B-2 Bomber: Status of Efforts to Acquire 21 Operational Aircraft (Letter
Report, 10/22/96, GAO/NSIAD-97-11).

Pursuant to a legislative requirement, GAO reviewed the B-2 bomber
program, focusing on: (1) recent program changes; (2) program funding
and current cost estimates; and (3) progress achieved in the Air Force's
flight test program, production, and modification efforts.

GAO found that: (1) the B-2 bomber program requires the Air Force to
receive 21 fully capable aircraft by June 2000; (2) 96 percent of the
estimated cost of the program has been appropriated through fiscal year
1996; (3) the Air Force has completed 75 percent of flight testing and
has reduced or deferred nonessential testing to meet the testing
deadline by July 1, 1997; and (4) the Air Force must continue to manage
the risks associated with concurrent development, testing and production
to deliver fully capable aircraft on schedule and within estimated cost.

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

 REPORTNUM:  NSIAD-97-11
     TITLE:  B-2 Bomber: Status of Efforts to Acquire 21 Operational 
             Aircraft
      DATE:  10/22/96
   SUBJECT:  Air defense systems
             Defense appropriations
             Defense cost control
             Bomber aircraft
             Defense contracts
             Testing
             Advanced weapons systems
             Defense capabilities
             Concurrency
             Air Force procurement
IDENTIFIER:  B-2 Aircraft
             Soviet Union
             Air Force Follow-on Test and Evaluation Program
             Military Strategic and Tactical Relay Satellite 
             Communications System
             Joint Direct Attack Weapon
             
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Cover
================================================================ COVER


Report to Congressional Committees

October 1996

B-2 BOMBER - STATUS OF EFFORTS TO
ACQUIRE 21 OPERATIONAL AIRCRAFT

GAO/NSIAD-97-11

B-2 Bomber

(707125)


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

  DCMC - Defense Contract Management Command
  DOD - Department of Defense
  FOT&E - Follow-On Test and Evaluation
  GAM - GPS-Aided Munition
  GPS - Global Positioning System
  JDAM - Joint Direct Attack Munition
  TF/TA - terrain-following/terrain-avoidance

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


B-272634

October 22, 1996

Congressional Committees

The conference report on the National Defense Authorization Act for
fiscal year 1994 requires us to report to the congressional defense
committees at regular intervals on the total acquisition costs of the
B-2 bomber program through the completion of the production program,
scheduled to end in June 2000.  This, our third report, is a
continuation of prior reports discussing the Air Force's progress in
acquiring B-2 aircraft.  This report (1) highlights recent program
changes; (2) discusses program funding and current cost estimates;
and (3) shows the progress achieved in the flight test program,
production, and modification efforts. 


   B-2 PROGRAM BACKGROUND
------------------------------------------------------------ Letter :1

B-2 operational requirements specify that the weapon system have
low-observable characteristics and sufficient range and payload to
deliver precision-guided conventional weapons or nuclear weapons
anywhere in the world with enhanced survivability.  The B-2 combines
conventional and state-of-the-art aircraft technology, such as
special shaping and radar absorbing materials, to achieve
low-observability (stealth) characteristics, high aerodynamic
efficiency, and large payload capacity.  The blending of these
technologies makes it a complex and costly aircraft to develop and
produce and, in some respects, to maintain. 

The B-2 development program was initiated in 1981, and the Air Force
was granted approval in 1987 to begin procurement of 132 operational
B-2 aircraft, principally for strategic bombing missions.  With the
demise of the Soviet Union, the emphasis of B-2 development was
changed to conventional operations and the number was reduced to 20
operational aircraft, plus 1 test aircraft that was not planned to be
upgraded to an operational configuration.  Production of these
aircraft has been concurrent with development and testing. 

The concurrency of development, testing, and production required the
Air Force to devise a mechanism for accepting incomplete aircraft
until the final configuration could be defined and demonstrated in
the test program.  Thus, the Air Force is accepting delivery of
production B-2s in three configuration blocks--blocks 10, 20, and 30. 
The block 30 configuration is to be fully capable and meet the
essential employment capabilities\1 defined by the Air Force. 
Initial delivery will be 6 test aircraft, 10 aircraft in the block 10
configuration, 3 in the block 20 configuration, and 2 in the block 30
configuration.  All block 10, 20, and test aircraft are to eventually
be modified to the block 30 configuration.  This modification process
began in July 1995 and is scheduled to be completed in June 2000. 

Block 10 configured aircraft provide limited combat capability with
no capability to launch conventional guided weapons.  B-2s in this
configuration are located at Whiteman Air Force Base and are used
primarily for training.  Block 20 configured aircraft have an interim
capability to launch nuclear and conventional munitions, including a
guided munition. 

The 1994 Defense Authorization Act limited B-2 program acquisition
cost to $28,968 million (1981 dollars) for 20 operational and 1 test
aircraft that was not planned to be upgraded to an operational
configuration.  The 1996 Defense Authorization Act repealed this and
other limitations placed on the B-2 program and authorized
continuation of certain B-2 acquisition activities.  In March 1996,
the President directed the 1 remaining test aircraft to be upgraded,
bringing the total operational B-2s to 21. 


