Defense Acquisitions: Comanche Program Cost, Schedule, and Performance
Status (Letter Report, 08/24/1999, GAO/NSIAD-99-146).
Pursuant to a congressional request, GAO reviewed the Army's Comanche
Helicopter Program, focusing on: (1) the risks in the Army's
restructured plans for developing and testing the Comanche; (2) the
changes in the Comanche's performance capabilities and requirements; (3)
cost estimates for development; and (4) the Comanche's impact on the
Army's overall aviation modernization efforts.
GAO noted that: (1) the Comanche's restructured program contains
significant risks of cost overruns, schedule delays, and degraded
performance because it would: (a) begin the engineering and
manufacturing development phase before some key mission equipment
technologies have matured and have been integrated into the flight-test
aircraft; (b) compress the flight-test schedule, increasing the amount
of concurrent developmental and operational testing; and (c) begin
production before initial operational testing starts, resulting in
concurrency between development testing and initial production; (2) the
program is proceeding to the next development phase with high levels of
uncertainty; (3) successful commercial firms generally do not proceed
into product development and production with such high levels of
uncertainty; (4) the Army is proposing changes to the aircraft that
would adversely impact some of the Comanche's planned performance
capabilities; (5) while their exact impact is unknown, these changes
will increase the risk that the Comanche's planned performance goals
will not be achieved; (6) the Army acknowledges that it will not achieve
its goal of executing the Comanche's restructured development program
within its funding estimate of about $4.4 billion for fiscal years 1999
through 2006; (7) an analysis by the Department of Defense's Cost
Analysis Improvement Group in November 1998 found that total program
costs would be about $150 million (3.4 percent) higher than the Army's
estimate; (8) the Group also believes that insufficient near-term
funding could lead to a 6-12 month schedule delay, which could add
between $275 million and $425 million to the program's overall
development costs; (9) further, the Army's accelerated technology
development and testing plans increase the risk of additional schedule
delays and cost increases; (10) the Army continues to single out the
Comanche as the centerpiece of its aviation modernization plan; (11) the
Comanche program would absorb an increasingly larger share of the Army's
total aviation budget and would account for about 64 percent of the
budget in fiscal year 2008; (12) according to the Army, its
modernization plan provides the best balance between capabilities and
resources; (13) the plan recognizes that because of funding constraints,
some program modernization requirements must be traded off; and (14) as
a result, older helicopters will have to be retained longer than
originally planned, some helicopter upgrades will be foregone, and lower
quantities of some helicopters will have to be procured.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-99-146
TITLE: Defense Acquisitions: Comanche Program Cost, Schedule, and
Performance Status
DATE: 08/24/1999
SUBJECT: Helicopters
Military aircraft
Cost analysis
Army procurement
Concurrency
Military cost control
Future budget projections
Operational testing
Defense capabilities
Weapons systems
IDENTIFIER: Comanche Helicopter
AH-1 Cobra Helicopter
OH-6 Cayuse Helicopter
OH-58 Kiowa Helicopter
UH-1 Iroquois Helicopter
Army Comanche Helicopter Program
Longbow Apache Helicopter
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. This text was extracted from a PDF file. **
** Delineations within the text indicating chapter titles, **
** headings, and bullets have not been preserved, and in some **
** cases heading text has been incorrectly merged into **
** body text in the adjacent column. Graphic images have **
** not been reproduced, but figure captions are included. **
** Tables are included, but column deliniations have not been **
** preserved. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
ns99146 GAO United States General Accounting Office
Report to the Honorable Peter A. DeFazio, House of Representatives
August 1999 DEFENSE ACQUISITIONS
Comanche Program Cost, Schedule, and Performance Status
GAO/NSIAD-99-146
GAO/NSIAD-99-146
Page 1 GAO/NSIAD-99-146 Defense Acquisition United States General
Accounting Office
Washington, D. C. 20548 National Security and International
Affairs Division
B-280314 Letter August 24, 1999 The Honorable Peter A. DeFazio
House of Representatives
Dear Mr. DeFazio: The Comanche helicopter program, with a total
projected cost of $48 billion, is the Army's largest aviation
acquisition program. It began in 1983 as an effort to replace the
Army's fleet of aging light utility,
reconnaissance, and attack helicopters. Since then, the program
has been restructured five times, and it is still in development.
The first four times, it was restructured because of concerns over
program affordability and changing requirements. As a result,
planned procurement quantities were
reduced, development was delayed, and unit costs increased. In
July 1998, the Army restructured the program for the fifth time.
As you requested, we reviewed the status of the Comanche program.
