fort Bragg as
well as maintenance personnel at Corpus Christi Army Depot, Texas.
Additionally, we selectively reviewed the technical manuals at the Apache
battalions we visited. We also interviewed responsible officials at the
Aviation and Missile Command to identify deficiencies and methods used
Appendix I: Scope and Methodology

Appendix I: Scope and Methodology Page 8 GAO- 01- 630 Defense Logistics

to augment technical manuals between annual updates. Regarding technical
data packages, we interviewed Aviation and Missile Command officials to
determine whether sufficient technical data is available to meet the needs
of the Apache engineering community. Because many of the decisions affecting
technical data packages were made during procurement of the weapon system in
the mid- 1980s, available information on this issue was limited. We also
discussed potential readiness implications with the Aviation and Missile
Command officials we interviewed.

To determine whether there are unfunded requirements for airframe and
component upgrades, we interviewed and obtained data from officials of the
Army?s Office of the Deputy Chief of Staff for Operations and the Aviation
Program Executive Office to document the requirements determination and
funding processes. We also obtained and analyzed Army budget documents
listing upgrade requirements for fiscal years 2001 and projected for 2002.
We compared the requirements to the actual budget information to identify
projects not included. However, we did not attempt to validate the Army?s
upgrade requirements.

To determine the extent to which these issues affected Apache fleet
readiness, we analyzed readiness data from September 1997 through January
2001 to identify instances in which reported readiness levels were below
established Army goals. Where readiness problems were identified, we
reviewed commanders? comments that accompanied unit readiness reports and
interviewed Apache battalion and Aviation and Missile Command officials to
determine whether reported readiness problems were caused by any of the
conditions described in the mandate. We also discussed factors affecting
fleet readiness levels with Aviation and Missile Command officials.

We conducted our review from August 2000 through May 2001 in accordance with
generally accepted government auditing standards.

Appendix II: Are the Apache?s Sustainment Systems Technical Support Need
Being Met?

Page 9 GAO- 01- 630 Defense Logistics

Sustainment systems technical support comprises engineering and technical
services for fielded weapon systems. Sustainment support begins the first
full fiscal year after the last item (e. g., helicopter, tank, truck, and
missile) is produced and continues until the weapon system is retired from
the Army inventory. Specific support provided includes

 engineering services in support of safety and capability modifications; 
updates to technical manuals that field and depot personnel use to

maintain weapon systems;  updates to technical data packages, which include
engineering drawings

and parts specifications; and  on- site technical assistance to field
units.

All Army sustainment support projects are funded from the ?central supply
activities? subactivity group of the Army?s operation and maintenance
account. While the Army Materiel Command is responsible for managing the
funds for all Army weapon system sustainment support, the Aviation and
Missile Command has primary responsibility for about 95 percent of the
Apache?s sustainment support funds. The Army?s CommunicationsElectronics
Command and the Tank- Automotive & Armaments Command also provide some
limited sustainment support for the Apache components they manage.

The Army considers all sustainment support requirements identified by the
Aviation and Missile Command in developing the proposed operation and
maintenance budget. However, sustainment support competes with many other
programs for operation and maintenance funding. Consequently, sustainment
support funding usually falls short of identified requirements at all
levels. For example, as shown in table 1, the Army Materiel Command received
only 78. 7 percent and 66. 1 of the funds required for sustainment in fiscal
years 2000 and 2001, respectively. Appendix II: Are the Apache?s Sustainment

Systems Technical Support Need Being Met? Background

Army Process for Funding Apache Sustainment Requirements

Appendix II: Are the Apache?s Sustainment Systems Technical Support Need
Being Met?

Page 10 GAO- 01- 630 Defense Logistics

Table 1: Army Materiel Command Sustainment Support Requirements, Funds
Received, Unfunded Requirements, and Percent Funded for Fiscal Years 2000
and 2001

Dollars in millions

Fiscal year Requirement Funds received Unfunded

requirement Percent funded

2000 $346.0 $272.3 $73.7 78.7 2001 449.5 297.2 152.3 66.1

Source: Compiled from data provided by the Army?s Office of the Deputy Chief
of Staff for Logistics and the Army Materiel Command.