--------------------
\1 Essential employment capabilities are the characteristics and
capabilities required by the Air Force to satisfy the full
operational spectrum of the B-2. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The Air Force is confident that the program, as currently defined,
can be completed within the estimated cost of $29,160 million (1981
dollars), the equivalent of $44,785 million in then year, or actual
dollars to be budgeted and spent.  However, there remain certain cost
and schedule risks in the B-2 program.  These risks are primarily
associated with (1) completion of flight testing by July 1, 1997, as
scheduled; (2) completion of modification programs designed to
upgrade B-2s to the block 30 configuration within cost and schedule
predictions; and (3) the potential for additional modifications as a
result of tests that are being accomplished concurrently with
modifications of aircraft to the block 30 configuration. 

The Air Force's current estimated cost includes costs for the 20
aircraft program formerly limited by the Congress, as well as costs
for activities added by the Congress in fiscal years 1995 and 1996. 
About 96 percent of the estimated cost of $44,785 million has been
appropriated through fiscal year 1996.  Appendix II shows more
detailed funding information for the current Air Force estimate. 


      COMPLETION OF FLIGHT TESTING
---------------------------------------------------------- Letter :2.1

Because most costs of flight test efforts are incurred under a
cost-type contract and the Air Force is responsible for the cost of
extensions, the Air Force is attempting to complete the remaining 25
percent of the B-2 flight tests by July 1, 1997.  To ensure the
flight test program is not extended beyond July 1, 1997, the Air
Force has reduced the flight test content compared to the test
program that was planned in May 1995 and has made certain other
changes.  However, because less than 1 year remains in the scheduled
flight test program, any delays in delivering required software or
hardware, increase in deficiencies, or grounding of test aircraft
will impact the Air Force's ability to complete the revised test
program by July 1, 1997.  The Air Force estimates that further
reductions may be required to ensure close out of the flight test
program by July 1, 1997. 

The revised flight test program deferred certain operational testing,
eliminated testing not necessary to demonstrate essential employment
capabilities, and combined other tests.  The revisions resulted in
387 fewer test point hours,\2 about a 14-percent reduction. 
Additionally, to meet the test schedule, the Air Force extended the
time aircraft were scheduled to be in the test program, added an
aircraft to do block 20 operational testing, scheduled more flight
tests per month, and made other changes. 

As part of the flight test reductions, the Air Force deferred 60
flight test point hours of operational survivability testing to the
Follow-on Test and Evaluation Program at Whiteman Air Force Base,
Missouri.  These test point hours were deferred because test ranges
would not be available to complete them by July 1, 1997.  Air Force
officials said additional survivability test point hours are at risk
of being deferred because of the limited remaining time in the test
program.  B-2 program and Air Combat Command officials stated the
deferred testing would still be accomplished at a later time by the
operational test command in a less costly test environment.  All of
the officials agreed that deferring these test point hours would not
affect the Air Force's ability to demonstrate the B-2's essential
employment capabilities. 

The Air Force has essentially completed the block 20 flight testing
and is working to complete testing of the remaining block 30
capabilities, including survivability, offensive and defensive
avionics, radar terrain- following and avoidance, the Joint Direct
Attack Munition, contrail management system, Military Strategic
Tactical Relay Program, and other corrections of previously
identified deficiencies.  Progress was made in resolving past
problems with radar signature, terrain-following and avoidance radar,
and others.  However, some radar signature issues must yet be
resolved and further testing is required to fully demonstrate
terrain-following radar capabilities, especially in the rain. 


--------------------
\2 Test point hours reflect the actual flight times needed to
complete test points, excluding nonproductive flight hours like
refueling and flight time to and from test ranges. 


      COMPLETION OF MODIFICATIONS
---------------------------------------------------------- Letter :2.2

Completion of the block 30 modification effort within the planned
schedule and cost is important if the B-2 program is to be completed
within the current estimated cost.  The block 30 modification effort
is still in its early stages.  It is about a 5-year effort, scheduled
to take from July 1995 to June 2000.  The first aircraft entered the
block 30 modification process on schedule and the effort is being
accomplished on schedule, but, currently, is only about 50-percent
complete. 


      POTENTIAL FOR ADDITIONAL
      MODIFICATIONS
---------------------------------------------------------- Letter :2.3

Remaining flight testing is scheduled to be done concurrently with
the assembly of the 2 block 30 production aircraft and with 7 of the
19 aircraft that must go through block 30 modifications.  Testing
could identify deficiencies that require further modifications after
the block 30 modifications are complete, adding unplanned costs to
the B-2 program.  While no post-block 30 modifications have been
specifically identified, the historical data Northrop Grumman uses to
predict the potential for future changes indicate that there are
likely to be additional modifications to B-2s even after block 30
modifications are completed.  The B-2 development and production
contracts are cost and incentive fee-type contracts, respectively. 
Under these contracts, the government would pay all development and
most production costs related to additional modifications. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :3

The Department of Defense (DOD) generally agreed with this report. 
It did, however, provide some technical corrections that have been
incorporated into this report.  The DOD response is included in
appendix IV. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :4

We reviewed available documents and records and interviewed officials
at the B-2 program office, Wright-Patterson Air Force Base, Ohio; the
Combined B-2 Test Force, Edwards Air Force Base, California; the Air
Combat Command, Langley Air Force Base, Virginia; the Air Force Cost
Analysis Agency, Arlington, Virginia; DOD and the Air Force,
Washington, D.C.; the Defense Logistics Agency, Defense Contract
Management Command, Pico Rivera and Palmdale, California; and the
Northrop Grumman Military Aerospace Division, Pico Rivera and
Palmdale, California.  Documents included cost and budgetary
estimates, financial and program management reports, test schedules
and plans, delivery acceptance reports, and many others that allowed
us to assess the current status of the B-2 program.  Interviews with
Air Force and contractor financial and technical managers provided
information on issues not included in formal reports. 