Specifically, we assessed (1) risks in the Army's restructured
plans for developing and testing the Comanche, (2) changes in the
Comanche's performance capabilities and requirements, (3) current
cost estimates for development, and (4) the Comanche's impact on
the Army's overall aviation
modernization efforts. Results in Brief The Comanche's
restructured program contains significant risks 1 of cost
overruns, schedule delays, and degraded performance because it
would (1) begin the engineering and manufacturing development
phase before some key mission equipment technologies have matured
and have been
integrated into the flight- test aircraft; (2) compress the
flight- test schedule, increasing the amount of concurrent
developmental and operational testing; and (3) begin initial
production before initial operational testing starts, resulting in
concurrency between development testing and initial production.
The program is proceeding to the next development phase with high
levels of uncertainty. Successful commercial firms generally do
1 Risk is a measure of the probability that a planned objective
will not be met and of the consequences of failing to achieve that
outcome.
Lett er
B-280314 Page 2 GAO/NSIAD-99-146 Defense Acquisition
not proceed into product development and production with such high
levels of uncertainty. 2
The Army is proposing changes to the aircraft that would adversely
impact some of the Comanche's planned performance capabilities.
While their exact impact is unknown, these changes will increase
the risk that the Comanche's planned performance goals will not be
achieved. For example,
to meet increased range requirements for certain missions, the
Army plans to use external fuel tanks that would likely reduce the
helicopter's planned stealth, cruising speed, maneuverability, and
other performance capabilities. Plans to add the Longbow fire
control radar system would provide enhanced target acquisition
capabilities but would add weight and drag that would reduce other
performance capabilities.
The Army acknowledges that it will not achieve its goal of
executing the Comanche's restructured development program within
the planned funding estimate of about $4. 4 billion for fiscal
years 1999 through 2006. An analysis by the Department of
Defense's (DOD) Cost Analysis Improvement Group in November 1998,
found that total program costs would be about
$150 million (3. 4 percent) higher than the Army's current
estimate. The Group also believes that insufficient near- term
funding could lead to a 6- to 12- month schedule delay, which
could add between $275 million and $425 million to the program's
overall development costs. Further, the Army's accelerated
technology development and testing plans increase the risk of
additional schedule delays and cost increases. The Army continues
to single out the Comanche as the centerpiece of its aviation
modernization plan. The Comanche program, as currently
planned, would absorb an increasingly larger share of the Army's
total aviation budget and would account for about 64 percent of
the budget in fiscal year 2008. According to the Army, its
modernization plan provides the best balance between capabilities
and resources. The plan recognizes
that because of funding constraints, some program modernization
requirements must be traded off. As a result, older helicopters
will have to be retained longer than originally planned, some
helicopter upgrades will be foregone, and lower quantities of some
helicopters will have to be procured.
2 Defense Acquisition: Best Commercial Practices Can Improve
Program Outcomes (GAO/T-NSIAD-99-116, Mar. 17, 1999).
Lett er
B-280314 Page 3 GAO/NSIAD-99-146 Defense Acquisition
Given the risks and uncertainties associated with the Comanche
development program, this report recommends that the Secretary of
Defense reevaluate the Army's highly concurrent restructured plan
that
accelerates the milestone II decision date for entering the
engineering and manufacturing development phase. It also
recommends an evaluation of the cost, schedule, and performance
impacts resulting from changes in operational requirements and
weight growth. In commenting on this report, DOD partially
concurred with our recommendations. DOD stated that the Comanche
overarching integrated product team considers the issues raised in
our report as part of its acquisition oversight and review process
and, therefore, no additional evaluations are necessary to satisfy
our recommendations. According to DOD, the Comanche program
manager's approach to the management of risk and concurrency is
considered prudent and appropriate. We are concerned that DOD's
acquisition oversight and review process continues to approve
program
development and production plans that contain significant cost and
schedule risks. Accordingly, as DOD undertakes its reviews of the
program, we plan to continue monitoring the results of the
reviews.
Background The Comanche helicopter program began in 1983 with the
aim of building a family of high- technology, low- cost aircraft
that would replace the Army's light helicopter fleet of
approximately 5, 000 aircraft, including the AH- 1 Cobra, OH- 6
Cayuse, OH- 58 Kiowa, and UH- 1 Iroquois (Huey). The Army
subsequently decided to develop only a single Comanche aircraft
capable of conducting either armed reconnaissance or attack
missions. Critical to achieving the Comanche's desired
capabilities is the successful development of advanced
technologies, especially for the mission equipment package, which
accounts for over half of the aircraft's cost. The reconnaissance
portion of the package includes the target acquisition system, the
night vision piloting system, the helmet- mounted display, and the
integrated communication and navigation systems. The attack
portion includes the Longbow radar, survivability and early
warning equipment, the Doppler navigation system, external stores,
and weapons.