Since the amount of sustainment support the Army Materiel Command received
was less than its requirements, the amount it could provide to its
subordinate commands, such as the Aviation and Missile Command, was also
constrained. According to an Army Materiel Command official, the Aviation
and Missile Command received $260. 6 million for sustainment support for
fiscal years 2000 and 2001. As shown in table 2, the Aviation and Missile
Command received $60.3 million less than its sustainment support
requirements in fiscal year 2000 and about $28.7 million less in fiscal year
2001.

Table 2. Aviation and Missile Command Sustainment Support Requirements,
Funds Received, Unfunded Requirements, and Percent Funded for Fiscal Years
2000 and 2001

Dollars in millions

Fiscal year Requirement Funds received Unfunded

requirement Percent funded

2000 $171.5 $111.2 $60.3 64.8 2001 178.1 149.4 28.7 83.9

Source: Compiled from data provided by the Army Materiel Command and the
Aviation and Missile Command.

The Aviation and Missile Command provided about $27.8 million of the $28.6
million needed for Apache sustainment support in fiscal year 2000. However,
funding projections for fiscal years 2001- 2003 are at a lower level. As
shown in table 3, the Aviation and Missile Command projects that it will be
able to provide only 55. 6 percent of the $146. 2 million Apache sustainment
support requirement during the next 3 years.

Appendix II: Are the Apache?s Sustainment Systems Technical Support Need
Being Met?

Page 11 GAO- 01- 630 Defense Logistics

Table 3: Aviation and Missile Command?s Apache Sustainment Support
Requirements, Budget Estimates, and Percents for Fiscal Years 2001- 2003

Dollars in millions

Fiscal year Requirement Budget estimate Percent

2001 $31.4 $15.3 48.7 2002 50.2 21.0 41.8 2003 64.6 45.0 69.7 Total $146.2
$81.3 55.6

Source: Compiled from data provided by the Aviation and Missile Command.

The Army has provided guidance for prioritizing the sustainment of all
fielded weapon systems, including the Apache. The guidance breaks
sustainment requirements into six categories:

 senior leader- directed, legal, and emergency safety;

 near- term readiness;

 recapitalization;

 industrial base;

 force modernization fielding plans; and

 routine sustainment. While the Apache is the first priority among aviation
weapon systems, such requirements as strategic intelligence; small arms;
nuclear, chemical, and biological defense; strategic mobility; and initial
sustainment have higher priorities in each of the above categories.
According to an Aviation and Missile Command official, sustainment support
funding levels are generally sufficient to satisfy the senior leader-
directed, legal, and safety requirements but not all of the near- term
readiness requirements. Consequently, lower priority projects are rarely
funded.

For example, in June 2000, maintenance personnel removed a tail rotor
swashplate from an Apache helicopter after finding excessive play between
the rotating and nonrotating swashplates. Although the Army forwarded the
swashplate to Boeing (the contractor that manufactured the helicopter) for
inspection and analysis in July 2000, due to limited sustainment support
funds a contract did not exist to cover the needed engineering analysis and
investigation. Consequently, Boeing did not perform its analysis and
investigation of the tail rotor swashplate until December 2000 when the Army
had sustainment support funds available to award a contract for the required
work. The contractor?s analysis and investigation identified a faulty
overhaul process that affected 88 Army?s Priorities for

Sustainment Projects

Appendix II: Are the Apache?s Sustainment Systems Technical Support Need
Being Met?

Page 12 GAO- 01- 630 Defense Logistics

swashplates and resulted in the grounding of the Apache fleet until the
potentially faulty swashplates could be accounted for. Once the suspect
swashplates were identified and inspected, it was determined that only the
first one was defective. However, according to Army officials, more could
have been defective, and helicopters and lives could have been lost during
the 5 months the part was on the shelf awaiting funding. An Aviation and
Missile Command official stated that in the absence of sufficient
sustainment support funding to routinely investigate all quality deficiency
reports that could affect flight safety, the Command has procedures in place
to elevate the level of review and request additional funding for specific
engineering investigations when circumstances indicate a potential safety
risk to personnel or equipment. However, the external condition of this
particular component did not prompt such a request.

In another example, the Army has ordered older, but still usable, versions
of some Apache parts when newer versions are available because its inventory
records are outdated. The Army has not updated the records since 1995
because of insufficient sustainment support funding. Consequently, the Army
must rely on its parts suppliers to identify and correct its errors when
parts are ordered. (This issue is discussed in more detail in appendix III.)

