    Navy Aviation: F/A-18E/F will Provide Marginal Operational Improvement at
    High Cost (Chapter Report, 06/18/96, GAO/NSIAD-96-98).

    GAO reviewed the Navy's plan to procure with F/A-18E/F aircraft,
    focusing on: (1) whether operational deficiencies in the F/A-18C/D cited
    by the Navy to justify the need for the F/A-18E/F have materialized and,
    if they have, the extent to which the F/A-18E/F would correct them; (2)
    whether the F/A-18E/F will provide an appreciable increase in
    operational capability over the F/A-18C/D; and (3) the reliability of
    the cost estimates for the F/A-18E/F and a comparison of those estimates
    with the costs of potential alternatives.

    GAO found that: (1) the F/A-18C/D could achieve strike ranges far
    greater than the F/A-18E/F with some modifications; (2) F/A-18C/D
    aircraft in service in Bosnian operations have achieved a carrier
    recovery payload capacity greater than the F/A-18E/F carrier recovery
    payload capacity; (3) while the F/A-18E/F would enjoy improved
    survivability over the F/A-18C/D, current threats do not justify the
    planned improvements, and those improvements might be better attained at
    less cost with the next-generation Joint Strike Fighter; (4) despite the
    Navy's prediction, the F/A-18C/D has the additional space required for
    new avionics systems; (5) projected F/A-18E/F payload improvements may
    not occur due to air flow problems and weight limitations; (6) the
    next-generation Joint Strike Fighter may cost up to $21 million less per
    aircraft, and be more capable than the F/A-18E/F; (7) the F/A-18E/F will
    cost $9.6 million more per aircraft than originally estimated; and (8)
    the Navy would save $17 billion in recurring flyaway costs if it
    procured F/A-18C/D aircraft rather than F/A-18E/F aircraft.

    --------------------------- Indexing Terms -----------------------------

     REPORTNUM:  NSIAD-96-98
         TITLE:  Navy Aviation: F/A-18E/F will Provide Marginal Operational
                 Improvement at High Cost
          DATE:  06/18/96
       SUBJECT:  Navy procurement
                 Naval aircraft
                 Tactical air forces
                 Cost effectiveness analysis
                 Advanced weapons systems
                 Fighter aircraft
                 Air warfare
                 Military cost control
                 Defense capabilities
    IDENTIFIER:  F/A-18 Aircraft
                 Joint Strike Fighter
                 F/A-18C/D Aircraft
                 F/A-18E/F Aircraft
                 Hornet Aircraft
                 Bosnia
                 F-404 Engine
                 F-414 Engine
                 ALR-67(V)3 Radar Warning Receiver
                 DOD Bottom-Up Review
                 Joint Advanced Strike Technology Program
                 ALE-47 Countermeasures Dispensing System
                 Advanced Medium Range Air-to-Air Missile
                 AMRAAM

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    Cover
    ================================================================ COVER

    Report to Congressional Committees

    June 1996

    NAVY AVIATION - F/A-18E/F WILL
    PROVIDE MARGINAL OPERATIONAL
    IMPROVEMENT AT HIGH COST

    GAO/NSIAD-96-98

    Navy Aviation

    (707072)

    Abbreviations
    =============================================================== ABBREV

      AMRAAM - Advanced Medium Range Air-to-Air Missile
      CNA - Center for Naval Analysis
      DOD - Department of Defense
      EOA - Early Operational Assessment
      EPE - Enhanced Performance Engine
      GAO - General Accounting Office
      HARM - High-Speed Anti-Radiation Missile
      JAST - Joint Advanced Strike Technology
      JSF - Joint Strike Fighter
      JSOW - Joint Standoff Weapon
      LRIP - low-rate initial production
      NAVAIR - Naval Air Systems Command

    Letter
    =============================================================== LETTER

    B-260367

    June 18, 1996

    Congressional Committees

    The F/A-18E/F program is one of the Department of Defense's most
    costly tactical aviation programs.  We reviewed the F/A-18E/F program
    as part of our overall review of the Navy's efforts to modernize its
    tactical aircraft fleet.  We included the F/A-18C/D, F/A-18E/F, and
    DOD's plans for the next generation Joint Strike Fighter in our
    review.

    Our review objectives were to (1) determine whether operational
    deficiencies in the F/A-18C/D cited by the Navy to justify the need
    for the F/A-18E/F have materialized and, if they have, the extent to
    which the E/F would correct them, (2) ascertain whether the F/A-18E/F
    will provide an appreciable increase in operational capability over
    the F/A-18C/D, and (3) review the reliability of the cost estimates
    for the F/A-18E/F and compare those estimates with the costs of
    potential alternatives to the E/F program.

    Given the high cost and marginal operational improvements that the
    F/A-18E/F would provide, this report recommends that the Secretary of
    Defense reconsider the decision to produce the F/A-18E/F aircraft
    and, instead, consider procuring additional F/A-18C/Ds until the next
    generation strike fighter achieves operational capability.  We also
    suggest that the Congress, in considering DOD's fiscal year 1997
    budget request, may wish to direct that no funds may be obligated for
    procurement of the F/A-18E/F until alternatives to the E/F program
    are fully considered.

    We believe that implementing our suggested approach could result in
    savings of almost $17 billion.  We are addressing this report to you
    because of your jurisdiction over this issue.

    Please contact me at (202) 512-4841 if you or your staff have any
    questions concerning this report.  Major contributors to this report
    are listed in appendix IV.

    Louis J.  Rodrigues
    Director, Defense Acquisitions Issues

    List of Congressional Committees

    The Honorable Strom Thurmond
    Chairman
    The Honorable Sam Nunn
    Ranking Minority Member
    Committee on Armed Services
    United States Senate

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

    The Honorable Floyd Spence
    Chairman
    The Honorable Ronald V.  Dellums
    Ranking Minority Member
    Committee on National Security
    House of Representatives

    The Honorable C.W.  Bill Young
    Chairman
    The Honorable John P.  Murtha
    Ranking Minority Member
    Subcommittee on National Security
    Committee on Appropriations
    House of Representatives

    EXECUTIVE SUMMARY
    ============================================================ Chapter 0

       PURPOSE
    ---------------------------------------------------------- Chapter 0:1

    The F/A-18E/F program, at a projected total program cost of $63.09
    billion (fiscal year 1996 dollars)/$89.15 billion (then-year
    dollars),\1 is one of the most costly aviation programs in the
    Department of Defense (DOD).  It is the successor to several
    unsuccessful attempts to modernize the Navy's tactical aviation fleet
    and is intended to complement and eventually replace the Navy's
    F/A-18C/D and F-14 aircraft.  GAO's review focused on determining
    whether continued development of the F/A-18E/F is the most
    cost-effective approach to modernizing the Navy's tactical aircraft
    fleet.  Specific objectives were to (1) determine whether operational
    deficiencies in the F/A-18C/D cited by the Navy to justify the need
    for the F/A-18E/F have materialized and, if they have, the extent to
    which the E/F would correct them, (2) ascertain whether the F/A-18E/F
    will provide an appreciable increase in operational capability over
    the F/A-18C/D, and (3) review the reliability of the cost estimates
    for the F/A-18E/F and compare those estimates with the costs of
    potential alternatives to the E/F program.

    --------------------
    \1 Then-year dollar expenditures include estimated inflation for the
    years in which the expenditures are expected to occur; constant
    dollar expenditures, by holding purchasing power constant, eliminate
    the effect of inflation.  The total program cost has recently been
    reduced to $80.96 billion (then-year dollars) based on revised
    economic assumptions that lowered annual inflation indexes from 3
    percent to 2.2 percent.

       BACKGROUND
    ---------------------------------------------------------- Chapter 0:2

    The Navy performs its carrier-based missions with a mix of fighter
    (air-to-air), strike (air-to-ground), and strike/fighter (multirole)
    aircraft.  Currently, carrier-based F-14 fighter aircraft perform the
    air-to-air missions; A-6Es perform the air-to-ground missions; and
    F/A-18s perform the air-to-air and air-to-ground missions.

    Since the late 1980s, the Navy has participated in several
    unsuccessful joint service programs to replace its A-6E attack
    aircraft with stealth aircraft.  Initial efforts began with the A-12
    program, but that program was terminated in 1991 for technical and
    cost reasons.  The Navy continued its modernization efforts through a
    new program designated the A/F-X, and requested funding to upgrade
    its F/A-18\2 through a modification program designated the F/A-18E/F.
    In 1993, DOD's Bottom-Up Review concluded that DOD could not afford
    all of its aviation programs and recommended termination of the A/F-X
    program.  However, the Bottom-Up Review recommended that the
    F/A-18E/F program continue and that a new program, the Joint Advanced
    Strike Technology (JAST) program, be initiated to seek ways to make
    the services' next generation strike aircraft more affordable.

    The F/A-18E/F program, which originated from the 1988 Hornet 2000
    study conducted by the Naval Air Systems Command and McDonnell
    Douglas Aerospace Corporation, was approved as a Major Modification
    program on May 12, 1992.  The total program cost, estimated to be
    $63.09 billion (fiscal year 1996 dollars)/$89.15 billion (then-year
    dollars), is comprised of $5.783 billion (fiscal year 1996
    dollars)/$5.803 billion (then-year dollars) in development costs, and
    $57.31 billion (fiscal year 1996 dollars)/$83.35 billion (then-year
    dollars) in procurement costs for 1,000 aircraft.  Initial
    operational capability is scheduled for 2000, with fielding of the
    first operational carrier-based squadron scheduled for 2003.
    Procurement of the E/F is scheduled to continue through 2015.

    The Commission on Roles and Missions of the Armed Forces, in its May
    1995 report, concluded that DOD may have greater quantities of strike
    aircraft and other deep attack weapon systems than it needs.  The
    commission recommended, and DOD agreed to conduct, a DOD-wide
    cost-effectiveness study focused on finding the appropriate
    combination and quantities of deep attack capabilities currently
    fielded and under development by all the services.

    In conducting its review, GAO acquired Navy data that the service
    used to project operational deficiencies in the F/A-18C/D and
    compared that data with the current C/D operational performance to
    determine whether the projected deficiencies had materialized;
    evaluated the Hornet 2000 study, acquisition reports, operational
    requirements documents, and engineering and test data that DOD used
    in justifying the F/A-18E/F program; and obtained and evaluated E/F
    procurement cost data that the Navy provided to the Congress.

    --------------------
    \2 The first major upgrade to the F/A-18 fleet resulted in the
    F/A-18C/D.  First delivery of the C/Ds began in late 1987.

       RESULTS IN BRIEF
    ---------------------------------------------------------- Chapter 0:3

    As of December 31, 1995, the Navy had spent about $3.75 billion
    (then-year dollars) on the development phase of the F/A-18E/F
    program.  DOD's next major decision is whether to proceed into the
    estimated $57.31 billion (fiscal year 1996)/$83.35 billion (then-year
    dollars) procurement program to manufacture 1,000 aircraft.

    The operational deficiencies in the F/A-18C/Ds that the Navy cited in
    justifying the F/A-18E/F either have not materialized as projected or
    can be corrected with nonstructural changes to the C/D.  Furthermore,
    E/F operational capabilities will only be marginally improved over
    the C/D model.  In addition, although the E/F will have increased
    range over the C/D model, the C/D's range will exceed the range
    required by the E/F's system specifications and the E/F's range
    increase is achieved at the expense of its aerial combat performance.
    Also, modifications to increase the E/F's payload have created a
    problem when weapons are released from the aircraft that may reduce
    the E/F's potential payload capability.

    Over the years, the Navy has improved the operational capabilities of
    the F/A-18C/D so that procuring more of them, rather than the new
    model E/F aircraft, could be the most cost-effective approach to
    modernizing the Navy's tactical aircraft fleet in the mid-term.  In
    that regard, additional upgrades, should they be needed, could be
    made to the F/A-18C/D, which would further improve its capabilities.
    These upgrades include such things as a larger fuel tank for more
    range and strengthened landing gear and other changes to increase
    carrier recovery payload.  Then, for the long term, the JAST
    program's newly designated Joint Strike Fighter could be an
    alternative to the F/A-18E/F.  The Joint Strike Fighter operational
    capabilities are projected by the JAST office to be equal or superior
    to the F/A-18E/F at a lower unit cost.

    DOD's $43.6 million (fiscal year 1996 dollars) unit recurring flyaway
    cost\3 estimate for the F/A-18E/F is understated.  The estimate is
    based on a total buy of 1,000 aircraft--660 for the Navy and 340 for
    the Marine Corps--and an eventual annual production rate of 72
    aircraft per year.  However, the total number of aircraft to be
    procured and the annual production rate are overstated.  The Marine
    Corps does not plan to buy the F/A-18E/F aircraft, and in 1992, the
    Congress questioned whether an annual production rate of 72 aircraft
    was affordable.  GAO calculations show that reducing the number of
    aircraft to be procured and the annual production rate to more
    realistic levels will increase the unit recurring flyaway cost of the
    aircraft from about $44 million to $53 million (fiscal year 1996
    dollars).  This compares to $28 million (fiscal year 1996 dollars)
    for the F/A-18C/D.  GAO calculated that the Navy could save almost
    $17 billion (fiscal year 1996 dollars) in recurring flyaway costs by
    buying 660 new F/A-18C/D model aircraft instead of 660 F/A-18E/F
    model aircraft.

    --------------------
    \3 GAO used recurring flyaway costs because DOD has consistently
    maintained that these costs are the most appropriate to compare the
    costs of different aircraft.  Recurring flyaway costs include costs
    related to the production of the basic aircraft and do not include
    all procurement costs.  Appendix I contains a more detailed
    discussion of what makes up various costs and how they are
    calculated.