The Comanche is designed to have capabilities that overmatch an
enemy. It will have weapon bays, landing gear, and a 20- mm gun
that all retract into the fuselage and will be capable of carrying
Longbow Hellfire and Stinger missiles, and Hydra rockets
internally or externally. The aircraft is expected to have
improved speed and agility; aircrew visibility; and reliability,
availability, and maintainability over the current reconnaissance
B-280314 Page 4 GAO/NSIAD-99-146 Defense Acquisition
and attack fleet. It is also designed for low observability
(stealth) and is expected to be capable of deploying over long
ranges without refueling.
The program entered the demonstration and validation phase 3 of
development in June 1988. Between 1988 and 1998, the program was
restructured five times, the development schedule was extended
from 1996 to 2006, and planned quantities were reduced from 2, 096
to 1,292. Under the latest restructuring, in July 1998, the Army
decided to retain the 2 prototype aircraft already built but
acquire 14 rather than 16 aircraft. The two prototypes and six
preproduction aircraft would be used for developmental testing and
eight preproduction aircraft would be used for initial operational
testing and evaluation. The Army plan also accelerated the start
of the engineering and manufacturing development phase 19 months
to March 2000. Initial operational testing and evaluation of the
aircraft is now scheduled for February through August 2006, and
delivery
of the low- rate initial production aircraft is to begin in
January 2007. The full- rate production decision and initial
operational capability deadline of December 2006 have not been
changed. The Army's planned cost estimate for completing the
restricted Comanche developmental program was about $4. 4 billion.
The Army's Restructured Plan Contains Significant
Risks Under the Army's latest restructured development plan, the
Comanche
program would advance to the engineering and manufacturing
development phase before some key mission equipment technologies
have matured and are integrated into the aircraft and tested.
Additionally, the
Army's plan would (1) compress the flight- test schedule into the
last 3 years of development, increasing concurrent developmental
and operational testing and (2) begin initial production before
initial operational testing is started, increasing concurrency
between testing and production. 4 As a result, the restructured
program contains significant risk that some
technologies may not be mature enough and may not be integrated
and tested prior to the scheduled start of low- rate initial
production. Testing could identify design changes that may be
required after production has started, leading to costly
retrofits.
3 This phase is now called the program definition and risk
reduction phase. 4 Developmental testing verifies that design,
technology, and technical performance of the helicopter will
support operational testing. A Combined Test Team (of government
and contractor personnel) is responsible for Comanche
developmental testing. Operational testing, conducted by the user
of the
weapon system, assesses the system's performance in an operational
environment.
B-280314 Page 5 GAO/NSIAD-99-146 Defense Acquisition
Mission Equipment Technology Development Risk
The risk that the technologies required for the Comanche's mission
equipment package and associated avionics would not mature as
planned has been a major concern since the program's inception. In
an effort to reduce risk, the Army's previous development plans
called for the mission
equipment package to be integrated and tested on a prototype
helicopter prior to the milestone II decision 5 to enter the
engineering and manufacturing development phase. Under the current
restructured program, the Army plans to enter the engineering and
manufacturing development phase 19 months earlier than planned,
while delaying integration and flight testing of the mission
equipment package. Therefore,
the reconnaissance mission equipment package will not be
integrated and flight tested on a prototype helicopter prior to
the milestone II decision. As a result, decisionmakers will not
have important test results needed for assessing the state of the
Comanche's technologies for the milestone II decision.
In our recent work in the defense acquisition reform area, we
found a number of lessons that can be learned from best commercial
practices and applied to DOD's major system acquisitions. One in
particular is that commercial firms generally obtain a higher
level of knowledge before they transition from technology
development to product development and, later, to production. The
restructured program will squeeze more work into the Comanche's
engineering and manufacturing development phase and then reduce
the amount of time available for the remainder of the work. This
contrasts with best practices of leading commercial firms, which
learn more about a product's technology, design, and producibility
much earlier than DOD does in the acquisition programs we
reviewed. Such knowledge reduces the risks of cost overruns,
schedule delays, and performance
shortfalls. One of the purposes of the program definition and risk
reduction phase of development is to demonstrate that technology
risks are well in hand before the next decision point milestone
II. Some reconnaissance mission equipment technologies for the
Comanche helicopter remain immature and untested. According to
Army assessments, the helmet- mounted display and two key elements
of the electro- optical sensor
system the integrated communication, navigation, and
identification 5 The purpose of the milestone II decision is to
determine whether the results of the program definition and risk
reduction phase warrant entry into the engineering and
manufacturing development phase, which validates the production
process and demonstrates system capability through testing.
