B-2 Bomber: Additional Costs to Correct Deficiencies and Make
Improvements (Letter Report, 06/16/98, GAO/NSIAD-98-152).

Pursuant to a legislative requirement, GAO reviewed the total
acquisition costs of the B-2A bomber, focusing on: (1) deficiencies that
must be corrected to achieve Air Force objectives for the B-2A; (2)
additional costs to correct the deficiencies; and (3) the B-2A
modification schedule.

GAO noted that: (1) the Air Force evaluated the B-2A capability to meet
several broad objectives--strike rapidly, sustaining operations, deploy
to forward locations, survive in hostile environments, and accurately
deliver weapons; (2) the November 1997 operational test reports
concluded that B-2As, in the block 30 configuration, are operationally
effective, but with several important deficiencies that limit the
aircraft's ability to fully meet those objectives as planned; (3) the
test reports identify four deficiencies: (a) incomplete development of
the automated ground mission planning system, which is needed to rapidly
plan and carry out B-2A strike missions; (b) unsatisfactory performance
of the defensive avionics system, which is used to provide enemy threat
information to the crews and increase their survivability in certain
situations; (c) inadequate reliability and maintainability of low
observable materials and structures, reducing the ability to sustain the
defined pace of operations while maintaining a high degree of
survivability for conventional B-2A missions; and (d) lack of
environmental shelters to maintain low observable materials and to
protect the aircraft from certain weather conditions during deployment;
(4) the fiscal year 1999 B-2A cost estimate identifies the cost to
complete the B-2A program for the block 30 configuration at $44.3
billion then-year dollars; (5) included in this figure is funding to
correct or improve some, but not all, of the deficiencies listed above;
(6) for example, the estimate does not include the additional costs that
would be incurred if defensive avionics were to be required to achieve
the originally planned capability, which Department of Defense officials
said is no longer required at this time; (7) however, it does include
funding for software upgrades to improve the system performance, which
meets current operational objectives; (8) further, it does not include
the cost to improve low observable materials, which are needed to
sustain the pace of B-2A operations, and to provide for a sufficient
number of deployment shelters to accommodate repairs to B-2As; (9) the
estimate also excludes costs to buy spare parts that are being
identified to support the B-2A's nuclear mission; (10) modifications of
B-2As to the block 30 configuration have not been accomplished on
schedule; (11) four modified aircraft were delivered as of April
1998--three later than scheduled and one ahead of schedule; and (12)
according to the Air Force, the contractor has had difficulty hiring
enough personnel to achieve the schedule.

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

 REPORTNUM:  NSIAD-98-152
     TITLE:  B-2 Bomber: Additional Costs to Correct Deficiencies and 
             Make Improvements
      DATE:  06/16/98
   SUBJECT:  Weapons systems
             Air Force procurement
             Bomber aircraft
             Defense capabilities
             Future budget projections
             Concurrency
             Military cost control
IDENTIFIER:  B-2A Aircraft
             B-1B Aircraft
             
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Cover
================================================================ COVER


Report to Congressional Committees

June 1998

B-2 BOMBER - ADDITIONAL COSTS TO
CORRECT DEFICIENCIES AND MAKE
IMPROVEMENTS

GAO/NSIAD-98-152

B-2 Bomber

(707282)


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

  AFMSS - Air Force Mission Support System
  DOD - Department of Defense

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


B-278432

June 16, 1998

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-2A bomber through the completion of the production program.  The
last production aircraft was delivered in November 1997, and all
aircraft are scheduled to be updated to the latest defined (block 30)
configuration by July 2000.\1 This report discusses deficiencies that
must be corrected to achieve Air Force objectives for the B-2A,
additional costs to correct the deficiencies, and the B-2A
modification schedule.\2


--------------------
\1 The B-2A's final configuration is defined as a block 30 aircraft. 
The Air Force accepted B-2s in two other configurations, a block 10
training aircraft and block 20 interim capability aircraft, which all
will be upgraded to the block 30 configuration. 

\2 Appendix II contains a list of related GAO reports on the B-2
program. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The Air Force began development of the B-2A in 1981 and reported on
June 30, 1997, after 16 years, that the development and the initial
operational test and evaluation had been completed.  The Air Force
reports of the initial operational tests were completed in November
1997. 