       PRINCIPAL FINDINGS
    ---------------------------------------------------------- Chapter 0:4

          F/A-18E/F WILL PROVIDE
          MARGINAL IMPROVEMENTS OVER
          F/A-18C/D
    -------------------------------------------------------- Chapter 0:4.1

    The Navy justified the need for the F/A-18E/F in three key areas:
    increased range, the capability to return to the carrier with unused
    weapons and stores (referred to as carrier recovery payload), and
    improved survivability.

    Although the F/A-18E/F range will be greater than the F/A-18C/D, the
    C/D could achieve strike ranges far greater than the target distances
    stipulated in the E/F's system specifications by flying the same
    high-altitude missions as the E/F.  Further range improvements,
    should the Navy decide they are necessary, can be made to the C/D by
    using the larger 480-gallon external fuel tanks that are planned to
    be used on the E/F.  Furthermore, even with increased range, both the
    C/D and E/F will require aerial refueling to hit most targets if
    low-altitude missions are flown rather than the higher altitude
    missions now being planned for.  Additionally, the E/F's increased
    range is achieved at the expense of combat performance.
    Specifically, the E/F's limited improvement in engine thrust, coupled
    with the fact that the E/F is a larger aircraft than the C/D, results
    in the E/F having less air-to-air combat capability in sustained turn
    rate, maneuvering, and acceleration than the C/D.

    The F/A-18C carrier recovery payload deficiency has not occurred as
    the Navy had predicted in 1992 when the F/A-18E/F was approved.
    F/A-18Cs operating in support of Bosnian operations are now routinely
    returning to the carrier with operational loads that exceed the
    Navy's stated carrier recovery payload capacity.  This carrier
    recovery payload is currently greater than when the F/A-18C/D was
    introduced into the fleet in fiscal year 1988.  With landing gear and
    other modifications, the C/D's carrier recovery payload capacity
    would be greater than the carrier recovery payload sought for the
    F/A-18E/F.

    Although improvements are planned for the F/A-18E/F to increase its
    survivability in combat, the need for the aircraft was not justified
    to counter threats that could not be countered with existing or
    improved F/A-18C/Ds.  Also, the effectiveness of the stealth
    improvements planned for the E/F is questionable and might better be
    attained at less cost with the next generation Joint Strike Fighter.
    For example, unlike the F/A-18E/F, which will carry all of its
    weapons externally, the Joint Strike Fighter will likely carry at
    least two air-to-ground and two air-to-air weapons internally.  This
    configuration will allow the Joint Strike Fighter to maximize its
    stealthiness and thus increase its survivability in the high-threat,
    early stages of a conflict.

          C/D HAS SPACE FOR GROWTH AND
          E/F MUST RESOLVE PAYLOAD
          PROBLEMS
    -------------------------------------------------------- Chapter 0:4.2

    The Navy stated that by the mid-1990s, the C/D would not have space
    required for new avionics systems.  GAO determined that the growth
    deficiency has not occurred as projected and that the C/D does have
    space for growth.  Furthermore, the use of miniaturization and
    modularization in future upgrades to the C/D are expected to increase
    the C/D's capacity to incorporate additional avionics systems.

    The Navy also stated that the F/A-18E/F would provide increased
    payload capacity.  GAO found that projected F/A-18E/F payload
    improvements may not occur.  The E/F, with its two additional wing
    stations, will have increased payload capacity over the C/D.
    However, air flow problems around the fuselage and weapons stations,
    as well as the proposed E/F weapons carrying configuration that
    places the weapons closer to the center fuselage and closer to each
    other than is the case with C/D models, may preclude the E/F from
    safely deploying the larger payload.  Furthermore, a 1,150-pound
    weight limitation on each of the two additional E/F stations will not
    allow the E/F to carry any more of the heavy precision weapons than
    the C/D can carry.  These weapons, which include the Harpoon,
    Standoff Land Attack Missile, Laser Guided MK-84, Guided Bomb
    Unit-24, and WALLEYE II, are needed to destroy hardened targets and
    to maintain stand-off distances needed for improved survivability.

          JOINT STRIKE FIGHTER IS
          PREDICTED TO BE LESS COSTLY
          AND MORE CAPABLE THAN THE
          F/A-18E/F
    -------------------------------------------------------- Chapter 0:4.3

    Contractor concept exploration and demonstration studies for the JAST
    program indicated that an affordable Joint Strike Fighter can be
    built that would be less expensive and more capable than the
    F/A-18E/F.  The JAST office stated that affordability is a critical
    characteristic for the Joint Strike Fighter.  Accordingly, it has
    established a program objective that the Navy's version of the Joint
    Strike Fighter will have a unit recurring flyaway cost of $32 million
    to $40 million (fiscal year 1996 dollars) compared to $53 million for
    the F/A-18E/F, depending on which contractor's concept is chosen.
    According to the JAST office's Joint Initial Requirements Document,
    the Joint Strike Fighter cost objectives are based on projected
    budget constraints and service needs.  The Navy version of the Joint
    Strike Fighter is scheduled to begin delivery in 2007.  It is
    expected to be a stand alone, stealthy, first-day-of-the-war,
    survivable aircraft that will not be as dependent on other support
    aircraft for its survivability as the F/A-18E/F is expected to be.
    The operational capabilities of the Navy's Joint Strike Fighter are
    expected to be comparable to what DOD planned to achieve in the A/F-X
    aircraft.  It is too soon to determine the extent to which the Joint
    Strike Fighter cost and performance goals will be achieved.

          F/A-18E/F WILL COST MORE
          THAN CURRENTLY ESTIMATED
    -------------------------------------------------------- Chapter 0:4.4

    The F/A-18E/F production estimate is based on a total program buy of
    1,000 aircraft (660 for the Navy and 340 for the Marine Corps) and an
    eventual annual production rate of 72 aircraft.  Flyaway and total
    program costs vary with the total number of aircraft bought and the
    annual production rate.  According to Marine Corps officials and the
    Marine Corps Aviation Master Plan, the Corps does not intend to buy
    any F/A-18E/Fs.  Therefore, the 1,000-aircraft buy is overstated by
    340 aircraft.

    Furthermore, the Congress questioned whether an annual production
    rate of 72 aircraft is realistic, and it directed the Navy to
    calculate costs based on more realistic estimates of 18, 36, and 54
    aircraft per year.  The Navy has not yet reported revised cost
    estimates based on this change to production rates.  However, DOD
    planning documents show that the annual production rate of the E/F
    will be cut to 36 aircraft once the Joint Strike Fighter becomes
    available.  GAO calculated that a reduction in the total F/A-18E/F
    program buy to 660 aircraft and at an annual production rate of 36
    aircraft would increase the aircraft's unit recurring flyaway cost
    from $43.6 million to $53.2 million (fiscal year 1996 dollars).

    In fiscal year 1996 dollars, the F/A-18C/D has a unit recurring
    flyaway cost of $28 million based on an annual production rate of 36
    aircraft.  This cost difference in unit recurring flyaway cost would
    result in a savings of almost $17 billion (fiscal year 1996 dollars)
    if the Navy were to procure 660 F/A-18C/Ds rather than 660
    F/A-18E/Fs.  GAO's estimated savings do not include the cost of C/D
    upgrades, such as the larger 480-gallon external fuel tanks for
    improved range or the strengthened landing gear to increase carrier
    recovery payload.  However, GAO's estimated savings are conservative
    because they also do not include planned E/F upgrades and are based
    on recurring flyaway costs that do not include the other items that
    make up total procurement costs.  (See app.  I for a discussion of
    how unit costs are computed.) Additionally, GAO's estimated savings
    do not include savings that would accrue from having fewer models of
    F/A-18 aircraft in the inventory.  The cost benefits would result
    from having common aircraft spare parts, simplified technical
    specifications, and reduced support equipment variations, as well as
    reductions in aircrew and maintenance training requirements.

       RECOMMENDATION
    ---------------------------------------------------------- Chapter 0:5

    Given the cost and the marginal improvements in operational
    capabilities that the F/A-18E/F would provide, GAO recommends that
    the Secretary of Defense reconsider the decision to produce the
    F/A-18E/F aircraft and, instead, consider procuring additional
    F/A-18C/Ds.  The number of F/A-18C/Ds that the Navy would ultimately
    need to procure would depend upon when the next generation strike
    fighter achieves operational capability and the number of those
    aircraft the Navy decides to buy.

       AGENCY COMMENTS AND GAO'S
       EVALUATION
    ---------------------------------------------------------- Chapter 0:6

    In its comments on GAO's draft report, DOD said that it is convinced
    that the fundamental reasons for developing the F/A-18E/F remain
    valid.  Since DOD provided no data or information that GAO had not
    acquired and analyzed during its review, GAO has not changed its
    position that procuring the E/F is not the most cost-effective
    approach to modernizing the Navy's tactical aircraft fleet.  GAO
    recognizes that the E/F will provide some improvements over the C/D.
    However, the C/D's current capabilities are adequate to accomplish
    its assigned missions.  Based on the marginal nature of the
    improvements and the E/F's projected cost compared to the
    alternatives discussed in the GAO report, GAO believes that its
    recommendation that DOD reconsider its decision to produce the
    F/A-18E/F aircraft and, instead, consider procuring additional C/D
    aircraft until the next generation strike fighter becomes
    operationally available represents sound fiscal planning.  GAO
    formulated its position within the context of current budget
    constraints, the decreased military threat environment, and
    statements by DOD officials, such as the Chairman of the Joint Chiefs
    of Staff, that DOD's current plans to upgrade its tactical aircraft
    fleet will not be affordable.  Additionally, as GAO pointed out, the
    national military strategy directs that major new investments should
    have substantial payoff.  GAO does not believe that procuring the
    F/A-18E/F would meet this test.

    DOD's entire comments on the draft report and GAO's evaluation are
    included in appendix III.  DOD's specific comments and GAO's
    evaluation regarding the key areas that DOD has cited in justifying
    the E/F--range, carrier recovery payload, and survivability--are
    summarized in the following sections.

    Regarding the comparative range of the C/D and E/F, DOD stated that
    the F/A-18E/F Early Operational Assessment verified that the E/F will
    outperform the C/D in range by 40 to 50 percent.  Although GAO also
    reported that the E/F will have a range greater than the C/D, its
    analysis of the Early Operational Assessment showed that the E/F's
    potential range improvements are not as great as DOD claimed.  The
    specific range data are classified, but GAO's analysis showed that
    the E/F's range advantage over the C/D is about half of DOD's claim.
    Given that the E/F will have some range advantage over the C/D, the
    issue is whether the E/F's range advantage justifies buying the E/F
    at a unit cost of about $53 million instead of buying the C/D at a
    unit cost of about $28 million (1996 dollars for 660 aircraft).  In
    that regard, the Secretary of the Navy has stated that about 85
    percent of the service's targets are within 200 miles of shore and
    are, therefore, within the C/D's range.\4 Additionally, other DOD
    assets will be available to engage targets beyond the C/D's range.
    Consequently, GAO questions whether the E/F's potential range
    advantage justifies the increased procurement cost.

    Regarding carrier recovery payload, according to DOD's comments,
    payload of the F/A-18C is 6,281 pounds.  This shows that carrier
    recovery payload has not declined to 5,785 pounds as the Navy had
    projected.  Furthermore, a waiver currently permits the F/A-18C
    aircraft in Bosnia to return to the carrier with more payload weight
    than the Navy projected would be available.  However, DOD stated this
    waiver increases risk and would adversely affect airframe structural
    life--particularly in the future when heavier precision-guided
    munitions are deployed on the aircraft.  DOD also stated that the C/D
    landing gear would require strengthened metal to accommodate the
    future munitions.  The Naval Air Systems Command officials told GAO
    that the waiver to increase the C/D carrier landing weight has been
    approved as a permanent change in carrier operations.  GAO's analysis
    of E/F program management reviews showed that newer, stronger metals
    will be used to produce E/F landing gear.  DOD did not comment on why
    those metals could not also be used to strengthen the C/D landing
    gear if greater maximum carrier landing weight is needed.

    Regarding survivability, DOD stated that the E/F has a balanced
    design, of which radar cross-section reduction is only one part.  It
    cited decreases in vulnerable areas and an integrated defensive
    electronic warfare suite as additional survivability contributors.
    GAO noted that these additional survivability contributors were
    evaluated as part of the E/F Early Operational Assessment.  The
    specific results of the assessment are classified, but GAO's review
    of the Early Operational Assessment report showed that development
    issues associated with these contributors need to be resolved before
    they will be operationally effective.  GAO is currently reviewing
    these efforts and will be reporting on them separately.
    Additionally, comparisons of E/F and C/D survivability also need to
    consider survivability enhancements that have been or are planned for
    the C/D.  These include such things as the Enhanced Performance
    Engine, the ALR-67 (V)3 Advanced Special Radar Warning Receiver, and
    the use of standoff weapons.  DOD's comments did not address these
    C/D survivability enhancements.

    DOD also stated in its comments that GAO's recommendation was
    premature because the decision to procure the E/F will not be made
    until the first quarter of calendar year 1997, when a Defense
    Acquisition Board will convene for a low-rate initial production
    (LRIP) milestone decision.  GAO does not believe that DOD should
    delay the decision on whether to produce the E/F until after a LRIP
    review.  GAO's concern is not whether the E/F will ultimately be able
    to successfully meet its requirements, which would be a legitimate
    consideration for an LRIP decision.  Rather, GAO believes that the
    comparative operational and cost data for the F/A-18C/D and E/F that
    it presents in its report provides an adequate basis for DOD and the
    Congress to make an informed decision on whether procuring the E/F is
    the most fiscally sound approach to providing the Navy with adequate
    numbers of operationally effective tactical aircraft.