B-280314 Page 6 GAO/NSIAD-99-146 Defense Acquisition
avionics and the forward- looking infrared have a moderate to high
developmental risk. None of these technologies has been tested on
a Comanche prototype. For example, the technology for the
Comanche's integrated communication, navigation, and
identification avionics
subsystem, which has been under development since 1981, has been
demonstrated only in the laboratory, and flight- test hardware
will not be flown on the Comanche preproduction aircraft until
late 2003, over 3- 1/ 2
years after the engineering and manufacturing development phase is
scheduled to begin. Flight tests of a production version of the
subsystem are not scheduled until 2004. In November 1998, DOD's
Cost Analysis Improvement Group noted that mission equipment
package development was relatively immature. According to the
Group, there has not been any MEP [mission equipment package]
flight testing to date and [there are] several technological
challenges remaining. Compared with some leading commercial
products, the Comanche, like many DOD programs, is proceeding with
less available
knowledge about key factors of product development. This increases
the risk that costs may be higher than planned, product
development may take longer, and performance may be lower than
planned.
Mission Equipment Integration Risks Throughout the Comanche's
development, the Army and others have emphasized that there are
significant risks associated with the integration
of mission equipment subsystems into the aircraft. 6 In its 1994
independent review, a panel convened by the Institute for Defense
Analyses identified integration of the mission equipment package
as the most challenging aspect of the mission equipment package.
The review stressed the importance of sufficient testing and user
involvement because integration must be performed properly in
order to achieve the desired combat effectiveness. 7 Although some
system integration is scheduled to start in
late 2001, some key elements of the mission equipment package will
not be fully integrated, tested, and demonstrated until much
later. For example, the Comanche is not scheduled to complete a
full demonstration of its integrated mission equipment package,
including the fire control radar and
6 Comanche system integration involves the integration of its
weapon systems and battlefield information systems into a total
weapon system that provides maximum effectiveness with minimum
crew workload. 7 The review panel made these observations about
the Army's efforts to streamline the Comanche's development by
combining the first two phases of development into one.
B-280314 Page 7 GAO/NSIAD-99-146 Defense Acquisition
external fuel and armament management system, on a preproduction
aircraft until December 2006, about 4 months after completion of
initial operational testing and evaluation. The analyses of this
demonstration may
not be available in time for consideration when the full- rate
production decision is made in December 2006.
Compressed and Concurrent Test Schedule Increases Program Risk
The restructured test schedule increases the risk that the
Comanche helicopter will not be adequately tested prior to the
full- rate production decision. Under the restructured program,
the Comanche's initial operational capability date is still
scheduled for December 2006, even though the preproduction test
aircraft will be delivered 19 months later
than previously planned. This results in the flight- test schedule
being compressed into the last 3 years of development, which
increases the amount of concurrency between developmental and
operational testing and between testing and initial production.
Such high concurrency increases the risk of costly design changes
and retrofits.
Compressed Test Schedule The first Comanche prototype was
scheduled to complete 174 flight- test hours between January 4,
1996, and January 9, 1999. However, only 128 flight- test hours
were completed-- an average of 3. 5 hours per month. According to
a program official, the Comanche flight- test program is behind
schedule because of periodic developmental problems and funding
constraints. The first preproduction aircraft for testing is
scheduled for delivery in
October 2003, 19 months later than previously planned. By
retaining the December 2006 initial operational capability date,
the 19- month delay in acquiring test aircraft will compress the
majority of the Comanche's flight- test schedule into the last 3
years of development, shortening the available time for completing
all test events before the full- rate production
decision. As a result, the restructured program calls for an
aggressive flight- test schedule, flying each of the 14
preproduction aircraft 17 hours a month. According to a consultant
who reviewed the Comanche program for DOD, helicopter test
programs typically achieve 10 to 12 flight- test hours per month.
In its initial assessment of the proposed restructured program,
DOD's Cost Analysis Improvement Group noted that (1) the delay in
acquiring test aircraft increases the risk that the test program
will not be completed on time with all necessary test points
achieved and (2) any delays in the delivery of mission equipment
package subsystems would
directly impact flight- test progress.
