Navy Aviation: F/A-18E/F Development and Production Issues (Letter
Report, 03/13/98, GAO/NSIAD-98-61).

Pursuant to a congressional request, GAO reviewed the F/A-18E/F
development program, focusing on the: (1) status of the E/F development
flight test program; (2) deficiencies that have been identified to date
and corrective actions planned; and (3) current cost estimate for the
program.

GAO noted that: (1) the Navy has revised the F/A-18E/F flight test
program by decreasing the data collection requirements that were
originally planned; (2) program documents state that, although flight
testing is behind schedule, program decisions to reduce test points will
enable the Navy to regain lost time and complete development testing in
November 1998, as originally planned; (3) F/A-18E/F program documents
identified numerous deficiencies relative to the aircraft's operational
performance; (4) the most challenging technical issue is wing drop; (5)
until these issues are resolved through software or hardware changes
that have been adequately tested, the cost, schedule, and operational
performance impact of resolving these deficiencies cannot be determined;
(6) the Navy remains confident that it can correct these deficiencies;
(7) in addition, a Navy board that assesses risk areas in the E/F
program stated in July 1997, that operational testing may determine that
the aircraft is not operationally effective or suitable; (8) a December
1997 preliminary operational assessment report, which is classified and
based on limited data and analysis, identified 16 major deficiencies
with the E/F aircraft but concluded that the F/A-18E/F is potentially
operationally effective and suitable; (9) the Navy has consistently
stated that the F/A-18E/F will be developed and produced within the cost
estimates established for the program; (10) certain key assumptions on
which the cost estimate was made have been overtaken by events; (11)
program documents state that the current development effort is funded
based on the assumption that problems would not occur during testing;
(12) unanticipated aircraft deficiencies have occurred, and most of the
program's management reserve has been depleted; (13) since the flight
test program has about 1 year remaining, it is probable that additional
deficiencies will develop; (14) correcting current and potential future
deficiencies could result in the development effort exceeding the
congressional cost cap; (15) also, the Navy's F/A-18E/F unit procurement
cost estimates are understated; (16) these cost estimates were based on
what has become unrealistically high quantities of E/F aircraft that
will be bought; and (17) more realistic assumptions indicate that,
although the total procurement cost will decrease, the F/A-18E/F unit
cost will be more than the Navy currently estimates.

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

 REPORTNUM:  NSIAD-98-61
     TITLE:  Navy Aviation: F/A-18E/F Development and Production Issues
      DATE:  03/13/98
   SUBJECT:  Navy procurement
             Naval aircraft
             Cost analysis
             Defense capabilities
             Testing
             Future budget projections
             Cost overruns
             Advanced weapons systems
             Inflation
             Fighter aircraft
IDENTIFIER:  F/A-18C/D Aircraft
             F/A-18E/F Aircraft
             F/A-18 Aircraft
             DOD Quadrennial Defense Review
             Joint Strike Fighter
             
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Cover
================================================================ COVER


Report to the Honorable
Russell D.  Feingold, U.S.  Senate

March 1998

NAVY AVIATION - F/A-18E/F
DEVELOPMENT AND PRODUCTION ISSUES

GAO/NSIAD-98-61

F/A-18E/F Program

(707258)


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

  DOD - Department of Defense
  EMD - engineering and manufacturing development
  LRIP - low-rate initial production
  PRAB - Program Risk Advisory Board

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


B-277891

March 13, 1998

The Honorable Russell D.  Feingold
United States Senate

Dear Senator Feingold: 

As you requested, we reviewed the F/A-18E/F development program.  The
F/A-18E/F is intended to replace current F/A-18C/D aircraft and
perform Navy fighter escort, strike, fleet air defense, and close air
support missions.  As you know, the primary focus of the F/A-18E/F
program at this time is the testing activities that are being
performed by the Navy and the contractors.  This report addresses the
(1) status of the E/F development flight test program, (2)
deficiencies that have been identified to date and corrective actions
planned, and (3) current cost estimate for the program.  Our report
is based on data we obtained from Navy and contractor management and
test teams and from the Navy's Operational Test and Evaluation Force. 
Our scope and methodology are discussed in
appendix I. 


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

The F/A-18E/F is currently undergoing development flight testing as
part of its engineering and manufacturing development (EMD) phase of
the acquisition cycle.\1 The development flight test program is under
the responsibility of the Integrated Test Team, which consists of
Navy and contractor personnel.  The team also receives support from
the Navy's Operational Test and Evaluation Force. 

The F/A-18E/F development flight test program began in February 1996
at the Naval Air Warfare Center, Patuxent River Naval Air Station,
Lexington Park, Maryland.  The Integrated Test Team is using the
seven test aircraft provided by Boeing (formerly McDonnell Douglas)
under the EMD contract.  The seven aircraft consist of five
single-seat E models and two 2-seat
F models.  Boeing has also built 3 ground test article aircraft to
use in conducting tests at its St.  Louis, Missouri, facility, and
General Electric Corporation, Lynn, Massachusetts, has delivered 21
engines for flight testing. 

The Navy plans to procure 62 low-rate initial production aircraft in
3 separate procurement lots.  In March 1997, the Navy received
approval to procure 12 aircraft under the first low-rate initial
production lot.  The decision to approve the procurement of the next
20 aircraft under the second low-rate initial production lot was
scheduled for the end of 1997,\2 and the decision to approve the
procurement of the final 30 aircraft under the third low-rate initial
production lot is scheduled for late 1998 or early 1999. 


--------------------
\1 The primary objectives of the EMD phase are to translate the most
promising design into a stable, producible, cost-effective design;
validate the manufacturing processes; and demonstrate system
capabilities through testing. 

\2 This decision has been delayed pending identification of a
solution to a wing drop problem.  The wing drop problem is discussed
on page 6. 


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

The Navy has revised the F/A-18E/F flight test program by decreasing
the data collection requirements that were originally planned.  At
the time of our review, the flight test program was about 4 weeks
behind the revised test schedule.  Program documents state that,
although flight testing is behind schedule, program decisions to
reduce test points will enable the Navy to regain lost time and
complete development testing in November 1998, as originally planned. 

F/A-18E/F program documents identified numerous deficiencies relative
to the aircraft's operational performance.  The most challenging
technical issue is "wing drop," a deficiency that causes the aircraft
to rock back and forth when it is flying at the altitude and speed at
which air-to-air combat maneuvers are expected to occur.  This
problem was experienced in March 1996 during flight testing.  As of
March 1998, the Navy was continuing to investigate the cause and
potential solutions to the wing drop problem.  Other issues include
deficiencies that could negatively impact survivability improvements
to the aircraft, engine problems that could degrade performance and
engine service life, and weapon separation problems that require
additional testing.  Until these issues are resolved through software
or hardware changes that have been adequately tested, the cost,
schedule, and operational performance impact of resolving these
deficiencies cannot be determined.  The Navy remains confident that
it can correct these deficiencies. 