    --------------------
    \4 See U.S.  Combat Air Power:  Reassessing Plans to Modernize
    Interdiction Capabilities Could Save Billions (GAO/NSIAD-96-72, May
    13, 1996).

       MATTERS FOR CONGRESSIONAL
       CONSIDERATION
    ---------------------------------------------------------- Chapter 0:7

    DOD requested funding in its fiscal year 1997 budget request to begin
    procurement of the F/A-18E/F.  The Congress may wish to direct that
    no funds may be obligated for procurement of the F/A-18E/F until it
    has fully examined the alternatives to the E/F program.  In that
    regard, the House National Defense Authorization Act for Fiscal Year
    1997 (H.R.  3230,
    sec.  220) directed such an examination, and a DOD deep strike study
    is expected to be completed by the end of 1996.  Delaying the
    authority to begin procuring the E/F would allow DOD to complete its
    study and time for the Congress to assess the results of the DOD
    study and the information in this report as it decides whether DOD
    should be provided funding to proceed with the F/A-18E/F program.

    INTRODUCTION
    ============================================================ Chapter 1

    The F/A-18E/F program is the successor to prior unsuccessful attempts
    to modernize the Navy's tactical aviation fleet.  The Navy's initial
    focus was on replacing its high-end\1 A-6 attack aircraft.  The
    programs that were initiated in that regard--the A-12 and then the
    A/F-X--were eventually canceled.  The Navy also initiated studies to
    upgrade its multirole F/A-18 low-end\2 tactical aircraft.  The
    upgraded F/A-18 effort was designated the F/A-18E/F.  At a projected
    total program cost of $63.09 billion (fiscal year 1996
    dollars)/$89.15 billion (then-year dollars)\3 the F/A-18E/F program
    is one of the Department of Defense's (DOD) most costly aviation
    programs.

    --------------------
    \1 According to the February 1993 Report of the Defense Science Board
    Task Force on Aircraft Assessment, high-end tactical aircraft are
    used for the most demanding missions, such as theater air-superiority
    and autonomous deep strike.

    \2 F/A-18A/B/C/D low-end multirole aircraft are used to handle the
    less demanding low-end aspects of both air-to-air and air-to-ground
    missions.  Low-end multirole aircraft have historically cost half as
    much as high-end aircraft and because of this they have provided a
    much more affordable means of achieving an adequate force structure.

    \3 Then-year dollar expenditures include estimated inflation for the
    years in which the expenditures are expected to occur; constant
    dollar expenditures, by holding purchasing power constant, eliminate
    the effect of inflation.  The total program cost has recently been
    reduced to $80.96 billion (then-year dollars) based on revised
    economic assumptions that lowered annual inflation indexes from 3
    percent to 2.2 percent.

       NAVY TACTICAL AIRCRAFT
       MODERNIZATION EFFORTS
    ---------------------------------------------------------- Chapter 1:1

    In January 1988, the Navy awarded a fixed-price incentive contract to
    McDonnell Douglas Aerospace and General Dynamics Corporation to
    develop the Advanced Tactical Aircraft, later designated the A-12.
    In June 1988, the Navy and McDonnell Douglas also completed a study,
    known as Hornet 2000, to study upgrade options to the F/A-18 because
    of the long development cycle of planned future fighter aircraft.
    The A-12 was to begin replacing A-6Es in the mid-1990s.  The Air
    Force was also considering a version of the A-12 to replace its
    high-end F-15E, and F-111 strike aircraft.  On January 7, 1991, after
    making almost $2.7 billion (then-year dollars) in progress payments,
    the Navy terminated the A-12 program because of technical and cost
    reasons.

    Almost immediately after terminating the A-12 program, the Navy
    requested funding to modernize the F/A-18.  A new joint Air Force and
    Navy program--designated A-X and later A/F-X--was also initiated to
    replace their high-end attack/strike aircraft with more advanced
    stealthy aircraft.  The A/F-X was to begin fielding a more affordable
    Navy A-6E replacement aircraft around 2008.  The A/F-X program office
    estimated it would cost $22.8 billion (then-year dollars) to develop
    the A/F-X and $50 million to $100 million to procure each aircraft.

    In 1993, DOD's Bottom-Up Review concluded that DOD had too many new
    aircraft programs and that future defense budgets would not support
    both the F/A-18E/F and the A/F-X program.  Therefore, in accordance
    with the review's recommendations, the Secretary of Defense announced
    that the A/F-X advanced tactical aviation program would be canceled,
    the F/A-18E/F program would continue, and the services' efforts to
    field a next generation joint strike fighter aircraft would be
    pursued through a Joint Advanced Strike Technology (JAST) program.
    The family of three common aircraft that is to ultimately result from
    the JAST effort is called the Joint Strike Fighter (JSF).

    The three JSF variants are intended to be (1) a first-day-of-the-
    war, survivable strike fighter aircraft to complement the F/A-18E/F
    for the Navy, (2) an advanced short-takeoff and vertical-landing
    aircraft to replace the AV-8B and F/A-18 for the Marine Corps, and
    (3) a multirole aircraft (primary air-to-ground) to replace the Air
    Force F-16 and A-10 aircraft.

       F/A-18 MODERNIZATION EFFORT
    ---------------------------------------------------------- Chapter 1:2

    In May 1992, the Under Secretary of Defense for Acquisition approved
    the Navy's Milestone IV, Major Modification F/A-18E/F.  A $5.783
    billion (fiscal year 1996 dollars)/$5.803 billion (then-year dollars)
    F/A-18E/F development estimate was based on the combined cost to
    develop the airframe and the engine and to pay other government
    costs.  The airframe development contract was awarded to McDonnell
    Douglas Aerospace, with Northrop Grumman Corporation as the prime
    subcontractor.  McDonnell Douglas makes the forward fuselage, the
    wings, and the aft wing/horizontal stabilizers.  Northrop Grumman
    makes the forward center fuselage, the aft center and aft fuselage
    sections, and the aft fuselage vertical tail sections.  The Navy has
    contracted with General Electric Corporation to develop the
    F/A-18E/F's engine.  The engine will be provided to McDonnell Douglas
    Aerospace as a government-furnished item.  Most of the avionics
    development costs for F/A-18E/F are not included in the E/F's
    development cost estimate.

    As of December 31, 1995, the Navy had spent about $3.75 billion on
    the development phase of the F/A-18E/F program.  Initial operational
    capability of the F/A-18E/F is scheduled for 2000, and fielding of
    the first operational carrier-based squadron is scheduled for 2003.
    Procurement of 1,000 aircraft for the Navy and the Marine Corps is
    planned through 2015.

       OBJECTIVES, SCOPE, AND
       METHODOLOGY
    ---------------------------------------------------------- Chapter 1:3

    We initiated this review because of the magnitude of funds involved
    in the F/A-18E/F program.  We included the F/A-18C/D, F/A-18E/F, and
    JSF in our review to determine whether continued development of the
    F/A-18E/F is the most cost-effective approach to modernizing the
    Navy's tactical aircraft fleet.

    In conducting our work, we evaluated data used to justify the
    F/A-18E/F program.  We reviewed various documents, including the
    Hornet 2000 study; Navy documents such as acquisition reports; the
    Operational Requirements Document; and related cost, engineering, and
    test data supporting the decision to develop the F/A-18E/F.  This
    data showed that the F/A-18E/F was approved to correct deficiencies
    in current F/A-18s that the Navy said existed or were projected to
    materialize.  The F/A-18 deficiencies cited were in range, carrier
    recovery payload, and survivability.  Improvements in F/A-18E/F
    growth space and payload over the F/A-18C/D were also cited by the
    Navy in seeking E/F approval.  Our specific objectives were to

      -- determine whether the operational deficiencies in the F/A-18C/D
         that the Navy cited in justifying the E/F program have
         materialized and, if they have, the extent to which the
         F/A-18E/F would correct them;

      -- ascertain whether the F/A-18E/F will provide an appreciable
         increase in operational capability over the F/A-18C/D; and

      -- review the reliability of the cost estimates for the F/A-18E/F
         and compare those estimates with the costs of potential
         alternatives to the E/F program.

    To accomplish these objectives, we acquired data on the current
    operational capabilities of the F/A-18s and the status of the
    F/A-18E/F development effort from the Naval Air Systems Command
    (NAVAIR) and the builders of the F/A-18s:  McDonnell Douglas
    Aerospace, Northrop Grumman Corporation, and General Electric
    Corporation.

    We obtained various studies, test results, performance data reports
    and interviewed Navy and contractor officials.  Using these data, we
    conducted various analyses and calculations, which are explained in
    the appropriate sections of our report, to verify the deficiencies in
    range, carrier recovery payload and survivability predicted for the
    C/D, and to ascertain the probability that the E/F would correct
    those deficiencies.

    To ascertain whether the F/A-18E/F will provide an appreciable
    increase in operational capability over the F/A-18C/D we focused on
    payload capacity and growth potential.  These areas were also cited
    by the Navy in justifying the E/F program.  We interviewed Navy and
    contractor officials and reviewed data from contractor studies,
    system specifications, and Navy reports.  We evaluated the Navy's
    projections that indicated that the C/D would have no growth
    potential to accommodate future avionics requirements.  We also
    compared the weapons capacity of the C/D with the potential capacity
    of the E/F.

    Additional information concerning F/A-18C/D operational deficiencies
    and the need for the E/F was obtained from documents and interviews
    with officials from the Center for Naval Analysis and the Defense
    Intelligence Agency.

    To evaluate the validity of the F/A-18E/F procurement cost estimates,
    we examined the assumptions on which the estimates were based in
    terms of numbers of aircraft to be procured and the number of
    aircraft to be produced each year.  We made these analyses because
    the Congress and DOD have expressed concerns in the past that the
    Navy's assumptions were not realistic, given the probable limited
    availability of annual funding.  To make this evaluation, we acquired
    data and interviewed officials in the Naval Warfare's Aviation
    Requirements and Aviation Inventory directorates, and the Office of
    the Deputy Chief of Staff For Aviation within the Marine Corps.  We
    obtained procurement cost data provided to the Congress in the annual
    Selected Acquisition Report and aircraft inventory data used by the
    Navy to calculate the E/F's projected procurement cost, which is
    based on a combined Navy and Marine Corps buy of 1,000 aircraft.
    From this data, we developed and then compared F/A-18C/D and E/F
    recurring flyaway cost projections.

    We also compared projected E/F operational and cost projections with
    those of the JAST JSF.  This information was acquired from the JAST
    program office, the Advanced Research Projects Agency (their Marine
    Corps Short-Takeoff Vertical Landing Strike Fighter effort was
    combined with JAST), and the contractor teams working on the JSF
    effort.  The contractors are a consortium of McDonnell Douglas
    Aerospace, Northrop Grumman Corporation, and British Aerospace;
    Boeing Corporation; and Lockheed Martin Corporation.  We obtained the
    contractors' and the JAST program office's estimates for the future
    JSF and calculated the cost of continuing procurement of the
    F/A-18C/D in lieu of proceeding with the F/A-18E/F program.  Our
    methodology for calculating comparative costs for the C/D and E/F
    programs is explained in detail in appendix I where we present those
    cost comparisons.

    DOD provided written comments on a draft of this report.  The
    comments are presented and evaluated in their entirety in appendix
    III.

    We conducted our review from December 1994 through December 1995 in
    accordance with generally accepted government auditing standards.

    F/A-18E/F WILL PROVIDE MARGINAL
    IMPROVEMENTS OVER F/A-18C/D
    ============================================================ Chapter 2

    The F/A-18E/F is intended to replace current F/A-18C/D aircraft and
    to perform Navy and Marine Corps fighter escort, strike, fleet air
    defense, and close air support missions.  The current F/A-18C/Ds have
    proven their value to the battle commander by providing the
    capability to perform diverse missions and excellent payload
    flexibility under dynamic wartime conditions.  However, the Navy
    stated that in order to maintain a superior level of combat
    performance into the 21st century, the F/A-18 will require increased
    range, increased carrier recovery payload, and improved
    survivability.  Our review determined that:

      -- The Navy's F/A-18 strike range requirements can be met by either
         the F/A-18E/F or F/A-18C/Ds.  The increased range of the E/F is
         achieved at the expense of aerial combat performance, and even
         with increased range, each aircraft will still require aerial
         refueling for low-altitude missions against most targets.

      -- F/A-18C carrier recovery payload deficiency has not occurred as
         the Navy predicted.  F/A-18Cs operating in support of Bosnian
         operations routinely return to the carrier with operational
         loads that exceed the Navy's stated carrier recovery payload
         capability.

      -- Although survivability improvements are planned for the
         F/A-18E/F, the aircraft was not justified to counter threats
         that could not be countered with existing or improved
         F/A-18C/Ds.  Also, the effectiveness of a survivability
         improvement planned for the E/F is questionable and might better
         be attained at less cost with the next generation JSF.

       INCREASED COMBAT RANGE WHILE
       MAINTAINING COMBAT PERFORMANCE
       SOUGHT FOR THE F/A-18E/F
    ---------------------------------------------------------- Chapter 2:1

    The Navy is reporting that F/A-18E/F strike ranges are significantly
    greater than the specifications require.  Those E/F strike range
    projections are based on a high-altitude mission, which results in
    increased fuel efficiency and range, whereas the E/F contract
    stipulates specifications for a low-altitude strike mission.
    McDonnell Douglas Aerospace data show that the F/A-18C/D can also
    achieve the E/F's low-altitude strike range specification if it
    carried the larger external fuel tanks that are planned to be used on
    the E/F.  Navy data also shows that the C/D, without the larger
    external tanks, could exceed the target distances stipulated in the
    E/F system specifications by flying the same high-altitude mission as
    the E/F.  Also, we found that the design changes needed to achieve
    the F/A-18E/F's range improvements will adversely affect its aerial
    combat performance relative to the F/A-18C/D.  Should the Navy not be
    able to fly the more fuel-efficient, high-altitude mission profiles,
    both the E/F and the C/D will need aerial refueling to reach a
    majority of targets in many of the likely wartime scenarios that
    either aircraft would be employed.