B-280314 Page 8 GAO/NSIAD-99-146 Defense Acquisition
Concurrent Testing and Production To achieve program test
objectives within the compressed time frame, the
Army restructured the Comanche test program in such a way that it
will increase the amount of concurrent developmental and
operational testing and concurrency between testing and initial
production. Developmental testing is scheduled to run to December
2006, while the initial operational test and evaluation is
scheduled to start in February 2006 and to be completed in August
2006. The Army plans to conduct initial operational testing with
eight of the preproduction aircraft. It will award the low- rate
initial production contract as early as February 2005, and the
first low- rate initial production aircraft will not be delivered
until January 2007. Therefore, the Army will buy low- rate initial
production aircraft about a year before the initial operational
test and evaluation starts and deliver these aircraft about
5 months after it is completed. According to DOD, a program has
high concurrency when it proceeds to low- rate initial production
before significant initial operational testing and evaluation is
completed. DOD guidance states that such programs typically have a
higher risk of production items having to be retrofitted to make
them work properly and of system design not being thoroughly
tested. In its assessment of the
Comanche preproduction program, DOD's Cost Analysis Improvement
Group reported that the revised program schedule increases the
level of concurrency and limits opportunities to make
configuration changes based
on results of the flight- test program. We previously reported
that weapon systems that enter initial production before
completing adequate testing often required significant and
sometimes costly modifications to achieve satisfactory
performance. 8 Modifications Increase
Risk That Comanche Will Not Meet Performance Requirements
The Comanche's performance requirements continue to evolve. To
meet newly established mission requirements, the Army plans to
make modifications that will adversely impact some of the
Comanche's planned performance capabilities. These capabilities,
which distinguish the Comanche from other Army helicopters,
include its low observability (stealth), lethality, high cruising
speed, and maneuverability. The extent to which modifications
would reduce operational performance is not yet known. We have
found that successful commercial firms do not proceed to
product development until there is near certainty that their
product design 8 Weapons Acquisition: Low- Rate Initial Production
Used to Buy Weapon Systems Prematurely (GAO/NSIAD-95-18, Nov. 21,
1994).
B-280314 Page 9 GAO/NSIAD-99-146 Defense Acquisition
will meet performance requirements and they have gone a long way
to ensure that the item can be produced. The Army's draft update
of the Comanche's operational requirements document includes two
new extended range mission scenarios that are beyond the range of
the Comanche's currently planned internal fuel capability. To meet
new range requirements, the Army has decided to add auxiliary fuel
tanks, either externally or in the internal weapon bays when the
Comanche is used in those particular mission scenarios. While both
solutions would reduce the Comanche's planned operational
performance, program officials could not tell us to what extent
performance would be impacted. Adding wings with external fuel
tanks would increase weight and drag, decrease cruise speed,
impact aircraft maneuverability, and lower some of its planned
stealth characteristics. Furthermore, placing fuel tanks
in one or both weapon bays would, according to a program official,
preclude carrying most if not all the weapons in the bays. This
would maintain stealth characteristics but would reduce or
eliminate the Comanche's internal weapon load and therefore its
lethality.
A major element of the restructured program is the accelerated
development and integration of a smaller and lighter electronic
version of the Longbow fire control radar. The radar is expected
to provide enhanced
target acquisition capabilities, but its size, shape, and weight
would increase the Comanche's radar signature and drag, reducing
its stealth, range, and maneuverability. Although the Army has not
yet decided on the shape of the radar, it expects the radar would
reduce the Comanche's cruising speed by about 11 knots. Program
office officials could not tell us to what extent adding the
radar, wings, and external fuel tanks would impact the Comanche's
overall performance.
Other weight increases would further reduce the Comanche
performance capabilities, such as range, vertical rate of climb,
endurance, cruising speed, maneuverability, and agility. Because
it recently added 132 pounds of additional equipment to meet new
operational requirements, the Army raised the Comanche's empty
weight design goal from 8,690 to 8,822 pounds and lowered the
required range for deploying without refueling from 1,260 to 1,206
nautical miles.
The Army currently has a weight reduction program in place for the
Comanche. However, the Comanche Combined Test Team, which was set
up to manage testing under the development program, noted in
August 1998 that implementing changes to the aircraft to address
problems
B-280314 Page 10 GAO/NSIAD-99-146 Defense Acquisition
discovered during developmental testing would make it very
difficult not to increase the aircraft's weight. Because of its
continuing concern over weight growth, the program office is now
planning to modify the Comanche's rotor to provide more lift
capability.
Restructured Program Will Not Meet Funding Objective
According to the Cost Analysis Improvement Group's evaluation of
the restructured program's planned cost estimates, the Army will
not meet the Comanche program's developmental funding objective.
The Army acknowledges that it will not achieve its goal of
executing the Comanche's restructured development program within
the planned funding estimate of
about $4. 4 billion for fiscal years 1999 through 2006. The Army's
Cost and Economic Analysis Center, which determines the Army's
official cost position, concluded that allowing for inflation, the
program office's $4. 4- billion estimate was reasonable. But DOD's
Cost Analysis Improvement Group concluded that the estimate was
generally
optimistic and that the restructured program would require $4.55
billion, about $150 million (3.4 percent) more then the program
office estimated. The Group also said that if funding was not
increased, a 6- to 12- month program delay would occur, adding
between $275 million and $425 million to program costs.