In 1986, the Air Force estimated that B-2A development could be
completed for $14.5 billion, including a 4-year, 3,600-hour flight
test program scheduled at that time to end in 1993.  The flight test
program ended June 30, 1997, and the estimated cost of the
development program had grown to over $24 billion and the flight test
program to about 5,000 flight test hours over 8 years.  The
development and testing programs were extended because of Air Force
changes in the B-2 requirements and various technical problems. 

Major changes and problems contributing to the delays included (1)
making the B-2A's primary mission conventional rather than nuclear;
(2) redesigning the aircraft to satisfy an added requirement to
penetrate adversary air space at low altitudes; (3) difficulty in
manufacturing test aircraft, resulting in late delivery of partially
complete test aircraft; (4) difficulties achieving acceptable radar
cross section readings on test aircraft, which resulted in
significant redesigning and retesting of certain components; and (5)
correction of deficiencies in the aft deck structure because of the
unanticipated effects of engine exhaust. 

Even though numerous problems hindered the scheduled completion of
B-2A development, production began with no flight testing having been
completed.  This resulted in substantial overlap of development and
production.  Test and production aircraft were delivered that did not
fully meet the Air Force requirements, and a 5-year post-delivery
modification program was initiated to update all aircraft to the
block 30 configuration.  Since production began in 1986, the planned
number of B-2As was reduced from 133 to 21 aircraft and both the
total development and the average unit procurement costs increased. 
Table 1 shows the change in estimated total and unit cost from 1986
to 1998. 



                                Table 1
                
                  Comparison of B-2A Program Total and
                    Unit Costs Between 1986 and 1998

                    (Millions of then-year dollars)

                                          1986 (133        1998 (21
                                          aircraft)       aircraft)
                                        --------------  --------------
                                         Total    Unit   Total    Unit
Acquisition element                       cost    cost    cost    cost
--------------------------------------  ------  ------  ------  ------
Development                             $14,50          $24,70
                                             0               0
Procurement                             $43,70    $329  $19,60    $933
                                             0               0
======================================================================
Total                                   $58,20    $438  $44,30  $2,110
                                             0               0
----------------------------------------------------------------------
The last two of the 21 B-2As were delivered to the Air Force in the
block 30 configuration.  The major effort remaining in the B-2A
acquisition program is modification of the other 19 B-2As to the
block 30 configuration, scheduled for completion in July 2000. 
Through April 1998, six B-2As have been delivered in, or modified to,
the block 30 configuration and were operational at Whiteman Air Force
Base, Missouri.  Ultimately the Air Force plans to have 21 B-2As, of
which 16 will be available for missions (two squadrons of 8
aircraft), and 5 will be in various maintenance and repair cycles. 


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

The Air Force evaluated the B-2A capability to meet several broad
objectives--strike rapidly, sustain operations, deploy to forward
locations, survive in hostile environments, and accurately deliver
weapons.  The November 1997 operational test reports concluded that
B-2As, in the block 30 configuration, are operationally effective,
but with several important deficiencies that limit the aircraft's
ability to fully meet those objectives as planned. 

The test reports identify four deficiencies: 

  -- Incomplete development of the automated ground mission planning
     system, which is needed to rapidly plan and carry out B-2A
     strike missions. 

  -- Unsatisfactory performance of the defensive avionics system,
     which is used to provide enemy threat information to the crews
     and increase their survivability in certain situations. 

  -- Inadequate reliability and maintainability of low observable
     materials and structures, reducing the ability to sustain the
     defined pace of operations while maintaining a high degree of
     survivability for conventional B-2A missions. 

  -- Lack of environmental shelters to maintain low observable
     materials and to protect the aircraft from certain weather
     conditions during deployment. 