In addition, a Navy board that assesses risk areas in the E/F program
stated in July 1997, that operational testing may determine that the
aircraft is not operationally effective or suitable.\3 According to
program officials, this assessment means that the F/A-18E/F may not
be as capable in a number of operational performance areas as the
most recently procured F/A-18C aircraft.  A December 1997 preliminary
operational assessment report, which is classified and based on
limited data and analysis, identified 16 major deficiencies with the
E/F aircraft but concluded that the F/A-18E/F is potentially
operationally effective and suitable.  The report also confirmed the
Navy board's concerns regarding certain classified operational
performance characteristics of the E/F compared with the operational
capabilities of the F/A-18C. 

The Navy has consistently stated that the F/A-18E/F will be developed
and produced within the cost estimates established for the program. 
The F/A-18E/F development effort has been capped by the Congress at
$4.88 billion (1990 base year dollars).  Certain key assumptions on
which the cost estimate was made have been overtaken by events. 
Program documents state that the current development effort is funded
based on the assumption that problems would not occur during testing. 
Unanticipated aircraft deficiencies have occurred, and most of the
program's management reserve has been depleted.  Since the flight
test program has about 1 year remaining, it is probable that
additional deficiencies will develop.  Correcting current and
potential future deficiencies could result in the development effort
exceeding the congressional cost cap. 

Also, the Navy's F/A-18E/F unit procurement cost estimates are
understated.  These cost estimates were based on what has become
unrealistically high quantities of E/F aircraft that will be bought;
the Navy not factoring in the cost effect of its decision to buy more
of the higher cost F models than was factored into the original cost
estimates; and unrealistically low annual inflation factors for
aircraft to be purchased in the later years.  More realistic
assumptions indicate that, although the total procurement cost will
decrease, the F/A-18E/F unit cost will be more than the Navy
currently estimates. 


--------------------
\3 Operational effectiveness is the capability of a system to perform
its mission in the fleet environment and in the face of unexpected
threats, including countermeasures.  Operational suitability is the
capability of a system, when operated and maintained by typical fleet
personnel in the expected numbers and of the expected experience
level, to be supportable when deployed. 


   STATUS OF DEVELOPMENT FLIGHT
   TEST PROGRAM
------------------------------------------------------------ Letter :3

The primary purpose of the development test program is to identify
system deficiencies so they can be corrected and have a production
representative aircraft ready to begin Operational Test and
Evaluation in May 1999.\4 As the flight test program progressed,
delays were encountered due to events that normally occur during
testing, such as inclement weather conditions and required equipment
maintenance.  Testing delays were also caused by unanticipated
events.  For example, in the summer of 1996, a 3-month machinist
strike at the airframe contractor's plant delayed the delivery of the
last three EMD aircraft and, in turn, delayed the testing that was to
be done on these aircraft.  Also, in November 1996, an in-flight
engine failure occurred at the Patuxent River test range, which
stopped flight testing for 2 months on all but one EMD aircraft--an F
model that was being prepared for initial carrier qualification
flights. 

F/A-18E/F program management developed a revised flight test plan
that will help cope with the delays in the original flight test
program.  Development of the revised plan began with an Integrated
Test Team meeting in September 1996.  According to the minutes of
that meeting, the team reviewed flight test data and revised the
original flight test plan by identifying areas in which testing could
be reduced but essential program requirements and goals could still
be met.  At the time of our review, however, the revised flight test
program was about 4 weeks behind schedule.  Program documents predict
that, although flight testing is behind schedule, decisions to reduce
test points will enable the Navy to regain lost time.  The documents
state that the Navy anticipates completing development testing in
November 1998 and begin operational testing in May 1999, as
originally planned.  In the meantime, program officials plan to
conduct monthly reviews to identify additional areas that can be
deleted from the flight test program.  The Integrated Test Team and
F/A-18E/F program management officials stated that, while the
elimination of some data collection requirements might add some risk
to the E/F program, the risk is at an acceptable level. 


--------------------
\4 Operational Test and Evaluation will be the field testing of the
F/A-18E/F, under realistic conditions, to determine the effectiveness
and suitability of the aircraft, its equipment, and its weapons for
use in combat by typical military users


   F/A-18E/F DEFICIENCIES AND
   PROGRAM RISKS IDENTIFIED DURING
   DEVELOPMENT PROGRAM
------------------------------------------------------------ Letter :4

The Navy's F/A-18E/F Integrated Test team established a system for
identifying deficiencies during the development program.  That
system, which is described in appendix II, identified over 400
deficiencies as of December 1997.  The number of deficiencies changes
constantly as some are resolved and others are identified.  The
deficiencies include problems with E/F flying qualities, structural
concerns that could have a negative impact on the aircraft's service
life, engine deficiencies that could impact aircraft performance and
engine life, and weapon separation problems that cause bomb-to-bomb
collisions that require additional testing. 

The Navy also established a Program Risk Advisory Board.\5 The Board
identifies deficiencies from flight or ground test data and assesses
the risk that the deficiencies represent to the program.  Boeing also
identifies deficiencies during flight or ground tests that it
believes represent a risk to the program and develops mitigation
plans for resolving these risks.  As of September 1997, the Board and
Boeing had identified 33 and 38 program risks, respectively.  A
listing of risk items and their assigned level of risk by the Board
and Boeing is in appendix III. 

Although many of the deficiencies have not been resolved, Navy
program management continues to project that the F/A-18E/F will be
ready for operational testing as scheduled in May 1999 and that the
aircraft will meet all operational performance requirements.  On the
other hand, the Navy's Program Risk Advisory Board stated in July
1997 that the Navy's Operational Test and Evaluation Force may find
that the E/F is not operationally effective or suitable.  According
to program officials who are members of the Board, the Board's
assessment reflects the realization that the F/A-18E/F may not be as
capable in a number of operational performance areas as the most
recently procured C model aircraft, which are equipped with an
enhanced performance engine. 

This issue was addressed in a classified December 1997 Operational
Test and Evaluation Force report.  That report was requested by the
F/A-18E/F program office.  The report is referred to as a Quick Look
Report because it represents the Operational Test and Evaluation
Force's preliminary conclusions based on a limited analysis of data
collected during its operational assessment completed in November
1997.  The Quick Look Report identified 16 major deficiencies with
the E/F, such as air-to-ground sensor performance, air-to-ground
weapons, air-to-air sensor performance, and survivability.  However,
the report concluded that the F/A-18E/F is potentially operationally
effective and potentially operationally suitable.  The report also
confirmed the Program Risk Advisory Board's concerns regarding
certain classified operational performance characteristics of the E/F
compared with the operational capabilities of the F/A-18C.  In
addition, the report indicated that the Operational Test and
Evaluation Force's final report, scheduled to be issued in March
1998, will be based on more detailed analysis of available data and
may contain modified conclusions. 