Appendix III: Have Obsolete Parts Been Procured?

Page 13 GAO- 01- 630 Defense Logistics

The Army and DLA manage over 15, 500 Apache parts. Within the Army, the
Aviation and Missile Command manages the majority of the Apache parts. The
Aviation and Missile Command manages higher dollar value repairable parts,
while DLA primarily manages lower dollar value consumable parts. 1 The
Command maintains the Provisioning Master Record- an inventory database used
by the Army to manage and procure Apache parts.

The Apache fleet consists of two models of the AH- 64 helicopter- the basic
A- model and the upgraded D- model, including the D- model Longbow, which is
equipped with the radar- guided missile. The D- model Apache differs from
the A- model in that it is equipped with a global positioning system,
enhanced cockpit controls, an improved cooling system, and advanced Hellfire
missiles. The Longbow Apache is also equipped with radar to give it ?fire-
and- forget? radar- guided Hellfire missiles. About 175 A- model helicopters
have been upgraded to the D- and Longbow models by Boeing at its Mesa,
Arizona, facility. Production of the upgraded models is expected to continue
until approximately 2006.

We found no evidence that the Army or DLA had procured obsolete (i. e.,
unusable) spare parts for the Apache helicopter. Further, Aviation and
Missile Command, DLA, and Apache program officials as well as
representatives of each of the nine major Apache parts suppliers told us
that they could not recall any instances in which obsolete or unusable
Apache parts had been purchased. Apache battalion maintenance officers at
Fort Hood and Fort Bragg also told us that they had not received obsolete
parts to fill their requisitions.

We found no evidence of obsolete parts being procured; however, the
Provisioning Master Record is outdated and the Army and DLA are vulnerable
to ordering old versions of some parts. While these parts are still usable,
they may not include the latest technological upgrades or be as reliable as
the newer versions. According to Aviation and Missile Command officials, the
Army?s Provisioning Master Record is outdated for two reasons. First, as
discussed previously, it had not been updated since 1995 because of
constrained sustainment support funds. 2 Second, the

1 Reparable parts are expensive items that can be fixed and used again, such
as hydraulic pumps, navigational computers, engines, and landing gear.
Consumable parts, such as bolts and screws, are used extensively to fix
reparable parts and aircraft. 2 This issue was addressed in app. II.
Appendix III: Have Obsolete Parts Been

Procured? Background

Obsolete Parts Army?s Inventory Database

Appendix III: Have Obsolete Parts Been Procured?

Page 14 GAO- 01- 630 Defense Logistics

contract governing the upgrade of A- model aircraft to the D- model allows
Boeing to make configuration changes- which may result in newer versions of
some parts- without notifying the government. These D- model configuration
changes may also affect A- model aircraft.

Because the master record is outdated, the Army sometimes orders older
versions of spare parts when newer, more up- to- date, versions are
available. In these instances, the Army must rely on its spare parts
suppliers to identify the error and notify the Army that a newer spare part
is available. Once notified, the Army then revises its order so that it
receives the latest version. According to representatives of the Army?s nine
largest suppliers of Apache spare parts, each has procedures in place to
identify such errors and has in the past notified the Army of incorrect
orders.

The Army has contracted with Boeing to update the Provisioning Master Record
to reflect the most current version of all spare parts by September 2001 to
reduce the likelihood that it will order old versions of Apache parts in the
future. Boeing officials expect to make over 33,000 changes to the master
record, affecting over 7, 000 parts. This update will include the latest
information available as of December 30, 2000, and will not reflect any
changes made after that date. However, the Army plans another update of the
master record in fiscal year 2002. Additionally, the new D- model production
contract awarded in September 2000 requires Boeing to notify the Army of all
configuration changes it makes to the D- model during production. According
to Apache program officials, this change is intended to allow the Army to
better track configuration changes that might also affect the A- model
aircraft. Corrective Actions Under

Way to Update the Provisioning Master Record

Appendix IV: Do Available Technical Manuals and Technical Data Packages Meet
User Needs?