We performed our review from October 1995 through July 1996 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :4.1

We are sending copies of this report to the Secretaries of Defense
and the Air Force, the Director of the Office of Management and
Budget, and other interested parties.  We will make copies available
to others upon request. 

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

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


STATUS OF B-2 COSTS, TESTING, AND
MODIFICATIONS
=========================================================== Appendix I

The Air Force estimates it can complete the development and
procurement of 21 B-2s within the funding provided for the baseline
program, formerly capped by the Congress, and the funding for
additional activities added by the Congress in fiscal years 1995 and
1996.  The cost performance indicators the Air Force uses to monitor
contract efforts suggest that significant growth in costs and/or
schedule is not expected even though the estimated costs to complete
the Northrop Grumman contracts have increased slightly. 

Several factors create uncertainty about the final cost of the
program.  These center around the concurrent test and production
efforts and the uncertain completion of the test and modification
programs.  The development and test program is incomplete and
remaining production and block 30 modification efforts are to be
ongoing concurrently with remaining development and test effort. 
Accordingly, there is potential for cost growth that could result
from identifying deficiencies that require additional rework or
modifications.  Because the flight test program is within 1 year of
its scheduled completion date, any problems or delays in testing
could require extending flight testing, thereby increasing
development costs. 

On-time delivery of production aircraft has improved compared with
earlier experience, with four of the last five aircraft delivered
ahead of the contract schedule.  Although delivery performance has
improved, these aircraft were delivered, for the most part, with
greater numbers of deviations and waivers than previous deliveries. 
The deviations and waivers are the result of the concurrent
development and production activities and are intended to be
corrected in the block 30 configuration. 


   AIR FORCE BELIEVES IT CAN
   COMPLETE THE PROGRAM WITHIN
   ESTIMATED COSTS
--------------------------------------------------------- Appendix I:1

The current estimated costs to acquire 21 B-2s are $29,160 million
(1981 dollars) or $44,785.1 million (then-year dollars).  This
estimate includes amounts for the baseline program, formerly capped
by the Congress, as well as the congressional add-ons that occurred
in fiscal years 1995 and 1996.  These add-ons include: 

  -- Procurement funds appropriated in fiscal year 1995 to protect
     the industrial base and maintain the option to produce
     additional B-2s for
     1 year.  Because no new B-2 aircraft were authorized, this
     contract was essentially completed in July 1996. 

  -- Missile procurement funds added by the Congress in fiscal year
     1995 to buy limited quantities of the Global Positioning System
     Aided Munition (GAM). 

  -- Procurement funds appropriated for certain B-2 activities that
     are planned to be used to upgrade the first test aircraft to a
     block 30 configuration. 

A detailed estimate supporting the fiscal year 1997 President's
budget, which includes all of the funds discussed above is included
in appendix II. 


      COST PERFORMANCE INDICATORS
      DO NOT SUGGEST MAJOR COST
      GROWTH
------------------------------------------------------- Appendix I:1.1

Cost and schedule performance data on the Northrop Grumman
development and production contracts, which account for over 75
percent of the total program costs, do not suggest there will be
major cost growth through completion of the planned contract effort. 
The Air Force monitors cost and schedule performance data on these
contracts and uses it to develop cost estimates at completion for
these contracts.  Its estimates of costs at completion, excluding
fees and profits, are shown in table 1.1 for the last 5 quarters
beginning in April 1995, as reported in the Defense Acquisition
Executive Summary. 



                               Table I.1
                
                 Estimated Costs at Completion for B-2
                  Development and Production Contracts
                (excludes fees and profit) (millions of
                           then-year dollars)

                                       Development          Production
                                          contract            contract
------------------------------  ------------------  ------------------
April 1995                                 $20,576             $12,698
July 1995                                  $20,576             $12,704
October 1995                               $20,495             $12,740
January 1996                               $20,605             $13,094
May 1996                                   $20,610             $13,170
----------------------------------------------------------------------
The increases in the estimates to complete the production contract
were primarily the result of incorporating efforts that were planned
but not previously on contract, including support and training
requirements and block 30 capabilities. 

The B-2 development and production contracts include provisions that
result in the government paying for development and most production
costs related to efforts necessary to correct deficiencies.  Northrop
Grumman estimates that about $432 million in development and $439
million in production costs will have been incurred to correct
deficiencies through completion of the contracts.  These costs are
included in the estimated cost to complete the contract efforts. 

Defense Contract Management Command (DCMC) officials located at the
Northrop Grumman B-2 facilities conduct in depth reviews of the cost
accounts at Northrop Grumman on a routine basis.  These reviews and
other monitoring efforts have not identified any major cost or
schedule concerns at this time. 