The following section discusses selected risk items that were
identified by program officials and documents as significant
concerns, including items discussed in our previous report on the
F/A-18E/F program.\6 These items are wing problems, new technology
advances, engine challenges, weapons separation problems, and
horizontal and vertical tail problems. 


--------------------
\5 The Program Risk Advisory Board is part of the Navy's F/A-18E/F
Integrated Test Team. 

\6 Navy Aviation:  F/A-18E/F Will Provide Marginal Operational
Improvement at High Cost (GAO/NSIAD-96-98, June 18, 1996). 


      WING DROP
---------------------------------------------------------- Letter :4.1

In March 1996, during flight testing at the Patuxent River Naval Air
Station, the F/A-18E/F experienced wing drop.  The Navy and Boeing
describe the phenomenon as an unacceptable, uncommanded abrupt
lateral roll that randomly occurs at the altitude and speed at which
air-to-air combat maneuvers are expected to occur.  A joint
Navy/Boeing team concluded that wing drop was caused by a loss of
lift on one of the outer wing panels during maneuvering. 

According to Navy and Boeing officials, wing drop is the most
challenging technical risk to the F/A-18E/F program.  The deficiency
has been classified by Boeing and the Program Risk Advisory Board as
a medium technical, schedule, and cost risk to the low-rate initial
production phase of the E/F program.  Program officials consider wing
drop to be a high-risk deficiency. 

The F/A-18E/F Integrated Test Team concluded that if wing drop is not
corrected, it will prevent or severely restrict the performance of
the F/A-18E/F during air-to-air combat maneuvering.  The F/A-18E/F
Program Risk Advisory Board concluded that this deficiency would
cause the aircraft to be unacceptable for operational test and
evaluation and could result in a schedule slip. 

Boeing and the Navy have continued their attempts to define the cause
of wing drop and identify potential solutions.  For example, 25
potential wing modifications have been tested in a wind tunnel. 
Flight hardware to test two leading-edge wing modifications have been
designed and fabricated, and flight testing of the modifications has
begun.  One of the leading-edge wing modifications provided no
improvement.  The other provided improvement for turns above 20,000
feet, but improvements are still needed for air-to-air tracking tasks
and turns at 15,000 feet and below. 

In September 1997, a Blue Ribbon panel concluded that an intermediate
solution to wing drop would be to fix both the leading and trailing
edges of the wing.  The Blue Ribbon panel further proposed that a
total wing redesign should be considered as the long-term solution to
wing drop. 

In November 1997, the Assistant Secretary of the Navy for Research,
Development, and Acquisition advised the Secretary of the Navy that
the low-cost, quick fixes have improved aircraft performance but have
not completely resolved the wing drop issue.  The Assistant Secretary
also stated that the best and worst case scenarios for resolving the
problem ranged from a combination of software changes with simple
wing modifications, which should not impact production and
acquisition plans, to a more complex and lengthy wing redesign, which
would impact production and acquisition of the aircraft. 

In January 1998, program officials told us that the F/A-18E/F will
not require a major wing redesign.  This assessment is based on their
assumption that although wing modifications that are currently under
investigation might not entirely eliminate the possible occurrence of
wing drop, the modifications would reduce wing drop effects to an
acceptable level.  Until the Navy identifies and completes its flight
testing of these wing modifications, their impact on such things as
the F/A-18E/F's speed and maneuverability, range, weight, and the
planned reduced radar cross section of the aircraft to increase its
survivability, will not be known.  Program officials estimated that
they will be able to quantify these performance impacts and decide on
the best solution to the wing drop problem by March 1998.  This plan
coincides with the next major funding decision for the F/A-18E/F
program, which will be a decision by the Assistant Secretary of the
Navy for Research, Development, and Acquisition on whether to approve
full funding of the next 20 aircraft under the second of three
low-rate initial production decisions. 


      NEW TECHNOLOGY ADVANCES
---------------------------------------------------------- Letter :4.2

New technology features (the details of which are classified) have
been incorporated into the F/A-18E/F to improve its survivability by
reducing the aircraft's susceptibility to being detected by enemy
radar.  The Integrated Test Team has documented new technology
anomalies that could negatively affect the new technology features to
be incorporated into the aircraft.  In September 1997, Boeing and the
Navy's Program Risk Advisory Board listed new technology concerns as
a high risk to the F/A-18E/F program. 

The new technology anomalies include such things as seal failures,
damage to special coatings, door latches, wing delaminations, and the
aircraft's wind screen.  Efforts to correct these problems are
ongoing.  For example, Boeing has been training its maintenance crews
on the proper cleaning and application methods of seals to reduce the
failures that have occurred.  Longer term production fixes call for
redesigning such things as doors and hinges.  Further, the test
aircraft have received structural repairs to address large
delaminations that have occurred on the underside of the aircraft
from blown tires.  However, these repairs used protruding fasteners
that would be unacceptable in operational aircraft because they would
negatively impact aircraft signature.  Efforts are underway to
develop better repair procedures for aircraft to be produced under
the second and third low-rate initial production phases of the
program. 

Boeing and the Navy have stated that there is currently no definitive
answer as to the impact these changes will have on the reduced radar
cross section of the E/F.  They believe that the F/A-18E/F will have
unacceptable operational test and evaluation results if the fixes do
not work.  However, if the fixes do work, they need to be included on
the aircraft being produced under the first lot of low-rate initial
production, because these aircraft will be used for Operational Test
and Evaluation.  If these fixes are not included, it is likely that
operational evaluation will be unacceptable. 


      ENGINE CHALLENGES
---------------------------------------------------------- Letter :4.3

The Program Risk Advisory Board has identified engine-related issues,
including engine warm-up time required before carrier launch, partial
engine flameouts during some test flights, visible engine smoke, and
engine failures during flight and ground tests.  In addition,
high-pressure engine turbine blades that had been redesigned to
reduce heat to achieve the required engine service life caused an
in-flight engine failure.  Consequently, the Navy decided to revert
to the original turbine blade design.  The Navy generally views the
engine anomalies as a medium risk to the program.  The engine
contractor, on the other hand, is redesigning certain portions of the
engine and views the engine as a low-risk component of the program. 