Page 15 GAO- 01- 630 Defense Logistics

Technical manuals contain parts lists and maintenance information that field
unit and depot personnel use to maintain the Apache helicopters. Apache
manuals are provided in three formats: paper manuals, electronic technical
manuals, and integrated electronic technical manuals. The paper and
electronic technical manuals are used for the A- model Apache helicopters
and integrated electronic technical manuals are used for the D- model Apache
helicopters. All of the manuals contain inspection requirements, maintenance
procedures, and drawings and diagrams of Apache parts, components, and
systems. Electronic technical manuals are searchable Acrobat files created
by scanning the hard copy paper manuals and are provided to the units on
compact discs. Integrated electronic manuals are accessed through an
interactive computer program that contains drop- down menus and offers
options for obtaining information on specific parts and repairs. The
integrated electronic technical manuals are provided through specially
designed laptop computers.

Technical data packages are engineering drawings, parts lists, source data,
and process and procedure specifications that enable the Army to procure
spare parts for the helicopters. The information defines engineering and
manufacturing processes and is used to design, procure, produce, support,
maintain, operate, repair, or overhaul Apache parts.

Army officials and field and depot maintenance personnel believe the Apache
technical manuals provide the information on parts and maintenance
procedures that is necessary to maintain the helicopter. Apache technical
manuals are generally updated annually; however, changes often occur between
annual updates. The Aviation and Missile Command issues technical bulletins
to augment the information contained in the technical manuals between annual
updates. For example, technical bulletins are used to notify maintenance
personnel of safety of flight 1 messages, new inspection requirements, or a
change in maintenance procedures.

The Aviation and Missile Command attempted to update the A- model Apache
technical manuals in fiscal year 2000 but experienced problems that
prevented the update. According to Command officials, the contractor used an
old version of the paper manual as the basis for identifying and

1 A safety of flight restriction pertains to any defect or hazardous
condition, actual or potential, that can cause personal injury, death, or
damage to aircraft, components, or repair kits for which a medium to high
safety risk has been determined. Appendix IV: Do Available Technical Manuals

and Technical Data Packages Meet User Needs?

Background Technical Manuals

Appendix IV: Do Available Technical Manuals and Technical Data Packages Meet
User Needs?

Page 16 GAO- 01- 630 Defense Logistics

making changes to the technical manual. Consequently, the updated electronic
files contained errors and lacked some information. The Command identified
the error during its review and acceptance of the new file and has directed
the contractor to correct the file in fiscal year 2001.

Efforts are under way to update the Apache technical manuals by September
2001. Under this effort, the contractor will change approximately 900 pages.
According to Aviation and Missile Command officials, this effort will
include all required changes identified as of December 30, 2000. However, it
will not include any changes made after that date.

According to Army officials, only a limited amount of technical data is
available for the A- model Apaches. Consequently, the Aviation and Missile
Command employs alternative procedures to overcome the deficiencies.
Insufficient technical data has been an ongoing problem since the early
1980s, when the Apache was procured. Technical data is often very expensive
to obtain from the original equipment manufacturers, and program officials
decided to limit the amount purchased.

To compensate for the lack of technical data, Aviation and Missile Command
officials often use alternative methods such as reverse engineering to
develop the information they need to procure spare parts. The information
gained from the reverse engineering process is also used to update the
maintenance processes in the technical manuals. This process is time-
consuming and can result in delays in getting spare parts to the field
units. 2 However, we did not find a direct link between technical data and
reported readiness rates.

2 This process does not apply to the D- model Apache, since it is still in
production and the manufacturer provides technical support for the
helicopter. Further, the Army intends to rely on the manufacturer for
technical data support throughout the life of the D- model helicopters and
does not intend to purchase technical data packages for that model.
Technical Data

Packages

Appendix V: Are There Unfunded Component and Airframe Upgrade Requirements?

Page 17 GAO- 01- 630 Defense Logistics

Responsibility for development, justification, prioritization, and funding
decisions for Apache component and airframe upgrades rests with weapon
system program managers and the Army?s Deputy Chief of Staff for Operations.
Program managers determine upgrade requirements based on safety and
reliability information received from Apache units and contractors. The
Apache program manager prioritizes and ranks the requirements based on his
knowledge of reliability and maintenance issues and those items users
identify as the highest priority. The program manager?s requirements are
forwarded to the Army?s Office of the Deputy Chief of Staff for Operations,
where the requirements for the Apache, as well as all other weapon systems,
are reviewed and validated. The Deputy Chief of Staff for Operations makes
final decisions on the projects to be funded and may or may not choose those
projects designated as highest priority by the program manager. The two
highest priority requirements are generally funded. The remaining
requirements are considered unfunded in the current fiscal year and may
appear on the next fiscal year?s requirement list.