      PROGRAM CONCURRENCY AND
      REMAINING SCHEDULES CREATE
      THE POTENTIAL FOR COST
      INCREASES
------------------------------------------------------- Appendix I:1.2

The remaining development and flight test program is scheduled to be
done concurrently with final assembly of block 30 production aircraft
and the modification efforts on several aircraft.  Program costs
could increase if remaining testing identifies deficiencies requiring
additional modification efforts to aircraft that have completed block
30 work.  Further, if Northrop Grumman cannot complete the currently
identified block 30 modification efforts on schedule or if the
remaining flight test program cannot be completed on schedule, total
program costs could increase.  Costs for these development,
production, and modification efforts are included in the original
development and production contracts.  Additional effort or delays in
the schedule provided for in the contracts would result in additional
costs to the Air Force. 

The flight test program, scheduled for completion on July 1, 1997,
overlaps the final assembly and production of initial production and
modified block 30 configured aircraft.  The last two production
aircraft are block 30 configured aircraft and are scheduled to
complete final assembly before July 1997.  In addition, seven
aircraft will be in the block 30 modification line before flight
testing is scheduled to be completed.  Appendix III shows the overlap
of initial deliveries, modifications, and the flight test program. 
If, as a result of flight testing, further modifications are
required, that will add costs to the program.  Northrop Grumman
officials said that as of May 1996, there were no deficiencies
identified that would require modifications after block 30 is
complete.  Based on the historical experience in the B-2 program,
Northrop Grumman estimates, however, that additional modification
activities could be required after completing block 30 modifications. 

The block 30 modifications began in July 1995 and are scheduled to
continue through June 2000.  The modifications are on schedule, but,
as of May 1996, none of the 19 aircraft to be modified has completed
the modification process that is estimated to take from 13 to 36
months depending upon the configuration and condition of the aircraft
when it enters the process.  Therefore, Northrop Grumman or the Air
Force do not know if they will encounter problems in the actual
modification.  If the work currently scheduled for the modification
program does take longer than planned or if additional work is added
to the already lengthy program, the modification's costs will
increase. 


      PROBLEMS IN COMPLETING TESTS
      COULD DELAY SCHEDULE AND
      INCREASE COSTS
------------------------------------------------------- Appendix I:1.3

The flight test program is scheduled to be completed by July 1, 1997,
and any delays will increase development costs.  Completion of the
flight test program has been delayed numerous times before.  B-2
program officials believe the test program can be completed on
schedule and that the schedule can accommodate some delays.  However,
an Air Force test planning document indicates that tests assigned to
one of the test aircraft may not be completed on time.  The potential
delay, initially estimated at
4 months, was recently reduced to 1 month.  Furthermore, because less
than 1 year remains in the scheduled test program, any delays in
delivering software or hardware, major deficiencies, or grounding of
test aircraft add to the risk of not completing flight testing on
schedule.  For example, the test aircraft were recently grounded for
a few days because failures in the B-2 engine tailpipe needed to be
inspected and repaired to prevent damage to the aircraft.  The Air
Force estimates that each month of flight testing with the current
three aircraft force costs about $10.3 million. 


      AIRCRAFT DELIVERY
      PERFORMANCE IMPROVED
------------------------------------------------------- Appendix I:1.4

Recent aircraft deliveries have been ahead of the contractually
required schedule.  Since August 1995, when we reported that B-2
aircraft were being delivered on average 57 days late, Northrop
Grumman has delivered 5 production aircraft on average 71 days early,
although with some increase in the number of major deviations and
waivers from the contract specifications and requirements.  Table I.2
shows the delivery performance on all aircraft delivered through June
30, 1996. 



                               Table I.2
                
                        B-2 Delivery Performance

                                                                 Major
                            Actual    Contract              deviations
                          delivery    delivery  Days early         and
Aircraft                      date        date     late(-)     waivers
----------------------  ----------  ----------  ----------  ----------
8                         12/11/93    12/17/93           6          57
9                         08/16/94    03/30/94        -139          61
7                         08/29/94    08/29/94           0          58
11                        10/27/94    10/18/94          -9          61
10                        12/29/94    07/25/94        -157          75
12                        02/16/95    01/20/95         -27          66
13                        06/26/95    04/14/95         -73          79
14                        09/25/95    10/10/95          15          79
16                        12/21/95    04/05/96         106          91
15                        01/12/96    01/12/96           0          89
17                          03/29/    06/30/96          93          67
                              96\a
18                        05/13/96    09/30/96         140          68
----------------------------------------------------------------------
\a This is delivery to the B-2 Combined Test Force for block 20
operational tests. 

DCMC officials said the number of deviations and waivers is not a
major concern to them at this time.  They said that because of the
concurrency in the program, the only feasible way they can accept
aircraft is through the use of authorized deviations and waivers. 
They said the B-2 is comparable to previous concurrent acquisition
programs like the B-1B--for example, they said the 100\th B-1B was
delivered with 56 waivers. 


      EXTENDED USE OF SOME B-2
      FUNDS APPROVED BY THE
      CONGRESS
------------------------------------------------------- Appendix I:1.5

Air Force officials said that about $107 million in fiscal year 1991,
1992, and 1993 funds could have become unavailable for use if not
expended within the allowed time frame.  These funds were available
for obligation for a period of 3 years.  Public Law 101-510, enacted
November 5, 1990, limited the period in which appropriated funds are
available for expenditure to 5 years after expiration of the period
in which these funds are available for obligation.  Therefore, the
total period of availability for expenditure of these funds is 8
years. 