The engine contractor stated that engine anomalies and component
redesign have delayed the EMD schedule by 6 to 8 months and increased
cost by 4 percent.  However, the contractor believes that it will
meet the low-rate initial production schedule by extending the work
schedule as required.  The Navy, however, has expressed concern over
engine problems.  For example, the Integrated Test Team stated that
(1) stalls that occur prior to engine warm-up will preclude the
performance of the deck launch intercept mission, which is defined as
5 minutes from engine start to launch; (2) visible engine smoke would
increase the overall visibility of the aircraft, which may result in
earlier visual acquisition of the aircraft by adversary pilots; and
(3) engine flameouts and stalls could result in the destruction of
the engine.  The Program Risk Advisory Board stated that these engine
deficiencies may make the F/A-18E/F unacceptable for operational
evaluation or may jeopardize successful operational evaluation. 


      WEAPON SEPARATION PROBLEMS
---------------------------------------------------------- Letter :4.4

The F/A-18E/F is designed to have more payload capacity than current
F/A-18C/Ds as a result of adding two new wing stations to carry
external stores.\7

Early wind tunnel tests conducted in July and August 1993 showed that
some stores would hit the side of the aircraft or other stores when
released.  The Navy and Boeing identified the cause of weapon
separation problems as the adverse air flow created by the E/F
airframe. 

Boeing spent about 1 year developing and testing several improvement
concepts before selecting a redesigned pylon as the intended fix to
the stores separation problem.\8 Weapon separation testing with the
redesigned pylon began in February 1997 and is expected to continue
through November 1998. 

As of September 1997, the weapon separation problem was classified by
Boeing and the Navy Program Risk Advisory Board as a medium technical
risk to the EMD phase of the E/F program.  In its risk assessment,
Boeing stated that if stores separation problems continue to occur
during testing, additional changes would be required.  In recent
flight tests during November and December 1997, bomb-to-bomb
collisions occurred when releasing certain weapons. 

In addition to the weapon separation problems, recent tests have
revealed that noise and vibration may cause structural damage to
stores being carried under the wing.  Currently, this problem is
resulting in speed limitations on the aircraft when carrying certain
weapons. 


--------------------
\7 In this case, a store is a weapon or any other item, such as a
fuel tank, that is carried on the outside of the aircraft. 

\8 The pylon is a structure on the underside of the aircraft's wings
to which such things as weapons and external tanks can be attached. 


      HORIZONTAL STABILATOR
      DELAMINATIONS
---------------------------------------------------------- Letter :4.5

The F/A-18E/F experienced delaminations, or peeling, in its
horizontal tail stabilator.\9 This deficiency was first identified
during pre-production ground testing of the EMD aircraft design at
the contractor plant in July 1995.  The testing showed small areas
where the metal substructure and the composite skin did not bond. 

The contractor used fasteners to ensure that any delaminations of the
horizontal stabilator that occurred would not cause any in-flight
failures.  The contractor also initiated an inspection program every
25 flight hours for the problem area.  All seven EMD test aircraft
have been equipped with the redesigned horizontal stabilator. 
According to Boeing, no significant delaminations were occurring,
therefore, the inspection frequency is being raised to 50 flight
hours. 

A redesign of the horizontal stabilator for the low-rate initial
production aircraft was completed in October 1996 and is currently
undergoing testing.  In November 1997, delamination occurred during
testing of the redesigned stabilator.  This resulted in a decision to
stop production pending completion of a review of the delamination
problem. 

In commenting on a draft of this report, the Department of Defense
(DOD) stated that additional testing and analysis since November 1997
led to the conclusion that the original EMD stabilator design with
fasteners is acceptable.  The EMD aircraft are in the process of
testing this design and, according to DOD, the low-rate initial
production aircraft that will have this design will have the
stabilators tested prior to delivery.  DOD also stated that a
slightly redesigned stabilator, to be used in aircraft that will be
produced subsequent to the first lot of low-rate production aircraft,
is undergoing testing that is scheduled to be completed this summer. 


--------------------
\9 The horizontal stabilator is a metal-composite bonded structure
attached to the back end of the aircraft's fuselage located below the
vertical tail and behind the wing. 


      VERTICAL TAIL DEFICIENCIES
---------------------------------------------------------- Letter :4.6

The F/A-18E/F vertical tail has not been certified because it
experienced deficiencies during testing early in the test cycle. 
This deficiency has been classified by both Boeing and the Program
Risk Advisory Board as a medium technical risk to the low-rate
initial production phase of the F/A-18E/F program.  According to
Boeing, all vertical tail design changes will be incorporated in the
aircraft to be procured during low-rate initial production.  However,
the design changes resulted in a vertical tail weight increase of 20
pounds. 

An additional vertical tail redesign plan is in process.  The purpose
of the second redesign is to incorporate weight savings of 29 pounds
and improve the tail's producibility.  The redesign is intended to
provide a fully certified vertical tail at the start of the third
low-rate initial production lot.  Testing of the redesigned vertical
tail is scheduled to be completed in late 1999. 


      F/A-18E/F COST ESTIMATE
---------------------------------------------------------- Letter :4.7

The Navy has consistently maintained that the F/A-18E/F will be
developed and produced within the cost estimates established for the
program.  However, certain key assumptions on which the F/A-18E/F
cost estimates were based have been overcome by events.  These
assumptions relate to such things as:  no unanticipated issues during
the development program; the number of aircraft to be bought, in
total and on an annual basis; the ratio of the E and F models to the
total number of aircraft to be bought; and inflation factors to be
used in projecting future years' costs.  Adjusting these assumptions
to reflect recent events will likely result in higher F/A-18E/F
development and unit production costs than the Navy currently
estimates. 


      F/A-18E/F DEVELOPMENT COSTS
      MAY EXCEED CURRENT ESTIMATES
---------------------------------------------------------- Letter :4.8

The development cost for the F/A-18E/F program has been capped by the
Congress at $4.88 billion (1990 base year dollars).\10 It will be a
challenge for the Navy to stay within this cost because, according to
Navy documents, that amount is adequate to fund the program based on
the assumption that problems would not occur during testing. 
However, the program has experienced deficiencies; the development
flight test program still has about 1 more year, and additional
deficiencies may be identified during that time; and EMD funding
reserves have nearly all been used. 

The Navy's Program Executive Officer for tactical aircraft has raised
concerns about the ability of the F/A-18E/F development effort to
fund the correction of these deficiencies because the program's EMD
management reserves have diminished significantly.  For example,
Boeing's EMD airframe management reserve has decreased from $256
million when the program began to $56.7 million in October 1997. 
This reserve was used to correct deficiencies as they developed.  Of
the $56.7 million, $50.9 million has been targeted for known
deficiencies that have not yet been corrected, leaving a balance of
$5.8 million. 

In addition, the $28 million EMD engine management reserve at General
Electric has been depleted.  According to an October 1997 F/A-18E/F
program management status report, the lack of engine management
reserve is a real concern considering that engine problems need to be
corrected.  According to the report, General Electric has not yet
quantified the full cost impact, but future overruns are expected. 