          F/A-18C/D'S STRIKE RANGE
          WILL EXCEED F/A-18E/F
          SPECIFICATIONS
    -------------------------------------------------------- Chapter 2:1.1

    In justifying the F/A-18E/F, the Navy cited, among other factors, the
    F/A-18C/D's inability to perform long-range unrefueled missions
    against deep, high-value targets.  The Navy incorporated major
    airframe modifications to the F/A-18E/F to increase its long-range
    strike capability.  However, we found that the F/A-18C/D can achieve
    greater ranges without making modifications to its airframe.  These
    ranges will exceed the F/A-18E/F's low-altitude range specifications.

    F/A-18E/F specifications call for the aircraft to have a range of 390
    nautical miles while performing low-altitude bombing with four
    1,000-pound gravity bombs and using two 480-gallon external fuel
    tanks.  This strike range is 65nm longer than the reported 325nm
    low-altitude strike range of the F/A-18C/D using two smaller
    330-gallon external fuel tanks and carrying four 1,000-pound gravity
    bombs.  The F/A-18E/F will achieve its greater strike range primarily
    from its greater internal fuel capacity and larger wings, and its
    larger 480-gallon external fuel tanks.  In total, F/A-18E/Fs will
    carry 980 gallons more fuel (450 gallons external/
    530 gallons internal) than F/A-18C/Ds.

             LARGER EXTERNAL FUEL
             TANKS WILL INCREASE
             F/A-18C/D'S RANGE
    ------------------------------------------------------ Chapter 2:1.1.1

    The 480-gallon tank planned to be used on the F/A-18E/F uses new
    filament-winding technology and a toughened resin system to produce a
    lightweight external fuel tank.  It carries 45 percent more fuel than
    the 330-gallon tank, but its diameter is only 3.1 inches greater and
    it has the same empty weight as the 330-gallon tank.  F/A-18 E/F
    program officials informed us that the 480-gallon tanks planned for
    the E/F cannot be carried by the C/D.  Furthermore, current Navy
    operational documents will not allow 480-gallon external tanks on the
    C/Ds.  However, we have identified McDonnell Douglas and Navy studies
    that state that the larger 480-gallon external fuel tanks can be used
    on existing F/A-18C/D aircraft.

    The 1988 Hornet 2000 study, prepared by a team led by the Naval Air
    System Command with the Center for Naval Analyses and McDonnell
    Douglas assisting, addressed the issue of carrying larger 480-gallon
    external fuel tanks on existing F/A-18C/Ds.  The study reports that
    "Range/radius improvements can be achieved with larger external fuel
    tanks.  The 480 gallon fuel tank rather than the 330 gallon can be
    accommodated on inboard wing stations of all configurations,
    including the baseline."

    The Office of the Secretary of Defense's March 1992 F/A-18E/F
    Technical Risk Assessment Team report also addressed the use of
    480-gallon external fuel tanks on the E/F.  This report stated that

         "The 480-gallon fuel tank was initially designed for carrier
         use, but the production version has been modified for use on the
         Canadian CF-18.  Additional testing must be completed to
         requalify the fuel tank for carrier use and the aft pylon attach
         point will require strengthening for the carrier environment.
         The modifications appear to be low risk."

    A 1991 McDonnell Douglas report, "480 Gallon External Fuel Tank,"
    concluded that the 480-gallon external fuel tank can be carried on
    the F/A-18C/D inboard wing stations for carrier operations.
    According to the report, use of the 480-gallon tank on the C/D does
    not require any structural changes to the aircraft and the 480-gallon
    tank can be used with all weapons qualified for the F/A-18C/D.  The
    report also stated that the new 480-gallon tank increases the
    multimission capability and flexibility of the F/A-18 fighter.  As
    shown in figure 2.1, the 480-gallon fuel tank extends the C/D strike
    interdiction range flying low-altitude missions with two external
    tanks from 325nm to 393nm.\1 This increased range exceeds the 390nm
    specification range for the F/A-18E/F flying the low-altitude strike
    mission profile.

       Figure 2.1:  F/A-18C/D and
       F/A-18E/F Range Comparison:
       Low-Altitude Mission Profile

       (See figure in printed
       edition.)

    Source:  McDonnell Douglas and NAVAIR.

    Additionally, the McDonnell Douglas report stated that the 480-gallon
    tanks increase the deck cycle\2 time of the F/A-18C/Ds configured for
    a fighter escort mission, to over 3 hours.  Also, the report noted
    that two 480-gallon tanks on the C/D effectively replace three
    330-gallon tanks.  This gives the mission planner the option to have
    the C/Ds carry additional weapons, sensors, or fuel on the centerline
    station.

    --------------------
    \1 According to the report, adding a 330-gallon external fuel tank to
    the C/D's centerline station, with the two 480-gallon tank
    configuration, would further increase its range to 437nm.

    \2 Deck cycle refers to the time required to launch and recover
    aircraft.  The greater the cycle time, the more flexibility the
    carrier commander has to safely conduct aircraft sorties.

             FLYING E/F'S MISSION
             PROFILE WILL ALSO
             SIGNIFICANTLY INCREASE
             THE C/D'S RANGE
    ------------------------------------------------------ Chapter 2:1.1.2

    Recent Navy range predictions show that the F/A-18E/F is expected to
    have a 683nm strike range, carrying two 2,000-pound precision-guided
    bombs.  The Navy plans to achieve this significant range, a range
    that approaches that planned for the canceled A/F-X program and the
    Navy's JAST variant, by flying F/A-18E/F strike missions with the
    larger 480-gallon tank and using a more fuel-efficient, survivable,
    and lethal high-altitude mission profile rather than the specified
    low-altitude profile.

    However, as shown in figure 2.2, the same Navy predictions show that
    F/A-18C/D's strike ranges also increase significantly when flying at
    high altitudes because of increased fuel efficiency at higher
    altitudes.  According to Navy data, the F/A-18C/D flying at high
    altitudes with its normal configuration of three 330-gallon external
    fuel tanks has a range of 566nm--176nm more than the F/A-18E/F's
    strike range specification.

       Figure 2.2:  F/A-18C/D and
       F/A-18E/F Range Comparison:
       High-Altitude Mission Profile

       (See figure in printed
       edition.)

    Source:  NAVAIR.

          F/A-18E/F RANGE INCREASE
          ACHIEVED AT THE EXPENSE OF
          THE AIRCRAFT'S AERIAL COMBAT
          PERFORMANCE
    -------------------------------------------------------- Chapter 2:1.2

    According to Navy and contractor documents, key factors in
    determining combat performance of an aircraft are thrust, turn rate,
    and acceleration.  The Navy stated that to maintain the combat
    performance of the larger and heavier F/A-18E/F relative to the
    F/A-18C/D, it would develop and incorporate new higher thrust
    engines.  However, program data shows that the range improvements
    sought by the larger and heavier F/A-18E/F will be achieved at the
    expense of the aircraft's combat performance and that the F/A-18E/F's
    aerial combat performance in key areas will be inferior to current
    F/A-18C/Ds.

    The F/A-18E/F's larger fuel capacity, due to its larger size, allows
    the aircraft to achieve greater range than the F/A-18C/Ds.  The
    F/A-18E's empty weight without fuel and ordinance is about 6,100
    pounds heavier than that of the C's.  The E is 4.3 feet longer than
    the C, and its wing area is 25 percent greater.  The F/A-18E can
    carry about 6,600 more pounds of fuel than the F/A-18C.  The
    F414-GE-400 engine being developed for the E/F by General Electric is
    designed to provide added thrust to compensate for the added weight
    of the aircraft and fuel.  (See fig.  2.3.)

       Figure 2.3:  F/A-18 Aircraft

       (See figure in printed
       edition.)

       Source:  McDonnell Douglas.

       (See figure in printed
       edition.)

    According to program documents, the F414-GE-400 engine generates
    about 22,000 pounds of uninstalled thrust,\3 a 37.5-percent increase
    over the F404-GE-400 engine used in the F/A-18A/B and some early
    F/A-18C/D aircraft.  However, technical manuals show that the
    F/A-18E/F's F414-GE-400 engine develops only 20,727 pounds of
    uninstalled thrust.  Furthermore, the latest F/A-18C/Ds are equipped
    with an enhanced version of the F404 engine, known as the F404-GE-402
    Enhanced Performance Engine.  This new engine that was developed to
    meet foreign buyers' requirements for better combat performance has
    been adopted for Navy use.  The enhanced engine increased the
    uninstalled thrust from 16,000 to 17,754 pounds.  Consequently, as
    shown in table 2.1, the F/A-18E/F has about a 17-percent improvement
    in uninstalled thrust over the C/Ds fitted with the F404-GE-402
    Enhanced Performance Engine, rather than 37.5-percent reported in
    program documents.

                                   Table 2.1

                     Comparison of F/A-18C/D and F/A-18E/F
                               Uninstalled Thrust

                               (Thrust in pounds)

                                                                Uninstalle
                                                                         d
    Engine                                                        thrust\a
    ----------------------------------------------------------  ----------
    F/A-18C/D                                                       17,754
     (F404-GE-402, enhanced performance engine)
    F/A-18E/F
     (F414-GE-400 engine)                                           20,727
    Difference                                                  17 percent
    ----------------------------------------------------------------------
    \a Sea Level, Standard Day.

    Source:  NAVAIR.

    This limited improvement in uninstalled thrust, coupled with a much
    heavier operationally loaded F/A-18E/F, means that the E/F will have
    less air-to-air combat capability in its sustained turn rate,
    maneuvering, and acceleration than F/A-18C/Ds with the enhanced
    performance engines.

    Sustained turn rate,\4 maneuvering,\5 and acceleration contribute to
    an aircraft's combat performance and survivability by increasing its
    ability to maneuver in either offensive or defensive modes.  Navy
    data\6 comparing the F/A-18C to the F/A-18E shows the following:

      -- At sea level, the F/A-18C's sustained turn rate is 19.2 degrees
         per second, while the F/A-18E's sustained rate is 18 degrees per
         second.  The instantaneous bleed rate of the F/A-18C is 54 knots
         per second, whereas the F/A-18E will lose 65 knots per second in
         a turn.

      -- At 15,000 feet, the F/A-18C's sustained turn rate is 12.3
         degrees per second, while the F/A-18E's sustained rate is 11.6
         degrees per second.  The instantaneous bleed rate of the F/A-18C
         is 62 knots per second, whereas the F/A-18E will lose 76 knots
         per second in a turn.

    Aircraft acceleration affects an aircraft's combat performance in a
    number of ways, ranging from how quickly the aircraft can reach its
    area of operation to its ability to close the gap in air-to-air
    engagements or to evade air-to-ground missiles.  Navy data shows the
    following:

      -- At 5,000 feet at maximum thrust, the F/A-18C accelerates from
         0.8 Mach to 1.08 Mach\7 in 21 seconds, whereas the F/A-18E will
         take 52.8 seconds.

      -- At 20,000 feet at maximum thrust, the F/A-18C accelerates from
         0.8 Mach to 1.2 Mach in 34.6 seconds, whereas the F/A-18E takes
         50.3 seconds.

      -- At 35,000 feet at maximum thrust, the F/A-18C accelerates from
         0.8 Mach to 1.2 Mach in 55.80 seconds, whereas the F/A-18E takes
         64.85 seconds.  The F/A-18C accelerates from 0.8 Mach to 1.6
         Mach in 2 minutes
         12 seconds, whereas the F/A-18E takes 3 minutes and 4 seconds.

    --------------------
    \3 Static, sea level, maximum power, standard day.

    \4 Sustained turn rate is the maximum rate of turn, measured in
    degrees per second, the aircraft can sustain without losing speed.

    \5 Maneuvering is expressed as instantaneous bleed rate, which is a
    measure of how quickly an aircraft loses speed during maneuvering.

    \6 Weapons load is 2 AIM-9 and 2 AIM-120 carried externally, no
    external fuel tanks and 60 percent fuel remaining.  F/A-18E data are
    Navy estimates.

    \7 At sea level, the maximum speed of the F/A-18 is limited and
    cannot reach 1.2 Mach.

          ALL F/A-18S WILL NEED AERIAL
          REFUELING TO ATTACK MOST
          TARGETS FOR LOW-ALTITUDE
          MISSIONS
    -------------------------------------------------------- Chapter 2:1.3

    In justifying the low-altitude 390nm strike range specification for
    the F/A-18E/F, the Navy cited the F/A-18C/D's shorter strike range
    (325nm flying the low-altitude mission profiles) and its inability to
    perform long-range unrefueled missions.  Current Navy modeling
    projects that the F/A-18E/F will have a strike range of 465nm when
    flying the specified low-altitude mission profile, or 75nm greater
    than the 390nm development specification.  However, the Center for
    Naval Analysis reported that with these ranges, the F/A-18E/F and
    F/A-18C/D will both need aerial refueling to reach most targets in
    two of the most likely wartime scenarios if high-altitude mission
    profiles are not flown.

    A 1993 Center for Naval Analysis\8 report indicates that the E/F,
    even with its range improvement over the F/A-18C/D, would require
    in-flight refueling to reach a majority of targets in many of the
    likely wartime scenarios in which the E/F would be employed.  The
    Center's 1993 report was consistent with its 1989\9 report that
    concluded that an upgrade to the F/A-18C/D (now identified as the
    F/A-18E/F) would probably retain its need for in-flight refueling.
    Therefore, according to the 1989 report, the desire for additional
    internal fuel should not be the driving force in the design of the
    F/A-18E/F.