The Congress has provided the Air Force with almost 96 percent of the
$44,785 million total estimated cost to complete the 21 B-2 aircraft
program through fiscal year 1996.  As of December 31, 1995, 94
percent of the appropriated funds were obligated and 87 percent
expended.  For most aircraft programs, the law provides adequate time
to expend funds appropriated.  However, the long time to produce,
deliver, and modify B-2s could preclude all expenditures for certain
B-2 aircraft being made within the time limit.  Production aircraft,
placed on contract with fiscal year 1991-93 funds, must be returned
to the contractor's facility after initial delivery to be modified
into the final contract configuration (block 30).  For some aircraft,
this manufacture, deliver, fly, return, modify, and redeliver process
will take longer than the 8 years allowed to expend funds. 

The Air Force identified this as a funding issue in its report to the
B-2 Defense Acquisition Executive.  The Department of Defense (DOD)
requested the Congress to grant an extension to the period of
availability for these appropriations.  The Congress granted an
extension in the defense appropriations act for fiscal year 1997 that
extends the time for expenditure of up to $107 million in fiscal
years 1991 funds and up to $15 million in fiscal year 1992 funds. 


   RISKS REMAIN TO COMPLETE
   REVISED TEST PLAN ON SCHEDULE
--------------------------------------------------------- Appendix I:2

The Air Force made significant reductions in the content of the
flight tests that are to be completed by July 1, 1997, the planned
completion date of the flight test program.  Through April 29, 1996,
the Air Force had completed about 75 percent of the revised B-2
flight test program, but some significant tests remain to be
completed.  And, with less than 1 year remaining in the test program,
any delays in delivering software or hardware, any major
deficiencies, or any grounding of test aircraft add to the risk that
the content will be further reduced or that the test plan will have
to be extended. 

The tests that remain to be concluded are crucial to demonstrate the
full effectiveness of the B-2.  The B-2 is to demonstrate it meets
the "essential employment capabilities" defined by the Air Force. 
Most remaining flight tests are to demonstrate block 30 essential
employment capabilities including: 

  -- survivability in the threat environment;

  -- band 4 and other features of defensive avionics;

  -- additional radar modes;

  -- guided weapons integration;

  -- contrail management system; and

  -- others, including the demonstration of corrections of
     deficiencies. 

Radar signature flight tests were completed in March 1996.  The Air
Force characterized the results as generally good, but, in some
cases, the signature did not meet the planned design predictions for
the block 30 configuration.  Air Force officials said that the
preliminary analysis of deficient signature areas shows no
significant operational impact will result.  However, the Air Force
has contracted for a more detailed analysis to determine the
operational impact of particular signature points that did not meet
the requirements, and plans to determine whether further design and
testing is necessary.  Radar problems previously reported have either
been resolved or are still being tested. 


      FLIGHT TEST PROGRAM REDUCED
      TO MEET SCHEDULE
------------------------------------------------------- Appendix I:2.1

Since May 1995, the Air Force has made changes to the flight test
program by eliminating unnecessary tests in order to meet cost and
schedule pressures to complete testing by July 1, 1997.  However,
there is still some risk that all planned testing will not be
completed on time.  Test point hours have been eliminated, deferred,
or combined reducing total test point hours by 387 (14 percent) since
May 1995.  The revised flight test plan focuses remaining testing
efforts on demonstrating the minimum essential employment
capabilities needed to field a fully combat capable aircraft. 

Following are the primary changes in the flight test program. 

  -- Reduced flight test point hours by 387 from 2,720 test point
     hours in
     May 31, 1995, to 2,333 test point hours in April 29, 1996.  This
     included deferring about 60 flight test point hours of
     operational survivability testing until they can be completed
     during the Follow-On Test and Evaluation (FOT&E) Program that is
     to be conducted from Whiteman Air Force Base, the operational
     base for the B-2. 

  -- Extended the scheduled time in the flight test program of two
     flight test aircraft, thereby changing the schedule for
     modifying those aircraft to the block 30 configuration. 

  -- Used AV-17, a block 20 production aircraft, to do developmental
     and dedicated operational testing for block 20, freeing the test
     aircraft for other test requirements. 

  -- Reduced the planned times that test aircraft are to have
     available to upgrade their hardware and software. 

  -- Planned for more test flights per month by scheduling more
     flights on weekends and at night, and by adding an additional
     maintenance crew to reduce downtime for maintenance. 

Table I.3 shows the change in flight test point hours since May 1995,
which was the test plan discussed in our August 1995 report.\3



                               Table I.3
                
                Changes in Flight Test Point Hours From
                    May 31, 1995, to April 29, 1996

                           Planned hours      Increase/  Planned hours
                           as of May 31,   decrease (-)    as of April
Test category                       1995       in hours       29, 1996
-------------------------  -------------  -------------  -------------
Structures                          93.2            8.1          101.3
Systems                            308.2          -15.0          293.3
Armament                           247.0          -71.7          175.3
Offensive avionics                 488.3          -80.9          407.4
Defensive avionics                  95.4          -21.5           73.9
Flight controls                    367.0          -23.6          343.5
Terrain following/                 417.8          -92.8          325.0
 avoidance
Radar signature                    247.6            3.0          250.6
Contrails                           10.8           -8.3            2.5
Survivability                      278.0          -57.4          220.6
Operational                        135.0            0.0          135.0
Pilot vehicle interface             31.5          -26.6            4.9
======================================================================
Total                            2,719.8         -386.5        2,333.3
----------------------------------------------------------------------
The Air Force provided the following reasons for reductions of more
than 50 test point hours shown in the table. 