The development flight test program will not be completed for another
year.  Program management has stated that the development flight test
program is normally the most risky portion of the development effort. 
Therefore, if changes to correct known deficiencies fail or if
additional deficiencies develop, the cost of correcting them will
likely cause the $4.88 billion development cost estimate to be
exceeded. 


--------------------
\10 Senate Report 102-352 on the National Defense Authorization Act
for Fiscal Year 1993 established this ceiling for the EMD phase of
the F/A-18E/F program.  The conference report supported the Senate
report's language. 


      F/A-18E/F PROCUREMENT COST
      ESTIMATES ARE UNDERSTATED
---------------------------------------------------------- Letter :4.9

The Navy also faces a challenge in procuring the F/A-18E/F within the
unit cost originally estimated.  Its unit procurement cost estimates
have been based on what has become unrealistically high quantities of
E/F aircraft that will be bought, a lack of factoring in the cost
effect of the Navy's decision to buy more of the higher cost F models
than was factored into the original cost estimates, and an
unrealistically low inflation factor for purchases in later years of
the program. 


      TOTAL NUMBER OF AIRCRAFT
      TO BE PROCURED HAS DECREASED
--------------------------------------------------------- Letter :4.10

Originally, Navy projections of F/A-18E/F unit procurement costs were
based on procuring 1,000 aircraft at a peak annual production rate of
72 aircraft.  Neither of these assumptions are likely to be realized. 

The assumption that 1,000 E/F aircraft will be procured is not
consistent with the outcome of the Quadrennial Defense Review and
current Defense Planning Guidance.  In May 1997, the Quadrennial
Defense Review recommended that, due to funding constraints, the
total procurement of F/A-18E/Fs should be reduced to 548 aircraft. 
The October 1997 Defense Acquisition Executive Summary Report revised
the total F/A-18E/F procurement to 548 aircraft. 

In terms of the Navy's assumed annual production rate of 72 aircraft,
in March 1997 the Under Secretary of Defense for Acquisition
indicated the annual E/F production rates would be lower.  He
directed that he be given the opportunity to review any plan to
acquire production tooling that would support producing more than 48
aircraft per year.  The May 1997 Quadrennial Defense Review report
also recommended an annual production rate of 48 aircraft. 

According to information provided to you in July 1997 by the Director
of Strategic and Tactical Systems, Office of the Secretary of
Defense, the lower total buy will decrease the total procurement cost
but increase the E/F's unit procurement cost from $57 million to $64
million (fiscal
year 1997 dollars). 



      MORE HIGHER COST
      F MODELS WILL BE PROCURED
--------------------------------------------------------- Letter :4.11

When the F/A-18E/F program was approved in 1992, the procurement plan
called for the majority (820, or 82 percent) of the F/A-18E/F buy to
be single-seat E models.  Only 180, or 18 percent, of the 1,000
aircraft buy would be two-seat F models to be used for training
purposes.  However, the Navy has since decided that the majority of
the total buy will now be two-seat F models that will require the
crew members in the second seat to perform operational as well as
training functions.  According to program documents, the Navy is
using a buy of 548 aircraft, as recommended in the Quadrennial
Defense Review, for planning purposes.  This buy will consist of 288
(about 53 percent) F model aircraft and 260 (about 47 percent) E
model aircraft. 

This revised acquisition strategy has significant cost implications
because, according to program officials, the two-seat F model will
cost about $1.5 million more per aircraft than the single-seat E
model.  However, this cost differential is expected to increase. 
According to program documents, the back seat of the F will have to
be upgraded to accomplish the operational missions that will now be
assigned to that model.  The cost of this upgrade, which is expected
to be accomplished by 2005, has not been estimated. 


      INFLATION RATES ARE
      UNDERSTATED
--------------------------------------------------------- Letter :4.12

Navy unit procurement cost estimates for the 15-year F/A-18E/F
acquisition program assume an annual inflation rate that is provided
by the Office of the Secretary of Defense.  The unit procurement cost
estimates in the Navy's F/A-18E/F Selected Acquisition Reports from
program approval in 1992 through December 1995 were based on a
3-percent annual inflation factor, which measures the general
inflation of the U.S.  economy rather than the inflation rate for the
aerospace industry.  The December 1996 Selected Acquisition Report
stated a lower projection of E/F unit procurement cost based on a
lower 2.2- percent annual inflation factor.  According to program
documents, the inflation rates provided by the Office of the
Secretary of Defense for budget estimating are lower than escalation
indexes developed from historical escalation data published by the
Bureau of Labor Statistics, which uses the Data Resources
Incorporated econometric forecasting model for the aerospace
industry.  According to E/F program management, the escalation
factors generated by the model will be used as a baseline to
negotiate E/F procurement cost.  Table 1 compares the DOD annual
inflation rates with aerospace industry annual inflation rates. 



                                Table 1
                
                 Comparison of DOD and Industry Annual
                           Inflation Indexes

Fiscal year                             DOD factor     Industry factor
------------------------------  ------------------  ------------------
1997                                           2.2                 2.9
1998                                           2.2                 3.1
1999                                           2.2                 3.2
2000                                           2.2                 3.4
2001                                           2.2                 3.3
2002                                           2.2                 3.4
2003                                           2.2                 3.5
2004                                           2.2                 3.6
2005                                           2.2                 3.5
2006                                           2.2                 3.6
----------------------------------------------------------------------
Using the higher aerospace industry inflation rates would
substantially increase the F/A-18E/F unit procurement cost estimate. 
The use of understated inflation rates to estimate unit cost is not
unique to the F/A-18E/F program.  We have issued reports that discuss
the impact of understated inflation rates.\11


--------------------
\11 F-22 Restructuring (GAO/NSIAD-97-100R, Feb.  28, 1997) and Future
Years Defense Program:  Lower Inflation Outlook Was Most Significant
Change From 1996 to 1997 Program (GAO/NSIAD-97-36, Dec.  12, 1996). 


   CONCLUSIONS AND RECOMMENDATIONS
------------------------------------------------------------ Letter :5

The ongoing test program has identified numerous deficiencies with
the F/A-18E/F aircraft.  The Navy's system for identifying the
program risk associated with these deficiencies indicates that
several of them are significant.  As of March 1998, the Navy had not
decided how to resolve some of the deficiencies or predicted the
costs involved in resolving them.  A Navy board established to
identify risks to the F/A-18E/F program has stated that, until
several of the deficiencies have been resolved, the Operational Test
and Evaluation portion of the F/A-18E/F program, scheduled to begin
in May 1999, might slip or that the F/A-18E/F will have an
unsuccessful Operational Test and Evaluation. 