The Group noted significant differences between its estimate of
Comanche funding requirements and the Army's for fiscal year 2000
and in four of the six following fiscal years. For example, the
Army estimated funding requirements for fiscal year 2000 and 2001
at $433 million and $574 million, respectively. The Group
estimated these requirements at $484 million and
$657 million, or $134 million more for the 2 years. The Group
believes that more funding for the Comanche's airframe and mission
equipment package development is needed in fiscal years 2000 and
2001, before fabrication and assembly. The program office,
however, believes the funds could be made available after
fabrication and assembly and that the total shortfall may
only be $109 million. Since the Group made its assessment in 1998,
DOD has reduced proposed funding for the development program to
reflect inflation rate decreases. According to the program office,
the reduction aggravates the funding shortfall and, as a result,
its assessment of the cost risk has increased from low to
moderate. At the time of our review, the program office noted that
the funding reduction could result in one preproduction aircraft
being eliminated, deliveries of other aircraft being delayed, and
the initial
B-280314 Page 11 GAO/NSIAD-99-146 Defense Acquisition
operational capability date being delayed. The program office has
since signed a Memorandum of Understanding with the Comanche
developers defining the engineering and manufacturing development
phase. It will include the design and fabrication of 13 rather
than 14 preproduction
aircraft. While this may decrease cost risks, it will further
increase the risks that the flight- test program will not be
completed on time with all necessary test points achieved. The
program office also plans to increase
the average monthly flight- test hours from 17 to 18 per aircraft
and further delay delivery and flight testing of the preproduction
aircraft by several more months.
Impact of Comanche on Army's Aviation Modernization The Army
continues to single out the Comanche as the centerpiece of its
aviation modernization strategy. As development and production
costs
increase, the Comanche's share of the Army's overall aviation
budget also increases. In 1994, we reported that the Army had
chosen to use most of its available aircraft modernization
resources to procure the Comanche helicopter and upgrade the
Apache, thus forcing the Army to retain aging utility and cargo
aircraft. 9 According to the 1998 Army aviation modernization
plan, the Comanche is still the centerpiece, and older,
obsolescing aircraft will remain in the inventory into the
foreseeable future.
The plan points out that continued pressures on the defense budget
have forced the Army to trade off aviation modernization
requirements . . . and consider reduced aircraft resourcing
strategies. According to program office officials, the plan was
developed as the best balance between capabilities and resources,
and while it is not the preferred approach, it is the optimum one
based on available resources. In December 1998, the
program office estimated that while the Army's aviation budget
would fluctuate from fiscal year 1999 through 2008, the Comanche's
share of the budget would consistently increase. For example,
while the Army aviation budget was estimated to decrease from $2
billion to $1.9 billion between fiscal year 1999 and 2000, the
Comanche's share of the budget would increase from $368 million to
$433 million or from 19 percent to 23 percent
of the Army's aviation budget. The Comanche's share of the total
projected Army aviation budget of $3. 3 billion is expected to
rise to about 64 percent in fiscal year 2008, when its annual
production cost would be over
9 Army Aviation: Modernization Strategy Needs to Be Reassessed
(GAO/NSIAD-95-9, Nov. 24, 1994).
B-280314 Page 12 GAO/NSIAD-99-146 Defense Acquisition
$2 billion. Various Army aviation officials provided the following
examples of how the Comanche's funding requirements have impacted
modernization efforts in other Army aviation programs. The Army
decided to reduce the number of advanced Apache Longbow
helicopters it plans to upgrade from 758 to 530 and end that
program earlier than planned because it could not afford to have a
second production line in progress when Comanche initial
production starts in 2005.