    --------------------
    \8 Analysis of AX Design Range, Center for Naval Analysis (CRM 93-2,
    Mar.  1993).

    \9 F/A-18 Upgrade Project, Center for Naval Analysis (CRM 88-74, Mar.
    1989).

          F/A-18C CARRIER RECOVERY
          PAYLOAD DEFICIENCY HAS NOT
          OCCURRED AS PREDICTED
    -------------------------------------------------------- Chapter 2:1.4

    The Navy cited an anticipated deficiency in F/A-18C carrier recovery
    payload capacity\10 as one of the primary reasons for developing the
    F/A-18E/F.  In 1992, when seeking approval for the F/A-18E/F, the
    Navy stated that F/A-18Cs procured in fiscal year 1988 had a total
    carrier recovery payload capacity of 6,300 pounds.  However, it
    projected that F/A-18C enhancements planned through the fiscal year
    1993 procurement (delivery in fiscal year 1995)(Lot XVII) would
    increase the aircraft's operating weight and decrease its total
    carrier recovery capacity to
    5,785 pounds.  It said this condition would constrain the ability of
    the carrier's air wing to fulfill its full spectrum of training
    requirements--especially under the worse case scenario of conducting
    night training and carrying greater amounts of reserve fuel needed
    for a divert field landing.

    As shown in table 2.2, the F/A-18C carrier recovery payload capacity
    is substantially greater than the Navy projected it would be and, in
    fact, is greater than when the F/A-18C was introduced into the fleet
    in late 1987.

                                   Table 2.2

                     Projected and Current Carrier Recovery
                     Payload Capacity for Fiscal Year 1993
                              Procurement F/A-18Cs

                              (Capacity in pounds)

                                             Projected
                                    capacity\a (Navy's    Current capacity
                                             estimate)   (our calculation)
    ------------------------------  ------------------  ------------------
    Maximum carrier landing weight              33,000              34,000
    Total operating weight                     -27,215             -26,987
    ======================================================================
    Total carrier recovery payload             5,785\b             7,013\b
    ----------------------------------------------------------------------
    \a Based on Navy's 1992 projection of mid-1990's capacity.

    \b Includes 5,000 pounds of reserve fuel.

    As indicated in table 2.2, current F/A-18Cs have 7,013 pounds of
    carrier recovery payload capacity, rather than the 5,785 pounds the
    Navy predicted.  The higher carrier recovery payload capacity
    calculation is the result of

      -- the Navy, in 1994, increasing the F/A-18C's maximum allowable
         carrier landing weight from 33,000 to 34,000 pounds, thereby
         adding 1,000 pounds to the payload and

      -- (1) replacement of the canceled Advanced Self Protection Jammer
         with a lighter system, the ALQ-126 and (2) a prior overestimate
         of weight needed for contingencies.

    The F/A-18C's better than projected carrier recovery payload is being
    demonstrated during actual flight experience of the F/A-18Cs flying
    military operations in Bosnia.  (See fig.  2.4.)

       Figure 2.4:  F/A-18C Landing on
       a Carrier During Bosnia
       Operations

       (See figure in printed
       edition.)

       Source:  Reuters/Archive
       Photos.

       (See figure in printed
       edition.)

    According to data provided by the F/A-18 program office, as shown in
    table 2.3, F/A-18Cs routinely bring back 7,156 pounds of recovery
    payload.

                                   Table 2.3

                     Routine Payload Recovery for F/A-18Cs
                              Operating in Bosnia

                               (Weight in pounds)

    Item                                                            Weight
    --------------------------------------------------------------  ------
    1 High-speed anti-radiation missile                                778
     2 Guided bomb unit-12s                                          1,220
     Forward looking infrared radar pod                                371
     2 AIM-9 Sidewinders                                               390
     3 External tanks                                                  897
    Total munitions                                                  3,656
     Fuel reserve                                                    3,500
    ======================================================================
    Total carrier recovery payload                                   7,156
    ----------------------------------------------------------------------
    The Navy achieved this recovery payload by increasing the F/A-18C's
    maximum landing weight to 34,000 pounds and decreasing the reserve
    fuel level from 5,000 to 3,500 pounds.

    The Navy has stated that although it is currently able to bring back
    a full operational load of existing weapons, it will not be able to
    bring back the heavier, more expensive precision-guided munitions
    planned for the future.  Because the Navy has demonstrated the
    ability to manage the recovery payload of the F/A-18C by increasing
    the maximum landing weight of the F/A-18C by 1,000 pounds for Bosnian
    operations, we attempted to determine whether the maximum landing
    weight could be further increased to compensate for future munitions.
    Navy program officials did not know whether the maximum landing
    weight could be increased further; however, the Hornet 2000 Technical
    Report states that the carrier landing design gross weight of the
    F/A-18C can be increased to 37,000 pounds with landing gear and other
    changes, thereby providing an additional 3,000 pounds of recovery
    payload.  Adding this weight to the total carrier recovery payload
    shown in table 2.2 would result in a total recovery payload of 10,013
    pounds for the F/A-18C.  That amount of carrier payload recovery for
    the F/A-18C is greater than the 9,000 pounds of payload sought for
    the F/A-18E/F.

    --------------------
    \10 Carrier recovery payload is defined as the amount of fuel,
    weapons, and external equipment (such as navigation and targeting
    pods) that an aircraft can carry when landing on a carrier.  It is
    the computed difference between maximum landing weight and the
    aircraft operating weight.

       F/A-18E/F SURVIVABILITY
       IMPROVEMENTS
    ---------------------------------------------------------- Chapter 2:2

    The Navy is seeking to improve F/A-18E/F survivability compared to
    the current F/A-18C/D by reducing its detectability and the
    probability of it being destroyed.  Although survivability
    improvements for the F/A-18E/F are planned, the F/A-18E/F was not
    justified to counter a particular military threat that could not be
    met with current F/A-18C/Ds or F/A-18C/Ds that will be enhanced by
    additional planned survivability features.  In addition, the
    effectiveness of an F/A-18E/F survivability improvement is
    questionable.  Moreover, the JSF represents an alternative,
    affordable next generation aircraft that is projected to surpass the
    survivability of the F/A-18E/F at less cost.

          F/A-18E/F SURVIVABILITY
          INCREASES NOT DRIVEN BY
          F/A-18C/D SURVIVABILITY
          DEFICIENCY
    -------------------------------------------------------- Chapter 2:2.1

    In August 1993, we reported\11 that the F/A-18E/F was not justified
    to counter a particular military threat that could not be met with
    current capabilities.  In responding to our report, the Under
    Secretary of Defense for Acquisition disagreed with our conclusion
    that the F/A-18E/F decision was not threat based.  He referred to the
    April 1993 "Report to Congress on Fixed-Wing Tactical Aviation
    Modernization," which he stated included intelligence data on
    projected threats in the post-year 2000 period, which require
    improvements in the survivability of tactical fixed-wing aircraft.
    He stated that these improvements were part of the process for
    approving the modification of the F/A-18C/D to the F/A-18E/F.  We
    reviewed this report and found that although this study discussed
    future threats, it was in system-to-system engagements, not as part
    of a force package where other assets are used to increase aircraft
    survivability.  According to Navy officials, the F/A-18E/F will be
    operated as part of a force package--just as the F/A-18C/D currently
    operates.  These aircraft will not operate alone as the stealthy F-22
    and the Navy's JSF are planned to be.  (Chapter 4 discusses the JSF
    and its planned survivability features.)

    The relative importance of a threat-based justification for the E/F
    is also supported by a March 24, 1992, memorandum from the Vice
    Chairman of the Joint Chiefs of Staff to the Under Secretary of
    Defense for Acquisition.  It said that the main consideration in the
    timing of buying the F/A-18E/F was not an emerging threat.  This is
    consistent with statements contained in the May 1992 F/A-18E/F Cost
    and Operational Effectiveness Analysis Summary.

    According to the summary, the Navy's current F/A-18 warfighting
    capability was expected to be adequate in dealing with the projected
    threat beyond the turn of the century.  Further, the key components
    of potential threats have stabilized in response to East European
    political economic shifts.  Also, the Commonwealth of Independent
    States' emphasis on development and deployment of advanced air,
    ground, and naval weapons had greatly declined, particularly the
    anti-air warfare threat.

    --------------------
    \11 Naval Aviation:  Consider All Alternatives Before Proceeding With
    the F/A-18E/F (GAO/NSIAD-93-144, Aug.  27, 1993).

          ADDITIONAL FEATURES PLANNED
          TO ENHANCE F/A-18C/D
          SURVIVABILITY
    -------------------------------------------------------- Chapter 2:2.2

    According to the May 1992 F/A-18E/F Acquisition Plan, the aircraft's
    weapon system architecture was to be essentially the same as the
    F/A-18C/D Night Attack aircraft.  An October 1995 F/A-18 program
    brief and a more recent Naval Intelligence study on strike warfare
    state that the F/A-18C is survivable against all current air-to-air
    threats.  The October brief further states that the F/A-18C Night
    Strike Hornet (compared with previous F/A-18s) increased the exchange
    rate against the MiG-29 by a factor of 4, increased survivability
    against surface threats, and is 23 percent more effective in strike
    warfare.

    Additional improvements have subsequently been made or are planned
    for the F/A-18C/D to enhance its survivability.  For example,
    according to Navy program documents, improvements were made to reduce
    its radar detectability.  Although these improvements are classified
    and cannot be discussed in this report, Navy and contractor officials
    agreed that the radar detectability has been reduced.  Other
    improvements to the F/A-18C/D include the following:

      -- The F404-GE-402 Enhanced Performance Engine to provide increased
         combat performance and, therefore, increased survivability.

      -- The ALR-67(V)3 Advanced Special Warning Receiver and the ALE-47
         Countermeasures Dispensing System (chaff and flares) will be
         installed on new F/A-18C/Ds to alert the aircrew of potential
         threats and automatically deploy countermeasures, thereby
         decreasing the probability of the aircraft being hit should it
         be fired on.

      -- Standoff weapons, such as the Joint Standoff Weapon (JSOW),
         Standoff Land Attack Missile-Expanded Response, improved
         Advanced Medium Range Air-to-Air Missile (AMRAAM), and AIM-9X to
         be installed on the F/A-18C/D will improve its standoff range
         from the threat and thus further improve its survivability.

          F/A-18E/F SURVIVABILITY
          IMPROVEMENTS ARE
          QUESTIONABLE
    -------------------------------------------------------- Chapter 2:2.3

    The Navy listed reduced aircraft radar signature as an objective and
    key measure of aircraft survivability when discussing F/A-18E/F
    survivability improvements.  Navy and McDonnell Douglas officials
    said they have significantly reduced the F/A-18E/F's frontal radar
    signature compared to the C/D model.  The specifics of how radar
    signature reduction is achieved are classified.  However, according
    to Center for Naval Analysis and Navy officials, the F/A-18E/F's
    reduced radar signature only helps it penetrate slightly deeper than
    the F/A-18C/D into an integrated defensive system before being
    detected.

    When Navy officials referred to the F/A-18E/F's reduced frontal radar
    signature, they cite low observability improvements made to the
    aircraft structure.  However, because the F/A-18E/F will be carrying
    weapons and fuel externally, it will diminish the radar signature
    reduction improvements derived from the structural design of the
    aircraft.  The need to carry weapons and fuel internally to maintain
    an aircraft's low observability is consistent with low observability
    or stealthy aircraft designs, such as the F-117, the A-12, the A/F-X,
    the F-22, and the B-2, all designed to carry fuel and weapons
    internally.

    A 1994 Lockheed Corporation briefing document entitled "The Value of
    Stealth," discussed the value of frontal radar signature reduction
    and the impact on detection ranges when such things as pylons,
    munitions, and fuel tanks are carried externally.  The brief stated
    that:

         "While very beneficial in a one-on-one engagement, nose-on to
         the threat, treatments to enhance the survivability of a
         conventional aircraft by reducing the forward aspect observable
         level is not sufficient to successfully penetrate a typical
         threat environment.  The long detection and engagement range of
         modern threat systems against the side sector of an Enhanced
         Conventional Aircraft will significantly decrease the likelihood
         of a successful mission."

         "Further, the addition of external stores to enable an Enhanced
         Conventional Aircraft to accomplish a military objective, may
         well eliminate much of what is gained in reduced threat
         capability, even in the nose region."

    This is further validated by the current JAST program commitment to
    designing its JSF to carry its weapons internally because carrying
    weapons externally does not meet the Navy's reduced signature needs
    for first day survivability.  The JAST office concluded that the
    treatment of external equipment, to limit their negative effect on
    radar signature reduction, would be expensive and would have a
    negative effect on aircraft performance, supportability, and
    deployability.  In summary, the JAST office has concluded that the
    most cost-effective and overall operational beneficial solution if
    low observability is required, appears to be carrying weapons and
    other equipment internally.

    In December 1995, the F/A-18E/F program office asked McDonnell
    Douglas to define the work necessary to develop simple, affordable,
    low-observable treatments for certain equipment that will be carried
    externally on the E/F aircraft.  The program office stated that the
    E/F program has produced a low-observable aircraft, but that
    low-observable externally carried equipment and weapons were outside
    the scope of the E/F program.  The program office stated that this
    equipment, when installed on the E/F with low-observable compatible
    weapons, would be necessary to yield a low-observable weapon system.

    F/A-18C/D SPACE DEFICIENCY HAS NOT
    OCCURRED AND F/A-18E/F PAYLOAD
    PROBLEMS MUST BE RESOLVED
    ============================================================ Chapter 3

    In addition to the operational capability improvements discussed in
    the preceding chapter, the Navy also stated that the E/F (1) was
    needed to provide critically needed space for avionics growth and (2)
    with its two additional weapons stations, would be more lethal.
    However, our review indicates that

      -- the decline in avionics growth space has not occurred as
         predicted, and

      -- weight limitations, problems when weapons are released from the
         aircraft, and the limited increase in weapons payload associated
         with the new weapons stations raises concerns about how much
         increased lethality the E/F will have.