The fiscal year 1999 B-2A cost estimate identifies the cost to
complete the B-2A program for the block 30 configuration at $44.3
billion then-year dollars.  Included in this figure is funding to
correct or improve some, but not all, of the deficiencies listed
above.  For example, the estimate does not include the additional
costs that would be incurred if defensive avionics were to be
required to achieve the originally planned capability, which
Department of Defense (DOD) officials said is no longer required at
this time.  However, it does include funding for software upgrades to
improve the system performance, which meets current operational
objectives.  Further, it does not include the cost to improve low
observable materials, which are needed to sustain the pace of B-2A
operations, and to provide for a sufficient number of deployment
shelters to accommodate repairs to B-2As.  The estimate also excludes
costs to buy spare parts that are being identified to support the
B-2A's nuclear mission. 

Modifications of B-2As to the block 30 configuration have not been
accomplished on schedule.  Four modified aircraft were delivered as
of April 1998--three later than scheduled and one ahead of schedule. 
According to the Air Force, the contractor has had difficulty hiring
enough personnel to achieve the schedule. 


   DEFICIENCIES MUST BE CORRECTED
   TO ACHIEVE AIR FORCE OBJECTIVES
------------------------------------------------------------ Letter :3

To test the operational performance of the B-2A, the Air Force
measured B-2A performance against five broad operational objectives
that were derived from documented Air Force operational requirements
and concepts related to nuclear and conventional missions.  Figure 1
identifies these operational objectives and the key elements of each
that were included in the operational testing. 

   Figure 1:  Key Elements of the
   Broad Operational Objectives
   Included in Operational Tests

   (See figure in printed
   edition.)

Although test results indicate that B-2As generally met operational
objectives, four deficiencies were identified during testing that
will limit or, under some circumstances, change the planned concepts
for using the B-2As and slow its operational pace.  These relate to
mission planning, defensive avionics, low observable materials and
deployment. 

As the B-2A matures, numerous minor problems identified in the test
reports are scheduled to be corrected or improved based on their
relative priorities.  These include corrections of minor software and
hardware deficiencies, improvements to make crew operations easier or
faster, improvements of selected radar modes, and relocation of
certain buttons or displays.  The corrections and improvements
involve flight operation as well as maintenance and support of the
aircraft. 


      MISSION PLANNING SYSTEM
      STILL IN DEVELOPMENT
---------------------------------------------------------- Letter :3.1

Ground mission planning, which is still in development, is important
to the successful employment of the B-2A because very precise mission
routes must be planned to maximize the benefits of the aircraft's low
observable features.  Mission planning for the B-2A, done with the
automated Air Force Mission Support System (AFMSS), currently takes
more time than planned.  This will limit the Air Force's ability to
rapidly strike targets and sustain operations. 

The goal of the AFMSS development program is to produce a mission
planning system that can provide specific B-2A mission plans in 8
hours.  Testing as of June 30, 1997, concluded that the system
frequently malfunctioned, was not flexible or user friendly, and was
complex and time consuming to use.  Air Force operators at Whiteman
Air Force Base told us that the developmental version of AFMSS had so
many failures that they estimated it would take 60 hours to plan a
conventional mission and 192 hours to plan a nuclear mission. 

The AFMSS is an acquisition program separate from the B-2A and is
being developed to support all Air Force combat aircraft.  Interface
of the AFMSS with the B-2A began in 1994.  According to the
operational test report, AFMSS is a complex system made up of
separate subsystems developed by different contractors.  The Air
Force has received various developmental versions of AFMSS
subsystems, and additional upgrades to software and hardware are
planned in fiscal years 1998 and 1999.  The Air Force expects these
upgrades to support preparation of mission plans in 8 hours by the
third quarter of fiscal year 1999. 


      DEFENSIVE AVIONICS DO NOT
      WORK AS PLANNED
---------------------------------------------------------- Letter :3.2

The Air Force spent over $740 million to develop the defensive system
for the B-2A; however, test reports concluded that this system is
unsatisfactory.  The lack of an effective defensive avionics system
could affect the B-2A's survivability in selected situations because
it is supposed to provide B-2A crews with information on the location
of threats, both known and unknown that they may encounter during a
mission.  Limited funds and time are available to correct all the
deficiencies in the defensive system.  The Air Force plans some
software upgrades that are intended to provide the defensive system
with a limited but useful capability. 