Component upgrades are primarily paid for using procurement funds from the
Army?s aircraft procurement account. These funds are used for projects
related to procurement, production, modification, modernization,
engineering, and acceptance testing of the aircraft and its related ground
support equipment.

In fiscal years 2001 and 2002, the Army identified unfunded requirements
totaling over $168 million and $158 million, respectively, for component
upgrades to the Apache helicopter. As shown in tables 4 and 5, the component
upgrades include various projects, ranging from a new onboard video recorder
to an upgrade of critical aircraft components such as main transmissions,
the main rotor head, and the main landing gear. Additionally, items such as
internal auxiliary fuel systems, advanced rotor systems, drive system
improvements, and video transmission receptions appear as unfunded
requirements in both fiscal years. With the exception of the Common Engine
Program, all of the component upgrade projects are to be paid for with
procurement funds. Appendix V: Are There Unfunded Component

and Airframe Upgrade Requirements? Background

Component Upgrades

Appendix V: Are There Unfunded Component and Airframe Upgrade Requirements?

Page 18 GAO- 01- 630 Defense Logistics

Table 4: Fiscal Year 2001 Unfunded Requirements for Component Upgrades (as
of September 1999)

Dollars in millions

Project Purpose Amount unfunded

Internal Auxiliary Fuel System Provide integration and retrofit for 98-
108gallon extended range fuel tank and

approximately 240- round 30- millimeter ammunition pack.

$16. 2 APR- 39( v) Radar Warning Receiver 1553 Card Eliminate obsolete parts
on the radar

warning receiver circuit card assembly and recurring costs to procure 298
assemblies.

1. 4 Advanced Apache Rotor System Procure 530 sets of new, lower cost,

composite rotors with improved performance, reliability, and
maintainability.

79.3 Drive System Improvement Upgrade the Apache Drive System to

include intermediate, tail rotor, and nose gearboxes; transmissions; and
tail rotor drive shafts.

47.5 Common Engine Program Provide a new, more powerful engine, to

be used on the AH- 64D, UH- 60 and SH- 60 aircraft.

2. 7 Fire Control Radar Air- to Air Enhancement Procure and integrate the
air- to- air

enhancement modification on 227 aircraft equipped with fire control radar.

1. 6 Multimode Laser Upgrade the Laser Range

Finder/ Designator of the Target Acquisition Designator Sight. 17.6 Video
Transmission Reception Provide ability to transmit battlefield video

to desired location, providing/ receiving intelligence and damage
assessments in 530 aircraft.

1. 0 Apache Main Rotor Blade Repair Repair 252 main rotor blades. 1. 0 Video
Recorder Upgrade Upgrade onboard mission video recorder

for 530 aircraft. 0. 3 30MM Turret Diagnostic Testing Ensure 30- millimeter
turret meets Multi Role Area Weapon System specifications

and accuracy requirements. 0.2

Total $168.8 Source: Aviation Program Executive Office.

Appendix V: Are There Unfunded Component and Airframe Upgrade Requirements?

Page 19 GAO- 01- 630 Defense Logistics

Table 5: Fiscal Year 2002 Unfunded Requirements for Component Upgrades (as
of February 2001)

Dollars in millions

Requirement Purpose Projected

amount unfunded

Internal Auxiliary Fuel System Purchase and integration of A and B kits for

internal, crashworthy, ballistically tolerant 100- gallon fuel tank, and
246- round 30- millimeter ammunition storage magazine. Army expects to fund
$10.7 million for this project in fiscal year 2002.

$4.6 Video Recorder Upgrade Upgrade onboard mission video recorder for

505 Apache aircraft (214 A- models and 291 D- models).

4.8 Video Transmission Reception Provide ability to transmit battlefield
video to

desired location, providing/ receiving intelligence and damage assessment
(upgrade for entire fleet of 743 aircraft).

1.0 Aerial Rocket Control System Rebuild rocket control panel for 408 Apache

aircraft to correct uncommanded rocket launches.

2.6 RFI Frequency Extension Expand frequency coverage of the Radio

Frequency Interferometer to enable identification of newly deployed
emitters.