We recognize that the F/A-18E/F development test program has nearly
1 year remaining before it is scheduled to be completed.  Therefore,
the Navy still has time to try to resolve the deficiencies being
identified during the test program.  However, additional deficiencies
may be identified before the test program is completed.  The issue is
how much time and money will be required to satisfactorily resolve
these deficiencies.  This will not be known until the E/F has
completed its Operational Test and Evaluation. 

The deficiencies discussed in this report were identified prior to
DOD's March 1997 decision to approve the E/F program to enter
low-rate initial production.  DOD's approval to advance the program
into production indicates its optimism and willingness to accept the
risk that these deficiencies, and any additional deficiencies that
might arise, will be resolved with little or no cost, schedule, or
performance impact on the program.  Program documents indicate,
however, that correcting some of these deficiencies, such as the wing
drop problem, could have significant cost, schedule, and performance
impacts on the F/A-18E/F program. 

We believe that DOD and the Navy need to adopt a more cautious
approach as they make funding decisions for the E/F program and
prepare for Operational Test and Evaluation of the aircraft. 
Therefore, we recommend that the Secretary of Defense direct the
Secretary of the Navy to not approve contracting for any additional
F/A-18E/F aircraft beyond the 12 aircraft contracted for during the
first low-rate production phase of the program until the Navy
demonstrates through flight testing that identified aircraft
deficiencies have been corrected.  This will still provide the Navy
with the necessary aircraft to conduct operational testing of the
F/A-18E/F. 

We also recommend that the Navy not begin Operational Test and
Evaluation of the F/A-18E/F until corrections of deficiencies are
incorporated in the aircraft that will be used for the evaluation. 


   AGENCY COMMENTS AND OUR
   EVALUATION
------------------------------------------------------------ Letter :6

In commenting on a draft of this report, DOD partially concurred with
both of our recommendations.  Regarding our recommendation that no
additional aircraft be contracted for until flight testing has
demonstrated that aircraft deficiencies have been corrected, DOD
stated that its testing to date has not identified any specific
deficiencies that are predicted to prevent achieving an operationally
effective level of performance.  DOD also stated that it would ensure
that the solution to the wing drop problem has been demonstrated
before proceeding with full funding of the second low-rate production
lot of the aircraft.  DOD further stated that the Secretary of
Defense has said that these funds would not be released until he is
satisfied that the wing drop problem has been corrected.  We believe
the same level of commitment is needed relative to the other
deficiencies that the F/A-18E/F Integrated Test Team has identified,
such as the engine and weapon separation problems. 

Regarding our recommendation that Operational Test and Evaluation of
the F/A-18E/F not begin until correction of deficiencies are
incorporated in the aircraft to be used for operational evaluation,
DOD stated that it agreed that operational evaluation should begin in
May 1999 with production representative aircraft that have
incorporated needed corrections.  The underlying basis of our
recommendation is that the Navy needs to demonstrate through flight
testing that all the required fixes have been made and incorporated
in the test aircraft before beginning Operational Test and
Evaluation, even if the schedule needs to slip beyond May 1999.  This
approach would provide a sound basis for evaluating and quantifying
the capabilities of the aircraft that will be provided to the fleet. 
This evaluation is particularly important because the F/A-18E/F will
be the Navy's primary fighter aircraft until the Joint Strike Fighter
becomes available.  A realistic comparison on the operational
capabilities of the E/F with the newest F/A-18C/Ds currently in the
fleet would provide the basis for a decision on how many E/F aircraft
the Navy should ultimately procure as replacements for the C/D
aircraft. 

In addition to its comment on our recommendations, DOD provided
specific comments on other portions of our draft report.  DOD's
comments and our response appear in appendix IV. 


---------------------------------------------------------- Letter :6.1

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
from its issue date.  At that time, we will send copies to interested
congressional committees; the Secretaries of Defense and the Navy;
and the Director, Office of Management and Budget.  We will also make
copies available to others upon request. 

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

Sincerely yours,

Louis J.  Rodrigues
Director, Defense Acquisitions Issues


SCOPE AND METHODOLOGY
=========================================================== Appendix I

To evaluate the status of the test program, we gathered and evaluated
all F/A-18E/F flight test deficiency reports prepared as of December
4, 1997, by the F/A-18E/F Integrated Test Team.  We interviewed the
team's management, the F/A-18E/F contractors (Boeing Corporation, St. 
Louis, Missouri, and General Electric Corporation, Lynn,
Massachusetts), E/F program management, and the Navy's Operational
Test and Evaluation Force's test personnel about the implications of
documented program deficiencies on program cost, schedule, and
performance. 

To determine which deficiency areas the Navy and the Program Risk
Advisory Board determined to be risks to the F/A-18E/F program, we
obtained Program Risk Advisory Board risk assessments and interviewed
Board officials.  We interviewed Navy program management and
contractor officials about the implications of these risks on program
cost, schedule, and performance.  We discussed with the contractors
their identified F/A-18E/F engineering and manufacturing development
(EMD) and low-rate initial production program risks and the
implications on program cost, schedule, and performance.  We obtained
detailed information on the potential cost, schedule, and performance
impact of medium- to high-risk areas.  We interviewed Defense
Contract Management Command officials at Boeing and General Electric
Corporations about their role in on-site monitoring and evaluation of
the contractors' F/A-18E/F development efforts, E/F deficiencies, and
development risks facing the contractors.  We also obtained documents
in which the Command formally reported its findings to Navy
headquarters.  We interviewed Operational Test and Evaluation Force
officials about their role in evaluating the E/F and plans for
conducting future operational testing. 

To address F/A-18E/F development and procurement cost issues, we
interviewed program and contractor officials responsible for
financial matters and received briefings and answers to our questions
concerning program cost. 

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


NAVY SYSTEM FOR IDENTIFYING
DEFICIENCIES
========================================================== Appendix II

The Integrated Test Team categorizes deficiencies it identifies
during flight testing in either watch item, white sheet, or
deficiency reports.  Watch item reports document deficiencies that
require design or software changes that need management attention. 
White sheet reports document deficiencies for which no fix has been
identified, a fix has failed re-evaluation, or a fix impacts
significant test events.  Deficiency reports are submitted when an
identified fix fails a second retest or time is needed to develop a
plan of action. 

Initially, deficiencies are documented in watch item reports.  If not
corrected, they are sequentially escalated to a white sheet report
and finally to a deficiency report.  Therefore, the number of
deficiencies in each of these categories changes continually as new
deficiencies are identified, resolved, and moved among the
categories.  As of October 1997, the Integrated Test Team had
categorized 370 deficiencies in watch item reports, 88 deficiencies
in white sheet reports, and 30 deficiencies in deficiency reports. 