The Army will not achieve its utility helicopter requirements
because of funding imbalances in the Army's 1998 aviation
modernization plan. The plan identified an unfunded requirement
for an additional 90 Black Hawk helicopters to fill shortages in
the Army's utility helicopter fleet. But because of its inability
to fund its requirement for new utility
helicopters, the Army has decided to keep the Huey helicopter in
service until at least fiscal year 2020. In its report
accompanying the Fiscal Year 1998 National Defense Authorization
Bill, the Senate Armed Services Committee noted that utility
helicopter requirements were identified but not resourced in a
balanced manner and cited the
readiness of the National Guard utility fleet as a serious
concern. In 1994, we reported that as a consequence of its
strategy to develop the Comanche, the Army had decided against
funding other aviation program requirements, including
modernization of the Huey light utility helicopter. Since then,
the Army has had to ground its Huey helicopters
on two occasions because of safety concerns. As a stop gap
measure until the Comanche is fielded, the Army procured
a limited number of Kiowa Warrior helicopters to provide
reconnaissance capability until fiscal year 2009, when the Army
planned to transfer the Kiowa Warrior to the reserves. Although
the Kiowa Warrior has operational deficiencies, the Army now plans
to retain it in the active forces until fiscal year 2022 because
there will not be enough
Comanche helicopters to replace them. According to the 1998 Army
aviation modernization plan, long- term retention of these
aircraft will require safety and sustainment upgrades to keep
these aircraft viable. The Army estimates that a minimum of 190
aircraft will require additional refurbishment beyond what is
currently planned. A Kiowa Warrior program office official said
that the Army has not requested funding for the Kiowa Warrior
since 1988, and does not plan to request funding for future
refurbishment upgrades for the 190 aircraft, which are
estimated to cost about $1.7 billion.
B-280314 Page 13 GAO/NSIAD-99-146 Defense Acquisition
Conclusions The Comanche's restructured program continues to
contain significant risks of cost overruns, schedule delays, and
reduced performance. The
program is proceeding into product development without some key
technologies being mature and prior to critical mission equipment
and component capabilities being integrated and tested in the
aircraft. The Army is proposing changes to the aircraft that will
increase, to an unknown degree, the risk that some key performance
capabilities will not be met. It is also proceeding into product
development when uncertainties and risks are high and not
consistent with best practices of commercial firms. To pay
for the program, the Army has reduced the number of advanced
Apache Longbow helicopters it plans to modify and is buying and
upgrading fewer other replacement aircraft. This will force the
Army to retain older aircraft for a longer period of time.
Recommendations We recommend that the Secretary of Defense
reevaluate the Army's decisions to (1) accelerate the Comanche
program's milestone II decision and (2) implement a development
program with high concurrency. The reevaluation should demonstrate
how the Army specifically plans to:
minimize the risk associated with the technology being developed
for inclusion in the mission equipment package prior to the
milestone II decision and
ensure that major mission equipment package systems can be
successfully integrated and tested in the Comanche in order to
meet developmental and operational test schedule requirements.
We also recommend that the Secretary of Defense require the
Secretary of the Army, before the milestone II decision, to
evaluate and report on the extent to which increased operational
requirements and weight growth would impact key performance
capabilities, such as stealth and maneuverability, and how the
Army intends to manage the program's cost and schedule to
accommodate any adverse impacts, if found.
Agency Comments and Our Evaluation
DOD partially concurred with our first recommendation calling for
a Secretary of Defense reevaluation of the Army's plans. It noted
that it exercises oversight of the Comanche program through the
DOD acquisition process. Further, it considered the acceleration
of the milestone II decision, as well as the program manager's
approach to the management of risk and concurrency, to be prudent
and appropriate at this point in
B-280314 Page 14 GAO/NSIAD-99-146 Defense Acquisition
program development. Specifically, DOD noted that integrated
product teams review the issues raised in our first recommendation
on a recurring basis and that the overarching integrated product
team will revisit them again at least two more times before the
milestone II decision. DOD believes the overarching product team
reviews comply with our recommendations.
DOD also partially concurred with our second recommendation
calling for an evaluation and report, prior to the milestone II
decision, on the impact of increased operational requirements and
weight growth on the program's cost, schedule, and performance.
DOD stated that the Army has been
directed to ensure that upgraded operational requirements are
reviewed by the Joint Requirements Oversight Council prior to the
milestone II decision. DOD further stated that the program's
overarching integrated product team will consider all the issues
mentioned in the recommendation prior to the milestone II decision
and that no additional report is required to satisfy the
recommendation.
We recognize that integrated product teams and overarching
integrated product teams are an integral part of DOD's acquisition
oversight and review process. However, we are concerned that the
oversight and review process continues to accept program plans
that contain significant risks
that are not generally accepted by leading commercial firms.
Accordingly, as DOD undertakes its reviews of the program, we plan
to continue monitoring the results of these reviews.
DOD's comments are reprinted in appendix I. DOD also provided some
technical comments, which we incorporated in the report where
appropriate.
Scope and Methodology To assess the risk in the Army's plans for
developing and testing the
Comanche, we examined and compared program schedules, acquisition
plans, and acquisition strategies and discussed potential changes
with Comanche program officials. We reviewed flight- test plans
schedules and
reports and discussed key issues with program officials. We
reviewed program documents related to risk and analyzed program
risks and development problems by comparing them with various test
schedules and plans. To assess changes in performance capabilities
and requirements, we analyzed actual and projected performance and
compared it with the
B-280314 Page 15 GAO/NSIAD-99-146 Defense Acquisition
Comanche's operational requirements, system specifications, and
projected mission scenarios. We also obtained and evaluated Army
documents describing the way the Army plans to operate in the
future. We compared the Comanche's planned capabilities against
the operational plans identified in those documents.