Air Force officials said the cost of making the defensive system meet
originally planned capability is unaffordable at this time.  Air
Force officials told us that all the functions originally planned for
the system are not required to successfully carry out the planned
B-2A missions.  The operational test report further stated that,
although the defensive system is rated unsatisfactory, the system's
deficiencies do not prevent planning and executing B-2A missions. 
The test report indicated that the B-2A's low observability to
adversary threat systems permits use of other effective tactics that
could ensure its effective employment. 

The defensive system is to supposed to provide the crew information
on enemy threat systems to enhance B-2A survivability.  Known threat
locations are included in computer files prior to the mission.  The
system is to correlate these with the actual threats as the B-2A
flies its mission, but it is also to identify and locate unknown
threats that pop-up during a mission.  However, this system does not
work as planned, limiting the utility of information provided the
crew during critical portions of expected B-2 missions.  For example,
test reports indicate that the defensive system provided inaccurate
or cluttered information to the crew and had unacceptably high
workloads for the operators. 

The number and significance of problems with the defensive system
were not identified until near the end of the flight test program,
leaving Air Force program managers little time to correct problems. 
Flight testing, where most of the problems were discovered, did not
begin for the defensive system until February 1993, almost 4 years
after the flight test program started in July 1989 and almost 2 years
after other avionics began flight testing in June 1991.  According to
Air Force officials and an independent review team, several issues
contributed to the deficiencies and their discovery late in the
developmental and test processes.  These reasons included (1)
development and testing began late, (2) successful early laboratory
tests could not be repeated in flight tests, (3) test results from
flight tests were not completely analyzed before tests were
continued, (4) the contract provided incentives to move ahead with
development rather than correct problems, (5) there was too much
confidence that upgrades to computer software would solve the
problems, and (6) there were inadequate engineering controls to
prevent the overoptimistic view and approach to this development
effort. 

The Air Force's cost estimate does not include the cost of correcting
all deficiencies but does cover some improvements in the defensive
system.  The Air Force plans to develop software changes that are
scheduled to be available for use by 2000, if tests demonstrate the
changes are effective in providing a useful capability.  Air Force
officials indicated some changes have been tested by operational
crews with good success.  These software changes are intended to
provide capabilities that are useful but less than were expected in
the original defensive system design.  The Air Force believes these
changes will meet their requirements.  To achieve the original design
would require more costly upgrades, including new computer
processors.  Expensive hardware upgrades are not included in current
Air Force plans to enhance the B-2A. 

Historically, defensive avionics have experienced significant
problems during development.  The B-1B bomber had serious
deficiencies with its defensive avionics and the Air Force is still
working to provide an effective defensive capability for the B-1B. 
Other defensive avionics programs, like the Air Force's ALQ-135
jammer and the Navy's Airborne Self Protection Jammer, also
experienced costly development problems. 


      INADEQUATE RELIABILITY AND
      MAINTAINABILITY OF LOW
      OBSERVABLE MATERIALS
---------------------------------------------------------- Letter :3.3

Low observable materials and features on the B-2A frequently fail,
requiring high amounts of maintenance.  They also have time consuming
and environmentally controlled repair processes and long cure times
for the materials repaired.  This reduces the time aircraft are
available for operational use, which keeps mission capable rates
below the Air Force requirement.  These problems increase the amount
of time it takes to prepare a B-2A for its next combat flight,
potentially reducing the number of sorties that could be flown in a
given period of time. 

During operational testing, low observable materials and features
accounted for 40 percent of unscheduled maintenance and 31 percent of
the maintenance hours to repair the aircraft.  Aircraft operating at
Whiteman Air Force Base experienced results similar to those in the
operational test.  During a visit to Whiteman Air Force Base, we
observed a block 20 B-2A aircraft after a 10-hour flight.  The
aircraft had damaged tape, caulk, paint, and heat tiles, all low
observable materials.  In addition, we observed hydraulic fluid leaks
beneath the aircraft that further damaged tape and caulk.  The Air
Force is incorporating some new low observable tape materials into
the block 30 aircraft, which should reduce some maintenance; however,
according to Air Force officials this improvement will not be
adequate to achieve the operational pace currently planned for the
aircraft. 

In addition to the frequent failure of these materials, the processes
to repair them are time consuming and require an environmentally
controlled repair facility.  Cure times on some of the low observable
tapes and caulks, items that most frequently fail, can be as long as
72 hours, but most materials require 24 or more hours. 