  -- Armament, reduced 71.7 test point hours.  Test point hours
     involving targeting and release of the Mk-62 (500-pound
     destructor mine) were reduced because its characteristics were
     similar to the Mk-82 (500-pound general purpose bomb).  The Air
     Force successfully completed testing of the Mk-82 in fewer test
     point hours than had been planned.  Planned testing of the M-117
     (750-pound general purpose bomb) was moved to a lower test
     priority to be tested only if time permits.  According to Air
     Force officials, it is a World War II gravity bomb.  Finally,
     the Joint Direct Attack Munition (JDAM) test point hours were
     reduced because of its similarity to the GAM, which has
     successfully completed flight testing as the block 20 interim
     guided munition. 

  -- Offensive Avionics, reduced 80.9 test point hours.  Most of the
     reductions were the result of not testing the full specification
     for some radar modes and only demonstrating a basic capability
     with these modes.  According to the Air Force, these include
     ground moving target search and track and two classified modes
     that have limited operational utility.  Also, Air Force
     officials said the initial results from Global Positioning
     System (GPS) testing were excellent, allowing consumption of
     fewer test point hours than planned to successfully complete the
     evaluations of the GPS interface with the offensive avionics. 

  -- Terrain-following/terrain-avoidance (TF/TA), reduced 92.8 test
     point hours.  Most of the reductions were to eliminate test
     point hours included as contingencies by the Air Force in the
     May 1995 test plan because of the many problems being
     experienced by the terrain-following system at that time.  In
     addition, testing of the system's capability to identify various
     kinds of high towers was consolidated to allow for more
     efficient testing. 

  -- Detection/survivability, reduced 57.4 test point hours.  These
     operational test point hours were deferred to FOT&E because the
     test range was not available and the testing could not be
     accomplished by July 1, 1997.  Detection and survivability
     testing is flight testing against real or simulated ground and
     air threats.  This testing is to evaluate whether an adversary's
     defenses can detect the B-2 and to determine the degree of
     survivability of the B-2 against these threat systems.  To
     complete the test program on time, 60 of 180 test point hours in
     an integrated air defense environment were deferred to FOT&E. 

Air Force operational test officials stated deferred test point hours
would slightly reduce the confidence in demonstrating Critical
Operational Issue 3 in the Test and Evaluation Master Plan--Can the
B-2 carry out its assigned mission with a high degree of
survivability when employed within its concept of operations? 
However, the operational test command would complete about 120 test
point hours of testing to answer this question.  Accordingly, they
said the deferred testing would not reduce the operational utility of
the B-2.  B-2 Program and Air Combat Command officials stated that
deferred testing will still be accomplished by the operational test
command, but it will be accomplished more cost effectively at the B-2
operational base as opposed to the more costly development test base. 
The deferred testing would begin some time after delivery of the
first block 30 B-2 to Whiteman Air Force Base, which is scheduled for
August 1997. 


--------------------
\3 B-2 Bomber:  Status of Cost, Development, and Production
(GAO/NSIAD-95-164, Aug.  4, 1995). 


      FURTHER REDUCTIONS MAY BE
      NECESSARY TO MEET SCHEDULE
------------------------------------------------------- Appendix I:2.2

The above flight test program reductions and changes may not be
adequate to complete planned testing by July 1, 1997.  While the
above changes have created enough flight test capacity overall,
configuration differences between test aircraft create another
limitation on the ability to complete testing on time.  AV-3 is the
only test aircraft modified to include the block 30 radar signature
configuration upgrades, which are needed to fly the remaining
detection and survivability test point hours.  Although the Air Force
is committed to completing the flight testing by July 1, 1997, AV-3
capacity problems need to be resolved.  The Air Force had estimated
this testing would take until November 1, 1997, 4 months past the
July 1, 1997, scheduled completion date.  Air Force officials said
they are working to resolve this problem and have recently reduced
the estimated extension to 1 month.  In addition, because less than 1
year remains in the scheduled flight test program, any problems can
cause further delays or require more reductions in the test plan.  If
testing is not completed on July 1, 1997, it will result in added
development costs and delay the delivery of a full block 30
capability to the Air Force by deferring critical tests until later. 

Officials said shifting any incomplete detection and survivability
testing to FOT&E would be cheaper than continuing to operate the
entire B-2 test force at Edwards Air Force Base.  They estimated that
the test program, as currently configured with three aircraft, would
cost an additional $10.3 million a month to extend.  However, if the
incomplete testing is critical to demonstrating the essential
employment capabilities, deferring further testing to FOT&E could
restrict the operational capability of a block 30 B-2. 