       GROWTH SPACE DEFICIENCY HAS NOT
       OCCURRED AS PREDICTED
    ---------------------------------------------------------- Chapter 3:1

    In justifying the need for the F/A-18E/F, the Navy stated that the
    additional space to be provided by the F/A-18E/F was critically
    needed because by the mid-1990s, the F/A-18C/Ds would not have space
    to accommodate some additional new weapons and systems under
    development without removing an existing capability.  However, as
    previously discussed, an increased threat is not driving decisions to
    add new systems.  Furthermore, the growth space deficiency
    anticipated for the F/A-18C/D has not occurred as predicted.

    According to 1992 Navy predictions, by fiscal year 1996, the ongoing
    program to upgrade the F/A-18C/D's avionics would result in an
    aircraft with only 0.2 cubic feet of space available for future
    growth.  However, in 1995, McDonnell Douglas representatives
    indicated that the F/A-18C had at least 5.3 cubic feet of space
    available for system growth.  This additional space is available from
    the following two sources:

      -- Replacing the F/A-18C/D's ammunition drum with a linear linkless
         feed system would provide 4 cubic feet of additional space in
         the gun bay.

      -- The right leading edge extension on the F/A-18C, which is an
         extension of the frontal aspect of the wing, has 1.3 cubic feet
         of space available for growth.

    Furthermore, indications are that technological advancements will
    result in additional avionics growth space.  The effect of these
    advancements, which include such things as miniaturization,
    modularity, and consolidation, are indicated in some upgraded
    avionics systems employed on the F/A-18C/D.  We reviewed the changes
    scheduled for the F/A-18C/D between fiscal years 1992 and 1996 and
    identified seven upgrade replacement systems that would be used in
    the latest versions of the F/A-18C/D and the F/A-18E/F.  We found
    that because of the reduced size of modern avionics systems, in
    total, the new systems provided 3 cubic feet of additional space and
    reduced the total avionics systems' weight by about 114 pounds.
    Table 3.1 shows the details of this calculation.

                                        Table 3.1

                         Effect of Replacing Avionics Systems on
                                    the F/A-18 Hornet

                                                                              Volume
                                     Replacement                              (cubic
    Equipment            Old system  system            Weight (pounds)         feet)
    -------------------  ----------  --------------  -------------------  ----------
    Radar                APG-65      APG-73                 -12.0              -0.90

    Communication        ARC-182     ARC-210 (2)            +5.6               +0.12
    receiver/            (2)
    transmitter

    Chaff                AN/ALE-39   AN/ALE-47              +22.7              -0.14
    countermeasures set

    Missile command      AWG-25      AWG-25 MOD             -11.0              +0.01
    launch computer                  Downsized HARM

    Weapon station       SMS         SMS (upgrade)          -71.9              -1.20
    management system

    Countermeasures      ALR-        ALR-67(V)3             -8.4               -0.30
    receiving set        67(V)2

    Global positioning   MAGR        EGI Combined           -38.6              -0.63
    system                           GPS/INS

    Inertial navigation  ASN-139A
    system

    ================================================================================
    Total                                                  -114.0               -3.0
    --------------------------------------------------------------------------------
    Source:  McDonnell Douglas.

    The Navy also contends that the availability for growth on the
    F/A-18C/D is not possible due to the lack of sufficient power and
    cooling capability.  However, according to McDonnell Douglas
    engineering representatives, the F/A-18C/D's power and cooling needs
    have not been validated through an actual test.  Rather, the
    statements that the C/D has no more growth capability are based on
    analysis using estimated and outdated data.  Additionally, the Hornet
    2000 study suggested options to increase power and cooling capacity
    within the current space/volume of the baseline F/A-18 aircraft.  To
    increase the aircraft's power capacity, the report suggested

      -- a new generator system with more than a 30-percent increase in
         power capacity and/or

      -- a monitored bus system capable of shedding selected loads when
         one generator becomes inoperative.

    To increase the F/A-18C/D's cooling capacity, the Hornet 2000 report
    stated that the air cooling system could be modified to increase
    capacity by 47 percent.

       F/A-18E/F HAS WEAPONS RELEASE
       PROBLEMS AND PROVIDES A
       MARGINAL INCREASE IN LETHALITY
    ---------------------------------------------------------- Chapter 3:2

    The F/A-18E/F is designed to have more payload capacity than current
    F/A-18C/Ds as a result of adding two new wing weapon
    stations--referred to as the outboard weapons stations.  However,
    unless the current problems when weapons are released from the
    aircraft are resolved, the types and amounts of external weapons that
    the E/F can carry may be restricted.  Also, while the E/F will
    provide a marginal increase in air-to-air capability, it will not
    increase its ability to carry the heavier air-to-ground weapons that
    are capable of hitting fixed-targets and mobile hard targets and the
    heavier stand-off weapons that will be used to increase aircraft
    survivability.

          WEAPONS RELEASE PROBLEMS
    -------------------------------------------------------- Chapter 3:2.1

    As illustrated in figures 3.1 and 3.2, airframe modifications, such
    as larger geometrically shaped engine inlets and additional weapon
    stations, have reduced the critical distance between several
    F/A-18E/F weapon stations.

       Figure 3.1:  F/A-18C/D Weapon
       Stations

       (See figure in printed
       edition.)

       Source:  NAVAIR.

       (See figure in printed
       edition.)

       Figure 3.2:  F/A-18E/F Weapon
       Stations

       (See figure in printed
       edition.)

       Source:  NAVAIR.

       (See figure in printed
       edition.)

    A NAVAIR representative stated that it has been estimated that the
    distance between the inboard weapon stations and the engine inlet
    stations on the E/F has been reduced by about 5 inches compared to
    the C/D.  The distance between the new outboard (stations 2 and 10)
    and mid-board stations (stations 3 and 9) is smaller than between the
    mid-board (stations 3 and 9) and inboard stations (stations 4 and 8),
    35 inches versus 46 inches, respectively.

    The space reduction adversely affects the E/F's capabilities.  For
    example, wind tunnel tests show that an external 480-gallon fuel tank
    or a MK-84 2,000-pound bomb, carried on the inboard station, will hit
    the side of the aircraft's fuselage or make contact with other
    weapons when released.  Additionally, according to the
    representative, the limited distance between the new outboard and
    mid-board stations, coupled with outboard pylons that are shorter and
    closer to the wing, will cause problems when releasing large, finned
    weapons, such as the High-Speed Anti-Radiation Missile (HARM).

    F/A-18E/F airframe changes have also increased adverse airflows that
    exacerbate these problems.  Wind tunnel testing shows that the
    F/A-18E/F is experiencing increased yaw and pitch motion\1 of its
    external equipment.  The increased yaw motion is the result of
    increased air outflow at the nose of a weapon and increased inflow at
    the tail of a weapon, causing the tail of the weapon to make contact
    with the aircraft.  Similarly, the increased pitching results from
    the air sweeping over the nose of a store in a downward direction
    while an upward airflow causes the tail of the store to make contact
    with the aircraft.

    The Navy and McDonnell Douglas are studying a number of airframe
    fixes to correct the airflow problem.  They are also studying options
    that place tactical restrictions on weapon deployments.  These
    options include reducing the number of weapons the E/F carries and
    reducing the speed the aircraft is flying when the weapons are
    released.

    --------------------
    \1 Yaw is the side-to-side movement, and pitch is the up-and-down
    movement of the nose and tail of external equipment.

          IMPROVEMENTS IN F/A-18E/F
          WEAPONS CARRYING CAPACITY
          ARE MARGINAL
    -------------------------------------------------------- Chapter 3:2.2

    Our analysis showed that the F/A-18E/F will provide a limited
    increase in payload over the C/D model.  In the air-to-air role, as
    shown in table 3.2, the F/A-18E/F will have a two-missile advantage
    over the F/A-18C/D.

    The F/A-18E/F's new outboard stations are limited to carrying weapons
    weighing no more than 1,150 pounds per station.  In the air-to-ground
    role, this precludes the F/A-18E/F from carrying a number of heavy
    precision-guided munitions such as the Harpoon, Standoff Land Attack
    Missile, Laser Guided MK-84, Guided Bomb Unit-24, and WALLEYE II that
    weigh more than the weapon station weight limit.  Consequently,
    because of these limitations, the F/A-18E/F will carry the same
    number of these heavier precision-guided munitions as the F/A-18C/D.

                        Table 3.2 Comparison of Selected
                    Payloads for the F/A-18E/F and F/A-18C/
                                       D

                                                      F/A-    F/A-  Differ
    Weapon                                           18C/D   18E/F    ence
    ----------------------------------------------  ------  ------  ------
    AIM-120 AMRAAM                                       6       8      +2
    AIM-9 Sidewinder                                     6       8      +2
    AIM-7 Sparrow                                        4       6      +2
    ----------------------------------------------------------------------
    Source:  McDonnell Douglas and NAVAIR.

    THE JOINT STRIKE FIGHTER IS
    PREDICTED TO BE MORE AFFORDABLE
    AND MORE CAPABLE THAN THE
    F/A-18E/F
    ============================================================ Chapter 4

    The JAST program office is developing technology for a family of
    affordable next generation JSF aircraft for the Air Force, Marine
    Corps, and Navy.  (See app.  II for a discussion of JAST program
    objectives and approach.) The Navy plans to procure 300 JSFs and use
    them as a stand alone, first-day survivable (stealthy) complement to
    the F/A-18E/F.  The first Navy JSF aircraft is scheduled to be
    delivered in 2007.  On the basis of contractor trade studies and a
    recent Naval Intelligence assessment, JSF is projected to have an
    overall combat effectiveness greater than the F/A-18E/F.  JSF is also
    projected to have a lower unit flyaway cost than the E/F.

       JSF IS PREDICTED TO COST LESS
       AND BE MORE CAPABLE THAN THE
       F/A-18E/F
    ---------------------------------------------------------- Chapter 4:1

    Concept exploration and development trades studies from three major
    potential aircraft production contractors--Boeing Corporation;
    Lockheed Martin Corporation; and a consortium of McDonnell Douglas
    Aerospace, Northrop Grumman, and British Aerospace
    Corporations--indicated that an affordable family of stealthy strike
    aircraft could be built on a single production line with a high
    degree of parts and cost commonality.
    (See fig.  4.1 for JAST concept.) According to the JAST Joint Initial
    Requirements Document, the recurring flyaway cost of the Navy variant
    will range from $33 million to $40 million (in fiscal year 1996
    dollars), depending on which contractor design is chosen.  The JAST
    office projects that the Navy's JSF variant will have operational
    capabilities, especially range and survivability, that will be
    superior to the F/A-18E/F.  It is too soon to determine the extent to
    which the JSF cost and performance goals will be achieved.

       Figure 4.1:  JSF Family of
       Three Aircraft

       (See figure in printed
       edition.)

       Source:  JSF Program Office.

       (See figure in printed
       edition.)

          JSF PREDICTED TO COST LESS
          THAN THE F/A-18E/F
    -------------------------------------------------------- Chapter 4:1.1

    The driving focus of JAST is affordability.  Contractor studies
    indicate that JAST has the potential to reduce total life-cycle cost
    by approximately 40 percent.  Life-cycle cost is made up of research
    and development costs, production costs, and operations and support
    costs.  According to a McDonnell Douglas study, their JAST proposal
    would have a flyaway cost 14 percent lower than the F/A-18E/F.  To
    arrive at these goals, the contractor studies concluded that the
    family of aircraft would have to contain such features as:

      -- a single, common engine;

      -- use of advanced avionics and exploitation of off-board sensors;

      -- advanced diagnostics to reduce supportability costs;

      -- maximum commonality to include a common fuselage for all service
         variants that could be built on a common production line; and

      -- affordable requirements.

    According to the participating contractors and the JAST program
    office, tri-service commonality is the key factor in achieving JSF
    affordability goals, and if this commonality is to occur, the
    services must compromise on operational needs.

    The Navy's JSF variant is expected to be the most costly of the three
    service variants due in part to carrier suitability features and the
    greater operational capability in range and internal payload proposed
    for the Navy's variant.  Current unit recurring flyaway cost
    objectives for the Navy variant range between $33 million and $40
    million (fiscal year 1996 dollars), based on a total buy of 2,816
    aircraft for the three services.  This compares to $53 million per
    unit recurring flyaway (fiscal year 1996 dollars) for the F/A-18E/F
    based on total procurement of 660 E/F's at
    36 per year.  According to the JAST office's Joint Initial
    Requirements Document, the JSF cost objectives are based on projected
    budget constraints and service needs.

    The JAST program office projects that significant life-cycle savings
    for JSF are achievable through implementation of new acquisition
    processes, technologies, manufacturing processes, and maintenance
    processes being developed as part of the JAST program.  Depending on
    the degree of commonality between the service variants and the
    ability to implement other cost-saving measures, the JAST office
    projects the total life-cycle cost could be as much as 55-percent
    less than if it used traditional acquisition and production
    processes.

          JSF PREDICTED TO HAVE BETTER
          PERFORMANCE THAN THE
          F/A-18E/F
    -------------------------------------------------------- Chapter 4:1.2

    The participating contractors presented the results of their concept
    development studies to the JAST office and the Under Secretary of
    Defense (Acquisitions and Technology) in August 1995.  The
    presentations outlined the latest design capabilities and projected
    costs for each of the services' JSF designs.  The JSF is expected to
    have an overall combat effectiveness greater than any projected
    threat and greater than the F/A-18E/F.  The Navy's JSF variant is
    also expected to have longer ranges than the F/A-18E/F to attack
    high-value targets, such as command and control bunkers, without
    using external tanks or tanking.