The poor durability and extensive maintenance required of low
observable materials is an important factor keeping the B-2As from
achieving desired mission capable rates--the Air Force measure of an
aircraft fleet's availability to perform its assigned missions.  At
maturity, the Air Force goal for a mission capable rate is 77
percent.  On average, the mission capable rate in calendar year 1997,
when including the effects of low observable features, was 36
percent, less than half the goal. 

The Air Force has prepared a comprehensive plan to develop, test, and
install new and improved low observable materials, and to improve
repair processes, reduce cure times, and develop new diagnostic tools
that should allow the B-2A to meet operational requirements.  The
plan extends through 2005 and shows that funds required for research
and development, procurement, and operations and maintenance could
total about $190 million, of which $144 million is not in the current
cost estimate. 


      LACK OF ENVIRONMENTAL
      SHELTERS FOR DEPLOYMENT
---------------------------------------------------------- Letter :3.4

The operational test report states that the block 30 B-2A aircraft
must be sheltered to protect it from weather and provide a suitable
environment in which to maintain low observables.  The Air Force is
studying options for providing shelters, including the purchase of
portable shelters and use of existing facilities. 

The Air Force plans to buy a portable deployment shelter as a test
article to determine if the portable shelters will be adequate to
protect and maintain the B-2A's low observable features.  If the Air
Force buys the shelters, at a minimum it will require 17--1 training
shelter and 1 operational shelter for each of the 16 primary mission
aircraft. 

Air Force officials stated they are dedicated to buying the
deployment shelters but have not determined how many shelters are
needed to support B-2A deployments or the shelter configuration.  In
addition, they said funding sources have not been identified, but the
shelters will likely cost a total of between $15 and $25 million,
depending upon the quantity purchased. 

Air Force officials said they have begun to practice deploying the
B-2A and it is likely additional requirements will be identified when
this happens.  The Air Force completed one exercise, deploying two
B-2As to Guam, in March 1998, and plans two more in 1998.  Air Force
officials advised us that the B-2As performed well in the March 1998
deployment, but an official report has not been issued on the results
as of April 1998. 


   ADDITIONAL FUNDS WILL BE
   REQUIRED TO COMPLETE THE
   PROGRAM
------------------------------------------------------------ Letter :4

The fiscal year 1999 B-2A cost estimate indicates it will cost $44.3
billion then-year dollars to complete development, procurement, and
modification of the B-2A program.  However, the Air Force will incur
additional costs if it plans to correct the deficiencies identified
during testing and achieve the full operational capability originally
planned for the B-2A.  At this time, there is no comprehensive plan
that identifies the efforts required to achieve the full B-2A
capability, the likely cost of these efforts, or a funding plan. 
Further, the Air Force has not yet determined all requirements needed
to achieve some capabilities. 


      MOST B-2A FUNDS HAVE BEEN
      APPROPRIATED
---------------------------------------------------------- Letter :4.1

The fiscal year 1999 B-2A cost estimate indicates the cost to
complete development, procurement, and modification of the B-2A
program is $44.3 billion then-year dollars.  Through fiscal year
1998, the Air Force has been appropriated $43.3 billion, or 98
percent. 

Air Force estimates show the funding required from fiscal years 1999
to 2003 to complete development is $446.7 million and to complete
procurement and modifications from fiscal years 1999 to 2005 is
$599.4 million.  Table 2 shows the major elements of costs for which
funding is to be requested in fiscal years 1999 and beyond. 



                                Table 2
                
                   Planned Use of Funds for the B-2A
                 Program from Fiscal Years 1999 Through
                                  2005

                    (Then-year dollars in millions)

Development
--------------------------------------------------------------  ------
Northrop Grumman                                                $332.9
Armament                                                           0.2
Mission planning                                                  23.9
Government test                                                   65.3
Other government test                                              5.9
Direct release                                                    18.5
======================================================================
Total development                                               $446.7
Procurement
Air vehicle                                                      $91.4
Equipment/data/training                                           34.5
Interim contractor support                                       103.1
Spares                                                           119.6
Retrofit                                                          92.6
Program management                                                30.0
Other government costs                                            32.0
Software support                                                  96.2
======================================================================
Total procurement                                               $599.4
======================================================================
Total estimated cost                                            $1,046
                                                                    .1
----------------------------------------------------------------------