The Air Force is still looking for ways to complete survivability
testing without deferring additional test point hours.  The major
time factor in the detection and survivability testing is analyzing
the large amounts of data between flights.  This data analysis, which
may take up to 2 weeks, must be accomplished before a similar mission
profile can be flight tested.  Therefore, the Air Force is hiring
additional analysts to try and reduce the time between flights.  In
addition, AV-4 has extra capacity for accomplishing flight test point
hours for which it is configured.  The Air Force will try to identify
test point hours that can be shifted from AV-3 to the other test
aircraft. 

With less than 1 year remaining in the scheduled flight test program,
delays or problems with software, hardware, or test aircraft can
cause further extensions in the test program.  The Air Force test
director noted that completing remaining test effort is dependent on
delivering the final block 30 software on schedule, delivering the
JDAM on schedule, and having the test aircraft available for flight
testing.  In 1995, the scheduled delivery date for the block 30
software to the B-2 combined test force was delayed 2 months to
August 1996.  The Air Force test director said they could not afford
further delays in this software as it is the key to completing the
remaining block 30 testing.  Since our discussion with the test
director, the software that precedes the delivery of block 30
software to the test force was delivered about 1 month late. 

In June 1996, DCMC reported that a significant number of software
deficiencies (696) remained to be resolved and closed and that some
of these deficiencies may not be corrected before the completion of
the development flight test program.  Flight testing continues
through July 1, 1997; thus, additional deficiencies will likely be
discovered.  DCMC reported that deficiencies not corrected in time to
be incorporated in the block 30 modification program will require
further development and testing in a post block 30 effort.  Until
fixes are identified and incorporated, Northrop Grumman may have to
develop procedural work arounds for the Air Force to use the block 30
aircraft.  According to DCMC, these work arounds have the potential
to impact operational capabilities, reliability, and maintainability. 

The test director also said they need to limit the amount of down
time for test aircraft.  Each of the three test aircraft have one
more scheduled lay-up period where new software and hardware are
installed for testing.  The Air Force is trying to minimize the
length of this lay-up, which, in the past, has been a contributor to
the extension of the total flight test program.  In addition, any
further general standdowns of aircraft as has happened in the past
for engine tailpipe problems cannot be accommodated within the
remaining time available for testing. 


      PROGRESS AND ISSUES WITH
      REMAINING TESTING
------------------------------------------------------- Appendix I:2.3

The Air Force has essentially completed the block 20 flight testing
and will continue to test and demonstrate remaining block 30
capabilities, including survivability, defensive avionics, and
integration of the JDAM and other block 30 capabilities.  As of April
29, 1996, the Air Force had completed 75 percent of the test point
hours required by the revised test plan.  Based on the previous May
1995 test point hour plan, the Air Force would be only about 64
percent complete.  Table I.4 shows the percent complete for flight
testing categories as of April 29, 1996. 



                               Table I.4
                
                Status of Completion of B-2 Flight Test
                                Program

                                                               Percent
                           Planned hours    Hours flown    complete as
                             as of April    as of April   of April 29,
Test Category                   29, 1996       29, 1996           1996
-------------------------  -------------  -------------  -------------
Structures                         101.3          101.3            100
Systems                            293.3          257.0             88
Armament                           175.3          134.9             77
Offensive avionics                 407.4          334.3             82
Defensive avionics                  73.9           32.7             44
Flight controls                    343.5          328.6             96
TF/TA                              325.0          222.5             68
Radar signature                    250.6          203.6             81
Contrails                            2.5             .8             32
Survivability                      220.6           70.3             32
Operational                        135.0           51.0             38
Pilot vehicle interface              4.9            4.9            100
======================================================================
Total                            2,333.3        1,741.9             75
----------------------------------------------------------------------
Remaining testing and other test issues are discussed below. 


         RADAR SIGNATURE
----------------------------------------------------- Appendix I:2.3.1

Radar signature is the most critical stealth feature needed for B-2
operational effectiveness.  The block 30 signature testing was
completed in March 1996.  According to Air Force officials, test
results showed the radar signature generally meets the predictions
used to establish the block 30 radar signature design.  This design
was the result of prior corrections to deficiencies in the B-2 radar
signature identified early in flight testing (early 1990s).  They
said, in most cases, the test results exceeded or met block 30 design
predictions, but, in some cases, it did not meet those requirements. 
Air Force officials said that preliminary analysis of deficient
signature areas shows no significant impact will result in B-2
operational survivability.  The Air Force has contracted for a more
detailed analysis of particular signature points that did not meet
the requirements, and plans to determine whether further design and
testing is necessary.  They indicated there could be some minor
degradations in survivability, and they have identified relatively
inexpensive fixes to solve the problems.  The Air Force has not
reached a final decision on the cost benefit of incorporating fixes. 
They plan to resolve the degradation issues and have a new radar
signature specification that reflects the final test results by
November 1996. 

Other key issues regarding the radar signature of the B-2 are still
being studied by the Air Force, including reliability and
maintainability problems on stealthy materials used on the B-2.  This
includes improvements in the engine tailpipes, radar signature tape
and caulking materials and application processes, paint, blade seals,
and others.  They are also working on ways to improve maintenance and
repair of these important B-2 components, especially in reducing long
curing times for selected repairs to stealth and to more easily
accomplish these activities when the aircraft is deployed to forward
locations.  The operational test director said radar signature
maintenance needs to be studied and improved. 