    Unlike the F/A-18E/F, which will carry all of its weapons externally,
    the Navy's JSF variant will carry at least two air-to-ground and two
    air-to-air weapons internally.  By carrying its weapons internally,
    the JSF will maximize its stealthiness and thus increase its
    survivability in the high threat early stages of a conflict.

    The Navy expects that its JSF variant will have the capability to go
    into high-threat environments without accompanying electronic warfare
    support aircraft in the first day or early phase of a conflict and be
    survivable.  For example, the JSF would have the capability to attack
    these high-threat targets without jamming support from EA-6B aircraft
    that the F/A-18E/F would need to be survivable against integrated air
    defense systems and sophisticated aircraft that would still be
    operating during the early stages of a conflict.

    Combat range improvement was a primary objective of the F/A-18E/F
    program.  JAST program contractor studies indicated that the Navy
    variant would have significantly greater range than the F/A-18E/F
    using internal fuel only and even greater range after the enemy
    threat is reduced and the aircraft can use external fuel tanks.

    F/A-18E/F WILL COST MORE TO
    PROCURE THAN CURRENTLY ESTIMATED
    ============================================================ Chapter 5

    The potential cost of the F/A-18E/F aircraft has been a source of
    debate among the Congress, DOD, and the Navy for many years, starting
    before the program was formally approved.  Our review indicated that
    the Navy's cost estimates to procure the F/A-18E/F are still
    questionable.

    The $43.6 million (fiscal year 1996 dollars) unit recurring flyaway
    cost\1 estimate for the F/A-18E/F is understated.  The estimate is
    based on a 1,000-aircraft total buy that is overstated by at least
    one-third because the Marine Corps does not plan to buy the E/F and
    an annual production rate that the Congress has stated is probably
    not possible due to funding limitations.  Reducing the total buy and
    annual production rate will increase the unit recurring flyaway cost
    of the F/A-18E/F from $43.6 to $53.2 million (fiscal year 1996
    dollars).

    --------------------
    \1 We used recurring flyaway costs because DOD has consistently
    maintained that these costs are the most appropriate to compare the
    costs of different aircraft.  Recurring flyaway costs include costs
    related to the production of the basic aircraft and do not include
    all procurement costs.  Appendix I contains a more detailed
    discussion of what makes up various costs and how they are
    calculated.

       DOD AND CONGRESSIONAL CONCERNS
       ABOUT F/A-18E/F PROGRAM COST
    ---------------------------------------------------------- Chapter 5:1

    In May 1992, the Office of the Secretary of Defense approved the
    Navy's request that the F/A-18E/F be approved as a Milestone IV,
    Major Modification program, even though some Defense Acquisition
    Board participants had the following concerns about the program:

      -- E/F development cost projections had increased from $4.5 billion
         to $5.8 billion (then-year dollars);

      -- the unit cost of the E/F was estimated to be 65 percent greater
         than F/A-18C/D unit cost;

      -- the projected development cost of $5.8 billion (then-year
         dollars) was underfunded by as much as $1 billion;

      -- the cost of E/F pre-planned product improvements are not
         included in either development or production estimates; and

      -- the E/F was considered an upgrade to the F/A-18C/D rather than a
         new start, even though the E/F airframe was projected to be only
         15-percent common to the C/D.

    In evaluating the fiscal year 1993 DOD budget request, the Congress
    addressed its F/A-18E/F concerns and established a number of fiscal
    limits on the program.  The $5.783 billion (fiscal year 1996
    dollars)/$5.803 billion (then-year dollars) F/A-18E/F development
    estimate, presented to the Defense Acquisition Board, was established
    as a funding ceiling for development costs.  Also, the Congress
    stated that F/A-18E/F unit flyaway costs should be no greater than
    125 percent of the F/A-18C/D's unit flyaway cost.

    Congressional concern about E/F unit cost projections was based in
    part on the high annual production rate that the Navy used in
    arriving at its per unit procurement estimates.  The Navy projected
    that beginning in 2007, and continuing through 2015, it would procure
    72 F/A-18E/Fs per year.  The Congress believed this was unrealistic
    and directed that DOD calculate a range of unit costs based on
    production rates of 18, 36, and 54 aircraft per year.  According to
    program officials, they are not required to report revised cost
    estimates based on the change to production rates until an early
    operational assessment is completed in the spring of 1996.

       UNIT ACQUISITION COSTS WILL BE
       GREATER THAN PROJECTED
    ---------------------------------------------------------- Chapter 5:2

    DOD's F/A-18E/F unit recurring flyaway cost estimate is $43.6 million
    (fiscal year 1996 dollars).  This cost is understated because

      -- the total F/A-18E/F procurement levels and annual production
         rates that are essential for predicting acquisition unit costs
         are overstated and

      -- contract estimates for initial production aircraft are higher
         than projected.

          PROCUREMENT LEVELS AND
          PRODUCTION RATES
    -------------------------------------------------------- Chapter 5:2.1

    In calculating the F/A-18E/F unit acquisition costs, the Navy assumed
    it would procure 1,000 aircraft from 1997 through 2015--
    approximately 660 for the Navy and 340 for the Marine Corps at a high
    annual production rate of 72 aircraft.  However, the Marine Corps
    does not plan to purchase any F/A-18E/Fs, and indications are that
    once the Navy's JAST variant becomes available fewer F/A-18E/Fs will
    be procured annually.

    The Marine Corps Aviation Plan and the Marine Corps Deputy Chief of
    Staff for Aviation in a 1994 memorandum and in 1995 testimony\2

    before the Congress stated that the Corps plans to "neck down" to one
    aircraft in the future.  It plans to replace all of its current
    F/A-18C/D and AV-8B aircraft with the Advanced Short-Takeoff and
    Vertical-Landing aircraft now under management of the JAST program.
    Because the Marine Corps does not plan to procure any
    F/A-18E/Fs--data from a Navy's program cost analysis report and
    discussions with NAVAIR cost officials and confirmed by the Marine
    Corps identifies 340 aircraft as the programmed Marine Corps buy--the
    total F/A-18E/F buy would be reduced from 1,000 to 660 aircraft.  The
    likelihood that fewer F/A-18E/Fs will be procured is possible once
    the JSF, projected to be more capable and less costly than the E/F,
    becomes available around 2007.

    Additionally, the E/F unit cost is affected by a lower-than-projected
    annual production rate.  The Navy's unit cost calculations assumed an
    annual peak production rate of 72 aircraft for 8 years, representing
    over half the production run.  The Congress, in its fiscal year 1993
    Authorization Conference Report, questioned whether an annual
    production rate of
    72 aircraft was realistic and directed the Navy to provide
    cost-estimates for smaller production quantities (18, 36, and 54)
    with the results of the F/A-18E/Fs initial operational assessment,
    which is scheduled for the spring of 1996.  However, data shows that
    E/F production rate is expected to be lowered to only 36 F/A-18E/Fs
    annually rather than 72.

    Historically, reductions in annual production rates have increased
    the per unit procurement cost of aircraft.  The Navy has not provided
    us the increased unit cost based on reduced annual production rates.
    Therefore, we approximated what the unit cost increase would be based
    on a total procurement of 660 rather than 1,000 aircraft and an
    annual production rate of 36 rather than 72 aircraft.  Using the
    A/F-X cost model to predict the effect of total buy and annual
    production rate changes on recurring flyaway cost, we calculated that
    the F/A-18E/F unit recurring flyaway cost would be $53.2 million
    (fiscal year 1996 dollars) rather than the $43.6 million (fiscal year
    1996 dollars) estimated by DOD.  The $53.2 million unit recurring
    flyaway cost for the F/A-18E/F indicates that the E/F would have a
    unit recurring flyaway cost that is 189 percent of the F/A-18C/D's
    unit recurring flyaway cost ($53 million compared to $28 million).
    As shown in appendix I, this cost difference in unit recurring
    flyaway would result in a savings of almost $17 billion (fiscal year
    1996 dollars) or savings of over $24 billion when expressed in
    then-year dollars, if the Navy were to procure 660 F/A-18C/Ds rather
    than 660 F/A-18E/Fs.  Our estimated savings do not include the cost
    of C/D upgrades, such as the larger 480-gallon external fuel tanks
    for improved range nor the strengthened landing gear to increase
    carrier recovery payload.  However, our estimated savings are
    conservative because they also do not include planned E/F upgrades
    and are based on recurring flyaway costs that do not include the
    other items that make up total procurement costs.  (See app.  I for a
    discussion of how unit costs are computed.) Additionally, our
    estimated savings do not include savings that would accrue from
    having fewer type model F/A-18 aircraft in the inventory.  The cost
    benefits would result from having common aircraft spare parts,
    simplified technical specifications, and reduced support equipment
    variations, as well as reductions in aircrew and maintenance training
    requirements.

    Also, there are other indications that F/A-18E/F procurement costs
    could increase further.  According to contractor estimates, the cost
    of LRIP for the E/F is currently projected to be 8.5-percent greater
    than estimates provided to the Congress.

    --------------------
    \2 Statement before the Airland Forces Subcommittee of the Senate
    Armed Services Committee, Mar.  29, 1995.

    CONCLUSIONS AND RECOMMENDATION
    ============================================================ Chapter 6

    DOD faces funding challenges as it attempts to modernize its tactical
    aircraft fleet through the Air Force's F-22 program, the Navy's
    F/A-18E/F program, and the tri-service JSF program.  Various DOD
    officials have recognized that funding for each of these programs may
    not be forthcoming.  In that event, DOD will be forced to make some
    funding trade-offs among these three competing aircraft programs.

    In prior reports,\1 we offered alternative procurement strategies for
    the Air Force's F-22 program.  Regarding the Navy's F/A-18E/F
    program, DOD's next major decision is whether to proceed into
    production.  The Navy has spent about $3.75 billion (then-year
    dollars) on the E/F engineering and manufacturing development effort
    and plans to spend $57.31 billion (fiscal year 1996 dollars)/ $83.35
    billion (then-year dollars) to procure
    1,000 aircraft.  This report demonstrates that the justification for
    the E/F is not as evident as perhaps it was when the program was
    approved in 1992 because the E/F was justified, in large part, on
    projected operational deficiencies in the C/D aircraft that have not
    materialized.  This report also demonstrates that proceeding with the
    E/F program is not the most cost-effective approach to modernizing
    the Navy's tactical aircraft fleet.  Therefore, the information
    provided in this report should be fully considered before a
    production decision is made on the E/F.  Such consideration should
    take into account the following.

      -- Operational deficiencies in the F/A-18C/D cited by the Navy in
         justifying the need for the F/A-18E/F--range, carrier recovery
         payload, survivability, and system growth--either have not
         materialized as projected or can be corrected with nonstructural
         changes to the F/A-18C/D.  Furthermore, E/F operational
         capabilities will only be marginally improved over the C/D
         model.  The E/F's increased range is achieved at the expense of
         combat effectiveness and increased F/A-18E/F payload capability
         has created weapons release problems that, if not resolved, will
         reduce the F/A-18E/F's payload capability compared to the
         F/A-18C/D.

      -- A more cost-effective approach to modernizing the Navy's
         tactical aircraft fleet exists.  In the short term, the Navy
         could continue to procure the F/A-18C/D aircraft.  In the
         mid-term, upgrades could be made to the C/Ds to further improve
         the C/D's operational capabilities.  These upgrades could
         include such things as:  using the larger 480-gallon external
         fuel tanks to achieve more range; modifying landing gear to
         increase carrier recovery payload; using advanced avionics that
         require less space, cooling and power; and incorporating add-on
         survivability features.

      -- For the long term, the Navy is considering JSF as a complement
         to the F/A-18E/F.  DOD is predicting that the next generation
         strike fighter will provide more operational capability at less
         cost than the E/F.  Therefore, the next generation fighter
         should be considered as an alternative to the F/A-18E/F.

      -- The F/A-18E/F will cost more to procure than DOD currently
         projects.  The $43.6 million (fiscal year 1996 dollars) unit
         recurring flyaway cost estimate is based on a total buy of 1,000
         aircraft--660 for the Navy and 340 for the Marine Corps--at a
         high annual production rate of 72 aircraft per year.  However,
         the Marine Corps does not plan to buy the F/A-18E/F aircraft and
         the Congress has stated that an annual production rate of 72
         aircraft is not realistic.  Reducing the number of aircraft to
         be procured and the annual production rate to more realistic
         levels would reduce the total program cost but would increase
         the unit recurring flyaway cost of the aircraft to about $53
         million (fiscal year 1996 dollars).

      -- In a related report on the F/A-18E/F,\2

    we stated that the Navy's plan to procure the E/F appears to
    contradict the national military strategy, which cautions against
    making major new investments unless there is "substantial payoff." We
    pointed out that Navy data show both the C/D and E/F are expected to
    hit the same ground targets with the same weapons.

    Pursuing other alternatives, rather than proceeding with the
    F/A-18E/F program, would save billions of dollars.  Continued
    procurement of the Navy's less expensive F/A-18C/D aircraft (the
    fiscal year 1996 unit recurring flyaway cost of F/A-18C/Ds is $28
    million compared to $53 million for the F/A-18E/F) could be done only
    to the level needed to sustain inventories until the next generation
    strike fighter becomes available.  Furthermore, reliance on the more
    affordable next generation strike fighter as the Navy's primary
    tactical aircraft would help keep that aircraft affordable by
    increasing the total buy.

    --------------------
    \1 Tactical Aircraft:  F-15 Replacement Is Premature as Currently
    Planned (GAO/NSIAD-94-118, Mar.  25, 1994) and Tactical Aircraft:
    Concurrency in Development and Production of F-22 Aircraft Should Be
    Reduced (GAO/NSIAD-95-59, Apr.  19, 1995).