Deficiencies within each of these categories are also classified by
their severity.  The most severe of these classifications is a
deficiency in which there is a high probability that it will cause
aircraft control loss, equipment destruction, or injury to flight
test personnel. 


RISK ITEMS IN THE F/A-18E/F
PROGRAM
========================================================= Appendix III

Table III.1 shows the risks identified by Boeing in the F/A-18E/F EMD
and low-rate initial production (LRIP) program and by the Navy's
F/A-18E/F Program Risk Advisory Board (PRAB) at the September 1997
Program Management Review.  Blank cells indicate that Boeing or PRAB
did not identify these as risk items as of September 1997. 



                              Table III.1
                
                Risk Items Identified by Boeing and PRAB
                       for the F/A-18E/F Program

                                                      LRIP     Program
                                        EMD risk      risk        risk
Risk item                               (Boeing)  (Boeing)      (PRAB)
--------------------------------------  --------  --------  ----------
ALE-47 flare ingestion                       Low
ALE-50 towed decoy                        Medium                Medium
Airframe mounted accessory drive                       Low         Low
Advanced quality system implementation              Medium
Contractor quality assurance                                    Medium
 inspection transition
Aft center fuselage overheating                                 Medium
Environmental control system aft                       Low
 center fuselage overheating
Built-in-test false alarm rate               Low                Medium
Bleed cell 4 heat exchanger leak                    Medium      Medium
 detection system
Brake/auxiliary power unit accumulator              Medium      Medium
Canopy/windscreen                                   Medium
Windscreen coating                                     Low      Medium
Drift-free pressure transmitter set                 Medium      Medium
 sensors
Dry bay fire suppression                  Medium                Medium
Electronic warfare:
Antenna                                                         Medium
Antenna performance                       Medium
Antenna producibility (Boeing)                         Low
Antenna producibility (Northrop)          Medium
Proposed specification change notice                Medium
 impact (Northrop)
Engine full production qualification                            Medium
 schedule
Engine blade containment                                           Low
Engine exhaust smoke at LRIP                                    Medium
LRIP engine life                                                Medium
Engine bay fire extinguisher system                   High      Medium
Follow-on test and evaluation program                           Medium
 definition
Flight test interdependencies                Low
Flight test schedule changes                 Low
Flutter program slip                         Low                   Low
Fuel thermal management performance          Low
Thermal management                                              Medium
Ground station automated maintenance                   Low      Medium
 environment
Horizontal stabilator                        Low
Horizontal tail                                                    Low
Hydraulic reservoir bay supportability              Medium
Maintainability--actuals versus                                    Low
 projected
Increased test requirements                         Medium
LRIP displays availability                          Medium
Multipurpose color display/up-front                             Medium
 control display
New technology producibility and                      High        High
 performance
Onboard jammer                                      Medium      Medium
Operational test requirements versus                Medium
 expected performance
Operational test requirements versus                            Medium
 specification performance
Parts obsolescence                                  Medium        High
F/A-18E/F as F-14 replacement                       Medium
Store separation                          Medium                Medium
Technical evaluation reliability            High
 performance
Up/auto wing drop                         Medium                Medium
Vertical tail certification                         Medium      Medium
Water tightness                                        Low         Low
Engine mounts (spares)                    Medium                Medium
Noise and vibration                       Medium                Medium
======================================================================
Total number of risks listed                  16        22          33
----------------------------------------------------------------------
Source:  Boeing. 




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



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


The following are GAO's comments to DOD's letter dated February 9,
1998. 

GAO COMMENTS

1.  The first operational assessment, during which operational
testers flew the E/F aircraft, was conducted by the Operational Test
and Evaluation Force in November 1997.  The preliminary report on
that assessment, referred to as a Quick Look Report, identified 16
major deficiencies that must be corrected prior to the commencement
of Operational Test and Evaluation.  Further, the statements in our
report concerning the possibility that the E/F might not achieve an
operationally effective level of performance until identified
deficiencies are corrected were taken directly from documents and
reports prepared by the F/A-18E/F Integrated Test Team. 

2.  DOD's comments stated that our final report should compare the
consequences of not providing full funding for the second lot of LRIP
aircraft because this would result in a production break and involve
considerable costs.  The Navy has not delivered any of the 12
aircraft being built under the first LRIP contract.  The first
aircraft is scheduled to be delivered in 1999, or about 20 months
from the time of initial low-rate production decision, followed by
the production of 1 aircraft per month until all 12 aircraft are
completed.  This schedule gives the Navy time to reassess its
F/A-18E/F production plans.  This reassessment should consider the
cost and schedule tradeoffs of stretching out the production of the
first 12 aircraft compared with proceeding with the current
production schedule and accepting the potential for costly
modifications and retrofits that may be required to correct current
and future deficiencies. 

3.  We have revised the wording of our recommendation to clarify that
we were referring to delaying Operational Test and Evaluation until
corrections of deficiencies are incorporated in the aircraft that
will be used for the evaluation. 

4.  DOD's comments addressed the original test plan.  Our report
addressed the revised test plan.  The point we make in our report is
that the revised development test plan is focused on maintaining a
development test schedule that will not cause delays in beginning the
next phase of testing--Operational Test and Evaluation.  Maintaining
the test schedule will be a challenge because program documents state
that E/F management anticipates that the remainder of the flight test
program will experience an increase in testing requirements similar
to what DOD's comments stated has already occurred.  This issue was
addressed in an August 1997 flight test program review.  The result
of that review was that further increases in test requirements will
have to be offset with corresponding reductions in the baseline test
program. 

5.  We agree that finding discrepancies from predicted performance is
the purpose of flight testing.  However, inherent in the flight test
program should be quantifying the effect that the correction of
deficiencies will have on the E/F's ability to meet its Key
Performance Parameters.  That is the underlying basis for our
recommendation that no additional aircraft be produced until flight
testing has validated the Navy's predictions that the deficiencies
being identified by the Integrated Test Team are resolved. 

6.  Our report addresses the need to determine the operational
performance of the E/F after the correction of deficiencies have been
incorporated in the aircraft.  For example, the Blue Ribbon Panel
that studied the wing drop problem stated that proposed fixes are
expected to increase drag on the airplane, which could degrade the
aircraft's range.  This finding is significant because range is one
of the E/F's Key Performance Parameters and one of the key
improvements over the existing F/A-18C/D that the Navy cited in
justifying the procurement of the E/F.  Program management range
estimates in January 1998 show that the F/A-18E has a slight range
margin compared with F/A-18E/F threshold requirements (400 nautical
miles versus 390 nautical miles with 2 external fuel tanks and 450
nautical miles versus 430 nautical miles with 3 external fuel tanks,
respectively).  The F/A-18F, which is heavier and has less internal
fuel capacity than the E model, will have less range than the E
model.  The final operational performance of the E/F's range and
other Key Performance Parameters will not be known until all
deficiencies have been corrected and their impact on the aircraft has
been quantified. 