To assess the status of current cost estimates for the Comanche,
we reviewed program documentation, interviewed officials, and
performed analyses of program costs. Our analyses focused on the
impact of
restructuring decisions on the Comanche program. To assess the
Comanche's impact on the Army's overall aviation modernization
efforts, we reviewed program documents, interviewed officials, and
performed analyses of the program's impact on the Army's overall
aviation plans. Our analyses focused on the impact of the
Comanche's costs on the Army's ability to procure other aircraft
and incorporate technological upgrades in its helicopter fleet.
In performing our work, we obtained documents and interviewed
officials from the Offices of the Secretary of Defense and of the
Army, Washington, D. C.; the U. S. Army Aviation and Missile
Command, Huntsville, Alabama; the Training and Doctrine Command
and the Aviation Technical Test
Center, Fort Rucker, Alabama; the Operational Test and Evaluation
Command, Alexandria, Virginia; the Evaluation Analysis Center,
Aberdeen, Maryland; the Boeing- Sikorsky Joint Project Office,
Philadelphia, Pennsylvania; and the Longbow- Limited Corporation,
Baltimore, Maryland.
We conducted our review from April 1998 to May 1999 in accordance
with generally accepted government auditing standards. As agreed
with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30
days after its issue date. At that time, we will send copies of
this report to Senator John W. Warner, Chairman, and Senator Carl
Levin, Ranking Minority Member, Senate Committee on Armed
Services; Representative Floyd D. Spence, Chairman, and
Representative Ike Skelton, Ranking Minority Member, House
Committee on Armed Services; Senator Ted Stevens, Chairman, and
Senator Robert C. Byrd, Ranking Minority Member, Senate Committee
on Appropriations; and Representative C. W. Bill Young, Chairman,
and Representative David R. Obey, Ranking Minority Member, House
Committee on Appropriations. We are also sending copies of this
report to the Honorable William Cohen, Secretary of Defense; the
Honorable Louis
B-280314 Page 16 GAO/NSIAD-99-146 Defense Acquisition
Caldera, Secretary of the Army; and the Honorable Jacob Lew,
Director, Office of Management and Budget. Copies of this report
will be made available to others on request.
If you have any questions regarding this report, please contact me
on (202) 512- 4841. GAO contacts and key contributors to this
report are listed in appendix II.
Sincerely yours, Louis J. Rodrigues Director, Defense Acquisitions
Issues
Lett er
Page 17 GAO/NSIAD-99-146 Defense Acquisition
Page 18 GAO/NSIAD-99-146 Defense Acqusition
Appendix I Comments From the Department of Defense Appendi x I
Appendix I Comments From the Department of Defense
Page 19 GAO/NSIAD-99-146 Defense Acqusition Let t er
See pp. 13 and 14. See pp. 13 and 14.
Page 20 GAO/NSIAD-99-146 Defense Acqusition
Appendix II GAO Contacts and Staff Acknowledgments Appendi x I I
GAO Contacts James F. Wiggins, 202/ 512- 4530 Robert J. Stolba,
202/ 512- 8963
Acknowledgments In addition to those named above, Raymond W.
Allen, Leon S. Gill, William E. Petrick, Jr., and John P. Swain
made key contributions to this
report.
(707348) Let t er
Ordering Information The first copy of each GAO report and
testimony is free. Additional copies are $2 each. Orders should be
sent to the following address, accompanied by a check or money
order made out to the Superintendent of Documents, when necessary,
VISA and
MasterCard credit cards are accepted, also. Orders for 100 or more
copies to be mailed to a single address are discounted 25 percent.
Orders by mail: U. S. General Accounting Office P. O. Box 37050
Washington, DC 20013
or visit: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW)
U. S. General Accounting Office Washington, DC
Orders may also be placed by calling (202) 512- 6000 or by using
fax number (202) 512- 6061, or TDD (202) 512- 2537.
Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512- 6000 using a
touchtone phone. A recorded menu will provide information on how
to obtain these lists.
For information on how to access GAO reports on the INTERNET, send
an e- mail message with info in the body to:
info@ www. gao. gov or visit GAO's World Wide Web Home Page at:
http:// www. gao. gov
United States General Accounting Office Washington, D. C. 20548-
0001
Official Business Penalty for Private Use $300
Address Correction Requested Bulk Rate
Postage & Fees Paid GAO Permit No. GI00
*** End of document. ***