    \2 Combat Airpower:  Reassessing Plans to Modernize Interdiction
    Capabilities Could Save Billions (GAO/NSIAD-96-72, May 13, 1996).

       RECOMMENDATION
    ---------------------------------------------------------- Chapter 6:1

    Given the cost and the marginal improvements in operational
    capabilities that the F/A-18E/F would provide, we recommend that the
    Secretary of Defense reconsider the decision to produce the F/A-18E/F
    aircraft and, instead, consider procuring additional F/A-18C/Ds.  The
    number of F/A-18C/Ds that the Navy would ultimately need to procure
    would depend

    upon when the next generation strike fighter achieves operational
    capability and the number of those aircraft the Navy decides to buy.

       AGENCY COMMENTS AND OUR
       EVALUATION
    ---------------------------------------------------------- Chapter 6:2

    In its comments on a draft of this report, DOD said that it is
    convinced that the fundamental reasons for developing the F/A-18E/F
    remain valid.  Since DOD provided no data or information that we had
    not acquired and analyzed during our review, we have not changed our
    position that procuring the E/F is not the most cost-effective
    approach to modernizing the Navy's tactical aircraft fleet.  We
    recognize that the E/F will provide some improvements over the C/D.
    However, the C/D's current capabilities are adequate to accomplish
    its assigned missions.  Based on the marginal nature of the
    improvements and the E/F's projected cost compared to the
    alternatives discussed in this report, we believe that our
    recommendation that DOD reconsider its decision to produce the
    F/A-18E/F aircraft and, instead, consider procuring additional C/D
    aircraft until the next generation strike fighter becomes
    operationally available represents sound fiscal planning.  We
    formulated our position within the context of current budget
    constraints, the decreased military threat environment, and
    statements by DOD officials, such as the Chairman of the Joint Chiefs
    of Staff, that DOD's current plans to upgrade its tactical aircraft
    fleet will not be affordable.  Additionally, as we pointed out in our
    report, the national military strategy directs that major new
    investments should have substantial payoff.  We do not believe that
    procuring the F/A-18E/F would meet this test.

    DOD's entire comments and our evaluation are included in appendix
    III.

       MATTERS FOR CONGRESSIONAL
       CONSIDERATION
    ---------------------------------------------------------- Chapter 6:3

    DOD requested funding in its fiscal year 1997 budget request to begin
    procurement of the F/A-18E/F.  The Congress may wish to direct that
    no funds may be obligated for procurement of the F/A-18E/F until it
    has fully examined the alternatives to the E/F program.  In that
    regard, the House National Defense Authorization Act for Fiscal Year
    1997 (H.R.  3230,
    sec.  220) directed such an examination, and a DOD deep strike study
    is expected to be completed by the end of 1996.  Delaying the
    authority to begin procuring the E/F would allow DOD to complete its
    study and time for the Congress to asses the results of the DOD study
    and the information in this report as it decides whether DOD should
    be provided funding to proceed with the F/A-18E/F program.

    F/A-18E/F AND F/A-18C/D
    ACQUISITION COST COMPARISON
    =========================================================== Appendix I

    In annual selected acquisition reports to the Congress, the
    Department of Defense (DOD) provides F/A-18E/F program cost data in
    both fiscal year 1990 base year and inflated then-year dollars.  The
    report provides various procurement data from recurring flyaway costs
    to program costs.
    Figure I.1 lists the items that make up the various aircraft unit
    acquisition costs and demonstrates how DOD can present different
    procurement values.

       Figure I.1:  Breakout of
       Various Program Costs

       (See figure in printed
       edition.)

    Source:  Naval Air Systems Command (NAVAIR).

    Table I.1 shows F/A-18E/F unit cost estimates based on Navy data
    (1,000-aircraft buy and a high annual production rate of 72 aircraft)
    escalated to fiscal year 1996 dollars and in then-year dollars.

                                   Table I.1

                     Navy Unit Cost Estimates for the F/A-
                                     18E/F

                             (Dollars in millions)

                                                                In
                                                            fiscal      In
                                                              year   then-
                                                              1996    year
                                                            dollar  dollar
                                                                 s       s
    ------------------------------------------------------  ------  ------
    Recurring flyaway cost (Airframe, engine and avionics    43.60   62.20
     costs)
    Total flyaway cost (Recurring flyaway, nonrecurring      48.70   69.50
     flyaway, and ancillary equipment costs)
    Total procurement cost (Total flyaway, initial spares    57.31   83.35
     and support costs)
    Program cost (procurement and RDT&E costs)               63.09   89.15
    ----------------------------------------------------------------------
    In chapter 5, we provided a comparison of F/A-18C/D versus F/A-18E/F
    per unit recurring flyaway costs in fiscal year 1996 dollars to place
    better focus on the cost difference between these two aircraft.
    Table I.2 shows the annual and total recurring flyaway cost in
    then-year dollars of procuring 660 F/A-18C/Ds or F/A-18E/Fs starting
    in 1997.  The cost figures for the C/D are based on an annual
    procurement rate of 36 aircraft and a per unit cost extrapolated from
    actual fiscal year 1994 unit costs escalated using Navy supplied
    inflation factors.  The cost figures for the E/F buy are based on an
    adjusted procurement schedule that assumes that funding limitations
    would only allow a high annual production rate of 36 aircraft.  Table
    I.3 shows the cost of producing 660 F/A-18E/Fs and 660 F/A-18C/Ds in
    constant fiscal year 1996 dollars.

    Table I.4 shows the recurring flyaway cost savings that would accrue
    from the Navy procuring an equal number (660) of F/A-18C/Ds rather
    than E/Fs.  As table I.4 shows, continued procurement of the
    F/A-18C/D would result in a savings of almost $17 billion (fiscal
    year 1996 dollars) or over $24 billion (then-year dollars) based on
    recurring flyaway costs.

                                        Table I.2

                         Costs of Producing 660 F/A-18E/Fs or 660
                             F/A-18C/Ds in Then-Year Dollars

                                  (Dollars in millions)

                             Average       Total                 Average       Total
               Number of   recurring   recurring   Number of   recurring   recurring
    Fiscal      aircraft     flyaway     flyaway    aircraft     flyaway     flyaway
    year      produced\a        cost        cost    produced      cost\b        cost
    --------  ----------  ----------  ----------  ----------  ----------  ----------
    1997              12       $54.8       $ 658          36       $28.5      $1,026
    1998              24        56.4       1,354          36        29.4       1,058
    1999              36        58.1       2,092          36        30.3       1,091
    2000              36        59.9       2,156          36        31.2       1,123
    2001              36        61.6       2,218          36        32.1       1,156
    2002              36        63.5       2,286          36        33.1       1,192
    2003              36        65.4       2,354          36        34.1       1,228
    2004              36        67.4       2,426          36        35.1       1,264
    2005              36        69.4       2,498          36        36.1       1,300
    2006              36        71.5       2,574          36        37.2       1,339
    2007              36        73.6       2,650          36        38.3       1,379
    2008              36        75.8       2,729          36        39.5       1,422
    2009              36        78.1       2,812          36        40.7       1,465
    2010              36        80.4       2,894          36        41.9       1,508
    2011              36        82.9       2,984          36        43.2       1,555
    2012              36        85.3       3,071          36        44.5       1,602
    2013              36        87.9       3,164          36        45.8       1,649
    2014              36        90.5       3,258          36        47.2       1,699
    2015              36        93.3       3,359          12        48.6         583
    2016              12        96.0       1,152           0           0           0
    ================================================================================
    Total            660                 $48,689         660                 $24,639
    --------------------------------------------------------------------------------
    \a Initial production of F/A-18E/F aircraft is limited to 12 and 24
    aircraft for the first 2 years.

    \b Based on a fiscal year 1994, $26.175-million average recurring
    flyaway cost for 36 aircraft escalated by inflation factors provided
    by the Navy.

                                   Table I.3

                    Costs of Producing 660 F/A-18E/Fs or 660
                    F/A-18C/Ds in Constant Fiscal Year 1996
                                    Dollars

                             (Dollars in millions)

                                                            Averag
                            Number  Averag          Number       e
                                of       e   Total      of  recurr   Total
                            aircra  recurr  recurr  aircra     ing  recurr
                                ft     ing     ing      ft  flyawa     ing
                            produc  flyawa  flyawa  produc       y  flyawa
    Fiscal years              ed\a  y cost  y cost      ed  cost\b  y cost
    ----------------------  ------  ------  ------  ------  ------  ------
    1997-2016                  660   $53.2  $35,11     660   $27.7  $18,28
                                                 2                       2
    ----------------------------------------------------------------------

                                   Table I.4

                    Comparison of Costs to Produce 660 F/A-
                     18E/Fs and 660 F/A-18C/Ds in Then-Year
                     and Constant Fiscal Year 1996 Dollars

                             (Dollars in millions)

                                                          Difference in
                      Total recurring   Total recurring   total flyaway
    Type of Dollars   flyaway costs     flyaway costs     cost
    ----------------  ----------------  ----------------  ----------------
    Then-year         $48,689           $24,639           $24,050

    Constant fiscal   $35,112           $18,282           $16,830
    year 1996
    ----------------------------------------------------------------------

    JOINT ADVANCED STRIKE TECHNOLOGY
    PROGRAM
    ========================================================== Appendix II

    The Joint Advanced Strike Technology (JAST) program's objective is to
    develop a technically superior but less costly, more affordable
    aircraft than today's strike aircraft.  The basis for this objective
    is to be able to affordably meet potential future threats that cannot
    be met by today's aircraft.  The aircraft that will evolve from the
    JAST program has been designated the Joint Strike Fighter (JSF).

    As of November 1995, the total number of JSF aircraft projected to be
    acquired is shown in table II.1.

                                   Table II.1

                     Projected JSF Acquisitions by Service

                                                                    Number
                                                                        of
                                                                    aircra
    Service                         Requirement                         ft
    ------------------------------  ------------------------------  ------
    Air Force                       Conventional takeoff and         1,874
                                     landing multirole aircraft to
                                     replace the F-16 and A-10
                                     aircraft
    Navy                            First-day-of-the-war               300
                                     survivable, carrier-suitable
                                     aircraft to complement the F/
                                     A-18E/F
    Marine Corps                    Short-takeoff and vertical-        642
                                     landing aircraft to replace
                                     the F/A-18 and AV-8B
    ======================================================================
    Total                                                            2,816
    ----------------------------------------------------------------------
    In addition, the United Kingdom is participating in the program and
    is expected to buy an unspecified number of the short-takeoff and
    vertical-landing versions.

       THE JAST PROGRAM IS USING
       COST-CUTTING DEVELOPMENT
       METHODS
    -------------------------------------------------------- Appendix II:1

    To create the building blocks for an affordable, successful
    development of next generation strike weapon systems, the JAST office
    is using joint service teams to implement a series of new weapon
    systems development processes and techniques.  This new process is
    aimed at developing innovative means to significantly lower the
    life-cycle costs of developing, producing, and maintaining an
    advanced strike aircraft; identify weapons systems requirements; and
    identify, develop, and demonstrate advanced technologies for the
    aircraft that could be matured to a low-risk level heading into a
    decision to contract for the engineering and development of a new
    aircraft.

    To accomplish its development objectives, the JAST office is
    implementing a three-phase program, after which it expects to enter
    into the engineering and manufacturing development phase of an
    aircraft acquisition program for a Joint Strike Fighter.  This
    approach is designed to develop requirements for the fighter and
    demonstrate technology and operational concepts in the areas of
    propulsion, flight systems, weapons, structures and materials,
    avionics, manufacturing, and supportability.  The three phases are as
    follows:

    Concept exploration.  Studying innovative, high-payoff advanced
    technologies and system concepts that would reduce costs for joint
    strike warfare.  This phase, from May 1994 to November 1994, involved
    12 exploration contracts for $10.5 million.

    Concept development.  Further defining concepts and conducting
    additional cost and design trade-off analyses, design research, and
    technology maturation research.  This phase, scheduled from January
    1995 to March 1996, involves 26 contracts for $127.2 million, 4 of
    which were contracts to major potential aircraft producers to refine
    cost and design trade studies and aircraft concept designs.
    Subsequent to the awards, two of the major contractors--McDonnell
    Douglas and Northrop Grumman--teamed together with British Aerospace
    to develop a single concept design and perform cost and design trade
    studies.

    Concept demonstration.  Demonstrating weapon systems concepts and
    leveraged technologies with flying concept demonstration aircraft.
    This phase is scheduled to occur from mid-fiscal year 1996 to
    mid-fiscal year 2000.  During this phase, two contractors will each
    build and demonstrate two flying concept aircraft that would include
    demonstration of short takeoff and vertical landing.  One of these
    teams will be chosen to enter into a low-risk engineering and
    manufacturing development phase in 2000.

    (See figure in printed edition.)Appendix III
    COMMENTS FROM THE DEPARTMENT OF
    DEFENSE
    ========================================================== Appendix II

    letter and attachment 1 are restated in attachment 2 of its comments.
    Therefore, GAO's evaluation of the comments is presented in
    attachment 2.

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    MAJOR CONTRIBUTORS TO THIS REPORT
    ========================================================== Appendix IV

       NATIONAL SECURITY AND
       INTERNATIONAL AFFAIRS DIVISION,
       WASHINGTON, D.C.
    -------------------------------------------------------- Appendix IV:1

    Steven F.  Kuhta
    Jerry W.  Clark
    William J.  Gillies
    Charles R.  Climpson

       KANSAS CITY REGIONAL OFFICE
    -------------------------------------------------------- Appendix IV:2

    Lawrence A.  Dandridge
    Lillian I.  Slodkowski

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