         DEFENSIVE AVIONICS
----------------------------------------------------- Appendix I:2.3.2

Defensive avionics are important for providing the crew accurate and
timely information on the locations of adversary weapon systems that
may be a threat to the B-2 during an operational mission.  Block 20
aircraft, now being delivered to Whiteman Air Force Base, will be the
first aircraft with a defensive avionics capability.  The Air Force
has completed most of the block 20 flight testing and has identified
one anomaly that must be resolved.  The systems performance must
still be tested in a highly dense threat signal environment and the
results analyzed.  These tests are scheduled in late August 1996. 

The block 20 defensive system provides coverage in the first three of
the four frequency bands covered by the defensive system.  The
delivered block 20 capability will include one deficiency that
requires an alternate operating procedure until the block 30 system
is delivered.  According to the Air Force, this deficiency will not
restrict the use of the B-2. 

The next phase of testing will be to complete the block 30 testing,
which adds the fourth frequency band of coverage to the existing
block 20 bands 1 through 3.  The complete defensive system software,
including corrections of known deficiencies, are not scheduled to be
delivered to the test force until August 1996.  This increases the
pressures and risks of completing testing on schedule especially if
any additional deficiencies are discovered.  In addition, the
capability to be delivered in the block 30 configuration is to
provide a computer tool that will allow the Air Force to create
specific mission threat databases for installation into the aircraft. 
Until this is developed, the Air Force will have to rely on the
contractor to provide this database for operational situations.  In
some cases, the Air Force estimated it could take up to 3 months to
create specific mission threat data files, which would delay the
availability of B-2s for contingency missions. 


         TF/TA SUBSYSTEM
----------------------------------------------------- Appendix I:2.3.3

As noted in our August 1995 report, the TF/TA subsystem has
encountered numerous problems in testing.  These included radar
immaturity, operations in the rain, and problems with the antenna. 
The Air Force has resolved or is working to resolve these problems
and was able to deliver a block 20 capability greater than planned in
the essential employment capability plan.  Instead of providing
capability to fly at 1,000 feet, as originally planned for block 20,
the system will be cleared for flights at
600 feet and include other features not planned for block 20.  The
Air Force is continuing efforts to improve the capability of the
TF/TA system to distinguish rain from other obstacles.  New software
has been tested in the avionics flying test bed and in the B-2 with
some success.  A final software fix, which was successfully tested in
the laboratory, will be installed in the B-2 in June 1996.  This will
be tested through the spring of 1997.  Radar antenna problems
discussed in our August 1995 report have been resolved.  Remaining
TF/TA testing includes testing in the rain, against high towers, over
snow and tree tops, and operational testing.  The testing is
scheduled to be completed in January 1997. 


         ARMAMENT
----------------------------------------------------- Appendix I:2.3.4

Fixed target effectiveness involves the integration of munitions and
guided weapons with the B-2.  The Air Force successfully completed
testing of the interim block 20 guided weapon, the GAM, meeting the
contract specifications for accuracy.  JDAM is the remaining guided
weapon to be tested during the remaining block 30 flight testing. 
Other weapons deemed important to the B-2 mission, such as a
stand-off missile and a deep penetrating bomb, are planned to be
integrated as part of a multi-staged improvement program that is to
occur after the completion of the block 30 flight test program.  The
Air Force is already assessing candidates for these new B-2
munitions.  Planned upgrades to the block 30 configuration are
discussed later in the report. 


         OTHER TEST ISSUES
----------------------------------------------------- Appendix I:2.3.5

The Air Force and Northrop Grumman are also working to resolve a
number of other miscellaneous issues that include: 

  -- an unacceptable oscillation or shaking of the wings and fuselage
     that, according to the Air Force, occurs at certain nonmission
     critical speeds at lower altitudes;

  -- demonstration of corrections for problems identified with the
     environmental control system;

  -- high failures in a rotary launcher assembly part that reduces
     availability of the launcher to the combat forces;

  -- fixes for the low observable coating in the engine tailpipe; and

  -- deficiencies in the engine thrust control unit. 


   STATUS OF B-2 MODIFICATION
   EFFORTS
--------------------------------------------------------- Appendix I:3

The Air Force has scheduled modification programs to upgrade B-2
aircraft to block 20 and 30 configurations.  The scheduled
modifications are intended to bring B-2s into a configuration that
meets the essential employment capabilities defined by the Air Force. 
The Air Force data show that the B-2 modification programs are
meeting the planned schedule, but the modifications are being done
concurrently with the flight test program.  Because the modification
plan has already been developed but flight testing is incomplete,
there is a risk that tests will identify additional problems that
require further modifications in order for the B-2 to meet the
essential employment capabilities. 

All but two of the 21 B-2 aircraft must undergo major modifications
after their initial delivery in order to achieve the essential
employment capabilities for the B-2.  The block 20 modifications for
five aircraft are expected to require about 2.5 months for each
aircraft and be complete in May 1997.  A significantly more extensive
block 30 modification is scheduled for 19 aircraft and is expected to
require from 13 to 36 months depending on the changes needed to each
individual aircraft.  Appendix III displays the Air Force's schedule
for the remaining aircraft deliveries and the block 20 and 30
modifications.  The current schedule shows that actual delivery dates
for aircraft are expected sooner than the contract delivery dates.