7.  We recognize that the March 1997 Operational Requirements
Document contains the Key Performance Parameters that will be
measured when evaluating the operational capabilities of the E/F. 
However, that document stipulates that the aerodynamic performance of
the E/F is required to be as good as Lot XII F/A-18C/Ds.  These C/D
aircraft were built in the late 1980s and early 1990s.  They are not
as operationally effective as the more currently procured C/Ds that
have been equipped with enhanced performance engines. 

8.  We reviewed the Operational Test and Evaluation Force's Quick
Look Report on the November 1997 operational assessment and could not
verify DOD's statement that the assessment found that the slight
reduction in acceleration and maneuvering energy of the E/F had no
significant tactical impact.  Therefore, we discussed DOD's statement
with Operational Test and Evaluation Force officials who conducted
the operational assessment.  According to those officials, the Quick
Look Report did not contain the cited conclusion.  The officials
cautioned, however, that they did not disagree with DOD's comment
because the operational impact of the E/F's slight reduction in
acceleration and maneuvering energy will depend on the specific
mission profile (e.g., altitude and speed) and aircraft configuration
(e.g., weapons being carried) that is being flown.  In some cases,
the C/D will out perform the E/F and vice versa.  The officials also
cautioned that its Quick Look Report was based on its preliminary
analysis of limited data and stated that its evaluation of E/F
operational capabilities might be modified after additional analyses
are conducted. 

9.  We discussed the Cost Analysis Improvement Group's March 1997
cost estimate with group members who prepared the estimate.  These
officials told us that the estimate was based on a total E/F buy of
1,000 aircraft and an annual peak production of 72 aircraft.  The
estimate was not based on the currently planned procurement of 548
aircraft and an annual peak production of 48 aircraft.  Additionally,
the officials told us that they did not factor in the increased
development and procurement costs of upgrading the back seat of the F
model to enable it to perform its assigned missions because the cost
of the upgrade has not been determined.  Furthermore, the March 1997
estimate, like the E/F program management estimate, used DOD-directed
annual inflation rates and not the higher aerospace industry
inflation rates that we discussed in our report.  All of these
factors understate the E/F cost estimates. 

10.  DOD's December 1996 Selected Acquisition Report (the most
currently available) shows that operation and support costs for a
12-aircraft E/F squadron will be about $3.2 million greater per year
than a similar-sized F/A-18C/D squadron.  This estimate represents an
increase of over $1 billion when extrapolated over the E/F fleet and
a 20- to 30-year service life.  Therefore, we disagree with DOD's
comment that lower E/F operation and support costs will lower the E/F
cost estimate. 

11.  In addition to the statements from the wing drop Blue Ribbon
Panel that DOD included in its comments, the Panel stated that more
flight test points are required in order to optimize the combination
of fixes and to confirm the fixes at all points in the flight
envelope.  The Panel stated that this flight test approach was
necessary because the underlying flow mechanisms of wing drop are not
well understood due to the lack of adequate wind tunnel test
techniques and practical computational procedures.  In addition, the
Panel stated that, although it is optimistic that an acceptable
combination of fixes can be found, some of the more promising fixes
will increase drag to some extent, may impact the observability
characteristics, and may alter the design loads on the wing and flap
components.  The Panel further stated that these impacts must be
quantified, and appropriate tradeoffs must be made to determine the
optimum configuration and to assess the performance impacts.  The
Panel's statements are consistent with the recommendations in our
report. 

12.  DOD's comment that the E/F program is committed to implementing
all required fixes on the aircraft prior to Operational Test and
Evaluation is based on DOD's confidence that predictive tools will
help resolve any radar cross section issues that might arise as a
result of incorporating solutions to deficiencies.  Our position is
that solutions will not be known until they are assessed during
flight testing rather than through simulation and modeling.  Our
position was substantiated by the Fiscal Year 1997 Annual Report of
the Director, Operational Test and Evaluation, dated February 1998. 
The report stated that a challenge to the operational test program
will be to design a strategy that will be able to determine if the
F/A-18E/F will be more survivable than the F/A-18C/D, which is a key
requirement of the E/F program.  According to the report, existing
models have many limitations in the ability to make this
determination, and efforts to improve these predictive tools will not
likely be mature in time to support the E/F program. 

13.  The engine fixes discussed in DOD's comments have not yet been
demonstrated and validated during flight testing, and DOD's statement
that the visible engine exhaust issue has been resolved for some time
is not supported by program documents.  In December 1997, the PRAB
listed engine smoke as a medium-risk item that, if not corrected,
will make the aircraft unacceptable for or jeopardize successful
Operational Test and Evaluation.  In addition, a December 1997
F/A-18E/F Propulsion and Power Program status report raised a number
of recent engine concerns.  The report stated that the major concern
is keeping the engine development on schedule.  Engine schedule slips
to date could affect delivery of engines for the LRIP aircraft. 
Also, the engine is experiencing potentially problematic weight
growth.  The engine has reached its specification weight, and
redesign changes to address a blade containment failure will cause
the engine to exceed its specification weight.  The program office
has initiated a weight reduction study to identify ways to reduce
engine weight by more than 56 pounds.  In addition, the status report
raised concerns about the engines inability to accept the growth
necessary to accommodate the electronically scanned array radar that
is a pre-planned product improvement for the E/F.  According to the
status report, a conscious decision was made to not design the engine
for additional growth capability to avoid a major redesign of the
back end of the aircraft to relocate the vertical tail.  Taken in
combination, these factors portray a less optimistic engine situation
than indicated in DOD's comments. 

14.  We discussed DOD's statements with officials in the F/A-18E/F
program office.  The officials told us that the modification of the
bomb release interval has not yet been flight tested.  Also, weapon
separation test data show that only about 21-percent of the testing
has been done.  It will not be known whether the weapon separation
problem has been corrected until the testing has been completed. 

15.  We have revised our report to incorporate this information. 

16.  DOD's comments discussed components testing.  However, the
vertical tail cannot be certified until the completion of tests of
the tail attached to the aircraft.  These tests are not scheduled to
be completed until late 1999. 

17.  In a January 1998 program status report, program funding was
listed as one of the major challenges facing the E/F program.  The
report stated that the EMD program is still funded at the "nothing
goes wrong" level.  Whether the EMD program will be completed within
the congressional cost cap is not currently known. 


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V

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

Steven F.  Kuhta
Jerry W.  Clark
William E.  Petrick, Jr. 

KANSAS CITY FIELD OFFICE

Lawrence A.  Dandridge
Lillian I.  Slodkowski


*** End of document. ***