      ADDITIONAL COSTS WILL BE
      REQUIRED
---------------------------------------------------------- Letter :4.2

As discussed above, testing identified four deficiencies that will
require additional costs if the Air Force plans to fully correct all
deficiencies.  In addition to the cost increases needed for defensive
avionics, low observable materials, and support needed for
deployment, the Air Force will also incur costs to procure spares to
support the nuclear mission of the B-2A.  Table 3 shows estimated
costs to fix deficiencies that are not in the current cost estimate
as well as areas of other potential cost increases not yet fully
defined by the Air Force. 



                                Table 3
                
                 Estimated Cost to Correct Deficiencies
                     and Improve B-2A Capabilities

                        Estimated costs not in
Deficiency              estimate                Comments
----------------------  ----------------------  ----------------------
Defensive avionics      $0\a                    New computer
                                                processors, needed to
                                                provide full
                                                capability would be
                                                costly but are
                                                currently not planned
                                                for acquisition.

Low observable          $144.0 million          Air Force said it
features                                        plans to use $54
                                                million of the fiscal
                                                year 1998 funds added
                                                by Congress to help
                                                fund some of the $144
                                                million in
                                                improvements planned
                                                for low observable
                                                materials.

Deployment and          $15 to $25 million      The Air Force is now
shelters                                        beginning to practice
                                                B-2A deployments to
                                                identify support
                                                equipment shortfalls,
                                                which could result in
                                                additional costs.

Spares                  Not yet determined by   The Air Force must
                        Air Force               still identify and
                                                acquire spare parts to
                                                support the nuclear
                                                mission. Costs
                                                estimates and funding
                                                plans are not expected
                                                to be available until
                                                June 1998 or later.
----------------------------------------------------------------------
\a $34 million is included in the cost estimate to provide a limited
capability.  No additional costs are planned. 


   BLOCK 30 MODIFICATION SCHEDULE
   ISSUES
------------------------------------------------------------ Letter :5

The Air Force program to upgrade 19 B-2A aircraft to the block 30
configuration is falling behind schedule and further delays are
possible.  In addition, modified aircraft have been delivered with
significant numbers of deficiencies. 

Air Force officials said Northrop Grumman has not been able to hire
adequate numbers of workers; therefore, modifications have been
delayed.  Both the Air Force and Northrop Grumman were trying to
complete modifications based on schedules that were 3 to 6 months
ahead of the contract schedule.  Because of delays and problems,
these accelerated schedules have been discarded.  As of April 1998,
Northrop Grumman had delivered three modified aircraft later than,
and one modified aircraft earlier than, the contract schedule.  The
Air Force is assessing schedule performance and studying the funding
implications of a schedule slip.  At this time, the Air Force
believes adequate funds are available to complete the modifications. 

The Air Force is also assessing a planned schedule change that could
significantly delay the modification program for one aircraft.  This
change would be to accommodate the need to provide an aircraft for
flight testing planned upgrades.  Until the assessment is complete,
Air Force officials said it is not possible to determine if there
will be a cost impact on the modification program. 

All four block 30 aircraft delivered from the modification line have
a significant number of deficiencies.  Air Force officials stated
that some of these deficiencies are not operationally critical and
will be corrected during regular scheduled maintenance activities. 
They said a team will be located at Whiteman Air Force Base,
Missouri, to correct some of the deficiencies, and others will be
corrected during normal aircraft maintenance cycles to maintain the
aircraft in active operational service.  The four aircraft have from
30 to 46 deficiencies each and, to assure corrections are made, the
Air Force has withheld contractor payments totaling $24.5 million for
two of the delivered aircraft. 