4.0 AH- 64A Reliability and Safety Enhancement

Accelerate program for A- model Apache upgrades for multiple components
including main transmissions, main rotor heads, gun turrets, and main
landing gear. Army expects to fund $2. 86 million for this project in fiscal
year 2002.

44.9 AH- 64 D Multi- year II Procurement Procure 6 Longbows in fiscal year
2002 out

of 99 additional aircraft planned to achieve a total requirement of 600
Longbows.

48.7 AH- 64D Reliability and Enhancement Accelerate program for D- model
Apache

upgrades for main transmission overhauls with new sprag clutches, main rotor
head with new strap packs, engine nose gearboxes, and other upgrades. Army
expects to fund $5. 7 million for this project in fiscal year 2002.

25.5 Advanced Apache Rotor System Develop and procure a new lower cost

composite rotor for 600 Apache A- and D- model aircraft with improved
performance, reliability, and maintainability.

15.7 Drive System Improvement Upgrade the system to include intermediate,

tail rotor and nose gearboxes; transmissions; and tail rotor drive shafts.

6. 9 Total $158.9 Source: Army Deputy Chief of Staff of Operations.

Appendix V: Are There Unfunded Component and Airframe Upgrade Requirements?

Page 20 GAO- 01- 630 Defense Logistics

In discussing our draft report in early May 2001, Army officials told us
that they are rethinking how the Apache will be used in the future and are
considering withdrawing the fiscal year 2002 unfunded requirements for
component upgrades described in Table 5. According to program officials,
this decision is part of an effort to alleviate pressure on the Army to
cancel the second phase of the Longbow procurement contract and to focus on
the Army?s aviation recapitalization effort. However, Army officials did not
provide documentation supporting the planned withdrawal of the fiscal year
2002 unfunded component upgrade requirements.

According to Army officials, there are no unfunded requirements for airframe
upgrades because such upgrades are a part of the recapitalization program.
Recapitalization is defined as the rebuild and selected upgrade of currently
fielded systems to ensure operational readiness and extend the operational
life of the system. The purpose of the program is not only to restore
equipment to its original condition but also to insert new technology to
enhance the system?s capability, reliability, safety, and sustainability.
Airframe upgrades include strengthening the metal in the airframe by
improving the bulkhead mounts, slot closures to repair vibrations to the
tail of the aircraft, and stiffening of the aircraft?s frame to reduce
vibrations. Unfunded

Requirements for Airframe Upgrades

Appendix VI: Have the Mandate Issues Affected Apache Fleet Readiness?

Page 21 GAO- 01- 630 Defense Logistics

The Army has established procedures for reporting on the physical condition
and ability/ inability of its weapon systems to perform their intended
missions. The Army uses a weapon system?s availability for missions to
indicate its reliability, maintainability, and associated problems. The
Army?s measures of availability are "fully mission capable," "partially
mission capable", and "not mission capable." The Army designates a weapon
system as fully mission capable when it can perform all of its assigned
combat missions without endangering the lives of its crew or operators. A
weapon system is partially mission capable when it is safely usable and can
perform one or more but not all of its missions. The Army considers a
weapons system ?mission capable? when it is in either the fully or partially
mission capable category. A weapon system is not mission capable when it
cannot perform any of its assigned missions because of either maintenance or
supply problems. The Army?s fully mission capable goal for the Apache is for
the helicopter to be able to perform its intended mission 70 percent of the
time. The mission capable goal for the Apache is 75 percent.

As indicated in figure 1, the Apache fleet generally did not meet the Army?s
fully mission capable goal from September 1997 through January 2001.
Appendix VI: Have the Mandate Issues

Affected Apache Fleet Readiness? Background

Apache?s Ability to Meet Readiness Goals

Appendix VI: Have the Mandate Issues Affected Apache Fleet Readiness?

Page 22 GAO- 01- 630 Defense Logistics

Figure 1: Total Apache Fleet Fully Mission Capable Rates (Sept. 1997 through
Jan. 2001)

Source: Aviation and Missile Command.

Our examination of Apache readiness data and interviews with readiness
officials did not indicate that any of the issues we reviewed contributed to
the failure to achieve readiness goals. Rather, the fleet fell short of the
Army?s fully mission capable goal because of safety- of- flight actions and
low readiness levels experienced by Army Reserve and National Guard units.
However, sustainment support is critical to maintaining weapon system
readiness. For example, in an October 2000 information paper proposing a
change in sustainment support budgeting practices, Army officials noted that
the deferral of engineering efforts required to eliminate technical
obsolescence and to process engineering changes has affected Apache
readiness.