   CONCLUSIONS AND RECOMMENDATIONS
------------------------------------------------------------ Letter :6

DOD should determine the nature and cost of those efforts that remain
to be accomplished to bring the B-2A into compliance with operational
requirements established by the Air Force.  This report identifies
various deficiencies that are unresolved and indicates the Air Force
is still identifying other requirements that may require further
effort and funding.  We recommend that the Secretary of Defense
direct the Secretary of the Air Force to identify remaining efforts
to achieve full operational capability, the costs to complete these
efforts, and the fiscal year funding requirements not currently in
the fiscal year 1999 President's Budget for the B-2A program.  We
further recommend that this information be provided to the Congress
with the fiscal year 2000 President's Budget in the form of a
comprehensive plan to complete the B-2A program. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

In commenting on a draft of this report, DOD partially concurred with
the recommendations.  DOD stated the B-2A is projected to meet full
operational capability by the third quarter fiscal year 1999 as a
"baseline program" within currently programmed funding.  DOD,
therefore, states no additional reporting is required on baseline
requirements.  DOD defines the baseline program as being a block 30
aircraft.  The DOD position assumes all operational problems
discussed in this report will be resolved without additional cost,
but, until these deficiencies have been proven to be corrected, some
cost uncertainty remains.  In addition, as this report points out,
the Air Force has accepted the block 30 aircraft with less
performance in some areas than originally planned in the baseline
program. 

DOD agreed there is a need to identify to Congress future efforts and
funding requirements to upgrade current B-2As.  DOD said it is
developing a long-range plan for upgrades to the bomber force and
that funding requirements will be included in the normal budgeting
process.  This action is consistent with our recommendations.  DOD's
comments are presented in their entirety in appendix I.  DOD provided
additional technical comments, which have been incorporated in this
report, as appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

To identify deficiencies with the operational performance of the
B-2A, we reviewed key test reports and summaries prepared by the B-2A
Combined Test Force, which conducted the developmental test and
evaluations, and the Air Force Operational Test and Evaluation
Command, which conducted the initial operational test and
evaluations.  We also reviewed assessments of the B-2A operational
testing prepared by the Office of Secretary of Defense Operational
Test and Evaluation office and we reviewed various program management
and engineering reports that summarized performance and testing
efforts being conducted on the B-2A program.  We interviewed Air
Force engineers, test managers, and program management officials to
determine the nature and extent of problems that were identified.  We
also discussed deficiencies identified during testing and current
operational experience and performance of operational B-2As with Air
Force officials at Whiteman Air Force Base, Missouri. 

To identify cost issues and plans to correct deficiencies, we
reviewed the available planning documents that identified corrective
plans and funding requirements for selected deficiencies.  We
reviewed B-2A program office annual cost and budgetary estimates,
financial and management reports, contract cost reports, program
schedules and plans, and other documents.  We also interviewed Air
Force officials in the B-2A program and at Air Combat Command to
determined cost and funding plans to correct deficiencies and
complete efforts necessary to provide a fully operational B-2A
aircraft. 

To identify the status of the block 30 modification schedule, we
reviewed the contract and planning schedules for the block 30
modification process, delivery documents identifying the delivery
date and number of deficiencies on the delivered aircraft, and
reports showing planned and actual manning at the contractor's
modification facility.  We also discussed with Air Force managers of
the modification process the reasons for delayed deliveries, changing
schedules, and the plans to correct remaining deficiencies. 

We performed our review from September 1997 to May 1998 in accordance
with generally accepted government auditing standards. 

We are sending copies of this report to the Secretaries of Defense
and the Air Force, the Director of 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 III. 

Louis J.  Rodrigues
Director, Defense Acquisitions Issues

List of Congressional Committees

The Honorable Strom Thurmond
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

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

The Honorable Floyd Spence
Chairman
The Honorable Ike Skelton
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




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



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

David E.  Cooper
Robert D.  Murphy

CHICAGO FIELD OFFICE

Michael J.  Hazard
Marvin E.  Bonner

RELATED GAO PRODUCTS

B-2 Bomber:  Cost and Operational Issues (GAO/NSIAD-97-181, Aug.  14,
1997). 

B-2 Bomber:  Status of Efforts to Acquire 21 Operational Aircraft
(GAO/NSIAD-97-11, Oct.  2, 1996). 

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

B-2 Bomber:  Cost to Complete 20 Aircraft is Uncertain
(GAO/NSIAD-94-217, Sept.  8, 1994). 


*** End of document. ***