Although overall fleet fully mission capable rates were generally below the
Army?s goal, active units met or exceeded the goal with the exception of two
periods when safety- of- flight actions grounded the entire Apache fleet, as
shown in figure 2. Active Apache Units' Fully

Mission Capable Rates

Percent 0 20

40 60

80 100

Actual Goal Sept. 1997 May 1998 Jan. 1999 Sept. 1999 May 2000 Jan. 2001

Appendix VI: Have the Mandate Issues Affected Apache Fleet Readiness?

Page 23 GAO- 01- 630 Defense Logistics

Figure 2: Active Army Apache Fully Mission Capable Rates (Sept. 1997 through
Jan. 2001)

Source: Aviation and Missile Command.

Between November 1999 and April 2000, the fleet was grounded because of two
flight safety issues that occurred almost simultaneously in November 1999.
In the first instance, the Apache fleet was grounded following an accident
caused by the failure of transmission accessory gearbox clutches. 1 The
second problem resulted from the failure of hanger bearing assemblies in the
tail rotor drive shaft. 2 The fleet was grounded again in December 2000
because of the tail rotor swashplate assembly problem described in appendix
II.

1 The transmission accessory gearbox clutches provide a primary and backup
mechanical drive between the main transmission and the accessory gearbox. If
both accessory gearbox clutches fail in flight, the helicopter will lose its
primary electrical, hydraulic, and pneumatic power systems. 2 Hanger bearing
assemblies (two per helicopter) provide alignment, coupling and support for
three of the helicopter?s tail rotor drive shaft sections. If either hanger
bearing assembly fails, the helicopter will lose power to its tail rotor
system.

0 20

40 60

80 100 Percent

Actual Goal Sept. 1997 May 1998 Jan. 1999 Sept. 1999 May 2000 Jan. 2001

Appendix VI: Have the Mandate Issues Affected Apache Fleet Readiness?

Page 24 GAO- 01- 630 Defense Logistics

Army Reserve and National Guard Apache units reported readiness rates lower
than the Army?s goal during the period we examined, as shown in figures 3
and 4.

Figure 3: Army Reserve Apache Fully Mission Capable Rates (Sept. 1997
through Jan. 2001)

Source: Aviation and Missile Command.

Reserve Component Units' Fully Mission Capable Rates

Actual Goal 0

20 40

60 80

100 Percent Sept. 1997 May 1998 Jan. 1999 Sept. 1999 May 2000 Jan. 2001

Appendix VI: Have the Mandate Issues Affected Apache Fleet Readiness?

Page 25 GAO- 01- 630 Defense Logistics

Figure 4: Army National Guard Apache Fully Mission Capable Rates (Sept. 1997
through Jan. 2001)

Source: Aviation and Missile Command.

According to an Army Reserve official, the Reserve units generally report
lower readiness rates than the active units because they have (1) a lower
priority for obtaining spare parts and (2) a shortage of maintenance
personnel in their Apache battalions. Army National Guard units report even
lower readiness rates than their Army Reserve counterparts. An Army National
Guard official stated that that National Guard Apache units report lower
readiness rates because they (1) are funded at a lower level than active
units; (2) have a lower priority for obtaining spare parts, and therefore,
do not receive parts as quickly as their active counterparts; and (3) have
some of the oldest Apaches in the fleet that are less reliable.

0 20

40 60

80 100 Percent

Actual Goal Sept. 1997 May 1998 Jan. 1999 Sept. 1999 May 2000 Jan. 2001

Appendix VII: Comments From the Department of Defense Page 26 GAO- 01- 630
Defense Logistics

Appendix VII: Comments From the Department of Defense

Appendix VIII: GAO Contacts and Staff Acknowledgments

Page 27 GAO- 01- 630 Defense Logistics

Gary Billen (214) 777- 5703 Penney Harwell (214) 777- 5611 In addition to
those named above, Lou Modliszewski, Pam Valentine, John Brosnan, and Nancy
Ragsdale made key contributions to this report. Appendix VIII: GAO Contacts
and Staff

Acknowledgments GAO Contacts Acknowledgments

(709534)

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